EXHIBIT 4.7
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "AGREEMENT") is made and
entered into as of January 28, 1999, among ThrustMaster, Inc., an Oregon
corporation (the "COMPANY"), Strong River Investment Inc. ("STRONG RIVER"),
a corporation organized under the laws of the British Virgin Islands,
Westover Investments L.P. ("WESTOVER"), a Delaware limited partnership, and
Montrose Investments L.P. ("MONTROSE"), a Cayman Islands exempt limited
partnership. Strong River, Westover and Montrose are each referred to herein
as a "PURCHASER" and are collectively referred to herein as the "PURCHASERS".
This Agreement is made pursuant to the Common Stock Purchase Agreement,
dated as of the date hereof, among the Company and the Purchasers (the
"PURCHASE AGREEMENT").
The Company and the Purchasers hereby agree as follows:
1. DEFINITIONS
Capitalized terms used and not otherwise defined herein that are
defined in the Purchase Agreement shall have the meanings given such terms in
the Purchase Agreement. As used in this Agreement, the following terms shall
have the following meanings:
"ADVICE" shall have meaning set forth in Section 3(o).
"AFFILIATE" means, with respect to any Person, any other Person
that directly or indirectly controls or is controlled by or under common
control with such Person. For the purposes of this definition, "CONTROL,"
when used with respect to any Person, means the possession, direct or
indirect, of the power to direct or cause the direction of the management and
policies of such Person, whether through the ownership of voting securities,
by contract or otherwise; and the terms of "AFFILIATED," "CONTROLLING" and
"CONTROLLED" have meanings correlative to the foregoing.
"BUSINESS DAY" means any day except Saturday, Sunday and any day
which shall be a legal holiday or a day on which banking institutions in the
state of New York or Oregon generally are authorized or required by law or
other government actions to close.
"COMMISSION" means the Securities and Exchange Commission.
"COMMON STOCK" means the Company's common stock, no par value.
"EFFECTIVENESS DATE" means (i) with respect to the Registration
Statement to be filed with respect to the Tranche 1 Shares, the First Tranche
1 Warrant Shares, the Second
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Tranche 1 Warrant Shares, the First Tranche 1 Adjustment Shares and the
Second Tranche 1 Adjustment Shares, the 90th day following the Tranche 1
Closing Date, (ii) with respect to the Registration Statement to be filed
with respect to the Tranche 2 Shares, the First Tranche 2 Adjustment Shares
and the Second Tranche 2 Adjustment Shares, the 90th day following the
Tranche 2 Closing Date and (iii) with respect to the Registration Statement
to be filed with respect to the Tranche 3 Shares, the First Tranche 3 Warrant
Shares, the Second Tranche 3 Warrant Shares, the First Tranche 3 Adjustment
Shares and the Second Tranche 3 Adjustment Shares, the 90th day following the
Tranche 3 Closing Date.
"EFFECTIVENESS PERIOD" shall have the meaning set forth in Section
2(a).
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"FILING DATE" means (i) with respect to the Registration Statement
to be filed with respect to the Tranche 1 Shares, the First Tranche 1 Warrant
Shares, the Second Tranche 1 Warrant Shares, the First Tranche 1 Adjustment
Shares and the Second Tranche 1 Adjustment Shares, the 35th day following the
Tranche 1 Closing Date, (ii) with respect to the Registration Statement to be
filed with respect to the Tranche 2 Shares, the First Tranche 2 Adjustment
Shares and the Second Tranche 2 Adjustment Shares, the 35th day following the
Tranche 2 Closing Date and (iii) with respect to the Registration Statement
to be filed with respect to the Tranche 3 Shares, the First Tranche 3 Warrant
Shares, the Second Tranche 3 Warrant Shares, the First Tranche 3 Adjustment
Shares and the Second Tranche 3 Adjustment Shares, the 35th day following the
Tranche 3 Closing Date.
"HOLDER" or "HOLDERS" means the holder or holders, as the case may
be, from time to time of Registrable Securities.
"INDEMNIFIED PARTY" shall have the meaning set forth in Section
5(c).
"INDEMNIFYING PARTY" shall have the meaning set forth in Section
5(c).
"LOSSES" shall have the meaning set forth in Section 5(a).
"MAXIMUM PURCHASE PRICE" shall have the meaning set forth in
Section 2(d).
"PER SHARE MARKET VALUE" means on any particular date (a) the
closing bid price per share of the Common Stock on such date on the Nasdaq
National Market or on any other stock market or trading facility on which the
shares of Common Stock are primarily traded, listed or quoted (each a
"SUBSEQUENT MARKET"), or if there is no such price on such date, then the
closing bid price on the Nasdaq National Market or on such Subsequent Market
on the date nearest preceding such date, or (b) if the Common Stock is not
then listed or quoted on the Nasdaq National Market or a Subsequent Market,
the closing bid price for a share of Common Stock in the over-the-counter
market, as reported by the National Quotation Bureau Incorporated or
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similar organization or agency succeeding to its functions of reporting
prices) at the close of business on such date, or (c) if the Common Stock is
not then reported by the National Quotation Bureau Incorporated (or similar
organization or agency succeeding to its functions of reporting prices), then
the average of the "Pink Sheet" quotes for the relevant conversion period, as
determined in good faith by the Holder, or (d) if the Common Stock is not
then publicly traded the fair market value of a share of Common Stock as
determined by an appraiser selected in good faith by the Holders of a
majority of the applicable Registrable Securities.
"PERSON" means an individual or a corporation, partnership, trust,
incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or political
subdivision thereof) or other entity of any kind.
"PROCEEDING" means an action, claim, suit, investigation or
proceeding (including, without limitation, an investigation or partial
proceeding, such as a deposition), whether commenced or threatened.
"PROSPECTUS" means the prospectus included a Registration Statement
(including, without limitation, a prospectus that includes any information
previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A promulgated under the
Securities Act), as amended or supplemented by any prospectus supplement,
with respect to the terms of the offering of any portion of the Registrable
Securities covered by such Registration Statement, and all other amendments
and supplements to the Prospectus, including post-effective amendments, and
all material incorporated by reference or deemed to be incorporated by
reference in such Prospectus.
"REGISTRATION DELAY PAYMENTS" shall have the meaning set forth in
Section 2(d).
"REGISTRABLE SECURITIES" means (a) with respect to the Registration
Statement to be filed after the Tranche 1 Closing, (i) the Tranche 1 Shares,
(ii) the shares of Common Stock issuable upon exercise of the First Tranche 1
Warrants and the Second Tranche 1 Warrants and (iii) the First Tranche 1
Adjustment Shares and the Second Tranche 1 Adjustment Shares, (b) with
respect to the Registration Statement to be filed after the Tranche 2
Closing, if applicable, (i) the Tranche 2 Shares and (ii) the First Tranche 2
Adjustment Shares and the Second Tranche 2 Adjustment Shares and (c) with
respect to the Registration Statement to be filed after the Tranche 3
Closing, if applicable, (i) the Tranche 3 Shares, (ii) the shares of Common
Stock issuable upon exercise of the First Tranche 3 Warrants and the Second
Tranche 3 Warrants and (iii) the First Tranche 3 Adjustment Shares and the
Second Tranche 3 Adjustment Shares; PROVIDED, HOWEVER that in order to
account for the fact that the number of Adjustment Shares that are issuable
pursuant to the Purchase Agreement is determined in part upon the Per Share
Market Value of the Common Stock at the time of issuance, Registrable
Securities, shall include (but not be limited to), in the case of each of (1)
(a)(iii) above, such number of Adjustment Shares which may be issued to the
Purchasers pursuant to the Purchase Agreement on the First Tranche 1
Adjustment Date and the Second Tranche 1 Adjustment Date, respectively,
assuming, for the purposes of this definition, that the First Tranche 1
Adjustment Price and the Second Tranche 1 Adjustment Price
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is 50% of the Per Share Market Value on the trading day immediately preceding
the Tranche 1 Closing Date, (2) (b)(ii) above, such number of Adjustment
Shares which may be issued to the Purchasers pursuant to the Purchase
Agreement on the First Tranche 2 Adjustment Date and the Second Tranche 2
Adjustment Date, respectively, assuming, for the purposes of this definition,
that the First Tranche 2 Adjustment Price and the Second Tranche 2 Adjustment
Price is 50% of the Per Share Market Value on the trading day immediately
preceding the Tranche 2 Closing Date and (3) (c)(iii) above, such number of
Adjustment Shares which may be issued to the Purchasers pursuant to the
Purchase Agreement on the First Tranche 3 Adjustment Date and the Second
Tranche 3 Adjustment Date, respectively, assuming, for the purposes of this
definition, that the First Tranche 3 Adjustment Price and the Second Tranche
3 Adjustment Date is 50% of the Per Share Market Value on the trading day
immediately preceding the Tranche 3 Closing Date. The Company shall be
required to file additional Registration Statements to the extent the sum of
the shares of Common Stock issuable as Adjustment Shares in connection with
the Tranche 1 Closing, the Tranche 2 Closing or the Tranche 3 Closing, as
applicable, exceeds the number of shares initially registered in accordance
with the proviso in the immediatel prior sentence. The Company shall have
twenty-five (25) days to file such additional Registration Statements after
notice of the requirement thereof, which the Holders may give at such time
when the number of shares of Common Stock referenced in the preceding
sentence exceeds 85% of the number of shares of Common Stock then registered
in a Registration Statement hereunder. Notwithstanding the foregoing, shares
of Common Stock shall no longer be treated as Registrable Securities when (x)
a registration statement covering such Registrable Securities has been
declared effective and such Registrable Securities have been disposed of
pursuant to such effective registration statement, (y) such Registrable
Securities are sold or otherwise transferred by a person or entity in a
transaction in which the rights under this Agreement are not assigned in
accordance with Section 6(h) or (z) the Holder of such Registrable Securities
is able to dispose of all Registrable Securities held by such Holder in one
three-month period pursuant to Rule 144(k) (or any similar provision then in
force) under the Securities Act without registration under the Securities Act.
"REGISTRATION STATEMENTS" means the registration statements and any
additional registration statements contemplated by Section 2(a), including
(in each case) the Prospectus, amendments and supplements to such
registration statements or Prospectus, including pre- and post-effective
amendments, all exhibits thereto, and all material incorporated by reference
or deemed to be incorporated by reference in such registration statements.
"RULE 144" means Rule 144 promulgated by the Commission pursuant to
the Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.
"RULE 415" means Rule 415 promulgated by the Commission pursuant to
the Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
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"SHARES" means the shares of Common Stock issued to and/or to be
issued to the Purchaser on the Tranche 1 Closing Date, the Tranche 2 Closing
Date and the Tranche 3 Closing Date, pursuant to the Purchase Agreement.
"SPECIAL COUNSEL" means one special counsel to all Holders of
Registrable Securities, for which the Holders will be reimbursed by the
Company pursuant to Section 4.
"UNDERWRITTEN REGISTRATION OR UNDERWRITTEN OFFERING" means a
registration in connection with which securities of the Company are sold to
an underwriter for reoffering to the public pursuant to an effective
registration statement.
"WARRANTS" means the Common Stock purchase warrants issued or
issuable to the Purchaser pursuant to the Purchase Agreement.
"WARRANT SHARES" means the shares of Common Stock issuable upon
exercise in full of the Warrants.
2. SHELF REGISTRATION
(a) On or prior to each applicable Filing Date, the Company shall
prepare and file with the Commission a "Shelf" Registration Statement
covering such Registrable Securities applicable to the Tranche 1 Closing, the
Tranche 2 Closing or the Tranche 3 Closing, as the case may be, for an
offering to be made on a continuous basis pursuant to Rule 415. The
Registration Statement shall be on Form S-3 (except if the Company is not
then eligible to register for resale the Registrable Securities on Form S-3,
in which case such registration shall be on another appropriate form in
accordance herewith). The Company shall use its best efforts to cause the
Registration Statement to be declared effective under the Securities Act as
promptly as possible after the filing thereof, but in any event prior to the
applicable Effectiveness Date, and shall use its best efforts to keep such
Registration Statement continuously effective under the Securities Act until
the date which is three years after the date that such Registration Statement
is declared effective by the Commission or such earlier date when all
Registrable Securities covered by such Registration Statement have been sold
or may be sold without volume restrictions pursuant to Rule 144(k) as
determined by the counsel to the Company pursuant to a written opinion letter
to such effect, addressed and acceptable to the Company's transfer agent
(the "EFFECTIVENESS PERIOD"), PROVIDED, HOWEVER, that the Company shall not
be deemed to have used its best efforts to keep the Registration Statement
effective during the Effectiveness Period if it voluntarily takes any action
that would result in the Holders not being able to sell the Registrable
Securities covered by such Registration Statement during the Effectiveness
Period, unless such action is required under applicable law or the Company
has filed a post-effective amendment to the Registration Statement and the
Commission has not declared it effective. The aggregate number of
Registrable Securities under a Registration Statement shall be allocated
among Holders pro rata based on the total number of Registrable Securities
issued or issuable as of the date such Registration Statement is declared
effective by the Commission. All of the provisions of this
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Section 2(a) relating to a Registration Statement shall apply to any
additional Registration Statement covering any Adjustment Shares as described
in the definition of Registrable Securities.
(b) If the Holders of a majority of the Registrable Securities
then outstanding so elect, an offering of Registrable Securities pursuant to
a Registration Statement may be effected in the form of an Underwritten
Offering. In such event, and, if the managing underwriters advise the Company
and such Holders in writing that in their opinion the amount of Registrable
Securities proposed to be sold in such Underwritten Offering exceeds the
amount of Registrable Securities which can be sold in such Underwritten
Offering, there shall be included in such Underwritten Offering the amount of
such Registrable Securities which in the opinion of such managing
underwriters can be sold, and such amount shall be allocated pro rata among
the Holders proposing to sell Registrable Securities in such Underwritten
Offering.
(c) If any of the Registrable Securities are to be sold in an
Underwritten Offering, the underwriter(s) will be selected by the Holders of
a majority of the Registrable Securities included in such offering and,
except in connection with a block trade, such investment banker shall be
subject to approval by the Company, which approval shall not be unreasonably
withheld or delayed. No Holder may participate in any Underwritten Offering
hereunder unless such Holder (i) agrees to sell its Registrable Securities on
the basis provided in any underwriting agreements approved by the Persons
entitled hereunder to approve such arrangements and (ii) completes and
executes all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents required under the terms of such arrangements.
(d) If (i) a Registration Statement covering Registrable
Securities, to be covered thereby as set forth herein, is not filed on or
before the applicable Filing Date (if the Company files such Registration
Statement without affording the Holder the opportunity to review and comment
on the same as required by Section 3(a) hereof, the Company shall not be
deemed to have satisfied this clause (i)), or (ii) the Company fails to file
with the Commission a request for acceleration in accordance with Rule 12d1-2
promulgated under the Exchange Act within five (5) Business Days of the date
that the Company is notified (orally or in writing, whichever is earlier) by
the Commission that a Registration Statement will not be "reviewed" or is not
subject to further review; or (iii) a Registration Statement covering
Registrable Securities is not declared effective by the Commission on or
before the applicable Effectiveness Date, or (iv) after a Registration
Statement has been declared effective by the Commission, such Registration
Statement is either not effective as to all Registrable Securities to be
covered thereby as set forth herein throughout the applicable Effectiveness
Period for a period of more than ten (10) days or the Holders are not
permitted by reason of the last paragraph of Section 3 to make sales
thereunder for a period of ten (10) days during such period, or (v) an
amendment to the Registration Statement is not filed by the Company with the
Commission within ten (10) days of the Commission's notifying the Company
that such amendment is required in order for a Registration Statement to be
declared effective (any such failure or breach being referred to as an
"EVENT," and for purposes of clauses (i) and (iii) the date on which such
Event occurs, or for purposes of clause (ii) the date on which such five (5)
Business Day period is exceeded, or for purposes of clauses (iv) and (v) the
date on which such ten (10) day period is exceeded, being
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referred to as "EVENT DATE"), then, in any such case, as partial relief for
the damages suffered therefrom by the Holders (which remedy shall not be
exclusive of any other remedies available at law or in equity), the Company
shall, on the Event Date and on each monthly anniversary following the Event
Date until the triggering Event in cured, pay to the Holders an aggregate
amount, in cash, as liquidated damages and not as a penalty equal to 2.0% of
the purchase price paid by the Purchasers pursuant to the Purchase Agreement
on the Tranche 1 Closing Date, Tranche 2 Closing Date or Tranche 3 Closing
Date (the "PURCHASE PRICE"), PROVIDED, HOWEVER that in the event that the
Registration Statement is filed on or before the applicable Filing Date and
the Company has breached any one or more of its requirements pursuant to
clause (ii) through (v) herein, the Company shall pay to the Holders an
aggregate amount equal to 1% of the Purchase Price on the Event Date and 2%
of the Purchase Price on each monthly anniversary following the Event Date
until the triggering Event is cured. The payments to which a Holder shall be
entitled pursuant to this Section are referred to herein as "REGISTRATION
DELAY PAYMENTS." Registration Delay Payments shall be calculated on a
cumulative basis and paid within five (5) Business Days of the Event Date and
each monthly anniversary thereof. If the Company fails to make Registration
Delay Payments in a timely manner, such Registration Delay Payments shall
bear interest at the rate of 9.0% per annum until paid in full.
Notwithstanding anything to the contrary, the Company shall not be required
to make any Registration Delay Payments if an Event described above arises as
a result of (i) any comments by the Commission relating to or directed at any
of the Holders in connection with a Registration Statement or (ii) the fact
that the Commission refuses to accept or review a Registration Statement
because Adjustment Shares are being included in such Registration Statement.
3. REGISTRATION PROCEDURES
In connection with the Company's registration obligations
hereunder, the Company shall:
(a) Prepare and file with the Commission on or prior to the
applicable Filing Date, a Registration Statement on Form S-3 (or if the
Company is not then eligible to register for resale the Registrable
Securities on Form S-3 such registration shall be on another appropriate form
in accordance herewith, or, in connection with an Underwritten Offering
hereunder, such other form agreed to by the Company and the Holders) which
shall contain the "Plan of Distribution" attached hereto as ANNEX A (except
if otherwise directed by the Holders), and cause the Registration Statement
to become effective and remain effective as provided herein; PROVIDED,
HOWEVER, that not less than five (5) Business Days prior to the filing of a
Registration Statement or any related Prospectus or any amendment or
supplement thereto, the Company shall, (i) furnish to the Holders, their
Special Counsel and any managing underwriters, copies of all such documents
proposed to be filed, which documents will be subject to the review of such
Holders, their Special Counsel and such managing underwriters, and (ii) cause
its officers and directors, counsel and independent certified public
accountants to respond to such inquiries as shall be necessary, in the
reasonable opinion of respective counsel to such Holders and such
underwriters, to conduct a reasonable investigation within the meaning of the
Securities Act. The Company shall not file the Registration Statement or any
such Prospectus or any amendments or
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supplements thereto to which the Holders of a majority of the Registrable
Securities, their Special Counsel, or any managing underwriters, shall
reasonably object on a timely basis.
(b) (i) Prepare and file with the Commission such amendments,
including post-effective amendments, to the Registration Statement as may be
necessary to keep the Registration Statement continuously effective as to the
applicable Registrable Securities for the Effectiveness Period; (ii) cause
the related Prospectus to be amended or supplemented by any required
Prospectus supplement, and as so supplemented or amended to be filed pursuant
to Rule 424 (or any similar provisions then in force) promulgated under the
Securities Act; (iii) respond as promptly as reasonably possible to any
comments received from the Commission with respect to the Registration
Statement or any amendment thereto and as promptly as reasonably possible
provide the Holders true and complete copies of all correspondence from and
to the Commission relating to the Registration Statement; and (iv) comply in
all material respects with the provisions of the Securities Act and the
Exchange Act with respect to the disposition of all Registrable Securities
covered by the Registration Statement during the applicable period in
accordance with the intended methods of disposition by the Holders thereof
set forth in the Registration Statement as so amended or in such Prospectus
as so supplemented.
(c) Notify the Holders of Registrable Securities to be sold, their
Special Counsel and any managing underwriters as promptly as reasonably
possible (and, in the case of (i)(A) below, not less than five (5) days prior
to such filing) and (if requested by any such Person) confirm such notice in
writing no later than one (1) Business Day following the day (i)(A) when a
Prospectus or any Prospectus supplement or post-effective amendment to the
Registration Statement is proposed to be filed; (B) when the Commission
notifies the Company whether there will be a "review" of such Registration
Statement and whenever the Commission comments in writing on such
Registration Statement (the Company shall provide true and complete copies
thereof and all written responses thereto to each of the Holders); and (C)
with respect to the 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 the Registration Statement or Prospectus or for additional
information; (iii) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement covering any or
all of the Registrable Securities or the initiation of any Proceedings for
that purpose; (iv) of the receipt by the Company of any notification with
respect to the suspension of the qualification or exemption from
qualification of any of the Registrable Securities for sale in any
jurisdiction, or the initiation or threatening of any Proceeding for such
purpose; and (v) of the occurrence of any event that makes any statement made
in the Registration Statement or Prospectus or any document incorporated or
deemed to be incorporated therein by reference untrue in any material respect
or that requires any revisions to the Registration Statement, Prospectus or
other documents so that, in the case of the Registration Statement or the
Prospectus, as the case may be, 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, not misleading.
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(d) Use its best efforts to avoid the issuance of, or, if issued,
obtain the withdrawal of (i) any order suspending the effectiveness of the
Registration Statement, or (ii) any suspension of the qualification (or
exemption from qualification) of any of the Registrable Securities for sale
in any jurisdiction, at the earliest practicable moment.
(e) If requested by any managing underwriter or the Holders of a
majority in interest of the Registrable Securities to be sold in connection
with an Underwritten Offering, (i) promptly incorporate in a Prospectus
supplement or post-effective amendment to the Registration Statement such
information as such managing underwriters and such Holders reasonably request
should be included therein, and (ii) make all required filings of such
Prospectus supplement or such post-effective amendment as soon as practicable
after the Company has received notification of the matters to be incorporated
in such Prospectus supplement or post-effective amendment; PROVIDED, HOWEVER,
that the Company shall not be required to take any action pursuant to this
Section 3(e) that would, in the opinion of counsel for the Company, violate
applicable law or be materially detrimental to the business prospects of the
Company.
(f) Furnish to each Holder, their Special Counsel and any managing
underwriters, without charge, at least one conformed copy of each
Registration Statement and each amendment thereto, including financial
statements and schedules, all documents incorporated or deemed to be
incorporated therein by reference, and all exhibits to the extent requested
by such Person (including those previously furnished or incorporated by
reference) promptly after the filing of such documents with the Commission.
(g) Promptly deliver to each Holder, their Special Counsel, and
any underwriters, without charge, as many copies of the Prospectus or
Prospectuses (including each form of prospectus) and each amendment or
supplement thereto as such Persons may reasonably request; and the Company
hereby consents to the use of such Prospectus and each amendment or
supplement thereto by each of the selling Holders and any underwriters in
connection with the offering and sale of the Registrable Securities covered
by such Prospectus and any amendment or supplement thereto.
(h) Prior to any public offering of Registrable Securities, use
its best efforts to register or qualify or cooperate with the selling
Holders, any underwriters and their Special Counsel in connection with the
registration or qualification (or exemption from such registration or
qualification) of such Registrable Securities for offer and sale under the
securities or Blue Sky laws of such jurisdictions within the United States as
any Holder or underwriter requests in writing, to keep each such registration
or qualification (or exemption therefrom) effective during the applicable
Effectiveness Period and to do any and all other acts or things necessary or
advisable to enable the disposition in such jurisdictions of the Registrable
Securities covered by a Registration Statement; PROVIDED, HOWEVER, that the
Company shall not be required to qualify generally to do business in any
jurisdiction where it is not then so qualified or to take any action that
would subject it to general service of process in any such jurisdiction where
it is not then so subject or subject the Company to any material tax in any
such jurisdiction where it is not then so subject.
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(i) Cooperate with the Holders and any managing underwriters to
facilitate the timely preparation and delivery of certificates representing
Registrable Securities to be delivered to a transferee pursuant to a
Registration Statement, which certificates shall be free, to the extent
permitted by applicable law, of all restrictive legends, and to enable such
Registrable Securities to be in such denominations and registered in such
names as any such managing underwriters or Holders may request at least two
Business Days prior to any sale of Registrable Securities.
(j) Upon the occurrence of any event contemplated by Section
3(c)(v), as promptly as reasonably possible, prepare a supplement or
amendment, including a post-effective amendment, to the Registration
Statement or a supplement to the related Prospectus or any document
incorporated or deemed to be incorporated therein by reference, and file any
other required document so that, as thereafter delivered, neither the
Registration Statement nor such Prospectus will 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 under which they were made, not misleading.
(k) Use its best efforts to cause all Registrable Securities
relating to such Registration Statement to be listed on the Nasdaq National
Market or any Subsequent Market, as and when required pursuant to the
Purchase Agreement.
(l) In the case of an Underwritten Offering, enter into such
agreements (including an underwriting agreement in form, scope and substance
as is customary in Underwritten Offerings) and take all such other actions in
connection therewith (including those reasonably requested by any managing
underwriters and the Holders of a majority of the Registrable Securities
being sold) in order to expedite or facilitate the disposition of such
Registrable Securities, and whether or not an underwriting agreement is
entered into, (i) make such representations and warranties to such Holders
and such underwriters as are customarily made by issuers to underwriters in
underwritten public offerings, and confirm the same if and when requested;
(ii) obtain and deliver copies thereof to each Holder and the managing
underwriters, if any, of opinions of counsel to the Company and updates
thereof addressed to each Holder and each such underwriter, in form, scope
and substance reasonably satisfactory to any such managing underwriters and
Special Counsel to the selling Holders covering the matters customarily
covered in opinions requested in Underwritten Offerings and such other
matters as may be reasonably requested by such Special Counsel and
underwriters; (iii) immediately prior to the effectiveness of the
Registration Statement, and, in the case of an Underwritten Offering, at the
time of delivery of any Registrable Securities sold pursuant thereto, use its
reasonable best efforts to obtain and deliver copies to the Holders and the
managing underwriters, if any, of "cold comfort" letters and updates thereof
from the independent certified public accountants of the Company (and, if
necessary, any other independent certified public accountants of any
subsidiary of the Company or of any business acquired by the Company for
which financial statements and financial data is, or is required to be,
included in the Registration Statement), addressed to the Company in form and
substance as are customary in connection with Underwritten Offerings; (iv) if
an underwriting agreement is entered into, the same shall contain
indemnification provisions and procedures no less favorable to the selling
Holders and the underwriters, if any, than those set
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forth in Section 5 (or such other provisions and procedures acceptable to the
managing underwriters, if any, and holders of a majority of Registrable
Securities participating in such Underwritten Offering); and (v) deliver such
documents and certificates as may be reasonably requested by the Holders of a
majority of the Registrable Securities being sold, their Special Counsel and
any managing underwriters to evidence the continued validity of the
representations and warranties made pursuant to clause 3(l)(i) above and to
evidence compliance with any customary conditions contained in the
underwriting agreement or other agreement entered into by the Company.
(m) In connection with any Underwritten Offering, make available
for inspection by the selling Holders, any representative of such Holders,
any underwriter participating in any disposition of Registrable Securities,
and any attorney or accountant retained by such selling Holders or
underwriters, at the offices where normally kept, during reasonable business
hours, all financial and other records, pertinent corporate documents and
properties of the Company and its subsidiaries, and cause the officers,
directors, agents and employees of the Company and its subsidiaries to supply
all information in each case reasonably requested by any such Holder,
representative, underwriter, attorney or accountant in connection with the
Registration Statement; PROVIDED, HOWEVER, that any information that is
determined in good faith by the Company in writing to be of a confidential
non-public nature at the time of delivery of such information shall be kept
confidential by such Persons, unless (i) disclosure of such information is
required by court or administrative order or is necessary to respond to
inquiries of regulatory authorities; (ii) disclosure of such information, in
the opinion of counsel to such Person, is required by law; (iii) such
information becomes generally available to the public other than as a result
of a disclosure or failure to safeguard by such Person; or (iv) such
information becomes available to such Person from a source other than the
Company and such source is not known by such Person to be bound by a
confidentiality agreement with the Company.
(n) Comply with all applicable rules and regulations of the
Commission.
(o) The Company may require each selling Holder to furnish to the
Company such information regarding the distribution of such Registrable
Securities and the beneficial ownership of Common Stock held by such Holder
and any other matter as is required by law to be disclosed in the
Registration Statement, and the Company may exclude from such registration
the Registrable Securities of any such Holder who unreasonably fails to
furnish such information within a time after receiving such request.
If the Registration Statement refers to any Holder by name or
otherwise as the holder of any securities of the Company, then such Holder
shall have the right to require (if such reference to such Holder by name or
otherwise is not required by the Securities Act or any similar Federal
statute then in force) the deletion of the reference to such Holder in any
amendment or supplement to the Registration Statement filed or prepared
subsequent to the time that such reference ceases to be required.
11
Each Holder covenants and agrees that (i) it will not sell any
Registrable Securities under the Registration Statement until it has received
copies of the final Prospectus as then amended or supplemented as
contemplated in Section 3(g) and notice from the Company that such
Registration Statement and any post-effective amendments thereto have become
effective as contemplated by Section 3(c) and (ii) it and its officers,
directors or Affiliates, if any, will comply with the prospectus delivery
requirements and all other provisions of the Securities Act as applicable to
any of them in connection with sales of Registrable Securities pursuant to
the Registration Statement.
Each Holder agrees by its acquisition of such Registrable
Securities that, upon receipt of a notice from the Company of the occurrence
of any event of the kind described in Section 3(c)(ii), 3(c)(iii), 3(c)(iv)
or 3(c)(v), such Holder will forthwith discontinue disposition of such
Registrable Securities under the Registration Statement until such Holder's
receipt of the copies of the supplemented Prospectus and/or amended
Registration Statement contemplated by Section 3(j), or until it is advised
in writing (the "ADVICE") by the Company that the use of the applicable
Prospectus may be resumed, and, in either case, has received copies of any
additional or supplemental filings that are incorporated or deemed to be
incorporated by reference in such Prospectus or Registration Statement.
4. REGISTRATION EXPENSES
(a) All fees and expenses incident to the performance of or
compliance with this Agreement by the Company, except as and to the extent
specified in Section 4(b), shall be borne by the Company whether or not
pursuant to an Underwritten Offering and whether or not the Registration
Statement is filed or becomes effective and whether or not any Registrable
Securities are sold pursuant to the Registration Statement. The fees and
expenses referred to in the foregoing sentence shall include, without
limitation, (i) all registration and filing fees (including, without
limitation, fees and expenses (A) with respect to filings required to be made
with the Nasdaq National Market and any Subsequent Market on which the Common
Stock is then listed for trading, and (B) reasonably incurred in compliance
with state securities or Blue Sky laws (including, without limitation,
reasonable fees and disbursements of Special Counsel for the Holders in
connection with Blue Sky qualifications or exemptions of the Registrable
Securities and determination of the eligibility of the Registrable Securities
for investment under the laws of such jurisdictions as the managing
underwriters, if any, or the Holders of a majority of Registrable Securities
may designate)), (ii) printing expenses (including, without limitation,
expenses of printing certificates for Registrable Securities and of printing
prospectuses if the printing of prospectuses is reasonably requested by the
managing underwriters, if any, or by the holders of a majority of the
Registrable Securities included in the Registration Statement), (iii)
messenger, telephone and delivery expenses of the Company, (iv) fees and
disbursements of counsel for the Company and reasonable fees and expense
disbursements of Special Counsel for the Holders, (v) Securities Act
liability insurance, if the Company so desires such insurance, and (vi) fees
and expenses of all other Persons retained by the Company in connection with
the consummation of the transactions contemplated by this Agreement. In
addition, the Company shall be responsible for all of its internal expenses
incurred in connection with the consummation of the transactions
12
contemplated by this Agreement (including, without limitation, all salaries
and expenses of its officers and employees performing legal or accounting
duties), the expense of any annual audit, the fees and expenses incurred in
connection with the listing of the Registrable Securities on any securities
exchange as required hereunder.
(b) If the Holders require an Underwritten Offering pursuant to
the terms hereof, the Company shall be responsible for all costs, fees and
expenses in connection therewith, except for the fees and disbursements of
the Underwriters (including any underwriting commissions and discounts) and
their legal counsel and accountants which will be paid by the Holders. The
Holder shall pay all transfer taxes relating to the Registrable Securities.
By way of illustration which is not intended to diminish from the provisions
of Section 4(a), the Holders shall not be responsible for, and the Company
shall be required to pay the fees or disbursements incurred by the Company
(including by its legal counsel and accountants) in connection with, the
preparation and filing of a Registration Statement and related Prospectus for
such offering, the maintenance of such Registration Statement in accordance
with the terms hereof, the listing of the Registrable Securities in
accordance with the requirements hereof, and printing expenses incurred to
comply with the requirements hereof. Notwithstanding the foregoing, except in
connection with a block trade by a broker who as a result of the trade may be
deemed an underwriter, if at any time the Company has (i) timely filed the
Registration Statement on or prior to the applicable Filing Date, (ii) caused
the Registration Statement to be declared effective as promptly as possible
after the filing thereof but in any event prior to the applicable
Effectiveness Date and (iii) kept the Registration Statement continuously
effective under the Securities Act, all in accordance with the terms of this
Agreement, and if at any such time the Holders require an Underwritten
Offering pursuant to the terms hereof, then Holders shall be responsible for
all costs, fees and expenses in connection with such Underwritten Offering.
5. INDEMNIFICATION
(a) INDEMNIFICATION BY THE COMPANY. The Company shall,
notwithstanding any termination of this Agreement, indemnify and hold
harmless each Holder, the officers, directors, agents (including any
underwriters retained by such Holder in connection with the offer and sale of
Registrable Securities), brokers (including brokers who offer and sell
Registrable Securities as principal as a result of a pledge or any failure to
perform under a margin call of Common Stock), investment advisors and
employees of each of them, each Person who controls any such Holder (within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act) and the officers, directors, agents and employees of each such
controlling Person, to the fullest extent permitted by applicable law, from
and against any and all losses, claims, damages, liabilities, costs
(including, without limitation, costs of preparation and reasonable
attorneys' fees) and expenses (collectively, "LOSSES"), as incurred, arising
out of or relating to any untrue or alleged untrue statement of a material
fact contained in the Registration Statement, any Prospectus or any form of
prospectus or in any amendment or supplement thereto or, to the extent such
untrue or alleged untrue statements or omissions or alleged omissions is not
corrected in a subsequent prospectus, in any preliminary prospectus, or
arising out of or relating to any omission or alleged omission of a material
fact required to be stated therein or necessary to make the statements
therein (in the
13
case of any Prospectus or form of prospectus or supplement thereto, in light
of the circumstances under which they were made) not misleading, except to
the extent, but only to the extent, that such untrue statements or alleged
untrue statements or omissions or alleged omissions are based upon
information furnished in writing to the Company by such Holder or such other
indemnified party expressly for use therein, which information was reasonably
relied on by the Company for use therein, or to the extent that such
information relates to such Holder or such Holder's proposed method of
distribution of Registrable Securities and was reviewed and expressly
approved in writing by or was furnished by such Holder expressly for use in
the Registration Statement, such Prospectus or such form of Prospectus or in
any amendment or supplement thereto. The Company shall notify the Holders
promptly of the institution, threat or assertion of any Proceeding of which
the Company is aware in connection with the transactions contemplated by this
Agreement.
(b) INDEMNIFICATION BY HOLDERS. Each Holder shall, severally and
not jointly, indemnify and hold harmless the Company, its directors,
officers, agents and employees, each Person who controls the Company (within
the meaning of Section 15 of the Securities Act and Section 20 of the
Exchange Act), and the directors, officers, agents or employees of such
controlling Persons, to the fullest extent permitted by applicable law, from
and against all Losses (as determined by a court of competent jurisdiction in
a final judgment not subject to appeal or review) arising out of or based
upon any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement, any Prospectus, or any form of
prospectus, or in any amendment or supplement thereto, or arising out of or
based upon any omission or alleged omission of a material fact required to be
stated therein or necessary to make the statements therein not misleading to
the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission is contained in any
information so furnished in writing by such Holder to the Company
specifically for inclusion in the Registration Statement or such Prospectus
and that such information was reasonably relied on by the Company for use in
the Registration Statement, such Prospectus or such form of prospectus or to
the extent that such information relates to such Holder or such Holder's
proposed method of distribution of Registrable Securities and was reviewed
and expressly approved in writing by or was furnished by such Holder
expressly for use in the Registration Statement, such Prospectus or such form
of Prospectus, or in any amendment or supplement thereto. In no event shall
the liability of any selling Holder hereunder be greater in amount than the
dollar amount of the net proceeds received by such Holder upon the sale of
the Registrable Securities giving rise to such indemnification obligation.
(c) CONDUCT OF INDEMNIFICATION PROCEEDINGS. If any Proceeding
shall be brought or asserted against any Person entitled to indemnity
hereunder (an "INDEMNIFIED PARTY"), such Indemnified Party shall promptly
notify the Person from whom indemnity is sought (the "INDEMNIFYING PARTY") in
writing, and the Indemnifying Party shall assume the defense thereof,
including the employment of counsel reasonably satisfactory to the
Indemnified Party and the payment of all fees and expenses incurred in
connection with defense thereof; provided, that the failure of any
Indemnified Party to give such notice shall not relieve the Indemnifying
Party of its obligations or liabilities pursuant to this Agreement, except
(and only) to the extent that it shall be
14
finally determined by a court of competent jurisdiction (which determination
is not subject to appeal or further review) that such failure shall have
proximately and materially adversely prejudiced the Indemnifying Party.
An Indemnified Party shall have the right to employ separate
counsel in any such Proceeding and to participate in the defense thereof, but
the fees and expenses of such counsel shall be at the expense of such
Indemnified Party or Parties unless: (1) the Indemnifying Party has agreed
in writing to pay such fees and expenses; or (2) the Indemnifying Party shall
have failed promptly to assume the defense of such Proceeding and to employ
counsel reasonably satisfactory to such Indemnified Party in any such
Proceeding; or (3) the named parties to any such Proceeding (including any
impleaded parties) include both such Indemnified Party and the Indemnifying
Party, and such Indemnified Party shall have been advised by counsel (which
shall be reasonably acceptable to the indemnifying party) that a conflict of
interest is likely to exist if the same counsel were to represent such
Indemnified Party and the Indemnifying Party (in which case, if such
Indemnified Party notifies the Indemnifying Party in writing that it elects
to employ separate counsel at the expense of the Indemnifying Party, the
Indemnifying Party shall not have the right to assume the defense thereof and
such counsel shall be at the expense of the Indemnifying Party). The
Indemnifying Party shall not be liable for any settlement of any such
Proceeding effected without its written consent, which consent shall not be
unreasonably withheld. No Indemnifying Party shall, without the prior
written consent of the Indemnified Party, effect any settlement of any
pending Proceeding in respect of which any Indemnified Party is a party,
unless such settlement includes an unconditional release of such Indemnified
Party from all liability on claims that are the subject matter of such
Proceeding.
All fees and expenses of the Indemnified Party (including
reasonable fees and expenses to the extent incurred in connection with
investigating or preparing to defend such Proceeding in a manner not
inconsistent with this Section) shall be paid to the Indemnified Party, as
incurred, within ten (10) Business Days of written notice thereof to the
Indemnifying Party (regardless of whether it is ultimately determined that an
Indemnified Party is not entitled to indemnification hereunder; PROVIDED,
that the Indemnifying Party may require such Indemnified Party to undertake
to reimburse all such fees and expenses to the extent it is finally
judicially determined that such Indemnified Party is not entitled to
indemnification hereunder).
(d) CONTRIBUTION. If a claim for indemnification under Section
5(a) or 5(b) is unavailable to an Indemnified Party (by reason of public
policy or otherwise), then each 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, in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party and
Indemnified Party in connection with the actions, statements or omissions
that resulted in such Losses 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 a
material fact or omission or alleged omission of a material fact, has been
taken or made by, or relates to information supplied by, such Indemnifying
Party or Indemnified Party, and the parties' relative intent, knowledge,
15
access to information and opportunity to correct or prevent such action,
statement or omission. The amount paid or payable by a party as a result of
any Losses shall be deemed to include, subject to the limitations set forth
in Section 5(c), any reasonable attorneys' or other reasonable fees or
expenses incurred by such party in connection with any Proceeding to the
extent such party would have been indemnified for such fees or expenses if
the indemnification provided for in this Section was available to such party
in accordance with its terms.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 5(d) were determined by PRO RATA
allocation or by any other method of allocation that does not take into
account the equitable considerations referred to in the immediately preceding
paragraph. Notwithstanding the provisions of this Section 5(d), no Holder
shall be required to contribute, in the aggregate, any amount in excess of
the amount by which the proceeds actually received by such Holder from the
sale of the Registrable Securities subject to the Proceeding exceeds the
amount of any damages that such Holder has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. 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.
The indemnity and contribution agreements contained in this Section
are in addition to any liability that the Indemnifying Parties may have to
the Indemnified Parties.
6. MISCELLANEOUS
(a) REMEDIES. In the event of a breach by the Company or by a
Holder, of any of their obligations under this Agreement, each Holder or the
Company, as the case may be, in addition to being entitled to exercise all
rights granted by law and under this Agreement, including recovery of
damages, will be entitled to specific performance of its rights under this
Agreement. The Company and each Holder agree that monetary damages would not
provide adequate compensation for any losses incurred by reason of a breach
by it of any of the provisions of this Agreement and hereby further agrees
that, in the event of any action for specific performance in respect of such
breach, it shall waive the defense that a remedy at law would be adequate.
(b) NO INCONSISTENT AGREEMENTS. Neither the Company nor any of
its subsidiaries has entered, as of the date hereof, nor shall the Company or
any of its subsidiaries, on or after the date of this Agreement, enter into
any agreement with respect to its securities that is inconsistent with the
rights granted to the Holders in this Agreement or otherwise conflicts with
the provisions hereof. Except as and to the extent specified in SCHEDULE
6(b) hereto, neither the Company nor any of its subsidiaries has previously
entered into any agreement granting any registration rights with respect to
any of its securities to any Person. Without limiting the generality of the
foregoing, without the written consent of the Holders of a majority of the
then outstanding Registrable Securities, the Company shall not, except as set
forth in Section 3.11(b) of the Purchase Agreement, grant to any Person the
right to request the Company to register any securities of the Company under
the Securities Act unless the rights so granted are subject in all
16
respects to the prior rights in full of the Holders set forth herein, and are
not otherwise in conflict or inconsistent with the provisions of this
Agreement.
(c) NO PIGGYBACK ON REGISTRATIONS. Except as and to the extent
specified in SCHEDULE 6(b) hereto, neither the Company nor any of its
security holders (other than the Holders in such capacity pursuant hereto)
may include securities of the Company in the Registration Statement other
than the Registrable Securities, and, except as set forth in Section 3.11(b)
of the Purchase Agreement, the Company shall not after the date hereof enter
into any agreement providing any such right to any of its security holders.
(d) PIGGY-BACK REGISTRATIONS. (i) If at any time when there is
not an effective Registration Statement covering all of the Registrable
Securities then outstanding, the Company shall determine to prepare and file
with the Commission a registration statement relating to an offering for its
own account or the account of others under the Securities Act of any of its
equity securities, other than on Form S-4 or Form S-8 (each as promulgated
under the Securities Act) or their then equivalents relating to equity
securities to be issued solely in connection with any acquisition of any
entity or business or equity securities issuable in connection with stock
option or other employee benefit plans, then the Company shall send to each
Holder of Registrable Securities written notice of such determination and, if
within fifteen (15) days after receipt of such notice, any such holder shall
so request in writing, the Company shall, subject to the provisions of this
Section 6(d), include in such registration statement all or any part of such
Registrable Securities such holder requests to be registered.
Notwithstanding the foregoing, the Company may abandon or delay any such
registration at any time.
(ii) It shall be a condition precedent to the obligations of
the Company to take any action pursuant to this Section 6(d) with respect to
the Registrable Securities of any selling Holder, that such Holder shall
furnish to the Company such information regarding it, the Registrable
Securities held by it, and the intended method of disposition of such
securities as shall be required to effect the registration of such Holder's
Registrable Securities and to execute such documents (including, without
limitation, any underwriting agreement) in connection with such registration
as the Company may reasonably request.
(e) AMENDMENTS AND WAIVERS. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions
hereof may not be given, unless the same shall be in writing and signed by
the Company and the Holders of at least two-thirds of the then outstanding
Registrable Securities; PROVIDED, HOWEVER, that, for the purposes of this
sentence, Registrable Securities that are owned, directly or indirectly, by
the Company, or an Affiliate of the Company are not deemed outstanding.
Notwithstanding the foregoing, a waiver or consent to depart from the
provisions hereof with respect to a matter that relates exclusively to the
rights of Holders and that does not directly or indirectly affect the rights
of other Holders may be given by Holders of at least a majority of the
Registrable Securities to which such waiver or consent relates; PROVIDED,
HOWEVER, that the provisions of this sentence may not be amended, modified,
or supplemented except in accordance with the provisions of the immediately
preceding sentence.
17
(f) NOTICES. Any notices, consents, waivers or other
communications required or permitted to be given under the terms of this
Agreement must be in writing and will be deemed to have been delivered (i)
upon receipt, when delivered personally; (ii) the date of transmission, if
such notice or communication is delivered via facsimile at the facsimile
telephone number specified in this Section prior to 6:00 p.m. (New York City
time) on a Business Day, (iii) the Business Day after the date of
transmission, if such notice or communication is delivered via facsimile at
the facsimile telephone number specified in this Section later than 6:00 p.m.
(New York City time) on any date and earlier than 11:59 p.m. (New York City
time) on such date; or (iv) upon receipt, when delivered by a reputable
overnight delivery service, in each case properly addressed to the party to
receive the same. The addresses and facsimile numbers for such
communications shall be:
If to the Company: ThrustMaster, Inc.
7175 N.W. Evergreen Parkway #400
Hillsboro, Oregon 97124-5839
Facsimile: (503) 615-3297
Attention: Frank G. Hausmann, Jr., CEO
With copies to: Perkins Coie LLP
1211 SW Fifth Avenue, Suite 1500
Portland, OR 97204
Facsimile: (503) 727-2222
Attention: Patrick Simpson
If to Strong River: Strong River Investments Inc.
c/o Cavallo Capital Corp.
630 Fifth Avenue, Suite 2000
New York, New York 10111
Facsimile: (212) 332-3256
Attention: Avi Vigder
If to Montrose: Montrose Investments, Ltd.
300 Crescent Court, Suite 700
Dallas, TX 75201
Facsimile: (214) 758-1221
Attention: Will Rose
If to Westover: Westover Investments L.P.
300 Crescent Court, Suite 700
Dallas, TX 75201
Facsimile: (214) 758-1221
Attention: Will Rose
18
With copies to (for all
communications to each
of the Purchasers): Robinson Silverman Pearce Aronsohn &
Berman LLP
1290 Avenue of the Americas
New York, NY 10104
Facsimile: (212) 541-4630
Attention: Kenneth L. Henderson
Each party shall provide five days' prior written notice to the
other party of any change in address or facsimile number.
If to any other Person who is then the registered Holder:
To the address of such Holder as it appears in the stock
transfer books of the Company or such other address as may be
designated in writing hereafter, in the same manner, by such
Person.
(g) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of and be binding upon the successors and permitted assigns of each
of the parties and shall inure to the benefit of each Holder. The Company
may not assign its rights or obligations hereunder without the prior written
consent of Holders of a majority of Registrable Securities then outstanding.
Each Holder may assign their respective rights hereunder in the manner and to
the Persons as permitted under this Agreement and the Purchase Agreement.
(h) ASSIGNMENT OF REGISTRATION RIGHTS. The rights of each Holder
hereunder, including the right to have the Company register for resale
Registrable Securities in accordance with the terms of this Agreement, shall
be automatically assignable by each Holder to any Affiliate of such Holder,
any other Holder or Affiliate of any other Holder if: (i) the Holder agrees
in writing with the transferee or assignee to assign such rights, and a copy
of such agreement is furnished to the Company within a reasonable time after
such assignment, (ii) the Company is, within a reasonable time after such
transfer or assignment, furnished with written notice of (a) the name and
address of such transferee or assignee, and (b) the securities with respect
to which such registration rights are being transferred or assigned, (iii)
following such transfer or assignment the further disposition of such
securities by the transferee or assignees is restricted under the Securities
Act and applicable state securities laws, (iv) at or before the time the
Company receives the written notice contemplated by clause (ii) of this
Section, the transferee or assignee agrees in writing with the Company to be
bound by all of the provisions of this Agreement, (v) such transfer shall
have been made in accordance with the applicable requirements of the Purchase
Agreement and (vi) at least 10,000 shares of Registrable Securities
(appropriately adjusted for any stock dividend, split or combination of the
Common Stock) are being transferred to such transferee or assignee in
connection with such assignment of rights. The rights to assignment shall
apply to the Holders (and to subsequent) successors and assigns.
19
(i) COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an
original and, all of which taken together shall constitute one and the same
Agreement. In the event that any signature is delivered by facsimile
transmission, such signature shall create a valid binding obligation of the
party executing (or on whose behalf such signature is executed) the same with
the same force and effect as if such facsimile signature were the original
thereof.
(j) GOVERNING LAW. This Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the State of
New York without regard to the principles of conflicts of law thereof. Each
party hereby irrevocably submits to the non-exclusive jurisdiction of the
state and federal courts sitting in the City of New York, borough of
Manhattan, for the adjudication of any dispute hereunder or in connection
herewith or with any transaction contemplated hereby or discussed herein
(including with respect to the enforcement of the any of the Transaction
Documents), and hereby irrevocably waives, and agrees not to assert in any
suit, action or proceeding, any claim that it is not personally subject to
the jurisdiction of any such court, that such suit, action or proceeding is
improper. Each party hereby irrevocably waives personal service of process
and consents to process being served in any such suit, action or proceeding
by mailing a copy thereof to such party at the address in effect for notices
to it under this Agreement and agrees that such service shall constitute good
and sufficient service of process and notice thereof. Nothing contained
herein shall be deemed to limit in any way any right to serve process in any
manner permitted by law.
(k) CUMULATIVE REMEDIES. The remedies provided herein are
cumulative and not exclusive of any remedies provided by law.
(l) SEVERABILITY. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the
parties hereto shall use their reasonable efforts to find and employ an
alternative means to achieve the same or substantially the same result as
that contemplated by such term, provision, covenant or restriction. It is
hereby stipulated and declared to be the intention of the parties that they
would have executed the remaining terms, provisions, covenants and
restrictions without including any of such that may be hereafter declared
invalid, illegal, void or unenforceable.
(m) HEADINGS. The headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning hereof.
(n) SHARES HELD BY THE COMPANY AND ITS AFFILIATES. Whenever the
consent or approval of Holders of a specified percentage of Registrable
Securities is required hereunder, Registrable Securities held by the Company
or its Affiliates (other than any Holder or transferees or successors or
assigns thereof if such Holder is deemed to be an Affiliate solely by reason
of its holdings of such Registrable Securities) shall not be counted in
determining whether such consent or approval was given by the Holders of such
required percentage.
20
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21
IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first written above.
COMPANY:
THRUSTMASTER, INC.
By:
----------------------------------
Name:
Title:
PURCHASERS:
STRONG RIVER INVESTMENTS, INC.
By:
----------------------------------
Name:
Title:
WESTOVER INVESTMENTS L.P.
By:
----------------------------------
Name:
Title:
MONTROSE INVESTMENTS L.P.
By:
----------------------------------
Name:
Title:
22
ANNEX A
PLAN OF DISTRIBUTION
The Selling Stockholders and any of their pledgees, assignees and
successors-in-interest may, from time to time sell any or all of their shares
of Common Stock on any stock exchange on which the shares are traded or in
private transactions. These sales may be at fixed or negotiated prices. The
Selling Stockholders may use any one or more of the following methods when
selling shares:
- - ordinary brokerage transactions and transactions in which the broker-dealer
solicits purchasers;
- - block trades in which the broker-dealer will attempt to sell the shares as
agent but may position and resell a portion of the block as principal to
facilitate the transaction;
- - purchases by a broker-dealer as principal and resale by the broker-dealer
for its account;
- - an exchange distribution in accordance with the rules of the applicable
exchange;
- - privately negotiated transactions;
- - short sales;
- - Broker-dealers may agree with the Selling Stockholders to sell a specified
number of such shares at a stipulated price per share;
- - a combination of any such methods of sale; and
- - any other method permitted pursuant to applicable law.
The Selling Stockholders may also sell shares under SEC Rule 144, if
available, rather than under this prospectus.
The Selling Stockholders may sell shares short, short sales against the
box, puts and calls and other transactions in securities of the Company or
derivatives of Company securities, and may sell or deliver shares in
connection with these trades. The Selling Stockholders may pledge their
shares to their brokers under the margin provisions of customer agreements.
If a Selling Stockholder defaults on a margin loan, the broker may, from time
to time, offer and sell the pledged shares.
Broker-dealers engaged by the Selling Stockholders may arrange for other
brokers-dealers to participate in sales. Broker-dealers may receive
commissions or discounts from the Selling Stockholders (or, if any
broker-dealer acts as agent for the Purchaser of shares, from the Purchaser)
in amounts to be negotiated. The Selling Stockholders do not expect these
commissions and discounts to exceed what is customary in the types of
transactions involved.
The Selling Stockholders and any broker-dealers or agents that are
involved in selling the shares may be deemed to be "underwriters" within the
meaning of the Securities Act in connection with such sales. In such event,
any commissions received by such broker-dealers or agents and any profit on
the resale of the shares purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act.
The Company is required to pay all fees and expenses incident to the
registration of the shares, including reasonable fees and disbursements of
counsel to the Selling Stockholders. The Company has agreed to indemnify the
Selling Stockholders against certain losses, claims, damages and liabilities,
including liabilities under the Securities Act.