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SEVENTH AMENDMENT and WAIVER
dated as of October 13, 1995 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 Fourth Amendment
Agreement dated as of July 27, 1994, the Fifth
Amendment and Waiver dated as of October 11,
1994, the Sixth Amendment and Waiver dated
as of March 31, 1995 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 Agent and the Lenders 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 NET
WORTH.
Compliance with Article VII, Section 7.08. of the Credit Agreement is
hereby waived for the fiscal year ended June 30, 1995 to permit the
Tangible Net Worth plus Subordinated Indebtedness of the Borrower and its
Consolidated subsidiaries to be less than $26,971,000 as of the fiscal year
ended June 30, 1995 provided, however, Tangible Net Worth plus Subordinated
Indebtedness of the Borrower and its Consolidated subsidiaries was not less
than $25,455,000 as of such fiscal year end.
2. AMENDMENT TO ARTICLE VII, NEGATIVE COVENANTS, Section 7.08. TANGIBLE NET
WORTH.
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Article VII. Section 7.08. of the Credit Agreement is hereby amended by
deleting sub-section (iii) in its entirety and substituting therefor the
following:
"(iii) $25,455,000 from June 30, 1995 until June 29, 1996;"
3. WAIVER OF ARTICLE VII, NEGATIVE COVENANTS, SECTION 7.18. DEBT SERVICE
COVERAGE RATIO.
Compliance with Article VII, Section 7.18. of the Credit Agreement is
hereby waived for the fiscal year ended June 30, 1995 to permit the Debt
Service Coverage Ratio of the Borrower and its Consolidated subsidiaries to
be less than .94 to 1.0 as of the fiscal year ended June 30, 1995 provided,
however, such ratio was not less than .91 to 1.0 as of such fiscal year
end.
4. WAIVER OF ARTICLE VII, NEGATIVE COVENANTS, SECTION 7.19. INVENTORY
RELIANCE.
Compliance with Article VII Section 7.19. of the Credit Agreement is hereby
waived for the fiscal year ended June 30, 1995 to permit the Inventory
Reliance of the Borrower and its Consolidated subsidiaries to be more than
34% as of the fiscal year ended June 30, 1995 provided, however, the
Inventory Reliance of the Borrower and its Consolidated subsidiaries was
not greater than 36% as of such fiscal year end.
This SEVENTH 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.
This SEVENTH 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
SEVENTH 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 SEVENTH AMENDMENT and WAIVER may be executed in one or more counterparts,
each of which shall constitute an original, but all of which when, taken
together shall constitute but one SEVENTH AMENDMENT and WAIVER. The SEVENTH
AMENDMENT and WAIVER shall become effective when (i) duly executed counterparts
hereof which, when taken
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together, bear the signatures of each of the parties hereto shall have been
delivered to the Agent and (ii) the Agent shall have received copies of
executed waivers and amendments (as appropriate) to (a) the Chemical/BNY Loan
Agreement and (b) the Letter of Credit and Bond Purchase Agreement dated as of
April 1, 1985 between the Borrower and Chemical Bank.
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
SEVENTH 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/ Xxxxx X. Xxxxxx
_______________________________________
Name:
Title: Senior Vice President
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/ Xxxxx X. Xxxxxx
________________________________________
Name:
Title: Senior Vice President
CHEMICAL BANK, as Agent and Lender
By: /s/ Xxxxxx X. Xxxxx
_______________________________
Name:
Title: Vice President
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