SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
THCG, Inc.
----------------
(Name of Issuer)
Common Stock, par value $.01
(Title of Class of Securities)
87242T 10 1
-----------
(CUSIP Number)
Joseph D. Mark
THCG, Inc.
650 Madison Avenue, 21st Floor
New York, New York 10022
(212) 223-0440
--------------------------------------
(Name, Address and Telephone Number of
Person Authorized to Receive Notices
and Communications)
with a copy to:
Peter S. Kolevzon, Esq.
Kramer Levin Naftalis & Frankel LLP
919 Third Avenue, New York, NY 10022
(212) 715-9100
November 1, 1999
------------------------------------
(Date of Event which Requires Filing
of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), 13d-1(f) OR 13d-1(g), check the following
box: |_|
Page 1 of 13 Pages
Exhibit Index appears on page 8
<PAGE>
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CUSIP No. 87242T 10 1 13D Page 2 of 13 Pages
- --------------------------------------------------------------------------------
NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
1 Joesph D. Mark
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
SC (see Item 3)
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
- --------------------------------------------------------------------------------
NUMBER OF SHARES 7 SOLE VOTING POWER
BENEFICIALLY 1,599,652.6 (see Item 5)
OWNED BY EACH ------------------------------------------------------
REPORTING PERSON 8 SHARED VOTING POWER
WITH Not Applicable
------------------------------------------------------
9 SOLE DISPOSITIVE POWER
1,599,652.6 (see Item 5)
------------------------------------------------------
10 SHARED DISPOSITIVE POWER
Not Applicable
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,599,652.6 (see Item 5)
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [X]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
14.0%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
- --------------------------------------------------------------------------------
Page 2 of 13 Pages
- --------------------------------------------------------------------------------
<PAGE>
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CUSIP No. 87242T 10 1 13D Page 3 of 13 Pages
- --------------------------------------------------------------------------------
NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
1 Joshua A. Mark 1999 Trust, Meryl Schlussel Mark, Trustee
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
SC (see Item 3)
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
New Jersey
- --------------------------------------------------------------------------------
NUMBER OF SHARES 7 SOLE VOTING POWER
BENEFICIALLY 186,141
OWNED BY EACH ------------------------------------------------------
REPORTING PERSON 8 SHARED VOTING POWER
WITH Not Applicable
------------------------------------------------------
9 SOLE DISPOSITIVE POWER
186,141
------------------------------------------------------
10 SHARED DISPOSITIVE POWER
Not Applicable
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
186,141
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
1.7%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
OO
- --------------------------------------------------------------------------------
Page 3 of 13 Pages
- --------------------------------------------------------------------------------
<PAGE>
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CUSIP No. 87242T 10 1 13D Page 4 of 13 Pages
- --------------------------------------------------------------------------------
NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
1 Rachel L. Mark 1999 Trust, Meryl Schlussel Mark, Trustee
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
SC (see Item 3)
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
New Jersey
- --------------------------------------------------------------------------------
NUMBER OF SHARES 7 SOLE VOTING POWER
BENEFICIALLY 186,141
OWNED BY EACH ------------------------------------------------------
REPORTING PERSON 8 SHARED VOTING POWER
WITH Not Applicable
------------------------------------------------------
9 SOLE DISPOSITIVE POWER
186,141
------------------------------------------------------
10 SHARED DISPOSITIVE POWER
Not Applicable
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
186,141
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
1.7%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
OO
- --------------------------------------------------------------------------------
Page 4 of 13 Pages
- --------------------------------------------------------------------------------
<PAGE>
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CUSIP No. 87242T 10 1 13D Page 5 of 13 Pages
- --------------------------------------------------------------------------------
NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
1 Samuel A. Mark 1999 Trust, Meryl Schlussel Mark, Trustee
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
SC (see Item 3)
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
New Jersey
- --------------------------------------------------------------------------------
NUMBER OF SHARES 7 SOLE VOTING POWER
BENEFICIALLY 186,141
OWNED BY EACH ------------------------------------------------------
REPORTING PERSON 8 SHARED VOTING POWER
WITH Not Applicable
------------------------------------------------------
9 SOLE DISPOSITIVE POWER
186,141
------------------------------------------------------
10 SHARED DISPOSITIVE POWER
Not Applicable
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
186,141
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
1.7%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
OO
- --------------------------------------------------------------------------------
Page 5 of 13 Pages
- --------------------------------------------------------------------------------
<PAGE>
Schedule 13D
Item 1. Security and Issuer
This Statement on Schedule 13D (the "Statement") relates to the common
stock, par value $0.01 per share (the "Common Stock"), of THCG, Inc. (formerly,
Walnut Financial Services, Inc.), a Utah corporation (the "Company"). The
principal executive office of the Company is located at 650 Madison Avenue, 21st
Floor, New York, New York 10022.
Item 2. Identity and Background.
(a) This Statement is being filed on behalf of:
Joseph D. Mark
Rachel L. Mark 1999 Trust, Meryl Schlussel Mark, Trustee
Joshua A. Mark 1999 Trust, Meryl Schlussel Mark, Trustee
Samuel A. Mark 1999 Trust, Meryl Schlussel Mark, Trustee.
The Rachel L. Mark 1999 Trust, the Joshua A. Mark 1999 Trust and the
Samuel A. Mark 1999 Trust are collectively referred to as the "Trusts,"
and together with Joseph D. Mark, the "Reporting Persons."
(b) The business address of the Reporting Persons is c/o THCG, Inc., 650
Madison Avenue, 21st Floor, New York, New York 10022.
(c) Joseph D. Mark is the co-Chief Executive Officer and a director of the
Company. The Company is engaged in three principal lines of business:
(i) investment banking, (ii) professional consulting services and (iii)
accounts receivable factoring. The address of the Company is set forth
in the response to Item 1.
(d) The Reporting Persons have not, during the five years prior to the date
hereof, been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors).
(e) The Reporting Persons have not been a party to a civil proceeding of a
judicial or administrative body of competent jurisdiction, as a result
of which such person was or is subject to a judgment, decree or final
order enjoining future violations of, or prohibiting or mandating
activities subject to, Federal or State securities laws or finding any
violation with respect to such laws.
(f) Joseph D. Mark is a citizen of the United States. Each of the Trusts is
organized in New Jersey.
Page 6 of 13 Pages
<PAGE>
Item 3. Source and Amount of Funds or Other Consideration.
The Reporting Persons acquired their beneficial ownership in the Common
Stock of the Company as a result of the consummation, on November 1, 1999, of
the merger (the "Merger") of Tower Hill Acquisition Corp., a New York
corporation and a wholly-owned subsidiary of the Company ("Newco"), with and
into Tower Hill Securities, Inc., a New York corporation ("Tower Hill"),
pursuant to the Amended and Restated Agreement and Plan of Merger (the "Merger
Agreement"), dated as of August 5, 1999, by and among the Company, Newco and
Tower Hill. Pursuant to Section 2.1(b) of the Merger Agreement, each share of
Tower Hill common stock outstanding immediately prior to the Merger was
converted into and exchanged for 37,228.145 shares of Common Stock of the
Company.
Item 4. Purpose of Transaction.
The Reporting Persons acquired the shares of Common Stock reported as
beneficially owned by them for investment purposes pursuant to Section 2.1(b) of
the Merger Agreement. Pursuant to Section 5.22 of the Merger Agreement, upon
consummation of the Merger, Joseph D. Mark became a co-Chief Executive Officer
and a director of the Company and certain other persons were appointed to the
Board of Directors of the Company.
Except as disclosed in this Item 4, the Reporting Persons have no
current plans or proposals which relate to or would result in any event
described in subparagraphs (a) through (j) of Item 4 of Schedule 13D.
Item 5. Interest in Securities of the Issuer.
(a) Joseph D. Mark beneficially owns an aggregate of 1,599,652.6 shares of
Common Stock, representing approximately 14.0% of the Common Stock outstanding.
This number includes 296,666.66 shares of Common Stock subject to options
exercisable within 60 days from the date of this Statement. Each of the Trusts
owns 186,141 shares of Common Stock, representing approximately 1.7% of the
Common Stock outstanding. The filing of this Statement shall not be construed as
an admission that Joseph D. Mark is, for the purposes of 13(d) or 13(g) of the
Securities Exchange Act of 1934, as amended (the "1934 Act"), or otherwise, the
beneficial owner of any of the Common Stock held by the Trusts.
(b) Joseph D. Mark has the sole power to vote, or direct the vote of, and the
sole power to dispose of, or direct the disposition of, the shares of Common
Stock owned by him. Meryl Schlussel Mark, as the trustee of each of the Trusts,
has the sole power to vote, or direct the vote of, and the sole power to dispose
of, or direct the disposition of, the shares of Common Stock owned by the
Trusts. The filing of this Statement shall not be construed as an admission that
Meryl Schlussel Mark is,
Page 7 of 13 Pages
<PAGE>
for the purposes of 13(d) or 13(g) of the 1934 Act, or otherwise, the beneficial
owner of any of the Common Stock held by the Trusts.
(c) Not applicable.
(d) Not applicable.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or
Relationships with Respect to the Securities of the
Issuer.
In connection with certain of the transactions contemplated by the
Merger Agreement, the Reporting Persons entered into a Voting Agreement, dated
as of November 1, 1999, among the Company, Greenwich Street Capital Partners II,
L.P. ("GSCP") and certain of its affiliates (together with GSCP, the "GSCP
Parties"), pursuant to which the Reporting Persons agreed to vote their shares
of Common Stock in favor of GSCP's nominee to the Board of Directors of the
Company.
Concurrently therewith, the Reporting Persons entered into a Tag-Along
Agreement with the Company and GSCP which provides that if any of the Reporting
Persons transfers his or its shares of Common Stock to a third party, the GSCP
Parties shall have the right to sell the shares of Common Stock held by them on
the same terms and conditions.
On November 2, 1999, Joseph D. Mark was granted an option to purchase
250,000 shares of Common Stock, which option is immediately exercisable.
Concurrently therewith, Mr. Mark was granted an option to purchase 200,000
shares of Common Stock in two classes of 100,000 and 100,000 shares
(respectively, the "First Option Class" and the "Second Option Class"). The
First Option Class is immediately exercisable as to 33,333.33 shares of Common
Stock; the balance of the First Option Class vests in equal quarterly
installments beginning on February 1, 2000 and ending on November 1, 2000. The
Second Option Class is immediately exercisable as to 13,333.33 shares of Common
Stock; the balance of the Second Option Class vests in equal quarterly
installments beginning on February 1, 2000 and ending on November 1, 2002. The
First Option Class and the Second Option Class may be reduced upon the
occurrence of certain events.
Item 7. Material to be Filed as Exhibits.
Exhibit A: Joint Filing Agreement
Exhibit B: Amended and Restated Agreement and Plan of
Merger, dated as of August 5, 1999, by and
among the Company, Newco and Tower
Page 8 of 13 Pages
<PAGE>
Hill(incorporated herein by reference to Exhibit A of
the Definitive Proxy Statement filed by Walnut Financial
Services, Inc. on September 30, 1999 (File No.
000-26072)).
Exhibit C: Option Agreement, dated as of November 2, 1999,
between the Company and Joseph D. Mark.
Exhibit D: Option Agreement, dated as of November 2, 1999,
between the Company and Joseph D. Mark.
Exhibit E: Voting Agreement, dated as of November 1, 1999,
executed by Joseph D. Mark.
Exhibit F: Voting Agreement, dated as of November 1, 1999,
executed by Joshua A. Mark 1999 Trust, Meryl Schlussel
Mark, Trustee
Exhibit G: Voting Agreement, dated as of November 1, 1999,
executed by Rachel L. Mark 1999 Trust, Meryl Schlussel
Mark, Trustee
Exhibit H: Voting Agreement, dated as of November 1, 1999,
executed by Samuel A. Mark 1999 Trust, Meryl Schlussel
Mark, Trustee.
Exhibit I: Tag-Along Agreement, dated as of November 1,
1999, executed by Joseph D. Mark.
Exhibit J: Tag-Along Agreement, dated as of November 1,
1999, executed by Joshua A. Mark 1999 Trust, Meryl
Schlussel Mark, Trustee.
Exhibit K: Tag-Along Agreement, dated as of November 1,
1999, executed by Rachel L. Mark 1999 Trust, Meryl
Schlussel Mark, Trustee.
Exhibit L: Tag-Along Agreement, dated as of November 1,
1999, executed by Samuel A. Mark 1999 Trust, Meryl
Schlussel Mark, Trustee.
Page 9 of 13 Pages
<PAGE>
SIGNATURE
After reasonable inquiry and to the best knowledge and belief of the
undersigned, the undersigned certifies that the information set forth in this
Statement is true, complete and correct.
Dated: November 8, 1999
/s/ Joseph D. Mark
---------------------------------
Joseph D. Mark
Page 10 of 13 Pages
<PAGE>
SIGNATURE
After reasonable inquiry and to the best knowledge and belief of the
undersigned, the undersigned certifies that the information set forth in this
Statement is true, complete and correct.
Dated: November 8, 1999
Joshua A. Mark 1999 Trust, Meryl
Schlussel Mark, Trustee
By: /s/ Meryl Schlussel Mark
------------------------------
Name: Meryl Schlussel Mark
Title: Trustee
Page 11 of 13 Pages
<PAGE>
SIGNATURE
After reasonable inquiry and to the best knowledge and belief of the
undersigned, the undersigned certifies that the information set forth in this
Statement is true, complete and correct.
Dated: November 8, 1999
Rachel L. Mark 1999 Trust, Meryl
Schlussel Mark, Trustee
By: /s/ Meryl Schlussel Mark
--------------------------------
Name: Meryl Schlussel Mark
Title: Trustee
Page 12 of 13 Pages
<PAGE>
SIGNATURE
After reasonable inquiry and to the best knowledge and belief of the
undersigned, the undersigned certifies that the information set forth in this
Statement is true, complete and correct.
Dated: November 8, 1999
Samuel A. Mark 1999 Trust, Meryl
Schlussel Mark, Trustee
By: /s/ Meryl Schlussel Mark
--------------------------------
Name: Meryl Schlussel Mark
Title: Trustee
Page 13 of 13 Pages
<PAGE>
EXHIBIT A
Agreement of Joint Filing
Pursuant to Rule 13d-1(k)(1) promulgated under the Securities Exchange
Act of 1934, as amended, the undersigned persons hereby agree to file with the
Securities and Exchange Commission the Statement on Schedule 13D (the
"Statement") to which this Agreement is attached as an exhibit, and agree that
such Statement, as so filed, is filed on behalf of each of them.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
November 8, 1999.
/s/ Joseph D. Mark
------------------------------
Joseph D. Mark
Joshua A. Mark 1999 Trust,
Meryl Schlussel Mark, Trustee
By: /s/ Meryl Schlussel Mark
----------------------------
Name: Meryl Schlussel Mark
Title: Trustee
Rachel L. Mark 1999 Trust,
Meryl Schlussel Mark, Trustee
By: /s/ Meryl Schlussel Mark
----------------------------
Name: Meryl Schlussel Mark
Title: Trustee
Samuel A. Mark 1999 Trust,
Meryl Schlussel Mark, Trustee
By: /s/ Meryl Schlussel Mark
----------------------------
Title: Trustee
<PAGE>
EXHIBIT C
Stock Option Grant Agreement
STOCK OPTION GRANT AGREEMENT (this "Agreement"), made as of this
2nd day of November, 1999 between THCG, Inc. (the "Company") and Joseph D.
Mark (the "Optionee").
WHEREAS, the Company has adopted and maintains The 1999 Walnut
Financial Services, Inc. Stock Incentive Plan (the "Plan") to secure for the
Company and its stockholders the benefits arising from capital stock ownership
by certain employees, former employees, officers and directors of, and
consultants or other independent contractors to, the Company and its subsidiary
corporations who are expected to contribute to the Company's future growth and
success;
WHEREAS, the Plan provides that the Committee (as defined in the
Plan) shall administer the Plan and determine the persons to whom Options to
purchase shares of the Company's common stock, $.01 par value per share
("Company Stock"), shall be granted and the amount and type of such Options;
WHEREAS, the Company entered into that certain Amended Restricted
Stock Grant Agreement between the Company and Shai Novik ("Novik"), dated
November 2, 1999 (the "Novik Agreement"), pursuant to which 372,281 shares of
Restricted Stock were issued to Novik, which issuance dilutes the Optionee's
share in the equity of the Company;
WHEREAS, to offset such dilution, the Company agreed to grant to
the Optionee an Option for 200,000 shares of Company Stock pursuant to that
certain Amended and Restated Agreement and Plan of Merger by and among Walnut
Financial Services, Inc., Tower Hill Acquisition Corp. and Tower Hill
Securities, Inc., dated as of August 5, 1999 (the "Merger Agreement"), which
further provides that should Novik forfeit any shares of Restricted Stock under
the Novik Agreement, the Optionee likewise would forfeit shares of Company Stock
under the Option ratably as set forth below;
WHEREAS, effective as of November 2, 1999, the Committee made
such a grant of an Option to the Optionee pursuant to the Plan;
WHEREAS, the Plan requires that such grant be evidenced by a
written agreement, executed by the Company and the Optionee, containing such
restrictions, terms and conditions as may be required by the Plan and the
Committee;
WHEREAS, this Agreement has been approved by the Committee to
evidence the grant made to the Optionee;
<PAGE>
NOW, THEREFORE, in consideration of the premises and the mutual
covenants hereinafter set forth, the parties hereto hereby agree as follows:
1. Grant of Options. Subject to the adjustments set forth in
Section 4(d) hereof, the Company, effective as of the Grant Date (as defined
below), hereby grants to the Optionee a NON-QUALIFIED STOCK OPTION with respect
to 200,000 shares of Company Stock (the "Option"), in two classes of 100,000 and
100,000 shares (respectively, the "First Option Class" and the "Second Option
Class"). The Option is issued pursuant to, and subject to, the restrictions,
terms and conditions set forth herein and in the Plan. The Option is not
intended to constitute an "incentive stock option" within the meaning of Section
422 of the Internal Revenue Code of 1986 (the "Code").
2. Incorporation of Plan. All terms, conditions and restrictions
of the Plan are incorporated herein and made part hereof as if stated herein. If
there is any conflict between the terms and conditions of the Plan or this
Agreement, the terms and conditions of the Plan, as interpreted by the
Committee, shall govern. Except as otherwise provided herein, all capitalized
terms used herein shall have the meaning given to such terms in the Plan.
3. Date of Grant. For all purposes of the Plan, the date of grant
of the Option granted hereby is November 2, 1999 (the "Grant Date").
4. Vesting.
(a) Subject to the provisions under this Section 4(b) through
(d), the vesting dates (each, a "Vesting Date") with respect to each Option
Class are as follows:
(i) That number of shares of Company Stock pursuant to the First
Option Class that equals the total number of First Option Class
shares multiplied by a fraction the numerator of which is the
total number of whole months from March 1, 1999 to the Effective
Time (as defined in the Merger Agreement) and the denominator of
which is 24 shall be vested on the Grant Date; the balance of the
First Option Class shares of Company Stock shall vest in equal
three-month ("quarterly") installments, commencing on the first
quarterly anniversary of the Grant Date and ending on the
one-year anniversary of the Effective Time.
(ii) That number of shares of Company Stock pursuant to the
Second Option Class that equals the total number of Second Option
Class shares multiplied by a fraction the numerator of which is
the total number of whole months from March 1, 1999 to the
Effective Time and the denominator of which is 60 shall be vested
on the Grant Date; the balance of the Second Option Class shares
of Company Stock shall vest in equal quarterly installments,
commencing on the first quarterly anniversary of the Grant Date
and ending on the three-year anniversary of the Effective Time.
- 2 -
<PAGE>
(b) The Optionee must be employed by the Company on each
subsequent quarterly anniversary of the Grant Date for the next installment of
shares of Common Stock to vest on such Vesting Date.
(c) Upon Novik's Termination of Employment, other than for Cause,
prior to the expiration of a six-month period following the occurrence of a
Change in Control at any time after the Effective Time, all shares of Company
Stock pursuant to the Option which have not theretofore vested in accordance
with the terms hereunder, or been canceled and forfeited pursuant to any
provision hereof, immediately shall vest.
(d) Notwithstanding anything to the contrary in this Agreement,
the number of shares of Company Stock pursuant to this Option shall be subject
to the following adjustment:
(i) Upon Novik's attempt to transfer an unvested share of
Restricted Stock or the right to any cash payment related thereto
and the resulting cancellation and forfeiture, in accordance with
the terms of the Novik Agreement, of that portion of the grant of
Restricted Stock represented by such share of Restricted Stock
and any related cash payment, there shall be an immediate
cancellation and forfeiture of a corresponding portion of the
Option that has not vested, effective as of the date of such
cancellation of a portion of Novik's grant, in a ratio of
one-half share of Company Stock pursuant to the Option for each
share of Restricted Stock that is so cancelled and forfeited,
with the total number of such one-half shares of Company Stock
required to be cancelled and forefeited to be evenly divided
between and cancelled and forfeited from the First Option Class
and the Second Option Class; provided, however, to the extent
that there are too few or no such one-half shares of Company
Stock remaining under the First Option Class to permit such an
even cancellation and forfeiture, the remaining one-half shares
of Company Stock required to be cancelled and forefeited will be
taken from the Second Option Class.
(ii) Except as provided in Section 4(c) hereof, upon Novik's
Termination of Employment with the Company where such Termination
results in cancellation and forfeiture, in accordance with the
terms of the Novik Agreement, of all shares of Restricted Stock
that have not vested, there shall be an immediate cancellation
and forfeiture of all shares of Company Stock pursuant to the
Option that have not vested, as of the commencement of the date
of such Termination of Employment.
(iii) Upon the cancellation and forfeiture, at the discretion of
the Committee, of all or a part of the Grant to Novik on account
of Novik's failure to comply with the terms of the Novik
Agreement or the Plan, of each share of Restricted Stock so
cancelled and forfeited, there shall be an immediate cancellation
and forfeiture of a corresponding portion of the Option in a
ratio of one-half share of Company Stock pursuant to the Option
for each share of Restricted Stock that is so cancelled and
forfeited, with the total
- 3 -
<PAGE>
number of such one-half shares of Company Stock to be evenly
divided between and cancelled and forfeited from the First Option
Class and the Second Option Class; provided, however, to the
extent that there are too few or no such one-half shares of
Company Stock remaining under the First Option Class to permit
such an even cancellation and forfeiture, the remaining one-half
shares of Company Stock required to be cancelled and forfeited
will be taken from the Second Option Class.
5. Exercise Price. The exercise price-per share of each share of
Company Stock with respect to which the Option is granted hereby is $ 3.625.
6. Expiration Date; Effect of Termination of Employment.
(a) Subject to the provisions of the Plan and this Agreement, the
Option granted hereby shall expire and terminate on the fifth anniversary of the
Grant Date.
(b) In the event of the Optionee's Termination of Employment for
any reason, the Option shall remain exercisable until the expiration of its term
described in Section 6(a) hereof (the "Term"), on which date the Option shall
expire, subject to the terms of Section 4(d) hereof.
7. Method of Exercise. The Option shall be exercisable in whole
or in part; provided, that no partial exercise shall be for an aggregate
exercise price of less than $1,000. The partial exercise of an Option shall not
cause the expiration, termination or cancellation of the remaining portion
thereof. The Option shall be exercised by delivering notice to the Company's
principal office, to the attention of its Secretary, no less than three business
days in advance of the effective date of the proposed exercise. Such notice
shall be accompanied by this Agreement, shall specify the number of shares of
Company Stock with respect to which the Option is being exercised and the
effective date of the proposed exercise and shall be signed by the Optionee. The
Optionee may withdraw such notice at any time prior to the close of business on
the business day immediately preceding the effective date of the proposed
exercise, in which case this Agreement shall be returned to the Optionee.
Payment for shares of Company Stock purchased upon the exercise of an Option
shall be made on the effective date of such exercise either: (i) in cash, or by
certified check or bank cashier's check payable to the order of the Company or
by wire transfer; (ii) subject to the approval of the Committee, in shares of
Company Stock owned by the Optionee for at least six months prior to the
effective date of the exercise and valued at their Fair Market Value on the
effective date of such exercise, or partly in shares of Company Stock with the
balance in cash, by certified check, bank cashier's check or wire transfer or
(iii) subject to the approval of the Committee, by means of a "cashless
exercise" pursuant to procedures adopted by the Committee whereby the Optionee
directs: (A) a brokerage firm selected by the Company or the Committee, as the
case may be, to effect an immediate market sale or margin loan respecting all or
a part of the shares of Company Stock to which the Optionee is entitled upon
exercise pursuant to an extension of credit by the Company to the Participant of
the exercise price, (B) the delivery of the shares of Company Stock from the
Company directly to the brokerage firm, and (C) the delivery of the exercise
price from the sale or
- 4 -
<PAGE>
margin loan proceeds from the brokerage firm directly to the Company. Any
payment in shares of Company Stock shall be effected by the delivery of such
shares to the Secretary of the Company, duly endorsed in blank or accompanied by
stock powers duly executed in blank, together with any other documents and
evidences as the Secretary of the Company shall require from time to time.
Certificates for shares of Company Stock purchased upon the exercise of an
Option shall be issued in the name of the Optionee or his beneficiary (or
permitted transferee), as the case may be, and delivered to the Optionee or the
Optionee's beneficiary (or permitted transferee), as the case may be, as soon as
practicable following the effective date on which the Option is exercised.
Any exercise of the Option shall be subject to all applicable
withholding and other taxes in accordance with Section 20 of the Plan and
applicable law.
8. Securities Matters.
(a) If, at any time, counsel to the Company shall determine
that the listing, registration or qualification of the shares of Company Stock
subject to the Option upon any securities exchange or under any state or federal
law, or the consent or approval of any governmental or regulatory body, or that
the disclosure of non-public information or the satisfaction of any other
condition is necessary as a condition of, or in connection with, the issuance or
purchase of shares of Company Stock hereunder, such Option may not be exercised,
in whole or in part, unless such listing, registration, qualification, consent
or approval, or satisfaction of such condition shall have been effected or
obtained on conditions acceptable to the Board of Directors. The Company shall
be under no obligation to apply for or to obtain such listing, registration or
qualification, or to satisfy such condition. The Committee shall inform the
Optionee in writing of any decision to defer or prohibit the exercise of an
Option. During the period that the effectiveness of the exercise of an Option
has been deferred or prohibited, the Optionee may, by written notice, withdraw
the Optionee's decision to exercise and obtain a refund of any amount paid with
respect thereto.
(b) The Company may require: (i) the Optionee (or any other
person exercising the Option in the case of the Optionee's death or Disability)
as a condition of exercising the Option, to give written assurances, in
substance and form satisfactory to the Company, to the effect that such person
is acquiring the Company Stock subject to the Option for his or her own account
for investment and not with any present intention of selling or otherwise
distributing the same, and to make such other representations or covenants; and
(ii) that any certificates for shares or Company Stock delivered in connection
with the exercise of the Option bear such legends, in each case as the Company
deems necessary or appropriate, in order to comply with federal and applicable
state securities laws, to comply with covenants or representations made by the
Company in connection with any public offering of its Company Stock or
otherwise. The Optionee specifically understands and agrees that the shares of
Company Stock, if and when issued upon exercise of the Option, may be
"restricted securities," as that term is defined in Rule 144 under the
Securities Act of 1933 and, accordingly, the Optionee may be required to hold
the shares indefinitely unless they are registered under such Securities Act of
1933 or an exemption from such registration is available.
- 5 -
<PAGE>
(c) The Optionee shall have no rights as a shareholder with
respect to any shares covered by the Option (including, without limitation, any
rights to receive dividends or non-cash distributions with respect to such
shares) until the date of issue of a stock certificate to the Optionee for such
shares. No adjustment shall be made for dividends or other rights for which the
record date is prior to the date such stock certificate is issued.
9. Transferability. The Option shall not be assignable or
otherwise transferable by the Optionee except by will or by the laws of descent
and distribution or pursuant to a qualified domestic relations order as defined
in the Code or Title I of the Employee Retirement Income Security Act of 1974,
as amended, and the regulations thereunder. The Option may be exercised during
the lifetime of the Optionee only by the Optionee. In the event of the
Optionee's death, the Option may be exercised during the period specified in
Section 6 hereof by the executors or administrators of the Optionee's estate.
10. Delays or Omissions. No delay or omission to exercise any
right, power or remedy accruing to any party hereto upon any breach or default
of any party under this Agreement, shall impair any such right, power or remedy
of such party, nor shall it be construed to be a waiver of any such breach or
default, or an acquiescence therein, or of or in any similar breach or default
thereafter occurring, nor shall any waiver of any single breach or default be
deemed a waiver of any other breach or default theretofore or thereafter
occurring. Any waiver, permit, consent or approval of any kind or character on
the part of any party of any breach or default under this Agreement, or any
waiver on the part of any party or any provisions or conditions of this
Agreement, must be in a writing signed by such party and shall be effective only
to the extent specifically set forth in such writing.
11. Integration. This Agreement (together with the Plan, which is
incorporated herein by reference) contains the entire understanding of the
parties with respect to its subject matter. There are no restrictions,
agreements, promises, representations, warranties, covenants or undertakings
with respect to the subject matter hereof other than those expressly set forth
herein. This Agreement supersedes all prior agreements and understandings
between the parties with respect to its subject matter.
12. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument.
13. Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of New York,
without regard to the principles of conflict of laws.
14. Optionee Acknowledgment. The Optionee hereby acknowledges
receipt of a copy of the Plan. The Optionee hereby acknowledges that all
decisions, determinations and interpretations of the Committee in respect of the
Plan, this Agreement and the Option shall be final and conclusive.
- 6 -
<PAGE>
15. Limitations Imposed by Section 162(m) of the Code.
Notwithstanding any other provision hereunder, if and to the extent the
Committee determines the Company's federal tax deduction in respect of the
Option may be limited as a result of Section 162(m) of the Code, the Committee
may delay the exercise of the Option until a date that is within 30 days after
the earlier of (i) the date that compensation paid to the Optionee no longer is
subject to the deduction limitation under Section 162(m) of the Code and (ii)
the occurrence of a Change in Control. In the event that the Optionee exercises
the Option at a time when the Optionee is a "covered employee" within the
meaning of Section 162(m) of the Code and the Committee determines to delay the
exercise of the Option, the Company shall not issue shares of Company Stock to
the Optionee, but instead shall credit the Fair Market Value of the Company
Stock that otherwise would have been issued to the Optionee to an unfunded
account on the books and records of the Company. The Optionee shall have no
rights in respect of such account other than as an unsecured general creditor of
the Company, and the amount credited thereto shall not be transferable by the
optionee other than by will or laws of descent and distribution. The Committee
may credit additional amounts to such account as it may determine in its sole
discretion. Any account created hereunder shall represent only an unfunded
unsecured promise by the Company to pay the amount credited thereto to the
Optionee in the future. The amount credited to the account shall be paid to the
Optionee if and to the extent (and within 30 days after) the Committee
determines that the Company's federal tax deduction with respect thereto will
not be limited by reason of Section 162(m) of the Code.
- 7 -
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Agreement to be
duly executed by its duly authorized officer, and the Optionee has hereunto
signed this Agreement on the Optionee's own behalf, thereby representing that he
has carefully read and understands this Agreement and the Plan as of the day and
year first written above.
THCG, INC.
By: /s/ Joseph D. Mark
---------------------------------
Date: 11/2/99
---------------------------------
/s/ ADI RAVIV
-------------------------------------
Optionee (print name): Adi Raviv
---------------
Date: 11/2/99
---------------------------------
<PAGE>
EXHIBIT D
STOCK OPTION GRANT AGREEMENT
STOCK OPTION GRANT AGREEMENT (this "Agreement"), made as of this
2nd day of November, 1999 between THCG, Inc. (the "Company") and Joseph D. Mark
(the "Optionee").
WHEREAS, the Company has adopted and maintains The 1999 Walnut
Financial Services, Inc. Stock Incentive Plan (the "Plan") to secure for the
Company and its stockholders the benefits arising from capital stock ownership
by certain employees, officers and directors of, and consultants or other
independent contractors to, the Company and its subsidiary corporations who are
expected to contribute to the Company's future growth and success;
WHEREAS, the Plan provides that the Committee (as defined in the
Plan) shall administer the Plan and determine the persons who are, at the time
of grant, employees, officers or directors of, or consultants or other
independent contractors to, the Company to whom Options to purchase shares of
the Company's common stock, $.01 par value per share ("Company Stock"), shall be
granted and the amount and type of such Options;
WHEREAS, the Company entered into that certain Amended and
Restated Agreement and Plan of Merger by and among Walnut Financial Services,
Inc., Tower Hill Acquisition Corp., and Tower Hill Securities, Inc. dated as of
August 5, 1999 (the "Merger Agreement"), which provides that an option be
granted to the Optionee;
WHEREAS, effective as of November 2, 1999 ("Grant Date"), the
Committee made such a grant to the Optionee pursuant to the Plan;
WHEREAS, the Plan requires that such grant be evidenced by a
written agreement, executed by the Company and the Optionee, containing such
restrictions, terms and conditions as may be required by the Plan and the
Committee;
WHEREAS, this Agreement has been approved by the Committee to
evidence the grant made to the Optionee;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants hereinafter set forth, the parties hereto hereby agree as follows:
1. Grant of Options. Pursuant to, and subject to, the terms and
conditions set forth herein and in the Plan, the Committee hereby grants to the
Optionee a NONQUALIFIED STOCK OPTION with respect to 250,000 shares of Company
Stock (the "Option"). The Option is not intended to constitute an "incentive
stock option" within the meaning of Section 422 of the Internal Revenue Code of
1986 (the "Code").
2. Date of Grant. For all purposes of the Plan, the date of grant
of the Option granted hereby is November 2, 1999 (the "Grant Date").
<PAGE>
3. Incorporation of Plan. All terms, conditions and restrictions
of the Plan are incorporated herein and made part hereof as if stated herein. If
there is any conflict between the terms and conditions of the Plan or this
Agreement, the terms and conditions of the Plan, as interpreted by the
Committee, shall govern. Except as otherwise provided herein, all capitalized
terms used herein shall have the meaning given to such terms in the Plan.
4. Exercisability/Vesting. This Option shall be exercisable in
full as of the Grant Date.
5. Exercise Price. The exercise price-per share of each share of
Company Stock with respect to which the Option is granted hereby is the closing
price of Company Stock on the day immediately prior to the Grant Date.
6. Expiration Date; Effect of Termination of Employment.
(a) Subject to the provisions of the Plan and this Agreement, the
Option granted hereby shall expire and terminate on the fifth anniversary of the
Grant Date.
(b) In the event of the Optionee's Termination of Employment for
any reason other than Cause, Disability or death, the Option shall remain
exercisable until the expiration of three months after such Termination of
Employment, on which date the Option shall expire; provided, however, that the
Option shall not be exercisable after the expiration of its term described in
Section 6(a) hereof (the "Term").
(c) In the event of the Optionee's Termination of Employment as a
result of Disability or death, the Option shall remain exercisable until the
expiration of the Term, on which date the Option shall expire.
(d) In the event of the Optionee's Termination of Employment for
Cause, the Option shall expire immediately at the commencement of business on
the effective date of such Termination of Employment. If, subsequent to the
Optionee's Termination of Employment for any reason it is discovered that the
Optionee's Employment could have been terminated for Cause, such Optionee's
Employment shall be deemed to have been terminated for Cause as of date of the
occurrence of the event giving rise to Cause. In the event the Optionee has been
permitted to exercise the Option on or after the date the Optionee's Employment
is deemed to have been terminated for Cause, such exercise shall be deemed to
have been void ab initio and, upon demand by the Company, the Optionee shall
return to the Company any shares purchased upon such exercise, and the Company
shall return to the Optionee the exercise price paid by the Optionee.
THE COMMITTEE SHALL HAVE THE POWER TO DETERMINE WHAT CONSTITUTES
A TERMINATION FOR CAUSE , WHETHER THE Optionee HAS BEEN TERMINATED FOR CAUSE AND
THE DATE UPON WHICH SUCH TERMINATION FOR CAUSE OCCURS. ANY SUCH DETERMINATIONS
SHALL
- 2 -
<PAGE>
BE FINAL, CONCLUSIVE AND BINDING UPON THE OPTIONEE (AND ANY OTHER PARTY).
(e) In the event the Optionee's Termination of Employment by the
Company, other than for Cause, prior to the expiration of a six-month period
following a Change in Control, each share under the Option that is outstanding
shall remain exercisable until its expiration, termination or cancellation
pursuant to the terms of this Agreement.
7. Method of Exercise. The Option shall be exercisable in whole
or in part; provided, that no partial exercise shall be for an aggregate
exercise price of less than $1,000. The partial exercise of an Option shall not
cause the expiration, termination or cancellation of the remaining portion
thereof. The Option shall be exercised by delivering notice to the Company's
principal office, to the attention of its Secretary, no less than three business
days in advance of the effective date of the proposed exercise. Such notice
shall be accompanied by this Agreement, shall specify the number of shares of
Company Stock with respect to which the Option is being exercised and the
effective date of the proposed exercise and shall be signed by the Optionee. The
Optionee may withdraw such notice at any time prior to the close of business on
the business day immediately preceding the effective date of the proposed
exercise, in which case this Agreement shall be returned to the Optionee.
Payment for shares of Company Stock purchased upon the exercise of an Option
shall be made on the effective date of such exercise either: (i) in cash, or by
certified check or bank cashier's check payable to the order of the Company or
by wire transfer; (ii) subject to the approval of the Committee, in shares of
Company Stock owned by the Optionee for at least six months prior to the
effective date of the exercise and valued at their Fair Market Value on the
effective date of such exercise, or partly in shares of Company Stock with the
balance in cash, by certified check, bank cashier's check or wire transfer or
(iii) subject to the approval of the Committee, by means of a "cashless
exercise" pursuant to procedures adopted by the Committee whereby the Optionee
directs: (A) a brokerage firm selected by the Company to effect an immediate
market sale or margin loan respecting all or a part of the shares of Company
Stock to which the Optionee is entitled upon exercise pursuant to an extension
of credit by the Company to the Participant of the exercise price, (B) the
delivery of the shares of Company Stock from the Company directly to the
brokerage firm, and (C) the delivery of the exercise price from the sale or
margin loan proceeds from the brokerage firm directly to the Company. Any
payment in shares of Company Stock shall be effected by the delivery of such
shares to the Secretary of the Company, duly endorsed in blank or accompanied by
stock powers duly executed in blank, together with any other documents and
evidences as the Secretary of the Company shall require from time to time.
Certificates for shares of Company Stock purchased upon the exercise of an
Option shall be issued in the name of the Optionee or his beneficiary (or
permitted transferee), as the case may be, and delivered to the Optionee or the
Optionee's beneficiary (or permitted transferee), as the case may be, as soon as
practicable following the effective date on which the Option is exercised.
Any exercise of the Option shall be subject to all applicable
withholding and other taxes in accordance with Section 20 of the Plan and
applicable law.
- 3 -
<PAGE>
8. Securities Matters.
(a) If, at any time, counsel to the Company shall determine that
the listing, registration or qualification of the shares of Company Stock
subject to the Option upon any securities exchange or under any state or federal
law, or the consent or approval of any governmental or regulatory body, or that
the disclosure of non-public information or the satisfaction of any other
condition is necessary as a condition of, or in connection with, the issuance or
purchase of shares of Company Stock hereunder, such Option may not be exercised,
in whole or in part, unless such listing, registration, qualification, consent
or approval, or satisfaction of such condition shall have been effected or
obtained on conditions acceptable to the Board of Directors. The Company shall
be under no obligation to apply for or to obtain such listing, registration or
qualification, or to satisfy such condition. The Committee shall inform the
Optionee in writing of any decision to defer or prohibit the exercise of an
Option. During the period that the effectiveness of the exercise of an Option
has been deferred or prohibited, the Optionee may, by written notice, withdraw
the Optionee's decision to exercise and obtain a refund of any amount paid with
respect thereto.
(b) The Company may require: (i) the Optionee (or any other
person exercising the Option in the case of the Optionee's death or Disability)
as a condition of exercising the Option, to give written assurances, in
substance and form satisfactory to the Company, to the effect that such person
is acquiring the Company Stock subject to the Option for his or her own account
for investment and not with any present intention of selling or otherwise
distributing the same, and to make such other representations or covenants; and
(ii) that any certificates for shares or Company Stock delivered in connection
with the exercise of the Option bear such legends, in each case as the Company
deems necessary or appropriate, in order to comply with federal and applicable
state securities laws, to comply with covenants or representations made by the
Company in connection with any public offering of its Company Stock or
otherwise. The Optionee specifically understands and agrees that the shares of
Company Stock, if and when issued upon exercise of the Option, may be
"restricted securities," as that term is defined in Rule 144 under the
Securities Act of 1933 and, accordingly, the Optionee may be required to hold
the shares indefinitely unless they are registered under such Securities Act of
1933 or an exemption from such registration is available.
(c) The Optionee shall have no rights as a shareholder with
respect to any shares covered by the Option (including, without limitation, any
rights to receive dividends or non-cash distributions with respect to such
shares) until the date of issue of a stock certificate to the Optionee for such
shares. No adjustment shall be made for dividends or other rights for which the
record date is prior to the date such stock certificate is issued.
9. Transferability. The Option shall not be assignable or
otherwise transferable by the Optionee except by will or by the laws of descent
and distribution or pursuant to a qualified domestic relations order as defined
in the Code or Title I of the Employee Retirement Income Security Act of 1974,
as amended, and the regulations thereunder. The Option may be exercised during
the lifetime of the Optionee only by the Optionee. In the
- 4 -
<PAGE>
event of the Optionee's death, the Option may be exercised during the period
specified in Section 6 hereof by the executors or administrators of the
Optionee's estate.
10. Delays or Omissions. No delay or omission to exercise any
right, power or remedy accruing to any party hereto upon any breach or default
of any party under this Agreement, shall impair any such right, power or remedy
of such party, nor shall it be construed to be a waiver of any such breach or
default, or an acquiescence therein, or of or in any similar breach or default
thereafter occurring, nor shall any waiver of any single breach or default be
deemed a waiver of any other breach or default theretofore or thereafter
occurring. Any waiver, permit, consent or approval of any kind or character on
the part of any party of any breach or default under this Agreement, or any
waiver on the part of any party or any provisions or conditions of this
Agreement, must be in a writing signed by such party and shall be effective only
to the extent specifically set forth in such writing.
11. Integration. This Agreement (together with the Plan, which is
incorporated herein by reference) contains the entire understanding of the
parties with respect to its subject matter. There are no restrictions,
agreements, promises, representations, warranties, covenants or undertakings
with respect to the subject matter hereof other than those expressly set forth
herein. This Agreement supersedes all prior agreements and understandings
between the parties with respect to its subject matter.
12. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument.
13. Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of New York,
without regard to the principles of conflict of laws.
14. Optionee Acknowledgment. The Optionee hereby acknowledges
receipt of a copy of the Plan. The Optionee hereby acknowledges that all
decisions, determinations and interpretations of the Committee in respect of the
Plan, this Agreement and the Option shall be final and conclusive.
15. Limitations Imposed by Section 162(m) of the Code.
Notwithstanding any other provision hereunder, if and to the extent the
Committee determines the Company's federal tax deduction in respect of the
Option may be limited as a result of Section 162(m) of the Code, the Committee
may delay exercise of the Option until a date that is within 30 days after the
earlier of (i) the date that compensation paid to the Optionee no longer is
subject to the deduction limitation under Section 162(m) of the Code and (ii)
the occurrence of a Change in Control. In the event that the Optionee exercises
the Option at a time when the Optionee is a "covered employee" within the
meaning of Section 162(m) of the Code and the Committee determines to delay the
exercise of the Option, the Company shall not issue shares of Company Stock to
the Optionee, but instead shall credit the Fair Market Value of the Company
Stock that otherwise would have been issued to the Optionee to an unfunded
account on the books and records of the Company. The Optionee
- 5 -
<PAGE>
shall have no rights in respect of such account other than as an unsecured
general creditor of the Company, and the amount credited thereto shall not be
transferable by the Optionee other than by will or laws of descent and
distribution. The Committee may credit additional amounts to such account as it
may determine in its sole discretion. Any account created hereunder shall
represent only an unfunded unsecured promise by the Company to pay the amount
credited thereto to the Optionee in the future. The amount credited to the
account shall be paid to the Optionee if and to the extent (and within 30 days
after) the Committee determines that the Company's federal tax deduction with
respect thereto will not be limited by reason of Section 162(m) of the Code.
16. Forfeiture of Gain from Option in Certain Events
Subject to 6(d), to the extent that the Optionee breaches any
restrictive covenant applicable to the Optionee (such as a noncompetition,
nonsolicitation or nondis-closure covenant) within one year after the date on
which the Optionee exercises the Option, then any gain realized by the Optionee
as a result of such exercise shall be paid by the Optionee to the Company
immediately upon notice from the Company. Such gain shall be determined as of
the date of exercise, without regard to any subsequent change in the Fair Market
Value of a share of Company Stock. To the fullest extent permitted by applicable
law, the Company shall have the right to offset such gain against any amounts
otherwise owed to the Optionee by the Company (whether as wages, vacation pay,
or pursuant to any benefit plan or other compensatory arrangement).
17. Severability. Whenever possible, each provision or portion of
any provision of this Agreement will be interpreted in such manner as to be
effective and valid under applicable law but if any provision or portion of any
provision of this Agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable law or rule in any jurisdiction, such
invalidity, illegality or unenforceability will not affect any other provision
or portion of any provision in such jurisdiction, and this Agreement will be
reformed, construed and enforced jurisdiction as if such invalid, illegal or
unenforceable provision or portion of any provision had never been contained
herein.
- 6 -
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Agreement to be
duly executed by its duly authorized officer, and the Optionee has hereunto
signed this Agreement on the Optionee's own behalf, thereby representing that he
has carefully read and understands this Agreement and the Plan as of the day and
year first written above.
THCG, INC.
By: /s/ Adi Raviv
---------------------------------
Date: 11/2/99
---------------------------------
/s/ Joseph D. Mark
-------------------------------------
Optionee (print name): Joseph D. Mark
---------------
Date: 11/2/99
---------------------------------
- 7 -
<PAGE>
EXHIBIT E
Voting Agreement
Whereas, pursuant to Section 5(c) of the Securities Purchase Agreement dated as
of October 29, 1999 (the "Securities Purchase Agreement") by and among:
(i) Greenwich Street Capital Partners II, L.P. ("Greenwich II"), GSCP
Offshore Fund, L.P., Greenwich Fund, L.P., Greenwich Street Employees
Fund, L.P. and TRV Executive Fund, L.P., (the foregoing being herein
together referred to as the "Purchaser") and (ii) Walnut Financial
Services, Inc. (which will change its name to "THCG, Inc.") (the
"Company"), the Purchaser is entitled to nominate one person (the
"Purchaser Appointee") for election to the Board of Directors of the
Company so long as the Purchaser is the beneficial owner 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" (as defined in the Securities
Purchase Agreement)); and
Whereas, the undersigned is a "THSI Principal" as defined in the Securities
Purchase Agreement.
Now therefore, as an inducement to the Purchaser to purchase the "Securities"
under, and as defined in, the Securities Purchase Agreement, the undersigned
does hereby agree as follows:
1. The undersigned shall vote all shares of the capital stock of the Company
owned from time to time by the undersigned in favor of the election of the
Purchaser Appointee as shall be designated from time to time by Greenwich
II pursuant to Section 5(c) of the Securities Purchase Agreement, all to
the same extent as if the undersigned were a party to Section 5(c) of the
Securities Purchase Agreement; and the undersigned shall not take any
action (or fail to take any action) which is inconsistent with, or in
contravention of, the provisions of Section 5(c) of the Securities Purchase
Agreement.
2. The undersigned shall not effect any "Exempt Transfer" (as defined in the
Securities Purchase Agreement) unless the undersigned shall have caused the
transferee to execute and deliver to the Purchaser this Voting Agreement,
thus agreeing to: (i) vote all shares of the capital stock of the Company
owned from time to time by such transferee in favor of the election of the
Purchaser Appointee as shall be designated from time to time by Greenwich
II pursuant to Section 5(c) of the Securities Purchase Agreement, and (ii)
be bound by the terms of this Voting Agreement to the same extent as the
undersigned.
3. The undersigned hereby grants to the President of the Company a proxy to
vote all shares of the capital stock of the Company owned of record or
beneficially by the undersigned in favor of the election of the Purchaser
Appointee; and such proxy shall be irrevocable and shall survive the death
or disability of the undersigned (if an individual) and any merger,
consolidation, liquidation, dissolution or similar transaction affecting
the undersigned or the shares of the capital stock of the Company owned of
record by the undersigned (if the undersigned be other than an individual)
if the Person who becomes the record or beneficial holder of the shares is
otherwise a THSI Principal. In the event that, for any reason, the
foregoing proxy shall become unenforceable or shall have expired, then the
undersigned shall execute and grant a new proxy on the same terms as
provided herein. The proxy granted hereunder, and the obligations of the
undersigned under this Voting Agreement, shall be noted in the voting
records and registrar of the Company.
<PAGE>
2
4. The undersigned acknowledges that the Purchaser is relying upon this Voting
Agreement in connection with the execution, delivery and performance by the
Purchaser of the Securities Purchase Agreement and the purchase by the
Purchaser of the Securities.
5. This Voting Agreement shall terminate upon any termination of the
obligations under the Securities Purchase Agreement of the Company to
issue, and the Purchaser to purchase, the Securities. Unless terminated as
aforesaid, this Voting Agreement shall be effective as of the "Effective
Time" of the Merger (as defined in the Merger Agreement) but subject to the
release of this Voting Agreement pursuant to Section 4(a) of the Escrow
Agreement.
6. This Voting Agreement shall be governed by the laws of the State of New
York, except to the extent that the corporate laws of the State of Utah
shall be applicable in connection with the exercise of the proxy granted
herein.
7. Capitalized terms used herein which are not expressly defined herein shall
have the meanings given such terms in the Securities Purchase Agreement.
* * *
In witness whereof, the undersigned have executed and delivered this Voting
Agreement as of the November 1, 1999.
THSI Principal:
/s/ Joseph D. Mark
------------------------------------
Print Name: Joseph D. Mark
-------------------------
Acknowledged and accepted:
Walnut Financial Services, Inc. (or THCG, Inc.)
By: /s/ Joel S. Kanter
-----------------------------
Joel S. Kanter
President
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
By: /s/ Keith Abell
-----------------------------
Keith Abell
Managing Member
<PAGE>
EXHIBIT F
Voting Agreement
Whereas, pursuant to Section 5(c) of the Securities Purchase Agreement dated as
of October 29, 1999 (the "Securities Purchase Agreement") by and among:
(i) Greenwich Street Capital Partners II, L.P. ("Greenwich II"), GSCP
Offshore Fund, L.P., Greenwich Fund, L.P., Greenwich Street Employees
Fund, L.P. and TRV Executive Fund, L.P., (the foregoing being herein
together referred to as the "Purchaser") and (ii) Walnut Financial
Services, Inc. (which will change its name to "THCG, Inc.") (the
"Company"), the Purchaser is entitled to nominate one person (the
"Purchaser Appointee") for election to the Board of Directors of the
Company so long as the Purchaser is the beneficial owner 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" (as defined in the Securities
Purchase Agreement)); and
Whereas, the undersigned is a "THSI Principal" as defined in the Securities
Purchase Agreement.
Now therefore, as an inducement to the Purchaser to purchase the "Securities"
under, and as defined in, the Securities Purchase Agreement, the undersigned
does hereby agree as follows:
1. The undersigned shall vote all shares of the capital stock of the Company
owned from time to time by the undersigned in favor of the election of the
Purchaser Appointee as shall be designated from time to time by Greenwich
II pursuant to Section 5(c) of the Securities Purchase Agreement, all to
the same extent as if the undersigned were a party to Section 5(c) of the
Securities Purchase Agreement; and the undersigned shall not take any
action (or fail to take any action) which is inconsistent with, or in
contravention of, the provisions of Section 5(c) of the Securities Purchase
Agreement.
2. The undersigned shall not effect any "Exempt Transfer" (as defined in the
Securities Purchase Agreement) unless the undersigned shall have caused the
transferee to execute and deliver to the Purchaser this Voting Agreement,
thus agreeing to: (i) vote all shares of the capital stock of the Company
owned from time to time by such transferee in favor of the election of the
Purchaser Appointee as shall be designated from time to time by Greenwich
II pursuant to Section 5(c) of the Securities Purchase Agreement, and (ii)
be bound by the terms of this Voting Agreement to the same extent as the
undersigned.
3. The undersigned hereby grants to the President of the Company a proxy to
vote all shares of the capital stock of the Company owned of record or
beneficially by the undersigned in favor of the election of the Purchaser
Appointee; and such proxy shall be irrevocable and shall survive the death
or disability of the undersigned (if an individual) and any merger,
consolidation, liquidation, dissolution or similar transaction affecting
the undersigned or the shares of the capital stock of the Company owned of
record by the undersigned (if the undersigned be other than an individual)
if the Person who becomes the record or beneficial holder of the shares is
otherwise a THSI Principal. In the event that, for any reason, the
foregoing proxy shall become unenforceable or shall have expired, then the
undersigned shall execute and grant a new proxy on the same terms as
provided herein. The proxy granted hereunder, and the obligations of the
undersigned under this Voting Agreement, shall be noted in the voting
records and registrar of the Company.
<PAGE>
2
4. The undersigned acknowledges that the Purchaser is relying upon this Voting
Agreement in connection with the execution, delivery and performance by the
Purchaser of the Securities Purchase Agreement and the purchase by the
Purchaser of the Securities.
5. This Voting Agreement shall terminate upon any termination of the
obligations under the Securities Purchase Agreement of the Company to
issue, and the Purchaser to purchase, the Securities. Unless terminated as
aforesaid, this Voting Agreement shall be effective as of the "Effective
Time" of the Merger (as defined in the Merger Agreement) but subject to the
release of this Voting Agreement pursuant to Section 4(a) of the Escrow
Agreement.
6. This Voting Agreement shall be governed by the laws of the State of New
York, except to the extent that the corporate laws of the State of Utah
shall be applicable in connection with the exercise of the proxy granted
herein.
7. Capitalized terms used herein which are not expressly defined herein shall
have the meanings given such terms in the Securities Purchase Agreement.
* * *
In witness whereof, the undersigned have executed and delivered this Voting
Agreement as of the November 1, 1999.
THSI Principal:
Joshua A. Mark 1999 Trust
By: /s/ Meryl Schlussel Mark
---------------------------------
Meryl Schlussel Mark
Trustee
Acknowledged and accepted:
Walnut Financial Services, Inc. (or THCG, Inc.)
By: /s/ Joel S. Kanter
-----------------------------
Joel S. Kanter
President
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
By: /s/ Keith Abell
-----------------------------
Keith Abell
Managing Member
<PAGE>
EXHIBIT G
Voting Agreement
Whereas, pursuant to Section 5(c) of the Securities Purchase Agreement dated as
of October 29, 1999 (the "Securities Purchase Agreement") by and among:
(i) Greenwich Street Capital Partners II, L.P. ("Greenwich II"), GSCP
Offshore Fund, L.P., Greenwich Fund, L.P., Greenwich Street Employees
Fund, L.P. and TRV Executive Fund, L.P., (the foregoing being herein
together referred to as the "Purchaser") and (ii) Walnut Financial
Services, Inc. (which will change its name to "THCG, Inc.") (the
"Company"), the Purchaser is entitled to nominate one person (the
"Purchaser Appointee") for election to the Board of Directors of the
Company so long as the Purchaser is the beneficial owner 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" (as defined in the Securities
Purchase Agreement)); and
Whereas, the undersigned is a "THSI Principal" as defined in the Securities
Purchase Agreement.
Now therefore, as an inducement to the Purchaser to purchase the "Securities"
under, and as defined in, the Securities Purchase Agreement, the undersigned
does hereby agree as follows:
1. The undersigned shall vote all shares of the capital stock of the Company
owned from time to time by the undersigned in favor of the election of the
Purchaser Appointee as shall be designated from time to time by Greenwich
II pursuant to Section 5(c) of the Securities Purchase Agreement, all to
the same extent as if the undersigned were a party to Section 5(c) of the
Securities Purchase Agreement; and the undersigned shall not take any
action (or fail to take any action) which is inconsistent with, or in
contravention of, the provisions of Section 5(c) of the Securities Purchase
Agreement.
2. The undersigned shall not effect any "Exempt Transfer" (as defined in the
Securities Purchase Agreement) unless the undersigned shall have caused the
transferee to execute and deliver to the Purchaser this Voting Agreement,
thus agreeing to: (i) vote all shares of the capital stock of the Company
owned from time to time by such transferee in favor of the election of the
Purchaser Appointee as shall be designated from time to time by Greenwich
II pursuant to Section 5(c) of the Securities Purchase Agreement, and (ii)
be bound by the terms of this Voting Agreement to the same extent as the
undersigned.
3. The undersigned hereby grants to the President of the Company a proxy to
vote all shares of the capital stock of the Company owned of record or
beneficially by the undersigned in favor of the election of the Purchaser
Appointee; and such proxy shall be irrevocable and shall survive the death
or disability of the undersigned (if an individual) and any merger,
consolidation, liquidation, dissolution or similar transaction affecting
the undersigned or the shares of the capital stock of the Company owned of
record by the undersigned (if the undersigned be other than an individual)
if the Person who becomes the record or beneficial holder of the shares is
otherwise a THSI Principal. In the event that, for any reason, the
foregoing proxy shall become unenforceable or shall have expired, then the
undersigned shall execute and grant a new proxy on the same terms as
provided herein. The proxy granted hereunder, and the obligations of the
undersigned under this Voting Agreement, shall be noted in the voting
records and registrar of the Company.
<PAGE>
2
4. The undersigned acknowledges that the Purchaser is relying upon this Voting
Agreement in connection with the execution, delivery and performance by the
Purchaser of the Securities Purchase Agreement and the purchase by the
Purchaser of the Securities.
5. This Voting Agreement shall terminate upon any termination of the
obligations under the Securities Purchase Agreement of the Company to
issue, and the Purchaser to purchase, the Securities. Unless terminated as
aforesaid, this Voting Agreement shall be effective as of the "Effective
Time" of the Merger (as defined in the Merger Agreement) but subject to the
release of this Voting Agreement pursuant to Section 4(a) of the Escrow
Agreement.
6. This Voting Agreement shall be governed by the laws of the State of New
York, except to the extent that the corporate laws of the State of Utah
shall be applicable in connection with the exercise of the proxy granted
herein.
7. Capitalized terms used herein which are not expressly defined herein shall
have the meanings given such terms in the Securities Purchase Agreement.
* * *
In witness whereof, the undersigned have executed and delivered this Voting
Agreement as of the November 1, 1999.
THSI Principal:
Rachel L. Mark 1999 Trust
By: /s/ Meryl Schlussel Mark
---------------------------------
Meryl Schlussel Mark
Trustee
Acknowledged and accepted:
Walnut Financial Services, Inc. (or THCG, Inc.)
By: /s/ Joel S. Kanter
-----------------------------
Joel S. Kanter
President
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
By: /s/ Keith Abell
-----------------------------
Keith Abell
Managing Member
<PAGE>
EXHIBIT H
Voting Agreement
Whereas, pursuant to Section 5(c) of the Securities Purchase Agreement dated as
of October 29, 1999 (the "Securities Purchase Agreement") by and among:
(i) Greenwich Street Capital Partners II, L.P. ("Greenwich II"), GSCP
Offshore Fund, L.P., Greenwich Fund, L.P., Greenwich Street Employees
Fund, L.P. and TRV Executive Fund, L.P., (the foregoing being herein
together referred to as the "Purchaser") and (ii) Walnut Financial
Services, Inc. (which will change its name to "THCG, Inc.") (the
"Company"), the Purchaser is entitled to nominate one person (the
"Purchaser Appointee") for election to the Board of Directors of the
Company so long as the Purchaser is the beneficial owner 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" (as defined in the Securities
Purchase Agreement)); and
Whereas, the undersigned is a "THSI Principal" as defined in the Securities
Purchase Agreement.
Now therefore, as an inducement to the Purchaser to purchase the "Securities"
under, and as defined in, the Securities Purchase Agreement, the undersigned
does hereby agree as follows:
1. The undersigned shall vote all shares of the capital stock of the Company
owned from time to time by the undersigned in favor of the election of the
Purchaser Appointee as shall be designated from time to time by Greenwich
II pursuant to Section 5(c) of the Securities Purchase Agreement, all to
the same extent as if the undersigned were a party to Section 5(c) of the
Securities Purchase Agreement; and the undersigned shall not take any
action (or fail to take any action) which is inconsistent with, or in
contravention of, the provisions of Section 5(c) of the Securities Purchase
Agreement.
2. The undersigned shall not effect any "Exempt Transfer" (as defined in the
Securities Purchase Agreement) unless the undersigned shall have caused the
transferee to execute and deliver to the Purchaser this Voting Agreement,
thus agreeing to: (i) vote all shares of the capital stock of the Company
owned from time to time by such transferee in favor of the election of the
Purchaser Appointee as shall be designated from time to time by Greenwich
II pursuant to Section 5(c) of the Securities Purchase Agreement, and (ii)
be bound by the terms of this Voting Agreement to the same extent as the
undersigned.
3. The undersigned hereby grants to the President of the Company a proxy to
vote all shares of the capital stock of the Company owned of record or
beneficially by the undersigned in favor of the election of the Purchaser
Appointee; and such proxy shall be irrevocable and shall survive the death
or disability of the undersigned (if an individual) and any merger,
consolidation, liquidation, dissolution or similar transaction affecting
the undersigned or the shares of the capital stock of the Company owned of
record by the undersigned (if the undersigned be other than an individual)
if the Person who becomes the record or beneficial holder of the shares is
otherwise a THSI Principal. In the event that, for any reason, the
foregoing proxy shall become unenforceable or shall have expired, then the
undersigned shall execute and grant a new proxy on the same terms as
provided herein. The proxy granted hereunder, and the obligations of the
undersigned under this Voting Agreement, shall be noted in the voting
records and registrar of the Company.
<PAGE>
2
4. The undersigned acknowledges that the Purchaser is relying upon this Voting
Agreement in connection with the execution, delivery and performance by the
Purchaser of the Securities Purchase Agreement and the purchase by the
Purchaser of the Securities.
5. This Voting Agreement shall terminate upon any termination of the
obligations under the Securities Purchase Agreement of the Company to
issue, and the Purchaser to purchase, the Securities. Unless terminated as
aforesaid, this Voting Agreement shall be effective as of the "Effective
Time" of the Merger (as defined in the Merger Agreement) but subject to the
release of this Voting Agreement pursuant to Section 4(a) of the Escrow
Agreement.
6. This Voting Agreement shall be governed by the laws of the State of New
York, except to the extent that the corporate laws of the State of Utah
shall be applicable in connection with the exercise of the proxy granted
herein.
7. Capitalized terms used herein which are not expressly defined herein shall
have the meanings given such terms in the Securities Purchase Agreement.
* * *
In witness whereof, the undersigned have executed and delivered this Voting
Agreement as of the November 1, 1999.
THSI Principal:
Samuel A. Mark 1999 Trust
By: /s/ Meryl Schlussel Mark
---------------------------------
Meryl Schlussel Mark
Trustee
Acknowledged and accepted:
Walnut Financial Services, Inc. (or THCG, Inc.)
By: /s/ Joel S. Kanter
-----------------------------
Joel S. Kanter
President
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
By: /s/ Keith Abell
-----------------------------
Keith Abell
Managing Member
<PAGE>
EXHIBIT I
Tag-Along Agreement
Whereas, pursuant to Section 5(e) of the Securities Purchase Agreement dated as
of October 29, 1999 (the "Securities Purchase Agreement") by and among:
(i) Greenwich Street Capital Partners II, L.P. ("Greenwich II"), GSCP
Offshore Fund, L.P., Greenwich Fund, L.P., Greenwich Street Employees
Fund, L.P. and TRV Executive Fund, L.P., (the foregoing being herein
together referred to as the "Purchaser") and (ii) Walnut Financial
Services, Inc. (which will change its name to "THCG, Inc.") (the
"Company"), the Purchaser is entitled to participate in any proposed
"Transfer" by any "Section 5 Transferor" (as such terms are defined in
the Securities Purchase Agreement); and
Whereas, the undersigned would be a "Section 5 Transferor" as defined in the
Securities Purchase Agreement.
Now therefore, as an inducement to the Purchaser to purchase the "Securities"
under, and as defined in, the Securities Purchase Agreement, the undersigned
does hereby agree as follows:
1. The undersigned shall be bound by, and shall comply with, all of the
provisions of Section 5(e) of the Securities Purchase Agreement, and all
other provisions of the Securities Purchase Agreement related thereto,
which would impose obligations upon the undersigned, all to the same extent
as if the undersigned were a party to Section 5(e) of the Securities
Purchase Agreement; and the undersigned shall not take any action (or fail
to take any action) which is inconsistent with, or in contravention of, the
provisions of Section 5(e) of the Securities Purchase Agreement.
2. The undersigned shall not effect any "Exempt Transfer" (as defined in the
Securities Purchase Agreement) unless the undersigned shall have caused the
transferee to execute and deliver to the Purchaser this Tag-Along
Agreement, thus agreeing to be bound by the terms of this Tag-Along
Agreement to the same extent as the undersigned.
3. The restrictions imposed upon the undersigned, and with respect to any
proposed Transfer of shares of the capital stock of the Company which is
subject to the provisions of Section 5(e) of the Securities Purchase
Agreement and this Tag-Along Agreement, and the obligations of the
undersigned under this Tag-Along Agreement, shall be noted on the stock
certificates of the undersigned and in the stock transfer and voting
records and registrar of the Company. No Transfer of shares of the capital
stock of the Company which is subject to the provisions of Section 5(e) of
the Securities Purchase Agreement and this Tag-Along Agreement shall be
effected by the Company unless there has been compliance with provisions of
Section 5(e) of the Securities Purchase Agreement and this Tag-Along
Agreement.
<PAGE>
2
4. The undersigned acknowledges that the Purchaser is relying upon this
Tag-Along Agreement in connection with the execution, delivery and
performance by the Purchaser of the Securities Purchase Agreement and the
purchase by the Purchaser of the Securities.
5. This Tag-Along Agreement shall terminate upon any termination of the
obligations under the Securities Purchase Agreement of the Company to
issue, and the Purchaser to purchase, the Securities. Unless terminated as
aforesaid, this Tag-Along Agreement shall be effective as of the "Effective
Time" of the Merger (as defined in the Merger Agreement) but subject to the
release of this Tag-Along Agreement pursuant to Section 4(a) of the "Escrow
Agreement".
6. This Tag-Along Agreement shall be governed by the laws of the State of
New York.
7. Capitalized terms used herein which are not expressly defined herein shall
have the meanings given such terms in the Securities Purchase Agreement.
* * *
In witness whereof, the undersigned have executed and delivered this Tag-Along
Agreement as of the November 1, 1999.
Section 5 Transferor:
/s/ Joseph D. Mark
------------------------------------
Print Name: Joseph D. Mark
-------------------------
Acknowledged and accepted:
Walnut Financial Services, Inc. (or THCG, Inc.)
By: /s/ Joel S. Kanter
-----------------------------
Joel S. Kanter
President
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
By: /s/ Keith Abell
-----------------------------
Keith Abell
Managing Member
<PAGE>
EXHIBIT J
Tag-Along Agreement
Whereas, pursuant to Section 5(e) of the Securities Purchase Agreement dated as
of October 29, 1999 (the "Securities Purchase Agreement") by and among:
(i) Greenwich Street Capital Partners II, L.P. ("Greenwich II"), GSCP
Offshore Fund, L.P., Greenwich Fund, L.P., Greenwich Street Employees
Fund, L.P. and TRV Executive Fund, L.P., (the foregoing being herein
together referred to as the "Purchaser") and (ii) Walnut Financial
Services, Inc. (which will change its name to "THCG, Inc.") (the
"Company"), the Purchaser is entitled to participate in any proposed
"Transfer" by any "Section 5 Transferor" (as such terms are defined in
the Securities Purchase Agreement); and
Whereas, the undersigned would be a "Section 5 Transferor" as defined in the
Securities Purchase Agreement.
Now therefore, as an inducement to the Purchaser to purchase the "Securities"
under, and as defined in, the Securities Purchase Agreement, the undersigned
does hereby agree as follows:
1. The undersigned shall be bound by, and shall comply with, all of the
provisions of Section 5(e) of the Securities Purchase Agreement, and all
other provisions of the Securities Purchase Agreement related thereto,
which would impose obligations upon the undersigned, all to the same extent
as if the undersigned were a party to Section 5(e) of the Securities
Purchase Agreement; and the undersigned shall not take any action (or fail
to take any action) which is inconsistent with, or in contravention of, the
provisions of Section 5(e) of the Securities Purchase Agreement.
2. The undersigned shall not effect any "Exempt Transfer" (as defined in the
Securities Purchase Agreement) unless the undersigned shall have caused the
transferee to execute and deliver to the Purchaser this Tag-Along
Agreement, thus agreeing to be bound by the terms of this Tag-Along
Agreement to the same extent as the undersigned.
3. The restrictions imposed upon the undersigned, and with respect to any
proposed Transfer of shares of the capital stock of the Company which is
subject to the provisions of Section 5(e) of the Securities Purchase
Agreement and this Tag-Along Agreement, and the obligations of the
undersigned under this Tag-Along Agreement, shall be noted on the stock
certificates of the undersigned and in the stock transfer and voting
records and registrar of the Company. No Transfer of shares of the capital
stock of the Company which is subject to the provisions of Section 5(e) of
the Securities Purchase Agreement and this Tag-Along Agreement shall be
effected by the Company unless there has been compliance with provisions of
Section 5(e) of the Securities Purchase Agreement and this Tag-Along
Agreement.
<PAGE>
2
4. The undersigned acknowledges that the Purchaser is relying upon this
Tag-Along Agreement in connection with the execution, delivery and
performance by the Purchaser of the Securities Purchase Agreement and the
purchase by the Purchaser of the Securities.
5. This Tag-Along Agreement shall terminate upon any termination of the
obligations under the Securities Purchase Agreement of the Company to
issue, and the Purchaser to purchase, the Securities. Unless terminated as
aforesaid, this Tag-Along Agreement shall be effective as of the "Effective
Time" of the Merger (as defined in the Merger Agreement) but subject to the
release of this Tag-Along Agreement pursuant to Section 4(a) of the "Escrow
Agreement".
6. This Tag-Along Agreement shall be governed by the laws of the State of
New York.
7. Capitalized terms used herein which are not expressly defined herein shall
have the meanings given such terms in the Securities Purchase Agreement.
* * *
In witness whereof, the undersigned have executed and delivered this Tag-Along
Agreement as of the November 1, 1999.
Section 5 Transferor:
Joshua A. Mark 1999 Trust
By: /s/ Meryl Schlussel Mark
---------------------------------
Meryl Schlussel Mark
Trustee
Acknowledged and accepted:
Walnut Financial Services, Inc. (or THCG, Inc.)
By: /s/ Joel S. Kanter
-----------------------------
Joel S. Kanter
President
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
By: /s/ Keith Abell
-----------------------------
Keith Abell
Managing Member
<PAGE>
EXHIBIT K
Tag-Along Agreement
Whereas, pursuant to Section 5(e) of the Securities Purchase Agreement dated as
of October 29, 1999 (the "Securities Purchase Agreement") by and among:
(i) Greenwich Street Capital Partners II, L.P. ("Greenwich II"), GSCP
Offshore Fund, L.P., Greenwich Fund, L.P., Greenwich Street Employees
Fund, L.P. and TRV Executive Fund, L.P., (the foregoing being herein
together referred to as the "Purchaser") and (ii) Walnut Financial
Services, Inc. (which will change its name to "THCG, Inc.") (the
"Company"), the Purchaser is entitled to participate in any proposed
"Transfer" by any "Section 5 Transferor" (as such terms are defined in
the Securities Purchase Agreement); and
Whereas, the undersigned would be a "Section 5 Transferor" as defined in the
Securities Purchase Agreement.
Now therefore, as an inducement to the Purchaser to purchase the "Securities"
under, and as defined in, the Securities Purchase Agreement, the undersigned
does hereby agree as follows:
1. The undersigned shall be bound by, and shall comply with, all of the
provisions of Section 5(e) of the Securities Purchase Agreement, and all
other provisions of the Securities Purchase Agreement related thereto,
which would impose obligations upon the undersigned, all to the same extent
as if the undersigned were a party to Section 5(e) of the Securities
Purchase Agreement; and the undersigned shall not take any action (or fail
to take any action) which is inconsistent with, or in contravention of, the
provisions of Section 5(e) of the Securities Purchase Agreement.
2. The undersigned shall not effect any "Exempt Transfer" (as defined in the
Securities Purchase Agreement) unless the undersigned shall have caused the
transferee to execute and deliver to the Purchaser this Tag-Along
Agreement, thus agreeing to be bound by the terms of this Tag-Along
Agreement to the same extent as the undersigned.
3. The restrictions imposed upon the undersigned, and with respect to any
proposed Transfer of shares of the capital stock of the Company which is
subject to the provisions of Section 5(e) of the Securities Purchase
Agreement and this Tag-Along Agreement, and the obligations of the
undersigned under this Tag-Along Agreement, shall be noted on the stock
certificates of the undersigned and in the stock transfer and voting
records and registrar of the Company. No Transfer of shares of the capital
stock of the Company which is subject to the provisions of Section 5(e) of
the Securities Purchase Agreement and this Tag-Along Agreement shall be
effected by the Company unless there has been compliance with provisions of
Section 5(e) of the Securities Purchase Agreement and this Tag-Along
Agreement.
<PAGE>
2
4. The undersigned acknowledges that the Purchaser is relying upon this
Tag-Along Agreement in connection with the execution, delivery and
performance by the Purchaser of the Securities Purchase Agreement and the
purchase by the Purchaser of the Securities.
5. This Tag-Along Agreement shall terminate upon any termination of the
obligations under the Securities Purchase Agreement of the Company to
issue, and the Purchaser to purchase, the Securities. Unless terminated as
aforesaid, this Tag-Along Agreement shall be effective as of the "Effective
Time" of the Merger (as defined in the Merger Agreement) but subject to the
release of this Tag-Along Agreement pursuant to Section 4(a) of the "Escrow
Agreement".
6. This Tag-Along Agreement shall be governed by the laws of the State of New
York.
7. Capitalized terms used herein which are not expressly defined herein shall
have the meanings given such terms in the Securities Purchase Agreement.
* * *
In witness whereof, the undersigned have executed and delivered this Tag-Along
Agreement as of the November 1, 1999.
Section 5 Transferor:
Rachel L. Mark 1999 Trust
By: /s/ Meryl Schlussel Mark
---------------------------------
Meryl Schlussel Mark
Trustee
Acknowledged and accepted:
Walnut Financial Services, Inc. (or THCG, Inc.)
By: /s/ Joel S. Kanter
-----------------------------
Joel S. Kanter
President
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
By: /s/ Keith Abell
-----------------------------
Keith Abell
Managing Member
<PAGE>
EXHIBIT L
Tag-Along Agreement
Whereas, pursuant to Section 5(e) of the Securities Purchase Agreement dated as
of October 29, 1999 (the "Securities Purchase Agreement") by and among:
(i) Greenwich Street Capital Partners II, L.P. ("Greenwich II"), GSCP
Offshore Fund, L.P., Greenwich Fund, L.P., Greenwich Street Employees
Fund, L.P. and TRV Executive Fund, L.P., (the foregoing being herein
together referred to as the "Purchaser") and (ii) Walnut Financial
Services, Inc. (which will change its name to "THCG, Inc.") (the
"Company"), the Purchaser is entitled to participate in any proposed
"Transfer" by any "Section 5 Transferor" (as such terms are defined in
the Securities Purchase Agreement); and
Whereas, the undersigned would be a "Section 5 Transferor" as defined in the
Securities Purchase Agreement.
Now therefore, as an inducement to the Purchaser to purchase the "Securities"
under, and as defined in, the Securities Purchase Agreement, the undersigned
does hereby agree as follows:
1. The undersigned shall be bound by, and shall comply with, all of the
provisions of Section 5(e) of the Securities Purchase Agreement, and all
other provisions of the Securities Purchase Agreement related thereto,
which would impose obligations upon the undersigned, all to the same extent
as if the undersigned were a party to Section 5(e) of the Securities
Purchase Agreement; and the undersigned shall not take any action (or fail
to take any action) which is inconsistent with, or in contravention of, the
provisions of Section 5(e) of the Securities Purchase Agreement.
2. The undersigned shall not effect any "Exempt Transfer" (as defined in the
Securities Purchase Agreement) unless the undersigned shall have caused the
transferee to execute and deliver to the Purchaser this Tag-Along
Agreement, thus agreeing to be bound by the terms of this Tag-Along
Agreement to the same extent as the undersigned.
3. The restrictions imposed upon the undersigned, and with respect to any
proposed Transfer of shares of the capital stock of the Company which is
subject to the provisions of Section 5(e) of the Securities Purchase
Agreement and this Tag-Along Agreement, and the obligations of the
undersigned under this Tag-Along Agreement, shall be noted on the stock
certificates of the undersigned and in the stock transfer and voting
records and registrar of the Company. No Transfer of shares of the capital
stock of the Company which is subject to the provisions of Section 5(e) of
the Securities Purchase Agreement and this Tag-Along Agreement shall be
effected by the Company unless there has been compliance with provisions of
Section 5(e) of the Securities Purchase Agreement and this Tag-Along
Agreement.
<PAGE>
2
4. The undersigned acknowledges that the Purchaser is relying upon this
Tag-Along Agreement in connection with the execution, delivery and
performance by the Purchaser of the Securities Purchase Agreement and the
purchase by the Purchaser of the Securities.
5. This Tag-Along Agreement shall terminate upon any termination of the
obligations under the Securities Purchase Agreement of the Company to
issue, and the Purchaser to purchase, the Securities. Unless terminated as
aforesaid, this Tag-Along Agreement shall be effective as of the "Effective
Time" of the Merger (as defined in the Merger Agreement) but subject to the
release of this Tag-Along Agreement pursuant to Section 4(a) of the "Escrow
Agreement".
6. This Tag-Along Agreement shall be governed by the laws of the State of
New York.
7. Capitalized terms used herein which are not expressly defined herein shall
have the meanings given such terms in the Securities Purchase Agreement.
* * *
In witness whereof, the undersigned have executed and delivered this Tag-Along
Agreement as of the November 1, 1999.
Section 5 Transferor:
Samuel A. Mark 1999 Trust
By: /s/ Meryl Schlussel Mark
---------------------------------
Meryl Schlussel Mark
Trustee
Acknowledged and accepted:
Walnut Financial Services, Inc. (or THCG, Inc.)
By: /s/ Joel S. Kanter
-----------------------------
Joel S. Kanter
President
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
By: /s/ Keith Abell
-----------------------------
Keith Abell
Managing Member
