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EXHIBIT 10.P
FIFTH AMENDMENT and WAIVER dated as of
October 11, 1994 to the CREDIT AGREEMENT
dated as of November 21, 1991 (as the
same has been amended by the Amendment
and Waiver dated as of August 27, 1993,
the Amendment and Waiver dated as of
September 14, 1993, the Amendment dated
as of December 7, 1993, the Amendment and
Waiver dated as of July 27, 1994 and as
the same may be further amended,
supplemented or modified from time to
time in accordance with its terms, the
"Credit Agreement), among NAPCO SECURITY
SYSTEMS, INC., a Delaware corporation
(the "Borrower"), the guarantors
signatory hereto (collectively, the
"Guarantors"), the lenders named in
SCHEDULE 2.01 and 2.06 of the Credit
Agreement (collectively, the "Lenders")
and CHEMICAL BANK, as agent for the
Lenders (in such capacity, the "Agent").
WHEREAS, the Borrower and the Guarantors wish to amend and waive certain
provisions of the Credit Agreement;
WHEREAS, the Lenders and the Agent have consented to amend and waive the Credit
Agreement to reflect the requests herein set forth;
NOW, THEREFORE, in consideration of the premises and of the mutual agreements
herein contained, the parties hereto agree as follows:
1. Waiver of Article VII. NEGATIVE COVENANTS. Section 7.08. Tangible
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Net Worth.
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Compliance with Article VII. Section 7.08. of the Credit Agreement
is hereby waived for the fiscal year ended June 30, 1994 to permit
Tangible Net Worth plus Subordinated Indebtedness of the Borrower
and its Consolidated subsidiaries to be less than $25,566,000 as of
the fiscal year ended June 30, 1994 provided, however, Tangible Net
Worth plus Subordinated Indebtedness of the Borrower and its
Consolidated subsidiaries was not less than $24,821,000 as of such
fiscal year end.
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2. Amendment to Article VII. NEGATIVE COVENANTS. Section 7.08.
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Tangible Net Worth.
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Article VII. Section 7.08. of the Credit Agreement is hereby amended by
deleting the number "$26,000,000" contained in subsection (ii) thereof
and substituting therefor the number "$24,821,000".
3. Waiver of Article VII. NEGATIVE COVENANTS. Section 7.10. Current
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Ratio.
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Compliance with Article VII. Section 7.10. of the Credit Agreement is
hereby waived for the fiscal year ended June 30, 1994 to permit the
Current Ratio of the Borrower and its Consolidated subsidiaries to be
less than 2.00 to 1.0 as of the fiscal year ended June 30, 1994
provided, however, such ratio was not less than 1.99 to 1.0 as of such
fiscal year end.
4. Amendment to Article VII. NEGATIVE COVENANTS. Section 7.10.
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Current Ratio.
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Section 7.10. of the Credit Agreement is hereby amended by deleting it
in its entirety and by substituting the following therefor:
"SECTION 7.10. CURRENT RATIO. Permit the Current Ratio of the
Borrower and its Consolidated Subsidiaries (i) to be less than 1.99
to 1.00 from July 1, 1994 until June 29, 1995, (ii) to be less than
2.00 to 1.00 from June 30, 1995 until June 29, 1996 and (iii) to be
less than 2.25 to 1.00 at all times from June 30, 1996 and
thereafter."
5. Waiver of Article VII. NEGATIVE COVENANTS. Section 7.14. Total
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Unsubordinated Liabilities to Tangible Net Worth Ratio.
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Compliance with Article VII. Section 7.14. of the Credit Agreement is
hereby waived for period commencing on July 1, 1994 and ending on July
26, 1994 to permit the ratio of Total Unsubordinated Liabilities of the
Borrower and its Consolidated subsidiaries to Tangible Net Worth of the
Borrower and its Consolidated subsidiaries plus Consolidated Subordinated
Indebtedness to be greater than 1.00 to 1.0 provided, however; such ratio
was not greater than 1.04 to 1.0.
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6. Waiver of Article VII. NEGATIVE COVENANTS. Section 7.18. Debt
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Service Coverage Ratio.
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Compliance with Article VII. Section 7. 18. of the Credit Agreement
is hereby waived for the fiscal year ended June 30, 1994 to permit
the Debt Service Coverage Ratio of the Borrower and its Consolidated
subsidiaries to be less than 1.10 to 1.0 as of the fiscal year ended
June 30, 1994 provided, however, such ratio was not less than 1.02
to 1.0 as of such fiscal year end.
7. Amendment to Article VII. NEGATIVE COVENANTS. Section 7.18. Debt
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Service Coverage Ratio.
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Section 7. 18 of the Credit Agreement is hereby amended by deleting
it in its entirety and by substituting the following therefor:
"SECTION 7.18. DEBT SERVICE COVERAGE RATIO. Permit the Debt Service
Ratio of the Borrower and its Consolidated subsidiaries to be less
than:
(i) 1.02 to 1.00 at all times from July 1, 1994 until June 29,
1995;
(ii) 1.15 to 1.00 at all times from June 30,1995 until June
29, 1997; and
(iii) 1.10 to 1.00 at all times from June 30, 1997 and thereafter."
8. Amendment to Article VII NEGATIVE COVENANTS. Section 7.19.
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Inventory Reliance.
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Section 7.19 of the Credit Agreement is hereby amended by deleting
it in its entirety and by substituting the following therefor:
"Section 7.19 INVENTORY RELIANCE. Permit the Inventory Reliance of
the Borrower and its Consolidated subsidiaries to be more than (i)
18% at all times from July l, 1994 until June 29, 1995; (ii) 15%
at all times from June 30, 1995 until June 29, 1996; and (iii) 10%
at all times from June 30, 1996 and thereafter.
This FIFTH AMENDMENT and WAIVER shall be construed and enforced in
accordance with the laws of the State of New York.
Except as expressly amended, waived or consented to hereby, the Credit
Agreement shall remain in full force and effect in accordance with the original
terms thereof.
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This FIFTH AMENDMENT and WAIVER herein contained is limited specifically to the
matters set forth above and does not constitute directly or by implication an
amendment or waiver of any other provision of the Credit Agreement or any
default which may occur or may have occurred under the Credit Agreement.
The Borrower hereby represents and warrants that, after giving effect to this
FIFTH AMENDMENT and WAIVER, no Event of Default or Default exists under the
Credit Agreement or any other related document.
Please be advised that should there be a need for further amendments or waivers
with respect to these covenants or any other covenants, those requests shall be
evaluated by the Agent and the Lenders when formally requested, in writing, by
the Borrower and the Guarantors.
This FIFTH AMENDMENT and WAIVER may be executed in two or more
counterparts, each of which shall constitute an original, but all of which
when, taken together shall constitute but one FIFTH AMENDMENT and WAIVER. The
FIFTH AMENDMENT and WAIVER shall become effective when (i) duly executed
counterparts hereof which, when taken together, bear the signatures of each of
the parties hereto shall have been delivered to the Agent, (ii) the Agent shall
have received copies of (a) the executed Eighth Amendment and Waiver to the
Letter of Credit and Bond Purchase Agreement dated as of April 1, 1985 between
the Borrower and Chemical Bank, in the form attached hereto as Exhibit A and
(b) the executed First Amendment and Waiver to the Loan Agreement dated as of
July 27, 1994 among the Company, the Guarantors named therein, Chemical Bank,
The Bank of New York and Chemical Bank, as Agent, in the form attached hereto
as Exhibit B, and (iii) the Agent shall have received, for its satisfactory
review, a "draft" of the Borrower's audited financial statements for the fiscal
year ended June 30, 1994.
Capitalized terms used herein and not otherwise defined herein shall have the
same meanings as defined in the Credit Agreement.
IN WITNESS WHEREOF, the Borrower, the Guarantors and the Agent have caused this
FIFTH AMENDMENT and WAIVER to be duly executed by their duly authorized
officers, all as of the day and year first above written.
NAPCO SECURITY SYSTEMS, INC.
By: /s/ K. S. Buchel, VP
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Name:
Title:
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Guarantors:
NAPCO SECURITY SYSTEMS
INTERNATIONAL, INC.
UMI MANUFACTURING CORP.
RALTECH LOGIC, INC.
E.E. ELECTRONIC
COMPONENTS, INC.
ALARM LOCK SYSTEMS, INC.
DERRINGER SECURITY
SYSTEMS, INC.
By: /s/ K. S. Buchel, VP
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Name:
Title:
CHEMICAL BANK, as Agent and Lender
By: /s/ Xxxxx X. Xxxxxx
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Name: Xxxxx X. Xxxxxx
Title: Vice President
