Interest Purchase Agreement

 

 

Exhibit 10.1

 

 

 

 

 

This Interest Purchase Agreement (this " Agreement ") is entered into effective as of January 1, 2007, by and among PDS GIS/LIS, Inc., a ____________Delaware   corporation (" Buyer "), David M. King and Glen W. Thurow (each individually a " Member " and collectively the " Members "), constituting all of the Members of Land Links Company, LTD., a New Mexico limited liability company (the " Company ").

A.   David M. King owns forty nine percent (49%) of the membership interests in and to the Company, Glen W. Thurow owns fifty one percent (51%) of the membership interests in and to the Company, and together the Members own one hundred percent (100%) of the membership interests in and to the Company (the " Interests ").

B.   The Members desire and intend to sell the Interests to Buyer at the price and on the terms and subject to the conditions set forth below.

C.   Buyer desires and intends to purchase the Interests from the Members at the price and on the terms and subject to the conditions set forth below.

In consideration of the terms hereof, the parties agree as follows:

1.1   Definitions

Capitalized terms shall have the meanings set forth herein.

On the terms and subject to the conditions of this Agreement, Buyer agrees to purchase the Interests from the Members, and the Members agree to sell the Interests, constituting 100% of the Interests in and to the Company, to Buyer.

The aggregate purchase price (the " Purchase Price ") for the Interests is 360,000 shares, no par value (the " Parent Stock "), of Xedar Corporation, a Colorado corporation (" Parent "), and the parent of Premier Data Services, Inc., a Delaware corporation, which is the parent of Buyer, payable as set forth in this Section 2.2. The Parent Stock shall be "restricted stock" as that term is define in Rule 144 promulgated under the Securities Act of 1933, as amended (the " Act ").

At Closing (as defined below) Buyer shall cause Parent to direct its transfer agent, Computershare Trust Company, Inc. (the " Transfer Agent "), (a) to issue to David M. King 180,000 shares of Parent Stock; and (b) to issue to Glen W. Thurow 180,000 shares of Parent Stock.

 

 

2.2.2 Registration Rights and Lock-Up Agreement; Adjustment to Purchase Price

(a)   At or prior to Closing, David M. King and Glen W. Thurow shall each execute a registration rights and lock-up agreement (" Registration and Lock-Up Agreement ") in substantially the form attached hereto as Exhibit 2.2.2 . The Registration and Lock-Up Agreement, shall provide, among other things, that Parent shall use its best commercial efforts to file, with the United States Securities and Exchange Commission (" SEC "), a registration statement with respect to the Parent Stock within 90 days of the Closing and that Parent shall uses its best commercial efforts to cause such registration statement to be declared effective within 180 days of the Closing. The Registration and Lock-Up Agreement, shall further provide, among other things, that the Members shall be prohibited from selling the Parent Stock for a period of not less than one year after the Closing, subject to waiver by Parent.

(b)   " Actual Net Equity " shall mean the Company's total assets less total liabilities (for purposes of this definition, total assets and total liabilities shall be determined in conformity with GAAP and in a manner consistent with that used to prepare the Financial Statements (as defined below)). No later than two (2) days prior to the Closing Date (as defined below), the Company shall prepare and deliver to Buyer a balance sheet dated as of two (2) days prior to the Closing Date, prepared in conformity with GAAP and in a manner consistent with that used to prepare the Financial Statements (the " Closing Balance Sheet "). It is the intent of the parties that all liabilities of the Company, including, but not limited to payroll, accrued vacation, employee benefits, and all accounts payable, will be satisfied by the Company and the Members prior to Closing, and that all remaining cash of the Company, if any, will be distributed to the Members, such that the Actual Net Equity of the Company at Closing, and as reflected on the Closing Balance Sheet, is equal to zero (0). However, in the event that Buyer shall dispute the Closing Balance Sheet, Buyer may, within sixty (60) days after the Closing Date, engage a firm of certified public accountants (the " Independent Expert ") selected by Buyer to audit the Company. The costs and expenses of such Independent Expert shall be borne by Buyer; provided, however, that should the Independent Expert determine that there exists a discrepancy between the Closing Balance Sheet and the Final Balance Sheet (as defined below) in excess of $10,000, the costs of such audit shall be borne by the Members, such costs to be paid by the Members in accordance with Section 2.2.2(c). The Independent Expert shall perform an audit of the Closing Balance Sheet and shall deliver its findings (the " Final Balance Sheet ") to Buyer and the Members no later than sixty (60) days following appointment. The decision of the Independent Expert shall be final and binding upon the parties.

(c)   In the event that the Final Balance Sheet reflects an Actual Net Equity that is lower than that reflected on the Closing Balance Sheet (an " Adjustment "), then the Members shall be obligated to surrender to Parent for cancellation 1 share of Parent Stock for each dollar amount of the Adjustment, plus the costs of the Audit, if any, to be borne by the Members pursuant to Section 2.2.2(b). If the Members are obligated to surrender for cancellation any shares pursuant to this Section 2.2.2, then the Members, within 10 days after receiving written notice from Parent concerning the adjustments to be made pursuant to this Section 2.2.2(c), shall deliver to Parent the certificates for the Parent Shares, duly endorsed in favor of Parent, to the Parent, and the Parent shall promptly issue new certificates to the Members reflecting the number of shares to be issued to each Member after deducting the number of shares to be surrendered and cancelled pursuant to this Section 2.2.2(c).

 

 

The closing of the transactions contemplated herein (the " Closing ") shall be on ____________January 1, 2007 and shall be held at ____________the offices of Buyer, or such other time and date as Buyer and the Company shall agree (the " Closing Date "). At the Closing Buyer and the Members shall take all such action and deliver all such documents, instruments, certificates and other items as may be required, under this Agreement or otherwise, in order to perform or fulfill all covenants, conditions and agreements on its part to be performed or fulfilled at or before the Closing Date and to cause all conditions precedent to the other parties' obligations under this Agreement to be satisfied in full

To induce the Buyer to enter into and perform this Agreement, the Members represent and warrants to Buyer as of the date of this Agreement and as of the Closing as follows in this Article III

Each Member represents with respect to itself as follows in this Section 3.1: David M. King owns forty nine percent (49%) of the membership interests in and to the Company; Glen W. Thurow owns fifty one percent (51%) of the membership interests in and to the Company, and together the Members own one hundred percent (100%) of the membership interests in and to the Company. Such Interests are owned free and clear of any lien, encumbrance, adverse claim, restriction on sale, transfer or voting (other than restrictions imposed by applicable securities laws), preemptive right, option or other right to purchase and upon the consummation of the sale of such Interests as contemplated hereby, Buyer will have good title to such Interests, free and clear of any lien, encumbrance, adverse claim, restriction on sale, transfer or voting (other than restrictions imposed by applicable securities laws), preemptive right, option or other right to purchase.

Such Member has all requisite power, right and authority to enter into this Agreement, including the exhibits and schedules hereto, and each other agreement or document (collectively the " Transaction Documents ") entered into in connection with this Agreement to which it is a party, to consummate the transactions contemplated hereby and thereby, and to sell and transfer the Interests without the consent or approval of any other person or entity. Such Member has taken, or will take prior to the Closing, all actions necessary for the authorization, execution, delivery and performance of this Agreement and the other Transaction Documents.

This Agreement has been, and the other Transaction Documents to which Such Member is a party on the Closing will be, duly executed and delivered by such Member, and this Agreement is, and each of the other Transaction Documents to which such Member is a party on the Closing will be, the legal, valid and binding obligation of such Member, enforceable against such Member in accordance with its terms.

 

 

The execution, delivery and performance of this Agreement and the other Transaction Documents by such Member, and the consummation of the transactions contemplated hereby and thereby, will not (a) constitute a violation (with or without the giving of notice or lapse of time, or both) of any provision of any law or any judgment, decree, order, regulation or rule of any court, agency or other governmental authority applicable to such Member, (b) require any consent, approval or authorization of, or declaration, filing or registration with, any person or entity, (c) result in a default (with or without the giving of notice or lapse of time, or both) under, acceleration or termination of, or the creation in any party of the right to accelerate, terminate, modify or cancel, any agreement, lease, note or other restriction, encumbrance, obligation or liability to which the Company is a party or by which it is bound or to which any assets of the Company are subject, or (d) result in the creation of any lien or encumbrance upon the assets of   the Company or upon the Interests.

Each Member represents and warrants to Buyer as follows: The Company is a limited liability company duly organized, validly existing and in good standing under the laws of the state of New Mexico. The Company is duly qualified to do business, and is in good standing in the states required due to (a) the ownership or lease of real or personal property for use in the operation of the Company's business or (b) the nature of the business conducted by the Company. The Company has all requisite power, right and authority to own, operate and lease its properties and assets, to carry on its business as now conducted and as represented to Buyer by the Company to be conducted, to execute, deliver and perform its obligations under this Agreement and the other Transaction Documents to which it is a party, and to carry out the transactions contemplated hereby and thereby.

All actions on the part of the Company and its Members necessary for the authorization, execution, delivery and performance of this Agreement and the other Transaction Documents, the consummation of the transactions contemplated hereby and thereby, and the performance of all of the Company's obligations under this Agreement and the other Transaction Documents have been taken or will be taken prior to the Closing. This Agreement has been, and the other Transaction Documents to which the Company is a party on the Closing will be, duly executed and delivered by the Company, and this Agreement is, and each of the other Transaction Documents to which it is a party on the Closing will be, a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms.

Each Member represents and warrants to Buyer as follows:

(a)   David M. King owns forty nine percent (49%) of the Interests. Glen W. Thurow owns fifty one percent (51%) of the Interests.

(b)   Together the Interests owned by David M. King and Glen W. Thurow constitute one hundred percent (100%) of the "membership interests" (as that term is defined by NMSA § 53-19-2 (2006)) in and to the Company. Except for the Members, who together hold one hundred percent (100%) of the Interests, no person or entity holds any interest in or to the membership interests of the Company.

(c)   There are no outstanding rights of first refusal, preemptive rights, options, warrants, conversion rights or other agreements, either directly or indirectly, for the purchase or acquisition from the Company of any Interests or other rights (economic or otherwise) of the Company.

 

 

(d)   The Company is not a party or subject to any agreement or understanding, and there is no agreement or understanding between any person or entity, that affects or relates to the voting or giving of written consents with respect to any Interests of the Company or the voting by any Member of the Company.

(e)   The Interests are, and always have been, uncertificated, and no certificates are or have been issued representing the Interests.

Each Member represents and warrants to Buyer as follows: The Company does not have, and has never had, any Subsidiaries and the Company does not own, directly or indirectly, any ownership, equity, profits or voting interest in, or otherwise control, any corporation, partnership, joint venture or other entity, and has no agreement or commitment to purchase any such interest.

Each Member represents and warrants to Buyer as follows: The execution, delivery and performance of this Agreement and the other Transaction Documents, and the consummation of the transactions contemplated hereby and thereby, will not (a) constitute a violation (with or without the giving of notice or lapse of time, or both) of any provision of any law or any judgment, decree, order, regulation or rule of any court, agency or other governmental authority applicable to the Company, (b) require any consent, approval or authorization of, or declaration, filing or registration with, any person or entity, (c) result in a default (with or without the giving of notice or lapse of time, or both) under, acceleration or termination of, or the creation in any party of the right to accelerate, terminate, modify or cancel, any agreement, lease, note or other restriction, encumbrance, obligation or liability to which the Company is a party or by which it is bound or to which any assets of the Company are subject, (d) result in the creation of any lien or encumbrance upon the assets of the Company, or upon any Shares or other securities of the Company, (e) conflict with or result in a breach of or constitute a default under any provision of the ____________Articles of Organization or ____________Operating Agreement (if any) of the Company, or (f) invalidate or adversely affect any permit, license, authorization or status used in the conduct of the business of the Company.

Each Member represents and warrants to Buyer as follows: The Company has delivered to Buyer (a) balance sheets and statements of operations, Members' equity and cash flows of the Company at and for the fiscal years ended ____________2005, and accompanying notes, and (b) unaudited balance sheets and unaudited statements of operations and cash flows of the Company at and for the nine months ended September 30, 2006. All the foregoing financial statements (including the notes thereto) are referred to as the " Financial Statements ". The Financial Statements have been prepared in conformity with GAAP consistently applied throughout the periods covered, except as may be indicated in the notes thereto, and present fairly the financial position, results of operations and changes in financial position of the Company at the dates and for the periods indicated, subject, in the case of the unaudited financial statements, to normal recurring period-end adjustments. The Company has no liabilities or obligations of any nature (absolute, accrued or contingent) that are not fully reflected or reserved against in the Balance Sheet, as prescribed by GAAP and the Financial Accounting Standards Board, except liabilities or obligations incurred since the date of the Balance Sheet in the ordinary course of business and consistent with past practice. The Company maintains and will continue to maintain standard systems of accounting established and administered in accordance with GAAP. The Company is not a guarantor, indemnitor, surety or other obligor of any indebtedness of any other person or entity. Disclosure Schedule 3.6 sets forth all promissory notes, loans, lines of credits or similar obligations pursuant to which the Company is an obligor, together with all the amounts owed by the Company under such obligations, as of the Closing, and all liabilities under real property and equipment leases of the Company (the " Operating Lease Liabilities ").

 

 

 

Each Member represents and warrants to Buyer as follows: Except (a) as and to the extent reflected or reserved against in the Balance Sheet and (b) for liabilities and obligations incurred in the ordinary course of business since the Balance Sheet, which are not material in amount, there are no liabilities or obligations of any nature relating to the Company, due or to become due, known or unknown, accrued, absolute, contingent or otherwise, that would be required to be included in a balance sheet prepared in accordance with GAAP. The Company has not entered into or agreed to enter into any transaction, agreement or commitment, suffered the occurrence of any event or events or experienced any change in financial condition, business, results of operations or otherwise that, in the aggregate, has (i) interfered with the normal and usual operations of the business or business prospects of the business or (ii) resulted in a material adverse change in the business, assets, operations, prospects or condition (financial or other) or could reasonably be expected to have such material adverse effect.

Each Member represents and warrants to Buyer as follows:

(a)   For purposes of this Agreement, the term " Taxes ," means (i) any and all federal, state, local and foreign taxes, assessments and other governmental charges, duties, impositions and liabilities, including, without limitation, taxes based upon or measured by gross receipts, income, profits, sales, use and occupation, and value added, ad valorem, transfer, franchise, withholding, payroll, recapture, employment, excise and property taxes, together with all interest, penalties and additions imposed with respect to such amounts; (ii) any liability for the payment of any amounts of the type described in clause (i) as a result of being or ceasing to be a member of an affiliated, consolidated, combined or unitary group for any period (including, without limitation, any liability under Treasury Regulation Section 1.1502-6 or any comparable provision of foreign, state or local law); and (iii) any liability for the payment of any amounts of the type described in clause (i) or (ii) as a result of any express or implied obligation to indemnify any other Person or as a result of any obligations under any agreements or arrangements with any other Person with respect to such amounts and including any liability for taxes of a predecessor entity; and the term "Tax" means any one of the foregoing Taxes.

 

 

(b)   The Company has filed on a timely basis all reports, returns, declarations, claims for refund, information returns, statements or other similar documents, including any schedules or attachments thereto, and including any amendment thereof with respect to any Taxes (" Tax Returns ") that the Company was required to file. All such Tax Returns were correct and complete in all respects and have been prepared and completed in accordance with applicable law, including all and were prepared in accordance with the applicable statutes, rules and regulations. No such Tax Returns are currently the subject of audit or examination nor has the Company been notified in writing, or otherwise, of any request for an audit or examination. All Taxes owed by the Company (whether or not shown on any Tax Return) were paid in full when due or are being contested in good faith and are supported by adequate reserves on the Financial Statements. The Company has provided adequate reserves on its Financial Statements for the payment of any Taxes accrued but not yet due and payable. The Company is not currently the beneficiary of any extension of time within which to file any Tax Return, and the Company has not waived any statute of limitations in respect of Taxes or agreed to any extension of time with respect to any Tax assessment or deficiency. The Company has duly and timely withheld from employee salaries, or wages or other compensation (whether or not paid in cash) and other amounts paid to creditors, independent contractors and other third parties and paid over to the appropriate governmental authority all amounts required to be so withheld and paid over for all periods under all applicable Tax or other laws. No amounts have been or would be required to be withheld with respect to the lapse of restrictions on the Shares. The Tax Returns of the Company do not contain a disclosure under Section 6662 of the Internal Revenue Code of 1986, as amended (the " Code ") (or any predecessor provision or comparable provision of state, local or foreign law). The Company does not do business in or derive income from any state, local or foreign jurisdiction other than those jurisdictions for which Tax Returns have been duly filed by the Company.

(c)   There is no dispute, claim or proposed adjustment concerning any Tax liability of the Company either (A) claimed or raised by any authority in writing or (B) based upon personal contact with any agent of such authority. The Company is not a party to nor has it been notified in writing or, otherwise, that it is the subject of any pending, proposed or threatened action, investigation, proceeding, audit, claim or assessment by or before the IRS or any other governmental authority, and no claim for assessment, deficiency or collection of Taxes, or proposed assessment, deficiency or collection from the IRS or any other governmental authority which has not been satisfied, nor does the Company have any reason to believe that any such notice will be received in the future. The IRS has never audited any Tax Return of the Company. The Company has not filed any requests for rulings with the IRS. No power of attorney has been granted by the Company, its Members or their affiliates with respect to any matter relating to Taxes of the Company. There are no Tax liens of any kind upon any property or assets of the Company, except for inchoate liens for Taxes not yet due and payable.

Each Member represents and warrants to Buyer as follows:

(a)   Disclosure Schedule 3.9(a) contains a complete and accurate list of all real property that is owned, leased, rented or used by the Company (the " Real Property "). The Company has delivered to Buyer true and complete copies of all leases, subleases, rental agreements, contracts of sale, tenancies or licenses relating to the Real Property.

(b)   Disclosure Schedule 3.9(b) contains a complete and accurate list of each item of personal property   having a book value in excess of $2,000 that is owned, leased, rented or used by the Company (the " Personal Property "); and the Company has delivered to Buyer true and complete copies of all leases, subleases, rental agreements, contracts of sale, tenancies or licenses relating to the Personal Property.

 

 

(c)   The Real Property and the Personal Property include all properties and assets (whether real, personal or mixed, tangible or intangible) reflected in the Balance Sheet and all the properties and assets purchased by the Company since the date of the Balance Sheet (except for such properties or assets sold since the date of the Balance Sheet in the ordinary course of business and consistent with past practice). The Real Property and the Personal Property include all property used in the business of the Company.

(d)   The Company's title to or leasehold interest in, as applicable, each parcel of the Real Property is free and clear of all liens, mortgages, pledges, deeds of trust, security interests, charges, encumbrances, institutional controls and other adverse claims or interests of any kind.

(e)   The Company's offices, manufacturing and production facilities and other structures and the Company's Personal Property are adequate for the uses to which they are being put and there are no applicable adverse zoning, building or land use codes or rules, ordinances, regulations or other restrictions relating to zoning or land use that currently or may prospectively prevent, or cause the imposition of material fines or penalties as the result of, the use of all or any portion of the Real Property for the conduct of the business as presently conducted. The Company has received all necessary approvals with regard to occupancy and maintenance of the Real Property.

(g)   Each lease of any portion of the Real Property and each lease, license, rental agreement, contract of sale or other agreement to which the Personal Property is subject is valid, binding and enforceable in accordance with its terms against the parties thereto; the Company has performed all obligations imposed upon it thereunder; and the Company is not in default thereunder, nor is there any event that with notice or lapse of time, or both, would constitute a default thereunder. No consent is required from any Person under any lease or other agreement or instrument relating to the Real Property or Personal Property in connection with the consummation of the transactions contemplated by this Agreement, and the Company has not received notice that any party to any such lease or other agreement or instrument intends to cancel, terminate or refuse to renew the same or to exercise or decline to exercise any option or other right thereunder. The Company has not granted any lease, sublease, tenancy or license of any portion of the Real Property or Personal Property.

Each Member represents and warrants to Buyer as follows: Disclosure Schedule 3.10 contains a complete and accurate list as of all material contracts, agreements, arrangements and understandings, oral or written, to which the Company is a party or by which the Company is bound, including, without limitation, all security agreements, intellectual property licenses and other license agreements, credit agreements, instruments relating to the borrowing of money, purchase contracts, sale contracts, research contracts and scientific collaboration or cooperation agreements. All such material contracts set forth on such Schedule 3.10 are valid, binding and enforceable in accordance with their terms against each party thereto and are in full force and effect; the Company has performed all obligations imposed upon it thereunder; and the Company is not in default thereunder; nor is there any event that with notice or lapse of time, or both, would constitute a default thereunder. Furthermore, no breach or default by any other party to any such contract of any provision thereof, nor any condition or event that, with notice or lapse of time or both, would constitute such a breach or default, has occurred. True and complete copies of each such contract have been delivered to Buyer. No consent is required from any person or entity under any contract, agreement, arrangement or understanding set forth on Disclosure Schedule 3.10 in connection with the consummation of the transactions contemplated by this Agreement, and the Company has not received notice, and is not otherwise aware, that any party to any such contract, agreement, arrangement or understanding intends to cancel, terminate or refuse to renew such contract, agreement, arrangement or understanding or to exercise or decline to exercise any option or right thereunder.

 

 

 

Each Member represents and warrants to Buyer as follows: Disclosure Schedule 3.11 sets forth: (a) a complete and accurate list of the customers of the Company accounting for 2% or more of the Company's revenues during the last fiscal year and (b) a complete and accurate list of the suppliers of the Company from whom the Company has purchased 5% or more of the goods or services purchased by the Company in the last fiscal year. The Company has not received any notice from its customers or suppliers that would cause it, in its reasonable judgment, to expect any material modification to its relationship with any customers or suppliers named on such Schedule 3.11 .

Each Member represents and warrants to Buyer as follows: There are no claims, actions, suits, arbitrations, criminal or civil investigations or proceedings pending or involving or, to the knowledge of the Members, threatened against the Company before or by any court or governmental or nongovernmental department, commission, board, bureau, agency or instrumentality, or any other Person. To the knowledge of the Members, there is no valid basis for any claim, action, suit, arbitration, investigation or proceeding that could reasonably be expected to be materially adverse to the business, assets, operations, prospects or condition (financial or other) of the Company before or by any person or entity. There are no outstanding or unsatisfied judgments, orders, decrees or stipulations to which the Company is a party that involve the transactions contemplated herein or that would have a material adverse effect on the business, assets, operations, prospects or condition (financial or other) of the Company.

Each Member represents and warrants to Buyer as follows: There are no labor disputes, employee grievances or disciplinary actions pending or, to the knowledge of the Members, threatened against or involving the Company or any present or former employee of the Company. The Company has complied with all provisions of law relating to employment and employment practices, terms and conditions of employment, wages and hours including, without limitation, equal opportunity, workplace safety, workers' compensation and other similar laws. The Company is not engaged in any unfair labor practice and does not have any liability for any arrears of wages or Taxes or penalties for failure to comply with any such provisions of law. There is no labor strike, dispute, slowdown or stoppage pending or threatened against or affecting the Company, and the Company has not experienced any work stoppage or similar concerted employee activities. No collective bargaining agreement is binding on the Company. The Company does not have any knowledge of any organizational efforts presently being made or threatened by or on behalf of any labor union with respect to employees of the Company, and the Company has not been requested by any group of employees or others to enter into any collective bargaining agreement or other agreement with any labor union or other employee organization.

 

 

Each Member represents and warrants to Buyer as follows:

(a)   Employee Benefit Plan Listing . Disclosure Schedule 3.15 contains a complete and accurate list of all benefit plans and arrangements (" Employee Benefit Plans "). The Company does not have any agreement, arrangement, commitment or obligation, whether formal or informal, whether written or unwritten and whether legally binding or not, to create, enter into or contribute to any additional Employee Benefit Plan, or to modify or amend any existing Employee Benefit Plan. There has been no amendment, interpretation or other announcement (written or oral) by the Company or any other Person relating to, or change in participation or coverage under, any Employee Benefit Plan that, either alone or together with other such items or events, could Materially increase the expense of maintaining such Employee Benefit Plan (or the Employee Benefit Plans taken as a whole) above the level of expense incurred with respect thereto for the most recent fiscal year included in the Financial Statements. The terms of each Employee Benefit Plan permit the Company to amend or terminate such Employee Benefit Plan at any time and for any reason without penalty and without Material liability or expense. None of the rights of the Company under any Employee Benefit Plan will be impaired in any way by this Agreement or the consummation of the transactions contemplated by this Agreement.

(b)   Intentionally Omitted.

(c)   Compliance . With respect to each Employee Benefit Plan: (i) such Employee Benefit Plan is, and at all times since inception has been, maintained, administered, operated and funded in all respects in accordance with its terms and in compliance with all applicable requirements of all applicable laws, statutes, orders, rules and regulations, including, without limitation, ERISA, COBRA, HIPAA and the Code; (ii) the Company and all other persons or entities (including, without limitation, all fiduciaries) have, at all times, properly performed all of their duties and obligations (whether arising by operation of law or by contract) under or with respect to such Employee Benefit Plan, including, without limitation, all reporting, disclosure and notification obligations; (iii) all Returns and other information relating to such Employee Benefit Plan required to be filed with any governmental entity or agency have been accurately completed and timely and properly filed; (iv) all notices, statements, reports and other disclosure (including, without limitation, all summary plan descriptions and summaries of material modifications) required to be given or made to participants in such Employee Benefit Plan or their beneficiaries have been accurately completed and timely and properly disclosed or provided; (v) neither the Company nor any fiduciary of such Employee Benefit Plan has engaged in any transaction or acted or failed to act in a manner that violates the fiduciary requirements of ERISA or any other applicable law; (vi) no transaction or event has occurred or is threatened or about to occur (including any of the transactions contemplated in or by this Agreement) that constitutes or could constitute a prohibited transaction under Section 406 or 407 of ERISA or under Section 4975 of the Code for which an exemption is not available; and (vii) the Company has not incurred, and there exists no condition or set of circumstances in connection with which the Company or Buyer could incur, directly or indirectly, any Material liability or expense (except for routine contributions and benefit payments) under ERISA, the Code or any other applicable law, statute, order, rule or regulation, or pursuant to any indemnification or similar agreement, with respect to such Employee Benefit Plan.

(e)   Contributions, Premiums and Other Payments . All contributions, premiums and other payments due or required to be paid to (or with respect to) each Employee Benefit Plan have been timely paid, or, if not yet due, have been accrued as a liability on the Financial Statements. All income taxes and wage taxes that are required by law to be withheld from benefits derived under the Employee Benefit Plans have been properly withheld and remitted to the proper depository.

 

 

(f)   Post-Employment Benefits . Neither the Company nor any Employee Benefit Plan provides or has any obligation to provide (or contribute toward the cost of) post-employment or post-termination benefits of any kind, including, without limitation, death and medical benefits, with respect to any current or former Member, employee, agent, or independent contractor of the Company, other than (i) continuation coverage mandated by Sections 601 through 608 of ERISA and Section 4980B(f) of the Code, (ii) retirement benefits under any Employee Benefit Plan that is qualified under Section 401(a) of the Code, and (iii) deferred compensation that is accrued as a current liability on the Financial Statements.

(g)   Suits, Claims and Investigations . There are no actions, suits or claims (other than routine claims for benefits) pending or, to the knowledge of the Members, threatened with respect to (or against the assets of) any Employee Benefit Plan, nor, to the knowledge of the Members is there a basis for any such action, suit or claim. No Employee Benefit Plan is currently under investigation, audit or review, directly or indirectly, by the IRS, the DOL or any other governmental entity or agency, and, to the knowledge of the Members, no such action is contemplated or under consideration by the IRS, the DOL or any other governmental entity or agency.

(h)   Effect of Transaction . Neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated by this Agreement, will (i) entitle any individual to severance pay, unemployment compensation or any other payment from the Company, Buyer or any Employee Benefit Plan, (ii) otherwise increase the amount of compensation due to any individual or forgive indebtedness owed by any individual, (iii) result in any benefit or right becoming established or increased, or accelerate the time of payment or vesting of any benefit, under any Employee Benefit Plan, or (iv) require the Company or Buyer to transfer or set aside any assets to fund or otherwise provide for any benefits for any individual.

Each Member represents and warrants to Buyer as follows:

Except for the Third Party Technologies (as defined in Section 3.17.2), the Company owns all right, title and interest in and to the following (collectively, the " Technology "), free and clear of all Encumbrances: (a) all products, computer programs, specifications, source code, object code, graphics, devices, techniques, algorithms, methods, technology, processes, procedures, packaging, trade dress, formulae, drawings, designs, concepts, user interfaces, "look and feel," software or development tools and content that are now or during the two (2) years prior to the date of this Agreement have been, or are currently proposed to be, developed, produced, used, marketed and/or sold in the Company's business; (b) any and all updates, enhancements, corrections, modifications, improvements and new releases related to the items set forth in (a), above; (c) any and all technology and work in progress related to the items set forth in (a) and (b), above; and (d) all inventions, discoveries, processes, designs, trade secrets, know-how and other confidential or proprietary information related to the items set forth in (a), (b) and (c), above. The Technology, excluding the Third Party Technologies, is sometimes referred to as the " Company Technology ."

 

 

Disclosure Schedule 3.17.2 sets forth a list of all Technology used in the Company's business for which the Company does not own all right, title and interest (collectively, the " Third Party Technologies "), and all license agreements or other contracts pursuant to which the Company has the right to use (in the manner used by the Company, or intended or necessary for use with the Company Technology) the Third Party Technologies (the " Third Party Licenses "), indicating, with respect to each of the Third Party Technologies listed, the owner and the Third Party License. The Company has the lawful right to use (free of any material restriction) (a) all Third Party Technology that is incorporated in or used in the development or production of the Company Technology, and (b) all other Third Party Technology necessary for the conduct of the Company's business as now conducted and as proposed to be conducted. All Third Party Licenses are valid, binding and in full force and ef