EXHIBIT 10.54
MODIFICATION AGREEMENT
THIS MODIFICATION AGREEMENT (this "AGREEMENT") is entered into effective
as of June 17, 1998, by and between IWL COMMUNICATIONS, INC., a Texas
corporation ("BORROWER"), and BANK ONE, TEXAS, NATIONAL ASSOCIATION, a
national banking association ("LENDER"). Unless otherwise defined herein or
unless the context indicates otherwise, any word herein beginning with a
capitalized letter shall have the meaning ascribed to such word in (i) that
certain Credit Agreement (the "GUIDANCE CREDIT AGREEMENT") dated August 1,
1997, between Borrower and Lender, (ii) that certain Revolving Credit
Agreement (the "REVOLVING CREDIT AGREEMENT") dated August 1, 1997, between
Borrower and Lender, and (iii) that certain Amended and Restated Credit
Agreement (the "TERM CREDIT AGREEMENT") dated August 28, 1997, between
Borrower and Lender (as amended from time to time, the Guidance Credit
Agreement, the Revolving Credit Agreement and the Term Credit Agreement,
collectively, the "CREDIT AGREEMENTS").
W I T N E S S E T H:
WHEREAS, pursuant to the Guidance Credit Agreement, Lender made available
to Borrower an advised guidance facility in an amount not to exceed
$5,000,000.00 for the purchase and subsequent lease of certain types of
communications equipment (the "GUIDANCE LOAN");
WHEREAS, pursuant to the Revolving Credit Agreement, Lender made a
revolving credit loan to Borrower in an amount not to exceed $5,000,000.00 for
working capital purposes and for other general corporate purposes (the
"REVOLVING LOAN");
WHEREAS, pursuant to the Term Credit Agreement, Lender made a term loan to
Borrower in the amount of $1,055,000.00 for the finance or refinance of the
acquisition cost of certain specified equipment (the "TERM LOAN") (the Guidance
Loan, the Revolving Loan and the Term Loan are hereinafter collectively referred
to as the "LOANS");
WHEREAS, pursuant to the Guidance Loan, Lender previously made advances to
Borrower evidenced by (i) that certain Promissory Note dated August 1, 1997 in
the principal amount of $822,000.00, (ii) that certain Promissory Note dated
August 1, 1997 in the principal amount of $605,000.00, (iii) that certain
Promissory Note dated November 3, 1997 in the principal amount of $1,234,000.00,
(iv) that certain Promissory Note dated January 28, 1998 in the principal amount
of $960,000.00, (v) that certain Promissory Note dated March 11, 1998 in the
principal amount of $933,000.00, and (vi) that certain Promissory Note dated
June 10, 1998 in the principal amount of $200,000.00 (collectively, the "AGF
NOTES"); the Revolving Loan is evidenced by that certain Promissory Note dated
August 1, 1997 in the principal amount of $5,000,000.00 (the "REVOLVING NOTE");
the Term Loan is evidenced by that certain Promissory Note dated August 28, 1997
in the principal amount of $1,055,000.00 (the "TERM NOTE"), all executed by
Borrower, payable to the order
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of Lender [the AGF Notes, the Revolving Note and the Term Note are hereinafter
collectively referred to as the "NOTES"] The Loans are further secured by,
among other things, (i) that certain Collateral Assignment and Security
Agreement dated August 1, 1997, executed by Borrower, as assignor, and
Lender, as assignee, and (ii) that certain Security Agreement dated August 1,
1997, executed by Borrower, as debtor, and Lender, as secured party
(collectively, the "SECURITY DOCUMENTS");
WHEREAS, Borrower has requested that for the period from the date hereof
until August 31, 1998 Lender make a short term loan (the "SHORT TERM
OVERLINE") to Borrower in the amount of $4,000,000.00;
WHEREAS, Lender has agreed to amend the Credit Agreements to accommodate
Borrower's request on the terms and conditions herein contained.
NOW, THEREFORE, KNOW ALL MEN BY THESE PRESENTS, That for and in
consideration of the terms and conditions contained herein and for other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged by the parties hereto, Lender and Borrower hereby agree as follows:
ARTICLE I
MODIFICATION
Section 1.01. SHORT TERM OVERLINE. Lender agrees to make available to
Borrower the Short Term Overline for the period from the date hereof until
August 31, 1998. Borrower agrees to execute the Overline Note to evidence the
Short Term Overline.
Section 1.02. MODIFICATION TO CREDIT AGREEMENTS. The Credit Agreement
and the Notes are hereby modified in all particulars necessary to provide that
all amounts outstanding thereunder (including principal, interest and other
fees, costs and expenses) shall be due and payable in full on August 31, 1998.
Section 1.03. MODIFICATION TO DEFINITION OF NOTE. The definition of
"Note" and "Notes" in the Credit Agreements are hereby modified to incorporate
the "Overline Note" as defined herein.
Section 1.04. NEW DEFINITIONS. The following definitions are hereby added
to the Credit Agreements:
"SHORT TERM OVERLINE" means the short term line of credit evidenced by
the Overline Note.
"OVERLINE NOTE" means the promissory note in the amount of
$4,000,000.00 executed by Borrower and payable to Lender.
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Section 1.05. REAFFIRMATION OF INDEBTEDNESS AND LIENS. Borrower hereby
acknowledges and agrees that the liens and security interests of the Security
Documents and the other Loan Documents secure the Notes, as modified hereby, and
the other Indebtedness, are valid and subsisting liens and security interests,
and are superior to all liens, security interests and other encumbrances.
Nothing herein contained shall impair the validity or priority of the liens and
security interests under the Security Documents or the other Loan Documents.
Section 1.06. DEFINITION OF LOAN DOCUMENTS. The term "Loan Documents", as
defined in the Credit Agreements and as used in the Credit Agreements, the other
Loan Documents and herein, shall be, and hereby is, modified to include this
Agreement and any and all other documents executed in connection with this
Agreement. All references to the term "Loan Documents" contained in the Credit
Agreements and the other Loan Documents are hereby modified and amended wherever
necessary to reflect such modification of such term.
ARTICLE II
CONDITIONS PRECEDENT
Section 2.01. CLOSING. The closing (the "CLOSING") of the transactions
contemplated by this Agreement shall occur on and as of the date that all
conditions hereto contained in Section 2.02 of this Agreement have been
satisfied.
Section 2.02. CONDITIONS TO THE CLOSING. As conditions precedent to the
Closing, all of the following shall have been satisfied:
(a) Borrower shall have executed and delivered to Lender this
Agreement;
(b) Borrower shall have executed and delivered to Lender the Overline
Note;
(c) Borrower shall have executed and delivered to Lender a Notice of
Final Agreement in form and substance satisfactory to Lender;
(d) Lender shall have received all resolutions, certificates or other
documents as Lender may request relating to the formation, existence and good
standing of Borrower, corporate authority for the execution and validity of this
Agreement, and all other documents, instruments and agreements and any other
matters relevant hereto or thereto, all in form and substance satisfactory to
Lender.
ARTICLE III
GENERAL PROVISIONS
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Section 3.01. PAYMENT OF EXPENSES. In addition to the extension fee above
required, Borrower further agrees to pay, upon demand, the reasonable
attorneys' fees and expenses of Lender's counsel, filing and recording fees and
other reasonable expenses incurred by Lender in connection with this Agreement.
Section 3.02. RATIFICATION. Except as otherwise expressly modified by
this Agreement, all terms and provisions of the Credit Agreements, the Notes,
the Security Documents and the other Loan Documents shall remain unchanged and
hereby are ratified and confirmed and shall be and shall remain in full force
and effect, enforceable in accordance with their terms. Borrower hereby
confirms that the representations and warranties of Borrower contained in the
Loan Documents are true and correct in all material respects as of the
Modification Closing Date and that no default, nor any event which with notice
or passage of time or both could cause a default, has occurred as of the
Modification Closing Date.
Section 3.03. NO DEFENSES. Borrower hereby declares that it has no
set-offs, counterclaims, defenses or other causes of action against Lender
arising out of the Loan, the renewal, extension and modification of the Loan
hereby or by any documents mentioned herein or otherwise; and, to the extent
any such setoffs, counterclaims, defenses or other causes of action may
exist, whether known or unknown, such items are hereby waived by Borrower.
Section 3.04. NONWAIVER OF EVENTS OF DEFAULT. Neither this Agreement nor
any other document executed in connection herewith constitutes or shall be
deemed (a) a waiver of, or consent by Lender to, any default or event of default
which may exist or hereafter occur under any of the Loan Documents, (b) a waiver
by Lender of any of Borrower's obligations under the Loan Documents, or (c) a
waiver by Lender of any rights, offsets, claims, or other causes of action that
Lender may have against Borrower.
Section 3.05. FURTHER ASSURANCES. The parties hereto shall execute such
other documents as may be necessary or as may be required, in the opinion of
counsel to Lender, to effect the transactions contemplated hereby and to protect
the liens and security interests of the Security Documents, the insurance
thereof and the liens and/or security interests of all other collateral
instruments, all as modified by this Agreement. Borrower also agrees to provide
to Lender such other documents and instruments as Lender reasonably may request
in connection with the modification of the Loan effected hereby.
Section 3.06. USURY SAVINGS CLAUSE. Notwithstanding anything to the
contrary in this Agreement, the Notes or any other Loan Document, or in any
other agreement entered into in connection with the Notes or securing the
indebtedness evidenced by the Notes, whether now existing or hereafter arising
and whether written or oral, it is agreed that the aggregate of all interest and
other charges constituting interest, or adjudicated as constituting interest,
and contracted for, chargeable or receivable under the Notes or otherwise in
connection with the Notes shall under no circumstances exceed the maximum rate
of interest permitted by applicable law. In the event the maturity of the Notes
is accelerated by reason of an election by the holder thereof resulting from a
default thereunder or under any other document executed as security therefor or
in connection
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therewith, or by voluntary prepayment by the maker, or otherwise, then earned
interest may never include more than the maximum rate of interest permitted
by applicable law. If from any circumstance any holder of the Notes shall
ever receive interest or any other charges constituting interest, or
adjudicated as constituting interest, the amount, if any, which would exceed
the maximum rate of interest permitted by applicable law shall be applied to
the reduction of the principal amount owing on such Notes or on account of
any other principal indebtedness of the maker to the holder of such Notes,
and not to the payment of interest, or if such excessive interest exceeds the
unpaid balance of principal thereof and such other indebtedness, the amount
of such excessive interest that exceeds the unpaid balance of principal
thereof and such other indebtedness shall be refunded to the maker. All sums
paid or agreed to be paid to the holder of the Notes for the use, forbearance
or detention of the indebtedness of the maker to the holder of such Notes
shall be amortized, prorated, allocated and spread throughout the full term
of such indebtedness until payment in full for the purpose of determining the
actual rate on such indebtedness is uniform throughout the term thereof.
The terms "maximum amount" or "maximum rate" as used in this Agreement or
the Notes, or in any other agreement entered into in connection with the Notes
or securing the indebtedness evidenced by the Notes, whether now existing or
hereafter arising and whether written or oral, include, as to Chapter 303 of the
Texas Finance Code (and as same may be incorporated by reference in other
statutes of the State of Texas), but otherwise without limitation, that rate
based upon the "weekly ceiling"; provided, however, that this designation shall
not preclude the rate of interest contracted for, charged or received in
connection with the Loan from being governed by, or construed in accordance
with, any other state or federal law.
Section 3.07. BINDING AGREEMENT. This Agreement shall be binding upon,
and shall inure to the benefit of, the parties hereto and their respective
heirs, representatives, successors and assigns.
Section 3.08. SEVERABILITY. Borrower and Lender intend and believe that
each provision in this Agreement comports with all applicable local, state or
federal laws and judicial decisions. However, if any provision or provisions,
or if any portion of any provision or provisions, in this Agreement is found by
a court of law to be in violation of any applicable local, state or federal
ordinance, statute, law, administrative or judicial decision or public policy,
and if such court should declare such portion, provision or provisions of this
Agreement to be illegal, invalid, unlawful, void or unenforceable as written,
then it is the intent of both of Borrower and Lender that such portion,
provision or provisions shall be given force to the fullest possible extent that
they are legal, valid and enforceable, that the remainder of this Agreement
shall be construed as if such illegal, invalid, unlawful, void or unenforceable
portion, provision or provisions were not contained herein and that the rights,
obligations and interests of Borrower and Lender under the remainder of this
Agreement shall continue in full force and effect.
Section 3.09. COUNTERPARTS. This Agreement may be executed in several
counterparts, all of which are identical, each of which shall be deemed an
original, and all of which counterparts together shall constitute one and the
same instrument, it being understood and agreed that the signature pages may be
detached from one or more of such counterparts and combined with the
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signature pages from any other counterpart in order that one or more fully
executed originals may be assembled.
Section 3.10. CHOICE OF LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS, EXCEPT TO THE
EXTENT FEDERAL LAWS PREEMPT THE LAWS OF THE STATE OF TEXAS.
Section 3.11. ENTIRE AGREEMENT. This Agreement, together with the other
Loan Documents, contain the entire agreements between the parties relating to
the subject matter hereof and thereof and all prior agreements relative thereto
which are not contained herein or therein are terminated. This Agreement and
the other Loan Documents may be amended, revised, waived, discharged, released
or terminated only by a written instrument or instruments, executed by the party
against which enforcement of the amendment, revision, waiver, discharge, release
or termination is asserted. Any alleged amendment, revision, waiver, discharge,
release or termination which is not so documented shall not be effective as to
any party.
Section 3.12. CONFORMING PROVISIONS. Any and all of the terms and
provisions of the Notes, the Credit Agreements, the Security Documents and all
of the other Loan Documents, are hereby amended and modified wherever necessary,
and even though not specifically addressed herein, so as to conform to the
amendments and modifications thereto set forth in this Agreement.
THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT
BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
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IN WITNESS WHEREOF, this Agreement is executed effective as of the date
first written above.
BORROWER:
IWL COMMUNICATIONS, INC.,
a Texas corporation
By: /s/ Xxxxxxxx X. Xxxxxxxx
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Name: Xxxxxxxx X. Xxxxxxxx
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Title: Chief Executive Officer
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LENDER:
BANK ONE, TEXAS, NATIONAL ASSOCIATION,
a national banking association
By: /s/ Xxxx X. Xxxx
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Name: Xxxx X. Xxxx
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Title: Vice President
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CONSENT OF GUARANTORS
The undersigned Guarantors hereby consent to the modification to the Notes
and the other Loan Documents set forth in this Agreement, and acknowledge and
agree that (a) his or its Guaranty shall continue to, and does, guarantee the
Loans as amended by this Agreement, and (b) his or its Guaranty is in full force
and effect.
Executed as of June 18, 1998.
SPACELINK SYSTEMS, INC.
By: /s/ Xxxxxxxx X. Xxxxxxxx
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Name: Xxxxxxxx X. Xxxxxxxx
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Title: President
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SPACELINK SYSTEMS FSC, INC.
By: /s/ Xxxxxxxx X. Xxxxxxxx
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Name: Xxxxxxxx X. Xxxxxxxx
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Title: President
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IWL COMMUNICATIONS LTD.
By: /s/ Xxxxxxxx X. Xxxxxxxx
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Name: Xxxxxxxx X. Xxxxxxxx
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Title: President
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