SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13d-1(a) AND AMENDMENTS THERETO
FILED PURSUANT TO RULE 13d-2(1)
(Amendment)*
CENTERSPAN COMMUNICATIONS CORPORATION
---------------------------------------------
(Name of Issuer)
Common Stock
---------------------------------------------
(Title of Class of Securities)
8860271
---------------------------------------------
(CUSIP Number)
F. Thomas Dunlap
Vice President, General Counsel and Secretary
Intel Corporation
2200 Mission College Boulevard
Santa Clara, CA 95052
Telephone: (408) 765-8080
---------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
August 9, 1999
---------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule
13G to report the acquisition which is the subject of this
Schedule 13D and is filing this schedule because of Rule 13d-
1 (e), 13d-1 (f) or 13d-1 (g), check the following box [ ].
*The remainder of this cover page shall be filled out for a
reporting person's initial filing on this form with respect to
the subject class of securities, and for any subsequent amendment
containing information which would alter the disclosures provided
in a prior cover page.
The information required in the remainder of this cover page
shall not be deemed to be "filed" for the purpose of Section 18
of the Securities Exchange Act of 1934 (the "Act") or otherwise
subject to the liabilities of that section of the Act but shall
be subject to all other provisions of the Act (however, see the
Notes).
Page 1 of 12 Pages
<PAGE>
CUSIP NO. 8860271 Schedule 13D Page 2 of 12 Pages
1. NAME OF REPORTING PERSON: INTEL CORPORATION
S.S. or I.R.S. IDENTIFICATION NO. OF 94-1672743
ABOVE PERSON:
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP** (a)[ ]
(b)[ ]
3. SEC USE ONLY
4. SOURCE OF FUNDS: WC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS [ ]
REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)
6. CITIZENSHIP OR PLACE OF ORGANIZATION: DELAWARE
7. SOLE VOTING POWER: 288,988
NUMBER OF
SHARES 8. SHARED VOTING POWER: N/A
BENEFICIALLY
OWNED BY EACH 9. SOLE DISPOSITIVE POWER: 288,988
REPORTING
PERSON WITH 10. SHARED DISPOSITIVE POWER: N/A
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH
REPORTING PERSON: 288,988
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)
EXCLUDES CERTAIN SHARES** [ ]
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 5%
(11):
14. TYPE OF REPORTING PERSON: CO
**SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
CUSIP NO. 8860271 Schedule 13D Page 3 of 12 Pages
ITEM 1. Security and Issuer.
(a) Name of Principal Executive Offices of Issuer:
CenterSpan Communications Corporation
7175 NW Evergreen Parkway, #400
Hillsboro, OR 97124
(b) Title of Class of Equity Securities:
Common Stock
ITEM 2. Identity and Background.
(a) Name of Person Filing:
Intel Corporation (the "Reporting Person")
(b) Address of Principal Business Office:
2200 Mission College Boulevard
Santa Clara, CA 95052-8119
(c) Principal Business:
Manufacturer of microcomputer components,
modules and systems.
(d) Criminal Proceedings:
During the last five years, neither the
Reporting Person nor any executive officer or
director of the Reporting Person has been
convicted in any criminal proceeding.
(e) Civil Proceedings:
During the last five years, neither the
Reporting Person nor any executive officer or
director of the Reporting Person has been party
to any civil proceeding of a judicial or
administrative body of competent jurisdiction
as a result of which such person was or is
subject to any judgment, decree or final order
enjoining future violations of, or prohibiting
or mandating activities subject to, Federal or
State securities laws or finding any violation
with respect to such laws.
<PAGE>
CUSIP NO. 8860271 Schedule 13D Page 4 of 12 Pages
(f) Place of Organization:
Delaware
Attached hereto as Appendix A is information required
by this Item 2 with respect to the executive officers
and directors of the Reporting Person. All such
individuals are U.S. citizens, except as otherwise
indicated on Appendix A.
ITEM 3. Source and Amount of Funds or Other Consideration.
(a) Source of Funds:
Funds for the purchase of the Warrant Shares
(as defined in Item 4) will be derived from the
Reporting Person's working capital.
(b) Amount of Funds:
The Reporting Person would need to pay four
million forty five thousand four hundred and
fifty four dollars and seventy five cents
($4,045,454.75) to acquire the Warrant Shares
(as defined in Item 4).
ITEM 4. Purpose of the Transaction.
Pursuant to a Warrant Agreement dated December 4, 1998
between the Reporting Person and the Issuer, the
Reporting Person has the right to purchase from the
Issuer 88,988 shares of the Issuer's common stock at a
price per share of four and thirteen sixteenths
dollars (US$4 13/16). In addition, pursuant to a
Warrant Agreement dated August 9, 1999 between the
Reporting Person and the Issuer, the Reporting Person
has the right to purchase from the Issuer an
additional 200,000 shares of the Issuer's common stock
at a price per share of eighteen dollars and 8.6 cents
(US$18.086). Both the December 4, 1998 warrant
agreement and the August 9, 1999 warrant agreement are
hereafter referred to collectively as the "Warrants."
The shares of the Issuer's Common Stock issuable upon
exercise of the Warrants shall be hereafter referred
to as the "Warrant Shares".
Upon exercise of the Warrants, the Reporting Person
will hold the Warrant Shares as an investment.
Depending on the Reporting Person's evaluation of
market conditions, market price, alternative
investment opportunities, liquidity needs and other
factors, the Reporting Person will from time to time
explore opportunities for liquidating all or a portion
of the Warrant Shares, through one or more sales
pursuant to public or private offerings or otherwise.
In such event, the Reporting Person may determine to
retain some portion of the Shares as an investment.
<PAGE>
CUSIP NO. 8860271 Schedule 13D Page 5 of 12 Pages
In addition, the Reporting Person and the Issuer have
entered into two software licenses, pursuant to which
the Issuer has provided certain Internet voice
communications technology to the Reporting Person.
ITEM 5. Interest in Securities of the Issuer.
The information contained in Item 4 is incorporated
herein by this reference.
(a) Number of Shares 288,988
Beneficially Owned:
Right to Acquire: 288,988
Percent of Class: 5% (based on
5,350,226 shares
of Common Stock
outstanding,
determined from
the Issuer's Proxy
Statement filed on
Form 14A on
November 24,
1999).
(b) Sole Power to Vote, Direct
the Vote of, or Dispose of
Shares: 288,988
(c) Recent Transactions: See Item 4.
(d) Rights with Respect to
Dividends or Sales
Proceeds: N/A
(e) Date of Cessation of Five
Percent Beneficial
Ownership: N/A
ITEM 6. Contracts, Arrangements, Understandings or
Relationships with Respect to Securities of the
Issuer.
Pursuant to the Warrants (as defined in Item 4), the
Reporting Person has, under certain circumstances,
various rights related to registration of the Warrant
Shares pursuant to certain shelf and piggyback
registration rights granted to the Reporting Person.
ITEM 7. Material to be Filed as Exhibits.
Exhibit 1 CenterSpan Communications Corporation
(formerly Thrustmaster, Inc.) Warrant to
Purchase Common Stock dated December 4,
1998.
Exhibit 2 CenterSpan Communications Corporation
(formerly Thrustmaster, Inc.) Warrant to
Purchase Common Stock dated August 9,
1999.
<PAGE>
CUSIP NO. 8860271 Schedule 13D Page 6 of 12 Pages
SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this
statement is true, complete and correct.
Dated as of 1/27/00.
INTEL CORPORATION
By: /s/F. Thomas Dunlap, Jr.
-------------------------
F. Thomas Dunlap, Jr.
Vice President, General
Counsel and Secretary
<PAGE>
CUSIP NO. 8860271 Schedule 13D Page 7 of 12 Pages
APPENDIX A
DIRECTORS
The following is a list of all Directors of Intel Corporation and
certain other information with respect to each Director. All
Directors are United States citizens except as indicated below.
Name: Craig R. Barrett
Business 2200 Mission College Boulevard, Santa Clara,
Address: CA 95052
Principal President and Chief Executive Officer
Occupation:
Name, principal Intel Corporation, a manufacturer of
business and microcomputer components, modules and systems.
address of 2200 Mission College Boulevard
corporation or Santa Clara, CA 95052
other
organization in
which employment
is conducted:
Name: John Browne
Business BP Amoco p.l.c., Britannic House, 1 Finsbury
Address: Circus, London EC2M 7BA
Principal Group Chief Executive
Occupation:
Name, principal The BP Amoco p.l.c., an integrated oil
business and company.
address of Britannic House, 1 Finsbury Circus
corporation or London EC2M 7BA
other
organization in
which employment
is conducted:
Citizenship: British
<PAGE>
CUSIP NO. 8860271 Schedule 13D Page 8 of 12 Pages
Name: Winston H. Chen
Business Paramitas Foundation, 3945 Freedom Circle,
Address: Suite 760, Santa Clara, CA 95054
Principal Chairman
Occupation:
Name, principal Paramitas Foundation, a charitable foundation.
business and 3945 Freedom Circle, Suite 760
address of Santa Clara, CA 95054
corporation or
other
organization in
which employment
is conducted:
Name: Andrew S. Grove
Business 2200 Mission College Boulevard, Santa Clara,
Address: CA 95052
Principal Chairman of the Board of Directors
Occupation:
Name, principal Intel Corporation, a manufacturer of
business and microcomputer components, modules and systems.
address of 2200 Mission College Boulevard
corporation or Santa Clara, CA 95052
other
organization in
which employment
is conducted:
Name: D. James Guzy
Business 1340 Arbor Road, Menlo Park, CA 94025
Address:
Principal Chairman
Occupation:
Name, principal The Arbor Company, a limited partnership
business and engaged in the electronics and computer
address of industry.
corporation or 1340 Arbor Road
other Menlo Park, CA 94025
organization in
which employment
is conducted:
<PAGE>
CUSIP NO. 8860271 Schedule 13D Page 9 of 12 Pages
Name: Gordon E. Moore
Business 2200 Mission College Boulevard, Santa Clara,
Address: CA 95052
Principal Chairman Emeritus of the Board of Directors
Occupation:
Name, principal Intel Corporation, a manufacturer of
business and microcomputer components, modules and systems.
address of 2200 Mission College Boulevard
corporation or Santa Clara, CA 95052
other
organization in
which employment
is conducted:
Name: David S. Pottruck
Business 101 Montgomery Street, San Francisco, CA 94104
Address:
Principal President and Co-Chief Executive Officer
Occupation:
Name, principal The Charles Schwab Corporation, an investment
business and company
address of 101 Montgomery Street
corporation or San Francisco, CA 94104
other
organization in
which employment
is conducted:
Name: Jane E. Shaw
Business 1310 Orleans Drive, Sunnyvale, CA 94089
Address:
Principal Chairman and Chief Executive Officer
Occupation:
Name, principal AeroGen, Inc., a private company specializing
business and in controlled delivery of drugs to the lungs
address of 1310 Orleans Drive
corporation or Sunnyvale, CA 94089
other
organization in
which employment
is conducted:
<PAGE>
CUSIP NO. 8860271 Schedule 13D Page 10 of 12 Pages
Name: Leslie L. Vadasz
Business 2200 Mission College Boulevard, Santa Clara,
Address: CA 95052
Principal Executive Vice President, President, Intel
Occupation: Capital
Name, principal Intel Corporation, a manufacturer of
business and microcomputer components, modules and systems.
address of 2200 Mission College Boulevard
corporation or Santa Clara, CA 95052
other
organization in
which employment
is conducted:
Name: David B. Yoffie
Business Harvard Business School, Morgan Hall 215,
Address: Soldiers Field Road, Boston, MA 02163
Principal Max and Doris Starr Professor of International
Occupation: Business Administration
Name, principal Harvard Business School, an educational
business and institution.
address of Harvard Business School
corporation or Morgan Hall 215,Soldiers Field Road
other Boston, MA 02163
organization in
which employment
is conducted:
Name: Charles E. Young
Business 10920 Wilshire Boulevard, Suite 1835, Los
Address: Angeles, CA 90024
Principal A. Chancellor Emeritus
Occupation:
B. Interim President
Name, principal A. University of California at Los Angeles, an
business and educational institution.
address of 10920 Wilshire Boulevard, Suite 1835
corporation or Los Angeles, CA 90024
other
organization in B. University of Florida
which employment 226 Tigert Hall
is conducted: PO Box 113150
Gainesville, FL 32610
<PAGE>
CUSIP NO. 8860271 Schedule 13D Page 11 of 12 Pages
EXECUTIVE OFFICERS
The following is a list of all executive officers of Intel
Corporation excluding executive officers who are also directors.
Unless otherwise indicated, each officer's business address is
2200 Mission College Boulevard, Santa Clara, California 95052-
8119, which address is Intel Corporation's business address.
Name: Paul S. Otellini
Title: Executive Vice President, General Manager, Intel
Architecture Business Group
Name: Gerhard H. Parker
Title: Executive Vice President, General Manager, New
Business Group
Name: Andy D. Bryant
Title: Senior Vice President, Chief Financial Officer and
Enterprise Services Officer
Name: Sean M. Maloney
Title: Senior Vice President, Director, Sales and Marketing
Group
Name: Michael R. Splinter
Title: Senior Vice President, General Manager, Technology
and Manufacturing Group
Name: Albert Y. C. Yu
Title: Senior Vice President, General Manager,
Microprocessor Products Group
Name: F. Thomas Dunlap, Jr.
Title: Vice President, General Counsel and Secretary
Name: Arvind Sodhani
Title: Vice President, Treasurer
<PAGE>
CUSIP NO. 8860271 Schedule 13D Page 12 of 12 Pages
EXHIBIT INDEX
Exhibit No. Document
- ---------- --------
Exhibit 1 CenterSpan Communications Corporation (formerly
Thrustmaster, Inc.) Warrant to Purchase Common
Stock dated December 4, 1998.
Exhibit 2 CenterSpan Communications Corporation (formerly
Thrustmaster, Inc.) Warrant to Purchase Common
Stock dated August 9, 1999.
<PAGE>
EXHIBIT 1
WARRANT TO PURCHASE COMMON STOCK
OF THRUSTMASTER, INC.
Dated 12/4/98
<PAGE> 1 INTEL/THRUSTMASTER CONFIDENTIAL
THE WARRANT EVIDENCED OR CONSTITUTED HEREBY, AND ALL SHARES OF
COMMON STOCK ISSUABLE HEREUNDER, HAVE BEEN AND WILL BE ISSUED
WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED
("THE ACT") AND MAY NOT BE SOLD, OFFERED FOR SALE, TRANSFERRED,
PLEDGED OR HYPOTHECATED WITHOUT REGISTRATION UNDER THE ACT UNLESS
EITHER (i) THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL, IN
FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE COMPANY, THAT
REGISTRATION IS NOT REQUIRED IN CONNECTION WITH SUCH DISPOSITION
OR (ii) THE SALE OF SUCH SECURITIES IS MADE PURSUANT TO
SECURITIES AND EXCHANGE COMMISSION RULE 144.
WARRANT TO PURCHASE COMMON STOCK OF THRUSTMASTER, INC.
(Subject to Adjustment)
NO. __________
THIS CERTIFIES THAT, for value received, Intel Corporation,
or its permitted registered assigns ("Holder"), is entitled,
subject to the terms and conditions of this Warrant, at any time
or from time to time after 5:00 p.m. PST December 4, 1998 (the
"Effective Date"), and before 5:00 p.m. Pacific Time, five (5)
years from the Effective Date (the "Expiration Date"), to
purchase from Thrustmaster, Inc. an Oregon corporation (the
"Company") Eighty-eight thousand nine hundred and eighty eight
(88988) shares of Warrant Stock (as defined in Section 1 below)
of the Company at a price per share of Four and thirteen
sixteenths dollars (US$4 13/16) (the "Purchase Price"). Both the
number of shares of Warrant Stock purchasable upon exercise of
this Warrant and the Purchase Price are subject to adjustment and
change as provided herein. This Warrant is issued pursuant to
that certain Software Development and License Agreement dated as
of the Effective Date between the Company and Holder. This
Warrant replaces the warrant issued and delivered to Holder by
the Company effective as of May 28, 1998.
1. CERTAIN DEFINITIONS. As used in this Warrant the following
terms shall have the following respective meanings:
"Fair Market Value" of a share of Warrant Stock as of a
particular date shall mean: (a) if traded on a securities
exchange or the Nasdaq National Market, the Fair Market Value
shall be deemed to be the average of the closing prices of the
Common Stock of the Company on such exchange or market over the 5
business days ending immediately prior to the applicable date of
valuation; (b) if actively traded over-the-counter, the Fair
Market Value shall be deemed to be the average of the closing bid
prices over the 30-day period ending immediately prior to the
applicable date of valuation; and (c) if there is no active
public market, the Fair Market Value shall be the value thereof,
as agreed upon by the Company and the Holder; provided, however,
that if the Company and the Holder cannot agree on such value,
such value shall be determined by an independent valuation firm
experienced in valuing businesses such as the Company and jointly
selected in good faith by the Company and the Holder (with the
fees and expenses of the valuation firm paid for by the Company.
"HSR Act" shall mean the Hart-Scott-Rodino Antitrust
Improvements Act of 1976.
"Registered Holder" shall mean any Holder in whose name this
Warrant is registered upon the books and records maintained by
the Company.
<PAGE> 2 INTEL/THRUSTMASTER CONFIDENTIAL
"Warrant" as used herein, shall include this Warrant and any
warrant delivered in substitution or exchange therefor as
provided herein.
"Warrant Stock" shall mean the Common Stock of the Company
and any other securities at any time receivable or issuable upon
exercise of this Warrant.
2. EXERCISE OF WARRANT
2.1. Payment. Subject to compliance with the terms and
conditions of this Warrant and applicable securities laws, this
Warrant may be exercised, in whole or in part at any time or from
time to time, on or before the Expiration Date by the delivery
(including, without limitation, delivery by facsimile) of the
form of Notice of Exercise attached hereto as Exhibit 1 (the
"Notice of Exercise"), duly executed by the Holder, to the
Company, and as soon as practicable after such date, surrendering
(a) this Warrant, and (b) payment, (i) in cash (by check) or by
wire transfer, (ii) by cancellation by the Holder of indebtedness
of the Company to the Holder; or (iii) by a combination of (i)
and (ii), of an amount equal to the product obtained by
multiplying the number of shares of Common Stock being purchased
upon such exercise by the then effective Purchase Price (the
"Exercise Amount"), except that if Holder is subject to HSR Act
Restrictions (as defined in Section 2.5 below), the Exercise
Amount shall be paid to the Company within five (5) business days
of the termination of all HSR Act Restrictions.
2.2. Net Issue Exercise. In lieu of the payment methods set
forth in Section 2.1 (b) above, the Holder may elect to exchange
all or some of the Warrant for shares of Warrant Stock equal to
the value of the amount of the Warrant being exchanged on the
date of exchange. If Holder elects to exchange this Warrant as
provided in this Section 2.2, Holder shall tender to the Company
the Warrant for the amount being exchanged, along with written
notice of Holder's election to exchange some or all of the
Warrant, and the Company shall issue to Holder the number of
shares of the Warrant Stock computed using the following formula:
X = Y(A-B)
------
A
Where X = the number of shares of Warrant Stock to be issued to
Holder; Y = the number of shares of Warrant Stock purchasable
under the amount of the Warrant being exchanged; A = the Fair
Market Value of one share of the Company's Warrant Stock; and B =
the Purchase Price. All references herein to an "exercise" of the
Warrant shall include an exchange pursuant to this Section 2.2.
2.3. "Easy Sale" Exercise. In lieu of the payment methods
set forth in Section 2.1 (b) above, when permitted by law and
applicable regulations (including Nasdaq and NASD rules), the
Holder may pay the Purchase Price through a "same day sale"
commitment from the Holder, whereby the Holder irrevocably elects
to exercise this Warrant and to sell a portion of the Shares so
purchased to pay for the Purchase Price and the Holder commits
upon sale of such Shares to forward the Purchase Price directly
to the Company.
2.4. Stock Certificates; Fractional Shares. As soon as
practicable on or after such date, the Company shall issue and
deliver to the person or persons entitled to receive the same a
certificate or certificates for the number of whole shares of
Warrant Stock issuable upon such exercise, together with cash in
lieu of any fraction of a share equal to such fraction of the
current Fair Market Value of one whole share of Warrant Stock as
of the date of exercise of this Warrant.
<PAGE> 3 INTEL/THRUSTMASTER CONFIDENTIAL
No fractional shares or scrip representing fractional shares
shall be issued upon an exercise of this Warrant.
2.5. HSR Act. The Company hereby acknowledges that exercise
of this Warrant by Holder may subject the Company and/or the
Holder to the filing requirements of the HSR Act and that Holder
may be prevented from exercising this Warrant until the
expiration or early termination of all waiting periods imposed by
the HSR Act ("HSR Act Restrictions"). If on or before the
Expiration Date Holder has sent the Notice of Exercise to Company
and Holder has not been able to complete the exercise of this
Warrant prior to the Expiration Date because of HSR Act
Restrictions, the Holder shall be entitled to complete the
process of exercising this Warrant in accordance with the
procedures contained herein notwithstanding the fact that
completion of the exercise of this Warrant would take place after
the Expiration Date or the completion of the IPO.
2.6. Partial Exercise; Effective Date of Exercise. In case
of any partial exercise of this Warrant, the Company shall cancel
this Warrant upon surrender hereof and shall execute and deliver
a new Warrant of like tenor and date for the balance of the
shares of Warrant Stock purchasable hereunder. This Warrant shall
be deemed to have been exercised immediately prior to the close
of business on the date of its surrender for exercise as provided
above.
3. VALID ISSUANCE: TAXES. All shares of Warrant Stock issued
upon the exercise of this Warrant shall be validly issued, fully
paid and non-assessable, and the Company shall pay all taxes and
other governmental charges that may be imposed in respect of the
issue or delivery thereof.
4. ADJUSTMENT OF PURCHASE PRICE AND NUMBER OF SHARES. The
number of shares of Warrant Stock issuable upon exercise of this
Warrant (or any shares of stock or other securities or property
receivable or issuable upon exercise of this Warrant) and the
Purchase Price are subject to adjustment upon occurrence of the
following events:
4.1. Adjustment for Stock Splits, Stock Subdivisions or
Combinations of Shares. The Purchase Price of this Warrant shall
be proportionally decreased or increased (as applicable) and the
number of shares of Warrant Stock issuable upon exercise of this
Warrant (or any shares of stock or other securities at the time
issuable upon exercise of this Warrant) shall be proportionally
increased or decreased (as applicable) to reflect any stock split
or subdivision, or combination or reverse stock split,
respectively, of the Company's Warrant Stock.
4.2. Adjustment for Dividends or Distributions of Stock or
Other Securities or Property. In case the Company shall make or
issue, or shall fix a record date for the determination of
eligible holders entitled to receive, a dividend or other
distribution with respect to the Warrant Stock (or any shares of
stock or other securities at the time issuable upon exercise of
the Warrant) payable in (a) securities of the Company or (b)
assets (excluding cash dividends paid or payable solely out of
retained earnings), then, in each such case, the Holder of this
Warrant on exercise hereof at any time after the consummation,
effective date or record date of such dividend or other
distribution, shall receive, in addition to the shares of Warrant
Stock (or such other stock or securities) issuable on such
exercise prior to such date, and without the payment of
additional consideration therefor, the securities or such other
assets of the Company to which such Holder would have been
entitled upon such date if such Holder had exercised this Warrant
on the date hereof and had thereafter, during the period from the
date hereof to and including the date of such exercise, retained
such shares and/or all other additional stock available by it as
aforesaid during such period giving effect to all adjustments
called for by this Section 4.
<PAGE> 4 INTEL/THRUSTMASTER CONFIDENTIAL
4.3. Reclassification. If the Company, by reclassification
of securities or otherwise, shall change any of the securities as
to which purchase rights under this Warrant exist into the same
or a different number of securities of any other class or
classes, this Warrant shall thereafter represent the right to
acquire such number and kind of securities as would have been
issuable as the result of such change with respect to the
securities that were subject to the purchase rights under this
Warrant immediately prior to such reclassification or other
change and the Purchase Price therefore shall be appropriately
adjusted, all subject to further adjustment as provided in this
Section 4.
4.4. Adjustment for Capital Reorganization, Merger or
Consolidation. In case of any capital reorganization of the
capital stock of the Company (other than a combination,
reclassification, exchange or subdivision of shares otherwise
provided for herein), or any merger or consolidation of the
Company with or into another corporation, or the sale of all or
substantially all the assets of the Company then, and in each
such case, as a part of such reorganization, merger,
consolidation, sale or transfer, lawful provision shall be made
so that the Holder of this Warrant shall thereafter be entitled
to receive upon exercise of this Warrant, during the period
specified herein and upon payment of the Purchase Price then in
effect, the number of shares of stock or other securities or
property of the successor corporation resulting from such
reorganization, merger, consolidation, sale or transfer that a
holder of the shares deliverable upon exercise of this Warrant
would have been entitled to receive in such reorganization,
consolidation, merger, sale or transfer if this Warrant had been
exercised immediately before such reorganization, merger,
consolidation, sale or transfer, all subject to further
adjustment as provided in this Section 4. The foregoing
provisions of this Section 4.4 shall similarly apply to
successive reorganizations, consolidations, mergers, sales and
transfers and to the stock or securities of any other corporation
that are at the time receivable upon the exercise of this
Warrant.
5. CERTIFICATE AS TO ADJUSTMENTS. In each case of any
adjustment in the Purchase Price, or number or type of shares
issuable upon exercise of this Warrant, the Company shall
promptly send a certificate to the Holder detailing the
computation of the adjustment.
6. LOSS OR MUTILATION. Upon receipt of evidence reasonably
satisfactory to the Company of the ownership of and the loss,
theft, destruction or mutilation of this Warrant, and of
indemnity reasonably satisfactory to it, and (in the case of
mutilation) upon surrender and cancellation of this Warrant, the
Company will execute and deliver a new Warrant of like tenor as
the lost, stolen, destroyed or mutilated Warrant.
7. RESERVATION OF COMMON STOCK. The Company hereby covenants
that at all times there shall be reserved for issuance and
delivery upon exercise of this Warrant such number of shares of
Common Stock or other shares of capital stock of the Company as
are from time to time issuable upon exercise of this Warrant and,
if and when necessary, will take all steps necessary to amend its
charter documents to provide sufficient reserves of shares of
Warrant Stock. All such shares shall be duly authorized, and when
issued upon such exercise, shall be validly issued, fully paid
and non-assessable, free and clear of all liens and encumbrances,
except encumbrances or restrictions arising under federal or
state securities laws.
8. TRANSFER AND EXCHANGE. Subject to the terms and conditions
of this Warrant and compliance with all applicable securities
laws, this Warrant and all rights hereunder may be transferred to
any Registered Holder parent, subsidiary or affiliate, in whole
or in part, upon notice to the Company and surrender of this
Warrant and the payment of any necessary transfer tax or other
governmental charge imposed upon such transfer.
<PAGE> 5 INTEL/THRUSTMASTER CONFIDENTIAL
9. RESTRICTIONS ON TRANSFER. The Holder, by acceptance hereof,
agrees that, absent an effective registration statement filed
with the SEC under the Securities Act of 1933, as amended (the
"1933 Act"), covering the disposition or sale of this Warrant or
the Warrant Stock issued or issuable upon exercise hereof and
registration or qualification under applicable state securities
laws, such Holder will not sell, transfer, pledge, or hypothecate
any or all such Warrants or Warrant Stock unless either (i) the
Company has received an opinion of counsel, in form and substance
reasonably satisfactory to the Company, to the effect that such
registration is not required in connection with such disposition
or (ii) the sale of such securities is made pursuant to SEC Rule
144.
10. COMPLIANCE WITH SECURITIES LAWS. By acceptance of this
Warrant, the holder hereby represents, warrants and covenants
that any shares of stock purchased upon exercise of this Warrant
or acquired upon conversion thereof shall be acquired for
investment only and not with a view to, or for sale in connection
with, any distribution thereof; that the Holder is able to bear
the economic risk of holding such shares as may be acquired
pursuant to the exercise of this Warrant for an indefinite
period; that the Holder understands that the shares of stock
acquired pursuant to the exercise of this Warrant or acquired
upon conversion thereof will not be registered under the 1933 Act
and will be "restricted securities" within the meaning of Rule
144 under the 1933 Act; and that all stock certificates
representing shares of stock issued to the Holder upon exercise
of this Warrant or upon conversion of such shares may have
affixed thereto an appropriate legend reflecting such restricted
nature
11. NO RIGHTS OR LIABILITIES AS STOCKHOLDER. This Warrant shall
not entitle the Holder to any voting rights or other rights as a
stockholder of the Company.
12. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
hereby represents and warrants to Holder that the statements in
the following paragraphs of this Section 12 are all true and
correct:
12.1. Organization. Good Standing and Qualification. The
Company is a corporation duly organized, validly existing and in
good standing under, and by virtue of, the laws of the State of
Oregon and has all requisite corporate power and authority to own
its properties and assets and to carry on its business as now
conducted and as presently proposed to be conducted. The Company
is qualified to do business as a foreign corporation in each
jurisdiction where failure to be so qualified would have a
material adverse effect on its financial condition, business,
prospects or operations.
12.2. Due Authorization; Consents. All corporate action
on the part of the Company, its officers, directors and
shareholders necessary for (a) the authorization, execution and
delivery of, and the performance of all obligations of the
Company under this Warrant, and (b) the authorization, issuance,
reservation for issuance and delivery of all of the equity
securities issuable upon exercise of this Warrant (and, if
applicable, the Common Stock issuable upon conversion thereof).
This Warrant constitutes a valid and binding obligation of the
Company enforceable in accordance with its terms, subject, as to
enforcement of remedies, to applicable bankruptcy, insolvency,
moratorium, reorganization and similar laws affecting creditors'
rights generally and to general equitable principles. All
consents, approvals and authorizations of, and registrations,
qualifications and filings with, any federal or state
governmental agency, authority or body, or any third party,
required in connection with the execution, delivery and
performance of this Warrant and the consummation of the
transactions contemplated hereby and thereby have been obtained.
<PAGE> 6 INTEL/THRUSTMASTER CONFIDENTIAL
12.3. Valid Issuance of Stock. The outstanding shares of
the capital stock of Company are duly and validly issued, fully
paid and non-assessable.
12.4. SEC Reports; Financial Statements. The Company has
duly filed with the SEC the Company's annual report on Form 10-K
for the year ended December 31, 1997, and its quarterly reports
on Form 10-Q for the quarter ended March 31, 1998, (collectively,
the "Company SEC Reports"). As of their respective filing dates,
the Company SEC Reports complied in all material respects with
the requirements of the Securities Exchange Act of 1934, as
amended, and none of the SEC Documents contained any untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
made therein, in light of the circumstances in which they were
made, not misleading, except to the extent corrected by a
subsequently filed document with the SEC. Each of the
consolidated financial statements (including, in each case, any
related notes) contained in the Company SEC Reports complied as
to form in all material respects with the applicable published
rules and regulations of the SEC with respect thereto, was
prepared in accordance with generally accepted accounting
principles applied on a consistent basis throughout the periods
involved (except as may be indicated in the notes to such
financial statements or, in the case of unaudited statements, as
permitted for by Form 10-Q) and presented fairly, in all material
respects, the consolidated financial position of the Company and
its subsidiaries as at the respective dates and the consolidated
results of its operations and cash flows for the periods
indicated, except that the unaudited interim financial statements
are subject to normal and recurring year-end adjustments which
are not expected to be material in amount.
12.5. Governmental Consents. All consents, approvals,
orders, authorizations or registrations, qualifications,
designations, declarations or filings with any US., federal or
state governmental authority on the part of Company required in
connection with the consummation of the transactions contemplated
herein shall have been obtained prior to and be effective as of
the Effective Date.
12.6. Disclosure. No representation or warranty by the
Company in this Warrant contains or will contain any untrue
statement of a material fact or omits or will omit to state any
material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances in
which they are made, not misleading.
13. NOTICES. All notices and other communications from the
Company to the Holder shall be given in writing via certified
mail, return receipt requested, hand delivery or overnight
delivery to 2200 Mission College Boulevard, Mail Stop SC4-210,
Santa Clara, California 95052, Attention: Treasurer.
14. LAW GOVERNING. This Warrant shall be construed and enforced
in accordance with, and governed by, the laws of the State of
Oregon.
15. NO IMPAIRMENT. The Company will not, by amendment of its
Articles of Incorporation or bylaws, or through reorganization,
consolidation, merger, dissolution, issue or sale of securities,
sale of assets or any other voluntary action, avoid or seek to
avoid the observance or performance of any of the terms of this
Warrant.
16. NOTICES OF RECORD DATE. In case (a) the Company shall take a
record of the holders of its Warrant Stock, for the purpose of
entitling them to receive any dividend or other distribution, or
any right to subscribe for or purchase any shares of stock of any
class or any other securities or
<PAGE> 7 INTEL/THRUSTMASTER CONFIDENTIAL
to receive any other right; (b) of any consolidation, merger or
reorganization of the Company, any reclassification of the
capital stock of the Company, or any conveyance of all or
substantially all of the assets of the Company to another
corporation in which holders of the Company's stock are to
receive stock, securities or property of another corporation; (c)
of any voluntary dissolution, liquidation or winding-up of the
Company; or (d) of any redemption or conversion of all
outstanding Common Stock or Warrant Stock; then, and in each such
case, the Company will mail or cause to be mailed to the
Registered Holder of this Warrant a notice specifying, as the
case may be, (i) the date on which a record is to be taken for
the purpose of such dividend, distribution or right, or (ii) the
date on which such transaction or event is to take place, and the
time, if any is to be fixed, as of which the holders of record of
Warrant Stock, shall be entitled to exchange their shares of
Warrant Stock for securities or other property deliverable upon
such event or transaction. Such notice shall be delivered at
least thirty (30) days prior to the date therein specified.
17. SEVERABILITY. If any term, provision, covenant or
restriction of this Warrant is held by a court of competent
jurisdiction to be invalid, void or unenforceable, the remainder
of the terms, provisions, covenants and restrictions of this
Agreement shall remain in full force and effect and shall in no
way be affected, impaired or invalidated.
18. INFORMATION RIGHTS. The Company shall deliver to each holder
of this Warrant or any securities issued (directly or indirectly)
upon exercise hereof, upon request, copies of the Company's
reports on Forms 10-K, 10-Q, and 8-K and Annual Reports to
Shareholders promptly after such documents are filed with the
SEC.
19. NO INCONSISTENT AGREEMENTS. The Company will not on or after
the date of this Warrant enter into any agreement with respect to
its securities which is inconsistent with the rights granted to
the Holders of this Warrant or otherwise conflicts with the
provisions hereof. The rights granted to the Holders hereunder do
not in any way conflict with and are not inconsistent with the
rights granted to holders of the Company's securities under any
other agreements, except rights that have been waived.
20. SATURDAYS, SUNDAYS AND HOLIDAYS. If the Expiration Date
falls on a Saturday, Sunday or legal holiday, the Expiration Date
shall automatically be extended until 5:00 p.m. the next business
day.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 8 INTEL/THRUSTMASTER CONFIDENTIAL
IN WITNESS WHEREOF, the parties hereto have executed this
Warrant as of the Effective Date.
INTEL CORPORATION THRUSTMASTER, INC.
By: /s/Arvind Sodhani By: /s/F. G. Hausmann, Jr.
---------------------- ----------------------
Arvind Sodhani F. G. Hausmann, Jr.
- --------------------------- ---------------------------
Printed Name Printed Name
Vice President and Treasurer President & CEO
- --------------------------- ---------------------------
Title Title
SIGNATURE PAGE TO WARRANT
<PAGE> 9 INTEL/THRUSTMASTER CONFIDENTIAL
EXHIBIT 1
NOTICE OF EXERCISE
(To be executed upon exercise of Warrant)
THRUSTMASTER WARRANT NO.
The undersigned hereby irrevocably elects to exercise the right
of purchase represented by the within Warrant Certificate for,
and to purchase thereunder, the securities of THRUSTMASTER, as
provided for therein, and (check the applicable box):
O Tenders herewith payment of the exercise price in full in
the form of cash or a certified or official bank check in
same-day funds in the amount of $_____ for _____ such
securities.
O Elects the Net Issue Exercise option pursuant to Section 2.2
of the Warrant, and accordingly requests delivery of a net
of such securities, according to the following calculation:
X = Y(A-B) ( ) = ( )[( ) - ( )]
----- -----------------
A ( )
--------
Where X = the number of shares of Common Stock to be issued
to Holder.
Y = the number of shares of Common Stock purchasable under
the amount of the Warrant being exchanged (as adjusted to
the date of such calculation).
A = the Fair Market Value of one share of the Company's
Common Stock.
B = Purchase Price (as adjusted to the date of such
calculation).
O Elects the Easy Sale Exercise option pursuant to Section 2.3
of the Warrant, and accordingly requests delivery of a net
of such securities.
Please issue a certificate or certificates for such securities in
the name of, and pay any cash for any fractional share to (please
print name, address and social security number):
Name: ------------------------------------------------------
Address: ------------------------------------------------------
Signature: ----------------------------------------------------
Note: The above signature should correspond exactly with the name
on the first page of this Warrant Certificate or with the name of
the assignee appearing in the assignment form below.
If said number of shares shall not be all the shares purchasable
under the within Warrant Certificate, a new Warrant Certificate
is to be issued in the name of said undersigned for the balance
remaining of the shares purchasable thereunder rounded up to the
next higher whole number of shares.
<PAGE>
EXHIBIT 2
WARRANT TO PURCHASE COMMON STOCK
OF THRUSTMASTER, INC.
Dated 8/9/99
<PAGE> 1 INTEL/THRUSTMASTER CONFIDENTIAL
WARRANT
THE WARRANT EVIDENCED OR CONSTITUTED HEREBY, AND ALL SHARES OF
COMMON STOCK ISSUABLE HEREUNDER, HAVE BEEN AND WILL BE ISSUED
WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT") AND MAY NOT BE SOLD, OFFERED FOR SALE,
TRANSFERRED, PLEDGED OR HYPOTHECATED WITHOUT REGISTRATION UNDER
THE ACT UNLESS EITHER (i) THE COMPANY HAS RECEIVED AN OPINION OF
COUNSEL, IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE
COMPANY, TO THE EFFECT THAT REGISTRATION IS NOT REQUIRED IN
CONNECTION WITH SUCH DISPOSITION OR (ii) THE SALE OF SUCH
SECURITIES IS MADE PURSUANT TO SECURITIES AND EXCHANGE COMMISSION
RULE 144.
WARRANT TO PURCHASE COMMON STOCK OF THRUSTMASTER, INC.
(Subject to Adjustment)
NO. W-INTC2 August 9, 1999
THIS CERTIFIES THAT, for value received, Intel Corporation, or
its permitted registered assigns ("Holder"), is entitled, subject
to the terms and conditions of this Warrant, at any time or from
time to time after the issuance date of this Warrant (the
"Effective Date"), and before 5:00 p.m. Pacific Time on the fifth
anniversary of the Effective Date (the "Expiration Date"), to
purchase from Thrustmaster, Inc. an Oregon corporation (the
"Company"), two hundred thousand (200,000) shares of Common Stock
of the Company at a price per share equal to 85% of the average
closing price of a share of the Company's Common Stock over the
thirty (30) consecutive trading days prior to the Effective Date,
as reported on the Nasdaq National Market (the "Purchase Price").
Both the number of shares of Common Stock purchasable upon
exercise of this Warrant and the Purchase Price are subject to
adjustment and change as provided herein.
1. CERTAIN DEFINITIONS. As used in this Warrant the following
terms shall have the following respective meanings:
1.1. "Fair Market Value" of a share of Common Stock as of a
particular date shall mean:
(a) If traded on a securities exchange or the Nasdaq
National Market, the Fair Market Value shall be deemed to be the
average of the closing prices of the Common Stock of the Company
on such exchange or market over the five (5) trading days ending
immediately prior to the applicable date of valuation;
(b) If actively traded over-the-counter, the Fair
Market Value shall be deemed to be the average of the closing bid
prices over the thirty (30)-day period ending immediately prior
to the applicable date of valuation; and
<PAGE> 2 INTEL/THRUSTMASTER CONFIDENTIAL
(c) If there is no active public market, the Fair
Market Value shall be the value thereof, as agreed upon by the
Company and the Holder; provided, however, that if the Company
and the Holder cannot agree on such value, such value shall be
determined by an independent valuation firm experienced in
valuing businesses such as the Company and jointly selected in
good faith by the Company and the Holder. Fees and expenses of
the valuation firm shall be paid for by the Company.
1.2. "HSR Act" shall mean the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended.
1.3. "Registered Holder" shall mean any Holder in whose name
this Warrant is registered upon the books and records maintained
by the Company.
1.4. "Warrant" as used herein, shall include this Warrant
and any warrant delivered in substitution or exchange therefor as
provided herein.
1.5. "Common Stock" shall mean the Common Stock of the
Company and any other securities at any time receivable or
issuable upon exercise of this Warrant.
2. EXERCISE OF WARRANT
2.1. Payment. Subject to compliance with the terms and
conditions of this Warrant and applicable securities laws, this
Warrant may be exercised, in whole or in part at any time or from
time to time, on or before the Expiration Date by the delivery
(including, without limitation, delivery by facsimile) of the
form of Notice of Exercise attached hereto as Exhibit 1 (the
"Notice of Exercise"), duly executed by the Holder, at the
principal office of the Company, and as soon as practicable after
such date, surrendering
(a) this Warrant at the principal office of the
Company, and
(b) payment, (i) in cash (by check) or by wire
transfer, (ii) by cancellation by the Holder of indebtedness of
the Company to the Holder; or (iii) by a combination of (i) and
(ii), of an amount equal to the product obtained by multiplying
the number of shares of Common Stock being purchased upon such
exercise by the then effective Purchase Price (the "Exercise
Amount"), except that if Holder is subject to HSR Act
Restrictions (as defined in Section 2.5 below), the Exercise
Amount shall be paid to the Company within five (5) business days
of the termination of all HSR Act Restrictions.
2.2. Net Issue Exercise. In lieu of the payment methods set
forth in Section 2.1(b) above, the Holder may elect to exchange
all or some of this Warrant for shares of Common Stock equal to
the value of the amount of the Warrant being exchanged on the
date of exchange. If Holder elects to exchange this Warrant as
provided in this Section 2.2, Holder shall tender to the Company
the Warrant for the amount
<PAGE> 3 INTEL/THRUSTMASTER CONFIDENTIAL
being exchanged, along with written notice of Holder's election
to exchange some or all of the Warrant, and the Company shall
issue to Holder the number of shares of the Common Stock computed
using the following formula:
X = Y(A-B)
------
A
Where X = the number of shares of Common Stock to be issued
to Holder.
Y = the number of shares of Common Stock purchasable under
the amount of the Warrant being exchanged (as adjusted to
the date of such calculation).
A = the Fair Market Value of one share of the Common Stock.
B = Purchase Price (as adjusted to the date of such
calculation).
2.3. "Easy Sale" Exercise. In lieu of the payment methods
set forth in Section 2.1(b) above, when permitted by law and
applicable regulations (including Nasdaq and NASD rules), the
Holder may pay the Exercise Amount through a "same day sale"
commitment from the Holder (and if applicable a broker-dealer
that is a member of the National Association of Securities
Dealers (a "NASD Dealer")), whereby the Holder irrevocably elects
to exercise this Warrant and to sell at least that number of
Shares so purchased to pay the Exercise Amount (and up to all of
the Shares so purchased) and the Holder (or, if applicable, the
NASD Dealer) commits upon sale (or, in the case of the NASD
Dealer, upon receipt) of such Shares to forward the Exercise
Amount directly to the Company, with any sale proceeds in excess
of the Exercise Amount being for the benefit of the Holder.
2.4. Stock Certificates; Fractional Shares. As soon as
practicable on or after the date of any exercise of this Warrant,
the Company shall issue and deliver to the person or persons
entitled to receive the same a certificate or certificates for
the number of whole shares of Common Stock issuable upon such
exercise, together with cash in lieu of any fraction of a share
equal to such fraction of the current Fair Market Value of one
whole share of Common Stock as of such date of exercise. No
fractional shares or scrip representing fractional shares shall
be issued upon an exercise of this Warrant.
2.5. HSR Act. The Company hereby acknowledges that exercise
of this Warrant by Holder may subject the Company and/or the
Holder to the filing requirements of the HSR Act and that Holder
may be prevented from exercising this Warrant until the
expiration or early termination of all waiting periods imposed by
the HSR Act ("HSR Act Restrictions"). If on or before the
Expiration Date Holder has sent the
<PAGE> 4 INTEL/THRUSTMASTER CONFIDENTIAL
Notice of Exercise to Company and Holder has not been able to
complete the exercise of this Warrant prior to the Expiration
Date because of HSR Act Restrictions, the Holder shall be
entitled to complete the process of exercising this Warrant in
accordance with the procedures contained herein notwithstanding
the fact that completion of the exercise of this Warrant would
take place after the Expiration Date.
2.6. Partial Exercise; Effective Date of Exercise. In case
of any partial exercise of this Warrant, the Company shall cancel
this Warrant upon surrender hereof and shall execute and deliver
a new Warrant of like tenor and date for the balance of the
shares of Common Stock purchasable hereunder. This Warrant shall
be deemed to have been exercised immediately prior to the close
of business on the date of its surrender for exercise as provided
above. However, if Holder is subject to HSR Act filing
requirements this Warrant shall be deemed to have been exercised
on the date immediately following the date of the expiration of
all HSR Act Restrictions. The person entitled to receive the
shares of Common Stock issuable upon exercise of this Warrant
shall be treated for all purposes as the holder of record of such
shares as of the close of business on the date the Holder is
deemed to have exercised this Warrant.
3. VALID ISSUANCE: TAXES. All shares of Common Stock issued
upon the exercise of this Warrant shall be validly issued, fully
paid and non-assessable, and the Company shall pay all taxes and
other governmental charges that may be imposed in respect of the
issue or delivery thereof. The Company shall not be required to
pay any tax or other charge imposed in connection with any
transfer involved in the issuance of any certificate for shares
of Common Stock in any name other than that of the Registered
Holder of this Warrant, and in such case the Company shall not be
required to issue or deliver any stock certificate or security
until such tax or other charge has been paid, or it has been
established to the Company's reasonable satisfaction that no tax
or other charge is due.
4. ADJUSTMENT OF PURCHASE PRICE AND NUMBER OF SHARES. The
number of shares of Common Stock issuable upon exercise of this
Warrant (or any shares of stock or other securities or property
receivable or issuable upon exercise of this Warrant) and the
Purchase Price are subject to adjustment upon occurrence of the
following events:
4.1. Adjustment for Stock Splits, Stock Subdivisions or
Combinations of Shares. The Purchase Price of this Warrant shall
be proportionally decreased and the number of shares of Common
Stock issuable upon exercise of this Warrant (or any shares of
stock or other securities at the time issuable upon exercise of
this Warrant) shall be proportionally increased to reflect any
stock split or subdivision of the Company's Common Stock. The
Purchase Price of this Warrant shall be proportionally increased
and the number of shares of Common Stock issuable upon exercise
of this Warrant (or any shares of stock or other securities at
the time issuable upon exercise of this Warrant) shall be
proportionally decreased to reflect any combination of the
Company's Common Stock.
<PAGE> 5 INTEL/THRUSTMASTER CONFIDENTIAL
4.2. Adjustment for Dividends or Distributions of Stock or
Other Securities or Property. In case the Company shall make or
issue, or shall fix a record date for the determination of
eligible holders entitled to receive, a dividend or other
distribution with respect to the Common Stock (or any shares of
stock or other securities at the time issuable upon exercise of
the Warrant) payable in (a) securities of the Company or (b)
assets (excluding cash dividends paid or payable solely out of
retained earnings), then, in each such case, the Holder of this
Warrant on exercise hereof at any time after the consummation,
effective date or record date of such dividend or other
distribution, shall receive, in addition to the shares of Common
Stock (or such other stock or securities) issuable on such
exercise prior to such date, and without the payment of
additional consideration therefor, the securities or such other
assets of the Company to which such Holder would have been
entitled upon such date if such Holder had exercised this Warrant
on the date hereof and had thereafter, during the period from the
date hereof to and including the date of such exercise, retained
such shares and all such additional securities or other assets
distributed with respect to such shares as aforesaid during such
period giving effect to all adjustments called for by this
Section 4.
4.3. Reclassification. If the Company, by reclassification
of securities or otherwise, shall change any of the securities as
to which purchase rights under this Warrant exist into the same
or a different number of securities of any other class or
classes, this Warrant shall thereafter represent the right to
acquire such number and kind of securities as would have been
issuable as the result of such change with respect to the
securities that were subject to the purchase rights under this
Warrant immediately prior to such reclassification or other
change, and the Purchase Price therefor shall be appropriately
adjusted, all subject to further adjustment as provided in this
Section 4. No adjustment shall be made pursuant to this Section
4.3 upon any conversion or redemption of the Common Stock which
is the subject of Section 4.5.
4.4. Adjustment for Capital Reorganization, Merger or
Consolidation. In case of any capital reorganization of the
capital stock of the Company (other than a combination,
reclassification, exchange or subdivision of shares otherwise
provided for herein), or any merger or consolidation of the
Company with or into another corporation, or the sale of all or
substantially all the assets of the Company then, and in each
such case, as a part of such reorganization, merger,
consolidation, sale or transfer, lawful provision shall be made
so that the Holder of this Warrant shall thereafter be entitled
to receive upon exercise of this Warrant, during the period
specified herein and upon payment of the Purchase Price then in
effect, the number of shares of stock or other securities or
property of the successor corporation resulting from such
reorganization, merger, consolidation, sale or transfer that a
holder of the shares deliverable upon exercise of this Warrant
would have been entitled to receive in such reorganization,
consolidation, merger, sale or transfer if this Warrant had been
exercised immediately before such reorganization, merger,
consolidation, sale or transfer,
<PAGE> 6 INTEL/THRUSTMASTER CONFIDENTIAL
all subject to further adjustment as provided in this Section 4.
The foregoing provisions of this Section 4.4 shall similarly
apply to successive reorganizations, consolidations, mergers,
sales and transfers and to the stock or securities of any other
corporation that are at the time receivable upon the exercise of
this Warrant. If the per-share consideration payable to the
Holder hereof for shares in connection with any such transaction
is in a form other than cash or marketable securities, then the
value of such consideration shall be determined in good faith by
the Company's Board of Directors. In all events, appropriate
adjustment (as determined in good faith by the Company's Board of
Directors) shall be made in the application of the provisions of
this Warrant with respect to the rights and interests of the
Holder after the transaction, to the end that the provisions of
this Warrant shall be applicable after that event, as near as
reasonably may be, in relation to any shares or other property
deliverable after that event upon exercise of this Warrant.
4.5. Conversion of Common Stock. In case all or any portion
of the authorized and outstanding shares of Common Stock of the
Company are redeemed or converted or reclassified into other
securities or property pursuant to the Company's Articles of
Incorporation or otherwise, or the Common Stock otherwise ceases
to exist, then, in such case, the Holder of this Warrant, upon
exercise hereof at any time after the date on which the Common
Stock is so redeemed or converted, reclassified or ceases to
exist (the "Termination Date"), shall receive, in lieu of the
number of shares of Common Stock that would have been issuable
upon such exercise immediately prior to the Termination Date, the
securities or property that would have been received if this
Warrant had been exercised in full and the Common Stock received
thereupon had been simultaneously converted immediately prior to
the Termination Date, all subject to further adjustment as
provided in this Warrant. Additionally, the Purchase Price shall
be immediately adjusted to equal the quotient obtained by
dividing (x) the aggregate Purchase Price of the maximum number
of shares of Common Stock for which this Warrant was exercisable
immediately prior to the Termination Date by (y) the number of
shares of Common Stock of the Company for which this Warrant is
exercisable immediately after the Termination Date, all subject
to further adjustment as provided herein.
5. CERTIFICATE AS TO ADJUSTMENTS. In each case of any
adjustment in the Purchase Price, or number or type of shares
issuable upon exercise of this Warrant, the Chief Financial
Officer or Controller of the Company shall compute such
adjustment in accordance with the terms of this Warrant and
prepare a certificate setting forth such adjustment and showing
in detail the facts upon which such adjustment is based,
including a statement of the adjusted Purchase Price. The
Company shall promptly send (by facsimile and by either first
class mail, postage prepaid or overnight delivery) a copy of each
such certificate to the Holder.
6. LOSS OR MUTILATION. Upon receipt of evidence reasonably
satisfactory to the Company of the ownership of and the loss,
theft, destruction or mutilation of this
<PAGE> 7 INTEL/THRUSTMASTER CONFIDENTIAL
Warrant, and of indemnity reasonably satisfactory to it, and (in
the case of mutilation) upon surrender and cancellation of this
Warrant, the Company will execute and deliver in lieu thereof a
new Warrant of like tenor as the lost, stolen, destroyed or
mutilated Warrant.
7. RESERVATION OF COMMON STOCK. The Company hereby covenants
that at all times there shall be reserved for issuance and
delivery upon exercise of this Warrant such number of shares of
Common Stock or other shares of capital stock of the Company as
are from time to time issuable upon exercise of this Warrant and,
from time to time, will take all steps necessary to amend its
Articles of Incorporation to provide sufficient reserves of
shares of Common Stock issuable upon exercise of this Warrant.
All such shares shall be duly authorized, and when issued upon
such exercise, shall be validly issued, fully paid and non-
assessable, free and clear of all liens, security interests,
charges and other encumbrances or restrictions on sale and free
and clear of all preemptive rights, except encumbrances or
restrictions arising under federal or state securities laws.
Issuance of this Warrant shall constitute full authority to the
Company's officers who are charged with the duty of executing
stock certificates to execute and issue the necessary
certificates for shares of Common Stock upon the exercise of this
Warrant.
8. TRANSFER AND EXCHANGE. Subject to the terms and conditions
of this Warrant and compliance with all applicable securities
laws, this Warrant and all rights hereunder may be transferred to
any Registered Holder's parent, subsidiary or affiliate, in whole
or in part, on the books of the Company maintained for such
purpose at the principal office of the Company referred to above,
by the Registered Holder hereof in person, or by duly authorized
attorney, upon surrender of this Warrant properly endorsed and
upon payment of any necessary transfer tax or other governmental
charge imposed upon such transfer. Upon any permitted partial
transfer, the Company will issue and deliver to the Registered
Holder a new Warrant or Warrants with respect to the shares of
Common Stock not so transferred. Each taker and holder of this
Warrant, by taking or holding the same, consents and agrees that
when this Warrant shall have been so endorsed, the person in
possession of this Warrant may be treated by the Company, and all
other persons dealing with this Warrant, as the absolute owner
hereof for any purpose and as the person entitled to exercise the
rights represented hereby, any notice to the contrary
notwithstanding; provided, however that until a transfer of this
Warrant is duly registered on the books of the Company, the
Company may treat the Registered Holder hereof as the owner for
all purposes.
9. RESTRICTIONS ON TRANSFER. The Holder, by acceptance hereof,
agrees that, absent an effective registration statement filed
with the Securities and Exchange Commission (the "SEC") under the
Securities Act covering the disposition or sale of this Warrant
or the Common Stock issued or issuable upon exercise hereof, as
the case may be, and registration or qualification under
applicable state securities laws, such Holder will not sell,
transfer, pledge, or hypothecate any or all such Warrants or such
Common Stock, as the case may be, unless either (i) the Company
has received an opinion of counsel, in form and substance
reasonably satisfactory to the Company, to the effect that
<PAGE> 8 INTEL/THRUSTMASTER CONFIDENTIAL
such registration is not required in connection with such
disposition or (ii) the sale of such securities is made pursuant
to SEC Rule 144.
10. COMPLIANCE WITH SECURITIES LAWS. By acceptance of this
Warrant, the Holder hereby represents, warrants and covenants
that any shares of stock purchased upon exercise of this Warrant
shall be acquired for investment only and not with a view to, or
for sale in connection with, any distribution thereof; that the
Holder has had such opportunity as such Holder has deemed
adequate to obtain from representatives of the Company such
information as is necessary to permit the Holder to evaluate the
merits and risks of its investment in the Company; that the
Holder is able to bear the economic risk of holding such shares
as may be acquired pursuant to the exercise of this Warrant for
an indefinite period; that the Holder understands that the shares
of stock acquired pursuant to the exercise of this Warrant will
not be registered under the 1933 Act (unless otherwise required
pursuant to exercise by the Holder of the registration rights, if
any, granted to the Registered Holder) and will be "restricted
securities" within the meaning of Rule 144 under the 1933 Act and
that the exemption from registration under Rule 144 will not be
available for at least one (1) year from the date of exercise of
this Warrant, subject to any special treatment by the SEC for
exercise of this Warrant pursuant to Section 2.2, and even then
will not be available unless a public market then exists for the
stock, adequate information concerning the Company is then
available to the public, and other terms and conditions of Rule
144 are complied with; and that all stock certificates
representing shares of stock issued to the Holder upon exercise
of this Warrant or upon conversion of such shares may have
affixed thereto a legend substantially in the following form:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR
UNDER THE SECURITIES LAWS OF ANY STATE. THESE SECURITIES ARE
SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT
BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT AND
THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR
EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY MAY BE
REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN
INDEFINITE PERIOD OF TIME. THE ISSUER OF THESE SECURITIES MAY
REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY
TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE
IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE SECURITIES
LAWS.
11. NO RIGHTS OR LIABILITIES AS STOCKHOLDERS. This Warrant
shall not entitle the Holder to any voting rights or other rights
as a stockholder of the Company. In the absence of affirmative
action by such Holder to purchase Common Stock by exercise of
this Warrant, no provisions of this Warrant, and no enumeration
herein of the rights or privileges of the Holder hereof shall
cause such Holder hereof to be a stockholder of the Company for
any purpose.
<PAGE> 9 INTEL/THRUSTMASTER CONFIDENTIAL
12. REGISTRATION RIGHTS. All shares of Common Stock issuable
upon exercise of this Warrant shall be "Registrable Securities"
or such other definition of securities entitled to registration
rights pursuant to Exhibit 3 to this Warrant.
13. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
hereby represents and warrants to Holder that:
13.1. Due Authorization; Consents. All corporate action on
the part of the Company, its officers, directors and shareholders
necessary for (a) the authorization, execution and delivery of,
and the performance of all obligations of the Company under, this
Warrant, and (b) the authorization, issuance, reservation for
issuance and delivery of all of the Common Stock issuable upon
exercise of this Warrant, has been duly taken. This Warrant
constitutes a valid and binding obligation of the Company
enforceable in accordance with its terms, subject, as to
enforcement of remedies, to applicable bankruptcy, insolvency,
moratorium, reorganization and similar laws affecting creditors'
rights generally and to general equitable principles. All
consents, approvals and authorizations of, and registrations,
qualifications and filings with, any federal or state
governmental agency, authority or body, or any third party,
required in connection with the execution, delivery and
performance of this Warrant and the consummation of the
transactions contemplated hereby and thereby have been obtained.
13.2. Organization. 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 to
own, lease and operate its property and to carry on its business
as now being conducted and as currently proposed to be conducted.
13.3. SEC Reports; Financial Statements.
(a) The Company has duly filed with the SEC the
Company's annual report on Form 10-K for the year ended December
31, 1998 and its quarterly reports on Form 10-Q for the quarters
ended March 31,1999 and June 30, 1999 (to be filed on or before
August 15, 1999) (collectively, the "Thrustmaster SEC Reports").
As of their respective filing dates, the Thrustmaster SEC Reports
complied in all material respects with the requirements of the
Securities Exchange Act of 1934, as amended, and none of the SEC
Documents contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary to make the statements made therein, in light of the
circumstances in which they were made, not misleading, except to
the extent corrected by a subsequently filed document with the
SEC.
(b) Each of the consolidated financial statements
(including, in each case, any related notes) contained in the
Thrustmaster SEC Reports complied as to form in all material
respects with the applicable published rules and regulations of
the SEC with respect thereto, was prepared in accordance
<PAGE> 10 INTEL/THRUSTMASTER CONFIDENTIAL
with generally accepted accounting principles applied on a
consistent basis throughout the periods involved (except as may
be indicated in the notes to such financial statements or, in the
case of unaudited statements, as permitted for by Form 10-Q) and
presented fairly, in all material respects, the consolidated
financial position of the Company and its subsidiaries as at the
respective dates and the consolidated results of its operations
and cash flows for the periods indicated, except that the
unaudited interim financial statements are subject to normal and
recurring year-end adjustments which are not expected to be
material in amount.
13.4. Capitalization. The authorized capital stock of
the Company consists of 25,000,000 shares of Common Stock and
5,000,000 shares of preferred stock, $.001 par value (the
"Preferred Stock"). As of June 30, 1999: (i) 4,874,019 shares
of Common Stock were issued and outstanding, all of which are
validly issued, fully paid and nonassessable; (ii) 2,200,000
shares of Common Stock were reserved for issuance under the
Company's 1994 and 1998 stock option plans, 985,388 of which
shares were subject to options outstanding on such date; (iii)
338,393 shares of Common Stock were reserved for issuance upon
exercise of outstanding warrants; and (v) no shares of Preferred
Stock were issued and outstanding. No material change in such
capitalization has occurred between June 30, 1999and the issuance
date of this Warrant.
13.5. Valid Issuance of Stock. The outstanding shares of
the capital stock of the Company are duly and validly issued,
fully paid and non-assessable, and such shares , and all
outstanding options and other securities of the Company, have
been issued in full compliance with the registration and
prospectus delivery requirements of the Securities Act and the
registration and qualification requirements of all applicable
state securities laws, or in compliance with applicable
exemptions therefrom, and all other provisions of applicable
federal and state securities laws, including without limitation,
anti-fraud provisions.
13.6. Governmental Consents. All consents, approvals,
orders, authorizations or registrations, qualifications,
declarations or filings with any federal or state governmental
authority on the part of the Company required in connection with
the consummation of the transactions contemplated herein shall
have been obtained prior to and be effective as of the Effective
Date.
14. INFORMATION RIGHTS. The Company shall deliver to each
holder of this Warrant or any securities issued (directly or
indirectly) upon exercise hereof, upon request, copies of the
Company's reports on Forms 10-K, 10-Q, and 8-K and Annual Reports
to Shareholders promptly after such documents are filed with the
SEC.
15. NOTICES. Except as may be otherwise provided herein, all
notices, requests, waivers and other communications made pursuant
to this Agreement shall be in writing and shall be conclusively
deemed to have been duly given (a) when hand delivered to the
other party; (b) when received when sent by facsimile at the
address and number set forth
<PAGE> 11 INTEL/THRUSTMASTER CONFIDENTIAL
below; (c) three business days after deposit in the U.S. mail
with first class or certified mail receipt requested postage
prepaid and addressed to the other party as set forth below; or
(d) the next business day after deposit with a national overnight
delivery service, postage prepaid, addressed to the parties as
set forth below with next-business-day delivery guaranteed,
provided that the sending party receives a confirmation of
delivery from the delivery service provider.
To Holder: To the Company:
Intel Corporation Thrustmaster, Inc.
2200 Mission College Blvd. 7175 NW Evergreen Parkway,
Santa Clara, CA 95052 Suite 400
Attn: Portfolio Manager Hillsboro, Oregon 97124
Fax Number: (408) 765-6038 Attn: Frank G. Hausmann,
President and CEO
Fax Number: 503-615-3297
With copies to: With copies to:
Intel Corporation Perkins Coie LLP
2200 Mission College Blvd. 1211 SW Fifth Avenue, Ste 1500
Santa Clara, CA 95052 Portland, OR 97204
Attn: General Counsel Attn: Patrick J. Simpson
Fax Number: (408) 765-1859 Fax: (503) 727-2222
Each person making a communication hereunder by facsimile shall
promptly confirm by telephone to the person to whom such
communication was addressed each communication made by it by
facsimile pursuant hereto but the absence of such confirmation
shall not affect the validity of any such communication. A party
may change or supplement the addresses given above, or designate
additional addresses, for purposes of this Section 15 by giving
the other party written notice of the new address in the manner
set forth above.
16. HEADINGS. The headings in this Warrant are for purposes of
convenience in reference only, and shall not be deemed to
constitute a part hereof.
17. LAW GOVERNING. This Warrant shall be construed and enforced
in accordance with, and governed by, the laws of the State of
Delaware.
18. NO IMPAIRMENT. The Company will not, by amendment of its
Articles of Incorporation or bylaws, or through reorganization,
consolidation, merger, dissolution, issue or sale of securities,
sale of assets or any other voluntary action, avoid or seek to
avoid the observance or performance of any of the terms of this
Warrant, but will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such
action as may be necessary or appropriate in order to protect the
rights of the Registered Holder of this Warrant against
impairment. Without limiting the generality of the foregoing,
the Company (a) will not increase the par value of any shares of
stock issuable upon the exercise of this Warrant above the amount
payable therefor upon such exercise, and (b) will take all such
action as may be necessary or appropriate in order that the
<PAGE> 12 INTEL/THRUSTMASTER CONFIDENTIAL
Company may validly and legally issue fully paid and non-
assessable shares of Common Stock upon exercise of this Warrant.
19. NOTICES OF RECORD DATE. In case:
19.1. the Company shall take a record of the holders of its
Common Stock (or other stock or securities at the time receivable
upon the exercise of this Warrant), for the purpose of entitling
them to receive any dividend or other distribution, or any right
to subscribe for or purchase any shares of stock of any class or
any other securities or to receive any other right; or
19.2. of any consolidation or merger of the Company with or
into another corporation, any capital reorganization of the
Company, any reclassification of the Capital Stock of the
Company, or any conveyance of all or substantially all of the
assets of the Company to another corporation in which holders of
the Company's stock are to receive stock, securities or property
of another corporation; or
19.3. of any voluntary dissolution, liquidation or winding-
up of the Company; or
19.4. of any redemption or conversion of all outstanding
Common Stock;
then, and in each such case, the Company will mail or cause to be
mailed to the Registered Holder of this Warrant a notice
specifying, as the case may be, (i) the date on which a record is
to be taken for the purpose of such dividend, distribution or
right, or (ii) the date on which such reorganization,
reclassification, consolidation, merger, conveyance, dissolution,
liquidation, winding-up, redemption or conversion is to take
place, and the time, if any is to be fixed, as of which the
holders of record of Common Stock or (such stock or securities as
at the time are receivable upon the exercise of this Warrant),
shall be entitled to exchange their shares of Common Stock (or
such other stock or securities), for securities or other property
deliverable upon such reorganization, reclassification,
consolidation, merger, conveyance, dissolution, liquidation or
winding-up. Such notice shall be delivered at least thirty (30)
days prior to the date therein specified.
20. SEVERABILITY. If any term, provision, covenant or
restriction of this Warrant is held by a court of competent
jurisdiction to be invalid, void or unenforceable, the remainder
of the terms, provisions, covenants and restrictions of this
Warrant shall remain in full force and effect and shall in no way
be affected, impaired or invalidated.
21. COUNTERPARTS. For the convenience of the parties, any
number of counterparts of this Warrant may be executed by the
parties hereto and each such executed counterpart shall be, and
shall be deemed to be, an original instrument.
22. NO INCONSISTENT AGREEMENTS. The Company will not on or
after the date of this Warrant enter into any agreement with
respect to its securities which is inconsistent with the rights
granted to the Holders of this Warrant or otherwise conflicts
with the provisions hereof. The rights granted to the Holders
hereunder do not in any way conflict
<PAGE> 13 INTEL/THRUSTMASTER CONFIDENTIAL
with and are not inconsistent with the rights granted to holders
of the Company's securities under any other agreements, except
rights that have been waived.
23. SATURDAYS, SUNDAYS AND HOLIDAYS. If the Expiration Date
falls on a Saturday, Sunday or legal holiday, the Expiration Date
shall automatically be extended until 5:00 p.m. the next business
day.
24. CONFIDENTIALITY. Confidential or proprietary information
disclosed by either party under this Agreement, as well as the
terms of this Agreement and Holder's investment in the Company
(subject to Section 25 below), shall be considered confidential
information (the "Confidential Information") and shall not be
disclosed by the Company or Holder to any third party. The
Company or Holder shall immediately notify the other party of any
information that comes to its attention which might indicate that
there has been a loss of confidentiality with respect to the
Confidential Information. In the event that the Company or
Holder is requested or becomes legally compelled (by statute or
regulation or by oral questions, interrogatories, request for
information or documents, subpoena, criminal or civil
investigative demand or similar process, including without
limitation, in connection with any public or private offering of
the Company's capital stock) to disclose any of the Confidential
Information, such party (the "Disclosing Party") shall provide
the other party (the "Non-Disclosing Party") with prompt written
notice of that fact so that the other party may seek (with the
cooperation and reasonable efforts of the Disclosing Party) a
protective order, confidential treatment or other appropriate
remedy. In such event, the Disclosing Party shall furnish only
that portion of the Confidential Information which is legally
required and shall exercise reasonable efforts to obtain reliable
assurance that confidential treatment will be accorded the
Confidential Information to the extent reasonably requested by
the Non-Disclosing Party. The provisions of this Section 24
shall be in addition to, and not in substitution for, the
provisions of any separate nondisclosure agreement executed by
the parties hereto with respect to the transaction contemplated
hereby.
25. PUBLIC ANNOUNCEMENTS. The Company shall not issue any press
release or make any other announcement to the general public or
in any professional or trade publication regarding Holder, this
Agreement or any of the terms hereof without the prior written
consent of Holder, which consent may be withheld at the sole
discretion of Holder. Notwithstanding the foregoing, Holder may
disclose its investment in the Company and the terms thereof to
third parties or to the public at its discretion, and the Company
shall have the right to disclose to third parties any such
information disclosed by Holder in a press release or other
public announcement. If the Company or Holder determines that
any disclosure not otherwise authorized by this Agreement is
required by law or regulation, then the provisions of Section 24
regarding disclosure of Confidential Information by a Disclosing
Party shall govern.
26. DISPUTE RESOLUTION. The parties agree to negotiate in good
faith to resolve any dispute between them regarding this Warrant.
If the negotiations do not resolve the dispute to the reasonable
satisfaction of both parties, then each party shall nominate one
senior officer of the rank of Vice President or higher as its
representative. These
<PAGE> 14 INTEL/THRUSTMASTER CONFIDENTIAL
representatives shall, within thirty (30) days of a written
request by either party to call such a meeting, meet in person
and alone (except for one assistant for each party) and shall
attempt in good faith to resolve the dispute. If the disputes
cannot be resolved by such senior managers in such meeting, the
parties agree that they shall, if requested in writing by either
party, meet within thirty (30) days after such written
notification for one day with an impartial mediator and consider
dispute resolution alternatives other than litigation. If an
alternative method of dispute resolution is not agreed upon
within thirty (30) days after the one day mediation, either party
may begin litigation proceedings. This procedure shall be a
prerequisite before taking any additional action hereunder.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
<PAGE> 15 INTEL/THRUSTMASTER CONFIDENTIAL
IN WITNESS WHEREOF, the parties hereto have executed this
Warrant as of the Effective Date.
INTEL CORPORATION THRUSTMASTER, INC.
/s/Arvind Sodhani /s/F.G. Hausmann, Jr.
- ------------------------- -------------------------
By By
Arvind Sodhani F.G. Hausmann, Jr.
- ------------------------- -------------------------
Printed Name Printed Name
Vice President and Treasurer President and CEO
- ------------------------- -------------------------
Title Title
SIGNATURE PAGE TO WARRANT TO PURCHASE COMMON STOCK
<PAGE> 16 INTEL/THRUSTMASTER CONFIDENTIAL
EXHIBIT 1
NOTICE OF EXERCISE
(To be executed upon exercise of Warrant)
THRUSTMASTER, INC.
The undersigned hereby irrevocably elects to exercise the right
of purchase represented by the within Warrant Certificate for,
and to purchase thereunder, the securities Thrustmaster, Inc., as
provided for therein, and (check the applicable box):
O tenders herewith payment of the exercise price in full in
the form of cash or a certified or official bank check in
same-day funds in the amount of $____________ for _________
such securities.
O Elects the [Net Issue Exercise][Easy Sale Exercise] option
pursuant to Section 2.2 or Section 2.3. of the Warrant, and
accordingly requests delivery of a net of _____________ of
such securities.
Please issue a certificate or certificates for such securities in
the name of, and pay any cash for any fractional share to (please
print name, address and social security number):
Name: ------------------------------------------------------
Address: ------------------------------------------------------
Signature: ----------------------------------------------------
Note: The above signature should correspond exactly with the
name on the first page of this Warrant Certificate or with the
name of the assignee appearing in the assignment form below.
If said number of shares shall not be all the shares purchasable
under the within Warrant Certificate, a new Warrant Certificate
is to be issued in the name of said undersigned for the balance
remaining of the shares purchasable thereunder rounded up to the
next higher whole number of shares.
<PAGE> 17 INTEL/THRUSTMASTER CONFIDENTIAL
EXHIBIT 2
ASSIGNMENT
(To be executed only upon assignment of Warrant Certificate)
For value received, hereby sells, assigns and transfers unto
______________________ the within Warrant Certificate, together
with all right, title and interest therein, and does hereby
irrevocably constitute and appoint ______________________
attorney, to transfer said Warrant Certificate on the books of
the within-named Company with respect to the number of Warrants
set forth below, with full power of substitution in the premises:
Name(s) of Assignee(s) Address # of Warrants
--------------- --------------- ---------------
--------------- --------------- ---------------
--------------- --------------- ---------------
--------------- --------------- ---------------
And if said number of Warrants shall not be all the Warrants
represented by the Warrant Certificate, a new Warrant Certificate
is to be issued in the name of said undersigned for the balance
remaining of the Warrants registered by said Warrant Certificate.
Name: ------------------------------------------------------
Dated: ------------------------------------------------------
Signature: ----------------------------------------------------
Notice: The signature to the foregoing Assignment must
correspond to the name as written upon the face of this security
in every particular, without alteration or any change whatsoever;
signature(s) must be guaranteed by an eligible guarantor
institution (banks, stock brokers, savings and loan associations
and credit unions with membership in an approved signature
guarantee medallion program) pursuant to Securities and Exchange
Commission Rule 17Ad-15.
<PAGE> 18 INTEL/THRUSTMASTER CONFIDENTIAL
EXHIBIT 3
1. REGISTRATION RIGHTS.
1.1 Definitions. For purposes of this Section 1:
(a) Registration. The terms "register," "registered,"
and "registration" refer to a registration effected by preparing
and filing a registration statement in compliance with the
Securities Act of 1933, as amended, (the "Securities Act"), and
the declaration or ordering of effectiveness of such registration
statement
(b) Registrable Securities. The term "Registrable
Securities" means: (1) any Common Stock of the Company issued or
to be issued upon exercise of the Warrant, (2) any shares of
Common Stock of the Company issued as (or issuable upon the
conversion or exercise of any warrant, right or other security
which is issued as) a dividend or other distribution with respect
to, or in exchange for or in replacement of, any shares of Common
Stock described in clause (1) of this subsection (b) and (3) any
other Common Stock of the Company owned or hereafter acquired by
the Investor, including without limitation those shares of Common
Stock of the Company issuable upon exercise of that Warrant to
purchase Common Stock of the Company held by Holder dated as of
May 28, 1998, as amended. Notwithstanding the foregoing,
"Registrable Securities" shall exclude any Registrable Securities
sold by a person in a transaction in which rights under this
Section 1 are not assigned in accordance with this Agreement or
any Registrable Securities sold in a public offering, whether
sold pursuant to Rule 144 promulgated under the Securities Act,
or in a registered offering, or otherwise.
(c) Registrable Securities Then Outstanding. The
number of shares of "Registrable Securities then outstanding"
shall mean the number of shares of Common Stock of the Company
that are Registrable Securities and (l) are then issued and
outstanding or (2) are then issuable pursuant to an exercise of
the Warrant or pursuant to conversion of securities issuable
pursuant to an exercise of the Warrant.
(d) Holder. For purposes of this Section 1, the term
"Holder" means any person owning of record Registrable Securities
that have not been sold to the public or pursuant to Rule 144
promulgated under the Securities Act or any permitted assignee of
record of such Registrable Securities to whom rights under this
Section 1 have been duly assigned in accordance with this
Agreement.
<PAGE> 19 INTEL/THRUSTMASTER CONFIDENTIAL
(e) Form S-3. The term "Form S-3" means such form
under the Securities Act as is in effect on the date hereof or
any successor registration form under the Securities Act
subsequently adopted by the SEC which permits inclusion or
incorporation of substantial information by reference to other
documents filed by the Company with the SEC.
(f) SEC. The term "SEC" or "Commission" means the
U.S. Securities and Exchange Commission.
1.2 Limitation on Registration Rights. The Holders may not
piggyback on any registration statement initiated pursuant to the
Registration Rights Agreement, dated as of June 9, 1999, among
the Company, Strong River Investment Inc., and Bay Harbor
Investments, Inc. (the "1999 Agreement"). If any Holder elects
to piggyback on any registration statement initiated under the
Representative Warrant Agreement, dated as of March 3, 1995,
among the Company, Cruttenden Roth, and Black & Company, Inc.
(the "1995 Agreement"), then, in the event that an underwriter
requires a limitation on the number of shares that may be
included in such registration statement, such Holder's
Registrable Securities may be excluded first until the Company
has fulfilled its obligations under the 1995 Agreement and the
1999 Agreement with respect to the inclusion of shares
thereunder. If any person or entity having registration rights
under the 1995 Agreement or the 1999 Agreement elects to
piggyback on a registration statement then such person's or
entity's shares will be excluded only after that number of the
Holders' Registrable Securities are excluded so that the Company
does not violate the terms of the 1995 Agreement or the 1999
Agreement.
1.3 Piggyback Registrations. The Company shall notify all
Holders of Registrable Securities in writing at least thirty (30)
days prior to filing any registration statement under the
Securities Act for purposes of effecting a public offering of
securities of the Company (including, but not limited to,
registration statements relating to secondary offerings of
securities of the Company, but excluding registration statements
relating to any registration under Section 1.4 of this Agreement
or to any employee benefit plan or a corporate reorganization)
and will afford each such Holder an opportunity to include in
such registration statement all or any part of the Registrable
Securities then held by such Holder, subject to the provisions of
Section 1.2 above. Each Holder desiring to include in any such
registration statement all or any part of the Registrable
Securities held by such Holder shall within twenty (20) days
after receipt of the above-described notice from the Company, so
notify the Company in writing, and in such notice shall inform
the Company of the number of Registrable Securities such Holder
wishes to include in such registration statement. If a Holder
decides not to include all of its Registrable Securities in any
registration statement thereafter filed by the Company, such
Holder shall nevertheless continue to have the right to include
any Registrable Securities in any subsequent registration
statement or registration statements as may be filed by the
Company with respect to offerings of its securities, all upon the
terms and conditions set forth herein.
<PAGE> 20 INTEL/THRUSTMASTER CONFIDENTIAL
(a) Underwriting. If a registration statement under
which the Company gives notice under this Section 1.3 is for an
underwritten offering, then the Company shall so advise the
Holders of Registrable Securities. In such event, the right of
any such Holder's Registrable Securities to be included in a
registration pursuant to this Section 1.3 shall be conditioned
upon such Holder's participation in such underwriting and the
inclusion of such Holder's Registrable Securities in the
underwriting to the extent provided herein. All Holders
proposing to distribute their Registrable Securities through such
underwriting shall enter into an underwriting agreement in
customary form with the managing underwriter or underwriters
selected for such underwriting (including a market stand-off
agreement of up to 180 days if required by such underwriters).
Notwithstanding any other provision of this Agreement, if the
managing underwriter(s) determine(s) in good faith that marketing
factors require a limitation of the number of shares to be
underwritten, then the managing underwriter(s) may exclude shares
(including up to seventy-five percent (75%) of the Registrable
Securities) from the registration and the underwriting, and the
number of shares that may be included in the registration and the
underwriting shall be allocated, first to the Company, and
second, to each of the Holders requesting inclusion of their
Registrable Securities in such registration statement on a pro
rata basis based on the total number of Registrable Securities
then held by each such Holder; provided, however, that the right
of the underwriters to exclude shares (including Registrable
Securities) from the registration and underwriting as described
above shall be restricted so that (i) the number of Registrable
Securities included in any such registration is not reduced below
twenty-five percent (25%) of the aggregate number of Registrable
Securities for which inclusion has been requested; and (ii) all
shares that are not Registrable Securities and are held by any
other person, including, without limitation, any person who is an
employee, officer or director of the Company (or any subsidiary
of the Company) shall first be excluded from such registration
and underwriting before any Registrable Securities are so
excluded. If any Holder disapproves of the terms of any such
underwriting, such Holder may elect to withdraw therefrom by
written notice to the Company and the underwriter(s), delivered
at least ten (10) business days prior to the effective date of
the registration statement. Any Registrable Securities excluded
or withdrawn from such underwriting shall be excluded and
withdrawn from the registration. For any Holder that is a
partnership, the Holder and the partners and retired partners of
such Holder, or the estates and family members of any such
partners and retired partners and any trusts for the benefit of
any of the foregoing persons, and for any Holder that is a
corporation, the Holder and all corporations that are affiliates
of such Holder, shall be deemed to be a single "Holder," and any
pro rata reduction with respect to such "Holder" shall be based
upon the aggregate amount of shares carrying registration rights
owned by all entities and individuals included in such "Holder,"
as defined in this sentence.
<PAGE> 21 INTEL/THRUSTMASTER CONFIDENTIAL
(b) Expenses. All expenses incurred in connection
with a registration pursuant to this Section 1.3 (excluding
underwriters' and brokers' discounts and commissions relating to
shares sold by the Holders and legal fees of counsel for the
Holders), including, without limitation all federal and "blue
sky" registration, filing and qualification fees, printers' and
accounting fees, and fees and disbursements of counsel for the
Company, shall be borne by the Company.
(c) No Limit on Registrations. Except as otherwise
provided herein, there shall be no limit on the number of times
the Holders may request registration of Registrable Securities
under this Section 1.3.
1.4 Form S-3 Registration. In case the Company shall at
any time after the first anniversary of the date hereof receive
from any Holder or Holders of a majority of all Registrable
Securities then outstanding a written request or requests that
the Company effect a registration on Form S-3 and any related
qualification or compliance with respect to all or a part of the
Registrable Securities owned by such Holder or Holders, then the
Company will:
(a) Notice. Promptly give written notice of the
proposed registration and the Holder's or Holders' request
therefor, and any related qualification or compliance, to all
other Holders of Registrable Securities; and
(b) Registration. As soon as practicable, effect such
registration and all such qualifications and compliances as may
be so requested and as would permit or facilitate the sale and
distribution of all or such portion of such Holders or Holders'
Registrable Securities as are specified in such request, together
with all or such portion of the Registrable Securities of any
other Holder or Holders joining in such request as are specified
in a written request given within twenty (20) days after the
Company provides the notice contemplated by Section 1.4(a);
provided, however, that the Company shall not be obligated to
effect any such registration, qualification or compliance
pursuant to this Section 1.4:
(1) if Form S-3 is not available for such
offering by the Holders:
(2) if the Holders, together with the holders of
any other securities of the Company entitled to inclusion in such
registration, propose to sell Registrable Securities and such
other securities (if any) at an aggregate price to the public of
less than $1,000,000;
<PAGE> 22 INTEL/THRUSTMASTER CONFIDENTIAL
(3) if the Company shall furnish to the Holders a
certificate signed by the President or Chief Executive Officer of
the Company stating that in the good faith judgment of the Board
of Directors of the Company, it would be materially detrimental
to the Company and its shareholders for such Form S-3
Registration to be effected at such time, in which event the
Company shall have the right to defer the filing of the Form S-3
registration statement no more than once during any twelve month
period for a period of not more than ninety (90) days after
receipt of the request of the Holder or Holders under this
Section 1.4;
(4) if the Company has, within the six (6) month
period preceding the date of such request, already effected a
registration under the Securities Act other than a registration
from which the Registrable Securities of Holders have been
excluded (with respect to all or any portion of the Registrable
Securities the Holders requested be included in such
registration) pursuant to the provisions of Section 1.3(a); or
(5) in any particular jurisdiction in which the
Company would be required to qualify to do business or to execute
a general consent to service of process in effecting such
registration, qualification or compliance.
(c) Expenses. The Company shall pay all expenses
incurred in connection with each registration requested pursuant
to this Section 1.4, (excluding underwriters' or brokers'
discounts and commissions relating to shares sold by the Holders
and legal fees of counsel for the Holders), including without
limitation federal and "blue sky" registration, filing and
qualification fees, printers' and accounting fees, and fees and
disbursements of counsel.
(d) Deferral. Notwithstanding the foregoing, if the
Company shall furnish to Holders requesting the filing of a
registration statement pursuant to this Section 1.4, a
certificate signed by the President or Chief Executive Officer of
the Company stating that in the good faith judgment of the Board,
it would be materially detrimental to the Company and its
stockholders for such registration statement to be filed, then
the Company shall have the right to defer such filing for a
period of not more than ninety (90) days after receipt of the
request of the initiating Holders; provided, however, that the
Company may not utilize this right more than once in any twelve
(12) month period.
(e) No Limit on Registrations. Except as otherwise
provided herein, there shall be no limit on the number of times
the Holders may request registration of Registrable Securities
under this Section 1.4.
<PAGE> 23 INTEL/THRUSTMASTER CONFIDENTIAL
1.5 Obligations of the Company. Whenever required to
effect the registration of any Registrable Securities under this
Agreement the Company shall, as expeditiously as reasonably
possible:
(a) Registration Statement. Prepare and file with the
SEC a registration statement with respect to such Registrable
Securities and use its best efforts to cause such registration
statement to become effective, provided, however, that the
Company shall not be required to keep any such registration
statement effective for more than ninety (90) days.
(b) Amendments and Supplements. Prepare and file with
the SEC such amendments and supplements to such registration
statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the
provisions of the Securities Act with respect to the disposition
of all securities covered by such registration statement.
(c) Prospectuses. Furnish to the Holders such number
of copies of a prospectus, including a preliminary prospectus, in
conformity with the requirements of the Securities Act, and such
other documents as they may reasonably request in order to
facilitate the disposition of the Registrable Securities owned by
them that are included in such registration.
(d) Blue Sky. Use its best efforts to register and
qualify the securities covered by such registration statement
under such other securities or Blue Sky laws of such
jurisdictions as shall be reasonably requested by the Holders,
provided that the Company shall not be required in connection
therewith or as a condition thereto to qualify to do business or
to file a general consent to service of process in any such
states or jurisdictions.
(e) Underwriting. In the event of any underwritten
public offering, enter into and perform its obligations under an
underwriting agreement in usual and customary form, with the
managing underwriter(s) of such offering. Each Holder
participating in such underwriting shall also enter into and
perform its obligations under such an agreement.
(f) Notification. Notify each Holder of Registrable
Securities covered by such registration statement at any time
when a prospectus relating thereto is required to be delivered
under the Securities Act of the happening of any event as a
result of which the prospectus included in such registration
statement, as then in effect, includes an untrue statement of a
material fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading in the light of the circumstances then existing.
(g) Opinion and Comfort Letter. Furnish, at the
request of any Holder requesting registration of Registrable
Securities, on the date that such Registrable Securities are
delivered to the underwriters for sale, if such
<PAGE> 24 INTEL/THRUSTMASTER CONFIDENTIAL
securities are being sold through underwriters, or, if such
securities are not being sold through underwriters, on the date
that the registration statement with respect to such securities
becomes effective, (i) an opinion, dated as of such date, of the
counsel representing the Company for the purposes of such
registration, in form and substance as is customarily given to
underwriters in an underwritten public offering and reasonably
satisfactory to a majority in interest of the Holders requesting
registration, addressed to the underwriters, if any, and to the
Holders requesting registration of Registrable Securities and
(ii) a "comfort" letter dated as of such date, from the
independent certified public accountants of the Company, in form
and substance as is customarily given by independent certified
public accountants to underwriters in an underwritten public
offering and reasonably satisfactory to a majority in interest of
the Holders requesting registration, addressed to the
underwriters, if any, and to the Holders requesting registration
of Registrable Securities.
1.6 Furnish Information. It shall be a condition precedent
to the obligations of the Company to take any action pursuant to
Sections 1.3 or 1.4 that the selling Holders shall furnish to the
Company such information regarding themselves, the Registrable
Securities held by them, and the intended method of disposition
of such securities as shall be required to timely effect the
Registration of their Registrable Securities.
1.7 Indemnification. In the event any Registrable
Securities are included in a registration statement under
Sections 1.3 or 1.4:
(a) By the Company. To the extent permitted by law;
the Company will indemnify and hold harmless each Holder, the
partners, officers and directors of each Holder, any underwriter
(as determined in the Securities Act) for such Holder and each
person, if any, who controls such Holder or underwriter within
the meaning of the Securities Act or the Securities Exchange Act
of 1934, as amended, (the "1934 Act"), against any losses,
claims, damages, or Liabilities (joint or several) to which they
may become subject under the Securities Act, the 1934 Act or
other federal or state law, insofar as such losses, claims,
damages, or liabilities (or actions in respect thereof) arise out
of or are based upon any of the following statements, omissions
or violations (collectively a "Violation"):
(i) any untrue statement or alleged untrue
statement of a material fact contained in such registration
statement, including any preliminary prospectus or final
prospectus contained therein or any amendments or supplements
thereto;
<PAGE> 25 INTEL/THRUSTMASTER CONFIDENTIAL
(ii) the omission or alleged omission to state
therein a material fact required to be stated therein, or
necessary to make the statements therein not misleading, or
(iii) any violation or alleged violation by the
Company of the Securities Act, the 1934 Act, any federal or state
securities law or any rule or regulation promulgated under the
Securities Act, the 1934 Act or any federal or state securities
law in connection with the offering covered by such registration
statement;
and the Company will reimburse each such Holder, partner, officer
or director, underwriter or controlling person for any legal or
other expenses reasonably incurred by them, as incurred, in
connection with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that the
indemnity agreement contained in this subsection 1.7(a) shall not
apply to amounts paid in settlement of any such loss, claim,
damage, liability or action if such settlement is effected
without the consent of the Company (which consent shall not be
unreasonably withheld), nor shall the Company be liable in any
such case for any such loss, claim, damage, liability or action
to the extent that it arises out of or is based upon a Violation
which occurs in reliance upon and in conformity with written
information furnished expressly for use in connection with such
registration by such Holder, partner, officer, director,
underwriter or controlling person of such Holder.
(b) By Selling Holders. To the extent permitted by
law, each selling Holder will indemnify and hold harmless the
Company, each of its directors, each of its officers who have
signed the registration statement, each person, if any, who
controls the Company within the meaning of the Securities Act,
any underwriter and any other Holder selling securities under
such registration statement or any of such other Holder's
partners, directors or officers or any person who controls such
Holder within the meaning of the Securities Act or the 1934 Act,
against any losses, claims, damages or liabilities (joint or
several) to which the Company or any such director, officer,
controlling person, underwriter or other such Holder, partner or
director, officer or controlling person of such other Holder may
become subject under the Securities Act, the 1934 Act or other
federal or state law, insofar as such losses, claims, damages or
liabilities (or actions in respect thereto) arise out of or are
based upon any Violation, in each case to the extent (and only to
the extent) that such Violation occurs in reliance upon and in
conformity with written information furnished by such Holder
expressly for use in connection with such registration; and each
such Holder will reimburse any legal or other expenses reasonably
incurred by the Company or any such director, officer,
controlling person, underwriter or other Holder, partner,
officer, director or controlling person of such other Holder in
connection with investigating or defending any such loss,
<PAGE> 26 INTEL/THRUSTMASTER CONFIDENTIAL
claim, damage, liability or action: provided, however, that the
indemnity agreement contained in this subsection 1.7(b) shall not
apply to amounts paid in settlement of any such loss, claim,
damage, liability or action if such settlement is effected
without the consent of the Holder, which consent shall not be
unreasonably withheld; and provided, further, that the total
amounts payable in indemnity by a Holder under this Section
1.7(b) in respect of any Violation shall not exceed the net
proceeds received by such Holder in the registered offering out
of which such Violation arises.
(c) Notice. Promptly after receipt by an indemnified
party under this Section 1.7 of notice of the commencement of any
action (including any governmental action), such indemnified
party will, if a claim in respect thereof is to be made against
any indemnifying party under this Section 1.7, deliver to the
indemnifying party a written notice of the commencement thereof
and the indemnifying party shall have the right to participate
in, and, to the extent the indemnifying party so desires, jointly
with any other indemnifying party similarly noticed, to assume
the defense thereof with counsel mutually satisfactory to the
parties; provided, however, that an indemnified party shall have
the right to retain its own counsel, with the fees and expenses
to be paid by the indemnifying party, if representation of such
indemnified party by the counsel retained by the indemnifying
party would be inappropriate due to actual or potential conflict
of interests between such indemnified party and any other party
represented by such counsel in such proceeding. The failure to
deliver written notice to the indemnifying party within a
reasonable time of the commencement of any such action shall
relieve such indemnifying party of liability to the indemnified
party under this Section 1.7 to the extent the indemnifying party
is prejudiced as a result thereof, but the omission so to deliver
written notice to the indemnified party will not relieve it of
any liability that it may have to any indemnified party otherwise
than under this Section 1.7.
(d) Defect Eliminated in Final Prospectus. The
foregoing indemnity agreements of the Company and Holders are
subject to the condition that, insofar as they relate to any
Violation made in a preliminary prospectus but eliminated or
remedied in the amended prospectus on file with the SEC at the
time the registration statement in question becomes effective or
the amended prospectus filed with the SEC pursuant to SEC Rule
424(b) (the "Final Prospectus"), such indemnity agreement shall
not inure to the benefit of any person if a copy of the Final
Prospectus was timely furnished to the indemnified party and was
not furnished to the person asserting the loss, liability, claim
or damage at or prior to the time such action is required by the
Securities Act.
(e) Contribution. In order to provide for just and
equitable contribution to joint liability under the Securities
Act in any case in which either (i) any
<PAGE> 27 INTEL/THRUSTMASTER CONFIDENTIAL
Holder exercising rights under this Agreement, or any controlling
person of any such Holder, makes a claim for indemnification
pursuant to this Section 1.7 but it is judicially determined (by
the entry of a final judgment or decree by a court of competent
jurisdiction and the expiration of time to appeal or the denial
of the last right of appeal) that such indemnification may not be
enforced in such case notwithstanding the fact that this Section
1.7 provides for indemnification in such case, or (ii)
contribution under the Securities Act may be required on the part
of any such selling Holder or any such controlling person in
circumstances for which indemnification is provided under this
Section 1.7; then, and in each such case, the Company and such
Holder will contribute to the aggregate losses, claims, damages
or liabilities to which they may be subject (after contribution
from others) in such proportion so that such Holder is
responsible for the portion represented by the percentage that
the public offering price of its Registrable Securities offered
by and sold under the registration statement bears to the public
offering price of all securities offered by and sold under such
registration statement, and the Company and other selling Holders
are responsible for the remaining portion; provided, however,
that, in any such case: (A) no such Holder will be required to
contribute any amount in excess of the public offering price of
all such Registrable Securities offered and sold by such Holder
pursuant to such registration statement; and (B) no person or
entity guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) will be entitled to
contribution from any person or entity who was not guilty of such
fraudulent misrepresentation.
(f) Survival. The obligations of the Company and
Holders under this Section 1.7 shall survive until the fifth
anniversary of the completion of any offering of Registrable
Securities in a registration statement, regardless of the
expiration of any statutes of limitation or extensions of such
statutes.
1.8 Termination of the Company's Obligations. The Company
shall have no obligations pursuant to Sections 1.3 and 1.4 with
respect to any Registrable Securities proposed to be sold by a
Holder in a registration pursuant to Section 1.3 or 1.4 more than
seven (7) years after the date of this Agreement, or, if, in the
opinion of counsel to the Company, all such Registrable
Securities proposed to be sold by a Holder may then be sold under
Rule 144 in one transaction without exceeding the volume
limitations thereunder.
