MEMBERSHIP INTEREST PURCHASE AGREEMENT
Exhibit
10.35
THIS
MEMBERSHIP INTEREST PURCHASE AGREEMENT (this “Agreement”) is
made
and entered into this 4th day of March, 2008 between Delta Mutual, Inc., a
Delaware corporation (“Buyer”) and Egani, Inc., an Arizona corporation
(“Seller”), and is agreed to and acknowledge by Altony SA, an Uruguay Sociedad
Anonima corporation (“Altony”) and South American Hedge Fund LLC, a Delaware
limited liability company (“South American Hedge Fund”). Buyer, Seller, Altony
and South American Hedge Fund are sometimes referred to herein individually
as a
“Party” and collectively as the “Parties.”
RECITALS
WHEREAS,
Seller
is the Manager of and owner of 100% of the issued and outstanding membership
interests of Altony, and Altony is the Manager of and owner of 100% of the
issued and outstanding membership interests of South American Hedge
Fund;
WHEREAS,
Buyer
is desirous of acquiring all of Seller’s membership interests in
Altony;
WHEREAS,
Seller
is desirous of selling all of its membership interests in Altony to
Buyer;
WHEREAS,
Buyer
desires to “step into the shoes” of the Seller with respect to the ownership of
South American Hedge Fund and the operation of that certain limited liability
company with its headquarters in Montevideo, Uruguay and Arizona.
WHEREAS,
Buyer
and Seller acknowledge and agree that (i) this Agreement is for the purchase
of
Seller’s interest in Altony, which owns 100% of the issued and outstanding
membership interests of South American Hedge Fund; (ii) Seller is in compliance
with the rules and regulations pertaining to its transactions and records in
Montevideo, Uruguay and Delaware; and (iii) Buyer is in compliance with the
rules and regulations pertaining the conduct of its business, as now being
conducted, and is a duly organized, validly existing corporation in good
standing under the laws of the State of Delaware.
WHEREAS,
pursuant to the Operations Agreement of its original filing, Buyer acknowledges
that South American Hedge Fund will continue to run its operations as South
American Hedge Fund at all times during which its operations remain in
effect.
NOW
THEREFORE,
in
consideration of the foregoing recitals, promises, and mutual covenants herein,
and for other good and valuable consideration, the receipt and sufficiency
of
which is hereby acknowledged, the Parties do hereby agree as
follows:
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1.
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Purchase
of Membership Interest.
Upon the execution of this Agreement, which shall constitute the
Closing
herein, Seller shall sell, assign and transfer to Buyer its membership
interest in Altony, and any interests owned by Altony, including
Altony’s
sole membership and management of South American Hedge
Fund.
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2.
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Consideration.
Buyer shall issue and deliver to Seller, One Hundred and Thirty Million
(130,000,000) shares of its common stock, par value $0.0001 (“Common
Sock”) at the Closing (the “Purchase Price”). Seller acknowledges that the
shares of Common Stock representing the Purchase Price have not been
registered under the Securities Act of 1933, as amended (the “Securities
Act”), or any state securities laws and therefore can not be resold unless
they are registered under the Securities Act and applicable state
securities laws or unless an exemption from such registration requirement
is available. Seller is aware that Buyer is under no obligation to
effect
such registration with respect to the shares of Common Stock representing
the Purchase Price or to file or comply with any exemption from
registration. Buyer shall pay the Purchase Price by issuing Seller
a stock
certificate or certificates and the shares of Common Stock issued
on such
certificate(s) shall be deemed validly issued, fully paid and
non-assessable.
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3.
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Assumption
of Interest: At
Closing, Buyer shall “step into the shoes” of Seller and shall effectively
assume all obligations and responsibilities of Altony, including
any and
all rights, title or interest in any assets, leases, trademarks or
property of Altony, including Altony’s 100% ownership of the issued and
outstanding membership interests of South American Hedge Fund. Buyer
acknowledges that this Agreement does not constitute an individual
asset
purchase agreement; rather it is an assignment and assumption of
Seller’s
interest in Altony.
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4.
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Representations
and Warranties of Seller
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| a. |
Seller
hereby warrants and represents that Seller is the owner of and has
good
and marketable title to the Interest in Altony and to the best of
Seller’s
knowledge, Seller’s Interest in Altony is free and clear of all liens,
claims, liabilities or encumbrances of any type whatsoever.
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| b. |
Seller
hereby warrants and represents that Seller, prior to Closing, has
delivered to Buyer any and all records, audits, documents, copies
of
governmental filings and any other items, assets or information relating
to Altony and South American Hedge Fund, which are either in its
possession or under its control.
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| c. |
To
the best of Seller’s knowledge, as of the date hereof, there are no
demands, suits, grievances, inquiries, governmental investigations,
actions, claims or proceedings of any nature, public or private,
pending
or threatened, before any court, administrative agency, arbitrator
or
governmental body against Seller, Altony or South American Hedge
Fund or
their employees, officer or directors which may have a material adverse
effect on Altony or South American Hedge Fund, nor to Seller’s knowledge
is there any basis for any such
proceedings.
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| d. |
Buyer
has provided Seller a budget identifying the estimated operating
expenses
of Buyer from January of 2008 through April 2008. Seller
hereby warrants that it reasonably and in good faith believes that
there
are or will be sufficient funds infused into the Buyer by its acquisition
of Seller to reasonably ensure that the Buyer’s ongoing operating expenses
from January 2008 through April 2008 will be met.
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| e. |
Seller
warrants that any financial statements provided to Buyer by Seller,
Altony
and South American Hedge Fund are true and accurate records of accounts
to
the best of the Seller’s knowledge.
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| f. |
Seller
hereby warrants and represents that it is a corporation duly organized,
validly existing and in good standing under the laws of the State
of
Arizona, has the requisite power and authority to carry on its business
and has the right, power authority, and legal capacity to execute
this
Agreement and to perform its obligations under this Agreement. Seller
further warrants and represents that its execution and performance
of this
Agreement does not: conflict with; is not in violation of; or will
cause a
material breach of any other agreements to which it is a party.
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| g. |
Seller
hereby warrants and represents that to the best of its knowledge
all of
its board members, officers, principals, agents, and managers, have
at all
times maintained their fiduciary duties to Seller, and to its investors
and shareholders and have complied with all fiduciary duties, and
regulatory and statutory requirements in their dealings with and
on behalf
of Seller. Seller further warrants and represents that all dealings
between Seller and its principals, directors, officers, board members,
and
managers have at all times been free of self-dealing and in compliance
with all applicable fiduciary, statutory and regulatory
obligations.
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| h. |
Seller
hereby warrants that to the best of its knowledge neither Seller
nor its
officers, directors, agents, representatives, affiliated entities,
servants, employees, predecessors, or trustees are aware of any criminal
or regulatory investigations, inquiries, claims, indictments, or
other
proceedings whatsoever concerning or relating to the Seller or to
the
actions of its principals, directors, agents, officers, board members,
or
managers, nor to Seller’s knowledge is there any basis for any such
proceedings.
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| i. |
Seller
warrants and represents that there are no outstanding liens, mortgages,
foreclosures, judgments, or other claims upon the property and assets
of
Seller, Altony or South American Hedge
Fund.
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| j. |
Seller
warrants that it has duly and timely filed all tax returns required
to be
filed by it under applicable law. All tax returns were correct and
complete in all material respects. All taxes due and payable by Seller
have been duly paid. Seller has no reason to believe any governmental
authority will or intends to assess any additional taxes for any
period
for which tax returns have been filed. Seller is not aware of any
tax
assessment or claim by any governmental authority for taxes owed
by
Seller.
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5.
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Representations
and Warranties of Buyer
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| a. |
Buyer
hereby warrants, represents and acknowledges that it has had an
opportunity to review all records, documents, copies of government
filings
and any other items, leases, assets and any other information relating
to
Seller, Altony and South American Hedge Fund either in the possession
of
the Seller or under its control and Buyer has evaluated the merits
and
risks of acquiring Seller’s Interest in Altony, and has fully accepted the
risk prior to the Closing. Buyer further warrants and acknowledges
that
notwithstanding any representations of Seller made in Section 4 .d.
of
this Agreement, the ability to infuse sufficient working capital
to fund
Buyer’s ongoing operating expenses from January, 2008 through April, 2008,
is the sole responsibility of the Buyer.
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| b. |
Buyer
hereby warrants, represents, and acknowledges that it is aware that
the
Interest in Altony has not been registered under any applicable federal
or
state securities laws.
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| c. |
Buyer
hereby warrants and represents that it has sufficient business and/or
financial experience to reasonably protect its own interest in this
transaction.
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| d. |
To
the best of Buyer’s knowledge, as of the date hereof, there are no
demands, suits, grievances, inquiries, governmental investigations,
actions, claims or proceedings of any nature, public or private,
pending
or threatened, before any court, administrative agency, arbitrator
or
governmental body against Buyer which may have a material adverse
effect
on Buyer, nor to Buyer’s knowledge is there any basis for such
proceeding.
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| e. |
Buyer
hereby warrants that to the best of its knowledge neither Buyer nor
its
officers, directors, agents, representatives, affiliated entities,
servants, employees, predecessors, or trustees are aware of any criminal
or regulatory investigations, inquiries, claims, indictments, or
other
proceedings whatsoever concerning or relating to the Buyer or to
the
actions of its principals, directors, agents, officers, board members,
or
managers, nor to Buyer’s knowledge is there any basis for such
proceeding.
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| f. |
Buyer
hereby warrants and represents that its Board of Directors, by resolutions
duly adopted at a meeting called and held, and not subsequently rescinded
or modified, has unanimously approved the execution of this Agreement
for
and on behalf of Buyer, and the transaction contemplated hereby.
Buyer
further warrants and represents that its execution and performance
of this
Agreement does not: conflict with; is not in violation of; or will
cause a
material breach of any other agreement to which it is a
party.
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| g. |
Buyer
hereby warrants and represents that to the best of its knowledge
all of
its board members, officers, and managers, have at all times maintained
their fiduciary duties to Buyer and to its investors and shareholders
and
have complied with all fiduciary duties and regulatory and statutory
requirements in their dealings with and on behalf of Buyer. Buyer
further
warrants and represents that all dealings between the Buyer and its
principals, directors, officers, board members, and managers, have
at all
times been free of self-dealing and in compliance with all applicable
fiduciary, statutory and regulatory
obligations.
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| h. |
Buyer
warrants and represents that all outstanding debts, obligations and
liabilities of which Buyer is aware as of February 1, 2008, have
been
disclosed to Seller.
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| i. |
Buyer
warrants and represents that to its knowledge there are no outstanding
liens, mortgages, foreclosures, judgments, or other claims upon the
property and assets of Buyer.
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| j. |
Buyer
warrants that it has duly and timely filed all tax returns required
to be
filed by it under applicable law. All tax returns were correct
and complete
in all material respects. All taxes due and payable by Buyer have
been duly paid. Buyer has no reason to believe any governmental authority
will or intends to assess any additional taxes for any period for
which
tax returns have been filed. Buyer is not aware of any tax assessment
or
claim by any governmental authority for taxes owed by Buyer.
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6.
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Survival
of Warranties.
All representations, warranties, covenants and agreements contained
in
this Agreement and in any document, certificate, or other instrument
delivered pursuant hereto or in connection with the transaction
contemplated hereby will survive the execution of this Agreement
.
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7.
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Indemnification
of Buyer by Seller.
With respect to the operations of Altony and South American Hedge
Fund ,
Seller hereby covenants and agrees to indemnify and hold harmless
Buyer
from and against and in respect of any and all claims, losses, expenses,
damages, deficiencies, costs, obligations and liabilities including,
without limitation, interest taxes, penalties, assessments, reasonable
attorney’s fees, together with accountants and other professional fees and
other costs and expenses incident to any suit, action or proceeding
against Seller, or sustained or incurred, directly or indirectly,
by
Seller, which arises from, results from, constitutes, or relates
to:
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| a. |
Any
claim, action, administrative proceeding, lawsuit or any other
proceeding
against or involving Seller, seeking damages, fees, costs, reimbursement,
salary, bonuses, employment, specific performance, contractual
enforcement, reinstatement, unemployment compensation or any other
moneys,
properties, commissions or other compensation or payments of any
nature by
any employee, company, third party, person or public or private
entity for
any impropriety, action, inaction, occurrences, incidents or any
other
underlying causes occurring or allegedly occurring prior to the
execution
of this Agreement or the transactions contemplated herein;
or
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| b. |
Any
breach by Seller of any representation, warranty or covenant contained
in
this Agreement or any other document(s) provided by Seller to Buyer
pursuant to this Agreement or delivered
herewith.
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8.
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Indemnification
of Seller by Buyer.
Buyer hereby covenants and agrees to indemnify and hold Seller harmless
from and against and in respect of any and all claims, losses, expenses,
damages, deficiencies, costs, obligations and liabilities including,
without limitation, interest, taxes, penalties, assessments, reasonably
attorney’s fees, together with accountants and other professional fees and
other costs and expenses incident to any suit, action or proceeding
against Buyer, or sustained or incurred, directly or indirectly,
by Buyer,
which arises from results from, constitutes, or relates
to:
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| a. |
Any
claim, action, administrative proceeding, lawsuit or any other proceeding
against or involving Buyer, seeking damages, fees, costs, reimbursement,
salary, bonuses, employment, specific performance, contractual
enforcement, reinstatement, unemployment compensation or any other
moneys,
properties, commissions or other compensation or payments of any
nature by
any employee, company, third party, person or public or private entity
for
any impropriety, action, inaction, occurrences, incidents or any
other
underlying causes occurring or allegedly occurring prior to the execution
of this Agreement or the transaction contemplated herein,
unless
the basis for any such claim action, administrative proceeding or
lawsuit
against Buyer relating to employment, salary, bonuses, or other
compensation to any employee or officer of Buyer has been contractually
modified prior to the date hereof.
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| b. |
Any
breach by Buyer of any representation, warranty or covenant contained
in
this Agreement or any other document(s) provided by Buyer to Seller
pursuant to this Agreement or delivered
herewith.
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| c. |
Any
claim asserted by a third party arising out of or relating to the
acts or
omissions of Altony and/or South American Hedge Fund on or after
the date
of the Closing pursuant to this
Agreement.
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9.
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Notification
of Claims.
Each Party will promptly notify the other of any administrative,
civil, or
criminal claims, lawsuits, or actions against either Party, or relating
to
the Interest in Altony and/or the South American
Hedge Fund, of which they receive notice by any means, so as to permit
either
Party
an
opportunity to prepare a timely defense to such claim or to attempt
settlement.
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10.
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Miscellaneous
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| a. |
Binding
Agreement.
The Parties covenant and agree that this Agreement, including the
recitals, when executed and delivered by the Parties, will constitute
a
legal, valid and binding agreement between the Parties and will be
enforceable in accordance with its terms.
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| b. |
Assignment.
This Agreement and all of the provisions hereof shall be binding
upon and
inure to the benefit of the Parties hereto, their legal representatives,
successors or assigns.
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| c. |
Arbitration.
In the event any controversy or dispute arises out of or relating
to this
Agreement or the breach thereof, each Party shall name an arbitrator
within twenty (20) days after either Party notifies the other in
writing
that there is such dispute or controversy existing, and the two
arbitrators shall name a third arbitrator. If either Party fails
to select
an arbitrator within twenty (20) days as required herein, or if the
two
arbitrators fail to select a third arbitrator within fifteen (15)
days
after both have been appointed, then the Presiding Judge of Maricopa
County Superior Court shall appoint such other arbitrator or arbitrators.
The arbitrators shall render a binding decision within sixty (60)
days
after their appointment and shall conduct all proceedings pursuant
to
Arizona Revised Statutes, Section 12-1501 through Section 12-1517,
or the
successor Statutes and the Rules of American Arbitration Association
governing commercial transactions then existing, to the extent
that such rules are not inconsistent with said statutes and this
Agreement. Said decision shall be binding upon the Parties without
the
right of appeal. Judgment upon the award rendered under arbitration
may be
entered in any
court having jurisdiction. The cost of the arbitration procedure
shall be
borne by the losing Party or, if the decision is not clearly in favor
of
one Party or the other, then the costs shall be borne as determined
by
such arbitration proceeding.
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| d. |
Integration.
This Agreement contains the entire understanding of the Parties with
respect to the matters addressed herein. All prior and contemporaneous
negotiations, agreements, restrictions, promises, representations,
warranties, covenants or undertakings, other than those expressly
set
forth or referred to herein, shall be deemed merged into this Agreement
and
this Agreement supersedes all prior agreements and understandings
between
the parties with respect to the subject matter of this Agreement
and the
transactions contemplated thereby.
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| e. |
Modification.
This Agreement
may not be waived, changed, amended, discharged or terminated without
the
written agreement of the Parties.
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| f. |
Notices.
All notices, requests, demands and other communications shall be
deemed to
have been duly given or made: (a)
if delivered by hand, on the day it is so delivered to the recipient,
(b)
if mailed, certified or registered mail, postage prepaid, return
receipt
requested, on the date of acknowledgement of receipt, (c) if by first
class US mail, on the fifth business day after it is mailed, (d)
if by
nationally recognized overnight delivery service, on the business
day
after it was sent, (e) if by facsimile transmission, on the day it
was
sent (with confirmation of receipt) to such Party as set forth below
which
address may be changed by notice to the other
Party.
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1.
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If
to Buyer, to:
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Attn:
President
000
Xxxxx
Xxxxxx Xxxxxx
Xxxxxxxxxxxx,
XX 00000
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2.
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If
to Seller, to:
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Egani
Inc.
Attn:
President
0000
Xxxxxxxx Xxxxx
Xxxxxxxxxx,
XX 00000
| g. |
Notification
of Claims.
Each Party will promptly notify the other of any third party claims
against either Party relating to the transaction of which it receives
knowledge or notice so as to permit such Party an opportunity to
prepare a
timely defense to such claim or to attempt
settlement.
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| h. |
Attorney’s
Fees.
If any action, including an action in Arbitration pursuant to section
10.c. herein, shall be brought to recover any amount under this Agreement,
for any breach thereof, or to enforce or interpret any of the terms,
covenants, or conditions of this Agreement, the prevailing Party
shall be
entitled to recover from the other Party, as part of prevailing Party’s
costs, reasonable attorney’s fees, the amount of which shall be fixed by
the court and shall be made a part of any judgment
rendered.
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| i. |
Governing
Law.
This Agreement shall be governed and construed in accordance with
the laws
of the State of Arizona and shall be binding upon and inure to the
benefit
of the Parties and their heirs, legal representatives, successors
and
assigns.
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| j. |
Venue.
The proper venue for any proceeding at law or in equity or under
the
provisions for arbitration shall be Maricopa County,
Arizona.
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| k. |
Counterparts.
This Agreement may be executed simultaneously in two or more counterparts,
each of which shall be deemed an original, but all of which together
shall
constitute one and the same instrument.
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| l. |
Severability.
If any portion of this Agreement shall be finally determined by any
court
of law or government body of competent jurisdiction to violate applicable
law, or otherwise not to conform to requirements of law and therefore
to
be invalid, the Parties will cooperate to remedy or avoid the invalidity,
but in any event, will not upset the general balance of relationship
created or intended to be created between them as manifested in this
Agreement and the instruments referred to herein. Except insofar
as it
would be an abuse of the foregoing principle, the remaining provisions
hereof shall remain in full force and
effect.
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| m. |
Other
Documents.
The Parties shall upon reasonable request of the other, execute such
documents as may be necessary or appropriate to carry out the purposes
and
intent of this Agreement.
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| n. |
Headings.
The paragraph headings hereof are intended solely for convenience
of
reference and shall not be construed to explain any of the provisions
of
this Agreement.
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| o. |
Time
is of the Essence.
Time is of the essence in this Agreement.
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| p. |
No
Waiver and Remedies.
No failure or delay on a Party’s part to exercise any right or remedy
hereunder shall operate as a waiver thereof, nor shall any single
or
partial exercise by a Party or a right or remedy hereunder preclude
a
Party from asserting any other rights provided by this Agreement.
No
remedy or election hereunder shall be deemed exclusive but it shall,
whenever possible, be cumulative with other remedies in law or
equity.
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IN
WITNESS WHEREOF,
the
Parties hereto have executed this Agreement on the day, month and year first
above written.
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Egani
Inc.
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Delta
Mutual, Inc.
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(Seller)
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(Buyer)
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By:
/s/
Xxxxxx Xxxxxxx
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By:
/s/
Xxxxx X. Xxxxx
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Xxxxxx
Xxxxxxx
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Xxxxx
X. Xxxxx
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President
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President
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Witness:
/s/
Xxxxxxx X. Xxxxxxx
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Witness:
/s/ Xxxxxx X. Dallas
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Xxxxxxx
X. Xxxxxxx
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Xxxxxx
X. Dallas
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Seal:
(Impression of the seal of Delta Mutual, Inc.)
