EXHIBIT 99.2
THIS MEMBERSHIP INTEREST PURCHASE AGREEMENT ("Agreement") is entered
into as of January 31, 2005 by and among ▇▇▇▇ ▇▇▇▇▇ ENTERPRISES, INC., a Florida
corporation ("Seller"), and CPC OF AMERICA, INC., a Nevada corporation
("Buyer"). CPC OF AMERICA, INC., in its capacity as Manager ("Manager") of MED
ENCLOSURES, LLC, a Nevada limited liability company ("Company"), joins this
Agreement solely for the purpose of consenting to the transaction contemplated
herein.
R E C I T A L S
A. Seller owns a 7.7% membership interest in the Company. The
membership interest was purchased by Seller for an initial capital contribution
of certain patents and intellectual property rights relating to arterial closure
products and procedures as set forth in that certain Amended and Restated
Operating Agreement for Med Enclosures, LLC ("Operating Agreement") dated April
24, 2000 between Seller and Buyer.
B. Buyer owns a 92.3% membership interest in the Company.
C. Seller desires to sell, and Buyer desires to purchase, Seller's
entire membership interest equivalent to a 7.7% membership interest in the
Company ("Membership Interest"), on the terms and conditions more fully set
forth herein.
NOW, THEREFORE, in consideration of the foregoing recitals and the
mutual promises and covenants contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
A G R E E M E N T
1. SALE AND PURCHASE OF MEMBERSHIP INTEREST.
1.1 AGREEMENT TO SELL AND PURCHASE. Subject to the terms and conditions
of this Agreement, the Seller will sell to the Buyer, and the Buyer will
purchase from the Seller, the Membership Interest. Seller hereby sells, assigns,
transfers and delivers to the Buyer, and the Buyer hereby purchases the
Membership Interest. Seller makes such sale free and clear of all liens,
pledges, claims, charges or encumbrances of any nature on the Membership
Interest, but subject to the Operating Agreement. The parties hereto agree that
the Membership Interest being purchased hereunder includes an equivalent
percentage of the capital account of Seller and all rights to distributions with
respect thereto, and that Seller shall have no right to any distributions which
are hereafter paid which may be attributable to Company's operations prior to or
after the Closing Date with respect to the Membership Interest.
1.2 PURCHASE CONSIDERATION. In consideration of the sale by Seller of
the Membership Interest to the Buyer, the Buyer shall deliver to Seller Four
Thousand (4,000) shares (the "Shares") of Buyer's $.0005 par value per share
common stock (the "Purchase Price"). The Purchase Price for the Membership
Interest will be paid by the Buyer at the Closing (as defined below) by delivery
to the Seller of a certificate evidencing the Shares.
1.3 ADDITIONAL TERM. The Buyer and Seller acknowledge and agree that
transfer of the Membership Interest is subject to the terms and condition of the
Operating Agreement.
1.4 NO CHANGE TO OPERATING AGREEMENT. The parties acknowledge that the
sale from Seller to Buyer does not in any way change any of the substantive
provisions of the Operating Agreement, except to reflect the purchase and sale
of the Membership Interest.
2. THE CLOSING.
2.1 THE CLOSING. The closing of the purchase of the Membership Interest
contemplated by this Agreement (the "Closing") will take place at the offices of
the Buyer on February 16, 2005 or at such other date as may be agreed to by the
parties (the "Closing Date"). At the Closing, upon receipt of all executed
documents by Buyer and Seller, the Buyer will deliver to the Seller a
certificate representing the Shares.
3. REPRESENTATIONS AND WARRANTIES OF SELLER.
In order to induce the Buyer to enter into this Agreement and purchase
the Membership Interest, the Seller hereby represents, warrants and covenants to
the Buyer as of the date hereof and as of the Closing Date as follows:
3.1 ORGANIZATION; GOOD STANDING; QUALIFICATION. Seller is a corporation
duly organized, validly existing, and in good standing under the laws of the
State of Florida. Seller has all requisite corporate power and authority to own
and operate its properties and assets and to carry on its business as now
conducted and as proposed to be conducted. Seller is duly qualified to transact
business and is in good standing in each jurisdiction in which the failure so to
qualify would have a material adverse effect on its business, properties,
prospects or financial condition.
3.2 AUTHORIZATION; BINDING EFFECT. Seller has all requisite corporate
power and authority to enter into and to carry out all of the terms of this
Agreement and all other documents executed and delivered in connection herewith.
All corporate action on the part of Seller necessary for the authorization,
execution and delivery of this Agreement and the performance of all obligations
of Seller hereunder at the Closing has been taken or will be taken prior to the
Closing, and this Agreement shall constitute the valid and legally binding
obligation of Seller, enforceable in accordance with its terms except (i) as
limited by applicable bankruptcy, insolvency, reorganization, moratorium, and
other laws of general application affecting enforcement of creditors' rights
generally; and (ii) as limited by laws relating to the availability of specific
performance, injunctive relief, or other equitable remedies.
3.3 TITLE TO THE MEMBERSHIP INTEREST. The Seller has and owns good and
marketable titled to the Membership Interest as of the date hereof and as of the
Closing Date, free and clear of all and any liability, security agreement, title
retention device, pledge, lien, charge, claim, restriction and encumbrance
whatsoever other than those imposed by the Operating Agreement. Seller warrants
and agrees to forever defend the same against all persons whomsoever claim an
interest therein.
3.4 RIGHT TO TRANSFER. Seller has the absolute right to transfer the
Membership Interest to the Buyer as herein described subject to obtaining the
consent of the Manager of the Company as required by the Operating Agreement.
The consent of any other party and no agreement or other instrument will be
violated as a result of such transfer.
3.5 INVESTMENT AND RELATED REPRESENTATIONS.
3.5.1 SHARES AS "RESTRICTED" SECURITIES. Seller is aware that
neither the Shares nor the offer or sale thereof to the Seller has been
registered under the Securities Act of 1933, as amended ("Securities Act"), or
under any state securities law. Seller further understands that no registration
statement has been filed with the Securities and Exchange Commission ("SEC"),
nor with any other state regulatory authority and that, as a result, any benefit
which might normally accrue to an investor such as Seller by an impartial review
of such a registration statement by the SEC or other regulatory commission will
not be forthcoming. Seller acknowledges that the Shares are being offered
pursuant to certain exemptions from Section 5 of the Securities Act for offers
and sale of securities not involving an issuer, underwriter or dealer. Seller
understands that the Shares are "restricted" securities under U.S. federal
securities laws inasmuch as they are being acquired from the issuer and that
under such laws and applicable regulations such securities may be resold without
registration under the Securities Act only in certain limited circumstances.
Seller represents that it is familiar in general with Rule 144 under the
Securities Act (which provides generally for a one year holding period and
limitations on the amount of "restricted" securities that can be sold in
compliance with the rule upon completion of the holding period), and understands
the resale limitations imposed thereby and by the Securities Act. Seller
understands that each certificate representing the Shares and any other
securities issued in respect of the Shares upon any stock split, stock dividend,
recapitalization, merger or similar event (unless no longer required in the
opinion of counsel for Buyer) shall be stamped or otherwise imprinted with
legends substantially in the following forms (in addition to any legend that may
now or hereafter be required by applicable state law):
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. THEY
MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED IN
THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO SUCH
SECURITIES, OR DELIVERY OF AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER OF
SUCH SECURITIES THAT SUCH OFFER, SALE, TRANSFER, PLEDGE OR HYPOTHECATION IS IN
FULL COMPLIANCE WITH THE SECURITIES ACT OF 1933, AS AMENDED, OR UNLESS SOLD IN
COMPLIANCE WITH RULE 144 UNDER SUCH ACT."
Seller agrees that it will not sell any portion of the Shares except pursuant to
registration under the Securities Act or pursuant to an available exemption from
registration under the Securities Act. Seller understands that Buyer shall
refuse to transfer the Shares except in accordance with the restrictions and
agreements of Seller set forth in this Section 3.5.
3.5.2 INVESTMENT REPRESENTATION. The Shares are being acquired
by Seller pursuant to this Agreement for investment and not with a view to the
public resale or distribution thereof unless pursuant to an effective
registration statement or exemption under the Securities Act.
3.5.3 NO PUBLIC SOLICITATION. Seller initiated this
transaction by soliciting Buyer to purchase the Membership Interest and Seller
proposed the Purchase Price. Seller is acquiring the Shares after private
negotiation and has not been attracted to the acquisition of the Shares by any
press release, advertising or publication.
3.5.4 INVESTOR SOPHISTICATION AND ABILITY TO BEAR RISK OF
LOSS. Seller has not been organized for the purpose of acquiring the Shares.
Seller acknowledges that it is able to protect its interests in connection with
the acquisition of the Shares and can bear the economic risk of investment in
such securities without producing a material adverse change in Seller's
financial condition. Seller otherwise has such knowledge and experience in
financial or business matters that Seller is capable of evaluating the merits
and risks of the investment in the Shares.
3.6 RECEIPT OF INFORMATION AND ACCESS TO BUYER. Seller acknowledges
that it has received and reviewed the following documents: (a) the Buyer's
Annual Report on Form 10-KSB for the fiscal year ended December 31, 2003 and (b)
the Buyer's Quarterly Report on Form 10-QSB for the quarter ended September 30,
2004, both of which provide important information concerning the Buyer. Seller
further represents and warrants that it has received from the Buyer all of the
financial and other information Seller considers necessary or appropriate in
order to decide to sell the Membership Interest to Buyer in consideration of the
Shares. Seller has been given full and complete access to the Buyer's books and
records in order that Seller may complete, to its satisfaction, an investigation
of the Buyer and its business and prospects, and Seller has been given every
opportunity to ask questions of, and to receive answers from, the Buyer
regarding its business and prospects, in order to enable Seller to evaluate the
merits of investing in the Shares and the adequacy of the Purchase Price..
3.7 TERMINATION OF MEMBERSHIP. Seller acknowledges and agrees that upon
Seller's sale of the Membership Interests hereunder, Seller shall no longer hold
any membership interest in the Company or any other form of equity interest in
the Company, direct or indirect, other than indirectly through Seller's
ownership of the Shares and any other common shares of the Company that may be
owned by Seller.
4. REPRESENTATIONS OF BUYER.
The Buyer hereby represents, warrants and covenants to the Seller as of
the date hereof and as of the Closing Date as follows:
4.1 ORGANIZATION; GOOD STANDING; QUALIFICATION. Buyer is a corporation
duly organized, validly existing, and in good standing under the laws of the
State of Nevada. Buyer has all requisite corporate power and authority to own
and operate its properties and assets and to carry on its business as now
conducted and as proposed to be conducted. Buyer is duly qualified to transact
business and is in good standing in each jurisdiction in which the failure so to
qualify would have a material adverse effect on its business, properties,
prospects or financial condition.
4.2 AUTHORIZATION. Buyer has all requisite corporate power and
authority to enter into and to carry out all of the terms of this Agreement and
all other documents executed and delivered in connection herewith. All corporate
action on the part of Buyer necessary for the authorization, execution and
delivery of this Agreement and the performance of all obligations of Buyer
hereunder at the Closing has been taken or will be taken prior to the Closing,
and this Agreement shall constitute the valid and legally binding obligation of
Buyer, enforceable in accordance with its terms except (i) as limited by
applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of
general application affecting enforcement of creditors' rights generally; and
(ii) as limited by laws relating to the availability of specific performance,
injunctive relief, or other equitable remedies.
4.3 VALIDITY; TITLE. The Shares, when issued and delivered in
accordance with the terms of this Agreement for the consideration expressed
herein, will be duly and validly issued, fully paid, and nonassessable, and will
be free of restrictions on transfer other than restrictions on transfer under
this Agreement and under applicable state and federal securities laws. Buyer
shall deliver to Seller at the Closing the original certificate(s) evidencing
the Shares with such endorsements, assignments and other instruments of
transfer, in form satisfactory to Seller and its counsel, in order to
effectively vest in Seller all right, title and interest in and to the Shares.
From time to time after the Closing, and without further consideration, Buyer
will execute and deliver such other instruments of transfer and take such other
actions as Seller may reasonably request in order to more effectively transfer
to Seller the securities intended to be transferred hereunder.
4.4 INVESTMENT INTENT. The Buyer acknowledges that the Membership
Interest being purchased by the Buyer has not been registered under the
Securities Act or any state securities laws in reliance on certain exemptions
contained in such laws and represents that Buyer is acquiring the Membership
Interest for its own account, for investment and without any view to
distribution or resale in connection with any distribution of the Membership
Interest.
5. MISCELLANEOUS.
5.1 ENTIRE AGREEMENT; SUCCESSORS AND ASSIGNMENT. This Agreement sets
forth the entire understanding and supersedes any and all other written or oral
understandings, negotiations, or agreements between Seller and Buyer relating to
the subject matter hereof. All of the terms, representations and warranties of
this Agreement will be binding upon, inure to the benefit of, and be enforceable
by the parties hereto and their respective successors, heirs at law, legatees,
distributee, executors, administrators and other legal representatives.
5.2 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with, and governed by, the laws of the State of Nevada.
5.3 FURTHER ASSURANCES. The parties shall take any and all actions as
are reasonably requested by another party hereto and are necessary to carry out
the purposes, provisions and intent of this Agreement.
5.4 AMENDMENT. This Agreement may be amended and any of their terms or
conditions of this Agreement may be waived, only by written instrument signed by
both the Buyer and the Seller, or, in the case of a waiver, by or on behalf of
the party waiving compliance.
5.5 LITIGATION COSTS. If any legal action or any arbitration or other
proceeding is brought for the enforcement of this Agreement, or because of an
alleged dispute, breach, default, or misrepresentation in connection with any of
the provisions thereof, the successful or prevailing party or parties shall be
entitled to recover reasonable attorneys' fees and other costs incurred in that
action or proceeding, in addition to any other relief to which it or they may be
entitled.
5.6 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which will constitute an original, but all of which, when
taken together will constitute but one instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first hereinabove written.
"SELLER"
▇▇▇▇ ▇▇▇▇▇ ENTERPRISES, INC.,
a Florida corporation
By: /s/ ▇▇▇▇ ▇▇▇▇▇
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▇▇▇▇ ▇▇▇▇▇, M.D., President
"BUYER"
CPC OF AMERICA, INC.,
a Nevada corporation
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇ ▇. ▇▇▇▇▇▇▇, President
CONSENT OF "MANAGER"
The Manager hereby consents to Seller's transfer of the Membership Interest to
Buyer pursuant to Section 6.1 of the Operating Agreement as of the date first
above written:
CPC OF AMERICA, INC.,
as Manager of MED ENCLOSURES, LLC
By: /S/ ▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇ ▇. ▇▇▇▇▇▇▇, President