EXHIBIT D
PREFERRED STOCK PURCHASE AGREEMENT
T/SF COMMUNICATIONS CORPORATION
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
July 1, 1997
TO: Tensing, L.L.C.
29th Floor
1211 Avenue of the Americas
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
The undersigned, T/SF Communications Corporation, a Delaware corporation
(the "Company"), hereby agrees with you as follows:
1. AUTHORIZATION AND SALE OF THE PREFERRED STOCK
1.1 Authorization. The Company represents and warrants to you and
covenants with you that the following will be duly and validly authorized on or
before the Closing Date (as defined below):
(a) the issuance and delivery, pursuant to the terms and conditions
hereof, of 150,000 shares of the Company's 9% Convertible Preferred Stock,
par value $10.00 per share (the "Preferred Stock"); and
(b) the issuance and delivery of those shares of the Company's Common
Stock, par value $0.10 per share ("Common Stock"), into which the Preferred
Stock is convertible.
1.2 Sale. Subject to the terms and conditions hereof, the Company will
issue and sell to you and you will purchase from the Company, the Preferred
Stock at an aggregate purchase price of $5,550,000 (the "Purchase Price").
2. CLOSING DATE; DELIVERY
2.1 Closing Date. The closing of the purchase and sale of the Preferred
Stock (the "Closing") shall be held at the place and on the date of the
acceptance of the tenders pursuant to the Tender Offer (as defined in Section
5.1(d) below) or at such other time and place as the Company and you may
mutually agree in writing (the "Closing Date"); provided, however, that,
if the Closing shall not have occurred on or before October 31, 1997, this
Agreement shall terminate on such date, unless such date is extended by mutual
written agreement of you and the Company.
2.2 Delivery. At the Closing, subject to the terms of this Agreement, the
Company will deliver to you or your representative certificates representing the
Preferred Stock against payment by you at the Closing of the Purchase Price by
wire transfer or certified check in accordance with the instructions of the
Company. The Company shall pay all transfer, issuance and other similar taxes,
if any, imposed by any governmental authority in respect of the issuance and
sale of the Preferred Stock contemplated by this Agreement.
3. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY
The Company hereby represents and warrants to you and covenants with you as
follows:
3.1 Organization and Standing. The Company is a corporation duly
organized and validly existing under, and by virtue of, the laws of the State of
Delaware and is in good standing under such laws. The Company has the requisite
corporate power to own and operate its properties and assets and to carry on its
business as presently conducted. The Company is qualified, licensed or
domesticated as a foreign corporation in all jurisdictions where the nature of
its business conducted or the character of its properties owned or leased makes
such qualification, licensing or domestication necessary at this time except in
those jurisdictions where the failure to be so qualified or licensed and in good
standing does not and will not have a materially adverse effect on the Company,
the conduct of its business or the ownership or operation of its properties.
3.2 Corporate Power. The Company has now, and will have at the Closing
Date, all requisite legal and corporate power to enter into this Agreement, to
issue the Preferred Stock hereunder, to issue the shares of Common Stock
issuable upon conversion of the Preferred Stock, and to carry out and perform
its obligations under this Agreement.
3.3 Authorization.
(a) All corporate action on the part of the Company necessary for the
sale and issuance of the Preferred Stock pursuant hereto and the
performance of the Company's obligations hereunder has been taken or will
be taken on or prior to the Closing Date. This Agreement has been duly
executed and delivered on behalf of the Company and constitutes a legal,
valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms, except as limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws of general
application affecting enforcement of creditors' rights.
(b) The Preferred Stock, when issued in accordance with the provisions
of this Agreement, will be validly issued, fully paid and nonassessable,
and will be free of any
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liens or encumbrances; provided, however, that the Preferred Stock will be
subject to restrictions on transfer under state and/or federal securities
laws (and as may be required by future changes in such laws) and will be
subject to the terms of the Stockholders Agreement entered into by the
Company, you and certain other stockholders of the Company
contemporaneously herewith (the "Stockholders Agreement").
(c) No stockholder of the Company or any other person has any right of
first refusal or any preemptive right in connection with the issuance of
the Preferred Stock hereunder or of any other capital stock of the Company,
except as set forth in the Stockholders Agreement.
3.4 No Conflicting Agreements. Neither the execution and delivery of this
Agreement by the Company nor the offering, issuance and sale of the Preferred
Stock hereunder, nor the fulfillment of or compliance with any of the terms or
provisions hereof will:
(a) conflict with, or result in a breach of the terms, conditions or
provisions of, or constitute a default under, or result in a violation of,
the Certificate of Incorporation or Bylaws of the Company or any agreement,
license or other instrument or obligation to which the Company is a party
or by which the Company or its assets are bound;
(b) result in the violation of any provision of any applicable law,
rule, regulation or ordinance or any order, decree, writ or injunction of
any court or administrative agency or governmental authority by which the
Company is bound; or
(c) result in the creation or imposition of any lien, charge,
restriction, security interest or encumbrance of any nature whatsoever upon
any of the assets or properties of the Company.
The Company is not subject to any agreement, mortgage, lease, license or other
instrument, or any judgment, order, decree, or authorization of any court or
governmental agency or authority, which could prevent or materially impair the
Company from carrying out this Agreement.
3.5 Consents. Except for the filing of the Certificate of Designation (as
defined in Section 5.1(b) below) and any filings which may be required under the
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), no consent from, or other approval of, or the making of any declaration
or filing with, any governmental entity or any other person is necessary in
connection with the execution, delivery or performance of this Agreement by the
Company. The Company will cause the Certificate of Designation to be filed with
the Secretary of State of the State of Delaware prior to the Closing.
3.6 Actions Pending. There is no action, proceeding or investigation
pending or (to the knowledge of the Company) threatened (or any basis in fact
therefor known to the Company)
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which questions the validity or legality of or seeks damages in connection with
this Agreement or any action taken or to be taken pursuant to this Agreement.
3.7 Disclosure. Neither the Company's annual report on Form 10-K for its
fiscal year ended December 31, 1996, as amended, nor the Company's quarterly
report on Form 10-Q for the quarter ended March 31, 1997, contained, as of its
respective date of filing, an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances in which they were made, not
misleading. No document filed by the Company with the Securities and Exchange
Commission between the date hereof and the Closing Date will contain, as of its
date of filing, an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances in which they were made, not misleading.
4. REPRESENTATIONS AND WARRANTIES OF PURCHASER AND RESTRICTIONS ON TRANSFER
IMPOSED BY THE SECURITIES LAWS
4.1 Representations and Warranties by Purchaser. You represent and
warrant to the Company as follows:
(a) You are experienced in evaluating and investing in companies such
as the Company and are capable of bearing the economic risks of an
investment in the Company. You and your "affiliates" (as defined in
Section 6.2 below) are experienced professional investment advisors and
have been stockholders of the Company since at least September 1995. As of
the date hereof, you and your affiliates own, in the aggregate, 487,506
shares of the Company's Common Stock.
(b) You have been furnished by the Company with all information
requested concerning the current and proposed operations, financial affairs
and business of the Company. You have had the opportunity to discuss the
Company's business, management and financial affairs with its officers and
have had the opportunity to review the Company's plan of operation to your
reasonable satisfaction. You understand that such discussions and any
other written information issued by the Company, were intended to describe
certain aspects of the Company's business and prospects which it believes
to be material but were not necessarily a thorough or exhaustive
description.
(c) You acknowledge that you have made your own independent
examination, investigation, analysis and evaluation of the Company,
including your own estimate of the value of the Company's business.
(d) You acknowledge that you have undertaken such due diligence
(including a review of the assets, liabilities, books, records and
contracts of the Company) as you deem adequate, including that described
above.
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(e) The Preferred Stock is being acquired by you for your own account,
for investment purposes only and not with a view to, or for resale in
connection with, any distribution or public offering thereof within the
meaning of the Securities Act of 1933, as amended (the "Securities Act").
(f) You understand that the Preferred Stock has not been registered
under the Securities Act by reason of its issuance in a transaction exempt
from the registration and prospectus delivery requirements of the
Securities Act and that the Preferred Stock must be held by you
indefinitely and you must therefore bear the economic risk of such
investment indefinitely, unless a subsequent disposition thereof is
registered under the Securities Act or is exempt from registration. You
understand that the Company is under no obligation to register the
Preferred Stock (or shares of Common Stock issuable upon conversion of the
Preferred Stock) under the Securities Act on your behalf or to assist you
in complying with any exemption from registration.
(g) You are an accredited investor as that term is defined in Rule
501(a) of Regulation D promulgated by the Securities and Exchange
Commission under the Securities Act.
(h) At the time of the Closing, the purchase and holding of the
Preferred Stock (and the Common Stock issuable upon conversion of the
Preferred Stock) will be legally permitted by all laws and regulations and
agreements to which you are subject except to the extent filings may be
required under the HSR Act.
(i) You have the full right, power and authority to enter into and
perform this Agreement, and this Agreement has been duly executed and
delivered on your behalf and constitutes a legal, valid and binding
obligation upon you except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws of general application affecting
enforcement of creditors' rights.
4.2 Legends. Each certificate representing the Preferred Stock (or the
Common Stock issuable upon conversion of the Preferred Stock) shall be endorsed
with a legend substantially in the following form:
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 OR ANY OTHER SECURITIES LAWS. THESE SECURITIES
HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD OR TRANSFERRED FOR
VALUE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION OF THEM UNDER THE
SECURITIES ACT OF 1933 AND ANY OTHER APPLICABLE SECURITIES LAWS, OR RECEIPT
BY THE CORPORATION OF AN OPINION OF COUNSEL OR OTHER EVIDENCE ACCEPTABLE TO
THE CORPORATION THAT SUCH SALE OR TRANSFER IS EXEMPT FROM REGISTRATION
UNDER SUCH ACTS.
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The Company need not register a transfer of such legended Preferred Stock (or
Common Stock), and may also instruct its transfer agent, if any, not to register
the transfer of such Preferred Stock (or Common Stock), unless the conditions
specified in the foregoing legend are satisfied.
5. CONDITIONS TO CLOSING
5.1 Conditions to Your Obligations. Your obligation to purchase the
Preferred Stock at the Closing is subject to the fulfillment to your reasonable
satisfaction on or prior to the Closing Date of the following conditions (any of
which may, at your discretion, be waived):
(a) The representations and warranties made by the Company in Section
3 hereof shall be true and correct when made, and shall be true and correct
on the Closing Date with the same force and effect as if they had been made
on and as of said date; and the Company shall have performed all
obligations and conditions herein required to be performed or observed by
it on or prior to the Closing Date.
(b) The Company shall have caused to be filed with the Secretary of
State of the State of Delaware a Certificate of Designation providing for
and designating the amount, relative rights, preferences, qualifications,
limitations and restrictions of the Preferred Stock, substantially in the
form of Exhibit A hereto (the "Certificate of Designation"). You shall
have received a copy of the Certificate of Designation, certified by the
Secretary of State of the State of Delaware, and a certificate of an
officer of the Company to the effect that the Certificate of Designation
has not been amended since the date of such certified copy and is in full
force and effect on the Closing Date.
(c) There shall be no action, suit, investigation or proceeding
pending or threatened against or affecting you or the Company, any of your
or the Company's respective properties or rights, or any of your or the
Company's respective affiliates, associates, officers or directors, before
any court, arbitrator or administrative or governmental body which (i)
seeks to restrain, enjoin or prevent the consummation of or otherwise
affect any of the transactions contemplated by this Agreement or the
Stockholders Agreement, or (ii) questions the validity or legality of any
such transactions or seeks to recover damages or to obtain other relief in
connection with any such transactions, and there shall be no valid basis
for any such action, proceeding or investigation.
(d) The applicable conditions to the proposed tender offer by the
Company to purchase for cash up to 2,050,000 shares of the Company's Common
Stock (the "Tender Offer") shall have been either fulfilled or waived and
the tenders received pursuant to the Tender Offer shall have been accepted
for no less than 1,700,000 shares of the Company's Common Stock (which
shares shall not include any shares held by ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇. or J.
▇▇▇▇ ▇▇▇▇▇▇▇ on the date hereof other than shares held for their benefit in
individual retirement accounts and the Company's Savings and Retirement
Plan).
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(e) There shall not have occurred or become known any material adverse
change with respect to the condition (financial or otherwise) or operations
of the Company since March 31, 1997, other than the transactions
contemplated in this Agreement.
5.2 Conditions to Obligation of the Company. The Company's obligation to
sell and issue the Preferred Stock to you at the Closing is subject to the
fulfillment to the Company's reasonable satisfaction on or prior to the Closing
Date of the following conditions (any of which may, at the Company's discretion,
be waived):
(a) The representations and warranties made by you in Section 4 hereof
shall be true and correct when made, and shall be true and correct on the
Closing Date with the same force and effect as if they had been made on and
as of said date.
(b) The applicable conditions to the Tender Offer shall have been
either fulfilled or waived and the tenders received pursuant to the Tender
Offer shall have been accepted for no less than 1,700,000 shares of the
Company's Common Stock.
(c) There shall be no action, suit, investigation or proceeding
pending or threatened against or affecting the Company, any of its
properties or rights, or any of its affiliates, associates, officers or
directors, before any court, arbitrator or administrative or governmental
body which (i) seeks to restrain, enjoin or prevent the consummation of or
otherwise affect any of the transactions contemplated by this Agreement or
the Stockholders Agreement, or (ii) questions the validity or legality of
any such transactions or seeks to recover damages or to obtain other relief
in connection with any such transactions, and there shall be no valid basis
for any such action, proceeding or investigation.
(d) No Change in Control Event (as defined in Section 7.2 below) shall
have occurred; provided, however, that this condition shall be deemed to
have been satisfied if the condition set forth in Section 5.2(b) shall have
been fulfilled.
(e) The Company shall not have become aware of any facts that are or
may be materially adverse with respect to the value of the Company which,
due to the fiduciary obligations of the Company's Board of Directors or
otherwise, the Company's Board of Directors determines that the
transactions contemplated by this Agreement are not in the best interests
of the Company's stockholders; provided, however, that this condition shall
be deemed to have been satisfied if the condition set forth in Section
5.2(b) shall have been fulfilled.
6. CONFIDENTIALITY; STANDSTILL
6.1 Confidentiality. From and after the date of this Agreement and until
the earlier of the Closing Date or the termination of this Agreement, you will,
and will cause each of your
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affiliates (as defined in Section 6.2 below), employees, agents and
representatives, to keep confidential and not publicly disclose to any third
party (other than your affiliates, employees, agents and representatives), any
information relating to the business, properties and affairs of the Company,
including without limitation the existence of the proposed Tender Offer unless
(a) you receive the prior written consent of the Company, (b) such information
becomes publicly known through other means, or (c) you are required by law to
disclose such information. You and the Company agree to fully cooperate in all
reasonable respects with respect to any Schedule 13D filings under the Exchange
Act and any amendment thereto, which may be necessary as a result of the
transactions contemplated by this Agreement or the Stockholders Agreement and to
coordinate any such filings.
6.2 Standstill. Until the earlier of the consummation of the Tender Offer
or the termination of this Agreement, you and your "affiliates" (as defined in
Rule 12b-2 of the Exchange Act) will not, without the prior written consent of
the Company, other than pursuant to this Agreement:
(a) purchase or otherwise acquire, offer to acquire or agree to
acquire, whether by transactions over any securities exchange or any
national or other quotation systems, by any other over-the-counter
transaction, by private transactions with third parties, by tender offer or
by any other means, directly or indirectly, any securities of the Company,
or any direct or indirect rights or options to acquire any such securities
or any securities convertible into such securities (collectively,
"Securities");
(b) make, or in any way participate in, directly or indirectly, any
"solicitation" of "proxies" to vote (as such terms are defined in the
Exchange Act), solicit any consent or communicate with or seek to advise or
influence any person or entity with respect to the voting of, any
Securities or become a "participant" in any "election contest" (as such
terms are defined or used in Rule 14a-11 under the Exchange Act);
(c) form, join or in any way participate pursuant to any agreement,
understanding or other arrangement, whether written or oral, in a "group"
(within the meaning of Section 13(d)(3) of the Exchange Act) with respect
to any Securities;
(d) deposit any Securities into a voting trust or subject any
Securities to any arrangement or agreement with respect to the voting
thereof;
(e) initiate, propose or otherwise solicit stockholders for the
approval of one or more proposals with respect to the Company as described
in Rule 14a-8 under the Exchange Act;
(f) otherwise act, alone or in concert with others, to seek to control
or influence in any manner the management, the Board of Directors or the
policies of the Company;
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(g) solicit, seek to effect, negotiate with or provide any information
to any third party with respect to, or make any statement or proposal,
whether written or oral, to the Board of Directors of the Company or any
director or officer of the Company or otherwise make any public
announcement or proposal whatsoever with respect to any form of merger,
business combination or other similar transaction with or involving the
Company; or
(h) instigate or encourage any other person to do any of the
foregoing.
6.3 Additional Parties. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇▇▇▇") and Fir Tree,
Inc. d/b/a Fir Tree Partners have joined in the execution of this Agreement to
evidence their agreement to be bound by the terms and provisions of this Article
6 and Article 7 below. As used in this Article 6 and Article 7 below, the terms
"you" and "your" shall be deemed to include such parties.
7. FINANCING; TERMINATION
7.1 Financing. Until July 31, 1997, the Company and you shall each use
commercially reasonable efforts to obtain a mutually acceptable term sheet from
a mutually acceptable financial institution (or group of financial institutions)
with respect to such financing as the Company, in its sole discretion, deems is
necessary in connection with the Tender Offer. If such a term sheet is obtained
on or before such date, the Company agrees to pursue the financing contemplated
by such term sheet and the following provisions of this Section 7.1 shall no
longer be applicable. If such a term sheet is not so obtained and if the
Company has not abandoned the Tender Offer, the Company may, but shall be under
no obligation to, prepare a list of parameters for a high yield debt offering to
be conducted by the Company with the assistance of Prudential Securities
Incorporated, the proceeds of which would be used to finance the Tender Offer.
If the Company prepares such a list of parameters on or before August 8, 1997,
and if you accept the same, the Company agrees to pursue the financing
contemplated by such list of parameters. You may, by notice to the Company,
terminate this Agreement in the event (a) an acceptable list of parameters for
such high yield debt offering has not been presented to you on or before such
date (whether or not the Company elected to prepare such a list of parameters)
or (b) such offering cannot be consummated on terms which are substantially
similar to (or more favorable from the Company's perspective than) those set
forth in the list of parameters that you accepted. The Company may, by notice
to you, terminate this Agreement in the event (x) you have not accepted a list
of parameters for such high yield debt offering by such date, (y) such offering
cannot be consummated on terms which are substantially similar to (or more
favorable from the Company's perspective than) those set forth in the list of
parameters that you accepted, or (z) the Company decides not to pursue such high
yield debt financing.
7.2 Change in Control. Either the Company or you upon notice to the
other, may terminate this Agreement in the event a Change in Control Event
occurs. As used in this Agreement, the term "Change in Control Event" shall
mean any tender or exchange offer for all or any portion of the Company's
outstanding Common Stock shall have been proposed, announced or made by another
person, a merger, business combination or other similar
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transaction with or involving the Company shall have been proposed, announced or
made by another person, or the Company shall have learned that any person,
entity or "group," as defined in Section 13(d)(3) of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), excluding the parties to the
Stockholders Agreement, has acquired or proposed to acquire more than 15% of the
Common Stock of the Company, other than acquisitions of shares for bona fide
arbitrage positions. The Company will promptly provide you with notice of any
proposal received by an executive officer of the Company which may result in a
Change in Control Event, and, in any event, the Company will provide you with
notice of any written proposal with respect to a Change in Control Event within
24 hours of the Company's receipt of the same.
7.3 Abandonment of Tender Offer. This Agreement shall terminate if the
Company has publicly announced the abandonment of the Tender Offer (or abandoned
the Tender Offer in the event that no public announcement of the Tender Offer
has been made).
7.4 Amendment to Form 13D. Upon any termination of this Agreement, if you
or any of your affiliates believes, after consultation with competent counsel,
that any Schedule 13D filed under the Exchange Act must be amended, you agree to
cause such amendment to be provided to the Company no later than 24 hours prior
to its filing with the Securities and Exchange Commission. This Section 7.4
shall survive for 30 days after any termination of this Agreement.
7.5 Effect of Termination. If this Agreement is terminated pursuant to
and in accordance with any of the provisions of this Agreement, this Agreement
shall become void and have no effect, without any liability on the part of any
party hereto (or its stockholders, directors or officers), provided that nothing
herein shall relieve any party from liability for its breach of this Agreement.
7.6 Employment Agreements. Until July 31, 1997, the Company and you shall
each attempt to agree upon the terms and conditions of employment agreements to
be entered into between the Company and certain members of its key management.
The Company may, by notice to you, terminate this Agreement in the event you and
the Company have not agreed upon such terms and conditions by such date; and you
may, by notice to the Company, terminate this Agreement in the event the Board
of Directors of the Company, despite your objections, approves by such date the
terms and conditions of such employment agreements which are unacceptable to
you.
8. MISCELLANEOUS
8.1 Waivers and Amendments. This Agreement or any provision hereof may be
changed, waived, discharged or terminated only by a statement in writing signed
by the party against which enforcement of the change, waiver, discharge or
termination is sought.
8.2 Governing Law. This Agreement shall be governed in all respects by
the laws of the State of Delaware without regard to principles of conflicts of
laws.
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8.3 Choice of Forum; Consent to Service of Process. Any suit, action or
proceeding arising out of or relating to this Agreement or any agreement or
obligation delivered in connection with this Agreement or any judgment entered
by any court in respect thereof may be brought in the courts of the State of
Oklahoma, County of Tulsa, in the United States District Court for the Northern
District of Oklahoma, in the courts of the State of New York, County of New
York, or in the United States District Court for the Southern District of New
York, and each party hereto hereby submits to the jurisdiction of such courts
for the purpose of any such suit, action or proceeding relating to this
Agreement or any related agreement or obligation.
Each party hereto hereby irrevocably waives any objection that it may now
or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement or any agreement or obligation
delivered in connection with this Agreement, brought in the courts of the State
of Oklahoma, County of Tulsa, in the United States District Court for the
Northern District of Oklahoma, in the courts of the State of New York, County of
New York, or in the United States District Court for the Southern District of
New York, and hereby further irrevocably waives any claim that any such suit,
action or proceeding brought in any such court has been brought in an
inconvenient forum.
8.4 Successors and Assigns. Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors and administrators of the
parties hereto; provided, however, neither you nor the Company may assign any
rights or obligations hereunder without the consent of the other, except that
you may assign the right to purchase all or any portion of the Preferred Stock
to one or more affiliates of Fir Tree, Inc. who agree to be bound by the
Stockholders Agreement and by the representations, warranties and covenants in
this Agreement.
8.5 Entire Agreement. This Agreement and the other documents delivered
pursuant hereto constitute the full and entire understanding and agreement
between the parties hereto with regard to the subject hereof and thereof and
supersedes all prior arrangements and understandings with respect thereto.
8.6 Representation Disclaimer. The Company shall not be deemed to have
made to you any representation or warranty other than as expressly made by the
Company in this Agreement. Without limiting the generality of the foregoing,
and notwithstanding any otherwise express representations and warranties made by
the Company in Section 3 hereof, the Company makes no representation or warranty
to you with respect to:
(a) any projections, estimates or budgets heretofore delivered to or
made available to you with respect to future revenues, expenses or
expenditures or future results of operations of the Company and/or its
subsidiaries; or
(b) except as expressly covered by a representation and warranty
contained in Section 3 hereof, any other information or documents
(financial or otherwise) made available to you or your counsel, accountants
or advisers with respect to the Company.
8.7 Notices. All notices and other communications required or permitted
to be given hereunder shall be in writing and shall be deemed to have been
delivered on the date delivered
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by hand, telegram, facsimile or by similar means, on the next day following the
day when sent by recognized courier or overnight delivery service (fees
prepaid), or on the third day following the day when deposited in the U.S. mail,
registered or certified (postage prepaid), addressed: (a) if to you, at your
address set forth above, or at such other address as you shall have furnished to
the Company in writing in accordance with this Section 8.7, or (b) if to the
Company, at its address set forth above, or at such other address as the Company
shall have furnished to you in writing in accordance with this Section 8.7.
8.8 Severability. In case any provision of this Agreement not material to
the benefits intended to be conferred hereby shall be invalid, illegal, or
unenforceable, the validity, legality, and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
8.9 Finder's Fees. Each of the Company and each of you (a) represents and
warrants to the other that no finder or broker has been retained by it or you in
connection with the transactions contemplated by this Agreement and (b) hereby
agrees to indemnify and to hold the other, and its respective officers,
directors and controlling persons, harmless from and against any liability for
any commission or compensation in the nature of a finder's fee to any broker or
other person or firm (and the costs and expenses of defending against such
liability or asserted liability) for which it, or any of its employees or
representatives, are responsible.
8.10 Survival of Representations and Warranties. All representations and
warranties contained herein shall survive the execution and delivery of this
Agreement and the issuance of the Preferred Stock, regardless of any
investigation made by any party hereto.
8.11 Payment of Expenses. Except as set forth in Section 2.2 above and
this Section 8.11, each party hereto shall pay its own expenses incident to
preparing for, entering into and carrying out this Agreement and the
consummation of the transactions contemplated hereby. The Company hereby agrees
to reimburse ▇▇▇▇▇▇▇▇▇▇ and his affiliates for reasonable out-of-pocket costs
incurred in connection with the transactions contemplated hereby, including
without limitation travel costs and reasonable attorneys' and accountants' fees
and expenses, within 10 days after the Company's receipt of a statement with
respect to such costs and appropriate supporting documentation. This Section
8.11 shall survive any termination of this Agreement.
8.12 Other Documents. The parties to this Agreement shall in good faith
execute such other and further instruments, assignments or documents as may be
necessary or advisable to carry out the transactions contemplated by this
Agreement.
8.13 Titles and Subtitles. The titles of the Sections of this Agreement
are for convenience of reference only and are not to be considered in construing
this Agreement. References herein to Exhibits to this Agreement shall be deemed
to incorporate such Exhibits by reference.
8.14 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one and the same instrument.
8.15 HSR Act. Each of the parties hereto shall use all reasonable efforts
to take, or cause to be taken, any appropriate action under the HSR Act with
respect to the transactions
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contemplated hereby and the conversion of the Preferred Stock, including without
limitation promptly making their respective filings, if any, which are required
under the HSR Act.
If you are in agreement with the foregoing, please sign the form of
acceptance in the enclosed counterpart of this letter and return the same to the
Company, whereupon this letter shall become a binding agreement between you and
the Company.
T/SF COMMUNICATIONS CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
Chairman, President and Chief Executive Officer
The foregoing Agreement is hereby accepted as of the date first above
written.
TENSING, L.L.C.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
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Title: Member
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FIR TREE, INC. d/b/a Fir Tree Partners
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
-----------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
President
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
--------------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
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EXHIBIT A
T/SF COMMUNICATIONS CORPORATION
Certificate of Designation of
Preferences and Rights of Preferred Stock
By Resolution of the Board of Directors
Providing for an Issue of 150,000 Shares
of 9% Convertible Preferred Stock
The undersigned, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇., the Chairman, President and Chief
Executive Officer of T/SF Communications Corporation, a corporation organized
and existing under the General Corporation Law of the State of Delaware (the
"Corporation"), in accordance with Section 151 thereof, does hereby certify
that:
FIRST, pursuant to authority conferred upon the Board of Directors of the
Corporation by the Certificate of Incorporation of the Corporation, the
following preambles and resolution were duly adopted by the Board of Directors
of the Corporation at a meeting thereof duly and validly held on June 30, 1997:
WHEREAS, the Certificate of Incorporation of the Corporation (the
"Certificate") was filed with the Secretary of State of the State of
Delaware on March 17, 1989, and has not been amended; and
WHEREAS, the Certificate provides for a class of shares of stock
designated "Preferred Stock" and authorizes the Board of Directors of the
Corporation (the "Board of Directors") to establish one or more series of
Preferred Stock and to fix and determine the relative rights and
preferences of the shares of Preferred Stock or any series thereof so
established; and
WHEREAS, no series of Preferred Stock has heretofore been designated;
and
WHEREAS, it is the desire of the Board of Directors, pursuant to its
authority as aforesaid, to establish a series of Preferred Stock and to fix
and determine the relative rights and preferences thereof;
NOW, THEREFORE, BE IT RESOLVED, that a series of Preferred Stock of
the Corporation be, and it hereby is, designated "9% Convertible Preferred
Stock," that the number constituting such series is one hundred fifty
thousand (150,000) shares, and that the rights, preferences, limitations,
and restrictions of the 9% Convertible Preferred Stock, shall be as
follows:
-1-
1. Dividends.
---------
(a) Each share of 9% Convertible Preferred Stock shall entitle
the holder of record thereof to receive cumulative cash dividends at
the annual rate of $3.33 per share. Dividends shall accrue daily and
accrued dividends for any period of less than one year shall be
computed on the basis of the number of days elapsed out of a 365-day
or 366-day year, as the case may be. Dividends shall be payable each
year on the last day of June (the "Dividend Payment Date") in the
amount accrued to such Dividend Payment Date; provided, however, that
dividends shall be required to be paid only (i) to the extent the
Corporation may lawfully do so and (ii) if the Board of Directors has
determined, in its sole discretion, that dividends should be paid by
the Corporation; and provided further, if the Corporation may not
lawfully pay all the dividends it is required to pay under this
Section 1(a) on any Dividend Payment Date, it shall pay on such date
all the dividends it may lawfully pay ratably among the holders of 9%
Convertible Preferred Stock and, at the earliest time or times
thereafter when it may lawfully pay any or all of the balance of such
dividends, it shall do so. If the Corporation does not pay dividends
on any Dividend Payment Date because the Board of Directors has not
approved such payment, it shall pay such dividends at a later time
when it may lawfully do so and following approval of such payment by
the Board of Directors. Dividends on each share of 9% Convertible
Preferred Stock shall commence to accrue and shall be cumulative from
expiration of the Conversion Period (as defined in Section 4 below),
whether or not they are earned, declared, or lawfully payable. If any
dividend which is required to be paid on any Dividend Payment Date is
not paid for any reason, such unpaid dividend shall not bear any
interest.
(b) Once the dividends provided for in Section 1(a) above have
been paid, each share of Common Stock and 9% Convertible Preferred
Stock shall entitle the holder of record thereof to receive dividends
at the rate to be determined by the Board of Directors, out of funds
legally available therefor, when and as declared by the Board of
Directors with respect to such classes of stock; provided, however,
that no dividend or other distribution shall be declared or paid on
shares of Common Stock unless an equivalent dividend or distribution
on the outstanding shares of 9% Convertible Preferred Stock shall have
been paid or declared and a sum sufficient for the payment thereof set
apart. For purposes of the declaration or payment of dividends or
other distributions, a dividend or distribution on shares of 9%
Convertible Preferred Stock shall be deemed "equivalent" to a dividend
or distribution on shares of Common Stock if the dividend or
distribution declared or paid on each outstanding share of 9%
Convertible Preferred Stock entitles the holder thereof to the same
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money or other property to which the holder would have been entitled
if the holder held the number of shares of Common Stock into which
such share of 9% Convertible Preferred Stock is then convertible or,
if the Conversion Period is not then in effect, would have been
convertible if the Conversion Period was then in effect.
2. Liquidation. Upon any voluntary or involuntary liquidation,
-----------
dissolution or winding up of the Corporation, each holder of record of
shares of 9% Convertible Preferred Stock shall be entitled, before any
distribution is made on shares of Common Stock, to be paid Thirty-Seven
Dollars ($37.00) per share of 9% Convertible Preferred Stock held by such
holder, plus an amount equal to all accrued and unpaid dividends on each
such share through the date fixed for distribution. This Section 2 shall
not be deemed to require the distribution of assets to the holders of 9%
Convertible Preferred Stock in the event of a merger, consolidation, sale,
transfer or lease of all or substantially all of the Corporation's assets
if such transaction does not in fact result in the dissolution, liquidation
or winding up of the Corporation.
3. Voting. Until the expiration of the Conversion Period, the 9%
------
convertible Preferred Stock shall vote with the Common Stock on an as-
converted basis. Thereafter, except as set forth in this Section 3 or as
otherwise required by law, a share of 9% Convertible Preferred Stock shall
not entitle the holder thereof to vote on any matter brought before the
stockholders of the Corporation for a vote. The holders of the 9%
Convertible Preferred Stock shall be entitled to vote as a class upon any
proposed amendment to the Certificate or this Certificate of Designation
with respect to the shares of 9% Convertible Preferred Stock, if such
amendment would alter or change the powers, preferences or special rights
of the shares of 9% Convertible Preferred Stock so as to affect them
adversely.
4. Conversion. During the 30-day period commencing on the 90th day
----------
after the issuance of a share of 9% Convertible Preferred Stock (the
"Conversion Period"), such share of 9% Convertible Preferred Stock shall be
convertible at the option of the holder of record thereof into a number of
shares of Common Stock equal to the Conversion Ratio (as hereinafter
defined); provided, that no fractional share of Common Stock shall be
issued, but in lieu thereof one share of Common Stock shall be issued. The
Conversion Period shall be extended until the fifth day after the
expiration or termination of any waiting period under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇
Antitrust Improvements Act of 1976, as amended, which is applicable to such
conversion, so long as any filing which is required to be made by the
holder under such Act is made on or before the commencement of the
Conversion Period. Conversion of such share of 9% Convertible Preferred
Stock shall be effected by surrender of such holder's certificate
representing such share of 9% Convertible Preferred Stock
-3-
accompanied by a written notice from such holder addressed to the
Corporation requesting the conversion. Upon conversion, holders of
converted shares of 9% Convertible Preferred Stock will be issued
certificates representing the shares of Common Stock to which they are
entitled. The "Conversion Ratio" at the effective date of the original
Certificate of Designation with respect to the shares of 9% Convertible
Preferred Stock shall equal one (1.0). Thereafter, upon any stock split,
stock dividend, subdivision or combination of shares of Common Stock (an
"Adjustment Event"), the Conversion Ratio shall be adjusted such that
immediately upon the occurrence of such Adjustment Event the holder of a
share of 9% Convertible Preferred Stock shall be entitled to convert
(assuming, if the Conversion Period is not then in effect, that the
Conversion Period was then in effect) such share of 9% Convertible
Preferred Stock into the number of shares of Common Stock which such holder
would have been entitled to receive if such holder had converted such share
of 9% Convertible Preferred Stock into Common Stock immediately prior to
such Adjustment Event. Any adjustment of the Conversion Ratio shall be
effective as of the record date for the Adjustment Event giving rise to the
adjustment.
5. Redemption. At any time after the first anniversary date of the
----------
issuance of a share of 9% Convertible Preferred Stock, the Corporation may,
in its sole discretion, redeem such share of 9% Convertible Preferred Stock
by paying the holder of record thereof Thirty-Seven Dollars ($37.00) for
such share of 9% Convertible Preferred Stock, plus an amount equal to all
accrued and unpaid dividends on such share through the date of such
redemption.
SECOND, that this Certificate of Designation of Preferences and Rights of
9% Convertible Preferred Stock shall become effective upon its being filed with
the Secretary of State of the State of Delaware.
IN WITNESS WHEREOF, T/SF Communications Corporation has caused this
Certificate of Designation of Preferences and Rights of 9% Convertible Preferred
Stock to be signed by ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇., as Chairman, President and Chief
Executive Officer, as of the ______ day of ___________________, 1997.
T/SF COMMUNICATIONS CORPORATION
By:
---------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
Chairman, President and Chief
Executive Officer
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