EXHIBIT 4
AUREAL SEMICONDUCTOR INC.
0000 Xxxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxxx 00000
COMMON STOCK PURCHASE AGREEMENT
THIS COMMON STOCK PURCHASE AGREEMENT is made as of June 10, 1996, by and
among AUREAL SEMICONDUCTOR INC., a Delaware corporation (the "Company"), and
the purchasers set forth on the Schedule of Purchasers attached hereto as
EXHIBIT A (the "Purchasers").
WHEREAS, the Company desires to issue and sell to the Purchasers and the
Purchasers desire to purchase shares of the Common Stock of the Company.
NOW, THEREFORE, in consideration of the mutual promises, covenants and
conditions hereinafter set forth, the parties hereby agree as follows:
1. SALE OF THE SECURITIES.
1.1 SALE. Subject to the terms and conditions hereof, the Company
will issue and sell to the Purchasers and the Purchasers will purchase up to
an aggregate of 8,888,888 shares of Common Stock (the "Securities") at a
price of $1.35 per share, or an aggregate purchase price of $11,999,998.80.
2. CLOSING DATES; DELIVERY.
2.1 CLOSING DATE. The closing of the purchase and sale of the
Securities (the "Closing") shall be held at the offices of Xxxx Xxxx Xxxx &
Freidenrich, A Professional Corporation, 000 Xxxxxxxx Xxxxxx, Xxxx Xxxx,
Xxxxxxxxxx 00000-0000 at 10:00 a.m. on June 10, 1996, or at such other time and
place as the Company and a majority in interest of the Purchasers shall agree
upon, orally or in writing.
2.2 DELIVERY. Subject to the terms of this Agreement, at the
Closing the Company will deliver to the Purchasers the certificates
representing the Securities to be purchased by the Purchasers from the
Company, against payment of the purchase price therefor by delivery of a
check or checks, payable to the order of the Company, or by wire transfer.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. Except as set forth
in EXHIBIT B attached hereto, the Company hereby represents and warrants to
the Purchasers as follows:
3.1 ORGANIZATION AND STANDING; CERTIFICATE OF INCORPORATION AND
BYLAWS. The Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware and has all requisite
corporate power and
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authority to carry on its business as now conducted and as proposed to be
conducted. The Company is presently qualified, licensed or domesticated as a
foreign corporation or partnership in all jurisdictions in which the failure
to be so qualified, licensed or domesticated would result in material adverse
consequences to the Company or its business. Copies of the Company's
Certificate of Incorporation, Bylaws and minutes and consents of its
stockholders and Board of Directors will be provided to the Purchasers or
their special counsel upon request.
3.2 CORPORATE POWER. The Company has now, or will have at the
Closing Date, all requisite legal and corporate power to enter into this
Agreement and all other agreements contemplated hereby, to sell the
Securities hereunder, and to carry out and perform its obligations under the
terms of this Agreement and all other agreements contemplated hereby. This
Agreement and all other agreements contemplated hereby are valid and binding
obligations of the Company, except as the same may be limited by bankruptcy,
insolvency, fraudulent conveyance, moratorium, usury, reorganization, and
other laws of general application affecting the enforcement of creditors'
rights.
3.3 CAPITALIZATION. The authorized capital stock of the Company
is 100,000,000 shares of Common Stock. The Company has reserved, up to
twenty percent (20%) of the then fully diluted Common Stock (including
outstanding shares and all options and warrants to purchase Common Stock),
for issuance under the Plans (as such term is defined below). As of May 31,
1996, there are issued and outstanding 30,000,000 shares of the Company's
Common Stock. All such issued and outstanding shares have been duly
authorized and validly issued, are fully paid and nonassessable and were
issued in compliance with all applicable state and federal laws concerning
the issuance of securities. Except for (i) 7,500,000 shares of Common Stock
which are currently reserved under the Company's 1994 Stock Option Plan and
the Company's 1995 Stock Option Plan (collectively, the "Plans") for future
issuance to key employees, consultants and members of the Board of Directors
of the Company (options for approximately 6,005,162 shares are currently
outstanding under the Plan), (ii) options to purchase 2,644,845 shares of the
Company's Common Stock which were assumed pursuant to the acquisition of
Crystal River Engineering, Inc., (iii) an agreement between the Company and
Xxxxxxxxx & Xxxxx LLC ("H&Q") to issue to H&Q a warrant to purchase 50,000
shares of the Company's Common Stock, and (iii) a warrant to Financing For
Science International to purchase 50,000 shares of the Company's Common
Stock, there are no outstanding rights, options, warrants, conversion rights
or agreements for the purchase or acquisition from the Company of any shares
of its capital stock. The Company is not a party or subject to any agreement
or understanding between any persons or entities which affects or relates to
the voting or giving of written consents with respect to any securities or by
any director of the Company.
3.4 LINE OF CREDIT. The Company has agreed to reduce its line of
credit with TCW from $22.0 million to $20.0 million effective upon the
closing of this transaction. All net proceeds from this transaction are
anticipated to be used to pay down the line of credit which will remain
available for further reborrowing through its current termination date of
March 31, 1998.
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3.5 AUTHORIZATION.
(a) All corporate, federal and state action on the part of
the Company, its officers, directors and stockholders necessary for the sale
and issuance of the Securities pursuant hereto and the performance of the
Company's obligations hereunder or contemplated hereby has been taken or will
be taken prior to the Closing.
(b) The Securities, when issued in compliance with the
provisions of this Agreement, will be validly issued, fully paid and
nonassessable, and will be free of any liens or encumbrances; provided,
however, that the Securities may be subject to restrictions on transfer under
state and/or federal securities laws as set forth herein, and as may be
required by future changes in such laws.
(c) No person has any right of first refusal or any preemptive
rights in connection with the issuance of the Securities.
3.6 PATENTS, TRADEMARKS, ETC. Except as set forth in EXHIBIT B,
the Company owns and possesses or is licensed under all patents, patent
applications, licenses, trademarks, trade names, brand names, inventions,
processes, formulae and copyrights necessary for the operation of the
business of the Company as now conducted and as proposed to be conducted with
no infringement of or conflict with the rights of others. Except as
contemplated in this Agreement, there are no outstanding options, licenses,
or agreements of any kind relating to the foregoing, nor is the Company bound
by or a party to any other options, licenses or agreements of any kind with
respect to the patents, trademarks, service marks, trade names, copyrights,
trade secrets, licenses, information, proprietary rights and processes of any
other person or entity. The Company has not received any communications
alleging that it has violated or, by conducting its business as proposed,
would violate any of the patents, trademarks, service marks, trade names,
copyrights or trade secrets or other proprietary rights of any other person
or entity. The Company is not aware that any of its employees are obligated
under any contract (including licenses, covenants or commitments of any
nature) or other agreement, or subject to any judgment, decree or order of
any court or administrative agency, that would interfere with the use of his
or her best efforts to promote the interests of the Company or that would
conflict with the Company's business as proposed to be conducted or that
would prevent any such employee from assigning inventions to the Company.
Neither the execution nor delivery of this Agreement, nor the carrying on of
the Company's business as proposed, will, to the best of the Company's
knowledge, conflict with or result in a breach of the terms, conditions or
provisions of, or constitute a default under, any contract, covenant or
instrument under which any of such employees is now obligated. The Company
does not believe that it is or will be necessary for the Company to utilize
any inventions of any of its employees (or people it currently intends to
hire) made prior to their employment by the Company.
3.7 COMPLIANCE WITH OTHER INSTRUMENTS, NONE BURDENSOME, ETC.
Except as set forth in EXHIBIT B, the Company is not in violation of any term
of its Certificate of Incorporation or Bylaws, nor is the Company in
violation in any material respect of any mortgage, indenture, contract,
agreement, instrument, judgment or decree, and to the
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best of the Company's knowledge, the Company is not in violation of any
order, statute, rule or regulation applicable to the Company. The execution,
delivery and performance of and compliance with this Agreement and the other
agreements contemplated hereby, and the issuance and sale of the Securities
pursuant hereto, will not result in (a) any such violation, or (b) be in
conflict with or constitute a default under any such term, or (c) result in
the creation of any mortgage, pledge, lien, encumbrance or charge upon any of
the properties or assets of the Company pursuant to any such term. In
addition, the execution, delivery and performance of and compliance with this
Agreement and the other agreements contemplated hereby, and the issuance and
sale of the Securities pursuant hereto, will not result in a violation of any
law, statute or regulation applicable to the Company.
3.8 EMPLOYEES. Each officer and key employee of the Company has
executed an Employee Proprietary and Confidential Information Agreement, the
form of which has been provided to the Purchasers or their special counsel.
The Company, after reasonable investigation, is not aware that any of its
employees are in violation thereof, and the Company will use its best efforts
to prevent any such violation.
3.9 LITIGATION, ETC. Except as set forth on EXHIBIT B, there are
no actions, proceedings or investigations pending against the Company or its
officers, directors, or shareholders, or to the best of the Company's
knowledge, against employees or consultants of the Company (or, to the best
of the Company's knowledge, any basis therefor or threat thereof): (1) which
might result in (a) any material adverse change in the business, prospects,
conditions, affairs or operations of the Company, or in any of their
properties or assets, or (b) any material impairment of the right or ability
of the Company to carry on its business as now conducted or as proposed to be
conducted, or (c) any material liability on the part of the Company; or (2)
which questions the validity of this Agreement or any action taken or to be
taken in connection herewith. The Company does not currently plan to
initiate any litigation.
3.10 GOVERNMENTAL CONSENT, ETC. No consent, approval or
authorization of or designation, declaration or filing with any governmental
authority on the part of the Company is required in connection with: (a) the
valid execution and delivery of this Agreement; or (b) the offer, sale or
issuance of the Securities; or (c) the obtaining of the consents, permits and
waivers specified in subsection 5.1(c) hereof; or (d) the consummation of any
other transaction contemplated hereby; except, if required, filings or
qualifications under the Securities Act of 1933, as amended (the "Securities
Act") and California Corporate Securities Law of 1968, as amended (the
"Law"), which filings or qualifications, if required, will have been timely
filed or obtained.
3.11 OFFERING. In reliance on the representations and warranties
of the Purchasers in Section 4 hereof, the offer, sale and issuance of the
Securities in conformity with the terms of this Agreement will not result in
a violation of the requirements of Section 5 of the Securities Act or the
qualification requirements of the Law.
3.12 TAXES. The Company has timely filed all tax returns that are
required to have been filed with appropriate federal, state, county and local
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governmental agencies or instrumentalities. The Company has paid or
established reserves for all income, franchise and other taxes due as
reflected on said returns. There is no pending dispute with any taxing
authority relating to any of such returns and the Company has no knowledge of
any proposed liability for any tax to be imposed upon the properties or
assets of the Company for which there is not an adequate reserve reflected in
the Financial Statements (as defined below).
3.13 REGISTRATION RIGHTS. Other than as set forth on EXHIBIT B, the
Company is not obligated to register any of its presently outstanding securities
or any of its securities which may hereafter be issued.
3.14 DISCLOSURE. Neither this Agreement and the exhibits hereto,
nor any of the other statements or certificates furnished or to be furnished
to the Purchasers pursuant hereto or in connection with the transactions
contemplated hereby, including the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1995, and any amendments to date thereto,
the Company's Proxy Statement for the 1996 Annual Meeting of Stockholders,
and the Company's first quarter 1996 Report on Form 10-Q, contains any untrue
statement of a material fact or omits to state any material fact necessary in
order to make the statements contained herein and therein not misleading in
light of the circumstances under which such statements were made.
4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PURCHASERS AND
RESTRICTIONS ON TRANSFER IMPOSED BY THE SECURITIES ACT OF 1933.
4.1 REPRESENTATIONS, WARRANTIES AND COVENANTS BY THE PURCHASERS.
Each Purchaser represents, warrants and covenants to the Company as follows:
(a) The Securities to be received by the Purchaser will be
acquired for investment for the Purchaser's own account, for investment and
not with a view to, or for resale in connection with, any distribution or
public offering thereof within the meaning of the Securities Act and the Law.
The Purchaser has the full right, power and authority to enter into and
perform this Agreement and all other agreements contemplated hereby, and this
Agreement and all other agreements contemplated hereby constitute valid and
binding obligations of the Purchaser. The Purchaser acknowledges and
understands that the Securities must be held indefinitely unless the
Securities are subsequently registered under the Securities Act and qualified
under the Law or an exemption from such registration and such qualification
is available.
(b) The Purchaser will not sell, negotiate, pledge or
otherwise dispose of any of the Securities (other than in conjunction with an
effective registration statement for the Securities under the Act) in the
United States, its territories and possessions or any area subject to its
jurisdiction, or to any person who is a national or resident of the United
States (including any estate of such person or any corporation, partnership
or other entity created or organized therein) unless and until (i) the
Purchaser shall have notified the Company of the proposed disposition and
shall have furnished the Company with a statement of the circumstances
surrounding the proposed disposition, and (ii) the Purchaser shall have
furnished the Company with an opinion of counsel
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satisfactory in form and substance to the Company to the effect that such
disposition will not require registration under the Securities Act.
(c) The Purchaser has such knowledge and experience in
financial and business matters as to be capable of evaluating the merits and
risks of the Purchaser's prospective investment in the Securities. The
Purchaser has the ability to bear the economic risks of the Purchaser's
prospective investment. The Purchaser has been furnished with and has had
access to such information as the Purchaser has considered necessary to make
a determination as to the purchase of the Securities together with such
additional information as is necessary to verify the accuracy of the
information supplied. The Purchaser has had all questions which have been
asked by the Purchaser satisfactorily answered by the Company. The Purchaser
has not been offered the Securities by any form of advertisement, article,
notice or other communication published in any newspaper, magazine, or
similar media or broadcast over television or radio, or any seminar or
meeting whose attendees have been invited by any such media.
4.2 LEGENDS. Each certificate representing the Securities may be
endorsed with the following legends:
(a) THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE
SOLD, TRANSFERRED, ASSIGNED OR HYPOTHECATED UNLESS THERE IS AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH ACT COVERING SUCH SECURITIES, THE SALE IS
MADE IN ACCORDANCE WITH RULE 144 UNDER THE ACT, OR THE COMPANY RECEIVES AN
OPINION OF COUNSEL FOR THE HOLDER OF THESE SECURITIES REASONABLY SATISFACTORY
TO THE COMPANY, STATING THAT SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION
IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH
ACT.
(b) THE HOLDER WILL NOT SELL, HYPOTHECATE, PLEDGE, OR
OTHERWISE DISPOSE OF ANY INTEREST IN THE SHARES IN THE UNITED STATES, ITS
TERRITORIES AND POSSESSIONS OR ANY AREA SUBJECT TO ITS JURISDICTION, OR TO
ANY PERSON WHO IS A NATIONAL OR RESIDENT OF THE UNITED STATES (INCLUDING ANY
ESTATE OF SUCH PERSON OR ANY CORPORATION, PARTNERSHIP OR OTHER ENTITY CREATED
OR ORGANIZED THEREIN) UNLESS SUCH SHARES HAVE BEEN EITHER REGISTERED UNDER
THE SECURITIES ACT OR ARE EXEMPT, IN THE OPINION OF THE COMPANY'S COUNSEL,
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.
(c) Any other legends required by the Law.
The Company need not register a transfer of legended Securities, and may also
instruct its transfer agent not to register the transfer of the Securities,
unless the conditions specified in each of the foregoing legends are
satisfied.
6
4.3 REMOVAL OF LEGEND AND TRANSFER RESTRICTIONS. Any legend
endorsed on a certificate pursuant to subsection 4.2(a) and 4.2(b) and the
stop transfer instructions with respect to such legended Securities shall be
removed, and the Company shall issue a certificate without such legend to the
holder of such Securities if such Securities are registered under the
Securities Act and a prospectus meeting the requirements of Section 10 of the
Securities Act is available or if such holder satisfies the requirements of
Rule 144(k) and, where reasonably deemed necessary by the Company, the holder
provides the Company with an opinion of counsel for such holder of the
Securities, reasonably satisfactory to the Company, to the effect that (i)
such holder meets the requirements of Rule 144(k) or (ii) a public sale,
transfer or assignment of such Securities may be made without registration.
4.4 RULE 144. The Purchaser is aware of the adoption of Rule 144
by the SEC promulgated under the Securities Act, which permits limited public
resales of securities acquired in a nonpublic offering, subject to the
satisfaction of certain conditions. The Purchaser understands that under
Rule 144, the conditions include, among other things: the availability,
under certain conditions, of certain current public information about the
issuer and the resale occurring not less than two years after the party has
purchased and paid for the securities to be sold. The Company covenants that
(i) the Company will use its best efforts to comply with the current public
information requirements of Rule 144(c)(1) under the Securities Act; and (ii)
at all such times as Rule 144 is available for use by the Purchaser, the
Company will furnish the Purchaser upon request with all information within
the possession of the Company required for the preparation and filing of Form
144.
5. CONDITIONS TO CLOSING.
5.1 CONDITIONS TO THE PURCHASERS' OBLIGATIONS. The obligation of
the Purchasers to purchase the Securities at the Closing is subject to the
fulfillment to their satisfaction, on or prior to the Closing Date, of the
following conditions, any of which may be waived in accordance with the
provisions of subsection 7.1 hereof:
(a) REPRESENTATIONS AND WARRANTIES CORRECT; PERFORMANCE OF
OBLIGATIONS. The representations and warranties made by the Company in
Section 3 hereof shall be true and correct when made, and shall be true and
correct in all material respects on the Closing Date with the same force and
effect as if they had been made on and as of said date. The Company's
business and assets shall not have been adversely affected in any material
way prior to the Closing Date. The Company shall have performed in all
material respects all obligations and conditions herein required to be
performed or observed by it on or prior to the Closing Date.
(b) OPINION OF COMPANY'S COUNSEL. Xxxx Xxxx Xxxx &
Freidenrich, A Professional Corporation, counsel to the Company, shall have
delivered an opinion addressed to the Purchasers, dated the Closing Date,
substantially in the form as that attached hereto as EXHIBIT D.
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(c) CONSENTS AND WAIVERS. The Company shall have obtained in
a timely fashion any and all consents, permits and waivers necessary or
appropriate for consummation of the transactions contemplated by this
Agreement.
(d) LEGAL INVESTMENT. At the time of the Closing, the
purchase of the Securities hereunder shall be legally permitted by all laws
and regulations to which the Purchasers and the Company are subject.
(e) EXECUTION OF AMENDMENT TO RIGHTS AGREEMENT. The Company
and the Purchasers shall have executed an Amendment to the Registration
Rights Agreement dated December 30, 1994, in the form attached hereto as
EXHIBIT C.
(f) COMPLIANCE CERTIFICATE. The Company shall have delivered
a Certificate, executed by the President and the Chief Financial Officer of
the Company, dated the Closing Date, certifying to the fulfillment of the
conditions specified in subsections (a), (c), (d) and (e) of this Section 5.1.
5.2 CONDITIONS TO OBLIGATIONS OF THE COMPANY. The Company's
obligation to sell and issue the Securities at the Closing is subject to the
fulfillment to the Company's satisfaction on or prior to the Closing Date of
the following conditions, any of which may be waived by the Company in
accordance with the provisions of subsection 7.1 hereof:
(a) REPRESENTATIONS AND WARRANTIES CORRECT. The
representations and warranties made by the Purchasers in Section 4 hereof
shall be true and correct when made, and shall be true and correct on the
Closing Date with the same force and effect as if they had been made on and
as of said date.
(b) CONSENTS AND WAIVERS. Each of the Purchasers shall have
obtained in a timely fashion any and all consents, permits and waivers
necessary or appropriate for consummation of the transactions contemplated by
this Agreement.
(c) SATISFACTION OF CONDITIONS. The conditions set forth in
subsections (c), (d) and (e) of Section 5.1 shall have been fulfilled.
6. USE OF PROCEEDS. The Company shall use the proceeds from this
financing to temporarily paydown its line of credit with TCW. $20 million
will remain available to the Company under its line of credit with TCW
through March 31, 1998.
7. MISCELLANEOUS.
7.1 WAIVERS AND AMENDMENTS. This Agreement or any provision
hereof may be amended, waived, discharged or terminated only by a statement
in writing signed by the party against which enforcement of the amendment,
waiver, discharge or termination is sought.
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7.2 GOVERNING LAW. This Agreement shall be governed in all
respects by the laws of the State of California.
7.3 SURVIVAL. The representations, warranties, covenants and
agreements made herein shall survive the Closing of the transactions
contemplated hereby, notwithstanding any investigation made by the
Purchasers. All statements as to factual matters contained in any certificate
or other instrument delivered by or on behalf of the Company pursuant hereto
or in connection with the transactions contemplated hereby shall be deemed to
be representations and warranties by the Company hereunder as of the date of
such certificate or instrument.
7.4 SUCCESSORS AND ASSIGNS. Except as otherwise expressly
provided herein, the provisions hereof shall inure to the benefit of, and be
binding upon, the successors and assigns of the parties hereto.
7.5 ENTIRE AGREEMENT. This Agreement and the other documents
delivered pursuant hereto constitute the full and entire understanding and
agreement between the parties with regard to the subjects hereof and
supersede all prior and contemporaneous agreements, understandings,
negotiations and discussions, whether oral or written, of the parties with
respect thereto.
7.6 NOTICES, ETC. All notices and other communications required
or permitted hereunder shall be in writing and shall be delivered personally
or mailed by first class mail, postage prepaid, or via facsimile or
TWX/Telex, addressed (a) if to the Purchasers at the address set forth on
EXHIBIT A to this Agreement, or at such other address as the Purchasers shall
have furnished to the Company in writing, or (b) if to the Company, at its
address set forth at the beginning of this Agreement, or at such other
address as the Company shall have furnished to the Purchasers in writing,
with a copy of any said notice to be sent to Xxxx Xxxx Xxxx & Freidenrich,
000 Xxxxxxxx Xxxxxx, Xxxx Xxxx, Xxxxxxxxxx 00000-0000, Attention: Xxxxx X.
Xxxxxxxx, Esq. Notices that are mailed shall be deemed received ten (10)
days after deposit in the mail. In the event that the notice is sent by
facsimile or TWX/Telex, notice shall be deemed to have been received when
sent and confirmed as to receipt.
7.7 SEVERABILITY. In case any provision of this Agreement shall
be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions of this Agreement shall not in any
way be affected or impaired thereby.
7.8 EXPENSES. The Company and the Purchasers shall each bear
their own expenses and legal fees in connection with this Agreement and the
transactions contemplated hereby.
7.9 TITLES AND SUBTITLES. The titles of the sections and
subsections of this Agreement are for convenience of reference only and are
not to be considered in construing this Agreement.
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7.10 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
7.11 DELAYS OR OMISSIONS. No delay or omission to exercise any
right, power or remedy accruing to the Company or to the Purchasers shall
impair any such right, power or remedy of the Company or the Purchasers, nor
shall it be construed to be a waiver of any breach or default under this
Agreement, or an acquiescence therein, or of or in any similar breach or
default thereafter occurring; nor shall any delay or omission to exercise any
right, power or remedy or any waiver of any single breach or default be
deemed a waiver of any other right, power or remedy or breach or default
theretofore or thereafter occurring. All remedies, either under this
Agreement, or by law otherwise afforded to the Company or the Purchasers,
shall be cumulative and not alternative.
AUREAL SEMICONDUCTOR INC.
By:
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COUNTERPART SIGNATURE PAGE TO
COMMON STOCK PURCHASE AGREEMENT
DATED AS OF JUNE ____, 1996
"PURCHASER"
If you are an individual, Name (Please Print)
please sign and print your name
to the right ----------------------------------
----------------------------------
Signature
If you are signing on behalf of Name of Organization
an entity, please print the legal
name of the entity and sign to the ----------------------------------
right, indicating your title
Name (Please Print)
----------------------------------
Title:
---------------------------
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EXHIBIT A
SCHEDULE OF PURCHASERS
NAME AND ADDRESS SHARES PURCHASE PRICE
IT Asset Management
Attn: Xxxxxx Xxxxx
00 Xxx xx Xxxxx
00000 Xxxxx Xxxxxx
IT Technology Investment 185,185 $ 249,999.75
Cerberus Partners, L.P.
Attn: Xxxxxxxx Xxxxxx
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Cerberus Partners, L.P. 165,000 $ 222,750.00
Pequod Investments, L.P. 40,000 $ 54,000.00
Cerberus International, Ltd. 40,000 $ 54,000.00
Ultra Cerberus, Ltd. 5,000 $ 6,750.00
DDJ Capital Management, LLC
Attn: Xxx Xxxxxxx
000 Xxxxxx Xxxxxx, Xxxxx X-0
Xxxxxxxxx, XX 00000
The Copernicus Fund, L.P. 666,667 $ 900,000.45
The Galileo Fund, L.P. 1,333,333 $1,799,999.55
Appaloosa Management, L.P.
Attn: Xxx Xxxxx
00 Xxxx X. Xxxxxxx Xxxxxxx
Xxxxx Xxxxx, XX 00000
Appaloosa I L.P. 1,225,000 $1,653,750.00
Chestnut Investors III Inc. 280,000 $ 378,000.00
Palomino Fund Ltd. 43,750 $ 59,062.50
Pinto Investment LLC 201,250 $ 271,687.50
Xxxxx X. Xxxxxxxx 185,185 $ 249,999.75
0000 Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Xxxxxx Xxxxxxxxx 1,000,000 $1,350,000.00
0000 Xxxxx Xxxxxxx Xxxxxxx
Xxxxx 000
Xxxx Xxxxx, XX 00000
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NAME AND ADDRESS SHARES PURCHASE PRICE
Seneca Capital
Attn: Xxxxxxx Xxxx
000 Xxxxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Seneca Capital L.P. 169,400 $ 228,690.00
DFG Corporation 23,500 $ 31,725.00
ZPG Securities, LLC 31,500 $ 42,525.00
Palamundo LDC
Camen Islands 13,700 $ 18,495.00
Seneca Capital
International LTD 31,900 $ 43,065.00
TCW Special Credits,
as agent and on behalf of certain
funds and accounts set forth below:
Attn: Xxxxxxx Xxxxxx
c/o Oaktree Capital Management
000 X. Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, XX 00000
TCW Special Credits Trust 350,300 $ 472,905.00
TCW Special Credits Fund 3b 684,000 $ 923,400.00
TCW Special Credits Trust 3b 533,800 $ 720,630.00
Delaware State Employees 100,085 $ 135,114.75
Pension Trust
Weyerhaeuser Company 1,580,333 $ 2,133,449.55
Master Pension Trust
------------ -----------------
Totals 8,888,888 $ 11,999,998.80
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EXHIBIT B
SCHEDULE OF EXCEPTIONS
AUREAL SEMICONDUCTOR INC.
Pursuant to Section 3 of the Common Stock Purchase Agreement dated
June 10, 1996 (the "Agreement"), by and among Aureal Semiconductor Inc., a
Delaware corporation (the "Company"), and the Purchasers set forth on EXHIBIT
A thereto, Company hereby delivers this Schedule of Exceptions to the
Company's representations and warranties given in the Agreement. The section
numbers in this schedule correspond to the section numbers in the Agreement.
Any information disclosed herein under any section, however, shall be deemed
to be disclosed and incorporated in any other section of the Agreement where
such disclosure would be appropriate. Capitalized terms used in this
schedule unless otherwise specified have the same meanings given them in the
Agreement.
SECTION 3.3. On May 7, 1996, the Company entered into an Agreement and
Plan of Reorganization (the "Reorganization Agreement") with Aureal
Acquisition Corporation, a California corporation and a wholly-owned
subsidiary of the Company ("Sub") and Crystal River Engineering, Inc., a
California corporation ("CRE") pursuant to which Sub was merged with and into
CRE (the "Merger"). As provided by the Reorganization Agreement, the Company
paid $8.30 for each outstanding share of CRE and assumed all of the
outstanding options to acquire CRE securities. The Merger closed on May 29,
1996, at which time the Company assumed options to acquire, in the aggregate,
2,644,845 shares of the Company's common stock.
SECTION 3.6. As described in its 1995 Form 10-K, on August 23, 1995,
the Company announced it had been named as a defendant in a lawsuit brought
by Creative Technology Ltd. ("Creative"). In its lawsuit, Creative claims
the Company breached a 1992 agreement between the companies settling previous
litigation. The suit seeks any revenues realized by the Company from the
sale of certain products.
As described in the Company's 1995 Form 10-K, Yamaha has aggressively
brought patent infringement actions against other companies which have
developed certain replacement FM synthesis chips. There can be no assurance
that Yamaha will not pursue the Company under similar theories.
The Company has sold its Media Vision retail trade names to a third party.
The Company is in default of its agreement dated December 23, 1994, with
AT&T, its long distance carrier. The Company is attempting to renegotiate
the terms of its agreement with AT&T. The Company is also in default of the
terms of its Replication and Bundling Agreement with Xxxxxxx'x NewMedia. The
Company believes it has
14
recorded adequate reserves for any potential liability it may have under the
AT&T and Xxxxxxx'x agreements in its 1995 financial statements.
SECTION 3.9. See Section 3.6.
SECTION 3.13. The Company has entered into a Registration Rights
Agreement dated December 30, 1994 (the "Rights Agreement"), with TCW Special
Credits, as agent and nominee for the entities set forth on Schedule I to
such agreement. The Rights Agreement was amended on February 21, 1996 (the
"Amendment Number 1"), to grant equal registration rights to the purchasers
of the Company's common stock set forth on EXHIBIT A to the Common Stock
Purchase Agreement dated February 21, 1996 by and among the Company and such
purchasers (the "Purchasers"), and those holders of warrants to purchase
shares of the Company's common stock set forth in Schedule A on the Amendment
Number 1.
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EXHIBIT C
AMENDMENT TO REGISTRATION RIGHTS AGREEMENT
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EXHIBIT D
FORM OF LEGAL OPINION
17
