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AGREEMENT TO PURCHASE MEMBERSHIP INTERESTS
THIS PURCHASE AGREEMENT is dated as of June 13, 2001, between POPN
Acquisition Corp., a Delaware corporation (the "Purchaser"), Xxxxx Xxx, Xxxxxx
Xxxxxxx, Xxxxxxx Xxxxxxxxx, Xxxx Xxxxxxx, Xxxxxx Xxxxxxx, and Xxxx Xxxxxxxxx
(individually, the "Member" or "Seller", collectively, the "Members" or
"Sellers"), and Branax, L.L.C., a Maryland limited liability company (the
"Company").
W I T N E S S E T H:
WHEREAS, the interest of each Member in the Company is as follows:
MEMBER NAME MEMBERSHIP INTEREST (%)
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Xxxxx Xxx 40.86%
Xxxxxx Xxxxxxx 24.00%
Xxxxxxx Xxxxxxxxx 24.00%
Xxxx Xxxxxxx 4.41%
Xxxxxx Xxxxxxx 4.41%
Xxxx Xxxxxxxxx 2.32%
WHEREAS, the Sellers wish to sell One Hundred Percent (100%) of the
membership interests (the "Membership Interests") of the Company, held in the
Member's names and percentages listed above; and
WHEREAS, Purchaser wishes to purchase One Hundred Percent (100%) of the
Membership Interests from the Company in exchange for $350,000 cash, subject to
the terms and conditions contained in this Agreement.
WHEREAS, Purchaser is endeavoring to sell its Convertible Debentures to
raise the funds to purchase the Membership Interests
N O W T H E R E F O R E,
In consideration of the mutual covenants contained herein and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, it is mutually agreed and covenanted by the Purchaser, for itself
as an entity, its successors and assigns, the Members, each for himself or
herself, his or her heirs, assigns, and personal representatives, and by the
Company, for itself as an entity, its successors and assigns, that the foregoing
recitals are true and correct and further agree as follows:
1. PURCHASE AND SALE.
On the Closing (as provided in Section 2, herein), Sellers shall sell,
assign, transfer, convey and deliver the Membership Interests to Purchaser, free
and clear of any and all liens, claims and encumbrances, and Sellers shall
evidence such transaction by delivering to Purchaser certificates for the
Membership Interests, duly endorsed to Purchaser, with all applicable transfer
taxes paid by Sellers. In consideration of the conveyance of the Membership
Interests to Purchaser, at the Closing Purchaser shall pay to the Members, the
aggregate sum of $350,000 00 pursuant to the terms provided in Section 2, herein
(the "Purchase Price").
The obligation of the Purchaser to consummate the transactions
contemplated by this Agreement shall be subject to it obtaining financing from
the sale of its Convertible Debentures.
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2. CLOSING AND CLOSING AGREEMENTS.
2.1 The Closing (the "Closing") of the purchase and sale of the
Membership Interests shall be held on or before June 29, 2001, (the "Closing
Date"), at a specific date, place and time mutually agreed to by the parties,
unless the parties mutually agree in writing to extend the date of Closing.
2.2 At the Closing, the Sellers shall deliver to Purchaser the
certificate or certificates representing the Membership Interests, along with an
Assignment Separate From Certificate (or an endorsement of the back of each
certificate, if agreed upon by the parties) duly endorsed for transfer in order
to sell, transfer, convey and assign the Membership Interests upon the payment
of all cash sums specified in Section 1 above, and such other duly executed
instruments or documents as may be reasonably requested by Purchaser in order to
consummate the transactions contemplated by this Agreement.
2.3 At the Closing, the Purchaser shall deliver to the Sellers
(i) the sum of $110,000.00. by U.S. Bank check or Wire Transfer, and
(ii) a Promissory Note (in the form attached hereto as Exhibit "A")
obligating the Purchaser to pay the sum of $240,000.00, representing the
remaining amount due of the Purchase Price due at Closing in accordance with
Section 1, above, within 60 days of the date of this Agreement, together with
interest at the rate of 10% per annum; and
(iii) such other duly executed instruments or documents as may be
reasonably requested by Sellers in order to consummate the transactions
contemplated by this Agreement.
2.4. At or subsequent to the Closing, the parties shall execute and
deliver any other instruments and take any actions, which may be reasonably
required for the implementation of this Agreement and the transactions
contemplated hereby.
3. COMPANY'S REPRESENTATIONS AND WARRANTIES.
In order to induce Purchaser to enter into this Agreement and purchase
the Membership Interests from Sellers, the Company makes the following
representations and warranties to Purchaser, which representations and
warranties shall be true and correct as of the Closing Date as well as on the
date hereof:
3.1 The Company is a corporation duly organized, validly existing
and in good standing under the laws of the State of Maryland and has all
requisite power and authority to carry on its business as now conducted.
3.2 All action on the part of the Company necessary for the
authorization, execution, and delivery of this Agreement, the performance of all
obligations of the Company hereunder, and the authorization, issuance, sale, and
delivery of the Membership Interests has been taken or will be taken prior to
the Closing, and this Agreement constitutes the legal, valid and binding
obligation of the Company, enforceable in accordance with its terms. Neither the
Company's execution and delivery of this Agreement nor its consummation of the
transactions contemplated hereby requires the approval or consent of any third
party, whether governmental or otherwise.
3.3 The Membership Interests are duly and validly issued and
authorized, fully paid and non-assessable. Upon the conveyance of the Membership
Interests, the Purchaser will be vested with legal and valid title to the
Membership Interests, free and clear of all liens, pledges, security interests,
irrevocable proxies, encumbrances or restrictions of any kind (except as
provided herein).
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3.4 The execution, delivery and performance of this Agreement and
the transactions contemplated by this Agreement will not conflict with, or
constitute or result in a breach, default or violation of (i) the Articles of
Organization, Regulations or Operating Agreement of the Company; (ii) any law.
ordinance, regulation or rule applicable to the Company; (iii) any order,
judgment, injunction or other decree by which the Company is bound; or (iv) any
written or oral contract, agreement, or commitment to which the Company is a
party; nor will such execution, delivery and performance result in the creation
of any lien or encumbrance upon the Membership Interests.
3.5 The Company has delivered to Purchaser (i) the unaudited balance
sheet of the Company as of December 31, 2000, (ii) the unaudited operating
statement of the Company for the fiscal year ended December 31, 2000, and (iii)
certain draft unaudited financial statements for the 3 month period ended at
March 31, 2001 (collectively, the "Company Financial Statements"). The Company
Financial Statements have been and will be prepared in accordance with generally
accepted accounting principles (GAAP) applied on a consistent basis, and fairly
reflect and will reflect in all material respects the financial condition of the
Company as at the dates thereof and the results of the operations of the Company
for the periods then ended.
3.6 The Company has duly filed all material Tax Returns (as defined
below), and all returns and reports of all other governmental units having
jurisdiction with respect to Taxes (as defined below) imposed on it or on its
operations, all such Tax Returns were complete and accurate when filed, and all
Taxes payable by the Company have been paid to the extent that such Taxes have
become due (whether or not shown on any tax return). All Taxes payable by the
Company for all periods through March 31, 2001, have been accrued or paid in
full. As used herein (i) the term "Tax" shall include any tax or similar
governmental charge, assessment, impost, or levy (including without limitation
income taxes, franchise taxes, transfer taxes or fees, sales taxes, use taxes,
gross receipt taxes, value added taxes, employment taxes, excise taxes, ad
valorem taxes, property taxes, withholding taxes, payroll taxes, minimum taxes,
or windfall profit taxes) together with any related penalties, fines, additions
to tax, or interest imposed by the United States or any state, county, local or
foreign government, or subdivision or agency of any government; and (ii) the
term "Tax Return" shall mean any return (including any information return),
report, statement, schedule, notice, form, estimate, or declaration of estimated
tax to be filed with any governmental authority relating to any Tax.
3.7 The Company represents and warrants that, except as otherwise
provided under this Agreement, and the Company's Operating Agreement, the
resale, in full or part, of the Membership Interests purchased by the Purchaser
shall not be subject to any limitation; therefore, should any limitation
whatsoever to the resale of the Membership Interests by the Purchaser apply, the
Company shall assure the Purchaser that the proposed resale is authorized and
permitted in compliance with all the relevant provisions of any applicable
federal or state securities law.
3.8 No representation or warranty of the Company contained in this
Agreement, and none of the statements or information concerning the Company
contained in this Agreement, contains or will contain any untrue statement of a
material fact nor will such representations, warranties, covenants, or
statements taken as a whole omit a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
4. SELLERS' REPRESENTATIONS AND WARRANTIES.
In order to induce Purchaser to enter into this Agreement and purchase
the Membership Interests, the Sellers make the following representations and
warranties to Purchaser, which representations and warranties shall be true and
correct as of the Closing Date as well as on the date hereof:
4.1 The Sellers have full power and authority to enter into this
Agreement and to carry out the transactions contemplated hereby. The execution,
delivery and performance of this Agreement by the Sellers and the consummation
of the transactions contemplated hereby have been duly and validly authorized,
and this
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Agreement constitutes the legal, valid and binding obligation of the Sellers,
enforceable in accordance with its terms. Neither the execution and delivery of
this Agreement nor the consummation of the transactions contemplated hereby
requires the approval or consent of any third party, whether governmental or
otherwise.
4.2 The Sellers are the only legal, record and beneficial owner of
the Membership Interests. The Membership Interests are free and clear of all
liens, pledges, security interests, irrevocable proxies, encumbrances or
restrictions of any kind. Upon the conveyance of the Membership Interests, the
Purchaser will be vested with legal and valid title to the Membership Interests,
free and clear of all liens, pledges, security interests, irrevocable proxies,
encumbrances or restrictions of any kind.
4.3 There is no outstanding right, agreement, power of attorney,
commitment or understanding of any nature whatsoever, that (i) calls for the
issuance, sale, pledge or other disposition of the Membership Interests, (ii)
obligates the Sellers to enter into any of the foregoing, or (iii) relates to
the voting or control of such Membership Interests.
4.4 The execution, delivery and performance of this Agreement and
the transactions contemplated by this Agreement will not conflict with, or
constitute or result in a breach, default or violation of (i) the Articles of
Organization, Regulations or Operating Agreement of the Company; (iv) any law,
ordinance, regulation or rule applicable to the Sellers or the Company; (iii)
any order, judgment, injunction or other decree by which the Sellers or the
Company are bound; or (iv) any written or oral contract, agreement, or
commitment to which the Sellers or the Company are a party; nor will such
execution, delivery and performance result in the creation of any lien or
encumbrance upon the Membership Interests.
4.5 The representations and warranties contained in this Section do
not contain any untrue statement of a material fact or omit to state a material
fact required or necessary to be stated therein to make the statements made
therein, in light of the circumstances in which they were made, not misleading.
5. PURCHASER'S REPRESENTATIONS AND WARRANTIES.
In order to induce the Sellers to enter into this Agreement and sell the
Membership Interests, Purchaser makes the following representations and
warranties to the Sellers and the Company, which representations and warranties
shall be true and correct as of the Closing Date as well as the date hereof:
5.1 Purchaser has all requisite right, power and authority to enter
into this Agreement and to consummate the transactions contemplated hereby
including the full legal right and power and all authority and approval required
(a) to execute and deliver, or authorize execution and delivery of, this
Agreement and all other instruments executed and delivered by or on behalf of
the Purchaser in connection with the purchase of the Membership Interests, (b)
to delegate authority pursuant to a power of attorney and (c) to purchase and
hold such Membership Interests. Purchaser represents that the signature of the
party signing this Agreement on behalf of the Purchaser is binding upon the
Purchaser. Neither the Purchaser's execution and delivery of this Agreement nor
its consummation of the transactions contemplated hereby requires the approval
or consent of any third party.
5.2 This Agreement constitutes the legal, valid and binding
obligation of Purchaser enforceable in accordance with its terms.
5.3 The Purchaser has been furnished with and has carefully read
this Agreement and is familiar with and understands the terms thereof. In
evaluating the suitability of an interest in the Company, the Purchaser has not
relied upon any representations or other information (whether oral or written)
from the Company (or any agent or representative of the Company), other than as
set forth in this Agreement. With respect to individual tax and other economic
considerations involved in this investment, the Purchaser is not relying on this
Agreement or the Company (or any agent or representative of the Company). The
Purchaser has carefully considered and has discussed with the Purchaser's
professional legal, tax, accounting and financial advisers the suitability of an
purchase of the Membership Interests for the Purchaser's particular tax and
financial situation and
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has determined that the Membership Interests being purchased by the Purchaser
are a suitable investment for the Purchaser.
5.4 The Purchaser acknowledges on its behalf that (i) it has had the
right to request copies of any documents, records and books pertaining to this
investment and (ii) such documents, records and books which it has requested
have been made available to the Purchaser (or its agent or representative).
5.5 The Purchaser (or its agent or representative) has had a
reasonable opportunity to ask questions of and receive answers from a person or
persons acting on behalf of the Company concerning the subject matter of this
Agreement and all such questions have been answered to the full satisfaction of
the Purchaser.
5.6 No representations of any kind have been made other than those
set forth in this Agreement.
5.7 The Purchaser has such knowledge and experience in financial,
tax and business matters so as to enable the Purchaser to utilize the
information made available to the Purchaser in connection with the purchase of
the Membership Interests to evaluate the merits and risks of a purchase of the
Membership Interests and to make an informed investment decision with respect
thereto.
5.8 Purchaser represents and warrants that the information set forth
herein concerning the Purchaser is complete, true and correct.
6. CONDITIONS TO SELLERS' OBLIGATIONS.
The obligations of Sellers to consummate the transactions contemplated
hereby shall be subject to the satisfaction on or prior to the Closing Date of
all of the following conditions, except such conditions as the Sellers may
waive:
6.1 Purchaser shall have compiled in all material respects with all
of its agreements contained herein required to be complied with at or prior to
the Closing Date, and all of the representations and warranties of Purchaser
contained herein shall be true in all material respects on and as of the Closing
Date with the same effect as though made on and as of the Closing Date.
6.2 All action (including notifications and filings) that shall be
required to be taken by Purchaser in order to consummate the transactions
contemplated hereby shall have been taken and all consents, approvals,
authorizations and exemptions from third parties that shall be required in order
to enable the Sellers to consummate the transactions contemplated hereby shall
have been duly obtained.
6.3 No order of any court or governmental or regulatory authority or
body which restrains or prohibits the transactions contemplated hereby shall be
in effect on the Closing Date and no suit or investigation by any government
agency to enjoin the transactions contemplated hereby or seek damages or other
relief as a result thereof shall be pending or threatened in writing as of the
Closing Date.
6.4 The Sellers shall have received from the Purchaser all of the
documents and other items required to be delivered at Closing as provided in
Section 2.3 herein.
7. CONDITIONS TO PURCHASER'S OBLIGATIONS.
The obligations of the Purchaser to consummate the transactions
contemplated hereby shall be subject to the satisfaction on or prior to the
Closing Date of all of the following conditions, except such conditions as the
Purchaser may waive:
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7.1 The Sellers shall have complied in all material respects with
all of his agreements and covenants contained herein required to be complied
with at or prior to the Closing Date. and all the representations and warranties
of the Sellers contained herein shall be true on and as of the Closing Date with
the same effect as though made on and as of the Closing Date.
7.2 All action (including notifications and filings) that shall be
required to be taken by the Sellers in order to consummate the transactions
contemplated hereby shall have been taken and all consents, approvals.
authorizations and exemptions from third parties (if any) that shall be required
in order to enable the Sellers to consummate the transactions contemplated
hereby shall have been duly obtained.
7.3 No order of any court or governmental or regulatory authority or
body which restrains or prohibits the transactions contemplated hereby shall be
in effect on the Closing Date and no suit or investigation by any government
agency to enjoin the transactions contemplated hereby or seek damages or other
relief as a result thereof shall be pending or threatened as of the Closing
Date.
7.4 Purchaser shall have received from the Sellers all of the
documents and items required to be delivered at Closing as provided in Section
2.2 herein.
8. SURVIVAL AND INDEMNIFICATION.
8.1 The representations, warranties, covenants and agreements
contained herein to be performed or complied with after the Closing shall
survive without limitation as to time, unless the covenant or agreement
specifies a term, in which case such covenant or agreement shall survive until
the expiration of such specified term.
8.2 From and after the Closing Date, the Sellers and the Company,
and the Purchaser, as the case may be, shall indemnify and hold harmless the
other (the party seeking indemnification being referred to as the "Indemnified
Party") from and against any and all claims, losses, liabilities and damages,
including, without limitation, amounts paid in settlement, reasonable costs of
investigation and reasonable fees and disbursements of counsel, arising out of
or resulting from the inaccuracy of any representation or warranty, or the
breach of any covenant or agreement, contained herein or in any instrument or
certificate delivered pursuant hereto. or in the case of the Sellers or the
Company, any claim arising from any action prior to the Closing Date. by the
party against whom indemnification is sought (the "Indemnifying Party").
8.3 The Indemnified Party shall promptly notify the Indemnifying
Party in writing of any claim for indemnification, specifying in detail the
basis of such claim, the facts pertaining thereto and. if known, the amount, or
an estimate of the amount, of the liability arising therefrom. The Indemnified
Party shall provide to the Indemnifying Party as promptly as practicable
thereafter all information and documentation necessary to support and verify the
claim asserted and the Indemnifying Party shall be given reasonable access to
all books and records in the possession or control of the Indemnified Party or
any of its affiliates which the Indemnifying Party reasonably determines to be
related to such claim.
9. DISCLOSURE AND ACCESS TO INFORMATION.
The Company, for so long as the Purchaser maintains ownership of any
Membership Interests, shall, at the Purchaser's request, fully disclose, give
full access to and make available to any inspection all records, member lists
and any other document or information related to the Company; the Purchaser
shall have the right to make copies of the aforesaid documents and/or to ask for
a copy thereof to be delivered to the address set forth in Section 10 below.
10. NOTICES
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Any notice, request, instruction or other document required by the terms
of this Agreement to be given to any Party hereto shall be in writing and shall
be given either:
(a) by facsimile transmission to the facsimile number given below.
provided that confirmation of successful receipt thereof by the receiving Party
is recorded on the sending Party's transmission confirmation receipt
simultaneously with the completion of transmission, to which case notice shall
be presumptively deemed to have been given at the date and time displayed on the
sending Party's transmission confirmation receipt showing the successful receipt
thereof by the receiving Party;
(b) by a nationally recognized overnight courier service in which
the date of delivery is recorded by the courier service. in which case notice
shall be presumptively deemed to have been given at the time that records of the
courier service indicate the writing was delivered to the receiving Party;
(c) by prepaid telegram, in which case notice shall be presumptively
deemed to have been given at the time that the records of the telegraphic agency
indicate that the telegram was telephoned or delivered to the receiving Party,
as the case may be; or
(d) by the Express Mail service maintained by the United States
Postal Service. sent by registered or certified mail, postage prepaid, with
return receipt requested, in which case notice shall be presumptively deemed to
have been given forty-eight (48) hours after the letter was deposited with the
United States Postal Service.
Notice shall be sent,
(i) If to the Purchaser, to:
Xxxxx Xxx, President
POPN Acquisition Corp.
0000 Xxx Xxxx Xxxxx
Xxxxxxxx Xxxx, Xxxxxxxx 00000
Telephone Number: (000) 000-0000
with a copy (which shall not constitute notice) to:
___________________________., Esq.
___________________________
___________________________
Office Telephone Number: (__) ___ - ____
Facsimile Telephone Number: (__) ___ - ____
(ii) If to the Sellers, to:
c/o Mr. Xxxxx Xxx
0000 Xxx Xxxx Xxxxx
Xxxxxxxx Xxxx, Xxxxxxxx 00000
Telephone Number: (000) 000-0000
with a copy (which shall not constitute notice) to:
___________________________., Esq.
___________________________
___________________________
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Office Telephone Number: (__) ___ - ____
Facsimile Telephone Number: (__) ___ - ____
(iii) If to the Company, to.
Xxxxx Xxx. President
Branax, L.L.C.
0000 Xxx Xxxx Xxxxx
Ellicott City, Plan land 210-13
Telephone Number: (000) 000-0000
with a copy (which shall not constitute notice) to-
___________________________., Esq.
___________________________
___________________________
Office Telephone Number: (__) ___ - ____
Facsimile Telephone Number: (__) ___ - ____
or to such other addresses or facsimile numbers as either party hereto may from
time to time 21% a notice of (complying as to delivery with the terms of this
Section) to the other.
11. ENTIRE AGREEMENT AND BINDING EFFECT.
This Agreement constitutes the entire agreement between the parties
hereto and supersedes all prior agreements, understandings, negotiations and
discussions, both written and oral, between the parties hereto with respect to
the subject matter hereof and are not intended to confer upon any other person
any rights or remedies hereunder except as expressly provided herein. The
parties have not relied upon any promises, representations, warranties,
agreements, covenants or undertakings. other than those set forth or referred to
herein.
12. Benefits; Binding Effect.
This Agreement is for the benefit of and binding upon the parties
hereto. their respective successors and, where applicable, assigns.
13. WAIVER.
No waiver of any of the provisions of this Agreement will be deemed to
constitute or will constitute a waiver of any other provision hereof (whether or
not similar), nor shall any such waiver constitute a continuing waiver unless
otherwise expressly so provided.
14. AMENDMENT.
No amendment of any provision of this Agreement shall be valid unless
the same shall be in writing and signed by all of the parties hereto.
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