UPDATE 1-Allen-Vanguard gets waiver on financial covenant

* Reaches agreement with Lending Syndicate

* Deal waives compliance with certain financial covenant

July 13 (Reuters) - Security equipment maker Allen Vanguard Corp VRS.TO on Monday said it inked an agreement with a syndicate of lenders that waives compliance regarding a certain financial covenant for the month of May.

The Ottawa-based company, which specializes in jamming systems that prevent detonation of remote-controlled bombs, has been battling with mounting debt and has cut jobs, closed offices to save costs.

Allen-Vanguard said the agreement waives compliance with a certain financial covenant under the existing credit agreement with the lenders dated December 29, 2008, as amended.

On July 2, the company had reached a deal with its lenders to defer the repayment of $4.8 million in quarterly principal. Shares of the company closed at C$0.14 Friday on the Toronto Stock Exchange.

(Reporting by Chakradhar Adusumilli in Bangalore, Editing by Dinesh Nair)