Exhibit 10.5
VOID AFTER 5:00 P.M., CENTRAL TIME ON AUGUST 2, 2004 NO._____________
NEITHER THIS WARRANT NOR ANY SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. NEITHER THIS WARRANT NOR ANY
SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT MAY BE OFFERED OR SOLD OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR
THE SECURITIES UNDER APPLICABLE SECURITIES LAWS, OR UNLESS OFFERED, SOLD OR
TRANSFERRED PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THOSE LAWS.
Right to Purchase 396,899 Shares of
Common Stock, $.01 par value
Date: July 6, 2001
THCG, INC.
AMENDED AND RESTATED STOCK PURCHASE WARRANT
THIS CERTIFIES THAT, for value received, CASTLE CREEK TECHNOLOGY
PARTNERS LLC, an Illinois limited liability company (the "Initial Holder," and
together with any transferees as permitted under this Warrant, the "Holder"), or
its registered assigns, is entitled to purchase from THCG, Inc., a Delaware
corporation (the "Company"), at any time or from time to time during the period
specified in Section 2 hereof, 396,899 fully paid and non-assessable shares of
the Company's Common Stock, $.01 par value (the "Common Stock"), at an exercise
price of $5.039 per share (the "Exercise Price"). This Warrant is being issued
pursuant to that certain Agreement to Convert and Exchange dated July 6, 2001 by
and between the Company and the Holder (the "Restructuring Agreement"). The
number of shares of Common Stock purchasable hereunder (the "Warrant Shares")
and the Exercise Price are subject to adjustment as provided in Section 4
hereof.
This Warrant is subject to the following terms, provisions, and
conditions:
1. Mechanics of Exercise. Subject to the provisions hereof,
including, without limitation, the limitations contained in Section 7(f) hereof,
this Warrant may be exercised as follows:
(a) Manner of Exercise. This Warrant may be exercised by the
Holder, in whole or in part, by the surrender of this Warrant (or evidence of
loss, theft, destruction or mutilation thereof in accordance with Section 7(c)
hereof), together with a completed exercise agreement in the form of the Form of
Exercise Agreement attached hereto as Exhibit 1 (the "Exercise Agreement"), to
the Company at the Company's principal executive offices
(or such other office or agency of the Company as it may designate by notice to
the Holder), and upon (i) payment to the Company in cash, by certified or
official bank check or by wire transfer to the account of the Company of the
Exercise Price for the Warrant Shares specified in the Exercise Agreement or
(ii) if the Holder elects to effect a Cashless Exercise (as defined in Section
10(c) below), delivery to the Company of a written notice of an election to
effect a Cashless Exercise for the Warrant Shares specified in the Exercise
Agreement. The Warrant Shares so purchased shall be deemed to be issued to the
Holder or ▇▇▇▇▇▇'s designees, as the record owner of such shares, as of the date
on which this Warrant shall have been surrendered, the completed Exercise
Agreement shall have been delivered and payment (or notice of an election to
effect a Cashless Exercise) shall have been made for such shares as set forth
above. Notwithstanding anything in the foregoing which may be to the contrary,
the effective date of any exercise shall be the date on which the Exercise
Agreement is delivered to the Company, so long as this Warrant is delivered to
the Company within three (3) business days after such date.
(b) Issuance of Certificates. Subject to Section 1(c) hereof,
certificates for the Warrant Shares so purchased, representing the aggregate
number of shares specified in the Exercise Agreement, shall be delivered to the
Holder within a reasonable time, not exceeding three (3) business days, after
this Warrant shall have been so exercised (the "Delivery Period"). The
certificates so delivered shall be in such denominations as may be reasonably
requested by the Holder and shall be registered in the name of Holder or such
other name as shall be designated by such Holder. If this Warrant shall have
been exercised only in part, then, unless this Warrant has expired, the Company
shall, at its expense, at the time of delivery of such certificates, deliver to
the Holder a new Warrant representing the number of shares with respect to which
this Warrant shall not then have been exercised.
(c) Fractional Shares. No fractional shares of Common Stock are
to be issued upon the exercise of this Warrant, but the Company shall pay a cash
adjustment in respect of any fractional share which would otherwise be issuable
in an amount equal to the same fraction of the Exercise Price of a share of
Common Stock (as determined for exercise of this Warrant into whole shares of
Common Stock); provided that in the event that sufficient funds are not legally
available for the payment of such cash adjustment any fractional shares of
Common Stock shall be rounded up to the next whole number.
2. Period of Exercise. This Warrant is exercisable at any time and
from time to time on or after the date hereof and before 5:00 P.M., Central
Standard Time on August 2, 2004 (the "Exercise Period").
3. Certain Agreements of the Company. The Company hereby covenants
and agrees as follows:
(a) Shares to be Fully Paid. All Warrant Shares will, upon
issuance in accordance with the terms of this Warrant, be validly issued, fully
paid and non-assessable and free from all taxes, liens, claims and encumbrances,
except those placed thereon by the Holder or any person claiming rights by,
through or under the Holder.
(b) Reservation of Shares. On the Closing Date (as defined in the
Restructuring Agreement) and thereafter, the Company shall at all times have
authorized and
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reserved for the purpose of issuance upon exercise of this Warrant a sufficient
number of shares of Common Stock to provide for the exercise of this Warrant.
(c) Certain Actions Prohibited. The Company will not, by
amendment of its charter or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities, or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms to be observed or performed by it hereunder, but will at all times in
good faith assist in the carrying out of all the provisions of this Warrant and
in the taking of all such actions as may reasonably be requested by the Holder
of this Warrant in order to protect the exercise privilege of the Holder of this
Warrant, consistent with the tenor and purpose of this Warrant. Without limiting
the generality of the foregoing, the Company (i) will not increase the par value
of any shares of Common Stock receivable upon the exercise of this Warrant above
the Exercise Price then in effect, and (ii) will take all such actions as may be
reasonably necessary or appropriate in order that the Company may at all times
validly and legally issue fully paid and nonassessable shares of Common Stock
upon the exercise of this Warrant.
4. Antidilution Provisions. Subject to Section 7(f), during the
Exercise Period, the Exercise Price and the number of Warrant Shares issuable
shall be subject to adjustment from time to time as provided in this Section 4.
In the event that any adjustment of the Exercise Price as required herein
results in a fraction of a cent, such Exercise Price shall be rounded up or down
to the nearest cent.
(a) Subdivision or Combination of Common Stock. If the Company,
at any time after the initial issuance of this Warrant, subdivides (by any stock
split, stock dividend, recapitalization, reorganization, reclassification or
otherwise) its shares of Common Stock into a greater number of shares, then,
after the date of record for effecting such subdivision, the Exercise Price in
effect immediately prior to such subdivision will be proportionately reduced. If
the Company, at any time after the initial issuance of this Warrant, combines
(by reverse stock split, recapitalization, reorganization, reclassification or
otherwise) its shares of Common Stock into a smaller number of shares, then,
after the date of record for effecting such combination, the Exercise Price in
effect immediately prior to such combination will be proportionately increased.
(b) Adjustment in Number of Shares. Upon each adjustment of the
Exercise Price pursuant to the provisions of Section 4(a), the number of shares
of Common Stock issuable upon exercise of this Warrant shall be adjusted by
multiplying a number equal to the Exercise Price in effect immediately prior to
such adjustment by the number of shares of Common Stock issuable upon exercise
of this Warrant immediately prior to such adjustment and dividing the product so
obtained by the adjusted Exercise Price.
(c) Major Transactions. (i) If the Company shall with the
approval of its Board of Directors consolidate or merge with or into any other
corporation or entity (other than a consolidation or merger in which the Company
is the surviving or continuing entity and its capital stock is unchanged in such
transaction) or there shall occur any share exchange pursuant to which all of
the outstanding shares of Common Stock are converted into other shares of stock,
securities or property, including cash, or there shall occur any other such
reclassification or change of the outstanding shares of Common Stock, or the
Company shall sell all or substantially all of its assets (each of the foregoing
being a "Major Transaction"), then the holder of this
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Warrant shall receive, in exchange for this Warrant (without payment of any
exercise price hereunder), a number of shares of stock or securities or property
(including cash) of the Company, or of the entity resulting from such Major
Transaction, to which a holder of the number of shares of Common Stock delivered
upon the exercise of this Warrant (pursuant to the cashless exercise feature
hereof) would have been entitled upon such Major Transaction had such holder so
exercised this Warrant (without regard to any limitations on exercise herein or
elsewhere contained, other than the Cap Amount) on the trading date immediately
preceding the effective date of such Major Transaction and had such Common Stock
been issued and outstanding and had such Holder been the holder of record of
such Common Stock at the time of the consummation of such Major Transaction (the
"Major Transaction Consideration"), and the Company shall make lawful provision
for the foregoing as a part of such Major Transaction.
(ii) No sooner than ten (10) business days nor later than five (5) business days
prior to the consummation of a Major Transaction, but not prior to the public
announcement of such Major Transaction, the Company shall deliver written notice
("Notice of Major Transaction") to each holder of a Warrant, which Notice of
Major Transaction shall be deemed to have been delivered one (1) business day
after the Company's sending such notice by telecopy (provided that the Company
sends a confirming copy of such notice on the same day by overnight courier) of
such Notice of Major Transaction. Such Notice of Major Transaction shall
indicate the amount and type of the Major Transaction Consideration which such
holder of a Warrant would receive under this Section.
(d) Minimum Adjustment of Exercise Price. No adjustment of the
Exercise Price shall be made in an amount of less than one percent (1%) of the
Exercise Price in effect at the time such adjustment is otherwise required to be
made, but any such lesser adjustment shall be carried forward and shall be made
at the time and together with the next subsequent adjustment which, together
with any adjustments so carried forward, shall amount to not less than one
percent (1%) of such Exercise Price.
(e) Other Notices. In case at any time:
(i) the Company shall declare any dividend upon the Common
Stock payable in shares of stock of any class or make any other distribution to
the holders of the Common Stock;
(ii) the Company shall offer for subscription pro rata to the
holders of the Common Stock any additional shares of stock of any class or other
rights;
(iii) there shall be any capital reorganization of the
Company, or reclassification of the Common Stock, or consolidation or merger of
the Company with or into, or sale of all or substantially all of its assets to,
another corporation or entity; or
(iv) there shall be a voluntary or involuntary dissolution,
liquidation or winding-up of the Company;
then, in each such case, the Company shall give to the Holder (a) notice of the
date on which the books of the Company shall close or a record shall be taken
for determining the holders of Common Stock entitled to receive any such
dividend, distribution or subscription rights or for
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determining the holders of Common Stock entitled to vote in respect of any such
reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation or winding-up and (b) in the case of any such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding-up, notice of the date (or, if not then known, a reasonable
approximation thereof by the Company) when the same shall take place. Such
notice shall also specify the date on which the holders of Common Stock shall be
entitled to receive such dividend, distribution or subscription rights or to
exchange their Common Stock for stock or other securities or property (including
cash) deliverable upon such reorganization, reclassification, consolidation,
merger, sale, dissolution, liquidation or winding-up, as the case may be. Such
notice shall be given at least thirty (30) days prior to the record date or the
date on which the Company's books are closed in respect thereto, but in no event
earlier than public announcement of such proposed transaction or event. Failure
to give any such notice or any defect therein shall not affect the validity of
the proceedings referred to in clauses (i), (ii), (iii) and (iv) above.
(f) Definitions of Common Stock. For purposes of this Section 4,
"Common Stock" includes the Common Stock and any additional class of stock of
the Company having no preference as to dividends or distributions on
liquidation, provided that the shares purchasable pursuant to this Warrant shall
include only Common Stock in respect of which this Warrant is exercisable, or
shares resulting from any subdivision or combination of such Common Stock, or in
the case of any reorganization, reclassification, consolidation, merger, or sale
of the character referred to in Section 4(c) hereof, the stock or other
securities or property provided for in such Section.
5. Issue Tax. The issuance of certificates for Warrant Shares upon
the exercise of this Warrant shall be made without charge to the Holder of such
shares for any issuance tax or other costs in respect thereof, provided that the
Company shall not be required to pay any tax which may be payable in respect of
any transfer involved in the issuance and delivery of any certificate in a name
other than the Holder.
6. No Rights or Liabilities as a Shareholder. This Warrant shall not
entitle the Holder to any voting rights or other rights as a shareholder of the
Company. No provision of this Warrant, in the absence of affirmative action by
the Holder to purchase Warrant Shares, and no mere enumeration herein of the
rights or privileges of the Holder, shall give rise to any liability of the
Holder for the Exercise Price or as a shareholder of the Company, whether such
liability is asserted by the Company or by creditors of the Company.
7. Transfer Exchange Redemption and Replacement of Warrant.
(a) Restriction on Transfer. This Warrant and the rights granted
to the Holder are transferable, in whole or in part, upon surrender of this
Warrant, together with a properly executed assignment in the form of the Form of
Assignment attached hereto as Exhibit 2, at the office or agency of the Company
referred to in Section 7(e) below. Until due presentment for registration of
transfer on the books of the Company, the Company may treat the registered
holder hereof as the owner and holder hereof for all purposes, and the Company
shall not be affected by any notice to the contrary.
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(b) Warrant Exchangeable for Different Denominations. This
Warrant is exchangeable, upon the surrender hereof by the Holder at the office
or agency of the Company referred to in Section 7(e) below, for new Warrants, in
the form hereof, of different denominations representing in the aggregate the
right to purchase the number of shares of Common Stock which may be purchased
hereunder, each of such new Warrants to represent the right to purchase such
number of shares as shall be designated by the Holder of at the time of such
surrender, up to the number so designated.
(c) Replacement of Warrant. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction, or mutilation of
this Warrant or, in the case of any such loss, theft, or destruction, upon
delivery, of an indemnity agreement reasonably satisfactory in form and amount
to the Company, or, in the case of any such mutilation, upon surrender and
cancellation of this Warrant, the Company, at its expense, will execute and
deliver, in lieu thereof, a new Warrant, in the form hereof, in such
denominations as Holder may reasonably request.
(d) Cancellation; Payment of Expenses. Upon the surrender of this
Warrant in connection with any transfer, exchange, or replacement as provided in
this Section 7, this Warrant shall be promptly canceled by the Company. The
Company shall pay all issuance taxes (other than securities transfer taxes) and
charges payable in connection with the preparation, execution, and delivery of
Warrants pursuant to this Section 7.
(e) Warrant Register. The Company shall maintain, at its
principal executive offices (or such other office or agency of the Company as it
may designate by notice to the Holder), a register for this Warrant, in which
the Company shall record the name and address of the person in whose name this
Warrant has been issued, as well as the name and address of each transferee and
each prior owner of this Warrant.
(f) No Five Percent Holders. Notwithstanding anything to the
contrary contained herein, the Warrant shall not be exercisable by the Holder to
the extent (but only to the extent) that, if exercisable by ▇▇▇▇▇▇, Holder would
beneficially own in excess of 4.9% (the "Applicable Percentage") of the shares
of Common Stock. For the purposes of this paragraph, beneficial ownership and
all determinations and calculations, including without limitation, with respect
to calculations of percentage ownership, shall be determined in accordance with
Section 13(d) of the Securities Exchange Act of 1934 (the "Exchange Act"), as
amended, and Regulation 13D and G thereunder. For clarification, it is expressly
a term of this Warrant that the limitations contained in this Section shall
apply to each successor Holder. The holders of Common Stock of the Company shall
be third-party beneficiaries of this Section 7(f) and the Company may not waive
this Section 7(f) without the consent of holders of a majority of its Common
Stock.
8. Notices. Any notice herein required or permitted to be given
shall be in writing and may be personally served or delivered by courier or by
confirmed telecopy, and shall be deemed delivered at the time and date of
receipt (which shall include telephone line facsimile transmission). The
addresses for such communications shall be:
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If to the Company:
THCG, INC.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Chief Financial Officer
and if to the Holder, at such address as Holder shall have provided in writing
to the Company, or at such other address as each such party furnishes by notice
given in accordance with this Section 8.
9. Governing Law; Jurisdiction. This Warrant shall be governed by
and construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed in the State of New York. The Company
irrevocably consents to the jurisdiction of the United States federal courts
located in the State of New York in any suit or proceeding based on or arising
under this Warrant and irrevocably agrees that all claims in respect of such
suit or proceeding may be determined in such courts. The Company irrevocably
waives the defense of an inconvenient forum to the maintenance of such suit or
proceeding. The Company agrees that a final nonappealable judgment in any such
suit or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on such judgment or in any other lawful manner.
10. Miscellaneous.
(a) Amendments. This Warrant and any provision hereof may only be
amended by an instrument in writing signed by the Company and the Holder.
(b) Descriptive Headings. The descriptive headings of the several
Sections of this Warrant are inserted for purposes of reference only, and shall
not affect the meaning or construction of any of the provisions hereof.
(c) Cashless Exercise. Notwithstanding anything to the contrary
contained in this Warrant, this Warrant may be exercised by presentation and
surrender of this Warrant to the Company at its principal executive offices with
a written notice of the Holder's intention to effect a cashless exercise,
including a calculation of the number of shares of Common Stock to be issued
upon such exercise in accordance with the terms hereof (a "Cashless Exercise").
In the event of a Cashless Exercise, in lieu of paying the Exercise Price in
cash, the Holder shall surrender this Warrant for the number of shares of Common
Stock determined by multiplying the number of Warrant Shares to which it would
otherwise be entitled by a fraction, the numerator of which shall be the
difference between the then current Market Price per share of the Common Stock
and the Exercise Price, and the denominator of which shall be such then current
Market Price per share of Common Stock. Notwithstanding anything in this Section
10(c) or elsewhere in this Warrant to the contrary, no Cashless Exercise may be
made at any time at which a registration statement covering the sale by the
Holder of all Warrant Shares to be received upon exercise hereof is effective
and available for use by such Holder for such sale.
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IN WITNESS WHEREOF, the Company has caused this Warrant to be signed
by its duly authorized officer.
THCG, Inc.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Chief Executive Officer
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EXHIBIT 1 TO STOCK PURCHASE WARRANT
FORM OF EXERCISE AGREEMENT
(To be Executed by the Holder in order to Exercise the Warrant)
The undersigned hereby irrevocably exercises the right to purchase
________________ of the shares of common stock of THCG, Inc., a Delaware
corporation (the "Company"), evidenced by the attached Warrant, and [herewith
makes payment of the Exercise Price with respect to such shares in full/ elects
to effect a Cashless Exercise pursuant to the terms of the Warrant, pursuant to
which the undersigned is surrendering the right to purchase ________ shares for
an Exercise Price of $_____________, with the current Market Price being
$_______________], all in accordance with the conditions and provisions of said
Warrant.
(i) The undersigned agrees not to offer, sell, transfer or
otherwise dispose of any Common Stock obtained on exercise of the Warrant,
except under circumstances that will not result in a violation of the Securities
Act of 1933, as amended, or any state securities laws.
(ii) The undersigned requests that stock certificates for
such shares be issued, and a Warrant representing any unexercised portion hereof
be issued, pursuant to the Warrant in the name of the Holder (or such other
person or persons indicated below) and delivered to the undersigned (or
designees) at the address (or addresses) set forth below:
Date:_________________________ _______________________________________
Signature of Holder
_______________________________________
Name of Holder (Print)
Address:
_______________________________________
_______________________________________
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EXHIBIT 2 TO THE STOCK PURCHASE WARRANT
FORM OF ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and
transfers all rights of the undersigned under the within Warrant, with respect
to the number of shares of Common Stock covered thereby set forth hereinbelow,
to:
Name of Assignee Address No. of Shares
---------------- ------- -------------
and hereby irrevocably constitutes and appoints as agent and attorney-in-fact to
transfer said Warrant on the books of the within-named corporation, with full
power of substitution in the premises.
Date: , ,
------------------------------- ----------
In the presence of
_____________________________
Name: ____________________________________________
Signature:________________________________________
Title of Signing Officer or Agent (if any):
Address:______________________________
______________________________
Note: The above signature should
correspond exactly with the name
on the face of the within
Warrant.
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