EXHIBIT 10.1

[PNC BANK LETTERHEAD]

November 16, 2000

inTEST Corporation
Seven Esterbrook Lane
Cherry Hill, NJ 08003
Attention: Hugh Regan

Re:     Renewal, Restatement and Increase of Committed Line of Credit

Dear Hugh:

We are pleased to inform you that PNC Bank, National Association (the "Bank")
has approved your request for the renewal, restatement and increase of a
committed line of credit (the "Loan") to inTEST Corporation, inTEST Sunnyvale
Corporation, Temptronic Corporation, inTEST Investments, Inc., inTEST Licensing
Corp. and inTEST IP Corp. (collectively, the "Borrower"). This letter agreement
amends, restates and replaces the existing Amended and Restated Loan Agreement
between the Bank and inTEST Corporation dated June 30, 1996 (as amended, the
"Existing Loan Agreement"). We look forward to this opportunity to help you meet
the financing needs of your business. All the details regarding your Loan are
outlined in the following sections of this letter. If these terms are
satisfactory, please follow the instructions for proceeding with your Loan
provided at the end of this letter.

1.   Facility and Use of Proceeds. This is a committed revolving line of credit
under which the Borrower may request and the Bank, subject to the terms and
conditions of this letter, will make advances to the Borrower from time to time
until the Expiration Date, in an amount in the aggregate at any time outstanding
not to exceed $5,000,000.00 (the "Line of Credit"). The "Expiration Date" means
June 30, 2001, or such later date as may be designated by the Bank by written
notice to the Borrower. Advances under the Line of Credit will be used for
working capital or other general business purposes of the Borrower.

The Borrower may request that the Bank, in lieu of cash advances, issue standby
letters of credit (individually, a "Letter of Credit" and collectively the
"Letters of Credit") under the Line of Credit in an amount not to exceed
$500,000 in the aggregate and having expiration dates not to exceed one (1)
year. The availability of advances under the Line of Credit shall be reduced by
the face amount of each Letter of Credit issued and outstanding (whether or not
drawn). Each payment by the Bank under a Letter of Credit shall in the Bank's
discretion constitute an advance of principal under the Line of Credit and shall
be evidenced by the Note (as defined below). The Letters of Credit shall be
governed by one or more reimbursement agreements executed by the Borrower (the
"Reimbursement Agreement"). Each request for the issuance of a Letter of Credit
must be accompanied by the Borrower's execution of an application on the Bank's

inTEST Corporation
November 16, 2000
Page 2

standard forms, together with all supporting documentation. Each Letter of
Credit will be issued in the Bank's sole discretion and in a form acceptable to
the Bank. The Borrower shall pay the Bank's standard issuance fee on the face
amount of each Letter of Credit upon issuance, together with such other
customary fees, commissions and expenses therefor as shall be required by the
Bank. This letter is not a pre-advice for the issuance of a letter of credit and
is not irrevocable.

2.   Note. The obligation of the Borrower to repay advances under the Line of
Credit shall be evidenced by a promissory note (the "Note") in form and content
satisfactory to the Bank.

This letter (the "Letter Agreement"), the Note and the other loan documents
delivered pursuant hereto will constitute the "Loan Documents." Capitalized
terms not defined herein shall have the meaning ascribed to them in the Loan
Documents.

3.   Interest Rate. Interest on the unpaid balance of the Line of Credit
advances will be charged at the rates, and be payable on the dates and times,
set forth in the Note evidencing the Loan.

4.   Repayment. Subject to the terms and conditions of this letter, the Borrower
may borrow, repay and reborrow under the Line of Credit until the Expiration
Date, on which date the outstanding principal balance and any accrued but unpaid
interest shall be due and payable. Interest will be due and payable on a monthly
basis, and will be computed on the basis of a year of 360 days and paid on the
actual number of days elapsed.

5.   Cross-Default. The Loan will be cross-defaulted with all other present and
future Obligations of the Borrower to the Bank.

6.   Covenants. Unless compliance is waived in writing by the Bank or until
payment in full of the Loan and termination of the commitment for the Line of
Credit:

    (a)   The Borrower will promptly submit to the Bank such information
relating to the Borrower's affairs (including but not limited to annual
financial statements and tax returns for the Borrower and any guarantor) or any
security for the Loan as the Bank may reasonably request.

    (b)   The Borrower will not make or permit any change in the nature of its
business as carried on as of the date of this Letter Agreement or in its senior
management or equity ownership.

    (c)   The Borrower will notify the Bank in writing of the occurrence of an
Event of Default or an act or condition which, with the passage of time, the
giving of notice or both might become an Event of Default.

inTEST Corporation
November 16, 2000
Page 3

    (d)   The Borrower will comply with the financial and other covenants
included in Exhibit "A" hereto.

7.   Representations and Warranties. To induce the Bank to extend the Loan and
upon the making of any advance to the Borrower under the Line of Credit, the
Borrower represents and warrants as follows:

    (a)   The Borrower's latest financial statements provided to the Bank are
true, complete and accurate in all material respects and fairly present the
financial condition, assets and liabilities, whether accrued, absolute,
contingent or otherwise, and the results of the Borrower's operations for the
period specified therein. The Borrower's financial statements have been prepared
in accordance with generally accepted accounting principles consistently applied
from period to period subject in the case of interim statements to normal
year-end adjustments. Since the date of the latest financial statements provided
to the Bank, the Borrower has not suffered any damage, destruction or loss which
has materially adversely affected its business, assets, operations, financial
condition or results of operations.

    (b)   There are no actions, suits, proceedings or governmental
investigations pending or, to the knowledge of the Borrower, threatened against
the Borrower which could result in a material adverse change in its business,
assets, operations, financial condition or results of operations and there is no
basis known to the Borrower or its officers, directors or shareholders for any
such action, suit, proceedings or investigation.

    (c)   The Borrower has filed all returns and reports that are required to be
filed by it in connection with any federal, state or local tax, duty or charge
levied, assessed or imposed upon the Borrower or its property, including
unemployment, social security and similar taxes and all of such taxes have been
either paid or adequate reserve or other provision has been made therefor.

    (d)   The Borrower is duly organized, validly existing and in good standing
under the laws of the state of its incorporation or organization and has the
power and authority to own and operate its assets and to conduct its business as
now or proposed to be carried on, and is duly qualified, licensed and in good
standing to do business in all jurisdictions where its ownership of property or
the nature of its business requires such qualification or licensing.

    (e)   The Borrower has full power and authority to enter into the
transactions provided for in this Letter Agreement and has been duly authorized
to do so by all necessary and appropriate action and when executed and delivered
by the Borrower, this Letter Agreement and the other Loan Documents will
constitute the legal, valid and binding obligations of the Borrower, enforceable
in accordance with their terms.

inTEST Corporation
November 16, 2000
Page 4

    (f)   There does not exist any default or violation by the Borrower of or
under any of the terms, conditions or obligations of: (i) its organizational
documents; (ii) any indenture, mortgage, deed of trust, franchise, permit,
contract, agreement, or other instrument to which it is a party or by which it
is bound; or (iii) any law, regulation, ruling, order, injunction, decree,
condition or other requirement applicable to or imposed upon the Borrower by any
law or by any governmental authority, court or agency.

    (g)   Prior to the year 2000, the Borrower reviewed the areas within its
business and operations which could be adversely affected by, and developed or
is developing a program to address on a timely basis the risk that certain
computer applications used by the Borrower may be unable to recognize and
perform properly date-sensitive functions involving dates prior to and after
December 31, 1999 (the "Year 2000 Problem"). The Year 2000 Problem did not
result in, and is not reasonably expected to result in, any material adverse
effect on the business, properties, assets, financial condition, results of
operations or prospects of the Borrower, or the ability of the Borrower to duly
and punctually pay or perform its obligations hereunder and under the other Loan
Documents. The Borrower continues to monitor for effects of the Year 2000
Problem pursuant to its established program.

8.   Fees. Beginning on the last day of the month after the date of the Note and
continuing on the last day of each month thereafter until the Expiration Date,
the Borrower shall pay a commitment fee to the Bank, in arrears, at the rate of
one-quarter percent (.25%) per annum on the average daily balance of the Line of
Credit which is undisbursed and uncancelled during the preceding month. The
commitment fee shall be computed on the basis of a year of 360 days and paid on
the actual number of days elapsed.

9.   Expenses. The Borrower shall also reimburse the Bank for the Bank's
expenses (including the reasonable fees and expenses of the Bank's outside and
in-house counsel) in connection with any amendments, modifications or renewals
of the Loan, and in connection with the collection of all of the Borrower's
obligations to the Bank, including but not limited to enforcement actions
relating to the Loan.

10.   Depository. The Borrower will establish and maintain at the Bank the
Borrower's primary depository accounts with balances at all times of not less
than $50,000.

11.   Additional Provisions. Before the first advance under the Loan, the
Borrower shall execute and deliver to the Bank the Note and other required Loan
Documents and such other instruments and documents as the Bank may reasonably
request, such as certified resolutions, incumbency certificates or other
evidence of authority. The Bank will not be obligated to make any advance under
the Line of Credit if any Event of Default or event which with the passage of
time, provision of notice or both would constitute an Event of Default shall
have occurred and be continuing.

inTEST Corporation
November 16, 2000
Page 5

Prior to execution of the final Loan Documents, the Bank may terminate this
Letter Agreement if a material adverse change occurs with respect to the
Borrower, any guarantor, any collateral for the Loan or any other person or
entity connected in any way with the Loan, or if the Borrower fails to comply
with any of the terms and conditions of this Letter Agreement, or if the Bank
reasonably determines that any of the conditions cannot be met.

This Letter Agreement is governed by the laws of the State of New Jersey. No
modification, amendment or waiver of any of the terms of this Letter Agreement,
nor any consent to any departure by the Borrower therefrom, will be effective
unless made in a writing signed by the party to be charged, and then such waiver
or consent shall be effective only in the specific instance and for the purpose
for which given. When accepted, this Letter Agreement and the other Loan
Documents will constitute the entire agreement between the Bank and the Borrower
concerning the Loan, and shall replace all prior understandings, statements,
negotiations and written materials relating to the Loan.

THE BORROWER AND THE BANK IRREVOCABLY WAIVE ANY AND ALL RIGHTS THEY MAY HAVE TO
A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR CLAIM OF ANY NATURE ARISING OUT OF
THIS LETTER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY AND ACKNOWLEDGE
THAT THE FOREGOING WAIVER IS KNOWING AND VOLUNTARY.

If and when a loan closing occurs, this Letter Agreement (as the same may be
amended from time to time) shall survive the closing and will serve as our loan
agreement throughout the term of the Loan.

To accept these terms, please sign the enclosed copy of this Letter Agreement as
set forth below and the Loan Documents and return them to the Bank within ten
(10) days from the date of this Letter Agreement, or this Letter Agreement may
be terminated at the Bank's option without liability or further obligation of
the Bank.

Thank you for giving PNC Bank this opportunity to work with your business. We
look forward to other ways in which we may be of service to your business or to
you personally.

Very truly yours,

PNC BANK, NATIONAL ASSOCIATION

By:    Denise Viola Monahan
      Denise Viola Monahan
      Vice President

inTEST Corporation
November 16, 2000
Page 6

ACCEPTANCE

With the intent to be legally bound hereby, the above terms and conditions are
hereby agreed to and accepted as of this ________ day of ___________________,
2000.

INTEST CORPORATION

INTEST SUNNYVALE CORPORATION

 

 

 

 

By:   /s/Hugh T. Regan, Jr.

By:   /s/Hugh T. Regan, Jr.

(SEAL)

(SEAL)

Print Name:   Hugh T. Regan, Jr.

Print Name:   Hugh T. Regan, Jr.

Title:   CFO

Title:   CFO

 

 

 

 

TEMPTRONIC CORPORATION

INTEST INVESTMENTS, INC.

 

 

 

 

By:   /s/Hugh T. Regan, Jr.

By:   /s/Hugh T. Regan, Jr.

(SEAL)

(SEAL)

Print Name:   Hugh T. Regan, Jr.

Print Name:   Hugh T. Regan, Jr.

Title:   CFO

Title:   CFO

 

 

 

 

INTEST LICENSING CORP.

INTEST IP CORP.

 

 

 

 

By:   /s/Hugh T. Regan, Jr.

By:   /s/Hugh T. Regan, Jr.

(SEAL)

(SEAL)

Print Name:   Hugh T. Regan, Jr.

Print Name:   Hugh T. Regan, Jr.

Title:   CFO

Title:   CFO

 

EXHIBIT A

A.

  FINANCIAL REPORTING COVENANTS:

(1)   The Borrower will deliver to the Bank:

      (a)   Financial Statements for its fiscal year, within ninety (90) days
after fiscal year end, audited and certified without qualification by a
certified public accountant acceptable to the Bank.

      (b)   Financial Statements for each fiscal quarter, within forty-five (45)
days after the quarter end, together with year-to-date and comparative figures
for the corresponding periods of the prior year, certified as true and correct
by its chief financial officer.

      (c)   With each delivery of Financial Statements, the Borrower's chief
financial officer shall also deliver a certificate as to the Borrower's
compliance with the financial covenants, if any, for the period then ended and
whether any Event of Default exists, and, if so, the nature thereof and the
corrective measures the Borrower proposes to take. This certificate shall set
forth all detailed calculations necessary to demonstrate such compliance.

"Financial Statements" means the consolidated balance sheet and statements of
income and cash flows prepared in accordance with generally accepted accounting
principles in effect from time to time ("GAAP") applied on a consistent basis
(subject in the case of interim statements to normal year-end adjustments).

In the event that any financial information submitted to the Bank has been
prepared by an outside accountant, the same shall be accompanied by a statement
in writing signed by the accountant disclosing that the accountant is aware that
the information prepared by the accountant would be submitted to and relied upon
by the Bank in connection with the Bank's determination to grant or continue
credit.

B.   FINANCIAL COVENANTS:

(1)   The Borrower will maintain at all times a ratio of current assets to
current liabilities of at least 1.50 to 1.00.

(2)   The Borrower will maintain at all times a ratio of total liabilities to
Tangible Net Worth of less than 1.00 to 1.00.

(3)   The Borrower will not make capital expenditures in excess of $500,000 in
any one fiscal year of the Borrower.

A-1

 

"Tangible Net Worth"

means stockholder's equity in the Borrower less any advances to third parties
and all items properly classified as intangibles, in accordance with GAAP.

C.   NEGATIVE COVENANTS:

(1)   The Borrower will not create, assume, incur or suffer to exist any
mortgage, pledge, encumbrance, security interest, lien or charge of any kind
upon any of its property, now owned or hereafter acquired, or acquire or agree
to acquire any kind of property under conditional sales or other title retention
agreements; provided, however, that the foregoing restrictions shall not prevent
the Borrower from:

      (a)   incurring liens for taxes, assessments or governmental charges or
levies which shall not at the time be due and payable or can thereafter be paid
without penalty or are being contested in good faith by appropriate proceedings
diligently conducted and with respect to which it has created adequate reserves;

      (b)   making pledges or deposits to secure obligations under workers'
compensation laws or similar legislation; or

      (c)   granting additional liens or security interests to secure existing
or future indebtedness in an aggregate principal amount not to exceed $100,000
at any time;

      (d)   entering into leases, as lessee, for real or personal property with
an aggregate annual rental value in excess of $50,000, excluding leases existing
on the date hereof; or

      (e)   granting liens or security interests in favor of the Bank.

(2)   The Borrower will not create, incur, guarantee, endorse (except
endorsements in the course of collection), assume or suffer to exist any
indebtedness, except:

      (a)   indebtedness to the Bank;

      (b)   open account trade debt incurred in the ordinary course of business
and not past due, or

      (c)   indebtedness in respect of which liens are permitted under
subparagraph (1)(c) and (1)(d) above, and any refinancings thereof; provided
that the amount of the refinancing indebtedness is not more than the outstanding
amount of the refinanced indebtedness, and the terms of the refinancing
indebtedness are no more favorable to the lender than the terms of the
refinanced indebtedness.

A-2

 

(3)   The Borrower will not liquidate, or dissolve, or merge or consolidate with
any person, firm, corporation or other entity, or sell, lease, transfer or
otherwise dispose of all or any substantial part of its property or assets,
whether now owned or hereafter acquired which at the time of such disposition
has a fair market value in excess of $100,000.

(4)   The Borrower will not make acquisitions of all or substantially all of the
property or assets of any person, firm, corporation or other entity.

(5)   The Borrower will not declare or pay any dividends on or make any
distribution with respect to any class of its equity, or purchase, redeem,
retire or otherwise acquire any of its equity.

(6)   The Borrower will not make or have outstanding any loans or advances to or
otherwise extend credit to any person, firm, corporation or other entity, except
in the ordinary course of business.

 

A-3