AGENCY,
CO-OCCUPANCY AND OPERATING AGREEMENT
This Agency, Co-Occupancy
and Operating Agreement (this “
Agreement
” ) is
executed effective as of April 7, 2008 (the “
Effective
Date ” ), by
and between Demitri
Samaha, an individual ( “
Samaha
” ),
Samaha
Foods, Inc., a California corporation ( “
Samaha
Foods ” ),
Java
Universe, LLC, a California limited liability company
( “
Java
Universe ” ), and
JDCO,
Inc., a California corporation ( “
JDCO
”
).
Recitals :
A.
Samaha
is currently the tenant under that certain Lease with Wells Fargo
Bank, N.A., as Trustee for Goodwin Family Memorial Trust (
“
Landlord
” ),
dated as of May 1, 2002, as amended by that certain First Amendment
to Lease dated as of January 9, 2007 (as amended, the “ Lease
” ),
with respect to that certain premises commonly known as 8948 West
Santa Monica Blvd., West Hollywood, California 90069 (the
“
Premises
”
);
B.
The
California Alcohol Beverage Control Board liquor license for use in
the Premises (the “ Liquor
License ” ) is held by
Samaha Foods;
C.
Pursuant
to that certain Asset Purchase Agreement of even date herewith (the
“
APA
” )
by and among JDCO, Java Universe, Java Detour, Inc., a Delaware
corporation and parent of JDCO ( “ Java
Detour ” ), and Elie
Samaha and Joseph Merhi, Java Detour is issuing certain shares of
its common stock to Java Universe in exchange for, among other
consideration, the right to assume from Java Universe occupancy and
operations of the existing Java Detour® store in the Premises,
as the agent and on behalf of Java Universe.
D. As a condition of JDCO
entering into the APA, JDCO has requested that the parties
hereto execute and deliver this Agreement.
NOW, THEREFORE, in
consideration of the sum of Ten and 00/100 Dollars ($10.00)
paid by JDCO to Java Universe, the receipt of which is hereby
acknowledged, and other good and valuable consideration,
intending to be legally bound hereby, it is hereby
covenanted, stipulated and agreed as follows:
1.
The
foregoing recitals are incorporated herein and are made a part of
the covenants and conditions of this Agreement.
2.
Each
of Java Universe and Samaha hereby designates JDCO as its agent for
all purposes hereunder, and hereby grants unto JDCO the exclusive
right to co-occupy and operate the Premises on behalf of each of
Java Universe and Samaha for so long as the Lease is in effect, or
until such time as JDCO’s occupancy rights are terminated as
provided herein, whichever comes first. JDCO’s
rights as agent granted under this Section 2 shall not be assigned
or transferred without the written consent of Java Universe, which
consent shall not be unreasonably withheld or delayed.
3.
Java
Universe and Samaha shall provide JDCO with immediate and exclusive
access to the Premises following the Effective
Date. JDCO shall have the sole right to make all
decisions with respect to the Java Detour® store in the
Premises, including without limitation with respect to all
operational, personnel, and management matters. JDCO
shall operate the Premises in a manner consistent with other
similar stores operated by JDCO, and in a manner so as to not cause
any defaults by Samaha under the Lease.
4.
JDCO
shall directly reimburse Samaha for the amounts paid by Samaha to
Landlord as Minimum Rent and Additional Rent (as such terms are
defined in the Lease) on a monthly basis, upon receipt from Samaha
of evidence of payment of such rent to the Landlord, such
reimbursement to be paid by JDCO immediately on the same business
day of receipt of evidence of payment. Samaha shall
continue to make such payments of Minimum Rent and Additional Rent
directly to Landlord as required by the Lease in a timely manner so
as to avoid any delinquencies due to late payments.
5.
In
the event that JDCO creates a situation on the Premises that causes
a default to occur under the provisions of the Lease, and Samaha
receives written notice of same from Landlord, Samaha shall
immediately deliver such notice to JDCO and JDCO shall promptly
cure such default on behalf of Samaha. If JDCO fails to
cure such default within the amount of time given Samaha under the
Lease to cure same minus one (1) business day, then Samaha may take
such actions as are necessary and appropriate under the situation
to cure such default, and JDCO shall reimburse Samaha for the
amounts reasonably incurred in doing so within thirty (30) days
after receipt of a written and reasonably detailed invoice
therefor. If any such default (written notice of which
has been received by JDCO in a timely manner) is not cured by JDCO
and Landlord commences eviction efforts or pursues other remedies
available to it under the Lease, Samaha and/or Java Universe shall
have the right to terminate this Agreement by delivering a written
termination notice thereof to JDCO;
provided ,
that exercise of such termination right shall not require Java
Universe to return, forfeit or transfer any shares of Common Stock
of Java Detour issued to Java Universe or its designees and
affiliates pursuant to the APA and the Termination Agreement (as
defined in the APA).
6.
Samaha
and/or Java Universe shall have the right, at any time during the
period commencing eighteen (18) months after the Effective Date and
ending upon termination of this Agreement, to engage an independent
commercially qualified business appraiser (the “ Appraiser
”) to determine whether Java Detour has a negative net worth,
such Appraiser to be selected by Java Universe with JDCO’s
prior written consent, such consent not to be unreasonably withheld
or delayed. In the event that the Appraiser determines
that Java Detour has a negative net worth and such negative net
worth continues for at least 150 consecutive days from the date of
such Appraiser’s initial report, Samaha and/or Java Universe
shall have the right to terminate this Agreement upon delivery of a
written termination notice (“ Termination
Notice ”) to JDCO along with a copy of the
Appraiser’s initial and final report confirming Java
Detour’s negative net worth during the 150-day period in
question. Java Universe, Samaha and JDCO acknowledge and
agree that any and all costs associated with engaging an Appraiser
shall be borne by Java Universe. For purposes of this
Agreement, “negative net worth” shall mean that total
liabilities exceed the greater of the fair market value of total
assets or the book value of total assets. Upon delivery
of a Termination Notice hereunder: (i) JDCO’s right to occupy
and operate the Premises shall cease immediately, (ii) JDCO shall
promptly return full and exclusive occupancy of the Premises to
Samaha, and (iii) Java Universe shall immediately forfeit, return,
and transfer to Java Detour any and all shares of Common Stock of
Java Detour issued to Java Universe or its designees and affiliates
pursuant to the APA and the Termination Agreement (as
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