Exhibit 99.2
================================================================================
NOTE AGREEMENT
dated as of
------------, ----
between
NCSN, INC.
The SUBSIDIARY GUARANTORS Party Hereto
and
The NOTEHOLDERS Party Hereto
$4,250,000
================================================================================
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS .......................................................... 4
SECTION 1.01. Defined Terms............................................ 4
SECTION 1.02. Terms Generally.......................................... 10
SECTION 1.03. Accounting Terms; GAAP................................... 10
ARTICLE II THE NOTES ........................................................... 10
SECTION 2.01. Repayment of Notes....................................... 10
SECTION 2.02. Interest................................................. 11
SECTION 2.03. Payments Generally; Pro Rata Treatment................... 11
ARTICLE III GUARANTEE .......................................................... 12
SECTION 3.01. The Guarantee............................................ 12
SECTION 3.02. Obligations Unconditional................................ 12
SECTION 3.03. Reinstatement............................................ 13
SECTION 3.04. Subrogation.............................................. 13
SECTION 3.05. Remedies................................................. 13
SECTION 3.06. Instrument for the Payment of Money...................... 13
SECTION 3.07. Continuing Guarantee..................................... 14
SECTION 3.08. Rights of Contribution................................... 14
SECTION 3.09. General Limitation on Guarantee Obligations.............. 14
ARTICLE IV REPRESENTATIONS AND WARRANTIES...................................... 15
SECTION 4.01. Organization; Powers.................................... 15
SECTION 4.02. Authorization; Enforceability........................... 15
SECTION 4.03. Governmental Approvals; No Conflicts.................... 15
SECTION 4.04. Financial Condition; No Material Adverse Change......... 16
SECTION 4.05. Properties.............................................. 16
SECTION 4.06. Litigation.............................................. 16
SECTION 4.07. Compliance with Laws and Agreements..................... 17
SECTION 4.08. Taxes................................................... 17
SECTION 4.09. Disclosure.............................................. 17
SECTION 4.10. Material Agreements and Liens........................... 17
SECTION 4.11. Capitalization.......................................... 18
SECTION 4.12. Subsidiaries............................................ 18
- i -
Page
ARTICLE V AFFIRMATIVE COVENANTS ................................................ 19
SECTION 5.01. Financial Statements and Other Information............... 19
SECTION 5.02. Notices of Material Events............................... 20
SECTION 5.03. Existence; Conduct of Business........................... 20
SECTION 5.04. Payment of Obligations................................... 20
SECTION 5.05. Maintenance of Properties................................ 20
SECTION 5.06. Books and Records; Inspection Rights..................... 21
SECTION 5.07. Compliance with Laws..................................... 21
SECTION 5.08. Subsidiary Guarantors.................................... 21
ARTICLE VI NEGATIVE COVENANTS .................................................. 21
SECTION 6.01. Indebtedness............................................. 21
SECTION 6.02. Liens.................................................... 22
SECTION 6.03. Mergers, Consolidations, Disposal of Assets, Etc......... 22
SECTION 6.04. Restricted Payments...................................... 23
SECTION 6.05. Transactions with Affiliates............................. 23
SECTION 6.06. Restrictive Agreements................................... 23
SECTION 6.07. Subordinated Indebtedness................................ 24
SECTION 6.08. Modifications of Certain Documents....................... 24
ARTICLE VII EVENTS OF DEFAULT .................................................. 24
ARTICLE VIII CONDITIONS ........................................................ 26
SECTION 8.01. Certain Documents........................................ 26
SECTION 8.02. Additional Conditions.................................... 27
ARTICLE IX MISCELLANEOUS ....................................................... 27
SECTION 9.01. Notices.................................................. 27
SECTION 9.02. Waivers; Amendments...................................... 28
SECTION 9.03. Expenses; Damage Waiver.................................. 28
SECTION 9.04. Successors and Assigns................................... 29
SECTION 9.05. Survival................................................. 29
SECTION 9.06. Counterparts; Integration................................ 29
SECTION 9.07. Severability............................................. 30
SECTION 9.08. Right of Setoff.......................................... 30
SECTION 9.09. Governing Law; Jurisdiction; Etc......................... 30
SECTION 9.10. WAIVER OF JURY TRIAL..................................... 31
SECTION 9.11. Headings................................................. 31
- ii -
SCHEDULE I - Existing Indebtedness
SCHEDULE II - Material Agreements
SCHEDULE III - Restrictive Agreements
SCHEDULE IV - Subsidiaries
SCHEDULE V - Notes and Warrant Agreements
EXHIBIT A - Form of Guarantee Assumption Agreement
EXHIBIT B - Form of Note
EXHIBIT C - Form of Warrant
- iii -
NOTE AGREEMENT dated as of __________, ____, between NCSN, INC., the
SUBSIDIARY GUARANTORS party hereto and the NOTEHOLDERS party hereto.
In partial payment of the purchase price for the acquisition (the
"Acquisition"), from Student Advantage (as hereinafter defined) of certain
assets (the "Assets") more particularly described in the Purchase and Sale
Agreement (as so defined), which Assets will be acquired by OCSN Subsidiary, or
by the Company (as so defined) and immediately contributed to OCSN Subsidiary,
the Company has agreed to issue to Student Advantage (i) senior secured and
guaranteed promissory notes in an aggregate principal amount of $4,250,000, as
more particularly defined herein, and (ii) warrants for shares of common stock
of the Company, as evidenced by the Warrant Agreements (as so defined).
ARTICLE I DEFINITIONS
SECTION 1.01. Defined Terms.
As used in this Agreement, the following terms have the meanings
specified below:
"Acquisition" has the meaning set forth in the recital above.
"Affiliate" means, with respect to a specified Person, another
Person that directly, or indirectly through one or more intermediaries, Controls
or is Controlled by or is under common Control with the Person specified.
"Basic Documents" means, collectively, the Note Documents and the
Warrant Agreements.
"Business Day" means any day that is not a Saturday, Sunday or other
day on which commercial banks in New York City are authorized or required by law
to remain closed.
"Capital Lease Obligations" of any Person means the obligations of
such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP,
and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.
"Change in Control" means (a) the acquisition of ownership, directly
or indirectly, beneficially or of record, by any Person or group (within the
meaning of the Securities Exchange Act of 1934 and the rules of the Securities
and Exchange Commission thereunder as in effect on the date hereof), of shares
representing more than 50% of the aggregate ordinary voting power
represented by the issued and outstanding capital stock of the Company; or (b)
the acquisition of direct or indirect Control of the Company by any Person or
group.
"Company" means NCSN Inc., a Delaware corporation.
"Control" means the possession, directly or indirectly, of the power
to direct or cause the direction of the management or policies of a Person,
whether through the ability to exercise voting power, by contract or otherwise.
"Controlling" and "Controlled" have meanings correlative thereto.
"Default" means any event or condition which constitutes an Event of
Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
"Dollars" or "$" refers to lawful money of the United States of
America.
"Equity Rights" means, with respect to any Person, any
subscriptions, options, warrants, commitments, preemptive rights or agreements
of any kind (including any shareholders' or voting trust agreements) for the
issuance, sale, registration or voting of, or securities convertible into, any
additional shares of capital stock of any class, or partnership or other
ownership interests of any type in, such Person.
"Event of Default" has the meaning assigned to such term in Article
VII.
"Financial Officer" means the chief financial officer, principal
accounting officer, treasurer or controller of the Company.
"GAAP" means generally accepted accounting principles in the United
States of America.
"Governmental Authority" means the government of the United States
of America, any other nation or any political subdivision thereof, whether state
or local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.
"Guarantee" of or by any Person (the "guarantor") means any
obligation, contingent or otherwise, of the guarantor guaranteeing or having the
economic effect of guaranteeing any Indebtedness or other obligation of any
other Person (the "primary obligor") in any manner, whether directly or
indirectly, and including any obligation of the guarantor, direct or indirect,
(a) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness or other obligation or to purchase (or to advance or
supply funds for the purchase of) any security for the payment thereof, (b) to
purchase or lease property, securities or services for the purpose of assuring
the owner of such Indebtedness or other obligation of the payment thereof, (c)
to maintain working capital, equity capital or any other financial statement
condition or liquidity of the primary obligor so as to enable the primary
obligor to pay such
Indebtedness or other obligation or (d) as an account party in respect of any
letter of credit or letter of guaranty issued to support such Indebtedness or
obligation; provided, that the term Guarantee shall not include endorsements for
collection or deposit in the ordinary course of business.
"Guarantee Assumption Agreement" means a Guarantee Assumption
Agreement substantially in the form of Exhibit A by an entity that pursuant to
Section 5.08 is required to become a "Subsidiary Guarantor" hereunder in favor
of the Noteholders.
"Indebtedness" of any Person means, without duplication, (a) all
obligations of such Person for borrowed money, (b) all obligations of such
Person evidenced by bonds, debentures, notes or similar instruments, (c) all
obligations of such Person (other than current trade accounts payable incurred
in the ordinary course of business) upon which interest charges, as such, are
customarily paid, (d) all obligations of such Person under conditional sale or
other title retention agreements relating to property acquired by such Person,
(e) all obligations of such Person in respect of the deferred purchase price of
property or services (excluding current accounts payable incurred in the
ordinary course of business), (f) all Indebtedness of others secured by (or for
which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien on property owned or acquired by such
Person, whether or not the Indebtedness secured thereby has been assumed, (g)
all Guarantees by such Person of Indebtedness of others, (h) all Capital Lease
Obligations of such Person, (i) all obligations, contingent or otherwise, of
such Person as an account party in respect of letters of credit and letters of
guaranty and (j) all obligations, contingent or otherwise, of such Person in
respect of bankers' acceptances. The Indebtedness of any Person shall include
the Indebtedness of any other entity (including any partnership in which such
Person is a general partner) to the extent such Person is liable therefor as a
result of such Person's ownership interest in or other relationship with such
entity, except to the extent the terms of such Indebtedness provide that such
Person is not liable therefor.
"Initial Date" means November 18, 2003.
"Initial Public Offering" means any offering of the common stock of
the Company that is registered under the Securities Act.
"Lien" means, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, hypothecation, encumbrance, charge or security interest in,
on or of such asset, (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention agreement (or any
financing lease having substantially the same economic effect as any of the
foregoing) relating to such asset and (c) in the case of securities, any
purchase option, call or similar right of a third party with respect to such
securities.
"Material Adverse Effect" means a material adverse effect on (a) the
business, assets, operations or condition, financial or otherwise, of the
Company and its Subsidiaries taken as a whole, (b) the ability of any Obligor to
perform any of its obligations under any of the Basic Documents or (c) the
rights of or benefits available to the Noteholders under any of the Basic
Documents.
"Material Indebtedness" means Indebtedness (other than the Notes) of
any one or more of the Company and its Subsidiaries in an aggregate principal
amount exceeding $1,000,000.
"Maturity Date" means the second anniversary of the original
issuance of the Notes.
"Note Documents" means this Agreement, the Notes and the Security
Agreement.
"Noteholders" means the initial purchasers of the Note and any other
Person that shall have become a party hereto pursuant to a transfer from a
Noteholder, other than any such Person that ceases to be a party hereto pursuant
to a transfer.
"Notes" means the notes issued to the Noteholders by the Company
pursuant to this Agreement in the form attached hereto as Exhibit B.
"OCSN Subsidiary" a wholly-owned subsidiary of the Company organized
for the purpose of acquiring the Assets.
"Obligor" means the Company and each Subsidiary Guarantor.
"Permitted Encumbrances" means:
(a) Liens imposed by law for taxes that are not yet due or are being
contested in compliance with Section 5.04;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's and other like Liens imposed by law, arising in the ordinary
course of business and securing obligations that are not overdue by more
than 30 days or are being contested in compliance with Section 5.04;
(c) pledges and deposits made in the ordinary course of business in
compliance with workers' compensation, unemployment insurance and other
social security laws or regulations;
(d) cash deposits to secure the performance of bids, trade
contracts, leases, statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature, in each case in
the ordinary course of business;
(e) judgment liens in respect of judgments that do not constitute an
Event of Default under clause (k) of Article VII;
(f) easements, zoning restrictions, rights-of-way and similar
encumbrances on real property imposed by law or arising in the ordinary
course of business that do not secure any monetary obligations and do not
materially detract from the value of the
affected property or interfere with the ordinary conduct of business of
the Company or any Subsidiary; and
(g) Liens in favor of a financial institution encumbering deposits
(including the right of set-off) held by such financial institution in the
ordinary course of its commercial business and the ordinary course of
business of the Company and its Subsidiaries and which are within the
general parameters customary in the banking industry, not incurred or made
in connection with the borrowing of money or obtaining credit or advances;
provided that the term "Permitted Encumbrances" shall not include any Lien
securing Indebtedness.
"Person" means any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.
"Purchase and Sale Agreement" means the Purchase and Sale Agreement
between Student Advantage and the Company dated as of November 17, 2003.
"Purchase Money Indebtedness" means Indebtedness of the Company or
any Subsidiary, in an aggregate principal amount outstanding not exceeding
$7,000,000 at any one time, arising out of
(a) Capital Lease Obligations,
(b) purchase money obligations for property acquired in the ordinary
course of business incurred within 90 days of the acquisition, and/or
(c) other financial transactions relating to capital expenditures
incurred within 90 days of the capital transaction.
"Prime Rate" means the rate of interest per annum publicly announced
from time to time by Citibank, N.A. as its prime rate in effect at its principal
office in New York City; each change in the Prime Rate shall be effective from
and including the date such change is publicly announced as being effective.
"Related Parties" means, with respect to any specified Person, such
Person's Affiliates and the respective directors, officers, employees, agents
and advisors of such Person and such Person's Affiliates.
"Required Noteholders" means, at any time, Noteholders having
outstanding Notes representing more than 50% of the sum of the total outstanding
principal balance of the Notes at such time.
"Reservoir Entity" means Reservoir Capital Partners, L.P., a
Delaware limited partnership, Reservoir Capital Master Fund, L.P., a Cayman
Islands exempted limited
partnership, or any other Affiliate of Reservoir Capital Group, L.L.C., a
Delaware limited liability company.
"Restricted Payment" means any dividend or other distribution
(whether in cash, securities or other property) with respect to any shares of
any class of capital stock of the Company or any of its Subsidiaries, or any
payment (whether in cash, securities or other property), including any sinking
fund or similar deposit, on account of the purchase, redemption, retirement,
acquisition, cancellation or termination of any such shares of capital stock of
the Company or any option, warrant (other than the Warrant Agreements) or other
right to acquire any such shares of capital stock of the Company.
"Security Agreement" means the Security Agreement dated as of the
date hereof between the Company, the OCSN Subsidiary and the Noteholders.
"Student Advantage" means Student Advantage, Inc., a Delaware
corporation.
"Subordinated Indebtedness" means, collectively, Indebtedness (i)
for which the Company is directly and primarily liable, (ii) in respect of which
none of its Subsidiaries is contingently or otherwise obligated and (iii) that
is subordinated to the obligations of the Company to pay principal of and
interest on the Notes hereunder on terms, and pursuant to documentation
containing other terms (including interest, amortization, covenants and events
of default), in form and substance satisfactory to the Required Noteholders.
"Subsidiary" means, with respect to any Person (the "parent") at any
date, any corporation, limited liability company, partnership, association or
other entity the accounts of which would be consolidated with those of the
parent in the parent's consolidated financial statements if such financial
statements were prepared in accordance with GAAP as of such date, as well as any
other corporation, limited liability company, partnership, association or other
entity (a) of which securities or other ownership interests representing more
than 50% of the equity or more than 50% of the ordinary voting power or, in the
case of a partnership, more than 50% of the general partnership interests are,
as of such date, owned, controlled or held, or (b) that is, as of such date,
otherwise Controlled, by the parent or one or more subsidiaries of the parent or
by the parent and one or more subsidiaries of the parent. Unless otherwise
specified, "Subsidiary" means a Subsidiary of the Company.
"Subsidiary Guarantor" means each of the Subsidiaries of the Company
identified under the caption "SUBSIDIARY GUARANTORS" on the signature pages
hereto and each Subsidiary of the Company that becomes a "Subsidiary Guarantor"
after the date hereof pursuant to Section 5.08.
"Taxes" means any and all present or future taxes, levies, imposts,
duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"Transactions" means the execution, delivery and performance by each
Obligor of this Agreement and the other Basic Documents to which such Obligor is
intended to be a party,
and the issuance of the Notes and the transactions contemplated by the Purchase
and Sale Agreement.
"Warrant Agreements" means each of the warrant agreements executed
and delivered by the Company in the form of Exhibit C hereto.
SECTION 1.02. Terms Generally.
The definitions of terms herein shall apply equally to the singular
and plural forms of the terms defined. Whenever the context may require, any
pronoun shall include the corresponding masculine, feminine and neuter forms.
The words "include", "includes" and "including" shall be deemed to be followed
by the phrase "without limitation". The word "will" shall be construed to have
the same meaning and effect as the word "shall". Unless the context requires
otherwise (a) any definition of or reference to any agreement, instrument or
other document herein shall be construed as referring to such agreement,
instrument or other document as from time to time amended, supplemented or
otherwise modified (subject to any restrictions on such amendments, supplements
or modifications set forth herein), (b) any reference herein to any Person shall
be construed to include such Person's successors and assigns, (c) the words
"herein", "hereof" and "hereunder", and words of similar import, shall be
construed to refer to this Agreement in its entirety and not to any particular
provision hereof, (d) all references herein to Articles, Sections, Exhibits and
Schedules shall be construed to refer to Articles and Sections of, and Exhibits
and Schedules to, this Agreement and (e) the words "asset" and "property" shall
be construed to have the same meaning and effect and to refer to any and all
tangible and intangible assets and properties, including cash, securities,
accounts and contract rights.
SECTION 1.03. Accounting Terms; GAAP.
Except as otherwise expressly provided herein, all terms of an
accounting or financial nature shall be construed in accordance with GAAP, as in
effect from time to time.
ARTICLE II THE NOTES
SECTION 2.01. Repayment of Notes.
(a) Maturity. The Company hereby unconditionally promises to pay the
outstanding principal amount of the Notes on the Maturity Date.
(b) Optional Prepayments. The Borrower shall have the right at any
time and from time to time to prepay the outstanding principal balance of the
Notes, in whole, but not in part, subject to the requirements of this Section.
(c) Mandatory Prepayments. Without limiting the obligation of the
Borrower to obtain the consent of the Required Noteholders pursuant to Section
6.03 to any transaction not otherwise permitted thereunder, on occurrence of a
Change in Control or an Initial Public Offering, the Company shall prepay the
Notes in full.
(d) Notices, Etc. The Borrower shall notify the Noteholders by
telephone (confirmed by telecopy) of any prepayment hereunder not later than
11:00 a.m., New York City time, one Business Day before the date of prepayment.
Each such notice shall specify the
prepayment date. Prepayments shall be accompanied by accrued interest to the
extent required by Section 2.02 and shall be made in the manner specified in
Section 2.03(a).
SECTION 2.02 Interest.
(a) Notes. Each Note shall bear interest at a rate per annum equal
to the Prime Rate plus 3%, but in no event less than 7%.
(b) Default Interest. Notwithstanding the foregoing, if any
principal of or interest on any Note or any fee or other amount payable by the
Company hereunder is not paid when due, whether at stated maturity, upon
acceleration or otherwise, such overdue amount shall bear interest, after as
well as before judgment, until paid at a rate per annum equal to 2% plus the
rate applicable to Notes as provided in paragraph (a) of this Section.
(c) Payment of Interest. Accrued interest on each Note shall be
payable in arrears on the Maturity Date and at any time of any payment of
principal with respect to the amount of principal paid; provided that interest
accrued pursuant to paragraph (b) of this Section shall be payable on demand.
Interest shall compound on the first anniversary of the date of original
issuance of the Notes, and shall thereafter be treated as principal for purposes
of this Agreement but not for purposes of the Warrant Agreements.
(d) Computation. All interest hereunder shall be computed on the
basis of a year of 365 days (or 366 days in a leap year) and shall be payable
for the actual number of days elapsed (including the first day but excluding the
last day).
SECTION 2.03. Payments Generally; Pro Rata Treatment.
(a) Payments by the Obligors. Each Obligor shall make each payment
required to be made by it hereunder (whether of principal, interest or
otherwise) prior to 2:00 p.m., New York City time, on the date when due, in
immediately available funds, without set-off or counterclaim. Any amounts
received after such time on any date may, in the discretion of the Noteholder,
be deemed to have been received on the next succeeding Business Day for purposes
of calculating interest thereon. All such payments shall be made directly to the
Persons entitled thereto. If any payment hereunder shall be due on a day that is
not a Business Day, the date for payment shall be extended to the next
succeeding Business Day and, in the case of any payment accruing interest,
interest thereon shall be payable for the period of such extension. All payments
hereunder shall be made in Dollars.
(b) Application of Insufficient Payments. If at any time
insufficient funds are received by and available to a Noteholder to pay fully
all amounts of principal and interest then due hereunder, such funds shall be
applied (i) first, to pay interest then due hereunder and (ii) second, to pay
principal then due hereunder.
(c) Pro Rata Treatment. Except to the extent otherwise provided
herein: (i) each payment or prepayment of principal of Notes by the Company
shall be made for account of the Noteholders pro rata in accordance with the
respective unpaid principal amounts of the Notes held by them; and (ii) each
payment of interest on Notes by the Company shall be made for
account of the Noteholders pro rata in accordance with the amounts of interest
on such Notes then due and payable to the respective Noteholders.
ARTICLE III GUARANTEE
SECTION 3.01. The Guarantee.
The Subsidiary Guarantors hereby jointly and severally guarantee to
each Noteholder and their respective successors and assigns the prompt payment
in full when due (whether at stated maturity, by acceleration or otherwise) of
the principal of and interest on the Notes and all other amounts from time to
time owing to the Noteholders by the Company under this Agreement and by any
Obligor under any of the other Note Documents, in each case strictly in
accordance with the terms thereof (such obligations being herein collectively
called the "Guaranteed Obligations"). The Subsidiary Guarantors hereby further
jointly and severally agree that if the Company shall fail to pay in full when
due (whether at stated maturity, by acceleration or otherwise) any of the
Guaranteed Obligations, the Subsidiary Guarantors will promptly pay the same,
without any demand or notice whatsoever, and that in the case of any extension
of time of payment or renewal of any of the Guaranteed Obligations, the same
will be promptly paid in full when due (whether at extended maturity, by
acceleration or otherwise) in accordance with the terms of such extension or
renewal.
SECTION 3.02. Obligations Unconditional.
The obligations of the Subsidiary Guarantors under Section 3.01 are
absolute and unconditional, joint and several, irrespective of the value,
genuineness, validity, regularity or enforceability of the obligations of the
Company under this Agreement or any other agreement or instrument referred to
herein, or any substitution, release or exchange of any other guarantee of or
security for any of the Guaranteed Obligations, and, to the fullest extent
permitted by applicable law, irrespective of any other circumstance whatsoever
that might otherwise constitute a legal or equitable discharge or defense of a
surety or guarantor, it being the intent of this Section that the obligations of
the Subsidiary Guarantors hereunder shall be absolute and unconditional, joint
and several, under any and all circumstances. Without limiting the generality of
the foregoing, it is agreed that the occurrence of any one or more of the
following shall not alter or impair the liability of the Subsidiary Guarantors
hereunder, which shall remain absolute and unconditional as described above:
(i) at any time or from time to time, without notice to the
Subsidiary Guarantors, the time for any performance of or compliance with
any of the Guaranteed Obligations shall be extended, or such performance
or compliance shall be waived;
(ii) any of the acts mentioned in any of the provisions of this
Agreement or any other agreement or instrument referred to herein shall be
done or omitted;
(iii) the maturity of any of the Guaranteed Obligations shall be
accelerated, or any of the Guaranteed Obligations shall be modified,
supplemented or amended in any respect, or any right under this Agreement
or any other agreement or instrument referred to herein shall be waived or
any other guarantee of any of the Guaranteed Obligations or
any security therefor shall be released or exchanged in whole or in part
or otherwise dealt with; or
(iv) any lien or security interest granted to, or in favor of any
Noteholder or Noteholders as security for any of the Guaranteed
Obligations shall fail to be perfected.
The Subsidiary Guarantors hereby expressly waive diligence, presentment, demand
of payment, protest and all notices whatsoever, and any requirement that any
Noteholder exhaust any right, power or remedy or proceed against the Company
under this Agreement or any other agreement or instrument referred to herein, or
against any other Person under any other guarantee of, or security for, any of
the Guaranteed Obligations.
SECTION 3.03. Reinstatement.
The obligations of the Subsidiary Guarantors under this Article
shall be automatically reinstated if and to the extent that for any reason any
payment by or on behalf of the Company in respect of the Guaranteed Obligations
is rescinded or must be otherwise restored by any holder of any of the
Guaranteed Obligations, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise, and the Subsidiary Guarantors jointly and severally
agree that they will indemnify each Noteholder on demand for all reasonable
costs and expenses (including fees of counsel) incurred by such Noteholder in
connection with such rescission or restoration, including any such costs and
expenses incurred in defending against any claim alleging that such payment
constituted a preference, fraudulent transfer or similar payment under any
bankruptcy, insolvency or similar law.
SECTION 3.04. Subrogation.
The Subsidiary Guarantors hereby jointly and severally agree that
until the payment and satisfaction in full of all Guaranteed Obligations they
shall not exercise any right or remedy arising by reason of any performance by
them of their guarantee in Section 3.01, whether by subrogation or otherwise,
against the Company or any other guarantor of any of the Guaranteed Obligations
or any security for any of the Guaranteed Obligations.
SECTION 3.05. Remedies.
The Subsidiary Guarantors jointly and severally agree that, as
between the Subsidiary Guarantors and the Noteholders, the obligations of the
Company under this Agreement may be declared to be forthwith due and payable as
provided in Article VII (and shall be deemed to have become automatically due
and payable in the circumstances provided in Article VII) for purposes of
Section 3.01 notwithstanding any stay, injunction or other prohibition
preventing such declaration (or such obligations from becoming automatically due
and payable) as against the Company and that, in the event of such declaration
(or such obligations being deemed to have become automatically due and payable),
such obligations (whether or not due and payable by the Company) shall forthwith
become due and payable by the Subsidiary Guarantors for purposes of Section
3.01.
SECTION 3.06. Instrument for the Payment of Money.
Each Subsidiary Guarantor hereby acknowledges that the guarantee in
this Article constitutes an instrument for the payment of money, and consents
and agrees that any
Noteholder, at its sole option, in the event of a dispute by such Subsidiary
Guarantor in the payment of any moneys due hereunder, shall have the right to
bring motion-action under New York CPLR Section 3213.
SECTION 3.07. Continuing Guarantee.
The guarantee in this Article is a continuing guarantee, and shall
apply to all Guaranteed Obligations whenever arising.
SECTION 3.08. Rights of Contribution
The Subsidiary Guarantors hereby agree, as between themselves, that
if any Subsidiary Guarantor shall become an Excess Funding Guarantor (as defined
below) by reason of the payment by such Subsidiary Guarantor of any Guaranteed
Obligations, each other Subsidiary Guarantor shall, on demand of such Excess
Funding Guarantor (but subject to the next sentence), pay to such Excess Funding
Guarantor an amount equal to such Subsidiary Guarantor's Pro Rata Share (as
defined below and determined, for this purpose, without reference to the
properties, debts and liabilities of such Excess Funding Guarantor) of the
Excess Payment (as defined below) in respect of such Guaranteed Obligations. The
payment obligation of a Subsidiary Guarantor to any Excess Funding Guarantor
under this Section shall be subordinate and subject in right of payment to the
prior payment in full of the obligations of such Subsidiary Guarantor under the
other provisions of this Article and such Excess Funding Guarantor shall not
exercise any right or remedy with respect to such excess until payment and
satisfaction in full of all of such obligations.
For purposes of this Section, (i) "Excess Funding Guarantor" means,
in respect of any Guaranteed Obligations, a Subsidiary Guarantor that has paid
an amount in excess of its Pro Rata Share of such Guaranteed Obligations, (ii)
"Excess Payment" means, in respect of any Guaranteed Obligations, the amount
paid by an Excess Funding Guarantor in excess of its Pro Rata Share of such
Guaranteed Obligations and (iii) "Pro Rata Share" means, for any Subsidiary
Guarantor, the ratio (expressed as a percentage) of (x) the amount by which the
aggregate present fair saleable value of all properties of such Subsidiary
Guarantor (excluding any shares of stock of any other Subsidiary Guarantor)
exceeds the amount of all the debts and liabilities of such Subsidiary Guarantor
(including contingent, subordinated, unmatured and unliquidated liabilities, but
excluding the obligations of such Subsidiary Guarantor hereunder and any
obligations of any other Subsidiary Guarantor that have been Guaranteed by such
Subsidiary Guarantor) to (y) the amount by which the aggregate fair saleable
value of all properties of all of the Subsidiary Guarantors exceeds the amount
of all the debts and liabilities (including contingent, subordinated, unmatured
and unliquidated liabilities, but excluding the obligations of the Company and
the Subsidiary Guarantors hereunder) of all of the Subsidiary Guarantors,
determined (A) with respect to any Subsidiary Guarantor that is a party hereto
on the date hereof, as of the date hereof, and (B) with respect to any other
Subsidiary Guarantor, as of the date such Subsidiary Guarantor becomes a
Subsidiary Guarantor hereunder.
SECTION 3.09. General Limitation on Guarantee Obligations.
In any action or proceeding involving any state corporate law, or
any state or Federal bankruptcy, insolvency, reorganization or other law
affecting the rights of creditors generally, if the obligations of any
Subsidiary Guarantor under Section 3.01 would otherwise, taking into account the
provisions of Section 3.08, be held or determined to be void, invalid or
unenforceable, or subordinated to the claims of any other creditors, on account
of the amount of its liability under Section 3.01, then, notwithstanding any
other provision hereof to the contrary, the amount of such liability shall,
without any further action by such Subsidiary Guarantor, any Noteholder, or any
other Person, be automatically limited and reduced to the highest amount that is
valid and enforceable and not subordinated to the claims of other creditors as
determined in such action or proceeding.
ARTICLE IV REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to the Noteholders on and as of
the date hereof that:
SECTION 4.01. Organization; Powers.
Each of the Company and its Subsidiaries is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization, has all requisite power and authority to carry on its business as
now conducted and, except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect, is qualified to do business in, and is in good standing in, every
jurisdiction where such qualification is required.
SECTION 4.02. Authorization; Enforceability.
The Transactions are within each Obligor's corporate powers and have
been duly authorized by all necessary corporate and, if required, by all
necessary shareholder action. This Agreement has been duly executed and
delivered by each Obligor and constitutes, and each of the other Basic Documents
to which it is a party when executed and delivered by such Obligor will
constitute, a legal, valid and binding obligation of such Obligor, enforceable
against each Obligor in accordance with its terms, except as such enforceability
may be limited by (a) bankruptcy, insolvency, reorganization, moratorium or
similar laws of general applicability affecting the enforcement of creditors'
rights and (b) the application of general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
SECTION 4.03. Governmental Approvals; No Conflicts.
The Transactions (a) do not require any consent or approval of,
registration or filing with, or any other action by, any Governmental Authority,
except such as have been obtained or made and are in full force and effect, (b)
will not violate any applicable law or regulation or the charter, by-laws or
other organizational documents of the Company or any of its Subsidiaries or any
order of any Governmental Authority, (c) will not violate or result in a default
under any indenture, agreement or other instrument binding upon the Company or
any of its Subsidiaries or assets, or give rise to a right thereunder to require
any payment to be made by any such Person, and (d) will not result in the
creation or imposition of any Lien on any asset of the Company or any of its
Subsidiaries other than the Lien of the Security Agreement, except with respect
to the Acquisition in each such case set forth above for violations and defaults
that would not reasonably be expected to have, individually or in the aggregate,
a Material Adverse Effect.
SECTION 4.04. Financial Condition; No Material Adverse Change.
(a) Financial Condition. The Company has heretofore furnished to the
Noteholders its consolidated balance sheet and statements of income,
stockholders' equity and cash flows (i) as of and for the fiscal year ended
December 31, 2002, reported on by Ernst & Young, independent public accountants,
and (ii) as of and for the portion of the fiscal year ended August, 2003,
certified by the chief financial officer of the Company. Such financial
statements present fairly, in all material respects, the financial position and
results of operations and cash flows of the Company and its Subsidiaries as of
such dates and for such periods in accordance with GAAP, subject to year-end
audit adjustments and the absence of footnotes in the case of the statements
referred to in clause (ii) of the first sentence of this paragraph.
(b) No Material Adverse Change. Since December 31, 2002, there has
been no material adverse change in the business, assets, operations or
condition, financial or otherwise, of the Company and its Subsidiaries, taken as
a whole.
SECTION 4.05. Properties.
(a) Property Generally. Each of the Company and its Subsidiaries has
good title to, or valid leasehold interests in, all its real and personal
property material to its business, subject only to Liens permitted by Section
6.02 and except for minor defects in title that do not interfere with its
ability to conduct its business as currently conducted or to utilize such
properties for their intended purposes.
(b) Intellectual Property. Each of the Company and its Subsidiaries
owns, or is licensed to use, all trademarks, tradenames, copyrights, patents and
other intellectual property material to its business, and the use thereof by the
Company and its Subsidiaries does not infringe upon the rights of any other
Person, except for any such infringements that, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.
SECTION 4.06. Litigation.
There are no actions, suits or proceedings by or before any
arbitrator or Governmental Authority now pending against or, to the knowledge of
the Company, threatened against the Company or any of its Subsidiaries (i) as to
which there is a reasonable likelihood of an adverse determination and that, if
adversely determined, would reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Effect or (ii) that involve this
Agreement or the Transactions.
SECTION 4.07. Compliance with Laws and Agreements.
Each of the Company and its Subsidiaries is in compliance with all
laws, regulations and orders of any Governmental Authority applicable to it or
its property and all indentures, agreements and other instruments binding upon
it or its property, except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect. No Default has occurred and is continuing.
SECTION 4.08. Taxes.
Each of the Company and its Subsidiaries has timely filed or caused
to be filed all Tax returns and reports required to have been filed and has paid
or caused to be paid all Taxes required to have been paid by it, except (a)
Taxes that are being contested in good faith by appropriate proceedings and for
which such Person has set aside on its books adequate reserves or (b) to the
extent that the failure to do so could not reasonably be expected to result in a
Material Adverse Effect.
SECTION 4.09. Disclosure.
The Company has disclosed to the Noteholders all agreements,
instruments and corporate or other restrictions to which it or any of its
Subsidiaries is subject, and all other matters known to it, that, individually
or in the aggregate, could reasonably be expected to result in a Material
Adverse Effect. None of the reports, financial statements, certificates or other
information furnished by or on behalf of the Obligors to the Noteholder in
connection with the execution and delivery of this Agreement (as modified or
supplemented by other information so furnished) contains any material
misstatement of fact or omits to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. Notwithstanding anything to the contrary contained in any
Basic Document, the Company makes no representations or warranties to of any
kind or nature to any Person relating to the Assets, except that the Company
represents and warrants to each of the Noteholders that it is not aware that any
representation or warranty made by it herein or by Student Advantage in the
Purchase and Sale Agreement and relating to the Assets is incomplete or
incorrect in any material respect.
SECTION 4.10. Material Agreements and Liens.
(a) Material Agreements. Schedule I is a complete and correct list
of each credit agreement, note agreement, indenture, purchase agreement,
guarantee, letter of credit or other arrangement providing for or otherwise
relating to any Indebtedness or any extension of credit (or commitment for any
extension of credit) to, or guarantee by, the Company or any of its Subsidiaries
outstanding on the Initial Date, or that (after giving effect to the
transactions contemplated to occur on or before the issuance of the Notes) is
outstanding on the date of issuance of the Notes, the aggregate principal or
face amount of which equals or exceeds (or may equal or exceed) $100,000, and
the aggregate principal or face amount outstanding or that may become
outstanding under each such arrangement is correctly described in Schedule I.
(b) Liens. There was no Lien securing Indebtedness of the Company or
any Subsidiary outstanding on the Initial Date, or that (after giving effect to
the transactions
contemplated to occur on or before the date of issuance of the Notes) is
outstanding on the date hereof other than Purchase Money Indebtedness.
(c) Acquisition and Equity Agreements. Schedule II is a complete and
correct list of all agreements (other than Purchase and Sale Agreement) entered
into in connection with the Acquisition and all shareholder and similar
agreements to which the Company is a party.
SECTION 4.11. Capitalization.
The authorized capital stock of the Company consisted, on the
Initial Date, of an aggregate of 48,000,000 shares consisting of (i) 30,000,000
shares of common stock, $.01 par value per share, of which 3,781,009 shares were
duly and validly issued and outstanding, each of which shares will be fully paid
and nonassessable and (ii) 18,000,000 shares of Preferred Stock, $0.01 par value
per share. Five million of such shares of Preferred Stock are designated as
Series A Convertible Preferred Stock, of which 4,522,500 shares have been duly
and validly issued and outstanding; and 13,000,000 of such are designated as
Series B Convertible Preferred Stock, of which 11,255,385 shares are duly and
validly issued and outstanding, each of which shares are fully paid and
nonassessable. As of such date, except for grants made pursuant to 2003 NCSN
Employee Stock Option Plan and the Restricted Stock Agreements with certain
employees (as listed in Schedule II), there are no outstanding Equity Rights
with respect to the Company and there are no outstanding obligations of the
Company or any of its Subsidiaries to repurchase, redeem, or otherwise acquire
any shares of capital stock of the Company nor are there any outstanding
obligations of the Company or any of its Subsidiaries to make payments to any
Person, such as "phantom stock" payments, where the amount thereof is calculated
with reference to the fair market value or equity value of the Company or any of
its Subsidiaries. As of such date, the Company had no agreement, arrangement or
understanding that would affect the foregoing representations and warranties.
SECTION 4.12. Subsidiaries.
Set forth in Schedule IV is a complete and correct list of all of
the Subsidiaries of the Company as of the date hereof (after giving effect to
the transactions contemplated to occur on or before the date hereof), together
with, for each such Subsidiary, (i) the jurisdiction of organization of such
Subsidiary, (ii) each Person holding ownership interests in such Subsidiary and
(iii) the nature of the ownership interests held by each such Person and the
percentage of ownership of such Subsidiary represented by such ownership
interests. Except as disclosed in Schedule IV, (x) each of the Company and its
Subsidiaries owns, free and clear of Liens (other than Permitted Encumbrances
referred to in paragraph (a) of the definition thereof), and has the
unencumbered right to vote, all outstanding ownership interests in each Person
shown to be held by it in Schedule IV, (y) all of the issued and outstanding
capital stock of each such Person organized as a corporation is validly issued,
fully paid and nonassessable and (z) there are no outstanding Equity Rights with
respect to such Subsidiary. Each Subsidiary of the Company is a Subsidiary
Guarantor.
ARTICLE V AFFIRMATIVE COVENANTS
Until the principal of and interest on each Note shall have been
paid in full, the Company covenants and agrees with the Noteholders that:
SECTION 5.01. Financial Statements and Other Information.
The Company will furnish to each Noteholder (and if a Reservoir
Entity is a Noteholder, to Xxxx Xxxxxxx):
(a) within 90 days after the end of each fiscal year of the Company,
the audited consolidated balance sheet and related statements of
operations, stockholders' equity and cash flows of the Company and its
Subsidiaries as of the end of and for such year, setting forth in each
case in comparative form the figures for the previous fiscal year, all
reported on by Ernst & Young or other independent public accountants of
recognized national standing (without a "going concern" or like
qualification or exception and without any qualification or exception as
to the scope of such audit) to the effect that such consolidated financial
statements present fairly in all material respects the financial condition
and results of operations of the Company and its Subsidiaries on a
consolidated basis in accordance with GAAP consistently applied;
(b) within 60 days after the end of each of the first three fiscal
quarters of each fiscal year of the Company, the consolidated balance
sheet and related statements of operations, stockholders' equity and cash
flows of the Company and its Subsidiaries as of the end of and for such
fiscal quarter and the then elapsed portion of the fiscal year, setting
forth in each case in comparative form the figures for (or, in the case of
the balance sheet, as of the end of) the corresponding period or periods
of the previous fiscal year, all certified by a Financial Officer of the
Company as presenting fairly in all material respects the financial
condition and results of operations of the Company and its Subsidiaries on
a consolidated basis in accordance with GAAP consistently applied, subject
to normal year-end audit adjustments and the absence of footnotes;
(c) concurrently with any delivery of financial statements under
clause (a) or (b) of this Section, a certificate of a Financial Officer of
the Company (i) certifying as to whether to the knowledge of the Company
any Default has occurred and, if such a Default has occurred, specifying
the details thereof and any action taken or proposed to be taken with
respect thereto and (ii) if any change in GAAP or in the application
thereof has occurred since the date of the audited financial statements
referred to in Section 4.04 specifying the effect of such change on the
financial statements accompanying such certificate; and
(d) promptly following any request therefor, such other information
regarding the operations, business affairs and financial condition of the
Company or any of its Subsidiaries, or compliance with the terms of this
Agreement, as any Noteholder may reasonably request.
SECTION 5.02. Notices of Material Events.
The Company will furnish to each Noteholder (and if a
Reservoir Entity is a Noteholder, to Xxxx Xxxxxxx) written notice of the
following:
(a) the occurrence of any Default, promptly (and in any event within
five days) after the Company shall have become aware thereof;
(b) the filing or commencement of any action, suit or proceeding by
or before any arbitrator or Governmental Authority against the Company or
any of its Subsidiaries that, if adversely determined, could reasonably be
expected to result in a Material Adverse Effect; and
(c) the occurrence of a Change of Control or an Initial Public
Offering, not later than ten Business Days prior thereto, together with a
reasonably detailed description thereof;
(d) any other development that results in, or would reasonably be
expected to result in, a Material Adverse Effect, promptly (and in any
event within five days) after the Company shall have become aware thereof.
Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of the Company setting forth the
details of the event or development requiring such notice and any action taken
or proposed to be taken with respect thereto.
SECTION 5.03. Existence; Conduct of Business.
The Company will, and will cause each of its Subsidiaries to, do or
cause to be done all things necessary to preserve, renew and keep in full force
and effect its legal existence and all of its rights, licenses, permits,
privileges and franchises except to the extent that failure to so preserve,
renew and keep in full force and effect any such rights, licenses, permits,
privileges and franchises, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect; provided that the
foregoing shall not prohibit any merger, consolidation, liquidation or
dissolution permitted under Section 6.03.
SECTION 5.04. Payment of Obligations.
The Company will, and will cause each of its Subsidiaries to, pay
when due its obligations, including Tax liabilities, that, if not so paid, would
reasonably be expected to result in a Material Adverse Effect, except where (a)
the validity or amount thereof is being contested in good faith by appropriate
proceedings, (b) the Company or such Subsidiary has set aside on its books
adequate reserves with respect thereto in accordance with GAAP and (c) the
failure to make payment pending such contest would not reasonably be expected to
result in a Material Adverse Effect.
SECTION 5.05. Maintenance of Properties.
The Company will, and will cause each of its Subsidiaries to, keep
and maintain all property material to the conduct of its business in good
working order and condition, ordinary
wear and tear excepted and except for property that is obsolete or, in the
reasonable judgment of the Company, no longer useful for the conduct of its
business.
SECTION 5.06. Books and Records; Inspection Rights.
The Company will, and will cause each of its Subsidiaries to, keep
proper books of record and account. The Company will, and will cause each of its
Subsidiaries to, permit any representative designated by the Noteholders (at the
sole cost and expense of the Noteholders except as provided in Section 9.03(a)),
upon reasonable prior notice, to visit and inspect its properties, to examine
and make extracts from its books and records, and to discuss its affairs,
finances and condition with its officers and independent accountants, all at
such reasonable times and as often as reasonably requested, but no more than
twice per year unless a Default shall have occurred and be continuing.
SECTION 5.07. Compliance with Laws.
The Company will, and will cause each of its Subsidiaries to, comply
with all laws, rules, regulations and orders of any Governmental Authority
applicable to it or its property, except where the failure to do so,
individually or in the aggregate, would not reasonably be expected to result in
a Material Adverse Effect.
SECTION 5.08. Subsidiary Guarantors.
The Company will take such action, and will cause each of its
Subsidiaries to take such action, from time to time as shall be necessary to
ensure that all Subsidiaries of the Company are "Subsidiary Guarantors"
hereunder. Without limiting the generality of the foregoing, in the event that
the Company or any of its Subsidiaries shall form or acquire any new Subsidiary
that shall constitute a Subsidiary hereunder, the Company and its Subsidiaries
will cause such new Subsidiary to (i) become a "Subsidiary Guarantor" hereunder
pursuant to a Guarantee Assumption Agreement, and (ii) deliver such proof of
corporate action, incumbency of officers, opinions of counsel (which may be
in-house counsel of the Company or any such Subsidiary) and other documents as
any Noteholder shall have reasonably requested.
ARTICLE VI NEGATIVE COVENANTS
Until the principal of and interest on each Note have been paid in
full, the Company covenants and agrees with the Noteholders that:
SECTION 6.01. Indebtedness.
The Company will not, nor will it permit any of its Subsidiaries to,
create, incur, assume or permit to exist any Indebtedness, except:
(a) Indebtedness created hereunder and under the Notes;
(b) Indebtedness existing on the Initial Date and set forth in
Schedule I (or, to the extent not meeting the minimum thresholds for
required listing on Schedule I pursuant to Section 4.10, in an aggregate
amount not exceeding $100,000), but not any extensions, renewals or
replacements of any such Indebtedness;
(c) Subordinated Indebtedness;
(d) Indebtedness of the Company to any Subsidiary and Indebtedness
of any Subsidiary (in the case of the OCSN Subsidiary, Subordinated
Indebtedness) to the Company or any other Subsidiary;
(e) Guarantees by the Company of Indebtedness (other than
Subordinated Indebtedness) of any Subsidiary and by any Subsidiary of
Indebtedness (other than Subordinated Indebtedness) of the Company or any
other Subsidiary;
(f) Indebtedness of the Company or any Subsidiary as an account
party in respect of trade letters of credit; and
(g) Purchase Money Indebtedness.
SECTION 6.02. Liens.
The Company will not, nor will it permit any of its Subsidiaries to,
create, incur, assume or permit to exist any Lien on any property or asset now
owned or hereafter acquired by it, or assign or sell any income or revenues
(including accounts receivable) or rights in respect of any thereof, except:
(a) (i) Permitted Encumbrances and (ii) Liens securing Purchase
Money Indebtedness (provided no that such Lien extends to or covers any
property other than the property acquired with such Purchase Money
Indebtedness (and improvements thereon and accessions thereto), and up to
$3,500,000 in cash and cash equivalents of the Company); and
(b) except in the case of the OCSN Subsidiary, any Lien existing on
any property or asset prior to the acquisition thereof by the Company or
any Subsidiary or existing on any property or asset of any Person that
becomes a Subsidiary after the date hereof prior to the time such Person
becomes a Subsidiary; provided that (i) such Lien is not created in
contemplation of or in connection with such acquisition or such Person
becoming a Subsidiary, as the case may be, (ii) such Lien shall not apply
to any other property or assets of the Company or any Subsidiary and (iii)
such Lien shall secure only those obligations which it secures on the date
of such acquisition or the date such Person becomes a Subsidiary, as the
case may be.
SECTION 6.03. Mergers, Consolidations, Disposal of Assets, Etc.
The Company will not, nor will it permit any Subsidiary to, merge
into or consolidate with any other Person, or permit any other Person to merge
into or consolidate with it, or sell, transfer, lease or otherwise dispose of
(in one transaction or in a series of transactions) all or substantially all (or
in the case of the OCSN Subsidiary, any substantial part) of its assets, or all
or substantially all of the stock of any Subsidiary (in each case, whether now
owned or hereafter acquired), or liquidate or dissolve, except that, if at the
time thereof and immediately after giving effect thereto no Default shall have
occurred and be continuing (i) any Person may merge into the Company in a
transaction in which the Company is the surviving corporation, and
(ii) any Person may merge into OCSN Subsidiary in a transaction in which the
surviving entity is the OCSN Subsidiary.
SECTION 6.04. Restricted Payments.
The Company will not, nor will it permit any of its Subsidiaries to,
declare or make, or agree to pay or make, directly or indirectly, any Restricted
Payment, except that (A) the Company may declare and pay dividends with respect
to its capital stock payable solely in additional shares of its common stock,
and (B) the Company may make Restricted Payments pursuant to and in accordance
with stock option plans or other benefit plans for management or employees of
the Company and its Subsidiaries. Nothing herein shall be deemed to prohibit the
payment of dividends by any Subsidiary of the Company to the Company or to any
other Subsidiary of the Company.
SECTION 6.05. Transactions with Affiliates.
The Company will not, nor will it permit any of its Subsidiaries to,
sell, lease or otherwise transfer any property or assets to, or purchase, lease
or otherwise acquire any property or assets from, or otherwise engage in any
other transactions with, any of its Affiliates, except (a) transactions in the
ordinary course of business at prices and on terms and conditions not less
favorable to the Company or such Subsidiary than could be obtained on an
arm's-length basis from unrelated third parties, (b) any Restricted Payment
permitted by Section 6.04, and (c) transactions (in the case of the OCSN
Subsidiary, only if such transactions are immaterial and in the ordinary course
of business) between the Company or a Subsidiary on the one hand and the Company
or a Subsidiary on the other hand.
SECTION 6.06. Restrictive Agreements.
The Company will not, and will not permit any of its Subsidiaries
to, directly or indirectly, enter into, incur or permit to exist any other
agreement or other arrangement that prohibits, restricts or imposes any
condition upon (a) the ability of the Company or any Subsidiary to create, incur
or permit to exist any Lien upon any of its property or assets, or (b) the
ability of any Subsidiary to pay dividends or other distributions with respect
to any shares of its capital stock or to make or repay loans or advances to the
Company or any other Subsidiary or to Guarantee Indebtedness of the Company or
any other Subsidiary; provided that:
(i) the foregoing shall not apply to (x) restrictions and conditions
imposed by law or by this Agreement, (y) restrictions and conditions
existing on the Initial Date identified on Schedule III (but shall apply
to any extension or renewal of, or any amendment or modification expanding
the scope of any such restriction or condition) and (z) customary
restrictions and conditions contained in agreements relating to the sale
of a Subsidiary pending such sale, provided such restrictions and
conditions apply only to the Subsidiary that is to be sold and such sale
is permitted hereunder; and
(ii) clause (a) of the foregoing shall not apply to (x) restrictions
or conditions imposed by any agreement relating to secured Indebtedness
permitted by this Agreement if such restrictions or conditions apply only
to the property or assets securing such Indebtedness and (y) customary
provisions in leases, licenses and other contracts restricting the
assignment thereof (provided, that the Company will make reasonable
efforts (other than incurring out-of-pocket costs and expenses) to obtain
any necessary exceptions for Liens under the Security Agreement).
SECTION 6.07. Subordinated Indebtedness.
With respect to any Subordinated Indebtedness, except to the extent
otherwise permitted by the terms thereof, the Company will not, nor will it
permit any of its Subsidiaries to, purchase, redeem, retire or otherwise acquire
for value, or set apart any money for a sinking, defeasance or other analogous
fund for the purchase, redemption, retirement or other acquisition of, or make
any payment or prepayment of the principal of or interest on, or any other
amount owing in respect of, such Subordinated Indebtedness.
SECTION 6.08. Modifications of Certain Documents.
The Company will not consent to any modification, supplement or
waiver of any of the provisions of any agreement, instrument or other document
evidencing or relating to Subordinated Indebtedness without the prior consent of
the Required Noteholders.
ARTICLE VII EVENTS OF DEFAULT
If any of the following events ("Events of Default") shall occur:
(a) the Company shall fail to pay any principal of or interest on
any Note when and as the same shall become due and payable, whether at the
due date thereof or at a date fixed for prepayment thereof or otherwise;
(b) the Company shall fail to pay any other amount under the Note
Documents when due and three Business Days shall have elapsed from the
date of demand therefor;
(c) any representation or warranty made or deemed made by or on
behalf of the Company or any of its Subsidiaries in this Agreement or the
Security Agreement or any amendment or modification hereof or thereof, or
in any report, certificate, financial statement or other document
furnished pursuant to or in connection with this Agreement or the Security
Agreement or any amendment or modification hereof or thereof, shall prove
to have been incorrect in any material respect when made or deemed made;
(d) the Company shall fail to observe or perform any covenant,
condition or agreement contained in Section 5.02, 5.03 (with respect to
the Company's existence) or 5.08 or in Article VI;
(e) any Obligor shall fail to observe or perform any covenant,
condition or agreement contained in this Agreement or the Security
Agreement (other than those specified in clauses (a), (b), (c) or (d) of
this Article) and such failure shall continue unremedied for a period of
30 or more days after notice thereof from any Noteholder to the Company;
(f) the Company or any of its Subsidiaries shall fail to make any
payment (whether of principal or interest and regardless of amount) in
respect of any Material Indebtedness, when and as the same shall become
due and payable;
(g) any event or condition occurs that results in any Material
Indebtedness becoming due prior to its scheduled maturity or that has
caused the holder or holders of any Material Indebtedness or any trustee
or agent on its or their behalf to require the prepayment, repurchase,
redemption or defeasance thereof, prior to its scheduled maturity;
provided that this clause (g) shall not apply to secured Indebtedness that
becomes due as a result of the voluntary sale or transfer of the property
or assets securing such Indebtedness;
(h) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed seeking (i) liquidation, reorganization or other
relief in respect of the Company or any of its Subsidiaries or its debts,
or of a substantial part of its assets, under any Federal, state or
foreign bankruptcy, insolvency, receivership or similar law now or
hereafter in effect or (ii) the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official for the Company
or any of its Subsidiaries or for a substantial part of its assets, and,
in any such case, such proceeding or petition shall continue undismissed
for a period of 60 or more days or an order or decree approving or
ordering any of the foregoing shall be entered;
(i) the Company or any of its Subsidiaries shall (i) voluntarily
commence any proceeding or file any petition seeking liquidation,
reorganization or other relief under any Federal, state or foreign
bankruptcy, insolvency, receivership or similar law now or hereafter in
effect, (ii) consent to the institution of, or fail to contest in a timely
and appropriate manner, any proceeding or petition described in clause (h)
of this Article, (iii) apply for or consent to the appointment of a
receiver, trustee, custodian, sequestrator, conservator or similar
official for the Company or any of its Subsidiaries or for a substantial
part of its assets, (iv) file an answer admitting the material allegations
of a petition filed against it in any such proceeding, (v) make a general
assignment for the benefit of creditors or (vi) take any action for the
purpose of effecting any of the foregoing;
(j) the Company or any of its Subsidiaries shall become unable,
admit in writing its inability, or fail generally, to pay its debts as
they become due; or
(k) one or more judgments for the payment of money in an aggregate
amount in excess of $1,000,000 shall be rendered against the Company or
any of its Subsidiaries or any combination thereof and the same shall
remain undischarged for a period of 30 consecutive days during which
execution shall not be effectively stayed, or any action shall be legally
taken by a judgment creditor to attach or levy upon any assets of the
Company or any of its Subsidiaries to enforce any such judgment;
then, and in every such event (other than an event with respect to the Company
described in clause (h) or (i) of this Article), and at any time thereafter
during the continuance of such event, any Noteholder may, by notice to the
Company, declare the Notes then outstanding to be due and payable in whole (or
in part, in which case any principal not so declared to be due and payable may
thereafter be declared to be due and payable), and thereupon the principal of
the Notes so declared to be due and payable, together with accrued interest
thereon and all other obligations of
the Obligors accrued hereunder, shall become due and payable immediately,
without presentment, demand, protest or other notice of any kind, all of which
are hereby waived by each Obligor; and in case of any event with respect to the
Company described in clause (h) or (i) of this Article, the principal of the
Notes then outstanding, together with accrued interest thereon and all other
obligations of the Obligors accrued hereunder, shall automatically become due
and payable, without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by each Obligor.
ARTICLE VIII CONDITIONS
SECTION 8.01. Certain Documents.
The obligations of the initial Noteholder to accept the Notes and
Warrant Agreements as partial consideration for the Acquisition shall be subject
to their having received each of the following documents, each of which shall be
satisfactory to it in form and substance:
(a) Opinion of Counsel to the Obligors. A favorable written opinion
(addressed to the Noteholders dated the Closing Date) of Xxxxx Xxxx LLP,
counsel for the Obligors, or the General Counsel to the Borrower, in form
and substance reasonably satisfactory to the Noteholders (and each Obligor
hereby instructs such counsel to deliver such opinion to the initial
Noteholders).
(b) Corporate Documents. Such documents and certificates as the
initial Noteholders or their counsel may reasonably request relating to
the organization, existence and good standing of each Obligor, the
authorization of the Transactions and any other legal matters relating to
the Obligors, this Agreement or the Transactions, all in form and
substance satisfactory to the initial Noteholders.
(c) Officer's Certificate. A certificate, dated the Closing Date and
signed by the President, a Vice President or a Financial Officer of the
Company, confirming compliance with the conditions set forth in the
lettered clauses of the first sentence of Section 8.02.
(d) Security Agreement. The Security Agreement, duly executed and
delivered by the Company and the OCSN Subsidiary and the certificates
identified [stock of OCSN Subsidiary] in Annex 3 thereto, accompanied by
undated stock powers executed in blank. In addition, the Company and the
OCSN Subsidiary shall have taken such other action (including delivering
to the initial Noteholder, for filing, appropriately completed and duly
executed copies of Uniform Commercial Code financing statements) as they
shall have requested in order to perfect the security interests created
pursuant to the Security Agreement.
(e) Consummation of Acquisition. Evidence that the Acquisition shall
have been (or shall be simultaneously) consummated in all material
respects in accordance with the terms of the Purchase and Sale Agreement
(without any modifications, supplements or waivers thereof) and that the
Assets have been transferred to OCSN Subsidiary, and the initial
Noteholders shall have received a certificate of a Financial Officer of
the Company
to such effect and to the effect that attached thereto are true and
complete copies of the documents delivered by or to the Company in
connection with the closing of the Acquisition pursuant to the Purchase
and Sale Agreement.
(f) Notes and Warrant Agreements. The Notes and the Warrant
Agreements, in the form attached hereto, one Warrant with respect to each
Note, in the amounts specified in Schedule V.
(g) Other Documents. Such other documents as the initial Noteholders
or their special counsel may reasonably request.
SECTION 8.02. Additional Conditions.
The obligation of each initial Noteholder to accept a Note is
subject to the satisfaction of the following additional conditions:
(a) the representations and warranties of the Company set forth in
this Agreement, and of each Obligor in each of the other Basic Documents
to which it is a party, shall be true and correct on and as of the date of
issuance; and
(b) at the time of and immediately after giving effect to the
issuance of the Notes and the Warrant Agreements, as applicable, and
assuming this Agreement had been in force since the Initial Date, no
Default shall have occurred and be continuing.
The issuance of the Notes and Warrant Agreements shall be deemed to constitute a
representation and warranty by the Company on the date thereof as to the matters
specified in the preceding sentence.
ARTICLE IX MISCELLANEOUS
SECTION 9.01. Notices.
Except in the case of notices and other communications expressly
permitted to be given by telephone, all notices and other communications
provided for herein shall be in writing and shall be delivered by hand or
overnight courier service, mailed by certified or registered mail or sent by
telecopy, as follows:
(a) if to the Company or any Subsidiary Guarantor, to it at Chelsea
Piers, Xxxx 00, Xxx Xxxx, XX 00000, Attention of President (Telecopy No.
212-342-8899); and
(b) if to a Noteholder, to it at its address (or telecopy number)
set forth on the signature pages hereof.
Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto or given to the
Company and the other Noteholders when it becomes a Noteholder. All notices and
other communications given to any party hereto in accordance with the provisions
of this Agreement shall be deemed to have been given on the date of receipt.
SECTION 9.02. Waivers; Amendments.
(a) No Deemed Waivers; Remedies Cumulative. No failure or delay by
any Noteholder in exercising any right or power hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right or
power, or any abandonment or discontinuance of steps to enforce such a right or
power, preclude any other or further exercise thereof or the exercise of any
other right or power. The rights and remedies of the Noteholders hereunder are
cumulative and are not exclusive of any rights or remedies that they would
otherwise have. No waiver of any provision of this Agreement or consent to any
departure by any Obligor therefrom shall in any event be effective unless the
same shall be permitted by paragraph (b) of this Section, and then such waiver
or consent shall be effective only in the specific instance and for the purpose
for which given. Without limiting the generality of the foregoing, the
acceptance of a Note shall not be construed as a waiver of any Default,
regardless of whether any Noteholder may have had notice or knowledge of such
Default at the time.
(b) Amendments. Neither this Agreement nor any provision hereof may
be waived, amended or modified except pursuant to an agreement or agreements in
writing entered into by the Company and the Required Noteholders; provided that
no such agreement shall (i) reduce the principal amount of any Note or reduce
the rate of interest thereon without the written consent of each Noteholder
affected thereby, (ii) postpone the scheduled date of payment of the principal
amount of any Note, or any interest thereon, without the written consent of each
Noteholder affected thereby, (iii) alter the manner in which payments or
prepayments of principal, interest or other amounts hereunder shall be applied
as among the Noteholders, without the written consent of each Noteholder, (iv)
change any of the provisions of this Section or the definition of the term
"Required Noteholders" or any other provision hereof specifying the number or
percentage of Noteholders required to waive, amend or otherwise modify any
rights hereunder or make any determination or grant any consent hereunder,
without the written consent of each Noteholder, or (v) release any Subsidiary
Guarantor from any of its guarantee obligations under Article III without the
written consent of each Noteholder; and provided further that any modification
or supplement of Article III shall require the consent of each Subsidiary
Guarantor affected thereby.
SECTION 9.03. Expenses; Damage Waiver.
(a) Costs and Expenses. The Company shall pay all out-of-pocket
expenses incurred by any Noteholder, including the fees, charges and
disbursements of any counsel for the Noteholders, in connection with the
enforcement or protection of its rights in connection with this Agreement or the
Security Agreement, including its rights under this Section, or in connection
with the Notes, including in connection with any workout, restructuring or
negotiations in respect thereof following the occurrence of a Default.
(b) Waiver of Consequential Damages, Etc. To the extent permitted by
applicable law, no Obligor shall assert, and each Obligor hereby waives, any
claim against any Noteholder or its Related Parties, on any theory of liability,
for special, indirect, consequential or punitive damages (as opposed to direct
or actual damages) arising out of, in connection with, or as a result of, this
Agreement or any agreement or instrument contemplated hereby or the
Transactions.
(c) Payments. All amounts due under this Section shall be payable
promptly after written demand therefor.
SECTION 9.04. Successors and Assigns.
(a) Assignments Generally. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns permitted hereby, except that no Obligor may assign or
otherwise transfer any of its rights or obligations hereunder without the prior
written consent of each Noteholder (and any attempted assignment or transfer by
any Obligor without such consent shall be null and void). Nothing in this
Agreement, expressed or implied, shall be construed to confer upon any Person
(other than the parties hereto and their respective successors and assigns
permitted hereby and, to the extent expressly contemplated hereby, the Related
Parties of a Noteholder) any legal or equitable right, remedy or claim under or
by reason of this Agreement.
(b) Transfers by Noteholders. Any Noteholder may at any time
transfer to one or more assignees all (but not less than all) of any Note (in
each case, other than in connection with a transfer to Xxxx Xxxxxxx, together
with the related Warrant Agreement) at the time held by it (i) with the prior
written consent of the Company, in its sole and absolute discretion, (ii)
without the consent of the Company, to any Reservoir Entity, (iii) to Xxxx
Xxxxxxx, provided that a Default exists, and provided further that unless an
Event of Default exists no such transfer to Xxxxxxx may be made without five
Business Days' notice to the Company, and (iv) upon the occurrence and during
the continuance of any Event of Default under clauses (a), (h) or (i) of Article
VII, to any Person. Each attempted transfer by a Noteholder that is not in
compliance with the terms of this Section 9.04(b) shall be null and void. Any
transferee of a Note in connection with a transfer that complies with the terms
of this Section shall be deemed a party hereto and shall have the rights of a
Noteholder under this Agreement.
SECTION 9.05. Survival.
All covenants, agreements, representations and warranties made by
the Company herein and in the certificates or other instruments delivered in
connection with or pursuant to this Agreement shall be considered to have been
relied upon by the other parties hereto and shall survive the execution and
delivery of this Agreement and the issuance of any Notes, regardless of any
investigation made by any such other party or on its behalf and notwithstanding
that any Noteholder may have had notice or knowledge of any Default or incorrect
representation or warranty at the time any Note is issued hereunder, and shall
continue in full force and effect as long as the principal of or any accrued
interest on any Note or any other amount payable under this Agreement is
outstanding and unpaid. The provisions of Sections 3.03 and 9.03 shall survive
and remain in full force and effect regardless of the consummation of the
transactions contemplated hereby, the repayment of the Notes, or the termination
of this Agreement or any provision hereof.
SECTION 9.06. Counterparts; Integration.
This Agreement may be executed in counterparts (and by different
parties hereto on different counterparts), each of which shall constitute an
original, but all of which when taken together shall constitute a single
contract. This Agreement constitutes the entire contract
between and among the parties relating to the subject matter hereof and
supersedes any and all previous agreements and understandings, oral or written,
relating to the subject matter hereof. Delivery of an executed counterpart of a
signature page to this Agreement by telecopy shall be effective as delivery of a
manually executed counterpart of this Agreement.
SECTION 9.07. Severability.
Any provision of this Agreement held to be invalid, illegal or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such invalidity, illegality or unenforceability without
affecting the validity, legality and enforceability of the remaining provisions
hereof; and the invalidity of a particular provision in a particular
jurisdiction shall not invalidate such provision in any other jurisdiction.
SECTION 9.08. Right of Setoff.
If an Event of Default shall have occurred and be continuing, each
Noteholder is hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set off and apply any and all indebtedness
at any time owing by such Noteholder to or for the credit or the account of any
Obligor against any of and all the obligations of any Obligor now or hereafter
existing under this Agreement held by such Noteholder, irrespective of whether
or not such Noteholder shall have made any demand under this Agreement and
although such obligations may be unmatured. The rights of each Noteholder under
this Section are in addition to other rights and remedies (including other
rights of setoff) which such Noteholder may have.
SECTION 9.09. Governing Law; Jurisdiction; Etc.
(a) Governing Law. This Agreement shall be construed in accordance
with and governed by the law of the State of New York.
(b) Submission to Jurisdiction. Each party hereby irrevocably and
unconditionally submits, for itself and its property, to the nonexclusive
jurisdiction of the Supreme Court of the State of New York sitting in New York
County and of the United States District Court of the Southern District of New
York, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to this Agreement, or for recognition or enforcement
of any judgment, and each of the parties hereto hereby irrevocably and
unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court. Each of the parties hereto agrees that
a final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement shall affect any right that any party
may otherwise have to bring any action or proceeding relating to this Agreement
against any other party or its properties in the courts of any jurisdiction.
(c) Waiver of Venue. Each party hereby irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, any objection which it may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to this Agreement in
any court referred to in paragraph (b) of this Section. Each of the parties
hereto hereby irrevocably waives, to the fullest extent permitted by law, the
defense of an inconvenient forum to the maintenance of such action or proceeding
in any such court.
(d) Service of Process. Each party to this Agreement irrevocably
consents to service of process in the manner provided for notices in Section
9.01. Nothing in this Agreement will affect the right of any party to this
Agreement to serve process in any other manner permitted by law.
SECTION 9.10. WAIVER OF JURY TRIAL.
EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING
DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN
INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS
AND CERTIFICATIONS IN THIS SECTION.
SECTION 9.11. Headings.
Article and Section headings and the Table of Contents used herein
are for convenience of reference only, are not part of this Agreement and shall
not affect the construction of, or be taken into consideration in interpreting,
this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and year
first above written.
NCSN, INC.
By_________________________
Name:
Title:
SUBSIDIARY GUARANTORS
[COMPLETE THE SIGNATURE LINE FOR EACH SUBSIDIARY GUARANTOR]
[NAME OF SUBSIDIARY GUARANTOR]
By_________________________
Name:
Title:
NOTEHOLDERS
STUDENT ADVANTAGE, INC.
By_________________________
Name:
Title:
ADDRESS FOR NOTICES:
STUDENT ADVANTAGE, INC
___________________________
___________________________
___________________________
EXHIBIT A
[Form of Guarantee Assumption Agreement]
GUARANTEE ASSUMPTION AGREEMENT
GUARANTEE ASSUMPTION AGREEMENT dated as of ________ __, ____ by
[NAME OF ADDITIONAL SUBSIDIARY GUARANTOR], a ________ [corporation/partnership
limited liability company] (the "Additional Subsidiary Guarantor"), in favor of
the Noteholders under the Note Agreement referred to below.
NCSN, Inc., a Delaware corporation, the Subsidiary Guarantors
referred to therein and the Noteholders referred to therein are parties to a
Note Agreement dated as of _________ __, ____ (as modified and supplemented and
in effect from time to time, the "Note Agreement").
Pursuant to Section 5.08 of the Note Agreement, the Additional
Subsidiary Guarantor hereby agrees to become a "Subsidiary Guarantor" for all
purposes of the Note Agreement. Without limiting the foregoing, the Additional
Subsidiary Guarantor hereby, jointly and severally with the other Subsidiary
Guarantors, guarantees to each Noteholder and their respective successors and
permitted assigns the prompt payment in full when due (whether at stated
maturity, by acceleration or otherwise) of all Guaranteed Obligations (as
defined in Section 3.01 of the Note Agreement) in the same manner and to the
same extent as is provided in Article III of the Note Agreement. In addition,
the Additional Subsidiary Guarantor hereby makes the representations and
warranties set forth in Sections 4.01, 4.02 and 4.03 of the Note Agreement with
respect to itself and its obligations under this Agreement on and as of the date
hereof, as if each reference in such Sections to the Basic Documents included
reference to this Agreement.
The Additional Subsidiary Guarantor hereby instructs its counsel to
deliver the opinions referred to in Section 5.08 of the Note Agreement to the
Noteholders.
IN WITNESS WHEREOF, the Additional Subsidiary Guarantor has caused
this Guarantee Assumption Agreement to be duly executed and delivered as of the
day and year first above written.
[NAME OF ADDITIONAL SUBSIDIARY
GUARANTOR]
By______________________________
Title:
EXHIBIT B
[Form of Note]
New York, New York
[date]
For value received, NCSN, INC., a Delaware corporation (the
Company"), promises to pay to the order of __________________ (the "Noteholder")
the unpaid principal amount of this Note pursuant to the Note Agreement referred
to below on the Maturity Date. The Company promises to pay interest on the
unpaid principal amount of each such Note on the dates, at the rate or rates and
in the manner provided for in the Note Agreement. All such payments of principal
and interest shall be made in lawful money of the United States of America and
in immediately available funds at the office specified from time to time by the
Noteholder to the Company in accordance with the Note Agreement.
This Promissory Note is one of the Notes referred to in the Note
Agreement dated as of (as the same shall be modified and supplemented
and in effect from time to time, the "Note Agreement"), among the Company, the
Subsidiary Guarantors party thereto and the Noteholders party thereto. Terms
used but not otherwise defined herein have the respective meanings assigned to
them in the Note Agreement. Reference is made to the Note Agreement for
provisions for the mandatory and optional prepayment, the acceleration of the
maturity and the limitations on the transferability of this Promissory Note.
Reference is made to the Security Agreement and the security interest granted by
the Company and one of the Subsidiary Guarantors therein securing, among other
things, the obligations of the Company hereunder. This Promissory Note shall be
construed in accordance with and governed by the law of the State of New York.
NCSN, INC.
By:___________________________
Name:
Title:
