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MEDICAL MEDIA TELEVISION, INC.
$250,000 10% SECURED CONVERTIBLE PROMISSORY NOTE DUE
AUGUST 11, 2007
NOTE PURCHASE AGREEMENT
By and Between
MEDICAL MEDIA TELEVISION, INC.
and
VICIS CAPITAL MASTER FUND
DATED FEBRUARY 1, 2007
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<PAGE>
NOTE PURCHASE AGREEMENT
This NOTE PURCHASE AGREEMENT (the "Agreement"), dated this 1st day
of
February, 2007, is made by and between MEDICAL MEDIA TELEVISION,
INC., a Florida
corporation (the "Company"), and VICIS CAPITAL MASTER FUND (the
"Purchaser"), a
trust formed under the laws of the Cayman Islands.
R E C I T A L S
WHEREAS, pursuant to the terms and conditions of this Agreement,
the
Company wishes to issue and sell to the Purchaser, and the
Purchaser wishes to
acquire from the Company, a 10% Secured Convertible Promissory Note
due August
11, 2007 in the principal amount of $250,000 and in the form
attached hereto as
Exhibit A (the "Note").
WHEREAS, as an inducement for the Purchaser's acquisition of the
Note, the
Company has agreed to register with the SEC for resale by the
Purchaser the
shares of Common Stock issuable upon conversion of the Note (the
"Note Shares")
pursuant to a registration rights agreement, in the form attached
hereto as
Exhibit B (the "Registration Rights Agreement").
NOW, THEREFORE, the Company and the Purchaser hereby agree as
follows:
ARTICLE I
PURCHASE AND SALE OF THE NOTE
1.1 Purchase and Sale of the Note. Subject to the terms and
conditions
hereof and in reliance on the representations and warranties
contained herein,
or made pursuant hereto, the Company will issue and sell to the
Purchaser, and
the Purchaser will purchase from the Company at the closing of the
transactions
contemplated hereby (the "Closing"), the Note for $250,000 (the
"Purchase
Price").
1.2 Closing. The Closing shall be deemed to occur at the offices
of
Quarles & Brady, LLP, 411 East Wisconsin Avenue, Milwaukee,
Wisconsin at 5:00
p.m. CDT on February 1, 2007 or at such other place, date or time
as mutually
agreeable to the parties (the "Closing Date).
1.3 Closing Matters. On the Closing Date, subject to the terms
and
conditions hereof, the following actions shall be taken:
(a) The Company will deliver to the Purchaser the Note dated
the
Closing Date, in the principal amount of $250,000.
(b) The Purchaser shall deliver to the Company the Purchase Price
in
immediately available funds to the Company.
<PAGE>
ARTICLE II
SECURITY DOCUMENTS
2.1 Company Security Documents.
(a) Security Agreement. All of the obligations of the Company
under
the Note shall be secured by a lien on all the personal property
and assets of
the Company now existing or hereinafter acquired granted pursuant
to a security
agreement dated of even date herewith between the Company and
Purchaser
("Security Agreement"), which, except for Permitted Liens (as
hereinafter
defined), shall be a first lien.
(b) Stock Pledge Agreement. To secure the obligations of the
Company
under this Agreement and the Note, the Company shall pledge,
hypothecate, and
assign, to the Purchaser all the capital stock of its Subsidiaries
(the "Pledged
Shares"), pursuant to a stock pledge agreement ("Stock Pledge
Agreement"). The
Pledged Shares were previously transferred and delivered to Quarles
& Brady LLP
(the "Escrow Agent") pursuant to the terms of that certain Stock
Pledge and
Escrow Agreement, dated August 11, 2006.
2.2 Guaranty. All of the obligations of the Company under the Note
shall
be guaranteed pursuant to a guaranty agreement by each of the
Company's
Subsidiaries set forth in Section 5.4(e) hereof ("Guaranty
Agreement").
2.3 Guarantor Security Documents. All of the obligations of the
Subsidiaries under the Guaranty Agreement shall be secured by a
lien on all the
personal property and assets of each respective Subsidiary now
existing or
hereinafter acquired granted pursuant to a guarantor security
agreement dated of
even date herewith between the Company and each Subsidiary set
forth in Section
5.4(f) hereof ("Guarantor Security Agreement"), which, except for
Permitted
Liens, shall be a first lien.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to the Purchaser as of
the date
of this Agreement as follows:
3.1 Organization and Qualification. The Company is a corporation
duly
organized and validly existing and in good standing under the laws
of the
jurisdiction in which it is incorporated, and has all requisite
corporate power
and authority to carry on its business as now conducted. The
Company is duly
qualified as a foreign corporation to do business and is in good
standing in
every jurisdiction in which its ownership of property or the nature
of the
business conducted by it makes such qualification necessary, except
to the
extent that the failure to be so qualified or be in good standing
would not have
a Material Adverse Effect. As used in this Agreement, "Material
Adverse Effect"
means any material adverse effect on the business, properties,
assets,
operations, results of operations, condition (financial or
otherwise) or
prospects of the Company and its Subsidiaries or on the
transactions
contemplated hereby or by the agreements and instruments to be
entered into in
connection herewith, or on the authority or ability of the Company
to perform
its obligations under the Transaction Documents (as hereinafter
defined).
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<PAGE>
3.2 Subsidiaries. The Company has no subsidiaries other than
PetCARE
Television Network, Inc., a Florida corporation ("PetCARE"),
African American
Medical Network, Inc., a Florida corporation ("African American
Medical"), and
KidCARE Medical Television Network, Inc., a Florida corporation
("KidCARE")
(each a "Subsidiary" and collectively, the "Subsidiaries"). The
Company owns,
directly or indirectly, all of the capital stock of its
Subsidiaries, free and
clear of any and all Liens, and all the issued and outstanding
shares of capital
stock of each Subsidiary are validly issued and are fully paid,
non-assessable
and free of preemptive and similar rights. Each Subsidiary is a
corporation duly
organized and validly existing and in good standing under the laws
of the
jurisdiction in which it is incorporated, and has all requisite
corporate power
and authority to carry on its business as now conducted. Each
Subsidiary is duly
qualified as a foreign corporation to do business and is in good
standing in
every jurisdiction in which its ownership of property or the nature
of the
business conducted by it makes such qualification necessary, except
to the
extent that the failure to be so qualified or be in good standing
would not have
a Material Adverse Effect.
3.3 No Violation. Neither the Company nor any of its Subsidiaries
is in
violation of: (a) any of the provisions of its certificate or
articles of
incorporation, bylaws or other organizational or charter documents;
or (b) any
judgment, decree or order or any statute, ordinance, rule or
regulation
applicable to the Company or any of its Subsidiaries, except for
possible
violations which would not, individually or in the aggregate, have
a Material
Adverse Effect.
3.4 Capitalization.
(a) As of the date hereof, the Company's authorized capital
stock
consists of (i) 100,000,000 shares of Common Stock, par value
$.0005 per share,
of which 21,121,302 shares are outstanding and 40,600,182 shares
have been
reserved for issuance upon the exercise of all of the outstanding
options,
warrants and other securities issued by the Company that are
convertible into
Common Stock; and (ii) 25,000,000 shares of Preferred Stock, no par
value per
share, of which 4,311,842 shares are outstanding. All of such
outstanding shares
have been, or upon issuance will be, validly issued, are fully paid
and
nonassessable.
(b) Except as disclosed in the Company's reports, financial
statements, schedules, forms, statements and other documents
required to be
filed by it with the Securities and Exchange Commission (the "SEC")
pursuant to
the reporting requirements of the Securities Exchange Act of 1934,
as amended
(the "Exchange Act") or otherwise on Schedule 3.4(b), prior to the
date hereof
(the "SEC Documents"):
(i) no holder of shares of the Company's capital stock has any
preemptive rights or any other similar rights or has been granted
or holds any
liens or encumbrances suffered or permitted by the Company;
(ii) except for annual issuances of Common Stock that will be
issued in connection with the Company's ESOP and to an advisory
board that in
the aggregate will not exceed, during any calendar year, 1.576% of
the Company's
outstanding Common Stock calculated on a fully-diluted basis at a
per share
price of $.17, there are no outstanding options, warrants, scrip,
rights to
subscribe to, calls or commitments of any character whatsoever
relating to, or
securities or rights convertible into, or exercisable or
exchangeable for, any
shares of capital stock of the Company or any of its Subsidiaries,
or contracts,
commitments, understandings or arrangements by which the Company or
any of its
Subsidiaries is or may become bound to issue additional shares of
capital stock
of the Company or any of its Subsidiaries or options, warrants,
scrip, rights to
subscribe to, calls or commitments of any character whatsoever
relating to, or
securities or rights convertible into, or exercisable or
exchangeable for, any
shares of capital stock of the Company or any of its
Subsidiaries;
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<PAGE>
(iii) there are no outstanding debt securities, notes, credit
agreements, credit facilities or other agreements, documents or
instruments
evidencing Indebtedness (as defined in Section 3.14 hereof) of the
Company or
any of its Subsidiaries or by which the Company or any of its
Subsidiaries is or
may become bound;
(iv) there are no financing statements securing obligations in
any material amounts, either singly or in the aggregate, filed in
connection
with the Company any of its Subsidiaries;
(v) there are no agreements or arrangements under which the
Company or any of its Subsidiaries is obligated to register the
sale of any of
their securities under the Securities Act of 1933, as amended, (the
"Securities
Act");
(vi) there are no outstanding securities or instruments of the
Company or any of its Subsidiaries that contain any redemption or
similar
provisions, and there are no contracts, commitments, understandings
or
arrangements by which the Company or any of its Subsidiaries is or
may become
bound to redeem a security of the Company or any of its
Subsidiaries;
(vii) there are no securities or instruments containing
antidilution or similar provisions that will be triggered by the
issuance of the
Note; and
(viii) the Company does not have any stock appreciation rights
or "phantom stock" plans or agreements or any similar plan or
agreement.
3.5 Issuance of the Note.
(a) The Note to be issued hereunder is duly authorized and,
upon
payment and issuance in accordance with the terms hereof, shall be
free from all
taxes, Liens and charges with respect to the issuance thereof. As
of the
Closing, the Company has authorized or reserved the necessary
number of shares
of Common Stock for the issuance of the Note Shares. All actions by
the Board,
the Company and its stockholders necessary for the valid issuance
of the Note
and the Note Shares pursuant to the terms of the Note has been
taken.
(b) The Note Shares, when issued and paid for upon conversion of
the
Note, will be validly issued, fully paid and nonassessable and free
from all
taxes, Liens and charges with respect to the issue thereof, with
the holders
being entitled to all rights accorded to a holder of the Common
Stock.
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<PAGE>
3.6 Authorization; Enforcement; Validity. The Company has the
requisite
corporate power and authority to enter into and perform its
obligations under
this Agreement, the Registration Rights Agreement, the Security
Agreement, the
Stock Pledge Agreement, and the Note, and each of the other
agreements or
instruments entered into by the parties hereto in connection with
the
transactions contemplated by this Agreement (collectively, the
"Transaction
Documents") and to issue the Note in accordance with the terms
hereof and
thereof. The execution and delivery of the Transaction Documents by
the Company
and the consummation by the Company of the transactions
contemplated hereby and
thereby, including, without limitation, and the issuance of the
Note, have been
duly authorized by the board of directors of the Company (the
"Board"), and no
further consent or authorization is required by the Company, the
Board or its
stockholders. This Agreement and the other Transaction Documents of
even date
herewith have been duly executed and delivered by the Company, and
constitute
the legal, valid and binding obligations of the Company enforceable
against the
Company in accordance with their respective terms, except (i) as
such
enforceability may be limited by general principles of equity or
applicable
bankruptcy, insolvency, reorganization, moratorium, liquidation or
similar laws
relating to, or affecting generally, the enforcement of applicable
creditors'
rights and remedies, or (ii) as any rights to indemnity or
contribution
hereunder may be limited by federal and state securities laws and
public policy
consideration.
3.7 Dilutive Effect. The Company understands and acknowledges that
its
obligation to issue the Note Shares upon conversion of the Note in
accordance
therewith is absolute and unconditional regardless of the dilutive
effect that
such issuance may have on the ownership interests of other
stockholders of the
Company.
3.8 No Conflicts. The execution, delivery and performance of
the
Transaction Documents by the Company and the consummation by the
Company of the
transactions contemplated hereby and thereby (including, without
limitation, the
reservation for issuance of the Note Shares) will not (i) result in
a violation
of any articles or certificate of incorporation, any certificate
of
designations, preferences and rights of any outstanding series of
preferred
stock or bylaws of the Company or any of its Subsidiaries or (ii)
conflict with,
or constitute a default (or an event which with notice or lapse of
time or both
would become a default) under, or give to others any rights of
termination,
amendment, acceleration or cancellation of, any material agreement,
indenture or
instrument to which the Company or any of its Subsidiaries is a
party, or (iii)
result in a violation of any law, rule, regulation, order, judgment
or decree
(including federal and state securities laws and regulations)
applicable to the
Company or any of its Subsidiaries or by which any property or
asset of the
Company or any of its Subsidiaries is bound or affected, except in
the case of
clauses (ii) and (iii), for such breaches or defaults as would not
be reasonably
expected to have a Material Adverse Effect.
3.9 Governmental Consents. Except for the filing of a Form D with
the SEC
and the registration of the Note Shares under the Securities Act
for resale by
the Purchaser, the Company is not required to obtain any consent,
authorization
or order of, or make any filing or registration with, any court,
governmental
agency or any regulatory or self-regulatory agency or any other
Person (as
hereinafter defined) in order for it to execute, deliver or perform
any of its
obligations under or contemplated by the Transaction Documents, in
each case, in
accordance with the terms hereof or thereof. All consents,
authorizations,
orders, filings and registrations which the Company is required to
obtain at or
prior to the Closing pursuant to the preceding sentence have been
obtained or
effected. The Company is unaware of any facts or circumstances
which might
prevent the Company from obtaining or effecting any of the
foregoing.
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<PAGE>
3.10 No General Solicitation. Neither the Company, nor any of
its
affiliates, nor any Person acting on its or their behalf, has
engaged in any
form of general solicitation or general advertising (within the
meaning of
Regulation D under the Securities Act) in connection with the offer
or sale of
the Note.
3.11 No Integrated Offering. None of the Company, its subsidiaries,
any of
their affiliates, and any Person acting on their behalf has,
directly or
indirectly, made any offers or sales of any security or solicited
any offers to
buy any security, under circumstances that would require
registration of the
Note under the Securities Act or cause this offering of the Note to
be
integrated with prior offerings by the Company for purposes of the
Securities
Act or any applicable stockholder approval provisions.
3.12 Placement Agent's Fees. No brokerage or finder's fee or
commission
are or will be payable to any Person with respect to the
transactions
contemplated by this Agreement based upon arrangements made by the
Company or
any of its affiliates.
3.13 Litigation. There is no action, suit, proceeding, inquiry
or
investigation before or by any court, public board, government
agency,
self-regulatory organization or body pending or, to the knowledge
of the
Company, threatened against or affecting the Company, the
transactions
contemplated by the Transaction Documents, the Common Stock or any
of its
Subsidiaries or any of their respective current or former officers
or directors
in their capacities as such. To the knowledge of the Company, there
has not been
within the past two (2) years, and there is not pending, any
investigation by
the SEC involving the Company or any current or former director or
officer of
the Company (in his or her capacity as such). The SEC has not
issued any stop
order or other order suspending the effectiveness of any
registration statement
filed by the Company under the Securities Act within the past two
(2) years.
3.14 Indebtedness and Other Contracts. Except as disclosed in the
SEC
Documents or otherwise set forth on Schedule 3.14, neither the
Company nor any
of its Subsidiaries (a) has any outstanding Indebtedness (as
defined below), (b)
is a party to any contract, agreement or instrument, the violation
of which, or
default under, by any other party to such contract, agreement or
instrument
would result in a Material Adverse Effect, (c) is in violation of
any term of or
in default under any contract, agreement or instrument relating to
any
Indebtedness, except where such violations and defaults would not
result,
individually or in the aggregate, in a Material Adverse Effect, or
(d) is a
party to any contract, agreement or instrument relating to any
Indebtedness, the
performance of which, in the judgment of the Company's officers,
has or is
expected to have a Material Adverse Effect. For purposes of this
Agreement: (x)
"Indebtedness" of any Person means, without duplication (i) all
indebtedness for
borrowed money, (ii) all obligations issued, undertaken or assumed
as the
deferred purchase price of property or services (other than trade
payables
entered into in the ordinary course of business), (iii) all
reimbursement or
payment obligations with respect to letters of credit, surety bonds
and other
similar instruments, (iv) all obligations evidenced by notes,
bonds, debentures
or similar instruments, including obligations so evidenced incurred
in
connection with the acquisition of property, assets or businesses,
(v) all
indebtedness created or arising under any conditional sale or other
title
retention agreement, or incurred as financing, in either case with
respect to
any property or assets acquired with the proceeds of such
indebtedness (even
though the rights and remedies of the seller or bank under such
agreement in the
event of default are limited to repossession or sale of such
property), (vi) all
monetary obligations under any leasing or similar arrangement
which, in
connection with generally accepted accounting principles,
consistently applied
for the periods covered thereby, is classified as a capital lease,
(vii) all
indebtedness referred to in clauses (i) through (vi) above secured
by (or for
which the holder of such Indebtedness has an existing right,
contingent or
otherwise, to be secured by) any mortgage, lien, pledge, change,
security
interest or other encumbrance upon or in any property or assets
(including
accounts and contract rights) owned by any Person, even though the
Person which
owns such assets or property has not assumed or become liable for
the payment of
such indebtedness, and (viii) all Contingent Obligations in respect
of
indebtedness or obligations of others of the kinds referred to in
clauses (i)
through (vii) above; (y) "Contingent Obligation" means, as to any
Person, any
direct or indirect liability, contingent or otherwise, of that
Person with
respect to any indebtedness, lease, dividend or other obligation of
another
Person if the primary purpose or intent of the Person incurring
such liability,
or the primary effect thereof, is to provide assurance to the
obligee of such
liability that such liability will be paid or discharged, or that
any agreements
relating thereto will be complied with, or that the holders of such
liability
will be protected (in whole or in part) against loss with respect
thereto; and
(z) "Person" means an individual, a limited liability company, a
partnership, a
joint venture, a corporation, a trust, an unincorporated
organization and a
government or any department or agency thereof.
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<PAGE>
3.15 Financial Information; SEC Documents. The Company has filed
all
reports, schedules, forms, statements and other documents required
to be filed
by it with the SEC pursuant to the reporting requirements of the
Exchange Act.
As of their respective dates, the SEC Documents complied in all
material
respects with the requirements of the Exchange Act and the rules
and regulations
of the SEC promulgated thereunder applicable to such SEC Documents,
and none of
such SEC Documents, at the time they were filed with the SEC,
contained any
untrue statement of a material fact or omitted to state a material
fact required
to be stated therein or necessary in order to make the statements
therein, in
the light of the circumstances under which they were made, not
misleading. As of
their respective dates, the financial statements of the Company
included in such
SEC Documents complied as to form in all material respects with
applicable
accounting requirements and the published rules and regulations of
the SEC with
respect thereto. Such financial statements have been prepared in
accordance with
generally accepted accounting principles, consistently applied,
during the
periods involved (except (i) as may be otherwise indicated in such
financial
statements or the notes thereto, or (ii) in the case of unaudited
interim
statements, to the extent they may exclude footnotes or may be
condensed or
summary statements) and fairly present in all material respects the
financial
position of the Company as of the dates thereof and the results of
its
operations and cash flows for the periods then ended (subject, in
the case of
unaudited statements, to normal year-end audit adjustments). No
other
information provided by or on behalf of the Company to the
Purchaser that is not
included in the SEC Documents contains any untrue statement of a
material fact
or omits to state any material fact necessary in order to make the
statements
therein, in the light of the circumstance under which they are or
were made, not
misleading.
3.16 Absence of Certain Changes. Except as disclosed in the SEC
Documents,
since December 31, 2005, there has been no material adverse change
and no
material adverse development in the business, properties,
operations, condition
(financial or otherwise), results of operations or prospects of the
Company or
its Subsidiaries. Since December 31, 2005, the Company has not (i)
declared or
paid any dividends, (ii) sold any assets, individually or in the
aggregate, in
excess of $50,000 outside of the ordinary course of business or
(iii) had
capital expenditures, individually or in the aggregate, in excess
of $100,000.
The Company has not taken any steps to seek protection pursuant to
any
bankruptcy law nor does the Company have any knowledge or reason to
believe that
its creditors intend to initiate involuntary bankruptcy proceedings
or any
actual knowledge of any fact which would reasonably lead a creditor
to do so.
After giving effect to the transactions contemplated hereby to
occur at the
Closing, the Company will not be Insolvent (as hereinafter
defined). For
purposes of this Agreement, "Insolvent" means (i) the present fair
saleable
value of the Company's assets is less than the amount required to
pay the
Company's total indebtedness, contingent or otherwise, (ii) the
Company is
unable to pay its debts and liabilities, subordinated, contingent
or otherwise,
as such debts and liabilities become absolute and matured, (iii)
the Company
intends to incur or believes that it will incur debts that would be
beyond its
ability to pay as such debts mature or (iv) the Company has
unreasonably small
capital with which to conduct the business in which it is engaged
as such
business is now conducted and is proposed to be conducted.
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<PAGE>
3.17 Foreign Corrupt Practices.
(a) Neither the Company, nor any director, officer, agent,
employee
or other Person acting on behalf of the Company has, in the course
of its
actions (a) used any corporate funds for any unlawful contribution,
gift,
entertainment or other unlawful expenses relating to political
activity, (b)
made any direct or indirect unlawful payment to any foreign or
domestic
government official or employee from corporate funds, (c) violated
or is in
violation of any provision of the U.S. Foreign Corrupt Practices
Act of 1977, as
amended or (d) made any unlawful bribe, rebate, payoff, influence
payment,
kickback or other unlawful payment to any foreign or domestic
government
official or employee.
(b) None of the Subsidiaries of the Company, nor any of their
respective directors, officers, agents, employees or other Persons
acting on
behalf of such subsidiaries has, in the course of their respective
actions (a)
used any corporate funds for any unlawful contribution, gift,
entertainment or
other unlawful expenses relating to political activity, (b) made
any direct or
indirect unlawful payment to any foreign or domestic government
official or
employee from corporate funds, (c) violated or is in violation of
any provision
of the U.S. Foreign Corrupt Practices Act of 1977, as amended or
(d) made any
unlawful bribe, rebate, payoff, influence payment, kickback or
other unlawful
payment to any foreign or domestic government official or
employee.
3.18 Transactions With Affiliates. Except as set forth in the
SEC
Documents, none of the officers, directors or employees of the
Company is
presently a party to any transaction with the Company or any of its
Subsidiaries
(other than for ordinary course services as employees, officers or
directors),
including any contract, agreement or other arrangement providing
for the
furnishing of services to or by, providing for rental of real or
personal
property to or from, or otherwise requiring payments to or from any
such
officer, director or employee or, to the knowledge of the Company,
any
corporation, partnership, trust or other entity in which any such
officer,
director, or employee has a substantial interest or is an officer,
director,
trustee or partner.
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3.19 Insurance. The Company and each of its Subsidiaries are
insured by
insurers of recognized financial responsibility against such losses
and risks
and in such amounts as management of the Company believes to be
prudent and
customary in the businesses in which the Company and each of its
Subsidiaries
are engaged. Neither the Company nor any of its Subsidiaries has
been refused
any insurance coverage sought or applied for and neither the
Company nor any of
its Subsidiaries has any reason to believe that it will not be able
to renew its
existing insurance coverage as and when such coverage expires or to
obtain
similar coverage from similar insurers as may be necessary to
continue its
business at a cost that would not have a Material Adverse
Effect.
3.20 Employee Relations. Neither the Company nor any of its
Subsidiaries
is a party to any collective bargaining agreement or employs any
member of a
union. No Executive Officer of the Company (as defined in Rule
501(f) of the
Securities Act) has notified the Company that such officer intends
to leave the
Company or otherwise terminate such officer's employment with the
Company. No
Executive Officer of the Company, to the knowledge of the Company,
is, or is
now, in violation of any material term of any employment
contract,
confidentiality, disclosure or proprietary information
agreement,
non-competition agreement, or any other contract or agreement or
any restrictive
covenant, and the continued employment of each such executive
officer does not
subject the Company or any of its Subsidiaries to any liability
with respect to
any of the foregoing matters. The Company and each of its
Subsidiaries are in
compliance with all federal, state, local and foreign laws and
regulations
respecting employment and employment practices, terms and
conditions of
employment and wages and hours, except where failure to be in
compliance would
not, either individually or in the aggregate, reasonably be
expected to result
in a Material Adverse Effect.
3.21 Title. The Company and each of its Subsidiaries have good
and
marketable title to all personal property owned by them which is
material to
their respective business, in each case free and clear of all
liens,
encumbrances and defects except such as are described in the SEC
Documents or
such as do not materially affect the value of such property and do
not interfere
with the use made and proposed to be made of such property by the
Company and
its Subsidiaries. Any real property and facilities held under lease
by the
Company and each of its Subsidiaries are held by them under valid,
subsisting
and enforceable leases with such exceptions as are not material and
do not
interfere with the use made and proposed to be made of such
property and
buildings by the Company and each of its Subsidiaries.
3.22 Intellectual Property Rights. Schedule 3.22 sets forth a list
of all
of the Company's patents, trademarks, trade names, service marks
copyrights, and
registrations and applications therefor, trade secrets and any
other
intellectual property right (collectively, "Intellectual Property
Rights"),
identifying whether owned by the Company, any of its Subsidiaries
or a third
party. The Intellectual Property Rights are, to the best of the
Company's
knowledge, fully valid and are in full force and effect. The
Company does not
have any knowledge of any infringement by the Company or any of its
Subsidiaries
of Intellectual Property Rights of others. There is no claim,
action or
proceeding being made or brought, or to the knowledge of the
Company, being
threatened, against the Company or any of its Subsidiaries
regarding its
Intellectual Property Rights that could have a Material Adverse
Effect. The
Company is unaware of any facts or circumstances which might give
rise to any of
the foregoing infringements or claims, actions or proceedings. The
Company and
its Subsidiaries have taken reasonable security measures to protect
the secrecy,
confidentiality and value of their Intellectual Property
Rights.
9
<PAGE>
3.23 Environmental Laws. The Company and each of its Subsidiaries
(a) are
in compliance with any and all Environmental Laws (as hereinafter
defined), (b)
have received all permits, licenses or other approvals required of
them under
applicable Environmental Laws to conduct their respective
businesses and (c) are
in compliance with all terms and conditions of any such permit,
license or
approval where, in each of the foregoing clauses (a), (b) and (c),
the failure
to so comply could be reasonably expected to have, individually or
in the
aggregate, a Material Adverse Effect. The term "Environmental Laws"
means all
federal, state, local or foreign laws relating to pollution or
protection of
human health or the environment (including, without limitation,
ambient air,
surface water, groundwater, land surface or subsurface strata),
including,
without limitation, laws relating to emissions, discharges,
releases or
threatened releases of chemicals, pollutants, contaminants, or
toxic or
hazardous substances or wastes (collectively, "Hazardous
Materials") into the
environment, or otherwise relating to the manufacture, processing,
distribution,
use, treatment, storage, disposal, transport or handling of
Hazardous Materials,
as well as all authorizations, codes, decrees, demands or demand
letters,
injunctions, judgments, licenses, notices or notice letters,
orders, permits,
plans or regulations issued, entered, promulgated or approved
thereunder.
3.24 Tax Matters. The Company and each of its Subsidiaries (a) have
made
or filed all federal and state income and all other tax returns,
reports and
declarations required by any jurisdiction to which it is subject,
(b) have paid
all taxes and other governmental assessments and charges that are
material in
amount, shown or determined to be due on such returns, reports and
declarations,
except those being contested in good faith and (c) have set aside
on its books
reasonably adequate provision for the payment of all taxes for
periods
subsequent to the periods to which such returns, reports or
declarations apply,
except where such failure would not have a Material Adverse Effect.
There are no
unpaid taxes in any material amount claimed to be due by the taxing
authority of
any jurisdiction, and the officers of the Company know of no basis
for any such
claim.
3.25 Sarbanes-Oxley Act. The Company is in compliance with any and
all
requirements of the Sarbanes-Oxley Act of 2002 that are effective
as of the date
hereof and applicable to it, and any and all rules and regulations
promulgated
by the SEC thereunder that are effective and applicable to it as of
the date
hereof, except where such noncompliance would not have a Material
Adverse
Effect.
3.26 Investment Company Status. The Company is not, and immediately
after
receipt of payment for the Note will not be, an "investment
company," an
"affiliated person" of, "promoter
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