EXHIBIT 10.1
WAIVER AND FIFTH AMENDMENT TO CREDIT AGREEMENT
This WAIVER AND FIFTH AMENDMENT TO CREDIT AGREEMENT (this "Amendment") is
dated as of October 4, 2001, and is entered into by and among Opinion Research
Corporation, a Delaware corporation ("Parent"), ORC Inc., a Delaware corporation
("ORC"; Parent and ORC are sometimes referred to individually as a "Borrower"
and collectively as the "Borrowers"), ▇▇▇▇▇▇ Financial, Inc., individually as a
Lender and in its capacity as agent (in such capacity, "Agent") for the Lenders
party to the Credit Agreement described below, and the Lenders which are
signatories hereto.
WHEREAS, Agent, Lenders (other than New Lender, which is becoming a party
to the Credit Agreement pursuant to Section 4 of this Amendment) and Borrowers
are parties to a certain Credit Agreement dated as of May 26, 1999 (as such
agreement may from time to time be amended, supplemented or otherwise modified,
the "Credit Agreement"); and
WHEREAS, the parties hereto desire to amend the Credit Agreement by
increasing the amount of the Revolving Loan Commitment and making such other
amendments to the Credit Agreement as are more fully set forth herein.
NOW THEREFORE, in consideration of the mutual conditions and agreements set
forth in the Credit Agreement and this Amendment, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
1. Definitions. Capitalized terms used in this Amendment, unless
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otherwise defined herein, shall have the meaning ascribed to such terms in the
Credit Agreement.
2. Waiver. Upon satisfaction of the conditions precedent set forth in
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Section 5 below, and in reliance upon the representations and warranties of
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Borrowers set forth herein, the Agent and the Lenders hereby waive the Event of
Default under Section 6.1(C) of the Credit Agreement arising from Borrowers'
breach of Section 3.15 of the Credit Agreement that occurred when Borrowers made
a $500,000 payment on July 31, 2001 with respect to the Macro Earn-Out at such
time as Section 3.15 prohibited such payment to be made. This is a limited
waiver and shall not be deemed to constitute a waiver of any other Event of
Default or any future breach of the Credit Agreement or any of the other Loan
Documents. Borrowers agree that they shall remain obligated to comply with the
terms of the Credit Agreement, including, but not limited to, Section 3.15
thereof, and that Agent and Lenders shall not be obligated in the future to
waive any provision of the Credit Agreement or any Loan Document.
3. Amendments. Subject to the conditions set forth below, the Credit
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Agreement is amended as follows:
(a) The Lenders, Agent and Borrowers hereby agree that each Lender's
commitment to make Revolving Loans and the outstanding principal amount of each
Lender's Term Loan shall be amended and restated as set forth on Schedule 4(b)
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hereto. The Lenders, Agent and Borrowers hereby agree that the defined term "Pro
Rata Share" set forth in Section 10.1 of the Credit Agreement shall be deemed to
be amended in all relevant respects to give effect to the terms of the preceding
sentence.
(b) Section 1.1(A) of the Credit Agreement is amended by (i) inserting in
the table of Scheduled Installments a new Scheduled Installment due and payable
on June 1, 2004 in the amount of $11,375,000 and (ii) deleting all Scheduled
Installments due and payable on and after June 30, 2004.
(c) Section 1.1(B)(1) of the Credit Agreement is amended in its entirety
and as so amended shall read as follows:
(B) Revolving Loans. (1) Each Lender agrees, severally and not
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jointly, to lend to Borrowers from the Closing Date to the Expiry Date its
Pro Rata Share of the loans requested by Parent, on behalf of Borrowers, to
be made by Lenders under this subsection 1.1(B), up to an aggregate maximum
for all Lenders of (i) $20,000,000 until the Fifth Amendment Effective Date
and (ii) $24,000,000 on and after the Fifth Amendment Effective Date (as
the same may be reduced and otherwise in effect from time to time
hereunder, the "Revolving Loan Commitment"). Advances or amounts
outstanding under the Revolving Loan Commitment will be called "Revolving
Loans". Revolving Loans may be repaid and reborrowed. The Revolving Loans
shall be repaid in full on the Expiry Date. The "Maximum Revolving Loan
Balance" will be the lower of:
(a) the "Borrowing Base" (as calculated on Exhibit 4.8(E), the
"Borrowing Base Certificate") less the sum of (i) outstanding Risk
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Participation Liability, plus (ii) the Earn-Out Reserve; or
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(b) the Revolving Loan Commitment less the sum of (i) outstanding
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Risk Participation Liability, plus (ii) the Earn-Out Reserve.
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The amount computed under clause (a) of the immediately preceding sentence
is herein referred to as "Borrowing Base Availability". If at any time the
outstanding Revolving Loans exceed the Maximum Revolving Loan Balance (as
it may be deemed increased from time to time pursuant to subsection
1.1(B)(2)), Lenders shall not be obligated to make Revolving Loans and
issue Lender Letters of Credit and Risk Participation Agreements, and
Revolving Loans must be repaid immediately in an amount sufficient to
eliminate any excess. Revolving Loans may be requested in any amount with
one (1) Business Day prior notice required for amounts equal to or greater
than $5,000,000. For amounts less than $5,000,000, written or telephonic
notice must be provided by noon Chicago time on the day on which the Loan
is to be made. All LIBOR Loans require three (3) Business Day's notice.
All Loans requested telephonically must be confirmed in writing within one
(1) Business Day. Neither Agent nor any Lender shall incur any liability
to Borrowers for acting upon any telephonic notice that Agent believes in
good faith to have been given by a duly authorized officer or other person
authorized to borrow on behalf of Borrowers.
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The parties hereto hereby agree that Borrowers shall be permitted to borrow
up to $5,000,000 of Revolving Loans on the Fifth Amendment Effective Date
to satisfy all outstanding obligations with respect to the Macro Earn-Out.
(d) The definition of "Base Rate Margin" in Section 1.2(A) of the Credit
Agreement shall be amended in its entirety and as so amended shall read as
follows:
"Base Rate Margin" shall mean, as of October 4, 2001, two percent
(2.00%) per annum.
(e) The definition of "LIBOR Margin" in Section 1.2(A) of the Credit
Agreement shall be amended in its entirety and as so amended shall read as
follows:
"LIBOR Margin" shall mean, as of October 4, 2001, three and one-
quarter percent (3.25%) per annum.
(f) Section 1.2(A) of the Credit Agreement is amended by deleting in its
entirety from such section each of the following: (i) the definition of "Total
Indebtedness to Adjusted EBITDA Ratio", (ii) the Pricing Table and (iii) the
paragraph immediately following the Pricing Table.
(g) Subsection (C) of Section 1.3 of the Credit Agreement is amended by
inserting the parenthetical "(including reasonable attorneys' fees and legal
expenses, which may consist of fees and legal expenses of outside counsel
retained by Agent or any Lender or the allocated costs of in-house counsel of
Agent or any Lender)" immediately after the phrase "Borrowers' agree to promptly
pay all fees, costs and expenses" set forth in the second sentence thereof.
(h) Section 3.1(B) of the Credit Agreement is amended by deleting the
phrase "amount of all Loans" in such section and inserting in lieu thereof the
phrase "amount of all such intercompany Indebtedness".
(i) Section 3.5 of the Credit Agreement is amended by (i) deleting the
current subsection (C) thereof in its entirety and (ii) redesignating subsection
(D) thereof as subsection (C).
(j) Subsection (B) of Section 4.5 of the Credit Agreement is amended in
its entirety and as so amended shall read as follows:
(B) Borrowers shall not permit Total Interest Coverage for any twelve
(12) month period ending on the last day of any calendar quarter ending on
the date set forth below to be less than the ratio set forth below for such
period:
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Period Ending Ratio
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December 31, 2000 through December 31, 2001 2.50
March 31, 2002 & the last day
of each calendar quarter thereafter 2.75
(k) Section 4.6 of the Credit Agreement is amended in its entirety and as
so amended shall read as follows:
4.6 Senior Indebtedness to Adjusted EBITDA Ratio. Borrowers shall not
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permit the ratio of Senior Indebtedness calculated as of the last day of
any calendar quarter ending during any of the periods set forth below to
Adjusted EBITDA for the twelve (12) month period ending on such day to be
greater than the amount set forth below for such period.
Period Ending Amount
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June 30, 1999 through September 30, 2000 3.00
December 31, 2000 through December 31, 2001 2.75
March 31, 2002 through September 30, 2002 2.50
December 31, 2002 & the last day of each
calendar quarter thereafter 2.25
"Senior Indebtedness" shall be calculated as illustrated on Exhibit 4.8(C).
(l) Subsection (B) of Section 4.8 of the Credit Agreement shall be amended
by deleting the "." at the end of such subsection and inserting in lieu thereof
the following:
and (4) commencing with the fiscal year of Borrowers ending December
31, 2001, an "Auditor's Privity" letter from the Certified Public
Accountants described in the immediately preceding clause (3), such letter
to be in form and substance reasonably acceptable to Agent and addressed to
Agent and Lenders.
(m) Clause (a) of Section 8.1 of the Credit Agreement shall be amended in
its entirety and as so amended shall read as follows:
(a) such Lender (excluding ▇▇▇▇▇▇) shall first obtain the written
consent of Agent, which consent shall not be unreasonably withheld and,
provided no Default or Event of Default has occurred and is continuing,
Borrowers (which consent of Borrowers shall not be unreasonably withheld or
delayed); provided Borrowers' consent shall not be required with respect to
an assignment by a Lender to an affiliate thereof;
(n) Section 9.13 of the Credit Agreement shall be amended by inserting the
phrase "or Affiliates" immediately after the phrase "or such Lender's assignees
or participants" set forth in such section.
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(o) The definition of "Earn-Out Reserve" set forth in Section 10.1 of the
Credit Agreement is amended in its entirety and as so amended shall read as
follows:
"Earn-Out Reserve" means as of any calculation date, the aggregate
amount calculated with respect to the Macro Earn-Out as set forth herein.
Calculations of the Earn-Out Reserve shall be made as of the earlier of (a)
each date on which the amount of an earn-out payment with respect to the
Macro Earn-Out is determinable or (b) each date which is forty-five (45)
days prior to the date on which such payment is to be made. The Earn-Out
Reserve shall equal the amount of the earn-out payment to be made or, if
the amount is in dispute, the maximum amount which may be payable in
respect of the Macro Earn-Out. At such time as a payment is made in
respect of the Macro Earn-Out, the Earn-Out Reserve shall be reduced on a
dollar for dollar basis.
(p) The definition of "Expiry Date" set forth in Section 10.1 of the
Credit Agreement is amended by deleting the date "May 31, 2005" in clause (c) of
said definition and inserting in lieu thereof the date "June 1, 2004".
(q) Section 10.1 of the Credit Agreement shall be amended by adding
thereto the new defined terms "Fifth Amendment" and "Fifth Amendment Effective
Date" in proper alphabetical order, such definitions to read as follows:
"Fifth Amendment" means that certain Waiver and Fifth Amendment to
Credit Agreement dated as of October 4, 2001 by and among Agent, Lenders
(including the Exiting Lender and the New Lender thereto) and Borrowers.
"Fifth Amendment Effective Date" means the date upon which all of the
conditions precedent to the effectiveness of the Fifth Amendment shall have
been satisfied."
(r) The Credit Agreement and each Loan Document shall be generally amended
by deleting from such agreements the term "ProTel Earn-Out" in each instance
where such term is used in such agreements.
(s) Exhibits 4.8(C) and 4.8(E) to the Credit Agreement shall be deleted in
their entirety and replaced with Exhibits 4.8(C) and 4.8(E) attached hereto.
4. Lender Joinder.
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(a) PNC BANK, NATIONAL ASSOCIATION, a national banking association (the
"New Lender") and the Lenders, other than the New Lender (the "Existing
Lenders"), hereby agree that, upon giving effect to the assignments and
acceptances described below, (i) the New Lender shall be a party to the Credit
Agreement and shall have all of the rights and obligations under the Loan
Documents, and shall be deemed to have made all of the covenants and agreements
contained in the Loan Documents, arising out of or otherwise related to the
assigned interests in the Loans, and (ii) the Existing Lenders shall be
absolutely released from any of such obligations, covenants and agreements
assumed or made by the New Lender in respect of the assigned interests in the
Loans. The New Lender hereby acknowledges and agrees that the agreement set
forth in this Section 4 is expressly made for the benefit of Borrowers, Agent
and the Existing Lenders and their respective successors and permitted assigns.
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(b) Each Lender, including without limitation the New Lender, hereby
agrees that the Lenders' Pro Rata Shares of the Revolving Loan Commitment and
the Term Loan, in each case effective upon the effectiveness of the amendments
set forth above, shall be as set forth on Schedule 4(b) hereto. To the extent
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necessary to give effect to the provisions of the preceding sentence, the
Existing Lenders hereby agree on the date hereof to sell and to assign to each
other Lender (including, without limitation, the New Lender), without recourse,
representation or warranty (except as set forth below), and each such other
Lender hereby purchases and assumes from such Existing Lenders, a percentage
interest in the Revolving Loan Commitment and the Term Loan in amounts required
to give effect to the Pro Rata Shares set forth on Schedule 4(b) hereto. The
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Lenders hereby agree, on the effective date of the amendments set forth above,
to effect such inter-Lender transfers to give effect to the respective Pro Rata
Shares set forth on such Schedule 4(b). The Credit Agreement is hereby amended
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in all relevant respects to give effect to the respective Pro Rata Shares set
forth on Schedule 4(b). As a result of such assignments and acceptances, the
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Existing Lenders are absolutely released from any of such obligations, covenants
and agreements, to the extent of their assigned shares of the Term Loans and the
Revolving Loan Commitment (it being understood that Finova Capital Corporation
(the "Exiting Lender") is hereby assigning all of its interests with respect to
the Revolving Loan Commitment and outstanding principal amount of Term Loans of
such Lender, and upon such assignment Finova Capital Corporation shall no longer
be deemed to be a Lender under the Credit Agreement). Interest accrued on the
Loans transferred as contemplated by this paragraph and fees accrued in respect
of the commitments transferred as contemplated by this paragraph shall accrue to
the transferor Lender through the date such transfer is actually made by payment
by the transferee Lender for such Loans transferred and such interest and fees
shall accrue to the transferee Lender thereafter.
(c) Each Existing Lender represents and warrants that it is the legal and
beneficial owner of the portion of the Loans assigned above, free and clear of
any adverse claim.
(d) Neither the Existing Lenders nor the Agent makes any representation or
warranty to the New Lender with respect to, and shall not be responsible to the
New Lender for, the execution, effectiveness, genuineness, validity,
enforceability, collectibility or sufficiency of any of the Loan Documents or
for any representations, warranties, recitals or statements made therein or made
in any written or oral statements or in any financial or other statements,
instruments, reports or certificates or any other documents furnished or made by
or on behalf of Borrowers or any other Loan Party in connection with the Loan
Documents and the transactions contemplated thereby or for the financial
condition or business affairs of Borrowers or any other Loan Party, nor shall
the Existing Lenders or the Agent be required to ascertain or inquire as to (i)
the performance or observance of any of the terms, conditions, provisions,
covenants or agreements contained in any of the Loan Documents, (ii) the use of
the proceeds of the Loans, (iii) the use of the Lender Letters of Credit or Risk
Participation Liability or (iv) the existence or possible existence of any Event
of Default or Default.
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(e) The New Lender represents and warrants that it satisfies any
eligibility requirements to be a Lender under the Credit Agreement; that it is
not a foreign person (i.e., a person other than a United States person for
United States Federal income tax purposes); that it has experience and expertise
in the making or the purchasing of loans such as the Loans; that it has acquired
an interest in the Loans for its own account and without any present intention
of selling all or any portion of such interest; and that it has received,
reviewed and approved a copy of the Credit Agreement (including all Exhibits and
Schedules thereto) and copies of all other Loan Documents which it has
requested.
(f) The New Lender represents and warrants that it has received such
financial information regarding Borrowers and the other Loan Parties as such New
Lender has requested, that it has made its own independent investigation of the
financial condition and affairs of Borrowers and the other Loan Parties in
connection with the assignment evidenced by this Amendment, and that it has made
and shall continue to make its own appraisal of the creditworthiness of
Borrowers and the other Loan Parties. Neither Existing Lenders nor Agent shall
have any duty or responsibility, either initially or on a continuing basis, to
make any such investigation or any such appraisal on behalf of the New Lender or
to provide the New Lender with any other credit or other information with
respect thereto, whether coming into its possession before the effective date of
this Amendment or at any time or times thereafter, and neither the Existing
Lenders nor Agent shall have any responsibility with respect to the accuracy of
or the completeness of any information provided to the New Lender.
(g) Each Lender party to this Amendment represents and warrants to the
other Lenders and Agent that it has full power and authority to enter into this
Amendment and to perform its obligations hereunder in accordance with the
provisions hereof, that this Amendment has been duly authorized, executed and
delivered by such party and that this Amendment constitutes a legal, valid and
binding obligation of such party, enforceable against such party in accordance
with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally and by general principles of equity.
(h) Any notice or other communication required or permitted to be given to
the New Lender shall be given in the manner set forth in the Credit Agreement
and addressed as follows:
PNC BANK, NATIONAL ASSOCIATION
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
5. Conditions Precedent. The effectiveness of this Amendment is subject
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to the following conditions precedent:
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(a) Lenders and Borrowers shall have executed and delivered (and Borrowers
covenant to execute and deliver) this Amendment, and Borrowers and the other
Loan Parties shall have executed and delivered to Agent such other documents and
instruments as Agent may have reasonably required;
(b) All proceedings taken in connection with the transactions contemplated
by this Amendment and all documents, instruments and other legal matters
incident thereto shall be satisfactory to Agent and its legal counsel;
(c) Both before and after giving effect to the transactions contemplated
in this Amendment, no Default or Event of Default shall have occurred and be
continuing (other than the Event of Default described in Section 2 hereof);
(d) There shall have occurred no material adverse change in the business,
operations, financial condition, profits or prospects of Borrowers and their
Subsidiaries, or in the Collateral since December 31, 2000;
(e) Borrowers shall have paid to the Agent, for the benefit of the Lenders
(other than the New Lender and the Exiting Lender) who have executed this
Amendment a consent fee in the amount of $187,950.00, such fee to be payable to
the Lenders (other than the New Lender and the Exiting Lender) in the following
amounts: (i) $60,412.50 to be paid to ▇▇▇▇▇▇ Financial, Inc., (ii) $55,937.50 to
be paid to First Union National Bank, (iii) $35,800.00 to be paid to ▇▇▇▇▇▇▇
▇▇▇▇▇ Business Financial Services, Inc. and (iv) $35,800.00 to be paid to Fleet
National Bank; and
(f) payment of all fees, costs and expenses as agreed to between Borrower
and each Lender or Agent as set forth in such Lender's or Agent's respective fee
letter with Borrower.
6. Representations and Warranties. To induce Agent and Lenders to enter
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into this Amendment, each Borrower represents and warrants to Agent and Lenders:
(a) that the execution, delivery and performance of this Amendment has
been duly authorized by all requisite corporate action on the part of each
Borrower and that this Amendment has been duly executed and delivered by each
Borrower; and
(b) that each of the representations and warranties set forth in the
Credit Agreement (other than those which, by their terms, specifically are made
as of certain date prior to the date hereof) and in each Loan Document are true
and correct in all material respects as of the date hereof.
7. Severability. Any provision of this Amendment held by a court of
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competent jurisdiction to be invalid or unenforceable shall not impair or
invalidate the remainder of this Amendment and the effect thereof shall be
confined to the provision so held to be invalid or unenforceable.
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8. References. Any reference to the Credit Agreement contained in any
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document, instrument or agreement executed in connection with the Credit
Agreement shall be deemed to be a reference to the Credit Agreement as modified
by this Amendment.
9. Counterparts. This Amendment may be executed in one or more
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counterparts, each of which shall constitute an original, but all of which taken
together shall be one and the same instrument.
10. Ratification. The terms and provisions set forth in this Amendment
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shall modify and supersede all inconsistent terms and provisions of the Credit
Agreement and shall not be deemed to be a consent to the modification or waiver
of any other term or condition of the Credit Agreement. Except as expressly
modified and superseded by this Amendment, the terms and provisions of the
Credit Agreement are ratified and confirmed and shall continue in full force and
effect. The execution, delivery and effectiveness of this Agreement shall not
operate as a waiver of any right, power or remedy of Agent or any Lender under
the Credit Agreement or any Loan Document to which Agent or such Lender is a
party nor constitute a waiver of any provision in or Event of Default (now or
hereafter existing) under the terms of the Credit Agreement or any Loan Document
(other than the waiver provided for in Section 2 above). Agent's and Lenders'
agreement to the terms of this Amendment shall not be deemed to establish or
create a custom or course of dealing among Borrowers, Agent and Lenders.
[rest of page intentionally left blank; signature page follows]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed under seal and delivered by their respective duly authorized
officers on the date first written above.
▇▇▇▇▇▇ FINANCIAL, INC., OPINION RESEARCH CORPORATION,
as Agent and Lender a Delaware corporation
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
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Title: Vice President Title: EVP & Director of Finance
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FIRST UNION NATIONAL BANK, ORC INC.,
as a Lender a Delaware corporation
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇ Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
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Title: Vice President Title: President
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FLEET NATIONAL BANK FINOVA CAPITAL CORPORATION,
as a Lender as Exiting Lender
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Title: Assistant Vice President Title: VP, Senior Credit Officer
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▇▇▇▇▇▇▇ ▇▇▇▇▇ BUSINESS FINANCIAL SERVICES, INC.,
as a Lender
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
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Title: Assistant Vice President
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PNC BANK, NATIONAL ASSOCIATION,
as New Lender
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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Title: Senior Vice President
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