-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, NUJVESt+tPIsKqfYDM75ix+AY++vDvRsRMDrpry15svhwud908S/NZxDPxIA3vjo 9WBwwIx8mImYbOjQ/zvCHw== 0000909518-02-000083.txt : 20020414 0000909518-02-000083.hdr.sgml : 20020414 ACCESSION NUMBER: 0000909518-02-000083 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 7 FILED AS OF DATE: 20020206 GROUP MEMBERS: AC ISRAEL ENTERPRISES, INC. GROUP MEMBERS: EZRA S. FIELD GROUP MEMBERS: J ACQUISITION CORP. GROUP MEMBERS: J HOLDINGS CORP. GROUP MEMBERS: KEVIN S. PENN SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: JENNY CRAIG INC/DE CENTRAL INDEX KEY: 0000878865 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PERSONAL SERVICES [7200] IRS NUMBER: 330366188 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-42104 FILM NUMBER: 02529045 BUSINESS ADDRESS: STREET 1: 445 MARINE VIEW AVE STE 300 CITY: DEL MAR STATE: CA ZIP: 92014 BUSINESS PHONE: 6192597000 MAIL ADDRESS: STREET 1: 445 MARINE VIEW AVENUE STREET 2: SUITE 300 CITY: DEL MAR STATE: CA ZIP: 92014 FORMER COMPANY: FORMER CONFORMED NAME: CRAIG JENNY INC /DE DATE OF NAME CHANGE: 19930328 FORMER COMPANY: FORMER CONFORMED NAME: JCI HOLDINGS INC DATE OF NAME CHANGE: 19600201 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: ACI CAPITAL CO INC CENTRAL INDEX KEY: 0001166543 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 900 THIRD AVE STREET 2: 26TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10153 BUSINESS PHONE: 2126343333 MAIL ADDRESS: STREET 1: 900 THIRD AVE STREET 2: 26TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10153 SC 13D 1 the-d.txt ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 --------------------------- JENNY CRAIG, INC. (Name of Issuer) COMMON STOCK, PAR VALUE $0.000000005 PER SHARE 22406102 (Title of Class of Securities) (CUSIP Number) KEVIN S. PENN ACI CAPITAL CO., INC. 900 THIRD AVENUE, 26TH FLOOR NEW YORK, NEW YORK 10022 (212) 634-3333 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) WITH A COPY TO: HOWARD CHATZINOFF, ESQ. WEIL, GOTSHAL & MANGES LLP 767 FIFTH AVENUE NEW YORK, NEW YORK 10153 JANUARY 27, 2002 (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box [ ]. Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7(b) for other parties to whom copies are to be sent. * The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934 (the "Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act. (However, see the Notes.) (Continued on following pages) (Page 1 of 20 pages) ================================================================================
- --------------------------------- ------------------------- ------------------------------------------------------- CUSIP number 22406102 13D Page 2 of 20 Pages - --------------------------------- ------------------------- ------------------------------------------------------- - -------------- -------------------------------------------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON: A.C. ISRAEL ENTERPRISES, INC. S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON: - -------------- -------------------------------------------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (A) [ ] (B) [X] - -------------- -------------------------------------------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------- -------------------------------------------------------------------------------------------------------------------- 4 SOURCE OF FUNDS: NOT APPLICABLE - -------------- -------------------------------------------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e): [_] - -------------- -------------------------------------------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION: DELAWARE - -------------- -------------------------------------------------------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER: SHARES -------- ------------------------------------------------------------------------------------------------ BENEFICIALLY 8 SHARED VOTING POWER: 13,838,600 SHARES OF COMMON STOCK (SEE ITEM 5) OWNED BY -------- ------------------------------------------------------------------------------------------------ EACH 9 SOLE DISPOSITIVE POWER: REPORTING -------- ------------------------------------------------------------------------------------------------ PERSON WITH 10 SHARED DISPOSITIVE POWER: 13,838,600 SHARES OF COMMON STOCK (SEE ITEM 5) - -------------- -------------------------------------------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON: 13,838,600 SHARES OF COMMON STOCK (SEE ITEM 5) - -------------- -------------------------------------------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES: [_] - -------------- -------------------------------------------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 66.9% (SEE ITEM 5) - -------------- -------------------------------------------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON: CO - -------------- -------------------------------------------------------------------------------------------------------------------- 2 - --------------------------------- ------------------------- ------------------------------------------------------- CUSIP number 22406102 13D Page 3 of 20 Pages - --------------------------------- ------------------------- ------------------------------------------------------- - -------------- -------------------------------------------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON: ACI CAPITAL CO., INC. S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON: - -------------- -------------------------------------------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (A) [ ] (B) [X] - -------------- -------------------------------------------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------- -------------------------------------------------------------------------------------------------------------------- 4 SOURCE OF FUNDS: NOT APPLICABLE - -------------- -------------------------------------------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e): [_] - -------------- -------------------------------------------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION: DELAWARE - -------------- -------------------------------------------------------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER: SHARES -------- ------------------------------------------------------------------------------------------------ BENEFICIALLY 8 SHARED VOTING POWER: 13,838,600 SHARES OF COMMON STOCK (SEE ITEM 5) OWNED BY -------- ------------------------------------------------------------------------------------------------ EACH 9 SOLE DISPOSITIVE POWER: REPORTING -------- ------------------------------------------------------------------------------------------------ PERSON WITH 10 SHARED DISPOSITIVE POWER: 13,838,600 SHARES OF COMMON STOCK (SEE ITEM 5) - -------------- -------------------------------------------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON: 13,838,600 SHARES OF COMMON STOCK (SEE ITEM 5) - -------------- -------------------------------------------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES: [_] - -------------- -------------------------------------------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 66.9% (SEE ITEM 5) - -------------- -------------------------------------------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON: CO - -------------- -------------------------------------------------------------------------------------------------------------------- 3 - --------------------------------- ------------------------- ------------------------------------------------------- CUSIP number 22406102 13D Page 4 of 20 Pages - --------------------------------- ------------------------- ------------------------------------------------------- - -------------- -------------------------------------------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON: J HOLDINGS CORP. S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON: - -------------- -------------------------------------------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (A) [ ] (B) [X] - -------------- -------------------------------------------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------- -------------------------------------------------------------------------------------------------------------------- 4 SOURCE OF FUNDS: WC, OO, SC - -------------- -------------------------------------------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e): [_] - -------------- -------------------------------------------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION: DELAWARE - -------------- -------------------------------------------------------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER: SHARES -------- ------------------------------------------------------------------------------------------------ BENEFICIALLY 8 SHARED VOTING POWER: 13,838,600 SHARES OF COMMON STOCK (SEE ITEM 5) OWNED BY -------- ------------------------------------------------------------------------------------------------ EACH 9 SOLE DISPOSITIVE POWER: REPORTING -------- ------------------------------------------------------------------------------------------------ PERSON WITH 10 SHARED DISPOSITIVE POWER: 13,838,600 SHARES OF COMMON STOCK (SEE ITEM 5) - -------------- -------------------------------------------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON: 13,838,600 SHARES OF COMMON STOCK (SEE ITEM 5) - -------------- -------------------------------------------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES: [_] - -------------- -------------------------------------------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 66.9% (SEE ITEM 5) - -------------- -------------------------------------------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON: CO - -------------- -------------------------------------------------------------------------------------------------------------------- 4 - --------------------------------- ------------------------- ------------------------------------------------------- CUSIP number 22406102 13D Page 5 of 20 Pages - --------------------------------- ------------------------- ------------------------------------------------------- - -------------- -------------------------------------------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON: J ACQUISITION CORP. S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON: - -------------- -------------------------------------------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (A) [ ] (B) [X] - -------------- -------------------------------------------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------- -------------------------------------------------------------------------------------------------------------------- 4 SOURCE OF FUNDS: WC, OO, SC - -------------- -------------------------------------------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e): [_] - -------------- -------------------------------------------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION: DELAWARE - -------------- -------------------------------------------------------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER: SHARES -------- ------------------------------------------------------------------------------------------------ BENEFICIALLY 8 SHARED VOTING POWER: 13,838,600 SHARES OF COMMON STOCK (SEE ITEM 5) OWNED BY -------- ------------------------------------------------------------------------------------------------ EACH 9 SOLE DISPOSITIVE POWER: REPORTING -------- ------------------------------------------------------------------------------------------------ PERSON WITH 10 SHARED DISPOSITIVE POWER: 13,838,600 SHARES OF COMMON STOCK (SEE ITEM 5) - -------------- -------------------------------------------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON: 13,838,600 SHARES OF COMMON STOCK (SEE ITEM 5) - -------------- -------------------------------------------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES: [_] - -------------- -------------------------------------------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 66.9% (SEE ITEM 5) - -------------- -------------------------------------------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON: CO - -------------- -------------------------------------------------------------------------------------------------------------------- 5 - --------------------------------- ------------------------- ------------------------------------------------------- CUSIP number 22406102 13D Page 6 of 20 Pages - --------------------------------- ------------------------- ------------------------------------------------------- - -------------- -------------------------------------------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON: KEVIN S. PENN S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON: - -------------- -------------------------------------------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (A) [ ] (B) [X] - -------------- -------------------------------------------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------- -------------------------------------------------------------------------------------------------------------------- 4 SOURCE OF FUNDS: NOT APPLICABLE - -------------- -------------------------------------------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e): [_] - -------------- -------------------------------------------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION: UNITED STATES OF AMERICA - -------------- -------------------------------------------------------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER: SHARES -------- ------------------------------------------------------------------------------------------------ BENEFICIALLY 8 SHARED VOTING POWER: 13,838,600 SHARES OF COMMON STOCK (SEE ITEM 5) OWNED BY -------- ------------------------------------------------------------------------------------------------ EACH 9 SOLE DISPOSITIVE POWER: REPORTING -------- ------------------------------------------------------------------------------------------------ PERSON WITH 10 SHARED DISPOSITIVE POWER: 13,838,600 SHARES OF COMMON STOCK (SEE ITEM 5) - -------------- -------------------------------------------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON: 13,838,600 SHARES OF COMMON STOCK (SEE ITEM 5) - -------------- -------------------------------------------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES: [_] - -------------- -------------------------------------------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 66.9% (SEE ITEM 5) - -------------- -------------------------------------------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON: IN - -------------- -------------------------------------------------------------------------------------------------------------------- 6 - --------------------------------- ------------------------- ------------------------------------------------------- CUSIP number 22406102 13D Page 7 of 20 Pages - --------------------------------- ------------------------- ------------------------------------------------------- - -------------- -------------------------------------------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON: EZRA S. FIELD S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON: - -------------- -------------------------------------------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (A) [ ] (B) [X] - -------------- -------------------------------------------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------- -------------------------------------------------------------------------------------------------------------------- 4 SOURCE OF FUNDS: NOT APPLICABLE - -------------- -------------------------------------------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e): [_] - -------------- -------------------------------------------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION: UNITED STATES OF AMERICA - -------------- -------------------------------------------------------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER: SHARES -------- ------------------------------------------------------------------------------------------------ BENEFICIALLY 8 SHARED VOTING POWER: 13,838,600 SHARES OF COMMON STOCK (SEE ITEM 5) OWNED BY -------- ------------------------------------------------------------------------------------------------ EACH 9 SOLE DISPOSITIVE POWER: REPORTING -------- ------------------------------------------------------------------------------------------------ PERSON WITH 10 SHARED DISPOSITIVE POWER: 13,838,600 SHARES OF COMMON STOCK (SEE ITEM 5) - -------------- -------------------------------------------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON: 13,838,600 SHARES OF COMMON STOCK (SEE ITEM 5) - -------------- -------------------------------------------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES: [_] - -------------- -------------------------------------------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 66.9% (SEE ITEM 5) - -------------- -------------------------------------------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON: IN - -------------- --------------------------------------------------------------------------------------------------------------------
7 ITEM 1. SECURITY AND ISSUER. This statement relates to the shares of Common Stock, par value $0.000000005 per share (the "Company Common Stock"), of Jenny Craig, Inc., a Delaware corporation (the "Company"). The principal executive offices of the Company are located at 11355 N. Torrey Pines Road, La Jolla, California 92037. ITEM 2. IDENTITY AND BACKGROUND. This statement is filed by A.C. Israel Enterprises, Inc., a Delaware corporation ("AC Israel"), for and on behalf of itself, ACI Capital Co., Inc., a Delaware corporation ("ACI"), J Acquisition Corp., a Delaware corporation ("JAC"), J Holdings Corp., a Delaware corporation ("J Holdings"), Kevin S. Penn ("Mr. Penn") and Ezra S. Field ("Mr. Field" and, collectively with AC Israel, ACI, J Holdings, JAC and Mr. Penn referred to herein as the "Reporting Persons"). AC Israel owns all of the outstanding voting and equity securities of ACI. All of the voting stock of AC Israel is owned by two trusts: (x) Trust under the will of Adrian C. Israel, Paragraph 7(a) FBO James C. Israel and (y) Trust under the will of Adrian C. Israel, Paragraph 7(a) FBO Thomas C. Israel. AC Israel is a corporation which manages assets on behalf of its stockholders. AC Israel maintains its principal executive offices at 707 Westchester Avenue, Fourth Floor, White Plains, New York 10604. ACI owns all of the outstanding voting and equity securities of J Holdings. ACI is engaged in the business of investing in public and private entities. ACI maintains its principal executive offices at 900 Third Avenue, New York, New York 10022. J Holdings, which owns all of the outstanding voting and equity securities of JAC, is a holding company which was incorporated on January 16, 2002 for the purpose of acquiring the Company pursuant to the Merger (as defined below). J Holdings maintains its principal executive offices at c/o ACI Capital Co., Inc., 900 Third Avenue, New York, New York 10022. JAC was incorporated on December 26, 2001 for the purpose of merging with the Company pursuant to the terms and conditions of the Merger Agreement (as defined below). JAC maintains its principal executive offices at c/o ACI Capital Co., Inc., 900 Third Avenue, New York, New York 10022. Mr. Penn's principal occupation is serving as Managing Director of ACI. His business address is 900 Third Avenue, New York, New York 10022. Mr. Penn is a citizen of the United States of America ("US"). Mr. Field's principal occupation is serving as Vice President of ACI. His business address is 900 Third Avenue, New York, New York 10022. Mr. Field is a citizen of the US. 8 (a), (b) and (c). For information with respect to the identity and background of each executive officer and director of each Reporting Person, see Schedules I - IV attached hereto, respectively. (d) and (e). During the last five years, none of the Reporting Persons or, to the best of their knowledge, any person identified in Schedules I - IV has been (i) convicted of any criminal proceeding (excluding traffic violations or similar misdemeanors) or (ii) a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to federal or state securities laws or finding any violation with respect to such laws. ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. The aggregate purchase price for the Company Common Stock is approximately $115 million. The source of the funds for the purchase will be working capital and debt of J Holdings and JAC as described in Item 6 herein and cash of the Company. ITEM 4. PURPOSE OF TRANSACTION. On January 27, 2002, the Company, J Holdings and JAC entered into an Agreement and Plan of Merger (the "Merger Agreement"). The Merger Agreement provides, among other things and as stated in the Merger Agreement, for the merger (the "Merger") of JAC with and into the Company, with the Company continuing as the surviving corporation. In the Merger, each validly issued and outstanding share of the Company's Common Stock, other than those shares held in the Company's treasury, and those shares owned by dissenting stockholders of the Company, will be converted into the right to receive $5.30 per share in cash. Simultaneously with the execution of the Merger Agreement, J Holdings and JAC entered into a Stockholders' Voting Agreement dated January 27, 2002 (the "Voting Agreement") by and among the Company, J Holdings, JAC and certain holders of Company Common Stock set forth on Schedule V hereto (the "Stockholders"). Each of ACI, J Holdings and JAC also entered into certain Finance Letter Agreements as described in Item 6 herein. Copies of the Merger Agreement and Voting Agreement are attached hereto as Exhibits 2 and 3 respectively. A. The Voting Agreement Under the terms of the Voting Agreement, the Stockholders have agreed (i) to vote certain shares of the Company's Common Stock owned by such Stockholders (the "Shares") in favor of the approval and adoption of the Merger Agreement, the Merger and all transactions contemplated by the Merger Agreement and the Voting Agreement and any other actions required in furtherance 9 of such agreements, (ii) to vote the Shares against any action or agreement that would result in a breach in any respect of any covenant, representation or warranty or any other obligation or agreement of the Company under the Merger Agreement, and (iii) to vote the Shares against: (A) any extraordinary corporate transaction, such as a merger, consolidation or other business combination involving the Company or any of its subsidiaries (other than the Merger and the transactions contemplated by the Merger Agreement); (B) a sale, lease or transfer of a material amount of the Company's assets or any of its subsidiaries, or a reorganization, recapitalization, dissolution or liquidation of the Company or any of its subsidiaries; (C) any change in a majority of the persons who constitute the board of directors of the Company; (D) any change in the present capitalization of the Company or any amendment of the Company's certificate of incorporation or bylaws; (E) any other material change in the Company's corporate structure or business; or (F) any other action involving the Company or any of its subsidiaries which is intended, or could reasonably be expected, to impede, interfere with, delay, postpone, or adversely affect the Merger and the transactions contemplated by the Merger Agreement, including, without limitation, any action to approve or facilitate any inquiry, offer or proposal by a third party (x) to acquire the Company or any of its material subsidiaries, or (z) with respect to a merger, consolidation or other business combination, sale of shares, sale of assets, tender offer or exchange offer, liquidation or dissolution or similar transaction, involving the Company or its subsidiaries. Each Stockholder has also agreed to grant J Holdings and Mssrs. Penn and Field, as officers of J Holdings, an irrevocable proxy to vote the Shares in the manner contemplated by the foregoing sentence. In addition, each Stockholder is prohibited from (i) selling, transferring or encumbering the Shares, (ii) depositing the Shares into a voting trust or making an arrangement with respect to the voting of the Shares, and (iii) entering into any agreement to do either of the foregoing prohibited activities. Also under the Voting Agreement, the Stockholders have agreed to pay to J Holdings a percentage of the profits realized by them from certain change of control transactions which are either (i) consummated within the twelve month period following termination of the Merger Agreement, or (ii) as to which a definitive agreement is entered into within the twelve-month period following termination of the Merger Agreement and such transaction is consummated on or prior to June 30, 2003, in each case if such termination occurs for certain specified reasons. The Voting Agreement terminates on the earlier of (i) the consummation of the Merger, or (ii) the date of termination of the Merger Agreement, except that the profit recapture provisions of the Voting Agreement only terminate under certain specified circumstances. The foregoing summary of the Voting Agreement is not intended to be complete and is qualified in its entirety by reference to the Voting Agreement, which is attached hereto as Exhibit 3 and which is incorporated herein by reference. 10 ITEM 5. INTEREST IN SECURITIES OF THE ISSUER. (a) and (b) For the purpose of Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), the Reporting Persons, by reason of the execution and delivery of the Voting Agreement referenced in Item 4 above, may be deemed to have shared voting power and/or shared dispositive power with respect to (and therefore beneficially own) 13,838,600 Shares, representing 66.9% of the outstanding Company Common Stock. Except as set forth in this Item 5, none of the Reporting Persons, or any person controlling the Reporting Persons, nor, to the best of their knowledge, any person identified on Schedules I through IV hereto, owns beneficially any Company Common Stock. (c) Except for the execution and delivery of the Voting Agreement and the Merger Agreement referenced in Item 4 hereof and the Finance Letter Agreements referenced in Item 6 hereof, no transactions in Company Common Stock were effected by any of the Reporting Persons, or, to the best of their knowledge, any of the persons identified in Schedules I through IV hereto, during the 60 days prior to the date hereof. (d) To the best of the Reporting Persons' knowledge, no other person has the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the Shares other than the current holders of the Shares as set forth on Schedule V hereto. (e) Not applicable. ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER. In connection with the Merger, and in order to finance, in part, the Merger, the Reporting Persons entered into several financing arrangements as described below. J Holdings and ACI entered into an equity capital commitment letter agreement (the "ACI Equity Capital Commitment Letter"), which provides that ACI will invest $6 million in the equity capital of J Holdings, such investment to be allocated between preferred stock and common stock of J Holdings. The commitment to contribute such capital for securities of J Holdings is subject to certain conditions, including the satisfaction of certain conditions precedent to the Merger contained in the Merger Agreement. ACI, J Holdings and JAC entered into an equity capital commitment letter (the "DBCI Equity Capital Commitment Letter") with DB Capital Investors, L.P., a Delaware limited partnership ("DBCI"), which provides that DBCI will invest $10 million in the equity capital of J Holdings, such investment to be allocated between preferred stock and common stock of J Holdings. The commitment to contribute such capital for securities of J Holdings 11 is subject to certain conditions, including the satisfaction of certain conditions precedent to the Merger contained in the Merger Agreement. J Holdings entered into an equity capital commitment letter (the "SJF Equity Capital Commitment Letter") with SJF Enterprises, Inc., one of the Stockholders and a Delaware corporation ("SJF"), which provides that SJF will contribute 754,717 shares of the Company Common Stock (valued at the $5.30 per share) immediately prior to the consummation of the Merger in exchange for a combination of preferred stock and common stock of J Holdings. The commitment to contribute such shares of the Company Common Stock for securities of J Holdings is subject to certain conditions, including the satisfaction of certain conditions precedent to the Merger contained in the Merger Agreement. ACI, J Holdings and JAC entered into a junior subordinated debt commitment letter (the "DBCI Junior Subordinated Debt Commitment Letter") with DBCI, which provides that DBCI will lend $15 million to JAC. The commitment to lend such capital to JAC is subject to certain conditions, including the satisfaction of certain conditions precedent to the Merger contained in the Merger Agreement. JAC and ACI entered into a junior subordinated debt commitment letter (the "ACI Junior Subordinated Debt Commitment Letter"), which provides that ACI will lend $9 million to JAC. The commitment to lend such capital to JAC is subject to certain conditions, including the satisfaction of certain conditions precedent to the Merger contained in the Merger Agreement. ACI entered into a senior lending commitment letter (the "Senior Debt Commitment Letter", and collectively with the ACI Equity Capital Commitment Letter, the DBCI Equity Commitment Letter, the SJF Equity Capital Commitment Letter, the DBCI Junior Subordinated Debt Commitment Letter, and the ACI Junior Subordinated Debt Commitment Letter, the "Finance Letter Agreements") with Ableco Finance LLC, a Delaware limited liability company ("Ableco"), which provides that Ableco will lend up to $35 million to the Company and those of its subsidiaries designated by Ableco as borrowers. The commitment to lend such capital to the Company is subject to certain conditions, including the satisfaction of certain conditions precedent to the Merger contained in the Merger Agreement. The foregoing summary of the Finance Letter Agreements is not intended to be complete and is qualified in its entirety by reference to the Finance Letter Agreements, which are attached hereto as Exhibits 4-9 and which are incorporated herein by reference. Except for the Merger Agreement, the Voting Agreement and the Finance Letter Agreements described herein, to the best knowledge of the Reporting Persons, there are no contracts, arrangements, understandings or relationships (legal or otherwise) between any of the Reporting Persons or any other person with respect to any securities of the Company, including but not limited to, transfer or voting of any of the securities, finder's fees, joint ventures, loan or option arrangements, puts or calls, guarantees of profits, 12 division of profits or loss, or the giving or withholding of proxies or a pledge or contingency the occurrence of which would give another person voting power over the Company Common Stock. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS. Exhibit 1 Joint Reporting Agreement dated as of February 6, 2002, by and among the Reporting Persons. Exhibit 2 Agreement and Plan of Merger, dated as of January 27, 2002, by and among J Holdings Corp., J Acquisition Corp. and Jenny Craig, Inc. (Incorporated herein by reference to Exhibit 2.1 to the Report on Form 8-K of Issuer filed on January 28, 2002.) Exhibit 3 Stockholders' Voting Agreement, dated as of January 27, 2002, by and among J Holdings Corp., J Acquisition Corp. and each of the Stockholders. (Incorporated herein by reference to Exhibit 10.1 to the Report on Form 8-K of Issuer filed on January 28, 2002.) Exhibit 4 Equity capital commitment letter from ACI Capital Co., Inc., dated January 27, 2002, addressed to J Holdings Corp. Exhibit 5 Equity capital commitment letter from DB Capital Investors, L.P., dated January 27, 2002, addressed to J Holdings Corp., J Acquisition Corp. and ACI Capital Co., Inc. Exhibit 6 Equity capital commitment letter from SJF Enterprises, Inc., dated January 27, 2002, addressed to J Holdings Corp. (Incorporated herein by reference to Exhibit 10.2 to the Report on Form 8-K of Issuer filed on January 28, 2002.) Exhibit 7 Junior subordinated debt commitment letter from DB Capital Investors, L.P., dated January 27, 2002, addressed to ACI Capital Co., Inc., J Holdings Corp. and J Acquisition Corp. Exhibit 8 Junior subordinated debt commitment letter from ACI Capital Co., Inc., dated January 27, 2002, addressed to J Acquisition Corp. Exhibit 9 Senior debt commitment letter from Ableco Finance LLC, dated December 28, 2001, addressed to ACI Capital Co., Inc. 13 SIGNATURES After reasonable inquiry and to the best of their knowledge and belief, the undersigned certify that the information set forth in this statement is true, complete and correct. Dated: February 6, 2002 A.C. ISRAEL ENTERPRISES, INC. By: /s/ Jay M. Howard -------------------------------------------- Name: Jay M. Howard Title: Vice President, Secretary, General Counsel ACI CAPITAL CO., INC. By: /s/ Kevin S. Penn -------------------------------------------- Name: Kevin S. Penn Title: Managing Director J HOLDINGS CORP. By: /s/ Kevin S. Penn -------------------------------------------- Name: Kevin S. Penn Title: President J ACQUISITION CORP. By: /s/ Kevin S. Penn -------------------------------------------- Name: Kevin S. Penn Title: President /s/ Kevin S. Penn -------------------------------------------- Kevin S. Penn /s/ Ezra S. Field -------------------------------------------- Ezra S. Field 14 EXHIBIT INDEX Exhibit No. Description - ----------- ----------- Exhibit 1 Joint Reporting Agreement dated as of February 6, 2002, by and among the Reporting Persons. Exhibit 2 Agreement and Plan of Merger, dated as of January 27, 2002, by and among J Holdings Corp., J Acquisition Corp. and Jenny Craig, Inc. (Incorporated herein by reference to Exhibit 2.1 to the Report on Form 8-K of Issuer filed on January 28, 2002.) Exhibit 3 Stockholders' Voting Agreement, dated as of January 27, 2002, by and among J Holdings Corp., J Acquisition Corp. and each of the Stockholders. (Incorporated herein by reference to Exhibit 10.1 to the Report on Form 8-K of Issuer filed on January 28, 2002.) Exhibit 4 Equity capital commitment letter from ACI Capital Co., Inc., dated January 27, 2002, addressed to J Holdings Corp. Exhibit 5 Equity capital commitment letter from DB Capital Investors, L.P., dated January 27, 2002, addressed to J Holdings Corp., J Acquisition Corp. and ACI Capital Co., Inc. Exhibit 6 Equity capital commitment letter from SJF Enterprises, Inc., dated January 27, 2002, addressed to J Holdings Corp. (Incorporated herein by reference to Exhibit 10.2 to the Report on Form 8-K of Issuer filed on January 28, 2002.) Exhibit 7 Junior subordinated debt commitment letter from DB Capital Investors, L.P., dated January 27, 2002, addressed to ACI Capital Co., Inc., J Holdings Corp. and J Acquisition Corp. Exhibit 8 Junior subordinated debt commitment letter from ACI Capital Co., Inc., dated January 27, 2002, addressed to J Acquisition Corp. Exhibit 9 Senior debt commitment letter from Ableco Finance LLC, dated December 28, 2001, addressed to ACI Capital Co., Inc. 15 SCHEDULE I TO SCHEDULE 13D -------------------------- A.C. ISRAEL ENTERPRISES, INC. DIRECTORS AND EXECUTIVE OFFICERS Set forth below are the name and present principal occupation or employment of each director and executive officer of A.C. Israel Enterprises, Inc. Except as otherwise set forth herein, the business address of each director and executive officer is c/o A.C. Israel Enterprises, Inc., 707 Westchester Avenue, Fourth Floor, White Plains, New York 10604. All persons are citizens of the United States. Name Present Principal Occupation or Employment - ---- ------------------------------------------ John Campbell Of Counsel (attorney at law), Curtis Mallet Prevost Colt & Mosle L.L.P., 101 Park Avenue, 35 Floor, New York, New York 10178 Stephen R. Finkelstein Chief Financial Officer, Assistant Vice President, Assistant Secretary, Treasurer, A.C. Israel Enterprises, Inc., Barry W. Gray President, A.C. Israel Enterprises, Inc. Jay M. Howard Vice President, Secretary, General Counsel, A.C. Israel Enterprises, Inc., Thomas C. Israel Chief Executive Officer, A.C. Israel Enterprises, Inc. 16 SCHEDULE II TO SCHEDULE 13D --------------------------- ACI CAPITAL CO., INC. DIRECTORS AND EXECUTIVE OFFICERS Set forth below are the name and present principal occupation or employment of each director and executive officer of ACI Capital Co. Inc. Except as otherwise set forth herein, the business address of each director and executive officer is c/o ACI Capital Co. Inc., 900 Third Avenue, New York, New York 10022. All persons are citizens of the United States. Name Present Principal Occupation or Employment - ---- ------------------------------------------ Stephen R. Finkelstein Chief Financial Officer, Assistant Vice President, Assistant Secretary, Treasurer, A.C. Israel Enterprises, Inc., 707 Westchester Avenue, Fourth Floor, White Plains, New York 10604 Jay M. Howard Vice President, Secretary, General Counsel, A.C. Israel Enterprises, Inc., 707 Westchester Avenue, Fourth Floor, White Plains, New York 10604 Kevin S. Penn President and Managing Director, ACI Capital Co., Inc. Gregory H. Warner Secretary, Treasurer and Vice President, ACI Capital Co., Inc. 17 SCHEDULE III TO SCHEDULE 13D ---------------------------- J HOLDINGS CORP. DIRECTORS AND EXECUTIVE OFFICERS Set forth below are the name and present principal occupation or employment of each director and executive officer of J Holdings Corp. The business address of each director and executive officer is c/o ACI Capital Co., Inc., 900 Third Avenue, New York, New York 10022. All persons are citizens of the United States. Name Present Principal Occupation or Employment - ---- ------------------------------------------ Ezra S. Field Vice President, ACI Capital Co., Inc. Kevin S. Penn Managing Director, ACI Capital Co., Inc. 18 SCHEDULE IV TO SCHEDULE 13D --------------------------- J ACQUISITION CORP. DIRECTORS AND EXECUTIVE OFFICERS Set forth below are the name and present principal occupation or employment of each director and executive officer of J Acquisition Corp. The business address of each director and executive officer is c/o ACI Capital Co., Inc., 900 Third Avenue, New York, New York 10022. All persons are citizens of the United States. Name Present Principal Occupation or Employment - ---- ------------------------------------------ Ezra S. Field Vice President, ACI Capital Co., Inc. Kevin S. Penn Managing Director, ACI Capital Co., Inc. 19 SCHEDULE V TO SCHEDULE 13D -------------------------- THE STOCKHOLDERS - --------------------------------- --------------------------------------------- NAME OF BENEFICIAL OWNER TOTAL NUMBER OF SHARES OF COMMON STOCK - --------------------------------- --------------------------------------------- Sidney Craig 13,838,600(1) - --------------------------------- --------------------------------------------- Jenny Craig 13,838,600(1) - --------------------------------- --------------------------------------------- Craig Enterprises, Inc. 13,838,600(1) - --------------------------------- --------------------------------------------- SJF Enterprises, Inc. 13,838,600(2) - --------------------------------- --------------------------------------------- DA Holdings, Inc. 1,950,000 - --------------------------------- --------------------------------------------- (1) 13,838,600 of these shares are beneficially owned by SJF. Sidney and Jenny Craig own all of the outstanding voting and equity securities of Craig Enterprises, Inc., which owns all of the outstanding voting and equity securities of SJF. (2) Of the 13,838,600 shares beneficially owned by SJF, 11,888,600 are owned directly by SJF and 1,950,000 are owned directly by DA Holdings, Inc., all of the outstanding voting and equity securities of which are owned by SJF. 20 EX-99 3 ex-1.txt 1 EXHIBIT 1 JOINT REPORTING AGREEMENT Joint Reporting Agreement dated as of February 6, 2002 among A.C. Israel Enterprises, Inc., a Delaware corporation, ACI Capital Co., Inc., a Delaware corporation, J Acquisition Corp., a Delaware corporation, J Holdings Corp., a Delaware corporation, Kevin S. Penn and Ezra S. Field. WHEREAS, each of the parties hereto desires in accordance with Rule 13d-1(k)(1) promulgated under the Securities Exchange Act of 1934, as amended, to make a joint filing of Schedule 13D with respect to the beneficial ownership by the undersigned of common stock of Jenny Craig, Inc., a Delaware corporation (the "Company"). NOW, THEREFORE, the undersigned agree that the Schedule 13D dated February 6, 2002 with respect to the beneficial ownership by the undersigned of shares of common stock of the Company shall be deemed to be filed on behalf of each of the undersigned. This Joint Reporting Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original, and all of which, when taken together, shall constitute one and the same agreement. IN WITNESS WHEREOF, the undersigned have executed this Joint Reporting Agreement as of the date first set forth above. A.C. ISRAEL ENTERPRISES, INC. By: /s/ Jay M. Howard -------------------------------------------- Name: Jay M. Howard Title: Vice President, Secretary, General Counsel ACI CAPITAL CO., INC. By: /s/ Kevin S. Penn -------------------------------------------- Name: Kevin S. Penn Title: Managing Director J HOLDINGS CORP. By: /s/ Kevin S. Penn -------------------------------------------- Name: Kevin S. Penn Title: President J ACQUISITION CORP. By: /s/ Kevin S. Penn -------------------------------------------- Name: Kevin S. Penn Title: President /s/ Kevin S. Penn -------------------------------------------- Kevin S. Penn /s/ Ezra S. Field -------------------------------------------- Ezra S. Field 2 EX-99 4 ex-4.txt 4 EXHIBIT 4 January 27, 2002 J Holdings Corp. 900 Third Avenue 26th Floor New York, New York 10022 Re: Equity Capital Commitment Gentlemen: Reference is made to that certain Agreement and Plan of Merger (the "Agreement"), dated as of the date hereof, by and among J Holdings Corp., a Delaware corporation ("Parent"), J Acquisition Corp., a Delaware corporation and wholly owned subsidiary of Parent (the "Purchaser"), and Jenny Craig, Inc., a Delaware corporation (the "Company"), which agreement contemplates the acquisition by Parent of 100% of the outstanding shares of the Company (such acquisition, together with agreements related thereto or contemplated thereby, representing the "Transaction"). In connection therewith and in order to finance, in part, the Transaction, ACI Capital Co., Inc. (the "Investor") is pleased to advise you that it hereby commits to provide Parent with $6 million of equity capital (the "Investment"), to be allocated between preferred stock (the "Senior Preferred") and common stock of Parent on a nine-to-one basis. The Investor's commitment to provide the Investment is subject in all respects to satisfaction of the terms and conditions contained in this commitment letter and in the Outline of Terms and Conditions attached hereto as Exhibit A (the "Term Sheet"). The Investor's commitment to provide the Investment is subject to (i) the negotiation, execution and delivery of definitive documentation thereof, including, without limitation, a Certificate of Designations of the Senior Preferred, in form and substance satisfactory to the Investor, Parent and their respective counsel, (ii) the satisfaction of the conditions precedent to the closing of the Transaction set forth in Sections 6.1 and 6.3 (other than Section 6.3(c) of the Agreement), (iii) all conditions precedent to the obligation of the Senior Lender (as defined in the Agreement) to consummate the Senior Financing (as defined in the Agreement) having been met and the Senior Lender shall intend to and shall be willing and prepared to consummate the Senior Financing, in each case other than with respect to any conditions relating to the equity capital investment contemplated by this commitment letter, the equity commitment letter of each of DB Capital Investors, L.P. ("DBCI") and SJF Enterprises, Inc., of even date herewith, and the subordinated debt facility commitment letter of each of ACI and DBCI, each of even date herewith, and (iv) satisfaction of the conditions set forth in the Term Sheet attached hereto. The offer made by the Investor in this commitment letter is contingent upon execution of the Agreement, and should the Agreement be executed, the commitment by the Investor to provide the Investment shall expire immediately upon the earlier of (i) the termination of the Agreement and (ii) the Expiration Date (as defined in the Agreement), as may be extended in accordance with the terms of the Agreement. Should the terms and conditions of the offer contained herein meet with your approval, please indicate your acceptance by signing and returning a copy of this commitment letter to the Investor. This commitment letter, including the attached Term Sheet (i) supersedes all prior discussions, agreements, commitments, arrangements, negotiations or understandings, whether oral or written, of the parties with respect to the subject matter hereof and thereof, (ii) shall be governed by the law of the State of New York, (iii) shall be binding upon the parties and their respective successors and assigns, (iv) may not be relied upon or enforced by any other person or entity other than the parties hereto and Purchaser, and (v) may be signed in multiple counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. If this commitment letter becomes the subject of a dispute, each of the parties hereto hereby waives trial by jury. This commitment letter may be amended, modified or waived only in a writing signed by the parties hereto. 2 Please confirm that the foregoing is in accordance with your understanding by signing and returning to the Investor the enclosed copy of this Commitment Letter on or before the close of business on the date hereof, whereupon this Commitment Letter shall become a binding agreement between us. Very truly yours, ACI CAPITAL CO., INC. By: /s/ Kevin S. Penn -------------------------------- Name: Kevin S. Penn Title: Managing Director Agreed and accepted on this 27th day of January, 2002: J HOLDINGS CORP. By: /s/ Kevin S. Penn ------------------------------------------ Name: Kevin S. Penn Title: President 3 EX-99 5 ex-5.txt 5 EXHIBIT 5 DB CAPITAL INVESTORS, L.P. 31 WEST 52ND STREET 26TH FLOOR NEW YORK, NEW YORK 10019 EQUITY COMMITMENT LETTER ------------------------ January 27, 2002 J Holdings Corp. J Acquisition Corp. ACI Capital Co., Inc. c/o ACI Capital Co., Inc. 900 Third Avenue 26th Floor New York, New York 10022 Ladies and Gentlemen: We are pleased to confirm the arrangements under which DB Capital Investors, L.P. ("DBCI") is committed to provide equity capital in connection with the transactions described herein in the amount, on the terms and subject to the conditions set forth in this letter (together, the "COMMITMENT LETTER") and the Fee Letter (as defined below). We understand that J Holdings Corp., a Delaware company ("PARENT", which is a newly formed, wholly owned subsidiary of ACI Capital Co., Inc. ("ACI")), and J Acquisition Corp., a Delaware company and a wholly owned subsidiary of Parent ("PURCHASER"), will sign, concurrently herewith, a merger agreement, dated the date hereof, and in the form attached hereto as EXHIBIT A (along with any other agreements or documents entered into in connection therewith or delivered pursuant thereto, the "ACQUISITION AGREEMENT") to acquire (the "ACQUISITION") all of the issued and outstanding common stock of Jenny Craig, Inc., a Delaware corporation (the "COMPANY"). In addition, in connection with the Acquisition, Parent, Purchaser, Sidney Craig, Jenny Craig, SJF Enterprises, Inc., DA Holdings, Inc., Craig Enterprises, Inc. and the Company will enter into a Stockholders' Voting Agreement, dated the date hereof and substantially in the form attached hereto as EXHIBIT B (along with any other agreements or documents entered into in connection therewith or delivered pursuant thereto, the "VOTING AGREEMENT"). We have confirmed that the total purchase price and financing January 27, 2002 Page 2 requirements (including equity financing being provided by ACI, Company stockholders and management) for the Acquisition will be financed as set forth on EXHIBIT C hereto (the "FINANCINGS"). 1. Commitment. DBCI is pleased to confirm its commitment (the "COMMITMENT") to invest $10 million in the equity capital of Parent, of which $9 million shall be invested in the preferred stock of Parent and $1 million shall be invested in the common stock of Parent, on the terms and subject to the conditions contained in this Commitment Letter and in the outline of terms and conditions attached hereto as Exhibit D (the "TERM SHEET"). DBCI's Commitment is subject, in its discretion, to the conditions set forth in this Commitment Letter and in the Term Sheet and to the negotiation, execution and delivery of definitive documentation evidencing the Financings (along with any other agreements or documents entered into in connection therewith or delivered pursuant thereto, the "FINANCING AGREEMENTS"), satisfactory to DBCI and its counsel and the satisfaction of the terms, conditions and covenants contained therein. 2. Fees and Expenses. The fees for these services, among others, are to be set forth in a separate letter (the "FEE LETTER"), to be entered into prior to the closing of the Acquisition by and among ACI, DBCI, Parent and Purchaser. 3. Conditions Precedent. DBCI's obligations hereunder are conditioned on the following: a. The transactions contemplated by the Acquisition Agreement and the Voting Agreement shall have been consummated concurrently with, or shall be ready for consummation immediately after, DBCI's equity financing hereunder on the terms and conditions set forth in such agreements without modification, amendment or waiver, except as previously consented to in writing by DBCI. All conditions precedent to the obligations of Parent and Purchaser under such agreements (other than Section 6.3(c) of the Acquisition Agreement) shall have been satisfied without modification, amendment or waiver, except as previously consented to in writing by DBCI. b. The transactions contemplated by the Financing Agreements shall have been consummated prior to or concurrently with DBCI's equity financing hereunder in accordance with their terms, without modification, amendment or waiver, except as previously consented to in writing by DBCI. All conditions precedent to the obligations of the lenders or investors under the Financing Agreements shall have been satisfied, other than any conditions relating to the equity capital contemplated by this letter, the equity capital commitment letters from SJF Enterprises, Inc. and ACI and the junior subordinated debt commitment letter from ACI and DBCI, each of even date herewith. c. ACI, Parent and Purchaser shall have complied with their obligations hereunder. 4. Covenants. DBCI, ACI, Parent and Purchaser agree as follows: a. DBCI shall, and shall be permitted to, consummate the investment contemplated by the Commitment in accordance with the terms hereof. January 27, 2002 Page 3 b. Parent and Purchaser shall, and ACI shall cause them to, consummate the transactions contemplated by the Acquisition Agreement and the Voting Agreement and satisfy their obligations thereunder, without amendment, modification or waiver except as previously consented to in writing by DBCI. c. ACI, Parent and Purchaser shall, and ACI shall cause Parent and Purchaser to, consummate the transactions contemplated by the Financing Agreements without amendment, modification or waiver, except as previously consented to in writing by DBCI. Without limiting the generality of the foregoing, there shall be no equity, debt or other financing of any type other than as set forth on EXHIBIT C hereto, without the prior written consent of DBCI. d. Parent and Purchaser shall, and ACI shall cause them to, to the extent commercially reasonable, enforce their respective rights and the obligations of the Company and other parties to the Acquisition Agreement or Voting Agreement (such other parties to the Voting Agreement, the "JC PARTIES"), including any rights to compensation or payments of any kind from any of the Company or the JC Parties whether or not the Acquisition is consummated, whether in respect of damages for breach, payments of termination fees, payments of expenses, gains owing under the Voting Agreement or otherwise. e. ACI, Parent and Purchaser shall promptly keep DBCI informed of, consult and confer with DBCI on all matters relating to the Acquisition, Acquisition Agreement, Voting Agreement, Financing and Financing Agreements and any discussions, communications or negotiations by and between ACI, Parent and Purchaser on the one hand and any of the Company or the JC Parties on the other hand in respect thereof. Such obligation shall include provision of copies of material correspondence, documents and other information and adequate notice and opportunity to attend conferences and meetings in respect thereof. In addition ACI, Parent and Purchaser shall apprise DBCI of, and consult with DBCI concerning all actions they may take or consider pursuant to or as contemplated by the Acquisition Agreement, Voting Agreement and Financing Agreements including exercise of rights thereunder regarding termination, information, further assurances, covenants, conditions, rights upon breach, enforcement of nonsolicitation and other rights. f. Without limiting DBCI's other rights in this Commitment Letter, in the event that an alternate bidder for the Company emerges or for some other reason an altered or improved bid for the Company is necessary or contemplated, DBCI will be given the opportunity, but will not be obligated, to participate in any transactions contemplated in order to improve the terms of the Acquisition Agreement or make an alternative offer for the Company on the same percentage basis relative to ACI as the percentage resulting from dividing DBCI's original commitment to purchase debt and equity capital in Parent hereunder by ACI's original commitment to purchase debt and equity capital in Parent. January 27, 2002 Page 4 5. Acknowledgment. Each of ACI and DBCI has, independently and without reliance on the other party, based on such information and due diligence it has conducted as it has deemed appropriate, made its own analysis and decision to enter into its commitment to invest in Parent and to enter into the other documents and transactions contemplated by the Acquisition and the Acquisition Agreement. Each of ACI and DBCI will independently and without reliance upon the other party, continue to make its own decisions and to conduct its own due diligence with respect to the operation of the Company and the matters, transactions and any related agreements contemplated by the Acquisition and the Acquisition Agreement. ACI represents and warrants that it has made available to DBCI all the due diligence materials which ACI has received from the Company. 6. Confidentiality. Please note that this Commitment Letter, the Fee Letter, the transactions contemplated hereby and any written or oral information provided by DBCI in connection with this arrangement is exclusively for the information of ACI, Parent, Purchaser and the Company and may not be disclosed to any other party or circulated or referred to publicly without DBCI's prior written consent, except that you may disclose such information to your and the Company's officers, directors, agents and advisors who are directly involved in the consideration of the transactions contemplated hereby to the extent such persons are obligated to hold such advice in confidence or if otherwise required by law or in the event such information or documents are made public through no fault of ACI, Parent or Purchaser. 7. Assignment. None of DBCI, ACI, Parent or Purchaser may assign any of their respective rights or be relieved of any of their respective obligations hereunder without the prior written consent of the other parties hereto. 8. Termination. The Commitment will terminate upon the first to occur of (i) the closing of the Acquisition, (ii) the abandonment or termination of the Acquisition Agreement, (iii) a material breach by ACI, Parent or Purchaser under this Commitment Letter or the Fee Letter, provided, however, that DBCI shall notify ACI in writing of such breach, whereupon ACI shall have a commercially reasonable period of time (not to exceed twenty (20) calendar days) after ACI's receipt of such notice to cure such breach or (iv) the Expiration Date (as defined in the Acquisition Agreement), as may be extended in accordance with the terms of the Acquisition Agreement. January 27, 2002 Page 5 Please confirm that the foregoing is in accordance with your understanding by signing and returning to DBCI the enclosed copy of this Commitment Letter on or before the close of business on the date hereof, whereupon this Commitment Letter shall become a binding agreement among us. Very truly yours, DB CAPITAL INVESTORS, L.P. By: DB Capital Partners, L.P., its general partner By: DB Capital Partners, Inc., its general partner By: /s/ Robert Sharp ---------------------------------- Name: Robert Sharp Title: Managing Director Confirmed as of the date above: ACI CAPITAL CO., INC. By: /s/ Kevin S. Penn ---------------------------------------- Name: Kevin S. Penn Title: President Confirmed as of the date above: J HOLDINGS CORP. By: /s/ Kevin S. Penn ---------------------------------------- Name: Kevin S. Penn Title: President January 27, 2002 Page 6 Confirmed as of the date above: J ACQUISITION CORP. By: /s/ Kevin S. Penn ---------------------------------------- Name: Kevin S. Penn Title: President EX-99 6 ex-7.txt 7 EXHIBIT 7 DB CAPITAL INVESTORS, L.P. 31 WEST 52ND STREET 26TH FLOOR NEW YORK, NEW YORK 10019 SUB DEBT COMMITMENT LETTER -------------------------- January 27, 2002 J Holdings Corp. J Acquisition Corp. ACI Capital Co., Inc. c/o ACI Capital Co., Inc. 900 Third Avenue 26th Floor New York, New York 10022 Ladies and Gentlemen: We are pleased to confirm the arrangements under which DB Capital Investors, L.P. ("DBCI") is committed to provide subordinated debt in connection with the transactions described herein in the amount, on the terms and subject to the conditions set forth in this letter (together, the "COMMITMENT LETTER") and the Fee Letter (as defined below). We understand that J Holdings Corp., a Delaware company ("PARENT", which is a newly formed, wholly owned subsidiary of ACI Capital Co., Inc. ("ACI")), and J Acquisition Corp., a Delaware company and a wholly owned subsidiary of Parent ("PURCHASER"), will sign, concurrently herewith, a merger agreement, dated the date hereof, and in the form attached hereto as EXHIBIT A (along with any other agreements or documents entered into in connection therewith or delivered pursuant thereto, the "ACQUISITION AGREEMENT") to acquire (the "ACQUISITION") all of the issued and outstanding common stock of Jenny Craig, Inc., a Delaware corporation (the "COMPANY"). In addition, in connection with the Acquisition, Parent, Purchaser, Sidney Craig, Jenny Craig, SJF Enterprises, Inc., DA Holdings, Inc., Craig Enterprises, Inc. and the Company will enter into a Stockholders' Voting Agreement, dated the date hereof and substantially in the form attached hereto as EXHIBIT B (along with any other agreements or documents entered into in connection therewith or delivered pursuant thereto, the "VOTING AGREEMENT"). We have confirmed that the total purchase price and financing requirements (including equity financing being provided by ACI, Company stockholders and management) for the Acquisition will be financed as set forth on EXHIBIT C hereto (the "FINANCINGS"). 1. Commitment. DBCI is pleased to confirm its commitment (the "COMMITMENT") to participate in Purchaser's Junior Subordinated Debt Financing (the "SUBDEBT FINANCING") in an aggregate principal amount of $15 million, on the terms and subject to the conditions contained in this Commitment Letter and in the outline of terms and conditions attached hereto as Exhibit D (the "TERM SHEET"). The obligations of Purchaser under the Subdebt Financing will be secured by a second priority lien on, and security interest in, substantially all assets of Purchaser (it being understood that the Company will become the borrower under the Subdebt Financing upon consummation of the Acquisition), Parent and all domestic subsidiaries of Purchaser, in each case subject to such exclusions as both of ACI and DBCI (in their sole and absolute discretion) may agree. DBCI's Commitment is subject, in its discretion, to the conditions set forth in this Commitment Letter and the Term Sheet and to the negotiation, execution and delivery of definitive documentation evidencing the Financings (along with any other agreements or documents entered into in connection therewith or delivered pursuant thereto, the "FINANCING AGREEMENTS"), satisfactory to DBCI and its counsel and the satisfaction of the terms, conditions and covenants contained therein. 2. Fees and Expenses. The fees for these services, among others, are to be set forth in a separate letter (the "FEE LETTER"), to be entered into prior to the closing of the Acquisition by and among ACI, DBCI, Parent and Purchaser. 3. Conditions Precedent. DBCI's obligations hereunder are conditioned on the following: a. The transactions contemplated by the Acquisition Agreement and the Voting Agreement shall have been consummated concurrently with, or shall be ready for consummation immediately after, DBCI's debt financing hereunder on the terms and conditions set forth in such agreements without modification, amendment or waiver, except as previously consented to in writing by DBCI. All conditions precedent to the obligations of Parent and Purchaser under such agreements (other than Section 6.3(c) of the Acquisition Agreement) shall have been satisfied without modification, amendment or waiver, except as previously consented to in writing by DBCI. b. The transactions contemplated by the Financing Agreements shall have been consummated prior to or concurrently with DBCI's debt financing hereunder in accordance with their terms, without modification, amendment or waiver, except as previously consented to in writing by DBCI. All conditions precedent to the obligations of the lenders or investors under the Financing Agreements shall have been satisfied, other than any conditions relating to the debt capital contemplated by this letter, the equity capital commitment letters from SJF 2 Enterprises, Inc., ACI and DBCI and the junior subordinated debt commitment letter from ACI, each of even date herewith. c. ACI, Parent and Purchaser shall have complied with their obligations hereunder. 4. Covenants. DBCI, ACI, Parent and Purchaser agree as follows: a. DBCI shall, and shall be permitted to, consummate the investment contemplated by the Commitment in accordance with the terms hereof. b. Parent and Purchaser shall, and ACI shall cause them to, consummate the transactions contemplated by the Acquisition Agreement and the Voting Agreement and satisfy their obligations thereunder, without amendment, modification or waiver except as previously consented to in writing by DBCI. c. ACI, Parent and Purchaser shall, and ACI shall cause Parent and Purchaser to, consummate the transactions contemplated by the Financing Agreements without amendment, modification or waiver, except as previously consented to in writing by DBCI. Without limiting the generality of the foregoing, there shall be no equity, debt or other financing of any type other than as set forth on EXHIBIT C hereto, without the prior written consent of DBCI. d. Parent and Purchaser shall, and ACI shall cause them to, to the extent commercially reasonable, enforce their respective rights and the obligations of the Company and other parties to the Acquisition Agreement or Voting Agreement (such other parties to the Voting Agreement, the "JC PARTIES"), including any rights to compensation or payments of any kind from any of the Company or the JC Parties whether or not the Acquisition is consummated, whether in respect of damages for breach, payments of termination fees, payments of expenses, gains owing under the Voting Agreement or otherwise. e. ACI, Parent and Purchaser shall promptly keep DBCI informed of, consult and confer with DBCI on all matters relating to the Acquisition, Acquisition Agreement, Voting Agreement, Financing and Financing Agreements and any discussions, communications or negotiations by and between ACI, Parent and Purchaser on the one hand and any of the Company or the JC Parties on the other hand in respect thereof. Such obligation shall include provision of copies of material correspondence, documents and other information and adequate notice and opportunity to attend conferences and meetings in respect thereof. In addition ACI, Parent and Purchaser shall apprise DBCI of, and consult with DBCI concerning all actions they may take or consider pursuant to or as contemplated by the Acquisition Agreement, Voting Agreement and Financing Agreements including exercise of rights thereunder regarding termination, information, further assurances, covenants, conditions, rights upon breach, enforcement of nonsolicitation and other rights. 3 f. Without limiting DBCI's other rights in this Commitment Letter, in the event that an alternate bidder for the Company emerges or for some other reason an altered or improved bid for the Company is necessary or contemplated, DBCI will be given the opportunity, but will not be obligated, to participate in any transactions contemplated in order to improve the terms of the Acquisition Agreement or make an alternative offer for the Company on the same percentage basis relative to ACI as the percentage resulting from dividing DBCI's original commitment to purchase debt and equity capital in Parent hereunder by ACI's original commitment to purchase debt and equity capital in Parent. 5. Acknowledgment. Each of ACI and DBCI has, independently and without reliance on the other party, based on such information and due diligence it has conducted as it has deemed appropriate, made its own analysis and decision to enter into its commitment to invest in Parent and to enter into the other documents and transactions contemplated by the Acquisition and the Acquisition Agreement. Each of ACI and DBCI will independently and without reliance upon the other party, continue to make its own decisions and to conduct its own due diligence with respect to the operation of the Company and the matters, transactions and any related agreements contemplated by the Acquisition and the Acquisition Agreement. ACI represents and warrants that it has made available to DBCI all the due diligence materials which ACI has received from the Company. 6. Confidentiality. Please note that this Commitment Letter, the Fee Letter, the transactions contemplated hereby and any written or oral information provided by DBCI in connection with this arrangement is exclusively for the information of ACI, Parent, Purchaser and the Company and may not be disclosed to any other party or circulated or referred to publicly without DBCI's prior written consent, except that you may disclose such information to your and the Company's officers, directors, agents and advisors who are directly involved in the consideration of the transactions contemplated hereby to the extent such persons are obligated to hold such advice in confidence or if otherwise required by law or in the event such information or documents are made public through no fault of ACI, Parent or Purchaser. 7. Assignment. None of DBCI, ACI, Parent or Purchaser may assign any of their respective rights or be relieved of any of their respective obligations hereunder without the prior written consent of the other parties hereto. 8. Termination. The Commitment will terminate upon the first to occur of (i) the closing of the Acquisition, (ii) the abandonment or termination of the Acquisition Agreement, (iii) a material breach by ACI, Parent or Purchaser under this Commitment Letter or the Fee Letter, provided, however, that DBCI shall notify ACI in writing of such breach, whereupon ACI shall have a commercially reasonable period of time (not to exceed twenty (20) calendar days) after ACI's receipt of such notice to cure such breach or (iv) the Expiration Date (as defined in the Acquisition Agreement), as may be extended in accordance with the terms of the Acquisition Agreement. 4 Please confirm that the foregoing is in accordance with your understanding by signing and returning to DBCI the enclosed copy of this Commitment Letter on or before the close of business on the date hereof, whereupon this Commitment Letter shall become a binding agreement among us. Very truly yours, DB CAPITAL INVESTORS, L.P. By: DB Capital Partners, L.P., its general partner By: DB Capital Partners, Inc., its general partner By: /s/ Robert Sharp ---------------------------------------- Name: Robert Sharp Title: Managing Director Confirmed as of the date above: ACI CAPITAL CO., INC. By: /s/ Kevin S. Penn ---------------------------------------- Name: Kevin S. Penn Title: President Confirmed as of the date above: J HOLDINGS CORP. By: /s/ Kevin S. Penn ---------------------------------------- Name: Kevin S. Penn Title: President Confirmed as of the date above: J ACQUISITION CORP. By: /s/ Kevin S. Penn ---------------------------------------- Name: Kevin S. Penn Title: President 5 EX-99 7 ex-8.txt 8 EXHIBIT 8 January 27, 2002 J Acquisition Corp. 900 Third Avenue 26th Floor New York, New York 10022 Re: Junior Subordinated Debt Commitment Gentlemen: Reference is made to that certain Agreement and Plan of Merger (the "Agreement"), dated as of the date hereof, by and between J Holdings Corp., a Delaware corporation ("Parent"), J Acquisition Corp., a Delaware corporation and wholly owned subsidiary of Parent (the "Borrower"), and Jenny Craig, Inc., a Delaware corporation (the "Company"), which agreement contemplates the acquisition by Parent of 100% of the outstanding shares of the Company (such acquisition, together with agreements related thereto or contemplated thereby, representing the "Transaction"). In connection therewith and in order to finance in part the Transaction, ACI Capital Co., Inc. (the "Lender") is pleased to advise you that it hereby commits to provide the Borrower with a Junior Subordinated Debt Financing in an aggregate principal amount of $9 million (the "Subdebt Financing"). The obligations of the Borrower under the Subdebt Financing will be secured by a second priority lien on, and security interest in, substantially all assets of the Borrower (it being understood that the Company will become the Borrower upon consummation of the Acquisition), the Parent and all domestic subsidiaries of the Borrower, in each case subject to such exclusions as the Lender (in its sole and absolute discretion) may agree. The Lender's commitment to provide the Subdebt Financing is subject in all respects to satisfaction of the terms and conditions contained in this commitment letter and in the Outline of Terms and Conditions attached hereto as Exhibit A (the "Term Sheet"). The Borrower acknowledges that the Term Sheet is intended as an outline only and does not purport to summarize all the conditions, covenants, representations, warranties and other provisions which would be contained in definitive legal documentation for the Subdebt Financing. The loan documentation for the Subdebt Financing will include, in addition to the provisions that are summarized in this commitment letter and the Term Sheet, provisions that, in the reasonable opinion of the Lender, are customary or typical for this type of financing transaction and other provisions that the Lender reasonably requires in the context of the proposed transaction. The Lender's commitment to provide the Subdebt Financing is subject to (i) the negotiation, execution and delivery of definitive loan documentation in form and substance satisfactory to the Lender, the Borrower and their respective counsel, (ii) the satisfaction of the conditions precedent to the closing of the Transaction set forth in Sections 6.1 and 6.3 (other than Section 6.3(c) of the Agreement), (iii) all conditions precedent to the obligation of the Senior Lender (as defined in the Agreement) to consummate the Senior Financing (as defined in the Agreement) having been met and the Senior Lender shall intend to and shall be willing and prepared to consummate the Senior Financing, in each case other than with respect to any conditions relating to the debt capital investment contemplated by this commitment letter, the debt capital commitment letter of DB Capital Investors, L.P. of even date herewith or the equity capital commitment letter of SJF Enterprises, Inc., of even date herewith, and (iv) satisfaction of the conditions as set forth in the Term Sheet. The offer made by the Lender in this commitment letter is contingent upon execution of the Agreement, and should the Agreement be executed, the commitment by Lender to provide the Subdebt Financing shall expire immediately upon the earlier of (i) the termination of the Agreement and (ii) the Expiration Date (as defined in the Agreement), as may be extended in accordance with the terms of the Agreement. Should the terms and conditions of the offer contained herein meet with your approval, please indicate your acceptance by signing and returning a copy of this commitment letter to the Lender. This commitment letter, including the attached Term Sheet (i) supersedes all prior discussions, agreements, commitments, arrangements, negotiations or understandings, whether oral or written, of the parties with respect to the subject matter hereof and thereof, (ii) shall be governed by the law of the State of New York, (iii) shall be binding upon the parties and their respective successors and assigns, (iv) may not be relied upon or enforced by any other person or entity other than the parties hereto and Parent, and (v) may be signed in multiple counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. If this commitment letter becomes the subject of a dispute, each of the parties hereto hereby waives trial by jury. This commitment letter may be amended, modified or waived only in a writing signed by the parties hereto. 2 Please confirm that the foregoing is in accordance with your understanding by signing and returning to the Lender the enclosed copy of this Commitment Letter on or before the close of business on the date hereof, whereupon this Commitment Letter shall become a binding agreement between us. Very truly yours, ACI CAPITAL CO., INC. By: /s/ Kevin S. Penn ------------------------------------ Name: Kevin S. Penn Title: Managing Director Agreed and accepted on this 27th day of January, 2002: J ACQUISITION CORP. By: /s/ Kevin S. Penn --------------------------------- Name: Kevin S. Penn Title:President 3 EX-99 8 ex-9.txt 9 EXHIBIT 9 ABLECO FINANCE LLC 450 Park Avenue, 28th Floor New York, New York 10022 December 28, 2001 Mr. Kevin S. Penn Mr. Ezra S. Field ACI Capital Co., Inc. 900 Third Avenue, 26th Floor New York, NY 10022 Re: Financing Commitment -------------------- Gentlemen: An investor group formed by ACI Capital Co., Inc.("ACI Capital" and ACI Capital together with such investor group collectively, the "Investor") has advised Ableco Finance LLC (a special situations lending company hereinafter referred to as the "Lender") that the Investor is directly or through a wholly owned acquisition vehicle acquiring all of the capital stock of Jenny Craig, Inc. ("Jenny Craig") and its subsidiaries (the "Acquisition") (Jenny Craig and those of its subsidiaries designated by the Lender as borrowers collectively, the "Borrower"). The Investor has also advised the Lender that the Investor requires financing (i) to consummate the Acquisition, (ii) for the general working capital requirements of the Borrower and (iii) to pay fees and expenses related to the financing contemplated by this commitment letter. The Lender is pleased to advise you that the Lender hereby commits to provide the Borrower with a revolving credit and term loan facility totaling not more than $35 million at any one time outstanding (the "Financing Facility"), consisting of (A) a revolving credit facility in an aggregate principal amount outstanding not exceeding $5 million, (B) a tranche A term loan in an outstanding principal amount of $15 million and (C) a tranche B term loan in an outstanding principal amount of $15 million, all substantially on the terms and conditions set forth in the Outline of Terms and Conditions attached hereto as Exhibit A (the "Term Sheet"). The obligations of the Borrower under the Financing Facility will be secured by a first priority lien on, and security interest in, substantially all assets of the Borrower and its subsidiaries, in each case subject to such exclusions as the Lender (in its sole and absolute discretion) may agree. The Lender's commitment to provide the Financing Facility is subject in all respects to satisfaction of the terms and conditions contained in this commitment letter and in the Term Sheet. The Investor acknowledges that the Term Sheet is intended as an outline only and does not purport to summarize all the conditions, covenants, representations, warranties and other provisions which would be ACI Capital Co., Inc. December 28, 2001 Page 2 contained in definitive legal documentation for the Financing Facility. The loan documentation for the Financing Facility will include, in addition to the provisions that are summarized in this commitment letter and the Term Sheet, provisions that, in the reasonable opinion of the Lender, are customary or typical for this type of financing transaction and other provisions that the Lender reasonably requires in the context of the proposed transaction. By its execution hereof and its acceptance of the commitment contained herein, ACI Capital agrees to indemnify and hold harmless the Lender and each of its assignees, its affiliates and its directors, members, officers, employees and agents (each an "Indemnified Party") from and against any and all losses, claims, damages, liabilities or other expenses to which such Indemnified Party may become subject, insofar as such losses, claims, damages, liabilities (or actions or other proceedings commenced or threatened in respect thereof) or other expenses arise out of or in any way relate to or result from the Acquisition, this commitment letter or the extension of the Financing Facility contemplated by this commitment letter, or in any way arise from any use or intended use of this commitment letter or the proceeds of the Financing Facility contemplated by this commitment letter, and ACI Capital agrees to reimburse each Indemnified Party for any legal or other expenses incurred in connection with investigating, defending or participating in any such loss, claim, damage, liability or action or other proceeding (whether or not such Indemnified Party is a party to any action or proceeding out of which indemnified expenses arise), but excluding therefrom all expenses, losses, claims, damages and liabilities which are finally determined in a non-appealable decision of a court of competent jurisdiction to have resulted from the gross negligence or willful misconduct of the Indemnified Party. In the event of any litigation or dispute involving this commitment letter or the Financing Facility, the Lender shall not be responsible or liable to the Investor, the Borrower or any other person for any special, indirect, consequential, incidental or punitive damages. In addition, ACI Capital agrees to reimburse the Lender for all reasonable out-of-pocket fees and expenses (the "Expenses") incurred by or on behalf of the Lender in connection with the negotiation, preparation, execution and delivery of this commitment letter, the Term Sheet and any and all definitive documentation relating hereto and thereto, including, but not limited to, the reasonable fees and expenses of counsel to the Lender in connection with any due diligence, collateral reviews and field examinations. The obligations of ACI Capital under this paragraph shall remain effective whether or not definitive documentation is executed and notwithstanding any termination of this commitment letter, provided, that, if, after the Acquisition, the Borrower enters into definitive documentation for the Financing Facility, the obligations of ACI Capital under this commitment letter and the Term Sheet shall thereupon terminate and be superseded in all respects by the obligations of the Borrower to the Lender. On the date of execution hereof, ACI Capital agrees to pay to the Lender, in immediately available funds, a commitment fee equal to $525,000 (the "Commitment Fee"), which fee shall be earned in full and payable on the first date on or after the date ACI Capital accepts this commitment ACI Capital Co., Inc. December 28, 2001 Page 3 letter and the Term Sheet and that the Investor has executed a definitive merger agreement (the "Merger Agreement") for the Acquisition. In addition, ACI Capital agrees to pay to the Lender, promptly after its request, additional expense deposits if the Lender determines that the amount of Expenses incurred or to be incurred by the Lender in connection with the Financing Facility exceeds or will exceed the amount of any expense deposit previously paid to the Lender. The Lender's commitment to provide the Financing Facility is subject to (i) the negotiation, execution and delivery of definitive loan documentation in form and substance satisfactory to the Lender, the Borrower and their respective counsel, (ii) the satisfaction of the Lender that at all times prior to and including the date on which the transactions referred to hereunder close that there has not occurred or become known to the Lender any material adverse change with respect to the condition, financial or otherwise, business, operations, assets, liabilities or prospects of the Borrower, as determined by the Lender in its sole discretion (a "Material Adverse Change"), (iii) the absence of any material disruption or general adverse developments in the financial markets, as determined by the Lender in its sole discretion, and (iv) such other customary conditions as set forth in the Term Sheet. If at any time the Lender shall determine (in its sole discretion exercised reasonably) that either (A) the Investor or the Borrower will be unable to fulfill any condition set forth in this commitment letter or in the Term Sheet or (B) any Material Adverse Change has occurred, the Lender may terminate this commitment letter by giving notice thereof to ACI Capital (subject to the obligation of ACI Capital to pay all fees, costs, expenses and other payment obligations expressly assumed by ACI Capital hereunder, which shall survive the termination of this commitment letter). The Investor represents and warrants that (i) all written information and other materials concerning the Investor, the Borrower or the Acquisition (collectively, the "Information") which has been, or is hereafter, made available by, or on behalf of the Investor is, or when delivered will be, when considered as a whole, complete and correct in all material respects and does not, or will not when delivered, contain any untrue statement of material fact or omit to state a material fact necessary in order to make the statements contained therein not misleading in light of the circumstances under which such statement has been made and (ii) to the extent that any such Information contains projections, such projections were prepared in good faith on the basis of (A) assumptions, methods and tests stated therein which are believed by the Investor or Jenny Craig, as applicable, to be reasonable and (B) information believed by the Investor or Jenny Craig, as applicable, to have been accurate based upon the information available to the Investor at the time such projections were furnished to the Lender. This commitment letter is delivered to ACI Capital upon the condition that, prior to its acceptance of this offer and the payment of the Commitment Fee, neither the existence of this commitment letter or the Term Sheet, nor any of their contents, shall be disclosed by the Investor, except as may be compelled to be disclosed in a judicial or administrative proceeding, as ACI Capital Co., Inc. December 28, 2001 Page 4 otherwise required by law or, on a confidential and "need to know" basis, solely to the directors, officers, employees, advisors and agents of the Investor or the Borrower and its representatives. In addition, the Investor agrees that it will (i) consult with the Lender prior to the making of any filing in which reference is made to the Lender or the commitment contained herein, and (ii) obtain the prior approval of the Lender before releasing any public announcement in which reference is made to the Lender or to the commitment contained herein. The Investor acknowledges that the Lender and its affiliates may now or hereafter provide financing or obtain other interests in other companies in respect of which the Investor, the Borrower or their affiliates may be business competitors, and that the Lender and its affiliates will have no obligation to provide to the Investor, the Borrower or any of their affiliates any confidential information obtained from such other companies. The Lender agrees that it will not provide confidential information obtained from the Investor or the Borrower except (i) as may, be compelled to be disclosed in a judicial or administrative proceedings, (ii) as otherwise required by law, or (iii) on a confidential and "need to know" basis to its directors, officers, employees, advisors and agents and to prospective assignees or participants, provided such persons have been instructed to keep such information confidential. The offer made by the Lender in this commitment letter shall expire, unless otherwise agreed by the Lender in writing, at 5:00 p.m. (New York City time) on January 5, 2002, unless prior thereto the Lender has received a copy of this commitment letter, signed by ACI Capital accepting the terms and conditions of this commitment letter and the Term Sheet. The commitment by the Lender to provide the Financing Facility shall expire at 5:00 p.m. (New York City time) on May 31, 2002, unless prior thereto, definitive loan documentation shall have been agreed to in writing by all parties and the conditions set forth therein shall have been satisfied (it being understood that the obligation of ACI Capital to pay all amounts in respect of indemnification and Expenses shall survive termination of this commitment letter). If after the Acquisition, the Borrower enters into definitive documentation for the Financing Facility, the obligations of the Investor and ACI Capital under this commitment letter and the Term Sheet shall thereupon terminate and be superseded in all respects by the obligations of the Borrower to the Lender. Should the terms and conditions of the offer contained herein meet with your approval, please indicate your acceptance by signing and returning a copy of this commitment letter to the Lender. ACI Capital Co., Inc. December 28, 2001 Page 5 This commitment letter, including the attached Term Sheet (i) supersedes all prior discussions, agreements, commitments, arrangements, negotiations or understandings, whether oral or written, of the parties with respect thereto, (ii) shall be governed by the law of the State of New York, (iii) shall be binding upon the parties and their respective successors and assigns, (iv) may not be relied upon or enforced by any other person or entity, and (v) may be signed in multiple counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. If this commitment letter becomes the subject of a dispute, each of the parties hereto hereby waives trial by jury. This commitment letter may be amended, modified or waived only in a writing signed by the parties hereto. Very truly yours, ABLECO FINANCE LLC By: /s/ Daniel E. Wolf --------------------------- Name: Daniel E. Wolf Title: Vice President Agreed and accepted as of 28th day of December 2001: ACI CAPITAL CO., INC. By: /s/ Ezra S. Field -------------------------------------- Name: Ezra S. Field Title: Vice President -----END PRIVACY-ENHANCED MESSAGE-----