December 13, 1999
Westell Technologies, Inc.
000 Xxxxx Xxxxxxx Xxxxx
Aurora, IL
Gentlemen:
Reference is made to the 6% Subordinated Convertible Debenture
("Debenture") dated April 15, 1999 in the principal amount of $5,000,000 issued
by Westell Technologies, Inc. ("Company ") to Capital Ventures International
("Investor") and the Stock Purchase Warrant ("Warrant") issued to Investor by
the Company dated April 15, 1999 for the right to purchase 227,273 shares of the
Company Class A common stock.
This Letter Agreement documents the following agreements
between Investor and the Company:
1. In consideration of the issuance described in Paragraph 2 of this
Letter Agreement, Investor agrees that as to any transaction first announced by
December 31, 1999, the phrase "except for issuances which do not exceed 20% of
the Class A Common Stock " in the first sentence of Section 4(e) of the Warrant
and the first sentence of Section 8.3 of the Debenture shall be deemed to read
"except for issuances to shareholders of the other party which do not exceed 41%
(calculated on an after issuance basis) of the outstanding common stock of both
classes of the Company."
2. The Warrant is hereby amended to reduce the Exercise Price (as
defined in the Warrant) from $8.9208 to $5.9208, subject to further adjustment
from time to time in accordance with the Warrant. The number of shares of Common
Stock issuable upon exercise of the Warrant shall not be adjusted by reason of
the reduction in Exercise Price effected by this Paragraph 2; and there shall be
no further Exercise Price adjustment pursuant to Section 4(a) of the Warrant on
account of a Company Transaction which is subject to the waiver of Paragraph 1.
There shall be no adjustment to the Conversion Price of the Debenture by virtue
of the Warrant Exercise Price adjustment herein.
3. The Investor hereby releases and waives any claims against the
Company for money payments, damages, Warrant Exercise Price adjustments,
Debenture Conversion Price adjustments or otherwise which arise or could arise
or be assertable by reason of any action or occurrence under Section 8.10 of the
Debenture or Section 4(l) of the Warrant from April 15, 1999 through the date of
this Letter Agreement.
4. It is acknowledged that the " six month period" in the proviso of
the penultimate sentence of Section 8.10 of the Debenture and the proviso in the
last sentence of Section 4(l) of the Warrant is the period beginning April 15,
1999 and ending February 28, 2000.
5. Each party represents and warrants to the other that the execution
of this Letter Agreement by it has been authorized by all necessary corporation
action, including, for the Company, by its Board of Directors. This Letter
Agreement shall constitute an amendment to both the Debenture and the Warrant
and shall bind successor holders to the Debenture and the Warrant. The Company
shall not be required to register any transfer of the Debenture or Warrant
unless the transferee acknowledges the amendment thereto under this Letter
Agreement.
6. The undersigned acknowledges that the Company may be entering into
agreements with the other holders of warrants and debentures issued on April 15,
1999 which address the matters covered by this Letter Agreement. There shall be
no adjustment to the Warrant Exercise Price or the Debenture Conversion Price on
account of execution of any such agreements.
Capital Ventures International
By Heights Capital Management, as agent
By /s/Xxxxxx Xxxxx, president
Westell Technologies, Inc.
By/s/ Xxxx Xxxxxx, executive vice president
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