Exhibit 10.4
SECOND AMENDMENT TO
LOAN AGREEMENT
This SECOND AMENDMENT TO LOAN AGREEMENT (this "Agreement") is
entered into and, unless otherwise stated herein, effective as of March 8,
2004, by and among Xxxxxxxx Corporation, a Missouri corporation
("Borrower"), LaSalle Bank National Association ("LaSalle"), as
Administrative Agent ("Administrative Agent"), and LaSalle and the other
lenders listed on the signature page hereto (the "Lenders").
RECITALS:
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A. Borrower, Administrative Agent and Lenders are party to that
certain Loan Agreement dated as of May 30, 2002, as amended by the
First Amendment to Loan Agreement dated as of January 24, 2003 (as
amended, the "Original Loan Agreement").
B. Administrative Agent, Lenders and Borrower have agreed to the
provisions set forth herein on the terms and conditions contained
herein.
AGREEMENT
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Therefore, in consideration of the mutual agreements herein and
other sufficient consideration, the receipt of which is hereby acknowledged,
Borrower, Administrative Agent and the Lenders hereby agree as follows:
1. DEFINITIONS. All references to the "Agreement" or the "Loan Agreement" in
the Original Loan Agreement and in this Agreement shall be deemed to be
references to the Original Loan Agreement as it may be amended, restated,
extended, renewed, replaced, or otherwise modified from time to time.
Capitalized terms used and not otherwise defined herein have the meanings
given them in the Original Loan Agreement.
2. EFFECTIVENESS OF AGREEMENT. This Agreement shall become effective, unless
otherwise stated herein, as of the date first written above, but only if
this Agreement has been executed by Borrower, Administrative Agent and the
Lenders, and only if all of the documents listed on Exhibit A to this
Agreement have been delivered and, as applicable, executed, sealed,
attested, acknowledged, certified, or authenticated, each in form and
substance satisfactory to Administrative Agent and the Lenders.
3. AMENDMENT FEE. On the date hereof, Borrower shall pay to Administrative
Agent for the benefit of the Lenders, a one-time Second Amendment Fee equal
to the following amount: (i) ten (10) basis points on the first $70,000,000
of the Aggregate Revolving Loan Commitment, as amended by this Agreement
payable to each Lender based on such Lender's pro-rata share of such amount
based on the pro rata shares of the Lenders immediately prior to giving
effect to this Amendment, plus (ii) twenty five (25) basis points on the
remaining $30,000,000 of the Aggregate Revolving Loan Commitment as amended
by this Agreement, payable to each Lender based on such Lender's pro-rata
share that each Lender is committing to of such amount.
4. CONSENT TO DUKE ACQUISITION. Administrative Agent and the Lenders consent
to the Duke Acquisition if, at the closing of the Duke Acquisition, a
Responsible Officer of Borrower delivers to Administrative Agent a
certificate on behalf of Borrower certifying that the requirements in
clauses (v) and (vi) of Section 13.5 of the Loan Agreement have been
satisfied. The consent contained in this
Section 4 is specific in intent and is valid only for the specific purpose
for which given. Nothing contained herein obligates Administrative Agent or
any Lender to agree to any additional waivers or consents of any provisions
of any of the Loan Documents.
5. CONSENT TO LIFE UNIFORM SALE.
5.1. Borrower has advised Administrative Agent and the Lenders that
it and the other Covered Persons intend to sell substantially all
of the assets and certain liabilities relating to their Life
Uniform retail business as an asset sale, sale of capital stock of
one or more Subsidiaries, or a combination of an asset sale and
sale of such capital stock. In connection with such sale, Borrower
and certain of its Subsidiaries may contribute the assets
comprising the Life Uniform retail business to one or more new
Subsidiaries, and/or may transfer the capital stock of certain
Subsidiaries holding such assets to one or more new Subsidiaries.
The transactions referred to in this Section 5.1 are collectively
referred to herein as the "Life Uniform Sale."
5.2. Notwithstanding the terms of the Loan Agreement, including,
but not limited to, Sections 13.6, 13.8, 13.10, 13.15, and 15.1.4,
the Administrative Agent and the Lenders hereby consent to the Life
Uniform Sale if the requirements listed on Exhibit C are met.
5.3. Notwithstanding the terms of Section 6.3.3.1 of the Loan
Agreement, Administrative Agent and the Lenders hereby agree that
Borrower shall not be required to turn over to Administrative Agent
for the ratable benefit of the Lenders, to be applied to reduce the
Loan Obligations, proceeds from the Life Uniform Sale to the
extent, and only to the extent, if to do so would cause Borrower to
break Borrower's Interest Hedge Obligation existing on the date
hereof up to the amount hedged thereunder on the date hereof.
5.4. The consents contained in this Section 5 are specific in
intent and are valid only for the specific purpose for which given.
Nothing contained herein obligates Administrative Agent or any
Lender to agree to any additional waivers or consents of any
provisions of any of the Loan Documents.
6. AMENDMENTS. The Original Loan Agreement is hereby amended as follows:
6.1. AGGREGATE AMOUNT; REDUCTION. The first sentence of
Section 3.1.1 of the Original Loan Agreement is deleted and replaced with
the following:
"Subject to the limitations in Section 3.1.2 and elsewhere herein,
each Lender commits to make available to Borrower, from the
Effective Date to the Revolving Loan Maturity Date, such Lender's
pro-rata share (as listed on Exhibit 3 hereto) of an Aggregate
Revolving Loan Commitment of One Hundred Million Dollars
($100,000,000), by funding such Lender's pro-rata share of
Revolving Loan Advances made from time to time by Administrative
Agent as provided herein."
6.2. MATURITY. Section 6.1.2 of the Original Loan Agreement is
deleted and replaced with the following:
"6.1.2. PRINCIPAL. Subject to Section 6.1.3, Borrower shall repay
the entire amount of the Aggregate Revolving Loan as then
outstanding on May 30, 2007 (the Revolving Loan Maturity Date), and
Borrower shall repay the entire amount of the Swingline Loan on
demand, or if no demand is made, on the Revolving Loan Maturity
Date.
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6.3. EXTENSION OF MATURITY. Section 6.1.3 of the Original Loan
Agreement is deleted and replaced with the following:
"6.1.3. EXTENSION OF REVOLVING LOAN MATURITY DATE. If Borrower
provides written notice to the Administrative Agent and each Lender
(an "Extension Request") no less then ninety (90) days and no more
than one hundred and fifty days (150) prior to May 30, 2005 (such
date being the "Extension Date") that it wishes to extend the
Revolving Loan Maturity Date (the "First Extension Right"), and
again, prior to the first annual anniversary of the Extension Date
that it wishes to extend the Revolving Loan Maturity Date (the
"Second Extension Right"), in each case by one year, then, if, and
only if, each of the Lenders affirmatively agree, in each case, in
writing to an extension in each of their respective sole discretion
by executing an extension agreement containing such terms and
conditions as required by the Lenders (signed by Administrative
Agent, each Lender and Borrower), the Revolving Loan Maturity Date
shall be so extended by one year. Whether or not Borrower exercises
the First Extension Right, Borrower may exercise the Second
Extension Right. The Administrative Agent shall notify the Borrower
in writing within 30 days of the Lenders' receipt of an Extension
Request, whether or not the Lenders agree to an extension of the
Revolving Loan Maturity Date and, if so, under what terms and
conditions. If a Lender fails to advise the Administrative Agent of
its decision with respect to an Extension Request within such 30
day period referred to in the preceding sentence, such Lender shall
be deemed to have denied such request.
6.4. MARGINS.
Section 4.6 of the Original Loan Agreement is deleted and replaced with the
following:
{remainder of page intentionally left blank}
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"4.6. BASE RATE REVOLVING MARGINS AND EURODOLLAR REVOLVING MARGINS.
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IF THE RATIO OF
BORROWER FUNDED
INDEBTEDNESS TO EBITDA
(FOR THE FOUR FISCAL
QUARTER PERIOD OF
BORROWER MOST RECENTLY EURODOLLAR BASE RATE
ENDED) IS REVOLVING MARGIN REVOLVING MARGIN UNUSED FEE RATE REFERENCE LEVEL
--------------------------------------------------------------------------------------------------------------
greater than or equal
to 2.25 to 1.00 1.875% 0.00% 0.40% V
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greater than or equal
to 1.75 to 1.00 but
less than 2.25 to 1.00 1.625% 0.00% 0.35% IV
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greater than or equal
to 1.25 to 1.00 but
less than 1.75 to 1.00 1.375% 0.00% 0.30% III
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greater than or equal 1.125% 0.00% 0.25% II
to 0.75 to 1.00 but
less than 1.25 to 1.00
--------------------------------------------------------------------------------------------------------------
less than 0.75 to 1.00 0.875% 0.00% 0.20% I
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On the Second Amendment Effective Date, the pricing level shall be
Level I. Thereafter, the applicable Increments shall be
re-determined by Administrative Agent: (A) based on the ratio of
Borrower's Funded Indebtedness to EBITDA for the four fiscal
quarter period of Borrower most recently ended, promptly after each
delivery by Borrower to Administrative Agent of Borrower's
Financial Statements (and accompanying Compliance Certificate) as
required in Section 12.11 and will become applicable on the third
Business Day following the day when Borrower delivers such
Financial Statements (and accompanying Compliance Certificate) to
Administrative Agent, and (B) in connection with each Permitted
Acquisition described in 13.5(xi), based on the ratio of Borrower's
pro forma Funded Indebtedness to pro forma EBITDA for the four
fiscal quarter period of Borrower most recently ended, after giving
effect to each such Permitted Acquisition, based upon the
Compliance Certificate as required in Section 13.5(xi) delivered by
Borrower to Administrative Agent, and will become applicable on the
closing of such Permitted Acquisition."
6.5. PROJECTIONS. The following language is inserted to the end of
Section 10.13 of the Original Loan Agreement:
"The projections of Borrower's year end financial condition,
results of operations, and cash flow for the periods 2005 through
the end of the 2007 fiscal year, a copy of which have been
delivered to Administrative Agent and each Lender, represent
Borrower's good faith best estimate of Borrower's future financial
performance for the periods set forth therein. Such projections
have
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been prepared consistent with GAAP on the basis of the assumptions
set forth therein, which Borrower believes are fair and reasonable
in light of current and reasonably foreseeable business conditions."
6.6. ADDITIONAL REPRESENTATIONS AND WARRANTIES: TAX MATTERS.;
NO IMPROPER PAYMENT OR INFLUENCE; FOREIGN ENEMIES AND REGULATIONS.
New Sections 10.32,10.33, and 10.34 are added to the Original Loan Agreement
as follows:
"10.32. TAX MATTERS. Borrower does not intend to treat the Loans or
Letters of Credit and related transactions as being a "reportable
transaction" (within the meaning of Treasury Regulation Section
1.6011-4)."
"10.33 NO IMPROPER PAYMENT OR INFLUENCE. Neither Borrower nor any
other Covered Person has directly or indirectly paid or delivered
any fee, commission or other money or property, or engaged in any
lobbying, influencing or other behavior, however characterized, to
any agent, government official, regulatory body, governmental
agency or other Person, in the United States or any other country,
related to the business or operations of the Borrower or any other
Covered Person, that the Borrower and each other Covered Person
knows or has reason to believe to have been illegal under any
federal, state, or local law of the United States or any other
country having jurisdiction, or to have been for the purpose of,
and to have had the effect of, inducing or encouraging the breach
by the recipient thereof of any legal duties, whether as an
employee or otherwise to another Person."
"10.34 FOREIGN ENEMIES AND REGULATIONS. The use of the proceeds of
the Loans and use of the Letters of Credit as contemplated by this
Agreement will not violate (A) any regulations promulgated or
administered by the Office of Foreign Assets Control, United States
Department of the Treasury, including without limitation, the
Foreign Assets Control Regulations, the Transaction Control
Regulations, the Cuban Assets Control Regulations, the Foreign
Funds Control Regulations, the Iranian Assets Control Regulations,
the Nicaraguan Trade Control Regulations, the South African
Transaction Regulations, the Iranian Transactions Regulations, the
Iraqi Sanctions Regulations, the Soviet Gold Coin Regulations, the
Panamanian Transaction Regulations or the Libyan Sanctions
Regulations of the United States Treasury Department, 31 C.F.R.,
Subtitle B, Chapter V, as amended, (B) the Trading with the Enemy
Act, as amended, (C) Executive Orders 8389, 9095, 9193, 12543
(Libya), 12544 (Libya), 12722 or 12724 (Iraq), 12775 or 12779
(Haiti), or 12959 (Iran), as amended, of the President of the
United States or (D) any rule, regulation or executive order issued
or promulgated pursuant to the laws or regulations described in the
foregoing clauses (A) -(C)."
6.7. TAX NOTIFICATIONS. A new Section 12.20 is added to the Original
Loan Agreement as follows:
"12.20. TAX NOTIFICATIONS. If Borrower determines to take any
action inconsistent with its intention set forth in Section 10.32,
it will promptly notify Administrative Agent thereof. If Borrower
so notifies Administrative Agent, Borrower acknowledges that one or
more of Administrative Agent and the Lenders may treat its Loans or
its interest in Swingline Loans or Letters of Credit as part of a
transaction that is subject to Treasury Regulation Section
301.6112-1, and Administrative Agent and such Lender or Lenders, as
applicable, will maintain the lists and other records required by
such Treasury Regulation. Promptly after Borrower has notified
Administrative Agent of any intention by Borrower to treat Loans or
Letters of Credit and related
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transactions as being a "reportable transaction" (within the meaning
of Treasury Regulation Section 1.6011-4), Borrower will promptly
provide a duly completed copy of IRS Form 8886 or any successor form."
6.8. LIFE INSURANCE. A new Section 12.21 is added to the Original Loan
Agreement as follows:
"12.21. LIFE INSURANCE. Borrower shall pay all premiums and other
amounts due under the Life Insurance Policies. At all times while
any Indebtedness permitted by Section 13.2.8 is outstanding,
Borrower shall at all times keep the Life Insurance Policies
relating to such Indebtedness in full force and effect, except with
respect to any such Life Insurance Policies with respect to which
the insured person under such policy has died.
6.9. PERMITTED INDEBTEDNESS. New subsections 13.2.8 and 13.2.9 are
added to the Original Loan Agreement as follows:
"13.2.8. Indebtedness up to the cash value of the Life Insurance
Policies."
"13.2.9. Non-interest bearing Indebtedness up to $4,000,000 owing
to Duke University Health System, Inc., which is (A) incurred in
connection with the Duke Acquisition, (B) incurred as a deferred
purchase price payment for the assets being purchased by Borrower
pursuant to the Duke Acquisition, (C) due and payable in full no
later than one year following the closing date of the Duke
Acquisition, (D) not evidenced by a promissory note or other
Instrument, and (E) not secured by a Security Interest on any asset
of Borrower or any other Covered Person (although Borrower may, in
its discretion, provide a Letter of Credit to Duke University
Health System, Inc to secure the Indebtedness described in this
Section 13.2.9)."
6.10. PERMITTED SECURITY INTERESTS. A new subsection 13.4.7 is added
to the Original Loan Agreement as follows:
"13.4.7. Security Interests in favor of the issuer of the Life
Insurance Policies on the cash value of the Life Insurance Policies
to secure the Indebtedness permitted by Section 13.2.8 to such
issuer of the Life Insurance Policies to the extent of such
Indebtedness."
6.11. PERMITTED ACQUISITIONS. Clause (vii) and clause (xi) of
Section 13.5 of the Original Loan Agreement are deleted and replaced with
the following:
"(vii) excluding the Duke Acquisition, the purchase price
(including without limitation any deferred purchase price, seller
notes, assumed Indebtedness, or similar items) together with all
expenses incurred in connection with such acquisition does not
exceed $25,000,000 in the aggregate for all Permitted Acquisitions
(including, without limitation, acquisitions with negative EBITDA
and Small Permitted Acquisitions) since the Second Amendment
Effective Date,"
"(xi) except for any Permitted Acquisition with a gross purchase
price of less than $2,000,000 including without limitation any
deferred purchase price, seller notes, assumed Indebtedness, or
similar items (a "Small Permitted Acquisition"), Borrower has, no
less than 15 days prior to making such acquisition, prepared and
furnished to Administrative Agent (and Administrative Agent shall
use its reasonable efforts to promptly provide such information to
each Lender) (A) the proforma financial statements described below
for the Target Company (if such acquisition is structured as
a purchase of equity) or the Surviving Company (if such acquisition
is structured as
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a purchase of assets or a merger), demonstrating to the satisfaction
of Administrative Agent that the Target Company, all Surviving
Companies, and Borrower, as the case may be, will be Solvent upon
consummation of such acquisition and upon the passage of time
thereafter, and that none of the covenants in Section 14 will be
violated as a consequence of such acquisition or with the passage of
time thereafter, (B) a proforma Compliance Certificate showing
compliance with Section 14 of this Agreement, after giving effect to
such Permitted Acquisition, and (C) copies of the audited financial
statements (if available, or unaudited financial statements if no
audited financial statements exist) for the Target Company for the
three fiscal years most recently ended (if available) and for each
of the completed fiscal quarters in the then current fiscal year."
6.12. FIXED CHARGES, FUNDED INDEBTEDNESS AND INTEREST EXPENSE. The
definitions of "Fixed Charges," "Funded Indebtedness" and "Interest Expense"
in Section 14.1 of the Original Loan Agreement are deleted and replaced with
the following:
"Fixed Charges means, for any period of calculation, the sum of (i)
Interest Expense, (ii) the sum of all scheduled principal payments
on long term Indebtedness of Borrower (including other
interest-bearing Indebtedness) but excluding Indebtedness permitted
by Sections 13.2.8 and 13.2.9 of this Agreement, (iii) federal,
state and local income taxes paid, (iv) Stock Dividends and
Redemptions/Distributions paid or accrued for, without duplication,
(v) rental expense, and (vi) $2,000,000 per fiscal quarter, which
represents a pre-agreed to amount of maintenance capital
expenditures."
"Funded Indebtedness means the outstanding principal balance of the
Loan Obligations, other Indebtedness for borrowed money, and the
initial capitalized cost of assets subject to Capital Leases at the
time of calculation, but excluding the outstanding principal amount
of the Indebtedness permitted by Sections 13.2.8 and 13.2.9 of this
Agreement."
"Interest Expense means for any period of calculation, all
interest, whether paid in cash or accrued as a liability, but
without duplication, on Indebtedness of Borrower during such
period, including, without limitation, on Indebtedness permitted by
Section 13.2.8 and 13.2.9 of this Agreement."
6.13. FUNDED INDEBTEDNESS TO EBITDA. For all periods after
January 31, 2004, Section 14.3 of the Original Loan Agreement is deleted and
replaced with the following:
"14.3. MAXIMUM RATIO OF FUNDED INDEBTEDNESS TO EBITDA. Borrower
shall cause the ratio of Funded Indebtedness to EBITDA for the most
recently ended four fiscal quarters, for the fiscal quarters ended
on the dates specified below, calculated as of the last day of each
such fiscal quarter, to not be greater than the ratio specified for
such period:
===============================================================================================
FOUR FISCAL QUARTER PERIOD ENDED ON OR MAXIMUM RATIO OF FUNDED INDEBTEDNESS TO
MOST RECENTLY BEFORE THE FOLLOWING DATES: EBITDA
----------------------------------------------------- -----------------------------------------
July 31, 2002, October 31, 2002, January 31, 2003, 2.25:1.00
April 30, 2003, July 31, 2003, October 31, 2003,
and January 31, 2004,
----------------------------------------------------- -----------------------------------------
April 30, 2004, July 31, 2004, October 31, 2004, 2.50:1.00"
January 31, 2005, April 30, 2005, and the last day
of each July, October, January and April thereafter
===============================================================================================
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6.14. MINIMUM NET WORTH. For all periods after January 31, 2004,
Section 14.4 of the Original Loan Agreement is deleted and replaced with the
following:
"14.4. MINIMUM NET WORTH. For each completed fiscal quarter of
Borrower, Borrower's Net Worth as of the last day of such fiscal
quarter shall not be less than (i) for the fiscal quarter ending on
or most recently before April 30, 2004, the sum of (A) the greater
of (x) the Dollar amount of Net Worth that was required under this
Agreement as of October 31, 2003, or (y) 85% of Borrower's Net
Worth as of the fiscal year ending January 31, 2004 plus (B) 50% of
quarterly Net Income for such fiscal quarter, and (ii) as of any
other fiscal quarter end after April 30, 2004, an amount of not
less than the sum of (x) Fifty Percent (50%) of Net Income during
the fiscal quarter then-ended plus (y) the minimum Net Worth
required as of the prior fiscal quarter after taking into account
clause (x) above for such prior fiscal quarter, which is cumulative
from and including the fiscal quarter ending on or most recently
before April 30, 2004. If Net Income is a negative number for any
fiscal quarter (e.g. a loss), such amount shall not reduce
Borrower's Net Worth for that fiscal quarter, and shall be
disregarded for all future Net Worth calculations so that any such
negative number shall not reduce the minimum Net Worth required
hereunder for any subsequent fiscal quarter. If the Life Uniform
Sale (as defined in the Second Amendment) is consummated in
accordance with the terms of the Second Amendment, then the Dollar
amount listed in clause (A) of this Section 14.4 shall be reduced
by the actual Dollar amount of the Book Loss, if any, from the Life
Uniform Sale up to the Dollar amount of the Permitted Book Loss for
purposes of calculating the Borrower's minimum Net Worth required
under this Section beginning with the fiscal quarter in which the
Life Uniform Sale closes."
6.15. CONFIDENTIALITY. A new Section 18.14 is added to the Loan
Agreement as follows:
"18.14. DISCLOSURES. Notwithstanding anything herein or the other
Loan Documents to the contrary, Administrative Agent and each
Lender may disclose to any and all Persons, without limitation of
any kind, any information with respect to the "tax treatment" and
"tax structure" (in each case, within the meaning of Treasury
Regulation Section 1.6011-4) of the transactions contemplated
hereby and all materials of any kind (including opinions or other
tax analyses) that are provided to Administrative Agent or such
Lender relating to such tax treatment and tax structure; provided
that with respect to any document or similar item that in either
case contains information concerning the tax treatment or tax
structure of the transaction as well as other information, this
sentence shall only apply to such portions of the document or
similar item that relate to the tax treatment or tax structure of
the Loans, Letters of Credit and transactions contemplated hereby."
6.16. EXISTING DEFINITIONS. Clause (i) of the definition of
"Eurodollar Rate" is deleted and replaced with the following:
"(i) the rate per annum (rounded upwards, if necessary, to the
nearest 1/16 of 1%), as determined by Administrative Agent as
appearing in the Bloomberg Financial Markets system (or other
authoritative source selected by the Administrative Agent in its
sole discretion) as the London interbank offered rate for deposits
in Dollars at approximately 11:00 a.m. (London time) two Business
Days prior to the first day of such Interest Period for a term
comparable to such Interest Period, or, if the Bloomberg Financial
Markets system or another authoritative source is not available, as
such rate is otherwise determined by the Administrative Agent in
its sole and absolute discretion"
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6.17. NEW DEFINITIONS. The following new definitions are hereby added
to the Original Loan Agreement in alphabetical order:
"Duke Acquisition -- means that certain acquisition by Borrower of
substantially all of the laundry business assets of Duke University
Health System, Inc."
"Life Insurance Policies -- those certain life insurance policies
owned by Borrower on the lives of certain of its present and former
employees with a current aggregate cash value of approximately
$30,000,000."
"Second Amendment" -- means that certain Second Amendment to Loan
Agreement dated as of March 8, 2004 by and among Borrower,
Administrative Agent and the Lenders.
"Second Amendment Effective Date -- means March 8, 2004."
7. NEW EXHIBIT 3; NEW SCHEDULE II TO COMPLIANCE CERTIFICATE. Subject to the
terms and conditions set forth herein, the Lenders hereby agree that,
contemporaneously with this Agreement becoming effective as provided herein,
the Exhibit 3 to the Original Loan Agreement is deleted and replaced with
the Exhibit 3 attached to this Agreement. Subject to the terms and
conditions set forth herein, the Lenders hereby agree that,
contemporaneously with this Agreement becoming effective as provided herein,
the Schedule II to Compliance Certificate to the Original Loan Agreement is
deleted and replaced with the Schedule II to Compliance Certificate attached
to this Agreement.
8. PATRIOT ACT NOTIFICATION. As required by applicable federal Law and
Administrative Agent's and each other Lender's policies and practices,
Administrative Agent and each Lender may need to collect certain customer
identification information and documentation in connection with opening or
maintaining accounts, or establishing or continuing to provide services.
9. REPRESENTATIONS AND WARRANTIES OF BORROWER. Borrower hereby represents
and warrants to Administrative Agent and the Lenders that (i) Borrower's
execution, delivery and performance of this Agreement has been duly
authorized by all requisite action of Borrower, (ii) no consents are
necessary from any third parties for Borrower's execution, delivery or
performance of this Agreement, (iii) this Agreement, the Loan Agreement, and
each of the other Loan Documents, constitute the legal, valid and binding
obligations of Borrower enforceable against Borrower in accordance with
their terms, except to the extent that the enforceability thereof against
Borrower may be limited by bankruptcy, insolvency or other laws affecting
the enforceability of creditors rights generally or by equity principles of
general application, (iv) except as disclosed on the supplemental disclosure
schedule attached hereto as Exhibit B and the disclosure schedule attached
to the Original Loan Agreement, all of the representations and warranties
contained in Section 10 of the Loan Agreement are true and correct with the
same force and effect as if made on and as of the date of this Agreement,
(v) after giving effect to this Agreement, there is no Existing Default,
(vi) since the Effective Date, there has been no change or modification to
the Charter Documents of Borrower or any other Covered Person, (vii) since
the date of the Initial Financial Statements, there has been no change in
the financial condition or business operations of Borrower or any other
Covered Person which could reasonably be expected to result in a Material
Adverse Effect, (viii) there are no proceedings of any kind, pending or
threatened against Borrower or any other Covered Person, which could
reasonably be expected to result in a Material Adverse Effect, and( ix)
there are no Security Interests with respect to the Borrower or its assets,
except for Permitted Security Interests.
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10. REAFFIRMATION. Borrower hereby represents, warrants, acknowledges and
confirms that (i) the Loan Agreement and the other Loan Documents remain in
full force and effect, (ii) Borrower has no defenses to its obligations
under the Loan Agreement and the other Loan Documents, and (iii) Borrower
has no claim against Administrative Agent or any Lender arising from or in
connection with the Loan Agreement or the other Loan Documents and any such
claim is hereby irrevocably waived and released and discharged forever.
11. GOVERNING LAW. This Agreement has been deemed to be executed and
delivered in Chicago, Illinois, and shall be governed by and construed under
the laws of the State of Illinois without giving effect to choice or
conflicts of law principles thereunder.
12. SECTION TITLES. The section titles in this Agreement are for convenience
of reference only and shall not be construed so as to modify any provisions
of this Agreement.
13. COUNTERPARTS; FACSIMILE TRANSMISSIONS. This Agreement may be executed in
one or more counterparts and on separate counterparts, each of which shall
be deemed an original, but all of which together shall constitute one and
the same instrument. Signatures to this Agreement may be given by facsimile
or other electronic transmission, and such signatures shall be fully binding
on the party sending the same.
14. INCORPORATION BY REFERENCE. Administrative Agent, Lenders and Borrower
hereby agree that all of the terms of the Loan Documents are incorporated in
and made a part of this Agreement by this reference.
15. FEES AND EXPENSES. Borrower shall promptly pay to Administrative Agent
all fees, expenses and other amounts owing to Administrative Agent under the
Loan Agreement and the other Loan Documents, including, without limitation,
all fees, costs and expenses incurred by Administrative Agent in connection
with the preparation, negotiation, execution, and delivery of this
Agreement.
16. NOTICE--ORAL COMMITMENTS NOT ENFORCEABLE. Nothing contained in the
following notice shall be deemed to limit or modify the terms of the Loan
Documents:
ORAL AGREEMENTS OR COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO
FORBEAR FROM ENFORCING REPAYMENT OF A DEBT INCLUDING PROMISES TO
EXTEND OR RENEW SUCH DEBT ARE NOT ENFORCEABLE. TO PROTECT YOU
(BORROWER) AND US (CREDITOR) FROM MISUNDERSTANDING OR
DISAPPOINTMENT, ANY AGREEMENTS WE REACH COVERING SUCH MATTERS ARE
CONTAINED IN THIS WRITING, WHICH IS THE COMPLETE AND EXCLUSIVE
STATEMENT OF THE AGREEMENT BETWEEN US, EXCEPT AS WE MAY LATER AGREE
IN WRITING TO MODIFY IT.
Borrower acknowledges that there are no other agreements between
Administrative Agent, Lenders, and Borrower, oral or written, concerning
the subject matter of the Loan Documents, and that all prior agreements
concerning the same subject matter, including any proposal or commitment
letter, are merged into the Loan Documents and thereby extinguished.
17. STATUTORY NOTICE-INSURANCE. The following notice is given pursuant to
Section 10 of the Collateral Protection Act set forth in Chapter 815 Section
180/1 of the Illinois Compiled Statutes (1996); nothing contained in such
notice shall be deemed to limit or modify the terms of the Loan Documents:
10
UNLESS YOU PROVIDE EVIDENCE OF THE INSURANCE COVERAGE REQUIRED BY
YOUR AGREEMENT WITH US, WE MAY PURCHASE INSURANCE AT YOUR EXPENSE
TO PROTECT OUR INTERESTS IN YOUR COLLATERAL. THIS INSURANCE MAY,
BUT NEED NOT, PROTECT YOUR INTERESTS. THE COVERAGE THAT WE PURCHASE
MAY NOT PAY ANY CLAIM THAT YOU MAKE OR ANY CLAIM THAT IS MADE
AGAINST YOU IN CONNECTION WITH THE COLLATERAL. YOU MAY LATER CANCEL
ANY INSURANCE PURCHASED BY US, BUT ONLY AFTER PROVIDING EVIDENCE
THAT YOU HAVE OBTAINED INSURANCE AS REQUIRED BY OUR AGREEMENT. IF
WE PURCHASE INSURANCE FOR THE COLLATERAL, YOU WILL BE RESPONSIBLE
FOR THE COSTS OF THAT INSURANCE, INCLUDING THE INSURANCE PREMIUM,
INTEREST AND ANY OTHER CHARGES WE MAY IMPOSE IN CONNECTION WITH THE
PLACEMENT OF THE INSURANCE, UNTIL THE EFFECTIVE DATE OF THE
CANCELLATION OR EXPIRATION OF THE INSURANCE. THE COSTS OF THE
INSURANCE MAY BE ADDED TO YOUR TOTAL OUTSTANDING BALANCE OR
OBLIGATION. THE COSTS OF THE INSURANCE MAY BE MORE THAN THE COST OF
INSURANCE YOU MAY BE ABLE TO OBTAIN ON YOUR OWN.
{REMAINDER OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGE IMMEDIATELY FOLLOWS}
11
IN WITNESS WHEREOF, this Agreement has been duly executed as of
the date first above written.
XXXXXXXX CORPORATION, A MISSOURI CORPORATION, AS BORROWER
By: /s/ Xxxxx X. Xxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxx
-----------------------------------
Title: Vice President
----------------------------------
LASALLE BANK NATIONAL ASSOCIATION,
AS ADMINISTRATIVE AGENT AND A LENDER
By: /s/ Xxxxxxxx X. Xxxxxxx
-------------------------------------
Name: Xxxxxxxx X. Xxxxxxx
----------------------------------
Title: Assistant Vice President
---------------------------------
UMB BANK, NATIONAL ASSOCIATION, A LENDER
By: /s/ Xxxxx X. Xxxx
-------------------------------------
Name: Xxxxx X. Xxxx
-----------------------------------
Title: Sr. Vice President
----------------------------------
XXXXX FARGO BANK, N.A., A LENDER
By: /s/ Xxxxx X. Stargis
-------------------------------------
Name: Xxxxx X. Stargis
-----------------------------------
Title: Vice President
----------------------------------
12
EXHIBIT A
DOCUMENTS AND REQUIREMENTS
--------------------------
1. Second Amendment to Loan Agreement.
2. $43,000,000.00 Amended and Restated Revolving Note payable to LaSalle
Bank National Association.
3. $28,500,000.00 Amended and Restated Revolving Note payable to UMB Bank,
National Association.
4. $28,500,000.00 Amended and Restated Revolving Note payable to Xxxxx
Fargo Bank, N.A.
5. Reaffirmation of Guaranty executed by Angelica Textile Services, Inc.,
a New York corporation, Angelica Textile Services, Inc., a California
corporation, Southern Service Company, a California corporation, and
Angelica Realty Co., a California corporation.
6. Solvency Certificate of Borrower.
7. Legal Opinion of Borrower's and each Guarantors' counsel.
8. Current Insurance Certificates for Borrower and each Covered Person
evidencing that Borrower and each Covered Person has in force insurance
meeting the applicable requirements of the Loan Agreement, showing
LaSalle Bank National Association, as administrative agent for itself
and the other lenders, as additional insured on all liability policies.
9. Compliance Certificate showing proforma as of January 31, 2004 and
showing proforma after giving effect to the Duke Acquisition.
10. Borrower's Projections for 2005, 2006 and 2007.
11. Secretary's Certificate (certifying resolutions, Articles or
Certificate of Incorporation, Bylaws and Incumbency) for Borrower; such
certification to include the identity of all Borrowing Officers in both
the resolutions and incumbency certificate.
12. Good Standing Certificates for Borrower from the Secretary of State of
Missouri.
13. UCC searches for the following:
a) Xxxxxxxx Corporation: Secretary of State of Missouri
b) Xxxxxxxx Textile Services, Inc.: Secretary of State of New York
c) Xxxxxxxx Textile Services, Inc.: Secretary of State of California
d) Southern Service Company: Secretary of State of California
e) Angelica Realty Co.: Secretary of State of California
13
EXHIBIT B
---------
DISCLOSURE SCHEDULE
-------------------
None, if nothing listed.
14
EXHIBIT C
---------
LIFE UNIFORM SALE MATTERS
-------------------------
Life Uniform Sale Requirements:
(i) the Life Uniform Sale does not result in a Book Loss greater than the
Permitted Book Loss, (ii) after giving effect to the Life Uniform Sale,
Borrower and the other Covered Persons are no longer conducting a retail
uniform business except incidental to its laundry business and except for up
to 18 months following the closing of the Life Uniform Sale as is necessary
to complete the winding down and liquidation of its Life Uniform business so
long as by the end of such 18 month period Borrower is no longer operating
any retail stores related to its Life Uniform business (although Borrower
may take actions beyond such 18 month period to accomplish any related
ministerial tasks related to winding down its Life Uniform business) or as
may be incidental to its laundry business, (iii) there is, at the time of
the Life Uniform Sale, no existing Default or Event of Default and the
consummation of the Life Uniform Sale would not reasonably give rise to a
Default or Event of Default, (iv) the Life Uniform Sale closes on or before
the fiscal year ending January 29, 2005, and (v) at the closing of the Life
Uniform Sale, Borrower delivers to Administrative Agent a certificate
certifying that the items in clauses (i), (ii) and (iii) of this paragraph
have been met and, after all post-closing adjustments are made with respect
to the Life Uniform Sale, Borrower shall promptly thereafter deliver to
Administrative Agent a new certificate certifying that the item in clauses
(i) and (iii) of this paragraph remain fully complied with.
"Book Loss" means -- the accounting loss, if any, incurred by
Borrower and its Subsidiaries in connection with the Life Uniform
Sale as calculated in accordance with GAAP.
"Permitted Book Loss" -- means, after giving effect to the Life
Uniform Sale (as defined in the Second Amendment) and the
transaction costs incurred in connection therewith, the amount of
Book Loss arising from the Life Uniform Sale up to but no greater
than eighty percent (80%) of the Dollar amount of the average daily
outstanding Aggregate Revolving Loan for the 2003 calendar year, as
the Dollar amount of the average daily outstanding Aggregate
Revolving Loan for the 2003 calendar year is reasonably determined
by Administrative Agent.
15
EXHIBIT 3
---------
LENDERS' COMMITMENTS AND PRO-RATA SHARES
---------------------------------------------------------------------------------------------
TOTALS REVOLVING LOAN PRO-RATA
LENDER COMMITMENT SHARES
---------------------------------------------------------------------------------------------
LaSalle Bank National $43,000,000.00 $43,000,000.00 43.000000000%
Association
---------------------------------------------------------------------------------------------
UMB Bank, National
Association $28,500,000.00 $28,500,000.00 28.500000000%
---------------------------------------------------------------------------------------------
Xxxxx Fargo Bank, N.A. $28,500,000.00 $28,500,000.00 28.500000000%
---------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------
AGGREGATES $100,000,000.00 $100,000,000.00 100.000000000%
---------------------------------------------------------------------------------------------
16
SCHEDULE II TO COMPLIANCE CERTIFICATE
-------------------------------------
All calculations done in accordance with GAAP on a
consolidated basis, in accordance with the provisions of the Loan Agreement
and based on the period ended . Any inconsistencies
------------------
between the descriptions of the items set forth in this Schedule II and the
terms of any of Sections 14.1 through 14.4 shall be resolved in favor of the
terms set forth in Sections 14.1 through 14.4. Reference should be made to
Sections 14.1 through 14.4 of the Loan Agreement for more specific
instructions regarding the calculation periods and how the components of the
financial covenants should be calculated.
NOTE: BORROWER SHALL ALSO INCLUDE THE CALCULATION NECESSARY FOR THE
CALCULATIONS IN SECTION 4.6 AND SECTION 5.2.
I. EBITDA AND EBITDAR (for preceding four fiscal quarters):
(i) Net Income $_________
(ii) Federal, State and Local Income
Tax expense accrued for as a liability $_________
(iii) Interest Expense $_________
(iv) Amortization of goodwill and
other intangible assets and depreciation
expense taken or accrued for in such period,
without duplication $_________
(v) Extraordinary non-cash losses in such period
incurred or accrued for in such period, without
duplication $_________
(vi) Prepayment Penalty on Existing Indebtedness $_________
(vii) Losses from Discontinued Operations $_________
(viii) Sum of Items (i), (ii), (iii), (iv), (v), (vi)
and (vii) $_________
(ix) Extraordinary income/gain in such period incurred
or accrued for in such period, without duplication $_________
(x) Income from Discontinued Operations $_________
(xi) Item (viii) minus Items (ix) and (x)
EBITDA $_________
(xii) EBITDAR: sum of Item (viii) plus rental expense
minus the sum of Items (ix) and (x) $_________
II. MINIMUM FIXED CHARGES COVERAGE (SECTION 14.2)
A. EBITDAR for preceding four fiscal quarters per Item I $_________
B. Fixed Charges for preceding four fiscal quarters:
1. Interest Expense $_________
2. Sum of all scheduled principal payments
on long term Indebtedness of Borrower $_________
17
3. Federal, State and Local Income Taxes expense paid $_________
4. Stock Dividends and Redemptions/Distributions
paid or accrued for, without duplication $_________
5. For each fiscal quarter (which represents a
pre-agreed to amount of maintenance capital
expenditures) $2,000,000 per quarter
(or $8,00,000 for four quarters)
6. Rental expense $_________
7. FIXED CHARGES (Sum of items 1 through 6) $_________
C. Ratio of Item A to Item B.7. ___:1.0
D. Minimum Ratio required by Section 14.2 for such period ___:1.0
III. FUNDED INDEBTEDNESS TO EBITDA (SECTION 14.3)
A. Funded Indebtedness as of the calculation date $_________
B. EBITDA for preceding four fiscal quarters
per Item I $_________
C. Ratio of Item A to Item B $_________
D. Maximum Ratio of Funded Indebtedness
to EBITDA permitted by Section 14.3 ___:1.0
IV. MINIMUM NET WORTH (SECTION 14.4)
A. Actual Net Worth $_________
B. Minimum Net Worth Required by Section 14.4:
(i) for the fiscal quarter ending on or
most recently before April 30, 2004, the
sum of (A) the greater of (x) the Dollar
amount of Net Worth that was required
under this Agreement as of October 31,
2003, or (y) 85% of Borrower's Net Worth
as of fiscal year ending January 31,
2004 (B) 50% of quarterly Net Income for
such fiscal quarter, and (ii) as of any
other fiscal quarter end after April 30,
2004, an amount of not less than the sum
of (x) Fifty Percent (50%) of Net Income
during the fiscal quarter then-ended
plus (y) the minimum Net Worth required
as of the prior fiscal quarter after
taking into account clause (x) above for
such prior fiscal quarter, which is
cumulative from and including the fiscal
quarter ending on or on or most
18
recently before April 30, 2004. If Net
Income is a negative number for any fiscal
quarter (e.g. a loss), such amount shall
not reduce Borrower's Net Worth for that
fiscal quarter, and shall be disregarded
for all future Net Worth calculations so
that any such negative number shall not
reduce the minimum Net Worth required
hereunder for any subsequent fiscal
quarter.
$_________
If the Life Uniform Sale is consummated in accordance with
the terms of the Second Amendment, then the Dollar amount
listed in clause (A) of this Section 14.4 shall be reduced by
the actual Dollar amount of the Book Loss up to the Dollar
amount of the Permitted Book Loss
19
V. PERMITTED ACQUISITIONS (SECTION 13.5).
A. Excluding the Duke Acquisition Aggregate Purchase
Price of all Acquisitions since Second Amendment
Effective Date $_________
B. Aggregate Purchase Price of Permitted Acquisitions in
current Loan Year with negative EBITDA $_________
"purchase price" includes, without limitation, any deferred purchase price,
seller notes, assumed Indebtedness, or similar items.
20
