ASSET PURCHASE AGREEMENT
This Agreement made and entered into this , 1998, by and between
New World Coffee & Bagels, Inc., a Delaware corporation having its principal
place of business at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ("Seller")
and _____________ residing at _________________________________("Purchaser").
WHEREAS, New World Coffee & Bagels, Inc. owns and operates a store under
the federally registered service ▇▇▇▇ "NEW WORLD COFFEE" and desires to sell
substantially all of the assets of said business under the terms and
conditions set forth below; and
WHEREAS, simultaneous with the execution of this Agreement, Purchaser
has entered into a Franchise Agreement ("Franchise Agreement") with New World
Coffee & Bagels, Inc.; and
WHEREAS, Seller owns and operates a "NEW WORLD COFFEE" store located
within the geographical area described in the Franchise Agreement
("Territory"); and
WHEREAS, Purchaser recognizes that the "NEW WORLD COFFEE" business as
presently conducted represents an ongoing business and has value as an
ongoing business aside and apart from the value of the rights granted to
Purchaser pursuant to the separate Franchise Agreement with New World Coffee
& Bagels, Inc.
NOW, THEREFORE, the parties, in consideration of the undertakings and
commitments of each part to the other set forth in this Agreement, hereby
agree as follows:
1. Closing Date. The Closing of this transaction ("Closing Date")
shall be on or before , 1998 unless said Closing Date is
extended by the mutual agreement of the parties.
2. Sales and Purchase.
A. Upon the terms and subject to the conditions set forth in this
Agreement, Seller agrees to sell, convey, transfer, assign and deliver to
Purchaser, and Purchaser agrees to purchase and acquire from Seller on or
before the Closing Date, the following assets of Seller:
i) Seller's interest in and to the leasehold improvements in the
Premises;
ii) All signs, furniture, fixtures, equipment and inventory,
except as otherwise noted in this Agreement, located on the Premises;
iii) Seller and Purchaser mutually understand and agree that
the Sale shall not include items located on the Premises in which title is
held by third parties. Additionally, Purchaser understands that the sale
does not include the sale, by Seller to Purchaser, of the right to use the
name, trademarks or the trade name "NEW WORLD COFFEE" ("Marks") nor any other
intangible rights granted under the Franchise Agreement, but that the
separate Franchise Agreement entered into by New World Coffee & Bagels, Inc.
and Purchaser governs the use of the Marks by the Purchaser, it being
specifically understood and agreed that all intangibles being conveyed
hereunder are subject to the rights of New World Coffee & Bagels, Inc. under
the Franchise Agreement. Further, this sales does not include Seller's
prepaid expenses, cash on hand or deposit or its accounts receivable as of
the Closing Date. All accounts receivable sent to Purchaser shall be
immediately turned over to Seller in the form received and Seller may endorse
and deposit such payments as its own. Purchaser and Seller mutually
understand that the herein contemplated sale is of assets constituting a "NEW
WORLD COFFEE" business and that there is a transfer of "goodwill".
The address of the business to be purchased is as follows:
________________________
B. Seller shall deliver on or before the Closing Date, a ▇▇▇▇ of
Sale conveying the assets to Purchaser.
C. New World Coffee & Bagels, Inc. and Purchaser shall execute a
Sublease Agreement for the Premises.
D. Purchaser has inspected the Premises and agrees to accept all
equipment, inventory and other assets assigned, sold or conveyed under this
Agreement "as is" without any warranties by Seller as to merchantability or
fitness for a particular purpose or that any such equipment, inventory and
other assets are in working condition.
E. The Purchase Price shall be allocated to the assets of the
Business by Purchaser.
3. Consideration. As consideration for the purchase herein described,
Purchaser agrees to pay to Seller the sum of _______________ ($_) Dollars,
which sum includes the Initial Franchise Fee payable under the Franchise
Agreement, as follows:
______________________ ($_) Dollars, which was paid at the signing
of the Franchise Agreement;
______________________ ($_) Dollars upon execution of this
Agreement;
C. ______________________ ($_) Dollars at the Closing Date;
D. ______________________ ($_) Dollars in notes payable with
interest at the rate of ______ (__) percent above the prime rate
of interest as set by Citibank in equal monthly installments for
_______ (__) years commencing _______ (__) days after
possession. At Seller's option the amounts may be deducted from
Purchaser's bank account. The note will be secured by a
Security agreement in the form set forth on Exhibit A, on the
Assets being sold hereunder. UCC-1 documents shall be executed
and filed as required.
4. Conditions to the Obligations of Seller. The obligations of Seller
under this Agreement are expressly subject to the delivery at Closing by
Purchaser of such cash payments as are necessary to comply with the terms of
this Agreement and New World Coffee & Bagels, Inc.'s Franchise Agreement of
which this Agreement is a part.
5. Purchaser's Inspection. Purchaser acknowledges that it has examined
the business being conveyed and, in entering into this Agreement, relies
solely on its own investigation of the "NEW WORLD COFFEE" facility and
business. In connection therewith, Purchaser understands that the results of
the operation of the business as a company or other Purchaser owned and
operated "NEW WORLD COFFEE" businesses may not be indicative of the results
which may be expected under Purchaser's operation. Neither Seller nor New
World Coffee & Bagels, Inc. specially make any representation whatsoever
concerning the success of the business or any future profits to be derived
from the Purchaser's operation of a business on the Premises.
6. Operations Information. Seller, prior to the execution of this
Agreement, has provided Purchaser with such information as Purchaser, deemed
necessary with respect to the operation of the business. Purchaser relies
solely upon Purchaser's own knowledge and information in entering into this
Agreement. Purchaser acknowledges that in entering into this Agreement
Purchaser is not relying upon representations made by Seller, New World
Coffee & Bagels, Inc., or agents of New World Coffee & Bagels, Inc., either
express or implied, except those specifically made in this Agreement and the
New World Coffee & Bagels, Inc. Franchise Agreement, all of which have been
carefully reviewed by the Purchaser with the aid of his independent legal
counsel.
7. Debts and Liabilities. Seller shall pay all debts and liabilities
incurred in connection with its business prior to the Closing Date, none of
which are being assumed by Purchaser. The parties intend for Purchaser to
acquire ownership of the assets being purchased herein free and clear of all
claims.
8. Severability. The invalidity or unenforceability of any particular
provision of this Agreement shall not affect the other provisions, and this
Agreement shall be construed in all respects as if such invalid or
unenforceable provision had not been contained herein.
9. Construction. Whenever in this Agreement a singular word is used,
it shall also include the plural whenever required by the context and vice
versa.
10. Survival. All warranties, representations, covenants,
obligations and agreements contained in this Agreement and in the Franchise
Agreement shall survive the Closing of this transaction.
11. Allocation of Costs. It is agreed by Purchaser and Seller that
the costs of this transaction shall be apportioned as follows:
A. As of the Closing Date, all real and personal property taxes
against the Premises and the Equipment, all assessments levied or assessed
against the Premises and all other charges or fees relating to the Premises
but not otherwise expressly addressed in this Agreement shall be prorated
between Purchaser and Seller on the basis of a thirty (30) day month and a
three hundred sixty-five (365) day year.
B. Purchaser shall pay the cost of revenue stamps, documentary or
other transfer taxes or fees, if any.
C. Seller and Purchaser hereby warrant, each to the other, that
there are no commissions due any real estate or other brokers or finders
resulting from the transactions contemplated by this Agreement by reason of
any contract, listings or any dealings by Seller or Purchaser with any broker
in regard to this transaction. Each party hereby agrees to indemnify and
hold harmless the other with respect to any such claims from any broker
claiming to have dealt with or had a contract with that party.
D. All other Closing charges or other expenses not otherwise
chargeable specifically to Purchaser or Seller herein, shall be borne equally
be Purchaser and Seller.
E. In the event this transaction fails to close for any reason, the
party failing to close shall be liable for any and all fees and costs
associated with this transaction accruing up to and including the date of
said termination. This paragraph is not to be deemed to be a liquidated
damages provision nor is it to be construed to in any way limit the rights
the parties hereto may otherwise have at law or in equity.
12. Pre-Closing Checklist. Seller and Purchaser agree that the
following matters will be completed at the time of closing or at a time
indicated below:
A. Ensure that the landlord and utility companies have the proper
cut-off date for common area charges.
B. Notify Seller's insurance company and Purchaser's insurance
company.
C. Notify employees of store being sold.
D. Ensure that all sales tax remittances and payroll taxes are made
through the day of transfer.
13. Amendments. This Agreement may be amended only by a written
instrument executed on behalf of both Purchaser and Seller.
14. Successors. This Agreement and the terms and provisions hereof
shall inure to the benefit of and be binding upon the successors and assigns
of the parties hereto.
15. Attorney's fees. In the event that either party to this
Agreement brings an action against the other party by reason of breach of any
condition, covenants, representation or warranty in this Agreement, or
otherwise arising out of this Agreement, the prevailing party in such action
shall be entitled to recover from the non-prevailing party costs of suit,
including, but not limited to, reasonable attorney's fees in an amount to be
set by the court rendering such judgment.
16. Integration. This Agreement and the New World Coffee & Bagels,
Inc. Franchise Agreement of which it is a part constitute the entire
agreement between the parties and supersedes all prior discussions,
negotiations and agreements whether oral or written.
17. Governing Law and Choice of Venue. This Agreement shall be
construed according to and governed by the laws of the Sate of New York. Any
actions brought based upon this agreement shall be had in the court of
appropriate jurisdiction sitting in Superior court, Manhattan, or, where
applicable, the United States District Court for the Southern District of New
York.
18. Closing. The transaction contemplated herein shall be
consummated at a Closing at a date mutually agreeable to Seller and
Purchaser.
19. Adjustments. Insurance and all other operating charges in
connection with the sale of assets shall be prorated between Seller and
Purchaser as of the date of the Closing herein.
20. Purchaser's Indemnity. Purchaser shall indemnify and save Seller
harmless from and against any and all claims, demands, actions, controversies
and suits, and all liabilities, losses, damages, costs, charges, counsel fees
and other expenses of every nature and character, arising by reason or
resulting from (i) anything done, suffered to be done or omitted to be done
by Purchaser in relation to the Asset Purchase Agreement or the Seller's
business on or after the date of Closing, or (ii) any payment required to be
made by Seller with respect to any of Seller's liabilities or obligations in
respect of the Asset Purchase agreement or the Seller's business accruing on
or after, or attributable to events arising on or after, the date of Closing.
21. Notices. Any notice, request, demand, instruction or other
communication to be given to the parties hereto shall be in writing and
delivered in person or sent by registered mail, certified mail, express mail
or other recognized courier service that confirms delivery, postage or
charges prepaid, to the addresses below, or to such other person or address
as the parties hereafter designate:
If To Seller: President
New World Coffee & Bagels, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
If To Purchaser:________________
________________
________________
________________
Notices shall be deemed given upon receipt.
PAGE
22. Additional Covenants.
A. Seller agrees to cap Purchaser's rent for the store at
( %) percent of sales until such time as Purchaser attains
( ) weeks of sales of at least
($ ) Dollars
(i.e. annualized sales of $ ) within a (
) week period.
B. Seller undertakes to retrofit the store in accordance with
Seller's standard bagel retrofit plans, which will be reviewed with
Purchaser. Seller will continue to manage and operate the store for Seller's
account until such retrofit has been completed, after which Purchaser shall
take immediate possession upon notice. Seller will use new equipment subject
to manufacturer's warranties in such retrofit.
C. Purchaser shall apply for outside financing within fifteen (15)
days of Closing which financing shall replace the aforesaid promissory note.
23. Time of the Essence. Time is of the essence as to each and every
provision of this Agreement.
24. Counterparts. This Agreement shall be executed in counterparts
and each such counterpart shall be deemed an original.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the day and year first above written.
NEW WORLD COFFEE & BAGELS, INC.
By:
Title:
FRANCHISEE
By:
Title: