Exhibit 2.4
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STOCK PURCHASE AGREEMENT
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As of February 7, 2000
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT (this "Agreement"), dated as of
February 7, 2000, among THCG, Inc., a Utah company (the "Purchaser"), and the
stockholders of Global Credit Services, Inc., a Delaware corporation (the
"Company"), listed on Schedule I hereto (individually, a "Seller," and,
collectively, the "Sellers"). Certain other capitalized terms used in this
Agreement have the meanings give them in Section 6.13.
WHEREAS, as of the date hereof, each of the Sellers is the
record holder and beneficial owner of the number of shares of common stock, par
value $0.001 per share, of the Company (the "Company Common Stock") set forth
opposite such Seller's name on Schedule I;
WHEREAS, the Purchaser desires to purchase from each Seller,
and each Seller desires to sell to the Purchaser, the number of shares of
Company Common Stock set forth opposite such Seller's name on Schedule I, for
the consideration set forth in Section 1.1; and
WHEREAS, as a result of the transactions contemplated by this
Agreement, the Purchaser will own 25% or more of the Company on a fully diluted
basis;
NOW, THEREFORE, in consideration of the premises and mutual
covenants and obligations hereinafter set forth and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Purchaser and each of the Sellers, intending to be legally bound, hereby agree
as follows:
ARTICLE I
PURCHASE AND SALE OF COMPANY COMMON STOCK
SECTION 1.1. Agreement to Sell and Purchase Company Common
Stock.
(a) Subject to the terms and conditions hereof, on the Closing
Date, each Seller shall sell and deliver to the Purchaser, free and clear of all
Liens, and the Purchaser shall purchase and accept from such Seller, the number
of shares of Company Common Stock set forth opposite such Seller's name on
Schedule I in consideration for which the Purchaser shall, subject to Section
1.1(c), issue to such Seller a number of shares of common stock, par value $0.01
per share, of the Purchaser (the "THCG Common Stock") equal to the product of
(i) the number of shares of Company Common Stock set forth opposite such
Seller's name on Schedule I, and (ii) the quotient, rounded to the nearest
1/10,000, obtained by dividing the "Fair Market Value Per Share of THCG Common
Stock" into $1.3957. For the purposes of this Section 1.1(a), the "Fair Market
Value Per Share of THCG Common Stock" shall be $23.00. For the purposes of
Section 1.1(b), the "Fair Market Value Per Share of THCG Common Stock" means the
volume weighted average sales prices of one share of THCG Common Stock on the
NASDAQ National Market for the ten consecutive trading days ending three trading
days prior to the effective date of the Registration Statement referred to in
Section 5.1. The number of shares of Company Common Stock which such Seller
shall deliver to the Purchaser on the Closing Date is hereinafter referred to as
the "Company Shares" and the number of shares of
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THCG Common Stock which the Purchaser shall deliver to such Seller on the
Closing Date, as the same may be recalculated and adjusted pursuant to the
provisions of Section 1.1(b), is hereinafter referred to as the "THCG Shares."
(b) If the Fair Market Value Per Share of THCG Common Stock on
the effective date of the Registration Statement is more or less than the Fair
Market Value Per Share of THCG Common Stock on the Closing Date, THCG will
recompute the number of THCG Shares to be issued to each Seller in accordance
with the provisions of Section 1.1(a). In the event such recomputation results
in a number of shares of THCG Common Stock that is greater than the number of
THCG Shares delivered to such Seller on the Closing Date, the Purchaser shall,
subject to Section 1.1(c), promptly deliver to such Seller a certificate
representing such additional shares of THCG Common Stock. In the event such
recomputation results in a number of shares of THCG Common Stock that is lower
than the number of THCG Shares delivered to such Seller on the Closing Date,
such Seller shall promptly return to the Purchaser the certificate for THCG
Shares delivered to him or it on the Closing Date against receipt from the
Purchaser of a new certificate for shares of THCG Common Stock in the recomputed
amount. In no event, however, shall the number of shares of THCG Common Stock
delivered to such Seller on the Closing Date increase or decrease by more than
twenty percent (20%); provided, however, that in the event that the Registration
Statement is declared effective by the SEC on a date that is more than 180
calendar days but less than 365 days from the Closing Date, such increase or
decrease shall be no more than forty percent (40%); provided further, that in
the event that the Registration Statement is declared effective by the SEC on a
date that is more than 365 days from the Closing Date, such increase or decrease
shall be no more than fifty percent (50%).
(c) In no event shall any Seller be entitled to a fractional
share of THCG Common Stock pursuant to Section 1.1(a) or 1.1(b), but, in lieu
thereof, THCG shall issue to each Seller otherwise entitled to a fraction of a
share of THCG Common Stock one whole share of THCG Common Stock in respect of
such fraction.
(d) Notwithstanding any provision of this Agreement to the
contrary, in lieu of delivering to the Sellers certificates for the full number
of THCG Shares provided for in Section 1.1(a), the Purchaser shall deliver or
cause to be delivered (A) to each Seller a certificate, registered in the name
of such Seller, for a number of shares of THCG Common Stock equal to 50% of the
aggregate number of THCG Shares otherwise issuable to such Seller on the Closing
Date pursuant to Section 1.1(a); and (B) to Xxxxxx Xxxxx Xxxxxxxx & Xxxxxxx LLP
as escrow agent (the "Escrow Agent") for deposit into the escrow account
provided for in the escrow agreement (the "Escrow Agreement") attached hereto as
Exhibit 1.1(d), a certificate, registered in the name of the Escrow Agent, for
the number of shares of THCG Common Stock equal to 50% of the aggregate number
of THCG Shares otherwise issuable to each Seller pursuant to Sections 1.1(a) and
1.1(c) on the Closing Date (the "Escrow Amount"), which certificate will be held
in the escrow account and disposed of by the Escrow Agent in accordance with the
terms and provisions of the Escrow Agreement. In lieu of depositing any
fractional shares into escrow, each Seller shall deposit with the Escrow Agent
one whole share of THCG Common Stock in respect of such fraction.
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SECTION 1.2. Closing. The closing of the transactions
contemplated by Section 1.1(a) is taking place on the date hereof at the offices
of Xxxxxx Xxxxx Xxxxxxxx & Xxxxxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000 (the date hereof sometimes being referred to herein as the "Closing
Date").
SECTION 1.3. Delivery of Securities. At the Closing, against
delivery by the Purchaser to each Seller of a certificate representing such
Seller's THCG Shares (less such Seller's Escrow Amount), each Seller shall
deliver to the Purchaser a stock certificate representing such Seller's Company
Shares, free and clear of all Liens, which stock certificate shall be duly
endorsed to the Purchaser or accompanied by duly executed stock powers endorsed
in blank in form acceptable to the Purchaser.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
Each Seller hereby represents and warrants to the Purchaser as
to himself, herself or itself as follows:
SECTION 2.1. Authority; No Conflict.
(a) Such Seller has the right, power, authority and capacity
to execute and deliver this Agreement, to consummate the transactions
contemplated by this Agreement, and to perform such Seller's obligations under
this Agreement. This Agreement has been duly and validly authorized and
approved, executed and delivered by such Seller and, assuming the due
authorization, execution and delivery of the same by the Purchaser, constitutes
a valid, legal and binding obligation of such Seller enforceable against such
Seller 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).
(b) Neither the execution, delivery and performance by such
Seller of this Agreement nor the consummation by such Seller of the transactions
contemplated by this Agreement will 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 Contract or
obligation or Governmental Order to which such Seller is a party or by which
such Seller or any of his or her properties or assets is bound or, if such
Seller is not an individual, the Organizational Documents of such Seller or any
Law applicable to such Seller or any of its properties or assets.
SECTION 2.2. Ownership of Company Shares. Such Seller owns, of
record and beneficially, and has good, valid and indefeasible title to and the
right to transfer to the Purchaser pursuant to this Agreement, his, her or its
Company Shares free and clear of any and all Liens of any kind or nature
whatsoever. There are no voting trusts, stockholder agreements or any other
Contracts or understandings to which such Seller is a party or by which
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such Seller or his, her or its Company Shares are bound with respect to the
issuance, sale, transfer, voting or registration of his, her or its Company
Shares. At the closing, Purchaser will acquire good, valid and marketable title
to such Seller's Company Shares free and clear as aforesaid.
SECTION 2.3. Legal Proceedings. There is no pending Proceeding
against such Seller that challenges, or may have the effect of preventing,
delaying or making illegal, or otherwise interfering with, any of the
transactions contemplated by this Agreement and, to the knowledge of such
Seller, no such Proceeding has been threatened, and no event or circumstance
exists that is reasonably likely to give rise to or serve as a basis for the
commencement of any such Proceeding.
SECTION 2.4. Investment Representations of the Sellers.
(a) The THCG Shares are being and will be acquired by such
Seller for his, her or its own account, and not for any other Person, for
investment only and with no intention of distributing or reselling (and such
Seller will not distribute or resell) such THCG Shares, or any portion thereof
or interest therein, in any transaction that would violate the registration
requirements of the securities Laws of the United States of America, or any
state, without prejudice, however, to the rights of such Seller at all times to
sell or otherwise dispose of all or any part of the THCG Shares under an
effective registration statement or applicable exemption from registration under
the Securities Act and any applicable state securities Law, subject to this
Agreement and any other Contract to which such Seller is a party. Such Seller
has no Contract or arrangement with any Person to sell, transfer or pledge to
such Person the THCG Shares, any portion thereof or interest therein and such
Seller has no present plans to enter into any such Contract or arrangement.
(b) Such Seller is an accredited investor as that term is
defined in Rule 501 under the Securities Act, and has such knowledge and
experience in financial and business matters that he or she is capable of
evaluating the merits and risks of an investment in the THCG Shares. Such Seller
is able to bear the risks associated with an investment in the THCG Shares.
(c) Such Seller has read this Agreement and all other
documents provided by the Purchaser in connection herewith, including the SEC
Reports, and fully understands the terms under which the THCG Shares are being
issued to him or her pursuant hereto. The Purchaser has made available to such
Seller the opportunity to ask questions of and receive answers from the
Purchaser concerning the Purchaser and the terms and conditions under which the
THCG Shares will be issued to him or her and to obtain any additional
information which the Purchaser possesses or can acquire without unreasonable
effort or expense that is necessary to verify the accuracy of information
furnished in connection with this Agreement or in response to any request for
information. Such Seller is satisfied with such answers and information.
(d) Such Seller agrees that, so long as required by Law,
certificates evidencing the THCG Shares and any securities issued in exchange
for or in respect thereof shall bear a legend to the following effect:
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"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE
SOLD OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND APPLICABLE STATE
SECURITIES LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH LAWS."
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser hereby represents and warrants to each Seller as
follows:
SECTION 3.1. Organization and Qualification; Subsidiaries. The
Purchaser has been duly organized and is validly existing and in good standing
under the laws of Utah and has the requisite corporate power and authority to
own, lease and operate its properties and to carry on its business as it is now
being conducted. The Purchaser 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 failures to be so
qualified or licensed and in good standing that are not reasonably likely 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 Purchaser and its Subsidiaries
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 Purchaser and its Subsidiaries, taken as a whole, other
than any change, event or effect arising out of general economic conditions in
the United States; or (ii) that may prevent or materially delay performance of
this Agreement by the Purchaser or the consummation by the Purchaser of the
transactions contemplated by this Agreement, including the issuance of the THCG
Shares pursuant to this Agreement.
SECTION 3.2. Capitalization. The authorized capital stock of
the Purchaser consists of (i) 50,000,000 shares of the Purchaser Common Stock,
of which 11,739,113 shares are issued and outstanding as of February 3, 2000,
633,373 are reserved for issuance upon the exercise of outstanding warrants and
3,356,878 are reserved for issuance upon the exercise of outstanding options,
and (ii) 5,000,000 shares of preferred stock, no par value, of which no shares
are issued or outstanding. The THCG Shares issuable pursuant to this Agreement
have been duly authorized and upon issuance pursuant to this Agreement will be
validly issued, fully paid and nonassessable.
SECTION 3.3. Authority Relative to this Agreement; Board
Action. The Purchaser has all necessary corporate power and authority to execute
and deliver this Agreement, to consummate the transactions contemplated by this
Agreement, and to perform its obligations under this Agreement. The execution
and delivery by the Purchaser of this
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Agreement and the consummation by the Purchaser of the transactions contemplated
by this Agreement have been duly and validly authorized by the Board of
Directors of the Purchaser, and no other corporate proceedings on the part of
the Purchaser are, or will be, necessary to authorize this Agreement or to
consummate the transactions contemplated by this Agreement. This Agreement has
been duly and validly executed and delivered by the Purchaser and, assuming the
due authorization, execution and delivery of the same by each of the other
parties hereto, constitutes a valid, legal and binding agreement of the
Purchaser, enforceable against the Purchaser in accordance with its terms,
subject to (a) 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 (b) general principles of
equity (regardless of whether considered in a proceeding at law or in equity).
SECTION 3.4. SEC Filings. The Purchaser has furnished to each
of the Sellers a complete copy (including exhibits) of: (i) the Annual Report on
Form 10-K of Walnut Financial Services, Inc. ("Walnut") for the fiscal year
ended December 31, 1998 (the "Annual Report"), (ii) Walnut's Quarterly Reports
on Form 10-Q for the quarters ended March 31, 1999, June 30, 1999 and September
30, 1999 (the "Quarterly Reports"), (iii) Walnut's Definitive Proxy Statement on
Schedule 14A, filed September 30, 1999 (the "Proxy Statement"), and (iv) the
Purchaser's Current Reports on Form 8-K and Form 8-K/A, dated November 1, 1999,
December 29, 1999 and January 13, 2000 (collectively with the Annual Report, the
Quarterly Reports, the Proxy Statement, the "SEC Reports"). The SEC Reports, at
the respective time that each such document was filed with the SEC, (a) complied
as to form in all material respects with the rules and regulations of the SEC
under the Exchange Act, and (b) did not contain any untrue statement of a
material fact or 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 under which they were made, not misleading.
SECTION 3.5. Consents and Approvals; No Violations.
(a) 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 Purchaser of this Agreement or the
consummation by the Purchaser of the transactions contemplated by this
Agreement, except for those required (i) under the Securities Act, the Exchange
Act or the NASDAQ Additional Listing rules and (ii) such Filings and Approvals
that, if not made or obtained, are not reasonably likely to have, individually
or in the aggregate, a Material Adverse Effect.
(b) No consent or approval of any third party is, or will be,
necessary for the execution and delivery by the Purchaser of this Agreement or
the consummation of the transactions contemplated by this Agreement.
(c) Neither the execution, delivery and performance of this
Agreement or the consummation by the Purchaser of the transactions contemplated
by this Agreement will (i) conflict with or result in any breach of any
provision of the Organizational Documents of the Purchaser, (ii) 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
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acceleration or Lien) under, any of the terms, conditions or provisions of any
Contract or other obligation to which the Purchaser is a party or by which the
Purchaser or any of its properties or assets is bound, or (iii) assuming that
all Filings and Approvals have been made or obtained, violate any Law or any
Governmental Order applicable to the Purchaser or any of its properties or
assets, except in the cases of clauses (ii) or (iii) for violations, breaches or
defaults which are not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect.
SECTION 3.6. Absence of Changes. Except as disclosed in
writing to the Sellers or otherwise publicly disclosed by the Purchaser, since
November 1, 1999, the business of the Purchaser and its Subsidiaries has been
carried on only in the ordinary course and there has not been any event,
condition or occurrence that, individually or in the aggregate, has resulted or
which is reasonably likely to result in, a Material Adverse Effect.
SECTION 3.7. No Litigation. There is no Proceeding pending or,
to the knowledge of the Purchaser, threatened against the Purchaser which
questions the validity of this Agreement or any action to be taken by the
Purchaser in connection with the consummation of the transactions contemplated
by this Agreement or could otherwise prevent, delay, make illegal or otherwise
interfere with the consummation of such transactions.
SECTION 3.8. Disclosure. The representations and warranties by
the Purchaser contained in this Agreement 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 any fact required to be
stated therein or necessary in order to make the statements herein, in light of
the circumstances under which they were made, not misleading.
ARTICLE IV
CONDITIONS PRECEDENT TO THE CLOSING
SECTION 4.1. Conditions Precedent to the Closing. The
respective obligations of each party hereto pursuant to Section 1.1 are subject
to the satisfaction of each of the following conditions precedent at or prior to
the Closing:
(a) Representations and Warranties. The representations and
warranties of each party set forth in this Agreement or in any Schedule or
certificate delivered pursuant hereto shall be true and correct as of the date
of this Agreement and shall be deemed repeated as of the Closing Date and shall
then be true and correct, except to the extent a representation or warranty is
expressly limited by its terms to another date.
(b) Performance of Covenants. Each party shall have performed
and complied with all covenants and agreements contained herein required to be
performed or complied with by such party at or before the Closing Date.
(c) Stock Purchase Agreement. The Stock Purchase Agreement, of
even date herewith, between the Company and THCG Venture Partners I LLC shall
have been duly executed and delivered by each of the parties thereto.
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ARTICLE V
COVENANTS
The parties, as applicable, hereby covenant to and agree as follows:
SECTION 5.1. Registration Statement.
(a) The Purchaser shall prepare and, no later than March 31,
2000, file with the Commission a registration statement (the "Registration
Statement") under the Securities Act covering all of the THCG Shares issued to
the Sellers pursuant to this Agreement (the "Registrable Shares"). The Purchaser
shall use its commercially reasonable best efforts to (i) to cause such
registration statement to be declared effective by the Commission under the
Securities Act, and (ii) to cause such registration statement to remain
effective for a period of 90 days.
(b) With respect to the registration of Registrable Shares
pursuant to Section 5.1(a), the Purchaser may include in such registration any
Primary Shares or Other Shares; provided, however, that if the managing
underwriter advises the Purchaser that the inclusion of all Registrable Shares,
Primary Shares and Other Shares proposed to be included in such registration
would interfere with the successful marketing (including pricing) of the
Registrable Shares proposed to be included in such registration, then the number
of Registrable Shares, Primary Shares and/or Other Shares proposed to be
included in such registration shall be included in the following order:
(i) first, the Registrable Shares requested to be
included in such registration by the Sellers;
(ii) second, the Primary Shares; and
(iii) third, the Other Shares.
(c) Each of the Sellers hereby acknowledges that such Seller
is required to deliver a prospectus in connection with a sale of any Registrable
Shares pursuant to the Registration Statement and hereby agrees to furnish a
prospectus to each purchaser of such Seller's Registrable Shares, subject to the
provisions of Section 5.2(b).
SECTION 5.2. Registration Procedures.
(a) In connection with the preparation and filing of the
Registration Statement pursuant to Section 5.1, the Purchaser shall, as
expeditiously as practicable:
(i) furnish, at least five business days before
filing the Registration Statement, a prospectus relating thereto and
any amendments or supplements relating to the Registration Statement or
prospectus, copies of all such documents proposed to be filed (it being
understood that such five-business-day period need not apply to
successive drafts of the same document proposed to be filed so long as
such successive drafts are supplied to the Sellers in advance of
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the proposed filing by a period of time that is customary and
reasonable under the circumstances);
(ii) notify in writing the Sellers promptly (x) of the
receipt by the Purchaser of any notification with respect to any
comments by the Commission with respect to the Registration Statement
or prospectus or any amendment or supplement thereto or any request by
the Commission to amend or supplement the same or for additional
information with respect thereto, (y) of the receipt by the Purchaser
of any notification with respect to the issuance by the Commission of
any stop order suspending the effectiveness of the Registration
Statement or prospectus or any amendment or supplement thereto or the
initiation or threatening of any proceeding for that purpose, and (ii)
of the receipt by the Purchaser of any notification with respect to the
suspension of the qualification of such Registrable Shares for sale in
any jurisdiction or the initiation or threatening of any proceeding for
such purposes;
(iii) use its commercially reasonable best efforts to
register or qualify such Registrable Shares under such other securities
or blue sky laws of such jurisdictions as the Sellers reasonably
request and do any and all other acts and things which may be
reasonably necessary or advisable to enable the Sellers to consummate
the disposition in such jurisdictions of such Registrable Shares;
provided, however, that the Purchaser will not be required to qualify
generally to do business, subject itself to general taxation or consent
to general service of process in any jurisdiction where it would not
otherwise be required to do so but for this Section 5.2(a)(iii);
(iv) furnish to the Sellers such number of copies of a
summary prospectus or other prospectus, including a preliminary
prospectus, in conformity with the requirements of the Securities Act,
and such other documents (such as a term sheet) as the Sellers may
reasonably request in order to facilitate the public sale or other
disposition of such Registrable Shares;
(v) notify the Sellers on a timely basis at any time
when a prospectus relating to such Registrable Shares is required to be
delivered under the Securities Act of the happening of any event as a
result of which the prospectus included in the 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 light of the
circumstances then existing;
(vi) provide a transfer agent and registrar (which may
be the same entity and which may be the Purchaser) for such Registrable
Shares;
(vii) list such Registrable Shares on any national
securities exchange on which any shares of the THCG Common Stock are
listed;
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(viii) otherwise use its commercially reasonable best
efforts to comply with all applicable rules and regulations of the
Commission and the securities commission or other regulatory authority
of any relevant state or other jurisdiction and make available to its
securityholders, as soon as reasonably practicable, earnings statements
(which need not be audited) covering a period of 12 months beginning
within three months after the effective date of the Registration
Statement, which earnings statements shall satisfy the provisions of
Section 11(a) of the Securities Act; and
(ix) use its commercially reasonable best efforts to
take all other steps reasonably necessary to effect the registration of
such Registrable Shares contemplated hereby.
(b) In the event the Purchaser notifies the Sellers pursuant
to Sections 5.2 (a)(ii)(x) or (y) or 5.2(a)(v), the Sellers shall immediately
cease selling Registrable Securities pursuant to the Registration Statement
until the Purchaser furnishes the Sellers with an amendment or supplement to the
Registration Statement or prospectus and informs the Sellers that sales of
Registrable Securities pursuant to the Registration Statement may resume.
SECTION 5.3. Expenses.
All expenses incurred by the Purchaser in complying with
Sections 5.1 and 5.2 , including, all registration and filing fees (including
all expenses incident to filing with the National Association of Securities
Dealers, Inc.), fees and expenses of complying with securities and blue sky
laws, printing and distribution expenses, "road show" and other marketing
expenses and fees and expenses of the Purchaser's counsel and accountants shall
be paid by the Purchaser; provided, however, that all underwriting discounts and
selling commissions applicable to the Registrable Shares shall not be borne by
the Purchaser but shall be borne by the Sellers.
SECTION 5.4. Indemnification.
(a) In connection with the registration of the Sellers'
Registrable Shares under the Securities Act pursuant to this Agreement, the
Purchaser shall indemnify and hold harmless such Sellers (and their heirs and
personal representatives), each underwriter, broker or any other person acting
on behalf of such Sellers and each other person, if any, who controls any of the
foregoing persons within the meaning of the Securities Act against any losses,
claims, damages or liabilities, joint or several (or actions in respect
thereof), to which any of the foregoing persons may become subject under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement under which such Registrable Shares were registered under
the Securities Act, any preliminary prospectus or final prospectus contained
therein or otherwise filed with the Commission, any amendment or supplement
thereto or any document incident to registration or qualification of any
Registrable Shares, or arise out of or are based upon 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, with respect to any
prospectus, necessary to make the
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statements therein in light of the circumstances under which they were made not
misleading, or any violation by the Purchaser of the Securities Act or state
securities or blue sky laws applicable to the Purchaser in connection with such
registration or qualification under such state securities or blue sky laws; and
shall reimburse such Sellers (and their heirs and personal representatives),
such underwriter, such broker or such other person acting on behalf of the
Sellers of Registrable Shares and each such controlling person for any legal or
other expenses reasonably incurred by any of them in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the Purchaser shall not be liable in any such case to
the extent that any such loss, claim, damage, liability or action arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in said registration statement, preliminary prospectus,
final prospectus, amendment, supplement or document incident to registration or
qualification of any Registrable Shares in reliance upon and in conformity with
written information furnished to the Purchaser through an instrument duly
executed by such Sellers or underwriter specifically for use in the preparation
thereof.
(b) In connection with the registration of Registrable Shares
under the Securities Act pursuant to this Agreement, each Seller shall indemnify
and hold harmless and reimburse (in the same manner and to the same extent as
set forth in the preceding paragraph of this Section 5.4) the Purchaser, each
director of the Purchaser, each officer of the Purchaser who shall sign the
Registration Statement, each underwriter, broker or other person acting on
behalf of such Seller or the Purchaser and each person who controls any of the
foregoing persons within the meaning of the Securities Act with respect to any
statement or omission from the Registration Statement, any preliminary
prospectus or final prospectus contained therein or otherwise filed with the
Commission, any amendment or supplement thereto or any document incident to
registration or qualification of any Registrable Shares, if such statement or
omission was made in reliance upon and in conformity with written information
furnished to the Purchaser or such underwriter through an instrument duly
executed by such Seller specifically for use in connection with the preparation
of the Registration Statement, preliminary prospectus, final prospectus,
amendment, supplement or document; provided, however, that the maximum amount of
liability in respect of such indemnification shall be limited, in the case of
each such Seller, to an amount equal to the net proceeds actually received by
such Seller from the sale of Registrable Shares effected pursuant to such
registration.
(c) Promptly after receipt by an indemnified party of notice
of the commencement of any action involving a claim referred to in the preceding
paragraphs of this Section 5.4, such indemnified party will, if a claim in
respect thereof is made against an indemnifying party, give written notice to
the latter of the commencement of such action. In case any such action is
brought against an indemnified party, the indemnifying party will be entitled to
participate in and to assume the defense thereof, jointly with any other
indemnifying party similarly notified to the extent that it may wish, with
counsel reasonably satisfactory to such indemnified party, and after notice from
the indemnifying party to such indemnified party of its election so to assume
the defense thereof, the indemnifying party shall not be responsible for any
legal or other expenses subsequently incurred by the indemnified party in
connection with the defense thereof; provided, however, that if any indemnified
party shall have reasonably concluded that there may be one or more legal or
equitable defenses available to such indemnified party which are additional to
or conflict with those available to the indemnifying party, the indemnifying
party shall not have the right to assume the defense of such action on
-12-
behalf of such indemnified party and such indemnifying party shall reimburse
such indemnified party and any person controlling such indemnified party for
that portion of the fees and expenses of any one counsel retained by the
indemnified party which is reasonably related to the matters covered by the
indemnity agreement provided in this Section 5.4. Anything in this Section 5.4
to the contrary notwithstanding, (i) an indemnifying party shall not settle any
claim or action or consent to the entry of any judgment therein unless the
indemnified party is fully released and discharged as a result thereof, and (ii)
an indemnified party shall not settle any claim or action or consent to the
entry of any judgment without the prior written consent of the indemnifying
party.
(d) If the indemnification provided for in this Section 5.4 is
held by a court of competent jurisdiction to be unavailable to an indemnified
party with respect to any loss, claim, damage, liability or action referred to
herein, then the indemnifying party, in lieu of indemnifying such indemnified
party hereunder, shall contribute to the amounts paid or payable by such
indemnified party as a result of such loss, claim, damage, liability or action
in such proportion as is appropriate to reflect the relative fault of the
indemnifying party on the one hand and of the indemnified party on the other in
connection with the statements or omissions which resulted in such loss, claim,
damage, liability or action as well as any other relevant equitable
considerations. The relative fault of the indemnifying party and of the
indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the indemnifying party or by the indemnified party and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. Notwithstanding the foregoing, the maximum
amount which any Seller shall be required to contribute pursuant to the
provisions of this Section 5.4(d) shall be limited to an amount equal to the net
proceeds actually received by such Seller from the sale of Registrable
Securities effected pursuant to such registration. No party who has been guilty
of fraudulent misrepresentation within the meaning of Section 11(a) of the
Securities Act shall be entitled to contribution.
ARTICLE VI
MISCELLANEOUS
SECTION 6.1. Further Assurances. By its signature hereto, each
party consents and agrees to all of the transactions contemplated hereby. Each
party shall execute, deliver, file and record any and all instruments,
certificates, agreements and other documents, and take any and all other actions
as reasonably requested by any other party hereto in order to consummate and
further effectuate the transactions contemplated hereby.
SECTION 6.2. Survival of Representations, Warranties and
Agreements, Etc. All representations and warranties herein or made pursuant
hereto shall survive the Closing. All agreements contained herein shall survive
indefinitely until, by their respective terms, they are no longer operative.
SECTION 6.3. Specific Performance. Each party hereto
recognizes and acknowledges that a breach by such party of any covenants or
agreements contained in this Agreement will cause the other party to sustain
damages for which it would not have an adequate
-13-
remedy at law for money damages, and therefore each party agrees that in the
event of any such breach the non-breaching party shall be entitled to the remedy
of specific performance of such covenant and agreement and injunctive and other
equitable relief in addition to any other remedy to which such non-breaching
parties may be entitled, at law or in equity, without the posting of any bond
and without proving that damages would be inadequate.
SECTION 6.4. Successors and Assigns. This Agreement shall bind
and inure to the benefit of the parties hereto and the respective successors and
permitted assigns of such parties. The rights and duties of the Purchaser as set
forth herein may be freely assigned, in whole or in part, by the Purchaser to
any Affiliate thereof.
SECTION 6.5. Entire Agreement. This Agreement contains the
entire agreement among the parties with respect to the subject matter hereof and
supersedes all prior and contemporaneous arrangements or understandings with
respect thereto.
SECTION 6.6. Notices. All notices, requests, consents and
other communications hereunder to any party shall be deemed to be sufficient if
contained in a written instrument delivered in person or sent by telecopy,
nationally-recognized overnight courier or first class-registered or certified
mail, return receipt requested, postage prepaid, addressed to such party at the
address set forth below, or such other address, telecopy number or person's
attention, as may hereafter be designated in writing by such party to the other
parties:
(a) if to a Seller, to:
the address set forth
beneath such Seller's
name on Schedule I
with a copy to:
Xxxxxxx, Xxxxxxxxx LLP
Xxx Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxx, Esq.
Telecopier: (000) 000-0000
(b) if to the Purchaser, to:
THCG, Inc.
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxx Xxxxx
Telecopier: (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.
Telecopier: (000) 000-0000
-14-
All such notices, requests, consents and other communications shall be deemed to
have been delivered (i) in the case of personal delivery or delivery by
telecopy, on the date of such delivery, (ii) in the case of dispatch by
nationally-recognized overnight courier, on the next business day following such
dispatch and (iii) in the case of mailing, on the third business day after the
posting thereof.
SECTION 6.7. Amendment; Waiver. The terms and provisions of
this Agreement may not be modified or amended, nor may any of the provisions
hereof be waived, temporarily or permanently, except pursuant to a written
instrument executed by the Purchaser and any Seller to be bound thereby.
SECTION 6.8. Counterparts. This Agreement may be executed in
any number of counterparts, and each such counterpart hereof shall be deemed to
be an original instrument, but all such counterparts together shall constitute
but one agreement.
SECTION 6.9. Interpretation. The table of contents and
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 the meaning
of any of the provisions hereof. Where a reference in this Agreement is made to
a Section, Article or Schedule, such reference shall be to a Section or Article
of or Schedule to this Agreement unless otherwise indicated. Where the reference
"hereof," "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..
SECTION 6.10. Severability. If any provisions of this
Agreement shall be determined to be illegal and unenforceable by any court of
law, the remaining provisions shall be severable and enforceable in accordance
with their terms.
SECTION 6.11. Governing Law and Venue. THIS AGREEMENT SHALL BE
DEEMED TO BE MADE IN AND IN ALL RESPECTS SHALL BE INTERPRETED, CONSTRUED AND
GOVERNED BY AND IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK WITHOUT
REGARD TO THE CONFLICT OF LAW PRINCIPLES THEREOF.
SECTION 6.12. Waiver of Jury Trial. EACH OF THE PARTIES HERETO
IRREVOCABLY WAIVES, 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 THIS AGREEMENT OR ANY OF THE
TRANSACTIONS CONTEMPLATED HEREBY.
-15-
SECTION 6.13. Certain Definitions. For the purposes of this
Agreement, the following terms shall have the meanings ascribed to them in this
Section 6.13:
(1) "Affiliate" means, with respect to any Person, any Person
directly or indirectly controlling, controlled by or under common control with
such Person.
(2) "Commission" means the Securities and Exchange Commission.
(3) "Contract" means any agreement, contract, obligation,
trust, promise, commitment, arrangement or undertaking (whether written or oral
and whether express or implied), other than those that have been terminated.
(4) "Exchange Act" means the Securities Exchange Act of 1934,
as amended, or any successor law.
(5) "Governmental Entity" means any federal or national, state
or provincial, municipal or local government, governmental authority, regulatory
or administrative agency (including the NASD), governmental commission,
department, board, bureau, agency or instrumentality, political subdivision,
court, tribunal, official arbitrator or arbitral body, in each case whether
domestic or foreign.
(6) "Governmental Order" means any order, writ, rule,
judgment, injunction, decree, stipulation, determination, decision, consent,
agreement or award of, or entered into by or with, any Governmental Entity.
(7) "Law" means all applicable provisions of all
constitutions, treaties, statutes, laws (including common law), rules,
regulations, ordinances and codes or orders of any Governmental Entity.
(8) "Liability" means any liability or obligation of any
nature, whether accrued, contingent or otherwise, and whether due or to become
due or asserted or unasserted.
(9) "Lien" means any mortgage, lien, debt, pledge, security
interest, encumbrance, assessment, restriction, charge or other adverse claim or
interest of every nature.
(10) "Organizational Documents" means (a) the articles or
certificate of incorporation and the by-laws or code of regulations of a
corporation; (b) the partnership agreement and any statement of partnership of a
general partnership; (c) the limited partnership agreement and the certificate
of limited partnership of a limited partnership; (d) the articles or certificate
of formation and operating agreement of a limited liability company; (e) any
charter, trust certificate or document or similar document adopted or filed in
connection with the creation, formation or organization of a Person; and (e) any
and all amendments to any of the foregoing.
-16-
(11) "Other Shares" means at any time those shares of THCG
Common Stock which do not constitute Primary Shares or Registrable Shares.
(12) "Person" means any individual, corporation (including any
non-profit corporation), general or limited partnership, limited liability
company, joint venture, estate, trust, association, organization, labor union or
other entity or governmental body or Governmental Entity.
(13) "Primary Shares" means at any time the authorized but
unissued shares of THCG Common Stock or shares of THCG Common Stock held by the
Purchaser in its treasury.
(14) "Proceeding" means any suit, claim, action,
investigation, litigation, arbitration or other proceeding.
(15) "Securities Act" means the Securities Act of 1933, as amended, or any
successor law.
(16) "Subsidiary" or "Subsidiaries" of any Person means any
corporation, partnership, limited liability company or other legal entity of
which such Person, either directly or indirectly through one or more any other
Subsidiaries, owns more than 50% of the stock or other equity interests the
holders of which are generally entitled to vote for the election of the board of
directors or other governing body of such legal entity.
-17-
IN WITNESS WHEREOF, the parties hereto have executed this
Stock Purchase Agreement as of the date first above written.
THCG, INC.
By: /s/ Xxx Xxxxx
---------------------------------
Name: Xxx Xxxxx
Title: Authorized signatory
SELLERS:
/s/ Xxx X. Xxxxxxxx
------------------------------------
Xxx X. Xxxxxxxx
Kensington Investment Associates
By: /s/ Xxxxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: General Partner
Corsair/Xxxxxx, Inc.
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------
Name: Xxxxxx X. Xxxxxx
Title: President
Xxxxx Xxxxxx Money Purchase Trust
By: /s/ Xxxxx Xxxxxx
---------------------------------
Name: Xxxxx Xxxxxx
Title: Trustee
Lyon Share Venture Capital
By: /s/ Xxxxx X. Xxxxx
---------------------------------
Name: Xxxxx X. Xxxxx
Title: Managing Partner
Xxxxxx Venture Capital
By: /s/ Xxxxx X. Xxxxx
---------------------------------
Name: Xxxxx X. Xxxxx
Title: Managing Partner
-18-
/s/ Xxxxxxxx X. Xxxxxx
------------------------------------
Xxxxxxxx X. Xxxxxx
/s/ Xxxxx Xxxxx
------------------------------------
Xxxxx Xxxxx
Xxxxxxxx Associates
By: /s/ Xxxxxx Xxxxxxx
---------------------------------
Name: Xxxxxx Xxxxxxx
Title: Partner
Mataponi Trust
By: /s/ Xxxxxx Xxxxx
---------------------------------
Name: Xxxxxx Xxxxx
Title: Trustee
/s/ Xxxxx Xxxxxxxx
------------------------------------
Xxxxx Xxxxxxxx
/s/ Xxxxx Xxxxxxx
------------------------------------
Xxxxx Xxxxxxx
/s/ Xxxxxx Xxxxxxx
------------------------------------
Xxxxxx Xxxxxxx
Xxxxxxxxx Associates, Inc.
By: /s/ Xxxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: President
-19-
Table of Contents
Page
----
ARTICLE I
PURCHASE AND SALE OF COMPANY COMMON STOCK
SECTION 1.1. Agreement to Sell and Purchase Company Common Stock.........2
SECTION 1.2. Closing.....................................................4
SECTION 1.3. Delivery of Securities......................................4
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
SECTION 2.1. Authority; No Conflict......................................4
SECTION 2.2. Ownership of Company Shares.................................4
SECTION 2.3. Legal Proceedings...........................................5
SECTION 2.4. Investment Representations of the Sellers...................5
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
SECTION 3.1. Organization and Qualification; Subsidiaries................6
SECTION 3.2. Capitalization..............................................6
SECTION 3.3. Authority Relative to this Agreement; Board Action..........6
SECTION 3.4. SEC Filings.................................................7
SECTION 3.5. Consents and Approvals; No Violations.......................7
SECTION 3.6. Absence of Changes..........................................8
SECTION 3.7. No Litigation...............................................8
SECTION 3.8. Disclosure..................................................8
ARTICLE IV
CONDITIONS PRECEDENT TO THE CLOSING
SECTION 4.1. Conditions Precedent to the Closing.........................8
ARTICLE V
COVENANTS
SECTION 5.1. Registration Statement......................................9
SECTION 5.2. Registration Procedures.....................................9
SECTION 5.3. Expenses...................................................11
SECTION 5.4. Indemnification............................................11
-i-
Page
----
ARTICLE VI
MISCELLANEOUS
SECTION 6.1. Further Assurances.........................................13
SECTION 6.2. Survival of Representations, Warranties and
Agreements, Etc............................................13
SECTION 6.3. Specific Performance.......................................13
SECTION 6.4. Successors and Assigns.....................................14
SECTION 6.5. Entire Agreement...........................................14
SECTION 6.6. Notices....................................................14
SECTION 6.7. Amendment; Waiver..........................................15
SECTION 6.8. Counterparts...............................................15
SECTION 6.9. Interpretation.............................................15
SECTION 6.10. Severability...............................................15
SECTION 6.11. Governing Law and Venue....................................15
SECTION 6.12. Waiver of Jury Trial.......................................15
SECTION 6.13. Certain Definitions........................................16
SCHEDULE I..................................................................iii
-ii-
SCHEDULE I
--------------------------------------------------------------------------------------------------------------------------------
Number of THCG
Shares Delivered to
the Seller on the
Number of THCG Closing Date (less
Number of Shares of Number of Company Shares to be Issued the shares
Company Common Stock Shares to be Sold to the Seller on deposited into
Name and Address of the Seller Owned by the Seller* by the Seller* the Closing Date escrow)
------------------------------ -------------------- -------------- ---------------- --------------------
J.R. Petschek 595,900 174,020 10,560 5,280
00 Xxxxxxxxx Xxxx
Xxxxxxxxx, Xxx Xxxx 00000
--------------------------------------------------------------------------------------------------------------------------------
Kensington Investment Associates 493,200 144,028 8,740 4,370
x/x Xxx Xxxxxxxx
00 Xxxxxxxxx Xxxx
Xxxxxxxxx, Xxx Xxxx 00000
--------------------------------------------------------------------------------------------------------------------------------
Corsair/Xxxxxx, Inc. 123,300 36,007 2,185 1,092
c/o Wassertein Xxxxxxx
00 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxx Xxxxxx
--------------------------------------------------------------------------------------------------------------------------------
Xxxxx Xxxxxx, as Trustee of the Xxxxx 246,600 72,013 4,370 2,185
Xxxxxx Money Purchase Trust
00 Xxxxxxxx Xxxxxx, Xxx. 0
Xxx Xxxx, Xxx Xxxx 00000
--------------------------------------------------------------------------------------------------------------------------------
Lyon Share Venture Capital 665,820 194,438 11,799 5,899
Woodfield Country Club
0000 XX 00 Xxxxxx
Xxxx Xxxxx, XX 00000
Attention: Xxxxx Xxxxx
--------------------------------------------------------------------------------------------------------------------------------
Xxxxxx Venture Capital 197,280 57,610 3,496 1,748
Woodfield Country Club
0000 XX 00 Xxxxxx
Xxxx Xxxxx, XX 00000
Attention: Xxxxx Xxxxx
--------------------------------------------------------------------------------------------------------------------------------
Xxxxxxxx X. Xxxxxx 41,100 12,002 728 364
Xxxxxx, Xxxxxxxx & Xxxxxxxx, LLP
000 Xxxxx Xxxxx
Xxxxxx, XX 00000-0000
--------------------------------------------------------------------------------------------------------------------------------
Xxxxx Xxxxx 123,300 36,007 2,185 1,092
c/0 Tech Aerofoam Products
0000 X.X. 000xx Xxxxxx
Xxxxx, XX 00000
--------------------------------------------------------------------------------------------------------------------------------
-iii
Table of Contents
(continued)
--------------------------------------------------------------------------------------------------------------------------------
Number of THCG
Shares Delivered to
the Seller on the
Number of THCG Closing Date (less
Number of Shares of Number of Company Shares to be Issued the shares
Company Common Stock Shares to be Sold to the Seller on deposited into
Name and Address of the Seller Owned by the Seller* by the Seller* the Closing Date escrow)
------------------------------ -------------------- -------------- ---------------- --------------------
Xxxxxxxx Associates 2,550,000 566,437 34,373 17,186
c/o Xxxxxx Xxxxxxx
0000 Xxxxxxxx 00xx Xxxx
Xxxxxxxxxxxx
Xxxx Xxxxx, XX 00000
--------------------------------------------------------------------------------------------------------------------------------
Mataponi Trust 1,084,800 566,437 34,373 17,186
c/oHerrick Xxxxxxxxx LLP
0 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxxxxxxx
--------------------------------------------------------------------------------------------------------------------------------
Xxxxx Xxxxxxxx 2,011,750 587,489 35,650 17,825
000 X. 00xx Xxxxxx
Xxxxxxxxx 0-X
Xxx Xxxx, XX 00000
--------------------------------------------------------------------------------------------------------------------------------
Xxxxx Xxxxxxx 2,011,750 587,489 35,650 17,825
00 Xxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
--------------------------------------------------------------------------------------------------------------------------------
Xxxxxx Xxxxxxx 1,071,550 283,220 17,187 8,593
000 Xxxxx Xxxxx
Xxxxxx XX 00000
--------------------------------------------------------------------------------------------------------------------------------
Xxxxxxxxx Associates, Inc. 825,000 283,220 17,187 8,593
c/x Xxxxxx, Xxxxxx & Xxxxxxxx LLP
000 Xxxxx Xxxxx
Xxxxxx, XX 00000-0000
Attention: 13850-3657
--------------------------------------------------------------------------------------------------------------------------------
Total 12,041,350 3,600,417 218,483 109,238
--------------------------------------------------------------------------------------------------------------------------------
* All numbers calculated after giving effect to a 1,000-for-1 split of the
Company's Common Stock.
-iv-
