UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) September 28, 2011
G&K Services, Inc.
(Exact Name of Registrant as Specified in Charter)
Minnesota | 0-4063 | 41-0449530 | ||
(State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
5995 Opus Parkway, Minnetonka, MN | 55343 | |||
(Address of Principal Executive Offices) | (Zip Code) |
Registrants telephone number, including area code (952) 912-5500
n/a
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
¨ | Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 1.01. | Entry into a Material Definitive Agreement. |
On September 28, 2011, G&K Services, Inc. (the Company), as initial servicer, and G&K Receivables Corp., a subsidiary of the Company, as borrower (the Borrower), entered into Amendment No. 1 (Amendment No. 1), to the Second Amended and Restated Loan Agreement, including the Seventh Amended and Restated Fee Letter executed in connection therewith (the Loan Agreement) with Three Pillars Funding LLC, as lender (the Lender), SunTrust Robinson Humphrey, Inc., as administrator (Administrator), and SunTrust Bank, as LC Issuer. Capitalized terms used but not defined herein have the meanings set forth in the Loan Agreement.
The primary purpose of entering into Amendment No. 1 was to (i) increase the Facility Limit to $50,000,000; (ii) adjust the LC sublimit to $30,000,000; and (iii) adjust the Liquidity Termination Date and Scheduled Commitment Termination Date to September 27, 2013. Certain adjustments were also made to events which constitute Amortization Events.
During that period of time when the Lender is funding the loan through the issuance of commercial paper to third parties, the Borrower will be required to pay interest at a rate per annum equal to a margin of 0.76%, plus the average annual interest rate for such commercial paper.
The following fees were adjusted in accordance with Amendment No. 1:
| The Borrower is required to pay to Administrator, for the account of the Lender and its Liquidity Banks (in such proportions as they may from time to time agree upon), a fully-earned and non-refundable fee equal to (i) (A) (x) the product of 102% and the Facility Limit less (y) the Credit Exposure on such day (such portion, the Utilized Amount) divided by (B) 360, times, (ii) (A) if the Utilized Amount is greater than or equal to 50% of the Facility Limit, 0.26% and (B) if the Utilized Amount is less than 50% of the Facility Limit, 0.375% (such fee, the Unused Fee). The Unused Fee accrues daily and is payable monthly in arrears on each Distribution Date. |
| Monthly in arrears, on each Distribution Date, the Borrower is required to pay to the Administrator, for the benefit of the LC Issuer, a letter of credit fee at a rate per annum equal to 0.81% (computed on the basis of a year of 360 days and the actual number of days elapsed) applied to the daily average face amount of Letters of Credit outstanding during such calendar month. In addition, the Borrower is required to pay to the LC Issuer for its own account the LC Issuers standard issuance, drawing, negotiation, amendment, assignment, and other administrative fees for each Letter of Credit as established by the LC Issuer from time to time. |
This summary is qualified in its entirety by references to the terms of the Amendment No. 1 attached hereto as Exhibit 10.1 which is incorporated herein by reference.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
See Item 1.01 above, the provisions of which are incorporated herein by reference.
Item 9.01. | Financial Statements and Exhibits. |
(d) Exhibits
10.1 Amendment No. 1, to the Second Amended and Restated Loan Agreement dated September 28, 2011 among G&K Services, Inc., as initial servicer, G&K Receivables Corp., as borrower, Three Pillars Funding LLC, as lender, SunTrust Robinson Humphrey, Inc., as administrator, and SunTrust Bank, as LC Issuer
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
G&K SERVICES, INC. | ||||
Date: September 29, 2011 | By: | /s/ Jeffrey L. Cotter | ||
Name: Jeffrey L. Cotter | ||||
Its: Vice President, General Counsel and Corporate Secretary |
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Exhibit 10.1
AMENDMENT NO. 1
DATED AS OF SEPTEMBER 28, 2011
TO
SECOND AMENDED AND RESTATED LOAN AGREEMENT
DATED AS OF SEPTEMBER 29, 2010
This AMENDMENT NO. 1 (this Amendment), dated as of September 28, 2011, to the Second Amended and Restated Loan Agreement, dated as of September 29, 2010 (as amended, supplemented, restated or otherwise modified from time to time, the Loan Agreement), is made by and 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, Servicer), Three Pillars Funding LLC, a Delaware limited liability company (together with its successors and permitted assigns, Lender), SunTrust Bank, a Georgia banking corporation, as letter of credit issuer (in such capacity, the LC Issuer) and SunTrust Robinson Humphrey, Inc., a Tennessee corporation, as agent and administrator for Lender (in such capacity, together with its successor and assigns in such capacity, Administrator). Capitalized terms used but not defined herein shall have the meanings assigned to them in the Loan Agreement.
BACKGROUND
A. The parties hereto have previously entered into and are currently parties to the Loan Agreement.
B. The parties hereto desire to amend the Loan Agreement on the terms and subject to the conditions set forth herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, agree as follows:
Section 1. Amendments to the Loan Agreement. Subject to the satisfaction of the conditions precedent set forth in Section 2 below, the Loan Agreement is hereby amended as follows:
(a) The defined term Facility Limit set forth in Section 1.1 of the Loan Agreement is hereby deleted in its entirety and replaced with the following:
Facility Limit means $50,000,000.
(b) The defined term LC Sublimit set forth in Section 1.1 of the Loan Agreement is hereby deleted in its entirety and replaced with the following:
LC Sublimit means, at any time, the lesser of (a) $30,000,000 and (b) the Facility Limit.
(c) The defined term Liquidity Termination Date set forth in Section 1.1 of the Loan Agreement is hereby deleted in its entirety and replaced with the following:
Liquidity Termination Date means September 27, 2013, as such date may be extended from time to time by the Liquidity Banks in accordance with the Liquidity Agreement.
(d) The defined term Scheduled Commitment Termination Date set forth in Section 1.1 of the Loan Agreement is hereby deleted in its entirety and replaced with the following:
Scheduled Commitment Termination Date means September 27, 2013, as extended from time to time by mutual agreement of the parties hereto.
(e) Section 10.2.3 (Default Ratio) of the Loan Agreement is hereby amended by deleting the percentage 2.00% appearing therein and inserting the percentage 1.75% in lieu thereof.
(f) Section 10.2.4. (Dilution Ratio) of the Loan Agreement is hereby amended and restated in its entirety to read as follows:
Section 10.2.4. Dilution Ratio. The Short Dilution Ratio shall equal or exceed 4.00% on a rolling three-fiscal-month average basis at any time on or after the date hereof or the Long Dilution Ratio shall equal or exceed 4.00% on a rolling three-fiscal-month average basis at any time on or after the date hereof.
(g) Section 10.2.5. (Delinquency Ratio) of the Loan Agreement is hereby amended by deleting the percentage 2.75% appearing therein and inserting the percentage 2.50% in lieu thereof.
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(h) Exhibit A to the Loan Agreement is hereby deleted in its entirety and replaced with Exhibit A set forth in Annex 1 hereto.
(i) Exhibit B to the Loan Agreement is hereby deleted in its entirety and replaced with Exhibit B set forth in Annex 2 hereto.
Section 2. Conditions Precedent. This Amendment shall become effective and be deemed effective as of the date first written above (the Amendment Effective Date) upon the satisfaction of the following conditions precedent:
(a) Administrator shall have received counterparts of this Amendment duly executed by each party hereto;
(b) Administrator shall have received counterparts of the Seventh Amended and Restated Fee Letter duly executed by the Borrower;
(c) Administrator shall have received, in immediately available funds, the Extension Fee equal to the product of (i) 0.11% and (ii) the Facility Limit pursuant to the Seventh Amended and Restated Fee Letter; and
(d) Administrator shall have received a properly completed and executed Third Amended and Restated Lender Note (such Lender Note to be in the form attached to this Amendment as Annex 2).
Section 3. Reference to and Effect on the Loan Agreement. Upon the effectiveness of this Amendment, (i) Borrower and Servicer each hereby reaffirms all covenants, representations and warranties made by it in Loan Agreement to the extent the same are not amended hereby and agrees that all such covenants, representations and warranties shall be deemed to have been remade as of the Amendment Effective Date (except for those representations and warranties that are expressly made only as of a different date, which representations and warranties shall be correct as of the date made) and (ii) each reference in the Loan Agreement to this Agreement, hereunder, hereof, herein or words of like import shall mean and be, and any references to the Loan Agreement in any other document, instrument or agreement executed and/or delivered in connection therewith shall mean and be, a reference to the Loan Agreement as amended hereby.
Section 4. Scheduled Commitment Termination Date. Each of the parties hereto hereby agrees that the Scheduled Commitment Termination Date shall be as provided herein notwithstanding any prior noncompliance with the timing provisions with respect to extensions set forth in Section 2.6 of the Loan Agreement.
Section 5. Expenses. Borrower hereby reaffirms its obligations under Section 15.4 of the Loan Agreement to pay all costs and expenses (including, without limitation, the reasonable fees and expenses of counsel) incurred by the LC Issuer, the Administrator, the Lender, each Liquidity Bank, each Credit Bank and Servicer in connection with the preparation, execution and delivery of this Amendment and the agreements and instruments related hereto.
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Section 6. Effect. Except as otherwise amended by this Amendment, the Loan Agreement shall continue in full force and effect and is hereby ratified and confirmed.
Section 7. Severability. Any provision of this Amendment 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 Amendment or affecting the validity or enforceability of such provision in any other jurisdiction.
Section 8. Governing Law. THIS AMENDMENT 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 ADMINISTRATOR, FOR THE BENEFIT OF THE SECURED PARTIES.
Section 9. Counterparts. This Amendment 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.
[SIGNATURES FOLLOW]
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IN WITNESS WHEREOF, the parties have caused this Amendment 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/ Jeffrey L. Wright | |||
Name: | Jeffrey L. Wright | |||
Title: | Chief Financial Officer | |||
G&K SERVICES, INC., as Initial Servicer | ||||
By: | /s/ Jeffrey L. Wright | |||
Name: | Jeffrey L. Wright | |||
Title: | Chief Financial Officer |
Signature Page
to
Amendment No. 1 to Second Amended and Restated Loan Agreement
THREE PILLARS FUNDING LLC, as Lender | ||||
By: | /s/ Doris J. Hearn | |||
Name: | Doris J Hearn | |||
Title: | Vice President |
Signature Page
to
Amendment No. 1 to Second Amended and Restated Loan Agreement
SUNTRUST ROBINSON HUMPHREY, INC., as Administrator | ||||
By: | /s/ Jason Meyer | |||
Name: | Jason Meyer | |||
Title: | Director |
Signature Page
to
Amendment No. 1 to Second Amended and Restated Loan Agreement
SUNTRUST BANK, as LC Issuer | ||||
By: | /s/ Joe Franke | |||
Name: | Joe Franke | |||
Title: | Senior Vice President |
Signature Page
to
Amendment No. 1 to Second Amended and Restated Loan Agreement
ANNEX 1
EXHIBIT A
BORROWING REQUEST
[Date]
To: | Three Pillars Funding LLC (Lender) | |
From: | G&K Receivables Corp. (Borrower) | |
Re: | Second Amended and Restated Loan Agreement dated as of September 29, 2010, among Borrower, Lender, SunTrust Bank, as LC Issuer and SunTrust Robinson Humphrey, Inc., as Administrator (the Agreement) |
A | (i) | Pursuant to Section 2.2 of the Agreement, the undersigned hereby requests a Loan from Lender in an amount equal to the following (at least $1,000,000 or a larger integral multiple of $500,000): | $ |
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(ii) | The date such Loan is requested is: | / /201 | ||||||
(iii) | The requested maturity date of the Loan is: | / /201 | ||||||
(iv) | The aggregate Credit Exposure outstanding under the Agreement, after giving effect to the requested Loan under (i) above, will equal: | $ |
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(v) | The amount in (iv) above does not exceed the Facility Limit which equals: | $ |
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(vi) | The amount in (iv) above does not exceed the Borrowing Base which equals: | $ |
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(vii) | The wiring instructions for such Loan are as follows: |
Bank Name: |
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Location: |
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ABA Routing No.: |
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For credit to: |
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Reference: |
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Attention: |
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B. As of the date hereof and the date of making of such Loan, each of the representations and warranties contained in Article VIII of the Agreement shall be true and correct on and as of the date hereof and, if applicable, the date of such Loan, and no Significant Event or Unmatured Significant Event has occurred and is continuing or shall exist after giving effect to the Loan requested hereby.
Capitalized terms used but not defined herein shall have the meanings given to them in the Agreement.
The undersigned certifies to the accuracy of the foregoing.
G&K RECEIVABLES CORP. | ||||||||
Date: |
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By: |
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Name: |
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Title: |
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ANNEX 2
THIRD AMENDED AND RESTATED LENDER NOTE
$50,000,000.00 | September 28, 2011 |
FOR VALUE RECEIVED, G&K RECEIVABLES CORP., a Minnesota corporation (the Borrower), promises to pay to the order of THREE PILLARS FUNDING LLC, a Delaware limited liability company (the Lender) on or before the Scheduled Commitment Termination Date, the principal sum of Fifty Million and no/100 Dollars ($50,000,000.00) or, if less, the aggregate unpaid principal amount of all Loans shown on the schedule attached hereto (and/or any continuation thereof and/or in the records of the Lender) made by the Lender pursuant to that certain Second Amended and Restated Loan Agreement, dated as of September 29, 2010 (together with all amendments and other modifications, if any, from time to time thereafter made thereto, the Loan Agreement), among Borrower, G&K Services, Inc., as servicer, the Lender, SunTrust Bank, as LC Issuer and SunTrust Capital Markets, Inc., as Administrator (the Administrator). This note amends and restates in its entirety that certain Second Amended and Restated Lender Note dated September 29, 2010.
Borrower also promises to pay interest on the unpaid principal amount hereof from time to time outstanding from the date hereof until maturity (whether by acceleration or otherwise) and, after maturity, until paid, at the rates per annum and on the dates specified in the Loan Agreement.
Payments of both principal and interest are to be made in lawful money of the United States of America in immediately available funds to the account designated by Administrator pursuant to the Loan Agreement.
This promissory note is the Lender Note referred to in, and evidences indebtedness incurred under, the Loan Agreement, and the holder hereof is entitled to the benefits of the Loan Agreement, to which reference is made for a description of the security for this Lender Note and for a statement of the terms and conditions on which Borrower is permitted and required to make prepayments and repayments of principal of the indebtedness evidenced hereby and on which such indebtedness may be declared to be immediately due and payable. Unless otherwise defined, capitalized terms used herein have the meanings provided in the Loan Agreement.
All parties hereto, whether as makers, endorsers, or otherwise, severally waive presentment for payment, demand, protest and notice of dishonor.
THIS LENDER NOTE SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO ANY OTHERWISE APPLICABLE PRINCIPLES OF CONFLICTS OF LAWS (OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW).
G&K RECEIVABLES CORP. | ||
By |
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Name: | ||
Title: |
SCHEDULE ATTACHED TO
THIRD AMENDED AND RESTATED LENDER NOTE DATED SEPTEMBER 28, 2011 OF
G&K RECEIVABLES CORP.
PAYABLE TO THE ORDER OF THREE PILLARS FUNDING LLC
DATE OF LOAN |
AMOUNT OF LOAN |
AMOUNT OF REPAYMENT | ||