SECOND AMENDED AND RESTATED CREDIT AGREEMENT WITH CONSENT OF GUARANTOR
EXHIBIT 10.1
THIS AMENDED AND RESTATED CREDIT AGREEMENT WITH CONSENT OF GUARANTOR IS SUBJECT TO ARBITRATION PURSUANT TO THE FEDERAL ARBITRATION ACT XXX/XX §00-00-00 XX XXX XXXXX XXXXXXXX CODE OF LAWS (1976), AS AMENDED.
SECOND AMENDED AND RESTATED CREDIT AGREEMENT WITH CONSENT OF GUARANTOR
THIS SECOND AMENDED AND RESTATED CREDIT AGREEMENT WITH CONSENT OF GUARANTOR (this "Agreement") is entered into as of April 20, 2017, by and among Vicon Industries, Inc., a New York corporation ("Borrower"), NIL Funding Corporation, a Delaware corporation ("Lender"), and IQinVision, Inc., a California corporation (“Guarantor”).
Borrower and Lender executed that certain Amended and Restated Credit Agreement, dated as of August 18, 2016 (the "Original Credit Agreement");
In connection with the Original Credit Agreement, Guarantor executed that certain Continuing Guaranty in favor of Lender, dated as of August 18, 2016 (the “Guaranty”);
In connection with Lender’s agreement to extend credit to Borrower, Borrower executed that certain Security Agreement by and between Lender and Borrower, dated as of March 4, 2016, as amended by that certain First Amendment to Security Agreement, dated as of August 18, 2016 (as the same may be amended, restated, or otherwise modified, the “Borrower Security Agreement”);
In connection with this Agreement, Guarantor executed that certain Security Agreement by and between Guarantor and Lender of even date herewith (as the same may be amended, restated, or otherwise modified, the “Guarantor Security Agreement”); and
Borrower and Lender desire to amend and restate the Original Credit Agreement in its entirety, and Guarantor desires to consent to such amendment and restatement.
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Original Credit Agreement is hereby amended and restated in its entirety with the following:
ARTICLE I
SECTION 1.1. FACILITY A LINE OF CREDIT.
(a) Line of Credit A. Subject to the terms and conditions of this Agreement, Lender hereby agrees to make advances to Borrower from time to time, but in no event after April 2, 2019, not to exceed at any time the aggregate principal amount of Two Million and No/100 Dollars ($2,000,000.00) ("Facility A Line of Credit"), the proceeds of which shall be used for working capital purposes. Borrower's obligation to repay advances under the Facility A Line of Credit shall be evidenced by an amended and restated promissory note of even date herewith (as the same may be amended, restated, or otherwise modified, the "Facility A Line of Credit Note"), all terms of which are incorporated herein by this reference.
(b) Limitation on Facility A Borrowings. Outstanding borrowings under the Facility A Line of Credit, to a maximum of the principal amount set forth above, shall not at any time exceed an aggregate of Eighty Five and No/100 percent (85.0%) of Borrower's eligible accounts receivable that are less than sixty (60) days old, plus Sixty and No/100 percent (60.0%) of Borrower's eligible accounts receivable that are between sixty (60) and ninety (90)
days old, plus Fifty and No/100 percent (50.0%) of any of Borrower’s eligible accounts receivable which represent an obligation of any state or municipal government or of the United States government or any political subdivision thereof that are less than ninety (90) days old, plus Fifty and No/100 percent (50.0%) of any of Borrower’s eligible accounts receivable which represent an obligation of an account debtor located in a foreign country that are less than ninety (90) days old. All of the foregoing shall be determined by Lender upon receipt and review of all collateral reports required hereunder and such other documents and collateral information as Lender may from time to time reasonably require. Borrower acknowledges that said borrowing base was established by Lender with the understanding that, among other items, the aggregate of all returns, rebates, discounts, credits and allowances for the immediately preceding three (3) months at all times shall be less than five percent (5%) of Borrower's gross sales for said period. If such dilution of Borrower's accounts for the immediately preceding three (3) months at any time exceeds five percent (5%) of Borrower's gross sales for said period, or if there at any time exists any other matters, events, conditions or contingencies which Lender reasonably believes may affect payment of any portion of Borrower's accounts, Lender, in its sole discretion, may reduce the foregoing advance rate against eligible accounts receivable to a percentage appropriate to reflect such additional dilution and/or establish additional reserves against Borrower's eligible accounts receivable.
As used herein, "eligible accounts receivable" shall consist solely of trade accounts created in the ordinary course of Borrower's business, upon which Borrower's right to receive payment is absolute and not contingent upon the fulfillment of any condition whatsoever, and in which Lender has a perfected security interest of first priority, and shall not include:
(i) any account that has been outstanding more than 90 days from the date of the invoice;
(ii) that portion of any account for which there exists any right of setoff, defense or discount (except regular discounts allowed in the ordinary course of business to promote prompt payment) or for which any defense or counterclaim has been asserted;
(iii) [Intentionally Left Blank];
(iv) [Intentionally Left Blank];
(v) any account which arises from the sale or lease to or performance of services for, or represents an obligation of, an employee, affiliate, partner, member, parent or subsidiary of Borrower;
(vi) that portion of any account, which represents interim or progress xxxxxxxx or retention rights on the part of the account debtor;
(vii) any account which represents an obligation of any account debtor when twenty percent (20%) or more of Borrower's accounts from such account debtor are not eligible pursuant to (i) above;
(viii) that portion of any account from an account debtor which represents the amount by which Borrower's total accounts from said account debtor exceeds twenty-five percent (25%) of Borrower's total accounts;
(ix) any account deemed ineligible by Lender when Lender, in its sole discretion, deems the creditworthiness or financial condition of the account debtor, or the industry in which the account debtor is engaged, to be unsatisfactory.
(c) Borrowing and Repayment. Borrower may from time to time during the term of the Facility A Line of Credit borrow, partially or wholly repay its outstanding borrowings, and reborrow, subject to all of the limitations, terms and conditions contained herein or in the Facility A Line of Credit Note; provided however, that the total outstanding borrowings under the Facility A Line of Credit shall not at any time exceed the maximum principal amount available thereunder, as set forth above.
(d) Original Credit Agreement. Borrower and Lender acknowledge and agree that outstanding advances made prior to the date hereof under the Original Credit Agreement shall constitute advances under the Facility A Line of Credit and shall be evidenced by the Facility A Line of Credit Note.
SECTION 1.2. FACILITY A INTEREST/FEES.
(a) Interest. The outstanding principal balance of the Facility A Line of Credit shall bear interest at the rate of Six and 95/100 percent (6.95%) per annum.
(b) [Intentionally Left Blank].
(c) Unused Commitment Fee. Borrower shall pay to Lender a fee equal to Zero and 50/100 percent (0.5%) per annum (computed on the basis of a 360-day year, actual days elapsed) on the daily unused amount of the Facility A Line of Credit, which fee shall be calculated on a monthly basis by Lender and shall be due and payable by Borrower in arrears on the 1st day of each month, commencing on May 1, 2017.
SECTION 1.4. FACILITY B INTEREST/FEES.
(a) Interest. The outstanding principal balance of the Facility B Line of Credit shall bear interest at the rate of Eight and 25/100 percent (8.25%) per annum.
(c) Unused Commitment Fee. Borrower shall pay to Lender a fee equal to Zero and 50/100 percent (0.5%) per annum (computed on the basis of a 360-day year, actual days elapsed) on the daily unused amount of the Facility B Line of Credit, which fee shall be calculated on a monthly basis by Lender and shall be due and payable by Borrower in arrears on the 1st day of each month, commencing on May 1, 2017.
All of the foregoing shall be evidenced by and subject to the terms of such security agreements, financing statements, and other documents as Lender shall reasonably require, all in form and substance satisfactory to Lender. Borrower shall pay to Lender immediately upon demand the full amount of all charges, costs and expenses (to include fees paid to third parties and all allocated costs of Lender personnel), expended or incurred by Lender in connection with any of the foregoing security, including without limitation, filing and recording fees and costs of appraisals, audits and title insurance.
ARTICLE II
Borrower makes the following representations and warranties to Lender, which representations and warranties shall survive the execution of this Agreement and shall continue in full force and effect until the full and final payment, and satisfaction and discharge, of all obligations of Borrower to Lender subject to this Agreement.
ARTICLE III
(a) Approval of Lender Counsel. All legal matters incidental to the extension of credit by Lender shall be satisfactory to Lender's counsel.
(b) Documentation. Lender shall have received, in form and substance satisfactory to Lender, each of the following, duly executed:
(i) This Agreement and each promissory note or other instrument or document required hereby.
(ii) The Warrant Agreement;
(iii) The Guarantor Security Agreement;
(iv) (A) a certificate of the Secretary of Borrower certifying the current Articles of Incorporation and Bylaws of Borrower; (B) a true and complete copy of resolutions adopted by the Board of Directors of Borrower; and (C) a certificate executed by the Secretary of Borrower certifying as to the incumbency and genuineness of the signature of each officer of the Borrower;
(v) (A) a certificate of the Secretary of Guarantor certifying the current Articles of Incorporation and Bylaws of Guarantor; (B) a true and complete copy of resolutions adopted by the Board of Directors of Guarantor; and (C) a certificate executed by the Secretary of Guarantor, certifying as to the incumbency and genuineness of the signature of each officer of Guarantor;
(vi) The Lender shall have received certificates as of a recent date of the Borrower's good standing under the laws of each state where the Borrower is incorporated and authorized to transact business;
(vii) The Lender shall have received certificates as of a recent date of Guarantor’s good standing under the laws of each state where Guarantor is incorporated and authorized to transact business;
(viii) An opinion of counsel to Borrower and Guarantor, in form and content reasonably satisfactory to Lender and its counsel; and
(ix) Such other documents as Lender may reasonably require.
(c) Financial Condition. There shall have been no material adverse change, as determined by Lender, in the financial condition or business of Borrower or any of its subsidiaries, nor any material decline, as determined by Lender, in the market value of any collateral required hereunder or a substantial or material portion of the assets of Borrower or any of its subsidiaries.
(a) Compliance. The representations and warranties contained herein and in each of the other Loan Documents shall be true in all material respects on and as of the date of the signing of this Agreement and on the date of each extension of credit by Lender pursuant hereto, with the same effect as though such representations and warranties had been made on and as of each such date, and on each such date, no Event of Default as defined herein, and no condition, event or act which with the giving of notice or the passage of time or both would constitute such an Event of Default, shall have occurred and be continuing or shall exist.
(b) Documentation. Lender shall have received all additional documents which may be required in connection with such extension of credit.
ARTICLE IV
Borrower covenants that so long as Lender remains committed to extend credit to Borrower pursuant hereto, or any liabilities (whether direct or contingent, liquidated or unliquidated) of Borrower to Lender under any of the Loan Documents remain outstanding, and until payment in full of all obligations of Borrower subject hereto, Borrower shall, unless Lender otherwise consents in writing:
SECTION 4.3. FINANCIAL STATEMENTS. Provide to Lender all of the following, in form and detail satisfactory to Lender:
(a) not later than thirty (30) days after and as of the end of each fiscal quarter of Borrower, a financial statement of Borrower, prepared by Borrower, to include balance sheet, income statement and statement of cash flows and sources;
(b) not later than ten (10) days after and as of the end of each month, a borrowing base certificate, in the form attached hereto as Exhibit A, an aged listing of accounts receivable and accounts payable, and a reconciliation of accounts, and immediately upon each request from Lender, a list of the names and addresses of all Borrower's account debtors; and
(c) not later than thirty (30) days after and as of the end of each fiscal quarter of Borrower, a compliance certificate, signed by an officer of Borrower, certifying and evidencing compliance with the financial covenant contained in Section 4.9 below.
respect to any Plan; or (d) any termination or cancellation of any insurance policy which Borrower is required to maintain, or any uninsured or partially uninsured loss through liability or property damage, or through fire, theft or any other cause affecting Borrower's property in excess of an aggregate of Thirty Five Thousand and No/100 Dollars ($35,000.00).
ARTICLE V
Borrower further covenants that so long as Lender remains committed to extend credit to Borrower pursuant hereto, or any liabilities (whether direct or contingent, liquidated or unliquidated) of Borrower to Lender under any of the Loan Documents remain outstanding, and until payment in full of all obligations of Borrower subject hereto, neither Borrower nor any of Borrower’s subsidiaries, will without Lender's prior written consent, which may be withheld in Lender’s sole and absolute discretion:
SECTION 5.4. OTHER INDEBTEDNESS. Create, incur, assume or permit to exist any indebtedness or liabilities resulting from borrowings, loans or advances, whether secured or unsecured, matured or unmatured, liquidated or unliquidated, joint or several, except (a) the liabilities of Borrower to Lender, (b) any other liabilities of Borrower existing as of, and disclosed to Lender prior to, the date hereof, and (c) unsecured indebtedness of Borrower subordinated to Borrower’s indebtedness to Lender on terms acceptable to Lender in its sole and absolute discretion. For clarification and avoidance of doubt, Lender is under no obligation of any kind to consent to the creation, incurrence, or assumption of any additional indebtedness of any kind by Borrower, and Lender may withhold its consent to any additional Borrower indebtedness for any or no reason.
SECTION 5.10 SUBSIDIARIES. Form or otherwise organize a subsidiary or dissolve or terminate a subsidiary.
ARTICLE VI
SECTION 6.1. The occurrence of any of the following shall constitute an "Event of Default" under this Agreement:
(a) Borrower shall fail to pay within three (3) business days when due any principal, interest, fees or other amounts payable under any of the Loan Documents.
(b) Any financial statement or certificate furnished to Lender in connection with, or any representation or warranty made by Borrower or any other party under this Agreement or any other Loan Document shall prove to be incorrect, false or misleading in any material respect when furnished or made or on any date Borrower requests or borrowers any funds under the Facility A Line of Credit or Facility B Line of Credit.
(c) Any default in the performance of or compliance with any obligation, covenant, agreement or other provision contained herein or in any other Loan Document (other than those specifically described as an “Event of Default” in this section 6.1) which is not cured within ten (10) business days following notice from Lender of such default, except for any default in the performance of or compliance with any obligation contained in Section 1.1(b) hereof, which must be cured immediately.
(d) Any default in the payment or performance of any obligation in excess of $100,000, or any defined event of default, under the terms of any contract, instrument or document (other than any of the Loan Documents) pursuant to which Borrower has incurred any debt or other liability in excess of $100,000 to any person or entity, including Lender.
(e) Borrower shall become insolvent, or shall suffer or consent to or apply for the appointment of a receiver, trustee, custodian or liquidator of itself or any of its property, or shall generally fail to pay its debts as they become due, or shall make a general assignment for the benefit of creditors; Borrower shall file a voluntary petition in bankruptcy, or seeking reorganization, in order to effect a plan or other arrangement with creditors or any other relief under the Bankruptcy Reform Act, Title 11 of the United States Code, as amended or recodified from time to time ("Bankruptcy Code"), or under any state or federal law granting relief to debtors, whether now or hereafter in effect; or Borrower shall file an answer admitting the jurisdiction of the court and the material allegations of any involuntary petition; or Borrower shall be adjudicated a bankrupt, or an order for relief shall be entered against Borrower by any court of competent jurisdiction under the Bankruptcy Code or any other applicable state or federal law relating to bankruptcy, reorganization or other relief for debtors.
(f) The filing of a notice of judgment lien in excess of $100,000 against Borrower; or the recording of any abstract of judgment in excess of $100,000 against Borrower in any county in which Borrower has an interest in real property; or the service of a notice of levy and/or of a writ of attachment or execution, or other like process, against the assets of Borrower; or the entry of a judgment against Borrower in excess of $100,000; or any involuntary petition or proceeding pursuant to the Bankruptcy Code or any other applicable state or federal law relating to bankruptcy, reorganization or other relief for debtors is filed or commenced against Borrower, in each case, which is not lifted or discharged within 60 days of filing.
(h) The dissolution or liquidation of Borrower or any of its subsidiaries, or any of its directors, stockholders or members, shall take action seeking to effect the dissolution or liquidation of Borrower.
(i) Any Material Adverse Change in the condition of Borrower and its subsidiaries, taken as a whole. “Material Adverse Change” means the occurrence of events or circumstances which, if unchanged, could, as a whole, as reasonably determined by Lender, impair Borrower’s and its subsidiaries’: (i) financial condition, (ii) ability to meet their financial obligations as they become due, or (iii) ability to conduct their business as presently conducted.
(j) Any Change in Control of the Borrower without the Lender’s prior written consent, which may be withheld for any or no reason. For the purposes hereof, “Change of Control” shall mean the occurrence of any one or more of the following events:
i. | an acquisition by any individual, entity or group, other than Lender or its affiliates, of beneficial ownership of 20% or more of either (A) the then-outstanding shares of common stock of the Borrower or (B) the combined voting power of the then-outstanding voting securities of the Borrower entitled to vote generally in the election of directors; excluding, however, the following: (1) any repurchase by the Borrower, or (2) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Borrower or any entity controlled by the Borrower; or |
ii. | a change in the composition of the Board of Directors of the Borrower, such that the individuals who, as of the date hereof, constitute the Board of Directors (such Board shall be hereinafter referred to as the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board of Directors; provided, however, that, for purposes of this Section any individual who becomes a member of the Board of Directors subsequent to the date hereof, whose election, or nomination for election by the Borrower’s stockholders, was approved by a vote of at least a majority of those individuals who are members of the Board and who were also members of the Incumbent Board (or deemed to be such pursuant to this proviso) shall be considered as though such individual were a member of the Incumbent Board. |
(k) Lender shall not have or shall cease to have a perfected first priority lien on any of the collateral more particularly described in the Borrower Security Agreement or the Guarantor Security Agreement.
(a)Borrower or any affiliate of Borrower shall claim or assert that any provision of any of the Loan Documents is unenforceable for any reason.
ARTICLE VII
BORROWER:
Vicon Industries, Inc.
000 Xxxx Xxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxx
LENDER:
NIL Funding Corporation
0000 Xxxxxxx Xxxxxx
Xxxxx Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxxxx Xxxxxx, Esq.
or to such other address as any party may designate by written notice to all other parties. Each such notice, request and demand shall be deemed given or made as follows: (a) if sent by hand delivery, upon delivery; (b) if sent by mail, upon the earlier of the date of receipt or three (3) days after deposit in the U.S. mail, first class and postage prepaid; and (c) if sent by telecopy, upon receipt.
SECTION 7.7. TIME. Time is of the essence of each and every provision of this Agreement and each other of the Loan Documents.
SECTION 7.10. GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the laws of the State of South Carolina.
SECTION 7.11. ARBITRATION.
(a) Arbitration. The parties hereto agree, upon demand by any party, to submit to binding arbitration all claims, disputes and controversies between or among them (and their respective employees, officers, directors, attorneys, and other agents), whether in tort, contract or otherwise in any way arising out of or relating to (i) any credit subject hereto, or any of the Loan Documents, and their negotiation, execution, collateralization, administration, repayment, modification, extension, substitution, formation, inducement, enforcement, default or termination; or (ii) requests for additional credit. In the event of a court ordered arbitration, the party requesting arbitration shall be responsible for timely filing the demand for arbitration and paying the appropriate filing fee within 30 days of the abatement order or the time specified by the court. Failure to timely file the demand for arbitration as ordered by the court will result in that party’s right to demand arbitration being automatically terminated.
(b) Governing Rules. Any arbitration proceeding will (i) proceed in a location in South Carolina selected by the American Arbitration Association (“AAA”); (ii) be governed by the Federal Arbitration Act (Title 9 of the United States Code), notwithstanding any conflicting choice of law provision in any of the documents between the parties; and (iii) be conducted by the AAA, or such other administrator as the parties shall mutually agree upon, in accordance with the AAA’s commercial dispute resolution procedures, unless the claim or counterclaim is at least $1,000,000.00 exclusive of claimed interest, arbitration fees and costs in which case the arbitration shall be conducted in accordance with the AAA’s optional procedures for large, complex commercial disputes (the commercial dispute resolution procedures or the optional procedures for large, complex commercial disputes to be referred to herein, as applicable, as the “Rules”). If there is any inconsistency between the terms hereof and the Rules, the terms and procedures set forth herein shall control. Any party who fails or refuses to submit to arbitration following a demand by any other party shall bear all costs and expenses incurred by such other party in compelling arbitration of any dispute. Nothing contained herein shall be deemed to be a waiver by any party that is a lender of the protections afforded to it under 12 U.S.C. §91 or any similar applicable state law.
(c) No Waiver of Provisional Remedies, Self-Help and Foreclosure. The arbitration requirement does not limit the right of any party to (i) foreclose against real or personal property collateral; (ii) exercise self-help remedies relating to collateral or proceeds of collateral such as setoff or repossession; or (iii) obtain provisional or ancillary remedies such as replevin, injunctive relief, attachment or the appointment of a receiver, before, during or after the
pendency of any arbitration proceeding. This exclusion does not constitute a waiver of the right or obligation of any party to submit any dispute to arbitration or reference hereunder, including those arising from the exercise of the actions detailed in sections (i), (ii) and (iii) of this paragraph.
(d) Arbitrator Qualifications and Powers. Any arbitration proceeding in which the amount in controversy is $5,000,000.00 or less will be decided by a single arbitrator selected according to the Rules, and who shall not render an award of greater than $5,000,000.00. Any dispute in which the amount in controversy exceeds $5,000,000.00 shall be decided by majority vote of a panel of three arbitrators; provided however, that all three arbitrators must actively participate in all hearings and deliberations. The arbitrator will be a neutral attorney licensed in the State of South Carolina or a neutral retired judge of the state or federal judiciary of South Carolina, in either case with a minimum of ten years’ experience in the substantive law applicable to the subject matter of the dispute to be arbitrated. The arbitrator will determine whether or not an issue is arbitratable and will give effect to the statutes of limitation in determining any claim. In any arbitration proceeding the arbitrator will decide (by documents only or with a hearing at the arbitrator's discretion) any pre-hearing motions which are similar to motions to dismiss for failure to state a claim or motions for summary adjudication. The arbitrator shall resolve all disputes in accordance with the substantive law of South Carolina and may grant any remedy or relief that a court of such state could order or grant within the scope hereof and such ancillary relief as is necessary to make effective any award. The arbitrator shall also have the power to award recovery of all costs and fees, to impose sanctions and to take such other action as the arbitrator deems necessary to the same extent a judge could pursuant to the Federal Rules of Civil Procedure, the South Carolina Rules of Civil Procedure or other applicable law. Judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction. The institution and maintenance of an action for judicial relief or pursuit of a provisional or ancillary remedy shall not constitute a waiver of the right of any party, including the plaintiff, to submit the controversy or claim to arbitration if any other party contests such action for judicial relief.
(f) Class Proceedings and Consolidations. No party hereto shall be entitled to join or consolidate disputes by or against others in any arbitration, except parties who have executed any Loan Document, or to include in any arbitration any dispute as a representative or member of a class, or to act in any arbitration in the interest of the general public or in a private attorney general capacity.
(g) Payment Of Arbitration Costs And Fees. The arbitrator shall award all costs and expenses of the arbitration proceeding.
(h) Miscellaneous. To the maximum extent practicable, the AAA, the arbitrators and the parties shall take all action required to conclude any arbitration proceeding within 180 days of the filing of the dispute with the AAA. No arbitrator or other party to an arbitration proceeding may disclose the existence, content or results thereof, except for disclosures of information by a party required in the ordinary course of its business or by applicable law or regulation. If more than one agreement for arbitration by or between the parties potentially applies to a dispute, the arbitration provision most directly related to the Loan Documents or the subject matter of the dispute shall control. This arbitration provision shall survive termination, amendment or expiration of any of the Loan Documents or any relationship between the parties.
(i) Small Claims Court. Notwithstanding anything herein to the contrary, each party retains the right to pursue in Small Claims Court any dispute within that court’s jurisdiction. Further, this arbitration provision shall apply only to disputes in which either party seeks to recover an amount of money (excluding attorneys’ fees and costs) that exceeds the jurisdictional limit of the Small Claims Court.
SECTION 7.12 WAIVER OF JURY TRIAL. WITHOUT INTENDING IN ANY WAY TO LIMIT THE PARTIES’ AGREEMENT TO ARBITRATE ANY DISPUTE AS SET FORTH HEREIN, TO THE EXTENT ANY DISPUTE IS NOT SUBMITTED TO ARBITRATION OR IS DEEMED BY THE ARBITRATOR OR BY ANY COURT WITH JURISDICTION TO BE NOT ARBITRABLE OR NOT REQUIRED TO BE ARBITRATED, BORROWER AND LENDER WAIVE TRIAL BY JURY IN RESPECT OF ANY SUCH DISPUTE AND ANY ACTION ON SUCH DISPUTE. THIS WAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY MADE BY BORROWER AND LENDER, AND BORROWER AND LENDER HEREBY REPRESENT THAT NO REPRESENTATIONS OF FACT OR OPINION HAVE BEEN MADE BY ANY PERSON OR ENTITY TO INDUCE THIS WAIVER OF TRIAL BY JURY OR TO IN ANY WAY MODIFY OR NULLIFY ITS EFFECT. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE PARTIES ENTERING INTO THE LOAN DOCUMENTS. BORROWER AND LENDER ARE EACH HEREBY AUTHORIZED TO FILE A COPY OF THIS SECTION IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER OF JURY TRIAL. BORROWER FURTHER REPRESENTS AND WARRANTS THAT IT HAS BEEN REPRESENTED IN THE SIGNING OF THIS AGREEMENT AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL, OR HAS HAD THE OPPORTUNITY TO BE REPRESENTED BY INDEPENDENT LEGAL COUNSEL SELECTED OF ITS OWN FREE WILL, AND THAT IT HAS HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH COUNSEL.
Section 7.13 WAIVER.
(a) Borrower and Guarantor each jointly and severally hereby absolutely, unconditionally, irrevocably and expressly forever waives, and agrees that it will not exercise or otherwise enforce, any and all rights of setoff, recoupment, abatement or reduction or other claims or counterclaims respecting any payment due (whether as scheduled or required, upon acceleration or as sought in any action, suit or proceeding by the Lender) under this Agreement, any other Loan Document or any other agreement, facility or relationship with the Lender that may now or hereafter be accorded to the Borrower under applicable law or otherwise.
(b) In any dispute with the Lender, the Borrower and Guarantor each jointly and severally covenants and agrees that it will not seek, recover or retain any, and the Borrower and Guarantor each jointly and severally hereby expressly waives any and all, special, exemplary, punitive, statutory and/or consequential damages (whether through action, suit, counterclaim or otherwise and whether in contract, tort, strict liability or otherwise) to the extent waiver is not limited under applicable law.
Loan Documents notwithstanding any investigation, analysis or evaluation that may have been made or from time to time may be made by the Lender or its designees of all or any part of the assets, business, operations, properties or condition (financial or otherwise) of the Borrower, Guarantor or any other person.
SECTION 7.17 FURTHER ASSURANCES. The Borrower and Guarantor each jointly and severally agrees to do such further acts and things and to execute and deliver such statements, assignments, agreements, instruments and other documents as the Lender from time to time reasonably may request in connection with the administration, maintenance, enforcement or adjudication of this Agreement and the other Loan Documents in order (a) to evidence, confirm, perfect or protect any security interest or other lien granted or required to have been granted under this Agreement and the other Loan Documents, (b) to give the Lender or its designee confirmation and assurance of the Lender's rights, powers, privileges, remedies and interests under this Agreement, the other Loan Documents and applicable law, (c) to better enable the Lender to exercise any such right, power, privilege or remedy, or (d) to otherwise effectuate the purpose and the terms and provisions of this Agreement and the other Loan Documents, each in such form and substance as may be acceptable to the Lender.
SECTION 7.18 INTERPRETATION. The parties acknowledge and agree that: each party and its counsel have reviewed and negotiated the terms and provisions of this Agreement and have contributed to its revision; the normal rule of construction, to the effect that any ambiguities are resolved against the drafting party, shall not be employed in the interpretation of it; and its terms and provisions shall be construed fairly as to all parties hereto and not in favor of or against any party, regardless of which party was generally responsible for the preparation of this Agreement.
Vicon Industries, Inc. |
By: /s/ Xxxx X. Xxxxx |
Name: Xxxx X. Xxxxx |
Its: CEO |
NIL Funding Corporation |
By: /s/ Xxxxxxx Xxxxxx |
Name: Xxxxxxx Xxxxxx |
Its: Secretary |
Exhibit A
Borrowing Base Certificate | ||||||
Lender | NIL Funding Corporation | |||||
Borrower: | Vicon Industries, Inc. | |||||
Credit Agreement Date | ||||||
Facility A Line of Credit | $2,000,000 | |||||
For the Month ending | ||||||
Dilution | ||||||
Gross Sales (preceding 3 months) | 1 | |||||
Sales reductions (preceding 3 months) | ||||||
Returns | a | |||||
Rebates | b | |||||
Discounts | c | |||||
Credits | d | |||||
Allowances | e | |||||
2 | 0 | |||||
Dilution as a % of sales. Should not exceed 5% | 3 | |||||
Gross Accounts Receivable: | 4 | |||||
(net of distribution channel contractual rebates) | ||||||
Ineligibles, as defined in Section 1.1 (b) | ||||||
i. | Accounts over 90 days | a | ||||
ii. | Setoff, defense or discounts | b | ||||
iii. | U.S. Government accounts (50% ineligible) | c | ||||
iv. | Foreign Accounts Receivable (50% ineligible) | d | ||||
v. | Related affiliate/Employee | e | ||||
vi. | Interim or progress xxxxxxxx | f | ||||
vii. | Cross aging 90 days over 20% | g | ||||
viii. | Excess 25% concentration | h | ||||
ix. | Deemed ineligible by lender | i | ||||
Total ineligibles | 5 | 0 | ||||
Total Eligible Accounts Receivable, as defined in Section 1.1 (b) | 6 | 0 | ||||
Funds available | ||||||
Eligible Accounts Receivable less than 60 days old | a | |||||
85% | 7 | 0 | ||||
Eligible Accounts Receivable between 60 and 90 days old | b | |||||
60% | 8 | 0 | ||||
US Government Receivables less than 90 days (50% eligible) | ||||||
c | 50% | 9 | 0 | |||
Receivables from foreign accounts less than 90 days (50% eligible) | ||||||
d | 50% | 10 | 0 | |||
Total Eligible for borrowing | 11 | 0 |
Maximum borrowing (not to exceed $4,000,000) | 12 | 0 | ||||
Facility A Line of credit outstanding | 13 | |||||
Borrowing availability (Facility A Line of Credit) | 14 | 0 | ||||
Additional borrowing Requested (not to exceed line 14) | 15 | 0 | ||||
Tangible Net Worth as of month end date (minimum $2,000,000) | 16 | |||||
Covenant met? | ||||||
For purposes of securitizing credit from NIL Funding Corporation, we hereby certify that the above schedules are complete and correct. | ||||||
Signature | Date | |||||
Schedule I
The Warrant Agreement