EXHIBIT C - SCHEDULE 13D
FIR TREE PARTNERS
0000 XXXXXX XX XXX XXXXXXXX, 00XX XXXXX
XXX XXXX, XXX XXXX 00000
August 12, 1997
VS&A Communications Partners II, L.P.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
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/ Xxxx Xxxxxxxxxx
--------------------------
Xxxx Xxxxxxxxxx
Accepted and Agreed to:
VS&A Communications Partners II, L.P.
By: /s/ Xxxxxxx Xxxxxxxxx
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President and General Partner
