UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 5)*
Diligent Corporation
(Name of Issuer)
Common Stock
(Title of Class of Securities)
Q3191S103
(CUSIP Number)
Gary Purwin
West Broadway Advisors, L.L.C.
488 Madison Avenue, 21st Floor
New York, NY 10022
212-832-1110
with a copy to:
Daniel T. Mongan, Esq.
Leech Tishman Fuscaldo & Lampl, LLP
545 Fifth Avenue, Suite 640
New York, NY 10017
212-986-1111
(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)
February 12, 2016
(Date of Event Which Requires Filing of This Statement)
If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box ¨.
Note: Schedules filed in paper format shall include a signed original and five copies of the Schedule, including all exhibits. See Rule 13d-7(b) for other parties to whom copies are to be sent.
| * | The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. |
The information required on 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 (the “Exchange Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).
SCHEDULE 13D
| CUSIP No. Q3191S103 | Page 2 of 9 Pages |
| 1 | NAME AND IRS IDENTIFICATION NUMBER OF REPORTING PERSON
Spring Street Partners, L.P. 13-3842463 | |||||
| 2 | Check the appropriate box if a member of a group (a) ¨ (b) ¨
| |||||
| 3 | SEC use only
| |||||
| 4 | Source of funds
Not applicable | |||||
| 5 | Check box if disclosure of legal proceedings is required pursuant to Items 2(d) or 2(e) ¨
| |||||
| 6 | Citizenship or place of organization
Illinois | |||||
Number of shares beneficially owned by each reporting person with
| 7 | Sole voting power
25,896,973 * | ||||
| 8 | Shared voting power
-0- | |||||
| 9 | Sole dispositive power
25,896,973 * | |||||
| 10 | Shared dispositive power
-0- | |||||
| 11 | Aggregate amount beneficially owned by each reporting person
25,896,973 * | |||||
| 12 | Check box if the aggregate amount in Row (11) excludes certain shares ¨
| |||||
| 13 | Percent of class represented by amount in Row (11)
22.04% | |||||
| 14 | Type of reporting person
PN | |||||
| * | See Items 3, 4 and 5. |
SCHEDULE 13D
| CUSIP No. Q3191S103 | Page 3 of 9 Pages |
| 1 | NAME AND IRS IDENTIFICATION NUMBER OF REPORTING PERSON
West Broadway Advisors, L.L.C. 13-3995264 | |||||
| 2 | Check the appropriate box if a member of a group (a) ¨ (b) ¨
| |||||
| 3 | SEC use only
| |||||
| 4 | Source of funds
N/A | |||||
| 5 | Check box if disclosure of legal proceedings is required pursuant to Items 2(d) or 2(e) ¨
| |||||
| 6 | Citizenship or place of organization
Delaware | |||||
Number of shares beneficially owned by each reporting person with
| 7 | Sole voting power
-0- | ||||
| 8 | Shared voting power
25,896,973 * | |||||
| 9 | Sole dispositive power
0- | |||||
| 10 | Shared dispositive power
25,896,973 * | |||||
| 11 | Aggregate amount beneficially owned by each reporting person
25,896,973 * | |||||
| 12 | Check box if the aggregate amount in Row (11) excludes certain shares ¨
| |||||
| 13 | Percent of class represented by amount in Row (11)
22.04 % | |||||
| 14 | Type of reporting person
OO | |||||
| * | See Items 3, 4 and 5. |
SCHEDULE 13D
| CUSIP No. Q3191S103 | Page 4 of 9 Pages |
| 1 | Name of reporting person
David J. Liptak | |||||
| 2 | Check the appropriate box if a member of a group (a) ¨ (b) ¨
| |||||
| 3 | SEC use only
| |||||
| 4 | Source of funds
N/A | |||||
| 5 | Check box if disclosure of legal proceedings is required pursuant to Items 2(d) or 2(e) ¨
| |||||
| 6 | Citizenship or place of organization
United States | |||||
Number of shares beneficially owned by each reporting person with
| 7 | Sole voting power
-0- | ||||
| 8 | Shared voting power
25,896,973 * | |||||
| 9 | Sole dispositive power
-0- | |||||
| 10 | Shared dispositive power
25,896,973 * | |||||
| 11 | Aggregate amount beneficially owned by each reporting person
25,896,973 * | |||||
| 12 | Check box if the aggregate amount in Row (11) excludes certain shares ¨
| |||||
| 13 | Percent of class represented by amount in Row (11)
22.04 % | |||||
| 14 | Type of reporting person
IN | |||||
| * | See Items 3, 4 and 5. |
SCHEDULE 13D
| CUSIP No. Q3191S103 | Page 5 of 9 Pages |
Introduction.
This Amendment No. 5 to Schedule 13D (“Amendment No. 5 to Schedule 13D”) amends and restates the Schedule 13D originally filed on March 23, 2009, as subsequently amended (“Schedule 13D”) by the Reporting Persons (as defined in Item 2 below), relating to their beneficial ownership of the common stock, par value $0.001 per share (the “Common Stock”) of Diligent Corporation, a Delaware Corporation, formerly known as Diligent Board Member Services, Inc., a Delaware corporation (the “Issuer”).
This Amendment No. 5 to Schedule 13D (i) reflects the identities of reporting persons described in Item 2 below, (ii) reflects the transactions described in Item 5 below and (ii) amends and restates Item 2, Item 5, and Item 7. Except for the above-referenced amendments, this Amendment No. 4 to Schedule 13D does not modify any of the information previously reported on the Schedule 13D.
| Item 1. | Security and Issuer. |
This Schedule 13D relates to the Common Stock of Diligent Corporation, a Delaware corporation (the “Issuer”). The address of the principal executive office of the Issuer is 1385 Broadway 19th Floor, New York, New York 10018.
| Item 2. | Identity and Background. |
(a), (f) This Amendment No. 5 to Schedule 13D is being filed jointly by: (1) Spring Street Partners, L.P., a limited partnership organized under the Illinois Revised Uniform Limited Partnership Act of 1986 (“Spring Street”), (ii) West Broadway Advisors, L.L.C., a limited liability company formed under the Delaware Limited Liability Act and (iii) David J. Liptak, a citizen of the United States (each individually, a “Reporting Person” or collectively, the “Reporting Persons”). Mr. Liptak is the sole manager and member of West Broadway Advisors, L.L.C.
The Reporting Persons are making this single, joint filing because they may be deemed to constitute a “group” within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934 (the “Exchange Act”). Each Reporting Person disclaims beneficial ownership of all shares of Common Stock to which such Reporting Person does not have a pecuniary interest. The agreement among the Reporting Persons to file this Amendment No. 5 to Schedule 13D jointly in accordance with Rule 13d-1(k) under the Exchange Act is attached hereto as Exhibit 99.1.
(b)The address of each Reporting Person is 488 Madison Avenue, 21st Floor, New York, NY 10022.
(c)Spring Street is an investment partnership and is registered with the Securities and Exchange Commission (the “SEC”) as a broker/dealer. West Broadway Advisors, L.L.C. is the sole general partner of Spring Street. David J. Liptak is the manager and sole member of West Broadway Advisors, L.L.C.
(d)During the past five years, none of the Reporting Persons have been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors).
(e)During the past five years, none of the Reporting Persons have been a party to any civil proceeding of a judicial or administrative body of competent jurisdiction as a result of which it or he was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws, or finding any violation with respect to such laws.
| Item 3. | Source and Amount of Funds or Other Consideration. |
On February 17, 2009, Spring Street purchased 2,500,000 shares of Common Stock from Services Share Holding LLC (“Services Share Holding”) for a total purchase price of $607,910.00. On September 25, 2009, Spring Street purchased from Services Share Holding 620,140 shares of Common Stock for a total purchase price of $89,523.38. On March 30, 2009, Spring Street purchased from Services Share Holding LLC 2,387,263 shares of Common Stock for a total purchase price of $179,044.76.
As more fully described in Item 4 below, on March 11, 2009, Spring Street purchased from the Issuer 20,000,000 shares of Series A Preferred Stock of the Issuer (the “Preferred Stock”), pursuant to a Stock Purchase Agreement dated February 13, 2009 (the “Purchase Agreement”). The total amount of funds used to acquire the Purchased Preferred Stock was $2,000,000.00.
The funds used to acquire the Common Stock and the Preferred Stock were obtained from the investment capital of Spring Street, all of which was derived from capital contributions by the limited partners of Spring Street.
As stated below, the holders of the Issuer’s Series A Preferred Stock have the right to receive dividends annually at the rate of 11%, and such dividends may be payable, at the option of the Issuer, as in-kind dividends of additional shares of Series A Preferred Stock. On January 4, 2010, the Issuer paid in-kind dividends to Spring Street consisting of 1,777,904 shares of Series A Preferred Stock (the “PIK Dividends”). No funds were used in connection with the acquisition of PIK Dividends.
SCHEDULE 13D
| CUSIP No. Q3191S103 | Page 6 of 9 Pages |
On March 5, 2014, Spring Street converted 1,777,905 shares of Preferred Stock into shares of Common Stock at no additional cost in accordance with the terms thereof.
On April 19, 2014, Spring Street sold a total of 53,334 shares of Common Stock in two private transactions to Messrs. Greg Peterson and A. Laurence Jones for a total consideration of $200,002.50.
On February 12, 2016 the Issuer entered into a Merger Agreement among the Issuer and certain affiliates of Insight Venture Partners (the “Merger Agreement”). In connection with the Merger Agreement, Spring Street and certain of its affiliates entered into a Voting Agreement dated as of February 12, 2016 (the “Voting Agreement”) with an affiliate of Insight Venture Partners pursuant to which Spring Street and certain of its affiliates agreed to cause, subject to the terms and conditions of the Voting Agreement, the shares of Common Stock and Preferred Stock owned of record by Spring Street to be voted in favor of the transactions contemplated by the Merger Agreement.
| Item 4. | Purpose of Transaction. |
Spring Street consummated the purchase of Common Stock and Preferred Stock for investment purposes. The Purchased Preferred Stock represents two-thirds of the outstanding Series A Preferred Stock of the Issuer. The Purchased Preferred Stock is convertible into Common Stock at the option of Spring Street at any time without consideration, initially on a one-to-one basis. Shares of the Common Stock are registered with the SEC pursuant to Section 12(g) of the Securities Exchange Act of 1934 (the “Exchange Act”).
The Issuer’s Certificate of Incorporation, as amended (the “Certificate of Incorporation”) designates the rights and privileges of the Common Stock and the Preferred Stock. Among other things, the Preferred Stock has liquidation, and other rights senior to those of the Common Stock. For example, the Issuer is restricted in the payment of dividends as noted below. The Issuer may not take certain actions without obtaining the consent of the holders of 60% of the outstanding shares of Preferred Stock. Generally, subject to certain exceptions, such actions include: (i) liquidating the Issuer, (ii) creating a class of stock or issuing shares of stock senior to the Preferred Stock, (iii) redeeming any shares of capital stock of the Issuer or declaring or paying dividends on any shares of capital stock of the Issuer, (iv) creating or issuing debt securities, (v) creating or changing any subsidiary structure, (vi) increasing the size of the board of directors, (vii) changing any compensatory stock plans of the Issuer, and (viii) taking certain actions with respect to affiliates. Further, the Issuer may not make certain amendments to the Issuer’s Certificate of Incorporation or bylaws without the consent of the holders of 81% of the outstanding shares of Preferred Stock.
The Certificate of Incorporation also empowered the holders of the outstanding Preferred Stock to designate one director of the Issuer. Spring Street designated David J. Liptak as a director and Mr. Liptak has since taken office.
The Issuer and Spring Street entered into an Investor Rights Agreement, dated March 11, 2009 (the “Investor Rights Agreement”), pursuant to which the Issuer has granted to Spring Street certain demand and piggyback registration rights.
The foregoing descriptions of the Certificate of Incorporation and the Investor Rights Agreement are qualified in their entirety by reference to the full text of such documents, which documents are exhibits hereto.
Each of the Reporting Persons reserves the right, in light of an ongoing evaluation of the Issuer’s financial condition, business, operations and prospects, the market price of the Common Stock, conditions in the securities markets generally, general economic and industry conditions, Spring Street’s business objectives and other relevant factors, at any time to change plans and intentions regarding the investment in the Issuer described herein, as deemed appropriate. Such changes may include, and each of the Reporting Persons reserves the right to effect (or seek to effect), at any time and from time to time in any single transaction or series of transactions, in each case subject to any applicable legal and contractual restrictions on his or its ability to do so, any or all of the following actions:
| (a) | purchasing additional shares of Common Stock or other securities of the Issuer on the open market, in privately negotiated transactions, or otherwise; |
| (b) | selling some or all of the Reporting Persons’ shares of Common Stock or other Issuer securities on the open market, in privately negotiated transactions, or otherwise; |
| (c) | extraordinary corporate transactions, including, without limitation, mergers, acquisitions, dispositions, recapitalizations, sales or transfers of assets, reorganizations or liquidations involving the Issuer; |
| (d) | sale or transaction of a material amount of assets of the Issuer; |
| (e) | compositional changes to the board of directors or management of the Issuer as described herein and otherwise; |
| (f) | material changes in the present capitalization or dividend policy of the Issuer; |
| (g) | material changes in the Issuer’s business or corporate structure; |
| (h) | changes to the Issuer’s certificate of incorporation, bylaws and other organizational documents; |
| (i) | causing a class of securities of the Issuer to be delisted from a national securities exchange; |
| (j) | causing a class of securities of the Issuer to be eligible for termination of registration pursuant to Section 12(g) of the Exchange Act; and |
| (k) | taking all such additional actions as the Reporting Persons deem necessary or advisable to effectuate the foregoing objectives, and which the Reporting Persons believe are reasonably related thereto. |
SCHEDULE 13D
| CUSIP No. Q3191S103 | Page 7 of 9 Pages |
| Item 5. | Interest in Securities of the Issuer. |
(a), (b) The percentages used herein are calculated based upon the 87,499,646 shares of Common Stock outstanding as of February 12, 2016, as set forth pursuant to the information contained in the Issuer’s Form 8-K filed February 16, 2016. For the purposes of calculating the percentage of outstanding Common Stock beneficially owned by the Reporting Persons, such outstanding shares are increased by the 30,000,000 shares of Common Stock into which the Preferred Shares are convertible, which shares of Common Stock are deemed to be outstanding. Thus, a total of 117,499,646 shares are used to calculate the percentage of outstanding Common Stock beneficially owned by the Reporting Persons as described in this Amendment No. 5 to Schedule 13D.
On each of August 24, 2012 and December 21, 2012, the Reporting Persons effectuated the following estate planning transactions (collectively, the “Estate Planning Transfers”): (1) Spring Street made a limited partnership distribution to Mr. Liptak of shares of Common Stock (in the amounts of 320,000 on August 24 and 700,000 on December 21); and (2) Mr. Liptak made a bona fide gift of shares of Common Stock to Etta Brandman and Janet Taylor, as co-trustees of the Liptak 2012 Family Agreement, a trust for the benefit of Mr. Liptak’s children (in the amounts of 320,000 on August 24 and 700,000 on December 21). Mr. Liptak is neither a trustee nor a beneficiary of that trust. On September 19, 2012, Spring Street made a bona fide gift of 315,000 shares of Common Stock to a private educational institution (the “School Gift”). After taking into account the purchases and acquisitions of Common Stock reported upon in previous filings of this Schedule 13D and amendments thereto, and after consummation of the Estate Planning Transfers and the School Gift described in this paragraph, Spring Street is the record owner of a total of 5,896,973 shares of Common Stock.
After taking into account the purchases and acquisitions and conversions of Series A Preferred Stock reported upon in previous filings of this Schedule 13D and amendments thereto, Spring Street is the record holder of 20,000,000 shares of Series A Preferred Stock, which are immediately convertible into an equal number of shares of Common Stock.
Assuming the conversion in full of all of the Series A Preferred Stock held by Spring Street, Spring Street is the beneficial owner of 25,896,973 shares of Common Stock constituting approximately 22.04% of the total outstanding shares of Common Stock (the “Subject Shares”). Such calculations have been made in accordance with Rule 13d-3(d)(1) under the Exchange Act. Spring Street has the sole power to vote or direct the vote and the sole power to dispose or direct the disposition of all of the Subject Shares of Common Stock.
West Broadway Advisors, L.L.C., as the sole general partner of Spring Street, may be deemed to have the shared power to vote or direct the vote and the shared power to dispose or direct the disposition of the Subject Shares. David J. Liptak, as the manager and sole member of West Broadway Advisors, L.L.C., may also be deemed to have the shared power to vote or direct the vote and the shared power to dispose or direct the disposition of the Subject Shares. Therefore, West Broadway Advisors, L.L.C. and David J. Liptak may be deemed to be the beneficial owners of the Subject Shares. West Broadway Advisors, L.L.C. and David J. Liptak each disclaim beneficial ownership of the Subject Shares except to the extent of their pecuniary interest therein.
(c)Other than pursuant to the terms of the Merger Agreement and the Voting Agreement, none of the Reporting Persons has effected any transactions in respect of the Common Stock in the past 60 days.
(d)The right to receive dividends on, and proceeds from the sale of the Subject Shares which may be beneficially owned by the persons described in (a) and (b) above, is governed by the partnership and operating agreements of each such entity, as applicable, and such dividends or proceeds may be distributed with respect to the partners or members in accordance with their respective interests.
(e)Not applicable
| Item 6. | Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer. |
The responses to Items 2, 3, 4 and 5 in this Amendment No. 5 to Schedule 13D and the responses to Item 4 in Amendment No. 3 to Schedule 13D are incorporated herein by this reference. Except as set forth in response to those Items of this Schedule 13D and the agreements which are set forth as exhibits hereto, and incorporated herein by this reference, to the best knowledge of the Reporting Persons, there are no other material contracts, arrangements, understandings or relationships (legal or otherwise) among the Reporting Persons and between such Reporting Persons and any person with respect to any securities of the Issuer, including transfer or voting of any of the securities of the Issuer, finder’s fees, joint ventures, loan or option arrangements, puts or calls, guarantees of profits, division of profits or loss, or the giving or withholding of proxies, or a pledge or contingency the occurrence of which would give another person voting power over the securities of the Issuer.
SCHEDULE 13D
| CUSIP No. Q3191S103 | Page 8 of 9 Pages |
| Item 7. | Material to be Filed as Exhibits. |
| Exhibit 24 | Power of Attorney executed by Spring Street Partners, L.P., West Broadway Advisors, L.L.C. and David J. Liptak dated February 12, 2016. |
| Exhibit 99.1 | Joint Filing Agreement, dated February 14, 2013, among the Reporting Persons relating to the filing of joint statements on Schedule 13D. |
| Exhibit 99.2 | Purchase Agreement, dated February 13, 2009 (1). |
| Exhibit 99.3 | Amended and Restated Certificate of Incorporation of the Issuer, filed with the State of Delawareon March 11, 2009, as amended by the Certificates of Amendment filed with the Secretary of State of Delaware on April 28, 2015 and June 3, 2015 (2). |
| Exhibit 99.4 | Investor Rights Agreement, dated March 11, 2009 (1). |
| Exhibit 99.5 | Merger Agreement dated February 12, 2016 (3). |
| Exhibit 99.6 | Voting Agreement dated February 12, 2016 (3). |
| (1) | Incorporated herein by reference to the Exhibits to the Schedule 13D filed by the Reporting Persons on March 23, 2009. |
| (2) | Incorporated herein by reference to the Exhibits to the Forms 8-K filed by the Issuer June 3, 2015, May 1, 2015 and April 20, 2012. |
| (3) | Incorporated herein by reference to the Exhibits to the Form 8-K filed by the Issuer on February 16, 2016. |
SCHEDULE 13D
| CUSIP No. Q3191S103 | Page 9 of 9 Pages |
SIGNATURES
After reasonable inquiry and to the best of his or its knowledge and belief, each of the undersigned certifies that the information set forth in this statement is true, complete and correct.
Dated: February 16, 2016
| SPRING STREET PARTNERS, L.P. | ||||
| By: | WEST BROADWAY ADVISORS, L.L.C., its general partner | |||
| By: | /s/ Daniel T. Mongan | |||
| Name: | Daniel T. Mongan | |||
| Title: | Attorney-in-fact | |||
| WEST BROADWAY ADVISORS, L.L.C. | ||||
| By: | /s/ Daniel T. Mongan | |||
| Name: | Daniel T. Mongan | |||
| Title: | Attorney-in-fact | |||
| DAVID J. LIPTAK, Individually | ||||
/s/ Daniel T. Mongan | ||||
| By: | Daniel T. Mongan, attorney-in-fact | |||
