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EXHIBIT 10.N
TERM LOAN NOTE
$2,500,000.00 Garden City, New York
May 28, 1998
FOR VALUE RECEIVED, the undersigned (jointly and severally, if the
undersigned be more than one) promise(s) to pay to the order of MARINE MIDLAND
BANK (Bank) at its 534 Brood Hollow Road Office in Melville, New York or, at the
holder's option, at such other place as may be designated from time to time by
the holder, the principal sum of Two Million Five Hundred Thousand and 00/100
Dollars ($2,500,000.00) in lawful money of the United States of America, in
sixty (60) installments of principal as follows: 59 equal consecutive monthly
installments of $41,666.67 each, commencing July 1, 1998, and payable on the
first day of each month thereafter, to and including May 1, 2003, and one final
installment on June 1, 2003, in an amount equal do the then unpaid principal
balance hereof, together with interest as hereinafter provided.
This Note shall bear interest until maturity (whether by acceleration
or otherwise) at a per annum rate equal to 7.94%. Interest on this Note shall be
payable on the 1st day of each month following the date of this Note and on the
date the unpaid principal balance is paid in full. In no event shall the rate of
interest on this Note exceed the maximum rate authorized by applicable law. If
the undersigned is not a corporation, interest will be calculated for each day
at 1/365th of the applicable per annum rate. If the undersigned is a
corporation, interest will be calculated for each day at 1/360th of the
applicable per annum rate, which will result in a higher effective annual rate.
The undersigned does hereby reserve to itself the privilege of
prepaying this Note in whole, but not in part, on any payment date upon
compliance with the applicable conditions of this paragraph. In the event that
there is a partial or complete prepayment of this Note for any reason
(including, without limitation, as a result of acceleration upon default of
otherwise), the undersigned shall pay to Bank an amount computed in accordance
with the provisions of this paragraph (the "Prepayment Premium"). The Prepayment
Premium shall equal the aggregate of the present values of the streams of
payments of all installments of this Note being fully or partially prepaid. For
each installment, the present value of the stream of payments shall be
calculated in accordance with generally accepted practices as determined by
Bank, using as a basis for calculation (i) the Semiannual Stream of Payments (as
hereinafter defined), (ii) the number of whole and partial semiannual periods
between the date of prepayment to the due date of such installment (for the
purpose of this calculation, any partial period shall be deemed to be the first
period) and (iii) the Treasury Yield (as hereinafter defined) adjusted to a
semiannual basis. For each installment, the "Semiannual Stream of Payments"
shall mean a stream of payments with each component equal to the product
(pro-rated in the case of a partial semiannual period) of the amount of
principal of such installment prepaid and one-half (1/2) of the excess (if any)
of the Effective Annual Interest Rate (as hereinafter defined) over the annual
yield of United States Treasury obligations offered on a secondary market as of
the date of
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prepayment (the "Treasury Yield") with maturities as close to the aforesaid due
date as are reasonably available on a constant maturity yield curve as
determined by Bank (if necessary, interpolating such yield on a linear basis).
If the Effective Annual Interest Rate does not exceed the Treasury Yield as
computed in accordance with the preceding sentence, no Prepayment Premium shall
be payable hereunder. The "Effective Annual Interest Rate" shall mean the stated
interest rate of this Note, adjusted, if necessary, to reflect the same basis of
calculation as the Treasury Yield. Bank's calculation of the Prepayment Premium
shall be conclusive absent manifest error, and the Prepayment Premium shall be
payable on demand. In the event that the Prepayment Premium, as computed in
accordance with the provisions of this paragraph, shall exceed the maximum
amount permissible by law, the amount of the Prepayment Premium shall be reduced
to such permissible amount. Any prepayments of the principal balance of this
Note shall be permitted only upon sixty (60) days prior written notice to Bank
and shall be accompanied by payment of all accrued interest at the rate of
interest then applicable to the date of prepayment. Any partial prepayments
shall be credited in inverse order of maturity.
Upon default by the undersigned, and following the acceleration of this
Note as provided hereunder, a tender of payment of the amount necessary to
satisfy the entire indebtedness secured hereby made at any time prior to
foreclosure sale shall constitute an evasion of the prepayment privilege and
shall be deemed to be a voluntary prepayment hereunder; and such prepayment, to
the extent permitted by law, will therefore include the Prepayment Premium
required under the prepayment provision contained in the preceding paragraph.
If any installment of this Note is not paid when due, whether because
such installment becomes due on a Saturday, Sunday or a banking holiday, or for
any other reason, the undersigned will pay interest thereon at the applicable
rate until the date of actual receipt of such installment by the holder of this
Note. In addition, if any installment of principal or interest under this Note
is not paid within ten days after its due date, the undersigned will pay the
holder of this Note a late charge equal to 5% of the overdue installment.
This Note is the Term Loan Note referred to in that certain loan and
security agreement by and between undersigned and Bank dated as of May 12, 1997,
as amended by amendment no. 1 to the loan and security agreement dated as of
even dated hereof, and as the same may be further amended from time to time (the
"Agreement"), is subject to all of the provisions contained in the Agreement and
the other Transaction Documents (as defined in the Agreement) and is entitled to
all of the benefits contained therein, including the security interest granted
to the Lender in the Collateral (as defined in the Agreement). All of the
representations, warranties, covenants, conditions and agreements contained in
the Agreement and the other Transaction Documents are herein incorporated by
this reference.
It is expressly agreed that, upon the failure of the Borrower to make
any payments due hereunder in a timely manner, or upon the happening of any
"Event of Default" hereunder, or under the Agreement or the other Transaction
Documents, the principal sum hereof, together with accrued interest and all
other expenses, including, but not limited to reasonable attorneys'
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fees for legal services incurred by the holder hereof in connection with the
collection of this Note whether or not suit is brought, and if suit is brought,
then through all appellate actions, shall immediately become due and payable at
the option of the holder of this Note. Upon occurrence of an Event of Default,
whether or not Bank exercises any of its rights and remedies contained herein or
in the Agreement, including the right to declare all obligations hereunder to be
immediately due and payable, the undersigned shall pay interest on the unpaid
principal balance hereunder at a rate equal to the rate of interest hereinbefore
specified plus 3% ("Default Rate"). The unpaid principal balance hereunder shall
bear the Default Rate of Interest until (i) all obligations under this Note are
paid in full; (ii) the undersigned has cured said Event of Default to the
satisfaction of Bank; or (iii) Bank, in writing, has waived said Event of
Default.
No failure by the holder hereof to exercise, and no delay in
exercising, any right or remedy hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise by such holder of any right or remedy
hereunder preclude any other or further exercise thereof or the exercise of any
other right or remedy. The rights and remedies of the holder hereof as herein
specified are cumulative and not exclusive of any other rights or remedies which
such holder may otherwise have.
No rescission, waiver, forbearance, release or amendment of any
provision of this Note shall be made, except by a written agreement duly
executed by the undersigned and the holder hereof.
This Note shall be governed by the laws of the State of New York. The
undersigned agrees to pay all costs and expenses incurred by the holder hereof
in enforcing this Note, including, without limitation, actual attorneys' fees
and disbursements.
NAPCO Security Systems, Inc.
By: /s/ KEVIN BUCHEL
Kevin Buchel
Senior Vice President
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FOR VALUE RECEIVED, the undersigned (jointly and severally, if more
than one) irrespective of the genuineness, validity, regularity or
enforceability of this Note, hereby indorse(s) and unconditionally guarantees
to any holder of this Note the full and prompt payment of the indebtedness
evidenced by this Note when due by acceleration or otherwise; agree(s) to all
the terms and conditions of this Note; and consent(s) that from time to time,
without notice to the undersigned and without affecting any liability of the
undersigned, any collateral for payment of such indebtedness may be exchanged,
released, surrendered, sold (whether on foreclosure or otherwise), applied or
otherwise dealt with by, and at the election of any holder hereof, any time of
payment under this Note may be extended or accelerated in whole or in part, and
this Note may be renewed in whole or in part.
The undersigned waive(s) presentment, protest and demand and also
notice of dishonor, protest and demand.
Alarm Lock Systems, Inc.
By: /s/ KEVIN BUCHEL
Kevin Buchel
Vice President
UMI Manufacturing Corp.
By: /s/ KEVIN BUCHEL
Kevin Buchel
Vice President
E.E. Electronic Components Inc.
By: /s/ KEVIN BUCHEL
Kevin Buchel
Vice President
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Derringer Security Systems, Inc.
By: /s/ KEVIN BUCHEL
Kevin Buchel
Vice President
Raltech Logic, Inc.
By: /s/ KEVIN BUCHEL
Kevin Buchel
Vice President
NAPCO Security Systems
International, Inc.
By: /s/ KEVIN BUCHEL
Kevin Buchel
Vice President
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