August 20, 2013
Board of Directors
14 Wall Street, 15th Floor
New York, New York 10005
Attention: Elisabeth DeMarse, CEO
Ladies and Gentlemen:
This letter sets forth the proposed terms on which Spear Point, LLC ("Spear Point") would acquire TheStreet, Inc. ("TST").
1.Merger. Spear Point proposes to acquire TST through a merger transaction (the "Merger"). Spear Point will establish a wholly-owned corporate designee (the "Merger Subsidiary"), and, upon the effective time of the merger (the "Effective Time"), the Merger Subsidiary will merge with and into TST, with TST surviving the transaction.
2.Conversion of TST Securities. At the Effective Time:
(A) Shares of TST Common Stock.
(I) Assuming 33,892,028 shares of common stock outstanding (net of Series B Preferred Stock), each share of TST common stock outstanding immediately prior to the Effective Time (other than shares owned by TST, or any of its respective subsidiaries and shares of TST common stock for which dissenters' rights have been validly exercised and not withdrawn) will be cancelled and converted into the right to receive $2.80 (the "Merger Price") in cash, without interest. Dissenters' shares, if any, shall be treated in accordance with applicable law. Assuming no dissenters' shares, the aggregate consideration to be received by holders of TST's 33,892,028 outstanding shares common stock will equal $94,897,678.
(ii) Each share of outstanding TST common stock owned immediately prior to the Effective Time by TST, or any of its respective subsidiaries shall be cancelled without consideration.
(B) Shares of TST Series B Preferred Stock. Assuming 5,500 shares of Series B Preferred Stock outstanding, each share of TST Series B Preferred Stock outstanding immediately prior to the Effective Time will be cancelled and converted into the right to receive an amount equal to $2,727.27 per share. The aggregate consideration to be received by holders of TST's 5,500 shares of Series B Preferred Stock will equal $15,000,000. All preferred stockholders will waive any other rights including conversion rights or rights to liquidation preferences.
(C) TST Stock Options. Each TST stock option that is outstanding, unexercised and vested as of immediately before the Effective Time will be cancelled and converted into the right to receive an amount in cash, without interest, equal to the amount by which $2.80 per share exceeds the exercise price of such option, multiplied by the number of shares as to which option is then vested and exercisable. Each TST stock option outstanding and unexercised as of immediately before the Effective Time with a per share exercise price greater than or equal to the Merger Price will be cancelled without consideration.
(D) Merger Subsidiary Stock. Each share of the common stock of the Merger Subsidiary that is outstanding immediately prior to the Effective Time shall be converted into one (1) share of common stock of the surviving corporation, TST.
The total price to be paid to all common and preferred stockholders under this Section 2 is referred to as the "Total Price."
3. Payment. Payment of the cash consideration to TST stock and option holders will be effected as soon as practicable after the Effective Date using mutually acceptable distribution methods.
4. Definitive Agreements. The transactions contemplated hereby will be subject to, and conditioned upon, among other things, the negotiation, execution and delivery of a definitive Merger Agreement in form and substance acceptable to Spear Point providing for, among other things, customary representations and warranties, covenants, closing conditions, other rights and obligations, together with such other agreements as Spear Point may request (collectively, the "Definitive Agreements").
5. Go Shop and Termination Fee. It is intended that the Definitive Agreements will provide that during the period ending 90 days after entering into the Definitive Agreements, TST will be permitted to solicit, initiate or encourage the submission of alternative acquisition proposals. In the event TST desires to accept an offer for an acquisition transaction in which the aggregate consideration to be received by all common and preferred stockholders of TST is 10% more than the Total Price (a "Superior Offer"), TST will be free to terminate the Definitive Agreements upon the payment to Spear Point of a termination fee equal to 5% of the amount of such Superior Offer, unless Spear Point has offered to increase the Total Price by 6% in which case TST will proceed with the Merger at such increased Total Price.
In the event of a Superior Offer or in the event that Spear Point increases the Total Price, the additional consideration, net of the termination fee paid to Spear Point (if applicable), would be allocated 85% to preferred stockholders and 15% to common stockholders until the preferred stockholders had received $32,000,000 in total consideration, at which point any additional consideration would be allocated 100% to the common stockholders.
6. Conditions. The consummation of the transactions contemplated by this letter shall be subject to satisfaction of the following conditions:
The completion of a due diligence investigation by Spear Point of TST's business, assets and liabilities, the scope and results of which shall be satisfactory to Spear Point in its sole discretion;
The negotiation, execution and delivery of the Definitive Agreements;
The satisfaction or waiver of the conditions to closing set forth in the Definitive Agreements, including, without limitation, that TST's cash and accounts receivable balances meet or exceed the minimum amounts set forth in the Definitive Agreements on the closing date;
Satisfaction of all applicable federal and state filing and licensing requirements related to or in connection with the proposed transactions, and receipt of all applicable federal and state regulatory approvals required to consummate the proposed transactions;
(e)Spear Point's receipt of financing for the transaction on terms satisfactory to Spear Point in its sole discretion;
(f)Employment agreements with TST management designated by Spear Point on terms acceptable to Spear Point;
(g)Extension agreement with Jim Cramer on terms acceptable to Spear Point; and
(h)The approval of the transactions contemplated hereby by TST's Board of Directors, the recommendation of the transactions by the Board to TST stockholders, the approval by the common stockholders at a duly-noticed meeting and any requisite approvals from TST's preferred stockholders.
7. Due Diligence Investigation. From the date hereof, TST shall cooperate with Spear Point and its representatives and agents (the "Spear Point Representatives") in the conduct of Spear Point's due diligence investigation. Any of the Spear Point Representatives may make or cause to be made such investigations as they deem necessary or advisable of TST and its businesses and assets. The Company shall permit the Spear Point Representatives to have reasonable access during business hours to TST's premises and to all of its books and records, and shall furnish to such persons such financial and operating and other information with respect to TST as any of the Spear Point Representatives from time to time may request. In furtherance and not in limitation of the foregoing, TST shall, as requested by any of the Spear Point Representatives, arrange for such persons to interview and to meet from time to time with TST's major customers, suppliers, distributors, directors, officers and senior personnel.
8. No Shop. By signing this letter, TST recognizes that the investigation and due diligence contemplated by this letter may involve the expenditure of substantial time and expense by Spear Point. Therefore, from the date of this letter until November 18, 2013, neither TST nor any of its representatives or agents shall entertain, solicit or encourage, directly or indirectly, in any manner, furnish or cause to be furnished any information to any persons or entities (other than Spear Point) in connection with, or negotiate or otherwise pursue, an equity investor for TST, or negotiate or otherwise pursue the sale of TST, either by the sale of all or any substantial part of the stock or assets of TST, or engage in any merger or other business combination involving TST or otherwise.
9. Termination. In the event that Spear Point elects not to pursue the proposed transaction for any reason, or for any reason the Definitive Agreements between the parties have not been executed and delivered by November 18, 2013, either party may terminate this letter without liability on the part of any party.
10. No Binding Agreement. Since this letter consists only of an expression of Spear Point's and TST's current intent, it is expressly understood that no liability or obligation of any nature whatsoever is intended to be created hereunder (except for obligations under Sections 7, 8, and 9, hereof and this Section 10), and this letter is not a contract for an acquisition of or investment in TST by Spear Point. It is understood and agreed that Spear Point's and TST's respective obligations to consummate the transactions contemplated by this letter are expressly conditioned upon the execution and delivery by Spear Point and TST of the Definitive Agreements and the satisfaction of the conditions set forth therein. In the event such Definitive Agreements are not executed and delivered, neither Spear Point nor TST shall be obligated for any expenses, charges or claims whatsoever of the other party arising out of this letter, the proposed combination or otherwise (except for breaches of obligations under Sections 7, 8 and/or 9 hereof).
If this letter is acceptable, please sign a copy of this letter and return it to the undersigned on or before September 3, 2013 at 5 p.m. New York time. In the event you have not returned a signed copy on or before such time, this letter will expire.
We look forward to speaking with you concerning the proposal outlined in this letter.
Very truly yours,
Spear Point, LLC
/s/ Rodney A. Bienvenu, Jr.
By: Rodney A. Bienvenu, Jr.
Its: Co-Chief Executive Officer