CUSIP No. 051629103 Page 1 of 33 Pages
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(Amendment No. 3)
Under the Securities Exchange Act of 1934
Aurora Electronics, Inc.
_________________________________________________________________
(Name of Issuer)
Common Stock, $.03 par value
_________________________________________________________________
(Title of Class of Securities)
051629103
_________________________________________________________________
(CUSIP Number)
Welsh, Carson, Anderson William J. Hewitt, Esq.
& Stowe Reboul, MacMurray, Hewitt,
320 Park Avenue, Suite 2500 Maynard & Kristol
New York, New York 10022 45 Rockefeller Plaza
Attention: Laura VanBuren New York, New York 10111
Tel. (212) 893-9500 Tel. (212) 841-5700
_________________________________________________________________
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
August 14, 1997
___________________________________
(Date of Event Which Requires
Filing of This Statement)
If the filing person has previously filed a statement on Schedule
13G to report the acquisition which is the subject of this
Schedule 13D, and is filing this schedule because of Rule 13d-
1(b)(3) or (4), check the following box [ ].
<PAGE>
CUSIP No. 051629103 Page 2 of 33 Pages
1) Name of Reporting Person Welsh, Carson, Ander-
S.S. or I.R.S. Identification son & Stowe VII, L.P.
No. of Above Person
_______________________________________________________________
2) Check the Appropriate Box (a) [X]
if a Member of a Group (b) [ ]
_______________________________________________________________
3) SEC Use Only
_______________________________________________________________
4) Source of Funds OO
_______________________________________________________________
5) Check if Disclosure of
Legal Proceedings Is Not Applicable
Required Pursuant to
Items 2(d) or 2(e)
________________________________________________________________
6) Citizenship or Place
of Organization Delaware
_________________________________________________________________
Number of 7) Sole Voting 19,955,672 shares
Shares Beneficially Power of Common Stock
Owned by Each (issuable upon
Reporting Person: conversion of
convertible pre-
ferred stock and
exercise of
warrants)
________________________________________
8) Shared Voting
Power -0-
________________________________________
9) Sole Disposi- 19,955,672 shares
tive Power of Common Stock
(issuable upon
conversion of
convertible pre-
ferred stock and
exercise of
warrants)
________________________________________
10) Shared Dis-
positive Power -0-
________________________________________
<PAGE>
CUSIP No. 051629103 Page 3 of 33 Pages
11) Aggregate Amount Beneficially 19,955,672 shares
Owned by Each Reporting Person of Common Stock
(issuable upon
conversion of
convertible pre-
ferred stock and
exercise
of warrants)
________________________________________
12) Check if the Aggregate
Amount in Row (11)
Excludes Certain Shares
_________________________________________________________________
13) Percent of Class
Represented by 74.5%
Amount in Row (11)
_________________________________________________________________
14) Type of Reporting
Person PN
<PAGE>
CUSIP No. 051629103 Page 4 of 33 Pages
1) Name of Reporting Person WCAS Information
S.S. or I.R.S. Identification Partners, L.P.
No. of Above Person
_________________________________________________________________
2) Check the Appropriate Box (a) [X]
if a Member of a Group (b) [ ]
_________________________________________________________________
3) SEC Use Only
_________________________________________________________________
4) Source of Funds Not Applicable
_________________________________________________________________
5) Check if Disclosure of
Legal Proceedings Is Not Applicable
Required Pursuant to
Items 2(d) or 2(e)
_________________________________________________________________
6) Citizenship or Place
of Organization Delaware
_________________________________________________________________
Number of 7) Sole Voting 255,544 shares of
Shares Beneficially Power Common Stock
Owned by Each (issuable upon
Reporting Person: conversion of
convertible pre-
ferred stock)
________________________________________
8) Shared Voting
Power -0-
________________________________________
9) Sole Disposi- 255,544 shares of
tive Power Common Stock
(issuable upon
conversion of
convertible pre-
ferred stock)
________________________________________
10) Shared Dis-
positive Power -0-
________________________________________
<PAGE>
CUSIP No. 051629103 Page 5 of 33 Pages
11) Aggregate Amount Beneficially 255,544 shares of
Owned by Each Reporting Person Common Stock
(issuable upon
conversion of
convertible pre-
ferred stock
________________________________________________________________
12) Check if the Aggregate
Amount in Row (11)
Excludes Certain Shares
_________________________________________________________________
13) Percent of Class
Represented by 3.6%
Amount in Row (11)
_________________________________________________________________
14) Type of Reporting
Person PN
<PAGE>
CUSIP No. 051629103 Page 6 of 33 Pages
1) Name of Reporting Person WCAS Capital
S.S. or I.R.S. Identification Partners II, L.P.
No. of Above Person
_________________________________________________________________
2) Check the Appropriate Box (a) [X]
if a Member of a Group (b) [ ]
_________________________________________________________________
3) SEC Use Only
_________________________________________________________________
4) Source of Funds OO
_________________________________________________________________
5) Check if Disclosure of
Legal Proceedings Is Not Applicable
Required Pursuant to
Items 2(d) or 2(e)
_________________________________________________________________
6) Citizenship or Place
of Organization Delaware
_________________________________________________________________
Number of 7) Sole Voting 649,789 shares of
Shares Beneficially Power Common Stock
Owned by Each (including shares
Reporting Person: issuable upon
exercise of
warrants)
________________________________________
8) Shared Voting
Power -0-
________________________________________
9) Sole Disposi- 649,789 shares of
tive Power Common Stock
(including shares
issuable upon
exercise of
warrants)
________________________________________
10) Shared Dis-
positive Power -0-
________________________________________
<PAGE>
CUSIP No. 051629103 Page 7 of 33 Pages
11) Aggregate Amount Beneficially 649,789 shares of
Owned by Each Reporting Person Common Stock
(including shares
issuable upon
exercise of
warrants)
_________________________________________________________________
12) Check if the Aggregate
Amount in Row (11)
Excludes Certain Shares
_________________________________________________________________
13) Percent of Class
Represented by 9.4%
Amount in Row (11)
_________________________________________________________________
14) Type of Reporting
Person PN
<PAGE>
CUSIP No. 051629103 Page 8 of 33 Pages
Amendment No. 3 to Schedule 13D
Reference is hereby made to the statement on Schedule
13D originally filed with the Securities and Exchange Commission
on April 12, 1996, Amendment No. 1 thereto filed on October 16,
1996 and Amendment No. 2 thereto filed on July 9, 1997 (as so
amended, the "Schedule 13D").
The Schedule 13D is hereby amended as follows:
Item 3. Source and Amount of Funds and Other Consideration.
__________________________________________________
Item 3 is hereby amended by adding the following
thereto:
WCAS VII, WCAS IP and the individual general partners
of the respective sole general partners thereof purchased an
aggregate 25,000 shares of Series B Convertible Preferred Stock,
$.01 par value ("Series B Preferred Stock"), from the Issuer
pursuant to a Series B Preferred Stock Purchase Agreement dated
as of August 14, 1997 among the Issuer, WCAS II, WCAS IP and the
additional purchasers named therein (the "Series B Purchase
Agreement"). The Series B Purchase Agreement is attached hereto
as Exhibit A, and any description thereof is qualified in its
entirety by reference thereto. The purchase price was $100 per
share. The Series B Preferred Stock is convertible into Common
Stock at a conversion price of $1.60 per share, according to the
following formula: the number of shares of Series B Preferred
Stock is multiplied by $100 and then divided by $1.60 to arrive
at the equivalent number of shares of Common Stock. The source
of funds for such purchase by WCAS VII and WCAS IP was their
respective working capital available for investment.
Item 5. Interest in Securities of the Issuer.
____________________________________
Item 5 is hereby amended and restated in its entirety
as follows:
The following information is based on a total of
6,847,563 shares of Common Stock outstanding as of August 14,
1997, and gives effect to the conversion of all shares of
Convertible Preferred Stock and Series B Preferred Stock and the
exercise of all presently-exercisable Warrants held by the
Reporting Persons and the individuals named below:
22
(a)
WCAS VII and VII Partners
CUSIP No. 051629103 Page 9 of 33 Pages
_________________________
WCAS VII owns 19,955,672 shares of Common Stock
(issuable upon conversion of 366,800 shares of Convertible
Preferred Stock and 23,757 shares of Series B Preferred Stock and
exercise of Warrants to purchase 1,209,684 shares of Common
Stock), or approximately 74.5% of the Common Stock outstanding.
VII Partners, as the general partner of WCAS VII, may be deemed
to beneficially own the securities owned by WCAS VII.
WCAS CP II and CP II Partners
_____________________________
WCAS CP II owns 649,789 shares of Common Stock
(including 42,578 shares issuable upon exercise of
Warrants), or approximately 9.4% of the Common Stock
outstanding. CP II Partners, as the general partner of WCAS
CP II, may be deemed to beneficially own the securities
owned by WCAS CP II.
WCAS IP and INFO Partners
_________________________
WCAS IP owns 255,544 shares of Common Stock (issuable
upon conversion of 5,000 shares of Convertible Preferred
Stock and 324 shares of Series B Preferred Stock), or
approximately 3.6% of the Common Stock outstanding. INFO
Partners, as the general partner of WCAS IP, may be deemed
to beneficially own the securities owned by WCAS IP.
General Partners of VI Partners, CP II Partners and
INFO Partners
___________________________________________________
(i) Patrick J. Welsh owns 102,243 shares of Common
Stock (issuable upon conversion of 2,000 shares of
Convertible Preferred Stock and 130 shares of Series B
Preferred Stock), or approximately 1.5% of the Common Stock
outstanding.
(ii) Russell L. Carson owns 153,302 shares of Common
Stock (issuable upon conversion of 3,000 shares of
Convertible Preferred Stock and 194 shares of Series B
Preferred Stock), or approximately 2.2% of the Common Stock
outstanding.
(iii) Bruce K. Anderson owns 153,302 shares of Common
Stock (issuable upon conversion of 3,000 shares of
Convertible Preferred Stock and 194 shares of Series B
Preferred Stock), or approximately 2.2% of the Common Stock
outstanding.
<PAGE>
CUSIP No. 051629103 Page 10 of 33 Pages
(iv) Richard H. Stowe owns 76,650 shares of Common
Stock (issuable upon conversion of 1,500 shares of
Convertible Preferred Stock and 97 shares of Series B
Preferred Stock), or approximately 1.1% of the Common Stock
outstanding.
(v) Andrew M. Paul owns 51,121 shares of Common Stock
(issuable upon conversion of 1,000 shares of Convertible
Preferred Stock and 65 shares of Series B Preferred Stock),
or approximately 0.7% of the Common Stock outstanding.
(vi) Thomas E. McInerney owns 89,415 shares of Common
Stock (issuable upon conversion of 1,750 shares of
Convertible Preferred Stock and 113 shares of Series B
Preferred Stock), or approximately 1.3% of the Common Stock
outstanding.
(vii) Laura VanBuren owns 5,081 shares of Common Stock
(issuable upon conversion of 100 shares of Convertible
Preferred Stock and 6 shares of Series B Preferred Stock),
or less than 0.1% of the Common Stock outstanding.
(vii) James B. Hoover owns 25,529 shares of Common
Stock (issuable upon conversion of 500 shares of Convertible
Preferred Stock and 32 shares of Series B Preferred Stock),
or approximately 0.4% of the Common Stock outstanding.
(ix) Robert A. Minicucci owns 40,897 shares of Common
Stock (issuable upon conversion of 800 shares of Convertible
Preferred Stock and 52 shares of Series B Preferred Stock),
or approximately 0.6% of the Common Stock outstanding.
(x) Anthony J. deNicola owns 20,449 shares of Common
Stock (issuable upon conversion of 400 shares of Convertible
Preferred Stock and 26 shares of Series B Preferred Stock),
or approximately 0.3% of the Common Stock outstanding.
(xi) Paul B. Queally owns 7,684 shares of Common
Stock (issuable upon conversion of 150 shares of Convertible
Preferred Stock and 10 shares of Series B Preferred Stock),
or approximately 0.1% of the Common Stock outstanding.
(b) The general partners of each of VII Partners, CP
II Partners and INFO Partners may be deemed to share the power to
vote or direct the voting of and to dispose or direct the
disposition of the shares owned by WCAS VII, WCAS CP II and WCAS
IP, respectively. Each of the general partners of VII Partners,
CP II Partners and INFO Partners disclaims beneficial ownership
of all shares other than the shares he or she owns directly or by
virtue of his or her indirect pro rata interest, as a partner of
<PAGE>
CUSIP No. 051629103 Page 11 of 33 Pages
VII Partners, CP II Partners and/or INFO Partners, as the case
may be, in the shares owned by WCAS VII, WCAS CP II and/or WCAS
IP.
(c) Except as described in this statement, none of the
entities or persons named in Item 2 has effected any transaction
in the Issuer's securities since the most recent filing on CUSIP
No. 051629103 Page 11 of 33 Pages
Schedule 13D.
(d) Except as described in this statement, no person
has the power to direct the receipt of dividends on or the
proceeds of sales of the shares owned by WCAS VII, WCAS CP II or
WCAS IP.
Item 6. Contracts, Arrangements, Understandings or
Relationships with Respect to Securities
of the Issuer.
__________________________________________
Item 6 is hereby amended by adding the following
thereto:
Pursuant to the Series B Purchase Agreement, the Issuer
affirmed and agreed that the registration rights granted to the
Reporting Persons as set forth in the Registration Rights
Agreement dated as of March 29, 1996 entered into in connection
with the Purchase Agreement dated as of March 29, 1996 (the
"Registration Rights Agreement") shall continue in full force and
effect and that the terms "Convertible Preferred Stock" and
"Preferred Shares", as defined in the Registration Rights
Agreement, shall be deemed to refer to and include, respectively,
the "Series B Preferred Stock" and "Series B Preferred Shares",
as such terms are defined in the Series B Purchase Agreement.
Item 7. Material to Be Filed as Exhibits.
________________________________
Exhibit A - Series B Purchase Agreement (Appears at
Page 13)
<PAGE>
CUSIP No. 051629103 Page 12 of 33 Pages
Signature
_________
After reasonable inquiry and to the best of my
knowledge and belief, I certify that the information set forth in
this statement is true, complete and correct.
Dated: August 28, 1997
WELSH, CARSON, ANDERSON &
STOWE VII, L.P.
By: WCAS VII Partners, L.P.,
General Partner
By: /s/ Laura VanBuren
General Partner
WCAS INFORMATION PARTNERS,
L.P.
By: WCAS INFO Partners,
General Partner
By: /s/ Laura VanBuren
Attorney-in-Fact
WCAS CAPITAL PARTNERS II, L.P.
By: WCAS CP II Partners,
General Partner
By: /s/ Laura VanBuren
General Partner
<PAGE>
CUSIP No. 051629103 Page 13 of 33 Pages
EXHIBIT A
_________
EXECUTION COPY
______________
_________________________________________________________________
_________________________________________________________________
SERIES B CONVERTIBLE PREFERRED STOCK
PURCHASE AGREEMENT
Among
AURORA ELECTRONICS, INC.
WELSH, CARSON, ANDERSON & STOWE VII, L.P.
and
The Several Other Persons Named
In Schedule I Hereto
Dated as of August 14, 1997
_________________________________________________________________
_________________________________________________________________
<PAGE>
CUSIP No. 051629103 Page 14 of 33 Pages
TABLE OF CONTENTS
Page
____
I. PURCHASE AND SALE OF THE SERIES B PREFERRED SHARES. . . . 1
SECTION 1.01. Issuance and Sale of the Series B
Preferred Shares . . . . . . . . . . . . . 1
SECTION 1.02. Closing Date . . . . . . . . . . . . . . . 2
II. REPRESENTATIONS AND WARRANTIES OF THE COMPANY . . . . . . 2
SECTION 2.01. Organization and Qualification . . . . . . 2
SECTION 2.02. Subsidiaries . . . . . . . . . . . . . . . 2
SECTION 2.03. Capitalization . . . . . . . . . . . . . . 3
SECTION 2.04. Authorization of Agreements, Etc.. . . . . 4
SECTION 2.05. Validity . . . . . . . . . . . . . . . . . 5
SECTION 2.06. Governmental Approvals . . . . . . . . . . 5
SECTION 2.07. Financial Statements, Etc. . . . . . . . . 5
SECTION 2.08. SEC Filings. . . . . . . . . . . . . . . . 6
SECTION 2.09. Absence of Certain Changes or Events . . . 7
SECTION 2.10. Actions Pending. . . . . . . . . . . . . . 7
SECTION 2.11. Compliance with Law. . . . . . . . . . . . 8
SECTION 2.12. Offering of the Securities . . . . . . . . 8
SECTION 2.13. Brokers. . . . . . . . . . . . . . . . . . 8
III. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS. . . . . 9
SECTION 3.01. Authorization. . . . . . . . . . . . . . . 9
SECTION 3.02. Validity . . . . . . . . . . . . . . . . . 9
SECTION 3.03. Investment Representations . . . . . . . . 9
SECTION 3.04. Government Approvals . . . . . . . . . . . 10
IV. CONDITIONS PRECEDENT. . . . . . . . . . . . . . . . . . . 10
SECTION 4.01. Conditions Precedent to the Obligations
of the Purchasers. . . . . . . . . . . . . 10
SECTION 4.02. Condition Precedent to the Obligations
of the Company . . . . . . . . . . . . . . 12
V. SURVIVAL OF REPRESENTATIONS; INDEMNITY. . . . . . . . . . 12
SECTION 5.01. Survival of Representations. . . . . . . . 12
SECTION 5.02. General Indemnity. . . . . . . . . . . . . 12
SECTION 5.03. Conditions of Indemnification. . . . . . . 13
VI.CERTAIN REGISTRATION RIGHTS . . . . . . . . . . . . . . . 14
VII.MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . 14
<PAGE>
CUSIP No. 051629103 Page 15 of 33 Pages
SECTION 7.01. Expenses, Etc. . . . . . . . . . . . . . . 14
SECTION 7.02. Survival of Agreements . . . . . . . . . . 14
SECTION 7.03. Parties in Interest. . . . . . . . . . . . 14
SECTION 7.04. Notices. . . . . . . . . . . . . . . . . . 15
SECTION 7.05. Entire Agreement; Assignment . . . . . . . 16
SECTION 7.06. Counterparts . . . . . . . . . . . . . . . 16
SECTION 7.07. Governing Law. . . . . . . . . . . . . . . 16
INDEX TO EXHIBITS, SCHEDULES AND ANNEX
Exhibit Description
_______ ___________
A Form of Certificate of Designations
Schedule Description
________ ___________
I Purchasers and Securities
<PAGE>
CUSIP No. 051629103 Page 16 of 33 Pages
SERIES B CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
dated as of August 14, 1997, among AURORA ELECTRONICS, INC., a
Delaware corporation (the "Company"), WELSH, CARSON, ANDERSON &
STOWE VII, L.P., a Delaware limited partnership ("WCAS VII") and
the several other persons named in Schedule I hereto (such
persons, together with WCAS VII, being hereinafter called
individually a "Purchaser" and collectively the "Purchasers").
WHEREAS, the Company desires to sell to the Purchasers,
and the Purchasers desire to purchase from the Company, on the
terms and subject to the conditions set forth herein, an
aggregate 25,000 shares of Series B Convertible Preferred Stock,
$.01 par value ("Series B Preferred Stock"), of the Company at a
purchase price of $100 per share; and
WHEREAS, in order to induce the Purchasers to
consummate the transactions contemplated by this Agreement, the
Company has agreed to grant to the Purchasers certain
registration rights with respect to the shares of Common Stock,
$.03 par value ("Common Stock"), of the Company that will be
issuable upon the conversion of the Series B Preferred Stock
being purchased hereunder;
NOW, THEREFORE, in consideration of the premises and
the mutual covenants herein contained, the parties hereto agree
as follows:
I.
PURCHASE AND SALE OF
THE SERIES B PREFERRED SHARES
SECTION 1.01. Issuance and Sale of the Series B
Preferred Shares.
__________________________________________________________
(a) Subject to the terms and conditions set forth
herein, on the Closing Date (as hereinafter defined) the Company
shall issue, sell and deliver to each Purchaser, and each
Purchaser shall purchase from the Company, the number of shares
of Series B Preferred Stock set forth opposite the name of such
Purchaser on Schedule I hereto under the caption "Series B
Preferred Shares" (the aggregate number of shares of Series B
Preferred so purchased are referred to herein as the "Series B
Preferred Shares"), for a purchase price of $100 per share. On
the Closing Date, the Company shall issue a certificate or
certificates in definitive form, registered in the name of each
Purchaser, representing the number of Series B Preferred Shares
being purchased by it hereunder.
<PAGE>
CUSIP No. 051629103 Page 17 of 33 Pages
(b) As payment in full for the Series B Preferred
Shares being purchased by it hereunder, and against delivery of
the certificate or certificates therefor as aforesaid, on the
Closing Date each Purchaser shall transfer immediately available
funds by wire transfer to an account designated by the Company,
an amount equal to $100 multiplied by the number of Series B
Preferred Shares to be purchased by such Purchaser in accordance
with paragraph (a) above.
SECTION 1.02. CLOSING DATE. The transfer, sale and
delivery of the Series B Preferred Shares (the "Closing") shall
take place at the offices of Reboul, MacMurray, Hewitt, Maynard &
Kristol, 45 Rockefeller Plaza, New York, New York, on August 14,
1997 (such date and time of the Closing being herein called the
"Closing Date").
II.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Purchasers
as follows:
SECTION 2.01. ORGANIZATION AND QUALIFICATION. The
Company is a corporation validly existing and in good standing
under the laws of the State of Delaware and has all requisite
corporate power and authority to own or lease and operate its
properties and assets and to carry on its business as it is now
being conducted. The Company is duly qualified as a foreign
corporation to do business, and is in good standing, in each
jurisdiction in which the character of its properties owned or
leased or the nature of its activities makes such qualification
necessary, except where the failure to be so qualified would not
have a material adverse effect on the properties, assets, finan-
cial condition, prospects, operating results or business of the
Company and its subsidiaries, taken as a whole (a "Material
Adverse Effect").
SECTION 2.02. SUBSIDIARIES. (a) Except as set forth
on Schedule 2.02 hereto, neither the Company nor any of its
subsidiaries owns of record or beneficially, directly or indi-
rectly, (i) any shares of outstanding capital stock or securities
convertible into capital stock of any other corporation or (ii)
any participating interest in any partnership, joint venture or
other non-corporate business enterprise. Each subsidiary of the
Company is a corporation validly existing and in good standing
under the laws of its jurisdiction of incorporation and has all
requisite corporate power and authority to own or lease and
operate its properties and assets and to carry on its business as
<PAGE>
CUSIP No. 051629103 Page 18 of 33 Pages
it is now being conducted. Each subsidiary of the Company is
duly qualified as a foreign corporation to do business, and is in
good standing, in each jurisdiction in which the character of its
properties owned or leased or the nature of its activities makes
such qualification necessary, except where the failure to be so
qualified would not have a Material Adverse Effect. All the
outstanding shares of capital stock of the Company's subsidiaries
are duly authorized, validly issued, fully paid and nonassessable
and, except as set forth on Schedule 2.02, are owned by the
Company or by a wholly-owned subsidiary of the Company, free and
clear of any liens, claims, charges, restrictions, rights of
others, security interests, prior assignments or other encum-
brances (collectively, "Claims"), and there are no proxies,
voting or transfer agreements or understandings outstanding with
respect to any such shares.
(b) Schedule 2.02 includes a complete and accurate
list of each subsidiary of the Company, indicating the jurisdic-
tion of incorporation, each jurisdiction in which such subsidiary
is qualified as a foreign corporation, its capital structure (in-
cluding all authorized and outstanding shares), and the nature
and level of ownership in such subsidiary by the Company, any
subsidiary of the Company and any other person (for purposes of
this Agreement, "person" shall mean and include an individual, a
partnership, a joint venture, a corporation, a trust, or an
unincorporated organization). Complete and correct copies of the
Certificate of Incorporation and By-laws of the Company and of
each subsidiary of the Company have previously been delivered to
the Purchasers.
(c) For purposes of this Agreement, the term
"subsidiary", when used with respect to the Company, shall mean
any corporation or other business entity, a majority of whose
outstanding equity securities is at the time owned, directly or
indirectly, by the Company and/or one or more other subsidiaries
of the Company.
SECTION 2.03. CAPITALIZATION.
(a) The authorized capital stock of the Company
consists of (i) 50,000,000 shares of Common Stock and (ii)
1,000,000 shares of Preferred Stock, $.01 par value ("Preferred
Stock"), of the Company of which 400,000 shares have been
designated Convertible Preferred Stock. As of the date hereof,
6,847,563 shares of Common Stock and 400,000 shares of
Convertible Preferred Stock are issued and outstanding, all of
which were duly authorized and validly issued and are fully paid
and nonassessable.
(b) Upon the filing with the Secretary of State of the
<PAGE>
CUSIP No. 051629103 Page 19 of 33 Pages
State of Delaware of a Certificate of Designations of the Company
in the form attached hereto as Exhibit A (the "Certificate of
Designations"), 25,000 shares of Preferred Stock shall
bedesignated as authorized Series B Preferred Stock.
(c) Except as set forth in the Company SEC Filings or
on Schedule 2.03 hereof, as of the date hereof, no subscription,
warrant, option, convertible security, stock appreciation or
other right (contingent or other) to purchase or acquire any
shares of any class of capital stock of the Company or any of its
subsidiaries is authorized or outstanding and (except as
otherwise expressly contemplated by this Agreement) there is not
any commitment of the Company or any of its subsidiaries to issue
any shares, warrants, options or other such rights or to
distribute to holders of any class of its capital stock any
evidences of indebtedness or assets. Schedule 2.03 sets forth a
complete and correct list of the number of warrants or options,
including a listing of the vesting schedules thereof, held by
each person with respect to the outstanding capital stock of the
Company.
(d) Except as set forth on Schedule 2.03, neither the
Company nor any of its subsidiaries has any obligation
(contingent or other) to purchase, redeem or otherwise acquire
any shares of its capital stock or any interest therein or to pay
any dividend or make any other distribution in respect thereof.
SECTION 2.04. AUTHORIZATION OF AGREEMENTS, ETC. (a)
Each of (i) the execution and delivery by the Company of this
Agreement, (ii) the performance by the Company of its obligations
hereunder, (iii) the issuance, sale and delivery by the Company
of the Series B Preferred Shares, and (iv) the issuance and
delivery of the shares of Common Stock issuable upon the
conversion of the Series B Preferred Shares (collectively, the
"Conversion Shares") 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 Certificate
of Incorporation or By-laws of the Company, or any provision of
any indenture, agreement or other instrument to which the Company
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
Claim in favor of any third person upon any of the assets of the
Company or any of its subsidiaries.
(b) The Series B Preferred Shares have been duly
authorized by the Company and, when sold and paid for in
accordance with this Agreement, will be validly issued, fully
paid and nonassessable shares of Series B Preferred Stock. The
<PAGE>
CUSIP No. 051629103 Page 20 of 33
PagesConversion Shares, when issued and delivered upon the
conversion of the Series B Preferred Shares, will be duly
authorized, validly issued, fully paid and nonassessable shares
of Common Stock. Neither the issuance, sale and delivery of the
Series B Preferred Shares to the Purchasers hereunder, nor the
issuance and delivery of the Conversion Shares, is subject to any
preemptive rights of stockholders of the Company or to any right
of first refusal or other similar right in favor of any person.
SECTION 2.05. VALIDITY. This Agreement has been duly
executed and delivered by the Company and constitutes the legal,
valid and binding obligation of the Company, enforceable against
the Company in accordance with its terms.
SECTION 2.06. GOVERNMENTAL APPROVALS. Subject to the
accuracy of the representations and warranties of the Purchasers
set forth in Article III hereof, no registration or filing with,
or consent or approval of, or other action by, any Federal, state
or other governmental agency or instrumentality is or will be
necessary for the valid execution, delivery and performance of
this Agreement, the issuance, sale and delivery of the Series B
Preferred Shares or the issuance and delivery of the Conversion
Shares upon the conversion of the Series B Preferred Shares,
other than (i) the filing of the Certificate of Designations with
the Secretary of State of the State of Delaware in accordance
with the Delaware General Corporation Law (the "Delaware GCL")
with respect to the designation of the Series B Preferred Stock,
and (ii) such filings with and approvals of the Securities and
Exchange Commission ("SEC") or any state securities commission or
similar regulatory body as may be necessary in connection with
the commencement or consummation of the transactions contemplated
herein.
SECTION 2.07. FINANCIAL STATEMENTS, ETC. (a) The
Company has furnished to the Purchasers: (i) the audited
consolidated balance sheet of the Company and its subsidiaries as
of September 30, 1996 and the related consolidated statements of
operations, stockholders' equity and cash flows for the fiscal
year then ended certified by Arthur Anderson LLP, the independent
certified public accountants retained by the Company, and (ii)
the unaudited consolidated balance sheet of the Company and its
subsidiaries as of June 30, 1997 and the related consolidated
statements of operations and cash flows for the nine months then
ended, certified by the principal financial officer of the
Company. All such financial statements (including any related
schedules and/or notes) have been prepared in accordance with
generally accepted accounting principles in the United States
("GAAP") consistently applied and consistent with prior periods,
(i) except that such interim statements are subject to year-end
and audit adjustments (which consist of normal recurring
<PAGE>
CUSIP No. 051629103 Page 21 of 33 Pages
accruals) and do not contain certain footnote disclosures, and
(ii) except as otherwise disclosed in such financial statements
or in the Company SEC Filings (as defined below). Such balance
sheets fairly present in all material respects the financial
position of the Company and its subsidiaries as of their respec-
tive dates, and such statements of operations, stockholders'
equity and cash flows fairly present in all material respects the
results of operations of the Company and its subsidiaries for the
respective periods then ended, subject, in the case of unaudited
financial statements, to normal year-end and audit adjustments
and the absence of certain footnote disclosures.
(b) Except as and to the extent (i) reflected on the
consolidated balance sheet of the Company and its subsidiaries as
of September 30, 1996 (the "September 30, 1996 Balance Sheet"),
(ii) incurred since September 30, 1996 in the ordinary course of
business consistent with past practice, or (iii) set forth on
Schedule 2.07 hereto, neither the Company nor any of its
subsidiaries has any material liabilities or obligations of any
kind or nature, whether known or unknown, secured or unsecured,
absolute, accrued, contingent or otherwise, and whether due or to
become due, that would be required to be reflected on a balance
sheet, or the notes thereto, prepared in accordance with GAAP.
Since September 30, 1996, neither the Company nor any of its
subsidiaries has suffered any Material Adverse Effect.
SECTION 2.08. SEC FILINGS. The Company has filed all
forms, reports and documents required to be filed with the SEC
since September 30, 1992, and the Company has made available to
the Purchasers, as filed with the SEC, complete and accurate
copies of (i) the Annual Report of the Company on Form 10-K for
the year ended September 30, 1996, and (ii) all other reports,
statements and registration statements (including Current Reports
on Form 8-K) filed by the Company with the SEC since September
30, 1992, in each case including all amendments and supplements
(collectively, the "Company SEC Filings"). The Company SEC
Filings (including, without limitation, any financial statements
or schedules included therein) (i) were prepared in compliance
with the requirements of the Securities Act of 1933, as amended
(the "Securities Act"), or the Exchange Act, and the rules and
regulations thereunder, as the case may be, and (ii) did not at
the time of filing (or if amended, supplemented or superseded by
a filing prior to the date hereof, on the date of that filing)
contain any untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circum-
stances under which they were made, not misleading.
SECTION 2.09. ABSENCE OF CERTAIN CHANGES OR EVENTS.
Except as set forth on Schedule 2.09 hereto or as otherwise
<PAGE>
CUSIP No. 051629103 Page 22 of 33 Pages
disclosed in the Company SEC Filings or the financial statements
of the Company and its subsidiaries as of and for the nine months
ended June 30, 1997 referred to above, and except as otherwise
expressly contemplated by this Agreement, since September 30,
1996, neither the Company nor any of its subsidiaries has (i) is-
sued any stock, bonds or other corporate securities;
(ii) borrowed or refinanced any amount or incurred any material
liabilities (absolute or contingent), other than revolving credit
facility borrowings and trade payables incurred in the ordinary
course of business consistent with past practice; (iii)
discharged or satisfied any material Claim or incurred or paid
any obligation or liability (absolute or contingent) other than
current liabilities shown on the September 30, 1996 Balance Sheet
and current liabilities incurred since the date of such balance
sheet in the ordinary course of business consistent with past
practice; (iv) declared or made any payment or distribution to
stockholders, or purchased or redeemed any shares of its capital
stock or other securities; (v) mortgaged, pledged or subjected to
lien any of its assets, tangible or intangible, other than liens
for current real property taxes not yet due and payable; (vi)
sold, assigned or transferred any of its tangible assets, or can-
celled any debts or Claims, except in the ordinary course of
business consistent with past practice; (vii) sold, assigned or
transferred any patents, trademarks and trade names, trademark
and trade name registrations, servicemark, brandmark and brand
name registrations and copyrights, the applications therefor and
the licenses with respect thereto or other intangible assets;
(viii) waived any rights of substantial value, whether or not in
the ordinary course of business; (ix) made any material increase
in the compensation (including, without limitation, the rate of
commissions) payable to, or any payment of a material cash bonus
to any director, officer, employee of, or consultant or agent to,
the Company or any of its subsidiaries or any other material
change in the terms or conditions of any employment relationship;
(x) announced any plan or legally binding commitment to create
any employee benefit plan, program or arrangement or to amend or
modify in any material respect any existing employee benefit
plan, program or arrangement; (xi) eliminated the vesting
conditions or otherwise accelerated the payment of any
compensation, including any stock options; or (xii) except in
connection with this Agreement and the transactions contemplated
hereby, entered into any agreement, letter of intent or similar
undertaking to take any of the actions listed in clauses (i)
through (xi) above.
SECTION 2.10. ACTIONS PENDING. Except (i) for any
actions, suits, investigations or proceedings which individually
do not involve claims against the Company or any of its
subsidiaries for more than $25,000, (ii) as set forth on Schedule
2.10 hereto, or (iii) as set forth in the Company SEC Filings,
<PAGE>
CUSIP No. 051629103 Page 23 of 33 Page
there is no action, suit, investigation or proceeding pending or,
to the best knowledge of the Company, threatened against or
affecting the Company, or any of its properties or rights, before
any court or by or before any governmental body or arbitration
board or tribunal. Except as set forth on Schedule 2.10 hereto,
there is no judgment, decree, injunction or order of any court,
governmental department, commission, agency, instrumentality or
arbitrator outstanding against the Company.
SECTION 2.11. COMPLIANCE WITH LAW. Neither the
Company nor any of its subsidiaries is in default in any respect
under any order or decree of any court, governmental authority,
arbitrator or arbitration board or tribunal or under any laws,
ordinances, governmental rules or regulations to which the Compa-
ny or any of such subsidiaries or any of their respective proper-
ties or assets is subject, except where such default would not
have a Material Adverse Effect.
SECTION 2.12. OFFERING OF THE SECURITIES. Neither the
Company nor any person authorized or employed by the Company as
agent, broker, dealer or otherwise in connection with the
offering or sale of the Series B Preferred Shares or any similar
securities of the Company has offered any such securities for
sale to, or solicited any offers to buy any such securities from,
or otherwise approached or negotiated with respect thereto with,
any person or persons, under circumstances that involved the use
of any form of general advertising or solicitation as such terms
are defined in Regulation D of the Securities Act; and, assuming
the accuracy of the representations and warranties of the
Purchasers set forth in Article III hereof, neither the Company
nor any person acting on the Company's behalf has taken or will
take any action (including, without limitation, any offer,
issuance or sale of any securities of the Company under
circumstances which might require the integration of such
transactions with the sale of the Series B Preferred Shares under
the Securities Act or the rules and regulations of the SEC
thereunder) which would subject the offering, issuance or sale of
the Series B Preferred Shares to the Purchasers to the
registration provisions of the Securities Act.
SECTION 2.13. BROKERS. All negotiations relative to
this Agreement and the transactions contemplated hereby have been
carried on by the Company directly with the Purchasers, without
the intervention of any other person on behalf of the Company in
such manner as to give rise to any valid claim by any other
person against the Purchasers for a finder's fee, brokerage
commission or similar payment.
<PAGE>
CUSIP No. 051629103 Page 24 of 33 Page
III.
REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS
Each Purchaser, severally and not jointly, represents
and warrants to the Company as follows:
SECTION 3.01. AUTHORIZATION. The execution, delivery
and performance by such Purchaser of this Agreement and the
purchase and receipt by such Purchaser of the Series B Preferred
Shares being acquired by it hereunder, have been duly authorized
by all requisite action on the part of such Purchaser, and will
not violate any provision of law, any order of any court or other
agency of government, the charter or other governing documents of
such Purchaser, or any provision of any indenture, agreement or
other instrument by which such Purchaser or any of such
Purchaser's properties or assets are 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 any Claim upon any of the
properties or assets of such Purchaser.
SECTION 3.02. VALIDITY. This Agreement has been duly
executed and delivered by such Purchaser and constitutes the
legal, valid and binding obligation of such Purchaser,
enforceable against such Purchaser in accordance with its terms.
SECTION 3.03. Investment Representations.
__________________________
(a) Such Purchaser is acquiring the Series B Preferred
Shares being purchased by such Purchaser hereunder for such
Purchaser's own account, for investment, and not with a view
toward the resale or distribution thereof.
(b) Such Purchaser understands that he, she or it, as
the case may be, must bear the economic risk of such Purchaser's
investment for an indefinite period of time because the Series B
Preferred Shares are not registered under the Securities Act or
any applicable state securities laws, and may not be resold
unless subsequently registered under the Securities Act and such
other laws or unless an exemption from such registration is
available. Such Purchaser also understands that, except as
provided in the Registration Rights Agreement (as defined below),
as amended herein, it is not contemplated that any registration
will be made under the Securities Act or that the Company will
take steps which will make the provisions of Rule 144 under the
Securities Act available to permit resale of the Series B
Preferred Shares.
<PAGE>
CUSIP No. 051629103 Page 25 of 33 Page
(c) Such Purchaser is able to fend for itself in the
transactions contemplated by this Agreement and such Purchaser
has the ability to bear the economic risks of the investment in
the Series B Preferred Shares being purchased hereunder for an
indefinite period of time. Such Purchaser further acknowledges
that he, she or it, as the case may be, has received copies of
the Company SEC Filings and has had the opportunity to ask
questions of, and receive answers from, officers of the Company
with respect to the business and financial condition of the
Company and the terms and conditions of the offering of the
Series B Preferred Shares and to obtain additional information
necessary to verify such information or can acquire it without
unreasonable effort or expense.
(d) Such Purchaser has such knowledge and experience
in financial and business matters that such Purchaser is capable
of evaluating the merits and risks of its investment in the
Series B Preferred Shares. Such Purchaser further represents
that he, she or it, as the case may be, is an "accredited
investor" as such term is defined in Rule 501 of Regulation D of
the SEC under the Securities Act with respect to its purchase of
the Series B Preferred Shares, and that any such Purchaser that
is a limited partnership has not been formed solely for the
purpose of purchasing the Series B Preferred Shares.
(e) If such Purchaser is a limited partnership, such
Purchaser represents that it has been organized and is existing
as a limited partnership under the laws of the State of Delaware.
SECTION 3.04. GOVERNMENTAL APPROVALS. No registration
or filing with, or consent or approval of, or other action by,
any Federal, state or other governmental agency or
instrumentality is or will be necessary by such Purchaser for the
valid execution, delivery and performance of this Agreement.
IV.
CONDITIONS PRECEDENT
SECTION 4.01. CONDITIONS PRECEDENT TO THE OBLIGATIONS
OF THE PURCHASERS. The obligations of the Purchasers hereunder
are, at their option, subject to the satisfaction, on or before
the Closing Date, of the following conditions:
(a) CERTIFICATE OF DESIGNATIONS. The Certificate of
Designations shall have been duly filed with the Secretary of
State of the State of Delaware and shall have become legally
effective.<PAGE>
CUSIP No. 051629103 Page 26 of 33 Page
(b) OPINION OF COUNSEL. The Purchasers shall have received
from Hughes & Luce L.L.P., counsel for the Company, an opinion
dated the Closing Date, satisfactory in form and substance to the
Purchasers and their counsel.
(c) ALL PROCEEDINGS TO BE SATISFACTORY. All corporate
and other proceedings to be taken by the Company and all waivers
and consents to be obtained by the Company in connection with the
transactions contemplated hereby shall have been taken or
obtained by the Company and all documents incident thereto shall
be satisfactory in form and substance to the Purchasers and their
counsel.
(d) SUPPORTING DOCUMENTS. On or prior to the Closing
Date the Purchasers and their counsel shall have received copies
of the following supporting documents:
(i) copies of (1) the Certificate of Incorporation of
the Company and the charter documents of each of its
subsidiaries, including all amendments thereto, certified as
of a recent date by the Secretary of State or the appropri-
ate official of the relevant state of incorporation,
(2) certificates of said Secretary or official, dated as of
a recent date, as to the due incorporation and good standing
of the Company and each such subsidiary, and listing all
documents on file with said official, and (3) a telegram or
facsimile from said Secretary or official as of the close of
business on the next business day preceding the Closing Date
as to the continued due incorporation and good standing of
the Company and each such subsidiary and to the effect that
no amendment to the respective charter documents of such
corporations has been filed since the date of the certifi-
cate referred to in clause (2) above; and
(ii) a certificate of the Secretary or an Assistant
Secretary of the Company, dated the Closing Date and
certifying (1) that attached thereto is a true and complete
copy of the By-laws of the Company as in effect on the date
of such certification and at all times since May 20, 1993;
(2) that attached thereto is a true and complete copy of
resolutions adopted by the Board of Directors of the Company
authorizing the execution, delivery and performance of this
Agreement, the designation, issuance, sale and delivery of
the Series B Preferred Shares, the reservation, issuance and
delivery of the Conversion Shares and that all such
resolutions are still in full force and effect and are all
the resolutions adopted in connection with the transactions
contemplated by this Agreement; (3) that the Certificate of
Incorporation of the Company has not been amended since the
date of the last amendment referred to in the certificate
<PAGE>
CUSIP No. 051629103 Page 27 of 33 Pages
delivered pursuant to clause (i)(2) above; and (4) as to the
incumbency and specimen signature of each officer of the Company
executing this Agreement, the stock certificates representing the
Series B Preferred Shares and any certificate or instrument fur-
nished pursuant hereto, and a certification by another officer of
said corporation as to the incumbency and signature of the
officer signing the certificate referred to in this paragraph
(ii).
All such documents shall be satisfactory in form and
substance to the Purchasers and their counsel.
SECTION 4.02. CONDITION PRECEDENT TO THE OBLIGATIONS
OF THE COMPANY. The obligations of the Company hereunder are
subject to the due filing with the Secretary of State of the
State of Delaware and the legal effectiveness of the Certificate
of Designations on or prior to the Closing Date.
V.
SURVIVAL OF REPRESENTATIONS; INDEMNITY
SECTION 5.01. SURVIVAL OF REPRESENTATIONS. Subject as
set forth below, all representations and warranties made by any
party hereto in this Agreement or pursuant hereto shall survive
for a period of one year after the Closing Date.
SECTION 5.02. General Indemnity.
_________________
(a) Subject to the terms and conditions of this
Article V, the Company hereby agrees to indemnify, defend and
hold the Purchasers harmless from and against all demands,
claims, actions or causes of action, assessments, losses
(including diminution in value of the Series B Preferred Shares),
damages, liabilities, costs and expenses, including, without
limitation, interest, penalties and reasonable attorneys' fees
and expenses (collectively, "Damages"), asserted against,
resulting to, imposed upon or incurred by the Purchasers by
reason of or resulting from a breach of any representation,
warranty or covenant of the Company contained in or made pursuant
to this Agreement.
(b) Subject to the terms and conditions of this
Article V, the Purchasers hereby agree to indemnify, defend and
hold the Company harmless from and against all Damages asserted
against, resulting to, imposed upon or incurred by the Company by
reason of or resulting from a breach of any representation,
warranty or covenant of the Purchasers contained in or made
<PAGE>
CUSIP No. 051629103 Page 28 of 33 Page
pursuant to this Agreement.
SECTION 5.03. CONDITIONS OF INDEMNIFICATION. The
respective obligations and liabilities of the Purchasers, on the
one hand, and the Company, on the other hand (the "indemnifying
party"), to the other (the "party to be indemnified") under Sec-
tion 5.02 hereof with respect to claims resulting from the asser-
tion of liability by third parties shall be subject to the fol-
lowing terms and conditions:
(a) within 20 days after receipt of notice of com-
mencement of any action or the assertion in writing of any claim
by a third party, the party to be indemnified shall give the
indemnifying party written notice thereof together with a copy of
such claim, process or other legal pleading, and the indemnifying
party shall have the right to undertake the defense thereof by
representatives of its own choosing;
(b) in the event that the indemnifying party, by the
30th day after receipt of notice of any such claim (or, if earli-
er, by the tenth day preceding the day on which an answer or
other pleading must be served in order to prevent judgment by
default in favor of the person asserting such claim), does not
elect to defend against such claim, the party to be indemnified
will (upon further notice to the indemnifying party) have the
right to undertake the defense, compromise or settlement of such
claim on behalf of and for the account and risk of the indemnify-
ing party, subject to the right of the indemnifying party to
assume the defense of such claim at any time prior to settlement,
compromise or final determination thereof, provided that the
indemnifying party shall be given at least 15 days prior written
notice of the effectiveness of any such proposed settlement or
compromise;
(c) anything in this Section 5.03 to the contrary
notwithstanding (i) if there is a reasonable probability that a
claim may materially and adversely affect the indemnifying party
other than as a result of money damages or other money payments,
the indemnifying party shall have the right, at its own cost and
expense, to compromise or settle such claim, but (ii) the indem-
nifying party shall not, without the prior written consent of the
party to be indemnified, settle or compromise any claim or con-
sent to the entry of any judgment which does not include as an
unconditional term thereof the giving by the claimant or the
plaintiff to the party to be indemnified a release from all
liability in respect of such claim; and
(d) in connection with any such indemnification, the
indemnified party will cooperate in all reasonable requests of
the indemnifying party.
<PAGE>
CUSIP No. 051629103 Page 29 of 33 Page
VI.
CERTAIN REGISTRATION RIGHTS
The Company hereby affirms and agrees that the
registration rights granted to the Purchasers and certain other
stockholders of the Company as set forth in the Registration
Rights Agreement dated as of March 29, 1996 (the "Registration
Rights Agreement"), among the Company, the Purchasers and the
other parties named therein, shall continue in full force and
effect, PROVIDED, HOWEVER, that the Company and the Purchasers
acknowledge and agree (i) that the term "Convertible Preferred
Stock" shall be deemed to refer to and include the Series B
CUSIP No. 051629103 Page 29 of 33 Pages
Preferred Stock and (ii) the term "Preferred Shares" shall be
deemed to refer to and include the Series B Preferred Shares.
VII.
MISCELLANEOUS
SECTION 7.01. EXPENSES, ETC. The Company shall
reimburse WCAS VII or pay on its behalf any reasonable fees and
expenses incurred by WCAS VII in connection with the negotiation
and preparation of this Agreement and the related documents
contemplated hereby. For purposes hereof, the "fees and expenses
incurred by WCAS VII" shall include, without limitation, the
fees, disbursements and expenses of counsel, accountants,
financial advisors and other experts retained by WCAS VII in
connection with this Agreement and the transactions contemplated
hereby.
SECTION 7.02. SURVIVAL OF AGREEMENTS. All covenants,
agreements, representations and warranties made herein shall
survive the execution and delivery of this Agreement and the
issuance, sale and delivery of the Series B Preferred Shares
pursuant hereto, notwithstanding any investigation made at any
time by or on behalf of any party hereto. All statements
contained in any certificate or other instrument delivered by the
Company hereunder shall be deemed to constitute representations
and warranties made by the Company.
SECTION 7.03. PARTIES IN INTEREST. All covenants and
agreements contained in this Agreement by or on behalf of any
party hereto shall bind and inure to the benefit of the
respective successors and assigns of such party hereto whether so
expressed or not.
SECTION 7.04. NOTICES. Any notice or other communica-
<PAGE>
CUSIP No. 051629103 Page 30 of 33 Page
tions required or permitted hereunder shall be deemed to be
sufficient if contained in a written instrument delivered in
person or duly sent by first class certified mail, postage pre-
paid, by nationally recognized overnight courier, or by telecopy
addressed to such party at the address or telecopy number set
forth below or such other address or telecopy number as may
hereafter be designated in writing by the addressee to the
addressor listing all parties:
if to the Company, to:
Aurora Electronics, Inc.
9477 Waples Street, Suite 150
San Diego, California 92121
Telecopy Number: (619) 552-8942
Attention: President
with a copy to:
Hughes & Luce, L.L.P.
1717 Main Street
Dallas, Texas 75201
Telecopy Number: (214) 939-6100
Attention: Alan J. Bogdanow, Esq.
Kenneth G. Hawari, Esq.
if to any Purchaser, to:
Welsh, Carson, Anderson & Stowe
320 Park Avenue, Suite 2500
New York, New York 10022-6815
Telecopy Number: (212) 893-9575
Attention: Richard H. Stowe
Thomas E. McInerney
with a copy to:
Reboul, MacMurray, Hewitt, Maynard & Kristol
45 Rockefeller Plaza
New York, New York 10111
Telecopy Number: (212) 841-5725
Attention: William J. Hewitt, Esq.
or, in any case, at such other address or addresses as shall have
been furnished in writing by such party to the other parties
hereto. All such notices, requests, consents and other communi-
cations shall be deemed to have been received (a) in the case of
personal delivery, on the date of such delivery, (b) in the case
<PAGE>
CUSIP No. 051629103 Page 31 of 33 Pages
of mailing, on the fifth business day following the date of such
mailing, (c) in the case of delivery by overnight courier, on the
business day following the date of delivery to such courier, and
(d) in the case of telecopy, when received.
SECTION 7.05. ENTIRE AGREEMENT; ASSIGNMENT. This
Agreement (including the Schedules, Exhibits and Annexes thereto)
and the Registration Rights Agreement constitute the entire
agreement of the parties with respect to the subject matter
hereof and may not be amended or modified nor any provisions
waived except in a writing signed by the Company and the
Purchasers. This Agreement shall not be assigned by operation of
law of otherwise without the consent of the other parties hereto.
SECTION 7.06. COUNTERPARTS. 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
CUSIP No. 051629103 Page 31 of 33 Pages
one and the same instrument.
SECTION 7.07. GOVERNING LAW. This Agreement shall be
governed by and construed in accordance with the laws of the
State of New York.
<PAGE>
CUSIP No. 051629103 Page 32 of 33 Page
IN WITNESS WHEREOF, the Company and the Purchasers have
executed this Agreement as of the day and year first above
written.
AURORA ELECTRONICS, INC.
By
____________________________________
Jim C. Cowart
Chairman and
Chief Executive Officer
WELSH, CARSON, ANDERSON & STOWE VII, L.P.
By WCAS VII Partners, L.P.,
General Partner
By
_____________________________________
General Partner
WCAS INFORMATION PARTNERS, L.P.
By WCAS Info Partners,
General Partner
By
______________________________________
General Partner
Bruce K. Anderson
Russell L. Carson
Anthony J. deNicola
Thomas E. McInerney
James B. Hoover
Robert A. Minicucci
Andrew M. Paul
Paul B. Queally
Richard H. Stowe
Laura M. VanBuren
Patrick J. Welsh
By
__________________________________
Laura M. VanBuren
Individually and
as Attorney-in-Fact
<PAGE>
CUSIP No. 051629103 Page 33 of 33 Page
Schedule I
___________
Name of Purchaser Series B Preferred Shares
_________________ _________________________
Welsh, Carson, Anderson &
Stowe VII, L.P. 23,757
WCAS Information Partners, L.P. 324
Patrick J. Welsh 130
Russell L. Carson 194
Bruce K. Anderson 194
Richard H. Stowe 97
Andrew M. Paul 65
Thomas E. McInerney 113
Laura VanBuren 6
James B. Hoover 32
Robert A. Minicucci 52
Anthony J. deNicola 26
Paul B. Queally 10
______
Total 25,000
______
______
