1
EXHIBIT 10.1
PRIVATE SECURITIES SUBSCRIPTION AGREEMENT
JERRY'S FAMOUS DELI, INC./YUCAIPA WATERTON DELI INVESTORS, L.L.C.
August 22, 1996
THIS PRIVATE SECURITIES SUBSCRIPTION AGREEMENT (hereinafter the
"Agreement") has been executed by the undersigned in connection with the sale
in a private placement pursuant to Section 4(2) of the Securities Act of 1933,
as amended (the "Securities Act"), of certain shares of convertible preferred
stock (hereinafter the "Preferred Shares"), convertible into shares of common
stock (hereinafter the "Common Shares" and, collectively with the Preferred
Shares, the "Shares") and warrants (the "Warrants" and, collectively with the
Shares, the "Securities") to purchase Common Shares, of Jerry's Famous Deli,
Inc., a California corporation (DELI), located at 12711 Ventura Boulevard,
Suite 400, Studio City, CA 91604 ("SELLER"), to Yucaipa Waterton Deli
Investors, L.L.C., a Delaware limited liability company, located at 10000 Santa
Monica Blvd, 5th Flr., Los Angeles, CA 90067 ("BUYER"). SELLER and BUYER
(hereinafter collectively the "parties") each hereby represents, warrants and
agrees as follows:
1. AGREEMENT TO SUBSCRIBE; PURCHASE PRICE
(i) SELLER and BUYER are executing and delivering this
Agreement in reliance upon the exemption from securities registration
afforded by Rule 506 under Regulation D ("Regulation D") as
promulgated by the United States Securities and Exchange Commission
under the Securities Act; and
(ii) BUYER hereby subscribes for Six Thousand (6,000)
Preferred Shares, at a purchase price of One Thousand Dollars ($1,000)
U.S. per share, said shares convertible into Common Shares in
accordance with the terms set forth in the Certificate of
Determination attached as Exhibit A to this Agreement, for an
aggregate purchase price of Six Million Dollars ($6,000,000) U.S.
payable in United States Dollars at the Closing, as defined in
Paragraph 4 hereof.
(iii) BUYER hereby subscribes for Warrants to purchase
Sixty Five Thousand (65,000) Common Shares in accordance with the
terms set forth in the form of Warrant attached as Exhibit B to this
Agreement, for an aggregate purchase price of One Hundred Dollars
($100.00) U.S., to be paid at the Closing.
(iv) BUYER shall pay the purchase price for the Preferred
Shares and the Warrants by delivering same day funds in United States
Dollars to
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Private Sec. Sub. Agreement: Jerry's Famous Deli, Inc./Yucaipa Waterton Deli
Investors, L.L.C. August 22, 1996 Page 2
an escrow agent or as otherwise agreed between the parties, to be
delivered to the order of SELLER upon delivery of the Shares.
2. BUYER'S REPRESENTATIONS AND AGREEMENTS
Buyer represents, warrants and agrees as follows:
(i) BUYER understands that the Securities have not been
registered under the Securities Act, or any other applicable
securities law, and, accordingly, none of the Securities may be
offered, sold, transferred, pledged, hypothecated or otherwise
disposed of unless registered pursuant to, or in a transaction exempt
from registration under, the Securities Act and any other applicable
securities law;
(ii) BUYER is an "accredited investor" within the meaning
of Rule 501(a)(1), (2), (3), or (7) of Regulation D (an "Accredited
Investor") that is acquiring the Securities either for its own account
or as a fiduciary or agent for one or more institutional accounts as
to which it exercises sole discretion, each of which is an Accredited
Investor. BUYER has such knowledge and experience in financial and
business matters that it is capable of evaluating the merits and risks
of an investment in the Securities. BUYER has had a reasonable
opportunity to ask questions of and receive answers from SELLER
concerning SELLER and the offering of the Securities. BUYER is not
subscribing for the Securities as a result of or pursuant to any
advertisement, article, notice, or other communication published in
any newspaper, magazine, or similar media or broadcast over television
or radio. BUYER is aware that it (or such institutional account) may
be required to bear the economic risk of an investment in the
Securities for an indefinite period, and it (or such institutional
account) is able to bear such risk for an indefinite period;
(iii) BUYER is acquiring the Securities for its own account
or for one or more institutional accounts as described in Paragraph
2(ii) hereof, in each case for investment purposes and not with a view
to, or for offer or sale in connection with, any distribution thereof
(subject to any requirement of law that the disposition of its
property or the property of such institutional account or accounts
remain within its or their control). BUYER agrees on its own behalf
and on behalf of any such institutional account for which it is
acquiring the Shares and/or the Warrants to offer, sell or otherwise
transfer any Securities only to Accredited Investors (subject to any
requirement of law that the disposition of its property or the
property of such institutional account or accounts remain within its
or their control) in conformity with the Securities Act and any other
applicable securities law and with the restrictions on transfer set
forth on the
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Private Sec. Sub. Agreement: Jerry's Famous Deli, Inc./Yucaipa Waterton Deli
Investors, L.L.C. August 22, 1996 Page 3
certificate(s) evidencing the Shares or the Warrants. BUYER
acknowledges that each certificate evidencing the Preferred Shares
shall bear a legend substantially to the effect of the foregoing
paragraphs 2(i) and 2(ii) and this paragraph 2(iii). Such legend
shall be in substantially the following form:
"THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT") AND MAY NOT BE
OFFERED OR SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE
DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM SUCH
REGISTRATION. THE HOLDER OF THIS CERTIFICATE IS THE BENEFICIARY OF
CERTAIN OBLIGATIONS OF THE COMPANY SET FORTH IN A PRIVATE SECURITIES
SUBSCRIPTION AGREEMENT BETWEEN THE COMPANY AND YUCAIPA WATERTON DELI
INVESTORS, L.L.C. DATED AUGUST 22, 1996. A COPY OF THE PORTION OF THE
AFORESAID SUBSCRIPTION AGREEMENT EVIDENCING SUCH OBLIGATIONS MAY BE
OBTAINED FROM THE COMPANY'S EXECUTIVE OFFICES."
Buyer further acknowledges that the Warrants shall bear a legend in
substantially the following form:
NO SALE, TRANSFER, PLEDGE OR OTHER DISPOSITION OF THIS WARRANT OR THE
SHARES PURCHASABLE HEREUNDER SHALL BE MADE EXCEPT PURSUANT TO
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR PURSUANT
TO AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE ISSUER THAT
REGISTRATION IS NOT REQUIRED. TRANSFER OF THIS WARRANT IS ALSO
RESTRICTED BY AN AGREEMENT DATED AUGUST 22, 1996. A COPY OF WHICH IS
AVAILABLE FROM THE ISSUER.
Upon conversion of the Preferred Shares or exercise of the
Warrants, SELLER shall issue a Common Stock certificate without such
legend to the holder of such shares if (a) such Shares are sold
pursuant to an effective registration statement under the Securities
Act or (b) such holder provides SELLER with an opinion of counsel
reasonably acceptable to SELLER to the effect that a public sale or a
transfer of such security may be made without registration under the
Securities Act or (c) such holder provides SELLER with reasonable
assurances that such security can be sold free of any volume
limitations pursuant to Rule 144 under the Securities Act (or a
successor thereto).
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Private Sec. Sub. Agreement: Jerry's Famous Deli, Inc./Yucaipa Waterton Deli
Investors, L.L.C. August 22, 1996 Page 4
(iv) BUYER acknowledges that SELLER or any transfer agent
of SELLER shall register the transfer or exchange of any of the
Securities only upon receipt of the certificate(s) evidencing such
Securities with the transfer notice set forth thereon appropriately
completed and upon receipt in writing from the transferee or the
recipient of such Securities in such transfer or exchange (as the case
may be) of a certificate setting forth the representations in
Paragraph 2 hereof;
(v) If BUYER is acquiring any Securities as fiduciary or
agent for one or more institutional accounts, BUYER represents that it
has sole investment discretion with respect to each such account and
that it has full power to make the foregoing acknowledgments,
representations and agreements on behalf of each such institutional
account;
(vi) BUYER acknowledges that SELLER and others will rely
upon the truth and accuracy of the foregoing acknowledgments,
representations and agreements and further agrees that if, prior to
the closing, any of such acknowledgments, representations and
agreements made by BUYER are no longer accurate, BUYER will promptly
notify SELLER;
(vii) BUYER has received all information necessary to make
an informed business decision with respect to an investment in the
Securities, including but not limited to SELLER'S latest Form 10-K,
all Forms 10-Q and 8-K filed thereafter, the Proxy Statement for its
latest fiscal year and the Prospectus of SELLER dated October 20,
1995, along with an update of the risk factors set forth in the
Prospectus, prepared by SELLER;
(viii) This Agreement has been duly authorized, validly
executed, and delivered on behalf of BUYER and is a valid and binding
agreement enforceable in accordance with its terms, subject to general
principles of equity and to bankruptcy or other laws affecting the
enforcement of creditors' rights generally; and
(ix) BUYER has not engaged and agrees not to engage in any
short sales of SELLER'S Common Stock prior to the date the Preferred
Shares have been converted, except to the extent that any such short
sale is fully covered by shares of common stock of the Company other
than the Common Shares purchased pursuant to this Agreement.
3. SELLER'S REPRESENTATIONS AND AGREEMENTS
SELLER represents, warrants and agrees as follows:
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Private Sec. Sub. Agreement: Jerry's Famous Deli, Inc./Yucaipa Waterton Deli
Investors, L.L.C. August 22, 1996 Page 5
(i) SELLER has not conducted any general solicitation or
general advertising (as defined in Regulation D) with respect to any
of the Securities;
(ii) The Securities, when issued and delivered will be
duly and validly authorized and issued, fully-paid and nonassessable,
free and clear of any liens, encumbrances, charges, or adverse claims
of any nature whatsoever, and will not subject the holders thereof to
personal liability by reason of being such holders. There are no
preemptive rights of any shareholder of SELLER with respect to the
Shares;
(iii) This Agreement has been duly authorized, validly
executed and delivered on behalf of SELLER and is a valid and binding
agreement in accordance with its terms, subject to general principles
of equity and to bankruptcy or other laws affecting the enforcement of
creditors' rights generally;
(iv) The execution and delivery of this Agreement and the
consummation of the issuance of the Securities and the transactions
contemplated by this Agreement do not and will not conflict with or
result in a breach by SELLER of any of the terms or provisions of, or
constitute a default under, the articles of incorporation (or charter)
or bylaws of SELLER, or any indenture, mortgage, deed of trust or
other material agreement or instrument to which SELLER is a party or
by which it or any of its properties or assets are bound, or any
existing applicable decree, judgment or order of any court, federal or
state regulatory body, administrative agency or other governmental
body having jurisdiction over SELLER or any of its properties or
assets;
(v) No authorization, approval or consent of or filing
with any federal, state or local governmental body of the United
States is legally required for the issuance and sale of the Securities
as contemplated by this Agreement;
(vi) The information provided by or on behalf of SELLER to
BUYER and referred to in Section 2(vii) of this Agreement does not
contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in
the light of the circumstance under which they are made, not
misleading. Since March 31, 1996, there has been no material adverse
development in the business, properties, operations, financial
condition or results of operations of SELLER, except as disclosed in
the documents referred to in Section 2(vii) hereof.
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Private Sec. Sub. Agreement: Jerry's Famous Deli, Inc./Yucaipa Waterton Deli
Investors, L.L.C. August 22, 1996 Page 6
(vii) SELLER will issue one or more certificates
representing the Preferred Shares in the name of BUYER in such
denominations to be specified by BUYER prior to closing. The
Preferred Shares will bear the restrictive legend specified in Section
2(iii) of this Agreement. Seller shall issue a single Warrant bearing
the restrictive legend specified in Section 2(iii) of this Agreement.
SELLER further warrants that no instructions other than these
instructions and stop transfer instructions to give effect to Section
2(i) hereof will be given to the transfer agent and also warrants that
the Securities shall otherwise be transferable on the books and
records of SELLER as and to the extent provided in this Agreement,
subject to compliance with Federal and State securities laws.
Following registration of the Common Shares, upon conversion of the
Preferred Shares or exercise of the Warrants, SELLER agrees to furnish
new instructions to the transfer agent advising it of registration and
instructing it to issue the Common Shares without a legend. Nothing
in this Section shall affect in any way BUYER'S obligations and
agreement to comply with all applicable securities laws upon resale of
the Securities.
4. CLOSING. Share certificates and Warrant certificates shall be
delivered to BUYER and the funds therefor shall be delivered to SELLER
on August 23, 1996 (the "Closing") or at such time to be mutually
agreed.
5. FIRST REFUSAL
In the event SELLER determines to offer common shares, or
securities convertible into common shares, to any party in a private
placement of SELLER'S securities, SELLER agrees to offer BUYER, on a
right of first refusal basis, the right to purchase any such
securities during the period ending ninety (90) days following the
Closing. SELLER shall offer such securities to BUYER on the same
terms as offered to any other potential purchaser, and BUYER shall
have five (5) business days during which it may elect to purchase such
securities. If BUYER does not elect to purchase such securities,
BUYER shall be deemed to have rejected the offer and SELLER shall be
free to complete the transaction with another party or parties on the
same terms offered to BUYER.
6. CONDITIONS TO CLOSING
(i) BUYER understands that SELLER'S obligation to sell
the Preferred Shares and the Warrants is conditioned upon delivery
into escrow or otherwise as agreed between BUYER and SELLER by BUYER
of the amounts set forth in Paragraph 1 hereof.
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Private Sec. Sub. Agreement: Jerry's Famous Deli, Inc./Yucaipa Waterton Deli
Investors, L.L.C. August 22, 1996 Page 7
(ii) SELLER understands that BUYER'S obligation to
purchase the Preferred Shares and the Warrants is conditioned upon
delivery of certificate(s) representing Preferred Shares as described
in Paragraph 1(ii) hereto and provision of an opinion of counsel
confirming the matters set out in Section 3(ii), (iii), (iv) and (v)
above.
(iii) SELLER understands that BUYER'S obligation to purchase
the Preferred Shares and the Warrants is conditioned upon SELLER and
BUYER entering into a Registration Rights Agreement substantially in
the form of Annex I hereto.
7. GOVERNING LAW; INTERPRETATION
This Agreement shall be governed by and interpreted in
accordance with the laws of the State of California without giving
effect to rules governing the conflict of laws. Facsimile signatures
of this agreement shall be binding on all parties hereto.
IN WITNESS WHEREOF, this Agreement was duly executed on the
date first written above.
Official Signatory of BUYER:
YUCAIPA WATERTON DELI INVESTORS, L.L.C.
WATERTON MANAGEMENT, L.L.C.,
MANAGING MEMBER
BY: KENNETH ABDALLA, MANAGING
MEMBER OF WATERTON MANAGEMENT
Official Signatory of SELLER:
JERRY'S FAMOUS DELI, INC.
ISAAC STARKMAN
CHAIRMAN AND CEO
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EXHIBIT A
CERTIFICATE OF DETERMINATION
9
EXHIBIT B
FORM OF WARRANT
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August 22, 1996
Via Facsimile
(818) 766-8315
Mr. Isaac Starkman
Chairman and CEO
Jerry's Famous Deli, Inc.
12711 Ventura Boulevard, Suite 400
Studio City, CA 91604
RE: CONFIRMATION OF PURCHASE AND CLOSING INSTRUCTIONS
Dear Ike:
This is to confirm the sale of Six Thousand (6,000) Shares of
Convertible Preferred Stock ("Preferred Shares") of Jerry's Famous Deli, Inc.
(DELI) ("Seller") and Warrants ("Warrants") to purchase Sixty Five Thousand
(65,000) Shares of common stock of Jerry's Famous Deli, Inc. to Yucaipa
Waterton Deli Investors, L.L.C. ("Buyer"), issued by Seller pursuant to Section
4(2) of the Securities Act of 1933, at a gross price of Six Million One Hundred
Dollars ($6,000,100) U.S. to Seller, pursuant to a Private Securities
Subscription Agreement between Seller and Buyer dated August 22, 1996.
Shoreline Pacific Institutional Finance, the Institutional Division of
Financial West Group ("Shoreline Pacific"), will be paid a commission of Six
Percent (6%), which will be deducted from that gross amount (as set forth
below), such that net proceeds to Seller will total Five Million Six Hundred
Forty Thousand Ninety Four Dollars ($5,640,094) U.S. The transaction is
scheduled to close on August 23, 1996 (the "Closing"). The Royal Bank of
Scotland plc, 600 Montgomery Street, San Francisco, CA 94111-2880, tel: (415)
788-4500, will act as escrow agent for this transaction (the "Escrow Agent").
The following outlines the closing information for this transaction.
FOR THIS TRANSACTION TO CLOSE, SELLER MUST:
1. Deliver to the Escrow Agent Six Thousand (6,000) Preferred Shares of
Jerry's Famous Deli, Inc., each Preferred Share representing One
Thousand Dollars ($1,000.00) U.S., in the form of Ten (10)
certificates each representing Six Hundred (600) Preferred Shares in
the name of Yucaipa Waterton Deli Investors, L.L.C., bearing
substantially the following legend: "The shares evidenced by this
certificate have not been registered under the Securities Act of 1933
(the "Act") and may not
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Seller's Confirmation: Jerry's Famous Deli, Inc./Yucaipa Waterton Deli
Investors, L.L.C. August 22, 1996 Page 2
be offered or sold, transferred, pledged, hypothecated or otherwise
disposed of except pursuant to an effective registration statement
under the Act or pursuant to an available exemption from such
registration. The holder of this certificate is the beneficiary of
certain obligations of the Company set forth in a private securities
subscription agreement between the Company and Yucaipa Waterton Deli
Investors, L.L.C. dated August 22, 1996. A copy of the portion of the
aforesaid subscription agreement evidencing such obligations may be
obtained from the Company's executive offices."
2. Deliver to the Escrow Agent a signed Common Stock Purchase Warrant
Certificate in the name of Yucaipa Waterton Deli Investors, L.L.C. to
purchase Sixty Five Thousand (65,000) shares of common stock of
Jerry's Famous Deli, Inc.;
3. Deliver to the Escrow Agent an opinion letter from Seller's securities
counsel stating that, among other things, upon issuance of the
Preferred Shares and the Common Shares issuable upon the conversion
thereof, such shares will be duly and validly authorized and issued,
fully-paid and nonassessable shares of Jerry's Famous Deli, Inc.
4. Deliver to Shoreline Pacific a signed Private Securities Subscription
Agreement and a signed Registration Rights Agreement;
5. Deliver to Shoreline Pacific a signed closing instructions/hold
harmless letter addressed to the Escrow Agent.
Items 4 and 5 should be faxed to the attention of Virginia Allen, at (415)
332-7808, with a hard copy sent via private overnight mail service. Item 5
should also be faxed directly to the Escrow Agent at (415) 781-8010.
BUYER HAS BEEN INSTRUCTED TO:
1. Wire funds to the Escrow Agent's escrow account for purchase of the
Preferred Shares and Warrants;
2. Deliver to Shoreline Pacific a signed Private Securities Subscription
Agreement and a signed Registration Rights Agreement;
3. Deliver to Shoreline Pacific and the Escrow Agent a signed closing
instructions/hold harmless letter addressed to the Escrow Agent.
THE ESCROW AGENT WILL:
1. Collect the funds from Buyer and the certificates from Seller;
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Seller's Confirmation: Jerry's Famous Deli, Inc./Yucaipa Waterton Deli
Investors, L.L.C. August 22, 1996 Page 3
2. Release funds in the amount of Five Million Six Hundred Forty Thousand
Ninety Four Dollars ($5,640,094) U.S. to Seller via wire transfer
pursuant to Seller's instructions and release the Preferred Share
certificates and Common Stock Purchase Warrant Certificate to Buyer
via private overnight mail service pursuant to Buyer's instructions,
once all material has been received.
You have instructed us that Seller's instructions for wiring funds
from the proceeds of this transaction are as follows:
Bank of America
Woodland Hills, California
ABA# 121-000-358
For further credit to: Jerry's Famous Deli, Inc.
Account # 14656-00915
3. Release to Shoreline Pacific Three Hundred Sixty Thousand Six Dollars
($360,006) U.S. pursuant to their instructions.
If these terms and timetable are acceptable to you, please confirm by signing
below and returning this letter to my office by fax, together with the private
securities subscription agreement and escrow agent closing instructions/hold
harmless letter.
Facsimile signatures of this agreement shall be binding on all parties hereto.
Sincerely,
/s/ HARLAN P. KLEIMAN
- --------------------------
Harlan P. Kleiman,
Executive Vice President
of Institutional Sales
AGREED AND ACCEPTED
JERRY'S FAMOUS DELI, INC.
/s/ ISAAC STARKMAN
- --------------------------
Isaac Starkman,
Chairman and CEO
13
[ SELLER'S LETTERHEAD ]
August 22, 1996
Mr. John MacGregor
Senior Vice President and Manager
The Royal Bank of Scotland plc
600 Montgomery Street
San Francisco, CA 94111-2880
Dear Mr. MacGregor:
We shall deliver to you no later than August 23, 1996 Six Thousand (6,000)
Shares of Convertible Preferred Stock of Jerry's Famous Deli, Inc. (DELI) in
the form of Ten (10) certificates each representing Six Hundred (600) Preferred
Shares in the name of Yucaipa Waterton Deli Investors, L.L.C., together with a
Common Stock Purchase Warrant Certificate in the name of Yucaipa Waterton Deli
Investors, L.L.C. for the purchase of Sixty Five Thousand (65,000) shares of
common stock of Jerry's Famous Deli, Inc.
Upon receipt of the funds from Yucaipa Waterton Deli Investors, L.L.C.
("Buyer") and other required documents, please release the certificates to
Buyer pursuant to Buyer's delivery instructions provided to you by Shoreline
Pacific Institutional Finance, the Institutional Division of Financial West
Group.
We understand that you are acting as escrow agent in this transaction and in no
other capacity. We agree that you will have no liability whatsoever for any
actions taken or not taken by you in connection with this transaction, unless
such actions or omissions result from your gross negligence or willful
misconduct.
We agree to indemnify you and hold you harmless against any loss, liability,
claim, or other damage arising from or in connection with this transaction
other than any loss, liability, claim or other damage resulting from your gross
negligence or willful misconduct.
We further agree that you are expressly authorized to and shall be protected in
relying on the genuineness of facsimile signatures on documents you receive in
this transaction.
Sincerely,
/s/ ISAAC STARKMAN
- -----------------------------
Isaac Starkman,
Chairman and CEO
14
August 22, 1996
Via Facsimile
(310) 789-7218
Mr. Kenneth Abdalla
Yucaipa Waterton Deli Investors, L.L.C.
10000 Santa Monica Blvd., 5th Floor
Los Angeles, CA 90067
RE: CONFIRMATION OF PURCHASE AND CLOSING INSTRUCTIONS
Dear Ken:
The following outlines the closing information for the transaction
between Yucaipa Waterton Deli Investors, L.L.C. ("Buyer") and Jerry's Famous
Deli, Inc. (DELI) ("Seller") involving the purchase of Six Thousand (6,000)
Shares of Convertible Preferred Stock of Jerry's Famous Deli, Inc. and warrants
to purchase Sixty Five Thousand (65,000) shares of common stock of Jerry's
Famous Deli, Inc., issued by Seller pursuant to Section 4(2) of the Securities
Act of 1933 (the "Preferred Shares"). The Royal Bank of Scotland plc, The
Pyramid, 600 Montgomery Street, San Francisco, CA 94111-2880, tel: (415)
788-4500, will act as escrow agent for this transaction (the "Escrow Agent").
FOR THIS TRANSACTION TO CLOSE, BUYER MUST:
1. Wire funds in the amount of Six Million One Hundred Dollars
($6,000,100) U.S. no later than August 23, 1996 to the Escrow Agent's
escrow account, identified immediately below. If any of the following
information is not included in the wire from Buyer's financial
institution, the Escrow Agent may be unable to identify the funds as
pertaining to this transaction:
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Buyer's Confirmation: Jerry's Famous Deli, Inc./Yucaipa Waterton Deli
Investors, L.L.C. August 22, 1996 Page 2
Wells Fargo Bank N.A.
San Francisco, CA
ABA #: 121000248
In favor of: The Royal Bank of Scotland plc
San Francisco Office
Account #: 4000-824581
For further credit: The Royal Bank of Scotland Escrow Account
Account #: 370000
Reference: Royal Bank of Scotland/Financial West Group/
Jerry's Famous Deli, Inc./Yucaipa Waterton
Deli Investors, L.L.C.
2. Deliver to Shoreline Pacific Institutional Finance, the Institutional
Division of Financial West Group ("Shoreline Pacific") a signed
Private Securities Subscription Agreement and a signed Registration
Rights Agreement;
3. Deliver to Shoreline Pacific a signed closing instructions/hold
harmless letter addressed to the Escrow Agent.
Items 2 and 3 should be faxed to the attention of Virginia Allen, at (415)
332-7808, with a hard copy sent via private overnight mail service. Item 3
should also be faxed directly to the Escrow Agent at (415) 781-8010.
If these instructions are not followed completely, TRANSACTIONS WILL NOT CLOSE.
SELLER HAS BEEN INSTRUCTED TO:
1. Deliver to the Escrow Agent Six Thousand (6,000) Preferred Shares of
Jerry's Famous Deli, Inc., each Preferred Share representing One
Thousand Dollars ($1,000.00) U.S., in the form of Ten (10)
certificates each representing Six Hundred (600) Preferred Shares in
the name of Yucaipa Waterton Deli Investors, L.L.C., bearing
substantially the following legend: "The shares evidenced by this
certificate have not been registered under the Securities Act of 1933
(the "Act") and may not be offered or sold, transferred, pledged,
hypothecated or otherwise disposed of except pursuant to an effective
registration statement under the Act or pursuant to an available
exemption from such registration. The holder of this certificate is
the beneficiary of certain obligations of the Company set forth in a
private securities subscription agreement between the Company and
Yucaipa Waterton Deli Investors, L.L.C. dated August 22, 1996. A copy
of the portion of the aforesaid
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Buyer's Confirmation: Jerry's Famous Deli, Inc./Yucaipa Waterton Deli
Investors, L.L.C. August 22, 1996 Page 3
subscription agreement evidencing such obligations may be obtained
from the Company's executive offices."
2. Deliver to the Escrow Agent a signed Common Stock Purchase Warrant
Certificate in the name of Yucaipa Waterton Deli Investors, L.L.C. to
purchase Sixty Five Thousand (65,000) shares of common stock of
Jerry's Famous Deli, Inc.;
3. Deliver to the Escrow Agent an opinion letter from Seller's securities
counsel stating that, among other things, upon issuance of the
Preferred Shares and the Common Shares issuable upon the conversion
thereof, such shares will be duly and validly authorized and issued,
fully-paid and nonassessable shares of Jerry's Famous Deli, Inc.
4. Deliver to Shoreline Pacific a signed Private Securities Subscription
Agreement and a signed Registration Rights Agreement;
5. Deliver to Shoreline Pacific and the Escrow Agent a signed closing
instructions/hold harmless letter addressed to the Escrow Agent.
THE ESCROW AGENT WILL:
1. Collect the funds from Buyer and the common stock certificates and
Common Stock Purchase Warrant Certificate from Seller;
2. Release funds to Seller via wire transfer pursuant to Seller's
instructions and release the Preferred Share certificates and Common
Stock Purchase Warrant Certificate to Buyer via private overnight mail
service pursuant to Buyer's instructions, once all material has been
received.
You have instructed us that Buyer's instructions for delivery of the
certificates are as follows:
Yucaipa Waterton Deli Investors, L.L.C.
c/o Goldman Sachs & Co.
One New York Plaza
44th Floor
New York, NY 10004
Attn: Jim Schaad
(212) 902-1257
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Buyer's Confirmation: Jerry's Famous Deli, Inc./Yucaipa Waterton Deli
Investors, L.L.C. August 22, 1996 Page 4
If these terms and timetable are acceptable to you, please confirm by signing
below and returning this letter to my office by fax, together with the private
securities subscription agreement and escrow agent closing instructions/hold
harmless letter.
Facsimile signatures of this agreement shall be binding on all parties hereto.
Sincerely,
/s/ HARLAN P. KLEIMAN
- ------------------------
Harlan P. Kleiman,
Executive Vice President
of Institutional Sales
AGREED AND ACCEPTED:
Yucaipa Waterton Deli Investors, L.L.C.
/s/ KENNETH ABDALLA
- ------------------------
Waterton Management, L.L.C.,
Managing Member
By: Kenneth Abdalla, Managing
Member of Waterton Management
18
[ BUYER'S LETTERHEAD ]
August 22, 1996
Mr. John MacGregor
Senior Vice President and Manager
The Royal Bank of Scotland plc
600 Montgomery Street
San Francisco, CA 94111-2880
Dear Mr. MacGregor:
We will be wiring to you no later than August 23, 1996 funds in the amount of
Six Million One Hundred Dollars ($6,000,100) U.S. for the purchase of Six
Thousand (6,000) Shares of Convertible Preferred Stock of Jerry's Famous Deli,
Inc. (DELI) and warrants to purchase Sixty Five Thousand (65,000) shares of
common stock of Jerry's Famous Deli, Inc.
Upon receipt of the share certificates and Common Stock Warrant Purchase
Certificate from Jerry's Famous Deli, Inc. ("Seller") and other required
documents, please release the funds to Seller pursuant to Seller's instructions
provided to you by Shoreline Pacific Institutional Finance, the Institutional
Division of Financial West Group.
We understand that you are acting as escrow agent in this transaction and in no
other capacity. We agree that you will have no liability whatsoever for any
actions taken or not taken by you in connection with this transaction, unless
such actions or omissions result from your gross negligence or willful
misconduct.
We agree to indemnify you and hold you harmless against any loss, liability,
claim, or other damage arising from or in connection with this transaction
other than any loss, liability, claim or other damage resulting from your gross
negligence or willful misconduct.
We further agree that you are expressly authorized to and shall be protected in
relying on the genuineness of facsimile signatures on documents you receive in
this transaction.
Sincerely,
/s/ KENNETH ABDALLA
- -----------------------------
Waterton Management, L.L.C.,
Managing Member
By: Kenneth Abdalla, Managing
Member of Waterton Management
19
August 22, 1996
Via Facsimile
(415) 781-8010
Mr. John MacGregor
Senior Vice President & Manager
The Royal Bank of Scotland plc
The Pyramid
600 Montgomery Street
San Francisco, CA 94111-2880
RE: ESCROW CLOSING INSTRUCTIONS
The following sets forth the closing instructions for the transaction between:
the Buyer:
Yucaipa Waterton Deli Investors, L.L.C.
10000 Santa Monica Boulevard
5th Floor
Los Angeles, CA 90067
(hereinafter referred to as "Buyer")
(310) 789-7215 Telephone
(310) 789-7218 Fax
and the Seller:
Jerry's Famous Deli, Inc.
12711 Ventura Boulevard, Suite 400
Studio City, CA 91604
(hereinafter referred to as "Seller ")
(818) 766-8311 Telephone
(818) 766-8315 Fax
Mr. Isaac Starkman
Chairman and CEO
for the sale of Six Thousand (6,000) Shares of Convertible Preferred Stock of
Jerry's Famous Deli, Inc. (DELI) and warrants to purchase Sixty Five Thousand
(65,000) shares of common stock of Jerry's Famous Deli, Inc., issued by Seller
pursuant to Section 4(2) of the Securities Act of 1933 (the "Preferred
Shares"). The Royal Bank of
20
Mr. John MacGregor: Jerry's Famous Deli, Inc./Yucaipa Waterton Deli
Investors, L.L.C. August 22, 1996 Page 2
Scotland plc will act as escrow agent for the transaction (the "Escrow Agent"),
which is scheduled to close on August 23, 1996.
BUYER WILL PROVIDE:
1. A signed Private Securities Subscription Agreement and a signed
Registration Rights Agreement;
2. A signed closing instructions/hold harmless letter addressed to the
Escrow Agent regarding its capacity as escrow agent;
3. Funds wired to the Escrow Agent's escrow account in the amount of Six
Million One Hundred Dollars ($6,000,100) U.S.
SELLER WILL PROVIDE:
1. A signed Private Securities Subscription Agreement and a signed
Registration Rights Agreement;
2. A signed closing instructions/hold harmless letter addressed to the
Escrow Agent regarding its capacity as escrow agent;
3. Six Thousand (6,000) Shares of Convertible Preferred Stock of Jerry's
Famous Deli, Inc. (DELI), each Preferred Share representing One
Thousand Dollars ($1,000.00) U.S., in the form of Ten (10)
certificates each representing Six Hundred (600) Preferred Shares in
the name of Yucaipa Waterton Deli Investors, L.L.C., bearing
substantially the following legend: "The shares evidenced by this
certificate have not been registered under the Securities Act of 1933
(the "Act") and may not be offered or sold, transferred, pledged,
hypothecated or otherwise disposed of except pursuant to an effective
registration statement under the Act or pursuant to an available
exemption from such registration. The holder of this certificate is
the beneficiary of certain obligations of the Company set forth in a
private securities subscription agreement between the Company and
Yucaipa Waterton Deli Investors, L.L.C. dated August 22, 1996. A copy
of the portion of the aforesaid subscription agreement evidencing such
obligations may be obtained from the Company's executive offices."
4. A signed Common Stock Purchase Warrant Certificate in the name of
Yucaipa Waterton Deli Investors, L.L.C. to purchase Sixty Five
Thousand (6,500) shares of common stock of Jerry's Famous Deli, Inc.;
5. An opinion letter from Seller's securities counsel stating that, among
other things, upon issuance of the Preferred Shares and the Common
Shares issuable upon the conversion thereof, such shares will be duly
21
Mr. John MacGregor: Jerry's Famous Deli, Inc./Yucaipa Waterton Deli
Investors, L.L.C August 22, 1996 Page 3
and validly authorized and issued, fully-paid and nonassessable shares
of Jerry's Famous Deli, Inc.
WE EXPECT YOU TO COLLECT THE MATERIAL FROM BOTH BUYER AND SELLER. WE FURTHER
EXPECT THAT, ONCE ALL MATERIALS HAVE BEEN RECEIVED, YOU WILL TAKE THE FOLLOWING
STEPS:
1. Release to Seller Five Million Six Hundred Forty Thousand Ninety Four
Dollars ($5,640,094) U.S. via wire transfer pursuant to Seller's
instructions, as follows:
Bank of America
Woodland Hills, California
ABA# 121-000-358
For further credit to: Jerry's Famous Deli, Inc.
Account # 14656-00915
2. Release stock certificates, Common Stock Purchase Warrant Certificate,
and a copy of opinion letter from Seller's counsel to Buyer pursuant
to Buyer's instructions, as follows:
Yucaipa Waterton Deli Investors, L.L.C.
c/o Goldman Sachs & Co.
One New York Plaza, 44th Floor
New York, NY 10004
Attn: Jim Schaad
(212) 902-1257
3. Wire transfer Three Hundred Sixty Thousand Six Dollars ($360,006) U.S.
as follows:
Bank of New York
ABA #021000018
BNF-Correspondent Services Corp.
AC#8900186968
OBI-FBO Account Title/AC XX12345 (Account Number)
Financial West Group/UA99100
FINANCIAL WEST GROUP
/s/ HARLAN P. KLEIMAN
- -------------------------------------
Harlan P. Kleiman,
Executive Vice President
Institutional Sales
ACCEPTED:
THE ROYAL BANK OF SCOTLAND PLC
By: /s/ JOHN MACGREGOR
- -------------------------------------
John MacGregor, Senior Vice President
22
ANNEX I
ANNEX I
TO
SUBSCRIPTION
AGREEMENT
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT, dated as of August 22, 1996 (this
"Agreement"), is made by and among Jerry's Famous Deli, Inc., a California
corporation (the "Company"), and the person named on the signature page hereto
(the "Initial Investor").
W I T N E S S E T H :
WHEREAS, in connection with the Private Securities
Subscription Agreement, dated as of August 22, 1996, between the
Initial Investor and the Company (the "Subscription Agreement"), the
Company has agreed, upon the terms and subject to the conditions of
the Subscription Agreement, to issue and sell to the Initial Investor
shares (the "Shares") of Convertible Preferred Stock (the "Preferred
Stock") and Warrants (the "Warrants") to purchase shares of Common
Stock, no par value (the "Common Stock") of the Company; and
WHEREAS, to induce the Initial Investor to execute and
deliver the Subscription Agreement, the Company has agreed to provide
certain registration rights under the Securities Act of 1933, as
amended, and the rules and regulations thereunder, or any similar
successor statute (collectively, the "Securities Act"), and applicable
state securities laws with respect to the shares of Common Stock
isssuable upon conversion of the Preferred Stock or exercise of the
Warrants (the "Registrable Securities");
NOW, THEREFORE, in consideration of the premises and the
mutual covenants contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and the Initial Investor hereby agree as
follows:
23
Jerry's Famous Deli, Inc./Yucaipa Waterton Deli Investors, L.L.C.
Registration Rights Agreement August 22, 1996
Page 2
1. DEFINITIONS.
(a) As used in this Agreement, the following terms shall
have the following meanings:
(i) "Investor" means the Initial Investor and any
transferee or assignee who agrees to become bound by the provisions of
this Agreement in accordance with Section 9 hereof.
(ii) "register," "registered," and "registration" refer to
a registration effected by preparing and filing a Registration
Statement or Statements in compliance with the Securities Act on such
appropriate registration form promulgated by the Commission as shall
be selected by the Company, and, when requested by the Initial
Investor or any Investor pursuant to Section 2(b) hereof, shall (A) be
reasonably acceptable to the holders of a majority of the Registrable
Securities to which such registration relates, and (B) shall permit
the disposition of Registrable Securities in accordance with the
intended method or methods specified in the Investor's request for
such registration, and the declaration or ordering of effectiveness of
such Registration Statement by the United States Securities and
Exchange Commission ("SEC").
(iii) "Registrable Securities" means the shares of Common
Stock issued or issuable upon conversion of the Shares.
(iv) "Registration Statement" means a registration
statement under the Securities Act registering securities of the
Company.
(b) As used in this Agreement, the term Investor includes
(i) each Investor (as defined above) and (ii) each person who is a
permitted transferee or assignee of the Registrable Securities
pursuant to Section 9 of this Agreement.
(c) Capitalized terms used herein and not otherwise
defined herein shall have the respective meanings set forth in the
Subscription Agreement.
2. REGISTRATION.
(A) REGISTRATION BY THE COMPANY. Prior to the date the
Shares become convertible into shares of Common Stock in accordance
with their terms, the Company shall file with the SEC a Registration
24
Jerry's Famous Deli, Inc./Yucaipa Waterton Deli Investors, L.L.C.
Registration Rights Agreement August 22, 1996
Page 3
Statement registering the Registrable Securities for resale by the
Investors. If the Registration Statement has not been declared
effective by the SEC prior to the date the Shares become convertible,
the provisions of Section 2(e) hereof shall apply.
(B) PIGGY-BACK REGISTRATIONS. If (i) at any time after
120 days following the purchase of the Shares pursuant to the
Subscription Agreement, if a Registration Statement for the resale of
the Common Stock has not been filed with the SEC or, (ii) at any time
after the date the Shares become convertible into shares of Common
Stock, if a Registration Statement for the resale of the Common Stock
has not been declared effective by the SEC, the Company shall
determine to prepare and file with the SEC a Registration Statement
relating to an offering for its own account or the account of others
under the Securities Act any of its equity securities, other than on
Form S-4 or Form S-8 or their then equivalents relating to equity
securities to be issued solely in connection with any acquisition of
any entity or business or equity securities issuable in connection
with stock option or other employee benefit plans, the Company shall
send to each Investor, who is entitled to registration rights under
this Section 2(b) written notice of such determination and, if within
twenty (20) days after receipt of such notice, such Investor shall so
request in writing, the Company shall include in such Registration
Statement all or any part of the Registrable Securities such Investor
requests to be registered, except that if, in connection with any
underwritten public offering for the account of the Company the
managing underwriter(s) thereof shall impose a limitation on the
number of shares of Common Stock which may be included in the
Registration Statement because, in such underwriter(s)' judgment, such
limitation is necessary to effect an orderly public distribution, then
the Company shall be obligated to include in such Registration
Statement only such limited portion, if any, of the Registrable
Securities with respect to which such Investor has requested inclusion
hereunder. Any exclusion of Registrable Securities shall be made pro
rata among the Investors seeking to include Registrable Securities, in
proportion to the number of Registrable Securities sought to be
included by such Investors; provided, however, that the Company shall
not exclude any Registrable Securities unless the Company has first
excluded all outstanding securities the holders of which are not
entitled by right to inclusion of securities in such Registration
Statement; and provided, further, however, that, after giving effect
to the immediately preceding proviso, any exclusion of Registrable
Securities shall be made pro rata with holders of other securities
having the right to include such securities in the Registration
Statement to the extent such pro rata
25
Jerry's Famous Deli, Inc./Yucaipa Waterton Deli Investors, L.L.C.
Registration Rights Agreement August 22, 1996
Page 4
allotment is permitted under the Company's currently existing
agreements with such holders of the Company's securities. No right to
registration of Registrable Securities under this Section 2(b) shall
be construed to limit any registration required or permitted under any
other provision of this Agreement. The obligations of the Company
under this Section 2(b) may be waived by Investors holding a majority
in interest of the Registrable Securities and shall expire (i) after
the Company has afforded the opportunity for the Investors to exercise
registration rights under this Section 2(b) for two registrations;
provided, however, that any Investor who shall have had any
Registrable Securities excluded from any Registration Statement in
accordance with this Section 2(b) shall be entitled to include in an
additional Registration Statement filed by the Company the Registrable
Securities so excluded or (ii) when all of the Registrable Securities
held by any Investor may be sold by such Investor under Rule 144 under
the Securities Act ("Rule 144") within any three-month period.
(C) DEMAND REGISTRATION. If, at any time after the
Shares become convertible into Common Stock, if a Registration
Statement for the resale of the Registrable Securities is not then in
effect, any Investor holding a majority of the Registrable Securities
shall notify the Company in writing that it intends to offer or cause
to be offered for public sale Registrable Securities held by such
Investor, the Company shall cause such of the Registrable Securities
as may be requested by any Investor to be registered, on one occasion
only, under the Securities Act and applicable state laws as
expeditiously as possible. Once the right for registration of any
Registrable Securities under this Section 2(c) has been exercised by
any Investor, the Company shall prepare and file a Registration
Statement covering such Registrable Securities with the SEC within
seven (7) days of the exercise of such registration right.
(D) If any offering pursuant to a Registration Statement
pursuant to Section 2(c) hereof involves (at the Company's election)
an underwritten offering, the Investors who hold a majority in
interest of the Registrable Securities subject to such underwritten
offering shall have the right to select one legal counsel and an
investment banker or bankers and manager or managers to administer the
offering, which investment banker or bankers or manager or managers
shall be reasonably satisfactory to the Company. The Investors who
hold the Registrable Securities to be included in such underwriting
shall pay all underwriting discounts and commissions and other fees
and expenses of such investment banker or bankers and manager or
managers so selected in accordance with this Section 2(d) (other than
fees and expenses relating to registration of Registrable Securities
under federal
26
Jerry's Famous Deli, Inc./Yucaipa Waterton Deli Investors, L.L.C.
Registration Rights Agreement August 22, 1996
Page 5
or state securities laws which are payable by the Company pursuant to
Section 5 hereof) with respect to their Registrable Securities and the
fees and expenses of such legal counsel selected by the Investors.
(E) PAYMENTS BY THE COMPANY. If the Registration
Statement covering the Registrable Securities is not effective prior
to the date the Shares become convertible into Common Stock, then the
Company will make payments to each holder of Registrable Securities
(each, a "Holder") in such amounts and at such times as shall be
determined pursuant to this Section 2(e). The amount to be paid by
the Company to the Holders shall be determined and paid as of each
Computation Date, and such amount shall be equal to three percent (3%)
of the aggregate subscription price paid by the Initial Investor for
the Shares pursuant to the Subscription Agreement (the "Periodic
Amount"); provided, however, that if any Computation Date is less than
30 days subsequent to another Computation Date, then the Periodic
Amount payable on the later Computation Date shall be prorated. The
Periodic Amount shall be divided among all the Holders in the same
proportion as each Holder's Registrable Securities bears to the total
of the outstanding Registrable Securities. The Periodic Amount shall
be paid by the Company within five business days after each
Computation Date and shall be payable in cash; provided, however, that
the Company may elect in lieu of payment of any Periodic Amount in
cash to deliver to the Initial Investor shares of Common Stock having
an Aggregate Market Value equal to the amount of the Periodic Amount
if, but only if, (1) such shares are freely tradable by the Initial
Investor without any restriction under the Securities Act or any state
securities or "blue sky" law and (2) after the issuance of such
shares to the Holder, the aggregate number of shares of Common Stock
beneficially owned by the Holder (determined in accordance with
Section 13(d) of, and Regulations 13 D-G under, the Securities
Exchange Act of 1934, as amended (the "Exchange Act")) would not
exceed 4.9% of the outstanding shares of Common Stock unless such
provision is waived by the Holder.
As used in this Section 2(e), the following terms shall have
the following meanings:
"Aggregate Market Value" of any shares of Common Stock as of
any Computation Date means the product obtained by multiplying (a)
such number of shares of Common Stock times (b) the Average Market
Price of the Common Stock for such Computation Date.
27
Jerry's Famous Deli, Inc./Yucaipa Waterton Deli Investors, L.L.C.
Registration Rights Agreement August 22, 1996
Page 6
"Average Market Price" of any security for any period shall be
computed as the average closing price of the shares over the five
trading-day period ending on the relevant Computation Date, as
reported by Bloomberg, L.P.
"Computation Date" means the date which is 30 days after the
date the Shares become convertible and, if the Registration Statement
required to be filed by the Company has not theretofore been declared
effective by the SEC, each date which is 30 days after a Computation
Date and, if the Registration Statement required to be filed by the
Company is not declared effective by the SEC within 30 days after the
date the Shares become convertible, the date on which such
Registration Statement is declared effective.
3. OBLIGATIONS OF THE COMPANY. In connection with
the registration of the Registrable Securities, the Company shall:
(a) prepare and file with SEC in accordance with section
2(a) hereof, by a date which the Company and its counsel reasonably
believes will allow the Registration Statement to be declared
effective prior to the date the Shares become convertible, or prepare
promptly and file with the SEC promptly (but in no event later than 7
days) after a request in accordance with Section 2(c) hereof, a
Registration Statement or Statements with respect to all Registrable
Securities to be included therein, and thereafter use its best efforts
to cause the Registration Statement to become effective as soon as
reasonably possible after such filing. If such Registration Statement
is filed pursuant to Rule 415, the Company shall keep the Registration
Statement effective pursuant to Rule 415 at all times until such date
as is three years after the date such Registration Statement is first
ordered effective by the SEC. In any case, the Registration Statement
(including any amendments or supplements thereto and prospectuses
contained therein) filed by the Company shall not contain any untrue
statement of a material fact or omit to state a material fact required
to be stated therein, or necessary to make the statements therein, in
light of the circumstances in which they were made, not misleading;
provided, however, that, subject to the conditions set forth in
Section 4(a) below, each Investor may notify the Company in writing
that it wishes to exclude all or a portion of its Registrable
Securities from such Registration Statement; provided further,
however, that if at any time the Investors shall be entitled to sell
all Registrable Securities held by them pursuant to Rule 144
promulgated under the Securities Act or any other similar rule or
regulation of the SEC that may at any time permit the Investors to
sell securities of the Company to the public
28
Jerry's Famous Deli, Inc./Yucaipa Waterton Deli Investors, L.L.C.
Registration Rights Agreement August 22, 1996
Page 7
without registration and without imposing restrictions arising under
the federal securities laws on the purchases thereof in a period of
three consecutive months, then the Company shall, so long as it meets
the current public information requirements of Rule 144, thereafter no
longer be required to maintain the registration of Registrable
Securities pursuant to this Agreement;
(b) prepare and file with the SEC such amendments
(including post-effective amendments) and supplements to the
Registration Statement and the prospectus used in connection with the
Registration Statement as may be necessary to keep the Registration
Statement effective at all times until such date as is three years
after the date such Registration Statement is first ordered effective
by the SEC, and, during such period, comply with the provisions of the
Securities Act with respect to the disposition of all Registrable
Securities of the Company covered by the Registration Statement until
such time as all of such Registrable Securities have been disposed of
in accordance with the intended methods of disposition by the seller
or sellers thereof as set forth in the Registration Statement;
(c) furnish to each Investor whose Registrable Securities
are included in the Registration Statement, such number of copies of a
prospectus, including a preliminary prospectus, and all amendments and
supplements thereto and such other documents as such Investor may
reasonably request in order to facilitate the disposition of the
Registrable Securities owned by such Investor;
(d) use reasonable efforts to (i) register and qualify
the Registrable Securities covered by the Registration Statement under
such other securities or blue sky laws of such jurisdictions as the
Investors who hold a majority in interest of the Registrable
Securities being offered reasonably request, (ii) prepare and file in
those jurisdictions such amendments (including post-effective
amendments) and supplements, (iii) take such other actions as may be
necessary to maintain such registrations and qualifications in effect
at all times for a period of three years after the date such
Registration Statement is first ordered effective by the SEC and (iv)
take all other actions reasonably necessary or advisable to qualify
the Registrable Securities for sale in such jurisdictions; provided,
however, that the Company shall not be required in connection
therewith or as a condition thereto to (I) qualify to do business in
any jurisdiction where it would not otherwise be required to qualify
but for this Section 3(d), (II) subject itself to general taxation in
any such jurisdiction, (III) file a general consent to service of
process in any such jurisdiction, (IV) provide any undertakings that
29
Jerry's Famous Deli, Inc./Yucaipa Waterton Deli Investors, L.L.C.
Registration Rights Agreement August 22, 1996
Page 8
cause more than nominal expense or burden to the Company or (V) make
any change in its charter or by-laws, which in each case the Board of
Directors of the Company determines to be contrary to the best
interests of the Company and its stockholders;
(e) in the event Investors who hold a majority in
interest of the Registrable Securities being offered in the offering
select underwriters for the offering, enter into and perform its
obligations under an underwriting agreement, in usual and customary
form, including, without limitation, customary indemnification and
contribution obligations, with the managing underwriter of such
offering;
(f) as promptly as practicable after becoming aware of
such event, notify each Investor who holds Registrable Securities
being sold pursuant to such registration of the happening of any event
of which the Company has knowledge, as a result of which the
prospectus included in the Registration Statement, as then in effect,
includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they
were made, not misleading, and use its best efforts promptly to
prepare a supplement or amendment to the Registration Statement to
correct such untrue statement or omission, and deliver a number of
copies of such supplement or amendment to each Investor as such
Investor may reasonably request;
(g) as promptly as practicable after becoming aware of
such event, notify each Investor who holds Registrable Securities
being sold pursuant to such registration (or, in the event of an
underwritten offering, the managing underwriters) of the issuance by
the SEC of any stop order or other suspension of effectiveness of the
Registration Statement at the earliest possible time;
(h) permit a single firm of counsel designated as selling
stockholders' counsel by the Investors who hold a majority in interest
of the Registrable Securities being sold pursuant to such registration
to review the Registration Statement and all amendments and
supplements thereto a reasonable period of time prior to their filing
with the SEC, and shall not file any document in a form to which such
counsel reasonably objects;
(i) make generally available to its security holders as
soon as practical, but not later than ninety (90) days after the
close of the period
30
Jerry's Famous Deli, Inc./Yucaipa Waterton Deli Investors, L.L.C.
Registration Rights Agreement August 22, 1996
Page 9
covered thereby, an earnings statement (in form complying with the
provisions of Rule 158 under the Securities Act) covering a twelve-
month period beginning not later than the first day of the Company's
fiscal quarter next following the date of the Registration Statement;
(j) at the request of the Investors who hold a majority
in interest of the Registrable Securities being sold pursuant to such
registration, furnish on the date that Registrable Securities are
delivered to an underwriter for sale in connection with the
Registration Statement (i) a letter, dated such date, from the
Company's independent certified public accountants in form and
substance as is customarily given by independent certified public
accountants to underwriters in an underwritten public offering,
addressed to the underwriters; and (ii) an opinion, dated such date,
from counsel representing the Company for purposes of such
Registration Statement, in form and substance as is customarily given
in an underwritten public offering, addressed to the underwriters and
Investors;
(k) make available for inspection by any Investor whose
Registrable Securities are being sold pursuant to such registration,
any underwriter participating in any disposition pursuant to the
Registration Statement, and any attorney, accountant or other agent
retained by any such Investor or underwriter (collectively, the
"Inspectors"), all pertinent financial and other records, pertinent
corporate documents and properties of the Company (collectively, the
"Records"), as shall be reasonably necessary to enable each Inspector
to exercise its due diligence responsibility, and cause the Company's
officers, directors and employees to supply all information which any
Inspector may reasonably request for purposes of such due diligence;
provided, however, that each Inspector shall hold in confidence and
shall not make any disclosure (except to an Investor) of any Record or
other information which the Company determines in good faith to be
confidential, and of which determination the Inspectors are so
notified, unless (i) the disclosure of such Records is necessary to
avoid or correct a misstatement or omission in any Registration
Statement, (ii) the release of such Records is ordered pursuant to a
subpoena or other order from a court or government body of competent
jurisdiction or (iii) the information in such Records has been made
generally available to the public other than by disclosure in
violation of this or any other agreement. The Company shall not be
required to disclose any confidential information in such Records to
any Inspector until and unless such Inspector shall have entered into
confidentiality agreements (in form and substance satisfactory to the
Company) with
31
Jerry's Famous Deli, Inc./Yucaipa Waterton Deli Investors, L.L.C.
Registration Rights Agreement August 22, 1996
Page 10
the Company with respect thereto, substantially in the form of this
Section 3(k). Each Investor agrees that it shall, upon learning that
disclosure of such Records is sought in or by a court or governmental
body of competent jurisdiction or through other means, give prompt
notice to the Company and allow the Company, at its expense, to
undertake appropriate action to prevent disclosure of, or to obtain a
protective order for, the Records deemed confidential. The Company
shall hold in confidence and shall not make any disclosure of
information concerning an Investor provided to the Company pursuant to
Section 4(e) hereof unless (i) disclosure of such information is
necessary to comply with federal or state securities laws, (ii) the
disclosure of such information is necessary to avoid or correct a
misstatement or omission in any Registration Statement, (iii) the
release of such information is ordered pursuant to a subpoena or other
order from a court or governmental body of competent jurisdiction or
(iv) such information has been made generally available to the public
other than by disclosure in violation of this or any other agreement.
The Company agrees that it shall, upon learning that disclosure of
such information concerning an Investor is sought in or by a court or
governmental body of competent jurisdiction or through other means,
give prompt notice to such Investor, at its expense, to undertake
appropriate action to prevent disclosure of, or to obtain a protective
order for, such information;
(l) use its best efforts either to (i) cause all the
Registrable Securities covered by the Registration Statement to be
listed on a national securities exchange and on each additional
national securities exchange on which similar securities issued by the
Company are then listed, if any, if the listing of such Registrable
Securities is then permitted under the rules of such exchange or (ii)
secure designation of all the Registrable Securities covered by the
Registration Statement as a National Association of Securities Dealers
Automated Quotations System ("NASDAQ") "national market system
security" within the meaning of Rule 11Aa2-1 of the SEC under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
the quotation of the Registrable Securities on the NASDAQ National
Market System or, if, despite the Company's best efforts to satisfy
the preceding clause (i) or (ii), the Company is unsuccessful in
satisfying the preceding clause (i) or (ii), to secure listing on a
national securities exchange or NASDAQ authorization and quotation for
such Registrable Securities and, without limiting the generality of
the foregoing, to arrange for at least two market makers to register
with the National Association of Securities Dealers, Inc. ("NASD") as
such with respect to such Registrable Securities;
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Jerry's Famous Deli, Inc./Yucaipa Waterton Deli Investors, L.L.C.
Registration Rights Agreement August 22, 1996
Page 11
(m) provide a transfer agent and registrar, which may be
a single entity, for the Registrable Securities not later than the
effective date of the Registration Statement;
(n) cooperate with the Investors who hold Registrable
Securities being sold and the managing underwriter or underwriters, if
any, to facilitate the timely preparation and delivery of certificates
(not bearing any restrictive legends) representing Registrable
Securities to be sold pursuant to the denominations or amounts as the
case may be, and registered in such names as the managing underwriter
or underwriters, if any, or the Investors may reasonably request; and,
within five business days after a Registration Statement which
includes Registrable Securities is ordered effective by the SEC, the
Company shall deliver, and shall cause legal counsel selected by the
Company to deliver, to the transfer agent for the Registrable
Securities (with copies to the Investors whose Registrable Securities
are included in such Registration Statement) instructions to the
transfer agent to issue new stock certificates without a legend and an
opinion of such counsel that the shares have been registered; and
(o) take all other reasonable actions necessary to
expedite and facilitate disposition by the Investor of the Registrable
Securities pursuant to the Registration Statement;
4. OBLIGATIONS OF THE INVESTORS. In connection with the
registration of the Registrable Securities, the Investors shall have
the following obligations:
(a) It shall be a condition precedent to the obligations
of the Company to take any action pursuant to this Agreement with
respect to each Investor that such Investor shall furnish to the
Company such information regarding itself, the Registrable Securities
held by it and the intended method of disposition of the Registrable
Securities held by it as shall be reasonably required to effect the
registration of the Registrable Securities and shall execute such
documents in connection with such registration as the Company may
reasonably request. At least fifteen (15) days prior to the first
anticipated filing date of the Registration Statement, the Company
shall notify each Investor of the information the Company requires
from each such Investor (the "Requested Information") if such Investor
elects to have any of such Investor's Registrable Securities included
in the Registration Statement. If within five (5) business days prior
to the filing date the Company has not received the Requested
Information from an
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Jerry's Famous Deli, Inc./Yucaipa Waterton Deli Investors, L.L.C.
Registration Rights Agreement August 22, 1996
Page 12
Investor (a "Non-Responsive Investor"), then the Company may file the
Registration Statement without including Registrable Securities of
such Non-Responsive Investor;
(b) Each Investor by such Investor's acceptance of the
Registrable Securities agrees to cooperate with the Company as
reasonably requested by the Company in connection with the preparation
and filing of the Registration Statement hereunder, unless such
Investor has notified the Company in writing of such Investor's
election to exclude all of such Investor's Registrable Securities from
the Registration Statement;
(c) In the event Investors holding a majority in interest
of the Registrable Securities being registered determine to engage the
services of an underwriter, each Investor agrees to enter into and
perform such Investor's obligations under an underwriting agreement,
in usual and customary form, including, without limitation, customary
indemnification and contribution obligations, with the managing
underwriter of such offering and take such other actions as are
reasonably required in order to expedite or facilitate the disposition
of the Registrable Securities, unless such Investor has notified the
Company in writing of such Investor's election to exclude all of such
Investor's Registrable Securities from the Registration Statement;
(d) Each Investor agrees that, upon receipt of any notice
from the Company of the happening of any event of the kind described
in Section 3(f) or 3(g), such Investor will immediately discontinue
disposition of Registrable Securities pursuant to the Registration
Statement covering such Registrable Securities until such Investor's
receipt of the copies of the supplemented or amended prospectus
contemplated by Section 3(f) or 3(g) and , if so directed by the
Company, such Investor shall deliver to the Company (at the expense of
the Company) or destroy (and deliver to the Company a certificate of
destruction) all copies in such Investor's possession, of the
prospectus covering such Registrable Securities current at the time of
receipt of such notice; and
(e) No Investor may participate in any underwritten
registration hereunder unless such Investor (i) agrees to sell such
Investor's Registrable Securities on the basis provided in any
underwriting arrangements approved by the Investors entitled hereunder
to approve such arrangements, (ii) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents reasonably required under the terms
34
Jerry's Famous Deli, Inc./Yucaipa Waterton Deli Investors, L.L.C.
Registration Rights Agreement August 22, 1996
Page 13
of such underwriting arrangements and (iii) agrees to pay its pro rata
share of all underwriting discounts and commissions and other fees and
expenses of investment bankers and any manager or managers of such
underwriting and legal expenses of the underwriter applicable with
respect to its Registrable Securities, in each case to the extent not
payable by the Company pursuant to the terms of this Agreement.
5. EXPENSES OF REGISTRATION. All expenses (other than
underwriting discounts and commissions and other fees and expenses of
investment bankers and other than brokerage commissions) incurred in
connection with registrations, filings or qualifications pursuant to
Section 3, including, without limitation, all registration, listing and
qualifications fees, printers and accounting fees and the fees and
disbursements of counsel for the Company, shall be borne by the
Company; provided, however, that the Investors shall bear the fees and
out-of-pocket expenses of the one legal counsel selected by the
Investors pursuant to Section 3(h) hereof.
6. INDEMNIFICATION. In the event any Registrable
Securities are included in a Registration Statement under this
Agreement:
(a) To the extent permitted by law, the Company will
indemnify and hold harmless each Investor who holds such Registrable
Securities, the directors, if any, of such Investor, the officers, if
any, of such Investor, each person, if any, who controls any Investor
within the meaning of the Securities Act or the Exchange Act, any
underwriter (as defined in the Securities Act) for the Investors, the
directors, if any, of such underwriter and the officers, if any, of
such underwriter, and each person, if any, who controls any such
underwriter within the meaning of the Securities Act or the Exchange
Act (each, an "Indemnified Person"), against any losses, claims,
damages, expenses or liabilities (joint or several) (collectively
"Claims") to which any of them become subject under the Securities
Act, the Exchange Act or otherwise, insofar as such Claims (or actions
or proceedings, whether commenced or threatened, in respect thereof)
arise out of or are based upon any of the following statements,
omissions or violations in the Registration Statement, or any
post-effective amendment thereof, or any prospectus included therein:
(i) any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement or any post-effective
amendment thereof or the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, (ii) any untrue statement or
alleged untrue statement of a material fact contained in any
35
Jerry's Famous Deli, Inc./Yucaipa Waterton Deli Investors, L.L.C.
Registration Rights Agreement August 22, 1996
Page 14
preliminary prospectus if used prior to the effective date of such
Registration Statement, or contained in the final prospectus (as
amended or supplemented, if the Company files any amendment thereof or
supplement thereto with the SEC) or the omission or alleged omission
to state therein any material fact necessary to make the statements
made therein, in light of the circumstances under which the statements
therein were made, not misleading or (iii) any violation or alleged
violation by the Company of the Securities Act, the Exchange Act or
any state securities law or any rule or regulation (the matters in the
foregoing clauses (i) through (iv) being, collectively, "Violations").
Subject to the restrictions set forth in Section 6 (d) with respect to
the number of legal counsel, the Company shall reimburse the Investors
and each such underwriter or controlling person, promptly as such
expenses are incurred and are due and payable, for any legal fees or
other reasonable expenses incurred by them in connection with
investigating or defending any such Claim. Notwithstanding anything
to the contrary contained herein, the indemnification agreement
contained in this Section 6(a) (I) shall not apply to a Claim arising
out of or based upon a Violation which occurs in reliance upon and in
conformity with information furnished in writing to the Company by any
Indemnified Person or underwriter for such Indemnified Person
expressly for use in connection with the preparation of the
Registration Statement or any such amendment thereof or supplement
thereto, if such prospectus was timely made available by the Company
pursuant to Section 3(c) hereof; (II) with respect to any preliminary
prospectus shall not inure to the benefit of any such person from whom
the person asserting any such Claim purchased the Registrable
Securities that are the subject thereof (or to the benefit of any
person controlling such person) if the untrue statement or omission of
material fact contained in the preliminary prospectus was corrected in
the prospectus, as then amended or supplemented, if such prospectus
was timely made available by the Company pursuant to Section 3(c)
hereof; and (III) shall not apply to amounts paid in settlement of any
Claim if such settlement is effected without the prior written consent
of the Company, which consent shall not be unreasonably withheld.
Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of the Indemnified Persons and
shall survive the transfer of the Registrable Securities by the
Investors pursuant to Section 9.
(b) In connection with any Registration Statement in
which an Investor is participating, each such Investor agrees to
indemnify and hold harmless, to the same extent and in the same manner
set forth in Section 6(a), the Company, each of its directors, each of
its officers who
36
Jerry's Famous Deli, Inc./Yucaipa Waterton Deli Investors, L.L.C.
Registration Rights Agreement August 22, 1996
Page 15
signs the Registration Statement, each person, if any, who controls
the Company within the meaning of the Securities Act or the Exchange
Act, any underwriter and any other stockholder selling securities
pursuant to the Registration Statement or any of its directors or
officers or any person who controls such stockholder or underwriter
within the meaning of the Securities Act or the Exchange Act
(collectively and together with an Indemnified Person, an "Indemnified
Party"), against any Claim to which any of them may become subject,
under the Securities Act, the Exchange Act or otherwise, insofar as
such Claim arises out of or is based upon any Violation, in each case
to the extent (and only to the extent) that such Violation occurs in
reliance upon and in conformity with written information furnished to
the Company by such Investor expressly for use in connection with such
Registration Statement; and such Investor will promptly reimburse any
legal or other expenses reasonably incurred by them in connection with
investigating or defending any such Claim; provided, however, that the
indemnity agreement contained in this Section 6(b) shall not apply to
amounts paid in settlement of any Claim if such settlement is effected
without the prior written consent of such Investor, which consent
shall not be unreasonably withheld; provided, further, however, that
the Investor shall be liable under this Section 6(b) for only that
amount of a Claim as does not exceed the net proceeds to such Investor
as a result of the sale of Registrable Securities pursuant to such
Registration Statement. Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf of such
Indemnified Party and shall survive the transfer of the Registrable
Securities by the Investors pursuant to Section 9. Notwithstanding
anything to the contrary contained herein, the indemnification
agreement contained in this Section 6(b) with respect to any
preliminary prospectus shall not inure to the benefit of any
Indemnified Party if the untrue statement or omission of material fact
contained in the preliminary prospectus was corrected on a timely
basis in the prospectus, as then amended or supplemented.
(c) The Company shall be entitled to receive indemnities
from underwriters, selling brokers, dealer managers and similar
securities industry professionals participating in any distribution,
to the same extent as provided above, with respect to information such
persons so furnished in writing by such persons expressly for
inclusion in the Registration Statement.
(d) Promptly after receipt by an Indemnified Person or
Indemnified Party under this Section 6 of notice of the commencement
of any action (including any governmental action), such Indemnified
37
Jerry's Famous Deli, Inc./Yucaipa Waterton Deli Investors, L.L.C.
Registration Rights Agreement August 22, 1996
Page 16
Person or Indemnified Party shall, if a Claim in respect thereof is to
made against any indemnifying party under this Section 6, deliver to
the indemnifying party a written notice of the commencement thereof
and this indemnifying party shall have the right to participate in,
and, to the extent the indemnifying party so desires, jointly with any
other indemnifying party similarly noticed, to assume control of the
defense thereof with counsel mutually satisfactory to the indemnifying
parties; provided, however, that an Indemnified Person or Indemnified
Party shall have the right to retain its own counsel, with the fees
and expenses to be paid by the indemnifying party, if, in the
reasonable opinion of counsel retained by the indemnifying party, the
representation by such counsel of the Indemnified Person or
Indemnified Party and the indemnifying party would be inappropriate
due to actual or potential differing interests between such
Indemnified Person or Indemnified Party and other party represented by
such counsel in such proceeding. The Company shall pay for only one
separate legal counsel for the Investors; such legal counsel shall be
selected by the Investors holding a majority in interest of the
Registrable Securities. The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any
such action shall not relieve such indemnifying party of any liability
to the Indemnified Person or Indemnified Party under this Section 6,
except to the extent that the indemnifying party is prejudiced in its
ability to defend such action. The indemnification required by this
Section 6 shall be made by periodic payments of the amount thereof
during the course of the investigation or defense, as such expense,
loss, damage or liability is incurred and is due and payable.
7. CONTRIBUTION. To the extent any indemnification
provided for herein is prohibited or limited by law, the indemnifying
party agrees to make the maximum contribution with respect to any
amounts for which it would otherwise be liable under Section 6 to the
fullest extent permitted by law; provided, however, that (a) no
contribution shall be made under circumstances where the maker would
not have been liable for indemnification under the fault standards set
forth in Section 6, (b) no seller of Registrable Securities guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any seller
of Registrable Securities who was not guilty of such fraudulent
misrepresentation and (c) contribution by any seller of Registrable
Securities shall be limited in amount to the net amount of proceeds
received by such seller from the sale of such Registrable Securities.
38
Jerry's Famous Deli, Inc./Yucaipa Waterton Deli Investors, L.L.C.
Registration Rights Agreement August 22, 1996
Page 17
8. REPORTS UNDER EXCHANGE ACT. With a view to
making available to the Investors the benefits of Rule 144 or any
other similar rule or regulation of the SEC that may at any time
permit the Investors to sell securities of the Company to the public
without registration, until such time as the Investors have sold all
the Registrable Securities pursuant to a Registration Statement or
Rule 144, the Company agrees to:
(a) make and keep public information available, as those terms
are understood and defined in Rule 144;
(b) file with the SEC in a timely manner all reports and other
documents required of the Company under the Securities Act and the
Exchange Act; and
(c) furnish to each Investor so long as such Investor owns
Registrable Securities, promptly upon request, (i) a written statement
by the Company that it has complied with the reporting requirements of
Rule 144, the Securities Act and the Exchange Act, (ii) a copy of the
most recent annual or quarterly report of the Company and such other
reports and documents so filed by the Company and (iii) such other
information as may be reasonably requested to permit the Investors to
sell such securities pursuant to Rule 144 without registration.
9. ASSIGNMENT OF THE REGISTRATION RIGHTS. The rights to
have the Company register Registrable Securities pursuant to this
Agreement shall be automatically assigned by the Investors to
transferees or assignees of all or any portion of such securities only
if: (a) the Company is, within a reasonable time after such transfer
or assignment, furnished with written notice of (i) the name and
address of such transferee or assignee and (ii) the securities with
respect to which such registration rights are being transferred or
assigned, (b) immediately following such transfer or assignment the
further disposition of such securities by the transferee or assignee
is restricted under the Securities Act and applicable state securities
laws, and (c) at or before the time the Company received the written
notice contemplated by clause (a) of this sentence the transferee or
assignee agrees in writing with the Company to be bound by all of the
provisions contained herein.
10. AMENDMENT OF REGISTRATION RIGHTS. Any provision of this
Agreement may be amended and the observance thereof may be waived
(either generally or in a particular instance and either retroactively
or prospectively), only with the written consent of the
39
Jerry's Famous Deli, Inc./Yucaipa Waterton Deli Investors, L.L.C.
Registration Rights Agreement August 22, 1996
Page 18
Company and Investors who hold a majority in interest of the
Registrable Securities. Any amendment or waiver effected in
accordance with this Section 10 shall be binding upon each Investor
and the Company.
11. MISCELLANEOUS.
(a) A person or entity is deemed to be a holder of
Registrable Securities whenever such person or entity owns of record
such Registrable Securities. If the Company receives conflicting
instructions, notices or elections from two or more persons or
entities with respect to the same Registrable Securities, the Company
shall act upon the basis of instructions, notice or election received
from the registered owner of such Registrable Securities.
(b) Notices required or permitted to be given hereunder shall
be in writing and shall be deemed to be sufficiently given when
personally delivered or when sent by registered mail, return receipt
requested, addressed (i) if to the Company, at Jerry's Famous Deli,
Inc., 12711 Ventura Blvd., Suite 400, Studio City, CA 91604 ,
Attention: Mr. Isaac Starkman, Chairman and CEO, (ii) if to the
Initial Investor, at the address set forth under its name in the
Subscription Agreement and (iii) if to any other Investor, at such
address as such Investor shall have provided in writing to the
Company, or at such other address as each such party furnishes by
notice given in accordance with this Section 11(b), and shall be
effective, when personally delivered, upon receipt, and when so sent
by certified mail, four business days after deposit with the United
States Postal Service.
(c) Failure of any party to exercise any right or remedy
under this Agreement or otherwise, or delay by a party in exercising
such right or remedy, shall not operate as a waiver thereof.
(d) This Agreement shall be enforced, governed by and
construed in accordance with the laws of the State of California
applicable to the agreements made and to be performed entirely within
such state. In the event that any provision of this Agreement is
invalid or unenforceable under any applicable statute or rule of law,
then such provision shall be deemed inoperative to the extent that it
may conflict therewith and shall be deemed modified to conform with
such statute or rule of law. Any provision hereof which may prove
invalid or unenforceable under any law shall not affect the validity
or enforceability of any other provision hereof.
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Jerry's Famous Deli, Inc./Yucaipa Waterton Deli Investors, L.L.C.
Registration Rights Agreement August 22, 1996
Page 19
(e) This Agreement constitutes the entire agreement among the
parties hereto with respect to the subject matter hereof. There are
no restrictions, promises, warranties or undertakings, other than
those set forth or referred to herein. This Agreement supersedes all
prior agreements and understandings among the parties hereto with
respect to the subject matter hereof.
(f) Subject to the requirements of Section 9 hereof, this
Agreement shall inure to the benefit of and be binding upon the
successors and assigns of each of the parties hereto.
(g) All pronouns and any variations thereof refer to the
masculine, feminine or neuter, singular or plural, as the context may
require.
(h) The headings in the Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning
hereof.
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Jerry's Famous Deli, Inc./Yucaipa Waterton Deli Investors, L.L.C.
Registration Rights Agreement August 22, 1996
Page 20
(i) This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of
which shall constitute one and the same agreement. This Agreement,
once executed by a party, may be delivered to the other party hereto
by telephone line facsimile transmission of a copy of this Agreement
bearing the signature of the party so delivering this Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to
be duly executed by their respective officers thereunto duly
authorized as of day and year first above written.
JERRY'S FAMOUS DELI, INC.
By /s/ ISAAC STARKMAN
------------------------------
Isaac Starkman,
Chairman & CEO
YUCAIPA WATERTON DELI INVESTORS, L.L.C.
By /s/ KENNETH ABDALLA
-------------------------------
Waterton Management, L.L.C.,
Managing Member
By: Kenneth Abdalla, Managing
Member of Waterton Management