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EXHIBIT 2.2
AMENDMENT NO. 1 TO MERGER AGREEMENT
THIS AMENDMENT NO. 1 TO MERGER AGREEMENT (this
"Amendment") is entered into as of October 31, 1995, by and among
CROWN CRAFTS, INC., a Georgia corporation ("Crown Crafts"), CC
ACQUISITION CORP., a California corporation and a wholly owned
subsidiary of Crown Crafts ("Merger Sub"), THE RED CALLIOPE AND
ASSOCIATES, INC., a California corporation ("Red Calliope" or the
"Company"), STANLEY GLICKMAN, an individual resident of the State
of California ("Mr. Glickman"), and CAROL GLICKMAN, an individual
resident of the State of California ("Mrs. Glickman") (Mr.
Glickman and Mrs. Glickman, individually and as trustees of the
Glickman Family Trust and as partners in the Glickman Family
Investment Partnership, being referred to collectively as the
"Glickmans"), and NEAL FOHRMAN, an individual resident of the
State of California ("Mr. Fohrman").
W I T N E S S E T H:
WHEREAS, the parties hereto (other than Mrs. Glickman)
have entered into that certain Merger Agreement (the "Merger
Agreement"), dated as of October 8, 1995, by and among Crown
Crafts, Merger Sub, Red Calliope, Mr. Glickman and Mr. Fohrman;
WHEREAS, the parties hereto have determined that it is
desirable to amend the Merger Agreement;
NOW, THEREFORE, in consideration of the foregoing and the
provisions set forth below, the parties hereto hereby agree as
follows:
SECTION 1. AMENDMENT OF SECTION 2.6. Section 2.6
of the Agreement is hereby amended to read in its entirety as
follows:
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SECTION 2.6. CLOSING; EFFECTIVE TIME. The closing of
the Merger (the "Closing") shall, unless another date, time or place
is agreed to in writing by all parties hereto, take place at the
offices of Gibson, Dunn & Crutcher, 333 South Grand Avenue, Los
Angeles, California 90071 at 8:00 a.m., Los Angeles time, on October
31, 1995 (the "Closing Date"). If, on or before the Closing Date, all
the conditions set forth in Articles 8 and 9 shall have been fulfilled
or waived in accordance with the terms hereof and this Agreement shall
not have been terminated in accordance with Section 10.3, 10.4 or
10.6, then the parties hereto shall cause to be properly executed and
filed on the Closing Date with the Secretary of State of the State of
California an agreement of merger and accompanying certificates of
approval conforming to law (collectively, the "Certificate of
Merger"). The Merger shall become effective as of the time of filing
of the properly executed Certificate of Merger. The date and time
when the Merger becomes effective is herein referred to as the
"Effective Time." Notwithstanding anything to the contrary herein, if
at the Effective Time the condition set forth in Section 8.15 hereof
is not satisfied, then Crown Crafts may terminate this Agreement,
whereupon all of the rights and obligations of the parties under this
Agreement shall terminate without liability, except as provided in
Section 10.2 and except for liability due to a default or breach by
any party.
SECTION 2. AMENDMENT OF SECTION 6.1(XVII). Section
6.1(xvii) of the Agreement is hereby amended to read in its entirety as follows:
(xvii) use its reasonable best efforts to
obtain any consents or approvals required under any
Contracts or otherwise that are necessary to complete the
Merger or to avoid a Default under any such Contract,
provided that Red Calliope shall not be required to make
payments in excess of an aggregate of $200,000 in order
to obtain such consents and approvals;
SECTION 3. AMENDMENT OF SECTION 7.1. Section 7.1
of the Agreement is hereby amended by adding new paragraph (C) as follows:
(C) Notwithstanding the foregoing, from and
after the Closing Date the Glickmans, jointly and
severally, and Mr. Fohrman shall indemnify and hold
harmless each indemnified party from, against and in
respect of any and all Losses resulting from, relating to
or arising out of any inaccuracy, untruth or
incompleteness of any representation or warranty of the
Company contained in the third sentence of Section 4.2
hereof, regardless of whether the same was deliberate,
reckless, innocent or unintentional. For purposes of
this Agreement, but solely as it pertains to actions
pursuant to this Section 7.1(C),
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(i) such third sentence of
Section 4.2 shall be deemed to be amended at the end
thereof to add the words "and the Glickmans further
represent and warrant that they have never sold or
otherwise transferred any shares of the capital stock of
the Company other than shares sold or otherwise
transferred to the Glickman Family Trust, the Glickman
Family Investment Partnership, Edward Tannenbaum, Mr.
Fohrman, Elliot Fine (to whom they sold, or otherwise
transferred, 215 shares in or about 1991 and to whom they
made no other sales or transfers) or the Company"; and
(ii) the term "indemnifying parties"
shall mean Mr. Fohrman and the Glickmans.
Any other indemnity and hold harmless provision appearing
elsewhere in this Agreement purporting to apply to the third
sentence of Section 4.2 hereof shall be subject to and qualified
by this Section 7.1(C) and by all other clauses and provisions
referring to this Section 7.1(C).
SECTION 4. AMENDMENT OF SECTION 7.2. Section 7.2 of the
Agreement is hereby amended by adding new paragraph (B) as follows:
(B) Notwithstanding the foregoing, in
connection with any Claim arising pursuant to Section
7.1(C) hereof, the indemnified parties shall follow the
procedures required pursuant to Section 7.2(A)(i) hereof,
but in the event it is determined that any of the
indemnifying parties is required to make a payment to the
indemnified parties pursuant to Section 7.1(C), the
indemnified parties shall first exhaust all remedies
legally available to them to collect such amount from the
Glickmans, and only thereafter shall the indemnified
parties be entitled to collect any such amounts from Mr.
Fohrman, and then only to the extent of the balance not
paid by the Glickmans.
SECTION 5. AMENDMENT OF SECTION 7.4. Section 7.4 of the
Agreement is hereby amended to read in its entirety as follows:
SECTION 7.4. SURVIVAL OF REPRESENTATIONS AND
WARRANTIES, ETC. All of the representations, warranties,
covenants and agreements contained in this Agreement or
in any attachment, Exhibit, the DISCLOSURE SCHEDULE,
certificate, document or list delivered in connection
with the Merger shall survive the Closing, any
examination by or on behalf of the parties and the
consummation of the transactions contemplated herein, but
only to the extent specified below:
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(i) except as set forth in
clauses (ii), (iii) and (iv) below, the
representations and warranties contained in
Article 4 hereof shall survive for a period of
one (1) year following the Closing Date;
(ii) the representations and
warranties contained in Sections 4.1 through and
including 4.6, Sections 4.8 and 4.27 and in
Article 5 shall survive as to any claim covered
thereby for so long as any statute of limitations
for such claim remains open, in whole or in part,
including, without limitation, by reason of
waiver or extension of such statute of
limitations;
(iii) the representations and
warranties contained in Sections 4.16 and 4.25
shall survive for a period of three (3) years
following the Closing Date; and
(iv) notwithstanding the
foregoing, the representation and warranty
contained in the third sentence of Section 4.2,
for which indemnification is provided in
Section 7.1(C) hereof, shall survive as to any
claim covered thereby for so long as any statute
of limitations for such claim remains open, in
whole or in part, including, without limitation,
by reason of waiver or extension of such statute
of limitations.
SECTION 6. AMENDMENT OF SECTION 7.5. Section 7.5
of the Agreement is hereby amended to read in its entirety as follows:
SECTION 7.5. LIMITATIONS AS TO AMOUNT.
(A) Mr. Glickman and Mr. Fohrman
shall not have any liability with respect to the
matters described in Section 7.1 (B) until the
total of all Losses with respect thereto (not
including Losses with respect to the matters
described in Section 7.1(C)) exceeds $50,000 in
which event Mr. Glickman and Mr. Fohrman shall be
obligated to indemnify the indemnified party as
provided herein for all such Losses, subject to
Section 7.5(B).
(B) Except with respect to Claims
based upon intentional misrepresentation or
intentional breach of warranty by the Company,
(i) the liability of Mr. Glickman or Mr. Fohrman
under Section 7.1(B) and (C) shall in no event
exceed the consideration paid to or on behalf of
Mr. Glickman or Mr. Fohrman, as relevant,
pursuant to Section 3.1 and (ii) the collective
liability of Mr. Glickman and Mr. Fohrman under
Section 7.1(B) and (C) shall in no event exceed
$7,000,000.
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(C) If the allowance for doubtful
accounts set forth on the Closing Balance Sheet
exceeds the aggregate amount of accounts
receivable reflected on the Closing Balance Sheet
that ultimately are uncollectible, such excess
allowance shall be credited against any amount
that Mr. Glickman and Mr. Fohrman would otherwise
be obligated to pay pursuant to Section 7.1(B).
(D) Notwithstanding the foregoing, except with
respect to Claims based upon intentional misrepresentation
or intentional breach of warranty by Mrs. Glickman, the
liability of Mrs. Glickman under Section 7.1(C) shall in
no event exceed $360,000.
SECTION 7. AMENDMENT OF SECTION 10.6. Section 10.6
of the Agreement is hereby amended to read in its entirety as follows:
SECTION 10.6. OTHER EVENTS OF TERMINATION. This
Agreement may be terminated and the Merger may be
abandoned by (i) action of the Board of Directors of
Crown Crafts if the Effective Time shall not have
occurred by the close of business on November 10, 1995 or
(ii) action of the Board of Directors of either the
Company or Crown Crafts (1) if the Effective Time shall
not have occurred and this Agreement shall not have been
terminated prior to December 31, 1995, or (2) a United
States federal or state court of competent jurisdiction
or United States federal or state governmental,
regulatory or administrative agency or commission shall
have issued an order, decree or ruling or taken any other
action permanently restraining, enjoining or otherwise
prohibiting the transactions contemplated by this
Agreement and such order, decree, ruling or other action
shall have become final and non-appealable and the party
seeking to terminate this Agreement pursuant to this
clause (ii) shall have used all reasonable efforts to
remove such injunction, order or decree, whereupon all of
the rights and obligations of the parties under this
Agreement shall terminate without liability, except as
provided in Section 10.2 and except for liability in the
event the Closing does not occur and this Agreement
terminates by reason of a default or breach by any party
hereto.
SECTION 8. RATIFICATION. Except as expressly
amended by the terms hereof, the Agreement is hereby reaffirmed
by each of the parties hereto.
IN WITNESS WHEREOF, each of Mr. Glickman, Mrs. Glickman
and Mr. Fohrman has duly executed and delivered this Amendment,
and each of the Company, Merger Sub and Crown Crafts has caused
this Amendment to be duly executed and delivered
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on its behalf by an officer thereunto duly authorized, all as of
the date first written above.
CROWN CRAFTS, INC.
By:
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Name: E. Randall Chestnut
Title: Vice President
CC ACQUISITION CORP.
By:
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Name: E. Randall Chestnut
Title: President
THE RED CALLIOPE AND ASSOCIATES, INC.
By:
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Name: Neal Fohrman
Title: President
NEAL FOHRMAN, Individually
STANLEY GLICKMAN, Individually and as
trustee of the Glickman Family Trust and
as a partner in the Glickman Family
Investment Partnership
CAROL GLICKMAN, Individually and as
trustee of the Glickman Family Trust and
as a partner in the Glickman Family
Investment Partnership
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