SECURITY AGREEMENT
THIS SECURITY AGREEMENT ("Agreement") dated as of April 14, 1999 is
entered into by Westell Technologies, Inc., a Delaware corporation
("Company"), Westell, Inc., an Illinois corporation and Westell
International, Inc., a Delaware corporation (collectively, the "Debtors"
and each individually a "Debtor"), and Castle Creek Technology Partners LLC
("Secured Party").
Recitals:
A. Company has entered into a certain Securities Purchase Agreement of
even date herewith between Company and Secured Party, pursuant to which
Secured Party has agreed, subject to the terms and conditions thereof, to
purchase a certain 6% Subordinated Convertible Debenture of even date (as
amended, restated or otherwise modified and in effect from time to time the
"Debenture").
B. It is a condition precedent to the purchase of the Debenture that
Debtors shall have granted the security interest contemplated by this
Agreement.
NOW, THEREFORE, in consideration of the premises and to induce Secured
Party to purchase the Debenture and to make the Loans to Company
thereunder, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. Definitions. Capitalized terms used herein without definition are
used herein as defined in the Debenture. In addition, the following terms
shall have the following meanings:
"Accounts" shall mean any "account," as such term is defined in
the Uniform Commercial Code.
"Account Debtor" shall mean the Person who is or may be obligated
to any Debtor under, with respect to or on account of an Account, an
Instrument, a General Intangible or other Collateral.
"Chattel Paper" shall mean any "chattel paper," as such term is
defined in the Uniform Commercial Code.
"Collateral" is defined in Section 2 hereof.
"Contracts" shall mean all contracts, undertakings or other
agreements (other than rights evidenced by Chattel Paper, Documents or
Instruments) in or under which any Debtor may now or hereafter have any
right, title or interest, including, without limitation, with respect to an
Account, any agreement relating to the terms of payment or the terms of
performance thereof.
"Copyrights" shall mean any of each Debtor's copyrights, rights
and interests in copyrights, works protectable by copyrights, copyright
registrations and copyright applications, including, without limitation,
the copyright registrations and applications listed on Schedule 3 attached
hereto, and all renewals of any of the foregoing, all income, royalties,
damages and payments now or hereafter due or payable under or with respect
to any of the foregoing, including, without limitation, damages and
payments for past, present and future infringements of any of the foregoing
and the right to xxx for past, present and future infringements of any of
the foregoing.
"Documents" shall mean any "documents," as such term is defined
in the Uniform Commercial Code.
"Equipment" shall mean any "equipment," as such term is defined
in the Uniform Commercial Code and shall include fixtures, motor vehicles,
tractors, trailers and other like property, whether or not the title
thereto is governed by a certificate of title or ownership.
"Event of Default" means an Event of Failure under the Debenture
after expiration of any cure periods.
"General Intangibles" shall mean any "general intangibles," as
such term is defined in the Uniform Commercial Code and shall include,
without limitation, all right, title and interest in or under any Contract,
drawings, materials and records, claims, literary rights, goodwill, rights
of performance, Copyrights, Trademarks, patents, warranties, rights under
insurance policies and rights of indemnification.
"Goods" shall mean any "goods," as such term is defined in the
Uniform Commercial Code.
"Instruments" shall mean any "instrument," as such term is
defined in the Uniform Commercial Code and shall include, without
limitation, promissory notes, drafts, bills of exchange, trade acceptances,
letters of credit and Chattel Paper.
"Inventory" shall mean any "inventory," as such term is defined
in the Uniform Commercial Code.
"Investment Property" shall mean any "investment property," as
such term is defined in the Uniform Commercial Code, other than shares or
other equity interests of non-U.S. subsidiaries.
"LaSalle" means LaSalle National Bank or its successors or
assigns or replacements of holders of Permitted Senior Indebtedness under
clause (i) of the definition of such Permitted Senior Indebtedness.
"Obligations" shall mean all obligations of the Company under the
Debenture, the PIK Debentures and the Cap Debenture including, without
limitations, the Company's obligation to pay principal and interest and to
redeem the Debentures.
"Patents" shall mean any of each Debtor's patents and patent
applications, including, without limitation, the inventions and
improvements described and claimed therein, all patentable inventions and
those patents and patent applications listed on Schedule 4 attached hereto,
and the reissues, divisions, continuation, renewals, extensions and
continuations-in-part of any of the foregoing, and all income, royalties,
damages and payments now or hereafter due or payable under or with respect
to any of the foregoing, including, without limitation, damages and
payments for past, present and future infringements of any of the foregoing
and the right to xxx for past, present and future infringements of any of
the foregoing.
"Permitted Senior Indebtedness" shall have the meaning given to
it in the Securities Purchase Agreement.
"Proceeds" shall mean "proceeds," as such term is defined in the
Uniform Commercial Code and shall include, without limitation, (a) any and
all proceeds of any insurance, indemnity, warranty or guaranty payable with
respect to any of the Collateral, (b) any and all payments, in any form
whatsoever, made or due and payable from time to time in connection with
any confiscation, condemnation, seizure or forfeiture of all or any part of
the Collateral by any governmental authority, and (c) any and all other
amounts from time to time paid or payable under, in respect of or in
connection with any of the Collateral.
"Subordination Agreement" means that certain Subordination
Agreement between Secured Party and LaSalle National Bank of even date
herewith and any successor subordination agreement executed by Secured
Party and LaSalle.
"Trademarks" shall mean any of each Debtor's trademarks, trade
names, corporate names, company names, business names, fictitious business
names, trade styles, service marks, logos, other business identifiers,
prints and labels on which any of the foregoing have appeared or appear,
all registrations and recordings thereof, and all applications in
connection therewith, including, without limitation, the trademarks and
applications listed on Schedule 5 attached hereto and renewals thereof, and
all income, royalties, damages and payments now or hereafter due or payable
under or with respect to any of the foregoing, including, without
limitation, damages and payments for past, present and future infringements
of any of the foregoing and the right to xxx for past, present and future
infringements of any of the foregoing.
"Uniform Commercial Code" shall mean the Uniform Commercial Code
as in effect from time to time in the State of Illinois; provided, however,
if, by reason of mandatory provisions of law, the attachment, perfection or
priority of Secured Party's security interest in any Collateral is governed
by the Uniform Commercial Code as in effect in a jurisdiction other than
the State of Illinois, the term "Uniform Commercial Code" shall mean the
Uniform Commercial Code as in effect in such other jurisdiction for
purposes of the provisions hereof relating to such attachment, perfection
or priority and for purposes of definitions related to such provisions.
2. Grant of Security Interest. As collateral security for the prompt
payment, performance and observance in full of the Obligations, each Debtor
hereby pledges and grants to Secured Party, a Lien on and security interest
in and to all of such Debtor's right, title and interest in the following
property and interests in property, whether now owned or hereafter acquired
by such Debtor and wherever located (collectively, the "Collateral"):
(a) all Accounts;
(b) all Inventory;
(c) all General Intangibles;
(d) all Instruments, together with all payments thereon or
thereunder;
(e) all Equipment;
(f) all Documents;
(g) all Contracts;
(h) all Goods;
(i) all Investment Property including without limitation all
shares of stock in Westell, Inc. and Westell International, Inc., but
except shares of stock of Conference Plus, Inc.;
(j) all bank and depositary accounts maintained by each Debtor,
all funds on deposit therein, all investments arising out of such funds,
all claims thereunder or in connection therewith, and all cash, securities,
rights and other property at any time and from time to time received,
receivable or otherwise distributed in respect of such accounts;
(k) all other tangible and intangible property of Debtor,
including without limitation, all Proceeds, products, accessions, rents,
profits, income, benefits, substitutions, additions and replacement of and
to any of the property described in this Section 2 including, without
limitation, any proceeds of insurance thereon and all rights, claims and
benefits against any Person relating thereto) and all books,
correspondence files, records, invoices and other papers, including,
without limitation, all tapes, cards, computer runs, computer programs,
computer files and other papers, documents and records in the possession or
under the control of each Debtor or any computer bureau or service company
from time to time acting for each Debtor.
3. Representations, Warranties and Covenants of Debtor. Each Debtor
represents and warrants to, and covenants with, Secured Party as follows:
(a) Debtor is and will be the owner of the Collateral and no Lien
other than Liens securing Permitted Senior Indebtedness and liens that are
Permitted Liens under the Loan Agreement pertaining to Permitted Senior
Indebtedness exists or will exist upon such Collateral at any time.
(b) This Agreement is effective to create in favor of Secured
Party a valid security interest in and Lien upon all of Debtor's right,
title and interest in and to the Collateral and, upon the filing of
appropriate Uniform Commercial Code financing statements in the
jurisdictions listed on Schedule 1 attached hereto, such security interest
will be duly perfected in all of the Collateral (other than Instruments not
constituting Chattel Paper, Investment Property, deposit accounts and cash
and Patents and Trademarks), and upon delivery of the Instruments and
Investment Property to LaSalle, duly endorsed by Debtor or accompanied by
appropriate instruments of transfer duly executed by Debtor, the security
interest in the Instruments will be duly perfected in accordance with the
provisions of the Subordination Agreement.
(c) All of the Equipment, Inventory and Goods are located at the
places specified on Schedule 1 attached hereto. Except as disclosed on
Schedule 1, none of the Collateral is in the possession of any bailee,
warehouseman, processor or consignee. The chief place of business, chief
executive office and the office where Debtor keeps its books and records
are located at the place specified on Schedule 1. Debtor does not do
business and has not done business under any trade name or fictitious
business name except as disclosed on Schedule 2 attached hereto.
(d) All information heretofore, herein or hereafter furnished to
Secured Party by or on behalf of Debtor with respect to the Collateral is
and will be accurate and complete in all material respects.
4. Agreements of Debtor. Subject to the provisions of the
Subordination Agreement and to Debtors' agreement under Security Agreement
pertaining to the Permitted Senior Indebtedness Debtor hereby agrees with
Secured Party as follows:
(a) Delivery of Instruments. Instruments shall be held by
LaSalle, and Secured Party's interest therein shall be governed by the
provisions of the Subordination Agreement (or other intercreditor letter as
to Collateral held by LaSalle).
(b) Other Documents and Actions. Debtors shall give, execute,
deliver, file or record any financing statement, notice, instrument,
agreement or other document that may be necessary or desirable in the
reasonable judgment of Secured Party to create, preserve, perfect or
validate the security interest granted pursuant hereto or to enable Secured
Party to exercise and enforce the rights of Secured Party hereunder with
respect to such security interest.
(c) Books and Records. Debtors shall maintain at their own cost
and expense complete and accurate books and records of the Collateral,
including, without limitation, a record of all payments received and all
credits granted with respect to the Collateral and all other dealings with
the Collateral. Upon the occurrence and during the continuation of any
Event of Default, Debtors shall deliver any such books
and records, or true and correct copies thereof, to Secured Party at any
time on demand. Debtors shall permit any representative of Secured Party to
inspect such books and records at any time during reasonable business hours
and shall provide photocopies thereof at Debtors' expense to Secured Party
upon the request of Secured Party.
(d) Notice to Account Debtors; Verification. (i) Upon the
occurrence and during the continuance of any Event of Default, upon request
of Secured Party, Debtors shall promptly notify (and each Debtor hereby
authorizes Secured Party so to notify) each Account Debtor in respect of
any Accounts or Instruments that such Collateral has been assigned to
Secured Party and that any payments due or to become due in respect of such
Collateral are to be made directly to the party having a senior lien on a
security interest in such collateral, and (ii) Secured Party shall have the
right at any time or times to make direct verification with the Account
Debtors of any and all of the Accounts.
(e) Intellectual Property. If any Debtor shall (i) obtain rights
to any patentable inventions, Copyrights, Patents or Trademarks not listed
on Schedule 3, 4 or 5, or (ii) become entitled to the benefit of any
Copyrights, Patents or Trademarks or any improvements on any Patent, the
provisions of this Agreement shall automatically apply thereto and Debtor
shall give Secured Party prompt written notice thereof. Each Debtor hereby
authorizes Secured Party to modify this Agreement by amending Schedules 3,
4 and 5, as applicable, to include any such Copyrights, Patents and
Trademarks.
(f) Further Identification of Collateral. Each Debtor shall, when
and as often as reasonably requested by Secured Party, furnish to Secured
Party, statements and schedules further identifying and describing the
Collateral and such other reports in connection with the Collateral as
Secured Party may reasonably request, all in reasonable detail.
(g) Investment Property. The Investment Property will be held by
LaSalle, and Secured Party's interest therein shall be governed by the
provisions of the Subordination Agreement (or other intercreditor letter as
to Collateral held by LaSalle).
(h) Compliance with Loan Documents. Each Debtor shall comply with
the provisions of the Loan Documents applicable to the Collateral,
including, without limitation, maintenance of insurance, restrictions on
dispositions and providing Secured Party the right to inspections with
respect to the Collateral.
(i) Other Liens. Each Debtor shall not create, permit or suffer
to exist, and shall defend the Collateral against and take such other
action as is necessary to remove, any Lien on the Collateral except
Permitted Liens, and shall defend the right, title and interest of Secured
Party in and to the Collateral and in and to all Proceeds thereof against
the claims and demands of all Persons whatsoever.
(j) Preservation of Rights. Whether or not any Event of Default
has occurred or is continuing, Secured Party may, but shall not be required
to, take any actions Secured Party reasonably deems necessary or
appropriate to preserve any Collateral or any rights against third parties
to any of the Collateral, including obtaining insurance on the Collateral
at any time when Debtors has failed to do so, and each Debtor shall
promptly pay, or reimburse Secured Party for, all expenses incurred in
connection therewith.
(k) Changes in Name; Location. Each Debtor shall notify Secured
Party promptly in writing prior to any change in Debtor's name, identity or
corporate structure or the proposed use by such Debtor of any trade name or
fictitious business name other than any such name set forth on Schedule 2
attached hereto. Each Debtor shall keep the Collateral at the locations
specified in any Schedule 1 and shall give Secured Party 30
days' prior written notice of any change in any Debtor's chief place of
business or of any new location for any of the Collateral.
(l) Intentionally Omitted
(m) Collection of Accounts. Until notice from Secured Party to
the contrary, given at any time after the occurrence and during the
continuance of any Event of Default, each Debtor shall, at its own expense,
endeavor to collect all amounts due with respect to any of the Accounts and
shall take such action with respect to such collection as such Debtor may
deem advisable.
(n) Proceeds of Collateral. Subject to the provisions of the
Subordination Agreement, upon demand therefor by Secured Party at any time
following the occurrence and during the continuance of any Event of
Default, each Debtor shall, forthwith upon receipt, transmit and deliver to
Secured Party, in the form received, all cash, checks, drafts and other
instruments or writings for the payment of money which may be received by
Debtor at any time in payment or otherwise as proceeds of any Collateral.
Any such items which may be so received by such Debtors shall not be
commingled by Debtors with any of its other funds or property but, until
delivery to Secured Party, shall be held separate and apart from such other
funds and property and in trust for Secured Party.
5. Remedies. Subject to the rights of any holders of Permitted Senior
Indebtedness, and pursuant to the provisions of the Subordination
Agreement, during the period during which an Event of Default shall have
occurred and be continuing:
(a) Secured Party shall have, in addition to other rights and
remedies provided for herein or otherwise available to it, all of the
rights and remedies of a Secured Party upon default under the Uniform
Commercial Code (whether or not the Uniform Commercial Code applies to the
affected Collateral) and Lender may, without notice, demand or legal
process of any kind except as may be required by law, at any time or times
(i) enter any Debtor's premises and take physical possession of the
Collateral and maintain such possession on such Debtor's premises, at no
cost to Lender, or remove the Collateral or any part thereof to such other
place or places as Secured Party may desire, (ii) require any Debtor to,
and such Debtor hereby agrees to, assemble the Collateral as directed by
Secured Party and make it available to Secured Party at a place to be
designated by Secured Party which is reasonably convenient to Secured Party
and such Debtor and (iii) without notice except as specified below, sell,
lease, assign, grant an option or options to purchase or otherwise dispose
of the Collateral or any part thereof at public or private sale, at any
exchange, broker's board or at any of the offices of Secured Party or
elsewhere, for cash, on credit or for future delivery, and upon such other
terms as Secured Party may deem commercially reasonable. Each Debtor agrees
that, to the extent notice of sale shall be required by law, at least 10
days' notice to such Debtor of the time and place of any public sale or the
time after which any private sale is to be made shall constitute reasonable
notification. Secured Party shall not be obligated to make any sale of
Collateral regardless of notice of sale having been given. Secured Party
may adjourn any public or private sale from time to time by announcement at
the time and place fixed therefor and such sale may, without further
notice, be made at the time and place to which it was so adjourned;
(b) Secured Party may make any reasonable compromise or
settlement deemed desirable with respect to any of the Collateral and may
extend the time of payment, arrange for payment in installments or
otherwise modify the terms of, any of the Collateral; and
(c) Secured Party may, in the name of Secured Party or in the
name of Debtor or otherwise, demand, xxx for, collect or receive any money
or property at any time payable or receivable on account of or in exchange
for any of the Collateral, but shall be under no obligation to do so.
6. Deficiency; Application of Proceeds. If the proceeds of sale,
collection or other realization of or upon the Collateral are insufficient
to cover the costs and expenses of such realization and the payment in full
of the Obligations, Company shall remain liable for any deficiency. Subject
to the provisions of the Subordination Agreement, the proceeds of any
collection, sale or other realization of all or any part of the Collateral
shall be applied: first, to payment of all expenses payable or reimbursable
by Company under the Debenture; second, to payment of all accrued unpaid
interest on the Debenture; third, to payment of principal of the Debenture;
fourth, to payment of any other amounts owing constituting Obligations; and
last, any remainder shall be for the account of and paid to Company.
7. Power of Attorney. Subject to the provisions of the Subordination
Agreement, each Debtor hereby irrevocably constitutes and appoints Secured
Party, with full power of substitution, as its true and lawful
attorney-in-fact with full irrevocable power and authority in the place and
stead of Debtor and in the name of Debtor or in its own name, from time to
time in the discretion of Secured Party, for the purpose of carrying out
the terms of this Agreement, to take any and all appropriate action and to
execute and deliver any and all documents and instruments which may be
necessary or desirable to accomplish the purposes of this Agreement and,
without limiting the generality of the foregoing, hereby gives Secured
Party the power and right, on behalf of Debtor, without notice to or assent
by Debtor, to do the following upon the occurrence and during the
continuance of an Event of Default:
(a) to ask, demand, collect, receive and acquittance and receipts
for any and all moneys due and to become due under any Collateral and, in
the name of Debtor or its own name or otherwise, to take possession of and
endorse and collect any checks, drafts, notices acceptances or other
Instruments for the payment of moneys due under any Collateral and to file
any claim or to take any other action or proceeding in any court of law or
equity or otherwise deemed appropriate by Secured Party for the purpose of
collecting any and all such moneys due under any Collateral whenever
payable and to file any claim or to take any other action or proceeding or
otherwise deemed appropriate by Secured Party for the purpose of collecting
any and all such moneys due under any Collateral;
(b) to pay or discharge charges or Liens levied or placed on or
threatened against the Collateral, other than Permitted Liens, to effect
any insurance required by the terms of the Credit Agreement and to pay all
or any part of the premiums therefor;
(c) to direct any party liable for any payment under any of the
Collateral to make payment of any and all moneys due and to become due
thereunder directly to Secured Party or as Secured Party may direct, and to
receive payment of and receipt for any and all moneys, claims and other
amounts due and to become due in respect of or arising out of any
Collateral;
(d) to sign and indorse any invoices, drafts against debtors,
assignments, verifications and notices in connection with Accounts and
other Documents constituting or relating to the Collateral;
(e) to commence and prosecute any suits, actions or proceedings
to collect the Collateral or any part thereof and to enforce any other
right in respect of any Collateral;
(f) to defend any suit, action or proceeding brought against
Debtor with respect to any Collateral;
(g) to settle, compromise or adjust any such suit, action or
proceeding as it relates to the Collateral and, in connection therewith, to
give such discharges or releases as Secured Party may deem appropriate;
(h) to communicate in its own name with any party to any Contract
with regard to the assignment of the right, title and interest of Debtor in
and under the Contracts hereunder and other matters relating thereto;
(i) to execute, in connection with any sale of Collateral
provided for in Section 5 hereof, any endorsements, assignments or other
instruments of conveyance or transfer with respect to the Collateral; and
(j) generally to sell, transfer, pledge, make any agreement with
respect to or otherwise deal with any of the Collateral as fully and
completely as though Secured Party were the absolute owner thereof for all
purposes and to do, at Secured Party's option and at Debtor's expense, at
any time or from time to time, all acts and things which Secured Party
reasonably deems necessary to protect, preserve or realize upon the
Collateral and Secured Party's Lien therein, in order to effect the intent
of this Agreement, all as fully and effectively as Debtor might do.
Each Debtor hereby ratifies, to the extent permitted by law, all actions
that such attorneys lawfully take or cause to be taken by virtue hereof.
The power of attorney granted hereunder is a power coupled with an interest
and shall be irrevocable until the Obligations are indefeasibly paid in
full and the Debenture, the PIK Debenture and the Cap Debentures are
terminated.
8. Termination. This Agreement and the Liens and security interests
granted hereunder shall not terminate until the termination of the
Debenture, the PIK Debenture and the Cap Debentures and the full and
complete performance and indefeasible satisfaction of all Obligations
(regardless of whether the Debenture, the PIK Debenture and the Cap
Debentures shall have earlier terminated); provided, however, that Debtors
may sell Collateral free and clear of the Lien and securities interests
granted herein if (i) such sale is permitted by the holders of the
Permitted Senior Indebtedness and (ii) such sale is a bona fide sale made
to a third party that is not an affiliate of any Debtor or a holder of
Permitted Senior Indebtedness. Upon the termination of this Agreement,
Secured Party shall forthwith cause to be assigned, transferred and
delivered free and clear of the Lien created herein, against receipt but
without any recourse, warranty or representation whatsoever, any remaining
Collateral to or on the order of Debtor.
9. Further Assurances. At any time and from time to time, upon the
request of Secured Party, and at the sole expense of Debtors, each Debtor
shall promptly and duly execute and deliver any and all such further
instruments, documents and agreements and take such further actions as
Secured Party may reasonably require in order for Secured Party to obtain
the full benefits of this Agreement, including, without limitation, using
Debtor's best efforts to secure all consents and approvals necessary or
appropriate for the assignment to Secured Party of any Collateral held by
Debtors or in which each Debtors has any rights not heretofore assigned,
the filing of any financing or continuation statements under the Uniform
Commercial Code with respect to the Liens and security interests granted
hereby, transferring Collateral to LaSalle's possession if a security
interest in such Collateral can be perfected by possession, placing the
interest of Secured Party as lienholder on the certificate of title of any
motor vehicle and obtaining waivers of liens from landlords and mortgagees.
Each Debtor further hereby authorizes Secured Party to file any such
financing or continuation statement without the signature of Debtor to the
extent permitted by law.
10. Limitation on Duty of Secured Party. The powers conferred on
Secured Party under this Agreement are solely to protect the Secured
Party's interest in the Collateral and shall not impose any duty upon it
to exercise any such powers. Except for the safe custody of any Collateral
in its possession and the accounting for moneys actually received by it
hereunder, Secured Party shall have no duty as to any of the Collateral.
Secured Party shall be accountable only for amounts that it actually
receives as a result of the exercise of such powers and neither Secured
Party nor any of their respective officers, directors, employees or agents
shall be responsible to Debtor for any act or failure to act, except for
gross negligence or willful misconduct. Without limiting the foregoing,
Secured Party shall be deemed to have exercised reasonable care in the
custody and preservation of the Collateral in its possession if such
Collateral is accorded treatment substantially equivalent to that which
Secured Party, in its individual capacity, accords its own property
consisting of the type of Collateral involved, it being understood and
agreed that Secured Party shall have no responsibility for taking any
necessary steps, other than steps taken in accordance with the standard of
care set forth above, to preserve rights against any Person with respect to
any Collateral.
11. Debtor to Remain Liable. Without limiting the generality of
Section 10, Secured Party shall have no obligation or liability under any
Contract or license by reason of or arising out of this Agreement or the
granting to Secured Party of a security interest therein or assignment
thereof or the receipt by Secured Party of any payment relating to any
Contract or licence hereto, nor shall Secured Party be required or
obligated in any manner to perform or fulfill any of the obligations of
Debtor under or pursuant to any Contract or license, or to make any payment
or to make any inquiry as to the nature or the sufficiency of any payment
received by it or the sufficiency of any performance by any party under any
Contract or license, or to present or file any claim, or to take any action
to collect or enforce any performance or the payment of any amount which
may have been assigned to it or to which it may be entitled at any time or
times.
12. Miscellaneous.
(a) No Waiver. No failure on the part of Secured Party to
exercise, and no course of dealing with respect to, and no delay in
exercising, any right, power or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise by Secured Party of any
right, power or remedy hereunder preclude any other or further exercise
thereof or the exercise of any other right, power or remedy. The rights and
remedies hereunder provided are cumulative and may be exercised singly or
concurrently, and are not exclusive of any rights and remedies provided by
law.
(b) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Illinois, without
giving effect to the choice of law principles thereof.
(c) Notices. All notices, demands and requests that any party is
required or elects to give to any other party shall be given in accordance
with the provisions of the Debenture.
(d) Amendments. The terms of this Agreement may be waived,
altered or amended only by an instrument in writing duly executed by Debtor
and Secured Party.
(e) Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the respective successors and assigns of each
of the parties hereto, provided, that Debtor shall not assign or transfer
its rights hereunder without the prior written consent of Secured Party.
(f) Counterparts; Headings. This Agreement may be executed in any
number of counterparts, all of which together shall constitute one and the
same instrument. The headings in this Agreement are for convenience
of reference only and shall not alter or otherwise affect the meaning
hereof.
(g) Severability. If any provision hereof is invalid or
unenforceable in any jurisdiction, then, to the fullest extent permitted by
law, the other provisions hereof shall remain in full force and effect in
such jurisdiction and shall be liberally construed in favor of Secured
Party in order to carry out the intentions of the parties hereto as nearly
as may be possible, and the invalidity or unenforceability of any provision
in any jurisdiction shall not affect the validity or enforceability of such
provision in any other jurisdiction.
(h) Other Documents. This Agreement supplements the Debenture and
nothing in this Agreement shall be deemed to limit or supersede the rights
granted to Secured Party in any Debenture. If any item of Collateral
hereunder also constitutes collateral granted to Secured Party under any
other mortgage, agreement or instrument, in the event of any conflict
between the provisions of this Agreement and the provision of such other
mortgage, agreement or instrument, the provision or provisions selected by
Secured Party shall control with respect to such Collateral. In the event
of any conflict between any provision of this Agreement and any provision
of the Debenture, the provisions of the Debenture shall control to the
extent of such inconsistency.
(i) Other Debentures. The Debenture is one of a duly authorized
issuance of _________________ Dollars ($_________) aggregate principal
amount of Subordinated Convertible Debentures of the Company referred to in
the Securities Purchase Agreement dated April 14, 1999, among the Company
and the initial Holders, each of which shall be secured by the Collateral.
The lien and securities interests held by the Holders of each of the series
of Debentures shall be held pro-rata regardless of the time of perfection
or attachment of the Security interests.
13. SUBMISSION TO JURISDICTION. EACH DEBTOR HEREBY IRREVOCABLY SUBMITS
TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR ILLINOIS
STATE COURT SITTING IN XXXX COUNTY, ILLINOIS IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT AND IRREVOCABLY AGREES THAT
ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY
NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR
PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT
FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF SECURED PARTY TO BRING
PROCEEDINGS AGAINST DEBTOR IN THE COURTS OF ANY OTHER JURISDICTION. ANY
JUDICIAL PROCEEDING BY ANY DEBTOR AGAINST SECURED PARTY OR ANY AFFILIATE
THEREOF INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING
OUT OF, RELATED TO, OR CONNECTION WITH THIS AGREEMENT SHALL BE BROUGHT ONLY
IN A COURT SITTING IN XXXX COUNTY, ILLINOIS.
14. WAIVER OF JURY TRIAL. EACH DEBTOR AND SECURED PARTY EACH WAIVE
THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY, IN ANY ACTION, PROCEEDING OR OTHER
LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER
PARTY OR PARTIES, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS OR
OTHERWISE. DEBT, LENDERS AND SECURED PARTY EACH AGREE THAT ANY SUCH CLAIM
OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT
LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE
RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY
ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART,
TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR THE OTHER
LOAN DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF. THIS WAIVER SHALL APPLY
TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO
THIS AGREEMENT.
* * * * *
IN WITNESS WHEREOF, the parties have caused this Security Agreement to
be duly executed and delivered as of the date first written above.
DEBTORS:
WESTELL TECHNOLOGIES, INC.
By:
------------------------------------
Name:
Title:
WESTELL INC.
By:
------------------------------------
Name:
Title:
WESTELL INTERNATIONAL, INC.
By:
------------------------------------
Name:
Title:
SECURED PARTY
By:
------------------------------------
Name:
Title:
SCHEDULE 1
FILING JURISDICTIONS AND COLLATERAL LOCATIONS
FILING JURISDICTIONS
COLLATERAL LOCATIONS
SCHEDULE 2
NAMES
SCHEDULE 3
COPYRIGHTS
SCHEDULE 4
PATENTS
SCHEDULE 5
TRADEMARKS
TRADEMARK REGISTRATIONS
FEDERAL TRADEMARKS
Xxxx Registration No. Date
STATE TRADEMARKS
Xxxx Registration No. Date
TRADEMARK APPLICATIONS
Xxxx Trademark Application No. Date Applied
