SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D/A
(AMENDMENT NO. 5 TO SCHEDULE 13D)
Under the Securities Exchange Act of 1934
T/SF COMMUNICATIONS CORPORATION
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(Name of Issuer)
Shares of Common Stock, par value $0.10 per share
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(Title of Class of Securities)
872857107
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(CUSIP NUMBER)
FIR TREE PARTNERS
1211 Avenue of the Americas
29th Floor
New York, New York 10036
Tel. No.: (212) 398-3500
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
- with copies to -
Eliot D. Raffkind, P.C.
Akin, Gump, Strauss, Hauer & Feld, LLP
1700 Pacific Avenue, Suite 4100
Dallas, Texas 75201-4618
(214) 969-2800
August 12, 1997
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(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(b)(3) or (4) check the following
box. [ ]
The information required in the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities
Exchange Act of 1934, as amended ("Act"), or otherwise subject to the
liabilities of that section of the Act but shall be subject to all other
provisions of the Act.
CUSIP No. 872857107 13D
1 NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Fir Tree, Inc. d/b/a Fir Tree Partners
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [ X ]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) or 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
USA
NUMBER OF 7 SOLE VOTING POWER 487,506
SHARES
BENEFICIALLY 8 SHARED VOTING POWER 0
OWNED BY
EACH 9 SOLE DISPOSITIVE POWER 487,506
REPORTING
PERSON WITH 10 SHARED DISPOSITIVE POWER 0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
487,506
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
14.77%
14 TYPE OF REPORTING PERSON*
CO, IN
*SEE INSTRUCTIONS BEFORE FILLING OUT
AMENDMENT NO. 5 TO SCHEDULE 13D
This Amendment No. 5 to Schedule 13D is being filed on behalf of
Fir Tree, Inc., a New York corporation, doing business as Fir Tree
Partners, and Mr. Jeffrey Tannenbaum, the sole shareholder, executive
officer, director, and principal, as an amendment to the initial statement
on Schedule 13D, relating to shares of Common Stock of T/SF Communications
Corporation, as filed with the Securities and Exchange Commission (the
"Commission") on September 25, 1995, amended by Amendment No. 1 to Schedule
13D filed with the Commission on May 7, 1996, amended by Amendment No. 2 to
Schedule 13D filed with the Commission on March 24, 1997, amended by
Amendment No. 3 to Schedule 13D filed with the Commission on June 5, 1997
(as amended, the "Amended Schedule 13D"), and further amended by amendment
No. 4 to Schedule 13D filed with the Commission on July 8, 1997. The
Amended Schedule 13D is hereby further amended and supplemented as follows:
ITEM 4. PURPOSE OF THE TRANSACTION
Item 4 of the Amended Schedule 13D is hereby amended and restated in
its entirety to read as follows:
Fir Tree Partners and Mr. Tannenbaum acquired shares of
Common Stock for portfolio investment purposes. On July 1, 1997, the
Issuer, Jeffrey Tannenbaum, Fir Tree Partners and an affiliate of Fir Tree
Partners entered into that certain Preferred Stock Purchase Agreement (the
"Purchase Agreement") pursuant to which the Issuer indicated its intent to
make a cash tender offer for up to 2,050,000 shares of Common Stock from
its stockholders at an expected price of $37.00 net per share for a total
cost of approximately $75,850,000 (the "Proposed Tender Offer"). As part
of the financing of such tender offer, entities for which Mr. Tannenbaum,
Fir Tree Partners or an affiliate of Fir Tree Partners acts as general
partner or investment advisor agreed to acquire $5,500,000 of 9%
Convertible Preferred Stock of the Issuer pursuant to the terms of the
Purchase Agreement. Pursuant to a letter agreement, dated August 11, 1997
(the "Termination Agreement"), the Purchase Agreement was terminated by the
parties thereto. On August 12, 1997, Fir Tree Partners, on behalf of
certain of its affiliates (collectively, "Fir Tree"), and VS&A
Communications Partners II, L.P. ("VSA") entered into a letter agreement
regarding Fir Tree's participation in VSA's proposed acquisition of a
controlling interest in the Issuer (the "Letter Agreement"), a copy of
which is attached hereto as Exhibit C and incorporated by reference herein.
Pursuant to the Letter Agreement, the parties contemplated that VSA will
effect the acquisition of the Issuer (i) in a three-step transaction (the
"Transaction") accounted for as a recapitalization of the Issuer involving
(A) a tender offer by the Issuer for all outstanding shares of Common Stock
(the "Issuer Tender Offer") followed by (B) an investment by VSA in newly-
issued shares of Common Stock and (C) a merger (that will not result in
goodwill to the Issuer) or a reverse split of Common Stock designed to cash
out all remaining stockholders of the Issuer other than VSA and Fir Tree or
(ii) pursuant to an alternative structure mutually acceptable to VSA and
Fir Tree. Fir Tree will participate in the Transaction through the
retention of 487,506 shares of Common Stock currently held by it and will
not participate in the Issuer Tender Offer. Simultaneous with the
consummation of the Issuer Tender Offer, Fir Tree, VSA and the Issuer will
enter into the VSA Stockholders Agreement (as defined in Item 6 herein)
which sets forth the respective rights of the parties subsequent to the
consummation of the Transaction. In connection with the Transaction, it is
anticipated that one or more limited liability companies (collectively,
"Newco") will be formed to acquire certain business units of the Issuer in
exchange for a preferred membership interest in Newco to be issued to the
Issuer. Newco will be owned by VSA and Fir Tree in the same proportion as
each such stockholder owns Common Stock following the transaction. Fir
Tree's obligation to participate in the Transaction is subject to the
satisfaction of the following conditions: (i) VSA and its affiliates and
limited partners shall have invested not less than $35 million in Common
Stock at a per share price equal to the Issuer Tender Offer price; (ii) the
Issuer shall have accepted for payment pursuant to the Issuer Tender Offer
a number of shares of Common Stock such that VSA and Fir Tree would have
the power to approve the merger or reverse split without the concurring
vote of any other stockholder of the Issuer; and (iii) the Issuer shall
have obtained all necessary debt financing to consummate the Issuer Tender
Offer and the merger or reverse split. In addition, VSA has agreed that it
will use its reasonable best efforts to secure financing for the
Transaction that will permit the Issuer to dispose of individual
subsidiaries or other business units for cash or non-cash consideration and
to utilize the proceeds of such dispositions to reduce indebtedness without
penalty. Fir Tree's obligations under the Letter Agreement shall
terminate at the election of Fir Tree in the event that VSA fails to enter
into a definitive agreement with the Issuer with respect to the Transaction
that is acceptable to Fir Tree prior to August 31, 1997. In the event that
an acceptable definitive agreement is executed, Fir Tree has agreed to work
exclusively with VSA with respect to an acquisition of the Issuer for a
period of 120 days, provided that Fir Tree's obligation shall terminate
simultaneously with any termination of such definitive agreement.
ITEM 6. CONTRACTS, ARRANGEMENT, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER
Item 6 of the Amended Schedule 13D is hereby amended and restated in
its entirety to read as follows:
On July 1, 1997, the Issuer and Jeffrey Tannenbaum, Fir Tree
Partners and an affiliate of Fir Tree Partners entered into the Purchase
Agreement pursuant to which the Issuer indicated its intent to consummate
the Proposed Tender Offer. As part of the financing of such tender offer,
entities for which Mr. Tannenbaum, Fir Tree Partners or an affiliate of Fir
Tree Partners acts as general partner or investment advisor agreed to
acquire $5,500,000 of 9% Convertible Preferred Stock of the Issuer pursuant
to the terms of the Purchase Agreement. Pursuant to the Termination
Agreement, the Purchase Agreement was terminated by the parties thereto.
On August 12, 1997, Fir Tree entered into the Letter Agreement. Pursuant
to the Letter Agreement, the parties contemplated that VSA will effect the
acquisition of the Issuer (i) in a three-step transaction accounted for as
a recapitalization of the Issuer involving (A) the Issuer Tender Offer
followed by (B) an investment by VSA in newly-issued shares of Common Stock
and (C) a merger (that will not result in goodwill to the Issuer) or a
reverse split of Common Stock designed to cash out all remaining
stockholders of the Issuer other than VSA and Fir Tree or (ii) pursuant to
an alternative structure mutually acceptable to VSA and Fir Tree. Fir Tree
will participate in the Transaction through the retention of 487,506 shares
of Common Stock currently held by it and will not participate in the Issuer
Tender Offer. Simultaneous with the consummation of the Issuer Tender
Offer, Fir Tree, VSA and the Issuer will enter into the VSA Stockholders
Agreement. In connection with the Transaction, it is anticipated that one
or more limited liability companies will be formed to acquire certain
business units of the Issuer in exchange for a preferred membership
interest in Newco to be issued to the Issuer. Newco will be owned by VSA
and Fir Tree in the same proportion as each such stockholder owns Common
Stock following the transaction. Fir Tree's obligation to participate in
the Transaction is subject to the satisfaction of the following conditions:
(i) VSA and its affiliates and limited partners shall have invested not
less than $35 million in Common Stock at a per share price equal to the
Issuer Tender Offer price; (ii) the Issuer shall have accepted for payment
pursuant to the Issuer Tender Offer a number of shares of Common Stock such
that VSA and Fir Tree would have the power to approve the merger or reverse
split without the concurring vote of any other stockholder of the Issuer;
and (iii) the Issuer shall have obtained all necessary debt financing to
consummate the Issuer Tender Offer and the merger or reverse split. In
addition, VSA has agreed that it will use its reasonable best efforts to
secure financing for the Transaction that will permit the Issuer to dispose
of individual subsidiaries or other business units for cash or non-cash
consideration and to utilize the proceeds of such dispositions to reduce
indebtedness without penalty. Fir Tree's obligations under the Letter
Agreement shall terminate at the election of Fir Tree in the event that VSA
fails to enter into a definitive agreement with the Issuer with respect to
the Transaction that is acceptable to Fir Tree prior to August 31, 1997.
In the event that an acceptable definitive agreement is executed, Fir Tree
has agreed to work exclusively with VSA with respect to an acquisition of
the Issuer for a period of 120 days, provided that Fir Tree's obligation
shall terminate simultaneously with any termination of such definitive
agreement.
In connection with the execution of the Purchase Agreement and
the consummation of the Proposed Tender Offer, the Issuer, certain members
of its board of directors, certain of its officers and related persons and
certain affiliates of Fir Tree Partners entered into that certain
Stockholders Agreement dated July 1, 1997 (the "Stockholders Agreement").
Pursuant to the terms of the Termination Agreement, the Stockholders
Agreement was also terminated by the parties thereto. In connection with
the execution of the Letter Agreement, the Issuer and VSA and Fir Tree
(collectively, the "Stockholders") entered into that certain Stockholders
Agreement dated August 13, 1997 (the "VSA Stockholders Agreement"), a copy
of which is attached hereto as Exhibit D and incorporated by reference
herein, pursuant to which the Stockholders have agreed, among other things,
that subsequent to the consummation of the transactions set forth in the
Letter Agreement, (i) Fir Tree would be granted a tag along right with
respect to the transfer of any shares of Common Stock held by VSA and its
affiliates, (ii) the Stockholders would be granted certain drag along
rights related to the sale of 100% of the outstanding Common Stock or the
sale of all or substantially all of the Issuer's assets and (iii) the
Issuer would grant preemptive rights to each of the Stockholders with
respect to certain issuances of Common Stock. In addition, pursuant to the
VSA Stockholders Agreement, each Stockholder agreed (i) to vote all of its
shares of Common Stock, and the Issuer would take all required action, so
that (A) designees of VSA will be elected to the board of directors of the
Issuer (the "Board") and will constitute a simple majority of the Board and
(B) designees of Fir Tree ("Fir Tree Directors") will be elected to the
Board such that Fir Tree's representation on the Board shall be in
proportion to its percentage interest in the Common Stock, and (ii) that
the majority approval of the Fir Tree Directors would be required to
undertake certain actions. Pursuant to the VSA Stockholders Agreement, at
any time on or after the fifth anniversary of the date of such agreement,
Fir Tree has the right to require that the Issuer proceed with (i) a sale
of a majority of the outstanding Common Stock, (ii) a merger or
consolidation, or (iii) the sale of all or substantially all of the assets
of the Issuer, all in compliance with the terms of the attached VSA
Stockholders Agreement. The effectiveness of the Stockholders Agreement is
conditioned on, among other things, the consummation of the Issuer Tender
Offer.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
Item 7 of the Amended Schedule 13D is hereby amended by adding the
following:
Exhibit C - Letter Agreement, dated August 12,
1997, between Fir Tree Partners and VSA.
Exhibit D - Stockholders Agreement, dated as of
August 13, 1997, among the Issuer, VSA and certain
affiliates of Fir Tree Partners.
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief,
the undersigned certifies that the information set forth in this statement
is true, complete and correct.
Dated: August 19, 1997
Fir Tree, Inc. d/b/a/ Fir Tree Partners
By: /s/ JEFFREY TANNENBAUM
---------------------------------
JEFFREY TANNENBAUM, President
/s/ Jeffrey Tannenbaum
-------------------------------------
Jeffrey Tannenbaum
EXHIBIT C - SCHEDULE 13D
FIR TREE PARTNERS
1211 AVENUE OF THE AMERICAS, 29TH FLOOR
NEW YORK, NEW YORK 10036
August 12, 1997
VS&A Communications Partners II, L.P.
350 Park Avenue
New York, New York 10022
Re: T/SF COMMUNICATIONS CORPORATION
Gentlemen:
This letter sets forth the agreement of VS&A Communications Partners
II, L.P. ("VSA") and Fir Tree Partners, on behalf of Fir Tree Value Fund,
L.P., Fir Tree Institutional Value Fund, L.P. and Fir Tree Value Partners
LDC (collectively "Fir Tree"), regarding Fir Tree's participation in VSA's
proposed acquisition of a controlling interest in T/SF Communications
Corporation (the "Company").
It is presently contemplated that VSA will effect the acquisition of
the Company (the "Transaction") in a three-step transaction accounted for
as a recapitalization of the Company involving (i) an issuer tender offer
by the Company for all outstanding shares of the Company's common stock
followed by (ii) an investment by VSA in newly-issued shares of the
Company's common stock and (iii) a merger (that will not result in goodwill
to the Company) or a reverse split of the Company's common stock designed
to cash out all remaining stockholders of the Company other than VSA and
Fir Tree or pursuant to an alternative structure mutually acceptable to VSA
and Fir Tree.
VSA and Fir Tree hereby agree that Fir Tree will participate in the
Transaction through the retention of the 487,506 shares of the Company's
common stock currently held by it and will not participate in the issuer
tender offer. Simultaneously with consummation of the issuer tender offer,
Fir Tree, VSA and the Company will enter into the Stockholders Agreement
attached hereto. In connection with the Transaction, it is anticipated
that one or more limited liability companies (collectively, "Newco") will
be formed to acquire certain business units of the Company in exchange for
a preferred membership interest in Newco to be issued to the Company. VSA
and Fir Tree hereby agree that the common membership interest in Newco will
be owned by them in the same proportions as the Company's common stock is
owned by them following the Transaction, and that Newco's operating
agreement will contain provisions equivalent to those in the Stockholders
Agreement.
Fir Tree's obligation to participate in the Transaction shall be
subject to the satisfaction of the following conditions: (i) VSA and its
affiliates and limited partners shall have invested not less than $35.0
million in the Company's common stock at a per-share price equal to the
tender offer price; (ii) the Company shall have accepted for payment
pursuant to the issuer tender offer a number of shares of the Company's
common stock such that VSA and Fir Tree would have the power to approve the
merger or reverse split without the concurring vote of any other
stockholder of the Company; and (iii) the Company shall have obtained all
necessary debt financing to consummate the tender offer and the merger or
reverse split.
VSA agrees that it will exercise its reasonable best efforts to secure
financing for the Transaction that will permit the Company to dispose of
individual subsidiaries or other business units for cash or non-cash
consideration and to utilize the proceeds of such dispositions to reduce
indebtedness without penalty. VSA further agrees that any bridge financing
obtained in connection with the Transaction shall not obligate the Company
to accept permanent financing from such bridge lender.
Fir Tree's obligations hereunder shall terminate at the election of
Fir Tree in the event that VSA fails to enter into a definitive agreement
with the Company with respect to the Transaction acceptable to Fir Tree
prior to 5:00 P.M. New York time on August 31, 1997. If VSA shall not
enter into a definitive agreement with the Company with respect to the
Transaction, regardless of the reason therefor, VSA shall have no liability
or obligation to Fir Tree. In the event that an acceptable definitive
agreement is executed, Fir Tree agrees to work exclusively with VSA with
respect to an acquisition of the Company for a period of 120 days, provided
that Fir Tree's obligations shall terminate simultaneously with any
termination of such agreement. In the event of any such termination, Fir
Tree and VSA will share any break-up or similar fees received by VSA in
connection with such termination in proportion to their respective
ownership percentages in the Company had the Transaction occurred so long
as Fir Tree is not a participant (other than solely as a seller of shares)
in a competing transaction. In the event that the Transaction is
consummated, all out-of-pocket fees and expenses incurred by Fir Tree will
be reimbursed by the Company.
Please evidence your agreement with the foregoing by executing this
letter in the space provided below and returning an executed copy to the
undersigned.
Very truly yours,
Fir Tree Partners
By: /s/ Jeff Tannenbaum
--------------------------
Jeff Tannenbaum
Accepted and Agreed to:
VS&A Communications Partners II, L.P.
By: /s/ Jeffrey Stevenson
-------------------------------
President and General Partner
EXHIBIT D - SCHEDULE 13D
STOCKHOLDERS AGREEMENT
Stockholders Agreement dated as of August ______, 1997 among (i) T/SF
COMMUNICATIONS CORPORATION, a Delaware corporation (the "COMPANY"), (ii)
VS&A COMMUNICATIONS PARTNERS II, L.P., a Delaware limited partnership
("VSA"), and (iii) FIR TREE VALUE FUND, L.P., FIR TREE INSTITUTIONAL VALUE
FUND, L.P. and FIR TREE VALUE PARTNERS LDC (collectively, "FIR TREE"). VSA
and Fir Tree collectively own a majority of the Company's outstanding
Common Stock and are referred to herein as the "STOCKHOLDERS".
The parties agree as follows:
SECTION 1. DEFINITIONS. For purposes of this Agreement, the
following terms have the indicated meanings:
"AFFILIATE" of a person means any other person controlling, controlled
by or under common control with such person, whether by ownership of voting
securities, by contract or otherwise, and in the case of any Stockholder
shall include any partner of such Stockholder and in the case of the
Company shall include any officer or director of the Company.
"COMMON STOCK" means the Company's Common Stock, $.10 par value per
share.
"INDEPENDENT THIRD PARTY" means any person who does not own in excess
of 5% of the Common Stock on a fully-diluted basis, who is not controlling,
controlled by or under common control with any such 5% owner of Common
Stock and who is not the spouse, ancestor or descendant (by birth or
adoption) of any such 5% owner of Common Stock.
"INVESTOR STOCK" means Shares held by Fir Tree and its Affiliates.
"SALE OF THE COMPANY" means (i) the sale of beneficial ownership of a
majority or more of the outstanding Common Stock by any person or "group"
(as that term is used in Regulation 13D under the Securities Exchange Act
of 1934) other than the Stockholders and their respective Affiliates, (ii)
a merger or consolidation of the Company with or into another entity, or
(iii) the sale of all or substantially all of the assets of the Company.
"SHARES" means (i) all shares of Common Stock now held or hereafter
acquired by the Stockholders, and (ii) all other securities issued or
issuable directly or indirectly with respect to such shares of Common Stock
by way of stock dividend or stock split or in connection with a combination
of shares, recapitalization, merger, consolidation or other reorganization.
"SPONSOR STOCK" means Shares held by VSA and its Affiliates.
SECTION 2. TAG-ALONG RIGHTS. Not less than 30 days prior to any
proposed transfer of Sponsor Stock, the transferring Stockholder shall
deliver to the other Stockholders a written notice (the "SALE NOTICE")
specifying in reasonable detail the identity of the proposed transferee(s)
and the terms and conditions of the proposed transfer. Each other
Stockholder may elect to participate in the proposed transfer by delivering
to the transferring Stockholder a written notice of such election within
the 20-day period following delivery of the Sale Notice. If any other
Stockholders elect to participate in such transfer, the transferring
Stockholder and each such participating Stockholder will be entitled to
sell in such proposed transfer, at the same price and on the same terms, a
number of shares of Common Stock equal to the product of (i) the quotient
determined by dividing the percentage of the then-outstanding Common Stock
held by the transferring Stockholder or such participating Stockholder, as
the case may be, by the aggregate percentage of the then-outstanding Common
Stock held by the transferring Stockholder and all participating
Stockholders, multiplied by (ii) the number of shares of Common Stock to be
sold in such proposed transfer. This Section 2 shall not apply to
transfers of Sponsor Stock to Affiliates of VSA (provided that such
Affiliates shall continue to be bound by the terms hereof).
SECTION 3. DRAG-ALONG RIGHTS. If the holders of a majority of the
outstanding Sponsor Stock approve the Sale of the Company to an Independent
Third Party involving the sale of 100% of the outstanding Common Stock or
the sale of all or substantially all of its assets, whether by merger,
consolidation, sale of all of the outstanding Common Stock or otherwise (an
"APPROVED SALE"), the Stockholders shall consent to and raise no objections
against such Approved Sale (including exercising any rights of appraisal)
and shall take all necessary and desirable actions in their capacities as
stockholders in connection with the consummation of such Approved Sale. If
the Approved Sale is structured as a sale of stock, the Stockholders shall
agree to sell all of their shares of Common Stock and rights to acquire
shares of Common Stock on the terms and conditions approved by the holders
of Sponsor Stock. The obligations of the Stockholders with respect to any
Approved Sale are subject to the condition that, upon the consummation of
such Approved Sale, all of the holders of Common Stock will receive the
same form and amount of consideration per share of Common Stock or, if any
holders are given an option as to the form and amount of consideration to
be received, all holders will be given the same option. The obligation of
Fir Tree to participate in such Approved Sale shall be subject to the
further conditions that (x) the consideration receivable by the
Stockholders in such Approved Sale shall consist entirely of cash and/or
securities of an issuer with a market capitalization of $250,000,000 or
more that are either listed on a national securities exchange or traded on
the Nasdaq National Market System, (y) the securities received in such
transaction (if any) by the Stockholders shall not exceed 20% of the total
trading volume of such securities during the 45-day period prior to such
receipt and shall otherwise be freely tradable (except to the extent they
are subject to Rule 145 under the Securities Act of 1933, as amended), and
(z) the Company shall have received a favorable fairness opinion with
respect to the Approved Sale from an independent investment banking firm of
national standing that is mutually acceptable to VSA and Fir Tree.
SECTION 4. PREEMPTIVE RIGHTS. If the Company proposes to issue
any shares of Common Stock or other securities exercisable for or
convertible into Common Stock (other than issuances for non-cash
consideration in connection with business or asset acquisition
transactions, compensatory issuances to directors, officers, employees and
consultants of the Company, issuances to lenders in connection with
financing transactions and issuances pursuant to registered public
offerings), each Stockholder shall have the right of first refusal to
purchase a portion of such securities equal to such Stockholder's
percentage interest in the Common Stock on a fully-diluted basis
immediately prior to such issuance. The Company shall give each
Stockholder at least 20 days' prior written notice of any such proposed
issuance setting forth in reasonable detail the proposed terms and
conditions thereof and shall offer to each Stockholder the opportunity to
purchase such securities at the same price, on the same terms, and at the
same time as the securities are proposed to be issued by the Company. A
Stockholder may exercise its right of first refusal by delivery of an
irrevocable written notice to the Company not more than 10 days after
delivery of the Company's notice. The obligation of the Stockholders
exercising their rights pursuant to this Section 4 to purchase and pay for
securities shall be conditioned upon the consummation of the proposed
issuance by the Company.
SECTION 5. CORPORATE GOVERNANCE.
(a) BOARD OF DIRECTORS. Each Stockholder agrees to vote all
securities of the Company over which such Stockholder has voting control
and to take all other necessary or desirable actions within its control
(whether as a stockholder, director or officer of the Company or otherwise,
and including without limitation attendance at meetings in person or by
proxy for purposes of obtaining a quorum and execution of written consents
in lieu of meetings), and the Company shall take all necessary and
desirable actions within its control (including, without limitation,
calling special board and stockholder meetings), so that: (i) designees of
VSA shall be elected to the Company's Board of Directors and shall
constitute a simple majority of the Board, and (ii) designees of Fir Tree
(the "FIR TREE DIRECTORS") shall be elected to the Company's Board of
Directors such that Fir Tree's representation on the Board shall be in
proportion to its percentage interest in the Common Stock (rounded up to
the next whole number of directors). In the event that any director for
any reason ceases to serve as a member of the Board during his term of
office, the resulting vacancy on the Board shall be filled by the
Stockholders entitled to designate such director as provided in this
Section 5 and not by a vote of the Stockholders generally and, if the
Stockholders fail to designate a representative to fill a directorship
pursuant to the terms of this Section 5, such directorship shall remain
vacant until filed by the Stockholders entitled to designate such director.
(b) CONCURRENCE RIGHTS. The Company and the Stockholders agree that
the approval of a majority of the Fir Tree Directors shall be necessary for
the Company to undertake any of the following actions:
(i) any amendments to the Company's Certificate of Incorporation or
by-laws;
(ii) any contract or transaction between the Company or any
subsidiary of the Company and VSA or any Affiliate of VSA;
(iii) the Sale of the Company (other than an Approved Sale) or the
liquidation or dissolution of the Company;
(iv) any borrowing or transaction that would result in the
Company's pro forma ratio of indebtedness for borrowed money to the
Company's trailing 12-month pro forma EBITDA (in each case determined
on a consolidated basis in accordance with GAAP consistently applied)
to exceed 6.5;1.0;
(v) any change in the corporate structure of the Company or of its
subsidiaries; or
(vi) any management equity interests or [PERFORMANCE] compensation
that would result in management of the Company receiving greater than 10%
of proceeds from the Sale of the Company.
(C) TERMINATION. The provisions of this Section 5 shall terminate
and be of no further force and effect as of the date on which the
Stockholders cease to collectively own a majority of the then-outstanding
Common Stock.
SECTION 6. FORCED SALE RIGHTS. At any time on or after the fifth
anniversary of the date of this Agreement, Fir Tree shall have the right,
exercisable by written notice to the Company, to require that the Company
proceed with a Sale of the Company in accordance with the procedures set
forth in this Section 6. Upon receipt of such notice, the Company shall
promptly engage Veronis, Suhler & Associates, Inc. or an investment banking
firm of national standing that is mutually acceptable to VSA and Fir Tree
to conduct an orderly Sale of the Company as a going concern. The Company
shall exercise best efforts to assist such investment banking firm in
conducting such sale, including the preparation of an offering memorandum
and/or other descriptive materials and financial information regarding the
Company to be provided to interested parties and making management of the
Company available to meet with and make presentations to interested
parties. The Company shall not place any limitations on the scope of the
sales efforts of such investment banking firm. All Stockholders shall be
obligated to participate in a Sale of the Company effected pursuant to this
Section 6 that has been approved by the Company's Board of Directors. Any
such sale shall take place within five days after the date on which all
governmental approvals, if any, required in connection with such sale have
been obtained and all other conditions to closing have been satisfied.
Notwithstanding the provisions of Section 5 above, in the event that a
definitive agreement for the Sale of the Company is not concluded within 18
months after the date of the notice initiating the sale process, the
Stockholders agree to vote their Shares so that a simple majority of the
members of the Company's Board of Directors are designees of Fir Tree.
SECTION 7. RESTRICTIONS ON TRANSFER.
(A) STOCK LEGEND. The certificates representing Shares shall bear
the following legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ORIGINALLY
ISSUED ON _________________, 19___, HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR
UNDER ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD OR
TRANSFERRED IN THE ABSENCE OF ANY EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS OR
AN EXEMPTION FROM REGISTRATION THEREUNDER. THE SECURITIES
REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A VOTING AGREEMENT
AND CERTAIN OTHER RESTRICTIONS SET FORTH IN A STOCKHOLDERS
AGREEMENT DATED AS OF AUGUST _____, 1997 AMONG T/SF
COMMUNICATIONS CORPORATION AND CERTAIN STOCKHOLDERS THEREOF, A
COPY OF WHICH MAY BE OBTAINED WITHOUT CHARGE BY THE HOLDER HEREOF
AT THE COMPANY'S PRINCIPAL PLACE OF BUSINESS.
(B) OPINION OF COUNSEL. No holder of Shares may sell, transfer or
dispose of any such stock (other than pursuant to an effective registration
statement under the Securities Act) without first delivering to the Company
upon its request an opinion of counsel reasonably acceptable in form and
substance to the Company that registration under the Securities Act is not
required in connection with such transfer.
SECTION 8. TRANSFERS IN VIOLATION OF AGREEMENT. Any transfer or
attempted transfer of any Shares in violation of this Agreement shall be
void, and the Company shall not be obligated to record such transfer on its
books or treat any purported transferee of such Shares as the owner of such
shares for any purpose.
SECTION 9. AMENDMENT AND WAIVER. Except as otherwise provided
herein, no amendment or waiver of any provision of this Agreement shall be
effective unless such amendment or waiver is approved in writing by the
Company, the holders of at least a majority of the then-outstanding Sponsor
Stock and the holders of at least a majority of the then-outstanding
Investor Stock; provided, however, that any amendment or waiver that by its
terms affects all Stockholders equally and does not discriminate against
the holders of Investor Stock may be approved by the holders of a majority
of the Shares. Any amendment or waiver that is approved in accordance with
this Section 9 shall be binding upon all existing and future holders of
Shares. The failure of any party to enforce any provision of this
Agreement shall not be construed as a waiver of such provision and shall
not affect the right of such party thereafter to enforce each provision of
this Agreement in accordance with its terms.
SECTION 10. SEVERABILITY. If any provision of this Agreement is
held to be invalid, illegal or unenforceable in any respect under any
applicable law of rule in any jurisdiction, such invalidity, illegality or
unenforceability shall not affect any other provision or any other
jurisdiction, but this Agreement shall be reformed, construed and enforced
in such jurisdiction as if such invalid, illegal or unenforceable provision
had never been contained herein.
SECTION 11. ENTIRE AGREEMENT. Except as otherwise expressly set
forth herein, this document embodies the complete agreement and
understanding among the parties hereto with respect to the subject matter
hereof and supersedes and preempts any prior understandings, agreements or
representations by or among the parties, written or oral, which may have
related to the subject matter hereof in any way.
SECTION 12. SUCCESSORS AND ASSIGNS. This Agreement shall bind and
inure to the benefit of and be enforceable by the Company and its
successors and by the Stockholders and their respective successors and
transferees, in each case so long as such persons hold Shares. In the
event that the stock of any subsidiary of the Company is distributed to the
holders of Common Stock pursuant to a spin-off or split-off transaction,
the provisions of this Agreement shall apply to and be binding upon such
subsidiary and its stockholders.
SECTION 13. COUNTERPARTS. This Agreement may be executed in
separate counterparts each of which shall be an original and all of which
taken together shall constitute one and the same agreement.
SECTION 14. REMEDIES. The Company and the Stockholders shall be
entitled to enforce their rights under this Agreement specifically to
recover damages by reason of any breach of any provision of this Agreement
and to exercise all other rights existing in their favor. The parties
hereto agree and acknowledge that money damages may not be an adequate
remedy for any breach of the provisions of this Agreement and that the
Company or any Stockholder may in its sole discretion apply to any court of
law or equity of competent jurisdiction for specific performance and/or
injunctive relief (without posting a bond or other security) in order to
enforce or prevent any violation of the provisions of this Agreement. In
the event of any legal proceedings seeking to enforce any rights or
obligations under this Agreement, the prevailing party shall be entitled to
recover its attorneys fees and costs in connection with such proceeding
from the non-prevailing party.
SECTION 15. NOTICES. Any notice provided for in this Agreement
shall be in writing and shall be either personally delivered, or sent by
telecopy (confirmed in writing) or sent by reputable overnight courier
service for next-day delivery (charges prepaid) to the Company or the
Stockholders at their respective addresses set forth below and to any
subsequent holder of Shares subject to this Agreement at such address as
indicated by the Company's records, or at such address or to the attention
of such other person as the recipient party has specified by prior written
notice to the sending party. Notices will be deemed to have been given
hereunder when delivered personally, on the date of transmission if sent by
confirmed telecopy (or on the next business day if transmission is not made
on a business day) or on the next business day after deposit with a
reputable overnight courier service.
The Company's address is:
T/SF Communications Corporation
2407 East Skelly Drive
Tulsa, Oklahoma 74105
Attention: President
Telecopy No.: (918) 743-1291
VSA's address is:
Veronis, Suhler & Associates
350 Park Avenue
New York, New York 10022
Attention: Jeff Stevenson
Telecopy No.: (212) 935-0877
Fir Tree's address is:
Fir Tree Partners
1211 Avenue of the Americas
29th Floor
New York, New York 10036
Attention: Jeff Tannenbaum
Telecopy No.: (212) 575-5576
SECTION 16. GOVERNING LAW. The corporate law of Delaware shall
govern all issues concerning the relative rights of the Company and its
stockholders. All other questions concerning the construction, validity
and interpretation of this Agreement shall be governed by the internal law,
and not the law of conflicts, of New York.
SECTION 17. CERTAIN FEES. The Stockholders hereby agree as follows
with respect to certain fees:
(a) Any fees payable to VSA or any of its Affiliates in connection
with the acquisition of control of the Company by VSA (not to exceed 1.0%
of the value of the transaction) shall be shared by VSA and Fir Tree in the
ratio that VSA and Fir Tree, respectively, own shares of Common Stock
following the transaction.
(b) Fir Tree shall be entitled to 50% of its pro rata share (based on
the ratio that VSA and Fir Tree, respectively, own shares of Common Stock
following the acquisition of control by VSA) of any monitoring fees (not to
exceed $90,000 per year) and any advisory fees in connection with future
acquisitions and dispositions of assets from or to unaffiliated third
parties (not to exceed 1.0% of transaction value) payable to VSA or its
Affiliates by the Company or its subsidiaries subsequent to the acquisition
of control of the Company by VSA.
(c) VSA agrees that neither VSA nor any of its Affiliates may charge
any fees to the Company or its subsidiaries without Fir Tree's consent
except as set forth above.
SECTION 18. TERMINATION; SURVIVAL. This Agreement (other than
Section 2 hereof) shall terminate and be of no further force and effect
upon consummation of an underwritten public offering of Common Stock under
the Securities Act. This Agreement shall terminate in its entirety on the
tenth anniversary of the date hereof.
*****
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
T/SF COMMUNICATIONS CORP.
By:
---------------------------
Name:
---------------------------
Title:
-------------------------
VS&A COMMUNICATIONS PARTNERS
II. L.P.
By: /s/ Jeffrey Stevenson
----------------------------------
Name: Jeffrey Stevenson
Title: President and General Partner
FIR TREE VALUE FUND, L.P.
FIR TREE INSTITUTIONAL VALUE
FUND, L.P.
FIR TREE VALUE PARTNERS LDC
By: /s/ Jeffrey Tannenbaum
-------------------------------
Name: Jeffrey Tannenbaum
Title: General Partner
