Deposit Agreement

Sample Deposit Agreement



Exhibit D Deposit Agreement



Manhattan Bagel Company, Inc. Offering Circular 3671595.32 (March 31,2006)


This Deposit Agreement (the "Agreement") is made and entered into-on_______________, 200__,

(the "Effective Date") by and between:

♦     Manhattan Bagel Company, Inc., a New Jersey corporation with its principal place of business at 1687 Cole Boulevard, Golden, Colorado 80401 ("MBC"); and

♦     _,

a_______________________[resident] [corporation] [partnership] [limited liability company] [residing

at] [with offices located at]________________________________________("Depositor").


WHEREAS, MBC is in the business of developing and operating a system consisting offranchised and company-operated "Manhattan Bagel" restaurants under the trademarks, service marks, and system owned or licensed by MBC (collectively, "Restaurants ");

WHEREAS, Depositor wishes to apply to become a franchisee under MBC"s system pursuant to a franchise agreement for a particular Restaurant;

WHEREAS, MBC must expend considerable time, effort, and cost during the period (the "Evaluation Period") needed to evaluate the applicant's qualifications and suitability to become a franchisee and to evaluate the proposed location for the Restaurant; and

WHEREAS, Depositor wishes to place a deposit with MBC as evidence of Depositor's good faith during the Evaluation Period.

NOW, THEREFORE, for good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, the parties agree as follows:

1.           The Deposit. Upon execution of this Agreement, Depositor shall pay MBC the sum of Ten Thousand Dollars ($10,000) as a non-interest bearing deposit (the "Deposit").

2.           Refundabilitv. The Deposit shall be refundable to Depositor only as provided for in Section 8(a) below; otherwise, the Deposit is non-refundable.

3.           Credit. Unless MBC or Depositor terminate this Agreement as provided in Section 8, the full amount of the Deposit shall be credited by MBC toward payment of the first installment of the initial franchise fee due under a franchise agreement entered into by the parties.

4.           Deposit Area. During the Evaluation Period, MBC and Depositor shall explore the prospect of entering into a franchise agreement for the establishment of a Restaurant; all within the following area:

(the "Deposit Area"). The only purpose of the Deposit Area is to describe the area within which they wil focus their attention during the Evaluation Period. Nothing in this Agreement (except for Section 6 below) shall prevent MBC or Depositor from entering into any agreement, conducting business, or taking any action within the Deposit Area or elsewhere.

a.          By entering into this Agreement: (x) neither party shall be bound to enter into a franchise

agreement with the other; and (y) MBC shall not be deemed to have given any representation or assurance

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that any site Depositor finds, whether in the Deposit Area or otherwise, will be acceptable to MBC or will be a location at which Depositor is likely to be successful in operating a Restaurant.

b.         Depositor acknowledges and agrees that notwithstanding anything to the contrary in this

Agreement: (a) Depositor shall have no rights with respect to any other business operated by MBC and/or MBC affiliates, including but not limited to, Noah's New York Bagels, Chesapeake Bagel, Einstein Bros Bagels, New World Coffee, and/or Willoughby's Coffee and Tea (collectively, the "Other Brands"); and (b) MBC and/or MBC affiliates shall have the right to operate and license others to operate restaurants under the Other Brands at any location whatsoever, notwithstanding such restaurants' proximity to the Deposit Area, or the actual or threatened impact such restaurants might have on sales at a proposed location for a Restaurant.

5.          Application. Depositor agrees to make all applications and provide all information reasonably requested by MBC to evaluate Depositor's qualification and suitability to enter into a franchise agreement with MBC.

6.          Confidentiality. During the Evaluation Period, certain confidential information about MBC and its system will be disclosed or otherwise made known to Depositor ("Confidential Information"). Depositor agrees to respect and maintain the confidential nature of such Confidential Information, and not in any way disclose the Confidential Information to anyone else, nor in any way use the Confidential Information in the operation of any business (excluding a Restaurant operated pursuant to a franchise agreement). It is agreed that Depositor's obligations under this Section 6 shall not expire upon termination of this Agreement.

7.          Evaluation Period. The parties agree that the Evaluation Period shall last for one hundred and eighty (180) days from the Effective Date, unless the parties otherwise agree in writing.

8.          Termination.



a.         The Deposit shall be refundable as described below:

i.          If, during the Evaluation Period, MBC desires to terminate this Agreement for any

reason, then this Agreement shall terminate upon MBC's written notice to Depositor, the parties shall have no other rights or obligations to each other, and within sixty (60) days after such expiration, MBC shall refund the entire Deposit paid to MBC.

ii.         Except as described above in Section 8(a)(1), if, at the end of the Evaluation Period:

(1) Depositor has not located a site for the Restaurant that is acceptable to MBC; (2) for any other reason (other than MBC's failure to evaluate a proposed site) there is no approved site for a Restaurant; or (3) Depositor at any time desires to terminate this Deposit Agreement, or otherwise elects not to proceed with the location of a site for the Restaurant pursuant to this Deposit Agreement, and so notifies MBC in writing; then, unless the parties agree otherwise in writing, this Agreement shall expire, the parties shall have no other rights or obligations to each other, and within sixty (60) days after such expiration, MBC shall refund the Deposit paid to MBC, less MBC's actual out-of pocket costs (not to exceed Five Thousand Dollars ($5,000)).

b.         This Agreement shall terminate at the earlier of:

i.          Notice from MBC to Depositor, or Depositor to MBC, that either party is

exercising its rights under Section 8(a)(1) or (ii) above;

ii.         the parties' entry into a franchise agreement; or

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iii.         the end of the Evaluation Period.

9.           No Franchise Rights. This Agreement is not a franchise and does not grant Depositor any right whatsoever to use the "Manhattan Bagel" marks and/or system, since these rights can only be granted under a franchise agreement entered into by Depositor and MBC. Depositor shall not use the "Manhattan Bagel" marks or system, nor shall Depositor make any representation or commitment on MBC's behalf. In addition, neither party shall undertake any actions, expend any money, or otherwise change its position in anticipation of signing a franchise agreement.

10.          Disputes. The terms of this Agreement shall be construed exclusively under Colorado law (without applying Colorado choice of law principles). The parties agree that any action brought by Depositor against Franchisor in any court, whether federal or state, shall be brought within such state and in the judicial district in which Franchisor has its principal place of business. Any action brought by Franchisor against Depositor in any court, whether federal or state, may be brought within the state and judicial district in which Franchisor has its principal place of business. The parties agree that this Section shall not be construed as preventing either party from removing an action from state to federal court. Depositor hereby waives all questions of personal jurisdiction or venue for the purpose of carrying out this provision. Any such action shall be conducted on an individual basis, and not as part of a consolidated, common, or class action. Franchisor and Depositor irrevocably waive trial by jury in any action, proceeding, or counterclaim, whether at law or in equity, brought by either of them against the other, whether or not there are other parties in such action or proceeding. Any and all claims and actions arising out of or relating to this Agreement, the relationship of Depositor and Franchisor, or this Agreement, brought by any party hereto against the other, shall be commenced within one (1) year from the occurrence of the facts giving rise to such claim or action, or such claim or action shall be barred.

11.         Acknowledgement. Depositor acknowledges receipt of MBC's uniform franchise offering circular at least ten business days before the Effective Date. Depositor also acknowledges receipt of a copy of this Agreement, with all the blanks filled in, at least five business days before the Effective Date.

12.         No Conflicting Obligations. Depositor represents and warrants to MBC that neither Depositor nor its principals are under any contractual or other legal obligation that would restrict Depositor and its principals from: (a) entering into this Deposit Agreement and, ultimately, a "Manhattan Bagel" franchise agreement; and/or (b) performing the obligations and/or exercising the rights under this Agreement and any "Manhattan Bagel" franchise agreement that the parties may enter into.

13.         Full Agreement. This Agreement incorporates the full and complete agreement between the parties concerning the subject of this Agreement, and supersedes any and all prior correspondence, conversations, representations, or statements of whatever nature concerning the subject of this Agreement.

Manhattan Bagel Company, Inc.                                ________________________________, Depositor

By:______________________________________ By:___

Name:___________________________________ Name:.

Title:____________________________________ Title:

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