AMENDMENT NO. 1
dated as of September 19, 1995
to the
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
dated as of April 25, 1995
between
PENRIL DATACOMM NETWORKS, INC.
and
SIGNET BANK/MARYLAND
TABLE OF CONTENTS
PAGE
Section 1. Definitions. . . . . . . . . . . . . . . . . . 1
Section 2. Amendments to the Amended Agreement. . . . . . 1
Section 3. Effectiveness. . . . . . . . . . . . . . . . . 2
Section 4. Integration; Confirmation. . . . . . . . . . . 3
Section 5. Counterparts. . . . . . . . . . . . . . . . . 3
Section 6. Successors and Assigns. . . . . . . . . . . . 3
Section 7. Governing Law. . . . . . . . . . . . . . . . . 4
Exhibit A - Form of Guarantor Consent
AMENDMENT NO. 1
This AMENDMENT NO. 1 (This "Amendment No. 1") is dated as of
September 19, 1995 and is between PENRIL DATACOMM NETWORKS, INC.,
a Delaware corporation (the "Borrower"), and SIGNET
BANK/MARYLAND, a Maryland banking corporation (the "Bank").
The Borrower and the Bank are parties to a Second Amended
and Restated Credit Agreement dated as of April 25, 1995 (the
"Amended Agreement"). The Borrower has requested the Bank to
amend the Amended Agreement in certain respects. The Bank is
agreeable to the Borrower's request, all on the terms and
conditions set forth in this Amendment No. 1. Accordingly, the
parties hereto agree as follows:
Section 1. Definitions. Terms used herein and not defined
which are defined in the Amended Agreement shall have for the
purposes hereof the respective meanings set forth therein.
Section 2. Amendments to the Amended Agreement.
(a) Section 5.5 of the Amended Agreement is hereby amended
to read in full as follows:
Section 5.5 Consolidated EBITDA to Consolidated Interest
Expense. The ratio of Consolidated EBITDA to Consolidated
Interest Expense on the last day of each fiscal quarter specified
below, in each case computed for the four consecutive fiscal
quarters ending on such date, will not be less than the ratio set
forth below for such fiscal quarter. For purposes of this
Section 5.5, a negative ratio greater than one set forth below
(e.g. a ratio of (5.0) to 1.0 for the fiscal quarter ended
October 31, 1995) would be a ratio less than the agreed minimum
ratio of (4.906) to 1.0 for that quarter. Similarly, a positive
ratio less than one set forth below would be a ratio less than
the agreed minimum.
Fiscal Quarter Ended Minimum Ratio
--------------------- -------------
July 31, 1995 (4.202) to 1.0
October 31, 1995 (4.906) to 1.0
January 31, 1996 and (4.917) to 1.0
each fiscal quarter thereafter
(b) Section 5.6 of the Amended Agreement is hereby amended
to read in full as follows:
Section 5.6 Consolidated EBITDA to Adjusted Fixed Charges.
The ratio of Consolidated EBITDA (determined without adding to
Consolidated Net Income Consolidated Interest Expense in respect
of Revolving Loans and in respect of Subordinated Debt) to
Adjusted Fixed Charges (determined without adding the amount of
the payment required under Section 2.10 (c)) on the last day of
each fiscal quarter set forth below (computed for that quarter
alone) will not be less than the ratio set forth below for such
fiscal quarter. For purposes of this Section 5.6, a negative
ratio greater than one set forth below (e.g. a ratio of (2.100)
to 1.0 for the fiscal quarter ended October 31, 1995) would be a
ratio less than the agreed minimum ratio of (2.035) to 1.0 for
that quarter. Similarly, a positive ratio less than one set
forth below would be a ratio less than the agreed minimum.
Fiscal Quarter Ended Minimum Ratio
-------------------- -------------
July 31, 1995 (1.177) to 1.0
October 31, 1995 (2.035) to 1.0
January 31, 1996 and (8.261) to 1.0
each fiscal quarter thereafter
(c) Section 8.1(i) of the Amended Agreement is hereby amended
to read in full as follows:
(i) the Borrower shall (A) fail to repay the Term Loans and
the Acquisition Loan with Net Sale Proceeds pursuant to Section
2.10(c) by an aggregate amount of $2,000,000 prior to 1:00 P.M.
(local time in Bethesda, Maryland) on December 31, 1995 or (B)
the Borrower shall otherwise fail to pay when due any principal
of or interest on any Loan, any fee or other amount payable
hereunder to under the Notes or any other Loan Document;
Section 3. Effectiveness. This Amendment No. 1 shall become
effective as of July 31, 1995 on the date (the "Effective Date")
when the last of the following conditions shall have been
satisfied:
(i) the Bank shall have received counterparts of this
Amendment No. 1 duly executed by itself and the Borrower;
(ii) The Bank shall have received counterparts of Guarantor
Consents and Agreements, substantially in the form of Exhibit A
to this Amendment No. 1, duly signed by each Guarantor;
(iii) the fact that the representations and warranties of
the Borrower contained in the Amended Agreement shall be true on
and as of the Effective Date;
(iv) the Bank shall have received all documents it may
reasonably request relating to the existence of the Borrower and
its authority to execute, deliver and perform this Amendment No.
1, and the validity of this Amendment No. 1 and any other matters
relevant hereto, all in form and substance satisfactory to the
Bank, and
(v) the borrower shall have received net cash proceeds of
not less than $1,500,000 from the sale or issuance of its capital
stock and shall have applied at least $1,500,000 of such proceeds
to repay the Acquisition Loan or the Term Loans in the order
required as if such net proceeds were net Sale Proceeds under
Section 2.10(c) (ii), (iii) or (iv).
On the Effective Date, the Amended Agreement will be
automatically amended as set forth herein, effective as of July
31, 1995. On and after the Effective Date, the rights and
obligations of the parties hereto shall be governed by the
Amended Agreement as amended by this Amendment No. 1.
Section 4. Integration; Confirmation. On and after the
Effective Date, each reference in the Amended Agreement to "this
Agreement", "herein", "hereunder" or words of similar import, and
each reference to any other document delivered in connection with
the Amended Agreement to the "Credit Agreement", the "Amended
Agreement" or the "Amended and Restated Credit Agreement" shall
be deemed to be a reference to the Amended Agreement as amended
by this Amendment No. 1, all other terms and provision of the
Amended Agreement shall continue in full force and effect and
unchanged and are hereby confirmed in all respects.
Section 5. Counterparts. This Amendment No. 1 may be
signed in any number of counterparts, each of which shall be an
original, all of which taken together shall constitute a single
integrated agreement with the same effect as if the signatures
thereto and hereto were upon the same instrument. Complete sets
of counterparts shall be lodged with the Borrower and the Bank.
Section 6. Successors and Assigns. The provisions of this
Amendment No. 1 shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns,
including any successor or assignee arising by operation of law.
Section 7. Governing Law. This Amendment No. 1 shall be
governed by and construed in accordance with the laws of the
State of Maryland.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment No. 1 to be duly executed as of the date and year first
above written.
PENRIL DATACOMM NETWORKS, INC.
By: \s\X.X. Xxxx
----------------------------
Title: CFO
0000 Xxxxxx Xxxxxxx Xxxx.
Xxxxxxxxxxxx, Xxxxxxxx 00000
Telecopier Number: (000) 000-0000
with a copy to:
Xxxxxxx X. Xxxxxxxx, Esq.
Benesch, Friedlander, Xxxxxx
& Xxxxxxx
0000 XX Xxxxxxx Xxxxxxxx
000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Telephone Number: (000) 000-0000
Telecopier Number: (000) 000-0000
SIGNET BANK/MARYLAND
By: \s\Xxxxxxx Xxxxx Xxxxxxxx
----------------------------
Title: Vice President
0000 Xxxxxxxx Xxxx, Xxxxx 000
Xxxxx Xxxxxx, Xxxxxxxx 00000
Telecopier Number: (000) 000-0000
with a copy to:
Xxxxx X. Xxxxxx, Esq.
McGuire, Woods, Battle & Xxxxxx
Xxx Xxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Telephone Number: (000) 000-0000
Telecopier Number: (000) 000-0000
EXHIBIT A
September 19, 1995
Signet Bank/Maryland
Commercial Lending
0000 Xxxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
Penril Datacomm Networks, Inc., a Delaware corporation
("Penril"), and Signet Bank/Maryland ("the Bank") are parties to
a Second Amended and Restated Credit Agreement dated as of April
25, 1995 (the "1995 Credit Agreement"). Penril is obligated
under the 1995 Credit Agreement to use the proceeds of all
Revolving Loans available thereunder for its and its Restricted
Subsidiary's general working capital requirements and to advance
a not insubstantial portion of the proceeds of Revolving Loans
to its Restricted Subsidiaries. Each of the undersigned is a
Restricted Subsidiary of Penril.
Each of the undersigned (a "Guarantor" and collectively the
"Guarantors") has guaranteed to the Bank the full payment and
performance of all Penril's obligations under the 1995 Credit
Agreement pursuant to a Guaranty dated as of the respective
dates set forth on Schedule 1 hereto (each a "Guaranty" and
collectively the "Guaranties"), and secured its guaranty with
the grant of a security interest in favor of the Bank in all of
its tangible and intangible personal property pursuant to a
Security Agreement (or, in the case of Penril Datacomm, Ltd., a
Debenture) dated as of the respective dates set forth on
Schedule 1 hereto (the "Security Agreement"), each between a
Guarantor and the Bank.
By reason of the violation of the covenants in Sections 5.5
and 5.6 of the Credit Agreement for its fiscal quarter ended
July 31, 1995, Penril is in Default under the 1995 Credit
Agreement. Penril has requested the Bank to waive this Default,
to modify Sections 5.5 and 5.6 of the Credit Agreement to
conform to Penril's current financial projections and to make
certain other changes to the 1995 Credit Agreement. The Bank is
agreeable thereto, all on the terms and conditions set forth in
Amendment No. 1 dated as of the date hereof ("Amendment No. 1")
to the 1995 Credit Agreement.
Each Guarantor acknowledges that it is familiar with the
contents of Amendment No. 1. Each Guarantor further
acknowledges that it has, independently and without reliance on
the Bank, and based on such financial and other information as
it has deemed appropriate, made its own analysis of Penril's
condition and of its ability to perform its obligations under
the 1995 Credit Agreement, as amended by Amendment No. 1 (the
"Amended Agreement"), and the Notes referred to therein.
Each Guarantor hereby consents to the changes to the 1995
Credit Agreement effected by Amendment No. 1 and acknowledges
and agrees that its obligations under its Guaranty shall
continue in full force and effect from and after the
effectiveness of Amendment No. 1. Each Guarantor acknowledges
and agrees that the obligations of Penril under the Amended
Agreement shall continue in all respects to constitute
"Obligations" guaranteed under each Guaranty.
This Consent may be signed in any number of counterparts,
each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.
This Consent shall become effective as to each Guarantor when
the Bank shall have received counterparts hereof (which may be
delivered by telecopier or other means of facsimile
transmission) signed by such Guarantor.
PENRIL ELECTRONICS INC.
By: \s\X.X. Xxxx
----------------------
Title: Secretary
PENRIL TECHNOLOGIES INC.
By: \s\X.X. Xxxx
----------------------
Title: Secretary
TECHNIPOWER INC.
By: \s\X.X. Xxxx
----------------------
Title: Secretary
ELECTRO-METRICS INC.
By: \s\X.X. Xxxx
----------------------
Title: Secretary
DATABILITY INC.
By: \s\X.X. Xxxx
----------------------
Title: Secretary
PENRIL INTERNATIONAL, LTD.
By: \s\X.X. Xxxx
----------------------
Title: President
PENRIL DATACOMM, LTD.
By: \s\X.X. Xxxx
----------------------
Title: Secretary
PENRIL (FAR EAST) LIMITED
By: \s\X.X. Xxxx
----------------------
Title: Director
PENRIL POWER SYSTEMS, INC.
By: \s\X.X. Xxxx
----------------------
Title: Director
EXHIBIT 1
GUARANTOR DATE OF GUARANTY
--------- ----------------
PENRIL ELECTRONICS INC. MAY 6, 1993
PENRIL TECHNOLOGIES, INC. MAY 6, 1993
TECHNIPOWER INC. MAY 6, 1993
ELECTRO-METRICS INC. MAY 6, 1993
DATABILITY INC. MAY 6, 1993
PENRIL INTERNATIONAL, LTD. OCTOBER 27, 1993
PENRIL DATACOMM, LTD. OCTOBER 15, 1993
PENRIL (FAR EAST) LIMITED DECEMBER 22, 1993
PENRIL POWER SYSTEMS, INC. MAY 18, 1995
