EXHIBIT 99.1
Warburg, Xxxxxx Equity Partners, X.X.
Xxxxxxx, Xxxxxx Netherlands Equity Partners I, X.X.
Xxxxxxx, Xxxxxx Netherlands Equity Partners II, X.X.
Xxxxxxx, Xxxxxx Netherlands Equity Partners III, C.V.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
January 30, 2003
Avaya Inc.
000 Xxxxx Xxxx Xxxx
Xxxxxxx Xxxxx, XX. 07920
Re: EXCHANGE OFFER FOR XXXXX XXXXX
Ladies & Gentlemen:
Reference is made to the Backstop Agreement, dated as of
December 23, 2002, as amended January 13, 2003 (the "Agreement"), by and among
Avaya Inc. ("Avaya") and the Investors signatories thereto. Capitalized terms
used but not defined in this letter shall have the meanings ascribed thereto in
the Agreement.
The Investors hereby waive their right under Section 3.01(b)
of the Agreement to receive any Series D Warrants at the Subsequent Closing. In
consideration of this waiver, Avaya hereby agrees that the Investor Cash Amount
shall be $17,596,190.50. Accordingly, the Investors hereby agree to promptly
transfer such Investor Cash Amount to the Exchange Agent.
Further, in connection with the Closing of the Exchange Offer
on and as of the date hereof, the Investors and Avaya desire to confirm the
application of the provisions of the Agreement as set forth below.
1. The Market Value of a share of Common Stock is $2.7356.
2. Pursuant to Section 3.01(c)(i)(A) of the Agreement, effective
as of February 12, 2003, the Exercise Price of the Series A
Warrants shall be reduced to $0.01.
3. Notwithstanding Section 3.01(c)(i)(A), no adjustment to the
Exercise Price of the Series B Warrants shall be made.
4. As contemplated by the last sentence of Section 3.01(c)(i) of
the Agreement, no adjustment to the number of shares of Common
Stock that may be purchased upon exercise of the Series A
Warrants and the Series B Warrants shall be made.
5. Pursuant to Section 3.02 of the Agreement, at the Subsequent
Closing, the Investors shall exercise for cash a portion of
the Series A Warrants to purchase an aggregate of 5,581,101
shares of Common Stock for aggregate cash consideration of
$55,811.01.
6. Pursuant to Section 3.03 of the Agreement, at the Subsequent
Closing, the Investors shall convert all XXXXx acquired by
them into an aggregate of 1,588,548 shares of Common Stock.
7. Pursuant to Section 5.03 of the XXXXx Indenture, Avaya shall
pay to the Investors an amount equal to $2.53, in lieu of
issuing a fractional share of Common Stock upon conversion of
the XXXXx acquired by the Investors.
Please indicate your agreement by countersigning this letter where
indicated below.
[Signature pages follow]
Very truly yours,
WARBURG, XXXXXX EQUITY PARTNERS, L.P.
By: WARBURG PINCUS & CO.
Its General Partner
By: /s/ Xxxxx X. Xxxxxxx
--------------------
Name: Xxxxx X. Xxxxxxx
Title: Partner
WARBURG, XXXXXX NETHERLANDS EQUITY
PARTNERS I, C.V.
By: WARBURG PINCUS & CO.
Its General Partner
By: /s/ Xxxxx X. Xxxxxxx
--------------------
Name: Xxxxx X. Xxxxxxx
Title: Partner
WARBURG, XXXXXX NETHERLANDS EQUITY
PARTNERS II, C.V.
By: WARBURG PINCUS & CO.
Its General Partner
By: /s/ Xxxxx X. Xxxxxxx
--------------------
Name: Xxxxx X. Xxxxxxx
Title: Partner
WARBURG, XXXXXX NETHERLANDS EQUITY
PARTNERS III, C.V.
By: WARBURG, XXXXXX & CO.
Its General Partner
By /s/ Xxxxx X. Xxxxxxx
--------------------
Name: Xxxxx X. Xxxxxxx
Title: Partner
Xxxxxx and accepted as of the date hereof:
AVAYA INC.
By: /s/ Xxxxxx X. Xxxxxx
--------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President and Treasurer
