EXECUTION COPY
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement"), is made as of
April 15, 1999, by and among Westell Technologies, Inc., a Delaware
corporation (the "Company"), with headquarters located at 750 N. Commons
Drive, Aurora, Illinois 60504, and the undersigned (the "Initial
Purchasers").
RECITALS
A. In connection with the Securities Purchase Agreement dated of even
date herewith by and between the Company and the Initial Purchasers (the
"Securities Purchase Agreement"), the Company has agreed, upon the terms
and subject to the conditions contained therein, to issue and sell to the
Initial Purchasers (i) an amount of the Company s 6% Subordinated
Convertible Debentures (the "Debentures") in the form of Exhibit A which
are convertible into shares of the Company's Class A Common Stock, par
value $0.01 per share (the "Class A Common Stock" and, when taken together
with all other classes and series of the Company's common stock, the
"Common Stock"), (ii) warrants in the form of Exhibit B (each a "Warrant"
and, when taken together with all of the warrants issued hereunder, the
"Warrants")entitling the holder thereof to purchase the number of shares
(the "Warrant Shares") of Class A Common Stock as set forth below. The
Debentures, the PIK Debentures (as defined in the Debenture) and the Cap
Debentures (as defined in the Debenture) are collectively referred to
herein as the "Convertible Securities". The shares of Class A Common Stock
issuable upon conversion of or otherwise pursuant to the Convertible
Securities are referred to herein as the "Conversion Shares." The
Convertible Securities, the Warrants, the Conversion Shares and the Warrant
Shares are collectively referred to herein as the "Securities".
B. To induce the Initial Purchasers to execute and deliver the
Securities Purchase Agreement, the Company has agreed to provide certain
registration rights under the Securities Act of 1933, as amended, and the
rules and regulations thereunder, or any similar successor statute
(collectively, the "Securities Act"), and applicable state securities laws.
AGREEMENTS
NOW THEREFORE, in consideration of the premises and the mutual
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company, and
the Initial Purchasers hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1 Definitions. As used in this Agreement, the following terms shall
have the following meanings:
(a) "Purchasers" means the Initial Purchasers and any
transferees or assignees who agree to become bound by the provisions of
this Agreement in accordance with Article IX hereof.
(b) "register," "registered," and "registration" refer to a
registration effected by preparing and filing a Registration Statement or
Statements in compliance with the Securities Act and pursuant to Rule 415
under the Securities Act or any successor rule providing for offering
securities on a continuous basis ("Rule 415"), and the declaration or
ordering of effectiveness of such Registration Statement by the United
States Securities and Exchange Commission (the "SEC").
(c) "Registrable Securities" means the Conversion Shares
(including any Conversion Shares issuable with respect to payments under
the Debentures) issued or issuable with respect to the Convertible
Securities and the Warrant Shares issued or issuable with respect to the
Warrants (without regard to any limitations on conversion or exercise) and
any shares of capital stock issued or issuable, from time to time (with any
adjustments), on or in exchange for or otherwise with respect to the Class
A Common Stock or any other Registrable Securities.
(d) "Registration Statement" means a registration statement
of the Company under the Securities Act pursuant to the provisions of this
Agreement.
1.2 Capitalized Terms. Capitalized terms used herein and not otherwise
defined herein shall have the respective meanings set forth in the
Securities Purchase Agreement.
ARTICLE II
REGISTRATION
2.1 Mandatory Registration. (a) The Company shall prepare and file as
soon as practicable but in any event on or prior to twenty (20) business
days after the date of the Closing (a "Filing Date") with the SEC a
Registration Statement on Form S-3 (or, if Form S-3 is not then available,
on such form of Registration Statement as is then available to effect a
registration of all of the Registrable Securities, subject to the consent
of the Initial Purchasers (as determined pursuant to Section 11.10 hereof))
but initially covering the resale of only 8,500,000 (subject to equitable
adjustment for any stock splits, stock dividends, reclassification or
similar events) shares of Class A Common Stock, including for purposes of
this subsection (a) any PIK Debentures. The Registration Statement (and
each amendment or supplement thereto, and each request for acceleration of
effectiveness thereof) shall be provided to (and subject to the approval of
(which approval shall not be unreasonably withheld or denied)) each Initial
Purchaser and its counsel at least five (5) business days (or fewer to the
extent provided herein) prior to its filing or other submission. The
Company shall also prepare and file such amendments to registration
statements and such additional registration statements as may from time to
time be required by this Agreement.
2.2 Underwritten Offering. [Intentionally Deleted].
2.3 Payments by the Company. The Company shall use its best efforts to
cause each Registration Statement required to be filed pursuant to Section
2.1 hereof to become effective as soon as practicable, but in no event
later than the ninetieth (90th) day following the earlier of (a) the date
that such Registration Statement was filed and (b) the applicable Filing
Date (the "Registration Deadline"). If (i) a Registration Statement
covering the Registrable Securities required to be filed by the Company
pursuant to Section 2.1 hereof is not declared effective by the SEC on or
before the applicable Registration Deadline (a "Registration Failure"), or
(ii) except pursuant to a Permitted Blackout (as defined below) herein,
after such Registration Statement has been declared effective by the SEC,
sales of all the Registrable Securities covered thereby cannot be made
pursuant to such Registration Statement (by reason of a stop order or the
Company's failure to update the registration statement or any other reason
outside the control of the Purchasers) (a "Registration Suspension"), then
the Company will make payments to the Purchasers in such amounts and at
such times as shall be determined pursuant to this Section 2.3 as partial
relief for the damages to the Purchasers by reason of any such delay in or
reduction of their ability to sell the Registrable Securities (which remedy
shall not be exclusive of any other remedies available at law or in
equity). In the event of a Registration Failure, the Company shall pay to
the Purchasers an amount equal to (A) the Multiplier (as defined below)
times (B) the Funded Amount (as defined below) times (C) the number of
months (prorated per day for
partial months) following the applicable Registration Deadline prior to the
date the applicable Registration Statement filed pursuant to Section 2.1 is
declared effective by the SEC. In addition, in the event of a Registration
Suspension, the Company shall pay to the Purchasers an amount equal to (D)
the Multiplier times (E) the Funded Amount times (F) the number of months
(prorated per day for partial months) from (x) the date on which sales of
all the Registrable Securities first cannot be made to (y) the date on
which sales of all such Registrable Securities can again be made. With
respect to any given Registration Statement, the Funded Amount means the
aggregate purchase price of the Convertible Securities and Warrants
relating to the Common Stock registered (or to be registered) on such
Registration Statement. Amounts to be paid pursuant to this Section 2.3
shall be paid pro rata to Purchasers based upon the number of Conversion
Shares and Warrant Shares owned by them (including, for these purposes,
Conversion Shares issuable upon full conversion of the Convertible
Securities and Warrant Shares issuable upon full exercise of the Warrants
by each Purchaser, in each case without regard to any limitations upon
exercise and conversion contained therein) and shall be paid in cash. Such
payments shall be made within five (5) days after the end of each period
that gives rise to such obligation, provided that, if any such period
extends for more than thirty (30) days, payments shall be made for each
such thirty (30) day period within five (5) days after the end of such
thirty (30) day period. For purposes of this Section 2.3, the "Multiplier"
is equal to (a) for the first month of a Registration Failure or a
Registration Suspension, 0.01; (b) for the second month of a Registration
Failure or a Registration Suspension, 0.015; (c) for the third and all
successive months of a Registration Failure or a Registration Suspension,
0.02. Notwithstanding the foregoing, a Registration Suspension effected by
the Company pursuant to a Permitted Blackout shall not give rise to an
obligation to make such payments. For purposes hereof, "Permitted Blackout"
shall mean the suspension of the Registration Statement after the Effective
Date upon the good faith determination by the Company's Board of Directors
that a material financing, acquisition or other extraordinary corporate
transaction is in the best interest of the Company and the holders of its
outstanding Common Stock, and that disclosure thereof to the public would
have a material adverse effect on the ability of the Company to consummate
such material financing, acquisition or other extraordinary corporate
transaction, all after receiving advice to such effect from a nationally
recognized investment banking firm or, to the extent appropriate, the
Company's counsel which has been engaged by the Company in connection with
such financing, acquisition or other extraordinary corporate transaction;
provided, however, that (i) no more than two (2) such Permitted Blackouts
may be imposed during any period of twelve (12) consecutive months and (ii)
the aggregate duration of all Permitted Blackouts during any period of
twelve (12) consecutive months shall be no more than twenty (20) business
days.
2.4 Piggy-Back Registrations. If at any time prior to the expiration
of the Registration Period (as hereinafter defined) the Company shall file
with the SEC a Registration Statement relating to an offering for its own
account or the account of others under the Securities Act of any of its
equity securities (other than on Form S-4 or Form S-8 or their then
equivalents relating to equity securities to be issued solely in connection
with any acquisition of any entity or business or equity securities
issuable in connection with stock option or other employee benefit plans),
then the Company shall send to each Purchaser who has a right to have
Registrable Securities covered by a Registration Statement pursuant to this
Agreement written notice of such determination and, if within fifteen (15)
days after the date of such notice, such Purchaser shall so request in
writing, the Company shall include in such Registration Statement all or
any part of the Registrable Securities such Purchaser requests to be
registered, except that if, in connection with any underwritten public
offering for the account of the Company the managing underwriter(s) thereof
shall impose a limitation on the number of shares of Common Stock which may
be included in the Registration Statement
because, in such underwriter(s)' judgment, marketing or other factors
dictate such limitation is necessary to facilitate public distribution,
then the Company shall be obligated to include in such Registration
Statement only such limited portion of the Registrable Securities with
respect to which such Purchaser has requested inclusion hereunder as the
underwriter shall permit. Any exclusion of Registrable Securities shall be
made pro rata among the Purchasers seeking to include Registrable
Securities, in proportion to the number of Registrable Securities sought to
be included by such Purchasers; provided, however, that the Company shall
not exclude any Registrable Securities unless the Company has first
excluded all outstanding securities, the holders of which are not entitled
to inclusion of such securities in such Registration Statement or are not
entitled to pro rata inclusion with the Registrable Securities; and
provided, further, however, that, after giving effect to the immediately
preceding proviso, any exclusion of Registrable Securities shall be made
pro rata with holders of other securities having the right to include such
securities in the Registration Statement. No right to registration of
Registrable Securities under this Section 2.4 shall be construed to limit
any registration required under Section 2.1 or 3.2 hereof. If an offering
in connection with which a Purchaser is entitled to registration under this
Section 2.4 is an underwritten offering, then each Purchaser whose
Registrable Securities are included in such Registration Statement shall,
unless otherwise agreed by the Company, offer and sell such Registrable
Securities in an underwritten offering using the same underwriter or
underwriters and, subject to the provisions of this Agreement, on the same
terms and conditions as other shares of Common Stock included in such
underwritten offering.
2.5 Eligibility for Form S-3. The Company represents and warrants that
it meets the requirements for the use of Form S-3 for registration of the
re-sale by the Initial Purchasers and any other Purchaser of the
Registrable Securities. The Company shall file all reports required to be
filed by the Company with the SEC in a timely manner and take all other
actions which may be required so as to maintain such eligibility for the
use of Form S-3.
ARTICLE III
OBLIGATIONS OF THE COMPANY
In connection with the registration of the Registrable Securities, the
Company shall have the following obligations, including with respect to
each Registration Statement required to be filed hereunder:
3.1 The Company shall prepare promptly and file with the SEC the
Registration Statement required by Section 2.1, and cause such Registration
Statement relating to Registrable Securities to become effective as soon as
practicable after such filing, and keep the Registration Statement
effective pursuant to Rule 415 and available for use at all times until
such date as is the earlier of (i) the date on which all of the Registrable
Securities have been sold (and no further Registrable Securities may be
issued in the future) and (ii) the date on which all of the Registrable
Securities (in the reasonable opinion of counsel to the Initial Purchasers)
may be immediately sold to the public without registration and without
restriction as to the number of Registrable Securities to be sold, whether
pursuant to Rule 144 or otherwise (the "Registration Period"). The
Registration Statement (including any amendments or supplements thereto and
prospectuses contained therein and all documents incorporated by reference
therein) shall not contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein, or necessary to
make the statements therein not misleading.
3.2 The Company shall prepare and file with the SEC such amendments
(including post-effective amendments) and supplements to a Registration
Statement and the prospectus used in connection with the Registration
Statement as may be necessary to keep the Registration Statement effective
and available for use at all times during the Registration Period, and,
during such period, comply with the provisions of the Securities Act with
respect to the disposition of all Registrable Securities of the Company
covered by the Registration Statement until the termination of the
Registration Period or, if earlier, such time as all of such Registrable
Securities have been disposed of in accordance with the intended methods of
disposition by the seller or sellers thereof as set forth in the
Registration Statement. In the event the number of shares available under a
Registration Statement filed pursuant to this Agreement is, at any time,
insufficient to cover one hundred seventy-five percent (175%) of the
Registrable Securities issued or issuable upon conversion of the
Convertible Securities or upon exercise of the Warrants (without giving
effect to any limitations on conversion or exercise) held by any Purchaser
and required to be covered by such Registration Statement pursuant to
Section 2.1, the Company shall amend, if permissible, the Registration
Statement, or file a new Registration Statement (on the short form
available therefor, if applicable), or both, so as to cover two hundred
percent (200%) of the Registrable Securities issued or issuable to such
Purchaser upon such exercise or conversion (without giving effect to any
limitations on conversion or exercise), in each case, as soon as
practicable, but in any event within five (5) days. The Company shall cause
such amendment and/or new Registration Statement to become effective as
soon as practicable following the filing thereof.
3.3 The Company shall furnish to each Purchaser whose Registrable
Securities are included in the Registration Statement and its legal counsel
(a) promptly after the same is prepared and publicly distributed, filed
with the SEC, or received by the Company, one copy of the Registration
Statement and any amendment thereto, each preliminary prospectus and
prospectus and each amendment or supplement thereto, and, in the case of
the Registration Statement referred to in Section 2.1, each letter written
by or on behalf of the Company to the SEC or the staff of the SEC, and each
item of correspondence from the SEC or the staff of the SEC, in each case
relating to such Registration Statement (other than any portion, if any,
thereof which contains information for which the Company has sought
confidential treatment), and (b) such number of copies of a prospectus,
including a preliminary prospectus, and all amendments and supplements
thereto and such other documents as such Purchaser may reasonably request
in order to facilitate the disposition of the Registrable Securities owned
(or to be owned) by such Purchaser.
3.4 The Company shall (a) register and qualify the Registrable
Securities covered by the Registration Statement under securities laws of
such jurisdictions in the United States as each Purchaser who holds (or has
the right to hold) Registrable Securities being offered reasonably
requests, (b) prepare and file in those jurisdictions such amendments
(including post-effective amendments) and supplements to such registrations
and qualifications as may be necessary to maintain the effectiveness
thereof and availability for use during the Registration Period, (c) take
such other actions as may be necessary to maintain such registrations and
qualifications in effect at all times during the Registration Period, and
(d) take all other actions reasonably necessary or advisable to qualify the
Registrable Securities for sale in such jurisdictions; provided, however,
that the Company shall not be required in connection therewith or as a
condition thereto to (i) qualify to do business in any jurisdiction where
it would not otherwise be required to qualify but for this Section 3.4,
(ii) subject itself to general taxation in any such jurisdiction, (iii)
file a general consent to service of process in any such jurisdiction, (iv)
provide any undertakings that cause the Company material expense or burden,
or (v) make any change in its charter or by-laws, which in each case the
board of directors of the Company determines to be contrary to the best
interests of the Company and its stockholders.
3.5 [Intentionally Deleted].
3.6 As soon as practicable after becoming aware of such event, the
Company shall notify (by telephone and also by facsimile and reputable
overnight courier) each Purchaser of the happening of any event, of which
the Company has knowledge, as a result of which the prospectus included in
the Registration Statement, as then in effect, includes an untrue statement
of a material fact or omission to state a material fact required to be
stated therein or necessary to make the statements therein not misleading,
and use its best efforts as soon as possible (but in any event within five
(5) days) to prepare a supplement or amendment to the Registration
Statement (and make all required filings with the SEC) to correct such
untrue statement or omission, and the Company shall simultaneously (and
thereafter as requested) deliver such number of copies of such supplement
or amendment (or other applicable document) to each Purchaser as such
Purchaser may request in writing.
3.7 The Company shall use its best efforts to prevent the issuance of
any stop order or other suspension of effectiveness of a Registration
Statement, and, if such an order is issued, to obtain the withdrawal of
such order at the earliest practicable time and the Company shall
immediately notify by facsimile each Purchaser (at the facsimile number for
such Purchaser set forth on the signature page hereto) who holds
Registrable Securities being sold (or, in the event of an underwritten
offering, the managing underwriters) of the issuance of such order and the
resolution thereof.
3.8 The Company shall permit a counsel designated by each Initial
Purchaser to review the Registration Statement and all amendments and
supplements thereto a reasonable period of time prior to their filing with
the SEC, and not file any document in a form to which such counsel
reasonably objects.
3.9 The Company shall make generally available to its security holders
as soon as practical, but not later than ninety (90) days after the close
of the period covered thereby, an earnings statement (in form complying
with the provisions of Rule 158 under the Securities Act) covering a
twelve-month period beginning not later than the first day of the Company's
fiscal quarter next following the effective date of the Registration
Statement.
3.10 [Intentionally Deleted].
3.11 The Company shall make available for inspection by (i) any
Purchaser and (ii) attorneys and accountants retained by any Purchaser
(collectively, the "Inspectors") all pertinent financial and other records,
and pertinent corporate documents and properties of the Company
(collectively, the "Records"), as shall be reasonably deemed necessary by
each Inspector and cause the Company's officers, directors and employees to
supply all information which any Inspector may reasonably request;
provided, however, that each Inspector shall hold in confidence and shall
not make any disclosure (except to a Purchaser) of any Record or other
information which the Company determines in good faith to be confidential,
and of which determination the Inspectors are so notified in writing,
unless (a) the disclosure of such Records is necessary to avoid or correct
a misstatement or omission in any Registration Statement or is otherwise
required to be disclosed in such Registration Statement to permit Purchaser
to sell under such Registration Statement, (b) the release of such Records
is ordered pursuant to a subpoena or other order from a court or government
body of competent jurisdiction, or is otherwise required by applicable law
or legal process or (c) the information in such Records has been made
generally available to the public other than by disclosure in violation of
this or any other agreement (to the knowledge of the relevant Purchaser).
The Company shall not be required to disclose any confidential information
in such Records to any Inspector until and unless such Inspector shall have
entered into confidentiality agreements (in form and reasonable substance
satisfactory to the Company) with the Company with respect thereto,
substantially in the form of this Section 3.11.
Each Purchaser agrees that it shall, upon learning that disclosure of such
Records is sought in or by a court or governmental body of competent
jurisdiction or through other means, give prompt notice to the Company and
allow the Company, at its expense, to undertake appropriate action to
prevent disclosure of, or to obtain a protective order for, the Records
deemed confidential. Nothing herein shall be deemed to limit a Purchaser's
ability to sell Registrable Securities in a manner which is consistent with
applicable laws and regulations.
3.12 The Company shall hold in confidence and not make any disclosure
of information concerning a Purchaser provided to the Company unless (a)
disclosure of such information is necessary to comply with federal or state
securities laws, (b) the disclosure of such information is necessary to
avoid or correct a misstatement or omission in any Registration Statement,
(c) the release of such information is ordered pursuant to a subpoena or
other order from a court or governmental body of competent jurisdiction or
is otherwise required by applicable law or legal process, (d) such
information has been made generally available to the public other than by
disclosure in violation of this or any other agreement (to the knowledge of
the Company), or (e) such Purchaser consents to the form and content of any
such disclosure. The Company agrees that it shall, upon learning that
disclosure of such information concerning a Purchaser is sought in or by a
court or governmental body of competent jurisdiction or through other
means, give prompt notice to such Purchaser prior to making such
disclosure, and allow the Purchaser, at its expense, to undertake
appropriate action to prevent disclosure of, or to obtain a protective
order for, such information.
3.13 From and after each Closing, the Company shall cause the listing
and the continuation of listing of all the Registrable Securities related
to such Closing and required to be covered by a Registration Statement on
The Nasdaq National Market or the New York Stock Exchange, and cause the
Registrable Securities to be quoted or listed on each additional national
securities exchange or quotation system upon which the Class A Common Stock
is then listed or quoted.
3.14 The Company shall provide a transfer agent and registrar, which
may be a single entity, for the Registrable Securities not later than the
effective date of the Registration Statement.
3.15 The Company shall cooperate with the Purchasers who hold
Registrable Securities being offered and the managing underwriter or
underwriters, if any, to facilitate the timely preparation and delivery of
certificates (not bearing any restrictive legends) representing Registrable
Securities to be offered pursuant to the Registration Statement and enable
such certificates to be in such denominations or amounts, as the case may
be, as the managing underwriter or underwriters, if any, or the Purchasers
may reasonably request and registered in such names as the managing
underwriter or underwriters, if any, or the Purchasers may request, and,
within two (2) business day after a Registration Statement which includes
Registrable Securities is ordered effective by the SEC, the Company shall
cause legal counsel selected by the Company to deliver, to the transfer
agent for the Registrable Securities (with copies to the Purchasers whose
Registrable Securities are included in such Registration Statement) an
opinion of such counsel in the form attached hereto as Exhibit 1.
3.16 At the request of any Purchaser, the Company shall promptly
prepare and file with the SEC such amendments (including post-effective
amendments) and supplements to a Registration Statement and the prospectus
used in connection with the Registration Statement as may be necessary in
order to change the plan of distribution set forth in such Registration
Statement.
3.17 The Company shall comply with all applicable laws related to a
Registration Statement and offering and sale of securities covered by the
Registration Statement and all applicable rules and regulations of
governmental authorities in connection therewith (including, without
limitation, the Securities Act and the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated by the Commission).
3.18 The Company shall take all such other actions as any Purchaser or
the underwriters, if any, reasonably request in order to expedite or
facilitate the disposition of such Registrable Securities.
3.19 From and after the date of this Agreement, the Company shall not,
and shall not agree to, allow the holders of any securities of the Company
(other than Purchasers with respect to Registrable Securities) to include
any of their securities in any Registration Statement or any amendment or
supplement thereto under Section 2.1 or 3.2 hereof without the consent of
the Initial Purchasers of a majority of the Registrable Securities.
3.20 The Registration Statement shall state that it covers such
indeterminate number of additional shares as may be issuable upon
conversion of the Convertible Securities or exercise of the Warrants to
prevent dilution resulting from stock splits, stock dividends and other
similar transactions.
ARTICLE IV
OBLIGATIONS OF THE PURCHASERS
In connection with the registration of the Registrable Securities,
each Purchaser shall have the following obligations:
4.1 Purchaser shall furnish to the Company such information regarding
itself, the Registrable Securities held by it and the intended method of
disposition of the Registrable Securities held by it as shall be required
to effect the registration of such Registrable Securities. At least five
(5) business days prior to the first anticipated filing date of the
Registration Statement, the Company shall notify each Purchaser of the
information the Company requires from each such Purchaser.
4.2 Each Purchaser, by such Purchaser's acceptance of the Registrable
Securities, agrees to cooperate with the Company as reasonably requested by
the Company in connection with the preparation and filing of the
Registration Statements hereunder, unless such Purchaser has notified the
Company in writing of such Purchaser's election to exclude all of such
Purchaser's Registrable Securities from the Registration Statement.
4.3 Each Purchaser whose Registrable Securities are included in a
Registration Statement understands that the Securities Act may require
delivery of a prospectus relating thereto in connection with any sale
thereof pursuant to such Registration Statement, and each such Purchaser
shall use its reasonable efforts to comply with the applicable prospectus
delivery requirements of the Securities Act in connection with any such
sale.
4.4 [Intentionally Deleted].
4.5 Each Purchaser agrees that, upon receipt of written notice from
the Company of the happening of any event of the kind described in Section
3.6, such Purchaser will immediately discontinue disposition of Registrable
Securities pursuant to the Registration Statement covering such Registrable
Securities until such Purchaser's receipt of the copies of the supplemented
or amended prospectus contemplated by Section 3.6 or advice that a
supplement or amendment is not required and, if so directed by the Company,
such Purchaser shall deliver to the Company (at the expense of the Company)
or destroy (and deliver to the Company a certificate of destruction) all
copies in such Purchaser's possession (other than a limited number of
permanent file copies), of the prospectus covering such Registrable
Securities current at the time of receipt of
such notice. Purchaser's obligations under this paragraph shall in no way
limit the Company's obligations under this Agreement or Purchaser's rights
or remedies against the Company with respect to any breach or threatened
breach by the Company of any such obligations.
4.6 [Intentionally Deleted].
ARTICLE V
EXPENSES OF REGISTRATION
All expenses, other than underwriting discounts and commissions,
incurred in connection with registrations, filings or qualifications
pursuant to Articles II and III, including, without limitation, all
registration, listing and qualification fees, printers and accounting fees,
the fees and disbursements of counsel for the Company, and the reasonable
fees and disbursements of Inspectors selected by the Purchasers pursuant to
Section 3.11, hereof shall be borne by the Company; provided, however that
the Company shall be required to bear the reasonable fees and disbursements
of such Inspectors only if reasonably requested by a Purchaser in writing
(taking into account any applicable legal precedent and any SEC staff
positions) and consented to by the Company after consultation with its
counsel (which consent will not be unreasonably withheld based upon all
relevant facts and circumstances and taking into account the advice of such
counsel).
ARTICLE VI
INDEMNIFICATION
In the event any Registrable Securities are included in a Registration
Statement under this Agreement:
6.1 To the extent permitted by law, the Company will indemnify, hold
harmless and defend (a) each Purchaser who holds such Registrable
Securities, (b) each underwriter of Registrable Securities and (c) the
directors, officers, partners, members, employees, agents and persons who
control any Purchaser within the meaning of Section 15 of the Securities
Act or Section 20 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), if any, (each, an "Indemnified Person"), against any
losses, claims, damages, liabilities or expenses (collectively, together
with actions, proceedings or inquiries whether or not in any court, before
any administrative body or by any regulatory or self-regulatory
organization, whether commenced or threatened, in respect thereof,
"Claims") to which any of them may become subject insofar as such Claims
arise out of or are based upon: (i) any untrue statement or alleged untrue
statement of a material fact in a Registration Statement or the omission or
alleged omission to state therein a material fact required to be stated or
necessary to make the statements therein not misleading, (ii) any untrue
statement or alleged untrue statement of a material fact contained in any
preliminary prospectus if used prior to the effective date of such
Registration Statement, or contained in the final prospectus (as amended or
supplemented, if the Company files any amendment thereof or supplement
thereto with the SEC) or the omission or alleged omission to state therein
any material fact necessary to make the statements made therein, in light
of the circumstances under which the statements therein were made, not
misleading, or (iii) any violation or alleged violation by the Company of
the Securities Act, the Exchange Act, any other law, including, without
limitation, any state securities law, or any rule or regulation thereunder
relating to the offer or sale of the Registrable Securities (the matters in
the foregoing clauses (i) through (iii) being, collectively, "Violations").
The Company shall reimburse each such Indemnified Person, promptly as such
expenses are incurred and are due and payable, for any reasonable legal
fees or other reasonable expenses incurred by them in connection with
investigating or defending any such Claim. Notwithstanding anything to the
contrary contained herein, the indemnification agreement contained in this
Section 6.1: (x) shall not apply to an Indemnified Person with respect to a
Claim arising out of or
based upon a Violation which occurs in reliance upon and in conformity with
information furnished in writing to the Company by such Indemnified Person
expressly for use in the Registration Statement or any such amendment
thereof or supplement thereto; (y) shall not apply to amounts paid in
settlement of any Claim if such settlement is effected without the prior
written consent of the Company, which consent shall not be unreasonably
withheld; and (z) with respect to any preliminary prospectus, shall not
inure to the benefit of any Indemnified Person if the untrue statement or
omission of material fact contained in the preliminary prospectus was
corrected on a timely basis in the prospectus, as then amended or
supplemented, if such corrected prospectus was timely made available by the
Company pursuant to Section 3.3 hereof, and the Indemnified Person was
promptly advised in writing not to use the incorrect prospectus prior to
the use giving rise to a Violation and such Indemnified Person,
notwithstanding such advice, used it. Such indemnity shall remain in full
force and effect regardless of any investigation made by or on behalf of
the Indemnified Person and shall survive the transfer of the Registrable
Securities by a Purchaser pursuant to Article IX.
6.2 In connection with any Registration Statement in which a Purchaser
is participating, each such Purchaser agrees to indemnify, hold harmless
and defend, to the same extent and in the same manner set forth in Section
6.1, the Company, each of its directors, each of its officers who signs the
Registration Statement, its employees, agents and persons, if any, who
control the Company within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act, and any other stockholder selling
securities pursuant to the Registration Statement, together with its
directors, officers and members, and any person who controls such
stockholder or underwriter within the meaning of the Securities Act or the
Exchange Act (such an "Indemnified Party"), against any Claim to which any
of them may become subject, under the Securities Act, the Exchange Act or
otherwise, insofar as such Claim arises out of or is based upon any
Violation, in each case to the extent (and only to the extent) that such
Violation occurs in reliance upon and in conformity with written
information furnished to the Company by such Purchaser expressly for use in
connection with such Registration Statement; and such Purchaser will
reimburse any legal or other expenses (promptly as such expenses are
incurred and are due and payable) reasonably incurred by them in connection
with investigating or defending any such Claim; provided, however, that the
indemnity agreement contained in this Section 6.2 shall not apply to
amounts paid in settlement of any Claim if such settlement is effected
without the prior written consent of such Purchaser, which consent shall
not be unreasonably withheld; provided, further, however, that a Purchaser
shall be liable under this Agreement (including this Section 6.2 and
Article VII) for only that amount as does not exceed the net proceeds
actually received by such Purchaser as a result of the sale of Registrable
Securities pursuant to such Registration Statement. Such indemnity shall
remain in full force and effect regardless of any investigation made by or
on behalf of such Indemnified Party and shall survive the transfer of the
Registrable Securities by a Purchaser pursuant to Article IX.
Notwithstanding anything to the contrary contained herein, the
indemnification agreement contained in this Section 6.2 with respect to any
preliminary prospectus shall not inure to the benefit of any Indemnified
Party if the untrue statement or omission of material fact contained in the
preliminary prospectus was corrected on a timely basis in the prospectus,
as then amended or supplemented, and the Indemnified Party failed to
utilize such corrected prospectus.
6.3 Promptly after receipt by an Indemnified Person or Indemnified
Party under this Article VI of notice of the commencement of any action
(including any governmental action), such Indemnified Person or Indemnified
Party shall, if a Claim in respect thereof is to be made against any
indemnifying party under this Article VI, deliver to the indemnifying party
a written notice of the commencement thereof, and the indemnifying party
shall have the right to participate in, and, to the extent the indemnifying
party so desires, jointly with any other
indemnifying party similarly noticed, to assume control of the defense
thereof with counsel mutually satisfactory to the indemnifying party and
the Indemnified Person or the Indemnified Party, as the case may be;
provided, however, that such indemnifying party shall diligently pursue
such defense and that such indemnifying party shall not be entitled to
assume such defense and an Indemnified Person or Indemnified Party shall
have the right to retain its own counsel with the fees and expenses to be
paid by the indemnifying party, if the representation by such counsel of
the Indemnified Person or Indemnified Party and the indemnifying party
would be inappropriate due to actual or potential conflicts of interest
between such Indemnified Person or Indemnified Party and any other party
represented by such counsel in such proceeding or the actual or potential
defendants in, or targets of, any such action include both the Indemnified
Person or the Indemnified Party and any such Indemnified Person or
Indemnified Party reasonably determines that there may be legal defenses
available to such Indemnified Person or Indemnified Party which are
different from or in addition to those available to such indemnifying
party. The indemnifying party shall pay for only one separate legal counsel
for the Indemnified Persons or the Indemnified Parties, as applicable, and
such legal counsel shall be selected by Purchasers holding a
majority-in-interest of the Registrable Securities included in the
Registration Statement to which the Claim relates (with the approval of the
Initial Purchasers if they hold Registrable Securities included in such
Registration Statement), if the Purchasers are entitled to indemnification
hereunder, or by the Company, if the Company is entitled to indemnification
hereunder, as applicable. The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any such
action shall not relieve such indemnifying party of any liability to the
Indemnified Person or Indemnified Party under this Article VI, except to
the extent that the indemnifying party is actually prejudiced in its
ability to defend such action. The indemnification required by this Article
VI 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 VII
CONTRIBUTION
To the extent any indemnification by an indemnifying party is
prohibited or limited by law, the indemnifying party agrees to make the
maximum contribution with respect to any amounts for which it would
otherwise be liable under Article VI to the fullest extent permitted by
law; provided, however, that (i) no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities
Act) shall be entitled to contribution from any person of Registrable
Securities who was not guilty of such fraudulent misrepresentation, and
(ii) contribution (together with any indemnification or other obligations
under this Agreement) by any seller of Registrable Securities shall be
limited in amount to the net amount of proceeds received by such seller
from the sale of such Registrable Securities.
ARTICLE VIII
REPORTS UNDER THE EXCHANGE ACT
With a view to making available to the Purchasers the benefits of Rule
144 promulgated under the Securities Act or any other similar rule or
regulation of the SEC that may at any time permit the Purchasers to sell
securities of the Company to the public without registration ("Rule 144"),
the Company agrees to:
8.1 File with the SEC in a timely manner and make and keep available
all reports and other documents required of the Company under the
Securities Act and the Exchange Act so long as the Company remains subject
to such requirements (it being understood that nothing herein shall limit
the Company's obligations under Section 4.3 of the Securities Purchase
Agreement) and the filing and availability of such reports and other
documents is required for the applicable provisions of Rule 144; and
8.2 Furnish to each Purchaser so long as such Purchaser holds
Convertible Securities, Warrants or Registrable Securities, promptly upon
request, (i) a written statement by the Company that it has complied with
the reporting requirements of Rule 144, the Securities Act and the Exchange
Act, (ii) a copy of the most recent annual or quarterly report of the
Company and such other reports and documents so filed by the Company, and
(iii) such other information as may be reasonably requested to permit the
Purchasers to sell such securities pursuant to Rule 144 without
registration.
ARTICLE IX
ASSIGNMENT OF REGISTRATION RIGHTS
The rights of the Purchasers hereunder, including the right to have
the Company register Registrable Securities pursuant to this Agreement,
shall be automatically assigned by each Purchaser to any transferee of all
or any portion of the Convertible Securities or the Registrable Securities
if: (a) the Purchaser agrees in writing with the transferee or assignee to
assign such rights, and a copy of such agreement is furnished to the
Company within a reasonable time after such assignment, (b) the Company is,
within a reasonable time after such transfer or assignment, furnished with
written notice of (i) the name and address of such transferee or assignee,
and (ii) the securities with respect to which such registration rights are
being transferred or assigned, (c) following such transfer or assignment,
the further disposition of such securities by the transferee or assignee is
restricted under the Securities Act or applicable state securities laws,
and (d) at or before the time the Company receives the written notice
contemplated by clause (ii) of this sentence, the transferee or assignee
agrees in writing for the benefit of the Company to be bound by all of the
provisions contained herein. The rights of a Purchaser hereunder with
respect to any Registrable Securities not transferred (and not represented
by Convertible Securities or Warrants transferred) shall not be assigned by
virtue of the transfer of other Registrable Securities or transferred
Convertible Securities or Warrants representing other Registrable
Securities.
ARTICLE X
AMENDMENT OF REGISTRATION RIGHTS
Provisions of this Agreement may be amended and the observance thereof
may be waived (either generally or in a particular instance and either
retroactively or prospectively), only with written consent of the Company,
the Initial Purchasers (but not an Initial Purchaser who no longer owns any
Convertible Securities or Registrable Securities and who is not affected by
such amendment or waiver) and Purchasers who hold a majority interest of
the Registrable Securities. Any amendment or waiver effected in accordance
with this Article X shall be binding upon each Purchaser and the Company.
Notwithstanding the foregoing, no amendment or waiver shall retroactively
affect any Purchaser without its comment or prospectively adversely affect
any Purchaser who no longer owns any Convertible Securities, Warrants or
Registrable Securities without its consent. No amendment or waiver may
adversely affect one or more Purchasers or group of Purchasers vis-a-vis
any other Purchaser or group of Purchasers. Neither Article VI nor Article
VII hereof may be amended or waived in a manner adverse to a Purchaser
without its consent. Notwithstanding anything to the contrary contained in
this Article X, no amendment or waiver shall be applicable to an Initial
Purchaser who does not consent in writing thereto.
ARTICLE XI
MISCELLANEOUS
11.1 A person or entity is deemed to be a holder (or a holder in
interest) of Registrable Securities whenever such person or entity owns of
record such Registrable Securities (or the Convertible Securities or
Warrants which may be converted into or exercised for Registrable
Securities). If the Company receives conflicting instructions, notices or
elections from two or more persons or entities with respect to the same
Registrable Securities, the Company shall act upon the basis of
instructions, notice or election received from the registered owner of such
Registrable Securities (or Convertible Securities or Warrants, as the case
may be).
11.2 Any notices herein required or permitted to be given shall be in
writing and may be personally served or delivered by courier or by
machine-generated 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.
750 N. Commons Drive
Aurora, IL 60504
Telecopy: (630) 375-4940
Attention: Stephen J. Hawrysz
with a copy to:
Neal J. White, P.C.
McDermott, Will & Emery
227 West Monroe Street
Chicago, IL 60606
Telecopy: (312) 984-3669
Attention: (312) 984-7579
if to any Purchaser, at such address as such Purchaser, shall have provided
in writing to the Company, or at such other address as each such party
furnishes by notice given in accordance with this Section 11.2.
11.3 Failure of any party to exercise any right or remedy under this
Agreement or otherwise, or delay by a party in exercising such right or
remedy, shall not operate as a waiver thereof.
11.4 This Agreement shall be governed by and construed in accordance
with the laws of the State of New York applicable to contracts made and to
be performed in the State of New York. The Company irrevocably consents to
the jurisdiction of the federal courts located in the State of New York and
the state courts of the State of New York located in the County of New York
in the State of New York in any suit or proceeding based on or arising
under this Agreement and irrevocably agrees that all claims in respect of
such suit or proceeding may be determined in such courts. The Company
irrevocably waives the defense of an inconvenient forum to the maintenance
of such suit or proceeding. The parties hereto further agree that service
of process upon the parties hereto mailed by first class mail shall be
deemed in every respect effective service of process upon each such party
in any such suit or proceeding. Nothing herein shall affect either party's
right to serve process in any other manner permitted by law. The parties
hereto agree that a final non-appealable judgment in any such suit or
proceeding shall be conclusive and may be enforced in other jurisdictions
by suit on such judgment or in any other lawful manner.
11.5 This Agreement, the Convertible Securities, Warrants and the
Securities Purchase Agreement (including all schedules and exhibits thereto
and all certificates and opinions required thereby) constitute the entire
agreement among the parties hereto with respect to the subject matter
hereof and thereof. There are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein and therein.
This Agreement, the Convertible Securities, the Warrants and the Securities
Purchase Agreement supersede all prior
agreements and understandings among the parties hereto with respect to the
subject matter hereof and thereof.
11.6 Subject to the requirements of Article IX hereof, this Agreement
shall inure to the benefit of and be binding upon the successors and
assigns of each of the parties hereto. Notwithstanding anything to the
contrary contained herein, including, without limitation, Article IX, the
rights of a Purchaser hereunder shall be assignable to and exercisable by a
bona fide pledgee of the Registrable Securities in connection with a
Purchaser s margin or brokerage accounts.
11.7 The headings in this Agreement are for convenience of reference
only and shall not limit or otherwise affect the meaning hereof.
11.8 This Agreement may be executed in two or more counterparts, each
of which shall be deemed an original but all of which shall constitute one
and the same agreement. This Agreement, once executed by a party, may be
delivered to the other party hereto, by facsimile transmission of a copy of
this Agreement bearing the signature of the party so delivering this
Agreement.
11.9 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 in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
11.10 [Intentionally Deleted].
11.11 The initial number of Registrable Securities included on any
Registration Statement shall be allocated pro rata among the Purchasers
based upon the number of Registrable Securities held by each Purchaser at
the time of establishment of such number. In the event a Purchaser shall
sell or otherwise transfer any of such holder's Registrable Securities,
each transferee shall be allocated a pro rata portion of the number of
Registrable Securities included on a Registration Statement for such
transferor. Any shares of Common Stock included on a Registration Statement
and which remain allocated to any person or entity which does not hold any
Registrable Securities shall be allocated to the remaining Purchasers, pro
rata based on the number of shares of Registrable Securities then held by
such Purchasers. Without implication that the contrary would otherwise be
true, for purposes of this paragraph, all Convertible Securities and
Warrants then outstanding shall be assumed converted into and exercised for
Registrable Securities (without giving effect to any limitations on
conversion or exercise).
11.12 If any provision of this Agreement shall be invalid or
unenforceable, such invalidity or unenforceability shall not affect the
validity or enforceability of the remainder of this Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the date first above written.
WESTELL TECHNOLOGIES, INC.
By:
Name:
Title:
Address:
Facsimile Number:
INITIAL PURCHASERS:
CASTLE CREEK TECHNOLOGY PARTNERS LLC
By: CASTLE CREEK PARTNERS LLC
Its: Investment Manager
By: ___________________________________
Name: John D. Ziegelman
Title: Managing Member
Address:
77 W. Wacker Drive, Suite 4040
Chicago, IL 60601
Facsimile Number:
(312) 499-6999
MARSHALL CAPITAL MANAGEMENT, INC.
By: ___________________________________
Name:
Title:
Address:
Facsimile Number:
CAPITAL VENTURES INTERNATIONAL
By: ___________________________________
Name:
Title:
Address:
Facsimile Number:
EXHIBIT 1
TO REGISTRATION
RIGHTS AGREEMENT
[Date]
[Name and address
of transfer agent]
RE: WESTELL TECHNOLOGIES, INC.
Ladies and Gentlemen:
We are counsel to Westell Technologies, Inc., a Delaware corporation
(the "Company"), and we understand that [Name of Purchaser] (the "Holder")
has purchased from the Company an amount of the Company s 6% Subordinated
Convertible Debentures (the "Debentures") convertible into shares of the
Company's Class A common stock, par value $0.01 per share (the "Common
Stock"). The Debentures were purchased by the Holder pursuant to a
Securities Purchase Agreement, dated as of April 14, 1999, by and among the
Company and the signatories thereto (the "Agreement"). Pursuant to a
Registration Rights Agreement, dated as of April 15, 1999, by and among the
Company and the signatories thereto (the "Registration Rights Agreement"),
the Company agreed with the Holder, among other things, to register the
Registrable Securities (as that term is defined in the Registration Rights
Agreement) under the Securities Act of 1933, as amended (the "Securities
Act"), upon the terms provided in the Registration Rights Agreement. In
connection with the Company's obligations under the Registration Rights
Agreement, on April __, 1999, the Company filed a Registration Statement on
Form S-_____ (File No. 333-
__________) (the "Registration Statement") with the Securities and Exchange
Commission (the "SEC") relating to the Registrable Securities, which names
the Holder as a selling stockholder thereunder.
[Other customary introductory and scope of examination language to be
inserted]
Based on the foregoing, we are of the opinion that the Registrable
Securities have been registered under the Securities Act.
[Other appropriate customary language to be included.]
Very truly yours,
cc: [Name of Purchaser]