<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
(RULE 13D-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13d-2(a)
(AMENDMENT NO. 7)*
AUREAL SEMICONDUCTOR INC. (f/k/a MEDIA VISION TECHNOLOGY, INC.)
-----------------------------------------------------------------------------
(Name of Issuer)
Common Stock, par value $0.001 per share
-----------------------------------------------------------------------------
(Title of Class of Securities)
58445Q 10 3
-----------------------------------------------------------------------------
(CUSIP Number)
Michael E. Cahill, Esq. Kenneth Liang, Esq.
Managing Director & General Counsel Managing Director and General Counsel
The TCW Group, Inc. Oaktree Capital Management, LLC
865 South Figueroa Street, Ste. 1800 333 South Grand Avenue, 28th Floor
Los Angeles, California 90017 Los Angeles, California 90071
(213) 244-0000 (213) 830-6300
-----------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
May 26, 1999
-----------------------------------------------------------------------------
(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 that is the subject of this Schedule 13D, and is
filing this schedule because of Sections 240.13d-1(e), 240.13d-l(f) or
240.13d-1(g), check the following box. / /.
NOTE: schedules filed in paper format shall include a signed original and
five copies of the schedule, including all exhibits. See Section 240.13d-7
for other parties to whom copies are to be sent.
(Continued on following pages)
(Page 1 of 32 Pages)
*The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which
would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section
of the Act but shall be subject to all other provisions of the Act (however,
see the Notes).
<PAGE>
SCHEDULE 13D
- ----------------------------- ---------------------------
CUSIP NO. 58445Q 10 3 PAGE 2 OF 30 PAGES
- ----------------------------- ---------------------------
- -------------- -----------------------------------------------------------------
NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
1
The TCW Group, Inc.
- -------------- -----------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)/ /
2 (b)/X/
- -------------- -----------------------------------------------------------------
SEC USE ONLY
3
- -------------- -----------------------------------------------------------------
SOURCE OF FUNDS*
4
Not applicable.
- -------------- -----------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
5 PURSUANT TO ITEMS 2(d) OR 2(e) / /
- -------------- -----------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
Nevada
- ------------------- ------- ----------------------------------------------------
NUMBER OF SOLE VOTING POWER
7
68,217,015
SHARES ------- ----------------------------------------------------
SHARED VOTING POWER
8
BY 0
------- ----------------------------------------------------
EACH
SOLE DISPOSITIVE POWER
9
68,217,015
REPORTING
------- ----------------------------------------------------
PERSON WITH SHARED DISPOSITIVE POWER
10
0
- ------------------- ------- ----------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
68,217,015
- -------------- -----------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
12 SHARES* / /
- -------------- -----------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
44.60%
- -------------- -----------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
HC, CO
- -------------- -----------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
-2-
<PAGE>
SCHEDULE 13D
- ----------------------------- ---------------------------
CUSIP NO. 58445Q 10 3 PAGE 3 OF 30 PAGES
- ----------------------------- ---------------------------
- -------------- -----------------------------------------------------------------
NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
1
Robert A. Day
- -------------- -----------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)/ /
2 (b)/X/
- -------------- -----------------------------------------------------------------
SEC USE ONLY
3
- -------------- -----------------------------------------------------------------
SOURCE OF FUNDS*
4
Not applicable.
- -------------- -----------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
5 PURSUANT TO ITEMS 2(d) OR 2(e) / /
- -------------- -----------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
- ------------------- ------- ----------------------------------------------------
NUMBER OF SOLE VOTING POWER
7
68,217,015
SHARES ------- ----------------------------------------------------
SHARED VOTING POWER
8
BY 0
------- ----------------------------------------------------
EACH
SOLE DISPOSITIVE POWER
9
68,217,015
REPORTING
------- ----------------------------------------------------
PERSON WITH SHARED DISPOSITIVE POWER
10
0
- ------------------- ------- ----------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
68,217,015
- -------------- -----------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
12 SHARES* / /
- -------------- -----------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
44.60%
- -------------- -----------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
IN, HC
- -------------- -----------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
-3-
<PAGE>
SCHEDULE 13D
- ----------------------------- ---------------------------
CUSIP NO. 58445Q 10 3 PAGE 4 OF 30 PAGES
- ----------------------------- ---------------------------
- -------------- -----------------------------------------------------------------
NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
1
Trust Company of the West
- -------------- -----------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)/ /
2 (b)/X/
- -------------- -----------------------------------------------------------------
SEC USE ONLY
3
- -------------- -----------------------------------------------------------------
SOURCE OF FUNDS*
4
Not applicable.
- -------------- -----------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
5 PURSUANT TO ITEMS 2(d) OR 2(e) / /
- -------------- -----------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
California
- ------------------- ------- ----------------------------------------------------
NUMBER OF SOLE VOTING POWER
7
36,468,507
SHARES ------- ----------------------------------------------------
SHARED VOTING POWER
8
BY 0
------- ----------------------------------------------------
EACH
SOLE DISPOSITIVE POWER
9
36,468,507
REPORTING
------- ----------------------------------------------------
PERSON WITH SHARED DISPOSITIVE POWER
10
0
- ------------------- ------- ----------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
36,468,507
- -------------- -----------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
12 SHARES* / /
- -------------- -----------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
24.06%
- -------------- -----------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
CO
- -------------- -----------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
-4-
<PAGE>
SCHEDULE 13D
- ----------------------------- ---------------------------
CUSIP NO. 58445Q 10 3 PAGE 5 OF 30 PAGES
- ----------------------------- ---------------------------
- -------------- -----------------------------------------------------------------
NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
1
TCW Asset Management Company
- -------------- -----------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)/ /
2 (b)/X/
- -------------- -----------------------------------------------------------------
SEC USE ONLY
3
- -------------- -----------------------------------------------------------------
SOURCE OF FUNDS*
4
Not applicable.
- -------------- -----------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
5 PURSUANT TO ITEMS 2(d) OR 2(e) / /
- -------------- -----------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
California
- ------------------- ------- ----------------------------------------------------
NUMBER OF SOLE VOTING POWER
7
31,748,509
SHARES ------- ----------------------------------------------------
SHARED VOTING POWER
8
BY 0
------- ----------------------------------------------------
EACH
SOLE DISPOSITIVE POWER
9
31,748,509
REPORTING
------- ----------------------------------------------------
PERSON WITH SHARED DISPOSITIVE POWER
10
0
- ------------------- ------- ----------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
31,748,509
- -------------- -----------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
12 SHARES* / /
- -------------- -----------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
20.97%
- -------------- -----------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
CO, IA
- -------------- -----------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
-5-
<PAGE>
SCHEDULE 13D
- ----------------------------- ---------------------------
CUSIP NO. 58445Q 10 3 PAGE 6 OF 30 PAGES
- ----------------------------- ---------------------------
- -------------- -----------------------------------------------------------------
NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
1
TCW Special Credits
- -------------- -----------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)/ /
2 (b)/X/
- -------------- -----------------------------------------------------------------
SEC USE ONLY
3
- -------------- -----------------------------------------------------------------
SOURCE OF FUNDS*
4
Not applicable.
- -------------- -----------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
5 PURSUANT TO ITEMS 2(d) OR 2(e) / /
- -------------- -----------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
California
- ------------------- ------- ----------------------------------------------------
NUMBER OF SOLE VOTING POWER
7
31,748,509
SHARES ------- ----------------------------------------------------
SHARED VOTING POWER
8
BY 0
------- ----------------------------------------------------
EACH
SOLE DISPOSITIVE POWER
9
31,748,509
REPORTING
------- ----------------------------------------------------
PERSON WITH SHARED DISPOSITIVE POWER
10
0
- ------------------- ------- ----------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
31,748,509
- -------------- -----------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
12 SHARES* / /
- -------------- -----------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
20.97%
- -------------- -----------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
PN, IA
- -------------- -----------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
-6-
<PAGE>
SCHEDULE 13D
- ----------------------------- ---------------------------
CUSIP NO. 58445Q 10 3 PAGE 7 OF 30 PAGES
- ----------------------------- ---------------------------
- -------------- -----------------------------------------------------------------
NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
1
TCW Special Credits Fund IIIb
- -------------- -----------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)/ /
2 (b)/X/
- -------------- -----------------------------------------------------------------
SEC USE ONLY
3
- -------------- -----------------------------------------------------------------
SOURCE OF FUNDS*
4
OO.WC
- -------------- -----------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
5 PURSUANT TO ITEMS 2(d) OR 2(e) / /
- -------------- -----------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
California
- ------------------- ------- ----------------------------------------------------
NUMBER OF SOLE VOTING POWER
7
27,651,174
SHARES ------- ----------------------------------------------------
SHARED VOTING POWER
8
BY 0
------- ----------------------------------------------------
EACH
SOLE DISPOSITIVE POWER
9
27,651,174
REPORTING
------- ----------------------------------------------------
PERSON WITH SHARED DISPOSITIVE POWER
10
0
- ------------------- ------- ----------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
27,651,174
- -------------- -----------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
12 SHARES* / /
- -------------- -----------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
18.29%
- -------------- -----------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
PN
- -------------- -----------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
-7-
<PAGE>
SCHEDULE 13D
- ----------------------------- ---------------------------
CUSIP NO. 58445Q 10 3 PAGE 8 OF 30 PAGES
- ----------------------------- ---------------------------
- -------------- -----------------------------------------------------------------
NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
1
TCW Special Credits Trust
- -------------- -----------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)/ /
2 (b)/X/
- -------------- -----------------------------------------------------------------
SEC USE ONLY
3
- -------------- -----------------------------------------------------------------
SOURCE OF FUNDS*
4
OO.WC
- -------------- -----------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
5 PURSUANT TO ITEMS 2(d) OR 2(e) / /
- -------------- -----------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
California
- ------------------- ------- ----------------------------------------------------
NUMBER OF SOLE VOTING POWER
7
14,775,748
SHARES ------- ----------------------------------------------------
SHARED VOTING POWER
8
BY 0
------- ----------------------------------------------------
EACH
SOLE DISPOSITIVE POWER
9
14,775,748
REPORTING
------- ----------------------------------------------------
PERSON WITH SHARED DISPOSITIVE POWER
10
0
- ------------------- ------- ----------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
14,775,748
- -------------- -----------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
12 SHARES* / /
- -------------- -----------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
9.81%
- -------------- -----------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
OO
- -------------- -----------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
-8-
<PAGE>
SCHEDULE 13D
- ----------------------------- ---------------------------
CUSIP NO. 58445Q 10 3 PAGE 9 OF 30 PAGES
- ----------------------------- ---------------------------
- -------------- -----------------------------------------------------------------
NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
1
TCW Special Credits Trust IIIb
- -------------- -----------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)/ /
2 (b)/X/
- -------------- -----------------------------------------------------------------
SEC USE ONLY
3
- -------------- -----------------------------------------------------------------
SOURCE OF FUNDS*
4
OO.WC
- -------------- -----------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
5 PURSUANT TO ITEMS 2(d) OR 2(e) / /
- -------------- -----------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
California
- ------------------- ------- ----------------------------------------------------
NUMBER OF SOLE VOTING POWER
7
21,692,759
SHARES ------- ----------------------------------------------------
SHARED VOTING POWER
8
BY 0
------- ----------------------------------------------------
EACH
SOLE DISPOSITIVE POWER
9
21,692,759
REPORTING
------- ----------------------------------------------------
PERSON WITH SHARED DISPOSITIVE POWER
10
0
- ------------------- ------- ----------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
21,692,759
- -------------- -----------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
12 SHARES* / /
- -------------- -----------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
14.37%
- -------------- -----------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
OO
- -------------- -----------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
-9-
<PAGE>
SCHEDULE 13D
- ----------------------------- ---------------------------
CUSIP NO. 58445Q 10 3 PAGE 10 OF 30 PAGES
- ----------------------------- ---------------------------
- -------------- -----------------------------------------------------------------
NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
1
Weyerhaeuser Company Master Retirement Trust (Managed Account)
- -------------- -----------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)/ /
2 (b)/X/
- -------------- -----------------------------------------------------------------
SEC USE ONLY
3
- -------------- -----------------------------------------------------------------
SOURCE OF FUNDS*
4
Not applicable.
- -------------- -----------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
5 PURSUANT TO ITEMS 2(d) OR 2(e) / /
- -------------- -----------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
United States
- ------------------- ------- ----------------------------------------------------
NUMBER OF SOLE VOTING POWER
7
11,841,250
SHARES ------- ----------------------------------------------------
SHARED VOTING POWER
8
BY 0
------- ----------------------------------------------------
EACH
SOLE DISPOSITIVE POWER
9
11,841,250
REPORTING
------- ----------------------------------------------------
PERSON WITH SHARED DISPOSITIVE POWER
10
0
- ------------------- ------- ----------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
11,841,250
- -------------- -----------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
12 SHARES* / /
- -------------- -----------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
7.88%
- -------------- -----------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
EP
- -------------- -----------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
-10-
<PAGE>
SCHEDULE 13D
- ----------------------------- ---------------------------
CUSIP NO. 58445Q 10 3 PAGE 11 OF 30 PAGES
- ----------------------------- ---------------------------
- -------------- -----------------------------------------------------------------
NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
1
OCM Opportunities Fund II, L.P.
- -------------- -----------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)/ /
2 (b)/X/
- -------------- -----------------------------------------------------------------
SEC USE ONLY
3
- -------------- -----------------------------------------------------------------
SOURCE OF FUNDS*
4
Not applicable.
- -------------- -----------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
5 PURSUANT TO ITEMS 2(d) OR 2(e) / /
- -------------- -----------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
Delaware
- ------------------- ------- ----------------------------------------------------
NUMBER OF SOLE VOTING POWER
7
38,819,499
SHARES ------- ----------------------------------------------------
SHARED VOTING POWER
8
BY 0
------- ----------------------------------------------------
EACH
SOLE DISPOSITIVE POWER
9
38,819,499
REPORTING
------- ----------------------------------------------------
PERSON WITH SHARED DISPOSITIVE POWER
10
0
- ------------------- ------- ----------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
38,819,499
- -------------- -----------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
12 SHARES* / /
- -------------- -----------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
25.74%
- -------------- -----------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
PN
- -------------- -----------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
-11-
<PAGE>
SCHEDULE 13D
- ----------------------------- ---------------------------
CUSIP NO. 58445Q 10 3 PAGE 12 OF 30 PAGES
- ----------------------------- ---------------------------
- -------------- -----------------------------------------------------------------
NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
1
Oaktree Capital Management, LLC
- -------------- -----------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)/ /
2 (b)/X/
- -------------- -----------------------------------------------------------------
SEC USE ONLY
3
- -------------- -----------------------------------------------------------------
SOURCE OF FUNDS*
4
Not applicable.
- -------------- -----------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
5 PURSUANT TO ITEMS 2(d) OR 2(e) / /
- -------------- -----------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
California
- ------------------- ------- ----------------------------------------------------
NUMBER OF SOLE VOTING POWER
7
51,053,284
SHARES ------- ----------------------------------------------------
SHARED VOTING POWER
8
BY 0
------- ----------------------------------------------------
EACH
SOLE DISPOSITIVE POWER
9
51,053,284
REPORTING
------- ----------------------------------------------------
PERSON WITH SHARED DISPOSITIVE POWER
10
0
- ------------------- ------- ----------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
51,053,284
- -------------- -----------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
12 SHARES* / /
- -------------- -----------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
33.79%
- -------------- -----------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
IA, OO
- -------------- -----------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
-12-
<PAGE>
ITEM 1. SECURITY AND ISSUER
This Statement relates to the Common Stock, par value $0.001 per share
("Common Stock"), of Aureal Semiconductor Inc. (f/k/a Media Vision
Technology, Inc.), a Delaware corporation (the "Issuer"). The address of the
principal executive office of the Issuer is 4245 Technology Drive, Fremont,
California 94538.
ITEM 2. IDENTITY AND BACKGROUND
This Statement is filed on behalf of
(1) The TCW Group, Inc., a Nevada corporation ("TCWG");
(2) Robert Day, an individual;
(3) Trust Company of the West, a California corporation and
wholly-owned subsidiary of TCWG ("TCW");
(4) TCW Asset Management Company, a California corporation and
wholly-owned subsidiary of TCWG ("TAMCO");
(5) TCW Special Credits, a California general partnership of which
TAMCO is the managing general partner ("Special Credits");
(6) TCW Special Credits Fund IIIb, a California limited
partnership, (hereinafter referred to as the "Special Credits
Limited Partnership") of which Special Credits is the general
partner;
(7) Two California collective investment trusts, TCW Special
Credits Trust ("Trust I") and TCW Special Credits Trust IIIb
("Trust IIIb") (hereinafter referred to as the "Special
Credits Trusts") of which TCW is the trustee;
(8) Oaktree Capital Management, LLC, a California limited
liability company ("Oaktree");
(9) Two managed accounts of which Oaktree is investment manager on
behalf of its clients, the Weyerhaeuser Company Master
Retirement Trust ("Oaktree Account I") and the Columbia/HCA
Master Retirement Trust ("Oaktree Account II" and, together
with Oaktree Account I, the "Oaktree Accounts"); and
(10) OCM Opportunities Fund II, L.P., a Delaware limited
partnership (the "Opportunities Fund") of which Oaktree is the
general partner.
Special Credits, Trust I, Trust IIIb and the Special Credits Limited
Partnership are hereinafter collectively referred to as the "Special Credits
Entities." TCWG, TCW, TAMCO, Robert Day and the Special Credits Entities are
hereinafter collectively referred to as the "TCW Related Entities." Special
Credits is also the investment manager of a third party account which invests
in similar
-13-
<PAGE>
securities as the Special Credits Entities (the "Special Credits Account").
Oaktree is the investment manager of the Oaktree Accounts, which invest in
securities and other obligations of distressed entities. The principal
business of Oaktree is providing investment advice and management services to
institutional and individual investors. The Opportunities Fund is a limited
partnership which generally invests in securities and other obligations of
distressed entities. The address of the principal business and principal
office for Oaktree is 333 South Grand Avenue, 28th Floor, Los Angeles,
California 90071. The Opportunities Fund and the Oaktree Accounts are
collectively referred to as the "Opportunities Entities" and together with
Oaktree are collectively referred to as the "Oaktree Related Entities".
Mr. Day acts as Chairman of the Board and Chief Executive Officer of TCWG.
Additionally, Mr. Day may be deemed to control TCWG, although he disclaims
control and disclaims beneficial ownership of any securities owned by the TCW
Related Entities.
TCWG is a holding company of entities involved in the principal business of
providing investment advice and management services. TCW is a trust company
which provides investment management services, including to the Special
Credits Trusts. TAMCO is an investment adviser and provides investment advice
and management services to institutional and individual investors. Special
Credits provides investment advice and management services to the Special
Credits Limited Partnership and the Special Credits Account. The Special
Credits Limited Partnership is an investment partnership which invests in
securities and other obligations of distressed entities. The Special Credits
Trusts are collective investment trusts which invest in securities and other
obligations of distressed entities. The address of the principal business and
principal office for the TCW Related Entities is 865 South Figueroa Street,
Suite 1800, Los Angeles, California 90017.
(a)-(c) & (f)
(i) The executive officers of TCWG are listed below. The principal business
address for each executive officer is 865 South Figueroa Street, Suite 1800,
Los Angeles, California 90017. Each executive officer is a citizen of the
United States of America unless otherwise specified below:
<TABLE>
<CAPTION>
Executive Officers
- ------------------
<S> <C>
Robert A. Day Chairman of the Board & Chief Executive Officer
Ernest O. Ellison Vice Chairman of the Board
Marc I. Stern President
Alvin R. Albe, Jr. Executive Vice President, Finance & Administration
Thomas E. Larkin, Jr. Executive Vice President & Group Managing Director
Michael E. Cahill Managing Director, General Counsel & Secretary
William C. Sonneborn Managing Director, Chief Financial Officer & Assistant Secretary
</TABLE>
Schedule I attached hereto and incorporated herein sets forth with respect to
each director of TCWG his name, residence or business address, citizenship,
present principal occupation or employment and the name, principal business
and address of any corporation or other organization in which such employment
is conducted.
(ii) The executive officers and directors of TCW are listed below. The
principal business address for each executive officer and director is 865
South Figueroa Street, Suite 1800, Los Angeles,
-14-
<PAGE>
California 90017. Each executive officer is a citizen of the United States of
America unless otherwise specified below:
<TABLE>
<CAPTION>
Executive Officers & Directors
- ------------------------------
<S> <C>
Robert A. Day Chairman of the Board & Chief Executive Officer
Ernest O. Ellison Director & Vice Chairman
Thomas E. Larkin, Jr. Director & President
Alvin R. Albe, Jr. Director & Executive Vice President, Finance & Administration
Marc I. Stern Director, Executive Vice President, Group Managing Director
Michael E. Cahill Managing Director, General Counsel & Secretary
William C. Sonneborn Managing Director, Chief Financial Officer & Assistant Secretary
</TABLE>
(iii) The executive officers and directors of TAMCO are listed below. The
principal business address for each executive officer, director and portfolio
manager is 865 South Figueroa Street, Suite 1800, Los Angeles, California,
90017. Each executive officer and director is a citizen of the United States
of America unless otherwise specified below:
<TABLE>
<CAPTION>
Executive Officers & Directors
- ------------------------------
<S> <C>
Robert A. Day Chairman of the Board & Chief Executive Officer
Thomas E. Larkin, Jr. Director & Vice Chairman of the Board
Marc I. Stern Director, Vice Chairman of the Board and President
Alvin R. Albe, Jr. Director, Executive Vice President, Finance & Administration
Michael E. Cahill Director, Managing Director, General Counsel & Secretary
William C. Sonneborn Director, Managing Director, Chief Financial Officer & Assistant
Secretary
Mark L. Attanasio Director, Group Managing Director & Chief Investment Officer -
Below Investment Grade Fixed Income
Philip A. Barach Director, Group Managing Director & Chief Investment Officer -
Investment Grade Fixed Income
Javier Baz Director, Managing Director & Chief Investment Officer -
International
Robert D. Beyer Director & Group Managing Director
Glen E. Bickerstaff Director & Managing Director
Nicola F. Galluccio Director & Managing Director
Arthur R. Carlson Director & Managing Director
Gerard B. Finneran Director & Managing Director
Douglas S. Foreman Director, Group Managing Director & Chief Investment Officer -
U.S. Equities
Mark W. Gibello Director & Managing Director
Jeffrey E. Gundlach Director & Group Managing Director
Raymond F. Henze III Director & Group Managing Director
Stephen McDonald Director & Managing Director
Jeffrey V. Peterson Director & Managing Director
Komal S. Sri-Kumar Director & Managing Director
</TABLE>
(iv) The following sets forth with respect to each general partner of
Special Credits his name, residence or business address, present principal
occupation or employment and the name, principal
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business and address of any corporation or other organization in which such
employment is conducted. Each general partner who is a natural person is a
citizen of the United States of America unless otherwise specified below.
TAMCO is the Managing General Partner. See information in paragraph (iii)
above.
Bruce A. Karsh
President and Principal
Oaktree Capital Management, LLC
333 South Grand Avenue
28th Floor
Los Angeles, California 90071
Howard S. Marks
Chairman and Principal
Oaktree Capital Management, LLC
333 South Grand Avenue
28th Floor
Los Angeles, California 90071
Sheldon M. Stone
Principal
Oaktree Capital Management, LLC
333 South Grand Avenue
28th Floor
Los Angeles, California 90071
David Richard Masson
Principal
Oaktree Capital Management, LLC
333 South Grand Avenue
28th Floor
Los Angeles, California 90071
(v) Special Credits is the sole general partner of the Special Credits
Limited Partnership. See information in paragraph (iv) above regarding
Special Credits and its general partners.
(vi) The portfolio managers of the Special Credits Limited Partnership and
the Special Credits Account are listed below. The principal address for each
Portfolio Manager of the Fund is 333 South Grand Avenue, Los Angeles,
California 90071. Each individual listed below is a citizen of the United
States of America.
Portfolio Managers
- ------------------
Bruce A. Karsh
David Richard Masson
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<PAGE>
(vii) Oaktree is the investment manager of the Oaktree Accounts and the
general partner of the Opportunities Fund. See information in paragraph
(viii) below regarding Oaktree and its general partners.
(viii) The members and executive officers of Oaktree and the Opportunities
Fund and the investment manager of the Oaktree Accounts are listed below. The
principal address for each member and executive officer of Oaktree is 333
South Grand Avenue, Los Angeles, California 90071. Each individual listed
below is a citizen of the United States of America.
<TABLE>
<CAPTION>
Executive Officers & Members
- ----------------------------
<S> <C>
Bruce A. Karsh President and Principal
Howard S. Marks Chairman and Principal
Sheldon M. Stone Principal
David Richard Masson Principal
Larry W. Keele Principal
Stephen A. Kaplan Principal
Russel S. Bernard Principal
David Kirchheimer Managing Director and Chief Financial and Administrative Officer
Kenneth Liang Managing Director and General Counsel
Portfolio Managers
- ------------------
Bruce A. Karsh President and Principal
David Richard Masson Principal
</TABLE>
(d)-(e)
During the last five years, neither TCWG, TCW, TAMCO, the Special Credits
Entities, the Oaktree Accounts, the Opportunities Fund, Oaktree nor, to the
best of their knowledge, any of their respective executive officers,
directors and general partners (i) has been convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors); or (ii)
has been a party to a civil proceeding of a judicial or administrative body
of competent jurisdiction and as a result of such proceedings was or is
subject to a judgment, decree or final order enjoining future violations of,
or prohibiting or mandating activities subject to, federal or state
securities laws or finding any violation with respect to such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
On April 5, 1999, the Issuer announced its intention to consummate a
recapitalization intended to simplify the Issuer's capitalization. In
connection with such recapitalization, on May 26, 1999, Oaktree (on behalf of
several entities named therein (the "Oaktree Entities")), Special Credits (on
behalf of several entities named therein (the "Special Credits Entities") and
the Issuer entered into a Standby Purchase Agreement (the "Standby Purchase
Agreement"), pursuant to which the Opportunities Fund agreed to act as
Standby Purchaser in respect of a Subscription Rights Offering (the "Rights
Offering") of 33,333,333 shares of the Issuer's common stock (the "Rights
Shares") and the Company offered to issue additional shares of common stock
for each share of Series B Preferred Stock converted in connection with the
recapitalization as more fully described below. Pursuant to the Rights
Offering, the Rights Shares were offered on a pro rata basis to all of
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the Issuer's common stockholders (the "Basic Subscription Privilege") at $.60
per share, with each such common stockholder entitled to oversubscribe for
any Rights Shares (the "Oversubscription Privilege") not purchased by the
other common stockholders. The Opportunities Fund, Oaktree Account I, Oaktree
Account II, Special Credits, Trust I and Trust IIIb purchased 7,899,346,
3,802,479, 79,930, 3,719,465, 1,855,674, and 2,557,543 Rights Shares,
respectively, pursuant to the Basic Subscription Privilege. On May 26, 1999,
the Opportunities Fund and Oaktree Account II purchased an additional
7,244,154 and 73,173 Rights Shares, respectively in its capacity as Standby
Purchaser. In connection with the recapitalization and pursuant to the
Standby Purchase Agreement, the Issuer offered to issue 620.92 additional
shares of common stock for each share of the Issuer's Series B Preferred
Stock converted pursuant to the recapitalization at the conversion price in
effect with respect to the Series B Preferred Stock after giving effect to
the Rights Offering. Pursuant to a conversion notice dated as of May 21,
1998, The Opportunities Fund, Oaktree Account II, Special Credits, Trust I
and Trust IIIb converted 5,909.61, 59.69, 16,833.95, 7,520.78 and 11,461.05
shares of the Issuer's Series B Preferred Stock, respectively, and received
3,732,150, 37,697, 10,631,300, 4,749,671 and 7,238,104 additional shares,
respectively, in accordance with the terms of the Standby Purchase Agreement.
As a result of such conversion, the Reporting Persons no longer own any
amount of Series B Preferred Stock.
On March 5, 1999, the Opportunities Fund and Oaktree Account II each
purchased the following securities of the Issuer: (a) 6,456,855 and 65,221
shares of the Issuer's Common Stock, respectively; (b) 5,793.73 and 58.52
shares of the Issuer's 8% Series B Convertible Preferred Stock ("Series B
Preferred Stock"), respectively; (c) 396 and 4 shares of the Issuer's Series
C Preferred Stock (the "Series C Preferred Stock"), respectively and (d)
immediately exercisable warrants to purchase at $1.00 per share 816,750 and
8,250 shares of the Issuer's Common Stock, respectively. The Opportunities
Fund and Oaktree Account II made the foregoing purchases in a privately
negotiated transaction using $12,029,016 and $121,505, respectively, of funds
obtained from their working capital. On April 1, 1999 the Opportunities Fund
and Oaktree Account II received, respectively, an additional 115.88 and 1.17
shares of Series B Preferred Stock as a dividend on the shares of Series B
Preferred Stock held by them.
Beginning October 30, 1998, holders of shares of Series C Preferred Stock
acquired the right at any time, subject to the Issuer's right of redemption,
to convert up to a maximum of 15% of the aggregate number of shares of Series
C Preferred Stock held by such holder into shares of the Issuer's Common
Stock according to the terms of the Issuer's Certificate of Designations of
Series C Preferred Stock. For each one month period after October 30, 1998,
such holders accrue the right to convert into Common Stock an additional 15%
of the number of shares of Series C Preferred Stock held by such holder. On
March 5, 1999, the Opportunities Fund and Oaktree Account II converted 297
and 3 shares of Series C Preferred Stock into 7,556,442 and 76,328 shares of
the Issuer's Common Stock, respectively. On March 26, 1999, the Opportunities
Fund and Oaktree Account II converted 59 shares and 1 share of Series C
Preferred Stock into 1,308,372 and 22,176 shares of the Issuer's Common
Stock, respectively, at an applicable conversion price of $.48 per share. On
April 14, 1999, the Opportunities Fund converted its remaining 40 shares of
Series C Preferred Stock into 859,005 shares of the Issuer's common stock at
an applicable conversion price of $.4976 per share. As a result of such
conversion, the Reporting Persons no longer own any amount of Series C
Preferred Stock.
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<PAGE>
On November 1, 1998, the Special Credits Account, Trust I, Trust IIIb and the
Special Credits Limited Partnership received, respectively, an additional
4,542, 21,404, 22,162 and 26,607 shares of the Issuer's Common Stock in
connection with the Issuer's bankruptcy restructuring pursuant to a
prepackaged plan of reorganization which was declared effective on December 31,
1996 (the "Plan of Reorganization").
Oaktree Account I purchased 20,000 shares of the Issuer's Common Stock on
August 26, 1998 in the open market using $22,656 of funds obtained from its
working capital. Oaktree Account I purchased 25,000 shares of the Issuer's
Common Stock on September 1, 1998 in the open market using $25,782.50 of
funds obtained from its working capital.
Oaktree Account I purchased 34 shares of the Issuer's 8% Series A Convertible
Preferred Stock (the "Series A Preferred Stock") on August 14, 1998 in a
privately negotiated transaction using $340,000 of funds obtained from its
working capital. Oaktree Account I purchased 190 shares of the Issuer's
Series A Preferred Stock on August 28, 1998 in a privately negotiated
transaction using $1,900,000 of funds obtained from its working capital.
Beginning July 11, 1998, holders of shares of Series A Preferred Stock have
the right at any time, subject to the Issuer's right of redemption, to
convert up to a maximum of 15% of the aggregate number of shares of Series A
Preferred Stock held by such holder into shares of the Issuer's Common Stock
according to the terms of the Issuer's Certificate of Designations of Series
A Preferred Stock. For each one month period after July 11, 1998, such
holders accrue the right to convert into Common Stock an additional 15% of
the number of shares of Series A Preferred Stock held by such holder. On
September 16, 1998, Oaktree Account I converted 92 shares of Series A
Preferred Stock into 1,622,875 shares of the Issuer's Common Stock. On
January 20, 1999, Oaktree Account I converted the remaining 132 shares of
Series A Preferred Stock into 4,040,563 shares of the Issuer's Common Stock.
The Special Credits Account, Trust I, Trust IIIb and the Special Credits
Limited Partnership agreed pursuant to a 8% Series B Convertible Preferred
Stock Purchase Agreement dated June 5, 1998, among the Issuer, B III Capital
Partners, L.P., Special Credits (as agent and on behalf of the Special
Credits Account), Trust I, Trust IIIb and the Special Credits Limited
Partnership to acquire, respectively, 2,025, 7,087, 10,800 and 13,838 shares
of the Issuer's Series B Preferred Stock in consideration of cancellation of,
respectively, $1,620,000, $5,670,000, $8,640,000, and $11,070,000 of
indebtedness owed to such entities pursuant to the Second Amended and
Restated Loan Agreement dated August 7, 1997, among the Issuer, and Special
Credits, as agent and on behalf of the Special Credits Account, Trust I,
Trust IIIb and the Special Credits Limited Partnership. On December 9, 1998
the Special Credits Account, Trust I, Trust IIIb and the Special Credits
Limited Partnership received, respectively, an additional 2,066, 7,229,
11,016 and 14,115 shares of Series B Preferred Stock as a dividend on such
Series B Preferred Stock. On March 1, 1999, the Special Credits Account,
Trust I, Trust IIIb and the Special Credits Limited Partnership received,
respectively, an additional 41.31, 144.57, 220.32, and 282.30 shares of
Series B Preferred Stock as a dividend on such Series B Preferred Stock. On
April 1, 1999, the aforementioned funds received, respectively, an additional
42.14, 147.47, 224.73 and 287.94 shares of Series B Preferred Stock as a
dividend on such Series B Preferred Stock.
-19-
<PAGE>
The Special Credits Account, Trust I, Trust IIIb and the Special Credits
Limited Partnership on December 1, 1997 received, respectively, an additional
5,685, 19,898, 30,320, and 38,848 shares of the Issuer's Common Stock in
connection with the Plan of Reorganization.
The Special Credits Account, Trust I, Trust IIIb and the Special Credits
Limited Partnership on September 1, 1997 received, respectively, an
additional 223, 781, 1,191, and 1,526 shares of the Issuer's Common Stock in
connection with the Issuer's Plan of Reorganization.
On August 6, 1997, Oaktree Account I, the Special Credits Account, Trust I,
Trust IIIb and the Special Credits Limited Partnership purchased,
respectively, 500,000, 30,000, 105,000, 160,000, and 205,000 units, each
consisting of one share of the Common Stock and an immediately exercisable
warrant to purchase one-half a share of Common Stock (the "Units"). The
purchase price for the Units was $2.00 per Unit. The Units were acquired
pursuant to that certain Unit Purchase Agreement dated August 6, 1997, among
the Issuer, IT Investment Management, B III Capital Partners, L.P., Pequod
Investments L.P., Oaktree, as investment manager on behalf of Oaktree Account
I, and TCW Special Credits, as agent and on behalf of the Special Credits
Limited Partnership, the Special Credits Trusts and the Special Credits
Account. Oaktree Account I, the Special Credits Account, Trust I, Trust IIIb
and the Special Credits Limited Partnership paid, respectively, $1,000,000,
$60,000, $210,000, $320,000, and $410,000 from the working capital of such
entities to acquire such Units.
In addition, on August 6, 1997, the Special Credits Account, Trust I, Trust
IIIb and the Special Credits Limited Partnership acquired, respectively (i)
120,000, 420,000, 640,000, and 820,000 warrants which became exercisable
March 31, 1998 for one share of Common Stock per warrant (the "Tranche A
Warrants"), and (ii) 42,000, 147,000, 224,000, and 287,000 warrants which
were immediately exercisable for one share of Common Stock per warrant (the
"Tranche B Warrants", and, together with the Tranche A Warrants and the
warrant portion of the Units, the "Warrants"). The Tranche A Warrants and the
Tranche B Warrants were received as consideration for the renewal and
extension of credit pursuant to that certain Second Amended and Restated Loan
Agreement dated August 6, 1997, between the Issuer and Special Credits, as
agent and on behalf of the Special Credits Account, Trust I, Trust IIIb and
the Special Credits Limited Partnership.
The Special Credits Account, Trust I, Trust IIIb and the Special Credits
Limited Partnership acquired 30,000, 105,000, 160,000 and 205,000 shares,
respectively, of the Issuer's Common Stock on February 20, 1997 pursuant to
the Stipulation Regarding Letter of Credit Claim and Toyota-Tsusho Claim
filed with the United States Bankruptcy Court for the Northern District of
California (the "Bankruptcy Court") on February 20, 1997 by and among Media
Vision Technology Inc. ("Debtor"), the Official Unsecured Creditors'
Committee and Special Credits, as Agent and Nominee for the Special Credits
Trusts, the Special Credits Limited Partnership and the Special Credits
Account (the "Stipulation") which was deemed effective on March 20, 1995.
Pursuant to a transfer of claim, Special Credits was the holder of the
secured Letter of Credit Claim (the "Letter of Credit Claim"), as defined in
Debtor's Second Amended Joint Plan of Reorganization (the "Plan"). Pursuant
to terms of the Stipulation, the Letter of Credit Claim was allowed as a
secured claim under the Plan in the total amount of $2,300,000 and the
Special Credits Entities and the Special Credits Account received 575,000
shares of New Common Stock, as defined in the Plan, based on a price of $4.00
per share. Due to the proposed issuance of new Common Stock pursuant to the
Stipulation and Plan, the Special Credits Entities (including the
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<PAGE>
Special Credits Account) increased their ownership percentage in the Issuer's
Common Stock and, as a result, the number of shares of the Issuer's new
Common Stock actually issued pursuant to the Stipulation, as evidenced by the
stock certificates dated May 28, 1997, increased to a total of 593,406 shares
under the terms of the Plan.
Oaktree Account I, the Special Credits Account, Trust I, Trust IIIb and the
Special Credits Limited Partnership acquired 1,580,333, 100,085, 350,300,
533,800 and 684,000 shares, respectively, of the Issuer's Common Stock on
June 10, 1996 pursuant to the Common Stock Purchase Agreement dated as of
February 21, 1996 (as amended) by and among the Issuer, Special Credits, as
agent and on behalf of the Special Credits Partnership, Special Credits
Account and Special Credits Trusts, and certain other purchasers, including
Oaktree as the manager of Oaktree Account I. Approximately $2,133,450,
$135,115, $472,905, $720,630 and $923,400 of funds were used respectively by
Oaktree Account I, the Special Credits Account, Trust I, Trust IIIb and the
Special Credits Limited Partnership for the acquisition of such shares of the
Issuer's Common Stock which was obtained from the working capital of such
accounts, trusts and limited partnership.
The Special Credits Account, Trust I, Trust IIIb and the Special Credits
Limited Partnership acquired 150,000, 525,000, 800,000, and 1,025,000 shares,
respectively, of the Issuer's Common Stock on March 8, 1996 pursuant to the
Common Stock Purchase Agreement dated as of February 21, 1996 (as amended) by
and among the Issuer, Special Credits, as agent and on behalf of the Special
Credits Partnership, Special Credits Account and Special Credits Trusts, and
certain other purchasers. Approximately $150,000, $525,000, $800,000, and
$1,025,000 of funds were used respectively by the Special Credits Account,
Trust I, Trust IIIb and the Special Credits Limited Partnership for the
acquisition of such shares of the Issuer's Common Stock which was obtained
from the working capital of such accounts, trusts and limited partnership.
ITEM 4. PURPOSE OF TRANSACTION
The shares of the Issuer's Common Stock, the Warrants, the Units, the Series
B Preferred Stock, the Series A Preferred Stock and the Series C Preferred
Stock described herein were acquired for investment purposes and for the
purposes described herein. Based on continuing evaluation of the Issuer's
businesses and prospects, alternative investment opportunities and all other
factors deemed relevant in determining whether additional shares of the
Issuer's Common Stock will be acquired, additional shares of Common Stock may
be acquired in the open market or in privately negotiated transactions, or
some or all of the shares of the Issuer's Common Stock may be sold. Because
the Special Credits Limited Partnership, the Special Credits Trust, Trust
IIIb, Oaktree Account I and the Opportunities Fund own 20.97%, 9.81%, 14.37%,
7.88% and 25.74%, respectively, of the Issuer's Common Stock, they may be
deemed, either individually or in the aggregate, to have control of the
Issuer. Except as set forth elsewhere in this Schedule 13D, Special Credits,
the other TCW Related Entities, Oaktree, the Oaktree Accounts and the
Opportunities Fund have made no proposals and have entered into no
agreements, other than the Standby Purchase Agreement by and among the
Special Credits Entities, the Oaktree Entities and Issuer dated as of May 26,
1999, a Registration Rights Agreement by and among the Special Credits
Entities, the Oaktree Entities and the Issuer dated as of May 26, 1999 and a
Registration Rights Agreement by and among the Issuer and Special Credits
dated as of December 30, 1994, and amended as of February 21, 1996, June 10,
1996, August 8, 1997 and June 5, 1998 described below in Item 6, which would
be related to or would result in any of the matters described in Items
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<PAGE>
4(a)-(j) of Schedule 13D; however, as part of their ongoing review of
investment alternatives, Special Credits, the other TCW Related Entities,
Oaktree, the Oaktree Accounts and the Opportunities Fund may consider such
matters in the future and, subject to applicable laws, may formulate a plan
with respect to such matters subject to applicable law, and, from time to
time, Special Credits, such other TCW Related Entities, the Oaktree Accounts,
the Opportunities Fund or Oaktree may hold discussions with or make formal
proposals to management or the Board of Directors of the Issuer, other
stockholders of the Issuer or other third parties regarding such matters.
ITEM 5. INTEREST AND SECURITIES OF THE ISSUER
(a) As of the date of this Schedule 13D, Special Credits Limited
Partnership beneficially owns 27,651,174 shares of Common Stock of the Issuer
(approximately 18.29% of the Issuer's shares of Common Stock), 26,441,674 of
which are issued and outstanding and 1,209,500 of which the Special Credits
Limited Partnership has the right to acquire within 60 days following the
date hereof pursuant to the exercise of the Warrants; and Special Credits, as
the general partner of the Special Credits Limited Partnership, and as the
investment manager of the Special Credits Account may be deemed to
beneficially own 31,748,509 (27,651,174 shares of the Issuer's Common Stock
in the Special Credits Limited Partnership plus 4,097,335 shares of the
Issuer's Common Stock in the Special Credits Account) shares of Common Stock
of the Issuer (approximately 20.97% of the Issuer's shares of Common Stock),
30,362,009 of which are issued and outstanding and 1,386,500 of which Special
Credits has the right to acquire within 60 days following the date hereof
pursuant to the exercise of the Warrants.
As of the date of this Schedule 13D, Trust I beneficially owns 14,775,748
shares of Common Stock of the Issuer (approximately 9.81% of the Issuer's
shares of Common Stock), 14,156,248 of which are issued and outstanding and
619,500 of which Trust I has the right to acquire within 60 days following
the date hereof pursuant to the exercise of the Warrants; and Trust IIIb
beneficially owns 21,692,759 shares of Common Stock of the Issuer
(approximately 14.37% of the Issuer's shares of Common Stock), 20,748,759 of
which are issued and outstanding and 864,000 of which Trust IIIb has the
right to acquire within 60 days following the date hereof pursuant to the
exercise of the Warrants. TCW, as the trustee of the Special Credits Trusts
may be deemed to beneficially own 36,468,507 shares of Common Stock of the
Issuer (approximately 24.06% of the Issuer's shares of Common Stock),
39,905,007 of which are issued and outstanding and 1,563,000 of which TCW has
the right to acquire within 60 days following the date hereof pursuant to the
exercise of the Warrants.
TAMCO, as the managing partner of Special Credits may be deemed to
beneficially own the shares of the Issuer's Common Stock held by Special
Credits Limited Partnership and the Special Credits Account as set forth
above, all of which constitute 31,748,509 shares of Common Stock of the
Issuer (approximately 20.97% of the Issuer's shares of Common Stock).
TCWG, as the parent corporation of TCW and TAMCO (as set forth above), may be
deemed to beneficially own shares of the Issuer's Common Stock deemed to be
owned by the other TCW Related Entities, all of which constitutes 68,217,015
shares of the Issuer's Common Stock (approximately 44.60% of the Issuer's
shares of Common Stock). TCWG, TCW and TAMCO each disclaims beneficial
ownership of the shares of the Issuer's Common Stock reported herein
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<PAGE>
and the filing of this Statement shall not be construed as an admission that
any such entity is the beneficial owner of any securities covered by this
Statement.
Mr. Day may be deemed to beneficially own shares of the Issuer's Common Stock
deemed to be owned by the other TCW Related Entities (as set forth above),
all of which constitute 68,217,015 shares of the Issuer's Common Stock
(approximately 44.60% of the Issuer's shares of Common Stock). Mr. Day
disclaims beneficial ownership of the Issuer's Common Stock reported herein
and the filing of this Statement shall not be construed as an admission that
Mr. Day is the beneficial owner of any securities covered by this Statement.
Oaktree Account I beneficially owns 11,841,250 shares of Common Stock of the
Issuer (approximately 7.88% of the Issuer's shares of Common Stock),
11,591,250 of which are issued and outstanding and 250,000 of which Oaktree
Account I has the right to acquire within 60 days following the date hereof
pursuant to the exercise of the Warrants.
Oaktree Account II beneficially owns 392,535 shares of Common Stock of the
Issuer (approximately 0.26% of the Issuer's shares of Common Stock) 384,285
of which are issued and outstanding and 8,250 of which Oaktree Account II has
the right to acquire within 60 days following the date hereof pursuant to the
exercise of the warrants.
The Opportunities Fund beneficially owns 38,819,499 shares of Common Stock of
the Issuer (approximately 25.74% of the Issuer's shares of Common Stock)
38,002,749 which are issued and outstanding and 816,750 of which the
Opportunities Fund has the right to acquire within 60 days following the date
hereof pursuant to the exercise of the warrants.
Oaktree, as investment manager of the Oaktree Accounts and general partner of
the Opportunities Fund, may be deemed to be beneficially own 51,053,284
shares of Common Stock of the Issuer (approximately 33.79% of the Issuer's
shares of Common Stock), 38,387,034 of which are issued and outstanding and
825,000 of which Oaktree has the right to acquire within 60 days following
the date hereof pursuant to the exercise of the warrants.
(b) Special Credits, as the sole general partner of the Special Credits
Limited Partnership, has discretionary authority and control over all of the
assets of the Special Credits Limited Partnership pursuant to the limited
partnership agreement for such limited partnership including the power to
vote and dispose of the Issuer's Common Stock held by the Special Credits
Limited Partnership. In addition, Special Credits, as the investment manager
of the Special Credits Account has the discretionary authority and control
over all of the assets of such account pursuant to the investment management
agreement relating to such account including the power to vote and dispose of
the Issuer's Common Stock held in the name of the Special Credits Account.
Therefore, Special Credits has the power to vote and dispose of 31,748,509
shares of the Issuer's Common Stock.
TAMCO, as the managing general partner of Special Credits also has the power
to vote and dispose of the shares of the Issuer's Common Stock held by
Special Credits referenced above. Therefore, TAMCO has the power to vote and
dispose of 31,748,509 shares of the Issuer's Common Stock.
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<PAGE>
TCW, as the trustee of the Special Credits Trusts, has discretionary
authority and control over all the assets of the Special Credits Trusts
pursuant to the trust agreement for such trust including the power to vote
and dispose of the Issuer's Common Stock held by the Special Credits Trusts.
Therefore, TCW has the power to vote and dispose of 36,468,507 shares of the
Issuer's Common Stock.
TCWG, as the parent of TCW and TAMCO, may be deemed to have the power to vote
and dispose of the shares of the Issuer's Common Stock that the other TCW
Related Entities have power to vote and dispose, all of which constitutes
68,217,015 shares of the Issuer's Common Stock.
Oaktree, as the investment manager of the Oaktree Accounts, has discretionary
authority and control over all of the assets of such account pursuant to the
investment management agreements relating to such accounts, including the
power to vote and dispose of the Issuer's Common Stock held in the name of
the Oaktree Accounts. Oaktree, as the general partner of the Opportunities
Fund, also has the power to vote and dispose of the shares of the Issuer's
Common Stock held by the Opportunities Fund. Therefore, Oaktree has the power
to vote and dispose of 51,053,284 shares of the Issuer's Common Stock.
(c) Except for the purchases by the Special Credits Account, the Special
Credits Trusts and the Special Credits Partnership described herein, none of
the TCW Related Entities, and to the best of their knowledge, none of their
respective executive officers, directors, or general partners has effected
transactions involving the issuer's Common Stock during the last 60 days.
Except for the purchases by the Oaktree Accounts and the Opportunities Fund
described herein, neither Oaktree, nor, to the best of its knowledge, any of
its executive officers or members, have effected transactions involving the
Issuer's Common Stock during the last 60 days. The TCW Related Entities,
Oaktree and each of the individuals listed in Item 2 disclaim beneficial
ownership of the shares of the Issuer's Common Stock reported herein (except
for the shares owned directly by such individuals) and the filing of this
Statement shall not be construed as an admission that any such person is the
beneficial owner of any securities covered by this Statement.
(d) None
(e) Not applicable
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER
The Opportunities Fund agreed to act as Standby Purchaser in connection with
the Rights Offering pursuant to the Standby Purchase Agreement. The Oaktree
Entities and the Special Credits Entities also entered into a Registration
Rights Agreement with the Issuer dated May 26, 1999 in connection with the
Rights Offering. Both the Standby Purchase Agreement and the Registration
Rights Agreement are attached as exhibits to this Amendment No.7.
Special Credits, as general partner of the Special Credits Limited
Partnership, receives a fee for managing all the assets of the Special
Credits Limited Partnership. In addition, Special Credits, as investment
manager of the Special Credits Account, receives a management fee for
managing the
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<PAGE>
assets of the Special Credits Account. The Special Credits Limited
Partnership and the Special Credits Account have similar investment
strategies of investing in financially distressed entities; however, the
implementation of these strategies may differ from partnership to account and
account to account.
TCW, as trustee of the Special Credits Trusts, receives a management fee for
managing all the assets of the Special Credits Trusts. The Special Credits
Trusts each have an investment strategy similar to the Special Credits
Limited Partnership and Special Credits Account in investing in financially
distressed entities. However, the implementation of this strategy may differ
from entity to entity and account to account.
Oaktree, as investment manager of the Oaktree Accounts and general partner of
the Opportunities Fund, receives a management fee for managing the assets of
the Oaktree Accounts and the Opportunities Fund, earns an incentive fee from
the Oaktree Accounts and has a carried interest in the Opportunities Fund.
The Oaktree Accounts and the Opportunities Fund have an investment strategy
of investing in financially distressed entities. The implementation of that
strategy may differ from the implementation of similar strategies by the
Special Credits Entities and the Special Credits Account.
Except to the extent the securities referred to in this Statement constitute
assets of the Special Credits Entities, the Special Credits Account, the
Oaktree Accounts and the Opportunities Fund and except as provided in the
Registration Rights Agreement among the Issuer and Special Credits, as agent
and on behalf of the Special Credits Partnership, Special Credits Account and
Special Credits Trusts, by TAMCO, its managing general partner dated as of
December 30, 1994 and amended by and among the (i) Issuer, (ii) Special
Credits, as agent and on behalf of the Special Credits Partnership, Special
Credits Account and Special Credits Trusts, by TAMCO, its managing general
partner, (iii) The Copernicus Fund, L.P. by DDJ Capital Management, LLC, its
general partner and (iv) The Galileo Fund, L.P. by DDJ Capital Management,
LLC, its general partner as of February 21, 1996 and as further amended June
10, 1996, August 6, 1997 and June 5, 1998 providing that the Special Credits
Entities, the Special Credits Account and Oaktree Account I have demand
registration rights, "piggy-back" registration rights and shelf registration
rights with respect to all of the shares of the Issuer's Common Stock
currently held by such entities; the Common Stock Purchase Agreement dated as
of February 21, 1996 (as amended) as more fully described in Item 3 above;
the Unit Purchase Agreement dated August 6, 1997 as more fully described in
Item 3 above and the 8% Series B Convertible Preferred Stock Purchase
Agreement dated June 5, 1998 as more fully described in Item 3 above, there
are no contracts, arrangements, understandings or relationships (legal or
otherwise) among the persons named in Item 2, or, to the best of the TCW
Related Entities' and Oaktree's knowledge, their respective executive
officers, directors or general partners, or between such persons and any
other person with respect to any securities of the Issuer.
ITEM 6. MATERIAL TO BE FILED AS EXHIBITS
The following is filed herewith as an Exhibit to this Schedule 13D:
Exhibit 1 -- Standby Purchase Agreement dated as of May 19, 1999 by and
between the Issuer Special Credits and Oaktree
-25-
<PAGE>
Exhibit 2 -- Registration Rights Agreement dated as of May 19, 1999 by and
between the Issuer, Special Credits and Oaktree
-26-
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of its knowledge and belief, the
undersigned certify that the information set forth in this Statement is true,
complete and correct.
Dated as of this 26th day of May, 1999.
THE TCW GROUP, INC.
By: /s/ Susan Marsch
- ---------------------------------------
Susan Marsch
Authorized Signatory
TRUST COMPANY OF THE WEST
By: /s/ Kenneth Liang
- ---------------------------------------
Kenneth Liang, Authorized Signatory
TCW ASSET MANAGEMENT COMPANY
By: /s/ Kenneth Liang
- ---------------------------------------
Kenneth Liang, Authorized Signatory
TCW SPECIAL CREDITS
By: /s/ Kenneth Liang
- ---------------------------------------
Kenneth Liang, Authorized Signatory of
TCW Asset Management Company, the
Managing General Partner of TCW
Special Credits
TCW SPECIAL CREDITS FUND IIIb
By: /s/ Kenneth Liang
- ---------------------------------------
Kenneth Liang, Authorized Signatory
of TCW Asset Management Company, the Managing
General Partner of TCW Special Credits, the
General Partner of TCW Special Credits Fund IIIb
-27-
<PAGE>
TCW SPECIAL CREDITS TRUST
By: /s/ Kenneth Liang
- ---------------------------------------
Kenneth Liang, Authorized Signatory of
Trust Company of the West, the trustee of
TCW Special Credits Trust
TCW SPECIAL CREDITS TRUST IIIb
By: /s/ Kenneth Liang
- ---------------------------------------
Kenneth Liang, Authorized Signatory of
Trust Company of the West, the trustee of
TCW Special Credits Trust IIIb
ROBERT A. DAY
By: /s/ Susan Marsch
- ---------------------------------------
Susan Marsch
Under Power of Attorney dated March 31, 1999, on file with
Schedule 13G for Hibbett Sporting Goods, Inc., dated April 9, 1999
OAKTREE CAPITAL MANAGEMENT, LLC
By: /s/ Kenneth Liang
- ---------------------------------------
Kenneth Liang
Managing Director
General Counsel
WEYERHAEUSER COMPANY MASTER RETIREMENT TRUST
By: Oaktree Capital Management, LLC
its Investment Manager
By: /s/ Kenneth Liang
- ---------------------------------------
Kenneth Liang
Managing Director
General Counsel
OCM OPPORTUNITIES FUND II, L.P.
By: Oaktree Capital Management, LLC
its General Partner
-28-
<PAGE>
By: /s/ Kenneth Liang
- ---------------------------------------
Kenneth Liang
Managing Director
General Counsel
-29-
<PAGE>
SCHEDULE I
BOARD OF DIRECTORS
OF
TCW GROUP, INC.
All of the following individuals are directors of TCW Group, Inc. Each
director is a citizen of the United States of America unless otherwise
specified below:
JOHN M. BRYAN
- -------------
Partner
Bryan & Edwards
600 Montgomery St., 35th Floor
San Francisco, CA 94111
ROBERT A. DAY
- -------------
Chairman of the Board,
Chairman and Chief Executive Officer
Trust Company of the West
200 Park Avenue, Suite 2200
New York, New York 10166
DAMON P. DE LASZLO, ESQ.
- ------------------------
Managing Director of Harwin
Engineers S.A., Chairman & D.P.
Advisers Holdings Limited
Byron's Chambers
A2 Albany, Piccadilly
London W1V 9RD - England
(Citizen of United Kingdom)
WILLIAM C. EDWARDS
- ------------------
Partner - Bryan & Edwards
3000 Sand Hill Road, Suite 190
Menlo Park, CA 94025
ERNEST O. ELLISON
- -----------------
Vice Chairman
Trust Company of the West
865 South Figueroa St., Suite 1800
Los Angeles, California 90017
HAROLD R. FRANK
- ---------------
Chairman of the Board
Applied Magnetics Corporation
75 Robin Hill Rd.
Goleta, CA 93017
CARLA A. HILLS
- --------------
1200 19th Street, N.W.
5th Floor
Washington, DC 20036
-30-
<PAGE>
DR. HENRY A. KISSINGER
- ----------------------
Chairman
Kissinger Associates, Inc.
350 Park Ave., 26th Floor
New York, NY 10022
THOMAS E. LARKIN, JR.
- ---------------------
President
Trust Company of the West
865 South Figueroa St., Suite 1800
Los Angeles, CA 90017
KENNETH L. LAY
- --------------
Enron Corp.
1400 Smith Street
Houston, TX 77002-7369
MICHAEL T. MASIN, ESQ.
- ----------------------
Vice Chairman
GTE Corporation
One Stamford Forum
Stamford, CT 06904
EDFRED L. SHANNON, JR.
- ----------------------
Investor/Rancher
1000 S. Fremont Ave.
Alhambra, CA 91804
ROBERT G. SIMS
- --------------
Private Investor
11828 Rancho Bernardo, Box 1236
San Diego, CA 92128
MARC I. STERN
- -------------
President
The TCW Group, Inc.
865 South Figueroa St., Suite 1800
Los Angeles, CA 90017
-31-
<PAGE>
Exhibit 1
STANDBY PURCHASE AGREEMENT
dated as of May 26, 1999
between
AUREAL SEMICONDUCTOR, INC.
and
OAKTREE CAPITAL MANAGEMENT, LLC,
ON BEHALF OF THE ENTITIES NAMED HEREIN
$20,000,000
Rights to Purchase Shares of Common Stock
<PAGE>
STANDBY PURCHASE AGREEMENT
This Standby Purchase Agreement, dated as of May 26, 1999 (the
"AGREEMENT"), is entered into by and between Oaktree Capital Management, LLC,
a California limited liability company (together with its affiliates,
"OAKTREE"), on behalf of each of the entities set forth on Annex A hereto
under the heading "Oaktree Investors" (collectively with Oaktree, the
"OAKTREE INVESTORS"), Trust Company of the West ("TCW"), on behalf of each of
the entities set forth on Annex A hereto under the heading "TCW Investors"
(collectively with TCW, the "TCW INVESTORS" and, together with the Oaktree
Investors, collectively, the "INVESTORS") and Aureal Semiconductor, Inc., a
Delaware corporation (the "COMPANY").
WHEREAS, as part of its restructuring, the Company proposes to
distribute to its stockholders rights ("RIGHTS") to purchase an aggregate
33,333,333 shares (the "RIGHTS SHARES") of its common stock, par value $.001
per share (the "COMMON STOCK"), at a purchase price of $0.60 per share (the
offering of the Rights Shares pursuant to the Rights being referred to herein
as the "RIGHTS OFFERING");
WHEREAS, each Right will include a basic subscription privilege,
pursuant to which each stockholder will have the right to purchase its pro
rata portion of Rights Shares (the "BASIC SUBSCRIPTION PRIVILEGE") at the
subscription price of $0.60 per Rights Share (the "SUBSCRIPTION PRICE") and
an oversubscription privilege by which persons who exercise their Basic
Subscription Privilege in full may subscribe to purchase Rights Shares not
purchased by other holders of Rights, subject to proration (the
"OVERSUBSCRIPTION PRIVILEGE");
WHEREAS, the Company has filed with the Securities and Exchange
Commission (the "COMMISSION") a registration statement on Form S-3 (No.
333-75631) covering the registration of the Rights and the Rights Shares
under the Securities Act of 1933, as amended, and the rules and regulations
thereunder (collectively, the "1933 ACT"), including the related preliminary
prospectus or prospectuses. Promptly after the Registration Statement is
declared effective by the Commission, the Company will prepare and file a
prospectus in accordance with the provisions of Rule 430A under the 1933 Act
("RULE 430A") and paragraph (b) of Rule 424 under the 1933 Act ("RULE
424(b)"). The information included in such prospectus that is omitted from
such registration statement at the time it becomes effective but that will be
deemed to be part of such registration statement pursuant to paragraph (b) of
Rule 430A is referred to as "RULE 430A INFORMATION." Each prospectus used
before such registration statement becomes effective is herein called a
"preliminary prospectus." Such registration statement, including the exhibits
and schedules thereto, if any, and the documents incorporated by reference
therein pursuant to Item 12 of Form S-3 under the 1933 Act, at the time it
becomes effective, and including the Rule 430A Information, is herein called
the "REGISTRATION STATEMENT." Any registration statement filed pursuant to
Rule 462(b) under the 1933 Act is herein referred to as the "RULE 462(b)
REGISTRATION STATEMENT," and after such filing the term "REGISTRATION
STATEMENT" shall be deemed to include the Rule 462(b) Registration Statement.
The final prospectus, including the documents incorporated by reference
therein pursuant to Item 12 of Form S-3 under the 1933 Act, in the form that
it was first furnished to stockholders of the Company in connection with the
Rights Offering is herein called the "PROSPECTUS." For purposes of this
Agreement, all references to the Registration Statement, any preliminary
prospectus, the Prospectus or any amendment or supplement to any of the
foregoing shall be deemed to include
<PAGE>
the copy filed with the Commission pursuant to its Electronic Data Gathering,
Analysis and Retrieval system ("EDGAR"). All references in this Agreement to
financial statements and schedules and other information which is
"contained," "included" or "stated" in the Registration Statement, any
preliminary prospectus or the Prospectus (and all other references of like
import) shall be deemed to mean and include all such financial statements and
schedules and other information which is or is deemed to be incorporated by
reference in the Registration Statement, any preliminary prospectus or the
Prospectus, as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement, any preliminary
prospectus or the Prospectus shall be deemed to mean and include the filing
of any document under the Securities Exchange Act of 1934, as amended,
together with the rules and regulations thereunder (collectively, the "1934
ACT"), incorporated by reference in the Registration Statement, such
preliminary prospectus or the Prospectus, as the case may be;
WHEREAS, the Investors are the holders of all of the issued and
outstanding shares of the Company's 8% Series B Convertible Preferred Stock
(the "SERIES B STOCK"), which is currently convertible into Common Stock at
the conversion price of $2.50 per share of Common Stock, which conversion
price shall be adjusted to $2.04 per share of Common Stock in accordance with
Certificate of Designation governing the Series B Stock as a result of the
Rights Offering (the "ADJUSTED CONVERSION PRICE"); and
WHEREAS, in addition to the shares of Common Stock to be issued
upon conversion of the Series B Stock at the Adjusted Conversion Price (the
"CONVERSION SHARES") the Company, as part of its restructuring, has agreed to
issue 620.92 shares of Common Stock in respect of each share of Series B
Stock submitted for conversion prior to the consummation of the Rights
Offering, up to an aggregate of 26,388,922 shares of Common Stock (the
"ADDITIONAL SHARES" and, together with the Rights Shares and the Conversion
Shares, collectively, the "SHARES");
WHEREAS, in order to help assure the success of the Rights
Offering, the Investors listed on Annex B hereto (the "RIGHTS INVESTORS") are
willing to commit, on a several and not a joint and several basis, to
exercise all of their Basic Subscription Privileges and their
Oversubscription Privileges to subscribe for a portion of the aggregate of
33,333,333 Rights Shares equal to the respective percentages appearing next
to their names on Annex B hereto, subject to the terms and conditions set
forth herein; and
NOW THEREFORE, in consideration of the mutual agreements set forth
herein, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Company and the Investors do
hereby agree as follows:
SECTION 1.
THE RIGHTS OFFERING; STANDBY PURCHASE COMMITMENT; ADDITIONAL SHARES.
(a) Subject to the terms and conditions set forth herein, on or before
5:00 p.m. on the later of (i) May 21, 1999, and (ii) the expiration date of
the Rights (the "EXPIRATION DATE"), each of the Rights Investors will take
all such action as may be required to duly and effectively exercise all of
the Basic Subscription Privileges to which it may be entitled, and to
exercise such
2
<PAGE>
Rights Investor's proportionate share of the Oversubscription Privileges such
that the aggregate amount of Rights Shares for which the Oversubscription
Privileges are exercised by the Rights Investors is equal to the Rights
Shares less the sum of (x) the Rights Investors' aggregate Basic Subscription
Privileges PLUS (y) the aggregate amount of Rights Shares for which the
Company's stockholders other than the Rights Investors shall have exercised
their Basic Subscription Privileges and Oversubscription Privileges.
(b) The Company will issue 620.92 Additional Shares in respect of each
share of Series B Stock converted into 490.19 shares of Common Stock at the
Adjusted Conversion Price prior to the later of (i) May 21, 1999 or (ii) the
Expiration Date.
SECTION 2.
REPRESENTATIONS AND WARRANTIES.
(a) The Company represents and warrants to each Investor and
agrees with each Investor, as follows:
(i) The Company meets the requirements for use of Form S-3
under the 1933 Act. The Registration Statement and Rule 462(b) Registration
Statement will be prepared by the Company in conformity with the requirements
of the 1933 Act and will be filed with the Commission under the 1933 Act.
Prior to the commencement of the Rights Offering, each of the Registration
Statement and any Rule 462(b) Registration Statement will become effective
under the 1933 Act and no stop order suspending the effectiveness of the
Registration Statement or any Rule 462(b) Registration Statement will have
been issued and no proceedings for that purpose will have been instituted or
be pending or, to the knowledge of the Company, contemplated by the
Commission, and any request on the part of the Commission for additional
information will have been complied with. A copy of each of the Registration
Statement and the Rule 462(b) Registration Statement will be delivered by the
Company to each Investor. At the respective times the Registration Statement
or any Rule 462(b) Registration Statement become effective, the Registration
Statement and the Rule 462(b) Registration Statement will comply in all
material respects with the requirements of the 1933 Act and will not contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and at the time any post-effective amendments to the Registration
Statement or any Rule 462(b) Registration Statement become effective, any
such post-effective amendments will comply in all material respects with the
requirements of the 1933 Act and will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading. Neither the
Prospectus nor any amendments or supplements thereto, at the time the
Prospectus or any such amendment or supplement is issued, will contain any
untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading, and the Prospectus, as amended or supplemented, at the Expiration
Date will not include an untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading. Each preliminary prospectus and the
prospectus filed as part of the Registration Statement as originally filed or
as part of any amendment thereto, or when filed pursuant to Rule 424 under
the 1933 Act, will comply when so filed in all material respects with
3
<PAGE>
the 1933 Act and each preliminary prospectus and the final Prospectus will be
identical to the electronically transmitted copies thereof filed with the
Commission pursuant to EDGAR, except to the extent permitted by Regulation
S-T.
(ii) The accountants who certify the financial statements
and supporting schedules included in the Registration Statement will be
independent public accountants as required by the 1933 Act.
(iii) The financial statements and the supporting schedules
included in the Registration Statement and the Prospectus will present fairly
the financial position of the Company and its consolidated subsidiaries as at
the dates indicated and the results of their operations for the periods
specified; said financial statements will have been prepared in conformity
with generally accepted accounting principles applied on a consistent basis
(except as may otherwise be indicated therein) ("GAAP"); and the supporting
schedules included in the Registration Statement will present fairly the
information required to be stated therein.
(iv) Since April 4, 1999, (A) there has been no material
adverse change in the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company and its subsidiaries
considered as one enterprise, whether or not arising in the ordinary course
of business, (B) there have been no transactions entered into by the Company
or its subsidiaries, other than those in the ordinary course of business,
which are material with respect to the Company and its subsidiaries
considered as one enterprise, and (C) there has been no dividend or
distribution of any kind (other than the distribution of the Rights and
dividends declared and paid with respect to the Series B Stock) declared,
paid or made by the Company on any class of its capital stock.
(v) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Delaware with corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Registration
Statement; and the Company is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure to so qualify
would not have a material adverse effect on the condition, financial or
otherwise, or the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise (a "MATERIAL
ADVERSE EFFECT").
(vi) Each subsidiary of the Company (as such term is defined
in Rule 405 under the 1933 Act) (each a "SUBSIDIARY" and collectively, the
"SUBSIDIARIES"), has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has corporate power and authority to own, lease and operate
its properties and to conduct its business and is duly qualified as a foreign
corporation to transact business and is in good standing in each jurisdiction
in which such qualification is required, whether by reason of the ownership
or leasing of property or the conduct of business, except where the failure
to so qualify would not have a Material Adverse Effect; except as otherwise
disclosed in the Registration Statement, all of the issued and outstanding
capital stock of each such Subsidiary has been duly authorized and validly
issued, is fully paid and non-assessable and
4
<PAGE>
is owned by the Company, directly or through subsidiaries, free and clear of
any security interest, mortgage, pledge, lien, encumbrance, claim or equity.
(vii) The authorized, issued and outstanding capital stock of
the Company is as set forth in the Company's annual report on Form 10-K for
the period ended January 3, 1999, filed with the Commission (except for
subsequent issuances, if any, of additional Series B Stock in payment of
dividends payable with respect to the Series B Stock and issuances pursuant
to this Agreement, pursuant to reservations, agreements or employee benefit
plans referred to in the Registration Statement or pursuant to the exercise
of convertible securities, options or warrants referred to in the
Registration Statement). The shares of issued and outstanding Common Stock
have been duly authorized and validly issued and are fully paid and
non-assessable; the Common Stock conforms to all statements relating thereto
contained in the Registration Statement; and the issuance of the Shares will
not be subject to preemptive or other similar rights.
(viii) The Rights Shares to be issued and sold pursuant to the
Rights have been duly authorized, and when issued and delivered pursuant to
the Rights, against payment of the Subscription Price, will be duly and
validly issued, fully paid and non-assessable.
(ix) The Conversion Shares have been duly authorized and
when issued and delivered in accordance with the Certificate of Designation
governing the Series B Stock, will be validly issued, fully paid and
non-assessable.
(x) The Additional Shares have been duly authorized, and
when issued and delivered in accordance with this Agreement, will be validly
issued, fully paid and non-assessable.
(xi) Neither the Company nor any of its Subsidiaries is in
violation of its charter or by-laws or, except where such default would not
have a Material Adverse Effect, in default in the performance or observance
of any obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, loan agreement, note, lease or other
instrument to which the Company or any of its subsidiaries is a party or by
which it or any of them may be bound, or to which any of the material
property or assets of the Company or any subsidiary is subject; the
execution, delivery and performance of this Agreement, the Rights and the
Registration Rights Agreement (as defined herein) and the consummation of the
transactions contemplated herein and therein and compliance by the Company
with its obligations hereunder and thereunder have been duly authorized by
all necessary corporate action and will not conflict with or constitute a
breach of, or default under, or result in the creation or imposition of any
lien, charge or encumbrance upon any material property or assets of the
Company or any of its subsidiaries pursuant to, any contract, indenture,
mortgage, loan agreement, note, lease or other instrument to which the
Company or any of its subsidiaries is a party or by which it or any of them
may be bound, or to which any of the material property or assets of the
Company or any subsidiary is subject, nor will such action result in any
violation of the provisions of the charter or by-laws of the Company or any
applicable law, rule, regulation, judgment, order or administrative or court
decree.
5
<PAGE>
(xii) There is no action, suit or proceeding before or by any
court or governmental agency or body, domestic or foreign, now pending, or,
to the knowledge of the Company, threatened, against or affecting the Company
or any of its subsidiaries, which is required to be disclosed in the
Registration Statement (other than as disclosed therein); all pending legal
or governmental proceedings to which the Company or any of its subsidiaries
is a party or of which any of their respective property or assets is the
subject which are not described in the Registration Statement, including
ordinary routine litigation incidental to the business, are, considered in
the aggregate, not material to the Company and its subsidiaries considered as
one enterprise; and there are no contracts or documents of the Company or any
of its subsidiaries which are required to be filed as exhibits to the
Registration Statement by the 1933 Act which have not been so filed.
(xiii) No authorization, approval or consent of any court or
governmental authority or agency is necessary in connection with the
offering, issuance or sale of the Rights Shares hereunder or the issuance of
the Additional Shares, except such as may be required under the 1933 Act or
state securities laws.
(xiv) Each of this Agreement and the Registration Rights
Agreement constitute valid and binding obligations of the Company enforceable
in accordance with their respective terms except as enforcement may be
limited by bankruptcy, insolvency or other similar laws affecting the
enforcement of creditors' right generally. The Board of Directors of the
Company, by action of the Special Committee of Disinterested Directors, has
authorized and approved this Agreement, the Registration Rights Agreement and
the transactions relating thereto.
(xv) The Company and its subsidiaries have good title to all
real and personal properties owned by them, in each case free and clear of
all liens, encumbrances and debts except (A) for property pledged and/or
mortgaged pursuant to the Loan and Security Agreement among the Company and
Transamerica Business Credit Corporation and Goldman Sachs Credit Partners LP
and the other lenders thereunder, as amended (the "CREDIT AGREEMENT"), (B) as
do not materially interfere with the use made and proposed to be made of such
properties, (C) as set forth in the Registration Statement or (D) as could
not reasonably be expected to have a Material Adverse Effect.
(xvi) Except as set forth in the Registration Statement and
all other currently effective registration statements filed by the Company
under the 1933 Act, there are no persons with registration or other similar
rights to have any securities (debt or equity) of the Company registered
pursuant to the Registration Statement or otherwise registered by the Company
under the 1933 Act.
(xvii) The documents to be incorporated or deemed to be
incorporated by reference in the Prospectus, at the time they were or are
filed with the Commission, complied and will comply as to form in all
material respects with the requirements of the 1934 Act, and, when read
together with the other information in the Prospectus, at the time the
Registration Statement and any amendments thereto becomes effective and at
the Closing, will not contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make
the statements therein not misleading.
6
<PAGE>
(xviii) Except as disclosed in the Registration Statement,
and except as to matters which, individually or in the aggregate, would not
have a Material Adverse Effect, neither the Company nor any of its
subsidiaries has any material liabilities or obligations (absolute, accrued,
contingent or otherwise, known or unknown), other than liabilities incurred
in the ordinary course of business subsequent to April 4, 1999.
(xix) Except for such matters as would not, individually or
in the aggregate, have a Material Adverse Effect; (i) the Company and its
subsidiaries hold all permits, licenses, variances, exemptions, orders and
approvals (the "PERMITS") of all governmental entities necessary for the
operation of the businesses of the Company and its subsidiaries, (ii) the
Company and its Subsidiaries are in compliance with the terms of the Permits
and (iii) except as disclosed in the Registration Statement, the businesses
of the Company and its Subsidiaries are not being conducted in violation of
any law, ordinance, or regulation of any governmental entity.
(xx) Each of the Company and its Subsidiaries has filed all
tax returns required to be filed by any of them and has paid (or the Company
has paid on its behalf) or has set up an adequate reserve for the payment of,
all taxes required to be paid in respect of the periods covered by such
returns. The information contained in such tax returns is true, complete and
accurate in all material respects. Neither the Company nor any of its
Subsidiaries is delinquent in the payment of any tax, assessment or
governmental charge except to the extent of reserves established therefor. No
deficiencies for any taxes have been proposed, asserted or assessed against
the Company or any of its subsidiaries that have not been finally settled or
paid in full except to the extent of reserves established therefor. No
requests for waivers of the time to assess any such tax are pending and there
are no outstanding audit examinations, deficiency litigations or refund
litigations with respect to the Company or any of its subsidiaries. The
federal income tax returns of the Company and each of its Subsidiaries
consolidated in such returns have been examined by and settled with the
Internal Revenue Service for all years through December 31, 1994.
(xxi) Except as set forth in the Registration Statement, and
except for such matters as will not, individually or in the aggregate, have a
Material Adverse Effect, the Company and each of its Subsidiaries (i) have
obtained all applicable permits, licenses and other authorizations which are
required to be obtained under all applicable Environmental Laws, (ii) are in
compliance with all terms and conditions of such required permits, licenses
and authorizations and also are in compliance with all other applicable
requirements of Environmental Laws and (iii) and are not aware of nor have
received notice of any past activity, practice, incident or action which will
give rise to any common law or statutory liability or otherwise form the
basis of any claim, action, suit or proceeding, against the Company or any of
its Subsidiaries based on or resulting from the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling or the
emission, discharge or release into the environment, of any pollutant,
contaminant or hazardous or toxic material or waste.
(xxii) The Company and each of its Subsidiaries carry, or are
covered by, insurance in such amounts and covering such risks as is adequate for
the conduct of their respective businesses and the value of their respective
properties and as is customary for companies engaged in similar businesses in
similar industries.
7
<PAGE>
(b) Any certificate identified as a certificate under this
Agreement and signed by any officer of the Company and delivered to the
Investors or to counsel for the Investors shall be deemed a representation
and warranty by the Company to each Investor as to the matters covered
thereby.
(c) Each Investor severally represents and warrants to the Company
as of the date hereof, and agrees with the Company, as follows:
(i) This Agreement has been duly authorized, executed and
delivered by such Investor.
(ii) The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated herein and
compliance by such Investor with its obligations hereunder have been duly
authorized by all necessary action and will not conflict with or constitute a
breach of, or default under, or result in the creation or imposition of any
lien, charge or encumbrance upon any material property or assets of such
Investor or any of its subsidiaries pursuant to, any material contract,
indenture, mortgage, loan agreement, note, lease or other instrument to which
such Investor is a party or by which it may be bound, or to which any of the
material property or assets of such Investor is subject, nor will such action
result in any violation of the provisions of the charter or by-laws, or
comparable governing documents of such Investor or any applicable law, rule,
regulation, judgment, order or administrative or court decree.
(iii) Such Investor has, or has available to it, sufficient
funds for the performance of its obligations pursuant to this Agreement.
SECTION 3.
CLOSING.
(a) As promptly as practicable, but in no event later than five
business days following the Expiration Date (the "NOTIFICATION DATE"), the
Company shall notify each Rights Investor of the amount of Rights Shares
required to be purchased by it pursuant to its Oversubscription Privileges.
On or prior to 10:00 a.m. on the second business day following the
Notification Date, a closing (the "CLOSING") shall be held at the offices of
Gray Cary Ware & Freidenrich LLP, counsel for the Company, at 400 Hamilton
Avenue, Palo Alto, California or at such other place as the parties may
agree. At the Closing, (i) the Company shall deliver, or cause to be
delivered, to the Investors (A) each of the documents and agreements
necessary to evidence satisfaction of the conditions to the Investors'
obligations as set forth herein, including the documents required to be
delivered pursuant to Section 5 hereof; and (ii) each Rights Investor shall
make payment in full of the full purchase price for the foregoing Rights
Shares by wire transfer of funds to the subscription agent for the Rights
Offering.
(b) Delivery of the Rights Shares to the Rights Investors shall by
made by the subscription agent for the Rights Offering in accordance with the
terms and provisions of the Rights Offering. Delivery of the Conversion
Shares and the Additional Shares shall be made to the Investors at the
Closing through delivery of an instruction letter countersigned by the
transfer
8
<PAGE>
agent of the Common Stock and in form and substance satisfactory to the
Investors (the "INSTRUCTION LETTER").
SECTION 4.
COVENANTS OF THE COMPANY.
The Company covenants with each Investor as follows:
(a) The Company shall make all necessary filings with respect to
the transactions contemplated by this Agreement, under the 1933 Act and the
1934 Act, under applicable blue sky or similar securities laws and shall use
all reasonable efforts to obtain required approvals and clearances with
respect thereto. The Company will comply with the requirements of Rule 430A
and will notify the Investors immediately, and confirm the notice in writing,
(i) when any post-effective amendment to the Registration Statement shall
become effective, or any supplement to the Prospectus or any amended
Prospectus shall have been filed, (ii) of the receipt of any comments from
the Commission on the Registration Statement, (iii) of any request by the
Commission for any amendment to the Registration Statement or any amendment
or supplement to the Prospectus or for additional information, (iv) of the
issuance by the Commission of any stop order suspending the effectiveness of
the Registration Statement or the initiation of any proceedings for that
purpose, and (v) of the suspension of the qualification of the Rights Shares
for offering or sale in any jurisdiction, or the initiation or threatening of
any proceedings for any such purpose. The Company will promptly effect the
filings necessary pursuant to Rule 424(b) and will take such steps as it
deems necessary to ascertain promptly whether the form of prospectus
transmitted for filing under Rule 424(b) was received by the Commission and,
in the event that it was not, it will promptly file such prospectus. The
Company will make every reasonable effort to prevent the issuance of any stop
order and, if any stop order is issued, to obtain the lifting thereof at the
earliest possible moment.
(b) The Company will prepare and file the Registration Statement
or any amendments thereto (including any filing under Rule 462(b)) or any
amendment or supplement to either the prospectus included in the Registration
Statement at the time it becomes effective or to the Prospectus, whether
pursuant to the 1933 Act, the 1934 Act or otherwise, will furnish the
Investors with copies of the Registration Statement and any such amendment or
supplement a reasonable amount of time prior to such proposed filing or use,
as the case may be, and will not file any such amendment or supplement or use
any such prospectus to which any Investor or counsel for the Investors shall
reasonably object, provided that such objection shall not prevent the filing
of any such amendment or supplement which, in the opinion of counsel for the
Company, is required to be filed by the requirements of the 1933 Act or the
1933 Act Regulations.
(c) If any event shall occur as a result of which it is necessary,
in the opinion of counsel for the Investors, to amend or supplement the
Prospectus in order to make the Prospectus not misleading in the light of the
circumstances existing at the time it is delivered to a purchaser, or if for
any other reason it shall be necessary to amend or supplement the Prospectus
in order to comply with the 1933 Act or the 1934 Act, the Company will
forthwith amend or supplement the Prospectus (in form and substance
satisfactory to counsel for the Investors and in
9
<PAGE>
compliance with the 1933 Act) so that, as so amended or supplemented, the
Prospectus will not include an untrue statement of a material fact or omit to
state a material fact necessary to make the statement therein, in the light
of the circumstances existing at the time it is delivered to a purchaser, not
misleading and will comply with the 1933 Act and the 1934 Act, and the
Company will furnish to the Investors a reasonable number of copies of such
amendment or supplement.
(d) The Company will (i) use the net proceeds received by it from
the sale of the Rights Shares to repay amounts outstanding under the Credit
Agreement and (ii) not, without the prior written consent of the Oaktree
Investors, borrow any Tranche B Advances (as defined in the Credit Agreement)
under the Credit Agreement.
(e) If, at the time that the Registration Statement becomes
effective, any information shall have been omitted therefrom in reliance upon
Rule 430A under the 1933 Act, then immediately following the execution of
this Agreement, the Company will prepare, and file or transmit for filing
with the Commission in accordance with such Rule 430A and Rule 424(b) of the
1933 Act Regulations, copies of an amended Prospectus, or, if required by
such Rule 430A, a post-effective amendment to the Registration Statement
(including an amended Prospectus), containing all information so omitted.
(f) The Company and its Subsidiaries shall afford to the Investors
and their accountants, counsel and other representatives reasonable access
during normal business hours (and at such other times as the parties may
mutually agree) throughout the period prior to the Closing to all of its
properties, books, contracts, commitments, records and personnel and, during
such period, the Company shall furnish promptly to the Investors (i) a copy
of each report, schedule and other document filed or received by it pursuant
to the requirements of federal or state securities laws and (ii) all other
information concerning its business, properties and personnel as such
Investor may reasonably request.
(g) In addition to and without limiting the Company's covenants
contained in SECTION 5(a), the Company will (i) take promptly all actions
necessary to make the filings required of the Company under Section 7A of the
Clayton Act (Title II of the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended) and the rules and the regulations thereunder (collectively,
the "HSR ACT"), (ii) comply at the earliest practicable date with any request
for additional information received by the Company from the Federal Trade
Commission or the Antitrust Division of the Department of Justice pursuant to
the HSR Act and (iii) cooperate with the Rights Investors in connection with
Rights Investors' filing under the HSR Act and in connection with resolving
any investigation or other regulatory inquiry concerning the transactions
contemplated by this Agreement commenced by either the Federal Trade
Commission or the Antitrust Division of the Department of Justice or state
attorneys general.
(h) The Company will reimburse the Investors for all out-of-pocket
expenses reasonably incurred by them in connection with this Agreement and
the consummation of the transactions contemplated hereby, whether or not the
transactions contemplated in this Agreement are consummated, including
without limitation reasonable fees and disbursements of counsel.
10
<PAGE>
SECTION 5.
CONDITIONS OF INVESTORS' OBLIGATIONS.
The obligations of the Investors hereunder are subject to the
satisfaction or waiver, on or prior to the date of the Closing (the "CLOSING
DATE"), of the following conditions:
(a) The Registration Statement, including any Rule 462(b)
Registration Statement, has become effective and at the Closing Date no stop
order suspending the effectiveness of the Registration Statement shall have
been issued under the 1933 Act or proceedings therefor initiated or
threatened by the Commission. A prospectus containing the Rule 430A
Information shall have been filed with the Commission in accordance with Rule
424(b) under the 1933 Act within the prescribed time period and prior to the
Closing Date the Company shall have provided evidence satisfactory to the
Investors of such timely filing, or a post-effective amendment providing such
information shall have been promptly filed and declared effective in
accordance with the requirements of Rule 430A under the 1933 Act.
(b) The representations and warranties made by the Company shall
be true and correct in all material respects as of the Closing Date and the
Company shall have performed in all material respects all obligations
required to be performed by it prior to the Closing.
(c) On the Closing Date the Investors shall have received:
(i) The favorable opinion, dated as of the Closing Date, of
Gray Cary Ware & Freidenrich LLP, in form and substance satisfactory to the
Investors.
(ii) A certificate of the Chairman, the President or a Vice
President of the Company and of the chief financial or chief accounting
officer of the Company, dated as of the Closing Date, to the effect that (i)
there has been no Material Adverse Effect since the execution of this
Agreement, (ii) the representations and warranties in Section 2 hereof are
true and correct in all material respects with the same force and effect as
though expressly made at and as of Closing Date, (iii) the Company has
complied with all agreements and satisfied all conditions required on its
part to be performed or satisfied at or prior to Closing Date pursuant to
this Agreement.
(d) At the Closing Date:
(i) No preliminary or permanent injunction or other order
by any court or other judicial or administrative body of competent
jurisdiction which prohibits or prevents the consummation of the transactions
contemplated by this Agreement shall have been issued and remain in effect.
(ii) The Company shall have (i) obtained all consents and
approvals from and shall have made all filings and registrations with, any
person, including but not limited to any governmental entity, necessary to be
obtained or made in order to consummate the transactions contemplated by this
Agreement and (ii) satisfied or obtained a valid waiver of any conditions to
the effectiveness of any such consents or approvals. All such consents or
approvals shall be in full force and effect, and all terminations or
expirations of waiting periods imposed by
11
<PAGE>
any governmental or regulatory authority necessary for the consummation of
the transactions contemplated by this Agreement, including the HSR Act, shall
have occurred.
(iii) The Company shall have issued the Instruction Letter
and provided a copy thereof, acknowledged by the transfer agent for the
Common Stock, to the Investors.
(iv) The Company shall have executed and delivered or caused
to be delivered the Registration Rights Agreement substantially in the form
of Annex C hereto (the "REGISTRATION RIGHTS AGREEMENT").
(e) At the Closing Date, the Company shall have applied to have
the Shares approved for listing on the Nasdaq Stock Market.
SECTION 6.
INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless Oaktree,
each Investor and each person, if any, who controls Oaktree or any Investor
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934
Act, and any officer, director, member, employee, shareholder, investment
manager, director, representative, fiduciary or controlling person of each of
the foregoing as follows:
(i) against any and all loss, liability, claim, damage or
expense whatsoever, promptly after submission for payment, arising out of or
resulting from the transactions contemplated hereunder, including, but not
limited to, (A) any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement (or any amendment
thereto), including the Rule 430A Information, if applicable, or the omission
or alleged omission therefrom of a material fact required to be stated
therein or necessary to make the statements therein not misleading or arising
out of any untrue statement or alleged untrue statement of a material fact
contained in any preliminary prospectus or the Prospectus (or any amendment
or supplement thereto) or the omission or alleged omission therefrom of a
material fact necessary in order to make the statement therein, in the light
of the circumstances under which they were made, not misleading; (B) any
breach or default by the Company of any of the representations or warranties
under this Agreement or any other document contemplated hereby, (C) any
breach by the Company of any of the covenants or agreements (other than
breaches of covenants to be performed by the Company after the Closing) of
the Company under this Agreement or any other document contemplated hereby or
(D) any litigation or proceedings brought by any shareholder of the Company
(whether such action is brought in such shareholder's name or derivatively on
behalf of the Company) in respect of the transactions contemplated by this
Agreement or the Registration Statement or any other document contemplated
hereby (collectively, the "INDEMNIFIABLE INVESTOR CLAIMS").
(ii) against any and all loss, liability, claim, damage or
expense whatsoever, promptly after submission for payment, to the extent of
the aggregate amount paid in settlement of any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or of any claim whatsoever based upon any Indemnifiable
12
<PAGE>
Investor Claim; provided that (subject to Section 6(d) below) any such
settlement is effected with the written consent of the Company (which shall
not be unreasonably withheld); and
(iii) against any and all expense whatsoever, promptly after
submission for payment (including, subject to Section 6(c) hereof, the
reasonable fees and disbursements of counsel for the indemnified party),
reasonably incurred in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any
Indemnifiable Investor Claim, to the extent that any such expense is not paid
under (i) or (ii) above.
(b) Each Rights Investor severally agrees to indemnify and hold
harmless the Company, its directors, each of its officers who signed the
Registration Statement, and each person, if any, who controls the Company
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934
Act against any and all, liability, claim, damage or expense described in the
indemnity contained in subsection (a)(i)(A) of this Section, promptly after
submission for payment, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information, or any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto) in reliance upon and in conformity with
written information furnished to the Company by such Investor expressly for
use in the Registration Statement (or any amendment thereto) or such
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto).
(c) Each indemnified party shall give notice as promptly as
reasonably practicable to each indemnifying party of any action commenced
against it in respect of which indemnity may be sought hereunder, but failure
to so notify an indemnifying party shall not relieve such indemnifying party
from any liability except to the extent the indemnifying party is materially
prejudiced thereby, and the indemnifying party may participate at its own
expense in the defense of any such action. If the indemnifying party so
elects within a reasonable time after receipt of such notice, it may assume
the defense of such action, with counsel chosen by it and approved by the
indemnified parties in such action, unless such indemnified parties
reasonably object to such assumption on the ground that there may be legal
defenses available to them which are different from, conflicting with or in
addition to those available to such indemnifying party. Absent any difference
or conflict referred to in the preceding sentence, if an indemnifying party
assumes the defense of such action, the indemnifying parties shall not be
liable for any fees and expenses of counsel for the indemnified parties
incurred thereafter in connection with such action. In no event shall the
indemnifying parties be liable for fees and expenses of more than one counsel
(in addition to any local counsel retained for local procedural and practice
matters) separate from their own counsel for any indemnified parties in
connection with any one action or separate but similar or related actions in
the same jurisdiction arising out of the same general allegations or
circumstances. No indemnifying party shall, without the prior written consent
of the indemnified parties, settle or compromise or consent to the entry of
any judgment with respect to any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened, or
any claim whatsoever in respect of which indemnification could be sought
under this Section 6 (whether or not the indemnified arties are actual or
potential parties thereto), unless such settlement, compromise or consent (i)
includes an unconditional release of each indemnified party from all
liability arising out of such litigation, investigation, proceeding
13
<PAGE>
or claim (ii) does not include a statement as to or an admission of fault,
culpability or a failure to act by or on behalf of any indemnified party,
(iii) does not impugn the reputation of any indemnified party and (iv) does
not restrict any indemnified party from engaging in any activity.
(d) If at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for reasonable fees and
expenses of counsel, such indemnifying party agrees that it shall be liable
for any settlement of the nature contemplated by Section 6(a)(ii) effected
without its written consent if (i) such settlement is entered into more than
45 days after receipt by such indemnifying party of the aforesaid request,
(ii) such indemnifying party shall have received notice of the terms of such
settlement at least 30 days prior to such settlement being entered into and
(iii) such indemnifying party shall not have reimbursed such indemnified
party in accordance with such request prior to the date of such settlement.
(e) Expenses incurred by an indemnified party in defense or
settlement of any claim that shall be subject to a right of indemnification
hereunder shall be advanced by the Company promptly upon submission for
payment, provided that the Company shall have received an undertaking by or
on behalf of such indemnified party to repay such amount to the extent that
it shall be determined ultimately that the indemnified party is not entitled
to be indemnified hereunder.
SECTION 7.
REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE DELIVERY.
All representations, warranties and agreements contained in this
Agreement, or contained in certificates of officers of the Company submitted
pursuant hereto and identified as such, shall remain operative and in full
force and effect, regardless of any investigation made by or on behalf of any
Investor or controlling person, or by or on behalf of the Company, and shall
survive delivery of the Shares to the Investors.
SECTION 8.
TERMINATION OF AGREEMENT.
(a) This Agreement may be terminated at any time prior to the
Closing Date:
(i) by written agreement of the Company and the Investors;
(ii) by either the Company or any Investor, by giving
written notice of such termination to other parties, if Closing shall not
have occurred on or prior to June 10, 1999 (unless the failure to consummate
the Closing by such date shall be due to the failure of the party seeking to
terminate this Agreement to have fulfilled any of its obligations under this
Agreement);
(iii) by any Investor, by giving written notice to the
Company, if since the date of this Agreement or since the respective dates as
of which information is given in the Prospectus, any event has occurred or
failed to occur which would have a Material Adverse
14
<PAGE>
Effect, whether or not arising in the ordinary course of business, or if
there has been a breach by the Company of any representation, warranty,
covenant or agreement that would give rise to the failure of the conditions
to the obligations of the Investors set forth in Section 5(b); or
(iv) by either the Company or any Investor in the event that
any governmental authority shall have issued a final, non-appealable order,
decree or ruling or taken any other final, non-appealable action restraining,
enjoining or otherwise prohibiting the transactions contemplated by this
Agreement and such order, decree, ruling or other action shall have become
final and nonappealable.
(b) If this Agreement is terminated pursuant to this Section 8
such termination shall be without liability of any party to any other party
except as provided in Section 4(j) and Section 8(c) hereof, except that
nothing herein will relieve any party from liability for breach of this
Agreement prior to such termination.
(c) If this Agreement is terminated by either party prior to the
effective date of the Registration Statement, then, provided that the
Investors shall not be in breach of their obligations as set forth herein,
the Investors shall be entitled to reimbursement of their expenses as set
forth in Section 4(j).
SECTION 9.
NOTICES.
All notices and other communications hereunder shall be in writing
and shall be deemed to have been duly given when delivered personally to the
recipient, one day after being sent to the recipient by reputable overnight
express courier service (charges prepaid), five days after being mailed to
the recipient (postage prepaid) or upon confirmation if transmitted by any
standard form of telecommunication. Notices shall be directed as follows:
To Oaktree Capital Management, LLC:
Oaktree Capital Management, LLC
333 South Grand Avenue,
28th Floor
Los Angeles, California 90071
Telephone: (213) 830-6300
Telecopy: (213) 830-6493
Attn: Kenneth Liang, Esq.
with a copy to:
Milbank, Tweed, Hadley & McCloy
601 South Figueroa
31st Floor
Los Angeles, California 90017
Telephone: (213) 892-4000
Telecopy: (213) 629-5063
Attn: Eric H. Schunk, Esq.
15
<PAGE>
To the Company:
Aureal Semiconductor, Inc.
4525 Technology Drive
Fremont, California 94538
Telephone: (510) 252-4245
Telecopy: (510) 252-4491
Attn: David Domeier
with a copy to:
Gray Cary Ware & Freidenrich LLP
400 Hamilton Avenue
Palo Alto, California 94301-1825
Telephone: (650) 328-6561
Telecopy: (650) 327-3699
Attn: James M. Koshland, Esq.
SECTION 10.
PARTIES.
This Agreement shall each inure to the benefit of and be binding
upon Oaktree, TCW, the Investors and their respective officers, directors,
members, employees, shareholders, investment managers, representatives,
fiduciaries and controlling persons (the "INVESTOR PARTIES") and the Company
and their respective successors. Nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any person, firm or
corporation, other than the Investor Parties and the Company, any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision herein contained. This Agreement and all conditions and provisions
hereof are intended to be for the sole and exclusive benefit of the Investor
Parties and the Company and for the benefit of no other person, firm or
corporation.
SECTION 11.
GOVERNING LAW.
This Agreement shall be governed by and construed in accordance
with the laws of the State of California applicable to agreements made and to
be performed in said state.
SECTION 12.
MISCELLANEOUS.
(a) Any provision of this Agreement may be amended or waived if,
and only if, such amendment or waiver is in writing and signed, in the case
of an amendment, by the Company and each of the Investors, or in the case of
a waiver, by the party against whom the waiver is to be effective. No failure
or delay by any party in exercising any right, power or privilege hereunder
shall operate as a waiver thereof nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or the exercise of any
other right, power or
16
<PAGE>
privilege. In the event that any one or more of the provisions contained in
this Agreement or in any other instrument referred to herein, shall, for any
reason, be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality, or unenforceability shall not affect any other
provision of this Agreement or any other such instrument.
(b) No party to this Agreement may assign any of its rights or
obligations under this Agreement without the prior written consent of the
other parties hereto except that the Investors may without such consent
assign their rights hereunder to one or more of their respective affiliates.
(c) This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, and all of which shall constitute
one and the same agreement.
(d) The heading references herein are for convenience purposes
only, do not constitute a part of this Agreement and shall not be deemed to
limit or affect any of the provisions hereof.
(e) Neither Oaktree nor any officer, director, member, employee,
shareholder, investment manager, director, representative, fiduciary or
controlling person of Oaktree or of any Investor shall have any personal
obligations or liability to the Company under or in connection with this
Agreement. With respect to obligations of any Investor arising hereunder,
the Company shall look for payment or satisfaction solely to the assets and
property of such Investor and not to Oaktree, any other affiliate of such
Investor or Oaktree, or any officer, director, member, employee, shareholder,
investment manager, director, representative, fiduciary or controlling person
of or investor in Oaktree or such Investor.
17
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date set forth above.
AUREAL SEMICONDUCTOR, INC.
By:
---------------------------------
Title:
<PAGE>
OAKTREE CAPITAL MANAGEMENT, LLC, solely
on behalf of the entities on Annex A
hereto and not in its individual
capacity
By:
---------------------------------
Name:
Title:
By:
---------------------------------
Name:
Title:
TRUST COMPANY OF THE WEST,
solely on behalf of the entities on
Annex A hereto and not in its individual
capacity
By:
---------------------------------
Authorized Signatory
2
<PAGE>
Annex A
INVESTORS
TCW INVESTORS
- -------------
TCW Special Credits Fund IIIb
TCW Special Credits Trust
TCW Special Credits Trust IIIb
OAKTREE INVESTORS
- -----------------
Weyerhauser Company Master Retirement Trust
OCM Opportunities Fund II, L.P.
Columbia/HCA Master Retirement Trust
<PAGE>
Annex B
RIGHTS INVESTORS
<TABLE>
<CAPTION>
Percentage
of
Rights Shares
-------------
<S> <C>
OCM Opportunities Fund II, LP 99%
Weyerhauser Company Master Retirement Trust 1%
</TABLE>
<PAGE>
Annex C
REGISTRATION RIGHTS AGREEMENT
<PAGE>
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT is made and entered into as of
May 26, 1999, between Aureal Semiconductor Inc., a Delaware corporation (the
"COMPANY"), and TCW Special Credits ("TCW"), as agent and on behalf of the
funds and accounts listed under the heading "TCW Holders" on SCHEDULE 1
hereto (the "TCW HOLDERS") and Oaktree Capital Management, LLC ("OCM"), as
agent and on behalf of the funds and accounts under the heading "Oaktree
Holders" on SCHEDULE 1 hereto (the "OAKTREE HOLDERS" and, together with the
TCW Holders, collectively, the "HOLDERS").
R E C I T A L S
WHEREAS, on the date hereof, each Holder is the owner of the
respective number of shares of the Company's Common Stock, par value $.01 per
share (the "COMMON STOCK"), and other securities of the Company convertible
into shares of Common Stock set forth opposite the name of such Holder on the
Schedule 1 hereto;
WHEREAS, in connection with the Company's restructuring, certain of
the Holders have (i) acted as standby purchasers in connection with the
Company's offering to its stockholders of rights to purchase a pro rata
portion of up 33,333,333 shares of Common Stock (the "RIGHTS SHARES") for an
aggregate purchase price of up to $20,000,000 and (ii) converted all of the
shares of 8% Series B Convertible Preferred Stock (the "SERIES B STOCK") held
by the Holders and received an aggregate of 47,222,282 shares (the
"RESTRUCTURING SHARES") in connection therewith;
WHEREAS, the parties hereto desire to provide for the registration
under the Securities Act of 1933, as amended, and the rules and regulations
thereunder as in effect from time to time (the "SECURITIES ACT"), of the
shares of Common Stock owned or acquired by the Holders, on the terms and
conditions set forth herein; and
WHEREAS, a Special Committee of the Board of Directors of the
Company has authorized the officers of the Company to execute and deliver
this Agreement in the name of and on behalf of the Company.
NOW, THEREFORE, in consideration of the mutual covenants, promises,
representations, warranties and conditions set forth in this Agreement, the
parties hereto, intending to be legally bound, hereby agree as follows:
1. DEFINITIONS. For purposes of this Agreement, in addition to
the definitions set forth above and elsewhere herein, the following terms
shall have the following respective meanings:
"AFFILIATE" of a Holder shall mean a person who controls, is
controlled by or is under common control with such Holder or, the spouse or
children (or a trust exclusively for the benefit of a spouse and/or
children) of such Holder or, in the case of a Holder which is a trust, the
trustee and the beneficiaries of such trust.
<PAGE>
"CLEARANCE NOTICE" shall have the meaning specified in the last
paragraph of Section 5.
"COMMISSION" shall mean the United States Securities and Exchange
Commission and any successor agency thereto.
"COMMON STOCK" shall have the meaning specified in the first Recital.
"COMPANY" shall have the meaning specified in the Preamble.
"DEMAND NOTICE" shall have the meaning specified in Section 2(a).
"DEMAND REGISTRATION" shall have the meaning specified in
Section 2(a).
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended, or any similar federal statute, and the rules and regulations of
the Commission thereunder, all as the same shall be in effect at the time.
"HOLDER" shall mean a Holder or any transferee or assignee to whom the
rights under this Agreement are assigned in accordance with the provisions
of Section 10 hereof.
"MAXIMUM OFFERING SIZE" shall have the meaning specified in
Section 3(b)(ii).
"OCCURRENCE NOTICE" shall have the meaning specified in the last
paragraph of Section 5.
"PERSON" shall mean an individual, partnership, corporation, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization, government or agency or political subdivision
thereof, or other entity.
"REGISTRABLE STOCK" shall mean: (i) the Common Stock beneficially
owned by the Holders on the date hereof (including, without limitation, the
Rights Shares and the Restructuring Shares) or otherwise issuable upon
exercise, conversion or surrender of securities of the Company beneficially
owned by the Holders on the date hereof; (ii) any Common Stock issued as
(or issuable upon the conversion or exercise of any warrant, right, option
or other convertible security which is issued as) a dividend or other
distribution with respect to, or in exchange for, or in replacement of, the
Common Stock owned by the Holders on the date hereof, (iii) any Common
Stock or other securities of the Company acquired by any Holder after the
date hereof and (iv) any Common Stock issued by way of a stock split of the
Common Stock referred to in clauses (i), (ii) or (iii) above. For purposes
of this Agreement, any Registrable Stock shall cease to be Registrable
Stock when (x) a registration statement covering such Registrable Stock has
been declared effective and such Registrable Stock has been disposed of
pursuant to such effective registration statement or (y) such Registrable
Stock is sold or distributed pursuant to Rule 144 (or any similar or
successor provision (but not Rule 144A)) under the Securities Act.
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"REQUESTING HOLDERS" shall have the meaning specified in Section
2(a).
"SECURITIES ACT" shall have the meaning specified in the third
Recital.
"SHELF REGISTRATION" shall have the meaning specified in
Section 2(b)(i).
"SHELF REGISTRATION STATEMENT" shall have the meaning specified in
Section 2(b)(ii).
"HOLDER" or "HOLDERS" shall have the meaning specified in the
Preamble.
"UNDERWRITTEN OFFERING" or "Underwritten Registration" shall mean a
registration in which securities of the Company are sold to an underwriter
or underwriters for reoffering to the public.
2. DEMAND REGISTRATION .
(a) At any time commencing 180 days after the date of this Agreement,
the Holders of at least 10% of the then outstanding Registrable Stock (the
"REQUESTING HOLDERS") may request, in a written notice to the Company (a
"DEMAND NOTICE"), that the Company file a registration statement under the
Securities Act covering the registration of Registrable Stock the
reasonably anticipated aggregate price to public of which exceeds
$2 million in the manner specified in such notice (a "DEMAND
REGISTRATION"). Promptly following receipt of a Demand Notice (such request
to state the number of shares of Registrable Stock to be so included and
the intended method of distribution), the Company shall (x) within sixty
(60) days notify all other Holders of such request in writing and (y) use
its best efforts to cause to be registered under the Securities Act all
Registrable Stock that the Requesting Holders and such other Holders have,
within sixty (60) days after the Company has given such notice, requested
be registered in accordance with the manner of distribution specified in
the Demand Notice by the Requesting Holders.
(b) (i) If any Demand Registration is requested to be a "shelf"
registration by the Requesting Holders of the Registrable Stock to be
included in such Demand Registration, the Company shall cause to be
filed pursuant to Rule 415 under the Securities Act a shelf
Registration Statement (a "SHELF REGISTRATION STATEMENT") with respect
to the number of shares of Registrable Stock requested to be so
registered (a "SHELF REGISTRATION"). The Company shall keep such
Shelf Registration Statement continuously effective for a period of at
least two years following the date on which the Commission declares
such Shelf Registration Statement effective under the Securities Act
(subject to extension pursuant to Section 4(a) and the last paragraph
of Section 5 hereof), or such shorter period ending when all of the
shares of Registrable Stock covered by such Shelf Registration
Statement have been sold.
(ii) Upon the occurrence of any event that would cause the Shelf
Registration Statement (A) to contain a material misstatement or
omission or (B) to be not effective and usable for resale of
Registrable Stock during the period
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that such Shelf Registration Statement is required to be effective
and usable, the Company shall promptly file an amendment to the
Shelf Registration Statement, in the case of clause (A), correcting
any such misstatement or omission and, in the case of either clause
(A) or (B), use its best efforts to cause such amendment to be
declared effective and such Shelf Registration Statement to become
usable as soon as practicable thereafter.
(c) If the Requesting Holders intend to have the Registrable Stock
distributed by means of an Underwritten Offering, the Company shall include
such information in the written notice referred to in clause (x) of
Section 2(a) above. In such event, the right of any Holder to include its
Registrable Stock in such registration shall be conditioned upon such
Holder's participation in such Underwritten Offering and the inclusion of
such Holder's Registrable Stock in the Underwritten Offering (unless
otherwise mutually agreed by a majority in interest of the Requesting
Holders and such Holder) to the extent provided below. All Holders
proposing to distribute Registrable Stock through such Underwritten
Offering shall enter into an underwriting agreement in customary form with
the underwriter or underwriters. Such underwriter or underwriters shall be
selected by a majority in interest of the Requesting Holders and approved
by the Company's Board of Directors (which approval shall not be
unreasonably withheld); PROVIDED, that (i) all of the representations and
warranties by, and the other agreements on the part of, the Company to and
for the benefit of such underwriters shall also be made to and for the
benefit of such Holders of Registrable Stock, (ii) any or all of the
conditions precedent to the obligations of such underwriters under such
underwriting agreement shall be conditions precedent to the obligations of
such Holders of Registrable Stock, and (iii) no Holder shall be required to
make any representations or warranties to or agreements with the Company or
the underwriters other than representations, warranties or agreements
regarding such Holder, the Registrable Stock of such Holder and such
Holder's intended method of distribution and any other representations
required by law or reasonably required by the underwriter. If any Holder
of Registrable Stock disapproves of the terms of the underwriting, such
Holder may elect to withdraw all its Registrable Stock by written notice to
the Company, the managing underwriter and the Initiating Holders. The
securities so withdrawn shall also be withdrawn from registration and shall
remain Registrable Stock.
(d) The Company shall not be obligated to effect more than three
Demand Registrations; PROVIDED, however, that a Demand Registration shall
not be deemed to have been effected for purposes of this Section 2(e)
unless: (i) it has been declared effective by the Commission; (ii) it has
remained effective for the period set forth in Section 5(a) and (iii) the
offering of Registrable Stock pursuant to such registration is not subject
to any stop order, injunction or other order or requirement of the
Commission (other than any such stop order, injunction or other requirement
of the Commission prompted by any act or omission of a Requesting Holder).
(e) If, pursuant to the provisions of this Section 2, the Company
attempts to register Registrable Stock and the holders of a majority of the
Registrable Stock requested to be included in such registration
subsequently withdraw from such offering and, as a result, the offering of
any Registrable Stock does not occur, then such
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withdrawal shall be deemed a demand registration for purposes of this
Section 2 unless (i) the withdrawal follows disclosure of or is due to
material adverse information not publicly disclosed by the Company prior
to delivery of the Demand Notice resulting in such registration or (ii)
the Company's registration expenses, including the fees and disbursements
of the Company's legal counsel, are fully reimbursed by the Holders.
3. INCIDENTAL REGISTRATION.
(a) Subject to Section 8 and the other terms and conditions
set forth in this Section 3, if at any time the Company determines
that it shall file a registration statement under the Securities Act
(other than a registration statement on Form S-4 or S-8 or filed in
connection with an exchange offer or an offering of securities
solely to the Company's existing stockholders) on any form that
would also permit the registration of the Registrable Stock and such
filing is to be on the Company's behalf and/or on behalf of selling
holders (including Requesting Holders) of its securities for the
sale of shares of Common Stock, the Company shall each such time
promptly give each Holder written notice of such determination
setting forth the date on which the Company proposes to file such
registration statement, which date shall be no earlier than 30 days
from the date of such notice, and advising such Holders of their
right to have Registrable Stock included in such registration. Upon
the written request of any Holder received by the Company no later
than 30 days after the date of the Company's notice, the Company
shall use its best efforts to cause to be registered under the
Securities Act all of the Registrable Stock that each such Holder
has so requested to be registered.
(b) The Company's obligation to include Registrable Stock in
a registration statement pursuant to Section 3(a) above is subject
to the following limitations, conditions and qualifications:
(i) If, at any time after giving written notice of its
determination to register its securities and prior to the effective
date of any registration statement filed in connection with such
registration, the Company shall determine for any reason not to
register such securities, the Company may, at its election, give
written notice of such determination to the Holders and thereupon the
Company shall be relieved of its obligation to use any efforts to
register any Registrable Stock in connection with such aborted
registration; PROVIDED, that the provisions of this clause (i) shall
not affect the obligations of the Company with respect to a Demand
Registration.
(ii) If, in the opinion of the managing underwriter, the total
amount of such securities to be so registered, including such
Registrable Stock, will exceed the maximum amount (the "MAXIMUM
OFFERING SIZE") of the Company's securities that can be sold in such
offering, then the Company shall include in such registration, in
the following priority up to the Maximum Offering Size: (x) first,
all of the securities proposed to be registered for offer and sale
by the Company, (y) second, all of the Registrable Stock requested
to be included in such registration by the Holders pursuant to this
Section, allocated, if necessary for such offering not to exceed the
Maximum Offering Size, pro rata among the
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Holders requesting registration of such Registrable Stock on the
basis of the relative number of shares of Registrable Stock each
such Holder has requested to be included in such registration, and
(z) third, any other securities of the Company requested to be
registered by any other parties.
4. HOLDBACK AGREEMENTS.
(a) Each Holder of Registrable Stock agrees, if so required
(pursuant to a timely notice) by the Company or the managing underwriter
in any Underwritten Offering, not to effect any public sale of
distribution of securities of the Company of the same class as the
securities included in such Underwritten Registration, or any securities
convertible into or exchangeable to exercisable therefor, during the 7
days prior to and the 90 days after any Underwritten Registration
pursuant to Section 2 or Section 3 has become effective, except as part
of such Underwritten Registration; PROVIDED, that no Holder shall be so
required unless the executive officers and directors of the Company and
each holder of 5% or more (on a fully diluted basis) of its equity
securities, or any securities convertible into or exchangeable or
exercisable for such securities, so agree. Notwithstanding the foregoing
sentence, each Holder of Registrable Stock subject to the foregoing
sentence shall be entitled to sell securities during the foregoing period
in a private sale. If a request is made pursuant to this Section 4(a),
then the time period during which a Shelf Registration is required to
remain continuously effective for such Holders of Registrable Stock
pursuant to the terms of this Agreement shall be extended 210 days.
None of the foregoing provisions of this Section 4(a) shall
apply to any Holder of Registrable Stock if such Holder is prevented by
applicable statute or regulation from entering into any such agreement;
PROVIDED, that any such Holder shall undertake not to effect any public
sale or distribution of the Registrable Stock unless such Holder has
provided 15 days' prior written notice of such sale or distribution to
the underwriter or underwriters.
(b) The Company agrees (i) if so required by the managing
underwriter of any Underwritten Offering, not to effect any public sale
or distribution of securities of the same class as the securities
included in such Underwritten Registration or securities convertible into
or exchangeable or exercisable therefor during the 7 days prior to and
the 90 days after any Underwritten Registration pursuant to Section 2 or
Section 3 has become effective, except as part of such Underwritten
Registration and except pursuant to registrations on Form S-4 or S-8 or
any successor form to such Forms, and (ii) to use commercially reasonable
efforts to cause each holder of equity securities included in any
Underwritten Registration or any securities convertible into or
exchangeable or exercisable therefor, in each case purchased from the
Company at any time after the date of this Agreement (other than in a
public offering) to agree not to effect any public sale or distribution
of or otherwise dispose of shares of equity securities (or such other
securities) during such period except as part of such Underwritten
Registration.
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5. REGISTRATION PROCEDURES. Whenever required under Section 2 or
Section 3 of this Agreement to use its best efforts to effect the registration
of any Registrable Stock, the Company shall, as expeditiously as practicable:
(a) prepare and file with the Commission a registration statement
with respect to such Registrable Stock and use its best efforts to cause
such registration statement to become and remain effective for the period
of the distribution contemplated thereby;
(b) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to comply with the provisions of
the Securities Act with respect to the disposition of all Registrable Stock
covered by such registration statement;
(c) furnish to each Holder such numbers of copies of the registration
statement and each prospectus included therein (including each preliminary
prospectus and any amendments or supplements thereto) in conformity with
the requirements of the Securities Act and such other documents and
information as they may reasonably request;
(d) use its best efforts to register or qualify the Registrable Stock
covered by such registration statement under the securities or blue sky
laws of such jurisdictions as shall be reasonably appropriate for the
distribution of the Registrable Stock covered by the registration
statement; PROVIDED, however, that the Company shall not be required in
connection therewith or as a condition thereto to qualify to do business in
or to file a general consent to service of process in any jurisdiction
wherein it would not but for the requirements of this paragraph (d) be
obligated to do so;
(e) promptly notify (but in any event within five business days) the
selling Holders of Registrable Stock, their counsel and the managing
underwriters, if any, and confirm such notice in writing, (i) when a
prospectus or any prospectus supplement has been filed and, with respect to
a registration statement or any post-effective amendment, when the same has
become effective, (ii) of any request by the Commission or any other
Federal or state governmental authority for amendments or supplements to a
registration statement or related prospectus or for additional information,
(iii) of the issuance by the Commission of any stop order suspending the
effectiveness of a registration statement or of any order preventing or
suspending the use of any prospectus or the initiation of any proceedings
by any Person for that purpose, (iv) if at any time the representations and
warranties of the Company contained in any agreement (including any
underwriting agreement) contemplated by Section 6(l) below cease to be true
and correct in all material respects (except that phrase "in all material
respects" shall be disregarded to the extent any such representation and
warranty is qualified by "material," "material adverse change," "material
adverse effect" or any phrase using any such term), (v) of the receipt by
the Company of any notification with respect to the suspension of the
qualification of exempting from qualification of a registration statement
or any of the Registrable Stock for offer or sale under the securities or
blue sky laws of any jurisdiction, or to the extent the Company has
knowledge or has received notice, of the contemplation, initiation or
threatening of any proceeding for such purpose, (vi) of the happening of
any event that makes any statement made in such registration statement or
related prospectus or any
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document incorporated or deemed to be incorporated therein by reference
untrue in any material respect or that requires the making of any changes
in such registration statement, prospectus or documents so that it will
not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made (in the case of the prospectus only) not misleading, and (vii) of
the Company's reasonable determination that a post-effective amendment to
a registration statement would be appropriate;
(f) furnish, at the request of any Holder requesting registration of
Registrable Stock pursuant to Section 2, if the method of distribution is
by means of an Underwritten Offering, on the date that the shares of
Registrable Stock are delivered to the underwriters for sale pursuant to
such registration, or if such Registrable Stock is not being sold through
underwriters, on the date that the registration statement with respect to
such shares of Registrable Stock becomes effective: (i) a signed opinion,
dated such date, of the independent legal counsel representing the Company
for the purpose of such registration, addressed to the underwriters, if
any, and if such Registrable Stock is not being sold through underwriters,
then to the Holders making such request, as to such matters as such
underwriters or the Holders holding a majority of the Registrable Stock
included in such registration, as the case may be, may reasonably request
and as would be customary in such a transaction and (ii) letters dated such
date and the date the offering is priced from the independent certified
public accountants of the Company, addressed to the underwriters, if any,
and if such Registrable Stock is not being sold through underwriters, then
to the Holders making such request (1) stating that they are independent
certified public accountants within the meaning of the Securities Act and
that, in the opinion of such accountants, the financial statements and
other financial data of the Company included in the registration statement
or the prospectus, or any amendment or supplement thereto, comply as to
form in all material respects with the applicable accounting requirements
of the Securities Act and (2) covering such other financial matters
(including information as to the period ending not more than five business
days prior to the date of such letters) as such underwriters or the Holders
holding a majority of the Registrable Stock included in such registration,
as the case may be, may reasonably request and as would be customary in
such a transaction;
(g) enter into customary agreements (including, if the method of
distribution is by means of an Underwritten Offering, an underwriting
agreement in customary form) and take such other actions as are reasonably
required in order to expedite or facilitate the disposition of the
Registrable Stock to be so included in the registration statement;
(h) As promptly as practicable upon the occurrence of any event
contemplated by paragraph (e)(vi) above, prepare a supplement or post-
effective amendment to the registration statement or a supplement to the
related prospectus or any documents incorporated or deemed to be
incorporated therein by reference, or file any other required document so
that, as thereafter delivered to the purchasers of the Registrable Stock
being sold thereunder, such prospectus will not contain an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances; in which they are made, not misleading
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(i) otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission; and
(j) use its best efforts to list the Registrable Stock covered by
such registration statement with any securities exchange on which the
Common Stock of the Company is then listed.
For purposes of Sections 5(a) and 5(b), the period of distribution of
Registrable Stock in a firm commitment Underwritten Offering shall be deemed
to extend until each underwriter has completed the distribution of all
securities purchased by it, and the period of distribution of Registrable
Stock in any other registration shall be deemed to extend until the earlier
of the sale of all Registrable Stock covered thereby and one year after the
effective date thereof.
Each Holder of Registrable Stock agrees that, upon receipt of written
notice from the Company of the happening of any event of the kind described
in Section 5(e)(ii), 5(e)(iii), 5(e)(v), 5(e)(vi) or 5(e)(vii) (an
"OCCURRENCE NOTICE"), such Holder will forthwith discontinue disposition of
such Registrable Stock covered by such registration statement or prospectus
until such Holder's receipt of the copies of the supplemented or amended
registration statement or prospectus contemplated by Section 5(h), or until
it receives notice in writing (a "CLEARANCE NOTICE") from the Company that
the use of the applicable prospectus may be resumed, and has received copies
of any additional or supplemental filings that are incorporated or deemed to
be incorporated by reference in such prospectus, and, if so directed by the
Company, such Holder will deliver to the Company (at the Company's expense)
all copies, other than permanent file copies then in such Holder's
possession, of the prospectus covering such Registrable Stock current at the
time of receipt of such notice. If the Company shall deliver an Occurrence
Notice in connection with any registered sale of Registered Stock, the time
periods mentioned in Section 2 hereof shall be extended by the number of days
during such periods from and including the date of delivery of such
Occurrence Notice to and including the date when each seller of Registrable
Stock covered by such registration statement receives (x) the copies of the
supplemented or amended prospectus contemplated by Section 5(h) hereof or (y)
a Clearance Notice, as the case may be.
6. FURNISH INFORMATION. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to this Agreement that
the Holders shall furnish to the Company such information regarding
themselves, the Registrable Stock held by them, and the intended method of
disposition of such securities as the Company shall reasonably request and as
shall be required in connection with the action to be taken by the Company.
7. EXPENSES OF REGISTRATION. All expenses incurred in connection
with each registration pursuant to Section 2 and Section 3 of this Agreement,
excluding underwriters' discounts and commissions, but including without
limitation all registration, filing and qualification fees, word processing,
duplicating, printers' and accounting fees (including the expenses of any
special audits or "cold comfort" letters required by or incident to such
performance and compliance), fees of the National Association of Securities
Dealers, Inc. or listing fees, messenger and delivery expenses, all fees and
expenses of complying with state
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securities or blue sky laws, fees and disbursements of counsel for the
Company, and the fees and disbursements of one counsel for the selling
Holders (which counsel shall be selected by the Holders holding a majority in
interest of the Registrable Stock being registered), shall be paid by the
Company. The Holders shall bear and pay the underwriting commissions and
discounts applicable to securities offered for their account in connection
with any registrations, filings and qualifications made pursuant to this
Agreement.
8. UNDERWRITING REQUIREMENTS. In connection with any Underwritten
Offering, the Company shall not be required under Section 3 to include shares of
Registrable Stock in such Underwritten Offering unless the Holders of such
Registrable Stock accept the terms of the underwriting of such offering that
have been reasonably agreed upon between the Company and the underwriters
selected by the Company.
9. RULE 144 AND RULE 144A INFORMATION. With a view to making
available the benefits of certain rules and regulations of the Commission which
may at any time permit the sale of the Registrable Stock to the public without
registration,
(a) at all times after ninety (90) days after any registration
statement covering a public offering of securities of the Company under the
Securities Act shall have become effective, the Company agrees to:
(i) make and keep public information available, as those terms
are understood and defined in Rule 144 under the Securities Act;
(ii) use its best efforts to file with the Commission in a
timely manner all reports and other documents required of the Company
under the Securities Act and the Exchange Act; and
(iii) furnish to each Holder of Registrable Stock promptly
upon request a written statement by the Company as to its compliance
with the reporting requirements of such Rule 144 and of the Securities
Act and the Exchange Act, a copy of the most recent annual or
quarterly report of the Company, and such other reports and documents
so filed by the Company as such Holder may reasonably request in
availing itself of any rule or regulation of the Commission allowing
such Holder to sell any Registrable Stock without registration; and
(b) at all times during which the Company is neither subject to the
reporting requirements of Section 13 or 15(d) of the Exchange Act, nor
exempt from reporting pursuant to Rule 12g3-2(b) under the Exchange Act, it
will provide, upon the written request of any Holder of Registrable Stock
in written form (as promptly as practicable and in any event within 15
business days), to any prospective buyer of such stock designated by such
Holder, all information required by Rule 144A(d)(4)(i) of the General
Regulations promulgated by the Commission under the Securities Act.
10. INDEMNIFICATION. In the event any Registrable Stock is included
in a registration statement under this Agreement:
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(a) The Company shall indemnify and hold harmless each Holder and its
directors and officers, each person who participates in the offering of
such Registrable Stock, including underwriters (as defined in the
Securities Act), and each person, if any, who controls such Holder or
participating person within the meaning of Section 15 of the Securities
Act, against any losses, claims, damages or liabilities, joint or several,
as incurred, to which they may become subject under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (or
proceedings in respect thereof) arise out of or are based on any untrue or
alleged untrue statement of any material fact contained in such
registration statement on the effective date thereof (including any
prospectus filed under Rule 424 under the Securities Act or any amendments
or supplements thereto) or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and
shall reimburse each such Holder and its directors and officers, such
participating person or controlling person for any legal or other expenses
as reasonably incurred by them (but not in excess of expenses incurred in
respect of one counsel for all of them unless there is an actual conflict
of interest between any indemnified parties, which indemnified parties may
be represented by separate counsel) in connection with investigating or
defending any such loss, claim, damage, liability or action; PROVIDED,
however, that subject to Section 10(e), the indemnity agreement contained
in this Section 10(a) shall not apply to amounts paid in settlement of any
such loss, claim, damage, liability or action if such settlement is
effected without the consent of the Company. Such indemnity shall remain
in full force and effect regardless of any investigation made by or on
behalf of any such Holder, its directors and officers, participating person
or controlling person, and shall survive the transfer of such securities by
such Holder.
(b) Each Holder requesting or joining in a registration shall,
severally and not jointly, indemnify and hold harmless the Company, each of
its directors and officers, each person, if any, who controls the Company
within the meaning of the Securities Act, and any underwriter against any
losses, claims, damages or liabilities, joint or several, to which the
Company or any such director, officer, controlling person or underwriter
may become subject, under the Securities Act or otherwise, insofar as such
losses, claims, damages or liabilities (or proceedings in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in such registration statement on
the effective date thereof (including any prospectus filed under Rule 424
under the Securities Act or any amendments or supplements thereto) or arise
out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in conformity
with information furnished by or on behalf of such Holder expressly for use
in connection with such registration; and each such Holder shall reimburse
any legal or other expenses reasonably incurred by the Company or any such
director, officer, controlling person or underwriter (but not in excess of
expenses incurred in respect of one counsel for all of them unless there is
an actual conflict of interest between any indemnified parties, which
indemnified parties may be represented by separate counsel) in connection
with investigating or defending any such loss, claim, damage, liability or
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action; PROVIDED, however, that, subject to Section 10(e), the indemnity
agreement contained in this Section 10(b) shall not apply to amounts paid
in settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of such Holder, and PROVIDED,
further, that the liability of each Holder hereunder shall be limited to
the proportion of any such loss, claim, damage, liability or expense which
is equal to the proportion that the net proceeds from the sale of the
Registrable Stock sold by such Holder under such registration statement
bears to the total net proceeds from the sale of all securities sold
thereunder, but not in any event to exceed the net proceeds received by
such Holder from the sale of Registrable Stock covered by such registration
statement; PROVIDED, that the foregoing limitation of liability shall not
apply to limit the liability of a Holder for any losses, claims, damages or
liabilities subject to indemnification by such Holder under this paragraph
(b) to the extent such losses, claims, damage or damages are finally
judicially determined to be solely attributable to the gross negligence or
willful misconduct of such Holder.
(c) Promptly after receipt by an indemnified party under this
Section 10 of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against any
indemnifying party under this Section 10, notify the indemnifying party in
writing of the commencement thereof and the indemnifying party shall have
the right to participate in and assume the defense thereof with counsel
selected by the indemnifying party and reasonably satisfactory to the
indemnified party; PROVIDED, however, that an indemnified party shall have
the right to retain its own counsel, with all fees and expenses thereof to
be paid by such indemnified party, and to be apprised of all progress in
any proceeding the defense of which has been assumed by the indemnifying
party. The failure to notify an indemnifying party promptly of the
commencement of any such action shall relieve such indemnifying party of
any liability to the indemnified party under this Section to the extent
such failure to so notify materially prejudices the indemnifying party's
ability to defend such action.
(d) To the extent any indemnification by an indemnifying party is
prohibited or limited by law, the indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims,
damages or liabilities in such proportion as is appropriate to reflect the
relative fault of the indemnifying party and indemnified party in
connection with the actions which resulted in such losses, claims, damages
or liabilities, as well as any other relevant equitable considerations.
The relative fault of such indemnifying party and indemnified party shall
be determined by reference to, among other things, whether any action in
question, including any untrue or alleged untrue statement of material fact
or omission or alleged omission to state a material fact, has been made by,
or relates to information supplied by, such indemnifying party or
indemnified party, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such action. The amount
paid or payable by a party as a result of the losses, claims, damages or
liabilities referred to above shall be deemed to include any legal or other
fees or expenses reasonably incurred by such party in connection with any
investigation or proceeding.
12
<PAGE>
The parties hereto agree that it would not be just and equitable
if contribution pursuant to this Section 10(d) were determined by pro rata
allocation or by any other method of allocation which does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
(e) If at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for reasonable fees
and expenses of counsel, such indemnifying party agrees that it shall be
liable for any settlement of the nature contemplated by Section 10(a) or
10(b) effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of
the aforesaid request, (ii) such indemnifying party shall have received
notice of the terms of such settlement at least 30 days prior to such
settlement being entered into and (iii) such indemnifying party shall not
have reimbursed such indemnified party in accordance with such request
prior to the date of such settlement.
11. TRANSFER OF REGISTRATION RIGHTS. The registration rights of
any Holder under this Agreement with respect to any Registrable Stock may be
transferred to (a) any transferee of such Registrable Stock who at any time
acquires at least ten per cent (10%) of such Holder's shares of Registrable
Stock (adjusted for stock splits and stock consolidations after the effective
date of this Agreement) or (b) any Affiliate of such Holder; PROVIDED,
however that (i) the transferring Holder shall give the Company written
notice at or prior to the time of such transfer stating the name and address
of the transferee and identifying the securities with respect to which the
rights under this Agreement are being transferred; (ii) such transferee shall
agree in writing, in form and substance reasonably satisfactory to the
Company, to be bound as a Holder by the provisions of this Agreement; and
(iii) immediately following such transfer the further disposition of such
securities by such transferee is restricted under the Securities Act. Except
as set forth in this Section 11, no transfer of Registrable Stock shall cause
such Registrable Stock to lose such status.
12. SECURITIES HELD BY THE COMPANY OR ITS AFFILIATES. Whenever
the consent or approval of Holders of a specified percentage of Registrable
Stock is required hereunder, Registrable Stock held by the Company or its
affiliates (as such term is defined in Rule 405 under the Securities Act)
(other than the Holders) shall not be counted in determining whether such
consent or approval was given by the Holders of such required percentage.
13. SUCCESSORS AND ASSIGNS. Subject to Section 11, the terms and
conditions of this Agreement shall inure to the benefit of and be binding
upon the respective successors and assigns of the parties hereto. Except as
expressly provided in this Agreement, nothing in this Agreement, express or
implied, is intended to confer upon any person other than the parties hereto
or their respective successors and assigns any rights, remedies, obligations,
or liabilities under or by reason of this Agreement.
13
<PAGE>
14. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of California.
15. 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 one and the same instrument.
16. TITLES. The titles of the Sections of this Agreement are used
for convenience only and are not to be considered in construing or
interpreting this Agreement.
17. NOTICES. Any notice required or permitted under this
Agreement shall be in writing and shall be delivered in person, by
hand-delivery, mailed by certified or registered mail, next-day air courier
faxed:
(a) if to the Company, at
Aureal Semiconductor Inc.
4525 Technology Drive
Fremont, California 94538
Fax: (510) 252-4491
Attention: David Domeier
(b) to each Holder at the address set forth on Schedule 1 hereto, or
if such Holder shall not be listed on Schedule 1 hereto, at the address
therefor as set forth in the Company's records or, in any such case, at
such other address or addresses as shall have been furnished in writing
by such party to the others.
The giving of any notice required hereunder may be waived in writing by the
parties hereto. Every notice or other communication hereunder shall be
deemed to have been duly given or served on the date on which personally
delivered, or on the date actually received, if sent by mail or fax, with
receipt acknowledged.
18. AMENDMENTS AND WAIVERS. Any provision of this Agreement may
be amended and the observance of any provision of this Agreement may be
waived (either generally or in a particular instance and either retroactively
or prospectively), only with the written consent of the Company and each
Holder of Registrable Stock. Any amendment or waiver effected in accordance
with this Section 18 shall be binding upon each Holder of Registrable Stock,
each future Holder and the Company.
19. SEVERABILITY. If one or more provisions of this Agreement are
held to be unenforceable under applicable law, such provisions shall be
excluded from this Agreement and the balance of this Agreement shall be
interpreted as if such provisions were so excluded and shall be enforceable
in accordance with its terms.
20. EFFECT UPON OTHER AGREEMENTS. This agreement supersedes the
rights and obligations of the Holders (but not any other party other than the
Company) pursuant to the Registration Rights Agreement dated as of December
30, 1994 (as amended) between the Company and the other parties thereto, the
Registration Rights Agreement dated as of
14
<PAGE>
February 25, 1998 between the Company and the parties thereto and the
Registration Rights Agreement dated June 5, 1998 between the Company and the
subscribers parties thereof.
21. ENTIRE AGREEMENT. All prior agreements of the parties
concerning the subject matter of this Agreement are expressly superseded by
this Agreement. This Agreement contains the entire Agreement of the parties
concerning the subject matter hereof. Any oral representations or
modifications of this Agreement shall be of no effect.
[Signature pages follow]
15
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
<PAGE>
AUREAL SEMICONDUCTOR INC.
By:
----------------------------------
Name:
Title:
<PAGE>
TCW SPECIAL CREDITS, on behalf of and as
agent for the TCW Holders and not in its
individual capacity
By:
---------------------------------
Name:
Authorized Signatory
OAKTREE CAPITAL MANAGEMENT, LLC, on
behalf of and as agent for the Oaktree
Holders and not in its individual
capacity
By:
---------------------------------
Name:
Title:
By:
---------------------------------
Name:
Title:
<PAGE>
Schedule I
S-1
<PAGE>
Schedule 1
<TABLE>
<CAPTION>
The TCW Holders Beneficial Ownership
<S> <C>
(1) TCW Special Credits Trust
Warrants 619,500
Common Stock 14,156,248
TOTAL 14,775,748
(2) TCW Special Credits Fund IIIb
Warrants 1,209,000
Common Stock 26,544,174
TOTAL 27,651,174
(3) TCW Special Credits Trust IIIb
Warrants 944,000
Common Stock 20,748,759
TOTAL 21,692,759
The Oaktree Holders
(1) Weyerhaeuser Company Master Retirement Trust
Warrants 250,000
Common Stock 11,591,250
</TABLE>
<PAGE>
<TABLE>
<S> <C>
TOTAL 11,841,250
(2) Columbia/HCA Master Retirement Trust
Warrants 8,250
Common Stock 384,285
TOTAL 392,535
(3) OCM Opportunities Fund II, L.P.
Warrants 816,750
Common Stock 38,002,749
TOTAL 38,819,499
</TABLE>
2
