AMENDMENT NO. 4 TO REVOLVING CREDIT AGREEMENT
THIS AMENDMENT NO. 4 TO REVOLVING CREDIT AGREEMENT (this "Amendment")
is dated effective as of August 31, 2000, among CROWN CRAFTS, INC. (the
"Borrower") and WACHOVIA BANK, N.A. (the "Lender");
W I T N E S S E T H:
WHEREAS, the Borrower and the Lender executed and delivered that
certain Credit Agreement, dated as of August 9, 1999, as amended by Amendment
No. 1 to Revolving Credit Agreement dated as of February 23, 2000, Amendment No.
2 to Revolving Credit Agreement dated as of March 13, 2000 and Amendment No. 3
to Revolving Credit Agreement dated as of June 4, 2000 (as so amended, the
"Credit Agreement");
WHEREAS, the Borrower has requested and the Lender has agreed to
certain amendments to certain provisions in the Credit Agreement, subject to the
terms and conditions hereof;
NOW, THEREFORE, for and in consideration of the above premises and
other good and valuable consideration, the receipt and sufficiency of which
hereby is acknowledged by the parties hereto, the Borrower and the Lender hereby
covenant and agree as follows:
1. Definitions. Unless otherwise specifically defined herein, each term
used herein which is defined in the Credit Agreement shall have the meaning
assigned to such term in the Credit Agreement. Each reference to "hereof",
"hereunder", "herein" and "hereby" and each other similar reference and each
reference to "this Agreement" and each other similar reference contained in the
Credit Agreement shall from and after the date hereof refer to the Credit
Agreement as amended hereby.
2. Amendments to Credit Agreement.
(a) Each of the following definitions contained in Section 1.1 of the
Credit Agreement is amended and restated in its entirety, and the definitions
which appear below and which have not previously been contained in Section 1.1
of the Credit Agreement hereby are added thereto, in alphabetical order as
follows:
"Applicable Interest Addition" means, from and after the
Fourth Amendment Effective Date, 2.00%; provided that (i) if on January
1, 2001, the aggregate principal amount of the Senior Debt has not been
reduced below $85,000,000, additional interest in the amount of 2% (the
"Contingent Interest") shall be added to and become a part of the
Applicable Interest Addition and accrue on the Loans from and after
January 1, 2001, but will not be payable until the Revolving A Credit
Termination Date and Term Loan Maturity Date, (ii) if on February 15,
2001, the aggregate principal amount of the Senior Debt has been
reduced below $65,000,000, Contingent Interest shall not accrue on the
Loans
after February 15, 2001 and shall no longer be a part of the Applicable
Interest Addition thereafter and (iii) if on March 31, 2001 the
aggregate principal amount of the Senior Debt has been reduced below
$60,000,000, the entire claim for Contingent Interest on the Loans
shall be waived.
"Borrowing Base" means, as determined by the most recent
Borrowing Base Certificate, or, in the event such Borrowing Base
Certificate is not timely delivered, based upon the Lender's good faith
estimate thereof for such period to be reported on the date such
Borrowing Base Certificate was due, an amount equal to the sum of the
following:
(a) all Net Receivables multiplied by 85%, less
the amount of all Factor Advances which have been received from the
applicable Permitted Factor; plus
(b) the lesser of the book value (net of all
reserves) or market value of all Inventory (excluding Mascioni
Inventory), multiplied by 50% (and calculated in the Borrowing Base
Certificate pursuant to the provisions of Section 7.1(g)); plus
(c) the Applicable Property Value multiplied by
80%; plus
(d) the Overadvance Amount.
"Consolidated EBITDA" means, with respect to the Borrower and
its Subsidiaries for any measurement period ending on the date of
computation thereof, the sum of, without duplication, (i) Consolidated
Net Income, (ii) Consolidated Interest Expense, (iii) taxes on income,
(iv) amortization and (v) depreciation, all determined on a
consolidated basis in accordance with GAAP applied on a Consistent
Basis, but excluding one-time charges associated with divestitures,
plant closures, severance, asset write-offs, employee retention and
fees and expenses incurred by the Borrower in connection with the
August 2000 Transaction Document Amendments (as defined in Section 32
of the Intercreditor Agreement).
"Daily Borrowing Base Certificate" has the meaning set forth
in Section 7.1(g).
"Daily Inventory Component Amount" has the meaning set forth
in Section 7.1(g).
"Fourth Amendment Effective Date" means August 31, 2000.
"Inventory Component" has the meaning set forth in Section
7.1(g).
"Mandatory Senior Debt Payments" has the meaning set forth in
Section 2.8(b).
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"Month End Inventory Component Amount" has the meaning set
forth in Section 7.1(g).
"Month End Borrowing Base Certificate" has the meaning set
forth in Section 7.1(g).
"Net Proceeds" means (a) in connection with any Restricted
Asset Disposition, the proceeds thereof in the form of cash and cash
equivalents (including any such proceeds received by way of deferred
payment of principal pursuant to a note or installment receivable or
purchase price adjustment receivable or otherwise, but only as and when
received) of such Restricted Asset Disposition, after deducting
therefrom, as applicable, (i) attorneys' fees, accountants' fees,
investment banking fees, survey costs, title insurance premiums, and
related search and recording charges, transfer taxes, deed or mortgage
recording taxes, amounts required to be applied to the repayment of
Indebtedness secured by a Lien on any asset which is the subject of
such Restricted Asset Disposition and other customary fees and expenses
actually incurred in connection therewith, (ii) taxes paid or
reasonably estimated by the Borrower to be payable as a result thereof
(including withholding taxes incurred in connection with cross-border
transactions, if applicable), (iii) appropriate amounts to be provided
by the Borrower or any Subsidiary, as the case may be, as a reserve
required in accordance with GAAP against any liabilities associated
with such Restricted Asset Disposition and retained by the Borrower or
any Subsidiary, as the case may be, after such Restricted Asset
Disposition, including, without limitation, pension and other
post-employment benefit liabilities and liabilities under any
indemnification obligations associated with such Restricted Asset
Disposition, and (iv) amounts agreed upon by the Secured Parties in
writing for employee retention and severance, (b) in connection with
any Capital Market Transactions (but not including in "Net Proceeds"
any replacements, refundings or refinancings of existing Indebtedness),
the cash proceeds received from such issuance or incurrence, net of
attorneys' fees, investment banking fees, accountants' fees,
underwriting discounts and commissions and other customary fees and
expenses actually incurred in connection therewith and (c) in
connection with any Asset Disposition means cash payments received by
the Borrower therefrom (including any cash payments received pursuant
to any note or other debt security received in connection with any
Asset Disposition) as and when received, net of (i) all legal fees and
expenses and other fees and expenses paid to third parties and incurred
in connection therewith, (ii) all taxes required to be paid or accrued
as a consequence of such disposition, (iii) all amounts applied to
repayment of Indebtedness (other than the Senior Debt) secured by a
Lien on the asset or property disposed.
"Overadvance Amount" means, for the purposes of each
calculation of the Borrowing Base, an amount equal to the following
amounts for the corresponding period, provided, that the amounts set
forth below are subject to adjustment satisfactory to the Lender and
the Borrower following any material asset
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divestiture, to the extent necessary to take into account the effect
thereon of any such divestiture:
Maximum Overadvance
Period Amount
------ -------------------
August 31, 2000 through September 4, 2000 $ 44,000,000
September 5, 2000 through September 11, 2000 $ 44,000,000
September 12, 2000 through September 18, 2000 $ 44,000,000
September 19, 2000 through September 25, 2000 $ 44,000,000
September 26, 2000 through October 2, 2000 $ 44,000,000
October 3, 2000 through October 9, 2000 $ 44,000,000
October 10, 2000 through October 16, 2000 $ 43,000,000
October 17, 2000 through October 23, 2000 $ 42,000,000
October 24, 2000 through October 30, 2000 $ 41,000,000
October 31, 2000 through November 6, 2000 $ 40,000,000
November 7, 2000 through November 13, 2000 $ 39,000,000
November 14, 2000 through November 20, 2000 $ 38,000,000
November 21, 2000 through November 27, 2000 $ 37,000,000
November 28 ,2000 through December 3, 2000 $ 36,000,000
December 4, 2000 through December 10, 2000 $ 35,000,000
December 11, 2000 through December 17, 2000 $ 34,000,000
December 18, 2000 through December 24, 2000 $ 33,000,000
December 25, 2000 through December 31, 2000 $ 31,000,000
January 1, 2001 through February 4, 2001 $ 30,000,000
February 5, 2001 through March 4, 2001 $ 28,000,000
March 5, 2001 through April 1, 2001 $ 27,000,000.
"Restricted Asset Dispositions" means (i) any
Subsidiary Disposition and (ii) any Asset Dispositions (other
than an Asset Disposition referred to in clauses (a), (f) or
(g) of the definition of "Permitted Asset Dispositions",
provided that the proceeds therefrom shall be applied as
provided in Section 2.8(a).
"Revolving A Credit Termination Date" means (i) April
3, 2001 or (ii) such earlier date of the acceleration of any
Loans pursuant to Section 9.1 upon the occurrence of an Event
of Default, or (iii) such date as the Borrower may permanently
terminate the Revolving A Credit Facility by payment in full
of all Revolving A Credit Outstandings.
"Term Loan Maturity Date" means the earlier of (i)
April 3, 2001, or (ii) such earlier date of the acceleration
of any Loans pursuant to Section 9.1 upon the occurrence of an
Event of Default.
"Wachovia LC's" has the meaning set forth in Section
8.18.
"Warrants" has the meaning set forth in Section 8.17.
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(b) Section 2.1(a) hereby is amended and restated in its entirety, as follows:
(a) No Further Commitments. The Borrower hereby acknowledges
and agrees that the Lender no longer has any commitments to make
further Advances hereunder, such commitments having been terminated,
and any Loans by the Lender made after the Fourth Amendment Effective
Date shall be made solely in the absolute discretion of the Lender, and
shall constitute "Discretionary Loans" as defined in, and be made
pursuant and subject to the terms and conditions of, the Intercreditor
Agreement.
(c) Section 2.3 hereby is amended and restated in its entirety, as follows:
2.3 .INTENTIONALLY OMITTED..
(d) Section 2.8 hereby is amended and restated in its entirety, as follows:
2.8 Mandatory Prepayment.
(a) The Borrower shall make, or shall cause each
applicable Subsidiary to make, a prepayment of Revolving
Credit Outstandings and the Term Loan from the Net Proceeds of
each Restricted Asset Disposition and each Capital Market
Transaction, except that such Net Proceeds shall (i) be
payable to the Collateral Agent as and when the aggregate
amount thereof since the last such payment of Net Proceeds
pursuant hereto is equal to or in excess of $50,000, and (ii)
be applied to reduce the amount of Mandatory Senior Debt
Payments required to be made pursuant to Section 2.8(b), with
such applications being applied in the order of maturity of
the Payment Dates set forth in Section 2.8(b). Such amounts
paid to the Collateral Agent shall be held by the Collateral
Agent, for the ratable benefit of the Secured Parties, and
distributed to the Secured Parties as and when the aggregate
amount held by it is at least equal to $250,000, or at such
earlier time as the Secured Parties may agree upon, all
pursuant to the provisions of Section 32 of the Intercreditor
Agreement.
(b) The Borrower shall make payments of
principal outstanding on the Senior Debt to the Secured
Parties, prorata (calculated as provided in Section 32(c) of
the Intercreditor Agreement), in the following amounts on or
before the dates set forth below (the "Mandatory Senior Debt
Payments"):
Payment Date Payment Amount
December 8, 2000 $ 7,000,000
December 31, 2000 $ 4,000,000
February 4, 2001 $ 3,000,000
March 4, 2001 $ 2,000,000
April 1, 2001 $ 3,000,000
-----------
Total $19,000,000
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(e) Section 7.1 hereby is amended amending and restating paragraphs (c)
and (g), thereof, and adding thereto new paragraphs (i) and (j), as follows:
(c) Monthly Reporting. As soon as practicable
and in any event within 40 days (except for the Borrowing Base
Certificate pursuant to clause (ii) below, which shall be
delivered within 35 days) after the end of each month
beginning with the fiscal month ended July 31, 2000, deliver
to the Lender (i) a balance sheet of the Borrower and its
Subsidiaries as at the end of such month and the related
statements of income, stockholders' equity and cash flows for
such month, and accompanied by a certificate of an Authorized
Representative to the effect that such financial statements
present fairly in all material respects the financial position
of the Borrower and its Subsidiaries as of the end of such
month and the results of their operations and the changes in
their financial position for such month, in conformity with
GAAP applied on a Consistent Basis, subject to normal year-end
audit adjustments and the absence of footnotes, (ii) a
Borrowing Base Certificate (calculated showing the "Month End
Inventory Amount", as defined in and pursuant to the
provisions of Section 7.1(g)) and (iii) a certificate of an
Authorized Representative demonstrating compliance with
Sections 8.1(a) and 8.1(b) hereof, which certificate shall be
in the form attached hereto as Exhibit J hereto;
(g) Updates of Borrowing Base Certificates. On
each Business Day, an uncertified, good faith estimated update
(a "Daily Borrowing Base Certificate") of the most recently
furnished monthly Borrowing Base Certificate furnished
pursuant to Section 7.1(c) (a "Month End Borrowing Base
Certificate") as to the information under the heading
"Accounts Receivable" pertaining to "Factored Accounts" and
"Factor Advances"; and the information under the heading
"Senior Debt". The Month End Borrowing Base Certificate shall
show, for the final line item under the heading INVENTORY
contained therein (the "Inventory Component"), the actual
Inventory Component calculated for such fiscal month (the
"Month End Inventory Component Amount"). The Inventory
Component shown on each Daily Borrowing Base Certificate (the
"Daily Inventory Component Amount") shall show the lesser of
(i) the Month End Inventory Component Amount for the most
recently furnished Month End Borrowing Base Certificate and
(ii) the Inventory Component amount for the relevant fiscal
month set forth below, provided, that the amounts set forth
below are subject to adjustment satisfactory to the Lender and
the Borrower following any material asset divestiture, to the
extent necessary to take into account the effect thereon of
any such divestiture:
Fiscal Month Ended: Inventory Component Amount:
------------------- ---------------------------
September 3, 2000 $32,000,000
October 1, 2000 $29,000,000
November 5, 2000 $27,000,000
December 3, 2000 $26,000,000
December 31, 2000 and thereafter $25,000,000
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The Month End Inventory Component Amount shown in a Month End
Borrowing Base Certificate shall be used solely for purposes of
calculating the Daily Inventory Component Amount on Daily Borrowing
Base Certificates delivered thereafter pursuant to the foregoing until
the delivery of the next Month End Borrowing Base Certificate, and the
Inventory Component for purposes of calculating the Borrowing Base
shall be the Daily Inventory Component Amount set forth in each Daily
Borrowing Base Certificate.
(i) Updates of Initiatives Summary. With respect to
Initiatives Summary (as defined in the letter agreement among the
Borrower and the Secured Parties dated as of June 27, 2000), the
Borrower shall furnish to the Lender (i) on Thursday of each week, a
weekly update of the Initiative Summary as to strategic initiatives and
(ii) on the 7th Business Day of each month, a monthly update as to all
other aspects of the Initiatives Summary.
(j) Delivery of Outstanding Items. The items described on
Appendix 1 hereto, which were to have been furnished to the Lender
pursuant to Section 10(a) of Amendment No. 1 to Revolving Credit
Agreement between the parties hereto, but have not yet been delivered,
shall be delivered to the Lender (i) on or before November 30, 2000,
with respect to the title policies described on Appendix 1 and (ii) on
or before October 31, 2000, with respect to all other items.
(f) Section 8.1 is amended and restated in its entirety as follows:
8.1 Financial Covenants.
(a) Capital Expenditures. Permit Capital Expenditures
during the period from April 2, 2000 through the Term Loan Maturity
Date to exceed $4,400,000.
(b) Consolidated EBITDA. Permit cumulative Consolidated
EBITDA as of the end of any fiscal month set forth below to be less
than the amount set forth below opposite such date, provided, that the
amounts set forth below are subject to adjustment satisfactory to the
Lender and the Borrower following any material asset divestiture, to
the extent necessary to take into account the effect thereon of any
such divestiture:
Minimum
Consolidated
Fiscal Month-End EBITDA
---------------- ----------
July 2, 2000 (3 months) (4,750,000)
August 6, 2000 (5,700,000)
September 3, 2000 (4,100,000)
October 1, 2000 (750,000)
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November 5, 2000 2,750,000(1)
December 3, 2000 4,500,000
December 31, 2000 6,500,000
February 2, 2001 7,500,000
March 3, 2001 10,000,000
April 1, 2001 14,500,000
(g) Section 8.15 hereby is amended and restated in its entirety as
follows:
8.15 Factor Advances. Permit to exist any Factor Advances,
other than Factor Advances from a Permitted Factor in an aggregate
amount not exceeding the amount set forth below during the periods set
forth below, provided, that the amounts set forth below are subject to
adjustment satisfactory to the Lender and the Borrower following any
material asset divestiture, to the extent necessary to take into
account the effect thereon of any such divestiture:
Month-End Date Factor Adv. Limit
-------------- -----------------
August 31, 2000 through September 4, 2000 27,500,000
September 5, 2000 through September 11, 2000 28,000,000
September 12, 2000 through September 18, 2000 33,000,000
September 19, 2000 through September 25, 2000 34,000,000
September 26, 2000 through October 2, 2000 36,000,000
October 3, 2000 through October 9, 2000 36,000,000
October 10, 2000 through October 16, 2000 34,000,000
October 17, 2000 through October 23, 2000 32,000,000
October 24, 2000 through October 30, 2000 31,000,000
October 31, 2000 through November 6, 2000 27,000,000
November 7, 2000 through November 13, 2000 25,000,000
November 14, 2000 and thereafter 24,000,000.
(h) Section 8.16 hereby is amended and restated in its entirety as
follows:
8.16 Prorata Payments to Secured Parties. Except as
to any Discretionary Loans (as defined in the Intercreditor
Agreement), notwithstanding any provision to the contrary
contained in any of the Senior Debt Documents or the
Intercreditor Agreement, the Borrower may not make any
principal payments to any of Secured Parties other than
pro-rata principal payments, and each Secured Party's pro-rata
share shall be calculated as provided in Section 32 of the
Intercreditor Agreement.
(i) A new Section 8.17 hereby is added to the Credit Agreement as
follows:
- ---------------
(1) This amount assumes receipt of the New York showroom rental income
in the amount of $1,021,000 during the fiscal month ending November 5. If such
amount is not received in such fiscal month, the Minimum Consolidated EBITDA for
the fiscal month ending November 5 will be decreased by such amount.
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8.17 Warrants. By October 2, 2000, the Lender (or its
affiliate designee) shall receive, together with the other Secured
Parties (or their affiliate designees) without any further
consideration payable, warrants, exercisable at nominal cost for the
Borrower's common stock such that upon issuance the Secured Parties,
collectively, shall own 10% (divided among the Secured Parties pro
rata, without taking into account any outstanding Wachovia LC's so long
as, on the issuance date, cash collateral required to have been
provided for such Wachovia LC's as of such date pursuant to Section
8.18 has been provided) of the Borrower's then issued and outstanding
common stock exercisable any time after issuance, but not later than
December 31, 2005. Such warrants (the "Warrants") shall be accompanied
by a warrant holders rights agreement providing the Lender and the
other Secured Parties with customary registration "call," "put,"
"clawback", antidilution provisions (including with respect to the
exercise of options outstanding on the Fourth Amendment Effective Date)
and similar rights acceptable to the Lender and the other Secured
Parties. However, the Lender agrees, and the other Secured Parties have
agreed (by amendments to their Senior Debt Documents), on a pro rata
basis, to extinguish (return) the Warrants, unexercised, at a rate
equal to 2% of such outstanding Warrants (to the extent not previously
exercised) for each 1% of the amount by which the principal balance of
the Senior Debt outstanding on the Fourth Amendment Effective Date is
reduced by principal payments made after such date.
(j) A new Section 8.18 hereby is added to the Credit Agreement as
follows:
8.18 Wachovia LC's. With respect to all letters of credit
issued by Wachovia for the account of the Borrower, whether outstanding
on the Fourth Amendment Effective Date or thereafter issued (the
"Wachovia LC's"): (i) on or before 2:00 P.M., E.D.T. on September 1,
2000, the Borrower will either cause to be surrendered to the Lender
for cancellation the Wachovia LC issued in connection with worker's
compensation claims (the "Worker's Comp LC") in the stated amount of
$795,842 or provide to the Lender cash collateral in an amount equal to
such stated amount; and (ii) as to all other Wachovia LC's (the "Other
LC's"), (x) those which currently expire prior to October 31, 2000
shall be permitted to expire, and (y) as to those which have not
expired by October 31, 2000, on such date, and as to those issued after
the Fourth Amendment Effective Date, on the date of issuance, the
Borrower shall either cause to be surrendered to the Lender for
cancellation such unexpired Other LC's or provide to the Lender cash
collateral in an amount equal to the lesser of (x) the maximum amount
available to be drawn thereunder and (y) an amount which, together with
the amount of cash collateral provided for the Worker's Comp LC
pursuant to clause (i) above, does not exceed $2,700,000 (the "Cash
Collateral Amount"), and the aggregate stated amount of all Wachovia
LC's for which cash collateral is required pursuant to the foregoing
shall not exceed the Cash Collateral Amount.
(k) Section 9.1 hereby is amended by amending and restating the
remedies portion thereof (the final, unlettered paragraph thereof, immediately
following paragraph (m)) as follows:
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then, and in any such event and at any time thereafter, if
such Event of Default or any other Event of Default shall have
not been waived,
(A) the Lender may, at its option, declare by
notice to the Borrower any or all of the Obligations
to be immediately due and payable, and the same,
including all interest accrued thereon and all other
obligations of the Borrower to the Lender shall
forthwith become immediately due and payable without
presentment, demand, protest, notice or other
formality of any kind, all of which are hereby
expressly waived, anything contained herein or in any
instrument evidencing the Obligations to the contrary
notwithstanding; and
(B) the Lender shall have all of the rights and
remedies available under the Loan Documents or under
any applicable law.
(l) Exhibit J to the Credit Agreement hereby is deleted and Exhibit J
attached hereto is substituted therefor.
3. Restatement of Representations and Warranties. The Borrower hereby
restates and renews each and every representation and warranty heretofore made
by it in the Credit Agreement (as amended and modified hereby) and the other
Loan Documents as fully as if made on the date hereof and with specific
reference to this Amendment and all other loan documents executed and/or
delivered in connection herewith, and further represents and warrants that no
material adverse change in the business, properties, prospects, operations or
condition, financial or otherwise, of the Borrower and its Subsidiaries, taken
as a whole, has occurred since March 28, 1999, except any which arise out of
events which have been disclosed to the Lender.
4. Effect of Amendment. Except as set forth expressly hereinabove, all
terms of the Credit Agreement and the other Loan Documents shall be and remain
in full force and effect, and shall constitute the legal, valid, binding and
enforceable obligations of the Borrower. The agreements contained herein shall
be deemed to have prospective application only, unless otherwise specifically
stated herein.
5. Ratification. The Borrower hereby restates, ratifies and reaffirms
each and every term, covenant and condition set forth in the Credit Agreement
and the other Loan Documents effective as of the date hereof and agrees that
this Amendment is one of the Loan Documents.
6. Counterparts. This Amendment may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which may be delivered by facsimile and which (including counterparts delivered
by facsimile) when so executed and delivered shall be deemed to be an original
and all of which counterparts, taken together, shall constitute but one and the
same instrument.
7. Section References. Section titles and references used in this
Amendment shall be without substantive meaning or content of any kind whatsoever
and are not a part of the agreements among the parties hereto evidenced hereby.
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8. No Default or Claims. To induce the Lender to enter into this
Amendment and to continue to make advances pursuant to the Credit Agreement, the
Borrower hereby acknowledges and agrees that, as of the date hereof, and after
giving effect to the terms hereof, (i) no Default or Event of Default exists,
(ii) no right of offset, recoupment, defense, counterclaim, claim or objection
exists in favor of the Borrower arising out of or with respect to any of the
Loans or other obligations of the Borrower owed to the Lenders under the Credit
Agreement, and (iii) the Bank has acted in good faith and has conducted its
relationships with the Borrower in a commercially reasonable manner in
connection with the negotiations, execution and delivery of this Amendment and
in all respects in connection with the Credit Agreement, the Borrower hereby
waiving and releasing any such claims to the contrary that may exist as of the
date of this Amendment.
9. Governing Law. This Amendment shall be governed by and construed and
interpreted in accordance with, the laws of the State of Georgia.
10. Conditions Precedent. This Amendment shall become effective only
upon satisfaction of each of the following conditions:
(i) No Default or Event of Default shall be in existence
(giving effect to this Amendment);
(ii) The Lender shall have received copies of all documents
evidencing all governmental approvals, if any, with respect to this
Amendment and the matters contemplated hereby and thereby;
(iii) The Lender shall have received a certificate of the
Secretary or an Assistant Secretary of the Borrower certifying the
names and true signatures of the officers authorized to sign this
Amendment on behalf of the Borrower and any other documents to be
delivered by the Borrower hereunder;
(iv) delivery to Christopher L. Carson, at facsimile
404-581-8868, of: (1) this Amendment, executed by each of the parties
hereto; (2) the Consent and Reaffirmation of Guarantors at the end
hereof, executed by each of the Guarantors; (3) a Global Amendment No.
2 to Intercreditor Agreements in form and substance satisfactory to the
Lender, by each of the "Companies", the "Collateral Agent" and each of
the "Secured Parties" (as those terms are defined in the Intercreditor
Agreement); (4) a copy of amendments, satisfactory to the Lender in all
respects, to each of the Bank of America Credit Agreement and the
Prudential Note Agreement, extending maturities thereunder to April 3,
2001, and amending other sections thereof to be consistent with the
amendments to the Credit Agreement contained herein, in each case
executed by the parties thereto, with all conditions to the
effectiveness thereof having been satisfied;
(v) The Borrower shall have paid to the Lender and the other
Secured Parties, on a pro-rata basis a fully-earned non-refundable
amendment fee in an amount equal to 0.25% of the total principal amount
outstanding of the Senior Debt; and
(vi) Payment of Collateral Agent and Lenders' fees and
reimbursement of expenses due at closing:
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1) Collateral Agent Fees- $1,425 (6/4/00 - 8/31/00 @
$500/month)
2) Field Audit Expenses of the Collateral Agent - (For
Core Crown Crafts, CCIP, and Hamco) as set forth in a
statement submitted to the Borrower.
3) Legal Fees--Payment of unpaid legal fees and expenses
of Jones, Day, Reavis & Pogue, King & Spalding and
Smith, Helms, Mullis & Moore, LLP, counsel to the
respective Lenders, through the effective date of the
Amendment, pursuant to statements submitted to the
Borrower (which statements may include estimates of
time and expenses to be incurred on and after the
dates of posting of actual time and expenses set
forth therein, which estimated amounts shall be
subject to subsequent adjustment to reflect actual
time and expenses subsequently posted).
4) Consulting Fees--Payment of fees and expenses of the
Lender's consultant incurred in connection with the
review of the Borrower's proposed employee retention
plan.
11. Extension of the Time for Delivery of Certain Reports. The Lender
hereby agrees that the time for delivery of the reports and other items required
to be furnished pursuant to (i) Section 7.1(a) of the Credit Agreement for the
Fiscal Year ended April 2, 2000, and (ii) Section 7.1(b) for the fiscal quarter
ended July 2, 2000, hereby is extended to September 15, 2000.
[SIGNATURES CONTAINED ON NEXT PAGE]
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IN WITNESS WHEREOF, the Borrower and the Lender have caused this
Amendment to be duly executed, under seal, by their duly authorized officers as
of the day and year first above written.
CROWN CRAFTS, INC. (SEAL)
By:
--------------------------------
Title:
WACHOVIA BANK, N.A. (SEAL)
By:
----------------------------
Title:
13
CONSENT AND REAFFIRMATION OF GUARANTORS
Each of the undersigned (i) acknowledges receipt of the foregoing
Amendment No. 3 to Revolving Credit Agreement (the "Amendment"), (ii) consents
to the execution and delivery of the Amendment by the parties thereto, and (iii)
reaffirms all of its obligations and covenants under that certain Subsidiary
Guaranty Agreement dated as of August 9, 1999, and agrees that none of such
obligations and covenants shall be affected by the execution and delivery of the
Amendment. This Consent and Reaffirmation may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed to be an original and all
of which counterparts, taken together, shall constitute but one and the same
instrument.
GUARANTORS:
CHURCHILL WEAVERS, INC.
CROWN CRAFTS DESIGNER, INC.
CROWN CRAFTS FURNISHINGS, INC.
CROWN CRAFTS FURNISHINGS OF
ILLINOIS, INC.
G.W. STORES, INC.
HAMCO, INC.
CROWN CRAFTS INFANT PRODUCTS,
INC. (as successor to Noel
Joanna, Inc. and the Red
Calliope and Associates, Inc.)
By:
--------------------------------
Title:
14
APPENDIX 1
OUTSTANDING ITEMS
Crown Crafts
Title Insurance Policy for property located in Person County, North
Carolina (see comments to title commitment set forth in letter to George
Jackson, Esq. dated 12/14/99 and letter to Mary Delehant dated 7/20/00)
Title Insurance Policy for property located in Gordon County, Georgia
(see comments to title commitment set forth in letter to Mary Delehant dated
7/20/00)
Title Insurance Policy for property located in Whitfield County,
Georgia (see comments to title commitment set forth in letter to Mary Delehant
dated 7/20/00)
Title Insurance Commitments for property located in Watauga County,
North Carolina (Parcel 1 only) (see comments to title commitment set forth in
letter to Mary Delehant dated 7/20/00)
Opinion Letter from Crown Crafts, Inc.
Surveys for all properties
15
EXHIBIT J
Form of Borrowing Base Certificate
As of _________, 2000
Wachovia Bank, N.A.
191 Peachtree Street, N.E.
Atlanta, Georgia 30303
Telephone: (404) 332-1383
Telefacsimile: (404) 332-6920
This Borrowing Base Certificate is furnished pursuant to the Revolving Credit
Agreement between Crown Crafts, Inc., as Borrower, and Wachovia Bank, N.A., as
Lender, dated as of August 9, 1999, as amended as of the date hereof (the
"Credit Agreement"). Terms which are defined in the Credit Agreement and which
are used herein without definition have the meanings given them in the Credit
Agreement). This is a (check one of the following, and complete the date, as
applicable):
_______ Month End Borrowing Base Certificate, as the last day
of the fiscal month ended
____________________, 200_.
_______ Daily Borrowing Base Certificate, as of ______,
200_.
ACCOUNTS RECEIVABLE
Factored Accounts $
---------------
Other Accounts
---------------
Reserves
---------------
Net Accounts Receivable
---------------
Recoverable Income Taxes
---------------
Eligible Accounts Receivable
---------------
Advance Rate 85% $
---------------
Accounts Receivable Component
---------------
Factor Advances
---------------
Net Accounts Receivable Component
---------------
INVENTORY
- ---------
Raw Materials $
---------------
Finished Goods
---------------
Reserves
---------------
Less Mascioni Inventory
---------------
Net Inventory
---------------
Advance Rate 50% $
---------------(1)
Inventory Component
---------------
- ---------------
(1) Pursuant to Section 7.1(g) of the Credit Agreement, if this is (i) a
Month End Borrowing Base Certificate, insert the Month End Inventory Component,
which is the actual Inventory Component for such fiscal
16
PROPERTY PLANT AND EQUIPMENT
Orderly Liquidation Value of Equipment
---------------
Fair Market Value of Real Property
---------------
Total (Applicable Property Value)
---------------
Advance Rate 80%
---------------
Property Plant and Equipment Component
---------------
OVERADVANCE AMOUNT
Initial Overadvance Amount $
---------------
Less Post March 31, 2000 Inventory Adjustment
---------------
Final Overadvance Amount $
---------------
BORROWING BASE $
---------------
SENIOR DEBT
Bank of America $
---------------
Letter of Credit Outstandings(2)
---------------
Prudential
---------------
Wachovia
---------------
Total Senior Debt $
---------------
COMPLIANCE
===============
The undersigned Authorized Officer hereby certifies that the
information set forth above is true, correct and complete as of the date hereof.
IN WITNESS WHEREOF, I have executed this Certificate this _____ day of
_______, 200__.
CROWN CRAFTS, INC.
By:
-----------------------
Authorized Officer
- ---------------
(continued...)
month, and (ii) a Daily Borrowing Base Certificate, insert the Daily Inventory
Component, which is the lesser of the Month End Inventory Component set forth in
the most recent Month End Borrowing Base Certificate, and the Inventory
Component Amount for the current fiscal month set forth in Section 7.1(g), as it
may have been adjusted pursuant thereto.
(2) Excluding Wachovia LC's which have been cash collateralized pursuant to
Section 8.18 of the Credit Agreement.
17