EXHIBIT 10.1

INVESTMENT AGREEMENT
by and among
VICON INDUSTRIES, INC.,
and
NIL FUNDING CORPORATION

Dated as of July 27, 2017

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Table of Contents
ARTICLE I THE RIGHTS OFFERING AND BACKSTOP COMMITMENT
Section 1.1    The Rights Offering.
Section 1.2    Backstop Commitment.

ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Section 2.1    Organization    
Section 2.2    Authorization    
Section 2.3    Capitalization.    
Section 2.4    Valid Issuance of Shares    
Section 2.5    Non-Contravention; Governmental Authorizations.    
Section 2.6    Periodic Filings; Financial Statements; Undisclosed
Liabilities.    
Section 2.7    No Proceedings    
Section 2.8    Brokers and Finders    

ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE INVESTOR    
Section 3.1    Organization and Authority    
Section 3.2    Authorization    
Section 3.3    Non-Contravention; Governmental Authorization.    
Section 3.4    No Proceedings    
Section 3.5    Securities Act Compliance    
Section 3.6    Financial Capability    
Section 3.7    No Registration    
Section 3.8    Ownership    
Section 3.9    No Further Reliance    

ARTICLE IV COVENANTS    
Section 4.1    Conduct of the Business    
Section 4.2    Securities to be Issued    
Section 4.3    Publicity    
Section 4.4    Share Listing    
Section 4.5    No Stabilization    

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ARTICLE V CONDITIONS TO CLOSING    
Section 5.1    Conditions to the Obligations of the Company and the Investor    
Section 5.2    Conditions to the Obligations of the Company    
Section 5.3    Conditions to the Obligations of the Investor
    
ARTICLE VI TERMINATION    
Section 6.1    Termination    
Section 6.2    Effects of Termination    

ARTICLE VII MISCELLANEOUS    
Section 7.1    Interpretation; Certain Definitions    
Section 7.2    Survival    
Section 7.3    Indemnification.    
Section 7.4    Legends    
Section 7.5    Notices    
Section 7.6    Further Assurances    
Section 7.7    Amendments and Waivers    
Section 7.8    Fees and Expenses    
Section 7.9    Successors and Assigns    
Section 7.10    Governing Law    
Section 7.11    Jurisdiction    
Section 7.12    Waiver Of Jury Trial    
Section 7.13    Entire Agreement    
Section 7.14    Effect of Headings and Table of Contents    
Section 7.15    Severability    
Section 7.16    Counterparts; No Third Party Beneficiaries    
Section 7.17    Specific Performance    

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INVESTMENT AGREEMENT
THIS INVESTMENT AGREEMENT (this “Agreement”) is made and entered into as of July
27, 2017, by and among Vicon Industries, Inc., a New York corporation (the
“Company”) and NIL Funding Corporation, a Delaware corporation (“Investor”).
RECITALS
WHEREAS, the Company has proposed to offer and sell up to 9,348,388 shares of
Common Stock pursuant to a Rights Offering, on the terms and subject to the
conditions set forth herein;
WHEREAS, the Company desires that the Investor provide, and the Investor has
agreed to provide, a Backstop Commitment to the Rights Offering, on the terms
and subject to the conditions set forth herein; and
WHEREAS, certain capitalized terms in this Agreement are defined in Section
7.1(b).
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained in this Agreement, the receipt and sufficiency of which are hereby
acknowledged, the parties to this Agreement hereby agree as follows:
ARTICLE I
THE RIGHTS OFFERING AND BACKSTOP COMMITMENT

Section 1.1    The Rights Offering.

(a)As promptly as practicable after the date of this Agreement, the Company
shall use its commercially reasonable efforts to prepare and file with the SEC a
registration statement (including each amendment and supplement thereto, the
“Registration Statement”) on Form S-1, covering the issuance of the Rights and
the Common Stock in the Rights Offering. The Company shall not permit any
securities to be included in the Registration Statement other than the Rights
and the Common Stock to be issued in the Rights Offering. The Registration
Statement (and any post-effective amendments) shall be provided to the Investor
and its counsel prior to its filing with the SEC, and the Investor and its
counsel shall be given a reasonable opportunity to review and comment upon the
Registration Statement (and any post-effective amendments). The Company shall
use its commercially reasonable efforts to, as promptly as practicable,
(i) respond to comments to the Registration Statement raised by the staff of the
SEC and (ii) cause the Registration Statement and any post-effective amendment
to be declared effective by the SEC.

(b)The Investor shall provide to the Company such information and other
assistance as it may reasonably require in connection with the preparation and
filing of the Registration Statement and the Prospectus. At the time such
information is provided and at the respective times the Registration Statement
and any post-effective amendments thereto become effective and as of the date of
the Prospectus, no such information provided by the Investor shall include an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading.

(c)At the respective times the Registration Statement and any post-effective
amendments thereto become effective, the Registration Statement (as amended or
supplemented) shall comply in all material respects with the requirements of
Form S-1, and the Registration Statement and any Company SEC Documents
incorporated by reference therein shall not include an untrue statement of a
material fact or omit to state a material fact necessary to make the statements
therein, in light of the circumstances in which they

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were made, not misleading; provided, that the Company shall make no such
representation with respect to information provided to it by the Investor under
Section 1.1(b). The final prospectus relating to the Rights Offering filed
pursuant to Rule 424 of the Securities Act (as amended or supplemented, the
“Prospectus”), as of its date, shall not include an untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided, that the Company shall make no such
representation with respect to information provided to it by the Investor under
Section 1.1(b). The previous two sentences are referred to as the “10b-5
Representation.”

(d)Promptly following the date on which the Registration Statement is declared
effective by the SEC (the “Registration Effective Date”), the Company shall
print and file with the SEC the Prospectus, distribute the Prospectus to the
Company’s stockholders of record as of the Record Date and thereafter promptly
commence a rights offering (the “Rights Offering”) on the following terms:
(i) the Company shall distribute, at no charge, one Right to each holder of
record of Common Stock for each share of Common Stock held by such holder as of
the Record Date, (ii) each Right shall entitle the holder thereof to purchase,
at the election of such holder, one share of Common Stock at the Rights
Subscription Price thereby entitling such holders of rights, in the aggregate,
to subscribe for an aggregate of 9,348,388 shares (the “Aggregate Offered
Shares”) of Common Stock (the “Basic Subscription Right”), provided that no
fractional shares of Common Stock shall be issued pursuant to the exercise of
any Rights, (iii) each such Right shall be non-transferable, (iv) the rights
offering shall remain open for at least sixteen (16) days, but no more than
thirty (30) days or such longer period as required by Law (the “Subscription
Period”), and (v) each holder who fully exercises all Rights held by such holder
shall be entitled to subscribe for additional shares of Common Stock that were
not subscribed for under the Basic Subscription Right in an amount equal to up
to 100% of the shares of Common Stock for which such holder subscribed under the
Basic Subscription Right (calculated prior to the exercise of any Rights) (the
“Over-Subscription Right”); provided that, if insufficient remaining shares of
unsubscribed shares of Common Stock are available, all over-subscription
requests shall be honored pro rata among Rights holders who exercise the
Over-Subscription Right (based on the Basic Subscription Rights exercised). In
addition, the Investor’s ability to participate in the Rights Offering will be
subject to the limitation that the Investor will not be provided with an
Over-Subscription Right.

(e)Prior to the expiration or termination of this Agreement in accordance with
Article VI, the Company shall not amend any of the terms of the Rights Offering
described in Section 1.1(d), terminate the Rights Offering or waive any material
conditions to the closing of the Rights Offering, without the prior written
consent of the Investor, unless the full Board (and not a committee of the
Board) approves such amendment, termination or waiver. Subject to the terms and
conditions of the Rights Offering, the Company shall effect the closing of the
Rights Offering as promptly as practicable following the end of the Subscription
Period. The closing of the Rights Offering shall occur at the time, for the
Rights Subscription Price and in the manner and on the terms of the Rights
Offering set forth in Section 1.1(d), and as shall otherwise be set forth in the
Prospectus.

(f)The Company shall pay all of its expenses associated with the Registration
Statement, Prospectus, the Rights Offering and the other transactions
contemplated hereby, including filing and printing fees, fees and expenses of
any subscription and information agents, its counsel and accounting fees and
expenses and costs associated with clearing the Common Stock offered thereby for
sale under applicable state securities Laws.

Section 1.2    Backstop Commitment.
(a)     Subject to the consummation of the Rights Offering and the terms and
conditions of this Agreement, the Investor shall purchase from the Company, and
the Company shall issue to the Investor,

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at the Rights Subscription Price, an aggregate number of shares of Common Stock
(the “Backstop Commitment”) equal to (A) (x) (i) $5,000,000 minus (ii) the
aggregate gross proceeds of the Rights Offering, divided by (y) the Rights
Subscription Price, minus (B) the number of shares of Common Stock purchased by
the Investor in the Rights Offering; provided, however, that in no event shall
the Backstop Commitment exceed (i) $3,000,000 divided by the Rights Subscription
Price, minus (ii) the number of shares of Common Stock purchased by the Investor
in the Rights Offering, and provided further, that the Investor may not purchase
shares under the Backstop Commitment to the extent that the Investor and its
affiliates would own in excess of 50% of the Company’s outstanding shares of
Common Stock. Within two (2) Business Days after the closing of the Rights
Offering, the Company shall issue to the Investor a notice (the “Subscription
Notice”) setting forth the number of shares of Common Stock subscribed for in
the Rights Offering and the aggregate gross proceeds of the Rights Offering and,
accordingly, the number of shares of Common Stock to be acquired by the Investor
pursuant to the Backstop Commitment at the Rights Subscription Price. Shares of
Common Stock acquired by the Investor pursuant to the Backstop Commitment are
collectively referred to as the “Backstop Acquired Shares.”

(b)    On the terms and subject to the conditions set forth in this Agreement,
the closing of the Backstop Commitment (the “Closing”) shall occur on the later
of (i) the third Business Day following the issuance by the Company of the
Subscription Notice and (ii) the date that all of the conditions to the Closing
set forth in Article V of this Agreement have been satisfied or waived (other
than those conditions that by their nature are to be satisfied at the Closing),
at 9:00 a.m. (New York, New York time) at the offices of Fox Rothschild LLP, 101
Park Avenue, New York, New York 10178 or such other place, time and date as
shall be agreed between the Company and the Investor (the date on which the
Closing occurs, the “Closing Date”).
(c)    At the Closing (i) the Company shall issue to the Investor the Backstop
Acquired Shares against payment by or on behalf of the Investor of the aggregate
Rights Subscription Price for all such shares by wire transfer in immediately
available funds to the account designated by the Company in writing at least
three Business Day prior to the Closing, (ii) the Company shall deliver all
other documents and certificates required to be delivered to the Investor
pursuant to Section 5.3, and (iii) the Investor shall deliver all documents and
certificates required to be delivered to the Company pursuant to Section 5.2.

ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as Previously Disclosed, the Company represents and warrants to the
Investor that:
Section 2.1    Organization. The Company and each of its Subsidiaries is duly
incorporated or organized and validly existing as a corporation or other entity
in good standing under the Laws of its jurisdiction of organization and has all
corporate power and authority to own its property and assets and conduct its
business as currently conducted, and, except as would not, individually or in
the aggregate, have or reasonably be expected to have a Material Adverse Effect,
is duly qualified as a foreign corporation for the transaction of business and
is in good standing under the Laws of each other jurisdiction in which it owns
or leases properties, or conducts any business so as to require such
qualification.

Section 2.2     Authorization. The Company has all corporate power and authority
to execute and deliver this Agreement and to perform its obligations hereunder.
The execution, delivery and performance by the Company of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
by all necessary corporate action on the part of the Company, and no further
approval or authorization is required on the part of the Company. This Agreement
constitutes the valid and binding obligation of the Company, enforceable against
the Company in accordance with its terms, except as such may be limited by
bankruptcy, insolvency, fraudulent conveyance, reorganization or other similar
Laws

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affecting creditors’ rights generally and by general equitable principles and
except as may be limited by applicable Law and public policy.

Section 2.3    Capitalization.
(a)    As of the date hereof, the Company is authorized to issue up to
25,000,000 shares of Common Stock and has 10,044,827 shares of Common Stock
issued and outstanding. As of the date hereof, there are outstanding options to
purchase an aggregate of 461,233 shares of Common Stock, warrants to purchase
1,500,000 shares of Common Stock, and stock appreciation rights covering 80,796
shares of Common Stock, under the Company’s Stock Option Plans. All of the
outstanding shares of Common Stock have been duly and validly authorized and
issued and are fully paid and non-assessable and were not issued in violation of
any pre-emptive rights, resale rights, rights of first refusal or similar
rights.
(b)    All of the outstanding shares of capital stock of each of the Company’s
Subsidiaries has been duly and validly authorized and issued, are fully paid and
non-assessable, were not issued in violation of any pre-emptive rights, resale
rights, rights of first refusal or similar rights, and are owned directly or
indirectly by the Company, free and clear of all liens, encumbrances, equities
or claims, except as set forth in the Credit Facility. The Company does not
Beneficially Own, directly or indirectly, any equity interests of any Person
that is not a Subsidiary.

Section 2.4    Valid Issuance of Shares. The Backstop Acquired Shares will be,
as of the date of their issuance, duly authorized by all necessary corporate
action on the part of the Company and, when issued and delivered by the Company
against payment therefor as provided in this Agreement, (a) will be validly
issued, fully paid and nonassessable, (b) will be free and clear of all liens,
encumbrances or claims and (c) will not be subject to any statutory or
contractual preemptive rights or other similar rights of stockholders.

Section 2.5    Non-Contravention; Governmental Authorizations.

(a)    The execution, delivery and performance by the Company of this Agreement
and the consummation of the transactions contemplated hereby will not:
(1) conflict with or violate any provision of the Company’s certificate of
incorporation or by-laws, each as amended; (2) conflict with or result in any
breach of, or constitute a default (or an event which with notice or lapse of
time or both would become a default) under, or give rise to any right to
termination, acceleration or cancellation under any agreement, lease, mortgage,
license, indenture or any other contract to which the Company or any of its
Subsidiaries is a party or by which their respective properties may be bound or
affected; or (3) conflict with or violate any Law applicable to the Company,
except, in the case of clause (2) or (3), as would not, individually or in the
aggregate, have or reasonably be expected to have a Material Adverse Effect.
(b)    Each approval, consent, order, authorization, designation, declaration or
filing by or with any Governmental Entity necessary in connection with the
execution and delivery by the Company of this Agreement and the consummation of
the transactions contemplated herein (except for (1) such additional steps as
may be required by the NYSE American (the “NYSE”) or such additional steps as
may be necessary to register or qualify the Rights and shares of Common Stock to
be issued in connection with the Rights Offering and the Backstop Acquired
Shares under federal securities, state securities or blue sky Laws and
(2) receipt of all approvals and authorizations of, filings with, and
notifications to, or expiration or termination of any applicable waiting period
under, any competition or merger control laws of any jurisdiction) has been
obtained or made and is in full force and effect.

Section 2.6    Periodic Filings; Financial Statements; Undisclosed Liabilities.

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(a)    Since October 1, 2016, the Company has timely filed all reports,
registrations, documents, filings, statements and submissions, together with any
required amendments thereto (collectively the “Company SEC Documents”), that
were required to be filed with the SEC under the Securities Act of 1933, as
amended, and the rules and regulations of the SEC promulgated thereunder (the
“Securities Act”) and the Securities Exchange Act of 1934, as amended, and the
rules and regulations of the SEC promulgated thereunder (the “Exchange Act”). As
of their respective filing dates, the Company SEC Documents complied in all
material respects with the requirements of the Securities Act and the Exchange
Act, as applicable, and none of the Company SEC Documents contained, when filed
with the SEC, and if amended, as of the date of such amendment, any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements made therein, in
light of the circumstances in which they were made, not misleading.
(b)    The Company’s consolidated financial statements, including the notes
thereto, included or incorporated by reference in the Company SEC Documents (the
“Company Financial Statements”) have been prepared in accordance with GAAP
consistently applied in all material respects (except as may be indicated in the
notes and schedules thereto) during the periods involved and present fairly in
all material respects the Company’s consolidated financial position at the dates
thereof and of its operations and cash flows for the periods specified therein
(subject to the absence of notes and year-end adjustments in the case of
unaudited statements).
(c)    Neither the Company nor any of its Subsidiaries has any liabilities or
obligations (accrued, absolute, contingent or otherwise) of a nature that would
be required to be accrued or reflected in a consolidated balance sheet prepared
in accordance with GAAP, other than liabilities or obligations (A) reflected on,
reserved against, or disclosed in the notes to, the consolidated balance sheets
of the Company Financial Statements or (B) incurred in the ordinary course of
business consistent with past practice since the date of the last consolidated
balance sheet in the Company Financial Statements.

Section 2.7    No Proceedings. No litigation or proceeding against the Company
or its Subsidiaries is pending before any court, arbitrator, or administrative
or governmental body, nor, to the Company’s knowledge, is any such proceeding
threatened against the Company or its Subsidiaries, that would, individually or
in the aggregate, reasonably be expected to materially and adversely affect the
Company’s ability to perform its obligations under this Agreement or consummate
the transactions contemplated hereby on a timely basis.

Section 2.8    Brokers and Finders. Neither the Company nor any of its
Subsidiaries has employed any broker or finder or incurred any liability for any
financial advisory fee, brokerage fees, commissions or finder’s fee, and no
broker or finder has acted directly or indirectly for the Company or any of its
Subsidiaries in connection with this Agreement or the transactions contemplated
hereby.

ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE INVESTOR

The Investor represents and warrants to the Company that:
Section 3.1    Organization and Authority. The Investor is duly formed and
validly existing in good standing as a corporation under the laws of the state
of Delaware and has all corporate power and authority to own its property and
assets and conduct its business as currently conducted and, except where the
failure to be qualified or in good standing would not or reasonably be expected
to prevent, materially delay or materially impede the performance by the
Investor of its obligations under this Agreement or the consummation of the
transactions contemplated hereby, has been duly qualified as a foreign
corporation for

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the transaction of business and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties, or conducts any business so
as to require such qualification.

Section 3.2    Authorization. The Investor has all corporate power and authority
to execute and deliver this Agreement and to perform its obligations under this
Agreement. The execution, delivery and performance by the Investor of this
Agreement and the consummation of the transactions contemplated hereby have been
duly authorized by the Investor’s Board of Directors, and no further approval or
authorization by any of its directors or stockholders is required. This
Agreement constitutes the valid and binding obligation of the Investor,
enforceable against the Investor in accordance with its terms, except as such
may be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization
or other similar Laws affecting creditors’ rights generally and by general
equitable principles and except as may be limited by applicable Law and public
policy.

Section 3.3    Non-Contravention; Governmental Authorization.
(a)    The execution, delivery and performance by the Investor of this Agreement
and the consummation of the transactions contemplated hereunder will not:
(1) conflict with or violate any provision of its certificate of incorporation
or similar governing documents; (2) conflict with or result in any breach of, or
constitute a default (or an event which with notice or lapse of time or both
would become a default) under, or give rise to any right to termination,
acceleration or cancellation under any agreement, lease, mortgage, license,
indenture or any other contract to which the Investor is a party or by which its
properties may be bound or affected; or (3) conflict with or violate any Law
applicable to the Investor, except in the case of clause (2) or (3), as would
not, individually or in the aggregate, reasonably be expected to materially and
adversely affect the Investor’s ability to perform its obligations under this
Agreement or consummate the transactions contemplated hereby on a timely basis.
(b)    Each approval, consent, order, authorization, designation, declaration or
filing by or with any Governmental Entity necessary in connection with the
execution and delivery by the Investor of this Agreement and the consummation of
the transactions contemplated herein (except for (1) such additional steps as
may be required by the NYSE or such additional steps as may be necessary to
register or qualify the Rights and shares of Common Stock to be issued in
connection with the Rights Offering and the Backstop Acquired Shares under
federal securities, state securities or blue sky Laws and (2) receipt of all
approvals and authorizations of, filings with, and notifications to, or
expiration or termination of any applicable waiting period under, any
competition or merger control laws of any jurisdiction) has been obtained or
made and is in full force and effect.

Section 3.4    No Proceedings. No litigation or proceeding against the Investor
is pending before any court, arbitrator, or administrative or governmental body,
nor, to the Investor’s knowledge, is any such proceeding threatened against the
Investor, that would, individually or in the aggregate, reasonably be expected
to materially and adversely affect the Investor’s ability to perform its
obligations under this Agreement or consummate the transactions contemplated
hereby on a timely basis.

Section 3.5    Securities Act Compliance. The Backstop Acquired Shares being
acquired by the Investor hereunder are being acquired for its own account, for
the purpose of investment and not with a view to or for sale in connection with
any public resale or distribution thereof in violation of applicable securities
Laws. The Investor is an ‘‘accredited investor’’ within the meaning of Rule
501(a) promulgated under the Securities Act and is knowledgeable, sophisticated
and experienced in business and financial matters that are necessary to evaluate
the risks and merits of an investment in the Common Stock.

Section 3.6    Financial Capability. At the Closing, the Investor, together with
its Affiliates, will have sufficient available funds to consummate the Closing
on the terms and conditions contemplated

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by this Agreement. The Investor is able to bear the financial risk of its
investment in the Backstop Acquired Shares. The Investor has been afforded
access to information about the Company and its financial condition and business
sufficient to enable the Investor to evaluate its investment in the Backstop
Acquired Shares.

Section 3.7    No Registration. The Investor understands (A) that the offer and
sale of the Backstop Acquired Shares to be purchased by it pursuant to the terms
of this Agreement have not been registered under the Securities Act or any state
securities laws, (B) that the Company shall not be required to effect any
registration or qualification of the Backstop Acquired Shares under the
Securities Act or any state securities laws, except pursuant to the Registration
Agreement, (C) that the Backstop Acquired Shares will be issued in reliance upon
exemptions contained in the Securities Act or interpretations thereof and in the
applicable state securities laws and (D) that the Backstop Acquired Shares may
not be offered for sale, sold or otherwise transferred except pursuant to a
registration statement under the Securities Act or in a transaction exempt from
or not subject to registration under the Securities Act.

Section 3.8    Ownership. As of the date of this Agreement, the Investor and its
Affiliates are the Beneficial Owners of 1,885,000 shares of Common Stock,
including warrants to purchase 1,500,000 shares of Common Stock.

Section 3.9    No Further Reliance. The Investor acknowledges that it is not
relying upon any representation or warranty made by the Company other than those
representations and warranties set forth in this Agreement.

ARTICLE IV
COVENANTS

Section 4.1    Conduct of the Business. Prior to the earlier of the Closing and
the termination of this Agreement pursuant to Section 6.1 (the “Pre-Closing
Period”), the Company shall not, and shall cause each of its Subsidiaries not
to, take any actions outside of the ordinary course of business consistent with
past practice, without the prior written consent of the Investor or prior
approval by the full Board (and not a committee of the Board). During the
Pre-Closing Period, (i) except as contemplated by this Agreement, as approved by
the full Board (and not a committee of the Board) prior to the taking of such
action or with the prior written consent of the Investor, the Company shall not,
and shall cause each of its Subsidiaries not to: (A) declare or pay any dividend
or distribution on its shares, interests, rights to purchase, warrants, options,
participations or other equivalents of or interests in (however designated)
stock (except for dividends paid by any direct or indirect wholly owned
Subsidiary of the Company to the Company or to any other direct or indirect
wholly owned Subsidiary of the Company), (B) adjust, split, combine or
reclassify or otherwise amend the terms of its capital stock, (C) repurchase,
redeem, purchase, acquire, encumber, pledge, dispose of or otherwise transfer,
directly or indirectly, any of its shares, interests, rights to purchase,
warrants, options, participations or other equivalents of or interests in
(however designated) its capital stock, (D) other than Excluded Issuances,
issue, grant, deliver or sell any shares, interests, rights to purchase,
warrants, options, participations or other equivalents of or interests in
(however designated) its capital stock (other than with respect to the issuance
of the Rights and the Common Stock issuable upon the exercise thereof), (E) make
any amendments to its organizational documents, (F) sell, lease or otherwise
dispose of a material amount of assets or securities, including by merger,
consolidation, asset sale or other business combination, other than sales of
assets in the ordinary course of business consistent with past practice;
(G) make any material acquisitions, by purchase or other acquisition of shares
or other equity interests, or by merger, consolidation or other business
combination, or material purchase of any property or assets, to or from any
Person (except for acquisitions made by the Company or any direct or indirect
wholly owned Subsidiary of the Company from the Company or any other direct or
indirect wholly owned Subsidiary of the Company), (H) adopt a

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plan of complete or partial liquidation or resolutions providing for a complete
or partial liquidation, dissolution, restructuring, recapitalization or other
reorganization, or (I) agree or commit to do any of the foregoing. For the
avoidance of doubt, the foregoing shall not restrict the Company from engaging
in discussions with a third party with respect to a Superior Transaction.

Section 4.2    Securities to be Issued. The Common Stock to be issued to the
Investor pursuant to this Agreement (i) shall be subject to the terms and
provisions of the Company’s certificate of incorporation as in effect on the
date hereof and (ii) for the avoidance of doubt, shall be deemed “Registrable
Securities” under the Registration Agreement.

Section 4.3    Publicity. No public release or announcement concerning the
transactions contemplated hereby shall be issued by any party without the prior
consent of the other party (which consent shall not be unreasonably withheld,
conditioned or delayed), except as such release or announcement may be required
by Law or the rules or regulations of the NYSE, in which case the party required
to make the release or announcement shall, to the extent reasonably practicable,
allow the other party reasonable time to review and comment on such release or
announcement in advance of such issuance. The provisions of this Section 4.3
shall not restrict the ability of a party hereto to summarize or describe the
transactions contemplated by this Agreement in the Registration Statement or
Prospectus or any amendment or supplement thereto or any other prospectus or
similar offering document or other report required by Law, regulation or NYSE
rule so long as the other party is provided a reasonable opportunity to review
and comment on such disclosure in advance.

Section 4.4    Share Listing. The Company shall as promptly as practicable after
the date of this Agreement use its reasonable best efforts to cause the Common
Stock to be issued in the Rights Offering, to be approved for listing on the
NYSE, subject to official notice of issuance.

Section 4.5    No Stabilization. In connection with the Rights Offering, the
Investor will not take, directly or indirectly, any action designed to or that
would reasonably be expected to cause or result in any stabilization or
manipulation of the price of the Common Stock in violation of Regulation M under
the Exchange Act.

ARTICLE V
CONDITIONS TO CLOSING

Section 5.1    Conditions to the Obligations of the Company and the Investor.
The obligations of the Company and the Investor to effect the Closing shall be
subject to the following conditions:

(a)    no provision of any applicable Law and no judgment, injunction, order or
decree shall prohibit the consummation of any of the transactions contemplated
at the Closing;
(b)    the Registration Statement shall have been declared effective by the SEC
and shall continue to be effective and no stop order shall have been entered by
the SEC with respect thereto;
(c)    the shares of Common Stock to be issued in the Rights Offering shall be
approved for listing on the NYSE, subject to official notice of issuance; and
(d)    the Rights Offering shall have been consummated in accordance with the
terms and subject to the conditions set forth in Section 1.1(d).

Section 5.2    Conditions to the Obligations of the Company. The obligations of
the Company to effect the Closing shall be subject to the following conditions:

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(a)    The representations of the Investor in Section 1.1(b) shall be true and
correct (A) in the case of the Registration Statement and any post-effective
amendments thereto, at the respective times referred to in Section 1.1(c), and
in the case of the Prospectus, as of its date, and (B) as of the Closing Date,
except that in the case of this clause (B) all references to any time period or
date referred to in Section 1.1(b) shall be deemed to be references to the
Closing Date. All other representations and warranties of the Investor contained
in this Agreement (i) that are qualified by materiality, Material Adverse Effect
or words of similar import, shall be true and correct as of the date hereof and
as of the Closing (except to the extent that any such representation and
warranty expressly speaks as of an earlier date, in which case such
representation and warranty shall be true and correct as of such earlier date)
and (ii) that are not qualified by materiality, Material Adverse Effect or words
of similar import, shall be true and correct in all material respects as of the
date hereof and as of the Closing (except to the extent that any such
representation and warranty expressly speaks as of an earlier date, in which
case such representation and warranty shall be true and correct in all material
respects as of such earlier date).
(b)    The Investor shall have performed in all material respects all of its
obligations hereunder required to be performed by it, and complied with the
covenants hereunder applicable to it in all material respects, at or prior to
the Closing.
(c)    The Company shall have received a certificate, signed by an officer of
the Investor, certifying as to the matters set forth in Section 5.2(a) and (b).

Section 5.3    Conditions to the Obligations of the Investor. The obligation of
the Investor to effect the Closing shall be subject to the following conditions:

(a)    The 10b-5 Representation shall be true and correct in all respects (A) in
the case of the Registration Statement and any post-effective amendments
thereto, at the respective times referred to in Section 1.1(c), and in the case
of the Prospectus, as of its date, and (B) as of the Closing Date, except that
in the case of this clause (B) all references to any time period or date
referred to in Section 1.1(c) shall be deemed to be references to the Closing
Date. All other representations and warranties of the Company contained in this
Agreement (i) that are qualified by materiality, Material Adverse Effect or
words of similar import, shall be true and correct as of the date hereof and as
of the Closing (except to the extent that any such representation and warranty
expressly speaks as of an earlier date, in which case such representation and
warranty shall be true and correct as of such earlier date) and (ii) that are
not qualified by materiality, Material Adverse Effect or words of similar
import, shall be true and correct in all material respects as of the date hereof
and as of the Closing (except to the extent that any such representation and
warranty expressly speaks as of an earlier date, in which case such
representation and warranty shall be true and correct in all material respects
as of such earlier date).
(b)    The Company shall have performed in all material respects all of its
obligations hereunder required to be performed by it, and complied with the
covenants hereunder applicable to it in all material respects at or prior to the
Closing.

(c)    The Investor shall have received a certificate, signed by an officer of
the Company, certifying as to the matters set forth in Section 5.3(a) and (b).

ARTICLE VI
TERMINATION

Section 6.1    Termination. This Agreement may be terminated at any time prior
to the Closing:

(a)    by mutual written agreement of the Company and the Investor;

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(b)    by either the Company or the Investor, upon written notice to the other,
in the event that the Closing does not occur on or before October 31, 2017,
subject to an automatic 60-day extension if the SEC reviews the Registration
Statement (the “Outside Date”); provided, however; the right to terminate this
Agreement pursuant to this Section 6.1(b) shall not be available to any party
whose failure to fulfill any obligation or comply with any covenant under this
Agreement shall have been the cause of, or shall have resulted in, the failure
of the Closing to occur on or prior to such date;
(c)    by either the Company or the Investor, upon written notice to the other
party, in the event that any Governmental Entity shall have issued any order,
decree or injunction or taken any other action restraining, enjoining or
prohibiting any of the transactions contemplated by this Agreement, and such
order, decree, injunction or other action shall have become final and
nonappealable;
(d)    by the Investor, if a breach of any representation, warranty, covenant or
agreement on the part of the Company set forth in this Agreement shall have
occurred that would, if occurring or continuing on the Closing Date, cause the
conditions set forth in Section 5.3(a) or (b) not to be satisfied, and such
breach is not cured, or is incapable of being cured, within ten (10) days (but
no later than the Outside Date) of receipt of written notice by the Investor to
the Company of such breach;
(e)    by the Company, if a breach of any representation, warranty, covenant or
agreement on the part of the Investor set forth in this Agreement shall have
occurred that would, if occurring or continuing on the Closing Date, cause the
conditions set forth in Section 5.2(a) or (b) not to be satisfied, and such
breach is not cured, or is incapable of being cured, within ten (10) days (but
no later than the Outside Date) of receipt of written notice by the Company to
the Investor of such breach;
(f)    by the Investor, upon written notice to the Company, if the Company shall
have entered into a definitive agreement to effect a Superior Transaction; or
(g)    by the Company, upon written notice to the Investor, if the Company shall
have entered into a definitive agreement to effect a Superior Transaction.

Section 6.2    Effects of Termination. In the event of the termination of this
Agreement as provided in Section 6.1, this Agreement (other than Article VII
which shall remain in full force and effect) shall forthwith become wholly void
and of no further force and effect; provided that nothing herein shall relieve
any party from liability for fraud or willful breach of this Agreement.

ARTICLE VII
MISCELLANEOUS

Section 7.1    Interpretation; Certain Definitions

(a)    Interpretation. When a reference is made in this Agreement to “Preamble,”
“Articles,” “Sections” or “Annexes,” such reference shall be to a Preamble,
Article or Section of, or Annex to, this Agreement unless otherwise indicated.
The terms defined in the singular have a comparable meaning when used in the
plural, and vice versa. The table of contents and headings contained in this
Agreement are for reference purposes only and are not part of this Agreement.
Whenever the words “include,” “includes” or “including” are used in this
Agreement, they shall be deemed followed by the words “without limitation.” No
rule of construction against the draftsperson shall be applied in connection
with the interpretation or enforcement of this Agreement, as this Agreement is
the product of negotiation between sophisticated parties advised by counsel. All
references to “$” or “dollars” mean the lawful currency of the United States of
America. Except as expressly stated in this Agreement, all references to any
statute, rule or regulation are to the statute, rule or regulation as amended,
modified, supplemented or replaced from time to time (and, in the case of
statutes, include any rules and regulations promulgated under the statute) and
to any section of any statute, rule or regulation include any successor to the
section.

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(b)    Certain Definitions. As used in this Agreement, the terms have the
following meanings:

“10b-5 Representation” shall have the meaning set forth in Section 1.1(c).
“Acquisition Transaction” means a (A) a merger, joint venture, partnership,
consolidation, dissolution, liquidation, tender offer, recapitalization,
reorganization, share exchange, business combination or similar transaction
involving the Company or (B) any other direct or indirect acquisition involving
50% or more of the total voting power of the Company, or all or substantially
all of the consolidated total assets (including equity securities of its
Subsidiaries) of the Company.
“Affiliate” of any Person means any other Person directly or indirectly
Controlling or Controlled by or under direct or indirect common Control with
such Person; provided, for purposes of this Agreement, the Company and its
subsidiaries shall not be deemed to be Affiliates of the Investor.
“Aggregate Offered Shares” shall have the meaning set forth in Section 1.1(d).
“Agreement” shall have the meaning set forth in the Preamble.
“Alternative Financing Transaction” means a transaction or series of related
transactions pursuant to which a Person(s) provides to the Company debt or
equity financing; provided that an Alternative Financing Transaction shall not
include (i) a change of control transaction involving the Company or its
stockholders, (ii) the liquidation, dissolution or reorganization of the
Company, or (iii) an Acquisition Transaction.
“Backstop Acquired Shares” shall have the meaning set forth in Section 1.2(a).
“Backstop Commitment” shall have the meaning set forth in Section 1.2(a).
“Basic Subscription Right” shall have the meaning set forth in Section 1.1(d).
Any Person shall be deemed to “Beneficially Own”, to have “Beneficial Ownership”
of, or to be “Beneficially Owning” any securities (which securities shall also
be deemed “Beneficially Owned” by such Person) that such Person is deemed to
“beneficially own” within the meaning of Rules 13d-3 and 13d-5 under the
Exchange Act as in effect on the date of this Agreement.
“Board” means the board of directors of the Company.
“Business Day” means any day other than a Saturday, Sunday or one on which banks
are authorized to close in New York, New York.
“Capital Stock” means any and all shares, interests, rights to purchase,
warrants, options, participations or other equivalents of or interests in
(however designated) stock or equity securities issued by the Company.
“Closing” shall have the meaning set forth in Section 1.2(b).
“Closing Date” shall have the meaning set forth in Section 1.2(b).
“Common Stock” means the common stock, par value $0.01 per share, of the
Company.
“Company” shall have the meaning set forth in the Preamble.
“Company Financial Statements” shall have the meaning set forth in
Section 2.6(b).

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“Company SEC Documents” shall have the meaning set forth in Section 2.6(a).
“Control” has the meaning specified in Rule 12b-2 under the Exchange Act.
“Credit Facility” means the revolving credit facility pursuant to that certain
Second Amended and Restated Credit Agreement, dated as of April 20, 2017, by and
among the Company, IQinVision, Inc. and the Investor.
“Effect” shall have the meaning set forth in the definition of “Material Adverse
Effect.”
“Exchange Act” shall have the meaning set forth in Section 2.6(a).
“Excluded Issuance” means any issuances of Common Stock, or options to acquire
Common Stock, pursuant to the Company’s Stock Plans.
“GAAP” means generally accepted accounting principles.
“Governmental Entity” means any domestic or foreign governmental or regulatory
authority, agency, commission, body, court or other legislative, executive or
judicial governmental entity.
“Indemnified Party” shall have the meaning set forth in Section 7.3(c).
“Indemnifying Party” shall have the meaning set forth in Section 7.3(c).
“Investor” shall have the meaning set forth in the Preamble.
“Law” means any federal, state, local or foreign law (including the Foreign
Corrupt Practices Act of 1977, as amended, and the laws implemented by the
Office of Foreign Assets Control, United States Department of Treasury), statute
or ordinance, common law, or any rule, regulation, judgment, order, writ,
injunction, decree, arbitration award, license or permit of any Governmental
Entity.
“Material Adverse Effect” means any event, state of facts, circumstance,
development, change, effect or occurrence (an “Effect”) that (i) is or could
reasonably be expected to be materially adverse to the financial condition,
business, properties, assets, liabilities or results of operations of the
Company and its Subsidiaries taken as a whole, other than any Effect:
(A) arising from changes or developments in the economy or financial markets
generally, except to the extent such changes or developments have a materially
disproportionate impact on the Company and its Subsidiaries, taken as a whole,
relative to other participants in the industries in which the Company and its
Subsidiaries conduct their businesses; (B) arising from general changes or
developments in any industry in which the Company and its Subsidiaries operate,
except to the extent such changes or developments have a materially
disproportionate impact on the Company and its Subsidiaries, taken as a whole,
relative to other participants in such industry; (C) arising from the
announcement or pendency of the transactions contemplated by this Agreement;
(D) arising from the taking of any action required by this Agreement;
(E) arising from changes in any Law or GAAP or interpretation thereof;
(F) arising from the failure by the Company to meet any public or other
estimates, budgets or forecasts of revenues, earnings or other financial
performance or results of operations (it being understood that the facts and
circumstances giving rise to such failure may be deemed to constitute, and may
be taken into account in determining whether there has been, a Material Adverse
Effect); or (G) declines in the price or trading volume of shares of any capital
stock of the Company or any change, or proposed change in the debt ratings of
the Company or any of its Subsidiaries or any debt securities of the Company or
any of its Subsidiaries (it being understood that the facts and circumstances
giving rise to such declines or changes may be deemed to constitute, and may be
taken into account in determining whether there has been, a Material Adverse

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Effect); or (ii) is materially adverse to the ability of the Company to
consummate the transactions contemplated by this Agreement.
“NYBCL” means the Business Corporation Law of the State of New York.
“NYSE” shall have the meaning set forth in Section 2.5(b).
“Over-Subscription Right” shall have the meaning set forth in Section 1.1(d).
“Person” means any individual, corporation, general or limited partnership,
limited liability company, joint venture, estate, trust, association,
organization, Governmental Entity or other entity of any kind or nature.
“Pre-Closing Period” shall have the meaning set forth in Section 4.1.
“Previously Disclosed” means (i) information set forth in or incorporated in the
Company’s Annual Report on Form 10-K for the fiscal year ended September 30,
2016 or its other reports and forms filed with the SEC under Sections 13, 14 or
15 of the Exchange Act after September 30, 2016 and (ii) the information set
forth in the Schedules corresponding to the provision of this Agreement to which
such information relates.
“Prospectus” shall have the meaning set forth in Section 1.1(c).
“Record Date” means the date as of which each holder of Common Stock shall be
offered one Right for each share of Common Stock held as of such date, which
date shall be selected by the Board (or a committee thereof) in accordance with
the NYBCL and the requirements of the NYSE.
“Registration Effective Date” shall have the meaning set forth in
Section 1.1(d).
“Registration Agreement” means that certain Warrant to Purchase 1,500,000 shares
of the Common Stock of Company issued to the Investor, originally dated as of
April 20, 2017, and amended pursuant to an Amendment to Warrant dated as of the
date hereof.
“Registration Statement” shall have the meaning set forth in Section 1.1(a).
“Representatives” means, with respect to a Person, such Person’s directors,
officers, investment bankers, attorneys, accountants and other advisors or
representatives.
“Right” means one non-transferable right to subscribe for a specified amount of
shares of Common Stock at the Rights Subscription Price.
“Rights Offering” shall have the meaning set forth in Section 1.1(d).
“Rights Subscription Price” means (x) the average per share closing price of the
Common Stock on the NYSE (as reported by Bloomberg L.P. or if not reported
thereby, by any other authoritative source) for the ten trading day period
ending two trading days immediately prior to the date the Registration Statement
is declared effective by the SEC, multiplied by (y) 0.90.
“SEC” means the Securities and Exchange Commission.
“Securities Act” shall have the meaning set forth in Section 7.4.

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“Stock Plans” means the Company’s 2007 Stock Incentive Plan and the Company’s
Amended and Restated 2011 Stock Incentive Plan.
“Subscription Notice” shall have the meaning set forth in Section 1.2(a).
“Subscription Period” shall have the meaning set forth in Section 1.1(d).
“Subsidiary” means any Person (whether or not incorporated) that the Company
directly or indirectly owns or in respect of which the Company has the power to
vote or control 50% or more of any class or series of capital shares or other
equity interests of such Person.
“Superior Transaction” means a bona fide written Alternative Financing
Transaction or Acquisition Transaction that the Board (or a committee thereof
consisting only of disinterested directors) has determined in good faith, after
receiving the advice of its financial advisors and outside legal counsel and in
the exercise of its fiduciary duties, is in the best interests of the Company’s
stockholders, including, in the case of an Alternative Financing Transaction, a
determination that such Alternative Financing Transaction would (i) provide the
Company with liquidity in an amount in excess of that expected to result from
the Rights Offering and Backstop Commitment or (ii) result in more favorable
economic terms (including in the case of an Alternative Financing Transaction
that is an equity investment, the price per share to be paid for the Capital
Stock of the Company) for the Company than the Rights Offering and Backstop
Commitment. Without limiting the generality of the foregoing, in evaluating
whether an Alternative Financing Transaction or Acquisition Transaction is in
the best interests of the Company’s stockholders, the Board shall take into
consideration, among other things, regulatory or other approvals that would be
required for such transaction, the Company’s leverage (both prior to and
following such transaction) and the Company’s ability to comply with existing
covenants under the Credit Facility and meet its obligations thereunder.

Section 7.2    Survival. Each of the representations and warranties in this
Agreement (or any certificate delivered pursuant hereto) shall survive the
execution and delivery of this Agreement and the Closing for a period of
eighteen (18) months following the Closing Date; provided that the
representations and warranties set forth in Section 1.1(b), Section 2.1,
Section 2.2, Section 2.3, and Section 2.4 and the 10b-5 Representation, and
corresponding representations and warranties in the officer’s certificate to be
delivered pursuant to Section 5.2(d) and Section 5.3(d), shall survive the
execution and delivery of this Agreement and the Closing indefinitely (or, in
each case, until final resolution of any claim or actions arising from the
breach of any such representation and warranty, if written notice of such breach
was provided prior to the end of such survival period).

Section 7.3    Indemnification.

(a)    Notwithstanding anything in this Agreement to the contrary, from and
after the date hereof the Company agrees to indemnify and hold harmless the
Investor and its Affiliates and each of their respective officers, directors,
partners, employees, agents and Representatives, to the fullest extent lawful,
from and against any and all actions, suits, claims, proceedings, costs, losses,
liabilities, damages, expenses (including reasonable and documented fees of
counsel), amounts paid in settlement and other costs (collectively, “Losses”)
arising out of or relating to (1) the Rights Offering, the Registration
Statement or the Prospectus, or (2) claims, suits or proceedings challenging the
authorization, execution, delivery, performance or termination of the Rights
Offering, this Agreement and/or any of the transactions contemplated hereby;
provided, however, that the foregoing indemnification shall not apply to Losses
to the extent they arise out of or relate to (i) any breach by any Indemnified
Party of this Agreement, or (ii) statements or omissions in the Registration
Statement or Prospectus or any amendment or supplement thereto made in

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reliance on or in conformity with written information relating to the Investor
furnished to the Company by or on behalf of the Investor expressly for use
therein.
(b)    Notwithstanding anything in this Agreement to the contrary, from and
after the date hereof, the Investor agrees to indemnify and hold harmless the
Company and its Affiliates and each of their respective officers, directors,
partners, employees, agents and Representatives, to the fullest extent lawful,
from and against any and all Losses arising out of or relating to statements or
omissions in the Registration Statement or Prospectus or any amendment or
supplement thereto made in reliance on or in conformity with written information
relating to the Investor furnished to the Company by or on behalf of the
Investor expressly for use therein.
(c)    A party seeking to be indemnified under this Section 7.3 (an “Indemnified
Party”) shall give written notice to the other party (the “Indemnifying Party”)
of any claim with respect to which it seeks indemnification promptly after the
discovery by such Indemnified Party of any matters giving rise to a claim for
indemnification pursuant to Section 7.3(a) or (b); provided that the failure of
any Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Section 7.3 unless, and then
only to the extent that, the Indemnifying Party shall have been actually
prejudiced by the failure of such Indemnified Party to so notify the
Indemnifying Party. Such notice shall describe in reasonable detail such claim
to the extent of the information available with respect thereto. In case any
such action, suit, claim or proceeding is brought against an Indemnified Party,
the Indemnified Party shall be entitled to hire, at its own expense, separate
counsel and participate in the defense thereof; provided, however, that the
Indemnifying Party shall be entitled to assume and conduct the defense, unless
the Indemnifying Party determines otherwise and following such determination the
Indemnified Party assumes responsibility for conducting the defense (in which
case the Indemnifying Party shall be liable for any reasonable and documented
legal fees and expenses of one law firm retained by the Indemnified Party and
other reasonable and documented out of pocket expenses reasonably incurred by
the Indemnified Party in connection with assuming and conducting the defense)
and provided, further, that if the Indemnifying Party is conducting the defense
the Indemnifying Party shall be liable for any reasonable and documented legal
fees and expenses of one law firm retained by the Indemnified Party and other
reasonable and documented out of pocket expenses reasonably incurred by the
Indemnified Party in connection with such claim if the Indemnified Party
reasonably shall have concluded (upon advice of its counsel) that there are one
or more legal defenses available to the Indemnified Party that are not available
to the Indemnifying Party or the Indemnified Party shall have concluded (upon
advice of its counsel) that, with respect to such claim, the Indemnified Party
and the Indemnifying Party have different, conflicting or adverse legal
positions or interests. If the Indemnifying Party assumes the defense of any
claim, all Indemnified Parties shall thereafter deliver to the Indemnifying
Party copies of all notices and documents (including court papers) received by
the Indemnified Party relating to the claim, and any Indemnified Party shall
reasonably cooperate in the defense or prosecution of such claim. Such
cooperation shall include the retention and (upon the Indemnifying Party’s
request) the provision to the Indemnifying Party of records and information that
are reasonably relevant to such claim and making employees available on a
mutually convenient basis to provide additional information and explanation of
any material provided hereunder. The Indemnifying Party shall not be liable for
any settlement of any action, suit, claim or proceeding effected without its
written consent. The Indemnifying Party further agrees that it will not, without
the Indemnified Party’s prior written consent, settle or compromise any claim or
consent to entry of any judgment in respect thereof in any pending or threatened
action, suit, claim or proceeding in respect of which indemnification has been
sought hereunder unless such settlement or compromise (i) involves solely a
monetary remedy payable by the Indemnifying Party and (ii) includes an
unconditional release of such Indemnified Party from all liability arising out
of such action, suit, claim or proceeding.
(d)    The obligations of the parties under this Section 7.3 shall survive the
Closing or termination of this Agreement and the transfer or other disposition
of the Backstop Acquired Shares. The agreements contained in this Section 7.3
shall be in addition to any other rights of the Indemnified Party against the
Indemnifying Party or others, under this Agreement at law or in equity.

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Section 7.4    Legends. The Investor agrees with the Company that each share of
Common Stock purchased by the Investor pursuant to the Backstop Commitment shall
contain a legend substantially to the following effect, unless the Company
determines otherwise in accordance with applicable Law:

THESE SHARES ARE HELD BY AN ‘‘AFFILIATE’’ OF VICON INDUSTRIES, INC., AS DEFINED
BY RULE 144 UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”).
ACCORDINGLY, THE COMPANY WILL NOT PERMIT THE SHARES REPRESENTED BY THIS
CERTIFICATE TO BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR
OTHERWISE DISPOSED TO A PROSPECTIVE TRANSFEREE UNLESS SUCH TRANSFER IS
ACCOMPANIED BY AN OPINION OF COUNSEL TO THE EFFECT THAT SUCH TRANSACTION IS IN
COMPLIANCE WITH THE SECURITIES ACT OR SUCH TRANSFER IS CONDUCTED PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT.
Section 7.5    Notices. All notices and other communications required or
permitted to be given under this Agreement shall be in writing and shall be
deemed to have been duly given (a) on the date of delivery, if delivered
personally or by facsimile or electronic mail, upon confirmation of receipt,
(b) on the first Business Day following the date of dispatch if delivered by a
recognized next-day courier services, or (c) on the third Business Day following
the date of mailing if delivered by registered or certified mail, return receipt
requested, postage prepaid, to the parties to this Agreement at the following
address or to such other address either party to this Agreement shall specify by
written notice to the other party:
 
If to the Company:
 
 
Vicon Industries, Inc.
135 Fell Court
Hauppauge, NY 11788
Attention: John Badke, Chief Executive Officer
 
 
 
 
With a copy to (which shall not constitute notice):
 
 
Fox Rothschild LLP
101 Park Avenue, Suite 1700
New York, NY 10178
Attention: Alison Newman, Esq.
 
 
 
 
If to the Investor:
 
 
NIL Funding Corporation
4838 Jenkins Avenue
North Charleston, South Carolina 29405
Attention: Michael Bender, Esq.

Section 7.6    Further Assurances. Each party hereto shall do and perform or
cause to be done and performed all further acts and shall execute and deliver
all other agreements, certificates, instruments and documents as any other party
hereto reasonably may request in order to carry out the intent and accomplish
the purposes of this Agreement and the consummation of the transactions
contemplated hereby.

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Section 7.7    Amendments and Waivers. Any provision of this Agreement may be
amended or waived if, but only if, such amendment or waiver is in writing and is
duly executed and delivered by the Company and the Investor. No failure or delay
by any party in exercising any right, power or privilege hereunder shall operate
as a waiver thereof nor shall any single or partial exercise thereof preclude
any other or further exercise thereof or the exercise of any other right, power
or privilege. The rights and remedies herein provided shall be cumulative and
not exclusive of any rights or remedies provided by Law.

Section 7.8    Fees and Expenses

(a)    Regardless of whether the Closing is consummated, the Company shall
reimburse the Investor for all reasonable fees and expenses (including
attorneys’ fees and expenses) incurred by the Investor in connection with this
Agreement and the transactions contemplated hereby in an amount not to exceed
$7,500; provided, however, that such fees and expenses shall not be reimbursed
by the Company in the event that this Agreement is terminated by the Company
pursuant to Section 6.1(e).
(b)    Payment of the Investor’s fees and expenses by the Company pursuant to
this Section 7.8 shall be made at the Closing or, if this Agreement is
terminated other than by the Company pursuant to Section 6.1(e), no later than
three (3) Business Days after delivery by the Investor to the Company of written
notice of (1) demand for payment after the termination of this Agreement, and
(2) reasonably detailed documentation of such fees and expenses.
(c)    Any amount that becomes payable by the Company pursuant to this
Section 7.8 shall be paid by wire transfer of immediately available funds to
account(s) designated in writing by the Investor.

Section 7.9    Successors and Assigns. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns. This Agreement shall not be assignable by operation of
law or otherwise, provided that, the Investor shall be permitted to assign this
Agreement (including any or all of the Investor’s rights or obligations
hereunder) to any of its Affiliates, provided further that no such assignment
shall relieve the Investor of its obligations hereunder. Without limiting the
foregoing, none of the rights of the Investor hereunder shall be assigned to, or
enforceable by, any Person to whom an Investor may transfer capital stock of the
Company (other than a transfer to the Investor’s Affiliates to the extent
permitted in accordance with the terms of this Agreement).

Section 7.10    Governing Law. This Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of New York,
without regard to the conflicts of laws provisions thereof.

Section 7.11    Jurisdiction. Any suit, action or proceeding seeking to enforce
any provision of, or based on any matter arising out of or in connection with,
this Agreement or the transactions contemplated hereby shall be brought and
determined exclusively in the United States District Court for the Southern
District of New York or any other court in New York, New York, and each of the
parties hereto hereby consents to the exclusive jurisdiction of such courts (and
of the appropriate appellate courts therefrom) in any such suit, action or
proceeding and irrevocably waives, to the fullest extent permitted by Law, any
objection which it may now or hereafter have to the laying of venue of any such
suit, action or proceeding in any such court or that any such suit, action or
proceeding which is brought in any such court has been brought in an
inconvenient forum. Process in any such suit, action or proceeding may be served
on any party hereto anywhere in the world, whether within or without the
jurisdiction of any such court. Without limiting the foregoing, each party
hereto agrees that service of process on such party may be made by complying
with the provisions of Section 7.5, and such compliance shall be deemed
effective service of process on such party.

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Section 7.12    Waiver Of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY
WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY LITIGATION, ACTION, PROCEEDING,
CROSS-CLAIM, OR COUNTERCLAIM IN ANY COURT (WHETHER BASED ON CONTRACT, TORT, OR
OTHERWISE) ARISING OUT OF, RELATING TO OR IN CONNECTION WITH (I) THIS AGREEMENT
OR THE VALIDITY, PERFORMANCE, INTERPRETATION, COLLECTION OR ENFORCEMENT HEREOF
OR (II) THE ACTIONS OF THE PARTIES IN THE NEGOTIATION, AUTHORIZATION, EXECUTION,
DELIVERY, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT HEREOF.

Section 7.13    Entire Agreement. This Agreement constitutes the entire
agreement between the parties with respect to the subject matter of this
Agreement and supersedes all prior agreements and understandings, both oral and
written, between the parties and/or their affiliates with respect to the subject
matter of this Agreement.

Section 7.14    Effect of Headings and Table of Contents. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.

Section 7.15    Severability. If one or more provisions of this Agreement are
held to be unenforceable under applicable Law, such provision shall be deemed to
be excluded from this Agreement and the balance of this Agreement shall be
interpreted as if such provision were so excluded and shall be enforced in
accordance with its terms to the maximum extent permitted by Law.

Section 7.16    Counterparts; No Third Party Beneficiaries. This Agreement may
be signed in any number of counterparts, each of which shall be an original,
with the same effect as if the signatures were upon the same instrument. No
provision of this Agreement shall confer upon any Person other than the parties
hereto and any Indemnified Party any rights or remedies hereunder.

Section 7.17    Specific Performance. The transactions contemplated by this
Agreement are unique. Accordingly, each of the Company and the Investor
acknowledges and agrees that, in addition to all other remedies to which it may
be entitled, each of the parties hereto is entitled to seek a decree of specific
performance, provided that the party seeking specific performance is not in
material default hereunder. The Company and the Investor agree that, if for any
reason a party shall have failed to perform its obligations under this
Agreement, then the party seeking to enforce this Agreement against such
nonperforming party shall be entitled to specific performance and injunctive and
other equitable relief, and the parties further agree to waive any requirement
for the securing or posting of any bond in connection with the obtaining of any
such injunctive or other equitable relief. This provision is without prejudice
to any other rights that any party may have against another party for any
failure to perform its obligations under this Agreement, including the right to
seek damages for a breach of any provision of this Agreement, and all rights,
powers and remedies available (at law or in equity) to a party in respect hereof
by the other party shall be cumulative and not alternative or exclusive, and the
exercise or beginning of the exercise of any thereof by a party shall not
preclude the simultaneous or later exercise of any other rights, powers or
remedies by such party.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of date first written above.
 
VICON INDUSTRIES, INC.
 
 
 
By:
/s/ John M. Badke
 
Name:
John M. Badke
 
Title:
Chief Executive Officer and
Chief Financial Officer
 
 
 
 
NIL FUNDING CORPORATION
 
 
 
 
By:
/s/ Michael Bender
 
Name:
Michael Bender
 
Title:
Secretary