This Note Purchase
Agreement (this “Agreement”) is dated as of
March 13, 2006, among TeleCommunication Systems, Inc., a
Maryland corporation (the “Company”), and each
purchaser identified on the signature pages hereto (each, a
“Purchaser” and collectively, the
“Purchasers”).
WHEREAS, subject
to the terms and conditions set forth in this Agreement and
pursuant to Section 4(2) of the Securities Act (as defined
below) and Rule 506 promulgated thereunder, the Company
desires to sell and issue to the Purchasers, and the Purchasers
wish to purchase from the Company (i) an initial aggregate of
$10,000,000 in principal amount of the Company’s Secured
Notes due 2009 in the form attached hereto as Exhibit A
(the “Notes”; such term to include any Additional Notes
(as defined below)) and (ii) warrants to purchase an aggregate
of 1,750,002 shares of Class A common stock, par value $0.01
per share, of the Company (the “Class A Common
Stock”) in the form attached hereto as Exhibit B
(the “Warrants”).
WHEREAS, at
Closing (as defined below), the Company and the Purchasers are
entering into a Registration Rights Agreement in the form attached
hereto as Exhibit C (the “Registration Rights
Agreement”), and into a Intellectual Property Security
Agreement in the form attached hereto as Exhibit D (the
“Intellectual Property Security Agreement”).
NOW, THEREFORE, in
consideration of the mutual covenants contained in this Agreement,
and for other good and valuable consideration the receipt and
adequacy of which are hereby acknowledged, the Company and the
Purchasers agree as follows:
Definitions . In addition to the terms defined elsewhere in
this Agreement, for all purposes of this Agreement, the following
terms shall have the meanings indicated in this Article:
“Additional
Notes” means notes substantially in the form of
Exhibit A that are issued after the Closing Date in
payment of interest as provided herein. The Additional Notes will
bear interest at the rate indicated therein.
“Affiliate”
means any Person that, directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common
control with a Person, as such terms are used in and construed
under Rule 144. With respect to a Purchaser, any investment
fund or managed account that is managed on a discretionary basis by
the same investment manager as such Purchaser will be deemed to be
an Affiliate of such Purchaser.
“Business
Day” means any day except Saturday, Sunday and any day which
shall be a federal legal holiday or a day on which banking
institutions in the State of New York are authorized or required by
law or other governmental action to close.
“Class A
Common Stock” shall have the meaning ascribed to such term in
the Recitals.
“Class B
Common Stock” means the Class B common stock, par value
$0.01 per share of the Company.
“Closing”
means the closing of the purchase and sale of the Notes and
Warrants pursuant to Section 2.3.
“Closing
Date” means the date of the Closing.
“Commission”
means the Securities and Exchange Commission.
“Common
Shares” means the shares of Class A Common Stock issued
upon exercise of the Warrants.
“Company
Counsel” means DLA Piper Rudnick Gray Cary US LLP.
“Disclosure
Materials” shall have the meaning ascribed to such term in
Section 3.1(h).
“Disclosure
Schedules” means the Disclosure Schedules of the Company
delivered concurrently herewith as referenced in Article III
hereof.
“Exchange
Act” means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
“Expense
Allowance” shall have the meaning ascribed to such term in
Section 6.1.
“GAAP”
shall have the meaning ascribed to such term in
Section 3.1(h).
“Intellectual
Property Rights” shall have the meaning ascribed to such term
in Section 3.1(q).
“Intellectual
Property Security Agreement” shall have the meaning ascribed
to such term in the Recitals.
“Lien”
means any lien, charge, encumbrance, security interest, right of
first refusal, preemptive right or other restriction of any kind;
other than (i) restrictions on transfer of securities arising
under federal or state securities laws or regulations,
(ii) purchase money liens, (iii) carriers’,
warehousemen’s, mechanics’, materialmen’s,
repairmen’s, landlord’s, tax, and other similar liens
imposed by law or agreement,
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(iv) liens
in respect of indebtedness that is subordinate to this Note, and
(v) liens securing debt under Section 4(a) of the
Notes.
“Material
Adverse Effect” shall have the meaning assigned to such term
in Section 3.1(b).
“Material
Permits” shall have the meaning ascribed to such term in
Section 3.1(o).
“Notes”
shall have the meaning ascribed to such term in the
Recitals.
“Person”
means an individual or corporation, partnership, trust,
incorporated or unincorporated association, joint venture, limited
liability company, joint stock company, government (or an agency or
subdivision thereof) or other entity of any kind.
“Proceeding”
means an action, claim, suit, investigation or proceeding
(including, without limitation, an investigation or partial
proceeding, such as a deposition).
“Purchase
Price” shall have the meaning ascribed to such term in
Section 2.2.
“Registration
Rights Agreement” shall have the meaning ascribed to such
term in the Recitals.
“Required
Approvals” shall have the meaning ascribed to such term in
Section 3.1(e).
“Required
Holders” means (i) the Note holders who, together with
their respective Affiliates, hold a majority of the Notes
outstanding at the time of determination, (ii) SRB Management,
L.P. as long as (A) it and its Affiliates, (B) WS Capital
Management, L.P. and its Affiliates and (C) WS Ventures
Management, L.P. and its Affiliates collectively hold at least
$2,000,000 in aggregate principal amount of the Notes outstanding
at the time of determination, and (iii) Bonanza Master Fund
Ltd. as long as it, together with its Affiliates, holds at least
$3,000,000 in aggregate principal amount of the Notes outstanding
at the time of determination.
“Rule 144”
means Rule 144 promulgated by the Commission pursuant to the
Securities Act, as such rule may be amended from time to time, or
any similar rule or regulation hereafter adopted by the Commission
having substantially the same effect as such rule.
“SEC
Reports” shall have the meaning ascribed to such term in
Section 3.1(h).
“Securities
Act” means the Securities Act of 1933, as amended.
“Short
Sales” shall include all “short sales” as defined
in Rule 200 of Regulation SHO under the Exchange
Act.
“Subsidiary”
means any subsidiary of the Company that is required to be listed
in Schedule 3.1(a) .
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“Trading
Day” means (i) a day on which the Class A Common
Stock is traded on a Trading Market, or (ii) if the
Class A Common Stock is not listed on a Trading Market, a day
on which the Class A Common Stock is traded in the
over-the-counter market is quoted in the over-the-counter market as
reported by Pink Sheets, LLC (or any similar organization or agency
succeeding to its functions of reporting prices); provided, that in
the event that the Class A Common Stock is not listed or
quoted as set forth in (i) or (ii) hereof, then Trading
Day shall mean a Business Day.
“Trading
Market” means whichever of the New York Stock Exchange, the
American Stock Exchange, the NASDAQ Global Market, the NASDAQ
Capital Market or OTC Bulletin Board on which the Class A
Common Stock is listed or quoted for trading on the date in
question.
“Transaction
Documents” means this Agreement, the Notes, the Warrants, the
Registration Rights Agreement, the Intellectual Property Security
Agreement and any other documents or agreements executed in
connection with the transactions contemplated hereunder.
“Warrants”
shall have the meaning ascribed to such term in the
Recitals.
PURCHASE AND SALE OF NOTES AND
WARRANTS
2.1 Issuance of
Notes and Warrants . Upon the following terms and conditions,
the Company shall issue and sell to each Purchaser, and each
Purchaser, severally and not jointly, shall purchase from the
Company, the principal amount of Notes and Warrants to purchase the
number of Common Shares indicated next to the Purchaser’s
name on Schedule I hereto.
(a)
Purchase Price . The purchase price for the Notes and
Warrants to be acquired by each Purchaser (the “Purchase
Price”) shall be the Purchase Price set forth opposite such
Purchaser’s name on Schedule I .
(b)
Purchase Price Allocation . For U.S. federal income tax
purposes, (i) the Company agrees that the portion of the
Purchase Price allocable to the Notes is $9,000,000 and that the
portion of the Purchase Price allocable to the Warrants is
$1,000,000 and (ii) each Purchaser of Notes and Warrants, by
accepting this Note, agrees to allocate its purchase price for the
Notes and Warrants in accordance with clause (i).
(a)
Timing . Subject to the fulfillment or waiver of the
conditions set forth in Article V hereof, the purchase and
sale of the Notes and Warrants shall take place at a closing (the
“Closing”), on or about the date hereof or such other
date as the Purchasers and the Company may agree upon (the
“Closing Date”).
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(b)
Location . The Closing shall take place at the offices of
the Company on the Closing Date or telephonically or at such other
location or time as the parties may agree.
(c)
Form of Payment and Closing . On the Closing Date, the
Company shall deliver to the Purchasers all of the Notes and
Warrants purchased hereunder, each registered in the name of each
such Purchaser. On the Closing Date, the Purchasers shall deliver
by wire transfer in payment of the aggregate Purchase Price
hereunder an aggregate of $10,000,000 to an account designated in
writing by the Company, with each Purchaser responsible for its
respective portion of the Purchase Price as set forth on
Schedule I . In addition, each party shall deliver all
documents, instruments and writings required to be delivered by
such party pursuant to this Agreement at or prior to the
Closing.
(a)
Deliveries by the Company . At the Closing, the Company
shall deliver or cause to be delivered to each Purchaser the
following:
(i) a
Note in the name of each Purchaser in the amount indicated opposite
such Purchaser’s name on Schedule I
hereto;
(ii) a
Warrant registered in the name of such Purchaser pursuant to which
such Purchaser shall have the right to purchase the number of
Common Shares indicated opposite such Purchaser’s name on
Schedule I hereto;
(iii) the
Registration Rights Agreement executed by the Company;
(iv) the
Intellectual Property Security Agreement executed by the Company;
and
(v) the
legal opinion of Company Counsel addressed to each Purchaser in the
form attached hereto as Exhibit E .
(b)
Deliveries by the Purchaser . At the Closing, each Purchaser
shall deliver or cause to be delivered to the Company the
following:
(i) The
Purchase Price amount indicated next to the Purchaser’s name
on Schedule I hereto, in United States dollars and in
immediately available funds, by wire transfer to an account
designated in writing by the Company for such purpose;
and
(ii) the
Registration Rights Agreement executed by such
Purchaser.
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(a) On
any Interest Payment Date (as defined in the Notes), at its option,
the Company, in lieu of paying any portion (allocated on a
pro rata basis to each holder) of the interest then
due on the Notes in cash, may elect to issue to each holder
Additional Notes in an aggregate principal amount equal to the
amount of interest due to such holder.
(b) If
the Company elects to issue Additional Notes as provided herein and
in the Notes, then the Company shall deliver to the holders to
which such Additional Notes are to be issued an opinion of counsel
satisfactory to such holders that: (1) each such Additional
Note (A) has been duly authorized, executed and delivered by
the Company, and (B) constitutes a legal, valid and binding
obligation of the Company, enforceable in accordance with its terms
subject, as to enforcement of remedies, to bankruptcy, insolvency,
reorganization, moratorium, or similar laws affecting rights of
creditors generally and to the effect of general principles of
equity; and (2) the issuance and delivery of such Additional
Notes complies with all requirements of law, including, without
limitation, all federal and state securities laws. The Company also
shall deliver to the holders to which such Additional Notes are to
be issued an officers’ certificate indicating that all of the
representations and warranties of the Company contained herein
shall be true and correct as of the date of the issuance of
Additional Notes as though made on and as of such date.
REPRESENTATIONS AND
WARRANTIES
3.1
Representations and Warranties of the Company . Except as
set forth under the corresponding section of the Disclosure
Schedules, which Disclosure Schedules shall be deemed a part
hereof, the Company hereby makes the following representations and
warranties to each Purchaser:
(a)
Subsidiaries . The Company has no direct or indirect
Subsidiaries other than those listed in the SEC Reports. Except as
disclosed in the SEC Reports and as set forth on Schedule
3.1(a) , the Company owns, directly or indirectly, all of the
capital stock of each Subsidiary 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 to
subscribe for or purchase securities.
(b)
Organization and Qualification . Each of the Company and
each Subsidiary is an entity duly incorporated or otherwise
organized, validly existing and in good standing under the laws of
the jurisdiction of its incorporation or organization (as
applicable), with the requisite power and authority to own and use
its properties and assets and to carry on its business
substantially as described in the SEC Reports. Neither the Company
nor any Subsidiary is in violation of any of the provisions of its
respective certificate or articles of incorporation, bylaws or
other organizational or charter documents. Each of the Company and
each Subsidiary is duly qualified to conduct business and is in
good standing as a foreign corporation or other entity in
each
6
jurisdiction in
which the nature of the business conducted or property owned by it
makes such qualification necessary, except where the failure to be
so qualified or in good standing, as the case may be, would not,
individually or in the aggregate, reasonably be expected to result
in (i) an adverse effect on the legality, validity or
enforceability of any Transaction Document, (ii) a material
and adverse effect on the results of operations, assets, business
or condition (financial or otherwise) of the Company and its
Subsidiaries, taken as a whole, or (iii) a material and
adverse impairment to the Company’s ability to perform on a
timely basis its obligations under any Transaction Document (any of
(i), (ii) or (iii), a “Material Adverse Effect”)
and no Proceeding has been instituted in any such jurisdiction
revoking, limiting or curtailing or seeking to revoke, limit or
curtail such power and authority or qualification.
(c)
Authorization; Enforcement . The Company has the requisite
corporate power and authority to enter into and to consummate the
transactions contemplated by each of the Transaction Documents, to
issue the Notes and the Warrants, and, if applicable, the Common
Shares, and otherwise to carry out its obligations thereunder. The
execution and delivery of each of the Transaction Documents by the
Company and the consummation by it of the transactions contemplated
thereby, including the issuance of the Notes and Warrants and, if
applicable, the Common Shares, have been duly authorized by all
necessary action on the part of the Company and no further action
is required by the Company in connection therewith, other than in
connection with the Required Approvals. Each Transaction Document
has been (or upon delivery will have been) duly executed by the
Company and, when delivered in accordance with the terms thereof,
will constitute the valid and binding obligation of the Company
enforceable against the Company in accordance with its terms except
(i) as limited by general equitable principles and applicable
bankruptcy, insolvency, reorganization, moratorium and other laws
of general application affecting enforcement of creditors’
rights generally, (ii) as limited by laws relating to the
availability of specific performance, injunctive relief or other
equitable remedies, and (iii) insofar as indemnification and
contribution provisions may be limited by applicable
law.
(d)
No Conflicts . The execution, delivery and performance of
the Transaction Documents by the Company, the issuance of the
Notes, the Warrants, and, if applicable, the Common Shares, and the
consummation by the Company of the other transactions contemplated
thereby do not and will not (i) conflict with or violate any
provision of the Company’s or any Subsidiary’s
certificate or articles of incorporation, bylaws or other
organizational or charter documents, or (ii) conflict with, or
constitute a default (or an event that with notice or lapse of time
or both would become a default) under, result in the creation of
any Lien upon any of the properties or assets of the Company or any
Subsidiary, or give to others any rights of termination, amendment,
acceleration or cancellation (with or without notice, lapse of time
or both) of, any agreement, credit facility, debt or other
instrument (evidencing a Company or Subsidiary debt or otherwise)
or other understanding to which the Company or any Subsidiary is a
party or by which any property or asset of the Company or any
Subsidiary is bound or affected, or (iii) subject to the
Required Approvals, conflict with or result in a violation of any
law, rule, regulation, order, judgment, injunction, decree or other
restriction of any court or governmental authority to which the
Company or a Subsidiary is subject
7
(including
federal and state securities laws and regulations), or by which any
property or asset of the Company or a Subsidiary is bound or
affected; except in the case of each of clauses (ii) and
(iii), such as would not reasonably be expected to result in a
Material Adverse Effect.
(e)
Filings, Consents and Approvals . The Company is not
required to obtain any consent, waiver, authorization or order of,
give any notice to, or make any filing or registration with, any
court or other federal, state, local or other governmental
authority or other Person in connection with the execution,
delivery and performance by the Company of the Transaction
Documents, other than (i) the filing with the Commission of
one or more Registration Statements in accordance with the
requirements of the Registration Rights Agreement, (ii) the
filings required in accordance with Section 4.5,
(iii) those that have been made or obtained prior to the date
of this Agreement, (iv) application(s) to each applicable Trading
Market for the listing of the Common Shares for trading thereon in
the time and manner required thereby, and (v) the filing of a
Notice of Sale of Securities on Form D with the Commission as
required under Regulation D of the Securities Act and such
filings as are required to be made under applicable state
securities laws (collectively the “ Required Approvals
”).
(f)
Issuance of Common Shares . Upon issuance, with respect to
the Common Shares, in accordance with the terms of the Warrants,
including the receipt by the Company of payment of the exercise
price pursuant to the terms of the Warrants, the Common Shares will
be validly issued, fully paid and nonassessable and free from all
United States taxes and Liens created by the Company with respect
to the issue thereof. The issuance of the Common Shares upon
exercise of the Warrants is not subject to any preemptive or
similar rights to subscribe for or purchase securities. The Company
has reserved from its duly authorized capital stock all of the
issuable Common Shares.
(g)
Capitalization . The number of shares and type of all
authorized, issued and outstanding capital stock of the Company,
and all shares of Class A Common Stock and Class B Common
Stock, reserved for issuance under the Company’s various
option and incentive plans, was as set forth in the SEC Reports as
of the respective dates set forth in such SEC Reports. No
securities of the Company are entitled to preemptive or similar
rights, and no Person has any right of first refusal, preemptive
right, right of participation, or any similar right to participate
in the transactions contemplated by the Transaction Documents.
Except as a result of the sale and issuance of the Notes, the
Warrants and the Common Shares, other than as described in the SEC
Reports and Schedule 3.1(g) there are no outstanding
options, warrants, scrip, rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities,
rights or obligations convertible into or exchangeable for, or
giving any Person any right to subscribe for or acquire, any shares
of Class A Common Stock or Class B Common Stock, or
contracts, commitments, understandings or arrangements by which the
Company or any Subsidiary is or may become bound to issue
additional shares of Class A Common Stock or Class B
Common Stock, or securities or rights convertible or exchangeable
into shares of Class A Common Stock or Class B Common
Stock. The issue and sale of the Notes, the Warrants and the Common
Shares will not, immediately or with the passage of time, obligate
the Company to issue shares of Class A Common
8
Stock,
Class B Common Stock or other securities to any Person (other
than the Purchasers) and will not result in a right of any holder
of Company securities to adjust the exercise, conversion, exchange
or reset price under such securities, other than those Warrants to
Purchase Common Stock, each dated January 13, 2004, issued by
the Company to each of 033 Growth Partners I, L.P., 033 Growth
Partners II, L.P., 033 Growth International Fund LTD., Oyster Pond
Partners, L.P. and The Riverview Group LLC. All of the outstanding
shares of capital stock of the Company are validly issued, fully
paid and nonassessable, have been issued in compliance with all
federal and state securities laws, and none of such outstanding
shares was issued in violation of any preemptive rights or similar
rights to subscribe for or purchase securities. No further approval
or authorization of any stockholder, the Board of Directors of the
Company or other Person is required for the issuance and sale of
the Notes, the Warrants and the Common Shares. Except as disclosed
in the Disclosure Materials, there are no stockholders agreements,
voting agreements or other similar agreements with respect to the
Company’s capital stock to which the Company is a party or,
to the knowledge of the Company, between or among any of the
Company’s stockholders, except as would not reasonably be
expected to result in a Material Adverse Effect.
(h)
SEC Reports; Financial Statements . The Company has filed
all reports and proxy statements required to be filed by it under
the Securities Act and the Exchange Act, including pursuant to
Section 13(a) or 15(d) thereof, since January 1, 2005 (the
foregoing materials filed with the Commission prior to the date
hereof being collectively referred to herein as the “SEC
Reports” and, together with the Disclosure Schedules, the
“Disclosure Materials”) on a timely basis or has timely
filed a valid extension of such time of filing and has filed any
such SEC Reports prior to the expiration of any such extension. As
of their respective dates, the SEC Reports complied in all material
respects with the requirements of the Securities Act and the
Exchange Act, and none of the SEC Reports, when filed, 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 light of the circumstances under
which they were made, not misleading. The financial statements of
the Company included in the SEC Reports comply in all material
respects with applicable accounting requirements and the rules and
regulations of the Commission with respect thereto as in effect at
the time of filing and such financial statements have been prepared
in accordance with United States generally accepted accounting
principles (“GAAP”) applied on a consistent basis
during the periods involved (except as may be otherwise specified
in such financial statements or the notes thereto, or in the case
of unaudited financial statements, to the extent they may exclude
footnotes or may be condensed or summary footnotes or statements),
and fairly present in all material respects the financial position
of the Company and its consolidated Subsidiaries as of and for the
dates thereof and the results of operations and cash flows for the
periods then ended, subject, in the case of unaudited statements,
to normal, year-end audit adjustments. The Company maintains a
standard system of accounting established and administered in
accordance with GAAP and the applicable requirements of the
Exchange Act.
(i)
Accountant. The firm of Ernst & Young LLP, has expressed
its opinion with respect to the annual consolidated financial
statements for the Company’s
9
fiscal year
ended December 31, 2004 to be included or incorporated by
reference in the Registration Statement (as defined in the
Registration Rights Agreement) and the prospectus which forms a
part thereof (the “Prospectus”), and is an independent
accountant as required by the Securities Act .
(j)
Taxes . Each of the Company and its Subsidiaries has filed
all necessary federal, state and foreign income and franchise tax
returns and has paid or accrued all taxes shown as due thereon
except for taxes being contested in good faith by the Company for
which adequate reserves have been established, and neither the
Company nor any of its Subsidiaries has knowledge of a tax
deficiency which has been asserted in writing against it which
would reasonably be expected to have a Material Adverse
Effect.
(k)
Material Changes . Except as set forth in press releases
issued by the Company, since the date of the latest audited
financial statements included within the SEC Reports, except as
specifically disclosed in the SEC Reports or in the Disclosure
Materials, (i) there has been no event, occurrence or
development known to the Company that, individually or in the
aggregate, has had or that could reasonably be expected to result
in a Material Adverse Effect, (ii) the Company has not
incurred any liabilities (contingent or otherwise) other than
(A) trade payables, accrued expenses and other liabilities
incurred in the ordinary course of business consistent with past
practice, (B) liabilities not required to be reflected in the
Company’s financial statements pursuant to GAAP or required
to be disclosed in filings made with the Commission, and
(C) other liabilities that would not, individually or in the
aggregate, have a Material Adverse Effect, (iii) the Company has
not altered its critical accounting policies, (iv) the Company
has not declared or made any dividend or distribution of cash or
other property to its stockholders or purchased, redeemed or made
any agreements to purchase or redeem any shares of its capital
stock, and (v) the Company has not issued any equity
securities to any officer, director or Affiliate of the Company,
except pursuant to existing Company stock incentive or purchase
plans. The Company does not have pending before the Commission any
request for confidential treatment of information or
documents.
(l)
Litigation . There is no Proceeding or investigation pending
or, to the knowledge of the Company, threatened against or
affecting the Company, any Subsidiary or any of their respective
properties before or by any court, arbitrator, governmental or
administrative agency or regulatory authority (federal, state,
county, local or foreign) which (i) adversely affects or
challenges the legality, validity or enforceability of any of the
Transaction Documents or the Common Shares, or (ii) except as
set forth in the SEC Reports, would, if there were an unfavorable
decision, individually or in the aggregate, reasonably be expected
to result in a Material Adverse Effect. Except as set forth in the
SEC Reports, neither the Company nor any Subsidiary, nor any
director or officer thereof, is or has been the subject of any
Proceeding involving a claim of violation of or liability under
federal or state securities laws or a claim of breach of fiduciary
duty. There is not pending, and to the knowledge of the Company,
there is not contemplated, any investigation by the Commission of
the Company or any current or former director or officer of the
Company.
10
(m)
Labor Relations . No material labor dispute exists or, to
the knowledge of the Company, is imminent with respect to any of
the employees of the Company which could reasonably be expected to
result in a Material Adverse Effect.
(n)
Compliance. Neither the Company nor any Subsidiary
(i) is in default under or in violation of (and no event has
occurred that has not been waived that, with notice or lapse of
time or both, would result in a default by the Company or any
Subsidiary under), nor has the Company or any Subsidiary received
notice of a claim that it is in default under or that it is in
violation of, any indenture, loan or credit agreement or any other
agreement or instrument to which it is a party or by which it or
any of its properties is bound (whether or not such default or
violation has been waived), (ii) is in violation of any order
of any court, arbitrator or governmental body, or (iii) is or has
been in violation of any statute, rule or regulation of any
governmental authority, including without limitation all foreign,
federal, state and local laws applicable to its business, except as
to each of the foregoing clauses (i), (ii) and (iii) as
would not have a Material Adverse Effect.
(o)
Regulatory Permits . The Company and the Subsidiaries
possess all certificates, authorizations and permits issued by the
appropriate federal, state, local or foreign regulatory authorities
necessary to conduct their respective businesses as described in
the SEC Reports, except where the failure to possess such permits
would not, individually or in the aggregate, reasonably be expected
to result in a Material Adverse Effect (“Material
Permits”), and neither the Company nor any Subsidiary has
received any notice of proceedings relating to the revocation or
modification of any Material Permit.
(p)
Title to Assets . The Company and the Subsidiaries have good
and marketable title in fee simple to all real property owned by
them that is material to their respective businesses and good and
marketable title in all personal property owned by them that is
material to their respective businesses, in each case free and
clear of all Liens, except for Liens that do not materially affect
the value of such property and do not materially interfere with the
use made and proposed to be made of such property by the Company
and the Subsidiaries. Any real property and facilities held under
lease by the Company and the Subsidiaries are held by them under
valid, subsisting and enforceable leases of which the Company and
the Subsidiaries are in compliance, except for such compliance as
would not, individually or in the aggregate, reasonably be expected
to result in a Material Adverse Effect.
(q)
Patents and Trademarks . The Company and the Subsidiaries
have, or have rights to use, all patents, patent applications,
trademarks, trademark applications, service marks, trade names,
copyrights, licenses and other similar rights that are necessary or
material for use in connection with their respective businesses as
described in the SEC Reports and which the failure to so have
would, individually or in the aggregate, reasonably be expected to
result in a Material Adverse Effect (collectively, the
“Intellectual Property Rights”). Neither the Company
nor any Subsidiary has received a written notice that the
Intellectual Property Rights used by the Company or any Subsidiary
violates or infringes upon the rights of any Person other than
matters
11
previously
resolved or as would not, individually or in the aggregate, have a
Material Adverse Effect. Except as set forth in the SEC Reports,
all such Intellectual Property Rights are enforceable and, to the
Company’s knowledge, do not violate or infringe the
Intellectual Property Rights of others in any respect that would
reasonably be expected to result in a Material Adverse Effect and,
to the knowledge of the Company, there is no material existing
infr
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