EXHIBIT 10.1
(CROWN CRAFTS LOGO) [d30125d3012500.gif]
November 4, 2005
Wynnefield Capital, Inc.
450 Seventh Avenue
Suite 509
New York, New York 10123
Mr. Frederick G. Wasserman
4 Nobadeer Drive
Pennington, NJ 08534

     
Re:
  Crown Crafts, Inc. (the “Company”)/Wynnefield Capital, Inc. (“Wynnefield”)

Gentlemen:
     This will confirm the understanding and agreement among us with respect to
the subject matter hereof.
     1. Subject to the limitations set forth below and until the Company shall
notify you otherwise, which it may do at any time and for any reason on or after
the Determination Date (as hereinafter defined), Mr. Wasserman shall have the
right, on behalf of Wynnefield, (i) to attend and participate in (and be given
timely written notice of) all meetings of the Company’s Board of Directors (the
“Board”), whether held in person or by telephone, in a non-voting observer
capacity; and (ii) to receive (and disclose to Wynnefield) all information
(written or oral) discussed with or provided to the Board in connection
therewith. For purposes hereof, “Determination Date” shall mean the first to
occur of the following dates: (i) the date of the next meeting of the Company’s
stockholders at which directors are to be elected; (ii) the date on which either
of you, directly or indirectly, (A) publicly offers to acquire more than 20% of
the Company’s

 

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outstanding shares of common stock, (B) shall solicit proxies for the purpose of
electing one or more directors of the Company or effecting any change in the
composition of the Board, or (C) shall otherwise communicate with the Company’s
stockholders for the purpose of influencing them to vote in opposition to
management or take a position adverse to management that has been previously
approved by a majority of the Board; (iii) the date on which either of you, in
the opinion of a majority of the Board, shall breach or violate any term or
covenant hereof, and such breach is not cured within 10 days after receiving
notice thereof from the Board; and (iv) the date on which the representation and
warranty in Paragraph 5 hereof shall no longer be true and correct in the
opinion of a majority of the Board.
     2. Mr. Wasserman will not be paid any fees or other type of compensation by
the Company hereunder. The Company, however, will reimburse Mr. Wasserman for
all reasonable out-of-pocket business expenses incurred by him hereunder upon
submission to the Company of invoices and other pertinent data in accordance
with the Company’s reimbursement policies applicable to the Company’s directors
generally.
     3. The Board reserves the right not to provide information to Mr. Wasserman
and to exclude him from any meeting or portion thereof if a majority of the
Board concludes in good faith, upon the advice of the Company’s counsel, that
(i) disclosure of such information to him, or attendance at such meeting by him,
would result in the waiver by the Company of the attorney-client privilege
between the Company and its counsel; or (ii) the interests of Wynnefield or
Mr. Wasserman in respect of the subject matter thereof are different than, in
addition to, or in conflict with, the interests of the Company’s stockholders
generally.
     4. Each of you agrees to act in a fiduciary manner in accordance with
applicable law with respect to all non-public information disclosed to you in
respect of the foregoing and to be subject to all of the duties with respect
thereto as would be the case if Mr. Wasserman were a member of the Board. Each
of you acknowledges that you will be deemed to be an “insider” of the Company
and that you may not buy or sell any securities of the Company, either in the
open market or in private transactions, other than in compliance with all
applicable laws and with such policies and procedures of the Company as may be
in effect from time to time relating thereto to which the Company’s directors
are subject.

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     5. Each of you hereby represents and warrants to the Company that you are
not engaged or involved, directly or indirectly, in any business or activity
that competes with the business of the Company, and each of you agrees to notify
the Company immediately in the event you should become so engaged or involved;
provided, however, that together you may own, in the aggregate, up to five
percent (5%) of the outstanding securities of an issuer that competes with the
Company so long as such issuer is subject to the periodic reporting requirements
of the Securities Exchange Act of 1934, as amended.
     If the foregoing accurately sets forth our understanding and agreement,
please so indicate in the space provided for that purpose below, whereupon this
letter shall constitute a binding agreement among us as of the date first above
written.
     This letter may be executed in multiple counterparts, each of which shall
be an original and all of which together shall constitute one and the same
instrument. Executed counterparts may be delivered by facsimile transmission.

          Very truly yours,
 
        CROWN CRAFTS, INC.
 
        By:   /s/ Amy Vidrine Samson      
 
  Its:   Vice President, CFO
 
       

ACKNOWLEDGED AND AGREED:
WYNNEFIELD CAPITAL, INC.

          By:   /s/ Nelson Obus      
 
  Its:    
 
       
 
        /s/ Frederick G. Wasserman   FREDERICK G. WASSERMAN

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