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Exhibit 4.12
AUREAL SEMICONDUCTOR INC.
8% SERIES B CONVERTIBLE PREFERRED
STOCK PURCHASE AGREEMENT
THIS 8% SERIES B CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT is made
as of June 5, 1998, by and among AUREAL SEMICONDUCTOR INC., a Delaware
corporation (the "Company"), and the purchasers set forth on the Schedule of
Purchasers attached hereto as Exhibit A (the "Purchasers").
WHEREAS, the Purchasers, as either an original lender or assignee of an
original lender, and the Company are parties to the Second Amended and Restated
Loan Agreement dated August 7, 1997, as amended by the First Amendment to Second
Amended and Restated Loan Agreement dated as of May 6, 1998 (the "Loan
Agreement"), pursuant to which, among other things, the Purchasers increased the
amount of the revolving credit facility to up to $31.5 million, have fully
funded the Tranche A and B commitment of the revolving credit facility (such
outstanding Tranche A and B, hereinafter the "Outstanding Debt");
WHEREAS, the Purchasers are the record and beneficial owners of the
Outstanding Debt under the Loan Agreement in the amounts set forth on Exhibit A;
and
WHEREAS, the Purchasers seek to convert the Outstanding Debt into equity
of the Company upon the terms set forth herein.
NOW, THEREFORE, in consideration of the mutual promises, covenants and
conditions hereinafter set forth, the parties hereby agree as follows:
1. Sale of Stock. Subject to the terms and conditions hereof, the
Company will issue and sell to each Purchaser, and each Purchaser will purchase
from the Company, at a Closing (as defined below), the number of shares of 8%
Series B Convertible Preferred Stock of the Company (the "Series B Stock") set
forth opposite each Purchaser's name on Exhibit A. In consideration for each
share of Series B Stock, each Purchaser shall agree to cancel eight hundred
dollars ($800.00) of the Outstanding Debt owed by the Company to such Purchaser.
In connection with the foregoing transactions, the Company acknowledges that the
participation interests in the Tranche B Commitment (as such term is defined in
the Loan Agreement) in the amount of $4.5 million has been, immediately prior
hereto, elevated to an assignment.
2. Closing Date; Delivery.
2.1 Closing Date. The closing of the purchase and sale of the
Series B Stock (the "Closing") shall be held on June 5, 1998 (the "Closing
Date"), at the offices of Xxxx Xxxx Xxxx & Freidenrich LLP, 000 Xxxxxxxx Xxxxxx,
Xxxx Xxxx, Xxxxxxxxxx 00000-0000.
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2.2 Delivery. Subject to the terms of this Agreement, at the
Closing the Company will deliver to the Purchasers the stock certificates
representing the Series B Stock to be purchased by the Purchasers from the
Company, against cancellation of the Outstanding Debt owed by the Company to
each Purchaser.
3. Representations and Warranties of the Company. Except as set forth in
Exhibit B attached hereto, the Company hereby represents and warrants to the
Purchasers as follows:
3.1 Organization and Standing; Certificate of Incorporation and
Bylaws. The Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware and has all requisite
corporate power and authority to carry on its business as now conducted and as
proposed to be conducted. The Company is presently qualified, licensed or
domesticated as a foreign corporation or partnership in all jurisdictions in
which the failure to be so qualified, licensed or domesticated would result in
material adverse consequences to the Company or its business.
3.2 Corporate Power. The Company has all requisite legal and
corporate power to enter into this Agreement and all other agreements
contemplated hereby, to sell the Series B Stock hereunder, and to carry out and
perform its obligations under the terms of this Agreement and all other
agreements contemplated hereby. This Agreement and all other agreements
contemplated hereby are valid and binding obligations of the Company, except as
the same may be limited by bankruptcy, insolvency, fraudulent conveyance,
moratorium, usury, reorganization, and other laws of general application
affecting the enforcement of creditors' rights.
3.3 Capitalization. The authorized capital stock of the Company
is 100,000,000 shares of Common Stock and 5,000,000 shares of Preferred Stock.
As of March 27, 1998, there were issued and outstanding 42,082,938 shares of the
Company's Common Stock and 500 shares of the Company's Series A Preferred Stock
("Series A Stock"). All such issued and outstanding shares have been duly
authorized and validly issued, are fully paid and non-assessable and were issued
in compliance with all applicable state and federal laws concerning the issuance
of securities. The Company maintains stock option plans and has issued stock
options and warrants as noted below:
(a) Shares of Common Stock reserved for issuance pursuant
to exercise of current or future outstanding options under the Company's 1995
Stock Option Plan and 1994 Stock Option Plan (collectively, the "Plans") issued
to employees or consultants to the Company: 9,594,975;
(b) Shares of Common Stock reserved for issuance pursuant
to exercise of current or future outstanding options under the Crystal River
Engineering, Inc. Stock Option Plan: 1,999,269;
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(c) Shares of Common Stock reserved for issuance pursuant
to exercise of current or future outstanding options under the Company's Outside
Director Stock Option Plan: 200,000;
(d) Shares of Common Stock reserved for issuance pursuant
to exercise of warrants to be issued to certain lenders in connection with the
expansion and restructuring of the Company's debt and extension thereof through
March 31, 2000: 3,150,000;
(e) Shares of Common Stock reserved for issuance pursuant
to exercise of an outstanding warrant to Xxxxxxxxx & Xxxxx: 50,000;
(f) Shares of Common Stock reserved for issuance pursuant
to exercise of outstanding warrants issued by the Company to purchasers of units
on August 6, 1997: 955,000; and
(g) Shares of Common Stock reserved for issuance pursuant
to exercise of outstanding warrants to Xxxxxx Investments, LLC: 140,000.
Other than the above noted reserved shares and the Common Stock to be
reserved for issuance upon conversion of the Series A Stock and the Series B
Stock, there are no outstanding rights, options, warrants, conversion rights or
agreements for the purchase or acquisition from the Company of any shares of its
capital stock. The Company is not a party or subject to any agreement or
understanding between any persons or entities which affects or relates to the
voting or giving of written consents with respect to any securities or by any
director of the Company.
3.4 Authorization.
(a) All corporate, federal and state action on the part of
the Company, its officers, directors and stockholders necessary for the sale and
issuance of the Series B Stock, and the Common Stock issuable upon conversion of
the Series B Stock pursuant hereto and the performance of the Company's
obligations hereunder or contemplated hereby has been taken or will be taken
prior to the Closing.
(b) The Series B Stock, when issued in compliance with the
provisions of this Agreement, and the Common Stock issuable upon conversion of
the Series B Stock, as provided for in the Certificate of Designation (the
"Certificate of Designation"), a form of which is attached hereto as Exhibit C,
will be validly issued, fully paid and nonassessable, and will be free of any
liens or encumbrances; provided, however, that the Series B Stock and the Common
Stock issuable upon conversion thereof may be subject to restrictions on
transfer under state and/or federal securities laws as set forth herein, and as
may be required by future changes in such laws.
(c) No person has any right of first refusal or any
preemptive rights in connection with the issuance of the Series B Stock or the
Common Stock issuable upon conversion of the Series B Stock.
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3.5 Patents, Trademarks, etc. Except as set forth in Exhibit B,
the Company owns and possesses or is licensed under all patents, patent
applications, licenses, trademarks, trade names, brand names, inventions,
processes, formulae and copyrights necessary for the operation of the business
of the Company as now conducted and as proposed to be conducted with no known
infringement of or conflict with the rights of others. Except as contemplated in
this Agreement, there are no outstanding options, licenses, or agreements of any
kind relating to the foregoing, nor is the Company bound by or a party to any
other options, licenses or agreements of any kind with respect to the patents,
trademarks, service marks, trade names, copyrights, trade secrets, licenses,
information, proprietary rights and processes of any other person or entity.
Except as disclosed in the Company's Annual Report on Form 10-K for the period
ended December 28, 1997 (the "10-K"), the Company has not received any
communications alleging that it has violated or, by conducting its business as
proposed, would violate any of the patents, trademarks, service marks, trade
names, copyrights or trade secrets or other proprietary rights of any other
person or entity. The Company is not aware that any of its employees are
obligated under any contract (including licenses, covenants or commitments of
any nature) or other agreement, or subject to any judgment, decree or order of
any court or administrative agency, that would interfere with the use of his or
her best efforts to promote the interests of the Company or that would conflict
with the Company's business as proposed to be conducted or that would prevent
any such employee from assigning inventions to the Company. Neither the
execution nor delivery of this Agreement, nor the carrying on of the Company's
business as proposed, will, to the best of the Company's knowledge, conflict
with or result in a breach of the terms, conditions or provisions of, or
constitute a default under, any contract, covenant or instrument under which any
of such employees is now obligated. The Company does not believe that it is or
will be necessary for the Company to utilize any inventions of any of its
employees (or people it currently intends to hire) made prior to their
employment by the Company.
3.6 Compliance with Other Instruments, None Burdensome, etc. The
Company is not in violation of any term of its Certificate of Incorporation or
Bylaws, nor is the Company in violation in any material respect of any mortgage,
indenture, contract, agreement, instrument, judgment or decree, and to the best
of the Company's knowledge, the Company is not in violation of any order,
statute, rule or regulation applicable to the Company, including by not limited
to the Securities Exchange Act of 1934 and the reporting obligations of the
issuer with respect to Rule 144 under the Securities Act. The execution,
delivery and performance of and compliance with this Agreement and the other
agreements contemplated hereby, and the issuance and sale of the Series B Stock
(and the issuance of the Common Stock issuable upon conversion of the Series B
Stock) pursuant hereto, will not result in (a) any such violation, or (b) be in
conflict with or constitute a default under any such term or (c) result in the
creation of any mortgage, pledge, lien, encumbrance or charge upon any of the
properties or assets of the Company pursuant to any such term. In addition, the
execution, delivery and performance of and compliance with this Agreement and
the other agreements contemplated hereby, and the issuance and sale of the
Series B Stock pursuant hereto, will not result in a violation of any law,
statute or regulation applicable to the Company, including Section 203 of the
Delaware General Corporation Law.
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3.7 Employees. Each officer and key employee of the Company has
executed an Employee Proprietary and Confidential Information Agreement. The
Company, after reasonable investigation, is not aware that any of its employees
are in violation thereof, and the Company will use its best efforts to prevent
any such violation.
3.8 Litigation, etc. Except as set forth on Exhibit B, there are
no actions, proceedings or investigations pending against the Company or its
officers, directors, or stockholders, or to the best of the Company's knowledge,
against employees or consultants of the Company (or, to the best of the
Company's knowledge, any basis therefor or threat thereof): (1) which might
result in (a) any material adverse change in the business, prospects,
conditions, affairs or operations of the Company, or in any of their properties
or assets, or (b) any material impairment of the right or ability of the Company
to carry on its business as now conducted or as proposed to be conducted, or (c)
any material liability on the part of the Company; or (2) which questions the
validity of this Agreement or any action taken or to be taken in connection
herewith. The Company does not currently plan to initiate any litigation.
3.9 Governmental Consent, etc. No consent, approval or
authorization of or designation, declaration or filing with any governmental
authority or any other person on the part of the Company is required in
connection with: (a) the valid execution and delivery of this Agreement; or (b)
the offer, sale or issuance of the Series B Stock (or the Common Stock issuable
upon conversion of the Series B Stock); or (c) the obtaining of the consents,
permits and waivers specified in subsection 5.1(c) hereof; or (d) the
consummation of any other transaction contemplated hereby; except, if required,
filings or qualifications under the Securities Act of 1933, as amended (the
"Securities Act") and California Corporate Securities Law of 1968, as amended
(the "Law"), which filings or qualifications, if required, will have been timely
filed or obtained.
3.10 Offering. In reliance on the representations and warranties
of the Purchasers in Section 4 hereof, the offer, sale and issuance of the
Series B Stock in conformity with the terms of this Agreement will not result in
a violation of the requirements of Section 5 of the Securities Act or the
qualification requirements of the Law.
3.11 Taxes. The Company has timely filed all tax returns that are
required to have been filed with appropriate federal, state, county and local
governmental agencies or instrumentalities. The Company has paid or established
reserves for all income, franchise and other taxes due as reflected on said
returns. There is no pending dispute with any taxing authority relating to any
of such returns and the Company has no knowledge of any proposed liability for
any tax to be imposed upon the properties or assets of the Company for which
there is not an adequate reserve reflected in the Company's financial statements
contained in the 10-K.
3.12 Registration Rights. Except pursuant to the Registration
Rights Agreement, dated as of December 30, 1994, as amended (the "Rights
Agreement"), by and among the Company, TCW Special Credits, a California general
partnership as agent and nominee for the entities set forth on Schedule I to the
Rights Agreement, Appaloosa Management L.P., as agent for the accounts listed on
Schedule I to the Rights Agreement, the Copernicus Fund, L.P.,
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the Galileo Fund, L.P., and certain purchasers of the Company's Common Stock,
and the Registration Rights Agreement dated March 6, 1998, among the Company,
Xxxxxx Investments, LLC and subscribers of the Company's Series A Stock, the
Company is not obligated to register any of its presently outstanding securities
which may hereafter be issued.
3.13 Disclosure. Neither this Agreement and the exhibits hereto,
nor any of the other statements or certificates furnished or to be furnished to
the Purchasers pursuant hereto or in connection with the transactions
contemplated hereby, including the 10-K, contains any untrue statement of a
material fact or omits to state any material fact necessary in order to make the
statements contained herein and therein not misleading in light of the
circumstances under which such statements were made.
3.14 Compliance with Public Reporting Requirements. As of the
Closing Date, the Company is in compliance in all material respects with the
applicable requirements of the Exchange Act of 1934, as amended.
4. Representations, Warranties and Covenants of the Purchasers and
Restrictions on Transfer Imposed by the Securities Act of 1933.
4.1 Representations, Warranties and Covenants by the Purchasers.
Each Purchaser represents, warrants and covenants to the Company as follows:
(a) The Series B Stock and the Common Stock issuable upon
conversion of the Series B Stock (collectively, for purposes of this Section 4,
the "Securities") to be received by the Purchaser will be acquired for
investment for the Purchaser's own account, for investment and not with a view
to, or for resale in connection with, any distribution or public offering
thereof within the meaning of the Securities Act and the Law. The Purchaser has
the full right, power and authority to enter into and perform this Agreement and
all other agreements contemplated hereby, and this Agreement and all other
agreements contemplated hereby constitute valid and binding obligations of the
Purchaser. The Purchaser acknowledges and understands that the Securities must
be held indefinitely unless the Securities are subsequently registered under the
Securities Act and qualified under the Law or an exemption from such
registration and such qualification is available.
(b) The Purchaser will not sell, negotiate, pledge or
otherwise dispose of any of the Securities (other than in conjunction with an
effective registration statement for the Securities under the Securities Act or
an exemption from registration under applicable federal securities laws).
(c) The Purchaser has such knowledge and experience in
financial and business matters as to be capable of evaluating the merits and
risks of the Purchaser's prospective investment in the Securities. The Purchaser
has the ability to bear the economic risks of the Purchaser's prospective
investment. The Purchaser has been furnished with and has had access to such
information as the Purchaser has considered necessary to make a determination as
to the purchase of the Securities together with such additional information as
is necessary to verify the
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accuracy of the information supplied. The Purchaser is fully aware of (i) the
highly speculative nature of the investment in the Securities; (ii) the
financial hazards involved; (iii) the lack of liquidity of the Securities, and
the restrictions on the transferability of the Securities; and (iv) the tax
consequences of investment in the Securities. The Purchaser has had all
questions which have been asked by the Purchaser satisfactorily answered by the
Company. The Purchaser has not been offered the Series B Stock by any form of
advertisement, article, notice or other communication published in any
newspaper, magazine, or similar media or broadcast over television or radio, or
any seminar or meeting whose attendees have been invited by any such media.
4.2 Legends. Each certificate or other instruments representing
any of the Securities may be endorsed with the following legends:
(a) THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE
SOLD, TRANSFERRED, ASSIGNED OR HYPOTHECATED UNLESS THERE IS AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH ACT COVERING SUCH SECURITIES, THE SALE IS MADE
IN ACCORDANCE WITH RULE 144 UNDER THE ACT, OR THE COMPANY RECEIVES AN OPINION OF
COUNSEL FOR THE HOLDER OF THESE SECURITIES REASONABLY SATISFACTORY TO THE
COMPANY, STATING THAT SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT
FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT.
(b) Any other legends required by the Law.
The Company need not register a transfer of legended Securities,
and may also instruct its transfer agent not to register the transfer of the
Securities unless the conditions specified in each of the foregoing legends are
satisfied.
4.3 Removal of Legend and Transfer Restrictions. Any legend
endorsed on a certificate or other instrument pursuant to subsection 4.2(a) and
4.2(b) and the stop transfer instructions with respect to such legended
securities shall be removed, and the Company shall issue a certificate without
such legend to the holder of such securities if such securities are registered
under the Securities Act and a prospectus meeting the requirements of Section 10
of the Securities Act is available or if such holder satisfies the requirements
of Rule 144(k) and, where reasonably deemed necessary by the Company, the holder
provides the Company with an opinion of counsel for such holder of the
securities, reasonably satisfactory to the Company, to the effect that (i) such
holder meets the requirements of Rule 144(k) or (ii) a public sale, transfer or
assignment of such securities may be made without registration.
4.4 Rule 144. The Purchaser is aware of the adoption of Rule 144
by the Securities and Exchange Commission (the "SEC") promulgated under the
Securities Act, which permits limited public resales of securities acquired in a
nonpublic offering, subject to the satisfaction of certain conditions. The
Purchaser understands that under Rule 144, the conditions
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include, among other things: the availability, under certain conditions, of
certain current public information about the issuer and the resale occurring not
less than one year (with certain restrictions) after the party has purchased and
paid for the securities to be sold. The Company covenants that (i) the Company
will use its best efforts to comply with the current public information
requirements of Rule 144(c)(1) under the Securities Act and (ii) at all such
times as Rule 144 is available for use by the Purchaser, the Company will
furnish the Purchaser upon request with all information within the possession of
the Company required for the preparation and filing of Form 144.
5. Conditions to Closing.
5.1 Conditions to the Purchasers' Obligations. The obligation of
the Purchasers to purchase the Series B Stock at the Closing is subject to the
fulfillment to their satisfaction, on or prior to the Closing Date, of the
following conditions, any of which may be waived in accordance with the
provisions of subsection 6.1 hereof:
(a) Representations and Warranties Correct; Performance of
Obligations. The representations and warranties made by the Company in Section 3
hereof shall be true and correct when made, and shall be true and correct in all
material respects on the Closing Date with the same force and effect as if they
had been made on and as of said date. The Company's business and assets shall
not have been adversely affected in any material way prior to the Closing Date.
The Company shall have performed in all material respects all obligations and
conditions herein required to be performed or observed by it on or prior to the
Closing Date.
(b) Opinion of Company's Counsel. Xxxx Xxxx Xxxx &
Freidenrich LLP, counsel to the Company, shall have delivered an opinion
addressed to the Purchasers, dated the Closing Date, substantially in the form
as that attached hereto as Exhibit D.
(c) Consents and Waivers. The Company shall have obtained
in a timely fashion any and all consents, permits and waivers necessary or
appropriate for consummation of the transactions contemplated by this Agreement.
(d) Legal Investment. At the time of the Closing, the
purchase of the Series B Stock hereunder shall be legally permitted by all laws
and regulations to which the Purchasers and the Company are subject.
(e) Compliance Certificate. The Company shall have
delivered a Certificate, executed by the President and the Chief Financial
Officer of the Company, dated the Closing Date, certifying to the fulfillment of
the conditions specified in subsections (a), (c) and (d) of this Section 5.1.
(f) Execution of Amendment to the Rights Agreement. The
Company and the Purchasers shall have executed Amendment No. 4 to the
Registration Rights Agreement dated December 30, 1994, in the form attached
hereto as Exhibit E.
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(g) Fairness Opinion. Xxxxxxxx Xxxxx Xxxxxx & Xxxxx
("HLHZ") shall have delivered an opinion to the Company regarding the fairness
of the sale of the Series B Stock by the Company to the Purchasers, in a form
reasonably satisfactory to the Purchasers and the Company.
5.2 Conditions to Obligations of the Company. The Company's
obligation to sell and issue the Series B Stock at the Closing is subject to the
fulfillment to the Company's satisfaction on or prior to the Closing Date of the
following conditions, any of which may be waived by the Company in accordance
with the provisions of subsection 6.1 hereof:
(a) Representations and Warranties Correct. The
representations and warranties made by the Purchasers in Section 4 hereof shall
be true and correct when made, and shall be true and correct on the Closing Date
with the same force and effect as if they had been made on and as of said date.
(b) Consents and Waivers. Each of the Purchasers shall
have obtained in a timely fashion any and all consents, permits and waivers
necessary or appropriate for consummation of the transactions contemplated by
this Agreement.
(c) Outstanding Debt. The Company shall have received
documentation regarding the cancellation the Outstanding Debt from the
Purchasers prior to the Closing.
(d) Release of Security Interests. The Purchasers shall
have filed the appropriate UCC forms to release all of the Purchasers' liens on
the Company's assets.
(e) Fairness Opinion. HLHZ shall have delivered an opinion
to the Company regarding the fairness of the sale of the Series B Stock by the
Company to the Purchasers, in a form reasonably satisfactory to the Purchasers
and the Company.
(f) Satisfaction of Conditions. The conditions set forth
in subsections (c) and (d) of Section 5.1 shall have been fulfilled.
6. Miscellaneous.
6.1 Waivers and Amendments. This Agreement or any provision
hereof may be amended, waived, discharged or terminated only by a statement in
writing signed by the party against which enforcement of the amendment, waiver,
discharge or termination is sought.
6.2 Governing Law. This Agreement shall be governed in all
respects by the laws of the State of California without regard to conflict of
law principles.
6.3 Survival. The representations, warranties, covenants and
agreements made herein shall survive the Closing of the transactions
contemplated hereby, notwithstanding any investigation made by the Purchasers.
All statements as to factual matters contained in any
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certificate or other instrument delivered by or on behalf of the Company
pursuant hereto or in connection with the transactions contemplated hereby shall
be deemed to be representations and warranties by the Company hereunder as of
the date of such certificate or instrument.
6.4 Successors and Assigns. Except as otherwise expressly
provided herein, the provisions hereof shall inure to the benefit of, and be
binding upon, the successors and assigns of the parties hereto.
6.5 Entire Agreement. This Agreement and the other documents
delivered pursuant hereto constitute the full and entire understanding and
agreement between the parties with regard to the subjects hereof and supersede
all prior and contemporaneous agreements, understandings, negotiations and
discussions, whether oral or written, of the parties with respect thereto.
6.6 Notices, etc. All notices and other communications required
or permitted hereunder shall be in writing and shall be delivered personally or
mailed by first class mail, postage prepaid, or via facsimile or TWX/Telex,
addressed (a) if to the Purchasers at the address set forth on Exhibit A to this
Agreement, or at such other address as the Purchasers shall have furnished to
the Company in writing, or (b) if to the Company, at its address set forth at
the beginning of this Agreement, or at such other address as the Company shall
have furnished to the Purchasers in writing, with a copy of any said notice to
be sent to Xxxx Xxxx Xxxx & Freidenrich LLP, 000 Xxxxxxxx Xxxxxx, Xxxx Xxxx,
Xxxxxxxxxx 00000-0000, Attention: Xxxxx X. Xxxxxxxx, Esq. Notices that are
mailed shall be deemed received ten (10) days after deposit in the mail. In the
event that the notice is sent by facsimile or TWX/Telex, notice shall be deemed
to have been received when sent and confirmed as to receipt.
6.7 Severability. In case any provision of this Agreement shall
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions of this Agreement shall not in any way be affected
or impaired thereby.
6.8 Expenses. The Company and the Purchasers shall each bear
their own expenses and legal fees in connection with this Agreement and the
transactions contemplated hereby. Notwithstanding the foregoing, the Company
shall pay the reasonable legal fees and related costs of the Purchasers, up to
an aggregate of $10,000.
6.9 Titles and Subtitles. The titles of the sections and
subsections of this Agreement are for convenience of reference only and are not
to be considered in construing this Agreement.
6.10 Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
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6.11 Delays or Omissions. No delay or omission to exercise any
right, power or remedy accruing to the Company or to the Purchasers shall impair
any such right, power or remedy of the Company or the Purchasers, nor shall it
be construed to be a waiver of any breach or default under this Agreement, or an
acquiescence therein, or of or in any similar breach or default thereafter
occurring; nor shall any delay or omission to exercise any right, power or
remedy or any waiver of any single breach or default be deemed a waiver of any
other right, power or remedy or breach or default theretofore or thereafter
occurring. All remedies, either under this Agreement, or by law otherwise
afforded to the Company or the Purchasers, shall be cumulative and not
alternative.
6.12 Arbitration. Any controversy or claim arising out of or
related to this Agreement or the breach thereof, shall be settled by binding
arbitration in San Francisco, California in accordance with the Expedited
Procedures (Rules 53-57) of the Commercial Arbitration Rules of the American
Arbitration Association ("AAA"). A proceeding may be commenced upon written
demand by the Company, any original Purchaser (as set forth on Exhibit A hereto)
or Purchasers holding a majority of the Series B Stock. The arbitrator shall
enter a judgment by default against any party which fails or refuses to appear
in any properly noticed arbitration proceeding. The proceeding shall be
conducted by one arbitrator. The arbitrator will be chosen by the parties from a
list provided by the AAA, and if they are unable to agree within ten (10) days,
the AAA shall select the arbitrator. The arbitrator must be an expert in
securities law and financial transactions. The nonprevailing party in any
arbitration shall pay all costs and expenses incurred by the prevailing party,
including reasonable attorney fees and expenses. Each party submits irrevocably
to the jurisdiction of any state court or United States District Court sitting
in San Francisco, California for purposes of enforcement of any discovery order,
judgment or award in connection with such arbitration. The award of the
arbitrator shall be final and binding upon the parties and may be enforced in
any court having jurisdiction.
AUREAL SEMICONDUCTOR INC.
By /s/ Xxxxx X. Xxxxxxx
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COUNTERPART SIGNATURE PAGE TO
8% SERIES B CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
DATED AS OF JUNE 5, 1998
"PURCHASER"
TCW Special Credits, as agent and on behalf
of the funds and accounts set forth on
Schedule I, attached hereto
By: TCW Asset Management Company
Its: Managing General Partner
By: /s/ Xxxxxxx Xxxxxx
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Its: Authorized Signatory
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By: /s/ Xxxxxxx Xxxxx
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Its: Authorized Signatory
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B III Capital Partners, L.P.
By: DDJ Capital III, LLC, its General Partner
By: DDJ Capital Management, LLC, its Manager
/s/ Xxxxxx X. Xxxxxxx
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Title: Member
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