ASSET PURCHASE AGREEMENT
THIS ASSET
PURCHASE AGREEMENT (the "Agreement"), made and executed as of ,
2005 (the "Effective Date"), by and among J
& J BAGEL
ENTERPRISES, INC.,
D/B/A
THE BAGEL CLUB, a New Jersey corporation ("Seller"), having as its principal
place of business at 20 Commerce Street, in
the Borough of Flemington, County of
Hunterdon and State of New Jersey,
and THE CERTO GROUP,
LLC (the
"Purchaser"),
having an address at 201 Circle
Drive North,
Building 112, in the Township of
Piscataway, County of Middlesex and State
of New Jersey.
W I T N E S S E T H
---------------------
WHEREAS,
upon the terms and
subject to the
conditions
set forth in this
Agreement, Purchaser desires to purchase from
Seller and Seller desires to sell
to Purchaser, substantially all of the assets of Seller,
as more
particularly
described herein, in consideration for the
payments from Purchaser as set forth
herein;
N O W T H E R E F O R E
--------------------------
In consideration of the foregoing and the respective representations,
warranties, covenants, agreements and
conditions hereinafter set forth, and for
other good and valuable consideration, the receipt and sufficiency of
which by
each of the parties hereto is hereby
acknowledged,
the parties hereto
agree as
follows:
1. The Sale and Purchase
1.1 Sale and Purchase
of Assets.
Upon the terms and
subject to the
conditions set forth herein, at the Closing (as defined
herein), Seller shall
sell, convey, transfer, assign and deliver to Purchaser,
and Purchaser
shall
purchase, acquire and accept from
Seller, all of Seller's right, title and
interest in and to, all properties, assets, contracts and rights, wherever
located, as set forth below, and as the
same may exist on the Effective Date (as
defined herein) (the "Business and Business
Assets" or the
"Assets") except for
the Excluded Assets set forth in Section
1.3 below, including,
but not limited
to:
(A) All
right, title and interest of Seller in and to the
contracts, agreements, leases, arrangements,
instruments and
documents related
to Seller's existing bagel restaurant business operated at the two locations
described in Sections 2.2(B)(iv) and 2.2(B)(v) (the "Business"), including,
without limitation, those items specified
on Schedule 1.1(A);
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(B) All
property of Seller
used or held for use in the Business
that is capable of being transferred,
including, without limitation, those items
specified on Schedule 1.1(B);
(C) All right,
title and interest of Seller under the real and
personal property leases used or held for the use in the Business that are
capable of being transferred, including, without limitation, those items
specified on Schedule 1.1(C);
(D) All customer
lists, goodwill and
other intangible
assets of
the Seller related to the Business,
including,
without limitation,
those items
specified on Schedule 1.1(D); and
(E) All
inventories, supplies
and similar tangible assets of the
Seller related to the Business
generated by the
Business, including,
without
limitation, those items specified on
Schedule 1.1(E).
1.2 Purchase Price and
Promissory Notes.
The purchase price for
the
Assets shall be the amount of THREE
HUNDRED NINETY-TWO THOUSAND ONE HUNDRED
SEVENTY-EIGHT and 50/100 ($392,178.50) DOLLARS (the "Purchase
Price"), plus
interest only as to the portions of the Purchase
Price described in Sections
1.2(B)(i) and 1.2(B)(ii) below, for an
aggregate
consideration in the amount of
FOUR HUNDRED THOUSAND DOLLARS ($400,000.00), payable by Purchaser in cash,
by
cashiers check, or by wire transfer of
immediately available funds to an account
designated by Seller according to the
schedule of payments established herein;
(A) ONE HUNDRED FIFTY THOUSAND ($150,000.00) DOLLARS payable at
Closing; and
(B) The balance of the
purchase price of TWO
HUNDRED FORTY TWO
THOUSAND ONE HUNDRED SEVENTY-EIGHT and 50/100 ($242,178.50) DOLLARS shall be
payable in the following manner:
(i) FORTY NINE
THOUSAND NINETY-ONE
and 25/100 ($49,091.25)
DOLLARS which shall be paid in Twelve (12)
consecutive equal amortizing monthly
installments of principal and interest in the amount of FOUR THOUSAND ONE
HUNDRED SIXTY-SIX and 67/100 ($4,166.67)
DOLLARS based upon interest computed at
the rate of Three and 40/100 (3.4%) percent
per annum commencing
on the date of
Closing, such payments to be reflected in
the Promissory Note attached hereto as
Exhibit "A". The first installment shall be
due one (1) month after the Closing;
and
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(ii) ONE HUNDRED NINETY THREE THOUSAND EIGHTY-SEVEN and 25/100
($193,087.25) DOLLARS which shall be paid in
Twenty-Four (24) consecutive equal
amortizing monthly installments of
principal and interest in the amount of EIGHT
THOUSAND THREE HUNDRED THIRTY-THREE and 33/100
($8,333.33)
DOLLARS based upon
interest computed at the rate of Three and
40/100 (3.4%) percent per annum
commencing on the date of Closing, such payments to be reflected in the
Promissory Note attached hereto as Exhibit "B" (together
with the Promissory
Note described in Section 1.2(B)(i),
the "Notes").
The first installment
shall
be due one (1) month after the Closing
1.3 Liabilities.
Purchaser assumes no liabilities of Seller of any
kind, except any liabilities in
connection with the Assets that arise after the
Closing Date.
2. The Closing
2.1 Closing Date. The closing of the transactions contemplated by
this
Agreement (the "Closing") shall take place at the law offices of Poe &
Freireich, P.A., located at 256 Columbia
Turnpike, South Tower, Suite 202,
Florham Park, New Jersey, on or before
__________,
2005 (the "Closing
Date" or
"Date of Closing").
2.2 Deliveries at Closing.
(A) At the Closing, Purchaser shall deliver to Seller:
(i) that portion of the Purchase Price as set forth in Section
1.2(A) above in immediate available
funds;
(ii) duly executed Notes; and
(iii) a copy of the resolutions or minutes of the Members and/
or Managers of Purchaser containing the
authorization of the execution, delivery
and performance of this Agreement.
(B) At the Closing, Seller shall deliver to Purchaser:
(i) a duly executed
bill of sale (or a Bill of Sale for Phase
One and a Bill of Sale for Phase Two, as
described in Section
2.4), assignment
and assumption agreement in the forms annexed
hereto as Exhibits "C"
and "D",
transferring to Purchaser all interests of Seller in and to the
Assets to be
acquired by Purchaser hereunder which are in the nature of
personal property,
including whatever rights Seller has to use the name "The
Bagel Club" and all
interests of Seller in the agreements and licenses to be transferred to
Purchaser hereunder;
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<PAGE>
(ii) a certificate of an authorized officer of Seller
certifying to the accuracy of the
representations and warranties and that Seller
has complied in all material respects with all covenants, agreements and
conditions required by this Agreement;
(iii) a copy of the
resolutions or
minutes of the Board of
Directors and Shareholders of Seller containing the authorization of the
execution, delivery and performance of this
Agreement;
(iv) a duly executed
assignment of the
lease for the property
located at 20 Commerce Street, Flemington, New Jersey (the "Flemington
Premises"), in form substantially similar
to the attached Exhibit "E"; and
(v) a duly executed assignment of the lease for the property of
the 1,691 square feet on the first floor of
the Hunterdon Medical Center located
within the coffee shop where the Hunterdon Medical Center is located at 2100
Wescott Drive, Raritan, New Jersey (the
"Hunterdon Medical Center Premises"), in
form substantially similar to the attached
Exhibit "F".
2.3 Adjustments at Closing. At Closing, the following adjustments to
the Purchase Price shall be made and shall
be paid as follows:
(A) Seller shall be credited for any prepaid rent and unreturned
security deposits for any leases set forth on Schedule 1.1(A) or Schedule
1.1(C), any prepaid utilities, and any amounts required to be prepaid in
connection with any of the Assets or
contracts set forth on Schedule 1.1(A) or
Schedule 1.1(C); and
(B) Seller shall be credited for any inventory (valued at cost).
Seller shall take an inventory immediately prior to Closing, or
as near in time
to Closing as reasonably practicable.
2.4 Closing Phases.
For the convenience and upon the agreement of
Seller and Purchaser, the Closing may take place in two
phases, the first phase
to occur in connection with the Flemington
Premises ("Phase One") and the second
to occur in connection with the Hunterdon
Medical Center Premises ("Phase Two").
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<PAGE>
If both parties agree to close in two
phases, all the
deliveries
described in
Section 2.2 shall be delivered at the closing of the Phase One, except as
described below:
(A) At the Phase One closing, Purchaser shall deliver one-half
of
the amount set forth in Section 2.2(A)(i)
above, with the remaining one-half to
be delivered at the closing of the Phase
Two; and
(B) At the closing of Phase Two, Seller shall deliver the duly
executed assignment of the lease for the
Hunterdon Medical
Center Premises as
described in Section 2.2(B)(v).
2.5
Phase Two Contingency. In the event both parties agree to close
in
two phases, and Phase One takes place but Phase Two does not occur
solely
because the landlord fails to consent to or execute the
assignment of the lease
for the Hunterdon Medical Center Premises
as described in Section 2.2(B)(v), all
references to the Hunterdon Medical Center Premises shall be deemed stricken
from this Agreement and such provisions shall be considered null and void,
including but not limited to any such representations and warranties or
non-compete provisions. In such event, the parties agree to negotiate in
good
faith to determine what adjustments might
be made to the Purchase Price, and any
other provision of this Agreement.
3. Representations and Warranties
3.1 Seller hereby represents and warrants to Purchaser as
follows:
(A) Seller has full power and authority to execute and deliver
this Agreement and to consummate the
transactions
contemplated
hereby. This
Agreement has been duly executed and delivered by Seller, and assuming due
execution and delivery of this Agreement by Purchaser, this Agreement
constitutes a legal, valid and binding
obligation of Seller enforceable against
Seller in accordance with its terms and
conditions except as such enforceability
may be limited by applicable bankruptcy, insolvency, or similar laws relating
to, or affecting generally the enforcement
of, creditors' rights and remedies or
by other equitable principles of general application.
The execution,
issuance
and delivery of this Agreement by Seller and the consummation by it of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action;
(B) Seller
is duly organized, validly existing and in good
standing under the laws of the State of New Jersey and has all necessary
corporate powers to own its properties and
to carry on its business as now owned
and operated;
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(C) Other than as set forth on Schedule 3.1(C), Seller has good
and marketable title to all of the Assets
and as of the Closing Date, the Assets
shall be transferred to Purchaser free and clear of liens,
encumbrances
and
claims, which Assets constitute the
material assets used in the operation of the
Business;
(D) To the best of Seller's knowledge Seller has complied with,
and has not received any notice of any
violation of, any federal, state, or
local statute, law, or regulation affecting the
assets used in the operation of
the Business;
(E) Seller has not
received notice of any
actual or
threatened
civil, criminal or administrative
action, suit demand, claim, lien, hearing,
notice of violation, proceeding, or investigation
relating to the Seller or its
predecessors, or its present or former interests
in real property
alleging any
violation of or liability pursuant to
environmental laws and regulations. To the
knowledge of the Seller, Seller is in compliance with all applicable
environmental laws and regulations. To the
knowledge of the Seller, there are no
existing below ground petroleum storage tanks at either of the Flemington
Premises or the Hunterdon Medical Center Premises.
