EXHIBIT 10.4
KEYBANK NATIONAL ASSOCIATION
TERM LOAN NOTE
BORROWER: VICON INDUSTRIES, INC.
PRINCIPAL: $388,000 Date: January 29, 1998
PROMISE TO PAY: The undersigned (the "Borrower"), jointly and severally if more
than one signer, does hereby promise to pay to the order of KEYBANK NATIONAL
ASSOCIATION (the "Bank") at its offices at 1377 Motor Parkway, Islandia, New
York 11788, or at any of its branches, the sum of THREE HUNDRED EIGHTY-EIGHT
THOUSAND ($388,000) DOLLARS plus interest thereon, from the date hereof in the
manner set forth below.
COMPUTATION OF INTEREST: Interest on the outstanding principal balance of this
Note shall be computed on the basis of "a 360-day year for the actual number of
days elapsed" (such phrase, as used throughout this Note shall mean that in
computing interest for the subject period, the interest rate shall be multiplied
by a fraction, the denominator of which is 360 and the numerator of which is the
actual number of days elapsed from the date of the first disbursement of the
Loan or the date of the preceding interest and/or principal due date, as the
case may be, to the date of the next interest and/or principal due date).
Interest shall accrue until the date of receipt of payment.
RATE AND PAYMENT: The unpaid principal balance hereof shall bear interest at a
variable rate equal to the Prime Rate minus One Hundred Thirty-Five (135) Basis
Points ("Interest Rate"), payable monthly on the first day of the first month
following the date hereof and on the first day of each month thereafter until
this Note is paid in full. "Prime Rate" shall mean that rate set forth in
Federal Reserve Publication H15(519) under the heading "Prime Interest Rate". If
such rate does not appear on the Federal Reserve Publication H15(519) the rate
shall be the Prime Rate as published in the "Money Rates" column of the Wall
Street Journal. The Prime Rate may not be the lowest rate of interest charged by
KeyBank for commercial or other extensions of credit. Each change in the Prime
Rate shall effect a simultaneous and corresponding change in the interest rate
hereunder without notice to the Borrower. Interest shall be calculated on a
three hundred sixty (360) day year and actual number of days elapsed.
Principal repayment shall begin on March 1, 1998 when Borrower shall begin
making monthly installments of principal calculated on the basis of an
eighty-four (84) month amortization schedule plus accrued interest at the
Interest Rate. On February 1, 2003 (the "Maturity Date") (or such earlier date
in the event Borrower defaults hereunder), the entire unpaid principal balance
of this Note and all accrued but unpaid interest and any other sums due
hereunder shall be due and payable.
Each installment payment shall be applied first to interest at the Interest Rate
with the balance, if any, applied to principal. If any monthly installment
payment is insufficient to pay the interest due at the Interest Rate, KeyBank
will notify the Borrower of the amount of additional interest due and the
Borrower will remit said sum to KeyBank or KeyBank shall offset such amount (as
hereinafter provided) within five (5) business days.
PREPAYMENT: The Loan may be prepaid in whole or in part in multiples of at least
$100,000 on the first of each month following not less than ten (10) days prior
written notice, provided Borrower is not then in default.
Partial prepayment shall be credited in inverse order of maturity. Prepayments
of borrowings covered by an interest rate swap agreement or other rate
protection mechanism may require termination or adjustment of the swap and will
be subject to the terms and conditions of the swap agreement with respect to
prepayment/termination.
DEFAULT INTEREST RATE: After maturity hereof (whether by acceleration or
otherwise) the principal amount hereof and the unpaid interest and fees thereon
shall bear interest at a rate per annum equal to the greater of three (3%)
percent in excess of the highest applicable interest rate provided for herein or
sixteen (16%) percent per annum, but in no event shall the rate either be for or
after the occurrence of any event of default or acceleration exceed the highest
rate of interest, if any, permitted under applicable New York or Federal Law.
RIGHT OF OFFSET: If any payment is not made when due inclusive of any applicable
grace period, or if the entire balance becomes due and payable and is not paid,
all or part of the amount due may be offset out of any account or other property
which the Borrower has at the Bank or any affiliate of the Bank without prior
notice or demand.
LATE CHARGES: The Borrower shall pay to the Bank, prior to maturity, for each
payment of principal and interest not paid in full within ten (10) days after
its due date, a late fee equal to the greater of five (5%) percent of the amount
of such payment or fifty ($50) dollars, but not more than one thousand ($1,000)
dollars.
SECURITY: This Note is secured by:
(1) 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 Bank to
the Borrower, or in which the Borrower shall have an interest; and
(2) a mortgage on property located at 89 Arkay Drive, Hauppauge,
New York 11788 and known on the Suffolk County Tax Map as District 0800 Section
181.00 Block 03.00 Lot 002.013 (the "Mortgage"); and
(3) an Assignment of All Leases and Rents from the premises
that is the subject of the Mortgage.
DEFAULT: The Bank may declare the entire unpaid balance of this Note due
and payable on the happening of any of the following events:
(a) Failure to pay any amount required by this Note when
due and Borrower fails to cure such default within five (5) business days, or,
if applicable, failure to have sufficient funds in its account for loan payments
to be debited on the due date and Borrower fails to cure such default within
five (5) business days;
(b) Failure to perform or keep or abide by any term,
covenant or condition contained in this Note, the Mortgage, or any other
document or instrument given to the Bank in connection with this loan within any
applicable cure period;
(c) The filing of a bankruptcy proceeding, assignment for
the benefit of creditors, issuance of any execution, garnishment, or levy
against, or the commencement of any proceeding for relief from indebtedness by
or against the Borrower;
(d) The happening of any event which, in the judgment of
the Bank, materially adversely affects the Borrower's ability to repay or the
value of any collateral;
(e) If any material written representation or statement
made to the Bank by the Borrower is untrue;
(f) If any material written representation, covenant or
warranty made to the Bank by the Borrower is breached;
(g) The occurrence of a default under the Mortgage, or any
other document or instrument given to the Bank in connection with this loan and
Borrower fails to cure such default within any applicable cure period;
(h) Failure to provide any reasonable financial information
on request upon reasonable notice or permit an examination of books and records
upon reasonable notice.
Notwithstanding the foregoing, the balance of this Note shall become
immediately due and payable upon the occurrence of any of the events set forth
in (c) above.
ATTORNEYS FEES: In the event the Bank retains counsel with respect to
enforcement of this Note or any other document or instrument given to the Bank
by reason of Borrower's default, the Borrower agrees to pay the Bank's
reasonable attorneys fees (whether or not an action is commenced and whether or
not in the court of original jurisdiction, appellate court, bankruptcy court, or
otherwise).
SUBSEQUENT AGREEMENTS: The Borrower shall be bound by any agreement extending
the time or modifying the above terms of payment made by the Bank and any
owner(s) of the property covered by the mortgage referred to herein, without
notice to the Borrower, and the Borrower shall continue to be liable to pay all
amounts due hereunder, but at an interest rate not exceeding the rate set forth
herein, according to the terms of any such agreement of extension or
modification.
MISCELLANEOUS: Delay or failure of the Bank to exercise any of its rights under
this Note shall not be deemed a waiver thereof. No waiver of any condition or
requirement shall operate as a waiver of any other or subsequent condition or
requirement. The Bank or any other holder of this Note does not have to present
it before requiring payment. The Borrower waives trial by jury, offset, and
counterclaim with respect to any action arising out of or relating to this Note.
This Note may not be modified or terminated orally. This Note shall be governed
by the laws of the State of New York without regard to its conflicts of laws
rules. The Borrower irrevocably consents to the jurisdiction and venue of the
New York State Supreme Court, Suffolk County in any action concerning this Note.
This Note is binding upon the Borrower, its heirs, successors and assigns.
IN WITNESS WHEREOF, the Borrower has signed this Note as of
the 29th day of January, 1998.
VICON INDUSTRIES, INC.
By:___________________________
Kenneth M. Darby, President
STATE OF NEW YORK )
) SS.:
COUNTY OF SUFFOLK )
On the 29th day of January, 1998, before me personally came KENNETH
M. DARBY, to me known, who being by me duly sworn, did depose and say that he
has a business address located c/o Vicon Industries, Inc., 89 Arkay Drive,
Hauppauge, New York; that he is the President of VICON INDUSTRIES, INC., the
corporation described in and which executed the foregoing instrument, and he
signed his name thereto by order of said corporation.
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NOTARY PUBLIC