MEMBERSHIP INTEREST PURCHASE AGREEMENT

 

 

EXHIBIT  10.1

 

                     MEMBERSHIP INTEREST PURCHASE AGREEMENT

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     THIS  AGREEMENT  is  effective  as  of the 23rd  day of April, 2004, by and

among  B2  NETWORKS,  LLC,  a  Nevada  limited-liability  company  ("Seller"  or

"Company"),  TELECOMMUNICATION  PRODUCTS,  INC.  ("Buyer").

 

A.          The  current  ownership  of  the  Company  is  as  follows:

Greg P. Bell, 100%, represented by One Thousand (1,000) Shares, constituting all

of  the  Shares  currently  outstanding.

 

B.     Seller desires to sell an interest in Company which, after issuance, will

equal  a  twenty percent (20%) membership interest (which will equal 250 Shares)

("Membership  Interest")  to  Buyer  and Buyer desires to acquire the Membership

Interest  in  Company  from  Seller  on  the  terms  hereinafter  set  forth.

 

C.     Seller  desires  to grant an option to Telecommunication Products Inc. to

acquire  up  to  a  total  of 49% of total outstanding shares subject to further

agreement  between  the  parties.

 

     NOW,  THEREFORE,  in  consideration  of  the mutual promises, covenants and

representations hereinafter contained, and subject to the conditions hereinafter

set  forth,  it  is  agreed  as  follows:

 

1.     Sale  and  Transfer of Interest.  Subject to the terms and conditions set

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forth in this Agreement, Seller will transfer and convey the Membership Interest

     to  Buyer, and Buyer will acquire the Membership Interest from Seller, upon

payment  of  the  Consideration  (as  defined  hereinbelow)  at  Closing.

 

2.     Consideration.  For  and  in  consideration  of  Seller's transfer of the

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Membership  Interest hereunder, Buyer shall pay the sum of Five Hundred Thousand

Dollars  ($500,000)  and  1,666,667  shares  of  TCPD.OB  stock  (hereinafter

collectively  referred  to  as  the  "Consideration").

 

3.     Post-Closing  Status  of  Ownership.  At  Closing,  upon  payment  of the

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Consideration,  ownership  of  the  Company  shall  be  as  follows:

(a)     Greg  P.  Bell  -  1,000  Shares/80%

(b)     Telecommunication  Products,  Inc.  -  250  Shares/20%

 

4.     Representations  of Seller.  Seller represents and warrants to Buyer

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as  follows:

     (a)     Seller  is the owner, beneficially and of record, of the Membership

Interest,  free  and  clear  of  all  liens,  encumbrances, security agreements,

equities,  options, claims, charges, and restrictions, and Buyer will receive at

Closing  good  and  absolute  title  thereto  free  of  any  liens,  charges  or

encumbrances  thereon.

     (b)     Seller  has full power to transfer the Membership Interest to Buyer

without obtaining the consent or approval of any other person (other than Trust,

the  current  sole  member and manager of Company) or governmental authority and

there  is  no  existing  impediment  to the sale and transfer of such Membership

Interest  from  Seller  to  Buyer.

 (c)     The  Company is duly organized and validly existing under and by virtue

of,  and  is  in  good  standing  under,  the  laws  of  the  State  of  Nevada.

 (d)     Attached  hereto as Exhibit "C-1" is a true and correct copy of certain

financial  information  concerning  the  Company,  as  follows:

          (i)     Company's  Balance  Sheet  as  of  April  2004

          (ii)     Company's  Profit  and Loss Statement for 2003 and YTD  March

31,  2004

 (f)     Attached  hereto  as  Exhibit  "C-2"  is  a  true  and  correct copy of

Company's  Articles  of  Organization  filed  January  8,  2003.

The  representations  and warranties of Seller contained in this Agreement shall

survive  the  Closing  hereof  and  shall  continue  in  full  force and effect.

 

5.     Representations  of  Buyer.     Buyer  represents  and  warrants  to

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Seller  as  follows:

          (a)     Buyer has not requested nor relied upon any financial or other

information  concerning  the  Company other than as provided in Section 4 above.

          (b)     Seller  has  made  no  representations  to  Buyer  concerning

revenues,  income,  sale, expenses and/or profits of the Company, other than set

forth  in  the  Exhibits  referenced  in  Section  4  above.

     (c)     Buyer  is  entering  into  this  Agreement  based  upon Buyer's own

investigation  and knowledge of the business without reliance upon, and makes no

reliance  upon,  any statements, assertions, or documents or reports from Seller

other  than  as  incorporated  in  this  Agreement.

          (d)     Buyer  makes  the  following "Investment Representations" upon

which  Seller  is  relying:

               (i)     Buyer is acquiring the Membership Interest for investment

for  Buyer's  own account, not as a nominee or agent, and not with a view to, or

for  resale  in  connection  with,  any  distribution  thereof.

               (ii)     Buyer  understands  that  the  Membership Interest to be

purchased has not been registered under the 1933 Act on the ground that the sale

provided  for  in  this  Agreement  and  the issuance of securities hereunder is

exempt  from  registration  under  the 1933 Act pursuant to Section 4(2) thereof

which  depends  upon, among other things, the bona fide nature of the investment

intent  as  expressed  herein.

               (iii)     Buyer  is  experienced  in  evaluating and investing in

recently  organized companies such as the Company, is able to fend for itself in

the  transactions  contemplated  by  this  Agreement,  has  such  knowledge  and

experience  in  financial  business  matters  as to be capable of evaluating the

merits  and  risks  of  his investment, and has the ability to bear the economic

risks  of his investment.  Buyer has had an opportunity to discuss the Company's

business,  management and financial affairs with the Company's management and to

review  the  Company's  facilities.

               (iv)     Buyer  understands  that the Membership Interest may not

be  sold,  transferred,  or otherwise disposed of without registration under the

1933  Act  or  pursuant to an exemption therefrom, and that in the absence of an

effective  registration  statement  covering  the  Membership  Interest  or  an

available  exemption  from  registration  under  the  1933  Act,  the Membership

Interest  must  be  held  indefinitely.  In  particular, Buyer is aware that the

Membership  Interest  may not be sold pursuant to Rule 144 promulgated under the

1933  Act  unless  all  of  the  conditions  of  that  Rule  are met.  Among the

conditions for use of Rule 144 is the availability of current information to the

public  about  the  Company.   Such  information  is  not  now available and the

Company  has  no  present  plans  to  make  such  information  available.

               (v)     Buyer has a preexisting business or personal relationship

with the Company or one of its directors, officers or controlling persons, or by

reason  of Buyer's business or financial experience or the business or financial

experience  of  his or its professional advisor(s) who are unaffiliated with and

who are not compensated by Company or any affiliate or selling agent of Company,

directly  or  indirectly, Buyer has, or could be reasonably assumed to have, the

capacity to protect Buyer's own interests in connection with the purchase of the

Membership  Interest  pursuant  to  this  Agreement.

               (vi)     The  aggregate purchase price of the Membership Interest

acquired  hereunder by Buyer does not exceed twenty percent (20%) of Buyer's net

worth  on  the  date  hereof (as "net worth" is used in Regulation D promulgated

under  the  1933  Act).

          (vii)     The Company has made available to Buyer at a reasonable time

prior  to  the  date hereof the opportunity to ask questions and receive answers

concerning  the  terms  and  conditions  of  this  offering  and  to  obtain any

additional  information  which  the  Company  possesses  or  can acquire without

unreasonable  effort  or expense that is necessary to verify the accuracy of any

information  provided  to  Buyer.

 

     6.     Adoption  of  Amended  and Restated Operating Agreement.  Buyer

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and Seller agree to execute the form of Amended and Restated Operating Agreement

attached  hereto as Exhibit "B" effective as of the Closing Date and to be bound

by the terms and conditions thereof from and after such date, to be evidenced by

execution  of  an  Agreement  to  be  Bound  to  Operating Agreement in the form

attached  as  Exhibit  "B-1".

     7.     Closing.  The  closing of the transactions hereunder (the "Closing')

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shall  be  consummated  upon  the  execution of this Agreement and the delivery:

     (a)      By  Seller  to  Buyer  of:

(i)  The  Assignment  in  the  form  attached  hereto and incorporated herein as

Exhibit  "A-1";  and

     (ii) Evidence of a  twenty percent (20%) Membership Interest in the Company

in  the  form of a Membership Certificate in the form attached hereto as Exhibit

"A-2";  and

(b)     By  Buyer  to  Seller  of  the  Consideration in the form of Cash dollar

payments  included  in Consideration, Section 2.0, to be made to B2 Networks LLC

by  Telecommunication  Products,  Inc per the following schedule; US$50,000 upon

signature,  US$90,000  On  or before May 14th, 2004, US$90,000 On or before June

14th,  2004,  US$90,000  On  or  b