EXHIBIT 99.2
AMENDMENT XX. 0
XXXXXXXXX XX. 0 dated as of November 6, 2001, among STUDENT
ADVANTAGE, INC., a Delaware corporation duly organized and validly existing
under the laws of the State of Delaware (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"); each of the lenders that is a signatory hereto
(individually, a "Lender" and, collectively, the "Lenders"); and RESERVOIR
CAPITAL PARTNERS, L.P., a Delaware limited partnership, as administrative agent
for the Lenders (in such capacity, together with its successors in such
capacity, the "Administrative Agent").
The Borrower, the Subsidiary Guarantors, the Lenders and the
Administrative Agent are parties to a Loan Agreement dated as of June 25, 2001,
as amended by an amendment dated September 28, 2001 (as heretofore modified and
supplemented and in effect on the date hereof, the "Loan Agreement"), providing,
subject to the terms and conditions thereof, for loans to be made by said
Lenders to the Borrower in an aggregate principal amount not exceeding
$15,000,000. The Borrower, the Subsidiary Guarantors, the Lenders and the
Administrative Agent wish to amend the Loan Agreement in certain respects, and
accordingly, the parties hereto hereby agree as follows:
Section 1. Definitions. Except as otherwise defined in this
Amendment No. 2, terms defined in the Loan Agreement are used herein as defined
therein.
Section 2. Amendments. Subject to the satisfaction of the
conditions precedent specified in Section IV, but effective as of the date
hereof, the Loan Agreement shall be amended as follows:
2.1. 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. References to the Loan
Agreement in any of the Loan Documents shall deemed as references to the Loan
Agreement as amended hereby.
2.2. Section 1.01 of the Loan Agreement shall be amended by
adding the following new definitions (to the extent not already included in said
Section 1.01) and inserting the same in the appropriate alphabetical locations
and amending in their entirety the following
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definitions (to the extent already included in said Section 1.01), as follows:
"Special Disposition" means a Disposition on or prior to
December 31, 2001 of the Borrower's U-Wire or eStudent Loan business,
all the capital stock of any Subsidiary conducting any such business or
substantially all of the assets used in any such business, provided
that there has not been any Equity Issuance for cash since the date
hereof."
2.3. Paragraph (a) of the definition of Net Available Proceeds
in Section 1.01 of the Loan Agreement is hereby amended in its entirety to read
as follows:
"(a) in the case of any Disposition, the aggregate amount of
all cash payments, and the fair market value of any non-cash consideration,
received by the Borrower and its Subsidiaries directly or indirectly in
connection with such Disposition; provided that (i) Net Available Proceeds shall
be net of (x) the amount of any legal, title and recording tax expenses,
commissions and other fees and expenses paid by the Borrower and its
Subsidiaries in connection with such Disposition and (y) any Federal, state and
local income or other taxes estimated to be payable by the Borrower and its
Subsidiaries as a result of such Disposition (but only to the extent that such
estimated taxes are in fact paid to the relevant Federal, state or local
governmental authority within three months of the date of such Disposition),
(ii) Net Available Proceeds shall be net of any repayments by the Borrower or
any of its Subsidiaries of Indebtedness to the extent that (x) such Indebtedness
is secured by a Lien on the property that is the subject of such Disposition and
(y) the transferee of (or holder of a Lien on) such property requires that such
Indebtedness be repaid as a condition to the purchase of such property and (iii)
in the case of a Special Disposition, Net Available Proceeds as otherwise
computed pursuant to this paragraph, solely for purposes of Section 2.07(b) of
this Agreement, shall be reduced by 50% of the cash payments received by the
Borrower and its Subsidiaries on or before December 31, 2001 in connection
therewith.
2.4. Section 2.07(b)(i) of the Loan Agreement is hereby
amended in its entirety to read as follows:
"(i) Equity Issuance. Upon any Equity Issuance, the Borrower
shall prepay the Loans, and/or the Commitments shall be subject to automatic
reduction, in an aggregate amount equal to 0% of the Net Available Proceeds
thereof until the aggregate Net Available Proceeds of such Equity Issuance and
all prior Equity Issuances (including Equity Issuances covered by the
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last sentence of this paragraph) exceed $5,000,000; 25% of the Net Available
Proceeds of such Equity Issuance to the extent the Net Available Proceeds of
such Equity Issuance, together with all prior Equity Issuances, exceed
$5,000,000 and do not exceed $10,000,000; and 50% of the Net Available Proceeds
of such Equity Issuance to the extent the Net Available Proceeds of such Equity
Issuance, together with all prior Equity Issuances, exceed $10,000,000; such
prepayment and/or reduction to be effected in each case in the manner and to the
extent specified in clause (iii) of this paragraph. Notwithstanding the
foregoing, following a Special Disposition, the Borrower shall prepay the Loans,
and/or the Commitments shall be subject to automatic reduction, in an aggregate
amount equal to 100% of the Net Available Proceeds of all Equity Issuances until
the Lenders have received an amount equal to the amount by which Net Available
Proceeds is reduced by the application of clause (iii) of paragraph (a) of the
definition of Net Available Proceeds, after which Net Available Proceeds shall
be applied in accordance with the rest of this paragraph."
2.5. Effective as of October 1, 2001, Section 7.10(f) of the
Loan Agreement has been amended to read in its entirety as follows:
"(f) Change in Cash Position. The Borrower will not permit the
Increase in Cash Position for the following periods of fiscal
quarter(s) ending on or nearest to the following respective dates to be
less than the following respective amounts:
Period/Date Amount
Four fiscal quarters
September 30, 2002 $3,000,000
September 30, 2003 $3,000,000"
2.6. Effective as of September 29, 2001, Section 7.10(b) of
the Loan Agreement is amended to read in its entirety as follows:
"(b) Current Ratio. The Borrower will not permit the Current
Ratio at any time after September 30, 2001 to be less than 1.0.".
Section 3. Representations and Warranties. Part A of Schedule VI to the
Loan Agreement is hereby amended by adding as a new subsidiary,
Xxxxxxxxxxxx.xxx, Inc, a Delaware
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corporation of which 100% of the common stock is owned by OCM Direct, Inc.. The
Borrower represents and warrants to the Lenders that the representations and
warranties set forth in Article IV of the Loan Agreement and Section 3 of the
Warrant Agreement are true and complete on the date hereof as if made on and as
of the date hereof and as if each reference in said Article IV and Section 3 to
"this Agreement" included reference to this Amendment No. 2.
Section 4. Condition Precedent. This Amendment No. 2 shall
become effective as of the date hereof once it has been executed and delivered
by each of the parties hereto.
Section 5. Documents. Prior to execution, the Administrative
Agent shall have received the following documents, each of which shall be
satisfactory to the Administrative Agent in form and substance:
(1) Corporate Documents. Certified copies of the charter and
by-laws (or equivalent documents) of each Obligor (or, in the
alternative, a certification to the effect that none of such documents
has been modified since delivery thereof on the Effective Date pursuant
to the Loan Agreement) and of all corporate authority for each Obligor
(including board of director resolutions and evidence of the incumbency
of officers for each Obligor) with respect to the execution, delivery
and performance of this Amendment No. 2 and the Loan Agreement as
amended hereby and the loans under the Loan Agreement as amended hereby
and each other document to be delivered by each Obligor from time to
time in connection with the Loan Agreement as amended hereby (and the
Administrative Agent and each Lender may conclusively rely on such
certificate until it receives notice in writing from each Obligor to
the contrary).
(2) Opinion of Counsel to the Obligors. An opinion of Xxxx and
Xxxx LLP, counsel to the Obligors (and each Obligor hereby instructs
such counsel to deliver such opinion to the Lenders and the
Administrative Agent).
(3) Other Documents. Such other documents as the
Administrative Agent or any Lender or special counsel to the Lenders
may reasonably request.
Section 6. Consideration. For and in consideration of the
terms and conditions of this Amendment, Borrower has paid to the Administrative
Agent $100,000 by wire transfer of immediately available funds upon the
execution and delivery of this Amendment by the Administrative Agent. The
Borrower and the Lenders have entered into a First Amendment to Warrant
Agreement, substantially in the form attached hereto as Exhibit A. It is agreed
that
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monies paid under this Section 6 of this Second Amendment shall not be deducted
from the Borrower's financial condition or holdings for purposes of Section 7.10
of the Loan Agreement. As additional consideration for this Amendment, Borrower
has issued to each Lender an additional Term Warrant covering a number of Stock
Units equal to 20% of the Stock Units covered by the Term Warrant originally
issued to such Lender. In addition, effective as of the date hereof the
principal amount of the Term Loan made by each Lender shall be deemed increased
by 2% as of the date hereof and their respective Commitment shall be likewise
increased.
Section 7. Miscellaneous. Except as herein provided, the Loan
Agreement shall remain unchanged and in full force and effect. This Amendment
No. 2 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 No. 2 by signing any such counterpart. This
Amendment No. 2 shall be governed by, and construed in accordance with, the law
of the State of New York. To the extent that any of the Loan Documents, the
Warrant Agreement or any of the Warrants refers to the Loan Agreement, such
reference shall mean the Loan Agreement as amended hereby.
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IN WITNESS WHEREOF, the parties hereto have caused this
Amendment No. 2 to be duly executed by their respective authorized officers as
of the day and year first above written.
STUDENT ADVANTAGE, INC.
By: /s/ Xxxxxxx X. Xxxxx, Xx.
---------------------------------
Name: Xxxxxxx X. Xxxxx, Xx.
Title: President
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SUBSIDIARY GUARANTORS
XXXXXXX000.XXX, INC.
By: /s/ Xxxxxxx X. Xxxxx, Xx.
---------------------------------
Name: Xxxxxxx X. Xxxxx, Xx.
Title: President
STUDENT ADVANTAGE SECURITIES CORPORATION
By: /s/ Xxxxxxx X. Xxxxx, Xx.
---------------------------------
Name: Xxxxxxx X. Xxxxx, Xx.
Title: President
eSTUDENT LOAN, INC.
By: /s/ Xxxxxxx X. Xxxxx, Xx.
---------------------------------
Name: Xxxxxxx X. Xxxxx, Xx.
Title: President
XXXXXXXXXX.XXX, INC.
By: /s/ Xxxxxxx X. Xxxxx, Xx.
---------------------------------
Name: Xxxxxxx X. Xxxxx, Xx.
Title: President
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OCM DIRECT, INC.
By: /s/ Xxxxxxx X. Xxxxx, Xx.
---------------------------------
Name: Xxxxxxx X. Xxxxx, Xx.
Title: President
COLLEGIATE CARPETS, INC.
By: /s/ Xxxxxxx X. Xxxxx, Xx.
---------------------------------
Name: Xxxxxxx X. Xxxxx, Xx.
Title: President
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LENDERS
RESERVOIR CAPITAL PARTNERS, L.P.,
individually and as Administrative
Agent
By: Reservoir Capital Group, L.L.C.,
General Partner
By /s/ Xxxxx Xxxx
--------------------------------
Name: Xxxxx Xxxx
Title: Managing Director
RESERVOIR CAPITAL ASSOCIATES L.P.
By: Reservoir Capital Group, L.L.C.,
General Partner
By /s/ Xxxxx Xxxx
--------------------------------
Name: Xxxxx Xxxx
Title: Managing Director
RESERVOIR CAPITAL MASTER FUND, L.P.
By: Reservoir Capital Group, L.L.C.,
General Partner
By /s/ Xxxxx Xxxx
--------------------------------
Name: Xxxxx Xxxx
Title: Managing Director
