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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------
FORM 8-K
Current Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) June 30, 1996
JERRY'S FAMOUS DELI, INC.
(Exact name of registrant as specified in its charter)
California 0-26956 95-3302338
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
12711 Ventura Boulevard, Suite 400
Studio City, California 91604
(Address of principal executive offices, including zip code)
Registrant's telephone number, including area code: (818) 766-8311
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Item 2. Acquisition or Disposition of Assets
On June 30, 1996, Jerry's Famous Deli, Inc. (the "Company")
completed the purchase of two delicatessen restaurants operated under the name
"Solley's" and located in Woodland Hills, California and Sherman Oaks,
California (collectively, the "Restaurants" and individually, a "Restaurant").
The purchase was completed pursuant to the terms of an Asset Purchase Agreement,
dated June 11, 1996, among the Company, Solley's, Inc., a California
corporation, and Sol Zide, the sole shareholder of Solley's, Inc.
The Woodland Hills Restaurant consists of approximately 6,975
square feet of leased space at 21857 Ventura Boulevard in Woodland Hills,
California. Concurrently with the closing, the Company extended the lease to
approximately 1,625 contiguous square feet and obtained an option to lease
additional contiguous spaces of approximately 800 and 1,200 square feet. The
Sherman Oaks Restaurant which is located at 4578 Van Nuys Boulevard in Sherman
Oaks, California, consists of approximately 5,400 square feet of restaurant
space and a separate bakery consisting of approximately 3,280 square feet.
The purchase price for the Restaurants and related assets was
$2,325,000 and was paid in full at closing. Related assets acquired by the
Company include restaurant equipment and fixtures, delivery vehicles and a
limited five-year covenant not to compete from Sol Zide. The primary source of
funds for the purchase was cash on hand as well as proceeds of loans made to the
Company in May 1996 pursuant to a revolving line of credit with Bank of America
which expired on June 1, 1996.
The Company intends to continue to operate the acquired
Restaurants as delicatessen-style restaurants. The Company intends to convert
one of the acquired Restaurants into a Jerry's Famous Deli restaurant as soon as
possible and may elect to change the name, menu, format and hours of operations
of the remaining Restaurant to conform to the Jerry's Famous Deli restaurant
style. The bakery attached to the Sherman Oaks Restaurant will continue as a
retail bakery and it is intended that production will be expanded to supply
other Company restaurants in Southern California with baked goods.
For further information see the Asset Purchase Agreement and
related lease documents filed herewith as Exhibits 10.1 through 10.7.
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Item 7. Financial Statements and Exhibits
(a) Financial Statements of Business Acquired.
It is currently impracticable to provide financial
statements of the acquired Restaurants. The Company's
independent auditor is currently completing its audit
of the financial statements of the acquired
Restaurants and it is anticipated that the Company
will file those audited financial statements no later
than 60 days following the date by which this Form
8-K must be filed.
(b) Pro Formal Financial Information.
It is currently impracticable to provide pro forma
financial statements of the acquired Restaurants. The
Company's independent auditor is currently completing
its audit of the financial statements of the acquired
Restaurants and it is anticipated that the Company
will file the pro forma financial statements no later
than 60 days following the date by which this Form
8-K must be filed.
(c) Exhibits.
10.1 Asset Purchase Agreement, dated June 11, 1996, among
the Company, Solley's, Inc. and Sol Zide
10.2 Lease - Shopping Center Form, dated August 31, 1993,
between Sol Zide and Plaza International
10.3 Amendment to Lease, dated April 4, 1996, between Sol
Zide and Plaza International
10.4 Landlord Consent and Amendment to Lease, dated April
4, 1996, between the Company and Plaza International
10.5 Shopping Center Lease, dated April 2, 1984, between
Solley's Inc. and WRAM Development Company
10.6 First Amendment to Shopping Center Lease, dated March
6, 1992, between Solley's, Inc. and WRAM Development
Company
10.7 Landlord Consent and Amendment to Lease, dated May 6,
1996, among the Company, Solley's, Inc. and WRAM
Development Company
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
Dated: July 11, 1996 JERRY'S FAMOUS DELI, INC.
By: /s/ Isaac Starkman
President and Chief Executive Officer
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Sequentially Numbered
Number Description Page
<S> <C> <C>
10.1 Asset Purchase Agreement, dated June 11, 1996,
among the Company, Solley's, Inc. and Sol Zide
10.2 Lease - Shopping Center Form, dated August 31,
1993, between Sol Zide and Plaza International
10.3 Amendment to Lease, dated April 4, 1996, between
Sol Zide and Plaza International
10.4 Landlord Consent and Amendment to Lease, dated
April 4, 1996, between the Company and Plaza
International
10.5 Shopping Center Lease, dated April 2, 1984,
between Solley's Inc. and WRAM Development
Company
10.6 First Amendment to Shopping Center Lease, dated
March 6, 1992, between Solley's, Inc. and WRAM
Development Company
10.7 Landlord Consent and Amendment to Lease, dated
May 6, 1996, among the Company, Solley's, Inc.
and WRAM Development Company
</TABLE>
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Exhibit 10.1
ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT (this "Agreement") is made and
entered into as of this 11th day of June, 1996, by and among JERRY'S FAMOUS
DELI, INC., a California corporation ("Buyer"), SOLLEY'S INC., a California
corporation ("Solley's"), and Sol Zide, an individual and sole shareholder of
Solley's ("Zide"). Solley's and Zide are sometimes collectively referred to
herein as "Sellers," and individually as a "Seller."
RECITALS:
A. Sellers are engaged in the business of owning and operating
two delicatessen restaurants under the name "Solley's."
B. Sellers and Buyer have entered into a letter of intent,
dated as of April 9, 1996, pursuant to which Buyer has agreed in principal to
acquire the Restaurants (as defined in this Agreement).
C. Sellers desire to sell to Buyer the assets of the
Restaurants and the assets related to the operation thereof, and Buyer desires
to acquire such assets on the terms and conditions hereinafter set forth.
AGREEMENTS:
NOW, THEREFORE, in consideration of the premises and the
mutual promises contained herein, the parties hereto covenant and agree as
follows:
Definitions. For purposes of this Agreement, the following
terms shall have the following meanings:
"ABC" means the California Department of Alcoholic
Beverage Control.
"Additional Security Deposits" shall have the meaning
ascribed in Section 2 a. v. of this Agreement.
"Assets" means the Restaurants and all assets
utilized in connection with the operation of the Restaurants, including, without
limitation, the Leasehold Estate (including the Security Deposits), the FF&E,
the Personal Property, the Intangible Property, the Books and Records (only to
the extent that copies of such Books and Records are requested by Buyer in
accordance with Section 7(k) of this Agreement), and the Liquor Licenses; but
does not include the Excluded Assets.
"Assignment of Intangible Property" means the
Assignment of Intangible Property, to be duly executed and delivered by Sellers
in accordance with this Agreement,
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assigning to Buyer all of Sellers' right, title and interest in and to the
Intangible Property. The Assignment of Intangible Property shall be in the form
of, and upon the terms contained in, Exhibit "A."
"Bill of Sale" means the Bill of Sale, to be duly
executed and delivered by Sellers in accordance with this Agreement, conveying
to Buyer all of the FF&E and the Personal Property. The Bill of Sale shall be in
the form of, and upon the terms contained in, Exhibit "B."
"Books and Records" means copies of all menus,
recipes, books, records and accounts, correspondence, customer or supplier
lists, marketing information and any confidential information relating to the
Assets or the Restaurants; provided, however, that such term shall not include
copies of any employment records unless Buyer has obtained the written consent
of the employee(s) with respect to which such employment information is to be
provided.
"Buyer Indemnitees" shall have the meaning ascribed
in Section 9 a. of this Agreement.
"Closing" means the closing of the transactions
contemplated herein which closing shall occur on the Closing Date.
"Closing Date," unless otherwise agreed to in writing
by the parties hereto, means the date which is three (3) business days after all
of the following have occurred: (i) the date that all applicable periods have
run under applicable Bulk Sales Notice laws, and (iii) the date that all
applicable periods have run and all actions necessary for the Liquor Licenses to
be transferred to Buyer have been taken; provided, however, that subject to the
satisfaction of all conditions to Closing set forth in Section 10 of this
Agreement, the Closing Date shall occur no later than June 30, 1996.
"Deposit" means the One Hundred Thousand and 00/100
Dollars ($100,000) deposited by Buyer into the Escrow pursuant to the terms of
the Letter of Intent.
"Escrow Holder " means Nettie Becker Escrow, Inc.,
301 North Canon Drive, Beverly Hills, California 90210.
"Escrow" means that certain escrow established with
Escrow Holder for the purpose of completing the purchase and sale of the Liquor
Licenses in accordance with Division 6 of the California Commercial Code and
Sections 24071-24074 of the Business and Professions Code of California and in
accordance with the terms and conditions of this Agreement.
"Excluded Assets" means those assets of Sellers
listed in Exhibit "C" of this Agreement.
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"FF&E" means all furniture, fixtures and equipment
owned or leased by Sellers and used in connection with the operation of either
Restaurant, including, without limitation, the items listed in Exhibit "D"
hereto.
"Holdback Claim" shall have the meaning ascribed in
Section 3 of this Agreement.
"Holdback Period" shall have the meaning ascribed in
Section 3 of this Agreement.
"Insurance Policies" shall have the meaning ascribed
in Section 5 o. of this Agreement.
"Intangible Property" means all of Sellers' right,
title and interest in and to any and all intangible property now and through the
Closing Date owned by either Seller and/or used in connection with the
ownership, development, use and/or operation of the Restaurant, including,
without limitation, Licenses and Permits, goodwill, and each and every
tradename, trademark, service mark and other similar assets of Sellers existing
on the Closing Date, including, without limitation, all of Sellers' right, title
and interest in and to the name "Solley's" and the goodwill associated
therewith.
"Landlord Consents" means the Woodland Hills Consents
and the Sherman Oaks Consent.
"Leasehold Estate" means the leasehold estate created
under the Restaurant Leases, including any and all right, title and interest of
either Seller in and to the Security Deposits.
"Letter of Intent" means that certain Letter of
Intent, dated as of April 9, 1996, among Solley's, Zide and Buyer.
"Licenses and Permits" means all of Sellers' right,
title, interests, privileges, benefits and remedies in, to and under all
authorizations, approvals, permits, licenses agreements, variances, plans and
specifications and land use entitlement held by Sellers and/or relating to the
construction, reconstruction, occupancy, operation or use of any part of the
Restaurant (including, without limitation, all building permits, certificates of
occupancy, business licenses and the Liquor License).
"Liquor Licenses" means that (i) certain Liquor
License Type 41-20662 used in connection with the operation of the Woodland
Hills Restaurant, and (ii) that certain Liquor License Type 41-163916 used in
connection with operation of the Sherman Oaks Restaurant.
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"Personal Property" means all personal property of
Sellers located on or in or used in connection with the Restaurant, including,
but not limited to, food and beverage inventory, all consumables, motor
vehicles, cash registers, telephone systems, computer and related equipment and
software, all furniture, fixtures, furnishings and equipment, ovens, stoves,
refrigerators, chinaware, glassware, silverware, kitchen utensils, bars, bar
fixtures and equipment, lamps, mirrors, heating and lighting fixtures and
equipment, linens and other similar items of Sellers which exist on the date of
this Agreement, subject to ordinary wear and tear and consumption between the
date of this Agreement and the Closing Date, but excluding therefrom the
Excluded Assets listed in Exhibit C of this Agreement.
"Purchase Price" means Two Million Three Hundred
Twenty Five Thousand and 00/100 Dollars ($2,325,000.00).
"Restaurant Leases" means the Woodland Hills Lease
and the Sherman Oaks Lease, as amended by the Woodland Hills Consents and the
Sherman Oaks Consent, respectively.
"Seller Indemnitees" shall have the meaning ascribed
in Section 9 b. of this Agreement.
"Service Contracts" means the maintenance contracts,
equipment, leases and any other similar obligations, commitments or arrangements
of either Seller, together with all supplements, amendments and modifications
thereto, relating to the development, marketing, operation, maintenance or
enjoyment of the Restaurant.
"Security Deposits" shall mean the security deposits
of Sellers identified in Exhibit "E" to this Agreement.
"Sherman Oaks Consent" means that certain Landlord
Consent and Amendment to Lease, dated as of May 6, 1996 among Solley's, Buyer
and WRAM Development Company.
"Sherman Oaks Lease" means that certain Shopping
Center Lease, dated as of April 2, 1984, as amended by that certain First
Amendment to Shopping Center Lease, dated March 6, 1992, by and between WRAM
Development Company and Solley's with respect to the commercial space located at
4578 and 4580 Van Nuys Boulevard, Sherman Oaks, California, including any
amendments thereto effected or to be effected by the Sherman Oaks Consent.
"Sherman Oaks Restaurant" means the restaurant and
related bakery owned and operated by Sellers at 4578 and 4580 Van Nuys
Boulevard, Sherman Oaks, California.
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"Tax Clearance Certificates" means tax clearance
certificates issued by the State Board of Equalization and the Employment
Development Department certifying that all sales and use taxes and employment
taxes, respectively, relating to the operation of the Restaurants through a date
no earlier than five (5) business days prior to the Closing Date have been
properly withheld and paid over to such governmental agencies in accordance with
applicable laws.
"Tradenames" shall have the meaning ascribed in
Section 5 p. of this Agreement.
"Woodland Hills Consents" means (i) that certain
Landlord Consent and Amendment to Lease, dated as of April 4, 1996, between
Buyer and Plaza International, and (ii) that certain Amendment to Lease, dated
April 4, 1996, between Zide and Plaza International, together with any
amendments to either such document through the Closing Date.
"Woodland Hills Lease" means that certain Lease --
Shopping Center Form, dated as of August 31, 1993, by and between Plaza
International and Zide with respect to the commercial space known as 21857 and
21845 Ventura Boulevard, Woodland Hills, California, including any amendments
thereto effected or to be effected by the Woodland Hills Consents.
"Woodland Hills Restaurant" means the restaurant
owned and operated by Sellers at 21857 and 21845 Ventura Boulevard, Woodland
Hills, California.
1. Purchase and Sale.
a. Conveyance of Assets. On the terms and subject to the
conditions set forth in this Agreement, on the Closing Date Sellers shall
convey, transfer, assign, sell and deliver to Buyer, and Buyer shall acquire,
accept and purchase, the Assets.
b. Closing. The Closing shall, unless another date, time or
place is agreed to in writing by the parties hereto, take place at the offices
of Jeffer, Mangels, Butler & Marmaro LLP, at 10:00 a.m., Pacific time on the
Closing Date.
c. No Assumption of Liabilities. Except for post-Closing
obligations of Sellers under the Restaurant Leases, Buyer shall not assume any
of the liabilities of either Seller whatsoever, whether known or unknown, fixed
or contingent, whether or not related to the Assets acquired, or arising or
relating to events prior to the Closing Date, and Sellers shall jointly and
severally indemnify Buyer in accordance with Section 9 of this Agreement.
d. Allocation of Purchase Price. The parties hereto agree
that, for purposes of calculating any tax obligation arising out of the sale of
Assets, the Purchase Price shall be allocated as set forth in Exhibit "F"
attached hereto.
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2. Deposit and Payment of Purchase Price and Other Closing Payments.
a. Deposits. Funds shall be deposited into Escrow by Buyer as
follows, at least three days prior to Closing unless otherwise specified:
i. Prior to or simultaneously with the mutual
execution of this Agreement by Buyer and Sellers, One Hundred Thousand and
00/100 Dollars ($100,000.00) will be delivered to the Escrow Holder by Buyer for
deposit in the Escrow;
ii. Two Million Two Hundred Twenty-Five Thousand and
00/100 Dollars ($2,225,000.00) shall be deposited by Buyer into Escrow at least
two (2) days prior to the expiration of the thirty (30) day posting period
required by the ABC, or the date this Agreement is executed if execution occurs
after that date;
iii. Fifty Thousand and 00/100 Dollars ($50,000.00),
representing the portion of the brokerage fee payable by Buyer to Jerry Ackrich
in connection with the sale of the Restaurants, shall be deposited into Escrow
by Buyer at least one (1) business day prior to Closing;
iv. Seventy-Five Thousand and 00/100 Dollars
($75,000.00), representing the dollar amount of the Security Deposits made by
Sellers under the Restaurant Leases, shall be deposited into Escrow by Buyer at
least one (1) business day prior to Closing;
v. Thirty-Five Thousand and 00/100 Dollars
($35,000.00), representing the dollar amount of additional security deposits
payable at Closing to the landlord pursuant to the terms of the Woodland Hills
Lease (the "Additional Security Deposits"), shall be deposited into Escrow by
Buyer at least one (1) business day prior to Closing; and
vi. The amount of estimated sales tax liability
("Sales Tax Liability") arising from the amount allocated from the Purchase
Price to items requiring the payment of sales tax ("Sales Tax Escrow Amount")
shall be deposited into Escrow by Buyer at least one (1) business day prior to
Closing.
b. Payments at Closing. Subject to satisfaction of the
conditions to closing set forth in Section 10 of this Agreement and the
requirements of Section 24074 of the California Business and Professions Code,
the following payments shall be made at Closing:
i. Two Million Two Hundred Thousand and 00/100
Dollars ($2,200,000.00) shall be paid to Sellers out of Escrow by check or wire
transfer; absent receipt by the Escrow Holder and Buyer of written instructions
of the Sellers to the contrary the entire amount of such payment shall be made
to Solley's to be allocated among Zide and Solley's as such parties may agree;
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ii. Seventy-Five Thousand and 00/100 ($75,000.00),
representing the dollar amount of the Security Deposits made by Sellers under
the Restaurant Leases, shall be paid to Sellers out of Escrow by check or wire
transfer; absent receipt by the Escrow Holder and Buyer of written instructions
of the Sellers to the contrary the entire amount of such payment shall be made
to Solley's to be allocated among Zide and Solley's as such parties may agree;
iii. One Hundred Thousand and 00/100 Dollars
($100,000.00), representing Buyer's and Sellers' combined portions of the broker
fee payable to Jerry Ackrich in connection with the transactions contemplated by
this Agreement, shall be paid to Jerry Ackrich out of Escrow by check or wire
transfer;
iv. Thirty-Five Thousand and 00/100 Dollars
($35,000.00), representing the Additional Security Deposits, shall be paid to
Plaza International, the landlord under the Woodland Hills Lease, out of Escrow
by check or wire transfer; and
v. At or prior to the Closing, each party shall pay
to the Escrow Holder one-half of all Escrow costs and expenses of Escrow Holder
relating to establishment of Escrow which costs and expenses are expected to
total $4,650.00.
c. Payments after Closing. The Sales Tax Escrow Amount shall
be released to either of Sellers upon proof of payment of the Sales Tax
Liability or sooner, but if sooner only in the form of a check payable only to
the State Board of Equalization.
3. Holdback. Notwithstanding anything to the contrary contained in Section 2 of
this Agreement, Seventy-Five Thousand and 00/100 Dollars ($75,000.00) of the
Purchase Price shall remain in Escrow for a period of sixty (60) days following
the Closing Date (the "Holdback Period"), in order to provide funds for any
prorations or adjustments pursuant to Section 11 of this Agreement as well as
the payment of any accrued but unpaid taxes or any other liabilities incurred or
charged to Buyer but arising out of events or actions taken prior to the Closing
Date. In the event that any proration or adjustment is required or Buyer incurs
any such liability prior to the expiration of the Holdback Period, Buyer shall
deliver written notice (the "Holdback Claim") to the Escrow Holder and Sellers
of the amount and nature of such adjustment or liability and supporting
documentation, if any. Ten (10) days after receipt of the Holdback Claim, if no
objection has been received by Escrow Holder from Sellers, Escrow Holder shall
release funds to Buyer from Escrow equal to the lesser of (i) the amount of the
Holdback Claim, or (ii) the amount of funds remaining in Escrow; provided,
however, that Escrow Holder may make the release of such funds contingent upon
receipt by Escrow Holder of an agreement by Buyer to indemnify Escrow Holder
from and against any liabilities, costs or expenses (including reasonable
attorneys fees and costs) resulting from the release of such funds to Buyer. If
Sellers shall deliver notice that they dispute the claim, Escrow Holder shall
hold said sums until Escrow Holder receives a final written notice of
determination of arbitrator(s), a final judgement of a court or directions
executed by both Buyer and Sellers as to the disbursement of such funds. Any
dispute among Buyer and Sellers regarding the
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amount of the Holdback Claim shall be resolved by binding arbitration in
accordance with Section 22 d. of this Agreement. Upon expiration of the Holdback
Period, any remaining portion of the Purchase Price held in Escrow will be
released to Sellers.
4. Deliveries At Closing.
a. Deliveries by Sellers. At the Closing, Sellers shall
deliver into Escrow the following original documents, duly executed by each
Seller that is a party to such document:
i. The Bill of Sale;
ii. The Landlord Consents, duly executed by each
landlord and, if applicable, Sellers;
iii. The Assignment of Intangible Property;
iv. Certificates of title, registration papers, bills
of sales and any other documents that may be required by the Department of Motor
Vehicles in order to effect the transfer of title to Buyer of any motor vehicles
included in the Assets;
v. Such resolutions, authorizations, certificates of
good standing and/or other corporate or partnership documents relating to Zide
and Solley's and its shareholders, officers and/or directors as are reasonably
required by Buyer in connection with the transactions contemplated under this
Agreement; and
vi. Such further instruments of sale, transfer,
conveyance, assignment or delivery covering the Assets or any part thereof as
Buyer may reasonably require to assure the full and effective sale, transfer,
conveyance, assignment or delivery to it of the Assets to be transferred to
Buyer under this Agreement.
b. Deliveries by Buyer. At the Closing, Buyer shall deliver
into Escrow the following original documents, duly executed by Buyer:
i. The Landlord Consents, duly executed by Buyer, to
the extent that Buyer is a party thereto; and
ii. Such resolutions, authorizations, certificates of
good standing and/or other corporate documents relating to Buyer as are
reasonably required by Sellers in connection with the transactions contemplated
under this Agreement.
c. By Buyer and Sellers. Buyer and Sellers will each deposit
such other instruments consistent with this Agreement as are reasonably required
to effectuate the transactions contemplated under this Agreement.
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5. Representations and Warranties of Sellers. Sellers jointly
and severally represent and warrant to Buyer that:
a. Organized and Good Standing. Solley's is a corporation duly
organized, validly existing and in good standing under the laws of the State of
California with full power to consummate the transactions contemplated herein.
b. Authorization of Agreement. Each Seller has full legal
right, power and authority to enter into this Agreement and to consummate the
transactions contemplated hereby. This Agreement and all other agreements and
instruments to be executed by either Seller in connection herewith have been (or
upon execution will have been) duly executed and delivered by such Seller, have
been effectively authorized by all necessary action, corporate or otherwise, and
constitute (or upon execution will constitute) legal, valid and binding
obligations of such Seller.
c. Ownership of Assets. Sellers, or either of them, is the
lawful owner of and has the right to use and transfer to Buyer each of the
Assets. Each of the Assets is owned by Sellers, or either one of them, free and
clear of any and all liens, encumbrances, pledges, security interests, or claims
of any kind or nature whatsoever other than those specifically disclosed in
Schedule 5(c) of this Agreement. The delivery to Buyer of the instruments of
transfer of ownership specifically contemplated by this Agreement will vest good
and marketable title to the Assets in Buyer, free and clear of all liens,
mortgages, pledges, security interests, restrictions, prior assignments,
encumbrances and claims of any kind or nature whatsoever, except for any of the
foregoing as may be specifically assumed by Buyer in accordance with the terms
of this Agreement.
d. Absence of Certain Changes. There is no event or condition
of any character which would adversely affect the ability or right of Buyer to
own and operate a restaurant on the sites where the Restaurants are currently
operating.
e. Restaurant Lease. Sellers, or either of them, are the
holders of all leasehold estates purported to be granted by the Restaurant
Leases. Each of the Restaurant Leases is in full force and effect and
constitutes a legal, valid and binding obligation of each of the parties
thereto, enforceable in accordance with its terms and grant the leasehold
estates they purport to grant free and clear of all mortgages, liens or other
encumbrances whatsoever. There are no existing or claimed defaults under the
Restaurant Leases and there are no events which with notice or lapse of time or
both would constitute such an event of default thereunder or would cause the
acceleration of any obligation of any party thereto or the creation of a lien or
encumbrance on any of the Assets. All structures, improvements and fixtures on
the premises leased pursuant to the Restaurant Leases are in good operating
condition and repair and conform to any and all applicable state and local laws,
zoning, building, health and safety laws and/or ordinances. No notice from any
governmental body has been served upon Sellers, or either of them, claiming any
violation of any law or ordinance, or requiring any substantial
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or material work, repairs, construction, alterations or installation on or in
connection with the premises that are the subject of the Restaurant Leases
(including any notices regarding earthquake retrofitting).
f. No Conflicts. Neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby will (i)
conflict with or result in a violation of any provision of the Articles of
Incorporation or Bylaws of Solley's, (ii) constitute or result in a breach of,
or a default (or give rise to any rights to acquire any Assets of Sellers)
under, any term or provision of any contract, agreement, indebtedness, lease,
commitment, license, sublicense, franchise, permit, authorization or concession
to which either Seller is a party or by which any of the Assets of such Seller
are bound, (iii) constitute or result in a violation by either Seller of any
statute, rule, regulation, ordinance, code, order, judgment, writ, injunction,
decree or award, or (iv) result in an imposition of any encumbrance, restriction
or charge on any of the Assets.
g. Operating Condition. The tangible Assets are, to the best
knowledge of Sellers, in good operating condition and repair except for
reasonable wear and tear which is not such as to adversely affect the operation
of either Restaurant. Exhibit "D" of this Agreement constitutes and, as of the
Closing Date, will constitute, a complete and accurate list of all equipment
(other than the Excluded Assets) owned or used by Sellers in the operation of
the Restaurants as of the date of this Agreement and as of the Closing Date.
h. Compliance with Laws. Sellers hold valid and effective
certificates of occupancy, zoning, building, safety, fire and health approvals
and all other permits and licenses required by applicable law relating to the
operation of the Restaurants. Neither Seller has violated, and on the Closing
Date will not be in violation of, in any material respect, any federal, state,
local or foreign laws, regulations or orders (including, but not limited to, any
of the foregoing relating to employment discrimination, occupational safety,
environmental protection, conservation, or corrupt practices), relating to the
operation of Restaurants or the ownership or operation of the Assets and neither
Seller has received any notice of any such violation.
i. Labor and Employment Matters. Sellers will terminate all
employees of the Restaurants prior to or as of the Closing Date and comply in
all respects with all applicable laws, rules and regulations with respect
thereto including, but not limited to, filing any notices and paying all accrued
but unpaid periodic compensation, vacation pay, sick pay and other employee
benefits due and owing to such employees as of the Closing Date. There is no
collective bargaining agreement or other labor agreement to which either Seller
is a party or by which it is bound.
j. Litigation. Except as specifically set forth in Schedule
5(j) attached hereto, there are no claims, disputes, actions, proceedings or
investigations of any nature pending or, to the best knowledge of Sellers,
threatened against or involving either Seller, or the Restaurants or any of the
officers, directors, partners or employees of either Seller in
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connection with or arising out of the business conducted by the Sellers or the
transactions contemplated by this Agreement. None of the items listed in
Schedule 5(j) will (i) result in any claim against or liability of Buyer, or
(ii) have a material adverse effect on the business, results of operations or
financial condition of either Restaurant.
k. Taxes. Sellers have complied in all respects with all
applicable laws, rules and regulations relating to the payment and withholding
of taxes and other sums as required by appropriate governmental authorities and
has withheld and paid to the appropriate governmental authorities or is holding
for payment not yet due to such authorities, all amounts required to be withheld
from such employees of the Sellers for all periods through the Closing Date and
is not liable for any arrears of wages, taxes, penalties or other sums for
failure to comply with any of the foregoing. Sellers have filed with the
appropriate governmental agencies all required all income, sales and use,
employment and payroll, meal, franchise and other tax returns and tax reports
with respect to the Assets and the operation of the Restaurants. Sellers have
not executed any waiver(s) which would have the effect of extending any
applicable statute of limitations in respect of its tax liabilities. Sellers
have paid all sales taxes, assessments, fees, and other government charges
levied upon its assets and income or otherwise relating or attributable to the
Assets for all periods prior to the Closing Date. Neither Seller has knowledge
of any unassessed tax deficiency that has been proposed or threatened against
either of them by any taxing authority. No audits of any tax return are in
progress, and there are not in force any agreements by either Seller for the
extension of time for the assessment or payment of any tax.
l. Regulatory Approvals. The Licenses and Permits constitute
all approvals, authorizations, consents, licenses, orders and permits of all
governmental agencies, whether federal, state or local, related to the operation
of Restaurants, the absence of which would materially and adversely affect the
Assets or Buyer's use or operation thereof in the manner in which such assets
are being used or operated as of the date of this Agreement, and no
circumstances exist which could prevent or interfere with the transfer of the
Licenses and Permits to Buyer in connection with the transactions contemplated
hereunder. Sellers have, at all times during which they have operated the
Restaurants, or either of them, possessed all approvals, authorizations,
consents, licenses, orders and permits necessary to operate the Restaurants in
compliance with applicable state, federal or other laws or regulations.
m. Insolvency. There are no attachments, execution
proceedings, assignments for the benefit of creditors, insolvency, bankruptcy,
reorganization or other proceedings pending or threatened against either Seller,
nor are any such proceedings contemplated by either Seller, nor will either
Seller voluntarily file or permit a third party to file against either Seller
any petition seeking protection under applicable bankruptcy laws.
n. No Undisclosed Liabilities. Other than obligations arising
after Closing under the Restaurant Leases, Sellers have no liabilities or
obligations of any nature, whether absolute, accrued, contingent or otherwise,
and whether due or to become due (including, without limitation, any liability
for taxes and interest, penalties and other charges payable with
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respect to any such liability or obligation) which would affect Buyer or the
Assets or become the obligation of Buyer after the Closing.
o. Insurance. Sellers maintain insurance policies, including,
without limitation, general liability, property and personal liability
insurance, which insure the Sellers, their employees and such other persons to
whom such entities may become liable against such losses and risks generally
insured against by comparable businesses (collectively, the "Insurance
Policies").
p. Intangible Property. To the best of Sellers' knowledge,
Sellers own all trademarks, trade names, service marks, service names and
copyrights which, individually or in the aggregate, used in connection with the
operation of the Restaurant (the collectively, the "Tradenames"). No such
Tradenames are in dispute or are in conflict with any right of any other person
or entity.
q. Other Information. All information provided and to be
provided by Sellers to Buyer in this Agreement or pursuant to the terms thereof
or in any other writing pursuant hereto does not and will not contain any untrue
statement of a material fact or omits or will omit to state a material fact
required to be stated herein or therein or necessary to make the statements and
facts contained herein or therein, in light of the circumstances in which they
are made, not false or misleading. Copies of all documents heretofore or
hereafter delivered or made available to Buyer pursuant hereto were or will be
complete and accurate records of such documents.
Each Seller's representations and warranties set forth in this
Section 7 shall be true and correct as of the date hereof and the Closing Date
and shall survive the Closing.
6. Representations and Warranties of Buyer. Buyer represents
and warrants to Sellers that:
a. Organization and Authority. Buyer is duly organized,
validly existing and in good standing under the laws of the State of California
and has all requisite power and authority to enter into this Agreement and to
consummate the transactions contemplated hereby. This Agreement and all other
agreements herein contemplated to be executed in connection herewith have been
(or upon execution will have been) duly executed and delivered by Buyer, have
been effectively authorized by all necessary action, and constitute (or upon
execution will constitute) legal, valid and binding obligations of Buyer.
b. Agreement Not in Breach of Other Instruments. The execution
and delivery of this Agreement, the consummation of the transactions
contemplated hereby and the fulfillment of the terms hereof will not result in a
breach of any of the terms or provisions of, or constitute a default under, or
conflict with, any material agreement, indenture or other instrument to which
Buyer is a party or by which it is bound, any judgment, decree, order or award
of any court, governmental body or arbitrator, or any law, rule or regulation
applicable
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to Buyer, except where such default or conflict would not have a material
adverse effect on Seller or Buyer's ability to effect the transactions
contemplated hereby.
Each of Buyer's representation and warranties set forth above
shall be true and correct as of the date hereof and the Closing Date and shall
survive the Closing.
7. Sellers' Covenants.
a. Operation Of Restaurant. Sellers shall operate the
Restaurants substantially in accordance with prior practice and in the ordinary
course of business, and, without limiting the generality of the foregoing,
Sellers shall not (except with the prior written consent of Buyer): (i) enter
into any transaction which would affect Buyer or the Assets after the Closing
Date; (ii) sell or transfer any of the Assets, (iii) mortgage, pledge, or
encumber any of the Assets; (iv) amend, modify, or terminate any material
contract affecting the Restaurants; or (v) amend, modify or terminate in any
respect any Restaurant Lease or any Landlord Consent. Buyer acknowledges that
prior practice does not include wholesale baking for third parties which has
already been terminated.
b. Bulk Sales Notice and Tax Clearance Certificates. Sellers
have (or will, immediately upon the execution of this Agreement) prepared, filed
and published all documents and paid all fees and other amounts necessary to (i)
comply with and to afford Buyer with all protection available under all laws
applicable to the filing of bulk sale notices, and (ii) transfer the Liquor
Licenses to Buyer. Escrow Holder is hereby authorized and instructed, at the
Sellers' expense, to record and publish the bulk sale notices contemplated
herein. If and when Sellers receive the Tax Clearance Certificates, Sellers
shall deliver copies to Buyer as soon as possible. Sellers shall also deliver
copies of the most recent pre-Closing and post-Closing sales tax return filings
to Buyer as soon as they are available.
c. Termination of Employees. Sellers will terminate all
employees of the Restaurants prior to or as of the Closing Date and comply in
all respects with all applicable laws, rules and regulations with respect
thereto including, but not limited to, filing any notices and paying all accrued
but unpaid periodic compensation, vacation pay, sick pay and other employee
benefits due and owing to such employees. Sellers shall pay and shall indemnify
Buyer against any and all costs or expenses arising out of the termination of
such employees by Sellers. Buyer shall have no obligation to hire or otherwise
employ any current employees of either Seller.
d. Termination of all Service Contracts. Sellers will
terminate all Service Contracts prior to or as of the Closing Date and comply in
all respects with all applicable contractual provisions with respect thereto
including, but not limited to, paying all unpaid amounts thereunder.
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e. Sellers' Execution, Delivery and Performance. Sellers will,
both before and after the Closing Date, execute all documents and take all steps
deemed necessary or desirable by Buyer to give effect to the terms and
conditions of this Agreement.
f. Cooperation With Representatives. Sellers shall cooperate
with Buyer and its accountants, counsel and/or other representatives in
providing information and materials pertaining to the operation of the Assets,
including access to the Assets. Without limiting the generality of the
foregoing, from and after the execution and delivery of this Agreement, Sellers
shall allow a representative or representatives of Buyer access to the Assets
for the purpose of (i) inspecting the Assets, (ii) meeting with and interviewing
employees of the Restaurants, which employees shall be made available for such
interviewing process, and (iii) performing such other due diligence as Buyer may
reasonably require. In addition, Sellers shall permit a representative or
employee of Buyer to (i) remain on-site at each of the Restaurants in order to
observe the operations and business of each Restaurant, and (ii) to have access
to the Restaurants at reasonable times after normal business hours in order to
conduct inspections and to facilitate the preparation of architectural or other
plans, applications or specifications by Buyer or its representatives.
g. Cooperation in Audit and Permitting. Both prior to and
after the Closing Date, Sellers shall fully cooperate with Buyer and its
representatives, agents, attorneys and accountants in connection with (i) the
performance and completion of any audits, in form and substance to be determined
by Buyer, in its sole discretion, of the financial statements for the
Restaurants, and (ii) the application and prosecution of any permit
applications, including any construction, zoning or other permits deemed by
Buyer to be necessary or appropriate for its operation of the Restaurants as
"Solley's" or "Jerry's Famous Deli" restaurants, and all remodeling and/or
redesign of the Restaurants as deemed by Buyer to be necessary or appropriate.
Nothing herein shall be deemed to be a guaranty by either Sellers that Buyer
will be successful in obtaining any such permits subsequent to the date of this
Agreement. Requirements pursuant to this subparagraph post closing requiring
cooperation of third party professionals shall be at the expense of Buyer.
h. Insurance. Sellers shall maintain in full force and effect
all Insurance Policies through and including the Closing Date.
i. Maintenance of Assets. Sellers shall maintain the Assets in
sub- stantially their current state of repair, excepting normal wear and tear.
j. Payment of Rent Under Restaurant Leases. Subject to the
terms and conditions of this Agreement, Sellers shall pay all rental and other
payments required to be paid under the Restaurant Leases through the Closing
Date.
k. Access to Books and Records. Both prior and subsequent to
the Closing Date, Sellers, upon the reasonable request of Buyer, shall grant
Buyer access to all Books and Records in Sellers' possession. Sellers agree that
for a period of one year following the
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Closing Date, Sellers will provide Buyer copies of all Books and Records
reasonably requested by Buyer at cost based on copy center prices.
8. Buyer's Covenants. Notwithstanding anything to the contrary
contained in the Woodland Hills Lease or any Landlord Consent, Buyer shall not
transfer or assign the Woodland Hills Lease subsequent to the Closing Date
without the prior consent of Zide, which consent shall not be unreasonably
withheld; provided, however, no consent of Zide shall be required in connection
with the transfer or assignment of the Woodland Hills Lease to any person or
entity having a net worth in excess of $12,000,000 as verified by audit by an
independent accounting firm (with no cost of audit borne by Sellers).
9. Indemnification.
a. Indemnification by Sellers. Each Seller will jointly and
severally defend, indemnify and hold the Buyer, its officers, directors, agents,
shareholders, representatives, employees, attorneys, accountants, affiliates,
beneficiaries, subsidiaries, successors and assigns (collectively, the "Buyer
Indemnitees") harmless from and against:
i. Any and all claims, demands, liabilities, liens,
costs, expenses, penalties, damages and losses (including, but not limited to,
attorneys' fees and costs) of every kind and nature incurred or accrued prior to
the Closing Date with respect to the Assets, whether arising from acts or
omissions of such Seller, its agents or employees or otherwise including, but
not limited to, all liabilities and obligations for which either Seller would
have been, or will be, liable had Seller not transferred the Assets to Buyer
pursuant to this Agreement (which shall include, but not be limited to, all
liabilities, obligations, claims (including, without limitation, statutory and
contractual claims), damages and expenses resulting from or in any way related
to the Seller's acts or omissions with respect to the operation of the Assets,
as well as any infringement action arising before or after the Closing Date
which relates to Sellers' or Buyer's use of the Tradenames);
ii. Any and all liabilities and obligations arising
from any breach of the warranties, representations, covenants and agreements of
either Seller or their respective agents contained in this Agreement or in any
agreements between either Seller and any third parties relating to the Assets or
the Restaurant Leases;
iii. Any and all liabilities and obligations arising
before or after the Closing Date as a result of either Seller's failure to pay
all taxes, assessments, fees and other government charges levied upon either
Seller's assets and income or otherwise relating or attributable to the Assets
or the operations conducted thereon; and
iv. The failure of Buyer to obtain the protections
afforded by compliance with the notification requirements of the Bulk Sales Laws
in force in the jurisdictions in which such laws may be applicable to either
Seller or the transactions contemplated by this Agreement.
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b. Indemnification by Buyer. Buyer will defend, indemnify and
hold the Sellers, their respective officers, directors, agents, shareholders,
representatives, employees, attorneys, accountants, affiliates, beneficiaries,
subsidiaries, successors and assigns (collectively, the "Seller Indemnitees")
harmless from and against:
i. Any and all claims, demands, liabilities, liens,
costs, expenses, penalties, damages and losses (including, but not limited to,
attorneys' fees and costs) of every kind and nature incurred or accrued
subsequent to the Closing Date with respect to Buyer's ownership or operation of
the Assets, whether arising from acts or omissions of Buyer, its agents or
employees or otherwise, including from any additional sales tax arising from a
re-allocation of the Purchase Price subsequent to closing of this transaction,
other than infringement actions arising after the Closing Date which relates to
Sellers' or Buyer's use of the Tradenames); and
ii. Any and all liabilities and obligations arising
from any breach of the warranties, representations, covenants and agreements of
Buyer or its agents contained in this Agreement or in any agreements between
Buyer and any third parties relating to the Assets.
c. Survival of Provisions. The indemnifications by Sellers and
Buyer set forth in this Section 9 shall survive the Closing.
10. Conditions to Closing.
a. Conditions to Obligations of Buyer. The obligations of
Buyer to consummate the transactions contemplated hereby shall be, at the option
of Buyer, subject to the fulfillment, at or prior to the Closing Date (or such
earlier date if so specified below), of the following additional conditions:
i. Representations and Warranties True. The
representations and warranties of Sellers contained in this Agreement or in any
other document of Sellers delivered pursuant hereto shall be true and correct in
all material respects on the Closing Date. Sellers shall deliver at Closing a
certificate of each of them certifying that such representations and warranties
are true and correct in all material respects as of the Closing Date.
ii. Sellers' Performance. Each of the obligations of
Sellers to be performed by either of them on or before the Closing Date pursuant
to the terms of this Agreement shall have been duly performed in all respects on
or before the Closing Date and Sellers shall deliver at Closing a certificate of
each of them certifying that such obligations have been duly performed in all
respects.
iii. Personal Property Liens. Buyer has received a
certificate from the Secretary of the State of California indicating that, as of
the Closing Date, there are no
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filings against either Seller in the office of the Secretary of the State of
California under the Commercial Code which would be a lien on any of the FF&E or
Personal Property.
iv. Authority. All actions required to be taken by,
or on the part of, Sellers to authorize the execution, delivery and performance
of this Agreement and the consummation of the transactions contemplated hereby
shall have been duly and validly taken by each Sellers and/or the shareholders,
officers and directors of any Seller.
v. Additional Closing Documents of Sellers. Sellers
shall have delivered all of the items to be delivered by Sellers pursuant to
this Agreement.
vi. Transfer of Liquor Licenses. The ABC shall have
approved the transfer of the Liquor Licenses to Buyer.
vii. No Adverse Changes. Between the date of this
Agreement and the Closing Date there shall not have occurred any material
change, disappearance, damage, destruction, or loss of any of the Assets,
whether or not covered by insurance, nor shall there have occurred any other
event or condition which has had or which reasonably may be expected to have a
material and adverse effect on the Assets or the financial condition of the
Restaurants.
viii. Receipt of Consents. Sellers and Buyer shall
have obtained all material landlord, ground lessor, governmental or other
third-party consents reasonably necessary to effectuate the transactions
contemplated by this Agreement, including, without limitation, the receipt and
continuing effectiveness of the Landlord Consents.
ix. Approval of Construction and Signage Plans. Each
landlord (and, to the extent required, ground lessor) under the Restaurant
Leases shall have approved construction and signage plans submitted for approval
by Buyer at a reasonable time prior to the Closing Date, only to the extent that
such approvals are required pursuant to the terms of the Restaurant Leases
and/or the Landlord Consents.
x. Completion of Audit. Buyer's independent public
accountants shall have completed an audit of the financial statements for the
Restaurants for the year 1995, in a form and substance satisfactory to Buyer.
xi. Non-Disturbance Agreements. Delivery to Buyer of
non- disturbance agreements, to the extent reasonable requested by Buyer, by
each ground lessor or lender or other person who has a security interest in the
premises on which the Restaurants are located or operate or the property on
which all or any portion of such premises are located.
xii. Licenses and Permits. All Licenses and Permits
reasonably required by Buyer to operate the Restaurants consistent with prior
use, including the Liquor Licenses, shall be in place and transferable to Buyer
by Sellers on the Closing Date.
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xiii. Board of Directors Approval. The Board of
Directors of Buyer shall have approved the transactions contemplated by this
Agreement.
xiv. Parking at Woodland Hills Restaurant. Buyer
shall have received evidence satisfactory to Buyer that the parking for the
shopping center of which the Woodland Hills Restaurant is a part is adequate to
accommodate the additional restaurant square footage resulting from the use of
the Additional Premises and the Spaces (as defined in the Woodland Hills
Consent, dated April 4, 1996, between Zide and Plaza International) as a
restaurant and that the operation of a restaurant on the Additional Premises
will comply with all governmental and regulatory laws, rules, regulations,
covenants and other restrictions pertaining to parking.
xv. Extension of Option. The Woodland Hills Consent,
dated April 4, 1996, between Plaza International and Zide, shall be amended by
Plaza International and Zide to extend the option to lease the Additional
Premises until June 30, 1996.
b. Conditions to Obligations of Sellers. The obligation of
Sellers to consummate the transactions contemplated hereby shall be, at the
option of Sellers, subject to the fulfillment, at or prior to the Closing Date,
of the following additional conditions:
i. Representations and Warranties True. The
representations and warranties of Buyer contained in this Agreement or in any
document delivered pursuant hereto shall be true and correct in all material
respects on the Closing Date with the same effect as if made on the Closing
Date.
ii. Performance of Covenants. Each of the obligations
of Buyer to be performed on or before the Closing Date pursuant to the terms of
this Agreement shall have been duly performed on or before the Closing Date and
Buyer shall deliver at Closing a certificate certifying that such obligations
have been duly performed in all respects.
iii. Authority. All actions required to be taken by,
or on the part of, Buyer to authorize the execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated hereby
shall have been duly and validly taken by the shareholders, officers and/or
directors of Buyer, as applicable.
iv. Deliveries. Buyer shall have delivered the items,
required to be delivered by Buyer pursuant to this Agreement.
c. Failure of Conditions. In the event any of the foregoing
conditions to either party's obligation to close the transactions contemplated
hereunder are not satisfied by the dates set forth herein with respect thereto,
the party in whose favor such condition was set forth shall have, in addition to
any other right set forth in this Agreement, the right to waive such condition
in which case the parties shall proceed to the Closing or terminate this
Agreement by written notice to the other party and Escrow Holder in which case
this
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Agreement shall be deemed terminated as of the effective date of such notice and
Escrow Holder shall return all amounts and documents in its possession to the
party who had deposited such items with Escrow Holder.
11. Prorations and Adjustments. Buyer is acquiring all of Sellers' right, title
and interest in and to the Assets as of the Closing Date free and clear of all
obligations, liabilities, claims, debts liens or encumbrances and, accordingly,
there shall be no prorations between the parties except as follows:
a. Utilities. Utility meters will be read, to the extent that
the utility company will do so, during the daylight hours on the Closing Date,
with charges to that time paid by Sellers and charges thereafter paid by Buyer.
All utility deposits made by Sellers shall be returned to Sellers.
b. Taxes. Real estate and personal property taxes with respect
to the Assets to be conveyed to Buyer pursuant hereto shall be prorated through
the Closing Date; however, such taxes shall be adjusted between the parties
hereto from time to time after the Closing Date when such amounts become fixed,
if the amounts calculated on the Closing Date with respect thereto differ from
such fixed amounts.
c. Lease Obligations. Sellers' share of rental payments,
maintenance, real property taxes, and insurance relating to the common areas of
the property on which the Restaurant is located (if any) payable by Seller
pursuant to the terms of the Restaurant Leases, shall be prorated through the
Closing Date.
d. Method and Payment of Proration. All prorations will be
made as of the Closing Date based on a 360-day year and 30 day month and, unless
paid from escrow, shall be paid at Closing or as soon thereafter as calculable.
e. Inventory. Buyer and Seller have prepared an inventory of
the FF&E and Personal Property included in the Assets which is attached hereto
as Exhibit "D." On the Closing Date, Buyer and Seller shall perform a new
inventory thereof. To the extent any of the items of the FF&E and/or Personal
Property specified in the original inventory are not set forth in the new
inventory (and such disappearance is not due to any act of omission of Buyer or
any of its affiliates or agents), the Purchase Price shall be adjusted to
reflect the reduction of FF&E and Personal Property set forth in the new
inventory. For purposes of calculating such adjustments, the parties shall
assign values to the FF&E and Personal Property equal to the actual cost (less
depreciation) of such items, or if such actual cost/depreciation data is not
available, then the value shall be based on the parties good faith estimate of
the current fair market value of the particular item(s) of the FF&E and/or
Personal Property.
Notwithstanding anything to the contrary contained herein or otherwise, Buyer
shall have no liability for and shall not be deemed to have assumed any of
Sellers' unpaid expenses or
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accounts payable or other obligations or liabilities under any Service Contracts
or otherwise with respect to the operation of the Restaurant at any time prior
to the Closing Date.
f. Security Deposits. All of each Seller's right, title and
interest in and to the Security Deposits shall be transferred and assigned to
Buyer simultaneously with the Closing. Each Seller agrees that he or it will not
request any refund of all or any portion of such Security Deposits and that any
Sellers shall immediately transfer and deliver to Buyer any Security Deposit (or
portion thereof) returned to either Seller by the landlords under the Restaurant
Leases.
12. Costs and Expenses. The closing costs shall be allocated as
follows:
a. Sales and Transfer Taxes. Buyer shall pay any state and
county sales or transfer taxes resulting from the sale of the Assets to Buyer
pursuant to the terms of this Agreement.
b. Lease Transfer Fees. Except as specifically provided in the
Landlord Consents, any transfer fees imposed under the Restaurant Leases in
connection with the assignment of the Restaurant Leases to Buyer shall be paid
by Sellers out of Escrow on or prior to the Closing Date.
c. Other Closing Costs. Buyer and Sellers will each pay their
own legal and professional fees and fees of other consultants incurred by Buyer
and Sellers, respectively. All other Closing costs and expenses, including any
Escrow fees or costs, will be allocated one-half to Buyer and one-half to
Sellers.
13. Risk of Loss. Until and including the Closing Date, all risk
of loss or damage to the Assets shall be borne by Sellers, and thereafter shall
be borne by Buyer. If any portion of the Assets whatsoever is destroyed or
damaged by fire, flood, earthquake, vandalism or any other cause prior to the
Closing Date, Sellers shall promptly give notice to Buyer of such damage or
destruction and the amount of insurance, if any, covering said Assets. Prior to
the Closing Date, Buyer shall have the option, which shall be exercised by
written notice to Sellers within ten (10) days after receipt of Sellers' notice
or if there is not ten (10) days prior to the Closing Date, as soon as possible
but not less than 24 hours prior to the Closing Date, of (a) accepting the
Assets in their destroyed or damaged condition, in which event any insurance
proceeds payable to Sellers with respect to the damaged property shall be
assigned to Buyer, and the Purchase Price payable by Buyer for the Assets shall
be paid in accordance with Section 2 of this Agreement, or (b) terminating this
Agreement.
14. Closing and Possession. Simultaneously with the Closing,
Sellers shall deliver possession and enjoyment of the Assets to Buyer and Buyer
shall thereupon have the immediate right to possess, develop, use, sell,
encumber and/or transfer the Assets, or any part thereof for its own account to
the total exclusion of Sellers.
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15. Cooperation in Litigation. Each party hereto will fully cooperate with the
other in the defense or prosecution of any litigation or proceeding already
instituted or which may be instituted hereafter against or by such party
relating to or arising out of the Assets or the operation of the Restaurants
prior to or after the Closing Date (other than litigation between the parties
arising out of the transactions contemplated by this Agreement).
16. Covenant Not to Compete; Non Solicitation.
a. Definitions. For the purposes of this Section 16, the
following terms shall have the meanings ascribed to them below:
i. "Covenant Term" shall mean a period beginning on
the date hereof and ending five (5) years from the date hereof.
ii. "Covenant Territory" shall mean the territories
located within three (3) miles of any current "Jerry's Famous Deli" or
"Solley's" restaurant location (including the "Jerry's Famous Deli" locations
proposed or scheduled to be opened in Westwood (Los Angeles), California and,
Las Vegas, Nevada).
b. Non-Compete. During the Covenant Term, Zide covenants and
agrees that he (i) shall not own, operate, manage or consult to any delicatessen
or delicatessen-style restaurant or delicatessen-style restaurant chain having
one or more locations in California or Las Vegas, Nevada, and (ii) shall not
own, operate, manage or consult to any bagel restaurant or bagel restaurant
chain located in the Covenant Territory.
c. Non-Solicitation. Zide agrees that during the Covenant Term
he will not, directly or indirectly, induce or encourage any employee to
terminate his or her relationship with Buyer or the Restaurants. In addition,
Zide agrees that, during the Covenant Term he will not, directly or indirectly,
employ or attempt to employ any employees of the Restaurants as of the date of
this Agreement or Buyer's employees.
d. Limitations on Scope. If any provision of this Section 16,
as applied to any party or to any circumstances, shall be adjudged by a court to
be invalid or unenforceable, the same shall in no way affect any other provision
of this Agreement, the application of such provision in any other circumstances,
or the validity or enforceability of this Agreement. If any provision of this
Section 16, or any part thereof, is held to be unenforceable, the provisions of
this Section 16 shall be modified so that the restrictions imposed hereby are no
greater than would otherwise be permissible under applicable law.
e. Separate Covenants. Zide and Buyer intend that the
covenants contained in this Section 16 be construed as a series of separate
covenants (with identical terms except geographic coverage) for each city,
county, state or province, as the case may be, specified herein. The parties
hereby confer jurisdiction to enforce such covenants upon the courts of any
state of the United States and any other governmental jurisdiction within the
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geographical scope of such covenants. If the courts of any one or more of such
states or jurisdictions shall hold such covenants unenforceable such
determination shall not bar or in any way affect Buyer's right to the relief
provided hereunder in the courts of any other state or jurisdiction within the
geographical scope of such covenants, as to breaches of such covenants in such
other respective states or jurisdictions.
17. Consulting Services of Zide. At the request of Buyer, Zide agrees to provide
consulting services to Buyer at Buyer's corporate offices, free of charge, for a
period of sixty (60) days following the Closing Date in order to assist Buyer in
the transition of ownership of the Restaurants. In addition, Zide agrees that
for a period of one (1) year following the Closing Date and upon the reasonable
request of Buyer, he will provide consulting services to Buyer at Buyer's
corporate offices in connection with the operation and management of Buyer's
restaurants (including the Restaurants) in exchange for compensation of $100 per
hour. The parties hereto agree that any consulting services rendered by Zide
will be rendered as an independent contractor and not as an employee, agent or
servant of Buyer, nor shall Zide be deemed, by reason of this Agreement or any
services to be performed by Zide, to be an employee of Buyer for purposes of
withholding, employee payroll taxes, contributions, pensions, benefits or
otherwise. It is further agreed and understood that Buyer will request such
services on reasonable notice and subject to Zide's other activities and
reasonable convenience, and shall accommodate any request by Zide to perform
such services by telephone or other mutually agreed upon manner unless personal
appearance by Zide is clearly and reasonably necessary.
18. Termination; Remedies.
a. Drop Dead Date. Notwithstanding anything to the contrary
contained in Section 18 b. or c. below, in the event that the Closing Date has
not occurred by June 30, 1996 and the failure to close by such date is not due
to any fault of the party seeking termination, any party hereto may terminate
this Agreement by delivery of written notice to the other parties and all funds
and documents held in Escrow shall be immediately returned by the Escrow Holder
to the parties who deposited such funds and/or documents in Escrow.
b. Buyer's Remedies Generally. IN THE EVENT THE CLOSING FAILS
TO OCCUR BECAUSE OF EITHER A FAILURE OF SATISFACTION OF ANY OF THE CONDITIONS IN
FAVOR OF BUYER SET FORTH IN THIS AGREEMENT, OR SELLERS' FAILURE TO PERFORM ANY
OF SELLERS' OBLIGATIONS UNDER THIS AGREEMENT, THEN BUYER SHALL HAVE THE RIGHT TO
TERMINATE THIS AGREEMENT UPON WRITTEN NOTICE TO SELLERS. UPON SUCH TERMINATION,
SELLERS SHALL IMMEDIATELY RETURN, OR CAUSE THE ESCROW HOLDER TO RETURN, TO BUYER
ANY AND ALL DOCUMENTS AND FUNDS THERETOFORE DEPOSITED OR PAID BY BUYER.
ALTERNATIVELY, NOTWITHSTANDING SUCH FAILURE OF CONDITION AND/OR SELLERS' BREACH,
BUYER MAY ELECT TO PROCEED WITH THE PURCHASE OF THE ASSETS, RESERVING THE RIGHT
TO COLLECT DAMAGES FROM SELLERS FOR ANY SUCH BREACH. WHETHER OR
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<PAGE> 23
NOT BUYER ELECTS TO TERMINATE THIS AGREEMENT OR TO PROCEED WITH THE PURCHASE OF
THE ASSETS AS HEREINABOVE PROVIDED FOR, BUYER SHALL RETAIN THE RIGHT TO EXERCISE
ANY AND ALL REMEDIES WHICH BUYER MAY HAVE AGAINST SELLERS, WHETHER AT LAW, IN
EQUITY OR PURSUANT TO THIS AGREEMENT, INCLUDING, BUT NOT LIMITED TO, THE RIGHT
TO COMPEL SPECIFIC PERFORMANCE BY SELLERS.
c. Sellers' Remedies. IF BUYER SHOULD TERMINATE THIS AGREEMENT
FOR REASONS OTHER THAN AS A RESULT OF EITHER (i) SELLERS' MATERIAL BREACH OR
DEFAULT UNDER THE TERMS OF THIS AGREEMENT, OR (ii) THE FAILURE OF SELLERS TO
SATISFY ANY OF THE CONDITIONS TO CLOSING CONTEMPLATED BY THIS AGREEMENT (EITHER
EVENT CONSTITUTING "CAUSE" FOR BUYER'S TERMINATION), THEN SELLERS, AS THEIR SOLE
AND EXCLUSIVE REMEDY, MAY TERMINATE THIS AGREEMENT BY NOTIFYING BUYER THEREOF
AND RECEIVE OR RETAIN ONE HALF OF THE DEPOSIT ($50,000) AS LIQUIDATED DAMAGES.
THE PARTIES AGREE THAT SELLERS WILL SUFFER DAMAGES IN THE EVENT OF BUYER'S
BREACH OF ITS OBLIGATIONS. ALTHOUGH THE AMOUNT OF SUCH DAMAGES IS DIFFICULT OR
IMPOSSIBLE TO DETERMINE, THE PARTIES AGREE THAT THE AMOUNT OF THE DEPOSIT IS A
REASONABLE ESTIMATE OF SELLERS' LOSSES IN THE EVENT OF BUYER'S TERMINATION OF
THIS AGREEMENT WITHOUT CAUSE. THUS, SELLERS SHALL ACCEPT AND RETAIN ONE HALF OF
THE DEPOSIT ($50,000) AS LIQUIDATED DAMAGES BUT NOT AS A PENALTY, WITH THE
REMAINING PORTION OF THE DEPOSIT BEING RETURNED TO BUYER. SUCH LIQUIDATED
DAMAGES SHALL CONSTITUTE SELLERS' SOLE AND EXCLUSIVE REMEDY.
SELLERS AND BUYER ACKNOWLEDGE THAT THEY HAVE READ AND
UNDERSTAND THE PROVISIONS OF THE FOREGOING PROVISION AND BY THEIR SIGNATURES
IMMEDIATELY BELOW AGREE TO BE BOUND BY ITS TERMS.
"SELLERS" "BUYER"
SOLLEY'S INC. JERRY'S FAMOUS DELI, INC.
By:_______________________________ By:_______________________________
Sol Zide Ike Starkman
__________________________________
SOL ZIDE
19. Confidentiality. The terms and provisions of this Agreement shall be kept in
complete confidence by Zide and Solley's, their affiliates, and each of their
respective directors, officers, employees and agents, and dissemination of the
terms and conditions of this Agreement and related
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<PAGE> 24
information shall only be made to those persons as absolutely necessary.
Solley's and Zide each acknowledges that it(he) is aware that Buyer is a public
company with listed securities and improper disclosure of the contents of this
Agreement or related information could have an adverse effect on Buyer and its
securities holders. In the event of a breach of this confidence, the Agreement
may be immediately terminated in the sole discretion of Buyer. Notwithstanding
anything to the contrary contained in this Agreement, Buyer shall have the
right, subject to the reasonable review of the content and method of disclosure
by Zide and Solley's, to make appropriate disclosure as a public corporation of
the existence and terms of this Agreement and the terms and conditions hereof;
provided, however, that any right of review by Zide or Solley's shall be subject
to the requirements of applicable federal or state securities laws and shall
terminate on the Closing Date.
20. Standstill. Neither Zide nor Solley's, nor any of their respective officers,
directors, affiliates, representatives or agents, will directly or indirectly
negotiate, cooperate in any manner with any other party, or agree to a sale of
any or all of the Assets or stock of Solley's or any other transaction which
would result in a change in control of Solley's or the Restaurants, or act in a
manner which could have the effect, directly or indirectly, of frustrating the
completion of the transactions contemplated by this Agreement, so long as Buyer
is proceeding in good faith toward the consummation of the transactions
contemplated herein (provided, however, that transfers among the existing
shareholders of Solley's or by existing shareholders of Solley's to trusts
established by them and for the benefit of them or their family for reasons of
estate or financial planning shall not be prohibited by this Section).
21. Escrow Instructions. The parties hereto do hereby enter into the Escrow with
Escrow Holder for the purpose of completing the transfer of the Assets and the
Liquor License in accordance with Division 6 of the California Commercial Code
and Sections 24071-24074 of the Business and Professions Code of California.
Concurrently herewith, a fully executed copy of this Agreement is being
deposited with, and countersigned by, Escrow Holder. This Agreement, together
with the Escrow Instructions attached hereto as Exhibit "G", shall constitute
escrow instructions to Escrow Holder and Escrow Holder is hereby appointed and
designated to act as an escrow holder and is authorized and instructed to follow
the escrow instructions set forth herein.
22. Miscellaneous.
a. Notices. Unless applicable law requires a different method of giving
notice, any and all notices, demands or other communications required or desired
to be given hereunder by any party shall be in writing. Assuming that the
contents of a notice meet the requirements of the specific Section of this
Agreement which mandates the giving of that notice, a notice shall be validly
given or made to another party if served either personally or if postage
prepaid, or if transmitted by telegraph, telecopy or other electronic written
transmission device or if sent by overnight courier service, and if addressed to
the applicable party as set forth below. If such notice, demand or other
communication is served personally, service shall be conclusively deemed made at
the time of such personal service. If such notice, demand or other communication
is given by mail, service shall be conclusively deemed given upon the earlier of
receipt or seventy-two (72) hours after the deposit thereof in the United States
mail, postage prepaid. If such notice, demand or other communication is given by
overnight
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<PAGE> 25
courier, or electronic transmission, service shall be conclusively made at the
time of confirmation of delivery. The addresses for Sellers and Buyer are as
follows:
If to Buyer: Jerry's Famous Deli, Inc.
12711 Ventura Boulevard, Suite 400
Studio City, California 91604
Attention: Ike Starkman
Telecopier: (818) 766-8315
With a copy to: Jeffer, Mangels, Butler & Marmaro LLP
2121 Avenue of the Stars, 10th Floor
Los Angeles, California 90067
Attention: Steven J. Insel, Esq.
Telecopier: (310) 203-0567
If to Sellers: Sol Zide
C/O Barry Gordon
16027 Ventura Boulevard, Suite 204
Encino, CA 91436-2728
Telecopier: (818) 990-3609
With a copy to: Parker Mills & Patel
20631 Ventura Boulevard, Suite 300
Woodland Hills, California 91364-2392
Attention: William Mills, Esq.
Telecopier: (818) 883-9345
Any party hereto may change his or its address for the purpose of receiving
notices, demands and other communications as herein provided, by a written
notice given in the aforesaid manner to the other parties hereto.
b. Assignability and Parties in Interest. This Agreement shall not be
assignable by either Seller without the express written consent of Buyer which
shall be given in Buyer's sole and absolute discretion. This Agreement shall not
be assignable by Buyer without the express written consent of each Seller;
provided, however, that Buyer may assign this Agreement to any entity managed,
wholly or partially owned, directly or indirectly, by Buyer. Subject to the
foregoing, this Agreement shall inure to the benefit of and be binding upon
Buyer and Sellers and their respective permitted successors and assigns.
c. Governing Law. This Agreement shall be governed by, and construed
and enforced in accordance with, the laws of the State of California.
d. Venue; Arbitration. Any claims or disputes arising out of or
relating to this Agreement shall be settled by binding arbitration conducted in
Los Angeles County, California in accordance
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<PAGE> 26
with the Commercial Arbitration Rules of the American Arbitration Association
then in effect, and judgment upon the award entered by the arbitrator(s) may be
entered in any court having jurisdiction thereof. Neither party's right to file
a lawsuit seeking an injunction or such party's right to injunctive relief is
subject to arbitration or to the provisions of this Section 22 d.
e. Counterparts. This Agreement may be executed simultaneously in one
or more counterparts, each of which shall be deemed an original, but all of
which shall constitute but one and the same instrument.
f. Indemnification for Brokerage. Buyer and Sellers each represent and
warrant to the other that no broker or finder has acted on its behalf in
connection with this Agreement or the transactions contemplated hereby other
than Jerry Ackrich, who shall be paid a commission of One Hundred Thousand
Dollars ($100,000) at Closing out of Escrow. Each party hereto agrees to
indemnify and hold and save harmless the others from any other claim or demand
for commissions or other compensation by any broker, finder or similar agent
claiming to have been employed by or on behalf of such party.
g. Further Assurances. From time to time after the Closing, Sellers
will execute and deliver to Buyer such instruments of sale, transfer,
conveyance, assignment and delivery, consents, assurances, powers of attorney
and other instruments as may be reasonably requested by counsel for Buyer in
order to vest in Buyer all right, title and interest of Sellers in and to the
Assets and otherwise in order to carry out the purpose and intent of this
Agreement.
h. Complete Agreement. This Agreement, the Exhibits hereto, and the
documents delivered or to be delivered pursuant to this Agreement contain or
will contain the entire agreement between the parties hereto with respect to the
transactions contemplated herein and shall supersede all previous oral and
written and all contemporaneous oral negotiations, commitments, and
understandings.
i. Modification; Waiver. No supplement, modification or amendment of
this Agreement, or of any covenant, condition or limitation herein contained,
shall be valid unless made in writing and executed by the parties hereto. No
waiver of any covenant, condition, or limitation herein contained shall be valid
unless made in writing and executed by the party making the waiver. No waiver of
any of the provisions of this Agreement shall be deemed or shall constitute a
waiver of any other provision hereof (whether or not similar), nor shall such
waiver constitute a continuing waiver unless otherwise expressly provided.
j. Severability. Any provision of this Agreement which is invalid,
illegal, or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective only to the extent of such invalidity, illegality, or
unenforceability, without affecting in any way the remaining provisions hereof
in such jurisdiction or rendering that or any other provision of this Agreement
invalid, illegal, or unenforceable in any other jurisdiction.
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<PAGE> 27
IN WITNESS WHEREOF, each of the parties hereto has executed this
Agreement as of the date first above written.
"SELLERS" "BUYER"
SOLLEY'S, INC. JERRY'S FAMOUS DELI, INC.
By:_________________________________ By:__________________________________
Sol Zide Ike Starkman
____________________________________
SOL ZIDE
The undersigned, as agent for the Escrow Holder, hereby accepts the duties of
Escrow Holder as more particularly described in this Agreement, subject to and
in accordance with all the terms and conditions thereof.
NETTIE BECKER ESCROW, INC.
By:________________________________
Authorized Agent
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<PAGE> 1
Exhibit 10.2
LEASE - SHOPPING CENTER FORM
THIS LEASE, made and entered into this 31st day of August , 1993 by and
between PLAZA INTERNATIONAL
and
SOL S. ZIDE
, hereinafter respectively
referred to as Landlord and Tenant, without regard to number or gender,
WITNESSETH:
1. USE. The Landlord hereby leases to Tenant and Tenant hereby hires
from Landlord, for the purpose of conducting therein a restaurant delicatessen
, those certain premises with
appurtenances described as hereinafter set forth,
2. PREMISES: The premises leased to Tenant, together with
appurtenances, are hereinafter referred to as the "demised premises" and are
situated in the City of Los Angeles, County of Los Angeles, State of
California, and are the premises [This is struck out text] commonly known
and designated as 21857 and 21845 Ventura Bl. Woodland Hills, Ca. in the WARNER
PLAZA [This is struck out text]
3. TERM. The Term of this Lease shall be for a period of fifteen (15)
years. The term of this Lease, and Tenant's obligation to pay rent, shall
commence on [This is struck out text] August 1, 1993. [This is struck out text]
4. RENTAL.
A. Guaranteed Minimum Monthly Rental. Tenant shall pay to Landlord as
minimum monthly rental for the demised premises the sum of twenty six thousand
($26,000) Dollars per month, which sum shall be paid in advance on the first
day of each calendar month throughout the term of this Lease. Said rental
shall commence upon the commencement of the term of this Lease as set forth in
Article Three hereof with proration of rentals for any partial calendar month
of the term hereof. All rental to be paid by Tenant to Landlord shall be in
lawful money of the United States of America and shall be paid without
deduction or offset, prior notice or demand, and at such place or places as may
be designated from time to time by Landlord.
The Minimum Monthly Rental as set forth in 4(A) above shall be increased (but
not decreased) for each year of the term of this lease following the first
year, if the Consumer Price Index for Urban Consumers Los Angeles-Long
Beach-Anaheim (Index) as published by the U.S. Department of Labor's Bureau of
Labor Statistics, increases over the base period Index. The base period Index
shall be the Index for the calender month which is two months prior to the
month in which rentals commence. The base period Index shall be compared with
the Index for the same calender month for each subsequent year (comparison
month). If the Index for any comparison month is higher than the base period
Index, then the Minimum Monthly Rental for the next year shall be increased by
the identical percentage commencing with the next rental commencement month.
<PAGE> 2
B. Percentage Rental
(i) In addition to the minimum guaranteed monthly rental hereinabove
agreed to be paid by Tenant, Tenant shall and will pay to Landlord at the time
and in the manner herein specified an additional rental in an amount equal to
6 and 1/2% of the amount of Tenant's gross sales made in, upon or from the
demised premises during each lease year of the term hereof, less the aggregate
amount of the minimum guaranteed monthly rental previously paid by Tenant for
said lease year.
(ii) Within ten (10) days after the end of each calendar month of the
term hereof, commencing with the 10th day of the month following the
commencement of rentals (as hereinabove provided and ending with the 10th day of
the month next succeeding in the last month of the lease term, Tenant shall
furnish to Landlord a statement in writing, certified by Tenant to be correct,
showing the total gross sales made in, upon, or from the demised premises during
the preceding calendar month, and shall accompany each such statement with a
payment to Landlord equal to six & 1/2% of the total monthly gross sales made
in, upon, or from the demised premises during each calendar month less the
minimum guaranteed rent for each such calendar month, if previously paid. Within
twenty (20) days after the end of each lease year of the term hereof, Tenant
shall furnish to Landlord a statement in writing, certified by Tenant to be
correct, showing the total gross sales by month made in, upon, or from the
demised premises during the preceding lease year, at which time an adjustment
shall be made between Landlord and Tenant to the end that the total percentage
rent paid for each such lease year shall be a sum equal to six & 1/2% of the
total gross sales made in, upon, or from the demised premises during each lease
year of the term hereof, less the minimum guaranteed rent for each such lease
year, if previously paid, so that the percentage rent, although payable monthly
shall be computed and adjusted on an annual basis.
(iii) The term "lease year" as used in this Lease means as follows:
(a) In reference to the first lease year, the period from the
commencement of the term of this Lease to the last day of the calendar month
which is one year after the commencement of said term.
(b) In reference to any succeeding lease year, a full year
commencing on the day following the first lease year or any anniversary
thereof, and running to the next succeeding anniversary of such day.
(iv) The term "gross sales" as used in this Lease shall include the
entire gross receipts of every kind and nature from sales and services made in,
upon, or from the demised premises, whether upon credit or for cash, in every
department operating in the demised premises, whether operated by the Tenant or
by a subtenant or subtenants, or by a concessionaire or concessionaires,
excepting therefrom any rebates and/or refunds to customers and the amount of
all sales tax receipts which has to be accounted for by Tenant to any
government or governmental agency. Sales upon credit shall be deemed cash sales
and shall be included in the gross sales for the period which the merchandise
is delivered to the customer, whether or not title to the merchandise passes
with delivery.
(v) The Tenant shall keep full, complete and proper books, records
and accounts of its daily gross sales, both for cash and on credit, of each
separate department and concessionaire at any time operated in the demised
premises. The Landlord and its agents and employees shall have the right at
any and all times, during regular business hours, to examine and inspect all of
the books and records of the Tenant, including any sales tax reports pertaining
to the business of the Tenant conducted in, upon or from the demised premises,
for the purpose of investigating and verifying the accuracy of any statement
of gross sales. The Landlord may once in any lease year cause an audit of the
business of Tenant to be made by a certified public accountant of Landlord's
selection and if the statement of gross sales previously made to Landlord shall
be found to be inaccurate, then and in that event, there shall be an adjustment
and one party shall pay to the other on demand such sums as may be necessary to
settle in full the accurate amount of said percentage rent that should have
been paid to Landlord for the period or periods covered by such inaccurate
statement or statements. If said audit shall disclose an inaccuracy of greater
than 2% error with respect to the amount of gross sales reported by Tenant for
the period of said report, then the Tenant shall immediately pay to Landlord
the cost of such audit; otherwise, the cost of such audit shall be paid by
Landlord. If such audit shall disclose any willful or substantial
inaccuracies this Lease may thereupon be cancelled and terminated, at the
option of Landlord.
5. REAL ESTATE TAXES. Tenant agrees to pay all real estate taxes, levies
and assessments and all other charges in the nature of taxes and assessments
upon said real property, general and special, ordinary and extraordinary, of any
kind and nature whatsoever heretofore or which during the term of this Lease are
laid, levied, assessed or imposed, or become a lien upon or become chargeable
against or payable in connection with the demised premises or any part thereon.
Tenant shall pay said taxes monthly upon receipt from Landlord of a statement
delineating Tenant's share of said taxes; said taxes, payable monthly shall be
computed and adjusted on an annual basis.
In the event the Landlord does not have the demised premises separately
assessed for tax purposes, then and in that event the taxes and assessments on
the demised premises shall be apportioned according to the floor area of the
demised premises, (said gross ground floor area), as it relates to the total
floor area, (gross ground floor area), of the building or buildings including
the demised premises. All taxes for the year in which this Lease commences shall
be apportioned and adjusted. With respect to any assessment (other than those
delineated in the tax bill) which may be levied against or upon the demised
premises and which under the laws then in force may be evidenced by improvement
or other bonds, or which may be paid in annual installments, the Landlord shall
cause such improvement bonds to be issued or cause such assessments to be paid
in the maximum permissible number of annual installments, and in such event the
Tenant shall only be required to pay such installment payments with interest
thereon as each thereof matures and Tenant shall have no obligation to continue
such payments after the termination of this Lease.
2
<PAGE> 3
The term "real estate taxes" as used herein shall be deemed to mean all
taxes imposed upon the real property and permanent improvements, and all
assessments levied against said premises, or the lease or the rental taxes
levied or assessed upon the rent received by the Landlord from the Tenant but
shall not include personal income taxes, personal property taxes, inheritance
taxes, or franchise taxes levied against the Landlord, but not directly against
said property, even though such taxes shall become a lien against said property.
6. PERSONAL PROPERTY TAXES. During the term hereof Tenant shall pay
prior to delinquency all taxes assessed against and levied upon fixtures,
furnishings, equipment and all other personal property of Tenant contained in
the demised premises, and when possible Tenant shall cause said fixtures,
furnishings, equipment and other personal property to be assessed and billed
separately from the real property of Landlord. In the event any or all of the
Tenant's fixtures, furnishings, equipment and other personal property shall be
assessed and taxed with the Landlord's real property, the Tenant shall pay to
Landlord its share of such taxes within ten (10) days after delivery to Tenant
by Landlord of a statement in writing setting forth the amount of such taxes
applicable to the Tenant's property.
8. PARKING AND COMMON FACILITIES. Landlord covenants that the common
and parking areas shall be at all times available for the non-exclusive use of
Tenant during the full term of this Lease or any extension of the term hereof;
provided that the condemnation or other taking by any public authority, or sale
in lieu of condemnation, of any or all of such common and parking areas shall
not constitute a violation of this covenant. Landlord reserves the right to
change the entrances, exits, traffic lanes and the boundaries and locations of
such parking area or areas.
(a) Prior to the date of Tenant's occupation of the demised
premises, Landlord shall cause said common and parking area or areas to be
graded, blacktopped, lighted and appropriately marked and landscaped at no
expense to Tenant.
(b) The Landlord shall keep said automobile parking and common
areas in a neat, clean and orderly condition, properly lighted and landscaped,
and shall repair any damage to the facilities thereof.
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<PAGE> 4
(c) Tenant, for the use and benefit of Tenant, its agents,
employees, customers, licensees and sub-tenants, shall have the non-exclusive
right in common with Landlord, and other present and future owners, tenants and
their agents, employees, customers, licensees and sub-tenants, to use said
common and parking areas during the entire term of this Lease, or any extension
thereof, for ingress and egress, roadway, sidewalk and automobile parking.
(d) The Tenant, in the use of said common and parking areas,
agrees to comply with such reasonable rules and regulations as the Landlord may
adopt from time to time for the orderly and proper operation of said common and
parking areas. Such rules may include but not be limited to the following:
(1) The restricting of employee parking to a limited,
designated area or areas; and
(2) The regulation of the removal, storage and disposal of
Tenant's refuse and other rubbish at the sole cost and
expense of Tenant.
9. USES PROHIBITED. Tenant shall not use, or permit said
premises, or any part thereof, to be used for any purpose or purposes other
than the purpose or purposes for which said premises are hereby leased; and no
use shall be made or permitted to be made of said premises, nor acts done, which
will increase the existing rate of insurance upon the building of which said
premises may be located (once said rate is established), or cause a
cancellation of any insurance policy covering said building or any part
thereof, nor shall Tenant sell or permit to be kept, used or sold in or about
said premises any article which may be prohibited by standard form of fire
insurance policies. Tenant shall, at his sole cost, comply with any and all
requirements, pertaining to the use of said premises, of any insurance
organization or company necessary for the maintenance of reasonable fire and
public liability insurance, covering said building and appurtenances. In the
event Tenant's use of the premises, recited in Article 1 hereof, results in a
rate increase for the building of which the demised premises are a part, Tenant
shall pay annually on the anniversary date of this Lease, as additional rent, a
sum equal to that of the additional premium occasioned by said rent increase.
10. ALTERATIONS. Tenant shall not make, or suffer to be made, any
alterations of the demised premises, or any part thereof, without the prior
written consent of Landlord, and any additions to, or alterations of, said
premises, except movable furniture and trade fixtures shall become at once a
part of the realty and belong to Landlord.
11. MAINTENANCE AND REPAIR. Tenant shall, subject to Landlord's
obligation as set forth in Article 19, at all times during the term hereof, and
at Tenant's sole cost and expense, keep, maintain and repair the improvements
upon the demised premises in good and sanitary order and condition (except as
hereinafter provided with respect to Landlord's obligation) including without
limitation, the maintenance and repair of any doors, window casements, glazing,
electrical wiring and conduits. Tenant hereby waives all right to make repairs
at the expense of Landlord as provided in Section 1942 of the Civil Code of the
State of California and Tenant hereby waives all rights provided for by Section
1941 of said Civil Code. By entering into the demised premises Tenant shall be
deemed to have accepted the demised premises as being in good and sanitary
order, condition and repair and Tenant agrees on the last day of said term or
sooner termination of this Lease to surrender the demised premises with
appurtenances, in the same condition as when received, reasonable use and wear
thereof and damage by fire, act of God or by the elements excepted.
Landlord shall, at his sole cost and expense, keep and maintain in good
repair the exterior walls, roof and sidewalks, provided, however, that anything
to the contrary notwithstanding contained in this Lease, the Landlord shall not
be required to make any repairs to the exterior walls, roof and sidewalks unless
and until Tenant has notified Landlord in writing of the need for such repairs
and Landlord shall have had a reasonable period of time thereafter within which
to commence and complete said repairs. Landlord agrees to use due diligence in
the making of said repairs upon receipt of Tenant's notice with regards thereto.
12. COMPLIANCE WITH LAWS. Tenant shall, at his sole cost and
expense, comply with all of the requirements of all municipal, state and
federal authorities now in force or which may hereafter be in force pertaining
to the use of said premises, and shall faithfully observe in said use all
Municipal ordinances and State and Federal statutes now in force or which shall
hereinafter be in force. The judgment of any court of competent jurisdiction,
or the admission of Tenant in any action, or proceeding against Tenant, whether
Landlord be a party thereto or not, that Tenant has violated any such order or
statute in said use, shall be conclusive of that fact as between the Landlord
and Tenant.
Tenant shall not commit, or suffer to be committed, any waste upon the
demised premises, or any nuisance or other act or thing which may disturb the
quiet enjoyment of any other tenant in the building in which the demised
premises may be located.
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<PAGE> 5
13. INDEMNIFICATION OF LANDLORD -- LIABILITY INSURANCE BY TENANT.
Tenant as a material part of the consideration to be rendered to Landlord under
this Lease, hereby waive all claims against Landlord for damage to goods, wares
and merchandise in, upon or about said premises and for injuries to persons in
or about said premises, from any cause arising at any time and Tenant will hold
Landlord exempt and harmless from any damage or injury to any person, or the
goods, wares, and merchandise of any person, arising from the use of the
premises by Tenant or from the failure of Tenant to keep the premises in good
condition and repair, as herein provided.
During the entire term of this Lease, the Tenant shall, at the Tenant's
sole cost and expense, but for the mutual benefit of Landlord and Tenant,
maintain general public liability insurance against claims for personal injury,
death or property damage occurring in, upon or about the demised premises and
on any sidewalks directly adjacent to the demised premises. The limitation of
liability of such insurance shall be not less than One Hundred Thousand and
No/100ths ($100,000.00) Dollars in respect to injury or death of one person,
and to the limit of not less than Three Hundred Thousand and No/100ths
($300,000.00) Dollars in respect to any one accident and to the limit of not
less than Twenty-Five Thousand and No/100ths ($25,000.00) Dollars in respect to
property damage. All such policies of insurance shall be issued in the name of
Tenant and Landlord and for the mutual and joint benefit and protection of the
parties, and such policies of insurance or copies thereof shall be delivered to
the Landlord.
14. FREE FROM LIENS. Tenant shall keep the demised premises and the
property in which the demised premises are situated free from any liens arising
out of any work performed, material furnished, or obligation incurred by Tenant.
15. ABANDONMENT. Tenant shall not vacate or abandon the demised
premises at any time during the term of this Lease; and if Tenant shall
abandon, vacate or surrender the demised premises or be dispossessed by process
of law, or otherwise, any personal property belonging to Tenant and left on the
demised premises shall be deemed to be abandoned, at the option of Landlord,
except such property as may be mortgaged to Landlord.
16. SIGNS AND AUCTIONS. The Tenant may affix and maintain upon the
glass panes of the show windows only such signs, advertising placards, names,
insignia, trademarks and descriptive material as shall have first received the
written approval of the Landlord as to size, type, color, location, copy,
nature and display qualities. Anything to the contrary in this Lease
notwithstanding, Tenant shall not affix any sign to the roof of this building.
Tenant further agrees not to install any exterior lighting, amplifiers or
similar devices or use in or about the premises any advertising medium which
may be heard or seen outside the premises, such as flashing lights,
searchlights, loudspeakers, phonographs or radio broadcasts.
Tenant shall not conduct or permit to be conducted any sale by auction
in, upon or from the demised premises, whether said auction be voluntary,
involuntary, pursuant to any assignment for the payment of creditors or
pursuant to any bankruptcy or other solvency proceeding.
17. UTILITIES. Tenant shall pay before delinquency all charges for
telephone service used in, upon, or about the demised premises by Tenant or any
of its sub-tenants, licensees, or concessionaires during the term and any
extension or renewal of the term of this Lease.
18. ENTRY AND INSPECTION. Tenant shall permit Landlord and his agents
to enter into and upon the demised premises at all reasonable times for the
purpose of inspecting the same or for the purpose of maintaining the building
in which said premises are situated, or for the purpose of making repairs,
alterations or additions to any other portion of said building, including the
erection and maintenance of such scaffolding, canopy, fences and props as may
be required, or for the purpose of posting notices of nonliability for
alterations, additions or repairs, or for the purpose of placing upon the
property in which the premises are located any usual or ordinary "For Sale"
signs. Landlord shall be permitted to do any of the above without any rebate of
rent and without any liability to Tenant for any loss of occupation or quiet
enjoyment of the premises thereby occasioned. Tenant shall permit Landlord, at
any time within thirty (30) days prior to the expiration of this Lease, to
place upon said premises any usual or ordinary "For Lease" signs and during
such thirty (30) day period Landlord or his agents may, during normal business
hours, enter upon said premises and exhibit same to prospective tenants.
19. DAMAGE AND DESTRUCTION OF PREMISES. In the event of (a) partial
destruction of said premises or the building containing same during said term
which requires repairs to either said premises or said building, or (b) said
premises or said building being declared unsafe or unfit for occupancy by any
authorized public authority for any reason other than Tenant's act, use or
occupation, which declaration requires repairs to either said premises or said
building, Landlord shall forthwith make said repairs provided Tenant gives to
Landlord thirty (30) days written notice of the necessity therefor. No such
partial destruction (including any destruction necessary in order to make
repairs required by any declaration made by any public authority) shall in any
wise annul or void this Lease except that Tenant shall be entitled to a
proportionate reduction of minimum guaranteed rental while such repairs are
being made, such proportionate reduction to be based upon the extent to which
the making of such repairs shall interfere with the business carried on by
Tenant in said premises. However, if during the term of this Lease the building
is damaged as a result of fire or any other casualty to an extent in excess of
twenty-five
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(25%) per cent of its then replacement cost, (excluding foundations(s),
Landlord may within the (30) days following the date such damage occurs
terminate this Lease by written notice to Tenant. If Landlord, however, elects
to make said repairs, and provided Landlord uses due diligence making said
repairs, this Lease shall continue in full force and effect and the minimum
guarantee rental shall be proportionately reduced as hereinabove provided. If
Landlord elects to terminate this Lease all rentals shall be prorated between
Landlord and Tenant as of the date of such destruction.
In respect to any partial destruction (including any destruction
necessary in order to make repairs required by any such declaration of any
authorized public authority) which Landlord is obligated to repair or may elect
to repair under the terms of this Article 19, the provisions of Section 1932,
Subdivision (2) and Section 1933, Subdivision (4) of the Civil Code of the
State of California are waived by Tenant.
20. ASSIGNMENT AND SUBLETTING. Tenant shall not assign this Lease, or
any interest therein, and shall not sublet the demised or any part thereof, or
any right or privilege appurtenant thereto, or permit any other person (the
agents and servants of Tenant excepted) occupy or use the demised premises, or
any portion thereof.
21. DEFAULT. In the event of any breach of this Lease by Tenant, the
Landlord shall notify the Tenant in writing of such breach, and Tenant shall
have ten (10) days in which to cure any such breach as to payments of rent or
other sums due hereunder, and thirty (30) days to cure any other breach, and if
Tenant shall fail to cure such breach or default within such time limit, then
Landlord, besides other rights or remedies Landlord may have, shall have the
immediate right of re-entry and may remove all persons and property from the
premises; and such property may be removed and stored in a public warehouse or
elsewhere at the cost of, and for the account of, Tenant. Should Landlord elect
to re-enter, as herein provided, or should Landlord take possession pursuant to
legal proceedings or pursuant to any notice provided for by law, Landlord may
either terminate this Lease or may from time to time, without terminating this
Lease, re-let said premises or any part thereof for such term or terms (which
may be for a term extending beyond the term of this Lease) and at such rental
or rentals and upon such other terms and conditions as Landlord in his sole
discretion may deem advisable, with the right to make alterations and repairs
to said premises. Upon such re-letting (a) Tenant shall be immediately liable
to pay to Landlord, in addition to any indebtedness other than rent due
hereunder, the cost and expenses of such re-letting and of such alteration and
repair, incurred by Landlord, and the amount, if any, by which the rent
reserved in this Lease for the period of such re-letting (up to but not beyond
the term of this Lease) exceeds the amount agreed to be paid as rent for the
demised premises for such period of such re-letting; or (b) At the option of
Landlord, rents received by such Landlord from such re-letting shall be
applied as follows: First, to the payment of any indebtedness, other than rent,
due hereunder from Tenant to Landlord; Second, to the payment of any costs and
expenses of such re-letting and of such alterations and repairs; Third, to the
payment of rent due and unpaid hereunder; and the residue, if any, shall be held
by Landlord and applied in payment of future rent as the same may become due and
payable hereunder. If Tenant has been credited with any rent to be received by
such re-letting under option (a), and such rent shall not be promptly paid to
Landlord by the new tenant, or if such rentals received from re-letting under
option (b) during any month be less than that to be paid during that month by
Tenant hereunder, Tenant shall pay any such deficiency to Landlord. Such
deficiency shall be calculated and paid monthly. No such re-entry or taking
possession of said premises by Landlord shall be construed as an election on
Landlord's part to terminate this Lease unless a written notice of such
intention be given to Tenant or unless the termination thereof be decreed by a
court of competent jurisdiction. Notwithstanding any re-letting without
termination, Landlord may at any time thereafter elect to terminate this Lease
for such previous breach. Should Landlord at any time elect to terminate this
Lease for any breach, in addition to any other remedies he may have, Landlord
may recover from Tenant all damages incurred by Landlord by reason of such
breach, including the cost of recovering the premises, and including the worth
at the time of such termination of the excess, if any, of the amount of rent and
charges equivalent to rent reserved in this Lease for the remainder of the
stated term of this Lease over the then reasonable rental value of the premises
for the remainder of the stated term, all of which amounts shall be immediately
due and payable from Tenant to Landlord.
22. INSOLVENCY OF TENANT. Tenant agrees that in the event all or
substantially all of its assets be placed in the hands of a receiver or
trustee, and in the event such receivership or trusteeship continue for a period
of ten (10) days, or should Tenant make an assignment for the benefit of
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creditors, or be adjudicated a bankrupt, or should Tenant institute any
proceedings under any state or federal bankruptcy act wherein Tenant seeks to
be adjudicated a bankrupt, or seeks to be discharged of its debts, or should
any involuntary proceeding be filed against such Tenant under such bankruptcy
laws and Tenant consents thereto or acquiesces therein by pleading or default,
then the Lease or any interest in and to the demised premises shall not become
an asset in any of such proceedings and in any of such events, and in addition
to any and all rights or remedies of Landlord hereunder or as provided by law,
it shall be lawful for Landlord at his option to declare the terms hereof ended
and to reenter the demised premises and take possession thereof and remove all
persons therefrom and Tenant shall have no further claim therein or hereunder.
23. SURRENDER OF LEASE. The voluntary or other surrender of this Lease
by Tenant, or mutual cancellation thereof, shall not work a merger, and shall,
at the option of Landlord, terminate all or any existing sub-leases or
sub-tenancies, or may, at the option of Landlord, operate as an assignment to
him of any or all of such sub-leases or sub-tenancies.
24. SALE OF PREMISES BY LANDLORD. In the event of any sale of the
demised premises by Landlord, Landlord shall be and is hereby entirely freed and
relieved of all liability under an and all of its covenants and obligations
contained in or derived from this Lease arising out of an act, occurrence or
omission occurring after the consummation of such sale; and the purchaser, and
such sale or any subsequent sale of the demised premises shall be deemed,
without any further agreement between the parties or their successors in
interest or between the parties and any such purchaser, to have assumed and
agreed to carry out any and all of the covenants and obligations of the
Landlord under this Lease.
25. HOURS OF BUSINESS. Subject to the provisions of Article 19
hereof, Tenant shall continuously during the entire term hereof conduct and
carry on Tenant's business in the demised premises and shall keep the demised
premises open for business and cause Tenant's business to be conducted therein
during the usual business hours of each and every business day as is customary
for businesses of like character in the city in which the demised premises are
located to be open for business; provided, however, that this provision shall
not apply if the demised premises should be closed and the business of Tenant
temporarily discontinued therein on account of strikes, lockouts or similar
causes beyond the reasonable control of Tenant or closed for not more than
three days out of respect to the memory of any deceased officer or employee of
Tenant, or the relative of any such officer or employee. Tenant shall keep the
demised premises adequately stocked with merchandise, and with sufficient sales
personnel to care for the patronage, and to conduct said business in accordance
with sound business practice.
In the event of breach by the Tenant of any of the conditions in this
Article contained, the Landlord shall have, in addition to any and all remedies
herein provided, the right at its option to collect not only the minimum rent
herein provided, but additional rent at the rate of one-thirtieth (1/30) of the
minimum monthly rent herein provided for each and every day that the Lessee
shall fail to conduct its business as herein provided; said additional rent
shall be deemed to be in lieu of any percentage rent that might have been
earned during such period of the Tenant's failure to conduct its business as
herein provided.
26. ATTORNEY'S FEES. In the event the Landlord finds it necessary to
retain an attorney in connection with the default by the Tenant in any of the
agreements or covenants contained in this Lease, Tenant shall pay reasonable
attorneys' fees to said attorney.
27. SECURITY DEPOSIT. Tenant contemporaneously with the execution of
this Lease, has deposited with Landlord the sum of sixty five thousand
($65,000.00) Dollars, receipt of which is hereby acknowledged by Landlord, said
deposit being given to secure the faithful performance by the Tenant of all of
the terms, covenants, and conditions of this Lease by the Tenant to be kept and
performed during the term hereof. Tenant agrees that if the Tenant shall fail
to pay the rent herein reserved promptly when due, said deposit may, at the
option of the Landlord (but Landlord shall not be required to) be applied to
any rent due and unpaid, and if the Tenant violates any of the other terms,
covenants, and conditions of this Lease, said deposit may be applied to any
damages suffered by Landlord as a result of Tenant's default, to the extent of
the amount of the damages suffered.
Nothing contained in this Article 27 shall in any way diminish or be
construed as waiving any of the Landlord's other remedies as provided in
Article 21 hereof, or by law or in equity. Should the entire security deposit,
or any portion thereof, be appropriated and applied by Landlord for the payment
of overdue rent or other sums due and payable to Landlord by Tenant hereunder,
then Tenant shall, on the written demand of Landlord, forthwith remit to
Landlord a sufficient amount in cash to restore said security deposit to its
original amount, and Tenant's failure to do so within fifteen (15) days after
receipt of such demand shall constitute a breach of this Lease. Should Tenant
comply with all of the terms, covenants, and conditions of this Lease and
promptly pay all of the rental herein provided for as it falls due, and all
other sums payable by Tenant to Landlord hereunder, said security deposit shall
be returned in full to Tenant at the end of the term of this Lease, or upon the
earlier termination of this Lease pursuant to the provisions of Article 19
hereof. Landlord shall have the right to commingle said security deposit with
other funds of Landlord. Landlord may deliver the funds deposited herein by
Tenant to the purchaser of Landlord's interest in the demised premises in the
event that such interest be sold, and thereupon Landlord shall be discharged
from further liability with respect to such deposit.
*The sum of $48,000.00 of the above said security deposit has been credited
from the expiring lease for the premises, dated August 10, 1990.
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28.
29. COMPETITION. During the term of this Lease, Tenant shall not
directly or indirectly engage in any similar or competing business within a
driving radius of three (3) miles from the outside boundary of the Shopping
Center.
30. HOLDING OVER. Any holding over after the expiration of the term of
this Lease, with the consent of Landlord, shall be construed to be a tenancy
from month to month, cancellable upon thirty (30) days written notice, and at a
rental and upon terms and conditions as existed during the last year of the term
hereof.
31. NOTICES. Wherever in this Lease it shall be required or permitted
that notice and demand be given or served by either party to this Lease to or on
the other, such notice or demand shall be given or served and shall not be
deemed to have been duly given or served unless in writing and forwarded by
certified mail, addressed as follows:
TO: Landlord TO: Tenant
PLAZA INTERNATIONAL
AT: 21777 Ventura Blvd. AT:
Woodland Hills, Calif. 91364
Either party may change such address by written notice by registered
mail to the other.
32. SUCCESSORS IN INTEREST. The covenants herein contained shall,
subject to the provisions as to assignment, apply to and bind the heirs,
successors, executors, administrators and assigns of all the parties hereto; and
all of the parties hereto shall be jointly and severally liable hereunder.
33. TENANT'S PERFORMANCE. In the event Tenant shall fail within any
time limits which may be provided herein to complete any work or perform any
other requirement provided to be performed by Tenant prior to the commencement
hereof, or in the event Tenant shall cause a delay in the completion of any
work, Landlord shall send Tenant written notice of said default and if said
default is not corrected within 10 days thereafter, Landlord shall have the
option of terminating this Lease by a written notice of termination and upon
forwarding of said notice this Lease shall cease and terminate, Landlord shall
be entitled to retain as liquidated damages all deposits made hereunder and such
improvements as Tenant may have annexed to the realty that can not be removed
without damage thereto.
34. FORCE MAJEURE. If either party hereto shall be delayed or
prevented from the performance of any act required hereunder by reason of acts
of God, strikes, lockouts, labor troubles, inability to procure materials,
restrictive governmental laws or regulations or other cause without fault and
beyond the control of the party obligated (financial inability excepted),
performance of such act shall be excused for the period of the delay and the
period for the performance of any such act shall be extended for a period
equivalent to the period of such delay; provided, however, nothing in this
Article 34 contained shall excuse Tenant from the prompt payment of any rental
or other charge required of Tenant hereunder except as may be expressly provided
elsewhere in this Lease.
35. PARTIAL INVALIDITY. If any term, covenant, condition or provision
of this Lease is held by a court of competent jurisdiction to be invalid, void
or unenforceable, the remainder of the provisions hereof shall remain in full
force and effect and shall in no way be affected, impaired or invalidated
thereof.
36. MARGINAL CAPTIONS. The various headings and numbers herein and the
grouping of the provisions of this Lease into separate Articles and paragraphs
are for the purpose of convenience only and shall not be considered a part
hereof.
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37. TIME. Time is of the essence of this Lease.
38. SUBORDINATION, ATTORNMENT. Upon request of the Landlord, Tenant
will in writing subordinate its rights hereunder to the lien of any first
mortgage, or first deed of trust, to any bank, insurance company or other
lending institution, now or hereafter in force against the land and building of
which the demised premises are a part, and upon any buildings hereafter placed
upon the land of which demised premises are a part, and to all advances made or
hereafter to be made upon the security thereof.
In the event any proceedings are brought for foreclosure, or in the
event of the exercise of the power of sale under any mortgage or deed of trust
made by the Landlord covering the demised premises, the Tenant shall attorn to
the purchaser upon any such foreclosure or sale and recognize such purchaser as
the Landlord under this Lease.
The provisions of this Article to the contrary notwithstanding, and so
long Tenant is not in default hereunder, this Lease shall remain in full force
and effect for the full term hereof.
Within ten (10) days after request therefor by Landlord, or in the
event that upon any sale, assignment or hypothecation of the demised premises
or the land thereunder by the Landlord, an offset statement shall be required
from Tenant, Tenant agrees to deliver in recordable form a certificate
addressed to any such proposed mortgagee or purchaser or to the Landlord
certifying that this Lease is in full force and effect (if such be the case)
and that there are no differences or offsets thereto or stating those claimed
by Tenant.
40. It is understood and agreed that should Landlord not be able to
give possession to Tenant of 21845 Ventura Bl. Woodland Hills, Ca. on August 1,
1993, this lease shall remain in full force, except that the Tenant's
obligations under this lease shall commence when possession is given to Tenant.
41. Tenant shall connect the water usage pipes from 21845 to the
metered water usage system in 21857 Ventura Bl. Woodland Hills, Ca.
42. As of the commencement of this lease, the lease for the premises
known as 21857 Ventura Bl. Woodland Hills, Ca. dated August 10, 1990 shall be
null and void.
43. Landlord shall not unreasonably withhold his consent to an
assignment of this lease by Tenant, provided that Tenant is not in default of
this lease. In the event of an assignment, Tenant shall pay to Landlord the
additional amount equal to 1-1/2 month's rent then in effect.
43. In the event of an assignment of this lease, new Tenant shall pay
to Landlord the additional sum of $22,000.00 as security deposit under Article
27.
IN WITNESS WHEREOF, the parties have duly executed this Lease together
with the herein referred to Exhibits which are attached hereto, the day and
year first above written.
PLAZA INTERNATIONAL /s/ Sol S. Zide
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Sol S. Zide
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<PAGE> 1
Exhibit 10.3
AMENDMENT TO LEASE
THIS AMENDMENT TO LEASE ("Amendment") is made and entered into as of
the ____ day of _____________, 1996, by and among PLAZA INTERNATIONAL
("Landlord"), and SOL ZIDE, an individual ("Lessee").
RECITALS
A. Lessee is the lessee pursuant to that certain Lease -- Shopping
Center Form, dated as of August 31, 1993 (the "Lease"), by and between Landlord
and Lessee, pursuant to which Lessee leased from Landlord commercial space
commonly known as 21857 and 21845 Ventura Boulevard, Woodland Hills, California
(the "Original Premises"), as such Original Premises are more particularly
described in the Lease.
B. Lessee currently owns and operates a restaurant known as "Solley's"
on the Original Premises (the "Acquired Restaurant").
D. Lessee and Jerry's Famous Deli, Inc., a California corporation
("JFD"), propose to enter into an Asset Purchase Agreement (the "Asset Purchase
Agreement") pursuant to which the Lessee will sell and assign to JFD, and JFD
will purchase from Lessee, the Acquired Restaurant, including all of Lessee's
right, title and interest in and to the Lease.
E. In connection with the consummation of transactions contemplated by
the Asset Purchase Agreement (the "Sale Transaction"), effective upon
consummation of the Sale Transaction, Landlord and Lessee desire to modify the
Lease in accordance with the terms set forth below.
F. Upon effectiveness of the Sale Transaction, Landlord and Lessee
desire to modify and amend the Lease to include the premises known as 21853
Ventura Boulevard, Woodland Hills, California (the "Additional Premises"). The
Additional Premises and the Original Premises are sometimes collectively
referred to herein as the "Premises."
<PAGE> 2
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Certifications of Landlord. Landlord hereby agrees and
certifies to Lessee that:
a. Pursuant to the Lease, Lessee has leased the Original
Premises and has paid to Landlord a security deposit of $65,000 which, upon
effectiveness of the lease of the Additional Premises, will increase to $85,000.
The term of the Lease commenced on August 1, 1993 and the expiration date of the
Lease (prior to the effectiveness of the amendments contemplated by this
Amendment) is July 31, 2008. The current minimum monthly rental for the Original
Premises is $27,076.76 against a percentage rental of 6.5% of Lessee's gross
sales, as set forth in the Lease.
b. Notwithstanding anything to the contrary contained in
the Lease, upon effectiveness of the lease of the Additional Premises, the
initial minimum monthly rental for the Premises (including the Additional
Premises) shall be $34,576.76 against a percentage rental of 6.5% of Lessee's
gross sales for the entire Premises, as set forth in the Lease, inclusive of
monthly common area and insurance charges as provided for in Section 3 below.
c. The Premises consist of a total of 8,600 square feet of
which the Original Premises constitute 6,975 square feet and the Additional
Premises constitute 1,625 square feet.
2. Security Deposit.
a. Article 43 (second numbered paragraph) of the Lease is
hereby amended to read as follows:
"In the event of an assignment of this lease, new Tenant shall
pay to Landlord the additional sum of $15,000.00 as security
deposit under Article 27."
Upon assignment of the Lease to JFD in connection with closing of the Sale
Transaction, all of Lessee's rights to any existing
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security deposit shall be assigned and transferred from Lessee to JFD and JFD
shall cause the additional security deposit referenced in Article 43 of the
Lease, as revised, to be deposited with Landlord.
3. Lease of Additional Premises. Upon the closing of the Sale
Transaction (the "Effective Time"), the Additional Premises shall automatically
be added to the Lease. At the Effective Time, the minimum monthly rent for the
Premises (including the Additional Premises) shall be $34,576 (which includes
the minimum monthly rental plus the amount of the monthly common area and
insurance charges for the Premises as set forth in the Agreement) against a
percentage rental of 6.5% of Lessee's gross sales for the entire Premises.
Notwithstanding anything to the contrary contained in the Lease or this
Amendment, after the Effective Time no separate common area or insurance charges
will be made with respect to the Premises and the only adjustments to the
minimum monthly rental for the Premises shall be inflation adjustments made
pursuant to the provisions of Article 4 of the Lease and any adjustments in the
real estate taxes payable pursuant to Article 5 of the Lease.
4. Real Estate Taxes. Real estate taxes shall be paid as
provided in Article 5 of the Lease, currently at a rate of $1,015.00 per month,
inclusive of the Additional Premises; provided, however, that Lessee shall be
responsible for paying any increase in real estate taxes resulting from tenant
improvements made by Lessee to any of the Original Premises, the Additional
Premises, or any of the Spaces (as defined in Section 6 below).
5. Extension of Lease Term. At the Effective Time, the term of
the Lease will be automatically extended for an additional three (3) year
period, such that the initial Lease Term shall expire on July 31, 2011.
6. Option on Additional Space. At the Effective Time, the
Lease will be automatically amended to grant Lessee the right to lease either or
both of the spaces (the "Spaces") identified in Exhibit A, attached hereto and
incorporated herein by this reference. The option shall be exercisable after
termination of the currently existing terms of the lease(s) for the Space(s). If
exercised, the Spaces shall be added to the Lease on identical terms as
applicable to the Premises pursuant the terms of the Lease
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and this Amendment. Upon exercise of the right to lease the Space(s), the
minimum monthly rental (inclusive of all common area and insurance charges) for
the expanded Premises, inclusive of such additional Space or Spaces (the
"Expanded Premises"), shall equal (i) the minimum monthly rental per square foot
payable for the Premises as set forth in Section 3 of this Amendment, multiplied
by (ii) the total square footage of the Expanded Premises, against a minimum
monthly rental equal to 6.5% of Lessee's gross sales for the Expanded Premises,
inclusive of monthly common area and insurance charges as provided for in
Section 3 above. If the Space or Spaces are leased pursuant to the option
contained in this Section 6, real estate taxes payable by the Lessee in respect
of such additional Space or Spaces shall be paid at the same rate per square
foot as applicable to the Premises. Landlord shall notify Lessee as soon as
practical as to the date each Space's current lease will terminate. Within four
calendar months before such termination date or five days from receipt of
notice, whichever is later, Lessees shall notify Landlord if it will exercise
the option.
7. Additional Covenant Regarding Use of Premises. On the
Effective Date, the Lease shall be amended to provide that Lessee may not wash
or clean equipment in the parking lot or any other area of the Center outside of
the Premises.
8. Agreement Regarding Additional Premises. Notwithstanding
anything to the contrary contained in that certain Agreement, dated March 9,
1996, between Lessee and Landlord, regarding the Additional Premises (the
"Option"), a copy of which is attached hereto as Exhibit B, Lessee shall have
the option to extend the term of such Option for an additional one month period
by paying Landlord a non-refundable sum of $10,000 prior to April 1, 1996. In
the event that the Sale Transaction shall not have closed prior to May 1, 1996,
Lessee shall have the option to extend the term of the Option for one additional
one month period by paying Landlord a non-refundable sum of $10,000 prior to the
first date of the month for which the Option extension will apply.
9. Additional Amendments to Lease. In addition to the
modifications to the Lease provided for in Sections 1 through 8 above, on the
Effective Date, the Lease shall be modified and amended as reflected in the
marked and initialed copy of the Lease attached hereto as Exhibit C, and
incorporated herein by this
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reference.
10. Effectiveness of Lease Amendments. Any amendments to the
terms and provisions of the Lease provided for in this Amendment shall be
effective only upon assignment of the Lease to JFD in connection with the Sale
Transaction.
11. Assignment. Except as specifically provided herein, this
Amendment may not be assigned or transferred by any party hereto without the
express written consent of the remaining parties, which consent shall not be
unreasonably withheld; provided, however, that nothing herein shall be deemed to
restrict the ability of Landlord to assign the Lease in connection with a sale
of the property underlying the Premises.
12. Further Assurances. In addition to the obligations
required to be performed under the Lease, as amended hereby, Landlord and Lessee
shall perform such other acts, and shall execute, acknowledge and/or deliver
such other instruments, documents and other materials, as may be reasonably
required in order to accomplish the intent and purposes of the Lease, as hereby
amended.
13. Authority. Landlord and Lessee represents and warrants to
each other that it has the due power and authority to enter into this Amendment
and to be bound by the terms hereof.
14. Binding Effect. This Amendment shall be binding upon and
inure to the benefit of Landlord, Lessee, and their respective successors and
assigns.
15. Attorneys' Fees. Should any party initiate a legal
proceeding against any other party, including an arbitration, then the
prevailing party shall be entitled to receive reasonable attorneys' fees and
costs incurred in connection with such legal proceeding as determined by the
court or arbitrator, as the case may be.
16. Counterparts. This Amendment may be executed in any number
of counterparts, each of which shall be an original, but all of which shall
constitute one and the same instrument.
17. No Other Amendment. Except as modified by this
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<PAGE> 6
Amendment, the provisions of the Lease shall remain unaffected and in full force
and effect. To the extent that any terms or provisions of this Amendment are
inconsistent with any terms or provisions of the Lease, the terms and provisions
of this Amendment shall control.
IN WITNESS WHEREOF, this Amendment is executed as of the day
and year aforesaid.
LANDLORD: PLAZA INTERNATIONAL
By:_____________________________
Name:
Title:
LESSEE:
________________________________
SOL ZIDE
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<PAGE> 7
EXHIBIT A
Description of Additional Space
1. The premises located at 21851 Ventura Boulevard, Woodland
Hills, California, consisting of approximately 1,200 square feet.
2. The premises located at 21847 Ventura Boulevard, Woodland
Hills, California, consisting of approximately 600 square feet.
<PAGE> 8
EXHIBIT B
Option Agreement
See the Agreement attached hereto and incorporated herein by this
reference.
-8-
<PAGE> 9
EXHIBIT C
Additional Lease Modifications
See the initialed and marked copy of the Lease attached hereto and
incorporated herein by this reference.
-9-
<PAGE> 1
Exhibit 10.4
LANDLORD CONSENT AND AMENDMENT TO LEASE
THIS LANDLORD CONSENT AND AMENDMENT TO LEASE ("Consent") is made and
entered into as of the ____ day of _____________, 1996, by and among PLAZA
INTERNATIONAL ("Landlord"), and JERRY'S FAMOUS DELI, INC., a California
corporation ("JFD").
RECITALS
A. Sol Zide ("Lessee") is the lessee pursuant to that certain Lease --
Shopping Center Form (the "Lease"), dated as of August 31, 1993, as amended by
that certain Consent to Lease, dated ______________ ___, 1996 (the "Amendment"),
by and between Landlord and Lessee, pursuant to which Lessee leased from
Landlord commercial space commonly known as 21857 and 21845 Ventura Boulevard,
Woodland Hills, California (the "Original Premises"), as such Original Premises
are more particularly described in the Lease.
B. Pursuant to the Amendment, effective upon completion of the Sale
Transaction (as defined below), the Lease will be amended to include the
premises known as 21853 Ventura Boulevard, Woodland Hills, California (the
"Additional Premises"). The Additional Premises and the Original Premises
together consist of approximately 8,600 square feet and are sometimes
collectively referred to herein as the "Premises."
C. Lessee currently owns and operates a restaurant known as "Solley's"
on the Original Premises (the "Acquired Restaurant").
D. JFD is in the business of owning and operating 24-hour restaurants
("JFD Restaurants") under the name "Jerry's Famous Deli."
E. JFD and Lessee propose to enter into an Asset Purchase Agreement
(the "Asset Purchase Agreement") pursuant to which the Lessee will sell and
assign to JFD, and JFD will purchase from Lessee, the Acquired Restaurant,
including all of Lessee's right, title and interest in and to the Lease.
F. As a condition to the consummation of transactions contemplated by
the Asset Purchase Agreement (the "Sale
<PAGE> 2
Transaction"), JFD has requested and Landlord has agreed, to consent to the Sale
Transaction (including the assignment of the Lease to JFD) and, effective upon
consummation of the Sale Transaction, to modify the Lease in accordance with the
terms set forth below.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Consent to Assignment of Lease. Landlord hereby acknowledges and
consents to the assignment of the Lease to JFD by Lessee in connection with the
Sale Transaction.
2. Certifications of Landlord. Landlord hereby agrees and certifies to
JFD that:
a. No adjustment in percentage rental shall be made as a result
of JFD obtaining a full or partial liquor license for the Original Premises or
Additional Premises.
b. Complete copies of the Lease and all amendments, modifications
and supplements thereto are attached hereto and the Lease, as so amended,
modified and supplemented, is in full force and effect, and represents the
entire agreement between Lessee and Landlord with respect to the Premises. Other
than the Amendment, there are no amendments, modifications or supplements to the
Lease, whether oral or written, except as attached hereto.
c. Landlord has received no written notice of any default under
the Lease by Landlord, and (to Landlord's knowledge) Lessee has not assigned,
transferred or hypothecated the Lease or any interest therein or subleased all
or any portion of the Premises. Neither the Sale Transaction, the execution and
performance of this Consent, nor the operation of the Premises, or any portion
of the Premises, by JFD as contemplated by this Consent and the Lease violates
any Landlord covenants or other conditions imposed on Landlord pursuant to the
terms of any lease or other
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<PAGE> 3
agreement to which Landlord is a party.
d. Landlord has not received any notification from any federal,
state, or local governmental authority having jurisdiction over the Premises
asserting that any such violation exists.
3. Use of Premises. Landlord is familiar with the style, operations and
menus (a copy of which current menu is attached hereto and incorporated herein
as Exhibit A) of JFD Restaurants. Upon consummation of the Sale Transaction,
Landlord consents to the operation of the Premises (including the Additional
Premises) as a JFD Restaurant which shall include dining on-site as well as
catering, take-out and delivery services.
4. Alterations and Signage.
a. Subject to Landlord's approval of specific
construction/renovation plans to be provided by JFD, which approval shall not be
unreasonably withheld, and compliance by JFD with all applicable laws, rules and
regulations relating to such construction/renovation, Landlord hereby consents
to all construction and renovations to the Premises as JFD deems necessary or
appropriate for the Premises (including the Additional Premises) to be converted
into and operated as a JFD Restaurant. Such construction and alterations shall
include, without limitation, use and bordering (by means of railing, plants
and/or awning) of the public sidewalk adjoining the Premises on Ventura
Boulevard as an outdoor dining patio. Landlord agrees that no additional rent
will be payable to Landlord by JFD with respect to any such outdoor dining
patio.
b. Subject to Landlord's approval of specific signage plans to be
provided by JFD, which approval shall not be unreasonably withheld, Landlord
hereby consents to the installation of new signage on the Premises, including,
without limitation, the installation of new signage on the roof and front and
back entrances to the Premises as well as the installation of new awnings,
exterior signs, window and/or door signs, exterior lighting, restaurant seating
and/or decorations. Landlord further agrees that JFD shall have the right to
change its signage, without the consent of Landlord, in the event of a change in
the name of the restaurant operated on the Premises; provided, however, that
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<PAGE> 4
(i) such signage shall comply with all applicable laws, rules and regulations
and shall be no more prominent than the JFD Restaurant signage previously
approved by Landlord, and (ii) such signage shall not block the existing primary
sign for the shopping center of which the Premises are a part.
c. Notwithstanding anything to the contrary contained in the
Lease, Landlord acknowledges and agrees that JFD shall have the right to make
(i) any and all non-structural renovations and alterations to the interior of
the Premises deemed by JFD to be necessary or appropriate for it to operate its
business, and (ii) any power, sewer, mechanical and HVAC connections deemed by
JFD to be necessary or appropriate for it to operate its business; provided,
however, that (i) all such renovations, alterations and connections shall be
made in compliance with all applicable laws and regulations and shall not result
in any mechanics' or other liens on the Premises, and (ii) no such renovations,
alterations or connections shall disturb the structural integrity or exterior
motif of the shopping center of which the Premises are a part. In addition, JFD
agrees that any and all roof openings and penetrations shall be waterproofed at
JFD's cost and expense pursuant to Landlord's reasonable specifications. Any and
all additional equipment placed by JFD on the roof shall be placed, at JFD's
costs and expense, in a safe location on wood platforms (2"x 6" studs with 1/2"
plywood minimum) in accordance with Landlord's reasonable specifications
d. Landlord shall reasonably cooperate with JFD (which
cooperation shall include, without limitation, execution of any and all
applications, requests, consents, correspondence or other documents) in
connection with (i) any and all efforts by JFD to obtain all permits, licenses
and any approvals required to commence and complete the construction and
renovations referenced in subsections 4 a., b. and c. above, including, without
limitation, the bordering and use of the public sidewalk as an outdoor dining
patio, and (ii) any and all efforts by JFD to obtain a liquor license for the
premises or to acquire the rights to any existing liquor license for the
premises; provided, however, that any such construction and renovations shall
comply with all applicable laws, rules and regulations.
5. Hours of Business; Payment of Certain Additional Utility Costs.
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<PAGE> 5
a. Landlord hereby acknowledges and agrees that the business
hours for the JFD Restaurant to be operated on the Premises are anticipated to
be 24 hours a day, 7 days a week. Landlord shall reasonably cooperate with JFD
(which cooperation shall include, without limitation, execution of any and all
applications, requests, consents, correspondence or other documents) in
connection with any and all efforts by JFD to obtain a conditional use permit
and/or any other permits as are required or deemed by JFD to be reasonably
necessary in order to operate the Premises on a 24 hour a day, 7 days a week
basis.
b. Notwithstanding anything to the contrary contained in the
Lease or this Consent, JFD shall reimburse Landlord for the additional utility
costs, if any, incurred by Landlord as a result of the provision of exterior
lighting resulting from the operation of the Premises on a 24 hour a day basis.
The measurement of the additional charge shall be a percentage of the total
utility charge based on the additional wattage used at the applicable electric
meter after JFD takes occupancy of the premises compared to the same period in
the prior year measured as follows. The amount of such charge to JFD (the
"Additional Utility Charge") shall equal the total utility costs incurred by the
Landlord during a given billing period with respect to the exterior lighting for
the Premises as measured by readings from (and corresponding bills for) the "F
Building" utility meter during such period; multiplied by a fraction (the
"Fraction"). The numerator of the Fraction is the difference between (i) the "F
Building" meter aggregate bills during the one year period commencing on the
first day of the first utility billing period for the meter after which JFD
begins operating a JFD Restaurant on the premises (the "Commencement Date"), and
(ii) the denominator of the Fraction shall be the "F Building" meter aggregate
bills during the same one year period prior to the first day of the month in
which the Sale Transaction is completed. The Additional Utility Charge for the
first year following the Commencement Date shall be payable by JFD within 30
days following the date on which Landlord provides written description of the
initial calculation of the Additional Utility Charge for such year and copies of
the F Building meter bills; thereafter, the Additional Utility Charge shall be
payable by JFD periodically (but not more often than monthly) within thirty (30)
days after receipt from the Landlord of a copy of the applicable utility bills.
-5-
<PAGE> 6
c. Notwithstanding anything to the contrary in this Section 5,
Landlord acknowledges and consents to the closure of the Premises, in the sole
discretion of JFD, for (i) Yom Kippur and other traditional Jewish holidays as
well as for any holidays recognized by the State of California or federal
government for their respective employees, and/or (ii) a period of up to 90 days
in connection with the alterations of the Premises discussed in Section 4 of
this Consent. The provisions of the second paragraph of Article 25 of the Lease
shall not apply to any closure of the Premises pursuant to this Section 5 c.
6. Damage and Destruction of Premises. Article 19 of the Lease is
hereby amended to provide that in the event that Landlord fails to complete any
structural repairs to the Premises which materially interfere with JFD's use of
the Premises within ninety (90) days of the earlier of the date of JFD's notice
of the need for such repairs or the commencement of such repairs, JFD shall have
the right but not the obligation to make the structural repairs without the
consent of the Landlord and offset the costs of such repairs against payment due
from JFD to Landlord under the Lease.
7. Real Estate Taxes. Real estate taxes shall be paid as provided in
Article 5 of the Lease, currently at a rate of $1,015.00 per month inclusive of
the Additional Premises; provided, however, that JFD shall be responsible for
paying any increase in real estate taxes resulting directly from tenant
improvements made by JFD.
8. Landlord Covenant. Landlord agrees for itself, its agents,
successors and assigns that during the term or any extended term of the Lease,
it will not, to the extent permissible under applicable law, permit lease or
allow any portion of the shopping center of which the Premises are a part to be
used (either by itself or by any other tenant, directly or indirectly) for a
delicatessen-style restaurant. Should any valid federal, state or local law or
formal determination of any administrative agency of competent jurisdiction
affect this covenant, the covenant shall be automatically conformed to the law
and otherwise this covenant and the other provisions of the Lease shall continue
in full force and effect.
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<PAGE> 7
9. JFD Covenant. Notwithstanding anything to the contrary contained in
Article 29 of the Lease, nothing in such Article 29 shall be deemed to preclude
JFD from acquiring one or more stores or businesses located within the shopping
center of which the Premises are a part.
10. Miscellaneous Payments. Landlord and JFD hereby agree that an
assignment fee of $53,387.64 required by Article 43 (first numbered paragraph)
of the Lease shall be paid by Lessee out of escrow simultaneously with the
closing of the Sale Transaction from the sale price otherwise payable to Lessee.
11. Effectiveness of Lease Consents. Any amendments to the terms and
provisions of the Lease provided for in this Consent shall be effective only
upon assignment of the Lease to JFD in connection with the Sale Transaction.
12. Assignment. Notwithstanding anything to the contrary contained in
this Consent or the Lease, JFD may, in its sole discretion, assign any or all of
its rights, duties and obligations pursuant to this Consent or the Lease to any
entity wholly or partially-owned, directly or indirectly by JFD. Except as
specifically provided herein, this Consent may not be assigned or transferred by
any party hereto without the express written consent of the remaining parties,
which consent shall not be unreasonably withheld; provided, however, that
nothing herein shall be deemed to restrict the ability of Landlord to assign the
Lease in connection with a sale of the property underlying the Premises.
13. Confidentiality. Landlord acknowledges that (i) the existence and
terms of this Consent, the Amendment and the Sale Transaction are confidential
and neither Landlord nor Lessee shall issue any press release or make any public
announcement or other public disclosure relating to the subject matter of this
Consent, the Amendment or the Sale Transaction without the prior written consent
of JFD, and (ii) JFD shall have the right, without the consent of Landlord or
Lessee and in any manner that JFD deems necessary or appropriate, to disclose
the existence and terms of this Consent, the Amendment and the Sale Transaction
in order to satisfy its disclosure obligations as a public corporation.
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<PAGE> 8
14. Further Assurances. In addition to the obligations required to be
performed under the Lease, as amended hereby, Landlord and JFD shall perform
such other acts, and shall execute, acknowledge and/or deliver such other
instruments, documents and other materials, as may be reasonably required in
order to accomplish the intent and purposes of the Lease, as hereby amended.
15. Authority. Landlord represents and warrants to JFD that it has the
due power and authority to enter into this Consent and to be bound by the terms
hereof.
16. Binding Effect. This Consent shall be binding upon and inure to the
benefit of Landlord and JFD and their respective successors and assigns.
17. Attorneys' Fees. Should any party initiate a legal proceeding
against any other party, including an arbitration, then the prevailing party
shall be entitled to receive reasonable attorneys' fees and costs incurred in
connection with such legal proceeding as determined by the court or arbitrator,
as the case may be.
18. Counterparts. This Consent may be executed in any number of
counterparts, each of which shall be an original, but all of which shall
constitute one and the same instrument.
19. No Other Consent. Except as modified by this Consent, the
provisions of the Lease shall remain unaffected and in full force and effect. To
the extent that any terms or provisions of this Consent are inconsistent with
any terms or provisions of the Lease, the terms and provisions of this Consent
shall control.
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<PAGE> 9
IN WITNESS WHEREOF, this Consent is executed as of the day and year
aforesaid.
LANDLORD: PLAZA INTERNATIONAL
By:_____________________________
Name:
Title:
JFD: JERRY'S FAMOUS DELI, INC.
By:_______________________________
Name:
Title:
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<PAGE> 10
EXHIBIT A
JFD Menu
See menu of "Jerry's Famous Deli" restaurants attached hereto and
incorporated herein by this reference.
<PAGE> 1
Exhibit 10.5
SHOPPING CENTER LEASE
LEASE SUMMARY
Date: 2 April 1984
-----------------------
Lesser: WRAM Development Company
------------------------
Address of Lessor: 5831 Wish Avenue
Encino, CA 91316
Lessee: SOLLEY'S INC.
-------------
Trade Name: SOLLEY'S
--------
Address of Lessee: 21857 Ventura Blvd.
Woodland Hills, CA 91367
Tel. 818-340-0810
Lease Term: Ten years plus two five year options. See Addendum #10
------------------------------------------------------
Lease Term Dates: See Addendum #17
----------------
Monthly Minimum Rent: $ See Addendum #12
------------------
Total Annual Rent: $ See Addendum #12
------------------
Percentage Rent: Six (6%) Percent
----------------
Permitted Uses: Restaurant, Delicatessen, Bakery, Beer and Wine,
------------------------------------------------
Catering, Takeout and Alcoholic Beverages.
------------------------------------------
Current Payments:
Security Deposit: $25,000.00 (See Addendum #11)
-----------------------------
First Month's Rent: $
--------------
Guarantor:
-----------------------------
Address of Guarantor:
-------------------------------------------------
Broker(s): None
----
Merchant's Association See paragraph 26 of lease
-------------------------
The foregoing Lease Summary provisions are an integral part of this Lease
and each reference in this Lease to any such provision shall be construed to
incorporate all of the terms provided under each such Lease Summary provision.
In the event of any conflict between any Lease Summary provision and the balance
of the Lease, the latter shall control.
<PAGE> 2
[WRAM DEVELOPMENT COMPANY LETTERHEAD]
(213) 450-9644
May 28, 1986
Mr. Sol Zide
Solley's Deli
4578 Van Nuys Blvd.,
Sherman Oaks, CA 91403
Dear Solley:
Your lease addendum calls for insertion on "Lease Summary" certain information.
For convenience we are providing the following to be attached to the lease.
Kindly sign below and return:
LEASE SUMMARY ATTACHMENT
Lease Term Dates (Addendum 17)
Start: April 1, 1985
End: March 31, 1995
Plus two five year options
Percentage share of Common Area and other allocated costs (Addendum 18)
Eighteen (18) Percent
Area occupied (Addendum 12)
First floor - 4906.94 square feet
Second floor - 483 square feet
Approved
Lessor: Lessee:
WRAM DEVELOPMENT COMPANY SOLLEY'S INC.
/s/ Arthur R. Grebler
- -------------------------- -----------------------------
Arthur R. Grebler
Date: 5-28- 1986 Date: 1986
-------------------- --------------------
<PAGE> 3
[WRAM DEVELOPMENT COMPANY LETTERHEAD]
(213) 450-9644
May 28, 1986
Mr. Sol Zide
Solley's Deli
4578 Van Nuys Blvd.,
Sherman Oaks, CA 91403
Dear Solley:
Your lease addendum calls for insertion on "Lease Summary" certain information.
For convenience we are providing the following to be attached to the lease.
Kindly sign below and return:
LEASE SUMMARY ATTACHMENT
Lease Term Dates (Addendum 17)
Start: April 1, 1985
End: March 31, 1995
Plus two five year options
Percentage share of Common Area and other allocated costs (Addendum 18)
Eighteen (18) Percent
Area occupied (Addendum 12)
First floor - 4906.94 square feet
Second floor - 483 square feet
Approved
Lessor: Lessee:
WRAM DEVELOPMENT COMPANY SOLLEY'S INC.
/s/ Arthur R. Grebler
- -------------------------- -----------------------------
Arthur R. Grebler
Date: 5-28- 1986 Date: 1986
-------------------- --------------------
<PAGE> 4
SHOPPING CENTER LEASE
THIS LEASE, executed this 2 day of April 1984, by and between WRAM
Development Company, hereinafter called "Lessor" and SOLLEY'S INC., hereinafter
called "Lessee".
WITNESSETH:
That for and in consideration of the covenants and agreements
hereinafter set forth to be kept and performed by Lessee, Lessor hereby leases
to Lessee and Lessee does hereby take, accept and hire from Lessor the leased
premises hereinafter described for the period, and at the rental, subject to,
and upon the terms and conditions herein set forth as follows:
1. LEASED PREMISES. The premises ("leased premises") leased
hereunder are located in the City of Sherman Oaks, County of Los Angeles, State
of California, and shall consist of the building space hatchmarked on the plan
attached hereto at Exhibit "A", said building space to be constructed as set
forth in Paragraph 25. The leased premises shall have a frontage of
approximately ________ feet (said measurement being from the center of
partition or outside dimension in the case of end space) and a depth of
approximately ________ feet (outside dimensions) or a total square footage of
approximately * square feet.
--------
It is expressly understood that the leased premises do not include
the roof or exterior face of walls (except store fronts), and the use of the
foregoing is expressly reserved to Lessor.
The leased premises, together with and including other property
owned, leased or optioned by Lessor referred to hereinafter and throughout this
Lease as the "shopping center" is now devoted to, or contemplated for
development as a shopping center. The shopping center both present and
proposed, is depicted on Exhibit "A" and is legally described in Exhibit "B",
both attached hereto and made a part hereof by this reference.
2. TERM. The term of this Lease shall be for a period of
approximately ten (10) years commencing on the earliest occurrence of either
the following dates ("commencement date"); (1) the date upon which Lessee opens
for business from the leased premises; or (2) November 1, 1984 whichever occurs
first in time. See Lease Summary.
In the event this Lease would expire on a day other than the last
day of a calendar month, the term shall extend to the end of the calendar month
during which the Lease would otherwise expire, and the rent shall be prorated
for that period. When the commencement date and expiration date have been
*See Addendum #12
and Lease Summary
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<PAGE> 5
established Lessee agrees to execute a memorandum thereof at the request of
Lessor.
3. PAYMENT OF RENT. Lessee hereby covenants and agrees to pay rent to
Lessor in the form of "fixed minimum rent", "percentage rent" and "additional
rent" all as hereinafter provided. The payment of all rents hereinafter set
forth shall begin on the commencement date. All rents shall be paid at the
office of Lessor. Time is of the essence in the payment of all forms of rent
payable hereunder.
4. RENT. Lessee shall pay to Lessor, as rental hereunder, the
aggregate of the following:
A. An annual fixed minimum rent of *
($ ) subject to adjustment as provided in Paragraph 5, payable in 12
equal monthly installments of ($ ) each payable in
advance of the first day of each month throughout the term. Should the term of
this Lease commence on a day other than the first day of a month, the first
monthly installment of fixed minimum rent shall be prorated on the basis of a
30 day month and shall be paid on the date the term commences.
B. Monthly percentage rent in an amount of which Six (6%) Percent
of gross sales (as defined in Paragraph 6) made during each month exceeds the
amount of the installment of fixed minimum rent for such month.
C. Additional rent (monthly or quarterly as Lessor shall
designate) for Lessee's share of the aggregate of the following: (1) Estimated
annual taxes and assessments as defined in Paragraph 11; (2) Estimated annual
premiums for insurance carried by Lessor pursuant to Paragraph 13; and (3)
Estimated common area charges as defined in Paragraph 12 incurred or to be
incurred in connection with the operation of the shopping center. It is
understood that the foregoing charges shall be paid in estimated amounts
determined periodically by Lessor. When the actual amounts of such charges are
determined, an appropriate lump sum adjustment shall be made between Lessor and
Lessee. (4) See Addendum #13.
5. ADJUSTMENT OF FIXED MINIMUM RENT. Fixed minimum rent shall be
increased, but in no event decreased, at the expiration of each year
("adjustment date") of the term of this Lease in accordance with the increase,
if any, in the cost of living. The fixed minimum rent, as so adjusted, shall be
paid in accordance with Paragraph 4.A. until the next adjustment date. See
Addendum #21.
The index for the adjustment date shall be the one reported in the
U.S. Department of Labor's most comprehensive official index then in use and
most nearly answering the foregoing description of the index to be used. If it
is calculated from a
*See Addendum #12
and Lease Summary -2-
<PAGE> 6
base different from the base period 1967=100, figures used for calculating the
adjustment shall first be converted under a formula supplied by the Bureau. If
the described index shall no longer be published, another index generally
recognized as authoritative shall be substituted by Lessor.
6. GROSS SALES AND RECORDS. The term "gross sales" as used in this
Lease, shall mean the total of the gross selling price of all merchandise or
services sold by Lessee, its subtenants, concessionaires and any other person
in or from the leased premises including, without limitation, (1) All sales
made in, or upon orders placed at, or completed by delivery in, through, or
from the leased premises; (2) All charges, including membership fees, made for
services rendered in or from or upon orders placed at the leased premises; and
(3) All sales and charges made in connection with business transacted in whole
or in part in, upon, or from the leased premises. Gross sales shall include
sales and charges made for cash, credit card or upon credit, or partly for
cash and partly for credit, without regard to whether or not collection is made
of the amounts for which credit is given, and shall also include; (4) Sales and
charges, whether made by Lessee or any other occupant or occupants of the
leased premises or some part or parts thereof; and (5) Sales made by means of
mechanical or other vending machines, in the leased premises. Each sale, charge
or business transaction upon installment or contract therefor shall be treated
as a gross sale for the full price or charge in the month during which such
charge or contract is made.
Gross sales shall exclude refunds for merchandise returned which were
previously included in gross sales; allowances or adjustments granted to
customers which were previously included in gross sales, sales and use taxes
and any other government imposed surcharges.
Lessee shall keep full and complete records and books of account
reflecting all sales or business transactions in or from the leased premises,
in order to enable Lessor to ascertain the percentage rent due hereunder.
Lessee shall install one or more recording cash registers on which all sales
including credit card sales in, on, or from the leased premises shall be
recorded and such cash register tapes shall be retained as part of the records.
Lessor, or its duly authorized representatives, shall have access thereto, at
reasonable times for the purpose of examining the same and, if Lessor elects,
of auditing the same, in the manner hereinafter provided. Lessee shall keep all
records at or near the leased premises for a period of not less than four (4)
years following the date on which Lessee submits its report of gross sales
based on such records.
Lessee shall prepare and deliver to Lessor within sixty (60) days after
the end of each calendar quarter at the place
-3-
<PAGE> 7
where rent is then required to be paid hereunder, a true written statement
signed by Lessee or Lessee's duly authorized officer or agent showing in such
form and detail as Lessor shall specify the elements and amounts of gross sales
made by Lessee during each calendar month or fraction thereof. Lessee shall pay
to Lessor the amount of percentage rent due annually within sixty (60) days
after the end of the year. In addition, Lessee shall further prepare and
deliver to Lessor on or before the sixtieth day following the end of each
calendar year during the term of this Lease and on or before the sixtieth day
after the end of the term of this Lease, an annual statement, prepared and
signed by a certified public accountant and signed by Lessee or Lessee's duly
authorized officer or representative showing in such detail as Lessor shall
specify the elements and amounts of gross sales made during the preceding
calendar year or fraction thereof.
If Lessee shall fail to prepare and deliver, within the time hereinabove
specified, any statement of gross sales required hereunder, Lessor may elect to
treat Lessee's failure as a breach of this Lease, entitling Lessor to terminate
this Lease or to exercise any other remedy provided for in Paragraph 17. In the
alternative or in any case in which Lessor questions the accuracy of any
statement submitted by Lessee, Lessor may, at any time within 4 years following
Lessee's failure to submit a statement or following the submittal of any
statement elect to conduct an audit of all books and records of Lessee including
without limitation, Lessee's bank accounts for the Sherman Oaks store only and
tax returns, which in any way pertain to or show gross sales. Such audit may be
conducted by Lessor or by any authorized representative. A statement prepared as
a result of such audit shall be conclusively binding on Lessee and, in addition
to all percentage rent, if any, shown to be due by such statement, Lessee shall
pay for the cost of the audit in any case where the amount of gross sales shown
by such audit is equal to or in excess of 102% of the amount shown by Lessee's
statement for the same period. In the event such sales exceed 110% of the amount
shown by Lessee's statement Lessor shall be entitled to declare same to be a
breach of this Lease, or in the alternate, to assess such additional amount as
percentage rental for the entire period back to the last audit or commencement
of the lease, at option of Lessor.
7. USE. Lessee shall occupy and use the leased premises only for the
operation of See "Lease Summary" and for no other purpose whatsoever without the
prior written consent of Lessor.
Lessee shall not:
A. Use or permit the leased premises to be used for any
purpose other than that set forth in this Paragraph and further covenants and
agrees to comply promptly with all statutes, ordinances, rules, orders or
regulations of any governmental
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<PAGE> 8
authority regulating the use or occupation of the leased premises.
B. Use or permit the use of the leased premises in any manner that
will tend to create a nuisance or disturb other tenants or occupants of the
shopping center or tend to injure the reputation of the shopping center.
C. Conduct or permit to be conducted in the leased premises any fire
sale, auction, bankruptcy sale, second-hand sale, going-out-of business sale or
other promotions or sales without Lessor's prior written consent, except for
periodic sales in the normal course of business.
D. Allow any activity to be conducted on the leased premises or store
any material on the leased premises which will increase premiums for or violate
the terms of any insurance policy maintained by or for the benefit of Lessor or
the shopping center. In no event shall any explosive, radioactive or dangerous
materials be stored at the leased premises.
E. Use or allow the premises to be used for sleeping quarters,
dwelling rooms or for any unlawful purpose on the leased premises without
Lessor's prior written consent.
F. Solicit business, distribute advertising, obstruct, place any
merchandise, vending or amusement machines on, or otherwise use in the conduct
of its business, any part of the common area of the shopping center, including
the sidewalks in front of the leased premises.
G. Erect or install any exterior signs or window or door signs,
advertising media or window or door lettering or placards, install any exterior
lighting or plumbing fixtures, shades or awnings; make any exterior decoration
or painting; build any fences, walls, barricades or other obstructions; or,
install any radio, television, phonograph, antennae, loud speakers, sound
amplifiers, flashing or revolving lights, or similar devices on the roof,
exterior walls or in the windows of the leased premises, or make any changes
to the store front without Lessor's prior written consent. Any signs, lights,
advertising material, loud speakers or anything installed by Lessee on the
leased premises which may be seen, heard or experienced outside the leased
premises must be designed or approved by Lessor. Lessee shall not display,
paint or place, or cause to be displayed, painted or placed any handbills,
bumper stickers, or other advertising devices on any vehicles parked in the
common area of the shopping center, nor shall Lessee distribute or cause to be
distributed in the shopping center any handbills or other advertising devices.
H. Interfere with any other tenant's use of the common area or cause
or permit any waste on the leased premises or in the shopping center.
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<PAGE> 9
I. Directly or indirectly own, operate or have any interest in
the ownership or operation of any business similar in character to that
conducted by Lessee in the leased premises within a radius of three (3) miles
from the leased premises.
Lessee Shall:
A. Warehouse, store and/or stock in the leased premises only
such goods, wares and merchandise as Lessee intends to offer for sale at retail
at, in, from or upon the leased premises. Lessee shall use for office, clerical
or other non-selling purposes only such space in the leased premises as is from
time to time reasonably required for Lessee's business in the leased premises.
B. Operate all of the leased premises during the entire term
of this lease with due diligence and efficiency so as to produce maximum gross
sales. Lessee shall provide sufficient sales personnel and carry at all times
in said premises, a stock of merchandise of size, character, and quality as
shall be reasonably designed to produce the maximum gross sales. Lessee shall
keep the leased premises open for business during all regular customary days
and hours as is reasonably determined by Lessor for such type of business in
the city or area in which the shopping center is located.
C. Install and maintain at all times, displays of merchandise
in the display windows, if any, of the demised premises. Lessee shall keep the
display windows and signs, if any, in the demised premises well lighted during
the hours from sundown to midnight unless prevented by causes beyond the control
of Lessee. In the event of breach by Lessee, of any of the conditions contained
in these Subparagraphs B and C, Lessor shall have, in addition to any and all
remedies herein provide, the right at its option to collect not only the fixed
minimum rent herein provided, but further rent at the rate of 1/30th of the
fixed minimum rent herein provided for each and every day that Lessee shall fail
to conduct its business as herein provided; said further rent shall be deemed to
be in lieu only of percentage rent as set forth in paragraph 4B, that might have
been earned during such period of the Lessee's failure to conduct its business
as herein provided.
D. Keep the leased premises, entrances thereto, walkways
adjacent thereto, loading platforms, service areas, garbage and refuse storage
areas free from obstruction and clean and neat, and arrange for the prompt and
frequent pickup of rubbish at such intervals as Lessor may direct.
8. UTILITIES. Lessee agrees to pay before delinquency all charges
for gas, heat, sewer, power, electricity, telephone, storm drain, water service
and water meter charges and all other utility
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<PAGE> 10
charges including any hook up or connection fees or charges which may accrue
with respect to the leased premises during the term of this Lease whether the
same be charged or assessed at flat rates, measured by separate meters or
prorated by the utility company or Lessor. Lessor shall in no event be liable to
Lessee for any interruption in the service of any such utilities to the leased
premises, howsoever such interruption may be caused; and his Lease shall
continue in full force and effect despite any such interruptions.
9. REPAIRS. Lessee agrees that its acceptance of the leased premises
evidenced by Lessee's entry into possession therefore shall constitute
unqualified proof that the leased premises are, as of the commencement date of
the term, in a tenantable and good condition; that Lessee will take good care
therefore; and Lessee hereby waives the right to make repairs at Lessor's
expense under the provisions of Section 1941 and 1942 of the Civil Code of
California. Any partial destruction which Lessor is obligated to repair or may
repair under any of the provisions of Section 1932, Subdivision 2 and Section
1933, Subdivision 4 of the Civil Code of California are hereby waived by Lessee.
See Addendum #14.
Lessee covenants and agrees at Lessee's own cost and expense to keep the
leased premises, and each and every part thereof including without limitation,
all plumbing and electrical conduits, wiring, fixtures and pipes and all sewers,
floors, flooring, walls, lighting, store fronts, plate glass and glazing, air
conditioning and heating systems, ceilings and all other parts thereof in good
condition and repair at all times during the term hereof and to make promptly
any and all repairs, renewals and replacements which may at any time be
necessary or proper to put and keep the leased premises in good condition and
repair, and to keep the leased premises and all appurtenances thereto in a good,
clean, sale and wholesome condition at all times during said term. In the event
that the leased premises contain air conditioning, Lessee's said obligation
shall also include the retaining by Lessee of an air conditioning service
company approved by Lessor, to service and to maintain the air conditioning
equipment on a regular periodic inspection and service basis calling for
inspection and servicing not less frequently than once each quarter. Lessee
expressly agrees to pay promptly for any and all labor done or material
furnished for any work or repair, maintenance, improvements, alteration or
addition done by Lessee in connection with these items.
Notwithstanding the fact that some of the following items are not part
of the leased premises hereunder and shall be maintained by Lessor, Lessee shall
nevertheless reimburse Lessor for Lessee's * share of the cost of
-----
maintenance and repair thereof within ten (10) days following receipt of
Lessor's statement therefor; exterior trim, all underground and overhead
utilities and service lines and drops located outside the perimeter of the
leased premises, and painting or staining of exterior walls, trim or accessories
and roof at such intervals as Lessor shall reasonably determine and which work
shall be performed by Lessor.
* See Addendum #18
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<PAGE> 11
Lessee shall promptly notify Lessor in writing of the need for any of
the foregoing repairs to be performed by Lessor at Lessee's expense and Lessor
shall have the right to enter the leased premises at any time with men and
equipment as may be deemed necessary by Lessor to make such repairs. In no event
shall Lessor be liable to any person, including Lessee, its agents or employees
for any loss, damage (including water damage), theft, or destruction of or to
any merchandise, fixtures, money or other property belonging to any person as a
result of Lessor's failure promptly or correctly to perform any of the foregoing
repairs or occasioned by acts of Lessor or its agents or employees while making
such repairs. In no event shall Lessee be entitled to any offset, abatement or
reduction in rent during periods of such repair.
In the event Lessee fails or refuses to perform any repairs required of
it hereunder, in addition to all other remedies available hereunder or at law
for Lessee's default, Lessor may, but shall not be obligated to, enter the
leased premises, with men and equipment and perform such repairs on behalf and
at the expense of Lessee.
10. ALTERATIONS. Lessee shall not make any alterations, additions,
modifications, or changes ("alterations") to the leased premises without first
procuring Lessor's written consent. Lessor shall not unreasonably withhold
consent.
Any alterations to the leased premises or the building of which they are
a part which are required by reason of any present or future law, ordinance,
rule, regulation or order of any governmental authority having jurisdiction over
the leased premises or the shopping center or of any insurance company insuring
the leased premises, and regardless of whether or not such alteration pertains
to the nature, construction or structure of the building or to their use made
thereof by Lessee, shall be at the cost of Lessee regardless of whether the
work is performed by Lessor or Lessee. All alterations, to or upon the leased
premises, except removable trade fixtures, shall at once when made or installed
be deemed to have attached to the freehold and to have become the property of
Lessor at the option of Lessor. See Addendum #15.
11. TAXES AND ASSESSMENTS. Lessee shall be responsible for and shall pay
to Lessor all real property taxes, assessments (whether social or general),
fees, rental business tax, (the term "rental business tax" as used herein, shall
include any business tax imposed upon Lessor by the State of California, or any
political subdivision thereof, which is based upon or measured in whole or in
part by amounts charged or received by Lessor under this Lease, provided that
Lessee shall only pay the amount of such rental business tax that would be
payable by Lessor if the leased premises were the only property of Lessor) or
surcharges including without limitation any tax, excise on rent, or levy for
parking privileges or in any way relating to environmental protection, or any
other tax, levy, assessment or other charge of any nature
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<PAGE> 12
whatsoever imposed by any governmental authority having jurisdiction over the
shopping center and levied upon or payable in connection with the shopping
center, the leased premises, the operation thereof, or business conducted
therein including any such tax, fee or assessment levied or assessed in lieu of
such real property taxes (all of which are herein referred to as "taxes and
assessments"). If the leased premises are not separately assessed, Lessee shall
be responsible for * share of all taxes and assessments and other governmental
charges included in such tax bill. In the event said taxes and/or assessments
are not paid in accordance with Paragraph 4.C, Lessor may, in addition to all
other remedies permitted in this Lease, add an additional charge to the penalty
and interest that would have been due if Lessee had failed to make timely
payments directly to the tax collector.
Lessee shall pay, before delinquency, all property taxes and assessments
on the furniture, fixtures, equipment, merchandise and other property of Lessee
at any time situated or installed in the leased premises, and, in addition, on
improvements in the leased premises made or installed by Lessee subsequent to
the commencement date. If at any time during the term of this Lease any of the
foregoing are assessed as a part of the real property of which the leased
premises are a part, Lessee shall pay to Lessor upon demand the amount of such
additional taxes as may be levied against said real property by reason thereof.
For the purpose of determining said amount, figures supplied by the County
Assessor as to the amount so assessed shall be conclusive.
12. COMMON AREA. Lessor hereby grants to Lessee the non-exclusive right
in common with others during the term of this Lease to use the common area (as
hereinafter defined) of the shopping center for itself, its employees, agents,
customers, invitees, and licensees.
The common area shall be subject to the exclusive control and
management of Lessor or such other persons or nominees as Lessor may designate
to exercise such management or control, in whole or in part over the common
area, in Lessor's place and stead, and Lessor, and Lessor's nominees and
assignees shall have the right to establish, modify, amend and enforce
reasonable rules and regulations with respect to the common area. Lessee agrees
to abide by and conform with reasonable such rules and regulations to cause its
concessionaires, and its and their employees and agents, so to abide and
conform; and to use its best efforts cause its customers, invitees and licensees
so to abide and conform.
Lessor shall have the right to close temporarily, if necessary, all or
any portion of the common area to such extent as may in the opinion of Lessor's
counsel be necessary or desirable in order to prevent a dedication thereof or
the accrual of any rights of any person or of the public therein; to close
temporarily all or any
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<PAGE> 13
portion of the common area to discourage non-customer use; to use portions of
the common area while engaged in making additional improvements or repairs or
alterations to the shopping center and to do and perform such other acts in, to,
and with respect to the common areas as Lessor, in its sole judgment, shall
determine to be appropriate for the shopping center.
Lessor shall have the unqualified right to increase or reduce the common
area, and to rearrange the parking spaces, driveways and improvements on the
common area. Lessor shall not reduce the parking area unless required by
governmental order. At all times, the entrance to the restaurant shall not be
restricted without the consent of the Lessee.
Lessor shall have the sole right to place vending or amusement devices
and public telephones on the common area.
Lessee agrees that its officers, agents, employees, vendors, suppliers
and other independent contractors will use such access roads and will operate
trucks and trailers in delivering merchandise to and from the leased premises at
such days and hours upon and over such access roads as are designated therefore
by Lessor as a means of ingress to and egress from the leased premises. The use
of such access roads by Lessee and Lessee's officers, agents, employees,
vendors, suppliers and other independent contractors shall be subject to the
rules and regulations established by the Lessor with respect to the use thereof.
All automobiles, trucks and other vehicles of Lessee shall be parked
only where and as permitted by Lessor from time to time, and officers, agents
and employees of Lessee shall park their vehicles only in such places or in such
particular areas, if any, as designated by Lessor as employee parking area.
Lessee agrees that when and if requested by Lessor so to do, Lessee will furnish
Lessor with the license numbers of the vehicles of Lessee and other respective
officers, agents and employees.
If any vehicle of Lessee or any concessionaire or any of their
respective officers, agents or employees, is parked in any part of the shopping
center other than the employee parking areas, Lessee hereby authorizes Lessor to
engage a towing service to remove such vehicle at Lessee's expense, only after
appropriate notice to Lessee and/or the particular vehicle's registered owner.
As used herein, "common area" means all areas of the shopping center (as
the same may be expanded or decreased at Lessor's option) except those areas
which from time to time are designated by Lessor as being outside the common
area or are leased to or within the exclusive control of a tenant of the
shopping center. The common area includes, without limitation, the land and
facilities utilized for or as parking areas, access and perimeter roads, truck
passageways (which may be elevated or subsurface in whole or in part,) and
platforms therein (including notwithstanding anything herein contained, any such
platform as
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<PAGE> 14
is for the use of Lessee or concessionaire); service corridors and stairways
providing access from store premises to such platforms and truck passageways;
loading docks, landscaped areas, exterior walks, arcades and/or balconies;
directory equipment; wash rooms, comfort room, drinking fountain, toilets and
other public facilities, bus stations, taxi stands and the like; areas devoted
to or for maintenance purposes or equipment including management offices; and
any areas dedicated or belonging to the public or any governmental authority
which are contiguous or near to the shopping center and which are required to
be maintained by or the cost of maintenance required to be borne by Lessor.
Lessee shall pay to Lessor in the manner set forth in Paragraph 4.C.
Lessee's * share of all charges of any kind or nature incurred or paid by
---
Lessor in connection with the maintenance, repair, operation or ownership of the
common area, which charges shall include by not necessarily be limited to the
expense of the following:
Repair, replacement, and maintenance, surfacing, resurfacing, painting,
restriping, cleaning, sweeping, janitorial services, planting, and
landscaping, signs and markers, lighting and other utilities, parking control
and security guards and fire protection or detection service, all real property
and personal property taxes and assessments (as defined in Paragraph 11), levied
or assessed against the common area, premiums for all forms of insurance
described in Paragraph 13, covering the common area as well as Workmen's
Compensation Insurance and any other insurance carried by and deemed advisable
by Lessor, wages and salaries for personnel employed to operate the common
area, cost of machinery and equipment used for common area maintenance or
rental thereof, plus fifteen (15%) percent of all the foregoing charges to
cover Lessor's overhead so long as the costs are reasonable. Copies of all bills
over One Thousand Dollars ($1,000) shall be furnished to Lessee prior to
payment by Lessee to support charges paid by Lessor during the prior twelve
(12) month period.
13. INSURANCE. At all times during the term of this Lease, Lessor
shall maintain in full force and effect with insurance companies licensed to do
business in the State of California and otherwise satisfactory to Lessor in its
sole discretion one or more policies including the following coverages.
A. General public liability insurance against claims for
bodily injury, death or property damage occurring in or upon the common area
with limits of coverage of not less than $500,000 for death or injury to one
person, $1,000,000 for death or injury to more than one person in a common
accident or occurrence, and $50,000 for damage or injury to property. Lessor
may increase the foregoing limits if it deems such increases desirable to
protect Lessor and Lessee.
*See Addendum #18
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<PAGE> 15
B. Fire, extended coverage, vandalism, malicious mischief, earthquake,
fire rental and sprinkler leakage (if building contains sprinklers) insurance in
such form and with such covered perils as Lessor deems appropriate in its sole
discretion insuring the buildings and other improvements on the leased premises
in an amount equal to the full replacement value thereof. All proceeds shall
belong to and be the sole property of Lessor and Lessee hereby assigns to Lessor
or its nominee all of Lessee's right, title and interest thereto.
Lessee shall pay its * share of such premiums in the manner
provided in Paragraph 4. Lessor shall have the right to maintain blanket
policies with the foregoing limits provided that the amount of insurance premium
payable by Lessee hereunder shall be determined as the premium Lessee would have
been required to pay if Lessor had caused to be issued a separate policy of the
particular insurance on the leased premises in accordance with applicable tariff
rules and rates duly promulgated for same by the Insurance Service Bureau or any
successor insurance industry rating authority. Lessee shall be kept continuously
informed of the continuity of coverage and coverage requirements of Lessor's
lenders.
At all times during the term of this Lease, Lessee shall maintain in
full force and effect with insurance companies licensed to do business in the
State of California and otherwise satisfactory to Lessor in its sole discretion
one or more policies evidencing the following coverage:
1. General public liability and Workers' Compensation insurance
against claims for bodily injury, death or property damage occurring within the
leased premises with limits of coverage of not less than $500,000 for death or
injury to one person, $1,000,000 for death or injury to more than one person in
a common accident or occurrence and $50,000 for damage or injury to property.
Lessee shall increase the foregoing limits if Lessor deems such increase
desirable to protect Lessor and Lessee.
2. Plate glass insurance on the leased premises and policies of
fire insurance, including extended coverage and such other insurance as Lessor
may require, on all fixtures and equipment installed by Lessee and contents in
the leased premises, such insurance to be in an amount equal to 100% of the
insurable value thereof.
All proceeds of such property insurance shall be paid to Lessor and held
in trust to be used for the repair or replacement of the plate glass, fixtures,
equipment or contents so insured. A duplicate original of all such policies
shall be delivered to Lessor at least 15 days prior to the time such insurance
is first required to be carried by Lessee, and thereafter at least 15 days prior
to the expiration or cancellation of any such policy. In the event Lessee fails
at any time during the term
* See Addendum #18
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<PAGE> 16
of this Lease to obtain such insurance or to provide such evidence thereof,
Lessor shall have the right but not the duty to procure such insurance and
Lessee shall pay to Lessor the costs and expenses thereof as additional rent
when the next payment of fixed minimum rent is required to be made.
14. DAMAGE AND DESTRUCTION. In the event the leased premises, or
any part thereof, shall be damaged by any casualty, this Lease shall remain in
full force and effect, and Lessor shall repair such damage and put the leased
premises in good condition as rapidly as reasonably possible. Provided such
damage was not caused or contributed to by the act of negligence of Lessee, its
agents or employees, Lessee shall be entitled to an equitable abatement of the
fixed minimum rent during periods of such restoration, but Lessee shall remain
liable for other charges hereunder including, without limitation, percentage
rent.
Notwithstanding any other provision of this Paragraph 14 to the
contrary, if the leased premises shall be damaged, and such damage shall be to
the extent of more than fifty (50%) percent of the replacement value of the
leased premises at the time of such damage, then Lessor may at its election
upon notice to Lessee, within ninety (90) days after such damage, terminate
this Lease as of the date of such damage. See addendum #19.
In the event that fifty (50%) percent or more of the building
area or common area of the shopping center shall be damaged or destroyed by
casualty, notwithstanding that the leased premises may be unaffected by such
casualty, Lessor may terminate this Lease and the tenancy hereby created by
giving to Lessee written notice of Lessor's election so to do within the ninety
(90) days following the date of said occurrence. Rent shall be adjusted as of
the date of such termination. See Addendum #19.
15. EMINENT DOMAIN. If there is any taking of or damage to all or
any part of the leased premises or any interest therein because of the exercise
of the power of eminent domain, whether by condemnation proceedings or
otherwise, or any transfer of any part of the leased premises or any interest
therein made in avoidance of the exercise of the power of eminent domain (all
of the foregoing being hereinafter referred to as "taking") prior to or during
the term hereof, the rights and obligations of the Lessor and Lessee with
respect to such taking shall be as follows:
A. If there is a taking of all of the leased premises, this
Lease shall terminate as of the date of such taking.
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<PAGE> 17
B. If fifty (50%) percent or more of the ground floor area of the
leased premises shall be taken, or fifty (50%) percent of the land area
described in Exhibit "B" (as the same may be amended) shall be taken (regardless
of whether or not any part of the leased premises is taken) then, in that event,
Lessor shall be entitled to elect either to terminate this Lease or to rebuild
the remainder of the leased premises or the shopping center. Lessor shall give
written notice to Lessee of its election no later than ninety (90) days after
the date Lessor receives notice that possession or title to the portion of the
leased premises or shopping center taken has vested in the condemnor.
If this Lease is terminated in accordance with the provisions of
this Paragraph 15 such termination shall become effective as of the date
physical possession of the particular portion is taken or immediate possession
is ordered. The parties shall be released from all further liability hereunder.
If this Lease is not terminated as provided in this Paragraph 15, Lessor shall
restore the remainder of the improvements occupied by Lessee so far as
practicable to a complete unit of like quality, character, and condition as that
which existed immediately prior to the taking.
If this Lease is not terminated as provided in this Paragraph 15,
the annual fixed minimum rent only set forth in Article 4A for the remainder of
the term shall be reduced by the proportion which the number of square feet of
ground floor area of the leased premises taken bears to the total ground floor
area of the leased premises immediately before the taking.
The entire award or compensation in such proceedings, whether for a
total or partial taking or for diminution in the value of the leasehold or for
the fee shall belong to and be the property of Lessor, and Lessee hereby assigns
to Lessor all of Lessee's interest in any award.
16. ASSIGNMENT AND SUBLEASE. Lessee shall not assign this Lease or any
interest therein whether voluntarily, by operation of law, or otherwise and
shall not sublet the leased premises or any part thereof, except by written
permission and consent of Lessor being first had and obtained. Consent of Lessor
to any such assignment shall not be unreasonably withheld if: (1) At the time of
such assignment or transfer Lessee is not in default in the performance and
observance of any of the covenants and conditions of this Lease; (2) The
assignee or subtenant of Lessee shall expressly assume in writing all of
Lessee's obligations hereunder; (3) Lessee shall provide proof to Lessor that
the assignee or subtenant has a financial condition which is satisfactory to
Lessor and Lessor's lender and (4) The leased premises continue to be used
solely for the purpose set forth in Paragraph 7 and the assignee or subtenant
is, in Lessor's opinion, capable of operating such business. In connection
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<PAGE> 18
with any such assignment or sublease, Lessee or the assignee of Lessee shall
pay to lessor a fee of One Thousand Dollars ($1,000).
Any such subleasing or assignment, even with the approval of Lessor
shall not relieve Lessee from liability for payment of all forms of rental and
other charges herein provided or from the obligations to keep and be bound by
the terms, conditions and covenants of this Lease. The acceptance of rent from
any other person shall not be deemed to be a waiver of any of the provisions of
this Lease, or a consent to the assignment or subletting of the leased
premises. Consent to any assignment or subletting shall not be deemed a consent
to any future assignment or subletting. Any merger, consolidation or transfer
of corporate shares of Lessee, if Lessee is a corporation, so as to result in a
change in the present voting control of the Lessee by the person or persons
owning a majority of said corporate shares on the date of this Lease, shall
constitute an assignment and be subject to the conditions of this paragraph.
See Addendum #16.
17. LESSEE'S DEFAULT. The following shall be deemed to be acts of
default under this Lease.
A. Lessee shall fail, neglect or refuse to pay any installment
of fixed minimum rent, additional rent, percentage rent or any other charge
including, without limitation, penalty charges, required to be paid by Lessee
hereunder at the time and in the amount as herein provided, or pay any moneys
agreed by it to be paid promptly when and as the same shall become due and
payable under the terms hereof and such default shall continue for a period of
more than ten (10) days after notice thereof in writing given to Lessee by
Lessor.
B. Lessee shall fail, neglect or refuse to keep and perform
any of the other covenants, conditions, stipulations or agreements herein
contained and covenanted and agreed to be kept and performed by Lessee and such
default shall continue for a period of more than fifteen (15) days after notice
thereof in writing given to Lessee by Lessor; provided, however that if the
cause for giving such notice involves the making of repairs or other matters
reasonably requiring a longer period of time than the period of such notice.
Lessee shall be deemed to have complied with such notice if Lessee has
commenced and is diligently prosecuting compliance therewith.
C. Any attachment or levy of execution or similar seizure of
the leased premises or Lessee's merchandise, fixtures or other property at the
leased premises or any foreclosure, repossession, or sale under any chattel
mortgage, security agreement or conditional sales contract covering Lessee's
merchandise, fixtures or other property at the leased premises; or the filing
of any petition by or against Lessee under any
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<PAGE> 19
chapter of the Bankruptcy Act, or the adjudication of Lessee as a bankrupt or
insolvent; or the appointment of a receiver or trustee to take possession of all
or substantially all of the assets of Lessee or a general assignment by Lessee
for the benefit of creditors; or any other action taken or suffered by Lessee
under any State or Federal Insolvency or Bankruptcy Act and the continuation
thereof for more than 20 days.
In the event of an act of default by Lessee, Lessor may, at its option:
(1) Terminate Lessee's right to possession of the leased premises because of
such breach and recover from Lessee all damages allowed under Section 1951.2 of
the California Civil Code, including, without limitation, the worth at the time
of the award of the amount by which the unpaid rent for the balance of the term
after the time of award exceeds the amount of such rental loss that Lessee
proves could be reasonably avoided, or ; (2) Not terminate Lessee's right to
possession because of such breach, but continue this Lease in full force and
effect; and in that event (a) Lessor may enforce all rights and remedies under
this Lease, including the right to recover the rent and all other changes due
hereunder as such rent and other charges become due, and (b) Lessee may assign
its interest in this Lease with Lessor's prior written consent shall not be
unreasonably withheld in accordance with Paragraph 16.
In the event of any reentry, Lessor may remove all persons from the
leased premises and all property and any signs located in or about the leased
premises and place such property in storage in a public warehouse at the cost
and risk of Lessee.
No reentry or reletting of the leased premises of any nature served
under unlawful detainer action or the filing of any unlawful detainer or similar
action shall be construed as an election by Lessor to terminate this Lease
unless a written notice of such intention is given by Lessor to Lessee; and
notwithstanding any such reletting without such termination, Lessor may at any
time thereafter elect to terminate this Lease.
Except in the case of Lessor's willful misconduct, Lessee hereby waives
all claims or demands for damages that may be caused by Lessor in reentering
and taking possession of the leased premises as hereinabove provided and all
claims or demands for damages which may result from the destruction of or injury
to the leased premises and all claims or demands for damages or loss of property
belonging to Lessee or to any other person or firm that may be in or about the
leased premises at the time of such reentry.
Nothing contained in this Lease shall limit Lessor to the remedies set
forth in this Paragraph 17; and upon Lessee's default Lessor shall be entitled
to exercise any right or remedy then provided by law, including, but without
limitation, the right to obtain injunctive relief and the right to recover all
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<PAGE> 20
EXHIBIT "C"
-----------
Store is leased "as is" subject to guarantees, except for the following work
that Lessor shall do on Lessee's premises:
1. New standard acoustical tile ceiling, including water resistant tile as
required by code in kitchen area.
2. Complete all perimeter walls with gypsum board ready for paint (covering by
Lessee).
3. Complete all exterior walls in existing framework, including glass and
stucco (doors and finish hardware by Lessee).
4. Air conditioning and Heating (see note (a)).
5. Secure all required Building Department permits for initial installation
based on complete plans furnished by Lessee (permit fees, sewer and water
and other governmental charges by Lessee). All structural planning shall be
done by the Lessor and to include the placing of air conditioning, water
heater and compressors on the roof for the Lessee's requirements. Lessor to
pay the cost of structural changes. Lessee to pay for permits.
6. Remove separation wall between present June Ellen and present Hooper stores
and install supporting posts for beams as may be required.
7. Painting excluded.
All other work to complete approved plan and to conform to Los Angeles Building
Department and Health Department and other Governmental Agency requirements
shall be completed by Lessee at Lessee's sole expense.
Note: (a) Cost of air conditioning and heating shall be paid by Lessee and
shall be refunded to Lessee starting the 12th month of this lease by
deducting $250.00 from the monthly rental until the full sum
advanced has been returned or when the lease has been terminated,
whichever is first in time.
(b) Lessor shall complete all work required above in a timely and
quality manner after notification by Lessee that work is ready for
installation.
(c) The Lessor shall include all roof repairs after all penetrations
have been completed by the Lessee.
Lessor: Lessee:
WRAM Development Company SOLLEY's INC.
/s/ /s/
- ------------------------- -----------------------
Dated: 2 April 1984 Dated: 4-2-84
------------------ ----------------
<PAGE> 21
damages caused by Lessee's default in the performance of any of its obligations
under this Lease.
Neither this Lease nor any interest herein nor any estate created hereby
shall pass by operation of law under any State or Federal Insolvency or
Bankruptcy Act to any trustee, receiver, assignee for the benefit of creditors
or any other person whatsoever without the prior written consent of Lessor.
In computing damages or rental due under this Lease, the value of
percentage rent for any period shall be based upon the percentage rent earned
during the twelve month period prior to the termination of the Lease.
If any payment of rent or other payment is not paid when due, the Lessee
shall, as a penalty for such delinquency, pay to Lessor five (5%) percent of
amount due as a late charge if payment is not received within SEE ADDENDUM #20.
This provision shall not be construed to relieve Lessee from any default
hereunder arising through the failure on the part of Lessee to make any payment
at the time and in the manner specified, in addition any sum accruing to Lessor
under the terms and provisions of this Lease which shall not be paid when due
shall bear interest at the highest lawful rate from the date the same becomes
due and payable by the terms and provisions of this Lease until paid.
18. DEFAULT BY LESSOR. Lessor shall in no event be charged with default
in the performance of any of its obligations hereunder unless and until Lessor
shall have failed to perform such obligations within thirty (30) days (or such
additional time as is reasonably required to correct any such defaults) after
written notice by Lessee to Lessor properly specifying wherein Lessor has failed
to perform any such obligation. Notwithstanding any default by Lessor, Lessee
shall not have the right to exercise any remedy provided for herein or at law
unless and until Lessee shall have delivered a written notice to any lender
holding a trust deed against the leased premises or the shopping center or
portion thereof specifying wherein Lessor has failed to correct or remedy such
default, which such notice may not be delivered until after the expiration of
the period set forth herein for Lessor to remedy such default and shall grant to
the lender an additional equal period within which to cure such default. Lessor
to continuously inform Lessee of such lienholders.
19. SURRENDER OF PREMISES. At the expiration of the tenancy hereby
created, Lessee shall surrender the leased premises in the same condition as the
leased premises were in upon delivery of possession thereto under this Lease, in
addition to any alterations or additions which Lessor elects to keep pursuant to
Paragraph 10, reasonable wear and tear excepted, and shall surrender all keys
for the leased premises to Lessor at the place then fixed for the payment of
rent and shall inform
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<PAGE> 22
Lessor of all combinations on locks, safes and vaults, if any, in the leased
premises. No act or conduct of Lessor, except a written acknowledgement of
acceptance of surrender signed by Lessor, shall be deemed to be or constitute
an acceptance of the surrender of the leased premises by Lessee prior to the
expiration of the term of this lease.
If prior to the termination of this Lease or within fifteen (15) days
thereafter, Lessor elects, by written notice to Lessee, Lessee shall promptly
remove the additions, improvements, fixtures, trade fixtures and installations
which were placed in the leased premises by Lessee and which are designated in
said notice, and shall repair any damage occasioned by such removal; and in
default thereof Lessor may effect said removals and repairs at Lessee's
expense. The covenants of Lessee contained herein shall survive the expiration
or termination of the Lease term.
20. INDEMNIFICATION, RELEASE AND LIENS. Lessee agrees and this Lease is
made upon the express condition that Lessor shall not be liable, responsible,
or in any way accountable, to Lessee, Lessee's agents, employees, servants,
customers or invitees, or to any person whomever, for any loss, theft or
destruction of or damage (including but not limited to any damage caused by
rain storm or other water damage) to any goods, wares, merchandise, fixtures of
other property stored, kept, maintained, or displayed in, on or about the
leased premises, or in, on or about the facilities, the use of which Lessee may
have in conjunction with this Lease, nor for injury to or death of any person
or persons who may at any time be using, occupying or visiting the leased
premises or thereabouts regardless of the nature or cause of such injury,
damage or destruction including, without limitation, the negligence of Lessor.
Lessee agrees to indemnify, defend and hold harmless Lessor, its agents
and employees from and against any and all expense, liability and claims for
damage to or loss of property (including Lessee's property) or injury to or
death of persons (including Lessee, its agents, employees, visitors, or
invitees) directly or indirectly resulting from anything occurring from any
cause on or about the leased premises, in connection with the maintenance of
operation of Lessee's business, or Lessee's occupation or use of the leased
premises. Lessee shall discharge any judgement or compromise rendered against
or suffered by Lessor, as a result of anything indemnified against hereunder
and shall reimburse Lessor, for any and all costs, fees or expenses incurred or
paid by Lessor, (including, without limitation, reasonable attorneys' fees) in
connection with the defense of any action or claim.
Lessee shall keep the leased premises and any buildings located thereon
and all of the right, title and interest of Lessee and Lessor, therein free and
clear of all liens or claims
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<PAGE> 23
which may ripen into such a lien or encumbrance, and in the event Lessee fails
to do so, Lessor may pay such lien or encumbrance or claim, and on or before
the tenth (10th) day of the month following the month during which such payment
is made, Lessee shall pay to Lessor such sums so paid, plus such reasonable
costs and attorneys' fees as may have been incurred by Lessor; provided,
however that in the event Lessee in good faith disputes such lien or
encumbrance and with reasonable promptness furnishes an indemnity bond or such
undertaking in an amount sufficient either to procure the release of such lien
or encumbrance or to indemnify against the principal amounts thereof, together
with such costs of attorneys' fees as may be covered by said liens or
encumbrance, then the furnishing of such bond or undertaking shall be deemed
due compliance with the foregoing provisions.
21. SUBORDINATION AND FINANCING. This Lease shall in all respects
be junior and subordinate to any ground lease or other matters of record and
all of the provisions contained therein. In the event of any conflict between
the terms hereof and any of the foregoing, the provisions of the foregoing
shall prevail. Subject to the foregoing, and upon payment by Lessee of all of
the rents herein provided, and upon the observation and performance of all of
the covenants, terms and conditions on Lessee's part to be observed and
performed, Lessee shall quietly hold and enjoy the leased premises for the term
hereby leased without hindrance or interruption by Lessor or any other person
or persons lawfully or equitably claiming by, through or under Lessor, subject
nevertheless to the terms and conditions of this Lease.
Lessee covenants and agrees that upon written request of
Lessor, Lessee will make, execute, acknowledge and deliver any and all
instruments requested by Lessor which are necessary or proper to effect the
subordination of this Lease to any mortgage, deed of trust, indenture or other
encumbrance, and hereby irrevocably appoints Lessor as Lessee's
attorney-in-fact to make, execute, acknowledge and deliver any such instruments
in the name and on behalf of Lessee, or to subordinate any such mortgage, deed
of trust, indenture or other encumbrance, such person may elect to continue
this Lease in full force and effect in the same manner and with like effect as
if such person has been named as Lessor herein, and in the event of such
election, this Lease shall continue in full force and effect, as aforesaid, and
Lessee hereby attorns and agrees to attorn to such person.
At any time and from time to time, upon request in writing from
Lessor, Lessee agrees to execute, acknowledge and deliver to Lessor a statement
in writing certifying that this Lease is unmodified and in full force and
effect (or if there have been modifications that the same is in full force and
effect as modified and stating the modifications) and the dates to which fixed
minimum rent, additional rent, percentage rent and
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<PAGE> 24
other charges have been paid. It is understood and agreed that any such
statement may be relied upon by any prospective purchaser of the leasehold or
the mortgagee, beneficiary or grantee of any security or interest, or any
assignee of any thereof, under any mortgage or deed of trust now or hereafter
made covering any leasehold interest in the leased premises or the real property
covered by this Lease.
It is understood and agreed that Lessor may be required to obtain
financing in connection with the purchase, construction and/or operation of the
shopping center and the lender or lenders providing such financing may require
modifications or amendments to this Lease. In the event Lessee does not agree to
such amendments or modifications of this Lease, as may be required by such
lender or lenders as a condition to providing such financing, then in either of
these events Lessor may cancel this Lease on thirty (30) days written notice to
Lessee without liability to either party.
Lessee agrees to furnish such financial statements, balance sheets or
operating statements as may be required and which Lessor is authorized to use or
furnish to any lender or lenders. Any financial statements submitted to Lessor
by Lessee prior to or after execution of this Lease are warranted by Lessee to
be true and correct.
If during the term of this Lease, Lessor sells or otherwise severs its
entire interest in the leased premises of this Lease, or all of the shopping
center, then all rights and obligations of Lessee hereunder, shall remain in
full force and effect as though there had been no such sale or transfer. Upon
such transfer and conveyance Lessor shall be unconditionally absolved and
released of all obligations of Lessor accruing hereunder from the date of such
sale or transfer.
This Lease, or a short form thereof shall not be recorded without the
prior written consent of Lessor and if Lessor so requests, Lessee agrees to
execute and deliver a short form of this Lease for recordation.
22. ATTORNEY'S FEES. In case suit shall be brought for any breach of this
Lease including without limitation unlawful detainer of the leased premises or
for the recovery of any rent due under the provisions of this Lease, or because
of the breach of any covenant herein contained on the part of Lessee to be kept
or performed, the prevailing party shall be entitled to a reasonable attorney's
fee which shall be deemed to have accrued on the commencement of such action and
shall be paid whether or not such action is prosecuted to judgment. Arbitration
before American Arbitration Assoc. shall be used except for monies due Lessor
under Paragraphs 4 & 17 of Lease.
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<PAGE> 25
23. NOTICES. Whenever under this Lease a provision is made for any
demand, notice or declaration of any kind or where it is deemed desirable or
necessary by either party to give or serve any such notice, demand or
declaration to the other it shall be in writing delivered personally or by
certified mail with postage prepaid addressed to Lessee or to Lessor at the
address appearing opposite their signatures at the end of this Lease. Either
party may, by like notice, at any time and from time to time designate a
different address to which or a different person to whom or in care of whom
notices shall be sent. Notices delivered by mail shall be deemed delivered 48
hours after deposit thereof in a U.S. Mail Post Box located in California
postage prepaid and addressed as required herein. Lessee shall post in a
conspicuous place on the front of leased premises an emergency telephone number
where Lessee may be reached after business hours.
24. SECURITY DEPOSIT. Lessee, contemporaneously with the execution of
this Lease, has deposited with Lessor the sum of Twenty-five Thousand and
No/100 Dollars ($25,000,000), receipt of which is hereby acknowledged by
Lessor. Said deposit shall be held by Lessor, without interest, and deposited
with other funds of Lessor, as security for the faithful performance by Lessee
of all of the terms, covenants, and conditions of this Lease by Lessee to be
kept and performed during the term hereof.
In the event of the failure of Lessee to keep and perform any of the
terms, covenants and conditions of this Lease to be kept and performed by
Lessee then Lessor, at its option may, with or without terminating this Lease
appropriate and apply said entire deposit, or so much thereof as may be
necessary, to compensate Lessor for all loss or damage sustained or suffered by
Lessor due to such breach on the part of Lessee. Should the entire deposit or
any portion thereof be appropriated and applied by Lessor the payment of
overdue rent or other sums due and payable to Lessor by Lessee hereunder, then
Lessee shall, upon the written demand of Lessor, forthwith remit to Lessor in
cash an amount sufficient to restore said security to the original sum
deposited, and Lessee's failure to do so within ten (10) days after receipt of
such demand shall constitute a breach of this Lease. Should Lessee comply with
all of said terms, covenants and conditions and promptly pay all the rental
herein provided for as it falls due, and all other sums payable by Lessee to
Lessor hereunder, the deposit or so much thereof as may remain, shall be
returned in full to Lessee at the end of the term of this Lease, or upon the
earlier termination of this Lease. See Addendum #11.
25. CONSTRUCTION OF LEASED PREMISES. Lessor shall complete, at its
own expense, the work designated as "Lessor's Construction" on Exhibit "C"
attached hereto and made a part hereof. All other work of any character,
whether performed by Lessor or Lessee shall
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<PAGE> 26
be at Lessee's sole expense including, without limitation, work designated as
"Lessee's Construction" and "Lessor's Optional Construction" on Exhibit "C".
All work to be performed by either party shall be done in accordance with plans
and specifications to be approved by Lessor and in accordance with all
applicable building codes and regulations governing said construction and in
accordance with Exhibit "C" and same shall become the property of Lessor upon
termination of this Lease.
Upon execution of this Lease, Lessee will prepare by a designer at its
expense plans and specifications for the work designated as "Lessee's Work" and
"Lessor's Optional Work" and shall deliver a full set of plans to Lessor within
sixty (60) days after signing of this Lease. Lessor shall have the right to
approve, disapprove or require modification of said plans and specifications
which changes shall be made by Lessee and revised plans submitted promptly to
Lessor for approval. The foregoing procedure shall be followed until a
satisfactory set of plans and specifications have been prepared. Approval or
disapproval by Lessor or his representative shall be made within five (5) days
from date of receipt and said approval shall not be unreasonably withheld.
Lessor shall perform for Lessee such of "Lessor's Optional Work" as
Lessor elects to perform and Lessee shall perform the remainder thereof. In any
event, such work shall be at Lessee's sole expense. See Exhibit "C".
Any changes in the work described in Exhibit "C" or the plans and
specifications requested by Lessee or required by any governmental authority
shall be at Lessee's sole expense. Lessee shall pay Lessor any costs which
Lessee is required to pay pursuant to this article within five (5) days
following Lessor's periodic billings therefor.
In order to expedite the commencement of Lessee's business in the
leased premises, Lessee, upon receipt of notice from Lessor that Lessee may
enter to perform its work, may enter upon the leased premises for the purpose
of performing "Lessee's Work" and installing trade fixtures and furnishing
during the construction period; provided, however, that such activity on the
part of Lessee shall be done only in such manner as not to interfere with
Lessor's construction and Lessor shall not be liable to Lessee for damages to
or loss of such fixtures, equipment or furnishings. Lessee agrees to comply
with any union labor provisions of any Contractor's Agreement made with
Lessor. Lessee and Lessor agree to promptly after notice commence and
diligently prosecute the work to completion so that Lessee's business will be
ready to open as soon as possible. Time is of the essence.
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<PAGE> 27
26. MERCHANTS ASSOCIATION. Should a nonprofit corporation or
association comprised of at least seventy-five (75%) percent of the tenants,
excluding Security Bank and Allstate Insurance, at any time operating business
establishments in the shopping center be now or hereafter organized for the
purpose, among other things, of carrying out such common or general advertising
or promotional activities or programs for the shopping center and the various
business establishments operated therein as a majority of the members thereof
may deem proper and expedient, then at Lessor's request Lessee shall at its own
expense do all things necessary promptly to become, and throughout the term
hereof remain, an active member in good standing of such corporation or
association.
27. DEVELOPMENT OF SHOPPING CENTER. It is expressly understood and
agreed that Lessor may at its sole option and without Lessee's consent (1) (but
shall not be obligated to), develop that portion of the shopping center
situated outside of the area outlined in red on Exhibit "A"; (2) increase the
size of the shopping center by addition of contiguous property, or decrease
the size of the shopping center or modify Exhibit "A" by adding, deleting or
changing the building areas, common areas, parking layout, ingress or egress of
the shopping center. In any of which events, Lessor shall deliver to Lessee
revised Exhibits "A" and "B" which shall be substituted in and automatically
become part of this Lease; (3) Vary the plan, location or dimensions of the
leased premises at any time prior to the time Lessee commences its construction
pursuant to Paragraph 25, provided that the approximate size and general
location of the leased premises will not be changed without Lessee's consent,
and provided further that if a material change of location or dimensions of the
leased premises is requested by Lessor and Lessee does not consent to such
change then Lessor may, at its option, terminate this Lease; (4) Build
additional stories on any building or buildings in the shopping center and
construct double-deck, subterranean, or elevated parking facilities. Lessor
makes no warranty or representation whatever regarding the names of character
of businesses to be conducted or the size or location of any space to be
occupied by any tenant of the shopping center. The building use designation,
if any, set forth on Exhibit "A" is for convenience only, and is not to be
construed as a representation that the proposed building will be put to such
use; and Lessee does not rely on any such representation in entering into
this Lease.
28. MISCELLANEOUS. Lessor and its agents shall have free access to
the leased premises during all reasonable hours for the purpose of examining
the same and to ascertain if Lessee is in compliance with the terms of this
Lease, to exhibit the same to prospective purchasers or tenants pursuant to
this Lease and to post such notices as may be desirable or necessary in
Lessor's sole judgment.
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<PAGE> 28
As used in this Lease and whenever required by the context thereof, each
number, both singular or plural, shall include all numbers, and each gender
shall include all genders. Lessor and Lessee as used in this Lease or in any
other instrument referred to in or made a part of this Lease shall likewise
include both the singular and the plural, a corporation, co-partnership,
individual or person acting in any fiduciary capacity as executor,
administrator, trustee, or in any other representative capacity. All covenants
herein contained on the part of Lessee shall be joint and several.
All of the terms hereof shall apply to, run in favor of and shall be
binding upon and inure to the benefit of, as the case may require, the parties
hereto, and also their respective heirs, executors, administrators, personal
representatives and assigns and successors in interest, subject at all times
nevertheless to the provisions of Paragraph 16 of this Lease relating to
restrictions upon assignment or subletting this Lease or the leased premises.
One or more waivers of any covenant, term or condition of this Lease by
either party shall not be construed by the other party as a waiver of a
subsequent breach of the same or any other covenant, term or condition. The
consent or approval of either party to or of any act by the other party of a
nature requiring consent or approval shall not be deemed to waive or render
unnecessary consent to or approval of any subsequent act.
Nothing contained in this Lease shall be deemed or construed by the
parties hereto or by any third party to create the relationship of principal and
agent or of partnership or of joint venture or of any association whatsoever
between Lessor and Lessee, it being expressly understood and agreed that neither
the method of computation of rent nor any other provisions contained in this
Lease nor any act or acts of the parties hereto shall be deemed to create any
relationship between Lessor and Lessee other than the relationship of landlord
and tenant.
The laws of the State of California shall govern the validity,
construction, performance and enforcement of this Lease.
Each of the parties represents and warrants that it has engaged no
broker or finder and that no claims for brokerage commissions or finder's fees
will arise in connection with the execution of this lease and each of the
parties agrees to indemnify the other against, hold it harmless from, all
liabilities arising from any such claim (including, without limitation, the cost
of attorney's fees in connection therewith).
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<PAGE> 29
The submission of this Lease for examination does not
constitute a reservation of or option for the leased premises and this Lease
becomes effective as a Lease only upon execution thereof by Lessor and Lessee.
It is understood that there are no oral agreements between the
parties affecting this Lease and this Lease supersedes and cancels any and all
previous negotiations, arrangements, brochures, agreements, representations and
understandings, if any, between the parties hereto or displayed by Lessor to
Lessee with respect to the subject matter thereof and none thereof shall be
used to interpret or construe this Lease.
If a corporation executes this Lease as a Lessee, Lessee shall
promptly furnish Lessor certified corporate resolutions attesting to the
authority of the officers to execute the Lease on behalf of such corporation.
The Paragraph titles herein are for convenience only and do not
define, limit or construe the contents of such paragraphs.
Lessee hereby grants to Lessor such licenses or easements in,
under or over the leased premises or any portion or portions thereof as shall
be reasonably required for the installation or maintenance of mains, conduits,
pipes or other facilities to serve the shopping center or any part thereof,
including but not by way of limitation the premises of any occupant.
It is specifically understood and agreed that this Lease is
subject to conditions, covenants, restrictions, grants of easement and/or
restrictions and easement agreements and any master leases if Lessors are
master Lessors and not fee owners.
In the event the Lessee shall hold over the leased premises
after the expiration of the term hereof with the consent of the Lessor either
express or implied, such holding over shall be construed to be only a tenancy
from month-to-month, subject to all the covenants, conditions and obligations
hereof and the Lessee hereby agrees to pay the Lessor the same rentals provided
for by this Lease for such additional times as Lessee shall hold such property.
Attached and made part of this lease:
Addendum Dated 2 April 1984
-------------------
Exhibit A Plot Plan
Exhibit B Legal
<PAGE> 30
ADDENDUM
DATE: 2 APRIL 1984
Addendum to Lease dated 2 April 1984 between WRAM Development Company, as
Lessor, and SOLLEY'S INC., as Lessee.
1. Governmental and other reports made by Lessee now combine gross sales
reports for Lessee's two or more stores. Accountant for Lessee or
Lessee shall attach a signed statement to each such report submitted
to Lessor making a true allocation of gross sales for the Sherman Oaks
store only. Copies of reports shall be mailed concurrently to agency
requiring same and the Lessor.
2. If, prior to, or at any time during the term of this Lease, a law,
regulation, or rule is adopted by any governmental authority requiring
that monitoring equipment measuring air quality be installed in the
Shopping Center, Lessee shall pay to Lessor as additional rental upon
demand, its * % share of the cost, maintenance, and operating expense of
same. Lessee shall extend to Lessor reasonable rights of entry to the
premises for purposes of testing air quality as may be required. Lessee
acknowledges that Lessor may be required from time to time by
governmental authority to reduce the energy consumption of the Shopping
Center, to impose a parking or similar regulatory charge, to modify or
restrict the hours of operation of Lessee's business, to limit access to
the Shopping Center or to reduce the number of parking spaces available
for Lessee's customers and other limited actions all of which shall be
binding on Lessee if enacted or enforced by Lessor in accordance with
the requirements of a governmental authority. No such action on the
part of the Lessor shall be deemed to be a breach by Lessor of its
obligations under the lease. This section shall not in any way limit
any right given Lessor under any other section of this Lease.
3. It is understood and agreed that the terms of the Master Lease (under
which Lessor is designated as "Lessee" of the underlying ground"
provides for periodic reappraisal of the value of the land. The
reappraisal occurs within thirty (30) days after June 30, 1989 and
after 2004 and each fifteen years thereafter. If Lessor's rent is
increased as a result of such reappraisal or for any other reason,
Lessee's rent shall be increased by * % of such increase or Five
Hundred Dollars ($500) whichever is the lesser.
*See Addendum #18
<PAGE> 31
Addendum Page 2
4. Signs heating and air conditioning units and other fixed equipment
shall remain the property of the Lessor but maintained by Lessee.
5. Lessee shall, when in need of roof or other repairs, call
subcontractors approved by Lessor, to do required repairs. In
emergency call any available subcontractor of Lessee's choice.
6. If Lessee's usage of premises causes an increase in any of the
insurance policies carried by the Lessor, then the full amount of
said excess cost attributable to Lessee's usage shall be paid by
Lessee.
7. No roof penetration shall be made by Lessee or Lessee's agent, at any
time, without Lessor's express approval, except in the event of an
emergency. Any roof patch by Lessee or agent of Lessee shall be painted
white and guaranteed in writing for one year. Damage to any portion of
the roof by Lessee or Lessee's agent or due to Lessee's usage of the
premises shall be reported to Lessor in writing and shall be repaired
at Lessee's expense.
8. Any use of a walk-way in front of an individual store shall be for use
of pedestrians only. If Lessor grants Lessee the right to use same
this approval shall be subject to revocation upon twenty-four (24) hours
notice, at any time and for any reason.
9. Lessee shall cooperate with Lessor in any modification of the Center,
so long as it doesn't interfere with Lessee's operation.
10. Lessor hereby grants to Lessee two consecutive five (5) year options.
Lessee may exercise the first option by written notice to Lessor not
later than the last day of the ninth year of the initial term. Second
option shall require notice to Lessor not later than the last day of
the fourth year of first option. Failure to so notify Lessor shall
void these options. Rent for the extended term shall be not less than
the rent for the last month of the prior term plus any applicable CPI
and other increases to date of extension or five (5%) percent whichever
is the higher. Rent for the last month shall not include items 4B and
4C of Lease as a base of calculations.
11. Lease security deposit shall be reduced by One Thousand Dollars
($1,000) per month commencing the twelfth month of this lease until
it has been reduced to Ten Thousand Dollars ($10,000) or when the
lease has been terminated
<PAGE> 32
Addendum Page 3
whichever occurs first in time. Deposit shall be Ten Thousand Dollars
($10,000) on signing of this Lease, balance ten (10) days thereafter.
12. The area to be occupied by Lessee will be determined and the initial
rental will be adjusted based on a charge of $1.45 per square foot for
the ground floor area and a charge of $1.10 per square foot for the
second floor area.
13. Such other charges covered by addendum and approved by Lessor and
Lessee. (See Page 2 of Lease, Paragraph 4C(4).
14. Lessor shall guarantee roof and structure and all other work performed
under this Lease for one (1) year after occupancy and make all necessary
repairs to same during the year at no cost to Lessee.
15. Lessee may remove any kitchen equipment, counters, booths and other
items normally associated with a restaurant which are not permanently
affixed.
16. Lessee shall be relieved of liability under the lease if Lessor deems
the new Lessee to be qualified to operate the restaurant at a high
standard and has the financial capacity to do same and is otherwise
acceptable to the Lessor.
17. Lease term dates shall be inserted on Lease Summary when exact dates
have been determined. Lessor and Lessee shall initial such insertion.
18. Percentage share shall be inserted and initialled by the Lessor and
Lessee when exact square footage occupied has been determined.
19. If Lessee's premises are damaged or destroyed during the original term
or the first extension of this lease and the cost of this damage is
reimbursed to the Lessor by the Insurance Company then Lessor shall be
obligated to restore same to the extent of said reimbursement for said
damage or destruction. This section of the Addendum applied to
Paragraph 14 in its entirety.
20. Ten (10) days after notification in writing by Certified Mail to Sol
Zide or Abe Zide personally, or their successor.
<PAGE> 33
Addendum Page 4
21. The adjusted fixed minimum rent shall be determined on each adjustment
date by multiplying the fixed minimum rent set forth in Paragraph 4A of
this Lease by a fraction, the denominator of which is the average index
figure for the year ending the month immediately preceding the date of
the execution of this Lease as published by the U.S. Dept. of Labor,
Bureau of Labor Statistics, Consumers Price Index, Los Angeles/Long
Beach, All Items (1967-100) (the CPI) and the numerator of which is the
average CPI index for the year ending immediately preceding the month
during which the particular adjustment occurs for the second year. For
ensuing years, the fraction shall be the denominator being the
numerator of the just previous year and the numerator of which is the
average CPI index for the year ending immediately preceding the month
during which the particular adjustment occurs.
22. Lessor warrants there are no eminent domain proceedings now pending or
are contemplated in the future relating to subject shopping center.
23. Lessor hereby warrants and guarantees that a reciprocal parking
agreement between Hughes Market and Lessor will be kept in full force
and effect for the term of this Lease.
24. Lessee's rent to start on November 1, 1984 or 120 days after Lessor
completes all structural repairs (including removal of Hooper Camera
from premises) and turns over all leased premises.
Lessor: Lessee:
WRAM DEVELOPMENT CO. SOLLEY'S INC.
/s/ /s/
- ------------------------------ -------------------------------
Dated: 2 April 1984 Dated: 4-2-84
---------------------- -----------------------
<PAGE> 34
4-1-87
I will initial a lease change page 6 item "I" as follows:
"radius of two and one half miles (2 1/2) miles from the leased
premises" Dupar's location in Encino is acceptable
/s/ Arthur R. Grebler
-------------------------------
WRAM DEVELOPMENT CO.
<PAGE> 1
Exhibit 10.6
FIRST AMENDMENT TO SHOPPING CENTER LEASE
This First Amendment to Shopping Center Lease ("Amendment") is made and
entered into on this sixth day of March, 1992, by and between (1) ARTHUR R.
GREBLER doing business as WRAM DEVELOPMENT COMPANY ("Lessor") and (2) SOLLEY'S,
INC., a California corporation ("Lessee").
RECITALS
WHEREAS, on or about April 2, 1984, Lessor and Lessee entered into a
shopping center lease (the "Lease") for that certain premises located at 4578
Van Nuys Boulevard, Sherman Oaks, California 91403 (the "Deli");
WHEREAS, Lessor desires to lease to Lessee, and Lessee agrees to lease
from Lessor, subject to the terms and conditions of this Amendment, the
additional space located adjacent to the Deli, which consists of approximately
3,280 square feet and is commonly referred to as 4580 Van Nuys boulevard,
Sherman Oaks, California 91403 (the "Bakery") and is more particularly
described on Exhibit "A" attached hereto and incorporated herein by reference.
TERMS OF AGREEMENT
NOW, THEREFORE, in consideration of the foregoing Recitals, the terms
and conditions contained herein, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
1. Incorporation of Lease.
All defined terms used in the Lease shall have the same meaning
when used in this Amendment. In addition, all terms and conditions of the Lease
shall continue to apply to the Deli except as expressly modified herein.
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<PAGE> 2
2. Definition of Premises.
Effective as of the date of execution of this Amendment, the
Premises (as defined in the Lease) shall be expanded to include both the Deli
and the Bakery.
3. Lease Term.
So as to clarify any uncertainty that may exist, the term of the
Lease is and shall be for the period commencing November 1, 1984, through and
including October 31, 1994 (the "Initial Term").
4. Options to Extend the Term.
(a) Lessor hereby grants to Lessee two separate options to extend
the term of the Lease. The First Option period shall be for the period November
1, 1994, through October 31, 2004 (the "First Option"). The Second Option
period shall be for the period commencing November 1, 2004, through and
including June 30, 2014 (the "Second Option").
(b) Both the First Option and Second Option shall be exercisable
by Lessee by giving to Lessor written notice of Lessee's intent to exercise the
option not more than 12 months nor less than 6 months before the expiration of
the previous term (either upon expiration of the Initial Term or First Option
as the case may be).
(c) Lessee may exercise the options granted in this paragraph with
respect to either the Deli or the Bakery (in which event this Lease shall again
be amended to account for the reduction in size of the Premises) or both the
Deli and the Bakery.
5. Rent Payable for Bakery.
In addition to the rent payable for the Deli provided in the Lease,
Lessee shall pay to Lessor, as rental for the Bakery, the aggregate of the
following:
(a) An annual fixed minimum rent of $78,720.00 subject to
adjustment as provided in Paragraph 5 of the Lease payable in 12 equal monthly
installments of $6,560.00 each payable in advance on the first day of each month
throughout the Term, beginning on the Bakery Rent Commencement Date (as
hereinafter defined).
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<PAGE> 3
Should the Bakery Rent Commencement Date occur on a day other than the first
day of the month, the first monthly installment of fixed minimum rent for the
Bakery shall be prorated on a basis of a 30-day month and shall be paid on the
Bakery Rent Commencement Date.
(b) Monthly percentage rent as provided in Paragraphs 4B and 6 of
the Lease, except that the amount of percentage rent with respect to the
Bakery, shall be 8 percent of gross sales. Notwithstanding anything to the
contrary in the Lease (and specifically Paragraph 6 thereof), gross sales with
respect to the Bakery shall not include any sales for the transfer of any
merchandise by the Bakery to the Deli or to any other restaurants owned or
managed exclusively by Sol Zide provided said merchandise is not sold at
wholesale by the deli or other restaurants to third parties.
(c) Additional rent as provided in Paragraph 4C of the Lease,
except that Lessee's total aggregate share of such expenses with respect to the
Bakery shall be determined by dividing the square footage of the Bakery by the
total square footage of the shopping center. Based on information provided by
Lessor, this shall be 3280/31,606.55 or 10.37 percent.
(d) Fixed minimum rent with respect to the Bakery shall be
adjusted pursuant to the formula set forth in Paragraph 5 of the Lease.
As used herein, the term "Bakery Rent Commencement Date" shall mean (i) the
date when the Bakery first opens for business with the permission of all
governmental authorities and has retail customers who actually purchase bakery
items or (ii) 90 days after Lessor has provided the power to the Bakery as
herein required and 90 days has elapsed from the issuance of the building
permit, whichever shall first occur.
6. Prior Deli Improvements and Related Expenses by Lessee.
Lessor hereby acknowledges, approves and consents to the design of
any and all improvements made by Lessee to the Deli including, but not limited
to, the patio area outside the Deli. Lessee shall be responsible, at its sole
cost and expense, for complying with any and all governmental statutes,
ordinances, rules, and requirements (including obtaining all necessary permits)
in connection therewith.
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<PAGE> 4
7. Deli and Bakery Improvements.
-----------------------------
(a) As soon as possible after execution of this Amendment, Lessee, at
its sole cost and expense, shall have the final plans and specifications
(including electrical plans) for the modifications to the exterior of the Bakery
desired by Lessee, plus the installation of sufficient electric power to the
Bakery to meet Lessee's anticipated usage (the "Modification Improvements"),
prepared for approval by Lessor. Additionally, Lessor shall deliver the Bakery
to Lessee in broom-clean condition including, but not limited to, removal of the
tile, carpet, and linoleum floor (so that the entire floor is returned to its
original concrete condition except that Lessor shall not be responsible for any
patching of the concrete), removal of the metal gates covering the front windows
and back door, including the tracks for the gates, removal of the walls that
hide the retractable gates on both the south and west walls, removal of all
shelving, tables, counters, and the like on the north and west walls, removal of
the facade wall on the north and west portion of the Bakery so that the drywall
is removed, and removal of the mini blinds and all holders for the blinds.
Lessor shall not be responsible for drywall patching or structural removal.
Lessor shall provide sufficient additional power to the Premises to provide
Lessee with adequate power to operate all equipment utilized by the Bakery and
Deli. All of the items set forth herein shall be provided at Lessor's sole cost
and expense.
(b) For a period of five business days following receipt of the final
plans and specifications from Lessee, Lessor shall have the right to accept and
approve said final plans and specifications, as delivered, or to reject them.
Such right of rejection or approval by Lessor must be exercised reasonably.
Acceptance or rejection of said final plans and specifications shall be
signified by Lessor delivering to Lessee, within said five-business day period,
said final plans and specifications with each page marked "Approved" or
"Rejected," as the case may be, and signed by Lessor. If Lessor shall not have
delivered said final plans and specifications marked "Approved" or "Rejected,"
as the case may be, to Lessee within said period of time, Lessor shall be deemed
to have accepted them.
(c) If the final plans and specifications are approved by Lessor, then
Lessee shall, at its sole cost and expense (except to those expenses designated
herein to be paid by
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<PAGE> 5
Lessor), construct the Modification Improvements in accordance with the
approved plans and specifications and all applicable requirements of the
appropriate governmental authority.
(d) Lessee shall obtain the necessary building permits to construct the
Modification Improvements as soon as possible after they are approved, and
Lessor shall use its best efforts to complete construction of Lessor's portion
of the Modification Improvements on or before the date (the "Estimated
Completion Date").
(e) In the event Lessor's portion of the Modification Improvements are
not completed by the Estimated Completion Date, Lessor shall complete the
Modification Improvements as soon thereafter as is possible. Lessor shall not be
responsible to Lessee for any damages due to delays beyond Lessor's control.
(f) Lessor shall remove from the exterior of the Bakery all signs,
decals, insignias, and other items which refer to Music Plus, the prior tenant
in the Bakery.
(g) If Lessor fails to accept the final plans and specifications or if
Lessor rejects the final plans and specifications, Lessee shall have the right
to do the following:
(i) Within five business days of receipt of Lessor's
non-acceptance or rejection, terminate the portion of the Lease which relates to
the Bakery. In such event, Lessee shall have no obligation to pay any amounts to
Lessor for the Bakery;
(ii) Modify the plans and specifications so that they meet with
Lessor's approval. If after resubmission of the revised plans and specifications
to Lessor they are still not approved or are rejected, the provisions of this
Paragraph 7(h)(i) shall apply so as to afford Lessee the opportunity to
terminate the portion of the Lease which relates to the Bakery.
(h) To the extent all or any portion of the Premises, which is Lessor's
responsibility, does not meet with the applicable building code, ordinances or
any other rules, regulations, laws or statutes, Lessor agrees to do such work as
required, at Lessor's sole cost and expense, to bring the Premises into
compliance. Said work includes, but is not limited to, the "landing" or loading
area at the rear entrance to the Premises. Lessor also agrees to pay one-half
the cost to replace and properly secure the glass in the front of the Premises.
Lessee shall submit to Lessor the proposed changes and/or corrections to the
glass for Lessor's approval, which approval shall not be unreasonably withheld.
Lessee shall be
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<PAGE> 6
responsible for supervising the glass replacement and shall submit to Lessor a
copy of the invoice therefor. Lessor shall reimburse Lessee one-half the cost
thereof within 10 days of receipt of the invoice. Lessee shall deduct Lessor's
portion from the next payment of fixed minimum rent.
8. Damage and Destruction.
Paragraph 14 of the Lease is hereby supplemented as follows:
"Lessee shall carry business interruption insurance sufficient to
cover the rent and other charges arising under the Lease during any
period when Lessee is unable to fully operate the Deli and/or the
Bakery. Lessor shall at all times carry sufficient insurance to pay for
the replacement cost of the Premises, and Lessee shall carry sufficient
insurance to pay for the replacement cost of the equipment.
"Except as otherwise provided in this Amendment, if at any time
during the term of this Lease or any extended term or option granted
herein, the Premises is damaged or destroyed by any cause, Lessor shall
promptly repair, rebuild, or restore the Building in which the Premises
is located ("Building") to substantially the same condition as the
Building was delivered to Lessee at the commencement of this Amendment
(i.e., exclusive of Lessee fixtures and equipment) and shall be entitled
for that purpose to any and all insurance proceeds. Lessor shall have
the obligation to repair, rebuild, or restore the Building whether or
not the insurance proceeds paid to Lessor are sufficient to cover the
total cost of repair, restoration, or rebuilding. Lessor shall commence
repair, restoration, or rebuilding, as appropriate, as soon as
reasonably practical, but not later than 30 days after issuance of a
building permit, shall apply for the permit within 15 days of the
destruction, and shall cause construction to be completed as soon as
possible, but not later than 180 days after occurrence of the event
causing damage or destruction.
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<PAGE> 7
Lessor's obligation to commence and complete construction within the time
periods described in this section shall not be extended by the fact that Lessor
may not yet have been paid the insurance proceeds. In the event Lessor does not
commence or complete construction within the time periods described in this
section, Lessee shall have the right, but not the obligation, to terminate this
Lease by giving Lessor written notice within ten days after expiration of any
time period set forth herein, in addition to any other rights which Lessee may
have by law.
"Notwithstanding anything contained herein, Lessor shall have the right to
terminate this Lease and shall have no obligation to repair, restore, or rebuild
the Premises or Building under any of the following circumstances:
(a) Damage or destruction from a casualty when the damage or
destruction cannot reasonably be repaired, restored, or rebuilt within a period
of 180 days exclusive of any application, approval, or permit that may be
required;
(b) Damage or destruction from a casualty occurring during the last 24
months of any extended term of this Lease, unless Lessee has exercised an option
to extend the term of this Lease, and in such event within 24 months of the
expiration of the last extended term (Second Option). If Lessor elects to
terminate this Lease as herein provided, Lessor shall give written notice to
Lessee not later than 60 days after the occurrence of the casualty."
The second and third paragraphs of Section 14 of the Lease are hereby deleted,
are of no further force or effect, and are superceded by the terms contained
herein.
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<PAGE> 8
9. Eminent Domain.
The last paragraph of Article 15 of the Lease is deleted in its
entirety, which paragraph relates to the allocation of the award or
compensation in an eminent domain proceeding. In its place, the following is
substituted:
Allocation of Condemnation Award.
"In the event of such a condemnation of the whole or part
of the Premises or Bakery, Lessor shall have the unqualified
right to pursue its remedies against the condemnor for the full
value of Lessor's fees interest and other property interests in
and to the Premises and Bakery. Similarly, Lessee shall have the
unqualified right to pursue its remedies against the condemnor
for the full value of Lessee's leasehold interest and other
property in and to the Premises and Bakery. If the laws of the
State in which the Premises and Bakery are located allow or
require the recovery from the condemnor to be paid into a common
fund or to be paid to Lessor only and, if such recovery is so
paid into such common fund or to lessor only, then in that event,
the recovery so paid shall be apportioned between Lessor and
Lessee according to the value of their respective property
interests as they existed on the date of such condemnation.
The provisions of this Article shall survive any termination of
this Lease."
10. Use.
The first four lines of Paragraph 7 of the Lease shall be deleted,
and in its place, the following replacement language shall be added:
"Lessee shall occupy and use the leased premises only for the
operation of a restaurant, delicatessen, bakery, or for any other
purpose permitted by law provided said use does not compete with any
other use in the shopping center and does not adversely affect the
tenant mix
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<PAGE> 9
based upon an objective determination, and for no other purpose
whatsoever without the prior written consent of Lessor."
11. Prohibition Against Competition.
The following language shall be added as Paragraph 29 to the Lease:
"Lessor's Covenant.
"Lessor agrees for itself, its agents, successors, and assigns that
during the term or any extended term of this Lease, it will not permit,
lease, allow, or use (either by itself or any other tenant, directly or
indirectly, in any portion of the Shopping Center to be used during the
term of this Lease for a restaurant, delicatessen, or a Bakery that
would directly compete with Lessee's restaurant operations in the Deli
and Bakery. The foregoing covenants shall not apply, for example, to a
yogurt store or a pizza parlor, or other establishment that is not
substantially similar to and directly competing with Lessee, nor shall
any of the business done by the tenants existing on the date of this
Amendment be considered to compete with the business done by Lessee for
purposes of this paragraph. The covenants of Lessor contained herein
will continue only for so long as Lessee, its assignees, or subtenants,
operate the restaurant, delicatessen, and bakery businesses in the Deli
and Bakery."
12. Remedy for Breach.
The covenants of Lessor and Lessee contained in Paragraph 12 of
this Amendment are a material inducement for each party to enter into this
Lease and upon any breach by either party of said covenants, which breach is
not cured within 15 days after written notice thereof by the other party, said
latter party shall have the right to pursue all of its rights available at law
or in equity, including cancellation of this Lease, a suit for damages and/or a
suit for injunctive relief (it being understood that the enumeration of the
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<PAGE> 10
foregoing rights and remedies shall not preclude the exercise of any other
rights or remedies which might be available at law or in equity).
13. Incorporation Into Short Form of Lease.
The provisions of this Article shall be incorporated into a short form
of this Lease or restrictive covenant in recordable form by Lessee.
14. Modifications to Exhibits and Addenda.
(a) Exhibit "C" of the Lease, having been performed, is hereby deleted.
(b) Addendum Paragraph 3 of the Lease is hereby deleted and replaced
with the following:
"3. The terms of the Master Lease (under which Lessor is
designated as 'Lessee' of the underlying ground) provide for a periodic
reappraisal of the value of the land. The next reappraisal is scheduled
to occur within 30 days after June 30, 2004. If Lessor's rent is
increased as a result of such reappraisal or for any other reason,
Lessee's rent for the Deli shall be increased by Lessee's proportionate
share of such increase or $500.00, whichever is the lesser, and Lessee's
rent for the Bakery (to the extent it has not already been increased by
Lessee's occupation of the Bakery) shall be increased by Lessee's
proportionate share of such increase, which increase shall not exceed
10.4 percent of the fixed minimum rent on the date of execution of this
Agreement. It being the intent of the parties that the rent payable by
Lessee, as a result of its occupation of the space where the Bakery is
located, shall be apportioned such that the increase in the Bakery rent
will be in the same proportion that the Deli rent is increased based
upon the square footage that the Bakery bears to the entire square
footage of the Shopping Center."
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<PAGE> 11
(c) Addendum Paragraph 10 of the Lease is hereby deleted.
(d) Addendum Paragraph 12 of the Lease is inapplicable to
the Bakery.
(e) Addendum Paragraph 14 applies for one year after occupancy of
the Bakery. To the extent there are any roof repairs or structural repairs by
Lessor within one year after occupancy of the Bakery, no such costs or expenses
shall be the responsibility of Lessee, and Lessor may not pass through or
charge Lessee for these expenses as part of any expenses which Lessee is
obligated to pay under the Lease, including what are commonly referred to as
triple net expenses, except for charges incurred in connection with the repair
of leaks caused by the failure of Lessee to have the approved shopping center
roofer make any patch required after penetration of the roof by Lessee.
(f) Addendum Paragraph 17 is deleted and replaced with the
following:
"17. The term of this Lease with respect to the Deli
commenced on November 1, 1984, and shall expire on October 31, 1994, (the
"Expiration Date"). The term of the Lease with respect to the Bakery shall
commence upon execution hereof and shall expire on the Expiration Date."
(g) Addendum Paragraph 18 of the Lease is hereby deleted.
(h) Addendum Paragraph 19 of the Lease is hereby deleted and
replaced with the following:
"19. Notwithstanding anything to the contrary in Paragraph 14
of the Lease, if the Deli, the Bakery (exclusive of improvements installed by
Lessee) is/are damaged or destroyed (with regard to the extent thereof) at any
time prior to the last one year of the term of this Lease (unless Lessee has an
option to extend the term of the Lease and either has exercised same or does so
within ten days after such damages or destruction), then the Lessor shall
rebuild and restore the damaged or
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<PAGE> 12
destroyed portions of the Premises, and this Lease shall continue in
full force and effect."
(i) Addendum Paragraph 22 of the Lease is hereby deleted and
replaced with the following:
"22. Lessor has no knowledge of any eminent domain
proceedings pending or contemplated with respect to the Shopping
Center."
(j) Addendum Paragraph 23 of the Lease is hereby supplemented as
follows:
"Lessor shall perform all of its obligations under the
reciprocal parking agreement with Hughes Market and as to the Bakery
shall use its best efforts to keep the reciprocal parking agreement (or
any successor agreement thereto) in force during the term of this Lease,
as same may be extended. This shall not change any of Lessor's
obligations which are set forth in Addendum Paragraph 23 of the Lease."
(k) Addendum Paragraph 24 of the Lease is hereby deleted.
15. Reaffirmation and Warranty of Authority.
Except as expressly set forth herein, the Lease is hereby
reaffirmed and ratified by the parties in its entirety. Except as expressly set
forth herein, the use of the word "Premises" in the Lease shall refer to both
the Deli and the Bakery. Lessor and Lessee hereby warrant and represent that
each has the right, power, legal capacity, and authority to enter into and
perform each of the obligations specified under this Agreement, and that no
further approval or consent of any person, board of directors, or entities is
necessary for him to enter into and perform each of the obligations of Lessor
under this Amendment.
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<PAGE> 13
IN WITNESS WHEREOF, this Agreement has hereunto been duly executed by
the parties hereto the day and year first above-written.
"LESSOR"
WRAM DEVELOPMENT COMPANY
By: /S./ Arthur R. Grebler
------------------------------
Arthur R. Grebler
"LESSEE"
SOLLEY'S, INC.
A California Corporation
By: /s/ Sol Zide
------------------------------
Sol Zide, President
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<PAGE> 14
EXHIBIT "A"
[Diagram showing the locations of Solley's Deli and Solley's Bakery spaces at
the Sherman Oaks Center]
<PAGE> 1
Exhibit 10.7
LANDLORD CONSENT AND AMENDMENT TO LEASE
THIS LANDLORD CONSENT AND AMENDMENT TO LEASE ("Amendment") is made and
entered into as of the ____ day of May, 1996, by and among WRAM DEVELOPMENT
COMPANY, a California limited partnership ("Landlord"), SOLLEY'S, INC., a
California corporation ("Lessee"), and JERRY'S FAMOUS DELI, INC., a California
corporation ("JFD").
RECITALS
A. Lessee is the lessee pursuant to that certain Shopping Center Lease,
dated as of April 2, 1984, as amended by that certain First Amendment to
Shopping Center Lease (the "First Amendment"), dated March 6, 1992
(collectively, the "Lease"), by and between Landlord and Lessee, pursuant to
which Lessee leased from Landlord commercial space commonly known as 4578 Van
Nuys Boulevard, Sherman Oaks, California (the "Deli") and 4580 Van Nuys
Boulevard, Sherman Oaks, California (the "Bakery"), as such Deli and Bakery
(collectively, the "Premises") are more particularly described in the Lease.
B. Lessee currently owns and operates the Deli and Bakery under the
name "Solley's" on the Premises (the "Acquired Restaurant").
C. JFD is in the business of owning and operating 24-hour restaurants
("JFD Restaurants") under the name "Jerry's Famous Deli."
D. JFD and Lessee propose to enter into an Asset Purchase Agreement
(the "Asset Purchase Agreement") pursuant to which the Lessee will sell and
assign to JFD, and JFD will purchase from Lessee, Lessee's interest in the
Acquired Restaurant, including all of Lessee's right, title and interest in and
to the Lease.
E. As a condition to the consummation of transactions contemplated by
the Asset Purchase Agreement (the "Sale Transaction"), JFD has requested and
Landlord has agreed, to consent to the Sale Transaction (including the
assignment of the Lease to JFD) and, effective upon consummation of the Sale
<PAGE> 2
Transaction, to modify the Lease in accordance with the terms set forth below.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Consent to Assignment of Lease. Landlord hereby acknowledges and
consents to the assignment of the Lease to JFD by Lessee, contingent upon the
express assumption by JFD of all of Lessee's obligations under the Lease in
connection with the Sale Transaction and agrees to use its best efforts to
obtain any and all requisite ground lessor or other third party approvals to
such assignment.
2. Certifications of Landlord. Landlord hereby certifies to JFD that:
a. Pursuant to the Lease, Lessee has leased the Premises and has
paid to Landlord an original security deposit of $25,000 which has been reduced
to $10,000 in accordance with the terms of the Lease. The term of the Lease
commenced on November 1, 1984 and the original expiration date of the Lease was
October 31, 1994. Lessee has exercised an option to extend the expiration date
of the Lease to October 31, 2004 and has an option to extend the term of the
option for an additional ten years in accordance with the terms of the Lease.
The Deli consists of approximately 5,390 square feet of leased space. The
current minimum annual rental for the Deli is $142,269.72 against a percentage
rental of 6% of Lessee's gross sales, as set forth in the Lease. The Bakery
consists of approximately 3,280 square feet of leased space. The current minimum
annual rent for the Bakery is $81,252 against a percentage rental of 8%, as set
forth in the Lease. No adjustment in percentage rental shall be made as a result
of JFD obtaining a full or partial liquor license for the Deli and/or Bakery.
b. To Landlord's actual knowledge there are no breaches or
defaults and no conditions have occurred that, with the giving of notice or the
passage of time, or both, would constitute a breach or default, by Landlord or
by Lessee under the Lease or any ground lease of the Premises by Landlord.
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<PAGE> 3
c. Neither the Premises nor the shopping center
of which the Premises are a part (the "Shopping Center") are currently
encumbered by any material mortgage or security interests other than those
created by any ground lessor or the leasehold interests of tenants of the
Shopping Center.
d. JFD has received copies of and reviewed (i) the Parking Lot
Agreement, dated March 9, 1960, between Hughes Markets, Inc., Flora Masciotra
and WM. Grebler & Sons, (ii) a letter dated March 30, 1984, from Hughes Markets,
Inc. to Arthur Grebler, and (iii) a letter dated April 1, 1993 from Hughes
Markets, Inc. to Arthur Grebler.
3. Use of Premises. Landlord acknowledges and agrees as follows:
a. Landlord is familiar with the style, operations and menus (a
copy of which current menus are attached hereto and incorporated herein as
Exhibit A) of JFD Restaurants and acknowledges and agrees that JFD may modify
its menus periodically consistent with the broad style of menu attached as
Exhibit A. Upon consummation of the Sale Transaction, Landlord consents to the
operation of the Premises as a JFD Restaurant (which shall include dining
on-site as well as catering, take-out and delivery services), take-out market
and bakery for retail sales and supply of other JFD Restaurants. However, at
JFD's option, JFD may continue to operate under the name "Solley's" or a
combination of "Solley's" and the JFD trade name and with elements of either the
JFD or Solley's operations.
b. Notwithstanding anything to the contrary contained in the
Lease, Landlord consents to and shall approve and reasonably cooperate with any
reasonable attempts by JFD to (i) obtain and/or maintain a full or partial
liquor license for the JFD Restaurant to be operated on the Premises or (ii)
cause the transfer to JFD of any liquor license utilized by the Lessee in
connection with the operation of the Acquired Restaurant; provided, however,
that JFD shall promptly reimburse Landlord for all reasonable out-of-pocket
costs and expenses incurred by Landlord, including reasonable attorney's fees,
in providing such cooperation or approval.
4. Alterations.
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a. JFD agrees that it shall not make any alterations, additions,
modifications or signage changes to the Premises without first obtaining
Lessor's written approval of specific construction/renovation plans to be
provided to Landlord by JFD. Landlord will not unreasonably withhold or delay
its consent to any construction/renovation or signage plans that JFD may
reasonably request for the Premises to be converted into and operated as a JFD
Restaurant and bakery; provided, however that any such construction, renovations
and/or signage shall comply with all applicable government laws, rules and
regulations and will be done at JFD's sole cost and expense and that rent will
continue to be charged through any renovation period.
b. Both prior and subsequent to the closing of the Sale
Transaction, Landlord shall reasonably cooperate with JFD in connection with any
and all reasonable efforts by JFD to obtain all permits and approvals
(including, without limitation, any requisite approvals of the ground lessor
pursuant to any ground lease to which Landlord is a party) required to commence
and complete the construction and renovations approved by Landlord and
referenced in subsection 4 a.; provided, however that JFD shall promptly
reimburse Landlord for all reasonable out-of-pocket costs and expenses,
including reasonable attorney's fees, incurred by Landlord in providing such
cooperation or approval.
5. Hours of Business.
a. Landlord hereby acknowledges and agrees that the business
hours for the JFD Restaurant to be operated on the Premises may be 24 hours a
day, 7 days a week (but JFD shall be under no obligation to operate on such
basis). Landlord shall reasonably cooperate with JFD in connection with any and
all efforts by JFD to obtain a conditional use permit and/or any other permits
required in order to operate the Premises on a 24 hour a day, 7 days a week
basis; provided, however, that JFD shall promptly reimburse Landlord for all
reasonably out-of-pocket expenses (including reasonable attorney's fees)
incurred by Landlord in providing such cooperation or approval. Subject to the
foregoing, nothing herein shall be deemed to change, alter or amend the
affirmative covenant contained in Section 7(B) of the Lease relating to the
hours of operation of the Premises.
b. Notwithstanding anything to the contrary
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contained in the Lease, Landlord acknowledges and agrees that common area
charges payable by JFD under the Lease will not be increased in the event the
JFD operates the Premises as a 24 hours a day restaurant; provided, however,
that if JFD does operate the restaurant on a 24 hours a day basis, JFD will
arrange, at JFD's sole cost and expense, for (i) a security guard to be present
at the Premises during the hours in which the Shopping Center would otherwise be
closed, (ii) additional cleaning of the parking area and sidewalk as
necessitated by the additional hours of operation and (iii) any other costs
specifically and directly attributable to the 24 hour operation.
6. Adjustment for Inflation. Section 5 of the Lease is hereby amended
to provide that, notwithstanding anything to the contrary contained in the
Lease, any annual inflation adjustment to the Fixed Minimum Rent (during the
original term of the Lease or any extension thereof) shall be limited to a
maximum of five percent (5%) and a minimum of two percent (2%) of the then
current Fixed Minimum Rent; provided, however, that (i) no adjustments to the
Fixed Minimum Rent shall be made subsequent to the period ended October 31,
2009, and (ii) the combined Fixed Minimum Rent for the Deli and the Bakery,
considered as a whole, during the original term of the Lease or any extension
thereof shall not exceed $350,000 per year.
7. Real Estate Taxes. Section 11 of the Lease is hereby amended to
provide that JFD shall not be responsible for the payment of all or any portion
of any increase in taxes triggered as a result of the sale, refinancing, or
other change in ownership or assignment of all or any portion of Landlord's
leasehold or ownership interest in either the Premises or the buildings or
improvements of which the Premises are a part. Nothing herein shall prevent the
pass through of increases caused by other events or changes not specified herein
pursuant to the Lease.
8. Roof Repairs. Notwithstanding anything to the contrary contained in
the Lease, upon closing of the Sale Transaction, the Lease shall be amended to
provide that the Lessee shall be solely responsible for, and shall pay all costs
and expenses relating to, repair and maintenance of the roof of the Premises and
equipment maintained on the roof of the Premises (including, without limitation,
all heating, ventilating, air conditioning, exhaust systems, fans and ducts, and
sheet metal
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maintained on the roof of the Premises for use in connection with the operation
of the Premises) for the benefit of the Premises and that Landlord will not
charge JFD any portion of common area or other charges related to the expense of
repairing and maintaining any portion of the roof of the Shopping Center. The
remainder of the common area charges under Section 12 of the Lease are allocated
to Lessee on a pro rata basis equal to the proportion that the number of square
feet of gross floor area leased by Lessee (as stated in the Lease) bears to the
total square footage of the Shopping Center (as stated in the Lease).
9. Rent Payable for Bakery. Notwithstanding anything to the contrary
contained in the Lease (and specifically Section 6 thereof and Section 5 b. of
the First Amendment), gross sales with respect to the Bakery shall not include
any sales to or transfers of merchandise to the Deli or any other restaurant
locations which are listed on Exhibit B hereto.
10. Extension of Lease Term. Upon completion of the Sale Transaction
and the related assignment to and assumption of the Lease by JFD, JFD shall
automatically be deemed to have exercised the Second Option (as defined in
Section 4 of the First Amendment) with respect to both the Deli and the Bakery
and, as a result, the expiration date of the lease shall be automatically
extended to June 30, 2014 (which is the expiration date of the ground lease for
the Premises).
11. Prohibition Against Competition.
a. Notwithstanding anything to the contrary contained in the
Lease, the negative covenant contained in Section 7 I. of the Lease restricting
the ability of Lessee or its assigns to own, operate or have any interest in the
ownership or operation of similar businesses within three miles of the Premises
is deleted and of no further force and effect and Paragraph 29 of the Lease
shall be amended to read as follows:
"Covenants Regarding Competition. Lessor agrees for itself, its agents,
successors, and assigns that during the term or any extended term of
this Lease, it will not permit, lease, use (either by itself or any
other tenant), or allow to be used, directly or indirectly, any portion
of the Shopping
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Center to be used during the term of this Lease for a Jewish
delicatessen-style casual dining restaurant.
"Lessee agrees for itself, its agents, successors, and assigns that
during the term or any extended term of this Lease, that, aside from
any restaurants owned or operated by Lessee on the date of the closing
of the Sale Transaction, it will not own or operate another Jewish
delicatessen-style casual dining restaurant within 2.5 miles of the
Shopping Center; provided, however, any location listed on Exhibit B to
that certain Landlord Consent and Amendment to Lease, dated May __,
1996, which may be within the 2.5 miles is specifically exempted from
this restriction."
12. Subordination and Financing. The fourth full paragraph of Section
21 of the Lease pertaining to termination of the lease in connection with a
Landlord financing transaction, is hereby deleted and replaced with the
following:
"This Lease is subject and subordinate to all mortgages (a "Mortgage")
now or hereafter placed upon the property of which the leased premises
are a part (the "Property"), and all other encumbrances and matters of
public record applicable to such Property, including, without
limitation, any reciprocal easement or operating agreements, covenants,
conditions and restrictions, and Lessee shall not act or permit the
leased premises to be operated in violation thereof. If any foreclosure
or power of sale proceedings are instituted by any lender or a deed in
lieu is granted (or if any ground lease is terminated), Lessee agrees,
upon written request of any such lender or any purchaser at such
foreclosure sale, to attorn and pay rent to such party and to execute
and deliver any instruments necessary or appropriate to evidence or
effectuate such attornment. In the event of attornment, no lender shall
be : (i) liable for any act or omission of Lessor, or subject to any
offsets or defenses which Lessee might have against Lessor (prior to
such lender becoming lessor under such attornment), (ii) liable for any
security deposit or bound by any prepaid rent not actually received by
such lender, or (iii) bound
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by any future modification of this Lease not consented to by such
lender. Any lender may elect to make this Lease prior to the lien of
its Mortgage, and if the lender under any prior Mortgage shall require,
this Lease shall be prior to any subordinate Mortgage; such elections
shall be effective upon written notice to Lessee. Lessee agrees to give
any lender by certified mail, return receipt requested, a copy of any
notice of default served by Lessee upon Lessor; provided that prior to
such notice Lessee has been notified in writing (by way of service on
Lessee of a copy of an assignment of leases, or otherwise) of the name
and address of such lender. Lessee further agrees that if Lessor shall
have failed to cure such default within the time permitted Lessor for
cure under the Lease, any such lender whose address has been so
provided to Lessee shall have an additional period of 30 days in which
to cure (or such additional time as may be required due to causes
beyond such lender's control, including time to obtain possession of
the Property by power of sale or judicial action or deed in lieu of
foreclosure). The provisions of this Article shall be self operative;
however, Lessee shall execute such documentation as Lessor or any
lender may reasonably request from time to time in order to confirm the
matters set forth in this Paragraph in recordable form. To the extent
not expressly prohibited by applicable law, Lessee waives the
provisions of any applicable law now or hereafter adopted which may
give or purport to give Lessee any right or election to terminate or
otherwise adversely affect this Lease or Lessee's obligations hereunder
if such foreclosure or power of sale proceedings are initiated
prosecuted or completed."
13. Non-Disturbance Agreement. Landlord agrees that it will reasonably
cooperate with JFD and/or Solley's in any reasonable attempt by JFD or Solley's
to obtain a Non-Disturbance Agreement (in form and substance reasonably
satisfactory to Landlord, JFD and such lender or ground or master lessor) from
each lender having a security interest in the Premises or the property on which
all or any portion of the Premises are located as well as from each and every
ground or master lessor of the property on which all or any portion of the
Premises are located; provided, however, that JFD shall promptly reimburse
Landlord for all
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reasonable out-of-pocket costs and expenses incurred by Landlord, including
reasonable attorney's fees, in obtaining such Non-Disturbance Agreement.
14. Valet Parking. JFD agrees that, upon completion of the Sale
Transaction and assignment to and assumption of the Lease by JFD, JFD will
arrange for valet parking (directly or through a contractor, on a fee charged
basis) at the Premises to its customers and customers of other tenants of the
Shopping Center as needed at peak restaurant hours; provided, however, that (i)
in no event shall JFD be obligated to provide valet parking to customers of
other tenants of the Shopping Center in the event that it is not providing valet
parking to JFD customers, and (ii) JFD's obligation to provide valet parking
shall only be effective if, when and so long as Landlord makes arrangements (at
Landlord's sole cost and expense) to provide JFD access to sufficient parking
spaces in the parking lot behind the Premises or such other reasonable location,
in its reasonable discretion, deems to be adequate for valet parking purposes.
JFD shall pay rental for the spaces utilized for the valet parking, if
necessary, in a reasonable amount not to exceed $500 per month. Landlord shall
be named as an additional insured under JFD's general liability policy covering
the Premises for this activity. Notwithstanding anything to the contrary
contained in this Section 14, Landlord may cancel any financial obligations it
has with respect to any such valet parking arrangements if Landlord or JFD
determines that the costs to Landlord or JFD, as the case may be, of maintaining
such arrangements are excessive or if adequate parking is not available.
15. Effectiveness of Lease Amendments. Any amendments to the terms and
provisions of the Lease provided for in this Amendment shall be effective only
upon assignment of the Lease to and assumption of the Lease by JFD in connection
with the Sale Transaction.
16. Further Assurances. In addition to the obligations required to be
performed under the Lease, as amended hereby, Landlord, JFD and Lessee shall
perform such other acts, and shall execute, acknowledge and/or deliver such
other instruments, documents and other materials, as may be reasonably required
in order to accomplish the intent and purposes of the Lease, as hereby amended.
17. Authority. Each party hereto represents and
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warrants to the other parties that it has the due power and authority to enter
into this Amendment and to be bound by the terms hereof.
18. Binding Effect. This Amendment shall be binding upon and inure to
the benefit of Landlord, JFD, Lessee, and their respective approved successors
and assigns.
19. Attorneys' Fees. Should any party initiate a legal proceeding
against any other party, including an arbitration, then the prevailing party
shall be entitled to receive reasonable attorneys' fees and costs incurred in
connection with such legal proceeding.
20. Counterparts. This Amendment may be executed in any number of
counterparts, each of which shall be an original, but all of which shall
constitute one and the same instrument.
21. No Other Amendment. Except as modified by this Amendment, the
provisions of the Lease and all amendments thereto shall remain unaffected and
in full force and effect. To the extent that any terms or provisions of this
Amendment are specifically contradictory of any terms or provisions of the
Lease, the terms and provisions of this Amendment shall control.
IN WITNESS WHEREOF, this Amendment is executed as of the day and year
aforesaid.
LANDLORD: WRAM DEVELOPMENT COMPANY, a
California limited partnership
By:_____________________________
Arthur R. Grebler, General
Partner
JFD: JERRY'S FAMOUS DELI, INC.
By:_______________________________
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Name:
Title:
LESSEE: SOLLEY'S INC., a California
corporation
By:_________________________________
Sol Zide, President
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EXHIBIT A
JFD Menus
See menus of "Jerry's Famous Deli" restaurants attached hereto and
incorporated herein by this reference.
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EXHIBIT B
Excluded Locations
1. 12655 Ventura Boulevard, Studio City, California
2. 16650 Ventura Boulevard, Encino, California
3. 13181 Mindanao Way, Marina Del Rey, California
4. 8701 Beverly Boulevard, West Hollywood, California
5. 3210 Park Center Drive, Costa Mesa, California
6. Corner of Harmon Avenue and Paradise Road, Las Vegas, Nevada
7. 42 South Delacey Street, Pasadena, California
8. 10925 Weyburn Avenue, Los Angeles (Westwood), California
9. Del Amo Mall, Torrance, California
10. 21845, 21847, 21851, 21853, and 21857 Ventura Boulevard, Woodland
Hills, California
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