EXHIBIT 10.S
AMENDMENT NO. 3 TO THE LOAN AND SECURITY AGREEMENT
AMENDMENT NO. 3 to the Loan and Security Agreement dated as of February 9,
2000 ("Amendment No. 3") by and between NAPCO SECURITY SYSTEMS, INC., a New York
corporation having a place of business at 000 Xxxxxxx Xxxxxx, Xxxxxxxxxx, Xxx
Xxxx 00000 (the "Debtor") and HSBC BANK USA F/K/A MARINE MIDLAND BANK, having a
place of business at 000 Xxxxx Xxxxxx Xxxx, Xxxxxxxx, Xxx Xxxx 00000 (the
"Secured Party").
W I T N E S S E T H :
WHEREAS, as of May 12, 1997, Debtor and Secured Party had entered into a
certain loan and security agreement, as amended by amendment no. 1 to the loan
and security agreement dated as of May 28, 1998, as amended by amendment no. 2
to the loan and security agreement dated as of June 30, 1999, as may be amended
from time to time (the "Agreement");
WHEREAS, the Debtor has requested that the Secured Party extend the
Termination Date as set forth in the Agreement and the Secured Party has agreed
to do so, in the manner set forth below, provided however, that, among other
things, Debtor execute this Amendment No. 3.
NOW, THEREFORE, in consideration of the mutual promises and for other good
and valuable consideration, the receipt of which is hereby acknowledged, the
parties hereto agree as follows:
1. The definition of "Termination Date" contained in Section 1.1. of the
Agreement is hereby amended to read in its entirety as follows:
"Termination Date" shall mean the earlier to occur of (a) May 31,
2001 or, if such day shall not be a Business Day, the next succeeding
Business Day, or (b) upon the occurrence of an Event of Default.
2. The definition of "Transaction Documents" contained in Section 1.1. of
the Agreement is hereby amended to read in its entirety as follows:
"Transaction Documents" shall mean, individually, jointly, severally
and collectively, the Agreement (including this Amendment No. 3) and all
documents, instruments, notes and agreements by Debtor, any Third Party or
any Responsible Party in
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favor of Secured Party, whether in existence now or hereinafter created,
executed and delivered to Secured Party, as the same may be extended,
re-executed, modified or otherwise amended from time to time, including,
without limitation, the Term Loan Note, collateral documents, letter of
credit agreements, notes, acceptance credit agreements, security
agreements, pledges, guaranties, mortgages, title insurance, assignments,
and subordination agreements required to be executed by Debtor, any Third
Party, or any Responsible Party pursuant hereto or in connection herewith,
or in connection with a letter of credit application and reimbursement
agreement, each dated as of May 12, 1997, a certain uncommitted trade line
established by Secured Party in favor of Debtor to provide for commercial
and standby letters of credit, evidenced by, among other documents, a
continuing letter of credit agreement, and a continuing indemnity
agreement, each dated as of May 12, 1997, as may be re-executed, amended,
extended or otherwise modified from time to time, the Term Loan Note in
the principal sum of $2,500,000., as may be extended or otherwise modified
from time to time, and uncommitted line of credit facility to be used by
Debtor to finance certain acquisitions, as may be executed and delivered
to Secured Party from time to time to evidence and secure the obligations
under such facility pursuant to the terms that the Secured Party shall
request, and all other documents, agreements, reaffirmations, certificates
and resolutions related thereto, and amendments or supplements thereto,
all such other agreements, resolutions, certificates, resolutions and
opinion letters executed and/or issued as a condition precedent to or in
connection with the Agreement, the Term Loan Note and all such other
documents, agreements, and instruments delivered hereunder or as a
supplement or amendment thereto or as Secured Party may reasonably require
from time to time in order to evidence and/or secure any and all
indebtedness of Debtor to Secured Party or to create, perfect, continue
the perfection or protect the Secured Party's security interest in the
Collateral.
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3. The following paragraphs shall be added to Section 9.26 of the
Agreement:
(f) Debtor and its Consolidated Subsidiaries shall maintain, for the
fiscal quarter ended March 31, 2000, minimum net income of not less than
$500,000.00, to be tested at the end of such fiscal quarter based upon the
financial statements required to be presented to Secured Party pursuant to
Section 9.1 of the Agreement, with net income determined in accordance
with GAAP.
(g) Debtor and its Consolidated Subsidiaries shall maintain, for the
fiscal quarter ended June 30, 2000, minimum net income of not less than
$985,000.00, to be tested at the end of such fiscal quarter based upon the
financial statements required to be presented to Secured Party pursuant to
Section 9.1 of the Agreement, with net income to be determined in
accordance with GAAP.
(h) Debtor and its Consolidated Subsidiaries, shall maintain, for the
fiscal year ended June 30, 2000, annual minimum net income of not less
than $1,230,000.00, to be tested at the end of such fiscal year based upon
the financial statements required to be presented to Secured Party
pursuant to Section 9.1 of the Agreement, with net income to be determined
in accordance with GAAP.
4. As an inducement to the Bank extending the Termination Date, Debtor
represents and warrants to Secured Party that, as of the date of execution of
this Amendment No. 3, (i) the representations and warranties set forth in
Article 4 of the Agreement and the representations and warranties of Debtor and
any Third Party set forth in the other Transaction Documents to which any is a
party are true and correct in all respects, (ii) no event has occurred and is
continuing which constitutes an "Event of Default" under any of the Transaction
Documents (as "Event of Default" is defined in each of those Transaction
Documents"), and (iii) Debtor is in compliance with the covenants set forth in
Articles 9 and 10 of the Agreement.
5. Debtor represents and warrants to Secured Party that there are no
offsets, defenses or counterclaims to the payment of the indebtedness owing
Secured Party, including the Advances, and to the continuing general security
interest in the Collateral granted to Secured Party by Debtor as security for
payment of the indebtedness, as fully described in the Agreement.
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6. Except as modified herein, all other provisions of the Agreement and
the other Transaction Documents remain unmodified and are in full force and
effect.
7. This Amendment No. 3 shall be governed by the laws of the State of New
York.
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IN WITNESS WHEREOF, the parties have executed this Amendment No. 3 as
of the day and year first above written.
HSBC BANK USA F/K/A MARINE MIDLAND BANK
By:
Xxxxx Xxxxxxx
Vice President
NAPCO SECURITY SYSTEMS, INC.
By:
Xxxxx Xxxxxx
Senior Vice President
0
X-00
XXXXX XX XXX XXXX )
) SS:
COUNTY OF _________ )
On this 14th day of February, 2000, before me, the undersigned, a Notary Public
in and for said State, personally came XXXXX XXXXXXX, personally known to me or
proved to me on the basis of satisfactory evidence to be the person, whose name
is subscribed to the within instrument and acknowledged to me that he executed
the same in his capacity and that by his signature on the instrument, the person
or entity upon behalf of which the person acted executed the instrument.
Notary Public
STATE OF NEW YORK )
) SS:
COUNTY OF _________ )
On this 14th day of February, 2000, before me, the undersigned, a Notary Public
in and for said State, personally came XXXXX XXXXXX , personally known to me or
proved to me on the basis of satisfactory evidence to be the person, whose name
is subscribed to the within instrument and acknowledged to me that he executed
the same in his capacity and that by his signature on the instrument, the person
or entity upon behalf of which the person acted executed the instrument.
Notary Public
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