EXHIBIT 2.2
ESCROW AGREEMENT
This Escrow Agreement (this "Agreement"), dated as of September 23,
2004, is among (a) JILLIAN'S ENTERTAINMENT HOLDINGS, INC., a Delaware
corporation ("Jillian's"), (b) FROST BROWN TODD LLC, a Delaware limited
liability company ("FBT"), and (c) (1) TANGO ACQUISITION, INC., a Delaware
corporation ("Tango") and (2) JBC ACQUISITION CORPORATION, a Delaware
corporation ("JBC") (Tango and JBC, collectively, the "Purchasers").
RECITALS
A. Jillian's and 47 of its direct and indirect subsidiaries
(collectively, the "Debtors") filed for relief under chapter 11 of title 11 of
the United States Code (11 U.S.C. Section 101 et seq.) in the United States
Bankruptcy Court for the Western District of Kentucky (the "Bankruptcy Court"),
which is being administered under Case No. 04-33192 in the Bankruptcy Court (the
"Bankruptcy Case").
B. In connection with the Bankruptcy Case, the Bankruptcy Court has
approved the Debtors' Bidding Procedures, a copy of which is attached as Exhibit
A (the "Bidding Procedures").
C. Certain of the Debtors, Tango, JBC, Dave & Buster's, Inc., a
Missouri corporation and Gemini Investors III, L.P. are entering into that
certain Asset Purchase Agreement, dated as of September 23, 2004 (the "APA").
D. In accordance with Section 2(e)(iii) of the APA, (1) Jillian's and
Tango have advised FBT that they will be wiring the current deposit held by
Union Bank of California, N.A., representing the Initial Earnest Money Deposit
(as defined in the APA) into the bank account described on Exhibit B (the
"Escrow Account"), (2) Jillian's and JBC have advised FBT that they will be
wiring the current deposit held by Union Bank of California, N.A., representing
the Initial Earnest Money Deposit (as defined in the APA) into the Escrow
Account, and (3) Jillian's and Tango have advised FBT that Tango will be wiring
$1,421,000 into the Escrow Account in accordance with the Asset Purchase
Agreement (such additional deposit, with the Initial Earnest Money Deposits
described in clauses (1) and 2) above, the "Escrow Deposit").
E. The parties are entering into this Agreement to establish the rights
and obligations of the parties relative to the Escrow Deposit.
NOW, THEREFORE, the parties agree as follows:
1. Appointment of Escrow Agent. Jillian's and the Purchasers appoint
FBT to serve as escrow agent, and FBT hereby accepts, under the terms of this
Agreement, such appointment and the agency created thereby. FBT shall hold the
Escrow Deposit in an escrow account at Bank One, NA in accordance with the
Bidding Procedures.
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2. Terms; Effectiveness. Capitalized terms not defined herein shall
have the same meaning ascribed in or through the Bidding Procedures. The Bidding
Procedures and the Recitals hereto are hereby incorporated into this Agreement
and made an integral part hereof. This Agreement shall become effective upon the
funding of any portion of the Escrow Deposit into the Escrow Account.
3. Interest. So long as each of the Purchasers shall have provided FBT
with a signed Request for Taxpayer Identification and Certification on IRS Form
W-9 on or prior to the date upon which FBT receives the Escrow Deposit, the
funds representing the Escrow Deposit shall bear interest at the same rate paid
by Bank One, NA to FBT. By way of example and not limitation, if Bank One, NA
pays FBT 2.0% per annum on the Escrow Deposit, the funds representing the Escrow
Deposit shall bear interest at 2% per annum. The parties agree that for purposes
of calculating interest, interest shall be calculated on the basis of the actual
days elapsed after the date of deposit over an assumed year of 365 days.
Notwithstanding any other provision of this Agreement or the Bidding Procedures,
if either of the Purchasers fails to provide FBT with a signed Request for
Taxpayer Identification and Certification on IRS Form W-9 on or prior to the
time FBT receives the Escrow Deposit, the Escrow Deposit shall bear no interest
and the Purchasers shall forfeit any right to interest.
4. Disposition
a. Agreed Disposition. Upon receipt of a written request,
signed by representatives of Tango and JBC (a "Disposition Request") and
approved in writing by Jillian's, FBT shall promptly transfer the Escrow
Deposit, plus all interest earned thereon in accordance with the Disposition
Request.
b. Procedure Where Dispute. If a Disposition Request is not
approved by Jillian's, disposition of the Escrow Deposit, plus all interest
earned thereon, shall be determined by Final Order (as defined below) of the
Bankruptcy Court. "Final Order" shall mean an order of the Bankruptcy Court,
that has not been reversed, stayed, modified or amended, and is no longer
subject to appeal, certiorari proceeding or other proceeding for review,
reargument, or rehearing, and as to which no appeal, certiorari proceeding, or
other proceeding for review, reargument, or rehearing has been timely requested
or is then pending and the time to file any such appeal, certiorari proceeding
or other proceeding for review, reargument, or rehearing has expired or as to
which any right to appeal, petition for certiorari, reargue, or seek rehearing
shall have been waived in writing in form and substance satisfactory to the
Debtors.
5. Termination. This Agreement shall continue in full force and effect
with respect to the Escrow Deposit until such time as the entirety of the funds
representing the Escrow Deposit and any interest accrued thereon have been
withdrawn from the Escrow Account pursuant to Section 4 of this Agreement. Once
the Escrow Deposit and any interest accrued thereon have been disbursed, all of
the obligations of the Escrow Agent hereunder shall terminate.
6. Escrow Agent.
a. Escrow Agent Obligations. The obligations and duties of FBT
are confined to those specifically enumerated in this Agreement. FBT shall not
be subject to, nor be under any obligation to ascertain or construe the terms
and conditions of, any other instrument, whether or not now or hereafter
deposited with or delivered to FBT or referred to in this Agreement, nor shall
FBT be obliged to inquire as to the form, execution, sufficiency or validity of
any such instrument or as to the identity, authority, or rights of the person or
persons executing or delivering the same. FBT shall not be a party to, or be
bound by, any agreement between the parties other than this Agreement whether or
not a copy and/or original of such agreement is held as part of the Escrow
Account or otherwise hereunder, and FBT shall have no duty to know or inquire as
to the performance of any provision of such agreement between the parties.
b. Escrow Agent Liability. FBT shall not be personally liable
for any act which it may do or omit to do hereunder in good faith and in the
exercise of its own best judgment. Any act
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reasonably done or omitted by FBT pursuant to the advice of its attorneys shall
be deemed conclusively to have been performed or omitted in good faith by FBT.
FBT shall not be responsible for any recitals of fact in this Agreement, for
collecting any property required to be deposited with it, for the sufficiency of
any Escrow Deposit, or for the identity, authority or rights of the persons
executing or delivering this Agreement.
c. Conflicts. If FBT should receive or become aware of any
conflicting demands or claims with respect to this Agreement (collectively
referred to hereinafter as "Dispute Notices") hereunder, or the rights of any of
the parties hereto, or any money, property, or instruments deposited herein or
affected hereby, FBT shall have the right in its sole discretion, without
liability for interest or damages, to discontinue any or all further acts on its
part until such conflict is resolved to its satisfaction and/or to commence or
defend any action or proceeding for the determination of such conflict. If any
disagreement or dispute arises between Jillian's and either of the Purchasers
concerning the meaning or validity of any provision of this Agreement or
concerning any other matter relating to this Agreement, including any matter
contained in any Dispute Notice, FBT may, in its sole and absolute discretion,
request that the Bankruptcy Court determine the matters set forth in the Dispute
Notice and the parties hereby consent to the jurisdiction of the Bankruptcy
Court to determine such conflicts. Upon requesting that the Bankruptcy Court
make such a determination, FBT shall be relieved of all liability as to the
Escrow Deposit and any interest accrued thereon, other than to follow the order
of the Bankruptcy Court.
d. Indemnification of Escrow Agent. Jillian's, Tango and JBC
shall jointly and severally indemnify and hold FBT harmless from and against all
costs, damages, judgments, attorneys' fees (whether such attorneys shall be
regularly retained or specially employed), expenses, obligations and liabilities
of every kind and nature which FBT may incur, sustain or be required to pay in
connection with or arising out of this Agreement (except those arising out of
the fraud, willful misconduct or gross negligence of FBT).
e. Court Orders. If any property subject hereto is at any time
attached, garnished, or levied upon under any Final Order, or in case the
payment, assignment, transfer, conveyance or delivery of any such property shall
be stayed or enjoined by any court order, or in the case any Final Order,
judgment or decree shall be made or entered by any court affecting such
property, or any part thereof, or any act by FBT, then and in any of such events
the FBT is authorized, in its sole discretion, to rely upon and comply with any
such Final Order, writ, judgment or decree which it is advised by legal counsel
of its own choosing is binding upon it. In any such case, FBT shall provide
prompt notice of such events to all parties hereto.
f. Escrow Agent's Conduct. FBT shall be fully protected in
relying upon any written notice, demand, certificate or document which it in
good faith believes to be genuine, as to the truth and accuracy of the
statements made therein, the identity and authority of the persons executing the
same and the validity of any signature thereon.
g. New Escrow Agent. FBT may immediately resign upon written
notice to Jillian's and the Purchasers, whereupon FBT shall be discharged of any
further duties under this Agreement.
7. Miscellaneous.
a. Successors, Benefits. This Agreement shall be binding on
and inure to the benefit of the parties hereto and their respective successors
and assigns, but will not be assignable or delegable by any party without the
prior written consent of the other parties. This Agreement shall be solely for
the benefit of the parties hereto.
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b. Governing Law. This Agreement shall be construed and
enforced in accordance with, and all questions concerning the construction,
validity, interpretation and performance of this Agreement shall be governed by,
the laws of the Commonwealth of Kentucky, without giving effect to provisions
thereof regarding conflict of laws.
c. Jurisdiction; Venue. Any action or proceeding brought to
enforce any provision of, or with respect to any dispute arising under, this
Agreement shall be brought against a party only in the Bankruptcy Court and the
Bankruptcy Court shall be the exclusive venue for determining such action or
proceeding.
d. Amendments or Modification of Agreement. The terms of this
Agreement may be altered, amended, modified or revoked only in a writing signed
by all of the parties hereto.
e. Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be construed as an original for all
purposes, but all of which taken together shall constitute one and the same
agreement.
f. Notices. All notices, requests and other communications to
any party hereunder shall be in writing (including electronic transmission,
facsimile transmission or similar writing) and shall be given to such party: (1)
in the case of the Purchasers or Jillian's, at the addresses set forth in
Section 10(g) of the APA, (2) in the case of FBT, to Dale E. Ahearn, Esq., Frost
Brown Todd LLC, 400 W. Market Street, 32nd Floor, Louisville, Kentucky 40202,
Facsimile: 502-581-1087. Each such notice, request or other communication shall
be effective (i) if given by facsimile transmission, when transmitted to the
facsimile number specified in this Section or in Section 10(g) of the APA and
confirmation of receipt is received, (ii) if given by mail, 72 hours after such
communication is deposited in the mails with first class postage prepaid,
addressed as aforesaid, or (iii) if given by any other means, when delivered
(or, in the case of electronic transmission, received) at the address specified
in this Section. The parties may each change the address for service of notice
upon it by a notice in writing to the other parties hereto in accordance with
the provisions hereof.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year first written above, but actually on the dates set forth below.
<Table>
JILLIAN'S ENTERTAINMENT HOLDINGS, INC. FROST BROWN TODD LLC
By /s/ Gregory S. Stevens By /s/ Edward M. King
------------------------------ --------------------------
Name: Gregory S. Stevens Name: Edward M. King
--------------------------- ------------------------
Title: Chief Financial Officer Title: Member
--------------------------- -----------------------
Date: September 24, 2004 Date: September 24, 2004
--------------------------- ------------------------
TANGO ACQUISITION, INC. JBC ACQUISITION CORPORATION
By /s/ William C. Hammett, Jr. By /s/ Matthew Keis
------------------------------ --------------------------
Name: William C. Hammett, Jr. Name: Matthew Keis
--------------------------- ------------------------
Title: Vice President Title: Secretary
-------------------------- -----------------------
Date: September 24, 2004 Date: September 24, 2004
--------------------------- -----------------------
</Table>
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EXHIBIT A
BIDDING PROCEDURES
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EXHIBIT B
THE ESCROW ACCOUNT
FROST BROWN TODD LLC ESCROW ACCOUNT
Bank Name: Bank One, NA
ABA Routing #: 083000137
Account Name: Frost Brown Todd LLC Escrow Account
Account #: 260893145
Ref. 0105561.0524277 - Jillian's Entertainment Holdings, Inc. Auction Deposit
for Tango Acquisition, Inc. and JBC Acquisition Corporation
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