Exhibit 10.3

 

Execution Version

 

acknowledgment and support agreement

  

April 20, 2020

 

RC Cake Holdings LLC
1180 Peachtree Street, N.E.
Atlanta, Georgia 30309-3521

 

Reference is made to that certain Subscription Agreement, dated as of April 20,
2020 (the “Subscription Agreement”), between RC Cake Holdings LLC, a Delaware
limited liability company (“Purchaser”), and The Cheesecake Factory
Incorporated, a Delaware corporation (the “Company”), pursuant to which the
Company will issue and sell, and Purchaser will purchase, 200,000 shares (the
“Shares”) of the Company’s Series A Convertible Preferred Stock, par value $.01
per share. Capitalized terms used and not otherwise defined herein shall have
the meanings ascribed to them in the Subscription Agreement.

 

As of the date hereof, the undersigned (“Stockholder”) is the record or
beneficial owner (within the meaning of Rule 13d-3 under the Securities Exchange
Act of 1934, as amended, which meaning will apply for all purposes of this
Acknowledgment and Support Agreement (this “Support Agreement”) whenever the
term “beneficial owner” or “beneficially own” is used) of the number of shares
of common stock, par value $.01 per share of the Company (the “Company Common
Stock”), set forth below Stockholder’s name on the signature page hereto (all
shares of Company Common Stock for which Stockholder is or becomes the record or
beneficial owner prior to the termination of this Support Agreement being
referred to herein as the “Covered Shares”).

 

Stockholder acknowledges and agrees that the execution of this Support Agreement
and its delivery to Purchaser by Stockholder is a condition and material
inducement for Purchaser to enter into the Subscription Agreement and purchase
the Shares. In consideration of the mutual covenants and premises contained in
this Support Agreement and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, Purchaser and
Stockholder, intending to be legally bound, hereby agree as follows:

 

1.                  Stockholder Vote. At the next meeting of the Company’s
stockholders held following the Company’s Annual Meeting of Stockholders in
2020, or at any adjournment thereof (the, “Company Stockholders Meeting”),
Stockholder shall, and shall cause any other holder of record of the Covered
Shares to, (a) appear at such meeting (if applicable) or otherwise cause all
Covered Shares to be counted as present thereat for purposes of calculating a
quorum and (b) vote (or cause to be voted) all Covered Shares:

 

(i)                 in favor of the issuance of shares of Company Common Stock
upon conversion of the Shares in excess of the limitations imposed by NASDAQ
Listing Standard Rule 5635(b), such that the Shares may be converted into
Company Common Stock and the Shares may vote on an as-converted to Company
Common Stock basis, in each case, without regard to the Ownership Limitation (as
defined in Section 10(h)(i) of the Certification of Designations) (the
“Stockholder Approval”),

 

 

 

 

(ii)              in favor of any other matter considered at any Company
Stockholders Meeting which the Board of Directors of the Company has determined
is necessary or appropriate in connection with the Stockholder Approval,

 

(iii)            in favor of any adjournment or postponement recommended by the
Company in order to obtain the Stockholder Approval, and

 

(iv)             against any shareholder proposal that does or would oppose,
impede, frustrate, prevent or nullify the Stockholder Approval, any provision of
this Support Agreement or any matter that is proposed in furtherance thereof.

 

2.                  Irrevocable Proxy. SOLELY IN THE EVENT OF A FAILURE BY
STOCKHOLDER TO ACT IN ACCORDANCE WITH SUCH STOCKHOLDER’S OBLIGATIONS AS TO
VOTING PURSUANT TO SECTION 1, UNTIL THE TERMINATION TIME (AS DEFINED IN SECTION
6(A)), STOCKHOLDER HEREBY IRREVOCABLY (UNTIL THE TERMINATION TIME) GRANTS TO AND
APPOINTS PURCHASER AS SUCH STOCKHOLDER’S PROXY AND ATTORNEY-IN-FACT (WITH FULL
POWER OF SUBSTITUTION), FOR AND IN THE NAME, PLACE AND STEAD OF STOCKHOLDER, TO
REPRESENT, VOTE AND OTHERWISE ACT (BY VOTING AT OR PURSUANT TO THE COMPANY
STOCKHOLDERS MEETING) WITH RESPECT TO THE COVERED SHARES REGARDING THE MATTERS
REFERRED TO IN SECTION 1 UNTIL THE TERMINATION TIME, TO THE SAME EXTENT AND WITH
THE SAME EFFECT AS STOCKHOLDER MIGHT OR COULD DO UNDER APPLICABLE LAW, RULES AND
REGULATIONS; provided however, that Stockholder’s grant of the proxy
contemplated by Section 1 shall be effective if, and only if, Stockholder has
not delivered to Purchaser at least THREE BUSINESS days prior to the meeting at
which any of the matters described in Section 1 is to be considered a duly
executed proxy card OR CONSENT previously approved by Purchaser directing that
the Covered Shares of Stockholder be voted in accordance with Section 1. THE
PROXY GRANTED PURSUANT TO THIS SECTION 2 IS COUPLED WITH AN INTEREST AND SHALL
BE IRREVOCABLE UNTIL THE TERMINATION TIME. UNTIL THE TERMINATION TIME,
STOCKHOLDER WILL TAKE SUCH FURTHER ACTION AND WILL EXECUTE SUCH OTHER
INSTRUMENTS AS MAY BE NECESSARY TO EFFECTUATE THE INTENT OF THIS PROXY.
STOCKHOLDER HEREBY REVOKES ANY AND ALL PREVIOUS PROXIES OR POWERS OF ATTORNEY
GRANTED WITH RESPECT TO ANY OF THE COVERED SHARES THAT MAY HAVE HERETOFORE BEEN
APPOINTED OR GRANTED WITH RESPECT TO THE MATTERS REFERRED TO IN THIS SECTION 2,
AND PRIOR TO THE TERMINATION TIME NO SUBSEQUENT PROXY (WHETHER REVOCABLE OR
IRREVOCABLE) OR POWER OF ATTORNEY SHALL BE GIVEN BY STOCKHOLDER. NOTWITHSTANDING
THE FOREGOING, THIS PROXY SHALL TERMINATE UPON TERMINATION OF THIS SUPPORT
AGREEMENT IN ACCORDANCE WITH ITS TERMS.

 

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3.                  No Inconsistent Arrangements. Until the Termination Time,
Stockholder shall not, directly or indirectly, (a) deposit or permit the deposit
of the Covered Shares into a voting trust or enter into a tender, support,
voting or similar agreement or arrangement with respect to the Covered Shares or
(b) otherwise take any action with respect to any of the Covered Shares, in the
case of each of clause (a) or clause(b), that would restrict, limit or interfere
with the performance of any of Stockholder’s obligations under this Support
Agreement or otherwise make any representation or warranty of Stockholder
contained herein untrue or incorrect. Notwithstanding the foregoing, Stockholder
may make Transfers of Covered Shares (1) by will or for other bona fide estate
planning purposes, or (2) to any of its Affiliates, in the case of each of
clause (1) or clause (2), only so long as the Covered Shares shall continue to
be bound by this Support Agreement and provided that each transferee thereof
agrees in a writing reasonably acceptable to each Purchaser to be bound by the
terms and conditions of this Support Agreement, or (3) to any Person (who is not
its Affiliate) in a bona fides arms’ length transaction (including sales
pursuant to Rule 144 or in a registered offering). “Transfer” means any
transfer, sale, assignment, gift, hedge, pledge, tender or other disposition of,
creation of any Lien on, or grant any proxy, power of attorney or other
authorization of Covered Shares.

 

4.                  Representations and Warranties of Stockholder. Stockholder
hereby represents and warrants to Purchaser as follows:

 

(a)               Stockholder owns beneficially and of record the Covered
Shares, free and clear of all Liens or other restrictions on the right to vote
the Covered Shares, except as provided hereunder. Stockholder does not own, as
of the date hereof, beneficially or otherwise, any equity interests in the
Company other than the Covered Shares indicated on Stockholder’s signature page
to this Support Agreement.

 

(b)               Stockholder has full voting power with respect to the Covered
Shares, full power to issue instructions with respect to the matters set forth
herein and full power to agree to all of the matters set forth in this Support
Agreement, in each case, with respect to all of the Covered Shares. None of the
Covered Shares are subject to any proxy, voting trust or other agreement or
arrangement with respect to the voting of the Covered Shares with respect to the
matters contemplated herein.

 

(c)               The execution, delivery and performance by Stockholder of this
Support Agreement do not and will not (i) result in the creation of any Lien on
the Covered Shares, or (ii) violate, conflict with, result in any material
breach of, or constitute a default (or event which with the giving of notice or
lapse of time, or both, would become a default) under, or result in or give to
others any material rights of termination, amendment, acceleration or
cancellation of, or result in the creation of any Lien on any of the Covered
Shares pursuant to, any contract to which Stockholder is a party or by which any
of the Covered Shares is bound.

 

(d)               If Stockholder is not a natural person, Stockholder is an
entity duly formed, validly existing and in good standing under the laws of the
jurisdiction of its formation and has all requisite entity power and authority
to own its properties and to carry on its business as presently conducted.

 

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5.                  Stockholder Capacity. Stockholder is entering into this
Support Agreement solely in its capacity as a beneficial owner of the Covered
Shares, and not in any other capacity, and this Support Agreement shall not
limit or otherwise affect any actions taken, or required or permitted to be
taken, by such Stockholder or any Affiliate or Representative of such
Stockholder in any other capacity, including, if applicable, as an officer or
director of the Company or any of the Company’s Subsidiaries, and any actions
taken (whatsoever), or failure to take any actions (whatsoever), by any of the
foregoing Persons in such capacity as a director or officer of the Company or
any of the Company’s Subsidiaries shall not be deemed to constitute a breach of
this Agreement. Stockholder acknowledges that it is a sophisticated party with
respect to the Covered Shares and has adequate information concerning the
business and financial condition of the Company to make an informed decision
regarding the transactions contemplated by this Support Agreement and has,
independently and without reliance upon any other person and based on such
information as such Stockholder has deemed appropriate, made its own analysis
and decision to enter into this Support Agreement.

 

6.                  Miscellaneous.

 

(a)               This Support Agreement, and all rights and obligations of the
parties contained herein, shall automatically terminate without any further
action required by any Person upon the earlier to occur of (i) the mutual
agreement of the parties hereto to terminate this Support Agreement, and (ii)
immediately following the occurrence of the Company Stockholders Meeting
(whether or not the Stockholder Approval is obtained) (the time of the earlier
of such occurrences, the “Termination Time”). Upon termination of this Support
Agreement, no party shall have any further obligations or liabilities under this
Support Agreement; provided, that the termination of this Support Agreement
shall not relieve the Stockholder from any liability for any breach of this
Support Agreement prior to termination.

 

(b)               This Support Agreement shall be governed by, and construed in
accordance with, the Laws of the state of Delaware, without giving effect to any
choice of law or conflict of law rules or provisions (whether of the state of
Delaware or any other jurisdiction) that would cause the application of the laws
of any jurisdiction other than the state of Delaware. Any dispute relating
hereto shall be heard first in the Delaware Court of Chancery, and, if
applicable, in any state or federal court located in of Delaware in which appeal
from the Court of Chancery may validly be taken under the laws of the State of
Delaware (each a “Chosen Court” and collectively, the “Chosen Courts”), and the
parties hereto agree to the exclusive jurisdiction and venue of the Chosen
Courts. The parties hereto further agree that any proceeding seeking to enforce
any provision of, or based on any matter arising out of or in connection with,
this Support Agreement or the transactions contemplated hereby or by any matters
related to the foregoing (the “Applicable Matters”) shall be brought exclusively
in a Chosen Court, and that any proceeding arising out of this Support Agreement
or any other Applicable Matter shall be deemed to have arisen from a transaction
of business in the state of Delaware, and each party hereto hereby irrevocably
consents to the jurisdiction of such Chosen Courts in any such proceeding and
irrevocably and unconditionally waives, to the fullest extent permitted by law,
any objection that such party may now or hereafter have to the laying of the
venue of any such suit, action or proceeding in any such Chosen Court or that
any such proceeding brought in any such Chosen Court has been brought in an
inconvenient forum. Each party hereto further covenants not to bring a
proceeding with respect to the Applicable Matters (or that could affect any
Applicable Matter) other than in such Chosen Court and not to challenge or
enforce in another jurisdiction a judgment of such Chosen Court. Process in any
such proceeding may be served on either party with respect to such Applicable
Matters anywhere in the world, whether within or without the jurisdiction of any
such Chosen Court. The parties hereto further covenant not to bring a proceeding
with respect to the Applicable Matters (or that could affect any Applicable
Matter) other than in such Chosen Court and not to challenge or enforce in
another jurisdiction a judgment of such Chosen Court. Process in any such
proceeding may be served on any Person with respect to such Applicable Matters
anywhere in the world, whether within or without the jurisdiction of any such
Chosen Court. EACH PARTY HERETO, FOR ITSELF AND ITS AFFILIATES, HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT OR OTHER
PROCEEDING (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR
RELATING TO THE ACTIONS OF THE PARTIES HERETO OR THEIR RESPECTIVE AFFILIATES
PURSUANT TO THIS AGREEMENT OR IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR
ENFORCEMENT HEREOF.

 

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(c)               This Support Agreement may not be modified or amended except
by an instrument or instruments in writing signed by each party hereto.

 

(d)               This Support Agreement will be binding upon and inure to the
benefit of the parties hereto and their respective successors and permitted
assigns. This Support Agreement or any rights or obligations hereunder may not
be assigned by any party hereto without the prior written consent of the other
parties hereto. Any purported assignment or delegation in violation of this
Agreement shall be null and void ab initio.

 

(e)               This Agreement may be executed in one or more counterparts,
all of which shall be considered one and the same agreement, and will become
effective when one or more counterparts have been signed by a party and
delivered to the other parties. Copies of executed counterparts of signature
pages to this Agreement may be transmitted by PDF (portable document format) or
facsimile and such PDFs or facsimiles will be deemed as sufficient as if actual
signature pages had been delivered.

 

(f)                The parties hereto agree that irreparable damage would occur
and that a party may not have any adequate remedy at law in the event that any
of the provisions of this Support Agreement are not performed in accordance with
their terms or were otherwise breached. Accordingly, each party shall without
the necessity of proving the inadequacy of money damages or posting a bond be
entitled to seek an injunction or injunctions to prevent breaches of this
Support Agreement and to enforce specifically the terms, provisions and
covenants contained herein, this being in addition to any other remedy to which
they are entitled at law or in equity.

 

(g)               Any provision hereof that is held to be invalid, illegal or
unenforceable in any respect by a court of competent jurisdiction, shall be
ineffective only to the extent of such invalidity, illegality or
unenforceability, without affecting in any way the remaining provisions hereof,
provided, however, that the parties will attempt in good faith to reform this
Agreement in a manner consistent with the intent of any such ineffective
provision for the purpose of carrying out such intent.

 

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(h)               Any party hereto may, only by an instrument in writing, waive
compliance by any other party or parties hereto with any term or provision
hereof on the part of such other party or parties hereto to be performed or
complied with. No failure or delay of any party in exercising any right or
remedy hereunder shall operate as a waiver thereof, nor will any single or
partial exercise of any right or power, or any abandonment or discontinuance of
steps to enforce such right or power, preclude any other or further exercise
thereof or the exercise of any other right or power. The waiver by any party
hereto of a breach of any term or provision hereof shall not be construed as a
waiver of any subsequent breach. The rights and remedies of the parties
hereunder are cumulative and are not exclusive of any rights or remedies that
they would otherwise have hereunder.

 

(i)                 Nothing in this Support Agreement, expressed or implied,
shall amend, modify, alter or change any of the terms of, or any of the parties’
rights or obligations under, the Subscription Agreement.

  

[Signature page to follow.]

 

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IN WITNESS WHEREOF, the parties have executed this Acknowledgement and Support
Agreement as of the date first written above.

  

  DAVID M. OVERTON FAMILY TRUST

 

By: /s/ David Overton     Name: David Overton     Title: Trustee

 

Covered Shares

 

Number of Shares of Company Common Stock Beneficially Owned: 2,881,896

  

[Signature Page to Acknowledgment and Support Agreement]

  

 

 

 

  /s/ David Overton   David Overton 

 

Covered Shares

 

Number of Shares of Company Common Stock Beneficially Owned: 22,900

 

[Signature Page to Acknowledgment and Support Agreement]

 

 

 

 

  DAVID M. OVERTON 2011 GIFT TRUST UTA DATED 11/23/2011

 

By: /s/ Sheila A. Overton     Name: Sheila A. Overton     Title: Trustee

 

Covered Shares

 

Number of Shares of Company Common Stock Beneficially Owned: 183,950

  

[Signature Page to Acknowledgment and Support Agreement]

 

 

 

 

  SHEILA A. OVERTON LIVING TRUST

 

By: /s/ Sheila A. Overton     Name: Sheila A. Overton     Title: Trustee

  

Covered Shares

 

Number of Shares of Company Common Stock Beneficially Owned: 60,211

 

[Signature Page to Acknowledgment and Support Agreement]

 

 

 

 

Acknowledged and agreed, as of the date first written above, by:

  

  RC CAKE HOLDINGS LLC

 

By: /s/ Paul D. Ginsberg     Name: Paul D. Ginsberg     Title: President

 

[Signature Page to Acknowledgment and Support Agreement]