EXHIBIT 10.2
THIS NOTE IS SUBJECT TO THE TERMS OF A SUBORDINATION AGREEMENT
DATED DECEMBER 27, 1995 EXECUTED BY CHUGAI BOYEKI COMPANY
LIMITED, CHUGAI BOYEKI (AMERICA) CORP. AND VICON INDUSTRIES, INC.
IN FAVOR OF IBJ XXXXXXXX BANK & TRUST COMPANY
SECURED PROMISSORY NOTE
$2,000,000 Melville, New York
As of October 5, 1993
FOR VALUE RECEIVED, VICON INDUSTRIES, INC., a New York corporation
(the "Maker") promises to pay to the order of CHUGAI BOYEKI COMPANY LIMITED, a
Japanese corporation (together with its successors and assigns, the "Payee"), on
July 1, 1998 at its office located at 0-00-00 Xxxxxxxxxx, Xxxxxx, Xxxxx, Xxxxx,
or such other place as the Payee may specify, in lawful money of the United
States of America and in immediately available funds the principal amount of TWO
MILLION U.S. DOLLARS ($2,000,000) or, if less than such principal amount, the
aggregate unpaid principal balance then outstanding of the Note; without setoff
or counterclaim and free and clear of, and without deduction for or on account
of, any present or future stamp or other taxes, withholdings, restrictions or
conditions of any nature.
The Maker further promises to pay interest in like money on the
unpaid principal balance of this Note from time to time outstanding until paid
in full at a rate (computed on the basis of a 360 day year for actual days
elapsed) equal to one percent (1%) in excess of the rate of interest adopted by
Sanwa Bank from time to time as its "prime rate" for loans in U.S. Dollars to
U.S. borrowers, which rate is not intended to be the lowest rate of interest
charged by Sanwa Bank. Interest shall be payable quarterly on the first day of
each calendar quarter commencing the first of such days to occur after the date
hereof, upon prepayment hereof (to the extent accrued on the amount to be
prepaid) and upon payment in full of the unpaid principal balance hereof. The
records of the holder shall constitute prima facie evidence of amounts paid
hereunder and the unpaid principal hereof and accrued interest hereunder.
Whenever any date for payment shall fall on a day that is not a
business day in New York City and Tokyo, such payment shall be made on the next
succeeding business day.
Upon the occurrence of any of the following events (each, an "Event
of Default"):
(a) Failure of the Maker to make any payment of principal or
interest in respect of this Note when due, which shall remain unpaid for a
period of 3 days after notice thereof shall have been given by the Payee
to the
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Maker; or failure of the Maker to make payment of any other sum arising
under any other obligation incurred under this Note when due, which shall
remain unpaid for a period of 5 days after notice thereof shall have been
given by the Payee to the Maker; or
(b) Failure by the Maker to perform any other term, condition or
covenant of this Note or any other agreement (including, without
limitation, the Security Agreement referred to below), instrument or
document delivered pursuant hereto or in connection herewith or therewith,
which shall remain unremedied for a period of 15 days after notice thereof
shall have been given by the Payee to the Maker; or
(c) (i) Failure of the Maker or any corporation of which the Maker,
alone, or the Maker and/or one or more of its Subsidiaries (as defined
below), owns, directly or indirectly, at least a majority of the
securities having ordinary voting power for the election of directors
(each, a "Subsidiary") to perform any term, condition or covenant of any
bond, note, debenture, loan agreement, indenture, guaranty, trust
agreement, mortgage or other instrument or agreement in connection with
the borrowing of money or the deferred purchase price of a fixed asset to
which the Maker or any Subsidiary is a party or by which it is bound, or
by which any of its properties or assets may be affected (each, a "Debt
Instrument"), so that, as a result of any such failure to perform
(regardless of the satisfaction of any requirement for the giving of
appropriate notice thereof or the lapse of time), such obligation for the
payment of borrowed money ("Indebtedness") included therein or secured or
covered thereby may be declared due and payable prior to the date on which
such Indebtedness would otherwise become due and payable; or
(ii) Any event or condition referred to in any Debt Instrument
shall occur or fail to occur, so that, as a result thereof (regardless of
the satisfaction of any requirement for the giving of appropriate notice
thereof or the lapse of time), the Indebtedness or the deferred purchase
price of a fixed asset included therein or secured or covered thereby may
be declared due and payable prior to the date on which such Indebtedness
would otherwise become due and payable; or
(iii) Any such Indebtedness included in any Debt
Instrument or secured or covered thereby is not paid when
due; or
(d) Any representation or warranty made in writing to the Payee in
the Security Agreement or in connection with this Note or in any
certificate, statement or report made in
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compliance with this Note or the Security Agreement, shall have been false
in any material respect when made; or
(e) An order for relief under the Federal Bankruptcy Code as now or
hereafter in effect, shall be entered against the Maker or any Subsidiary;
or the Maker or any Subsidiary shall become insolvent, generally fail to
pay its debts as they become due, make an assignment for the benefit of
creditors, file a petition in bankruptcy, be adjudicated insolvent or
bankrupt, petition or apply to any tribunal for the appointment of a
receiver or any trustee for it or a substantial part of its assets, or
shall commence any proceeding under any bankruptcy, reorganization,
arrangement, readjustment or debt, dissolution, or liquidation law or
statute of any jurisdiction, whether now or hereafter in effect; or if
there shall have been filed any such petition or application, or any such
proceeding shall have been commenced against it, which remains undismissed
for a period of 30 days or more; or the Maker or any Subsidiary or
endorser or guarantor hereof by any act or omission shall indicate its
consent to approval of or acquiescence in any such petition, application
or proceeding or the appointment of a receiver of or any trustee for it or
any substantial part of any of its properties, or shall suffer any such
receivership or trusteeship to continue undischarged for a period of 30
days or more; or
(f) Any judgment against the Maker or any Subsidiary or any
attachment, levy or execution against any of its properties for any amount
shall remain unpaid, unstayed on appeal, undischarged, unbonded or
undismissed for a period of 60 days or more; or
(g) Any action or proceeding affecting the Maker shall have been
commenced before any court, governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, which may result
in the seizure or forfeiture of any of its property which would cause a
material adverse effect upon the operations, business, properties or
financial condition of the Maker or on the ability of the Maker to perform
its obligations hereunder; or
(h) The Security Agreement shall at any time after its execution and
delivery and for any reason cease: (A) to create a valid and perfected
security interest in and to the property purported to be subject to the
Security Agreement; or (B) to be in full force and effect or shall be
declared null and void, or the validity or enforceability thereof shall be
contested by the Maker or the Maker shall deny that it has any further
liability or obligation under the Security Agreement, or the Maker shall
fail to perform any of its obligations under the Security Agreement; or
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(i) The Payee shall have determined, in its sole discretion, that
one or more conditions exist or events have occurred which may result in a
material adverse change in the business, properties or financial condition
of the Borrower;
then, in any such event, the Payee may, by notice of default to the Maker,
declare the principal amount then outstanding hereunder (with accrued interest
thereon) to be immediately due and payable; provided, however, that no such
notice shall be required upon the occurrence of any Event of Default described
in paragraph (e) hereof and upon the occurrence of such an Event of Default the
then outstanding principal amount hereunder shall automatically and, without
notice, become immediately due and payable.
After the stated or any accelerated maturity hereof, the aggregate
unpaid principal balance of this Note shall bear interest at a rate of two
percent (2%) per annum in excess of the rate in effect at such maturity;
provided, however, that no such post-maturity rate so payable hereunder shall be
in excess of the maximum permitted under any applicable law.
The Maker may prepay the full principal amount of this Note or any
portion hereof at any time upon three business days' prior notice to the Payee.
The obligations of the Maker under this Note are secured by a
Security Agreement of even date herewith between the Maker and the Payee (as the
same may be amended from time to time, the "Security Agreement") to which
Security Agreement reference is hereby made for a description of the nature and
extent of the security provided therein and the rights in respect of such
security of any holder of this Note.
The rights of the Payee under this Note are subject to a
Subordination Agreement (the "Subordination Agreement") dated as of December 27,
1995 among the Maker, the Payee, and IBJ Xxxxxxxx Bank & Trust Company to which
Subordination Agreement reference is hereby made for a description of the nature
and extent of the subordination of the rights of any holder of this Note.
Except as expressly provided herein, notice, demand, presentment,
protest, notice of protest, dishonor, notice of dishonor or notice of any other
kind are hereby expressly waived by the Maker. The Maker further waives its
right to interpose any setoff or counterclaim of any nature or description in,
or to plead any statute of limitations as a defense to, any action commenced by
the Payee to enforce its rights hereunder.
No failure by the Payee or any assignee thereof to exercise, and no
delay in exercising, any right, remedy or power hereunder shall operate as a
waiver thereof, nor shall any single
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or partial exercise by the Payee or such assignee of any right, remedy or power
hereunder preclude any other or further exercise thereof or the exercise of any
other right, power or remedy.
The Maker agrees (i) to pay on demand all legal and other fees,
costs and expenses of the Payee incurred in connection with the collection of
this Note, the Security Agreement and any other instruments and documents to be
delivered hereunder and thereunder, (ii) to pay on demand all legal and other
fees, costs and expenses of the Payee incurred in connection with the
enforcement of this Note, the Security Agreement and any other instruments and
documents to be delivered hereunder and thereunder, and (iii) to pay, indemnify
and hold the Payee harmless from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever (including any
reasonable expense incurred by the Payee in employing legal counsel in
connection therewith) which may be imposed on, incurred by or asserted against
the Payee in any way relating to or arising out of, or any action taken or
omitted by the Payee under (including, but not limited to, the administration
and/or enforcement thereof), this Note, the Security Agreement or any other
instrument or document to be delivered hereunder or thereunder. The obligations
of the Maker pursuant to this paragraph shall survive the repayment by the Maker
of all or a portion of the principal amount of this Note and the payment by the
Maker of accrued interest thereon and all other amounts payable hereunder.
The Maker may not assign or otherwise transfer its obligations
hereunder. The Payee may assign, grant participations in or otherwise transfer
all or any portion of its rights hereunder, and any such assignee, participant
or transferee shall have all of the rights of the Payee hereunder to the extent
of the interest conveyed.
This Note shall be construed in accordance with and governed by the
laws of the State of New York.
VICON INDUSTRIES, INC.
By______________________
Title:
By_______________________
Title:
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