EXHIBIT 10.1
LOAN AGREEMENT
DATED AS OF NOVEMBER 17, 2004
AMONG
G&K RECEIVABLES CORP., AS BORROWER,
G&K SERVICES, INC., AS INITIAL SERVICER,
THREE PILLARS FUNDING LLC, AS LENDER,
AND
SUNTRUST CAPITAL MARKETS, INC., AS ADMINISTRATOR
TABLE OF CONTENTS
PAGE
----
ARTICLE I. DEFINITIONS................................................................... 1
Section 1.1 Defined Terms............................................................... 1
Section 1.2 Other Definitional Provisions............................................... 18
Section 1.3 Other Terms................................................................. 18
Section 1.4 Computation of Time Periods................................................. 19
ARTICLE II. THE LENDER'S COMMITMENT, BORROWING PROCEDURES
AND LENDER NOTE............................................................... 19
Section 2.1 Lender's Commitment......................................................... 19
Section 2.2 Borrowing Procedures........................................................ 19
Section 2.3 Funding..................................................................... 19
Section 2.4 Representation and Warranty................................................. 19
Section 2.5 Extension of Lender's Commitment............................................ 20
Section 2.6 Voluntary Termination of Lender's Commitment; Reduction of Facility Limit... 20
Section 2.7 Note........................................................................ 20
Section 2.8 Concentration Accounts...................................................... 21
ARTICLE III.INTEREST, FEES, ETC........................................................... 21
Section 3.1 Interest Rates.............................................................. 21
Section 3.2 Interest Payment Dates...................................................... 22
Section 3.3 Interest Allocations........................................................ 22
Section 3.4 Fees........................................................................ 22
Section 3.5 Computation of Interest and Fees............................................ 22
ARTICLE IV. REPAYMENTS AND PREPAYMENTS; DISTRIBUTION OF
COLLECTIONS................................................................... 23
Section 4.1 Repayments and Prepayments.................................................. 23
Section 4.2 Application of Collections.................................................. 23
Section 4.3 Application of Certain Payments............................................. 24
Section 4.4 Due Date Extension.......................................................... 25
Section 4.5 Making of Payments.......................................................... 25
ARTICLE V. SECURITY INTEREST............................................................. 25
Section 5.1 Grant of Security........................................................... 25
Section 5.2 Administrator Appointed Attorney-in-Fact.................................... 26
Section 5.3 Administrator May Perform................................................... 26
Section 5.4 Release of Collateral....................................................... 27
ii
ARTICLE VI. INCREASED COSTS, ETC.......................................................... 27
Section 6.1 Increased Costs............................................................. 27
Section 6.2 Funding Losses.............................................................. 28
Section 6.3 Withholding Taxes........................................................... 28
ARTICLE VII. CONDITIONS TO BORROWING...................................................... 29
Section 7.1 Initial Loan................................................................ 29
7.1.1 Resolutions......................................................... 29
7.1.2 Consents, etc....................................................... 29
7.1.3 Incumbency and Signatures........................................... 29
7.1.4 Good Standing Certificates.......................................... 29
7.1.5 Financing Statements................................................ 29
7.1.6 Search Reports...................................................... 30
7.1.7 Fee Letter; Payment of Fees......................................... 30
7.1.8 Receivables Sale Agreement.......................................... 30
7.1.9 Opinions of Counsel................................................. 30
7.1.10 Lender Note......................................................... 30
7.1.11 Borrowing Base Certificate.......................................... 30
7.1.12 Concentration Account Agreements.................................... 30
7.1.13 Releases............................................................ 30
7.1.14 Other............................................................... 30
Section 7.2 All Loans................................................................... 30
7.2.1 No Default, etc..................................................... 30
7.2.2 Borrowing Request, etc.............................................. 31
7.2.3 Commitment Termination Date......................................... 31
7.2.4 Collateral Review................................................... 31
7.2.5 Accounts............................................................ 31
ARTICLE VIII. REPRESENTATIONS AND WARRANTIES.............................................. 31
Section 8.1 Existence and Power......................................................... 31
Section 8.2 Power and Authority; Due Authorization, Execution and Delivery.............. 31
Section 8.3 No Conflict................................................................. 32
Section 8.4 Governmental Authorization.................................................. 32
Section 8.5 Actions, Suits.............................................................. 32
Section 8.6 Binding Effect.............................................................. 32
Section 8.7 Accuracy of Information..................................................... 32
Section 8.8 Margin Regulations; Use of Proceeds......................................... 33
Section 8.9 Good Title.................................................................. 33
Section 8.10 Perfection................................................................. 33
Section 8.11 Places of Business and Locations of Records................................ 33
Section 8.12 Accounts................................................................... 33
Section 8.13 No Material Adverse Effect................................................. 33
Section 8.14 Names...................................................................... 33
Section 8.15 Ownership of Borrower; No Subsidiaries..................................... 34
iii
Section 8.16 Not a Holding Company or an Investment Company............................. 34
Section 8.17 Compliance with Credit and Collection Policy............................... 34
Section 8.18 Solvency................................................................... 34
Section 8.19 Eligible Receivables....................................................... 34
Section 8.20 Accuracy of Information.................................................... 34
Section 8.21 Sales by Originators....................................................... 34
ARTICLE IX. COVENANTS OF BORROWER AND SERVICER............................................ 34
Section 9.1 Affirmative Covenants....................................................... 34
9.1.1 Compliance with Laws, Etc........................................... 35
9.1.2 Preservation of Legal Existence..................................... 35
9.1.3 Performance and Compliance with Receivables......................... 35
9.1.4 Credit and Collection Policy........................................ 35
9.1.5 Reporting Requirements.............................................. 35
(a) Financial Statements............................................ 35
(b) Borrowing Base Certificates and Monthly Reports................. 36
(c) Significant Events.............................................. 36
(d) Servicing Certificate........................................... 36
(e) Collateral Review............................................... 36
(f) Other........................................................... 37
9.1.6 Use of Proceeds..................................................... 37
9.1.7 Separate Legal Entity............................................... 37
9.1.8 Adverse Claims on Receivables....................................... 38
9.1.9 Further Assurances.................................................. 38
9.1.10 Servicing........................................................... 39
9.1.11 Inspection.......................................................... 39
9.1.12 Cooperation......................................................... 39
9.1.13 Facility............................................................ 40
9.1.14 Accounts............................................................ 40
Section 9.2 Negative Covenants.......................................................... 40
9.2.1 Sales, Liens, Etc................................................... 40
9.2.2 Mergers, Acquisitions, Sales, Subsidiaries, etc..................... 40
9.2.3 Change in Business; Change in Credit and Collection Policy.......... 41
9.2.4 Other Debt.......................................................... 41
9.2.5 Organizational Documents............................................ 41
9.2.6 Jurisdiction of Organization; Location of Records................... 41
9.2.7 Financing Statements................................................ 41
9.2.8 Business Restrictions............................................... 42
9.2.9 Other Agreements.................................................... 42
ARTICLE X. SIGNIFICANT EVENTS AND THEIR EFFECT............................................ 42
Section 10.1 Events of Default.......................................................... 42
10.1.1 Non-Payment of Loans, Etc........................................... 42
10.1.2 Non-Compliance with Other Provisions................................ 42
10.1.3 Breach of Representations and Warranties............................ 42
iv
10.1.4 Bankruptcy.......................................................... 43
10.1.5 Tax Liens........................................................... 43
Section 10.2 Amortization Events........................................................ 43
10.2.1 Servicer Event of Default........................................... 43
10.2.2 Borrowing Base Deficit.............................................. 43
10.2.3 Default Ratio....................................................... 43
10.2.4 Dilution Ratio...................................................... 43
10.2.5 Delinquency Ratio................................................... 43
10.2.6 Accounts Receivable Turnover Ratio.................................. 43
10.2.7 Event of Default.................................................... 43
10.2.8 Validity of Transaction Documents................................... 43
10.2.9 Termination Date.................................................... 44
10.2.10 Change of Control.................................................. 44
Section 10.3 Effect of Significant Event................................................ 44
ARTICLE XI. THE SERVICER.................................................................. 44
Section 11.1 G&K as Initial Servicer.................................................... 44
Section 11.2 Certain Duties of the Servicer............................................. 45
11.2.1 Authorization to Act as Borrower's Agent............................ 45
11.2.2 Servicer to Act as Servicer......................................... 45
11.2.3 Collections......................................................... 46
11.2.4 Concentration Accounts.............................................. 47
Section 11.3 Servicing Compensation..................................................... 48
Section 11.4 Agreement Not to Resign.................................................... 48
Section 11.5 Designation of Servicer.................................................... 48
Section 11.6 Termination................................................................ 48
Section 11.7 Servicer Events of Default................................................. 48
11.7.1 Failure to Make Payments and Deposits............................... 48
11.7.2 Non-Compliance with Other Provisions................................ 48
11.7.3 Delegation.......................................................... 49
11.7.4 Breach of Representations and Warranties............................ 49
11.7.5 Bankruptcy.......................................................... 49
11.7.6 Judgments........................................................... 49
11.7.7 Cross-Default to Material Debt...................................... 49
ARTICLE XII. ADMINISTRATOR................................................................ 50
Section 12.1 Authorization and Action................................................... 50
Section 12.2 Administrator and Affiliates............................................... 50
ARTICLE XIII. ASSIGNMENTS................................................................. 50
Section 13.1 Restrictions on Assignments................................................ 50
Section 13.2 Documentation.............................................................. 51
Section 13.3 Rights of Assignee......................................................... 51
Section 13.4 Notice of Assignment....................................................... 51
v
ARTICLE XIV. INDEMNIFICATION.............................................................. 51
Section 14.1 General Indemnity of Borrower.............................................. 51
Section 14.2 Indemnity of Servicer...................................................... 51
ARTICLE XV. MISCELLANEOUS................................................................. 52
Section 15.1 No Waiver; Remedies........................................................ 52
Section 15.2 Amendments, Etc............................................................ 52
Section 15.3 Notices, Etc............................................................... 53
Section 15.4 Costs, Expenses and Taxes.................................................. 53
Section 15.5 Binding Effect; Survival................................................... 53
Section 15.6 Captions and Cross References.............................................. 54
Section 15.7 Severability............................................................... 54
Section 15.8 Governing Law.............................................................. 54
Section 15.9 Counterparts............................................................... 54
Section 15.10 Submission to Jurisdiction; Waiver of Trial by Jury........................ 54
Section 15.11 No Recourse Against Lender................................................. 55
Section 15.12 No Proceedings............................................................. 55
Section 15.13 Confidentiality............................................................ 55
Section 15.14 Entire Agreement........................................................... 56
Section 15.15 Limitation on Payments..................................................... 56
EXHIBITS AND SCHEDULES
EXHIBIT A Form of Borrowing Request
EXHIBIT B Form of Lender Note
EXHIBIT C Form of Monthly Report
EXHIBIT D Form of Borrowing Base Certificate
EXHIBIT E Forms of Concentration Account Agreement
SCHEDULE 8.12 Deposit Accounts and Concentration Accounts
SCHEDULE 9.1.5 Collateral Review Requirements
SCHEDULE 15.3 Notice Addresses
vi
LOAN AGREEMENT
THIS LOAN AGREEMENT is made and entered into as of November 17,
2004, among G&K Receivables Corp., a Minnesota corporation ("BORROWER"), G&K
SERVICES, INC., a Minnesota corporation, in its capacity as the initial servicer
(in such capacity, together with its successors and permitted assigns in such
capacity, the "SERVICER"), THREE PILLARS FUNDING LLC, a Delaware limited
liability company (together with its successors and permitted assigns,
"LENDER"), and SUNTRUST CAPITAL MARKETS, INC., a Tennessee corporation, as agent
and administrator for Lender (in such capacity, together with its successor and
assigns in such capacity, the "ADMINISTRATOR").
BACKGROUND
1. Borrower desires that Lender extend financing to Borrower on the
terms and subject to the conditions set forth herein.
2. Lender is willing to provide such financing on the terms and
subject to the conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained, the parties hereto agree as follows:
ARTICLE I.
DEFINITIONS
Section 1.1 Defined Terms. As used in this Agreement, (a)
capitalized terms used and not otherwise defined herein are used with the
meanings attributed thereto in the Receivables Sale Agreement (hereinafter
defined) regardless of whether those capitalized terms are listed below, and (b)
the following terms have the following meanings:
"ACCOUNTS RECEIVABLE TURNOVER RATIO" means, on any date of
determination, the ratio computed as of the most recent Calculation Date by
dividing (a) the aggregate amount of Credit Sales during the 12 fiscal months
ending on such Calculation Date by (b) the average fiscal month-end amount of
the Aggregate Unpaid Balance of Receivables during the 12 fiscal months ending
on such Calculation Date.
"ADMINISTRATOR" has the meaning set forth in the preamble to this
Agreement.
"ADMINISTRATOR'S ACCOUNT" has the meaning set forth in Section 4.5.
"ADVANCE RATE" means the percentage equal to (a) 100% minus (b) the
Reserve Percentage.
"ADVERSE CLAIM" has the meaning specified in the Receivables Sale
Agreement.
1
"AFFECTED PARTY" means each of Lender, any Liquidity Bank, any
permitted assignee of Lender or any Liquidity Bank, any Support Provider and any
holder of a participation interest in the rights and obligations of any
Liquidity Bank or Credit Bank under the Liquidity Agreement or the Credit
Agreement, as the case may be, Administrator and any holding company of Bank.
"AFFILIATE" of any Person means any other Person that (i) directly
or indirectly controls, is controlled by or is under common control with such
Person or (ii) is an officer or director of such Person. A Person shall be
deemed to be "controlled by" another Person if such other Person possesses,
directly or indirectly, power (a) to vote 5% or more of the securities (on a
fully diluted basis) having ordinary voting power for the election of directors
or managing partners of such other Person, or (b) to direct or cause the
direction of the management and policies of such other Person whether by
contract or otherwise. The word "AFFILIATED" has a correlative meaning.
"AGGREGATE UNPAID BALANCE" means, on any date of determination, the
aggregate Unpaid Balance of all Eligible Receivables at such time.
"AGREEMENT" means this Loan Agreement, as it may be amended,
supplemented, restated or otherwise modified from time to time in accordance
with the terms hereof.
"ALLOCATIONS" has the meaning set forth in Section 3.3.
"ALTERNATIVE RATE" means, for any Interest Period, an interest rate
per annum equal to either (a) the LIBOR Rate or (b) if the LIBOR Rate is
unavailable for any reason or there is less than two (2) Business Days' prior
notice to the Liquidity Banks of any funding by them, the Base Rate.
"ALTERNATIVE RATE ALLOCATION" has the meaning set forth in Section
3.3.
"AMORTIZATION EVENT" means any of the events described in Section
10.2.
"APPLICABLE MARGIN" has the meaning specified in the Fee LETTER.
"BANK" means SunTrust Bank, a Georgia banking corporation.
"BANKRUPTCY CODE" means the Bankruptcy Code, 11 U.S.C. Section.101,
et seq., as amended.
"BASE RATE" means, on any date of determination, a fluctuating rate
of interest per annum equal to the higher of (i) the Prime Rate, or (ii) the
Federal Funds Rate most recently determined by Bank plus 0.50% per annum.
"BORROWER" has the meaning set forth in the preamble to this
Agreement.
"BORROWING BASE" means, on any date of determination, an amount
equal to the product of (a) the Advance Rate as of the more recent to occur of
the Interim Calculation Date or the Calculation Date times (b) the excess, if
any, of (i) the Aggregate Unpaid Balance as of the
2
more recent to occur of the Interim Calculation Date or Calculation Date
immediately preceding such date of determination, over (ii) the Excess
Concentration Amount for all Obligors as of the last Business Day of the most
recent Interim Calculation Date or Calculation Date.
"BORROWING BASE CERTIFICATE" means a certificate, substantially in
the form of Exhibit D hereto, duly executed by an authorized officer of
Servicer.
"BORROWING BASE DEFICIT" means, on any date of determination, an
amount equal to the excess, if any, of (a) the aggregate principal amount of all
outstanding Loans at such time over (b) the Borrowing Base (as reflected in the
most recent Borrowing Base Certificate or Monthly Report).
"BORROWING REQUEST" has the meaning set forth in Section 2.2.
"BUSINESS DAY" means any day on which (a) Bank is not authorized or
required to be closed for business in Atlanta, Georgia, and The Depository Trust
Company of New York is open for business, and (b) commercial banks in New York
City are not authorized or required to be closed and, in the case of a Rate
Setting Date for Loans bearing interest by reference to the LIBOR Rate, banks
are open for business in London, England.
"CALCULATION DATE" means the last Business Day of each Calculation
Period.
"CALCULATION PERIOD" means a fiscal month.
"CHARGE-OFF" means a Receivable not previously deemed a Defaulted
Receivable that is written-off by the Servicer or should, in accordance with the
Credit and Collection Policy, be written-off.
"CLOSING DATE" means the later to occur of (a) November 18, 2004, or
(b) the date of the first Loan hereunder.
"COLLATERAL" has the meaning set forth in Section 5.1(a).
"COLLATERAL REVIEW" means a report of Commercial Lending Consultants
or another firm acceptable to Administrator which satisfies the requirements set
forth on Schedule 9.1.5.
"COLLECTIONS" has the meaning set forth in the Receivables Sale
Agreement.
"COMMERCIAL PAPER NOTES" means short-term promissory notes issued by
Lender to fund its Loans or investments in receivables or other financial
assets.
"COMMERCIAL PAPER RATE" means, for any Interest Period for all or
any portion of the related CP Allocation, a rate per annum equal to the sum of
(i) the rate or, if more than one rate, the weighted average of the rates,
determined by converting to an interest-bearing equivalent rate per annum the
discount rate (or rates) at which Commercial Paper Notes outstanding during such
Interest Period have been or may be sold by any placement agent or commercial
paper dealer selected by Administrator, plus (ii) the commissions and charges
3
charged by such placement agent or commercial paper dealer with respect to such
Commercial Paper Notes, expressed as a percentage of the face amount thereof and
converted to an interest-bearing equivalent rate per annum.
"COMMITMENT TERMINATION DATE" means the earliest to occur of (i) the
Scheduled Commitment Termination Date, (ii) the date of any termination of the
Lender's Commitment pursuant to Section 2.6, (iii) the effective date on which
the Lender's Commitment is terminated pursuant to Section 10.3, (iv) the
Liquidity Termination Date, (v) termination of the Credit Banks' commitments
under the Credit Agreement, and (vi) the date on which any purchase or other
funding is made pursuant to the Liquidity Agreement.
"CONCENTRATION ACCOUNT" means each of the accounts designated as a
concentration account on Schedule 8.12 hereto maintained in Borrower's name.
"CONCENTRATION ACCOUNT AGREEMENT" means an agreement by and among
Borrower, Administrator and the bank at which a Concentration Account is
maintained, in substantially the form of one of the agreements attached hereto
as Exhibit E (or as otherwise approved by Administrator), specifying the rights
of Lender and Administrator in a Concentration Account.
"CONCENTRATION LIMIT" means:
(a) for any other Obligor whose short term unsecured debt ratings
are at least both "A-1" from S&P and "P-1" from Xxxxx'x, 4.0% of the
Aggregate Unpaid Balance; or
(b) for all municipal and state Government Obligors in the
aggregate, 3.0% of the Aggregate Unpaid Balance; and
(c) for any other Obligor, 2.0% of the Aggregate Unpaid Balance;
PROVIDED that (1) the limitations set forth in the foregoing clauses (a), (b)
and (c) shall apply to each specified Obligor and its Affiliates, considered as
if they were one and the same Person.
"CONTRACT" has the meaning set forth in the Receivables Sale
Agreement.
"COVERED TAXES" means Taxes other than Excluded Taxes.
"CP ALLOCATION" has the meaning set forth in Section 3.3.
"CP TRANCHE PERIOD" means, with respect to all or any portion of the
CP Allocation, a period of days from 1 Business Day up to 35 consecutive days
commencing on a Business Day which period is either (a) requested by Borrower
and agreed to by Lender (or by Administrator on Lender's behalf) or (b) in the
absence of such request and agreement, selected by Lender (or by Administrator
on Lender's behalf) and ends on the maturity date of such related commercial
paper.
4
"CREDIT ADVANCE" means a drawing under a letter of credit issued
pursuant to a Credit Agreement for the account of Lender, a loan to Lender under
a Credit Agreement or any other advance or disbursement of funds to Lender or
for Lender's account pursuant to a Credit Agreement or any such letter of
credit, in each case to the extent such drawing, loan, advance or disbursement
has not been repaid or reimbursed to Credit Bank in accordance with the related
Credit Agreement.
"CREDIT AGREEMENT" means and includes any program-wide agreement
entered into by any Credit Bank providing for the issuance of one or more
letters of credit for the account of Lender, the issuance of one or more surety
bonds for which Lender is obligated to reimburse the applicable Credit Bank for
any drawings hereunder, the sale by Lender to any Credit Bank of receivables or
other financial assets owned or held by Lender (or portions thereof) and/or the
making of loans and/or other extensions of credit to Lender in connection with
its commercial paper program, together with any cash collateral agreement,
letter of credit, surety bond or other agreement or instrument executed and
delivered in connection therewith (but excluding the Liquidity Agreement, or
similar agreement, or any voluntary advance agreement).
"CREDIT AND COLLECTION POLICY" has the meaning set forth in the
Receivables Sale Agreement
"CREDIT BANK" means and includes Bank and any other or additional
bank or other Person (other than Borrower or other customer of Lender or any
liquidity provider as such) now or hereafter extending credit or a purchase
commitment to or for the account of Lender or issuing a letter of credit, surety
bond or other instrument, in each case to support any obligations arising under
or in connection with Lender's commercial paper program.
"CREDIT SALES" means, for any period of determination, the
Outstanding Balance of all Receivables originated by the Originators during such
period.
"DAYS SALES OUTSTANDING RATIO" means, on any date of determination,
the ratio computed as of the most recent Calculation Date by dividing (a) 360 by
(b) the Accounts Receivable Turnover Ratio for the Calculation Period ending on
such Calculation Date.
"DEBT" of any Person means, without duplication, (i) all
indebtedness of such Person for borrowed money, (ii) all indebtedness of such
Person for the deferred purchase price of property or services (other than
property and services purchased, and expense accruals and deferred compensation
items arising, in the ordinary course of business), (iii) all obligations of
such Person evidenced by notes, bonds, debentures or other similar instruments
(other than performance, surety and appeal bonds arising in the ordinary course
of business), (iv) all indebtedness of such Person created or arising under any
conditional sale or other title retention agreement with respect to property
acquired by such Person (even though the rights and remedies of the seller or
lender under such agreement in the event of default are limited to repossession
or sale of such property), (v) all obligations of such Person under leases which
have been or should be, in accordance with GAAP, recorded as capital leases, to
the extent required to be so recorded, (vi) all reimbursement, payment or
similar obligations of such Person, contingent or otherwise, under acceptance,
letter of credit or similar facilities (other than letters of credit in support
of trade obligations or in connection with workers' compensation, unemployment
insurance, old-
5
age pensions and other social security benefits in the ordinary course of
business), (vii) all net obligations of such Person in respect of interest rate
swap, cap, collar, swaption, option or similar agreements, (viii) all
obligations arising in connection with a sale or other transfer of any of such
Person's financial assets which are, or are intended to be, classified as loans
for federal tax purposes, (ix) all Debt referred to in clauses (i) through
(viii) above guaranteed directly or indirectly by such Person, or in effect
guaranteed directly or indirectly by such Person through an agreement (A) to pay
or purchase such Debt or to advance or supply funds for the payment or purchase
of such Debt, (B) to purchase, sell or lease (as lessee or lessor) property, or
to purchase or sell services, primarily for the purpose of enabling the debtor
to make payment of such Debt or to assure the holder of such Debt against loss
in respect of such Debt, (C) to supply funds to or in any other manner invest in
the debtor (including any agreement to pay for property or services irrespective
of whether such property is received or such services are rendered) or (D)
otherwise to assure a creditor against loss in respect of such Debt, and (x) all
Debt referred to in clauses (i) through (viii) above secured by (or for which
the holder of such Debt has an existing right, contingent or otherwise, to be
secured by) any lien, security interest or other charge or encumbrance upon or
in property (including, without limitation, accounts and contract rights) owned
by such Person, even though such Person has not assumed or become liable for the
payment of such Debt.
"DEFAULT RATE" has the meaning set forth in Section 3.1(c).
"DEFAULT RATIO" means, on any date of determination, the ratio
(expressed as a percentage) computed as of the most recent Calculation Date by
dividing (a) the Aggregate Unpaid Balance of Receivables that became Defaulted
Receivables during the Calculation Period ending on such Calculation Date, by
(b) Credit Sales for the Calculation Period ending 4 fiscal months prior to such
Calculation Date.
"DEFAULTED RECEIVABLE" means, as of any date of determination, any
Receivable (i) which the Servicer has or should have charged-off or deemed
uncollectible in accordance with the Credit and Collection Policy after taking a
reasonable time to apply Collections received to applicable invoices and
reconcile the amount of such Receivable, (ii) as to which, as of such date of
determination, any payment, or part thereof, remains unpaid for 121 days or more
past the Invoice Date for such payment, determined by reference to the original
contractual payment terms of such Receivable or (iii) as to which the Obligor
thereon has suffered an Event of Bankruptcy.
"DELINQUENCY RATIO" means, as of any date of determination, the
ratio (expressed as a percentage) computed as of the last day of the Calculation
Period then most recently ended, by dividing (a) the Unpaid Balance of
Receivables that are Delinquent Receivables as of the last day of such
Calculation Period by (b) an amount equal to the Aggregate Unpaid Balance as of
the last day of such Calculation Period, minus the aggregate Excess
Concentration Amount as of the last day of such Calculation Period.
"DELINQUENT RECEIVABLE" means, as of any date of determination, any
Receivable (other than a Defaulted Receivable) as to which, as of such date of
determination, any payment, or part thereof, remains unpaid for 91 days or more
past the Invoice Date for such payment.
6
"DEPOSIT ACCOUNT" means any depositary account of Borrower (other
than a Concentration Account) which is listed on Schedule 8.12 hereto into which
proceeds of Receivables are deposited and from which all available funds are
swept each Business Day into a Concentration Account.
"DEPOSIT DATE" has the meaning set forth in Section 11.2.4(b).
"DESIGNATED OBLIGOR" means, at any time, each Obligor and its
Affiliates; provided, however, that any Obligor shall cease to be a Designated
Obligor three (3) Business Days after notice is given by the Administrator.
"DILUTION HORIZON RATIO" means, on any date of determination, the
ratio computed by dividing (a) the sum of (i) Credit Sales for the Calculation
Period then most recently ended plus (ii) 20% of Credit Sales for the prior
Calculation Period, by (b) an amount equal to the Aggregate Unpaid Balance as of
the last day of the Calculation Period then most recently ended, minus the
aggregate Excess Concentration Amount as of the last day of such Calculation
Period.
"DILUTION RATIO" means, as of any date of determination, the ratio
(expressed as a percentage) computed as of the most recent Calculation Date by
dividing (a) Dilutions for the Calculation Period ending on such Calculation
Date by (b) Credit Sales for the Calculation Period ending 1 fiscal month prior
to such Calculation Date.
"DILUTION RESERVE" means, on any date of determination, the product
computed as of the most recent Calculation Date, of (a) the sum of (i) the
product of (x) the Stress Factor times (y) the Expected Dilution Ratio plus (ii)
the product of (x) the positive difference, if any, between (1) the Dilution
Spike Rate less (2) the Expected Dilution Ratio times (y) a ratio computed by
dividing (1) the Dilution Spike Rate by (2) the Expected Dilution Ratio times
(b) the Dilution Horizon Ratio.
"DILUTION SPIKE RATE" means, on any date of determination, the
highest Dilution Ratio over the 12-month fiscal period ending on the most recent
Calculation Date.
"DILUTIONS" means, for any period of determination, the aggregate
amount of returns, allowances, net credits and any other non-cash reductions to
the Credit Sales during such period.
"DISTRIBUTION DATE" means the 12th day of each calendar month after
the Closing Date (or, if such day is not a Business Day, the Business Day
immediately thereafter).
"DOCUMENTS" means all documentation relating to the Receivables
including, without limitation, the Contracts, billing statements and computer
records and programs.
"DOLLAR(S)" and the sign "$" shall mean lawful money of the United
States of America.
"ELIGIBLE RECEIVABLE" means each Receivable that meets the following
criteria:
7
(a) that was created by the applicable Originator in compliance, in
all material respects, with its Credit and Collection Policy, in the
regular and ordinary course of the business of such Originator;
(b) the Obligor of which is a Designated Obligor;
(c) that was documented in all material respects in compliance with
the applicable Originator's standard administration and documentation
policies and procedures;
(d) is not a Defaulted Receivable or a Delinquent Receivable;
(e) as to which, at the time of the sale or contribution of such
Receivable to Borrower, the transferring Originator was the sole owner
thereof and had good and marketable title thereto, free and clear of all
Adverse Claims, and which was sold or contributed to Borrower pursuant to
the Receivables Sale Agreement free and clear of all Adverse Claims other
than in favor of Administrator;
(f) the assignment of which by the applicable Originator to Borrower
pursuant to the Receivables Sale Agreement does not contravene or conflict
with any law, rule or regulation or any contractual or other restriction,
limitation or encumbrance, and the sale or assignment of which does not
require the consent of the Obligor thereof;
(g) which is denominated and payable in Dollars and is only payable
in the United States of America;
(h) the Obligor of which is a resident of the United States;
(i) the Obligor of which is not an officer, director or Affiliate of
any Originator or Borrower and is not the United States government or any
agency thereof;
(j) that is in full force and effect and constitutes the legally
valid and binding payment obligation of the Obligor with respect thereto,
enforceable against such Obligor in accordance with its terms and is not
subject to any right of rescission, setoff, counterclaim or defense
(including the defense of usury) or to any repurchase obligation or return
right;
(k) that does not contravene any applicable requirements of law
(including without limitation all laws, rules and regulations relating to
truth in lending, fair credit billing, fair credit reporting, fair debt
collection practices and privacy) and which complies with all applicable
requirements of law and with respect to which all consents, licenses,
approvals or authorizations of, or registrations or declarations with, any
governmental authority required to be obtained, effected or given by the
related Originator in connection with the
8
creation or the execution, delivery and performance of such Receivable,
have been duly obtained, effected or given and are in full force and
effect;
(l) that complies with all applicable requirements of the applicable
Credit and Collection Policy;
(m) as to which each of Borrower's and Administrator's (for the
benefit of the Secured Parties) first priority security interest in such
Receivable has been perfected under the applicable Uniform Commercial Code
and other applicable laws;
(n) as to which the Servicer is in possession of the related
Receivable File;
(o) which provides for repayment in full of the Unpaid Balance
thereof within 30 days of the date of the creation thereof;
(p) the terms of which have not been modified or waived except as
permitted under the Credit and Collection Policy and this Agreement;
(q) which constitutes an "account" or a "payment intangible" under
and as defined in Article 9 of the Uniform Commercial Code of all
applicable jurisdictions;
(r) which is not subject to any dispute, right of rescission,
set-off, counterclaim or any other defense (including defenses arising out
of violations of usury laws) of the applicable Obligor against any
Originator or any other Adverse Claim, and the Obligor thereon holds no
right as against such Originator to cause such Originator to repurchase
the goods the sale of which shall have given rise to such Receivable
(except with respect to sale discounts effected pursuant to the Contract,
or goods returned in accordance with the terms of the Contract);
(s) the applicable Originator has satisfied and fully performed all
obligations on its part with respect to such Receivable required to be
fulfilled by it, and no further action is required to be performed by any
Person with respect thereto other than payment thereon by the applicable
Obligor; and
(t) is not a xxxx-and-hold Receivable.
"EVENT OF BANKRUPTCY" shall be deemed to have occurred with respect
to a Person if either:
(a) a case or other proceeding shall be commenced, without the
application or consent of such Person, in any court, seeking the
liquidation, reorganization, debt arrangement, dissolution, winding up, or
composition or readjustment of debts of such Person, the appointment of a
trustee, receiver, custodian, liquidator, assignee, sequestrator or the
like for such Person or all or substantially all of its assets, or any
similar action with respect to such Person
9
under any law relating to bankruptcy, insolvency, reorganization, winding
up or composition or adjustment of debts and, solely in the case of the
Borrower, such case or proceeding shall continue undismissed, or unstayed
and in effect, for a period of 60 consecutive days; or an order for relief
in respect of such Person shall be entered in an involuntary case under
the federal bankruptcy laws or other similar laws now or hereafter in
effect; or
(b) such Person shall commence a voluntary case or other proceeding
under any applicable bankruptcy, insolvency, reorganization, debt
arrangement, dissolution or other similar law now or hereafter in effect,
or shall consent to the appointment of or taking possession by a receiver,
liquidator, assignee, trustee, custodian, sequestrator (or other similar
official) for such Person or for any substantial part of its property, or
shall make any general assignment for the benefit of creditors, or shall
fail to, or admit in writing its inability to, pay its debts generally as
they become due, or, if a corporation or similar entity, its board of
directors shall vote to implement any of the foregoing.
"EVENT OF DEFAULT" means any of the events described in Section
10.1.
"EXCESS CONCENTRATION AMOUNT" means, on any date of determination,
with respect to any Obligor and its Affiliates considered as if they were one
and the same Obligor, the amount, if any, by which the Aggregate Unpaid Balance
of such Obligor and its Affiliates at such time exceeds the Concentration Limit
for such Obligor and its Affiliates at such time.
"EXCLUDED TAXES" means, in the case of any Indemnified Party, taxes
imposed on its overall net income, and franchise taxes and branch profit taxes
based on net income, imposed on it by (i) the jurisdiction under the laws of
which such Indemnified Party is organized or (ii) the jurisdiction in which such
Indemnified Party's principal executive office is located.
"EXPECTED DILUTION RATIO" means, on any date of determination, the
rolling twelve-fiscal-month average Dilution Ratio for the 12-month period
ending on the most recent Calculation Date.
"EXTENSION FEE" has the meaning provided in the Fee Letter.
"FACILITY LIMIT" means $50,000,000.
"FEDERAL FUNDS RATE" means, for any period, the per annum rate set
forth in the weekly statistical release designated as H.15(519), or any
successor publication, published by the Federal Reserve Board (including any
such successor, "H.15(519)") for such day opposite the caption "Federal Funds
(Effective)." If on any relevant day such rate is not yet published in
H.15(519), the rate for such day will be the rate set forth in the daily
statistical release designated as the Composite 3:30 p.m. Quotations for U.S.
Government Securities, or any successor publications, published by the Federal
Reserve Bank of Atlanta (including any such successor, the "COMPOSITE 3:30 P.M.
QUOTATIONS") for such day under the caption "Federal Funds Effective Rate." If
on any relevant day the appropriate rate for such previous day is not yet
published in either H.15(519) or the Composite 3:30 p.m. Quotations, the rate
for such day will be the arithmetic mean as determined by Bank of the rates for
the last transaction in overnight Federal
10
funds arranged prior to 9:00 a.m. (New York time) on that day by each of three
leading brokers of Federal funds transactions in New York City selected by Bank.
"FEE LETTER" has the meaning set forth in Section 3.4.
"FEES" means all fees and other amounts payable by Borrower to
Administrator or Lender pursuant to the Fee Letter.
"G&K" means G&K Services, Inc., a Minnesota corporation, and its
successors.
"GAAP" has the meaning set forth in the Receivables Sale Agreement.
"GOVERNMENT OBLIGOR" means any Obligor that is a Governmental
Authority.
"GOVERNMENTAL AUTHORITY" has the meaning set forth in the
Receivables Sale Agreement.
"INDEMNIFIED AMOUNTS" has the meaning set forth in Section 14.1.
"INDEMNIFIED PARTY" has the meaning set forth in Section 14.1.
"INTEREST PERIOD" means:
(a) with respect to any CP Allocation, its CP Tranche Period;
(b) with respect to any Alternative Rate Allocation, (i) initially,
the period commencing on the date of the initial establishment of such
Allocation and ending on (but excluding) the Business Day immediately
preceding the next following Scheduled Interest Payment Date, and (ii)
thereafter, each period commencing on (and including) the Business Day
immediately preceding a Scheduled Interest Payment Date and ending on (but
excluding) the Business Day immediately preceding the next following
Scheduled Interest Payment Date;
PROVIDED, HOWEVER, that if any Interest Period for any Allocation that commences
before the Commitment Termination Date would otherwise end on a date occurring
after such Commitment Termination Date, such Interest Period shall end on such
Commitment Termination Date and the duration of each such Interest Period that
commences on or after the Commitment Termination Date, if any, shall be of such
duration as shall be selected by Administrator.
"INTERIM CALCULATION DATE" means the last Business Day of the first
three fiscal weeks in each Calculation Period.
"INVOICE DATE" means the date of creation of a Receivable.
"LENDER" has the meaning set forth in the preamble to this
Agreement.
"LENDER NOTE" has the meaning set forth in Section 2.7.
"LENDER'S COMMITMENT" has the meaning set forth in Section 2.1.
11
"LIABILITIES" means, with respect to any Person, all obligations of
such Person which would, in accordance with GAAP, be classified on a balance
sheet as liabilities, including, without limitation, (i) Debt secured by liens
against property of such Person whether or not such Person is liable for the
payment thereof and (ii) deferred liabilities.
"LIBOR RATE" means, for any Interest Period, the rate per annum on
the Rate Setting Day of such Interest Period shown on page 3750 of Telerate or
any successor page as the composite offered rate for London interbank deposits
for one month, as shown under the heading "USD" as of 11:00 a.m. (London time);
PROVIDED that in the event no such rate is shown, the LIBOR Rate shall be the
rate per annum (rounded upwards, if necessary, to the nearest 1/16th of one
percent) based on the rates at which Dollar deposits for one month are displayed
on page "LIBOR" of the Reuters Screen as of 11:00 a.m. (London time) on the Rate
Setting Day (it being understood that if at least two (2) such rates appear on
such page, the rate will be the arithmetic mean of such displayed rates);
PROVIDED FURTHER, that in the event fewer than two (2) such rates are displayed,
or if no such rate is relevant, the LIBOR Rate shall be the rate per annum equal
to the average of the rates at which deposits in Dollars are offered by
Administrator at approximately 11:00 a.m. (London time) on the Rate Setting Day
to prime banks in the London interbank market for a one month.
"LIQUIDITY AGREEMENT" means and includes (a) the Liquidity Asset
Purchase Agreement (regarding G&K Receivables Corp.), dated as of November 17,
2004, among Lender, as borrower, Bank, as liquidity agent for the Liquidity
Banks, Administrator, and the Liquidity Banks, or (b) any other agreement
hereafter entered into by Lender providing for the sale by Lender of Loans (or
portions thereof), or the making of loans or other extensions of credit to
Lender secured by security interests in the Loans (or portions thereof), to
support all or part of Lender's payment obligations under the Commercial Paper
Notes or to provide an alternate means of funding Lender's investments in
accounts receivable or other financial assets, in each case as amended,
supplemented, restated or otherwise modified from time to time.
"LIQUIDITY BANK" means and includes Bank and the various financial
institutions as are, or may become, parties to the Liquidity Agreement, as
purchasers thereunder.
"LIQUIDITY TERMINATION DATE" means the earlier to occur of (a)
November 16, 2005, as such date may be extended from time to time by the
Liquidity Banks in accordance with the Liquidity Agreement, and (b) the
occurrence of an Event of Bankruptcy with respect to Lender.
"LOAN" means any amount disbursed as principal by Lender to Borrower
under this Agreement.
"LOSS HORIZON RATIO" means, on any date of determination, the ratio
computed as of the most recent Calculation Date by dividing (a) the sum of (i)
Credit Sales for the most recent three Calculation Periods, plus (ii) 75% of
Credit Sales for the Calculation Period ending 4 fiscal months prior to such
Calculation Date, by (b) an amount equal to the Aggregate Unpaid Balance as of
such Calculation Date, minus the aggregate Excess Concentration Amount as of
such Calculation Date.
12
"LOSS RESERVE" means, on any date of determination, the product of
(a) the highest rolling 3-fiscal-month average Default Ratio over the 12 fiscal
months ending on the most recent Calculation Date, times (b) the Loss Horizon
Ratio as of such Calculation Date, times (c) the Stress Factor.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (a) on
the business, property, condition (financial or otherwise) or results of
operations or prospects of (i) Servicer and its Subsidiaries taken as a whole,
or (ii) Borrower, (b) the ability of Borrower or Servicer to perform its
respective obligations under the Agreement or any other Transaction Document to
which it is a party, (c) the legality, validity or enforceability of the
Agreement or any other Transaction Document, (d) the existence, validity,
perfection or priority of (i) Administrator's (for the benefit of the Secured
Parties) security interest in the Collateral, or (ii) Borrower's ownership
interest in the Receivables; or (e) the validity, enforceability or
collectibility of the Receivables generally or of any material portion of the
Receivables.
"MATERIAL DEBT" has the meaning specified in Section 11.7.7.
"MONTHLY REPORT" means a report, substantially in the form of
Exhibit C or in such other form acceptable to Administrator, prepared by
Servicer as of the Calculation Date then most recently occurring signed by an
authorized officer of Servicer.
"MOODY'S" means Xxxxx'x Investors Service, Inc.
"OBLIGATIONS" means all obligations (monetary or otherwise) of
Borrower to Lender, Administrator, any Affected Party or any Indemnified Party
and their respective successors, permitted transferees and assigns arising under
or in connection with this Agreement, the Lender Note and each other Transaction
Document, in each case however created, arising or evidenced, whether direct or
indirect, absolute or contingent, now or hereafter existing, or due or to become
due.
"OBLIGOR" means, with respect to any Receivable, each Person
obligated to make payments with respect to such Receivable, including any
guarantor thereof.
"ORGANIZATIONAL DOCUMENTS" has the meaning specified in the
Receivables Sale Agreement.
"ORIGINATOR" has the meaning specified in the Receivables Sale
Agreement.
"OUTSTANDING BALANCE" has the meaning specified in the Receivables
Sale Agreement.
"PERMITTED INVESTMENT" means, at any time:
(i) marketable obligations issued by, or the full and timely payment
of which is directly and fully guaranteed or insured by, the United States
government or any other government with an equivalent rating, or any
agency or instrumentality thereof when such marketable obligations are
backed by the full faith and credit of the United States government or
such other equivalently rated
13
government, as the case may be, but excluding any securities which are
derivatives of such obligations;
(ii) time deposits, bankers' acceptances and certificates of deposit
of any domestic commercial bank or any United States branch or agency of a
foreign commercial bank which (x) has capital, surplus and undivided
profits in excess of $100,000,000 and which has a commercial paper or
certificate of deposit rating meeting the requirements specified in clause
(iii) below (or equivalent rating from the Rating Agencies) or (y) is set
forth in a list (which may be updated from time to time) (A) approved by
Administrator and (B) with respect to which a written statement has been
obtained from each of the Rating Agencies to the effect that the rating of
the Commercial Paper Notes will not be downgraded or withdrawn solely as a
result of the acquisition of such investments;
(iii) commercial paper which is (x) rated at least as high as the
Commercial Paper Notes by the Rating Agencies, or (y) set forth in a list
(which may be updated from time to time) (A) approved by Administrator and
(B) with respect to which a written statement has been obtained from each
of the Rating Agencies to the effect that the rating of the Commercial
Paper Notes will not be downgraded or withdrawn solely as a result of the
acquisition of such investments;
(iv) secured repurchase obligations for underlying securities of the
types described in clauses (i) and (ii) above entered into with any bank
of the type described in clause (ii) above; and
(v) freely redeemable shares in money market funds which invest
solely in obligations, bankers' acceptances, time deposits, certificates
of deposit, repurchase agreements and commercial paper of the types
described in clauses(i) through (iv) above, without regard to the
limitations as to the maturity of such obligations, bankers' acceptances,
time deposits, certificates of deposit, repurchase agreements or
commercial paper set forth below, which are rated at least "AAm" or "AAmg"
or their equivalent by both Rating Agencies, PROVIDED that there is no
"r-highlighter" affixed to such rating.
"PERSON" has the meaning set forth in the Receivables Sale Agreement
"PRIME RATE" means as of any date of determination, the rate of
interest most recently announced by Bank at its principal office in Atlanta,
Georgia as its prime rate (it being understood that at any one time there shall
exist only one such prime rate so announced, which rate is not necessarily
intended to be the lowest rate of interest determined by Bank in connection with
extensions of credit).
"PROGRAM DOCUMENTS" means the Liquidity Agreement, the Credit
Agreement, the Voluntary Advance Agreement, the documents under which
Administrator performs its obligations with respect to Lender's commercial paper
program and the other documents to be
14
executed and delivered in connection therewith, as amended, supplemented,
restated or otherwise modified from time to time.
"PURCHASE PRICE CREDIT" has the meaning set forth in the Receivables
Sale Agreement
"RATE SETTING DAY" means, for any Interest Period, two (2) Business
Days prior to the commencement of such Interest Period. In the event such day is
not a Business Day, then the Rate Setting Day shall be the immediately preceding
Business Day.
"RATING AGENCIES" means S&P and Moody's.
"RECEIVABLE" has the meaning specified in the Receivables Sale
Agreement.
"RECEIVABLE FILE" means with respect to a Receivable, (i) the
Contract giving rise to the Receivable and other evidences of the Receivable
including, without limitation, tapes, discs, punch cards and related property
and rights and (ii) each UCC financing statement related thereto, if any.
"RECEIVABLES SALE AGREEMENT" means the Receivables Sale Agreement,
dated as of November 17, 2004, by and among Originators, as sellers, and
Borrower, as buyer, as such Receivables Sale Agreement may be amended,
supplemented, restated or otherwise modified from time to time with the prior
written consent of Administrator.
"REGULATORY CHANGE" means, relative to any Affected Party:
(a) any change in (or the adoption, implementation, change in the
phase-in or commencement of effectiveness of) any: (i) United States
Federal or state law or foreign law applicable to such Affected Party,
(ii) regulation, interpretation, directive, requirement or request
(whether or not having the force of law) applicable to such Affected Party
of (A) any court or government authority charged with the interpretation
or administration of any law referred to in clause (a)(i), or of (B) any
fiscal, monetary or other authority having jurisdiction over such Affected
Party, or (iii) GAAP or regulatory accounting principles applicable to
such Affected Party and affecting the application to such Affected Party
of any law, regulation, interpretation, directive, requirement or request
referred to in clause (a)(i) or (a)(ii) above;
(b) any change in the application to such Affected Party of any
existing law, regulation, interpretation, directive, requirement, request
or accounting principles referred to in clause (a)(i), (a)(ii) or (a)(iii)
above; or
(c) the issuance, publication or release of any regulation,
interpretation, directive, requirement or request of a type described in
clause (a)(ii) above to the effect that the obligations of any Liquidity
Bank under the Liquidity Agreement are not entitled to be included in the
zero percent category of off-balance sheet assets for purposes of any
risk-weighted capital guidelines applicable to such Liquidity Bank or any
related Affected Party.
15
"RELATED SECURITY" has the meaning specified in the Receivables Sale
Agreement.
"REQUIRED CAPITAL AMOUNT" has the meaning specified in the
Receivables Sale Agreement.
"REQUIREMENTS OF LAW" for any Person or any of its property shall
mean the Organizational Documents of such Person or any of its property, and any
statute, law, treaty, rule or regulation, or determination of an arbitrator or
Governmental Authority, in each case applicable to or binding upon such Person
or any of its property or businesses or to which such Person or any of its
property or businesses is subject, whether federal, state or local.
"RESERVE FLOOR" means, for any Calculation Period, the sum of (a)
10% plus, (b) the product of (i) the Expected Dilution Ratio, multiplied by (ii)
the Dilution Horizon.
"RESERVE PERCENTAGE" means the percentage equal to the greater of
(a) the sum of (i) the Loss Reserve, (ii) the Dilution Reserve, (iii) the Yield
Reserve, and (iv) the Servicing Reserve, and (b) the Reserve Floor.
"S&P" means Standard & Poor's Ratings Group, a division of The
XxXxxx-Xxxx Companies, Inc.
"SCHEDULED COMMITMENT TERMINATION DATE" means October 23, 2007, as
extended from time to time by mutual agreement of the parties hereto.
"SCHEDULED INTEREST PAYMENT DATE" means, with respect to each Loan,
each Distribution Date hereafter.
"SECURED OBLIGATIONS" has the meaning set forth in Section 5.1(b).
"SECURED PARTIES" means Lender, Administrator and each Indemnified
Party, and the successors and permitted assigns of each of the foregoing.
"SERVICER" means G&K, or any successor Servicer appointed as
provided in Section 11.5.
"SERVICER EVENT OF DEFAULT" shall have the meaning specified in
Section 11.7.
"SERVICING FEE" means, as to any Calculation Period, the fee payable
to the Servicer which, so long as G&K or one of its Affiliates is the Servicer,
shall be equal to the Servicing Fee Rate divided by 12 multiplied by the
Aggregate Unpaid Balance at the beginning of such Calculation Period. The
Servicing Fee for any successor Servicer shall be equal to the fee reasonably
agreed to by Administrator and such successor Servicer.
"SERVICING FEE RATE" means 2.40%.
"SERVICING RESERVE" means, on any date of determination, the product
of: (a) the highest Day Sales Outstanding Ratio during the 12 fiscal months
ending on the most recent Calculation Date, (b) the Stress Factor, (c) 2.40%,
and (d) 1/360.
16
"SIGNIFICANT EVENT" means any Amortization Event or Event of
Default.
"SOLVENT" means with respect to any Person that as of the date of
determination both (A)(i) the then fair saleable value of the property of such
Person is (y) greater than the total amount of liabilities (including contingent
liabilities) of such Person and (z) not less than the amount that will be
required to pay the probable liabilities on such Person's then existing debts as
they become absolute and matured considering all financing alternatives and
potential asset sales reasonably available to such Person; (ii) such Person's
capital is not unreasonably small in relation to its business or any
contemplated or undertaken transaction; and (iii) such Person does not intend to
incur, or believe (nor should it reasonably believe) that it will incur, debts
beyond its ability to pay such debts as they become due; and (B) such Person is
"solvent" within the meaning given that term and similar terms under applicable
laws relating to fraudulent transfers and conveyances. For purposes of this
definition, the amount of any contingent liability at any time shall be computed
as the amount that, in light of all of the facts and circumstances existing at
such time, represents the amount that can reasonably be expected to become an
actual or matured liability.
"STRESS FACTOR" means 2.0.
"SUBORDINATED NOTE" has the meaning specified in the Receivables
Sale Agreement.
"SUBSIDIARY" means, with respect to any Person, a corporation of
which such Person and/or its other Subsidiaries own, directly or indirectly,
such number of outstanding shares as have more than 50% of the ordinary voting
power for the election of directors.
"SUPPORT PROVIDER" means and includes any entity now or hereafter
extending credit or liquidity support or having a commitment to extend credit or
liquidity support to or for the account of, or to make loans to or purchases
from, Lender or issuing a letter of credit, surety bond or other instrument to
support any obligations arising under or in connection with the commercial paper
program of Lender.
"TAXES" means any and all present or future taxes, duties, levies,
imposts, deductions, charges or withholdings, and any and all liabilities
(including but not limited to interest and penalties) with respect to the
foregoing, imposed by any Governmental Authority.
"TELERATE PAGE 3750" means the display designated as "Page 3750" on
the Telerate Service (or such other page as may replace "Page 3750" on that
service or another service as may be nominated by the British Bankers'
Association as the information vendor for the purpose of displaying British
Bankers' Association Interest Settlement Rate for Dollars).
"TRANSACTION DOCUMENTS" means this Agreement, the Receivables Sale
Agreement, the Lender Note, the Fee Letter, the Subordinated Note, and the other
instruments, certificates, agreements, reports and documents to be executed and
delivered under or in connection with this Agreement or the Receivables Sale
Agreement (except the Program Documents), as any of the foregoing may be
amended, supplemented, amended and restated, or otherwise modified from time to
time in accordance with this Agreement.
17
"UCC" means the Uniform Commercial Code as from time to time in
effect in the applicable jurisdiction or jurisdictions.
"UNMATURED SERVICER EVENT OF DEFAULT" means any event that, if it
continues uncured, will, with lapse of time or notice or lapse of time and
notice, constitute a Servicer Event of Default.
"UNMATURED SIGNIFICANT EVENT" means any event that, if it continues
uncured, will, with lapse of time or notice or lapse of time and notice,
constitute a Significant Event.
"UNPAID BALANCE" means, with respect to any Receivable, the sum of
(a) the Outstanding Balance thereof, plus (without duplication), (b) the
aggregate amount required to repay in full all interest, finance, prepayment and
other fees or charges of any kind payable in respect of, such Outstanding
Balance.
"VOLUNTARY ADVANCE AGREEMENT" means the Voluntary Advance Agreement,
dated as of March 11, 1999, among Lender, Administrator and Bank, as it may be
amended, supplemented, restated or otherwise modified from time to time.
"YIELD RESERVE" means, on any date of determination, the product of
(a) the highest Day Sales Outstanding Ratio during the 12 fiscal months ending
on the most recent Calculation Date, (b) the Stress Factor, (c) the Prime Rate
as in effect on such Calculation Date and (d) 1/360.
Section 1.2 Other Definitional Provisions.
(a) Unless otherwise specified therein, all terms defined in this
Agreement have the meanings as so defined herein when used in the Lender
Note or any other Transaction Document, certificate, report or other
document made or delivered pursuant hereto.
(b) Each term defined in the singular form in Section 1.1 or
elsewhere in this Agreement shall mean the plural thereof when the plural
form of such term is used in this Agreement, the Lender Note or any other
Transaction Document, certificate, report or other document made or
delivered pursuant hereto, and each term defined in the plural form in
Section 1.1 shall mean the singular thereof when the singular form of such
term is used herein or therein.
(c) The words "HEREOF," "HEREIN," "HEREUNDER" and similar terms
when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and article, section,
subsection, schedule and exhibit references herein are references to
articles, sections, subsections, schedules and exhibits to this Agreement
unless otherwise specified.
Section 1.3 Other Terms. All accounting terms not specifically
defined herein shall be construed in accordance with GAAP. All terms used in
Article 9 of the UCC and not specifically defined herein, are used herein as
defined in such Article 9.
18
Section 1.4 Computation of Time Periods. Unless otherwise stated in
this Agreement, in the computation of a period of time from a specified date to
a later specified date, the word "FROM" means "FROM AND INCLUDING" and the words
"TO" and "UNTIL" each means "TO BUT EXCLUDING."
ARTICLE II.
THE LENDER'S COMMITMENT, BORROWING PROCEDURES AND LENDER
NOTE
Section 2.1 Lender's Commitment. On the terms and subject to the
conditions set forth in this Agreement, Lender agrees to make loans to Borrower
on a revolving basis from time to time (the "LENDER'S COMMITMENT") before the
Commitment Termination Date in such amounts as may be from time to time
requested by Borrower pursuant to Section 2.2; PROVIDED, HOWEVER, that the
aggregate principal amount of all Loans from time to time outstanding hereunder
shall not exceed the lesser of (a) the Facility Limit and (b) the Borrowing
Base. Within the limits of the Lender's Commitment, Borrower may borrow and
(subject to Section 4.1(a)) prepay and reborrow under this Section 2.1.
Section 2.2 Borrowing Procedures. Borrower (or the Servicer on its
behalf) may request a Loan hereunder by giving notice to Administrator of a
proposed borrowing not later than 2:00 p.m. (New York City time), two (2)
Business Days prior to the proposed date of such borrowing (or such lesser
period of time as Lender may consent); PROVIDED that Borrower shall not request,
and Lender shall not make, Loans more than once per calendar week. Each such
notice (herein called a "BORROWING REQUEST") shall be in the form of Exhibit A
(or, if acceptable to Administrator, the information required therein may be
given by telephone) and shall include the date and amount of such proposed
borrowing. Any Borrowing Request given by Borrower (or the Servicer on its
behalf) pursuant to this Section 2.2 shall be irrevocable and binding on
Borrower. Any Borrowing Request may be delivered by facsimile transmission or by
electronic mail message attaching a portable data format or ".pdf" file
containing an image of the signed request, PROVIDED, HOWEVER, that no such
transmission or electronic mail message shall be deemed to be delivered unless
and until Borrower (or Servicer on its behalf) confirms Administrator's actual
receipt thereof by telephone.
Section 2.3 Funding. Subject to the satisfaction of the conditions
precedent set forth in Article VII with respect to such Loan and the limitations
set forth in Section 2.1, Lender shall make the proceeds of such requested Loan
available to Administrator at its office in Atlanta, Georgia in immediately
available funds on the proposed date of borrowing. Upon receipt by Administrator
of such funds, Administrator will make such funds available to Borrower at such
office on such date. Each borrowing shall be on a Business Day and shall be in
an amount of at least $1,000,000 and in integral multiples of $500,000 (or in
such other amounts as Lender or Administrator may approve).
Section 2.4 Representation and Warranty. Each request for a
borrowing pursuant to Section 2.2 shall automatically constitute a
representation and warranty by Borrower to Administrator and Lender that on the
requested date of such borrowing (a) the representations and warranties
contained in Article VIII will be true and correct as of such requested date as
19
though made on such date, (b) no Significant Event or Unmatured Significant
Event has occurred and is continuing or will result from such borrowing, and (c)
after giving effect to such requested borrowing, the aggregate principal balance
of the outstanding Loans hereunder will not exceed the lesser of the Borrowing
Base and the Facility Limit.
Section 2.5 Extension of Lender's Commitment. The Lender's
Commitment shall terminate on the Commitment Termination Date. Notwithstanding
the foregoing:
(a) Lender or Administrator, on Lender's behalf, shall use
reasonable effort to give Borrower not less than 60 days' prior notice of
any scheduled termination of the Credit Banks' commitments under the
Credit Agreement and shall promptly notify Borrower of any extension
thereof,
(b) Not more than 60 days prior to the Liquidity Termination Date in
effect from time to time, Borrower may request that Lender or
Administrator, on Lender's behalf, seek the Liquidity Banks' consent to
extend the Liquidity Termination Date for a period which, when aggregated
with the number of days remaining until the existing Liquidity Termination
Date would not cause the Liquidity Banks' commitments under the Liquidity
Agreement as so extended to exceed 364 days in total, and
(c) Not more than 60 days prior to the Scheduled Commitment
Termination Date in effect from time to time, Borrower may request that
Lender consent to extend the Scheduled Commitment Termination Date for an
additional 364-day period.
Administrator shall advise Borrower in writing whether each request made
pursuant to the foregoing clause (b) or clause (c) has been granted within
thirty (30) days after such request has been made and whether such consent is
subject to satisfaction of any conditions precedent. If any such request is not
granted within thirty (30) days after such request has been made, the Liquidity
Termination Date or Scheduled Commitment Termination Date, as the case may be,
shall remain unchanged. If any such request is granted within thirty (30) days
after such request has been made, the Liquidity Termination Date or Scheduled
Commitment Termination Date, as the case may be, shall be extended as provided
in Administrator's written notice upon satisfaction of any conditions precedent
specified therein (including, without limitation, payment of the Extension Fee).
Section 2.6 Voluntary Termination of Lender's Commitment; Reduction
of Facility Limit. Borrower may, in its sole discretion for any reason upon at
least 10 days' notice to Administrator (with a copy to Lender), terminate the
Lender's Commitment in whole, or, reduce in part the unused portion of the
Facility Limit; PROVIDED, HOWEVER that (a) each such partial reduction will be
in a minimum amount of $5,000,000 or a higher integral multiple of $1,000,000
and shall not reduce the Facility Limit below $40,000,000, and (b) in connection
therewith Borrower shall comply with Section 3.2(b) and Section 4.1(b).
Section 2.7 Note. Each Loan from Lender shall be evidenced by a
single promissory grid note (herein, as amended, modified, extended or replaced
from time to time,
20
called the "LENDER NOTE") substantially in the form set forth in Exhibit B, with
appropriate insertions, payable to the order of Lender. Borrower hereby
irrevocably authorizes Administrator in connection with the Lender Note to make
(or cause to be made) appropriate notations on the grid attached to the Lender
Note (or on any continuation of such grid, or at Administrator's option, in its
records), which notations, if made, shall evidence, inter alia, the date of, the
outstanding principal of, and the interest rate and Interest Period applicable
to the Loans evidenced thereby. Such notations shall be rebuttably presumptive
evidence of the subject matter thereof, absent manifest error; PROVIDED,
HOWEVER, that the failure to make any such notations shall not limit or
otherwise affect any Obligations of Borrower.
Section 2.8 Concentration Accounts. Borrower will ensure that each
of the Concentration Accounts has been transferred into Borrower's name on or
before the Closing Date, and will ensure that all available funds from each of
the Deposit Accounts are swept on a daily basis into a Concentration Account.
ARTICLE III.
INTEREST, FEES, ETC.
Section 3.1 Interest Rates. Borrower hereby promises to pay interest
on the unpaid principal amount of each Loan (or each portion thereof) for the
period commencing on the date of such Loan until such Loan is paid in full, as
follows:
(a) at all times while the making or maintenance of such Loan (or
the applicable portion thereof) by Lender is funded by the issuance of
Commercial Paper Notes of Lender, during each Interest Period, at a rate
per annum equal to the sum of (i) the Commercial Paper Rate applicable to
such Interest Period, plus (ii) the Applicable Margin;
(b) at all times while the making or maintenance of such Loan (or
the applicable portion thereof) by Lender is funded during each Interest
Period pursuant to the Liquidity Agreement or the Voluntary Advance
Agreement, at a rate per annum equal to the sum of (i) the Alternative
Rate applicable to such Interest Period, plus (ii) the Applicable Margin;
and
(c) notwithstanding the provisions of the preceding clauses (a)
and (b), in the event that a Significant Event or an Unmatured Significant
Event has occurred and is continuing, at a rate per annum (the "DEFAULT
RATE") equal to the Base Rate applicable from time to time (but not less
than the interest rate in effect for such Loan as at the date of such
Significant Event), plus a margin of 2.00%. After the date any principal
amount of any Loan is due and payable (whether on the Scheduled Commitment
Termination Date, upon acceleration or otherwise) or after any other
monetary Obligation of Borrower arising under this Agreement shall become
due and payable, Borrower shall pay (to the extent permitted by law, if in
respect of any unpaid amounts representing interest) interest (after as
well as before judgment) on such amounts at a rate per annum equal to the
Default Rate. No provision of this Agreement or the Lender Note shall
require the payment or
21
permit the collection of interest in excess of the maximum permitted by
applicable law.
Section 3.2 Interest Payment Dates. Interest accrued on each
Allocation shall be payable, without duplication:
(a) on each Scheduled Interest Payment Date prior to the Scheduled
Commitment Termination Date, for the period since the creation of such
Allocation (in the case of the first Scheduled Interest Payment Date
thereafter) or since the prior Scheduled Interest Payment Date (in the
case of any subsequent Scheduled Interest Payment Date);
(b) on the date of any payment or prepayment (in whole or in part)
of principal outstanding in such Allocation, on the amount paid or prepaid
(it being understood that any prepayment shall be accompanied by any
amounts owing under Section 6.2);
(c) in full, on the Scheduled Commitment Termination Date (whether
at scheduled maturity or upon acceleration thereof pursuant to Section
10.3); and
(d) from and after the Scheduled Commitment Termination Date, upon
demand.
Section 3.3 Interest Allocations. Administrator shall from time to
time and in its sole discretion determine whether interest in respect of the
Loans then outstanding, or any portion thereof, shall be calculated by reference
to the Commercial Paper Rate (such portion being herein called a "CP
ALLOCATION") or an Alternative Rate (such portion being herein called an
"ALTERNATIVE RATE ALLOCATION", and together with a CP Allocation individually
called an "ALLOCATION", and collectively, "ALLOCATIONS"); PROVIDED, HOWEVER,
that, Administrator shall use its reasonable efforts to allocate all or
substantially all of the Loans from Lender to a CP Allocation (it being
understood that if Lender is not able to issue sufficient Commercial Paper Notes
to fund all of its assets at such time and no Significant Event or Unmatured
Significant Event has occurred and is continuing, Lender and Administrator
shall, at least, fund the Loans pro rata with its other non-defaulted assets
with Commercial Paper Notes); PROVIDED FURTHER, HOWEVER, that Administrator may
determine, at any time and in its sole discretion, that the Commercial Paper
Rate is unavailable or otherwise not desirable, in which case the Loans from
Lender will be allocated to an Alternative Rate Allocation (unless the Default
Rate is in effect).
Section 3.4 Fees. Borrower agrees to pay Administrator and Lender
certain Fees in the amounts and on the dates set forth in the letter agreement
executed in connection herewith between Borrower, Administrator and Lender (as
the same may be amended, supplemented, restated or otherwise modified, the "FEE
LETTER").
Section 3.5 Computation of Interest and Fees. All interest, Fees and
Servicing Fees shall be computed on the basis of the actual number of days
(including the first day but excluding the last day) occurring during the period
for which such interest, Fee or Servicing Fee is payable over a year comprised
of 360 days.
22
ARTICLE IV.
REPAYMENTS AND PREPAYMENTS; DISTRIBUTION OF COLLECTIONS
Section 4.1 Repayments and Prepayments. Borrower shall repay in full
the unpaid principal amount of each Loan on the Scheduled Commitment Termination
Date. Prior thereto, Borrower:
(a) may, from time to time on any Business Day, make a prepayment,
in whole or in part, of the outstanding principal amount of any Loans;
PROVIDED, HOWEVER, that, (i) unless otherwise consented to by
Administrator, all such voluntary prepayments shall require at least two
(2) Business Days' (or, in the case of a voluntary prepayment of
$10,000,000 or more, at least seven (7) Business Days') prior written
notice to Administrator, (ii) unless otherwise consented to by
Administrator, all such voluntary partial prepayments shall be in a
minimum amount of $1,000,000 and an integral multiple of $100,000, and
(iii) unless and until the aggregate outstanding principal balance of the
Loans hereunder is less than 10% of the highest amount ever borrowed
hereunder, no such prepayment may be made with any funds other than (A)
Collections and (B) the Borrower's initial paid-in cash capital (if any
then remains);
(b) shall, on each date when any reduction in the Facility Limit
shall become effective pursuant to Section 2.6, make a prepayment of the
Loans in an amount equal to the excess, if any, of the aggregate
outstanding principal amount of the Loans over the Facility Limit as so
reduced;
(c) shall, immediately upon any acceleration of the Scheduled
Commitment Termination Date of any Loans pursuant to Section 10.3, repay
all Loans, unless, pursuant to Section 10.3(a), only a portion of all
Loans is so accelerated, in which event Borrower shall repay the
accelerated portion of the Loans; and
(d) shall, immediately upon discovering that a Borrowing Base
Deficit exists, make a prepayment of the Loans in an amount equal to such
Borrowing Base Deficit. Each such prepayment shall be subject to the
payment of any amounts required by Section 6.2.
Section 4.2 Application of Collections.
(a) All Collections deposited in each Concentration Account shall be
distributed by the Servicer at such times and in the order of priority set
forth in this Section 4.2.
(b) On each Distribution Date prior to the Commitment Termination
Date, the Servicer shall distribute from Collections on deposit in the
Concentration Accounts on such Distribution Date, if any, the following
amounts, without duplication in the following order of priority:
23
FIRST, to the extent due and owing under this Agreement or any other
Transaction Document, the accrued Servicing Fee payable for the prior
Calculation Period (plus, if applicable, the amount of Servicing Fee
payable for any prior Calculation Period to the extent such amount has not
been distributed to Servicer);
SECOND, interest accrued on the Loans pursuant to Section 3.1 during
the period from the most recent Distribution Date to the current
Distribution Date (plus, if applicable, the amount of interest on the
Loans accrued for any prior period to the extent such amount has not been
paid, and to the extent permitted by law, interest thereon);
THIRD, to the extent due and owing under any Transaction Document,
all Fees accrued during the prior Calculation Period (plus, if applicable,
the amount of Fees accrued for any prior Calculation Period to the extent
such amount has not been distributed to Lender or Administrator);
FOURTH, as a repayment of principal of the Loans, an amount equal to
the Borrowing Base Deficit, if any;
FIFTH, to the extent due and owing under any Transaction Document on
such Distribution Date, all other Secured Obligations owed to any Secured
Party;
SIXTH, to the extent due and owing under this Agreement or any other
Transaction Document on such Distribution Date, all other obligations then
payable by Borrower to Administrator or Lender; and
SEVENTH, the balance, if any, to Borrower.
(c) On each Distribution Date from and after the Commitment
Termination Date, the Servicer shall distribute from Collections, if any,
on deposit in each Concentration Account on such Distribution Date the
following amounts, without duplication in the following order of priority:
FIRST, the accrued but unpaid Servicing Fee due and owing on such
Distribution Date;
SECOND, all other Secured Obligations due and owing on such
Distribution Date; and
THIRD, once all amounts described in clauses FIRST and SECOND above
have been paid in full, the balance, if any, to Borrower.
Section 4.3 Application of Certain Payments. Each payment of
principal of the Loans shall be applied to such Loans as Borrower shall direct
or, in the absence of such notice or during the existence of a Significant Event
or after the Commitment Termination Date, as Administrator shall determine in
its discretion.
24
Section 4.4 Due Date Extension. If any payment of principal or
interest with respect to any Loan falls due on a day which is not a Business
Day, then such due date shall be extended to the next following Business Day,
and additional interest shall accrue at the applicable interest rate and be
payable for the period of such extension.
Section 4.5 Making of Payments. All payments of principal of, or
interest on, the Loans and of all Fees, and all amounts to be deposited by
Borrower or Servicer hereunder, shall be made by Borrower or Servicer, as
applicable, no later than 12:00 noon (New York City time), on the day when due
in lawful money of the United States of America in immediately available funds
to Bank, as Administrator, Reference: Three Pillars Funding LLC/G&K Receivables
Corp. Transaction, Account No. 880171236, ABA No. 000000000, at Bank's office at
00 Xxxx Xxxxx, in Atlanta, Georgia, Attn: Xxxx Xxxxxxxx (the "ADMINISTRATOR'S
ACCOUNT"). Funds received by Administrator after 12:00 noon (New York City
time), on the date when due, will be deemed to have been received by
Administrator on its next following Business Day.
ARTICLE V.
SECURITY INTEREST
Section 5.1 Grant of Security.
(a) Borrower hereby assigns and pledges to Administrator (for the
benefit of the Secured Parties), and hereby grants to Administrator (for the
benefit of the Secured Parties) a security interest in all of Borrower's right,
title and interest in and to the following, whether now or hereafter existing
and wherever located:
(i) all Receivables, Related Security and Receivable Files;
(ii) all of Borrower's rights, remedies, powers and privileges in
respect of the Receivables Sale Agreement, including, without limitation,
its rights to receive Purchase Price Credits and indemnity payments
thereunder;
(iii) the Concentration Account and all funds on deposit therein,
together with all certificates and instruments, if any, from time to time
evidencing such accounts and funds on deposit; and
(iv) all products and proceeds (including, without limitation,
insurance proceeds) of, and additions, improvements and accessions to, and
books and records describing or used in connection with, all and any of
the property described above (items (i) through (iii) are collectively
referred to as the "COLLATERAL").
(b) This grant of security secures the payment and performance of
all Obligations of Borrower now or hereafter existing or arising under, or in
connection with, this Loan Agreement, the Lender Note and each other Transaction
Document, whether for principal, interest, costs, Fees, Indemnified Amounts,
expenses or otherwise (all such Obligations of Borrower being called the
"SECURED OBLIGATIONS").
25
(c) This grant of security shall create a continuing security
interest in the Collateral and shall:
(i) remain in full force and effect until Administrator's (for the
benefit of the Secured Parties) interest in the Collateral shall have been
released in accordance with Section 5.4;
(ii) be binding upon Borrower, its successors, transferees and
assigns; and
(iii) inure, together with the rights and remedies of Administrator
(for the benefit of the Secured Parties) hereunder, to the benefit of
Administrator and each Secured Party and their respective successors,
transferees and assigns.
Section 5.2 Administrator Appointed Attorney-in-Fact. Borrower
hereby irrevocably appoints Administrator (for the benefit of the Secured
Parties) as Borrower's attorney-in-fact, with full authority in the place and
stead of Borrower and in the name of Borrower or otherwise, from time to time in
Administrator's discretion, after the occurrence and during the continuation of
a Significant Event to take any action and to execute any instrument which
Administrator may deem necessary or advisable to accomplish the purposes of the
Transaction Documents, including, without limitation:
(a) to ask, demand, collect, xxx for, recover, compromise, receive
and give acquittance and receipts for moneys due and to become due under
or in respect of any of the Collateral;
(b) to receive, endorse, and collect any drafts or other
instruments, documents and chattel paper, in connection with clause (a)
above;
(c) to file any claims or take any action or institute any
proceedings which Administrator may deem necessary or desirable for the
collection of any of the Collateral or otherwise to enforce the rights of
Administrator (for the benefit of the Secured Parties) with respect to any
of the Collateral;
(d) to sell, transfer, assign or otherwise deal in or with the
Collateral or any part thereof pursuant to the terms and conditions
hereunder; and
(e) to perform the affirmative obligations of Borrower under the
Transaction Documents. Administrator agrees to give Borrower and Servicer
written notice of the taking of any such action, but the failure to give
such notice shall not affect the rights, power or authority of
Administrator with respect thereto. Borrower hereby acknowledges, consents
and agrees that the power of attorney granted pursuant to this Section 5.2
is irrevocable and coupled with an interest.
Section 5.3 Administrator May Perform. If Borrower fails to perform
any agreement contained herein, Administrator (for the benefit of the Secured
Parties) may itself perform, or cause performance of such agreement, and the
expenses of Administrator incurred in connection therewith shall be payable by
Borrower.
26
Section 5.4 Release of Collateral. Administrator's (for the benefit
of the Secured Parties) right, title and interest in the Collateral shall be
released effective on the date occurring after the Commitment Termination Date
on which all Secured Obligations shall have been finally and fully paid and
performed.
ARTICLE VI.
INCREASED COSTS, ETC.
Section 6.1 Increased Costs. If any change in Regulation D of the
Board of Governors of the Federal Reserve System, or any Regulatory Change, in
each case occurring after the date hereof:
(a) shall subject any Affected Party to any tax, duty or other
charge with respect to any Loan made or funded by it, or shall change the
basis of taxation of payments to such Affected Party of the principal of
or interest on any Loan owed to or funded by it or any other amounts due
under this Agreement in respect of any Loan made or funded by it (except
for changes in the rate of tax on the overall net income of such Affected
Party imposed by the jurisdiction in which such Affected Party's principal
executive office is located); or
(b) shall impose, modify or deem applicable any reserve (including,
without limitation, any reserve imposed by the Board of Governors of the
Federal Reserve System, but excluding any reserve included in the
determination of interest rates pursuant to Section 3.1), special deposit
or similar requirement against assets of, deposits with or for the account
of, or credit extended by, any Affected Party;
(c) shall change the amount of capital maintained or required or
requested or directed to be maintained by any Affected Party; or
(d) shall impose on any Affected Party any other condition affecting
any Loan made or funded by any Affected Party;
and the result of any of the foregoing is or would be to (i) increase the cost
to or to impose a cost on (I) an Affected Party funding or making or maintaining
any Loan (including extensions of credit under the Liquidity Agreement, the
Voluntary Advance Agreement or any Credit Advance, or any commitment of such
Affected Party with respect to any of the foregoing), or (II) Administrator for
continuing its or Borrower's relationship with Lender, (ii) to reduce the amount
of any sum received or receivable by an Affected Party under this Agreement, the
Lender Note, the Liquidity Agreement, the Voluntary Advance Agreement or the
Credit Agreement with respect thereto, or (iii) in the good faith determination
of such Affected Party, to reduce the rate of return on the capital of an
Affected Party as a consequence of its obligations hereunder, or under the
Liquidity Agreement, the Voluntary Advance Agreement or Credit Agreement, or
arising in connection herewith or therewith to a level below that which such
Affected Party could otherwise have achieved, then after demand by such Affected
Party to Borrower (which demand shall be accompanied by a written statement
setting forth the basis of such demand), Borrower shall pay such Affected Party
such additional amount or amounts as
27
will (in the reasonable determination of such Affected Party) compensate such
Affected Party for such increased cost or such reduction. Such written statement
(which shall include calculations in reasonable detail) shall, in the absence of
manifest error, be rebuttably presumptive evidence of the subject matter
thereof.
Section 6.2 Funding Losses. Borrower hereby agrees that upon demand
by any Affected Party (which demand shall be accompanied by a statement setting
forth the basis for the calculations of the amount being claimed), Borrower will
indemnify such Affected Party against any net loss or expense which such
Affected Party may sustain or incur (including, without limitation, any net loss
or expense incurred by reason of the liquidation or reemployment of deposits or
other funds acquired by such Affected Party to fund or maintain any Allocation
made by Lender to Borrower), as reasonably determined by such Affected Party, as
a result of (a) any payment or prepayment (including any mandatory prepayment)
of any Allocation on a date other than the last day of the Interest Period for
such Allocation, or (b) any failure of Borrower to borrow any Loan on a date
specified therefor in a related Borrowing Request. Such written statement shall,
in the absence of manifest error, be rebuttably presumptive evidence of the
subject matter thereof.
Section 6.3 Withholding Taxes.
(a) All payments made by Borrower hereunder (or by Servicer, on
behalf of Borrower, hereunder) shall be made free and clear of, and without
reduction or withholding for or on account of, any present or future Covered
Taxes, now or hereafter imposed, levied, collected, withheld or assessed by any
Governmental Authority or other taxing authority. If any Covered Taxes are
required to be withheld from any amounts payable to Administrator or Lender, the
amounts so payable to Administrator or Lender shall be increased to the extent
necessary to yield to Administrator or Lender (after payment of all such Covered
Taxes) all such amounts payable hereunder at the rates or in the amounts
specified herein. Whenever any Covered Taxes are payable by Borrower, as
promptly as possible thereafter, Borrower shall send to Administrator for its
own account or for the account of Lender, as the case may be, a certified copy
of an original official receipt received by Borrower showing payment thereof. If
Borrower fails to pay any Covered Taxes when due to the appropriate taxing
authority or fails to remit to Administrator the required documentary evidence,
Borrower shall indemnify Administrator and Lender for such Covered Taxes and any
incremental taxes that may become payable by Administrator or Lender as a result
of any such failure.
(b) At least five (5) Business Days prior to the first date on which
any payments, including discount or Fees, are payable hereunder for the account
of Lender, if Lender is not organized under the laws of the United States,
Lender agrees to deliver to each of Borrower and Administrator two (2) duly
completed copies of (i) United States Internal Revenue Service Form W-8BEN or
W-8ECI (or successor applicable form) certifying that such Lender is entitled to
receive payments hereunder without deduction or withholding of any United States
federal income taxes or (ii) United States Internal Revenue Service Form W-8 or
W-9 (or successor applicable form) to establish an exemption from United States
backup withholding tax. Lender shall replace or update such forms as is
necessary or appropriate to maintain any applicable exemption or as is requested
by Administrator or Borrower. If Lender does not deliver the forms described in
this Section 6.3(b), Borrower or Administrator shall withhold United States
federal
28
income taxes from any payments made hereunder at the statutory rate applicable
to payments made to Lender. Lender agrees to indemnify and hold Borrower and
Administrator harmless for any United States federal income taxes, penalties,
interest and other costs and losses incurred or payable by Borrower or
Administrator as a result of either (x) Lender's failure to submit any form
required to be provided pursuant to this Section 6.3(b) or (y) Borrower's or
Administrator's reliance on any form that Lender has provided pursuant to this
Section 6.3(b).
ARTICLE VII.
CONDITIONS TO BORROWING
Section 7.1 Initial Loan. The obligation of Lender to make the initial
Loan hereunder is subject to the conditions precedent that Administrator shall
have received all of the following, each duly executed and dated the date of
such Loan (or such earlier date as shall be satisfactory to Administrator), in
form and substance satisfactory to Administrator:
7.1.1 Resolutions. Certified copies of resolutions of the Boards of
Directors of Borrower and the Originators authorizing or ratifying the
execution, delivery and performance, respectively, of the Transaction
Documents to which it is a party, together with a certified copy of its
Organizational Documents.
7.1.2 Consents, etc. Certified copies of all documents evidencing
any necessary consents and governmental approvals (if any) with respect to
the Transaction Documents.
7.1.3 Incumbency and Signatures. A certificate of the Secretary or
an Assistant Secretary of Borrower, Servicer and each Originator
certifying the names of its officer or officers authorized to sign the
Transaction Documents to which it is a party.
7.1.4 Good Standing Certificates. Good standing certificates for
Borrower, Servicer and each Originator issued as of a recent date
acceptable to Administrator by (a) the Secretary of State of the
jurisdiction of such Person's organization, and (b) the Secretary of State
of the jurisdiction where such Person's chief executive office and
principal place of business are located.
7.1.5 Financing Statements. (i) Acknowledgment copies of proper
financing statements (Form UCC-1), filed on or prior to the date of the
initial Loan, naming Borrower as debtor and Administrator (for the benefit
of the Secured Parties) as the secured party as may be necessary or, in
the opinion of Administrator, desirable under the UCC to perfect
Administrator's (for the benefit of the Secured Parties) security interest
in the Collateral, (ii) acknowledgment copies of proper financing
statements, filed on or prior to the date of the initial Loan, naming each
Originator, as seller/debtor, Borrower as assigning secured party and
Administrator as total assignee of secured party as may be necessary or,
in the opinion of Administrator, desirable under the UCC to perfect
Borrower's ownership interest in the Receivables, and (iii) executed
copies of proper Uniform Commercial Code Form UCC-3 termination
statements, if any, necessary to
29
\
release all liens and other Adverse Claims of any Person in the Collateral
granted by Borrower or any Originator.
7.1.6 Search Reports. A written search report provided to
Administrator by a search service acceptable to Administrator listing all
effective financing statements that name Borrower or any Originator as
debtor or assignor and that are filed in the jurisdictions in which
filings were made pursuant to Section 7.1.5 above and in such other
jurisdictions that Administrator shall reasonably request, together with
copies of such financing statements (none of which shall cover any
Collateral or interests therein or proceeds of any thereof), and tax and
judgment lien search reports from a Person satisfactory to Administrator
showing no evidence of such lien filed against Borrower or any Originator.
7.1.7 Fee Letter; Payment of Fees. The Fee Letter, together with all
outstanding Fees payable pursuant to the Fee Letter.
7.1.8 Receivables Sale Agreement. (i) Duly executed and delivered
counterparts of each of the Receivables Sale Agreement and all documents,
agreements and instruments contemplated thereby, and (ii) evidence that
each of the conditions precedent to the execution and delivery of the
Receivables Sale Agreement has been satisfied to Administrator's
satisfaction, and that the initial assignments and transfers under the
Receivables Sale Agreement have been consummated.
7.1.9 Opinions of Counsel. Opinions of counsel to Borrower, Servicer
and each Originator in form and substance satisfactory to Administrator.
7.1.10 Lender Note. The Lender Note, duly executed by Borrower.
7.1.11 Borrowing Base Certificate. A Borrowing Base Certificate,
duly executed by an officer of Servicer on Borrower's behalf showing a
calculation of the Borrowing Base as of the date of such initial Loan.
7.1.12 Concentration Account Agreements. A Concentration Account
Agreement with respect to each Concentration Account, duly executed by all
of the parties thereto.
7.1.13 Releases. Releases and termination statements duly executed
by each Person, other than Borrower, that has an interest in the
Receivables.
7.1.14 Other. Such other documents, certificates and opinions as
Administrator may request.
Section 7.2 All Loans. The making of each Loan, including without
limitation, the initial Loan, is subject to the conditions precedent that:
7.2.1 No Default, etc. (i) No Significant Event, Unmatured
Significant Event or Servicer Event of Default has occurred and is
continuing or will result
30
from the making of such Loan, (ii) the representations and warranties of
Borrower contained in Article VIII are true and correct as of the date of
such requested Loan, with the same effect as though made on the date of
such Loan, and (iii) after giving effect to such Loan, the aggregate
unpaid balance of the Loans will not exceed the Borrowing Base or the
Facility Limit. By making a Borrowing Request, Borrower shall be deemed to
have represented and warranted that items (i), (ii) and (iii) in the
preceding sentence are true and correct.
7.2.2 Borrowing Request, etc. Administrator shall have received a
Borrowing Request for such Loan in accordance with Section 2.2, together
with all items required to be delivered in connection therewith.
7.2.3 Commitment Termination Date. The Commitment Termination Date
shall not have occurred.
7.2.4 Collateral Review. Administrator shall have received the
most-recent Collateral Review pursuant to Section 9.1.5(c).
7.2.5 Accounts. The Concentration Accounts shall be subject to valid
and perfected first priority security interest in favor of Administrator
for the benefit of the Secured Parties. Each of the Concentration Accounts
shall have been transferred into Borrower's name, and each of the Deposit
Accounts shall be subject to an automatic sweep each Business Day into a
Concentration Account.
ARTICLE VIII.
REPRESENTATIONS AND WARRANTIES
In order to induce Lender and Administrator to enter into this
Agreement and, in the case of Lender, to make Loans hereunder, Borrower hereby
represents and warrants to Administrator and Lender as to itself as follows, and
Servicer hereby represents and warrants to Administrator and Lender as to itself
as follows:
Section 8.1 Existence and Power. Servicer is a corporation duly
organized under the laws of the State of Minnesota. Borrower is a corporation
duly organized under the laws of the State of Minnesota. Each of Servicer and
Borrower is validly existing and in good standing under the laws of its state of
organization and is duly qualified to do business and is in good standing as a
foreign corporation, and has and holds all power and all governmental licenses,
authorizations, consents and approvals required to carry on its business in each
jurisdiction in which its business is conducted except where the failure to so
qualify or so hold could not reasonably be expected to have a Material Adverse
Effect.
Section 8.2 Power and Authority; Due Authorization, Execution and
Delivery. The execution and delivery by each of Servicer and Borrower of this
Agreement and each other Transaction Document to which it is a party, and the
performance of its obligations hereunder and thereunder, and Borrower's use of
the proceeds of the Loans made hereunder, are within its powers and authority
and have been duly authorized by all necessary corporate action on its part.
This Agreement and each other Transaction Document to which Servicer or Borrower
is a party has been duly executed and delivered by Servicer or Borrower, as the
case may be.
31
Section 8.3 No Conflict. The execution and delivery by each of
Borrower and Servicer of this Agreement and each other Transaction Document to
which it is a party, and the performance of its obligations hereunder and
thereunder do not contravene or violate (i) its Organizational Documents, (ii)
any law, rule or regulation applicable to it, (iii) any restrictions under any
agreement, contract or instrument to which it is a party or by which it or any
of its property is bound, or (iv) any order, writ, judgment, award, injunction
or decree binding on or affecting it or its property, and do not result in the
creation or imposition of any Adverse Claim on its assets (except as created
under the Transaction Documents) except, in any case, where such contravention
or violation could not reasonably be expected to have a Material Adverse Effect;
and no transaction contemplated hereby requires compliance with any bulk sales
act or similar law.
Section 8.4 Governmental Authorization. Other than the filing of the
financing statements required hereunder, no authorization or approval or other
action by, and no notice to or filing with, any governmental authority or
regulatory body is required for the due execution and delivery by Servicer or
Borrower of this Agreement and each other Transaction Document to which it is a
party and the performance of its obligations hereunder and thereunder.
Section 8.5 Actions, Suits. There is no litigation, arbitration,
governmental investigation, proceeding or inquiry pending or, to the knowledge
of any of their officers, threatened against or affecting Borrower, Servicer or
any of Servicer's Subsidiaries which could reasonably be expected to have a
Material Adverse Effect or which seeks to prevent, enjoin or delay the making or
repayment of any Loans. Other than any liability incident to any litigation,
arbitration or proceeding which could not reasonably be expected to have a
Material Adverse Effect, Servicer and its Subsidiaries have no material
contingent obligations not provided for or disclosed in the footnotes to its
financial statements delivered prior to the Closing Date.
Section 8.6 Binding Effect. This Agreement and each other
Transaction Document to which G&K (as Servicer) or Borrower is a party
constitute the legal, valid and binding obligations of G&K or Borrower, as the
case may be, enforceable against it in accordance with their respective terms,
except as such enforcement may be limited by applicable bankruptcy, insolvency,
reorganization or other similar laws relating to or limiting creditors' rights
generally and by general principles of equity (regardless of whether enforcement
is sought in a proceeding in equity or at law).
Section 8.7 Accuracy of Information. All information heretofore
furnished by Borrower, Servicer or any of their respective Affiliates for
purposes of or in connection with this Agreement, any of the other Transaction
Documents or any transaction contemplated hereby or thereby is, and all such
information hereafter furnished by Borrower, Servicer or any of their respective
Affiliates will be, true and accurate in every material respect on the date such
information is stated or certified and does not and will not contain any
material misstatement of fact or omit to state a material fact or any fact
necessary to make the statements contained therein, taken as a whole, not
misleading.
32
Section 8.8 Margin Regulations; Use of Proceeds. Borrower is not
engaged in the business of extending credit for the purpose of purchasing or
carrying margin stock, and no proceeds of any Loans, directly or indirectly,
will be used for a purpose that violates, or would be inconsistent with,
Regulations T, U and X promulgated by the Federal Reserve Board from time to
time. No portion of the proceeds of any Loan hereunder will be used for a
purpose that violates, or would be inconsistent with, any other law, rule or
regulation applicable to Borrower.
Section 8.9 Good Title. Borrower (i) is the legal and beneficial
owner of the Receivables and (ii) is the legal and beneficial owner of the
Related Security with respect thereto or possesses a valid and perfected
security interest therein, in each case, free and clear of any Adverse Claim,
except as created by the Transaction Documents and except for the GE Lighting
Lien. There have been duly filed all financing statements or other similar
instruments or documents necessary under the UCC (or any comparable law) of all
appropriate jurisdictions to perfect Borrower's ownership interest in each such
Receivable, its Collections and the Related Security.
Section 8.10 Perfection. This Agreement is effective to create a
valid security interest in the Collateral favor of Administrator, for the
benefit of the Secured Parties. There have been duly filed all financing
statements or other similar instruments or documents necessary under the UCC (or
any comparable law) of all appropriate jurisdictions to perfect Administrator's
security interest, for the benefit of the Secured Parties, in the Collateral.
The Collateral is free of any Adverse Claim except as created under the
Transaction Documents.
Section 8.11 Places of Business and Locations of Records. The
principal place of business and chief executive office of each of Borrower and
Servicer is located at its address referred to on Schedule 15.3 to this
Agreement (or at such other locations, notified to Administrator in
jurisdictions where all action required to perfect or maintain the perfection of
Administrator's security interest in the Collateral has been taken). Borrower's
Federal Employer Identification Number is20-1571890 , and its Minnesota
organizational identification number is 1028127-2.
Section 8.12 Accounts. Borrower represents and warrants that (a)
Schedule 8.12 hereto is a complete and accurate listing, as of the Closing Date,
of the Deposit Accounts and Concentration Accounts, (b) each of the
Concentration Accounts has been transferred into Borrower's name, and (c) each
of the banks maintaining a Deposit Account has been instructed to sweep all
available cash in such Deposit Account to a Concentration Account each Business
Day. Neither Servicer nor Borrower has granted any interest in any Deposit
Account or Concentration Account to any Person other than, in the case of the
Concentration Accounts, Administrator. Administrator has exclusive control of
the Concentration Accounts.
Section 8.13 No Material Adverse Effect. Since March 27, 2004, no
event has occurred that could reasonable be expected to have a Material Adverse
Effect.
Section 8.14 Names. The name in which Borrower has executed this
Agreement is identical to the name of Borrower as indicated on the public record
of the State of Minnesota. Borrower has not used any legal name, trade name or
assumed name other than the name in which it has executed this Agreement.
33
Section 8.15 Ownership of Borrower; No Subsidiaries. All of the
issued and outstanding equity interests of Borrower are owned beneficially and
of record by G&K, free and clear of any Adverse Claim. Such equity interests are
validly issued, fully paid and nonassessable, and there are no options, warrants
or other rights to acquire securities of Borrower. Borrower has no Subsidiaries.
Section 8.16 Not a Holding Company or an Investment Company. Neither
Borrower nor Servicer is a "holding company" or a "subsidiary holding company"
of a "holding company" within the meaning of the Public Utility Holding Company
Act of 1935, as amended, or any successor statute. Neither Borrower nor Servicer
is an "investment company" within the meaning of the Investment Company Act of
1940, as amended, or any successor statute.
Section 8.17 Compliance with Credit and Collection Policy. Each of
Borrower and Servicer has complied in all material respects with the applicable
Credit and Collection Policy with regard to each Receivable and the related
Contract, and has not made any change to such Credit and Collection Policy,
except such material change as to which Administrator has given its prior
written consent.
Section 8.18 Solvency. Both before and after giving effect to each
Loan, Borrower is Solvent.
Section 8.19 Eligible Receivables. Each Receivable included in the
Borrowing Base as an Eligible Receivable as of the date of (a) any Borrowing
Base Certificate, (b) any Monthly Report or (c) the making of any Loan, is an
Eligible Receivable on such date.
Section 8.20 Accuracy of Information. All information heretofore
furnished by, or on behalf of, Borrower or Servicer to Administrator or Lender
in connection with any Transaction Document, or any transaction contemplated
thereby, is true and accurate in every material respect (without omission of any
information necessary to prevent such information from being materially
misleading).
Section 8.21 Sales by Originators. Each sale of Receivables by an
Originator to Borrower shall have been effected under, and in accordance with
the terms of, the Receivables Sale Agreement, including the payment by Borrower
to such Originator of an amount equal to the purchase price therefor as
described in the Receivables Sale Agreement, and each such sale shall have been
made for "reasonably equivalent value" (as such term is used under Section 548
of the United States Bankruptcy Code) and not for or on account of "antecedent
debt" (as such term is used under Section 547 of the United States Bankruptcy
Code) owed by Borrower to such Originator.
ARTICLE IX.
COVENANTS OF BORROWER AND SERVICER
Section 9.1 Affirmative Covenants. From the date hereof until the
first day, following the Commitment Termination Date, on which all Obligations
shall have been finally and fully paid and performed, each of Borrower and
Servicer hereby covenants and agrees with Lender and Administrator that as to
itself, as follows:
34
9.1.1 Compliance with Laws, Etc. Each of Borrower and Servicer
will comply in all material respects with all applicable laws, rules,
regulations and orders of all governmental authorities (including those
which relate to the Receivables).
9.1.2 Preservation of Legal Existence. Each of Borrower and
Servicer will preserve and maintain its existence rights, franchises and
privileges in the jurisdiction of its organization, and qualify and remain
qualified in good standing as a foreign entity in the jurisdiction where
its principal place of business and its chief executive office are located
and in each other jurisdiction where the failure to preserve and maintain
such existence, rights, franchises, privileges and qualifications would
have a Material Adverse Effect.
9.1.3 Performance and Compliance with Receivables. Each of
Borrower and Servicer will timely and fully perform and comply with all
provisions, covenants and other promises required to be observed by it
under the Receivables and all other agreements related to such
Receivables.
9.1.4 Credit and Collection Policy. Each of Borrower and
Servicer will comply in all material respects with the Credit and
Collection Policy.
9.1.5 Reporting Requirements. Each of Borrower and Servicer
will furnish to Administrator and Lender:
(a) Financial Statements.
(i) as soon as available, and in any event within 95 days after the
end of each year, a copy of the balance sheet of Borrower, in each case,
as at the end of such year, together with the related statement of
earnings for such year, certified by the chief executive officer, chief
financial officer or controller of Borrower (which certification shall
state that such balance sheet and statement or earnings fairly present the
financial condition and results of operations for such year in accordance
with GAAP except for the absence of footnotes), together with a
certificate of such officer stating that such officer has obtained no
knowledge that a Significant Event or Unmatured Significant Event has
occurred and is continuing, or if, in the opinion of such officer, such a
Significant Event or Unmatured Significant Event has occurred and is
continuing, a statement as to the nature thereof;
(ii) as soon as available and in any event within 95 days after the
end of each year, a balance sheet of G&K as of the end of such year and
statements of income and retained earnings and of source and application
of funds of G&K, along with consolidating statements, for the period
commencing at the end of the previous year and ending with the end of such
year, in each case setting forth comparative figures for the previous
year, certified without material qualification in a manner satisfactory to
Administrator by nationally recognized independent public accountants; and
35
(iii) as soon as available and in any event within 50 days after the
end of each fiscal quarter, quarterly balance sheets and quarterly
statements of source and application of funds and quarterly statements of
income and retained earnings of G&K, certified by the chief executive or
financial officer or controller of G&K (which certification shall state
that such balance sheets and statements fairly present the financial
condition and results of operations for such fiscal quarter, subject to
year-end audit adjustments), delivery of which balance sheets and
statements shall be accompanied by a certificate of such chief financial
officer or controller to the effect that no Significant Event or Unmatured
Significant Event has occurred and is continuing.
(b) Borrowing Base Certificates and Monthly Reports.
(i) On or before the 25th day of each calendar month after the
Closing Date (or if any such day is not a Business Day, the next
succeeding Business Day), Servicer shall prepare and deliver to
Administrator and Lender a Borrowing Base Certificate covering the first
three weeks of the then current Calculation Period, signed by an
authorized officer of Servicer; and
(ii) On or before the second Business Day preceding each
Distribution Date, Servicer shall prepare and deliver to Administrator and
Lender a Monthly Report as of the last day of the fiscal month then most
recently ended, signed by an authorized officer of Servicer.
(c) Significant Events. As soon as possible but in any
event within one (1) Business Day after any officer of Borrower or
Servicer becomes aware of the occurrence of a Significant Event or an
Unmatured Significant Event, Borrower or Servicer, as the case may be,
will deliver to Administrator and Lender an officer's certificate of
Borrower setting forth details of such event and the action that Borrower
or Servicer, as the case may be, proposes to take with respect thereto.
(d) Servicing Certificate. Servicer shall deliver, or
cause to be delivered, to Administrator, on or before the date that is 95
days after the end of each year, an officer's certificate signed by the
president, chief executive officer or any vice president of Servicer,
dated as of the last day of the preceding year, stating that (a) a review
of the activities of Servicer during the preceding 12-fiscal-month period
and of its performance under this Agreement has been made under such
officer's supervision and (b) to the best of such officer's knowledge,
based on such review, Servicer has fulfilled its obligations under the
Agreement throughout such year and has complied in all respects with the
Credit and Collection Policy, or, if there has been a default in the
fulfillment of any such obligation, specifying each such default known to
such officer and the nature and status thereof.
(e) Collateral Review. On or before the Closing Date,
and after each semi-annual period thereafter, a report of Commercial
Lending Consultants
36
or another firm acceptable to Administrator (each such report, a
"COLLATERAL REVIEW") which satisfies the requirements set forth on
Schedule 9.1.5.
(f) Other. Promptly, from time to time, such other
information, documents, records or reports respecting the Collateral, the
Receivables or the condition or operations, financial or otherwise, of
Borrower or any Originator as Administrator may from time to time
reasonably request in order to protect the interests of Administrator or
Lender under or as contemplated by this Agreement or the other Transaction
Documents.
9.1.6 Use of Proceeds. Borrower will use the proceeds of the
Loans made hereunder solely in connection with the acquisition or funding
of Receivables.
9.1.7 Separate Legal Entity. Borrower hereby acknowledges that
Lender and Administrator are entering into the transactions contemplated
by this Agreement and the other Transaction Documents in reliance upon
Borrower's identity as a legal entity separate from any other Person.
Therefore, from and after the date hereof, Borrower shall take all
reasonable steps to continue Borrower's identity as a separate legal
entity and to make it apparent to third Persons that Borrower is an entity
with assets and liabilities distinct from those of any other Person, and
is not a division of any Originator or other Person. Without limiting the
generality of the foregoing and in addition to and consistent with the
covenant set forth in Section 9.1.2, Borrower shall take such actions as
shall be required in order that:
(a) Borrower will be a limited purpose company whose primary
activities are restricted in its certificate of organization to owning the
Receivables and Related Security and financing the acquisition thereof and
conducting such other activities as it deems necessary or appropriate to
carry out its primary activities;
(b) Not less than one member of Borrower's Board of Directors
(each, an "INDEPENDENT DIRECTOR") shall be an individual who is not, and
during the past five (5) years has not been, a director, officer, employee
or 5% beneficial owner of the outstanding common stock of any Person or
entity beneficially owning any outstanding shares of common stock of G&K
or any Affiliate thereof; PROVIDED, HOWEVER, that an individual shall not
be deemed to be ineligible to be an Independent Director solely because
such individual serves or has served in the capacity of an "independent
director" or similar capacity for special purpose entities formed by G&K
or any of its Affiliates. The certificate of organization of Borrower
shall provide that (i) the Board of Directors shall not approve, or take
any other action to cause the filing of, a voluntary bankruptcy petition
with respect to Borrower unless the Independent Directors shall approve
the taking of such action in writing prior to the taking of such action,
and (ii) such provision cannot be amended without the prior written
consent of the Independent Directors;
37
(c) Any employee, consultant or agent of Borrower will be
compensated from funds of Borrower, as appropriate, for services provided
to Borrower;
(d) Borrower will allocate and charge fairly and reasonably
overhead expenses shared with any other Person. To the extent, if any,
that Borrower and any other Person share items of expenses such as legal,
auditing and other professional services, such expenses will be allocated
to the extent practical on the basis of actual use or the value of
services rendered, and otherwise on a basis reasonably related to the
actual use or the value of services rendered; Borrower's operating
expenses will not be paid by any other Person except as permitted under
the terms of this Agreement or otherwise consented to by Administrator and
Lender;
(e) Borrower's books and records will be maintained separately
from those of any other Person;
(f) All audited financial statements of any Person that are
consolidated to include Borrower will contain detailed notes clearly
stating that (A) all of Borrower's assets are owned by Borrower, and (B)
Borrower is a separate legal entity;
(g) Borrower's assets will be maintained in a manner that
facilitates their identification and segregation from those of any other
Person;
(h) Borrower will strictly observe corporate formalities in its
dealings with all other Persons, and funds or other assets of Borrower
will not be commingled with those of any other Person;
(i) Borrower shall not, directly or indirectly, be named or enter
into an agreement to be named, as a direct or contingent beneficiary or
loss payee, under any insurance policy with respect to any amounts payable
due to occurrences or events related to any other Person; and
(j) Any Person that renders or otherwise furnishes services to
Borrower will be compensated thereby at market rates for such services it
renders or otherwise furnishes thereto. Borrower will not hold itself out
to be responsible for the debts of any other Person or the decisions or
actions respecting the daily business and affairs of any other Person.
9.1.8 Adverse Claims on Receivables. Each of Borrower and
Servicer will, and will require the Originators to, defend each Receivable
against all claims and demands of all Persons at any time claiming the
same or any interest therein adverse to Administrator and the Secured
Parties.
9.1.9 Further Assurances. At its expense, each of Borrower and
Servicer will perform all acts and execute all documents reasonably
requested by Administrator at any time to evidence, perfect, maintain and
enforce the title or
38
the security interest of Administrator in the Receivables and the priority
thereof. Each of Borrower and Servicer will, at the reasonable request of
Administrator, execute and deliver financing statements relating to or
covering the Collateral and, where permitted by law, Borrower shall
authorize Administrator to file one or more financing statements signed
only by Administrator. Borrower shall, and shall cause each Originator to,
cause its computer records, master data processing records and other books
and records relating to the Receivables to be marked, with a legend
stating that the Receivables have been sold to Borrower and that the
Collateral has been pledged to Administrator for the benefit of the
Secured Parties.
9.1.10 Servicing. Servicer shall use all reasonable measures
to prevent or minimize any loss being realized on a Receivable and shall
take all reasonable steps to recover the full amount of such loSECTION
Borrower and Servicer shall, at their own expense, take such steps as are
necessary to maintain perfection of the security interest created by each
Receivable in the related goods and merchandise subject thereto. Servicer
shall use its best efforts, consistent with prudent servicing procedures,
to repossess or otherwise convert the ownership of the goods or
merchandise securing any Receivable which becomes a Defaulted Receivable.
Servicer shall follow such practices and procedures for servicing the
Receivables as would be customary and usual for a prudent servicer under
similar circumstances, including using reasonable efforts to realize upon
any recourse to the Obligors and selling the goods securing a Receivable
at a public or private sale.
9.1.11 Inspection. Each of Borrower and Servicer shall permit
Lender, Administrator or their duly authorized representatives, attorneys
or auditors to inspect the Receivables, the Receivable Files, Documents
and the related accounts, records and computer systems, software and
programs used or maintained by Borrower or Servicer at such times as
Lender or Administrator may reasonably request. Upon instructions from
Lender or Administrator, each of Borrower and Servicer shall release any
document in its possession related to any Receivables to Lender or
Administrator, as the case may be, or to the Servicer, if requested by
Lender or Administrator.
9.1.12 Cooperation. Each of Borrower and Servicer shall
provide such cooperation, information and assistance, and prepare and
supply Administrator with such data regarding the performance by the
Obligors of their obligations under the Receivables and the performance by
Borrower and Servicer of their respective obligations under the
Transaction Documents, as may be reasonably requested by Administrator
from time to time.
39
9.1.13 Facility. Servicer shall maintain its facility from
which it services the Receivables in its present condition, ordinary wear
and tear excepted, or such other facility of similar quality, security and
safety as Servicer may select from time to time. Servicer shall make all
property tax payments, lease payments and all other payments with respect
to such facility. Servicer shall (i) ensure that Administrator shall have
complete and unrestricted access, at Servicer's expense, to such facility
and all computers and other systems relating to the servicing of the
Receivables and all persons employed at such facility, (ii) use its best
efforts to retain the employees based at such facility to provide
assistance to Administrator and (iii) continue to store on a daily basis
all back-up files relating to the Receivables and the servicing of the
Receivables at Servicer's facilities, or such other storage facility of
similar quality, security and safety as Servicer may select from time to
time, in the case of each of clauses (i), (ii) and (iii) until the receipt
of all Collections in respect of all Receivables or all Receivables have
been written off in accordance with the Credit and Collection Policy.
9.1.14 Accounts. Borrower shall not maintain any bank accounts
other than the accounts described on Schedule 8.12. Except as set forth in
the last sentence of Section 11.2.3(b), neither Borrower nor Servicer
shall make, nor will either of them permit any Originator to make, any
change in its instructions to banks maintaining Deposit Accounts regarding
the daily sweep of available balances thereto into a Concentration
Account. Neither Borrower nor Servicer will, nor will either of them
permit any Originator to (a) close any Concentration Account, or (b) add
any Concentration Account to those listed on Schedule 8.12 unless
Administrator shall have consented thereto and received a copy of a duly
executed Concentration Account Agreement with respect to such added
account.
Section 9.2 Negative Covenants. From the date hereof until the first
day, following the Commitment Termination Date, on which all Obligations shall
have been finally and fully paid and performed, each of Borrower and Servicer
hereby covenants and agrees as to itself as follows:
9.2.1 Sales, Liens, Etc. Except pursuant to, or as
contemplated by, the Transaction Documents, Borrower shall not sell (and
shall not permit Servicer, acting on Borrower's behalf to), assign (by
operation of law or otherwise) or otherwise dispose of, or create or
suffer to exist voluntarily or involuntarily any Adverse Claims upon or
with respect to any of its assets, including, without limitation, the
Collateral, any interest therein or any right to receive any amount from
or in respect thereof.
9.2.2 Mergers, Acquisitions, Sales, Subsidiaries, etc.
Borrower shall not:
(a) be a party to any merger or consolidation, or directly or
indirectly purchase or otherwise acquire all or substantially all of the
assets or any stock of any class of, or any partnership or joint venture
interest in, any other Person, except for Permitted Investments, or sell,
transfer, assign, convey or lease any of
40
its property and assets (or any interest therein) other than pursuant to,
or as contemplated by, this Agreement or the other Transaction Documents;
(b) make, incur or suffer to exist an investment in, equity
contribution to, loan or advance to, or payment obligation in respect of
the deferred purchase price of property from, any other Person, except for
Permitted Investments or pursuant to the Transaction Documents;
(c) create any direct or indirect Subsidiary or otherwise acquire
direct or indirect ownership of any equity interests in any other Person
other than pursuant to the Transaction Documents; or
(d) enter into any transaction with any Affiliate except for the
transactions contemplated by the Transaction Documents and other
transactions upon fair and reasonable terms materially no less favorable
to Borrower than would be obtained in a comparable arm's length
transaction with a Person not an Affiliate.
9.2.3 Change in Business; Change in Credit and Collection
Policy. Borrower will not make any change in the character of its
busineSECTION Neither Borrower nor Servicer will make any change in the
Credit and Collection Policy that could adversely affect the
collectibility of any Receivable.
9.2.4 Other Debt. Borrower will not incur any Debt to any
Person other than pursuant to this Agreement, the Receivables Sale
Agreement or otherwise in connection with a transaction involving Lender,
Bank, any Credit Bank, any Liquidity Bank or any other Persons providing
liquidity or credit support to Lender.
9.2.5 Organizational Documents. Borrower shall not amend its
Organizational Documents.
9.2.6 Jurisdiction of Organization; Location of Records.
Borrower shall not change its jurisdiction of organization or permit the
documents and records evidencing the Receivables to be moved unless (i)
Borrower or Servicer, as the case may be, shall have given to
Administrator prior written notice thereof, clearly describing the new
location, and (ii) Borrower shall have taken such action, satisfactory to
Administrator, to maintain the title or ownership of Borrower and any
security interest of Administrator in the Collateral at all times fully
perfected and in full force and effect. Servicer shall not, in any event,
move the location where it conducts the servicing and collection of the
Receivables from the address referred to on Schedule 15.3 to this
Agreement, without the prior written consent of Administrator, which
consent shall not be unreasonably withheld or delayed.
9.2.7 Financing Statements. Borrower shall not execute any
effective financing statement (or similar statement or instrument of
registration under the
41
laws of any jurisdiction) or statements relating to any Receivables other
than the financing statements described in Section 7.1.5.
9.2.8 Business Restrictions. Borrower shall not (i) engage in
any business other than the acquisition, financing and collection of
Receivables and other Collateral, (ii) engage in any transactions or be a
party to any documents, agreements or instruments, other than the
Transaction Documents and those incidental to the purposes thereof, or
(iii) incur any trade payables (other than for professional fees incurred
in the ordinary course of business) or other liabilities not constituting
Debt permitted under Section 9.2.4 if such the aggregate outstanding
balance of such trade payables and other liabilities would at any time
equal or exceed $12,300.
9.2.9 Other Agreements. Borrower will not amend, restate,
supplement, cancel, terminate or otherwise modify the Receivables Sale
Agreement, or give any consent, waiver, directive or approval thereunder
or waive any default, action, omission or breach under any of the
foregoing or otherwise grant any indulgence thereunder, without (in each
case) the prior written consent of Administrator.
ARTICLE X.
SIGNIFICANT EVENTS AND THEIR EFFECT
Section 10.1 Events of Default. Each of the following shall
constitute an "EVENT OF DEFAULT" under this Agreement:
10.1.1 Non-Payment of Loans, Etc. Borrower shall fail to make
any payment when due of any principal of or interest on any Loan, or
payment of any other Obligation payable by Borrower hereunder or under the
other Transaction Documents, including, without limitation, any Fees and
Indemnified Amounts, or shall fail to make any deposit required to be made
hereunder when due and, in each of the foregoing cases, such failure shall
continue for two (2) Business Days.
10.1.2 Non-Compliance with Other Provisions. Borrower shall:
(a) fail to perform or observe any covenant contained in Section 9.2
of this Agreement and such failure shall remain unremedied for two (2)
Business Days after the earlier to occur of (i) Borrower's having
knowledge thereof and (ii) Borrower's having received written notice
thereof from the Lender or Administrator, or
(b) fail to perform or observe any other term, covenant or agreement
contained in this Agreement or any other Transaction Document on its part
to be performed or observed and any such failure shall remain unremedied
for thirty (30) days.
10.1.3 Breach of Representations and Warranties. Any
representation, warranty, certification or statement made by Borrower in
this Agreement, any
42
other Transaction Document to which Borrower is a party or in any other
document delivered pursuant hereto or thereto shall prove to have been
incorrect in any material respect when made or deemed made; PROVIDED THAT
the materiality threshold in the preceding clause shall not be applicable
with respect to any representation or warranty which itself contains a
materiality threshold.
10.1.4 Bankruptcy. An Event of Bankruptcy shall have occurred
and remained continuing with respect to Borrower or Servicer.
10.1.5 Tax Liens. The Internal Revenue Service shall file
notice of a lien pursuant to Section 6323 of the Internal Revenue Code
with regard to any of the assets of Borrower, and such lien shall not have
been released within fifteen (15) Business Days.
Section 10.2 Amortization Events. Each of the following shall
constitute an "AMORTIZATION EVENT" under this Agreement:
10.2.1 Servicer Event of Default. A Servicer Event of Default
shall have occurred and remained continuing.
10.2.2 Borrowing Base Deficit. A Borrowing Base Deficit shall
exist and such condition shall continue unremedied for two (2) Business
Days.
10.2.3 Default Ratio. The Default Ratio shall equal or exceed
1.20% on a rolling three-fiscal-month average basis.
10.2.4 Dilution Ratio. The Dilution Ratio shall equal or
exceed 3.25% on a rolling three-fiscal-month average basis.
10.2.5 Delinquency Ratio. The Delinquency Ratio shall equal or
exceed 2.25% on a rolling three-fiscal-month average basis.
10.2.6 Accounts Receivable Turnover Ratio. The Accounts
Receivable Turnover Ratio shall be less than 9.50 to 1 for any Calculation
Period.
10.2.7 Event of Default. An Event of Default shall have
occurred and be continuing.
10.2.8 Validity of Transaction Documents. (a) Any Transaction
Document, or any lien or security interest granted thereunder, shall
(except in accordance with its terms), in whole or in part, terminate,
cease to be effective or cease to be the legally valid, binding and
enforceable obligation of Borrower, Servicer or any Originator party to
such Transaction Document, (b) Borrower, any Originator or Servicer shall,
directly or indirectly, contest in any manner such effectiveness,
validity, binding nature or enforceability or (c) any security interest
securing any Secured Obligation shall, in whole or in part, cease to be a
perfected first priority security interest.
43
10.2.9 Termination Date. The "Termination Date" under and as
defined in the Receivables Sale Agreement shall occur.
10.2.10 Change of Control. G&K shall cease to own 100% of the
outstanding voting stock of the Borrower.
Section 10.3 Effect of Significant Event.
(a) Optional Termination. Upon the occurrence of a Significant
Event (other than an Event of Default described in Section 10.1.4),
Administrator may, and at the request of Lender shall, by notice to Borrower (a
copy of which shall be promptly forwarded by Administrator to each Rating
Agency), declare all or any portion of the outstanding principal amount of the
Loans and other Obligations to be due and payable and/or the Lender's Commitment
(if not theretofore terminated) to be terminated by declaring the Commitment
Termination Date to have occurred, whereupon the full unpaid amount of such
Loans and other Obligations which shall be so declared due and payable shall be
and become immediately due and payable, without further notice, demand or
presentment, and/or, as the case may be, the Lender's Commitment shall
terminate.
(b) Automatic Termination. Upon the occurrence of an Event of
Default described in Section 10.1.4), the Commitment Termination Date shall be
deemed to have occurred automatically, and all outstanding Loans and all other
Obligations shall become immediately and automatically due and payable, all
without presentment, demand, protest, or notice of any kind.
(c) Notice to Rating Agencies. Administrator shall notify each
Rating Agency of the occurrence of any continuing Significant Event, promptly
following its actual knowledge thereof.
(d) Limitation on Funds Available for Payments. Unless and until
the aggregate outstanding principal balance of the Loans hereunder is less than
10% of the highest amount ever borrowed hereunder, no repayment of the
Obligations may be made with any funds other than (A) Collections and (B) the
Borrower's initial paid-in cash capital (if any then remains).
ARTICLE XI.
THE SERVICER
Section 11.1 G&K as Initial Servicer. The servicing, administering
and collection of the Receivables shall be conducted by the Person designated
from time to time as Servicer under this Agreement. Until such time following
the occurrence of a Servicer Event of Default or an Amortization Event as
Administrator shall notify G&K and Borrower in writing of the revocation of such
power and authority, Borrower, Lender and Administrator hereby appoint G&K to
act as Servicer under the Transaction Documents.
44
Section 11.2 Certain Duties of the Servicer.
11.2.1 Authorization to Act as Borrower's Agent. Borrower
hereby appoints Servicer as its agent for the following purposes: (i)
selecting the amount of each requested Loan and executing Borrowing
Requests on behalf of Borrower, (ii) making transfers among, deposits to
and withdrawals from all deposit accounts of Borrower for the purposes
described in the Transaction Documents, (iii) arranging payment by
Borrower of all Fees, expenses, other Obligations and other amounts
payable under the Transaction Documents, (iv) causing the repayment and
prepayment of the Loans as required and permitted pursuant to Section 4.1
and (v) executing and preparing the Monthly Reports; PROVIDED, HOWEVER,
that Servicer shall act in such capacity only as an agent of Borrower and
shall incur thereby no additional obligations with respect to any Loan,
and nothing herein shall be deemed to authorize Servicer to take any
action as Borrower's agent which Borrower is precluded from taking itself.
Borrower irrevocably agrees that (A) it shall be bound by all proper
actions taken by Servicer pursuant to the preceding sentence, and (B)
Lender, Administrator and the banks holding all deposit accounts of
Borrower are entitled to accept submissions, determinations, selections,
specifications, transfers, deposits and withdrawal requests, and payments
from Servicer on behalf of Borrower.
11.2.2 Servicer to Act as Servicer.
(a) Servicer shall service and administer the Receivables on behalf
of Borrower and Administrator (for the benefit of the Secured Parties) and
shall have full power and authority, acting alone and/or through
subservicers as provided in Section 11.2.2(c), to do any and all things
which it may deem reasonably necessary or desirable in connection with
such servicing and administration and which are consistent with this
Agreement. Consistent with the terms of this Agreement, Servicer may
waive, modify or vary any term of any Receivable or consent to the
postponement of strict compliance with any such term or in any manner,
grant indulgence to any Obligor if, in Servicer's reasonable
determination, such waiver, modification, postponement or indulgence is
not materially adverse to the interests of Borrower or Administrator (for
the benefit of the Secured Parties); PROVIDED, HOWEVER, that Servicer may
not permit any modification with respect to any Receivable that would
reduce the Unpaid Balance (except for actual payments thereof), or extend
the due date thereof, except that Servicer may take such actions with
respect to Defaulted Receivables if such actions will, in Servicer's
reasonable business judgment, maximize the Collections thereof. Without
limiting the generality of the foregoing, Servicer in its own name or in
the name of Borrower is hereby authorized and empowered by Borrower when
Servicer believes it appropriate in its best judgment to execute and
deliver, on behalf of Borrower, any and all instruments of satisfaction or
cancellation, or of partial or full release or discharge and all other
comparable instruments, with respect to the Receivables.
45
(b) Servicer shall service and administer the Receivables by
employing such procedures (including collection procedures) and degree of
care, in each case consistent with applicable law, with the Credit and
Collection Policy and with prudent industry standards, as are customarily
employed by Servicer in servicing and administering receivables owned or
serviced by Servicer comparable to the Receivables. Servicer shall not
take any action to impair Administrator's (for the benefit of the Secured
Parties) security interest in any Receivable, except to the extent allowed
pursuant to this Agreement or required by law.
(c) Servicer may perform any of its duties pursuant to this
Agreement, including those delegated to it pursuant to this Agreement,
through subservicers appointed by Servicer, PROVIDED that such
subservicing arrangements may be terminated, at Administrator's
discretion, upon the replacement of G&K as Servicer. Such subservicers may
include Affiliates of Servicer. Notwithstanding any such delegation of a
duty, Servicer shall remain obligated and liable for the performance of
such duty as if Servicer were performing such duty.
(d) Servicer may take such actions as are necessary to discharge its
duties as Servicer in accordance with this Agreement, including the power
to execute and deliver on behalf of Borrower such instruments and
documents as may be customary, necessary or desirable in connection with
the performance of Servicer's duties under this Agreement (including
consents, waivers and discharges relating to the Receivables).
(e) Servicer shall keep separate records covering the transactions
contemplated by this Agreement, including the identity and collection
status of each Receivable purchased by Borrower from an Originator and the
Purchase Price Credits.
11.2.3 Collections.
(a) On or prior to the Closing Date, Borrower and Servicer shall
have established and shall maintain thereafter the following system of
collecting and processing Collections of Receivables: The Originators
shall deposit all payments on the Receivables into a Deposit Account which
is swept each Business Day into a Concentration Account.
(b) On or prior to the Closing Date, Administrator shall have
received a Concentration Account Agreement with respect to each
Concentration Account. Servicer's right of access to each Concentration
Account shall be revocable at the option of Administrator upon the
occurrence of Unmatured Significant Event or Significant Event. In
addition, after the occurrence of any Unmatured Significant Event or any
Significant Event, Servicer agrees that it shall, upon the written request
of Administrator, notify all Obligors under Receivables to make payment
thereof to (i) one or more bank accounts and/or post-office boxes
designated by Administrator and specified in such notice or (ii) any
successor Servicer appointed hereunder.
46
(c) [Reserved].
(d) All Collections received by an Originator or Servicer in respect
of Receivables will, pending remittance to a Concentration Account as
provided in Section 11.2.4, be held by an Originator or Servicer in trust
for the exclusive benefit of Administrator, and shall not be commingled
with any other funds or property of any Originator or Servicer.
(e) Borrower and Servicer hereby irrevocably waive any right to
set-off or otherwise deduct any amount owing by or to them from any
Collections received by them prior to remittance thereof in accordance
with this Agreement.
(f) In performing its duties and obligations hereunder, Servicer (i)
shall not impair the rights of Borrower or Administrator in any
Receivable, (ii) shall not amend the terms of any Receivable other than in
accordance with the Credit and Collection Policy and this Agreement, (iii)
shall not release any goods securing a Receivable from the lien created by
such Receivable except as specifically provided for herein, and (iv) shall
be entitled to commence or settle any legal action to enforce collection
of any Receivable or to foreclose upon or repossess any goods securing
such Receivable. In the event that Servicer shall breach any of its
covenants set forth in clause (i), (ii) or (iii) of this Section
11.2.3(f), Servicer shall pay the Unpaid Balance of each Receivable
affected thereby on the Distribution Date following the Calculation Period
in which such event occurs. For the purposes of Section 11.7 hereof,
Servicer shall not be deemed to have breached its obligations under this
Section 11.2.3(f) unless it shall fail to make such payment with respect
to any Receivable affected by Servicer's noncompliance with clause (i),
(ii) or (iii) of this Section 11.2.3(f).
(g) All payments or other amounts collected or received by Servicer
in respect of a Receivable shall be applied to the Unpaid Balance of such
Receivable.
11.2.4 Concentration Accounts.
(a) On any Business Day, Borrower may withdraw, or permit Servicer
to withdraw, funds that are on deposit in the Concentration Accounts,
PROVIDED that (i) no Significant Event or Unmatured Significant Event has
occurred and is continuing, (ii) the Commitment Termination Date has not
occurred, and (iii) after giving effect to such withdrawal, no Borrowing
Base Deficit has occurred or will result therefrom and there are funds in
the Concentration Accounts at least equal to the interest on the Loans and
the Fees accrued through such date.
(b) Prior to 3:00 p.m., New York time, on the Business Day preceding
each Distribution Date (a "DEPOSIT DATE"): (i) Servicer shall deposit or
cause to be deposited in a Concentration Account, to the extent not
already on deposit therein, an amount equal to, without duplication, the
lesser of (A) the sum of (1) the aggregate amount of all Collections
received during the immediately
47
preceding Calculation Period, plus (2) the aggregate amounts due from
Servicer on such Distribution Date pursuant to Section 11.2.3(f) hereof,
plus (3) the aggregate amount of Purchase Price Credits, if any, required
to be made in cash on such Distribution Date in accordance with the
Receivables Sale Agreement, and (B) the amounts due on such Distribution
Date pursuant to clauses FIRST through SIXTH of Section 4.2(b), PROVIDED
that if a Significant Event or Unmatured Significant Event shall exist on
such Distribution Date or the Commitment Termination Date has occurred,
then the Servicer shall deposit all of the amounts described in the
foregoing clause (A) in a Concentration Account on such Deposit Date.
(c) Servicer shall distribute the amounts on deposit in the
Concentration Accounts in accordance with Section 4.2 hereof.
Section 11.3 Servicing Compensation. Servicer, as compensation for
its activities hereunder, shall be entitled to receive the Servicing Fee, which
shall be payable by Borrower on each Distribution Date from funds on deposit in
the Concentration Accounts in accordance with Section 4.2. Servicer shall be
required to pay all expenses incurred by it in connection with its servicing
activities hereunder (including payment of the fees and expenses of any
subservicer) and shall not be entitled to reimbursement therefor except as
specifically provided herein.
Section 11.4 Agreement Not to Resign. G&K acknowledges that Lender
and Administrator have relied on G&K's agreement to act as Servicer hereunder in
their respective decisions to execute and deliver the respective Transaction
Documents to which they are parties. In recognition of the foregoing, G&K agrees
not to resign as Servicer voluntarily, except as required by law (as evidenced
by the delivery of an outside opinion of counsel to Administrator, in form and
substance satisfactory to Administrator), without the prior written consent of
Administrator.
Section 11.5 Designation of Servicer. Borrower agrees not to
designate any Person other than G&K as Servicer without the prior written
consent of Administrator.
Section 11.6 Termination. The authorization of Servicer to act on
behalf of Borrower under this Agreement and the other Transaction Documents
shall terminate at the sole discretion of Administrator upon the replacement of
Servicer by a successor Servicer selected by Administrator.
Section 11.7 Servicer Events of Default. Each of the following shall
constitute a "SERVICER EVENT OF DEFAULT" under this Agreement:
11.7.1 Failure to Make Payments and Deposits. Servicer shall
fail to make any payment or deposit required to be made by it hereunder on
the date when due and such failure shall continue for two (2) Business
Days.
11.7.2 Non-Compliance with Other Provisions. Servicer shall
fail to perform or observe any provision of Section 9.1.5(b) and such
failure shall continue for two (2) Business Days, or Servicer shall fail
to perform or observe
48
any other term, covenant or agreement contained in this Agreement or any
other Transaction Document on its part to be performed or observed and any
such failure shall remain unremedied for thirty (30) days.
11.7.3 Delegation. Servicer shall delegate any of its duties
hereunder, except as expressly permitted in accordance with the terms
hereof.
11.7.4 Breach of Representations and Warranties. Any
representation, warranty, certification or statement made by Servicer in
this Agreement, any other Transaction Document to which Servicer is a
party or in any Borrowing Base Certificate, Monthly Report or other
document delivered pursuant hereto or thereto shall prove to have been
incorrect in any material respect when made or deemed made; PROVIDED THAT
the materiality threshold in the preceding clause shall not be applicable
with respect to any representation or warranty which itself contains a
materiality threshold.
11.7.5 Bankruptcy. An Event of Bankruptcy shall have occurred
and remained continuing with respect to Servicer.
11.7.6 Judgments. A final judgment or judgments for the
payment of money of $12,300 or more in the aggregate shall have been
rendered against Borrower, or in excess of $10,000,000 in the aggregate
shall have been rendered against Servicer, after deducting (a) the amount
with respect to which Servicer is insured and with respect to which the
insurer has assumed responsibility in writing, and (b) the amount for
which Servicer is otherwise indemnified if the terms of such
indemnification are satisfactory to Lender (or its assigns), and the same
shall have remained unsatisfied and in effect, without stay of execution,
for a period of thirty (30) consecutive days after the period for
appellate review shall have elapsed.
11.7.7 Cross-Default to Material Debt. Failure of Servicer to
pay any Debt in excess of $10,000,000 in aggregate principal amount
("MATERIAL DEBT") when due; or the default by Servicer in the performance
of any term, provision or condition contained in any agreement under which
any Material Debt was created or is governed, the effect of which is to
cause, or to permit the holder or holders of such Material Debt to cause,
such Indebtedness to become due prior to its stated maturity; or any
Material Debt of Servicer shall be declared to be due and payable or
required to be prepaid (other than by a regularly scheduled payment) prior
to the date of maturity thereof.
At any time during the continuance of any Servicer Event of Default,
Administrator may, in its sole discretion, notify Servicer in writing of the
revocation of its appointment as Servicer hereunder. Upon revocation of
Servicer's appointment hereunder, Administrator shall appoint a successor
Servicer. Servicer agrees that upon receipt of written notification from
Administrator of the revocation of Servicer's appointment as Servicer hereunder,
Servicer shall upon the written request of Administrator (which request may be
contained in the notification of revocation) (i) notify all Obligors under the
Receivables to make payment thereof to a bank
49
account(s) or post office box designated by Administrator and specified in such
notice, and (ii) pay to Administrator (or its designee) immediately all
Collections then held or thereafter received by Servicer or the applicable
Originator of Receivables, together with all other payment obligations of the
Servicer hereunder owing to Lender or Administrator. Servicer shall, at its sole
cost and expense, cooperate with and assist the successor Servicer (including,
without limitation, providing access to, and transferring, all Receivable Files
and all records (including data-processing records) relating thereto (which
shall be held in trust for the benefit of the parties hereto in accordance with
their respective interests)) and allowing the successor Servicer to use all
licenses, hardware or software necessary or desirable to collect the
Receivables). G&K irrevocably agrees to act (if requested to do so) as the
data-processing agent for the successor Servicer (in substantially the same
manner as G&K conducted such data-processing functions while it acted as
Servicer).
ARTICLE XII.
ADMINISTRATOR
Section 12.1 Authorization and Action. Lender hereby appoints
SunTrust Capital Markets, Inc. as its Administrator for purposes of the
Transaction Documents and authorizes SunTrust Capital Markets, Inc. in such
capacity to take such action on its behalf under each Transaction Document and
to exercise such powers hereunder and thereunder as are delegated to SunTrust
Capital Markets, Inc., as Administrator, by the terms hereof and thereof,
together with such powers as are reasonably incidental thereto.
Section 12.2 Administrator and Affiliates. Bank and any of its
Affiliates may generally engage in any kind of business with Borrower, Bank,
Servicer, any Obligor, any of their respective Affiliates and any Person who may
do business with or own securities of Borrower, Bank, Servicer, any Obligor or
any of their respective Affiliates, all as if SunTrust Capital Markets, Inc.
were not Administrator and without any duty to account therefor to Lender.
ARTICLE XIII.
ASSIGNMENTS
Section 13.1 Restrictions on Assignments. Neither Borrower nor
Servicer may assign its rights hereunder or any interest herein without the
prior written consent of Administrator and Lender. Lender may not assign all or
any portion of Lender's Commitment to any Person other than the Liquidity
Bank(s) without the prior written consent of Borrower and Administrator. Nothing
herein shall be deemed to preclude Lenders from pledging or assigning all or any
portion of any Loan or the Lender Note:
(a) to Credit Bank, any Liquidity Bank (or any successor of any
thereof by merger, consolidation or otherwise), any Affiliate of Credit
Bank or any Liquidity Bank in connection with a draw under the Liquidity
Agreement or a Credit Advance (which may then assign all or any portion
thereof so assigned or any interest therein to such party or parties as it
may choose); or
(b) to any other Person proposed by Lender and consented to by
Administrator.
50
Administrator shall promptly provide notice of any assignment to each Rating
Agency. Subject to Section 13.2, all of the aforementioned assignments shall be
upon such terms and conditions as Lender and the assignee may mutually agree.
Section 13.2 Documentation. Lender shall deliver to each assignee an
assignment, in such form as Lender and the related assignee may agree, duly
executed by Lender, assigning any such Loan to the assignee, and Lender shall
promptly execute and deliver all further instruments and documents, and take all
further action, that the assignee may reasonably request, in order to perfect,
protect or more fully evidence the assignee's right, title and interest in and
to such Loan, and to enable the assignee to exercise or enforce any rights
hereunder or under the Lender Note evidencing such Loan.
Section 13.3 Rights of Assignee. Upon the foreclosure of any
assignment of any Loans made for security purposes, or upon any other assignment
of any Loan from Lender pursuant to this Article XIII, the respective assignee
receiving such assignment shall have all of the rights of Lender hereunder to
the extent of such assignment with respect to such Loans and all references to
Lender in Section 6.1 shall be deemed to apply to such assignee to the extent of
such assignment.
Section 13.4 Notice of Assignment. Lender shall provide notice to
Borrower of any assignment hereunder by Lender to any assignee. Lender
authorizes Administrator to, and Administrator agrees that it shall, endorse the
Lender Note to reflect any assignments made pursuant to this Article XIII or
otherwise.
ARTICLE XIV.
INDEMNIFICATION
Section 14.1 General Indemnity of Borrower. Without limiting any
other rights which any such Person may have hereunder or under applicable law,
Borrower hereby agrees to indemnify Administrator, Lender, Servicer, each
Liquidity Bank, each Credit Bank, Bank, each of Bank's Affiliates and each of
their respective successors, transferees, participants and assigns and all
officers, directors, shareholders, controlling persons, employees and agents of
any of the foregoing (each of the foregoing Persons being individually called an
"INDEMNIFIED PARTY"), forthwith on demand, on an after-tax basis, from and
against any and all damages, losses, claims, liabilities and related costs and
expenses, including reasonable attorneys' fees and disbursements (all of the
foregoing being collectively called "INDEMNIFIED AMOUNTS") awarded against or
incurred by any of them arising out of or relating to any Transaction Document
or the transactions contemplated thereby, any commingling of funds (whether or
not permitted hereunder), or the use of proceeds therefrom by Borrower,
including (without limitation) in respect of the funding of any Loan or in
respect of any Receivable; EXCLUDING, HOWEVER, (a) Indemnified Amounts to the
extent a final judgment of a court of competent jurisdiction holds that such
Indemnified Amounts resulted from gross negligence or willful misconduct on the
part of the Indemnified Party seeking indemnification, and (b) Excluded Taxes.
Section 14.2 Indemnity of Servicer. Without limiting any other
rights which any such Person may have hereunder or under applicable law, G&K as
Servicer, hereby agrees to indemnify each Indemnified Party forthwith on demand,
on an after-tax basis, from and against
51
any and all Indemnified Amounts awarded against or incurred by any of them
arising from, or related to, the negligence or willful misconduct of G&K, the
inaccuracy of any representation or warranty of G&K, or the failure of G&K to
perform its obligations under any Transaction Document; EXCLUDING, HOWEVER, (a)
Indemnified Amounts to the extent determined by a court of competent
jurisdiction to have resulted from gross negligence or willful misconduct on the
part of such Indemnified Party, (b) Indemnified Amounts to the extent solely due
to non-payment by any Obligor of an amount due and payable with respect to a
Receivable for credit reasons, and (c) any tax upon or measured by net income on
any Indemnified Party. Anything contained in this Section 14.2 to the contrary
notwithstanding: (1) the foregoing indemnification is not intended to, and shall
not, constitute a guarantee of the collectibility or payment of the Receivables,
and (2) nothing in this Section 14.2 shall require the Servicer to indemnify any
Indemnified Party for Receivables which are not collected, not paid or are
otherwise uncollected on account of the insolvency, bankruptcy, lack of
creditworthiness or financial inability to pay of the applicable Obligor.
ARTICLE XV.
MISCELLANEOUS
Section 15.1 No Waiver; Remedies. No failure on the part of Lender,
Administrator, any Indemnified Party or any Affected Party to exercise, and no
delay in exercising, any right, power or remedy hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise by any of them of any
right, power or remedy hereunder preclude any other or further exercise thereof,
or the exercise of any other right, power or remedy. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
Without limiting the foregoing, each of Bank, each Credit Bank and each
Liquidity Bank is hereby authorized by Borrower at any time and from time to
time, to the fullest extent permitted by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by Bank, such Credit Bank or such
Liquidity Bank to or for the credit or the account of Borrower, now or hereafter
existing under this Agreement, to Administrator, any Affected Party, any
Indemnified Party, or Lender or their respective successors and assigns.
Section 15.2 Amendments, Etc. No amendment, modification or waiver
of, or consent with respect to, any provision of this Agreement and any
Schedules hereto, or the Lender Note shall in any event be effective unless the
same shall be in writing and signed and delivered by (i) Borrower, Servicer,
Administrator and Lender (with respect to an amendment), or (ii) Administrator
and Lender (with respect to a waiver or consent by them) or Servicer or Borrower
(with respect to a waiver or consent by them), as the case may be, and then any
such waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given; PROVIDED, HOWEVER, that no material
amendment of this Agreement (other than an amendment to extend the Scheduled
Commitment Termination Date) shall be effective unless the Lender (or
Administrator on its behalf) shall have received written confirmation by the
Rating Agencies that such amendment shall not cause the rating on the then
outstanding Commercial Paper Notes to be downgraded or withdrawn. Administrator
shall provide each Rating Agency with a copy of each amendment to or consent or
waiver under this Agreement promptly following the effective date thereof.
52
Section 15.3 Notices, Etc. All notices and other communications
provided for hereunder shall, unless otherwise stated herein, be in writing
(including facsimile communication) and shall be personally delivered or sent by
certified mail, postage prepaid, or by facsimile, to the intended party at the
address or facsimile number of such party set forth opposite its name on
Schedule 15.3 hereto or at such other address or facsimile number as shall be
designated by such party in a written notice to the other parties hereto. All
such notices and communications shall be effective, (a) if personally delivered,
when received, (b) if sent by certified mail, three Business Days after having
been deposited in the mail, postage prepaid, (c) if sent by overnight courier,
one Business Day after having been given to such courier, and (d) if transmitted
by facsimile, when sent, receipt confirmed by telephone or electronic means,
except that notices and communications pursuant to Section 2.2 shall not be
effective until received.
Section 15.4 Costs, Expenses and Taxes. In addition to its
obligations under Section 14.1, Borrower agrees to pay on demand:
(a) all costs and expenses incurred by Administrator, Lender, each
Liquidity Bank, each Credit Bank and Servicer in connection with (i) the
preparation, execution, delivery, administration and enforcement of, or
any breach of, this Agreement, the Lender Note, the other Transaction
Documents, the Liquidity Agreement and, to the extent directly related to
this Agreement, the Program Documents (including any amendments or
modifications of or supplements to the Program Documents directly related
to this Agreement), including, without limitation, the reasonable fees and
expenses of counsel to any of such Persons incurred in connection
therewith, (ii) the perfection of Administrator's security interest in the
Collateral, (iii) the maintenance of the Concentration Accounts and the
Deposit Accounts, (iv) the audit of the books, records and procedures of
Originators, Servicer and Borrower by Administrator's auditors (which may
be employees of Administrator), and (v) Rating Agency fees related to the
transactions contemplated by this Agreement; and
(b) all stamp and other transactional or filing taxes and fees
payable or determined to be payable in connection with the execution,
delivery, filing and recording of this Agreement, the Lender Note, the
other Transaction Documents, or (to the extent directly related to this
Agreement) the Program Documents, and agrees to indemnify each Indemnified
Party against any liabilities with respect to or resulting from any delay
in paying or omission to pay such taxes and fees.
Section 15.5 Binding Effect; Survival. This Agreement shall be
binding upon and inure to the benefit of Borrower, Bank, Lender, Administrator,
and their respective successors and assigns, and the provisions of Article VI
and Article XIV shall inure to the benefit of the Affected Parties and the
Indemnified Parties, respectively, and their respective successors and assigns;
PROVIDED, HOWEVER, nothing in the foregoing shall be deemed to authorize any
assignment not permitted by Article XIII. This Agreement shall create and
constitute the continuing obligations of the parties hereto in accordance with
its terms, and shall remain in full force and effect until such time, after the
Commitment Termination Date, when all Obligations have been finally and fully
paid and performed. The rights and remedies with respect to any breach of any
representation and warranty made by Borrower or Servicer pursuant to Article
VIII
53
and the indemnification and payment provisions of Article XIV and Article VI,
Sections 15.4, 15.11 and 15.12 shall be continuing and shall survive any
termination of this Agreement and any termination of G&K's rights to act as
Servicer hereunder or under any other Transaction Document.
Section 15.6 Captions and Cross References. The various captions
(including, without limitation, the table of contents) in this Agreement are
provided solely for convenience of reference and shall not affect the meaning or
interpretation of any provision of this Agreement. Unless otherwise indicated,
references in this Agreement to any Section, Appendix, Schedule or Exhibit are
to such Section of or Appendix, Schedule or Exhibit to this Agreement, as the
case may be, and references in any Section, subsection, or clause to any
subsection, clause or subclause are to such subsection, clause or subclause of
such Section, subsection or clause.
Section 15.7 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions of this Agreement or affecting the
validity or enforceability of such provision in any other jurisdiction.
Section 15.8 Governing Law. THIS AGREEMENT SHALL BE A CONTRACT MADE
UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT REGARD
TO THE CONFLICT OF LAW PRINCIPLES THEREOF (OTHER THAN SECTION 5-1401 OF THE NEW
YORK GENERAL OBLIGATIONS LAW) EXCEPT TO THE EXTENT THAT THE LAWS OF ANOTHER
JURISDICTION GOVERN THE PERFECTION, OR THE EFFECT OF PERFECTION OR
NONPERFECTION, OF THE SECURITY INTERESTS OF THE ADMINISTRATOR, FOR THE BENEFIT
OF THE SECURED PARTIES.
Section 15.9 Counterparts. This Agreement may be executed by the
parties hereto in several counterparts, each of which shall be deemed to be an
original but all of which shall constitute together but one and the same
agreement.
Section 15.10 Submission to Jurisdiction; Waiver of Trial by Jury.
(a) Each of Borrower and Servicer hereby submits to the nonexclusive
jurisdiction of any United States District Court for the Southern District
of New York and of any New York state court sitting in New York, New York
for purposes of all legal proceedings arising out of, or relating to, the
Transaction Documents or the transactions contemplated thereby. Each of
Borrower and Servicer hereby irrevocably waives, to the fullest extent
possible, any objection it may now or hereafter have to the venue of any
such proceeding and any claim that any such proceeding has been brought in
an inconvenient forum. Nothing in this Section 15.10 shall affect the
right of Administrator or Lender to bring any action or proceeding against
Borrower or Servicer or their respective properties in the courts of other
jurisdictions.
(b) TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH PARTY HERETO
IRREVOCABLY WAIVES ALL RIGHT OF TRIAL
54
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF, OR IN
CONNECTION WITH, ANY TRANSACTION DOCUMENT OR ANY MATTER ARISING
THEREUNDER.
Section 15.11 No Recourse Against Lender. The obligations of the
Lender under this Agreement are solely the limited liability company obligations
of Lender. No recourse shall be had for any obligation, covenant or agreement
(including, without limitation, the payment of any amount owing in respect to
this Agreement or the payment of any Fee hereunder or for any other obligation
or claim) arising out of or based upon this Agreement or any other agreement,
instrument or Transaction Document entered into pursuant hereto or in connection
herewith against any member, employee, officer, director, manager,
administrator, partner or organizer of Lender, as such, by the enforcement of
any assessment or by any legal or equitable proceeding, by virtue of any statute
or otherwise.
Section 15.12 No Proceedings. Each of the parties hereto hereby
agree that it will not institute against Lender, or join any other Person in
instituting against Lender, any insolvency proceeding (namely, any proceeding of
the type referred to in the definition of Event of Bankruptcy) so long as any
Commercial Paper Notes issued by Lender shall be outstanding and there shall not
have elapsed one year plus one day since the last day on which any such
Commercial Paper Notes shall be outstanding. The provisions of this Section
15.12 shall survive the termination hereof.
Section 15.13 Confidentiality.
(a) Unless otherwise consented to by Administrator or required by
any applicable law, rule, regulation, direction, request or order of any
judicial, administrative or regulatory authority or proceedings, each of
Borrower and Servicer hereby agrees that it shall maintain and shall cause each
of its employees and officers to maintain the confidentiality of the Fee Letter
and the other confidential or proprietary information with respect to
Administrator and Lender and their respective businesses obtained by it or them
in connection with the structuring, negotiating and execution of the
transactions contemplated herein, except that each of Borrower, Servicer and
their respective officers and employees may disclose such information to their
external accountants, attorneys and other advisors and as required by any
applicable law, rule, direction, request or order of any judicial,
administrative or regulatory authority or proceeding (whether or not having the
force or effect of law). The restrictions in this Section 15.13(a) shall not
apply to any information which is or becomes generally available to the public
other than as a result of disclosure by Borrower, Servicer or one of their
respective Affiliates.
(b) Each of Borrower and Servicer hereby consents to the disclosure
of any nonpublic information with respect to it (i) to Administrator, the
Liquidity Banks or Lender by each other, (ii) as required by or pursuant to any
applicable law, rule, regulation, direction, request or order of any judicial,
administrative or regulatory authority or proceedings (whether or not having the
force or effect of law), (iii) to any prospective or actual assignee or
participant of any of the Persons described in clause (i), and (iv) to any
Rating Agency, Commercial Paper Note dealer, Credit Bank or Support Provider to
Lender or any entity organized for the purpose of purchasing, or making loans
secured by, financial assets for which Administrator acts as the administrative
agent or administrator and to any officers, directors, employees, outside
55
accountants and attorneys of any of the foregoing, PROVIDED each Person
described in the foregoing clauses (iii) and (iv) is informed of the
confidential nature of such information.
Section 15.14 Entire Agreement. This Agreement and the other
Transaction Documents executed and delivered herewith represent the final
agreement among the parties hereto and thereto and may not be contradicted by
evidence of prior, contemporaneous or subsequent oral agreements of the parties.
There are no unwritten oral agreements among the parties.
Section 15.15 Limitation on Payments. Notwithstanding any provisions
contained in this Agreement to the contrary, the Lender shall not, and shall not
be obligated to, pay any amount pursuant to this Agreement unless (a) the Lender
has received funds which may be used to make such payment and which funds are
not required to repay the Commercial Paper Notes and advances under the
Voluntary Advance Agreement when due and (b) after giving effect to such
payment, either (i) there is sufficient liquidity availability (determined in
accordance with the Program Documents), under all of the liquidity facilities
for the Lender's commercial paper program, to pay the "Face Amount" (as defined
below) of all outstanding Commercial Paper Notes and advances under the
Voluntary Advance Agreement when due or (ii) all Commercial Paper Notes and
advances under the Voluntary Advance Agreement are paid in full. Any amount
which the Lender does not pay pursuant to the operation of the preceding
sentence shall not constitute a claim (as defined in SECTION101 of the
Bankruptcy Code) against or corporate obligation of the Lender for any such
insufficiency unless and until such payment may be made in accordance with
clauses (a) and (b) above. The agreements in this Section 15.15 shall survive
termination of this Agreement and payment of all obligations hereunder. As used
in this Section 15.15, the term "Face Amount" means, with respect to outstanding
Commercial Paper Notes or advances under the Voluntary Advance Agreement, (x)
the face amount of any such Commercial Paper Notes issued on a discount basis,
and (y) the principal amount of, plus the amount of all interest accrued and to
accrue thereon to the stated maturity date of, any such Commercial Paper Notes
issued on an interest-bearing basis or any such advances under the Voluntary
Advance Agreement.
[SIGNATURE PAGES BEGIN ON NEXT PAGE]
56
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the day
and year first above written.
G&K Receivables Corp., AS BORROWER
By: /s/ Xxxxxxx X. Xxxxxx
Name: Xxxxxxx X. Xxxxxx
Title: Chief Financial Officer
G&K SERVICES, INC., AS INITIAL SERVICER
By: /s/ Xxxxxxx X. Xxxxxx
Name: Xxxxxxx X. Xxxxxx
Title: Chief Financial Officer
57
THREE PILLARS FUNDING LLC, AS LENDER
By: /s/ Xxxxxxx X. Xxxxxxx
Name: Xxxxxxx X. Xxxxxxx
Title: President
58
SUNTRUST CAPITAL MARKETS, INC., AS ADMINISTRATOR
By: /s/ Xxxxx X. Xxxxxxxx
---------------------
Name: Xxxxx X. Xxxxxxxx
Title: Managing Director
59
