<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
(X) QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended October 1, 1995
---------------
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
------- -------
Commission File No. 1-7604
------
CROWN CRAFTS, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Georgia 58-0678148
- ------------------------------------ -----------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1600 Riveredge Parkway, Suite 200, Atlanta, Georgia 30328
- --------------------------------------------------------------------------------
(Address of principal executive offices)
(770) 644-6400
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
--- ---
The number of shares of common Stock, $1.00 par value, of the Registrant
outstanding as of November 10, 1995 was 7,943,980.
---------
<PAGE> 2
FORM 10-Q
CROWN CRAFTS, INC. AND SUBSIDIARIES
PART 1 - FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEETS
OCTOBER 1, 1995 (UNAUDITED) AND APRIL 2, 1995
<TABLE>
<CAPTION>
October 1, April 2,
(dollars in thousands) 1995 1995
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
------
CURRENT ASSETS
Cash $ 437 $ 567
Accounts receivable, net:
Due from factor 27,190 20,657
Other 3,975 4,382
Inventories 58,622 44,909
Deferred income taxes 735 737
Other current assets 3,022 2,152
----------- -----------
Total Current Assets 93,981 73,404
----------- -----------
PROPERTY, PLANT AND EQUIPMENT - at cost:
Land, buildings and improvements 35,998 32,060
Construction projects in progress 3,631 666
Machinery and equipment 65,181 54,584
Furniture and fixtures 1,785 1,735
----------- -----------
106,595 89,045
Less accumulated depreciation 33,364 29,583
----------- -----------
Property, Plant and Equipment - net 73,231 59,462
----------- -----------
OTHER ASSETS 4,130 1,165
----------- -----------
TOTAL $ 171,342 $ 134,031
=========== ===========
</TABLE>
See notes to interim consolidated financial statements.
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<PAGE> 3
FORM 10-Q
CROWN CRAFTS, INC. AND SUBSIDIARIES
FINANCIAL STATEMENTS (continued)
CONSOLIDATED BALANCE SHEETS
OCTOBER 1, 1995 (UNAUDITED) AND APRIL 2, 1995
<TABLE>
<CAPTION>
October 1, April 2,
(dollars in thousands) 1995 1995
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES:
Notes payable $ 15,070
Accounts payable $ 12,159 10,666
Income taxes payable 2,012 687
Accrued liabilities 6,663 5,026
Current maturities of long-term debt 5,584 5,000
-------- --------
Total Current Liabilities 26,418 36,449
-------- --------
LONG-TERM DEBT 56,990 5,000
-------- --------
DEFERRED INCOME TAXES 5,208 4,933
-------- --------
OTHER LIABILITIES 674 649
-------- --------
SHAREHOLDERS' EQUITY:
Common stock - par value $1.00 per share;
15,000,000 shares authorized; 9,048,636 and
9,003,991 shares issued 9,049 9,004
Paid-in capital 34,349 33,811
Retained earnings 53,430 51,352
Less:
1,104,656 and 464,188 shares of common
stock held in treasury (14,776) (7,167)
-------- --------
Total Shareholders' Equity 82,052 87,000
-------- --------
TOTAL $171,342 $134,031
======== ========
</TABLE>
See notes to interim consolidated financial statements.
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<PAGE> 4
FORM 10-Q
CROWN CRAFTS, INC. AND SUBSIDIARIES
FINANCIAL STATEMENTS (Continued)
CONSOLIDATED STATEMENTS OF EARNINGS
OCTOBER 1, 1995 AND OCTOBER 2, 1994
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
------------------ ----------------
(dollars in thousands, except Oct. 1, Oct. 2, Oct. 1, Oct. 2,
per share data) 1995 1994 1995 1994
-------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NET SALES $ 57,330 $ 55,945 $ 96,537 $ 95,658
COST OF PRODUCTS SOLD 45,087 43,277 76,743 75,290
---------- ---------- ----------- ----------
GROSS PROFIT 12,243 12,668 19,794 20,368
MARKETING AND
ADMINISTRATIVE EXPENSES 7,599 7,144 14,093 12,549
---------- ---------- ----------- ----------
EARNINGS FROM OPERATIONS 4,644 5,524 5,701 7,819
OTHER INCOME (EXPENSE):
Interest expense (684) (592) (1,213) (955)
Other - net (578) 49 (378) 81
---------- ---------- ----------- ----------
EARNINGS BEFORE INCOME
TAXES 3,382 4,981 4,110 6,945
PROVISIONS FOR INCOME
TAXES 1,264 1,859 1,536 2,580
---------- ---------- ----------- ----------
NET EARNINGS $ 2,118 $ 3,122 $ 2,574 $ 4,365
========== ========== =========== ==========
NET EARNINGS PER SHARE $ 0.26 $ 0.37 $ 0.31 $ 0.52
========== ========== =========== ==========
AVERAGE SHARES
OUTSTANDING 8,046,468 8,438,049 8,305,949 8,429,809
========== ========== =========== ==========
DIVIDENDS DECLARED PER
SHARE $ 0.03 $ 0.03 $ 0.06 $ 0.06
========== ========== =========== ==========
</TABLE>
See notes to interim consolidated financial statements.
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<PAGE> 5
FORM 10-Q
CROWN CRAFTS, INC. AND SUBSIDIARIES
FINANCIAL STATEMENTS (continued)
CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED OCTOBER 1, 1995 AND
OCTOBER 2, 1994
(UNAUDITED)
<TABLE>
<CAPTION>
October 1, October 2,
(dollars in thousands) 1995 1994
-----------------------------------------------------------------------------------------------------
<S> <C> <C>
OPERATING ACTIVITIES:
Net earnings $ 2,574 $ 4,365
Adjustments to reconcile net earnings to net
cash provided by (used for) operating activities:
Depreciation and amortization 4,284 3,540
Deferred income taxes 2 (87)
Gain on disposal of property, plant and equipment (66) (15)
Changes in assets and liabilities:
Accounts receivable (5,813) (549)
Inventories (13,713) (7,680)
Other current assets (850) (660)
Other assets 30 (193)
Accounts payable 1,483 2,517
Income taxes payable 1,086 1,882
Accrued liabilities 1,575 540
Other liabilities 25 23
--------- ---------
Net Cash Provided by (used for) Operating Activities (9,383) 3,683
--------- ---------
INVESTING ACTIVITIES:
Capital Expenditures (15,540) (10,343)
Acquisition, net of cash acquired (3,958)
Proceeds from sale of property, plant and equipment 333 107
--------- ---------
Net Cash Used for Investing Activities (19,165) (10,236)
--------- ---------
FINANCING ACTIVITIES:
Long-term borrowings 53,860
Payment of long-term debt (2,850) (2,500)
Increase (decrease) in notes payable (15,070) 9,713
Purchase of common stock for treasury (7,534)
Exercise of stock options 508 292
Cash dividends (496) (506)
--------- ---------
Net Cash Provided by Financing Activities 28,418 6,999
--------- ---------
NET INCREASE (DECREASE) IN CASH
(carried forward) $ (130) $ 446
</TABLE>
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<PAGE> 6
FORM 10-Q
CROWN CRAFTS, INC. AND SUBSIDIARIES
FINANCIAL STATEMENTS (continued)
CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED OCTOBER 1, 1995 AND
OCTOBER 2, 1994
(UNAUDITED)
<TABLE>
<CAPTION>
October 1, October 2,
(dollars in thousands) 1995 1994
-------------------------------------------------------------------------------------------------------
<S> <C> <C>
NET INCREASE (DECREASE) IN CASH
(brought forward) $ (130) $ 446
CASH, beginning of period 567 425
-------- --------
CASH, end of period $ 437 $ 871
======== ========
Supplemental Cash Flow Information:
Income taxes paid $ 449 $ 785
======== ========
Interest paid net of amounts capitalized $ 1,020 $ 968
======== ========
</TABLE>
See notes to interim consolidated financial statements.
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<PAGE> 7
FORM 10-Q
CROWN CRAFTS, INC. AND SUBSIDIARIES
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
1. The accompanying interim consolidated financial statements have been
prepared in accordance with generally accepted accounting principles
applicable to interim financial information and the rules and regulations
of the Securities and Exchange Commission. Accordingly, they do not
include all of the information and disclosures required by generally
accepted accounting principles for complete financial statements. In the
opinion of management, such interim consolidated financial statements
contain all adjustments necessary to present fairly the Company's financial
position as of October 1, 1995 and the results of its operations and its
cash flows for the periods ended October 1, 1995 and October 2, 1994. Such
adjustments include normal recurring accruals and a pro rata portion of
certain estimated annual expenses.
2. Interest costs of $269,000 were capitalized during the three month period
ended October 1, 1995. There was no capitalized interest during the three
month period ended October 2, 1994. Interest costs of $383,000 and $67,000
were capitalized during the six month periods ended October 1, 1995 and
October 2, 1994, respectively.
3. The computation of net earnings per share for the three-month and six-month
periods ended October 1, 1995 and October 2, 1994 is based on the simple
average shares outstanding. Stock options outstanding did not have a
material dilutive effect during either period.
4. Major classes of inventory were as follows (in thousands):
<TABLE>
<CAPTION>
October 1, April 2,
1995 1995
---- ----
<S> <C> <C>
Raw materials $30,191 $24,846
Work in process 5,712 2,831
Finished goods 22,719 17,232
------- -------
$58,622 $44,909
======= =======
</TABLE>
5. Long-Term Debt at October 1, 1995, includes notes payable of $23,860,000
which were refinanced under a long-term note agreement effective October
12, 1995.
6. Operating results of interim periods are not necessarily indicative of
results to be expected for the year.
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<PAGE> 8
FORM 10-Q
CROWN CRAFTS, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Net sales by major product category were as follows during the three-month and
six-month periods ended October 1, 1995 and October 2, 1994:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
------------------ ----------------
Oct. 1, Oct. 2, Oct. 1, Oct. 2,
(in thousands of dollars) 1995 1994 1995 1994
------------------------- ---- ---- ---- ----
<S> <C> <C> <C> <C>
Comforters and accessories $28,452 $29,967 $50,084 $55,010
Jacquard-woven cotton products 26,387 23,901 41,916 36,917
Other 2,491 2,077 4,537 3,731
------- ------- ------- -------
Total net sales $57,330 $55,945 $96,537 $95,658
======= ======= ======= =======
</TABLE>
THREE MONTH PERIOD ENDED OCTOBER 1, 1995.
Consolidated net sales increased 2.5% for the quarter ended October 1, 1995
compared to the prior year quarter.
Net sales of comforters and accessories declined 5.1% from the prior year
quarter. The weakness in consumer spending in this category which began in the
first quarter continued in the second quarter ended October 1, 1995.
Net sales of jacquard-woven cotton products increased 10.4% in the current year
quarter primarily due to increased unit sales of cotton throws and matelasse
bedspreads. This product category includes cotton throws, bedspreads, blankets
and rugs.
To meet the expected demand for jacquard-woven products, the Company recently
completed the expansion of its warehouse and distribution center in Calhoun,
Georgia and its new 90,000 square foot weaving plant in Dalton, Georgia which
houses 36 state-of-the-art air-jet looms. The completion of these projects
triples the Company's production capacity for matelasse bedspreads and
increases its cotton throw capacity by over forty percent.
Gross margin declined to 21.4% for the quarter ended October 1, 1995 as
compared to 22.6% for the quarter ended October 2, 1994. The decline was due
to increased pricing pressure and higher raw material prices.
Interest expense is net of capitalized interest of $269,000 for the quarter
ended October 1, 1995. There was no capitalized interest during the
corresponding prior year quarter. Excluding the effect of interest
capitalized, interest expense increased $361,000 in the current year quarter.
The increase was due to higher levels of average total debt outstanding as
discussed under "FINANCIAL POSITION, LIQUIDITY AND CAPITAL RESOURCES" and also
higher short-term interest rates.
-7-
<PAGE> 9
Other-net for the quarter ended October 1, 1995 was an expense of $578,000
compared to income of $49,000 for the quarter ended October 2, 1994. This
change was primarily the result of losses incurred on cotton futures contracts
of $626,000 in the current year quarter as compared to losses of $32,000 in the
prior year quarter.
SIX MONTH PERIOD ENDED OCTOBER 1, 1995
Consolidated net sales increased .9% for the six months ended October 1, 1995
as compared to the corresponding prior year period.
Net sales of comforters and accessories declined 9.0% for the current year six
month period. Weakness in consumer spending in this category caused retailers
to tighten their inventory positions thereby reducing orders for the Company's
products. Also, chronically late shipments, especially during the last six
months of fiscal 1995, by the Company's fabric supplier for the popular Royal
Sateen luxury product line prevented the Company from meeting its customers'
needs for luxury bedding products. Although the manufacturing problems which
caused the late shipments were resolved and normal shipping levels resumed in
the first quarter of the current fiscal year, it took additional time and
considerable effort to reestablish the momentum in the brand with many large
customers. Sales of Royal Sateen products increased in the second quarter of
the current year compared to the second quarter of the prior year. However,
for the current year six month period sales in this product line were below the
prior year.
Net sales of jacquard-woven cotton products increased 13.5% for the current
year six month period primarily due to increased unit sales of cotton throws
and matelasse bedspreads.
Gross margin declined to 20.5% for the six month period ended October 1, 1995
compared to 21.3% for the six month period ended October 2, 1994. The decline
was due to increased pricing pressure and higher raw material prices.
Marketing and administrative expenses increased by $1,544,000 or 12.3% during
the six month period ended October 1, 1995 as compared to the corresponding
prior year period in large part due to the Company's efforts to strengthen its
management team to pursue acquisitions and other expansion opportunities which
offer significant potential for profitable growth.
Interest expense is net of capitalized interest of $383,000 and $67,000 for the
six month periods ended October 1, 1995 and October 2, 1994, respectively.
Excluding the effect of interest capitalized, interest expense increased
$574,000 in the current year six month period. The increase was due to higher
levels of average total debt outstanding as discussed under "FINANCIAL
POSITION, LIQUIDITY AND CAPITAL RESOURCES" and also higher short-term interest
rates.
Other-net for the six month period ended October 1, 1995 was an expense of
$378,000 compared to income of $81,000 for the corresponding prior year period.
This change was primarily the result of losses incurred on cotton futures
contracts of $564,000 in the current year period as compared to losses of
$135,000 in the prior year period.
FINANCIAL POSITION, LIQUIDITY AND CAPITAL RESOURCES
The Company strengthened its financial position significantly during the
current period. A long-term revolving credit facility was negotiated with each
of its two major banks. The aggregate amount of these lines is $30 million at
variable interest rates based on LIBOR with a maturity date of August 25, 1998.
-8-
<PAGE> 10
The Company also entered into a $50 million note purchase and private shelf
agreement with the Prudential Insurance Company of America. The initial
borrowing under this facility was for $25 million for a term of 10 years at a
fixed rate of 7.27%. The remaining $25 million of the facility may be borrowed
at any time through October 12, 1997. The maturity and interest rate on those
funds will be determined at the time of borrowing. Those funds will be
available for future acquisitions, capital expenditures and other corporate
purposes.
The proceeds from the bank lines and the initial borrowing under the note
purchase and private shelf facility were used to reduce the Company's
short-term borrowings, fund capital expenditures and repurchase stock as
described below.
On April 3, 1995, the Company acquired all of the stock of Textile, Inc., a
contract manufacturer of jacquard-woven cotton products located in Ronda, North
Carolina. The acquisition provided the Company with immediate access to
weaving capacity for cotton throws.
On July 12, 1995, the Company's Board of Directors authorized the repurchase of
up to 1,000,000 shares of its common stock. Through October 1, 1995 the
Company had repurchased 636,200 shares at an average price per share of
$11.843.
On October 31, 1995, the Company acquired all of the stock of The Red Calliope
and Associates, Inc. for approximately $16 million in cash and short-term
notes. The Red Calliope is a leading designer, manufacturer and marketer of
infant bedding products and related accessories. Utilizing its significant
jacquard-weaving expertise, the Company plans to introduce a line of infant and
juvenile throws incorporating The Red Calliope designs, and to extend its
upscale comforter designs to infant bedding. The Red Calliope, formerly a
privately-owned company, had net sales of $27,338,000 for its most recently
completed fiscal year ended June 30, 1995.
Working capital increased to $67.6 million at October 1, 1995 from $37.0
million at April 2, 1995. This was due mainly to a reduction in notes payable
of $15.1 million and an increase in inventories of $13.7 million which, among
other things, were financed by an increase in long-term debt.
Total debt outstanding increased to $62.6 million at October 1, 1995 from $25.1
million at April 2, 1995. The ratio of debt to equity was 0.8:1 at October 1,
1995, and 0.3:1 at April 2, 1995. The Company's borrowing needs increased as
it utilized funds of $15.5 million for capital expenditures primarily in
connection with the Calhoun Distribution Center expansion and the Dalton
weaving facility project. Expenditures of $4.0 million for the acquisition of
Textile, Inc. and $7.5 million for common stock repurchases, and financing
needs for the increased inventory levels also were met through additional
borrowings.
Inventories increased to $58.6 million at October 1, 1995 from $44.9 million at
April 2, 1995. This increase was partly attributable to producing inventory
based on anticipated customer order levels that were higher than the actual
order volume received, and a normal inventory build up to bring stock to
adequate levels to meet the heavier shipping demands of the fall season. The
Company is focusing efforts on an inventory reduction plan, which combined with
the inventory declines that normally occur in the third and fourth fiscal
quarters, should result in inventory levels at the end of the fiscal year being
equal to or below the prior year-end levels exclusive of inventories of
acquired companies.
In addition to the long-term revolving credit facilities described above, The
Company has short-term credit lines with two banks aggregating $40.0 million
which are used as needed.
-9-
<PAGE> 11
FORM 10-Q
CROWN CRAFTS, INC. AND SUBSIDIARIES
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings
None
Item 2 - Changes in Securities
None
Item 3 - Defaults Upon Senior Securities
None
Item 4 - Submission of Matters to Vote of Security Holders
The Registrant's Annual Meeting of Shareholders was held on August 8,
1995. The following matters were submitted to a vote of security
holders of the Registrant through the solicitation of proxies.
Amendment to the Crown Crafts, Inc. Bylaws to classify the Company's
Board of Directors
A proposal to amend the Company's Bylaws to divide the Board into
three classes as nearly equal in size as possible was passed. After
a start-up period during which two classes will be elected for
one-year and two-year terms, the term of office of the directors of
each class shall expire at the third annual meeting after their
election. There were 3,935,394 shares voted in favor of the
amendment, 2,535,304 shares against the amendment, and 1,292,881
abstentions.
Directors of the Registrant were elected as follows:
<TABLE>
<CAPTION>
Three Year Term: Two Year Term: One Year Term:
---------------- -------------- --------------
<S> <C> <C>
Michael H. Bernstein E. Randall Chestnut Philip Bernstein
Paul A. Criscillis, Jr. Roger D. Chittum Rudolph J. Schmatz
Richard N. Toub Patricia G. Knoll Jane E. Shivers
Alfred M. Swiren
</TABLE>
Amendment to the Crown Crafts, Inc. Articles of Incorporation to
increase authorized Common Stock
A proposal to amend the Company's Articles of Incorporation to
provide for an increase to 50,000,000 the number of authorized shares
of common stock, $1.00 par value was passed. There were 5,812,624
shares voted in favor of the amendment, 1,937,516 shares against the
amendment, and 13,439 abstentions.
-10-
<PAGE> 12
Amendment to the Crown Crafts, Inc. Articles of Incorporation to
authorize a new class of Preferred Stock
A proposal to amend the Company's Articles of Incorporation to
authorize the creation of a new class of 10,000,000 shares of
Preferred Stock was defeated. Approval would have required the
affirmative vote of two-thirds of the outstanding shares. There
were 4,114,433 shares voted in favor of the amendment, 2,361,042
shares against the amendment, and 1,288,104 abstentions.
Adoption of the Crown Crafts, Inc. 1995 Stock Option Plan
A proposal to approve the Crown Crafts, Inc. 1995 Stock Option Plan
was passed. There were 5,046,226 shares in favor of the proposal,
1,420,669 shares against the proposal, and 1,296,684 abstentions.
Item 5 - Other Information
None
Item 6 - Exhibits and Reports on Form 8-K
<TABLE>
<CAPTION>
(A) EXHIBIT NUMBER DESCRIPTION OF EXHIBITS
-------------- -----------------------
<S> <C>
3(a) Restated Articles of Incorporation of Registrant
3(b) Bylaws of Registrant
10(a)(viii) Letter Agreement with The Prudential Insurance Company of
America dated October 12, 1995
10(b)(iv) Crown Crafts, Inc. 1995 Stock Option Plan
10(b)(v) Form of Nonstatutory Stock Option Agreement (pursuant to 1995
Stock Option Plan)
10(b)(vi) Form of Nonstatutory Stock Option Agreement for Nonemployee
Directors (pursuant to 1995 Stock Option Plan)
10(c) Revolving Credit Agreement dated August 22, 1995 with
NationsBank, National Association (Carolinas)
10(d) Revolving Credit Agreement dated August 22, 1995 with Wachovia
Bank of Georgia, N.A.
10(e) Note Purchase and Private Shelf Facility dated October 12, 1995
with The Prudential Insurance Company of America
27 Financial Data Schedule (for SEC use only)
</TABLE>
(B) In the quarter ended October 1, 1995, the Company filed one report
on Form 8-K:
(1) Form 8-K dated August 22, 1995, covering Items 5 and 7.
-11-
<PAGE> 13
FORM 10-Q
CROWN CRAFTS, INC. AND SUBSIDIARIES
OCTOBER 1, 1995
SIGNATURES
Pursuant to the requirements of the securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CROWN CRAFTS, INC.
---------------------------------
Date: November 15, 1995 /s/ Robert E. Schnelle
----------------- ----------------------------------
ROBERT E. SCHNELLE
Treasurer
(Chief Accounting Officer)
-12-
<PAGE> 1
EXHIBIT 3(a)
RESTATED ARTICLES OF INCORPORATION
OF
CROWN CRAFTS, INC.
1.
The name of the corporation is "CROWN CRAFTS, INC."
2.
The corporation is organized pursuant to the provisions of the
Georgia Business Corporation Code.
3.
The period of duration of the corporation is perpetual.
4.
The general nature of the business of said corporation is the
manufacture and sale of home furnishings products, and the corporation shall
have the power to engage in any and all other types of business.
5.
(a) The maximum amount of shares of stock that this
corporation shall be authorized to issue shall be 50,000,000 shares, all of
which shares shall be Common Stock with a par value of $1.00 per share.
The Common Stock may be created and issued from time to time
in one or more series with voting rights for each series as determined by the
Board of Directors of the Corporation and set forth in the resolution or
resolutions providing for the creation and issuance of the stock in such
series.
<PAGE> 2
(b) The Corporation shall have the authority to issue
fractional shares of with proportionate dividend, liquidation and voting
rights.
6.
No holder of any of the shares of stock of the corporation,
whether now or hereafter authorized or issued, shall have any pre-emptive
rights or preference rights, or be entitled, as of right, to purchase or
subscribe for (a) any unissued stock of any class, or (b) any additional stock
of any class to be issued by reason of any increase in the authorized capital
stock of the corporation of any class, or (c) any warrants, options or rights
to purchase or subscribe for shares of stock of the corporation of any class,
or to purchase or subscribe for any convertible or exchangeable obligations,
whether now or hereafter authorized or whether unissued or issued and
thereafter acquired by the corporation. Any such stock or other securities
herein enumerated may be issued and disposed of pursuant to resolutions of the
Board of Directors at such prices and upon such terms as may be deemed
advisable to the Board of Directors in the exercise of its discretion.
7.
(a) A director of the corporation shall not be personally
liable to the corporation or its shareholders for monetary damages for breach
of duty of care or other duty as a
2
<PAGE> 3
director, except for liability (i) for any appropriation, in violation of his
duties, of any business opportunity of the corporation; (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a
knowing violation of law; (iii) of the types set forth in Section 14-2-154 of
the Georgia Business Corporation Code; or (iv) for any transaction from which
the director derived an improper personal benefit. The provisions of this
article shall not apply with respect to acts or omissions occurring prior to
the effective date of this article.
(b) Any repeal or modification of the provisions of this
article by the shareholders of the corporation shall be prospective only, and
shall not adversely affect any limitation on the personal liability of a
director of the corporation with respect to any act or omission occurring prior
to the effective date of such repeal or modification.
(c) If the Georgia Business Corporation Code hereafter is
amended to authorize the further elimination or limitation of the liability of
directors, then the liability of a director of the corporation, in addition to
the limitation on liability provided herein, shall be limited to the fullest
extent permitted by the amended Georgia Business Corporation Code.
Specifically, and not in limitation of the foregoing sentence, in the event
that the Georgia Business Corporation Code is amended to permit the elimination
of the reference to a lack of "good faith" in clause
3
<PAGE> 4
(ii) of paragraph (a) of Article Seven above, then, effective immediately upon
the effective date, if any, of such amendment, clause (ii) of paragraph (a) of
this Article 7 shall be deemed to read exactly as the corresponding provision
of the Georgia Business Corporation Code, as so amended.
(d) In the event that any of the provisions of this article
(including any provision within a single sentence) are held by a court of
competent jurisdiction to be invalid, void or otherwise unenforceable, the
remaining provisions are severable and shall remain enforceable to the fullest
extent permitted by law.
8.
(a) Any director, or the entire Board of Directors, may
be removed from office at any time, with or without cause, but only by the
affirmative vote of the holders of at least seventy-five percent of the
outstanding shares of capital stock of the corporation entitled to vote in the
election of directors at a meeting called for that purpose.
(b) Vacancies on the Board of Directors shall be filled
as follows:
(i) any vacancy resulting from removal of a
director from office by the shareholders shall be filled by the affirmation
vote of the holders of a majority of the outstanding shares of capital stock of
the corporation entitled to vote thereon; and
4
<PAGE> 5
(ii) any vacancy resulting from any other event
may be filled by a vote of the majority of the directors then in office, though
less than a quorum, or by the sole remaining director or, if there are no
directors in office, by the affirmative vote of the holders of a majority of
the outstanding shares of capital stock of the corporation entitled to vote
thereon.
(c) Notwithstanding any other provision of these articles
or the by-laws of the corporation (and in addition to any other vote that may
be specified by law, these articles or the by-laws), the provisions of this
article may not be repealed or amended in any respect, nor may any provision of
these articles or the by-laws be adopted inconsistent with this article, unless
such action is approved by the affirmative vote of the holders of not less than
seventy-five percent of the outstanding shares of capital stock of the
corporation entitled to vote in the election of directors.
9.
Subject to the provisions of Articles 8 and 10 hereof, the
corporation shall have the power to amend its articles of incorporation upon
the affirmative vote of the holders of two-thirds of the corporation's
outstanding Common Stock; and all rights conferred upon stockholders, directors
and officers herein are granted subject to this reservation.
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10.
(a) Special meetings of the shareholders, for any purpose
or purposes, unless otherwise prescribed by statute, may be called by the Board
of Directors or the Chairman of the Board, and shall be called by the Chairman
of the Board or the Secretary at the request in writing of the holders of not
less than seventy-five percent of the outstanding shares of capital stock of
the corporation entitled to vote in the election of directors.
(b) Nominations by shareholders of persons for election
by the shareholders to the Board of Directors of the corporation may be made at
a meeting of shareholders at which directors are to be elected only (i) by or
at the direction of the Board of Directors or (ii) by any shareholder of the
corporation entitled to vote in the election of directors at the meeting who
gives written notice of such nomination to the Secretary of the corporation in
accordance with this paragraph (b). Such notice shall be delivered or mailed
to and received at the principal executive offices of the corporation not more
than 90 days nor less than 60 days prior to the date of an annual meeting; and,
in the case of a special meeting, not later than the close of business on the
15th day following the day on which notice of the date of the special meeting
was mailed to the shareholders. Such notice shall set forth (i) as to each
person whom the shareholder giving notice proposes to nominate for election or
reelection as a director, all
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information relating to such person that is required to be disclosed in
solicitations of proxies for election of directors, or is otherwise required,
in each case pursuant to Regulation 14A under the Securities Exchange Act of
1934, as amended, and shall include each such person's written consent to serve
as a director if elected; and (ii) as to the shareholder giving the notice (x)
the name and address of such shareholder as they appear on the corporation's
books, and (y) the class and number of shares of the corporation's capital
stock that are beneficially owned by such shareholder. At the request of the
Board of Directors, any person nominated by the Board of Directors for election
as a director shall furnish to the Secretary of the corporation that
information required to be set forth in a shareholder's notice of nomination
which pertains to the nominee. No person shall be eligible for election by the
shareholders as a director of the corporation unless nominated in accordance
with the provisions of this paragraph (b). The officer of the corporation or
other person presiding at the meeting shall, if the facts so warrant, determine
and declare to the meeting that a nomination was not made in accordance with
such provisions and, if he shall so determine and declare, the nomination shall
be disregarded.
(c) At any meeting of the shareholders, only such
business shall be conducted as shall have been brought before the meeting (i)
by or at the direction of the Board of Directors or
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(ii) by any shareholder of the corporation who is entitled to vote with respect
thereto and who gives written notice of such business to the Secretary of the
corporation in accordance with this paragraph (c). Such notice must be
delivered or mailed to and received at the principal executive offices of the
corporation not more than 90 days nor less than 60 days prior to the date of an
annual meeting and, in the case of a special meeting, not later than the close
of business on the 15th day following the day on which notice of the date of
the special meeting was mailed to the shareholders. Such notice shall set
forth as to each matter such shareholder proposes to bring before the meeting
(i) a brief description of the business desired to be brought before the
meeting and the reasons for conducting such business at the meeting, (ii) the
name and address, as they appear on the corporation's books, of the shareholder
proposing such business, (iii) the class and number of shares of the
corporation's capital stock that are beneficially owned by such shareholder,
and (iv) any material interest of such shareholder in such business.
Notwithstanding anything in the corporation's by-laws to the contrary, no
business shall be brought before or conducted at a meeting except in accordance
with the provisions of this paragraph (c). The officer of the corporation or
other person presiding at the meeting shall, if the facts so warrant, determine
and declare to the meeting that business was not properly brought before the
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meeting in accordance with such provisions and, if he shall so determine and
declare, such business shall not be transacted. Notwithstanding the provisions
of this paragraph (c), if the corporation is subject to Rule 14a-8 under the
Securities Exchange Act of 1934, business consisting of a proposal properly
included in the corporation's proxy statement with respect to a meeting
pursuant to such Rule may be transacted at a meeting.
(d) Notwithstanding any other provisions of these
articles or the by-laws (and in addition to any other vote that may be
specified by law, these articles or the by-laws), the provisions of this
article may not be repealed or amended in any respect, nor may any provision of
these articles or the by-laws be adopted inconsistent with this article, unless
such action is approved by the affirmative vote of the holders of not less
than seventy-five percent of the outstanding shares of capital stock of the
corporation entitled to vote in the election of directors.
* * *
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EXHIBIT 3(b)
BY LAWS
OF
CROWN CRAFTS, INC.
ARTICLE I
OFFICES
Section 1. Registered Office. The registered office shall be
in the State of Georgia, County of Fulton.
Section 2. Other Offices. The corporation may also have
offices at such other places both within and without the State of Georgia as
the board of directors may from time to time determine and the business of the
corporation may require or make desirable.
ARTICLE II
SHAREHOLDERS MEETINGS
Section 1. Annual Meetings. The annual meeting of the
shareholders of the corporation shall be held at the principal office of the
corporation or at such other place in the United States as may be determined by
the board of directors, at 2:00 p.m. on the second Tuesday of the fifth month
following the close of each fiscal year or at such other time and date prior
thereto and following the close of the fiscal year as shall be determined by
the board of directors, for the purpose of electing directors and transacting
such other business as may properly be brought before the meeting.
Section 2. Special Meetings. Special meetings of the
shareholders shall be held at the principal office of the corporation or at
such other place in the United States as may be designated in the notice of
said meetings, upon call of the chairman of the board of directors or the
president and shall be called by the president or the secretary when so
directed by the board of directors or at the request in writing of shareholders
owning at least 50% of the issued and outstanding capital stock of the
corporation entitled to vote thereat. Any such request shall state the
purposes for which the meeting is to be called.
Section 3. Notice of Meetings. Written notice of every
meeting of shareholders, stating the place, date and hour of the meetings,
shall be given personally or by mail to each shareholder of record entitled to
vote at such meeting not less than 10 nor more than 50 days before the date of
the meeting. If mailed, such
<PAGE> 2
notice shall be deemed to be delivered when deposited in the United States mail
with first class postage thereon prepaid addressed to the shareholder at his
address as it appears on the corporation's record of stockholders. Attendance
of a shareholder at a meeting of shareholders shall constitute a waiver of
notice of such meeting and of all objections to the place or time of meeting,
or the manner in which it has been called or convened, except when a
shareholder attends a meeting solely for the purpose of stating, at the
beginning of the meeting, any such objection to the transaction of any
business. Notice need not be given to any shareholder who signs a waiver of
notice, in person or by proxy, either before or after the meeting.
Section 4. Quorum. The holders of a majority of the stock
issued and outstanding and entitled to vote thereat, present in person or
represented by proxy, shall constitute a quorum for the transaction of business
at all meetings of the shareholders except as otherwise provided by statute, by
the articles of incorporation, or by these by-laws. If a quorum is not
present or represented at any meeting of the shareholders, a majority of the
shareholders entitled to vote thereat, present in person or represented by
proxy, may adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present or represented.
At such adjourned meeting at which a quorum shall be present or represented,
any business may be transacted which might have been transacted at the meeting
as originally notified. If the adjournment is for more than 30 days, or if
after the adjournment a new record date is fixed for the adjourned meeting, a
notice of the adjourned meeting shall be given to each shareholder of record
entitled to vote at the meeting.
Section 5. Order of Business. At the annual meeting of
shareholders the order of business shall be as follows:
1. Calling meeting to order.
2. Proof of notice of meeting.
3. Reading of minutes of last
previous annual meeting.
4. Reports of officers.
5. Reports of committees.
6. Election of directors.
7. Miscellaneous business.
Section 6. Voting. When a quorum is present at any meeting,
the vote of the holders of a majority of the stock having voting power present
in person or represented by proxy shall decide any question brought before such
meeting, unless the question is one upon which by express provision of law or
of the articles of
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incorporation, a different vote is required, in which case such express
provision shall govern and control the decision of the question. Each
shareholder shall at every meeting of the shareholders be entitled to one vote
in person or by proxy for each share on the capital stock having voting power
registered in his name on the books of the corporation, but no proxy shall be
voted or acted upon after 11 months from its date, unless otherwise provided in
the proxy.
Section 7. Consent of Shareholders. Any action required or
permitted to be taken at any meeting of the shareholders may be taken without a
meeting if all of the shareholders consent thereto in writing, setting forth
the action so taken. Such consent shall have the same force and effect as a
unanimous vote of shareholders.
Section 8. List of Shareholders. The corporation shall keep
at its registered office or principal place of business, or a the office of the
transfer agent or registrar, a record of its shareholders, giving their names
and addresses and the number, class and series, if any, of the shares held by
each. The officer who has charge of the stock transfer books of the
corporation shall prepare and make, before every meeting of shareholders or any
adjournment thereof, a complete list of the shareholders entitled to vote at
the meeting or any adjournment thereof, arranged in alphabetical order, with
the address of and the number and class series, if any, of shares held by each.
The list shall be produced and kept open at the time and place of the meeting
and shall be subject to inspection by any shareholder during the whole time of
the meeting for the purposes thereof. The said list may be the corporation's
regular record of shareholders if it is arranged in alphabetical order or
contains an alphabetical index.
ARTICLE III
DIRECTORS
Section 1. Powers. Except as otherwise provided by any legal
agreement among shareholders, the property, affairs and business of the
corporation shall be managed and directed by its board of directors, which may
exercise all powers of the corporation and do all lawful acts and things which
are not by law, by any legal agreement among shareholders, by the articles of
incorporation or by these by-laws directed or required to be exercised or done
by the shareholders.
Section 2. Number, Election and Term. The number of directors
which shall constitute the whole board shall be not less than three nor more
than fifteen, the exact number thereof to be
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determined by resolution of the Board of Directors; provided, however, that the
number of directors may be increased or decreased from time to time by the
Board of Directors by amendment of this by-law, but no decrease shall have the
effect of shortening the term of an incumbent director. The directors shall be
elected by plurality vote at the annual meeting of shareholders, except as
hereinafter provided. Directors shall be natural persons who have attained the
age of 18 years, but need not be residents of the State of Georgia or
shareholders of the corporation. The Board of Directors of the corporation
shall be divided into three classes which shall be as nearly equal in number as
is possible. At the first election of directors to such classified Board, each
Class 1 director shall be elected to serve until the next ensuing annual
meeting of shareholders, each Class 2 director shall be elected to serve until
the second ensuing annual meeting of shareholders and each Class 3 director
shall be elected to serve until the third ensuing annual meeting of
shareholders, and in each case until his or her successor is elected and
qualified or until his or her earlier death, resignation or removal from
office. At each annual meeting of shareholders following the meeting at which
the Board of Directors is initially classified, the number of directors equal
to the number of the class whose term expires at the time of such meeting shall
be elected to serve until the third ensuing annual meeting of shareholders.
Notwithstanding any of the foregoing provisions of this Section 2, directors
shall serve until their successors are elected and qualified or until their
earlier death, resignation or removal from office.
In the event of any change in the authorized number of
directors, the number of directors in each class shall be adjusted so that
thereafter each of the three classes shall be composed, as nearly as may be
possible, of one-third of the authorized number of directors; provided, that
any change in the authorized number of directors shall not increase or shorten
the term of any director, and any decease shall become effective only as and
when the term or terms of office of the class or classes of directors affected
thereby shall expire, or a vacancy or vacancies in such class or classes shall
occur.
Section 3. Vacancies. Vacancies, including vacancies
resulting from any increase in the number of directors, but not including
vacancies resulting from removal from office by the shareholders, may be filled
by a majority of the directors then in office, though less than a quorum, or by
a sole remaining director, and a director so chosen shall hold office until the
next annual election and until his successor is duly elected and qualified
unless sooner displaced. If there are no directors in office, then vacancies
shall be filled through election by the shareholders.
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Section 4. Meeting and Notice. The board of directors of the
corporation may hold meetings, both regular and special, either within or
without the State of Georgia. Regular meetings of the board of directors may
be held without notice at such time and place as shall from time to time be
determined by resolution of the board. Special meetings of the board may be
called by the chairman of the board or president or by any two directors on one
day's oral, telegraphic or written notice duly given or served on each director
personally, or three days' notice deposited, first class postage prepaid, in
the United States mail. Such notice shall state a reasonable time, date and
place of meeting, but the purpose need not be stated therein. Notice need not
be given to any director who signs a waiver of notice either before or after
the meeting. Attendance of a director at a meeting shall constitute a waiver
of notice of such meeting and waiver of all objections to the place and time of
the meeting, or the manner in which it has been called or convened, except when
the director states, at the beginning of the meeting, any such objection or
objections to the transaction of business.
Section 5. Quorum. At all meetings of the board a majority of
directors shall constitute a quorum for the transaction of business, and the
act of a majority of the directors present at any meeting at which there is a
quorum shall be the act of the board, except as may be otherwise specifically
provided by law, by the articles of incorporation, or by these by laws. If a
quorum shall not be present at any meeting of the board, the directors present
thereat may adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present.
Section 6. Consent of Directors. Unless otherwise restricted
by the articles of incorporation or these by-laws, any action required or
permitted to be taken at any meeting of the board of directors or any committee
thereof may be taken without a meeting, if all members of the board or
committee, as the case may be, consent thereto in writing, setting forth the
action so taken, and the writing or writings are filed with the minutes of the
proceedings of the board of committee. Such consent shall have the same force
and effect as a unanimous vote of the board.
Section 7. Committees. The board of directors may by
resolution passed by a majority of the whole board, designate from among its
members one or more committees, each committee to consist of two or more
directors. The board may designate one or more directors as alternate members
of any committee, who may replace any absent member at any meeting of such
committee. Any such committee, to the extent provided in the resolution, shall
have and
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may exercise all of the authority of the board of directors in the management
of the business and affairs of the corporation, except that it shall have no
authority with respect to (1) amending the articles of incorporation or these
by-laws; (2) adopting a plan of merger or consolidation; (3) the sale, lease,
exchange or other disposition of all or substantially all of the property and
assets of the corporation; and (4) a voluntary dissolution of the corporation
or a revocation thereof. Such committee or committees shall have such name or
names as may be determined from time to time by resolution adopted by the board
of directors. A majority of each committee may determine its action and may
fix the time and places of its meetings, unless otherwise provided by the board
of directors. Each committee shall keep regular minutes of its meetings and
report the same to the board of directors when required.
Section 8. Removal of Directors. At any shareholders'
meeting with respect to which notice of such purpose has been given, any
director may be removed from office, with or without cause, by the vote of
shareholders representing three fourths (3/4) of the issued and outstanding
capital stock entitled to vote for the election of directors, and his successor
may be elected at the same or any subsequent meeting of shareholders; provided
that to the extent any vacancy created by such removal is not filled by such an
election within 60 days after such removal, the remaining directors shall, by
majority vote, fill any such vacancy.
Section 9. Compensation of Directors. Directors shall be
entitled to such reasonable compensation for their services as directors or
members of any committee of the board as shall be fixed from time to time by
resolution adopted by the board, and shall also be entitled to reimbursement
for any reasonable expenses incurred in attending any meeting of the board or
any such committee.
ARTICLE IV
OFFICERS
Section 1. Number. The officers of the corporation shall be
chosen by the board of directors and shall be a president, a secretary and a
treasurer. The board of directors may also choose a chairman of the board, one
or more vice-presidents, assistant secretaries and assistant treasurers. Any
number of offices, except the offices of president and secretary may be held by
the same person. The board of directors may appoint such other officers and
agents as it shall deem necessary who shall hold their
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offices for such terms and shall exercise such powers and perform such duties
as shall be determined from time to time by the board.
Section 2. Compensation. The salaries of all officers and
agents of the corporation shall be fixed by the board of directors or a
committee or officer appointed by the board. Salary payments made to an
officer of the corporation that shall be disallowed in whole or in part as a
deductible expense by the corporation for Federal income tax purposes shall be
reimbursed by such officer to the corporation to the full extent of the
disallowance. It shall be the duty of the board of directors to enforce
payment of each such amount disallowed.
Section 3. Term of office. Unless otherwise provided by
resolution of the board of directors, the principal officers shall be chosen
annually by the board at the first meeting of the board following the annual
meeting of shareholders of the corporation, or as soon thereafter as is
conveniently possible. Subordinate officers may be elected from time to time.
Each officer shall serve until his successor shall have been chosen and
qualified, or until his death, resignation or removal.
Section 4. Removal. Any officer may be removed from office
at any time, with or without cause, by the board of directors whenever in its
judgment the best interest of the corporation will be served thereby.
Section 5. Vacancies. Any vacancy in an office resulting
from any cause may be filled by the board of directors.
Section 6. Powers and Duties. Except as hereinafter
provided, the officers of the corporation shall each have such powers and
duties as generally pertain to their respective offices, as well as such powers
and duties as from time to time may be conferred by the board of directors.
(a) President. The president shall be the chief executive
officer of the corporation, shall preside at all meetings of the
shareholders and (unless the board shall have created an office of
chairman of the board) the board of directors, shall have general and
active management of the business of the corporation and shall see
that all orders and resolutions of the board of directors are carried
into effect. He shall execute bonds, mortgages and other contracts
requiring a seal, under the seal of the corporation, except where
required or permitted by law to be otherwise signed and executed and
except where the signing and execution thereof
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shall be expressly delegated by the board of directors to some other
officer or agent of the corporation.
(b) Vice-President. In the absence of the president or in
the event of his inability or refusal to act, the vice-president (or
in the event there be more than one vice-president, the
vice-presidents in the order designated, or in the absence of any
designation, then in the order of their election) shall perform the
duties of the president, and when so acting, shall have all the powers
of and be subject to all the restrictions upon the president. The
vice-presidents shall perform such other duties and have such other
powers as the board of directors may from time to time prescribe.
(c) Secretary. The secretary shall attend all meetings of
the board of directors and all meetings of the shareholders and record
all the proceedings of the meetings of the corporation and of the
board of directors in a book to be kept for that purpose and shall
perform like duties for the standing committees when required. He
shall give, or cause to be given, notice of all meetings of the
shareholders and special meetings of the board of directors, and shall
perform such other duties as may be prescribed by the board of
directors or president, under whose supervision he shall be. He shall
have custody of the corporate seal of the corporation and he, or an
assistant secretary, shall have authority to affix the same to any
instrument requiring it and when so affixed, it may be attested by his
signature or by the signature of such assistant secretary. The board
of directors may give general authority to any other officer to affix
the seal of the corporation and to attest the affixing by his
signature.
(d) Assistant Secretary. The assistant secretary or if
there be more than one, the assistant secretaries in the order
determined by the board of directors (or if there by no such
determination, then in the order of their election), shall, in the
absence of the secretary or in the event of his inability or refusal
to act, perform the duties and exercise the powers of the secretary
and shall perform such other duties and have such other powers as the
board of directors may from time to time prescribe.
(e) Treasurer. The treasurer shall have the custody of
the corporate funds and securities and shall keep full and accurate
accounts of receipts and disbursements in books belonging to the
corporation and shall deposit all moneys and other valuable effects in
the name and to the credit of the
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corporation in such depositories as may be designated by the board of
directors. He shall disburse the funds of the corporation as may be
ordered by the board of directors, taking proper vouchers for such
disbursements and shall render to the president and the board of
directors at its regular meetings, or when the board of directors so
requires, an account of all his transactions as treasurer and of the
financial condition of the corporation. If required by the board of
directors, he shall give the corporation a bond (which shall be
renewed every six years) in such sum and with such surety or sureties
as shall be satisfactory to the board of directors for the faithful
performance of the duties of his office and for the restoration to the
corporation, in case of his death, resignation, retirement or removal
from office, of all books, paper, vouchers, money and other property
of whatever kind in his possession or under his control belonging to
the corporation.
(f) Assistant Treasurer. The assistant treasurer, or if
there shall be more than one, the assistant treasurers in the order
determined by the board of directors (or if there be no such
determination, then in the order of their election), shall, in the
absence of the treasurer or in the event of his inability or refusal
to act, perform the duties and exercise the powers of the treasurer
and shall perform such other duties and have such other powers as the
board of directors may from time to time prescribe.
Section 7. Voting Securities of Corporation. Unless
otherwise ordered by the board of directors, the president shall have full
power and authority on behalf of the corporation to attend and to act and vote
at any meetings of security holders of corporations in which the corporation
may hold securities, and at such meetings shall possess and may exercise any
and all rights and powers incident to the ownership of such securities which
the corporation might have possessed and exercised if it had been present. The
board of directors by resolution from time to time may confer like powers upon
any other person or person.
ARTICLE V
CERTIFICATES OF STOCK
Section 1. Form of Certificate. Every holder of fully-paid
stock in the corporation shall be entitled to have a certificate in such form
as the board of directors may from time to time prescribe.
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Section 2. Lost Certificates. The board of directors may
direct that a new certificate be issued in place of any certificate theretofore
issued by the corporation and alleged to have been lost, stolen or destroyed,
upon the making of an affidavit of that fact by the person claiming the
certificate of stock to be lost, stolen or destroyed. When authorizing such
issue of a new certificate, the board of directors may, in its discretion and
as a condition precedent to the issuance thereof, require the owner of such
lost, stolen or destroyed certificate, or his legal representative, to
advertise the same in such manner as it shall require and/or to give the
corporation a bond in such sum as it may direct as indemnity against any claim
that may be made against the corporation with respect to the certificate
alleged to have been lost, stolen or destroyed.
Section 3. Transfers. (a) Transfers of shares of the
capital stock of the corporation shall be made only on the books of the
corporation by the registered holder thereof, or by his duly authorized
attorney, or with a transfer clerk or transfer agent appointed as in Section 5
of this Article provided, and on surrender of the certificate or certificates
for such shares properly endorsed and the payment of all taxes thereon.
(b) The corporation shall be entitled to recognize the
exclusive right of a person registered on its books as the owner of shares to
receive dividends, and to vote as such owner, and for all other purposes, and
shall not be bound to recognize any equitable or other claim to or interest in
such share or shares on the part of any other person, whether or not it shall
have express or other notice thereof, except as otherwise provided by law.
(c) Shares of capital stock may be transferred by delivery of
the certificates therefor, accompanied either by an assignment in writing on
the back of the certificates or by separate written power of attorney to sell,
assign and transfer the same, signed by the record holder thereof, or by his
duly authorized attorney-in-fact, but no transfer shall affect the right of the
corporation to pay and dividend upon the stock to the holder of record as the
holder in fact thereof for all purposes, and no transfer shall be valid, except
between the parties thereto, until such transfer shall have been made upon the
books of the corporation as herein provided.
(d) The board may, from time to time, make such additional
rules and regulations as it may deem expedient, not inconsistent with these
by-laws or the certificate of incorporation, concerning the issue, transfer and
registration of certificates for shares of the capital stock of the
corporation.
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Section 4. Record Date. In order that the corporation may
determine the shareholders entitled to notice of or to vote at any meeting of
shareholders or any adjournment thereof, or to express consent to corporate
action in writing without a meeting, or entitled to receive payment of any
dividend or other distribution or allotment of any rights, or entitled to
exercise any rights in respect of any change, conversion or exchange of stock
or for the purpose of any other lawful action, the board of directors may fix,
in advance, a record date, which shall not be more than 50 days and, in case of
a meeting of shareholders, not less than 10 days prior to the date on which the
particular action requiring such determination of stockholders is to be taken.
If no record date is fixed for the determination of shareholders entitled to
notice of and to vote at any meeting of shareholders, the record date shall be
at the close of business on the day next preceding the day on which the notice
is given, or, if notice is waived, at the close of business on the day next
preceding the day on which the meeting is held. If no record date is fixed for
other purposes, the record date shall be at the close of business on the day
next preceding the day on which the board of directors adopts the resolution
relating thereto. A determination of shareholders of record entitled to notice
of or to vote at a meeting of shareholders shall apply to any adjournment of
the meeting unless the board of directors shall fix a new record date for the
adjourned meeting.
Section 5. Transfer Agent and Registrar. The board of
directors may appoint one or more transfer agents or one or more transfer
clerks and one or more registrars, and may require all certificates of stock to
bear the signature or signatures of any of them.
ARTICLE VI
GENERAL PROVISIONS
Section 1. Dividends. Dividends upon the capital stock of
the corporation, subject to the provisions of the articles of incorporation, if
any, may be declared by the board of directors at any regular or special
meetings, pursuant to law. Dividends may be paid in cash, in property, or in
shares of the corporation's capital stock, subject to the provisions of the
articles of incorporation. Before payment of any dividend, there may be set
aside out of any funds of the corporation available for dividends such sum or
sums as the directors from time to time, in their absolute discretion, think
proper as a reserve or reserves to meet contingencies, or for equalizing
dividends, or for repairing or maintaining any property of the corporation, or
for such other
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purpose as the directors shall think conducive to the interest of the
corporation, and the directors may modify or abolish any such reserve in the
manner in which it was created.
Section 2. Fiscal Year. The fiscal year of the corporation
shall be fixed by resolution of the board of directors.
Section 3. Seal. The corporate seal shall have inscribed
thereon the name of the corporation, the year of its organization and the words
"Corporate Seal" and "Georgia". The seal may be used by causing it or a
facsimile thereof to be impressed or affixed or reproduced or otherwise. In
the event it is inconvenient to use such a seal at any time, the signature of
the corporation followed by the word "Seal" enclosed in parentheses shall be
deemed the seal of the corporation.
Section 4. Annual Statements. Not later than four months
after the close of each fiscal year, and in any case prior to the next annual
meeting of stockholders, the corporation shall prepare:
(1) A balance sheet showing in reasonable detail the
financial condition of the corporation as of the close of its fiscal
year, and
(2) A profit and loss statement showing the results of its
operations during its fiscal year.
Upon written request, the corporation promptly shall mail to any shareholder of
record a copy of the most recent such balance sheet and profit and loss
statement.
Section 5. Application of Articles 11 and 11A of Georgia
Business Corporation Code. All of the requirements of Article 11, Parts II and
III of the Georgia Business Corporation Code shall apply to the corporation.
ARTICLE VII
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 1. Right of Indemnification. Any person who was or
is a party or who is threatened to be made a party to any threatened, pending
or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (including any action by or in the right of the
corporation) by reason of the fact that he is or was a director or officer of
the corporation or is or was serving at the request of the corporation as a
director,
12
<PAGE> 13
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, shall be indemnified by this corporation against
expenses (including attorney's fees), judgments, fines and amounts paid in
settlement in connection with such action, suit or proceeding to the full
extent to which a corporation is permitted to indemnify a director, and in the
manner prescribed, by the Georgia Business Corporation Code, as the same may be
amended from time to time.
Section 2. Advance of Expenses. Expenses incurred with
respect to any action, suit or proceeding of the character described in Section
1 of this Article VII may be advanced by the corporation prior to the final
disposition thereof upon receipt of the documentation required pursuant to
Section 14-2-853 (or any successor provisions) of the Georgia Business
Corporation Code to be submitted to the corporation by the recipient.
Section 3. Rights of Indemnification Cumulative. The rights
of indemnification provided in this Article VII shall be in addition to any
rights to which any such director or officer or other person may otherwise be
entitled under any by-law, agreement, vote of shareholders, or otherwise, and
shall be in addition to then power of the corporation to purchase and maintain
insurance on behalf of any such director or officer or other person against any
liability asserted against him and incurred by him in such capacity, or arising
out of his status as such, regardless of whether the corporation would have the
power to indemnify him against such liability under this Article or otherwise.
ARTICLE VIII
AMENDMENTS
The Board of Directors shall have power to alter, amend or
repeal the by-laws or adopt new by-laws by majority vote of all of the
directors, but any by-laws adopted by the Board of Directors may be altered,
amended or repealed and new by-laws adopted, by the shareholders by majority
vote of all of the shares having voting power.
13
<PAGE> 1
EXHIBIT 10(a)(VIII)
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
c/o Prudential Capital Group
Four Gateway Center
Newark, New Jersey 07102
October 12, 1995
CROWN CRAFTS, INC.
1600 Riveredge Parkway
Suite 200
Atlanta, Georgia 30328
Attention: Robert E. Schnelle
Treasurer
Ladies and Gentlemen:
This letter is to amend the Note Agreement dated December 18, 1990
between Crown Crafts, Inc. (the "Company") and The Prudential Insurance Company
of America ("Prudential") pursuant to which the Company issued and Prudential
purchased the Company's 9.22% promissory notes in the original principal amount
of $15,000,000 (as previously amended, the "Note Agreement"). Capitalized
terms used herein without definition have the meanings ascribed to such terms
in the Note Agreement.
Pursuant to paragraph 11C of the Note Agreement, Prudential and the
Company hereby agree as follows:
1. Paragraph 4 of the Note Agreement is hereby amended and
restated in its entirety as follows:
"4. PREPAYMENTS. The Notes shall be subject to required
prepayment as and to the extent provided in paragraph 4A. The Notes
shall also be subject to prepayment under the circumstances set forth
in paragraphs 4B and 4D. Any prepayment made by the Company pursuant
to any other provision of this paragraph 4 shall not reduce or
otherwise affect its obligation to make any required prepayment as
specified in paragraph 4A.
4A. REQUIRED PREPAYMENTS OF NOTES. Until the Notes shall
be paid in full, the Company shall apply to the prepayment of the
Notes, without Yield-Maintenance Amount, the sum of $2,500,000 on May
15 and November 15 in each of the years 1994 through 1995, and
$2,500,000 on May 15, 1996, and such principal amounts of the Notes,
together with interest thereon to the payment dates, shall
<PAGE> 2
CROWN CRAFTS, INC.
October 12, 1995
Page -2-
become due on such payment dates. The remaining unpaid principal
amount of the Notes, together with interest accrued thereon, shall
become due on the maturity date of the Notes.
4B. OPTIONAL PREPAYMENT WITH YIELD-MAINTENANCE AMOUNT.
The Notes shall be subject to prepayment, in whole at any time or from
time to time in part (in integral multiples of $100,000 and in a
minimum amount of $1,000,000), at the option of the Company, at 100%
of the principal amount so prepaid plus interest thereon to the
prepayment date and the Yield-Maintenance Amount, if any, with respect
to each such Note. Any partial prepayment of the Notes pursuant to
this paragraph 4B shall be applied in satisfaction of required
payments of principal in inverse order of their scheduled due dates.
4C. NOTICE OF OPTIONAL PREPAYMENT. The Company shall
give the holder of each Note to be prepaid pursuant to paragraph 4B
irrevocable written notice of such prepayment not less than 10
Business Days prior to the prepayment date, specifying such prepayment
date, the aggregate principal amount of the Notes to be prepaid on
such date, the principal amount of the Notes held by such holder to be
prepaid on that date and that such prepayment is to be made pursuant
to paragraph 4B. Notice of prepayment having been given as aforesaid,
the principal amount of the Notes specified in such notice, together
with interest thereon to the prepayment date and together with the
Yield-Maintenance Amount, if any, herein provided, shall become due
and payable on such prepayment date. The Company shall, on or before
the day on which it gives written notice of any prepayment pursuant to
paragraph 4B, give telephonic notice of the principal amount of the
Notes to be prepaid and the prepayment date to each Significant Holder
which shall have designated a recipient for such notices on the
Purchaser Schedule attached hereto or by notice in writing to the
Company.
4D. PREPAYMENT OF NOTES UPON CHANGE OF CONTROL. The
Company shall give written notice to each holder of a Note of the
occurrence of any Change of Control within 10 days after such
occurrence (which notice is herein referred to as the "CONTROL CHANGE
NOTICE"). A Control Change Notice shall be given by facsimile
communication confirmed by overnight courier sent on the same day of
such facsimile transmission and contain reasonable detail describing
the Change of Control and an offer by the Company to prepay 100% of
such holder's Notes on a closing date designated in such Control
Change Notice, which closing date shall be not less than 30 days or
more than 60 days after the date of such notice (such closing date
being hereinafter referred to as the "CONTROL CHANGE PREPAYMENT
DATE"). Such Control Change Notice shall also provide that each
holder of a Note may accept such offer of prepayment by notice to the
Company not more than 25 days after the
<PAGE> 3
CROWN CRAFTS, INC.
October 12, 1995
Page -3-
date of such Control Change Notice. Failure of any holder of Notes to
respond to any offer to prepay pursuant to this paragraph 4D shall
constitute an acceptance of such offer. The Company shall prepay all
of the Notes on the Control Change Prepayment Date of any holder which
has timely accepted (or which has been deemed to have accepted) the
offer of prepayment at a price equal to 100% of the principal amount
of the Notes to be prepaid, plus accrued interest thereon to the
Control Change Prepayment Date plus the Yield-Maintenance Amount, if
any, in respect of each Note to be prepaid.
For purposes of this paragraph 4D, "CHANGE OF CONTROL" shall mean the
acquisition after the date of this Agreement by any Person (as such
term is used in section 13(d) and section 14(d)(2) of the Securities
Exchange Act of 1934 as in effect on the date of this Agreement (the
"Exchange Act") or related persons constituting a group (as such term
is used in Rule 13d-5 under Exchange Act), other than any member of
the Management Group, of beneficial ownership (as such term is used
under Rule 13d-3 under the Exchange Act) directly or indirectly of
Voting Stock sufficient to elect or cause the election of at least a
majority of the Company's Board of Directors, "MANAGEMENT GROUP" shall
mean, collectively, the Company's Employee Stock Ownership Plan and
the officers and directors of the Company and "VOTING STOCK" shall
mean, with respect to any corporation, any shares of stock of such
corporation whose holders are entitled under ordinary circumstances to
vote for the election of directors of such corporation (irrespective
of whether at the time stock of any other class or classes shall have
or might have voting power by reason of the happening of any
contingency).
4E. APPLICATION OF REQUIRED PREPAYMENTS. In the case of
each prepayment of less than the entire unpaid principal amount of all
outstanding Notes pursuant to paragraphs 4A or 4D, the amount to be
prepaid shall be applied pro rata to all outstanding Notes (including,
for the purpose of this paragraph 4E only, all Notes prepaid or
otherwise retired or purchased or otherwise acquired by the Company or
any of its Subsidiaries or Affiliates other than by prepayment
pursuant to paragraph 4A or 4D) according to the respective unpaid
principal amounts thereof.
4F. RETIREMENT OF NOTES. The Company shall not, and
shall not permit any of its Subsidiaries or Affiliates to, prepay or
otherwise retire in whole or in part prior to their stated final
maturity (other than by prepayment pursuant to paragraphs 4A or 4D or
upon acceleration of such final maturity pursuant to paragraph 7A), or
purchase or otherwise acquire, directly or indirectly, Notes held by
any holder unless the Company or such Subsidiary or Affiliate shall
have offered to prepay or otherwise retire or purchase or otherwise
acquire, as the case may be, the same proportion of the aggregate
principal amount of Notes held by each other holder of Notes at the
<PAGE> 4
CROWN CRAFTS, INC.
October 12, 1995
Page -4-
time outstanding upon the same terms and conditions. Any Notes so
prepaid or otherwise retired or purchased or otherwise acquired by the
Company or any of its Subsidiaries or Affiliates shall not be deemed
to be outstanding for any purpose under this Agreement, except as
provided in paragraph 4E."
2. Paragraphs 5A, 5B, 5C, 5D, 5E, 6A, 6B, 6C, 6D and 7A(iii) of
the Note Agreement are hereby deleted and the provisions of paragraphs 5A, 5B,
5C, 5D, 5E, 6A, 6B, 6C, 6D and 7A(iii) of the 1995 Agreement (as defined below)
are hereby incorporated by reference into the Note Agreement together with all
terms defined in the Note Agreement and used in such provisions (other than the
terms "Required Holders," "Significant Holder" and "Authorized Officer" which
shall have the meanings set forth in the Note Agreement as amended hereby)(the
"Incorporated Provisions"). The Company will, and will cause its Subsidiaries
to, comply with the Incorporated Provisions irrespective of any termination,
modification, amendment, consent or waiver relating to such provisions under
the 1995 Note Agreement and irrespective of whether any promissory notes issued
under the 1995 Note Agreement remain outstanding. For purposes hereof, the term
"1995 Note Agreement" shall mean the Note Purchase and Private Shelf Agreement
dated as of October 12, 1995 between the Company and Prudential and each
Prudential Affiliate (as defined therein) that becomes a party thereto.
3. Paragraphs 10L, 10N, 10O, 10P, 10Q, 10R and 10S of the Note
Agreement are hereby amended and restated in their entirety as follows:
"10L. "REMAINING AVERAGE LIFE" shall mean, with respect to
the Called Principal of any Note, the number of years (calculated to
the nearest one-twelfth year) obtained by dividing (i) such Called
Principal into (ii) the sum of the products obtained by multiplying
(a) each Remaining Scheduled Payment of such Called Principal (but not
of interest thereon) by (b) the number of years (calculated to the
nearest one-twelfth year) which will elapse between the Settlement
Date with respect to such Called Principal and the scheduled due date
of such Remaining Scheduled Payment."
"10N. "CALLED PRINCIPAL" shall mean, with respect to any
Note, the principal of such Note that is to be prepaid pursuant to
paragraph 4B or 4D or is declared to be immediately due and payable
pursuant to paragraph 7A, as the context requires."
"10O. "DISCOUNTED VALUE" shall mean, with respect to the
Called Principal of any Note, the amount obtained by discounting all
Remaining Scheduled Payments with respect to such Called Principal
from their respective scheduled due dates to the Settlement Date with
respect to such Called Principal, in accordance with accepted
financial practice and at a discount factor (as converted to reflect
the periodic basis
<PAGE> 5
CROWN CRAFTS, INC.
October 12, 1995
Page -5-
on which interest on such Note is payable, if payable other than on a
semi-annual basis) equal to the Reinvestment Yield with respect to
such Called Principal."
"10P "REINVESTMENT YIELD" shall mean, with respect to the
Called Principal of any Note, the yield to maturity implied by (i) the
yields reported, as of 10:00 A.M. (New York City local time) on the
Business Day next preceding the Settlement Date with respect to such
Called Principal, on the display designated as "Page 678" on the
Telerate Service (or such other display as may replace page 678 on the
Telerate Service) for actively traded U.S. Treasury securities having
a maturity equal to the Remaining Average Life of such Called
Principal as of such Settlement Date, or if such yields shall not be
reported as of such time or the yields reported as of such time shall
not be ascertainable, (ii) the Treasury Constant Maturity Series
yields reported, for the latest day for which such yields have been so
reported as of the Business Day next preceding the Settlement Date
with respect to such Called Principal, in Federal Reserve Statistical
Release H.15 (519) (or any comparable successor publication) for
actively traded U.S. Treasury securities having a constant maturity
equal to the Remaining Average Life of such Called Principal as of such
Settlement Date. Such implied yield shall be determined, if
necessary, by (a) converting U.S. Treasury bill quotations to
bond-equivalent yields in accordance with accepted financial practice
and (b) interpolating linearly between yields reported for various
maturities."
"10Q. "REMAINING SCHEDULED PAYMENTS" shall mean, with respect
to the Called Principal of any Note, all payments of such Called
Principal and interest thereon that would be due on or after the
Settlement Date with respect to such Called Principal if no payment of
such Called Principal were made prior to its scheduled due date."
"10R. "SETTLEMENT DATE" shall mean, with respect to the Called
Principal of any Note, the date on which such Called Principal is to
be prepaid pursuant to paragraphs 4B or 4D or is declared to be
immediately due and payable pursuant to paragraph 7A, as the context
requires."
"10S. "YIELD-MAINTENANCE AMOUNT" shall mean, with respect to
any Note, an amount equal to the excess, if any, of the Discounted
Value of the Called Principal of such Note over the sum of (i) such
Called Principal plus (ii) interest accrued thereon as of (including
interest due on) the Settlement Date with respect to such Called
Principal. The Yield-Maintenance Amount shall in no event be less
than zero."
<PAGE> 6
CROWN CRAFTS, INC.
October 12, 1995
Page -6-
4. Paragraph 7A of the Note Agreement is hereby amended by
deleting each reference to "Yield Maintenance Premium" contained therein and
inserting in lieu thereof the term "Yield-Maintenance Amount."
5. Clause (iii) of paragraph 7A of the Note Agreement is hereby
amended by deleting the reference to "$350,000" and inserting in lieu thereof
"$1,000,000".
6. The Note Agreement is hereby amended to add a new paragraph
10AA as follows:
"10AA. "AUTHORIZED OFFICER" shall mean the chief executive
officer, chief financial officer or treasurer of the Company."
7. The Purchaser Schedule attached to the Note Agreement is
hereby replaced with Exhibit A attached hereto.
Except as modified hereby, the terms and conditions of the Note
Agreement shall remain in full force and effect.
If you agree with the foregoing, please sign the enclosed counterparts
of this letter and return them to us, at which time this letter shall become a
binding agreement between the Company and Prudential as of the date first above
written.
Very truly yours,
THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA
By: /s/ Thomas Cecka
--------------------------
Vice President
The foregoing is Agreed to and Accepted
as of the date first above written
CROWN CRAFTS, INC.
By: /s/ Robert E. Schnelle
----------------------
Robert E. Schnelle
Treasurer
<PAGE> 7
EXHIBIT A
PURCHASER SCHEDULE
<TABLE>
<CAPTION>
Aggregate
Principal
Amount of
Notes to be Note Denom-
Purchased ination(s)
--------- ----------
<S> <C> <C>
THE PRUDENTIAL INSURANCE COMPANY
OF AMERICA $15,000,000 $15,000,000
</TABLE>
(1) All payments on account of Notes held by such
purchaser shall be made by wire transfer of
immediately available funds for credit to:
Account No. 050-54-526
Morgan Guaranty Trust Company of New York
23 Wall Street
New York, New York 10015
(ABA No.: 021-000-238)
Each such wire transfer shall set forth the name
of the Company, a reference to 9.22% Senior Notes
due 1996, Security No. !Inv. 1242! and the due date
and application (as among principal, interest and
Yield-Maintenance Amount) of the payment being made.
(2) Address for all notices relating to payments:
The Prudential Insurance Company of America
c/o Prudential Capital Group
Four Gateway Center
100 Mulberry Street
Newark, New Jersey 07102-4077
Attention: Investment Structure and Pricing
<PAGE> 8
(3) Address for all other communications and notices:
The Prudential Insurance Company of America
c/o Prudential Capital Group
1230 Peachtree Street, N.E.
Suite 2525
Atlanta, Georgia 30309
Attention: Managing Director
(4) Recipient of telephone prepayment notices:
Manager, Investment Structure and Pricing
(201) 802-6429
(5) Tax Identification No.: 22-1211670
<PAGE> 1
EXHIBIT 10(b)(iv)
CROWN CRAFTS, INC.
1995 STOCK OPTION PLAN
ARTICLE
I.
DEFINITIONS
As used herein, the following terms have the meanings hereinafter set
forth unless the context clearly indicates to the contrary:
(a) "Annual Meeting Date" shall mean the date of the
annual meeting of the shareholders of the Company at which the directors are
elected.
(b) "Board" shall mean the Board of Directors of the
Company.
(c) "Change in Control" shall mean the occurrence of any
of the following:
(i) The Company is merged, consolidated
or reorganized into or with another corporation or other legal person
and as a result of such merger, consolidation or reorganization less
than two-thirds of the combined voting power of the then-outstanding
securities of such other corporation or person immediately after such
transaction are held in the aggregate by the holders of the
then-outstanding securities entitled to vote generally in the election
of directors (the "Voting Stock") of the Company immediately prior to
such transaction;
(ii) The Company sells or otherwise
transfers all or substantially all of its assets to any other
corporation or other legal person, and as a result of such sale or
transfer, less than two-thirds of the combined voting power of the
then-outstanding voting securities of such other corporation or entity
immediately after such sale or transfer are held in the aggregate by
the holders of Voting Stock of the Company immediately prior to such
sale or transfer;
(iii) The shareholders of the Company approve any
plan or proposal for the liquidation or dissolution of the Company;
(iv) There is a report filed on Schedule
13D or Schedule 14D-1 under the Exchange Act (or any successor
schedule, form, report or item therein), disclosing that any person
(as the term "person" is used in Section 13(d)(3) or Section 14(d)(2)
of the Exchange Act) has become the beneficial owner (as defined under
Rule 13d-3 or any successor
<PAGE> 2
rule) of securities representing 20% or more of the combined voting
power of the Voting Stock of the Company;
(v) The Company files a report or proxy
statement with the Securities and Exchange Commission pursuant to the
Exchange Act disclosing in, or in response to, Form 8-K or Schedule
14A (or any successor schedule, form or report) that a change in
control of the Company has or may have occurred or will or may occur
in the future pursuant to any then-existing contract or transaction;
or
(vi) If during any period of two
consecutive years, individuals who at the beginning of such period
constitute the directors of the Company cease for any reason to
constitute at least two-thirds thereof; provided, however, that for
such purposes each director who is first elected, or first nominated
for election by the Company's shareholders, by a vote of at least
two-thirds of the directors of the Company then still in office who
were directors of the Company at the beginning of any such period will
be deemed to have been a director of the Company at the beginning of
such period; or
(vii) Notwithstanding the foregoing provisions of
paragraphs (iv) or (v) above, a Change in Control shall not be deemed
to have occurred for purposes of paragraphs (iv) or (v) solely because
(a) any entity in which the Company, directly or indirectly,
beneficially owns 50% or more of the voting securities of such entity
(an "Affiliate"), (b) any Company-sponsored employee stock ownership
plan or any other employee benefit plan of the Company or any
Affiliate or (c) any group whose beneficial ownership includes Voting
Stock owned of record or beneficially, directly or indirectly, by
Philip Bernstein, his spouse or his lineal descendants, either files
or becomes obligated to file a report or a proxy statement under or in
response to Schedule 13D, Schedule 14D-1, Form 8-K or Schedule 14A (or
any successor schedule, form or report) under the Exchange Act,
disclosing beneficial ownership by it of shares of Voting Stock,
whether in excess of 20% or otherwise, or because the Company reports
that a change in control of the Company has or may have occurred or
will or may occur in the future by reason of such beneficial
ownership;
(viii) Notwithstanding the foregoing paragraphs (i)
through (vi) above, solely with respect to Options granted under
Article VI to Employees (and not with respect to any Option granted to
a Nonemployee Director under Article VII) a Change in Control shall
not be deemed to have occurred if so determined by a vote of a
majority of the directors described in paragraph (vi) above prior to
an event described in paragraph (i) through (iii) or within 90 days
after the occurrence of an event described in paragraph (iv) or (v)
above.
<PAGE> 3
(d) "Code" shall mean the Internal Revenue Code of 1986,
as amended.
(e) "Committee" shall mean a committee of the Board
designated by the Board to administer the Plan. For purposes of any action
taken with respect to an Option granted to an officer or director of the
Company subject to Section 16 of the Exchange Act, the Committee shall consist
solely of two or more Nonemployee Directors. For purposes of any action taken
with respect to an Option granted to any other Employee, the Committee may
delegate its authority under the Plan to any member or members of the Board.
(f) "Company" shall mean Crown Crafts, Inc., a Georgia
corporation.
(g) "Disabled Person" shall mean an Employee who, as
determined by a licensed physician acceptable to the Committee and evidenced by
a certificate to the Company, is completely unable to engage in the Employee's
regular occupation by reason of any physical or mental impairment that can be
expected to result in death or that has lasted or can be expected to last for a
continuous period of not less than twelve (12) months; provided, the
determination of the Committee in its sole discretion as to the classification
of an employee as a Disabled Person shall be final.
(h) "Effective Date" shall mean May 13, 1995.
(i) "Employee" shall mean any common law employee of the
Company or any of its Subsidiaries who is determined by the Committee to be a
"key employee" of the Company or such Subsidiary.
(j) "Exchange Act" shall mean the Securities Exchange
Act of 1934, as amended.
(k) "Fair Market Value" shall mean the fair market value
of the Stock as determined by the Committee for the date in question. If the
Stock is listed on a national securities exchange, the fair market value per
share of Stock shall be not less than 100% of the closing price of the Stock on
such national securities exchange on such date. If the Stock is listed on a
national securities exchange but no sales of shares of Stock occurred thereon
on such date, the fair market value per share of Stock shall be not less than
100% of the closing price of the Stock on the closest date preceding such date.
If the Stock is not listed on a national securities exchange, the fair market
value of the Stock shall be determined by the method or procedures as
established from time to time by the Committee.
(l) "Incentive Stock Option" shall mean an option to
purchase any stock of the Company, which option complies with and is subject to
the terms, limitations and conditions of Section 422 of the Code and any
regulations promulgated with respect thereto.
(m) "LSAR" shall mean a limited stock appreciation right
<PAGE> 4
granted pursuant to Article VIII of the Plan.
(n) "Nonemployee Director" shall mean a member of the
Board of Directors who is not an Employee at the time of grant of an Option.
(o) "Nonstatutory Stock Option" shall mean an option to
purchase any stock of the Company, which option does not qualify for treatment
as an Incentive Stock Option under Section 422 of the Code but instead is
subject to tax under Section 83 of the Code.
(p) "Option" shall mean either an Incentive Stock Option
or a Nonstatutory Stock Option granted to an Employee or Nonemployee Director
pursuant to the Plan.
(q) "Optionee" shall mean an Employee or Nonemployee
Director to whom an Option has been granted hereunder.
(r) "Plan" shall mean the Crown Crafts, Inc. 1995 Stock
Option Plan, the terms of which are set forth herein.
(s) "Rule 16b-3" shall mean Rule 16b-3 promulgated by the
Securities and Exchange Commission under Section 16 of the Exchange Act (or any
successor rule to the same effect) as in effect from time to time.
(t) "Stock" shall mean the $1.00 par value common stock
of the Company or, in the event that the outstanding shares of Stock are
hereafter changed into or exchanged for shares of a different class or series
of stock or other securities of the Company or some other corporation, such
other stock or securities.
(u) "Stock Option Agreement" shall mean a written
document evidencing an Option grant by the Company to the Optionee under which
the Optionee may purchase Stock under the Plan.
(v) "Subsidiary" shall mean any corporation in which the
Company owns or controls directly or indirectly more than 50% of the total
combined voting power represented by all classes of stock issued by such
corporation at the time of grant of any Option.
(w) "Ten Percent Shareholder" shall mean any person who,
as of the date an Option is granted to such person, owns or is considered to
own stock representing more than 10% of the total combined voting power of all
classes of stock of the Company. For this purpose, a person shall be
considered to own (i) the stock owned, directly or indirectly, by or for such
person's brothers and sisters (whether by the whole or half blood), spouse,
ancestors and lineal descendants; and (ii) the stock owned, directly or
indirectly, by or for a corporation, partnership, estate or trust in proportion
to such person's stock interest, partnership interest or beneficial interest
therein.
<PAGE> 5
ARTICLE II.
THE PLAN
2.1 Purpose. The purpose of the Plan is to advance the interests
of the Company and its shareholders by affording selected Employees and
Nonemployee Directors an opportunity to acquire or increase their proprietary
interests in the Company by granting such persons Options to purchase Stock in
the Company.
2.2 Effective Date. The Plan shall become effective on the
Effective Date; provided, if the Plan is not approved by the holders of a
majority of the shares of stock of the Company represented at a meeting and
entitled to vote thereon within 12 months before or after the date on which the
Plan is adopted by the Board, the Plan and any Options granted thereunder shall
terminate and become null and void.
2.3 Termination Date. Subject to Section 2.2 hereof, the Plan
shall terminate and no further Options shall be granted hereunder upon the 10th
anniversary of the Effective Date.
ARTICLE III.
PARTICIPANTS
Employees and Nonemployee Directors shall be eligible to participate
in the Plan. The Committee may grant Options to any Employee as it may
determine from time to time in its sole discretion. In addition, Nonemployee
Directors shall be awarded Options on a nondiscretionary basis as provided in
Article VII hereof.
ARTICLE IV.
ADMINISTRATION
4.1 Duties and Powers of Committee.
(a) The Plan shall be administered by the Committee. The
Board may from time to time remove members from, or add members to, the
Committee and shall fill any vacancy on the Committee. The Committee shall
keep minutes of its meetings and shall make such rules and regulations for the
conduct of its business as it may deem necessary. The determination of the
Committee on the matters referred to in this Section 4.1 shall be conclusive.
(b) Subject to the express provisions of the Plan, the
Committee shall have the discretion and authority to determine to whom from
among the Employees an Option will be granted, the time or times at which each
Option granted to an Employee may be
<PAGE> 6
exercised, the number of shares of Stock subject to each such Option and the
terms and conditions of each such Stock Option Agreement. Subject to the
express provisions of the Plan, the grant of an Option by the Committee shall
be final and shall not be subject to approval by any other party.
Notwithstanding the foregoing or anything in the Plan to the contrary, the
Committee shall not exercise discretion with respect to grants of Options to
Nonemployee Directors or the terms and conditions of Stock Option Agreements
with Nonemployee Directors, which shall be subject to Article VII hereof.
(c) Subject to the express provisions of the Plan, the
Committee shall also have complete authority to interpret the Plan, to
prescribe, amend and rescind rules and requirements relating to it, to
determine the details and provisions of each Stock Option Agreement, and to
make all other determinations necessary or advisable in the administration of
the Plan, including, without limitation, the amending or altering of the Plan
and any Options granted hereunder as may be required to comply with or to
conform to any federal, state or local laws or regulations.
(d) No member of the Board or the Committee shall be
liable to any person for any action or determination made in good faith with
respect to the Plan or any Option granted hereunder.
4.2 Majority Rule. A majority of the members of the Committee
shall constitute a quorum, and any action taken by a majority at a meeting at
which a quorum is present or any action taken without a meeting evidenced by a
writing executed by all the members of the Committee shall constitute the
action of the Committee.
ARTICLE V.
SHARES OF STOCK SUBJECT TO PLAN
5.1 Limitations. Subject to adjustments pursuant to the
provisions of Section 5.2 hereof, the maximum number of shares of Stock that
may be issued and sold pursuant to the exercise of Options hereunder, in the
aggregate or to any one Employee, shall not exceed 1,500,000 shares of Stock.
The grant of an LSAR shall not reduce the number of shares of Stock that may be
issued and sold hereunder. Shares of Stock subject to an Option may be either
authorized but unissued shares or shares issued and reacquired by the Company.
If outstanding Options granted hereunder shall terminate or expire for any
reason without being wholly exercised, the shares of Stock allocable to any
unexercised portion of such Option may again be the subject of an Option
granted under the Plan.
5.2 Adjustments. In the event of any stock dividend, stock
split, combination of shares, recapitalization or other change in the capital
structure of the Company, any merger, consolidation,
<PAGE> 7
spin-off, reorganization, partial or complete liquidation or other distribution
of assets, issuance of rights or warrants to purchase securities, or any other
corporate transaction having an effect similar to any of the foregoing:
(a) The Committee may make or provide for such
adjustments in the number of shares of Stock subject to each outstanding
Option, the Option price applicable to such Option and the kind of shares
covered thereby, as the Committee in its sole discretion may in good faith
determine to be equitably required in order to prevent dilution or enlargement
of the rights of Optionees;
(b) The Committee may make or provide for such
adjustments in the number of shares specified in Sections 5.1 and 7.2 as the
Committee in its sole discretion may in good faith determine to be appropriate
in order to reflect such transaction or event; and
(c) The Committee may provide in substitution for any or
all outstanding Options such alternative consideration as the Committee may in
good faith determine to be equitable under the circumstances, or it may provide
that the Optionee will be entitled to receive an equivalent grant or award in
respect of securities of the surviving entity of any merger, consolidation or
other transaction having a similar effect.
Notwithstanding the foregoing, (i) any adjustments or amendments to
Incentive Stock Options under this Section 5.2 shall, if determined by the
Committee, be made in accordance with Section 424(a) of the Code so as to
preserve the status of such Options as incentive stock options under Section
422 of the Code, and (ii) Nonstatutory Stock Options subject to grants or
previously granted to Nonemployee Directors at the time of any such event
described in this Section 5.2 shall be subject only to such adjustment as shall
be necessary to maintain the proportionate interest of the Optionee and
preserve, without exceeding, the value of the Option.
ARTICLE VI.
OPTIONS TO BE GRANTED TO EMPLOYEES
6.1 General. The provisions of this Article VI shall apply to
Options granted by the Committee to Employees and, except as expressly set
forth in Article VII, shall not apply to Options granted to Nonemployee
Directors.
6.2 Option Grant. Each Option granted hereunder to an Optionee
shall be evidenced by minutes of a meeting of the Committee or the written
consent of the Committee, and by a written Stock Option Agreement dated as of
the date of grant and executed by the Company and the Optionee. As to each
such grant hereunder, the terms of the Option, including the Option's duration,
time or
<PAGE> 8
times of exercise, and exercise price shall be stated in the Stock Option
Agreement. The Stock Option Agreement shall clearly identify whether the
Options granted are Incentive Stock Options or Nonstatutory Stock Options. If
an Incentive Stock Option and a Nonstatutory Stock Option are issued together,
the right of the Optionee to exercise or surrender one such Option shall not be
conditioned on the surrender of, or failure to exercise, the other Option. The
terms and conditions of each Stock Option Agreement shall be consistent with
the Plan, and in the event of any inconsistencies between the Plan and any
Stock Option Agreement, the terms of the Plan shall control.
6.3 Optionee Limitations. To the extent that the aggregate Fair
Market Value of stock of the Company with respect to which Incentive Stock
Options are exercisable for the first time by an Optionee during any calendar
year (under the Plan and all other Incentive Stock Option plans of the Company)
exceeds $100,000, such options shall be treated as Nonstatutory Stock Options.
The rule set forth in the preceding sentence shall be applied by taking options
into account in the order in which they were granted. For purposes of this
Section 6.3, the Fair Market Value of stock shall be determined as of the time
the option with respect to such stock is granted.
6.4 Option Price. The per share Option price of the Stock subject
to each Incentive Stock Option shall be equal to the Fair Market Value of the
Stock on the date the Option is granted; provided, the Option price of the
Stock subject to any Incentive Stock Option granted to a Ten Percent
Shareholder shall be equal to at least 110% of the Fair Market Value of the
Stock. The per share Option price of the Stock subject to each Nonstatutory
Stock Option shall be determined by the Committee, and may be less than Fair
Market Value on the date the Option is granted.
6.5 Exercise Period. The period of the exercise of each Option
shall be determined by the Committee, but in no instance shall the exercise
period for an Incentive Stock Option exceed 10 years (5 years in the case of an
Option granted to a Ten Percent Shareholder) from the date of grant of the
Option. The Committee shall have the right to accelerate, in whole or in part,
from time to time, conditionally or unconditionally, rights to exercise any
Option granted hereunder.
6.6 Acceleration Upon Change in Control. Unless otherwise
determined by the Committee and set forth in the Stock Option Agreement, each
Option shall become fully and immediately exercisable upon the occurrence of a
Change in Control, provided that the Optionee is employed by the Company or a
Subsidiary on the date of such Change in Control. Notwithstanding the
foregoing, if an Employee exercises an LSAR following an event described in
paragraph (iv) or (v) of the definition of Change in Control contained in
Article I hereof, the exercise of any portion of the Option which would not,
except to the extent that such event constitutes a Change in Control, then be
exercisable shall not be
<PAGE> 9
effective until the expiration of the 90 day period following such event. If
the directors determine that the event did not constitute a Change in Control
in accordance with paragraph (viii) of such definition, the exercisability of
the Option shall not be accelerated.
6.7 Option Exercise. Unless otherwise provided in the Stock
Option Agreement, an Option shall be exercisable in whole or in part at any
time and from time to time prior to expiration of the Option. The Committee
shall have the authority in its sole discretion to prescribe in any Stock
Option Agreement that the Option may be exercised in installments during the
term of the Option and to further condition an Optionee's right to exercise all
or any portion thereof.
(a) An Option may be exercised at any time and from time
to time during the term of the Option as to any or all full shares of Stock
that have become purchasable under the provisions of the Option, but not at any
time as to fewer than 100 shares unless the remaining shares that are
purchasable are fewer than 100 shares. An Option shall be exercised by written
notice of exercise of the Option with respect to a specified number of shares
of Stock delivered to the Company at its principal office.
(b) The Option price for the number of shares of Stock
with respect to which the Option is being exercised shall be paid in full in
cash or check acceptable to the Company, and the Company shall not be required
to deliver certificates for such shares until such payment has been made;
provided, in lieu of cash funds, an Optionee may, to the extent permitted by
the Stock Option Agreement at the date of grant, exercise the Option in whole
or in part (i) by tendering to the Company nonforfeitable shares of Stock owned
by the Optionee for at least 6 months and having a Fair Market Value equal to
the Option price applicable to the Option, or a combination of cash and shares
or (ii) by deferred payment from the proceeds of sale through a broker of some
or all of the shares of Stock to which the exercise relates. The Optionee
shall not have any of the rights of a stockholder with respect to the shares of
Stock subject to the Option until such shares have been issued or transferred
to the Optionee upon the exercise of the Option.
(c) In addition to and at the time of payment of the
Option price, the Optionee shall pay to the Company in cash or check acceptable
to the Company the full amount of any federal, state or local withholding or
other employment taxes required by any government to be withheld or otherwise
deducted and paid by the Company in respect of such exercise. To the extent
permitted by the Committee at the time of exercise, any withholding obligation
may be satisfied by relinquishment of that number of the shares of Stock with
respect to which the Option is being exercised having a Fair Market Equal to
the required withholding, or a combination of cash and shares. In addition,
the Company shall have the right to withhold the amount of such taxes from any
other sums due or to become due from the Company to the Optionee, upon such
terms and
<PAGE> 10
conditions as the Committee shall prescribe.
6.8 Nontransferability of Option. Except as expressly authorized
by the Committee, no Option may be transferred by an Optionee otherwise than by
will or the laws of descent and distribution.
6.9 Termination of Service. Except as otherwise provided in
Section 6.11 hereof, in the event of termination of the employment of an
Optionee by the Company or a Subsidiary for any reason, including retirement,
any Option held by the Optionee, to the extent not theretofore exercised, shall
forthwith terminate unless the Committee, in its sole discretion, provides in
the Stock Option Agreement that the Option shall be exercisable after such
termination (but only to the extent of the number of shares of Stock with
respect to which the Option may be exercised at the date of termination of
employment), and, provided further, that in no event shall any Stock Option
Agreement provide for the extension of the period during which the Option may
be exercised beyond the earlier of (i) the expiration of the period of
exercisability of such Option as specified in the Stock Option Agreement, or
(ii) 90 days from the date of termination.
6.10 No Right to Employment. Nothing in the Plan or in any Option
or Stock Option Agreement shall confer on any person any right to continue in
the employ of the Company or a Subsidiary or shall interfere in any way with
any right the Company or a Subsidiary may have to terminate such person's
employment at any time.
6.11 Death or Disability of Holder of Option. In the event any
Optionee dies or becomes a Disabled Person while the Optionee is an employee of
the Company or a Subsidiary, any Option created pursuant to the Plan held by
the Optionee (i) shall become immediately exercisable in full (unless otherwise
specified in the Stock Option Agreement), and (ii) may be exercised by the
Optionee or the legatee or legatees under the Optionee's will, or by the
Optionee's personal representative or distributees, within 1 year following the
date of the Optionee's disability or death, or such shorter period as may be
specified in the Stock Option Agreement, but in no event after the expiration
of the period of exercisability of such Option as specified in the Stock Option
Agreement. If an Option granted hereunder shall be exercised by the personal
representative of a deceased, disabled or former employee, or by a person who
acquired an Option granted hereunder by bequest or inheritance or by reason of
the death of any employee or former employee, written notice of such exercise
shall be accompanied by a certified copy of letters testamentary or equivalent
proof of the right of such personal representative or other person to exercise
such Option.
<PAGE> 11
ARTICLE VII.
OPTIONS TO BE GRANTED TO NONEMPLOYEE DIRECTORS
7.1 Nondiscretionary Grants. Each Option granted hereunder to a
Nonemployee Director shall be evidenced by a written Stock Option Agreement
dated as of the date of grant and executed by the Company and the Optionee.
Each such Stock Option Agreement shall include and conform to the terms and
conditions set forth in this Article VII, and such other terms and conditions
not inconsistent herewith.
7.2 Annual Grants. On the first business day following each
Annual Meeting Date, each Nonemployee Director serving on the Board of
Directors on such date shall be granted an Option to purchase 2,000 shares of
Stock. Each Option granted to a Nonemployee Director shall include a related
LSAR as described in Article VIII hereof.
7.3 Option Price. The per share Option price of the Stock subject
to each Option granted to a Nonemployee Director shall be equal to the Fair
Market Value of the Stock on the date the Option is granted.
7.4 Exercise Period. Each Option granted to a Nonemployee
Director shall first become exercisable with respect to one-third of the number
of shares subject to the Option on each of the first three anniversaries of the
date of grant and shall expire on the fifth anniversary of the date of grant of
the Option. Notwithstanding the foregoing, each Option granted to a
Nonemployee Director shall become fully and immediately exercisable upon the
occurrence of a Change in Control.
7.5 Option Exercise. Each Option granted to a Nonemployee
Director may be exercised in the manner described in Section 6.7(a) and (b)
hereof. Each such Stock Option Agreement shall provide for the exercise of
such Option by payment of cash or check or by the tender of shares of Stock in
the manner described in Section 6.7(b) hereof.
7.6 Nontransferability of Option. No Option shall be transferred
by a Nonemployee Director otherwise than by will or the laws of descent and
distribution. During the lifetime of an Optionee, an Option shall be
exercisable only by the Optionee.
7.7 Termination of Membership on the Board. If a Nonemployee
Director terminates membership on the Board of Directors for any reason,
including death, an Option held by the Optionee on the date of such termination
may be exercised in whole or in part (but only to the extent of the number of
shares of Stock with respect to which the Option was exercisable at the date of
such termination) at any time prior to the earlier of (i) the expiration of the
period of exercisability of such Option as specified in
<PAGE> 12
Section 7.4, or (ii) 90 days from the date of termination. If an Option
granted hereunder shall be exercised by the personal representative of a
deceased Nonemployee Director, or by a person who acquired an Option granted
hereunder by bequest or inheritance or by reason of the death of any
Nonemployee Director, written notice of such exercise shall be accompanied by a
certified copy of letters testamentary or equivalent proof of the right of such
personal representative or other person to exercise such Option.
ARTICLE VIII.
LIMITED STOCK APPRECIATION RIGHTS
8.1 General. Each Option granted to a Nonemployee Director, and
unless otherwise determined by the Committee, each Option granted pursuant to
the Plan shall include a limited stock appreciation right ("LSAR") relating to
a number of shares of Stock subject to such option. Each LSAR granted
hereunder shall be subject to the terms and conditions set forth below:
8.2 Benefit Upon Exercise. The exercise of an LSAR with respect
to any number of shares of Stock shall entitle the Optionee to a cash payment,
for each such share, equal to the excess of (a) the greater of (i) the highest
price per share of Stock paid in a tender offer, exchange offer or merger
occurring in connection with the Change in Control with respect to which such
LSAR became exercisable and (ii) the highest Fair Market Value of a share of
Stock during the 60 day period immediately preceding such Change in Control
over (b) the Option price of the related Option. Such payment shall be paid as
soon as practical, but in no event later than the expiration of 5 business days
after the effective date of such exercise. The Company shall have the right to
withhold from the payment an amount sufficient to satisfy any federal, state or
local tax withholding obligations in respect of such exercise.
8.3 Term and Exercise of LSARs. An LSAR shall be exercisable only
during the period commencing on the first day following the occurrence of a
Change in Control and terminating on the expiration of 60 days after such date.
Notwithstanding the preceding sentence, in the event that an LSAR held by any
Optionee who is or may be subject to the provisions of Section 16 of the
Exchange Act becomes exercisable prior to the expiration of 6 months following
the date on which it is granted, the LSAR shall also be exercisable during the
period commencing on the first day immediately following the expiration of such
6 month period and terminating on the expiration of 60 days following such
date. Notwithstanding anything else herein, an LSAR may be exercised only if
and to the extent that the Option to which it relates is exercisable.
(a) The exercise of an LSAR with respect to a number of
shares of Stock shall cause the immediate and automatic cancellation of the
related Option with respect to an equal number of shares. The exercise of an
Option, or the cancellation,
<PAGE> 13
termination or expiration of an Option (other than pursuant to this
subsection), with respect to a number of shares of Stock, shall cause the
cancellation of the LSAR with respect to an equal number of shares.
(b) Each LSAR shall be exercisable in whole or in part;
provided, no partial exercise of an LSAR shall be for fewer than 100 shares of
Stock. The partial exercise of an LSAR shall not cause the expiration,
termination or cancellation of the remaining portion thereof.
(c) No LSAR shall be assignable or transferable otherwise
than together with its related Option.
(d) An LSAR shall be exercised only by written notice of
exercise served upon the Company specifying the number of shares of Stock in
respect of which the LSAR is being exercised and the proposed effective date of
exercise. The Optionee may withdraw such notice at any time prior to the close
of business on the business day immediately preceding the proposed effective
date of exercise.
(e) Notwithstanding anything to the contrary in this
Article VIII, if an Employee exercises an LSAR following an event described in
paragraph (iv) or (v) of the definition of Change in Control contained in
Article I hereof, no payment shall be made to the Employee during the 90 day
period following such event. If the directors determine that the event did not
constitute a Change in Control in accordance with paragraph (viii) of such
definition, the exercise of the LSAR shall be invalid. During this 90 day
period, the Employee may withdraw the notice of exercise of the LSAR at any
time.
ARTICLE IX.
STOCK CERTIFICATES
The Company shall not be required to issue or deliver any certificate
for shares of Stock purchased upon the exercise of any Option granted hereunder
or any portion thereof, prior to fulfillment of all of the following
conditions:
(a) The admission of such shares to listing on all stock
exchanges on which the Stock is then listed;
(b) The completion of any registration or other
qualification of such shares under any federal or state law or under the
rulings or regulations of the Securities and Exchange Commission or any other
governmental regulatory body that the Committee shall in its discretion deem
necessary or advisable; and
(c) The obtaining of any approval or other clearance from
any federal or state governmental agency that the Committee
<PAGE> 14
shall in its sole discretion determine to be necessary or advisable.
ARTICLE X.
PURCHASE FOR INVESTMENT
Except as hereafter provided, the Board may require as a condition of
issuance of any shares of Stock pursuant to this Plan that the holder of an
Option granted hereunder shall, upon any exercise thereof, execute and deliver
to the Company a written statement, in form satisfactory to the Company, in
which such holder represents and warrants that such holder is purchasing or
acquiring the shares of Stock acquired thereunder for such holder's own
account, for investment only and not with a view to the resale or distribution
thereof, and agrees that any subsequent resale or distribution of any of such
shares of Stock shall be made only pursuant to either (a) a registration
statement on an appropriate form under the Securities Act of 1933, as amended
(the "Securities Act"), which registration statement has become effective and
is current with regard to the shares of Stock being sold, or (b) a specific
exemption from the registration requirements of the Securities Act, but in
claiming such exemption the holder shall, prior to any offer of sale or sale of
such shares of Stock, if required by the Company, obtain a prior favorable
written opinion, in form and substance satisfactory to the Company, from
counsel for or approved by the Company, as to the application of such exemption
thereto. The foregoing restriction shall not apply to issuances by the Company
so long as the shares of Stock being issued are registered under the Securities
Act and a prospectus in respect thereof is current.
ARTICLE XI.
LEGENDS
The Company may endorse such legend or legends upon the certificates
for shares of Stock issued upon exercise of an Option granted hereunder, and
the Committee may issue such "stop transfer" instructions to its transfer agent
in respect of such shares of Stock, as the Committee, in its discretion,
determines to be necessary or appropriate to (i) prevent a violation of, or to
perfect an exemption from, the registration requirements of the Securities Act,
(ii) implement the provisions of any agreement between the Company and the
Optionee with respect to such shares of Stock, or (iii) permit the Company to
determine the occurrence of a disqualifying disposition, as described in
Section 421(b) of the Code, of shares of Stock transferred upon exercise of an
Incentive Stock Option granted under the Plan.
<PAGE> 15
ARTICLE XII.
TERMINATION, AMENDMENT AND MODIFICATION OF PLAN
The Board may at any time terminate the Plan, and may at any time and
from time to time and in any respect amend or modify the Plan; provided, the
Board, without approval of the shareholders of the Company, may not adopt any
amendment to the Plan if the amendment would:
(a) increase the total number of shares of Stock that may
be issued pursuant to the Plan except as contemplated in Section 5.2 hereof;
(b) materially increase the benefits accruing to
participants in the Plan; or
(c) materially modify the requirements as to eligibility
for participation in the Plan.
Provided further, in no event shall any provision of Article VII
hereof be amended more than once every 6 months other than to comport with
changes in the Code, the Employee Retirement Income Security Act of 1974, or
the rules thereunder, or rules promulgated by the Securities and Exchange
Commission.
Notwithstanding the foregoing, the Board shall not terminate, amend or
modify the Plan in any manner so as to affect the price of the shares of Stock
purchasable pursuant to any Option theretofore granted under the Plan without
the consent of the Optionee or transferee of the Option. Neither the
amendment, suspension nor termination of the Plan shall, without the consent of
the holder of the Option, impair any rights or obligations under any Option
theretofore granted.
ARTICLE XIII.
RELATIONSHIP TO OTHER COMPENSATION PLANS
The adoption of the Plan shall not affect any other stock option,
incentive or other compensation plans in effect for the Company, nor shall the
adoption of the Plan preclude the Company from establishing any other forms of
incentive or other compensation for employees. Any benefits earned or income
realized under the Plan shall not be deemed to constitute compensation or
income for purposes of any other plan or payroll practice of the Company or any
Subsidiary, except as expressly set forth in such other plan or practice.
<PAGE> 16
ARTICLE XIV.
MISCELLANEOUS
14.1 Plan Binding on Successors. The Plan shall be binding upon
the Company, its successors and assigns.
14.2 Number and Gender. Whenever used herein, nouns in the
singular shall include the plural, and the masculine pronoun shall include the
feminine gender.
14.3 Headings. Headings of articles and sections hereof are
inserted for convenience and reference only and constitute no part of the Plan.
14.4 Applicable Law. The Plan shall be governed by, and construed
in accordance with, the laws of the State of Georgia, without reference to the
principles regarding conflicts of laws.
14.5 Restricted Shares. Any and all shares of Stock issued
pursuant to this Plan shall be subject to the terms and conditions of any other
agreement between the Optionee and the Company with respect to such shares of
Stock.
<PAGE> 1
EXHIBIT 10(b)(v)
CROWN CRAFTS, INC.
NONSTATUTORY STOCK OPTION AGREEMENT
(PURSUANT TO 1995 STOCK OPTION PLAN)
THIS AGREEMENT (the "Agreement") between Crown Crafts, Inc., a Georgia
corporation (the "Company"), and ______________________________________________
("Employee") is entered into as of this ________ day of ____________ , 199___.
R E C I T A L S
A. The Board of Directors of the Company (the "Board") has
established the Crown Crafts, Inc. 1995 Stock Option Plan (the "Plan") in order
to provide employees of the Company and its Subsidiaries with a favorable
opportunity to acquire shares of the Company's stock.
B. Employee is employed by the Company or one of its Subsidiaries.
C. The committee that administers the Plan (the "Committee") has
determined that it is in the best interests of the Company and its shareholders
to grant the option described in this Agreement to Employee as an incentive to
achieve the Company's objectives through participation in its success and
growth and as encouragement to remain in the employment of Company or its
Subsidiaries.
NOW, THEREFORE, it is agreed as follows:
1. Definitions and Incorporation. This Agreement is subject to
all of the provisions of the Plan as amended from time to time, and such
provisions are incorporated herein by this reference. Unless otherwise defined
in this Agreement, the terms used in this Agreement shall have the meanings
given to such terms in the Plan.
2. Grant. The Company hereby grants to Employee the option (the
"Option") to purchase all or any part of an aggregate of ______________ shares
of the $1.00 par value Common Stock of the Company (the "Stock") on the terms
and conditions set forth herein, pursuant to the Plan and subject to adjustment
in accordance with Section 5.2 of the Plan. The Option is not intended to
qualify as an incentive stock option under Section 422 of the Internal Revenue
Code of 1986, as amended. The Option is intended to be a Nonstatutory Stock
Option.
3. Option Price. The price to be paid for the Stock upon
exercise of the Option or any part thereof shall be $______________ per share
[which is equal to the Fair Market Value per share as of the date of this
Agreement].
4. Right to Exercise. Subject to the conditions set forth in
this Agreement, the right to exercise the Option shall accrue in accordance
with Schedule 1 attached hereto and hereby made a part hereof. Notwithstanding
anything to the contrary, the Option shall be immediately
<PAGE> 2
exercisable in full upon the occurrence of a Change in Control of the Company
in accordance with Section 6.6 of the Plan.
5. Exercise. The Option may be exercised on the terms and
conditions contained herein by notice to the Company at the Company's principal
office. Each exercise of the Option shall be made with respect to no fewer
than one hundred (100) shares unless the remaining shares which are purchasable
are fewer than one hundred (100) shares. The Option price with respect to
which the Option is then being exercised shall be paid in cash or check
acceptable to the Company on the date of exercise or not later than ten (10)
days from the date of exercise. The Option price may also be paid, in whole or
in part, by delivery to the Company of Stock owned by Employee for at least 6
months and valued at Fair Market Value as of the date of exercise. If the
Option is exercised by a person other than Employee, the notice of exercise of
the Option shall be accompanied by proof, satisfactory to the Company, of such
person's right to exercise the Option.
6. Term. Unless sooner terminated as otherwise provided herein,
the Option shall lapse and expire five (5) years from the date of this
Agreement to the extent such Option has not been exercised prior to such date.
7. Termination of Employment.
(a) Termination for Cause. In the event that Employee's
employment with the Company is terminated as a result of (i) Employee's gross
negligence, dishonesty, malfeasance or willful misconduct with regard to the
business of the Company, or (ii) Employee's indictment (or similar proceeding)
for any misdemeanor with regard to the business of the Company or for any
felony or for any crime involving moral turpitude, the Option shall immediately
terminate and be null and void.
(b) Other Termination. In the event that Employee's
employment with the Company terminates for any reason other than as set forth
in Section 7(a), the Option may be exercised for 90 days after the date of
termination of employment, but only to the extent that such Option was
exercisable on the date of termination of employment and in no event after the
date on which such Option would otherwise terminate pursuant to the terms of
this Agreement. If Employee terminates employment by reason of death or dies
after termination but while the Option could have been exercised hereunder, the
Option may be exercised during such 90-day period by Employee's legatees or his
personal representatives or distributees.
(c) Time of Termination. For the purposes of this
Agreement, Employee's employment shall be deemed to have terminated on the
earlier of (i) the date when Employee's service in fact terminated or (ii) the
date specified in any written notice given to or received by the Employee that
his or her employment was to terminate.
(d) Employment by Affiliates. For purposes of this
Section 7, Employee will be deemed employed by the Company if employed by the
Company or any of its Subsidiaries.
8. Limited Stock Appreciation Right. The Option shall include a
Limited Stock Appreciation Right ("LSAR") relating to the number of shares of
Stock set forth in Section 2.
2
<PAGE> 3
The LSAR shall be exercisable only in the event of a Change in Control of the
Company and shall be subject to the terms and conditions set forth in Article
VIII of the Plan.
9. Nontransferability of Option. The Option shall be
transferable only by will or by the laws of descent and distribution and shall
be exercisable during Employee's lifetime only by Employee.
10. Withholding Taxes. In addition to and at the time of payment
of the Option Price, Employee shall pay to the Company in cash or check
acceptable to the Company the full amount of any federal and state withholding
or other employment taxes required by any government authority to be withheld
or otherwise deducted and paid by the Company in respect of such exercise. To
the extent permitted by the Committee at the time of exercise, such withholding
obligation may be settled by relinquishment of the number of shares of Stock
with respect to which the Option is then being exercised having a Fair Market
Value equal to the required withholding, or a combination of cash and shares.
In the absence of such payments, Employee hereby consents that the Company may
withhold the amount of such taxes from any other sums due or to become due from
the Company to Employee.
11. Securities Laws Requirements. The Option is not exercisable,
in whole or in part, and the Company is not obligated to sell any shares of
Stock subject to the Option, if such exercise or sale, in the opinion of
counsel for the Company, would violate the Securities Act of 1933 or any other
federal or state statutes having similar requirements as may be in effect at
that time. Further, the Board may require as a condition of issuance of any
shares pursuant to this Agreement that Employee furnish a written
representation that Employee is purchasing or acquiring the shares for
investment and not with a view to resale or distribution to the public, and
that such Employee shall resell or distribute such shares only pursuant to a
registration statement on an appropriate form under the Securities Act of 1933,
as amended, or a specific exemption from the registration requirements of such
Act. Further, the Board may decide, in its sole discretion, that the listing
or qualification of the shares of Stock subject to the Option under any
securities or other applicable laws is necessary or desirable. In such event,
the Option shall not be exercisable, in whole or in part, unless and until such
listing, qualification, consent or approval shall have been effected or
obtained free of any conditions not acceptable to the Board.
12. Issuance of Shares. Subject to the terms of this Agreement,
the Company, within ten (10) working days after proper exercise of an Option
and without transfer or issue tax or other incidental expense to the person
exercising the Option, shall deliver to such person at the principal office of
the Company, or such other location as may be acceptable to the Company and
such person, one or more certificates for the shares of Stock with respect to
which the Option is exercised. Such shares shall be fully paid and
nonassessable and shall be issued in the name of such person. Any fractional
shares of Stock with respect to which an Option is exercised shall be settled
in cash.
13. Rights as a Shareholder. Neither Employee nor any other
person entitled to exercise the Option shall have any rights as a shareholder
of the Company with respect to the shares subject to the Option until a
certificate for such shares has been issued upon exercise of the Option.
3
<PAGE> 4
14. Notices. Any notice to the Company contemplated by the
Agreement shall be addressed to Crown Crafts, Inc., 1600 Riveredge Parkway,
Suite 200, Atlanta, Georgia 30328 or at such other address as the Company may
hereafter designate in writing, and any notice to Employee shall be addressed
to him at the address on file with the Company on the date hereof or at such
other address as he may hereafter designate in writing.
15. Effective Date. The Option shall be effective as of the date
on which the Option was granted by the Committee, but its exercise shall not be
permitted until both parties hereto have executed this Agreement.
16. Interpretation. The interpretation, construction, performance
and enforcement of this Agreement and of the Plan shall lie within the sole
discretion of the Committee, and the Committee's determinations shall be
conclusive and binding on all persons.
17. Choice of Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Georgia.
CROWN CRAFTS, INC.
By:_________________________________
Title:______________________________
EMPLOYEE:
____________________________________
4
<PAGE> 5
SCHEDULE 1
RIGHT TO EXERCISE
Subject to the conditions set forth in this Agreement, the Option shall become
exercisable with respect to one-third (1/3) of the number of shares set forth
in Section 2 on each of the first three anniversaries of the date of the
Agreement as follows:
May be Purchased
Number of Shares Only On and After
---------------- -----------------
First Anniversary
----------------
Second Anniversary
----------------
Third Anniversary
----------------
<PAGE> 1
EXHIBIT 10(b)(vi)
CROWN CRAFTS, INC.
NONSTATUTORY STOCK OPTION AGREEMENT
FOR NONEMPLOYEE DIRECTORS
(PURSUANT TO 1995 STOCK OPTION PLAN)
THIS AGREEMENT (the "Agreement") between Crown Crafts, Inc., a Georgia
corporation (the "Company"), and _______________________________________________
("Director") is entered into as of this _________ day of _____________, 199____.
R E C I T A L S
A. The Board of Directors of the Company (the "Board") has
established the Crown Crafts, Inc. 1995 Stock Option Plan (the "Plan") in order
to provide employees of the Company and its Subsidiaries and members of the
Board who are not employees ("Nonemployee Directors") with a favorable
opportunity to acquire shares of the Company's stock.
B. Director is a Nonemployee Director.
C. Pursuant to the terms of Article VII of the Plan, Director has
become entitled to the option described in the Agreement as an incentive to
achieve the Company's objectives through participation in its success and
growth and as encouragement to remain in service on the Board.
NOW, THEREFORE, it is agreed as follows:
1. Definitions and Incorporation. This Agreement is subject to
all of the provisions of the Plan as amended from time to time, and such
provisions are incorporated herein by this reference. Unless otherwise defined
in this Agreement, the terms used in this Agreement shall have the meanings
given to such terms in the Plan.
2. Grant. The Company hereby grants to Director the option (the
"Option") to purchase all or any part of an aggregate of 2,000 shares of the
$1.00 par value Common Stock of the Company (the "Stock") on the terms and
conditions set forth herein, pursuant to the Plan and subject to adjustment in
accordance with Section 5.2 of the Plan. The Option is not intended to qualify
as an incentive stock option under Section 422 of the Internal Revenue Code of
1986, as amended. The Option is intended to be a Nonstatutory Stock Option.
3. Option Price. The price to be paid for the Stock upon
exercise of the Option or any part thereof shall be $______________ per share,
which is equal to the Fair Market Value per share as of the date of this
Agreement.
4. Right to Exercise. Subject to the conditions set forth in
this Agreement, the right to exercise the Option shall be exercisable with
respect to 666 shares subject to the Option on each of the first two
anniversaries of the date of this Agreement and with respect to 668 shares
<PAGE> 2
on the third anniversary of the date of this Agreement. Notwithstanding
anything to the contrary, the Option shall be immediately exercisable in full
upon the occurrence of a Change in Control of the Company in accordance with
Section 6.6 of the Plan.
5. Exercise. The Option may be exercised on the terms and
conditions contained herein by notice to at the Company's principal office.
Each exercise of the Option shall be made with respect to no fewer than one
hundred (100) shares unless the remaining shares which are purchasable are
fewer than one hundred (100) shares. The Option price with respect to which
the Option is then being exercised shall be paid in cash or check acceptable to
the Company on the date of exercise or not later than ten (10) days from the
date of exercise. The Option price may also be paid, in whole or in part, by
delivery to the Company of Stock owned by Director for at least 6 months and
valued at Fair Market Value as of the date of exercise. If the Option is
exercised by a person other than Director, the notice of exercise of the Option
shall be accompanied by proof, satisfactory to the Company, of such person's
right to exercise the Option.
6. Term. Unless sooner terminated as otherwise provided herein,
the Option shall lapse and expire five (5) years from the date of this
Agreement to the extent such Option has not been exercised prior to such date.
7. Termination of Membership on Board. If a Director terminates
membership on the Board for any reason, including death, the Option may be
exercised in whole or in part (but only to the extent of the number of shares
of Stock with respect to which the Option was exercisable at the date of such
termination) at any time prior to the earlier of (i) the expiration of the
period of exercisability of such Option as specified in Section 6, or (ii) 90
days from the date of termination.
8. Limited Stock Appreciation Right. The Option shall include a
Limited Stock Appreciation Right ("LSAR") relating to the number of shares of
Stock set forth in Section 2. The LSAR shall be exercisable only in the event
of a Change in Control of the Company and shall be subject to the terms and
conditions set forth in Article VIII of the Plan.
9. Nontransferability of Option. The Option shall be
transferable only by will or by the laws of descent and distribution and shall
be exercisable during Director's lifetime only by Director.
10. Securities Laws Requirements. The Option is not exercisable,
in whole or in part, and the Company is not obligated to sell any shares of
Stock subject to the Option, if such exercise or sale, in the opinion of
counsel for the Company, would violate the Securities Act of 1933 or any other
federal or state statutes having similar requirements as may be in effect at
that time. Further, the Board may require as a condition of issuance of any
shares pursuant to this Agreement that Director furnish a written
representation that Director is purchasing or acquiring the shares for
investment and not with a view to resale or distribution to the public, and
that such Director shall resell or distribute such shares only pursuant to a
registration statement on an appropriate form under the Securities Act of 1933,
as amended, or a specific exemption from the registration requirements of such
Act. Further, the Board may decide, in its sole discretion, that the listing
or qualification of the shares of Stock subject to the Option under any
securities or other applicable laws is necessary or desirable. In such event,
the Option shall not be
2
<PAGE> 3
exercisable, in whole or in part, unless and until such listing, qualification,
consent or approval shall have been effected or obtained free of any conditions
not acceptable to the Board.
11. Issuance of Shares. Subject to the terms of this Agreement,
the Company, within ten (10) working days after proper exercise of an Option
and without transfer or issue tax or other incidental expense to the person
exercising the Option, shall deliver to such person at the principal office of
the Company, or such other location as may be acceptable to the Company and
such person, one or more certificates for the shares of Stock with respect to
which the Option is exercised. Such shares shall be fully paid and
nonassessable and shall be issued in the name of such person. Any fractional
shares of Stock with respect to which an Option is exercised shall be settled
in cash.
12. Rights as a Shareholder. Neither Director nor any other
person entitled to exercise the Option shall have any rights as a shareholder
of the Company with respect to the shares subject to the Option until a
certificate for such shares has been issued upon exercise of the Option.
13. Notices. Any notice to the Company contemplated by the
Agreement shall be addressed to Crown Crafts, Inc., 1600 Riveredge Parkway,
Suite 200, Atlanta, Georgia 30328 or at such other address as the Company may
hereafter designate in writing, and any notice to Director shall be addressed
to him at the address on file with the Company on the date hereof or at such
other address as he may hereafter designate in writing.
14. Effective Date. The Option shall be effective as of the date
on which the Option was granted by the Committee, but its exercise shall not be
permitted until both parties hereto have executed this Agreement.
15. Interpretation. The interpretation, construction, performance
and enforcement of this Agreement and of the Plan shall lie within the sole
discretion of the Committee, and the Committee's determinations shall be
conclusive and binding on all persons.
16. Choice of Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Georgia.
CROWN CRAFTS, INC.
By:_________________________________
Title:______________________________
DIRECTOR:
_________________________________________________
3
<PAGE> 1
EXHIBIT 10(c)
[EXECUTION COPY]
================================================================================
REVOLVING CREDIT AGREEMENT
by and between
CROWN CRAFTS, INC.
as Borrower,
NATIONSBANK, NATIONAL ASSOCIATION (CAROLINAS),
as Lender
August 25, 1995
================================================================================
<PAGE> 2
TABLE OF CONTENTS
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ARTICLE I
Definitions and Terms
1.1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Accounting Terms. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
1.3 UCC Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE II
The Revolving Credit Facility
2.1. Revolving Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
2.2. Payment of Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
2.3. Payment of Principal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
2.4. Non-Conforming Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
2.5. Revolving Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
2.6. Reductions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
2.7. Conversions and Elections of Subsequent Interest Periods . . . . . . . . . . . . . . . . . . . 21
2.8. Unused Fee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
2.9. Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
2.10. Extension of Revolving Credit Termination Date. . . . . . . . . . . . . . . . . . . . . . . . . 22
ARTICLE III
Yield Protection and Illegality
3.1. Additional Costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
3.2. Suspension of Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
3.3. Illegality. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
3.4. Compensation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
3.5. Alternate Loan and Lender . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
3.6. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
ARTICLE IV
Conditions to Making Loans
4.1. Conditions of Initial Advance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
4.2. Conditions of All Revolving Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
ARTICLE V
Representations and Warranties
5.1. Organization and Authority. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
5.2. Loan Documents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
5.3. Solvency. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
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5.4. Subsidiaries and Stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
5.5. Ownership Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
5.6. Financial Condition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
5.7. Title to Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
5.8. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
5.9. Other Agreements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
5.10. Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
5.11. Margin Stock. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
5.12. Investment Company; Public Utility Holding Company. . . . . . . . . . . . . . . . . . . . . . . 33
5.13. Patents, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
5.14. No Untrue Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
5.15. No Consents, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
5.16. Employee Benefit Plans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
5.17. No Default. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
5.18. Hazardous Materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
5.19. Employment Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
ARTICLE VI
Affirmative Covenants
6.1. Financial Reports, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
6.2. Maintain Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
6.3. Existence, Qualification, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
6.4. Regulations and Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
6.5. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
6.6. True Books. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
6.7. Payment of Other Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
6.8. Right of Inspection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
6.9. Observe all Laws. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
6.10. Governmental Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
6.11. Covenants Extending to Other Persons. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
6.12. Officer's Knowledge of Default. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
6.13. Suits or Other Proceedings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
6.14. Notice of Discharge of Hazardous Material or Environmental Complaint. . . . . . . . . . . . . . 39
6.15. Environmental Compliance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
6.16. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
6.17. Further Assurances. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
6.18. Employee Benefit Plans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
6.19. Termination Events. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
6.20. ERISA Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
6.21. Continued Operations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
6.22. Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
6.23. New Subsidiaries. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
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ARTICLE VII
Negative Covenants
7.1. Consolidated Leverage Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
7.2. Consolidated Fixed Charge Coverage Ratio. . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
7.3. Consolidated Shareholders' Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
7.4. Consolidated Cash Flow Ratio. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
7.5. Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
7.6. Transfer of Assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
7.7. Investments; Acquisitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
7.8. Merger or Consolidation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
7.9. Restricted Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
7.10. Transactions with Affiliates. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
7.11. Compliance with ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
7.12. Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
7.13. Limitations on Sales and Leasebacks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
7.14. Dissolution, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
ARTICLE VIII
Events of Default and Acceleration
8.1. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
8.2. Lender to Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
8.3. Cumulative Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
8.4. No Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
8.5. Allocation of Proceeds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
ARTICLE IX
Miscellaneous
9.1. Assignments and Participations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
9.2. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
9.3. Survival. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
9.4. Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
9.5. Amendments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
9.6. Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
9.7. Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
9.8. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
9.9. Headings and References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
9.10. Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
9.11. Entire Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
9.12. Agreement Controls. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
9.13. Usury Savings Clause. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
9.14. Governing Law; etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
EXHIBIT A Commitment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
EXHIBIT B Form of Assignment and Acceptance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
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<S> <C> <C>
EXHIBIT C Notice of Appointment (or Revocation) of Authorized Representative . . . . . . . . . . . . . . 63
EXHIBIT D Form of Borrowing Notice. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
EXHIBIT E Form of Interest Rate Selection Notice. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
EXHIBIT F Form of Revolving Note. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
EXHIBIT G Form of Subsidiary Guaranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
EXHIBIT H Form of Opinion of Borrower's Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
EXHIBIT I Form of Compliance Certificate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Schedule 5.4 Subsidiaries and Ownership Interests . . . . . . . . . . . . . . . . . . . . . . . . . 74
Schedule 5.6 Liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
Schedule 5.16 ERISA Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
Schedule 7.5 Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
</TABLE>
iv
<PAGE> 6
REVOLVING CREDIT AGREEMENT
THIS REVOLVING CREDIT AGREEMENT, dated as of August 25, 1995 (the
"Agreement"), is made by and among CROWN CRAFTS, INC., a Georgia corporation
having its principal place of business in Atlanta, Georgia (the "Borrower"),
NATIONSBANK, NATIONAL ASSOCIATION (CAROLINAS), a national banking association
organized under the laws of the United States ("NationsBank"), in its capacity
as Lender (the "lender"), and each other lender which may hereafter execute and
deliver an instrument of assignment with respect to this Agreement pursuant to
Section 9.1 hereof (hereinafter such lenders may be referred to individually as
a "Lender" or collectively as the "Lenders");
W I T N E S S E T H:
WHEREAS, the Borrower has requested that the Lender make available to
the Borrower a revolving credit facility of up to $15,000,000, the proceeds of
such facilities to be used to finance Acquisitions permitted hereunder, general
working capital needs and other general corporate purposes of the Borrower; and
WHEREAS, the Lender is willing to make the revolving credit facility
available to the Borrower upon the terms and conditions set forth herein;
NOW, THEREFORE, the Borrower and the Lender hereby agree as follows:
ARTICLE I
Definitions and Terms
1.1. Definitions. For the purposes of this Agreement, in addition
to the definitions set forth above, the following terms shall have the
respective meanings set forth below:
"Acquisition" means the non-hostile acquisition of (i) a
controlling equity interest in another Person (including the purchase
of an option, warrant or convertible or similar type security to
acquire such a controlling interest at the time it becomes exercisable
by the holder thereof), whether by purchase of such equity interest or
upon exercise of an option or warrant for, or conversion of securities
into, such equity interest, or (ii) assets of another Person for which
the Cost of Acquisition equals or exceeds two percent (2%) of
Consolidated Total Assets determined as of the last day of the fiscal
quarter of the Borrower immediately preceding the date of the
agreement related to such Acquisition;
<PAGE> 7
"Advance" means a borrowing under the Revolving Credit
Facility consisting of a Base Rate Loan or a Eurodollar Rate Loan;
"Affiliate" means any Person (i) which directly or indirectly
through one or more intermediaries controls, or is controlled by, or
is under common control with the Borrower; or (ii) which beneficially
owns or holds 10% or more of any class of the outstanding voting stock
(or in the case of a Person which is not a corporation, 10% or more of
the equity interest) of the Borrower or any Person described in clause
(i) above; or 10% or more of any class of the outstanding voting stock
(or in the case of a Person which is not a corporation, 10% or more of
the equity interest) of which is beneficially owned or held by the
Borrower. The term "control" means the possession, directly or
indirectly, of the power to direct or cause the direction of the
management and policies of a Person, whether through ownership of
voting stock, by contract or otherwise;
"Applicable Interest Addition" means for each Loan that
percent per annum set forth below, which shall be based upon the
Consolidated Funded Debt Ratio for the most recent Determination Date
as specified below:
<TABLE>
<CAPTION>
Applicable
Interest Addition
-----------------
Consolidated Base Eurodollar
Funded Debt Ratio Rate Rate
----------------- ---------- ----------
<S> <C> <C> <C>
(a) Greater than .55
to 1.00 0 .650%
(b) Less than or equal to
.55 to 1.00 and greater
than .50 to 1.00 0 .500%
(c) Less than or equal to
.50 to 1.00 0 .425%
</TABLE>
The Applicable Interest Addition shall be established at the end of
each fiscal quarter of the Borrower (the "Determination Date"). Any
change in the Applicable Interest Addition following each
Determination Date shall be determined based upon the computations set
forth in the certificate furnished to the Lender pursuant to Section
6.1(a)(ii) and Section 6.1(b)(ii) hereof, subject to review and
approval of such computations by the Lender and shall be effective (a)
in the case of Base Rate Loans, from the date such certificate is
received (or, if earlier, the date such certificate was required to be
delivered), and (b) in the case of Eurodollar Rate Loans, for all
Interest Periods commencing on or after the date such certificate is
received (or, if earlier, the date such certificate was required to be
delivered), and in
2
<PAGE> 8
each case, until the date a new certificate is delivered or is
required to be delivered, whichever shall first occur, and a new
Applicable Interest Addition becomes effective;
"Applicable Unused Fee" means that percent per annum set forth
below, which shall be based upon the Consolidated Funded Debt Ratio
for the Four-Quarter Period most recently ended as specified below:
<TABLE>
<CAPTION>
Applicable
Consolidated Unused
Funded Debt Ratio Fee
----------------- ----------
<S> <C> <C>
(a) Greater than .55 to 1.00 .2500%
(b) Less than or equal to .55 to 1.00
and greater than .50 to 1.00 .1875%
(c) Less than or equal
to .50 to 1.00 .1500%
</TABLE>
The Applicable Unused Fee shall be established at the end of each
fiscal quarter of the Borrower (the "Determination Date"). Any change
in the Applicable Unused Fee following each Determination Date shall
be determined based upon the computations set forth in the certificate
furnished to the Lender pursuant to Section 6.1(a)(ii) and Section
6.1(b)(ii) hereof, subject to review and approval of such computations
by the Lender and shall be effective from the date such certificate is
received (or, if earlier, the date such certificate was required to be
delivered) until the date a new certificate is delivered or is
required to be delivered, whichever shall first occur, and a new
Applicable Unused Fee becomes effective;
"Assignment and Acceptance" shall mean an Assignment and
Acceptance in the form of Exhibit B (with blanks appropriately filled
in) delivered to the Lender in connection with an assignment of a
Lender's interest under this Agreement pursuant to Section 9.1 hereof;
"Authorized Representative" means any of the President or
Vice President of the Borrower or, with respect to financial matters,
the chief financial officer of the Borrower or any other person
expressly designated by the Board of Directors of the Borrower (or the
appropriate committee thereof) as an Authorized Representative of the
Borrower, as set forth from time to time in a certificate in the form
attached hereto as Exhibit C;
"Base Rate" means the per annum rate of interest equal to the
sum of (a) the greater of (i) the Prime Rate or (ii) the Federal Funds
Effective Rate plus one-half of one percent (1/2%) plus (b) the
Applicable Interest Addition. Any change in the Base Rate resulting
from a change in the Prime Rate or the Federal Funds Effective Rate
shall become effective as of
3
<PAGE> 9
12:01 A.M. of the Business Day on which each such change occurs. The
Base Rate is a reference rate used by Lender in determining interest
rates on certain loans and is not intended to be the lowest rate of
interest charged on any extension of credit to any debtor;
"Base Rate Loan" means a Loan or a Segment of a Loan for which
the rate of interest is determined by reference to the Base Rate;
"Bernstein Family" means Philip Bernstein and his wife, their
children and their children's spouses and their grandchildren;
"Board" means the Board of Governors of the Federal Reserve
System (or any successor body);
"Borrower's Account" means a demand deposit account number
00936036 or any successor account with the Lender, which may be
maintained at one or more offices of the Lender or an agent of the
Lender;
"Borrowing Notice" means the notice delivered by an Authorized
Representative in connection with an Advance under the Revolving
Credit Facility, in the form attached hereto as Exhibit D and
incorporated herein by reference;
"Business Day" means, (i) with respect to any Base Rate Loan,
any day which is not a Saturday, Sunday or a day on which banks in the
State of North Carolina are authorized or obligated by law, executive
order or governmental decree to be closed and, (ii) with respect to
any Eurodollar Rate Loan, any day which is a Business Day, as
described above, and on which the relevant international financial
markets are open for the transaction of business contemplated by this
Agreement in London, England, New York, New York, and Charlotte, North
Carolina;
"Capital Leases" means all leases which have been or should be
capitalized in accordance with GAAP as in effect from time to time
including Statement No. 13 of the Financial Accounting Standards Board
and any successor thereof;
"Closing Date" means the date as of which this Agreement is
executed by the Borrower and the Lender and on which the conditions
set forth in Section 4.1 hereof have been satisfied;
"Code" means the Internal Revenue Code of 1986, as amended,
and any final or temporary regulations promulgated thereunder;
"Consistent Basis" in reference to the application of GAAP
means the accounting principles observed in the period referred to are
comparable in all material respects to those
4
<PAGE> 10
applied in the preparation of the audited financial statements of the
Borrower first delivered to the Lender hereunder;
"Consolidated Cash Flow" means, with respect to the Borrower
and its Subsidiaries for any Four-Quarter Period, the sum of, without
duplication, (i) Consolidated Net Income, plus (ii) amortization
accrued during such period, plus (iii) without duplication, any
depreciation during such period, plus (iv) all other non-cash charges
or expenses accrued during such period minus (v) all cash
distributions on any capital stock of the Borrower or its
Subsidiaries, minus (vi) all other non-cash gains otherwise included
in Consolidated Net Income during such period, all determined on a
consolidated basis in accordance with GAAP applied on a Consistent
Basis;
"Consolidated EBIT" means, with respect to the Borrower and
its Subsidiaries for any Four-Quarter Period ending on the date of
computation thereof, the sum of, without duplication, (i) Consolidated
Net Income, (ii) Consolidated Interest Expense, (iii) taxes on income
and (iv) Consolidated Lease Expense, all determined on a consolidated
basis in accordance with GAAP applied on a Consistent Basis;
"Consolidated Fixed Charge Coverage Ratio" means, with respect
to the Borrower and its Subsidiaries for any Four-Quarter Period
ending on the date of computation thereof, the ratio of (i)
Consolidated EBIT for such period, to (ii) Consolidated Fixed Charges
for such period;
"Consolidated Fixed Charges" means, with respect to Borrower
and its Subsidiaries for any Four-Quarter Period ending on the date of
computation thereof, the sum of, without duplication, (i) Consolidated
Interest Expense plus (ii) Consolidated Lease Expense, all determined
on a consolidated basis in accordance with GAAP applied on a
Consistent Basis;
"Consolidated Funded Debt Ratio" means, with respect to the
Borrower and its Subsidiaries, the ratio of (i) Consolidated Funded
Indebtedness, to (ii) the sum of Consolidated Funded Indebtedness plus
Consolidated Shareholders' Equity;
"Consolidated Funded Indebtedness" means the sum of (a) all
Indebtedness for Borrowed Money of the Borrower and its Subsidiaries,
plus (b) all obligations of the Borrower and its Subsidiaries in
connection with Capital Leases, plus (c) all direct and indirect
guaranties by the Borrower or any Subsidiary of Indebtedness of any
Person other than a Guarantor, all determined on a consolidated basis;
"Consolidated Interest Expense" means, with respect to any
period of computation thereof, the gross interest expense of the
Borrower and its Subsidiaries, including without limitation (i) the
current amortized portion of debt discounts to the extent included in
gross interest expense, (ii) the current amortized portion of all fees
(including, without
5
<PAGE> 11
limitation, fees payable in respect of a Hedging Agreement) payable in
connection with the incurrence of Indebtedness to the extent included
in gross interest expense and (iii) the portion of any payments made
in connection with Capital Leases allocable to interest expense, all
determined on a consolidated basis in accordance with GAAP applied on
a Consistent Basis;
"Consolidated Lease Expense" means for any period all amounts
paid or accrued by the Borrower and its Subsidiaries during such
period under operating leases (whether or not constituting rental
expense) determined on a consolidated basis;
"Consolidated Leverage Ratio" means, as of the date of
computation thereof, the ratio of (i) Consolidated Funded Indebtedness
as of such date to (ii) the sum of Consolidated Tangible Net Worth
plus Consolidated Funded Indebtedness as of such date;
"Consolidated Net Income" means, for any period of computation
thereof, the Net Income of the Borrower and its Subsidiaries
determined on a consolidated basis, but excluding (a) extraordinary
items and (b) any equity interests of the Borrower or any Subsidiary
in the unremitted earnings of any Person that is not a Subsidiary;
"Consolidated Shareholders' Equity " means at any time as of
which the amount thereof is to be determined, the sum of the following
in respect of the Borrower and its Subsidiaries (determined on a
consolidated basis and excluding intercompany items among the Borrower
and its Subsidiaries and any upward adjustment after the Closing Date
due to revaluation of assets): (i) the amount of issued and
outstanding share capital, plus (ii) the amount of additional paid-in
capital and retained income (or, in the case of a deficit, minus the
amount of such deficit), minus (iii) the amount of any treasury stock,
minus (iv) valuation allowances, minus (v) receivables due from the
Crown ESOP and minus (vi) any translation, adjustments for any foreign
currency transactions all as determined in accordance with GAAP
applied on a Consistent Basis;
"Consolidated Tangible Net Worth" means at any time as of
which the amount thereof is to be determined, Consolidated
Shareholders' Equity minus (without duplication of deductions in
respect of items already deducted in arriving at surplus and retained
earnings) the book value of all assets which would be treated as
intangible assets under GAAP, all as determined on a consolidated
basis in accordance with GAAP applied on a Consistent Basis;
"Consolidated Total Assets" means, as at any time of
calculation thereof, the net book value of all assets of the Borrower
and its Subsidiaries as determined on a consolidated basis in
accordance with GAAP applied on a Consistent Basis;
6
<PAGE> 12
"Contingent Obligation" of any Person means all contingent
liabilities required (or which, upon the creation or incurring
thereof, would be required) to be included in the financial statements
(including footnotes) of such Person in accordance with GAAP applied
on a Consistent Basis, including Statement No. 5 of the Financial
Accounting Standards Board, all Rate Hedging Obligations and any
obligation of such Person guaranteeing or in effect guaranteeing any
Indebtedness, dividend or other obligation of any other Person (the
"primary obligor") in any manner, whether directly or indirectly,
including obligations of such Person however incurred:
(a) to purchase such Indebtedness or other
obligation or any property or assets constituting security
therefor;
(b) to advance or supply funds in any manner (i)
for the purchase or payment of such Indebtedness or other
obligation, or (ii) to maintain a minimum working capital, net
worth or other balance sheet condition or any income statement
condition of the primary obligor;
(c) to grant or convey any lien, security
interest, pledge, charge or other encumbrance on any property
or assets of such Person to secure payment of such
Indebtedness or other obligation;
(d) to lease property or to purchase securities
or other property or services primarily for the purpose of
assuring the owner or holder of such Indebtedness or
obligation of the ability of the primary obligor to make
payment of such Indebtedness or other obligation; or
(e) otherwise to assure the owner of the
Indebtedness or such obligation of the primary obligor against
loss in respect thereof;
"Cost of Acquisition" means, with respect to any Acquisition,
as at the date of entering into any agreement therefor, the sum of the
following (without duplication): (i) the value of the capital stock,
warrants or options to acquire capital stock of Borrower or any
Subsidiary to be transferred in connection therewith, (ii) any cash or
other property (excluding property described in clause (i)) and the
unpaid principal amount of any debt instrument given as consideration,
(iii) any Indebtedness assumed by the Borrower or its Subsidiaries in
connection with such Acquisition, and (iv) out of pocket transaction
costs for the services and expenses of attorneys, accountants and
other consultants incurred in effecting such a transaction, and other
similar transaction costs so incurred (all such costs in excess of
such amount being included as a "Cost of Acquisition" for such
transaction). For purposes of determining the Cost of Acquisition for
any transaction, (A) the capital stock of the Borrower shall be valued
(I) at its market value as reported on the New York Stock Exchange
with respect to shares that are
7
<PAGE> 13
freely tradeable, and (II) with respect to shares that are not freely
tradeable, as determined by the Board of Directors of the Borrower
and, if requested by the Lender, determined to be a reasonable
valuation by the independent public accountants referred to in Section
6.1(a) hereof, (B) the capital stock of any Subsidiary shall be valued
as determined by the Board of Directors of such Subsidiary and, if
requested by the Lender, determined to be a reasonable valuation by
the independent public accountants referred to in Section 6.1(a)
hereof, and (C) with respect to any Acquisition accomplished pursuant
to the exercise of options or warrants or the conversion of
securities, the Cost of Acquisition shall include both the cost of
acquiring such option, warrant or convertible security as well as the
cost of exercise or conversion;
"Crown ESOP" means that certain employee stock ownership plan
of the Borrower as in effect on the date hereof;
"Default" means any event or condition which, with the giving
or receipt of notice or lapse of time or both, would constitute an
Event of Default hereunder;
"Dollars" and the symbol "$" means dollars constituting legal
tender for the payment of public and private debts in the United
States of America;
"Eastern Time" means Eastern Standard Time or Eastern Daylight
Time, as applicable;
"Eligible Securities" means the following obligations and any
other obligations previously approved in writing by the Lender:
(a) Government Securities;
(b) obligations of any corporation organized under
the laws of any state of the United States of America or under
the laws of any other nation, payable in the United States of
America, expressed to mature not later than 90 days following
the date of issuance thereof and rated in an investment grade
rating category by S&P and Moody's;
(c) interest bearing demand or time deposits issued
by any bank or certificates of deposit, bankers acceptances
and other "money market instruments" maturing within one
hundred eighty (180) days from the date of issuance thereof
and issued by a bank or trust company organized under the laws
of the United States or of any state thereof having capital
surplus and undivided profits aggregating at least
$400,000,000 and being rated A or better by S&P or A2 or
better by Moody's;
(d) Repurchase Agreements;
(e) Municipal Obligations;
8
<PAGE> 14
(f) shares of mutual funds which invest exclusively
in obligations described in paragraphs (a) through (e) above,
the shares of which mutual funds are at all times rated "AAA"
by S&P; and
(g) shares of "money market funds," of financial
institutions rated A or better by S&P or A2 or better by
Moody's;
"Employee Benefit Plan" means any employee benefit plan within
the meaning of Section 3(3) of ERISA which (a) is maintained for
employees of the Borrower or is assumed by the Borrower in connection
with any Acquisition or any of its ERISA Affiliates or (b) has at any
time during the six (6) years immediately prior the date hereof been
maintained for the employees of the Borrower or any current or former
ERISA Affiliate;
"Environmental Laws" means, collectively, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as
amended, the Superfund Amendments and Reauthorization Act of 1986, the
Resource Conservation and Recovery Act, the Toxic Substances Control
Act, as amended, the Clean Air Act, as amended, the Clean Water Act,
as amended, any other "Superfund" or "Superlien" law or any other
federal, or applicable state or local statute, law, ordinance, code,
rule, regulation, order or decree regulating, relating to, or imposing
liability or standards of conduct concerning, any Hazardous Material;
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and any successor statute and all
final or temporary regulations promulgated thereunder;
"ERISA Affiliate", as applied to the Borrower, means any Person
or trade or business which is a member of a group which is under
common control with the Borrower, who together with the Borrower, is
treated as a single employer within the meaning of Section 414(b) and
(c) of the Code;
"Eurodollar Rate Loan" means a Loan for which the rate of
interest is determined by reference to the Eurodollar Rate;
"Eurodollar Rate" means the interest rate per annum calculated
according to the following formula:
<TABLE>
<S> <C>
Eurodollar = Interbank Offered Rate + Applicable
-------------------------------- Interest Addition
Rate 1- Eurodollar Reserve Percentage
</TABLE>
"Eurodollar Reserve Percentage" means, for any day, that
percentage (expressed as a decimal) which is in effect from time to
time, as the maximum reserve requirement (including, without
limitation, any basic, supplemental, emergency, special, or marginal
reserves) applicable with respect to Eurocurrency liabilities as that
term is defined in Regulation D or any successor regulation (or
against any other category
9
<PAGE> 15
of liabilities that includes deposits by reference to which the
interest rate of Eurodollar Rate Loans is determined), whether or not
Lender has any Eurocurrency liabilities subject to such requirements
without benefits of credits or proration, exceptions or offsets that
may be available from time to time to Lender. The Eurodollar Rate
shall be adjusted automatically on and as of the effective date of any
change in the Eurodollar Reserve Percentage;
"Event of Default" means any of the occurrences set forth as
such in Section 8.1 hereof;
"Federal Funds Effective Rate" means, for any day, the rate
per annum (rounded upward to the nearest 1/100th of 1%) equal to the
weighted average of the rates on overnight Federal funds transactions
with members of the Federal Reserve System arranged by Federal funds
brokers on such day, as published by the Federal Reserve Bank of New
York on the Business Day next succeeding such day, provided that (a)
if such day is not a Business Day, the Federal Funds Rate for such day
shall be such rate on such transactions on the next preceding Business
Day, and (b) if no such rate is so published on such next succeeding
Business Day, the Federal Funds Rate for such day shall be the average
rate quoted to the Lender on such day on such transaction as
determined by the Lender;
"Fiscal Year" means the twelve month fiscal period of the
Borrower ending the Sunday nearest March 31 of each calendar year; any
reference to a Fiscal Year immediately followed by a calendar year
shall mean the Fiscal Year ending in such calendar year;
"Foreign Benefit Law" means any applicable statute, law,
ordinance, code, rule, regulation, order or decree of any foreign
nation or any province, state, territory, protectorate or other
political subdivision thereof regulating, relating to, or imposing
liability or standards of conduct concerning, any Employee Benefit
Plan;
"Four-Quarter Period" means a period of four full consecutive
fiscal quarters of the Borrower and its Subsidiaries, taken together
as one accounting period;
"GAAP" means Generally Accepted Accounting Principles, being
those principles of accounting set forth in pronouncements of the
Financial Accounting Standards Board, the American Institute of
Certified Public Accountants or which have other substantial
authoritative support and are applicable in the circumstances as of
the date of a report, as such principles are from time to time
supplemented and amended;
"Government Securities" means direct obligations of, or
obligations the timely payment of principal and interest on
10
<PAGE> 16
which are fully and unconditionally guaranteed by, the United States
of America;
"Governmental Authority" shall mean any Federal, state,
municipal, national or other governmental department, commission,
board, bureau, agency or instrumentality or political subdivision
thereof or any entity or officer exercising executive, legislative or
judicial, regulatory or administrative functions of or pertaining to
any government or any court, in each case whether a state of the
United States, the United States or foreign;
"Guaranties" means all obligations of the Borrower or any
Subsidiary directly or indirectly guaranteeing, or in effect
guaranteeing, any Indebtedness or other obligation of any other
Person;
"Guarantors" means on any date the Subsidiaries party to a
Subsidiary Guaranty on such date and shall in any event include all
Material Subsidiaries;
"Hazardous Material" means and includes any hazardous, toxic
or dangerous waste, substance or material, the generation, handling,
storage, disposal, treatment or emission of which is subject to any
Environmental Law;
"Indebtedness" means with respect to any Person, without
duplication, all Indebtedness for Money Borrowed, all indebtedness of
such Person for the acquisition of property, all indebtedness secured
by any Lien on the property of such Person whether or not such
indebtedness is assumed, all liability of such Person by way of
endorsements (other than for collection or deposit in the ordinary
course of business), all Contingent Obligations, that portion of
obligations with respect to Capital Leases and other items which in
accordance with GAAP is classified as a liability on a balance sheet;
but excluding all accounts payable in the ordinary course of business
so long as payment therefor is due within one year; provided that in
no event shall the term Indebtedness include surplus and retained
earnings, lease obligations (other than pursuant to Capital Leases),
reserves for deferred income taxes and investment credits, other
deferred credits and reserves, and deferred compensation obligations;
"Indebtedness for Money Borrowed" means for any Person all
indebtedness in respect of money borrowed, including without
limitation all Capital Leases and the deferred purchase price of any
property or asset, evidenced by a promissory note, bond, debenture or
similar written obligation for the payment of money, other than trade
payables incurred in the ordinary course of business;
"Interbank Offered Rate" means, with respect to any Eurodollar
Rate Loan for the Interest Period applicable thereto, the average
(rounded upward to the nearest one-sixteenth (1/16) of one percent)
per annum rate of interest
11
<PAGE> 17
determined by the office of Lender then determining such rate (each
such determination to be conclusive and binding) as of two Business
Days prior to the first day of such Interest Period, as the effective
rate at which deposits in immediately available funds in Dollars are
being, have been, or would be offered or quoted by Lender to major
banks in the applicable interbank market for Eurodollar deposits at
any time during the Business Day which is the second Business Day
immediately preceding the first day of such Interest Period, for a
term comparable to such Interest Period and in the amount of the
Eurodollar Rate Loan;
"Interest Period" for each Eurodollar Rate Loan means a period
commencing on the date such Eurodollar Rate Loan is made or converted
and each subsequent period commencing on the last day of the
immediately preceding Interest Period for such Eurodollar Rate Loan,
and ending, at the Borrower's option, on the date one, two, three or
six months thereafter as notified to the Lender by the Authorized
Representative no later than three (3) Business Days prior to the
beginning of such Interest Period; provided, that,
(i) if the Authorized Representative fails to
notify the Lender of the length of an Interest Period three
(3) Business Days prior to the first day of such Interest
Period, the Loan for which such Interest Period was to be
determined shall be deemed to be a Base Rate Loan as of the
first day thereof;
(ii) if an Interest Period for a Eurodollar Rate
Loan would end on a day which is not a Business Day such
Interest Period shall be extended to the next Business Day
(unless such extension would cause the applicable Interest
Period to end in the succeeding calendar month, in which case
such Interest Period shall end on the next preceding Business
Day);
(iii) any Interest Period which begins on the last
Business Day of a calendar month (or on a day for which there
is no numerically corresponding day in the calendar month at
the end of such Interest Period) shall end on the last
Business Day of a calendar month;
(iv) no Interest Period shall extend past August 25, 1998
or such later date as shall become the scheduled Revolving
Credit Termination Date pursuant to Section 2.12 hereof; and
(v) there shall not be more than four (4) Interest
Periods in effect on any day.
"Interest Rate Selection Notice" means the notice delivered by
an Authorized Representative in connection with the election of a
subsequent interest period for any Eurodollar Rate Loan or the
conversion of any Eurodollar Rate Loan into a Base Rate Loan or the
conversion of any Base Rate
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Loan into a Eurodollar Rate Loan, in the form of Exhibit E attached
hereto;
"Lien" means any interest in property securing any obligation
owed to, or a claim by, a Person other than the owner of the property,
whether such interest is based on the common law, statute or contract,
and including but not limited to the lien or security interest arising
from a mortgage, encumbrance, pledge, security agreement, conditional
sale or trust receipt or a lease, consignment or bailment for security
purposes. For the purposes of this Agreement, the Borrower and any
Subsidiary shall be deemed to be the owner of any property which it
has acquired or holds subject to a conditional sale agreement,
financing lease, or other arrangement pursuant to which title to the
property has been retained by or vested in some other Person for
security purposes;
"Loan" or "Loans" means any of the Revolving Loans made under
the Revolving Credit Facility;
"Loan Documents" means this Agreement, any Subsidiary
Guaranty, the Notes and all other instruments and documents heretofore
or hereafter executed or delivered to or in favor of the Lender in
connection with the Loans made and transactions contemplated under
this Agreement, as the same may be amended, supplemented or replaced
from the time to time;
"Margin Stock" shall have the meaning given to such term in
Section 5.11 hereof;
"Material Adverse Effect" means with respect to the Borrower
and any Guarantor a material adverse effect (x) on the business,
properties, operations or condition, financial or otherwise, of the
Borrower and its Subsidiaries taken as a whole or (y) on the ability
of any party to the Loan Documents to perform, or of the Lender to
enforce, the obligations of such Person under the Loan Documents to
which it is a party;
"Material Subsidiary" means (i) any direct or indirect
Subsidiary of the Borrower which (a) has total assets equal to or
greater than 10% of Consolidated Total Assets (calculated as of the
most recent fiscal period with respect to which the Lender shall have
received financial statements required to be delivered pursuant to
Sections 6.1(a) or (b) (or if prior to delivery of any financial
statements pursuant to such Sections, then calculated with respect to
the Fiscal Year end financial statements referenced in Section 5.6
hereof) (the "Required Financial Information")) or (ii) has net income
equal to or greater than 10% of Consolidated Net Income (each
calculated for the most recent Four-Quarter Period for which the
Lender has received the Required Financial Information); provided,
however, that notwithstanding the foregoing, if the Borrower and the
Material Subsidiaries, as defined above, have less than 90% of
Consolidated Total Assets (calculated as
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<PAGE> 19
described above) or have Net Income of less than 90% of Consolidated
Net Income (as calculated above), then the term "Material
Subsidiaries" shall mean Subsidiaries of the Borrower, as specified by
the Borrower, that together with the Borrower have assets equal to not
less than 90% of Consolidated Total Assets (calculated as described
above) and net income of not less than 90% of Consolidated Net Income
(calculated as described above);
"Moody's" means Moody's Investors Service, Inc.;
"Multiemployer Plan" means a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA to which the Borrower or any ERISA
Affiliate is making, or is accruing an obligation to make,
contributions or has made, or been obligated to make, contributions
within the preceding six (6) years;
"Municipal Obligations" means general obligations issued by,
and supported by the full taxing authority of, any state of the United
States of America or of any municipal corporation or other public body
organized under the laws of any such state which are rated, in their
capacity as issuer of general obligations, in the highest investment
rating category by both S&P and Moody's;
"Net Income" means, as applied to any Person for any period,
the aggregate amount of net income of such Person, after taxes, for
such period, as determined in accordance with GAAP applied on a
Consistent Basis;
"Notes" means, collectively, the Revolving Notes;
"Obligations" means the obligations, liabilities and
Indebtedness of the Borrower with respect to (i) the principal and
interest on the Loans as evidenced by the Notes, (ii) all liabilities
of Borrower to the Lender which arise under a Swap Agreement and (iii)
the payment and performance of all other obligations, liabilities and
Indebtedness of the Borrower to the Lender hereunder, under any one or
more of the other Loan Documents or with respect to the Loans;
"PBGC" means the Pension Benefit Guaranty Corporation and any
successor thereto;
"Pension Plan" means any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to the provisions of Title IV of
ERISA or Section 412 of the Code and which is, or was during the six
(6) years immediately prior to the date hereof maintained for
employees of the Borrower or any ERISA Affiliate;
"Permitted Liens" shall have the meaning given to such term in
Section 7.5 hereof;
"Permitted Stock Repurchases" shall have the meaning given to
such term in Section 7.9 hereof;
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"Person" means an individual, partnership, corporation, trust,
unincorporated organization, association, joint venture or a
government or agency or political subdivision thereof;
"Prime Rate" means the rate of interest per annum announced
publicly by the Lender as its prime rate from time to time. The Prime
Rate is not necessarily the best or the lowest rate of interest
offered by the Lender;
"Principal Office" means the office of the Lender at
Independence Center, 15th Floor, 001-15-04, Charlotte, North Carolina
28255 or such other office and address as the Lender may from time to
time designate;
"Rate Hedging Obligations" means any and all obligations of
the Borrower or any Subsidiary, whether absolute or contingent and
howsoever and whensoever created, arising, evidenced or acquired
(including all renewals, extensions and modifications thereof and
substitutions therefor), under (i) any and all agreements, devices or
arrangements designed to protect at least one of the parties thereto
from the fluctuations of interest rates, exchange rates or forward
rates applicable to such party's assets, liabilities or exchange
transactions, including, but not limited to, Dollar-denominated or
cross-currency interest rate exchange agreements, forward currency
exchange agreements, interest rate cap or collar protection
agreements, forward rate currency or interest rate options, puts,
warrants and those commonly known as interest rate "swap" agreements;
and (ii) any and all cancellations, buybacks, reversals, terminations
or assignments of any of the foregoing;
"Regulation D" means Regulation D of the Board as the same may
be amended or supplemented from time to time;
"Regulatory Change" means any change effective after the
Closing Date in United States federal or state laws or regulations
(including Regulation D and capital adequacy regulations) or foreign
laws or regulations or the adoption or making after such date of any
interpretations, directives or requests applying to a class of banks,
which includes any of the Lenders, under any United States federal or
state or foreign laws or regulations (whether or not having the force
of law) by any court or governmental or monetary authority charged
with the interpretation or administration thereof or compliance by the
Lender with any request or directive regarding capital adequacy,
including with respect to "highly leveraged transactions," whether or
not having the force of law, whether or not failure to comply
therewith would be unlawful and whether or not published or proposed
prior to the date hereof;
"Repurchase Agreement" means a repurchase agreement entered
into with any financial institution whose debt obligations or
commercial paper are rated "A" by either of S&P or Moody's or "A-1" by
S&P or "P-1" by Moody's;
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<PAGE> 21
"Restricted Payment" means (a) any redemption, conversion,
exchange, retirement or similar payment, purchase or other acquisition
for value, direct or indirect, of any shares of any class of stock of
Borrower now or hereafter outstanding, other than shares redeemed,
converted, exchanged or retired in connection with the existing
employee stock option plan of the Borrower; and (b) any payment made
to retire, or to obtain the surrender of, any outstanding warrants,
options or other rights to acquire shares of any class of stock of
Borrower or any Subsidiary now or hereafter outstanding;
"Revolving Credit Commitment" means, with respect to the
Lender, the obligation of such Lender to make Revolving Loans to the
Borrower up to an aggregate principal amount at any one time
outstanding equal to the Total Revolving Credit Commitment as set
forth on Exhibit A hereto as the same may be increased or decreased
from time to time pursuant to this Agreement;
"Revolving Credit Facility" means the facility described in
Article II hereof providing for Loans to the Borrower by the Lender in
the aggregate principal amount equal to the Total Revolving Credit
Commitment;
"Revolving Credit Outstandings" means, as of any date of
determination, the aggregate principal amount of all Revolving Loans
then outstanding and all interest accrued and unpaid thereon;
"Revolving Credit Termination Date" means (i) August 25, 1998
or such later date as the Lender, in accordance with Section 2.10
hereof, may determine to be the Revolving Credit Termination Date or
(ii) such earlier date of termination of Lender's obligations pursuant
to Section 8.1 upon the occurrence of an Event of Default, or (iii)
such date as the Borrower may voluntarily and permanently terminate
the Revolving Credit Facility by payment in full of all Revolving
Credit Outstandings and cancellation of the Total Revolving Credit
Commitment pursuant to Section 2.6 hereof;
"Revolving Loan" means any borrowing pursuant to an Advance
under the Revolving Credit Facility in accordance with Article II
hereof;
"Revolving Note" means the promissory note of the Borrower
evidencing Revolving Loans executed and delivered to the Lender as
provided in Section 2.5 hereof substantially in the form attached
hereto as Exhibit F;
"S&P" means Standard & Poor's Ratings Group;
"Single Employer Plan" means any employee pension benefit plan
covered by Title IV of ERISA in respect of which the Borrower is an
"employer" as described in Section 4001(b) of ERISA and which is not a
Multi-employer Plan;
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"Solvent" means, when used with respect to any Person, that at
the time of determination:
(i) the fair value of its assets (both at fair
valuation and at present fair saleable value on an orderly
basis) is in excess of the total amount of its liabilities,
including, without limitation, Contingent Obligations; and
(ii) it is then able and expects to be able to
pay its debts as they mature; and
(iii) it has capital sufficient to carry on its
business as conducted and as proposed to be conducted;
"Subsidiary" means any corporation or other entity in which
more than 50% of its outstanding voting stock or more than 50% of all
equity interests is owned directly or indirectly by the Borrower
and/or by one or more of the Borrower's Subsidiaries;
"Subsidiary Guaranty" means each guaranty agreement between
one or more of the Subsidiaries and the Lender which is delivered by a
Subsidiary pursuant to Section 6.23 hereof and substantially in the
form of Exhibit G hereof, as the same may be amended, modified or
supplemented;
"Swap Agreement" means one or more agreements between the
Borrower and any Person with respect to Indebtedness evidenced by the
Notes, on terms mutually acceptable to Borrower and such Person and
approved by the Lender, which agreements create Rate Hedging
Obligations;
"Termination Event" means: (a) a "Reportable Event" described
in Section 4043 of ERISA and the regulations issued thereunder (unless
the notice requirement has been waived by applicable regulation); or
(b) the withdrawal of the Borrower or any ERISA Affiliate from a
Pension Plan during a plan year in which it was a "substantial
employer" as defined in Section 4001(a)(2) of ERISA or was deemed such
under Section 4068(f) of ERISA; or (c) the termination of a Pension
Plan, the filing of a notice of intent to terminate a Pension Plan or
the treatment of a Pension Plan amendment as a termination under
Section 4041 of ERISA; or (d) the institution of proceedings to
terminate a Pension Plan by the PBGC; or (e) any other event or
condition which would constitute grounds under Section 4042(a) of
ERISA for the termination of, or the appointment of a trustee to
administer, any Pension Plan; or (f) the partial or complete
withdrawal of the Borrower or any ERISA Affiliate from a Multiemployer
Plan; or (g) the imposition of a Lien pursuant to Section 412 of the
Code or Section 302 of ERISA; or (h) any event or condition which
results in the reorganization or insolvency of a Multiemployer Plan
under Section 4241 or Section 4245 of ERISA, respectively; or (i) any
event or condition which results in the termination of a Multiemployer
Plan under Section 4041A of
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<PAGE> 23
ERISA or the institution by the PBGC of proceedings to terminate a
Multiemployer Plan under Section 4042 of ERISA;
"Total Revolving Credit Commitment" means a principal amount
equal to $15,000,000, as reduced from time to time in accordance with
Section 2.7 hereof; and
"Wachovia" means Wachovia Bank of Georgia, N.A., a national
banking association, together with its successors;
"Wachovia Facility" means that certain revolving credit
facility in the aggregate amount of $15,000,000 provided to the
Borrower by Wachovia pursuant to that certain Revolving Credit
Agreement dated as of the date hereof.
1.2 Accounting Terms. All accounting terms not specifically
defined herein shall have the meanings assigned to such terms and shall be
interpreted in accordance with GAAP applied on a Consistent Basis.
1.3 UCC Terms. Each term defined in Article 1 or 9 of the Georgia
Uniform Commercial Code shall have the meaning given therein unless otherwise
defined herein, except to the extent that the Uniform Commercial Code of
another jurisdiction is controlling, in which case such terms shall have the
meaning given in the Uniform Commercial Code of the applicable jurisdiction.
ARTICLE II
The Revolving Credit Facility
2.1. Revolving Loans.
(a) Commitment. Subject to the terms and conditions of
Article V of this Agreement, the Lender severally agrees to make Advances to
the Borrower under the Revolving Credit Facility from time to time from the
Closing Date until the Revolving Credit Termination Date on a pro rata basis as
to the total borrowing requested by the Borrower on any day up to but not
exceeding the Revolving Credit Commitment of the Lender. Within such limits,
the Borrower may borrow, repay and reborrow under the Revolving Credit Facility
on a Business Day from the Closing Date until, but (as to borrowings and
reborrowings) not including, the Revolving Credit Termination Date; provided,
however, that (y) no Revolving Loan that is a Eurodollar Rate Loan shall be
made which has an Interest Period that extends beyond the Revolving Credit
Termination Date and (z) each Revolving Loan that is a Eurodollar Rate Loan
may, subject to the provisions of Section 2.7 hereof, be repaid only on the
last day of the Interest Period with respect thereto.
(b) Amounts. Except as otherwise permitted by the
consent of the Lender from time to time, the aggregate unpaid principal amount
of the Revolving Credit Outstandings shall not exceed at any time the Total
Revolving Credit Commitment. The
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Lender shall have no obligation to advance any funds in excess of the Total
Revolving Credit Commitment. Each Revolving Loan hereunder and each conversion
under Section 2.7 hereof shall be in an amount of at least (i) $2,000,000, and,
if greater than $2,000,000, an integral multiple of $1,000,000, if a Eurodollar
Rate Loan and (ii) $250,000, and, if greater than $250,000, an integral
multiple of $100,000, if a Base Rate Loan.
(c) Advances. (i) An Authorized Representative shall
give the Lender (A) at least three (3) Business Days' irrevocable telephonic
notice of each Revolving Loan that is a Eurodollar Rate Loan (whether
representing an additional borrowing hereunder or the conversion of borrowing
hereunder from Base Rate Loans to Eurodollar Rate Loans) prior to 10:00 A.M.
Eastern Time and (B) irrevocable written notice of each Revolving Loan that is
a Base Rate Loan (whether representing an additional borrowing hereunder or the
conversion of borrowing hereunder from Eurodollar Rate Loans to Base Rate
Loans) prior to 10:00 A.M. Eastern Time on the day of such proposed Revolving
Loan. Each such telephonic notice, which shall be effective upon receipt by
the Lender, shall specify the amount of the borrowing, the type of Revolving
Loan (Base Rate or Eurodollar Rate), the date of borrowing and, if a Eurodollar
Rate Loan, the Interest Period to be used in the computation of interest. The
Authorized Representative shall provide the Lender written confirmation of each
such telephonic notice no later than 11:00 A.M. Eastern Time on the same day
received by telefacsimile transmission in the form of a Borrowing Notice for
additional Advances, or in the form of an Interest Rate Selection Notice for
the selection or conversion of interest rates for outstanding Revolving Credit
Loans, in each case with appropriate insertions, but failure to provide such
confirmation shall not affect the validity of such telephonic notice. The
amount of any Advance shall, subject to the terms and conditions of this
Agreement, be made available to the Borrower by delivery of the proceeds
thereof to the Borrower's Account or otherwise as shall be directed in the
applicable Borrowing Notice by the Authorized Representative not later than
3:00 P.M., Eastern Time on the day so received.
(ii) The duration of the initial Interest Period for each Revolving
Loan that is a Eurodollar Rate Loan shall be as specified in the initial
Borrowing Notice for such Loan. The Borrower shall have the option to elect
the duration of subsequent Interest Periods and to convert the Loans in
accordance with Section 2.7 hereof. If the Lender does not receive an Interest
Rate Selection Notice giving notice of election of duration of an Interest
Period or conversion by the time prescribed by Section 2.7 hereof, the Borrower
shall be deemed to have elected to convert such Revolving Loan to (or continue
such Revolving Loan as) a Base Rate Loan until the Borrower notifies the Lender
in accordance with Section 2.7 hereof.
2.2. Payment of Interest. (a) The Borrower shall pay interest to
the Lender on the outstanding and unpaid principal amount of each Revolving
Loan made by the Lender for the period commencing on the date of such Revolving
Loan until such Revolving Loan shall be due at the then applicable Base Rate
for Base Rate
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Loans or applicable Eurodollar Rate for Eurodollar Rate Loans, as designated by
the Authorized Representative pursuant to Section 2.1 hereof; provided,
however, that if any amount of principal or interest or fees to the Lender
shall not be paid when due (at maturity, by acceleration or otherwise), or any
Event of Default shall have occurred and be continuing hereunder, all amounts
outstanding hereunder shall bear interest so long as such amount shall remain
unpaid or such Event of Default continues, as applicable, (i) in the case of a
Eurodollar Rate Loan, until the end of the Interest Period with respect to any
Eurodollar Rate Loan at a rate of two percent (2%) above the applicable
Eurodollar Rate for such Eurodollar Rate Loan and thereafter at a rate per
annum which shall be two percent (2%) plus the Base Rate, (ii) with respect to
Base Rate Loans, fees or other amounts owing hereunder, at a rate of interest
per annum which shall be two percent (2%) above the Base Rate, and (iii) in any
case, the maximum rate permitted by applicable law, if lower.
(b) Interest on each Revolving Loan shall be computed on
the basis of a year of 360 days and calculated for the actual number of days
elapsed. Interest on each Revolving Loan shall be paid (i) quarterly in
arrears on the last Business Day of each June, September, December and March,
commencing September 29, 1995 for each Base Rate Loan, (ii) on the last day of
the applicable Interest Period for each Eurodollar Rate Loan and if such
interest period extends for more than three (3) months, at intervals of three
(3) months after the first day of such Interest Period and (iii) upon payment
in full of the principal amount of such Revolving Loan.
2.3. Payment of Principal. The principal amount of each Revolving
Loan shall be due and payable to the Lender in full on the Revolving Credit
Termination Date, or earlier as specifically provided herein. The principal
amount of any Base Rate Loan may be prepaid in whole or in part on any Business
Day provided the Borrower gives the Lender notice of such prepayment by
telecopy at or prior to 10:00 A.M. Eastern Time on the date of such prepayment.
The principal amount of any Eurodollar Rate Loan may be prepaid only at the end
of the applicable Interest Period unless the Borrower shall pay to the Lender
the amount, if any, required under Section 3.4 hereof. If at any time the
amount of Revolving Credit Outstandings exceeds the Total Revolving Credit
Commitment, a principal amount of the outstanding Revolving Loans equal to such
excess shall be due and payable immediately. All prepayments of Revolving
Loans made by the Borrower shall be in the amount of $250,000 or such greater
amount which is an integral multiple of $100,000, or such other amount as
necessary to comply with this Section 2.3 or with Section 2.7 hereof.
2.4. Non-Conforming Payments. (a) Each payment of principal
(including any prepayment) and payment of interest and fees, and any other
amount required to be paid to the Lender with respect to the Revolving Loans,
shall be made to the Lender at the Principal Office in Dollars and in
immediately available funds before 12:30 P.M. Eastern Time on the date such
payment is due. The Lender may, but shall not be obligated to, debit the
amount of any such payment
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which is not made by such time to any ordinary deposit account, if any, of the
Borrower with the Lender.
(b) The Lender shall deem any payment made by or on
behalf of the Borrower hereunder that is not made both in Dollars and in
immediately available funds and prior to 12:30 P.M. Eastern Time to be a
non-conforming payment. Any such payment shall not be deemed to be received by
the Lender until the later of (i) the time such funds become available funds
and (ii) the next Business Day. Any non-conforming payment may constitute or
become a Default or Event of Default. Interest shall continue to accrue on any
principal as to which a non-conforming payment is made until the later of (x)
the date such funds become available funds or (y) the next Business Day at the
respective rates of interest per annum specified in the proviso to Section 2.2
hereof regarding late payments of interest, from the date such amount was due
and payable.
(c) In the event that any payment hereunder or under the
Revolving Notes becomes due and payable on a day other than a Business Day,
then such due date shall be extended to the next succeeding Business Day unless
provided otherwise under clause (ii) of the definition of "Interest Period";
provided that interest shall continue to accrue during the period of any such
extension and provided further, that in no event shall any such due date be
extended beyond the Revolving Credit Termination Date.
2.5. Revolving Notes. Revolving Credit Loans made by the Lender
shall be evidenced by the Revolving Notes, which Revolving Notes shall be dated
the Closing Date or such later date pursuant to an Assignment and Acceptance
and shall be duly completed, executed and delivered by the Borrower.
2.6. Reductions. The Borrower shall, by notice from an Authorized
Representative, have the right from time to time, upon not less than three (3)
Business Days written notice to the Lender, to reduce the Total Revolving
Credit Commitment. Each such reduction shall be in the aggregate amount of
$2,500,000 or such greater amount which is in an integral multiple of $500,000,
and shall permanently reduce the Total Revolving Credit Commitment. No such
reduction shall result in the payment of any Eurodollar Rate Loan other than on
the last day of the Interest Period of such Eurodollar Rate Loan unless such
prepayment is accompanied by amounts due, if any, under Section 3.4 hereof.
Each reduction of the Total Revolving Credit Commitment shall be accompanied by
payment of the Revolving Notes to the extent that the amount of Revolving
Credit Outstandings exceeds the Total Revolving Credit Commitment after giving
effect to such reduction, together with accrued and unpaid interest on the
amounts prepaid and any fees otherwise due.
2.7. Conversions and Elections of Subsequent Interest Periods.
Provided that no Event of Default shall have occurred and be continuing and
subject to the limitations set forth below and in Sections 3.1(b), 3.2 and 3.3
hereof, the Borrower may:
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(a) upon delivery of a properly completed Interest Rate
Selection Notice to the Lender on or before 11:00 A.M. Eastern Time on any
Business Day, convert all or a part of Eurodollar Rate Loans to Base Rate Loans
on the last day of the Interest Period for such Eurodollar Rate Loans; and
(b) upon delivery of a properly completed Interest Rate
Selection Notice to the Lender on or before 11:00 A.M. Eastern Time three (3)
Business Days prior to the date of such election or conversion:
(i) elect a subsequent Interest Period for all or
a portion of Eurodollar Rate Loans to begin on the last day of
the current Interest Period for such Eurodollar Rate Loans;
and
(ii) convert Base Rate Loans to Eurodollar Rate
Loans on any date.
Each election and conversion pursuant to this Section 2.7 shall be
subject to the limitations on Eurodollar Rate Loans set forth in the definition
of "Interest Period" herein and in Sections 2.1, 2.3 and Article IV hereof.
2.8. Unused Fee. For the period beginning on the Closing Date and
ending on the Revolving Credit Termination Date, the Borrower agrees to pay to
the Lender an unused fee equal to the Applicable Unused Fee multiplied by the
average daily amount by which the Total Revolving Credit Commitment exceeds
Revolving Credit Outstandings. Such payments of fees provided for in this
Section 2.8 shall be due in arrears on the last Business Day of each June,
September, December and March, commencing September 29, 1995 to and on the
Revolving Credit Termination Date. Notwithstanding the foregoing, so long as
the Lender fails to make available any of its Revolving Credit Commitment when
required, the Lender shall not be entitled to receive payment of such fee until
the Lender shall make its Revolving Credit Commitment available. Such fee
shall be calculated on the basis of a year of 360 days for the actual number of
days elapsed.
2.9. Use of Proceeds. The proceeds of the Loans made pursuant to the
Revolving Credit Facility hereunder shall be used by the Borrower for
Acquisitions permitted hereunder, general working capital needs and other
corporate purposes, provided, however, that no portion of the Revolving Credit
Facility shall be used, directly or indirectly, in connection with any
financing of a hostile Acquisition.
2.10. Extension of Revolving Credit Termination Date. At the request
of the Borrower the Lender may, in its sole discretion, elect not more than
twice after the Closing Date to extend the Revolving Credit Termination Date
then in effect for one additional period of one year. The Borrower shall
notify the Lender in writing of its request for such an extension of one year
by delivering to the Lender notice of such request signed by an Authorized
Representative not less than ninety (90) days prior to
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the first and second anniversary dates of the Closing Date. If the Lender
shall elect to so extend, the Lender shall notify the Borrower in writing
within thirty (30) days of its receipt of such request for extension of the
decision of the Lender as to whether to extend the Revolving Credit Termination
Date and any conditions applicable to such extension. Failure by the Lender to
respond to a request for an extension shall constitute a refusal of the Lender
to give its consent to such extension.
ARTICLE III
Yield Protection and Illegality
3.1. Additional Costs. (a) The Borrower shall promptly pay to the
Lender from time to time, without duplication, such amounts as such Lender may
reasonably determine to be necessary to compensate it or its parent
corporation, without duplication, for any costs incurred by the Lender or its
parent corporation which it determines are attributable to its making or
maintaining any Loan or its obligation to make any Loans, or any reduction in
any amount receivable by the Lender under this Agreement or the Notes in
respect of any of such Loans, including reductions in the rate of return on a
Lender's capital (such increases in costs and reductions in amounts receivable
and returns being herein called "Additional Costs"), resulting from any
Regulatory Change which: (i) changes the basis of taxation of any amounts
payable to such Lender under this Agreement or the Notes in respect of any of
such Loans (other than taxes imposed on or measured by income, revenues or
assets); or (ii) imposes or modifies any reserve, special deposit, or similar
requirements relating to any extensions of credit or other assets of, or any
deposits with or other liabilities of, such Lender or its parent corporation
(other than any such reserve, deposit or requirement reflected in the Prime
Rate, the Federal Funds Effective Rate or the Eurodollar Rate, in each case
computed in accordance with the respective definitions of such terms set forth
in Section 1.1 hereof); or (iii) has or would have the effect of reducing the
rate of return on capital of any such Lender to a level below that which the
Lender could have achieved but for such Regulatory Change (taking into
consideration such Lender's policies with respect to capital adequacy); or (iv)
imposes any other condition adversely affecting the Lender or its parent
corporation under this Agreement or the Notes (or any of such extensions of
credit or liabilities). The Lender will notify the Authorized Representative
of any event occurring after the Closing Date which would entitle it to
compensation pursuant to this Section 3.1(a) as promptly as practicable after
it obtains knowledge thereof and determines to request such compensation.
(b) Without limiting the effect of the foregoing
provisions of this Section 3.1, in the event that, by reason of any Regulatory
Change, the Lender or its parent corporation either (i) incurs Additional Costs
based on or measured by the excess above a specified level of the amount of a
category of deposits or other liabilities of the Lender or its parent
corporation which
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includes deposits by reference to which the interest rate on Eurodollar Rate
Loans is determined as provided in this Agreement or a category of extensions
of credit or other assets of the Lender or its parent corporation which
includes Eurodollar Rate Loans or (ii) becomes subject to restrictions on the
amount of such a category of liabilities or assets which it may hold, then, if
the Lender so elects, the obligation hereunder of the Lender to make, and to
convert Base Rate Loans into, Eurodollar Rate Loans that are the subject of
such restrictions shall be suspended until the date such Regulatory Change
ceases to be in effect and the Borrower shall, on the last day(s) of the then
current Interest Period(s) for outstanding Eurodollar Rate Loans convert such
Eurodollar Rate Loans into Base Rate Loans. In the event that the obligation
of the Lender to make, or to convert Base Rate Loans into, Eurodollar Rate
Loans is suspended, then any request by the Borrower during the pendency of
such suspension for a Eurodollar Rate Loan shall be deemed a request for a Base
Rate Loan from the Lender.
(c) Determinations by the Lender or its parent
corporation for purposes of this Section 3.1 of the effect of any Regulatory
Change on its costs of making or maintaining, or being committed to make Loans,
or the effect of any Regulatory Change on amounts receivable by the Lender in
respect of Loans, and of the additional amounts required to compensate the
Lender in respect of any Additional Costs, shall be made taking into account
such Lender's policies, or the policies of its parent corporation, as to the
allocation of capital, costs and other items and shall be conclusive absent
manifest error. The Lender requesting such compensation shall furnish to the
Authorized Representative within sixty (60) days of the incurrence of any
Additional Costs for which compensation is sought an explanation of the
Regulatory Change and calculations, in reasonable detail, setting forth the
Lender's or its parent corporation's determination of any such Additional
Costs.
3.2. Suspension of Loans. Anything herein to the contrary
notwithstanding, if, on or prior to the determination of any interest rate for
any Eurodollar Rate Loan for any Interest Period, the Lender determines (which
determination made on a reasonable basis shall be conclusive absent manifest
error) that:
(a) quotations of interest rates for the relevant
deposits referred to in the definition of "Eurodollar Rate" in Section
1.1 hereof are not being provided in the relevant amounts or for the
relevant maturities for purposes of determining the rate of interest
for such Eurodollar Rate Loan as provided in this Agreement; or
(b) the relevant rates of interest referred to in the
definition of "Interbank Offered Rate" in Section 1.1 hereof upon the
basis of which the Eurodollar Rate for such Interest Period is to be
determined do not adequately reflect the cost to the Lender of making
or maintaining such Eurodollar Rate Loan for such Interest Period;
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then the Lender shall give the Authorized Representative prompt notice thereof,
and so long as such condition remains in effect, the Lender shall be under no
obligation to make Eurodollar Rate Loans that are subject to such condition, or
to convert Loans into Eurodollar Rate Loans, and the Borrower shall on the last
day(s) of the then current Interest Period(s) for outstanding Eurodollar Rate
Loans, as applicable, convert such Eurodollar Rate Loans into another
Eurodollar Rate Loan if such Eurodollar Rate Loan is not subject to the same or
similar condition, or Base Rate Loans, if available hereunder. The Lender
shall give the Authorized Representative notice describing in reasonable detail
any event or condition described in this Section 3.2 promptly following the
determination by the Lender that the availability of Eurodollar Rate Loans is,
or is to be, suspended as a result thereof.
3.3. Illegality. Notwithstanding any other provision of this
Agreement, in the event that it becomes unlawful for the Lender to honor its
obligation to make or maintain Eurodollar Rate Loans hereunder, then the Lender
shall promptly notify the Borrower thereof and the Lender's obligation to make
or continue Eurodollar Rate Loans, or convert Base Rate Loans into Eurodollar
Rate Loans, shall be suspended until such time as the Lender may again make and
maintain Eurodollar Rate Loans, and the Lender's outstanding Eurodollar Rate
Loans shall be converted into Base Rate Loans in accordance with Section 2.7
hereof.
3.4. Compensation. The Borrower shall promptly pay to the Lender,
upon the Lender's request, such amount or amounts as shall be sufficient (in
the reasonable determination of the Lender) to compensate it for any loss, cost
or expense incurred by it as a result of:
(a) any payment, prepayment or conversion of a Eurodollar
Rate Loan on a date other than the last day of the Interest Period for
such Eurodollar Rate Loan, including without limitation any conversion
required pursuant to Section 3.3 hereof; or
(b) any failure by the Borrower to borrow or convert a
Eurodollar Rate Loan on the date for such borrowing or conversion
specified in the relevant Borrowing Notice or Interest Rate Selection
Notice under Article II hereof;
such compensation to include, without limitation, an amount equal to the
excess, if any, of (i) the amount of interest which would have accrued on the
principal amount so paid, prepaid or converted or not borrowed for the period
from the date of such payment, prepayment or conversion or failure to borrow or
convert to the last day of the then current Interest Period for such Loan (or,
in the case of a failure to borrow or convert, the Interest Period for such
Loan which would have commenced on the date scheduled for such borrowing or
conversion) at the applicable rate of interest for such Eurodollar Rate Loan
provided for herein over (ii) the Interbank Offered Rate (as reasonably
determined by the Lender) for Dollar deposits of amounts comparable to such
principal amount and maturities comparable to such period. A determination of
the
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Lender as to the amounts payable pursuant to this Section 3.4 shall be
conclusive, provided that such determinations are made on a reasonable basis.
The Lender requesting compensation under this Section 3.4 shall promptly
furnish to the Authorized Representative calculations in reasonable detail
setting forth the Lender's determination of the amount of such compensation.
3.5. Alternate Loan and Lender. In the event the Lender suspends
the making of any Eurodollar Rate Loan pursuant to this Article III (herein a
"Restricted Lender"), the Restricted Lender's Commitment Percentage of any
Eurodollar Rate Loan shall bear interest at the Base Rate until the Restricted
Lender once again makes available the applicable Eurodollar Rate Loan.
3.6. Taxes. (a) All payments by the Borrower of principal of, and
interest on, the Loans and all other amounts payable hereunder shall be made
free and clear of and without deduction for any present or future excise, stamp
or other taxes, fees, duties, levies, imposts, charges, deductions,
withholdings or other charges of any nature whatsoever imposed by any taxing
authority, but excluding (i) franchise taxes, (ii) any taxes (other than U.S.
withholding taxes) that would not be imposed but for a connection between a
Lender and the jurisdiction imposing such taxes (other than a connection
arising solely by virtue of the activities of the Lender pursuant to or in
respect of this Agreement or any other Loan Document), (iii) any taxes imposed
on or measured by the Lender's assets, net income, receipts or branch profits
and (iv) any taxes arising after the Closing Date solely as a result of or
attributable to Lender changing its designated lending office after the date
such Lender becomes a party hereto (such non-excluded items being collectively
called "Taxes"). In the event that any withholding or deduction from any
payment to be made by the Borrower hereunder is required in respect of any
Taxes pursuant to any applicable law, rule or regulation, then the Borrower
will
(i) pay directly to the relevant authority the full
amount required to be so withheld or deducted;
(ii) promptly forward to the Lender an official receipt or
other documentation satisfactory to the Lender evidencing such payment
to such authority; and
(iii) pay to the Lender such additional amount or amounts
as is necessary to ensure that the net amount actually received by the
Lender will equal the full amount the Lender would have received had
no such withholding or deduction been required.
If any such Taxes shall be or become applicable after the date of this
Agreement to such payments by the Borrower to the Lender, the Lender shall use
reasonable efforts to make, fund, or maintain the Loan or Loans, as the case
may be, through another lending office located in another jurisdiction so as to
reduce, to the fullest extent possible, Borrower's liability hereunder, if the
making, funding or maintenance of such Loan or Loans through such other office
does not, in the reasonable judgment of the Lender,
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materially affect the Lender or such Loan. If Borrower is required to make any
additional payment to the Lender pursuant to this Section 3.6, and the Lender
receives, or is entitled to receive, a credit against, remission for, or
repayment of, any tax paid or payable by it in respect of, or calculated with
reference to, the Taxes giving rise to such payment, the Lender shall, within a
reasonable time after it receives such credit, relief, remission or repayment,
reimburse Borrower the amount of any such credit, relief, remission or
repayment.
(b) Prior to the date that a Lender or a participant
organized under the laws of a jurisdiction outside the United States becomes a
party hereto, such Person shall deliver to the Borrower such certificates,
documents or other evidence, as required by the Code or Treasury Regulations
issued pursuant thereto, properly completed, currently effective and duly
executed by such Lender or participant establishing that such payment is (i)
not subject to United States Federal backup withholding tax and (ii) not
subject to United States Federal withholding tax under the Code because such
payment is either effectively connected with the conduct by such Lender or
participant of a trade or business in the United States or totally exempt from
United States Federal withholding tax by reason of the application of the
provisions of a treaty to which the United States is a party or such Lender is
otherwise exempt. The Lender that fails to provide such certificates or forms
that it is required to provide under this Section 3.6(b) shall not be entitled
to the benefits of this Section 3.6 and, to the extent required by law,
Borrower shall be entitled to deduct from, and pay to the applicable taxing
authority, taxes from the payments made by Borrower to such Lender. The Lender
shall, from time to time, complete, execute and deliver such updates or
extensions or renewals or replacements of those forms, certificates and
documents as may be necessary to continue or maintain any such exemption.
(c) If the Borrower fails to pay any Taxes when due to the
appropriate taxing authority or fails to remit to the Lender the required
receipts or other required documentary evidence, the Borrower shall indemnify
the Lender for any incremental Taxes, interest or penalties that may become
payable by the Lender as a result of any such failure.
ARTICLE IV
Conditions to Making Loans
4.1. Conditions of Initial Advance. The obligation of the Lender
to make the initial Advance is subject to the conditions precedent that:
(a) the Lender shall have received on the Closing Date,
in form and substance satisfactory to the Lender, the following:
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(i) executed originals of each of this Agreement,
the Notes and the other Loan Documents, together with all
schedules and exhibits thereto;
(ii) favorable written opinions of internal
counsel of the Borrower dated the Closing Date, addressed to
the Lender and satisfactory to Smith Helms Mulliss & Moore,
L.L.P., special counsel to the Lender, substantially in the
form of Exhibit H attached hereto;
(iii) resolutions of the boards of directors or
other appropriate governing body (or of the appropriate
committee thereof) of the Borrower certified by its secretary
or assistant secretary as of the Closing Date, appointing the
initial Authorized Representative and approving and adopting
the Loan Documents to be executed by such Person, and
authorizing the execution and delivery thereof;
(iv) specimen signatures of officers of the
Borrower executing the Loan Documents on behalf of the
Borrower, certified by the secretary or assistant secretary of
the Borrower;
(v) the charter documents of the Borrower
certified as of a recent date by the Secretary of State of its
state of incorporation;
(vi) the bylaws of the Borrower certified as of
the Closing Date as true and correct by its secretary or
assistant secretary;
(vii) certificates issued as of a recent date by
the Secretary of State of Georgia as to the due existence and
good standing of the Borrower;
(viii) appropriate certificates of qualification to
do business, good standing and, where appropriate, authority
to conduct business under assumed name, issued in respect of
the Borrower as of a recent date by the Secretary of State or
comparable official of each jurisdiction in which the failure
to be qualified to do business or authorized so to conduct
business could have a Material Adverse Effect;
(ix) notice of appointment of the initial
Authorized Representative;
(x) certificate of an Authorized Representative
dated the Closing Date demonstrating compliance with the
financial covenants contained in Sections 7.1 through 7.3 as
of the Closing Date, substantially in the form of Exhibit I
attached hereto;
(xi) an initial Borrowing Notice;
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(xii) copies of all documents executed in
connection with the Wachovia Facility;
(xiii) all fees payable by the Borrower on the
Closing Date to the Lender; and
(xiv) such other documents, instruments,
certificates and opinions as the Lender may reasonably request
on or prior to the Closing Date in connection with the
consummation of the transactions contemplated hereby.
(b) In the good faith judgment of the Lender there shall
not have occurred or become known to the Lender any event, condition,
situation or status since the date of the year-end financial
statements for Fiscal Year 1995 delivered to the Lender that has had
or could reasonably be expected to result in a Material Adverse
Effect;
4.2. Conditions of All Revolving Loans. The obligations of the
Lender to make any Revolving Loans hereunder subsequent to the Closing Date are
subject to the satisfaction of the following conditions:
(a) the Lender shall have received a Borrowing Notice in
the form of Exhibit D hereto;
(b) the representations and warranties of the Borrower
and the Guarantor set forth in Article V hereof and in each of the
other Loan Documents shall be true and correct in all material
respects on and as of the date of such Advance, with the same effect
as though such representations and warranties had been made on and as
of such date, except to the extent that such representations and
warranties expressly relate to an earlier date and except that the
financial statements referred to in Section 5.6(a)(i) hereof shall be
deemed to be those financial statements most recently delivered to the
Lender pursuant to Section 6.1 hereof;
(c) at the time of (and after giving effect to) each
Advance, no Default or Event of Default specified in Article VIII
hereof, shall have occurred and be continuing; and
(d) immediately after giving effect to a Revolving Loan,
the aggregate principal balance of all outstanding Revolving Loans for
the Lender and in the aggregate shall not exceed, respectively, (i)
such Lender's Revolving Credit Commitment or (ii) the Total Revolving
Credit Commitment.
ARTICLE V
Representations and Warranties
The Borrower and each Guarantor represents and warrants with respect
to itself and its Material Subsidiaries that:
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5.1. Organization and Authority.
(a) The Borrower and each Material Subsidiary is a
corporation duly organized and validly existing under the laws of the
jurisdiction of its incorporation;
(b) The Borrower and each Material Subsidiary (x) has the
requisite power and authority to own its properties and assets and to
carry on its business as now being conducted and as contemplated in
the Loan Documents, and (y) is qualified to do business in every
jurisdiction in which failure so to qualify would have a Material
Adverse Effect;
(c) The Borrower has the power and authority to execute,
deliver and perform this Agreement and the Notes, and to borrow
hereunder, and to execute, deliver and perform each of the other Loan
Documents to which it is a party; and
(d) Each Guarantor will have the power and authority to
execute, deliver and perform the Subsidiary Guaranty and to execute,
deliver and perform the other Loan Documents to which it becomes a
party;
(e) When executed and delivered, each of the Loan
Documents to which the Borrower or any Guarantor is a party will be
the legal, valid and binding obligation or agreement, as the case may
be, of the Borrower or such Guarantor, enforceable against the
Borrower or such Guarantor in accordance with its terms, subject to
the effect of any applicable bankruptcy, moratorium, insolvency,
reorganization or other similar law affecting the enforceability of
creditors' rights generally and to the effect of general principles of
equity which may limit the availability of equitable remedies (whether
in a proceeding at law or in equity);
5.2. Loan Documents. The execution, delivery and performance by
the Borrower and each Guarantor of each of the Loan Documents to which it is a
party:
(a) have been duly authorized by all requisite corporate
action (including any required shareholder approval) of the Borrower
and each Guarantor required for the lawful execution, delivery and
performance thereof;
(b) do not violate any provisions of (i) applicable law, rule
or regulation, (ii) any order of any court or other agency of
government binding on the Borrower or any Subsidiary, or properties,
or (iii) the charter documents or bylaws of Borrower or any Material
Subsidiary;
(c) does not and will not be in conflict with, result in a
breach of or constitute an event of default, or an event which, with
notice or lapse of time, or both, would constitute an event of
default, under any material indenture, agreement or other instrument
to which Borrower or any Material
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Subsidiary is a party, or by which the properties or assets of
Borrower or any Material Subsidiary are bound;
(d) does not and will not result in the creation or
imposition of any Lien, charge or encumbrance of any nature whatsoever
upon any of the properties or assets of Borrower or any Material
Subsidiary;
5.3. Solvency. The Borrower is Solvent after giving effect to the
transactions contemplated by this Agreement and the other Loan Documents;
5.4. Subsidiaries and Stockholders. The Borrower has no
Subsidiaries other than those listed on Schedule 5.4 hereto and additional
Subsidiaries created or acquired after the Closing Date in compliance with
Section 6.23 hereof; Schedule 5.4 states as of the date hereof the
organizational form of each Subsidiary, the authorized and issued
capitalization of each Subsidiary listed thereon, the number of shares or other
equity interests of each class of capital stock or interest issued and
outstanding of each such Subsidiary and the number and percentage of
outstanding shares or other equity interest (including options, warrants and
other rights to acquire any interest) of each such class of capital stock or
equity interest owned by Borrower or by any such Subsidiary; the outstanding
shares or other equity interests of each such Subsidiary have been duly
authorized and validly issued and are fully paid and nonassessable; and
Borrower and each such Subsidiary owns beneficially and of record all the
shares and other interests it is listed as owning in Schedule 5.4, free and
clear of any Lien;
5.5. Ownership Interests. Borrower owns no interest in any Person
other than the Persons listed in Schedule 5.4 hereto;
5.6. Financial Condition.
(a) The Borrower has heretofore furnished to the Lender
consolidated balance sheets of the Borrower and its Subsidiaries, and
related notes thereto, and the related statements of operations,
stockholders equity and cash flows, and the related notes thereto,
dated April 2, 1995 with respect to Fiscal Year 1995;
(b) since April 2, 1995 there has been no material
adverse change in the condition, financial or otherwise, of the
Borrower or its Subsidiaries or in the businesses, properties and
operations of the Borrower or the Subsidiaries, nor have such
businesses or properties, taken as a whole, been materially adversely
affected as a result of any fire, explosion, earthquake, accident,
strike, lockout, combination of workers, flood, embargo or act of God;
(c) except as set forth on Schedule 5.6 hereto, neither
the Borrower nor any Subsidiary has incurred, other than in the
ordinary course of business, any material indebtedness, obligations,
commitments or other liability contingent or otherwise which remain
outstanding or unsatisfied;
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5.7. Title to Properties. The Borrower and each Material
Subsidiary has good and marketable title to all its real and personal
properties, subject to no transfer restrictions or Liens of any kind, except
for Permitted Liens;
5.8. Taxes. The Borrower and each Material Subsidiary has filed or
caused to be filed all federal, state and local tax returns which are required
to be filed by it and except for taxes and assessments being contested in good
faith by appropriate proceedings diligently conducted and against which
reserves satisfactory to the Borrower's independent certified public
accountants have been established, have paid or caused to be paid all taxes as
shown on said returns or on any assessment received by it, to the extent that
such taxes have become due;
5.9. Other Agreements. Neither the Borrower nor any Subsidiary is
(a) a party to any judgment, order, decree or any
agreement or instrument or subject to restrictions which could
reasonably be likely to have a Material Adverse Effect; or
(b) in default in the performance, observance or fulfillment
of any of the obligations, covenants or conditions contained in any
agreement or instrument to which the Borrower or any Subsidiary is a
party, which default has, or if not remedied within any applicable
grace period could reasonably be likely to have, a Material Adverse
Effect;
5.10. Litigation. There is no action, suit or proceeding at law or
in equity or by or before any governmental instrumentality or agency or
arbitral body pending, or, to the knowledge of the Borrower, threatened by or
against the Borrower or any Subsidiary or affecting the Borrower or any
Subsidiary or any properties or rights of the Borrower or any Subsidiary, which
could reasonably be likely to have a Material Adverse Effect;
5.11. Margin Stock. The Borrower does not own any "margin stock" as
such term is defined in Regulation U, as amended (12 C.F.R. Part 221), of the
Board. The proceeds of the borrowings made pursuant to Article II hereof will
be used by the Borrower only for the purposes set forth in Section 2.9 and
hereof. None of such proceeds will be used, directly or indirectly, for the
purpose of purchasing or carrying any margin stock or for the purpose of
reducing or retiring any Indebtedness which was originally incurred to purchase
or carry margin stock or for any other purpose which might constitute any of
the Loans under this Agreement a "purpose credit" within the meaning of said
Regulation U or Regulation X (12 C.F.R. Part 224) of the Board. Neither the
Borrower nor any agent acting in its behalf has taken or will take any action
which might cause this Agreement or any of the documents or instruments
delivered pursuant hereto to violate any regulation of the Board or to violate
the Securities Exchange Act of 1934, as amended, or the Securities Act of 1933,
as amended, or any state securities laws, in each case as in effect on the date
hereof;
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5.12. Investment Company; Public Utility Holding Company. Neither
the Borrower nor any Subsidiary is (a) an "investment company," or an
"affiliated person" of, or "promoter" or "principal underwriter" for, an
"investment company," as such terms are defined in the Investment Company Act
of 1940, as amended (15 U.S.C. Section 80a-1, et seq.) or (b) a "Holding
Company" or a "Subsidiary Company" of a "Holding Company" or an "Affiliate" of
a "Holding Company" or a "Subsidiary Company" of a "Holding Company," as such
terms are defined under the Public Utility Holding Company Act of 1935, as
amended. The application of the proceeds of the Loans and repayment thereof by
the Borrower and the performance by the Borrower and the Guarantors of the
transactions contemplated by this Agreement will not violate any provision of
said Acts, or any rule, regulation or order issued by the Securities and
Exchange Commission thereunder, in each case as in effect on the date hereof;
5.13. Patents, Etc. The Borrower and each Material Subsidiary owns
or has the right to use, under valid license agreements or otherwise, all
material patents, licenses, franchises, trademarks, trademark rights, trade
names, trade name rights, trade secrets and copyrights necessary to the conduct
of its businesses as now conducted, without known conflict with any patent,
license, franchise, trademark, trade secrets and confidential commercial or
proprietary information, trade name, copyright, rights to trade secrets or
other proprietary rights of any other Person;
5.14. No Untrue Statement. Neither (a) this Agreement nor any other
Loan Document or certificate or document executed and delivered by or on behalf
of the Borrower or any Guarantor in accordance with or pursuant to any Loan
Document nor (b) any statement, representation, or warranty provided to the
Lender in connection with the negotiation or preparation of the Loan Documents
contains any misrepresentation or untrue statement of material fact or omits to
state a material fact necessary, in light of the circumstance under which it
was made, in order to make any such representation or statement contained
therein not misleading;
5.15. No Consents, Etc. Neither the respective businesses or
properties of the Borrower or any Subsidiary, nor any relationship between the
Borrower or any Subsidiary and any other Person, nor any circumstance in
connection with the execution, delivery and performance of the Loan Documents
and the transactions contemplated hereby, is such as to require a consent,
approval or authorization of, or filing, registration or qualification with,
any governmental or other authority or any other Person on the part of the
Borrower or any Subsidiary as a condition to the execution, delivery and
performance of, or consummation of the transactions contemplated by, this
Agreement or the other Loan Documents, which, if not obtained or effected,
would reasonably likely to have a Material Adverse Effect, or if so, such
consent, approval, authorization, filing, registration or qualification has
been obtained or effected, as the case may be;
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5.16. Employee Benefit Plans.
(a) Neither the Borrower nor any ERISA Affiliate maintains
or contributes to, or has any obligation under, any Employee Benefit
Plans other than those identified on Schedule 5.16 hereto;
(b) The Borrower and each ERISA Affiliate is in compliance
with all applicable provisions of ERISA and the regulations and
published interpretations thereunder and in compliance with all
Foreign Benefit Laws with respect to all Employee Benefit Plans except
where failure to comply would not result in a Material Adverse Effect
and except for any required amendments for which the remedial
amendment period as defined in Section 401(b) of the Code has not yet
expired. Each Employee Benefit Plan that is intended to be qualified
under Section 401(a) of the Code has been determined by the Internal
Revenue Service to be so qualified, and each trust related to such
plan has been determined to be exempt under Section 501(a) of the
Code. No material liability has been incurred by the Borrower or any
ERISA Affiliate which remains unsatisfied for any taxes or penalties
with respect to any Employee Benefit Plan or any Multiemployer Plan;
(c) Other than as described on Schedule 5.16 hereto, no
Pension Plan has been terminated within the six year period prior to
the execution of this Agreement, nor has any accumulated funding
deficiency (as defined in Section 412 of the Code) been incurred
(without regard to any waiver granted under Section 412 of the Code),
nor has any funding waiver from the IRS been received or requested
with respect to any Pension Plan, nor has the Borrower or any ERISA
Affiliate failed to make any contributions or to pay any amounts due
and owing as required by Section 412 of the Code, Section 202 of ERISA
or the terms of any Pension Plan prior to the due dates of such
contributions under Section 412 of the Code or Section 202 of ERISA,
nor has there been any event requiring any disclosure under Section
4041(c)(3)(C), 4063(a) or 4068(f) of ERISA with respect to any Pension
Plan;
(d) Neither the Borrower nor any ERISA Affiliate has:
(i) engaged in a nonexempt prohibited transaction described in Section
406 of ERISA or Section 4975 of the Code, (ii) incurred any liability
to the PBGC which remains outstanding other than the payment of
premiums and there are no premium payments which are due and unpaid,
(iii) failed to make a required contribution or payment to a
Multiemployer Plan or (iv) failed to make a required installment or
other required payment under Section 412 of the Code;
(e) No Termination Event has occurred or is reasonably
expected to occur with respect to any Pension Plan or Multiemployer
Plan;
(f) No material proceeding, claim, lawsuit and/or
investigation exists or, to the best knowledge of the Borrower
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after due inquiry, is threatened concerning or involving any Employee
Benefit Plan;
5.17. No Default. No Default or Event of Default exists hereunder;
5.18. Hazardous Materials. To the best of the Borrower's knowledge,
the Borrower and each Subsidiary is in compliance with all applicable
Environmental Laws in all respects except where the failure to comply does not
have a Material Adverse Effect and the Borrower has not been notified of any
action, suit, proceeding or investigation which calls into question compliance
by the Borrower or any Material Subsidiary with any Environmental Laws or which
seeks to suspend, revoke or terminate any license, permit or approval necessary
for the generation, handling, storage, treatment or disposal of any Hazardous
Material;
5.19. Employment Matters. (a) None of the employees of the
Borrower or any Subsidiary is subject to any collective bargaining agreement
and there are no strikes, work stoppages, election or decertification petitions
or proceedings, unfair labor charges, equal opportunity proceedings, or other
material labor/employee related controversies or proceedings pending or, to the
best knowledge of the Borrower, threatened against the Borrower or any
Subsidiary or between the Borrower or any Subsidiary and any of its employees,
other than employee grievances arising in the ordinary course of business which
would not in the aggregate have a Material Adverse Effect;
(b) The Borrower and each Material Subsidiary is in compliance in all
respects with all applicable laws, rules and regulations pertaining to labor or
employment matters, including without limitation those pertaining to wages,
hours, occupational safety and taxation and there is neither pending or
threatened any material litigation, administrative proceeding or investigation
in respect of such matters.
ARTICLE VI
Affirmative Covenants
Until the Obligations have been paid and satisfied in full and this
Agreement has been terminated in accordance with the terms hereof, unless the
Lender shall otherwise consent in writing, the Borrower will and, where
applicable, will cause each Subsidiary to:
6.1. Financial Reports, Etc. (a) Annual Reporting. As soon
as practical and in any event within 120 days after the end of each Fiscal Year
of the Borrower, deliver or cause to be delivered to the Lender (i)
consolidated balance sheets of the Borrower and its Subsidiaries, and the notes
thereto, the related statements of operations, stockholders' equity and cash
flows, and the respective notes thereto, for such Fiscal Year, setting forth in
the case of the statements comparative financial statements for the preceding
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Fiscal Year, all prepared in accordance with GAAP applied on a Consistent Basis
and containing, with respect to the consolidated financial reports, opinions of
Deloitte & Touche, L.L.P., or other such independent certified public
accountants of nationally recognized standing, which are unqualified and
without exception (except as may be acceptable to the Lender) and (ii) a
certificate of an Authorized Representative demonstrating compliance with
Sections 7.1, 7.2 and 7.3 hereof, which certificate shall be in the form
attached hereto as Exhibit I hereof;
(b) Quarterly Reporting. As soon as practical and in any
event within 45 days after the end of each quarterly period (except the last
reporting period of the Fiscal Year), deliver to the Lender (i) consolidated
balance sheets of the Borrower and its Subsidiaries as of the end of such
reporting period, the related statements of operations, stockholders' equity
and cash flows for such reporting period and for the period from the beginning
of the Fiscal Year through the end of such reporting period, accompanied by a
certificate of an Authorized Representative to the effect that such financial
statements present fairly the financial position of the Borrower and its
Subsidiaries as of the end of such reporting period and the results of their
operations and the changes in their financial position for such reporting
period, in conformity with GAAP applicable to interim financial information and
the rules and regulations of the Securities and Exchange Commission with
respect to interim financials, and (ii) a certificate of an Authorized
Representative containing computations for such quarter comparable to that
required pursuant to Section 6.1(a)(ii) hereof;
(c) Accountants' Letter. Together with each delivery of
the financial statements required by Section 6.1(a)(i) hereof, deliver to the
Lender a letter from the Borrower's accountants specified in Section 6.1(a)(i)
hereof stating that in performing the audit necessary to render an opinion on
the financial statements delivered under Section 6.1(a)(i) hereof, they
obtained no knowledge of any Default or Event of Default by the Borrower or any
Subsidiary in the fulfillment of the terms and provisions of this Agreement or
the other Loan Documents to which it is a party insofar as they relate to
financial matters (which at the date of such statement remains uncured); and if
the accountants have obtained knowledge of such Default or Event of Default, a
statement specifying the nature and period of existence thereof;
(d) Special Reports. Promptly upon their becoming
available to the Borrower, the Borrower shall deliver to the Lender a copy of
(i) all regular or special reports or effective registration statements which
Borrower or any Subsidiary shall file with the Securities and Exchange
Commission (or any successor thereto) or any securities exchange, and (ii) any
proxy statement distributed by the Borrower or any Subsidiary to its
shareholders, bondholders or the financial community in general;
(e) Acquisition Information. At least 15 days prior to
the closing of any Acquisition with a Cost of Acquisition of $10,000,000 or
more, the Borrower shall deliver to the Lender (i) a copy of the term sheet,
letter of intent, financial projections
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showing the impact of the Acquisition, on the financial results and condition
of the Borrower and its Subsidiaries and general information on the scope of
and the findings relating to the Borrower's "due dilligence" conducted in
connection with such Acquisition, (ii) pro forma historical financial
statements as of the end of the most recently completed Fiscal Year giving
effect to such Acquisition, together with a certificate of an Authorized
Representative demonstrating compliance with Article VII hereof after giving
effect to such Acquisition, and (iii) to the extent other relevant information
regarding any such Acquisition is prepared and distributed to its Board of
Directors, a copy of such other information shall be delivered by the Borrower
to the Lender at the time such information is made available to the Borrower's
Board of Directors;
(f) Other Information. Promptly, from time to time,
deliver or cause to be delivered to the Lender such other information regarding
Borrower's or any Subsidiary's operations, business affairs and financial
condition as the Lender may reasonably request. The Lender is hereby
authorized to deliver a copy of any such financial information delivered
hereunder to the Lender (or any affiliate of the Lender), to any regulatory
authority having jurisdiction over the Lender pursuant to any written request
therefor, or to any other Person who shall acquire or consider the assignment
of or participation in any Loan permitted by this Agreement.
6.2. Maintain Properties. Maintain all properties necessary to its
operations in good working order and condition and make all needed repairs,
replacements and renewals as are reasonably necessary to conduct its business
in accordance with customary business practices.
6.3. Existence, Qualification, Etc. Do or cause to be done all
things necessary to preserve and keep in full force and effect its existence
and all material rights and franchises, trade names, trademarks and permits and
maintain its license or qualification to do business as a foreign corporation
and good standing in each jurisdiction in which its ownership or lease of
property or the nature of its business makes such license or qualification
necessary except where the failure to so qualify would not have a Material
Adverse Effect.
6.4. Regulations and Taxes. Comply in all material respects with
or contest in good faith all statutes and governmental regulations and pay all
taxes, assessments, governmental charges, claims for labor, supplies, rent and
any other obligation which, if unpaid, would become a Lien against any of its
properties except liabilities being contested in good faith by appropriate
proceedings diligently conducted and against which adequate reserves have been
established.
6.5. Insurance. (a) Keep all of its insurable properties
adequately insured at all times with responsible insurance carriers against
loss or damage by fire and other hazards to the extent and in the manner as are
customarily insured against by similar
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businesses owning such properties similarly situated, (b) maintain general
public liability insurance at all times with responsible insurance carriers
against liability on account of damage to persons and property having such
limits, deductibles, exclusions and co-insurance and other provisions providing
no less coverages than are maintained by similar businesses that are similarly
situated, such insurance policies to be in form reasonably satisfactory to the
Lender, and (c) maintain insurance under all applicable workers' compensation
laws (or in the alternative, maintain required reserves if self-insured for
workers' compensation purposes) and against loss by reason by business
interruption. Each of the policies of insurance described in this Section 6.5
shall provide that the insurer shall give the Lender not less than thirty (30)
days' prior written notice before any such policy shall be terminated, lapse or
be altered in any manner.
6.6. True Books. Keep true books of record and account in which
full, true and correct entries will be made of all of its dealings and
transactions, and set up on its books such reserves as may be required by GAAP
with respect to doubtful accounts and all taxes, assessments, charges, levies
and claims and with respect to its business in general, and include such
reserves in interim as well as year-end financial statements.
6.7. Payment of Other Indebtedness. Pay when due (or within
applicable grace periods) all Indebtedness (for which the failure to pay would
constitute an Event of Default under Section 8.1(e)) due third Persons, except
when the amount thereof is being contested in good faith by appropriate
proceedings diligently conducted and with reserves in form and amount
reasonably acceptable to the Lender therefor being set aside on the books of
the Borrower or the applicable Subsidiary.
6.8. Right of Inspection. Permit any Person designated by the
Lender to visit and inspect any of the properties, corporate books and
financial reports of the Borrower and to discuss its affairs, finances and
accounts with its principal officers and independent certified public
accountants, all at reasonable times, at reasonable intervals and with
reasonable prior notice, provided, that prior to the occurrence and continuance
of a Default or Event of Default, the expenses incurred in connection with such
visits and inspections shall be paid by the Borrower for only one such visit or
inspection each calendar year, and after the occurrence and during continuance
of a Default or an Event of Default, such expenses shall be paid by the
Borrower for all such visits and inspections.
6.9. Observe all Laws. Conform to and duly observe in all material
respects all laws, rules and regulations and all other valid requirements of
any regulatory authority with respect to the conduct of its business.
6.10. Governmental Licenses. Obtain and maintain all licenses,
permits, certifications and approvals of all applicable Governmental
Authorities as are required for the conduct of its business as currently
conducted and herein contemplated except
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where the failure to do so is not reasonably likely to result in a Material
Adverse Effect.
6.11. Covenants Extending to Other Persons. Cause each of its
Subsidiaries to do with respect to itself, its business and its assets, each of
the things required of the Borrower in this Article VI.
6.12. Officer's Knowledge of Default. Within five (5) days of any
officer of the Borrower obtaining knowledge of any Default or Event of Default
hereunder or under any other obligation of the Borrower or any Subsidiary to
the Lender, cause such officer or an Authorized Representative to notify the
Lender within such five (5) day period of the nature thereof, the period of
existence thereof, and what action the Borrower proposes to take with respect
thereto.
6.13. Suits or Other Proceedings. Upon any officer of the Borrower
or any Subsidiary obtaining knowledge of any litigation or other proceedings
being instituted against the Borrower or any Subsidiary, or any attachment,
levy, execution or other process being instituted against any assets of the
Borrower or any Subsidiary, making a claim or claims in an aggregate amount
greater than $1,000,000 or not otherwise covered by insurance, promptly deliver
to the Lender written notice thereof stating the nature and status of such
litigation, dispute, proceeding, levy, execution or other process.
6.14. Notice of Discharge of Hazardous Material or Environmental
Complaint. Promptly provide to the Lender true, accurate and complete copies
of any and all notices, complaints, orders, directives, claims, or citations
received by the Borrower or any Subsidiary relating to any (a) violation or
alleged violation by the Borrower or any Subsidiary of any applicable
Environmental Laws; (b) release or threatened release by the Borrower or any
Subsidiary, or at any facility or upon any property owned or operated by the
Borrower or any Subsidiary, of any Hazardous Material, except where occurring
legally; or (c) liability or alleged liability of the Borrower or any
Subsidiary for the costs of cleaning up, removing, remediating or responding to
a release of Hazardous Materials.
6.15. Environmental Compliance. If the Borrower or any Subsidiary
shall receive letter, notice, complaint, order, directive, claim or citation
alleging that the Borrower or and Subsidiary has violated any Environmental Law
or is liable for the costs of cleaning up, removing, remediating or responding
to a release of Hazardous Materials, the Borrower shall, within the time period
permitted by the applicable Environmental Law or the Governmental Authority
responsible for enforcing such Environmental Law, remove or remedy, or cause
the applicable Subsidiary to remove or remedy, such violation or release or
satisfy such liability, except where the applicability of the Environmental
Law, the fact of such violation or liability or what is required to remove or
remedy such violation is being contested by the Borrower or the applicable
Subsidiary by appropriate proceedings diligently
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conducted and all reserves with respect thereto as may be required under
Generally Accepted Accounting Principles, if any, have been made.
6.16. Indemnification. The Borrower hereby agrees to defend,
indemnify and hold the Lender, its affiliates and its officers, directors,
employees and agents, harmless from and against any and all claims, losses,
penalties, liabilities, damages and expenses (including, without limitation,
assessment and cleanup costs and reasonable attorneys' fees and disbursements)
arising directly or indirectly from, out of or by reason of (a) the violation
of any Environmental Law by the Borrower or any Subsidiary or with respect to
any property owned, operated or leased by the Borrower or any Subsidiary or (b)
the handling, storage, treatment, emission or disposal of any Hazardous
Material by or on behalf of the Borrower or any Subsidiary on or with respect
to property owned or leased or operated by the Borrower or any Subsidiary. The
Borrower shall not be liable under this Section 6.16 for any such amounts
arising solely as a result of the gross negligence or willful misconduct of any
indemnified party. The provisions of this Section 6.16 shall survive repayment
of the Obligations, occurrence of the Revolving Credit Termination Date and
expiration or termination of this Agreement.
6.17. Further Assurances. At the Borrower's cost and expense, upon
request of the Lender, duly execute and deliver or cause to be duly executed
and delivered, to the Lender such further instruments, documents, certificates,
financing and continuation statements, and do and cause to be done such further
acts that may be reasonably necessary or advisable in the reasonable opinion of
the Lender to carry out more effectively the provisions and purposes of this
Agreement and the other Loan Documents.
6.18. Employee Benefit Plans. With reasonable promptness, and in
any event within thirty (30) days thereof, give notice of and/or deliver to
Lender copies of (a) the establishment of any new Employee Benefit Plan, (b)
the commencement of contributions to any plan to which the Borrower or any of
its ERISA Affiliates was not previously contributing, (c) any material increase
in the benefits of any existing Employee Benefit Plan, (d) each funding waiver
request filed with respect to any Employee Benefit Plan and all communications
received or sent by the Borrower or any ERISA Affiliate with respect to such
request and (e) the failure of the Borrower or any ERISA Affiliate to make a
required installment or payment under Section 202 of ERISA or Section 412 of
the Code by the due date.
6.19. Termination Events. Promptly and in any event within fifteen
(15) days of becoming aware of the occurrence of or forthcoming occurrence of
any (a) Termination Event or (b) "prohibited transaction," as such term is
defined in Section 406 of ERISA or Section 4975 of the Code, in connection with
any Pension Plan or any trust created thereunder, deliver to the Lender a
notice specifying the nature thereof, what action the Borrower has taken, is
taking or proposes to take with respect thereto and,
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when known, any action taken or threatened by the Internal Revenue Service, the
Department of Labor or the PBGC with respect thereto.
6.20. ERISA Notices. With reasonable promptness but in any event
within fifteen (15) days for purposes of clauses (a), (b) and (c), deliver to
the Lender copies of (a) any unfavorable determination letter from the Internal
Revenue Service regarding the qualification of an Employee Benefit Plan under
Section 401(a) of the Code, (b) all notices received by the Borrower or any
ERISA Affiliate of the PBGC's intent to terminate any Pension Plan or to have a
trustee appointed to administer any Pension Plan, (c) each Schedule B
(Actuarial Information) to the annual report (Form 5500 Series) filed by the
Borrower or any ERISA Affiliate with the Internal Revenue Service with respect
to each Pension Plan and (d) all notices received by the Borrower or any ERISA
Affiliate from a Multiemployer Plan sponsor concerning the imposition or amount
of withdrawal liability pursuant to Section 4202 of ERISA. The Borrower will
notify the Lender in writing within five (5) Business Days of any Borrower
obtaining knowledge or reason to know that the Borrower or any ERISA Affiliate
has filed or intends to file a notice of intent to terminate any Pension Plan
under a distress termination within the meaning of Section 4041(c) of ERISA.
6.21. Continued Operations. Continue at all times (i) to conduct
its business and engage principally in the same line or lines of business
substantially as heretofore conducted and (ii) preserve, protect and maintain
free from Liens, other than Permitted Liens, its material patents, copyrights,
licenses, trademarks, trademark rights, trade names, trade name rights, trade
secrets and know-how necessary or useful in the conduct of its operations.
6.22. Use of Proceeds. Use the proceeds of the Loans solely for
the purposes specified in Section 2.9 hereof.
6.23. New Subsidiaries. Simultaneously with the acquisition or
creation of any Material Subsidiary, cause to be delivered to the Lender each
of the following:
(i) a Subsidiary Guaranty substantially in the form attached
hereto as Exhibit G;
(ii) an opinion of counsel to the Subsidiary dated as of the
date of delivery of the Subsidiary Guaranty provided in the foregoing
clause (i) and addressed to the Lender in form and substance
reasonably acceptable to the Lender (which opinion may include
assumptions and qualifications of similar effect to those contained in
the opinions of counsel delivered pursuant to Section 4.1(a)(iii))
hereof), to the effect that:
(A) such Subsidiary is duly organized, validly
existing and in good standing in the jurisdiction of its
organization, has the requisite power and authority to own its
properties and conduct its business as then owned and then
proposed to be conducted and is duly qualified
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to transact business and is in good standing as a foreign
corporation or partnership in the jurisdictions set forth in
such opinion; and
(B) the execution, delivery and performance of
the Subsidiary Guaranty described in clause (i) of this
Section 6.23 to which such Subsidiary is a signatory have been
duly authorized by all requisite corporate or partnership
action (including any required shareholder or partner
approval), such agreement has been duly executed and
delivered, constitutes the valid and binding obligation of
such Subsidiary, enforceable against such Subsidiary in
accordance with its terms, subject to the effect of any
applicable bankruptcy, moratorium, insolvency, reorganization
or other similar law affecting the enforceability of
creditors' rights generally and to the effect of general
principles of equity which may limit the availability of
equitable remedies (whether in a proceeding at law or in
equity) and to the actual knowledge of such counsel does not
and will not violate any laws, rules or regulations applicable
to the Subsidiary or violate or constitute a breach of any
contract, agreement, indenture, lease, instrument or other
document, judgment, writ, determination, order or decree to
which the Subsidiary is a party or by which the Subsidiary or
any of its properties are bound and which is set forth on a
schedule to such opinion; and
(iv) current copies of the charter documents, including
partnership agreements and certificate of limited partnership, if
applicable, and bylaws of such Subsidiary, minutes of duly called and
conducted meetings (or duly effected consent actions) of the Board of
Directors, partners, or appropriate committees thereof (and, if
required by such charter documents, bylaws or by applicable laws, of
the shareholders or partners) of such Subsidiary authorizing the
actions and the execution and delivery of documents described in
clause (i) of this Section 6.23 and evidence satisfactory to the
Lender (confirmation of the receipt of which will be provided by the
Lender) that such Subsidiary is Solvent as of such date and after
giving effect to the Subsidiary Guaranty.
ARTICLE VII
Negative Covenants
Until the Obligations have been paid and satisfied in full and this
Agreement has been terminated in accordance with the terms hereof, unless the
Lender shall otherwise consent in writing, the Borrower will not nor permit any
Subsidiary to:
7.1. Consolidated Leverage Ratio. Permit at any time the
Consolidated Leverage Ratio to be greater than .60 to 1.00.
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7.2. Consolidated Fixed Charge Coverage Ratio. Permit at any time
the Consolidated Fixed Charge Ratio of the Borrower to be less than 2.00 to
1.00.
7.3. Consolidated Shareholders' Equity. Permit Consolidated
Shareholders' Equity to be less than (i) the difference of $80,000,000 less the
effect of Permitted Stock Repurchases made subsequent to April 2, 1995 through
the end of the Fiscal Year ended March 31, 1996 and (ii) thereafter at all
times, the sum of (A) the amount of Consolidated Shareholders' Equity required
to be maintained pursuant to this Section 7.3 as at the end of the immediately
preceding Fiscal Year, plus (B) 50% of Net Income (with no reduction for net
losses during any period) for the Fiscal Year of the Borrower ending on such
day, plus (C) 100% of the aggregate amount of all increases in the stated
capital and additional paid-in capital accounts of the Borrower resulting from
the issuance of equity securities, conversion of any debt instruments into
equity or other capital investments.
7.4. Consolidated Cash Flow Ratio. Permit at the end of each
fiscal quarter of the Borrower the ratio of Consolidated Funded Indebtedness to
Consolidated Cash Flow for the Four-Quarter Period then ended to be greater
6.00 to 1.00.
7.5. Liens. Incur, create or permit to exist any pledge, Lien,
charge or other encumbrance of any nature whatsoever with respect to any
property or assets now owned or hereafter acquired by the Borrower or any
Subsidiary, other than the following (collectively, "Permitted Liens"):
(a) Liens existing as of the date hereof and as set forth
in Schedule 7.5 attached hereto;
(b) Liens imposed by law for taxes, assessments or
charges of any Governmental Authority for claims not yet due or which
are being contested in good faith by appropriate proceedings
diligently conducted and with respect to which adequate reserves or
other appropriate provisions are being maintained in accordance with
GAAP;
(c) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and other Liens imposed by law or
created in the ordinary course of business and in existence less than
90 days from the date of creation thereof for amounts not yet due or
which are being contested in good faith by appropriate proceedings
diligently conducted and with respect to which adequate reserves or
other appropriate provisions are being maintained in accordance with
GAAP;
(d) Liens incurred or deposits made in the ordinary
course of business (including, without limitation, surety bonds and
appeal bonds) in connection with workers' compensation, unemployment
insurance and other types of social security benefits or to secure the
performance of tenders, bids, leases, contracts (other than for the
repayment of Indebtedness), statutory obligations and other similar
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obligations or arising as a result of progress payments under
government contracts;
(e) purchase money Liens to secure Indebtedness incurred
to purchase fixed assets, provided the Indebtedness represents not
less than 75% of the purchase price of such assets as of the date of
purchase thereof and no property other than the assets so purchased
secures such Indebtedness; and
(f) Liens granted to the issuer of any documentary
letters of credit upon property shipped under or in connection with
such documentary letters of credit.
7.6. Transfer of Assets. Sell, lease, transfer or otherwise
dispose of all or substantially all of the assets of Borrower or any Material
Subsidiary in a single or series of related transactions.
7.7. Investments; Acquisitions. Make any acquisition or otherwise
purchase, own, invest in or otherwise acquire, directly or indirectly, any
stock or other securities, or make or permit to exist any interest whatsoever
in any other Person or permit to exist any loans or advances to any Person,
except that Borrower or any Subsidiary may maintain investments or invest in:
(a) Eligible Securities;
(b) investments in Subsidiaries existing as of the date
hereof and as set forth in Schedule 5.4 attached hereto;
(c) accounts receivable arising and trade credit granted
in the ordinary course of business and any securities received in
satisfaction or partial satisfaction thereof in connection with
accounts of financially troubled Persons to the extent reasonably
necessary in order to prevent or limit loss;
(d) other loans, advances and investments in an aggregate
principal amount at any time outstanding not to exceed $250,000; and
(e) loans in the ordinary course of business to
employees, affiliates and Subsidiaries who are not Guarantors in an
aggregate principal amount outstanding at any time of $5,000,000; and
(f) loans and advances to and investments in Subsidiaries
who are Guarantors.
Notwithstanding the foregoing, the Borrower and its Subsidiaries may make
Acquisitions so long as: (i) immediately prior to and immediately after the
consummation of such Acquisition, no Default or Event of Default has occurred
and is continuing, (ii) substantially all of the sales and operating profits
generated by such Person (or assets) so acquired or invested are derived from
the same or related line or lines of business as then conducted by the Borrower
and its Subsidiaries, (iii) a certificate of an
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Authorized Representative demonstrating compliance with Article VII hereof
after giving effect to such Acquisition, (iv) the Cost of Acquisition with
respect to any Acquisition entered into during the term of this Agreement shall
not exceed $25,000,000, (v) the aggregate amount of all Cost of Acquisitions
shall not exceed $40,000,000 during the term of this Agreement, and (v) in the
event the Person so acquired is not a Subsidiary, the Borrower's written
strategic plan (as reviewed by the Lender) includes additional investment in
such Person sufficient for it to become a Subsidiary.
7.8. Merger or Consolidation. (a) Consolidate with or merge into
any other Person, or (b) permit any other Person to merge into it, or (c)
liquidate, wind-up or dissolve or sell, transfer or lease or otherwise dispose
of all or a substantial part of its assets (other than sales in the ordinary
course of business); provided, however, any Subsidiary of the Borrower may
merge or transfer all or substantially all of its assets into or consolidate
with the Borrower or any wholly owned Subsidiary of the Borrower, and any
Person may merge with the Borrower if the Borrower shall be the survivor
thereof and such merger shall not cause, create or result in the occurrence of
any Default or Event of Default hereunder.
7.9. Restricted Payments. Make any Restricted Payments or apply or
set apart any of their assets therefor or agree to do any of the foregoing,
other than the negotiated or open market repurchase by the Borrower of up to
1,500,000 shares of its common capital stock for an aggregate purchase price
not to exceed $20,000,000 ("Permitted Stock Repurchases"), providing that at
the time of each repurchase and immediately after giving effect thereto no
Default or Event of Default shall exist or occur and be continuing.
7.10. Transactions with Affiliates. Other than transactions
permitted under Sections 7.7 hereof and transactions among the Borrower and
wholly owned Subsidiaries or among wholly owned Subsidiaries, enter into any
transaction after the Closing Date, including, without limitation, the
purchase, sale, lease or exchange of property, real or personal, or the
rendering of any service, with any Affiliate of the Borrower, except (a) that
such Persons may render services to the Borrower or its Subsidiaries for
compensation at the same rates generally paid by Persons engaged in the same or
similar businesses for the same or similar services, (b) that the Borrower or
any Subsidiary may render services to such Persons for compensation at the same
rates generally charged by the Borrower or such Subsidiary and (c) upon terms
no less favorable to the Borrower (or any Subsidiary) than would be obtained in
a comparable arm's-length transaction with a Person not an Affiliate.
7.11. Compliance with ERISA. With respect to any Pension Plan,
Employee Benefit Plan or Multiemployer Plan:
(a) permit the occurrence of any Termination Event which
would result in a liability to the Borrower or any ERISA Affiliate in
excess of $500,000;
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(b) permit the present value of all benefit liabilities
under all Pension Plans to exceed the current value of the assets of
such Pension Plans allocable to such benefit liabilities by more than
$500,000;
(c) permit any accumulated funding deficiency in excess
of $500,000 (as defined in Section 202 of ERISA and Section 412 of the
Code) with respect to any Pension Plan, whether or not waived;
(d) fail to make any contribution or payment to any
Multiemployer Plan which the Borrower or any ERISA Affiliate may be
required to make under any agreement relating to such Multiemployer
Plan, or any law pertaining thereto which results in or is likely to
result in a liability in excess of $500,000; or
(e) engage, or permit any Borrower or any ERISA Affiliate
to engage, in any prohibited transaction under Section 406 of ERISA or
Sections 4975 of the Code for which a civil penalty pursuant to
Section 502(i) of ERISA or a tax pursuant to Section 4975 of the Code
in excess of $500,000 may be imposed; or
(f) permit the establishment of any Employee Benefit Plan
providing post-retirement welfare benefits or establish or amend any
Employee Benefit Plan which establishment or amendment could result in
liability to the Borrower or any ERISA Affiliate or increase the
obligation of the Borrower or any ERISA Affiliate to a Multiemployer
Plan which liability or increase, individually or together with all
similar liabilities and increases, is in excess of $500,000; or
(g) fail, or permit the Borrower or any ERISA Affiliate
to fail, to establish, maintain and operate each Employee Benefit Plan
in compliance in all material respects with the provisions of ERISA,
the Code, all applicable Foreign Benefit Loans and all other
applicable laws and the regulations and official published
interpretations thereof.
7.12. Fiscal Year. Change its Fiscal Year.
7.13. Limitations on Sales and Leasebacks. Enter into any
arrangement with any Person providing for the leasing by the Borrower of real
or personal property which has been or is to be sold or transferred by the
Borrower to such Person or to any other Person to whom funds have been or are
to be advanced by such Person on the security of such property or rental
obligations of the Borrower ("Sale and Leaseback Transactions").
7.14. Dissolution, etc. Wind up, liquidate or dissolve (voluntarily
or involuntarily) or commence or suffer any proceedings seeking any such
winding up, liquidation or dissolution.
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ARTICLE VIII
Events of Default and Acceleration
8.1. Events of Default. If any one or more of the following events
("Events of Default") shall occur for any reason whatsoever (and whether such
occurrence shall be voluntary or involuntary or come about or be effected by
operation of law or pursuant to or in compliance with any judgment, decree or
order of any court or any order, rule or regulation of any administrative or
governmental body):
(a) if default shall be made in the due and punctual
payment of the principal of any Loan or other Obligation, when and as
the same shall be due and payable whether pursuant to any provision of
Article II hereof, at maturity, by acceleration or otherwise; or
(b) if default shall be made in the due and punctual
payment of any amount of interest on any Loan or of any fees or other
amounts payable to the Lender under the Loan Documents on the date on
which the same shall be due and payable; or
(c) if default shall be made in the performance or
observance of any covenant set forth in Sections 6.8, 6.12, 6.22, 6.23
or Article VII hereof;
(d) if a default shall be made in the performance or
observance of, or shall occur under, any covenant, agreement or
provision contained in this Agreement, the Notes or the other Loan
Documents (other than as described in clauses (a), (b) or (c) above)
or any other agreement between the Borrower and the Lender creating or
relating to any Indebtedness between the Borrower and the Lender and
such default shall continue for 30 or more days after the earlier of
receipt of notice of such default by the Authorized Representative
from the Lender or an officer of the Borrower becomes aware of such
default, or if a default shall be made in the performance or
observance of, or shall occur under, any covenant, agreement or
provision contained in any of the other Loan Documents (beyond any
applicable grace period, if any, contained therein) or in any
instrument or document evidencing or creating any obligation,
guaranty, or Lien in favor of the Lender or delivered to the Lender in
connection with or pursuant to this Agreement or any of the
Obligations, or if any Loan Document ceases to be in full force and
effect (other than by reason of any action by the Lender), or if
without the written consent of the Lender this Agreement or any other
Loan Document shall be disaffirmed or shall terminate, be terminable
or be terminated or become void or unenforceable for any reason
whatsoever (other than in accordance with its terms in the absence of
default or by reason of any action by the Lender); or
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<PAGE> 53
(e) the Borrower or any Subsidiary shall fail to make any
payment in respect of Indebtedness outstanding (other than the Notes)
when due or within any applicable grace period; or
(f) any event or condition shall occur which results in
the acceleration of the maturity of Indebtedness outstanding of the
Borrower or any Subsidiary or the mandatory prepayment or purchase of
such Indebtedness by the Borrower (or its designee) or such Subsidiary
(or its designee) prior to the scheduled maturity thereof, or enables
(or, with the giving of notice or lapse of time or both, would enable)
the holders of such Indebtedness or any Person acting on such holders'
behalf to accelerate the maturity thereof or require the mandatory
prepayment or purchase thereof prior to the scheduled maturity
thereof, without regard to whether such holders or other Person shall
have exercised or waived their right to do so; or
(g) if any material representation, warranty or other
statement of fact contained herein or any other Loan Document or in
any writing, certificate, report or statement at any time furnished to
the Lender by or on behalf of the Borrower or any Guarantor pursuant
to or in connection with this Agreement or the other Loan Documents,
or otherwise, shall be false or misleading in any material respect
when given; or
(h) if the Borrower or any Guarantor shall be unable to
pay its debts generally as they become due; file a petition to take
advantage of any insolvency statute; make an assignment for the
benefit of its creditors; commence a proceeding for the appointment of
a receiver, trustee, liquidator or conservator of itself or of the
whole or any substantial part of its property; file a petition or
answer seeking reorganization or arrangement or similar relief under
the federal bankruptcy laws or any other applicable law or statute; or
(i) if a court of competent jurisdiction shall enter an
order, judgment or decree appointing a custodian, receiver, trustee,
liquidator or conservator of the Borrower or any Guarantor or of the
whole or any substantial part of its properties and such order,
judgment or decree continues unstayed and in effect for a period of
thirty (30) days, or approve a petition filed against the Borrower or
any Guarantor seeking reorganization or arrangement or similar relief
under the federal bankruptcy laws or any other applicable law or
statute of the United States of America or any state, which petition
is not dismissed within thirty (30) days; or if, under the provisions
of any other law for the relief or aid of debtors, a court of
competent jurisdiction shall assume custody or control of the Borrower
or any Guarantor or of the whole or any substantial part of its
properties, which control is not relinquished within thirty (30) days;
or if there is commenced against the Borrower any proceeding or
petition seeking reorganization, arrangement or similar relief under
the federal bankruptcy laws or any other applicable law or statute of
the United States of America or any state which
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<PAGE> 54
proceeding or petition remains undismissed for a period of thirty (30)
days; or if the Borrower or any Guarantor takes any action to indicate
its consent to or approval of any such proceeding or petition; or
(j) if (i) any judgment where the amount not covered by
insurance (or the amount as to which the insurer denies liability) is
in excess of $500,000 is rendered against the Borrower or any
Guarantor, or (ii) there is any attachment, injunction or execution
against any of the properties of the Borrower or any Guarantor for any
amount in excess of $500,000; and such judgment, attachment,
injunction or execution remains unpaid, unstayed, undischarged,
unbonded or undismissed for a period of thirty (30) days; or
(k) if the Borrower or any Guarantor shall suspend all or
any part of its operations material to the conduct of the business of
the Borrower for a period of more than 120 days; or
(l) if the Borrower shall breach any of the material
terms or conditions of any Swap Agreement with the Lender and such
breach shall continue beyond any grace period, if any, relating
thereto pursuant to its terms; or
(m) if the Borrower shall cause, suffer or permit (i) any
"person" or "group" (as such terms are used in Sections 13(d) and
14(d) of the Exchange Act), other than the Bernstein Family or the
Crown ESOP to own or control, directly or indirectly, more than thirty
percent (30%) of the capital stock of the Borrower having voting
rights in the election of directors, or any other equity security or a
security convertible into or exchangeable or redeemable for any equity
security or (ii) individuals who at the Closing Date constituted the
Board of Directors (together with any new directors whose election by
the Board of Directors or whose nomination for election by the
stockholders of the Borrower was approved by a vote of a majority of
the directors of the Borrower then still in office who were either
directors at the Closing Date or whose election or nomination for
election was previously so approved) to cease for any reason to
constitute at least a majority of the Board of Directors then in
office;
then, and in any such event and at any time thereafter, if such Event of
Default or any other Event of Default shall have not been waived,
(A) either or both of the following actions may
be taken: (i) the Lender may declare any obligation of the
Lender to make further Revolving Loans terminated, whereupon
the obligation of the Lender to make further Revolving Loans
hereunder shall terminate immediately, and (ii) the Lender
may, at its option, declare by notice to the Borrower any or
all of the Obligations to be immediately due and payable, and
the same, including all interest accrued thereon and all other
obligations of the
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<PAGE> 55
Borrower to the Lender shall forthwith become immediately due
and payable without presentment, demand, protest, notice or
other formality of any kind, all of which are hereby expressly
waived, anything contained herein or in any instrument
evidencing the Obligations to the contrary notwithstanding;
provided, however, that notwithstanding the above, if there
shall occur an Event of Default under clause (h) or (i) above,
then the obligation of the Lender to make Revolving Loans
hereunder shall automatically terminate and any and all of the
Obligations shall be immediately due and payable without the
necessity of any action by the Lender; and
(B) the Lender shall have all of the rights and
remedies available under the Loan Documents or under any
applicable law.
8.2. Lender to Act. In case any one or more Events of Default
shall occur and not have been waived, the Lender may proceed to protect and
enforce its rights or remedies either by suit in equity or by action at law, or
both, whether for the specific performance of any covenant, agreement or other
provision contained herein or in any other Loan Document, or to enforce the
payment of the Obligations or any other legal or equitable right or remedy.
8.3. Cumulative Rights. No right or remedy herein conferred upon
the Lender is intended to be exclusive of any other rights or remedies
contained herein or in any other Loan Document, and every such right or remedy
shall be cumulative and shall be in addition to every other such right or
remedy contained herein and therein or now or hereafter existing at law or in
equity or by statute, or otherwise.
8.4. No Waiver. No course of dealing between the Borrower and the
Lender or any failure or delay on the part of the Lender in exercising any
rights or remedies under any Loan Document or otherwise available to it shall
operate as a waiver of any rights or remedies and no single or partial exercise
of any rights or remedies shall operate as a waiver or preclude the exercise of
any other rights or remedies hereunder or of the same right or remedy on a
future occasion.
8.5. Allocation of Proceeds. If an Event of Default has
occurred and not been waived, and the maturity of the Notes has been
accelerated pursuant to Article VIII hereof, all payments received by the
Lender hereunder, in respect of any principal of or interest on the Obligations
or any other amounts payable by the Borrower hereunder shall be applied by the
Lender in the following order:
(a) amounts due to the Lender pursuant to Sections 2.8
and 9.5 hereof;
(b) payments of interest on Loans;
(c) payments of principal of Loans;
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<PAGE> 56
(d) amounts due to the Lender pursuant to Sections 6.16
and 9.9 hereof;
(e) payments of all other amounts due under this
Agreement;
(f) amounts due to the Lender in respect of Obligations
consisting of liabilities under any Swap Agreement with the Lender;
and
(g) any surplus remaining after application as provided
for herein, to the Borrower or otherwise as may be required by
applicable law.
ARTICLE IX
Miscellaneous
9.1. Assignments and Participations. (a) At any time after the
Closing Date the Lender may, with the prior written consent of the Borrower
provided no Event of Default has occurred and is continuing, assign to one or
more banks or financial institutions all or a portion of its rights and
obligations under this Agreement (including, without limitation, all or a
portion of the Note payable to its order); provided, that (i) each such
assignment shall be of a constant and not a varying percentage of all of the
assigning Lender's rights and obligations under the Revolving Credit Facility
of this Agreement, (ii) for each assignment involving the issuance and transfer
of a Note, the assigning Lender shall execute an Assignment and Acceptance and
the Borrower hereby consents to execute a replacement Note to give effect to
the assignment, (iii) the minimum Revolving Credit Commitment which shall be
assigned is $5,000,000 or, if less, its total Revolving Credit Commitment, (iv)
such assignee shall have an office located in the United States, and (v) no
consent of the Borrower shall be required in connection with any assignment by
the Lender to an affiliate of the Lender. Upon such execution, delivery,
approval and acceptance, from and after the effective date specified in each
Assignment and Acceptance, (x) the assignee thereunder shall be a party hereto
and, to the extent that rights and obligations hereunder or under such Note
have been assigned or negotiated to it pursuant to such Assignment and
Acceptance have the rights and obligations of a Lender hereunder and a holder
of such Note and (y) the assignor thereunder shall, to the extent that rights
and obligations hereunder or under such Note have been assigned or negotiated
by it pursuant to such Assignment and Acceptance, relinquish its rights and be
released from its obligations under this Agreement.
(b) By executing and delivering an Assignment and
Acceptance, the Lender assignor thereunder and the assignee thereunder confirm
to and agree with each other and the other parties hereto as follows: (i) the
assignment made under such Assignment and Acceptance is made under such
Assignment and
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<PAGE> 57
Acceptance without recourse; (ii) such assigning Lender makes no representation
or warranty and assumes no responsibility with respect to the financial
condition of the Borrower or the performance or observance by the Borrower of
any of its obligations under any Loan Document or any other instrument or
document furnished pursuant hereto; (iii) such assignee confirms that it has
received a copy of this Agreement, together with copies of the financial
statements delivered pursuant to Section 5.6 or Section 6.1, as the case may
be, and such other Loan Documents and other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
such Assignment and Acceptance; (iv) such assignee will, independently and
without reliance upon the assigning Lender or any other Lender and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement; and (v) such assignee agrees that it will perform in accordance
with their terms all of the obligations which by the terms of this Agreement
are required to be performed by it as a Lender and a holder of such Notes.
(c) Nothing herein shall prohibit the Lender from
pledging or assigning, without notice or consent, any Note to any Federal
Reserve Bank in accordance with applicable law.
(d) The Lender may sell participations at its expense to
one or more banks or other financial institutions as to all or a portion of its
rights and obligations under this Agreement; provided, that (i) the Lender's
obligations under this Agreement shall remain unchanged, (ii) the Lender shall
remain solely responsible to the Borrower for the performance of such
obligations, (iii) the Lender shall remain the holder of any Note issued to it
for the purpose of this Agreement, (iv) such participations shall be in a
minimum amount of $5,000,000 or, if less, its total Revolving Credit
Commitment, and (v) the Borrower shall continue to deal solely and directly
with the Lender in connection with the Lender's rights and obligations under
this Agreement and with regard to any and all payments to be made under this
Agreement; provided, that the participation agreement between the Lender and
its participants may provide that the Lender will obtain the approval of such
participant prior to the Lender's agreeing to any amendment or waiver of any
provisions of this Agreement which would (A) extend the maturity of any Note,
(B) reduce the interest rates hereunder or (C) increase the Revolving Credit
Commitment of the Lender granting the participation, and (vi) the sale of any
such participations which require Borrower to file a registration statement
with the United States Securities and Exchange Commission or under the
securities regulations or laws of any state shall not be permitted.
(e) The Borrower may not assign any rights, powers,
duties or obligations under this Agreement or the other Loan Documents without
the prior written consent of the Lender.
9.2. Notices. Any notice shall be conclusively deemed to have been
received by any party hereto and be effective on the day on which delivered to
such party (against receipt therefor) at the
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address set forth below or such other address as such party shall specify to
the other parties in writing (or, in the case of notice by telecopy, telegram
or telex (where the receipt of such message is verified by return) expressly
provided for hereunder, when received at such telecopy or telex number as may
from time to time be specified in written notice to the other parties hereto or
otherwise received), or if sent prepaid by certified or registered mail return
receipt requested on the fifth Business Day after the day on which mailed,
addressed to such party at said address:
(a) if to the Borrower:
Crown Crafts, Inc.
1600 Riveredge Parkway
Suite 200
Atlanta, Georgia 30328
Attn: Treasurer
Telephone: (404) 644-6235
Telefacsimile: (404) 644-6233
(b) if to the Lender:
NationsBank, National Association (Carolinas)
Independence Center, 15th Floor, NC1 001-15-04
Charlotte, North Carolina 28255
Attention: Ms. Laura Thompson
Telephone: (704) 386-4197
Telefacsimile: (704) 386-8694
with a copy to:
NationsBank, National Association (Carolinas)
Corporate Textile & Apparel Group
100 North Tryon Street, NC1 007-08-11
Charlotte, North Carolina 28255
Attention: Mr. J. Lance Walton
Telephone: (704) 386-6744
Telefacsimile: (704) 386-1270
9.3. Survival. All covenants, agreements, representations and
warranties made herein shall survive the making by the Lender of the Loans and
the execution and delivery to the Lenders of this Agreement and the Notes and
shall continue in full force and effect so long as any of the Obligations
remain outstanding or the Lender has any commitment hereunder or the Borrower
has continuing obligations hereunder unless otherwise provided herein.
Whenever in this Agreement, any of the parties hereto is referred to, such
reference shall be deemed to include the successors and permitted assigns of
such party and all covenants, provisions and agreements by or on behalf of the
Borrower which are contained in this Agreement, the Notes and the other Loan
Documents shall inure to the benefit of the successors and permitted assigns of
the Lender or any of them.
9.4. Expenses. The Borrower agrees prior to and after the
occurrence of an Event of Default (a) to pay or reimburse the
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Lender for all its reasonable out-of-pocket costs and expenses incurred in
connection with the preparation, negotiation and execution of, and any
amendment, supplement or modification to, this Agreement or any of the other
Loan Documents (including travel expenses relating to closing), and the
consummation of the transactions contemplated hereby and thereby, including,
without limitation, the reasonable fees and disbursements of counsel to the
Lender, (b) to pay or reimburse the Lender for all its costs and expenses
incurred in connection with the enforcement or preservation of any rights under
this Agreement and the other Loan Documents, including without limitation, the
reasonable fees and disbursements of its counsel and (c) to pay, indemnify and
hold the Lender harmless from any and all recording and filing fees and any and
all liabilities with respect to, or resulting from any failure to pay or delay
in paying, documentary, stamp, excise and other similar taxes, if any, which
may be payable or determined to be payable in connection with the execution and
delivery of this Agreement or any other Loan Documents, or consummation of any
amendment, supplement or modification of, or any waiver or consent under or in
respect of, this Agreement or any other Loan Documents.
9.5. Amendments. No amendment, modification or waiver of any
provision of this Agreement or any of the Loan Documents and no consent by the
Lender to any departure therefrom by the Borrower shall be effective unless
such amendment, modification or waiver shall be in writing and signed by the
Lender and the same shall then be effective only for the period and on the
conditions and for the specific instances and purposes specified in such
writing.
9.6. Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed an
original, and it shall not be necessary in making proof of this Agreement to
produce or account for more than one such fully-executed counterpart.
9.7. Termination. The termination of this Agreement shall not
affect any rights of the Borrower or the Lender or any obligation of the
Borrower or the Lender arising prior to the effective date of such termination,
and the provisions hereof shall continue to be fully operative until all
transactions entered into or rights created or obligations incurred prior to
such termination have been fully disposed of, concluded or liquidated and the
Obligations arising prior to or after such termination have been irrevocably
paid in full. The rights granted to the Lender hereunder and under the other
Loan Documents shall continue in full force and effect, notwithstanding the
termination of this Agreement, until all of the Obligations have been paid in
full after the termination hereof (other than Obligations in the nature of
continuing indemnities or expense reimbursement obligations not yet due and
payable) or the Borrower has furnished the Lender with an indemnification
satisfactory to the Lender with respect thereto. All representations,
warranties, covenants, waivers and agreements contained herein shall survive
termination hereof until payment in full of the Obligations unless otherwise
provided herein. Notwithstanding the foregoing, if after receipt of any
payment of all or any part of the Obligations the Lender is for any reason
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compelled to surrender such payment to any Person because such payment is
determined to be void or voidable as a preference, impermissible setoff, a
diversion of trust funds or for any other reason, this Agreement shall continue
in full force and the Borrower shall be liable to, and shall indemnify and hold
the Lender harmless for, the amount of such payment surrendered until the
Lender shall have been finally and irrevocably paid in full. The provisions of
the foregoing sentence shall be and remain effective notwithstanding any
contrary action which may have been taken by the Lender in reliance upon such
payment, and any such contrary action so taken shall be without prejudice to
the Lender's rights under this Agreement and shall be deemed to have been
conditioned upon such payment having become final and irrevocable.
9.8. Indemnification. In consideration of the execution and
delivery of this Agreement by the Lender and the extension of the Revolving
Credit Commitments, the Borrower hereby indemnifies, exonerates and holds the
Lender and its officers, directors, employees and agents (collectively, the
"Indemnified Parties") free and harmless from and against any and all actions,
causes of action, suits, losses, costs, liabilities and damages, and expenses
incurred in connection therewith (irrespective of whether any such Indemnified
Party is a party to the action for which indemnification hereunder is sought),
including reasonable attorneys' fees and disbursements (collectively, the
"Indemnified Liabilities"), incurred by the Indemnified Parties or any of them
as a result of, or arising out of, or relating to the execution, delivery,
enforcement performance or administration of this Agreement and the other Loan
Documents, or any transaction financed or to be financed in whole or in part,
directly or indirectly, with the proceeds of any Loan, except for any such
Indemnified Liabilities arising for the account of a particular Indemnified
Party by reason of the bad faith, gross negligence or willful misconduct of, or
breach of the Loan Documents by, such Indemnified Party or an officer,
co-officer, director, co-director, employee, co-employee, agent or co-agent of
such Indemnified Party, and if and to the extent that the foregoing undertaking
may be unenforceable for any reason, the Borrower hereby agrees to make the
maximum contribution to the payment and satisfaction of each of the Indemnified
Liabilities which is permissible under applicable law. The indemnification and
hold harmless provisions of this Section 9.9 shall survive repayment of the
Obligations, occurrence of the Revolving Credit Termination Date and expiration
or termination of this Agreement.
9.9. Headings and References. The headings of the Articles and
Sections of this Agreement are inserted for convenience of reference only and
are not intended to be a part of, or to affect the meaning or interpretation of
this Agreement. Words such as "hereof", "hereunder", "herein" and words of
similar import shall refer to this Agreement in its entirety and not to any
particular Section or provisions hereof, unless so expressly specified. As
used herein, the singular shall include the plural, and the masculine shall
include the feminine or a neutral gender, and vice versa, whenever the context
requires.
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9.10. Severability. If any provision of this Agreement or the other
Loan Documents shall be determined to be illegal or invalid as to one or more
of the parties hereto, then such provision shall remain in effect with respect
to all parties, if any, as to whom such provision is neither illegal nor
invalid, and in any event all other provisions hereof shall remain effective
and binding on the parties hereto.
9.11. Entire Agreement. This Agreement, together with the other
Loan Documents, constitutes the entire agreement between the parties with
respect to the subject matter hereof and supersedes all previous proposals,
negotiations, representations, commitments and other communications between or
among the parties, both oral and written, with respect thereto.
9.12. Agreement Controls. In the event that any term of any of the
Loan Documents other than this Agreement conflicts with any term of this
Agreement, the terms and provisions of this Agreement shall control.
9.13. Usury Savings Clause. Notwithstanding any other provision
herein, the aggregate interest rate charged under any of the Notes, including
all charges or fees in connection therewith deemed in the nature of interest
under North Carolina or Georgia law, shall not exceed the Highest Lawful Rate
(as such term is defined below). If the rate of interest (determined without
regard to the preceding sentence) under this Agreement at any time exceeds the
Highest Lawful Rate (as defined below), the outstanding amount of the Loans
made hereunder shall bear interest at the Highest Lawful Rate until the total
amount of interest due hereunder equals the amount of interest which would have
been due hereunder if the stated rates of interest set forth in this Agreement
had at all times been in effect. In addition, if when the Loans made hereunder
are repaid in full the total interest due hereunder (taking into account the
increase provided for above) is less than the total amount of interest which
would have been due hereunder if the stated rates of interest set forth in this
Agreement had at all times been in effect, then to the extent permitted by law,
the Borrower shall pay to the Lender an amount equal to the difference between
the amount of interest paid and the amount of interest which would have been
paid if the Highest Lawful rate had at all times been in effect.
Notwithstanding the foregoing, it is the intention of the Lender and the
Borrower to conform strictly to any applicable usury laws. Accordingly, if any
lender contracts for, charges, or receives any consideration which constitutes
interest in excess of the Highest Lawful rate, then any such excess shall be
cancelled automatically and, if previously paid, shall at the Lender's option
be applied to the outstanding amount of the Loans made hereunder or be refunded
to the Borrower. As used in this paragraph, the term "Highest Lawful Rate"
means the maximum lawful interest rate, if any, that at any time or from time
to time may be contracted for, charged, or received under the laws applicable
to such Lender which are presently in effect or, to the extent allowed by law,
under such applicable laws which may hereafter be in effect and which allow a
higher maximum nonusurious interest rate than applicable laws now allow.
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9.14. GOVERNING LAW; ETC..
(a) THIS AGREEMENT AND EACH OF THE OTHER LOAN DOCUMENTS
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF GEORGIA APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY
PERFORMED, IN SUCH STATE.
(b) THE BORROWER HEREBY EXPRESSLY AND IRREVOCABLY AGREES
AND CONSENTS THAT ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREIN
MAY BE INSTITUTED IN ANY STATE OR FEDERAL COURT SITTING IN THE COUNTY
OF FULTON, UNITED STATES OF AMERICA AND, BY THE EXECUTION AND DELIVERY
OF THIS AGREEMENT, THE BORROWER EXPRESSLY WAIVES ANY OBJECTION THAT IT
MAY HAVE NOW OR HEREAFTER TO THE LAYING OF THE VENUE OR TO THE
JURISDICTION OF ANY SUCH SUIT, ACTION OR PROCEEDING, AND IRREVOCABLY
SUBMITS GENERALLY AND UNCONDITIONALLY TO THE JURISDICTION OF ANY SUCH
COURT IN ANY SUCH SUIT, ACTION OR PROCEEDING.
(c) THE BORROWER AGREES THAT SERVICE OF PROCESS MAY BE
MADE BY PERSONAL SERVICE OF A COPY OF THE SUMMONS AND COMPLAINT OR
OTHER LEGAL PROCESS IN ANY SUCH SUIT, ACTION OR PROCEEDING, OR BY
REGISTERED OR CERTIFIED MAIL (POSTAGE PREPAID) TO THE ADDRESS OF THE
BORROWER PROVIDED IN Section 9.2 HEREOF, OR BY ANY OTHER METHOD OF
SERVICE PROVIDED FOR UNDER THE APPLICABLE LAWS IN EFFECT IN THE STATE
OF GEORGIA.
(d) NOTHING CONTAINED IN SUBSECTIONS (B) OR (C) HEREOF
SHALL PRECLUDE THE SECURED PARTY FROM BRINGING ANY SUIT, ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE OTHER
LOAN DOCUMENTS IN THE COURTS OF ANY PLACE WHERE THE BORROWER OR ANY OF
THE BORROWER'S PROPERTY OR ASSETS MAY BE FOUND OR LOCATED. TO THE
EXTENT PERMITTED BY THE APPLICABLE LAWS OF ANY SUCH JURISDICTION, THE
BORROWER HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH
COURT AND EXPRESSLY WAIVES, IN RESPECT OF ANY SUCH SUIT, ACTION OR
PROCEEDING, THE JURISDICTION OF ANY OTHER COURT OR COURTS WHICH NOW OR
HEREAFTER, BY REASON OF ITS PRESENT OR FUTURE DOMICILE, OR OTHERWISE,
MAY BE AVAILABLE TO IT.
(e) IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY
RIGHTS OR REMEDIES UNDER OR RELATED TO THIS AGREEMENT OR ANY
AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR THAT MAY IN
THE FUTURE BE DELIVERED IN CONNECTION WITH THE FOREGOING, THE BORROWER
HEREBY AGREES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, THAT ANY
SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE
A JURY AND THE BORROWER HEREBY WAIVES, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, ANY OBJECTION THAT IT MAY HAVE THAT EACH ACTION OR
PROCEEDING HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be made, executed and delivered by their duly authorized officers as of the day
and year first above written.
<TABLE>
<S> <C>
CROWN CRAFTS, INC.
By: /s/ Robert E. Schnelle
------------------------------------
ATTEST: Name: Robert E. Schnelle
/s/ Roger D. Chittum Title: Treasurer
- ------------------------
Secretary
[CORPORATE SEAL]
NATIONSBANK, NATIONAL ASSOCIATION
(CAROLINAS), as Lender
By: /s/ J. Lance Walton
----------------------------
Name: J. Lance Walton
Title: Senior Vice President
Lending Office:
NationsBank, NAtional Association
(Carolinas)
Independence Center, 15th Floor
NC1 001-15-04
Charlotte, North Carolina 28255
</TABLE>
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EXHIBIT A
Commitment
<TABLE>
<CAPTION>
Loan
Lender Commitment
- ------ ----------
<S> <C>
NationsBank, National $15,000,000
Association (Carolinas)
</TABLE>
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EXHIBIT B
Form of Assignment and Acceptance
DATED _______________, ____
Reference is made to the Revolving Credit Agreement dated as of August
25, 1995 (the "Agreement") between Crown Crafts, Inc., a Georgia corporation
(the "Borrower") and NationsBank, National Association (Carolinas), as Lender
("Lender"). Unless otherwise defined herein, terms defined in the Agreement
are used herein with the same meanings.
________________________ (the "Assignor") and _______________________
_______________ (the "Assignee") agree as follows:
1. The Assignor hereby sells and assigns to the Assignee, and the
Assignee hereby purchases and assumes from the Assignor, WITHOUT RECOURSE, a
_______% (1) interest in and to all of the Assignor's rights and obligations
under the Agreement as of the Effective Date (as defined below), including,
without limitation, such percentage interest in the Loans owing to the Assignor
on the Effective Date and evidenced by the Revolving Note held by the Assignor.
2. The Assignor (i) represents and warrants that, as of the date
hereof, the aggregate principal amount of Revolving Loans owing to it (without
giving effect to the assignments thereof which have not yet become effective)
is $__________ under a Revolving Note dated ____________, 19__ in the aggregate
principal amount of $_________; (ii) represents and warrants that it is the
legal and beneficial owner of the interest being assigned by it hereunder and
that such interest is free and clear of any adverse claim; (iii) makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the
Agreement or any of the Loan Documents or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Agreement or any of
the Loan Documents or any other instrument or document furnished pursuant
thereto; (iv) makes no representation or warranty and assumes no responsibility
with respect to the financial condition of the Borrower or the performance or
observance by the Borrower of any of its obligations under the Agreement or any
of the Loan Documents or any other instrument or document furnished pursuant
thereto and (v) attaches hereto the Revolving Note referred to in paragraph 1
above and requests that the Lender exchange such Note for Notes as follows: a
Revolving Note dated _____________, 19__ in the principal amount of
$________________, payable to the order of the Assignor, and a Revolving Note,
dated ____________________________ 19__, in the principal amount of
$_________________ payable to the order of the Assignee.
____________________
(1) Specify percentage in no more than 4 decimal points.
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3. The Assignee (i) confirms that it has received a copy of the
Agreement, together with copies of the most recent financial statements
referred to in Section 7.1 thereof and such other documents and information as
it has deemed appropriate to make its own credit analysis and decision to enter
into this Assignment and Acceptance; (ii) agrees that it will, independently
and without reliance upon the Lender, the Assignor, or any other Lender and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under the Agreement; (iii) will perform all of the obligations which by the
terms of the Agreement are required to be performed by the Lender; and (v)
specifies as its address for notices the office set forth beneath its name on
the signature pages hereof.
4. The effective date for this Assignment and Acceptance shall be
_____________________________ (the "Effective Date").
5. Upon such acceptance and recording, as of the Effective Date,
(i) the Assignee shall be a party to the Agreement and, to the extent provided
in this Assignment and Acceptance, have the rights and obligations of a Lender
thereunder and under the Loan Documents and (ii) the Assignor shall, to the
extent provided in this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Agreement.
7. This Assignment and Acceptance shall be governed by and
construed in accordance with, the laws of the State of Georgia.
<TABLE>
<S> <C>
[NAME OF ASSIGNOR]
By:
------------------------------------------
Name:
Title:
Notice Address:
------------------------------
------------------------------
------------------------------
After the Effective Date
Outstanding Revolving Loans:$
----------------
[NAME OF ASSIGNEE]
By:
------------------------------------------
Name:
Title:
Notice Address/Lending Office
-------------------
-------------------
Wire transfer Instructions:
----------------------------
----------------------------
After the Effective Date
Outstanding Revolving Loans:$
----------------
</TABLE>
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Consented to:
CROWN CRAFTS, INC.
By:____________________________
Name:__________________________
Title:_________________________
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EXHIBIT C
Notice of Appointment (or Revocation) of Authorized
Representative
Reference is hereby made to the Revolving Credit Agreement dated as of
August 25, 1995 (the "Agreement") among Crown Crafts, Inc., a Georgia
corporation (the "Borrower"), and NationsBank, National Association
(Carolinas), as Lender ("Lender"). Capitalized terms used but not defined
herein shall have the respective meanings therefor set forth in the Agreement.
The Borrower hereby appoints each individual named below as an
Authorized Representative under the Loan Documents, and hereby represents and
warrants that (i) set forth opposite each such individual's name is a true and
correct statement of such individual's office (to which such individual has
been duly elected or appointed), a genuine specimen signature of such
individual and an address for the giving of notice, and (ii) each such
individual has been duly authorized by the Borrower to act as Authorized
Representative under the Loan Documents:
<TABLE>
<CAPTION>
Name and Address Office Specimen Signature
<S> <C> <C>
- ----------------- ------------------- -------------------
- -----------------
- -----------------
- -----------------
- -----------------
- ----------------- ------------------- -------------------
</TABLE>
Borrower hereby revokes (effective upon receipt hereof by the Lender) the prior
appointment of ________________ as an Authorized Representative.
This the ___ day of __________________, 19__.
CROWN CRAFTS, INC.
By:
---------------------------------
Name:
---------------------------------
Title:
---------------------------------
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EXHIBIT D
Form of Borrowing Notice
To: NationsBank, National Association (Carolinas)
Independence Center, 15th Floor, NC1 001-15-04
Charlotte, North Carolina 28255
Attention: Ms. Laura Thompson
Telephone: (704) 386-4197
Telefacsimile: (704) 386-8694
Reference is hereby made to the Revolving Credit Agreement dated as
of August 25, 1995 (the "Agreement") among Crown Crafts, Inc., a Georgia
corporation (the "Borrower"), and NationsBank, National Association
(Carolinas), as Lender ("Lender"). Capitalized terms used but not defined
herein shall have the respective meanings therefor set forth in the Agreement.
The Borrower through its Authorized Representative hereby gives notice
to the Lender that Loans of the type and amount set forth below be made on the
date indicated:
<TABLE>
<CAPTION>
Type of Loan Interest Aggregate
(check one) Period (1) Amount (2) Date of Loan (3)
--------- ------ ------ ------------
<S> <C> <C> <C>
Base Rate Loan
---------- ----------- ------------
Eurodollar Rate Loan
---------- ----------- ------------
</TABLE>
_______________________
(1) For any Eurodollar Rate Loan, one, two, three or six months.
(2) Must be $2,000,000 or, if greater, an integral multiple of $1,000,000
if a Eurodollar Rate Loan, and $250,000 or, if greater, an integral
multiple of $100,000 if a Base Rate Loan.
(3) At least three (3) Business Days later if a Eurodollar Rate Loan;
The Borrower hereby requests that the proceeds of Loans described in
this Borrowing Notice be made available to the Borrower as follows: [insert
transmittal instructions] .
The undersigned hereby certifies, solely in his/her corporate and not
in his/her individual capacity, that:
1. No Default or Event of Default exists either now or after
giving effect to the borrowing described herein; and
2. All the representations and warranties set forth in Article V
of the Agreement and in the Loan Documents (other than those expressly stated
to refer to a particular date) are true and correct as of the date hereof
except that the reference to the financial statements in Section 5.6(a) of the
Agreement are to those financial statements most recently delivered to you
pursuant to Section 6.1 of the Agreement (it being understood that any
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financial statements delivered pursuant to Section 6.1(b) have not been
certified by independent public accountants) and attached hereto are any
changes to the Schedules referred to in connection with such representations
and warranties.
3. After giving effect to Loans requested hereby, the principal
amount of outstanding Loans will not exceed the Total Revolving Credit
Commitment.
CROWN CRAFTS, INC.
BY: ___________________________________
Authorized Representative
DATE: _________________________________
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<PAGE> 71
EXHIBIT E
Form of Interest Rate Selection Notice
To: NationsBank, National Association (Carolinas)
Independence Center, 15th Floor, NC1 001-15-04
Charlotte, North Carolina 28255
Attention: Ms. Laura Thompson
Telephone: (704) 386-4197
Telefacsimile: (704) 386-8694
Reference is hereby made to the Revolving Credit Agreement dated as
of August 25, 1995 (the "Agreement") among Crown Crafts, Inc., a Georgia
corporation (the "Borrower"), and NationsBank, National Association
(Carolinas), as Lender ("Lender"). Capitalized terms used but not defined
herein shall have the respective meanings therefor set forth in the Agreement.
The Borrower through its Authorized Representative hereby gives notice
to the Lender of the following selection of a type of Loan and Interest Period:
<TABLE>
<CAPTION>
Type of Loan Interest Aggregate
(check one) Period (1) Amount (2) Date of Loan (3)
--------- ------ ------ ------------
<S> <C> <C> <C>
Base Rate Loan
---------- ----------- ------------
Eurodollar Rate Loan
---------- ----------- ------------
</TABLE>
_______________________
(1) For any Eurodollar Rate Loan, one, two, three or six months.
(2) Must be $2,000,000 or, if greater, an integral multiple of $1,000,000
if a Eurodollar Rate Loan, and $250,000 or, if greater, an integral
multiple of $100,000 if a Base Rate Loan.
(3) At least three (3) Business Days later if a Eurodollar Rate Loan;
CROWN CRAFTS, INC.
BY: _________________________
Authorized Representative
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EXHIBIT F
Form of Revolving Note
PROMISSORY NOTE
$15,000,000 Atlanta, Georgia
August 25, 1995
FOR VALUE RECEIVED, CROWN CRAFTS, INC., a Georgia corporation having
its principal place of business located in Atlanta, Georgia (the "Borrower"),
hereby promises to pay to the order of NATIONSBANK, NATIONAL ASSOCIATION
(CAROLINAS) (the "Lender"), in its individual capacity, at the office of the
Lender located at Independence Center, 15th Floor, NC1-007-15-04, Charlotte,
North Carolina 28255, (or at such other place or places as the Lender may
designate in writing) at the times set forth in the Revolving Credit Agreement
dated as of August 25, 1995 among the Borrower and the Lender (the "Agreement"
- -- all capitalized terms not otherwise defined herein shall have the
respective meanings set forth in the Agreement), in lawful money of the United
States of America, in immediately available funds, the principal amount of
FIFTEEN MILLION DOLLARS ($15,000,000) or, if less than such principal amount,
the aggregate unpaid principal amount of all Revolving Loans made by the Lender
to the Borrower pursuant to the Agreement on the Revolving Credit Termination
Date or such earlier date as may be required pursuant to the terms of the
Agreement, and to pay interest from the date hereof on the unpaid principal
amount hereof, in like money, at said office, on the dates and at the rates
provided in Article II of the Agreement. All or any portion of the principal
amount of Loans may be prepaid as provided in the Agreement.
If payment of all sums due hereunder is accelerated under the terms of
the Agreement or under the terms of the other Loan Documents executed in
connection with the Agreement, the then remaining principal amount and accrued
but unpaid interest shall bear interest which shall be payable on demand at the
rates per annum set forth in the proviso to Section 2.2 of the Agreement.
Further, in the event of such acceleration, this Revolving Note shall become
immediately due and payable, without presentation, demand, protest or notice of
any kind, all of which are hereby waived by the Borrower.
In the event this Revolving Note is not paid when due at any stated or
accelerated maturity, the Borrower agrees to pay, in addition to the principal
and interest due hereunder, all costs of collection, including reasonable
attorneys' fees, and interest thereon at the rates set forth above.
Interest hereunder shall be computed as provided in the Credit
Agreement.
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This Revolving Note is one of the Revolving Notes referred to in the
Agreement and is issued pursuant to and entitled to the benefits and security
of the Agreement to which reference is hereby made for a more complete
statement of the terms and conditions upon which the Revolving Loans evidenced
hereby were or are made and are to be repaid. This Revolving Note is subject
to certain restrictions on transfer or assignment as provided in the Agreement.
Protest, notice of protest, notice of dishonor, diligence or any other
formality are hereby waived by all parties bound hereon.
IN WITNESS WHEREOF, the Borrower has caused this Revolving Note to be
made, executed and delivered by its duly authorized representative as of the
date and year first above written, all pursuant to authority duly granted.
<TABLE>
<S> <C>
CROWN CRAFTS, INC.
WITNESS:
______________________ By: _________________________________
_____________________ Name: _______________________________
Title: ______________________________
[CORPORATE SEAL]
</TABLE>
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<PAGE> 74
EXHIBIT G
Form of Subsidiary Guaranty Agreement
THIS SUBSIDIARY GUARANTY AGREEMENT (the "Guaranty Agreement" or the
"Guaranty"), dated as of ________________, _______, is made by each of the
undersigned (each a "Guarantor" and collectively the "Guarantors") to
NATIONSBANK, NATIONAL ASSOCIATION (CAROLINAS), a national banking association,
as Lender (the "Lender").
W I T N E S S E T H:
WHEREAS, the Lender has agreed to provide to CROWN CRAFTS, INC., a
Georgia corporation (the "Borrower"), a revolving credit facility pursuant to
the terms of that certain Revolving Credit Agreement dated as of August 25,
1995 between the Borrower and the Lender (as from time to time amended,
modified or supplemented, the "Credit Agreement"); and
WHEREAS, each Guarantor is a Material Subsidiary of the Borrower and
is required pursuant to Section 6.23 of the Credit Agreement to guarantee to
the Lender payment of the Borrower's Liabilities (as hereinafter defined) in
accordance with the terms of this Agreement; and
WHEREAS, each Guarantor will materially benefit from the loans and
advances made and to be made, under the Credit Agreement, and each Guarantor is
willing to enter into this Guaranty to provide an inducement for the Lender to
make loans and advances thereunder.
NOW, THEREFORE, as required under the Credit Agreement and in order to
induce the Lender to make and continue loans and advances to the Borrower,
thereunder, each Guarantor agrees as follows:
1. DEFINITIONS. All capitalized terms not otherwise defined
herein shall have the meanings ascribed to such terms in the Credit Agreement.
2. GUARANTY. Each Guarantor hereby jointly and severally,
unconditionally, absolutely, continually and irrevocably guarantees to the
Lender the payment and performance in full of the Borrower's Liabilities (as
defined below). For all purposes of this Guaranty Agreement, "Borrower's
Liabilities" means (a) the Borrower's obligation to promptly pay in full, when
due or declared due, all Obligations and all other amounts pursuant to the
terms of the Credit Agreement, the Notes, and all other Loan Documents executed
in connection with the Credit Agreement heretofore, now or at any time
hereafter owing, arising, due or payable from the Borrower to the Lender,
including without limitation principal, interest, premium or fee (including,
but not limited to, loan fees and attorneys' fees and expenses), and (b) the
Borrower's prompt, full and faithful performance, observance and discharge of
each and every agreement, undertaking, covenant and provision to be performed,
observed or discharged by the Borrower under the Credit Agreement and all other
Loan Documents executed in connection
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therewith. Each Guarantor's obligations to the Lender under this Guaranty
Agreement are hereinafter collectively referred to as the "Guarantors'
Obligations"; provided, however, that the liability of each Guarantor with
respect to the Guarantors' Obligations shall not exceed at any time the Maximum
Amount (as hereinafter defined). The "Maximum Amount" means 95% of (i) the
fair salable value of the assets of a Guarantor as of the date hereof minus
(ii) the total liabilities of such Guarantor (including contingent liabilities,
but excluding liabilities of such Guarantor under this Guaranty and any other
Loan Documents executed by such Guarantor) as of the date hereof; provided
further, however, that if the calculation of the Maximum Amount in the manner
provided above as of the date payment is required of such Guarantor pursuant to
this Guaranty would result in a greater positive number, then the Maximum
Amount shall be deemed to be such greater positive number.
Each Guarantor agrees that it is jointly and severally, directly and
primarily liable for the Borrower's Liabilities.
3. PAYMENT. If the Borrower shall default in payment or
performance of any Borrower's Liabilities, whether principal, interest,
premium, fee (including, but not limited to, loan fees and attorneys' fees and
expenses), or otherwise, when and as the same shall become due, whether
according to the terms of the Credit Agreement, by acceleration, or otherwise,
or upon the occurrence of any other Event of Default under the Credit Agreement
that has not been cured or waived, then each Guarantor, upon demand thereof by
the Lender or its successors or assigns, will AS OF THE DATE OF THE LENDER'S
DEMAND fully pay to the Lender, subject to any restriction set forth in Section
2 hereof, an amount equal to all Guarantor's Obligations then due and owing.
4. UNCONDITIONAL OBLIGATIONS. This is a guaranty of payment and
not of collection. The Guarantors' Obligations under this Guaranty Agreement
shall be joint and several, absolute and unconditional irrespective of the
validity, legality or enforceability of the Credit Agreement, the Notes or any
other Loan Document or any other guaranty of the Borrower's Liabilities, and
shall not be affected by any action taken under the Credit Agreement, the Notes
or any other Loan Document, any other guaranty of the Borrower's Liabilities,
or any other agreement between the Lender and the Borrower or any other person,
in the exercise of any right or power therein conferred, or by any failure or
omission to enforce any right conferred thereby, or by any waiver of any
covenant or condition therein provided, or by any acceleration of the maturity
of any of the Borrower's Liabilities, or by the release or other disposal of
any security for any of the Borrower's Liabilities, or by the dissolution of
the Borrower or the combination or consolidation of the Borrower into or with
another entity or any transfer or disposition of any assets of the Borrower, or
by any extension or renewal of, or increase of the amounts available or
advanced under, the Credit Agreement, any of the Notes or any other Loan
Document, in whole or in part, or by any modification, alteration, amendment or
addition of or to the Credit Agreement, any of the Notes or any other Loan
Document, any other guaranty of the Borrower's Liabilities, or any other
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agreement between the Lender and the Borrower or any other Person, or by any
other circumstance whatsoever (with or without notice to or knowledge of any
Guarantor) which may or might in any manner or to any extent vary the
obligations of any Guarantor, or might otherwise constitute a legal or
equitable discharge of a surety or guarantor; it being the purpose and intent
of the parties hereto that this Guaranty Agreement and the Guarantors'
Obligations hereunder shall be absolute and unconditional under any and all
circumstances and shall not be discharged except by payment as herein provided.
5. CURRENCY AND FUNDS OF PAYMENT. Each Guarantor hereby
covenants and agrees that the Guarantors' Obligations will be paid in full as
herein provided in lawful currency of the United States of America and in
immediately available funds, regardless of any law, regulation or decree now or
hereafter in effect that might in any manner affect the Borrower's Liabilities
or the Guarantors' Obligations, or the rights of the Lender with respect
thereto as against the Borrower or any Guarantor, or cause or permit to be
invoked any alteration in the time, amount or manner of payment by the
Guarantor of any or all of the Borrower of any or all of the Borrower's
Liabilities or the Guarantors' Obligations.
6. EVENTS OF DEFAULT. In the event that (a) any Guarantor shall
file a petition to take advantage of any insolvency statute; (b) any Guarantor
shall commence or suffer to exist a proceeding for the appointment of a
receiver, trustee, liquidator or conservator of itself or of the whole or
substantially all of its property; (c) any Guarantor shall file a petition or
answer seeking reorganization or arrangement or similar relief under the
Federal bankruptcy laws or any other applicable law or statute of the United
States of America or any state or similar law of any other country; (d) a court
of competent jurisdiction shall enter an order, judgment or decree appointing a
custodian, receiver, trustee, liquidator or conservator of any Guarantor or of
the whole or substantially all of its properties, or approve a petition filed
against any Guarantor seeking reorganization or arrangement or similar relief
under the Federal bankruptcy laws or any other applicable law or statute of the
United States of America or any state or similar law of any other country, or
if, under the provisions of any other law for the relief or aid of debtors, a
court of competent jurisdiction shall assume custody or control of any
Guarantor or of the whole or substantially all of its properties and such
order, judgment, decree, approval or assumption remains unstayed or undismissed
for a period of thirty (30) days; (e) there is commenced against any Guarantor
any proceeding or petition seeking reorganization, arrangement or similar
relief under the Federal bankruptcy laws or any other applicable law or statute
of the United States of America or any state, which proceeding or petition
remains unstayed or undismissed for a period of thirty (30) days; (f) there
shall occur an Event of Default under the Credit Agreement; (g) any default
shall occur in the payment of amounts due hereunder; or (h) any other default
shall occur hereunder which remains uncured or unwaived for a period of thirty
(30) days (each of the foregoing being an "Event of Default" hereunder); then
notwithstanding any collateral that the Lender may
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<PAGE> 77
possess from Borrower or any Guarantor or any other guarantor of the Borrower's
Liabilities, or any other party, at the Lender's election and without notice
thereof or demand therefor, the Guarantors' Obligations shall immediately
become due and payable.
7. SUITS. Each Guarantor from time to time shall pay to the
Lender, on demand, at the Lender's place of business set forth in the Credit
Agreement, the Guarantors' Obligations as they become or are declared due, and
in the event such payment is not made when due, the Lender may proceed to suit
against any one or more or all of the Guarantors. At the lender's election,
one or more and successive or concurrent suits may be brought hereon by the
Lender against any one or more or all of the Guarantors, whether or not suit
has been commenced against the Borrower, any other guarantor of the Borrower's
Liabilities, or any other Person and whether or not the Lender has taken or
failed to take any other action to collect all or any portion of the Borrower's
Liabilities.
8. SET-OFF AND WAIVER. Each Guarantor waives any right to assert
against the Lender as a defense, counterclaim, set-off or cross claim, any
defense (legal or equitable) or other claim which such Guarantor may now or at
any time hereafter have against the Borrower, the Lender, without waiving any
additional defenses, set-offs, counterclaims or other claims otherwise
available to such Guarantor. If at any time hereafter the Lender employs
counsel for advice or other representation to enforce the Guarantors'
Obligations that arise out of an Event of Default, then, in any of the
foregoing events, all of the attorneys' fees arising from such services and all
expenses, costs and charges in any way or respect arising in connection
therewith or relating thereto shall be paid by the Guarantors to the Lender on
demand and shall constitute part of the Guarantors' Obligations hereunder.
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9. WAIVER; SUBROGATION.
(a) Each Guarantor hereby waives notice of the following events or
occurrences: (i) the Lender's acceptance of this Guaranty Agreement; (ii) the
Lender's heretofore, now or from time to time hereafter loaning monies or
giving or extending credit to or for the benefit of the Borrower, whether
pursuant to the Credit Agreement or the Notes or any amendments, modifications,
or supplements thereto, or replacements or extensions thereof; (iii) the Lender
or the Borrower heretofore, now or at any time hereafter, obtaining, amending,
substituting for, releasing, waiving or modifying the Credit Agreement, the
Notes or any other Loan Documents; (iv) presentment, demand, notices of
default, non-payment, partial payment and protest; (v) the Lender heretofore,
now or at any time hereafter granting to the Borrower (or any other party
liable to the Lender on account of the Borrower's Liabilities) any indulgence
or extensions of time of payment of the Borrower's Liabilities; and (vi) the
Lender heretofore, now or at any time hereafter accepting from the Borrower or
any other person, any partial payment or payments on account of the Borrower's
Liabilities or any collateral securing the payment thereof or the Agent
settling, subordinating, compromising, discharging or releasing the same. Each
Guarantor agrees that the Lender may heretofore, now or at any time hereafter
do any or all of the foregoing in such manner, upon such terms and at such
times as the Lender, in its sole and absolute discretion, deems advisable,
without in any way or respect impairing, affecting, reducing or releasing such
Guarantor from the Guarantors' Obligations, and each Guarantor hereby consents
to each and all of the foregoing events or occurrences.
(b) Each Guarantor hereby agrees that payment or performance by
such Guarantor of the Guarantors' Obligations under this Guaranty Agreement may
be enforced by the Lender upon demand by the Lender to such Guarantor without
the Lender being required, each Guarantor expressly waiving any right it may
have to require the Lender, to (i) prosecute collection or seek to enforce or
resort to any remedies against the Borrower or any other Guarantor or any other
guarantor of the Borrower's Liabilities, IT BEING EXPRESSLY UNDERSTOOD,
ACKNOWLEDGED AND AGREED TO BY EACH GUARANTOR THAT DEMAND UNDER THIS GUARANTY
AGREEMENT MAY BE MADE BY THE LENDER, AND THE PROVISIONS HEREOF ENFORCED BY THE
LENDER, EFFECTIVE AS OF THE FIRST DATE ANY EVENT OF DEFAULT OCCURS AND IS
CONTINUING UNDER THE CREDIT AGREEMENT, or (ii) seek to enforce or resort to any
remedies with respect to any security interests, Liens or encumbrances granted
to the Lender by the Borrower or any other Person on account of the Borrower's
Liabilities or any guaranty thereof. The Lender shall not have any obligation
to protect, secure or insure any of the foregoing security interests, Liens or
encumbrances on the properties or interests in properties subject thereto. The
Guarantors' Obligations shall in no way be impaired, affected, reduced, or
released by reason of the Lender's failure or delay to do or take any of the
acts, actions or things described in this Guaranty Agreement including, without
limiting the generality of the foregoing, those acts, actions and things
described in this Section 9.
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(c) Each Guarantor further agrees that to the extent the ruling in
Levit v. Ingersoll Rand Financial Corp. (In re V.N. Deprizio Construction
Co.), 874 F.2d 1186 (7th Cir. 1989), is found applicable by a court of
competent jurisdiction to the transactions contemplated by the Loan Documents
or any payments thereunder, no Guarantor shall have any right of subrogation,
reimbursement or indemnity, nor any right of recourse to security for the
Borrower's Liabilities. This waiver is expressly intended to prevent the
existence of any claim in respect to such reimbursement by the Guarantor
against the estate of Borrower within the meaning of Section 101 of the
Bankruptcy Code, and to prevent the Guarantor from constituting a creditor of
Borrower in respect of such reimbursement within the meaning of Section 547(b)
of the Bankruptcy Code in the event of a subsequent case involving the
Borrower.
10. EFFECTIVENESS; ENFORCEABILITY. This Guaranty Agreement shall
be effective as of the date of the initial Advance under the Credit Agreement
and shall continue in full force and effect until the Borrower's Obligations
are fully paid and the Credit Agreement has terminated. The Lender shall give
each Guarantor written notice of such termination at each Guarantor's address
set forth in the Credit Agreement. This Guaranty Agreement shall be binding
upon and inure to the benefit of each Guarantor, the Lender and their
respective successors and assigns. Notwithstanding the foregoing, no Guarantor
may, without the prior written consent of the Lender, assign any rights,
powers, duties or obligations hereunder. Any claim or claims that the Lender
may at any time hereafter have against any Guarantor under this Guaranty
Agreement may be asserted by the Lender by written notice directed to any one
or more or all of the Guarantors at the address specified in the Credit
Agreement.
11. REPRESENTATIONS AND WARRANTIES. Each Guarantor represents and
warrants to the Lender that it is duly authorized to execute, deliver and
perform this Guaranty Agreement, that this Guaranty Agreement is legal, valid,
binding and enforceable against such Guarantor in accordance with its terms
except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles; and that such
Guarantor's execution, delivery and performance of this Guaranty Agreement do
not violate or constitute a breach of its certificate of incorporation or other
documents of corporate governance or any agreement to which such Guarantor is a
party, or any applicable laws.
12. EXPENSES. Each Guarantor agrees to be liable for the payment
of all reasonable fees and expenses, including attorney's fees, incurred by the
Lender in connection with the enforcement of this Guaranty Agreement.
13. REINSTATEMENT. Each Guarantor agrees that this Guaranty
Agreement shall continue to be effective or be reinstated, as the case may be,
at any time payment received by the Lender under the
74
<PAGE> 80
Credit Agreement or this Guaranty Agreement is rescinded or must be restored
for any reason.
14. COUNTERPARTS. This Guaranty Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original as
against any party whose signature appears thereon, and all of which shall
constitute one and the same instrument.
15. RELIANCE. Each Guarantor represents and warrants to the
Lender that (a) such Guarantor has adequate means to obtain from Borrower, on a
continuing basis, information concerning Borrower and Borrower's financial
condition and affairs and has full and complete access to Borrower's books and
records, (b) such Guarantor is not, nor in the future will it be, relying on
the Lender, or its employees, agents or other representatives, to provide such
information, (c) such Guarantor is executing this Guaranty Agreement freely and
deliberately, and understands the obligations and financial risk undertaken by
providing this Guaranty, (d) such Guarantor has relied solely on the
Guarantor's own independent investigation, appraisal and analysis of Borrower
and Borrower's financial condition and affairs in deciding to provide this
Guaranty and is fully aware of the same, and (e) such Guarantor has not
depended or relied on the Lender, its employees, agents or representatives, for
any information whatsoever concerning Borrower or Borrower's financial
condition and affairs or other matters material to such Guarantor's decision to
provide this Guaranty or for any counselling, guidance, or special
consideration or any promise therefor with respect to such decision. Each
Guarantor agrees that the Lender has no duty or responsibility whatsoever, now
or in the future, to provide to any Guarantor any information concerning
Borrower or Borrower's financial condition and affairs, and that, if such
Guarantor receives any such information from the Lender or its employees,
agents or other representatives, such Guarantor will independently verify the
information and will not rely on the Lender or its employees, agents or other
representatives, with respect to such information.
16. TERMINATION. This Guaranty Agreement and all obligations of
the Guarantors hereunder shall terminate without delivery of any instrument or
performance of any act by any party on the date when all of the Obligations
have been fully paid and the Credit Agreement has terminated.
17. GOVERNING LAW; WAIVERS OF TRIAL BY JURY, ETC.
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF GEORGIA APPLICABLE TO
CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH STATE.
(b) EACH PARTY HEREBY EXPRESSLY AND IRREVOCABLY AGREES
AND CONSENTS THAT ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREIN
MAY BE INSTITUTED IN ANY STATE OR FEDERAL COURT SITTING IN THE STATE
OF GEORGIA, UNITED STATES OF AMERICA AND, BY THE EXECUTION AND
DELIVERY OF THIS AGREEMENT,
75
<PAGE> 81
EXPRESSLY WAIVES ANY OBJECTION THAT IT MAY HAVE NOW OR HEREAFTER TO
THE LAYING OF THE VENUE OR TO THE JURISDICTION OF ANY SUCH SUIT,
ACTION OR PROCEEDING, AND IRREVOCABLY SUBMITS GENERALLY AND
UNCONDITIONALLY TO THE JURISDICTION OF ANY SUCH COURT IN ANY SUCH
SUIT, ACTION OR PROCEEDING.
(c) EACH PARTY AGREES THAT SERVICE OF PROCESS MAY BE MADE
BY PERSONAL SERVICE OF A COPY OF THE SUMMONS AND COMPLAINT OR OTHER
LEGAL PROCESS IN ANY SUCH SUIT, ACTION OR PROCEEDING, OR BY REGISTERED
OR CERTIFIED MAIL (POSTAGE PREPAID) TO THE ADDRESS OF SUCH PARTY
PROVIDED IN SECTION 10.2 OF THE CREDIT AGREEMENT OR BY ANY OTHER
METHOD OF SERVICE PROVIDED FOR UNDER THE APPLICABLE LAWS IN EFFECT IN
THE STATE OF GEORGIA.
(d) NOTHING CONTAINED IN SUBSECTIONS (B) OR (C) HEREOF
SHALL PRECLUDE ANY PARTY FROM BRINGING ANY SUIT, ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE OTHER LOAN
DOCUMENTS IN THE COURTS OF ANY PLACE WHERE ANY OTHER PARTY OR ANY OF
SUCH PARTY'S PROPERTY OR ASSETS MAY BE FOUND OR LOCATED. TO THE
EXTENT PERMITTED BY THE APPLICABLE LAWS OF ANY SUCH JURISDICTION, EACH
PARTY HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT
AND EXPRESSLY WAIVES, IN RESPECT OF ANY SUCH SUIT, ACTION OR
PROCEEDING, THE JURISDICTION OF ANY OTHER COURT OR COURTS WHICH NOW OR
HEREAFTER, BY REASON OF ITS PRESENT OR FUTURE DOMICILE, OR OTHERWISE,
MAY BE AVAILABLE TO IT.
(e) IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY
RIGHTS OR REMEDIES UNDER OR RELATED TO THIS AGREEMENT OR ANY
AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR THAT MAY IN
THE FUTURE BE DELIVERED IN CONNECTION WITH THE FOREGOING, EACH PARTY
HEREBY AGREES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, THAT ANY
SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE
A JURY AND EACH PARTY HEREBY WAIVES, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, ANY OBJECTION THAT IT MAY HAVE THAT EACH ACTION OR
PROCEEDING HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
[SIGNATURE PAGE FOLLOWS.]
76
<PAGE> 82
IN WITNESS WHEREOF, the parties have duly executed this Agreement on
the day and year first written above.
GUARANTORS:
_______________________________
By: ___________________________
Name: _________________________
Title: ________________________
_______________________________
By: ___________________________
Name: _________________________
Title: ________________________
LENDER:
NATIONSBANK, NATIONAL ASSOCIATION (CAROLINAS)
By:_____________________________
Name:___________________________
Title:__________________________
77
<PAGE> 83
EXHIBIT H
Form of Opinion of Borrower's Counsel
[Date]
NationsBank, National Association (Carolinas)
Corporate Textile & Apparel Group
100 North Tryon Street, NC1-007-08-11
Charlotte, North Carolina 28255
Re: $15,000,000 Revolving Credit Agreement between NationsBank, National
Association (Carolinas), as Lender, and Crown Crafts, Inc., as
Borrower
Ladies and Gentlemen:
I have acted as internal counsel to Crown Crafts, Inc., a Georgia
corporation (the "Company"), in connection with the Revolving Loan in the
amount of $15,000,000 (the ("Loan") being made available to the Company by you
on this date pursuant to the Revolving Credit Agreement of even date herewith
among you and the Company (the "Credit Agreement").
This opinion is being delivered in accordance with the condition set
forth in section 4.1(a)(ii) of the Credit Agreement. All capitalized terms not
otherwise defined herein shall have the meanings provided therefor in the
Credit Agreement.
As such counsel, I have reviewed the Credit Agreement and the
revolving Note. The foregoing documents are collectively referred to
hereinafter as the "Loan Documents."
For purposes of the opinions expressed below, I have assumed that all
natural persons executing the Loan Documents have legal capacity to do so, all
signatures (other than those of the Company) on all documents submitted to us
are genuine, all documents submitted to us as originals are authentic, and all
documents submitted to us as certified copies or photocopies conform to the
original documents, which themselves are authentic.
In addition, for purposes of giving this opinion, I have examined
corporate records of the Company, certificates of public officials,
certificates of appropriate officials of the Company and such other documents
or made such inquiries as I have deemed appropriate. However, as used herein,
the phrase "to the best of my knowledge" means my actual knowledge, without
further investigation.
Based upon and subject to the foregoing, it is my opinion that:
<PAGE> 84
NationsBank, National Association (Carolinas)
[Date]
Page 2
1. The Company is a corporation duly organized, validly existing
and in good standing under the laws of its state of Georgia and is duly
qualified to transact business as a foreign corporation and is in good standing
in all other jurisdictions in which the nature of its business requires such
qualification and the failure to be so qualified would reasonably be likely to
result in a Material Adverse Effect. The Company has full corporate power and
authority to own its assets and conduct the businesses in which it is now
engaged and has full corporate power and authority to enter into each of the
Loan Documents to which it is a party and to perform its obligations
thereunder.
2. Each of the Loan Documents to which the Company is a party has
been duly authorized by the Board of Directors of the Company, duly executed
and delivered by the Company, and constitutes the legal, valid and binding
obligation, agreement, instrument or conveyance, as the case may be, of the
Company, enforceable against the Company in accordance with its respective
terms, except (i) as the enforceability thereof may be limited by applicable
bankruptcy, insolvency, reorganization and other similar laws relating to or
affecting creditors' rights generally and (ii) as the enforceability of the
remedial provisions thereof may be limited by general equitable principles:
provided, however, the application of such equitable principles or limitations
of law does not materially interfere with the practical realization of the
benefits and security, if any, intended to be conferred under the Loan
Documents.
3. Neither the execution or delivery of, nor performance by the
Company of its obligations under, the Loan Documents (a) does or will conflict
with, violate or constitute a breach of (i) the charter or bylaws of the
Company,(ii) any laws, rules or regulations applicable to the Company
("Applicable Law"), or (iii) any contract, agreement, indenture, lease,
instrument, other document, judgment, writ, determination, order or decree to
which the Company is a party or by which the Company or any of its properties
is bound, (b) requires the prior consent of, notice to or filing with any court
or governmental authority, or (c) to the best of my knowledge, does or will
result in the creation or imposition of any lien, pledge, charge or encumbrance
of any nature upon or with respect to any of the properties of the Company,
where such breach would reasonably be likely to result in a Material Adverse
Effect.
4. There is no pending or, to the best of my knowledge,
threatened, action, suit, investigation or proceeding, nor is there any basis
therefor, before or by any court, or governmental department, commission board,
bureau, instrumentality, agency or arbitral authority, (i) which calls into
question the validity or enforceability of any of the Loan Documents, or the
titles to their
<PAGE> 85
NationsBank, National Association (Carolinas)
[Date]
Page 3
respective officers or authority of any officers of the Company or (ii) an
adverse result in which would reasonably be likely to have a Material Adverse
Effect, including, without limitation, any action, suit, investigation, or
proceeding under the environmental or labor law.
I am not expressing any opinion as to any mater relating to any
jurisdiction other than the laws of the State of Georgia and the laws of the
United States of America and I assume no responsibility as to the applicability
of the laws of any other jurisdiction as to the subject transaction or the
effect of such laws thereon.
The opinions contained herein are rendered only as of the date hereof
and I undertake no obligation to update such opinions after the date hereof.
The opinions contained herein are rendered solely for your information
in connection with the transactions contemplated under the Loan Documents and
may not be relied upon in any manner by any other person, entity or agency, or
by you for any other purpose. The opinions herein shall not be quoted or
otherwise included, summarized or referred to in any publication or document,
in whole or in part, for any purposes whatsoever, or furnished to any person,
entity or agency, except as may be required by you by applicable law or
regulation or request of regulatory agencies to which you are subject.
Very truly yours,
<PAGE> 86
EXHIBIT I
Form of Compliance Certificate
To: NationsBank, National Association (Carolinas)
Independence Center, 15th Floor, NC1 001-15-04
Charlotte, North Carolina 28255
Attention: Ms. Laura Thompson
Telephone: (704) 386-4197
Telefacsimile: (704) 386-8694
Reference is hereby made to the Revolving Credit Agreement dated as of
August 25, 1995 (the "Agreement") among Crown Crafts, Inc., a Georgia
corporation (the "Borrower"), and NationsBank, National Association
(Carolinas), as Lender ("Lender"). Capitalized terms used but not otherwise
defined herein shall have the respective meanings therefor set forth in the
Agreement. The undersigned, a duly authorized and acting Authorized
Representative, hereby certifies to you as of __________ (the "Determination
Date") as follows:
1. Applicable Interest Addition/Applicable Unused Fee.
A. Based on the calculation set forth below, the
Applicable Interest Addition as of the latest Determination
Date is ___%.
B. Based on the calculation set forth below, the
Applicable Unused Fee as of the latest Determination Date is
___%.
2. Covenant Calculations:
A. Compliance with Section 7.1: Consolidated Leverage Ratio
<TABLE>
<S> <C> <C> <C> <C>
1. Consolidated Funded Indebtedness
a. Indebtedness for
Borrowed Money $_________
b. Capital Leases $_________
c. Guaranties $_________
d. a. + b. + c. $__________
2. Consolidated Tangible Net Worth $__________
3. A.1. + A.2. $__________
4. Ratio of A.1. to A.3. ___________
</TABLE>
REQUIRED: Line A.4. must not be greater
than .60 to 1.00.
B. Compliance with Section 7.2: Consolidated Fixed Charge
Coverage Ratio
1. Consolidated EBIT
79
<PAGE> 87
<TABLE>
<S> <C> <C> <C> <C>
a. Consolidated Net
Income $_________
b. Consolidated
Interest Expense $_________
c. taxes $_________
d. Consolidated
Lease Expense $_________
e. a. + b. + c. + d. $__________
2. Consolidated Fixed Charges
a. Consolidated
Interest Expense $_________
b. Consolidated
Lease Expense $_________
d. a. + b. $__________
6. Ratio of B.1. to B.2. ___________
REQUIRED: Line B.6. must not be less
than 2.00 to 1.00.
C. Compliance with Section 10.3: Consolidated Shareholders' Equity
1. Consolidated Shareholders' Equity $__________
REQUIRED: Line C.1. must not be less than (1) $80,000,000,
less Permitted Stock Repurchases, at the Closing Date and (2)
thereafter, line d. below
a. Consolidated Net
Worth for immediately
preceding Fiscal Year $__________
b. Consolidated Net Income
for then ending fiscal quarter
(no deduction for net loss) $__________
c. Multiply Line b. by 50% $__________
d. Increases in stated capital
and additional paid-in
capital accounts from equity
issuances, etc. $__________
e. a. + c. + d. $__________
D. Compliance with Section 7.4: Cash Flow Ratio:
1. Consolidated Funded Indebtedness $__________
2. Consolidated Cash Flow
a. Consolidated Net
Income $_________
</TABLE>
80
<PAGE> 88
b. amortization $_________
c. depreciation $_________
d. non-cash charges
and expenses $_________
e. cash distributions
on capital stock $_________
f. other non-cash
gains $_________
g. a. + b. + c. + d. - e. - f. $__________
3. Ratio of D.1. to D.2. ___________
REQUIRED: Line D.3. must not be greater than 6.00 to
1.00.
3. No Default
A. Since __________ (the date of the last
similar certification), (a) the Borrower has not defaulted in
the keeping, observance, performance or fulfillment of its
obligations pursuant to any of the Loan Documents; and (b) no
Default or Event of Default specified in Article VIII of the
Agreement has occurred and is continuing.
B. If a Default or Event of Default has occurred
since __________ (the date of the last similar certification),
the Borrowers propose to take the following action with
respect to such Default or Event of Default:
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
_________________________________________________________.
(Note, if no Default or Event of Default has
occurred, insert "Not Applicable").
The Determination Date is the date of the last required financial
statements submitted to the Lender in accordance with Section 6.1 of the
Agreement.
IN WITNESS WHEREOF, I have executed this Certificate this _____ day of
__________, 19___.
By:________________________________
Authorized Representative
Name:______________________________
Title:_____________________________
81
<PAGE> 89
SCHEDULE 5.4
SUBSIDIARIES AND OWNERSHIP INTERESTS
<TABLE>
<CAPTION>
PERCENT OF
OWNERSHIP
----------
<S> <C>
Benn Corp, a North Carolina corporation 100%
Crown Crafts Home Furnishings, Inc., a New York corporation 100%
Crown Crafts Home Furnishings of Illinois, Inc., a Delaware corporation 100%
Crown Crafts Home Furnishings of California, Inc., a California corporation 100%
Crown Crafts International, Inc., a Georgia corporation 100%
G.W. Stores, Inc., a North Carolina corporation 100%
Textile, Inc., a North Carolina corporation 100%
Hans Benjamin Furniture, Inc., a South Carolina corporation 51%
</TABLE>
<PAGE> 90
Schedule 5.6
Liabilities
None
<PAGE> 91
SCHEDULE 5.16
ERISA MATTERS
<TABLE>
<S> <C>
Employee Benefit Plan
Crown Crafts, Inc. Employee Stock Ownership Plan
Crown Crafts, Inc. Health Benefit Plan
Crown Crafts, Inc. Group Term Life Insurance Plan
Crown Crafts, Inc. Executive Life Insurance Plan
Crown Crafts, Inc. Dental Insurance Plan
Blue Cross/Blue Shield Health Benefit Plan maintained for employees of Goodwin
Weavers Division
Textile, Inc.:
Principal Mutual Life Insurance Co. - Health Benefit Plan
Principal Mutual Life Insurance Co. - Group Term Life Insurance Plan
Employee Benefit Plan Terminations
The Blowing Rock Crafts, Inc. Profit Sharing Plan (the Plan)
was terminated on September 30, 1992 and 100% of the Plan assets
were distributed to the Plan participants in October 1992. The Plan
participants still employed by Blowing Rock Crafts, Inc. On March
28, 1993 were enrolled in The Crown Crafts, Inc. Employee Stock
Ownership Plan on March 28, 1993. Blowing Rock Crafts, Inc.
Received a favorable determination letter from the Internal Revenue
Service on the termination of this plan.
</TABLE>
<PAGE> 92
SCHEDULE 7.5
LIENS
<TABLE>
<CAPTION>
=================================================================================================
TEXTILE, INC. LOAN BALANCE
CREDITOR SECURITY AT 7/31/95
- -------------------------------------------------------------------------------------------------
<S> <C> <C>
F.E.W. Partners Real Property $273,623.95
Somet of America Five (5) Somet rapier weaving $156,644.61
machines
Somet of America Six (6) Somet rapier weaving $198,520.06
machines
Staubli Five (5) jacquard heads $168,795.78
Staubli Six (6) jacquard heads $286,057.95
Yadkin Valley Bank & Trust Machinery - second lien $184,443.67
=================================================================================================
</TABLE>
<PAGE> 1
EXHIBIT 10(d)
[EXECUTION COPY]
================================================================================
REVOLVING CREDIT AGREEMENT
by and between
CROWN CRAFTS, INC.
as Borrower,
WACHOVIA BANK OF GEORGIA, N.A.
as Lender
August 25, 1995
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C> <C>
ARTICLE I
Definitions and Terms
1.1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Accounting Terms. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
1.3 UCC Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE II
The Revolving Credit Facility
2.1. Revolving Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
2.2. Payment of Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
2.3. Payment of Principal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
2.4. Non-Conforming Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
2.5. Revolving Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
2.6. Reductions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
2.7. Conversions and Elections of Subsequent Interest Periods . . . . . . . . . . . . . . . . . . . 21
2.8. Unused Fee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
2.9. Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
2.10. Extension of Revolving Credit Termination Date. . . . . . . . . . . . . . . . . . . . . . . . . 22
ARTICLE III
Yield Protection and Illegality
3.1. Additional Costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
3.2. Suspension of Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
3.3. Illegality. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
3.4. Compensation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
3.5. Alternate Loan and Lender . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
3.6. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
ARTICLE IV
Conditions to Making Loans
4.1. Conditions of Initial Advance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
4.2. Conditions of All Revolving Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
ARTICLE V
Representations and Warranties
5.1. Organization and Authority. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
5.2. Loan Documents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
5.3. Solvency. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
</TABLE>
i
<PAGE> 3
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
5.4. Subsidiaries and Stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
5.5. Ownership Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
5.6. Financial Condition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
5.7. Title to Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
5.8. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
5.9. Other Agreements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
5.10. Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
5.11. Margin Stock. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
5.12. Investment Company; Public Utility Holding Company . . . . . . . . . . . . . . . . . . . . . . 33
5.13. Patents, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
5.14. No Untrue Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
5.15. No Consents, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
5.16. Employee Benefit Plans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
5.17. No Default. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
5.18. Hazardous Materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
5.19. Employment Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
ARTICLE VI
Affirmative Covenants
6.1. Financial Reports, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
6.2. Maintain Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
6.3. Existence, Qualification, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
6.4. Regulations and Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
6.5. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
6.6. True Books. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
6.7. Payment of Other Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
6.8. Right of Inspection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
6.9. Observe all Laws. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
6.10. Governmental Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
6.11. Covenants Extending to Other Persons. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
6.12. Officer's Knowledge of Default. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
6.13. Suits or Other Proceedings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
6.14. Notice of Discharge of Hazardous Material or Environmental Complaint. . . . . . . . . . . . . . 39
6.15. Environmental Compliance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
6.16. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
6.17. Further Assurances. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
6.18. Employee Benefit Plans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
6.19. Termination Events. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
6.20. ERISA Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
6.21. Continued Operations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
6.22. Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
6.23. New Subsidiaries. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
</TABLE>
ii
<PAGE> 4
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE VII
Negative Covenants
7.1. Consolidated Leverage Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
7.2. Consolidated Fixed Charge Coverage Ratio. . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
7.3. Consolidated Shareholders' Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
7.4. Consolidated Cash Flow Ratio. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
7.5. Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
7.6. Transfer of Assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
7.7. Investments; Acquisitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
7.8. Merger or Consolidation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
7.9. Restricted Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
7.10. Transactions with Affiliates. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
7.11. Compliance with ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
7.12. Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
7.13. Limitations on Sales and Leasebacks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
7.14. Dissolution, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
ARTICLE VIII
Events of Default and Acceleration
8.1. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
8.2. Lender to Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
8.3. Cumulative Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
8.4. No Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
8.5. Allocation of Proceeds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
ARTICLE IX
Miscellaneous
9.1. Assignments and Participations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
9.2. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
9.3. Survival. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
9.4. Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
9.5. Amendments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
9.6. Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
9.7. Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
9.8. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
9.9. Headings and References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
9.10. Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
9.11. Entire Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
9.12. Agreement Controls. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
9.13. Usury Savings Clause. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
9.14. Governing Law; etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
</TABLE>
iii
<PAGE> 5
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
EXHIBIT A Commitment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
EXHIBIT B Form of Assignment and Acceptance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
EXHIBIT C Notice of Appointment (or Revocation) of
Authorized Representative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
EXHIBIT D Form of Borrowing Notice. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
EXHIBIT E Form of Interest Rate Selection Notice . . . . . . . . . . . . . . . . . . 66
EXHIBIT F Form of Revolving Note. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
EXHIBIT G Form of Subsidiary Guaranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
EXHIBIT H Form of Opinion of Borrower's Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
EXHIBIT I Form of Compliance Certificate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Schedule 5.4 Subsidiaries and Ownership Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
Schedule 5.6 Liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
Schedule 5.16 ERISA Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
Schedule 7.5 Liens. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
</TABLE>
iv
<PAGE> 6
REVOLVING CREDIT AGREEMENT
THIS REVOLVING CREDIT AGREEMENT, dated as of August 25, 1995 (the
"Agreement"), is made by and among CROWN CRAFTS, INC., a Georgia corporation
having its principal place of business in Atlanta, Georgia (the "Borrower"),
WACHOVIA BANK OF GEORGIA, N.A., a national banking association organized under
the laws of the United States ("Wachovia"), in its capacity as Lender (the
"lender"), and each other lender which may hereafter execute and deliver an
instrument of assignment with respect to this Agreement pursuant to Section 9.1
hereof (hereinafter such lenders may be referred to individually as a "Lender"
or collectively as the "Lenders");
W I T N E S S E T H:
WHEREAS, the Borrower has requested that the Lender make available to
the Borrower a revolving credit facility of up to $15,000,000, the proceeds of
such facilities to be used to finance Acquisitions permitted hereunder, general
working capital needs and other general corporate purposes of the Borrower; and
WHEREAS, the Lender is willing to make the revolving credit facility
available to the Borrower upon the terms and conditions set forth herein;
NOW, THEREFORE, the Borrower and the Lender hereby agree as follows:
ARTICLE I
Definitions and Terms
1.1. Definitions. For the purposes of this Agreement, in addition
to the definitions set forth above, the following terms shall have the
respective meanings set forth below:
"Acquisition" means the non-hostile acquisition of (i) a
controlling equity interest in another Person (including the purchase
of an option, warrant or convertible or similar type security to
acquire such a controlling interest at the time it becomes exercisable
by the holder thereof), whether by purchase of such equity interest or
upon exercise of an option or warrant for, or conversion of securities
into, such equity interest, or (ii) assets of another Person for which
the Cost of Acquisition equals or exceeds two percent (2%) of
Consolidated Total Assets determined as of the last day of the fiscal
quarter of the Borrower immediately preceding the date of the
agreement related to such Acquisition;
<PAGE> 7
"Advance" means a borrowing under the Revolving Credit
Facility consisting of a Base Rate Loan or a Eurodollar Rate Loan;
"Affiliate" means any Person (i) which directly or indirectly
through one or more intermediaries controls, or is controlled by, or
is under common control with the Borrower; or (ii) which beneficially
owns or holds 10% or more of any class of the outstanding voting stock
(or in the case of a Person which is not a corporation, 10% or more of
the equity interest) of the Borrower or any Person described in clause
(i) above; or 10% or more of any class of the outstanding voting stock
(or in the case of a Person which is not a corporation, 10% or more of
the equity interest) of which is beneficially owned or held by the
Borrower. The term "control" means the possession, directly or
indirectly, of the power to direct or cause the direction of the
management and policies of a Person, whether through ownership of
voting stock, by contract or otherwise;
"Applicable Interest Addition" means for each Loan that
percent per annum set forth below, which shall be based upon the
Consolidated Funded Debt Ratio for the most recent Determination Date
as specified below:
<TABLE>
<CAPTION>
Applicable
Interest Addition
-----------------
Consolidated Base Eurodollar
Funded Debt Ratio Rate Rate
----------------- ---------- ----------
<S> <C> <C> <C>
(a) Greater than .55
to 1.00 0 .650%
(b) Less than or equal to
.55 to 1.00 and greater
than .50 to 1.00 0 .500%
(c) Less than or equal to
.50 to 1.00 0 .425%
</TABLE>
The Applicable Interest Addition shall be established at the end of
each fiscal quarter of the Borrower (the "Determination Date"). Any
change in the Applicable Interest Addition following each
Determination Date shall be determined based upon the computations set
forth in the certificate furnished to the Lender pursuant to Section
6.1(a)(ii) and Section 6.1(b)(ii) hereof, subject to review and
approval of such computations by the Lender and shall be effective (a)
in the case of Base Rate Loans, from the date such certificate is
received (or, if earlier, the date such certificate was required to be
delivered), and (b) in the case of Eurodollar Rate Loans, for all
Interest Periods commencing on or after the date such certificate is
received (or, if earlier, the date such certificate was required to be
delivered), and in
2
<PAGE> 8
each case, until the date a new certificate is delivered or is
required to be delivered, whichever shall first occur, and a new
Applicable Interest Addition becomes effective;
"Applicable Unused Fee" means that percent per annum set forth
below, which shall be based upon the Consolidated Funded Debt Ratio
for the Four-Quarter Period most recently ended as specified below:
<TABLE>
<CAPTION>
Applicable
Consolidated Unused
Funded Debt Ratio Fee
----------------- ----------
<S> <C> <C>
(a) Greater than .55 to 1.00 .2500%
(b) Less than or equal to .55 to 1.00
and greater than .50 to 1.00 .1875%
(c) Less than or equal
to .50 to 1.00 .1500%
</TABLE>
The Applicable Unused Fee shall be established at the end of each
fiscal quarter of the Borrower (the "Determination Date"). Any change
in the Applicable Unused Fee following each Determination Date shall
be determined based upon the computations set forth in the certificate
furnished to the Lender pursuant to Section 6.1(a)(ii) and Section
6.1(b)(ii) hereof, subject to review and approval of such computations
by the Lender and shall be effective from the date such certificate is
received (or, if earlier, the date such certificate was required to be
delivered) until the date a new certificate is delivered or is
required to be delivered, whichever shall first occur, and a new
Applicable Unused Fee becomes effective;
"Assignment and Acceptance" shall mean an Assignment and
Acceptance in the form of Exhibit B (with blanks appropriately filled
in) delivered to the Lender in connection with an assignment of a
Lender's interest under this Agreement pursuant to Section 9.1 hereof;
"Authorized Representative" means any of the President or
Vice President of the Borrower or, with respect to financial matters,
the chief financial officer of the Borrower or any other person
expressly designated by the Board of Directors of the Borrower (or the
appropriate committee thereof) as an Authorized Representative of the
Borrower, as set forth from time to time in a certificate in the form
attached hereto as Exhibit C;
"Base Rate" means the per annum rate of interest equal to the
sum of (a) the greater of (i) the Prime Rate or (ii) the Federal Funds
Effective Rate plus one-half of one percent (1/2%) plus (b) the
Applicable Interest Addition. Any change in the Base Rate resulting
from a change in the Prime Rate or the Federal Funds Effective Rate
shall become effective as of
3
<PAGE> 9
12:01 A.M. of the Business Day on which each such change occurs. The
Base Rate is a reference rate used by Lender in determining interest
rates on certain loans and is not intended to be the lowest rate of
interest charged on any extension of credit to any debtor;
"Base Rate Loan" means a Loan or a Segment of a Loan for which
the rate of interest is determined by reference to the Base Rate;
"Bernstein Family" means Philip Bernstein and his wife, their
children and their children's spouses and their grandchildren;
"Board" means the Board of Governors of the Federal Reserve
System (or any successor body);
"Borrower's Account" means a demand deposit account number
14864502 or any successor account with the Lender, which may be
maintained at one or more offices of the Lender or an agent of the
Lender;
"Borrowing Notice" means the notice delivered by an Authorized
Representative in connection with an Advance under the Revolving
Credit Facility, in the form attached hereto as Exhibit D and
incorporated herein by reference;
"Business Day" means, (i) with respect to any Base Rate Loan,
any day which is not a Saturday, Sunday or a day on which banks in the
State of Georgia are authorized or obligated by law, executive order
or governmental decree to be closed and, (ii) with respect to any
Eurodollar Rate Loan, any day which is a Business Day, as described
above, and on which the relevant international financial markets are
open for the transaction of business contemplated by this Agreement in
London, England and Atlanta, Georgia;
"Capital Leases" means all leases which have been or should be
capitalized in accordance with GAAP as in effect from time to time
including Statement No. 13 of the Financial Accounting Standards Board
and any successor thereof;
"Closing Date" means the date as of which this Agreement is
executed by the Borrower and the Lender and on which the conditions
set forth in Section 4.1 hereof have been satisfied;
"Code" means the Internal Revenue Code of 1986, as amended,
and any final or temporary regulations promulgated thereunder;
"Consistent Basis" in reference to the application of GAAP
means the accounting principles observed in the period referred to are
comparable in all material respects to those applied in the
preparation of the audited financial statements of the Borrower first
delivered to the Lender hereunder;
4
<PAGE> 10
"Consolidated Cash Flow" means, with respect to the Borrower
and its Subsidiaries for any Four-Quarter Period, the sum of, without
duplication, (i) Consolidated Net Income, plus (ii) amortization
accrued during such period, plus (iii) without duplication, any
depreciation during such period, plus (iv) all other non-cash charges
or expenses accrued during such period minus (v) all cash
distributions on any capital stock of the Borrower or its
Subsidiaries, minus (vi) all other non-cash gains otherwise included
in Consolidated Net Income during such period, all determined on a
consolidated basis in accordance with GAAP applied on a Consistent
Basis;
"Consolidated EBIT" means, with respect to the Borrower and
its Subsidiaries for any Four-Quarter Period ending on the date of
computation thereof, the sum of, without duplication, (i) Consolidated
Net Income, (ii) Consolidated Interest Expense, (iii) taxes on income
and (iv) Consolidated Lease Expense, all determined on a consolidated
basis in accordance with GAAP applied on a Consistent Basis;
"Consolidated Fixed Charge Coverage Ratio" means, with respect
to the Borrower and its Subsidiaries for any Four-Quarter Period
ending on the date of computation thereof, the ratio of (i)
Consolidated EBIT for such period, to (ii) Consolidated Fixed Charges
for such period;
"Consolidated Fixed Charges" means, with respect to Borrower
and its Subsidiaries for any Four-Quarter Period ending on the date of
computation thereof, the sum of, without duplication, (i) Consolidated
Interest Expense plus (ii) Consolidated Lease Expense, all determined
on a consolidated basis in accordance with GAAP applied on a
Consistent Basis;
"Consolidated Funded Debt Ratio" means, with respect to the
Borrower and its Subsidiaries, the ratio of (i) Consolidated Funded
Indebtedness, to (ii) the sum of Consolidated Funded Indebtedness plus
Consolidated Shareholders' Equity;
"Consolidated Funded Indebtedness" means the sum of (a) all
Indebtedness for Borrowed Money of the Borrower and its Subsidiaries,
plus (b) all obligations of the Borrower and its Subsidiaries in
connection with Capital Leases, plus (c) all direct and indirect
guaranties by the Borrower or any Subsidiary of Indebtedness of any
Person other than a Guarantor, all determined on a consolidated basis;
"Consolidated Interest Expense" means, with respect to any
period of computation thereof, the gross interest expense of the
Borrower and its Subsidiaries, including without limitation (i) the
current amortized portion of debt discounts to the extent included in
gross interest expense, (ii) the current amortized portion of all fees
(including, without limitation, fees payable in respect of a Hedging
Agreement) payable in connection with the incurrence of Indebtedness
to the extent included in gross interest expense and (iii) the
5
<PAGE> 11
portion of any payments made in connection with Capital Leases
allocable to interest expense, all determined on a consolidated basis
in accordance with GAAP applied on a Consistent Basis;
"Consolidated Lease Expense" means for any period all amounts
paid or accrued by the Borrower and its Subsidiaries during such
period under operating leases (whether or not constituting rental
expense) determined on a consolidated basis;
"Consolidated Leverage Ratio" means, as of the date of
computation thereof, the ratio of (i) Consolidated Funded Indebtedness
as of such date to (ii) the sum of Consolidated Tangible Net Worth
plus Consolidated Funded Indebtedness as of such date;
"Consolidated Net Income" means, for any period of computation
thereof, the Net Income of the Borrower and its Subsidiaries
determined on a consolidated basis, but excluding (a) extraordinary
items and (b) any equity interests of the Borrower or any Subsidiary
in the unremitted earnings of any Person that is not a Subsidiary;
"Consolidated Shareholders' Equity " means at any time as of
which the amount thereof is to be determined, the sum of the following
in respect of the Borrower and its Subsidiaries (determined on a
consolidated basis and excluding intercompany items among the Borrower
and its Subsidiaries and any upward adjustment after the Closing Date
due to revaluation of assets): (i) the amount of issued and
outstanding share capital, plus (ii) the amount of additional paid-in
capital and retained income (or, in the case of a deficit, minus the
amount of such deficit), minus (iii) the amount of any treasury stock,
minus (iv) valuation allowances, minus (v) receivables due from the
Crown ESOP and minus (vi) any translation, adjustments for any foreign
currency transactions all as determined in accordance with GAAP
applied on a Consistent Basis;
"Consolidated Tangible Net Worth" means at any time as of
which the amount thereof is to be determined, Consolidated
Shareholders' Equity minus (without duplication of deductions in
respect of items already deducted in arriving at surplus and retained
earnings) the book value of all assets which would be treated as
intangible assets under GAAP, all as determined on a consolidated
basis in accordance with GAAP applied on a Consistent Basis;
"Consolidated Total Assets" means, as at any time of
calculation thereof, the net book value of all assets of the Borrower
and its Subsidiaries as determined on a consolidated basis in
accordance with GAAP applied on a Consistent Basis;
"Contingent Obligation" of any Person means all contingent
liabilities required (or which, upon the creation
6
<PAGE> 12
or incurring thereof, would be required) to be included in the
financial statements (including footnotes) of such Person in
accordance with GAAP applied on a Consistent Basis, including
Statement No. 5 of the Financial Accounting Standards Board, all Rate
Hedging Obligations and any obligation of such Person guaranteeing or
in effect guaranteeing any Indebtedness, dividend or other obligation
of any other Person (the "primary obligor") in any manner, whether
directly or indirectly, including obligations of such Person however
incurred:
(a) to purchase such Indebtedness or other
obligation or any property or assets constituting security
therefor;
(b) to advance or supply funds in any manner (i)
for the purchase or payment of such Indebtedness or other
obligation, or (ii) to maintain a minimum working capital, net
worth or other balance sheet condition or any income statement
condition of the primary obligor;
(c) to grant or convey any lien, security
interest, pledge, charge or other encumbrance on any property
or assets of such Person to secure payment of such
Indebtedness or other obligation;
(d) to lease property or to purchase securities
or other property or services primarily for the purpose of
assuring the owner or holder of such Indebtedness or
obligation of the ability of the primary obligor to make
payment of such Indebtedness or other obligation; or
(e) otherwise to assure the owner of the
Indebtedness or such obligation of the primary obligor against
loss in respect thereof;
"Cost of Acquisition" means, with respect to any Acquisition,
as at the date of entering into any agreement therefor, the sum of the
following (without duplication): (i) the value of the capital stock,
warrants or options to acquire capital stock of Borrower or any
Subsidiary to be transferred in connection therewith, (ii) any cash or
other property (excluding property described in clause (i)) and the
unpaid principal amount of any debt instrument given as consideration,
(iii) any Indebtedness assumed by the Borrower or its Subsidiaries in
connection with such Acquisition, and (iv) out of pocket transaction
costs for the services and expenses of attorneys, accountants and
other consultants incurred in effecting such a transaction, and other
similar transaction costs so incurred (all such costs in excess of
such amount being included as a "Cost of Acquisition" for such
transaction). For purposes of determining the Cost of Acquisition for
any transaction, (A) the capital stock of the Borrower shall be valued
(I) at its market value as reported on the New York Stock Exchange
with respect to shares that are freely tradeable, and (II) with
respect to shares that are not freely tradeable, as determined by the
Board of Directors of
7
<PAGE> 13
the Borrower and, if requested by the Lender, determined to be a
reasonable valuation by the independent public accountants referred to
in Section 6.1(a) hereof, (B) the capital stock of any Subsidiary
shall be valued as determined by the Board of Directors of such
Subsidiary and, if requested by the Lender, determined to be a
reasonable valuation by the independent public accountants referred to
in Section 6.1(a) hereof, and (C) with respect to any Acquisition
accomplished pursuant to the exercise of options or warrants or the
conversion of securities, the Cost of Acquisition shall include both
the cost of acquiring such option, warrant or convertible security as
well as the cost of exercise or conversion;
"Crown ESOP" means that certain employee stock ownership plan
of the Borrower as in effect on the date hereof;
"Default" means any event or condition which, with the giving
or receipt of notice or lapse of time or both, would constitute an
Event of Default hereunder;
"Dollars" and the symbol "$" means dollars constituting legal
tender for the payment of public and private debts in the United
States of America;
"Eastern Time" means Eastern Standard Time or Eastern Daylight
Time, as applicable;
"Eligible Securities" means the following obligations and any
other obligations previously approved in writing by the Lender:
(a) Government Securities;
(b) obligations of any corporation organized under
the laws of any state of the United States of America or under
the laws of any other nation, payable in the United States of
America, expressed to mature not later than 90 days following
the date of issuance thereof and rated in an investment grade
rating category by S&P and Moody's;
(c) interest bearing demand or time deposits issued
by any bank or certificates of deposit, bankers acceptances
and other "money market instruments" maturing within one
hundred eighty (180) days from the date of issuance thereof
and issued by a bank or trust company organized under the laws
of the United States or of any state thereof having capital
surplus and undivided profits aggregating at least
$400,000,000 and being rated A or better by S&P or A2 or
better by Moody's;
(d) Repurchase Agreements;
(e) Municipal Obligations;
(f) shares of mutual funds which invest exclusively
in obligations described in paragraphs (a) through (e)
8
<PAGE> 14
above, the shares of which mutual funds are at all times
rated "AAA" by S&P; and
(g) shares of "money market funds," of financial
institutions rated A or better by S&P or A2 or better by
Moody's;
"Employee Benefit Plan" means any employee benefit plan within
the meaning of Section 3(3) of ERISA which (a) is maintained for
employees of the Borrower or is assumed by the Borrower in connection
with any Acquisition or any of its ERISA Affiliates or (b) has at any
time during the six (6) years immediately prior the date hereof been
maintained for the employees of the Borrower or any current or former
ERISA Affiliate;
"Environmental Laws" means, collectively, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as
amended, the Superfund Amendments and Reauthorization Act of 1986, the
Resource Conservation and Recovery Act, the Toxic Substances Control
Act, as amended, the Clean Air Act, as amended, the Clean Water Act,
as amended, any other "Superfund" or "Superlien" law or any other
federal, or applicable state or local statute, law, ordinance, code,
rule, regulation, order or decree regulating, relating to, or imposing
liability or standards of conduct concerning, any Hazardous Material;
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and any successor statute and all
final or temporary regulations promulgated thereunder;
"ERISA Affiliate", as applied to the Borrower, means any Person
or trade or business which is a member of a group which is under
common control with the Borrower, who together with the Borrower, is
treated as a single employer within the meaning of Section 414(b) and
(c) of the Code;
"Eurodollar Rate Loan" means a Loan for which the rate of
interest is determined by reference to the Eurodollar Rate;
"Eurodollar Rate" means the interest rate per annum calculated
according to the following formula:
<TABLE>
<S> <C>
Eurodollar = Interbank Offered Rate + Applicable
--------------------------------
Rate 1- Eurodollar Reserve Percentage Interest Addition
</TABLE>
"Eurodollar Reserve Percentage" means, for any day, that
percentage (expressed as a decimal) which is in effect from time to
time, as the maximum reserve requirement (including, without
limitation, any basic, supplemental, emergency, special, or marginal
reserves) applicable with respect to Eurocurrency liabilities as that
term is defined in Regulation D or any successor regulation (or
against any other category of liabilities that includes deposits by
reference to which the interest rate of Eurodollar Rate Loans is
determined),
9
<PAGE> 15
whether or not Lender has any Eurocurrency liabilities subject to such
requirements without benefits of credits or proration, exceptions or
offsets that may be available from time to time to Lender. The
Eurodollar Rate shall be adjusted automatically on and as of the
effective date of any change in the Eurodollar Reserve Percentage;
"Event of Default" means any of the occurrences set forth as
such in Section 8.1 hereof;
"Federal Funds Effective Rate" means, for any day, the rate
per annum (rounded upward to the nearest 1/100th of 1%) equal to the
weighted average of the rates on overnight Federal funds transactions
with members of the Federal Reserve System arranged by Federal funds
brokers on such day, as published by the Federal Reserve Bank of New
York on the Business Day next succeeding such day, provided that (a)
if such day is not a Business Day, the Federal Funds Rate for such day
shall be such rate on such transactions on the next preceding Business
Day, and (b) if no such rate is so published on such next succeeding
Business Day, the Federal Funds Rate for such day shall be the average
rate quoted to the Lender on such day on such transaction as
determined by the Lender;
"Fiscal Year" means the twelve month fiscal period of the
Borrower ending the Sunday nearest March 31 of each calendar year; any
reference to a Fiscal Year immediately followed by a calendar year
shall mean the Fiscal Year ending in such calendar year;
"Foreign Benefit Law" means any applicable statute, law,
ordinance, code, rule, regulation, order or decree of any foreign
nation or any province, state, territory, protectorate or other
political subdivision thereof regulating, relating to, or imposing
liability or standards of conduct concerning, any Employee Benefit
Plan;
"Four-Quarter Period" means a period of four full consecutive
fiscal quarters of the Borrower and its Subsidiaries, taken together
as one accounting period;
"GAAP" means Generally Accepted Accounting Principles, being
those principles of accounting set forth in pronouncements of the
Financial Accounting Standards Board, the American Institute of
Certified Public Accountants or which have other substantial
authoritative support and are applicable in the circumstances as of
the date of a report, as such principles are from time to time
supplemented and amended;
"Government Securities" means direct obligations of, or
obligations the timely payment of principal and interest on which are
fully and unconditionally guaranteed by, the United States of America;
10
<PAGE> 16
"Governmental Authority" shall mean any Federal, state,
municipal, national or other governmental department, commission,
board, bureau, agency or instrumentality or political subdivision
thereof or any entity or officer exercising executive, legislative or
judicial, regulatory or administrative functions of or pertaining to
any government or any court, in each case whether a state of the
United States, the United States or foreign;
"Guaranties" means all obligations of the Borrower or any
Subsidiary directly or indirectly guaranteeing, or in effect
guaranteeing, any Indebtedness or other obligation of any other
Person;
"Guarantors" means on any date the Subsidiaries party to a
Subsidiary Guaranty on such date and shall in any event include all
Material Subsidiaries;
"Hazardous Material" means and includes any hazardous, toxic
or dangerous waste, substance or material, the generation, handling,
storage, disposal, treatment or emission of which is subject to any
Environmental Law;
"Indebtedness" means with respect to any Person, without
duplication, all Indebtedness for Money Borrowed, all indebtedness of
such Person for the acquisition of property, all indebtedness secured
by any Lien on the property of such Person whether or not such
indebtedness is assumed, all liability of such Person by way of
endorsements (other than for collection or deposit in the ordinary
course of business), all Contingent Obligations, that portion of
obligations with respect to Capital Leases and other items which in
accordance with GAAP is classified as a liability on a balance sheet;
but excluding all accounts payable in the ordinary course of business
so long as payment therefor is due within one year; provided that in
no event shall the term Indebtedness include surplus and retained
earnings, lease obligations (other than pursuant to Capital Leases),
reserves for deferred income taxes and investment credits, other
deferred credits and reserves, and deferred compensation obligations;
"Indebtedness for Money Borrowed" means for any Person all
indebtedness in respect of money borrowed, including without
limitation all Capital Leases and the deferred purchase price of any
property or asset, evidenced by a promissory note, bond, debenture or
similar written obligation for the payment of money, other than trade
payables incurred in the ordinary course of business;
"Interbank Offered Rate" means, with respect to any Eurodollar
Rate Loan for the Interest Period applicable thereto, the average
(rounded upward to the nearest one-sixteenth (1/16) of one percent)
per annum rate of interest determined by the office of Lender then
determining such rate (each such determination to be conclusive and
binding) as of two Business Days prior to the first day of such
Interest
11
<PAGE> 17
Period, as the effective rate at which deposits in immediately
available funds in Dollars are being, have been, or would be offered
or quoted by Lender to major banks in the applicable interbank market
for Eurodollar deposits at any time during the Business Day which is
the second Business Day immediately preceding the first day of such
Interest Period, for a term comparable to such Interest Period and in
the amount of the Eurodollar Rate Loan;
"Interest Period" for each Eurodollar Rate Loan means a period
commencing on the date such Eurodollar Rate Loan is made or converted
and each subsequent period commencing on the last day of the
immediately preceding Interest Period for such Eurodollar Rate Loan,
and ending, at the Borrower's option, on the date one, two, three or
six months thereafter as notified to the Lender by the Authorized
Representative no later than three (3) Business Days prior to the
beginning of such Interest Period; provided, that,
(i) if the Authorized Representative fails to
notify the Lender of the length of an Interest Period three
(3) Business Days prior to the first day of such Interest
Period, the Loan for which such Interest Period was to be
determined shall be deemed to be a Base Rate Loan as of the
first day thereof;
(ii) if an Interest Period for a Eurodollar Rate
Loan would end on a day which is not a Business Day such
Interest Period shall be extended to the next Business Day
(unless such extension would cause the applicable Interest
Period to end in the succeeding calendar month, in which case
such Interest Period shall end on the next preceding Business
Day);
(iii) any Interest Period which begins on the last
Business Day of a calendar month (or on a day for which there
is no numerically corresponding day in the calendar month at
the end of such Interest Period) shall end on the last
Business Day of a calendar month;
(iv) no Interest Period shall extend past August 25, 1998
or such later date as shall become the scheduled Revolving
Credit Termination Date pursuant to Section 2.12 hereof; and
(v) there shall not be more than four (4) Interest
Periods in effect on any day.
"Interest Rate Selection Notice" means the notice delivered by
an Authorized Representative in connection with the election of a
subsequent interest period for any Eurodollar Rate Loan or the
conversion of any Eurodollar Rate Loan into a Base Rate Loan or the
conversion of any Base Rate Loan into a Eurodollar Rate Loan, in the
form of Exhibit E attached hereto;
12
<PAGE> 18
"Lien" means any interest in property securing any obligation
owed to, or a claim by, a Person other than the owner of the property,
whether such interest is based on the common law, statute or contract,
and including but not limited to the lien or security interest arising
from a mortgage, encumbrance, pledge, security agreement, conditional
sale or trust receipt or a lease, consignment or bailment for security
purposes. For the purposes of this Agreement, the Borrower and any
Subsidiary shall be deemed to be the owner of any property which it
has acquired or holds subject to a conditional sale agreement,
financing lease, or other arrangement pursuant to which title to the
property has been retained by or vested in some other Person for
security purposes;
"Loan" or "Loans" means any of the Revolving Loans made under
the Revolving Credit Facility;
"Loan Documents" means this Agreement, any Subsidiary
Guaranty, the Notes and all other instruments and documents heretofore
or hereafter executed or delivered to or in favor of the Lender in
connection with the Loans made and transactions contemplated under
this Agreement, as the same may be amended, supplemented or replaced
from the time to time;
"Margin Stock" shall have the meaning given to such term in
Section 5.11 hereof;
"Material Adverse Effect" means with respect to the Borrower
and any Guarantor a material adverse effect (x) on the business,
properties, operations or condition, financial or otherwise, of the
Borrower and its Subsidiaries taken as a whole or (y) on the ability
of any party to the Loan Documents to perform, or of the Lender to
enforce, the obligations of such Person under the Loan Documents to
which it is a party;
"Material Subsidiary" means (i) any direct or indirect
Subsidiary of the Borrower which (a) has total assets equal to or
greater than 10% of Consolidated Total Assets (calculated as of the
most recent fiscal period with respect to which the Lender shall have
received financial statements required to be delivered pursuant to
Sections 6.1(a) or (b) (or if prior to delivery of any financial
statements pursuant to such Sections, then calculated with respect to
the Fiscal Year end financial statements referenced in Section 5.6
hereof) (the "Required Financial Information")) or (ii) has net income
equal to or greater than 10% of Consolidated Net Income (each
calculated for the most recent Four-Quarter Period for which the
Lender has received the Required Financial Information); provided,
however, that notwithstanding the foregoing, if the Borrower and the
Material Subsidiaries, as defined above have less than 90% of
Consolidated Total Assets (calculated as described above) or have Net
Income of less than 90% of Consolidated Net Income (as calculated
above), then the term "Material Subsidiaries" shall mean Subsidiaries
of the
13
<PAGE> 19
Borrower, as specified by the Borrower, that together with the
Borrower have assets equal to not less than 90% of Consolidated Total
Assets (calculated as described above) and net income of not less than
90% of Consolidated Net Income (calculated as described above);
"Moody's" means Moody's Investors Service, Inc.;
"Multiemployer Plan" means a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA to which the Borrower or any ERISA
Affiliate is making, or is accruing an obligation to make,
contributions or has made, or been obligated to make, contributions
within the preceding six (6) years;
"Municipal Obligations" means general obligations issued by,
and supported by the full taxing authority of, any state of the United
States of America or of any municipal corporation or other public body
organized under the laws of any such state which are rated, in their
capacity as issuer of general obligations, in the highest investment
rating category by both S&P and Moody's;
"Net Income" means, as applied to any Person for any period,
the aggregate amount of net income of such Person, after taxes, for
such period, as determined in accordance with GAAP applied on a
Consistent Basis;
"Notes" means, collectively, the Revolving Notes;
"Obligations" means the obligations, liabilities and
Indebtedness of the Borrower with respect to (i) the principal and
interest on the Loans as evidenced by the Notes, (ii) all liabilities
of Borrower to the Lender which arise under a Swap Agreement and (iii)
the payment and performance of all other obligations, liabilities and
Indebtedness of the Borrower to the Lender hereunder, under any one or
more of the other Loan Documents or with respect to the Loans;
"PBGC" means the Pension Benefit Guaranty Corporation and any
successor thereto;
"Pension Plan" means any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to the provisions of Title IV of
ERISA or Section 412 of the Code and which is, or was during the six
(6) years immediately prior to the date hereof maintained for
employees of the Borrower or any ERISA Affiliate;
"Permitted Liens" shall have the meaning given to such term in
Section 7.5 hereof;
"Permitted Stock Repurchases" shall have the meaning given to
such term in Section 7.9 hereof;
14
<PAGE> 20
"Person" means an individual, partnership, corporation, trust,
unincorporated organization, association, joint venture or a
government or agency or political subdivision thereof;
"Prime Rate" means the rate of interest per annum announced
publicly by the Lender as its prime rate from time to time. The Prime
Rate is not necessarily the best or the lowest rate of interest
offered by the Lender;
"Principal Office" means the office of the Lender at 191
Peachtree Street, N.E., Atlanta, Georgia 30303-1757, or such other
office and address as the Lender may from time to time designate;
"Rate Hedging Obligations" means any and all obligations of
the Borrower or any Subsidiary, whether absolute or contingent and
howsoever and whensoever created, arising, evidenced or acquired
(including all renewals, extensions and modifications thereof and
substitutions therefor), under (i) any and all agreements, devices or
arrangements designed to protect at least one of the parties thereto
from the fluctuations of interest rates, exchange rates or forward
rates applicable to such party's assets, liabilities or exchange
transactions, including, but not limited to, Dollar-denominated or
cross-currency interest rate exchange agreements, forward currency
exchange agreements, interest rate cap or collar protection
agreements, forward rate currency or interest rate options, puts,
warrants and those commonly known as interest rate "swap" agreements;
and (ii) any and all cancellations, buybacks, reversals, terminations
or assignments of any of the foregoing;
"Regulation D" means Regulation D of the Board as the same may
be amended or supplemented from time to time;
"Regulatory Change" means any change effective after the
Closing Date in United States federal or state laws or regulations
(including Regulation D and capital adequacy regulations) or foreign
laws or regulations or the adoption or making after such date of any
interpretations, directives or requests applying to a class of banks,
which includes any of the Lenders, under any United States federal or
state or foreign laws or regulations (whether or not having the force
of law) by any court or governmental or monetary authority charged
with the interpretation or administration thereof or compliance by the
Lender with any request or directive regarding capital adequacy,
including with respect to "highly leveraged transactions," whether or
not having the force of law, whether or not failure to comply
therewith would be unlawful and whether or not published or proposed
prior to the date hereof;
"Repurchase Agreement" means a repurchase agreement entered
into with any financial institution whose debt obligations or
commercial paper are rated "A" by either of S&P or Moody's or "A-1" by
S&P or "P-1" by Moody's;
15
<PAGE> 21
"Restricted Payment" means (a) any redemption, conversion,
exchange, retirement or similar payment, purchase or other acquisition
for value, direct or indirect, of any shares of any class of stock of
Borrower now or hereafter outstanding, other than shares redeemed,
converted, exchanged or retired in connection with the existing
employee stock option plan of the Borrower; and (b) any payment made
to retire, or to obtain the surrender of, any outstanding warrants,
options or other rights to acquire shares of any class of stock of
Borrower or any Subsidiary now or hereafter outstanding;
"Revolving Credit Commitment" means, with respect to the
Lender, the obligation of such Lender to make Revolving Loans to the
Borrower up to an aggregate principal amount at any one time
outstanding equal to the Total Revolving Credit Commitment as set
forth on Exhibit A hereto as the same may be increased or decreased
from time to time pursuant to this Agreement;
"Revolving Credit Facility" means the facility described in
Article II hereof providing for Loans to the Borrower by the Lender in
the aggregate principal amount equal to the Total Revolving Credit
Commitment;
"Revolving Credit Outstandings" means, as of any date of
determination, the aggregate principal amount of all Revolving Loans
then outstanding and all interest accrued and unpaid thereon;
"Revolving Credit Termination Date" means (i) August 25, 1998
or such later date as the Lender, in accordance with Section 2.10
hereof, may determine to be the Revolving Credit Termination Date or
(ii) such earlier date of termination of Lender's obligations pursuant
to Section 8.1 upon the occurrence of an Event of Default, or (iii)
such date as the Borrower may voluntarily and permanently terminate
the Revolving Credit Facility by payment in full of all Revolving
Credit Outstandings and cancellation of the Total Revolving Credit
Commitment pursuant to Section 2.6 hereof;
"Revolving Loan" means any borrowing pursuant to an Advance
under the Revolving Credit Facility in accordance with Article II
hereof;
"Revolving Note" means the promissory note of the Borrower
evidencing Revolving Loans executed and delivered to the Lender as
provided in Section 2.5 hereof substantially in the form attached
hereto as Exhibit F;
"S&P" means Standard & Poor's Ratings Group;
"Single Employer Plan" means any employee pension benefit plan
covered by Title IV of ERISA in respect of which the Borrower is an
"employer" as described in Section 4001(b) of ERISA and which is not a
Multi-employer Plan;
16
<PAGE> 22
"Solvent" means, when used with respect to any Person, that at
the time of determination:
(i) the fair value of its assets (both at fair
valuation and at present fair saleable value on an orderly
basis) is in excess of the total amount of its liabilities,
including, without limitation, Contingent Obligations; and
(ii) it is then able and expects to be able to
pay its debts as they mature; and
(iii) it has capital sufficient to carry on its
business as conducted and as proposed to be conducted;
"Subsidiary" means any corporation or other entity in which
more than 50% of its outstanding voting stock or more than 50% of all
equity interests is owned directly or indirectly by the Borrower
and/or by one or more of the Borrower's Subsidiaries;
"Subsidiary Guaranty" means each guaranty agreement between
one or more of the Subsidiaries and the Lender which is delivered by a
Subsidiary pursuant to Section 6.23 hereof and substantially in the
form of Exhibit G hereof, as the same may be amended, modified or
supplemented;
"Swap Agreement" means one or more agreements between the
Borrower and any Person with respect to Indebtedness evidenced by the
Notes, on terms mutually acceptable to Borrower and such Person and
approved by the Lender, which agreements create Rate Hedging
Obligations;
"Termination Event" means: (a) a "Reportable Event" described
in Section 4043 of ERISA and the regulations issued thereunder (unless
the notice requirement has been waived by applicable regulation); or
(b) the withdrawal of the Borrower or any ERISA Affiliate from a
Pension Plan during a plan year in which it was a "substantial
employer" as defined in Section 4001(a)(2) of ERISA or was deemed such
under Section 4068(f) of ERISA; or (c) the termination of a Pension
Plan, the filing of a notice of intent to terminate a Pension Plan or
the treatment of a Pension Plan amendment as a termination under
Section 4041 of ERISA; or (d) the institution of proceedings to
terminate a Pension Plan by the PBGC; or (e) any other event or
condition which would constitute grounds under Section 4042(a) of
ERISA for the termination of, or the appointment of a trustee to
administer, any Pension Plan; or (f) the partial or complete
withdrawal of the Borrower or any ERISA Affiliate from a Multiemployer
Plan; or (g) the imposition of a Lien pursuant to Section 412 of the
Code or Section 302 of ERISA; or (h) any event or condition which
results in the reorganization or insolvency of a Multiemployer Plan
under Section 4241 or Section 4245 of ERISA, respectively; or (i) any
event or condition which results in the termination of a Multiemployer
Plan under Section 4041A of
17
<PAGE> 23
ERISA or the institution by the PBGC of proceedings to terminate a
Multiemployer Plan under Section 4042 of ERISA;
"Total Revolving Credit Commitment" means a principal amount
equal to $15,000,000, as reduced from time to time in accordance with
Section 2.7 hereof; and
"Wachovia" means Wachovia Bank of Georgia, N.A., a national
banking association, together with its successors;
"NationsBank Facility" means that certain revolving credit
facility in the aggregate amount of $15,000,000 provided to the
Borrower by NationsBank, National Association, (Carolinas) pursuant to
that certain Revolving Credit Agreement dated as of the date hereof.
1.2 Accounting Terms. All accounting terms not specifically
defined herein shall have the meanings assigned to such terms and shall be
interpreted in accordance with GAAP applied on a Consistent Basis.
1.3 UCC Terms. Each term defined in Article 1 or 9 of the Georgia
Uniform Commercial Code shall have the meaning given therein unless otherwise
defined herein, except to the extent that the Uniform Commercial Code of
another jurisdiction is controlling, in which case such terms shall have the
meaning given in the Uniform Commercial Code of the applicable jurisdiction.
ARTICLE II
The Revolving Credit Facility
2.1. Revolving Loans.
(a) Commitment. Subject to the terms and conditions of
Article V of this Agreement, the Lender severally agrees to make Advances to
the Borrower under the Revolving Credit Facility from time to time from the
Closing Date until the Revolving Credit Termination Date on a pro rata basis as
to the total borrowing requested by the Borrower on any day up to but not
exceeding the Revolving Credit Commitment of the Lender. Within such limits,
the Borrower may borrow, repay and reborrow under the Revolving Credit Facility
on a Business Day from the Closing Date until, but (as to borrowings and
reborrowings) not including, the Revolving Credit Termination Date; provided,
however, that (y) no Revolving Loan that is a Eurodollar Rate Loan shall be
made which has an Interest Period that extends beyond the Revolving Credit
Termination Date and (z) each Revolving Loan that is a Eurodollar Rate Loan
may, subject to the provisions of Section 2.7 hereof, be repaid only on the
last day of the Interest Period with respect thereto.
(b) Amounts. Except as otherwise permitted by the
consent of the Lender from time to time, the aggregate unpaid principal amount
of the Revolving Credit Outstandings shall not
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<PAGE> 24
exceed at any time the Total Revolving Credit Commitment. The Lender shall
have no obligation to advance any funds in excess of the Total Revolving Credit
Commitment. Each Revolving Loan hereunder and each conversion under Section
2.7 hereof shall be in an amount of at least (i) $2,000,000, and, if greater
than $2,000,000, an integral multiple of $1,000,000, if a Eurodollar Rate Loan
and (ii) $250,000, and, if greater than $250,000, an integral multiple of
$100,000, if a Base Rate Loan.
(c) Advances. (i) An Authorized Representative shall
give the Lender (A) at least three (3) Business Days' irrevocable telephonic
notice of each Revolving Loan that is a Eurodollar Rate Loan (whether
representing an additional borrowing hereunder or the conversion of borrowing
hereunder from Base Rate Loans to Eurodollar Rate Loans) prior to 10:00 A.M.
Eastern Time and (B) irrevocable written notice of each Revolving Loan that is
a Base Rate Loan (whether representing an additional borrowing hereunder or the
conversion of borrowing hereunder from Eurodollar Rate Loans to Base Rate
Loans) prior to 10:00 A.M. Eastern Time on the day of such proposed Revolving
Loan. Each such telephonic notice, which shall be effective upon receipt by
the Lender, shall specify the amount of the borrowing, the type of Revolving
Loan (Base Rate or Eurodollar Rate), the date of borrowing and, if a Eurodollar
Rate Loan, the Interest Period to be used in the computation of interest. The
Authorized Representative shall provide the Lender written confirmation of each
such telephonic notice no later than 11:00 A.M. Eastern Time on the same day
received by telefacsimile transmission in the form of a Borrowing Notice for
additional Advances, or in the form of an Interest Rate Selection Notice for
the selection or conversion of interest rates for outstanding Revolving Credit
Loans, in each case with appropriate insertions, but failure to provide such
confirmation shall not affect the validity of such telephonic notice. The
amount of any Advance shall, subject to the terms and conditions of this
Agreement, be made available to the Borrower by delivery of the proceeds
thereof to the Borrower's Account or otherwise as shall be directed in the
applicable Borrowing Notice by the Authorized Representative not later than
3:00 P.M., Eastern Time on the day so received.
(ii) The duration of the initial Interest Period for each Revolving
Loan that is a Eurodollar Rate Loan shall be as specified in the initial
Borrowing Notice for such Loan. The Borrower shall have the option to elect
the duration of subsequent Interest Periods and to convert the Loans in
accordance with Section 2.7 hereof. If the Lender does not receive an Interest
Rate Selection Notice giving notice of election of duration of an Interest
Period or conversion by the time prescribed by Section 2.7 hereof, the Borrower
shall be deemed to have elected to convert such Revolving Loan to (or continue
such Revolving Loan as) a Base Rate Loan until the Borrower notifies the Lender
in accordance with Section 2.7 hereof.
2.2. Payment of Interest. (a) The Borrower shall pay interest to
the Lender on the outstanding and unpaid principal amount of each Revolving
Loan made by the Lender for the period commencing on the date of such Revolving
Loan until such Revolving
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<PAGE> 25
Loan shall be due at the then applicable Base Rate for Base Rate Loans or
applicable Eurodollar Rate for Eurodollar Rate Loans, as designated by the
Authorized Representative pursuant to Section 2.1 hereof; provided, however,
that if any amount of principal or interest or fees to the Lender shall not be
paid when due (at maturity, by acceleration or otherwise), or any Event of
Default shall have occurred and be continuing hereunder, all amounts
outstanding hereunder shall bear interest so long as such amount shall remain
unpaid or such Event of Default continues, as applicable, (i) in the case of a
Eurodollar Rate Loan, until the end of the Interest Period with respect to any
Eurodollar Rate Loan at a rate of two percent (2%) above the applicable
Eurodollar Rate for such Eurodollar Rate Loan and thereafter at a rate per
annum which shall be two percent (2%) plus the Base Rate, (ii) with respect to
Base Rate Loans, fees or other amounts owing hereunder, at a rate of interest
per annum which shall be two percent (2%) above the Base Rate, and (iii) in any
case, the maximum rate permitted by applicable law, if lower.
(b) Interest on each Revolving Loan shall be computed on
the basis of a year of 360 days and calculated for the actual number of days
elapsed. Interest on each Revolving Loan shall be paid (i) quarterly in
arrears on the last Business Day of each June, September, December and March,
commencing September 29, 1995 for each Base Rate Loan, (ii) on the last day of
the applicable Interest Period for each Eurodollar Rate Loan and if such
interest period extends for more than three (3) months, at intervals of three
(3) months after the first day of such Interest Period and (iii) upon payment
in full of the principal amount of such Revolving Loan.
2.3. Payment of Principal. The principal amount of each Revolving
Loan shall be due and payable to the Lender in full on the Revolving Credit
Termination Date, or earlier as specifically provided herein. The principal
amount of any Base Rate Loan may be prepaid in whole or in part on any Business
Day provided the Borrower gives the Lender notice of such prepayment by
telecopy at or prior to 10:00 A.M. Eastern Time on the date of such prepayment.
The principal amount of any Eurodollar Rate Loan may be prepaid only at the end
of the applicable Interest Period unless the Borrower shall pay to the Lender
the amount, if any, required under Section 3.4 hereof. If at any time the
amount of Revolving Credit Outstandings exceeds the Total Revolving Credit
Commitment, a principal amount of the outstanding Revolving Loans equal to such
excess shall be due and payable immediately. All prepayments of Revolving
Loans made by the Borrower shall be in the amount of $250,000 or such greater
amount which is an integral multiple of $100,000, or such other amount as
necessary to comply with this Section 2.3 or with Section 2.7 hereof.
2.4. Non-Conforming Payments. (a) Each payment of principal
(including any prepayment) and payment of interest and fees, and any other
amount required to be paid to the Lender with respect to the Revolving Loans,
shall be made to the Lender at the Principal Office in Dollars and in
immediately available funds before 12:30 P.M. Eastern Time on the date such
payment is due. The Lender may,
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but shall not be obligated to, debit the amount of any such payment which is
not made by such time to any ordinary deposit account, if any, of the Borrower
with the Lender.
(b) The Lender shall deem any payment made by or on
behalf of the Borrower hereunder that is not made both in Dollars and in
immediately available funds and prior to 12:30 P.M. Eastern Time to be a
non-conforming payment. Any such payment shall not be deemed to be received by
the Lender until the later of (i) the time such funds become available funds
and (ii) the next Business Day. Any non-conforming payment may constitute or
become a Default or Event of Default. Interest shall continue to accrue on any
principal as to which a non-conforming payment is made until the later of (x)
the date such funds become available funds or (y) the next Business Day at the
respective rates of interest per annum specified in the proviso to Section 2.2
hereof regarding late payments of interest, from the date such amount was due
and payable.
(c) In the event that any payment hereunder or under the
Revolving Notes becomes due and payable on a day other than a Business Day,
then such due date shall be extended to the next succeeding Business Day unless
provided otherwise under clause (ii) of the definition of "Interest Period";
provided that interest shall continue to accrue during the period of any such
extension and provided further, that in no event shall any such due date be
extended beyond the Revolving Credit Termination Date.
2.5. Revolving Notes. Revolving Credit Loans made by the Lender
shall be evidenced by the Revolving Notes, which Revolving Notes shall be dated
the Closing Date or such later date pursuant to an Assignment and Acceptance
and shall be duly completed, executed and delivered by the Borrower.
2.6. Reductions. The Borrower shall, by notice from an Authorized
Representative, have the right from time to time, upon not less than three (3)
Business Days written notice to the Lender, to reduce the Total Revolving
Credit Commitment. Each such reduction shall be in the aggregate amount of
$2,500,000 or such greater amount which is in an integral multiple of $500,000,
and shall permanently reduce the Total Revolving Credit Commitment. No such
reduction shall result in the payment of any Eurodollar Rate Loan other than on
the last day of the Interest Period of such Eurodollar Rate Loan unless such
prepayment is accompanied by amounts due, if any, under Section 3.4 hereof.
Each reduction of the Total Revolving Credit Commitment shall be accompanied by
payment of the Revolving Notes to the extent that the amount of Revolving
Credit Outstandings exceeds the Total Revolving Credit Commitment after giving
effect to such reduction, together with accrued and unpaid interest on the
amounts prepaid and any fees otherwise due.
2.7. Conversions and Elections of Subsequent Interest Periods.
Provided that no Event of Default shall have occurred and be continuing and
subject to the limitations set forth below and in Sections 3.1(b), 3.2 and 3.3
hereof, the Borrower may:
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(a) upon delivery of a properly completed Interest Rate
Selection Notice to the Lender on or before 11:00 A.M. Eastern Time on any
Business Day, convert all or a part of Eurodollar Rate Loans to Base Rate Loans
on the last day of the Interest Period for such Eurodollar Rate Loans; and
(b) upon delivery of a properly completed Interest Rate
Selection Notice to the Lender on or before 11:00 A.M. Eastern Time three (3)
Business Days prior to the date of such election or conversion:
(i) elect a subsequent Interest Period for all or
a portion of Eurodollar Rate Loans to begin on the last day of
the current Interest Period for such Eurodollar Rate Loans;
and
(ii) convert Base Rate Loans to Eurodollar Rate
Loans on any date.
Each election and conversion pursuant to this Section 2.7 shall be
subject to the limitations on Eurodollar Rate Loans set forth in the definition
of "Interest Period" herein and in Sections 2.1, 2.3 and Article IV hereof.
2.8. Unused Fee. For the period beginning on the Closing Date and
ending on the Revolving Credit Termination Date, the Borrower agrees to pay to
the Lender an unused fee equal to the Applicable Unused Fee multiplied by the
average daily amount by which the Total Revolving Credit Commitment exceeds
Revolving Credit Outstandings. Such payments of fees provided for in this
Section 2.8 shall be due in arrears on the last Business Day of each June,
September, December and March, commencing September 29, 1995 to and on the
Revolving Credit Termination Date. Notwithstanding the foregoing, so long as
the Lender fails to make available any of its Revolving Credit Commitment when
required, the Lender shall not be entitled to receive payment of such fee until
the Lender shall make its Revolving Credit Commitment available. Such fee
shall be calculated on the basis of a year of 360 days for the actual number of
days elapsed.
2.9. Use of Proceeds. The proceeds of the Loans made pursuant to the
Revolving Credit Facility hereunder shall be used by the Borrower for
Acquisitions permitted hereunder, general working capital needs and other
corporate purposes, provided, however, that no portion of the Revolving Credit
Facility shall be used, directly or indirectly, in connection with any
financing of a hostile Acquisition.
2.10. Extension of Revolving Credit Termination Date. At the request
of the Borrower the Lender may, in its sole discretion, elect not more than
twice after the Closing Date to extend the Revolving Credit Termination Date
then in effect for one additional period of one year. The Borrower shall
notify the Lender in writing of its request for such an extension of one year
by delivering to the Lender notice of such request signed by an Authorized
Representative not less than ninety (90) days prior to
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the first and second anniversary dates of the Closing Date. If the Lender
shall elect to so extend, the Lender shall notify the Borrower in writing
within thirty (30) days of its receipt of such request for extension of the
decision of the Lender as to whether to extend the Revolving Credit Termination
Date and any conditions applicable to such extension. Failure by the Lender to
respond to a request for an extension shall constitute a refusal of the Lender
to give its consent to such extension.
ARTICLE III
Yield Protection and Illegality
3.1. Additional Costs. (a) The Borrower shall promptly pay to the
Lender from time to time, without duplication, such amounts as such Lender may
reasonably determine to be necessary to compensate it or its parent
corporation, without duplication, for any costs incurred by the Lender or its
parent corporation which it determines are attributable to its making or
maintaining any Loan or its obligation to make any Loans, or any reduction in
any amount receivable by the Lender under this Agreement or the Notes in
respect of any of such Loans, including reductions in the rate of return on a
Lender's capital (such increases in costs and reductions in amounts receivable
and returns being herein called "Additional Costs"), resulting from any
Regulatory Change which: (i) changes the basis of taxation of any amounts
payable to such Lender under this Agreement or the Notes in respect of any of
such Loans (other than taxes imposed on or measured by income, revenues or
assets); or (ii) imposes or modifies any reserve, special deposit, or similar
requirements relating to any extensions of credit or other assets of, or any
deposits with or other liabilities of, such Lender or its parent corporation
(other than any such reserve, deposit or requirement reflected in the Prime
Rate, the Federal Funds Effective Rate or the Eurodollar Rate, in each case
computed in accordance with the respective definitions of such terms set forth
in Section 1.1 hereof); or (iii) has or would have the effect of reducing the
rate of return on capital of any such Lender to a level below that which the
Lender could have achieved but for such Regulatory Change (taking into
consideration such Lender's policies with respect to capital adequacy); or (iv)
imposes any other condition adversely affecting the Lender or its parent
corporation under this Agreement or the Notes (or any of such extensions of
credit or liabilities). The Lender will notify the Authorized Representative
of any event occurring after the Closing Date which would entitle it to
compensation pursuant to this Section 3.1(a) as promptly as practicable after
it obtains knowledge thereof and determines to request such compensation.
(b) Without limiting the effect of the foregoing
provisions of this Section 3.1, in the event that, by reason of any Regulatory
Change, the Lender or its parent corporation either (i) incurs Additional Costs
based on or measured by the excess above a specified level of the amount of a
category of deposits or other liabilities of the Lender or its parent
corporation which
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includes deposits by reference to which the interest rate on Eurodollar Rate
Loans is determined as provided in this Agreement or a category of extensions
of credit or other assets of the Lender or its parent corporation which
includes Eurodollar Rate Loans or (ii) becomes subject to restrictions on the
amount of such a category of liabilities or assets which it may hold, then, if
the Lender so elects, the obligation hereunder of the Lender to make, and to
convert Base Rate Loans into, Eurodollar Rate Loans that are the subject of
such restrictions shall be suspended until the date such Regulatory Change
ceases to be in effect and the Borrower shall, on the last day(s) of the then
current Interest Period(s) for outstanding Eurodollar Rate Loans convert such
Eurodollar Rate Loans into Base Rate Loans. In the event that the obligation
of the Lender to make, or to convert Base Rate Loans into, Eurodollar Rate
Loans is suspended, then any request by the Borrower during the pendency of
such suspension for a Eurodollar Rate Loan shall be deemed a request for a Base
Rate Loan from the Lender.
(c) Determinations by the Lender or its parent
corporation for purposes of this Section 3.1 of the effect of any Regulatory
Change on its costs of making or maintaining, or being committed to make Loans,
or the effect of any Regulatory Change on amounts receivable by the Lender in
respect of Loans, and of the additional amounts required to compensate the
Lender in respect of any Additional Costs, shall be made taking into account
such Lender's policies, or the policies of its parent corporation, as to the
allocation of capital, costs and other items and shall be conclusive absent
manifest error. The Lender requesting such compensation shall furnish to the
Authorized Representative within sixty (60) days of the incurrence of any
Additional Costs for which compensation is sought an explanation of the
Regulatory Change and calculations, in reasonable detail, setting forth the
Lender's or its parent corporation's determination of any such Additional
Costs.
3.2. Suspension of Loans. Anything herein to the contrary
notwithstanding, if, on or prior to the determination of any interest rate for
any Eurodollar Rate Loan for any Interest Period, the Lender determines (which
determination made on a reasonable basis shall be conclusive absent manifest
error) that:
(a) quotations of interest rates for the relevant
deposits referred to in the definition of "Eurodollar Rate" in Section
1.1 hereof are not being provided in the relevant amounts or for the
relevant maturities for purposes of determining the rate of interest
for such Eurodollar Rate Loan as provided in this Agreement; or
(b) the relevant rates of interest referred to in the
definition of "Interbank Offered Rate" in Section 1.1 hereof upon the
basis of which the Eurodollar Rate for such Interest Period is to be
determined do not adequately reflect the cost to the Lender of making
or maintaining such Eurodollar Rate Loan for such Interest Period;
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then the Lender shall give the Authorized Representative prompt notice thereof,
and so long as such condition remains in effect, the Lender shall be under no
obligation to make Eurodollar Rate Loans that are subject to such condition, or
to convert Loans into Eurodollar Rate Loans, and the Borrower shall on the last
day(s) of the then current Interest Period(s) for outstanding Eurodollar Rate
Loans, as applicable, convert such Eurodollar Rate Loans into another
Eurodollar Rate Loan if such Eurodollar Rate Loan is not subject to the same or
similar condition, or Base Rate Loans, if available hereunder. The Lender
shall give the Authorized Representative notice describing in reasonable detail
any event or condition described in this Section 3.2 promptly following the
determination by the Lender that the availability of Eurodollar Rate Loans is,
or is to be, suspended as a result thereof.
3.3. Illegality. Notwithstanding any other provision of this
Agreement, in the event that it becomes unlawful for the Lender to honor its
obligation to make or maintain Eurodollar Rate Loans hereunder, then the Lender
shall promptly notify the Borrower thereof and the Lender's obligation to make
or continue Eurodollar Rate Loans, or convert Base Rate Loans into Eurodollar
Rate Loans, shall be suspended until such time as the Lender may again make and
maintain Eurodollar Rate Loans, and the Lender's outstanding Eurodollar Rate
Loans shall be converted into Base Rate Loans in accordance with Section 2.7
hereof.
3.4. Compensation. The Borrower shall promptly pay to the Lender,
upon the Lender's request, such amount or amounts as shall be sufficient (in
the reasonable determination of the Lender) to compensate it for any loss, cost
or expense incurred by it as a result of:
(a) any payment, prepayment or conversion of a Eurodollar
Rate Loan on a date other than the last day of the Interest Period for
such Eurodollar Rate Loan, including without limitation any conversion
required pursuant to Section 3.3 hereof; or
(b) any failure by the Borrower to borrow or convert a
Eurodollar Rate Loan on the date for such borrowing or conversion
specified in the relevant Borrowing Notice or Interest Rate Selection
Notice under Article II hereof;
such compensation to include, without limitation, an amount equal to the
excess, if any, of (i) the amount of interest which would have accrued on the
principal amount so paid, prepaid or converted or not borrowed for the period
from the date of such payment, prepayment or conversion or failure to borrow or
convert to the last day of the then current Interest Period for such Loan (or,
in the case of a failure to borrow or convert, the Interest Period for such
Loan which would have commenced on the date scheduled for such borrowing or
conversion) at the applicable rate of interest for such Eurodollar Rate Loan
provided for herein over (ii) the Interbank Offered Rate (as reasonably
determined by the Lender) for Dollar deposits of amounts comparable to such
principal amount and maturities comparable to such period. A determination of
the
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Lender as to the amounts payable pursuant to this Section 3.4 shall be
conclusive, provided that such determinations are made on a reasonable basis.
The Lender requesting compensation under this Section 3.4 shall promptly
furnish to the Authorized Representative calculations in reasonable detail
setting forth the Lender's determination of the amount of such compensation.
3.5. Alternate Loan and Lender. In the event the Lender suspends
the making of any Eurodollar Rate Loan pursuant to this Article III (herein a
"Restricted Lender"), the Restricted Lender's Commitment Percentage of any
Eurodollar Rate Loan shall bear interest at the Base Rate until the Restricted
Lender once again makes available the applicable Eurodollar Rate Loan.
3.6. Taxes. (a) All payments by the Borrower of principal of, and
interest on, the Loans and all other amounts payable hereunder shall be made
free and clear of and without deduction for any present or future excise, stamp
or other taxes, fees, duties, levies, imposts, charges, deductions,
withholdings or other charges of any nature whatsoever imposed by any taxing
authority, but excluding (i) franchise taxes, (ii) any taxes (other than U.S.
withholding taxes) that would not be imposed but for a connection between a
Lender and the jurisdiction imposing such taxes (other than a connection
arising solely by virtue of the activities of the Lender pursuant to or in
respect of this Agreement or any other Loan Document), (iii) any taxes imposed
on or measured by the Lender's assets, net income, receipts or branch profits
and (iv) any taxes arising after the Closing Date solely as a result of or
attributable to Lender changing its designated lending office after the date
such Lender becomes a party hereto (such non-excluded items being collectively
called "Taxes"). In the event that any withholding or deduction from any
payment to be made by the Borrower hereunder is required in respect of any
Taxes pursuant to any applicable law, rule or regulation, then the Borrower
will
(i) pay directly to the relevant authority the full
amount required to be so withheld or deducted;
(ii) promptly forward to the Lender an official receipt or
other documentation satisfactory to the Lender evidencing such payment
to such authority; and
(iii) pay to the Lender such additional amount or amounts
as is necessary to ensure that the net amount actually received by the
Lender will equal the full amount the Lender would have received had
no such withholding or deduction been required.
If any such Taxes shall be or become applicable after the date of this
Agreement to such payments by the Borrower to the Lender, the Lender shall use
reasonable efforts to make, fund, or maintain the Loan or Loans, as the case
may be, through another lending office located in another jurisdiction so as to
reduce, to the fullest extent possible, Borrower's liability hereunder, if the
making, funding or maintenance of such Loan or Loans through such other office
does not, in the reasonable judgment of the Lender,
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materially affect the Lender or such Loan. If Borrower is required to make any
additional payment to the Lender pursuant to this Section 3.6, and the Lender
receives, or is entitled to receive, a credit against, remission for, or
repayment of, any tax paid or payable by it in respect of, or calculated with
reference to, the Taxes giving rise to such payment, the Lender shall, within a
reasonable time after it receives such credit, relief, remission or repayment,
reimburse Borrower the amount of any such credit, relief, remission or
repayment.
(b) Prior to the date that a Lender or a participant
organized under the laws of a jurisdiction outside the United States becomes a
party hereto, such Person shall deliver to the Borrower such certificates,
documents or other evidence, as required by the Code or Treasury Regulations
issued pursuant thereto, properly completed, currently effective and duly
executed by such Lender or participant establishing that such payment is (i)
not subject to United States Federal backup withholding tax and (ii) not
subject to United States Federal withholding tax under the Code because such
payment is either effectively connected with the conduct by such Lender or
participant of a trade or business in the United States or totally exempt from
United States Federal withholding tax by reason of the application of the
provisions of a treaty to which the United States is a party or such Lender is
otherwise exempt. The Lender that fails to provide such certificates or forms
that it is required to provide under this Section 3.6(b) shall not be entitled
to the benefits of this Section 3.6 and, to the extent required by law,
Borrower shall be entitled to deduct from, and pay to the applicable taxing
authority, taxes from the payments made by Borrower to such Lender. The Lender
shall, from time to time, complete, execute and deliver such updates or
extensions or renewals or replacements of those forms, certificates and
documents as may be necessary to continue or maintain any such exemption.
(c) If the Borrower fails to pay any Taxes when due to the
appropriate taxing authority or fails to remit to the Lender the required
receipts or other required documentary evidence, the Borrower shall indemnify
the Lender for any incremental Taxes, interest or penalties that may become
payable by the Lender as a result of any such failure.
ARTICLE IV
Conditions to Making Loans
4.1. Conditions of Initial Advance. The obligation of the Lender
to make the initial Advance is subject to the conditions precedent that:
(a) the Lender shall have received on the Closing Date,
in form and substance satisfactory to the Lender, the following:
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(i) executed originals of each of this Agreement,
the Notes and the other Loan Documents, together with all
schedules and exhibits thereto;
(ii) favorable written opinions of internal
counsel of the Borrower dated the Closing Date, addressed to
the Lender and satisfactory to Smith Helms Mulliss & Moore,
L.L.P., special counsel to the Lender, substantially in the
form of Exhibit H attached hereto;
(iii) resolutions of the boards of directors or
other appropriate governing body (or of the appropriate
committee thereof) of the Borrower certified by its secretary
or assistant secretary as of the Closing Date, appointing the
initial Authorized Representative and approving and adopting
the Loan Documents to be executed by such Person, and
authorizing the execution and delivery thereof;
(iv) specimen signatures of officers of the
Borrower executing the Loan Documents on behalf of the
Borrower, certified by the secretary or assistant secretary of
the Borrower;
(v) the charter documents of the Borrower
certified as of a recent date by the Secretary of State of its
state of incorporation;
(vi) the bylaws of the Borrower certified as of
the Closing Date as true and correct by its secretary or
assistant secretary;
(vii) certificates issued as of a recent date by
the Secretary of State of Georgia as to the due existence and
good standing of the Borrower;
(viii) appropriate certificates of qualification to
do business, good standing and, where appropriate, authority
to conduct business under assumed name, issued in respect of
the Borrower as of a recent date by the Secretary of State or
comparable official of each jurisdiction in which the failure
to be qualified to do business or authorized so to conduct
business could have a Material Adverse Effect;
(ix) notice of appointment of the initial
Authorized Representative;
(x) certificate of an Authorized Representative
dated the Closing Date demonstrating compliance with the
financial covenants contained in Sections 7.1 through 7.3 as
of the Closing Date, substantially in the form of Exhibit I
attached hereto;
(xi) an initial Borrowing Notice;
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(xii) copies of all documents executed in
connection with the NationsBank Facility;
(xiii) all fees payable by the Borrower on the
Closing Date to the Lender; and
(xiv) such other documents, instruments,
certificates and opinions as the Lender may reasonably request
on or prior to the Closing Date in connection with the
consummation of the transactions contemplated hereby.
(b) In the good faith judgment of the Lender there shall
not have occurred or become known to the Lender any event, condition,
situation or status since the date of the year-end financial
statements for Fiscal Year 1995 delivered to the Lender that has had
or could reasonably be expected to result in a Material Adverse
Effect;
4.2. Conditions of All Revolving Loans. The obligations of the
Lender to make any Revolving Loans hereunder subsequent to the Closing Date are
subject to the satisfaction of the following conditions:
(a) the Lender shall have received a Borrowing Notice in
the form of Exhibit D hereto;
(b) the representations and warranties of the Borrower
and the Guarantor set forth in Article V hereof and in each of the
other Loan Documents shall be true and correct in all material
respects on and as of the date of such Advance, with the same effect
as though such representations and warranties had been made on and as
of such date, except to the extent that such representations and
warranties expressly relate to an earlier date and except that the
financial statements referred to in Section 5.6(a)(i) hereof shall be
deemed to be those financial statements most recently delivered to the
Lender pursuant to Section 6.1 hereof;
(c) at the time of (and after giving effect to) each
Advance, no Default or Event of Default specified in Article VIII
hereof, shall have occurred and be continuing; and
(d) immediately after giving effect to a Revolving Loan,
the aggregate principal balance of all outstanding Revolving Loans for
the Lender and in the aggregate shall not exceed, respectively, (i)
such Lender's Revolving Credit Commitment or (ii) the Total Revolving
Credit Commitment.
ARTICLE V
Representations and Warranties
The Borrower and each Guarantor represents and warrants with respect
to itself and its Material Subsidiaries that:
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5.1. Organization and Authority.
(a) The Borrower and each Material Subsidiary is a
corporation duly organized and validly existing under the laws of the
jurisdiction of its incorporation;
(b) The Borrower and each Material Subsidiary (x) has the
requisite power and authority to own its properties and assets and to
carry on its business as now being conducted and as contemplated in
the Loan Documents, and (y) is qualified to do business in every
jurisdiction in which failure so to qualify would have a Material
Adverse Effect;
(c) The Borrower has the power and authority to execute,
deliver and perform this Agreement and the Notes, and to borrow
hereunder, and to execute, deliver and perform each of the other Loan
Documents to which it is a party; and
(d) Each Guarantor will have the power and authority to
execute, deliver and perform the Subsidiary Guaranty and to execute,
deliver and perform the other Loan Documents to which it becomes a
party;
(e) When executed and delivered, each of the Loan
Documents to which the Borrower or any Guarantor is a party will be
the legal, valid and binding obligation or agreement, as the case may
be, of the Borrower or such Guarantor, enforceable against the
Borrower or such Guarantor in accordance with its terms, subject to
the effect of any applicable bankruptcy, moratorium, insolvency,
reorganization or other similar law affecting the enforceability of
creditors' rights generally and to the effect of general principles of
equity which may limit the availability of equitable remedies (whether
in a proceeding at law or in equity);
5.2. Loan Documents. The execution, delivery and performance by
the Borrower and each Guarantor of each of the Loan Documents to which it is a
party:
(a) have been duly authorized by all requisite corporate
action (including any required shareholder approval) of the Borrower
and each Guarantor required for the lawful execution, delivery and
performance thereof;
(b) do not violate any provisions of (i) applicable law, rule
or regulation, (ii) any order of any court or other agency of
government binding on the Borrower or any Subsidiary, or properties,
or (iii) the charter documents or bylaws of Borrower or any Material
Subsidiary;
(c) does not and will not be in conflict with, result in a
breach of or constitute an event of default, or an event which, with
notice or lapse of time, or both, would constitute an event of
default, under any material indenture, agreement or other instrument
to which Borrower or any Material
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Subsidiary is a party, or by which the properties or assets of
Borrower or any Material Subsidiary are bound;
(d) does not and will not result in the creation or
imposition of any Lien, charge or encumbrance of any nature whatsoever
upon any of the properties or assets of Borrower or any Material
Subsidiary;
5.3. Solvency. The Borrower is Solvent after giving effect to the
transactions contemplated by this Agreement and the other Loan Documents;
5.4. Subsidiaries and Stockholders. The Borrower has no
Subsidiaries other than those listed on Schedule 5.4 hereto and additional
Subsidiaries created or acquired after the Closing Date in compliance with
Section 6.23 hereof; Schedule 5.4 states as of the date hereof the
organizational form of each Subsidiary, the authorized and issued
capitalization of each Subsidiary listed thereon, the number of shares or other
equity interests of each class of capital stock or interest issued and
outstanding of each such Subsidiary and the number and percentage of
outstanding shares or other equity interest (including options, warrants and
other rights to acquire any interest) of each such class of capital stock or
equity interest owned by Borrower or by any such Subsidiary; the outstanding
shares or other equity interests of each such Subsidiary have been duly
authorized and validly issued and are fully paid and nonassessable; and
Borrower and each such Subsidiary owns beneficially and of record all the
shares and other interests it is listed as owning in Schedule 5.4, free and
clear of any Lien;
5.5. Ownership Interests. Borrower owns no interest in any Person
other than the Persons listed in Schedule 5.4 hereto;
5.6. Financial Condition.
(a) The Borrower has heretofore furnished to the Lender
consolidated balance sheets of the Borrower and its Subsidiaries, and
related notes thereto, and the related statements of operations,
stockholders equity and cash flows, and the related notes thereto,
dated April 2, 1995 with respect to Fiscal Year 1995;
(b) since April 2, 1995 there has been no material
adverse change in the condition, financial or otherwise, of the
Borrower or its Subsidiaries or in the businesses, properties and
operations of the Borrower or its Subsidiaries, nor have such
businesses or properties, taken as a whole, been materially adversely
affected as a result of any fire, explosion, earthquake, accident,
strike, lockout, combination of workers, flood, embargo or act of God;
(c) except as set forth on Schedule 5.6 hereto, neither
the Borrower nor any Subsidiary has incurred, other than in the
ordinary course of business, any material indebtedness, obligations,
commitments or other liability contingent or otherwise which remain
outstanding or unsatisfied;
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5.7. Title to Properties. The Borrower and each Material
Subsidiary has good and marketable title to all its real and personal
properties, subject to no transfer restrictions or Liens of any kind, except
for Permitted Liens;
5.8. Taxes. The Borrower and each Material Subsidiary has filed or
caused to be filed all federal, state and local tax returns which are required
to be filed by it and except for taxes and assessments being contested in good
faith by appropriate proceedings diligently conducted and against which
reserves satisfactory to the Borrower's independent certified public
accountants have been established, have paid or caused to be paid all taxes as
shown on said returns or on any assessment received by it, to the extent that
such taxes have become due;
5.9. Other Agreements. Neither the Borrower nor any Subsidiary is
(a) a party to any judgment, order, decree or any
agreement or instrument or subject to restrictions which could
reasonably be likely to have a Material Adverse Effect; or
(b) in default in the performance, observance or fulfillment
of any of the obligations, covenants or conditions contained in any
agreement or instrument to which the Borrower or any Subsidiary is a
party, which default has, or if not remedied within any applicable
grace period could reasonably be likely to have, a Material Adverse
Effect;
5.10. Litigation. There is no action, suit or proceeding at law or
in equity or by or before any governmental instrumentality or agency or
arbitral body pending, or, to the knowledge of the Borrower, threatened by or
against the Borrower or any Subsidiary or affecting the Borrower or any
Subsidiary or any properties or rights of the Borrower or any Subsidiary, which
could reasonably be likely to have a Material Adverse Effect;
5.11. Margin Stock. The Borrower does not own any "margin stock" as
such term is defined in Regulation U, as amended (12 C.F.R. Part 221), of the
Board. The proceeds of the borrowings made pursuant to Article II hereof will
be used by the Borrower only for the purposes set forth in Section 2.9 and
hereof. None of such proceeds will be used, directly or indirectly, for the
purpose of purchasing or carrying any margin stock or for the purpose of
reducing or retiring any Indebtedness which was originally incurred to purchase
or carry margin stock or for any other purpose which might constitute any of
the Loans under this Agreement a "purpose credit" within the meaning of said
Regulation U or Regulation X (12 C.F.R. Part 224) of the Board. Neither the
Borrower nor any agent acting in its behalf has taken or will take any action
which might cause this Agreement or any of the documents or instruments
delivered pursuant hereto to violate any regulation of the Board or to violate
the Securities Exchange Act of 1934, as amended, or the Securities Act of 1933,
as amended, or any state securities laws, in each case as in effect on the date
hereof;
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5.12. Investment Company; Public Utility Holding Company. Neither
the Borrower nor any Subsidiary is (a) an "investment company," or an
"affiliated person" of, or "promoter" or "principal underwriter" for, an
"investment company," as such terms are defined in the Investment Company Act
of 1940, as amended (15 U.S.C. Section 80a-1, et seq.) or (b) a "Holding
Company" or a "Subsidiary Company" of a "Holding Company" or an "Affiliate" of
a "Holding Company" or a "Subsidiary Company" of a "Holding Company," as such
terms are defined under the Public Utility Holding Company Act of 1935, as
amended. The application of the proceeds of the Loans and repayment thereof by
the Borrower and the performance by the Borrower and the Guarantors of the
transactions contemplated by this Agreement will not violate any provision of
said Acts, or any rule, regulation or order issued by the Securities and
Exchange Commission thereunder, in each case as in effect on the date hereof;
5.13. Patents, Etc. The Borrower and each Material Subsidiary owns
or has the right to use, under valid license agreements or otherwise, all
material patents, licenses, franchises, trademarks, trademark rights, trade
names, trade name rights, trade secrets and copyrights necessary to the conduct
of its businesses as now conducted, without known conflict with any patent,
license, franchise, trademark, trade secrets and confidential commercial or
proprietary information, trade name, copyright, rights to trade secrets or
other proprietary rights of any other Person;
5.14. No Untrue Statement. Neither (a) this Agreement nor any other
Loan Document or certificate or document executed and delivered by or on behalf
of the Borrower or any Guarantor in accordance with or pursuant to any Loan
Document nor (b) any statement, representation, or warranty provided to the
Lender in connection with the negotiation or preparation of the Loan Documents
contains any misrepresentation or untrue statement of material fact or omits to
state a material fact necessary, in light of the circumstance under which it
was made, in order to make any such representation or statement contained
therein not misleading;
5.15. No Consents, Etc. Neither the respective businesses or
properties of the Borrower or any Subsidiary, nor any relationship between the
Borrower or any Subsidiary and any other Person, nor any circumstance in
connection with the execution, delivery and performance of the Loan Documents
and the transactions contemplated hereby, is such as to require a consent,
approval or authorization of, or filing, registration or qualification with,
any governmental or other authority or any other Person on the part of the
Borrower or any Subsidiary as a condition to the execution, delivery and
performance of, or consummation of the transactions contemplated by, this
Agreement or the other Loan Documents, which, if not obtained or effected,
would reasonably likely to have a Material Adverse Effect, or if so, such
consent, approval, authorization, filing, registration or qualification has
been obtained or effected, as the case may be;
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5.16. Employee Benefit Plans.
(a) Neither the Borrower nor any ERISA Affiliate maintains
or contributes to, or has any obligation under, any Employee Benefit
Plans other than those identified on Schedule 5.16 hereto;
(b) The Borrower and each ERISA Affiliate is in compliance
with all applicable provisions of ERISA and the regulations and
published interpretations thereunder and in compliance with all
Foreign Benefit Laws with respect to all Employee Benefit Plans except
where failure to comply would not result in a Material Adverse Effect
and except for any required amendments for which the remedial
amendment period as defined in Section 401(b) of the Code has not yet
expired. Each Employee Benefit Plan that is intended to be qualified
under Section 401(a) of the Code has been determined by the Internal
Revenue Service to be so qualified, and each trust related to such
plan has been determined to be exempt under Section 501(a) of the
Code. No material liability has been incurred by the Borrower or any
ERISA Affiliate which remains unsatisfied for any taxes or penalties
with respect to any Employee Benefit Plan or any Multiemployer Plan;
(c) Other than as described on Schedule 5.16 hereto, no
Pension Plan has been terminated within the six year period prior to
the execution of this Agreement, nor has any accumulated funding
deficiency (as defined in Section 412 of the Code) been incurred
(without regard to any waiver granted under Section 412 of the Code),
nor has any funding waiver from the IRS been received or requested
with respect to any Pension Plan, nor has the Borrower or any ERISA
Affiliate failed to make any contributions or to pay any amounts due
and owing as required by Section 412 of the Code, Section 202 of ERISA
or the terms of any Pension Plan prior to the due dates of such
contributions under Section 412 of the Code or Section 202 of ERISA,
nor has there been any event requiring any disclosure under Section
4041(c)(3)(C), 4063(a) or 4068(f) of ERISA with respect to any Pension
Plan;
(d) Neither the Borrower nor any ERISA Affiliate has:
(i) engaged in a nonexempt prohibited transaction described in Section
406 of ERISA or Section 4975 of the Code, (ii) incurred any liability
to the PBGC which remains outstanding other than the payment of
premiums and there are no premium payments which are due and unpaid,
(iii) failed to make a required contribution or payment to a
Multiemployer Plan or (iv) failed to make a required installment or
other required payment under Section 412 of the Code;
(e) No Termination Event has occurred or is reasonably
expected to occur with respect to any Pension Plan or Multiemployer
Plan;
(f) No material proceeding, claim, lawsuit and/or
investigation exists or, to the best knowledge of the Borrower
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after due inquiry, is threatened concerning or involving any Employee
Benefit Plan;
5.17. No Default. No Default or Event of Default exists hereunder;
5.18. Hazardous Materials. To the best of the Borrower's knowledge,
the Borrower and each Subsidiary is in compliance with all applicable
Environmental Laws in all respects except where the failure to comply does not
have a Material Adverse Effect and the Borrower has not been notified of any
action, suit, proceeding or investigation which calls into question compliance
by the Borrower or any Material Subsidiary with any Environmental Laws or which
seeks to suspend, revoke or terminate any license, permit or approval necessary
for the generation, handling, storage, treatment or disposal of any Hazardous
Material;
5.19. Employment Matters. (a) None of the employees of the
Borrower or any Subsidiary is subject to any collective bargaining agreement
and there are no strikes, work stoppages, election or decertification petitions
or proceedings, unfair labor charges, equal opportunity proceedings, or other
material labor/employee related controversies or proceedings pending or, to the
best knowledge of the Borrower, threatened against the Borrower or any
Subsidiary or between the Borrower or any Subsidiary and any of its employees,
other than employee grievances arising in the ordinary course of business which
would not in the aggregate have a Material Adverse Effect;
(b) The Borrower and each Material Subsidiary is in compliance in all
respects with all applicable laws, rules and regulations pertaining to labor or
employment matters, including without limitation those pertaining to wages,
hours, occupational safety and taxation and there is neither pending or
threatened any material litigation, administrative proceeding or investigation
in respect of such matters.
ARTICLE VI
Affirmative Covenants
Until the Obligations have been paid and satisfied in full and this
Agreement has been terminated in accordance with the terms hereof, unless the
Lender shall otherwise consent in writing, the Borrower will and, where
applicable, will cause each Subsidiary to:
6.1. Financial Reports, Etc. (a) Annual Reporting. As soon
as practical and in any event within 120 days after the end of each Fiscal Year
of the Borrower, deliver or cause to be delivered to the Lender (i)
consolidated balance sheets of the Borrower and its Subsidiaries, and the notes
thereto, the related statements of operations, stockholders' equity and cash
flows, and the respective notes thereto, for such Fiscal Year, setting forth in
the case of the statements comparative financial statements for the preceding
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Fiscal Year, all prepared in accordance with GAAP applied on a Consistent Basis
and containing, with respect to the consolidated financial reports, opinions of
Deloitte & Touche, L.L.P., or other such independent certified public
accountants of nationally recognized standing, which are unqualified and
without exception (except as may be acceptable to the Lender) and (ii) a
certificate of an Authorized Representative demonstrating compliance with
Sections 7.1, 7.2 and 7.3 hereof, which certificate shall be in the form
attached hereto as Exhibit I hereof;
(b) Quarterly Reporting. As soon as practical and in any
event within 45 days after the end of each quarterly period (except the last
reporting period of the Fiscal Year), deliver to the Lender (i) consolidated
balance sheets of the Borrower and its Subsidiaries as of the end of such
reporting period, the related statements of operations, stockholders' equity
and cash flows for such reporting period and for the period from the beginning
of the Fiscal Year through the end of such reporting period, accompanied by a
certificate of an Authorized Representative to the effect that such financial
statements present fairly the financial position of the Borrower and its
Subsidiaries as of the end of such reporting period and the results of their
operations and the changes in their financial position for such reporting
period, in conformity with GAAP applicable to interim financial information and
the rules and regulations of the Securities and Exchange Commission with
respect to interim financials, and (ii) a certificate of an Authorized
Representative containing computations for such quarter comparable to that
required pursuant to Section 6.1(a)(ii) hereof;
(c) Accountants' Letter. Together with each delivery of
the financial statements required by Section 6.1(a)(i) hereof, deliver to the
Lender a letter from the Borrower's accountants specified in Section 6.1(a)(i)
hereof stating that in performing the audit necessary to render an opinion on
the financial statements delivered under Section 6.1(a)(i) hereof, they
obtained no knowledge of any Default or Event of Default by the Borrower or any
Subsidiary in the fulfillment of the terms and provisions of this Agreement or
the other Loan Documents to which it is a party insofar as they relate to
financial matters (which at the date of such statement remains uncured); and if
the accountants have obtained knowledge of such Default or Event of Default, a
statement specifying the nature and period of existence thereof;
(d) Special Reports. Promptly upon their becoming
available to the Borrower, the Borrower shall deliver to the Lender a copy of
(i) all regular or special reports or effective registration statements which
Borrower or any Subsidiary shall file with the Securities and Exchange
Commission (or any successor thereto) or any securities exchange, and (ii) any
proxy statement distributed by the Borrower or any Subsidiary to its
shareholders, bondholders or the financial community in general;
(e) Acquisition Information. At least 15 days prior to
the closing of any Acquisition with a Cost of Acquisition of $10,000,000 or
more, the Borrower shall deliver to the Lender (i) a copy of the term sheet,
letter of intent, financial projections
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showing the impact of the Acquisition, on the financial results and condition
of the Borrower and its Subsidiaries and general information on the scope of
and the findings relating to the Borrower's "due dilligence" conducted in
connection with such Acquisition, (ii) pro forma historical financial
statements as of the end of the most recently completed Fiscal Year giving
effect to such Acquisition, together with a certificate of an Authorized
Representative demonstrating compliance with Article VII hereof after giving
effect to such Acquisition, and (iii) to the extent other relevant
information regarding any such Acquisition is prepared and distributed to its
Board of Directors, a copy of such other information shall be delivered by the
Borrower to the Lender at the time such information is made available to the
Borrower's Board of Directors;
(f) Other Information. Promptly, from time to time,
deliver or cause to be delivered to the Lender such other information regarding
Borrower's or any Subsidiary's operations, business affairs and financial
condition as the Lender may reasonably request. The Lender is hereby
authorized to deliver a copy of any such financial information delivered
hereunder to the Lender (or any affiliate of the Lender), to any regulatory
authority having jurisdiction over the Lender pursuant to any written request
therefor, or to any other Person who shall acquire or consider the assignment
of or participation in any Loan permitted by this Agreement.
6.2. Maintain Properties. Maintain all properties necessary to its
operations in good working order and condition and make all needed repairs,
replacements and renewals as are reasonably necessary to conduct its business
in accordance with customary business practices.
6.3. Existence, Qualification, Etc. Do or cause to be done all
things necessary to preserve and keep in full force and effect its existence
and all material rights and franchises, trade names, trademarks and permits and
maintain its license or qualification to do business as a foreign corporation
and good standing in each jurisdiction in which its ownership or lease of
property or the nature of its business makes such license or qualification
necessary except where the failure to so qualify would not have a Material
Adverse Effect.
6.4. Regulations and Taxes. Comply in all material respects with
or contest in good faith all statutes and governmental regulations and pay all
taxes, assessments, governmental charges, claims for labor, supplies, rent and
any other obligation which, if unpaid, would become a Lien against any of its
properties except liabilities being contested in good faith by appropriate
proceedings diligently conducted and against which adequate reserves have been
established.
6.5. Insurance. (a) Keep all of its insurable properties
adequately insured at all times with responsible insurance carriers against
loss or damage by fire and other hazards to the extent and in the manner as are
customarily insured against by similar
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businesses owning such properties similarly situated, (b) maintain general
public liability insurance at all times with responsible insurance carriers
against liability on account of damage to persons and property having such
limits, deductibles, exclusions and co-insurance and other provisions providing
no less coverages than are maintained by similar businesses that are similarly
situated, such insurance policies to be in form reasonably satisfactory to the
Lender, and (c) maintain insurance under all applicable workers' compensation
laws (or in the alternative, maintain required reserves if self-insured for
workers' compensation purposes) and against loss by reason by business
interruption. Each of the policies of insurance described in this Section 6.5
shall provide that the insurer shall give the Lender not less than thirty (30)
days' prior written notice before any such policy shall be terminated, lapse or
be altered in any manner.
6.6. True Books. Keep true books of record and account in which
full, true and correct entries will be made of all of its dealings and
transactions, and set up on its books such reserves as may be required by GAAP
with respect to doubtful accounts and all taxes, assessments, charges, levies
and claims and with respect to its business in general, and include such
reserves in interim as well as year-end financial statements.
6.7. Payment of Other Indebtedness. Pay when due (or within
applicable grace periods) all Indebtedness (for which the failure to pay would
constitute an Event of Default under Section 8.1(e)) due third Persons, except
when the amount thereof is being contested in good faith by appropriate
proceedings diligently conducted and with reserves in form and amount
reasonably acceptable to the Lender therefor being set aside on the books of
the Borrower or the applicable Subsidiary.
6.8. Right of Inspection. Permit any Person designated by the
Lender to visit and inspect any of the properties, corporate books and
financial reports of the Borrower and to discuss its affairs, finances and
accounts with its principal officers and independent certified public
accountants, all at reasonable times, at reasonable intervals and with
reasonable prior notice, provided, that prior to the occurrence and continuance
of a Default or Event of Default, the expenses incurred in connection with such
visits and inspections shall be paid by the Borrower for only one such visit or
inspection each calendar year, and after the occurrence and during continuance
of a Default or an Event of Default, such expenses shall be paid by the
Borrower for all such visits and inspections.
6.9. Observe all Laws. Conform to and duly observe in all material
respects all laws, rules and regulations and all other valid requirements of
any regulatory authority with respect to the conduct of its business.
6.10. Governmental Licenses. Obtain and maintain all licenses,
permits, certifications and approvals of all applicable Governmental
Authorities as are required for the conduct of its business as currently
conducted and herein contemplated except
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where the failure to do so is not reasonably likely to result in a Material
Adverse Effect.
6.11. Covenants Extending to Other Persons. Cause each of its
Subsidiaries to do with respect to itself, its business and its assets, each of
the things required of the Borrower in this Article VI.
6.12. Officer's Knowledge of Default. Within five (5) days of any
officer of the Borrower obtaining knowledge of any Default or Event of Default
hereunder or under any other obligation of the Borrower or any Subsidiary to
the Lender, cause such officer or an Authorized Representative to notify the
Lender within such five (5) day period of the nature thereof, the period of
existence thereof, and what action the Borrower proposes to take with respect
thereto.
6.13. Suits or Other Proceedings. Upon any officer of the Borrower
or any Subsidiary obtaining knowledge of any litigation or other proceedings
being instituted against the Borrower or any Subsidiary, or any attachment,
levy, execution or other process being instituted against any assets of the
Borrower or any Subsidiary, making a claim or claims in an aggregate amount
greater than $1,000,000 or not otherwise covered by insurance, promptly deliver
to the Lender written notice thereof stating the nature and status of such
litigation, dispute, proceeding, levy, execution or other process.
6.14. Notice of Discharge of Hazardous Material or Environmental
Complaint. Promptly provide to the Lender true, accurate and complete copies
of any and all notices, complaints, orders, directives, claims, or citations
received by the Borrower or any Subsidiary relating to any (a) violation or
alleged violation by the Borrower or any Subsidiary of any applicable
Environmental Laws; (b) release or threatened release by the Borrower or any
Subsidiary, or at any facility or upon any property owned or operated by the
Borrower or any Subsidiary, of any Hazardous Material, except where occurring
legally; or (c) liability or alleged liability of the Borrower or any
Subsidiary for the costs of cleaning up, removing, remediating or responding to
a release of Hazardous Materials.
6.15. Environmental Compliance. If the Borrower or any Subsidiary
shall receive letter, notice, complaint, order, directive, claim or citation
alleging that the Borrower or and Subsidiary has violated any Environmental Law
or is liable for the costs of cleaning up, removing, remediating or responding
to a release of Hazardous Materials, the Borrower shall, within the time period
permitted by the applicable Environmental Law or the Governmental Authority
responsible for enforcing such Environmental Law, remove or remedy, or cause
the applicable Subsidiary to remove or remedy, such violation or release or
satisfy such liability, except where the applicability of the Environmental
Law, the fact of such violation or liability or what is required to remove or
remedy such violation is being contested by the Borrower or the applicable
Subsidiary by appropriate proceedings diligently
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conducted and all reserves with respect thereto as may be required under
Generally Accepted Accounting Principles, if any, have been made.
6.16. Indemnification. The Borrower hereby agrees to defend,
indemnify and hold the Lender, its affiliates and its officers, directors,
employees and agents, harmless from and against any and all claims, losses,
penalties, liabilities, damages and expenses (including, without limitation,
assessment and cleanup costs and reasonable attorneys' fees and disbursements)
arising directly or indirectly from, out of or by reason of (a) the violation
of any Environmental Law by the Borrower or any Subsidiary or with respect to
any property owned, operated or leased by the Borrower or any Subsidiary or (b)
the handling, storage, treatment, emission or disposal of any Hazardous
Material by or on behalf of the Borrower or any Subsidiary on or with respect
to property owned or leased or operated by the Borrower or any Subsidiary. The
Borrower shall not be liable under this Section 6.16 for any such amounts
arising solely as a result of the gross negligence or willful misconduct of any
indemnified party. The provisions of this Section 6.16 shall survive repayment
of the Obligations, occurrence of the Revolving Credit Termination Date and
expiration or termination of this Agreement.
6.17. Further Assurances. At the Borrower's cost and expense, upon
request of the Lender, duly execute and deliver or cause to be duly executed
and delivered, to the Lender such further instruments, documents, certificates,
financing and continuation statements, and do and cause to be done such further
acts that may be reasonably necessary or advisable in the reasonable opinion of
the Lender to carry out more effectively the provisions and purposes of this
Agreement and the other Loan Documents.
6.18. Employee Benefit Plans. With reasonable promptness, and in
any event within thirty (30) days thereof, give notice of and/or deliver to
Lender copies of (a) the establishment of any new Employee Benefit Plan, (b)
the commencement of contributions to any plan to which the Borrower or any of
its ERISA Affiliates was not previously contributing, (c) any material increase
in the benefits of any existing Employee Benefit Plan, (d) each funding waiver
request filed with respect to any Employee Benefit Plan and all communications
received or sent by the Borrower or any ERISA Affiliate with respect to such
request and (e) the failure of the Borrower or any ERISA Affiliate to make a
required installment or payment under Section 202 of ERISA or Section 412 of
the Code by the due date.
6.19. Termination Events. Promptly and in any event within fifteen
(15) days of becoming aware of the occurrence of or forthcoming occurrence of
any (a) Termination Event or (b) "prohibited transaction," as such term is
defined in Section 406 of ERISA or Section 4975 of the Code, in connection with
any Pension Plan or any trust created thereunder, deliver to the Lender a
notice specifying the nature thereof, what action the Borrower has taken, is
taking or proposes to take with respect thereto and,
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when known, any action taken or threatened by the Internal Revenue Service, the
Department of Labor or the PBGC with respect thereto.
6.20. ERISA Notices. With reasonable promptness but in any event
within fifteen (15) days for purposes of clauses (a), (b) and (c), deliver to
the Lender copies of (a) any unfavorable determination letter from the Internal
Revenue Service regarding the qualification of an Employee Benefit Plan under
Section 401(a) of the Code, (b) all notices received by the Borrower or any
ERISA Affiliate of the PBGC's intent to terminate any Pension Plan or to have a
trustee appointed to administer any Pension Plan, (c) each Schedule B
(Actuarial Information) to the annual report (Form 5500 Series) filed by the
Borrower or any ERISA Affiliate with the Internal Revenue Service with respect
to each Pension Plan and (d) all notices received by the Borrower or any ERISA
Affiliate from a Multiemployer Plan sponsor concerning the imposition or amount
of withdrawal liability pursuant to Section 4202 of ERISA. The Borrower will
notify the Lender in writing within five (5) Business Days of any Borrower
obtaining knowledge or reason to know that the Borrower or any ERISA Affiliate
has filed or intends to file a notice of intent to terminate any Pension Plan
under a distress termination within the meaning of Section 4041(c) of ERISA.
6.21. Continued Operations. Continue at all times (i) to conduct
its business and engage principally in the same line or lines of business
substantially as heretofore conducted and (ii) preserve, protect and maintain
free from Liens, other than Permitted Liens, its material patents, copyrights,
licenses, trademarks, trademark rights, trade names, trade name rights, trade
secrets and know-how necessary or useful in the conduct of its operations.
6.22. Use of Proceeds. Use the proceeds of the Loans solely for
the purposes specified in Section 2.9 hereof.
6.23. New Subsidiaries. Simultaneously with the acquisition or
creation of any Material Subsidiary, cause to be delivered to the Lender each
of the following:
(i) a Subsidiary Guaranty substantially in the form attached
hereto as Exhibit G;
(ii) an opinion of counsel to the Subsidiary dated as of the date
of delivery of the Subsidiary Guaranty provided in the foregoing
clause (i) and addressed to the Lender in form and substance
reasonably acceptable to the Lender (which opinion may include
assumptions and qualifications of similar effect to those contained in
the opinions of counsel delivered pursuant to Section 4.1(a)(iii))
hereof), to the effect that:
(A) such Subsidiary is duly organized, validly
existing and in good standing in the jurisdiction of its
organization, has the requisite power and authority to own its
properties and conduct its business as then owned and then
proposed to be conducted and is duly qualified
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to transact business and is in good standing as a foreign
corporation or partnership in the jurisdictions set forth in
such opinion; and
(B) the execution, delivery and performance of
the Subsidiary Guaranty described in clause (i) of this
Section 6.23 to which such Subsidiary is a signatory have been
duly authorized by all requisite corporate or partnership
action (including any required shareholder or partner
approval), such agreement has been duly executed and
delivered, constitutes the valid and binding obligation of
such Subsidiary, enforceable against such Subsidiary in
accordance with its terms, subject to the effect of any
applicable bankruptcy, moratorium, insolvency, reorganization
or other similar law affecting the enforceability of
creditors' rights generally and to the effect of general
principles of equity which may limit the availability of
equitable remedies (whether in a proceeding at law or in
equity) and to the actual knowledge of such counsel does not
and will not violate any laws, rules or regulations applicable
to the Subsidiary or violate or constitute a breach of any
contract, agreement, indenture, lease, instrument or other
document, judgment, writ, determination, order or decree to
which the Subsidiary is a party or by which the Subsidiary or
any of its properties are bound and which is set forth on a
schedule to such opinion; and
(iv) current copies of the charter documents, including
partnership agreements and certificate of limited partnership, if
applicable, and bylaws of such Subsidiary, minutes of duly called and
conducted meetings (or duly effected consent actions) of the Board of
Directors, partners, or appropriate committees thereof (and, if
required by such charter documents, bylaws or by applicable laws, of
the shareholders or partners) of such Subsidiary authorizing the
actions and the execution and delivery of documents described in
clause (i) of this Section 6.23 and evidence satisfactory to the
Lender (confirmation of the receipt of which will be provided by the
Lender) that such Subsidiary is Solvent as of such date and after
giving effect to the Subsidiary Guaranty.
ARTICLE VII
Negative Covenants
Until the Obligations have been paid and satisfied in full and this
Agreement has been terminated in accordance with the terms hereof, unless the
Lender shall otherwise consent in writing, the Borrower will not nor permit any
Subsidiary to:
7.1. Consolidated Leverage Ratio. Permit at any time the
Consolidated Leverage Ratio to be greater than .60 to 1.00.
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7.2. Consolidated Fixed Charge Coverage Ratio. Permit at any time
the Consolidated Fixed Charge Ratio of the Borrower to be less than 2.00 to
1.00.
7.3. Consolidated Shareholders' Equity. Permit Consolidated
Shareholders' Equity to be less than (i) the difference of $80,000,000 less the
effect of Permitted Stock Repurchases made subsequent to April 2, 1995 through
the end of the Fiscal Year ended March 31, 1996 and (ii) thereafter at all
times, the sum of (A) the amount of Consolidated Shareholders' Equity required
to be maintained pursuant to this Section 7.3 as at the end of the immediately
preceding Fiscal Year, plus (B) 50% of Net Income (with no reduction for net
losses during any period) for the Fiscal Year of the Borrower ending on such
day, plus (C) 100% of the aggregate amount of all increases in the stated
capital and additional paid-in capital accounts of the Borrower resulting from
the issuance of equity securities, conversion of any debt instruments into
equity or other capital investments.
7.4. Consolidated Cash Flow Ratio. Permit at the end of each
fiscal quarter of the Borrower the ratio of Consolidated Funded Indebtedness to
Consolidated Cash Flow for the Four-Quarter Period then ended to be greater
6.00 to 1.00.
7.5. Liens. Incur, create or permit to exist any pledge, Lien,
charge or other encumbrance of any nature whatsoever with respect to any
property or assets now owned or hereafter acquired by the Borrower or any
Subsidiary, other than the following (collectively, "Permitted Liens"):
(a) Liens existing as of the date hereof and as set forth
in Schedule 7.5 attached hereto;
(b) Liens imposed by law for taxes, assessments or
charges of any Governmental Authority for claims not yet due or which
are being contested in good faith by appropriate proceedings
diligently conducted and with respect to which adequate reserves or
other appropriate provisions are being maintained in accordance with
GAAP;
(c) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and other Liens imposed by law or
created in the ordinary course of business and in existence less than
90 days from the date of creation thereof for amounts not yet due or
which are being contested in good faith by appropriate proceedings
diligently conducted and with respect to which adequate reserves or
other appropriate provisions are being maintained in accordance with
GAAP;
(d) Liens incurred or deposits made in the ordinary
course of business (including, without limitation, surety bonds and
appeal bonds) in connection with workers' compensation, unemployment
insurance and other types of social security benefits or to secure the
performance of tenders, bids, leases, contracts (other than for the
repayment of Indebtedness), statutory obligations and other similar
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obligations or arising as a result of progress payments under
government contracts;
(e) purchase money Liens to secure Indebtedness incurred
to purchase fixed assets, provided the Indebtedness represents not
less than 75% of the purchase price of such assets as of the date of
purchase thereof and no property other than the assets so purchased
secures such Indebtedness; and
(f) Liens granted to the issuer of any documentary
letters of credit upon property shipped under or in connection with
such documentary letters of credit.
7.6. Transfer of Assets. Sell, lease, transfer or otherwise
dispose of all or substantially all of the assets of Borrower or any Material
Subsidiary in a single or series of related transactions.
7.7. Investments; Acquisitions. Make any acquisition or otherwise
purchase, own, invest in or otherwise acquire, directly or indirectly, any
stock or other securities, or make or permit to exist any interest whatsoever
in any other Person or permit to exist any loans or advances to any Person,
except that Borrower or any Subsidiary may maintain investments or invest in:
(a) Eligible Securities;
(b) investments in Subsidiaries existing as of the date
hereof and as set forth in Schedule 5.4 attached hereto;
(c) accounts receivable arising and trade credit granted
in the ordinary course of business and any securities received in
satisfaction or partial satisfaction thereof in connection with
accounts of financially troubled Persons to the extent reasonably
necessary in order to prevent or limit loss;
(d) other loans, advances and investments in an aggregate
principal amount at any time outstanding not to exceed $250,000; and
(e) loans in the ordinary course of business to
employees, affiliates and Subsidiaries who are not Guarantors in an
aggregate principal amount outstanding at any time of $5,000,000; and
(f) loans and advances to and investments in Subsidiaries
who are Guarantors.
Notwithstanding the foregoing, the Borrower and its Subsidiaries may make
Acquisitions so long as: (i) immediately prior to and immediately after the
consummation of such Acquisition, no Default or Event of Default has occurred
and is continuing, (ii) substantially all of the sales and operating profits
generated by such Person (or assets) so acquired or invested are derived from
the same or related line or lines of business as then conducted by the Borrower
and its Subsidiaries, (iii) a certificate of an
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Authorized Representative demonstrating compliance with Article VII hereof
after giving effect to such Acquisition, (iv) the Cost of Acquisition with
respect to any Acquisition entered into during the term of this Agreement shall
not exceed $25,000,000, (v) the aggregate amount of all Cost of Acquisitions
shall not exceed $40,000,000 during the term of this Agreement, and (v) in the
event the Person so acquired is not a Subsidiary, the Borrower's written
strategic plan (as reviewed by the Lender) includes additional investment in
such Person sufficient for it to become a Subsidiary.
7.8. Merger or Consolidation. (a) Consolidate with or merge into
any other Person, or (b) permit any other Person to merge into it, or (c)
liquidate, wind-up or dissolve or sell, transfer or lease or otherwise dispose
of all or a substantial part of its assets (other than sales in the ordinary
course of business); provided, however, any Subsidiary of the Borrower may
merge or transfer all or substantially all of its assets into or consolidate
with the Borrower or any wholly owned Subsidiary of the Borrower, and any
Person may merge with the Borrower if the Borrower shall be the survivor
thereof and such merger shall not cause, create or result in the occurrence of
any Default or Event of Default hereunder.
7.9. Restricted Payments. Make any Restricted Payments or apply or
set apart any of their assets therefor or agree to do any of the foregoing,
other than the negotiated or open market repurchase by the Borrower of up to
1,500,000 shares of its common capital stock for an aggregate purchase price
not to exceed $20,000,000 ("Permitted Stock Repurchases"), providing that at
the time of each repurchase and immediately after giving effect thereto no
Default or Event of Default shall exist or occur and be continuing.
7.10. Transactions with Affiliates. Other than transactions
permitted under Sections 7.7 hereof and transactions among the Borrower and
wholly owned Subsidiaries or among wholly owned Subsidiaries, enter into any
transaction after the Closing Date, including, without limitation, the
purchase, sale, lease or exchange of property, real or personal, or the
rendering of any service, with any Affiliate of the Borrower, except (a) that
such Persons may render services to the Borrower or its Subsidiaries for
compensation at the same rates generally paid by Persons engaged in the same or
similar businesses for the same or similar services, (b) that the Borrower or
any Subsidiary may render services to such Persons for compensation at the same
rates generally charged by the Borrower or such Subsidiary and (c) upon terms
no less favorable to the Borrower (or any Subsidiary) than would be obtained in
a comparable arm's-length transaction with a Person not an Affiliate.
7.11. Compliance with ERISA. With respect to any Pension Plan,
Employee Benefit Plan or Multiemployer Plan:
(a) permit the occurrence of any Termination Event which
would result in a liability to the Borrower or any ERISA Affiliate in
excess of $500,000;
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(b) permit the present value of all benefit liabilities
under all Pension Plans to exceed the current value of the assets of
such Pension Plans allocable to such benefit liabilities by more than
$500,000;
(c) permit any accumulated funding deficiency in excess
of $500,000 (as defined in Section 202 of ERISA and Section 412 of the
Code) with respect to any Pension Plan, whether or not waived;
(d) fail to make any contribution or payment to any
Multiemployer Plan which the Borrower or any ERISA Affiliate may be
required to make under any agreement relating to such Multiemployer
Plan, or any law pertaining thereto which results in or is likely to
result in a liability in excess of $500,000; or
(e) engage, or permit any Borrower or any ERISA Affiliate
to engage, in any prohibited transaction under Section 406 of ERISA or
Sections 4975 of the Code for which a civil penalty pursuant to
Section 502(i) of ERISA or a tax pursuant to Section 4975 of the Code
in excess of $500,000 may be imposed; or
(f) permit the establishment of any Employee Benefit Plan
providing post-retirement welfare benefits or establish or amend any
Employee Benefit Plan which establishment or amendment could result in
liability to the Borrower or any ERISA Affiliate or increase the
obligation of the Borrower or any ERISA Affiliate to a Multiemployer
Plan which liability or increase, individually or together with all
similar liabilities and increases, is in excess of $500,000; or
(g) fail, or permit the Borrower or any ERISA Affiliate
to fail, to establish, maintain and operate each Employee Benefit Plan
in compliance in all material respects with the provisions of ERISA,
the Code, all applicable Foreign Benefit Loans and all other
applicable laws and the regulations and official published
interpretations thereof.
7.12. Fiscal Year. Change its Fiscal Year.
7.13. Limitations on Sales and Leasebacks. Enter into any
arrangement with any Person providing for the leasing by the Borrower of real
or personal property which has been or is to be sold or transferred by the
Borrower to such Person or to any other Person to whom funds have been or are
to be advanced by such Person on the security of such property or rental
obligations of the Borrower ("Sale and Leaseback Transactions").
7.14. Dissolution, etc. Wind up, liquidate or dissolve (voluntarily
or involuntarily) or commence or suffer any proceedings seeking any such
winding up, liquidation or dissolution.
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ARTICLE VIII
Events of Default and Acceleration
8.1. Events of Default. If any one or more of the following events
("Events of Default") shall occur for any reason whatsoever (and whether such
occurrence shall be voluntary or involuntary or come about or be effected by
operation of law or pursuant to or in compliance with any judgment, decree or
order of any court or any order, rule or regulation of any administrative or
governmental body):
(a) if default shall be made in the due and punctual
payment of the principal of any Loan or other Obligation, when and as
the same shall be due and payable whether pursuant to any provision of
Article II hereof, at maturity, by acceleration or otherwise; or
(b) if default shall be made in the due and punctual
payment of any amount of interest on any Loan or of any fees or other
amounts payable to the Lender under the Loan Documents on the date on
which the same shall be due and payable; or
(c) if default shall be made in the performance or
observance of any covenant set forth in Sections 6.8, 6.12, 6.22, 6.23
or Article VII hereof;
(d) if a default shall be made in the performance or
observance of, or shall occur under, any covenant, agreement or
provision contained in this Agreement, the Notes or the other Loan
Documents (other than as described in clauses (a), (b) or (c) above)
or any other agreement between the Borrower and the Lender creating or
relating to any Indebtedness between the Borrower and the Lender and
such default shall continue for 30 or more days after the earlier of
receipt of notice of such default by the Authorized Representative
from the Lender or an officer of the Borrower becomes aware of such
default, or if a default shall be made in the performance or
observance of, or shall occur under, any covenant, agreement or
provision contained in any of the other Loan Documents (beyond any
applicable grace period, if any, contained therein) or in any
instrument or document evidencing or creating any obligation,
guaranty, or Lien in favor of the Lender or delivered to the Lender in
connection with or pursuant to this Agreement or any of the
Obligations, or if any Loan Document ceases to be in full force and
effect (other than by reason of any action by the Lender), or if
without the written consent of the Lender this Agreement or any other
Loan Document shall be disaffirmed or shall terminate, be terminable
or be terminated or become void or unenforceable for any reason
whatsoever (other than in accordance with its terms in the absence of
default or by reason of any action by the Lender); or
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(e) the Borrower or any Subsidiary shall fail to make any
payment in respect of Indebtedness outstanding (other than the Notes)
when due or within any applicable grace period; or
(f) any event or condition shall occur which results in
the acceleration of the maturity of Indebtedness outstanding of the
Borrower or any Subsidiary or the mandatory prepayment or purchase of
such Indebtedness by the Borrower (or its designee) or such Subsidiary
(or its designee) prior to the scheduled maturity thereof, or enables
(or, with the giving of notice or lapse of time or both, would enable)
the holders of such Indebtedness or any Person acting on such holders'
behalf to accelerate the maturity thereof or require the mandatory
prepayment or purchase thereof prior to the scheduled maturity
thereof, without regard to whether such holders or other Person shall
have exercised or waived their right to do so; or
(g) if any material representation, warranty or other
statement of fact contained herein or any other Loan Document or in
any writing, certificate, report or statement at any time furnished to
the Lender by or on behalf of the Borrower or any Guarantor pursuant
to or in connection with this Agreement or the other Loan Documents,
or otherwise, shall be false or misleading in any material respect
when given; or
(h) if the Borrower or any Guarantor shall be unable to
pay its debts generally as they become due; file a petition to take
advantage of any insolvency statute; make an assignment for the
benefit of its creditors; commence a proceeding for the appointment of
a receiver, trustee, liquidator or conservator of itself or of the
whole or any substantial part of its property; file a petition or
answer seeking reorganization or arrangement or similar relief under
the federal bankruptcy laws or any other applicable law or statute; or
(i) if a court of competent jurisdiction shall enter an
order, judgment or decree appointing a custodian, receiver, trustee,
liquidator or conservator of the Borrower or any Guarantor or of the
whole or any substantial part of its properties and such order,
judgment or decree continues unstayed and in effect for a period of
thirty (30) days, or approve a petition filed against the Borrower or
any Guarantor seeking reorganization or arrangement or similar relief
under the federal bankruptcy laws or any other applicable law or
statute of the United States of America or any state, which petition
is not dismissed within thirty (30) days; or if, under the provisions
of any other law for the relief or aid of debtors, a court of
competent jurisdiction shall assume custody or control of the Borrower
or any Guarantor or of the whole or any substantial part of its
properties, which control is not relinquished within thirty (30) days;
or if there is commenced against the Borrower any proceeding or
petition seeking reorganization, arrangement or similar relief under
the federal bankruptcy laws or any other applicable law or statute of
the United States of America or any state which
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proceeding or petition remains undismissed for a period of thirty (30)
days; or if the Borrower or any Guarantor takes any action to indicate
its consent to or approval of any such proceeding or petition; or
(j) if (i) any judgment where the amount not covered by
insurance (or the amount as to which the insurer denies liability) is
in excess of $500,000 is rendered against the Borrower or any
Guarantor, or (ii) there is any attachment, injunction or execution
against any of the properties of the Borrower or any Guarantor for any
amount in excess of $500,000; and such judgment, attachment,
injunction or execution remains unpaid, unstayed, undischarged,
unbonded or undismissed for a period of thirty (30) days; or
(k) if the Borrower or any Guarantor shall suspend all or
any part of its operations material to the conduct of the business of
the Borrower for a period of more than 120 days; or
(l) if the Borrower shall breach any of the material
terms or conditions of any Swap Agreement with the Lender and such
breach shall continue beyond any grace period, if any, relating
thereto pursuant to its terms; or
(m) if the Borrower shall cause, suffer or permit (i) any
"person" or "group" (as such terms are used in Sections 13(d) and
14(d) of the Exchange Act), other than the Bernstein Family or the
Crown ESOP to own or control, directly or indirectly, more than thirty
percent (30%) of the capital stock of the Borrower having voting
rights in the election of directors, or any other equity security or a
security convertible into or exchangeable or redeemable for any equity
security or (ii) individuals who at the Closing Date constituted the
Board of Directors (together with any new directors whose election by
the Board of Directors or whose nomination for election by the
stockholders of the Borrower was approved by a vote of a majority of
the directors of the Borrower then still in office who were either
directors at the Closing Date or whose election or nomination for
election was previously so approved) to cease for any reason to
constitute at least a majority of the Board of Directors then in
office;
then, and in any such event and at any time thereafter, if such Event of
Default or any other Event of Default shall have not been waived,
(A) either or both of the following actions may
be taken: (i) the Lender may declare any obligation of the
Lender to make further Revolving Loans terminated, whereupon
the obligation of the Lender to make further Revolving Loans
hereunder shall terminate immediately, and (ii) the Lender
may, at its option, declare by notice to the Borrower any or
all of the Obligations to be immediately due and payable, and
the same, including all interest accrued thereon and all other
obligations of the
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Borrower to the Lender shall forthwith become immediately due
and payable without presentment, demand, protest, notice or
other formality of any kind, all of which are hereby expressly
waived, anything contained herein or in any instrument
evidencing the Obligations to the contrary notwithstanding;
provided, however, that notwithstanding the above, if there
shall occur an Event of Default under clause (h) or (i) above,
then the obligation of the Lender to make Revolving Loans
hereunder shall automatically terminate and any and all of the
Obligations shall be immediately due and payable without the
necessity of any action by the Lender; and
(B) the Lender shall have all of the rights and
remedies available under the Loan Documents or under any
applicable law.
8.2. Lender to Act. In case any one or more Events of Default
shall occur and not have been waived, the Lender may proceed to protect and
enforce its rights or remedies either by suit in equity or by action at law, or
both, whether for the specific performance of any covenant, agreement or other
provision contained herein or in any other Loan Document, or to enforce the
payment of the Obligations or any other legal or equitable right or remedy.
8.3. Cumulative Rights. No right or remedy herein conferred upon
the Lender is intended to be exclusive of any other rights or remedies
contained herein or in any other Loan Document, and every such right or remedy
shall be cumulative and shall be in addition to every other such right or
remedy contained herein and therein or now or hereafter existing at law or in
equity or by statute, or otherwise.
8.4. No Waiver. No course of dealing between the Borrower and the
Lender or any failure or delay on the part of the Lender in exercising any
rights or remedies under any Loan Document or otherwise available to it shall
operate as a waiver of any rights or remedies and no single or partial exercise
of any rights or remedies shall operate as a waiver or preclude the exercise of
any other rights or remedies hereunder or of the same right or remedy on a
future occasion.
8.5. Allocation of Proceeds. If an Event of Default has
occurred and not been waived, and the maturity of the Notes has been
accelerated pursuant to Article VIII hereof, all payments received by the
Lender hereunder, in respect of any principal of or interest on the Obligations
or any other amounts payable by the Borrower hereunder shall be applied by the
Lender in the following order:
(a) amounts due to the Lender pursuant to Sections 2.8
and 9.5 hereof;
(b) payments of interest on Loans;
(c) payments of principal of Loans;
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(d) amounts due to the Lender pursuant to Sections 6.16
and 9.9 hereof;
(e) payments of all other amounts due under this
Agreement;
(f) amounts due to the Lender in respect of Obligations
consisting of liabilities under any Swap Agreement with the Lender;
and
(g) any surplus remaining after application as provided
for herein, to the Borrower or otherwise as may be required by
applicable law.
ARTICLE IX
Miscellaneous
9.1. Assignments and Participations. (a) At any time after the
Closing Date the Lender may, with the prior written consent of the Borrower
provided no Event of Default has occurred and is continuing, assign to one or
more banks or financial institutions all or a portion of its rights and
obligations under this Agreement (including, without limitation, all or a
portion of the Note payable to its order); provided, that (i) each such
assignment shall be of a constant and not a varying percentage of all of the
assigning Lender's rights and obligations under the Revolving Credit Facility
of this Agreement, (ii) for each assignment involving the issuance and transfer
of a Note, the assigning Lender shall execute an Assignment and Acceptance and
the Borrower hereby consents to execute a replacement Note to give effect to
the assignment, (iii) the minimum Revolving Credit Commitment which shall be
assigned is $5,000,000 or, if less, its total Revolving Credit Commitment, (iv)
such assignee shall have an office located in the United States, and (v) no
consent of the Borrower shall be required in connection with any assignment by
the Lender to an affiliate of the Lender. Upon such execution, delivery,
approval and acceptance, from and after the effective date specified in each
Assignment and Acceptance, (x) the assignee thereunder shall be a party hereto
and, to the extent that rights and obligations hereunder or under such Note
have been assigned or negotiated to it pursuant to such Assignment and
Acceptance have the rights and obligations of a Lender hereunder and a holder
of such Note and (y) the assignor thereunder shall, to the extent that rights
and obligations hereunder or under such Note have been assigned or negotiated
by it pursuant to such Assignment and Acceptance, relinquish its rights and be
released from its obligations under this Agreement.
(b) By executing and delivering an Assignment and
Acceptance, the Lender assignor thereunder and the assignee thereunder confirm
to and agree with each other and the other parties hereto as follows: (i) the
assignment made under such Assignment and Acceptance is made under such
Assignment and
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Acceptance without recourse; (ii) such assigning Lender makes no representation
or warranty and assumes no responsibility with respect to the financial
condition of the Borrower or the performance or observance by the Borrower of
any of its obligations under any Loan Document or any other instrument or
document furnished pursuant hereto; (iii) such assignee confirms that it has
received a copy of this Agreement, together with copies of the financial
statements delivered pursuant to Section 5.6 or Section 6.1, as the case may
be, and such other Loan Documents and other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
such Assignment and Acceptance; (iv) such assignee will, independently and
without reliance upon the assigning Lender or any other Lender and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement; and (v) such assignee agrees that it will perform in accordance
with their terms all of the obligations which by the terms of this Agreement
are required to be performed by it as a Lender and a holder of such Notes.
(c) Nothing herein shall prohibit the Lender from
pledging or assigning, without notice or consent, any Note to any Federal
Reserve Bank in accordance with applicable law.
(d) The Lender may sell participations at its expense to
one or more banks or other financial institutions as to all or a portion of its
rights and obligations under this Agreement; provided, that (i) the Lender's
obligations under this Agreement shall remain unchanged, (ii) the Lender shall
remain solely responsible to the Borrower for the performance of such
obligations, (iii) the Lender shall remain the holder of any Note issued to it
for the purpose of this Agreement, (iv) such participations shall be in a
minimum amount of $5,000,000 or, if less, its total Revolving Credit
Commitment, and (v) the Borrower shall continue to deal solely and directly
with the Lender in connection with the Lender's rights and obligations under
this Agreement and with regard to any and all payments to be made under this
Agreement; provided, that the participation agreement between the Lender and
its participants may provide that the Lender will obtain the approval of such
participant prior to the Lender's agreeing to any amendment or waiver of any
provisions of this Agreement which would (A) extend the maturity of any Note,
(B) reduce the interest rates hereunder or (C) increase the Revolving Credit
Commitment of the Lender granting the participation, and (vi) the sale of any
such participations which require Borrower to file a registration statement
with the United States Securities and Exchange Commission or under the
securities regulations or laws of any state shall not be permitted.
(e) The Borrower may not assign any rights, powers,
duties or obligations under this Agreement or the other Loan Documents without
the prior written consent of the Lender.
9.2. Notices. Any notice shall be conclusively deemed to have been
received by any party hereto and be effective on the day on which delivered to
such party (against receipt therefor) at the
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address set forth below or such other address as such party shall specify to
the other parties in writing (or, in the case of notice by telecopy, telegram
or telex (where the receipt of such message is verified by return) expressly
provided for hereunder, when received at such telecopy or telex number as may
from time to time be specified in written notice to the other parties hereto or
otherwise received), or if sent prepaid by certified or registered mail return
receipt requested on the fifth Business Day after the day on which mailed,
addressed to such party at said address:
(a) if to the Borrower:
Crown Crafts, Inc.
1600 Riveredge Parkway
Suite 200
Atlanta, Georgia 30328
Attn: Treasurer
Telephone: (404) 644-6235
Telefacsimile: (404) 644-6233
(b) if to the Lender:
Wachovia Bank of Georgia, N.A.
191 Peachtree Street, N.E.
Atlanta, Georgia 30303-1757
Attention: Commercial Group
Telephone: (404) 332-6093
Telefacsimile: (404) 332-6920
9.3. Survival. All covenants, agreements, representations and
warranties made herein shall survive the making by the Lender of the Loans and
the execution and delivery to the Lenders of this Agreement and the Notes and
shall continue in full force and effect so long as any of the Obligations
remain outstanding or the Lender has any commitment hereunder or the Borrower
has continuing obligations hereunder unless otherwise provided herein.
Whenever in this Agreement, any of the parties hereto is referred to, such
reference shall be deemed to include the successors and permitted assigns of
such party and all covenants, provisions and agreements by or on behalf of the
Borrower which are contained in this Agreement, the Notes and the other Loan
Documents shall inure to the benefit of the successors and permitted assigns of
the Lender or any of them.
9.4. Expenses. The Borrower agrees prior to and after the
occurrence of an Event of Default (a) to pay or reimburse the Lender for all
its reasonable out-of-pocket costs and expenses incurred in connection with the
preparation, negotiation and execution of, and any amendment, supplement or
modification to, this Agreement or any of the other Loan Documents (including
travel expenses relating to closing), and the consummation of the transactions
contemplated hereby and thereby, including, without limitation, the reasonable
fees and disbursements of counsel to the Lender, (b) to pay or reimburse the
Lender for all its costs and expenses incurred in connection with the
enforcement or preservation of any rights under this Agreement and the other
Loan
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Documents, including without limitation, the reasonable fees and disbursements
of its counsel and (c) to pay, indemnify and hold the Lender harmless from any
and all recording and filing fees and any and all liabilities with respect to,
or resulting from any failure to pay or delay in paying, documentary, stamp,
excise and other similar taxes, if any, which may be payable or determined to
be payable in connection with the execution and delivery of this Agreement or
any other Loan Documents, or consummation of any amendment, supplement or
modification of, or any waiver or consent under or in respect of, this
Agreement or any other Loan Documents.
9.5. Amendments. No amendment, modification or waiver of any
provision of this Agreement or any of the Loan Documents and no consent by the
Lender to any departure therefrom by the Borrower shall be effective unless
such amendment, modification or waiver shall be in writing and signed by the
Lender and the same shall then be effective only for the period and on the
conditions and for the specific instances and purposes specified in such
writing.
9.6. Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed an
original, and it shall not be necessary in making proof of this Agreement to
produce or account for more than one such fully-executed counterpart.
9.7. Termination. The termination of this Agreement shall not
affect any rights of the Borrower or the Lender or any obligation of the
Borrower or the Lender arising prior to the effective date of such termination,
and the provisions hereof shall continue to be fully operative until all
transactions entered into or rights created or obligations incurred prior to
such termination have been fully disposed of, concluded or liquidated and the
Obligations arising prior to or after such termination have been irrevocably
paid in full. The rights granted to the Lender hereunder and under the other
Loan Documents shall continue in full force and effect, notwithstanding the
termination of this Agreement, until all of the Obligations have been paid in
full after the termination hereof (other than Obligations in the nature of
continuing indemnities or expense reimbursement obligations not yet due and
payable) or the Borrower has furnished the Lender with an indemnification
satisfactory to the Lender with respect thereto. All representations,
warranties, covenants, waivers and agreements contained herein shall survive
termination hereof until payment in full of the Obligations unless otherwise
provided herein. Notwithstanding the foregoing, if after receipt of any
payment of all or any part of the Obligations the Lender is for any reason
compelled to surrender such payment to any Person because such payment is
determined to be void or voidable as a preference, impermissible setoff, a
diversion of trust funds or for any other reason, this Agreement shall continue
in full force and the Borrower shall be liable to, and shall indemnify and hold
the Lender harmless for, the amount of such payment surrendered until the
Lender shall have been finally and irrevocably paid in full. The provisions of
the foregoing sentence shall be and remain effective notwithstanding any
contrary action which may have been taken by the Lender in reliance upon such
payment, and any such
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contrary action so taken shall be without prejudice to the Lender's rights
under this Agreement and shall be deemed to have been conditioned upon such
payment having become final and irrevocable.
9.8. Indemnification. In consideration of the execution and
delivery of this Agreement by the Lender and the extension of the Revolving
Credit Commitments, the Borrower hereby indemnifies, exonerates and holds the
Lender and its officers, directors, employees and agents (collectively, the
"Indemnified Parties") free and harmless from and against any and all actions,
causes of action, suits, losses, costs, liabilities and damages, and expenses
incurred in connection therewith (irrespective of whether any such Indemnified
Party is a party to the action for which indemnification hereunder is sought),
including reasonable attorneys' fees and disbursements (collectively, the
"Indemnified Liabilities"), incurred by the Indemnified Parties or any of them
as a result of, or arising out of, or relating to the execution, delivery,
enforcement performance or administration of this Agreement and the other Loan
Documents, or any transaction financed or to be financed in whole or in part,
directly or indirectly, with the proceeds of any Loan, except for any such
Indemnified Liabilities arising for the account of a particular Indemnified
Party by reason of the bad faith, gross negligence or willful misconduct of, or
breach of the Loan Documents by, such Indemnified Party or an officer,
co-officer, director, co-director, employee, co-employee, agent or co-agent of
such Indemnified Party, and if and to the extent that the foregoing undertaking
may be unenforceable for any reason, the Borrower hereby agrees to make the
maximum contribution to the payment and satisfaction of each of the Indemnified
Liabilities which is permissible under applicable law. The indemnification and
hold harmless provisions of this Section 9.9 shall survive repayment of the
Obligations, occurrence of the Revolving Credit Termination Date and expiration
or termination of this Agreement.
9.9. Headings and References. The headings of the Articles and
Sections of this Agreement are inserted for convenience of reference only and
are not intended to be a part of, or to affect the meaning or interpretation of
this Agreement. Words such as "hereof", "hereunder", "herein" and words of
similar import shall refer to this Agreement in its entirety and not to any
particular Section or provisions hereof, unless so expressly specified. As
used herein, the singular shall include the plural, and the masculine shall
include the feminine or a neutral gender, and vice versa, whenever the context
requires.
9.10. Severability. If any provision of this Agreement or the other
Loan Documents shall be determined to be illegal or invalid as to one or more
of the parties hereto, then such provision shall remain in effect with respect
to all parties, if any, as to whom such provision is neither illegal nor
invalid, and in any event all other provisions hereof shall remain effective
and binding on the parties hereto.
9.11. Entire Agreement. This Agreement, together with the other
Loan Documents, constitutes the entire agreement between the parties with
respect to the subject matter hereof and supersedes
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<PAGE> 61
all previous proposals, negotiations, representations, commitments and other
communications between or among the parties, both oral and written, with
respect thereto.
9.12. Agreement Controls. In the event that any term of any of the
Loan Documents other than this Agreement conflicts with any term of this
Agreement, the terms and provisions of this Agreement shall control.
9.13. Usury Savings Clause. Notwithstanding any other provision
herein, the aggregate interest rate charged under any of the Notes, including
all charges or fees in connection therewith deemed in the nature of interest
under North Carolina or Georgia law, shall not exceed the Highest Lawful Rate
(as such term is defined below). If the rate of interest (determined without
regard to the preceding sentence) under this Agreement at any time exceeds the
Highest Lawful Rate (as defined below), the outstanding amount of the Loans
made hereunder shall bear interest at the Highest Lawful Rate until the total
amount of interest due hereunder equals the amount of interest which would have
been due hereunder if the stated rates of interest set forth in this Agreement
had at all times been in effect. In addition, if when the Loans made hereunder
are repaid in full the total interest due hereunder (taking into account the
increase provided for above) is less than the total amount of interest which
would have been due hereunder if the stated rates of interest set forth in this
Agreement had at all times been in effect, then to the extent permitted by law,
the Borrower shall pay to the Lender an amount equal to the difference between
the amount of interest paid and the amount of interest which would have been
paid if the Highest Lawful rate had at all times been in effect.
Notwithstanding the foregoing, it is the intention of the Lender and the
Borrower to conform strictly to any applicable usury laws. Accordingly, if any
lender contracts for, charges, or receives any consideration which constitutes
interest in excess of the Highest Lawful rate, then any such excess shall be
cancelled automatically and, if previously paid, shall at the Lender's option
be applied to the outstanding amount of the Loans made hereunder or be refunded
to the Borrower. As used in this paragraph, the term "Highest Lawful Rate"
means the maximum lawful interest rate, if any, that at any time or from time
to time may be contracted for, charged, or received under the laws applicable
to such Lender which are presently in effect or, to the extent allowed by law,
under such applicable laws which may hereafter be in effect and which allow a
higher maximum nonusurious interest rate than applicable laws now allow.
9.14. GOVERNING LAW; ETC..
(a) THIS AGREEMENT AND EACH OF THE OTHER LOAN DOCUMENTS
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF GEORGIA APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY
PERFORMED, IN SUCH STATE.
(b) THE BORROWER HEREBY EXPRESSLY AND IRREVOCABLY AGREES
AND CONSENTS THAT ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT AND THE TRANSACTIONS
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<PAGE> 62
CONTEMPLATED HEREIN MAY BE INSTITUTED IN ANY STATE OR FEDERAL COURT
SITTING IN THE COUNTY OF FULTON, UNITED STATES OF AMERICA AND, BY THE
EXECUTION AND DELIVERY OF THIS AGREEMENT, THE BORROWER EXPRESSLY
WAIVES ANY OBJECTION THAT IT MAY HAVE NOW OR HEREAFTER TO THE LAYING
OF THE VENUE OR TO THE JURISDICTION OF ANY SUCH SUIT, ACTION OR
PROCEEDING, AND IRREVOCABLY SUBMITS GENERALLY AND UNCONDITIONALLY TO
THE JURISDICTION OF ANY SUCH COURT IN ANY SUCH SUIT, ACTION OR
PROCEEDING.
(c) THE BORROWER AGREES THAT SERVICE OF PROCESS MAY BE
MADE BY PERSONAL SERVICE OF A COPY OF THE SUMMONS AND COMPLAINT OR
OTHER LEGAL PROCESS IN ANY SUCH SUIT, ACTION OR PROCEEDING, OR BY
REGISTERED OR CERTIFIED MAIL (POSTAGE PREPAID) TO THE ADDRESS OF THE
BORROWER PROVIDED IN Section 9.2 HEREOF, OR BY ANY OTHER METHOD OF
SERVICE PROVIDED FOR UNDER THE APPLICABLE LAWS IN EFFECT IN THE STATE
OF GEORGIA.
(d) NOTHING CONTAINED IN SUBSECTIONS (B) OR (C) HEREOF
SHALL PRECLUDE THE SECURED PARTY FROM BRINGING ANY SUIT, ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE OTHER
LOAN DOCUMENTS IN THE COURTS OF ANY PLACE WHERE THE BORROWER OR ANY OF
THE BORROWER'S PROPERTY OR ASSETS MAY BE FOUND OR LOCATED. TO THE
EXTENT PERMITTED BY THE APPLICABLE LAWS OF ANY SUCH JURISDICTION, THE
BORROWER HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH
COURT AND EXPRESSLY WAIVES, IN RESPECT OF ANY SUCH SUIT, ACTION OR
PROCEEDING, THE JURISDICTION OF ANY OTHER COURT OR COURTS WHICH NOW OR
HEREAFTER, BY REASON OF ITS PRESENT OR FUTURE DOMICILE, OR OTHERWISE,
MAY BE AVAILABLE TO IT.
(e) IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY
RIGHTS OR REMEDIES UNDER OR RELATED TO THIS AGREEMENT OR ANY
AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR THAT MAY IN
THE FUTURE BE DELIVERED IN CONNECTION WITH THE FOREGOING, THE BORROWER
HEREBY AGREES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, THAT ANY
SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE
A JURY AND THE BORROWER HEREBY WAIVES, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, ANY OBJECTION THAT IT MAY HAVE THAT EACH ACTION OR
PROCEEDING HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
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<PAGE> 63
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be made, executed and delivered by their duly authorized officers as of the day
and year first above written.
<TABLE>
<S> <C>
CROWN CRAFTS, INC.
ATTEST: By: /s/ Robert E. Schnelle
----------------------
Name: Robert E. Schnelle
/s/ Roger D. Chittum Title: Treasurer
- -----------------------
Secretary
[CORPORATE SEAL]
WACHOVIA BANK OF GEORGIA, N.A., as Lender
By: /s/ Susan E. Cates
----------------------
Name: Susan E. Cates
Title: Commercial Officer
Lending Office:
Wachovia Bank of Georgia, N.A.
191 Peachtree Street, N.E.
Atlanta, Georgia 30303-1757
</TABLE>
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<PAGE> 64
EXHIBIT A
Commitment
<TABLE>
<CAPTION>
Loan
Lender Commitment
- ------ ----------
<S> <C>
Wachovia Bank of Georgia, N.A. $15,000,000
</TABLE>
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<PAGE> 65
EXHIBIT B
Form of Assignment and Acceptance
DATED _______________, ____
Reference is made to the Revolving Credit Agreement dated as of August
25, 1995 (the "Agreement") between Crown Crafts, Inc., a Georgia corporation
(the "Borrower") and Wachovia Bank of Georgia, N.A., as Lender ("Lender").
Unless otherwise defined herein, terms defined in the Agreement are used herein
with the same meanings.
________________________ (the "Assignor") and ________________________
_________________ (the "Assignee") agree as follows:
1. The Assignor hereby sells and assigns to the Assignee, and the
Assignee hereby purchases and assumes from the Assignor, WITHOUT RECOURSE, a
_______% (1) interest in and to all of the Assignor's rights and obligations
under the Agreement as of the Effective Date (as defined below), including,
without limitation, such percentage interest in the Loans owing to the Assignor
on the Effective Date and evidenced by the Revolving Note held by the Assignor.
2. The Assignor (i) represents and warrants that, as of the date
hereof, the aggregate principal amount of Revolving Loans owing to it (without
giving effect to the assignments thereof which have not yet become effective)
is $__________ under a Revolving Note dated ____________, 19__ in the aggregate
principal amount of $_________; (ii) represents and warrants that it is the
legal and beneficial owner of the interest being assigned by it hereunder and
that such interest is free and clear of any adverse claim; (iii) makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the
Agreement or any of the Loan Documents or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Agreement or any of
the Loan Documents or any other instrument or document furnished pursuant
thereto; (iv) makes no representation or warranty and assumes no responsibility
with respect to the financial condition of the Borrower or the performance or
observance by the Borrower of any of its obligations under the Agreement or any
of the Loan Documents or any other instrument or document furnished pursuant
thereto and (v) attaches hereto the Revolving Note referred to in paragraph 1
above and requests that the Lender exchange such Note for Notes as follows: a
Revolving Note dated _____________, 19__ in the principal amount of
$________________, payable to the order of the Assignor, and a Revolving Note,
dated ____________________________ 19__, in the principal amount of
$_________________ payable to the order of the Assignee.
____________________
(1) Specify percentage in no more than 4 decimal points.
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<PAGE> 66
3. The Assignee (i) confirms that it has received a copy of the
Agreement, together with copies of the most recent financial statements
referred to in Section 7.1 thereof and such other documents and information as
it has deemed appropriate to make its own credit analysis and decision to enter
into this Assignment and Acceptance; (ii) agrees that it will, independently
and without reliance upon the Lender, the Assignor, or any other Lender and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under the Agreement; (iii) will perform all of the obligations which by the
terms of the Agreement are required to be performed by the Lender; and (v)
specifies as its address for notices the office set forth beneath its name on
the signature pages hereof.
4. The effective date for this Assignment and Acceptance shall be
_____________________________ (the "Effective Date").
5. Upon such acceptance and recording, as of the Effective Date,
(i) the Assignee shall be a party to the Agreement and, to the extent provided
in this Assignment and Acceptance, have the rights and obligations of a Lender
thereunder and under the Loan Documents and (ii) the Assignor shall, to the
extent provided in this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Agreement.
7. This Assignment and Acceptance shall be governed by and
construed in accordance with, the laws of the State of Georgia.
[NAME OF ASSIGNOR]
By:
------------------------------------
Name:
Title:
Notice Address:
------------------------
------------------------
------------------------
After the Effective Date
Outstanding Revolving Loans:$
----------
[NAME OF ASSIGNEE]
By:
------------------------------------
Name:
Title:
Notice Address/Lending Office
----------------------
----------------------
Wire transfer Instructions:
--------------------
--------------------
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<TABLE>
<S> <C>
After the Effective Date
Outstanding Revolving Loans:$
------
Consented to:
CROWN CRAFTS, INC.
By:
----------------------------
Name:
--------------------------
Title:
-------------------------
</TABLE>
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<PAGE> 68
EXHIBIT C
Notice of Appointment (or Revocation) of Authorized
Representative
Reference is hereby made to the Revolving Credit Agreement dated as of
August 25, 1995 (the "Agreement") among Crown Crafts, Inc., a Georgia
corporation (the "Borrower"), and Wachovia Bank of Georgia, N.A., as Lender
("Lender"). Capitalized terms used but not defined herein shall have the
respective meanings therefor set forth in the Agreement.
The Borrower hereby appoints each individual named below as an
Authorized Representative under the Loan Documents, and hereby represents and
warrants that (i) set forth opposite each such individual's name is a true and
correct statement of such individual's office (to which such individual has
been duly elected or appointed), a genuine specimen signature of such
individual and an address for the giving of notice, and (ii) each such
individual has been duly authorized by the Borrower to act as Authorized
Representative under the Loan Documents:
<TABLE>
<CAPTION>
Name and Address Office Specimen Signature
<S> <C> <C>
- ----------------- ------------------- -------------------
- -----------------
- -----------------
- -----------------
- -----------------
- ----------------- ------------------- -------------------
</TABLE>
Borrower hereby revokes (effective upon receipt hereof by the Lender) the prior
appointment of ________________ as an Authorized Representative.
This the ___ day of __________________, 19__.
CROWN CRAFTS, INC.
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
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<PAGE> 69
EXHIBIT D
Form of Borrowing Notice
To: Wachovia Bank of Georgia, N.A.
191 Peachtree Street, N.E.
Atlanta, Georgia 30303-1757
Attention: Ms. Ramona Hix, Administrative Specialist
Telephone: (404) 332-6559
Telefacsimile: (404) 332-6920
Reference is hereby made to the Revolving Credit Agreement dated as
of August 25, 1995 (the "Agreement") among Crown Crafts, Inc., a Georgia
corporation (the "Borrower"), and Wachovia Bank of Georgia, N.A., as Lender
("Lender"). Capitalized terms used but not defined herein shall have the
respective meanings therefor set forth in the Agreement.
The Borrower through its Authorized Representative hereby gives notice
to the Lender that Loans of the type and amount set forth below be made on the
date indicated:
<TABLE>
<CAPTION>
Type of Loan Interest Aggregate
(check one) Period(1) Amount(2) Date of Loan(3)
--------- ------ ------ ------------
<S> <C> <C> <C>
Base Rate Loan
----------- ------------ ------------
Eurodollar Rate Loan
----------- ------------ ------------
</TABLE>
_______________________
(1) For any Eurodollar Rate Loan, one, two, three or six months.
(2) Must be $2,000,000 or, if greater, an integral multiple of $1,000,000
if a Eurodollar Rate Loan, and $250,000 or, if greater, an integral
multiple of $100,000 if a Base Rate Loan.
(3) At least three (3) Business Days later if a Eurodollar Rate Loan;
The Borrower hereby requests that the proceeds of Loans described in
this Borrowing Notice be made available to the Borrower as follows: [insert
transmittal instructions].
The undersigned hereby certifies, solely in his/her corporate and not
in his/her individual capacity, that:
1. No Default or Event of Default exists either now or after
giving effect to the borrowing described herein; and
2. All the representations and warranties set forth in Article V
of the Agreement and in the Loan Documents (other than those expressly stated
to refer to a particular date) are true and correct as of the date hereof
except that the reference to the financial statements in Section 5.6(a) of the
Agreement are to those financial statements most recently delivered to you
pursuant to Section 6.1 of the Agreement (it being understood that any
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<PAGE> 70
financial statements delivered pursuant to Section 6.1(b) have not been
certified by independent public accountants) and attached hereto are any
changes to the Schedules referred to in connection with such representations
and warranties.
3. After giving effect to Loans requested hereby, the principal
amount of outstanding Loans will not exceed the Total Revolving Credit
Commitment.
CROWN CRAFTS, INC.
BY:
-----------------------------------
Authorized Representative
DATE:
---------------------------------
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<PAGE> 71
EXHIBIT E
Form of Interest Rate Selection Notice
To: Wachovia Bank of Georgia, N.A.
191 Peachtree Street, N.E.
Atlanta, Georgia 30303-1757
Attention: Ms. Ramona Hix, Administrative Specialist
Telephone: (404) 332-6559
Telefacsimile: (404) 332-6920
Reference is hereby made to the Revolving Credit Agreement dated as
of August 25, 1995 (the "Agreement") among Crown Crafts, Inc., a Georgia
corporation (the "Borrower"), and Wachovia Bank of Georgia, N.A., as Lender
("Lender"). Capitalized terms used but not defined herein shall have the
respective meanings therefor set forth in the Agreement.
The Borrower through its Authorized Representative hereby gives notice
to the Lender of the following selection of a type of Loan and Interest Period:
<TABLE>
<CAPTION>
Type of Loan Interest Aggregate
(check one) Period(1) Amount(2) Date of Loan(3)
--------- ------ ------ ------------
<S> <C> <C> <C>
Base Rate Loan
----------- ------------ ------------
Eurodollar Rate Loan
----------- ------------ ------------
</TABLE>
_______________________
(1) For any Eurodollar Rate Loan, one, two, three or six months.
(2) Must be $2,000,000 or, if greater, an integral multiple of $1,000,000
if a Eurodollar Rate Loan, and $250,000 or, if greater, an integral
multiple of $100,000 if a Base Rate Loan.
(3) At least three (3) Business Days later if a Eurodollar Rate Loan;
CROWN CRAFTS, INC.
BY:
-------------------------
Authorized Representative
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<PAGE> 72
EXHIBIT F
Form of Revolving Note
PROMISSORY NOTE
$15,000,000 Atlanta, Georgia
August 25, 1995
FOR VALUE RECEIVED, CROWN CRAFTS, INC., a Georgia corporation having
its principal place of business located in Atlanta, Georgia (the "Borrower"),
hereby promises to pay to the order of WACHOVIA BANK OF GEORGIA, N.A. (the
"Lender"), in its individual capacity, at the office of the Lender located at
191 Peachtree Street, N.E., Atlanta, Georgia 30303- 1757, (or at such other
place or places as the Lender may designate in writing) at the times set forth
in the Revolving Credit Agreement dated as of August 25, 1995 among the
Borrower and the Lender (the "Agreement" -- all capitalized terms not otherwise
defined herein shall have the respective meanings set forth in the Agreement),
in lawful money of the United States of America, in immediately available
funds, the principal amount of FIFTEEN MILLION DOLLARS ($15,000,000) or, if
less than such principal amount, the aggregate unpaid principal amount of all
Revolving Loans made by the Lender to the Borrower pursuant to the Agreement on
the Revolving Credit Termination Date or such earlier date as may be required
pursuant to the terms of the Agreement, and to pay interest from the date
hereof on the unpaid principal amount hereof, in like money, at said office, on
the dates and at the rates provided in Article II of the Agreement. All or any
portion of the principal amount of Loans may be prepaid as provided in the
Agreement.
If payment of all sums due hereunder is accelerated under the terms of
the Agreement or under the terms of the other Loan Documents executed in
connection with the Agreement, the then remaining principal amount and accrued
but unpaid interest shall bear interest which shall be payable on demand at the
rates per annum set forth in the proviso to Section 2.2 of the Agreement.
Further, in the event of such acceleration, this Revolving Note shall become
immediately due and payable, without presentation, demand, protest or notice of
any kind, all of which are hereby waived by the Borrower.
In the event this Revolving Note is not paid when due at any stated or
accelerated maturity, the Borrower agrees to pay, in addition to the principal
and interest due hereunder, all costs of collection, including reasonable
attorneys' fees, and interest thereon at the rates set forth above.
Interest hereunder shall be computed as provided in the Credit
Agreement.
This Revolving Note is one of the Revolving Notes referred to in the
Agreement and is issued pursuant to and entitled to the
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<PAGE> 73
benefits and security of the Agreement to which reference is hereby made for a
more complete statement of the terms and conditions upon which the Revolving
Loans evidenced hereby were or are made and are to be repaid. This Revolving
Note is subject to certain restrictions on transfer or assignment as provided
in the Agreement.
Protest, notice of protest, notice of dishonor, diligence or any other
formality are hereby waived by all parties bound hereon.
IN WITNESS WHEREOF, the Borrower has caused this Revolving Note to be
made, executed and delivered by its duly authorized representative as of the
date and year first above written, all pursuant to authority duly granted.
<TABLE>
<S> <C>
CROWN CRAFTS, INC.
WITNESS:
______________________ By: _________________________________
______________________ Name: _______________________________
Title: ______________________________
[CORPORATE SEAL]
</TABLE>
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<PAGE> 74
EXHIBIT G
Form of Subsidiary Guaranty Agreement
THIS SUBSIDIARY GUARANTY AGREEMENT (the "Guaranty Agreement" or the
"Guaranty"), dated as of ________________, _______, is made by each of the
undersigned (each a "Guarantor" and collectively the "Guarantors") to WACHOVIA
BANK OF GEORGIA, N.A., a national banking association, as Lender (the
"Lender").
W I T N E S S E T H:
WHEREAS, the Lender has agreed to provide to CROWN CRAFTS, INC., a
Georgia corporation (the "Borrower"), a revolving credit facility pursuant to
the terms of that certain Revolving Credit Agreement dated as of August 25,
1995 between the Borrower and the Lender (as from time to time amended,
modified or supplemented, the "Credit Agreement"); and
WHEREAS, each Guarantor is a Material Subsidiary of the Borrower and
is required pursuant to Section 6.23 of the Credit Agreement to guarantee to
the Lender payment of the Borrower's Liabilities (as hereinafter defined) in
accordance with the terms of this Agreement; and
WHEREAS, each Guarantor will materially benefit from the loans and
advances made and to be made, under the Credit Agreement, and each Guarantor is
willing to enter into this Guaranty to provide an inducement for the Lender to
make loans and advances thereunder.
NOW, THEREFORE, as required under the Credit Agreement and in order to
induce the Lender to make and continue loans and advances to the Borrower,
thereunder, each Guarantor agrees as follows:
1. DEFINITIONS. All capitalized terms not otherwise defined
herein shall have the meanings ascribed to such terms in the Credit Agreement.
2. GUARANTY. Each Guarantor hereby jointly and severally,
unconditionally, absolutely, continually and irrevocably guarantees to the
Lender the payment and performance in full of the Borrower's Liabilities (as
defined below). For all purposes of this Guaranty Agreement, "Borrower's
Liabilities" means (a) the Borrower's obligation to promptly pay in full, when
due or declared due, all Obligations and all other amounts pursuant to the
terms of the Credit Agreement, the Notes, and all other Loan Documents executed
in connection with the Credit Agreement heretofore, now or at any time
hereafter owing, arising, due or payable from the Borrower to the Lender,
including without limitation principal, interest, premium or fee (including,
but not limited to, loan fees and attorneys' fees and expenses), and (b) the
Borrower's prompt, full and faithful performance, observance and discharge of
each and every agreement, undertaking, covenant and provision to be performed,
observed or discharged by the Borrower under the Credit Agreement and all other
Loan Documents executed in connection
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<PAGE> 75
therewith. Each Guarantor's obligations to the Lender under this Guaranty
Agreement are hereinafter collectively referred to as the "Guarantors'
Obligations"; provided, however, that the liability of each Guarantor with
respect to the Guarantors' Obligations shall not exceed at any time the Maximum
Amount (as hereinafter defined). The "Maximum Amount" means 95% of (i) the
fair salable value of the assets of a Guarantor as of the date hereof minus
(ii) the total liabilities of such Guarantor (including contingent liabilities,
but excluding liabilities of such Guarantor under this Guaranty and any other
Loan Documents executed by such Guarantor) as of the date hereof; provided
further, however, that if the calculation of the Maximum Amount in the manner
provided above as of the date payment is required of such Guarantor pursuant to
this Guaranty would result in a greater positive number, then the Maximum
Amount shall be deemed to be such greater positive number.
Each Guarantor agrees that it is jointly and severally, directly and
primarily liable for the Borrower's Liabilities.
3. PAYMENT. If the Borrower shall default in payment or
performance of any Borrower's Liabilities, whether principal, interest,
premium, fee (including, but not limited to, loan fees and attorneys' fees and
expenses), or otherwise, when and as the same shall become due, whether
according to the terms of the Credit Agreement, by acceleration, or otherwise,
or upon the occurrence of any other Event of Default under the Credit Agreement
that has not been cured or waived, then each Guarantor, upon demand thereof by
the Lender or its successors or assigns, will AS OF THE DATE OF THE LENDER'S
DEMAND fully pay to the Lender, subject to any restriction set forth in Section
2 hereof, an amount equal to all Guarantor's Obligations then due and owing.
4. UNCONDITIONAL OBLIGATIONS. This is a guaranty of payment and
not of collection. The Guarantors' Obligations under this Guaranty Agreement
shall be joint and several, absolute and unconditional irrespective of the
validity, legality or enforceability of the Credit Agreement, the Notes or any
other Loan Document or any other guaranty of the Borrower's Liabilities, and
shall not be affected by any action taken under the Credit Agreement, the Notes
or any other Loan Document, any other guaranty of the Borrower's Liabilities,
or any other agreement between the Lender and the Borrower or any other person,
in the exercise of any right or power therein conferred, or by any failure or
omission to enforce any right conferred thereby, or by any waiver of any
covenant or condition therein provided, or by any acceleration of the maturity
of any of the Borrower's Liabilities, or by the release or other disposal of
any security for any of the Borrower's Liabilities, or by the dissolution of
the Borrower or the combination or consolidation of the Borrower into or with
another entity or any transfer or disposition of any assets of the Borrower, or
by any extension or renewal of, or increase of the amounts available or
advanced under, the Credit Agreement, any of the Notes or any other Loan
Document, in whole or in part, or by any modification, alteration, amendment or
addition of or to the Credit Agreement, any of the Notes or any other Loan
Document, any other guaranty of the Borrower's Liabilities, or any other
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<PAGE> 76
agreement between the Lender and the Borrower or any other Person, or by any
other circumstance whatsoever (with or without notice to or knowledge of any
Guarantor) which may or might in any manner or to any extent vary the
obligations of any Guarantor, or might otherwise constitute a legal or
equitable discharge of a surety or guarantor; it being the purpose and intent
of the parties hereto that this Guaranty Agreement and the Guarantors'
Obligations hereunder shall be absolute and unconditional under any and all
circumstances and shall not be discharged except by payment as herein provided.
5. CURRENCY AND FUNDS OF PAYMENT. Each Guarantor hereby
covenants and agrees that the Guarantors' Obligations will be paid in full as
herein provided in lawful currency of the United States of America and in
immediately available funds, regardless of any law, regulation or decree now or
hereafter in effect that might in any manner affect the Borrower's Liabilities
or the Guarantors' Obligations, or the rights of the Lender with respect
thereto as against the Borrower or any Guarantor, or cause or permit to be
invoked any alteration in the time, amount or manner of payment by the
Guarantor of any or all of the Borrower of any or all of the Borrower's
Liabilities or the Guarantors' Obligations.
6. EVENTS OF DEFAULT. In the event that (a) any Guarantor shall
file a petition to take advantage of any insolvency statute; (b) any Guarantor
shall commence or suffer to exist a proceeding for the appointment of a
receiver, trustee, liquidator or conservator of itself or of the whole or
substantially all of its property; (c) any Guarantor shall file a petition or
answer seeking reorganization or arrangement or similar relief under the
Federal bankruptcy laws or any other applicable law or statute of the United
States of America or any state or similar law of any other country; (d) a court
of competent jurisdiction shall enter an order, judgment or decree appointing a
custodian, receiver, trustee, liquidator or conservator of any Guarantor or of
the whole or substantially all of its properties, or approve a petition filed
against any Guarantor seeking reorganization or arrangement or similar relief
under the Federal bankruptcy laws or any other applicable law or statute of the
United States of America or any state or similar law of any other country, or
if, under the provisions of any other law for the relief or aid of debtors, a
court of competent jurisdiction shall assume custody or control of any
Guarantor or of the whole or substantially all of its properties and such
order, judgment, decree, approval or assumption remains unstayed or undismissed
for a period of thirty (30) days; (e) there is commenced against any Guarantor
any proceeding or petition seeking reorganization, arrangement or similar
relief under the Federal bankruptcy laws or any other applicable law or statute
of the United States of America or any state, which proceeding or petition
remains unstayed or undismissed for a period of thirty (30) days; (f) there
shall occur an Event of Default under the Credit Agreement; (g) any default
shall occur in the payment of amounts due hereunder; or (h) any other default
shall occur hereunder which remains uncured or unwaived for a period of thirty
(30) days (each of the foregoing being an "Event of Default" hereunder); then
notwithstanding any collateral that the Lender may
71
<PAGE> 77
possess from Borrower or any Guarantor or any other guarantor of the Borrower's
Liabilities, or any other party, at the Lender's election and without notice
thereof or demand therefor, the Guarantors' Obligations shall immediately
become due and payable.
7. SUITS. Each Guarantor from time to time shall pay to the
Lender, on demand, at the Lender's place of business set forth in the Credit
Agreement, the Guarantors' Obligations as they become or are declared due, and
in the event such payment is not made when due, the Lender may proceed to suit
against any one or more or all of the Guarantors. At the lender's election,
one or more and successive or concurrent suits may be brought hereon by the
Lender against any one or more or all of the Guarantors, whether or not suit
has been commenced against the Borrower, any other guarantor of the Borrower's
Liabilities, or any other Person and whether or not the Lender has taken or
failed to take any other action to collect all or any portion of the Borrower's
Liabilities.
8. SET-OFF AND WAIVER. Each Guarantor waives any right to assert
against the Lender as a defense, counterclaim, set-off or cross claim, any
defense (legal or equitable) or other claim which such Guarantor may now or at
any time hereafter have against the Borrower, the Lender, without waiving any
additional defenses, set-offs, counterclaims or other claims otherwise
available to such Guarantor. If at any time hereafter the Lender employs
counsel for advice or other representation to enforce the Guarantors'
Obligations that arise out of an Event of Default, then, in any of the
foregoing events, all of the attorneys' fees arising from such services and all
expenses, costs and charges in any way or respect arising in connection
therewith or relating thereto shall be paid by the Guarantors to the Lender on
demand and shall constitute part of the Guarantors' Obligations hereunder.
72
<PAGE> 78
9. WAIVER; SUBROGATION.
(a) Each Guarantor hereby waives notice of the following events or
occurrences: (i) the Lender's acceptance of this Guaranty Agreement; (ii) the
Lender's heretofore, now or from time to time hereafter loaning monies or
giving or extending credit to or for the benefit of the Borrower, whether
pursuant to the Credit Agreement or the Notes or any amendments, modifications,
or supplements thereto, or replacements or extensions thereof; (iii) the Lender
or the Borrower heretofore, now or at any time hereafter, obtaining, amending,
substituting for, releasing, waiving or modifying the Credit Agreement, the
Notes or any other Loan Documents; (iv) presentment, demand, notices of
default, non-payment, partial payment and protest; (v) the Lender heretofore,
now or at any time hereafter granting to the Borrower (or any other party
liable to the Lender on account of the Borrower's Liabilities) any indulgence
or extensions of time of payment of the Borrower's Liabilities; and (vi) the
Lender heretofore, now or at any time hereafter accepting from the Borrower or
any other person, any partial payment or payments on account of the Borrower's
Liabilities or any collateral securing the payment thereof or the Agent
settling, subordinating, compromising, discharging or releasing the same. Each
Guarantor agrees that the Lender may heretofore, now or at any time hereafter
do any or all of the foregoing in such manner, upon such terms and at such
times as the Lender, in its sole and absolute discretion, deems advisable,
without in any way or respect impairing, affecting, reducing or releasing such
Guarantor from the Guarantors' Obligations, and each Guarantor hereby consents
to each and all of the foregoing events or occurrences.
(b) Each Guarantor hereby agrees that payment or performance by
such Guarantor of the Guarantors' Obligations under this Guaranty Agreement may
be enforced by the Lender upon demand by the Lender to such Guarantor without
the Lender being required, each Guarantor expressly waiving any right it may
have to require the Lender, to (i) prosecute collection or seek to enforce or
resort to any remedies against the Borrower or any other Guarantor or any other
guarantor of the Borrower's Liabilities, IT BEING EXPRESSLY UNDERSTOOD,
ACKNOWLEDGED AND AGREED TO BY EACH GUARANTOR THAT DEMAND UNDER THIS GUARANTY
AGREEMENT MAY BE MADE BY THE LENDER, AND THE PROVISIONS HEREOF ENFORCED BY THE
LENDER, EFFECTIVE AS OF THE FIRST DATE ANY EVENT OF DEFAULT OCCURS AND IS
CONTINUING UNDER THE CREDIT AGREEMENT, or (ii) seek to enforce or resort to any
remedies with respect to any security interests, Liens or encumbrances granted
to the Lender by the Borrower or any other Person on account of the Borrower's
Liabilities or any guaranty thereof. The Lender shall not have any obligation
to protect, secure or insure any of the foregoing security interests, Liens or
encumbrances on the properties or interests in properties subject thereto. The
Guarantors' Obligations shall in no way be impaired, affected, reduced, or
released by reason of the Lender's failure or delay to do or take any of the
acts, actions or things described in this Guaranty Agreement including, without
limiting the generality of the foregoing, those acts, actions and things
described in this Section 9.
73
<PAGE> 79
(c) Each Guarantor further agrees that to the extent the ruling in
Levit v. Ingersoll Rand Financial Corp. (In re V.N. Deprizio Construction
Co.), 874 F.2d 1186 (7th Cir. 1989), is found applicable by a court of
competent jurisdiction to the transactions contemplated by the Loan Documents
or any payments thereunder, no Guarantor shall have any right of subrogation,
reimbursement or indemnity, nor any right of recourse to security for the
Borrower's Liabilities. This waiver is expressly intended to prevent the
existence of any claim in respect to such reimbursement by the Guarantor
against the estate of Borrower within the meaning of Section 101 of the
Bankruptcy Code, and to prevent the Guarantor from constituting a creditor of
Borrower in respect of such reimbursement within the meaning of Section 547(b)
of the Bankruptcy Code in the event of a subsequent case involving the
Borrower.
10. EFFECTIVENESS; ENFORCEABILITY. This Guaranty Agreement shall
be effective as of the date of the initial Advance under the Credit Agreement
and shall continue in full force and effect until the Borrower's Obligations
are fully paid and the Credit Agreement has terminated. The Lender shall give
each Guarantor written notice of such termination at each Guarantor's address
set forth in the Credit Agreement. This Guaranty Agreement shall be binding
upon and inure to the benefit of each Guarantor, the Lender and their
respective successors and assigns. Notwithstanding the foregoing, no Guarantor
may, without the prior written consent of the Lender, assign any rights,
powers, duties or obligations hereunder. Any claim or claims that the Lender
may at any time hereafter have against any Guarantor under this Guaranty
Agreement may be asserted by the Lender by written notice directed to any one
or more or all of the Guarantors at the address specified in the Credit
Agreement.
11. REPRESENTATIONS AND WARRANTIES. Each Guarantor represents and
warrants to the Lender that it is duly authorized to execute, deliver and
perform this Guaranty Agreement, that this Guaranty Agreement is legal, valid,
binding and enforceable against such Guarantor in accordance with its terms
except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles; and that such
Guarantor's execution, delivery and performance of this Guaranty Agreement do
not violate or constitute a breach of its certificate of incorporation or other
documents of corporate governance or any agreement to which such Guarantor is a
party, or any applicable laws.
12. EXPENSES. Each Guarantor agrees to be liable for the payment
of all reasonable fees and expenses, including attorney's fees, incurred by the
Lender in connection with the enforcement of this Guaranty Agreement.
13. REINSTATEMENT. Each Guarantor agrees that this Guaranty
Agreement shall continue to be effective or be reinstated, as the case may be,
at any time payment received by the Lender under the
74
<PAGE> 80
Credit Agreement or this Guaranty Agreement is rescinded or must be restored
for any reason.
14. COUNTERPARTS. This Guaranty Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original as
against any party whose signature appears thereon, and all of which shall
constitute one and the same instrument.
15. RELIANCE. Each Guarantor represents and warrants to the
Lender that (a) such Guarantor has adequate means to obtain from Borrower, on a
continuing basis, information concerning Borrower and Borrower's financial
condition and affairs and has full and complete access to Borrower's books and
records, (b) such Guarantor is not, nor in the future will it be, relying on
the Lender, or its employees, agents or other representatives, to provide such
information, (c) such Guarantor is executing this Guaranty Agreement freely and
deliberately, and understands the obligations and financial risk undertaken by
providing this Guaranty, (d) such Guarantor has relied solely on the
Guarantor's own independent investigation, appraisal and analysis of Borrower
and Borrower's financial condition and affairs in deciding to provide this
Guaranty and is fully aware of the same, and (e) such Guarantor has not
depended or relied on the Lender, its employees, agents or representatives, for
any information whatsoever concerning Borrower or Borrower's financial
condition and affairs or other matters material to such Guarantor's decision to
provide this Guaranty or for any counselling, guidance, or special
consideration or any promise therefor with respect to such decision. Each
Guarantor agrees that the Lender has no duty or responsibility whatsoever, now
or in the future, to provide to any Guarantor any information concerning
Borrower or Borrower's financial condition and affairs, and that, if such
Guarantor receives any such information from the Lender or its employees,
agents or other representatives, such Guarantor will independently verify the
information and will not rely on the Lender or its employees, agents or other
representatives, with respect to such information.
16. TERMINATION. This Guaranty Agreement and all obligations of
the Guarantors hereunder shall terminate without delivery of any instrument or
performance of any act by any party on the date when all of the Obligations
have been fully paid and the Credit Agreement has terminated.
17. GOVERNING LAW; WAIVERS OF TRIAL BY JURY, ETC.
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF GEORGIA APPLICABLE TO
CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH STATE.
(b) EACH PARTY HEREBY EXPRESSLY AND IRREVOCABLY AGREES
AND CONSENTS THAT ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREIN
MAY BE INSTITUTED IN ANY STATE OR FEDERAL COURT SITTING IN THE STATE
OF GEORGIA, UNITED STATES OF AMERICA AND, BY THE EXECUTION AND
DELIVERY OF THIS AGREEMENT,
75
<PAGE> 81
EXPRESSLY WAIVES ANY OBJECTION THAT IT MAY HAVE NOW OR HEREAFTER TO
THE LAYING OF THE VENUE OR TO THE JURISDICTION OF ANY SUCH SUIT,
ACTION OR PROCEEDING, AND IRREVOCABLY SUBMITS GENERALLY AND
UNCONDITIONALLY TO THE JURISDICTION OF ANY SUCH COURT IN ANY SUCH
SUIT, ACTION OR PROCEEDING.
(c) EACH PARTY AGREES THAT SERVICE OF PROCESS MAY BE MADE
BY PERSONAL SERVICE OF A COPY OF THE SUMMONS AND COMPLAINT OR OTHER
LEGAL PROCESS IN ANY SUCH SUIT, ACTION OR PROCEEDING, OR BY REGISTERED
OR CERTIFIED MAIL (POSTAGE PREPAID) TO THE ADDRESS OF SUCH PARTY
PROVIDED IN SECTION 10.2 OF THE CREDIT AGREEMENT OR BY ANY OTHER
METHOD OF SERVICE PROVIDED FOR UNDER THE APPLICABLE LAWS IN EFFECT IN
THE STATE OF GEORGIA.
(d) NOTHING CONTAINED IN SUBSECTIONS (B) OR (C) HEREOF
SHALL PRECLUDE ANY PARTY FROM BRINGING ANY SUIT, ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE OTHER LOAN
DOCUMENTS IN THE COURTS OF ANY PLACE WHERE ANY OTHER PARTY OR ANY OF
SUCH PARTY'S PROPERTY OR ASSETS MAY BE FOUND OR LOCATED. TO THE
EXTENT PERMITTED BY THE APPLICABLE LAWS OF ANY SUCH JURISDICTION, EACH
PARTY HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT
AND EXPRESSLY WAIVES, IN RESPECT OF ANY SUCH SUIT, ACTION OR
PROCEEDING, THE JURISDICTION OF ANY OTHER COURT OR COURTS WHICH NOW OR
HEREAFTER, BY REASON OF ITS PRESENT OR FUTURE DOMICILE, OR OTHERWISE,
MAY BE AVAILABLE TO IT.
(e) IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY
RIGHTS OR REMEDIES UNDER OR RELATED TO THIS AGREEMENT OR ANY
AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR THAT MAY IN
THE FUTURE BE DELIVERED IN CONNECTION WITH THE FOREGOING, EACH PARTY
HEREBY AGREES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, THAT ANY
SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE
A JURY AND EACH PARTY HEREBY WAIVES, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, ANY OBJECTION THAT IT MAY HAVE THAT EACH ACTION OR
PROCEEDING HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
[SIGNATURE PAGE FOLLOWS.]
76
<PAGE> 82
IN WITNESS WHEREOF, the parties have duly executed this Agreement on
the day and year first written above.
GUARANTORS:
-------------------------------
By:
----------------------------
Name:
-------------------------
Title:
------------------------
-------------------------------
By:
----------------------------
Name:
-------------------------
Title:
------------------------
LENDER:
WACHOVIA BANK OF GEORGIA, N.A.
By:
---------------------------
Name:
-------------------------
Title:
------------------------
77
<PAGE> 83
EXHIBIT H
Form of Opinion of Borrower's Counsel
[Date]
Wachovia Bank of Georgia, N.A.
191 Peachtree Street, N.E.
Atlanta, Georgia 30303-1757
Re: $15,000,000 Revolving Credit Agreement between Wachovia Bank of
Georgia, N.A., as Lender, and Crown Crafts, Inc., as Borrower
Ladies and Gentlemen:
I have acted as internal counsel to Crown Crafts, Inc., a Georgia
corporation (the "Company"), in connection with the Revolving Loan in the
amount of $15,000,000 (the ("Loan") being made available to the Company by you
on this date pursuant to the Revolving Credit Agreement of even date herewith
among you and the Company (the "Credit Agreement").
This opinion is being delivered in accordance with the condition set
forth in section 4.1(a)(ii) of the Credit Agreement. All capitalized terms not
otherwise defined herein shall have the meanings provided therefor in the
Credit Agreement.
As such counsel, I have reviewed the Credit Agreement and the
revolving Note. The foregoing documents are collectively referred to
hereinafter as the "Loan Documents."
For purposes of the opinions expressed below, I have assumed that all
natural persons executing the Loan Documents have legal capacity to do so, all
signatures (other than those of the Company) on all documents submitted to us
are genuine, all documents submitted to us as originals are authentic, and all
documents submitted to us as certified copies or photocopies conform to the
original documents, which themselves are authentic.
In addition, for purposes of giving this opinion, I have examined
corporate records of the Company, certificates of public officials,
certificates of appropriate officials of the Company and such other documents
or made such inquiries as I have deemed appropriate. However, as used herein,
the phrase "to the best of my knowledge" means my actual knowledge, without
further investigation.
Based upon and subject to the foregoing, it is my opinion
<PAGE> 84
Wachovia Bank of Georgia, N.A.
[Date]
Page 2
that:
1. The Company is a corporation duly organized, validly existing
and in good standing under the laws of its state of Georgia and is duly
qualified to transact business as a foreign corporation and is in good standing
in all other jurisdictions in which the nature of its business requires such
qualification and the failure to be so qualified would reasonably be likely to
result in a Material Adverse Effect. The Company has full corporate power and
authority to own its assets and conduct the businesses in which it is now
engaged and has full corporate power and authority to enter into each of the
Loan Documents to which it is a party and to perform its obligations
thereunder.
2. Each of the Loan Documents to which the Company is a party has
been duly authorized by the Board of Directors of the Company, duly executed
and delivered by the Company, and constitutes the legal, valid and binding
obligation, agreement, instrument or conveyance, as the case may be, of the
Company, enforceable against the Company in accordance with its respective
terms, except (i) as the enforceability thereof may be limited by applicable
bankruptcy, insolvency, reorganization and other similar laws relating to or
affecting creditors' rights generally and (ii) as the enforceability of the
remedial provisions thereof may be limited by general equitable principles:
provided, however, the application of such equitable principles or limitations
of law does not materially interfere with the practical realization of the
benefits and security, if any, intended to be conferred under the Loan
Documents.
3. Neither the execution or delivery of, nor performance by the
Company of its obligations under, the Loan Documents (a) does or will conflict
with, violate or constitute a breach of (i) the charter or bylaws of the
Company, (ii) any laws, rules or regulations applicable to the Company
("Applicable Law"), or (iii) any contract, agreement, indenture, lease,
instrument, other document, judgment, writ, determination, order or decree to
which the Company is a party or by which the Company or any of its properties
is bound, (b) requires the prior consent of, notice to or filing with any court
or governmental authority, or (c) to the best of my knowledge, does or will
result in the creation or imposition of any lien, pledge, charge or encumbrance
of any nature upon or with respect to any of the properties of the Company,
where such breach would reasonably be likely to result in a Material Adverse
Effect.
4. There is no pending or, to the best of my knowledge,
threatened, action, suit, investigation or proceeding, nor is there any basis
therefor, before or by any court, or governmental department, commission board,
bureau, instrumentality, agency or
<PAGE> 85
Wachovia Bank of Georgia, N.A.
[Date]
Page 3
arbitral authority, (i) which calls into question the validity or
enforceability of any of the Loan Documents, or the titles to their respective
officers or authority of any officers of the Company or (ii) an adverse result
in which would reasonably be likely to have a Material Adverse Effect,
including, without limitation, any action, suit, investigation, or proceeding
under the environmental or labor law.
I am not expressing any opinion as to any matter relating to any
jurisdiction other than the laws of the State of Georgia and the laws of the
United States of America and I assume no responsibility as to the applicability
of the laws of any other jurisdiction as to the subject transaction or the
effect of such laws thereon.
The opinions contained herein are rendered only as of the date hereof
and I undertake no obligation to update such opinions after the date hereof.
The opinions contained herein are rendered solely for your information
in connection with the transactions contemplated under the Loan Documents and
may not be relied upon in any manner by any other person, entity or agency, or
by you for any other purpose. The opinions herein shall not be quoted or
otherwise included, summarized or referred to in any publication or document,
in whole or in part, for any purposes whatsoever, or furnished to any person,
entity or agency, except as may be required by you by applicable law or
regulation or request of regulatory agencies to which you are subject.
Very truly yours,
<PAGE> 86
EXHIBIT I
Form of Compliance Certificate
To: Wachovia Bank of Georgia, N.A.
191 Peachtree Street, N.E.
Atlanta, Georgia 30303-1757
Attention: Ms. Susan E. Cates, Commercial Officer
Telephone: (404) 332-6093
Telefacsimile: (404) 332-6920
Reference is hereby made to the Revolving Credit Agreement dated as of
August 25, 1995 (the "Agreement") among Crown Crafts, Inc., a Georgia
corporation (the "Borrower"), and Wachovia Bank of Georgia, N.A., as Lender
("Lender"). Capitalized terms used but not otherwise defined herein shall have
the respective meanings therefor set forth in the Agreement. The undersigned,
a duly authorized and acting Authorized Representative, hereby certifies to you
as of __________ (the "Determination Date") as follows:
1. Applicable Interest Addition/Applicable Unused Fee.
A. Based on the calculation set forth below, the
Applicable Interest Addition as of the latest Determination
Date is ___%.
B. Based on the calculation set forth below, the
Applicable Unused Fee as of the latest Determination Date is
___%.
2. Covenant Calculations:
A. Compliance with Section 7.1: Consolidated Leverage Ratio
<TABLE>
<S> <C> <C> <C> <C>
1. Consolidated Funded Indebtedness
a. Indebtedness for
Borrowed Money $_________
b. Capital Leases $_________
c. Guaranties $_________
d. a. + b. + c. $__________
2. Consolidated Tangible Net Worth $__________
3. A.1. + A.2. $__________
4. Ratio of A.1. to A.3. ___________
</TABLE>
REQUIRED: Line A.4. must not be greater
than .60 to 1.00.
B. Compliance with Section 7.2: Consolidated Fixed Charge
Coverage Ratio
1. Consolidated EBIT
79
<PAGE> 87
<TABLE>
<S> <C> <C> <C> <C>
a. Consolidated Net
Income $_________
b. Consolidated
Interest Expense $_________
c. taxes $_________
d. Consolidated
Lease Expense $_________
e. a. + b. + c. + d. $__________
2. Consolidated Fixed Charges
a. Consolidated
Interest Expense $_________
b. Consolidated
Lease Expense $_________
d. a. + b. $__________
6. Ratio of B.1. to B.2. ___________
REQUIRED: Line B.6. must not be less
than 2.00 to 1.00.
C. Compliance with Section 10.3: Consolidated Shareholders' Equity
1. Consolidated Shareholders' Equity $__________
REQUIRED: Line C.1. must not be less than (1) $80,000,000,
less Permitted Stock Repurchases, at the Closing Date and (2)
thereafter, line d. below
a. Consolidated Net
Worth for immediately
preceding Fiscal Year $__________
b. Consolidated Net Income
for then ending fiscal quarter
(no deduction for net loss) $__________
c. Multiply Line b. by 50% $__________
d. Increases in stated capital
and additional paid-in
capital accounts from equity
issuances, etc. $__________
e. a. + c. + d. $__________
D. Compliance with Section 7.4: Cash Flow Ratio:
1. Consolidated Funded Indebtedness $__________
2. Consolidated Cash Flow
a. Consolidated Net
Income $_________
</TABLE>
80
<PAGE> 88
<TABLE>
<S> <C> <C> <C> <C>
b. amortization $_________
c. depreciation $_________
d. non-cash charges
and expenses $_________
e. cash distributions
on capital stock $_________
f. other non-cash
gains $_________
g. a. + b. + c. + d. - e. - f. $__________
3. Ratio of D.1. to D.2. ___________
</TABLE>
REQUIRED: Line D.3. must not be greater than 6.00 to
1.00.
3. No Default
A. Since __________ (the date of the last
similar certification), (a) the Borrower has not defaulted in
the keeping, observance, performance or fulfillment of its
obligations pursuant to any of the Loan Documents; and (b) no
Default or Event of Default specified in Article VIII of the
Agreement has occurred and is continuing.
B. If a Default or Event of Default has occurred
since __________ (the date of the last similar certification),
the Borrowers propose to take the following action with
respect to such Default or Event of Default:
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
__________________________________________________.
(Note, if no Default or Event of Default has
occurred, insert "Not Applicable").
The Determination Date is the date of the last required financial
statements submitted to the Lender in accordance with Section 6.1 of the
Agreement.
IN WITNESS WHEREOF, I have executed this Certificate this _____ day of
__________, 19___.
By:
--------------------------------
Authorized Representative
Name:
------------------------------
Title:
-----------------------------
81
<PAGE> 89
SCHEDULE 5.4
SUBSIDIARIES AND OWNERSHIP INTERESTS
<TABLE>
<CAPTION>
PERCENT OF
OWNERSHIP
----------
<S> <C>
Benn Corp, a North Carolina corporation 100%
Crown Crafts Home Furnishings, Inc., a New York corporation 100%
Crown Crafts Home Furnishings of Illinois, Inc., a Delaware corporation 100%
Crown Crafts Home Furnishings of California, Inc., a California corporation 100%
Crown Crafts International, Inc., a Georgia corporation 100%
G.W. Stores, Inc., a North Carolina corporation 100%
Textile, Inc., a North Carolina corporation 100%
Hans Benjamin Furniture, Inc., a South Carolina corporation 51%
</TABLE>
<PAGE> 90
Schedule 5.6
Liabilities
None
<PAGE> 91
SCHEDULE 5.16
ERISA MATTERS
<TABLE>
<S> <C>
Employee Benefit Plans
Crown Crafts, Inc. Employee Stock Ownership Plan
Crown Crafts, Inc. Health Benefit Plan
Crown Crafts, Inc. Group Term Life Insurance Plan
Crown Crafts, Inc. Executive Life Insurance Plan
Crown Crafts, Inc. Dental Insurance Plan
Blue Cross/Blue Shield Health Benefit Plan maintained for employees of Goodwin
Weavers Division
Textile, Inc.:
Principal Mutual Life Insurance Co. - Health Benefit Plan
Principal Mutual Life Insurance Co. - Group Term Life Insurance Plan
Employee Benefit Plan Terminations
The Blowing Rock Crafts, Inc. Profit Sharing Plan (the Plan) was
terminated on September 30, 1992 and 100% of the Plan assets were
distributed to the Plan participants in October 1992. The Plan
participants still employed by Blowing Rock Crafts, Inc. On March 28,
1993 were enrolled in The Crown Crafts, Inc. Employee Stock Ownership
Plan on March 28, 1993. Blowing Rock Crafts, Inc. Received a favorable
determination letter from the Internal Revenue Service on the termination
of this plan.
</TABLE>
<PAGE> 92
SCHEDULE 7.5
LIENS
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
Textile, Inc. Loan Balance
Creditor Security at 7/31/95
- -------------------------------------------------------------------------------------------------
<S> <C> <C>
F.E.W. Partners Real Property $273,623.95
Somet of America Five (5) Somet rapier weaving $156,644.61
machines
Somet of America Six (6) Somet rapier weaving $198,520.06
machines
Staubli Five (5) jacquard heads $168,795.78
Staubli Six (6) jacquard heads $286,057.95
Yadkin Valley Bank & Trust Machinery - second lien $184,443.67
=================================================================================================
</TABLE>
<PAGE> 1
EXHIBIT 10(e)
EXECUTION COPY
================================================================================
CROWN CRAFTS, INC.
NOTE PURCHASE AND PRIVATE SHELF FACILITY
$25,000,000
7.27% SENIOR SERIES A NOTES DUE OCTOBER 12, 2005
$25,000,000
PRIVATE SHELF FACILITY
DATED AS OF OCTOBER 12, 1995
================================================================================
<PAGE> 2
<TABLE>
<CAPTION>
TABLE OF CONTENTS
(Not Part of Agreement)
<S> <C> <C>
PAGE
----
1. AUTHORIZATION OF ISSUE OF NOTES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1A. Authorization of Issue of Series A Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1B. Authorization of Issue of Shelf Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. PURCHASE AND SALE OF NOTES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2A. Purchase and Sale of Series A Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2B. Purchase and Sale of Shelf Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2B(1). Facility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2B(2). Issuance Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2B(3). Periodic Spread Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2B(4). Request for Purchase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2B(5). Rate Quotes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2B(6). Acceptance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2B(7). Market Disruption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2B(8). Facility Closings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2B(9). Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2B(9)(i). Facility Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2B(9)(ii). Issuance Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2B(9)(iii). Delayed Delivery Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2B(9)(iv). Cancellation Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3. CONDITIONS OF CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3A. Certain Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3B. Representations and Warranties; No Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3C. Purchase Permitted by Applicable Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3D. Payment of Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4. PREPAYMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4A. Required Prepayments of Series A Notes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4B. Required Prepayments of Shelf Notes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4C. Optional Prepayment with Yield-Maintenance Amount . . . . . . . . . . . . . . . . . . . . . . . . 9
4D. Notice of Optional Prepayment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4E. Prepayment Upon Change of Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4F. Application of Required Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4G. Retirement of Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
</TABLE>
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5. AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5A. Reporting Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5A(1). Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5A(2). Officer's Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5A(3). Accountant's Letter. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5A(4). Notice of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5A(5). Rule 144A Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5B. Inspection of Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5C. Covenant to Secure Notes Equally. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5D. Maintenance of Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5E. Guaranteed Obligations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
6. NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
6A. Financial Ratios . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
6B. Liens, and Other Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
6B(1). Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
6B(2). Investments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
6B(3). Sale of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
6B(4). Merger and Consolidation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
6B(5). Sale or Discount of Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . 16
6B(6). Certain Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
6B(7). Transactions with Related Parties . . . . . . . . . . . . . . . . . . . . . . . . . 17
6C. ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
6D. Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
7. EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
7A. Acceleration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
7B. Rescission of Acceleration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
7C. Notice of Acceleration or Rescission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
7D. Other Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
8. REPRESENTATIONS, COVENANTS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
8A. Organization and Qualification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
8B. Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
8C. Actions Pending . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
8D. Outstanding Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
8E. Title to Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
8F. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
8G. Conflicting Agreements and Other Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
8H. Offering of Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
8I. Regulation G, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
</TABLE>
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8J. Compliance with Laws and Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
8K. ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
8L. Governmental Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
8M. Holding Company and Investment Company Status . . . . . . . . . . . . . . . . . . . . . . . . . . 25
8N. Possession of Franchises, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
8O. Patents, Etc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
8P. Disclosure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
8Q. Hostile Tender Offers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
9. REPRESENTATIONS OF THE PURCHASERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
10. DEFINITIONS; ACCOUNTING MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
10A. Yield-Maintenance Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
10B. Other Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
10C. Accounting Principles, Terms and Determinations . . . . . . . . . . . . . . . . . . . . . . . . . 37
11. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
11A. Note Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
11B. Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
11C. Consent to Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
11D. Form, Registration, Transfer and Exchange of Notes;
Lost Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
11E. Persons Deemed Owners; Participations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
11F. Survival of Representations and Warranties;
Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
11G. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
11H. Independence of Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
11I. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
11J. Payments Due on Non-Business Days . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
11K. Descriptive Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
11L. Satisfaction Requirement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
11M. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
11N. Severability of Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
110. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
11P. Binding Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
</TABLE>
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<PAGE> 5
EXHIBITS AND SCHEDULES
Purchaser Schedule
Information Schedule
EXHIBIT A-1 -- Form of Series A Note
EXHIBIT A-2 -- Form of Shelf Note
EXHIBIT B -- Form of Request for Purchase
EXHIBIT C -- Form of Confirmation of Acceptance
EXHIBIT D-1 -- Form of Opinion of Counsel, Series A Note Closing
EXHIBIT D-2 -- Form of Opinion of Counsel, Shelf Note Closing
SCHEDULE 8A -- Subsidiaries
SCHEDULE 8G -- Agreements Restricting Debt
iv
<PAGE> 6
CROWN CRAFTS, INC.
1600 Riveredge Parkway
Suite 200
Atlanta, Georgia 30328
October 12, 1995
The Prudential Insurance Company
of America ("PRUDENTIAL")
Each Prudential Affiliate (as hereinafter
defined) which becomes bound by certain
provisions of this Agreement as hereinafter
provided (together with Prudential, the "PURCHASERS")
c/o Prudential Capital Group
Four Gateway Center
100 Mulberry Street
Newark, N.J. 07102
Ladies and Gentlemen:
The undersigned, CROWN CRAFTS, INC. (herein called the
"Company"), hereby agrees with you as follows:
1. AUTHORIZATION OF ISSUE OF NOTES.
1A. AUTHORIZATION OF ISSUE OF SERIES A NOTES. The
Company will authorize the issue of its senior promissory notes (the "SERIES A
NOTES") in the aggregate principal amount of $25,000,000, to be dated the date
of issue thereof, to mature October 12, 2005, to bear interest on the unpaid
balance thereof from the date thereof until the principal thereof shall have
become due and payable at the rate of 7.27% per annum and on overdue principal,
Yield- Maintenance Amount and interest at the rate specified therein, and to be
substantially in the form of Exhibit A-1 attached hereto. The terms "SERIES A
NOTE" and "SERIES A NOTES" as used herein shall include each Series A Note
delivered pursuant to any provision of this Agreement and each Series A Note
delivered in substitution or exchange for any such Series A Note pursuant to
any such provision.
1B. AUTHORIZATION OF ISSUE OF SHELF NOTES. The Company
will authorize the issue of its additional senior promissory notes (the "SHELF
NOTES") in the aggregate principal amount of $25,000,000, to be dated the date
of issue thereof, to mature, in the case of each Shelf Note so issued, no more
than 10 years after the date of original issuance thereof, to have an average
life, in the case of each Shelf Note so issued, of no more than 8 years after
<PAGE> 7
the date of original issuance thereof, to bear interest on the unpaid balance
thereof from the date thereof at the rate per annum, and to have such other
particular terms, as shall be set forth, in the case of each Shelf Note so
issued, in the Confirmation of Acceptance with respect to such Shelf Note
delivered pursuant to paragraph 2B(6), and to be substantially in the form of
Exhibit A-2 attached hereto. The terms "SHELF NOTE" and "SHELF NOTES" as used
herein shall include each Shelf Note delivered pursuant to any provision of
this Agreement and each Shelf Note delivered in substitution or exchange for
any such Shelf Note pursuant to any such provision. The terms "NOTE" and
"NOTES" as used herein shall include each Series A Note and each Shelf Note
delivered pursuant to any provision of this Agreement and each Note delivered
in substitution or exchange for any such Note pursuant to any such provision.
Notes which have (i) the same final maturity, (ii) the same principal
prepayment dates, (iii) the same principal prepayment amounts (as a percentage
of the original principal amount of each Note), (iv) the same interest rate,
(v) the same interest payment periods and (vi) the same date of issuance
(which, in the case of a Note issued in exchange for another Note, shall be
deemed for these purposes the date on which such Note's ultimate predecessor
Note was issued), are herein called a "SERIES" of Notes.
2. PURCHASE AND SALE OF NOTES.
2A. PURCHASE AND SALE OF SERIES A NOTES. The Company
hereby agrees to sell to each Purchaser, and, subject to the terms and
conditions herein set forth, each Purchaser agrees to purchase from the Company
the aggregate principal amount of Series A Notes set forth opposite its name on
the Purchaser Schedule attached hereto at 100% of such aggregate principal
amount. On October 12, 1995 (herein called the "SERIES A CLOSING DAY"), the
Company will deliver to each Purchaser at the offices of Prudential Capital
Group, Four Gateway Center, 100 Mulberry Street, Newark, New Jersey 07102, one
or more Series A Notes registered in its name, evidencing the aggregate
principal amount of Series A Notes to be purchased by such Purchaser and in the
denomination or denominations specified with respect to such Purchaser in the
Purchaser Schedule attached hereto, against payment of the purchase price
thereof by transfer of immediately available funds for credit to the Company's
account #14-864-502 at Wachovia Bank of Georgia, ABA Routing Number
061-000-010.
2B. PURCHASE AND SALE OF SHELF NOTES.
2B(1). FACILITY. Prudential is willing to consider, in
its sole discretion and within limits which may be authorized for purchase by
Prudential and Prudential Affiliates from time to time, the purchase of Shelf
Notes pursuant to this Agreement. The willingness of Prudential to consider
such purchase of Shelf Notes is herein called the "FACILITY". At any time, the
aggregate principal amount of Shelf Notes stated in paragraph 1B, minus the
aggregate principal amount of Shelf Notes purchased and sold pursuant to this
Agreement prior to such time, minus the aggregate principal amount of Accepted
Notes (as hereinafter defined) which have not yet been purchased and sold
hereunder prior to such time, plus the aggregate principal amount of Shelf
Notes purchased and sold pursuant to this Agreement and thereafter retired
prior to such time is herein called the "AVAILABLE FACILITY AMOUNT" at such
time. NOTWITHSTANDING THE WILLINGNESS OF PRUDENTIAL TO CONSIDER PURCHASES OF
SHELF NOTES, THIS AGREEMENT IS ENTERED
2
<PAGE> 8
INTO ON THE EXPRESS UNDERSTANDING THAT NEITHER PRUDENTIAL NOR ANY PRUDENTIAL
AFFILIATE SHALL BE OBLIGATED TO MAKE OR ACCEPT OFFERS TO PURCHASE SHELF NOTES,
OR TO QUOTE RATES, SPREADS OR OTHER TERMS WITH RESPECT TO SPECIFIC PURCHASES OF
SHELF NOTES, AND THE FACILITY SHALL IN NO WAY BE CONSTRUED AS A COMMITMENT BY
PRUDENTIAL OR ANY PRUDENTIAL AFFILIATE.
2B(2). ISSUANCE PERIOD. Shelf Notes may be issued and
sold pursuant to this Agreement until the earlier of (i) the second anniversary
of the date of this Agreement (ii) the thirtieth day after Prudential shall
have given to the Company, or the Company shall have given to Prudential, a
notice stating that it elects to terminate the issuance and sale of Shelf Notes
pursuant to this Agreement (or if such thirtieth day is not a Business Day, the
Business Day next preceding such thirtieth day), (iii) termination of the
Facility pursuant to paragraph 7 of this Agreement, and (iv) acceleration of
any Note pursuant to paragraph 7 of this Agreement. The period during which
Shelf Notes may be issued and sold pursuant to this Agreement is herein called
the "ISSUANCE PERIOD".
2B(3). PERIODIC SPREAD INFORMATION. Not later than 9:30
A.M. (New York City local time) on a Business Day during the Issuance Period if
there is an Available Facility Amount on such Business Day, the Company may
request by telecopier or telephone, and Prudential will, to the extent
reasonably practicable, provide to the Company on such Business Day (or, if
such request is received after 9:30 A.M. (New York City local time) on such
Business Day, on the following Business Day), information (by telecopier or
telephone) with respect to various spreads at which Prudential or Prudential
Affiliates might be interested in purchasing Shelf Notes of different average
lives; provided, however, that the Company may not make such requests more
frequently than once in every five Business Days or such other period as shall
be mutually agreed to by the Company and Prudential. The amount and content of
information so provided shall be in the sole discretion of Prudential but it is
the intent of Prudential to provide information which will be of use to the
Company in determining whether to initiate procedures for use of the Facility.
Information so provided shall not constitute an offer to purchase Shelf Notes,
and neither Prudential nor any Prudential Affiliate shall be obligated to
purchase Shelf Notes at the spreads specified. Information so provided shall
be representative of potential interest only for the period commencing on the
day such information is provided and ending on the earlier of the fifth
Business Day after such day or the first day after such day on which further
spread information is provided. Prudential may suspend or terminate providing
information pursuant to this paragraph 2B(3) for any reason, including its
determination that the credit quality of the Company has declined since the
date of this Agreement.
2B(4). REQUEST FOR PURCHASE. The Company may from time to
time during the Issuance Period make requests for purchases of Shelf Notes
(each such request being herein called a "REQUEST FOR PURCHASE"). Each Request
for Purchase shall be made to Prudential by telecopier or overnight delivery
service, and shall (i) specify the aggregate principal amount of Shelf Notes
covered thereby, which shall not be less than $5,000,000 and not be greater
than the Available Facility Amount at the time such Request for Purchase is
made, (ii) specify the principal amounts, final maturities, principal
prepayment dates and
3
<PAGE> 9
amounts and interest payment periods (quarterly or semi-annual in arrears) of
the Shelf Notes covered thereby, (iii) specify the use of proceeds of such
Shelf Notes, (iv) specify the proposed day for the closing of the purchase and
sale of such Shelf Notes, which shall be a Business Day during the Issuance
Period not less than 10 days and not more than 25 days after the making of such
Request for Purchase, (v) specify the number of the account and the name and
address of the depository institution to which the purchase prices of such
Shelf Notes are to be transferred on the Closing Day for such purchase and
sale, (vi) certify that the representations and warranties contained in
paragraph 8 are true on and as of the date of such Request for Purchase and
that there exists on the date of such Request for Purchase no Event of Default
or Default, and (viii) be substantially in the form of Exhibit B attached
hereto. Each Request for Purchase shall be in writing and shall be deemed made
when received by Prudential.
2B(5). RATE QUOTES. Not later than five Business Days
after the Company shall have given Prudential a Request for Purchase pursuant
to paragraph 2B(4), Prudential may, but shall be under no obligation to,
provide to the Company by telephone or telecopier, in each case between 9:30
A.M. and 1:30 P.M. New York City local time (or such later time as Prudential
may elect) interest rate quotes for the several principal amounts, maturities,
principal prepayment schedules, and interest payment periods of Shelf Notes
specified in such Request for Purchase. Each quote shall represent the
interest rate per annum payable on the outstanding principal balance of such
Shelf Notes at which Prudential or a Prudential Affiliate would be willing to
purchase such Shelf Notes at 100% of the principal amount thereof.
2B(6). ACCEPTANCE. Within 30 minutes after Prudential
shall have provided any interest rate quotes pursuant to paragraph 2B(5) or
such shorter period as Prudential may specify to the Company (such period
herein called the "ACCEPTANCE WINDOW"), the Company may, subject to paragraph
2B(7), elect to accept such interest rate quotes as to not less than $5,000,000
aggregate principal amount of the Shelf Notes specified in the related Request
for Purchase. Such election shall be made by an Authorized Officer of the
Company notifying Prudential by telephone or telecopier within the Acceptance
Window that the Company elects to accept such interest rate quotes, specifying
the Shelf Notes (each such Shelf Note being herein called an "ACCEPTED NOTE")
as to which such acceptance (herein called an "ACCEPTANCE") relates. The day
the Company notifies an Acceptance with respect to any Accepted Notes is herein
called the "ACCEPTANCE DAY" for such Accepted Notes. Any interest rate quotes
as to which Prudential does not receive an Acceptance within the Acceptance
Window shall expire, and no purchase or sale of Shelf Notes hereunder shall be
made based on such expired interest rate quotes. Subject to paragraph 2B(7)
and the other terms and conditions hereof, the Company agrees to sell to
Prudential or a Prudential Affiliate, and Prudential agrees to purchase, or to
cause the purchase by a Prudential Affiliate of, the Accepted Notes at 100% of
the principal amount of such Notes. As soon as practicable following the
Acceptance Day, the Company, Prudential and each Prudential Affiliate which is
to purchase any such Accepted Notes will execute a confirmation of such
Acceptance substantially in the form of Exhibit C attached hereto (herein
called a "CONFIRMATION OF ACCEPTANCE"). If the Company should fail to execute
and return to Prudential within three Business Days following receipt thereof a
Confirmation of Acceptance with respect to any Accepted Notes, Prudential may
at its election at any time prior to its receipt thereof cancel the closing
with respect to such Accepted Notes by so notifying the Company in writing.
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2B(7). MARKET DISRUPTION. Notwithstanding the provisions
of paragraph 2B(5), if Prudential shall have provided interest rate quotes
pursuant to paragraph 2B(5) and thereafter prior to the time an Acceptance with
respect to such quotes shall have been notified to Prudential in accordance
with paragraph 2B(6) the domestic market for U.S. Treasury securities or
derivatives shall have closed or there shall have occurred a general
suspension, material limitation, or significant disruption of trading in
securities generally on the New York Stock Exchange or in the domestic market
for U.S. Treasury securities or derivatives, then such interest rate quotes
shall expire, and no purchase or sale of Shelf Notes hereunder shall be made
based on such expired interest rate quotes. If the Company thereafter notifies
Prudential of the Acceptance of any such interest rate quotes, such Acceptance
shall be ineffective for all purposes of this Agreement, and Prudential shall
promptly notify the Company that the provisions of this paragraph 2B(7) are
applicable with respect to such Acceptance.
2B(8). FACILITY CLOSINGS. Not later than 11:30 A.M. (New
York City local time) on the Closing Day for any Accepted Notes, the Company
will deliver to each Purchaser listed in the Confirmation of Acceptance
relating thereto at the offices of the Prudential Capital Group, Four Gateway
Center, 100 Mulberry Street, Newark, New Jersey 07102, Attention: Law
Department, the Accepted Notes to be purchased by such Purchaser in the form of
one or more Notes in authorized denominations as such Purchaser may request for
each Series of Accepted Notes to be purchased on the Closing Day, dated the
Closing Day and registered in such Purchaser's name (or in the name of its
nominee), against payment of the purchase price thereof by transfer of
immediately available funds for credit to the Company's account specified in
the Request for Purchase of such Notes. If the Company fails to tender to any
Purchaser the Accepted Notes to be purchased by such Purchaser on the scheduled
Closing Day for such Accepted Notes as provided above in this paragraph 2B(8),
or any of the conditions specified in paragraph 3 shall not have been fulfilled
by the time required on such scheduled Closing Day, the Company shall, prior to
1:00 P.M., New York City local time, on such scheduled Closing Day notify
Prudential (which notification shall be deemed received by each Purchaser) in
writing whether (i) such closing is to be rescheduled (such rescheduled date to
be a Business Day during the Issuance Period not less than one Business Day and
not more than 10 Business Days after such scheduled Closing Day (the
"RESCHEDULED CLOSING DAY") and certify to Prudential (which certification shall
be for the benefit of each Purchaser) that the Company reasonably believes that
it will be able to comply with the conditions set forth in paragraph 3 on such
Rescheduled Closing Day and that the Company will pay the Delayed Delivery Fee
in accordance with paragraph 2B(9)(iii) or (ii) such closing is to be canceled.
In the event that the Company shall fail to give such notice referred to in the
preceding sentence, Prudential (on behalf of each Purchaser) may at its
election, at any time after 1:00 P.M., New York City local time, on such
scheduled Closing Day, notify the Company in writing that such closing is to be
canceled. Notwithstanding anything to the contrary appearing in this
Agreement, the Company may elect to reschedule a closing with respect to any
given Accepted Notes on not more than one occasion, unless Prudential shall
have otherwise consented in writing.
2B(9). FEES.
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2B(9)(i). FACILITY FEE. In consideration for the time,
effort and expense involved in the preparation, negotiation and execution of
this Agreement, at the time of the execution and delivery of this Agreement,
the Company will pay to Prudential in immediately available funds a fee (herein
called the "FACILITY FEE") in the amount of $20,000. Payment of the Facility
Fee, or any Issuance Fee, Delayed Delivery Fee or Cancellation Fee pursuant to
this Agreement shall be made in immediately available funds to Prudential's
account #050-54-526 at Morgan Guaranty Trust Company of New York, ABA
#021-000-238.
2B(9)(ii). ISSUANCE FEE. The Company will pay to Prudential
in immediately available funds a fee (herein called the "ISSUANCE FEE") on each
Closing Day (other than the Series A Closing Day or any Closing Day that occurs
prior to April 12, 1996) in an amount equal to 0.15% of the aggregate principal
amount of Notes sold on such Closing Day,
2B(9)(iii). DELAYED DELIVERY FEE. If the closing of the
purchase and sale of any Accepted Note is delayed for any reason beyond the
original Closing Day for such Accepted Note, the Company will pay to Prudential
(a) on the Cancellation Date or actual closing date of such purchase and sale
and (b) if earlier, the next Business Day following 90 days after the
Acceptance Day for such Accepted Note and on each Business Day following 90
days after the prior payment hereunder, a fee (herein called the "DELAYED
DELIVERY FEE") calculated as follows:
(BEY - MMY) X DTS/360 X PA
where "BEY" means Bond Equivalent Yield, i.e., the bond equivalent yield per
annum of such Accepted Note, "MMY" means Money Market Yield, i.e., the yield
per annum on a commercial paper investment of the highest quality selected by
Prudential on the date Prudential receives notice of the delay in the closing
for such Accepted Note having a maturity date or dates the same as, or closest
to, the Rescheduled Closing Day or Rescheduled Closing Days (a new alternative
investment being selected by Prudential each time such closing is delayed);
"DTS" means Days to Settlement, i.e., the number of actual days elapsed from
and including the original Closing Day with respect to such Accepted Note (in
the case of the first such payment with respect to such Accepted Note) or from
and including the date of the next preceding payment (in the case of any
subsequent delayed delivery fee payment with respect to such Accepted Note) to
but excluding the date of such payment; and "PA" means Principal Amount, i.e.,
the principal amount of the Accepted Note for which such calculation is being
made. In no case shall the Delayed Delivery Fee be less than zero. Nothing
contained herein shall obligate any Purchaser to purchase any Accepted Note on
any day other than the Closing Day for such Accepted Note, as the same may be
rescheduled from time to time in compliance with paragraph 2B(8).
2B(9)(iv). CANCELLATION FEE. If the Company at any time
notifies Prudential in writing that the Company is canceling the closing of the
purchase and sale of any Accepted Note, or if Prudential notifies the Company
in writing under the circumstances set forth in the last sentence of paragraph
2B(7) or the penultimate sentence of paragraph 2B(8) that the closing of the
purchase and sale of such Accepted Note is to be canceled, or if the closing of
the purchase and sale of such Accepted Note is not consummated on or prior to
the last day
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of the Issuance Period (the date of any such notification, or the last day of
the Issuance Period, as the case may be, being herein called the "CANCELLATION
DATE"), the Company will pay the Purchasers in immediately available funds an
amount (the "CANCELLATION FEE") calculated as follows:
PI X PA
where "PI" means Price Increase, i.e., the quotient (expressed in decimals)
obtained by dividing (a) the excess of the ask price (as determined by
Prudential) of the Hedge Treasury Note(s) on the Cancellation Date over the bid
price (as determined by Prudential) of the Hedge Treasury Notes(s) on the
Acceptance Day for such Accepted Note by (b) such bid price; and "PA" has the
meaning ascribed to it in paragraph 2B(9)(iii). The foregoing bid and ask
prices shall be as reported by Telerate Systems, Inc. (or, if such data for any
reason ceases to be available through Telerate Systems, Inc., any publicly
available source of similar market data). Each price shall be based on a U.S.
Treasury security having a par value of $100.00 and shall be rounded to the
second decimal place. In no case shall the Cancellation Fee be less than zero.
3. CONDITIONS OF CLOSING. The obligation of any
Purchaser to purchase and pay for any Notes is subject to the satisfaction, on
or before the Closing Day for such Notes, of the following conditions:
3A. CERTAIN DOCUMENTS. Such Purchaser shall have
received the following, each dated the date of the applicable Closing Day:
(i) the Note(s) to be purchased by such Purchaser;
(ii) certified copies of the resolutions of the Board of
Directors of the Company authorizing the execution and delivery of
this Agreement and the issuance of the Notes, and of all documents
evidencing other necessary corporate action and governmental
approvals, if any, with respect to this Agreement and the Notes;
(iii) a certificate of the Secretary or an Assistant
Secretary and one other officer of the Company certifying the names
and true signatures of the officers of the Company authorized to sign
this Agreement and the Notes and the other documents to be delivered
hereunder;
(iv) certified copies of the Certificate of
Incorporation and By-laws of the Company;
(v) a favorable opinion of Laurie Berkin, Esq., Staff
Counsel of the Company (or such other counsel designated by the
Company and acceptable to the Purchaser(s)) satisfactory to such
Purchaser and substantially in the form of Exhibit D-1 (in the case of
the Series A Notes) or D-2 (in the case of any Shelf Notes) attached
hereto and as to such other matters as such Purchaser may reasonably
request. The Company hereby directs each such counsel to deliver such
opinion, agrees that the issuance and sale of any Notes will
constitute a reconfirmation of such direction, and
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understands and agrees that each Purchaser receiving such an opinion
will and is hereby authorized to rely on such opinion;
(vi) a good standing certificate for the Company from
the Secretary of State of Georgia dated of a recent date and
certificates of qualification to do business as a foreign corporation
for the Company in North Carolina dated a recent date and such other
evidence of the status of the Company as such Purchaser may reasonably
request;
(vii) good standing certificates for each Material
Subsidiary of the Company from the Secretary of State of such
Subsidiary's respective state of incorporation dated a recent date and
certificates of qualification to do business as a foreign corporation
for each Material Subsidiary in each jurisdiction in which the nature
of the business conducted by such Subsidiary makes such qualification
necessary; and
(viii) additional documents or certificates with respect
to legal matters or corporate or other proceedings related to the
transactions contemplated hereby as may be reasonably requested by
such Purchaser.
3B. REPRESENTATIONS AND WARRANTIES; NO DEFAULT. The
representations and warranties contained in paragraph 8 shall be true on and as
of such Closing Day, except to the extent of changes caused by the transactions
herein contemplated; there shall exist on such Closing Day no Event of Default
or Default; and the Company shall have delivered to such Purchaser an Officer's
Certificate, dated such Closing Day, to both such effects.
3C. PURCHASE PERMITTED BY APPLICABLE LAWS. Assuming
the accuracy of the representation contained in paragraph 9 hereof, the
purchase of and payment for the Notes to be purchased by such Purchaser on the
terms and conditions herein provided (including the use of the proceeds of such
Notes by the Company) shall not violate any applicable law or governmental
regulation (including, without limitation, Section 5 of the Securities Act or
Regulation G, T or X of the Board of Governors of the Federal Reserve System)
and shall not subject such Purchaser to any tax, penalty, liability or other
onerous condition under or pursuant to any applicable law or governmental
regulation, and such Purchaser shall have received such certificates or other
evidence as it may request to establish compliance with this condition.
3D. PAYMENT OF FEES. The Company shall have paid to
Prudential any fees due it pursuant to or in connection with this Agreement,
including any Facility Fee due pursuant to paragraph 2B(9)(i), any Issuance Fee
due pursuant to paragraph 2B(9)(ii) and any Delayed Delivery Fee due pursuant
to paragraph 2B(9)(iii).
4. PREPAYMENTS. The Series A Notes and any Shelf
Notes shall be subject to required prepayment as and to the extent provided in
paragraphs 4A and 4B, respectively. The Series A Notes and any Shelf Notes
shall also be subject to prepayment under the circumstances set forth in
paragraphs 4C and 4E. Any prepayment made by the
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<PAGE> 14
Company pursuant to any other provision of this paragraph 4 shall not reduce or
otherwise affect its obligation to make any required prepayment as specified in
paragraph 4A or 4B.
4A. REQUIRED PREPAYMENTS OF SERIES A NOTES. Until the
Series A Notes shall be paid in full, the Company shall apply to the prepayment
of the Series A Notes, without Yield-Maintenance Amount, the sum of
$3,571,428.57 on October 12 in each of the years 1999 through 2004, inclusive,
and such principal amounts of the Series A Notes, together with interest
thereon to the payment dates, shall become due on such payment dates. The
remaining unpaid principal amount of the Series A Notes, together with interest
accrued thereon, shall become due on the maturity date of the Series A Notes.
4B. REQUIRED PREPAYMENTS OF SHELF NOTES. Each Series
of Shelf Notes shall be subject to required prepayments, if any, set forth in
the Notes of such Series.
4C. OPTIONAL PREPAYMENT WITH YIELD-MAINTENANCE AMOUNT.
The Notes of each Series shall be subject to prepayment, in whole at any time
or from time to time in part (in integral multiples of $100,000 and in a
minimum amount of $1,000,000), at the option of the Company, at 100% of the
principal amount so prepaid plus interest thereon to the prepayment date and
the Yield-Maintenance Amount, if any, with respect to each such Note. Any
partial prepayment of a Series of the Notes pursuant to this paragraph 4C shall
be applied in satisfaction of required payments of principal in inverse order
of their scheduled due dates.
4D. NOTICE OF OPTIONAL PREPAYMENT. The Company shall
give the holder of each Note of a Series to be prepaid pursuant to paragraph 4C
irrevocable written notice of such prepayment not less than 10 Business Days
prior to the prepayment date, specifying such prepayment date, the aggregate
principal amount of the Notes of such Series to be prepaid on such date, the
principal amount of the Notes of such Series held by such holder to be prepaid
on that date and that such prepayment is to be made pursuant to paragraph 4C.
Notice of prepayment having been given as aforesaid, the principal amount of
the Notes specified in such notice, together with interest thereon to the
prepayment date and together with the Yield-Maintenance Amount, if any, herein
provided, shall become due and payable on such prepayment date. The Company
shall, on or before the day on which it gives written notice of any prepayment
pursuant to paragraph 4C, give telephonic notice of the principal amount of the
Notes to be prepaid and the prepayment date to each Significant Holder which
shall have designated a recipient for such notices in the Purchaser Schedule
attached hereto or the applicable Confirmation of Acceptance or by notice in
writing to the Company.
4E. PREPAYMENT OF NOTES UPON CHANGE OF CONTROL. The
Company shall give written notice to each holder of a Note of the occurrence of
any Change of Control after the Series A Closing Day within 10 days after such
occurrence (which notice is herein referred to as the "CONTROL CHANGE NOTICE").
A Control Change Notice shall be given by facsimile communication confirmed by
overnight courier sent on the same day of such facsimile transmission and
contain reasonable detail describing the Change of Control and an offer by the
Company to prepay 100% of such holder's Notes on a closing date designated in
such Control Change Notice, which closing date shall be not less than 30 days
or more than
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<PAGE> 15
60 days after the date of such notice (such closing date being hereinafter
referred to as the "CONTROL CHANGE PREPAYMENT DATE"). Such Control Change
Notice shall also provide that each holder of a Note may accept such offer of
prepayment by notice to the Company not more than 25 days after the date of
such Control Change Notice. Failure of any holder of Notes to respond to any
offer to prepay pursuant to this paragraph 4E shall constitute an acceptance of
such offer. The Company shall prepay all of the Notes on the Control Change
Prepayment Date of any holder which has timely accepted (or which has been
deemed to have accepted) the offer of prepayment at a price equal to 100% of
the principal amount of the Notes to be prepaid, plus accrued interest thereon
to the Control Change Prepayment Date plus the Yield-Maintenance Amount, if
any, in respect of each Note to be prepaid.
4F. APPLICATION OF REQUIRED PREPAYMENTS. In the case
of each prepayment of less than the entire unpaid principal amount of all
outstanding Notes of any Series pursuant to paragraphs 4A, 4B, or 4E, the
amount to be prepaid shall be applied pro rata to all outstanding Notes of such
Series (including, for the purpose of this paragraph 4F only, all Notes prepaid
or otherwise retired or purchased or otherwise acquired by the Company or any
of its Subsidiaries or Affiliates other than by prepayment pursuant to
paragraph 4A, 4B, or 4E) according to the respective unpaid principal amounts
thereof.
4G. RETIREMENT OF NOTES. The Company shall not, and
shall not permit any of its Subsidiaries or Affiliates to, prepay or otherwise
retire in whole or in part prior to their stated final maturity (other than by
prepayment pursuant to paragraphs 4A, 4B, or 4E or upon acceleration of such
final maturity pursuant to paragraph 7A), or purchase or otherwise acquire,
directly or indirectly, Notes of any Series held by any holder unless the
Company or such Subsidiary or Affiliate shall have offered to prepay or
otherwise retire or purchase or otherwise acquire, as the case may be, the same
proportion of the aggregate principal amount of Notes of such Series held by
each other holder of Notes of such Series at the time outstanding upon the same
terms and conditions. Any Notes so prepaid or otherwise retired or purchased
or otherwise acquired by the Company or any of its Subsidiaries or Affiliates
shall not be deemed to be outstanding for any purpose under this Agreement,
except as provided in paragraph 4F.
5. AFFIRMATIVE COVENANTS.
5A. REPORTING REQUIREMENTS.
5A(1). FINANCIAL STATEMENTS. The Company covenants that
it will deliver to each Significant Holder:
(i) as soon as practicable and in any event within 45
days after the end of each quarterly period (other than the last
quarterly period in each fiscal year), consolidated statements of
earnings and cash flows of the Company and its Subsidiaries for the
period from the beginning of the current fiscal year to the end of
such quarterly period, and a consolidated statement of earnings from
the beginning of such quarterly period to the end of such quarterly
period, and a consolidated balance sheet of the Company and its
Subsidiaries as at the end of such quarterly period, setting
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forth in each case in comparative form figures for the corresponding
period in the preceding fiscal year (except as to the consolidated
balance sheet for which the comparable balance sheet date shall be the
end of the preceding fiscal year) all in reasonable detail and
satisfactory to the Required Holders and certified by an authorized
financial officer of the Company as fairly presenting, in all material
respects, the financial condition of the Company and its Subsidiaries
as of the end of such period and the results of their operations for
the period then ended in accordance with generally accepted accounting
principles, subject to changes resulting from normal year-end
adjustments;
(ii) as soon as practicable and in any event within 90
days after the end of each fiscal year, consolidated statements of
earnings, changes in shareholders' equity and cash flows of the
Company and its Subsidiaries for such year, and a consolidated balance
sheet of the Company and its Subsidiaries as at the end of such year,
setting forth in each case in comparative form corresponding
consolidated figures from the preceding annual audit, all in
reasonable detail and satisfactory in scope to the Required Holders
and reported on by independent public accountants of recognized
standing selected by the Company whose opinion shall be in scope and
substance satisfactory to the Required Holders;
(iii) promptly upon transmission thereof, copies of all
such financial statements, proxy statements, notices and reports as it
shall send to its stockholders and copies of registration statements
(without exhibits) and all reports which it files with the Securities
and Exchange Commission (or any governmental body or agency succeeding
to the functions of the Securities and Exchange Commission);
(iv) promptly upon receipt thereof, a copy of each other
report submitted to the Company or any Subsidiary by independent
accountants in connection with any annual, interim or special audit
made by them of the books of the Company or any Subsidiary (except
that letters to management regarding matters not deemed by such
accountants to be material weaknesses in the Company's system of
internal controls need not be delivered except upon written request);
and
(v) with reasonable promptness, such other information
relating to business, operations, affairs, financial condition, assets
or properties of the Company or any of its Subsidiaries (including,
but not limited to consolidating financial statements) as such
Significant Holder may reasonably request.
5A(2). OFFICER'S CERTIFICATE. Together with each delivery
of financial statements required by clauses (i) and (ii) of paragraph 5A(1)
hereof, the Company will deliver to each Significant Holder an Officer's
Certificate demonstrating (with computations in reasonable detail) compliance
by the Company and its Subsidiaries with the provisions of paragraphs 6A,
6B(2), 6B(3) and 6B(5) hereof, and stating that there exists no Event of
Default or Default, or, if any such Event of Default or Default exists,
specifying the nature thereof, the period of existence thereof and what action
the Company proposes to take, has taken or is taking with respect thereto.
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5A(3). ACCOUNTANTS' LETTER. Together with each delivery
of financial statements required by paragraph 5A(1)(ii) above, the Company will
deliver to each Significant Holder a certificate of the independent public
accountants giving the report on such financial statements stating that, in
performing that audit necessary for their report with respect to such financial
statements, they have obtained no knowledge of any Event of Default or Default,
or, if, they shall have obtained knowledge of any such Event of Default or
Default, specifying the nature and period of existence thereof. Such
accountants, however, shall not be liable to anyone by reason of their failure
to obtain knowledge of such Event of Default or Default which would not be
disclosed in the course of any audit conducted in accordance with generally
accepted auditing standards.
5A(4). NOTICE OF DEFAULT. The Company also covenants
that forthwith upon the Responsible Officer of the Company obtaining knowledge
of an Event of Default or Default, it will deliver to each Significant Holder
an Officer's Certificate specifying the nature thereof, the period of existence
thereof, and what action the Company proposes to take, has taken or is taking
with respect thereto.
5A(5). RULE 144A INFORMATION. The Company covenants that,
upon request of the holder of any Note, it will provide such holder, and any
qualified institutional buyer designated by such holder, such financial and
other information as such holder may reasonably determine to be necessary to
order to permit compliance with the information requirement Rule 144A under the
Securities Act in connection with the resale of Notes, except at such times as
the Company is subject to the reporting requirements of section 13 or 15(d) of
the Exchange Act. For the purpose of this paragraph 5A(5), the term "qualified
institutional buyer" shall have the meaning specified in Rule 144A under the
Securities Act.
5B. INSPECTION OF PROPERTY. The Company covenants that
it will permit any Person designated by any Significant Holder in writing, at
such Significant Holder's expense, to visit and inspect any of the properties
of the Company and its Subsidiaries, to examine the corporate books and
financial records of the Company and its Subsidiaries and make copies thereof
or extracts therefrom and to discuss the affairs, finances and accounts of any
of such corporations with the principal officers of the Company and its
independent public accountants, all at such reasonable times and as often as
such Significant Holder may reasonably request.
5C. COVENANT TO SECURE NOTE EQUALLY. The Company
covenants that if it or any Subsidiary shall create or assume any Lien upon any
of its property or assets, whether now owned or hereafter acquired, other than
Liens excepted by the provisions of paragraph 6B(1) (unless prior written
consent to the creation or assumption thereof shall have been obtained pursuant
to paragraph 11C), it will make or cause to be made effective provision whereby
the Notes will be secured by such Lien equally and ratably with any and all
other Debt thereby secured as long as any such other Debt shall be so secured.
5D. MAINTENANCE OF INSURANCE. The Company covenants
that it and each Subsidiary will maintain, with responsible insurers, insurance
with respect to its properties and business against such casualties and
contingencies (including public liability, larceny,
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embezzlement or other criminal misappropriation) and in such amounts as is
customary in the case of similarly situated corporations engaged in the same or
similar businesses. Notwithstanding the foregoing, the Company and its
Subsidiaries may, to the extent permitted by law, establish and responsibly
maintain a sound system of self-insurance against liabilities for workmen's
compensation, employee health benefits and personal injuries and property
damage arising from the operation of motor vehicles, provided that the Company
will maintain adequate reserves with respect thereto and, at all times, the
Company will maintain excess insurance to cover casualties and contingencies
greater than such reserves in such amounts as is customary in such systems of
self-insurance. Together with each delivery of financial statements under
clause (ii) of paragraph 5A(1) the Company, at the option of the Required
Holders, will deliver an Officer's Certificate specifying the details of the
insurance and the system of self-insurance then in effect.
5E. GUARANTEED OBLIGATIONS. The Company covenants that
if, at any time, it or any of its Subsidiaries incurs or permits to exist any
Debt or other obligations guaranteed or collateralized in any other manner by
any Person, it will simultaneously cause such Person to execute and deliver to
each holder of a Note a guaranty agreement in form and substance satisfactory
to the Required Holders guaranteeing payment of a principal amount of the Notes
and interest thereon which bears the same ratio to the total unpaid principal
amount of the Notes as the amount of such other obligation which is guaranteed
bears to the total unpaid principal amount of such other obligation, or if such
other obligation is collateralized, to collateralize each such Note equally and
ratably with such other obligation.
6. NEGATIVE COVENANTS. During the Issuance Period and
so long thereafter as any Note is outstanding or other amount due hereunder is
unpaid, the Company covenants as follows:
6A. FINANCIAL RATIOS. The Company covenants that it
will not at any time permit:
(i) Consolidated Debt to exceed 65% of Total
Capitalization;
(ii) Consolidated Debt to exceed 60% of Total
Capitalization during any Clean-Down Period;
(iii) Priority Debt to exceed 10% of Total Capitalization
during any four month period following any acquisition of the stock or
assets of another Person in which Debt which, after giving effect to
such transaction, would constitute Priority Debt is assumed by the
Company or any Subsidiary and, at all other times, Priority Debt to
exceed 5% of Total Capitalization; and
(iv) Consolidated EBIT to be less than 175% of Fixed
Charges.
6B. LIENS AND OTHER RESTRICTIONS. The Company
covenants that it will not and will not permit any Subsidiary to:
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6B(1). LIENS. Create, assume or suffer to exist any Lien
upon any of its property or assets, whether now owned or hereafter acquired
(whether or not provision is made for the equal and ratable securing of the
Note in accordance with the provisions of paragraph 5C), except
(i) Liens for taxes not yet due or which are being
actively contested in good faith by appropriate proceedings,
(ii) other Liens incidental to the conduct of its
business or the ownership of its property and assets which were not
incurred in connection with the borrowing of money or the obtaining of
advances of credit, and which do not in the aggregate materially
detract from the value of its property or assets or materially impair
the use thereof in the operation of its business,
(iii) Liens on property or assets of a Subsidiary to
secure obligations of such Subsidiary to the Company or another
Subsidiary,
(iv) Liens on assets other than receivables securing
Debt permitted by paragraph 6A, and
(v) Liens on stock of the Company held by it as
treasury stock;
6B(2). INVESTMENTS. Make or permit to remain outstanding
any Investment, except that the Company or any Subsidiary may
(i) make or permit to remain outstanding any Investment
in a Subsidiary or any entity that will become a Subsidiary
immediately after such Investment;
(ii) make or permit to remain outstanding Investments
received in settlement of debts (created in the ordinary course of
business) owing to the Company or any Subsidiary,
(iii) own, purchase or acquire (a) prime commercial paper
and certificates of deposit in United States commercial banks (having
capital reserves in excess of $100,000,000), in each case due within
one year from the date of purchase and payable in the United States in
United States dollars, (b) direct obligations of the United States
Government or any agency thereof, (c) obligations guaranteed by the
United States Government, and (d) repurchase agreements of such banks
for terms of less than one year in respect to the foregoing
certificates and obligations,
(iv) endorse negotiable instruments for collection in
the ordinary course of business,
(v) make or permit to remain outstanding travel and
other like advances to officers and employees in the ordinary course
of business, and
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(vi) make or permit to remain outstanding Investments
other than Investments permitted in clauses (i) through (v) above (but
not any Investment by a Subsidiary in the Company) in an aggregate
amount that does not exceed at any time 10% of Consolidated Net Worth.
For purposes of this paragraph, an Investment shall be valued
at the lesser of cost and the value at which such Investment is to be shown on
the books of the Company and its Subsidiaries in accordance with generally
accepted accounting principles.
6B(3). SALE OF ASSETS. The Company will not, and will not
permit any Subsidiary to, Dispose of any property or assets (including stock of
any Subsidiary), except:
(i) The Company or any Subsidiary may sell inventory in
the ordinary course of business for fair market value;
(ii) any Subsidiary may Dispose of its assets to the
Company or another Subsidiary;
(iii) the Company or any Subsidiary may dispose of its
assets (whether or not leased back) so long as, immediately after
giving effect to such proposed Disposition:
(A) the consideration for such assets
represents the fair market value of such assets (as determined
in good faith by the Company's Board of Directors) at the time
of such Disposition; and
(B) the net book value of all assets so
Disposed of by the Company and its Subsidiaries during the
prior 12 months, does not exceed 10% of consolidated assets of
the Company and its Subsidiaries; and
(C) no Default or Event of Default shall exist.
For purposes of this paragraph 6B(3):
(i) "DISPOSITION" means the sale, lease, transfer or
other disposition of property, and "DISPOSED OF" has a corresponding
meaning to Disposition.
(ii) CALCULATION OF NET BOOK VALUE. The net book value
of any assets shall be determined as of the respective date of
Disposition of those assets; and
(iii) SALE OF LESS THAN ALL THE STOCK OF A SUBSIDIARY.
In the case of the sale or issuance of the stock of a Subsidiary, the
amount of consolidated assets, as the case may be, contributed by the
stock Disposed of shall be assumed to be the percentage of outstanding
stock sold or to be sold.
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6B(4). MERGER AND CONSOLIDATION. Consolidate with or
merge into any other Person or permit any other Person to consolidate with or
merge into it (except that a Subsidiary may consolidate with or merge into the
Company or another Subsidiary or a Person which becomes a Subsidiary in such
merger or consolidation); provided that the restrictions of this paragraph
6B(4) do not apply to the merger or consolidation of the Company or a
Subsidiary with another corporation, if;
(1) the Company or such Subsidiary shall be the
continuing or surviving corporation;
(2) the acquired corporation shall be engaged in a line
of business related to that of the Company or any Subsidiary; and
(3) immediately after the consummation of the
transaction, and after giving effect thereto, no Default or Event of
Default shall have occurred or exist;
6B(5). SALE OR DISCOUNT OF RECEIVABLES. Sell with
recourse, or discount or otherwise sell for less than the face value thereof,
notes or accounts receivable ("Receivables") (other than Receivables that are
more than 90 days past due) in excess of $1,000,000 except that the Company or
any Subsidiary may enter into factoring arrangements with respect to its
Receivables with any Person provided that such arrangements are without
recourse to the Company or any Subsidiary and neither the Company nor any
Subsidiary shall have outstanding at any time Debt owing to any such Person or
any Affiliate of any such Person.
6B(6). CERTAIN CONTRACTS. Enter into or be a party to
(i) any contract providing for the making of loans,
advances or capital contributions to any Person other than a
Subsidiary (except to the extent permitted pursuant to paragraph 6A or
6B(2)), or for the purchase of the property from any Person, in each
case in order to enable such Person to maintain working capital, net
worth or any other balance sheet condition or to pay debts, dividends
or expenses, or
(ii) any contract for the purchase of materials,
supplies or other property or services if such contract (or any
related document) requires that payment for such materials, supplies
or other property or services shall be made regardless of whether or
not delivery of such materials, supplies or other property or services
is ever made or tendered, or
(iii) any contract to rent or lease (as lessee) any real
or personal property if such contract (or any related document)
provides that the obligation to make payments thereunder is absolute
and unconditional under conditions not customarily found in
commercial leases then in general use or requires that the lessee
purchase or otherwise acquire securities or obligations of the lessor,
or
(iv) any contract for the sale or use of materials,
supplies or other property, or the rendering of services, if such
contract (or any related document) requires that payment for such
materials, supplies or other property, or the use thereof, or payment
for such services, shall be subordinated to any indebtedness (of
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the purchaser or user of such materials, supplies or other property or
the Person entitled to the benefit of such services) owed or to be
owed to any Person, or
(v) any other contract which, in economic effect, is
substantially equivalent to a guarantee, except as permitted by
paragraphs 6B(2) or 6A;
6B(7). TRANSACTION WITH RELATED PARTIES. Directly or
indirectly purchase, acquire or lease any property from, or sell, transfer or
lease any property to, or otherwise deal with, in the ordinary course of
business or otherwise (i) any Affiliate, or (ii) any Substantial Stockholder,
provided that the Company may sell to, or purchase from any such Person shares
of the Company's stock, and provided that (a) any such Substantial Stockholder
may be a director, officer or employee of the Company and may be paid
reasonable compensation in connection therewith, (b) the Company may pay
reasonable expenses of any employee stock ownership plan and may otherwise
engage in transactions with any such plan if the cost to the Company thereof is
deductible by the Company for federal income tax purposes, and (c) such acts
and transactions prohibited by this paragraph 6B(7) may be performed or engaged
in if made upon terms not less favorable to the Company than if no such
relationship described in clauses (i) and (ii) above existed.
6C. ERISA. The Company covenants that it will not nor
permit any Subsidiary to:
(i) terminate or withdraw from any Plan resulting in
the incurrence of any material liability to the Pension Benefit
Guaranty Corporation;
(ii) engage in or permit any Person to engage in any
prohibited transaction (as defined in Section 4975 of the Code)
involving any Plan (other than a Multiemployer Plan) which would
subject the Company or any Subsidiary to any material tax, penalty or
other liability;
(iii) incur or suffer to exist any material accumulated
funding deficiency (as defined in section 302 of ERISA and section 412
of the Code), whether or not waived, involving any Plan (other than a
Multiemployer Plan); or
(iv) allow to suffer to exist any risk or condition
which presents a risk of incurring a material liability to the Pension
Benefit Guaranty Corporation.
6D. ENVIRONMENTAL MATTERS. The Company covenants that
it will not, and will not permit any Third Party to, use, produce, manufacture,
process, generate, store, dispose of, manage at, or ship or transport to or
from the Properties any Hazardous Materials except for Hazardous Materials
used, produced, released or managed in the ordinary course of business in
compliance with all applicable Environmental Requirements except where the
failure to do so could not reasonably be expected to have a material adverse
effect on the business, operations or financial condition of the Company and
its Subsidiaries taken as a whole and except for Hazardous Materials released
in amounts which do not require remediation pursuant to applicable
Environmental Requirements or if remediation is required, such remediation
could not reasonably be expected to have a
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material adverse effect on the business, operations or financial condition of
the Company and its Subsidiaries taken as a whole.
7. EVENTS OF DEFAULT.
7A. ACCELERATION. If any of the following events shall
occur and be continuing for any reason whatsoever (and whether such occurrence
shall be voluntary or involuntary or come about or be effected by operation of
law or otherwise):
(i) the Company defaults in the payment of any
principal of or Yield-Maintenance Amount on any Note when the
same become due, either by the terms thereof or otherwise as
herein provided; or
(ii) the Company defaults in the payment of any
interest on any Note for more than ten days after the date
due; or
(iii) the Company or any Subsidiary (x) defaults
in any payment of principal of or interest on any other
obligation for money borrowed (or any Capitalized Lease
Obligation, any obligation under conditional sale or other
title retention agreement or any obligation issued or assumed
as full or partial payment for property whether or not secured
by a purchase money mortgage or any obligation under notes
payable or drafts accepted representing extensions of credit)
beyond any period of grace provided with respect thereto, or
(y) fails to perform or observe any other agreement, term or
condition contained in any agreement under which any such
obligation is created (or if any other event or default
thereunder or under any such agreement shall occur and be
continuing) and the effect of such default, event or failure
is to cause, the holder or holders of such obligation (or a
trustee on behalf of such holder or holders) to cause, such
obligation to become due, redeemed, purchased or defeased
prior to any stated maturity, or (z) fails to perform or
observe any other agreement, term or condition contained in
any agreement under which any such obligation is created (or
if any other event or default thereunder or under any such
agreement shall occur and be continuing) and the effect of
such default, event or failure is to permit the holder or
holders of such obligation (or a trustee on behalf of such
holder or holders) to cause, such obligation to become due,
redeemed, purchased or defeased prior to any stated maturity
and such default, event or failure shall not have been
remedied within five days after the date of occurrence,
provided that the aggregate amount of all obligations as to
which such a default, event or failure causing or permitting
acceleration, redemption, purchase or defeasance exceeds
$1,000,000;
(iv) any representation or warranty made by the
Company herein or in any writing furnished in connection with
or pursuant to this Agreement shall be false in any material
respect on the date as of which made; or
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(v) the Company defaults in the performance or
observance of any agreement contained in paragraph 5E or
paragraph 6 hereof; or
(vi) the Company defaults in the performance or
observance of any other agreement, term or condition contained
herein and such default shall not have been remedied within 30
days after any officer of the Company obtains actual knowledge
thereof; or
(vii) the Company or any Subsidiary makes an
assignment for the benefit of creditors or is generally not
paying its debts as such debts become due; or
(viii) any order for relief in respect of the
Company or any Subsidiary is entered under any bankruptcy,
reorganization, compromise, arrangement, insolvency,
readjustment of debt, dissolution or liquidation or similar
law, whether now or hereafter in effect (herein called the
"Bankruptcy Law") of any jurisdiction; or
(ix) the Company or any Subsidiary petitions or
applies to any tribunal for, or consents to, the appointment
of, or taking possession by, a trustee, receiver, custodian,
liquidator or similar official of the Company or any
Subsidiary, or of any substantial part of the assets of the
Company or any Subsidiary, or commences a voluntary case under
the Bankruptcy Law of the United States or any proceedings
(other than proceedings for the voluntary liquidation and
dissolution of a Subsidiary) relating to the Company or any
Subsidiary under the Bankruptcy Law of any other jurisdiction;
or
(x) any such petition or application is filed,
or any such proceedings are commenced, against the Company or
any Subsidiary and the Company or such Subsidiary by any act
indicates its approval thereof, consent thereto or
acquiescence therein, or an order, judgment or decree is
entered appointing any such trustee, receiver, custodian,
liquidator or similar official, or approving the petition in
any such proceedings, and such order, judgment or decree
remains unstayed and in effect for more than 30 days; or
(xi) any order, judgment or decree is entered
in any proceedings against the Company decreeing the
dissolution of the Company and such order, judgment or decree
remains unstayed and in effect for more than 60 days; or
(xii) any order, judgment or decree is entered
in any proceedings against the Company or any Subsidiary
decreeing a split-up of the Company or such Subsidiary which
requires the divestiture of more than 10%, or the divestiture
of the stock of a Subsidiary whose assets constitute more than
10%, of the consolidated assets of the Company and its
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<PAGE> 25
Subsidiaries (determined in accordance with generally accepted
accounting principles) or which requires the divestiture of
assets, or stock of a Subsidiary, which shall have contributed
more than 10% of Consolidated Net Earnings for any of the
three fiscal years then most recently ended, and such order,
judgment or decree remains unstayed and in effect for more
than 60 days;
(xiii) a final judgment in an amount in excess of
$500,000 is rendered against the Company or any Subsidiary
and, within 60 days after entry thereof, such judgment is not
discharged or execution thereof stayed pending appeal, or
within 60 days after the expiration of any such stay, such
judgment is not discharged;
then: (a) if such event is an Event of Default
specified in clause (i) or (ii) of this paragraph
7A, the holder of any Note (other than the Company
or any Subsidiary or Affiliate) may at its option,
by written notice to the Company, declare such Note
to be, and such Note shall thereupon be and become,
immediately due and payable at par together with
interest accrued and unpaid thereon, without
presentment, demand, protest or other notice of any
kind (including, without limitation, notice of
intent to accelerate) all of which are hereby
waived by the Company,
(b) if such event is an Event of Default
specified in any of clauses (vii), (viii), (ix) or
(x) of this paragraph 7A with respect to the
Company, the Facility shall automatically terminate
and all of the Notes at the time outstanding shall
automatically become immediately due and payable at
par together with interest accrued and unpaid
thereon, and to the extent permitted by applicable
law, the Yield-Maintenance Amount, if any, without
presentment, demand, protest or notice of any kind
(including, without limitation, notice of intent to
accelerate and notice of acceleration of maturity),
all of which are hereby waived by the Company, and
(c) if such event is any Event of
Default other than specified in clauses (vii),
(viii), (ix) or (x) of this paragraph 7A with
respect to the Company, the Required Holder(s) may,
at its or their option, by written notice to the
Company, terminate the Facility and declare all of
the Notes to be, and all of the Notes shall
thereupon be and become, immediately due and
payable together with interest accrued and unpaid
thereon and, to the extent permitted by applicable
law, the Yield Maintenance Amount, if any, with
respect to each Note, without presentment, demand,
protest or other notice of any kind (including,
without limitation, notice of intent to
accelerate), all of which are hereby waived by the
Company.
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7B. RESCISSION OF ACCELERATION. At any time after any
or all of the Notes shall have been declared immediately due and payable
pursuant to paragraph 7A, the Required Holder(s) may, by notice in writing to
the Company, rescind and annul such declaration and its consequences if;
(i) the Company shall have paid all accrued and unpaid
overdue interest on the Notes, the principal of and Yield-Maintenance
Amount, if any, payable with respect to any Notes which have become
due otherwise than by reason of such declaration, and accrued and
unpaid interest on such overdue interest and overdue principal and
Yield Maintenance Amount at the rate specified in the Notes,
(ii) the Company shall not have paid any amounts which
have become due solely by reason of such declaration,
(iii) all Events of Default and Defaults, other than
non-payment of amounts which have become due solely by reason of such
declaration, shall have been cured or waived pursuant to paragraph
11C, and
(iv) no judgment or decree shall have been entered for
the payment of any amounts due pursuant to the Notes or this
Agreement.
No such rescission or annulment shall extend to or affect any subsequent Event
of Default or Default or impair any right arising therefrom.
7C. NOTICE OF ACCELERATION OR RESCISSION. Whenever
any Note shall be declared immediately due and payable pursuant to paragraph 7A
or any such declaration shall be rescinded and annulled pursuant to paragraph
7B, the Company shall forthwith give written notice thereof to the holder of
each Note at the time outstanding.
7D. OTHER REMEDIES. If any Event of Default or Default
shall occur and be continuing, the holder of any Note may proceed to protect
and enforce its rights under this Agreement and such Note by exercising such
remedies as are available to such holder in respect thereof under applicable
law, either by suit in equity or by action at law, or both, whether for
specific performance of any covenant or other agreement contained in this
Agreement or in aid of the exercise of any power granted in this Agreement. No
remedy conferred in this Agreement upon the holder of any Note is intended to
be exclusive of any other remedy, and each and every such remedy shall be
cumulative and shall be in addition to every other remedy conferred herein or
now or hereafter existing at law or in equity or by statute or otherwise.
8. REPRESENTATIONS, COVENANTS AND WARRANTIES. The
Company represents, covenants and warrants:
8A. ORGANIZATION AND QUALIFICATION. The Company is a
corporation duly organized and existing in good standing under the laws of the
State of Georgia, each Subsidiary is duly organized and existing in good
standing under the laws of the jurisdiction in which incorporated, and the
Company and each Subsidiary has the corporate power to own
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<PAGE> 27
its respective property and to carry on its respective business as now being
conducted, and the Company and each Subsidiary is duly qualified as a foreign
corporation to do business and in good standing in every jurisdiction in which
the nature of the respective business conducted by it makes such qualification
necessary and where the failure to be so qualified could reasonably be expected
to have a material adverse effect upon the business, condition (financial or
otherwise), or operations of the Company and its Subsidiaries, taken as a
whole. The name of each Subsidiary in existence on the date hereof and the
jurisdiction of incorporation of each such Subsidiary are set forth on Schedule
8A attached hereto.
8B. FINANCIAL STATEMENTS. The Company has furnished
each Purchaser of any Notes with the following financial statements, identified
by a principal financial officer of the Company: (i) consolidated balance
sheets of the Company and its Subsidiaries as at the end of the three fiscal
years of the Company most recently completed prior to the date as of which this
representation is made or repeated to such Purchaser (other than fiscal years
completed within 90 days prior to such date for which audited financial
statements have not been released) and consolidated statements of earnings,
changes in shareholder's equity and cash flows of the Company and its
Subsidiaries for each such year, all reported on by Deloitte & Touche, L.L.P.
and (ii) a consolidated balance sheet of the Company and its Subsidiaries as
at the end of the quarterly period (if any) most recently completed prior to
such date and after the end of such fiscal year (other than quarterly periods
completed within 60 days prior to such date for which financial statements have
not been released) and the comparable quarterly period in the preceding fiscal
year and consolidated statements of earnings, changes in shareholder's equity
and cash flows for the periods from the beginning of the fiscal years in which
such quarterly periods are included to the end of such quarterly periods,
prepared by the Company. Such financial statements (including any related
schedules and/or notes) are true and correct in all material respects (subject,
as to interim statements, to changes resulting from audits and year-end
adjustments), have been prepared in accordance with generally accepted
accounting principles consistently followed throughout the periods involved and
show all liabilities, direct and contingent, of the Company and its
Subsidiaries required to be shown in accordance with such principles. The
balance sheets fairly present the condition of the Company and its Subsidiaries
as at the dates thereof, and the statements of income, stockholders' equity and
cash flows fairly present the results of the operations of the Company and its
Subsidiaries and their cash flows for the periods indicated. There has been no
material adverse change in the business, property or assets, condition
(financial or otherwise), operations or prospects of the Company and its
Subsidiaries taken as a whole since the end of the most recent fiscal year for
which such audited financial statements have been furnished.
8C. ACTIONS PENDING. There is no action, suit,
investigation or proceeding pending or, to the knowledge of the Company,
threatened against the Company or any of its Subsidiaries, or any properties or
rights of the Company or any of its Subsidiaries, by or before any court,
arbitrator or administrative or governmental body which might result in any
material adverse change in the business, condition or operations of the Company
and its Subsidiaries taken as a whole.
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8D. OUTSTANDING DEBT. Neither the Company nor any of
its Subsidiaries has outstanding any Funded or Current Debt, on a consolidated
basis, except Debt permitted by paragraph 6A. There exists no default under
the provisions of any instrument evidencing such Debt or of any agreement
relating thereto.
8E. TITLE TO PROPERTIES. The Company and each of its
Subsidiaries has good and marketable title to its respective real properties
(other than properties which it leases) and good title to all of its other
respective properties and assets, including the properties and assets reflected
in the balance sheet most recently delivered pursuant to paragraph 8B (other
than properties and assets disposed of in the ordinary course of business),
subject to no Lien of any kind except Liens permitted by paragraph 6B(l). The
Company and its Subsidiaries enjoy peaceful and undisturbed possession under
all leases necessary in any material respect for the operation of their
respective properties and assets, none of which contains any unusual or
burdensome provisions which might materially affect or impair the operation of
such properties and assets. All such leases are valid and subsisting and are
in full force and effect.
8F. TAXES. The Company has and each of its
Subsidiaries has filed all federal, state and other income tax returns which
are required to be filed, and each has paid all taxes as shown on said returns
and on all assessments received by it to the extent that such taxes have become
due, except such taxes as are being contested in good faith by appropriate
proceedings for which adequate reserves have been established in accordance
with generally accepted accounting principles. Federal income tax returns of
the Company and its Subsidiaries have been examined and reported on by the
taxing authorities or closed by applicable statutes and satisfied for all
fiscal years prior to and including the fiscal year ended on April 3, 1994.
8G. CONFLICTING AGREEMENTS AND OTHER MATTERS. Neither
the Company nor any of its Subsidiaries is a party to any contract or agreement
or subject to any charter or other corporate restriction which materially and
adversely affects its business, property or assets, or financial condition.
Neither the execution nor delivery of this Agreement or Note, nor the offering,
issuance and sale of any Note, nor fulfillment of or compliance with the terms
and provisions hereof and of any Note will conflict with, or result in a breach
of the terms, conditions or provisions of, or constitute a default under, or
result in any violation of, or result in the creation of any Lien upon any of
the properties or assets of the Company or any Subsidiary pursuant to, the
charter or by-laws of the Company or any of its Subsidiaries, any award of any
arbitrator or any agreement (including any agreement with stockholders),
instrument, order, judgment, decree, statute, law, rule or regulation to which
the Company or any of its Subsidiaries is subject. Neither the Company nor any
Subsidiary is a party to, or otherwise subject to any provision contained in,
any instrument evidencing indebtedness of the Company or such Subsidiary, any
agreement relating thereto or any other contract or agreement (including its
charter) which limits the amount of, or otherwise imposes restrictions on the
incurring of, Funded Debt of the type to be evidenced by the Notes, except the
Agreements listed in Schedule 8G.
8H. OFFERING OF NOTES. Neither the Company nor any
agent acting on its behalf has, directly or indirectly, offered the Notes or
any similar security of the Company for sale to, or solicited any offers to buy
the Notes or any similar security of the Company from,
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<PAGE> 29
or otherwise approached or negotiated with respect thereto with any Person
other than institutional investors, and neither the Company nor any agent
acting on its behalf has taken or will take any action which would subject the
issuance or sale of the Notes to the provisions of Section 5 of the Securities
Act or to the provisions of any securities or Blue Sky law of any applicable
jurisdiction.
8I. REGULATION G, ETC. Neither the Company nor any
Subsidiary owns or has any present intention of acquiring any "margin stock" as
defined in Regulation G (12 CFR Part 207) of the Board of Governors of the
Federal Reserve System (herein called a "margin stock"). None of the proceeds
of the Notes will be used, directly, or indirectly, for the purpose, whether
immediate, incidental or ultimate, of purchasing or carrying any margin stock
or for the purpose of reducing or retiring any indebtedness which was
originally incurred to purchase or carry a margin stock or for any other
purpose which might constitute this transaction a "purpose credit" within the
meaning of said Regulation G. Neither the Company nor any agent acting on its
behalf has taken or will take any action which might cause this Agreement or
the Notes to violate Regulation G, Regulation T, Regulation X or any other
regulation of the Board of Governors of the Federal Reserve System or to
violate the Securities Exchange Act of 1934 as amended, in each case as in
effect now or as the same may hereafter be in effect.
8J. COMPLIANCE WITH LAWS AND REGULATIONS. The Company
and each of its Subsidiaries complies in all material respects with all
federal, state, local, and other laws, ordinances and other governmental rules
or regulations to which any of them is subject, including without limitation,
laws and regulations relating to pollution and environmental control, equal
employment opportunity and employee safety and the Company will promptly comply
and will cause each of its Subsidiaries promptly to comply with all such laws
and regulations which may be legally imposed on the Company, or any Subsidiary,
or any of their respective properties, businesses, and operations, in the
future in jurisdictions in which the Company or any Subsidiary may then be
doing business.
8K. ERISA. No accumulated funding deficiency (as
defined in section 302 of ERISA and section 412 of the Code), whether or not
waived, exists with respect to any plan (other than a Multiemployer Plan). No
liability to the Pension Benefit Guaranty Corporation has been incurred with
respect to any plan (other than a Multiemployer Plan) by the Company or any of
its Subsidiaries which is materially adverse to the Company and its
Subsidiaries taken as a whole. Neither the Company nor any of its Subsidiaries
has incurred any withdrawal liability under Title IV of ERISA with respect to
any Multiemployer Plan which is materially adverse to the Company and its
Subsidiaries taken as a whole and no facts currently exist which would
reasonably be expected to cause any such liability to be incurred. The
execution and delivery of this Agreement and the issuance and sale of the Notes
are not transactions which are subject to the prohibitions of section 406 of
ERISA or in connection with which a tax could be imposed pursuant to section
4975 of the Code. The representation by the Company in the next preceding
sentence is made in reliance upon and subject to the accuracy of the
Purchaser's representation in paragraph 9 of this Agreement as to the source
of the funds to be used to pay the purchase price of the Notes to be purchased
by such Purchaser.
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8L. GOVERNMENTAL CONSENT. Neither the nature of the
Company or of any Subsidiary, nor any of their respective businesses or
properties, nor any relationship between the Company or any Subsidiary and any
other Person, nor any circumstance in connection with the offer, issue, sale or
delivery of any Note is such as to require any consent, approval or other
action by or any notice to or filing with any court or administrative or
governmental body (other than routine filings after the applicable Closing Day
with the Securities and Exchange Commission and/or State Blue Sky authorities)
in connection with the execution and delivery of this Agreement, the offer,
issue, sale or delivery of the Notes or fulfillment of or compliance with the
terms and provisions hereof or of the Notes.
8M. HOLDING COMPANY AND INVESTMENT COMPANY STATUS.
Neither the Company nor any Subsidiary is a "holding company," or a "subsidiary
company" of a "holding company," or an "affiliate" of a "holding company" or of
a "subsidiary company" of a "holding company," or a "public utility," within
the meaning of the Public Utility Holding Company Act of 1935, as amended, or a
"public utility" within the meaning of the Federal Power Act, as amended.
Neither the Company nor any Subsidiary is an "investment company" or a company
"controlled" by an "investment company" within the meaning of the Investment
Company Act of 1940, as amended, or an "investment adviser" within the meaning
of the Investment Advisers Act of 1940, as amended.
8N. POSSESSION OF FRANCHISES, ETC. The Company and its
Subsidiaries possess all franchises, certificates, licenses, permits and other
authorizations from governmental political subdivisions or regulatory
authorities, free from burdensome restrictions, that are necessary in any
material respect for the ownership, maintenance and operation of their
respective properties and assets, and neither the Company nor any Subsidiary is
in violation of any thereof in any material respect.
8O. PATENTS, ETC. The Company and its Subsidiaries
have obtained all patents, trademarks, servicemarks, trade names, copyrights,
licenses and other rights, free from burdensome restrictions, that are
necessary for the operation of their respective businesses as presently
conducted and as proposed to be conducted. Nothing has come to the attention
of the Company or any Subsidiary or to any of its directors or officers to the
effect that (i) any product, process, method, substance, part or other material
presently contemplated to be sold by or employed by the Company or any
Subsidiary in connection with such business may infringe any patent, trademark,
servicemark, trade name, copyright, license or other right owned by any other
Person, (ii) there is pending or threatened any claim or litigation against or
affecting the Company or any Subsidiary contesting its right to sell or use any
such product, process, method, substance, part or other material, or (iii)
there is, or there is pending or proposed, any patent, invention, device,
application or principle or any statute, rule, law, regulation, standard or
code which would prevent, inhibit or render obsolete the production or sale of
any products of, or substantially reduce the projected revenues of, or
otherwise adversely affect the business, condition or operations of, the
Company or any Subsidiary.
8P. DISCLOSURE. Neither this Agreement nor any other
document, certificate or statement furnished to the Purchasers by or on behalf
of the Company in connection herewith contains any untrue statement of a
material fact or omits to state a material fact necessary in order to make the
statements contained herein and therein not
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misleading. There is no fact peculiar to the Company or its Subsidiaries which
materially adversely affects or in the future may (so far as the Company can
now foresee) materially adversely affect the business, property or assets, or
financial condition of the Company or any of its Subsidiaries which has not
been set forth in this Agreement or in the other documents, certificates and
statements furnished to the Purchasers by or on behalf of the Company prior to
the date hereof in connection with the transactions contemplated hereby.
8Q. HOSTILE TENDER OFFERS. None of the proceeds from
the sale of any Notes will be used to finance Hostile Tender Offers.
9. REPRESENTATIONS OF THE PURCHASERS. Each Purchaser
represents: (i) that it is purchasing the Notes for its own account or for one
or more separate accounts maintained by it or for the account of one or more
pension or trust funds and not with a view to the distribution or sale thereof,
provided that the disposition of its property shall at all times be within its
control; and (ii) at least one of the following statements is an accurate
representation as to each source of funds (a "Source") to be used to pay the
purchase price of the Notes to be purchased by it hereunder:
(a) if an insurance company, the Source does not
include assets allocated to any separate account maintained by it in
which any employee benefit plan (or its related trust) has any
interest, other than a separate account that is maintained solely in
connection with its fixed contractual obligations under which the
amounts payable, or credited, to such plan and to any participant or
beneficiary of such plan (including any annuitant) are not affected in
any manner by the investment performance of the separate account; or
(b) the Source is either (i) an insurance company
pooled separate account, within the meaning of Prohibited Transaction
Exemption ("PTE") 90-1 (issued January 29, 1990), (ii) a bank
collective investment fund, within the meaning of the PTE 91-38
(issued July 12, 1991) and, except as such Purchaser shall have
disclosed to the Company in writing pursuant to this clause (b), no
employee benefit plan or group of plans maintained by the same
employee organization beneficially owns more than 10% of all assets
allocated to such pooled separate account or collective investment
fund or (iii) the Source is an insurance company general account of
which the assets are such that if any of them are, or are deemed to
be, assets of any Plan, the acquisition of the Notes by such Purchaser
pursuant hereto is eligible for and satisfies the requirements of PTE
95-60 (issued July 12, 1995); or
(c) the Source constitutes assets of an "investment
fund" (within the meaning of Part V of PTE 84-14 managed by a
"qualified professional asset manager" or "QPAM" (within the meaning
of Part V of PTE 84- 14), no employee benefit plan's assets that are
included in such investment fund, when combined with the assets of all
other employee benefit plans established or maintained by the same
employer or by an affiliate (within the meaning of Section V(c)(1) of
PTE 84-14) of such employer or by the same employer or by the same
employee organization and managed by such QPAM, exceed 20% of the
total client assets managed by such QPAM, the conditions of Part I(c)
and (g) of PTE 84-14 are satisfied, neither the QPAM nor a person
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controlling or controlled by the QPAM (applying the definition of
"control" in Section V(e) of the PTE 84-14) owns a 5% or more interest
in the Company and (i) the identity of such QPAM and (ii) the names of
all employee benefit plans whose assets are included in such
investment fund have been disclosed to the Company in writing pursuant
to this paragraph (c); or
(d) the Source is a governmental plan; or
(e) the Source is one or more employee benefit plans,
or a separate account or trust fund comprised of one or more employee
benefit plans, each of which has been identified to the Company in
writing pursuant to this paragraph (e); or
(f) the Source does not include assets of any employee
benefit plan, other than a plan exempt from the coverage of ERISA.
As used in this paragraph, the terms "EMPLOYEE BENEFIT PLAN", "GOVERNMENTAL
PLAN", "PARTY IN INTEREST" and "SEPARATE ACCOUNT" shall have the respective
meanings assigned to such terms in Section 3 of ERISA.
10. DEFINITIONS; ACCOUNTING MATTERS. For the purpose
of this Agreement, the terms defined in paragraphs 10A and 10B (or within the
text of any other paragraph) shall have the respective meanings specified
therein and all accounting matters shall be subject to determination as
provided in paragraph 10C.
10A. YIELD-MAINTENANCE TERMS.
"CALLED PRINCIPAL" shall mean, with respect to any Note, the
principal of such Note that is to be prepaid pursuant to paragraph 4C or 4E or
is declared to be immediately due and payable pursuant to paragraph 7A, as the
context requires.
"DISCOUNTED VALUE" shall mean, with respect to the Called
Principal of any Note, the amount obtained by discounting all Remaining
Scheduled Payments with respect to such Called Principal from their respective
scheduled due dates to the Settlement Date with respect to such Called
Principal, in accordance with accepted financial practice and at a discount
factor (as converted to reflect the periodic basis on which interest on such
Note is payable, if payable other than on a semi-annual basis) equal to the
Reinvestment Yield with respect to such Called Principal.
"REINVESTMENT YIELD" shall mean, with respect to the Called
Principal of any Note, the yield to maturity implied by (i) the yields
reported, as of 10:00 A.M. (New York City local time) on the Business Day next
preceding the Settlement Date with respect to such Called Principal, on the
display designated as "Page 678" on the Telerate Service (or such other display
as may replace page 678 on the Telerate Service) for actively traded U.S.
Treasury securities having a maturity equal to the Remaining Average Life of
such Called Principal as of such Settlement Date, or if such yields shall not
be reported as of such time or the yields reported as of such time shall not be
ascertainable, (ii) the Treasury Constant Maturity Series
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<PAGE> 33
yields reported, for the latest day for which such yields shall have been so
reported as of the Business Day next preceding the Settlement Date with respect
to such Called Principal, in Federal Reserve Statistical Release H.15 (519) (or
any comparable successor publication) for actively traded U.S. Treasury
securities having a constant maturity equal to the Remaining Average Life of
such Called Principal as of such Settlement Date. Such implied yield shall be
determined, if necessary, by (a) converting U.S. Treasury bill quotations to
bond-equivalent yields in accordance with accepted financial practice and (b)
interpolating linearly between yields reported for various maturities.
"REMAINING AVERAGE LIFE" shall mean, with respect to the
Called Principal of any Note, the number of years (calculated to the nearest
one-twelfth year) obtained by dividing (i) such Called Principal into (ii) the
sum of the products obtained by multiplying (a) each Remaining Scheduled
Payment of such Called Principal (but not of interest thereon) by (b) the
number of years (calculated to the nearest one-twelfth year) which will elapse
between the Settlement Date with respect to such Called Principal and the
scheduled due date of such Remaining Scheduled Payment.
"REMAINING SCHEDULED PAYMENTS" shall mean, with respect to the
Called Principal of any Note, all payments of such Called Principal and
interest thereon that would be due on or after the Settlement Date with respect
to such Called Principal if no payment of such Called Principal were made prior
to its scheduled due date.
"SETTLEMENT DATE" shall mean, with respect to the Called
Principal of any Note, the date on which such Called Principal is to be prepaid
pursuant to paragraphs 4C or 4E or is declared to be immediately due and
payable pursuant to paragraph 7A, as the context requires.
"YIELD-MAINTENANCE AMOUNT" shall mean, with respect to any
Note, an amount equal to the excess, if any, of the Discounted Value of the
Called Principal of such Note over the sum of (i) such Called Principal plus
(ii) interest accrued thereon as of (including interest due on) the Settlement
Date with respect to such Called Principal. The Yield-Maintenance Amount shall
in no event be less than zero.
10B. OTHER TERMS.
"ACCEPTANCE" shall have the meaning specified in paragraph
2B(6).
"ACCEPTANCE DAY" shall have the meaning specified in paragraph
2B(6).
"ACCEPTANCE WINDOW" shall have the meaning specified in
paragraph 2B(6).
"ACCEPTED NOTE" shall have the meaning specified in paragraph
2B(6).
"AFFILIATE" shall mean any Person directly or indirectly
controlling, controlled by, or under direct or indirect common control with,
the Company, except a Subsidiary. A Person shall be deemed to control a
corporation if such Person possesses, directly or indirectly,
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<PAGE> 34
the power to direct or cause the direction of the management and policies of
such corporation, whether through the ownership of voting securities, by
contract or otherwise.
"AUTHORIZED OFFICER" shall mean (i) in the case of the
Company, its chief executive officer, its chief financial officer, treasurer or
any vice president of the Company designated as an "Authorized Officer" of the
Company in the Information Schedule attached hereto or any vice president of
the Company designated as an "Authorized Officer" of the Company for the
purpose of this Agreement in an Officer's Certificate executed by the Company's
chief executive officer, chief financial officer or treasurer and delivered to
Prudential, and (ii) in the case of Prudential, any officer of Prudential
designated as its "Authorized Officer" in the Information Schedule or any
officer of Prudential designated as its "Authorized Officer" for the purpose of
this Agreement in a certificate executed by one of its Authorized Officers.
Any action taken under this Agreement on behalf of the Company by any
individual who on or after the date of this Agreement shall have been an
Authorized Officer of the Company and whom Prudential in good faith believes to
be an Authorized Officer of the Company at the time of such action shall be
binding on the Company even though such individual shall have ceased to be an
Authorized Officer of the Company, and any action taken under this Agreement on
behalf of Prudential by any individual who on or after the date of this
Agreement shall have been an Authorized Officer of Prudential and whom the
Company in good faith believes to be an Authorized Officer of Prudential at the
time of such action shall be binding on Prudential even though such individual
shall have ceased to be an Authorized Officer of Prudential.
"AVAILABLE FACILITY AMOUNT" shall have the meaning specified
in paragraph 2B(1).
"BANKRUPTCY LAW" shall have the meaning specified in clause
(viii) of paragraph 7A.
"BUSINESS DAY" shall mean any day other than (i) a Saturday or
a Sunday, (ii) a day on which commercial banks in New York City are required or
authorized to be closed and (iii) for purposes of paragraph 2B(4) hereof only,
a day on which The Prudential Insurance Company of America is not open for
business.
"CANCELLATION DATE" shall have the meaning specified in
paragraph 2B(9)(iv).
"CANCELLATION FEE" shall have the meaning specified in
paragraph 2B(9)(iv).
"CAPITALIZED LEASE OBLIGATION" shall mean any rental
obligation which, under generally accepted accounting principles, is or will be
required to be capitalized on the books of the Company or any Subsidiary, taken
at the amount thereof accounted for as indebtedness (net of interest expenses)
in accordance with such principles.
"CHANGE OF CONTROL" shall mean the acquisition after the date
of this Agreement by any Person (as such term is used in section 13(d) and
section 14(d)(2) of the Exchange Act or related persons constituting a group
(as such terms is used in Rule 13d-5
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<PAGE> 35
under Exchange Act), other than any member of the Management Group, of
beneficial ownership (as such term is used under Rule 13d-3 under the Exchange
Act) directly or indirectly of Voting Stock sufficient to elect or cause the
election of at least a majority of the Company's Board of Directors.
"CLEAN-DOWN PERIOD" shall mean a period of ninety consecutive
days, chosen by the Company, during each fiscal year of the Company.
"CLOSING DAY" shall mean, with respect to the Series A Notes,
the Series A Closing Day and, with respect to any Accepted Note, the Business
Day specified for the closing of the purchase and sale of such Accepted Note in
the Request for Purchase of such Accepted Note, provided that (i) if the
Company and the Purchaser which is obligated to purchase such Accepted Note
agree on an earlier Business Day for such closing, the "CLOSING DAY" for such
Accepted Note shall be such earlier Business Day, and (ii) if the closing of
the purchase and sale of such Accepted Note is rescheduled pursuant to
paragraph 2B(8), the Closing Day for such Accepted Note, for all purposes of
this Agreement except references to "original Closing Day" in paragraph
2B(9)(iii), shall mean the Rescheduled Closing Day with respect to such
Accepted Note.
"CODE" shall mean the Internal Revenue Code of 1986, as
amended.
"CONFIRMATION OF ACCEPTANCE" shall have the meaning specified
in paragraph 2B(6).
"CONSOLIDATED DEBT" shall mean, at any time, Debt of the
Company and its Subsidiaries consolidated in accordance with generally accepted
accounting principles.
"CONSOLIDATED EBIT" shall mean, for any applicable period of
the Company and its Subsidiaries on a consolidated basis, an amount equal to
(A) the sum for such period of Consolidated Net Income (Loss) plus interest
expense on all Debt of the Company and its Subsidiaries on a consolidated basis
plus Rentals, plus provisions for taxes on income minus (B):
(i) any gains resulting from the write-up of assets;
(ii) any deferred credit representing the excess of
equity in any Subsidiary of the Company at the date of acquisition
over the cost of the investment in such Subsidiary;
(iii) gains arising from the acquisition of debt
securities for a cost less than the principal amount and accrued
interest;
(iv) extraordinary items or transactions of a
non-recurring or non-operating and material nature or arising from
gains or sales relating to the discontinuance of operations;
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<PAGE> 36
(v) any portion of the net income (included in the
determination of Consolidated Net Income (Loss)), of any Subsidiary
which for any reason shall be unavailable for payment of dividends to
the Company; or
(vi) any earnings or deferred credit (or amortization of
a deferred credit) of any Person acquired by the Company or any
Subsidiary through purchase, merger or consolidation or otherwise (an
"Acquired Person") for any period prior to the year of acquisition not
included in gross revenues under generally accepted accounting
principles unless there shall exist for such Acquired Person, a
consolidated balance sheet, and consolidated statements of earnings,
stockholders' equity and cash flows for the Acquired Person as at the
end of such year reported on by independent accountants of recognized
standing whose report shall be without limitation as to scope of
audit;
all as determined in accordance with generally accepted accounting principles.
"CONSOLIDATED NET INCOME (LOSS)" shall mean, for any
applicable period, for the Company and its Subsidiaries on a consolidated
basis, net income (or loss) determined in accordance with generally accepted
accounting principles.
"CONSOLIDATED NET WORTH" shall mean the sum of capital stock
(but excluding treasury stock and capital stock that is subscribed but
unissued) and retained earnings, paid in capital and the balance of the current
profit and loss account not transferred to retained earnings accounts of the
Company and its Subsidiaries appearing on the consolidated balance sheet of the
Company and its Subsidiaries prepared in accordance with generally accepted
accounting principles as of the date of determination, after eliminating all
intercompany transactions and all amounts properly attributed to minority
interests, if any, in the retained earnings, capital stock and paid in capital
of Subsidiaries.
"CURRENT DEBT" shall mean, with respect to any Person, all
Indebtedness of such Person for borrowed money (and any notes payable and
drafts accepted representing extensions of credit whether or not representing
obligations for borrowed money) which by its terms or by the terms of any
instrument or agreement relating thereto matures on demand or within one year
from the date of the creation thereof and is not directly or indirectly
renewable or extendible at the option of the debtor to a date more than one
year from the date of the creation thereof, provided that Indebtedness for
borrowed money outstanding under a revolving credit or similar agreement which
obligates the lender or lenders to extend credit over a period of more than one
year shall constitute Funded Debt and not Current Debt, even though such
Indebtedness by its terms matures on demand or within one year from the date of
the creation thereof.
"DEBT" shall mean Current Debt and Funded Debt.
"DELAYED DELIVERY FEE" shall have the meaning specified in
paragraph 2B(9)(iii).
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"ENVIRONMENTAL RELEASES" shall mean releases (as defined in
the Comprehensive Environmental Response, Compensation and Liability Act or
under any applicable state or local environmental law or regulation) of
Hazardous Materials. Environmental Releases does not include releases for
which no remediation or reporting is required by applicable Environmental
Requirements and which do not present a danger to health, safety or the
environment.
"ENVIRONMENTAL REQUIREMENTS" shall mean any applicable local,
state or federal law, rule, regulation, permit, order, decision, determination
or requirement relating in any way to Hazardous Materials or to health, safety
or the environment.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended.
"ERISA AFFILIATE" shall mean any corporation which is a member
of the same controlled group of corporations as the Company within the meaning
of section 414(b) of the Code, or any trade or business which is under common
control with the Company within the meaning of section 414(c) of the Code.
"EVENT OF DEFAULT" shall mean any of the events specified in
paragraph 7A, provided that there has been satisfied any requirement in
connection with such event for the giving of notice, or the lapse of time, or
the happening of any further condition, event or act, and "DEFAULT" shall mean
any of such events, whether or not any such requirement has been satisfied.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934,
as amended.
"FACILITY" shall have the meaning specified in paragraph 2B(1).
"FACILITY FEE" shall have the meaning specified in paragraph
2B(9)(i).
"FIXED CHARGES" shall mean, for the Company and its
Subsidiaries on a consolidated basis, the sum (without duplication) of:
(i) all Rentals (excluding all principal components of
Rentals under Capitalized Lease Obligations) paid during the most
recently completed four fiscal quarters; and
(ii) all interest expense (as determined in accordance
with generally accepted accounting principles) on all Debt (including
Capitalized Lease Obligations) of the Company and its Subsidiaries for
such period.
"FUNDED DEBT" shall mean with respect to any Person, all
Indebtedness of such Person which by its terms or by the terms of any
instrument or agreement relating thereto matures, or which is otherwise payable
or unpaid, more than one year from, or is directly or indirectly renewable or
extendible at the option of the debtor to a date more than one year
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<PAGE> 38
(including an option of the debtor under a revolving credit or similar
agreement obligating the lender or lenders to extend credit over a period of
more than one year) from, the date of the creation thereof.
"GUARANTEE" shall mean, with respect to any Person, any direct
or indirect liability, contingent or otherwise, of such Person with respect to
any indebtedness, lease, dividend or other obligation of another, including,
without limitation, any such obligation directly or indirectly guaranteed,
endorsed (otherwise than for collection or deposit in the ordinary course of
business) or discounted or sold with recourse by such Person, or in respect of
which such Person is otherwise directly or indirectly liable, including,
without limitation, any such obligation in effect guaranteed by such Person
through any agreement (contingent or otherwise) to purchase, repurchase or
otherwise acquire such obligation or any security therefor, or to provide funds
for the payment or discharge of such obligation (whether in the form of loans,
advances, stock purchases, capital contributions or otherwise), or to maintain
the solvency or any balance sheet or other financial condition of the obligor
of such obligation, or to make payment for any products, materials or supplies
or for any transportation or service, regardless of the non-delivery or
non-furnishing thereof, in any such case if the purpose or intent of such
agreement is to provide assurance that such obligation will be paid or
discharged, or that any agreements relating thereto will be complied with, or
that the holders of such obligation will be protected against loss in respect
thereof. The amount of any Guarantee shall be equal to the outstanding
principal amount of the obligation guaranteed or such lesser amount to which
the maximum exposure of the guarantor shall have been specifically limited.
"HAZARDOUS MATERIAL" shall mean (a) hazardous waste as defined
in the Resource Conservation and Recovery Act of 1986, or any applicable
federal state or local law or regulation, (b) hazardous substances, as defined
in Comprehensive Environmental Response Compensation and Liability Act, or any
applicable state or local law or regulation, (c) gasoline, or any other
petroleum product or by-product, (d) toxic substances, as defined in the Toxic
Substance Control Act of 1976, or any applicable federal, state or local law or
regulation or (e) insecticides, fungicides, or rodenticides, as defined in the
Federal Insecticide, Fungicide, and Rodenticide Act of 1975, or any applicable
federal, state or local law or regulation, as each such Act, statute or
regulation may be amended from time to time.
"HEDGE TREASURY NOTE(S)" shall mean, with respect to any
Accepted Note, the United States Treasury Note or Notes whose duration (as
determined by Prudential) most closely matches the duration of such Accepted
Note.
"HOSTILE TENDER OFFER" shall mean, with respect to the use of
proceeds of any Note, any offer to purchase, or any purchase of, shares of
capital stock of any corporation or equity interests in any other entity, or
securities convertible into or representing the beneficial ownership of, or
rights to acquire, any such shares or equity interests, if such shares, equity
interests, securities or rights are of a class which is publicly traded on any
securities exchange or in any over-the-counter market, other than purchases of
such shares, equity interests, securities or rights representing less than 5%
of the equity interests or beneficial ownership of such corporation or other
entity for portfolio investment purposes, and such offer or purchase has not
been duly approved by the board of directors of such corporation or the
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equivalent governing body of such other entity prior to the date on which the
Company makes the Request for Purchase of such Note.
"INCLUDING" shall mean, unless the context clearly requires
otherwise, "including without limitation".
"INDEBTEDNESS" shall mean, with respect to any Person, without
duplication, (i) all items (excluding items of contingency reserves or of
reserves for deferred income taxes) which in accordance with generally accepted
accounting principles would be included in determining total liabilities as
shown on the liability side of a balance sheet of such Person as of the date on
which Indebtedness is to be determined (including all Capitalized Lease
Obligations), (ii) all indebtedness secured by any Lien on any property or
asset owned or held by such Person subject thereto, whether or not the
indebtedness secured thereby shall have been assumed, and (iii) all
indebtedness of others with respect to which such Person has become liable by
way of Guarantee.
"INVESTMENT" shall mean, when used with respect to any Person,
any direct or indirect advance, loan or other extension of credit (other than
the creation of receivables in the ordinary course of business) or capital
contribution by such Person (by means of transfers of property to others or
payments for property or services for the account or use of others, or
otherwise) to any other Person, or any direct or indirect purchase or other
acquisition by such Person of, or of a beneficial interest in, capital stock,
partnership interest, bonds, notes, debentures or other securities issued by
any other Person.
"ISSUANCE PERIOD" shall have the meaning specified in
paragraph 2B(2).
"LIEN" shall mean any mortgage, pledge, security interest,
encumbrance, lien (statutory or otherwise) or charge of any kind (including any
agreement to give any of the foregoing, any conditional sale or other title
retention agreement, any lease in the nature thereof, and the filing of or
agreement to give any financing statement under the Uniform Commercial Code of
any jurisdiction) or any other type of preferential arrangement for the
purpose, or having the effect, of protecting a creditor against loss or
securing the payment or performance of an obligation.
"MANAGEMENT GROUP" shall mean, collectively, the Company's
Employee Stock Ownership Plan and the officers and directors of the Company.
"MATERIAL SUBSIDIARY" shall mean any Subsidiary of the Company
which has (i) total assets equal to or greater than 10% of consolidated total
assets as of the most recently completed fiscal quarter or (ii) net income
equal to or greater than 10% of Consolidated Net Income for the four fiscal
quarters most recently completed; provided, however, that notwithstanding the
foregoing, if the Company and the Material Subsidiaries, as defined above, have
less than 90% of consolidated total assets (calculated as described above) or
have net income of less than 90% of Consolidated Net Income (as calculated
above), then the term "Material Subsidiary" shall mean each Subsidiary of the
Company, as specified by the Company, that together with the Company and each
other specified Subsidiary have assets
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equal to not less than 90% of consolidated total assets (calculated as
described above) and net income of not less than 90% of Consolidated Net Income
(calculated as described above).
"MULTIEMPLOYER PLAN" shall mean any Plan which is a
"multiemployer plan" (as such term is defined in section 4001(a)(3) of ERISA).
"NOTES" shall have the meaning specified in paragraph 1B.
"OFFICER'S CERTIFICATE" shall mean a certificate signed in the
name of the Company by an Authorized Officer of the Company.
"PERSON" shall mean and include an individual, a partnership,
a joint venture, a corporation, a trust, an unincorporated organization and a
government or any department or agency thereof.
"PLAN" shall mean any employee pension benefit plan (as such
term is defined in section 3 of ERISA) which is or has been established or
maintained, or to which contributions are or have been made, by the Company or
any ERISA Affiliate.
"PREFERRED STOCK" shall mean, in respect of any corporation,
shares of the capital stock of such corporation that are entitled to a
preference on priority over any other shares of the capital stock of such
corporation in respect of the payment of dividends or distribution of assets
upon liquidation.
"PRIORITY DEBT" shall mean, at any time, the sum (without
duplication) of (i) all Debt of Subsidiaries, plus (ii) all Debt of the
Company secured by Liens plus (iii) all Preferred Stock of any Subsidiary owned
by any Person other than the Company or a wholly-owned Subsidiary.
"PROPERTIES" shall mean all real property owned, leased or
otherwise used or occupied by the Company or any Subsidiary, wherever located.
"PRUDENTIAL" shall mean The Prudential Insurance Company of
America.
"PRUDENTIAL AFFILIATE" shall mean any corporation or other
entity all of the Voting Stock (or equivalent voting securities or interests)
of which is owned by Prudential either directly or through Prudential
Affiliates.
"PURCHASERS" shall mean Prudential and with respect to the
Series A Notes and, with respect to any Accepted Notes, Prudential and/or the
Prudential Affiliate(s), which are purchasing such Accepted Notes.
"REQUEST FOR PURCHASE" shall have the meaning specified in
paragraph 2B(4).
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"REQUIRED HOLDER(S)" shall mean the holder or holders of at
least 66 2/3% of the aggregate principal amount of the Notes or of a Series of
Notes, as the context may require, from time to time outstanding.
"RESCHEDULED CLOSING DAY" shall have the meaning specified in
paragraph 2B(8).
"RESPONSIBLE OFFICER" shall mean the chief executive officer,
chief operating officer, chief financial officer or chief accounting officer of
the Company, general counsel of the Company or any other officer of the Company
involved principally in its financial administration or its controllership
function.
"SECURITIES ACT" shall mean the Securities Act of 1933, as
amended.
"SERIES" shall have the meaning specified in paragraph 1B.
"SERIES A CLOSING DAY" shall have the meaning specified in
paragraph 2A.
"SERIES A NOTE(S)" shall have the meaning specified in
paragraph 1A.
"SIGNIFICANT HOLDER" shall mean (i) during the Issuance
Period, Prudential, and (ii) any other holder of at least 5% of the aggregate
principal amount of the Notes of any Series from time to time outstanding.
"SUBSIDIARY" shall mean any corporation organized under the
laws of any state of the United States of America, the Commonwealth of Puerto
Rico, Canada, or any province of Canada, which conducts the major portion of
its business in and makes the major portion of its sales to Persons located in
the United States of America, the Commonwealth of Puerto Rico, or Canada, and
all of the stock of every class of which, except directors' qualifying shares,
shall, at the time as of which any determination is being made, be owned by the
Company either directly or through Subsidiaries, and notwithstanding the
foregoing shall include Crown Crafts International, Inc. and Hans Benjamin
Furniture, Inc.
"SUBSTANTIAL STOCKHOLDER" shall mean (i) any Person owning,
directly or indirectly, either individually or together with all other Persons
to whom such Person is related by blood, adoption or marriage, stock of the
Company (of any class having ordinary voting power for the election of
directors) aggregating 5% or more of such voting power, or (ii) any Person
related by blood, adoption or marriage to any Person described or coming within
the provisions of clause (i) of this definition.
"TOTAL CAPITALIZATION" shall mean, at any time, the sum of (i)
Consolidated Net Worth plus (ii) Consolidated Debt at such time.
"THIRD PARTY" shall mean all lessees, sublessees, and other
users of the Property, excluding those users of the Property in the ordinary
course of the Company's business (consistent with its practices on the date of
this Agreement) and on a temporary basis.
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"TRANSFEREE" shall mean any direct or indirect transferee of
all or any part of any Note purchased by any Purchaser under this Agreement.
"VOTING STOCK" shall mean, with respect to any corporation,
any shares of stock of such corporation whose holders are entitled under
ordinary circumstances to vote for the election of directors of such
corporation (irrespective of whether at the time stock of any other class or
classes shall have or might have voting power by reason of the happening of any
contingency).
10C. ACCOUNTING PRINCIPLES, TERMS AND DETERMINATIONS.
All references in this Agreement to "GENERALLY ACCEPTED ACCOUNTING PRINCIPLES"
shall be deemed to refer to generally accepted accounting principles in effect
in the United States at the time of application thereof. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
determinations with respect to accounting matters hereunder shall be made, and
all unaudited financial statements and certificates and reports as to financial
matters required to be furnished hereunder shall be prepared, in accordance
with generally accepted accounting principles, applied on a basis consistent
with the most recent audited consolidated financial statements of the Company
and its Subsidiaries delivered pursuant to clause (ii) of paragraph 5A or, if
no such statements have been so delivered, the most recent audited financial
statements referred to in clause (i) of paragraph 8B, subject in the case of,
interim statements to normal year end adjustments and to the absence of
footnotes.
11. MISCELLANEOUS.
11A. NOTE PAYMENTS. The Company agrees that, so long as
any Purchaser shall hold any Note, it will make payments of principal of,
interest on, and any Yield-Maintenance Amount payable with respect to, such
Note, which comply with the terms of this Agreement, by wire transfer of
immediately available funds for credit (not later than 12:00 noon, New York
City local time, on the date due) to (i) the account or accounts of such
Purchaser specified in the Purchaser Schedule attached hereto in the case of
any Series A Notes, (ii) the account or accounts of such Purchaser specified in
the Confirmation of Acceptance with respect to such Note in the case of any
Shelf Note or (iii) such other account or accounts in the United States as such
Purchaser may from time to time designate in writing, notwithstanding any
contrary provision herein or in any Note with respect to the place of payment.
Each Purchaser agrees that, before disposing of any Note, it will make a
notation thereon (or on a schedule attached thereto) of all principal payments
previously made thereon and of the date to which interest thereon has been
paid. The Company agrees to afford the benefits of this paragraph 11A to any
Transferee which shall have made the same agreement as the Purchasers have made
in this paragraph 11A.
11B. EXPENSES. The Company agrees, whether or not the
transactions contemplated hereby shall be consummated, to pay, and save
Prudential, each Purchaser and any Transferee harmless against liability for
the payment of, all out-of-pocket expenses arising in connection with such
transactions, including (i) all document production and duplication charges and
the fees and expenses of any special counsel engaged by the Purchasers or any
Transferee in connection with this Agreement, the transactions contemplated
hereby and any
37
<PAGE> 43
subsequent proposed modification of, or proposed consent under, this Agreement,
whether or not such proposed modification shall be effected or proposed consent
granted, and (ii) the costs and expenses, including attorneys' fees, incurred
by any Purchaser or any Transferee in enforcing (or determining whether or how
to enforce) any rights under this Agreement or the Notes or in responding to
any subpoena or other legal process or informal investigative demand issued in
connection with this Agreement or the transactions contemplated hereby or by
reason of any Purchaser's or any Transferee's having acquired any Note,
including without limitation costs and expenses incurred in any bankruptcy
case. The obligations of the Company under this paragraph 11B shall survive
the transfer of any Note or portion thereof or interest therein by any
Purchaser or any Transferee and the payment of any Note.
11C. CONSENT TO AMENDMENTS. This Agreement may be
amended, and the Company may take any action herein prohibited, or omit to
perform any act herein required to be performed by it, if the Company shall
obtain the written consent to such amendment, action or omission to act, of the
Required Holder(s) of the Notes of each Series except that, (i) with the
written consent of the holders of all Notes of a particular Series, and if an
Event of Default shall have occurred and be continuing, of the holders of all
Notes of all Series, at the time outstanding (and not without such written
consents), the Notes of such Series may be amended or the provisions thereof
waived to change the maturity thereof, to change or affect the principal
thereof, or to change or affect the rate or time of payment of interest on or
any Yield-Maintenance Amount payable with respect to the Notes of such Series,
(ii) without the written consent of the holder or holders of all Notes at the
time outstanding, no amendment to or waiver of the provisions of this Agreement
shall change or affect the provisions of paragraph 7A or this paragraph 11C
insofar as such provisions relate to proportions of the principal amount of the
Notes of any Series, or the rights of any individual holder of Notes, required
with respect to any declaration of Notes to be due and payable or with respect
to any consent, amendment, waiver or declaration, (iii) with the written
consent of Prudential (and not without the written consent of Prudential) the
provisions of paragraph 2B may be amended or waived (except insofar as any such
amendment or waiver would affect any rights or obligations with respect to the
purchase and sale of Notes which shall have become Accepted Notes prior to such
amendment or waiver), and (iv) with the written consent of all of the
Purchasers which shall have become obligated to purchase Accepted Notes of any
Series (and not without the written consent of all such Purchasers), any of the
provisions of paragraphs 2B and 3 may be amended or waived insofar as such
amendment or waiver would affect only rights or obligations with respect to the
purchase and sale of the Accepted Notes of such Series or the terms and
provisions of such Accepted Notes. Each holder of any Note at the time or
thereafter outstanding shall be bound by any consent authorized by this
paragraph 11C, whether or not such Note shall have been marked to indicate such
consent, but any Notes issued thereafter may bear a notation referring to any
such consent. No course of dealing between the Company and the holder of any
Note nor any delay in exercising any rights hereunder or under any Note shall
operate as a waiver of any rights of any holder of such Note. As used herein
and in the Notes, the term "THIS AGREEMENT" and references thereto shall mean
this Agreement as it may from time to time be amended or supplemented.
11D. FORM, REGISTRATION, TRANSFER AND EXCHANGE OF NOTES;
LOST NOTES. The Notes are issuable as registered notes without coupons in
denominations of at least $1,000,000, except as may be necessary to reflect any
principal amount not evenly divisible
38
<PAGE> 44
by $1,000,000. The Company shall keep at its principal office a register in
which the Company shall provide for the registration of Notes and of transfers
of Notes. Upon surrender for registration of transfer of any Note at the
principal office of the Company, the Company shall, at its expense, execute and
deliver one or more new Notes of like tenor and of a like aggregate principal
amount, registered in the name of such transferee or transferees. At the
option of the holder of any Note, such Note may be exchanged for other Notes of
like tenor and of any authorized denominations, of a like aggregate principal
amount, upon surrender of the Note to be exchanged at the principal office of
the Company. Whenever any Notes are so surrendered for exchange, the Company
shall, at its expense, execute and deliver the Notes which the holder making
the exchange is entitled to receive. Each installment of principal payable on
each installment date upon each new Note issued upon any such transfer or
exchange shall be in the same proportion to the unpaid principal amount of such
new Note as the installment of principal payable on such date on the Note
surrendered for registration of transfer or exchange bore to the unpaid
principal amount of such Note. No reference need be made in any such new Note
to any installment or installments of principal previously due and paid upon
the Note surrendered for registration of transfer or exchange. Every Note
surrendered for registration of transfer or exchange shall be duly endorsed, or
be accompanied by a written instrument of transfer duly executed, by the holder
of such Note or such holder's attorney duly authorized in writing. Any Note or
Notes issued in exchange for any Note or upon transfer thereof shall carry the
rights to unpaid interest and interest to accrue which were carried by the Note
so exchanged or transferred, so that neither gain nor loss of interest shall
result from any such transfer or exchange. Upon receipt of written notice from
the holder of any Note of the loss, theft, destruction or mutilation of such
Note and, in the case of any such loss, theft or destruction, upon receipt of
such holder's unsecured indemnity agreement, or in the case of any such
mutilation upon surrender and cancellation of such Note, the Company will make
and deliver a new Note, of like tenor, in lieu of the lost, stolen, destroyed
or mutilated Note.
11E. PERSONS DEEMED OWNERS; PARTICIPATIONS. Prior to
due presentment for registration of transfer, the Company may treat the Person
in whose name any Note is registered as the owner and holder of such Note for
the purpose of receiving payment of principal of and interest on, and any
Yield-Maintenance Amount payable with respect to, such Note and for all other
purposes whatsoever, whether or not such Note shall be overdue, and the Company
shall not be affected by notice to the contrary. Subject to the preceding
sentence, the holder of any Note may from time to time grant participations in
all or any part of such Note to any Person on such terms and conditions as may
be determined by such holder in its sole and absolute discretion.
11F. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE
AGREEMENT. All representations and warranties contained herein or made in
writing by or on behalf of the Company in connection herewith shall survive the
execution and delivery of this Agreement and the Notes, the transfer by any
Purchaser of any Note or portion thereof or interest therein and the payment of
any Note, and may be relied upon by any Transferee, regardless of any
investigation made at any time by or on behalf of any Purchaser or any
Transferee. Subject to the preceding sentence, this Agreement and the Notes
embody the entire agreement and understanding between the parties hereto with
respect to the subject matter hereof and supersede all prior agreements and
understandings relating to such subject matter.
39
<PAGE> 45
11G. SUCCESSORS AND ASSIGNS. All covenants and other
agreements in this Agreement contained by or on behalf of any of the parties
hereto shall bind and inure to the benefit of the respective successors and
assigns of the parties hereto (including, without limitation, any Transferee)
whether so expressed or not.
11H. INDEPENDENCE OF COVENANTS. All covenants
hereunder shall be given independent effect so that if a particular action or
condition is prohibited by any one of such covenants, the fact that it would be
permitted by an exception to, or otherwise be in compliance within the
limitations of, another covenant shall not avoid the occurrence of a Default or
Event of Default if such action is taken or such condition exists.
11I. NOTICES. All written communications provided for
hereunder (other than communications provided for under paragraph 2) shall be
sent by first class mail or nationwide overnight delivery service (with charges
prepaid) and (i) if to any Purchaser, addressed as specified for such
communications in the Purchaser Schedule attached hereto (in the case of the
Series A Notes) or the Purchaser Schedule attached to the applicable
Confirmation of Acceptance (in the case of any Shelf Notes) or at such other
address as any such Purchaser shall have specified to the Company in writing,
(ii) if to any other holder of any Note, addressed to it at such address as it
shall have specified in writing to the Company or, if any such holder shall not
have so specified an address, then addressed to such holder in care of the last
holder of such Note which shall have so specified an address to the Company and
(iii) if to the Company, addressed to it at 1600 Riveredge Parkway, Suite 200,
Atlanta, Georgia 30328, provided, however, that any such communication to the
Company may also, at the option of the Person sending such communication, be
delivered by any other means either to the Company at its address specified
above or to any Authorized Officer of the Company. Any communication pursuant
to paragraph 2 shall be made by the method specified for such communication in
paragraph 2, and shall be effective to create any rights or obligations under
this Agreement only if, in the case of a telephone communication, an Authorized
Officer of the party conveying the information and of the party receiving the
information are parties to the telephone call, and in the case of a telecopier
communication, the communication is signed by an Authorized Officer of the
party conveying the information, addressed to the attention of an Authorized
Officer of the party receiving the information, and in fact received at the
telecopier terminal the number of which is listed for the party receiving the
communication in the Information Schedule or at such other telecopier terminal
as the party receiving the information shall have specified in writing to the
party sending such information.
11J. PAYMENTS DUE ON NON-BUSINESS DAYS. Anything in
this Agreement or the Notes to the contrary notwithstanding, any payment of
principal of or interest on, or Yield-Maintenance Amount payable with respect
to, any Note that is due on a date other than a Business Day shall be made on
the next succeeding Business Day. If the date for any payment is extended to
the next succeeding Business Day by reason of the preceding sentence, the
period of such extension shall be included in the computation of the interest
payable on such Business Day.
40
<PAGE> 46
11K. DESCRIPTIVE HEADINGS. The descriptive headings of
the several paragraphs of this Agreement are inserted for convenience only and
do not constitute a part of this Agreement.
11L. SATISFACTION REQUIREMENT. If any agreement,
certificate or other writing, or any action taken or to be taken, is by the
terms of this Agreement required to be satisfactory to any Purchaser, to any
holder of Notes or to the Required Holder(s), the determination of such
satisfaction shall be made by such Purchaser, such holder or the Required
Holder(s), as the case may be, in the sole and exclusive judgment (exercised in
good faith) of the Person or Persons making such determination.
11M. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED
AND ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE
GOVERNED BY, THE INTERNAL LAW OF THE STATE OF NEW YORK.
11N. SEVERALTY OF OBLIGATIONS. The sales of Notes to
the Purchasers are to be several sales, and the obligations of Prudential and
the Purchasers under this Agreement are several obligations. No failure by
Prudential or any Purchaser to perform its obligations under this Agreement
shall relieve any other Purchaser or the Company of any of its obligations
hereunder, and neither Prudential nor any Purchaser shall be responsible for
the obligations of, or any action taken or omitted by, any other such Person
hereunder.
11O. COUNTERPARTS. This Agreement may be executed in
any number of counterparts, each of which shall be an original, but all of
which together shall constitute one instrument.
41
<PAGE> 47
11P. BINDING AGREEMENT. When this Agreement is executed
and delivered by the Company, and Prudential, it shall become a binding
agreement between the Company, and Prudential. This Agreement shall also inure
to the benefit of each Purchaser which shall have executed and delivered a
Confirmation of Acceptance, and each such Purchaser shall be bound by this
Agreement to the extent provided in such Confirmation of Acceptance.
Very truly yours,
CROWN CRAFTS, INC.
(CORPORATE SEAL) By: /s/ Robert E. Schnelle
----------------------
Robert E. Schnelle
Treasurer
The foregoing Agreement is
hereby accepted as of the
date first above written.
THE PRUDENTIAL INSURANCE COMPANY
OF AMERICA
By: /s/ Thomas Cecka
------------------------
Vice President
42
<PAGE> 48
PURCHASER SCHEDULE
<TABLE>
<CAPTION>
Aggregate
Principal
Amount of
Notes to be Note Denom-
Purchased ination(s)
----------- -----------
<S> <C> <C>
THE PRUDENTIAL INSURANCE COMPANY
OF AMERICA $25,000,000 $22,000,000
$3,000,000
</TABLE>
(1) All payments on account of Notes held by such
purchaser shall be made by wire transfer of
immediately available funds for credit to:
Account No. 050-54-526 in the case of the promissory
note in the original principal amount of $22,000,000 and
Account No. 000-01-159 in the case of the promissory
note in the original principal amount of $3,000,000
Morgan Guaranty Trust Company of New York
23 Wall Street
New York, New York 10015
(ABA No.: 021-000-238)
Each such wire transfer shall set forth the name
of the Company, a reference to "7.27% Senior Notes
due 2005, Security No. !Inv. 5202! in the case of
the promissory note in the original principal amount
of $22,000,000 and Security No. !Inv. 5203! in the
case of the promissory note in the original principal amount
of $3,000,000, and the due date and application (as among
principal, interest and Yield-Maintenance Amount) of the
payment being made.
(2) Address for all notices relating to payments:
The Prudential Insurance Company of America
c/o Prudential Capital Group
Four Gateway Center
100 Mulberry Street
Newark, New Jersey 07102-4077
Attention: Investment Structure and Pricing
<PAGE> 49
(3) Address for all other communications and notices:
The Prudential Insurance Company of America
c/o Prudential Capital Group
1230 Peachtree Street, N.E.
Suite 2525
Atlanta, Georgia 30309
Attention: Managing Director
(4) Recipient of telephone prepayment notices:
Manager, Investment Structure and Pricing
(201) 802-6429
(5) Tax Identification No.: 22-1211670
<PAGE> 50
INFORMATION SCHEDULE
AUTHORIZED OFFICERS FOR PRUDENTIAL
Catherine A. Cates
Robert R. Derrick
Walter E. DuPre
Prudential Capital Group
1230 Peachtree Street, N.E.
Suite 2525
Atlanta, Georgia 30309
Telephone: (404) 881-4400
Facsimile: (404) 881-4407
Thomas Cecka
Prudential Capital Group
Four Gateway Center
100 Mulberry Street
Newark, New Jersey 07102
Telephone: (201) 802-8286
Facsimile: (201) 802-6432
AUTHORIZED OFFICERS FOR THE COMPANY
Michael H. Bernstein
President and Chief Executive Officer
Paul A. Criscillis, Jr.
Vice President, Chief Financial Officer
Roger D. Chittum
Vice President, Law and Administration, Secretary
Robert E. Schnelle
Treasurer
Crown Crafts, Inc.
1600 Riveredge Parkway
Suite 200
Atlanta, Georgia 30328
Telephone: (770) 644-6400
Facsimile: (770) 644-6233
<PAGE> 51
EXHIBIT A-1
FORM OF SERIES A NOTE
CROWN CRAFTS, INC.
7.27% SENIOR SERIES A NOTE DUE 2005
No. _____ [Date]
$________
FOR VALUE RECEIVED, the undersigned, CROWN CRAFTS, INC. (herein called
the "Company"), a corporation organized and existing under the laws of the
State of Georgia, hereby promises to pay to _________________________________,
or registered assigns, the principal sum of ____________________ DOLLARS on
October 12, 2005 with interest (computed on the basis of a 360-day
year--30-day month) (a) on the unpaid balance thereof at the rate of 7.27%%
per annum from the date hereof, payable quarterly on the 12th day of January,
April, July and October in each year, commencing with the January, April, July
or October next succeeding the date hereof, until the principal hereof shall
have become due and payable, and (b) on any overdue payment (including any
overdue prepayment) of principal, any overdue payment of Yield Maintenance
Amount and any overdue payment of interest, payable quarterly as aforesaid
(or, at the option of the registered holder hereof, on demand), at a rate per
annum from time to time equal to the greater of (i) 9.27% or (ii) 2% over the
rate of interest publicly announced by Morgan Guaranty Trust Company of New
York from time to time in New York City as its Prime Rate.
Payments of principal, Yield Maintenance Amount, if any, and interest
are to be made at the main office of Morgan Guaranty Trust Company of New York
in New York City or at such other place as the holder hereof shall designate to
the Company in writing, in lawful money of the United States of America.
This Note is one of a series of Senior Notes (herein called the
"Notes") issued pursuant to a Note Purchase and Private Shelf Agreement, dated
as of October 12, 1995 (herein called the "Agreement"), between the Company, on
the one hand, and The Prudential Insurance Company of America and each
Prudential Affiliate which becomes party thereto, on the other hand, and is
entitled to the benefits thereof. As provided in the Agreement, this Note is
subject to prepayment, in whole or from time to time in part, in certain cases
without Yield Maintenance Amount and in other cases with the Yield Maintenance
Amount specified in the Agreement.
A-1
<PAGE> 52
This Note is a registered Note and, as provided in the Agreement, upon
surrender of this Note for registration of transfer, duly endorsed, or
accompanied by a written instrument of transfer duly executed, by the
registered holder hereof or such holder's attorney duly authorized in writing,
a new Note for the then outstanding principal amount will be issued to, and
registered in the name of, the transferee. Prior to due presentment for
registration of transfer, the Company may treat the person in whose name this
Note is registered as the owner hereof for the purpose of receiving payment and
for all other purposes, and the Company shall not be affected by any notice to
the contrary.
The Company agrees to make prepayments of principal of this Note on
the dates and in the amounts specified in the Agreement.
In case an Event of Default shall occur and be continuing, the
principal of this Note may be declared or otherwise become due and payable in
the manner and with the effect provided in the Agreement.
Capitalized terms used and not otherwise defined herein shall have the
meanings (if any) provided in the Agreement.
THIS NOTE IS INTENDED TO BE PERFORMED IN THE STATE OF NEW YORK AND
SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAW OF SUCH
STATE.
CROWN CRAFTS, INC.
By:
--------------------------
Title:
A-2
<PAGE> 53
EXHIBIT A-2
FORM OF SHELF NOTE
CROWN CRAFTS, INC.
No. _________
ORIGINAL PRINCIPAL AMOUNT:
ORIGINAL ISSUE DATE:
INTEREST RATE:
INTEREST PAYMENT DATES:
FINAL MATURITY DATE:
PRINCIPAL PREPAYMENT DATES AND AMOUNTS:
FOR VALUE RECEIVED, the undersigned, CROWN CRAFTS, INC. (herein called
the "Company"), a corporation organized and existing under the laws of the
State of Georgia hereby promises to pay to _______________________, or
registered assigns, the principal sum of _______________________ DOLLARS [on
the Final Maturity Date specified above] [, payable on the Principal Prepayment
Dates and in the amounts specified above, and on the Final Maturity Date
specified above in an amount equal to the unpaid balance of the principal
hereof,] with interest (computed on the basis of a 360-day year -- 30-day
month) (a) on the unpaid balance thereof at the Interest Rate per annum
specified above, payable on each Interest Payment Date specified above and on
the Final Maturity Date specified above, commencing with the Interest Payment
Date next succeeding the date hereof, until the principal hereof shall have
become due and payable, and (b) on any overdue payment (including any overdue
prepayment) of principal, any overdue payment of Yield Maintenance Amount and
any overdue payment of interest, payable on each Payment Date as aforesaid (or,
at the option of the registered holder hereof, on demand), at a rate per annum
from time to time equal to the greater of (i) 2% over the Interest Rate
specified above or (ii) 2% over the rate of interest publicly announced by
Morgan Guaranty Trust Company of New York from time to time in New York City as
its Prime Rate.
Payments of principal, Yield Maintenance Amount, if any, and interest
are to be made at the main office of Morgan Guaranty Trust Company of New York
in New York City or at such other place as the holder hereof shall designate to
the Company in writing, in lawful money of the United States of America.
A-2-1
<PAGE> 54
This Note is one of a series of Senior Notes (herein called the
"Notes") issued pursuant to a Private Shelf Agreement, dated as of October 12,
1995 (herein called the "Agreement"), between the Company and The Prudential
Insurance Company of America and each Prudential Affiliate (as defined in the
Agreement) which becomes party thereto, on the other hand, and is entitled to
the benefits thereof.
This Note is subject to optional prepayment, in whole or from time to
time in part, on the terms specified in the Agreement.
This Note is a registered Note and, as provided in the Agreement, upon
surrender of this Note for registration of transfer, duly endorsed, or
accompanied by a written instrument of transfer duly executed, by the
registered holder hereof or such holder's attorney duly authorized in writing,
a new Note for the then outstanding principal amount will be issued to, and
registered in the name of, the transferee. Prior to due presentment for
registration of transfer, the Company may treat the person in whose name this
Note is registered as the owner thereof for the purpose of receiving payment
and for all other purposes, and the Company shall not be affected by any notice
to the contrary.
In case an Event of Default shall occur and be continuing, the
principal of this Note may be declared or otherwise become due and payable in
the manner and with the effect provided in the Agreement.
Capitalized terms used and not otherwise defined herein shall have the
meanings (if any) provided in the Agreement.
THIS NOTE IS INTENDED TO BE PERFORMED IN THE STATE OF NEW YORK AND
SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAW OF SUCH
STATE.
CROWN CRAFTS, INC.
By
------------------------------------
Title:
A-2-2
<PAGE> 55
EXHIBIT B
FORM OF REQUEST FOR PURCHASE
CROWN CRAFTS, INC.
Reference is made to the Note Purchase and Private Shelf Agreement
(the "Agreement"), dated as of October 12, 1995 between Crown Crafts, Inc. (the
"Company"), The Prudential Insurance Company of America ("Prudential") and each
Prudential Affiliate which becomes party thereto, on the other hand.
Capitalized terms used and not otherwise defined herein shall have the
respective meanings specified in the Agreement.
Pursuant to Paragraph 2B (4) of the Agreement, the Company hereby
makes the following Request for Purchase.
1. Aggregate principal amount of the Notes covered
hereby (the "Notes")...........................$_______________
2. Individual specifications of the Notes:
<TABLE>
<S> <C> <C> <C>
Principal
Final Prepayment Interest
Principal Maturity Dates and Payment
Amount(1) Date Amounts Period(2)
--------- -------- ---------- ---------
</TABLE>
(1) Minimum principal amount of $5,000,000.
(2) Specify quarterly or semi-annually.
1
<PAGE> 56
3. Use of proceeds of the Notes:
4. Proposed day for the closing of the purchase and sale of the
Notes:
5. The purchase price of the Notes is to be transferred to:
<TABLE>
<S> <C>
Name, Address
and ABA Routing Number of
Number of Bank Account
--------------- ---------
</TABLE>
6. The Company certifies (a) that the representations and
warranties contained in paragraph 8 of the Agreement are true
on and as of the date of this Request for Purchase except to
the extent of changes caused by the transactions contemplated
in the Agreement and, (b) that there exists on the date of
this Request for Purchase no Event of Default or Default.
7. The Issuance Fee to be paid pursuant to the Agreement will be
paid by the Company on the closing date.
CROWN CRAFTS, INC.
By
-----------------------------
Title:
Dated:
2
<PAGE> 57
EXHIBIT C
FORM OF CONFIRMATION OF ACCEPTANCE
CROWN CRAFTS, INC.
Reference is made to the Note Purchase and Private Shelf Agreement
(the "Agreement"), dated as of October 12, 1995, between Crown Crafts, Inc.
(the "Company"), The Prudential Insurance Company of America and each
Prudential Affiliate which becomes a party thereto, on the other hand. All
terms used herein that are defined in the Agreement have the respective
meanings specified in the Agreement.
Pursuant to paragraph 2B(6) of the Agreement, an Acceptance with
respect to the following Accepted Notes is hereby confirmed:
I. Aggregate principal amount $_________
(A) (a) Name of Purchaser:
(b) Principal Amount:
(c) Final maturity date:
(d) Principal installment dates and amounts:
(e) Interest rate:
(f) Interest payment period:
(B) (a) Name of Purchaser:
(b) Principal Amount:
(c) Final maturity date:
(d) Principal installment dates and amounts:
(e) Interest rate:
(f) Interest payment period:
[(C), (D).....: same information as to any other Purchaser]
II. Closing Day: _____________________
<PAGE> 58
Dated: CROWN CRAFTS, INC.
By:
---------------------------------
Title:
THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA
By:
-----------------------------
Vice President
[Signature block for each named purchaser other than
Prudential]
<PAGE> 59
EXHIBIT D-1
[FORM OF OPINION OF COMPANY'S COUNSEL]
[Letterhead of ________________]
[Date of Closing]
The Prudential Insurance Company of America
c/o Prudential Capital Group
Four Gateway Center
100 Mulberry Street
Newark, New Jersey 07102
Ladies and Gentlemen:
As ___________________ of CROWN CRAFTS, INC. (the "Company") I am
familiar with the Note Purchase and Private Shelf Agreement, dated as of
October 12, 1995 (the "Agreement") between the Company, on the one hand, and
The Prudential Insurance Company of America and each Prudential Affiliate which
becomes a party thereto, on the other hand, pursuant to which the Company has
issued to you today its Senior Series A Notes in the aggregate principal amount
of $25,000,000 (the "Notes"). Capitalized terms used and not otherwise defined
herein shall have the meanings provided in the Agreement. This letter is being
delivered to you in satisfaction of the condition set forth in paragraph 3A(v)
of the Agreement and with the understanding you are purchasing the Notes in
reliance on the opinions expressed herein.
In this connection, I have examined such certificates of public
officials, certificates of officers of the Company and copies certified to my
satisfaction of corporate documents and records of the Company and of other
papers, and have made such other investigations, as I have deemed relevant and
necessary as a basis for my opinion hereinafter set forth. I have relied upon
such certificates of public officials and of officers of the Company with
respect to the accuracy of material factual matters contained therein which
were not independently established. With respect to the opinion expressed in
paragraph 3 below, I have also relied upon the representation made by you in
paragraph 9(ii) of the Agreement.
Based on the foregoing, it is my opinion that:
<PAGE> 60
1. The Company is a corporation duly organized and validly existing
in good standing under the laws of the State of Georgia. Each Subsidiary is a
corporation duly organized and validly existing in good standing under the laws
of its jurisdiction of incorporation. The Company and its Subsidiaries have
the corporate power to carry on their respective businesses as now being
conducted.
2. The Agreement and the Notes have been duly authorized by all
requisite corporate action and duly executed and delivered by authorized
officers of the Company, and are valid obligations of the Company, legally
binding upon and enforceable against the Company in accordance with their
respective terms, except as such enforceability may be limited by (a)
bankruptcy, insolvency, reorganization or other similar laws affecting the
enforcement of creditors' rights generally and (b) general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
3. It is not necessary in connection with the offering, issuance,
sale and delivery of the Notes under the circumstances contemplated by the
Agreement to register the Notes under the Securities Act or to qualify an
indenture in respect of the Notes under the Trust Indenture Act of 1939, as
amended.
4. The extension, arranging and obtaining of the credit represented
by the Notes do not result in any violation of regulation G, T or X of the
Board of Governors of the Federal Reserve System.
5. The execution and delivery of the Agreement and the Notes, the
offering, issuance and sale of the Notes and fulfillment of and compliance with
the respective provisions of the Agreement and the Notes do not conflict with,
or result in a breach of the terms, conditions or provisions of, or constitute
a default under, or result in any violation of, or result in the creation of
any Lien upon any of the properties or assets of the Company or any of its
Subsidiaries pursuant to, or require any authorization, consent, approval,
exemption, or other action by or notice to or filing with any court,
administrative or governmental body or other Person (other than routine filings
after the date hereof with the Securities and Exchange Commission and/or state
Blue Sky authorities) pursuant to, the charter or by-laws of the Company or any
of its Subsidiaries, any applicable law (including any securities or Blue Sky
law), statute, rule or regulation or (insofar as is known to us after having
made due inquiry with respect thereto) any agreement (including, without
limitation, any agreement listed in Schedule 8G to the Agreement), instrument,
order, judgment or decree to which the Company or any of its Subsidiaries is a
party or otherwise subject.
6. A Georgia state court or a federal court sitting in the State
of Georgia would give effect to the choice of New York law contained in the
Agreement.
Very truly yours,
<PAGE> 61
EXHIBIT D-2
[FORM OF OPINION OF COMPANY'S COUNSEL]
[Letterhead of _______________]
[Date of Closing]
[Name(s) and address(es) of
purchaser(s)]
Ladies and Gentlemen:
As _______________ of Crown Crafts, Inc. (the "Company") I am familiar
with the Note Purchase and Private Shelf Agreement, dated as of October 12,
1995 (the "Agreement") between the Company, on the one hand, and The Prudential
Insurance Company of America and each Prudential Affiliate which becomes a
party thereto, on the other hand, pursuant to which the Company has issued to
you today Senior Series ___ Notes of the Company in the aggregate principal
amount of $__ __________ (the "Notes"). Capitalized terms used and not
otherwise defined herein shall have the meanings provided in the Agreement.
This letter is being delivered to you in satisfaction of the condition set
forth in paragraph 3A(v) of the Agreement and with the understanding that you
are purchasing the Notes in reliance on the opinions expressed herein.
In this connection, I have examined such certificates of public
officials, certificates of officers of the Company and copies certified to my
satisfaction of corporate documents and records of the Company and of other
papers, and have made such other investigations, as I have deemed relevant and
necessary as a basis for my opinion hereinafter set forth. I have relied upon
such certificates of public officials and of officers of the Company with
respect to the accuracy of material factual matters contained therein which
were not independently established. With respect to the opinion expressed in
paragraph 3 below, I have also relied upon the representation made by each of
you in paragraph 9A of the Agreement.
Based on the foregoing, it is my opinion that:
<PAGE> 62
1. The Company is a corporation duly organized and validly existing
in good standing under the laws of the State of Georgia. Each Subsidiary is a
corporation duly organized and validly existing in good standing under the laws
of its jurisdiction of incorporation. The Company and its Subsidiaries have
the corporate power to carry on their respective businesses as now being
conducted.
2. The Agreement and the Notes have been duly authorized by all
requisite corporate action and duly executed and delivered by authorized
officers of the Company, and are valid obligations of the Company, legally
binding upon and enforceable against the Company in accordance with their
respective terms, except as such enforceability may be limited by (a)
bankruptcy, insolvency, reorganization or other similar laws affecting the
enforcement of creditors' rights generally and (b) general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
3. It is not necessary in connection with the offering, issuance,
sale and delivery of the Notes under the circumstances contemplated by the
Agreement to register the Notes under the Securities Act or to qualify an
indenture in respect of the Notes under the Trust Indenture Act of 1939, as
amended.
4. The extension, arranging and obtaining of the credit represented
by the Notes do not result in any violation of regulation G, T or X of the
Board of Governors of the Federal Reserve System.
5. The execution and delivery of the Agreement and the Notes, the
offering, issuance and sale of the Notes and fulfillment of and compliance with
the respective provisions of the Agreement and the Notes do not conflict with,
or result in a breach of the terms, conditions or provisions of, or constitute
a default under, or result in any violation of, or result in the creation of
any Lien upon any of the properties or assets of the Company or any of its
Subsidiaries pursuant to, or require any authorization, consent, approval,
exemption, or other action by or notice to or filing with any court,
administrative or governmental body or other Person (other than routine filings
after the date hereof with the Securities and Exchange Commission and/or state
Blue Sky authorities) pursuant to, the charter or by-laws of the Company or
any of its Subsidiaries, any applicable law (including any securities or Blue
Sky law), statute, rule or regulation or (insofar as is known to us after
having made due inquiry with respect thereto) any agreement (including, without
limitation, any agreement listed in Schedule 8G to the Agreement), instrument,
order, judgment or decree to which the Company or any of its Subsidiaries is a
party or otherwise subject.
6. A Georgia state court or a federal court sitting in the State
of Georgia would give effect to the choice of New York law contained in the
Agreement.
Very truly yours,
<PAGE> 63
Schedule 8A
Subsidiaries
<TABLE>
<CAPTION>
Percent of
Ownership
----------
<S> <C>
Benn Corp, a North Carolina corporation 100%
Crown Crafts Home Furnishings, Inc., a New York corporation 100%
Crown Crafts Home Furnishings of Illinois, Inc., a Delaware corporation 100%
Crown Crafts Home Furnishings of California, Inc., a California corporation 100%
Crown Crafts International, Inc., a Georgia corporation 100%
G.W. Stores, Inc., a North Carolina corporation 100%
Textile, Inc., a North Carolina corporation 100%
Hans Benjamin Furniture, Inc., a South Carolina corporation 51%
</TABLE>
<PAGE> 64
Schedule 8G
Agreements Restricting Debt
1. $15,000,000 Revolving Credit Facility between NationsBank, National
Association (Carolinas) and Crown Crafts, Inc. dated August 25, 1995.
2. $15,000,000 Revolving Credit Facility between Wachovia Bank of
Georgia, N.A. and Crown Crafts, Inc. dated August 25, 1995.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF CROWN CRAFTS FOR THE SIX MONTHS ENDED OCTOBER 1, 1995,
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAR-31-1996
<PERIOD-START> APR-03-1995
<PERIOD-END> OCT-01-1995
<CASH> 437
<SECURITIES> 0
<RECEIVABLES> 31,165
<ALLOWANCES> 0
<INVENTORY> 58,622
<CURRENT-ASSETS> 93,981
<PP&E> 106,595
<DEPRECIATION> 33,364
<TOTAL-ASSETS> 171,342
<CURRENT-LIABILITIES> 26,418
<BONDS> 56,990
<COMMON> 9,049
0
0
<OTHER-SE> 73,003
<TOTAL-LIABILITY-AND-EQUITY> 171,342
<SALES> 96,537
<TOTAL-REVENUES> 96,537
<CGS> 76,743
<TOTAL-COSTS> 76,743
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,213
<INCOME-PRETAX> 4,110
<INCOME-TAX> 1,536
<INCOME-CONTINUING> 2,574
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,574
<EPS-PRIMARY> 0.31
<EPS-DILUTED> 0
</TABLE>
