PFE PROPERTIES, LLC
MEMBERSHIP ACQUISITION AGREEMENT
THIS PFE PROPERTIES, LLC MEMBERSHIP ACQUISITION AGREEMENT (this
"Agreement") is made and entered into as of
the 31st day of March, 2005 (the
"Closing Date"), by and between RAJAYEE
SAYEGH, an individual (the "Seller")
with a mailing address at 2756 North Green
Valley Prkwy, Henerson, Nevada 89014
and CIRTRAN CORPORATION, a Nevada
corporation (the "Purchaser") located at 4125
S. 6000 W., West Valley City, Utah,
84128.
RECITALS
A. The Seller is the owner and holder of a one hundred percent
(100%)
membership interest (the "Membership
Interest") in and to PFE PROPERTIES, LLC, a
Utah limited liability company ("PFE" or
the "Company"), in accordance with the
Articles of Organization (the "Articles")
and the Operating Agreement of PFE.
B. The primary asset of PFE is its rights, titles and interests in
and
to that certain real property, together
with any and all improvements, rents and
profits thereon or associated therewith,
located at 4125 S. 6000 W., West Valley
City, Utah, 84128, more particularly
described as follows (the "Real Property"):
Beginning at a point which is North 89 deg. 57' 13" East 33.00
feet
along the section line and South 0 deg. 07' 31" East 40.00 feet
parallel to 6000 West Street from the North quarter corner of
Section
2, Township 2 South, Range 2 West, Salt Lake Base and Meridian,
Salt
Lake County, Utah, and running thence North 89 deg. 57' 13" East
367.00
feet to the West line of HUNTER COVE SUBDIVISION PHASE 1; thence
along
said line South 0 deg. 07' 31" East 552.50 feet; thence North 89
deg.
58' 06" West 367.00 feet to the East line of 6000 West Street;
thence
along said street North 0 deg. 07' 31" West 552.00 feet to the
point of
beginning.
Excepting therefrom all oil, gas and minerals and any rights
appurtenant thereto.
C. PFE acquired the Real Property on December 17, 2003, at which
time
it borrowed ONE MILLION FIFTY THOUSAND AND
NO/100 DOLLARS ($1,050,000.00) (the
"Loan") from STONEFIELD, INC., a Nevada
corporation (the "Lender") to finance
its purchase of the Property.
D. In order to secure its obligations under the Loan, on December
17,
2003 PFE granted Lender a security interest
in the Real Property by its
execution, delivery and recordation with
the Salt Lake County Recorder, State of
Utah, a Deed of Trust, With Absolute
Assignment of Rents as Entry No. 8926765 in
Book No. 8924 Pg. No. 7831 (the "Trust
Deed") for the benefit of Lender.
<PAGE>
E. The Seller has represented to the Purchaser that except for
PFE's
obligations under the Loan, the Trust Deed
and that certain Promissory Note
dated December 17, 2003 made payable to
Lender in the amount of the Loan (the
"Promissory Note"), PFE does not owe or
possess any other liabilities, debts or
obligations, nor is PFE in default of the
Loan, the Trust Deed or the Promissory
Note.
F. The Seller desires to sell all of his Membership Interest in PFE
to
Purchaser, in accordance with the terms and
conditions of this Agreement.
G. The Purchaser desires to acquire the Membership Interest in PFE
so
that it might be the sole member of PFE, in
accordance with the terms and
conditions of this Agreement.
NOW, THEREFORE, in consideration of the mutual promises and
covenants
contained herein and other valuable
consideration, the receipt of which is
hereby acknowledged, the parties hereto do
hereby covenant and agree as follows:
PURCHASE AND SALE OF MEMBERSHIP INTEREST
1. Sale and Purchase of the Membership Interest. The Seller
hereby
sells to Purchaser, and Purchaser hereby
purchases from the Seller, the
Membership Interest, and any and all other
rights, titles and interests which
the Seller may have or hold in and to PFE
and the Real Property, for and in
consideration of (i) the Purchaser's
issuance to Seller of TWENTY MILLION
(20,000,000) shares of the Seller's common
stock (the "Shares") with a
non-binding, estimated value as of the date
of this Agreement of $0.05/share or
ONE MILLION AND NO/100 ($1,000,000.00) and
(ii) Purchaser overseeing PFE's
repayment of the Loan. Following the
completion of this sale of the Membership
Interest to the Purchaser, the Seller no
longer will be a member of PFE, and the
Purchaser shall become the sole member of
PFE in the place and stead of Seller,
as provided for herein.
2. Indemnity and Hold Harmless. As additional consideration for
the
purchase of the Membership Interest, the
Seller hereby agrees to guarantee
payment of, and/or to indemnify, defend,
and hold the Purchaser harmless from
and against, all financial obligations of
the Company which arose prior to the
date of the purchase of the Membership
Interest, including, without limitation,
all state and federal taxes associated with
the ownership and/or operation of
the Company and the Real Property prior to
the date of this Agreement, equipment
leases, promissory notes, trade payables,
and other agreements or obligations
reflected on the balance sheet of the
Company as of the Closing Date (the
"Obligations"), except for and excluding
those obligations under the Loan, Trust
Deed and Promissory Note arising from and
after the Closing Date. In the event
legal counsel is required to defend the
Purchaser or the Company against
collection of one or more of the
Obligations, Seller agrees to retain counsel
mutually acceptable to both parties and to
pay for such defense through trial
and any appeal together with any judgment
against the Purchaser or the Company.
REPRESENTATIONS AND WARRANTIES
<PAGE>
3. The Purchaser hereby represents and warrants to the Seller
as
follows:
A. Good Standing. The Purchaser represents that it is a Utah
corporation in good standing, and has all
requisite power and authority to enter
into this Agreement.
B. Sole Party in Interest. The Purchaser represents that it is the
sole
and true party in interest in the purchase
of the Membership Interest from the
Seller.
C. Disclosure, Access to Information, etc. The Purchaser has read
and
analyzed, is familiar with and has retained
copies of this Agreement and such
other documents as the Purchaser has
requested from the Seller. In this regard,
the Purchaser confirms that the Purchaser
has reviewed the following documents
which have been provided to the Purchaser
by the Seller:
(1) the Articles of Organization and Operating Agreement of
the Company;
(2) a sheet provided by the Seller showing the balance owing
on a loan the Company has secured from the Lender;
(3) the Commitment to Insure issued by Metro National Title
with respect to the real estate which is owned by the Company,
showing
liens and encumbrances of record on such real property.
4. The Seller hereby acknowledges, covenants, represents and
warrants
to the Purchaser as follows:
A. Sole Member of the Company; No Encumbrances. The Membership
Interest
constitutes one hundred percent (100%) of
the outstanding membership interests
of the Company. The Seller holds of record
and owns beneficially the Membership
Interest, free and clear of any
restrictions on transfer (other than any
restrictions under the Securities Act and
state securities laws), taxes,
security interests, options, warrants,
purchase rights, contracts, commitments,
equities, claims, and demands. The Seller
is not a party to any option, warrant,
purchase right, or other contract or
commitment that could require the Seller to
sell, transfer, or otherwise dispose of any
of the membership interests of the
Company (other than this Agreement). The
Seller is not a party to any voting
trust, proxy, or other agreement or
understanding with respect to the voting of
any of the membership interests of the
Company. Upon the parties execution of
this Agreement and the Purchaser's issuance
of the delivery of the certificates
representing the Seller=s Company Shares,
the Purchaser will acquire valid,
marketable title thereto, free and clear of
any Security Interests and claims of
any other Seller or third parties.
B. Ownership of Membership Interests. The Seller is the owner of
record
of the Membership Interest, he possesses
all right, title and authority to sell
and transfer the Membership Interest to the
Purchaser, and the Membership
Interest will be transferred to Purchaser
free and clear of all claims, liens or
encumbrances of any kind whatsoever.
<PAGE>
C. Approvals. The Seller has secured all necessary consents and
approvals to have the Purchaser become a
substitute Member of the Company, in
accordance with the provisions of the
Company's Operating Agreement, so that
following the sale of the Membership
Interest to the Purchaser, it shall have
and possess all of the powers, rights and
privileges which were owned and held
by the Seller prior to the sale of the
Membership Interest to the Purchaser.
Seller will take all necessary action to
cause this action to occur.
D. No Amendments; No Other Obligations. The Loan, the Trust Deed
and/or
the Promissory Note have not been amended,
modified, transferred or assigned,
the Company is current on any and all
payments owed on the Loan and the
Promissory Note, and there are no
Obligations other than those represented by
the Loan except for certain de minimis
Obligations disclosed on the books and
records of the Company previously delivered
to the Purchaser by the Seller.
E. No Company Certificates. No certificates have ever been issued
by
the Company with respect to the Membership
Interests or any other capital
interest in the Company.
F. Authorization of Transaction. The Seller has full power and
authority to execute and deliver this
Agreement, and any and all other
agreements, consents and instruments to be
signed by Seller in effect the
transactions contemplated hereunder (the
"Ancillary Agreements") and to perform
Seller's obligations hereunder. This
Agreement and the Ancillary Agreements are,
or when executed and delivered by Seller
and the other parties thereto will be,
valid and binding obligations of Seller,
enforceable against Seller in
accordance with their respective terms. The
Seller need not give any notice to,
make any filing with, or obtain any
authorization, consent, or approval of any
government or governmental agency or any
third party in order to consummate the
transactions contemplated by this
Agreement.
G. Noncontravention. Neither the execution and the delivery of
this
Agreement, nor the consummation of the
transactions contemplated hereby, will
(i) violate any constitution, statute,
regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other
restriction of any government,
governmental agency, or court to which the
Seller is subject, or (ii) conflict
with, result in a breach of, constitute a
default under, result in the
acceleration of, create in any party the
right to accelerate, terminate, modify,
or cancel, or require any notice under any
agreement, contract, lease, license,
instrument or other arrangement to which
the Seller is a party or by which he is
bound or to which any of his assets is
subject.
H. Brokers' Fees. The Seller has no liability or obligation to pay
any
fees or commissions to any broker, finder,
or agent with respect to the
transactions contemplated by this Agreement
for which the Purchaser could become
liable or obligated.
I. Absence of Indebtedness and Claims. Seller is not indebted
to
Company, and the Company is not indebted to
Seller and the Seller has no claims
against the Company.
J. Title to Assets. The Company has good and marketable title to
the
Real Property and the personal property and
assets used by it, located on the
Real Property (except for those personal
properties and assets presently owned
<PAGE>
by the Purchaser in its capacity as the
tenant of the Real Property), free and
clear of all security interests and
encumbrances, except for the Trust Deed and
the Purchaser's lease of the Real Property
from the Company presently in effect.
K. Non-Assignment of Lease. The Company has not assigned,
transferred
or conveyed any of its rights, titles and
interests under that certain lease
agreement pursuant to which the Purchaser
presently leases the Real Property.
L. Financial Statements. The Company's financial statements
provided by
the Company to the Purchaser concurrently
herewith have been prepared in
accordance with Generally Accepted
Accounting Principles applied on a consistent
basis throughout the periods covered
thereby, present fairly the financial
condition of the Company as of such dates
and the results of operations of them
for such periods, are correct and complete,
and are consistent with their books
and records (which books and records are
correct).
M. Undisclosed Liabilities. The Company has no liability (and to
the
Company's or Sellers' knowledge there is no
basis for any present or future
action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or
demand against it giving rise to any
liability), except for (i) the liabilities
represented by the Promissory Note and the
Trust Deed, and (ii) the liabilities
set forth in the Company's most recent
financial statements provided by the
Company to the Purchaser concurrently
herewith.
N. Legal Compliance. The Company has complied and is in compliance
with
all applicable laws (including rules,
regulations, codes, plans, injunctions,
judgments, orders, decrees, rulings, and
charges thereunder) of federal, state
and local governments (and all agencies
thereof), and no action, suit,
proceeding, hearing, investigation, charge,
complaint, claim, demand, or notice
has been served by a court officer (or to
the Seller's knowledge, filed or
commenced) against the Company alleging any
failure so to comply.
O. No Employees. There are presently no regular or part-time
employees
of the Company and at no time in the past
has the Company ever employed any
person on a regular or part time basis. In
addition, there are presently no
independent contractors, consultants or
other persons providing services to or
for the benefit of the Company for whom the
Company owes any duty, payment or
obligation. There are no employment
contracts or consulting agreements currently
in effect with respect to the Company.
P. Taxes. The Company has filed all tax returns that it was
required to
file on or before the Closing Date. All
such tax returns were correct and
complete in all material respects. All
taxes owed by the Company (whether or not
shown on any tax return) have been paid.
The Company currently is not the
beneficiary of any extension of time within
which to file any tax return. No
claim has ever been made by an authority in
a jurisdiction where the Company
does not file tax returns that it is or may
be subject to taxation by that
jurisdiction. The Company has not disposed
of any property which has been
accounted for tax purposes under the
installment method. The Company is not a
party to any interest rate swap, currency
swap or similar transaction.
<PAGE>
Q. Powers of Attorney. There are no outstanding powers of
attorney
executed on behalf of the Company.
R. Litigation. The Company is not (i) subject to any
outstanding
injunction, judgment, order, decree,
ruling, or charge or (ii) a party or, to
the knowledge of the Seller or the Company,
threatened to be made a party to any
action, suit, proceeding, hearing, or
investigation of, in, or before any court
or quasi-judicial or administrative agency
of any federal, state, loca
