Exhibit 10.1
SIXTH AMENDMENT TO
FINANCING AGREEMENT
THIS SIXTH AMENDMENT TO FINANCING AGREEMENT
(this “
Amendment
”), dated this
5
th
day of March, 2010, and becoming effective as described in Section 3.2 hereof, is
made by and among:
CROWN CRAFTS, INC.
, a Delaware corporation (“
CCI
”);
CHURCHILL WEAVERS, INC.
, a Kentucky corporation (“
Weavers
”);
HAMCO, INC.
, a Louisiana corporation (“
Hamco
”);
CROWN CRAFTS INFANT PRODUCTS, INC.
, a Delaware corporation (“
CCIP
”; together with CCI,
Weavers and Hamco, the “
Companies
” and each a “
Company
”); and
THE CIT GROUP/COMMERCIAL SERVICES, INC.
, a New York corporation (“
CIT
”),
to the Financing Agreement, dated July 11, 2006 (as amended, modified, restated or
supplemented from time to time, the “
Financing Agreement
”), among CIT and the Companies.
All capitalized terms used herein without definition shall have the meanings ascribed to such terms
in the Financing Agreement.
RECITALS
A. Pursuant to the Financing Agreement, CIT has agreed to make loans and extend credit to the
Companies in the amounts, upon the terms and subject to the conditions contained therein.
B. CCI, Hamco, CCIP and CIT are parties to a Commitment Letter, dated February 8, 2010 (the
“
Commitment Letter
”), pursuant to which, and upon the terms and conditions contained
therein, CCI, Hamco, CCIP and CIT have agreed to extend the Termination Date and make certain other
modifications to the Financing Agreement, all as more fully described therein.
C. The Commitment Letter terminates if definitive documentation with respect to the extended
credit facility described therein has not been executed, and such extended credit facility closed,
on or before July 11, 2010.
D. The Companies desire to enter into this Amendment on the date hereof to provide for the
modifications to the Financing Agreement described in the Commitment Letter to become effective on
July 11, 2010.
E. The Companies also desire that the modifications to the Financing Agreement described in
the Commitment Letter become effective as against all of the Companies and that Weavers remain a
Company under the Financing Agreement on and after July 11, 2010, notwithstanding anything that may
appear to the contrary in the Commitment Letter.
F. CIT has agreed to such request, subject to the terms and conditions contained herein, and
to accomplish the foregoing, the Companies and CIT desire to enter into this Amendment.
STATEMENT OF AGREEMENT
NOW, THEREFORE, in consideration of the premises and for other good and valuable
consideration, the receipt and sufficiency of which are hereby expressly acknowledged, the
Companies and CIT hereby agree as follows:
ARTICLE I
AMENDMENTS TO FINANCING AGREEMENT
Subject to Section 3.2 hereof, the Financing Agreement is hereby amended as follows:
1.1
Definitions
. Section 1.1 of the Financing Agreement is amended as follows:
(a) The defined term “
Applicable Margin
” is amended in its entirety to read as
follows:
“
Applicable Margin
shall mean 1.0% for Chase Bank Rate Loans and 3%
for LIBOR Loans.”
(b) The defined term “
Early Termination Fee
” is amended in its entirety to read as
follows:
“
Early Termination Fee
shall mean an amount equal to the product
obtained by multiplying (a) the maximum amount of the Revolving Line of Credit
times
(b) (i) two percent (2.0%) if the Early Termination Date occurs on or
before July 11, 2011, (ii) one percent (1.0%) if the Early Termination Date occurs
after July 11, 2011 but on or before July 11, 2012 and (iii) one-half percent (0.5%)
if the Early Termination Date occurs after July 11, 2012 but before the Termination
Date.”
(c) The defined term “
Financial Covenant Applicability Date
” is amended in its
entirety to read as follows:
“
Financial Covenant Applicability Date
shall mean any date on which Net
Availability is less than $6,000,000.”
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(d) The defined term “
Financial Covenant Inapplicability Date
” is amended in its
entirety to read as follows:
“
Financial Covenant Inapplicability Date
shall mean any date after the
occurrence of any Financial Covenant Applicability Date on which Net Availability is
equal to or greater than $6,000,000.”
(e) The defined term “
Permitted Distributions
” is amended in its entirety to read as
follows:
“
Permitted Distributions
shall mean:
(a) dividends from a wholly-owned subsidiary of a Company to such Company;
(b) dividends payable solely in stock or other equity interests of the
Companies; and
(c) provided no Default or Event of Default exists at the time of the proposed
payment thereof, cash dividends on CCI’s common stock not to exceed the sum of
$500,000 in any calendar quarter.”
(f) The defined term “
Revolving Line of Credit Fee
” is amended by deleting therefrom
the words and figure “fifteen hundredths percent (0.15%)” and by substituting in lieu thereof the
words and figure “one quarter percent (0.25%).”
(g) The defined term “
Termination Date
” is amended in its entirety to read as follows:
“
Termination Date
shall mean July 11, 2013.”
1.2
Exhibits
. Exhibit B attached to this Amendment is made Exhibit B to the Financing
Agreement.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
The Companies hereby represent and warrant to CIT that:
2.1
Compliance With the Financing Agreement
. As of the execution of this Amendment,
each Company is in compliance with all of the terms and provisions set forth in the Financing
Agreement and the other Loan Documents to be observed or performed by such Company.
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2.2
Representations in Financing Agreement
. The representations and warranties of
each Company set forth in the Financing Agreement and the other Loan Documents are true and correct
in all material respects except to the extent that such representations and warranties relate
solely to or are specifically expressed as of a particular date or period which is past or expired
as of the date hereof.
2.3
No Event of Default
. No Default or Event of Default exists.
ARTICLE III
MODIFICATION OF LOAN DOCUMENTS; CONDITIONS PRECEDENT
3.1
Loan Documents
. The Financing Agreement and the other Loan Documents are amended
to provide that any reference therein to the Financing Agreement shall mean, unless otherwise
specifically provided, the Financing Agreement as amended hereby, and as further amended, restated,
supplemented or modified from time to time.
3.2
Conditions Precedent
. This Amendment shall become effective and be deemed
effective as of 12:00 a.m., Charlotte, North Carolina time, July 11, 2010 (the “
Effective
Time
”), provided the following conditions precedent have been satisfied or waived by CIT:
(a) CIT shall have received the following documents, each to be in form and content
satisfactory to CIT and its counsel:
(i) this Amendment, duly executed by the Companies;
(ii) concurrently with receipt of this Amendment, amendments to the CCIP Factoring
Agreement and the Hamco Factoring Agreement, duly executed by CCIP and Hamco, conforming the
term and termination provisions therein to those provisions contained in this Amendment;
(iii) concurrently with receipt of this Amendment, certificates of the Secretary or
Assistant Secretary of each Company, certifying as to the incumbency and signature of the
officer(s) executing this Amendment on behalf of each Company, and to which are attached (a)
the bylaws of such Company, (b) the articles of incorporation of such Company, certified by
the Secretary of State or other appropriate official of the state in which such company is
incorporated, (c) certificates of good standing or existence from the Secretary of State or
other appropriate official of the state in which such company is incorporated and (d) copies
of the resolutions of the Board of Directors of each Company authorizing the execution,
delivery and performance of this Amendment;
(iv) on July 9, 2010, an executed certificate from E. Randall Chestnut or another
officer of each Company acceptable to CIT, substantially in the form attached hereto as
Exhibit A certifying that as of the date thereof, after giving effect to the effectiveness
of this Amendment, (x) the representations and warranties contained in the Financing
Agreement are true and correct in all material respects, (y) each Company is in
compliance with all of the terms and provisions set forth in the Financing Agreement
and (z) no Default or Event of Default exists; and
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(v) such other documents, instruments and agreements as CIT shall reasonably request in
connection with the foregoing matters.
(b) From the date of this Amendment through the Effective Time, there shall not have occurred
any event, condition or state of facts which would reasonably be expected to have a Material
Adverse Effect, as reasonably determined by CIT.
(c) At the Effective Time, no Default or Event of Default exists.
For the avoidance of doubt, it is understood and agreed that if the conditions precedent
described in this Article III are not satisfied or waived by the Effective Time, this Amendment
shall be deemed to be null and void and of no further force and effect whatsoever.
ARTICLE IV
GENERAL
4.1
Full Force and Effect
. As expressly amended hereby, the Financing Agreement and
the other Loan Documents shall continue in full force and effect in accordance with the provisions
thereof. As used in the Financing Agreement and the other Loan Documents, “hereinafter,” “hereto,”
“hereof,” or words of similar import, shall, unless the context otherwise requires, mean the
Financing Agreement or the other Loan Documents, as the case may be, as amended by this Amendment.
4.2
Applicable Law
. This Amendment shall be governed by and construed in accordance
with the internal laws and judicial decisions of the State of New York.
4.3
Counterparts
. This Amendment may be executed in one or more counterparts, each of
which shall constitute an original, but all of which when taken together shall constitute but one
and the same instrument.
4.4
Further Assurances
. The Companies shall execute and deliver to CIT such
documents, certificates and opinions as CIT may reasonably request to effect the amendments
contemplated by this Amendment.
4.5
Headings
. The headings of this Amendment are for the purpose of reference only
and shall not effect the construction of this Amendment.
4.6
Expenses
. The Companies shall reimburse CIT for CIT’s legal fees and expenses
(whether in-house or outside) incurred in connection with the preparation, negotiation, execution
and delivery of this Amendment and all other agreements and documents contemplated hereby.
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4.7
Waiver of Jury Trial
. TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, EACH
COMPANY AND CIT WAIVE THE RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT, PROCEEDING OR COUNTERCLAIM OF
ANY KIND ARISING OUT OF OR RELATED TO THIS AMENDMENT, THE FINANCING AGREEMENT OR THE OTHER LOAN
DOCUMENTS OR THE TRANSACTIONS RELATED HERETO OR THERETO.
[signatures appear on the following pages]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed and delivered
by their duly authorized officers to be effective on the day and year first above written.
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CCI
:
CROWN CRAFTS, INC.
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By:
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/s/ Olivia Elliott
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Olivia Elliott
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CFO
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WEAVERS
:
CHURCHILL WEAVERS, INC.
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By:
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/s/ Olivia Elliott
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Olivia Elliott
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CFO
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HAMCO
:
HAMCO, INC.
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By:
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/s/ Olivia Elliott
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Olivia Elliott
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CFO
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CCIP
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CROWN CRAFTS INFANT PRODUCTS, INC.
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By:
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/s/ Olivia Elliott
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Olivia Elliott
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CFO
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[signatures continue on the following page]
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CIT
:
THE CIT GROUP/COMMERCIAL SERVICES, INC.
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By:
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/s/ Vernon Wells
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Vernon Wells
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Vice President
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Exhibit 99.1
For Immediate Release
Crown Crafts, Inc. Extends Financing Agreement with CIT
Gonzales, Louisiana — March 8, 2010 — Crown Crafts, Inc. (the “Company”) (NASDAQ-CM: CRWS) today
announced that it amended its financing agreement with CIT Commercial Services, a subsidiary of CIT
Group Inc. (NYSE: CIT), a leading provider of financing to small businesses and middle market
companies, that extends the termination date of the agreement to July 11, 2013. The amendment,
which will become effective on July 11, 2010, also permits the Company to declare cash dividends on
its common stock of up to $500,000 in any calendar quarter.
Commenting on the amendment, E. Randall Chestnut, Chairman, President & Chief Executive Officer of
the Company, stated, “We are very pleased to announce this extension of our financing agreement and
the continuation of our long-valued relationship with CIT. We believe that this extension gives us
the flexibility to expand our business and the opportunity to make targeted acquisitions. We have
renewed confidence that the emergence of CIT’s parent from bankruptcy has strengthened its
financial position and places it in a position to succeed as it services our liquidity needs.”
About Crown Crafts, Inc.
Crown Crafts, Inc. designs, markets and distributes infant and toddler consumer products, including
bedding, blankets, bibs, bath items and the recently-acquired portfolio of the disposable germ
protection products of Neat Solutions. Its operating subsidiaries include Hamco, Inc. in Louisiana
and Crown Crafts Infant Products, Inc. in California. Crown Crafts is America’s largest
distributor of infant bedding, bibs and bath items. The Company’s products include licensed and
branded collections as well as exclusive private label programs for certain of its customers.
www.crowncrafts.com
About CIT Commercial Services
CIT Commercial Services is the nation’s leading provider of factoring and credit protection
services to consumer products companies. It specializes in serving the apparel, footwear,
furniture, home furnishings, consumer electronics and other consumer products industries that sell
into retail channels of distribution.
About CIT
CIT (NYSE: CIT) is a bank holding company with more than $60 billion in finance and leasing assets
that provides financial products and advisory services to small and middle market businesses.
Operating in more than 50 countries across 30 industries, CIT provides an unparalleled combination
of relationship, intellectual and financial capital to its customers worldwide. CIT maintains
leadership positions in small business and middle market lending, factoring, retail finance,
aerospace, equipment and rail leasing, and vendor finance. Founded in 1908 and headquartered in
New York City, CIT is a member of the Fortune 500.
www.cit.com
Forward-Looking Statements
This release contains forward-looking statements within the meaning of the Securities Act of 1933,
the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. Such
statements are based upon management’s current expectations, projections, estimates and
assumptions. Words such as “expects,” “believes,” “anticipates” and variations of such words and
similar expressions identify such forward-looking statements. Forward-looking statements involve
known and unknown risks and uncertainties that may cause future results to differ materially from
those suggested by the forward-looking statements. These risks include, among others, general
economic conditions, including changes in interest rates, in the overall level of consumer spending
and in the price of oil, cotton and other raw materials used in the Company’s products, changing
competition, changes in the retail environment, the level and pricing of future orders from the
Company’s customers, the extent to which the Company’s business is concentrated in a small number
of customers, the Company’s dependence upon third-party suppliers, including some located in
foreign countries, customer acceptance of both new designs and newly-introduced product lines,
actions of competitors that may impact the Company’s business, disruptions to transportation
systems or shipping lanes used by the Company or its suppliers, and the Company’s dependence upon
licenses from third parties. Reference is also made to the Company’s periodic filings with the
Securities and Exchange Commission for additional factors that may impact the Company’s results of
operations and financial condition. The Company does not undertake to update the forward-looking
statements contained herein to conform to actual results or changes in our expectations, whether as
a result of new information, future events or otherwise.
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Contact:
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Investor Relations Department
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(225) 647-9146
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or
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Halliburton Investor Relations
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(972) 458-8000
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