LOAN AGREEMENT
Dated: October 12, 1999
NAME OF BORROWER:
VICON INDUSTRIES, INC.
PRINCIPAL PLACE OF BUSINESS:
00 Xxxxx Xxxxx Xxxxxxxxx Xxxxxxx XX 00000
Street & No. City/Town County State Zip
Code
STATE OF INCORPORATION:
New York State
1. PREAMBLE
The Borrower has requested KEYBANK NATIONAL ASSOCIATION (the "Bank" or
"Lender"), a national banking association, with an office for the transaction of
business located at 0000 Xxxxx Xxxxxxx, Xxxxxxxx, Xxx Xxxx 00000 to grant (i) a
mortgage loan in the amount of ONE MILLION TWO HUNDRED THOUSAND ($1,200,000)
DOLLARS (the "Loan") to the Borrower, and the Bank is willing to do so but only
upon the terms and conditions of:
(a) this Loan Agreement (the "Agreement"),
(b) a Mortgage Note (the "Mortgage Note"), dated on even date herewith,
(c) a third Mortgage and Security Agreement dated on even date herewith
covering the Premises (hereinafter defined)(collectively, the "Mortgage"),
(d) an Assignment of Leases and Rents covering the Premises
(the "Assignment of Rents"),
(e) and other documents executed or provided by Borrower in connection
with this transaction (this Agreement, the Note, the Mortgage, the Assignment of
Rents, and the other documents are hereinafter collectively referred to as, the
"Loan Documents").
2. USE OF LOAN PROCEEDS
The Borrower will use the Loan proceeds in connection with the propert
located at 00 Xxxxx Xxxxx, Xxxxxxxxx, Xxx Xxxx 00000 (the "Premises").
3. LOAN PAYABLE IN ACCORDANCE WITH NOTE.
The Loan shall be payable as provided for in the Note. The Bank, in
addition to its legal right of setoff shall be entitled to debit any accounts
maintained by Borrower with the Bank for payment due under the Note.
4. INTEREST
The Loan shall bear interest computed at a rate (the "Interest Rate")
as set forth in the Note.
5. SECURITY
As collateral security for the payment of all present and future debts,
obligations and liabilities of the Borrower to the Bank, including but not
limited to those set forth in the Note (collectively, the "Obligations"), the
Borrower will grant to the Bank a security interest in all of the following (the
"Collateral"):
(a) a security interest in and assignment and pledge of all monies,
deposits or other sums now or hereafter held by the Bank on deposit, in
safekeeping, transit or otherwise, at any time credited by or due from the Bank
to the Borrower, or in which the Borrower shall have an interest;
(b) a third mortgage lien on the property located 00 Xxxxx Xxxxx,
Xxxxxxxxx, Xxx Xxxx 00000 evidence by the Mortgage; and
(c) an assignment of leases and rents from the Premises.
From time to time, the Borrower will execute and deliver to the Bank
such assignments, agreements, documents, Uniform Commercial Code ("UCC") forms
and other papers as the Bank may request in connection with the granting,
perfection or continuation of the security interests granted hereunder. Borrower
hereby authorizes the Bank to file at any time UCC forms signed only by the Bank
or copies thereof or of this Agreement.
6. CONDITIONS TO LOAN
(a) Conditions Precedent. Borrower agrees that prior to or in any event
no later than the time of the closing of the Loan under this Agreement, it will
deliver to the Bank:
(1) Certified copies of corporate resolutions authorizing the
execution and delivery of all Loan Documents;
(2) Certificate of good standing from the Secretary of State
of New York and any other state or foreign country where
Borrower is doing business as to Borrower;
(3) Proof satisfactory to the Bank that the Borrower is
authorized to do business in the State of New York;
(4) New York State franchise tax search as to Borrower;
(5) A Certificate of incumbency as to Borrower;
(6) Certificates of insurance for any insurance required
pursuant to this Agreement or any of the Loan Documents;
(7) UCC searches satisfactory to the Bank;
(8) Duly executed UCC financing statements;
(9) Duly executed Loan Documents;
(10) An opinion from counsel for the Borrower as to such
matters as may be deemed appropriate by the Bank and its
counsel;
(11) Payment by the Borrower of all costs and expenses
incurred by the Bank in establishing the Loan.
(b) Financial Reporting Requirements. The Borrower agrees as
follows:
(1) Borrower shall furnish annually to the Bank, audited
Financial Statements of Assets and Liabilities, together with
Profit and Loss Statements and Borrower's Form 10K, not later
than ninety (90) days following the close of the Borrower's
Fiscal Year, which Financial Statements shall be prepared on a
consolidated basis by an independent Certified Public
Accountant (CPA), reasonably satisfactory to the Bank, in
accordance with Generally Accepted Accounting
Principles(GAAP), including the report/letter, all statements
and all footnotes.
(2) Annually, within 90 days of its Fiscal Year End and
quarterly within 60 days of each quarter end, Borrower shall
submit compliance certificates setting forth Borrower's
calculations of and demonstrating compliance with its
Financial Covenants pursuant to this Agreement and further
certifying that, to the best of its knowledge, no Event of
Default has occurred hereunder or is occurring or, if a
default or Event of Default has occurred or is occurring, then
how same shall be cured within thirty (30) days. The
compliance certificates must be duly executed by the Borrower.
(3) Annually, within 90 days of each fiscal year end and
quarterly, within 60 days of each quarter end, Borrower shall
submit management prepared consolidating financial statements.
(4) The Borrower shall, within 60 days following each quarter
end, furnish to the Bank a copy of its Form 10-Q and
consolidated Financial Statements.
(5) Annually, Borrower shall submit its budget for the
upcoming year including projected Profit and Loss Statements
and a Balance Sheet, said budget to be delivered with
Borrower's Year End Financial Statements.
(6) Borrower shall submit such other financial documentation
to the Bank as the Bank may reasonably require so long as the
Loan is outstanding.
(7) Failure to deliver financial information within fifteen
(15) days of the date specified will constitute an Event of
Default hereunder.
(c) Financial Covenants. Except for Section 6(c)5 below, the following
financial covenants are intended to duplicate those contained in the
$14,000,000.00 credit agreement (the "Credit Agreement") between the Lender and
Borrower dated July 20, 1998. For so long as the Credit Agreement remains in
effect, including all extension and renewal periods, all modifications or
waivers of financial covenants under the Credit Agreement will also modify or
waive the corresponding financial covenants under this Loan Agreement. At the
termination of the Credit Agreement if prior to the termination of the Loan
Agreement, the then effective and governing financial covenants under the Credit
Agreement will be deemed to be the effective financial covenants under the Loan
Agreement and same will be confirmed in writing by an agreement to be executed
by the Borrower and the Lender.
The Borrower covenants and agrees that, from and after the date of execution of
this Agreement, and so long as any amount may be borrowed hereunder or remains
unpaid on account of the Note or is otherwise due to the Bank under this
Agreement or any related document, Borrower shall comply with each of the
following covenants:
(1) Net Income. Borrower shall on a consolidated
basis (i) maintain a positive Net Income on a fiscal year
basis, (ii) not have two consecutive fiscal quarters in which
it has net losses that total in excess of $500,000.00 and
(iii) not have net losses for four consecutive fiscal quarters
that total in excess of $800,000.00.
(2) Maximum Liabilities to Worth Ratio. Borrower
shall maintain on a consolidated basis at all times a ratio of
Total Liabilities to Tangible Net Worth of not more than
1.50:1.0.
(3) Debt Coverage Ratio. Borrower shall maintain on a
consolidated basis at all times a Debt Coverage Ratio of not
less than 1.25:1.0, to be tested quarterly on a rolling four
quarter basis.
(4) Capital Expenditures. Borrower shall not make any
Capital Expenditures in excess of $2,000,000.00 during any
fiscal year, excluding Capital Expenditures incurred in
Borrower's one time expansion of its facility on Arkay Drive,
Hauppauge, New York and Acquisitions identified as Permitted
Acquisitions under section 9.07 of the Credit Agreement,
including acquisitions permitted by waiver or modification to
such Credit Agreement.
(5) Modification/Release of Financial Covenants.
Notwithstanding anything to the contrary herein, upon the
written request of Borrower to the Lender, (i) the Debt
Coverage Ratio set forth above shall be increased to 1.3:1.0
to be tested as hereinafter set forth, and (ii) Capital
Expenditures, the Maximum Liabilities to Worth Ratio and Net
Income financial covenants set forth above shall be released
PROVIDED Borrower has complied with all of the following:
(a) The Loan to Value Ratio must be
decreased to sixty-five (65%) percent or less(either
by normal amortization and/or a partial prepayment);
(b) Borrower has provided a new appraisal of
the Premises to the Bank evidencing a Loan to Value
Ratio of sixty-five (65%) percent or less prepared by
a Bank approved appraiser and in form satisfactory to
the Bank; and
(c) Borrower is not in default under any of
the Loan Documents (as defined in the Loan
Agreement).
(6) Determination of Compliance. Compliance with
these financial covenants shall be determined by reference to
the financial statements of Borrower calculated for Borrower
and its Subsidiaries delivered to Lender and shall exclude any
balance sheet information or results of operations of any
Subsidiary which is not also a Guarantor. All financial
covenants shall be applicable at all times and shall be tested
at the end of each fiscal quarter except as set forth in
paragraph 6(c)(1) above.
(7) DEFINITIONS.
"Acquisition" means any transaction pursuant to which
Borrower or any of its Subsidiaries (i) acquires equity
securities (or warrants, option or other rights to acquire
such securities) of any corporation, partnership, limited
liability company or other business organization, or any
Person which is not then a Subsidiary of Borrower, pursuant to
a solicitation of tenders thereof, or in one or more
negotiated block, market or other transactions not involving a
tender offer, or a combination of any of the foregoing, or
(ii) makes any Person not then a Subsidiary of Borrower a
Subsidiary of Borrower, or causes any such Person to be merged
into or purchased by Borrower or any of its Subsidiaries, in
any case pursuant to a merger, purchase of assets or any
reorganization providing for the delivery or issuance to the
holders of such Person's then outstanding securities, in
exchange for such securities, of cash or securities of
Borrower or any of its Subsidiaries, or a combination thereof,
or (iii) purchases all or substantially all of the business or
assets of any Person.
"Affiliate" means, with respect to any Person, any
Person (i) that directly or indirectly controls, or is
controlled by, or is under common control with, such Person,
(ii) that directly or indirectly beneficially owns or holds 5%
or more of any class of voting stock of such Person, (iii) 5%
or more of the voting stock of which is directly or indirectly
beneficially owned or held by such Person, (iv) which is a
partnership or limited liability company in which such Person
is respectively a general partner or manager or (v) who is
among such Person's officers, directors joint venturers,
managers or partners. The term "control" means the possession,
directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether
through the ownership of voting securities, by contract, or
otherwise.
"Amortization" means amortization as determined in
accordance with GAAP.
"Capital Expenditures" means expenditures for any
fixed assets or improvements, replacements, substitutions, or
additions thereto which have a useful life of more than one
year.
"Capital Lease" means any lease which is required to
be capitalized on the balance sheet of the lessee in
accordance with GAAP.
"Xxxx Xxxx" means Xxxx Xxxx Industries, Inc., a
corporation formed under the laws of the Republic of Korea.
"Current Debt" means, on the date of determination
with respect to any Person, that portion of such Person's long
term debt, including Capital Leases and the outstanding
principal balance of the Term Loan, that is due and payable
within the next 12 months. Current Debt shall exclude all
Revolving Credit Loans.
"Debt" means, with respect to any Person (i)
indebtedness of such Person for borrowed money, (ii)
indebtedness relating to the acquisition of property where the
full purchase price is not paid at the time such property is
acquired but is required to be paid, in whole or in part,
thereafter (excluding trade debt and accounts payable), (iii)
the face amount of any outstanding letters of credit issued
for the account of such Person, (iv) obligations arising under
acceptance facilities, (v) guaranties and endorsements (other
than endorsements for collection in the ordinary course of
business) under which such Person has a direct, non-contingent
payment or performance obligation, (vi) other direct,
non-contingent obligations to purchase, to provide funds for
payment, to supply funds to invest in any Person, or otherwise
to assure a creditor against loss, (vii) obligations secured
by any Lien on property of such Person, (viii) obligations of
such Person as lessee under Capital Leases and (ix)
indebtedness of such Person evidenced by a note, bond,
indenture or similar instrument.
"Debt Coverage Ratio" means (i) the consolidated
EBITDA of Borrower and its Subsidiaries, minus any cash
Dividends paid or declared to be paid to shareholders of
Borrower for the prior 12 month period, (ii) divided by the
sum of the Current Debt (including Current Xxxx Xxxx
Acquisition Debt, except as provided below) and Interest
Expense of Borrower and its Subsidiaries all on a consolidated
basis, as determined at the end of each fiscal quarter, based
upon Borrower's financial statements delivered in accordance
with the Loan Agreement. If Borrower completes an Acquisition
of Xxxx Xxxx under terms where all or part of the Acquisition
price is payable following consummation of the Acquisition
("Xxxx Xxxx Acquisition Debt"), and if, at the date of
determination of Debt Coverage Ratio, the amount of the
Revolving Credit Commitment then available to Borrower
hereunder equals or exceeds that portion of the Xxxx Xxxx
Acquisition Debt which is due and payable within the next 12
months ("Current Xxxx Xxxx Acquisition Debt"), then 50% of the
Current Xxxx Xxxx Acquisition Debt shall be excluded from
Current Debt for the purposes of computing the Debt Coverage
Ratio.
"Depreciation" means depreciation as determined in
accordance with GAAP.
"Dividends" means, for any period, dividends paid by
Borrower or any Subsidiary during such period.
"EBITDA" means, for any period, the sum of (i) Net
Income, (ii) income taxes paid or payable to any government or
government instrumentality, (iii) all Interest Expense paid or
accrued on any Debt, (iv) Depreciation and (v) Amortization
during such period.
"GAAP" means generally accepted accounting principles
in the United States of America as in effect from time to
time, applied on a basis consistent with those used in the
preparation of the Borrower's financial statements.
"Guarantors" means Vicon Industries International
Sales Corp., Vicon Industries Foreign Sales Corp. and
each future Subsidiary which is required to become a party to
the Guaranty in accordance with the Credit Agreement.
"Interest Expense" means interest expense of Borrower
and its Subsidiaries on a consolidated basis for a particular
period as reflected in its financial statements and calculated
in accordance with GAAP.
"Lien" means any lien (statutory or otherwise),
security interest, mortgage, deed of trust, priority, pledge,
charge, conditional sale, title retention agreement, Capital
Lease or other encumbrance or similar right of others, or any
agreement to give any of the foregoing.
"Net Income" means with respect to any Person for any
period, such Person's net income after taxes for such period
as reflected on such Person's financial statements.
"Person" means an individual, partnership,
corporation, business trust, joint stock company, trust,
limited liability company, unincorporated association, joint
venture, governmental authority or other entity of whatever
nature.
"Revolving Credit Commitment" means the obligation of
the Lender to extend revolving credit to Borrower in
accordance with the terms of a certain credit agreement (the
"Credit Agreement") dated July 20, 1998 in the aggregate
principal amount not to exceed $7,500,000.00, or if Borrower
elects to increase the Revolving Credit Commitment,
$9,500,000.00, as such amount may be reduced or otherwise
modified from time to time in accordance with the terms of
said Credit Agreement.
"Revolving Credit Loans" mean any Revolving Credit
Loan made by the Lender to the Borrower under the Credit
Agreement.
"Revolving Credit Termination Date" means the earlier
of (i) the date on which the Revolving Credit Loan is paid in
full and the Revolving Credit Commitments shall terminate and
the obligations of Borrower in connection therewith have been
satisfied or (ii) the date four years from the date of the
Revolving Credit Commitment unless such date is not a Banking
Day, then the next succeeding Banking Day.
"Subsidiary" means, as to any Person, any
corporation, partnership, limited liability company or other
business organization or entity of which at least a majority
of the securities or other ownership interests having ordinary
voting power (absolutely or contingently) for the election of
directors or other persons performing similar functions are at
the time owned directly or indirectly by such Person. For the
purposes of the financial covenants set forth in Article 10
under the Credit Agreement and in the Modification Agreement
and the definitions of Current Debt, Debt, Debt Coverage
Ratio, EBITDA, Interest Expense, Net Income, Tangible Net
Worth, Total Assets and Total Liabilities, the balance sheet
information and results of operations of Vicon U.K. and any
other Subsidiary which is not a Guarantor under the Credit
Agreement shall be excluded.
"Tangible Net Worth" means, at any particular date,
the amount of excess of Total Assets over Total Liabilities
which would, in accordance with GAAP, be included under
shareholders' equity on a consolidated balance sheet of
Borrower and its Subsidiaries as at such date. There shall be
excluded from the determination of Total Assets all intangible
assets, including, without limitation, organization expenses,
patents, trademarks, copyrights, goodwill, covenants not to
compete, research and developmental costs, training costs,
treasury stock, deferred charges and any loans receivable from
officers or Affiliates, other than loans receivable from
Affiliates incurred as a result of sales of goods in the
ordinary course of business.
"Term Loan" means the Term Loan made to Borrower by
Lender under the Credit Agreement.
"Total Assets" means, at a particular date, all
amounts which would, in accordance with GAAP, be included
under assets on a consolidated balance sheet of Borrower and
its Subsidiaries as at such date.
"Total Liabilities" means, at a particular date, all
amounts which would, in accordance with GAAP, be included
under liabilities on a consolidated balance sheet of Borrower
and its Subsidiaries as at such date.
7. REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants that:
(a) The Borrower is a corporation duly organized and existing under the
laws of the State of New York and is authorized to do business in the State of
New York and, that it has full corporate power to execute this Agreement, the
Note and all other Loan Documents and do all things required of it hereunder,
and that the Borrower's main office for doing business is as indicated at the
beginning of this Agreement;
(b) The Borrower maintains offices at the following location(s):
00 Xxxxx Xxxxx, Xxxxxxxxx, Xxx Xxxx 00000;
(c) The Borrower's most recent financial statement as submitted to the
Bank fairly represents the Borrower's financial condition as of the dates shown;
that the Borrower is the owner of all of the assets and property as shown in the
financial statement, subject to no liens, encumbrances or charges whatever other
than as set forth in said financial statement, and that the Borrower has no
liabilities other than shown on said financial statement;
(d) The Borrower is the owner of the Collateral, free and clear of any
liens, claims or rights of any other party, except as listed in Schedule A;
(e) There is no action, litigation, suit, proceeding, inquiry or
investigation, at law or in equity, or before or by any court, public board or
body, pending, threatened against or affecting the Borrower which involves the
possibility of materially adversely affecting the property, business, profits or
conditions (financial or otherwise) of the Borrower;
(f) The Borrower has filed all required federal, state and local tax
returns and has paid all taxes shown on such returns as they become due;
(g) The execution and delivery of this Agreement, and all other Loan
Documents will not violate any provision of this Agreement or of any other
agreement or instrument to which the Borrower is a party for which waivers of
same have not been obtained;
(h) All necessary corporate action to authorize the Borrower's entry
into this Agreement and the execution of the Loan Documents has been taken and
that the Loan Documents when executed by the Borrower shall be valid and binding
obligations of the Borrower enforceable in accordance with their terms;
(i) The execution, delivery and performance of the Loan Documents, the
consummation of the transactions therein contemplated and compliance with the
provisions of each by the Borrower does not and will not (i) conflict with,
violate or result in a breach of any of the terms or provisions of the
certificate of incorporation or by-laws of the Borrower, (ii) require consent
which has not hereto been received or will result in a breach or default of any
credit agreement, indenture, purchase agreement, mortgage, deed of trust,
commitment, guaranty agreement, or any other instrument to which the Borrower is
a party, or by which the Borrower may be bound or affected for which waivers of
same have not been obtained, or (iii) conflict with or violate any existing law,
rule, regulation, judgment, order or decree of any government, governmental
instrumentality, or court, domestic or foreign, having jurisdiction over the
Borrower or any of its properties;
(j) The Borrower possesses all licenses, trademarks, trademark rights,
and tradenames which are required for the conduct of its business without
conflict with the rights of others.
8. NEGATIVE COVENANTS
While the Loan remains outstanding, the Borrower agrees that it will
not, without prior written consent of the Bank:
(a) Merge or consolidate with any other person, firm, corporation or
business if (i) Borrower is not the surviving corporation, or (ii) the surviving
entity has a lower credit rating than Borrower; or
(b) Sell, lease, assign, transfer or otherwise dispose of any
significant assets or property, except in the normal course of business as
presently conducted, and for full and adequate consideration.
9. AFFIRMATIVE COVENANTS
While the Loan remains outstanding, the Borrower agrees that it will:
(a) Make all payments required under the Note;
(b) Furnish the Bank with copies of Financial Statements and other
financial documentation as set forth herein;
(c) Pay and discharge any and all taxes, assessments and governmental
charges on the due date thereof, unless the same are being contested by the
Borrower in good faith and provided such contest does not impair the Bank's
security;
(d) Timely comply with all of the terms and conditions of the Loan
Documents;
(e) Keep all of its property insured by insurance companies licensed to
do business in New York and in such other state(s) where the property is located
against loss or damage by fire or other risk usually insured against by other
owners or users of such properties in similar businesses under extended coverage
endorsement and against theft, burglary, and pilferage together with such other
hazards as the Bank may from time to time reasonably request, in amounts
satisfactory to the Bank. The Borrower shall deliver the policy or policies of
such insurance to the Bank. All such insurance shall contain endorsements in
form satisfactory to the Bank providing that the insurance shall not be
cancelable except upon thirty (30) days prior written notice to the Bank and
showing the Bank as a party insured as its interest may appear. The Borrower
shall promptly notify the Bank of any event or occurrence causing a material
loss or decline in value of property insured or the existence of an event
justifying a material claim under any insurance and the estimated amount
thereof;
(f) Keep the Bank fully informed as to all matters that may affect the
Loan;
(g) Preserve and maintain its assets and keep the same in good order
and condition;
(h) If the Bank so reasonably requires, provide the Bank with an
appraisal or appraisals of the Premises subsequent to the closing of the Loan
but not more often than once every twelve (12) months except as otherwise set
forth herein.
All costs of such future appraisals shall be paid by the Borrower.
10. DEFAULT
Each of the following shall be an "Event of Default" under this
Agreement:
(a) The occurrence of an Event of Default under the Note, any of the
Loan Documents; or
(b) Borrower shall fail to perform any other obligation required to be
performed under this Agreement or any other Loan Document, for thirty (30) days
after receipt of notice from the Bank of such failure; or
(c) Any warranty, representation or other statement by or on behalf of
Borrower in any Loan Document or instrument furnished in compliance with or in
reference to any Loan Document proves in the Bank's reasonable opinion to be
false or misleading in any material respect; or
(d) Borrower shall generally not be paying debts as they become due or
file a petition or seek relief under or take advantage of any insolvency law;
make an assignment for the benefit of creditors; commence a proceeding for the
appointment of a receiver, trustee, liquidator, custodian or conservator of
Borrower or of the whole or substantially all of Borrower's property or of any
collateral pledged as security for the Note; or if Borrower shall file a
petition or an answer to a petition under any chapter of the Bankruptcy Reform
Act of 1978, as amended (or any successor statute thereto), or file a petition
or seek relief under or take advantage of any other similar law or statute of
the United States of America, any State thereof, or any foreign country or
subdivision thereof; or
(e) A Court of competent jurisdiction shall enter an order, judgment or
decree appointing or authorizing a receiver, trustee, liquidator, custodian or
conservator of Borrower or of the whole or substantially all of Borrower's
property, or any portion of the collateral pledged as security for the Note, or
enter an order for relief against Borrower in any case commenced under any
chapter of the Bankruptcy Reform Act of 1978, as amended (or any successor
statute thereto), or grant relief under any other similar law or statute of the
United States of America, any State thereof, or any foreign country or
subdivision thereof and the same is not stayed or discharged within sixty (60)
days of entry; or
(f) Under the provisions of any law for the relief or aid of debtors, a
court of competent jurisdiction or a receiver, trustee, liquidator, custodian or
conservator shall assume custody or control or take possession from Borrower of
all or substantially all of Borrower's property or any portion of any collateral
pledged as security for the Note; or
(g) There is commenced against Borrower any proceeding for any of the
foregoing relief or if a petition is filed against Borrower under any chapter of
the Bankruptcy Reform Act of 1978, as amended (or any successor statute
thereto), or under any other similar law or statute of the United States of
America, any State thereof, or any foreign country or subdivision thereof, and
such proceeding or petition remains undismissed for a period of sixty (60) days
or if Borrower by any act indicates consent to, approval of or acquiescence in
any such proceeding or petition; or
(h) The Bank receives a notice to creditors with regard to a bulk
transfer by Borrower pursuant to Article VI of the Uniform Commercial Code; or
(i) In the event that (a) any entity then having a lesser credit rating
than Borrower shall acquire beneficial ownership of a majority interest in the
voting stock of Borrower, or (b) the Borrower shall merge with such an entity
and shall not be the surviving corporation; or
(j) Borrower shall fail to satisfy a final judgment entered against it
for the payment of money within thirty (30) days from entry or affirmance, and
in any event, prior to any execution or enforcement thereof; or
(k) Borrower shall be in default under any other agreement or document
with the Bank; or
(l) Borrower shall fail to obtain and deliver to Lender a certificate
of occupancy (or certificate of compliance) for the open permit on the Premises
identified as Permit number 101969 with the Town of Smithtown within one hundred
twenty (120) days of the date hereof.
If an Event of Default occurs or, if an event which, but for the
passage of time, the giving of notice or both (unless same is required under the
Loan Documents), would constitute an Event of Default, the Bank may declare the
Loan and any other Obligations to be immediately due and payable and the Bank
shall have, in addition to all other rights and remedies including those set
forth in the Mortgage and in the Assignment of Leases and Rents, those of a
secured party under the Uniform Commercial Code of the State of New York
including without limitation, the right to institute foreclosure proceedings and
the right to take possession of all Collateral, and for that purpose the Bank
may enter the Premises where the Collateral may be situated and remove the same
therefrom without legal process. At the request of the Bank, if applicable,
Borrower (i) will disclose the exact location of any personal property
Collateral, (ii) assist in the collection of any personal property Collateral,
and (iii) assemble any personal property Collateral at a place to be designated
by the Bank. The requirements of reasonable notice shall be met if the Bank
gives to the Borrower at least five (5) days prior written notice of the time
and place of any public sale of any personal property Collateral or if the time
after which any private sale or any other intended disposition is to be made.
For the purpose of realizing the Bank's rights in the Collateral, the Bank may
endorse notes, checks, drafts, money orders, documents of title or other
evidences of payment, shipment or storage or endorse any other forms of
Collateral on behalf of and in the name of Borrower and may compromise and
settle claims and otherwise generally deal with the Collateral. The Borrower
hereby irrevocably appoints the Bank as its lawful attorney-in-fact with full
power of substitution for the Borrower in its name, place and stead to take all
actions with respect to the Collateral permitted hereunder.
Any sale or disposition of Collateral by the Bank shall be done in a
commercially reasonable manner. All decisions with respect to sale or
disposition of the Collateral shall be made solely by the Bank.
All proceeds received from the disposition and/or collection of
Collateral shall be applied by the Bank, in its discretion and in such order as
it elects, to (i) the payment of all expenses incurred in connection with the
sale and/or collection of the Collateral, including reasonable attorney's fees
and other expenses and disbursements and the reasonable expenses of retaking,
collecting, holding, preparing for sale, sale and the like and (ii) the payment
of all interest, principal and other sums due under the Loan Documents.
11. INDEMNIFICATION
The Bank by virtue of the pledge and assignment of the Collateral to it
hereunder shall not be deemed to have assumed the Borrower's obligations under
the Collateral or be responsible for servicing the Collateral and the Borrower
shall and does hereby agree to defend, indemnify and hold the Bank harmless of
and from any and all liability of any name, nature or kind which may arise or be
alleged to have arisen as a result of the pledge and assignment of the
Collateral to the Bank hereunder.
12. FEES AND EXPENSES
All filing fees, recording costs and all other fees or charges,
including reasonable attorneys fees, incurred by the Bank in connection with the
preparation of this Agreement and the other Loan Documents and in perfecting and
defending the Bank's security interests in the Collateral and its rights
hereunder, shall be deemed to be sums payable under the Note and secured by the
Collateral and shall be paid by the Borrower on demand.
13. GENERAL PROVISIONS
(a) Inspection. The Bank may examine the Borrower's books and records
with respect to the Collateral and this Agreement at all reasonable times to
insure compliance with the terms of the Loan Documents. Additionally, the
Borrower hereby agrees to allow the Bank, its personnel and representatives,
access to the Borrower's books and records for the purpose of conducting
periodic audits. Such audits shall be done as frequently as the Bank may
reasonably determine is necessary and Borrower shall pay the Bank an audit fee
of $650.00 per audit, it being understood that audit fees shall be charged only
at such times as an Event of Default has occurred and is continuing.
(b) Notice To Others. The Bank may, upon the occurrence of an Event of
Default or upon the occurrence of an event which, but for the passage of time,
the giving of notice or both unless same is required under the Loan Documents,
would constitute an Event of Default, notify any party obligated to make
payments to Borrower under any lease of the Premises or portion , to make
payment directly to the Bank.
(c) Paragraph Headings. Paragraph headings are for convenience and
shall not operate to change or modify any of the terms of this Agreement.
(d) Partial Invalidity. The invalidity or unenforceability of any
clause or part of this Agreement or any other Loan Documents shall not affect
the validity or enforceability of any other clause or part hereof.
(e) Waiver. Any waiver by the Bank of any breach or of any Event of
Default shall not be deemed a waiver of any other breach or Event of Default of
the same or any other provision.
(f) Rights Cumulative. All of the Bank's rights, remedies and powers,
whether pursuant to this Agreement or any other Loan Document or otherwise
("Rights") shall be cumulative and may be exercised independently or
concurrently, partially or wholly, and as often as the Bank deems expedient. No
delay or omission in exercising such Right or any other Right shall be construed
as a waiver or acquiescence to an Event of Default. Waiver of a Right or an
Event of Default on any one occasion shall not bar or be a waiver of such Right
or Event of Default on any future occasion.
(g) Governing Law. This Agreement shall be governed by the laws of the
State of New York.
(h) Waiver Of Jury Trial. The parties hereto hereby waive trial by jury
in any litigation in any court with respect to, in connection with, or arising
out of this Agreement, any other Loan Document or the Loan, or any instrument or
document delivered in connection with the Loan, or the validity, protection,
interpretation, collection or enforcement thereof, or any other claim or dispute
howsoever arising between the Borrower and the Bank.
(i) Notices. All notices and communications under this Agreement,
except those communications permitted by the terms of this Agreement to be made
by telephone, shall be: (i) personally delivered or (ii) forwarded by overnight
courier service, in each instance addressed to the addresses hereinafter set
forth, or such other addresses as the parties may for themselves designate in
writing as provided herein for the purpose of receiving notices hereunder. All
notices shall be in writing and shall be deemed given, in the case of notice by
personal delivery, upon actual delivery, and in the case of courier service,
upon delivery to the courier service as follows:
If to Bank:
KeyBank National Association
0000 Xxxxx Xxxxxxx
Xxxxxxxx, Xxx Xxxx 00000
Attn: Xxxxx X. Xxxxxxxx, Vice President
If to Borrower:
Vicon Industries, Inc.
00 Xxxxx Xxxxxxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxxx, President
(j) Bank Approval. All Loan Documents and all other documents delivered
by Borrower to the Bank must be acceptable to the Bank and its Counsel.
(k) Entire Agreement. This Agreement and the other Loan Documents
constitute the complete agreement of the parties with respect to the subject
matters referred to herein and supersede all prior or contemporaneous
negotiations, promises, covenants, agreements or representations of every nature
whatsoever with respect thereto, all of which have become merged and finally
integrated into this Agreement. Each of the parties understands that in the
event of any subsequent litigation, controversy or dispute concerning any of the
terms, conditions or provisions of this Agreement, neither shall be permitted to
offer or introduce any oral evidence concerning any other oral promises or oral
agreements between the parties relating to the subject matter of this Agreement
not included or referred to herein and not reflected by a writing signed by the
Bank.
(l) Counterparts. This Agreement may be executed in counterparts and
any combination or group of counterparts bearing, in the aggregate, the
signatures of all of the parties hereto shall be deemed one Agreement and
sufficient execution of the within Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
VICON INDUSTRIES, INC. KEYBANK NATIONAL ASSOCIATION
By:____________________ By:_________________________
Xxxx Xxxxx Xxxxx X. Xxxxxxxx
Vice President-Finance Vice President
STATE OF NEW YORK )
) SS.:
COUNTY OF SUFFOLK )
On the 12th day of October, 1999, before me, the undersigned,
personally appeared XXXX XXXXX, personally known to me or proved to me on the
basis of satisfactory evidence to be the individual 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 individual, or the
person on behalf of which the individual acted, executed the instrument.
NOTARY
STATE OF NEW YORK )
) SS.:
COUNTY OF SUFFOLK )
On the 12th day of October, 1999, before me, the undersigned,
personally appeared XXXXX X. XXXXXXXX, personally known to me or proved to me on
the basis of satisfactory evidence to be the individual 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 individual, or the
person on behalf of which the individual acted, executed the instrument.
NOTARY
SCHEDULE "A"
PRIOR LIENS, CLAIMS OR RIGHTS OF
OTHERS IN AND TO COLLATERAL
KEYBANK NATIONAL ASSOCIATION
