Exhibit 10.13

STOCKHOLDERS AGREEMENT

dated as of

March 14, 2017

by and between

J.JILL, INC.

and

TI IV JJILL HOLDINGS, LP

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TABLE OF CONTENTS

 

     Page  

ARTICLE I DEFINITIONS AND USAGE

     1  

Section 1.1

 

Definitions

     1  

Section 1.2

 

Interpretation

     4  

ARTICLE II APPROVAL AND CONSULTATION OF CERTAIN MATTERS

     5  

Section 2.1

 

Approval of Stockholder Majority

     5  

ARTICLE III TRANSFER

     7  

Section 3.1

 

Transfers and Joinders

     7  

Section 3.2

 

Binding Effect on Transferees

     7  

Section 3.3

 

Charter Provisions

     7  

ARTICLE IV BOARD REPRESENTATION

     7  

Section 4.1

 

Composition of Initial Board

     7  

Section 4.2

 

Nominees

     8  

Section 4.3

 

Committees

     9  

ARTICLE V INDEMNIFICATION

     10  

Section 5.1

 

Right to Indemnification

     10  

Section 5.2

 

Prepayment of Expenses

     10  

Section 5.3

 

Claims

     10  

Section 5.4

 

Nonexclusivity of Rights

     11  

Section 5.5

 

Other Sources

     11  

Section 5.6

 

Indemnitor of First Resort

     11  

ARTICLE VI TERMINATION

     12  

Section 6.1

 

Term

     12  

Section 6.2

 

Survival

     12  

ARTICLE VII REPRESENTATIONS AND WARRANTIES

     12  

Section 7.1

 

Representations and Warranties of Holdings

     12  

Section 7.2

 

Representations and Warranties of the Corporation

     12  

ARTICLE VIII MISCELLANEOUS

     13  

Section 8.1

 

Entire Agreement

     13  

Section 8.2

 

Further Assurances

     13  

Section 8.3

 

Notices

     13  

Section 8.4

 

Governing Law

     14  

Section 8.5

 

Consent to Jurisdiction

     14  

Section 8.6

 

Equitable Remedies

     14  

Section 8.7

 

Construction

     15  

Section 8.8

 

Counterparts

     15  

Section 8.9

 

Third Party Beneficiaries

     15  

Section 8.10

 

Binding Effect

     15  

 

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     Page  

Section 8.11

 

Severability

     15  

Section 8.12

 

Adjustments Upon Change of Capitalization

     15  

Section 8.13

 

Amendments; Waivers

     16  

Section 8.14

 

Actions in Other Capacities

     16  

 

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INDEX OF DEFINED TERMS

 

Term

   Section

Affiliate

   Section 1.1

Agreement

   Preamble

beneficial ownership

   Section 1.1

Board of Directors

   Section 1.1

By-Laws

   Section 1.1

Certificate of Incorporation

   Section 1.1

Change of Control

   Section 1.1

Claim

   Section 5.1

Common Stock

   Recitals

Controlled Affiliate

   Section 1.1

Controlled Entity

   Section 1.1

Corporation

   Preamble

Covered Person

   Section 5.1

Equity Security

   Section 1.1

Exchange Act

   Section 1.1

Fair Market Value

   Section 1.1

Fund Indemnitor

   Section 5.6

Governmental Entity

   Section 1.1

Hedging Obligation

   Section 1.1

Holdings

   Preamble

Indebtedness

   Section 1.1

IPO

   Section 1.1

IPO Registration Statement

   Recitals

Lien

   Section 1.1

Minimum Condition

   Section 1.1

Percentage Interest

   Section 1.1

Permitted Transferee

   Section 1.1

Person

   Section 1.1

SEC

   Section 1.1

Securities Act

   Section 1.1

Stockholder Designee

   Section 4.2(a)

Stockholder Majority

   Section 1.1

Stockholders

   Preamble

Subsidiary

   Section 1.1

Transfer

   Section 1.1

Underwriting Agreement

   Section 1.1

Voting Securities

   Section 1.1

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STOCKHOLDERS AGREEMENT

STOCKHOLDERS AGREEMENT (this “Agreement”), dated as of March 14, 2017, between
J.Jill, Inc., a Delaware corporation (the “Corporation”), and TI IV JJill
Holdings, LP, a Delaware limited partnership (“Holdings”, and together with any
other stockholders of the Corporation who become party hereto in accordance with
this Agreement, the “Stockholders”).

WHEREAS, in connection with the IPO (as defined herein), the Corporation and its
Affiliates (as defined herein) intend to consummate the transactions described
in the Registration Statement on Form S-1 filed by the Corporation (the “IPO
Registration Statement”);

WHEREAS, after giving effect to such transactions, the Stockholders will
beneficially own shares of the Corporation’s common stock, par value $0.01 per
share (the “Common Stock”); and

WHEREAS, the parties hereto desire to provide for certain governance rights and
other matters, and to set forth the respective rights and obligations of the
Stockholders on and after the consummation of the IPO.

NOW, THEREFORE, in consideration of the mutual covenants and undertakings
contained herein and for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:

ARTICLE I

DEFINITIONS AND USAGE

Section 1.1    Definitions. As used in this Agreement, the following terms shall
have the following meanings:

“Affiliate” means, with respect to any Person, any other Person directly or
indirectly controlling, controlled by, or under common control with such Person;
provided, that neither the Corporation nor any of its Subsidiaries will be
deemed an Affiliate of any Stockholder or any of such Stockholders’ Affiliates.
For the purposes of this definition, “control” (including the terms
“controlling” and “controlled”), with respect to the relationship between or
among two or more Persons, means the possession, directly or indirectly, of the
power to direct or cause the direction of the affairs or management of such
subject Person, whether through the ownership of voting securities, as trustee
or executor, by contract or otherwise.

“beneficial ownership” has the meaning assigned to such term in Rule 13d-3 and
Rule 13d-5 under the Exchange Act. The terms “beneficially own” and “beneficial
owner” shall have correlative meanings.

“Board of Directors” means the board of directors of the Corporation.

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“By-Laws” means the by-laws of the Corporation, as they may be amended, restated
or otherwise modified from time to time.

“Certificate of Incorporation” means the certificate of incorporation of the
Corporation, as it may be amended, restated or otherwise modified from time to
time.

“Change of Control” means (i) an acquisition by any Person or group of Persons
of Equity Securities of the Corporation, whether already outstanding or newly
issued, in a transaction or series of transactions, if immediately thereafter
such Person or group of Persons (other than the Stockholders or their Permitted
Transferees or a wholly-owned Subsidiary of the Corporation) has, or would have,
directly or indirectly, beneficial ownership of fifty percent (50%) or more of
the combined Equity Securities or voting power of the Corporation; (ii) the sale
of all or substantially all of the assets of the Corporation and its
Subsidiaries, taken as a whole, directly or indirectly, to any Person or group
of Persons (other than the Stockholders or their Permitted Transferees or a
wholly-owned Subsidiary of the Corporation) in a transaction or series of
transactions; or (iii) the consummation of a tender offer, merger,
recapitalization, consolidation, business combination, reorganization or other
transaction, or series of related transactions, involving the Corporation and
any other Person or group of Persons; unless, in the case of clause (iii) of
this definition, both (1) the then-existing Stockholders, immediately prior to
such transaction or the first transaction in such series of transactions, will
beneficially own more than fifty percent (50%) of the combined Equity Securities
or voting power of the Corporation (or, if the Corporation will not be the
surviving entity or publicly traded parent company in such transaction or series
of transactions, such surviving entity or parent) immediately after such
transaction or series of transactions and (2) the individuals who are members of
the Board of Directors, immediately prior to such transaction or the first
transaction in such series of transactions, will be entitled to cast at least a
majority of the votes of the Board of Directors (or the board of managers or
equivalent body of such surviving entity, as the case may be) after the closing
of such transaction or series of transactions. As used in this definition of
Change of Control, the term “group” shall have the same meaning assigned to such
term in Rule 13d-5 of the Exchange Act.

“Controlled Affiliate” of any Person means any Affiliate that directly or
indirectly, through one or more intermediaries, is controlled (as defined in the
definition of “Affiliate”) by such Person.

“Controlled Entity” means, as to any Person, (a) any corporation more than fifty
percent (50%) of the outstanding voting stock of which is owned by such Person
or such Person’s Affiliates, (b) any partnership of which such Person or an
Affiliate of such Person is the managing partner and in which such Person or
such Person’s Affiliates hold partnership interests representing at least fifty
percent (50%) of such partnership’s capital and profits and (c) any limited
liability company of which such Person or an Affiliate of such Person is the
manager or managing member and in which such Person or such Person’s Affiliates
hold membership interests representing at least fifty percent (50%) of such
limited liability company’s capital and profits.

 

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“Equity Security” has the meaning ascribed to such term in Rule 405 under the
Securities Act, and in any event, includes any security having the attendant
right to vote for directors or similar representatives and any general or
limited partner interest in any Person.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and any
successor law or statute, in each case together with the rules and regulations
promulgated thereunder.

“Fair Market Value” means, with respect to property (other than cash), the fair
market value of such property as determined in good faith by the Board of
Directors.

“Governmental Entity” means any court, administrative agency, regulatory body,
commission or other governmental authority, board, bureau or instrumentality,
domestic or foreign and any subdivision thereof.

“Hedging Obligation” means, with respect to any Person, any liability of such
Person under any interest rate, currency or commodity swap agreement, cap
agreement or collar agreement, and any other agreement or arrangement designed
to protect a Person against fluctuations in interest rates, currency exchange
rates or commodity prices.

“Indebtedness” of a Person means, at any date of determination, without
duplication, (i) all obligations of such Person for borrowed money, (ii) all
obligations of such Person evidenced by bonds, debentures, notes or other
similar instruments (excluding contingent obligations under surety bonds),
(iii) all obligations of such Person to pay the deferred purchase price of
property or services, except trade accounts payable arising and paid in the
ordinary course of business, (iv) the capitalized amount of all capital leases
of such Person, (v) all non-contingent obligations of such Person to reimburse
any bank or other Person in respect of amounts paid under a letter of credit,
bankers acceptance, surety bond or similar instrument, (vi) all obligations of a
type described in clauses (i) through (v) and clauses (vii) and (viii) of this
definition secured by a Lien on any asset of such Person, whether or not such
obligation is otherwise an obligation of such Person, (vii) all Hedging
Obligations of such Person, and (viii) all Indebtedness of others guaranteed by
such Person. Any obligation constituting Indebtedness solely by virtue of the
preceding clause (vi) shall be valued at the lower of the Fair Market Value of
the corresponding asset and the aggregate unpaid amount of such obligation.

“IPO” means the initial public offering of shares of Common Stock pursuant to an
effective IPO Registration Statement under the Securities Act.

“Lien” means, with respect to any asset, any mortgage, lien, pledge, charge,
security interest or encumbrance of any kind, or any other type of preferential
arrangement that has the practical effect of creating a security interest in
respect of such asset.

“Minimum Condition” means that Holdings, together with its Permitted
Transferees, maintains, directly or indirectly, beneficial ownership of at least
50% of the

 

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issued and outstanding Common Stock, as adjusted for any stock split, stock
dividend, reverse stock split, recapitalization, business combination,
reclassification or similar event, in each case with such adjustment being
determined in good faith by the Board of Directors.

“Percentage Interest” means, with respect to any Stockholder and as of any date
of determination, a fraction, expressed as a percentage, the numerator of which
is the number of shares of Common Stock held or beneficially owned by such
Stockholder as of such date and the denominator of which is the aggregate number
of shares of Common Stock issued and outstanding as of such date.

“Permitted Transferee” means, with respect to any Stockholder, any Controlled
Entity or Affiliate of such Stockholder.

“Person” means any individual, partnership, firm, corporation, limited liability
company, association, trust, unincorporated organization or other entity.

“SEC” means the United States Securities and Exchange Commission or any similar
agency then having jurisdiction to enforce the Securities Act.

“Securities Act” means the Securities Act of 1933, as amended, supplemented or
restated from time to time and any successor to such statute, and the rules and
regulations promulgated thereunder.

“Stockholder Majority” means Stockholders having beneficial ownership of a
majority of the Common Stock beneficially owned by the Stockholders.

“Subsidiary” means, with respect to any Person, any corporation or other entity
of which a majority of (i) the voting power of the voting equity securities or
(ii) the outstanding equity interests is owned, directly or indirectly, by such
Person.

“Transfer” means any sale, assignment, bequest, conveyance, devise, gift
(outright or in trust), pledge, encumbrance, hypothecation, mortgage, exchange,
transfer or other disposition or act of alienation, whether voluntary or
involuntary or by operation of law. The terms “Transferred” and “Transferring”
have correlative meanings.

“Underwriting Agreement” means the Underwriting Agreement with respect to the
IPO.

“Voting Securities” means the Common Stock and any other securities of the
Corporation or any Subsidiary of the Corporation which would entitle the holders
thereof to vote with the holders of Common Stock in the election of directors of
the Corporation.

Section 1.2    Interpretation. In this Agreement and in the exhibits hereto,
except to the extent that the context otherwise requires:

(a)    the headings are for convenience of reference only and shall not affect
the interpretation of this Agreement;

 

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(b)    defined terms include the plural as well as the singular and vice versa;

(c)    words importing gender include all genders;

(d)    a reference to any statute or statutory provision shall be construed as a
reference to the same as it may have been or may from time to time be amended,
extended, re-enacted or consolidated and to all statutory instruments or orders
made thereunder;

(e)    any reference to a “day” shall mean the whole of such day, being the
period of 24 hours running from midnight to midnight;

(f)    references to Articles, Sections, subsections, clauses and Exhibits are
references to Articles, Sections, subsections, clauses and Exhibits of and to,
this Agreement;

(g)    the words “including” and “include” and other words of similar import
shall be deemed to be followed by the phrase “without limitation”; and

(h)    unless otherwise specified, references to any party to this Agreement or
any other document or agreement shall include its successors and permitted
assigns.

ARTICLE II

APPROVAL AND CONSULTATION OF CERTAIN MATTERS

Section 2.1    Approval of Stockholder Majority. For so long as the Minimum
Condition is satisfied, the Corporation shall not, and shall cause its
Subsidiaries and Controlled Affiliates not to, take any of the following actions
or any plan with respect thereto without the prior approval (which approval may
be in the form of an action by written consent) of a Stockholder Majority:

(a)    any increase or decrease in the size of the Board of Directors;

(b)    the incurrence of an aggregate amount of Indebtedness of the Corporation
and its Subsidiaries or Controlled Affiliates taken as a whole (other than
(i) Indebtedness of the Corporation and its Subsidiaries or Controlled
Affiliates as of the date hereof or any refinancing thereof up to the same
maximum principal amount of such Indebtedness outstanding as of the date hereof,
(ii) capital leases contemplated by an annual budget approved by the Board of
Directors and (iii) inter-company Indebtedness) in excess of $10.0 million;

(c)    any authorization, creation (by way of reclassification, merger,
consolidation or otherwise) or issuance of any Equity Securities of any kind of
the Corporation or its Subsidiaries, including any designation of the rights
(including special voting rights) of one or more classes of preferred stock of
the Corporation, other than (i)

 

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pursuant to any equity compensation plan of the Corporation approved by the
compensation committee of the Board of Directors, (ii) the issuance of Equity
Securities of a Subsidiary of the Corporation to the Corporation or a
wholly-owned Subsidiary of the Corporation, or (iii) upon conversion of
convertible securities or upon exercise of warrants or options, which
convertible securities, warrants or options are outstanding on the date hereof
or issued in compliance with this Agreement;

(d)    any redemption, repurchase or other acquisition by the Corporation of its
Equity Securities or any declaration thereof, other than (i) the redemption,
repurchase or other acquisition by the Corporation of any Equity Securities of
any director, officer, independent contractor or employee in connection with the
termination of the employment or services of such director, officer or employee
as contemplated by the applicable equity compensation plan or award agreement
with respect to such Equity Securities, or (ii) pursuant to an offer made to all
Stockholders pro rata in accordance with each such Stockholder’s Percentage
Interest with respect to such Equity Securities (regardless of whether any or
all of such Stockholders elect to participate in such redemption, repurchase or
other acquisition);

(e)    any material acquisition of assets or Equity Securities of any Person, in
a single transaction or a series of related transactions;

(f)    fundamental changes to the nature of the business of the Corporation and
its Subsidiaries or its Controlled Affiliates, taken as a whole as of the date
hereof, which involves entry by the Corporation or any of its Subsidiaries into
material new and unrelated lines of business;

(g)    any adoption, approval or issuance of any “poison pill,” stockholder or
similar rights plan by the Corporation or its Subsidiaries or Controlled
Affiliates or any amendment, restatement, modification or waiver of such plan
after the adoption thereof has been approved by a Stockholder Majority in
accordance with this Section 2.1;

(h)    any amendment, restatement, modification or waiver of the Certificate of
Incorporation or By-Laws;

(i)    any payment or declaration of any dividend or other distribution on any
Equity Securities of the Corporation or entering into a recapitalization
transaction the primary purpose of which is to pay a dividend, other than
dividends or distributions required to be made pursuant to the terms of any
outstanding preferred stock of the Corporation;

(j)    appointment or removal of the chairperson of the Board of Directors or
the chief executive officer, chief financial officer, general counsel,
controller or any other officer of the Corporation that would be subject to
Section 16 of the Exchange Act;

(k)    the consummation of a Change of Control or entry into any contract or
agreement the effect of which would be a Change of Control; or

 

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(l)    any entry by the Corporation or any of its Subsidiaries or Controlled
Affiliates into voluntary liquidation, dissolution or commencement of bankruptcy
or insolvency proceedings, the adoption of a plan with respect to any of the
foregoing or the decision not to oppose any similar proceeding commenced by a
third party.

ARTICLE III

TRANSFER

Section 3.1    Transfers and Joinders. If a Stockholder effects any Transfer of
Common Stock to a Permitted Transferee, such Permitted Transferee may, if not a
Stockholder, within five (5) days of such Transfer, execute a joinder to this
Agreement, in form and substance reasonably acceptable to the Corporation, in
which such Permitted Transferee agrees to be a “Stockholder” for all purposes of
this Agreement and which provides that such Permitted Transferee shall be bound
by and shall fully comply with the terms of this Agreement.

Section 3.2    Binding Effect on Transferees. Subject to execution of a joinder
to this Agreement within five (5) days of the applicable Transfer, in form and
substance reasonably acceptable to the Corporation, pursuant to Section 3.1,
such Permitted Transferee shall become a Stockholder hereunder.

Section 3.3    Charter Provisions. The parties hereto shall use their respective
reasonable efforts (including voting or causing to be voted all of the Voting
Securities held of record by such party or beneficially owned by such party by
virtue of having voting power over such Voting Securities) so as to prevent any
amendment to the Certificate of Incorporation or By-Laws as in effect as of the
date hereof that would (a) add restrictions to the transferability of the Voting
Securities by any Stockholder or its Permitted Transferees at the time of such
an amendment, which restrictions are beyond those then provided for in the
Certificate of Incorporation, this Agreement or applicable securities laws or
(b) nullify any of the rights of any Stockholder or its Permitted Transferees at
the time of such amendment, which rights are explicitly provided for in this
Agreement, unless, in each such case, such amendment shall have been approved by
such Stockholder.

ARTICLE IV

BOARD REPRESENTATION

Section 4.1    Composition of Initial Board.

(a)    The Corporation and each Stockholder shall take all reasonable actions
within their respective control (including voting or causing to be voted all of
the Voting Securities held of record by such Stockholder or beneficially owned
by such Stockholder by virtue of having voting power over such Voting
Securities, and, with respect to the Corporation, as provided in Section 4.2(b),
Section 4.2(c) and Section

 

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4.2(d)) so as to cause the Board of Directors to be comprised of eight
(8) directors, who shall be divided into three (3) classes of directors in
accordance with the terms of the Certificate of Incorporation. As of the date
hereof, the eight (8) directors shall be divided into three (3) classes as
follows:

(i)    the Class I directors shall include Marka Hansen and Travis Nelson;

(ii)    the Class II directors shall include Michael Eck, Linda Heasley and
Michael Recht; and

(iii)    the Class III directors shall include Paula Bennett, Andrew Rolfe and
Michael Rahamim.

(b)    For the avoidance of doubt, Section 4.1(a) is applicable solely to the
initial composition of the Board of Directors, except that, subject to the
Certificate of Incorporation, a director shall remain a member of the class of
directors to which he or she was assigned in accordance with Section 4.1(a).

Section 4.2    Nominees.

(a)    The Corporation and each Stockholder shall take all reasonable actions
within their respective control (including voting or causing to be voted all of
the Voting Securities held of record by such Stockholder or beneficially owned
by such Stockholder by virtue of having voting power over such Voting
Securities, and, with respect to the Corporation, as provided in Section 4.2(b),
Section 4.2(c) and Section 4.2(d)) so as to cause to be elected to the Board of
Directors, and to cause to continue in office, at any given time, a number of
individuals designated by a Stockholder Majority (each, a “Stockholder
Designee”) equal to:

(i)    for so long as the Minimum Condition is satisfied, such number of
individuals constituting a majority of the Board of Directors;

(ii)    for so long as the Minimum Condition is not satisfied but the Percentage
Interest of the Stockholders and their Permitted Transferees is at least 10%,
the Percentage Interest of the Stockholders multiplied by the total number of
directors comprising the Board of Directors and rounded up to the nearest whole
number; and

(iii)    for so long as the Percentage Interest of the Stockholders and their
Permitted Transferees is at least 5% but less than 10%, the greater of (x) the
Percentage Interest of the Stockholders multiplied by the total number of
directors comprising the Board of Directors and rounded up to the nearest whole
number and (y) one director.

(b)    The Corporation agrees to (i) include in the slate of nominees
recommended by the Board of Directors the Stockholder Designees and to use its
reasonable best efforts to cause the election of each such Stockholder Designee
to the

 

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Board of Directors, including nominating each such Stockholder Designee to be
elected as a director, recommending such Stockholder Designee’s election and
soliciting proxies or consents in favor thereof, in each case subject to
applicable law, and (ii) use its reasonable best efforts to cause each class of
the Board of Directors to include, to the extent practicable, at least one
Stockholder Designee.

(c)    A Stockholder Designee may only be removed from the Board of Directors
with the approval of a Stockholder Majority. If a Stockholder Majority notifies
the Stockholders of its desire to remove, with or without cause, any Stockholder
Designee from the Board of Directors, the Stockholders shall vote or cause to be
voted all of the shares of Voting Securities held of record by such Stockholders
or beneficially owned by such Stockholders by virtue of having voting power over
such Voting Securities for the removal of such Stockholder Designee.

(d)    In the event that a vacancy is created at any time by the death,
disability, retirement, resignation or removal of any director who was a
Stockholder Designee, the Corporation agrees to take at any time and from time
to time all actions necessary to cause the vacancy created thereby to be filled
as promptly as practicable by a new Stockholder Designee; provided that, for the
avoidance of doubt, a Stockholder Majority shall not have the right to designate
a replacement director, and the Board of Directors and the Stockholders shall
not be required to take any action to cause any vacancy to be filled with any
such Stockholder Designee, to the extent that election or appointment of such
Stockholder Designee to the Board of Directors would result in a number of
directors designated by the Stockholder Majority in excess of the number of
directors that the Stockholder Majority is then entitled to designate for
membership on the Board of Directors pursuant to Section 4.2(a).

(e)    If the number of directors entitled to be designated as Stockholder
Designees pursuant to Section 4.2(a) decreases, the Stockholders shall take
reasonable actions to cause a sufficient number of Stockholder Designees to
resign from the Board of Directors at or prior to the end of such Stockholder
Designee’s term such that the number of Stockholder Designees after such
resignation(s) equals the number of directors a Stockholder Majority would have
been entitled to designate pursuant to Section 4.2(a). Any vacancies created by
such resignation may remain vacant until the next annual meeting of stockholders
or filled by a majority vote of the Board of Directors in accordance with the
By-Laws. Notwithstanding the foregoing, such Stockholder Designee(s) need not
resign from the Board of Directors at or prior to the end of such director’s
term if the Corporation’s nominating committee recommends the nomination of such
director(s) for election at the next annual meeting coinciding with the end of
such director’s term, or otherwise (and for the avoidance of doubt, such
director shall no longer be considered a Stockholder Designee).

Section 4.3    Committees. For so long as this Agreement is in effect, the
Corporation shall take all reasonable actions to cause to be appointed to any
committee of the Board of Directors a number of Stockholder Designees that is up
to the number of directors that is proportionate (rounding up to the next whole
director) to the number of Stockholder Designees that the Stockholders are
entitled to designate to the Board of

 

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Directors under this Agreement, to the extent such directors are permitted to
serve on such committees under the applicable rules of the SEC and any
applicable stock exchange. It is understood by the parties hereto that the
Stockholders shall not have any obligation to appoint any Stockholder Designee
to any committee of the Board of Directors and any failure to exercise such
right in this section in a prior period shall not constitute any waiver of such
right in a subsequent period.

ARTICLE V

INDEMNIFICATION

Section 5.1    Right to Indemnification. The Corporation shall indemnify and
hold harmless, to the fullest extent permitted by applicable law as it presently
exists or may hereafter be amended, each Stockholder, its Affiliates and its
direct and indirect partners (including partners of partners and stockholders
and members of partners), members, stockholders, managers, directors, officers,
employees and agents and each Person who controls any of them within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act (the
“Covered Persons”) from and against any and all losses, claims, damages,
liabilities and expenses (including reasonable attorneys’ fees) sustained or
suffered by any such Covered Person based upon, relating to, arising out of, or
by reason of any third party or governmental claims relating to such Covered
Person’s status as a stockholder or controlling person of the Company (including
any and all losses, claims, damages or liabilities under the Securities Act, the
Exchange Act or other federal or state statutory law or regulation, at common
law or otherwise, which relate directly or indirectly to the registration,
purchase, sale or ownership of any Equity Securities of the Company or to any
fiduciary obligation owed with respect thereto), including in connection with
any third party or governmental action or claim relating to any action taken or
omitted to be taken or alleged to have been taken or omitted to have been taken
by any Covered Person as a stockholder or controlling person, including claims
alleging so-called control person liability or securities law liability (any
such claim, a “Claim”). Notwithstanding the preceding sentence, except as
otherwise provided in Section 5.3, the Corporation shall be required to
indemnify a Covered Person in connection with a Claim (or part thereof)
commenced by such Covered Person only if the commencement of such Claim (or part
thereof) by the Covered Person was authorized by the Board of Directors.

Section 5.2    Prepayment of Expenses. To the extent not prohibited by
applicable law, the Corporation shall pay the expenses (including reasonable
attorneys’ fees) incurred by a Covered Person in defending any Claim in advance
of its final disposition; provided, however, that, to the extent required by
applicable law, such payment of expenses in advance of the final disposition of
such Claim shall be made only upon receipt of an undertaking by such Covered
Person to repay all amounts advanced if it should be ultimately determined that
such Covered Person is not entitled to be indemnified under this ARTICLE V or
otherwise.

Section 5.3    Claims. If a claim for indemnification or advancement of expenses
under this ARTICLE V is not paid in full within 30 days after a written claim
therefor by

 

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the Covered Person has been received by the Corporation, such Covered Person may
file suit to recover the unpaid amount of such claim and, if successful in whole
or in part, shall be entitled to be paid the expense of prosecuting such claim.
In any such action the Corporation shall have the burden of proving that the
Covered Person is not entitled to the requested indemnification or advancement
of expenses under applicable law.

Section 5.4    Nonexclusivity of Rights. The rights conferred on any Covered
Person by this ARTICLE V shall not be exclusive of any other rights that such
Covered Person may have or hereafter acquire under any statute, provision of the
Certificate of Incorporation or By-Laws or any agreement, vote of stockholders
or disinterested directors or otherwise.

Section 5.5    Other Sources. Subject to Section 5.6, the Corporation’s
obligation, if any, to indemnify or to advance expenses to any Covered Person
shall be reduced by any amount such Covered Person may collect as
indemnification or advancement of expenses from any other Person.

Section 5.6    Indemnitor of First Resort. The Corporation hereby acknowledges
that the Covered Persons may have certain rights to advancement and/or
indemnification by certain Affiliates of TowerBrook Capital Partners L.P.
(collectively, the “Fund Indemnitors”). In all events, (i) the Corporation
hereby agrees that it is the indemnitor of first resort (i.e., its obligation to
a Covered Person to provide advancement and/or indemnification to such Covered
Person are primary and any obligation of the Fund Indemnitors (including any
Affiliate thereof other than the Corporation) to provide advancement or
indemnification hereunder or under any other indemnification agreement (whether
pursuant to contract, by-laws or charter), or any obligation of any insurer of
the Fund Indemnitors to provide insurance coverage, for the same expenses,
liabilities, judgments, penalties, fines and amounts paid in settlement
(including all interest, assessments and other charges paid or payable in
connection with or in respect of such expenses, liabilities, judgments,
penalties, fines and amounts paid in settlement) incurred by such Covered Person
are secondary and (ii) if any Fund Indemnitor (or any Affiliate thereof, other
than the Corporation) pays or causes to be paid, for any reason, any amounts
otherwise indemnifiable hereunder or under any other indemnification agreement
(whether pursuant to contract, by-laws or charter) with such Covered Person,
then (x) such Fund Indemnitor (or such Affiliate, as the case may be) shall be
fully subrogated to all rights of such Covered Person with respect to such
payment and (y) the Corporation shall fully indemnify, reimburse and hold
harmless such Fund Indemnitor (or such other Affiliate, as the case may be) for
all such payments actually made by such Fund Indemnitor (or such other
Affiliate, as the case may be).

 

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ARTICLE VI

TERMINATION

Section 6.1    Term. The terms of this Agreement shall terminate, and be of no
further force and effect:

(a)    upon the mutual consent of all of the parties hereto;

(b)    with respect to each Stockholder, if such Stockholder has Transferred all
(but not less than all) of its Common Stock; or

(c)    subject to Section 2.1(k), upon the consummation of a Change of Control.

Section 6.2    Survival. If this Agreement is terminated pursuant to
Section 6.1, this Agreement shall become void and of no further force and
effect, except for: (i) the provisions set forth in this Section 6.2, Article V,
Section 8.4, Section 8.5, Section 8.6 and Section 8.9 and (ii) the rights of the
Stockholders with respect to the breach of any provision hereof by the
Corporation, which shall, in each case of clauses (i) and (ii), survive the
termination of this Agreement.

ARTICLE VII

REPRESENTATIONS AND WARRANTIES

Section 7.1    Representations and Warranties of Holdings. Each Stockholder
represents and warrants to the Corporation that (a) such Stockholder is duly
authorized to execute, deliver and perform this Agreement; (b) this Agreement
has been duly executed by such Stockholder and is a valid and binding agreement
of such Stockholder, enforceable against such Stockholder in accordance with its
terms; and (c) the execution, delivery and performance by such Stockholder of
this Agreement does not violate or conflict with or result in a breach of or
constitute (or with notice or lapse of time or both would constitute) a default
under any agreement to which such Stockholder is a party or, if such Stockholder
is an entity, the organizational documents of such Stockholder.

Section 7.2    Representations and Warranties of the Corporation. The
Corporation represents and warrants to Holdings that (a) the Corporation is duly
authorized to execute, deliver and perform this Agreement; (b) this Agreement
has been duly authorized, executed and delivered by the Corporation and is a
valid and binding agreement of the Corporation, enforceable against the
Corporation in accordance with its terms; and (c) the execution, delivery and
performance by the Corporation of this Agreement does not violate or conflict
with or result in a breach by the Corporation of or constitute (or with notice
or lapse of time or both would constitute) a default by the Corporation under
the Certificate of Incorporation or By-Laws, any existing applicable law, rule,
regulation, judgment, order, or decree of any Governmental Entity exercising any
statutory or regulatory authority of any of the foregoing, domestic or foreign,
having jurisdiction over the Corporation or any of its Subsidiaries or
Controlled Affiliates or any

 

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of their respective properties or assets, or any agreement or instrument to
which the Corporation or any of its Subsidiaries or Controlled Affiliates is a
party or by which the Corporation or any of its Subsidiaries or Controlled
Affiliates or any of their respective properties or assets may be bound.

ARTICLE VIII

MISCELLANEOUS

Section 8.1    Entire Agreement. This Agreement, together with documents
contemplated hereby, constitute the entire agreement between the parties hereto
pertaining to the subject matter hereof and fully supersede any and all prior or
contemporaneous agreements or understandings between the parties hereto
pertaining to the subject matter hereof.

Section 8.2    Further Assurances. Each of the parties hereto does hereby
covenant and agree on behalf of itself, its successors, and its assigns, without
further consideration, to prepare, execute, acknowledge, file, record, publish,
and deliver such other instruments, documents and statements, and to take such
other actions as may be required by law or reasonably necessary to effectively
carry out the intent and purposes of this Agreement.

Section 8.3    Notices. Any notice, consent, payment, demand, or communication
required or permitted to be given by any provision of this Agreement shall be in
writing and shall be (a) delivered personally to the Person or to an officer of
the Person to whom the same is directed, (b) sent by facsimile, overnight mail
or registered or certified mail, return receipt requested, postage prepaid, or
(c) sent by e-mail, with electronic or written confirmation of receipt, in each
case addressed as follows:

(i)    if to the Corporation, to:

J.Jill, Inc.

4 Batterymarch Park

Quincy, Massachusetts 02169

Email: Vijay.Moses@jjill.com

Attention: General Counsel

with a copy to:

Paul, Weiss, Rifkind, Wharton & Garrison LLP

1285 Avenue of the Americas

New York, New York 10019-6064

Fax: (212) 492-0546

Email: ajdeckelbaum@paulweiss.com

Attention: Ariel J. Deckelbaum

 

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(ii)     if to any Stockholder, to:

the address and facsimile number of such Stockholder set

forth in the records of the Corporation.

Any such notice shall be deemed to be delivered, given and received for all
purposes as of: (A) the date so delivered, if delivered personally, (B) upon
receipt, if sent by facsimile or e-mail, or (C) on the date of receipt or
refusal indicated on the return receipt, if sent by registered or certified
mail, return receipt requested, postage and charges prepaid and properly
addressed.

Section 8.4    Governing Law. ALL ISSUES AND QUESTIONS CONCERNING THE
APPLICATION, CONSTRUCTION, VALIDITY, INTERPRETATION AND ENFORCEMENT OF THIS
AGREEMENT AND THE EXHIBITS AND SCHEDULES TO THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE, AND
SPECIFICALLY THE GENERAL CORPORATION LAW 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.

Section 8.5    Consent to Jurisdiction. ANY AND ALL SUITS, LEGAL ACTIONS OR
PROCEEDINGS ARISING OUT OF THIS AGREEMENT (INCLUDING AGAINST ANY DIRECTOR OR
OFFICER OF THE CORPORATION) SHALL BE BROUGHT SOLELY IN THE COURT OF CHANCERY OF
THE STATE OF DELAWARE AND EACH PARTY HERETO HEREBY SUBMITS TO AND ACCEPTS THE
EXCLUSIVE JURISDICTION OF SUCH COURT FOR THE PURPOSE OF SUCH SUITS, LEGAL
ACTIONS OR PROCEEDINGS. IN ANY SUCH SUIT, LEGAL ACTION OR PROCEEDING, EACH PARTY
HERETO WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS AND
AGREES THAT SERVICE THEREOF MAY BE MADE BY CERTIFIED OR REGISTERED MAIL DIRECTED
TO IT AT ITS ADDRESS SET FORTH IN THE BOOKS AND RECORDS OF THE CORPORATION. TO
THE FULLEST EXTENT PERMITTED BY LAW, EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES
ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OR ANY
SUCH SUIT, LEGAL ACTION OR PROCEEDING IN ANY SUCH COURT AND HEREBY FURTHER
WAIVES ANY CLAIM THAT ANY SUIT, LEGAL ACTION OR PROCEEDING BROUGHT IN ANY SUCH
COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

Section 8.6    Equitable Remedies. The parties hereto agree that irreparable
damage would occur in the event that any of the provisions of this Agreement
were not performed in accordance with its specific terms or was otherwise
breached. It is accordingly agreed that the parties hereto shall be entitled to
an injunction or injunctions and other equitable remedies to prevent breaches of
this Agreement and to enforce

 

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specifically the terms and provisions hereof in the Court of Chancery of the
State of Delaware, this being in addition to any other remedy to which they are
entitled at law or in equity. Any requirements for the securing or posting of
any bond with respect to such remedy are hereby waived by each of the parties
hereto. Each party further agrees that, in the event of any action for an
injunction or other equitable remedy in respect of such breach or enforcement of
specific performance, it will not assert the defense that a remedy at law would
be adequate.

Section 8.7    Construction. This Agreement shall be construed as if all parties
hereto prepared this Agreement.

Section 8.8    Counterparts. This Agreement may be executed in any number of
counterparts, and each such counterpart shall for all purposes be deemed an
original, and all such counterparts shall together constitute but one and the
same agreement.

Section 8.9    Third Party Beneficiaries. Except as set forth in ARTICLE V
nothing in this Agreement, express or implied, is intended or shall be construed
to give any Person other than the parties hereto (or their respective legal
representatives, successors, heirs and distributees) any legal or equitable
right, remedy or claim under or in respect of any agreement or provision
contained herein, it being the intention of the parties hereto that this
Agreement is for the sole and exclusive benefit of such parties (or such legal
representatives, successors, heirs and distributees) and for the benefit of no
other Person.

Section 8.10    Binding Effect. Except as otherwise provided herein, all the
terms and provisions of this Agreement shall be binding upon, shall inure to the
benefit of and shall be enforceable by the respective successors and permitted
assigns of the parties hereto. No Stockholder may assign any of its rights
hereunder to any Person other than a Permitted Transferee. Each Permitted
Transferee of any Stockholder shall be subject to all of the terms of this
Agreement, and by taking and holding such shares such Person shall be entitled
to receive the benefits of and be conclusively deemed to have agreed to be bound
by and to comply with all of the terms and provisions of this Agreement.
Notwithstanding the foregoing, no successor or assignee of the Corporation shall
have any rights granted under this Agreement until such Person shall acknowledge
its rights and obligations hereunder by a signed written statement of such
Person’s acceptance of such rights and obligations.

Section 8.11    Severability. In the event that any provision of this Agreement
as applied to any party or to any circumstance, shall be adjudged by a court to
be void, unenforceable or inoperative as a matter of law, then the same shall in
no way affect any other provision in this Agreement, the application of such
provision in any other circumstance or with respect to any other party, or the
validity or enforceability of the Agreement as a whole.

Section 8.12    Adjustments Upon Change of Capitalization. In the event of any
change in the outstanding Common Stock, by reason of dividends, splits, reverse
splits, spin-offs, split-ups, recapitalizations, combinations, exchanges of
shares and the like, the

 

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term “Common Stock” shall refer to and include the securities received or
resulting therefrom, but only to the extent such securities are received in
exchange for or in respect of Common Stock.

Section 8.13    Amendments; Waivers.

(a)    No provision of this Agreement may be amended or waived unless such
amendment or waiver is in writing and signed, in the case of an amendment, by
the Corporation and a Stockholder Majority, or in the case of a waiver, by
either the Corporation if such waiver is to be effective against the
Corporation, or a Stockholder Majority, if such waiver is to be effective
against the Stockholders; provided that any amendment or waiver that affects the
rights or obligations of any Stockholder hereunder in a manner
disproportionately adverse to such Stockholder as compared to the other
Stockholders shall require the written consent of such Stockholder.

(b)    No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.

Section 8.14    Actions in Other Capacities. Nothing in this Agreement shall
limit, restrict or otherwise affect any actions taken by any Stockholder in its
capacity as a stockholder, partner or member of the Corporation or any of its
Subsidiaries or Controlled Affiliates.

 

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IN WITNESS WHEREOF, the parties have caused this Stockholders Agreement to be
duly executed and delivered, all as of the date first set forth above.

 

J.JILL, INC. By:  

/s/ David Biese

  Name:   David Biese   Title:   Chief Financial Officer TI IV JJILL HOLDINGS,
LP By:   TI IV JJ GP, LLC Its:   General Partner By:  

/s/ Glenn Miller

  Name:   Glenn F. Miller   Title:   Vice President and Secretary

 

[Signature Page to Stockholders Agreement]