Document:

exv10w1

 

Exhibit 10.1

SEVENTH AMENDMENT TO CREDIT AGREEMENT

     THIS SEVENTH AMENDMENT TO CREDIT AGREEMENT (this “Seventh Amendment”) is dated as of the
4th day of February, 2005 among CROWN CRAFTS, INC., CHURCHILL WEAVERS, INC., HAMCO, INC. and CROWN
CRAFTS INFANT PRODUCTS, INC. (collectively, the “Borrowers”), WACHOVIA BANK, NATIONAL ASSOCIATION
(successor by merger to Wachovia Bank, N.A.), as Agent (the “Agent”) and WACHOVIA BANK, NATIONAL
ASSOCIATION (successor by merger to Wachovia Bank, N.A.), BANC OF AMERICA STRATEGIC SOLUTIONS, INC.
(assignee of Bank of America, N.A.) and THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, as Lenders
(collectively, the “Lenders”);

W I T N E S S E T H:

     WHEREAS, the Borrowers, the Agent and the Lenders executed and delivered that certain Credit
Agreement, dated as of July 23, 2001, as amended by First Amendment to Credit Agreement dated as of
September 28, 2001, Second Amendment to Credit Agreement dated as of November 25, 2002, Third
Amendment to Credit Agreement dated as of February 10, 2003, Global Amendment Agreement dated as of
April 29, 2003, Fifth Amendment to Credit Agreement dated as of August 1, 2003 and Sixth Amendment
to Credit Agreement dated as of December 16, 2003 (as so amended, the “Credit Agreement”);

     WHEREAS, the Borrowers, the Agent and the Lenders have agreed to certain amendments to the
Credit Agreement to change certain financial covenants contained therein, 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 Borrowers, the Agent and the Lenders 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. Amendment to SECTION 5.20(a). SECTION 5.20(a) hereby is deleted in its entirety,
and the following is substituted therefor:

 

 

     (a) Minimum EBITDA. Consolidated EBITDA shall not be less than, for each
Fiscal Quarter set forth below and the 3 immediately preceding Fiscal Quarters, the amount
set forth below corresponding to such Fiscal Quarter:

	 	 	 	 	 	 
	 
	 	Fiscal Quarter Ending	 	 	Minimum EBITDA	 
	 	December 26, 2004
	 	 	$7,000,000	 
	 	 	 	 	 	 
	 	April 3, 2005 through January 1, 2006
	 	 	$5,500,000	 
	 	 	 	 	 	 
	 	April 2, 2006
	 	 	$5,800,000	 
	 	 	 	 	 	 
	 	July 2, 2006 and each Fiscal Quarter thereafter
	 	 	$6,400,000	 
	 	 	 	 	 	 
	 

     3. Amendment to SECTION 5.20(b). SECTION 5.20(b) hereby is deleted in its
entirety, and the following is substituted therefor:

     (b) Debt/EBITDA Ratio. The Debt/EBITDA Ratio will not exceed, at the end
of each Fiscal Quarter set forth below, calculated as to Debt as of such Fiscal Quarter and
calculated as to Consolidated EBITDA for such Fiscal Quarter and the 3 immediately preceding
Fiscal Quarters, the ratio set forth below corresponding to such Fiscal Quarter :

	 	 	 	 	 	 
	 
	 	Fiscal Quarter Ending	 	 	Maximum Debt/EBITDA Ratio	 
	 	December 26, 2004
	 	 	4.00 to 1.00	 
	 	 	 	 	 	 
	 	April 3, 2005 through October 2, 2005
	 	 	5.00 to 1.0	 
	 	 	 	 	 	 
	 	January 1, 2006 through July 2, 2006
	 	 	4.75 to 1.00	 
	 	 	 	 	 	 
	 	October 1, 2006 and December 31, 2006
	 	 	4.50 to 1.00	 
	 	 	 	 	 	 
	 	April 1, 2007 and each Fiscal Quarter thereafter
	 	 	4.00 to 1.00	 
	 	 	 	 	 	 
	 

     4. Amendment to SECTION 5.20(d). SECTION 5.20(d) hereby is deleted in its
entirety, and the following is substituted therefor:

2

 

(d) EBITDA/Cash Interest Ratio. The EBITDA/Cash Interest Ratio will not be
less than, at the end of each Fiscal Quarter set forth below, for such Fiscal Quarter and
the 3 immediately preceding Fiscal Quarters, the amount set forth below corresponding to
such Fiscal Quarter:

	 	 	 	 	 	 
	 
	 	 	 	 	Minimum EBITDA/Cash Interest	 
	 	Fiscal Quarter Ending	 	 	Ratio	 
	 	December 26, 2004
	 	 	2.50 to 1.0	 
	 	 	 	 	 	 
	 	April 3, 2005 and July 3, 2005
	 	 	2.00 to 1.0	 
	 	 	 	 	 	 
	 	October 2, 2005 and January 1, 2006
	 	 	2.25 to 1.0	 
	 	 	 	 	 	 
	 	April 2, 2006 and each Fiscal Quarter thereafter
	 	 	2.75 to 1.00	 
	 	 	 	 	 	 
	 

     5. Amendment to Exhibit G (Compliance Certificate). Exhibit G to the
Credit Agreement hereby is deleted in its entirety, and Exhibit G attached hereto is substituted
therefor.

     6. Restatement of Representations and Warranties. The Borrowers hereby restate and
renew each and every representation and warranty heretofore made by them in the Credit Agreement
and the other Loan Documents as fully as if made on the date hereof (except where reference is
expressly made to a specific date, in which case such representation or warranty is true as of such
earlier date) and with specific reference to this Seventh Amendment and all other loan documents
executed and/or delivered in connection herewith.

     7. 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 Borrowers. The
amendments contained herein shall be deemed to have prospective application only, unless otherwise
specifically stated herein.

     8. Ratification. The Borrowers hereby restate, ratify and reaffirm each and every
term, covenant and condition set forth in the Credit Agreement and the other Loan Documents
effective as of the date hereof.

     9. Counterparts. This Seventh 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 (which may be by facsimile) shall be deemed to be an original and all of which
counterparts, taken together, shall constitute but one and the same instrument.

     10. Section References. Section titles and references used in this Seventh 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.

     11. No Default. To induce the Agent and the Lenders to enter into this Seventh
Amendment and to continue to make advances pursuant to the Credit Agreement, the Borrowers hereby
acknowledge and agree that, as of the date hereof, and after giving effect to the terms

3

 

hereof, there exists (i) no Default or Event of Default and (ii) no right of offset, defense,
counterclaim, claim or objection in favor of the Borrowers arising out of or with respect to any of
the Loans or other obligations of the Borrowers owed to the Lenders under the Credit Agreement.

     12. Further Assurances. The Borrowers agree to take such further actions as the Agent
shall reasonably request in connection herewith to evidence the amendments herein contained.

     13. Governing Law. This Seventh Amendment shall be governed by and construed and
interpreted in accordance with, the laws of the State of Georgia.

     14. Conditions Precedent. This Seventh Amendment shall become effective only upon (i)
execution and delivery (including by facsimile) of this Seventh Amendment by each of the parties
hereto and (ii) payment to the Agent, for the ratable benefit of the Lenders, of an amendment fee
in the amount of $25,000.

[SIGNATURES COMMENCE ON NEXT PAGE.]

4

 

     IN WITNESS WHEREOF, the Borrowers, the Agent and each of the Lenders has caused this Seventh
Amendment to be duly executed, under seal, by its duly authorized officer as of the day and year
first above written.

	 	 	 	 	 	 	 	 	 	 	 
	 	 	CROWN CRAFTS, INC.,	 	(SEAL)
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	/s/ E. Randall Chestnut	 	 	 	 
	 	 	 	 	 	 	 	 	 
	

	 	 	 	Name:
	 	E. Randall Chestnut	 	 	 	 
	

	 	 	 	 	 	 	 	 	 	 
	

	 	 	 	Title:
	 	President and CEO	 	 	 	 
	

	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	CHURCHILL WEAVERS, INC.,

HAMCO, INC.

CROWN CRAFTS INFANT

        PRODUCTS, INC.	 	(SEAL)
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	/s/ Amy Vidrine Samson	 	 	 	 
	 	 	 	 	 	 	 	 	 
	

	 	 	 	Name:
	 	Amy Vidrine Samson	 	 	 	 
	

	 	 	 	 	 	 	 	 	 	 
	

	 	 	 	Title:
	 	Vice President	 	 	 	 
	

	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	WACHOVIA BANK, NATIONAL

ASSOCIATION (successor by merger

to Wachovia Bank, N.A.),

as Agent and as a Lender	 	(SEAL)

	 
	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	/s/ Monica H. Cole	 	 	 	 
	 	 	 	 	 	 	 	 	 
	

	 	 	 	Name:
	 	Monica H. Cole	 	 	 	 
	

	 	 	 	 	 	 	 	 	 	 
	

	 	 	 	Title:
	 	Director	 	 	 	 
	

	 	 	 	 	 	 	 	 	 	 

5

 

	 	 	 	 	 	 	 	 	 	 	 
	 	 	BANC OF AMERICA
STRATEGIC SOLUTIONS, 

INC.
(assignee of Bank of America, N.A.), (SEAL)

as a Lender	 	 

	 
	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	/s/ Kevin Behan	 	 	 	 
	 	 	 	 	 	 	 	 	 
	

	 	 	 	Name:
	 	Kevin Behan	 	 	 	 
	

	 	 	 	 	 	 	 	 	 	 
	

	 	 	 	Title:
	 	Senior Vice President	 	 	 	 
	

	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	THE PRUDENTIAL INSURANCE (SEAL)

COMPANY OF AMERICA, as a Lender	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	/s/ Billy Greer	 	 	 	 
	 	 	 	 	 	 	 	 	 
	

	 	 	 	Name:
	 	Billy B. Greer	 	 	 	 
	

	 	 	 	 	 	 	 	 	 	 
	

	 	 	 	Title:
	 	Senior Vice President	 	 	 	 
	

	 	 	 	 	 	 	 	 	 	 

6

 

EXHIBIT G

COMPLIANCE CERTIFICATE

     Reference is made to the Credit Agreement dated as of July 23, 2001, as amended by First
Amendment to Credit Agreement dated as of September 28, 2001, Second Amendment to Credit Agreement
dated as of November 25, 2002, Third Amendment to Credit Agreement dated as of February 10, 2003,
Global Amendment Agreement dated as of April 29, 2003, Fifth Amendment to Credit Agreement dated as
of August 1, 2003, Sixth Amendment to Credit Agreement dated as of December 16, 2003 and Seventh
Amendment to Credit Agreement dated as of February 4, 2005 (as so amended and as thereafter
modified and supplemented and in effect from time to time, the “Credit Agreement”) by and among
Crown Crafts, Inc., Churchill Weavers, Inc., Hamco, Inc. and Crown Crafts Infant Products, Inc.
(collectively or individually, as the context shall require, the “Borrowers”), the Lenders from
time to time parties thereto, and Wachovia Bank, National Association (successor by merger to
Wachovia Bank, N.A.), as Agent. Capitalized terms used herein shall have the meanings ascribed
thereto in the Credit Agreement.

     Pursuant to SECTION 5.01(c) of the Credit Agreement, __________________, the duly authorized
__________________of the Borrowers, hereby certifies to the Agent and the Lenders that, as of the date
hereof, (i) the information contained in the Compliance Certificate attached hereto is true,
accurate and complete in all material respects and (ii) no Default is in existence. Fiscal periods
that have passed and previously have been tested prior to the Seventh Amendment to Credit Agreement
referred to above have been omitted from the information attached hereto.

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	CROWN CRAFTS, INC.	 	 	 	 	 	CHURCHILL WEAVERS, INC.

HAMCO, INC.

CROWN CRAFTS INFANT PRODUCTS, INC.
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	By:

	 	                                        
	 	(SEAL)
	 	 	 	By:
	 	                                        
	 	(SEAL)	 	 	 	 	 	 
	

	 	Name:
	 	 	 	 	 	 	 	Name:	 	 	 	 	 	 	 	 
	

	 	Title:
	 	 	 	 	 	 	 	Title:	 	 	 	 	 	 	 	 

7

 

CROWN CRAFTS, INC.

COMPLIANCE CHECKLIST

1. Minimum EBITDA (Section 5.20(a))

    (a)    Minimum EBITDA. Consolidated EBITDA shall not be less than, for each
Fiscal Quarter set forth below and the 3 immediately preceding Fiscal Quarters, the amount
set forth below corresponding to such Fiscal Quarter:

	 	 	 	 	 	 
	 
	 	Fiscal Quarter Ending	 	 	Minimum EBITDA	 
	 	December 26, 2004
	 	 	$7,000,000	 
	 	 	 	 	 	 
	 	April 3, 2005 through January 1, 2006
	 	 	$5,500,000	 
	 	 	 	 	 	 
	 	April 2, 2006
	 	 	$5,800,000	 
	 	 	 	 	 	 
	 	July 2, 2006 and each Fiscal Quarter thereafter
	 	 	$6,400,000	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 
	(a)

	 	Consolidated EBITDA
	 	Schedule 1
	 	$                    
	 
	 	 	 	 	 	 
	Minimum Consolidated EBITDA	 	 	 	[$7,000,000]
	

	 	 	 	 	 	[$5,500,000]
	

	 	 	 	 	 	[$5,800,000]
	

	 	 	 	 	 	[$6,400,000]

2. Debt/EBITDA Ratio (Section 5.20(b))

    (b)    Debt/EBITDA Ratio. The Debt/EBITDA Ratio will not exceed, at the end of
each Fiscal Quarter set forth below, calculated as to Debt as of such Fiscal Quarter and
calculated as to Consolidated EBITDA for such Fiscal Quarter and the 3 immediately preceding
Fiscal Quarters, the ratio set forth below corresponding to such Fiscal Quarter :

8

 

	 	 	 	 	 	 
	 
	 	Fiscal Quarter Ending	 	 	Maximum Debt/EBITDA Ratio	 
	 	December 26, 2004
	 	 	4.00 to 1.00	 
	 	 	 	 	 	 
	 	April 3, 2005 through October 2, 2005
	 	 	5.00 to 1.0	 
	 	 	 	 	 	 
	 	January 1, 2006 through July 2, 2006
	 	 	4.75 to 1.00	 
	 	 	 	 	 	 
	 	October 1, 2006 and December 31, 2006
	 	 	4.50 to 1.00	 
	 	 	 	 	 	 
	 	April 1, 2007 and each Fiscal Quarter thereafter
	 	 	4.00 to 1.00	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 
	(a)
	 	Consolidated Debt
	 	Schedule 2	 	$                    
	 
	 	 	 	 	 	 
	(b)

	 	Consolidated EBITDA
	 	Schedule 1
	 	$                    
	 
	 	 	 	 	 	 
	(c)

	 	actual ratio of (a) to (b)
	 	 	 	___to 1.00
	 
	 	 	 	 	 	 
	

	 	 	 	Limitation:
	 	(c) may not exceed [4.00 to 1.0]
	

	 	 	 	 	 	[5.00 to 1.0]
	

	 	 	 	 	 	[4.75 to 1.0]
	

	 	 	 	 	 	[4.50 to 1.0]
	

	 	 	 	 	 	[4.00 to 1.0]

3.       Senior Debt/EBITDA Ratio (Section 5.20(c))

The Senior Debt/EBITDA Ratio will not exceed, at the end of each Fiscal Quarter set forth
below, calculated as to Senior Debt as of such Fiscal Quarter and calculated as to
Consolidated EBITDA for such Fiscal Quarter and the 3 immediately preceding Fiscal Quarters,
the ratio set forth below corresponding to such Fiscal Quarter:

	 	 	 	 	 	 
	 
	 	 	 	 	Maximum
Senior
	 
	 	Fiscal Quarter Ending
	 	 	Debt/EBITDA Ratio
	 
	 	December 26,
2004

	 	 	1.75
to 1.0
	 
	 	 	 	 	 	 
	 	April 3, 2005 and
thereafter

	 	 	1.50
to 1.00
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 
	(a)

	 	Consolidated Senior Debt
	 	Schedule 2
	 	$                    
	 
	 	 	 	 	 	 
	(b)

	 	Consolidated EBITDA
	 	Schedule 1
	 	$                    

9

 

	 	 	 	 	 	 	 
	(c)

	 	actual ratio of (a) to (b)
	 	 	 	___to 1.00
	 
	 	 	 	 	 	 
	

	 	 	 	Limitation:
	 	(c) may not exceed [1.75 to 1.0]
	

	 	 	 	 	 	[1.50 to 1.0]

4.
     EBITDA/Cash Interest Ratio (Section 5.20(d))

The EBITDA/Cash Interest Ratio will not be less than, at the end of each Fiscal Quarter set
forth below, for such Fiscal Quarter and the 3 immediately preceding Fiscal Quarters, the
amount set forth below corresponding to such Fiscal Quarter:

	 	 	 	 	 	 
	 
	 	 	 	 	Minimum EBITDA/Cash Interest	 
	 	Fiscal Quarter Ending	 	 	Ratio	 
	 	December 26, 2004
	 	 	2.50 to 1.0	 
	 	 	 	 	 	 
	 	April 3, 2005 and July 3, 2005
	 	 	2.00 to 1.0	 
	 	 	 	 	 	 
	 	October 2, 2005 and January 1, 2006
	 	 	2.25 to 1.0	 
	 	 	 	 	 	 
	 	April 2, 2006 and each Fiscal Quarter
thereafter
	 	 	2.75 to 1.00	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 
	(a)

	 	Consolidated EBITDA
	 	Schedule 1
	 	$                    
	 
	 	 	 	 	 	 
	(b)

	 	Cash Interest
	 	Schedule 3
	 	$                    
	 
	 	 	 	 	 	 
	(c)

	 	actual ratio of (a) to (b)
	 	 	 	___to 1.00
	 
	 	 	 	 	 	 
	

	 	 	 	Limitation:
	 	(c) may not exceed [2.50 to 1.0]
	

	 	 	 	 	 	[2.00 to 1.0]
	

	 	 	 	 	 	[2.25 to 1.0]
	

	 	 	 	 	 	[2.75 to 1.0]

5.     Minimum Stockholders’ Equity (Section 5.20(e))

As of the end of each Fiscal Quarter, Stockholders’ Equity will not be less than the sum of
(i) Stockholders’ Equity as of the Closing Date (after giving effect to the sale of its
adult bedding line of business to its former management) plus (ii) 75% of the cumulative
(since the Closing Date) Reported Net Income (excluding any Fiscal Quarter during which
Reported Net Income is less than $0.00) of the Parent and the Subsidiaries.

	 	 	 	 	 	 	 
	(a)

	 	Stockholders’Equity
	 	 	 	$                    
	 
	 	 	 	 	 	 
	(b)

	 	Cumulative positive Reported
Net Income since the Closing Date	 	 	 	$                    
	 
	 	 	 	 	 	 
	(c)

	 	75% of (b)
	 	 	 	$                    
	 
	 	 	 	 	 	 

10

 

	 	 	 	 	 	 	 
	(d)

	 	sum of (c) and $                    1
	 	 	 	$                    
	 
	 	 	 	 	 	 
	

	 	Limitation:      (a) must not be less than (d)	 	 	 	 

6. Capital Expenditures (Section 5.20(f))

No Borrower shall, nor shall it permit any Subsidiary to, make any expenditures (including
obligations incurred under any lease) in any Fiscal Year that are required to be capitalized
under GAAP in the aggregate for any Borrower and the Subsidiaries, on a consolidated basis,
exceeding $500,000.

	 	 	 	 	 	 	 
	(a)

	 	aggregate Capital
Expenditures made to date in current Fiscal Year	 	 	 	$                    
	 
	 	 	 	 	 	 
	

	 	Limitation:      (a) may not exceed $500,000	 	 	 	 

	1	  Insert amount of Stockholders’ Equity as of
the Closing Date

11

 

7. Operating Leases (Section 5.20(g))

No Borrower shall, nor shall it permit any Subsidiary to, enter into or remain or become
liable upon any lease (other than intercompany leases between the Borrower and its
Subsidiaries) which would be characterized as an operating lease under GAAP if the aggregate
amount of all consolidated rents paid by the Borrower and its Subsidiaries under all such
leases would exceed $3,000,000 in the first Fiscal Year following the Closing Date, with
such amount increasing each Fiscal Year thereafter by an additional 5% of the amount in
effect at the end of the preceding Fiscal Year.

	 	 	 	 	 	 	 
	(a)

	 	aggregate amount of
consolidated rents payable in current Fiscal Year	 	 	 	$                    
	 
	 	 	 	 	 	 
	

	 	Limitation:      (a) may not exceed [$3,000,000]2	 	 	 	 

	2	 	Increase after the first Fiscal Year by an
additional 5% of the amount in effect at the end of the preceding Fiscal Year

12

 

Schedule 1

CONSOLIDATED EBITDA

	 	 	 	 	 
	(a)

	 	Consolidated Net Income for:	 	 
	 
	

	 	___quarter ___
	 	$                    
	 
	

	 	___quarter ___
	 	$                    
	 
	

	 	___quarter ___
	 	$                    
	 
	

	 	___quarter ___
	 	$                    
	 
	 
	 	 	 	 
	(b)

	 	depreciation and amortization expenses for:	 	 
	 
	

	 	___quarter ___
	 	$                    
	 
	

	 	___quarter ___
	 	$                    
	 
	

	 	___quarter ___
	 	$                    
	 
	

	 	___quarter ___
	 	$                    
	 
	 
	 	 	 	 
	 
	(c)

	 	Consolidated Interest Expense for:	 	 
	 
	

	 	___quarter ___
	 	$                    
	 
	

	 	___quarter ___
	 	$                    
	 
	

	 	___quarter ___
	 	$                    
	 
	

	 	___quarter ___
	 	$                    
	 
	 
	 	 	 	 
	 
	(d)

	 	income tax expense included in
Consolidated Net Income for:	 	 
	 
	

	 	___quarter ___
	 	$                    
	 
	

	 	___quarter ___
	 	$                    
	 
	

	 	___quarter ___
	 	$                    
	 
	

	 	___quarter ___
	 	$                    

13

 

Schedule 2

CONSOLIDATED DEBT AND CONSOLIDATED SENIOR DEBT

CONSOLIDATED DEBT3

	 	 	 	 	 
	(a)

	 	obligations for borrowed money
	 	$                    
	 
	 	 	 	 
	(b)

	 	payment obligations evidenced by bonds, debentures

notes or other similar instruments
	 	$                    
	 
	 	 	 	 
	(c)

	 	obligations to pay the deferred purchase price of
property or services, except trade accounts payable
and accrued expenses arising in the ordinary course
of business
	 	$                    
	 
	 	 	 	 
	(d)

	 	obligations as lessee under capital leases or leases
for which the Borrowers Person retain tax ownership
of the property subject to a lease
	 	$                    
	 
	 	 	 	 
	(e)

	 	obligations to reimburse any bank or other Person in
respect of amounts payable under a banker’s
acceptance
	 	$                    
	 
	 	 	 	 
	(f)

	 	Redeemable Preferred Stock
	 	$                    
	 
	 	 	 	 
	(g)

	 	obligations to reimburse any bank or other Person in
respect of amounts paid or undrawn amounts available
to be paid under a letter of credit or similar
instrument
	 	$                    
	 
	 	 	 	 
	(h)

	 	Debt of others secured by a Lien on any asset of any
Borrower, whether or not such Debt is assumed by
such Borrower
	 	$                    
	 
	 	 	 	 
	(i)

	 	obligations with respect to interest rate protection
agreements, foreign currency exchange agreements or
other hedging arrangements, other than commodity
hedging agreements entered into as risk protection
rather than as an investment (each valued as the
termination value thereof computed in accordance
with a method approved by the International Swap
Dealers Association and agreed to in the applicable
agreement, if any)
	 	$                    

	3	 	Exclude Contingent Interest and amounts
payable pursuant to SECTION 2.06(a) of the Senior Subordinated Notes Purchase
Agreement

14

 

	 	 	 	 	 
	(j)

	 	Debt of others Guaranteed by any Borrower
	 	$                    
	 
	 	 	 	 
	(k)

	 	CONSOLIDATED DEBT (sum of (a) through (i))
	 	$                    
	 
	 	 	 	 
	

	 	CONSOLIDATED SENIOR DEBT	 	 
	 
	 	 	 	 
	(l)

	 	Subordinated Debt
	 	$                    
	 
	 	 	 	 
	(m)

	 	CONSOLIDATED SENIOR DEBT ((j) less (k))
	 	$                    

15

 

Schedule 3

CASH INTEREST

	 	 	 	 	 
	(a)

	 	interest on Revolving Loans
	 	$                    
	 
	 	 	 	 
	(b)

	 	interest on Term Loans at Cash Contract Rate
	 	$                    
	 
	 	 	 	 
	(c)

	 	interest on Senior Subordinated Debt
	 	$                    
	 
	 	 	 	 
	(d)

	 	CASH INTEREST (sum of (a), plus (b), plus (c))
	 	$                    

16exv10w2

 

Exhibit 10.2

FIFTH AMENDMENT

OF

SUBORDINATED NOTE AND WARRANT PURCHASE AGREEMENT

     This Fifth Amendment, dated effective as of February 4, 2005, by and among CROWN CRAFTS, INC.
(the “Company”), and BANC OF AMERICA STRATEGIC SOLUTIONS, INC. (assignee of Bank of America, N.A.),
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, and WACHOVIA BANK, NATIONAL ASSOCIATION (successor by
merger to Wachovia Bank, N.A.) (collectively, the “Purchasers”).

     WHEREAS, the parties hereto have executed and delivered that certain Subordinated Note and
Warrant Purchase Agreement dated as of July 23, 2001, as amended by First Amendment of Subordinated
Note and Warrant Purchase Agreement dated as of September 28, 2001, Second Amendment of
Subordinated Note and Warrant Purchase Agreement dated as of February 10, 2003, Global Amendment
Agreement dated as of April 29, 2003 and Fourth Amendment of Subordinated Note and Warrant Purchase
Agreement dated as of August 1, 2003(as so amended, the “Purchase Agreement”);

     WHEREAS, the Company has requested a modification of, among other things, the financial
covenants under the Purchase Agreement;

     WHEREAS, the Purchasers are 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 Purchase 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 Purchase Agreement.

     lA. Section 8.01(a) of the Purchase Agreement. Section 8.01(a) of the Purchase Agreement is
amended by deleting it in its entirety and substituting the following therefor:

     (a) Minimum EBITDA . Consolidated EBITDA shall not be less than, at the end
of each Fiscal Quarter, for such Fiscal Quarter and the 3 immediately preceding Fiscal
Quarters, the amount set forth below corresponding to such Fiscal Quarter:

 

 

	 	 	 	 	 	 
	 
	 	Fiscal Quarter Ending	 	 	Minimum EBITDA	 
	 	December 26, 2004
	 	 	$7,000,000	 
	 	 	 	 	 	 
	 	April 3, 2005 through January 1, 2006
	 	 	$5,500,000	 
	 	 	 	 	 	 
	 	April 2, 2006
	 	 	$5,800,000	 
	 	 	 	 	 	 
	 	July 2, 2006 and each Fiscal Quarter thereafter
	 	 	$6,400,000	 
	 	 	 	 	 	 
	 

     lB. Section 8.01(b) of the Purchase Agreement. Section 8.01(b) of the Purchase Agreement
is amended by deleting it in its entirety and substituting the following therefor:

     (b) Debt/EBITDA Ratio. The Debt/EBITDA Ratio will not exceed, at the end
of each Fiscal Quarter set forth below, calculated as to Debt as of such Fiscal Quarter and
calculated as to Consolidated EBITDA for such Fiscal Quarter and the 3 immediately preceding
Fiscal Quarters, the ratio set forth below corresponding to such Fiscal Quarter :

	 	 	 	 	 	 
	 
	 	Fiscal Quarter Ending	 	 	Maximum Debt/EBITDA Ratio	 
	 	December 26, 2004
	 	 	4.00 to 1.00	 
	 	 	 	 	 	 
	 	April 3, 2005 through October 2, 2005
	 	 	5.00 to 1.0	 
	 	 	 	 	 	 
	 	January 1, 2006 through July 2, 2006
	 	 	4.75 to 1.00	 
	 	 	 	 	 	 
	 	October 1, 2006 and December 31, 2006
	 	 	4.50 to 1.00	 
	 	 	 	 	 	 
	 	April 1, 2007 and each Fiscal Quarter thereafter
	 	 	4.00 to 1.00	 
	 	 	 	 	 	 
	 

     lC. Section 8.01(d) of the Purchase Agreement. Section 8.01(d) of the Purchase Agreement
is amended by deleting it in its entirety and substituting the following therefor:

2

 

     (d) EBITDA/Cash Interest Ratio. The EBITDA/Cash Interest Ratio will not be less
than, at the end of each Fiscal Quarter set forth below, for such Fiscal Quarter and the 3
immediately preceding Fiscal Quarters, the amount set forth below corresponding to such
Fiscal Quarter:

	 	 	 	 	 	 
	 
	 	 	 	 	Minimum EBITDA/Cash Interest	 
	 	Fiscal Quarter Ending	 	 	Ratio	 
	 	December 26, 2004
	 	 	2.50 to 1.0	 
	 	 	 	 	 	 
	 	April 3, 2005 and July 3, 2005
	 	 	2.00 to 1.0	 
	 	 	 	 	 	 
	 	October 2, 2005 and January 1, 2006
	 	 	2.25 to 1.0	 
	 	 	 	 	 	 
	 	April 2, 2006 and each Fiscal Quarter
thereafter
	 	 	2.75 to 1.00	 
	 	 	 	 	 	 
	 

	2.  	Conditions of Effectiveness. This Amendment shall be effective as of the date first set
forth above (the “Effective Date”), upon the satisfaction of the following conditions:

	 	(a)  	the Purchasers shall have received executed originals, satisfactory to the
Required Holders in all respects, of this Amendment and the Seventh Amendment to the
Credit Agreement, dated as of even date herewith, among the Company, Churchill Weavers,
Inc., Hamco, Inc. and Crown Crafts Infant Products, Inc., as borrowers, Wachovia Bank,
National Association (successor by merger to Wachovia Bank, N.A.), as agent, and
Wachovia Bank, National Association (successor by merger to Wachovia Bank, N.A.), Banc
of America Strategic Solutions, Inc. (assignee of Bank of America, N.A.) and The
Prudential Insurance Company of America, as lenders, each agreement being dated the
Effective Date, in form and substance satisfactory to the Purchasers.
	 
	 	(b)  	The Company shall have paid all costs and expenses (including attorney’s fees
and expenses) incurred by any Purchaser through the Effective Date, 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).
	 
	 	(c)  	The representations and warranties contained herein shall be true on and as of
the date hereof; there shall exist on the date hereof, after giving effect to this
Amendment, no Event of Default or Default; there shall exist no material adverse change
in the business, properties, prospects, operations or condition, financial or
otherwise, of the Company or its Subsidiaries since March 28, 2004 other than as
reported by the Company in its quarterly reports on Form 10-Q filed with the Securities
and Exchange Commission for quarterly periods subsequent to March

3

 

	 	   	28, 2004; and the Company shall have delivered to the Purchasers a certificate
signed by a senior officer of the Company to such effect.

	3.  	Representations, Warranties and Covenants.

	 	(a)  	The Company hereby restates and renews each of the representations and
warranties made by it in the Purchase Agreement, as amended hereby, as though made on
and as of the date hereof (except where reference is expressly made to a specific date,
in which case such representation or warranty is true as of such earlier date), with
each reference therein to “this Agreement”, “hereof’, “hereunder”, “thereof’,
“thereunder” and words of like import being deemed to be a reference to the Purchase
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 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 the
properties of the Company or any of its Subsidiaries.
	 
	 	(ii)  	No governmental approval is required for the due execution,
delivery and performance by the Company of this Amendment, 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.
	 
	 	(iii)  	Each of this Amendment and the Notes constitutes the legal,
valid and binding obligations of the Company enforceable against the Company in
accordance with their respective 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 effect
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 Purchase Agreement, as amended by this
Amendment.

	4.  	Miscellaneous.

     4A. Reference to and Effect on the Purchase Agreement. (a) Upon the effectiveness of this
Amendment, on and after the date hereof each reference in the Purchase Agreement to “this
Agreement”, “hereunder”, “hereof’ or words of like import referring to the Purchase Agreement, and
each reference in any other document to “the Purchase Agreement”,

4

 

“thereunder”, “thereof’ or words of like import referring to the Purchase Agreement, shall
mean and be a reference to the Purchase Agreement, as amended hereby.

     (b) Except as specifically amended above, the Purchase Agreement, 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 Purchase Agreement or the Notes, nor constitute a waiver of any provision of any of the
foregoing.

     4B. Costs and Expenses. The Company agrees to pay on demand all costs and expenses incurred
by the Purchasers or any other 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 the
Purchasers or any other 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 4B.

     4C. 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.

     4D. Governing Law. This Amendment shall be governed by, and construed in accordance with, the
laws of the State of New York.

     4E. No Default or Claims. To induce the Purchasers 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, there exists (i) no Default or Event of Default, (ii) no right of offset, recoupment,
defense, counterclaim, claim or objection 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) each
Purchaser 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 Purchase Agreement, the Company hereby waiving
and releasing any such claims to the contrary that may exist as of the date of this Amendment.

5

 

     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
	 	/s/ E. Randall Chestnut

	

	 	 	 	Name: E. Randall Chestnut
	

	 	 	 	Title: President & CEO
	 
	 	 	 	 
	 	 	BANC OF AMERICA STRATEGIC SOLUTIONS, INC.
(assignee of Bank Of America, N.A.)
	 
	 	 	 	 
	

	 	By
	 	/s/ Kevin Behan

	

	 	 	 	Name: Kevin Behan

	

	 	 	 	Title: Senior Vice President
	 
	 	 	 	 
	 	 	THE PRUDENTIAL INSURANCE

   COMPANY OF AMERICA
	 
	 	 	 	 
	

	 	By
	 	/s/ Billy Greer

	

	 	 	 	Name: Billy B. Greer

	

	 	 	 	Title: Senior Vice President
	 
	 	 	 	 
	 	 	WACHOVIA BANK, NATIONAL ASSOCIATION (successor by
merger to Wachovia Bank, N.A.)
	 
	 	 	 	 
	

	 	By
	 	/s/ Monica H. Cole

	

	 	 	 	Name: Monica H. Cole
	

	 	 	 	Title: Director

6

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00077-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00077-of-00352.parquet"}]]