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EXHIBIT 10.31
EXHIBIT C
REGISTRATION RIGHTS AGREEMENT
March 29, 1996
To the several persons named
in Schedule I hereto
Ladies and Gentlemen:
This will confirm that with respect to the several individuals
and entities named as Purchasers in the Securities Purchase Agreement dated as
of February 21, 1996 (the "Purchase Agreement"), among Aurora Electronics,
Inc., a Delaware corporation (the "Company"), Welsh, Carson, Xxxxxxxx & Xxxxx
VII, L.P., a Delaware limited partnership ("WCAS VII"), WCAS Capital Partners
II, L.P., a Delaware limited partnership ("WCAS XX XX"), and the several
persons named therein, in consideration of (i) the purchase by WCAS VII and the
several persons named in Part A of Schedule I hereto (collectively, "the
Preferred Share Purchasers") from the Company of [ ](1) shares (the
"Preferred Shares") of Convertible Preferred Stock, $.01 par value
("Convertible Preferred Stock"), of the Company, and (ii) the purchase by WCAS
XX XX of (x) the Company's 10% Senior Subordinated Note due September 30, 2001,
in the principal amount of $10,000,000, and (y) [ ]1 shares (the "Common
Shares") of Common Stock, $.03 par value ("Common Stock"), of the Company, all
on the terms and subject to the conditions set forth in the Purchase Agreement,
and as an inducement to the Purchasers to consummate the transactions
contemplated by the Purchase Agreement, the Company hereby covenants and agrees
with each of you, and with each subsequent holder of Restricted Stock (as
defined herein) as follows:
1. Certain Definitions. As used herein, the following terms
shall have the following respective meanings:
"Commission" means the Securities and Exchange Commission, or any
other federal agency at the time administering the Securities Act.
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(1) To be determined at Closing.
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"Conversion Shares" means the shares of Common Stock issuable
upon conversion of any of the Preferred Shares.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any similar federal statute, and the rules and regulations
of the Commission thereunder, all as the same shall be in effect at the
time.
"Registration Expenses" means the expenses so described
in Section 8 hereof.
"Restricted Stock" means the shares of capital stock of the
Company, the certificates for which are required to bear the legend set
forth in Section 2 hereof.
"Securities Act" means the Securities Act of 1933, as amended, or
any similar federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
"Selling Expenses" means the expenses so described in Section 8
hereof.
2. Restrictive Legend. Each certificate representing the
Common Shares, each certificate representing the Preferred Shares, each
certificate representing the Conversion Shares and each certificate issued upon
exchange, adjustment or transfer of any of the foregoing, other than in a
public sale or as otherwise permitted by the last paragraph of Section 3
hereof, shall be stamped or otherwise imprinted with a legend substantially in
the following form:
"THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AND MAY NOT BE SOLD,
TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS THEY HAVE BEEN
REGISTERED UNDER THAT ACT OR AN EXEMPTION FROM REGISTRATION IS
AVAILABLE."
3. Notice of Proposed Transfer. Prior to any proposed
transfer of any Restricted Stock (other than under the circumstances described
in Sections 4, 5 or 6 hereof), the holder thereof shall give written notice to
the Company of its intention to effect such transfer. Each such notice shall
describe the manner of the proposed transfer and, if requested by the Company,
shall be accompanied by an opinion of counsel reasonably satisfactory to the
Company (it being agreed that Reboul, MacMurray, Xxxxxx, Xxxxxxx & Kristol is
and shall be satisfactory) to the effect that the proposed transfer of the
Restricted Stock may be effected without registration under the Securities Act,
whereupon the holder of such Restricted Stock shall be entitled to transfer
such Restricted Stock in accordance with the terms of its notice. Each
certificate for Restricted
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Stock transferred as above provided shall bear the legend set forth in Section
2, unless (i) such transfer is in accordance with the provisions of Rule 144
(or any other rule permitting public sale without registration under the
Securities Act) or (ii) the opinion of counsel referred to above is to the
further effect that the transferee and any subsequent transferee (other than an
affiliate of the Company) would be entitled to transfer such securities in a
public sale without registration under the Securities Act.
The foregoing restrictions on transferability of Restricted Stock
shall terminate as to any particular shares of Restricted Stock when such
shares shall have been effectively registered under the Securities Act and sold
or otherwise disposed of in accordance with the intended method of disposition
by the seller or sellers thereof set forth in the registration statement
concerning such shares. Whenever a holder of Restricted Stock is able to
demonstrate to the Company (and its counsel) that the provisions of Rule 144(k)
of the Securities Act are available to such holder without limitation, such
holder of Restricted Stock shall be entitled to receive from the Company,
without expense, a new certificate not bearing the restrictive legend set forth
in Section 2.
4. Required Registration.
(a) Subject to the provisions of paragraph (e) below, at any
time the holders of Restricted Stock constituting at least a majority of
the Restricted Stock outstanding at such time may request the Company to
register under the Securities Act all or any portion of the Restricted
Stock held by such requesting holder or holders for sale in the manner
specified in such notice; provided, however, that the only securities
which the Company shall be required to register pursuant hereto shall be
shares of Common Stock. For the purposes of calculating the number of
outstanding shares of Restricted Stock for purposes of this Section 4(a)
and Section 13(d), holders of Convertible Preferred Stock shall be
treated as the holders of the number of shares of Conversion Stock then
issuable upon conversion of such shares.
(b) Promptly following receipt of any notice under this
Section 4, the Company shall notify any holders of Restricted Stock from
whom notice has not been received, and shall use its best efforts to
register under the Securities Act, for public sale in accordance with
the method of disposition specified in such notice from such requesting
holders, the number of shares of Restricted Stock specified in such
notice (and in any notices received from other such holders of
Restricted Stock within 30 days after their receipt of such notice from
the Company); provided, however, that if the proposed method of
disposition specified by the
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requesting holders shall be an underwritten public offering, the number
of shares of Restricted Stock to be included in such an offering may be
reduced (pro rata among the requesting holders of Restricted Stock based
on the number of shares of Restricted Stock so requested to be
registered) if and to the extent that the managing underwriter shall be
of the opinion that such inclusion would adversely affect the marketing
of the Restricted Stock to be sold. If such method of disposition shall
be an underwritten public offering, the Company may designate the
managing underwriter of such offering, subject to the approval of the
selling holders of a majority of the Restricted Stock included in the
offering, which approval shall not be unreasonably withheld.
Notwithstanding anything to the contrary contained herein, the
obligation of the Company under this Section 4 shall be deemed satisfied
only when a registration statement covering all shares of Restricted
Stock specified in notices received as aforesaid, for sale in accordance
with the method of disposition specified by the requesting holder, shall
have become effective and, if such method of disposition is a firm
commitment underwritten public offering, all such shares shall have been
sold pursuant thereto.
(c) In the event that the Board of Directors of the Company
determines in good faith that the filing of a registration statement
pursuant hereto would be detrimental to the Company, the Board of
Directors may defer such filing for a period not to exceed sixty (60)
days. The Board of Directors may not effect more than one such deferral
during any twelve month period. The Board of Directors agrees to
promptly notify all holders of Restricted Stock of any such deferral,
and shall provide to such holders a reasonably complete explanation
therefor.
(d) The Company shall be entitled to include in any
registration statement referred to in this Section 4, for sale in
accordance with the method of disposition specified by the requesting
holders, shares of Common Stock to be sold by the Company for its own
account, except to the extent that, in the opinion of the managing
underwriter (if such method of disposition shall be an underwritten
public offering), such inclusion would adversely affect the marketing of
the Restricted Stock to be sold. Except as provided in this paragraph
(d), the Company will not effect any other registration of its Common
Stock, whether for its own account or that of other holders, from the
date of receipt of a notice from requesting holders pursuant to this
Section 4 until the completion of the period of distribution of the
registration contemplated thereby.
(e) Notwithstanding anything to the contrary contained herein,
the Company shall be obligated to register
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Restricted Stock pursuant to this Section 4 on two occasions only.
5. Form S-3 Registration.
(a) If the Company shall receive from any holder or holders of
Restricted Stock a written request or requests that the Company effect a
registration on Form S-3 and any related qualification or compliance with
respect to Restricted Stock owned by such holder or holders, the reasonably
anticipated aggregate price to the public of which would exceed $1,000,000, the
Company will:
(i) promptly give written notice of the proposed registration,
and any related qualification or compliance, to all other holders of
Restricted Stock; and
(ii) as soon as is reasonably practicable, use its best efforts
to effect such registration (including, without limitation, the
execution of an undertaking to file post-effective amendments,
appropriate qualifications under applicable blue sky or other state
securities laws and appropriate compliance with applicable regulations
issued under the Securities Act and any other government requirements or
regulations) as may be so requested and as would permit or facilitate
the sale and distribution of all or such portion of such holder's or
holders' Restricted Stock as is specified in such request, together with
all or such portion of the Restricted Stock of any holder or holders
joining in such request as are specified in a written request given
within 30 days after receipt of such written notice from the Company;
provided, however that the Company shall not be obligated to effect any
such registration, qualification or compliance pursuant to this Section
5 (A) more than once in any 180-day period, or (B) if the Company is not
entitled to use Form S-3; and provided, further, that the only
securities which the Company shall be required to register pursuant
hereto shall be shares of Common Stock. Subject to the foregoing, the
Company shall file a registration statement covering the Restricted
Stock so requested to be registered as soon as is reasonably practicable
after receipt of the request or requests of the holders of the
Restricted Stock.
(b) Notwithstanding anything to the contrary contained herein,
the Company shall be obligated to register Restricted Stock pursuant to this
Section 5 on two occasions only.
6. Incidental Registration. If the Company at any time
(other than pursuant to Section 4 or 5 hereof) proposes to register any of its
Common Stock under the Securities Act for sale to the public, whether for its
own account or for the account of other security holders or both (except with
respect to
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registration statements on Form S-4 or Form S-8 or another form not available
for registering the Restricted Stock for sale to the public), it will give
written notice at such time to all holders of outstanding Restricted Stock of
its intention to do so. Upon the written request of any such holder, given
within 30 days after receipt of any such notice by the Company, to register any
of its Restricted Stock (which request shall state the intended method of
disposition thereof), the Company will use its best efforts to cause the
Restricted Stock as to which registration shall have been so requested to be
included in the securities to be covered by the registration statement proposed
to be filed by the Company, all to the extent requisite to permit the sale or
other disposition by the holder (in accordance with its written request) of
such Restricted Stock so registered; provided that nothing herein shall prevent
the Company from abandoning or delaying such registration at any time;
provided, further, that the only securities which the Company shall be required
to register shall be shares of Common Stock. In the event that any
registration pursuant to this Section 6 shall be, in whole or in part, an
underwritten public offering of Common Stock, any request by a holder pursuant
to this Section 6 to register Restricted Stock shall specify that either (i)
such Restricted Stock is to be included in the underwriting on the same terms
and conditions as the shares of Common Stock otherwise being sold through
underwriters in connection with such registration or (ii) such Restricted Stock
is to be sold in the open market without any underwriting, on terms and
conditions comparable to those normally applicable to offerings of common stock
in reasonably similar circumstances. The number of shares of Restricted Stock
to be included in an underwriting in accordance with clause (i) above may be
reduced pro rata among the requesting holders of Restricted Stock based upon
the number of shares of Restricted Stock so requested to be registered, if and
to the extent that the managing underwriter shall be of the opinion that such
inclusion would adversely affect the marketing of the securities to be sold by
the Company therein; provided, however, that if any shares are to be included
in such underwriting for the account of any person other than the Company, the
shares to be so included shall be subject first to reduction before the shares
of Restricted Stock are reduced pro rata.
Notwithstanding anything to the contrary contained in this
Section 6, in the event that there is a firm commitment underwritten public
offering of securities of the Company pursuant to a registration covering
Restricted Stock and a holder of Restricted Stock does not elect to sell his
Restricted Stock to the underwriters of the Company's securities in connection
with such offering, such holder shall refrain from selling such Restricted
Stock so registered pursuant to this Section 6 during the period of
distribution of the Company's securities by such underwriters and the period in
which the underwriting syndicate participates in the after market; provided,
however, that such
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holder shall, in any event, be entitled to sell its Restricted Stock commencing
on the 90th day after the effective date of such registration statement or, if
later, on such date (but in no event later than the 180th day after such
effective date) as contractual "lock-up" restrictions imposed by the
underwriters shall expire or be released.
7. Registration Procedures. If and whenever the Company is
required by the provisions of Section 4, 5 or 6 hereof to use its best efforts
to effect the registration of any of the Restricted Stock under the Securities
Act, the Company will, as expeditiously as possible:
(a) prepare (and afford counsel for the selling holders
reasonable opportunity to review and comment thereon) and file with the
Commission a registration statement on the most appropriate form
adequate for the purposes thereof with respect to such securities and
use its best efforts to cause such registration statement to become and
remain effective for the period of the distribution contemplated thereby
(to be determined as hereinafter provided);
(b) prepare (and afford counsel for the selling holders
reasonable opportunity to review and comment thereon) and file with the
Commission such amendments and supplements to such registration
statement and the prospectus used in connection therewith as may be
necessary to keep such registration statement effective for the period
specified in paragraph (a) above and to comply with the provisions of
the Securities Act with respect to the disposition of all Restricted
Stock covered by such registration statement in accordance with the
sellers' intended method of disposition set forth in such registration
statement for such period;
(c) furnish to each seller and to each underwriter such number
of copies of the registration statement and the prospectus included
therein (including each preliminary prospectus) as such persons may
reasonably request in order to facilitate the public sale or other
disposition of the Restricted Stock covered by such registration
statement;
(d) use its best efforts to register or qualify the Restricted
Stock covered by such registration statement under the securities or
blue sky laws of such jurisdictions as the sellers of Restricted Stock
or, in the case of an underwritten public offering, the managing
underwriter, shall reasonably request (provided that the Company will
not be required to (i) qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but for
this paragraph (d), (ii) subject itself to
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taxation in any such jurisdiction or (iii) consent to general service of
process in any such jurisdiction);
(e) immediately notify each seller under such registration
statement and each underwriter, at any time when a prospectus relating
thereto is required to be delivered under the Securities Act, of the
happening of any event as a result of which the prospectus contained in
such registration statement, as then in effect, includes an untrue
statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing
(following which notification the sellers agree to discontinue sales of
their Restricted Stock covered by such registration statement until such
misstatement or omission shall have been remedied);
(f) use all reasonable efforts (if the offering is
underwritten) to furnish, at the request of any seller, on the date that
Restricted Stock is delivered to the underwriters for sale pursuant to
such registration: (i) an opinion of counsel representing the Company
for the purposes of such registration, addressed to the underwriters and
to such seller and dated such date, stating that such registration
statement has become effective under the Securities Act and that (A) to
the best knowledge of such counsel, no stop order suspending the
effectiveness thereof has been issued and no proceedings for that
purpose have been instituted or are pending or contemplated under the
Securities Act, (B) the registration statement, the related prospectus,
and each amendment or supplement thereof comply as to form in all
material respects with the requirements of the Securities Act and the
applicable rules and regulations of the Commission thereunder (except
that such counsel need express no opinion as to financial statements,
the notes thereto, and the financial schedules and other financial and
statistical data contained therein) and (C) to such other effects as may
reasonably be requested by counsel for the underwriters or by such
seller or its counsel and which are customary in underwritings of the
type being undertaken, and (ii) a letter dated such date from the
independent public accountants retained by the Company, addressed to the
underwriters, stating that they are independent public accountants
within the meaning of the Securities Act and that, in the opinion of
such accountants, the financial statements of the Company included in
the registration statement or the prospectus, or any amendment or
supplement thereof, comply as to form in all material respects with the
applicable accounting requirements of the Securities Act, and such
letter shall additionally cover such other financial matters (including
information as to the period ending no more than five business days
prior to the date of such
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letter) with respect to the registration in respect of which such letter
is being given as such underwriters or seller may reasonably request;
and
(g) make available for inspection by each seller, any
underwriter participating in any distribution pursuant to such
registration statement, and any attorney, accountant or other agent
retained by such seller or underwriter, all financial and other records,
pertinent corporate documents and properties of the Company, and cause
the Company's officers, directors and employees to supply all
information reasonably requested by any such seller, underwriter,
attorney, accountant or agent in connection with such registration
statement and permit such seller, attorney, accountant or agent to
participate in the preparation of such registration statement.
For purposes of paragraphs (a) and (b) above and of Section 4(d) hereof, the
period of distribution of Restricted Stock in a firm commitment underwritten
public offering shall be deemed to extend until each underwriter has completed
the distribution of all securities purchased by it, and the period of
distribution of Restricted Stock in any other registration shall be deemed to
extend until the earlier of the sale of all Restricted Stock covered thereby or
six months after the effective date thereof.
In connection with each registration hereunder, the selling
holders of Restricted Stock will furnish to the Company in writing such
information with respect to themselves and the proposed distribution by them as
shall be reasonably necessary in order to assure compliance with federal and
applicable state securities laws.
In connection with each registration pursuant to Sections 4, 5
and 6 hereof covering an underwritten public offering, the Company agrees to
enter into a written agreement with the managing underwriter selected in the
manner herein provided in such form and containing such provisions as are
customary in the securities business for such an arrangement between major
underwriters and companies of the Company's size and investment stature;
provided, however, that such agreement shall not contain any such provision
applicable to the Company which is inconsistent with the provisions hereof, and
provided, further, that the time and place of the closing under said agreement
shall be as mutually agreed upon among the Company, such managing underwriter
and the selling holders of Restricted Stock.
8. Expenses. All expenses incurred by the Company in
complying with Sections 4, 5 and 6 hereof, including without limitation all
registration and filing fees, printing expenses, fees and disbursements of
counsel and independent public accountants for the Company, fees of the
National Association of Securities Dealers, Inc., transfer taxes, fees of
transfer agents
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and registrars and fees and expenses of one counsel for the sellers of
Restricted Stock, but excluding any Selling Expenses, are herein called
"Registration Expenses". All underwriting discounts and selling commissions
applicable to the sale of Restricted Stock are herein called "Selling
Expenses".
The Company will pay all Registration Expenses in connection with
each registration statement filed pursuant to Section 4, 5 or 6 hereof. All
Selling Expenses in connection with any registration statement filed pursuant
to Section 4, 5 or 6 hereof shall be borne by the participating sellers in
proportion to the number of shares sold by each, or by such persons other than
the Company (except to the extent the Company shall be a seller) as they may
agree.
9. Indemnification. In the event of a registration of any of
the Restricted Stock under the Securities Act pursuant to Section 4, 5 or 6
hereof, the Company will indemnify and hold harmless each seller of such
Restricted Stock thereunder and each underwriter of Restricted Stock thereunder
and each other person, if any, who controls such seller or underwriter within
the meaning of the Securities Act, against any losses, claims, damages or
liabilities, joint or several, to which such seller or underwriter or
controlling person may become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in any registration statement under
which such Restricted Stock was registered under the Securities Act pursuant to
Section 4, 5 or 6, any preliminary prospectus or final prospectus contained
therein, or any amendment or supplement thereof, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading, and will reimburse each such seller, each such underwriter and each
such controlling person for any legal or other expenses reasonably incurred by
them in connection with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that the Company will not be
liable in any such case if and to the extent that any such loss, claim, damage
or liability arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission so made in conformity with
information furnished by such seller, such underwriter or such controlling
person in writing specifically for use in such registration statement or
prospectus.
In the event of a registration of any of the Restricted Stock
under the Securities Act pursuant to Section 4, 5 or 6 hereof, each seller of
such Restricted Stock thereunder, severally and not jointly, will indemnify and
hold harmless the Company and each person, if any, who controls the Company
within the meaning of the Securities Act, each officer of the Company
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who signs the registration statement, each director of the Company, each
underwriter and each person who controls any underwriter within the meaning of
the Securities Act, against all losses, claims, damages or liabilities, joint
or several, to which the Company or such officer, director, underwriter or
controlling person may become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the registration statement under
which such Restricted Stock was registered under the Securities Act pursuant to
Section 4, 5 or 6, any preliminary prospectus or final prospectus contained
therein, or any amendment or supplement thereof, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading, and will reimburse the Company and each such officer, director,
underwriter and controlling person for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that such seller will be
liable hereunder in any such case if and only to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement
or alleged untrue statement or omission or alleged omission made in reliance
upon and in conformity with information pertaining to such seller, as such,
furnished in writing to the Company by such seller specifically for use in such
registration statement or prospectus; and provided, further, that the liability
of each seller hereunder shall be limited to the proceeds (net of underwriting
discounts and commissions) received by such seller from the sale of Restricted
Stock covered by such registration statement.
Promptly after receipt by an indemnified party hereunder of
notice of the commencement of any action, such indemnified party shall, if a
claim in respect thereof is to be made against the indemnifying party
hereunder, notify the indemnifying party in writing thereof, but the omission
so to notify the indemnifying party shall not relieve it from any liability
which it may have to any indemnified party other than under this Section 9. In
case any such action shall be brought against any indemnified party and it
shall notify the indemnifying party of the commencement thereof, the
indemnifying party shall be entitled to participate in and, to the extent it
shall wish, to assume and undertake the defense thereof with counsel
satisfactory to such indemnified party, and, after notice from the indemnifying
party to such indemnified party of its election so to assume and undertake the
defense thereof, the indemnifying party shall not be liable to such indemnified
party under this Section 9 for any legal expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation and of liaison with counsel so selected; provided,
however, that if the defendants in any
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such action include both the indemnified party and the indemnifying party and
the indemnified party shall have reasonably concluded that there may be
reasonable defenses available to it which are different from or additional to
those available to the indemnifying party, or if the interests of the
indemnified party reasonably may be deemed to conflict with the interests of
the indemnifying party, the indemnified party shall have the right to select a
separate counsel and to assume such legal defenses and otherwise to participate
in the defense of such action, with the expenses and fees of such separate
counsel and other expenses related to such participation to be reimbursed by
the indemnifying party as incurred.
Notwithstanding the foregoing, any indemnified party shall have
the right to retain its own counsel in any such action, but the fees and
disbursements of such counsel shall be at the expense of such indemnified party
unless (i) the indemnifying party shall have failed to retain counsel for the
indemnified person as aforesaid or (ii) the indemnifying party and such
indemnified party shall have mutually agreed to the retention of such counsel.
It is understood that the indemnifying party shall not, in connection with any
action or related actions in the same jurisdiction, be liable for the fees and
disbursements of more than one separate firm qualified in such jurisdiction to
act as counsel for the indemnified party. The indemnifying party shall not be
liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability by
reason of such settlement.
If the indemnification provided for in the first two paragraphs
of this Section 9 is unavailable or insufficient to hold harmless an
indemnified party under such paragraphs in respect of any losses, claims,
damages or liabilities or actions in respect thereof referred to therein, then
each indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities or actions in such proportion as
appropriate to reflect the relative fault of the Company, on the one hand, and
the underwriters and the sellers of such Restricted Stock, on the other, in
connection with the statements or omissions which resulted in such losses,
claims, damages, liabilities or actions as well as any other relevant equitable
considerations, including the failure to give any notice under the third
paragraph of this Section 9. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact relates to information supplied by the Company, on
the one hand, or the underwriters and the sellers of such Restricted Stock, on
the other, and to the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and
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each of you agree that it would not be just and equitable if contributions
pursuant to this paragraph were determined by pro rata allocation (even if all
of the sellers of such Restricted Stock were treated as one entity for such
purpose) or by any other method of allocation which did not take account of the
equitable considerations referred to above in this paragraph. The amount paid
or payable by an indemnified party as a result of the losses, claims, damages,
liabilities or action in respect thereof, referred to above in this paragraph,
shall be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this paragraph, the sellers
of such Restricted Stock shall not be required to contribute any amount in
excess of the amount, if any, by which the total price at which the Common
Stock sold by each of them was offered to the public exceeds the amount of any
damages which they would have otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission. No person guilty of fraudulent
misrepresentations (within the meaning of Section 11(f) of the Securities Act),
shall be entitled to contribution from any person who is not guilty of such
fraudulent misrepresentation.
The indemnification of underwriters provided for in this Section
9 shall be on such other terms and conditions as are at the time customary and
reasonably required by such underwriters. In that event, the indemnification
of the sellers of Restricted Stock in such underwriting shall at the sellers'
request be modified to conform to such terms and conditions.
10. Changes in Common Stock. If, and as often as, there are
any changes in the Common Stock by way of stock split, stock dividend,
combination or reclassification, or through merger, consolidation,
reorganization or recapitalization, or by any other means, appropriate
adjustment shall be made in the provisions hereof, as may be required, so that
the rights and privileges granted hereby shall continue with respect to the
Common Stock as so changed.
11. Representations and Warranties of the Company. The Company
represents and warrants to you as follows:
(a) The execution, delivery and performance of this Agreement
by the Company have been duly authorized by all requisite corporate
action and will not violate any provision of law, any order of any court
or other agency of government, the Restated Certificate of Incorporation
or By-laws of the Company, or any provision of any indenture, agreement
or other instrument to which it or any of its properties or assets is
bound, or conflict with, result in a breach of or constitute (with due
notice or lapse of time or both) a default under any such indenture,
agreement or other instrument, or result in the creation or imposition
of any lien,
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charge or encumbrance of any nature whatsoever upon any of the
properties or assets of the Company.
(b) This Agreement has been duly executed and delivered by the
Company and constitutes the legal, valid and binding obligation of the
Company, enforceable in accordance with its terms, subject to
considerations of public policy in the case of the indemnification
provisions hereof.
12. Rule 144 Reporting. The Company agrees with you as
follows:
(a) The Company shall make and keep public information
available, as those terms are understood and defined in Rule 144(c)(1)
or (c)(2), whichever is applicable, under the Securities Act, at all
times from and after the date it is first required to do so.
(b) The Company shall file with the Commission in a timely
manner all reports and other documents as the Commission may prescribe
under Section 13(a) or 15(d) of the Exchange Act at all times during
which the Company is subject to such reporting requirements of the
Exchange Act.
(c) The Company shall furnish to such holder of Restricted
Stock forthwith upon request (i) a written statement by the Company as
to its compliance with the reporting requirements of Rule 144 (at any
time from and after the date it first becomes subject to such reporting
requirements) and of the Securities Act and the Exchange Act (at any
time during which it is subject to such reporting requirements), (ii) a
copy of the most recent annual or quarterly report of the Company and
(iii) such other reports and documents so filed as a holder may
reasonably request to avail itself of any rule or regulation of the
Commission allowing a holder of Restricted Stock to sell any such
securities without registration.
13. Miscellaneous.
(a) All covenants and agreements contained in this Agreement
by or on behalf of any of the parties hereto shall bind and inure to the
benefit of the respective successors and assigns of the parties hereto
whether so expressed or not. Without limiting the generality of the
foregoing, the registration rights conferred herein on the holders of
Restricted Stock shall inure to the benefit of any and all subsequent
holders from time to time of the Restricted Stock for so long as the
certificates representing the Restricted Stock shall be required to bear
the legend specified in Section 2 hereof.
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(b) All notices, requests, consents and other communications
hereunder shall be in writing and shall be mailed by first class
registered mail, postage prepaid, addressed as follows:
if to the Company, to it at:
Aurora Electronics, Inc.
0000 Xxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxxx Xxxxx, President
with a copy to:
Xxxxxx & Xxxx L.L.P.
0000 Xxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxx X. Xxxxxxxx, Esq.
Xxxxxxx X. Xxxxxx, Esq.
if to any holder of Restricted Stock, to such holder at the
address as set forth under such holder's name in Annex I to the Purchase
Agreement;
if to any subsequent holder of Restricted Stock, to such holder
at such address as may have been furnished to the Company in writing by
such holder;
or, in any case, at such other address or addresses as shall have been
furnished in writing to the Company (in the case of a holder of
Restricted Stock) or to the holders of Restricted Stock (in the case of
the Company).
(c) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
(d) This Agreement constitutes the entire agreement of the
parties with respect to the subject matter hereof. This Agreement may
not be modified or amended except in a writing signed by the Company and
the holders of not less than a majority of the Restricted Stock then
outstanding, provided that no modification or amendment shall deprive
any holder of Restricted Stock of any material right under this
Agreement without such holder's consent. The Company will not grant any
registration rights to any other person without the written consent of
the holders of a majority of the Restricted Stock then outstanding if
such rights could reasonably be expected to conflict with, or be on a
parity with, the rights of holders of Restricted Stock granted under
this Agreement.
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(e) This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
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Please indicate your acceptance of the foregoing by signing and
returning the enclosed counterpart of this letter, whereupon this letter
(herein sometimes called "this Agreement") shall be a binding agreement between
the Company and you.
Very truly yours,
AURORA ELECTRONICS, INC.
By
---------------------------------
AGREED TO AND ACCEPTED
as of the date first
above written.
THE PURCHASERS:
WELSH, CARSON, XXXXXXXX & XXXXX VII, L.P.
By WCAS VII Partners, L.P., General Partner
By:
-----------------------------
WCAS CAPITAL PARTNERS II, L.P.
By WCAS XX XX Partners, General Partner
By:
-----------------------------
WCAS INFORMATION PARTNERS, L.P.
By:
-----------------------------
THE XXXXXX XXXX TRUST
By:
-----------------------------
Trustee
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Xxx X. Xxxxxx
CHEMICAL EQUITY ASSOCIATES,
A California Limited Partnership
By Chemical Venture Partners,
General Partner
By:
-----------------------------
--------------------------------
Xxxxx X. Xxxxxxxx
--------------------------------
Xxxxxxx X. Xxxxxx
--------------------------------
Xxxxxxx X. xx Xxxxxx
--------------------------------
Xxxxx X. Xxxxxx
--------------------------------
Xxxxxx X. XxXxxxxxx
--------------------------------
Xxxxxx X. Xxxxxxxxx
--------------------------------
Xxxxxx X. Xxxx
19
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Xxxx X. Xxxxxxx
--------------------------------
Xxxxxxx X. Xxxxx
--------------------------------
Xxxxx X. XxxXxxxx
--------------------------------
Xxxxxxx X. Xxxxx
