AMENDMENT NO. 5 OF 1995 NOTE AGREEMENT
This Amendment, entered into as of August 31, 2000, by and between
CROWN CRAFTS, INC. (the "Company") and THE PRUDENTIAL INSURANCE COMPANY OF
AMERICA ("Noteholder").
WHEREAS, the parties hereto have executed and delivered that certain
Note Purchase and Private Shelf Facility dated as of October 12, 1995 (as
previously amended and as it may be further amended, modified or supplemented,
the "Note Agreement");
WHEREAS, the Company has requested a modification of certain covenants
under the Note Agreement;
WHEREAS, Noteholder is willing to enter into this Amendment subject to
the satisfaction of conditions and terms set forth herein;
WHEREAS, capitalized terms used herein and not otherwise defined shall
have the meanings set forth in the Note Agreement; and
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. AMENDMENTS TO PARAGRAPH 4A OF THE NOTE AGREEMENT.
1A. Paragraph 4A hereby is amended and restated in its entirety as
follows:
4A. REQUIRED PREPAYMENTS OF SERIES A NOTES.
(i) The Company shall make, or shall cause each
applicable Subsidiary to make, a prepayment from the Net Proceeds of
each Restricted Asset Disposition and each Capital Market Transaction,
except that such Net Proceeds shall be (a) 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 exceeds $50,000,
and (b) applied to reduce the amount of Mandatory Senior Debt Payments
required to be made pursuant to clause 4A(iii), with such applications
being applied in the order of maturity of the Payment Dates set forth
in clause 4A(iii). 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.
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(ii) The Company shall make payments of principal
outstanding on the Senior Debt to the Secured Parties, pro rata
(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
(iii) The Notes of each Series shall be subject to
prepayment in whole or in part pursuant to this paragraph 4A at 100% of
the principal amount so prepaid plus interest thereon to the prepayment
date and Yield-Maintenance Amount, if any, subject to clause (v) below,
with respect to each such Note.
(iv) The Notes of each Series shall be due and payable on
April 3, 2001 at 100% of the principal amount plus interest thereon to
the payment date and Yield-Maintenance Amount.
(v) Yield-Maintenance Amount shall not be payable on any
prepayments of principal that are in the aggregate less than or equal
to $7,142,856 and made after August 30, 2000. For any prepayment of
principal in excess of an aggregate of $7,142,856, Yield-Maintenance
Amount shall be due and payable on the payment date with respect to
such prepayment. The calculation of the Yield-Maintenance Amount shall
be made using the mandatory prepayment schedule applicable to the Notes
as originally issued (annual prepayments equal to $3,571,428 with a
maturity date of October 12, 2005) and the interest rate as set forth
in the originally executed Notes (Series A Note equal to 7.27% per
annum; Series B Note equal to 6.56% per annum).
2. AMENDMENTS TO PARAGRAPH 5 OF THE NOTE AGREEMENT.
2A. Paragraph 5A(l)(vii) hereby is amended and restated in its
entirety as follows:
(vii) as soon as available, such other information relating
to the business, operations, affairs and financial condition of the
Company or any of its Subsidiaries from time to time delivered by the
Company pursuant to the Bank of America Credit Agreement or the
Wachovia Bank Credit Agreement, including, without limitation,
(A) as soon as practicable and in any event
within 40 days (except for the borrowing base certificate
pursuant to clause (y) below, which shall be delivered within
35 days) after the end of each month beginning with the fiscal
month ended July 31, 2000, (x) a balance sheet of the Company
and its Subsidiaries as at the end of such month and the
related statements of income,
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stockholders' equity and cash flows for such month, and
accompanied by a certificate of an Authorized Officer to the
effect that such financial statements present fairly in all
material respects the financial position of the Company 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, (y) a borrowing base certificate
(calculated showing the Month End Inventory Amount, as defined
in and pursuant to the provisions of clause (B) below) and (z)
a certificate of an Authorized Officer demonstrating
compliance with Paragraph 6A hereof, which certificate shall
be in the form attached to the Wachovia Bank Credit Agreement
as Exhibit J, and
(B) on each Business Day, an uncertified, good
faith estimated update (a "DAILY BORROWING BASE CERTIFICATE")
of the most recently furnished monthly borrowing base
certificate (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 Noteholder and the Company
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
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 (as defined in
the Wachovia Credit Agreement) shall be the Daily Inventory
Component Amount set forth in each Daily Borrowing Base
Certificate; and
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2B. Paragraph 5A(1) hereby is amended by adding new paragraphs
(viii) and (ix) thereto as follows:
(viii) UPDATES OF INITIATIVES SUMMARY. With respect to
Initiatives Summary (as defined in the letter agreement among the
Company and the Secured Parties dated as of June 27, 2000), the Company
shall furnish to the Noteholder (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; and
(ix) DELIVERY OF OUTSTANDING ITEMS. The items described on
Appendix 1 hereto, which were to have been furnished to Wachovia Bank
pursuant to Section 10(a) of Amendment No. 1 to the Wachovia Bank
Credit Agreement, but have not yet been delivered, shall be delivered
to the Noteholder (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.
2C. Paragraph 5 is amended by the addition of a new paragraph, as
follows:
5G. WARRANTS. By October 2, 2000, the Company shall issue
to the Noteholder (or its affiliate designee), together with each of
the other Secured Parties (or their affiliate designees) without any
further consideration payable, warrants (the "WARRANTS"), exercisable
at nominal cost for the Company's common stock such that upon issuance
the Secured Parties, collectively, shall own 10% of the Company's then
issued and outstanding common stock exercisable any time after
issuance, but not later than December 31, 2005; provided, however, that
the Warrants shall be reduced, to the extent not previously exercised,
at a rate equal to 2% of such outstanding Warrants for each 1% of the
amount by which the principal balance of the Senior Debt outstanding on
August 31, 2000 is permanently reduced by principal payments made after
such date. The Warrants shall be accompanied by a warrant holders
rights agreement providing the Noteholder and the other Secured Parties
with customary registration, "call," "put," "clawback", antidilution
provisions (including with respect to the exercise of options
outstanding on August 31, 2000) and similar rights acceptable to the
Noteholder, in its sole discretion. The Warrants shall be divided among
the Secured Parties pro rata, without taking into account any
outstanding Wachovia LC's (as defined in the Wachovia Credit Agreement)
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 the
Wachovia Credit Agreement has been provided by the Company.
3. AMENDMENTS TO PARAGRAPH 6 OF THE NOTE AGREEMENT.
3A. Paragraph 6A hereby is amended and restated in its entirety as
follows:
6A. FINANCIAL COVENANTS. The Company covenants that it
will not at any time:
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(i) CAPITAL EXPENDITURES. Permit Capital Expenditures
during the period from April 2, 2000 through April 3, 2001 to exceed
$4,400,000.
(ii) 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
Noteholder and the Company 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)
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
3B. Paragraph 6N hereby is amended and restated in its entirety as
follows:
6N. 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 Noteholder and the Company 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
- ------------------
(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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November 7, 2000 through November 13, 2000 25,000,000
November 14, 2000 and thereafter 24,000,000
3C. Paragraph 6 hereby is amended by adding new paragraph 6O as
follows:
6O. 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 Company may
not make any principal payments to any of the Secured Parties other
than prorata principal payments, and each Secured Party's prorata share
shall be calculated as provided in Section 32 of the Intercreditor
Agreement.
4. AMENDMENT TO PARAGRAPH 7 OF THE NOTE AGREEMENT. Paragraph 7 is
amended by deleting clause (v) thereof and substituting the following therefor:
(v) the Company fails to perform of observe any agreement
contained in paragraphs 5E, 5F, 5G or 6; or
5. AMENDMENTS TO PARAGRAPH 10 OF THE NOTE AGREEMENT.
5A. Paragraph 10A is hereby amended by adding the following
sentence at the of each of the following defined terms, "Discounted
Value", "Reinvestment Yield", "Remaining Average Life", "Remaining
Scheduled Payments" and "Yield-Maintenance Amount":
For purposes of this calculation for any Note, it is agreed
that the mandatory prepayment schedule applicable to the Notes
as originally issued (annual prepayments equal to $3,571,428
with a maturity date of October 12, 2005) and the interest
rate as set forth in the originally executed Notes (Series A
Note equal to 7.27% per annum; Series B Note equal to 6.56%
per annum) shall be used.
5B. Paragraph 10B is hereby amended as follows:
(i) By deleting the definitions of "Consolidated EBITDA"
and "Restricted Asset Dispositions" and replacing the following
definitions of "Consolidated EBITDA" and "Restricted Asset
Dispositions" in lieu thereof:
"CONSOLIDATED EBITDA" means, with respect to the Company 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 Company in connection with the August
2000 Transaction Document Amendments (as defined in Section 32 of the
Intercreditor Agreement).
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"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 Paragraph 4A(ii).
(ii) By inserting the following definition of the term
"Net Proceeds" in the appropriate alphabetical order:
"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 Company 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 Company 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 Company 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 Company 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 and (iii) all amounts applied to
repayment of Indebtedness (other than the Senior Debt) secured by a
Lien on the asset or property disposed.
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6. AMENDMENT TO EXHIBIT A. Exhibit A to the Note Agreement shall
be deleted in its entirety and Exhibit A attached hereto shall be substituted
therefor.
7. CONDITIONS OF EFFECTIVENESS. This Amendment shall become
effective when, and only upon the satisfaction of each of the following
conditions, such satisfaction to occur on or prior to August 31, 2000:
(a) No Default or Event of Default shall be in existence after
giving effect to this Amendment;
(b) the Noteholder shall have received executed originals of this
Amendment and all of the following documents, each (unless otherwise indicated)
being dated the date hereof, in form and substance satisfactory to the
Noteholder:
(i) The Notes;
(ii) Copies of all documents evidencing all governmental
approvals, if any, with respect to this Amendment and the matters
contemplated hereby and thereby;
(iii) A certificate of the Secretary or an Assistant
Secretary of the Company certifying the names and true signatures of
the officers authorized to sign this Amendment on behalf of the Company
and any other documents to be delivered by the Company hereunder;
(iv) The Consent and Reaffirmation of the Facility
Guarantors attached hereto by each of the Guarantors;
(v) A duly executed Amendment No. 4, satisfactory to the
Required Holders in all respects, to the Wachovia Bank Credit
Agreement;
(vi) A duly executed Amendment No. 4, satisfactory to the
Required Holders in all respects, to the Bank of America Credit
Agreement;
(vii) A duly executed Global Amendment No. 2 to
Intercreditor Agreements in form and substance satisfactory to
Noteholder;
(viii) A legal opinion of counsel to Company, as to such
matters as the Noteholder may request; and
(ix) Such other documents, instruments, approvals or
opinions as the Noteholder may reasonably request.
(c) The Company shall have paid to the Noteholder 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;
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(d) Payment to the Person indicated below of the following amounts
in immediately available funds:
(i) to the Collateral Agent, Collateral Agent Fees in an
amount equal to $1,425;
(ii) to the Collateral Agent for Field Audit Expenses of
the Collateral Agent with respect to Core Crown Crafts, CCIP, and
Hamco, in the amount as set forth in a statement submitted to the
Company;
(iii) to the appropriate Secured Party, legal fees and
expenses of Jones, Day, Reavis & Pogue; King & Spalding; and Smith,
Helms, Mullis & Moore, LLP, counsel to the respective Secured Parties,
through the effective date of the Amendment, pursuant to statements
submitted to the Company (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; and
(iv) to the appropriate Secured Party, fees and expenses
of consultants to the respective Secured Parties incurred in connection
with the review of the Company's proposed employee retention plan.
8. REPRESENTATIONS AND WARRANTIES.
(a) The Company hereby repeats and confirms each of the
representations and warranties made by it in the Note Agreement, as amended
hereby, as though made on and as of the date hereof, with each reference therein
to "this Agreement", "hereof", "hereunder", "thereof", "thereunder" and words of
like import being deemed to be a reference to the Note Agreement as amended
hereby.
(b) The Company further represents and warrants as follows:
(i) The execution, delivery and performance by the
Company of this Amendment and the Notes are within its corporate
powers, have been duly authorized by all necessary corporate action and
do not contravene (A) its charter or by-laws, (B) law or (C) any legal
or contractual restriction binding on or affecting the Company; and
such execution, delivery and performance do not or will not result in
or require the creation of any Lien upon or with respect to any of its
properties.
(ii) No governmental approval is required for the due
execution, delivery and performance by the Company of this Amendment
and the Notes, except for such governmental approvals as have been duly
obtained or made and which are in full force and effect on the date
hereof and not subject to appeal.
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(iii) This Amendment and the Notes constitute the legal,
valid and binding obligations of the Company enforceable against the
Company in accordance with its terms.
(iv) There are no pending or threatened actions, suits or
proceedings affecting the Company or any of its Subsidiaries or the
properties of the Company or any of its Subsidiaries before any court,
governmental agency or arbitrator, that may, if adversely determined,
materially adversely affect the financial condition, properties,
business, operations or prospects of the Company and it Subsidiaries,
considered as a whole, or affect the legality, validity or
enforceability of the Note Agreement as amended by this Amendment.
(v) No material adverse change in the business,
properties, prospects, operations or condition, financial or otherwise,
of the Company 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 Noteholder.
9. MISCELLANEOUS.
9A. REFERENCE TO AND EFFECT ON THE NOTE AGREEMENT.
(a) Upon the effectiveness of this Amendment, on and after the
date hereof each reference in the Note Agreement to "this Agreement",
"hereunder", "hereof" or words of like import referring to the Note Agreement,
and each reference in any other document to "the Note Agreement", "thereunder",
"thereof" or words of like import referring to the Note Agreement, shall mean
and be a reference to the Note Agreement, as amended hereby and each reference
to the Notes shall mean and be a reference to the Notes issued in connection
with this Amendment.
(b) Except as specifically amended above, the Note Agreement and
the Notes, and all other related documents, are and shall continue to be in full
force and effect and are hereby in all respects ratified and confirmed.
(c) The execution, delivery and effectiveness of this Amendment
shall not, except as expressly provided herein, operate as a waiver of any
right, power or remedy of any holder of a Note under the Note Agreement or the
Notes, nor constitute a waiver of any provision of any of the foregoing.
9B. COSTS AND EXPENSES. The Company agrees to pay on demand all
costs and expenses incurred by any holder of a Note in connection with the
preparation, execution and delivery of this Amendment, including, without
limitation, the reasonable fees and out-of-pocket expenses of counsel. The
Company further agrees to pay on demand all costs and expenses, if any
(including, without limitation, reasonable counsel fees and expenses of
counsel), incurred by any holder of a Note in connection with the enforcement
(whether through negotiations, legal proceedings or otherwise) of this
Amendment, including, without limitation, counsel fees and expenses in
connection with the enforcement of rights under this paragraph 9B.
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9C. EXECUTION IN COUNTERPARTS. This Amendment 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 taken together shall constitute but one and the
same instrument.
9D. GOVERNING LAW. This Amendment shall be governed by, and
construed in accordance with, the laws of the State of New York.
9E. NO DEFAULT OR CLAIMS. To induce the Noteholder to enter into
this Amendment, the Company 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 Company arising out of or with respect
to any of the Notes or other obligations of the Company owed to any holder of a
Note, and (iii) the Noteholder has acted in good faith and has conducted its
relationships with the Company in a commercially reasonable manner in connection
with the negotiations, execution and delivery of this Amendment and in all
respects in connection with the Note Agreement, the Company hereby waiving and
releasing any such claims to the contrary that may exist as of the date of this
Amendment.
9F. Extension of the Time for Delivery of Certain Reports. The
Noteholder hereby agrees the time for delivery of the reports and other items
required to be furnished pursuant to (i) Paragraph 5A(1)(i) of the Note
Agreement for the Fiscal Year ended April 2, 2000, and (ii) Paragraph 5A(1)(ii)
for the fiscal quarter ended July 2, 2000, hereby is extended to September 15,
2000.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
CROWN CRAFTS, INC.
By
-------------------------------
Title:
THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA
By
-------------------------------
Title:
CONSENT AND REAFFIRMATION OF FACILITY GUARANTORS
Each of the undersigned (i) acknowledges receipt of the foregoing
Amendment of 1995 Note 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.
FACILITY 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:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
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
EXHIBIT A
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND
MAY NOT BE OFFERED OR SOLD IN VIOLATION OF SUCH ACT.
THIS NOTE IS GIVEN SUBSTITUTION AND WITHOUT NOVATION OF A PROMISSORY
NOTE DATED [OCTOBER 12, 1995] [JANUARY 25, 1996] ISSUED BY CROWN
CRAFTS, INC.
CROWN CRAFTS, INC.
SENIOR SERIES [A] [B] NOTE DUE 2001
No. R- August 31, 2000
$_________
FOR VALUE RECEIVED, the undersigned, CROWN CRAFTS, INC. (herein called
the "COMPANY"), a corporation organized and existing under the laws of the State
of Georgia, hereby promises to pay to ___________________ or registered assigns,
the principal sum of _________________ DOLLARS on April 3, 2001 with (a)
interest (computed on the basis of a 360-day year-30-day month) (i) on the
unpaid balance thereof at the Applicable Rate (as defined below) from the date
hereof, payable monthly on the 12th day of each calendar month in each year,
commencing with September 12, 2000, until the principal hereof shall have become
due and payable, and (ii) on any overdue payment (including any overdue
prepayment) of principal, any overdue payment of Yield Maintenance Amount and
any overdue payment of interest, payable monthly as aforesaid (or, at the option
of the registered holder hereof, on demand), at a rate per annum from time to
time equal to the greater of (x) the Applicable Rate or (y) 2% over the rate of
interest publicly announced by Bank of New York from time to time in New York
City as its Prime Rate and (b) the accrued interest from July 12, 2000 through
the date hereof payable on September 12, 2000. "APPLICABLE RATE" shall mean and
equal 11.77% per annum plus if prior to or on January 1, 2001, the aggregate
principal amount of Senior Debt has not been reduced below $85,000,000, an
additional 2% per annum ("ADDITIONAL AMOUNT") commencing January 2, 2001,
provided, however, that if the aggregate principal amount of Senior Debt has
been reduced permanently to less than $65,000,000 prior to or on February 15,
2001, such Additional Amount shall cease to accrue commencing February 15, 2001;
and provided further that if prior to or on March 31, 2001, the aggregate
principal amount of Senior Debt has been reduced permanently to less than
$60,000,000, the Applicable Rate shall be reduced to and equal 11.77% per annum.
Payments of principal, Yield Maintenance Amount, if any, and interest
are to be made at the main office of Bank of New York in New York City or at
such other place as the holder
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hereof shall designate to the Company in writing, in lawful money of the United
States of America.
This Note is one of a series of Senior Notes (as amended or
substituted, the "NOTES") issued pursuant to a Note Purchase and Private Shelf
Agreement, dated as of October 12, 1995 (as it has been and may be amended, the
"AGREEMENT"), between the Company and The Prudential Insurance Company of
America and each Prudential Affiliate which becomes party thereto, on the other
hand, and is entitled to the benefits thereof. As provided in the Agreement,
this Note is subject to prepayment, in whole or from time to time in part, with
the Yield Maintenance Amount as specified in the Agreement.
This Note is a registered Note and, as provided in the Agreement, upon
surrender of this Note for registration of transfer, duly endorsed, or
accompanied by a written instrument of transfer duly executed, by the registered
holder hereof or such holder's attorney duly authorized in writing, a new Note
for the then outstanding principal amount will be issued to, and registered in
the name of, the transferee. Prior to due presentment for registration of
transfer, the Company may treat the person in whose name this Note is registered
as the owner hereof for the purpose of receiving payment and for all other
purposes, and the Company shall not be affected by any notice to the contrary.
In case an Event of Default shall occur and be continuing, the
principal of this Note may be declared or otherwise become due and payable in
the manner and with the effect provided in the Agreement.
Capitalized terms used and not otherwise defined herein shall have the
meanings (if any) provided in the Agreement.
THIS NOTE IS INTENDED TO BE PERFORMED IN THE STATE OF NEW YORK AND
SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAW OF SUCH
STATE.
CROWN CRAFTS, INC.
By:
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Title:
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