Exhibit 10.1
SUPPORT
AGREEMENT
SUPPORT AGREEMENT (the Agreement) dated as of August 17, 2006, between BARRON CAPITAL
ADVISORS, LLC, a Delaware limited liability company (Barron), and CROWN CRAFTS, INC., a Delaware
corporation (the Company).
WHEREAS, the Barron Group (as hereinafter defined) currently owns an aggregate of 223,900
shares of the Companys Series A Common Stock, par value $1.00 per share (such class of common
stock being referred to herein as Common Stock);
WHEREAS, the Barron Group wishes to acquire additional shares of Common Stock without
triggering the operation of the Companys Shareholder Rights Plan (the Rights Plan), as set forth
in that certain Amended and Restated Rights Agreement dated as of August 6, 2003 between the
Company and Computershare Investor Services, LLC (as successor to SunTrust Bank), as amended, and
the Company is willing to permit Barron to do so as long as the Company can be assured of a
constructive and mutually beneficial relationship between it and Barron; and
WHEREAS, in order to assure this type of relationship, the Company and Barron wish to enter
into this Agreement;
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual promises,
representations, warranties, covenants and agreements set forth herein, the parties, intending to
be legally bound, hereby agree as follows:
1. TERM OF AGREEMENT
The respective covenants and agreements of Barron and the Company contained in this
Agreement will continue in full force and effect until September 1, 2011 (the Termination Date),
unless earlier terminated pursuant to paragraph 5 or subparagraph 6(b) hereof or pursuant to the
mutual written consent of Barron and the Company.
2. COVENANTS OF BARRON
Prior to the Termination Date or earlier termination of this Agreement and subject to the
further provisions hereof:
(a) Neither Barron nor any person controlled by (within the meaning of Rule 12b-2 under the
Securities Exchange Act of 1934, as amended (the Exchange Act)) Barron (collectively and together
with Barron, the Barron Group) will, directly or indirectly, acquire any Voting Securities (as
hereinafter defined) (except by way of stock dividends or other distributions or offerings made
available to holders of Voting Securities generally) if the effect of such acquisition would be to
increase the aggregate voting power of all Voting Securities then owned by all members of the
Barron Group to greater than 9.9% of such total combined voting power of all Voting Securities then
outstanding; provided that this subparagraph shall not apply if and to the extent that such
aggregate percentage ownership is increased as a result of a recapitalization or reincorporation of
the Company, any redemption of Voting Securities by the
Company, or any other action taken by the
Company or its affiliates (as hereinafter defined) other than the Barron Group.
(b) Barron shall take such action as may be required so that all Voting Securities owned by
any member of the Barron Group are voted (whether by proxy or otherwise) in favor of managements
nominees to the Board of Directors of the Company (the Board) and, unless the Company otherwise
consents in writing, on all other matters to be voted on by the holders of Voting Securities in the
same proportion as the votes cast by the other holders of Voting Securities other than any holder
who is a member of a Prohibited Stockholder Group (as hereinafter defined). The members of the
Barron Group, as holders of Voting Securities, shall be present, in person or by proxy, at all
meetings of stockholders of the Company called with respect to the foregoing and of which the
Barron Group has received due notice, so that all Voting Securities beneficially owned by them may
be counted for the purpose of determining the presence of a quorum at such meetings.
(c) No member of the Barron Group shall deposit any Voting Securities in a voting trust or
subject any Voting Securities to any arrangement or agreement (other than this Agreement) with
respect to the voting of such Voting Securities to which any of the following persons
(collectively, the Prohibited Stockholder Group) is a party: (i) any holder of 5% or more of all
Voting Securities then outstanding (a Prohibited Stockholder) or any person who any member of the
Barron Group knows to be an affiliate, associate (as hereinafter defined) or relative of any
Prohibited Stockholder or any 13D Group (as hereinafter defined) of any Prohibited Stockholder; or
(ii) any person who, to the knowledge of any member of the Barron Group, is casting votes in
respect of Voting Securities beneficially owned by a Prohibited Stockholder. Notwithstanding the
foregoing, no officer or director of the Company who holds 5% or more of any Voting Securities
shall be deemed a Prohibited Stockholder for purposes of this Agreement.
(d) No member of the Barron Group shall solicit proxies or become a participant in a
solicitation (as such terms are defined in Regulation 14A under the Exchange Act) made by
any member of a Prohibited Stockholder Group or that is otherwise in opposition to the
recommendation of the majority of the directors of the Company with respect to any matter.
(e) No member of the Barron Group shall, for the purpose of, or in connection with, acquiring,
holding, voting or disposing of Voting Securities: (i) join a partnership, limited partnership,
syndicate or other group of which, to its knowledge, any member of a Prohibited Stockholder Group
is, directly or indirectly, a partner, member or participant; (ii) otherwise act in concert with
any person who it knows to be a member of a Prohibited Stockholder Group; or (iii) otherwise
become, together with any person who it knows to be a member of a Prohibited Stockholder Group, a
person within the meaning of Section 13(d)(3) of the Exchange Act (in each case other than solely
with members of the Barron Group).
(f) No member of the Barron Group shall, directly or indirectly, offer, sell or transfer any
Voting Securities to any person who it knows to be a member of a Prohibited Stockholder Group;
provided, however, that nothing herein shall restrict any member of the Barron Group from selling
(in open market transactions or otherwise) any Voting Securities to any person who it does not know
to be a member of a Prohibited Stockholder Group.
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(g) No member of the Barron Group shall otherwise seek to control the management or policies
of the Company, including taking any action to seek to obtain representation on the Board.
3. REPRESENTATIONS AND WARRANTIES
(a) The Company hereby represents and warrants to Barron as follows:
(i) The Company is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware.
(ii) The Company has full legal right, power and authority to enter into and perform
this Agreement, and the execution and delivery of this Agreement by the Company and the
consummation of the transactions contemplated hereby have been duly authorized by the Board.
(iii) This Agreement constitutes a valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms, except that (A) such
enforcement may be subject to applicable bankruptcy, insolvency or other similar laws, now
or hereafter in effect, affecting creditors rights generally, and (B) the remedy of
specific performance and injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before which any proceeding therefor
may be brought.
(b) Barron hereby represents and warrants to the Company as follows:
(i) Barron is a limited liability company duly organized, validly existing and in good
standing under the laws of the State of Delaware.
(ii) Barron has full legal right, power and authority to enter into and perform this
Agreement, and the execution and delivery of this Agreement by Barron and the consummation
by Barron of the transactions
contemplated hereby have been duly authorized by the managers of Barron.
(iii) This Agreement constitutes a valid and binding agreement of Barron, enforceable
against Barron in accordance with its terms, except that (A) such enforcement may be subject
to applicable bankruptcy, insolvency or other similar laws, now or hereafter in effect,
affecting creditors rights generally, and (B) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to equitable defenses and to
the discretion of the court before which any proceeding therefor may be brought.
(iv) As of the date hereof, the Barron Group owns of record and beneficially an
aggregate of 223,900 shares of Common Stock (the Existing Shares), and the Existing Shares
constitute all of the shares of the Companys capital stock owned of record or beneficially
by the Barron Group. There are no outstanding options or other rights to acquire from
Barron, or obligations of Barron to sell or to acquire, any shares of the Companys capital
stock. Barron has, directly or indirectly, the voting power, power
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of disposition and power
to agree to all of the matters set forth in this Agreement, in each case with respect to all
of the Existing Shares with no limitations, qualifications or restrictions of any kind
whatsoever, subject to applicable securities laws and the terms of this Agreement.
4. CERTAIN DEFINITIONS
For purposes of this Agreement, unless the context otherwise requires:
(a) affiliate and associate shall each have the meaning set forth with respect thereto in
Rule 12b-2 under the Exchange Act;
(b) beneficially own, beneficial ownership and beneficial owner with respect to any
securities means having beneficial ownership of such securities, as determined pursuant to Rule
13d-3 under the Exchange Act, without duplicative counting of the same securities by the same
holder (it being understood that securities beneficially owned by a person include securities
beneficially owned by all other persons with whom such person would constitute a 13D Group with
respect to securities of the same issuer);
(c) person shall mean any individual, partnership, corporation, limited liability company,
trust or other entity or association;
(d) 13D Group shall mean any group of persons formed for the purpose of acquiring, holding,
voting or disposing of Voting Securities which would be required under Section 13(d) of the
Exchange Act and the rules and regulations thereunder (as now in effect and based on present legal
interpretations thereof) to file a statement on Schedule 13D with the Securities and Exchange
Commission as a person within the meaning of Section 13(d)(3) of the Exchange Act if such group
beneficially owned Voting Securities representing more than 5% of the total combined voting power
of all Voting Securities then outstanding; and
(e) Voting Securities shall mean all classes of capital stock of the Company entitled to
vote generally in the election of directors.
5. TERMINATION
Notwithstanding any other provision of this Agreement, either party may terminate this
Agreement, in its sole discretion, if the members of the Barron Group own, in the aggregate, Voting
Securities representing less than 1% of all outstanding Voting Securities.
6. MISCELLANEOUS
(a) Barron, on the one hand, and the Company, on the other, acknowledge and agree that
irreparable damage would occur in the event any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached. It is accordingly
agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches of
the provisions of this Agreement and to enforce specifically the terms and provisions hereof in any
court of the United States or any state thereof having jurisdiction, in addition to any other
remedy to which they may be entitled at law or equity.
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(b) If any provision of this Agreement is in violation of any statute, rule, regulation, order
or decree of any governmental authority, court or agency, or subjects any member of the Barron
Group to governmental regulation to which it is not now subject, which violation or regulation
would have a material adverse impact on the operations of the Barron Group taken as a whole, then
such member of the Barron Group shall be relieved of its obligations under such provision to the
minimum extent necessary to cure such violation or eliminate the applicability of such regulation;
provided that this subparagraph shall not apply to any such violation or regulation resulting from
activities or operations of any member of the Barron Group other than its ownership of Voting
Securities and the consummation of the transactions contemplated by this Agreement; and provided
further that in the event any member of the Barron Group is relieved of its obligations under any
provision of this Agreement pursuant to this subparagraph, the Company may terminate this Agreement
in its sole discretion.
(c) This Agreement contains the entire understanding of the parties with respect to the
transactions contemplated hereby, and this Agreement may be amended only by an agreement in writing
executed by the parties hereto.
(d) Descriptive headings are for convenience only and shall not control or affect the meaning
or construction of any provision of this Agreement.
(e) For the convenience of the parties, any number of counterparts of this Agreement may be
executed by the parties hereto and each such executed counterpart shall be, and shall he deemed to
be, an original instrument. Executed counterparts may be delivered by facsimile transmission or
other electronic medium.
(f) All notices, consents, requests, instructions, approvals and other communications provided
for herein and all legal process in regard hereto shall be in writing and shall be deemed given
upon (i) transmitters confirmation of a receipt of a facsimile transmission, (ii) confirmed
delivery by a standard overnight carrier or when delivered by hand, or (iii) the expiration of five
(5) business days after the day when mailed by certified or registered mail, postage prepaid,
addressed at the following addresses (or at such other address for a party as shall be specified by
like notice):
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| THE COMPANY: |
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Crown Crafts, Inc. |
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P.O. Box 1028 |
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Gonzales, Louisiana 70707-1028 |
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Attn: E. Randall Chestnut |
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Facsimile No.: (225) 647-9112 |
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| BARRON: |
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Barron Capital Advisors, LLC |
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730 Fifth Avenue, 25th Floor |
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New York, New York 10019 |
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Attn: Andrew B. Worden |
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Facsimile No.: (212) 359-0222 |
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(g) This Agreement will be binding upon, inure to the benefit of and be enforceable by
the parties and their respective successors and assigns.
(h) In the event of any stock split, stock dividend, merger, recapitalization, reorganization
or other change in the capital structure of the Company affecting the Common Stock, this Agreement
and the obligations hereunder shall attach to any additional shares of Common Stock issued to
Barron in connection therewith.
(i) From and after the Termination Date or earlier termination of this Agreement in accordance
with the terms hereof, the covenants of the parties set forth herein shall be of no further force
or effect, and the parties shall be under no further obligation with respect thereto.
(j) This Agreement shall be governed by and construed and enforced in accordance with the laws
of the State of Delaware applicable to contracts made and to be performed therein.
(k) This Agreement shall become effective as of the day first above written.
IN WITNESS WHEREOF, Barron and the Company have caused this Agreement to be duly executed
by their respective officers, each of whom is duly authorized, all as of the day and year first
above written.
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CROWN CRAFTS, INC.
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By: |
/s/ E. Randall Chestnut
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E. Randall Chestnut, President |
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and Chief Executive Officer |
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BARRON CAPITAL ADVISORS, LLC
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By: |
/s/ Andrew Barron Worden
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Name: |
Andrew Barron Worden |
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Title: |
Managing Partner |
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