EXHIBIT 3.2
SECOND AMENDMENT
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TO
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AMENDED AND RESTATED FINANCING AND SECURITY AGREEMENT
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THIS SECOND AMENDMENT TO AMENDED AND RESTATED FINANCING AND SECURITY
AGREEMENT (this "Agreement") is made as of the 27/th/ day of January, 2000 by
and among Coyne International Enterprises Corp., a corporation organized and
existing under the laws of the State of New York, Blue Ridge Textile
Manufacturing, Inc., a corporation organized under the laws of the State of
Georgia, and Ohio Garment Rental, Inc., a corporation organized under the laws
of the State of Ohio (each is referred to individually as a "Borrower and
collectively, the "Borrowers"), and Bank of America, National Association, a
national banking association, successor by merger to NationsBank, N.A. ("Bank of
America"), LASALLE BUSINESS CREDIT, INC., a corporation organized under the laws
of the State of Delaware ("LaSalle"), and PNC BANK, NATIONAL ASSOCIATION, a
national banking association ("PNC") (Bank of America, LaSalle and PNC are
referred to individually as a "Lender" and collectively as the "Lenders"), and
BANK OF AMERICA, NATIONAL ASSOCIATION, a national banking association, successor
by merger to NationsBank, N.A, as collateral and administrative agent for the
Lenders (the "Agent").
RECITALS
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A. The Borrowers, the Lenders and the Agent entered into that certain
Amended and Restated Financing and Security Agreement dated as of June 26, 1998,
as amended by that certain First Amendment to Amended and Restated Financing and
Security Agreement dated June 9, 1999 (as amended, restated, modified,
substituted, extended, and renewed from time to time, the "Financing
Agreement"). The Financing Agreement provides for some of the agreements between
the Borrowers, the Lenders and the Agent with respect to the "Loans" (as defined
in the Financing Agreement), including a revolving credit facility in an amount
not to exceed $25,000,000, a letter of credit facility in the amount of
$3,000,000, an acquisition facility in an amount not to exceed $10,000,000 and a
capital expenditure facility in an amount not to exceed $20,000,000.
B. Section 2.3 of the Financing Agreement provides for an Acquisition
Loan Facility, under which the Borrowers may receive advances in the maximum
principal amount of $10,000,000 based on "Permitted Acquisitions" (as defined in
the Financing Agreement). The Borrowers acquired certain assets of Unifirst
Corp. (the "Unifirst Acquisition") and two parcels of real estate in Lakeland,
Florida (the "Lakeland Acquisition"). Shortly thereafter, the Borrowers
requested that both the Unifirst Acquisition and the Lakeland Acquisition be
deemed Permitted Acquisitions and, thus, eligible for advances under the
Acquisition Loan Facility in the total amount of $1,801,670.00 ("Requested
Advance"). Subject to the explicit conditions contained in a letter agreement
dated October 28, 1999, the Lenders and Agent made the Requested Advance. The
proceeds of the Requested Advance were applied directly to the Revolving Loan.
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C. The Unifirst Acquisition failed to meet certain cash flow coverage
conditions required of Permitted Acquisitions. The Lakeland Acquisition involved
the purchase of improved real estate for purposes of establishing a new plant
location. Therefore, it fell outside of Permitted Acquisitions. As such, the
Unifirst Acquisition and the Lakeland Acquisition resulted in defaults under the
Financing Agreement (collectively, the "Acquisition Defaults").
D. During fiscal year 1999, Thomas M. Coyne purchased three (3) life
insurance policies for estate planning purposes in the cumulative amount of
$9,500,000 (the "Life Insurance"). The premium on the Life Insurance for the
fiscal year 1999 was $325,000 (the "Life Insurance Premium"). The Borrowers paid
the Life Insurance Premium and took a note receivable owed by Thomas M. Coyne
for the Life Insurance Premium ("Life Insurance Note Receivable"). The
Borrowers' payment of the Life Insurance Premium resulted in a default under
Section 6.2.7 of the Financing Agreement (the "Life Insurance Default").
E. The Borrowers have requested that the Lenders and Agent amend certain
provisions of the Financing Agreement and waive certain violations, including
the Acquisition Defaults and the Life Insurance Default.
F. The Agent and Lenders are willing to agree to the Borrowers' request on
the condition, among others, that this Agreement be executed.
AGREEMENTS
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NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, receipt of which is hereby acknowledged, the Borrowers,
the Lenders and the Agent agree as follows:
1. The Borrowers, the Lenders and the Agent agree that the Recitals above
are a part of this Agreement. Unless otherwise expressly defined in this
Agreement, terms defined in the Financing Agreement shall have the same meaning
under this Agreement.
2. The Borrowers represent and warrant to the Agent and Lenders as
follows:
(a) Each Borrower is a corporation duly organized, and validly
existing and in good standing under the laws of the state in which it was
organized and is duly qualified to do business as a foreign corporation in good
standing in every other state wherein the conduct of its business or the
ownership of its property requires such qualification.
(b) Each Borrower has the power and authority to execute and deliver
this Agreement and perform its obligations hereunder and has taken all necessary
and appropriate corporate action to authorize the execution, delivery and
performance of this Agreement.
(c) The Financing Agreement, as amended by this Agreement, and each
of the other Financing Documents remains in full force and effect, and each
constitutes the valid and legally binding obligation of each Borrower,
enforceable in accordance with its terms.
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(d) All of the Borrowers' representations and warranties contained in
the Financing Agreement and the other Financing Documents are true and correct
on and as of the date of the Borrowers' execution of this Agreement.
(e) No Event of Default and no event which, with notice, lapse of
time or both would constitute an Event of Default, has occurred and is
continuing under the Financing Agreement or the other Financing Documents which
has not been waived in writing by the Agent and the Lenders under this
Agreement.
3. Section 6.1.16 is hereby deleted and the following is substituted in
its place:
6.1.16 Fixed Charge Coverage Ratio.
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The Borrowers will maintain, tested commencing October 31, 1998
as of the last day of each of the Borrowers' fiscal quarters for the four (4)
quarter period ending on such date, a Fixed Charge Coverage Ratio of not less
than the following:
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Quarters: Ratio
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October 31, 1998 through and including
January 31, 2000 1.00 to 1.00
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April 30, 2000 through and including
July 31, 2000 1.15 to 1.00
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October 31, 2000 through and including
July 31, 2001 1.20 to 1.00
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October 31, 2001 through and thereafter 1.25 to 1.00
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4. Section 6.2.7(v) of the Financing Agreement is hereby deleted in its
entirety and the following is substituted in its place:
(v) as set forth in Schedule 6.2.7 of this Agreement; and
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5. Section 6.2.7 (Investments, Loans and Other Transactions) of the
Financing Agreement is hereby amended by adding subsection (vi), which shall be
the following:
(vi) a one-time only $325,000 insurance premium payment for three
insurance policies on the life of Thomas M. Coyne, purchased during
the fiscal year 1999 for estate planning purposes.
6. The Lenders and the Agent hereby waive (i) the Acquisition Defaults
described in Recitals B and C above, (ii) the Life Insurance Default described
in Recital D above and (iii) defaults under Section 6.1.16 (Fixed Charge
Coverage Ratio) of the Financing Agreement (prior to the amendment in this
Agreement) for the fiscal year ending October 31, 1999. This waiver is not
intended to, and shall not, waive any defaults under Section 2.3 (The
Acquisition Loan
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Facility) or 6.1.16 (Fixed Charge Coverage Ratio) other than for instances and
dates specified, and shall not waive any other defaults arising out of non-
compliance by the Borrowers with the Financing Agreement, whether or not the
events, facts or circumstances giving rise to such non-compliance existed on or
prior to the date hereof.
7. Each Borrower hereby issues, ratifies and confirms the
representations, warranties and covenants contained in the Financing Agreement,
as amended hereby. Each Borrower agrees that this Agreement is not intended to
and shall not cause a novation with respect to any or all of the Obligations.
8. Each Borrower acknowledges and warrants that the Lenders and Agent
have acted in good faith and have conducted in a commercially reasonable manner
their relationships with the Borrowers in connection with this Agreement and
generally in connection with the Financing Agreement and the Obligations, each
Borrower hereby waiving and releasing any claims to the contrary.
9. If applicable, the Borrowers shall pay at the time this Agreement is
executed and delivered, all fees, commissions, costs, charges, taxes and other
expenses incurred by the Agent and its counsel in connection with this
Agreement, including, but not limited to, reasonable fees and expenses of the
Agent's counsel and all recording fees, taxes and charges.
10. This Agreement may be executed in any number of duplicate originals or
counterparts, each of such duplicate originals or counterparts shall be deemed
to be an original and taken together shall constitute but one and the same
instrument. The parties agree that their respective signatures may be delivered
by facsimile. Any party which chooses to deliver its signature by facsimile
agrees to provide a counterpart of this Agreement with its inked signature
promptly to each other party.
IN WITNESS WHEREOF, the Borrowers, the Lenders and the Agent have executed
this Agreement under seal as of the date and year first written above.
ATTEST: COYNE INTERNATIONAL ENTERPRISES CORP.
BLUE RIDGE TEXTILE MANUFACTURING, INC.
OHIO GARMENT RENTAL, INC.
_____________________________ By:__________________________(SEAL)
Name:
Title:
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WITNESS: BANK OF AMERICA, NATIONAL
ASSOCIATION, in its capacity as a Lender
_____________________________ By:__________________________(SEAL)
Gary W. Bartlett
Vice President
WITNESS: PNC BANK, NATIONAL ASSOCIATION
_____________________________ By:__________________________(SEAL)
Name:
Title:
WITNESS: LASALLE BUSINESS CREDIT, INC.
_____________________________ By:__________________________(SEAL)
Name:
Title:
WITNESS: BANK OF AMERICA, NATIONAL
ASSOCIATION, in its capacity as Agent
_____________________________ By:__________________________(SEAL)
Gary W. Bartlett
Vice President
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