Exhibit 4.2
SECURITIES PURCHASE AGREEMENT dated as of October 29, 1999
(the "Agreement") by and among (i) Greenwich Street Capital Partners II, L.P., a
Delaware limited partnership ("Greenwich II"), GSCP Offshore Fund, L.P., a
Cayman Islands limited partnership ("GSCP Offshore"), Greenwich Fund, L.P., a
Delaware limited partnership ("GF"), Greenwich Street Employees Fund, L.P., a
Delaware limited partnership ("GSEF"), and TRV Executive Fund, L.P., a Delaware
limited partnership ("TRV," together with Greenwich II, GSCP Offshore, GF and
GSEF, each a "Purchaser" and collectively, the "Purchasers"); and (ii) Walnut
Financial Services, Inc., a Utah corporation (the "Company").
W I T N E S S E T H:
Pursuant to the Amended and Restated Agreement and Plan of
Merger dated as of August 5, 1999 (the "Merger Agreement") among the Company,
Tower Hill Securities, Inc., a New York corporation ("Tower Hill"), and Tower
Hill Acquisition Corp., a New York corporation and wholly-owned subsidiary of
the Company ("Newco"), Newco shall be merged with and into Tower Hill (the
"Merger"). The Company will change its name to "THCG, Inc." at substantially the
same time as the Merger is effected.
Substantially simultaneously with the consummation of the
Merger, but subject to the effectiveness of the Merger, the Purchasers desire to
acquire from the Company, and the Company desires to issue and sell to the
Purchasers, for the consideration hereinafter provided, the Securities (as
defined in Section 1(a)).
Capitalized terms used in this Agreement without definition
have the meanings assigned to such terms in the Merger Agreement. For purposes
hereof, the term "Purchaser Documents" shall mean and include this Agreement and
the "Warrants," the "Registration Rights Agreement," the "Voting Agreement", the
"Tag-Along Agreement" and the "Escrow Agreement" (as such terms are hereinafter
defined), together with all amendments, modifications and supplements thereof.
NOW, THEREFORE, in consideration of the premises and
representations, warranties, covenants and agreements herein contained, and
intending to be legally bound hereby, the Purchasers and the Company hereby
agree as follows:
1. Sale and Purchase of Securities; the Closing.
(a) Sale and Purchase of Securities. Subject to the terms and
conditions of this Agreement and on the basis of the representations,
warranties, covenants and agreements herein contained, and subject to the terms
and conditions of the Escrow Agreement, the Company shall sell, assign, convey
and deliver to the Purchasers, and the Purchasers shall purchase, acquire,
accept from the Company and pay for, in regard to each Purchaser, in the amounts
and at the prices set forth on Schedule A attached hereto, an aggregate of (i)
2,500,000 shares (the "Shares") of the Company's common stock, $.01 par value
per share (the "Common Stock"); (ii) Warrants to purchase 1,000,000 shares of
Common Stock at a per share exercise price equal to the greater of (w) 1.5
multiplied by the initial exercise price of options to purchase Common Stock
that are granted to Company Principals (as defined below in this Section 1(a))
substantially at the time of the Merger (such options being herein referred to
as the "Company Principals Options"), or (x) $3.00, substantially in the form
attached hereto as Exhibit A-1 (the "Initial Warrants"); and (iii) Warrants to
purchase 1,000,000 shares of Common Stock at a per share exercise price equal to
the greater of (y) 2.0 multiplied by the
initial exercise price of the Company Principals Options, or (z) $4.00,
substantially in the form attached hereto as Exhibit A-2 (the "Additional
Warrants" and, together with the Initial Warrants, the "Warrants"). The Shares
and the Warrants are collectively referred to herein as the "Securities." For
purposes of the Purchaser Documents, the term "Company Principal(s)" shall mean
any Person who: (i) is an executive officer, director or Affiliate of the
Company or any executive officer or director of any Affiliate of the Company or
any Related Person of any of the foregoing, or (ii) prior to the Merger was a
shareholder, executive officer, director or Affiliate of Tower Hill or of any
shareholder, executive officer or director of Tower Hill or any Related Person
of any of the foregoing (each of the foregoing persons referred to in this
clause (ii), a "THSI Principal").
(b) The Closing. Subject to the termination of this Agreement
pursuant to Section 7, and subject to the release of the "Escrow Documents" (as
defined in the Escrow Agreement) in accordance with the provisions of Section
4(a) of the Escrow Agreement, the closing of the transactions contemplated
hereby (the "Closing") shall be deemed to have occurred substantially
simultaneously with the consummation of the Merger and provided that the
conditions set forth in Section 6 hereof have been satisfied. The date on which
the Closing is deemed to have occurred is hereinafter referred to as the
"Closing Date."
2. Consideration; Delivery.
(a) Escrow Agreement. On the Closing Date, the parties hereto
shall enter into an Escrow Agreement substantially in the form of Exhibit B
hereto (the "Escrow Agreement") with the "Escrow Agent" described therein, and
the execution copies of the Purchaser Documents (other than this Agreement and
the Escrow Agreement) shall be deposited with the Escrow Agent in accordance
with the terms of the Escrow Agreement. The Purchaser Documents (other than this
Agreement and the Escrow Agreement) shall not be effective unless and until such
copies are released by the Escrow Agent in accordance with the provisions of
Section 4(a) of the Escrow Agreement.
(b) Consideration. The aggregate consideration for the
Securities shall be five million dollars ($5,000,000), payable in cash (the
"Purchase Price"). On the Closing Date, the Purchase Price shall be deposited
with the Escrow Agent in accordance with the terms of the Escrow Agreement and
shall be released by the Escrow Agent only in accordance with the terms of the
Escrow Agreement.
(c) Delivery of Securities. On the Closing Date, the Company
shall deliver to the Escrow Agent duly executed certificates and instruments
dated as of the Closing Date registered in the names of the Purchasers
representing the Securities purchased by the Purchasers in conformity the
applicable Purchaser Documents, such certificates and instruments to be held by
the Escrow Agent in accordance with the terms of the Escrow Agreement and shall
be released by the Escrow Agent only in accordance with the terms of the Escrow
Agreement.
(d) Registration Rights Agreement; Voting Agreement and
Tag-Along Agreement. On the Closing Date, the parties hereto shall enter into a
Registration Rights Agreement substantially in the form of Exhibit C hereto (the
"Registration Rights Agreement"), the other parties to the Voting Agreement
substantially in the form of Exhibit D hereto (the "Voting Agreement") and the
Tag-Along Agreement substantially in the form of Exhibit E hereto (the
"Tag-Along Agreement") shall have entered into the Voting Agreement and the
Tag-Along
2
Agreement, and counsel to the Company shall have issued opinions substantially
in the form of Exhibits F-1, F-2 and F-3 hereto (the "Legal Opinions"). The
Registration Rights Agreement, the Voting Agreement, the Tag-Along Agreement and
the Legal Opinions shall be delivered to the Escrow Agent to be held by the
Escrow Agent in accordance with the terms of the Escrow Agreement, shall be
dated as of the Closing Date and shall be released by the Escrow Agent only in
accordance with the terms of the Escrow Agreement. The Registration Rights
Agreement, the Voting Agreement, the Tag-Along Agreement and the Legal Opinions
shall not be effective unless and until such copies are released by the Escrow
Agent in accordance with the provisions of Section 4(a) of the Escrow Agreement;
but upon their release pursuant to Section 4(a) of the Escrow Agreement, such
Escrow Documents shall be effective from and after the Closing Date.
3. Representations and Warranties of the Company. The Company
hereby represents and warrants to each of the Purchasers as follows:
(a) Organization and Good Standing. The Company has been duly
organized and is validly existing and in good standing under the laws of the
jurisdiction of its incorporation and has the requisite corporate power and
authority to own, lease and operate its properties, to carry on its business as
it is now being conducted and to issue the Securities. The Company has
heretofore delivered to Greenwich II (on behalf of all of the Purchasers) true
and complete copies of its certificate of incorporation and by-laws, together
with all amendments, modifications and supplements thereof. The Company is duly
qualified or licensed to do business, and is in good standing, in each
jurisdiction where the character of the properties owned, leased or operated by
it or the nature of its business makes such qualification or licensing
necessary, except for such failure to be so qualified or licensed and in good
standing that could not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect. For purposes of this Agreement, "Material
Adverse Effect" means any change, event or effect (i) in, on or relating to the
business of the Company or a Purchaser, as applicable, that is, or is reasonably
likely to be, materially adverse to the business, properties, assets,
liabilities, condition (financial or otherwise) or results of operations of the
Company or such Purchaser, as applicable, taken as a whole, other than any
change or effect arising out of general economic conditions in the United States
or (ii) that may prevent or materially delay the performance of the Purchaser
Documents by the Company or such Purchaser, as applicable, or the consummation
by the Company or such Purchaser, as applicable, of the transactions
contemplated by the Purchaser Documents (including without limitation, the BDC
Withdrawal (as defined in the Merger Agreement)).
(b) Authorization of Agreement. The Company has all necessary
corporate power and authority to execute and deliver the Purchaser Documents, to
issue the Securities and to consummate the other transactions contemplated by
the Purchaser Documents and to perform its obligations under the Purchaser
Documents. The execution and delivery by the Company of the Purchaser Documents
and the consummation by the Company of the transactions contemplated thereby
have been duly authorized and approved by the board of directors of the Company,
and assuming approval by the shareholders of the Company pursuant to the
Company's Articles of Incorporation and Bylaws and the Business Corporations Act
of the State of Utah, no other corporate proceedings on the part of the Company
are, or will be, necessary to authorize the Purchaser Documents or to consummate
the transactions contemplated thereby. Each of the Purchaser Documents has been,
or will be at the Closing, assuming the due authorization, execution and
delivery by the Purchasers of the Purchaser Documents, duly and validly executed
and delivered by the Company and constitutes, or will
3
constitute at the Closing, a valid, legal and binding agreement of the Company,
enforceable against the Company in accordance with their terms, subject to
bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer,
moratorium and other similar laws now or hereafter in effect relating to or
affecting creditors' rights generally.
(c) No Conflicts; Consents of Third Parties.
(i) No filing, registration or submission with or
notice to, and no permit, authorization, consent or approval of or with
(collectively, "Filings and Approvals"), any Governmental Entity is, or will be,
necessary for the execution and delivery by the Company of the Purchaser
Documents, the issuance of the Securities or the consummation by the Company of
the transactions contemplated thereby, except: (A) Filings and Approvals with
the SEC and the National Association of Securities Dealers (the "NASD"); (B)
Filings and Approvals that, if not made or obtained, could not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect;
and (C) Filings and Approvals which have been made or obtained and which are
unconditional and in full force and effect.
(ii) No consent or approval of any third party is, or
will be, necessary for the execution and delivery by the Company of the
Purchaser Documents, the issuance of the Securities or the consummation by the
Company of the other transactions contemplated thereby, except consents or
approvals of the SEC and the NASD (including without limitation the making of an
additional listing application with Nasdaq with respect to the issuance of the
Shares), and except such consents and approvals which have been obtained and
which are unconditional and in full force and effect.
(iii) Neither the execution, delivery and performance
by the Company of the Purchaser Documents, the issuance of the Securities nor
the consummation by the Company of the other transactions contemplated by the
Purchaser Documents, will (x) conflict with or result in any breach of any
provision of the certificate of incorporation or by-laws of the Company, (y)
result in a violation or breach of, or constitute (with or without due notice or
lapse of time or both) a default (or give rise to any right of termination,
amendment, cancellation or acceleration or Lien) under, any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, lease, license,
contract, agreement or other instrument or obligation to which the Company is a
party or by which its properties or assets are bound, or (z) assuming that all
Filings and Approvals have been made or obtained, violate any Law or any
Governmental Order applicable to the Company or its properties or assets, except
in the case of clauses (y) or (z) for violations, breaches or defaults which
could not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect.
(d) Capitalization.
(i) The authorized capital stock of the Company
consists of 50,000,000 shares of Common Stock and 1,000,000 shares of preferred
stock, par value $.01 per share (the "Preferred Stock"). All of the issued and
outstanding shares of Common Stock have been duly authorized and validly issued
and are fully paid and non-assessable and free of preemptive rights. Except as
contemplated by any of the Purchaser Documents (other than the Escrow Agreement)
and except as set forth on Schedule 3(d)(i) to this Agreement, there are not any
outstanding (and immediately following the consummation of the Merger and the
Related Transactions and the issuance of all shares, securities and instruments
pursuant to the Merger Agreement, the Related Agreements and this Agreement
there will not be any outstanding)
4
contractual obligations of the Company to repurchase, redeem or otherwise
acquire, or providing preemptive or registration rights with respect to, any
shares of capital stock of the Company. There are no anti-dilution or price
adjustment provisions contained in any security issued by the Company (or in any
agreement providing rights to security holders) that will be triggered by the
issuance of the Securities.
(ii) The Securities have been duly authorized and
will be issued, free and clear of all liens, encumbrances and claims and rights
of third parties (excluding liens, encumbrances, claims and rights of third
parties claiming by, through or under any Purchaser), and are fully paid
(subject to the release of the Purchase Price therefor in accordance with the
terms of Section 4(a) of the Escrow Agreement) and non-assessable, and the
issuance of such Securities is not subject to any preemptive right of any
Person. A sufficient number of shares of Common Stock have been duly authorized
and reserved for issuance upon exercise of the Warrants, and upon issuance in
accordance with the terms of the Warrants, such shares of Common Stock will be
duly authorized, validly issued, fully paid and non-assessable and the issuance
of such Common Stock is not and will not be subject to any preemptive right of
any Person. Schedule 3(d)(ii) hereto sets forth all of the shares of capital
stock, all warrants, options and rights to acquire shares of the capital stock
and all convertible securities of the Company which will be outstanding
immediately following the consummation of the Merger and the Related
Transactions and the issuance of all shares, securities and instruments pursuant
to the Merger Agreement, the Related Agreements and this Agreement. The Shares
issued to the Purchasers will represent 30% of the Common Stock of the Company
on a fully-diluted basis (assuming the exercise of all warrants, options and
rights to acquire shares of the capital stock and all convertible securities) as
of immediately following the consummation of the Merger and the Related
Transactions and the issuance of all shares, securities and instruments pursuant
to the Merger Agreement, the Related Agreements and this Agreement. The shares
of Common Stock that will be issued as a result of the Merger will be, when
issued in accordance with the terms of the Merger Agreement, duly authorized,
validly issued, fully paid and non-assessable and free of preemptive rights. The
Company has heretofore delivered to Greenwich II (on behalf of the Purchasers) a
copy of the Merger Agreement (together with all amendments, modifications and
supplements thereto).
(e) Litigation. There is no action, suit, investigation or
proceeding pending or, to the knowledge of the Company, threatened against the
Company before any court or arbitrator or any Governmental Entity relating to
the transactions contemplated by the Purchaser Documents.
(f) Merger Agreement. The representations and warranties of
the Company, Tower Hill and Newco contained in the Merger Agreement were true
and correct as of the date of the Merger Agreement and the Purchasers shall be
entitled to rely upon such representations and warranties in connection with the
Purchaser Documents and the purchase of the Securities and the consummation of
the other transactions under the Purchaser Documents.
(g) Disclosure. The final Proxy Statement of the Company
accompanying the Notice of Special Meeting of Stockholders dated September 30,
1999 (the "Proxy Statement") with respect to the Company and the transactions
contemplated by the Purchaser Documents and the Proxy Statement, and the
representations and warranties by the Company contained in the Purchaser
Documents and in any Schedule or certificate furnished or to be furnished by the
Company pursuant thereto, do not contain or will not, as of the Closing Date,
contain any untrue statement of a material fact, and do not omit or will not, as
of the Closing Date, omit to state
5
any fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. The representations and warranties contained in this Section
3(g) or elsewhere in this Agreement or in any Schedule or certificate furnished
or to be furnished as aforesaid pursuant hereto shall not be affected or deemed
waived by reason of the fact that the Purchasers or their representatives know
or should have known that any such representation or warranty is or might be
inaccurate in any respect.
(h) Merger and Related Transactions. The Merger and the other
"Related Transactions" (as described in the Proxy Statement), if consummated,
will be consummated in all material respects in accordance with the terms, and
subject to the conditions, set forth in the Merger Agreement as in effect on the
date of this Agreement and as described in the Proxy Statement and without any
material amendment or waiver thereof; subject to the escrow of the documents
pertaining to the Related Transactions and, in accordance with the terms of such
escrow arrangements, the Related Transactions will be effected and the documents
pertaining thereto will be released from escrow prior to, or at the same time
as, the release of the Escrow Documents in accordance with the terms of Section
4(a) of the Escrow Agreement.
4. Representations and Warranties of the Purchaser. The
Purchasers, jointly and severally, hereby represent and warrant to the Company
that:
(a) Organization and Good Standing. Each Purchaser has been
duly organized and is validly existing and in good standing under the laws of
the jurisdiction of its organization and has the requisite power and authority
to own, lease and operate its properties and to carry on its business as it is
now being conducted.
(b) Authorization of Agreement. Each Purchaser has all
necessary power and authority to execute and deliver the Purchaser Documents, to
consummate the transactions contemplated by the Purchaser Documents, and to
perform its obligations under the Purchaser Documents. The execution and
delivery by each Purchaser of the Purchaser Documents and the consummation by
each Purchaser of the transactions contemplated thereby have been duly
authorized and approved by the general partner of each Purchaser, and no other
proceedings on the part of any Purchaser are, or will be, necessary to authorize
the Purchaser Documents or to consummate the transactions contemplated thereby.
The Purchaser Documents have been, or will be at the Closing, assuming the due
authorization, execution and delivery by the Company, duly and validly executed
and delivered by each Purchaser and constitutes, or will constitute at the
Closing, a valid, legal and binding agreement of each Purchaser, enforceable
against each Purchaser in accordance with its terms, subject to (i) bankruptcy,
insolvency, reorganization, fraudulent conveyance or transfer, moratorium and
other similar laws now or hereafter in effect relating to or affecting
creditors' rights generally, and (ii) general principles of equity (regardless
of whether considered in a proceeding at law or in equity).
(c) No Conflicts; Consents of Third Parties.
(i) No Filing and Approval of or with any
Governmental Entity is, or will be, necessary for the execution and delivery by
any Purchaser of the Purchaser Documents or the consummation by any Purchaser of
the transactions contemplated thereby, except Filings and Approvals that, if not
made or obtained, could not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect.
6
(ii) No consent or approval of any third party is, or
will be, necessary for the execution and delivery by any Purchaser of the
Purchaser Documents or the consummation by any Purchaser of the transactions
contemplated by the Purchaser Documents.
(iii) Neither the execution, delivery and performance
by any Purchaser of the Purchaser Documents, nor the consummation by any
Purchaser of the transactions contemplated by the Purchaser Documents, will (x)
conflict with or result in any breach of any provision of the applicable
organizational documents of any Purchaser, (y) result in a violation or breach
of, or constitute (with or without due notice or lapse of time or both) a
default (or give rise to any right of termination, amendment, cancellation or
acceleration or Lien) under, any of the terms, conditions or provisions of any
note, bond, mortgage, indenture, lease, license, contract, agreement or other
instrument or obligation to which any Purchaser is a party or by which its
properties or assets are bound, or (z) assuming that all Filings and Approvals
have been made or obtained, violate any Law or any Governmental Order applicable
to any Purchaser or its properties or assets, except in the case of clauses (y)
or (z) for violations, breaches or defaults which could not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect.
(d) Litigation. There is no action, suit, investigation or
proceeding pending or, to the knowledge of any Purchaser, threatened against any
Purchaser before any court or arbitrator or any Governmental Entity relating to
the transactions contemplated by this Agreement.
(e) Investment Representations. Each Purchaser understands
that the Securities (including the shares of Common Stock issuable upon exercise
of the Warrants (the "Warrant Shares")) have not been registered under the
Securities Act of 1933, as amended (the "Securities Act"), or any state
securities law. Each Purchaser also understands that the Securities and the
Warrant Shares are being offered and sold pursuant to one or more exemptions
from such registration based in part upon each Purchaser's representations
contained in this Agreement.
(i) Purchaser Bears Economic Risk. Each Purchaser has
substantial experience in evaluating and investing in private placement
transactions of securities in companies similar to the Company and is capable of
evaluating the merits and risks of its investment in the Company. Each Purchaser
understands that it must bear the economic risk of this investment indefinitely
unless the Securities and the Warrant Shares are registered under the Securities
Act, or an exemption from registration is available. Each Purchaser also
understands that there is no assurance that any exemption from registration will
be available and that, even if available, such exemption may not allow such
Purchaser to transfer all or any portion of the Securities (or the Warrant
Shares) under the circumstances, in the amounts or at the times such Purchaser
might propose.
(ii) Acquisition for Own Account. Each Purchaser is
acquiring the Securities, and will acquire the Warrant Shares, for its own
account for investment only, and will not sell, transfer or otherwise dispose of
the Securities or the Warrant Shares, or any portion thereof or interest
therein, in violation of the registration requirements of applicable federal and
state securities laws.
(iii) Accredited Investor. Each Purchaser is an
accredited investor within the meaning of Regulation D under the Securities Act.
7
(iv) Company Information. Each Purchaser has had an
opportunity to discuss the Company's business, management and financial affairs
with directors, officers and other management of the Company. Each Purchaser has
also had the opportunity to ask questions of, and receive answers from, the
Company and its management regarding the terms and conditions of this
investment.
(v) Rule 144. Each Purchaser acknowledges and agrees
that the Securities (including the Warrant Shares) must be held indefinitely
unless they are subsequently registered under the Securities Act and any
applicable state securities law or an exemption from such registration is
available. Each Purchaser has been advised or is aware of the provisions of Rule
144 promulgated under the Securities Act ("Rule 144"), which permits limited
resale of shares purchased in a private placement subject to the satisfaction of
certain conditions, including, among other things: the availability of certain
current public information about the Company, the resale occurring not less than
one year after a Person has purchased and paid for the security to be sold, the
sale being through an unsolicited "broker's transaction" or in transactions
directly with a market maker (as said term is defined under the Securities
Exchange Act of 1934, as amended) and the number of shares being sold during any
three-month period not exceeding specified limitations.
(vi) Financing. Each Purchaser has, and on the
Closing Date will have, sufficient funds available to pay for the Securities to
be purchased by it pursuant to Section 1.
5. Covenants. The parties, as applicable, hereby covenant and
agree as follows:
(a) Access to Information; Confidentiality. Upon reasonable
notice, the Company shall afford to the executive officers, accountants, counsel
and other representatives of Greenwich II (on behalf of the Purchasers)
reasonable access, during the period prior to the Closing Date, to all its
facilities, properties, assets, books, contracts and records and, during such
period, the Company shall furnish promptly to Greenwich II (on behalf of the
Purchasers) all information concerning its business, facilities, properties,
assets and personnel as Greenwich II may reasonably request, and shall make
promptly available to Greenwich II (on behalf of the Purchasers) the appropriate
individuals (including officers, employees, accountants, counsel and other
professionals) for discussion of the Company's business, facilities, properties,
assets and personnel as Greenwich II may reasonably request. The Purchasers
shall keep such information confidential in accordance with the terms of the
Confidentiality Agreement dated September 2, 1999 between THCG, Inc. and
Greenwich II. By their execution of this Agreement, the Company agrees to be
bound by the terms of the foregoing Confidentiality Agreement to the same extent
as THCG, Inc. was bound, and the Purchasers agree to be bound by the terms of
the foregoing Confidentiality Agreement to the same extent as Greenwich II is
bound.
(b) Reasonable Best Efforts; Further Action. Upon the terms
and subject to the conditions set forth in the Purchaser Documents, each of the
parties hereto agrees to use its reasonable best efforts to take, or cause to be
taken, all actions, and to do, or cause to be done, and to assist and cooperate
with the other party in doing, or causing to be done, all things necessary,
proper or advisable to fulfill all conditions applicable to such party pursuant
to the Purchaser Documents, and to consummate and make effective, in the most
expeditious manner practicable, the transactions contemplated by the Purchaser
Documents, including (i)
8
the obtaining of all necessary actions or non-actions, waivers, consents and
approvals from Governmental Entities and the making of all necessary
registrations and filings and the taking of all reasonable steps as may be
necessary to make or obtain a Filing and Approval to, of or with, or to avoid an
action or Proceeding by, any Governmental Entity; (ii) the obtaining of all
necessary consents, approvals, waivers or exemptions from non-governmental third
parties; and (iii) the execution and delivery of any additional instruments
necessary to consummate the transactions contemplated by, and to fully carry out
the purposes and intent of, the Purchaser Documents.
(c) Board Representation. As long as the Purchasers, in the
aggregate, are the beneficial owners of 5.0% or more of the issued and
outstanding shares of Common Stock on a fully-diluted basis (assuming for such
purpose the exercise or conversion of all outstanding options, warrants and
other convertible securities, including the Securities), Greenwich II shall be
entitled to nominate one person (the "Purchaser Appointee") for election to the
Board of Directors of the Company, provided, however, that such person is
reasonably acceptable to the Company, and the Company shall use its best efforts
to cause the Purchaser Appointee to be elected to the Board of Directors of the
Company and to be appointed to the Compensation Committee (including any stock
option or similar committee) of the Board of Directors of the Company.
(d) Restrictions on the Conduct of Business.
(i) As long as the Purchasers, in the aggregate, are
the beneficial owners of 5.0% or more of the issued and outstanding shares of
Common Stock on a fully-diluted basis (assuming for such purpose the exercise or
conversion of all outstanding options, warrants and other convertible
securities, including the Securities), the Company shall not, without the prior
written consent of Greenwich II, effect any merger, consolidation,
recapitalization, redemption or repurchase, extraordinary dividend or
distribution or any similar transaction or other extraordinary transaction
affecting the Company or any of its Subsidiaries or any shares of capital stock
of the Company or any of its Subsidiaries; provided, however, that the consent
of Greenwich II shall not be required in connection with:
(1) any of the transactions described in the
preceding paragraph as long as (A) all shares of the Common Stock owned by the
Purchasers (including the Warrant Shares) are treated as favorably as all other
then outstanding shares of the Common Stock are treated, and (B) without the
prior written consent of Greenwich II, no holder of Common Stock (or any
Affiliate or Related Person of such holder) receives in connection with the
transaction any additional value or consideration (excluding any compensation
payable in the ordinary course of business to employees of the Company or the
successor entity in any such transaction, if applicable, related solely to the
performance of their duties as employees);
(2) any repurchase of Common Stock upon the
termination of employment of any employee of the Company who is not or has not
been a THSI Principal or who is not or has not been a director of the Company;
provided, however, that such repurchase must be approved by the Independent
Directors (as defined in Section 5(d)(iii)) and must be pursuant to the terms of
a Plan (as defined in Section 5(d)(ii));
(3) any redemption of shares of redeemable
preferred stock or other securities having redemption provisions issued after
the consummation of the Merger with the approval of the Independent Directors to
a Person who is not at the time of issuance a
9
Company Principal;
(4) open market purchases of shares of
Common Stock approved by the Independent Directors; or
(5) any repurchase or redemption (other than
as otherwise permitted by the foregoing clauses (1) through (4) of this Section
5(d)(i)), approved by the Independent Directors, of shares of the Common Stock
held by any stockholder as long as the aggregate of such repurchases or
redemptions (together with all prior repurchases or redemptions) from such
stockholder and all Affiliates and Related Persons of such stockholder (taken
together) does not exceed an amount equal to 5.0% or more of the number of
shares of Common Stock on a fully-diluted basis (assuming for such purpose the
exercise or conversion of all outstanding options, warrants and other
convertible securities) outstanding immediately after the consummation of the
Merger (including the Securities), as appropriately adjusted for stock splits
and dividends, reverse stock splits and combinations after the consummation of
the Merger.
(ii) Except as set forth on Schedule 5(d)(ii),
neither the Company nor any of its Subsidiaries shall issue or grant any
registration rights with respect to any capital stock, or securities convertible
into or exercisable for capital stock, of the Company or any Subsidiary without
the prior written consent of Greenwich II; provided, however, that the foregoing
restriction shall not prohibit (x) the grant of registration rights covering
shares issued in an acquisition of, or a merger with, another Person, or in a
private placement by the Company or any Subsidiary of shares of its capital
stock or other securities, where such acquisition, merger or private placement
does not involve, and the recipients of such capital stock or other securities
(and such registration rights) are not Company Principals or (y) the
registration on SEC Form S-8 of Common Stock issued pursuant to the Company's
Employee Stock Incentive Plan established at the time of the Closing or any
supplemental stock incentive plan approved by the Independent Directors (each, a
"Plan"). Any registration rights granted pursuant to clause (x) of this Section
5(d)(ii) shall not be on terms more favorable than the terms of the registration
rights granted to the Purchasers pursuant to the Registration Rights Agreement
and any right to "piggyback" on any registration effected pursuant to the
Purchasers' registration rights shall be subordinate to the Purchasers' demand
registration rights in the event of any cut-back or hold-back of shares. The
Purchasers shall have piggyback rights with respect to the exercise of any
registration right granted pursuant to clause (x) of this Section 5(d)(ii); and
the Purchasers shall have prorata sale rights with the persons who have
exercised the registration rights, but priority sale rights over any other
person whose shares are proposed to be included in the registration, in the
event of any required cut-back or hold-back of shares to be sold pursuant to the
registration right exercised.
(iii) All compensation of, and other transactions
with, any Company Principals shall be subject to the approval of the Independent
Directors. For all purposes of the Purchaser Documents, the term "Independent
Directors" shall mean members of the Board of Directors of the Company other
than the Company Principals whose compensation is being considered and who are
not involved in and have no economic or other interest in the transaction being
considered and any Affiliates or Related Persons of such Company Principals. For
all purposes of the Purchaser Documents, the term "Related Person" shall mean
and include any relative of the Person to which such Related Person refers
(including any spouse, parent or grandparent, sibling, child or grandchild,
step-child or step-grandchild or adopted child or adopted grandchild of such
Person) and any trust or similar entity which exists for the benefit of such
Person or any other "Related Person" of such Person in which the
10
Person or any "Related Person" of such Person has any economic or other
interest.
(e) Tag-Along Rights.
(i) Subject to Section 5(e)(vii), if, at any time
after the Closing, any of the THSI Principals or any of their Transferees in an
Exempt Transfer (as defined in Section 5(e)(viii)) (each, a "Section 5
Transferor") or any group of Section 5 Transferors proposes to Transfer any of
such Person's Common Stock to a Person or Persons, except pursuant to an Exempt
Transfer or a Charitable Transfer (as defined in Section 5(e)(viii)), prior to
any such Transfer, such Section 5 Transferor shall promptly (and in any event at
least 20 business days prior to the proposed closing date thereof) provide the
Purchasers with written notice of the proposed Transfer (the "Transfer Notice")
containing the following:
(1) the name and address of the proposed
Transferee;
(2) the number of shares of Common Stock
proposed to be Transferred by such Section 5 Transferor; and
(3) the purchase price and other material
terms and conditions of payment and the closing date for the proposed Transfer
(including, if available, a copy of any purchase agreement related thereto).
(ii) If any Purchaser wishes to participate in such
Transfer, such Purchaser (or Greenwich II on behalf of such Purchaser) shall
notify such Section 5 Transferor by written notice (the "Tag-Along Notice") on
or before the expiration of 10 business days following receipt of the Transfer
Notice that such Purchaser desires to Transfer to the proposed Transferee a part
of its shares of Common Stock (as determined pursuant to the following sentence)
on the same terms and conditions set forth in the Transfer Notice. The Tag-Along
Notice shall specify the number of shares of Common Stock such Purchaser desires
to Transfer (the "Tag-Along Amount"). The maximum number of shares of Common
Stock that such Purchaser shall be entitled to Transfer pursuant to the
Tag-Along Notice shall be determined by multiplying the number of shares of
Common Stock held by such Purchaser at the time of the Transfer Notice by a
fraction, the numerator of which is the number of shares of Common Stock
proposed to be Transferred to the Transferee by such Section 5 Transferor and
the denominator of which is the aggregate number of shares of Common Stock then
owned by all Section 5 Transferors. If no Purchaser provides the Section 5
Transferor with a Tag-Along Notice within the period above-specified, the
Section 5 Transferor shall be free to sell all or a portion of his Common Stock
to the Transferee in the amount and on the same terms and conditions set forth
in the Transfer Notice. If any Purchaser provides the Section 5 Transferor(s)
with a Tag-Along Notice, the Section 5 Transferor may not effect such Transfer
unless the Transferee shall have purchased the Tag-Along Amount or the Reduced
Tag-Along Amount (as defined in Section 5(e)(iv)) from such Purchaser on the
same terms and conditions set forth in the Transfer Notice.
(iii) The Tag-Along Notice given by such Purchaser
shall constitute the Purchaser's irrevocable and binding agreement to Transfer
to the Transferee the Tag-Along Amount or the Reduced Tag-Along Amount on the
terms and conditions specified in the Transfer Notice.
(iv) If the sum (the "Aggregate Shares Offered") of
(w) the aggregate
11
number of shares of Common Stock proposed to be Transferred to the Transferee by
the Section 5 Transferor and (x) the total of the Tag-Along Amounts for each
Purchaser exceeds the maximum number of shares of Common Stock that such
Transferee is willing to purchase (the "Maximum Number"), then (y) the maximum
number of shares of Common Stock that such Section 5 Transferor shall be
entitled to Transfer to the Transferee shall be reduced to the number (rounded
down to the nearest whole share) obtained by multiplying the number of shares of
Common Stock that such Section 5 Transferor proposed to Transfer to the
Transferee by a fraction, the numerator of which is the Maximum Number and the
denominator of which is the Aggregate Shares Offered, and (z) the maximum number
of shares of Common Stock that any Purchaser which has delivered a Tag-Along
Notice pursuant to Section 5(e)(ii) (the "Participating Purchasers") shall be
entitled to Transfer to the Transferee pursuant to such Tag-Along Notice shall
be reduced to the number (rounded up to the nearest whole share; the "Reduced
Tag-Along Amount") obtained by multiplying the Tag-Along Amount of such
Purchaser by the fraction described in clause (y) of this Section 5(e)(iv).
(v) The Participating Purchasers agree to execute and
deliver purchase agreements upon the same terms and subject to the same
conditions as the Section 5 Transferor and shall take such action as the
Transferee of such shares may reasonably request (including the delivery of
certificates or other documents) to facilitate the consummation of the Transfer
of such shares. Any indemnity provided by a Participating Purchaser to the
Transferee in such purchase agreement will only relate to the shares of Common
Stock Transferred by it. Any indemnity provided to the Transferee by the Section
5 Transferor will only relate to the shares of Common Stock Transferred by the
Section 5 Transferor.
(vi) The Section 5 Transferor(s) and the
Participating Purchasers shall be required to bear their pro rata share, based
on the number of shares of Common Stock included in such Transfer, of the
expenses of the transaction including, without limitation, legal, accounting and
investment banking fees, commissions and expenses.
(vii) Notwithstanding any other provision of this
Section 5(e), if, at any time, any Section 5 Transferor or group of Section 5
Transferors proposes to sell shares of Common Stock beneficially owned by him or
them in a public offering which, together with all prior Transfers, other than
Exempt Transfers and Charitable Transfers, by all THSI Principals, exceed 25% of
the aggregate of the shares of Common Stock (the "Original Shares") acquired by
the THSI Principals (A) pursuant to the Merger and (B) upon exercise of options
granted to the THSI Principals pursuant to the Merger Agreement and the Related
Agreements (including without limitation under the Plan), then the Purchasers
will have the right to sell in such public offering a number of shares of Common
Stock equal to four times the number of shares of Common Stock proposed to be
sold by the THSI Principals in excess of such 25% of their Original Shares and
such THSI Principals shall cut-back the number of shares of Common Stock
proposed to be sold by them in such public offering so as to accommodate the
Transfer by the Purchasers of their shares of Common Stock pursuant to this
Section 5(d)(vii); provided, however, that the foregoing shall not be applicable
to any sale by the Section 5 Transferors of shares of Common Stock pursuant to
Rule 144 if, at the time of such proposed sale pursuant to Rule 144, any
Purchaser is then permitted (subject to the volume limitations of Rule 144) also
to effect sales under Rule 144. Any allocation among the Purchasers of shares to
be transferred pursuant to this Section 5(e)(vii) shall be determined by
Greenwich II.
(viii) For purposes of the Purchaser Documents, the
term "Transfer" shall mean any sale, assignment, disposition, mortgage, pledge
or similar lien or encumbrance
12
or other transfer or grant or any right to effect any of the foregoing; unless
in the case of the grant of any mortgage, pledge or similar lien or encumbrance
the mortgagee, the pledgee or holder of the lien or encumbrance agrees in
writing with the Purchasers that any further sale, assignment, disposition or
transfer or grant of any such right shall be subject to the provisions of this
Section 5 and to be deemed a "Section 5 Transferor" for all purposes of this
Agreement. For purposes of the Purchaser Documents, the term "Exempt Transfer"
shall mean a direct or indirect Transfer of capital stock of the Company to a
Person's Related Person provided that such capital stock shall continue to be
subject to the provisions of this Section 5 in connection with any further
Transfers. For purposes of the Purchaser Documents, the term "Charitable
Transfer" shall mean a Transfer of capital stock of the Company to an
organization exempt from taxation under Section 501(c)(3) of the Internal
Revenue Code of 1986, as amended, provided that the Person does not retain any
economic or other interest in the shares.
(ix) In the event of any merger, consolidation,
recapitalization, reclassification, stock split or combination, distribution of
property (other than cash) or securities, obligations or instruments, or any
other transaction affecting the Common Stock, the provisions of this Section 5
shall apply to any stock, security, obligations, instruments or property which
have been issued in connection therewith to any Section 5 Transferor.
(f) Nasdaq Listing Application. The Company shall file an
Application for Listing of Additional Shares with the NASD with respect to the
Shares and the Warrant Shares. Such Application for Listing of Additional Shares
shall be with respect to designation as a National Market System security by The
Nasdaq Stock Market; however, the Company may delay the filing of such
Application for Listing of Additional Shares until it is determined by the NASD
whether the current designation of the Common Stock of the Company as a National
Market System security shall continue. In the event that the NASD shall
determine that the designation of the Common Stock as a National Market System
security shall not continue, or otherwise if requested by Greenwich II, the
Company shall file promptly an Application for Listing of Additional Shares with
respect to designation as a Smallcap security by The Nasdaq Stock Market and
with respect to the Shares and the Warrant Shares.
(g) Public Announcements. No party will issue or cause the
publication of any press release or other public announcement with respect to
the Purchaser Documents or the transactions contemplated by the Purchaser
Documents without the prior written consent of the other party hereto; provided,
however, that nothing herein will prohibit any party from issuing or causing
publication of any such press release or public announcement to the extent that
such party determines such action to be required by Law, in which case the party
making such determination will allow the other party reasonable time to comment
on such release or announcement in advance of its issuance.
(h) Investment Opportunities. Company agrees that it will use
its reasonable efforts to offer Greenwich II, or affiliates of Greenwich II as
designated by Greenwich II, the opportunity to invest in private placements in
which the Company acts as the placement agent, financial advisor or principal
investor.
(i) No Regulatory Filings. The Company and its Subsidiaries
shall not effect or engage in any transaction, investment or business which
might impose upon any Purchaser (or any of its Affiliates, partners, directors,
officers or employees) any obligation under any Law to file any reports, or to
furnish any information to any governmental authority (other than reports or
information required to be made or furnished under the Exchange Act and the
rules
13
and regulations promulgated thereunder). In the event any Law, rule or
governmental regulation shall be enacted or adopted subsequent to the Company or
its Subsidiaries effecting or making any transaction or investment, or
subsequent to the commencement of any business, the Company shall use
commercially reasonable efforts to restructure such transaction, investment or
business so as to avoid any such reporting or information obligation imposed on
any Purchaser (or any of its Affiliates, partners, directors, officers or
employees).
(j) Use of Proceeds. The Company will use the proceeds from
the sale of the Securities for the purposes described in the Proxy Statement and
for general corporate purposes.
(k) Name Change. The Company shall, prior to the release of
the Escrow Documents pursuant to Section 4(a) of the Escrow Agreement, change
the name of the Company to "THCG, Inc."
6. Conditions to Closing.
(a) Conditions Precedent to Each Party's Obligations.
The respective obligations of each party hereunder are subject
to the fulfillment or satisfaction on or before the Closing of each of the
following conditions (any one or more of which may be waived in writing by the
Company or Greenwich II (on behalf of all the Purchasers), as the case may be):
(i) All consents and approvals of the Boards of
Directors and shareholders of the Company and the other parties to the Merger
Agreement and the Related Transactions required for the consummation of the
Merger, the change of the name of the Company to "THCG, Inc.", the Related
Transactions and the transactions under the Purchaser Documents shall have been
obtained. All of the other conditions to the obligations of the parties to
consummate the Merger, the Related Transactions and the transactions under the
Purchaser Documents, and to effect the name change, shall have been satisfied
subject only to: (A) the filing of articles of merger with the Secretary of
State of the New York to effect the Merger; and (B) the filing of the BDC
Withdrawal; and (C) the escrow of the documents pertaining to the Related
Transactions and, in accordance with the terms of such escrow arrangements, such
documents pertaining thereto being released from escrow prior to, or at the same
time as, the release of the "Escrow Documents" (as defined in the Escrow
Agreement") in accordance with the terms of Section 4(a) of the Escrow
Agreement.
(ii) No Law or Governmental Order shall have been
enacted, entered, promulgated or enforced which prohibits, restrains, enjoins or
restricts the consummation of the transactions contemplated by the Purchaser
Documents, or which subjects any party to substantial damages as a result of the
consummation of the transactions contemplated by the Purchaser Documents.
(iii) All required consents, approvals, waivers and
authorizations of any Governmental Entity or Regulatory Agency which are
necessary to effect the transactions contemplated by the Purchaser Documents at
the Closing shall have been obtained.
(iv) The Escrow Agreement shall have been executed
and delivered by the parties hereto and the Escrow Agent; and the Escrow
Documents, the Shares and the
14
Warrants and the Purchase Price shall have been deposited with the Escrow Agent
in accordance with this Agreement and the Escrow Agreement.
(b) Conditions Precedent to Obligations of the Company.
The obligations of the Company hereunder are subject to the
fulfillment or satisfaction on or before the Closing Date of each of the
following conditions (any one or more of which may be waived in writing by the
Company):
(i) Accuracy of Representations and Warranties. The
representations and warranties of each Purchaser set forth in Section 4 hereof
shall be true and accurate in all material respects (other than those qualified
by materiality or Material Adverse Effect which shall be true and accurate) on
and as of the Closing Date with the same force and effect as if they had been
made at the Closing, and each Purchaser shall execute and deliver a certificate
to such effect by an officer of such Purchaser.
(ii) Covenants. Each Purchaser shall have performed
and complied in all material respects with all of its covenants required to be
performed by it under the Purchaser Documents on or before the Closing Date, and
each Purchaser shall execute and deliver a certificate to such effect by an
officer of such Purchaser.
(iii) Delivery of Certificates. At the Closing, each
Purchaser shall deliver the certificates required by Sections 6(b)(i) and (ii)
hereof to the Escrow Agent for deposit into escrow pursuant to the terms and
conditions of the Escrow Agreement.
(c) Conditions Precedent to Obligations of the
Purchasers.
The obligations of the Purchasers hereunder are subject to the
fulfillment or satisfaction on or before the Closing Date of each of the
following conditions (any one or more of which may be waived in writing by
Greenwich II, on behalf of the Purchasers):
(i) Accuracy of Representations and Warranties. The
representations and warranties of the Company set forth in Section 3 hereof and
the representations and warranties of the Company, Newco and Tower Hill set
forth in the Merger Agreement shall be true and accurate in all material
respects (other than those qualified by materiality or Material Adverse Effect
which shall be true and accurate) on and as of the Closing Date with the same
force and effect as if they had been made at the Closing, and the Company shall
execute and deliver a certificate to such effect by an officer of the Company.
(ii) Covenants. The Company shall have performed and
complied in all material respects with all of the covenants required to be
performed by the Company under the Purchaser Documents on or before the Closing
Date, and the Company shall execute and deliver a certificate to such effect by
an officer of the Company.
(iii) Delivery of Certificates. At the Closing, the
Company shall deliver the certificates issued pursuant to Sections 6(c)(i) and
(ii) to the Escrow Agent for deposit into escrow pursuant to the terms and
conditions of the Escrow Agreement.
(iv) Board Nominee. The Board of Directors of the
Company shall have elected Xxxxx Xxxxx to the Board of Directors of the Company
as the Purchaser Nominee
15
effective upon the satisfaction of the terms of Section 4(a) of the Escrow
Agreement; and the THSI Principals shall have executed and delivered to the
Escrow Agent, for deposit into escrow pursuant to the terms and conditions of
the Escrow Agreement, an agreement substantially in the form attached hereto as
Exhibit D hereto wherein the THSI Principals agree to vote their shares for the
election of the Purchaser Appointee as a director of the Company (the "Voting
Agreement").
(v) Issuance of the Securities. The Securities shall
have been duly authorized and validly issued pursuant to Section 2(c) hereof
(against the payment of the purchase price therefor pursuant to Section 2(b)
hereof), free and clear of all liens, encumbrances and claims and rights of
third parties (including without limitation preemptive rights, but excluding
liens, encumbrances, claims and rights of third parties claiming by, through or
under any Purchaser); and the Purchasers shall have received the Legal Opinions.
7. Termination of Agreement.
(a) Termination. This Agreement may be terminated at any time
prior to the Closing Date:
(i) by mutual written consent duly executed by the
Company and Greenwich II (on behalf of the Purchasers);
(ii) by either Greenwich II (on behalf of the
Purchasers) or the Company, if the Merger Agreement is terminated in accordance
with its terms; or
(iii) by Greenwich II (on behalf of the Purchasers)
or the Company at any time after December 31, 1999 if the Closing shall not have
occurred on or before that date.
(b) Notice of Termination. Any termination of this Agreement
under Section 7(a) hereof will be effective by the delivery of written notice
(in accordance with the provisions of Section 10(b)) of the terminating party to
the other parties hereto.
(c) Effect of Termination. In the case of any termination of
this Agreement as provided in this Section 7, this Agreement shall be of no
further force and effect; provided, however, that a termination of this
Agreement shall not relieve any party from liability for any breach of this
Agreement or defeat or impair the right of any party to pursue such relief as
may otherwise be available to it as a result of any breach of this Agreement or
any of the representations, warranties, covenants or agreements contained
herein.
8. Legend on Certificates. Each stock certificate or warrant
certificate issued to represent the Securities and the Warrant Shares shall bear
the following (or a substantially equivalent) conspicuous legend on the face or
reverse side thereof:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR QUALIFIED
UNDER APPLICABLE STATE SECURITIES LAWS. NEITHER THESE
SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD,
PLEDGED, ASSIGNED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION STATEMENT AND QUALIFICATION IN
EFFECT WITH
16
RESPECT THERETO UNDER THE SECURITIES ACT AND ANY APPLICABLE
STATE SECURITIES LAW OR AN OPINION OF COUNSEL TO THE HOLDER OF
SUCH SECURITIES, WHICH COUNSEL AND OPINION ARE REASONABLY
SATISFACTORY TO THE COMPANY, THAT SUCH REGISTRATION AND
QUALIFICATION ARE NOT REQUIRED.
Any certificate issued at any time in exchange or substitution for any
certificate bearing such legend shall also bear such legend, unless in the
opinion of counsel for the Company, the Securities or the Warrant Shares
represented thereby need no longer be subject to the restrictions contained in
this Agreement. The Company shall not transfer on its books any certificate for
the Securities or the Warrant Shares in violation of the provisions of the
Purchaser Documents. The Company shall give appropriate stop transfer
instructions to its stock transfer agent with respect to the Securities and the
Warrant Shares.
9. Indemnification.
(a) The Company agrees to indemnify, defend and hold harmless
the Purchasers (and each officer, director, partner and Affiliate of the
Purchasers) from and against any and all losses, liabilities, damages,
deficiencies, costs or expenses (including reasonable attorneys' fees and
disbursements) (collectively, "Losses") based upon or arising out of or in
connection with any inaccuracy in or breach of any representation, warranty,
covenant or agreement of the Company contained in the Purchaser Documents.
(b) The Purchasers agree, jointly and severally, to indemnify,
defend and hold harmless the Company (and each officer, director, stockholder
and Affiliate of the Company) from and against any and all Losses based upon or
arising out of or connection with any inaccuracy in or breach of any
representation, warranty, covenant or agreement of any Purchaser contained in
the Purchaser Documents.
10. Miscellaneous.
(a) Entire Agreement; Assignment. The Purchaser Documents (a)
constitute the entire agreement between the parties hereto with respect to the
subject matter hereof and supersede all other prior agreements and
understandings, both written and oral, between the parties with respect to the
subject matter hereof, and (b) shall not be assigned by operation of law or
otherwise.
(b) Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly given upon receipt) by delivery in Person, by cable,
telegram, facsimile or telex, or by registered or certified mail (postage
prepaid, return receipt requested), to the other party as follows:
if to Purchaser: Greenwich Street Capital Partners II, L.P.
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxx and Xxxxxxx X. Xxxxxxx
Facsimile: (000) 000-0000
17
with a copy to: Dechert Price & Xxxxxx
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxx, Esq.
Facsimile: (000) 000-0000
if to the Company: Walnut Financial Services, Inc. (or THCG, Inc.)
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: President
Facsimile: (000) 000-0000
with a copy to: Xxxxxx Xxxxx Xxxxxxxx & Xxxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxxx, Esq.
Facsimile: (000) 000-0000
or to such other address, facsimile number or Person's attention as the Person
to whom notice is given may have previously furnished to the other in writing in
the manner set forth above.
(c) Parties in Interest. The Purchaser Documents shall be
binding upon and inure solely to the benefit of each party hereto and its
successors and permitted assigns, and except for those parties indemnified
pursuant to Section 9 or pursuant to the provisions of Section 8 of the
Registration Rights Agreement, nothing in the Purchaser Documents, express or
implied, is intended to or shall confer upon any other Person any rights,
benefits or remedies of any nature whatsoever under or by reason of the
Purchaser Documents.
(d) Severability. If any term or other provision of this
Agreement is invalid, illegal or unenforceable, all other provisions of this
Agreement shall remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party.
(e) Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an original, but all of
which shall constitute one and the same agreement.
(f) Interpretation. The headings herein are for convenience of
reference only, do not constitute part of this Agreement and shall not be deemed
to limit or otherwise affect any of the provisions hereof. Where a reference in
this Agreement is made to a Section, Article, Schedule or Exhibit, such
reference shall be to a Section or Article of or Schedule or Exhibit to this
Agreement unless otherwise indicated. Where the reference "hereby" or "herein"
appears in this Agreement, such reference shall be deemed to be a reference to
this Agreement as a whole. Whenever the words "include," "includes" or
"including" are used in this Agreement, they shall be deemed to be followed by
the words "without limitation." Words denoting the singular include the plural,
and vice versa, and references to it or its or words denoting any gender shall
include all genders.
(g) Governing Law and Venue. THIS AGREEMENT SHALL BE DEEMED TO
BE MADE IN AND IN ALL RESPECTS SHALL BE INTERPRETED, CONSTRUED AND
18
GOVERNED BY AND IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK WITHOUT
REGARD TO THE CONFLICT OF LAW PRINCIPLES THEREOF.
(h) Waiver of Jury Trial. THE PURCHASERS AND THE COMPANY
IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, ALL RIGHTS TO TRIAL
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED UPON CONTRACT,
TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THE PURCHASER DOCUMENTS OR ANY
OF THE TRANSACTIONS CONTEMPLATED HEREBY.
(i) Expenses. Each party shall bear its own expenses in
connection with the negotiation and execution of this Agreement and the
transactions contemplated hereby, except that at the Closing the Company shall
reimburse Greenwich II, on behalf of the Purchasers, for their reasonable
out-of-pocket expenses in connection with the foregoing, up to an aggregate
amount of $50,000.
* * *
IN WITNESS WHEREOF, each of the parties has caused this
Agreement to be duly executed on its behalf as of the day and year first above
written.
Greenwich Street Capital Partners II, L.P.
GSCP Offshore Fund, L.P.
Greenwich Fund, L.P.
Greenwich Street Employees Fund, L.P.
TRV Executive Fund, L.P.
By: Greenwich Street Investments II,
L.L.C., their general partner
Walnut Financial Services, Inc.
By:____________________________ By: ______________________________________
Xxxx X. Xxxxxx Print Name:
President Print Title:
19
