Document:

exv10w1

 

Exhibit 10.1

NONCOMPETITION AND NON-DISCLOSURE AGREEMENT

     THIS NONCOMPETITION AND NON-DISCLOSURE AGREEMENT (the “Agreement”) is made and entered
into as of the 5th day of November, 2007, by and between SPRINGS GLOBAL US, INC., a Delaware
corporation (“Seller”), and CROWN CRAFTS INFANT PRODUCTS, INC., a Delaware corporation
(“Purchaser”).

     WHEREAS, Seller is engaged in the business of designing, marketing, importing, selling and
distributing various types of bedding, blanket and bath products and related accessories for the
Infant and Toddler Retail Market (as defined herein) through Seller’s unincorporated baby product
line (the “Business”);

     WHEREAS, Seller and Purchaser have entered into that certain Asset Purchase Agreement of even
date herewith, to which a form of this Agreement is attached as Exhibit D, relating to the
sale to Purchaser of certain of Seller’s assets, rights and properties relating to the Business
(the “Purchase Agreement”);

     WHEREAS, in order to protect the goodwill of the Purchased Assets (as defined in the Purchase
Agreement) and the Business and the other value to be acquired by Purchaser pursuant to the
Purchase Agreement for which Purchaser is paying substantial consideration, Purchaser and Seller
have agreed that Purchaser’s obligation to consummate the transactions contemplated by the Purchase
Agreement is subject to the condition, among others, that Seller shall have entered into this
Agreement;

     WHEREAS, Purchaser has separately bargained and paid additional consideration for the
covenants contained herein;

     WHEREAS, Seller acknowledges that the provisions of this Agreement are reasonable and
necessary to protect the legitimate interest of Purchaser and the business and goodwill acquired by
it pursuant to the Purchase Agreement; and

     WHEREAS, in order to induce Purchaser to consummate the transactions contemplated by the
Purchase Agreement, Seller is willing to enter into this Agreement;

     NOW, THEREFORE, in consideration of the premises and the mutual covenants set forth herein,
the parties agree as follows:

     1. Definitions. As used in this Agreement, terms defined in the preamble and
recitals of this Agreement shall have the meanings set forth therein and the following terms shall
have the meanings set forth below:

          (a) “Competitive Business” shall mean any Person engaged in the business of designing,
marketing or importing Competitive Products for sale or distribution to the Infant and Toddler
Retail Market.

          (b) “Competitive Products” shall mean the type of products designed, marketed,
imported, and sold or distributed by Seller to the Infant and Toddler Retail Market in connection
with the operation of the Business prior to the date hereof (which shall not include

 

 

any Seller Exclusive Products (as hereinafter defined)) without regard to (i) the prices at
which such products may be sold, (ii) any tradenames, trademarks, brands, labels, logos or other
identifying characteristics used in selling such products, or (iii) the types of businesses within
the Infant and Toddler Retail Market that may purchase such products.

          (c) “Confidential Information” shall mean all customer and supplier lists, marketing
arrangements, business plans, projections, financial information, training manuals, pricing
manuals, product development plans, market strategies, internal performance statistics and other
competitively sensitive information of Seller used solely in the Business and not generally known
by the public, whether or not in written or tangible form. Notwithstanding the foregoing, the
definition of Confidential Information shall not include any of the foregoing items insofar as they
relate to Seller Exclusive Products.

          (d) “Infant and Toddler Retail Market” shall mean those retail sales departments
within retailers which sell products intended for children from ages zero to four years of age.

          (e) “Permitted Activities” shall mean (i) owning not more than 5% of the outstanding
shares of publicly-held corporations or other entity engaged in a Competitive Business which have
shares listed on any national or regional securities exchange or registered with the Securities and
Exchange Commission (or any comparable regulatory body in any foreign jurisdiction) or through the
automatic quotation system of a registered securities association (any such publicly-held
corporation or other entity, a “Public Company”); (ii) owning any percentage of the
outstanding equity of a Person engaged in a Competitive Business where such equity was acquired by
Seller after the date hereof from a Person that is not an affiliate of Seller (with “affiliate”
defined as set forth in Rule 12b-2 of the regulations promulgated under the Securities Exchange Act
of 1934, as amended) and where such Competitive Business’s annual sales of Competitive Products
into the Protected Market (as hereinafter defined) constitute less than 10% of such Person’s total
annual sales revenue, but in no event more than $10,000,000.00; (iii) carrying on or transacting
business with any Competitive Business if such activity does not include the sale or distribution
of Competitive Products, directly or indirectly, for ultimate purchase by consumers within the
Protected Market; and (iv) marketing, selling or distributing any Seller Exclusive Products.

          (f) “Person” shall mean an individual, partnership, corporation, business trust,
limited liability company, limited liability partnership, joint stock company, trust,
unincorporated association, joint venture or other entity or a court, administrative agency or
other federal, state, local, municipal, foreign or other governmental or quasi-governmental
authority or agency of any nature.

          (g) “Protected Market” shall mean the United States.

          (h) “Restricted Period” shall mean the period commencing on the date of this Agreement
and ending on the date which is four (4) years from the date of this Agreement.

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          (i) “Seller Exclusive Products” means any Inventory (as defined in the Purchase
Agreement) that is not included within the Eligible Inventory (as defined in the Purchase
Agreement) transferred to Purchaser pursuant to the Purchase Agreement.

     2. No Competing Business. Seller hereby agrees that, during the Restricted Period,
except as permitted by Section 5 of this Agreement, it will not, directly or indirectly, own,
manage, operate, control, invest in or acquire an interest in, or otherwise engage or participate
in the establishment, management or operation of, any Competitive Business that sells or
distributes Competitive Products, directly or indirectly, for ultimate purchase by consumers in the
Protected Market, without regard to whether the Competitive Business has any office, manufacturing
or other business facilities within the Protected Market.

     3. No Interference with the Business. Seller hereby agrees that, during the
Restricted Period, except as permitted by Section 5 of this Agreement, Seller will not, directly or
indirectly, solicit, induce or influence any customer, supplier, lender, lessor or any other Person
that has a business relationship with the Business in the Protected Market, or which had on the
date of this Agreement a business relationship with the Business in the Protected Market, to
discontinue or reduce the extent of such relationship with the Business in the Protected Market; it
being understood that, nothing herein shall restrict Seller from carrying on or transacting
business with any such Person in respect of any Seller Exclusive Products.

     4. No Disclosure of Proprietary Information. Seller hereby agrees that, during the
Restricted Period, it will not, directly or indirectly, disclose to anyone, or use or otherwise
exploit for its own benefit or for the benefit of anyone other than Purchaser, any Confidential
Information, except as permitted by Section 5 of this Agreement. Notwithstanding the foregoing,
Seller may make disclosure of Confidential Information if Seller reasonably concludes that public
disclosure of Confidential Information is required by applicable legal requirements and Seller
(i) gives Purchaser written notice of such proposed disclosure as far in advance of such disclosure
as is reasonably practicable, (ii) cooperates reasonably with Purchaser in its efforts to protect
the information from disclosure, including, without limitation, assisting Purchaser in obtaining,
at Purchaser’s expense, an appropriate protective order or other reliable assurance that
confidential treatment will be accorded such information, and (iii) limits its disclosure to the
minimum required by applicable legal requirements unless Purchaser agrees in writing to a greater
level of disclosure.

     5. Permitted Activities. The restrictions set forth in Sections 2, 3 and 4 of this
Agreement shall not apply to Permitted Activities or to actions taken by Seller to the extent that
such actions are expressly approved in writing by Purchaser.

     6. Representations and Warranties. Seller represents and warrants that this Agreement
is a legal, valid and binding obligation, enforceable against Seller in accordance with its terms.

     7. Waivers. Neither party will be deemed as a consequence of any act, delay, failure,
omission, forbearance or other indulgences granted from time to time by it, or for any other reason
(a) to have waived, or to be estopped from exercising, any of its rights or remedies

3

 

under this Agreement or (b) to have modified, changed, amended, terminated, rescinded or
superseded any of the terms of this Agreement.

     8. Injunctive Relief. Seller acknowledges that (i) any violation of this Agreement
will result in irreparable injury to Purchaser, (ii) damages at law would not be reasonable or
adequate compensation to Purchaser for violation of this Agreement, and (iii) Purchaser shall be
entitled to have the provisions of this Agreement specifically enforced by preliminary and
permanent injunctive relief without the necessity of proving actual damages and without posting
bond or other security as well as to an equitable accounting of all earnings, profits and other
benefits arising out of any such violation.

     9. Notices. All notices and other communications hereunder shall be in writing and
shall be deemed given if (a) delivered by hand, (b) mailed by registered or certified mail (return
receipt requested), (c) by deposit with a nationally recognized courier for next business day
delivery, or (d) faxed and immediately confirmed both orally and in writing, to the parties at the
following addresses (or at such other addresses for a party as shall be specified by like notice)
and shall be deemed given on the date on which so hand-delivered or so telecommunicated or the next
business day following deposit with such courier or on the third business day following the date on
which so mailed, if deposited in a regularly-maintained receptacle for United States mail:

     To Seller:

Springs Global US, Inc.

205 North White Street

Fort Mill, South Carolina 29715

Attn: Mr. Tom O’Connor

Fax: (803) 547-1688

     with a copy to (which shall not constitute notice to Seller):

Springs Global US, Inc.

205 North White Street

Fort Mill, South Carolina 29715

Attn: Legal Department

Fax: (803) 547-3766

     To Purchaser:

Crown Crafts Infant Products, Inc.

916 S. Burnside Avenue

Gonzales, Louisiana 70737

Attn: Mr. E. Randall Chestnut

Fax: (225) 647-9112

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     with a copy to (which shall not constitute notice to Purchaser):

Rogers & Hardin LLP

2700 International Tower

229 Peachtree Street, NE

Atlanta, Georgia 30303

Attn: Steven E. Fox, Esq.

Fax: (404) 525-2224

     10. Successors in Interest. This Agreement shall be binding upon and shall inure to
the benefit of the parties hereto and their successors and assigns, and any reference to a party
hereto shall also be a reference to any such successor or assign.

     11. Number; Gender. Whenever the context so requires, the singular number shall
include the plural and the plural shall include the singular, and the gender of any pronoun shall
include the other genders.

     12. Captions. The titles, captions and table of contents contained in this Agreement
are inserted herein only as a matter of convenience and for reference and in no way define, limit,
extend or describe the scope of this Agreement or the intent of any provision hereof. Unless
otherwise specified to the contrary, all references to Sections are references to Sections of this
Agreement.

     13. Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware without regard to principles of conflicts of laws.

     14. Waivers and Amendments. Any term or provision of this Agreement may be waived at
any time by the party that is entitled to the benefits thereof, and any term or provision of this
Agreement may be amended or supplemented at any time by the mutual consent of the parties hereto,
except that any waiver of any term or condition, or any amendment or supplementation, of this
Agreement must be in writing. A waiver of any breach or failure to enforce any of the terms or
conditions of this Agreement shall not in any way affect, limit or waive a party’s rights hereunder
at any time to enforce strict compliance thereafter with every term or condition of this Agreement.

     15. Entire Agreement. This Agreement constitutes the entire agreement, and supersedes
all other prior agreements and understandings, both written and oral, among the parties, or any of
them with respect to the subject matter hereof.

     16. Severability. Any provision hereof which is prohibited or unenforceable in any
jurisdiction will, as to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction will not invalidate or render unenforceable such provision in
any other jurisdiction. To the extent permitted by law, the parties hereto waive any provision of
law which renders any such provision prohibited or unenforceable in any respect. The parties
acknowledge and agree that in the event that any provision of this Agreement should ever be deemed
to exceed the time, geographic, product or any other limitations permitted by applicable

5

 

law, it is their intent that any invalid, prohibited or unenforceable term or provision herein
be reformable by the reviewing court to the fullest extent permitted by applicable law.

     17. Counterparts. This Agreement may be executed in one or more counterparts, all of
which shall be considered one and the same agreement. Executed counterparts may be delivered by
facsimile transmission or by other electronic communication.

     18. Enforcement of Certain Rights. Nothing expressed or implied in this Agreement is
intended, or shall be construed, to confer upon or give any Person other than the parties hereto,
and their successors or assigns, any rights, remedies, obligations or liabilities under or by
reason of this Agreement, or result in such Person being deemed a third party beneficiary of this
Agreement.

[Signature page follows.]

6

 

     IN WITNESS WHEREOF, Seller and Purchaser have each caused this Agreement to be executed and
delivered as of the date first written above.

	 	 	 	 	 	 	 
	 	 	SELLER:
	 
	 	 	 	 	 	 
	 	 	SPRINGS GLOBAL US, INC.
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Flavio R. Barbosa	 	 
	 

	 	Name:
	 	Flavio R. Barbosa

	 	 
	 

	 	Title:
	 	EVP & CFO

	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 	 	PURCHASER:
	 
	 	 	 	 	 	 
	 	 	CROWN CRAFTS INFANT PRODUCTS, INC.
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ E. Randall Chestnut	 	 
	 

	 	Name:
	 	E. Randall Chestnut

	 	 
	 

	 	Title:
	 	Vice President

	 	 
	 

	 	 	 	 

	 	 

(Noncompetition and Non-Disclosure Agreement)exv10w2

 

Exhibit 10.2

Warehousing Agreement

Between

Springs Global US, Inc.

And

Crown Crafts Infant Products, Inc.

November 5, 2007

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	ARTICLE 1	 	 	4	 
	 
	 	 	 	 	 	 
	TERM OF AGREEMENT	 	 	4	 
	 
	 	 	 	 	 	 
	ARTICLE 2	 	 	4	 
	 
	 	 	 	 	 	 
	WAREHOUSEMAN’S RESPONSIBILITIES	 	 	4	 
	 
	 	 	 	 	 	 
	2.1
	 	Services	 	 	4	 
	2.2
	 	Warehouse Operations	 	 	5	 
	2.3
	 	Transfer of Products	 	 	5	 
	 
	 	 	 	 	 	 
	ARTICLE 3	 	 	5	 
	 
	 	 	 	 	 	 
	CROWN CRAFTS’ RESPONSIBILITIES	 	 	5	 
	 
	 	 	 	 	 	 
	3.1
	 	Delivery and Shipments; Packaging	 	 	5	 
	3.2
	 	Product Characteristics/Refusal to Accept Products	 	 	5	 
	3.3
	 	Prohibition of Consignment	 	 	6	 
	3.4
	 	Warehouseman Compensation	 	 	6	 
	 
	 	 	 	 	 	 
	ARTICLE 4	 	 	6	 
	 
	 	 	 	 	 	 
	TERMS OF PAYMENT	 	 	6	 
	 
	 	 	 	 	 	 
	ARTICLE 5	 	 	7	 
	 
	 	 	 	 	 	 
	LIABILITIES AND INDEMNIFICATION	 	 	7	 
	 
	 	 	 	 	 	 
	5.1
	 	General - Warehouse	 	 	7	 
	5.2
	 	Demurrage; Detention	 	 	8	 
	5.3
	 	Shrinkage/Damage Allowance	 	 	8	 
	5.4
	 	Insurance	 	 	8	 
	 
	 	 	 	 	 	 
	ARTICLE 6	 	 	8	 
	 
	 	 	 	 	 	 
	PHYSICAL INVENTORIES AND ADJUSTMENTS	 	 	8	 
	 
	 	 	 	 	 	 
	6.1
	 	Physical Inventories	 	 	8	 
	6.2
	 	Inventory Adjustments	 	 	9	 
	6.3
	 	Reconciliation of Inventory Records	 	 	9	 

 

 

	 	 	 	 	 	 	 
	ARTICLE 7	 	 	10	 
	 
	 	 	 	 	 	 
	FORCE MAJEURE	 	 	10	 
	 
	 	 	 	 	 	 
	ARTICLE 8	 	 	10	 
	 
	 	 	 	 	 	 
	DEFAULT	 	 	10	 
	 
	 	 	 	 	 	 
	8.1
	 	Automatic Default	 	 	10	 
	8.2
	 	General Default; Right to Cure	 	 	10	 
	8.3
	 	Effect of Termination	 	 	11	 

 

 

	 	 	 	 	 
	ARTICLE 9
	 	 	11	 
	 
	 	 	 	 
	RECORDS
	 	 	11	 
	 
	 	 	 	 
	ARTICLE 10
	 	 	11	 
	 
	 	 	 	 
	INDEPENDENT CONTRACTOR
	 	 	11	 
	 
	 	 	 	 
	ARTICLE 11
	 	 	11	 
	 
	 	 	 	 
	COMPLIANCE
	 	 	11	 
	 
	 	 	 	 
	ARTICLE 12
	 	 	12	 
	 
	 	 	 	 
	SUCCESSORSHIP
	 	 	12	 
	 
	 	 	 	 
	ARTICLE 13
	 	 	12	 
	 
	 	 	 	 
	APPLICABLE LAW; SEVERABILITY; SAVINGS
	 	 	12	 
	 
	 	 	 	 
	ARTICLE 14
	 	 	12	 
	 
	 	 	 	 
	ENTIRE AGREEMENT; AMENDMENT; CAPTIONS
	 	 	12	 
	 
	 	 	 	 
	ARTICLE 15
	 	 	12	 
	 
	 	 	 	 
	NOTICES
	 	 	12	 
	 
	 	 	 	 
	ARTICLE 16
	 	 	13	 
	 
	 	 	 	 
	WAIVER
	 	 	13	 
	 
	 	 	 	 
	ARTICLE 17
	 	 	14	 
	 
	 	 	 	 
	EXECUTION IN COUNTERPARTS; FACSIMILE SIGNATURES
	 	 	14	 

SCHEDULES

Schedule A — Description of Services

Schedule B — Rate Schedule

Schedule C — Insurance Schedule

 

 

WAREHOUSING AGREEMENT

     This WAREHOUSING AGREEMENT (as amended, restated, supplemented or otherwise modified from time
to time, this “Agreement”) is made and entered into as of the 5th day of November, 2007, by
and between SPRINGS GLOBAL US, INC., a Delaware corporation (“Warehouseman”), and CROWN
CRAFTS INFANT PRODUCTS, INC., a Delaware corporation (“Crown Crafts”). Warehouseman and
Crown Crafts are each referred to herein as a “Party” and collectively as the
“Parties.”

WITNESSETH:

     WHEREAS, the Parties have entered into an Asset Purchase Agreement dated as of the date hereof
(the “Asset Purchase Agreement”) pursuant to which Springs Global has agreed to sell, and
Crown Crafts has agreed to buy, certain of the assets of Springs Global’s baby product line; and

     WHEREAS, in connection with the transactions contemplated by the Asset Purchase Agreement,
Crown Crafts desires that Springs Global provide, or cause to be provided, to Crown Crafts, and
Springs Global is willing to provide, or cause to be provided, to Crown Crafts, certain warehousing
services in connection with its warehouse located at 1495 East Locust Street, Ontario, California
91761 (the “Warehouse”);

     NOW, THEREFORE, for and in consideration of the mutual agreements herein contained, it is
hereby mutually agreed as follows:

ARTICLE 1

TERM OF AGREEMENT

     The term of this Agreement shall commence on November 5, 2007, and continue in effect until
the close of business on May 5, 2008 (“Term”).

ARTICLE 2

WAREHOUSEMAN’S RESPONSIBILITIES

     2.1 Services. During the Term, Warehouseman agrees to provide for Crown Crafts
certain warehousing services described in Schedule A attached hereto and incorporated
herein by
this reference (the “Services”) at the Warehouse. As part of the Services,
Warehouseman shall accept and keep in a safe, neat and orderly condition such goods as from time to
time may be tendered by Crown Crafts for warehousing or handling in accordance with the terms of
this Agreement (the “Products”). Warehouseman further agrees to furnish and/or obtain
sufficient personnel, equipment, and other accessories necessary to perform the Services in
accordance with this Agreement.

 

 

     2.2 Warehouse Operations. The Parties agree that, except as specifically modified
herein, Warehouseman will be a warehouseman as described in Article 7 of the Uniform Commercial
Code (“UCC”) as enacted in the state where the Warehouse is located and is entitled to all
rights and subject to all obligations described therein. Warehouseman shall perform the Services
with substantially the same degree of care, skill, diligence and compliance with applicable law and
in substantially the same manner as performed immediately prior to the date hereof.

     The Warehouse space will be utilized by Warehouseman as efficiently as practicable without
creating inefficiencies in handling operations. All Products shall be segregated by stock keeping
unit and physical location in the same manner as similar products of Warehouseman were segregated
prior to the date hereof or as otherwise agreed upon by the Parties (a “stock keeping unit” being
the lowest level for which inventory material handling records are maintained for purposes of this
Agreement). Crown Crafts shall notify Warehouseman of stocking limitations, Products to be
accounted for separately and any other Product peculiarities in writing prior to delivery of such
Products to the Warehouse.

     Crown Crafts may have certain employees working at the Warehouse during the Term, subject to
the terms and conditions herein. Prior to any employee of Crown Crafts entering the Warehouse,
Crown Crafts shall notify Warehouseman of (i) the name of such employee, (ii) the length of time
such employee will be working at the Warehouse, and (iii) the duties to be performed by such
employee. Warehouseman shall have the right at any time to remove any employee or other invitee of
Crown Crafts from the premises if Warehouseman determines, in its reasonable discretion, that such
employee or invitee presents a risk to Warehouseman, Warehouseman’s employees or assets or any
other person or asset located at the Warehouse.

     2.3 Transfer of Products. No Products shall be delivered or transferred except upon
receipt by Warehouseman of completed shipping documents from Crown Crafts. Instructions to
transfer Products on the books of Warehouseman shall not be effective until said instructions are
delivered to Warehouseman. All charges relating to Warehouseman’s Services to Crown Crafts,
including the receipt, storage, servicing, handling and transfer of the Products, shall be
chargeable to Crown Crafts as set forth in Schedule B attached hereto and incorporated
herein by this reference.

ARTICLE 3

CROWN CRAFTS’ RESPONSIBILITIES

     3.1 Delivery and Shipments; Packaging. Crown Crafts will advise Warehouseman of its
warehousing needs in sufficient time to allow Warehouseman to make necessary preparations for such
warehousing. Crown Crafts will also provide Warehouseman with instructions for shipments from the
Warehouse, which information will constitute Crown Crafts’ instructions for shipment of Products.
All Products tendered for warehousing will be properly marked and packaged for handling.

     3.2 Product Characteristics/Refusal to Accept Products. Crown Crafts shall promptly
notify Warehouseman of the characteristics of any Products that require special

 

 

handling instructions, material, equipment or precautions. No Products shall be delivered to Warehouseman
that (a) may be hazardous or dangerous to Warehouseman’s employees, subcontractors or agents,
whether by handling or exposure; (b) are defined as hazardous materials under any federal, state or
local law or regulation governing the environment, including, but not limited, to The Resource
Conservation and Recovery Act (RCRA), The Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended (CERCLA), or Department of Transportation Research and Special
Programs Administration (RSPA including IATA, ICAO and IMDG); or (c) are or should be reasonably
believed or known to be likely to cause damage to Warehouseman’s premises or equipment, the
Products, or other goods that may be stored by Warehouseman at the Warehouse. Warehouseman may
refuse to accept any Products that are identified as coming within the immediately preceding
categories or that reasonably might cause infestation, contamination or damage to other goods in
its custody. Warehouseman shall promptly notify Crown Crafts of such refusal and shall have no
liability for any demurrage, detention, transportation or other charges by virtue of such refusal.

     3.3 Prohibition of Consignment. Crown Crafts agrees not to ship Products to
Warehouseman as the named consignee. If, in violation of this Agreement, Products are to be
shipped to Warehouseman as named consignee, Crown Crafts agrees to notify the applicable carrier,
in writing and prior to such shipment, that Warehouseman named as consignee is a warehouseman under
law and has no beneficial title or interest in such Products. Crown Crafts will also deliver a
copy of such notice to Warehouseman prior to such shipment.

     3.4 Warehouseman Compensation. Crown Crafts shall pay Warehouseman compensation for
the Services provided by Warehouseman and the charges made by Warehouseman in accordance with
Schedule B.

ARTICLE 4

TERMS OF PAYMENT

     Except as may otherwise be specifically stated in any of the applicable schedules hereto,
Warehouseman shall invoice Crown Crafts promptly after the end of each month for all Services
performed, and costs incurred by Warehouseman, under this Agreement during the preceding month.
Crown Crafts shall pay the amount invoiced within thirty (30) days from the date of such invoice.
Payment shall be considered made when payments have been received by Warehouseman.

     In the event Crown Crafts disputes any invoices (or any part thereof), Crown Crafts shall
provide Warehouseman with written notice of such dispute within thirty (30) days of receipt of such
invoice. Crown Crafts shall, however, pay that portion of the invoice not in dispute. Any such
amount not in dispute and not paid within forty-five (45) days shall bear interest at a rate of
0.5% per month (the “Default Rate”) from the date such amount was due. Crown Crafts
further agrees that it will pay all charges which are invoiced and that are not expressly disputed
without offset or counterclaim of any kind.

     Additionally, if any disputed portion of such invoice is later paid by Crown Crafts, or is
determined subsequently to be due and owing to Warehouseman, Crown Crafts shall also pay

 

 

Warehouseman interest on such amount from the original due date at the Default Rate. Crown Crafts
agrees to pay, in the event its account becomes delinquent and is turned over to any attorney for
collection, reasonable attorneys’ fees, plus all consultant fees, court costs, and attendant
collection costs actually incurred.

ARTICLE 5

LIABILITIES AND INDEMNIFICATION

     5.1 General — Warehouse. Warehouseman shall be responsible for loss or damage to all
Products under its care, custody and control in the Warehouse as provided in the UCC, subject to
the provisions of this Article 5; provided that Warehouseman shall have no liability to
Crown Crafts for any loss or damage to Products to the extent such loss or damage is caused by
Crown Crafts or any of its employees, agents or invitees.

     Warehouseman agrees to indemnify, save harmless, and defend Crown Crafts from and against any
and all claims for loss, damage or injury (including court costs and reasonable attorneys’ fees)
and from and against any suits, actions, or legal proceedings brought against Crown Crafts for or
on account of any loss or damage to the tangible property of Crown Crafts or third parties, or for
or on account of any injuries received or sustained by any person, including, but not limited to,
employees of Warehouseman and employees and agents of Crown Crafts, caused by, or arising out of,
any intentional, reckless or grossly negligent act or omission of Warehouseman or its employees,
agents or invitees in performing the Services, except to the extent such claim arises from the
gross negligence, recklessness or intentional act of Crown Crafts, its employees, agents or
servants.

     Crown Crafts shall indemnify and hold harmless Warehouseman from (i) any and all claims for
unpaid transportation charges, including undercharges, demurrage and detention, in connection with
Products shipped to or from the Warehouse, except for such claims caused by Warehouseman’s failure
to exercise the standard of care set forth in Section 2.2 above, and (ii) any injury (including
death at anytime resulting therefrom) incurred by Crown Crafts’ employees, agents or invitees while
such person is present at the Warehouse, other than any such injury arising from the gross
negligence, recklessness or intentional act of Warehouseman, its employees, agents or servants.

     In addition, Crown Crafts agrees to indemnify, save harmless, and defend Warehouseman from and
against any and all claims for loss, damage or injury (including court costs and reasonable
attorneys’ fees) and from and against any suits, actions, or legal proceedings brought against
Warehouseman for or on account of any loss or damage to the tangible property of Warehouseman or
third parties, or for or on account of any injuries received or sustained by any person, including,
but not limited, to employees of Crown Crafts and employees and agents of Warehouseman, caused by,
or arising out of, any intentional, reckless or grossly negligent act or omission of Crown Crafts
or its employees, agents or invitees, as well as from any claims, expenses or demands of any kind
made by Crown Crafts’ employees, agents, servants or contractors while at the Warehouse in
connection with the performance of this Agreement, except to the extent such claim arises from the
gross negligence, recklessness or intentional act of Warehouseman, its employees, agents or
servants. Further, Crown Crafts agrees to secure a

 

 

waiver of subrogation from Crown Crafts’
workers’ compensation insurance carrier in support of the above.

     5.2 Demurrage; Detention. Warehouseman shall not be liable for demurrage, detention
or delays in obtaining and loading cars or vehicles for outbound shipments unless Warehouseman has
failed to exercise the standard of care set forth in Section 2.2 above. If detention occurs for
which Warehouseman is liable, payment of such detention shall be made by Warehouseman to the
carrier.

     5.3 Shrinkage/Damage Allowance. Crown Crafts agrees to a damage and inventory
shrinkage allowance (applied over the Term) of 0.25% of the value of the Products stored, for
which, in the case of loss or damage to Products for any reason or mysterious disappearance,
however caused, Warehouseman shall not be liable.

     5.4 Insurance. Warehouseman shall maintain at all times during the life of this
Agreement a policy or policies of insurance in full force and effect with companies and in amounts
identified on Schedule C attached hereto and incorporated herein by this reference,
covering warehouse legal liability for loss or damage to Products due to the negligence of
Warehouseman. Warehouseman does not otherwise insure the Products. Warehouseman shall not be held
liable for any actions related to shipment of Products and will not carry insurance coverage
related to shipping transactions to or from the Warehouse. Warehouseman agrees to furnish, at
Crown Crafts’ request, certificates of all policies of applicable insurance, such certificates to
name Crown Crafts as certificate holder. Warehouseman shall be responsible for insuring any
physical assets that it owns or leases and that are used in the Warehouse. Further, Warehouseman
agrees to secure a waiver of subrogation from Warehouseman’s insurance carrier in support of the
above.

     Crown Crafts agrees to maintain general comprehensive, unimpaired liability insurance in an
amount of not less than one million dollars ($1,000,000) per occurrence, including contractual
liability endorsement specifically covering this Agreement, and statutory workers’ compensation
insurance. This insurance will be primary. Crown Crafts agrees to furnish, at Warehouseman’s
request, certificates of all policies of applicable insurance, such certificates to name
Warehouseman as an additional insured. Further, Crown Crafts agrees to secure a waiver of
subrogation from Crown Crafts’ insurance carrier in support of the foregoing.

ARTICLE 6

PHYSICAL INVENTORIES AND ADJUSTMENTS

     6.1 Physical Inventories. A physical inventory shall be performed reasonably promptly
following the execution of this Agreement. Subsequently, joint Crown Crafts/Warehouseman physical
inventories shall be performed upon mutual agreement by Crown Crafts and Warehouseman, but at least
once at the end of the Term. All shipping, receiving and inventory transaction processing will be
terminated during the period of the physical inventory to insure a simultaneous cut-off of all
activity. Charges for hourly warehouse personnel will be as set forth on Schedule B.

 

 

     6.2 Inventory Adjustments. If stock differences are found in any count, Warehouseman
and Crown Crafts will list gains as receipts, and losses as deductions, thus reconciling the book
record with the actual stock on hand. Those changes will be based upon counts agreed to and signed
by Crown Crafts’ representative and Warehouseman’s representative.

     (A) For purposes of determining the net balance of physical units on Warehouseman’s account,
all shortages and overages for the period, after taking account of the shrinkage allowance set
forth in Section 5.3, shall be reconciled by stock keeping unit.

     (B) If there is a shortage for the period covered, after netting across stock keeping units,
the dollar amount (number of units of each stock keeping unit multiplied by Crown Crafts’
respective standard costs, less allowances provided for in Section 5.3
above, all of which shall be subject to the provisions of subsection 6.2(D) below) shall be
payable to Crown Crafts by Warehouseman. If there is an overage on the account, adjustments will
be made to inventory book records and no claim will be filed by Warehouseman. The period covered
by the physical inventory will be closed to future netting routines except under the following
conditions:

     (i) proven miscount in physical inventory;

     (ii) proven clerical error by Crown Crafts;

     (iii) located or recovered lost shipment;

     (iv) proven packing or case marking error by Crown Crafts’ supplier; or

     (v) a shortage in a subsequent inventory matches an overage in a previous inventory.

     (C) If the net inventory variance calculated during the physical inventory is an overage and
Warehouseman paid for a shortage in connection with the preceding physical inventory, Crown Crafts
will pay a refund to Warehouseman based on the overage, but only to the extent that it does not
exceed the shortage for which Warehouseman has paid.

     (D) The dollar values used to determine the amounts of money owed by Warehouseman in the event
a physical inventory reveals a shortage shall be Crown Crafts’ standard cost of said Products.

     6.3 Reconciliation of Inventory Records. If at any time discrepancies exist between
Crown Crafts’ records and the physical inventory, Warehouseman and Crown Crafts shall provide to
each other their records of all inventory adjustments from the time of the previous reconciliation
to the time of the inventory count in which the discrepancy was found.

 

 

ARTICLE 7

FORCE MAJEURE

     A Party shall not be responsible for delay or non performance hereunder if performance is
prevented or delayed by any cause or event beyond such Party’s reasonable control. Without
limiting the generality of the foregoing, such causes or events shall include, directly or
indirectly, without limitation, Acts of God or elements of nature, fire, floods, other
catastrophes, war, public enemies, seizure under legal process (not resulting from action or
inaction of the non-performing Party), strikes, lockouts, labor disorders, riots, sabotage,
explosion, acts of terrorism, civil commotions, closing of public highways, governmental
interference or regulations, embargo, accident, derailment, epidemics or quarantine restrictions,
the act or default of the other Party, or any other reason of a similar or dissimilar nature beyond
such Party’s reasonable control.

     In the event there is a default or delay due to Force Majeure per the above, the
non-performing Party shall be excused from further performance (other than payment of previously
accrued charges) or observance of the obligation(s) so affected for as long as such circumstances
prevail, provided such Party continues to use its commercially reasonable efforts to recommence its
performance or observance whenever and to whatever extent possible without delay. Warehouseman
shall use its commercially reasonable efforts to protect the Products that are in the Warehouse
during the Force Majeure event. The Party claiming a Force Majeure event will notify the other
Party as soon as practicable regarding the existence, nature and approximate duration of the Force
Majeure event, and will promptly give further notice when the Force Majeure event ceases, whereupon
its duty to perform shall resume.

ARTICLE 8

DEFAULT

     8.1 Automatic Default. In the event bankruptcy, receivership, insolvency,
reorganization, dissolution, liquidation or other similar proceeding is instituted by or against
either Party under the United States Bankruptcy Code or other law of the United States or any
state, then this Agreement shall be deemed to be automatically terminated by the other Party,
without notice or demand, and such other Party may exercise all rights granted under applicable law
and this Agreement.

     8.2 General Default; Right to Cure. Except for reasons provided in Article 7 and
Section 8.1 above, in the event either Party fails, in any material respect, to perform its
obligations under this Agreement, then the other Party may terminate this Agreement upon sixty (60)
days prior written notice to the other; provided, however, that such notice shall
specify all such failures to perform and allow the Party in default no less than thirty (30) days
to correct such failures. However, Warehouseman and Crown Crafts agree that breach of payment
terms in Article 4 shall constitute a default, which shall give Warehouseman the right to terminate
this Agreement by written notice to Crown Crafts if such default is not remedied within five (5)
days of such notice.

 

 

     8.3 Effect of Termination. Termination under this provision, or under any other
provision of this Agreement, shall not relieve or release either Party from any liability or
obligation, which accrued prior to the date of such termination.

ARTICLE 9

RECORDS

     Warehouseman shall at all times keep accurate and complete books and records with regard to
receipt, transfer, and other handling of Products (the “Crown Crafts Files”) and shall
maintain the Crown Crafts Files for a period of two (2) years. Subject to maintaining the
confidentiality of records of any customers other than Crown Crafts, Crown Crafts and its
authorized representatives shall have the right, at its own cost and expense, to inspect and audit
the Crown Crafts Files at any reasonable time. Crown Crafts’ right to audit the Crown Crafts Files
shall survive expiration or termination of this Agreement. Crown Crafts shall have the right to
enter upon the Warehouse at all reasonable times for the purpose of inspecting Products;
provided that any such inspection by Crown Crafts or its agents or employees shall be
conducted in such a manner so as not to interfere with the normal operations of the Warehouseman.

ARTICLE 10

INDEPENDENT CONTRACTOR

     It is agreed and understood that Warehouseman is entering into this Agreement as an
independent contractor, that all of Warehouseman’s personnel engaged in work under this Agreement
are to be considered for all purposes as employees of Warehouseman, and that all of Crown Craft’s
personnel engaged in work at the Warehouse are to be considered for all purposes as employees of
Crown Crafts. Under no circumstances shall employees of Warehouseman be construed or considered to
be employees of Crown Crafts or employees of Crown Crafts be construed or considered to be
employees of Warehouseman. Each party hereto agrees to furnish, at the other party’s request,
evidence of such party’s workers’ compensation insurance with respect to its employees as then in
effect. Crown Crafts will not be responsible for acts or omissions of any of Warehouseman’s
employees or agents. The relationship between the Parties will be, at all times, that of
independent contractors, which status governs all relationships between Warehouseman, Crown Crafts
and other third parties.

ARTICLE 11

COMPLIANCE

     Warehouseman shall at all times comply, in all material respects, with all applicable federal,
state and municipal laws and the regulations of the respective regulatory bodies having
jurisdiction over Warehouseman. Warehouseman will procure and maintain all necessary and
applicable operating authorities, permits and licenses.

 

 

ARTICLE 12

SUCCESSORSHIP

     This Agreement shall inure to the benefit of and be binding upon the Parties hereto and their
successors and assigns, provided neither Party to this Agreement shall assign or sublet its
interest or obligations herein without the prior written consent of the other Party.
Notwithstanding the foregoing, either Party has the right to assign or subcontract part or all of
the obligations hereunder without the consent of the other Party so long as the assignee or
subcontractor is, and remains throughout the Term, a parent, affiliate or subsidiary of such
Party.

ARTICLE 13

APPLICABLE LAW; SEVERABILITY; SAVINGS

     Warehouseman and Crown Crafts understand and agree that the law of the State of Delaware,
without regard to principles of conflicts of law, shall govern this Agreement. If any provision of
this Agreement shall be held to be invalid or unenforceable for any reason, the remaining
provisions shall continue to be valid and enforceable. If a court finds that any provision of this
Agreement is invalid or unenforceable, but that by limiting such provision it would become valid
and enforceable, then such provision shall be deemed to be written, construed, and enforced as so
limited.

ARTICLE 14

ENTIRE AGREEMENT; AMENDMENT; CAPTIONS

     This Agreement, together with all schedules and attachments, constitutes the entire agreement
between the Parties with respect to the subject matter hereof and may not be amended or changed
except by written agreement signed by Warehouseman and Crown Crafts. To the extent that the terms
of any warehouse receipts, acknowledgment forms, order forms, bills of lading, invoices, or similar
documents sent and/or signed by one or both Parties conflict with or are inconsistent with the
terms of this Agreement, the terms of this Agreement shall control. The captions herein are for
convenience only and shall not be construed as interpretive or as a substantive part of this
Agreement.

ARTICLE 15

NOTICES

     Any notice or demand required or permitted hereunder shall be given in writing addressed to
Crown Crafts or Warehouseman as listed below or to such other address as may be specified in
writing to the other Party. All such communications shall be deemed given if (a) delivered by
hand, (b) mailed by registered or certified mail (return receipt requested), (c) by deposit with a
nationally recognized courier for next business day delivery, or (d) faxed and immediately
confirmed both orally and in writing, to the parties at the following addresses (or at such other
addresses for a party as shall be specified by like notice) and shall be deemed given

 

 

on the date on which so hand-delivered or so telecommunicated or the next business day
following deposit with such courier or on the third business day following the date on which so
mailed, if deposited in a regularly-maintained receptacle for United States mail:

For notices to Warehouseman:

Springs Global US, Inc.

205 North White Street

Fort Mill, South Carolina 29715

Attn: Mr. Tom O’Connor

Fax: (803) 547-1688

     With a copy to (which shall not constitute notice to Warehouseman):

Springs Global US, Inc.

205 North White Street

Fort Mill, South Carolina 29715

Attn: Legal Department

Fax: (803) 547-3766

For notices to Crown Crafts:

Crown Crafts Infant Products, Inc.

916 S. Burnside Avenue

Gonzales, Louisiana 70737

Attn: Mr. E. Randall Chestnut

Fax: (225) 647-9112

     With a copy to (which shall not constitute notice to Crown Crafts):

Rogers & Hardin LLP

2700 International Tower

229 Peachtree Street, NE

Atlanta, Georgia 30303

Attn: Steven E. Fox, Esq.

Fax: (404) 525-2224

ARTICLE 16

WAIVER

     Compliance with the provisions of this Agreement may be waived only by a written document
signed by the Party granting the waiver. The failure of either Party at any time to require
performance by the other Party of any provision hereof shall in no way affect the full right to
require such performance at any time thereafter. Neither shall the waiver by any Party of a breach
of any provision hereof be taken or held to be a waiver of any succeeding breach of such provision
or as a waiver of the provision itself.

 

 

ARTICLE 17

EXECUTION IN COUNTERPARTS; FACSIMILE SIGNATURES

     This Agreement may be executed in one or more counterparts, all of which shall be considered
one and the same agreement, and shall become a binding agreement when one or more counterparts have
been signed by each party and delivered to the other parties. A signature to this Agreement
delivered by telecopy or other electronic communication shall be deemed an original signature for
all purposes hereunder.

[Signature page follows.]

 

 

     IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their respective
duly authorized representatives as of the date first set forth above.

	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	SPRINGS GLOBAL US, INC.
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Flavio R. Barbosa	 	 
	 
	 

	 	Name:
	 	Flavio R. Barbosa	 	 
	 
	 

	 	Title:
	 	EVP & CFO	 	 
	 
	 

	 	Date:
	 	11/5/07	 	 
	 
	 
	 	 	 	 	 	 
	 	 	CROWN CRAFTS INFANT PRODUCTS, INC.
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ E. Randall Chestnut	 	 
	 
	 

	 	Name:
	 	E. Randall Chestnut	 	 
	 
	 

	 	Title:
	 	Vice President	 	 
	 
	 	 	 	 	 	 
	 

	 	Date:
	 	11/5/07	 	 
	 

[Signature page for Warehousing Agreement—SGUS/Crown Crafts]

 

 

EXECUTION COPY

SCHEDULE A

Description of Services

	(1)	 	Location(s): 1495 East Locust Street, Ontario, California 91761
	 
	(2)	 	Warehouse Services to Include: (All Services will be in accordance with
Warehouseman standard warehouse operating procedures and standards unless specifically
modified in this Agreement or any Schedule):

	 	A.	 	Warehouse Services to include:
	 

	 	(1)	 	receipt of Product into Warehouseman warehouse
inventory system,
	 
	 	(2)	 	forward receipt information to Crown Crafts for
entry into Crown Crafts inventory system
	 
	 	(3)	 	devanning containers,
	 
	 	(4)	 	unloading,
	 
	 	(5)	 	sorting,
	 
	 	(6)	 	storing,

	 
	 	(7)	 	pick orders according to Crown Crafts pick
ticket instructions,
	 
	 	(8)	 	pick and pack according to Crown Crafts pick
ticket instructions,
	 
	 	(9)	 	palletizing,
	 
	 	(10)	 	inspecting in a manner consistent with
Warehouseman’s existing quality control process that existed prior to
the Closing Date (as defined in the Asset Purchase Agreement),
	 
	 	(11)	 	labeling according to Crown Crafts
instructions,
	 
	 	(12)	 	handling,
	 
	 	(13)	 	repacking,
	 
	 	(14)	 	rehandling inventory according to Crown Crafts
instructions
	 
	 	(15)	 	consolidating,
	 
	 	(16)	 	routing,
	 
	 	(17)	 	staging,
	 
	 	(18)	 	loading on outbound trailer
	 
	 	(19)	 	adjusting inventory out of Warehouseman
warehouse inventory system
	 
	 	(20)	 	provide Crown Crafts with completed pick
tickets for entry into Crown Crafts inventory system
	 
	 	(21)	 	set up new SKU’s in Warehouseman warehouse
inventory system
	 
	 	(22)	 	provide daily or, if agreed by the Parties,
less frequent reporting of ending inventory and periodic activity by
transaction code to Crown Crafts for reconciliation with Crown Crafts’
inventory system, and
	 
	 	(23)	 	cycle counting according to Crown Crafts
instructions

	(3)	 	Normal Workday Operating Hours: 5:00 AM PST to 1:30 PM PST

 

 

Normal Workday Operating Hours to exclude the following holidays: New Years Day,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day, the day after
Thanksgiving, Christmas Eve, Christmas Day.

 

 

SCHEDULE B

Rate Schedule

	 	(1)	 	Rates for Warehouse Services:

	 	 	 	 	 	 	 
	 	 	Regular	 	Overtime	 	Holidays
	Hourly:
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Quality Reinspectors,

	 	$11.00 per hour
	 	1.5 times the Regular
	 	Approx 2.0 times the
	Order Fillers & Lift

	 	 	 	Rate
	 	Regular Rate
	Truck Operators
	 	 	 	 	 	 
	A-3 Inventory Clerk

	 	$11.83 per hour
	 	1.5 times the Regular
	 	Approx 2.0 times the
	 

	 	 	 	Rate
	 	Regular Rate
	A-5 Inventory Clerk

	 	$14.14 per hour
	 	1.5 times the Regular
	 	Approx 2.0 times the
	 

	 	 	 	Rate
	 	Regular Rate
	 
	Salary:
	 	 	 	 	 	 
	 
	Baby Supervisor

	 	$4,693 per 4 week

month, $5,866 per 5

week month	 	 	 	 
	 
	Allocated DC
Manager, 
Industrial
Engineer and 
Second
Shift Supervisor

	 	$7,676 per 4 week

month, $9,595 per 5

week month	 	 	 	 

Hourly rates are exclusive of Warehouseman fringe benefits. Fringe benefits will be charged to
Crown Crafts at a fixed rate of 40% of the Regular Hourly charges incurred each month. Temporary
labor, if necessary, will be billed to Crown Crafts at the actual cost billed to Warehouseman.
Crown Crafts will only be responsible for Hourly and Salary charges to the extent Warehouse
Services are provided to Crown Crafts during any month in the Term.

	 	(2)	 	Rates for Distribution Materials, Office Supplies or Special Supplies used
for Crown Crafts:
	 
	 	 	 	Actual cost.
	 
	 	(3)	 	Utilities, Taxes, Maintenance and Insurance;

     Any charges for Utilities, Taxes, Maintenance and Insurance shall be passed through to Crown
Crafts on a prorated basis each month throughout the Term. Such additional charges may include,
but are not limited to Warehouseman’s actual costs for gas, oil, propane, diesel fuel, electricity,
water, sewer, telephone, security, property taxes, property insurance, business insurance and
building maintenance. Crown Crafts’ prorated share of such total expense shall be commensurate
with Crown Crafts’ portion of the square footage for the entire Warehouse.

 

 

	 	(4)	 	Lease Costs;

     Warehouseman’s actual warehouse lease costs (currently $58,041 per month) will be passed
through to Crown Crafts on a prorated basis each month throughout the Term. Crown Crafts prorated
share of such total expenses will be based on the percentage calculated by dividing the square
footage of the Warehouse that was allocated to Warehouseman’s baby products line prior to the date
hereof into the total square footage of the Warehouse.

     Warehouseman’s actual costs throughout the Term for leased equipment including lift trucks,
handling equipment, copiers, faxes and other office equipment dedicated to Warehouseman’s baby
products line prior to the date hereof (currently $2,852 per month) will be passed through to Crown
Crafts.

 

 

SCHEDULE C

Insurance Schedule

A Certificate of Insurance naming Crown Crafts as Certificate Holder
is attached hereto as Attachment C-1.

A Certificate of Insurance naming Warehouseman as Certificate Holder
is attached hereto as Attachment C-2.

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