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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, local, or
foreign jurisdiction or be
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