Exhibit 10.3
FIRST AMENDMENT TO REVOLVING LINE OF CREDIT
LOAN AGREEMENT AND SECURITY AGREEMENT
THIS FIRST AMENDMENT TO REVOLVING LINE OF CREDIT LOAN AGREEMENT AND
SECURITY AGREEMENT ("First Amendment") is made as of January 24, 2003, by and
among OCM DIRECT, INC., COLLEGIATE CARPETS, INC., and CAREPACKAGES, INC., each
having an address at c/o OCM DIRECT, INC., 0000 Xxxxxxxxxx Xxxxxx, Xxxxx 000,
Xxxxxxxx, Xxxxxxxx 00000 (collectively, the "Borrower"), Student Advantage, Inc.
(the "Guarantor") and Bank of America, N.A., a national banking corporation (the
"Lender").
RECITALS
A. The Borrower and the Lender entered into a Revolving Line of Credit
Loan Agreement and Security Agreement, dated as of February 13, 2002
(the "Loan Agreement").
B. The Loan Agreement governs and secures a certain line of credit loan
facility extended by Lender to Borrower in the maximum principal
amount of Five Million and 00/100 Dollars ($5,000,000.00), evidenced
by a Revolving Note executed by Borrower dated as of February 13,
2002 (the "Revolving Note").
C. The parties desire to amend the Loan Agreement to extend the Ending
Date of the Loan Agreement to April 30, 2003.
D. The Guarantor desires to enter into this First Amendment to evidence
the Guarantor's consent to the terms and conditions of this First
Amendment and to confirm that the Guaranty remains in full force and
effect as to all credit extended under the Loan Agreement as amended
by this First Amendment.
E. Capitalized terms used in this First Amendment and not defined
herein have the meanings ascribed to them in the Loan Agreement.
AGREEMENTS
NOW, THEREFORE, in consideration of the premises, the mutual agreements
herein contained, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Borrower, the Guarantor and
the Lender hereby agree as follows:
1. REPRESENTATIONS AND WARRANTIES. To induce the Lender to enter into this
First Amendment, the Borrower warrants and represents to the Lender that:
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a. The Borrower's books and records properly reflect the Borrower's
financial condition, and no material adverse change in the
Borrower's financial condition has occurred since the last date that
the Borrower provided financial reports to the Lender; and
b. No litigation is pending or threatened against the Borrower of which
the Borrower has not informed the Lender in writing; and
c. The Borrower is in compliance with all provisions of the Loan
Agreement and with all applicable laws and regulations; and
d. Borrower has the power and authority to enter into this First
Amendment, to perform its obligations hereunder, to execute all
documents being executed and delivered in connection herewith, and
to incur the obligations provided for herein, all of which have been
duly authorized and approved in accordance with the Borrower's
organizational documents; and
e. This First Amendment, together with all documents executed in
connection herewith or pursuant hereto, constitute the valid and
legally binding obligations of the Borrower in accordance with their
respective terms; and
f. The Borrower's obligations under the Loan Documents remain valid and
enforceable obligations, and the execution and delivery of this
First Amendment and the other documents executed in connection
herewith shall not be construed as a novation of the Loan Agreement
or the other Loan Documents.
2. ENDING DATE. The definition of "Ending Date" is hereby modified to mean
April 30, 2003.
3. NO MANAGEMENT OR SERVICES FEES. Borrower shall not deliver to Guarantor
any fee for the management of Borrower or for the provision of any service
by Guarantor to Borrower, without the prior written consent of Lender.
4. LOAN FEE. In consideration of Lender's agreement to this First Amendment,
Borrower promises to pay to Lender, on demand, a loan fee of Seven
Thousand and 00/100 Dollars ($7,000.00).
5. ADDITIONAL FEES AND COSTS. The Borrower promises to pay, on demand, all
costs (including attorneys fees) incurred by the Lender for the
preparation of this First Amendment, the preparation of any documents
executed in connection with this First Amendment and any other expenses
incurred by Lender in relation to this First Amendment. The Borrower
authorizes the Lender to advance funds to itself or to third parties to
pay such fees, costs and expenses, and
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any loan fee provided in this First Amendment, which advances shall be
deemed to be Advances to the Borrower under the Loan Agreement.
6. REAFFIRMATION; NO OFFSETS OR DEFENSES. Except as modified by this First
Amendment, the Loan Agreement remains in full force and effect and
unmodified. Borrower and the Guarantor warrant and represent that they
have no offsets or defenses to their obligations under the Loan Agreement,
as so modified, and the other Loan Documents.
7. GUARANTOR CONSENT. The Guarantor consents to this First Amendment, agrees
that this First Amendment does not impair the Guarantor's liabilities or
obligations under the Guaranty, and confirms that the Guaranty remains in
full force and effect as to all credit extended under the Loan Agreement
as amended by this First Amendment.
8. RELEASE AND WAIVER. In consideration of Lender's agreement to this First
Amendment, the Borrower hereby releases and waives any and all claims of
any kind that it may have against the Lender as of the date of this First
Amendment arising out of or relating to the Revolving Note or the Loan
Agreement, as amended by this First Amendment.
9. ARBITRATION.
This paragraph concerns the resolution of any controversies or claims
between the Borrower and the Lender, whether arising in contract, tort or
by statute, including but not limited to controversies or claims that
arise out of or relate to: (i) the Loan Agreement as modified by this
First Amendment (including any renewals, extensions or modifications); or
(ii) any document related to this First Amendment (collectively a
"Claim").
At the request of the Borrower or the Lender, any Claim shall be resolved
by binding arbitration in accordance with the Federal Arbitration Act
(Title 9, U.S. Code) (the "Act"). The Act will apply even though this
First Amendment provides that it is governed by the law of a specified
state.
Arbitration proceedings will be determined in accordance with the Act, the
applicable rules and procedures for the arbitration of disputes of JAMS or
any successor thereof ("JAMS"), and the terms of this paragraph. In the
event of any inconsistency, the terms of this paragraph shall control.
The arbitration shall be administered by JAMS and conducted in any U.S.
state where real or tangible personal property collateral for this credit
is located or if there is no such collateral, in Maryland. All Claims
shall be determined by one arbitrator; however, if Claims exceed
$5,000,000, upon the request of any party, the Claims shall be decided by
three arbitrators. All arbitration hearings shall commence within 90 days
of the demand for arbitration and close
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within 90 days of commencement and the award of the arbitrator(s) shall be
issued within 30 days of the close of the hearing. However, the
arbitrator(s), upon a showing of good cause, may extend the commencement
of the hearing for up to an additional 60 days. The arbitrator(s) shall
provide a concise written statement of reasons for the award. The
arbitration award may be submitted to any court having jurisdiction to be
confirmed and enforced.
The arbitrator(s) will have the authority to decide whether any Claim is
barred by the statute of limitations and, if so, to dismiss the
arbitration on that basis. For purposes of the application of the statute
of limitations, the service on JAMS under applicable JAMS rules of a
notice of Claim is the equivalent of the filing of a lawsuit. Any dispute
concerning this arbitration provision or whether a claim is arbitrable
shall be determined by the arbitrator(s). The arbitrator(s) shall have the
power to award legal fees pursuant to the terms of the Loan Agreement as
modified by this First Amendment.
This paragraph does not limit the right of the Borrower or the Lender to:
(i) exercise self-help remedies, such as but not limited to, setoff; (ii)
initiate judicial or nonjudicial foreclosure against any real or personal
property collateral; (iii) exercise any judicial or power of sale rights,
or (iv) act in a court of law to obtain an interim remedy, such as but no
limited to, injunctive relief, writ of possession or appointment of a
receiver, or additional or supplementary remedies.
10. WAIVER OF TRIAL BY JURY. BY AGREEING TO BINDING ARBITRATION, BORROWER AND
LENDER IRREVOCABLY AND VOLUNTARILY WAIVE ANY RIGHT THEY MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF A CLAIM. FURTHERMORE, WITHOUT INTENDING IN ANY
WAY TO LIMIT THIS FIRST AMENDMENT TO ARBITRATE, TO THE EXTENT ANY CLAIM IS
NOT ARBITRATED, THE PARTIES IRREVOCABLY AND VOLUNTARILY WAIVE ANY RIGHT
THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF SUCH CLAIM. THIS PROVISION
IS A MATERIAL INDUCEMENT FOR THE PARTIES ENTERING INTO THIS FIRST
AMENDMENT.
11. NO ORAL AGREEMENT. THIS FIRST AMENDMENT, THE LOAN AGREEMENT, AND THE
REVOLVING NOTE, GUARANTY AND SECURITY DOCUMENTS REFERRED TO HEREIN OR IN
THE LOAN AGREEMENT CONSTITUTE THE ENTIRE AGREEMENT OF THE PARTIES
CONCERNING THE SUBJECT MATTER HEREOF AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES. THERE ARE NO UNWRITTEN OR ORAL AGREEMENTS BETWEEN THE PARTIES.
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IN WITNESS WHEREOF, the undersigned have duly executed this First
Amendment as of the day and year first hereinabove set forth.
OCM DIRECT, INC., a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxx, Xx. (SEAL)
-----------------------------------------
Xxxxxxx X. Xxxxx, Xx.
President
COLLEGIATE CARPETS, INC., a Maryland corporation
By: /s/ Xxxxxxx X. Xxxxx, Xx. (SEAL)
-----------------------------------------
Xxxxxxx X. Xxxxx, Xx.
President
CAREPACKAGES, INC., a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxx, Xx. (SEAL)
-----------------------------------------
Xxxxxxx X. Xxxxx, Xx.
President
STUDENT ADVANTAGE, INC., a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxx, Xx.
-----------------------------------------
Xxxxxxx X. Xxxxx, Xx.
President
BANK OF AMERICA, N.A.
By: /s/ Xxxxxxx X. Xxxxxxxxx (SEAL)
-----------------------------------------
Xxxxxxx X. Xxxxxxxxx
Vice President
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GUARANTOR'S CONSENT
The undersigned (the "Guarantor") consents to this First Amendment, agrees
that this First Amendment does not impair the Guarantor's liabilities or
obligations under the Guaranty, and confirms that the Guaranty remains in full
force and effect as to all credit extended under the Revolving Note as amended
by this First Amendment. For purposes of this Consent, the Guaranty means that
certain Guaranty, dated as of February 13, 2002, executed by or on behalf of the
Guarantor. Further, in consideration of this First Amendment, the Guarantor
hereby releases and waives any and all claims of any kind that it may have
against the Lender as of the date of this First Amendment arising out of or
relating to the Revolving Note or the Loan Agreement.
STUDENT ADVANTAGE, INC., a Delaware
corporation
By: /s/ Xxxxxxx X. Xxxxx, Xx. (SEAL)
---------------------------
Xxxxxxx X. Xxxxx, Xx.
President
COMMONWEALTH OF MASSACHUSETTS )
) To-wit:
COUNTY/CITY OF SUFFOLK )
I, Xxxxxxx X. Xxxxxxxx, a Notary Public in and for the jurisdiction
aforesaid, do certify that Xxxxxxx X. Xxxxx, Xx., whose name is signed to the
writing above as President of each of OCM Direct Inc., Collegiate Carpets, Inc.,
CarePackages, Inc., and Student Advantage, Inc., has acknowledged the same
before me in my jurisdiction aforesaid.
Given under my hand and seal this 24th day of January, 2003.
/s/ Xxxxxxx X. Xxxxxxxx
--------------------------------
Notary Public
My Commission Expires: September 4, 2003
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