SIXTH AMENDMENT TO CREDIT AGREEMENT
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THIS SIXTH AMENDMENT, dated this day of January, 1999, is between TOTAL
RESEARCH CORPORATION, a Delaware corporation (the "Borrower"); and SUMMIT BANK,
a New Jersey bank formerly known as United Jersey Bank (the "Bank").
PRELIMINARY STATEMENT
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A. The parties hereto entered into the Amended and Restated Credit
Agreement dated as of December 28, 1995 (the "Original Agreement"), as the same
has heretofore been amended by the Amendment to Amended and Restated Credit
Agreement dated as of October 10, 1996 (the "First Amendment") and the Second
Amendment to Amended and Restated Credit Agreement dated as of February 10, 1998
(the "Second Amendment") and the Third Amendment to Amended and Restated Credit
Agreement dated as of July 17, 1998 (the "Third Amendment"), and the Fourth
Amendment dated as of August 18, 1998 (the "Fourth Amendment"), and the Fifth
Amendment dated as of September 18, 1998 (the "Fifth Amendment"). The Original
Agreement, as amended by the First, Second, Third, Fourth and Fifth Amendments,
shall hereinafter be called the "Credit Agreement".
B. The Borrower and the Bank wish to extend the termination dates of
both the revolving line of credit and the equipment line of credit under the
Credit Agreement from December 29, 1998 to September 30, 1999, and make certain
other modifications to the terms and conditions of the Credit Agreement.
NOW, THEREFORE, in consideration of the premises, and of the mutual
promises and covenants set forth herein, the parties hereto agree as follows:
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1. Definitions.
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(A) All capitalized terms used but not defined herein shall
have the meanings ascribed to them in the Credit Agreement.
(B) As used herein, the following terms shall have the
respective meanings set forth below:
"Agreement" means the Credit Agreement, as modified hereby,
and as the same may hereafter be amended from time to time.
"Facility B Expiration Date" is defined in Section 2 below.
"Facility C Commitment Amount" means the sum of $2,500,000.
"Facility C Maturity Date" is defined in Section 3 below.
"Facility C Note" means the Facility C Note dated the date
hereof from the Borrower to the Bank in the maximum principal
amount of $2,500,000, as the same may hereafter be amended,
modified or replaced from time to time.
2. Extension and Modification of Facility B Loan. (a) In order to
extend the expiration of the equipment loan facility known as the Facility B
Loan under the Credit Agreement, Section 2.02(A) of the Credit Agreement is
hereby modified and amended such that the term "Facility B Expiration Date"
shall hereafter mean September 30, 1999.
(b) In order to conform the Floating Rates and LIBOR Option terms and
conditions applicable to the Facility B Loans, Section 2.02(C) of the Credit
Agreement is modified and amended such that the same Floating Rate Margin and
LIBOR Margin tables set forth below in Sections (3)(c) and (d) of this Sixth
Amendment shall hereafter apply to the interest rate provisions of any Facility
B Loan made hereafter.
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3. Extension of Maturity and Modification of Facility C Loan. (a) In
order to extend the maturity date of the revolving line of credit known as the
Facility C Loan under the Credit Agreement, Section 2.03(A) of the Credit
Agreement is hereby modified and amended such that the term "Facility C Maturity
Date" shall hereafter mean September 30, 1999.
(b) In order to eliminate the borrowing base limitation heretofore
applicable to the Facility C Commitment Amount, Section 2.03(A) of the Credit
Agreement is hereby modified to delete therefrom the clause reading " the lesser
of:(i) sixty percent (60%) of Eligible Accounts; or (ii). . ." Any and all
provisions of the Credit Agreement requiring the Borrower to furnish borrowing
base certificates to the Bank are hereby deleted.
(c) In order to modify the Floating Rate Margin adjustment provisions
on the Facility C Loan, Section 2.03(D) of the Credit Agreement is hereby
amended to replace the Floating Rate Margin table therein with the following:
Ratio of Total Liabilities
to Tangible Net Worth Margin
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2 to 1 or greater 0%
Between 1.5 to 1 and 2 to 1 (-1/4%)
Below 1.5 to 1 (-1/2%)
(d) In order to modify the LIBOR Margin adjustment provisions on the
Facility C Loan, Section 2.03(E)(vi) of the Credit Agreement is hereby amended
to replace the LIBOR Margin table therein with the following:
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Ratio of Total Liabilities
to Tangible Net Worth Margin
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2 to 1 or greater 2.50%
Between 1.5 to 1 and 2 to 1 2.25%
Between 1 to 1 and 1.5 to 1 2.00%
Below 1.00 to 1 1.75%
4. Modification of Letter of Credit Fees. Section 2.07 of the Credit
Agreement is hereby amended to reduce the fee payable with respect to standby
letters of credit which may be issued from time to time in the future from 2% of
the stated amount to 1% of the stated amount of each such letter of credit.
5. Modification of Certain Reporting Requirements. (a) Section 5.03(e)
of the Credit Agreement, which required quarterly work-in-process reports, is
hereby deleted and such reports are no longer required.
(b) Section 5.03(f) of the Credit Agreement, which required that the
Borrower furnish monthly account receivable aging reports and job status reports
to the Bank, is hereby deleted and such reports are no longer required.
(c) Section 6(c) of the Second Amendment, which permitted annual audits
by the Bank of the Company's books and records, is hereby deleted and no audits
hereafter shall be required.
6. Modification of Financial Covenants. The following subsections of
Section 5.03 of the Credit Agreement are hereby amended to read as follows:
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"(j) Maintenance of Tangible Net Worth. Permit
consolidated Tangible Net Worth of the Borrower to be less than $1,500,000 as of
the end of any fiscal quarter beginning with the fiscal quarter ended December
31, 1998.
(k) Maintenance of Ratio of Total Liabilities to
Tangible Net Worth. Permit the ratio of consolidated Total Liabilities to
consolidated Tangible Net Worth of the Borrower to be more than 6.0 to 1 as of
the end of any fiscal quarter, beginning with the fiscal quarter ended December
31, 1998.
(l) Debt Service Coverage Ratio. Permit the ratio
of (i) the sum of net income after taxes, plus depreciation, amortization and
interest expense for any fiscal year, to (ii) the sum of current maturities of
long-term Indebtedness as of the end of such fiscal year plus interest expense
for such fiscal year to be less than 1.50 to 1 on a consolidated basis.
(m)Current Ratio. Permit the ratio of consolidated
Current Assets to consolidated Current Liabilities as of the end of any fiscal
quarter, beginning with the fiscal quarter ended December 31, 1998, to be less
than .80 to 1.
(n) Quick Ratio. Permit the ratio of: (i) the sum
of consolidated cash and equivalents plus consolidated accounts receivable, to
(ii) consolidated Current Liabilities, as of the end of any fiscal quarter,
beginning with the fiscal quarter ended December 31, 1998, to be less than .60
to 1."
7. Estoppel. The Borrower represents, warrants and agrees to and
with the Bank as follows:
(i) there is currently no outstanding principal balance of
the Facility C Note;
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(ii) that each of the Loan Documents is in full force and
effect;
(iii) that this Amendment and the Facility C Note have
been duly authorized, executed and delivered by the Borrower, and constitutes
legal, valid and binding obligations of each of the Borrower, enforceable
against it in accordance with their respective terms; and
(iv) that the Borrower has no offset, defense or counterclaim
with respect to any of its obligations under any of the Loan Documents (any such
offset, defense or counterclaim as may now exist being hereby irrevocably waived
by the Borrower).
8. Continuing Effect; Entire Agreement. Except to the extent expressly
modified hereby, all the terms and conditions of the Loan Documents shall
continue in full force and effect. This Sixth Amendment and all other
instruments, agreements and certificates executed and delivered by the parties
in connection herewith and therewith, constitutes the entire agreement and
understanding of the parties hereto with respect to the modification
contemplated hereby of any and all of the Loan Documents, and this Sixth
Amendment supersedes all prior and contemporaneous discussions, agreements and
understandings, whether written or oral, with respect to the subject matter
hereof.
9. Continuing Priority. This Agreement is not intended to, and shall
not, adversely affect or impair in any way the continuing priority of the lien
of the security interests heretofore granted to the Bank as security for the
Obligations.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
WITNESS OR ATTEST: SUMMIT BANK
By:/s/ Xxxxx X. Xxxxx By:/s/Xxxxxxx X. XxXxxxx
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XXXXX X. XXXXX XXXXXXX X. XXXXXXX
ATTEST: TOTAL RESEARCH CORPORATION
By:/s/Xxxxxxx X. Xxxxxx, Xx. By:/s/ Xxxx Xxxxxxx
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XXXXXXX X. XXXXXX, XX. XXXX XXXXXXX
