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HomeMy WebLinkAboutAsset Purchase Sale Agreement LLi 0 3 2022 HEALTH DEPT. ASSET PURCHASE AND SALE AGREEMENT 1. Parties and Property Description AGREEMENT made as of this 29th day of September 2022 by and between AKMU, Inc., with an address of 16 Waltham Circle, West Yarmouth, MA 02673, (hereinafter referred to as "Seller")and MHD Convenience, Inc, Massachusetts corporation with an address of 16 Edlen Lane, Hyannis,MA 02601, or nominee(hereinafter referred to as "Buyer"). Buyer or its nominee agrees to buy, and Seller agrees to sell, upon the terms hereinafter set forth: a) All tangible assets of every kind and description used in the operation of"Buckys • 2"operated at 1047 Route 28, South Yarmouth, MA 02664, (the"Business"), including,without limitation,the fixed assets, fixtures, signage, machinery, furniture and equipment. b) The usable and saleable inventory of the Business in existence as of the Closing Date; c) Supplies and consumable materials used in operation of the Business located at the Business on the Closing Date; d) If and to the extent in the possession of Seller as of the Closing Date, copies of customer records, operating manuals, policy manuals,purchase and sale records, price lists, quality control records of the Business(excluding, however,any minute book, stock records,corporate seal, records that are attorney-client privilege,tax returns and accounting records); e) The goodwill of the Business; To the extent transferable, all right,title and interest, if any, in all governmental licenses,permits, and approvals used in the operation of the Business, including tobacco permit from the Town of Yarmouth. g) All telephone numbers and telecopier numbers, any websites and domains names; h) All trade secrets, license rights,business and marketing plans and all intellectual or intangible property embodied in or pertaining to the Business; The property described in(a)-(h)above is collectively, the"Assets". Notwithstanding the foregoing or anything in this Agreement to the contrary, specifically excluded from the Assets are the following: (i)Accounts receivable,bank accounts and cash; 1 (ii)Pre-paid federal taxes or expenses and pre-paid fees and deposits for utility services, insurances, licenses and other such fees and deposits; 2. Purchase Price Buyer agrees to pay Two Hundred Forty-Five Thousand 00/100 ($245,000.00)Dollars to be apportioned among the assets as determined by the parties at the time of performance and for which a deposit in the sum of Twenty Thousand($20,000.00)Dollars has been paid by Buyer with the execution of this Agreement. In addition,Buyer shall pay Seller for useable and saleable inventory of the Business. The cost of the inventory shall be determined by physical inventory on the day before the Closing Date . The total retail price of all usable and saleable items shall then be reduced by thirty(30)percent to determine the price that Buyer will pay Seller in addition to the purchase price above. Seller and Buyer shall equally share the costs and expenses related said inventory being performed by an independent inventory evaluator or appraiser. The purchase price shall be allocated by mutual agreement of the parties. Such allocation shall be binding upon Buyer and Seller for all purposes. Buyer and Seller each further agrees to file its federal income tax returns and its other tax returns reflecting such allocation,Form 8594 and any other reports required by Section 1060 of the Code. 3. Condition of the Sale The obligations of the Buyer hereunder shall be subject to their obtaining the necessary approvals for all licenses and permits(especially, but not limited to,the existing tobacco and lottery permit/license)currently in use to operate the Business. The Seller shall cooperate fully with the Buyer in connection with its efforts to obtain said necessary approvals. If Buyer is unable to obtain necessary approvals all deposits shall be returned and there shall be no recourse to either party. 4. Time for Performance; Closing. The Closing shall take place on October 3,2022. . At closing, Seller shall execute and deliver or cause to be executed and delivered the following a Bill of Sale to Buyer(or its nominee designated by Buyer by written notice to Seller at least seven(7)business days before the Closing Date)with respect to the Assets,warranting to the Seller that the Buyer has unencumbered, free and marketable title to the assets sold(the"Bill of Sale"). The Bill of Sale shall provide that the Assets are delivered in their"As Is, Where Is"condition. 5. Possession And Condition Of Assets Full possession of the Assets free and clear of all claims is to be delivered at the Closing. Seller agrees to continue to operate the business in the ordinary course prior to the time of performance.Buyer shall have the opportunity to review the business assets on the day of the Closing to confirm the status, condition and presences of the Assets. Notwithstanding the foregoing or anything else herein to the contrary, Seller agrees to cooperate with Buyer in Buyer's efforts to effectuate transfer of the licenses,permits,approvals, authorizations and product registrations used in the operation of the Business.Buyer and Seller acknowledge that certain licenses, permits,approvals, authorizations and registrations used in connection with operation of the business cannot be sold,transferred or assigned. 2 6. Extension To Perfect Title Or Make Premises Conform If Seller shall be unable to give title,make conveyance, or deliver possession of the Assets all as herein stipulated, or if at the time of delivery of the Bill of Sale the Assets do not conform with the provisions hereof,then,at Seller's option, exercisable by written notice to Buyer,or at Buyer's option, exercisable by written demand by Buyer to Seller, Seller shall use reasonable efforts to remedy the issue and to deliver possession as provided herein, or to make the Assets conform to the provisions hereof, as the case may be,provided Seller shall not be required to expend more than$5,000.00 to accomplish the same, in which event the time for performance hereof shall be extended for a period of up to 60 days. 7. Failure To Perfect Title Or Make Assets Conform If on the original closing date(if neither Seller nor Buyer elects to extend under Article 6, above)or, if Buyer or Seller extends under Article 6,at the expiration of any extended time for performance, Seller shall have failed to remove any defects in title, deliver possession, or make the Assets conform, as the case may be, all as herein agreed,then, at Buyer's option, any payments made under this agreement shall be forthwith refunded and all other obligations of the parties hereto shall cease and this Agreement shall be void without recourse to the parties hereto. 8. Buyer's Election to Accept Title Buyer shall have the election, at either the original or any extended time for performance, to accept such title as Seller can deliver to the Assets in their then condition and to pay therefor the purchase price without deduction, in which case Seller shall convey such title. In the event of conveyance in accordance with the provisions of this Article, if the tangible Assets shall have been damaged by fire or casualty insured against,then Seller shall, unless, in the case of a fire or other casualty Seller has previously restored the tangible Assets to their former condition, pay over or assign to Buyer, on delivery of the Bill of Sale, all amounts recovered or recoverable on account of such insurance or taking, less any amounts reasonably expended by Seller for any partial restoration. 9. Acceptance Of Bill of Sale The acceptance of the Bill of Sale by Buyer or by the grantee designated by Buyer shall be deemed to be a full performance and discharge of every agreement and obligation of Seller herein contained or expressed, except for the warranties provided in any bill of sale delivered at the time of performance. 10. No Assumption of Liabilities/Indemnification The parties agree and acknowledge that the Buyer is not assuming any liabilities or obligations of the Seller whatsoever with regard to the Business including any liabilities and debts associated with the Business during the time Seller owned and operated Business unless expressly set forth herein. 3 The Seller agrees to indemnify and save harmless the Buyer against any loss, costs and expenses, including reasonable attorney's fees,which the Buyer may incur or sustain by reason of any claims made against the Buyer for any obligation incurred by the Seller for which the Buyer becomes liable. This provision shall survive the closing. The Buyer agrees to indemnify and save harmless the Seller against any loss, costs and expenses including reasonable attorney's fees,which Seller may have or sustain by reason of any claims made against the Seller which are the obligation of the Buyer. This provision shall survive the closing. 11.Use Of Money To Clear Title To enable Seller to make conveyance as herein provided, Seller may, at the time of delivery of the Bill of Sale, use the purchase money or any portion thereof to clear the title of any or all encumbrances or interests. 11. Deposit All deposits made hereunder shall be held in escrow in a non-interest bearing account by ("Escrow Agent") subject to the terms of this Agreement, and shall be duly accounted for at the time for performance of this Agreement,provided, however, that in the event of any disagreement,the Escrow Agent may retain said deposits pending instructions given by both Seller and Buyer, or by a final order of a court of competent jurisdiction. Buyer and Seller acknowledge that Escrow Agent is counsel to Seller and agree that Escrow Agent may continue to act as such counsel notwithstanding any dispute or litigation arising with respect to the deposits or Escrow Agent's duties. 12. Default;Damaees If Buyer shall fail to fulfill Buyer's agreements herein, the Deposit, as described in Article 2, shall be retained by Seller as liquidated damages, all other obligations of the parties hereto shall cease and this agreement shall be void without recourse to the parties hereto,and this shall be Seller's sole remedy, at law or in equity, for any default by Buyer under this agreement. 13. No Warranties or Representations Except as is specifically provided for in this Agreement, Buyer acknowledges that Buyer shall conduct its own due diligence with respect to the Assets,the viability of the business in which the Assets are used, and the market conditions associated with said business. All of the parties set forth and acknowledge that they are individuals experienced in transactions of this nature and fully understand all of the associated risks involved. 4 The parties attest that they have all read this Agreement and all of the issues that may not have been clear have resulted in changes to this Agreement as part of the negotiations leading up to the execution of this Agreement. 14. Broker's Fee N/A 15. Construction Of Agreement This instrument, executed in multiple counterparts, is to be construed as a Massachusetts contract, is to take effect as a sealed instrument, sets forth the entire contract between the parties, is binding upon and ensures to the benefit of the parties hereto and their respective heirs, devisees, executors, administrators, successors and assigns, and may be canceled,modified or amended only by a written instrument executed by both the Seller and the Buyer. The captions and marginal notes are used only as a matter of convenience and are not to be considered a part of this agreement or to be used in determining the intent of the parties to it. 16. Representations Warranties and Covenants of Seller. As of the date of this Agreement and as of the Closing Date. Seller makes the following representations and warranties: A. As of the date of closing,the Seller will be the owner and will have good and marketable title to all assets being sold, free and clear from all encumbrances. B. The Seller,to her knowledge,has complied with all laws,rules and regulations of the town, state and federal governments relative to the operation of the Business. C. As of the date of closing there will be no litigation or other proceedings pending known or threatened against the Seller. D. The Bill of Sale and instruments of assignment to be delivered at the closing will transfer to the Buyer all of the Personal Property used by the Seller at the location of the Business and Inventory except with regard to any Personal Property otherwise noted above. E. The Bill of Sale will state that this conveyance and transfer is free and clear from all encumbrances and will contain the usual warranties of title which will survive the closing. F. The Business will be conducted up to the date of the closing in accordance with all laws, rules and regulations of the town, state and federal governments. G. No judgments or liens will be outstanding at the time of closing against the Seller or against the Business. 5 H. As of the date of closing there will be no outstanding health code violations against the Business to the best of Seller's knowledge. I. As of the date of closing the financial records of the Business given by the Seller to the Buyer shall have been true and accurate. J. Seller has not entered into any contracts regarding the Business,which will be in effect at the time of closing. K. The assets of the Business shall at the time of closing be in the same condition as they now are,reasonable use and wear thereof excepted. L. The Seller has not taken any actions which are calculated to dissuade, or would reasonably have the effect of dissuading,any present customers of the Business from being customers of the Buyer. M. The representations and warranties of the Seller in this Agreement, do not omit to state a material fact necessary in order to make the representations,warranties or statements contained herein or therein not misleading. N. The Seller has paid or will pay prior to closing all taxes, including social security, withholding, sales taxes, and unemployment taxes relating to the operation of the Business and due and payable by it to the town, state and federal governments prior to the closing date. O. The Seller has filed or will file,prior to the closing or within ninety (90)days thereafter, all tax returns required by law to be filed for all periods up to the closing date and has paid or will pay all taxes due and payable by Seller to the federal, state, county or town governments for all periods up to the closing date. P. At the time of closing, all furniture, furnishings, fixtures and equipment shall be in good working condition. The Buyer shall have the right to inspect the furniture, furnishings, fixtures and equipment at any time prior to closing to insure Seller's compliance herewith. Q. The execution and delivery of this Agreement, the consummation of the transactions contemplated hereby, and the fulfillment of and compliance with the terms and provisions hereof do not and will not(i)violate any provisions of any judicial or administrative order, ward,judgment or decree applicable to Seller of(ii)conflict with, result in a breach of, or constitute a default under any agreement, contract or instrument to which Seller is a party or by which Seller is bound; R. That there are no actions, suits,proceedings or claims pending,or to the best of the Seller's knowledge and belief,threatened or contemplated,against or affecting any of Seller's business or which would hinder the consummation of the transactions contemplated hereby; S. Neither this Agreement,the addendums attached hereto nor any written statement, schedule or certificate furnished or to be furnished to Buyer pursuant to or in connection 6 with the transaction contemplated hereby contains or will contain any untrue statement or omits or will omit to state a material fact necessary in order to make the statements contained therein not misleading. There is no material fact which materially adversely affects the business or condition of the assets which has not been set forth or referred to herein or in an addendum attached hereto; T. Neither Seller nor any person acting on his behalf has retained any broker, finder or intermediary, or paid or agreed to pay any fee or commission to any person, for or on account of this transaction between Seller and Buyer and neither Seller nor any person acting on his behalf has had any communication with any such person which would obligate Buyer or Seller to pay any such fee or commission; U. To make available to Buyer, its agents, accountants and attorneys,all assets,books, records, accounts and other information, documentary or otherwise with respect to it, as Buyer, its agents, accountants and attorneys deem appropriate, and will permit Buyer, its agents, accountants and attorneys to examine and inspect the assets,books and records. Provided,however,that the Buyer acknowledges that the Seller has made no representations regarding the profitability,present or future of said business. V. That all equipment is in good working order and that Seller shall transfer all service contracts covering said equipment to Buyer at the time of closing W. The Seller further agrees that between the date of this Agreement and the Closing Date that seller will: (1) Carry on their business in substantially the same manner as they have heretofore and not introduce any material new method of management, operations or accounting; (2) Maintain their properties and facilities in as good working order and condition as at present, ordinary wear and tear excepted; (3) Perform all their material obligations under agreements relating to or affecting its assets,properties and rights; and (4) Keep in full force and effect present insurance policies or other comparable insurance coverage. 17. Additional Provisions a) Seller to provide a Certificate of Good Standing from the Massachusetts Department of Revenue and a Certificate of Good Standing from the Secretary of the Commonwealth of Massachusetts prior to Closing. b) Seller agrees pay all outstanding amounts payable to suppliers of the business inventory and other trade obligations up to the date of Closing. Seller agrees to indemnify and hold the Buyer harmless from and against any liability to the suppliers of the business inventory resulting from the failure of the Seller to make said payments for any expenses concerning Seller's operation of the business up until the Closing date. 7 c) The parties agree and acknowledge that the Buyer is not assuming any liabilities or obligations of the Seller whatsoever with regard to the Business including any liabilities and debts associated with the Business during the time Seller owned and operated Business unless expressly set forth herein. d) This Agreement is contingent upon the Buyer securing a satisfactory lease for the Premises. EXECUTED this ?day of September, 2022 SELLER: BUYER: AKMU, Inc. MHD Convenience,Inc. Aleem Khurram,President By:Madhab Adhikari,President 8