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EXHIBIT (C)(8)
MANAGEMENT AGREEMENT
THIS MANAGEMENT AGREEMENT (this "Agreement") is entered into
as of April [ ], 1997, by and between X.X. Childs Associates, L.P., a Delaware
limited partnership with a principal place of business at Xxx Xxxxxxx Xxxxxx,
Xxxxxx, Xxxxxxxxxxxxx 00000 (the "Consultant"), and, on the other hand,
Jillian's Entertainment Holdings, Inc., a Delaware corporation ("Holdings"),
and Jillian's Entertainment Corporation, a Florida corporation ("Jillian's"
and, together with Holdings the "Companies").
WHEREAS, the Consultant is specially skilled in corporate finance,
strategic corporate planning and other management skills and services;
WHEREAS, concurrently with the execution of this Agreement, Holdings,
Jillian's Entertainment Acquisition Corporation, a Florida corporation and
wholly owned subsidiary of Holdings ("Sub"), and Jillian's have entered into 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 (the "Acquisition");
WHEREAS, the Consultant is rendering substantial and valuable services
to Holdings and Sub in connection with the Acquisition, including services
regarding the planning, structuring and negotiation of the Acquisition;
WHEREAS, the Companies will continue to require the Consultant's
special skills and management advisory services in connection with their
general business operations after the Effective Time;
WHEREAS, the Consultant is willing to make such skills available and
to provide such services to the Companies on the terms and conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the foregoing recitals and the
mutual promises hereinafter set forth, and for other good and valuable
consideration, the Companies and the Consultant, intending to be legally bound,
do hereby agree as follows:
Section 1. Engagement. The Companies hereby engage the
Consultant for the Term (as hereinafter defined) and upon the terms and
conditions herein set forth to provide consulting and management advisory
services to
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the Companies or any of their subsidiaries, as requested from time to time by
either of the Companies (the "Services"). The Services will be in the field of
financial and strategic corporate planning and such other management areas as
the Consultant and the Companies shall mutually agree. In consideration of the
compensation to the Consultant specified herein, the Consultant accepts such
engagement and agrees to perform the Services.
Section 2. Term. The engagement hereunder shall be for an
initial term commencing as of the Effective Time and expiring on the fourth
(4th) anniversary thereof (the "Initial Term"). Upon expiration of the Initial
Term, this Agreement shall automatically extend for successive periods of one
(1) year each, unless the Consultant, or Holdings on behalf of the Companies,
shall give notice to the other at least 90 days prior to the end of the Initial
Term (or any annual extension thereof) indicating that it does not intend to
extend the term of this Agreement. The Initial Term, together with all such
annual extensions of the Initial Term, is referred to herein as the "Term".
Upon final expiration of the Term, all obligations as between the parties
hereunder shall be discharged. Notwithstanding anything in this Agreement to
the contrary, this Agreement shall terminate immediately upon the sale or other
transfer by the JWC Group (as defined in the Merger Agreement) of all or
substantially all of its interest in Holdings.
Section 3. Services to be Performed. The Consultant shall
devote reasonable time and efforts to the performance of the Services. However,
no precise number of hours is to be devoted by the Consultant on a weekly or
monthly basis. The Consultant may perform the Services directly, through its
employees or agents, or with such outside consultants as the Consultant may
engage for such purpose. The Companies acknowledge that the Services to them
will not be exclusive, and that the Consultant and its affiliates will render
similar services to other persons.
Section 4. Confidentiality. The Consultant shall hold in
confidence all proprietary and confidential information of the Companies which
may come into the Consultant's possession or knowledge as a result of its
performance of the Services, exercising a degree of care in maintaining such
confidence as is used by the Consultant to protect its own proprietary or
confidential information that it does not wish to disclose. The Consultant
shall use reasonable efforts to ensure that its employees, agents and outside
consultants similarly maintain the confidentiality of such proprietary and
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confidential information of the Companies. The Consultant shall, and shall use
reasonable efforts to ensure that its employees, agents and outside consultants
shall, use such confidential and proprietary information of the Companies only
in connection with performance of the Services.
Section 5. Compensation; Expense Reimbursement.
(a) Transaction Fee. As set forth in the Merger Agreement, in
consideration of the Consultant's provision of services regarding the planning,
structuring and negotiation of the Acquisition and the Consultant's execution
and delivery of this Agreement, the Companies shall pay the Consultant a fee in
the amount of $200,000, which shall be due and payable in immediately available
funds at the Effective Time.
(b) Management Fee. In consideration of the performance of
the Services, the Consultant shall be paid an aggregate annual fee
(hereinafter, the "Management Fee") equal to $120,000, which Management Fee
shall be paid to the Consultant by the Companies in equal monthly installments
of $10,000 per month; provided that the monthly installment due in respect of
any calendar month during which the Term commences other than on the first day
thereof or expires other than on the last day thereof, shall be appropriately
pro rated for the number of days in such calendar month for which the Term was
in effect. Such Management Fee is to be paid monthly in arrears on the first
day of each calendar month, except for the installment which would otherwise be
payable with respect to the calendar month in which the Term commences, which
shall instead be paid at the Effective Time. Each of the Companies shall be
jointly and severally liable for the payment of the Management Fee and all
other amounts and fees due to the Consultant hereunder.
(c) Expenses. The Companies shall reimburse the Consultant
for all reasonable out-of-pocket expenses incurred in connection with the
performance of the Services, including, without limitation, reasonable travel,
lodging and similar out-of-pocket costs incurred by the Consultant in
connection with or on account of its performance of the Services. Reimbursement
shall be made upon presentation to Holdings by the Consultant of reasonably
itemized documentation therefor.
Section 6. Indemnification. In addition to their agreements
and obligations under this Agreement, each of the Companies jointly and
severally agree to
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indemnify and hold harmless the Consultant and its affiliates (including its
officers, directors, stockholders, partners, employees and agents) from and
against any and all claims, liabilities, losses and damages (or actions in
respect thereof) as and when incurred by the Consultant or any such other
indemnified person, in any way related to or arising out of the performance by
the Consultant of the Services (other than for expenses incurred as described
in Section 5(c) hereof or for compensation for services rendered), and to
reimburse the Consultant and any other such indemnified person for reasonable
out-of-pocket legal and other expenses as and when incurred by any of them in
connection with or relating to investigating, preparing to defend, or defending
any actions, claims or other proceedings (including any investigation or
inquiry) arising in any manner out of or in connection with the Consultant's
performance under this Agreement (whether or not such indemnified person is a
named party in such proceeding); provided, however, that the Companies shall
not be responsible under this Section 6 for any claims, liabilities, losses,
damages or expenses to the extent that they are finally judicially determined
(in an action in which the Consultant is a party) to result from actions taken
by the Consultant (or such other indemnified person) due primarily to the
Consultant's (or such other indemnified person's) gross negligence or willful
misconduct.
Section 7. Notice. All notices hereunder, to be effective,
shall be in writing and shall be mailed by first class certified mail, postage
prepaid, as follows:
(i) If to the Consultant, addressed to it at:
Xxx Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xx. Xxxxx X. Xxxxxxx
With a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxx Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx
(ii) If to Holdings, addressed to such Company
at:
Xxx Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xx. Xxxxx X. Xxxxxxx
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(iii) If to Jillian's, addressed to such Company at:
000 Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Mr. Xxxxxx Xxxxxx
Section 8. Modifications. This Agreement constitutes the
entire agreement between the parties hereto with regard to the subject matter
hereof, superseding all prior understandings and agreements whether written or
oral. This Agreement may not be amended or revised except by a writing signed
by the parties.
Section 9. Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the parties and their respective
successors and assigns but may not be assigned by any party without the prior
written consent of the other parties hereto.
Section 10. Captions. Captions have been inserted solely for
convenience of reference and in no way define, limit or describe the scope or
substance of any provision and shall not affect the validity of any other
provision.
Section 11. Governing Law. This Agreement shall be construed
under and governed by the laws of The Commonwealth of Massachusetts applicable
to contracts made under seal and to be performed entirely in Massachusetts,
without giving effect to the provisions thereof relating to conflict of laws.
Section 12. Counterparts. This Agreement may be signed in
one or more counterparts, each of which shall be deemed an original but which
together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties have duly executed this
Agreement as a sealed instrument as of the date first above written.
JILLIAN'S ENTERTAINMENT
HOLDINGS, INC.
By:
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Name:
Title:
JILLIAN'S ENTERTAINMENT
CORPORATION
By:
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Name:
Title:
X.X. CHILDS ASSOCIATES, L.P.
By: X.X. Childs Associates,
Inc., its General Partner
By:
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Name:
Title:
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