Exhibit 10.21
LOAN ACCOMODATION AGREEMENT
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This LOAN ACCOMODATION AGREEMENT ("Agreement") is entered into as of
June 29, 2001, by and between Westell Technologies, Inc., a Delaware corporation
(the "Company"), with headquarters located at 000 X. Xxxxxxx Xxxxx, Xxxxxx,
Xxxxxxxx 00000, and the Xxxxx family members or trusts for their benefit (each a
"Guarantor" and together the "Guarantors") set forth on the execution pages
hereof, with regard to the following:
RECITALS
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A. It is a condition of satisfying certain conditions of restructuring
the Company's senior credit line ("Credit Line") with LaSalle Bank, N.A.
("Bank") in the form attached as Exhibit A hereto ("Restructuring Amendment")
that the Guarantors provide a joint and several guaranty of the Credit Line of
$10,000,000 and to pledge cash and marketable securities in support thereof (the
"Guaranty and Pledge Documents").
B. The Guarantors desire to execute and deliver the Guaranty and Pledge
Documents in consideration for the issuance to them of warrants in the form of
Exhibit B hereto (the "Warrants") to purchase 512,820 shares of Company Class A
Common Stock at an exercise price of $1.95;(the "Warrant Shares");
NOW, THEREFORE, in consideration of their respective promises
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and Guarantors hereby
agree as follows:
AGREEMENTS
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ARTICLE I
1.1 Execution of Guaranty and Pledge Documents. At the Closing, subject
to the terms and the satisfaction (or waiver) of the conditions set forth in
this Agreement, the Guarantors agree to execute and deliver the Guaranty and
Pledge Documents.
1.2 Delivery of Warrants. At the Closing, subject to the terms and the
satisfaction (or waiver) of the conditions set forth in this Agreement, the
Company shall deliver to the Guarantors the executed Warrants.
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1.3 Closing Date. The Closing shall occur immediately following the
execution of this Agreement, and the date of Closing shall be the "Closing
Date."
ARTICLE II
GUARANTOR'S REPRESENTATIONS AND WARRANTIES
Each Guarantor represents and warrants on the date hereof, solely with
respect to itself and not with respect to any other Guarantor to the Company as
set forth in this Article II.
2.1 Purchase for Own Account. Guarantor is acquiring its Warrants for
Guarantor's own account for investment only and not with a view toward or in
connection with the public resale or distribution thereof, except pursuant to
sales that are exempt from the registration requirements of the Securities Act
and/or sales registered under the Securities Act of 1933, as amended (the
"Securities Act").. Guarantor will not resell the Warrants or the shares of
Class A Common Stock issuable upon exercise thereof (collectively, the
"Securities") except pursuant to sales that are exempt from the registration
requirements of the Securities Act and/or sales registered under the Securities
Act. Guarantor understands that Guarantor must bear the economic risk of this
investment indefinitely, unless the Securities are registered pursuant to the
Securities Act and any applicable state securities laws or an exemption from
such registration is available, and that the Company has no present intention of
registering any such Securities other than as contemplated by the Registration
Rights Agreement. By making the representations in this Section 2.1, the
Guarantor does not agree to hold any Securities for any minimum or other
specific term and reserves the right to dispose of any or all of the Securities
at any time in accordance with or pursuant to a registration statement or an
exemption from registration under the Securities Act.
2.2 Accredited Investor Status. Guarantor is an "accredited investor"
as that term is defined in Rule 501(a) of Regulation D.
2.3 Reliance on Exemptions. Guarantor understands that the Securities
are being offered and sold to Guarantor in reliance upon specific exemptions
from the registration requirements of the United States federal and state
securities laws and that the Company is relying upon the truth and accuracy of
the representations and warranties of Guarantor set forth herein in order to
determine the availability of such exemptions and the eligibility of Guarantor
to acquire the Securities.
2.4 Information. Guarantor and its counsel have been furnished all
materials relating to the business, finances and operations of the Company and
materials relating to the offer and sale of the Securities which have been
specifically requested by Guarantor. Guarantor has been afforded the opportunity
to ask questions of the Company and has received what Guarantor believes to be
complete and satisfactory answers to any such inquiries. Neither such materials
or inquiries nor any other due diligence investigation conducted by Guarantor
nor any of its
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representations, warranties, covenants or agreements shall modify, amend or
affect Guarantor's right to rely on the Company's representations and warranties
contained in Article III. Guarantor understands that Guarantor's investment in
the Securities involves a high degree of risk.
2.5 Governmental Review. Guarantor understands that no United States
federal or state agency or any other government or governmental agency has
passed upon or made any recommendation or endorsement of the Securities or an
investment therein.
2.6 Transfer or Resale. Guarantor understands that (i) except as
provided in the Registration Rights Agreement, the Securities have not been and
are not being registered under the Securities Act or any state securities laws,
and may not be transferred unless subsequently registered thereunder or an
exemption from such registration is available; (ii) any sale of such Securities
made in reliance on Rule 144 under the Securities Act (or a successor rule)
("Rule 144") may be made only in accordance with the terms of said Rule and
further, if said Rule is not applicable, any resale of such Securities without
registration under the Securities Act) may require compliance with some other
exemption under the Securities Act or the rules and regulations of the
Securities and Exchange Commission ("SEC") thereunder; and (iii) neither the
Company nor any other person is under any obligation to register such Securities
under the Securities Act or any state securities laws or to comply with the
terms and conditions of any exemption thereunder (in each case, other than
pursuant to this Agreement or the Registration Rights Agreement).
2.7 Legends. Guarantor understands that the certificates for the
Warrants and the Warrant Shares will bear a restrictive legend (the "Legend") in
the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE OF
THE UNITED STATES. THE SECURITIES REPRESENTED HEREBY MAY NOT BE OFFERED OR SOLD
OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
FOR THE SECURITIES UNDER APPLICABLE SECURITIES LAWS OR UNLESS OFFERED, SOLD OR
TRANSFERRED PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THOSE LAWS. Notwithstanding the foregoing, no opinion of counsel
shall be required for transfers of this Warrant without consideration to the
beneficiaries of the initial Holder provided that the beneficiaries execute
investment confirmations and covenants consistent with the representations and
covenants contained in this Warrant and the Accommodation Agreement in form
reasonably satisfactory to the Company.
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2.8 Authorization; Enforcement. This Agreement has been duly and
validly authorized, executed and delivered on behalf of Guarantor and are valid
and binding agreements of Guarantor enforceable against Guarantor in accordance
with their terms.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to each Guarantor on the date
hereof that:
3.1 Organization and Qualification. The Company and each of its
subsidiaries is a corporation duly organized, validity existing and in good
standing under the laws of the jurisdiction in which it is incorporated, and has
the requisite corporate power and authority to own its properties and to carry
on its business as now being conducted.
3.2 Authorization; Enforcement . (a) The Company has the requisite
corporate power and authority to (i) enter into, and perform its obligations
under this Agreement, (ii) issue and perform its obligations with respect to the
Warrants in accordance with the terms hereof and thereof, and (iii) issue the
Warrant in accordance with the terms and conditions of the Warrants; (b) the
execution, delivery and performance of this Agreement and the Registration
Rights Agreement (as defined in Section 4.2) by the Company and the execution
and delivery of the Warrants, and the consummation by it of the transactions
contemplated hereby and thereby and the reservation for issuance and issuance of
the Warrant Shares have been duly authorized by all necessary corporate action
and no further consent or authorization of the Company, its board of directors,
or its stockholders is required with respect to any of the transactions
contemplated hereby or thereby; (c) this Agreement and the Warrants have been,
and the Registration Rights Agreement when executed, will have been, duly
executed and delivered by the Company and (d) this Agreement and the Warrants
are, the Registration Rights Agreement, when executed and delivered will be, the
legal, valid and binding obligation of the Company enforceable against the
Company in accordance with their terms.
3.4 Issuance of Shares. The Warrant Shares are duly authorized and
reserved for issuance, and, upon exercise of the Warrants in accordance with the
terms thereof, will be validly issued, fully paid and non-assessable, and free
from all taxes, liens, claims and encumbrances and will not be subject to
preemptive rights or other similar rights of stockholders of the Company. The
Warrants are duly authorized and reserved for issuance, and are validly issued,
fully paid and non-assessable, and free from all taxes, liens claims and
encumbrances and are not and will not be subject to preemptive rights or other
similar rights of stockholders of the Company.
3.5 No Conflicts. The execution, delivery and performance of each of
this Agreement by the Company and the consummation by the Company of the
transactions contemplated hereby and thereby (including the issuance and
reservation for issuance, as applicable, of the Warrant Shares) do not and will
not (a) result in a violation of the Certificate of Incorporation or By-laws of
the Company or any of its subsidiaries, (b) conflict with, or constitute a
default (or an event which with notice or lapse of time or both would become a
default) under, or give to others any
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rights of termination, amendment, acceleration or cancellation of, any
agreement, indenture or instrument to which the Company or any of its
subsidiaries is a party, or (c) result in a violation of any law, rule,
regulation, order, judgment or decree (including, without limitation, U.S.
federal and state securities laws and regulations) applicable to the Company or
any of its subsidiaries, or by which any property or asset of the Company or any
of its subsidiaries, is bound or affected.
ARTICLE IV
COVENANTS
4.1 Expenses. The Company shall reimburse the Guarantors for the
reasonable fees and expenses incurred by them in connection with the
negotiation, preparation, execution, and delivery of this Agreement and the
other agreements and documents to be executed in connection herewith, (the
"Expenses"); The Company shall also reimburse the Guarantors for all expenses,
including reasonable costs of counsel, incurred in enforcing this Agreement.
4.2 Registration Rights. The Company commits to execute within 30 days
a registration rights agreements ("Registration Rights") Agreement in form
reasonably satisfactory to the parties and customary for transactions of this
nature pursuant to which the Company will use reasonable commercial efforts to
promptly file, cause to become effective and maintain a Registration Statement
for registration of sale of the Warrant Shares on Form S-3. The initial holder
of this Warrant (and related assignees thereof) shall be entitled to the benefit
of such Registration Rights Agreement.
4.3 Indemnification.
(a) To the extent permitted by law, the Company will indemnify, hold
harmless and defend the Guarantors against any claims, actions or
lawsuits brought or threatened by any third parties (including any
derivative actions brought in the name of the Company) and any direct
damages, liabilities or expenses incurred as a result thereof
(collectively, "Claims") to which any of them may become subject
insofar as such Claims arise directly out of or are based directly upon
this Agreement or the transactions contemplated hereby, including but
not limited to any payments made to the Bank pursuant to enforcement of
the Guaranty and Pledge Documents. Notwithstanding anything to the
contrary contained herein, this indemnification agreement: (w) shall
not apply with respect to a Claim arising out of or based upon a
violation of law which occurs in reliance upon and in conformity with
information furnished in writing to the Company by a Guarantor
expressly for use in the registration statement to be filed pursuant to
the Registration Rights Agreement or to Claims otherwise excluded from
indemnification under the Registration Rights Agreement; (y) shall not
apply to amounts paid in settlement of any
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Claim if such settlement is effected without the prior written consent
of the Company, which consent shall not be unreasonably withheld and
(z) shall not apply to a Claim arising out of breach by a Guarantor of
this Agreement. To the extent any indemnification by the Company is
prohibited or limited by law, the Company agrees to make the maximum
contribution with respect to any amounts for which it would otherwise
be liable under this Section 4.3 to the fullest extent permitted by
law.
(b) Promptly after receipt by a Guarantor of notice of the commencement
of any Claim, such Guarantor shall deliver to the Company a written notice of
the commencement thereof, and the Company shall have the right to participate
in, and, to the extent the Company so desires, to assume control of the defense
thereof with counsel selected by the Company and reasonably satisfactory to the
Guarantor; provided that the Company shall be obligated to diligently pursue
such defense. Notwithstanding, the foregoing, the Guarantors shall be entitled
to assume such defense and retain their own counsel with the fees and expenses
to be paid by the Company, if (i) the representation by such counsel of both the
Company and the Guarantors would be inappropriate due to actual conflicts of
interest between the Guarantors and the and any other party represented by such
counsel in such proceeding or (ii) (x) the actual or potential defendants in, or
targets of, any such action include both the Guarantors and the Company, and (y)
the Guarantors reasonably determine that there may be legal defenses available
to the Guarantors which are different from or in addition to those available to
the Company. In any event, the Company shall pay for only one separate legal
counsel for all of the Guarantors. The failure to deliver written notice to the
Company within a reasonable time of the commencement of any such action shall
not relieve the Company of any liability to the Guarantors under this Section
4.3 , except to the extent that the Company is actually prejudiced in its
ability to defend such action. The indemnification required by this Section
shall be made by periodic payments of the amount thereof during the course of
the investigation or defense, as such expense, loss, damage or liability is
incurred and is due and payable.
ARTICLE V
LEGEND REMOVAL, TRANSFER, AND CERTAIN SALES
5.1 Removal of Legend. The Legend shall be removed and the Company
shall issue a certificate without any legend to the holder of any Security upon
which such Legend is stamped, and a certificate for a Security shall be
originally issued without the Legend if (a) the sale of such Security is
registered under the Securities Act, (b) such holder provides the Company with
an opinion of counsel, in form, substance and scope customary for opinions of
counsel in comparable transactions (the reasonable cost of which shall be borne
by the Company) to the effect that a public sale or transfer of such Security
may be made without registration under the Securities Act, (c) such Security can
be sold pursuant to Rule 144 and a registered broker dealer provides to the
Company's transfer agent and counsel copies of (i) a "will sell" letter
satisfying
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the guidelines established by the SEC and its staff from time to time and (ii) a
customary seller's representation letter with respect to such a sale to be made
pursuant to Rule 144 and (iii) a Form 144 in respect of such Security executed
by such holder and filed (or mailed for filing) with the SEC or (d) such
Security can be sold pursuant to Rule 144(k). Each Guarantor agrees to sell all
Securities, including those represented by a certificate(s) from which the
Legend has been removed, or which were originally issued without the Legend,
pursuant to an effective registration statement and to deliver a prospectus in
connection with such sale or in compliance with an exemption from the
registration requirements of the Securities Act. In the event the Legend is
removed from any Security or any Security is issued without the Legend and
thereafter the effectiveness of a registration statement covering the resale of
such Security is suspended or a supplement or amendment thereto is required by
applicable securities laws, then upon reasonable advance notice to Guarantor
holding such Security, the Company may require that the Legend be placed on any
such Security that cannot then be sold pursuant to an effective registration
statement or Rule 144 or with respect to which the opinion referred to in clause
(b) next above has not been rendered, which Legend shall be removed when such
Security may be sold pursuant to an effective registration statement or Rule 144
or such holder provides the opinion with respect thereto described in clause (b)
next above. In the event that a Guarantor privately transfers or otherwise
privately disposes of any Security which does not contain a Legend and as to
which following such transfer or other disposition the transferee is not
entitled to sell such Security freely or pursuant to Rule 144 and the re-sale of
such Security by such transferee is not immediately thereafter registered under
the Securities Act, then, in connection with such transfer or other disposition
Guarantor and such transferee shall submit such Security for re-legending
applicable to such Security as held by such transferee. Notwithstanding the
foregoing, no opinion of counsel shall be required for transfers of the Warrants
without consideration to the beneficiaries of the Guarantors, provided that the
beneficiaries execute investment confirmations and covenants consistent with the
representations and covenants contained in this Agreement in form reasonably
satisfactory to the Company.
5.2 Transfer Agent Instructions . The Company shall instruct its
transfer agent to issue certificates, registered in the name of each Guarantor
or its nominee, for the Conversion Shares or Warrant Shares in such amounts as
specified from time to time by such Guarantor to the Company upon, and in
accordance with, the exercise of the Warrants. Such certificates shall bear a
legend only in the form of the Legend and only to the extent permitted by
Section 5.1 above. Nothing in this Section shall affect in any way a Guarantor's
obligations and agreement set forth in Section 5.1 hereof to resell the
Securities pursuant to an effective registration statement and to deliver a
prospectus in connection with such sale or in compliance with an exemption from
the registration requirements of applicable securities laws. Without limiting
any other rights of Guarantors or obligations of the Company, if (a) a Guarantor
provides the Company with an opinion of counsel, which opinion of counsel shall
be in form, substance and scope customary for opinions of counsel in comparable
transactions (the reasonable cost of which shall be borne by the Company), to
the effect that the Securities to be sold or transferred may be sold or
transferred pursuant to an exemption from registration or (b) a Guarantor
transfers Securities pursuant to Rule 144, the Company shall permit the
transfer, and, in the case
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of Warrant Shares, promptly instruct its transfer agent to issue one or more
certificates in such name and in such denomination as specified by such
Guarantor in order to effect such a transfer or sale.
ARTICLE VI
CONDITIONS TO THE COMPANY'S OBLIGATION TO ISSUE
6.1 Conditions to the Company's Obligation to Issue. The obligation of
the Company hereunder to issue the Warrants to the Guarantors at the Closing is
subject to the satisfaction, as of the date of such Closing and with respect to
the Guarantors, of each of the following conditions thereto, provided that these
conditions are for the Company's sole benefit and may be waived by the Company
at any time in its sole discretion:
(i) The Guarantors shall have executed the signature
page to this Agreement and delivered the same to the Company.
(ii) The Guarantors shall have delivered the Guaranty and
Pledge Documents to the Bank.
(iii) The Bank shall have executed the Restructuring
Amendment.
ARTICLE VII
CONDITIONS TO EACH GUARANTOR'S OBLIGATION TO PURCHASE
7.1 Conditions to the Closing. The obligation of each Guarantor
hereunder to purchase the Convertible Securities and Warrants to be purchased by
it on the date of the Closing is subject to the satisfaction of each of the
following conditions, provided that these conditions are for each Guarantor's
sole benefit and may be waived by such Guarantor (with respect to it) at any
time in such Guarantor's sole discretion:
(i) The Company shall have executed the signature page to
this Agreement and the Warrants and delivered the same to the
Guarantors.
(ii) The Bank and the Company shall have executed the
Restructuring Amendment.
ARTICLE VIII
GOVERNING LAW; MISCELLANEOUS
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8.1 Governing Law; Jurisdiction . This Agreement shall be governed by
and construed in accordance with the laws of the State of Delaware applicable to
contracts made and to be performed in the State of Delaware.
8.2 Counterparts. This Agreement may be executed in two or more
counterparts, including, without limitation, by facsimile transmission, all of
which counterparts shall be considered one and the same agreement and shall
become effective when counterparts have been signed by each party and delivered
to the other party. In the event any signature page is delivered by facsimile
transmission, the party using such means of delivery shall cause additional
original executed signature pages to be promptly delivered to the other parties.
8.3 Headings. The headings of this Agreement are for convenience of
reference and shall not form part of, or affect the interpretation of, this
Agreement.
8.4 Severability. If any provision of this Agreement shall be invalid
or unenforceable in any jurisdiction, such invalidity or unenforceability shall
not affect the validity or enforceability of the remainder of this Agreement or
the validity or enforceability of this Agreement in any other jurisdiction.
8.5 Scope of Agreement; Amendments. This Agreement and the documents
and instruments referenced herein contain the entire understanding of the
parties with respect to the matters covered herein and therein and, except as
specifically set forth herein, no Guarantor makes any representation, warranty,
covenant or undertaking with respect to the transactions contemplated hereby. No
provision of this Agreement may be waived other than by an instrument in writing
signed by the party to be charged with enforcement and no provision of this
Agreement may be amended other than by an instrument in writing signed by the
Company and each Guarantor.
8.6 Notice. Any notice herein required or permitted to be given shall
be in writing and may be personally served or delivered by courier or by
facsimile-machine confirmed telecopy, and shall be deemed delivered at the time
and date of receipt (which shall include telephone line facsimile transmission).
The addresses for such communications shall be:
If to the Company:
Westell Technologies, Inc.
000 X. Xxxxxxx Xxxxx
Xxxxxx, XX 00000
Telecopy: (000) 000-0000
Attention: Chief Financial Officer
with a copy to:
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Xxxx X. Xxxxx, P.C.
XxXxxxxxx, Will & Xxxxx
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, XX 00000
Telecopy: (000) 000-0000
If to any Guarantor, to the name of the Guarantor's
c/o:
Xxxxxx X. Xxxxx & Associates, Ltd.
0000 Xxxxxxxx Xxxxx
Xxxxx 000
Xxxxx, Xxxxxxxx 00000
with a copy to:
Xxxxxx X. Wall
Winston & Xxxxxx
00 Xxxx Xxxxxx Xxxxx
Xxxxxxx, XX 00000
Telecopy: 000-000-0000
. Each party shall provide notice to the other parties of any change in address.
8.7 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties and their successors and assigns. Neither
the Company nor any Guarantor shall assign this Agreement or any rights or
obligations hereunder without the prior written consent of the other, which, in
the case of any consent required of the Company, shall not be unreasonably
withheld. This provision shall not limit each Guarantor's right to transfer the
Securities pursuant to the terms of this Agreement. In addition, and
notwithstanding anything to the contrary contained in this Agreement the
Warrants and the Warrant Shares may be pledged, and all rights of Guarantor
under this Agreement or any other agreement or document related to the
transaction contemplated hereby may be assigned, without further consent of the
Company, to a bona fide pledgee in connection with a Guarantor's margin or
brokerage accounts.
8.8 Third Party Beneficiaries . This Agreement is intended for the
benefit of the parties hereto and their respective permitted successors and
assigns and is not for the benefit of, nor may any provision hereof be enforced
by, any other person.
8.11 Further Assurances. Each party shall do and perform, or cause to
be done and performed, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments and documents, as
the other party may reasonably request
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in order to carry out the intent and accomplish the purposes of this Agreement
and the consummation of the transactions contemplated hereby.
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IN WITNESS WHEREOF, the undersigned Guarantors and the Company have
caused this Agreement to be duly executed as of the date first above written.
COMPANY:
WESTELL TECHNOLOGIES, INC.
By: /s/ Xxxxxxxx Xxxxxxx
Name: Xxxxxxxx Xxxxxxx
Title: Vice President Chief Financial Officer
GUARANTORS:
Xxxxxxx X. Xxxxxxx Trust under agreement The Xxxxxxx Xxxxx Xxxxxxx Trust
Xxxxxxxx X. Xxxxx Children's Trust dated December 31, 1970
dated December 28, 1989
/s/ Xxxxxx X. Xxxxx
Xxxxxx X. Xxxxx, Trustee /s/ Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx, Co-Trustee
/s/ Xxxxxxxx X. Xxxxx
Xxxxxxxx X. Xxxxx, Co-Trustee
/s/ Xxxxxx Xxxxxxx Xxxxx III
Xxxxxx Xxxxxxx Xxxxx III, Co-Trustee
Xxxxxxx X. XxXxxxxxx Trust under agreement The Xxxxxxx X. XxXxxxxxx Trust dated
Xxxxxxxx X. Xxxxx Children's Trust December 31, 1970
dated December 28, 1989
/s/ Xxxxxx X. Xxxxx
Xxxxxx X. Xxxxx, Trustee /s/ Xxxxxxx X. Xxxxxxx
Xxxxxxx X. Xxxxxxx, Co-Trustee
/s/ Xxxxxxxx X. Xxxxx
Xxxxxxxx X. Xxxxx, Co-Trustee
/s/ Xxxxxx Xxxxxxx Xxxxx III
Xxxxxx Xxxxxxx Xxxxx III, Co-Trustee
Xxxxxx X. Xxxxx III Trust under agreement The Xxxxxx Xxxxxxx Xxxxx Trust
Xxxxxxxx X. Xxxxx Children's Trust Number Two dated December 30, 1974
dated December 28, 1989
/s/ Xxxxxx X. Xxxxx /s/ Xxxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxx, Trustee Xxxxxxx X. Xxxxxxx, Co-Trustee
/s/ Xxxxxxxx X. Xxxxx
Xxxxxxxx X. Xxxxx, Co-Trustee
/s/ Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx, Co-Trustee
EXHIBIT A
FORM OF BANK LOAN AMENDMENT
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EXHIBIT B
FORM OF WARRANT
THIS WARRANT WAS ORIGINALLY ISSUED ON JUNE 29, 2001 AND HAS NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS
OF ANY STATE AND MAY NOT BE SOLD, TRANSFERRED, HYPOTHECATED OR OTHERWISE
ASSIGNED EXCEPT PURSUANT TO A REGISTRATION STATEMENT WITH RESPECT TO SUCH
WARRANT WHICH IS EFFECTIVE UNDER SUCH ACT AND UNDER ANY APPLICABLE STATE
SECURITIES LAWS UNLESS, IN THE OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE
COMPANY, AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND STATE
SECURITIES LAWS IS AVAILABLE. Notwithstanding the foregoing, no opinion of
counsel shall be required for transfers of this Warrant without consideration to
the beneficiaries of the initial Holder provided that the beneficiaries execute
investment confirmations and covenants consistent with the representations and
covenants contained in this Warrant and the Accommodation Agreement in form
reasonably satisfactory to the Company.
STOCK PURCHASE WARRANT
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Date of Issuance: June 29, 2001 No. __
FOR VALUE RECEIVED, Westell Technologies, Inc. a Delaware corporation (the
"Company"), hereby grants to ________________ (the "Holder"), the right to
purchase from the Company 85,470 shares of the Company's Class A Common Stock
(the "Warrant Shares") at an exercise price of $1.95 per share (the "Exercise
Price"). This Warrant is issued pursuant to the terms of the Loan Accommodation
Agreement dated as of June 29, 2001 between the Company, the Holder and certain
other Persons listed therein (the "Accommodation Agreement"). The amount and
kind of securities purchasable pursuant to the rights granted hereunder and the
purchase price for such securities are subject to adjustment pursuant to the
provisions contained in this warrant (this "Warrant").
This Warrant is subject to the following provisions:
Section 1. Exercise of Warrant.
1A. Exercise Period. The Holder may exercise this Warrant , in
whole or in part (but not as to a fractional share of the Company's Class A
Common Stock), at any time and from time to time after the Date of Issuance to
and including five years from the date hereof (the "Exercise Period").
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1C. Exercise Procedure.
(i) This Warrant will be deemed to have been exercised when
the Company has received all of the following items (the "Exercise Time"):
(a) a completed Exercise Agreement, as described in paragraph
1D below, executed by the Holder;
(b) this Warrant;
(c) a cashiers' or certified check or wire transfer payable to
the Company in an amount equal to the product of the Exercise Price
multiplied by the number of Warrant Shares being purchased upon such
exercise (the "Aggregate Exercise Price").
(ii) Certificates for Warrant Shares purchased upon exercise
of this Warrant will be delivered by the Company to the Holder within five (5)
business days after the date of the Exercise Time. Unless this Warrant has
expired or all of the purchase rights represented hereby have been exercised,
the Company will prepare a new Warrant, substantially identical hereto,
representing the rights formerly represented by this Warrant which have not
expired or been exercised and will, within such five-day period, deliver such
new Warrant to the Person designated for delivery in the Exercise Agreement.
(iii) The Warrant Shares issuable upon the exercise of this
Warrant will be deemed to have been issued to the Holder at the Exercise Time,
and the Holder will be deemed for all purposes to have become the record holder
of such Warrant Shares at the Exercise Time.
(iv) The issuance of certificates for Warrant Shares upon
exercise of this Warrant will be made without charge to the Holder for any
issuance tax in respect thereof or other cost incurred by the Company in
connection with such exercise and the related issuance of Warrant Shares. Each
Warrant Share issuable upon exercise of this Warrant will, upon payment of the
Exercise Price therefor, be fully paid and nonassessable and free from all liens
and charges with respect to the issuance thereof.
(v) The Company will not close its books against the transfer
of this Warrant or of any Warrant Share issued or issuable upon the exercise of
this Warrant in any manner which interferes with the timely exercise of this
Warrant. The Company will from time to time take all such action as may be
necessary to assure that the par value per share of the unissued Warrant Shares
acquirable upon exercise of this Warrant is at all times equal to or less than
the Exercise Price then in effect.
(vi) The Company will assist and cooperate with the Holder
required to make any governmental filings or obtain any governmental approvals
prior to or in connection with
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any exercise of this Warrant (including, without limitation, making any filings
required to be made by the Company).
(vii) The Company will at all times reserve and keep available
sufficient shares of Common Stock as may be necessary to allow for the exercise
of this Warrant.
1D. Exercise Agreement. Upon any exercise of this Warrant, the
Exercise Agreement will be substantially in the form set forth in Exhibit A
hereto, dated the actual date of execution thereof.
Section 2. Adjustments.
2A. If the Company shall at any time change the number of
issued shares of Class A Common Stock without new consideration to the Company
(such as by stock dividend, stock split, or similar recapitalization, the total
number of Warrant Shares then remaining subject to purchase hereunder and the
Exercise Price per share shall be adjusted so that the total consideration
payable to the Company upon the purchase of all Warrant Shares not theretofore
purchased shall not be changed.
2B. In the case of any sale of assets, merger, consolidation,
combination or other corporate reorganization or restructuring of the Company
with or into another corporation which results in the outstanding shares of
Class A Common Stock being converted into or exchanged for different securities,
cash or other property, or any combination thereof (an "Acquisition"), the
Holder shall have the right thereafter and during the Exercise Period (subject
however to all of the terms and conditions set forth herein), to receive upon
exercise thereof the Acquisition Consideration (as defined below) receivable
upon the Acquisition by a holder of the number of shares of Class A Common Stock
which might have been obtained upon exercise of this Warrant or portion thereof,
as the case may be immediately prior to the Acquisition. The term "Acquisition
Consideration" shall mean the kind and amount of securities, cash or other
property or any combination thereof receivable in respect of one share of Class
A Common Stock upon consummation of an Acquisition.
2C. Notices.
(i) Immediately upon any adjustment of the Exercise Price, the
Company shall give written notice thereof to the Holder, setting forth in
reasonable detail and certifying the calculation of such adjustment.
(ii) The Company shall give written notice to the Holder at
least ten (10) days prior to the date on which the Company closes its books or
takes a record (A) with respect to any dividend or distribution upon the Common
Stock or (B) for determining rights to vote with respect to any Acquisition,
dissolution or liquidation.
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(iii) The Company shall also give written notice to the
Holders at least ten (10) days prior to the date on which any Acquisition,
dissolution or liquidation will take place.
Section 3. Cashless Exercise.
Notwithstanding anything to the contrary contained in this
Warrant, this Warrant may be exercised by presentation and surrender of this
Warrant to the Company at its principal executive offices with a written notice
of the Holder's intention to effect a cashless exercise, including a calculation
of the number of shares of Class A Common Stock to be issued upon such exercise
in accordance with the terms hereof (a "Cashless Exercise"). In the event of a
Cashless Exercise, in lieu of paying the Exercise Price in cash, the Holder
shall surrender this Warrant for the number of shares of Class A Common Stock
determined by multiplying the number of Warrant Shares to which it would
otherwise be entitled by a fraction, the numerator of which shall be the
difference between the then current Market Price per share of the Class A Common
Stock and the Exercise Price, and the denominator of which shall be such then
current Market Price per share of Class A Common Stock.
Section 4. Transfer, Exchange and Replacement of Warrant.
4A. Restriction on Transfer. Subject to the provisions of
Section 6C hereof, this Warrant and the rights granted to the Holder are
transferable, in whole or in part, upon surrender of this Warrant, together with
a properly executed assignment in the Form of Assignment attached hereto as
Exhibit B, at the office of the Company referred to in Section 8 below. Until
due presentment for registration of transfer on the books of the Company, the
Company may treat the registered holder hereof as the owner and holder hereof
for all purposes, and the Company shall not be affected by any notice to the
contrary.
4B. Warrant Exchangeable for Different Denominations. This
Warrant is exchangeable, upon the surrender hereof by the Holder at the office
of the Company referred to in Section 8 below, for new Warrants, in the form
hereof, of different denominations representing in the aggregate the right to
purchase the number of shares of Class a Common Stock which may be purchased
hereunder, each of such new Warrants to represent the right to purchase such
number of shares as shall be designated by the Holder of at the time of such
surrender.
4C. Replacement of Warrant. Upon receipt of evidence
reasonably satisfactory to the Company of the loss, theft, destruction, or
mutilation of this Warrant or, in the case of any such loss, theft, or
destruction, upon delivery, of an indemnity agreement reasonably satisfactory in
form and amount to the Company, or, in the case of any such mutilation, upon
surrender and cancellation of this Warrant, the Company, at its expense, will
execute and deliver, in lieu thereof, a new Warrants, in the form hereof, in
such denominations as Holder may request.
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4D. Cancellation; Payment of Expenses. Upon the surrender of
this Warrant in connection with any transfer, exchange, or replacement as
provided in this Section 4, this Warrant shall be promptly canceled by the
Company. The Company shall pay all issuance taxes (other than securities
transfer taxes) and charges payable in connection with the preparation,
execution, and delivery of Warrants pursuant to this Section 4.
4E. Warrant Register. The Company shall maintain, at its
principal executive offices (or such other office or agency of the Company as it
may designate by notice to the Holder), a register for this Warrant, in which
the Company shall record the name and address of the person in whose name this
Warrant has been issued, as well as the name and address of each transferee and
each prior owner of this Warrant.
Section 5. Registration Rights. The Company commits to execute
within 30 days a Registration Rights Agreement in form reasonably satisfactory
to the parties and customary for transactions of this nature pursuant to which
the Company will use its best efforts to promptly file, cause to become
effective and maintain a Registration Statement for registration of sale of the
Warrant Shares on Form S-3. The initial holder of this Warrant (and related
assignees thereof) shall be is entitled to the benefit of such Registration
Rights Agreement.
Section 6. Investment Representations. By acceptance of this Warrant:
6A. The Holder hereby represents that any Warrant Shares to be
acquired by it hereunder will be acquired for its own account, and that it has
no intention of selling such securities in a public distribution in violation of
the Federal securities laws or any applicable state securities laws.
6B. The Holder acknowledges that it is able to bear the
economic risk of any investment in the Warrants for an indefinite period of time
because the Warrants are being issued and sold under exemptions from
registration provided in the Securities Act and under applicable state
securities laws and, therefore, cannot be sold unless subsequently registered
under the Securities Act or applicable state securities laws or an exemption
from such registrations is available.
6C. Each certificate for this Warrant and the Warrant Shares
will be imprinted with a legend in substantially the following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND
MAY NOT BE SOLD, TRANSFERRED, HYPOTHECATED OR OTHERWISE ASSIGNED EXCEPT PURSUANT
TO A REGISTRATION STATEMENT WITH RESPECT TO SUCH SECURITIES WHICH IS EFFECTIVE
UNDER SUCH ACT AND UNDER ANY APPLICABLE STATE SECURITIES
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LAWS UNLESS, IN THE OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY,
AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND STATE SECURITIES
LAWS IS AVAILABLE. Notwithstanding the foregoing, no opinion of counsel shall be
required for transfers of this Warrant without consideration to the
beneficiaries of the initial Holder provided that the beneficiaries execute
investment confirmations and covenants consistent with the representations and
covenants contained in this Warrant and the Accommodation Agreement in form
reasonably satisfactory to the Company." "
6D. The Holder represents that it has had the opportunity to
ask questions and receive answers concerning the Warrant and to obtain whatever
information concerning the Company as has been requested by the Holder in order
to make its investment decision.
Section 7. No Voting Rights; Limitations of Liability. This
Warrant will not entitle the holder hereof to any voting rights or other rights
as a stockholder of the Company. No provision hereof, in the absence of
affirmative action by the Holder to purchase Warrant Shares, and no enumeration
herein of the rights or privileges of the Holder will give rise to any liability
of the Holder for the Exercise Price of Warrant Shares acquirable by exercise
hereof or as a stockholder of the Company.
Section 8. Notices. Except as otherwise expressly provided
herein, all notices referred to in this Warrant will be in writing and will be
delivered personally, sent by reputable express courier service (charges
prepaid) or sent by registered or certified mail, return receipt requested,
postage prepaid and will be deemed to have been given when so delivered, sent or
deposited in the U.S. Mail (i) to the Company, at its principal executive
offices and (ii) to the Holder of this Warrant, at such Holder's address as it
appears in the records of the Company (unless otherwise indicated by any such
Holder).
Section 9. Amendment and Waiver. Except as otherwise provided
herein, the provisions of this Warrant may be amended and the Company may take
any action herein prohibited, or omit to perform any act herein required to be
performed by it, only if the Company has obtained the prior written consent of
the Holder.
Section 11. Descriptive Headings; Governing Law. The
descriptive headings of the several Sections and paragraphs of this Warrant are
inserted for convenience only and do not constitute a part of this Warrant. The
construction, validity and interpretation of this Warrant will be governed by
the internal law, and not the conflicts law, of Delaware.
* * * * *
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IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by
its duly authorized officer and to be dated the Date of Issuance hereof.
Westell Technologies, Inc.
By:
-------------------------
Its:
-------------------------
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EXHIBIT A
EXERCISE AGREEMENT
------------------
To:
Dated:
The undersigned, pursuant to the provisions set forth in the attached
Warrant (Certificate No. 1), hereby agrees to subscribe for the purchase of
___________ shares of the Warrant Shares covered by such Warrant and makes
payment herewith in full therefor at the price per share provided by such
Warrant.
Signature:
------------------------
Name:
By:__________________________
Name:________________________
Title:_________________________
Address:
-------------------------
-------------------------
-------------------------
EXHIBIT B
FORM OF ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and
transfers all rights of the undersigned under the within Warrant, with respect
to the number of shares of Common Stock covered thereby set forth hereinbelow,
to:
Name of Assignee Address No. of Shares
--------------------------------------------------------------------------------
, and hereby irrevocably constitutes and appoints ______________________________
as agent and attorney-in-fact to transfer said Warrant on the books of the
within-named corporation, with full power of substitution in the premises.
Date:____________, _____,
In the presence of
Name:
Signature:
Title of Signing
Officer or Agent (if any):
Address:
Note: The above signature
should correspond exactly with the name on the face of the within Warrant.
