Exhibit 10.8
G REMAINDER CORP.
823 Eleventh Avenue
New York, New York 10019
March 1, 2000
Gristede's Operating Corp.
823 Eleventh Avenue
New York, New York 10019
Gentlemen:
On February 6, 1998 G Remainder Corp. ("G Corp.") and Gristede's Operating
Corp ("Gristede's") entered into an asset purchase agreement (the "Purchase
Agreement") pursuant to which G Corp. agreed to sell to Gristede's certain
assets subject to certain liabilities relating to a supermarket located at 1644
York Avenue, New York, New York (the "Store").
This letter sets forth our agreement as follows:
1. Effective as of February 6, 1998 the Purchase Agreement and the
purchase and sale thereunder are rescinded.
2. Effective as of February 6, 1998, Gristede's shall have the right to
operate the Store and all of the assets comprising the Store for its own
account. From February 6, 1998 (the "Commencement Date") until the termination
of this Agreement, Gristede's agrees to (i) provide all personnel for the
operations of the Store at its own cost and expense, (ii) pay all taxes incurred
from the operation of the Store, (iii) make all payments required to be made by
the tenant under the lease for the Store directly to the landlord and (iv) pay
all other expenses incurred in connection with the operations of the Store.
Gristede's shall be entitled to retain all revenues generated from the operation
of the Store.
3. Without limiting the generality of Paragraph 2 hereof, Gristede's is
hereby granted, full and complete authority to operate the Store under the name
"Gristede's" or under such other name as Gristede's shall from time to time deem
appropriate, and to do everything and to take such action necessary for the
conduct of business of the Store and for the purchasing of merchandise and
equipment for the operation of the Store as Gristede's shall in its sole
discretion determine. By means of example and not of limitation, Gristede's may
conduct the following activities with respect to the Store:
- Purchasing inventory, merchandise and equipment; maintaining the
operating books and accounting records of the Store; conducting sale
and promotional activities; and conducting all merchandising and
advertising activities;
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- Hiring and firing of employees, agents, and the dealing with
independent contractors as Gristede's shall deem necessary,
convenient, advantageous or proper to the operation of the business
at the Store;
- Applying for such licenses and permits as Gristede's may determine
to be necessary, convenient, advantageous or proper for the
operation of the Store;
- Implementing selling prices and gross margin goals set by Gristede's
from time to time;
- Negotiating contracts for the purchase, sale or disposition of
merchandise and equipment at retail or wholesale, upon such terms as
Gristede's shall determine to be necessary, convenient, advantageous
or proper;
- Negotiating contracts of any type and description for services that
Gristede's may determine from time to time to be necessary,
convenient or advantageous to the operation of the business at the
Store;
- Negotiating leases for personal property and/or real property for
the Store;
- Obtaining and maintaining insurance policies as Gristede's may deem
necessary, convenient, advantageous or proper for the operation of
the business at the Store, naming itself as insured party.
4. Gristede's hereby agrees to indemnify, defend and hold harmless G
Corp., its directors, officers, employees, agents and affiliates and their
successors and assigns, from and against all claims, actions or causes of
action, assessments, demands, losses, damages, judgments, settlements,
liabilities, costs and expenses, including, without limitation, costs and legal
or other expenses for investigating or defending any action or threatened
actions, interest, penalties, and reasonable attorneys' fees and expenses of any
nature whatsoever, whether actual or consequential (collectively, "Damages")
asserted against, resulting to, imposed upon or incurred by G Corp., directly or
indirectly, by reason of Gristede's operation of the Store. G Corp. shall
promptly notify Gristede's of the existence of any claim, demand or other matter
to which the indemnification obligations may apply. G Corp. shall give
Gristede's reasonable opportunity to defend the same at its own expense and with
counsel of its own selection; provided that G Corp. may participate in such
defense with its own counsel at its own expense.
5. (a) To induce Gristede's to enter into this Agreement, G Corp. grants
Gristede's, its parent Gristede's Foods, Inc. ("GRI"), or any other affiliated
or non-affiliated entity designated by Gristede's or GRI, an option, valid until
December 31, 2005, to purchase the Store at the fair market price established on
October 11, 1999 by the GRI board (excluding John Catsimatidis) for the Store.
This option price is $2,778,175.00.
(b) In consideration of the grant to Gristede's of the operating rights to
the Store as provided herein, Gristede's shall pay to G Corp. $1.00 per annum
from the Commencement Date, plus such amount as shall from time to time be
determined by the directors of GRI (excluding John Catsimatidis).
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6. This Agreement shall terminate on December 3, 2000; provided, however,
that the term of this Agreement shall automatically be extended for additional
one year periods unless either Gristede's or G Corp. shall have given the other
notice that it does not wish to extend this Agreement not later than ninety (90)
days prior to the end of the then current term.
7. The terms and conditions of this Agreement shall inure to the
successors and assigns of each party.
8. This Agreement constitutes the entire agreement between Gristede's and
G Corp. concerning the subject matter hereof and shall be deemed to supersede
and replace all prior agreements, understandings and undertakings, whether oral
or written.
If this Agreement correctly expresses your understanding, kindly so
indicate by signing all of the enclosed copies and by returning two (2) fully
executed copies to the undersigned.
Very truly yours,
G REMAINDER CORP.
By: /s/ John a. Catsimatidis
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John A. Castimatidis
Chairman of the Board
This 1st day of March 2000, the undersigned hereby acknowledges and agrees to
the foregoing terms and conditions.
GRISTEDE'S OPERATING CORP.
By: /s/ John A. Catsimatidis
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John A. Catsimatidis
Chairman of the Board
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