Exhibit 10.1
ASSET PURCHASE AGREEMENT
CONTENTS
RECITALS
I. Defined Terms
1.1
Accounts Receivable
1.2
Agreement
1.3
Buyer
1.4
Business Agreements
1.5
Business
1.6
Business Records
1.7
Closing
1.8
Closing Date
1.9
Escrow Account
1.10
Escrow Fund
1.11
Goodwill
1.12
Intellectual Property Rights
1.13
Liabilities of the Business
1.14
Licenses and Authorizations
1.15
Most Recent Financial Statements
1.16
Permitted
Exceptions
1.17
Promissory Note
1.18
Purchase Price
1.19
Seller
1.20
Termination Date
II. Purchase
and Sale of Assets
2.1
Sale of Assets
2.2
Purchase Price and Method of Payment
(a) Purchase Price
(b) Method of Payment
(c) Allocation of
Purchase Price
2.3
Delivery of the Business Assets
III. Closing
3.1
Closing
3.2
Prorations
3.3
Transfer Taxes, Etc.
3.4
Costs and Expenses
3.5
Performance by Seller at Closing
3.6
Performance by Buyer at Closing
3.7
Approval of Documents
IV. Representations and Warranties of Seller
4.1
Organization, Corporate Power and Authority
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4.2
Authorization, Binding Effect and No Conflicts
4.3
Consents and Approvals
4.4
Accounts Receivable
4.5
Business Agreements
4.7
Intellectual Property Rights
4.8
Licenses and Authorizations
4.9
Financial Statements
4.10
Litigation
4.11
No Broker
4.12
Disclosure
4.13
Compliance with Laws
4.14
Non-foreign Status
V. Representations and Warranties of Buyer
5.1
Organization, Corporate Power and Authority
5.2
Authorization, Binding Effect and No Conflicts
5.3
Consents and Approvals
5.4
Availability of Funds
5.5
No Broker
VI. Covenants
of Seller
6.1
Investigation and Access
6.2
Operation of the Business by Seller
6.3
Negative Covenants of Seller
6.4
Accounts Receivable
6.5
Further Assurances
VII.
Conditions Precedent
to Closing
7.1
Seller's Performance
7.2
Buyer's Performance
VIII.
Indemnification; Risk of Loss
8.1
Assets to Be Conveyed
8.2
Indemnification of Buyer
8.3
Indemnification of Seller
8.4
Risk of Loss
IX.
Termination
9.1
Right to Terminate Before Closing
9.2
Specific Performance in the Event of Seller's
Failure to Close
X.
Miscellaneous
10.1
Schedules and Exhibits
10.2
No Assignment, Successors, Assigns, Etc.
10.3
Construction
10.4
Counterparts
10.5
Survival of Representations and Warranties
10.6
Notices
10.7
Amendment
10.8
Entire Agreement
10.9
Waiver
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THIS ASSET PURCHASE
AGREEMENT (the
"Agreement")
is made and
entered
into as of this 29th day of July, 2008, by and between Coffee Exchange of The
America's Corporation,
Inc., a Nevada
corporation
(hereinafter referred to as
"Seller"), and Coffee Exchange, Inc., a Nevada corporation
(hereinafter referred
to as "Buyer").
RECITALS
A. Seller is
engaged in the business of operating coffee shops.
B. Seller desires to sell to Buyer certain Business Assets used in the
Seller's business, and
Buyer desires to purchase the same, all on the terms and
conditions set forth in this Agreement.
NOW, THEREFORE,
in consideration of the mutual representations,
warranties, covenants
and agreements contained herein, and subject to the
conditions hereinafter set forth, Seller and Buyer hereby agree as
follows:
I.
Defined Terms
For purposes of this Agreement, the following capitalized terms will
have the meanings
set forth below, unless the context clearly indicates
otherwise.
1.1 "Accounts
Receivable"
means all accounts receivable as of the
Closing Date. The Accounts Receivable will be listed and
valued as of the close
of business on the day preceding the Closing Date.
1.2 "Agreement" means this Asset Purchase Agreement.
1.3 "Buyer" is defined
in the first paragraph
of this Agreement as
Coffee Exchange, Inc.
1.4 "Business Agreements" means those certain agreements, contracts
and
commitments entered
into by Seller in
connection with the
Business, as more
particularly described
on Schedule I attached
hereto, including all
renewals,
extensions and modifications thereof.
1.5 "Business
Assets" means the assets of Sellers to be
purchased by
Buyer pursuant to this
Agreement, consisting
of the (i) the facilities leases
for coffee shop stores, (ii) coffee shop equipment and
fixtures (iii) Good Will
associated with these Agreements, if any.
1.6 "Business Records"
means all logs, books,
and business
records,
operating manuals,
and other files and
documentation (or true
copies thereof)
pertaining to the
Business Assets and
the operation
of the Business
Assets,
including (i) audited
balance sheets, statements of income, statements of
changes in stockholders equity and statement of cash flow
for since
inception,
(ii) the Most Recent Financial Statements, and (iii) federal, state and local
income tax returns filed by Seller since inception.
1.7 "Closing" means
the closing of the purchase and sale of the Assets
in accordance with this Agreement.
1.8 "Closing Date" means the date specified in Section 3.1 on which
the
Closing will take place.
1.9 "Escrow Account"
means a deposit account at Bank of America, Fort
Worth, Texas.
1.10 "Escrow
Fund" means the sums to be held in
escrow pursuant
to
Section 8.2(c) in the event of a dispute between the Buyer and
Seller concerning
Buyer's right to indemnification from Seller.
1.11 "Goodwill"
means the goodwill of the Business Assets, to the
extent such exists.
1.12 "Intellectual Property Rights" means all trade names,
trademarks,
trademark
applications, patents,
patent applications,
copyrights,
copyright
applications and similar intangible rights used by Seller in
connection with the
<PAGE>
Business and more particularly described in Schedule V attached
hereto. The term
includes, without
limitation, the right
to use the name "Javalato and Gridiron
Grinds."
1.13
"Liabilities of
the Business" means all liabilities and
obligations that arise from or are related to the operation and
ownership of the
Business (whether liquidated or unliquidated, absolute or contingent,
known or
unknown, due or to
become due, and whether arising before or after the
Closing
Date), including,
but not limited to,
obligations
arising under the
Business
Agreements.
1.14"Licenses
and Authorizations" means all licenses, permits, and
authorizations issued
by government
agencies necessary to the ownership and
operation of any of
the Assets or the Business, all as more particularly
described on Schedule II.
1.15 "Most Recent
Financial Statements"
means the unaudited
balance
sheet, statement
of income,
statement of change in stockholders equity and
statement of cash flow for since Seller's inception.
1.16 "Permitted
Exceptions"
means those exceptions described on
Schedule III which Buyer has agreed in writing to accept.
1.17 "Promissory
Note" means that note
between Coffee Exchange of The
America's, Inc. and
Javalato LLC, a Texas limited liability company dated
January 31,
2008 with a principal balance of Two Hundred Forty Thousand
($225,000.00) Dollars
bearing interest at
the rate of Seven (7.0%) percent per
annum attached as Exhibit " A ".
1.18 "Purchase Price"
means the price
specified in Section 2.2 hereof
to be paid by Buyer to Seller at Closing.
1.19 "Seller" is
defined in the first
paragraph of this
Agreement as
Coffee Exchange of The America's Corporation.
1.20 "Termination
Date" means the date specified in Section 9.1 on
which this Agreement will terminate if Closing has not taken place.
II.
Purchase and Sale of Assets
2.1 Sale of Assets. On
the Closing
Date, Seller will sell, convey
assign, transfer and
deliver to Buyer, and Buyer will purchase and acquire from
Seller, all of Seller's right, title and interest in and to the
Business Assets.
2.2 Purchase Price and Method of Payment.
(a) Purchase Price.
At Closing,
Buyer will pay to
Seller as
full consideration
for the Business Assets (i) the sum of Two Hundred
Forty
Thousand ($300,000.00)
Dollars payable in Buyer's corporate common stock
totaling Eleven
Million Five Hundred Thousand (11,500,000) common shares,
together with (ii) the assumption of Seller's liabilities listed on Exhibit C,
(the "Purchase Price").
(b) Method of Payment. On the Closing Date, Buyer will deliver
to Seller one share certificate representing Eleven Million Five Hundred
Thousand (11,500,000)
common shares of Coffee Exchange, Inc. In addition to
Buyer's delivery of the shares, buyer will deliver an Assumption
and Assignment
Agreement for the Business Assets and liabilities.
(c) Allocation of Purchase Price. The Purchase Price will be
allocated for all purposes by the parties as follows:
(i) $130,000
allocated to the equipment.
(ii)
$ 40,000 allocated to furniture.
(iii)
$130,000 allocated to leasehold improvements.
<PAGE>
(d) Tax Reporting of Allocations. Buyer and Seller will report
the sale and purchase
of the Assets for all federal, state, local and foreign
tax purposes
in a manner
consistent
with the allocation set forth in this
Section 2.2(c).
2.3 Delivery of the Business Assets. Buyer will take delivery of all
Assets at Closing by Assignment and Assumption Agreement the form of which is
set forth in Exhibit "B".
III.
Closing
3.1 Closing. The
Closing of the purchase and sale contemplated by this
Agreement (the
"Closing") will take place on July 31, 2008 (the "Closing
Date")
at the offices of Coffee Exchange, Inc. or at such other time or
place as will
be agreed by the parties in writing; provided, however, that all conditions
to
the Closing herein set forth will have been satisfied.
3.2 Prorations. The operation of the Business Assets and all income
and
expenses attributable thereto through the close of business on the
day preceding
the Closing Date will be for the account of Seller. Thereafter, the
operation of
the Business and all income and expenses attributable thereto will be for the
account of Buyer. Expenses such as power and utility charges,
property taxes and
assessments, rents,
license fees, dues, subscriptions, and other charges,
prepaid and deferred items, and all other items of income and
expense connected
with the Business will
be prorated between
Seller and Buyer as of
the Closing
Date. All prorations
will be made and paid
in cash within ten (10) days of the
Closing Date.
3.3 Transfer
Taxes, Etc. To the extent applicable, any retail
sales/use/transfer
taxes due as a result
of the purchase and sale of Assets
contemplated hereby
will be paid entirely by Seller, and Seller will indemnity
and hold Buyer harmless therefrom.
3.4 Costs and
Expenses. Except as
otherwise provided in
Sections 3.2
and 3.3, each party will separately bear the costs and expenses
incurred by it
in connection with
this Agreement and the
transactions
contemplated
hereby;
provided, however,
that if any party will commence legal action to specifically
enforce or otherwise seek redress under, or for breach of, this
Agreement,
the
prevailing party in
such action
will be entitled to recover its costs and
reasonable attorneys' fees incurred to prosecute or defend the
action, including
costs and fees incurred in any appellate proceeding.
3.5 Performance Seller at Closing. At Closing, Seller will deliver to
Buyer the following:
(a) An Assignment
and Assumption Agreement in the form of
Exhibit B sufficient to convey to Buyer all right, title and interest of Seller
in and to the Business
Agreements and all
other intangible
assets that are a
part of the Assets.
(b) A certified copy
of a resolution
of Seller's board of
directors authorizing
the execution of this Agreement and the transactions
contemplated hereby.
(c) A certificate of
Seller to the effect that all warranties
and representations
of Seller herein are true and correct as of the Closing
Date.
(d) All other
instruments and
documents that Buyer or its
counsel, in the
reasonable
exercise of their discretion, will deem to be
necessary (x) to
fulfill any obligation
required to be
fulfilled by Seller on
the Closing Date, and (y) to evidence satisfaction of any conditions to
Closing
referred to in Section 7.2 hereof.
3.6 Performance by Buyer at Closing. At Closing, Buyer will deliver to
Seller the following:
(a) 11,500,000 shares of Buyer's common stock;
(b) Assignment and Assumption Agreement whereby Buyer
assumes
Seller's liabilities listed on Exhibit C.
<PAGE>
(c) A
certified copy of a resolution of Buyer's board of
directors authorizing this transaction.
(d) A certificate of
Buyer to the effect that all warranties
and representations
of Seller herein are true and correct as of the Closing
Date.
(e) All other
instruments and
documents that Seller or its
counsel, in the
reasonable
exercise of their discretion, will deem to be
necessary (x) to fulfill any obligation required to be fulfilled by
Buyer on the
Closing Date,
and (y) to evidence
satisfaction
of any conditions to Closing
referred to in Section 7.2 hereof.
3.7 Approval of
Documents.
Unless otherwise provided herein, all
instruments and documents delivered pursuant to this
Agreement will be dated as
of the Closing
Date, and will be satisfactory to the parties and to their
respective counsel as to form and content
IV.
Representations and Warranties of Seller
Seller represents and
warrants to Buyer that the following statements
are true and correct
on the date hereof,
and will be true and
correct on the
Closing Date as though made on such date:
4.1
Organization,
Corporate Power
and Authority. Seller is a
corporation duly organized, validly existing and in good standing
under the laws
of Nevada, and has the
requisite corporate power and authority to execute,
deliver and
perform this Agreement and to consummate the transactions
contemplated hereby.
4.2 Authorization,
Binding Effect and No Conflicts.
The execution,
delivery and
performance by Seller
of this Agreement and the consummation by
Seller of the transactions contemplated thereby have been duly
authorized by all
necessary corporate
action on the part of Seller. This Agreement has been duly
and validly executed
and delivered by Seller and constitutes the valid and
binding obligation of Seller, enforceable in accordance with its
terms, subject
to (i) applicable
bankruptcy,
insolvency
or other similar laws relating to
creditors' rights
generally,
and (ii) general principles of equity. The
execution, delivery
and performance by Seller of this Agreement and the
consummation by Seller
of the transactions
contemplated
hereby will not (x)
violate any provision of law, rule or regulation to which Seller is
subject, (y)
violate any order,
judgment or decree
applicable to Seller,
or (z) conflict
with, or result in a
breach or default
under, any term or condition of the
Articles of
Incorporation or the
Bylaws of Seller, or
any agreement or
other
instrument to which
Seller is a party or by which Seller may be bound; except,
in each case, for
violations,
conflicts,
breaches or
defaults which in the
aggregate would
not materially hinder or impair the consummation of the
transactions contemplated hereby.
4.3 Consents and Approvals. Neither the execution of this Agreement
nor
the consummation
of the sale of the
Assets requires the approval or consent of
any governmental
authority having
jurisdiction over the business of Seller nor
of any party to any agreement with Seller.
4.4
Accounts Receivable. All Accounts Receivable of the Seller are
reflected properly on their books and records, are valid receivables subject
to
no set offs or counterclaims, are presently current and
collectible, and will be
collected in accordance with their terms at their recorded amounts,
subject only
to the reserve for bad debt set forth in the Most Recent
Financial Statements,
as adjusted for the passage of time through the Closing Date in
accordance with
past customs and practices of the Seller.
4.5 Business
Agreements. The
Business Agreements listed on Schedule I
hereto constitute valid and binding obligations of Seller and are in
full force
and
