Exhibit 10.31
FIRST AMENDMENT TO SENIOR
SUBORDINATED NOTE PURCHASE AGREEMENT
THIS FIRST AMENDMENT TO SENIOR
SUBORDINATED NOTE PURCHASE AGREEMENT (this “First
Amendment”) is entered into as of January 18, 2006 among
(i) The Royal Bank of Scotland PLC (“RBOS”),
acting in its capacity as the sole current Lender and as Agent for
the Lender pursuant to the hereinafter referenced Note Purchase
Agreement; and (ii) Opinion Research Corporation, a Delaware
corporation, MACRO International, Inc., a Delaware corporation,
Social and Health Services, Ltd., a Maryland corporation, ORC
Holdings, Ltd., an English company, O.R.C. International Ltd., an
English company, and any other “Borrower” party to the
Note Purchase Agreement from time to time (the
“Borrowers”). 1 Capitalized terms used but not
defined herein shall have the respective meanings set forth in the
Note Purchase Agreement.
W I T N E S
S E T H :
WHEREAS, Borrowers, Agent and Lender
are parties to that certain Senior Subordinated Note Purchase
Agreement dated as of July 29, 2005 (the “Note Purchase
Agreement”);
WHEREAS, the Borrowers have
requested and the Lenders have agreed to revise certain of the
financial covenants of the Borrowers set forth in the Note Purchase
Agreement, as hereinafter provided, subject to the terms and
conditions hereinafter set forth.
NOW THEREFORE, in consideration of
the agreements set forth herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Recitals . The foregoing
recitals are hereby incorporated herein by this reference and made
a part hereof, with the same force and effect as if fully set forth
herein.
2. The definition of
“EBITDA” set forth in the Section of the Note Purchase
Agreement titled “Certain Definitions” is hereby
deleted in its entirety and replaced with the following:
““EBITDA” shall
mean, as of the date of any determination, the consolidated net
income of the Parent Company, including all Borrowers and
Non-Borrower Subsidiaries, plus interest expense,
plus taxes, plus depreciation expense, plus
amortization expense, plus any non-cash, non-recurring
charges against
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Note: The membership interests in
ORC ProTel, LLC, a Delaware limited liability company, were sold by
Opinion Research Corporation on December 31, 2005, and ORC
ProTel, LLC is no longer a Borrower under the Note Purchase
Agreement.
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income approved in writing by the
Agent, plus any non-cash stock-option expenses ,
minus any non-cash gain (to the extent included in
determining net income), minus any dividends paid in
accordance with Section 7.8(a) of this Agreement to the extent
not deducted from net income, all as determined on a rolling four
(4) quarter consolidated basis in accordance with
GAAP.”
3. Sections 6.15(b) and 6.15(c) set
forth in the Note Purchase Agreement are hereby deleted in their
entirety, and the following substituted in lieu thereof:
“(b) Interest Coverage
Ratio . The Borrowers and the Non-Borrower Subsidiaries will
maintain an Interest Coverage Ratio, measured on the last day of
each fiscal quarter throughout the term of the Loan of: (i) at
least 2.10 to 1.00 for each fiscal quarter up to and including the
fiscal quarter ending March 31, 2006; (ii) at least 1.70
to 1.00 for the fiscal quarter ending June 30, 2006 up to and
including the fiscal quarter ending March 31, 2007; and
(iii) at least 2.10 to 1.00 for the fiscal quarter ending
June 30, 2007 and each fiscal quarter thereafter. For purposes
of the foregoing, “Interest Coverage Ratio” shall mean,
for each measurement period, the ratio of EBITDA to the
Borrowers’ and the Non-Borrower Subsidiaries’ cash
interest expense during such period.”
“(c) Leverage Ratio .
The Borrowers and the Non-Borrower Subsidiaries will maintain on a
consolidated basis for each quarter ending during the periods
specified below, a Leverage Ratio of not more than the
following:
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Maximum
Leverage Ratio
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December 31, 2005 through March 31,
2006
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5.30 to 1.00
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From April 1, 2006 through
September 30, 2006
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5.00 to 1.00
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From and after October 1, 2006
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4.70 to 1.00
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For purposes of the foregoing,
“Leverage Ratio” shall mean, for each measurement
period, the ratio of the Borrower’s and the Non-Borrower
Subsidiaries’ Total Debt to EBITDA. The Leverage Ratio shall
be measured on the last day of each fiscal quarter throughout the
term of the Loan.”
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4. Solely for the purpose of
calculating the financial covenants set forth in Section 6.15
of the Note Purchase Agreement for the fiscal quarters ending
December 31, 2005, March 31, 2006 and June 30,
2006, the Lenders hereby consent to the Borrowers adding-back the
Operational Expenses and Losses (hereinafter defined) to the
Borrowers’ EBITDA (without duplication) for the fiscal
quarters ending December 31, 2005, March 31, 2006
and June 30, 2006, as applicable, and for any period which
includes such fiscal quarter. The consent by the Lenders to the
above-referenced add-back to the Borrowers’ EBITDA
constitutes a one-time waiver of the requirements of the Note
Purchase Agreement specific to the Operational Changes (hereinafter
defined). Nothing contained herein shall constitute a waiver of any
other provision of the Note Purchase Agreement or any other Loan
Document. For purposes of this paragraph, (i) the term
“Operational Changes” refers to the divestiture of ORC
ProTel, LLC and the discontinued operations of the Borrowers in
Mexico and Korea; and (ii) the term “Operational
Expenses and Losses” means, collectively, (a) those
certain expenses incurred in connection with the Operational
Changes, (b) the operating profits and losses incurred by ORC
ProTel, LLC during 2005, (c ) the operating profits and losses of
the Borrowers in Mexico and Korea during 2005 and 2006, and
(d) those certain losses incurred in connection with the sale
of ORC ProTel, LLC, all of which (i.e., all of the items set forth
in subsections (a) through (d)) on a consolidated basis, will
equal no more than Four Million Five Hundred Thousand and No/100
Dollars ($4,500,000.00).
5. Simultaneously with the execution
of this First Amendment (and as a condition precedent to the
effectiveness of this First Amendment), the Agent and its counsel
shall have received (i) a fully executed copy of that certain
Fourth Modification to Business Loan and Security Agreement and
Other Loan Documents dated as of May 4, 2004 (as amended, the
“Loan and Security Agreement”), executed by Citizens
Bank of Pennsylvania , as agent for certain lender parties thereto
and the Borrowers (the “Citizens Modification”), in
form and substance satisfactory to the Agent and its
counsel