Item 1.01. Entry into a Material Definitive Agreement
On November 22, 2020, Free Flow, Inc. (the “Company” or “Buyer”) entered into an Asset Purchase Agreement (the “Agreement”) with Inside Auto Parts, Inc. (the “Seller”), a company incorporated in the Commonwealth of Virginia having its offices at 314 Pendleton Road, Mineral, Virginia 23117, to purchase the assets (the “Purchased Assets”) consisting of all tangible property, including furniture, fixtures, machinery, equipment, tools, specified inventory, and real estate, consisting of 16 acres of land with existing buildings in Louisa County, Virginia, identified as 314 Pendleton Road. The acquisition closed on December 22, 2020.
The Purchase Price for the Purchased Assets is Nine Hundred and Forty Thousand Dollars ($940,000) and other considerations. The Purchase Price shall be paid by the delivery of two promissory notes. The Buyer shall execute one promissory note for all assets purchased excluding land and building for a sum of $353,000 (the “Personal Property Note”) and a second promissory note against purchase of land and building for a sum of $587,000 (the “Real Estate Note”) which will be drawn in conjunction with a separate “contract for purchase of property" as per Virginia State regulations. Both notes will bear interest @ of 2.5% per annum to be paid at maturity of the notes. The Promissory Notes shall be reasonably satisfactory to the parties in form and substance and be payable in full six months after settlement hereunder. The Promissory Notes shall be guaranteed by a personal guaranty of Sabir Saleem (the “Guaranty”), the controlling party of Buyer. Payment of the Personal Property Note shall be secured by a Security Agreement executed by Buyer at Closing, evidenced by a UCC1 which Seller may record in the appropriate office at the Virginia State Corporation Commission.
There shall be drawn a "Contract for Deed" reasonably acceptable to the parties in form and substance which will be held in escrow with National Title & Settlements Group, Inc., Att.: Mumtaz Bhatti, Esq, and may be released from escrow without the written approval of both parties, in the sole event the Promissory Notes are paid in full.
The Buyer is permitted to re-sell the assets purchased herein to any entity that the Buyer has an economic interest in. In such event the Buyer shall not be absolved of the liability under the Promissory Notes along with the subordinated security interest of the Seller. The Buyer desires to re-sell the purchased assets to a company to be named FFLO - Inside Auto Parts, Inc.
Following Closing, Anderson Jackson shall serve as Chief Executive Office of the entity which acquires title to the Personal Property for at least as long as the Promissory Notes remain unpaid, pursuant to a mutually agreeable Employment Agreement (the “Employment Agreement”).
The consummation of the purchase and sale of the Purchased Assets (the "Closing") shall be held at 4:00 p.m. on December 22, 2020 or sooner by agreement of the parties, at such place as Buyer and Seller may agree.
The assets excluding land and building shall be transferred to the order of the Buyer, i.e., to FFLO - Inside Auto Parts, Inc. however, the Seller will continue as "operator" for record until such time that the Department of Motor Vehicles has issued a new license in the name of the Buyer. Upon closing, all revenues generated, and all costs and expenses incurred, will be borne by the Buyer and shall thus be on account of the Buyer.
Immediately upon completion of the Closing, Sellers shall be deemed to have fully and completely transferred to Buyer all his rights, title and interest, if any, in, as well as possession, custody and control of, the Purchased Assets. Seller shall not be liable or responsible for any liabilities or obligations of any kind or nature whatsoever arising out of, under, or related to the Purchased Assets from and after the Closing.
Buyer agrees that it is purchasing and shall take possession of the Purchased Assets in their AS IS, WHERE IS condition and acknowledges that it has previously been given the opportunity to and has conducted such investigations and inspections of the Purchased Assets as it has deemed necessary or appropriate for the purposes of this Agreement.