EXHIBIT 10.32
AMENDMENT NO. 2 TO
THE CREDIT AGREEMENT
Amendment No. 2 to the Credit Agreement ("Amendment") between
Vicon Industries, Inc., 89 Arkay Drive, Hauppauge, New York 11788
("Borrower") and KeyBank National Association ("KeyBank"). This Amendment is
between Borrower and Washington Mutual Bank, FA, 1377 Motor Parkway,
Islandia, New York 11749 (the "Bank"), the successor to KeyBank and to The
Dime Savings Bank of New York, FSB.
RECITALS:
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Borrower and KeyBank entered in a Credit Agreement dated July 20,
1998 (the "Credit Agreement") which was previously amended by Amendment No. 1
on February 12, 2002 ("Amendment No. 1"). The parties now desire to further
amend the Credit Agreement on the terms set forth in this Amendment No. 2.
This Amendment No. 2 also amends the Mortgage Loans (defined below) as
provided herein.
Accordingly, the parties agree as follows:
ARTICLE 1
AMENDMENTS TO CREDIT AGREEMENT.
Section 1.1. (a) General. As used herein, the term "Credit
Agreement" means the Credit agreement as amended by Amendment No. 1. Capitalized
words and phrases used herein which are not defined in this Amendment shall have
the meanings given to them in the Credit Agreement. This Amendment constitutes
an amendment to the Credit Agreement and shall not be construed in any way as a
replacement or substitution therefor. All of the terms and provisions of this
Amendment are hereby incorporated by reference into the Credit Agreement as if
such terms were set forth in full therein.
(b) Any reference to Key Bank National Association or the Dime
Savings Bank or New York, FSB in the Credit Agreement and any amendment thereto
is hereby replaced by and deemed to refer to Washington Mutual Bank, FA.
(c) The term "Mortgage Loans" refers to (i) the term loans in the
original principal amount of $2,512,000 and $388,000 extended to Borrower by
KeyBank on or about January 29, 1998, secured respectively by first and second
priority mortgage liens on the Property and (ii) the term loan in the original
principal amount of $1,200,000 extended to Borrower by KeyBank on or about
October 12, 1999 secured by a third priority mortgage lien on the Property. The
"Property" refers to Borrower's real property located at 89 Arkay Drive,
Hauppauge, New York.
Section 1.2. Amendment to Financial Covenants. (a) So long as the
aggregate outstanding principal balance of all Revolving Credit Loans is zero
and Borrower at all times maintains cash balances on deposit with the Bank at
least equal to the sum of (A) the then existing outstanding principal balance of
the Term Loan and (B) the Aggregate Banker's Acceptance Outstandings, the Bank
waives the following obligations of Borrower under the Credit Agreement:
(i) to comply with any of the affirmative covenants set forth
in Article 10 of the Credit Agreement; and
(ii) to deliver the computations referred to in clause (ii) of
Section 8.08(c) of the Credit Agreement and any similar requirements in the Loan
Documents reflecting the Mortgage Loans.
(b) The Bank waives Borrower's compliance with the financial
covenants set forth in the Loan Documents reflecting the Mortgage Loans. To
implement the foregoing, subsection 6(b)(2) and Section 6(c) of the Loan
Agreements dated January 29, 1998 between Borrower and KeyBank (as modified by
Modification Agreement dated as of June 1, 1998), and subsection 6(b)(2) and
Section 6(c) of the Loan Agreement dated October 12, 1999 between Borrower and
KeyBank are hereby permanently deleted, and the Mortgage Loans are hereby
amended to that extent.
(c) Section 9.11 of the Credit Agreement is deleted, and the parties
agree that it has already been replaced by Section 10.03 of the Credit Agreement
which became a part thereof by operation of Amendment No. 1.
Section 1.3. Letter of Credit Sublimit. Section 2.08(b) of the
Credit Agreement is deleted and now reads as follows in its entirety:
(b) Subject to the terms and conditions hereof, the Bank agrees to create
Bankers Acceptances for Borrower and to issue Letters of Credit on its behalf,
provided that, after giving effect to the same, the sum of the Aggregate Bankers
Acceptance Outstandings and the Aggregate Letters of Credit Outstandings will
not exceed $1,000,000.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants to the Bank as follows:
Section 2.1. Confirm Warranties and Representations. Borrower confirms
that each of the representations and warranties set forth in Article 7 of the
Credit Agreement is true in all material respects as of the date hereof with
respect to Borrower and, to the extent applicable, the Guarantors, with the same
effect as though made on the date hereof (except when such representation or
warranty by its terms relates to a specific date other than the date hereof),
except that Schedules I, II, III and V to the Credit Agreement are updated as of
the date hereof and annexed hereto. Each such warranty and representation is
hereby incorporated herein in full by reference as if fully restated in its
entirety. June 30, 2002, there has been no material adverse change in the
business, operations, assets or financial or other condition of Borrower or of
the Guarantors.
Section 2.2. No Default. No Default or Event of Default now exists under
the Credit Agreement, as amended previously and hereby.
Section 2.3. Corporate Power. Borrower has the requisite corporate power
and authority to enter into, perform and deliver this Amendment.
Section 2.4. Consents. No consent, waiver or approval of any entity is or
will be required in connection with the execution, delivery, performance,
validity or enforcement or priority of this Amendment.
Section 2.5. No Omission. No representation, warranty or statement by
Borrower contained herein contains any untrue statement of material fact or
omits to state a material fact necessary to make such representation, warranty
or statement not misleading.
ARTICLE 3
MISCELLANEOUS
Section 3.1. Counterparts. This Amendment may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument, and either party hereto may execute this Amendment by signing any
such counterpart.
Section 3.2. Credit Agreement. Except as specifically amended
hereby, the Credit Agreement shall remain in full force and effect in accordance
with its terms, unaffected by this Amendment.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment.
Washington Mutual Bank, FA Vicon Industries, Inc.
By: By:
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Name: Sean M. Umhafer Name: John Badke
Title: Vice President Title: Vice President, Finance
Date signed: September 30, 2002 Date signed: September 30, 2002