AGENDA REPORT
Meeting Date: July 18, 2023
Item Number:
To: Parking Authority Board of Directors
From: Logan Phillippo, Real Property Development Manager Jonathan Gernes, Management Analyst
Subject: CONSENT TO ASSIGNMENT OF THE LEASE WITH ALLAN BROOKS AT 216 SOUTH BEVERLY DRIVE
Attachments: 1. Consent to Assignment of Lease
RECOMMENDATION
Staff recommends the Parking Authority Board of Directors approve the Consent to Assignment of Lease by and between The Parking Authority of the City of Beverly Hills and Allan Brooks at 216 South Beverly Drive.
INTRODUCTION
The proposed Consent to Assignment of Lease will provide The Parking Authority’s consent to the proposed assignment of the lease from Allan Brooks (the “Tenant”) to Al’s Newsstand, Inc. and the subsequent assignment from Al’s Newsstand, Inc. to Mader News, Inc.
DISCUSSION
The City originally entered into a lease with Allan Brooks for the newsstand space at the front of the Public Parking Structure at 216 South Beverly Drive on October 11, 1988. The City later conveyed the property and assigned the lease to the Parking Authority, which is the landlord.
After operating Al’s Newsstand for over 30 years, the Tenant now desires to assign the lease and sell the newsstand business to Mader News, Inc. Mader News, Inc. is a wholesale newspaper and magazine supplier in Southern California and the current supplier for the Tenant’s business. The proposed assignment would release Allan Brooks and Al’s Newsstand, Inc. from all obligations under the lease following the assignment.
This is in consideration of the financial credibility of Mader News, Inc. and its ability to fulfill the requirements under the lease. The Consent to Assignment does not alter any terms Meeting Date: July 18, 2023
under the current lease agreement, including the allowed uses for the leased space. The assignee will continue to perform the maintenance required under the lease and intends to perform cosmetic improvements to the display area subject to City review and approval.
The lease currently expires March 31, 2027, and does not include any additional options to extend.
The proposed consent document provides the Parking Authority’s consent to the assignment of the lease from Allan Brooks, an individual, to Al’s Newsstand, Inc. and consents to the subsequent assignment of the lease from Al’s Newsstand, Inc. to Mader News, Inc. The Parking Authority shall continue to hold the existing security deposit.
FISCAL IMPACT
There is no fiscal impact or request for funding at this time; the monthly rent obligations remain unchanged and The Parking Authority shall continue to hold the current $1,500 security deposit.
Ryan Gohlich,
Assistant City Manager
Approved By
Attachment 1
ASSET PITRCHASE AGREEMENT
T,1AI
This ASSET PURCHASE AGREEMENT (“Agreement”) is made as of V ‘ , 2023, by and among Mader News, Inc., a California corporation (“Buyer”), Allan Brooks (Assignor”) and Al’s Newsstand, Inc., a California corporation (“Seller”).
NOW, THEREFORE, the parties agree as follows:
Definitions. For purposes ofthis Agreement, the following terms shall have the following meanings:
“Assets” means the Leasehold Estate and the Personal Property. “Closing” means the closing ofthe transactions contemplated herein, which closing shall occur on the Closing Date.
“Closing Date,” unless otherwise agreed to in writing by the parties hereto, means the date which is five (5) business days after the Contingencies, defmed below, have been satisfied. “Landlord Consent” means that certain Landlord Consent, dated as ofthe Closing, among Seller, Buyer and the landlord of the Premises (“Landlord”) approving the assignment of the Lease to Buyer. “Leasehold Estate” means the leasehold estate created under the Lease, including any and all right, title and interest of Seller in and to the Security Deposit. “Personal Propei” means all personal property of Seller located at or used in connection with the Business, including, but not limited to, cash registers, telephone systems, computer and related equipment and software, all furniture, fixtures, furnishings and equipment, and other similar items of Seller which exist on the date of this Agreement, as more particularly described on Exhibit “A” hereto, but specifically excluding bank accounts, cash, lease or other deposits, personal items (to be identified), goodwill. trade name, website, business email addresses, telephone number, fax number, any patron contact data, employee records and operational business records.
‘l’re1nises means that real property located at 2 lb S lieverly L)r, lieverly Hills, Calitorma. “Purchase Price” means Fifiy Thousand Dollars ($50,000). “Lease” means that lease related to the Premises with Seller as the tenant thereunder. “Security Deposit” means the security deposit ofBuyer in the amount of currently on deposit with to the Landlord in furtherance ofthe Lease.
Assignment ofLease. Assignor hereby sells, transfers and assigns that to Seller and Seller hereby accepts said assigmnent and assumes the obligations of Tenant pursuant to and under that City of Beverly Hills Lease--Parking Structure 216 South Beverly Drive” dated October 11, 1988, as amended by three amendments (the “Lease”).
2. Purchase and Sale.
a. Conveyance ofAssets. On the terms and subject to the conditions set forth in this Agreement, on the Closing Date, Seller shall transfer, assign, sell and deliver to Buyer, and Buyer shall purchase, all of Seller’s right, title and interest in and to the Assets. In furtherance hereof and without limitation, Buyer 3272836v6
acknowledges and agrees that it is acquiring the Assets on a strictly “as-is” basis without representation or warranty from Seller, other than as expressly set forth herein. b. Assumption of Liabilities. Buyer shall assume those liabilities of Seller set forth on Exhibit “B”. Other than as set forth on Exhibit “B”, it is expressly understood and agreed that Buyer is not, under any circumstances, assuming any liabilities of Seller whatsoever and that Buyer is not and shall not be liable for any ofthe obligations or liabilities of Seller of any kind and nature. Buyer is not, and the parties do not intend that Buyer is, a successor to Seller’s business andlor that Buyer shall have any liability with respect thereto. c. Allocation of Purchase Price. The parties hereto agree that, for purposes of calculating any tax obligation arising out ofthe sale of Assets pursuant to this Agreement, the Purchase Price shall be allocated by Buyer and it is agreed that the allocations under this Section 1(c) will be binding on all parties for alltax purposes in connection with the purchase and sale of the Assets under this Agreement and will be consistently reflected by each party on its tax returns.
3. Payment of Purchase Price/Refund of Security Deposit. a. Payment of Purchase Price. The Purchase Price shall be paid by Buyer to Seller on the Closing Date.
b. Security Deposit/Inventory. In addition to the Purchase Price, Buyer shall (i) refund to Seller that amount equal to the Security Deposit, and (ii) shall make payment to Seller ofthat amount equal toSeller’s actual cost ofthe inventory on hand as ofthe Closing Date. Tn furtherance hereof: Buyer and Seller shall take stock ofthe inventory immediately prior to the Closing and Seller shall have the right to offset the cost ofthe inventory against sums owing Buyer for purchases ofinventory from Buyer prior to Closing (currently estimatedat Thirty Thousand Dollars ($30,000)).
4. Due Diligence. Buyer has conducted and completed to his satisfaction all due diligence in connection with the transactions contemplated hereby.
5. Representations and Warranties of Seller. Seller represents and warrants, which representations and warranties shall be true and correct as ofthe date hereof and the Closing Date and shall survive the Closing, to Buyer that:
a. Good Standing. Seller is a corporation in good standing under the laws of the State of California.
b. Authorization of Agreement. This Agreement and all other documents to be executed by Seller in connection herewith have been (or upon execution will have been) duly executed and delivered by Seller, have been effectively authorized by all necessary action, corporate or otherwise, and constitute (or upon execution will constitute) legal, valid and binding obligations of Seller. c. Ownership of Assets. Each ofthe Assets is owned by Seller, free and clear of any and all liens, encumbrances, pledges, security interests, or claims of any kind or nature whatsoever. At the Closing, Seller will vest good and marketable title to the Assets in Buyer, free and clear of all liens, security interests, restrictions, prior assigmnents, encumbrances and claims of any kind or nature whatsoever. d. Operating Condition. The Assets are being sold in ‘as-is” “where-is” condition. 32728366
6. Representations and Warranties ofBuyer. Buyer represents and warrants to Seller, which representations and warranties shall be true and correct as ofthe date hereof and the Closing Date and shall survive the Closing, that:
a. Organization and Authority. Buyer has all requisite power and authority to enter into this Agreement and to consummate the transactions contemplated hereby. b. Agreement Not in Breach of Other Instruments. The execution and delivery of this Agreement, the consummation ofthe transactions contemplated hereby and the fulfillment ofthe terms hereof will not conflict with or result in a breach of any ofthe tenns or provisions of, or constitute a default under, orconflict with, any material agreement to which Buyer is a party or by which it is bound, any judgment, decree, order or award of any court, governmental body or arbitrator, or any law, rule or regulation applicable to Buyer,except where such default or conflict would not have a material adverse effect on Seller or Buyer’s ability to effect the transactions contemplated hereby.
7. Employees.
a.) Seller’s Obligations. Seller will terminate all employees ofthe Business no later than the Closing Date and comply in all respects with all applicable laws, rules and regulations with respect thereto including, but not limited to, filing any notices and paying all accrued but unpaid periodic compensation, vacation pay, sick pay and other employee benefits due and owing to such employees. b.) Buyer’s Obligations. Buyer agrees to and shall hire the current employees of Seller as of the Closing Date and retain them as employees of Buyer until such employees either retire or are terminated for cause. Buyer acknowledges and agrees that this agreement by Buyer is material to Seller’s agreement hereunder.
8. Conditions to Closing.
a. Conditions to Obligations of Buyer. The obligations of Buyer to consummate the transactions contemplated hereby shall be, at the option of Buyer, subject to the fulfillment, at or prior to theClosing Date (or such earlier date if so specified below), ofthe following additional conditions:
i. Representations and Warranties True. The representations and warranties of Seller contained in this Agreement or in any other document of Seller delivered pursuant hereto shall be true and correct in all material respects on the Closing Date.
ii. Seller’s Performance, The obligations of Seller to be performed on or before the Closing Date pursuant to the terms ofthis Agreement shall have been duly performed in all respects on or before the Closing Date.
iii. Authority. All actions required to be taken by, or on the part of, Seller to authorize the execution, delivery and perfonnance ofthis Agreement and the consummation ofthe transactionscontemplated hereby shall have been duly and validly taken by Seller and/or the Members, managers, and officersof Seller. iv. Transfer of Lease. The Landlord shall have approved the assigmnent ofthe Lease to Buyer.
b. Conditions to Obligations of Seller. The obligation of Seller to consummate the transactions contemplated hereby shall be, at the option of Seller, subject to the fulfillment, at or prior to the Closing Date, ofthe following additional conditions:
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i. Representations and Warranties True. The representations and warranties of Buyer contained in this Agreement or in any document delivered pursuant hereto shall be true and correct in all material respects on the Closing Date.
ii. Performance of Covenants. Each ofthe obligations ofBuyer to be performed on or before the Closing Date hereunder shall have been performed on or before the Closing Date. c. Failure of Conditions. In the event any ofthe foregoing conditions to either party’s obligation to close the transactions contemplated hereunder are not satisfied by the dates set forth herein with respect thereto, the party in whose favor such condition was set forth shall have, in addition to any other right set forth in this Agreement, the right to waive such condition in which case the parties shall proceed to the Closing or terminate this Agreement by written notice to the other party.
9. Prorations and Adjustments. The parties shall pro-rate the following at the Closing:
a. Utilities. Utility meters will be read, to the extent that the utility company will do so, during the daylight hours oii the Closing Date, with charges to that time paid by Seller and charges thereafter paid by Buyer.
Tavc P’rernl fvc ,f1i r’crr’f i-n f1i A cll 1- nrrrafl fl1rr%Iil1 i-1-, Closing Date; however, such taxes shall be adjusted between the parties hereto from time to time after the Closing Date when such amounts become fixed, ifthe amounts calculated on the Closing Date with respect thereto differfrom such fixed amounts. c. Lease Obligations. Seller’s share of payments under the Lease shall be prorated through the Closing Date.
d. Security Deposit. All of Seller’s right, title and interest in and to the Security Deposit shall be transferred and assigned to Buyer simultaneously with the Closing.
10. No Right to Use Name. Buyer shall not use the name “Al’s Newsstand” or any derivative thereof, nor include the word “Al’s”, in connection with the operation ofits business from the Premises or 11, Consignment Agreement.
a.) Consignment Items. Buyer agrees that following the Closing and for a period ofthree (3) years thereafter, Buyer shall consign from Seller vintage baseball cards, magazine and other paraphernalia as agreed to between Buyer and Seller (“Consignment Items”). b.) Area in Premises. Buyer shall designate an area within the Premises for display ofthe Consignment Items, subject to the approval of Seller. not to be unreasonably withheld. c.) Sales. All sales of the Consignment Items shall be separately coded into Buyer’s point of sale system and easily identified by Seller by type of Consignment Item and selling price. d.) Pricing. Seller shall be solely responsible for the pricing of all Consignment Items. Buyer shall have no right to reduce or increase the sales price set by Seller without Seller’s prior written approval in each instance.
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e.) Commissions. Buyer shall be entitled to receive the following commissions with respect to the sale ofthe Consignment items:
i.) Thirty percent (30%) of the sales price received by Buyer respecting vintage magazine and each framed collectible so sold by Buyer: and ii.). Twenty-five percent (25%) of the sales price received by Buyer respecting each baseball card so sold by Buyer.
f) Payment. Buyer shall make payment to Seller every two (2) weeks ofthat amount equal to seveny percent (70%) ofthe selling price of the subject sold Consigmnent Item, commencing as ofthe date Seller first delivers Consignment Items to Buyer hereunder.
2. Storage. Buyer shall allocate to Seller two (2) pallets within its warehouse located in Burbank for use by S lier for storage, at no charge to Seller. Seller’s rights pursuant to this Section 12 shall terminate on that date eigl teen (18) months from the Closing.
3. Attorney. In lieu of attorney’s fc incurred by Gay L. Harwin, Esquire (“Harwin”), Buyer shall allow Gy L. T-larwin to take such magazines from the Premises, as determined by T-Tarwin, at no charge to Harwin.
4. Tndemnification.
a. Buyer’s Indemnification. Buyer hereby indemnifies and holds the Seller harmless from and against any and all loss, cost, damage, claim, liability, or expense, including reasonable attorney fees and costs, in my way arising from or related to the Buyer’s ownership and use ofthe Assets and the Buyer’s operationof the Business following the Closing Date, including, without limitation, Buyer’s use ofthe Name. b. Seller’s indemnification. Seller hereby indemnifies and holds the Buyer harmless from and against any and all loss, cost, damage. claim, liability. or expense, including reasonable attorney fees andcosts. in my way arising from or related to the Seller’s ownership and use ofthe Assets and the Seller’s operation of’ the Business prior to the Closing Date.
15. Miscellaneous.
a. Arbitration. In the event that the parties are unable to informally resolve any dispute arising out of or related to this Agreement and/or the Company C’Dispute”), then such Dispute shall be submitted to final and binding arbitration. The arbitration shall be initiated and conducted according to either the JAMS Streamlired (for claims under $250,000) or the JAMS Comprehensive (for claims over $250,000) Arbitration Rules and Procedures, except as modified herein, including the Optional Appeal Procedures, at the Los Angeles office ofJAMS, or its successor (“JAMS”) in effect at the time the request for arbitration is made (the “Arbitraton Rules”). The arbitration shall be conducted in Los Angeles County before a neutral arbitrator appointec. in accordance with the Arbitration Rules. The arbitrator shall follow California law and the Federal Rules ofEvidence in adjudicating the Dispute. The parties waive the right to seek punitive damages and thearbitrator shall have no authority to reward such damages. Unless the parties agree otherwise, the neutral arbitrator and the members of any appeal panel shall be former or retired judges or justices of any California state or federal court. If either party refuses to perform any or all ofits obligations under the final arbitration award (following appeal, if applicable) within thirty (30) business days ofsuch award being rendered, then the other party ma enforce the fmal award in any such court of competent jurisdiction in Los Angeles County. The party seeking e:forcement shall be entitled to an award of all costs, fees and expenses, including reasonable outside )
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attorneys’ fees, incurred in enforcing the award, to be paid by the party against whom enforcement is ordered.
Any Dispute or portion thereof, or any claim for a particular form ofrelief (not otherwise precluded by any other provision ofthis Agreement), that may not be arbitrated pursuant to applicable state or federal law may be herd only in a court of competent jun sdiction in Los Angeles County, California, United States of America. b. Assignability. This Agreement shall inure to the benefit of and be binding upon Buyer and Seller and their respective permitted successors and assigns. c. Governing Law. This Agreement shall be governed by the laws ofthe State ofCalifornia. d. Counteiparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, all of which shall constitute but one and the same instrument. e. Indemnification for Brokerage. Each party hereto agrees to indemnify and hold and save harmless the others from any other claim or demand for commissions or other compensation by any broker, finder or similar agent claiming to have been employed by or on behalf ofsuch party.
Complete Agreement. This Agreement, the Exhibits hereto, and the documents delivered or to be delivered pursuant to this Agreement contain or will contain the entire agreement between the parties hereto with respect to the transactions contemplated herein and shall supersede all previous oral and written and all contemporaneous oral negotiations, commitments, and understandihgs. g. Modificatiom Waiver. No modification or amendment ofthis Agreement shall be valid unless made in writing and executed by the parties hereto. No waiver of any provision hereof shall be validunless made in writing and executed by the party making the waiver. No waiver of any ofthe provisions ofthis Agreement shall be deemed or shall constitute a waiver of any other provision hereof(whether or not similar), nor shall such waiver constitute a continuing waiver unless otherwise expressly provided. h. Severability. Any provision ofthis Agreement which is invalid, illegal, or unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective only to the extent of such invalidity, illegality, or unenforceability, without affecting in any way the remaining provisions hereofin such jurisdiction or rendering that or any other provision ofthis Agreement invalid, illegal, or unenforceable in any other jurisdiction. i. Representation. Buyer acknowledges that Harwin represents Seller and Assignor with respect to the within transaction and this Agreement.
[STGNATURES ON FOLLOWTNG PAGE.]
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By
SIGNATuRE PACE
ASSET PURCI-TASE AGREEMENT
AL’S NEWSSTAND, INC. (SELLERI
MADER NEWS4 INC. (BUVERI
‘Buyer”
Mader News, Inc., a California corporation
7 “Seller”
Al’s
By
Allan Brooks
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EXHIBIT ‘A”
PERSONAL PROPERTY
The following items of personal property located at the Premises as ofthe Closing:Display fixtures Display racks
Shelving
Storage cabinets
Magazine and newspaper racks, shelves, and displays
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EXHIBIT “B”
ASSUMED LIABILITIES
NONE
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