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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities and Exchange Act of 1934
Date of Report (Date of Earliest Event Reported):
August 20, 1999
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JENNIFER CONVERTIBLES, INC.
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(Exact Name of Registrant as Specified in its Charter)
DELAWARE 1-9681 11-2824646
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(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification No.)
incorporation)
419 Crossways Park Drive
Woodbury, New York 11797
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(Address of principal executive offices)
Registrant's Telephone Number, including area code: (516) 496-1900
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(Former Address, if changed since last report)
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<PAGE>
THIS FORM 8-K CONTAINS FORWARD-LOOKING STATEMENTS. SUCH STATEMENTS INVOLVE
VARIOUS RISKS THAT MAY CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE
EXPRESSED IN SUCH FORWARD LOOKING STATEMENTS. THESE RISKS AND UNCERTAINTIES
INCLUDE, BUT ARE NOT LIMITED TO: MARKET DEMAND FOR REGISTRANT'S PRODUCTS,
COMPETITIVE FACTORS, THE ABILITY TO MANAGE REGISTRANT'S GROWTH, AND OTHER RISKS
DETAILED FROM TIME TO TIME IN REGISTRANT'S FILINGS WITH THE SECURITIES AND
EXCHANGE COMMISSION, INCLUDING BUT NOT LIMITED TO, THOSE DESCRIBED UNDER THE
CAPTION "RISK FACTORS" IN REGISTRANT'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL
YEAR ENDED AUGUST 29, 1998.
Item 5: OTHER EVENTS
On August 20, 1999, the Registrant, Jennifer Chicago Ltd. ("Sub"), an
Illinois corporation and a wholly-owned subsidiary of the Registrant, Jenco
Partners, LP, a limited partnership ("LP Owner"), which was the sole limited
partner of Jennifer Chicago, L.P., a Delaware limited partnership operating 14
stores in Chicago ("LP"), JCI Consultant, LP ("Consultant"), a limited
partnership which owned options (the "Options") to purchase 1,200,000 shares of
common stock of the Registrant, Selig Zises, a principal of LP Owner and
Consultant, Jay Zises (collectively with Selig Zises, "Zises"), Jara
Enterprises, Inc., a New York corporation ("Jara"), Fred Love ("Love"), the
owner of Jara and, Harley J. Greenfield ("Greenfield") and Edward B. Seidner
("Seidner"), each of whom is a principal stockholder, an officer and a director
of the Registrant, entered into an L.P. and Option Purchase and Termination
Agreement (the "Agreement") pursuant to which (i) Sub acquired, from LP Owner,
100% of the limited partnership interest in LP and (ii) the Options held by
Consultant to purchase 1,200,000 shares of Registrant's common stock at an
exercise price of $8.00 per share were terminated. As consideration for the
above, Registrant paid an aggregate of $699,000 consisting of $252,000 in cash
and a promissory note in the principal amount of $447,000. Such note bears
interest at prime plus 3% per annum with the principal payable in two
installments as follows: $223,500 to be paid on February 1, 2000 and the
remaining $223,500 to be paid on September 1, 2000.
Further in connection with the Agreement, the Registrant, Sub, Jara,
Greenfield, Love and Seidner on the one hand and the Zises, Consultant and LP
Owner on the other, entered into mutual releases. The Zises also agreed not to,
directly or indirectly, acquire any beneficial interest in the common stock of
Registrant until December 31, 2010.
Item 7: FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(c) Exhibits
10.1 L.P. and Option Purchase and Termination Agreement,
dated as of August 20, 1999, among the Registrant,
Jennifer Chicago Ltd., an Illinois corporation and a
wholly-owned subsidiary of the Registrant, Jenco
Partners, LP, a limited partnership, which is the
sole limited partner of Jennifer Chicago, L.P., a
Delaware limited partnership, JCI Consultant, LP, a
limited partnership which owned certain options to
purchase capital stock of the Registrant, Selig
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Zises, a principal of Jenco Partners, L.P. and JCI
Consultant, LP, Jay Zises, Jara Enterprises, Inc., a
New York corporation, Fred Love, the owner of Jara
Enterprises, Inc. and, Harley J. Greenfield and
Edward B. Seidner, each of whom is a principal
stockholder, an officer and a director of the
Registrant.
10.2 General Release made as of August 20, 1999 by JCI
Consultant, L.P., Jenco Partners L.P., Jay Zises and
Selig Zises for the benefit of the Registrant,
Jennifer Chicago Ltd., Jara Enterprises, Inc.,
Harley J. Greenfield, Fred J. Love and Edward B.
Seidner.
10.3 General Release made as of August 20, 1999 by the
Registrant, Jennifer Chicago Ltd., Jara Enterprises,
Inc., Harley J. Greenfield, Fred J. Love and Edward
B. Seidner for the benefit of JCI Consultant, L.P.,
Jenco Partners L.P., Jay Zises and Selig Zises.
99.1 Term Note dated as of September 1, 1999 in the
principal amount of $447,000 to the order of Jenco
Partners, L.P. from the Registrant.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: September 2, 1999
JENNIFER CONVERTIBLES, INC.
By: /s/ GEORGE J. NADEL
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George J. Nadel, Executive Vice President,
Chief Financial Officer and Treasurer
(Principal Financial and Accounting
Officer)
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EXHIBIT 10.1
L.P. AND OPTION PURCHASE AND TERMINATION AGREEMENT
AGREEMENT, dated as of August 20, 1999 (the "Agreement"), among
Jennifer Convertibles, Inc., a Delaware corporation ("Jennifer"), Jennifer
Chicago Ltd. ("Sub"), an Illinois corporation and a wholly-owned subsidiary of
Jennifer, Jenco Partners, LP, a limited partnership ("LP Owner"), which is the
sole limited partner of Jennifer Chicago, L.P., a Delaware limited partnership
("LP"), JCI Consultant, LP ("Consultant"), a limited partnership which owns
certain options to purchase capital stock of Jennifer, Selig Zises, a principal
of LP Owner and Consultant, Jay Zises (collectively with Selig Zises, "Zises"),
Jara Enterprises, Inc., a New York corporation ("Jara"), Fred Love ("Love"), the
owner of Jara and, Harley J. Greenfield ("Greenfield") and Edward B. Seidner
("Seidner"), each of whom is a principal stockholder, an officer and a director
of Jennifer.
WHEREAS, LP Owner is the sole limited partner of LP;
WHEREAS, pursuant to a Limited Put Agreement, dated as of March 21,
1991 (the "Put Agreement") LP Owner has the right, under certain circumstances,
to put the interest to Jara;
WHEREAS, pursuant to a Stock Option Agreement, dated as of March 21,
1991, as amended by an amendment dated February 25, 1992 (as amended, the
"Option Agreement"), Consultant has an option (the "Option") to purchase up to
1,200,000 shares of Jennifer's common stock, par value $.01 per share;
WHEREAS, in connection with the Option, Consultant entered into (a) a
Voting Trust Agreement with Greenfield and Jennifer, dated as of March 21, 1991,
as amended by a letter amendment dated February 25, 1992 (as amended, the
"Voting Trust Agreement"), and (b) a Registration and Sales Agreement with
Greenfield, Love, Seidner and Jara, dated as of March 21, 1991, as amended by an
amendment dated February 25, 1992 (as amended, the "Registration Agreement");
WHEREAS, the parties desire to terminate the Voting Trust, the
Registration Agreement, the Put Agreement and all other agreements between them
relating to the Option, the Consulting Agreement, or the LP (collectively, the
"Agreements");
WHEREAS, LP Owner desires to sell, assign and transfer all its right,
title and interest in, to and under the Interest in LP to the Sub;
WHEREAS, the parties desire to enter into certain cross releases (the
"Releases").
NOW THEREFORE, in consideration of the premises and of the
representations, warranties, covenants and agreements set forth herein, the
parties hereto hereby agree as follows:
THE TRANSACTION
Section 1.1 TRANSFER OF INTEREST, TERMINATION OF OPTION AND OTHER
AGREEMENTS. In exchange for $252,000, payable to Consultant on September 1,
1999, and a note in the principal amount of $447,000 (the "Note") payable to LP
Owner and other good and valuable consideration, receipt of which is hereby
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acknowledged, (i) LP Owner hereby sells, assigns and transfers to Sub all of its
right, title and interest in, to and under the Interest; (ii) Consultant hereby
agrees that the Option is hereby terminated and shall be of no further force or
effect, and (iii) the parties hereto hereby agree that the Agreements to which
they are a party are hereby terminated and shall be of no further force or
effect.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF JENNIFER AND SUB
Jennifer and Sub, jointly and severally, represent and warrant to LP
Owner, Zises Consultant, Jara, Love, Greenfield and Seidner as follows:
Section 2.1 EXISTENCE, GOOD STANDING, CORPORATE AUTHORITY. Each of
Jennifer and Sub is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation. Each of Jennifer
and Sub is duly licensed or qualified to do business as a foreign corporation
and is in good standing under the laws of any other state of the United States
in which the character of the properties owned or leased by it or in which the
transaction of its business makes such qualification necessary.
Section 2.2 AUTHORIZATION, VALIDITY AND EFFECT OF AGREEMENTS. Each of
Jennifer and Sub has the requisite corporate power and authority to execute and
deliver this Agreement, the Releases and the Note. The execution and delivery of
this Agreement, the Releases and the Note, and the consummation by Jennifer and
Sub of the transactions contemplated hereby and thereby has been duly authorized
by all requisite corporate action. This Agreement constitutes the valid and
legally binding obligation of Jennifer and Sub and the Releases and the Note
constitute the valid and legally binding obligations of Jennifer, in each case
enforceable against Jennifer and (as to this Agreement) Sub, in accordance with
their respective terms, subject to applicable bankruptcy, insolvency, moratorium
or other similar laws relating to creditors' rights and general principles of
equity.
Section 2.3 NO VIOLATION. Neither the execution and delivery by
Jennifer or Sub, of this Agreement or the Releases, nor the consummation by any
of them of the transactions contemplated hereby or thereby in accordance with
the terms hereof or thereof, will (a) conflict with or result in a breach of any
provisions of their respective Certificate of Incorporation or Bylaws; (b)
violate, conflict with, result in a breach of any provision of, constitute a
default (or an event which, with notice or lapse of time or both, would
constitute a default) under, result in the termination, or in a right of
termination or cancellation of, accelerate the performance required by, result
in the triggering of any payment or other material obligations pursuant to,
result in the creation of any lien, security interest, charge or encumbrance
upon any of the material properties of Jennifer or Sub under, or result in being
declared void, voidable, or without further binding effect, any of the terms,
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conditions or provisions of any note, bond, mortgage, indenture, deed of trust
or any material license, franchise, permit, lease, contract, agreement or other
instrument, commitment or obligation to which any of them is a party, or by
which any of them or their properties is bound or affected; (c) contravene or
conflict with or constitute a violation of any provisions of any law,
regulation, judgment, injunction, order or decree binding upon or applicable to
any of them; or (d) require any consent, approval or authorization of, or
declaration, of or registration with, any domestic governmental or regulatory
authority.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF LP OWNER, CONSULTANTS AND ZISES
LP Owner, Consultant and Zises, jointly and severally, hereby represent
to Jennifer, Sub, Jara, Greenfield, Love and Seidner as follows:
Section 3.1 AUTHORIZATION, VALIDITY AND EFFECT OF AGREEMENTS. Each of
LP Owner, Consultant and Zises has the requisite power and authority to execute
and deliver this Agreement, the Releases and all agreements and documents to be
executed and delivered in connection herewith. The execution and delivery of
this Agreement and the Releases (and the agreements contemplated hereby) and the
consummation by LP Owner, Consultant and Zises of the transactions contemplated
hereby have been duly authorized by all requisite corporate action. Each of this
Agreement and the Releases has been duly executed by LP Owner, Consultant and
Zises. Each of this Agreement and the Releases (and each of such other
agreements) constitutes the valid and legally binding obligations of LP Owner,
Consultant and Zises, enforceable against them in accordance with their
respective terms, subject to applicable bankruptcy, insolvency, moratorium or
other similar laws relating to creditors' rights and general principles of
equity.
Section 3.2 NO VIOLATION. Neither the execution and delivery by LP
Owner, Consultants and Zises of this Agreement or the Releases, nor the
consummation by any of them of the transactions contemplated hereby or thereby
in accordance with the terms hereof or thereof, will (a) conflict with or result
in a breach of any provisions of the agreement of limited partnership,
Certificate of Incorporation or Bylaws of LP Owner or Consultant or their
respective general partners; (b) violate, conflict with, result in a breach of
any provision of, constitute a default (or an event which, with notice or lapse
of time or both, would constitute a default) under, result in the termination,
or in a right of termination or cancellation of, accelerate the performance
required by, result in the triggering of any payment or other material
obligations pursuant to, result in the creation of any lien, security interest,
charge or encumbrance upon any of the material properties of LP Owner,
Consultant or Zises under, or result in being declared void, voidable, or
without further binding effect, any of the terms, conditions or provisions of
any note, bond, mortgage, indenture, deed of trust or any material license,
franchise, permit, lease, contract, agreement or other instrument, commitment or
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obligation to which any of them is a party, or by which any of them or their
properties is bound or affected; (c) contravene or conflict with or constitute a
violation of any provisions of any law, regulation, judgment, injunction, order
or decree binding upon or applicable to any of them; or (d) require any consent,
approval or authorization of, or declaration, of or registration with, any
domestic governmental or regulatory authority.
Section 3.3 THE INTEREST. The Interest in LP represents all of the
outstanding limited partnership interests in LP and is free and clear of any
liens, claims, encumbrances, options, security interests or other limitations or
restrictions. Jennifer Investment Chicago Limited Partnership has no interest in
LP.
Section 3.4 THE OPTION. The Option is free and clear of any liens,
claims, encumbrances, options, security interests or other limitations or
restrictions.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF JARA AND LOVE
Jara and Love, jointly and severally, hereby represent to Jennifer,
Sub, Consultant, LP Owner, Zises, Seidner and Greenfield as follows:
Section 4.1 AUTHORIZATION, VALIDITY AND EFFECT OF AGREEMENTS. Jara has
the requisite corporate power and authority to execute and deliver this
Agreement, the Releases and all agreements and documents to be executed and
delivered in connection herewith. The execution and delivery of this Agreement,
the Releases (and the agreements contemplated hereby) and the consummation by
Jara of the transactions contemplated hereby has been duly authorized by all
requisite corporate action. Each of this Agreement and the Releases has been
duly executed by Jara and Love. Each of this Agreement and the Releases
constitutes the valid and legally binding obligations of Jara and Love,
enforceable against them in accordance with their respective terms, subject to
applicable bankruptcy, insolvency, moratorium or other similar laws relating to
creditors' rights and general principles of equity.
Section 4.2 NO VIOLATION. Neither the execution and delivery by Jara
and Love of this Agreement or the Releases, nor the consummation by them of the
transactions contemplated hereby or thereby in accordance with the terms hereof
or thereof, will (a) conflict with or result in a breach of any provisions of
the Certificate of Incorporation or Bylaws of Jara; (b) violate, conflict with,
result in a breach of any provision of, constitute a default (or an event which,
with notice or lapse of time or both, would constitute a default) under, result
in the termination, or in a right of termination or cancellation of, accelerate
the performance required by, result in the triggering of any payment or other
material obligations pursuant to, result in the creation of any lien, security
interest, charge or encumbrance upon any of the material properties of Jara or
Love under, or result in being declared void, voidable, or without further
binding effect, any of the terms, conditions or provisions of any note, bond,
mortgage, indenture, deed of trust or any material license, franchise, permit,
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lease, contract, agreement or other instrument, commitment or obligation to
which any of them is a party, or by which either of them or their properties is
bound or affected; (c) contravene or conflict with or constitute a violation of
any provisions of any law, regulation, judgment, injunction, order or decree
binding upon or applicable to Jara or Love; or (d) require any consent, approval
or authorization of, or declaration, of or registration with, any domestic
governmental or regulatory authority.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF GREENFIELD AND LOVE
Greenfield and Seidner, jointly and severally, hereby represent to
Jennifer, Sub, Consultant, LP Owner, Zises, Jara and Love as follows:
Section 4.1 AUTHORIZATION, VALIDITY AND EFFECT OF AGREEMENTS. Each of
this Agreement and the Releases has been duly executed by Greenfield and
Seidner. Each of this Agreement and the Releases constitutes the valid and
legally binding obligations of Greenfield and Seidner, enforceable against them
in accordance with their respective terms, subject to applicable bankruptcy,
insolvency, moratorium or other similar laws relating to creditors' rights and
general principles of equity.
Section 4.2 NO VIOLATION. Neither the execution and delivery by
Greenfield and Seidner of this Agreement or the Releases, nor the consummation
by them of the transactions contemplated hereby or thereby in accordance with
the terms hereof or thereof, will (a) violate, conflict with, result in a breach
of any provision of, constitute a default (or an event which, with notice or
lapse of time or both, would constitute a default) under, result in the
termination, or in a right of termination or cancellation of, accelerate the
performance required by, result in the triggering of any payment or other
material obligations pursuant to, result in the creation of any lien, security
interest, charge or encumbrance upon any of the material properties of
Greenfield or Seidner under, or result in being declared void, voidable, or
without further binding effect, any of the terms, conditions or provisions of
any note, bond, mortgage, indenture, deed of trust or any material license,
franchise, permit, lease, contract, agreement or other instrument, commitment or
obligation to which any of them is a party, or by which either of them or their
properties is bound or affected; (b) contravene or conflict with or constitute a
violation of any provisions of any law, regulation, judgment, injunction, order
or decree binding upon or applicable to Greenfield or Seidner; or (c) require
any consent, approval or authorization of, or declaration, of or registration
with, any domestic governmental or regulatory authority.
ARTICLE VI
COVENANTS
Section 6.1 OTHER ACTION.
Subject to the terms and conditions herein provided, the parties shall
use all reasonable efforts to take, or cause to be taken, all action and do, or
cause to be done, all things necessary, proper or appropriate to consummate and
make effective the transactions contemplated by this Agreement and the Releases.
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If, at any time after the closing of the transactions contemplated hereby, any
further reasonable action is necessary or desirable to carry out the purpose of
this Agreement or the Releases, the parties shall take all such necessary
action. Each party hereto shall perform such further acts and execute such
documents as may be reasonably required to effect the transactions contemplated
hereby.
Section 6.2 EXPENSES. All costs and expenses incurred in connection
with this Agreement and the transactions contemplated hereby shall, except as
otherwise provided herein, be paid by the party which incurs them.
Section 6.3 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. Notwithstanding
any right of a party to investigate the accuracy of the representations and
warranties and notwithstanding any knowledge of facts determined or determinable
by such party pursuant to such investigation or right of investigation, such
party has the right to rely fully upon the representations, warranties,
covenants and agreement of the other parties contained in this Agreement. All
such representations, warranties, covenants and agreements shall survive the
execution and delivery hereof and the closing hereunder.
Section 6.4 STANDSTILL. From and after the date hereof, until December
31, 2010, Selig Zises and Jay Zises shall not acquire, and shall cause their
immediate family members and their affiliates not to acquire, any beneficial
interest in the common stock of Jennifer.
ARTICLE VII
INDEMNIFICATION
Section 7.1 OBLIGATION OF CONSULTANT, LP OWNER AND ZISES TO INDEMNIFY.
Consultant, LP Owner and Zises shall, jointly and severally, indemnify, defend
and hold harmless each of the other parties hereto and their respective assigns
from and against Losses arising out of or due to a breach of any representation,
warranty, covenant or agreement of Consultant, LP Owner and Zises contained in
this Agreement or the Releases. In addition, Consultant, LP Owner and Zises
hereby, jointly and severally, indemnify, defend and hold harmless each of the
other parties hereto and the Releasees (as defined in the Release given by
Consultant, LP Owner and Zises), against any claims made by any relative,
associate or affiliate of any of them (including without limitation Glenn S.
Myers and Jennifer Chicago Investment Limited Partnership) against the Releasees
as to any subject matter as to which such Release constitutes a release by
Consultant, Owner or Zises.
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Section 7.2 OBLIGATION OF JENNIFER TO INDEMNIFY. Jennifer shall
indemnify, defend and hold harmless Consultant, LP Owner and Zises from and
against any Losses arising out of or due to a breach of any representation,
warranty, covenant or agreement of Jennifer or Sub contained in this Agreement,
the Note or the Releases.
Section 7.3 OBLIGATION OF JARA, LOVE, GREENFIELD AND SEIDNER TO
INDEMNIFY. Jara, Love, Greenfield and Seidner shall indemnify, defend and hold
harmless each of the other parties hereto and their respective assigns from and
against Losses arising out of or due to a breach of any representation,
warranty, covenant or agreement of such party contained in this Agreement or the
Releases.
Section 7.4 NOTICE AND OPPORTUNITY TO DEFEND. If any party (the
"Indemnitee") receives notice of any claim or the commencement of any action or
proceeding with respect to which any other party (or parties ) is obligated to
provide indemnification (the "Indemnifying Party"), the Indemnitee shall
promptly give the Indemnifying Party notice thereof; PROVIDED, HOWEVER, that
failure to give such notification shall not affect the indemnification provided
hereunder except to the extent the Indemnifying Party shall have been actually
and materially prejudiced as a result of such failure. The Indemnified Party
shall have the right to retain counsel of its own choice to represent it, and
the Indemnifying Party shall pay the fees, expenses and disbursements of such
counsel; and such counsel shall, to the extent consistent with its professional
responsibilities, cooperate with the Indemnifying Party and any counsel
designated by the Indemnifying Party. The Indemnifying Party shall be liable for
any settlement of any claim against the Indemnified Party made with the
Indemnifying Party's written consent, which consent shall not be unreasonably
withheld. The Indemnifying Party shall not, without the prior written consent of
the Indemnified Party, settle or compromise any claim, or permit a default or
consent to the entry of any judgment in respect thereof, unless such settlement,
compromise or consent includes, as an unconditional term thereof, the giving by
the claimant to the Indemnified Party of an unconditional release from all
liability in respect of such claim.
ARTICLE VIII
GENERAL PROVISIONS
Section 8.1 NOTICES. Any notice required to be given hereunder shall be
sufficient if in writing, and sent by facsimile transmission or by courier
service (with proof of service), hand delivery or certified or registered mail
(return receipt requested and first-class postage prepaid), addressed as
follows:
If to Jennifer, Sub, If to Consultant, LP Owner If to Jara or Love:
Greenfield or Seidner: or Zises:
Jennifer Convertibles, Inc.
417 Crossways Park Drive
Woodbury, New York 11797
Attn: Harley J. Greenfield,
President
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With copies to: With copies to:
Squadron, Ellenoff, Plesent,
& Sheinfeld, LLP
551 Fifth Avenue
New York, New York 10176
Fax: (212) 697-6686
Attn: Kenneth R. Koch
or to such other address as any party shall specify by written notice so given,
and such notice shall be deemed to have been delivered as of the date so
telecommunicated, personally delivered or mailed.
Section 8.2 ASSIGNMENT, BINDING EFFECT. 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 the other parties. Subject to the preceding sentence, this
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective permitted successors and assigns.
Section 8.3 ENTIRE AGREEMENT. This Agreement and any documents
delivered by the parties in connection herewith constitute the entire agreement
among the parties with respect to the subject matter hereof and supersede all
prior agreements and understandings among the parties with respect thereto. No
addition to or modification of any provision of this Agreement shall be binding
upon any party hereto unless made in writing and signed by all parties hereto.
Section 8.4 AMENDMENT. This Agreement may not be amended except by an
instrument in writing signed on behalf of each of the parties hereto.
Section 8.5 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York without regard to
its rules of conflict of laws.
Section 8.6 COUNTERPARTS. This Agreement may be executed by the parties
hereto in separate counterparts, each of which when so executed and delivered
shall be an original, but all such counterparts shall together constitute one
and the same instrument.
Section 8.7 HEADINGS. Headings of the Articles and Sections of this
Agreement are for the convenience of the parties only and shall be given no
substantive or interpretive effect whatsoever.
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Section 8.8 INTERPRETATION. In this Agreement, unless the context
otherwise requires, words describing the singular number shall include the
plural and vice versa, and words denoting any gender shall include all genders
and words denoting natural persons shall include corporations and partnerships
and vice versa.
Section 8.9 WAIVERS. Except as provided in this Agreement, no action
taken pursuant to this Agreement, including, without limitation, any
investigation by or on behalf of any party, shall be deemed to constitute a
waiver by the party taking such action of compliance with any representations,
warranties, covenants or agreements contained in this Agreement. The waiver by
any party hereto of a breach of any provision hereunder shall not operate or be
construed as a waiver of any prior or subsequent breach of the same or any other
provision hereunder.
Section 8.10 SEVERABILITY. Any term or provision of this Agreement
which is invalid or unenforceable in any jurisdiction shall, as to that
jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining terms
and provisions of this Agreement or affecting the validity or enforceability of
any of the terms or provisions of this Agreement in any other jurisdiction. If
any provision of this Agreement is so broad as to be unenforceable, the
provision shall be interpreted to be only so broad as is enforceable.
Section 8.11 ENFORCEMENT OF AGREEMENT. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement was not performed in accordance with its specific terms or was
otherwise breached. It is accordingly agreed that the parties shall be entitled
to seek an injunction or injunctions to prevent breaches of this Agreement and
to enforce specifically the terms and provisions hereof, this being in addition
to any other remedy to which they are entitled at law or in equity.
IN WITNESS WHEREOF, the parties have executed this Agreement and caused
the same to be duly delivered on their behalf on the day and year first written
above.
JENNIFER CONVERTIBLES, INC.
By: /s/ HARLEY J. GREENFIELD
-----------------------------------
Name: Harley J. Greenfield
Title: Chief Executive Officer
JENNIFER CHICAGO, LTD.
By: /s/ HARLEY J. GREENFIELD
-----------------------------------
Name: Harley J. Greenfield
Title: Chief Executive Officer
JCI CONSULTANT LP
By: JCI CONSULTANT CORP.
(Its General Partner)
By: /s/ SELIG ZISES
-----------------------------------
Name: Selig Zises
Title: Presdent
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JENCO PARTNERS, L.P.
By: M.P. (JENCO) PARTNERS, L.P.
(Its General Partner)
By: JENCO ACQUISITION CORP.
(Its General Partner)
By: /s/ SELIG ZISES
-----------------------------------
Name: Selig Zises,
Title: President
/s/ SELIG ZISES
-----------------------------------
Selig Zises
/s/ JAY ZISES
-----------------------------------
Jay Zises
/s/ HARLEY J. GREENFIELD
-----------------------------------
Harley J. Greenfield
/s/ EDWARD B. SEIDNER
-----------------------------------
Edward B. Seidner
/s/ FRED J. LOVE
-----------------------------------
Fred J. Love
JARA ENTERPRISES, INC.
By: /s/ FRED J. LOVE
-----------------------------------
Fred J. Love, President
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EXHIBIT 10.2
GENERAL RELEASE
This general release is made as of the 20th day of August, 1999 by JCI
Consultant, LP, Jenco Partners LP, Jay Zises and Selig Zises (collectively
"Releasors").
TO ALL TO WHOM THESE PRESENTS SHALL COME OR MAY CONCERN, KNOW THAT
RELEASORS, for good and valuable consideration, receipt of which is hereby
acknowledged, pursuant to and in conjunction with the execution and delivery of
that certain LP and Option Purchase and Termination Agreement (the "Termination
Agreement"), among the Releasors, Jennifer Convertibles, Inc. ("Jennifer"),
Jennifer Chicago Ltd., Jara Enterprises, Inc., Harley J. Greenfield, Fred J.
Love and Edward B. Seidner (the "Other Parties") hereby releases and forever
discharges the Other Parties and their immediate family members, officers,
directors, employees, and agents (including without limitation Jerome I.
Silverman Company, Jerry Silverman and Isabelle Silverman), subsidiaries and
affiliates, past and present and their heirs, executors, administrators and
assigns (collectively, the "Releasees" and, individually, a "Releasee") from all
actions, causes of action, including without limitation, suits, debts, dues,
sums of money, accounts, reckonings, bonds, bills, specialties, covenants,
contracts, agreements guarantees, liabilities, controversies, agreements,
promises, variances, trespasses, damages, judgments, extents, executions, claims
and demands whatsoever, in law, equity or otherwise, whether known or unknown,
contemplated or not contemplated, foreseen or unforeseen, fixed or contingent,
which against the Releasees, the Releasor ever had, now has or hereafter can,
shall or may have, for, upon, or by reason of any matter, cause or thing
whatsoever from the beginning of the world to the day of the date hereof,
provided, however, such release shall not include, in any case, from and after
the date hereof, the rights, powers, liabilities and obligations arising out of
or under the Termination Agreement and as to Jennifer, the Note executed as of
the date hereof.
This General Release may not be amended, waived, terminated or
otherwise changed in any respect, except with respect to a specific Releasee by
a writing signed by such Releasee. THE VALIDITY, CONSTRUCTION AND INTERPRETATION
OF THIS GENERAL RELEASE AND ALL RIGHTS, OBLIGATIONS AND LIABILITIES ARISING
HEREUNDER SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK AND FOR THE
PURPOSE OF LEGAL PROCEEDINGS THIS GENERAL RELEASE SHALL BE DEEMED TO HAVE BEEN
MADE AND PERFORMED IN THE STATE OF NEW YORK.
This General Release may be executed in one or more counterparts, and
shall become effective when one or more counterparts have been signed by each of
the parties thereto.
THIS GENERAL RELEASE IS FREELY AND VOLUNTARILY GIVEN TO THE RELEASEES
BY RELEASORS WITHOUT ANY DURESS OR COERCION AND AFTER SUCH RELEASORS HAVE EITHER
CONSULTED WITH COUNSEL OR HAVE BEEN GIVEN AN OPPORTUNITY TO DO SO, AND THE
RELEASORS HAVE CAREFULLY AND COMPLETELY READ ALL OF THE TERMS AND PROVISIONS OF
THIS GENERAL RELEASE.
<PAGE>
IN WITNESS WHEREOF, each Releasor has hereunto executed this General
Release as of the date first written above.
JCI CONSULTANT, LP
By: JCI Consultant Corp.
(its General Partner)
By: /s/ Selig Zises
---------------------------
Name: Selig Zises
Title: President
On this 18th day of August, 1999, before me personally appeared Selig
Zises to me known and known to me to be the President of JCI Consultant Corp.,
the general partner of JCI Consultant, LP, who executed the foregoing instrument
on behalf of JCI Consultant Corp., as general partner of JCI Consultant LP, and
he duly acknowledged to me that he executed the same on behalf of JCI Consultant
Corp., as general partner of JCI Consultant Corp., for the purpose above stated,
and, being by me duly sworn, did depose and say that the statements therein
contained are true.
/s/ Shari L Steinberg JENCO PARTNERS, L.P.
- -----------------------------
Notary Public
By: MP (JENCO) PARTNERS, L.P.
(its General Partner)
By: JENCO ACQUISITION CORP.
(Its General Partner)
By: /s/ Selig Zises
---------------------------
Name: Selig Zises
Title: President
On this 18th day of August, 1999, before me personally appeared Selig
Zises to me known and known to me to be the President of Jenco Acquisition
Corp., the general partner of MP (Jenco) Partners, L.P., the general partner of
Jenco Partners, L.P. who executed the foregoing instrument on behalf of Jenco
Acquisition Corp., as general partner of MP (Jenco) Partners, L.P., the general
partner of Jenco Partners, L.P., and he duly acknowledged to me that he executed
the same on behalf of Jenco Acquisition Corp., as general partner of MP (Jenco)
Partners, L.P., the general partner of Jenco Partners, L.P., for the purpose
above stated, and, being by me duly sworn, did depose and say that the
statements therein contained are true.
/s/ Shari L. Steinberg
- -----------------------------
Notary Public
2
<PAGE>
/s/ Jay Zises
---------------------------
Jay Zises
On this 20th day of August, 1999, before me personally appeared Selig
Zises who executed the foregoing instrument and he duly acknowledged to me that
he executed the same for the purpose above stated, and, being by me duly sworn,
did depose and say that the statements therein contained are true.
/s/ Margaret Fuggetta
- -----------------------------
Notary Public
/s/ Selig Zises
---------------------------
Selig Zises
On this 18th day of August, 1999, before me personally appeared Selig
Zises who executed the foregoing instrument and he duly acknowledged to me that
he executed the same for the purpose above stated, and, being by me duly sworn,
did depose and say that the statements therein contained are true.
/s/ Shari L. Steinberg
- -----------------------------
Notary Public
3
EXHIBIT 10.3
GENERAL RELEASE
This general release is made as of the 20th day of August, 1999 by
Jennifer Convertibles, Inc., Jennifer Chicago Ltd., Jara Enterprises, Inc.,
Harley J. Greenfield, Fred J. Love and Edward B. Seidner (collectively
"Releasors").
TO ALL TO WHOM THESE PRESENTS SHALL COME OR MAY CONCERN, KNOW THAT
RELEASORS, for good and valuable consideration, receipt of which is hereby
acknowledged, pursuant to and in conjunction with the execution and delivery of
that certain LP and Option Purchase and Termination Agreement (the "Termination
Agreement"), among the Releasors, JCI Consultant L.P., Jenco Partners LP, Jay
Zises and Selig Zises, (the "Other Parties") hereby releases and forever
discharges the Other Parties and their immediate family members, officers,
directors, employees, and agents, subsidiaries and affiliates, past and present
and their heirs, executors, administrators and assigns (collectively, the
"Releasees" and, individually, a "Releasee") from all actions, causes of action,
including without limitation, suits, debts, dues, sums of money, accounts,
reckonings, bonds, bills, specialties, covenants, contracts, agreements
guarantees, liabilities, controversies, agreements, promises, variances,
trespasses, damages, judgments, extents, executions, claims and demands
whatsoever, in law, equity or otherwise, whether known or unknown, contemplated
or not contemplated, foreseen or unforeseen, fixed or contingent, which against
the Releasees, the Releasor ever had, now has or hereafter can, shall or may
have, for, upon, or by reason of any matter, cause or thing whatsoever from the
beginning of the world to the day of the date hereof, provided, however, such
release shall not include, in any case, from and after the date hereof, the
rights, powers, liabilities and obligations arising out of or under the
Termination Agreement and as to Jennifer, the Note executed as of the date
hereof.
This General Release may not be amended, waived, terminated or
otherwise changed in any respect, except with respect to a specific Releasee by
a writing signed by such Releasee. THE VALIDITY, CONSTRUCTION AND INTERPRETATION
OF THIS GENERAL RELEASE AND ALL RIGHTS, OBLIGATIONS AND LIABILITIES ARISING
HEREUNDER SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK AND FOR THE
PURPOSE OF LEGAL PROCEEDINGS THIS GENERAL RELEASE SHALL BE DEEMED TO HAVE BEEN
MADE AND PERFORMED IN THE STATE OF NEW YORK.
This General Release may be executed in one or more counterparts, and
shall become effective when one or more counterparts have been signed by each of
the parties thereto.
THIS GENERAL RELEASE IS FREELY AND VOLUNTARILY GIVEN TO THE RELEASEES
BY RELEASORS WITHOUT ANY DURESS OR COERCION AND AFTER SUCH RELEASORS HAVE EITHER
CONSULTED WITH COUNSEL OR HAVE BEEN GIVEN AN OPPORTUNITY TO DO SO, AND THE
RELEASORS HAVE CAREFULLY AND COMPLETELY READ ALL OF THE TERMS AND PROVISIONS OF
THIS GENERAL RELEASE.
<PAGE>
IN WITNESS WHEREOF, each Releasor has hereunto executed this General
Release as of the date first written above.
JENNIFER CONVERTIBLES, INC.
By: /s/ Harley J. Greenfield
-----------------------------------
Name: Harley J. Greenfield
Title: Chief Executive Officer
On this 20th day of August, 1999, before me personally appeared Harley
J. Greenfield to me known and known to me to be the Chief Executive Officer of
Jennifer Convertibles, Inc. who executed the foregoing instrument on behalf of
Jennifer Convertibles, Inc., and he duly acknowledged to me that he executed the
same on behalf of Jennifer Convertibles, Inc., for the purpose above stated,
and, being by me duly sworn, did depose and say that the statements therein
contained are true.
/s/ Graziana Gallo
- -----------------------------
Notary Public
JENNIFER CHICAGO LTD.
By: /s/ Harley J. Greenfield
------------------------------------
Name: Harley J. Greenfield
Title: Chief Executive Officer
On this 20th day of August, 1999, before me personally appeared Harley
J. Greenfield to me known and known to me to be the Chief Executive Officer of
Jennifer Chicago Ltd., who executed the foregoing instrument on behalf of
Jennifer Chicago Ltd., and he duly acknowledged to me that he executed the same
on behalf of Jennifer Chicago Ltd., for the purpose above stated, and, being by
me duly sworn, did depose and say that the statements therein contained are
true.
/s/ Graziana Gallo
- -----------------------------
Notary Public
JARA ENTERPRISES
By: /s/ Fred J. Love
------------------------------------
Name: Fred J. Love
Title: President
On this 20th day of August, 1999, before me personally appeared Fred J.
Love, to me known and known to me to be the President of Jara Enterprises, Inc.,
who executed the foregoing instrument on behalf of Jara Enterprises, Inc.,
President of Jara Enterprises, Inc., and he duly acknowledged to me that he
executed the same on behalf of Jara Enterprises, Inc., for the purpose above
stated, and, being by me duly sworn, did depose and say that the statements
therein contained are true.
Graziana Gallo
- -----------------------------
Notary Public
2
<PAGE>
/s/ Harley J. Greenfield
-------------------------------
Harley J. Greenfield
On this 20th day of August, 1999, before me personally appeared Harley
J. Greenfield who executed the foregoing instrument and he duly acknowledged to
me that he executed the same for the purpose above stated, and, being by me duly
sworn, did depose and say that the statements therein contained are true.
/s/ Graziana Gallo
- -----------------------------
Notary Public
/s/ Edward B. Seidner
-------------------------------
Edward B. Seidner
On this 20th day of August, 1999, before me personally appeared Edward
B. Seidner who executed the foregoing instrument and he duly acknowledged to me
that he executed the same for the purpose above stated, and, being by me duly
sworn, did depose and say that the statements therein contained are true.
/s/ Graziana Gallo
- -----------------------------
Notary Public
/s/ Fred J. Love
-------------------------------
Fred J. Love
On this 20th day of August, 1999, before me personally appeared Fred J.
Love who executed the foregoing instrument and he duly acknowledged to me that
he executed the same for the purpose above stated, and, being by me duly sworn,
did depose and say that the statements therein contained are true.
/s/ Graziana Gallo
- -----------------------------
Notary Public
3
TERM NOTE
$447,000 New York, New York
Date: As of September 1, 1999
FOR VALUE RECEIVED, JENNIFER CONVERTIBLES, INC. (the
"Company"), promises to pay to the order of JENCO PARTNERS, L.P. (the "Payee"),
at its executive office or at such other address as to which the Payee shall
give written notice to the Company as set forth below in lawful money of the
United States of America and in immediately available funds, the sum of Four
Hundred Forty-Seven Thousand Dollars ($447,000).
Payments of principal shall be made as follows: One
installment of $223,500 shall be paid on February 1, 2000 and the balance of the
principal ($223,500) shall be paid on September 1, 2000. This Note shall bear
interest on the unpaid principal amount thereof at a rate per annum equal to the
prime rate of Citibank, N.A. plus 3%. Accrued interest through the date of any
payment of principal (including any prepayment of principal) shall be paid at
the same time as payments of principal are made.
If any payment of this Note becomes due and payable on a
Saturday, Sunday or a legal bank holiday under the laws of the State of New
York, the maturity thereof shall be extended to the next succeeding business day
and interest thereon shall be payable at the rate set forth above during such
extension.
The Company may prepay this Note in whole or in part at any
time without premium or penalty.
Only the following events shall constitute an event of default
under this Note (an "Event of Default"):
(i) The Company makes an assignment for the benefit of
creditors or admits in writing its inability to pay its debts as they become
due, or commences a voluntary case under the federal bankruptcy laws (as now or
hereafter in effect), or is adjudicated a bankrupt or insolvent, or files any
petition or answer seeking for himself any liquidation, arrangement,
composition, reorganization, readjustment or similar relief under any present or
future statue, law or regulation pertaining to insolvency or creditors' rights,
or files any answer admitting the material allegations of a petition filed
against him in any such proceeding, or seeks or consents to or acquiesces in the
appointment of any trustee, receiver, liquidator or similar official for himself
or all or any substantial part of its properties; or
(ii) If within 60 days after the commencement of any
proceeding against the Borrower seeking any liquidation, arrangement,
composition, reorganization, readjustment or similar relief under any present or
future statute, law or regulation pertaining to insolvency or creditors' the
Borrower, such proceeding is not dismissed, or if within 60 days after the
appointment without the consent or acquiescence of the Borrower or any trustee,
receiver, liquidator or similar official for the Borrower or of all or any
substantial part of its properties, such appointment is not vacated.
<PAGE>
(iii) The Company shall fail to make any payment of principal
or interest when due under this Note.
(iv) The Company shall breach in any material respect its
obligations under an L.P. and Option Purchase and Termination Agreement among
the Company, the Borrower and certain other parties named therein dated as of
even date herewith.
Upon the occurrence of any Event of Default under (iii) and
(iv) above, Payee, after giving the Borrower 30 days to cure such Event of
Default in the event of an Event of Default under (iv) above, but without any
such 30-day period in the case of a default under (iii) above, may, if such
Event of Default has not been cured, by written notice to the Borrower, at
Payee's option, declare the entire unpaid principal amount of this Note,
together with accrued interest thereon, to be due and payable, whereupon the
same shall forthwith mature and become due and payable, and Payee shall have
such other remedies as Payee may have at law, equity or otherwise. Upon the
occurrence of any Event of Default under (i) or (ii) above, the entire unpaid
principal amount of this Note, together with accrued interest thereon, shall
become automatically due and payable without notice of any kind.
No failure on the part of Payee to exercise, and no delay in
exercising, and no course of dealing with respect to, any right hereunder shall
operate as a waiver hereof; nor shall any single or partial exercise of any
right hereunder preclude any other or further exercise hereof or the exercise of
any other right.
Presentment for payment, notice of dishonor, protest, and
notice of protest are hereby waived.
The Company agrees to pay all costs including, without
limitation, all reasonable attorneys' fees incurred by the Payee in collecting
or enforcing payment of this Note in accordance with its terms.
This Note may be modified or cancelled, only by the written
agreement of the Company and the Payee. Failure of the Payee hereof to assert
any right herein shall not be deemed to be a waiver thereof.
JENNIFER CONVERTIBLES, INC.
By: /s/ Harley J. Greenfield
-------------------------------
Harley J. Greenfield
Chief Executive Officer
