EXHIBIT 10.2
FIRST AMENDMENT AGREEMENT
among
VICON INDUSTRIES, INC.
and
IBJ SCHRODER BANK & TRUST COMPANY
Amending the Credit Agreement among
VICON INDUSTRIES, INC.
and IBJ SCHRODER BANK & TRUST COMPANY
Dated as of December 27, 1995
Dated as of August 19, 1996
THIS FIRST AMENDMENT AGREEMEET dated as of August 19, 1996 (this
"Amendment") among VICON INDUSTRIES, INC., a New York corporation (the
"Borrower") and IBJ SCHRODER BANK & TRUST COMPANY (the "Bank"),
WITNESSETH:
WHEREAS, the Borrower and the Bank have entered into a Credit Agreement
dated as of December 27, 1995 (the "Agreement"; the terms defined in the
Agreement are used in this Amendment as in the Agreement unless otherwise
defined in this Amendment); and
WHEREAS, the Borrower desires, and the Bank is willing on the terms and
conditions set forth below, to modify certain terms of the Agreement in order
to, among other things, increase the Commitment;
NOW, THEREFORE, in consideration of the mutual premises herein contained
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Borrower and the Bank have agreed to amend the
Agreement as hereinafter set forth:
SECTION 1. Amendment to Agreement. The Agreement is, subject to
the satisfaction of the conditions to effectiveness set forth in Section 2
hereof, hereby amended as follows:
(a) The definitions of "Commitment" and "Formula Amount" in Section 1.01
(Defined Terms) of the Agreement are amended to read in their entirety as
follows:
"'Commitment' shall mean the Bank's commitment to make Loans prior
to the Commitment Expiration Date up to the maximum aggregate
principal amount equal to $5,500,000 at any time outstanding, as
referred to in Section 2.01(a)."
"'Formula Amount' shall mean, as at any date at which the same is to
be determined, an amount equal to the sum of (a) 80 per cent of the
amount of Eligible Accounts Receivable as at such date, plus (b) 25
per cent of the value of Eligible Inventory consisting of finished
goods of the Borrower, provided, however, that the amount calculated
pursuant to (b) shall not exceed $2,500,000; and minus such reserve
as deemed necessary or appropriate by the Bank to reflect any
contingencies, or the consequences of any breach or contravention of
laws, including without limitation, Environmental Laws and laws
related to OSHA, by the Borrower. The Bank may, in its sole
discretion, at any time or times upon three Business Days' prior
notice to
the Borrower, increase or decrease the ratio of its advances against
Eligible Accounts Receivable or Eligible Inventory, or both, and, in
the event that any such ratio shall be decreased for any reason,
such decrease shall become effective immediately for purposes of
calculating the maximum amount of new Loans hereunder and the
maximum amount of Loans which may be outstanding hereunder. The
Borrower acknowledges that such changes in the ratio of advances
against Eligible Accounts Receivable and Eligible Inventory may
require the immediate prepayment of Loans by the Borrower."
(b) Section 1.01 (Defined Terms) of the Agreement is hereby amended by
adding the following definitions in the proper alphabetical order:
"'First Amendment' shall mean the First Amendment Agreement dated as
of August 19, 1996 between the Borrower and the Bank."
(e) Section 9.02 (Maximum Indebtedness to Net Worth Ratio) of the Agreement
is hereby deleted in its entirety and substituted in lieu thereof is the
following:
"As of the end of each Fiscal Quarter commencing March 31, 1996, the
Indebtedness to Net Worth Ratio shall not exceed 2.50 to 1.0."
SECTION 2. Conditions to Effectiveness. This Amendment shall become
effective only upon the satisfaction or waiver of all of the following
conditions precedent:
(a) The Borrower and the Bank shall have duly executed and delivered this
Amendment (whether the same or different copies) and the Bank shall have
received a copy signed by the Borrower;
(b) The Bank shall have received the fees and expense reimbursements
referred to in Section 5 hereof; and
(c) The Bank shall have received such other documents, opinions, approvals
or appraisals as the Bank may reasonably request.
SECTION 3. Representations and Warranties. In order to induce the Bank to
enter into this Amendment, the Borrower hereby represents and warrants to the
Bank that (i) it has the full power, capacity, right and legal authority to
execute, deliver and perform its obligations under this Amendment and the other
Related Documents to which it is a party, and the Borrower has taken all
appropriate action necessary to authorize the execution and delivery of, and the
performance of its obligations under this Amendment and the other Related
Documents to which it
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is a party, (ii) this Amendment, the Agreement (as amended by this Amendment)
and the other Related Documents constitute legal, valid and binding obligations
of the Borrower enforceable against the Borrower in accordance with its terms,
subject to the effect of any applicable bankruptcy, insolvency, reorganization
or moratorium or similar laws affecting the rights of creditors generally, (iii)
the representations and warranties contained in the Agreement and in each of the
other Related Documents to which it is a party are true and correct on and as of
the date hereof as though made on and as of such date, except for changes which
have occurred and which were not prohibited by the terms of the Agreement, (iv)
no Default or Event of Default has occurred and is continuing, or would result
from the execution, delivery and performance by the Borrower of this Amendment,
the Agreement (as amended by this Amendment) or any of the other Related
Documents to which it is a party, and (v) the Borrower is not in default in the
payment or performance of any of its obligations under any mortgage, indenture,
security agreement, contract, undertaking or other agreement or instrument to
which it is a party or which purports to be binding upon it or any of its
properties or assets, which default would have a material adverse effect on the
management, business, operations, properties, assets or condition (financial or
otherwise) of the Borrower, (vi) the Borrower is in compliance with all
applicable statutes, laws, rules, regulations, orders and judgments, the
contravention or violation of which would have a material adverse effect on the
management, business, operations, properties, assets or condition (financial or
otherwise) of the Borrower, (vii) no material adverse change in the business or
assets, or in the condition (financial or otherwise) of the Borrower, and (viii)
no litigation or administrative proceeding of or before any court or
governmental body or agency is now pending, nor, to the best knowledge of the
Borrower upon reasonable inquiry, is any such litigation or proceeding now
threatened against the Borrower or any of its properties, nor, to the best
knowledge of the Borrower upon reasonable inquiry, is there a valid basis for
the initiation of any such litigation or proceeding, which if adversely
determined (after giving effect to all applicable insurance coverage then in
existence) would have a material adverse effect on the business, assets or
condition (financial or otherwise) of the Borrower;
SECTION 4. Reference to and Effect on the Documents. (A) Each reference in
the Agreement to "this Agreement", "hereunder", "hereof", "herein" or words of
like import, and each reference to the Agreement in the Related Documents other
than the Agreement, shall mean and be a reference to the Agreement as amended
hereby.
(B) Except as specifically amended hereby, the Agreement and all other
Related Documents, and all other documents, agreements, instruments or writings
entered into in connection therewith, shall remain in full force and effect and
are hereby
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ratified, confirmed and acknowledged by the Borrower. The amendments set forth
above are limited precisely as written and shall not be deemed to (I) be a
consent to any waiver or modification of any other term or condition of the
Agreement or any document delivered pursuant thereto or (ii) prejudice any right
or rights which the Bank may now or in the future have in connection with the
Agreement or the other Related Documents.
(C) The execution, delivery and effectiveness of this Amendment shall not
operate as a waiver of any right, power or remedy of the Bank under any of the
Related Documents, nor constitute a waiver or modification of any provision of
any of the Related Documents, nor a waiver of any now existing or hereafter
arising Defaults of Events of Default.
SECTION 5. Fees and Expenses. (A) The Borrower hereby agrees to pay, or
cause to be paid to, the Bank a non-refundable amendment fee of $15,000.
(B) The Borrower hereby agrees to pay the Bank on demand for all costs,
expenses, charges and taxes (other than any income taxes relating to income of
the Bank), including, without limitation, all reasonable fees and disbursements
of counsel, incurred by the Bank in connection with the preparation,
negotiation, administration and enforcement of this Amendment and the other
Related Documents to be delivered hereunder.
SECTION 6. Governing Law. This Amendment and the rights and obligations of
the parties hereunder shall be governed by and construed and interpreted in
accordance with the substantive laws of the State of New York, without regard
for its conflict of laws principles.
SECTION 7. Headings. Section headings in this Amendment are included herein
for convenience of reference only and shall not constitute a part of this
Amendment for any other purpose.
SECTION 8. Successors. This Amendment shall be binding upon the successors,
assigns, heirs, executors and administrators of the parties hereto.
SECTION 9. Counterparts. This Amendment may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument, and any party hereto may execute this Amendment by signing any such
counterpart.
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IN WITNESS WHEREOF, the undersigned have caused this
Amendment to be executed by their respective officers thereunto duly authorized,
as of the date first above written.
VICON INDUSTRIES, INC.
By:
Name: Kenneth M. Darby
Title: President
IBJ SCHRODER BANK & TRUST COMPANY
By:
Name: Alfred J. Scoyni
Title: Vice-President
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