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EXHIBIT 10.2
AMENDMENT NO. 1 TO REVOLVING CREDIT AGREEMENT
THIS AMENDMENT NO. 1 TO REVOLVING CREDIT AGREEMENT (this "Amendment")
is dated effective as of February 23, 2000, among CROWN CRAFTS, INC. (the
"Borrower") and WACHOVIA BANK, N.A. (the "Lender");
W I T N E S S E T H:
WHEREAS, the Borrower and the Lender executed and delivered that
certain Credit Agreement, dated as of August 9, 1999 (the "Credit Agreement");
WHEREAS, the Borrower has requested and the Lender has agreed to
certain amendments to certain provisions in the Credit Agreement, subject to the
terms and conditions hereof;
NOW, THEREFORE, for and in consideration of the above premises and
other good and valuable consideration, the receipt and sufficiency of which
hereby is acknowledged by the parties hereto, the Borrower and the Lender hereby
covenant and agree as follows:
1. Definitions. Unless otherwise specifically defined herein,
each term used herein which is defined in the Credit Agreement shall have the
meaning assigned to such term in the Credit Agreement. Each reference to
"hereof", "hereunder", "herein" and "hereby" and each other similar reference
and each reference to "this Agreement" and each other similar reference
contained in the Credit Agreement shall from and after the date hereof refer to
the Credit Agreement as amended hereby.
2. Amendments to Credit Agreement. (a) Each of the following
definitions is hereby added to Section 1.1 of the Credit Agreement in
alphabetical order as follows:
"Additional Bridge Loan Conditions" means the following
initial condition to the making of the CIT Bridge Loan and the
effectiveness of treatment of CIT as a Secured Party under the Amended
and Restated Intercreditor Agreement with respect to the CIT Bridge
Loan, and the ongoing conditions for advances under the CIT Bridge
Loan, which shall be set forth in and required by the Amended and
Restated Intercreditor Agreement:
(a) the initial condition shall be the execution
and delivery of such amendments to the Security Documents as
may be necessary or desirable in connection therewith; and
(b) the ongoing conditions shall be that (i) the
Borrower shall be required to obtain such Factor Advances from
a Permitted Factor as may be available
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from time to time (without violating the provisions of Section
8.15 hereof) before being entitled to request any advances
under the CIT Bridge Loan, and (ii) each advance under the CIT
Bridge Loan shall be requested through the Collateral Agent
(which request shall include a certification that no Factor
Advances are available from a Permitted Factor without
violating the provisions of Section 8.15 hereof for any
amounts so requested to be advanced and shall be accompanied
by an update of the Borrowing Base Certificate as required by
Section 7.1(g)), and such advance shall be available to the
Borrower only if the Collateral Agent determines that, after
giving effect to such advance, the aggregate amount of Senior
Debt outstanding would not exceed the Borrowing Base, and so
notifies CIT and the Borrower.
"Amended and Restated Intercreditor Agreement" means an
amendment and restatement of the Intercreditor Agreement, in form and
substance satisfactory to the Lender, which will contain, among other
things: (i) the addition of CIT as a Secured Party thereunder with
respect to the CIT Bridge Loan, subject to the Additional Bridge Loan
Conditions; (ii) provisions pertaining to the application of proceeds
of the Transaction (including distribution with respect to the CIT
Bridge Loan prior to distributions to the other Secured Parties); (iii)
provisions pertaining to the application of proceeds of any issuance of
debt, equity or other capital (including distribution with respect to
the CIT Bridge Loan prior to distributions to the other Secured
Parties); (iv) provisions pertaining to a "true up" of outstanding
claims of the Secured Parties (other than CIT) in the event of receipt
of a "Default Notice", as defined therein; and (v) such other matters
as the Secured Parties shall deem appropriate.
"CIT" means The CIT Group/Commercial Services, Inc.
"CIT Bridge Loan" means a loan or loans in the aggregate
amount of up to $10,000,000 to be made to the Borrower by CIT after the
First Amendment Effective Date, subject to the satisfaction of the CIT
Bridge Loan Conditions.
"CIT Bridge Loan Conditions" means: (i) the execution and
delivery by the Borrower, the Collateral Agent and the Secured Parties
(including CIT with respect to the CIT Bridge Loan) of the Amended and
Restated Intercreditor Agreement; and (ii) the Additional Bridge Loan
Conditions.
"Transaction" means the transaction conforming to the terms of
that certain letter agreement dated as of February 23, 2000 among the
Secured Parties and the Borrower.
(b) Each of the following definitions contained in Section 1.1 of
the Credit Agreement is amended and restated in its entirety in alphabetical
order as follows:
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"Applicable Interest Addition" means (i) for each Base Rate
Loan which is not an Overadvance Loan, 1.00%, and (ii) for each Base
Rate Loan which is also an Overadvance Loan, 2.00%; provided, however,
that if, for any period set forth in clauses (i) through (v) of the
definition of Overadvance Amount, the Secured Parties agree to any
Overadvance Loan in an amount in excess of the amount set forth in such
definition for such period, the interest rate for the amount of such
excess shall be such higher rate as the parties may agree upon. The
increased amount of interest on any Overadvance Loans shall accrue from
the effective date of each Borrowing Base Certificate and shall be
based upon the amount of Overadvance Loans outstanding on such
effective date as calculated from the Borrowing Base reported in such
Borrowing Base Certificate.
"Bank of America" means Bank of America and its successors and
assigns under the Bank of America Credit Agreement.
"Borrowing Base" means, as determined by the most recent
Borrowing Base Certificate, or, in the event such Borrowing Base
Certificate is not timely delivered, based upon the the Lender's good
faith estimate thereof for such period to be reported on the date such
Borrowing Base Certificate was due, an amount equal to:
(a) all Net Receivables multiplied by 85%, less
the amount of all Factor Advances which have been received
from the applicable Permitted Factor; plus
(b) the lesser of the book value (net of all
reserves) or market value of all Inventory multiplied by 50%;
plus
(c) the Applicable Property Value multiplied by
80%; plus
(d) the Overadvance Amount.
"First Amendment Effective Date" means February 23, 2000.
"Overadvance Amount" means, for the purposes of each
calculation of the Borrowing Base, an amount equal to: (i) for the
period from the First Amendment Effective Date to February 25, 2000,
$25,000,000; (ii) for the period from February 26, 2000 to March 10,
2000, $26,000,000; (iii) for the period from March 11, 2000 to March
17, 2000, $25,000,000; (iv) for the period from March 18, 2000 to March
24, 2000, $24,000,000; and (v) from and after March 25, 2000,
$23,000,000; provided, however, during any of the foregoing periods,
the Overadvance Amount may be such higher amount, not to exceed
$28,000,000, as all of the Secured Parties may agree upon in their sole
and absolute discretion.
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"Overadvance Loan" means, as determined by the most recent
Borrowing Base Certificate, that portion of the Revolving Loans equal
to (x) all Obligations divided by total Senior Debt outstanding,
multiplied by (y) the amount of total Senior Debt outstanding in excess
of (i) the Borrowing Base minus (ii) the Overadvance Amount.
"Prudential" means The Prudential Insurance Company of America
and its successors and assigns under the Prudential Note Agreement.
"Secured Parties" means, collectively, the Lender, Bank of
America and Prudential, and from and after satisfaction of the CIT
Bridge Loan Conditions, shall also mean and include CIT, with respect
to the CIT Bridge Loan.
"Senior Debt" means: (i) all Indebtedness of the Borrower and
its Subsidiaries owing to the Secured Parties pursuant to the Senior
Debt Documents; and (ii) upon satisfaction of and subject to the CIT
Bridge Loan Conditions, all Indebtedness of the Borrower and its
Subsidiaries owing to CIT pursuant to the financing or credit agreement
governing the CIT Bridge Loan.
"Senior Debt Documents" means, collectively: (i) this
Agreement, the Bank of America Credit Agreement and the Prudential Note
Agreement, together with all material related documents executed in
connection with the transactions contemplated thereby; and (ii) upon
satisfaction of and subject to the CIT Bridge Loan Conditions, the
financing or credit agreement governing the CIT Bridge Loan and all
material related documents executed in connection with the transactions
contemplated thereby; provided, that the reference to Senior Debt
Documents contained in clause (xiv) of Section 5.1 shall mean only the
documents described in clause (i) of this definition.
"Term Loan Maturity Date" means the earlier of (i) April 3,
2000, or (ii) such earlier date of termination of the Lender's
obligations pursuant to Section 9.1 or the acceleration of any Loans
upon the occurrence of an Event of Default.
(c) Section 3.1 is amended and restated in its entirety as
follows:
3.1 Interest Rate. From and after the First Amendment
Effective Date all new Loans shall be made as Base Rate Loans; (ii) no
Eurodollar Rate Loans may be elected. Eurodollar Rate Loans in effect
on the First Amendment Effective Date shall continue as such until the
end of the applicable Interest Period for such Eurodollar Rate Loans,
at which time they shall be Converted to Base Rate Loans, and may not
be Continued as Eurodollar Rate Loans, and all references in and
provisions of this Agreement or any Exhibits hereto to a selection by
the Borrower of a Eurodollar Rate shall be ignored and shall have no
force or effect on or after the First Amendment Effective Date.
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(d) Section 3.2 is amended and restated in its entirety as
follows:
3.2 Discontinuance of Conversion and Continuation
Elections. From and after the First Amendment Effective Date, the
Borrower shall have no option to Convert a Base Rate Loan to a
Eurodollar Rate Loan or to Continue a Eurodollar Rate Loan as a
Eurodollar Rate Loan, and all references in and provisions of this
Agreement or any Exhibits hereto to such option, or to any Conversion
or Continuation, shall be ignored and shall have no force or effect as
to any Loans in existence on or made after the First Amendment
Effective Date.
(e) Section 3.3 is amended and restated in its entirety as
follows:
3.3 Payment of Interest. The Borrower shall pay interest
on the outstanding and unpaid principal amount of each Loan, commencing
on the first date of such Loan until such Loan shall be repaid, at the
applicable Base Rate or, with respect to Eurodollar Rate Loans in
effect on the First Amendment Effective Date, at such Eurodollar Rate.
Interest on Eurodollar Loans in effect on the First Amendment Effective
Date shall be paid on the last day of the applicable Interest Period
for such Eurodollar Rate Loan. Interest on each other Loan shall be
paid on the earlier of (a) monthly in arrears on the last Business Day
of each month, commencing February 29, 2000, until the Revolving A
Credit Termination Date or the Term Loan Maturity Date, as applicable,
at which date the entire principal amount of and all accrued interest
on such Loans shall be paid in full, and (b) upon payment in full of
the related Loan; provided, however, that if any Event of Default shall
occur and be continuing, all amounts outstanding hereunder shall bear
interest thereafter until paid in full at the Default Rate.
(f) Section 7.1 hereby is amended by adding a new paragraph (g)
thereto, as follows:
(g) Updates of Borrowing Base Certificates. On each
Business Day, an uncertified, good faith estimated update of
the most recently furnished complete Borrowing Base
Certificate as to the information under the heading "Accounts
Receivable" pertaining to "Factored Accounts" and "Factor
Advances"; and the information under the heading "Senior
Debt".
(g) Section 8.1(b) is amended and restated in its entirety as
follows:
(b) Consolidated EBITDA. Permit Consolidated EBITDA as of
the end of any fiscal month for any Twelve Month Period ending on or
about the dates indicated below to be less than the amount set forth
below opposite such date:
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Minimum
Consolidated
Twelve Month Period Ending Date EBITDA
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December 26, 1999 $14,500,000
January 30, 2000 $10,000,000
February 27, 2000 $ 8,500,000
April 2, 2000 $ 7,500,000
(h) Section 8.1(c) is amended and restated in its entirety as
follows:
(c) Consolidated Fixed Charge Coverage Ratio. Permit at
any time the Consolidated Fixed Charge Ratio of the Borrower to be less
than 0.00 to 1.00
(i) Section 8.7 is amended and restated in its entirety as
follows:
8.7 Restricted Payments. Make any Restricted Payments
(including, without limitation, any cash dividends or other
distributions or settlement payments with respect to any class of stock
of the Borrower or any of its Subsidiaries) or apply or set apart any
of their assets therefor or agree to do any of the foregoing in any
Fiscal Year, and the provisions of that certain letter agreement dated
August 6, 1999 among the Borrower, the Lender and Bank of America
hereby are rescinded, and such letter agreement hereby is terminated.
(j) Section 8.15 is amended and restated in its entirety as
follows:
8.15 Factor Advances. Permit to exist any Factor Advances,
other than Factor Advances from a Permitted Factor, in an aggregate
amount exceeding $25,000,000 at any time.
(k) Effective upon satisfaction of the CIT Bridge Loan Conditions,
Exhibit J to the Credit Agreement (the form of Borrowing Base Certificate) is
amended by adding, under the heading "Senior Debt" and after the line item for
Wachovia debt, an additional line item for CIT debt under the CIT Bridge Loan.
3. Consent to CIT Bridge Loan. The Lender hereby consents to the
CIT Bridge Loan, subject to satisfaction of the CIT Bridge Loan Conditions.
4. Restatement of Representations and Warranties. The Borrower
hereby restates and renews each and every representation and warranty heretofore
made by it in the Credit Agreement (as amended and modified hereby) and the
other Loan Documents as fully as if made
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on the date hereof and with specific reference to this Amendment and all other
loan documents executed and/or delivered in connection herewith.
5. Effect of Amendment. Except as set forth expressly
hereinabove, all terms of the Credit Agreement and the other Loan Documents
shall be and remain in full force and effect, and shall constitute the legal,
valid, binding and enforceable obligations of the Borrower. The agreements
contained herein shall be deemed to have prospective application only, unless
otherwise specifically stated herein.
6. Ratification. The Borrower hereby restates, ratifies and
reaffirms each and every term, covenant and condition set forth in the Credit
Agreement and the other Loan Documents effective as of the date hereof and
agrees that this Amendment is one of the Loan Documents.
7. Counterparts. This Amendment may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed to be an original and all
of which counterparts, taken together, shall constitute but one and the same
instrument.
8. Section References. Section titles and references used in this
Amendment shall be without substantive meaning or content of any kind whatsoever
and are not a part of the agreements among the parties hereto evidenced hereby.
9. No Default or Claims. To induce the Lender to enter into this
Amendment and to continue to make advances pursuant to the Credit Agreement, the
Borrower hereby acknowledges and agrees that, as of the date hereof, and after
giving effect to the terms hereof, (i) no Default or Event of Default exists,
(ii) no right of offset, recoupment, defense, counterclaim, claim or objection
exists in favor of the Borrower arising out of or with respect to any of the
Loans or other obligations of the Borrower owed to the Lenders under the Credit
Agreement, and (iii) the Bank has acted in good faith and has conducted its
relationships with the Borrower in a commercially reasonable manner in
connection with the negotiations, execution and delivery of this Amendment and
in all respects in connection with the Credit Agreement, the Borrower hereby
waiving and releasing any such claims to the contrary that may exist as of the
date of this Amendment.
10. Additional Agreements; Further Assurances. (a) The Borrower
agrees to deliver to the Lender the following items on or before March 31, 2000:
(i) such surveys as the Lender may reasonably request and title policies
(reflecting negotiated changes to each title commitment therefor) for all real
property of the Borrower and its Subsidiaries (other than for Excluded
Locations), and (ii) opinion letters from local counsel relating to the
perfection of the Secured Parties' liens against the personal and real property
of the Borrower and its Subsidiaries located in Watauga County, North Carolina,
and Louisiana.
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(b) The Borrower acknowledges that the amendments to the Credit
Agreement contained in this Amendment were approved by the Lender on an
expedited basis at the Borrower's request and on the Borrower's behalf, and,
therefore, certain matters contemplated by this Amendment and the other Loan
Documents and amendments thereto executed and delivered in connection with this
Amendment may not be documented to the complete satisfaction of the Lender. The
Borrower agrees to promptly take such further actions as the Lender shall
request from time to time in connection with this Amendment in order to further
document and evidence the agreements contemplated by this Amendment and to
provide the Lender with such other customary rights, powers and remedies with
respect to the agreements contemplated by this Amendment that might not be
contained herein. The failure by the Borrower to timely comply with any such
request by the Lender and any other obligation of the Borrower under this
Amendment, time being of the essence, shall constitute an Event of Default under
the Credit Agreement.
11. Governing Law. This Amendment shall be governed by and
construed and interpreted in accordance with, the laws of the State of Georgia.
12. Conditions Precedent; Attorney Fees; Etc.. This Amendment
shall become effective only upon (A) execution and delivery of (i) this
Amendment by each of the parties hereto, (ii) the Consent and Reaffirmation of
Guarantors at the end hereof by each of the Guarantors, (iii) an amendment,
satisfactory to the Lender in all respects, to that certain Revolving Credit
Agreement dated as of August 9, 1999, between the Borrower and Bank of America,
N.A., whereby the amendments set forth in paragraph 2 of this Amendment are
agreed to with respect to such Revolving Credit Agreement and, to the extent not
remedied by such amendments, any existing defaults or events of default
thereunder are waived, (iv) a waiver, satisfactory to the Lender in all
respects, with respect to that certain Note Agreement dated as of October 12,
1995 between the Borrower and The Prudential Insurance Company of America,
whereby any existing defaults or events of default thereunder are waived for a
period not less than one year, and (v) the letter agreement described in the
definition of "Transaction" added to the Credit Agreement hereby; and (B)
payment to the Lender in immediately available funds of the fees, costs and
expenses described in a letter agreement of even date herewith between the
Borrower and the Lender.
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IN WITNESS WHEREOF, the Borrower and the Lender have caused this
Amendment to be duly executed, under seal, by their duly authorized officers as
of the day and year first above written.
CROWN CRAFTS, INC. (SEAL)
By: /s/ Xxxxx X. Xxxxxx
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Title: Vice President,
Chief Financial Officer
WACHOVIA BANK, N.A. (SEAL)
By: /s/ R.E.S. Xxxxx
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Title: Vice President
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CONSENT AND REAFFIRMATION OF GUARANTORS
Each of the undersigned (i) acknowledges receipt of the foregoing
Amendment No. 1 to Revolving Credit Agreement (the "Amendment"), (ii) consents
to the execution and delivery of the Amendment by the parties thereto, and (iii)
reaffirms all of its obligations and covenants under that certain Subsidiary
Guaranty Agreement dated as of August 9, 1999, and agrees that none of such
obligations and covenants shall be affected by the execution and delivery of the
Amendment. This Consent and Reaffirmation may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed to be an original and all
of which counterparts, taken together, shall constitute but one and the same
instrument.
GUARANTORS:
XXXXXXXXX WEAVERS, INC.
CROWN CRAFTS DESIGNER, INC.
CROWN CRAFTS FURNISHINGS, INC.
CROWN CRAFTS FURNISHINGS OF
ILLINOIS, INC.
G.W. STORES, INC.
HAMCO, INC.
CROWN CRAFTS INFANT PRODUCTS, INC.
(as successor to Xxxx Xxxxxx, Inc. And the Red
Calliope and Associates, Inc.)
By: /s/ Xxxxx X. Xxxxxx
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Name: Xxxxx X. Xxxxxx
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Title: Vice President
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