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EXHIBIT (C)(10)
TABLE OF CONTENTS
PURCHASE AGREEMENT
ARTICLE I
PURCHASE OF PREFERRED STOCK; EXCHANGE
OF COMMON STOCK; CONVERSION OF OPTIONS
1.1 Preferred Stock to be Sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2 Exchange of Common Stock; Receipt of Options. . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.3 Rollover of Certain Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.4 Closing Deliveries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.5 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF HOLDINGS
2.1 Organization of Holdings and Sub . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.2 Capital Structure of Holdings and Sub . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.3 Authority; No Conflict; Required Filings and Consents . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF JWC
3.1 Organization of JWC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.2 Authority; No Conflict; Required Filings and Consents . . . . . . . . . . . . . . . . . . . . . . 8
3.3 Authorization of Representative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.4 Acquisition of Shares for Investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF THE CONTINUING SHAREHOLDERS,
THE OTHER OPTION HOLDERS AND THE BORROWERS
4.1 Authority; No Conflict; Required Filings and Consents . . . . . . . . . . . . . . . . . . . . . . 10
4.2 Acquisition of Shares of Holdings Common and
Holdings Options for Investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.3 Title to Shares of Jillian's Common . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
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ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE CONTINUING
OPTION HOLDERS AND THE CONTINUING WARRANT HOLDERS
5.1 Authority; No Conflict; Required Filings and
Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
5.2 Acquisition of Holdings Management Options and Holdings Warrants for Investment . . . . . . . . . 14
5.3 Title to Jillian's Management Options and Jillian's Warrants . . . . . . . . . . . . . . . . . . . 15
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF JILLIAN'S
6.1 Organization of Jillian's . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
6.2 Authority; No Conflict; Required Filings and Consents . . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE VII
COVENANTS
7.1 Legal Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
7.2 Consents and Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
7.3 Reasonable Efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
7.4 JWC Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
7.5 Continuing Shareholder Agreements; Other Option Holder Agreements . . . . . . . . . . . . . . . . 18
7.6 Continuing Option Holder Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
7.7 Holdings Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
7.8 Debt Instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
7.9 No Solicitation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
7.10 Continuing Warrant Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE VIII
CONDITIONS TO OBLIGATIONS OF THE PARTIES
8.1 Conditions to Each Party's Obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
8.2 Additional Conditions to Obligations of Holdings and JWC . . . . . . . . . . . . . . . . . . . . . 21
8.3 Additional Conditions to Obligations of Jillian's, the Continuing Shareholders, the
Other Option Holders, the Continuing Option Holders, the Borrowers and the Continuing
Warrant Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
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ARTICLE IX
TERMINATION
9.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
9.2 Effect of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
ARTICLE X
SURVIVAL
10.1 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
ARTICLE XI
MISCELLANEOUS
11.1 Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
11.2 Extension; Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
11.3 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
11.4 Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
11.5 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
11.6 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
11.7 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
11.8 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
11.9 Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Schedule 1 Continuing Shareholders; Other Option Holders
Schedule 2 Continuing Option Holders
Schedule 3 Continuing Warrant Holders
Exhibit A Form of Holdings Option
Exhibit B Form of Holdings Warrant
Exhibit C Form of IP Promissory Note
Exhibit D Form of ▇▇▇▇▇▇ Promissory Note
Exhibit E Form of ▇▇▇▇ Promissory Note
Exhibit F Matters to be Covered by Opinion of Counsel to Continuing Shareholders
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PURCHASE AGREEMENT
by and among
JILLIAN'S ENTERTAINMENT HOLDINGS, INC.,
▇.▇. CHILDS EQUITY PARTNERS, L.P.
and
THE OTHER SIGNATORIES HERETO
dated as of May [ ], 1997
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PURCHASE AGREEMENT
This Purchase Agreement (this "Agreement") is made and entered into
as of this [ ] day of May, 1997 by and among Jillian's Entertainment Holdings,
Inc., a Delaware corporation ("Holdings"), ▇.▇. Childs Equity Partners, L.P., a
Delaware limited partnership ("JWC"), ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ (the "Representative"),
as representative of, and attorney-in-fact for, certain related persons or
entities of JWC (the "Group", and together with JWC, the "JWC Group"),
Jillian's Entertainment Corporation, a Florida corporation ("Jillian's"), those
persons listed as Continuing Shareholders on the signature pages hereto (the
"Continuing Shareholders"), those persons listed as Other Option Holders on the
signature pages hereto ("Other Option Holders"), those persons listed as
Continuing Option Holders on the signature pages hereto (the "Continuing Option
Holders"), those persons listed as Borrowers on the signature pages hereto (the
"Borrowers") and those persons listed as Continuing Warrant Holders on the
signature pages hereto (the "Continuing Warrant Holders").
WHEREAS, Holdings, Jillian's Entertainment Acquisition Corporation, a
Florida corporation and a wholly owned subsidiary of Holdings ("Sub"), and
Jillian's are executing, simultaneously with the execution of this Agreement,
an Agreement and Plan of Merger (the "Merger Agreement") whereby, at the
Effective Time (as defined therein), Sub will merge with and into Jillian's
with Jillian's becoming a wholly owned subsidiary of Holdings;
WHEREAS, in order to induce Jillian's to enter into the Merger
Agreement the parties hereto have agreed to enter into this Agreement; and
WHEREAS, pursuant to the terms of the Merger Agreement, it is a
condition of the obligations of the parties thereto that the transactions
contemplated by this Agreement shall have been consummated prior to the
Effective Time;
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants, agreements and conditions hereinafter
set forth,
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and for other good and valuable consideration, and intending to be legally
bound hereby, the parties hereto agree as follows:
ARTICLE I
PURCHASE OF PREFERRED STOCK; EXCHANGE
OF COMMON STOCK; TREATMENT OF OPTIONS
1.1 Preferred Stock to be Sold. Upon the terms and subject to the
conditions contained herein, at the Closing (as hereinafter defined), Holdings
shall sell and transfer to the JWC Group, and the JWC Group shall purchase and
accept from Holdings, 12,872,774 shares of Series A 12% Cumulative Convertible
Accruing Pay-In-Kind Preferred Stock, par value $.001 per share, of Holdings
(the "Preferred Stock"). The purchase price for the Preferred Stock, payable
by the JWC Group to Holdings, in immediately available funds, at the Closing,
is $12,000,000.
1.2 Exchange of Common Stock; Receipt of Options. Upon the terms
and subject to the conditions contained herein, at the Closing, (i) each of the
Continuing Shareholders shall transfer to Holdings all of the shares of common
stock, $.001 par value per share, of Jillian's ("Jillian's Common") owned by
such Continuing Shareholder (as set forth on Schedule 1 hereto) and Holdings
shall accept such shares of Jillian's Common and issue to each of the
Continuing Shareholders shares of common stock, par value $.001 per share, of
Holdings ("Holdings Common") and options to purchase shares of Holdings Common,
substantially in the form of Exhibit A hereto ("Holdings Options"), as set
forth on Schedule 1 hereto and (ii) Holdings shall issue to each of the Other
Option Holders Holdings Options, as set forth on Schedule 1 hereto. After the
Effective Time, each Holdings Option shall be exercisable upon the terms and
conditions set forth in the Holdings 1997 Non-Qualified Stock Option Plan,
substantially in the form of Exhibit C to the Merger Agreement (the "Holdings
Stock Option Plan").
1.3 Rollover of Certain Options. Upon the terms and subject to the
conditions contained herein, at the Closing, each of the Continuing Option
Holders shall
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deliver to Holdings each option owned by such Continuing Option Holder (whether
or not then vested or exercisable) to purchase shares of Jillian's Common (a
"Jillian's Management Option") granted under the Consolidated Stock Option
Plan, the 1994 Director, Adviser and Key Employee Stock Option Plan or the 1995
Director, Adviser and Key Employee Stock Option Plan, (collectively, the
"Jillian's Stock Option Plans"), and Holdings shall accept such Jillian's
Management Options and issue to each of the Continuing Option Holders options
to purchase shares of Holdings Common, substantially in the form of Exhibit D
to the Merger Agreement ("Holdings Management Options"), as set forth on
Schedule 2 hereto. Each Holdings Management Option will be exercisable for a
number of shares of Holdings Common equal to the number of shares of Jillian's
Common subject to the Jillian's Management Option for which it was exchanged,
at an exercise price equal to the exercise price per share of such Jillian's
Management Option. After the Effective Time, each Jillian's Management Option
shall be cancelled, and each Holdings Management Option shall be exercisable
upon the terms and conditions set forth in the Holdings Stock Option Plan.
1.4 Closing Deliveries. At the Closing, (a) the JWC Group shall
deliver to Holdings, by wire transfer of immediately available funds pursuant
to the instructions of Holdings, $12,000,000, (b) Holdings shall deliver to the
JWC Group certificates evidencing 12,872,774 shares of Preferred Stock, (c) the
Continuing Shareholders shall each deliver to Holdings certificates
representing the shares of Jillian's Common owned by such Continuing
Shareholder, duly endorsed in blank or accompanied by appropriate stock powers
duly executed in blank, in proper form for transfer and with all requisite
stock transfer stamps, if any, attached or provided for, (d) Holdings shall
deliver to each of the Continuing Shareholders a certificate or certificates
evidencing shares of Holdings Common and Holdings Options as set forth on
Schedule 1 hereto, (e) Holdings shall deliver to each of the Other Option
Holders Holdings Options as set forth on Schedule 1 hereto, (f) the Continuing
Option Holders shall each deliver to Holdings the Jillian's Management Options
owned by such Continuing Option Holder, (g) Holdings shall deliver to each of
the Continuing Option Holders Holdings Management Options as set forth on
Schedule 2 hereto and (h) the parties shall deliver such other instruments or
documents as may be reasonably
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necessary to carry out the transactions contemplated by this Agreement and to
comply with the terms hereof.
1.5 Closing. Subject to Article VII, the closing of the
transactions contemplated by this Agreement (the "Closing") shall take place
immediately prior to the Effective Time, on the later of (a) June 13, 1997 or
(b) the first business day after satisfaction or waiver of the latest to occur
of the conditions set forth in Article VII, at the offices of Skadden, Arps,
Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, One Beacon Street, Boston, Massachusetts or on such
other date, or at such other time or place, as is agreed to in writing by JWC
and Jillian's. The date on which the Closing shall occur is referred to herein
as the "Closing Date."
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF HOLDINGS
Holdings hereby represents and warrants to Jillian's, the Continuing
Shareholders and the Borrowers with respect to Sections 2.1 through 2.3 and to
the Other Option Holders, the Continuing Option Holders and the Continuing
Warrant Holders with respect to Sections 2.1 through 2.3, except Section
2.2(d), as follows:
2.1 Organization of Holdings and Sub. Each of Holdings and Sub is
a corporation duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation, has all requisite corporate
power to own, lease and operate its property and to carry on its business as
now being conducted and is duly qualified or licensed to do business and is in
good standing as a foreign corporation in each jurisdiction in which the
failure to be so qualified or licensed would have or result in a material
adverse effect on the prospects, business, assets (including intangible
assets), properties, liabilities, results of operations or condition (financial
or otherwise) (a "Material Adverse Effect") of Holdings (taken separately) or
Holdings and Sub (taken as a whole). Except for Sub, Holdings does not,
directly or indirectly, own any equity or similar interest in, or any interest
convertible into or exchangeable or exercisable for any equity or similar
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interest in, any corporation, partnership, joint venture or other business
association or entity.
2.2 Capital Structure of Holdings and Sub.
(a) The authorized capital stock of Holdings consists of
55,000,000 shares of Holdings Common and 42,000,000 shares of Preferred Stock.
As of the date hereof, one share of Holdings Common is issued and outstanding
and is registered in the name of JWC, such share being duly authorized,
validity issued, fully paid and nonassessable and no shares of Preferred Stock
are issued and outstanding. It is the intent of the parties that such share of
Holdings Common be surrendered by JWC at the Effective Time in exchange for one
dollar.
(b) The authorized capital stock of Sub consists of 1,000
shares of common stock, par value $.001 per share, of which 10 shares are
issued and outstanding, all of which are duly authorized, validly issued, fully
paid and nonassessable.
(c) Except as set forth in Section 2.2 (a) and (b) and as
otherwise explicitly set forth in this Agreement, there are no equity
securities of any class of Holdings or Sub or any security exchangeable into or
exercisable for such equity securities, issued, reserved for issuance or
outstanding. There are no options, warrants, calls, rights, commitments or
agreements of any character to which Holdings or Sub is a party, or by which
Holdings or Sub is bound, obligating Holdings or Sub to issue, deliver or sell,
or cause to be issued, delivered or sold, additional shares of capital stock of
Holdings or Sub or obligating Holdings or Sub to grant, extend or accelerate
the vesting or enter into any such option, warrant, call, right, commitment or
agreement. There are no voting trusts, proxies or other agreements or
understandings with respect to the shares of capital stock of Holdings. There
are no obligations, contingent or otherwise, of Holdings or Sub to repurchase,
redeem or otherwise acquire any shares of capital stock of Holdings or Sub or
to provide funds to or make any investment (in the form of a loan, capital
contribution or otherwise) in any such subsidiary or any other entity.
(d) All of the shares of Preferred Stock and Holdings
Common to be issued pursuant to the terms
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hereof have been duly authorized by all necessary corporate action and will,
when issued in accordance with this Agreement, be validly issued, fully paid
and non-assessable and free of preemptive rights, other than restrictions
imposed by the Certificate of Incorporation of Holdings, as amended (the
"Holdings Certificate of Incorporation"), the By-Laws of Holdings, as amended
(the "Holdings By-Laws"), or the Stockholders Agreement (as defined in the
Merger Agreement).
2.3 Authority; No Conflict; Required Filings and Consents.
(a) Holdings has all requisite corporate power and
authority to enter into this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
by all necessary corporate action on the part of Holdings. This Agreement has
been duly and validly executed and delivered by Holdings and constitutes a
valid and binding obligation of Holdings, enforceable in accordance with its
terms, except as such enforceability may be limited by bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights and by general equitable
principles (regardless of whether enforceability is considered in a proceeding
in equity or at law).
(b) The execution and delivery of this Agreement by
Holdings does not, and the consummation of the transactions contemplated by
this Agreement will not, (i) conflict with, or result in any violation or
breach of any provision of the Holdings Certificate of Incorporation or the
Holdings By-laws or (ii) result in any violation or breach of, or constitute
(with or without notice or lapse of time, or both) a default (or give rise to a
right of termination, cancellation or acceleration of any obligation or loss of
any benefit) under any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, lease, contract or other agreement, instrument or
obligation to which Holdings or Sub is a party or by which Holdings or Sub or
any of their properties or assets may be bound, except in the case of clause
(ii) for any such violations, breaches, defaults, terminations, cancellations,
accelerations or conflicts which
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would not, in the aggregate, have or result in a Material Adverse Effect on
Holdings (taken separately) or Holdings and Sub (taken as a whole) or impair
the ability of Holdings to consummate the transactions contemplated by this
Agreement.
(c) No consent, approval, order or authorization of, or
registration, declaration or filing (collectively, "Consents") with any person,
including, without limitation, any court, administrative agency or commission
or other governmental authority or instrumentality ("Governmental Authority")
is required by or with respect to Holdings or Sub in connection with the
execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby, except for (i) such Consents as may be
required under applicable state securities laws and (ii) such other Consents
(other than those of a Governmental Entity) which, if not obtained or made,
would not, individually or in the aggregate, have a Material Adverse Effect on
Holdings (taken individually) or Holdings and Sub (taken as a whole) or impair
the ability of Holdings to consummate the transactions contemplated by this
Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF JWC
JWC hereby represents and warrants to Jillian's, the Continuing
Shareholders, the Other Option Holders, the Continuing Option Holders, the
Borrowers and the Continuing Warrant Holders, on behalf of itself and the JWC
Group, as follows:
3.1 Organization of JWC. JWC is a limited partnership duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, has all requisite power to own, lease and
operate its property and to carry on its business as now being conducted and is
duly qualified or licensed to do business and is in good standing as a foreign
corporation in each jurisdiction in which the failure to be so qualified or
licensed would have or result in a Material Adverse Effect on JWC.
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3.2 Authority; No Conflict; Required Filings and Consents.
(a) JWC has all requisite power and authority to enter into
this Agreement and to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
action on the part of JWC. This Agreement has been duly and validly executed
and delivered by JWC and constitutes a valid and binding obligation of JWC,
enforceable in accordance with its terms, except as such enforceability may be
limited by bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights and by general equitable principles (regardless of whether
enforceability is considered in a proceeding in equity or at law).
(b) The execution and delivery of this Agreement by JWC
does not, and the consummation of the transactions contemplated by this
Agreement will not, (i) conflict with, or result in any violation or breach of
any provision of the organizational documents of JWC, or (ii) result in any
violation or breach of, or constitute (with or without notice or lapse of time,
or both) a default (or give rise to a right of termination, cancellation or
acceleration of any obligation or loss of any benefit) under any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, lease,
contract or other agreement, instrument or obligation to which JWC is a party
or by which JWC or any of its properties or assets may be bound, except in the
case of clause (ii) for any such violations, breaches, defaults, terminations,
cancellations, accelerations or conflicts which would not, in the aggregate,
have or result in a Material Adverse Effect on JWC or impair the ability of JWC
to consummate the transactions contemplated by this Agreement.
(c) No Consent of any person, including without limitation,
any Governmental Entity, is required by or with respect to JWC in connection
with the execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby, except for (i) such Consents as may be
required under applicable state securities laws and (ii) such other Consents
(other than
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those of a Governmental Entity) which, if not obtained or made, would not,
individually or in the aggregate, have a Material Adverse Effect on JWC or
impair the ability of JWC to consummate the transactions contemplated by this
Agreement.
3.3 Authorization of Representative. The Representative is duly
authorized to act as representative of, and attorney-in-fact for, the Group
pursuant to a Purchaser Appointment of Agent and Power of Attorney executed by
each member of the Group and dated as of the date hereof. This Agreement has
been duly and validly executed and delivered by the Representative and
constitutes a valid and binding obligation of the Group, enforceable in
accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or
other similar laws now or hereafter in effect relating to creditors' rights and
by general equitable principles (regardless of whether enforceability is
considered in a proceeding in equity or at law).
3.4 Acquisition of Shares for Investment. The JWC Group is
acquiring the shares of Preferred Stock for its own account for investment
purposes and not (a) as nominee or agent for any other person, firm,
corporation or entity, or (b) with a view toward, or for sale in connection
with, any distribution thereof or (c) with any present intention of
distributing or selling any of the shares of Preferred Stock. The JWC Group
agrees that the shares of Preferred Stock may only be sold, transferred,
offered for sale, pledged, hypothecated or otherwise disposed of if registered
under applicable law (including without limitation the Securities Act of 1933,
as amended (the "Securities Act")) or if so sold, transferred, offered for
sale, pledged, hypothecated or otherwise disposed of pursuant to an available
exemption from all applicable registration requirements. The JWC Group has
such sufficient knowledge and experience in financial and business matters that
it is capable of evaluating the merits and risks of its investment, and the JWC
Group understands and is able to bear any economic risks associated with such
investment for an indefinite period of time, inasmuch as the shares of
Preferred Stock have not been, and may not in the foreseeable future be,
registered under the Securities Act, and including the risk of the loss of the
JWC Group's entire investment in such
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shares. The JWC Group and the JWC Group's attorneys, accountants and other
representatives and advisors, if any, (i) have been given an opportunity to
ask, and have to the extent that the JWC Group has considered necessary, asked
questions of, and have received answers from, representatives of Holdings and
Jillian's concerning the terms of this investment and the affairs of Holdings
and Jillian's; and (ii) have been given or afforded access to all documents,
records, books and additional information which the JWC Group has requested
regarding such matters.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF THE CONTINUING SHAREHOLDERS,
THE OTHER OPTION HOLDERS AND THE BORROWERS
Each of the Continuing Shareholders, the Other Option Holders and the
Borrowers represents and warrants to Holdings and the JWC Group as follows,
except that only the Continuing Shareholders represent and warrant with respect
to Section 4.3:
4.1 Authority; No Conflict; Required Filings and Consents.
(a) Such Continuing Shareholder, Other Option Holder or
Borrower has all requisite power and authority and is legally competent to
enter into this Agreement and to consummate the transaction contemplated
hereby. The execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby have been duly authorized by all necessary
action on the part of such Continuing Shareholder, Other Option Holder or
Borrower. This Agreement has been duly and validly executed and delivered by
such Continuing Shareholder, Other Option Holder or Borrower and constitutes a
valid and binding obligation of such Continuing Shareholder, Other Option
Holder or Borrower, enforceable in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights and by general equitable principles (regardless
of whether enforceability is considered in a proceeding in equity or at law).
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(b) The execution and delivery of this Agreement by such
Continuing Shareholder, Other Option Holder or Borrower does not, and the
consummation of the transactions contemplated by this Agreement will not,
result in any violation or breach of, or constitute (with or without notice or
lapse of time, or both) a default (or give rise to a right of termination,
cancellation or acceleration of any obligation or loss of any benefit) under
any of the terms, conditions or provisions of any note, bond, mortgage,
indenture, lease, contract or other agreement, instrument or obligation to
which such Continuing Shareholder, Other Option Holder or Borrower is a party
or by which such Continuing Shareholder, Other Option Holder or Borrower or any
of its properties or assets may be bound, except for any such violations,
breaches, defaults, terminations, cancellations, accelerations or conflicts
which would not, in the aggregate, have or result in a Material Adverse Effect
on such Continuing Shareholder, Other Option Holder or Borrower or impair the
ability of such Continuing Shareholder, Other Option Holder or Borrower to
consummate the transactions contemplated by this Agreement.
(c) No Consent of any person, including without limitation,
any Governmental Entity, is required by or with respect to such Continuing
Shareholder, Other Option Holder or Borrower in connection with the execution
and delivery of this Agreement or the consummation of the transactions
contemplated hereby, except for (i) such Consents as may be required under
applicable state securities laws and (ii) such other Consents (other than those
of a Governmental Entity) which, if not obtained or made, would not,
individually or in the aggregate, have a Material Adverse Effect on such
Continuing Shareholder, Other Option Holder or Borrower or impair the ability
of such Continuing Shareholder, Other Option Holder or Borrower to consummate
the transactions contemplated by this Agreement.
4.2 Acquisition of Shares of Holdings Common and Holdings Options
for Investment. Such Continuing Shareholder, Other Option Holder or Borrower
is acquiring shares of Holdings Common or Holdings Options for its own account
for investment purposes and not (a) as nominee or agent for any other person,
firm, corporation or entity, or (b) with a view toward, or for sale in
connection with, any distribution thereof or (c) with any present
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intention of distributing or selling any shares of Holdings Common or Holdings
Options. Such Continuing Shareholder, Other Option Holder or Borrower agrees
that shares of Holdings Common and Holdings Options may only be sold,
transferred, offered for sale, pledged, hypothecated or otherwise disposed of
if registered under applicable law (including without limitation the Securities
Act) or if so sold, transferred, offered for sale, pledged, hypothecated or
otherwise disposed of pursuant to an available exemption from all applicable
registration requirements. Such Continuing Shareholder, Other Option Holder or
Borrower has such sufficient knowledge and experience in financial and business
matters that it is capable of evaluating the merits and risks of its
investment, and such Continuing Shareholder, Other Option Holder or Borrower
understands and is able to bear any economic risks associated with such
investment for an indefinite period of time, inasmuch as the shares of Holdings
Common and the Holdings Options have not been, and may not in the foreseeable
future be, registered under the Securities Act, and including the risk of the
loss of such Continuing Shareholder's, Other Option Holder's or Borrower's
entire investment in shares of Holdings Common or Holdings Options. Such
Continuing Shareholder, Other Option Holder or Borrower and such Continuing
Shareholder's, Other Option Holder's or Borrower's attorneys, accountants and
other representatives and advisors, if any, (i) have been given an opportunity
to ask, and have to the extent that such Continuing Shareholder, Other Option
Holder or Borrower has considered necessary, asked questions of, and have
received answers from, representatives of Holdings and Jillian's concerning the
terms of this investment and the affairs of Holdings and Jillian's; and (ii)
have been given or afforded access to all documents, records, books and
additional information which such Continuing Shareholder, Other Option Holder
or Borrower has requested regarding such matters.
4.3 Title to Shares of Jillian's Common. Such Continuing
Shareholder has, and upon consummation of the transactions contemplated by this
Agreement Holdings will acquire, good, valid and marketable title to the shares
of Jillian's Common to be received by Holdings from such Continuing Shareholder
pursuant to this Agreement.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE CONTINUING
OPTION HOLDERS AND THE CONTINUING WARRANT HOLDERS
Each of the Continuing Option Holders and the Continuing Warrant
Holders severally represents and warrants to Holdings and the JWC Group as
follows:
5.1 Authority; No Conflict; Required Filings and Consents.
(a) Such Continuing Option Holder or Continuing Warrant
Holder has all requisite power and authority and is legally competent to enter
into this Agreement and to consummate the transactions contemplated hereby.
The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
action on the part of such Continuing Option Holder or Continuing Warrant
Holder. This Agreement has been duly and validly executed and delivered by
such Continuing Option Holder or Continuing Warrant Holder and constitutes a
valid and binding obligation of such Continuing Option Holder or Continuing
Warrant Holder, enforceable in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights and by general equitable principles (regardless
of whether enforceability is considered in a proceeding in equity or at law).
(b) The execution and delivery of this Agreement by such
Continuing Option Holder or Continuing Warrant Holder does not, and the
consummation of the transactions contemplated by this Agreement will not result
in any violation or breach of, or constitute (with or without notice or lapse
of time, or both) a default (or give rise to a right of termination,
cancellation or acceleration of any obligation or loss of any benefit) under
any of the terms, conditions or provisions of any note, bond, mortgage,
indenture, lease, contract or other agreement, instrument or obligation to
which such Continuing Option Holder or Continuing Warrant Holder is a party or
by which such Continuing Option Holder or Continuing Warrant Holder or any of
its properties or assets
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may be bound, except for any such violations, breaches, defaults, terminations,
cancellations, accelerations or conflicts which would not, in the aggregate,
have or result in a Material Adverse Effect on such Continuing Option Holder or
Continuing Warrant Holder or impair the ability of such Continuing Option
Holder or Continuing Warrant Holder to consummate the transactions contemplated
by this Agreement.
(c) No Consent of any person, including without limitation,
any Governmental Entity, is required by or with respect to such Continuing
Option Holder or Continuing Warrant Holder in connection with the execution and
delivery of this Agreement or the consummation of the transactions contemplated
hereby, except for (i) such Consents as may be required under applicable state
securities laws and (ii) such other Consents (other than those of a
Governmental Entity) which, if not obtained or made, would not, individually or
in the aggregate, have a Material Adverse Effect on such Continuing Option
Holder or Continuing Warrant Holder or impair the ability of such Continuing
Option Holder or Continuing Warrant Holder to consummate the transactions
contemplated by this Agreement.
5.2 Acquisition of Holdings Management Options and Holdings
Warrants for Investment. Such Continuing Option Holder or Continuing Warrant
Holder is acquiring Holdings Management Options or Holdings Warrants (as
defined below) for its own account for investment purposes and not (a) as
nominee or agent for any other person, firm, corporation or entity, or (b) with
a view toward, or for sale in connection with, any distribution thereof or (c)
with any present intention of distributing or selling any Holdings Management
Options or Holdings Warrants. Such Continuing Option Holder or Continuing
Warrant Holder agrees that the Holdings Management Options and Holdings
Warrants, and the shares of Holdings Common for which they are exercisable, may
only be sold, transferred, offered for sale, pledged, hypothecated or otherwise
disposed of if registered under applicable law (including without limitation
the Securities Act) or if so sold, transferred, offered for sale, pledged,
hypothecated or otherwise disposed of pursuant to an available exemption from
all applicable registration requirements. Such Continuing Option Holder or
Continuing Warrant Holder has such sufficient knowledge and experience in
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financial and business matters that it is capable of evaluating the merits and
risks of its investment, and such Continuing Option Holder or Continuing
Warrant Holder understands and is able to bear any economic risks associated
with such investment for an indefinite period of time, inasmuch as the Holdings
Management Options and Holdings Warrants, and the shares of Holdings Common for
which they are exercisable, have not been, and may not in the foreseeable
future be, registered under the Securities Act, and including the risk of the
loss of such Continuing Option Holder's or Continuing Warrant Holder's entire
investment in Holdings Management Options or Holdings Warrants. Such
Continuing Option Holder or Continuing Warrant Holder and such Continuing
Option Holder's or Continuing Warrant Holder's attorneys, accountants and other
representatives and advisors, if any, (i) have been given an opportunity to
ask, and have to the extent that such Continuing Option Holder or Continuing
Warrant Holder has considered necessary, asked questions of, and have received
answers from, representatives of Holdings and Jillian's concerning the terms of
this investment and the affairs of Holdings and Jillian's; and (ii) have been
given or afforded access to all documents, records, books and additional
information which such Continuing Option Holder or Continuing Warrant Holder
has requested regarding such matters.
5.3 Title to Jillian's Management Options and Jillian's Warrants.
Such Continuing Option Holder has good, valid and marketable title to the
Jillian's Management Options to be received by Holdings from such Continuing
Option Holder pursuant to this Agreement. Such Continuing Warrant Holder has
good, valid and marketable title to the Jillian's Warrants (as defined below)
to be received by Holdings from such Continuing Warrant Holder pursuant to this
Agreement.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF JILLIAN'S
Jillian's represents and warrants to Holdings and the JWC Group, as
follows:
6.1 Organization of Jillian's. Each of Jillian's and its
subsidiaries is a corporation duly orga-
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nized, validly existing and in good standing under the laws of the jurisdiction
of its incorporation, has all requisite corporate power to own, lease and
operate its property and to carry on its business as now being conducted and as
proposed to be conducted and is duly qualified or licensed to do business and
is in good standing as a foreign corporation in each jurisdiction in which the
failure to be so qualified or licensed would, in the aggregate, have or result
in a Material Adverse Effect on Jillian's (taken separately) or Jillian's and
its subsidiaries (taken as a whole). Except as set forth in Section 2.1 of the
Disclosure Schedule (as defined in the Merger Agreement), Jillian's does not,
directly or indirectly, own any equity or similar interest in, or any interest
convertible into or exchangeable or exercisable for any equity or similar
interest in, any corporation, partnership, joint venture or other business
association or entity.
6.2 Authority; No Conflict; Required Filings and Consents.
(a) Jillian's has all requisite corporate power and
authority to enter into this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
by all necessary corporate action on the part of Jillian's. This Agreement has
been duly and validly executed and delivered by Jillian's and constitutes a
valid and binding obligation of Jillian's, enforceable in accordance with its
terms, except as such enforceability may be limited by bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights and by general equitable
principles (regardless of whether enforceability is considered in a proceeding
in equity or at law).
(b) The execution and delivery by Jillian's of this
Agreement does not, and the consummation of the transactions contemplated
hereby will not, (i) conflict with, or result in any violation or breach of any
provision of the Articles of Incorporation, as amended, or the By-laws, of
Jillian's or (ii) result in any violation or breach of, or constitute (with or
without notice or lapse of time, or both) a default (or give rise to a
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right of termination, cancellation or acceleration of any obligation or loss of
any benefit) under any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, lease, contract or other agreement, instrument or
obligation to which Jillian's or any of its subsidiaries is a party or by which
any of them or any of their properties or assets may be bound, except in the
case of clause (ii) for any such violations, breaches, defaults, terminations,
cancellations, accelerations or conflicts which would not, in the aggregate,
have a Material Adverse Effect on Jillian's (taken separately) or Jillian's and
its subsidiaries (taken as a whole) or impair the ability of Jillian's to
consummate the transactions contemplated by this Agreement.
(c) Except as set forth in Section 2.3(c) of the Disclosure
Schedule, no Consent of any person, including, without limitation, any
Governmental Entity is required by or with respect to Jillian's or any of its
subsidiaries in connection with the execution and delivery of this Agreement or
the consummation of the transactions contemplated hereby, except for (i) such
Consents as may be required under applicable state securities laws and (ii)
such other Consents (other than those of a Governmental Entity) which, if not
obtained or made, would not, individually or in the aggregate, have a Material
Adverse Effect on Jillian's (taken separately) or Jillian's and its
subsidiaries (taken as a whole) or impair the ability of Jillian's to
consummate the transactions contemplated by this Agreement.
ARTICLE VII
COVENANTS
7.1 Legal Conditions. Each of the parties hereto will take all
reasonable actions necessary to comply promptly with all legal requirements
which may be imposed on it with respect to the transactions contemplated hereby
and will promptly cooperate with and furnish information to each other in
connection with any such requirements imposed upon any of them in connection
with the transactions contemplated hereby. Each of the parties hereto will
take all reasonable actions necessary to obtain (and will cooperate with each
other in obtaining) any consent, authorization, order or approval of, or
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any exemption by, any Governmental Entity required to be obtained or made by
any such party in connection with the transactions contemplated hereby.
7.2 Consents and Approvals. Each of the parties hereto shall use
all reasonable efforts to obtain all necessary consents, waivers and approvals
under any of such party's material agreements, contracts, licenses, leases or
commitments in connection with the transactions contemplated hereby.
7.3 Reasonable Efforts. The parties hereto agree to use reasonable
efforts to effect the Closing and otherwise consummate the transactions
contemplated hereby.
7.4 JWC Agreements. JWC will execute and deliver the Stockholders
Agreement and the Management Agreement (as defined in the Merger Agreement) at
or prior to the Closing.
7.5 Continuing Shareholder Agreements; Other Option Holder
Agreements. The Continuing Shareholders will each execute and deliver the
Stockholders Agreement at or prior to the Closing and a Holdings Option, at the
Closing, exercisable for such number of shares of Holdings Common as set forth
on Schedule 1 hereto. The Other Option Holders will each execute and deliver a
Holdings Option, at the Closing, exercisable for such number of shares of
Holdings Common as set forth on Schedule 1 hereto.
7.6 Continuing Option Holder Agreements. The Continuing Option
Holders will each execute and deliver a Holdings Management Option, at the
Closing, exercisable for such number of shares of Holdings Common as set forth
on Schedule 2 hereto.
7.7 Holdings Agreements. Holdings will (i) adopt the Holdings
Stock Option Plan at or prior to the Closing, (ii) execute and deliver the
Stockholders Agreement at or prior to the Closing, (iii) execute and deliver a
Holdings Option for each Continuing Shareholder and Other Option Holder, at
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the Closing, exercisable for such number of shares of Holdings Common as set
forth on Schedule 1 hereto, (iv) execute and deliver a Holdings Management
Option for each Continuing Option Holder, at the Closing, exercisable for such
number of shares of Holdings Common as set forth on Schedule 2 hereto and (v)
execute and deliver a warrant to purchase shares of Holdings Common,
substantially in the form of Exhibit B hereto (a "Holdings Warrant"), for each
Continuing Warrant Holder, at the Closing, exercisable for such number of
shares of Holdings Common as set forth on Schedule 3 hereto.
7.8 Debt Instruments. Island Partners, Ltd. will execute and
deliver a promissory note (the "IP Promissory Note") in the principal amount of
$200,000 at an annual rate of interest equal to that paid by Jillian's on
borrowings from its primary bank to be designated by the Board of Directors of
Holdings as of the Effective Time, substantially in the form of Exhibit C
hereto, at or prior to the Closing. ▇▇▇▇▇▇ ▇▇▇▇▇▇ and [ ] will execute and
deliver a promissory note (the "▇▇▇▇▇▇ Promissory Note") in the principal
amount of $375,000 at a 7% annual interest rate, substantially in the form of
Exhibit D hereto, at or prior to the Closing. ▇▇▇▇▇ ▇▇▇▇ will execute and
deliver a promissory note (the "▇▇▇▇ Promissory Note") in the principal amount
of $50,000 at an annual rate of interest equal to that paid by Jillian's on
borrowing from its primary bank to be designated by the Board of Directors of
Holdings as of the Effective Time, substantially in the form of Exhibit E
hereto, at or prior to the Closing. The IP Promissory Note, the ▇▇▇▇▇▇
Promissory Note and the ▇▇▇▇ Promissory Note are collectively referred to
herein as the "Debt Instruments." Each of Island Partners, Ltd., ▇▇▇▇▇▇ ▇▇▇▇▇▇
and ▇▇▇▇▇ ▇▇▇▇ hereby represents and warrants to Holdings and the JWC Group
that (i) such Borrower has all requisite power and authority to enter into the
applicable Debt Instrument, (ii) the execution and delivery of the applicable
Debt Instrument have been duly authorized by all necessary action on the part
of such Borrower, and (iii) the applicable Debt Instrument has been duly and
validly executed and delivered by such Borrower and constitutes a valid and
binding obligation of such Borrower, enforceable in accordance with its terms,
except as such enforceability may be limited by bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights and by general equitable
principles (regardless of whether enforceability is considered in a proceeding
in equity or at law). At the Closing, Hold-
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ings will deliver to each Borrower the number of shares of Holdings Common for
which the applicable note serves as consideration, as set forth in such note.
Further, the Borrowers will each execute and deliver the Stockholders Agreement
at or prior to the Closing.
7.9 No Solicitation. None of Jillian's the Continuing
Shareholders, the Other Option Holders, the Continuing Option Holders, the
Borrowers or the Continuing Warrant Holders will (i) solicit, initiate,
facilitate or encourage any inquiries or proposals that constitute, or could
reasonably be expected to lead to, a proposal or offer for a merger,
consolidation, business combination, sale of substantial assets, sale of shares
of capital stock or similar transactions involving Jillian's or any of its
subsidiaries, other than the transactions contemplated by this Agreement or the
Merger Agreement (any of the foregoing inquiries or proposals being referred to
in this Agreement as an "Acquisition Proposal"), (ii) engage in negotiations or
discussions concerning, or provide any non-public information to any person or
entity relating to, any Acquisition Proposal, or (iii) agree to, approve or
recommend any Acquisition Proposal; provided, however, that nothing contained
in this Agreement shall prevent Jillian's or its Board of Directors from
furnishing non-public information to, or entering into discussions or
negotiations with, any person or entity in connection with an unsolicited bona
fide written Acquisition Proposal by such person or entity or recommending an
unsolicited bona fide written Acquisition Proposal to the shareholders of
Jillian's, if and only to the extent that the Board of Directors of Jillian's
determines in good faith by a majority vote, (x) after consultation with its
financial advisor, that such Acquisition Proposal would, if consummated, result
in a transaction more favorable to the shareholders of Jillian's from a
financial point of view than the transaction contemplated by this Agreement
(any such more favorable Acquisition Proposal being referred to in this
Agreement as a "Superior Proposal") and (y) based on the written opinion of
outside legal counsel, that failing to take such action would result in a
breach of its fiduciary duties to shareholders under applicable law.
7.10 Continuing Warrant Holders. The Continuing Warrant Holders
will each, at the Closing, deliver to Holdings any warrants to purchase shares
of Jillian's
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Common (each a "Jillian's Warrant") held by them (whether or not exercisable).
ARTICLE VIII
CONDITIONS TO OBLIGATIONS OF THE PARTIES
8.1 Conditions to Each Party's Obligation. The respective
obligations of each party to consummate the transactions contemplated hereby
are subject to the satisfaction (or waiver by the relevant party under the
Merger Agreement) at or prior to the Closing of each of the conditions set
forth in Sections 6.1 (a) through (h), 6.2 and 6.3 of the Merger Agreement.
8.2 Additional Conditions to Obligations of Holdings and JWC. The
obligations of Holdings and JWC to effect the transactions contemplated by this
Agreement are subject to the satisfaction of each of the following conditions,
any of which may be waived in writing exclusively by Holdings and JWC:
(a) Representations and Warranties. The representations
and warranties of Jillian's, the Continuing Shareholders, the Other Option
Holders, the Continuing Option Holders, the Borrowers and the Continuing
Warrant Holders set forth in this Agreement shall be true and correct as of the
date of this Agreement and as of the Closing Date as though made on and as of
the Closing Date, except for changes contemplated by this Agreement, and
Holdings and JWC shall have received a certificate signed by each such party to
such effect.
(b) Performance of Obligations. Jillian's, the Continuing
Shareholders, the Other Option Holders, the Continuing Option Holders, the
Borrowers and the Continuing Warrant Holders shall have performed all
obligations required to be performed by them under this Agreement at or prior
to the Closing Date, and Holdings and JWC shall have received a certificate
signed by each such party to such effect.
(c) Opinion. Holdings shall have received the opinion of
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇, in form and substance reasonably acceptable to
Holdings,
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dated the Closing Date, covering the matters set forth on Exhibit F hereto.
8.3 Additional Conditions to Obligations of Jillian's, the
Continuing Shareholders, the Other Option Holders, the Continuing Option
Holders, the Borrowers and the Continuing Warrant Holders. The obligations of
Jillian's, the Continuing Shareholders, the Other Option Holders, the
Continuing Option Holders, the Borrowers and the Continuing Warrant Holders to
effect the transactions contemplated by this Agreement are subject to the
satisfaction of each of the following conditions, any of which may be waived,
in writing, exclusively by Jillian's, the Continuing Shareholders, the Other
Option Holders, the Continuing Option Holders, the Borrowers and the Continuing
Warrant Holders:
(a) Representations and Warranties. The representations
and warranties of Holdings and JWC set forth in this Agreement shall be true
and correct as of the date of this Agreement and as of the Closing Date as
though made on and as of the Closing Date, except for changes contemplated by
this Agreement, and Jillian's, the Continuing Shareholders, the Other Option
Holders, the Continuing Option Holders, the Borrowers and the Continuing
Warrant Holders shall have received a certificate signed by each such party to
such effect.
(b) Performance of Obligations. Holdings and the JWC Group
shall have performed all obligations required to be performed by them under
this Agreement at or prior to the Closing Date, and Jillian's, the Continuing
Shareholders, the Other Option Holders, the Continuing Option Holders, the
Borrowers and the Continuing Warrant Holders shall have received a certificate
signed by each such party to such effect.
ARTICLE IX
TERMINATION
9.1 Termination. This Agreement may be terminated, by any of the
parties hereto, prior to the Closing, in the event that the Merger Agreement is
terminated in accordance with its terms, and the transactions contemplated
hereby thereupon may be abandoned.
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9.2 Effect of Termination. In the event of termination of this
Agreement as provided in Section 9.1, this Agreement shall immediately become
void, and there shall be no liability or obligation on the part of Holdings,
the JWC Group, Jillian's, the Continuing Shareholders, the Other Option
Holders, the Continuing Option Holders, the Borrowers or the Continuing Warrant
Holders or their respective officers, directors, stockholders or affiliates,
except that a party may have liability to the other parties if the basis of
termination is a willful or reckless material breach by such party of one or
more of the provisions of this Agreement.
ARTICLE X
SURVIVAL
10.1 Survival. All representations and warranties contained in
this Agreement shall survive the Closing.
ARTICLE XI
MISCELLANEOUS
11.1 Amendment. This Agreement may be amended by the parties
hereto at any time. This Agreement may not be amended except by an instrument
in writing signed on behalf of each of the parties hereto.
11.2 Extension; Waiver. At any time prior to the Closing, the
parties hereto may, to the extent legally allowed, (i) extend the time for the
performance of any of the obligations or other acts of the other parties
hereto, (ii) waive any inaccuracies in the representations and warranties
contained herein or in any document delivered pursuant hereto or (iii) waive
compliance with any of the agreements or conditions contained herein. Any
agreement on the part of a party hereto to any such extension or waiver shall
be valid only if set forth in a written instrument signed on behalf of such
party.
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11.3 Notices. All notices and other communications hereunder shall
be in writing and shall be delivered personally or by next-day courier or
telecopied with confirmation of receipt to the parties at the addresses
specified below (or at such other address for a party as shall be specified by
like notice). Any such notice or other communication shall be effective upon
receipt, if personally delivered or telecopied, or one day after delivery to a
courier for next-day delivery.
(a) if to JWC, the JWC Group or Holdings, to
▇.▇. Childs Associates, L.P.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇
LLP
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(b) if to the Continuing Shareholders, the Other Option
Holders, the Continuing Option Holders, the Borrowers or the Continuing Warrant
Holders, to
Jillian's Entertainment Corporation
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to
Jillian's counsel:
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▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(c) if to Jillian's to:
Jillian's Entertainment Corporation
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
11.4 Interpretation. When a reference is made in this Agreement to
Sections, such reference shall be to a Section of this Agreement unless
otherwise indicated. The table of contents and headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. As used in this Agreement, the
term "affiliate(s)" shall have the meaning set forth in Rule 12b-2 of the
Exchange Act.
11.5 Counterparts. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when two or more counterparts have been signed by each
of the parties and delivered to the other parties, it being understood that all
parties need not sign the same counterpart.
11.6 Entire Agreement. This Agreement constitutes the entire
agreement and supersedes all prior agreements and understandings, both written
and oral, among the parties with respect to the subject matter hereof.
25
30
11.7 Governing Law. This Agreement shall be governed and construed
in accordance with the laws of the Commonwealth of Massachusetts without regard
to any applicable conflicts of law.
11.8 Severability. In case any one or more of the provisions
contained in this Agreement should be invalid, illegal or unenforceable in any
respect against a party hereto, the validity, legality and enforceability of
the remaining provisions contained herein shall not in any way be affected or
impaired thereby and such invalidity, illegality or unenforceability shall only
apply as to such party in the specific jurisdiction where such judgment shall
be made.
11.9 Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto (whether by operation of law or otherwise) without the prior written
consent of each of the other parties. Subject to the preceding sentence, this
Agreement will be binding upon, inure to the benefit of and be enforceable by
the parties and their respective successors and assigns.
26
31
IN WITNESS WHEREOF, the parties hereto have signed this Agreement
under seal as of the date first written above.
▇.▇. CHILDS EQUITY PARTNERS, L.P.
By: ▇.▇. Childs Advisors, L.P.,
its general partner
By: ▇.▇. Childs Associates, L.P.,
its general partner
By: ▇.▇. Childs Associates, Inc.,
its general partner
By:
----------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
-------------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, as agent and attorney-in-fact
for certain coinvestors under Purchaser Appointment
of Agent and Power of Attorney and not in his
individual capacity
JILLIAN'S ENTERTAINMENT HOLDINGS, INC.
By:
---------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President
32
JILLIAN'S ENTERTAINMENT CORPORATION
By:
------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chairman of the Board and
Chief Executive Officer
CONTINUING SHAREHOLDERS:
-------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------------------------
▇▇▇▇▇ ▇▇▇▇
-------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
THE BLIND TRUST UDT 3/26/93
By:
----------------------------------------
Name:
Title:
33
CONTINUING SHAREHOLDERS (continued):
---------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
OTHER OPTION HOLDERS:
--------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------------------------
▇▇▇▇▇ ▇▇▇▇
--------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
34
CONTINUING OPTION HOLDERS:
--------------------------------------------
King Cole
--------------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------------
▇▇▇▇▇ ▇▇▇▇
--------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
35
CONTINUING OPTION HOLDERS (continued):
-------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
-------------------------------------------
▇▇▇ ▇▇▇▇▇▇
THE BLIND TRUST UDT 3/26/93
By:
----------------------------------------
Name:
Title:
BORROWERS:
-------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------------
▇▇▇▇▇ ▇▇▇▇
36
BORROWERS (continued):
ISLAND PARTNERS, LTD.
By:
----------------------------------------
Name:
Title:
37
CONTINUING WARRANT HOLDERS:
--------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
38
CONTINUING WARRANT HOLDERS (continued):
▇▇▇▇▇▇ PROPERTIES
By:
------------------------------------------
Name:
Title: