>>TMSR SEC FORM 8K [Filed 02/16/99] ISSUES OF FACTS, Pt V
...
(f) The Company shall, on the twenty-fifth (25th) day following
the First Tranche 3 Adjustment Date (the "SECOND TRANCHE 3 ADJUSTMENT DATE"),
issue to the Purchasers for no additional consideration such aggregate number
of shares of Common Stock (the "SECOND TRANCHE 3 ADJUSTMENT SHARES") as
equals the quotient obtained by dividing (i) the product of (A) 50% of the
Tranche 3 Shares and (B) an amount equal to (x) the difference of
(1) 112 1/2% of the Per Share Market Value of the Common Stock on the
Tranche 3 Closing Date less (2) the average of the lowest ten (10) Per Share
Market Values during the twenty-five (25) days immediately preceding the
Second Tranche 3 Adjustment Date (the "SECOND TRANCHE 3 ADJUSTMENT PRICE")
and (ii) the Second Tranche 3 Adjustment Price.
3.16 LIMITATIONS ON SHORT SALES. Each Purchaser agrees that it will not
enter into any Short Sales (as hereinafter defined) from the period
commencing on the First Tranche 1 Closing Date and ending on the last
applicable Adjustment Date. For purposes of this Section 3.16, a "SHORT
SALE" by a Purchaser shall mean a sale of Common Stock by such Purchaser that
is marked as a short sale and that is made at a time when there is no
equivalent offsetting long position in Common Stock held by the Purchaser.
For purposes of determining whether there is an equivalent offsetting long
position in Common Stock held by a Purchaser, Adjustment Shares that have not
yet been issued in connection with the immediately preceding Closing Date
shall be deemed to be held long by the Purchaser, and the number of
Adjustment Shares then held by a Purchaser on any particular date of
computation shall be equal to the number of Adjustment Shares issuable
pursuant to Section 3.15 on the next Adjustment Date calculated as if such
computation date were such Adjustment Date (e.g. using the lowest ten (10)
Per Share Market Values during the twenty-five (25) days immediately
preceding such computation date).
ARTICLE IV
CONDITIONS
4.1 CONDITIONS PRECEDENT TO THE OBLIGATION OF THE PURCHASERS TO
PURCHASE THE EARLY TRANCHE 2 SHARES OR THE TRANCHE 2 SHARES. The obligation
of the Purchasers to acquire the Early Tranche 2 Shares or the Tranche 2
Shares is subject to the satisfaction or waiver by the Purchasers, at or
before the Early Tranche 2 Closing Date or the Tranche 2 Closing Date, as the
case may be, of each of the following conditions:
(i) TRANCHE 1 CLOSING. The Tranche 1 Closing shall have occurred;
(ii) ACCURACY OF THE COMPANY'S REPRESENTATIONS AND WARRANTIES. The
representations and warranties of the Company contained herein shall be true
and correct as of the date when made and as of the Early Tranche 2 Closing
Date or the Tranche 2 Closing Date, as the case may be, as though made on and
as of the Early Tranche 2 Closing Date or the Tranche 2 Closing Date, as the
case may be;
(iii) PERFORMANCE BY THE COMPANY. The Company shall have
performed, satisfied and complied with all covenants, agreements and
conditions required by the Transaction
22
<PAGE>
Documents to be performed, satisfied or complied with by the Company at or
prior to the Early Tranche 2 Closing Date or the Tranche 2 Closing Date, as
the case may be;
(iv) UNDERLYING SECURITIES REGISTRATION STATEMENT. The Underlying
Securities Registration Statement covering the Tranche 1 Shares, Warrant
Shares and Adjustment Shares issuable in connection with the Tranche 1
Closing shall have been declared effective under the Securities Act by the
Commission for at least twenty-five (25) days and shall have remained
effective at all times, not subject to any actual or threatened stop order or
subject to any actual or threatened suspension at any time prior to the Early
Tranche 2 Closing Date or the Tranche 2 Closing Date, as the case may be;
(v) NO INJUNCTION. No statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated or
endorsed by any court or governmental authority of competent jurisdiction
which prohibits the consummation of any of the transactions contemplated by
the Transaction Documents, including the issuance of any of the Shares,
Adjustment Shares or exercise of the Warrants;
(vi) ADVERSE CHANGES. Since the Tranche 1 Closing Date, no event
or series of events which reasonably would be expected to have or result in a
Material Adverse Effect shall have occurred.
(vii) MANAGEMENT. Frank G. Housmann, Jr. shall not have left the
Company or suffered a voluntary or involuntary material lessening of
responsibility as Chief Executive Officer of the Company;
(viii) NO SUSPENSIONS OF TRADING IN COMMON STOCK. The trading in
the Common Stock shall not have been suspended by the Commission or on the
NASDAQ (except for any suspension of trading of limited duration solely to
permit dissemination of material information regarding the Company) at any
time since the Tranche 1 Closing Date;
(ix) LISTING OF COMMON STOCK. The Common Stock shall have been
at all times since the Tranche 1 Closing Date listed for trading on the
NASDAQ;
(x) CHANGE OF CONTROL. No Change of Control in the Company
shall have occurred. "CHANGE OF CONTROL" means the occurrence of any of (i)
an acquisition after the date hereof by an individual or legal entity or
"group" (as described in Rule 13d-5(b)(1) promulgated under the Exchange Act)
of in excess of 50% of the voting securities of the Company, (ii) a
replacement of more than one-half of the members of the Company's board of
directors which is not approved by those individuals who are members of the
board of directors on the date hereof in one or a series of related
transactions, (iii) the merger of the Company with or into another entity,
consolidation or sale of all or substantially all of the assets of the
Company in one or a series of related transactions or (iv) the execution by
the Company of an agreement to which the Company is a party or by which it is
bound, providing for any of the events set forth above in (i), (ii) or (iii);
23
<PAGE>
(xi) LEGAL OPINION. The Company shall have delivered to the
Purchaser the opinion of the Company's outside counsel, in substantially the
form of EXHIBIT C, dated the Early Tranche 2 Closing Date or the Tranche 2
Closing Date, as the case may be;
(xii) REQUIRED APPROVALS. All Required Approvals shall have been
obtained;
(xiii) DELIVERY OF STOCK CERTIFICATE. The Company shall have
delivered to the Purchaser or its Designee the stock certificate(s)
representing the Early Tranche 2 Shares or the Tranche 2 Shares registered in
the name of the Purchaser or its Designee, in form satisfactory to the
Purchasers;
(xiv) PERFORMANCE OF ISSUANCE AND EXERCISE OBLIGATIONS. The
Company shall have (a) delivered Adjustment Shares, as applicable, upon each
Tranche 1 Adjustment Date and otherwise performed its obligations in
accordance with the terms, conditions and timing requirements of this
Agreement and (b) delivered Underlying Shares upon exercise of the Warrants
and otherwise performed its obligations in accordance with the terms of the
Warrants; PROVIDED, HOWEVER that in the event there is an Early Tranche 2
Closing, the Company's obligation to deliver the Second Tranche 1 Adjustment
Shares prior to the Early Tranche 2 Closing Date shall be waived.
(xv) CLOSING THRESHOLDS. For the 20 Business Days immediately
preceding the Early Tranche 2 Closing Date or the Tranche 2 Closing Date, as
the case may be, the average daily trading volume of the Common Stock on
NASDAQ shall be at least 50,000 shares and there shall be no five (5)
consecutive Business Days within such twenty (20) Business Day period where
the average daily volume is less than 30,000 shares per day and the average
of the Per Share Market Values for the ten (10) Business Days immediately
preceding the Early Tranche 2 Closing Date or the Tranche 2 Closing Date, as
the case may be, shall be greater than $7.00; and
(xvi) TRANSFER AGENT INSTRUCTIONS. The Transfer Agent
Instructions, dated the Early Tranche 2 Closing Date or the Tranche 2 Closing
Date, as the case may be, shall have been delivered to and acknowledged in
writing by the Company's transfer agent.
4.2 CONDITIONS PRECEDENT TO THE OBLIGATION OF THE PURCHASERS TO
PURCHASE TRANCHE 3 SHARES. The obligation of the Purchasers to acquire
Tranche 3 Shares is subject to the satisfaction or waiver by the Purchasers,
at or before the Tranche 3 Closing Date of each of the following conditions:
(ii) TRANCHE 2 CLOSING. The Tranche 2 Closing or the Tranche 2
Closing Expiration Date shall have occurred;
(iii) ACCURACY OF THE COMPANY'S REPRESENTATIONS AND WARRANTIES. The
representations and warranties of the Company contained herein shall be true
and correct as of the
24
<PAGE>
date when made and as of the Tranche 3 Closing Date as though made on and as
of the Tranche 3 Closing Date.
(iv) PERFORMANCE BY THE COMPANY. The Company shall have
performed, satisfied and complied with all covenants, agreements and
conditions required by the Transaction Documents to be performed, satisfied
or complied with by the Company at or prior to the Tranche 3 Closing Date;
(v) UNDERLYING SECURITIES REGISTRATION STATEMENT. The Underlying
Securities Registration Statement covering the Shares, Warrant Shares and
Adjustment Shares issuable in connection with the Tranche 1 Closing and
Tranche 2 Closing shall each have been declared effective under the
Securities Act by the Commission for at least twenty-five (25) days and shall
each have remained effective at all times, not subject to any actual or
threatened stop order or subject to any actual or threatened suspension at
any time prior to the Tranche 3 Closing Date;
(vi) NO INJUNCTION. No statute, rule, regulation, executive
order, decree, ruling or injunction shall have been enacted, entered,
promulgated or endorsed by any court or governmental authority of competent
jurisdiction which prohibits the consummation of any of the transactions
contemplated by the Transaction Documents, including the issuance of any of
the Shares, Adjustment Shares or exercise of the Warrants;
(vii) ADVERSE CHANGES. Since the Tranche 2 Closing Date or the
Tranche 2 Closing Expiration Date, as the case may be, no event or series of
events which reasonably would be expected to have or result in a Material
Adverse Effect shall have occurred;
(viii) MANAGEMENT. Frank G. Housmann, Jr. shall not have left the
Company or suffered a voluntary or involuntary material lessening of
responsibility as Chief Executive Officer of the Company;
(ix) NO SUSPENSIONS OF TRADING IN COMMON STOCK. The trading in
the Common Stock shall not have been suspended by the Commission or on the
NASDAQ (except for any suspension of trading of limited duration solely to
permit dissemination of material information regarding the Company) at any
time since the Tranche 2 Closing Date or the Tranche 2 Closing Expiration
Date, as the case may be;
(x) LISTING OF COMMON STOCK. The Common Stock shall have been
at all times since the Tranche 2 Closing Date or the Tranche 2 Closing
Expiration Date, as the case may be, listed for trading on the NASDAQ;
(xi) CHANGE OF CONTROL. No Change of Control in the Company
shall have occurred.
25
<PAGE>
(xii) LEGAL OPINION. The Company shall have delivered to the
Purchaser the opinion of the Company's outside counsel, in substantially the
form of EXHIBIT C, dated the Tranche 3 Closing Date;
(xiii) REQUIRED APPROVALS. All Required Approvals shall have been
obtained;
(xiv) DELIVERY OF STOCK CERTIFICATE. The Company shall have
delivered to the Purchaser or its Designee the stock certificate(s)
representing the Tranche 3 Shares registered in the name of the Purchaser or
its Designee, in form satisfactory to the Purchasers;
(xv) PERFORMANCE OF ISSUANCE AND EXERCISE OBLIGATIONS. The
Company shall have (a) delivered Adjustment Shares, as applicable upon each
Tranche 2 Adjustment Date and otherwise performed its obligations in
accordance with the terms, conditions and timing requirements of this
Agreement and (b) delivered Underlying Shares upon exercise of the Warrants
and otherwise performed its obligations in accordance with the terms of the
Warrants;
(xvi) CLOSING THRESHOLD. For the 20 Business Days immediately
preceding the Tranche 3 Closing Date, the average daily trading volume of the
Common Stock on NASDAQ shall be at least 50,000 shares and there shall be no
five (5) consecutive Business Days within such twenty (20) Business Day
period where the average daily volume is less than 30,000 shares per day and
the average of the Per Share Market Values for the ten (10) Business Days
immediately preceding the Tranche 3 Closing Date shall be greater than $7.00;
and
(xvii) TRANSFER AGENT INSTRUCTIONS. The Transfer Agent
Instructions, dated the Tranche 3 Closing Date, shall have been delivered to
and acknowledged in writing by the Company's transfer agent.
ARTICLE V
MISCELLANEOUS
5.1 FEES AND EXPENSES. The Company has paid $30,000 to RAM Capital
Resources, LLP, which amount shall be paid to RSPAB, in connection with the
preparation and negotiation of the Transaction Documents. Other than the
amounts contemplated in the immediately preceding sentence, each party shall
pay the fees and expenses of its advisers, counsel, accountants and other
experts, if any, and all other expenses incurred by such party incident to
the negotiation, preparation, execution, delivery and performance of this
Agreement. The Company shall pay all stamp and other taxes and duties levied
in connection with the issuance of the Securities.
5.2 ENTIRE AGREEMENT; AMENDMENTS. This Agreement, together with the
Exhibits and Schedules hereto, the Registration Rights Agreement and the
Warrants contain the entire understanding of the parties with respect to the
subject matter hereof and supersede all prior agreements and understandings,
oral or written, with respect to such matters.
26
<PAGE>
5.3 NOTICES. Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be in writing and shall
be deemed given and effective on the earliest of (i) 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, (ii) the Business Day after the date
of transmission, if such notice or communication is delivered via facsimile
at the facsimile telephone number specified in the Purchase Agreement 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, (iii) the Business Day following the date
of mailing, if sent by nationally recognized overnight courier service, or
(iv) upon actual receipt by the party to whom such notice is required to be
given. The address for such notices and communications shall be as follows:
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 Ave., 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
Attn: Will Rose
If to Westover: Westover Investments L.P.
300 Crescent Court, Suite 700
Dallas, TX 75201
Facsimile: (214) 758-1221
Attn: Will Rose
With copies to (for all
27 (cont) |
