RIGHTS OF THE HOLDERS TO RECEIVE PAYMENTS HEREUNDER ARE SUBJECT TO A
SUBORDINATION AGREEMENT DATED AS OF APRIL 14, 1999 (THE "SUBORDINATION
AGREEMENT") BY AND AMONG THE HOLDERS LISTED ON SCHEDULE A ATTACHED HERETO
AND LASALLE NATIONAL BANK ("SENIOR LENDER"). REFERENCE IS MADE TO SUCH
AGREEMENT FOR A FULL STATEMENT OF THE TERMS AND CONDITIONS OF SUCH
SUBORDINATION.
SUBORDINATE NOTE
FIXED RATE
------------------ Aggregate Principal
Chicago, Illinois Amount: $
(See Schedule A as to each Holder)
FOR VALUE RECEIVED, Westell Technologies, Inc., a Delaware corporation
(the "DEBTOR"), hereby promises to pay to the order of [
] or registered assigns or transferees hereof (each
a "Holder" and, collectively, the "Holders") the principal sum of
Dollars ($ ), together with
interest, in the manner provided herein. All principal and interest amounts
due under this Note are referred to herein as the "Obligations" and are
subject to the provisions of this Note.
1. Repayment of Principal. Debtor shall pay the entire principal
balance hereof and all accrued and unpaid interest thereon on or before
[date which is 365 days following the date of issuance of this Note].
2. Interest on Unpaid Principal Balance. Interest shall accrue on the
unpaid principal balance hereof at the rate of 12% per annum (the "Interest
Rate") and all interest provided herein shall be computed on the basis of a
365-day year. Accrued interest shall be paid on each June 30 and December
30 until the entire amount due under this Note is paid (each a "Payment
Date") (unless such day is not a business day, in which event on the next
succeeding business day) commencing with the first Payment Date following
the date of issuance of this Note. In the event an interest payment is
prohibited under the terms of the Subordination Agreement, the accrued
interest shall be capitalized and added to the principal balance hereof.
3. Allocation of Payments. The Debtor will pay to Holder, either by
certified check or by wire transfer, in immediately available funds, to
such account as Holder may specify in writing, all amounts payable to
Holder in respect of the principal of, or interest on this Note, without
any presentation of this Note. Each such payment, when paid, shall be
applied first to the payment of interest accrued and unpaid under this Note
and second to the payment or prepayment of the principal hereof. All
payments hereunder shall be made to Holder at the addresses for each set
forth on Schedule A attached hereto or as otherwise directed in writing by
such Holder.
4. Events of Default. Upon the happening of any one or more of the
following events (each, an "Event of Default"):
(1) If Debtor shall fail to pay any amount of principal or
interest when due and payable under this Note within five days
after any Holder gives Debtor notice of such non-payment (whether
on the due date or by acceleration or otherwise), except that
Debtor's failure to pay such principal or interest shall not be
an Event of Default hereunder to the extent that the Holders are
not entitled to receive such payment under the Subordination
Agreement; provided that Debtor makes such payment as soon as the
Holders are permitted to receive such payment
under such Subordination Agreement;
(2) An Event of Failure as defined in the Company's 6%
Subordinated Convertible Debentures issued April 14, 1999 (the
"Debentures"), shall have occurred or, if no Debentures are then
outstanding, any event shall have occurred which would have been
an Event of Failure under the Debentures if any Debentures were
then outstanding; or
(3) A Major Transaction (as defined in the Debentures) shall
have occurred, whether or not any Debentures are then
outstanding;
then and at any time thereafter during the continuance of any such Event of
Default: (i) Holder may, by notice to Debtor, declare the entire aggregate
principal of and accrued interest on this Note to be immediately due and
payable, whereupon this Note and all accrued interest will thereupon
immediately become due and payable without presentment, notice, demand,
protest, or further notice of any kind whatsoever, all of which are hereby
expressly waived, except that upon the occurrence of an Event of Default
specified in (c) above, the entire principal of and accrued interest on
this Note shall automatically and immediately become due and payable
without such notice and without presentment, notice, demand, or protest of
any kind whatsoever, all of which are hereby expressly waived; and (ii)
Holder may exercise any or all other remedies available under law or under
any other agreements or instruments securing or related to this Note.
5. Exchange. Holder may, by written request (a "Solvency Confirmation
Request") deliver to Debtor from time to time, request confirmation from
Debtor that Debtor continues to meet the Solvency Conditions (as defined in
the Debenture). Within five (5) business days of receipt of a Solvency
Confirmation Request (the "Confirmation Date") either (a) if Debtor
continues to meet the Solvency Conditions, this Note shall remain
outstanding and Debtor shall deliver to the Holder a certificate of the
chief financial officer of Debtor certifying that Debtor continues to meet
the Solvency Conditions or (b) if Debtor no longer continues to meet the
Solvency Conditions, this Note shall, at the option of Holder, be exchanged
for, and Debtor shall deliver to Holder, a debenture identical to the
Debenture (a "New Debenture") except that the New Debenture (i) shall
provide for a Conversion Price at all times that is equal to the lower of
the Variable Conversion Price (assuming for this purpose that such Variable
Conversion Price shall be deemed to be the lower of the Variable Conversion
Price under the Debenture and the average of the closing bid prices of the
Class A Common Stock for the five (5) trading days immediately preceding
the Solvency Confirmation Request) and the Market Conversion Price, (ii)
shall be dated the Confirmation Date, (iii) shall have a principal amount
equal to the principal amount and amount of accrued and unpaid interest on
the Note as of the Confirmation Date and (iv) shall not allow for the
issuance of Cap Debentures (all such capitalized equal terms to have the
meanings ascribed to them in the Debenture). Holder shall also have the
right to exchange this Note for a new Debenture at any time following the
occurrence of an Event of Default as described in Section 4(a) hereof.
6. General. Interests in this Note are transferrable only by written
notice to Debtor, and this Note shall be duly endorsed as to such interest
or accompanied by a written instrument or transfer executed by the
registered Holder. Payment of principal or interest on this Note shall be
made only to or upon order of the registered Holders. Upon transfer of any
interest in this Note as provided above, Debtor shall issue a new Schedule
A to this Note, registered in the name of the then current Holders and
transferee (subject to compliance with any applicable federal or state
securities laws, rules or regulations).
7. Debtor hereby:
(1) waives diligence, presentment, demand for payment,
notice of dishonor, notice of non-payment, protest, notice of
protest, and any and all other demand in connection with the
delivery, acceptance, performance, default or enforcement of this
Note;
(2) waives the benefit of any statute of limitations to the
maximum extent permitted by law with respect to any action to
enforce or otherwise related to this Note;
(3) agrees that Holder shall have the right, without notice,
to grant any extension of time for payment of any indebtedness
evidenced by this Note or any other indulgence or forbearance
whatsoever;
(4) agrees that no failure on the part of Holder to exercise
any power, right or privilege hereunder, or to insist upon prompt
compliance with the terms of this Note shall constitute a waiver
of that power, right or privilege; and
(5) agrees that the acceptance at any time by Holder of any
past due amounts shall not be deemed to be a waiver of the
requirement to make prompt payment when due of any other amounts
then or hereafter due and payable hereunder.
8. Upon delivery of an affidavit in a form reasonably satisfactory to
Debtor from the Holder or its agent as to the loss, theft, destruction or
mutilation of this Note, and upon receipt of indemnity reasonably
satisfactory to Debtor from Holder, or in the case of mutilation hereof,
upon surrender of the mutilated Note, Debtor will make and deliver a new
Note of like tenor in lieu of this Note and containing the same legend as
herein.
9. This Note shall be governed in all respects by the laws of the
State of Illinois. Debtor covenants, and by the acceptance of this Note,
Holder also covenants, that each irrevocably (a) waives, to the fullest
extent permitted by law, any and all right to trial by jury in any legal
proceeding arising out of this Note or any of the transactions contemplated
hereby, (b) submits to the personal jurisdiction of the state courts
located in Chicago, Illinois or, if the United States District Courts would
otherwise have jurisdiction, the United States District Court located in
Chicago, Illinois, and (c) waives any and all personal rights under the law
of any jurisdiction to object on any basis (including, without limitation,
inconvenience of forum) to jurisdiction or venue within the State of
Illinois.
10. In the event that Debtor defaults in payment of any Obligation due
hereunder, Debtor shall pay all Holders' out-of-pocket collection costs,
including without limitation reasonable attorneys' fees and legal costs,
whether or not any suit or enforcement proceeding is commenced.
11. This Subordinate Note is secured by a lien on certain assets of
Debtor granted pursuant to that certain Security Agreement dated as of
April 14, 1999
WESTELL TECHNOLOGIES, INC.
By:
----------------------------
Name:
Title:
SCHEDULE A TO SUBORDINATE NOTE
DATED __________, ___ IN THE AGGREGATE
PRINCIPAL AMOUNT OF $
PERCENTAGE INTEREST
IN AGGREGATE PRINCIPAL
PRINCIPAL AMOUNT OF
NOTEHOLDERS AMOUNT OF NOTE SUBORDINATE NOTES ADDRESS FOR PAYMENT
[NAME OF HOLDER]
[NAME OF HOLDER]
[NAME OF HOLDER]
TOTAL $___________ 100%
