COLLATERAL ASSIGNMENT AND SECURITY AGREEMENT
THIS COLLATERAL ASSIGNMENT AND SECURITY AGREEMENT (this "SECURITY
AGREEMENT") is executed and effective as of the 1st day of August, 1997, by
IWL COMMUNICATIONS, INC., a Texas corporation ("DEBTOR"), in favor of BANK
ONE, TEXAS, N.A., a national banking association ("LENDER").
W I T N E S S E T H:
WHEREAS, pursuant to that certain Credit Agreement (as modified from
time to time, the "CREDIT AGREEMENT") dated as of August 1, 1997, by and
between Lender and Debtor, as borrower, Lender has agreed to make the Advised
Guidance Facility available to Debtor upon the terms and conditions set forth
therein (unless otherwise defined herein, each term used herein with its
initial letter capitalized shall have the meaning given to such term in the
Credit Agreement); and
WHEREAS, as a condition to and in consideration for the agreement of
Lender to make monies available to Debtor and in order to provide collateral
security for the Obligations, Lender has requested that Debtor, and Debtor
has agreed to, enter into this Agreement pursuant to which Debtor will assign
to Lender the Lease Collateral (as hereafter defined) and grant to Lender a
first priority security interest in the Equipment Collateral (as hereafter
defined).
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency
of which are hereby acknowledged and confessed, Debtor agrees with Lender as
follows:
ARTICLE I
ASSIGNMENT AND GRANT
1.01. ASSIGNMENT AND GRANT OF SECURITY. Debtor (a) has ASSIGNED,
TRANSFERRED and CONVEYED, and by these presents does hereby ASSIGN, TRANSFER
and CONVEY unto Lender, the Lease Collateral (as set forth below) of Debtor,
and all rights, titles and interests of Debtor therein, and (b) hereby
GRANTS, PLEDGES AND ASSIGNS to Lender a security interest in the Equipment
Collateral (as set forth below) of Debtor, and all rights, titles and
interests of Debtor therein, wherever located and whether now owned or
hereafter acquired by Debtor or in which Debtor now has or at any time in the
future may acquire any right, title or interest (the Lease Collateral and
Equipment Collateral are collectively referred to herein as the
"COLLATERAL"). The following assets of Debtor shall be included in the
Collateral:
(i) All oral and written leases with, or other agreements for use made
by, any person or entity more particularly described in SCHEDULE 2 attached
hereto as such schedule may be amended or modified from time to time, and any
and all amendments, extensions, renewals,
COLLATERAL ASSIGNMENT AND SECURITY AGREEMENT Page 1
modifications and replacements thereof pertaining to, any portion of the
Equipment, whether such leases or other agreements have been heretofore or
are hereafter made or agreed to (such leases and other use agreements being
collectively referred to herein as the "LEASES");
(ii) The rents which are due or may hereafter become due pursuant to any
of the Leases and any other payments in addition to rent made by or due from
any and all lessees, or users under the Leases including, without limitation,
security deposits and any monies, awards, damages or other payments made or
due under the Leases (which rents and payments together with any and all
other rents, issues and profits which may now or hereafter arise in
connection with the ownership or operation of the Equipment are herein
collectively referred to as the "RENTS"); it being intended that this
granting clause shall constitute an absolute and present assignment of the
Rents;
(iii) All rights, powers, privileges, options and other benefits
(collectively, "RIGHTS") of Debtor under the Leases, including, without
limitation:
(A) The immediate and continuing right to receive and
collect all rents, income, revenues, issues, profits, insurance
proceeds, condemnation awards, monies and security deposits or
the like;
(B) The right to make all waivers and agreements,
including any waivers pertaining to the obligations of lessees;
(C) The right to give all notices, permissions,
consents and releases;
(D) The right to take such action upon the happening
of a default under the Leases (including the commencement,
conduct and consummation of proceedings at law or in equity) as
shall be permitted under any provisions of the Leases or by law;
(E) The right to do any and all other things
whatsoever which Debtor is or may become entitled to do under the
Leases including, without limitation, the right to cancel or
alter leases;
(F) The right to exercise any option required or
permitted under any of the Leases;
(G) The right to execute new leases of the Equipment;
and
COLLATERAL ASSIGNMENT AND SECURITY AGREEMENT Page 2
(H) The rights, powers, privileges and other benefits
of Debtor under any and all guaranties (the "GUARANTIES") of any
of the Leases;
(the Leases, Rents and Rights being sometimes collectively referred to as the
"LEASE COLLATERAL");
(iv) all machinery, equipment, tools, apparatus, furniture and
leasehold improvements, now owned or hereafter acquired by Debtor or in which
Debtor now has or hereafter may acquire any right, title or interest which
have been leased pursuant to any Lease and which have been purchased in whole
or in part with the proceeds of the Advised Guidance Facility, and any and
all additions, substitutions and replacements thereof, wherever located,
together with all attachments, components, parts, equipment and accessories
installed therein or affixed thereto (collectively, the "EQUIPMENT").
(v) all rights, claims and benefits of Debtor against any Person
arising out of, relating to or in connection with the Equipment (the
"EQUIPMENT RIGHTS"); and
(vi) all accessions to, all substitutions for and replacements of, and
all proceeds and products of any and all of the foregoing Equipment
(including, without limitation, proceeds which constitute property of the
types described in this SECTION 1.01) and, to the extent not otherwise
included, all payments under insurance (whether or not Lender is the loss
payee thereof), or any indemnity, warranty or guaranty, payable by reason of
loss or damage to or otherwise with respect to any of the foregoing Equipment
(the "EQUIPMENT PROCEEDS") (the Equipment, Equipment Rights and Equipment
Proceeds sometimes collectively referred to as the "EQUIPMENT COLLATERAL").
1.02. DESCRIPTION OF OBLIGATIONS. This Agreement creates a security
interest in the Collateral securing the payment and performance of the
Obligations, which includes, without limitation, all obligations and
indebtedness arising under or pursuant to the Credit Agreement, the AGF Notes
and the other Loan Documents.
1.03. DEBTOR REMAINS LIABLE. Anything herein to the contrary
notwithstanding, (a) Debtor shall remain liable under the contracts and
agreements included in the Collateral to the extent set forth therein to
perform all of its duties and obligations thereunder to the same extent as if
this Agreement had not been executed, (b) the exercise by Lender of any of
the Rights or Equipment Rights hereunder shall not release Debtor from any of
its duties or obligations under the contracts and agreements included in the
Collateral, and (c) Lender shall not have any obligation or liability under
the contracts and agreements included in the Collateral by reason of this
Agreement, nor shall Lender be obligated to perform any of the obligations or
duties of Debtor thereunder or to take any action to correct or enforce any
claim for payment assigned hereunder, make any payment, to make any inquiry
as to the nature or the sufficiency of any payment received by it or as to
the sufficiency of any performance by any party under any Lease, account or
other receivable (or any agreement giving rise thereto) or under any
contract, to
COLLATERAL ASSIGNMENT AND SECURITY AGREEMENT Page 3
present or file any claim, to take any action to enforce any performance or
to collect the payment of any amounts which may have been assigned to it or
to which it may be entitled at any time or times.
1.04. DELIVERY OF SECURITY COLLATERAL. All certificates or
instruments representing or evidencing the Collateral shall be delivered to
and held by or on behalf of Lender pursuant hereto, including, without
limitation, the original of each Lease set forth on SCHEDULE 2, and shall be
in suitable form for transfer by delivery, or shall be accompanied by duly
executed instruments of transfer or assignment in blank, all in form and
substance satisfactory to Lender. After the occurrence of an Event of
Default, Lender shall have the right, at any time in its discretion and
without notice to Debtor, to transfer to or to register in the name of Lender
or any of its nominees any or all of the Collateral.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
2.01. REPRESENTATIONS AND WARRANTIES. Debtor represents and
warrants, with respect to itself and the Collateral, as follows:
(a) The chief place of business and chief executive office of Debtor
and the office where Debtor keeps all of its records concerning the Leases
and Equipment are located at the offices specified in SCHEDULE 1 hereto. To
the best of Debtor's knowledge, the Equipment is located at the places
specified by Debtor in writing to Lender from time to time.
(b) Debtor is the legal and beneficial owner of all the Collateral free
and clear of any lien or security interest, option or other charge or
encumbrance except for the security interest created by this Agreement and
the rights of the lessees under the Leases and inchoate tax liens, if any.
No effective financing statement or other similar document used to perfect
and preserve a security interest under the laws of any jurisdiction covering
all or any part of the Collateral is on file in any recording office, except
such as may have been filed in favor of Lender relating to this Agreement.
(c) This Agreement and the pledge of the Lease Collateral pursuant
hereto creates a valid first priority security interest in the Lease
Collateral securing the payment of the Obligations, and upon filing of
financing statements in accordance with the Uniform Commercial Code in effect
in the State of Texas (the "UCC"), and any other necessary actions to perfect
such security interest, such first priority security interest in such Lease
Collateral will be duly perfected; and all filings and other actions
necessary or desirable to perfect and protect such security interest and such
priority have been duly taken (or will be taken).
COLLATERAL ASSIGNMENT AND SECURITY AGREEMENT Page 4
(d) No consent of any other Person and no authorization, approval or
other action by, and no notice to or filing with, any Governmental Authority
is required (i) for the pledge by Debtor of the Collateral pledged by it
hereunder, for the grant by Debtor of the security interest granted hereby or
for the execution, delivery or performance of this Agreement by Debtor, (ii)
as to the Lease Collateral, for the perfection or maintenance of the pledge,
assignment and security interest created hereby (including the first priority
nature of such pledge, assignment and security interest) except for UCC
filings or any other action required by the UCC or other applicable
perfection statutes, or (iii) for the exercise by Lender of the Rights or
Equipment Rights provided for in this Agreement or the remedies in respect of
the Collateral pursuant to this Agreement.
(e) Debtor has delivered to Lender all Leases that it has entered into
covering Equipment which has been purchased with the proceeds of the Advised
Guidance Facility, and SCHEDULE 2 is a true and correct list of all such
Leases.
(f) This Agreement constitutes a legal, valid and binding obligation of
Debtor enforceable in accordance with its terms, except as enforceability may
be limited by bankruptcy, insolvency or similar laws affecting the
enforcement of creditors' rights generally and by general principles of
equity.
(g) The execution, delivery and performance of this Agreement will not
violate any provision of any applicable law, rule, regulation or contractual
obligations of Debtor and will not result in the creation or imposition of
any lien on any of the properties or revenues of Debtor pursuant to any
applicable law, rule, regulation or contractual obligations of Debtor, except
as contemplated hereby and except as would not have a Material Adverse Effect.
(h) No action, suit or proceeding of or before any court, arbitrator or
any governmental body, agency or official is pending or, to the knowledge of
Debtor, threatened by or against Debtor or against any of its properties or
revenues with respect to this Agreement or any of the transactions
contemplated hereby.
ARTICLE III
COVENANTS
Debtor hereby covenants and agrees with respect to the Collateral now
owned or hereafter acquired by Debtor as follows:
3.01. FURTHER ASSURANCES. (a) Debtor will from time to time at its
expense promptly execute and deliver all further instruments and documents,
and take all further action, that may be necessary, or that Lender may
reasonably request, in order to perfect and protect any pledge, assignment or
security interest granted or purported to be granted hereby, and the priority
thereof,
COLLATERAL ASSIGNMENT AND SECURITY AGREEMENT Page 5
or to create or preserve the full benefits of this Agreement and the rights
and powers of Lender herein granted, or to enable Lender to exercise and
enforce its rights and remedies hereunder with respect to any of the
Collateral. Without limiting the generality of the foregoing, upon written
request by Lender, Debtor will (i) execute and file such financing or
continuation statements, or amendments thereto, and such other instruments or
notices, as may be necessary, or as Lender may request, in order to perfect
and preserve the pledge, assignment and security interest granted or
purported to be granted hereby with respect to any and all the Collateral and
(ii) take all other actions which Lender reasonably requires to perfect
Lender's security interest in the Equipment Collateral.
(b) Debtor hereby authorizes Lender to file one or more financing or
continuation statements, and amendments thereto, relating to all or any part
of the Collateral without the signature of Debtor where and to the extent
permitted by applicable law. A photocopy or other reproduction of this
Agreement or any financing statement covering the Collateral or any part
thereof shall be sufficient as a financing statement where and to the extent
permitted by applicable law.
(c) Debtor will furnish to Lender from time to time, upon the written
request of Lender, statements and schedules further identifying and
describing the Collateral, and such other reports in connection with the
Collateral, as Lender may reasonably request.
(d) In addition to such other information as shall be specifically
provided for herein, Debtor shall furnish to Lender such other information
with respect to the Collateral as Lender may reasonably request from time to
time in connection with the Collateral, or the protection, preservation,
maintenance or enforcement of the security interest or the Collateral,
including, without limitation, all documents and things in Debtor's
possession, or subject to its demand for possession, related to the
Collateral.
3.02. LEASES.
(a) Unless otherwise stated herein, no Leases or Rents have been or
will be assigned, or pledged.
(b) No Rents have been or will be anticipated, waived, released,
discounted, set off or compromised.
(c) Debtor shall perform all of its obligations under the Leases and
enforce the applicable lessee's obligations under the Leases.
(d) Except as provided in the Credit Agreement, Debtor will not modify
or amend any Lease without Lender's prior written consent.
COLLATERAL ASSIGNMENT AND SECURITY AGREEMENT Page 6
(e) Debtor will not terminate or consent to the cancellation or
surrender of any Lease without Lender's prior written consent.
(f) Debtor shall defend, at Debtor's expense, any proceeding pertaining
to any Lease, including, if Lender so requests, any such proceeding to which
Lender is a party.
(g) Debtor shall not receive or collect Rents more than one (1) month
in advance.
3.03. TAXES. Debtor shall pay all taxes, assessments and
governmental charges or levies imposed upon, and all claims (including claims
for labor, materials and supplies) against, the Collateral pledged by it
hereunder as provided in the Credit Agreement.
3.04. INSURANCE. Debtor will, at its own expense, maintain, or
cause to be maintained, insurance on the Collateral as provided in the Credit
Agreement, with Lender being named as loss payee and additional insured on
all insurance policies which pertain to the Collateral. If Debtor fails to
perform or observe any applicable covenants as to insurance on any of such
Collateral, Lender may at its own option obtain insurance on such Collateral,
and any premium therefor paid by Lender shall become part of the Obligations
and shall bear interest prior to the occurrence of an Event of Default at the
interest rate then applicable under the related AGF Note, and after the
occurrence of an Event of Default, at the Default Rate. In the event Lender
maintains such substitute insurance, the additional premium for such
insurance shall be due on demand and payable by Debtor to Lender in
accordance with any notice delivered to Debtor by Lender. Debtor hereby
grants Lender a security interest in any refunds of unearned premiums in
connection with any cancellation, adjustment or termination of any policy of
insurance required by Lender and in all proceeds of such insurance and hereby
appoints Lender its attorney-in-fact to, after the occurrence and during the
continuance of an Event of Default, endorse any check or draft that may be
payable to Debtor in order to collect such refunds or proceeds. Any such
sums collected by Lender shall be credited, except to the extent applied to
the purchase by Lender of similar insurance, to any amounts then owing on the
Obligations.
ARTICLE IV
RIGHTS AND POWERS OF LENDER
4.01. LENDER MAY PERFORM. If Debtor fails to perform any agreement
contained herein, Lender may, after the occurrence of an Event of Default,
itself perform, or cause performance of, such agreement, and the expenses of
Lender incurred in connection therewith shall be payable by Debtor as
provided in SECTION 4.05.
4.02. LIMITATION ON LENDER'S DUTIES. The powers conferred on Lender
hereunder are solely to protect the interests of Lender in the Collateral and
shall not impose any duty upon Lender to exercise any such powers. Lender
shall not have any duty as to any of the Collateral,
COLLATERAL ASSIGNMENT AND SECURITY AGREEMENT Page 7
as to ascertaining or taking action with respect to calls, conversions,
exchanges, maturities, tenders, options or other matters relative to any
Collateral, whether or not Lender has or is deemed to have knowledge of such
matters, or as to the taking of any necessary steps to preserve rights
against prior parties or any other rights pertaining to any reasonable care
in the custody and preservation of any Collateral in the possession of Lender
if such Collateral is accorded treatment substantially equal to that which
Lender accords its own property. Lender shall not have any duty or liability
to protect or preserve any Collateral or to preserve rights pertaining
thereto. Nothing contained in this Agreement shall be construed as requiring
or obligating Lender, and Lender shall not be required or obligated, to (a)
present or file any claim or notice or take any action, with respect to any
Collateral or in connection therewith or (b) notify Debtor of any decline in
the value of any Collateral. Lender shall not, nor shall any of its
respective directors, officers, employees or agents be, liable for failure to
demand, collect or realize upon all or any part of the Collateral or for any
delay in doing so or shall be under any obligation to sell or otherwise
dispose of any Collateral upon the request of Debtor or otherwise.
4.03. LENDER'S APPOINTMENT AS ATTORNEY-IN-FACT.
(a) POWERS. Debtor hereby irrevocably constitutes and appoints Lender
and any officer or agent thereof, 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,
after the occurrence of an Event of Default (but not prior thereto), for the
purpose of carrying out the terms of this Agreement, to take any and all
appropriate action and to execute 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, Debtor hereby gives
Lender after the occurrence and during the continuance of an Event of Default
the power and right, on behalf of Debtor, without notice to or assent by
Debtor, to do the following:
(1) in the case of any Collateral, in the name of Debtor or its own
name, or otherwise, to take possession of and indorse and collect any
checks, drafts, notes, acceptances or other instruments for the payment of
moneys due under, or with respect to, 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 Lender for the purpose of collecting any
and all such moneys due or with respect to such Collateral whenever
payable;
(2) to pay or discharge taxes and liens levied or placed on or
threatened against the Collateral, to effect any repairs or any insurance
called for by the terms of this Agreement and to pay all or any part of the
premiums therefor and the costs thereof; and
(3) (i) to direct any party liable for any payment under any of the
Collateral to make payment of any and all moneys due or to become due
thereunder directly to Lender or as Lender shall direct; (ii) to ask or
demand for, collect, receive payment of and receipt for, any and all
moneys, claims and other amounts due or to become due at any time in
respect of or arising out of any Collateral; (iii) to sign and indorse any
invoices, freight
COLLATERAL ASSIGNMENT AND SECURITY AGREEMENT Page 8
or express bills, bills of lading, storage or warehouse receipts, drafts
against debtors, assignments, verifications, notices and other documents
in connection with any of the Collateral; (iv) to commence and prosecute
any suits, actions or proceedings at law or in equity in any court of
competent jurisdiction to collect the Collateral or any portion thereof
and to enforce any other right in respect of any Collateral; (v) to
defend any suit, action or proceeding brought against Debtor with respect
to any Collateral; (vi) to settle, compromise or adjust any suit, action or
proceeding described in the preceding clause and, in connection therewith,
to give such discharges or releases as Lender may deem appropriate; and
(vii) generally, to sell, transfer, pledge and make any agreement with
respect to or otherwise deal with any of the Collateral as fully and
completely as though Lender were the absolute owner thereof for all
purposes, and to do, at Lender's option and Debtor's expense, at any time,
or from time to time, all acts and things which Lender deems necessary to
protect, preserve or realize upon the Collateral and the liens of Lender
thereon and to effect the intent of this Agreement, all as fully and
effectively as Debtor might do.
This power of attorney is power coupled with an interest and shall be
irrevocable until (i) the Obligations shall have been paid in full and the
Advised Guidance Facility terminated or (ii) this Agreement shall have been
terminated.
(b) OTHER POWERS. Debtor also authorizes Lender after the occurrence
of and during the continuance of an Event of Default, at any time and from
time to time, to execute, in connection with any sale provided for in SECTION
4.04, any endorsements, assignments or other instruments of conveyance or
transfer with respect to the Collateral.
(c) NO DUTY ON THE PART OF LENDER. The powers conferred on Lender
hereunder are solely to protect the interests of Lender in the Collateral and
shall not impose any duty upon Lender to exercise any such powers. Lender
shall be accountable only for amounts that it actually receives as a result
of the exercise of such powers, and neither it nor any of its officers,
directors, employees or agents shall be responsible to Debtor for any act or
failure to act hereunder, except for its own gross negligence or willful
misconduct, IT BEING THE INTENT OF THE PARTIES HERETO THAT LENDER SHALL NOT
BE ACCOUNTABLE FOR ITS OWN NEGLIGENCE (WHETHER SOLE, CONTRIBUTORY,
COMPARATIVE OR OTHERWISE).
4.04. REMEDIES. The occurrence of an Event of Default under the
Credit Agreement shall constitute a default of this Agreement. If an Event
of Default shall occur and be continuing, Lender may exercise, in addition to
all other rights and remedies granted to Lender in this Agreement and in any
other instrument or agreement securing, evidencing or relating to the
Obligations, all rights and remedies of a secured party under the UCC.
Without limiting the generality of the foregoing, Lender, without demand of
performance or other demand, presentment, protest, advertisement or notice of
any kind (except any notice required by law referred to below) to or upon
Debtor or any other Person (all and each of which demands,
COLLATERAL ASSIGNMENT AND SECURITY AGREEMENT Page 9
offenses, advertisements and notices are hereby waived), may in such
circumstances forthwith collect, receive, appropriate and realize upon the
Collateral, or any part thereof, and/or may forthwith sell, lease, assign,
give option or options to purchase, or otherwise dispose of and deliver the
Collateral or any part thereof (or contract to do any of the foregoing), in
one or more parcels at public or private sale or sales, at any exchange,
broker's board or office of Lender or elsewhere upon such terms and
conditions as it may deem advisable and at such prices as it may deem best,
for cash or on credit or for future delivery without assumption of any credit
risk. Lender shall have the right upon any such public sale or sales, and, to
the extent permitted by law, upon any such private sale or sales, to purchase
the whole or any part of the Collateral so sold, free of any right or equity
of redemption in Debtor, which right or equity is hereby waived and released.
Debtor further agrees, at Lender's request, to assemble the Collateral and
make it available to Lender at places which Lender shall reasonably select,
whether at Debtor's premises or elsewhere. Lender shall apply the net
proceeds of any such collection, recovery, receipt, appropriation,
realization or sale, after deducting all reasonable costs and expenses of
every kind incurred therein or incidental to the care or safekeeping of any
of the Collateral or in any way relating to the Collateral or the rights of
Lender hereunder, including, without limitation, reasonable attorneys' fees
and disbursements, to the payment in whole or in part of the Obligations, in
such order as Lender may elect, and only after such application and after the
payment by Lender of any other amount required by any provision of law, need
Lender account for the surplus, if any, to Debtor. To the extent permitted
by applicable law, Debtor waives all claims, damages and demands it may
acquire against Lender arising out of the exercise of any rights hereunder.
If any notice of a proposed sale or other disposition of Collateral shall be
required by law, such notice shall be deemed reasonable and proper if given
at least ten (10) days before such sale or other disposition. Debtor shall
remain liable for any deficiency if the proceeds of any sale or other
disposition of the Collateral are insufficient to pay the Obligations and the
fees and disbursements of any attorneys employed by Lender to collect such
deficiency.
4.05. INDEMNITY AND EXPENSES. (a) Debtor agrees to indemnify Lender
from and against any and all claims, damages, losses, liabilities, costs and
expenses of any kind (including reasonable attorneys' fees) arising out of or
resulting from this Agreement or the security interest granted herein, or any
of the Collateral (including, without limitation, enforcement of this
Agreement), EXPRESSLY INCLUDING SUCH CLAIMS, LOSSES OR LIABILITIES ARISING
OUT OF THE MERE NEGLIGENCE OF LENDER (WHETHER SOLE, CONTRIBUTORY,
COMPARATIVE, OR OTHERWISE), except claims, losses or liabilities resulting
from the gross negligence or willful misconduct of Lender.
(b) Debtor will upon demand pay to Lender the amount of any and all
reasonable expenses, including the reasonable fees and expenses of its
counsel and of any experts and agents, which Lender or, as to the matters
described in clauses (iii) or (iv) below, Lender may incur in connection with
(i) the administration of this Agreement, (ii) the custody, preservation, use
or operation of, or the sale of, collection from, or other realization upon,
any of the Collateral, (iii) the exercise or enforcement of any of the rights
of Lender hereunder or (iv) the failure by Debtor to perform or observe any
of the provisions hereof. Any such amounts so made shall be a part
COLLATERAL ASSIGNMENT AND SECURITY AGREEMENT Page 10
of the Obligation, shall be payable upon demand, and if not paid upon demand
shall bear interest at the Default Rate.
ARTICLE V
MISCELLANEOUS
5.01. CUMULATIVE RIGHTS. All Rights and Equipment Rights of Lender
under the Loan Documents are cumulative of each other and of every other
Right which Lender may otherwise have at law or in equity or under any other
contract or other writing for the enforcement of the security interest herein
or the collection of the Obligations. The exercise of one or more Rights or
Equipment Rights shall not prejudice or impair the concurrent or subsequent
exercise of other Rights or Equipment Rights.
5.02. MODIFICATIONS; AMENDMENTS; SCHEDULES; ETC. No amendment or
waiver of any provision of this Agreement, and no consent to any departure by
Debtor herefrom, shall in any event be effective unless the same shall be in
writing and signed by Lender, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for
which given. Upon the submission by Debtor of each Request for Advance in
connection with the Advised Guidance Facility, Debtor shall attach to each
such Request for Advance a replacement schedule for SCHEDULE 2, in form and
substance satisfactory to Lender, listing each new Lease and the lessee
thereunder, and Debtor shall file any amendments to and additional financing
statements as Lender may require to preserve and perfect a first priority
security interest in the Collateral.
5.03. CONTINUING SECURITY INTEREST. This Agreement shall create a
continuing security interest in the Collateral and shall remain in full force
and effect until the later of (i) the final payment in full of the
Obligations and all amounts payable under this Agreement and (ii) the
expiration or termination of the obligations of Lender to extend credit to
Debtor. Upon any such termination, Lender will, at Debtor's expense, execute
and deliver to Debtor such documents as Debtor shall reasonably request to
evidence such termination.
5.04. GOVERNING LAW; TERMS. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, EXCEPT TO THE
EXTENT THAT THE VALIDITY OR PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR
REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY
THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF TEXAS. UNLESS OTHERWISE
COLLATERAL ASSIGNMENT AND SECURITY AGREEMENT Page 11
DEFINED HEREIN OR IN THE CREDIT AGREEMENT, TERMS USED IN ARTICLE 9 OF THE UCC
ARE USED HEREIN AS THEREIN DEFINED.
5.05. WAIVER OF JURY TRIAL. DEBTOR HEREBY WAIVES TRIAL BY JURY IN
ANY JUDICIAL PROCEEDINGS INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER
(WHETHER IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED
TO, OR CONNECTED WITH THIS AGREEMENT OR THE RELATIONSHIP ESTABLISHED
HEREUNDER.
5.06. RIGHT TO USE AGENT. Lender may exercise its Rights or
Equipment Rights under or with respect to this Agreement through an agent,
representative, attorney or other designee.
5.07. WAIVERS OF RIGHTS INHIBITING ENFORCEMENT. Debtor waives (a)
any claim that a public sale, in and of itself, of all or any part of the
Collateral is not a commercially reasonable method of sale for such
Collateral, (b) except as otherwise provided in this Agreement, TO THE EXTENT
PERMITTED BY APPLICABLE LAW, ANY SUCH RIGHT THAT DEBTOR WOULD OTHERWISE HAVE
UNDER THE CONSTITUTION OR ANY STATUTE OF THE UNITED STATES OR OF ANY STATE,
AND ALL OTHER REQUIREMENTS AS TO THE TIME, PLACE AND TERMS OF SALE WITH
RESPECT TO THE ENFORCEMENT OF LENDER'S AND ALL OTHER RIGHTS HEREUNDER and (c)
all rights of redemption, appraisal or valuation.
5.8. NOTICES AND DELIVERIES.
(a) MANNER OF DELIVERY. All notices, communications and materials to
be given or delivered pursuant to this Agreement shall be delivered in
accordance with SECTION 9.1 of the Credit Agreement.
5.9. ENTIRE AGREEMENT. THIS AGREEMENT, TOGETHER WITH 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 ORAL AGREEMENTS AMONG THE PARTIES.
5.10. SUCCESSORS AND ASSIGNS. All of the provisions of this
Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns as and to the extent
provided in the Credit Agreement.
5.11. SEVERABILITY. If any provision of this Agreement is held to
be illegal, invalid, or unenforceable under present or future laws during the
term hereof, such provision shall be fully severable, this Agreement shall be
construed and enforced as if such illegal, invalid, or unenforceable
provision had never comprised a part hereof, and the remaining provisions
hereof shall remain in full force and effect and shall not be affected by the
illegal, invalid, or
COLLATERAL ASSIGNMENT AND SECURITY AGREEMENT Page 12
unenforceable provision or by its severance herefrom. Furthermore, in lieu
of such illegal, invalid, or unenforceable provision there shall be added
automatically as a part of this Agreement a legal, valid, and enforceable
provision as similar in terms to the illegal, invalid, or unenforceable
provision as may be possible.
5.12. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument.
COLLATERAL ASSIGNMENT AND SECURITY AGREEMENT Page 13
IN WITNESS WHEREOF, Debtor and Lender have duly executed and delivered
this Agreement effective as of the date first above written.
Address of Debtor: DEBTOR:
00000 Xxxxxxxxx Xxxxxx IWL COMMUNICATIONS, INC., a Texas
Suite 200 corporation
Xxxxxxx, Xxxxx 00000
Attn: Chief Financial Officer By: /s/ Xxxxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxxxxx
-------------------------------
Title: CFO
------------------------------
Address of Lender: LENDER:
BANK ONE, TEXAS, N.A., a
0000 Xxxx Xxxxxx, 0xx Xxxxx national banking association
Xxxxxx, Xxxxx 00000
Attention: Mr. Xxxx Xxxx By: /s/ Xxxx Xxxx
---------------------------------
Name: Xxxx Xxxx
-------------------------------
Title: Vice President
------------------------------
COLLATERAL ASSIGNMENT AND SECURITY AGREEMENT Page 14
SCHEDULE 1
Collateral Locations
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1. Chief Place of Business and Executive Office of Debtor:
SCHEDULE 1 Page 1
SCHEDULE 2
Leases
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SCHEDULE 2 Page 1
