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.
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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.
Item 2.01. Completion of Acquisition or Disposition of Assets
The information set forth in Item 1.01 above relating to
the Asset Purchase Agreement is incorporated by reference into this Item 2.01.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant
The information set forth in Item 1.01 above relating to
the Asset Purchase Agreement is incorporated by reference into this Item 2.03.
Item 8.01. Other Events
On January 4, 2021, the Company issued a press release announcing the
Acquisition. The press release is attached as Exhibit 99.1 hereto and is
incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits
10.1 Asset Purchase Agreement by and between the Company
and Inside Auto Parts, Inc. , dated November 22,
2020.
99.1 Press Release issue by Free Flow, Inc. on January 4,
2021
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