Exhibit 10.1

 

NINTH AMENDMENT TO

FINANCING AGREEMENT

 

 

THIS NINTH AMENDMENT TO FINANCING AGREEMENT (this “Amendment”), dated this 21st
day of May, 2013, and becoming effective as described in Section 3.2 hereof, is
made by and among:

 

CROWN CRAFTS, INC., a Delaware corporation (“CCI”);

 

HAMCO, INC., a Louisiana corporation (“Hamco”);

 

CROWN CRAFTS INFANT PRODUCTS, INC., a Delaware corporation (“CCIP”; together
with CCI and Hamco, the “Companies” and each a “Company”); and

 

THE CIT GROUP/COMMERCIAL SERVICES, INC., a New York corporation (“CIT”),

 

to the Financing Agreement, dated July 11, 2006 (as amended, modified, restated
or supplemented from time to time, the “Financing Agreement”), among CIT, the
Companies and Churchill Weavers, Inc., a Kentucky corporation (“Weavers”). All
capitalized terms used herein without definition shall have the meanings
ascribed to such terms in the Financing Agreement.

 

RECITALS

 

A.    Pursuant to the Financing Agreement, CIT has agreed to make loans and
extend credit to the Companies in the amounts, upon the terms and subject to the
conditions contained therein.

B.     CIT and the Companies have agreed to extend the Termination Date and make
certain other changes to the Financing Agreement pursuant to the terms and
conditions of this Amendment.

 

STATEMENT OF AGREEMENT

 

NOW, THEREFORE, in consideration of the premises and for other good and valuable
consideration, the receipt and sufficiency of which are hereby expressly
acknowledged, the Companies and CIT hereby agree as follows:

 

ARTICLE I

 

RELEASE OF WEAVERS

 

CIT hereby releases Weavers from any and all indebtedness, liabilities or
obligations it may have to CIT under the Financing Agreement and all other Loan
Documents to which it is a is a party and releases any security interest or lien
that CIT may have in any of Weavers’ property. The Companies consent to the
foregoing releases and agree that the Financing Agreement and the other Loan
Documents shall continue in full force and effect with respect to each of the
Companies in accordance with their respective terms. From and after the date of
this Amendment, the term “Companies” in the Financing Agreement shall be a
reference to CCI, Hamco and CCIP, and the term “Company” in the Financing
Agreement shall be a reference to any one of CCI, Hamco and CCIP as the context
may require. The Companies covenant and agree that Weavers has or promptly
hereafter shall discontinue any operations and business it may have other than
to complete the sale and disposition of its remaining assets and to wind up its
business and dissolve.

 

 

 
 

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ARTICLE II

 

AMENDMENTS TO FINANCING AGREEMENT

 

The Financing Agreement is hereby amended as follows:

 

2.1           Section 1.1 of the Financing Agreement is amended as follows:

 

(a)     The following defined terms are deleted: Collection Days, Early
Termination Date, Early Termination Fee and Prepayment Premium.

 

(b)     The defined term “Applicable Margin” is amended in its entirety to read
as follows:

 

“Applicable Margin shall mean -0.5% for Chase Bank Rate Loans and 2% for LIBOR
Loans.”

 

(c)     The defined term “Fixed Charges” is amended by adding the following
sentence to the end thereof: “Notwithstanding the foregoing clause (f) of this
definition to the contrary, the amount of the special dividend paid by CCI to
its shareholders in December 2012, up to the lesser of $0.50 per share of CCI’s
common stock or $5,000,000, shall not constitute Fixed Charges.”

 

(d)     The defined term “Revolving Line of Credit Fee” is amended by deleting
the words and figure “one fourth of one percent (0.25%)” and substituting the
words and figure “one eighth of one percent (0.125%)” in lieu thereof.

 

(e)     The defined term “Termination Date” is amended by deleting the date
“July 13, 2013” and substituting the date “July 11, 2016” in lieu thereof.

 

(f)     The defined terms “Financial Covenant Applicability Date” and “Financial
Covenant Inapplicability Date” are each amended by deleting the figure
“$6,000,000” and by substituting the figure “$3,000,000” in lieu thereof.

 

2.2           The second sentence of clause (b) of Section 3.2 is amended in its
entirety to read as follows:

 

“All amounts received from a Depository Account and any other proceeds of the
Collateral (other than Factored Accounts) deposited into CIT’s Bank Account
will, for purposes of calculating Net Availability and interest, be credited to
the Client Position Account on the date of deposit in CIT’s Bank Account, and
all payments on and other proceeds of Factored Accounts will be credited to the
applicable Accounts Receivable Account promptly after crediting the account of
the customer or customers obligated to CIT on such Factored Accounts.”

 

2.3          Clause (a) of Section 4.3 is amended by deleting the phrase “and
the applicable Prepayment Premium”.

 

 

 
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2.4           Clause (b) of Section 4.3 is amended by deleting the phrase “(i)
accrued interest on the principal so prepaid to the date of such prepayment and
(ii) the Prepayment Premium due with respect to such prepayment” and by
substituting the phrase “accrued interest on the principal so prepaid to the
date of such prepayment” in lieu thereof.

 

2.5           Clause (a) of Section 7.3 is amended in its entirety to read as
follows:

 

“(a)     Fixed Charge Coverage. Until termination of this Financing Agreement
and the full and final payment and satisfaction of all Obligations, but subject
to Section 7.3(b), the Companies agree to maintain a Fixed Charge Coverage
Ratio, calculated and tested at the end of each fiscal quarter based on the
period of twelve consecutive months then ended, of not less than 1.0 to 1.0.”

 

2.6           Clause (d) of Section 8.1 is amended by deleting the words and
figure “one percent (1%)” and by substituting the words and figure “two percent
(2%)” in lieu thereof.

 

2.7           Section 8.5 is amended in its entirety to read as follows:

 

“8.5      Revolving Line of Credit Fee. On the first day of each month, the
Companies agree to pay to CIT the Revolving Line of Credit Fee.”

 

2.8           Section 8.7 is amended in its entirety to read as follows:

 

“8.7     Administrative Management Fee. On the first day of each month that
immediately follows a month in which the sum of the principal amount of all
outstanding Revolving Loans plus the undrawn amount of all outstanding Letters
of Credit exceeded the Accounts Borrowing Base on any day, the Companies agree
to pay to CIT the Administrative Management Fee, which shall be fully earned
when paid.”

 

2.9           Section 8.11 is amended in its entirety to read as follows:

 

“Reserved.”

 

2.10         Section 11 is amended by deleting the phrase “, provided that the
Companies pays to CIT any Early Termination Fee and Prepayment Premium due and
payable hereunder on the date of termination”.

 

ARTICLE III

 

REPRESENTATIONS AND WARRANTIES

 

The Companies hereby represent and warrant to CIT that:

 

3.1           Compliance With the Financing Agreement. As of the execution of
this Amendment, each Company is in compliance with all of the terms and
provisions set forth in the Financing Agreement and the other Loan Documents to
be observed or performed by such Company.

 

 

 
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3.2           Representations in Financing Agreement. The representations and
warranties of each Company set forth in the Financing Agreement and the other
Loan Documents are true and correct in all material respects except to the
extent that such representations and warranties relate solely to or are
specifically expressed as of a particular date or period which is past or
expired as of the date hereof.

 

3.3           No Event of Default. No Default or Event of Default exists.

 

ARTICLE IV

 

CONDITIONS PRECEDENT

 

4.1           Loan Documents. The Financing Agreement and the other Loan
Documents are amended to provide that any reference therein to the Financing
Agreement shall mean, unless otherwise specifically provided, the Financing
Agreement as amended hereby, and as further amended, restated, supplemented or
modified from time to time.

 

4.2           Conditions Precedent.

 

(a)          The deletion from the Financing Agreement of the defined term
Collection Days as described in Section 2.1(a) of this Amendment and the
amendments to the Financing Agreement contained in Sections 2.2 and 2.7 of this
Amendment shall become effective and deemed effective retroactively as of June
7, 2012 upon the receipt by CIT of this Amendment, duly executed by the
Companies.

 

(b)         The amendments to the Financing Agreement contained in this
Amendment, other than those described in Section 4.2(a) of this Amendment, shall
become effective and be deemed effective as of 12:00 a.m., Charlotte, North
Carolina time, July 11, 2013 (the “Effective Time”), provided the following
conditions precedent have been satisfied or waived by CIT:

 

(i)            CIT shall have received the following documents, each to be in
form and content satisfactory to CIT and its counsel:

 

(x)     this Amendment, duly executed by the Companies;

 

(y)     on July 10, 2013, an executed certificate from E. Randall Chestnut or
another officer of each Company acceptable to CIT, substantially in the form
attached hereto as Exhibit A certifying that as of the date thereof, after
giving effect to the effectiveness of this Amendment, (x) the representations
and warranties contained in the Financing Agreement are true and correct in all
material respects, (y) each Company is in compliance with all of the terms and
provisions set forth in the Financing Agreement and (z) no Default or Event of
Default exists; and

 

(z)     such other documents, instruments and agreements as CIT shall reasonably
request in connection with the foregoing matters.

 

(ii)           From the date of this Amendment through the Effective Time, there
shall not have occurred any event, condition or state of facts which would
reasonably be expected to have a Material Adverse Effect, as reasonably
determined by CIT; and

 

 

 
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(iii)          At the Effective Time, no Default or Event of Default exists.

 

For the avoidance of doubt, it is understood and agreed that if the conditions
precedent described in this Section 4.2(b) are not satisfied or waived by CIT by
the Effective Time, the amendments to the Financing Agreement contained in this
Amendment, other than those described in Section 4.2(a) of this Amendment, shall
be deemed to be null and void and of no further force and effect whatsoever.

 

ARTICLE V

 

GENERAL

 

5.1           Full Force and Effect. As expressly amended hereby, the Financing
Agreement and the other Loan Documents shall continue in full force and effect
in accordance with the provisions thereof. As used in the Financing Agreement
and the other Loan Documents, “hereinafter,” “hereto,” “hereof,” or words of
similar import, shall, unless the context otherwise requires, mean the Financing
Agreement or the other Loan Documents, as the case may be, as amended by this
Amendment.

 

5.2           Applicable Law. This Amendment shall be governed by and construed
in accordance with the internal laws and judicial decisions of the State of New
York.

 

5.3           Counterparts. This Amendment may be executed in one or more
counterparts, each of which shall constitute an original, but all of which when
taken together shall constitute but one and the same instrument. Delivery of an
executed counterpart of this Agreement by telefacsimile or by electronic
transmission in “pdf” or other imaging format shall be equally as effective as
delivery of an original executed counterpart of this Agreement.  Any party
delivering an executed counterpart of this Agreement by telefacsimile or
electronic transmission also shall deliver an original executed counterpart of
this Agreement but the failure to deliver an original executed counterpart shall
not affect the validity, enforceability and binding effect of this Agreement.

 

5.4           Further Assurances. The Companies shall execute and deliver to CIT
such documents, certificates and opinions as CIT may reasonably request to
effect the amendments contemplated by this Amendment.

 

5.5           Headings. The headings of this Amendment are for the purpose of
reference only and shall not effect the construction of this Amendment.

 

5.6           Expenses. The Companies shall reimburse CIT for CIT’s legal fees
and expenses (whether in-house or outside) incurred in connection with the
preparation, negotiation, execution and delivery of this Amendment and all other
agreements and documents contemplated hereby.

 

 

 
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5.7           Waiver of Jury Trial.     TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, EACH COMPANY AND CIT WAIVE THE RIGHT TO TRIAL BY JURY IN ANY
ACTION, SUIT, PROCEEDING OR COUNTERCLAIM OF ANY KIND ARISING OUT OF OR RELATED
TO THIS AMENDMENT, THE FINANCING AGREEMENT OR THE OTHER LOAN DOCUMENTS OR THE
TRANSACTIONS RELATED HERETO OR THERETO.

 

[signatures on next page]

 

 

 
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed
and delivered by their duly authorized officers to be effective on the day and
year first above written.

 

 

COMPANIES:

CROWN CRAFTS, INC.

HAMCO, INC.

CROWN CRAFTS INFANT PRODUCTS, INC.

                By: /s/ Olivia Elliott       Olivia Elliott      

CFO

       

CIT:

THE CIT GROUP/COMMERCIAL SERVICES, INC.

By: /s/ Vernon Wells

Vernon Wells

Vice President