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AMENDMENT NUMBER 3 TO
REGISTRATION RIGHTS AGREEMENT
THIS AMENDMENT NUMBER 3 (the "Amendment") to the Registration Rights
Agreement dated as of December 30, 1994, as amended by Amendment Number 1 dated
February 21, 1996 and Amendment Number 2 dated June 10, 1996 (the "Rights
Agreement"), is made as of August 6, 1997, by and among Aureal Semiconductor
Inc., a Delaware corporation (the "Company"), the purchasers of Units set forth
on Exhibit A to the Unit Purchase Agreement dated August 6, 1997 (the "Purchase
Agreement"), by and among the Company and such purchasers (the "Purchasers"),
and the Prior Holders (as defined below). Unless specifically designated
otherwise, the capitalized terms herein shall have the same meanings given them
in the Rights Agreement.
RECITALS
A. The Company and TCW are parties to the Rights Agreement pursuant to
which the Company granted certain registration rights for the benefit of TCW.
B. The Company, TCW, Appaloosa, Copernicus, and Galileo (collectively,
the "No. 1 Prior Holders") amended the Rights Agreement pursuant to Amendment
Number 1 to Registration Rights Agreement dated February 21, 1996 to grant equal
registration rights to all the No. 1 Prior Holders and to make each of the No. 1
Prior Holders a party to the Rights Agreement.
C. The Company, the No. 1 Prior Holders and the purchasers set forth on
Exhibit A to the Common Stock Purchase Agreement dated June 10, 1996, amended
the Rights Agreement pursuant to Amendment Number 2 to Registration Rights
Agreement dated June 10, 1996 (such purchasers and the No. 1 Prior Holders are
collectively referred to herein as the "No. 2 Prior Holders") to grant equal
registration rights to the No. 2 Prior Holders and to make each of the No. 2
Prior Holders a party to the Rights Agreement.
D. The No. 1 Prior Holders and the No. 2 Prior Holders are collectively
referred to herein as the Prior Holders and are set forth on Schedule 1 hereto.
E. The Company and the Prior Holders now wish to amend the Rights
Agreement, as amended, in order to grant equal registration rights to the
Purchasers and to make each of the Purchasers a party to the Rights Agreement,
as amended.
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AGREEMENT
NOW THEREFORE, in consideration of the mutual promises, covenants and
conditions hereinafter set forth, the parties hereto agree to amend certain
provisions of the Rights Agreement as set forth below:
1. Section 1 of the Rights Agreement shall be amended to define
the following terms as follows:
Registrable Shares shall mean (i) all shares of New Common Stock
originally issued to or purchased in the future by TCW, (ii) all shares of
Common Stock issued to the Prior Holders pursuant to the Common Stock Purchase
Agreements dated February 21, 1996, and June 10, 1996, by and among the Company
and such Prior Holders, (iii) all shares of Common Stock issued pursuant to the
Purchase Agreement to the Purchasers, (iv) all Warrant Shares issued upon
exercise of the Warrants (as defined in the Purchase Agreement) and (v) shares
of Common Stock issuable upon exercise of warrants issued pursuant to the Second
Amended and Restated Loan Agreement dated August 6, 1997 (the "Loan Agreement")
between the Company and TCW (including 470,455 shares of Common Stock issuable
upon exercise of warrants issued to B III Capital Partners as a participant
under the Loan Agreement). As to any particular Registrable Shares, such shares
shall cease to be Registrable Shares when (A) such shares shall have been
transferred, new certificates for such shares not bearing a legend restricting
further transfer shall have been delivered by the Company and subsequent
disposition of such shares shall not require registration or qualification under
the Securities Act or any similar state law then in force, or (B) such shares
shall have ceased to be outstanding.
2. Section 4(a) of the Rights Agreement, as amended, shall be
amended and restated in its entirety to provide as follows:
(a) The Company has registered the Registrable Shares,
other than those described in Sections 1(iii), (iv) and (v) and certain of those
described in Section 1(i) herein (collectively, the "Unregistered Registrable
Shares"), on Form S-3 (No. 333-3870) (the "Initial Shelf Registration"). The
Company will use its best efforts to include the Unregistered Registrable Shares
in the Initial Shelf Registration. If not included in the Initial Shelf
Registration within ninety (90) days after the Closing under the Purchase
Agreement, the Company will file a Subsequent Shelf Registration within ninety
(90) days after the Closing under the Purchase Agreement and will use its best
efforts to have such Subsequent Shelf Registration declared effective by the
SEC. The Company shall not permit any securities other than the Registrable
Shares to be included in the Initial Shelf Registration or any Subsequent Shelf
Registration. The Company shall use its best efforts to keep the Initial Shelf
Registration continuously effective under the Securities Act until (i) all
Registrable Shares covered by the Initial Shelf Registration have been sold in
the manner
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set forth and as contemplated in the Initial Shelf Registration or (ii) a
Subsequent Shelf Registration covering all of the Registrable Shares has been
declared effective under the Securities Act and the Registrable Shares covered
thereby have been sold in the manner set forth and as contemplated in such
Subsequent Shelf Registration (the "Effectiveness Period").
3. Except as amended hereby, the Rights Agreement dated November
30, 1994, as amended on February 21, 1996, and on June 10, 1996, remains in full
force and effect.
4. By their signatures hereto, each of the Purchasers becomes a
party to the Rights Agreement.
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IN WITNESS WHEREOF, the parties have executed this Amendment Number 3 as
of the day and year first above written.
THE COMPANY:
AUREAL SEMICONDUCTOR INC.
By:
Name:
Title:
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COUNTERPART SIGNATURE PAGE TO
AMENDMENT NUMBER 3 TO
REGISTRATION RIGHTS AGREEMENT
PRIOR HOLDERS:
By:
Name:
Title:
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COUNTERPART SIGNATURE PAGE TO
AMENDMENT NUMBER 3 TO
REGISTRATION RIGHTS AGREEMENT
PURCHASERS:
By:
Name:
Title:
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SCHEDULE I
Prior Holders:
TCW Entities
TCW Special Credits Trust
TCW Special Credits Fund IIIb
TCW Special Credits Trust IIIb
The Board of Trustees of the Delaware State Employees Retirement
Fund
Appaloosa Accounts
Appaloosa Investment X.X.
Xxxxxxxx Investors III Inc.
Palomino Fund Ltd.
Pinto Investment LLC
Cerberus Partners, L.P.
Cerberus International
Ultra Cerberus
The Copernicus Fund, L.P.
The Galileo Fund, L.P.
IT Technologies Investment
Pequod Investments, L.P.
Senaca Capital
Oaktree Capital Management, LLC, as investment manager of Weyerhaeuser
Company Master Pension Trust, separate account
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Xxxxx X. Xxxxxxxxx
Xxxxxx X. Xxxxxxxxx
