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EXHIBIT 4.17
AMENDED AND RESTATED
REGISTRATION RIGHTS AGREEMENT
, 1998
To the several persons named
in Schedules I and II hereto
Ladies and Gentlemen:
This Amended and Restated Registration Rights Agreement amends
and restates in its entirety the Registration Rights Agreement, dated as of
March 29, 1996 (as amended from time to time, the "Original Registration Rights
Agreement"), among Aurora Electronics, Inc., a Delaware corporation (the
"Company"), and the several persons named therein. This will confirm that
(a) with respect to the several persons named as Purchasers in
the Securities Purchase Agreement dated as of February 21, 1996, as
amended (the "Original Purchase Agreement"), among the Company, Welsh,
Carson, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ VII, L.P., a Delaware limited partnership
("WCAS VII"), WCAS Capital Partners II, L.P., a Delaware limited
partnership ("WCAS ▇▇ ▇▇"), and the several persons named therein, in
consideration of (i) the purchase by WCAS VII and the several persons
(other than WCAS ▇▇ ▇▇) named in Schedule I hereto (collectively, the
"Original Preferred Share Purchasers") from the Company of 400,000
shares (the "Original Preferred Shares") of Convertible Preferred
Stock, $.01 par value ("Original Convertible Preferred Stock"), of the
Company, and (ii) the purchase by WCAS ▇▇ ▇▇ of (x) the Company's 10%
Senior Subordinated Note due September 30, 2001, in the principal
amount of $10,000,000, and (y) 607,211 shares (the "Original Common
Shares") of Common Stock, $.03 par value ("Common Stock"), of the
Company, all on the terms and subject to the conditions set forth in
the Original Purchase Agreement,
(b) with respect to each of WCAS VII and WCAS ▇▇ ▇▇ only
(sometimes collectively referred to as the "Guarantors"), in
consideration of the issuance, on behalf of Aurora Electronics Group,
Inc., a California corporation and wholly-owned subsidiary of the
Company ("AEG"), of certain guarantees which have been amended and
restated pursuant to the Amended and Restated Guarantee, dated as of
December 23, 1997, among the Guarantors and The Chase Manhattan Bank
N.A. (formerly known as Chemical Bank), a New York banking
corporation,
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as agent, and in connection with the issuance to the Guarantors of
warrants to purchase Common Stock (the "WCAS Warrants"), pursuant to
such guarantees and the Amended and Restated Financial Support
Agreement, dated as of July 31, 1997 among the Company, AEG, and the
Guarantors,
(c) with respect to those certain Original Preferred Share
Purchasers party, together with the Company, to the Series B
Convertible Preferred Stock Purchase Agreement, dated as of August 14,
1997, the Series C Convertible Preferred Stock Purchase Agreement,
dated as of October 2, 1997, and the Series D Convertible Preferred
Stock Purchase Agreement, dated as of October 24, 1997 (collectively,
the "Subsequent Preferred Share Purchase Agreements"), in
consideration of the purchase by such certain Original Preferred Share
Purchasers of (i) 25,000 shares (the "Series B Preferred Shares") of
Series B Convertible Preferred Stock, $.01 par value ("Series B
Convertible Preferred Stock"), of the Company, (ii) 25,000 shares (the
"Series C Preferred Shares") of Series C Convertible Preferred Stock,
$.01 par value ("Series C Convertible Preferred Stock"), of the
Company, and (iii) 20,000 shares (the "Series D Preferred Shares") of
Series D Convertible Preferred Stock, $.01 par value ("Series D
Convertible Preferred Stock"), of the Company, each such purchase on
the terms and subject to the conditions set forth in the respective
Subsequent Preferred Share Purchase Agreement, all of which Series B
Preferred Shares, Series C Preferred Shares, and Series D Preferred
Shares, have been converted, together with the Original Preferred
Shares, into an aggregate [ ] shares of Common Stock (the
"Subsequent Common Shares") pursuant to the provisions of the
Stockholders Agreement dated as of January 30, 1998 among WCAS VII,
the Company and The Cerplex Group, Inc., a Delaware corporation
("Cerplex"),
(d) with respect to WCAS ▇▇ ▇▇ and those certain Original
Preferred Share Purchasers party, together with the Company, to the
Securities Purchase and Exchange Agreement, dated as of January 30,
1998 (the "Securities Purchase and Exchange Agreement"), in
consideration of the purchase by WCAS ▇▇ ▇▇ and such certain Original
Preferred Share Purchasers of an aggregate 213,000 shares (the "Senior
Preferred Shares") of Senior Convertible Preferred Stock, $.01 par
value ("Senior Preferred Stock"), of the Company, on the terms and
subject to the conditions set forth in the Securities Purchase and
Exchange Agreement,
(e) with respect to WCAS VII, in consideration of your
agreement to exchange certain warrants to purchase 1,500,096 shares of
common stock, $.001 par value ("Cerplex Common Stock"), of Cerplex,
for warrants to purchase [ ] shares of Common Stock from the
Company (such warrants,
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together with the WCAS Warrants, are hereinafter referred to
collectively as, the "Warrants"), all on the terms and subject to the
conditions set forth in the Agreement and Plan of Merger, dated as of
January 30, 1998 (the "Merger Agreement"), among the Company, ▇▇▇▇▇
Acquisition Corp., a Delaware corporation and wholly-owned subsidiary
of the Company, and Cerplex, and
(f) with respect to the several persons named in Schedule II
hereto (collectively, the "Schedule II Holders"), in consideration of
(i) the Schedule II Holders' agreement to exchange [ ] shares of
Cerplex Common Stock for an aggregate [ ] shares of Common Stock
(the "Schedule II Common Shares") from the Company, all on the terms
and subject to the conditions set forth in the Merger Agreement, (ii)
the Schedule II Holders' consent to the transactions contemplated by
the Merger Agreement and (iii) the Schedule II Holders' irrevocable
waiver hereby of any and all rights granted to them pursuant to the
Registration Rights Agreement, dated as of November 19, 1993, among
Cerplex and the investors and the stockholders of Cerplex listed
therein, as amended from time to time (the "Cerplex Registration
Rights Agreement"), and the Schedule II Holders' termination hereby of
the Cerplex Registration Rights Agreement,
the Company hereby covenants and agrees with each of you, and with each
subsequent holder of Covered Stock (as defined herein) as follows:
1. Certain Definitions. As used herein, the following
terms shall have the following respective meanings:
"Commission" means the Securities and Exchange Commission, or
any other federal agency at the time administering the Securities Act.
"Common Shares" means the Original Common Shares, the
Subsequent Common Shares and the Schedule II Common Shares.
"Conversion Shares" means the shares of Common Stock issuable
upon conversion of any of the Senior Preferred Shares or upon exercise
of any of the Warrants.
"Covered Stock" means the Restricted Stock and the Schedule II
Common Shares.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any similar federal statute, and the rules and regulations
of the Commission thereunder, all as the same shall be in effect at
the time.
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"Registration Expenses" means the expenses so described in
Section 8 hereof.
"Restricted Stock" means the shares of capital stock of the
Company, the certificates for which are required to bear the legend
set forth in Section 2 hereof; provided, however, that Restricted
Stock shall not include any Schedule II Common Shares.
"Securities Act" means the Securities Act of 1933, as amended,
or any similar federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
"Selling Expenses" means the expenses so described in Section
8 hereof.
2. Restrictive Legend. Each certificate representing
the Common Shares, each certificate representing the Senior Preferred Shares,
each certificate representing the Conversion Shares, each certificate
representing the Warrants, and each certificate issued upon exchange,
adjustment or transfer of any of the foregoing, other than in a public sale or
as otherwise permitted by the last paragraph of Section 3 hereof, shall be
stamped or otherwise imprinted with a legend substantially in the following
form:
"THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AND MAY NOT BE
SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS THEY HAVE
BEEN REGISTERED UNDER THAT ACT OR AN EXEMPTION FROM
REGISTRATION IS AVAILABLE."
3. Notice of Proposed Transfer. Prior to any proposed
transfer of any Covered Stock (other than under the circumstances described in
Sections 4, 5 or 6 hereof), the holder thereof shall give written notice to the
Company of its intention to effect such transfer. Each such notice shall
describe the manner of the proposed transfer and, if requested by the Company,
shall be accompanied by an opinion of counsel reasonably satisfactory to the
Company (it being agreed that Reboul, MacMurray, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & Kristol is
and shall be satisfactory) to the effect that the proposed transfer of Covered
Stock may be effected without registration under the Securities Act, whereupon
the holder of such Covered Stock shall be entitled to transfer such Covered
Stock in accordance with the terms of its notice. Each certificate for Covered
Stock transferred as above provided shall bear the legend set forth in Section
2, unless (i) such transfer is in accordance with the provisions of Rule 144
(or any other rule permitting public sale without registration under the
Securities Act) or (ii) the opinion of counsel referred to above is to the
further effect that the transferee and any subsequent
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transferee (other than an affiliate of the Company) would be entitled to
transfer such securities in a public sale without registration under the
Securities Act.
The foregoing restrictions on transferability of Covered Stock
shall terminate as to any particular shares of Covered Stock when such shares
shall have been effectively registered under the Securities Act and sold or
otherwise disposed of in accordance with the intended method of disposition by
the seller or sellers thereof set forth in the registration statement
concerning such shares. Whenever a holder of Covered Stock is able to
demonstrate to the Company (and its counsel) that the provisions of Rule 144(k)
of the Securities Act are available to such holder without limitation, such
holder of Covered Stock shall be entitled to receive from the Company, without
expense, a new certificate not bearing the restrictive legend set forth in
Section 2.
4. Required Registration.
(a) Subject to the provisions of paragraph (e) below, at
any time the holders of Restricted Stock constituting at least a majority of
the Restricted Stock outstanding at such time may request the Company to
register under the Securities Act all or any portion of the Restricted Stock
held by such requesting holder or holders for sale in the manner specified in
such notice; provided, however, that the only securities which the Company
shall be required to register pursuant hereto shall be shares of Common Stock;
and provided, further, however, that, in any underwritten public offering
contemplated by Section 4, 5 or 6 hereof, the holders of the Warrants shall be
entitled to sell such Warrants to the underwriters for exercise and the sale of
the shares of Common Stock issued upon such exercise. For the purposes of
calculating the number of outstanding shares of Restricted Stock for purposes
of this Section 4(a) and Section 13(d) hereof, holders of Senior Preferred
Shares and the Warrants shall be treated as the holders of the number of
Conversion Shares then issuable upon conversion of the Senior Preferred Shares
and exercise of the Warrants.
(b) Promptly following receipt of any notice under this
Section 4, the Company shall notify any holders of Restricted Stock from whom
notice has not been received and all other holders of Covered Stock, and shall
use its best efforts to register under the Securities Act, for public sale in
accordance with the method of disposition specified in such notice from such
requesting holders, the number of shares of Restricted Stock specified in such
notice (and the number of shares of Covered Stock specified in any notices
received from other such holders of Covered Stock within 30 days after their
receipt of such notice from the Company); provided, however, that if the
proposed method of disposition specified by the requesting holders of
Restricted Stock shall be an underwritten public offering, the
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number of shares of Covered Stock to be included in such an offering may be
reduced (first, pro rata among the requesting holders of Schedule II Common
Shares based on the number of Schedule II Common Shares so requested to be
registered, and second, pro rata among the requesting holders of Restricted
Stock based on the number of shares of Restricted Stock so requested to be
registered) if and to the extent that the managing underwriter shall be of the
opinion that such inclusion would adversely affect the marketing of the Covered
Stock to be sold. If such method of disposition shall be an underwritten
public offering, the Company may designate the managing underwriter of such
offering, subject to the approval of the selling holders of a majority of the
Restricted Stock included in the offering, which approval shall not be
unreasonably withheld. Notwithstanding anything to the contrary contained
herein, the obligation of the Company under this Section 4 shall be deemed
satisfied only when a registration statement covering all shares of Covered
Stock specified in notices received as aforesaid, for sale in accordance with
the method of disposition specified by the requesting holders of Restricted
Stock, shall have become effective and, if such method of disposition is a firm
commitment underwritten public offering, all such shares shall have been sold
pursuant thereto.
(c) In the event that the Board of Directors of the
Company determines in good faith that the filing of a registration statement
pursuant hereto would be detrimental to the Company, the Board of Directors may
defer such filing for a period not to exceed sixty (60) days. The Board of
Directors may not effect more than one such deferral during any twelve-month
period. The Board of Directors agrees to promptly notify all holders of
Covered Stock of any such deferral, and shall provide to such holders a
reasonably complete explanation therefor.
(d) The Company shall be entitled to include in any
registration statement referred to in this Section 4, for sale in accordance
with the method of disposition specified by the requesting holders, shares of
Common Stock to be sold by the Company for its own account, except to the
extent that, in the opinion of the managing underwriter (if such method of
disposition shall be an underwritten public offering), such inclusion would
adversely affect the marketing of the Covered Stock to be sold. Except as
provided in this paragraph (d), the Company will not effect any other
registration of its Common Stock, whether for its own account or that of other
holders, from the date of receipt of a notice from requesting holders of
Restricted Stock pursuant to this Section 4 until the completion of the period
of distribution of the registration contemplated thereby.
(e) Notwithstanding anything to the contrary contained
herein, the Company shall be obligated to register Restricted Stock (and, to
the extent specified in notices by the holders of Schedule II Common Shares, in
accordance with the provisions of
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paragraph (b) above, Schedule II Common Shares) pursuant to this Section 4 on
two occasions only.
5. Form S-3 Registration.
(a) If the Company shall receive from any holder or
holders of Restricted Stock a written request or requests that the Company
effect a registration on Form S-3 and any related qualification or compliance
with respect to Restricted Stock owned by such holder or holders, the
reasonably anticipated aggregate price to the public of which would exceed
$1,000,000, the Company will:
(i) promptly give written notice of the proposed
registration, and any related qualification or compliance, to all
other holders of Covered Stock; and
(ii) as soon as is reasonably practicable, use its best
efforts to effect such registration (including, without limitation,
the execution of an undertaking to file post-effective amendments,
appropriate qualifications under applicable blue sky or other state
securities laws and appropriate compliance with applicable regulations
issued under the Securities Act and any other government requirements
or regulations) as may be so requested and as would permit or
facilitate the sale and distribution of all or such portion of such
holder's or holders' Restricted Stock as is specified in such request,
together with all or such portion of the Covered Stock of any holder
or holders joining in such request as are specified in a written
request given within 30 days after receipt of such written notice from
the Company; provided, however that the Company shall not be obligated
to effect any such registration, qualification or compliance pursuant
to this Section 5 (A) more than once in any 180-day period, or (B) if
the Company is not entitled to use Form S-3; and provided, further,
that the only securities which the Company shall be required to
register pursuant hereto shall be shares of Common Stock. Subject to
the foregoing, the Company shall file a registration statement
covering the Covered Stock so requested to be registered as soon as is
reasonably practicable after receipt of the request or requests of the
holders of the Restricted Stock.
(b) Notwithstanding anything to the contrary contained
herein, the Company shall be obligated to register Restricted Stock (and, to
the extent specified in notices by the holders of Schedule II Common Shares in
accordance with the provisions of paragraph (a)(ii) above, Schedule II Common
Shares) pursuant to this Section 5 on two occasions only.
6. Incidental Registration. If the Company at any time
(other than pursuant to Section 4 or 5 hereof) proposes to
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register any of its Common Stock under the Securities Act for sale to the
public, whether for its own account or for the account of other security
holders or both (except with respect to registration statements on Form S-4 or
Form S-8 or another form not available for registering the Covered Stock for
sale to the public), it will give written notice at such time to all holders of
outstanding Covered Stock of its intention to do so. Upon the written request
of any such holder, given within 30 days after receipt of any such notice by
the Company, to register any of its Covered Stock (which request shall state
the intended method of disposition thereof), the Company will use its best
efforts to cause the Covered Stock as to which registration shall have been so
requested to be included in the securities to be covered by the registration
statement proposed to be filed by the Company, all to the extent requisite to
permit the sale or other disposition by the holder (in accordance with its
written request) of such Covered Stock so registered; provided that nothing
herein shall prevent the Company from abandoning or delaying such registration
at any time; provided, further, that the only securities which the Company
shall be required to register shall be shares of Common Stock. In the event
that any registration pursuant to this Section 6 shall be, in whole or in part,
an underwritten public offering of Common Stock, any request by a holder
pursuant to this Section 6 to register Covered Stock shall specify that either
(i) such Covered Stock is to be included in the underwriting on the same terms
and conditions as the shares of Common Stock otherwise being sold through
underwriters in connection with such registration or (ii) such Covered Stock is
to be sold in the open market without any underwriting, on terms and conditions
comparable to those normally applicable to offerings of common stock in
reasonably similar circumstances. The number of shares of Covered Stock to be
included in an underwriting in accordance with clause (i) above may be reduced
pro rata among the requesting holders of Covered Stock based upon the number of
shares of Covered Stock so requested to be registered, if and to the extent
that the managing underwriter shall be of the opinion that such inclusion would
adversely affect the marketing of the securities to be sold by the Company
therein; provided, however, that if any shares are to be included in such
underwriting for the account of any person other than the Company, the shares
to be so included shall be subject first to reduction before the shares of
Covered Stock are reduced pro rata.
Notwithstanding anything to the contrary contained in this
Section 6, in the event that there is a firm commitment underwritten public
offering of securities of the Company pursuant to a registration covering
Covered Stock and a holder of Covered Stock does not elect to sell his Covered
Stock to the underwriters of the Company's securities in connection with such
offering, such holder shall refrain from selling such Covered Stock so
registered pursuant to this Section 6 during the period of distribution of the
Company's securities by such underwriters
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and the period in which the underwriting syndicate participates in the after
market; provided, however, that such holder shall, in any event, be entitled to
sell its Covered Stock commencing on the 90th day after the effective date of
such registration statement or, if later, on such date (but in no event later
than the 180th day after such effective date) as contractual "lock-up"
restrictions imposed by the underwriters shall expire or be released.
7. Registration Procedures. If and whenever the Company
is required by the provisions of Section 4, 5 or 6 hereof to use its best
efforts to effect the registration of any of the Covered Stock under the
Securities Act, the Company will, as expeditiously as possible:
(a) prepare (and afford counsel for the selling holders
reasonable opportunity to review and comment thereon) and file with
the Commission a registration statement on the most appropriate form
adequate for the purposes thereof with respect to such securities and
use its best efforts to cause such registration statement to become
and remain effective for the period of the distribution contemplated
thereby (to be determined as hereinafter provided);
(b) prepare (and afford counsel for the selling holders
reasonable opportunity to review and comment thereon) and file with
the Commission such amendments and supplements to such registration
statement and the prospectus used in connection therewith as may be
necessary to keep such registration statement effective for the period
specified in paragraph (a) above and to comply with the provisions of
the Securities Act with respect to the disposition of all Covered
Stock covered by such registration statement in accordance with the
sellers' intended method of disposition set forth in such registration
statement for such period;
(c) furnish to each seller and to each underwriter such
number of copies of the registration statement and the prospectus
included therein (including each preliminary prospectus) as such
persons may reasonably request in order to facilitate the public sale
or other disposition of the Covered Stock covered by such registration
statement;
(d) use its best efforts to register or qualify the
Covered Stock covered by such registration statement under the
securities or blue sky laws of such jurisdictions as the sellers of
Covered Stock or, in the case of an underwritten public offering, the
managing underwriter, shall reasonably request (provided that the
Company will not be required to (i) qualify generally to do business
in any jurisdiction where it would not otherwise be required to
qualify but for this paragraph (d), (ii) subject itself to taxation in
any
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such jurisdiction or (iii) consent to general service of process in
any such jurisdiction);
(e) immediately notify each seller under such
registration statement and each underwriter, at any time when a
prospectus relating thereto is required to be delivered under the
Securities Act, of the happening of any event as a result of which the
prospectus contained in such registration statement, as then in
effect, includes an untrue statement of a material fact or omits to
state any material fact required to be stated therein or necessary to
make the statements therein not misleading in the light of the
circumstances then existing (following which notification the sellers
agree to discontinue sales of their Covered Stock covered by such
registration statement until such misstatement or omission shall have
been remedied);
(f) use all reasonable efforts (if the offering is
underwritten) to furnish, at the request of any seller, on the date
that Covered Stock is delivered to the underwriters for sale pursuant
to such registration: (i) an opinion of counsel representing the
Company for the purposes of such registration, addressed to the
underwriters and to such seller and dated such date, stating that such
registration statement has become effective under the Securities Act
and that (A) to the best knowledge of such counsel, no stop order
suspending the effectiveness thereof has been issued and no
proceedings for that purpose have been instituted or are pending or
contemplated under the Securities Act, (B) the registration statement,
the related prospectus, and each amendment or supplement thereof
comply as to form in all material respects with the requirements of
the Securities Act and the applicable rules and regulations of the
Commission thereunder (except that such counsel need express no
opinion as to financial statements, the notes thereto, and the
financial schedules and other financial and statistical data contained
therein), and (C) to such other effects as may reasonably be requested
by counsel for the underwriters or by such seller or its counsel and
which are customary in underwritings of the type being undertaken, and
(ii) a letter dated such date from the independent public accountants
retained by the Company, addressed to the underwriters, stating that
they are independent public accountants within the meaning of the
Securities Act and that, in the opinion of such accountants, the
financial statements of the Company included in the registration
statement or the prospectus, or any amendment or supplement thereof,
comply as to form in all material respects with the applicable
accounting requirements of the Securities Act, and such letter shall
additionally cover such other financial matters (including information
as to the period ending no more than five business days prior to the
date of such letter) with respect to the registration in respect of
which such letter
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is being given as such underwriters or seller may reasonably request;
and
(g) make available for inspection by each seller, any
underwriter participating in any distribution pursuant to such
registration statement, and any attorney, accountant or other agent
retained by such seller or underwriter, all financial and other
records, pertinent corporate documents and properties of the Company,
and cause the Company's officers, directors and employees to supply
all information reasonably requested by any such seller, underwriter,
attorney, accountant or agent in connection with such registration
statement and permit such seller, attorney, accountant or agent to
participate in the preparation of such registration statement.
For purposes of paragraphs (a) and (b) above and of Section 4(d) hereof, the
period of distribution of Covered Stock in a firm commitment underwritten
public offering shall be deemed to extend until each underwriter has completed
the distribution of all securities purchased by it, and the period of
distribution of Covered Stock in any other registration shall be deemed to
extend until the earlier of the sale of all Covered Stock covered thereby or
six months after the effective date thereof.
In connection with each registration hereunder, the selling
holders of Covered Stock will furnish to the Company in writing such
information with respect to themselves and the proposed distribution by them as
shall be reasonably necessary in order to assure compliance with federal and
applicable state securities laws.
In connection with each registration pursuant to Sections 4, 5
and 6 hereof covering an underwritten public offering, the Company agrees to
enter into a written agreement with the managing underwriter selected in the
manner herein provided in such form and containing such provisions as are
customary in the securities business for such an arrangement between major
underwriters and companies of the Company's size and investment stature;
provided, however, that such agreement shall not contain any such provision
applicable to the Company which is inconsistent with the provisions hereof, and
provided, further, that the time and place of the closing under said agreement
shall be as mutually agreed upon among the Company, such managing underwriter
and the selling holders of Covered Stock.
8. Expenses. All expenses incurred by the Company in
complying with Sections 4, 5 and 6 hereof, including without limitation all
registration and filing fees, printing expenses, fees and disbursements of
counsel and independent public accountants for the Company, fees of the
National Association of Securities Dealers, Inc., transfer taxes, fees of
transfer agents and registrars and fees and expenses of one counsel for the
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sellers of Covered Stock, but excluding any Selling Expenses, are herein called
"Registration Expenses." All underwriting discounts and selling commissions
applicable to the sale of Covered Stock are herein called "Selling Expenses."
The Company will pay all Registration Expenses in connection
with each registration statement filed pursuant to Section 4, 5 or 6 hereof.
All Selling Expenses in connection with any registration statement filed
pursuant to Section 4, 5 or 6 hereof shall be borne by the participating
sellers in proportion to the number of shares sold by each, or by such persons
other than the Company (except to the extent the Company shall be a seller) as
they may agree.
9. Indemnification. In the event of a registration of
any of the Covered Stock under the Securities Act pursuant to Section 4, 5 or 6
hereof, the Company will indemnify and hold harmless each seller of such
Covered Stock thereunder and each underwriter of Covered Stock thereunder and
each other person, if any, who controls such seller or underwriter within the
meaning of the Securities Act, against any losses, claims, damages or
liabilities, joint or several, to which such seller or underwriter or
controlling person may become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in any registration statement under
which such Covered Stock was registered under the Securities Act pursuant to
Section 4, 5 or 6, any preliminary prospectus or final prospectus contained
therein, or any amendment or supplement thereof, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading, and will reimburse each such seller, each such underwriter and each
such controlling person for any legal or other expenses reasonably incurred by
them in connection with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that the Company will not be
liable in any such case if and to the extent that any such loss, claim, damage
or liability arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission so made in conformity with
information furnished by such seller, such underwriter or such controlling
person in writing specifically for use in such registration statement or
prospectus.
In the event of a registration of any of the Covered Stock
under the Securities Act pursuant to Section 4, 5 or 6 hereof, each seller of
such Covered Stock thereunder, severally and not jointly, will indemnify and
hold harmless the Company and each person, if any, who controls the Company
within the meaning of the Securities Act, each officer of the Company who signs
the registration statement, each director of the Company, each
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underwriter and each person who controls any underwriter within the meaning of
the Securities Act, against all losses, claims, damages or liabilities, joint
or several, to which the Company or such officer, director, underwriter or
controlling person may become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the registration statement under
which such Covered Stock was registered under the Securities Act pursuant to
Section 4, 5 or 6, any preliminary prospectus or final prospectus contained
therein, or any amendment or supplement thereof, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading, and will reimburse the Company and each such officer, director,
underwriter and controlling person for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that such seller will be
liable hereunder in any such case if and only to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement
or alleged untrue statement or omission or alleged omission made in reliance
upon and in conformity with information pertaining to such seller, as such,
furnished in writing to the Company by such seller specifically for use in such
registration statement or prospectus; and provided, further, that the liability
of each seller hereunder shall be limited to the proceeds (net of underwriting
discounts and commissions) received by such seller from the sale of Covered
Stock covered by such registration statement.
Promptly after receipt by an indemnified party hereunder of
notice of the commencement of any action, such indemnified party shall, if a
claim in respect thereof is to be made against the indemnifying party
hereunder, notify the indemnifying party in writing thereof, but the omission
so to notify the indemnifying party shall not relieve it from any liability
which it may have to any indemnified party other than under this Section 9. In
case any such action shall be brought against any indemnified party and it
shall notify the indemnifying party of the commencement thereof, the
indemnifying party shall be entitled to participate in and, to the extent it
shall wish, to assume and undertake the defense thereof with counsel
satisfactory to such indemnified party, and, after notice from the indemnifying
party to such indemnified party of its election so to assume and undertake the
defense thereof, the indemnifying party shall not be liable to such indemnified
party under this Section 9 for any legal expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation and of liaison with counsel so selected; provided,
however, that if the defendants in any such action include both the indemnified
party and the indemnifying
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party and the indemnified party shall have reasonably concluded that there may
be reasonable defenses available to it which are different from or additional
to those available to the indemnifying party, or if the interests of the
indemnified party reasonably may be deemed to conflict with the interests of
the indemnifying party, the indemnified party shall have the right to select a
separate counsel and to assume such legal defenses and otherwise to participate
in the defense of such action, with the expenses and fees of such separate
counsel and other expenses related to such participation to be reimbursed by
the indemnifying party as incurred.
Notwithstanding the foregoing, any indemnified party shall
have the right to retain its own counsel in any such action, but the fees and
disbursements of such counsel shall be at the expense of such indemnified party
unless (i) the indemnifying party shall have failed to retain counsel for the
indemnified person as aforesaid or (ii) the indemnifying party and such
indemnified party shall have mutually agreed to the retention of such counsel.
It is understood that the indemnifying party shall not, in connection with any
action or related actions in the same jurisdiction, be liable for the fees and
disbursements of more than one separate firm qualified in such jurisdiction to
act as counsel for the indemnified party. The indemnifying party shall not be
liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability by
reason of such settlement.
If the indemnification provided for in the first two
paragraphs of this Section 9 is unavailable or insufficient to hold harmless an
indemnified party under such paragraphs in respect of any losses, claims,
damages or liabilities or actions in respect thereof referred to therein, then
each indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities or actions in such proportion as
appropriate to reflect the relative fault of the Company, on the one hand, and
the underwriters and the sellers of such Covered Stock, on the other, in
connection with the statements or omissions which resulted in such losses,
claims, damages, liabilities or actions as well as any other relevant equitable
considerations, including the failure to give any notice under the third
paragraph of this Section 9. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact relates to information supplied by the Company, on
the one hand, or the underwriters and the sellers of such Covered Stock, on the
other, and to the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The Company
and each of you agree that it would not be just and equitable if contributions
pursuant
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to this paragraph were determined by pro rata allocation (even if all of the
sellers of such Covered Stock were treated as one entity for such purpose) or
by any other method of allocation which did not take account of the equitable
considerations referred to above in this paragraph. The amount paid or payable
by an indemnified party as a result of the losses, claims, damages, liabilities
or action in respect thereof, referred to above in this paragraph, shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this paragraph, the sellers of
such Covered Stock shall not be required to contribute any amount in excess of
the amount, if any, by which the total price at which the Common Stock sold by
each of them was offered to the public exceeds the amount of any damages which
they would have otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission. No person guilty of fraudulent
misrepresentations (within the meaning of Section 11(f) of the Securities Act),
shall be entitled to contribution from any person who is not guilty of such
fraudulent misrepresentation.
The indemnification of underwriters provided for in this
Section 9 shall be on such other terms and conditions as are at the time
customary and reasonably required by such underwriters. In that event, the
indemnifica- tion of the sellers of Covered Stock in such underwriting shall at
the sellers' request be modified to conform to such terms and conditions.
10. Changes in Common Stock. If, and as often as, there
are any changes in the Common Stock by way of stock split, stock dividend,
combination or reclassification, or through merger, consolidation,
reorganization or recapitalization, or by any other means, appropriate
adjustment shall be made in the provisions hereof, as may be required, so that
the rights and privileges granted hereby shall continue with respect to the
Common Stock as so changed.
11. Representations and Warranties of the Company. The
Company represents and warrants to you as follows:
(a) The execution, delivery and performance of this
Agreement by the Company have been duly authorized by all requisite
corporate action and will not violate any provision of law, any order
of any court or other agency of government, the Restated Certificate
of Incorporation or By-laws of the Company, or any provision of any
indenture, agreement or other instrument to which it or any of its
properties or assets is bound, or conflict with, result in a breach of
or constitute (with due notice or lapse of time or both) a default
under any such indenture, agreement or other instrument, or result in
the creation or imposition of any lien,
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charge or encumbrance of any nature whatsoever upon any of the
properties or assets of the Company.
(b) This Agreement has been duly executed and delivered
by the Company and constitutes the legal, valid and binding obligation
of the Company, enforceable in accordance with its terms, subject to
consider- ations of public policy in the case of the indemnification
provisions hereof.
12. Rule 144 Reporting. The Company agrees with you as
follows:
(a) The Company shall make and keep public information
available, as those terms are understood and defined in Rule 144(c)(1)
or (c)(2), whichever is applicable, under the Securities Act, at all
times from and after the date it is first required to do so.
(b) The Company shall file with the Commission in a
timely manner all reports and other documents as the Commission may
prescribe under Section 13(a) or 15(d) of the Exchange Act at all
times during which the Company is subject to such reporting
requirements of the Exchange Act.
(c) The Company shall furnish to such holder of Covered
Stock forthwith upon request (i) a written statement by the Company as
to its compliance with the reporting requirements of Rule 144 (at any
time from and after the date it first becomes subject to such
reporting requirements) and of the Securities Act and the Exchange Act
(at any time during which it is subject to such reporting
requirements), (ii) a copy of the most recent annual or quarterly
report of the Company and (iii) such other reports and documents so
filed as a holder may reasonably request to avail itself of any rule
or regulation of the Commission allowing a holder of Covered Stock to
sell any such securities without registration.
13. Miscellaneous.
(a) All covenants and agreements contained in this
Agreement by or on behalf of any of the parties hereto shall bind and inure to
the benefit of the respective successors and assigns of the parties hereto
whether so expressed or not. Without limiting the generality of the foregoing,
the registration rights conferred herein on the holders of Covered Stock shall
inure to the benefit of any and all subsequent holders from time to time of the
Covered Stock for so long as the certificates representing the Covered Stock
shall be required to bear the legend specified in Section 2 hereof.
(b) All notices, requests, consents and other
communications hereunder shall be in writing and shall be mailed by
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first class registered mail, postage prepaid, addressed as follows:
if to the Company, to it at:
Aurora Electronics, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President
with a copy to:
▇▇▇▇▇▇ & ▇▇▇▇ L.L.P.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
if to any original holder of Restricted Stock, to such holder at the
address as set forth under such holder's name in Annex I to the
Original Purchase Agreement;
if to any original holder of Schedule II Common Shares, to such holder
at the address as set forth under such holder's name in Schedule II
hereto;
if to any subsequent holder of Covered Stock, to such holder at such
address as may have been furnished to the Company in writing by such
holder;
or, in any case, at such other address or addresses as shall have been
furnished in writing to the Company (in the case of a holder of Covered Stock)
or to the holders of Covered Stock (in the case of the Company).
(c) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
(d) This Agreement constitutes the entire agreement of the parties
with respect to the subject matter hereof. This Agreement may not be modified
or amended except in a writing signed by the Company and the holders of not
less than a majority of the Covered Stock then outstanding, provided that no
modification or amendment shall deprive any holder of Covered Stock of any
material right under this Agreement without such holder's consent. The Company
will not grant any registration rights to any other person without the written
consent of the holders of a majority of the Covered Stock then outstanding if
such rights could reasonably be expected to conflict with, or be on a parity
with, the rights of holders of Covered Stock granted under this Agreement.
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(e) This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
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Please indicate your acceptance of the foregoing by signing
and returning the enclosed counterpart of this letter, whereupon this letter
(herein sometimes called "this Agreement") shall be a binding agreement between
the Company and you.
Very truly yours,
AURORA ELECTRONICS, INC.
By
------------------------------
Name:
Title:
AGREED TO AND ACCEPTED
as of the date first
above written.
WELSH, CARSON, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ VII, L.P.
By WCAS VII Partners, L.P., General Partner
By:
------------------------------
WCAS CAPITAL PARTNERS II, L.P.
By WCAS ▇▇ ▇▇ Partners, General Partner
By:
------------------------------
WCAS INFORMATION PARTNERS, L.P.
By WCAS Info Partners, General Partner
By:
------------------------------
20
THE ▇▇▇▇▇▇ ▇▇▇▇ TRUST
By:
------------------------------
Trustee
---------------------------------
▇▇▇ ▇. ▇▇▇▇▇▇
CHEMICAL EQUITY ASSOCIATES,
A California Limited Partnership
By Chemical Venture Partners,
General Partner
By:
------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. de ▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
By:
------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Individually and
as Attorney-in-Fact
[Add signature blocks for Schedule II holders]
21
SCHEDULE I
Welsh, Carson, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ VII, L.P.
WCAS Capital Partners II, L.P.
WCAS Information Partners, L.P.
The ▇▇▇▇▇▇ ▇▇▇▇ Trust
▇▇▇ ▇. ▇▇▇▇▇▇
Chemical Equity Associates
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. de ▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
22
SCHEDULE II
[NAME]
[ADDRESS]
