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                                                                   EXHIBIT 10.2


                           JERRY'S FAMOUS DELI, INC.
                       12711 Ventura Boulevard, Suite 400
                         Studio City, California  91604

                                November 4, 1996


Mr. Kenneth J. Abdalla
Waterton Management, L.L.C.
10000 Santa Monica Boulevard, 5th Floor
Los Angeles, California  90067


Dear Ken:

         This letter will confirm our understanding with respect to the
purchase by Waterton Management, L.L.C., or any of its designees ("Waterton"),
of Series A Preferred Shares convertible into shares of Common Stock of Jerry's
Famous Deli, Inc. (the "Company").  The Company has previously agreed with
Waterton that, upon the completion of the Nasdaq waiver and Hart-Scott-Rodino
process the Company will issue a new class of Series B Preferred Shares with
the same terms as the Series A except that the Series B will have voting rights
equal to 109 shares of Common Stock for each preferred share. Waterton will
have the right to convert all Series A Preferred Shares into Series B Preferred
Shares.  Waterton has purchased $6,000,000 of Preferred Shares and has options
("Options") to purchase an additional $6,000,000 and $7,000,000 of Preferred
Shares in two tranches pursuant to agreements and side letters, including and
through the side letter dated October 31, 1996 delivered to you on November 4,
1996,  previously executed by the Company and the Starkman Family Trust
("Option Documentation").

         The Company and the Starkman Family Trust have agreed, in
consideration of Waterton exercising on the next tranche of $6,000,000 by
November 7, 1996, to grant Waterton an option to purchase an additional
$6,000,000 of Series A Preferred Shares ("Additional Option") upon the same
terms and conditions with the same conversion rights (including the right to
convert Series A Preferred Shares into Series B Shares) and pro-rata amount of
warrants as issued with the prior tranche of Preferred Stock and to be issued
upon exercise of the Options, all with the same registration rights, and
intends to document the Additional Option with mutually satisfactory
documentation substantially the same as the Option Documentation.  The
Additional Option shall be exercisable up and until thirty (30) days after the
exercise period of the last of the Options. Each of the Company and the
Starkman Family Trust agrees to use its best efforts to expand the waiver
previously received from Nasdaq with respect to the shares issuable pursuant to
the Additional Option, to the same extent as agreed by each of them in the
letter to you dated August 26, 1996.





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         Please confirm your understanding of and agreement to the above terms
by signing below and returning a signed copy of this letter to me.





                                  Sincerely yours,


                                  /s/ Isaac Starkman

                                  Isaac Starkman
                                  President
                                  Jerry's Famous Deli, Inc.
                                  and Trustee, The Starkman Family Trust

Agreed and Accepted:

Waterton Management, L.L.C.


By: /s/ Kenneth J. Abdalla
    Kenneth J. Abdalla
    Managing Member
Date: 11/7/96