EX-10.3 5 b46092saexv10w3.txt AMENDMENT NO.9 TO LOAN AGREEMENT Exhibit 10.3 AMENDMENT NO. 9 TO LOAN AGREEMENT AMENDMENT NO. 9 TO LOAN AGREEMENT dated as of March 31, 2003, (this "Amendment"), among STUDENT ADVANTAGE, INC., a Delaware corporation (the "Borrower"); each of the Subsidiaries of the Borrower identified under the caption "SUBSIDIARY GUARANTORS" on the signature pages hereto (individually, a "Subsidiary Guarantor" and, collectively, the "Subsidiary Guarantors" and, together with the Borrower, the "Obligors"); SCHOLAR, INC., a Delaware corporation ("Scholar"); JOHN KATZMAN, an individual residing in New York, New York ("Katzman"); and each of the Lenders that is a signatory hereto other than Scholar Corp. and Katzman (each, a "Reservoir Lender" and, collectively, the "Reservoir Lenders"). WHEREAS, the Borrower, the Subsidiary Guarantors, the Reservoir Lenders, Scholar and Katzman are parties to a Loan Agreement dated as of June 25, 2001 (as modified and supplemented and in effect on the date hereof by eight amendments thereto, the "Loan Agreement"), providing, subject to the terms and conditions thereof, for loans to be made by said Lenders to the Borrower; and WHEREAS, the Reservoir Lenders have agreed to lend to the Borrower additional monies contemporaneously with the execution of this Amendment. NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby mutually acknowledged, the parties hereto desire to modify and amend the Loan Agreement pursuant to the terms hereof, as follows: Section 1. Definitions. Except as otherwise defined in this Amendment, terms defined in the Loan Agreement are used herein as defined therein. References in the Loan Agreement (including references to the Loan Agreement as amended hereby) to "this Agreement" (and indirect references such as "hereunder", "hereby", "herein" and "hereof") shall be deemed to be references to the Loan Agreement as amended hereby. Section 2. Loans. Contemporaneously herewith, the Reservoir Lenders will lend to the Borrower an additional One Million Five Hundred Thousand Dollars ($1,500,000.00) as a Term Loan (the "Additional Reservoir Lendings"), which Additional Reservoir Lendings shall be evidenced by two promissory notes in or substantially in the forms attached hereto as Exhibits A-1 and A-2, hereto. The borrowings contemplated by this Amendment shall not constitute additional warranties or representations regarding the Obligors or any fact or circumstance whatsoever, except that the warranties and representations made in Section 4.01, 4.02 and 4.03 of the Loan Agreement are hereby incorporated by reference and made as of the date hereof (and the term "Transactions" therein shall include, without limitation, the transactions contemplated by this Amendment), it being understood that the Borrower is not in good corporate standing with the State of Delaware, Secretary of State. Section 3. Payments. (a) Notwithstanding any provision of the Loan Agreement to the contrary, all payments on Loans after the date hereof (including payments made under the Security Agreement) shall be made to the Administrative Agent for the account of the Lenders and shall be allocated as follows: (i) all payments, until such time as Reservoir shall have been repaid the Additional Reservoir Lendings provided hereunder, together with accrued, but unpaid interest thereon arising after the date of this Amendment, shall be paid over promptly to Reservoir; (ii) all payments, until such time as Reservoir shall have been repaid the $500,000 borrowed under Amendment No. 8 to Loan Agreement, together with accrued, but unpaid interest thereon arising after March 14, 2003 disbursement date thereof, shall be paid over promptly to Reservoir (iii) thereafter, all payments, until such time as Reservoir shall have been repaid an additional $4,016,000 of the Loans, together with accrued, but unpaid interest thereon arising after December 30, 2002, shall be paid over promptly to the Reservoir Lenders; (iv) thereafter, all payments, until such time as an additional $9,000,000 of the Loans, together with accrued but unpaid interest thereon arising after December 30, 2002, and $500,000 of the Katzman Fee, together with accrued deemed interest thereon, shall have been paid over to the Lenders and Katzman, 57.89% of such monies shall be paid to the Reservoir Lenders, 5.26% shall be paid to Katzman and 36.84% shall be paid over to Scholar; and (v) thereafter, all payments, until such time as an additional $500,000 of the Loans, together with accrued, but unpaid interest thereon arising after December 30, 2002, and an additional $500,000 of the Katzman Fee together with accrued deemed interest thereon, shall have been paid to Katzman and the Reservoir Lenders 50% of such monies shall be paid to Katzman and 50% shall be paid to the Reservoir Lenders. (b) (i) In paragraph (b) of the letter dated December 30, 2002 from the Borrower to the Lenders relating to disposition of proceeds from certain asset sales (the "Dispositions Letter"), the number "$6,500,000" shall be replaced by "$8,000,000." (ii) In paragraph (c) of the Dispositions Letter, the number "$8,500,000" shall be replaced by "$10,000,000". Section 4. Loan Agreement Amendment. Section 2.06(a) of the Loan Agreement is deleted in its entirety and the following shall be substituted therefor: "The Borrower hereby unconditionally promises to pay to the Lenders: (i) $4,000,000 by April 14, 2003, and (ii) the remainder of the Loans on the Maturity Date." Section 5. Conditions Precedent. This Amendment shall become effective as of the date hereof upon the receipt by the Administrative Agent of counterparts of this Amendment executed by each of the parties hereto. Section 6. Ratification. Except as amended, modified or waived hereby, the Loan Agreement and the Loan Documents remain in full force and effect and are hereby ratified and affirmed by the Borrower and each Subsidiary Guarantor. Except as amended hereby, the Loan Agreement, including without limitation the Guarantees, shall remain in full force and effect and bind and inure to the benefit of the parties thereto and are hereby ratified and confirmed. Section 7. Miscellaneous. This Amendment may be executed in any number of counterparts, all of which taken together shall constitute one and the same amendatory instrument and any of the parties hereto may execute this Amendment by signing any such counterpart. This Amendment shall be governed by, and construed in accordance with, the laws of the State of New York. To the extent that any of the Loan Documents, any of the Warrant Documents refers to the Loan Agreement, such reference shall mean the Loan Agreement as amended hereby. [Signature pages follow.] IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed by their respective authorized officers as of the day and year first above written. STUDENT ADVANTAGE, INC. By /s/ Raymond V. Sozzi, Jr. -------------------------------- Name: Raymond V. Sozzi, Jr. Title: President SUBSIDIARY GUARANTORS COLLEGE411.COM, INC. By /s/ Raymond V. Sozzi, Jr. --------------------------------- Name: Raymond V. Sozzi, Jr. Title: President STUDENT ADVANTAGE SECURITIES CORPORATION By /s/ Raymond V. Sozzi, Jr. -------------------------------- Name: Raymond V. Sozzi, Jr. Title: President SCHOLARAID.COM, INC. By /s/ Raymond V. Sozzi, Jr. -------------------------------- Name: Raymond V. Sozzi, Jr. Title: President THE DIGITAL PUBLISHING COMPANY, INC. By /s/ Raymond V. Sozzi, Jr. -------------------------------- Name: Raymond V. Sozzi, Jr. Title: Chairman OFFICIAL COLLEGE SPORTS NETWORK, INC. By /s/ Raymond V. Sozzi, Jr. -------------------------------- Name: Raymond V. Sozzi, Jr. Title: Chairman U-WIRE, INC. By /s/ Raymond V. Sozzi, Jr. -------------------------------- Name: Raymond V. Sozzi, Jr. Title: KATZMAN By /s/ John Katzman --------------------------------- Name: John Katzman LENDERS SCHOLAR, INC. By /s/ Raymond V. Sozzi, Jr. -------------------------------- Name: Raymond V. Sozzi, Jr. Title: President RESERVOIR CAPITAL PARTNERS, L.P., individually and as Administrative Agent By: Reservoir Capital Group, L.L.C., General Partner By: /s/ Gegg Zeitlin ------------------------------- Name: Gegg Zeitlin Title: Managing Director RESERVOIR CAPITAL ASSOCIATES L.P. By: Reservoir Capital Group, L.L.C., General Partner By: /s/ Gegg Zeitlin -------------------------------- Name: Gegg Zeitlin Title: Managing Director RESERVOIR CAPITAL MASTER FUND L.P. By: Reservoir Capital Group, L.L.C., General Partner By: /s/ Gegg Zeitlin ------------------------------- Name: Gegg Zeitlin Title: Managing Director Exhibit A-1 PROMISSORY NOTE New York, New York March 31, 2003 For value received, STUDENT ADVANTAGE, INC., a Delaware corporation (the "Borrower"), promises to pay to the order of RESERVOIR CAPITAL PARTNERS, L.P. (the "Lender") the unpaid principal amount of each Loan made by the Lender to the Borrower pursuant to the Loan Agreement referred to below on the Maturity Date. The Borrower promises to pay interest on the unpaid principal amount of each such Loan on the dates, at the rate or rates and in the manner provided for in the Loan 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 Lender to the Borrower in accordance with the Loan Agreement. All Loans made by the Lender and all repayments of the principal thereof shall be recorded by the Lender and, prior to any transfer hereof, appropriate notations to evidence the foregoing information with respect to each such Loan then outstanding shall be endorsed by the Lender on the schedule attached hereto, or on a continuation of such schedule attached to and made a part hereof; provided that the failure of the Lender to make any such recordation or endorsement shall not affect the obligations of the Borrower hereunder or under the Loan Agreement. This Promissory Note is one of the Notes referred to in the Loan Agreement dated as of June 25, 2001 (as the same shall be modified and supplemented and in effect from time to time, the "Loan Agreement"), among the Borrower, the Subsidiary Guarantors party thereto, the lenders party thereto and Reservoir Capital Partners, L.P., as Administrative Agent. Terms used but not otherwise defined herein have the respective meanings assigned to them in the Loan Agreement. Reference is made to the Loan Agreement for provisions for the 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 pledge made by the Borrower and the Subsidiary Guarantors therein securing, among other things, the obligations of the Borrower hereunder. This Promissory Note shall be construed in accordance with and governed by the law of the State of New York. STUDENT ADVANTAGE, INC. By ____________________________ Name: Raymond V. Sozzi, Jr. Title: President Promissory Note (cont'd) LOANS AND PAYMENTS OF PRINCIPAL
------------------------------------------------------------------------------------------------------------------- Type of Loan Amount of Principal Date (Term or Revolving) Amount of Loan Repaid Notation Made By ------------------------------------------------------------------------------------------------------------------- 3/31/03 Term $1,284,600 ------------------------------------------------------------------------------------------------------------------- ___________________________________________________________________________________________________________________ ___________________________________________________________________________________________________________________ ___________________________________________________________________________________________________________________ ___________________________________________________________________________________________________________________ ___________________________________________________________________________________________________________________ ___________________________________________________________________________________________________________________ ___________________________________________________________________________________________________________________ ___________________________________________________________________________________________________________________ ___________________________________________________________________________________________________________________ ___________________________________________________________________________________________________________________ ___________________________________________________________________________________________________________________
Exhibit A-2 PROMISSORY NOTE New York, New York March 31, 2002 For value received, STUDENT ADVANTAGE, INC., a Delaware corporation (the "Borrower"), promises to pay to the order of RESERVOIR CAPITAL MASTER FUND, L.P. (the "Lender") the unpaid principal amount of each Loan made by the Lender to the Borrower pursuant to the Loan Agreement referred to below on the Maturity Date. The Borrower promises to pay interest on the unpaid principal amount of each such Loan on the dates, at the rate or rates and in the manner provided for in the Loan 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 Lender to the Borrower in accordance with the Loan Agreement. All Loans made by the Lender and all repayments of the principal thereof shall be recorded by the Lender and, prior to any transfer hereof, appropriate notations to evidence the foregoing information with respect to each such Loan then outstanding shall be endorsed by the Lender on the schedule attached hereto, or on a continuation of such schedule attached to and made a part hereof; provided that the failure of the Lender to make any such recordation or endorsement shall not affect the obligations of the Borrower hereunder or under the Loan Agreement. This Promissory Note is one of the Notes referred to in the Loan Agreement dated as of June 25, 2001 (as the same shall be modified and supplemented and in effect from time to time, the "Loan Agreement"), among the Borrower, the Subsidiary Guarantors party thereto, the lenders party thereto and Reservoir Capital Partners, L.P., as Administrative Agent. Terms used but not otherwise defined herein have the respective meanings assigned to them in the Loan Agreement. Reference is made to the Loan Agreement for provisions for the 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 pledge made by the Borrower and the Subsidiary Guarantors therein securing, among other things, the obligations of the Borrower hereunder. This Promissory Note shall be construed in accordance with and governed by the law of the State of New York. STUDENT ADVANTAGE, INC. By ____________________________ Name: Raymond V. Sozzi, Jr. Title: President Promissory Note (cont'd) LOANS AND PAYMENTS OF PRINCIPAL
------------------------------------------------------------------------------------------------------------------- Type of Loan Amount of Principal Date (Term or Revolving) Amount of Loan Repaid Notation Made By ------------------------------------------------------------------------------------------------------------------- 3/31/03 Term $215,400 ------------------------------------------------------------------------------------------------------------------- ___________________________________________________________________________________________________________________ ___________________________________________________________________________________________________________________ ___________________________________________________________________________________________________________________ ___________________________________________________________________________________________________________________ ___________________________________________________________________________________________________________________ ___________________________________________________________________________________________________________________ ___________________________________________________________________________________________________________________ ___________________________________________________________________________________________________________________ ___________________________________________________________________________________________________________________ ___________________________________________________________________________________________________________________ ___________________________________________________________________________________________________________________