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EXHIBIT 10.5
DISBURSEMENT AGREEMENT
This Disbursement Agreement (the "Agreement") is
entered into as of this 8th day of October, 1995, by and among
(i) Leonard, Dicker & Schreiber ("LDS"), a California
partnership, Kopple & Klinger, a California partnership, Stutman,
Treister & Glatt, a California law corporation, and Chaleff &
English, a California partnership, for itself and as successor-
in-interest to Chaleff, English & Catalano (collectively, the
"Lawyer Group"); (ii) The Red Calliope and Associates, Inc., a
California corporation ("Red Calliope"); (iii) Neal Fohrman, in
his capacity as Voting Trustee (the "Voting Trustee") pursuant to
that certain Voting Trust Agreement dated as of February 13, 1992
[sic] (the "Voting Trust Agreement"); (iv) Stanley Glickman and
Carol Glickman, individually, as trustees of the Glickman Family
Trust (the "Glickman Trust") and as general partners of the
Glickman Family Investment Partnership ("GFIP") (collectively,
the "Glickmans"); (v) Crown Crafts, Inc. and CC Acquisition
Corp. (collectively, "Crown Crafts"), both of which are Georgia
corporations; (vi) Mitchell Silberberg & Knupp, a California
partnership ("MSK"); (vii) R. Todd Nielson, in his capacity as
Resolution Agent of Reorganized Property Mortgage Co., Inc. (the
"Resolution Agent"); (viii) Robert Mann ("E. Fine Trustee"), in
his capacity as trustee of the Elliot Fine Trust, U/D/T dated
February 28, 1980, as amended August 5, 1994 ("Trust A"); (ix)
the signatories hereto on behalf of Shirley Fine Trust B ("Trust
B"); (x) Ross, Sacks & Glazier, a California partnership
("Ross"); and (xi) Robert C. Kopple, Esq., individually, and
Robert C. Kopple, a Professional Corporation (collectively,
"Kopple"). The signatories hereto on behalf of Trust B are, in
said capacities, sometimes hereinafter collectively referred to
as the "Trust B Parties". MSK, the Lawyer Group, the Resolution
Agent, the E. Fine Trustee, the Trust B Parties and Ross are
hereinafter sometimes collectively referred to as the "Secured
Parties".
WHEREAS, MSK claims a security interest (the "MSK
Security Interest"), directly or indirectly, in 585 shares of
common stock (the "Securities"), issued by Red Calliope, the
certificate for which is held by the Voting Trustee pursuant to
the Voting Trust Agreement, as collateral for the performance of
certain obligations of one or more of the Glickmans (said
obligations, together with other secured obligations of the
Glickmans to the other Secured Parties, are hereinafter referred
to as the "Obligations"), pursuant to a Security Agreement dated
February 6, 1991 (the "MSK Security Agreement"), which MSK
Security Interest secures Obligations in the sum of $750,000; and
WHEREAS, the Lawyer Group claims a security
interest (the "First Security Interest"), directly or indirectly,
in the Securities as collateral for the performance of certain of
the Obligations, pursuant to a Pledge Agreement dated November 1,
1993 (the "First Security Agreement"), which First Security
Interest secures Obligations in the sum of $750,000; and
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WHEREAS, Chaleff & English claims an additional
security interest (the "Second Security Interest"), directly or
indirectly, in the Securities, as further collateral for the
performance of certain of the Obligations, pursuant to a Security
Agreement dated September 13, 1995 (the "Second Security
Agreement"), which Second Security Interest secures Obligations
in the sum of $350,000; and
WHEREAS, one of the Trust B Parties is the
Trustee of Trust B and, in said capacity, is authorized to act as
trustee of Trust B and, on behalf of Trust B, claims a security
interest (the "Trust B Security Interest"), directly or
indirectly, in the Securities, as collateral for the performance
of certain of the Obligations, pursuant to a Pledge Agreement
dated December 17, 1993 (the "Trust B Security Agreement"), which
Trust B Security Interest secures Obligations in the sum of
$250,000 plus interest thereon; and
WHEREAS, the E. Fine Trustee, in his capacity as
such, claims a security interest (the "Fine Security Interest"),
directly or indirectly, in the Securities, as collateral for the
performance of certain of the Obligations, pursuant to a Security
Agreement dated February 14, 1991 (the "Fine Security
Agreement"), which Fine Security Interest secures Obligations in
the sum of $360,000; and
WHEREAS, Elliot R. Fine ("Fine") assigned to the
Resolution Agent a $200,000 interest in and to the $360,000
Obligation secured by the Fine Security Interest and in said Fine
Security Interest; and
WHEREAS, by a written "General Assignment of
Personal Property", dated August 5, 1994, Fine transferred all of
his remaining interest in said Obligation and said Fine Security
Interest to Trust A; and
WHEREAS, the Internal Revenue Service (the "IRS")
and the California Franchise Tax Board (the "FTB") assert liens
for federal and state taxes against the Securities, directly or
indirectly, pursuant to various notices of lien (the "Tax
Liens"), which Tax Liens are in the sums of $1,934,623 and
$693,434, respectively; and
WHEREAS, the Secured Parties, the IRS and the FTB
claim such security interests and liens in, to or against,
without limitation, the Securities, any evidence of any
beneficial ownership in the Securities, any voting trust
certificate issued pursuant to the Voting Trust Agreement, and
any promissory notes and security agreements of GFIP
(collectively, the "Collateral");
WHEREAS, Crown Crafts and Red Calliope are
parties to a proposed merger (the "Merger") pursuant to which,
inter alia, the Securities will be surrendered in exchange for
cash, upon terms and conditions specified in a written merger
agreement of even date herewith (the "Merger Agreement"),
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NOW, THEREFORE, the parties hereto agree as
follows:
1. Undefined capitalized terms used herein
shall have the meanings set forth in the Merger Agreement.
2. This Agreement shall be void and of no
effect if the Merger Agreement is terminated, or if the Merger
contemplated by the Merger Agreement shall fail to close on or
before the Closing Date, including, without limitation, if the
Resolution Agent shall fail to obtain approval by the Bankruptcy
Court of this Agreement.
3. The Glickmans acknowledge and agree
that, as of the date hereof, they are indebted to the parties
listed on Schedule "3" hereto (the "Consensual Lienors") in the
respective amounts set forth therein; that such indebtedness is
now due and owing; and that the Consensual Lienors have valid and
subsisting security interests or other liens in, to or against
the Collateral in the respective amounts and in the respective
priorities set forth in said Schedule "3" (the "Consensual
Liens"). As of October 31, 1995, the Glickmans anticipate that
the total of the Consensual Liens will be approximately
$4,672,000, not including any additional liens of which the IRS
or the FTB may hereafter give notice. Subject to adjustment as
provided in the Merger Agreement and assuming (i) that there is
no Merger Litigation or Title Litigation, (ii) that Red Calliope
timely filed an election on Form 2553 with the IRS to be treated
as an S corporation effective for its taxable year beginning on
July 1, 1992 and (iii) that all Tax Reserves and Environmental
Reserves are paid to the Shareholders, then, of the cash proceeds
of the Merger distributable with respect to the Securities (the
"Glickman Proceeds"), the portion remaining after satisfaction of
the Consensual Liens and exclusive of any new liens in favor of
the IRS or the FTB is expected to be approximately $1,200,000 (as
adjusted pursuant to the Merger Agreement, the "Glickman
Equity").
3.1 The Glickmans and the Secured Parties agree
that all of the Obligations are valid and are due and owing by the
Glickmans to the respective Consensual Lienors, that each of the
Consensual Liens is a valid and subsisting security interest or other
lien in, to or against the Collateral in the respective amounts and
in the respective priorities set forth in said Schedule "3", and that
each of the Secured Parties' security interests is duly perfected;
PROVIDED, HOWEVER, that the Resolution Agent does not take any
position with respect to the Obligations to Chaleff & English
relating to the Second Security Agreement or to Ross, or to the
validity, priority or perfection of the Second Security Interest or
the Consensual Lien of Ross, or to the right of Chaleff & English or
Ross to receive any of the Glickman Proceeds on account or in
satisfaction of said Second Security Interest or Consensual Lien of
Ross, and expressly reserves all rights, claims and remedies with
respect thereto.
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3.2 Crown Crafts and Red Calliope make no
representation, warranty or covenant as to what a court would hold as
to the validity, perfection or priority of any of the Consensual
Liens or the rights of the Secured Parties with respect thereto or as
to the proceeds thereof.
4. Crown Crafts, Red Calliope and the
Voting Trustee, in said capacity only (hereinafter, collectively,
the "Distributors"), jointly and severally agree that at and
concurrently with the Closing (or at such later times as may be
expressly provided by the Merger Agreement), they shall cause the
Glickman Proceeds to be distributed, to the extent available, in
the order and in the manner hereinafter set forth.
4.1 First, to MSK, the sum of $182,228.78.
In connection therewith:
4.1.1 The Glickmans and MSK agree
that such distribution is in full satisfaction
and discharge of any and all Obligations of the
Glickmans to MSK and shall discharge the MSK
Security Interest in its entirety; and that
simultaneously with such distribution, the
Glickmans and MSK shall execute and deliver
limited releases of one another in the form of
Exhibit "4.1.1" hereto. All Secured Parties
other than MSK expressly waive any claims which
any of them may have against the Distributors or
MSK by reason of such distributions to MSK.
4.1.2 The Glickmans and the
Secured Parties agree that upon distribution of
the Glickman Proceeds as provided in this
paragraph 4, MSK shall deliver the Voting Trust
Certificate to the Voting Trustee, for surrender
to Crown Crafts pursuant to the Merger Agreement,
and that upon such surrender, all of the
Obligations other than the Obligations to MSK
(which shall be discharged as provided in
paragraph 4.1.1, above) shall remain outstanding
and all Consensual Liens in the Collateral (but
not in the proceeds of the Collateral) shall be
released and such Consensual Liens (other than
the MSK Security Interest in the Securities)
shall continue in and attach to the Glickman
Proceeds in the same order of priority and
perfection as existed in the Collateral
immediately prior to the Merger regardless of
whether the Glickman Proceeds are distributed
outright, held in trust, or deposited in the
Interpleader Action (as defined in paragraph
4.3.1, below) as provided in this paragraph 4.
4.1.3 Effective only upon the
distribution to MSK as provided in this paragraph
4.1, and except with respect to the obligations
created by or arising out of this Agreement, each
of MSK, for itself and its heirs, successors,
partners and assigns, and each of them,
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on the one hand, and the Distributors, and their
respective heirs, successors, partners and
assigns, and each of them, on the other hand,
hereby releases, absolves, remises and forever
discharges the other, and each of them, from any
and all actions and causes of action, claims,
suits, demands, debts, obligations, liabilities,
damages, dues, accounts, bonds, covenants,
contracts, agreements, judgments, costs and
expenses whatsoever, whether known or unknown,
suspected or unsuspected, at law or in equity of
every kind and nature whatsoever, which any of
them ever had, now has, or may or could hereafter
have against the other, or any of them, by reason
of any fact, matter, cause, act or omission
whatever, existing at any time prior to or
through the date of this Agreement. Each of MSK
and the Distributors acknowledges that he is
familiar with Section 1542 of the Civil Code of
the State of California, which provides as
follows:
"A general release does not extend
to claims which the creditor does not know
or suspect to exist in his favor at the time
of executing the release, which if known
by him must have materially affected his
settlement with the debtor."
Each of MSK and the Distributors specifically
waives the benefits of Section 1542 of the Civil
Code of the State of California and any similar
provision of the State of Georgia to the fullest
extent permitted by law. Nothing contained in
this Agreement shall constitute or be deemed to
constitute a release of any of the Glickmans by
MSK.
4.2 Second, to the IRS, the sum of
$1,934,623 plus applicable interest and penalties, if
any, and to the FTB, the sum of $693,434 plus applicable
interest and penalties, if any. Those Secured Parties
other than MSK whose security interests are or may be
senior to the Tax Liens, by not objecting to or seeking
to enjoin said distributions, are not waiving any right,
claim or interest they may have with respect to the
Glickman Proceeds distributed to the IRS or the FTB, and
expressly reserve all such rights, claims or interests.
All Secured Parties expressly waive any claims which any
of them may have against the Distributors or MSK by
reason of such distributions to the IRS and the FTB.
4.3 Third, the sum of $250,000 plus
interest thereon ($279,837.90 as of October 31, 1995), in
respect of all Obligations of the Glickmans to Trust B
which are secured by the Trust B Security Interest, shall
be delivered to LDS, for deposit into a segregated,
interest-bearing deposit account in a financial
institution chosen by LDS, in the name of LDS, in trust
for the benefit of Trust B.
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4.3.1 If no Claims are asserted by any Third
Parties prior to the Closing ("Third Party Claims"), with
respect to the validity or priority of said Obligation or the
Trust B Security Interest, and if the total of all Third Party
Claims is less than the sum of the Glickman Equity plus all
Consensual Liens other than the MSK Security Interest and the
Tax Liens, LDS is hereby authorized and instructed to withdraw
said portion of the Glickman Proceeds and to deliver said
portion of the Glickman Proceeds to the trustee of Trust B
until either (A) all of such portion of the Glickman Proceeds
has been delivered; or (B) the total of the Third Party Claims
is equal to the sum of the undelivered portion of such
Glickman Proceeds plus the other Consensual Liens (other than
the MSK Security Interest and the Tax Liens) plus the Glickman
Equity, whichever shall first occur. Otherwise, all the
parties hereto agree that LDS, in its sole discretion, subject
to any Court order, may either interplead said funds in the
Interpleader Action (as defined below in this paragraph
4.3.1); or hold said funds, plus all interest earned thereon,
in trust in said deposit account, for the benefit of Trust B,
pending a final determination by the Court (as defined below
in this paragraph 4.3.1) or another court of competent
jurisdiction, which determination is not subject to further
appeal (a "Final Determination"), with respect to said portion
of the Glickman Proceeds and the rights of Trust B and any
Third Parties therein. All the parties hereto agree that they
will not make any demands on said portion of the Glickman
Proceeds other than in the Interpleader Action or a
Declaratory Relief Action (as defined in paragraph 4.5.2.1.2,
below). Upon such Final Determination, and unless LDS has
interpled said portion of the Glickman Proceeds, LDS shall
distribute said portion of the Glickman Proceeds as provided
by such Final Determination. As used in this Agreement, the
"Interpleader Action" shall mean an action in interpleader
commenced by any of the Distributors or any of the Lawyer
Group, which shall be commenced, if at all, only in the
Superior Court for the State of California for the County of
Los Angeles, Central District (the "Court"), and which shall
be brought, if at all, pursuant to California Code of Civil
Procedure section 386; PROVIDED, HOWEVER, that in the event of
any conflict between the provisions of this paragraph 4.3.1
and any applicable statute, rule or law pertaining to Claims
asserted by the IRS or the FTB in addition to the existing Tax
Liens, such applicable statutes, rules or laws shall control,
and the term "Interpleader Action" shall be deemed to include
any suit, action or proceeding commenced pursuant to such
applicable statutes, rules or laws.
4.3.2 The Glickmans and Secured Parties agree
that, unless and until said portion of the Glickman Proceeds
is paid to Trust B, the Obligations to Trust B remain
outstanding. The Glickmans and the
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Secured Parties agree that all of the Glickman
Proceeds constitute cash proceeds of the
Collateral and that upon the Merger, the Trust B
Security Interest in the Collateral (but not in
the proceeds of the Collateral) shall be
released and such security interest shall
continue in and attach to the Glickman Proceeds,
including without limitation the sums distributed
pursuant to this paragraph 4.3, in the same order
of priority and perfection as existed in the
Collateral immediately prior to the Merger
regardless of whether the Glickman Proceeds are
distributed outright, held in trust, or deposited
in the Interpleader Action as provided in this
paragraph 4. The Glickmans agree to execute any
documents reasonably necessary to maintain the
continuous perfection of the Trust B Security
Interest.
4.4 Fourth, the sum of $360,000, in
respect of all Obligations of the Glickmans which are
secured by the Fine Security Interest, shall be paid to
the E. Fine Trustee, for the benefit of Trust A, and the
Resolution Agent, as tenants in common, with Trust A
having a four-ninths undivided interest therein, and the
Resolution Agent having a five-ninths undivided interest
therein.
4.4.1 The Glickmans, the E. Fine
Trustee and the Resolution Agent agree that such
distribution is in full satisfaction and
discharge of any Obligations of the Glickmans to
Fine or Trust A to the extent such Obligations
were secured by the Fine Security Interest and
shall discharge the Fine Security Interest in its
entirety. The Lawyer Group, Ross and the Trust B
Parties expressly waive any claims which any of
them may have against the Distributors, the E.
Fine Trustee, Trust A or the Resolution Agent by
reason of such distributions to the E. Fine
Trustee, for the benefit of Trust A, and the
Resolution Agent.
4.4.2 The Glickmans and the
Secured Parties agree that, unless and until said
portion of the Glickman Proceeds is paid to the
Resolution Agent and the E. Fine Trustee, said
Obligations to Trust A, the E. Fine Trustee and,
as assignee of Fine, the Resolution Agent, remain
outstanding. The parties agree that all of the
Glickman Proceeds constitute cash proceeds of the
Collateral and that upon the Merger, the Fine
Security Interest in the Collateral (but not in
the proceeds of the Collateral) shall be released
and such security interest shall continue in and
attach to the Glickman Proceeds, including
without limitation the sums distributed pursuant
to this paragraph 4.4, in the same order of
priority and perfection as existed in the
Collateral immediately prior to the Merger
regardless of whether the Glickman Proceeds are
distributed outright, held in trust, or deposited
in the Interpleader Action as provided in this
paragraph 4. The Glickmans agree to execute any
documents
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reasonably necessary to maintain the continuous
perfection of the Fine Security Interest.
4.4.3 Effective only upon the
distribution as provided in this paragraph 4.4,
and except with respect to the obligations
created by or arising out of this Agreement or
the Merger Agreement or any agreements executed
in connection therewith, the Resolution Agent,
for himself and his heirs, successors, and
assigns, and each of them, on the one hand, and
the Distributors, and their respective heirs,
successors and assigns, and each of them, on the
other hand, hereby releases, absolves, remises
and forever discharges the other, and each of
them, from any and all actions and causes of
action, claims, suits, demands, debts,
obligations, liabilities, damages, dues,
accounts, bonds, covenants, contracts,
agreements, judgments, costs and expenses
whatsoever, whether known or unknown, suspected
or unsuspected, at law or in equity of every kind
and nature whatsoever, which any of them ever
had, now has, or may or could hereafter have
against the other, or any of them, by reason of
any fact, matter, cause, act or omission
whatever, existing at any time prior to or
through the date of this Agreement. Each of the
Resolution Agent and the Distributors
acknowledges that he is familiar with Section
1542 of the Civil Code of the State of
California, which provides as follows:
"A general release does not extend
to claims which the creditor does not know
or suspect to exist in his favor at the time
of executing the release, which if known
by him must have materially affected his
settlement with the debtor."
Each of the Resolution Agent and the Distributors
specifically waives the benefits of Section 1542
of the Civil Code of the State of California and
any similar provision of the laws of the State of
Georgia to the fullest extent permitted by law.
4.4.4 Effective only upon the
distribution as provided in this paragraph 4.4,
and except with respect to the obligations
created by or arising out of this Agreement or
the Merger Agreement or any agreements executed
in connection therewith, each of the E. Fine
Trustee, for himself (in said capacity only),
Trust A and their respective successors and
assigns, and each of them, in their capacities as
such, on the one hand, and the Distributors, and
their respective heirs, successors and assigns,
and each of them, on the other hand, hereby
releases, absolves, remises and forever
discharges the other, and each of them, from any
and all actions and causes of action, claims,
suits, demands,
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debts, obligations, liabilities, damages, dues,
accounts, bonds, covenants, contracts,
agreements, judgments, costs and expenses
whatsoever, whether known or unknown, suspected
or unsuspected, at law or in equity of every kind
and nature whatsoever, which any of them ever
had, now has, or may or could hereafter have
against the other, or any of them, by reason of
any fact, matter, cause, act or omission
whatever, existing at any time prior to or
through the date of this Agreement. Each of the
E. Fine Trustee and the Distributors acknowledges
that he is familiar with Section 1542 of the
Civil Code of the State of California, which
provides as follows:
"A general release does not extend
to claims which the creditor does not know
or suspect to exist in his favor at the time
of executing the release, which if known
by him must have materially affected his
settlement with the debtor."
Each of the E. Fine Trustee and the Distributors
specifically waives the benefits of Section 1542
of the Civil Code of the State of California and
any similar provision of the laws of the State of
Georgia to the fullest extent permitted by law.
4.5 Fifth, to the Lawyer Group, the sum of $750,000,
to be divided among the Lawyer Group as they shall direct, by written
notice to Crown Crafts not less than five business days prior to the
Closing. Said sum shall be distributed as hereinafter set forth in
this paragraph 4.5. The Glickmans and the Secured Parties agree that
all of the Glickman Proceeds constitute cash proceeds of the Collateral
and that upon the Merger, the First Security Interest in the Collateral
(but not in the proceeds of the Collateral) shall be released and such
security interest shall continue in and attach to the Glickman Proceeds,
including without limitation the sums distributed pursuant to this
paragraph 4.5, in the same order of priority and perfection as existed
in the Collateral immediately prior to the Merger regardless of whether
the Glickman Proceeds are distributed outright, held in trust, or
deposited in the Interpleader Action as provided in this paragraph 4.
The Glickmans agree to execute any documents reasonably necessary to
maintain the continuous perfection of the First Security Interest. As
used in this Agreement, "Adjusted Third Party Claims" shall mean the sum
of all Third Party Claims, less the amount of any Third Party Claims as
to which the Third Parties asserting such Claims acknowledge, in
writing, that their right to the Glickman Proceeds is junior to all
Consensual Liens other than the Second Security Interest and the
Consensual Lien of Ross. If the Adjusted Third Party Claims exceed the
Glickman Equity by more than $450,000, then, if any of the Distributors
commences any Interpleader Action, the Distributor commencing such
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Interpleader Action shall, concurrently therewith and to
the extent known to such Distributor, give written notice
to the Lawyer Group of the total amount of the Adjusted
Third Party Claims and the identity of each person or
entity asserting such a claim, and, if ascertainable,
whether the Lawyer Group's entitlement to the portion of
the Glickman Proceeds allocable to the First Security
Interest is contested (the "Contested Distributions").
In making such determination, the Distributor shall
assume that there will be no change in the priority of
the Consensual Liens as set forth on Schedule "3".
4.5.1 Any distributions to the
Lawyer Group which are not Contested
Distributions as defined in paragraph 4.5, above
(the "Uncontested Distributions") shall not be
subject to any restrictions or limitations, and
may be used, applied, spent or transferred by the
Lawyer Group in their sole discretion. Such
Uncontested Distributions shall discharge the
Obligations to the Lawyer Group pro tanto;
PROVIDED, HOWEVER, that the Glickmans and the
Secured Parties agree that, in the event that,
after the Closing, any member of the Lawyer Group
(hereinafter, a "Law Firm") is required to
disgorge any Uncontested Distributions, the
Obligations to said Law Firm shall be revived pro
tanto, and the Lawyer Group shall retain their
First Security Interest in all Glickman Proceeds
(other than those distributed to Consensual
Lienors senior to the Lawyer Group) as security
for the Obligations to the Lawyer Group against
any Claim by any Third Party that any of the
Lawyer Group is required to disgorge any
Uncontested Distributions.
4.5.2 As to Contested
Distributions, the Lawyer Group may elect among
any one or more of the following as to all or any
portion of the Contested Distributions. The
Glickmans authorize and direct each Law Firm to
pay or distribute any such Contested
Distributions as any court of competent
jurisdiction may direct upon a Final
Determination, and to move Contested
Distributions among or between any one or more of
the following to the extent permitted by this
Agreement, as that Law Firm may determine in its
sole discretion:
4.5.2.1 Delivery directly to
one or more of the Lawyer Group (in each
case, the "Recipient"), as payment and
in discharge, pro tanto, of the
Obligations to such Recipient. The
parties hereto agree that the Recipient
receiving any such distributions (the
"Direct Distributions") shall own such
Direct Distributions free and clear of
any claim by any other party to this
Agreement, other than, if applicable,
another of the Lawyer Group. The
Glickmans and the Secured Parties agree
that, in the event that, after the
Closing, any of the Lawyer Group is
required to disgorge any Contested or
Uncontested Distributions, the
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Obligations to said Law Firm shall
be revived pro tanto; and the Lawyer
Group shall retain their First Security
Interest in all Glickman Proceeds (other
than those distributed to Consensual
Lienors senior to the Lawyer Group) as
security for the Obligations to the
Lawyer Group against any Claim by any
Third Party that any of the Lawyer Group
is required to disgorge any Contested or
Uncontested Distributions, including any
Direct Distributions. As an
accommodation to Crown Crafts, and
without admitting any obligation to
limit its use of the Direct
Distributions, each Recipient further
agrees as follows with respect to such
Direct Distributions made to such
Recipient:
4.5.2.1.1 The Direct
Distributions distributed to the
Recipient shall be deposited in a
bank, savings and loan association,
brokerage house or other financial
institution of Recipient's choice
("Depositary Institution"), in a
segregated, interest-bearing
deposit account ("Deposit
Account"), payable upon the
Recipient's written demand.
Recipient may withdraw up to 45% of
the principal amount so deposited,
by checks payable to the IRS or
FTB, to pay bona fide taxes or
estimated taxes due on or
attributable to the Direct
Distributions.
4.5.2.1.2 Each Recipient
electing to receive Direct
Distributions shall intervene in
any pending Interpleader Action,
or, if there is none, shall
commence its own action for
declaratory relief in the Court, to
establish its right, title and
interest in and to the Direct
Distributions to such Recipient
(the "Declaratory Relief Action"),
naming as defendants in such action
any Third Party identified by Crown
Crafts or Red Calliope as having
actually asserted or indicated an
intention to assert any Adjusted
Third Party Claims.
4.5.2.1.3 Pending a Final
Determination in the Interpleader
Action or the Declaratory Relief
Action, as the case may be, by
final judgment, settlement or
otherwise, no Recipient shall
remove any of the funds from its
Deposit Account except upon order
of the Court; PROVIDED, HOWEVER,
that any Recipient may at any time
remove funds from its Deposit
Account (A) to the extent permitted
by paragraph 4.5.2.1.1, above; (B)
to deposit such funds in trust
pursuant to the provisions of
paragraph 4.5.2.2 below, in which
event the First Security Interest
in
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the Glickman Proceeds shall
continue in and attach to any funds
so deposited; or (C) to interplead
such Direct Distributions pursuant
to the provisions of paragraph
4.5.2.3, below, in which event the
First Security Interest in the
Glickman Proceeds shall continue in
and attach to any funds so
interpled.
4.5.2.2 Delivery of all or any
part of the Contested Distributions to a
Depositary Institution of such Law
Firm's choice, for deposit into a
segregated, interest-bearing trust
account maintained by such Law Firm
("Trust Account"), in trust for the
benefit of the Glickmans subject to the
First Security Interest attaching to
such deposit. The Glickmans and the
Secured Parties agree that the
Obligations to such Law Firm continue
and are not discharged or released by
the Merger or such deposit, and that the
First Security Interest, and such Law
Firm's interest therein, continues in
and attaches to the Glickman Proceeds,
including without limitation the
Glickman Proceeds in such Trust Account
(the "Proceeds Held in Trust"). Such
Law Firm shall thereupon intervene in
any pending Interpleader Action or shall
commence a Declaratory Relief Action, as
provided in paragraph 4.5.2.1.2, above.
Pending a Final Determination, by final
judgment, settlement or otherwise, in
such Interpleader Action or Declaratory
Relief Action, as the case may be, as to
the rights of such Law Firm, the Law
Firm shall not remove or allow to be
removed any Proceeds Held in Trust from
such Trust Account except upon order of
the Court; PROVIDED, HOWEVER, that such
Law Firm may at any time remove Proceeds
Held in Trust from such Trust Account
for the purpose of (A) transferring such
Proceeds Held in Trust to a Deposit
Account to become Direct Distributions
subject to the provisions of paragraph
4.5.2.1, above; or (B) interpleading
such Proceeds Held in Trust pursuant to
the provisions of paragraph 4.5.2.3,
below. The First Security Interest in
the Glickman Proceeds shall continue in
and attach to any funds so deposited or
interpled.
4.5.2.3 Interplead some or all
of the Contested Distributions in the
Interpleader Action, subject to the
First Security Interest. Nothing
contained herein shall require a Secured
Party which has elected to interplead
Contested Distributions to disclaim any
interest in such Contested
Distributions, or to waive any security
interest which attaches to such
Contested Distributions. The Glickmans
and the Secured Parties agree that such
interpleaded funds constitute cash
proceeds of the Collateral
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and that upon the Merger and the
interpleading of such funds, the First
Security Interest in the Collateral (but
not in the proceeds of the Collateral)
shall be released and such security
interest shall continue in and attach to
the Glickman Proceeds, including without
limitation the sums interpled pursuant
to this paragraph 4.5.2.3, in the same
order of priority and perfection as
existed in the Collateral immediately
prior to the Merger regardless of
whether the Glickman Proceeds are
distributed outright, held in trust, or
deposited in the Interpleader Action as
provided in this paragraph 4. As to any
Contested Distributions interpleaded by
or at the request of any Law Firm, such
Law Firm shall be exonerated from any
and all liability to any other party
hereto to the extent of the Contested
Distributions so interpled.
4.6 Sixth, in respect of the $350,000
Obligation to Chaleff & English.
4.6.1 If no Third Party asserts a
Claim with respect to the validity or priority of
said Obligation or the Second Security Interest,
and if the total of all Third Party Claims is
less than the sum of the Second Security
Interest, plus the Consensual Liens junior to the
Second Security Interest, plus the Glickman
Equity, then Glickman Proceeds shall be
distributed to Chaleff & English in satisfaction
of the Obligations secured by the Second Security
Interest until (A) the sum of $350,000 has been
distributed; or (B) the total of the Third Party
Claims is equal to the sum of the unsatisfied
portion of the Second Security Interest plus the
Consensual Liens junior to the Second Security
Interest plus the Glickman Equity, whichever
shall first occur; PROVIDED, HOWEVER, that Crown
Crafts shall interplead pursuant to paragraph
4.5.2.3, above, any amount otherwise
distributable to Chaleff & English pursuant to
this paragraph 4.6.1 if and to the extent a Third
Party asserts any Claim with respect thereto. As
to all Glickman Proceeds received by Chaleff &
English pursuant to this paragraph 4.6.1, the
Glickmans and Chaleff & English agree that such
distribution is in satisfaction of and discharges
pro tanto the Obligations of the Glickmans to
Chaleff & English which are secured by the Second
Security Interest; PROVIDED, HOWEVER, that the
Glickmans and the Secured Parties agree that, in
the event that, after the Closing, Chaleff &
English is required to disgorge any Glickman
Proceeds distributed to it, the Obligations to
Chaleff & English shall be revived pro tanto, and
Chaleff & English shall retain the Second
Security Interest in all Glickman Proceeds (other
than those distributed to Consensual Lienors
senior to Chaleff & English), if and to the
extent valid, as security for the
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Obligations to Chaleff & English against any
Claim by any Third Party that Chaleff & English
is required to disgorge any Glickman Proceeds.
4.6.2 The parties hereto
acknowledge that one or more of the Glickmans may
hereafter become obligated to Chaleff & English
in additional amounts, and that Chaleff & English
claim that the Second Security Interest secures
all such obligations in addition to the
Obligations already owing; and that upon the
Merger, the Second Security Interest in the
Collateral (but not the proceeds of the
Collateral) shall be released and such security
interest, if and to the extent valid, shall
continue in and attach to the Glickman Proceeds,
including without limitation the sums distributed
pursuant to this paragraph 4.6, in the same order
of priority and perfection as existed in the
Collateral immediately prior to the Merger. The
Glickmans agree to execute any documents
reasonably necessary to maintain the continuous
perfection of the Second Security Interest.
Nothing contained herein shall limit the right of
the Resolution Agent to contest the validity or
priority of the Second Security Interest, except
that the Resolution Agent expressly waives the
right to contend that the Merger or any of the
other transactions contemplated hereby affect the
validity, priority or perfection of the Second
Security Interest, or that, if such Second
Security Interest was valid and subsisting as to
the Collateral immediately prior to the Merger,
it is not valid and subsisting as to the Glickman
Proceeds.
4.7 Seventh, in respect of the $100,000
Obligation to Ross.
4.7.1 If no Third Party asserts a
Claim with respect to the validity or priority of
said Obligation or the Consensual Lien of Ross
(the "Ross Security Interest"), and if the total
of all Third Party Claims is less than the sum of
the Ross Security Interest, plus the Consensual
Liens junior to the Ross Security Interest, plus
the Glickman Equity, then Glickman Proceeds shall
be distributed to Ross in satisfaction of the
Obligations secured by the Ross Security Interest
until (A) the sum of $100,000 has been
distributed; or (B) the total of the Third Party
Claims is equal to the sum of the unsatisfied
portion of the Ross Security Interest plus the
Consensual Liens junior to the Ross Security
Interest plus the Glickman Equity, whichever
shall first occur; PROVIDED, HOWEVER, that Crown
Crafts shall interplead pursuant to paragraph
4.5.2.3, above, any amount otherwise
distributable to Ross hereunder if and to the
extent a Third Party asserts any Claim with
respect thereto. As to all Glickman Proceeds
received by Ross pursuant to this paragraph
4.7.1, the Glickmans and Ross agree that such
distribution is in satisfaction of and discharges
pro tanto the Obligations of the Glickmans to
Ross which
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are secured by the Ross Security Interest;
PROVIDED, HOWEVER, that the Glickmans and the
Secured Parties agree that, in the event that,
after the Closing, Ross is required to disgorge
any Glickman Proceeds distributed to it, the
Obligations to Ross shall be revived pro tanto,
and Ross shall retain the Ross Security Interest
in all Glickman Proceeds (other than those
distributed to other Consensual Lienors), if and
to the extent valid, as security for the
Obligations to Ross against any Claim by any
Third Party that Ross is required to disgorge any
Glickman Proceeds.
4.7.2 The parties hereto
acknowledge that one or more of the
Glickmans may hereafter become obligated
to Ross in additional amounts, and that
Ross claims that the Ross Security
Interest secures all such obligations in
addition to the Obligations already
owing; and that upon the Merger, the
Ross Security Interest in the Collateral
(but not the proceeds of the Collateral)
shall be released and such security
interest, if and to the extent valid,
shall continue in and attach to the
Glickman Proceeds, including without
limitation the sums distributed pursuant
to this paragraph 4.7, in the same order
of priority and perfection as existed in
the Collateral immediately prior to the
Merger. The Glickmans agree to execute
any documents reasonably necessary to
maintain the continuous perfection of
the Ross Security Interest. Nothing
contained herein shall limit the right
of the Resolution Agent to contest the
validity or priority of the Ross
Security Interest, except that the
Resolution Agent expressly waives the
right to contend that the Merger or any
of the other transactions contemplated
hereby affect the validity, priority or
perfection of the Ross Security
Interest, or that, if such Ross Security
Interest was valid and subsisting as to
the Collateral immediately prior to the
Merger, it is not valid and subsisting
as to the Glickman Proceeds.
4.8 Lastly, if there are no Third Party
Claims asserted prior to the Closing, the Glickman Equity
shall be distributed to the Glickmans as they may direct
in writing not less than five business days prior to the
Closing. If there are any Third Party Claims asserted
prior to the Closing, then Crown Crafts shall interplead
the Glickman Proceeds in the Interpleader Action in an
amount equal to the lesser of: (i) the Third Party
Claims; or (ii) the sum of the Glickman Equity plus
$450,000.
5. Each of the Lawyer Group, MSK and Ross
respectively agrees, severally but not jointly, to indemnify and
hold harmless the Distributors from and against any suit, action
or proceeding, or any damage or loss resulting therefrom
(including without limitation from and against actual costs and
reasonable attorneys'
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fees incurred in connection with the defense of such suit, action
or proceeding), solely with respect to the Glickman Proceeds
distributed to MSK, Ross or such Law Firm, as the case may be,
brought against any of the Distributors by any Third Party,
asserting that a payment, in the case of MSK or Ross or, as to
the Lawyer Group, a Direct Distribution to such Law Firm, or the
delivery of Proceeds Held in Trust to such Law Firm, was wrongful
or otherwise not permitted by reason of such Third Party's Claim;
PROVIDED, HOWEVER, that (i) such indemnification shall be limited
to $182,228.78 plus simple interest at seven percent (7%) per
annum ("Interest") in the case of MSK, or, as to Ross, to the
amount of any payment made to Ross, plus Interest, or, as to any
Law Firm, to the amount of any Direct Distributions received by
such Law Firm, plus any Proceeds Held in Trust delivered to such
Law Firm, less any such Direct Distributions or Proceeds Held in
Trust remitted by such Law Firm to Crown Crafts or to any Third
Party upon a Final Determination of the Court or upon a good-
faith settlement of any claim in the Interpleader Action or the
Declaratory Relief Action, or interpleaded by such Law Firm in
the Interpleader Action, plus Interest; (ii) such Law Firm shall
be entitled to conduct the defense of the Distributors in
connection with any such suit, action or proceeding, as to claims
relating to distributions to or for the benefit of such Law Firm,
and may conduct such defense, including without limitation, in
the Interpleader Action or the Declaratory Relief Action, at its
own expense, by itself or by other counsel selected in its
reasonable discretion and approved by Crown Crafts, which
approval shall not unreasonably be withheld or delayed; and (iii)
the Distributors shall not settle any such suit, action or
proceeding without the written consent of any Law Firm affected
thereby, which consent shall not unreasonably be withheld or
delayed. If a Law Firm elects to interplead all Glickman
Proceeds distributable to it pursuant to paragraph 4.5.2.3,
above, then it shall be exonerated and discharged from any
obligations pursuant to this paragraph 5, except as to attorneys'
fees and costs incurred by any Distributor in the defense of any
suit, action or proceeding relating to or arising from any Direct
Distributions to that Law Firm, which attorneys' fees or costs
were incurred prior to interpleading such Direct Distributions.
6. Carol Glickman, for herself and not in
any other capacity, agrees to indemnify and hold harmless the
Distributors from and against any suit, action or proceeding or
any damage or loss resulting therefrom, including without
limitation from and against actual costs and reasonable
attorneys' fees incurred in connection with the defense of such
suit, action or proceeding, brought against Crown Crafts by any
Third Party, asserting that a Direct Distribution to one or more
of the Lawyer Group was wrongful or otherwise not permitted by
reason of such Third Party's Claim. Such indemnification shall
be subject to the following terms and conditions:
6.1 The foregoing indemnification shall
be without recourse except as to amounts in excess of
$750 per month payable by Red Calliope to Carol Glickman
pursuant to that certain Consulting Agreement between Red
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Calliope and Carol Glickman to be executed at Closing
substantially in the form of Exhibit A to the Merger
Agreement (the "Consulting Agreement").
6.2 The foregoing indemnification shall
be solely with respect to the portion of any Direct
Distributions which are withdrawn by the Recipient from
the Deposit Account as provided in paragraph 4.5.2.1.1,
above, and shall be reduced to the extent such Direct
Distributions are (i) returned to the Deposit Account,
with interest thereon at the rates earned in the Deposit
Account; (ii) returned or paid to Crown Crafts or
interpleaded in the Interpleader Action; or (iii) paid
to a Third Party on account of a Claim, either pursuant
to a Final Determination of the Court or pursuant to a
good faith settlement.
6.3 Carol Glickman shall have no
obligation pursuant to said indemnity unless and until
the Law Firm whose Direct Distributions gave rise to such
indemnity obligation shall have failed to reimburse Crown
Crafts or Red Calliope for an out-of-pocket loss of Crown
Crafts or Red Calliope, as the case may be, after fifteen
days' written notice to such Law Firm and to Carol
Glickman; and Crown Crafts or Red Calliope, as the case
may be, shall have given fifteen days' written notice to
Carol Glickman of such failure to reimburse Crown Crafts,
and neither such Law Firm nor Carol Glickman shall have
cured such failure.
6.4 To secure Carol Glickman's
performance hereunder, Carol Glickman hereby grants the
Distributors a first security interest in the amounts in
excess of $750 per month payable to her pursuant to the
Consulting Agreement (the "Secured Portion"). In
connection therewith, Carol Glickman further agrees as
follows:
6.4.1 Carol Glickman shall
execute such documents as the Distributors may
reasonably require to perfect their security
interest in the Secured Portion.
6.4.2 In the event there are
Third Party Claims asserting that the Direct
Distributions were wrongful as to such Third
Party, Red Calliope is hereby directed and
authorized to withhold payment of the Secured
Portion to Carol Glickman, and to deposit such
payments into an interest bearing deposit account
in the names of Carol Glickman and Crown Crafts,
until the amount in said deposit account equals
the lesser of (A) such Third Party Claims or (B)
the total of all Direct Distributions which were
withdrawn by the Recipients from Deposit
Accounts, with interest thereon.
6.4.3 Crown Crafts and Red
Calliope agree to release their interest in said
withheld payments and in the deposit account into
which
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they were placed, and to release their security
interest in the Secured Portion and any proceeds
thereof, and to execute all documents reasonably
required to effect such releases, upon the first
to occur of: (A) the resolution of all
Declaratory Relief Actions, and the return, to
Crown Crafts or any Third Parties entitled
thereto, of any Direct Distributions determined
to have been wrongfully paid, if any; (B) the
exhaustion of all indemnification obligations of
all of the Lawyer Group pursuant to paragraph 5,
above; or (C) the reduction of the amount of such
indemnification to zero pursuant to paragraph
6.2, above.
7. Except with respect to the obligations
created by or arising out of this Agreement, the Lawyer Group,
MSK, the Resolution Agent, the E. Fine Trustee (in his capacity
as such), each of the Trust B Parties (but only to the extent
such Trust B Party is a trustee of Trust B, and only in his
capacity as such) and Ross (collectively, the "Covenanting
Parties") covenant not to commence any suit, action or
proceeding, at law or in equity, against any of the Distributors
by reason of anything relating to or arising out of the Merger,
the Collateral or the Covenanting Parties' right to all or any
part of the Glickman Proceeds. Without in any way limiting the
generality of the foregoing, the Covenanting Parties covenant not
to commence any suit, action or proceeding, at law or in equity,
against any of the Distributors by reason of any of the
following:
7.1 To the extent permitted by the
Merger Agreement or this Agreement, the commencement of
the Interpleader Action or the delivery of any or all of
the Glickman Proceeds to the Court or to the Depositary
Institution in lieu of payment to any of the Covenanting
Parties;
7.2 Any disputes among the Covenanting
Parties, or between any Covenanting Party and any person
or entity not a party hereto with respect to such
Covenanting Parties' interest in or entitlement to the
Glickman Proceeds, including without limitation with
respect to the amount, validity or priority of the
Covenanting Parties' respective security interests; or
7.3 If any person or entity other than
one of the Distributors defeats or subordinates a
Covenanting Party's interest in the Glickman Proceeds, in
whole or in part, the fact that the Obligations to such
Covenanting Party were not paid in full out of the
Glickman Proceeds.
8. If, after the Closing, any person or
entity commences any suit, action or proceeding against any of
the Distributors with respect to the payment of all or any part
of the Glickman Proceeds to MSK, the Resolution Agent or any of
the Lawyer Group pursuant to paragraph 4, above, MSK, the
Resolution Agent and each of the Law Firms respectively agree,
severally but not jointly, to indemnify and hold harmless each of
the Distributors from and against any such suit, action or
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proceeding, or any damage or loss resulting therefrom (including
without limitation from and against actual costs and reasonable
attorneys' fees incurred in connection with the defense of such
suit, action or proceeding), solely with respect to the Glickman
Proceeds distributed to MSK or such Law Firm, as the case may be;
PROVIDED, HOWEVER, that (i) such indemnification shall be limited
to $182,228.78 in the case of MSK, shall be limited to $200,000
in the case of the Resolution Agent, and, as to any Law Firm,
shall be limited to the amount of any Direct Distributions
received by such Law Firm, plus any Proceeds Held in Trust
delivered to such Law Firm, less any such Direct Distributions or
Proceeds Held in Trust remitted by such Law Firm to Crown Crafts
or to any Third Party upon a Final Determination of the Court or
upon a good-faith settlement of any claim in the Interpleader
Action or the Declaratory Relief Action, or interpleaded by such
Law Firm in the Interpleader Action; (ii) such Law Firm shall be
entitled to conduct the defense of the Distributors in connection
with any such suit, action or proceeding, as to claims relating
to distributions to or for the benefit of such Law Firm, and may
conduct such defense, including without limitation, in the
Interpleader Action or the Declaratory Relief Action, at its own
expense, by itself or by other counsel selected in its reasonable
discretion and approved by Crown Crafts, which approval shall not
unreasonably be withheld or delayed; and (iii) the Distributors
shall not settle any such suit, action or proceeding without the
written consent of any Law Firm affected thereby, which consent
shall not unreasonably be withheld or delayed. If a Law Firm
elects to interplead all Glickman Proceeds distributable to it
pursuant to paragraph 4.5.2.3, above, then it shall be exonerated
and discharged from any obligations pursuant to this paragraph 8,
except as to attorneys' fees and costs incurred by the
Distributors in the defense of any suit, action or proceeding
relating to or arising from any Direct Distributions to that Law
Firm, which attorneys' fees or costs were incurred prior to
interpleading such Direct Distributions.
9. The Glickmans warrant and represent that
there are no consensual liens or consensual security interests in
or to the Collateral or the Securities other than the Consensual
Liens, and that, between the execution hereof and the Closing,
they shall not voluntarily cause any other consensual liens or
consensual security interests to be granted in or to the
Collateral or the Securities, without the prior written consent
of Crown Crafts and the Resolution Agent; PROVIDED, HOWEVER, that
in the event there is a threat of any additional involuntary
liens being placed against any of the Collateral, the Glickmans
may grant, create, or assist in granting or creating, additional
liens in favor of the IRS or the FTB with respect to 1995 taxes
or estimated taxes payable by the Glickmans. Nothing contained
herein shall preclude the Glickmans from responding to requests,
notices, conduct or actions initiated by the IRS or the FTB.
10. MSK warrants and represents, without any
duty of investigation, that, as of the date hereof, it is not
aware of any liens or security interests in, to or against the
Collateral or the Securities other than the Consensual Liens.
MSK agrees
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that if, prior to the Closing, it becomes aware of any such liens
or security interests other than the Consensual Liens, it will
give written notice thereof within three business days to Crown
Crafts, Red Calliope, the Lawyer Group and the Resolution Agent.
11. Each of MSK and Kopple agrees, severally
but not jointly, that neither it nor, in the case of MSK, any
partner of MSK, shall assert any claim that either the Merger
Agreement or this Agreement constitutes a settlement as between
the Resolution Agent and any of the Glickmans, or that the
provisions of Franklin v. Kaypro Corp., 884 F.2d 1222 (9th Cir.
1989), cert. denied, 498 U.S. 890 (1990) ("Kaypro"), apply to the
Merger Agreement or this Agreement. In consideration thereof,
the Resolution Agent agrees that, as to any Glickman Proceeds
actually received by any PMC-Related Entity (other than the
portion of the Glickman Proceeds distributable to the Resolution
Agent pursuant to paragraph 4.4, above), or hereafter attached by
or subjected to a lien in favor of any PMC-Related Entity, in his
capacity as such, and as to which such PMC-Related Entity, in his
capacity as such, has obtained a judgment against Stanley
Glickman, MSK and Kopple shall receive dollar-for-dollar credit
therefor against any judgment against either or both of them in
any pending or future litigation against either of them brought
by the Resolution Agent or the additional signatories on page 24
hereof. For purposes of this paragraph 11, a "PMC-Related
Entity" shall mean and include any of: the Resolution Agent, in
his capacity as such, the class of plaintiffs approved for
purposes of settlement in Karatz, et al. v. Fine, et al., Case
No. CV-92-2172-WJR, in the United States District Court for the
Central District of California (the "Class"), any member of the
Class, in any capacity which causes him to be a member of the
Class, the "New Committee" in the Chapter 11 cases of Property
Mortgage Co., Inc. ("PMC") and SLGH Investments, Inc. ("SLGH"),
any creditor of the estates of PMC or SLGH, in his capacity as
such, or any named plaintiff in any of the following cases (the
"Investor Actions") pending in Los Angeles Superior Court
("LASC") or United States District Court for the Central District
of California ("USDC"): Carmel, et al. v. Glickman, et al., LASC
Case No. BC 090898, Altman, et al. v. Glickman, et al., LASC Case
No. BC 094624, Bass, et al. v. Glickman, et al., LASC Case No. BC
098540, Friedman, et al. v. Glickman, et al., LASC Case No. BC
103971, Abrams, et al. v. Glickman, et al., LASC Case No. BC
098875, Berman, et al. v. Glickman, et al., LASC Case No. BC
129453, Karatz, et al. v. Fine, et al., USDC Case No. CV-92-2172-
WJR, Gore, et al. v. Groman, et al., LASC Case No. BC 098664.
MSK and Kopple reserve the right to assert that any agreement
(other than this Agreement, the Merger Agreement, or any other
agreements executed in connection with the Merger) should be
treated as a settlement with the Glickmans and/or should be
subject to the provisions of Kaypro, and the Resolution Agent and
counsel for the plaintiffs in the Investor Actions reserve the
right to assert otherwise. The provisions of this paragraph
shall be of no force or effect unless counsel for the plaintiffs
in the Investor Actions signs this Agreement as provided on page
24 hereof.
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12. This Agreement shall be governed,
construed, interpreted and enforced by the laws of the State of
California without regard to choice of law provisions.
13. In the event of any suit, action or
proceeding between or among any parties hereto relating to or
arising out of this Agreement or the transaction contemplated
hereby, the prevailing party in such suit, action or proceeding
shall be entitled to recover its actual costs and reasonable
attorneys' fees incurred therein; PROVIDED, HOWEVER, that the
foregoing shall not affect the rules and procedures governing
costs and attorneys' fees in interpleader actions, provided
that such interpleader action was permitted by the Merger
Agreement or this Agreement.
14. All notices or other communications
required or permitted to be given to any party hereunder shall be
in writing (except as otherwise provided herein) and shall be
deemed duly given when received by delivery in person, by
telecopy, telex or telegram or by certified mail, postage
prepaid, or by an overnight courier service, addressed to such
party at its address set forth on the signature page hereof.
15. This Agreement, together with the
documents expressly referred to herein, constitute the entire
agreement between the parties hereto with respect to the subject
matter contained herein and supersede all prior agreements and
understandings among the parties with respect to such subject
matter.
16. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective
heirs, successors, assigns and personal representatives, but
neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any of the parties
hereto without the prior written consent of the other parties.
17. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an
original and all of which together shall constitute one and the
same document.
18. Any term or provision of this Agreement
which is invalid or unenforceable in any jurisdiction shall, as
to such jurisdiction, be ineffective to the extent of such
invalidity or unenforceability without rendering invalid or
unenforceable the remaining terms and provisions of this
Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, such provision
shall be interpreted to be only so broad as is enforceable.
19. Each party hereto shall execute and
deliver such additional documents as may be necessary or
desirable to consummate the transactions contemplated by this
Agreement.
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20. This Agreement may be amended, modified
and supplemented only by a written document executed by all of
the parties hereto.
21. Whenever used in this Agreement, any
noun or pronoun shall be deemed to include both the singular and
the plural and to cover all genders.
22. Each individual signing this Agreement,
and any other documents executed in connection with this
Agreement, whether signed individually or on behalf of any person
or entity, warrants and represents that he or she has full
authority to so execute the Agreement on behalf of the party or
parties on whose behalf he or she so signs.
REST OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGE FOLLOWS IMMEDIATELY HEREAFTER
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IN WITNESS WHEREOF, the parties have executed and
delivered this Agreement as of the date first set forth above.
LEONARD, DICKER & SCHREIBER
By:
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Its:
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Address:
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KOPPLE & KLINGER
By:
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Its:
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Address:
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STUTMAN, TREISTER & GLATT
By:
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Its:
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Address:
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CHALEFF & ENGLISH
By:
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Its:
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Address:
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THE RED CALLIOPE AND ASSOCIATES, INC.
By:
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Its:
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Address:
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NEAL FOHRMAN, as Voting Trustee pursuant
to that certain Voting Trust Agreement
dated as of February 13, 1992 [sic]
Address:
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STANLEY GLICKMAN, individually, as
Trustee of the Glickman Family Trust and
as a general partner of the Glickman
Family Investment Partnership
Address:
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CAROL GLICKMAN, individually, as Trustee
of the Glickman Family Trust and as a
general partner of the Glickman Family
Investment Partnership
Address:
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CROWN CRAFTS, INC.
By:
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Its:
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Address:
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CC ACQUISITION CORP.
By:
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Its:
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Address:
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MITCHELL SILBERBERG & KNUPP
By:
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Its:
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Address:
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R. TODD NIELSON, in his capacity as
Resolution Agent of Reorganized Property
Mortgage Co., Inc.
Address:
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25
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ROBERT MANN, in his capacity as
Trustee of Elliot Fine Trust A
Address:
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ROSS, SACKS & GLAZIER
By:
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Its:
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Address:
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ROBERT C. KOPPLE, A PROFESSIONAL
CORPORATION
By:
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Its:
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Address:
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ROBERT C. KOPPLE, an individual
Address:
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THE TRUST B PARTIES, to the extent,
if any, they have the capacity to
act on behalf of Trust B:
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ROBERT MANN
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STANLEY GLICKMAN
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CAROL GLICKMAN
Agreed to for purposes of Paragraph 11 only.
The named plaintiffs in the following actions:
Carmel, et al. v. Glickman, et al., LASC Case No. BC 090898
Altman, et al. v. Glickman, et al., LASC Case No. BC 094624
Bass, et al. v. Glickman, et al., LASC Case No. BC 098540
Friedman, et al. v. Glickman, et al., LASC Case No. BC 103971
Abrams, et al. v. Glickman, et al., LASC Case No. BC 098875
Berman, et al. v. Glickman, et al., LASC Case No. BC 129453
Karatz, et al. v. Fine, et al., USDC Case No. CV-92-2172-WJR
Gore, et al. v. Groman, et al., LASC Case No. BC 098664
By Strange & Hoey, their counsel
By
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Brian Strange
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