<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13E-4
ISSUER TENDER OFFER STATEMENT
(Pursuant to Section 13(e)(1) of the Securities Exchange Act of 1934)
T/SF COMMUNICATIONS CORPORATION
(Name of Issuer)
T/SF COMMUNICATIONS CORPORATION
(Name of Person(s) Filing Statement)
COMMON STOCK, PAR VALUE $.10 PER SHARE
(Title of Class of Securities)
872857 10 7
(CUSIP Number of Class of Securities)
HOWARD G. BARNETT, JR.
CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER
T/SF COMMUNICATIONS CORPORATION
2407 EAST SKELLY DRIVE
TULSA, OKLAHOMA 74105
(918) 747-2600
(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications on Behalf of the Person(s) Filing Statement)
Copy to:
ROBERT A. CURRY, ESQ.
CONNER & WINTERS
A PROFESSIONAL CORPORATION
2400 FIRST PLACE TOWER
15 EAST 5TH STREET
TULSA, OKLAHOMA 74103
(918) 586-5711
SEPTEMBER 8, 1997
(Date Tender Offer First Published, Sent or Given to Security Holders)
CALCULATION OF FILING FEE
================================================================================
TRANSACTION VALUATION/(1)/ AMOUNT OF FILING FEE/(2)/
- --------------------------------------------------------------------------------
$134,098,751.50 $26,820
================================================================================
(1) Based upon purchase of 3,331,646 shares at $40.25 per share.
(2) The amount of the filing fee equals 1/50 of 1% of the value of the
securities to be acquired.
[_] Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the Form
or Schedule and the date of its filing.
Amount Previously Paid: Not Applicable
Form or Registration No.: Not Applicable
Filing Party: Not Applicable
Date Filed: Not Applicable
<PAGE>
SCHEDULE 13E-4
INTRODUCTION
This Issuer Tender Offer Statement (this "Statement") relates to the offer
by T/SF Communications Corporation, a Delaware corporation (the "Company"), to
purchase all of its issued and outstanding shares of common stock, par value
$.10 per share ("Shares"), for $40.25 per Share, net to the seller in cash, upon
the terms and subject to the conditions set forth in the Offer to Purchase dated
September 8, 1997 (the "Offer to Purchase"), and in the related Letter of
Transmittal dated September 8, 1997 (which together constitute the "Offer"),
copies of which are attached hereto as Exhibits (a)(1) and (a)(2), respectively.
ITEM 1. SECURITY AND ISSUER.
(a) The name of the issuer is T/SF Communications Corporation, a Delaware
corporation, which has its principal executive offices at 2407 East Skelly
Drive, Tulsa, Oklahoma 74105.
(b) This Statement relates to the offer by the Company to purchase all of
the Shares at a price of $40.25 per Share, net to the seller in cash, upon
the terms and subject to the conditions set forth in the Offer to Purchase.
Reference is hereby made to the "Introduction," "The Offer - 1. Number of
Shares; Extension of the Offer," "The Offer - 7. Background and Purpose of
the Offer and the Purchase," "The Offer - 9. Source and Amount of Funds"
and "The Offer - 11. Transactions and Arrangements Concerning the Shares"
of the Offer to Purchase, each of which is incorporated herein by
reference.
(c) Reference is hereby made to the "Introduction" and "The Offer - 6.
Price Range of Shares; Dividend Policy" of the Offer to Purchase, each of
which is incorporated herein by reference.
(d) Not applicable.
ITEM 2. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a)-(b) Reference is hereby made to "The Offer - 9. Source and Amount of
Funds" of the Offer to Purchase, which section is incorporated herein by
reference.
ITEM 3. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE ISSUER OR
AFFILIATE.
(a)-(j) Reference is hereby made to the "Introduction," "Special Factors -
Background of the Offer," "Special Factors - Purpose of the Offer,"
"Special Factors - Certain Effects of the Offer," "The Offer - 6. Price
Range of Shares; Dividend Policy," "The Offer - 7.
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Background and Purpose of the Offer and the Purchase" and "The Offer - 13.
Effects of the Offer on the Market for Shares; Registration under the
Exchange Act" of the Offer to Purchase, each of which is incorporated
herein by reference.
ITEM 4. INTEREST IN SECURITIES OF THE ISSUER.
Reference is hereby made to "The Offer - 11. Transactions and Arrangements
Concerning the Shares" of the Offer to Purchase, which section is
incorporated herein by reference.
ITEM 5. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO THE ISSUER'S SECURITIES
Reference is hereby made to the "Introduction," "Special Factors - Purpose
of the Offer," "The Offer - 7. Background and Purpose of the Offer and the
Purchase" and "The Offer - 11. Transactions and Arrangements Concerning the
Shares" of the Offer to Purchase, each of which is incorporated herein by
reference.
ITEM 6. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
Reference is hereby made to the front cover page, the "Introduction" and
"The Offer - 15. Fees and Expenses" of the Offer to Purchase, each of which
is incorporated herein by reference.
ITEM 7. FINANCIAL INFORMATION.
(a)-(b) Reference is hereby made to "The Offer - 8. Certain Information
Concerning the Company" of the Offer to Purchase, which section is
incorporated herein by reference. The audited financial statements of the
Company set forth in the Company's Report on Form 10-K for the year ended
December 31, 1996, are incorporated herein by reference. The unaudited
financial statements of the Company set forth in the Company's Report on
Form 10-Q for the quarterly period ended June 30, 1997, are incorporated
herein by reference.
ITEM 8. ADDITIONAL INFORMATION.
(a) Reference is hereby made to "Special Factors - Potential Conflicts of
Interest" of the Offer to Purchase, which section is incorporated herein by
reference.
(b) Reference is hereby made to "The Offer - 12. Certain Legal Matters;
Regulatory Approvals; Appraisal Rights" of the Offer to Purchase, which
section is incorporated herein by reference.
(c) Reference is hereby made to "Special Factors - Certain Effects of the
Offer" and "The Offer - 13. Effects of the Offer on the Market for Shares;
Registration under the
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Exchange Act" of the Offer to Purchase, each of which is incorporated
herein by reference.
(d) Not applicable.
(e) Reference is hereby made to the Offer to Purchase and the related
Letter of Transmittal, copies of which are attached hereto as Exhibits
(a)(1) and (a)(2), respectively, and are incorporated herein by reference
in their entirety.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
(a)(1) Offer to Purchase, dated September 8, 1997.
(a)(2) Letter of Transmittal, dated September 8, 1997.
(a)(3) Notice of Guaranteed Delivery, dated September 8, 1997.
(a)(4) Letter to Brokers, Dealers, Commercial Banks, Trust Companies and
Other Nominees, dated September 8, 1997.
(a)(5) Letter to Clients for use by Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees, dated September 8, 1997.
(a)(6) Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
(a)(7) Letter to the Company's Stockholders from the Chairman, President
and Chief Executive Officer of the Company, dated September 8, 1997.
(a)(8) Press Release, dated September 8, 1997.
(b)(1) Letter agreement, dated August 13, 1997, among First Union Capital
Markets Corporation ("First Union"), First Union National Bank (the "Bank")
and VS&A Communications Partners II, L.P ("VS&A").
(b)(2) Fee letter agreement, dated August 13, 1997, among First Union, the
Bank and VS&A.
(b)(3) Letter agreement, dated August 13, 1997, among First Union
Corporation, First Union and VS&A.
(b)(4) Fee letter agreement, dated August 13, 1997, among First Union
Corporation, First Union and VS&A.
(c)(1) Stock Purchase Agreement, dated as of August 15, 1997, among VS&A,
VS&A-T/SF, Inc. ("VS&A-T/SF") and the Company.
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(c)(2) Stockholder Agreement, dated as of August 15, 1997, among VS&A,
VS&A-T/SF and Jenkin Lloyd Jones Jr. and Carol B. Jones, Trustees UA July
3, 1985, Jenkin Lloyd Jones Jr. Revocable Inter Vivos Trust.
(c)(3) Stockholder Agreement, dated as of August 15, 1997, among VS&A,
VS&A-T/SF and J. Gary Mourton.
(c)(4) Stockholder Agreement, dated as of August 15, 1997, among VS&A,
VS&A-T/SF and Robert E. Craine, Jr.
(c)(5) Stockholder Agreement, dated as of August 15, 1997, among VS&A,
VS&A-T/SF and Howard G. Barnett, Jr.
(c)(6) Stockholder Agreement, dated as of August 15, 1997, among VS&A,
VS&A-T/SF and Howard G. Barnett and Howard G. Barnett, Jr., Trustees UA
June 22, 1976, FBO Howard G. Barnett Revocable Inter Vivos Trust.
(c)(7) Stockholder Agreement, dated as of August 15, 1997, among VS&A,
VS&A-T/SF and Howard G. Barnett, Jr. and Florence Lloyd Jones Barnett,
Trustees UA June 22, 1996, Florence Lloyd Jones Barnett Revocable Inter
Vivos Trust.
(c)(8) Stockholder Agreement, dated as of August 15, 1997, among VS&A,
VS&A-T/SF and Billie T. Barnett.
(c)(9) Stockholder Agreement, dated as of August 15, 1997, among VS&A,
VS&A-T/SF and Jenkin Lloyd Jones and Jenkin Lloyd Jones Jr., Trustee UA
September 25, 1972, Jenkin Lloyd Jones Revocable Inter Vivos Trust.
(c)(10) Stockholder Agreement, dated as of August 15, 1997, among VS&A,
VS&A-T/SF and David Lloyd Jones.
(c)(11) Stockholder Agreement, dated as of August 15, 1997, among VS&A,
VS&A-T/SF and Florence Lloyd Jones Barnett, Trustee UA March 18, 1996,
Florence Lloyd Jones Barnett Charitable Remainder Unitrust.
(c)(12) Stockholder Agreement, dated as of August 15, 1997, among VS&A,
VS&A-T/SF and Howard G. Barnett and Florence Lloyd Jones Barnett, Trustees
of the Florence L.J. and Howard G. Barnett Foundation.
(c)(13) Form of Consulting Agreement to be entered into between the Company
and Howard G. Barnett, Jr.
(c)(14) Form of Consulting Agreement to be entered into between the Company
and Robert E. Craine, Jr.
(c)(15) Form of Consulting Agreement to be entered into between the Company
and J. Gary Mourton.
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(d) Not applicable.
(e) Not applicable.
(f) None.
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SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this Statement is true, complete and correct.
T/SF COMMUNICATIONS CORPORATION
Date: September 5, 1997 By: /s/ Howard G. Barnett, Jr.
----------------------------------------
Howard G. Barnett, Jr.
Chairman, President and
Chief Executive Officer
-7-
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EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
----------- -----------
(a)(1) Offer to Purchase, dated September 8, 1997.
(a)(2) Letter of Transmittal, dated September 8, 1997.
(a)(3) Notice of Guaranteed Delivery, dated September 8, 1997.
(a)(4) Letter to Brokers, Dealers, Commercial Banks, Trust Companies
and Other Nominees, dated September 8, 1997.
(a)(5) Letter to Clients for use by Brokers, Dealers, Commercial
Banks, Trust Companies and Other Nominees, dated September 8,
1997.
(a)(6) Guidelines for Certification of Taxpayer Identification Number
on Substitute Form W-9.
(a)(7) Letter to the Company's Stockholders from the Chairman,
President and Chief Executive Officer of the Company, dated
September 8, 1997.
(a)(8) Press Release, dated September 8, 1997.
(b)(1) Letter agreement, dated August 13, 1997, among First Union
Capital Markets Corporation ("First Union"), First Union
National Bank (the "Bank") and VS&A Communications Partners II,
L.P ("VS&A").
(b)(2) Fee letter agreement, dated August 13, 1997, among First Union,
the Bank and VS&A.
(b)(3) Letter agreement, dated August 13, 1997, among First Union
Corporation, First Union and VS&A.
(b)(4) Fee letter agreement, dated August 13, 1997, among First Union
Corporation, First Union and VS&A.
(c)(1) Stock Purchase Agreement, dated as of August 15, 1997, among
VS&A, VS&A-T/SF, Inc. ("VS&A-T/SF") and the Company.
(c)(2) Stockholder Agreement, dated as of August 15, 1997, among VS&A,
VS&A-T/SF and Jenkin Lloyd Jones Jr. and Carol B. Jones,
Trustees UA July 3, 1985, Jenkin Lloyd Jones Jr. Revocable
Inter Vivos Trust.
(c)(3) Stockholder Agreement, dated as of August 15, 1997, among VS&A,
VS&A-T/SF and J. Gary Mourton.
(c)(4) Stockholder Agreement, dated as of August 15, 1997, among VS&A,
VS&A-T/SF and Robert E. Craine, Jr.
<PAGE>
EXHIBIT NO. DESCRIPTION
----------- -----------
(c)(5) Stockholder Agreement, dated as of August 15, 1997, among VS&A,
VS&A-T/SF and Howard G. Barnett, Jr.
(c)(6) Stockholder Agreement, dated as of August 15, 1997, among VS&A,
VS&A-T/SF and Howard G. Barnett and Howard G. Barnett, Jr.,
Trustees UA June 22, 1976, FBO Howard G. Barnett Revocable
Inter Vivos Trust.
(c)(7) Stockholder Agreement, dated as of August 15, 1997, among VS&A,
VS&A-T/SF and Howard G. Barnett, Jr. and Florence Lloyd Jones
Barnett, Trustees UA June 22, 1996, Florence Lloyd Jones
Barnett Revocable Inter Vivos Trust.
(c)(8) Stockholder Agreement, dated as of August 15, 1997, among VS&A,
VS&A-T/SF and Billie T. Barnett.
(c)(9) Stockholder Agreement, dated as of August 15, 1997, among VS&A,
VS&A-T/SF and Jenkin Lloyd Jones and Jenkin Lloyd Jones Jr.,
Trustee UA September 25, 1972, Jenkin Lloyd Jones Revocable
Inter Vivos Trust.
(c)(10) Stockholder Agreement, dated as of August 15, 1997, among VS&A,
VS&A-T/SF and David Lloyd Jones.
(c)(11) Stockholder Agreement, dated as of August 15, 1997, among VS&A,
VS&A-T/SF and Florence Lloyd Jones Barnett, Trustee UA March
18, 1996, Florence Lloyd Jones Barnett Charitable Remainder
Unitrust.
(c)(12) Stockholder Agreement, dated as of August 15, 1997, among VS&A,
VS&A-T/SF and Howard G. Barnett and Florence Lloyd Jones
Barnett, Trustees of the Florence L.J. and Howard G. Barnett
Foundation.
(c)(13) Form of Consulting Agreement to be entered into between the
Company and Howard G. Barnett, Jr.
(c)(14) Form of Consulting Agreement to be entered into between the
Company and Robert E. Craine, Jr.
(c)(15) Form of Consulting Agreement to be entered into between the
Company and J. Gary Mourton.
<PAGE>
EXHIBIT (a)(1)
OFFER TO PURCHASE FOR CASH
BY
T/SF COMMUNICATIONS CORPORATION
ALL OUTSTANDING SHARES OF ITS COMMON STOCK
AT $40.25 NET PER SHARE
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW
YORK CITY TIME, ON MONDAY, OCTOBER 6, 1997, UNLESS THE OFFER IS
EXTENDED.
T/SF Communications Corporation, a Delaware corporation (the "Company"), is
offering to purchase all of its outstanding shares of Common Stock, par value
$.10 per share ("Shares"), for $40.25 per Share, net to the seller in cash,
upon the terms and subject to the conditions set forth in this Offer to
Purchase and in the related Letter of Transmittal (which together constitute
the "Offer").
---------------
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) AT LEAST 1,600,000
SHARES BEING VALIDLY TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE
OFFER AND (2) THE COMPANY BEING SATISFIED, IN ITS SOLE DISCRETION, THAT THE
COMPANY HAS OBTAINED SUFFICIENT FINANCING TO ENABLE IT TO CONSUMMATE THE
OFFER. THE OFFER IS ALSO SUBJECT TO CERTAIN OTHER CONDITIONS. SEE "THE OFFER--
SECTION 5."
---------------
The Shares are traded on the American Stock Exchange (the "AMEX") under the
symbol "TCM." On August 15, 1997, the last reported sales price of the Shares
on the AMEX before the announcement of the terms of the Offer was $38 7/8 per
Share. On June 30, 1997, the last reported sales price of the Shares on the
AMEX before the announcement that the Company intended to make an earlier
offer to purchase the Shares, was $27 5/8 per Share. On September 4, 1997, the
last reported sales price of the Shares on the AMEX was $39 3/8 per Share.
Stockholders are urged to obtain a current market quotation for the Shares.
UPON TERMINATION OF THE OFFER, THE SHARES WILL LIKELY CEASE TO BE LISTED ON
THE AMEX AND THE COMPANY WILL LIKELY CEASE TO BE A REPORTING COMPANY UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED (THE "EXCHANGE ACT"). ACCORDINGLY,
NO PUBLIC MARKET FOR THE SHARES IS LIKELY TO EXIST AFTER TERMINATION OF THE
OFFER. SEE "THE OFFER--SECTION 13." MOREOVER, THE PURCHASE OF SHARES PURSUANT
TO THE OFFER WILL BE FOLLOWED BY A MERGER OR REVERSE STOCK SPLIT THAT WILL
RESULT IN THE CONVERSION OF SHARES NOT TENDERED INTO THE RIGHT TO RECEIVE
$40.25 PER SHARE IN CASH (THE "SECOND--STEP TRANSACTION").
---------------
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY DETERMINED, AFTER
GIVING CAREFUL CONSIDERATION TO A NUMBER OF FACTORS, INCLUDING THE WRITTEN
OPINION DATED AUGUST 15, 1997 OF THE FINANCIAL ADVISOR OF THE COMPANY, TO THE
EFFECT THAT, AND SUBJECT TO THE LIMITATIONS THEREIN, THE CONSIDERATION TO BE
RECEIVED BY THE COMPANY'S STOCKHOLDERS IN THE OFFER AND THE SECOND-STEP
TRANSACTION IS FAIR TO SUCH STOCKHOLDERS FROM A FINANCIAL POINT OF VIEW, THAT
THE OFFER DESCRIBED HEREIN IS FAIR TO, AND IN THE BEST INTERESTS OF, THE
STOCKHOLDERS OF THE COMPANY, AND RECOMMENDS THAT STOCKHOLDERS ACCEPT THE OFFER
AND TENDER THEIR SHARES IN THE OFFER. SEE "SPECIAL FACTORS--BACKGROUND OF THE
OFFER" AND "SPECIAL FACTORS--OPINION OF FINANCIAL ADVISOR."
THIS TRANSACTION HAS NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION (THE "SEC") NOR HAS THE SEC PASSED UPON THE FAIRNESS OR
MERITS OF SUCH TRANSACTION NOR UPON THE ACCURACY OR ADEQUACY OF THE
INFORMATION CONTAINED IN THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS
UNLAWFUL.
---------------
The Information Agent for the Offer is:
BEACON HILL PARTNERS, INC.
September 8, 1997
<PAGE>
IMPORTANT
Any stockholder desiring to tender all or any portion of such stockholder's
Shares should either (1) complete and sign the Letter of Transmittal or a
facsimile copy thereof in accordance with the instructions set forth in the
Letter of Transmittal, mail or deliver the Letter of Transmittal and any other
documents required by the Letter of Transmittal to ChaseMellon Shareholder
Services, L.L.C., the depositary for the Offer (the "Depositary"), and either
mail or deliver the certificates for the tendered Shares to the Depositary
along with the Letter of Transmittal or follow the procedure for book-entry
transfer set forth in "The Offer--Section 2"; or (2) request such
stockholder's broker, dealer, commercial bank, trust company or other nominee
to effect the transaction on behalf of such stockholder. A stockholder having
Shares registered in the name of a broker, dealer, commercial bank, trust
company or other nominee must contact such broker, dealer, commercial bank,
trust company or other nominee if such stockholder desires to tender such
Shares.
A stockholder who desires to tender Shares and whose certificates for such
Shares are not immediately available (or who cannot follow the procedure for
book-entry transfer on a timely basis) or who cannot transmit the Letter of
Transmittal and all other required documents to the Depositary before the
Expiration Date (as defined in "The Offer--Section 1") should tender such
Shares by following the procedure for guaranteed delivery set forth in "The
Offer--Section 2."
----------------
Any questions or requests for assistance may be directed to the Information
Agent (as defined herein) at its address and telephone number set forth on the
back cover of this Offer to Purchase. Requests for additional copies of this
Offer to Purchase, the Letter of Transmittal and the Notice of Guaranteed
Delivery may be directed to the Information Agent. Stockholders may also
contact their broker, dealer, commercial bank, trust company or other nominee
for assistance concerning the Offer.
----------------
NO PERSON HAS BEEN AUTHORIZED TO MAKE ANY RECOMMENDATION ON BEHALF OF THE
COMPANY AS TO WHETHER STOCKHOLDERS SHOULD TENDER OR REFRAIN FROM TENDERING
SHARES PURSUANT TO THE OFFER. NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THE OFFER OTHER
THAN THOSE CONTAINED IN THIS OFFER TO PURCHASE OR IN THE LETTER OF
TRANSMITTAL. IF MADE OR GIVEN, SUCH RECOMMENDATION AND SUCH INFORMATION AND
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
SECTION PAGE
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<S> <C>
INTRODUCTION.............................................................. 1
SPECIAL FACTORS........................................................... 2
Background of the Offer................................................ 2
Purpose of the Offer................................................... 5
Certain Effects of the Offer........................................... 9
Potential Conflicts of Interest........................................ 10
Position of the Board of Directors..................................... 10
Opinion of Financial Advisor........................................... 11
THE OFFER................................................................. 14
1. Number of Shares; Extension of the Offer........................... 14
2. Procedure for Tendering Shares..................................... 15
3. Withdrawal Rights.................................................. 16
4. Acceptance for Payment of Shares and Payment of Purchase Price..... 17
5. Certain Conditions of the Offer.................................... 18
6. Price Range of Shares; Dividend Policy............................. 19
7. Background and Purpose of the Offer and the Purchase............... 20
8. Certain Information Concerning the Company......................... 21
9. Source and Amount of Funds......................................... 24
10. Certain Federal Income Tax Considerations.......................... 25
11. Transactions and Arrangements Concerning the Shares................ 27
12. Certain Legal Matters; Regulatory Approvals; Appraisal Rights...... 28
13. Effects of the Offer on the Market for Shares; Registration under
the Exchange Act...................................................... 30
14. Extension of Tender Period; Termination; Amendments................ 31
15. Fees and Expenses.................................................. 32
16. Miscellaneous...................................................... 33
Schedule IDirectors and Executive Officers of the Company................. S-1
Annex AFairness Opinion of Prudential Securities Incorporated............. A-1
</TABLE>
<PAGE>
To the Holders of Common Stock of T/SF Communications Corporation:
INTRODUCTION
The Company is offering to purchase all of the Shares, at the price of
$40.25 per Share (the "Purchase Price"), net to the seller in cash, upon the
terms and subject to the conditions set forth in this Offer to Purchase and in
the related Letter of Transmittal.
The Shares are currently listed and traded on the AMEX under the symbol
"TCM." If the purchase of Shares is made pursuant to the Offer, the Shares
will likely no longer meet the requirements for continued listing on the AMEX
and will likely be delisted. The Company will likely also cease to be a
reporting company under the Exchange Act. Accordingly, no public market for
the Shares is likely to exist after the Offer. See "The Offer--Section 13."
Moreover, the purchase of Shares pursuant to the Offer will be followed by the
Second-Step Transaction that will result in the conversion of Shares not
tendered into the right to receive $40.25 per Share in cash.
On August 15, 1997, the last reported sales price of the Shares on the AMEX
before the announcement of the terms of the Offer was $38 7/8 per Share. On
June 30, 1997, the last reported sales price of the Shares on the AMEX before
the announcement that the Company intended to make an earlier offer to
purchase the Shares, was $27 5/8 per Share. On September 4, 1997, the last
reported sales price of the Shares on the AMEX was $39 3/8 per Share. See "The
Offer--Section 6." Stockholders are urged to obtain a current market quotation
for the Shares.
In determining whether the Purchase Price to be paid to the Company's
stockholders was fair, the Board of Directors of the Company relied in part on
an opinion dated August 15, 1997, rendered by Prudential Securities
Incorporated ("Prudential Securities") to the effect that, and subject to the
limitations therein, the consideration to be received by the stockholders of
the Company in the Offer and Second-Step Transaction is fair, from a financial
point of view, to such stockholders. The Board of Directors of the Company
determined that the Company should make the Offer and that the $40.25 per
Share price is fair to the Company's stockholders. See Annex A.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) AT LEAST 1,600,000
SHARES BEING VALIDLY TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE
OFFER AND (2) THE COMPANY BEING SATISFIED, IN ITS SOLE DISCRETION, THAT THE
COMPANY HAS OBTAINED SUFFICIENT FINANCING TO ENABLE IT TO CONSUMMATE THE
OFFER. THE OFFER IS ALSO SUBJECT TO CERTAIN OTHER CONDITIONS. SEE "THE OFFER--
SECTION 5."
As of September 4, 1997, there were 3,331,646 Shares outstanding and 360,500
Shares were reserved for issuance in connection with outstanding stock
options. As of September 4, 1997, the Company's directors and executive
officers as a group beneficially owned 1,276,768 Shares, or 35.4% of the
Shares, which includes 275,500 of the Shares issuable upon exercise of stock
options. The Company has been informed by its directors and executive officers
that they and their affiliates intend to tender all of the Shares owned by
them pursuant to the Offer. The amount of Shares beneficially owned by the
Company's directors and executive officers includes 11,973 Shares held by the
T/SF Communications Corporation Savings and Retirement Plan (the "T/SF
Retirement Plan"). Howard G. Barnett, Jr., the Company's Chairman, President
and Chief Executive Officer, has sole voting and dispositive power with
respect to Shares held by the T/SF Retirement Plan. Mr. Barnett has indicated
that he intends to tender all of such Shares held by the T/SF Retirement Plan
pursuant to the Offer.
The Offer is intended to afford the Company's stockholders liquidity for
their Shares by providing an opportunity to sell their Shares at a price which
the Company believes is fair and at a premium over recent market prices.
<PAGE>
In connection with the Offer, VS&A-T/SF, Inc., a Delaware corporation
("VS&A-T/SF") which is a wholly owned subsidiary of VS&A Communications
Partners II, L.P., a Delaware limited partnership ("VS&A"), intends to
purchase from the Company at least 869,565 newly-issued Shares at the Purchase
Price (the "Stock Purchase"). The Offer, together with the Stock Purchase,
would effect a recapitalization of the Company that would enable VS&A-T/SF to
obtain a controlling equity interest in the Company. See "The Offer--Section
7." The Company has been informed by Fir Tree Partners and its affiliates
("Fir Tree"), which together own 14.6% of the outstanding Shares, that Fir
Tree does not intend to tender any of its Shares pursuant to the Offer. After
giving effect to the repurchase of Shares by the Company pursuant to the Offer
(assuming 1,600,000 Shares are tendered and purchased pursuant to the Offer)
and the purchase of 869,565 Shares by VS&A-T/SF pursuant to the Stock
Purchase, VS&A-T/SF and Fir Tree will own beneficially 33.4% and 18.7% of the
outstanding Shares, respectively.
VS&A-T/SF has agreed, as soon as practicable following consummation of the
Offer, to cause the Company to consummate the Second-Step Transaction,
pursuant to which each then outstanding Share (other than Shares owned by
VS&A-T/SF, Fir Tree and, possibly, Shares held by stockholders who perfect
appraisal rights) would be converted into the right to receive the Purchase
Price for each such Share. It is anticipated that, upon consummation of the
Offer and the Second-Step Transaction, all of the Shares will be held by VS&A-
T/SF and Fir Tree. In addition, it is anticipated that, if consummated, the
Offer alone, or the Offer followed by the Second-Step Transaction, would
result in: (i) the delisting of the Shares on the AMEX, (ii) the Shares
becoming eligible for termination of registration pursuant to Section 12(g)(4)
of the Exchange Act, (iii) a change in the composition of the present board of
directors and executive officers of the Company, and (iv) a change in the
capitalization of the Company.
Tendering stockholders will not be obligated to pay brokerage commissions,
solicitation fees or, subject to Instruction 6 of the Letter of Transmittal,
stock transfer taxes on the purchase of Shares by the Company. The Company
will pay all fees and expenses of Beacon Hill Partners, Inc. (the "Information
Agent") and ChaseMellon Shareholder Services, L.L.C. (the "Depositary"), in
connection with the Offer. See "The Offer--Section 15."
SPECIAL FACTORS
BACKGROUND OF THE OFFER
On September 25, 1996, the Board of Directors of the Company engaged in a
lengthy discussion regarding each of the Company's operating subsidiaries and
the possibility of selling or otherwise disposing of one or more subsidiaries.
At this meeting, the Board authorized management of the Company to engage an
investment banker to assist the Company in investigating strategic
alternatives with respect to Transportation Information Services, Inc.
("TISI"), the Company's largest subsidiary (from a profitability standpoint),
including a possible sale of TISI.
On November 22, 1996, the Company entered into an agreement with Prudential
Securities (as later modified, the "Engagement Letter") providing for
Prudential Securities to act as financial advisor to the Company in
investigating strategic alternatives with respect to TISI. A public
announcement of this action was made on the same date. The motivation for this
action was to enhance stockholder value and liquidity through an appropriate
transaction with respect to TISI.
Formal sales literature describing TISI was prepared and disseminated to
numerous parties which the Company and Prudential Securities believed to be
likely buyers for TISI, including VS&A. Early in this process, certain
entities which had been approached as potential buyers for TISI indicated an
interest in participating in discussions with respect to a transaction
relating to the Company as a whole. At a meeting of the Board of Directors on
January 16, 1997, the Board reviewed the status of the proposed sale of TISI
and considered the possibility of pursuing an alternative transaction
involving the Company as a whole. At this meeting, the Board
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decided to continue the TISI sale process and defer any discussion regarding a
transaction with a Company as a whole until it was determined whether a sale
or other transaction involving TISI was viable.
In March and April 1997, formal bids were received from approximately 10
potential buyers and discussions were held with those bidders which the
Company, with the assistance of Prudential Securities, determined to have
presented the best offers.
During this process it became evident that there was no credible offer for
TISI which both gave fair value for TISI and could be structured in a tax
efficient way for the direct benefit of the stockholders of the Company.
However, during these discussions several of the other bidders expressed an
interest in pursuing a transaction by which they would buy the Company as a
whole. At a meeting of the Board of Directors on March 19, 1997, management
was authorized to explore with such other bidders the possibility of a sale of
the Company as a whole. The Engagement Letter was appropriately modified such
that Prudential Securities was engaged to pursue discussions regarding such a
transaction. After exploring various inquiries, by the end of May 1997, those
discussions were focused on one potential buyer which was not VS&A (the "Other
Offeror"). Discussions over a two or three week period in late May and early
June 1997 between management of the Company and the Other Offeror resulted in
certain alternative proposals from the Other Offeror.
At a meeting of the Board of Directors on June 17, 1997, these alternative
proposals were presented. The Other Offeror's proposals had several
components:
(i) To ensure the Other Offeror's desired accounting treatment, the Other
Offeror required that members of the Board of Directors, officers of the
Company and/or certain of their affiliates (collectively, "Insiders"),
commit to retain between 65,000 and 90,000 Shares (the "Retained Common
Equity); i.e. the Other Offeror would acquire for cash all Shares of the
Company other than the Retained Common Equity. The Insiders owned
approximately 1,500,000 Shares and were thus being asked to retain 4% to 6%
of their Shares.
(ii) The amount of cash the Other Offeror would pay for the Shares to be
purchased for cash was fixed at $133,076,000. Thus, in effect, the Shares
owned by non-Insiders would receive $37.75 in cash and Insiders, on
average, would receive $36.08 in cash and $1.67 in value (at $37.75) of
Retained Common Equity for each of the 1,500,000 Shares owned by Insiders.
(iii) As an alternative, the Other Offeror offered the Insiders the
ability to exchange an additional number of Shares for $9,241,500 in face
amount of 9% Preferred Stock (the "Preferred Stock"), redeemable 10 years
after issue. All other terms of the offer, as described in clauses (i) and
(ii) above, remained the same. Prudential Securities advised the Company
that the Preferred Stock was worth materially less than its face amount. If
the Insiders had agreed to accept the Preferred Stock, as well as the
Retained Common Equity, as would have been required for this proposal, the
effect would have been to increase the cash price per Share to be received
by the non-Insider stockholders and to reduce the cash to be received by
the Insiders. By canvassing the Insiders, it was determined that none would
accept any of the Preferred Stock and, thus, this proposal of the Other
Offeror was determined not to be viable.
As a result of the above analysis, the Board of Directors determined that the
best viable proposal from the Other Offeror was as described in clause (ii)
above.
Also at the June 17, 1997, meeting, the senior officers of the Company,
including Howard G. Barnett, Jr., Chairman, President and Chief Executive
Officer, Robert E. Craine, Jr., Executive Vice President, J. Gary Mourton,
Senior Vice President-Finance and Chief Financial Officer, and Stuart P.
Honeybone, Vice President, on their own behalf and on behalf of other
employees of the Company owning stock options (the "Management Group")
proposed an alternative transaction, as follows:
(i) The Management Group and, if agreements could be reached, holders of
up to an additional approximately 600,000 Shares, plus holders of all
outstanding stock options, would agree, in effect, to acquire control of
the Company.
(ii) This transaction would take the form of the Company borrowing
approximately $75,000,000 and making a self-tender offer for, in effect,
all other Shares of the Company at $37.00 in cash per share.
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The Insiders who were present at the meeting and who were not part of the
Management Group, acting in their individual capacities as stockholders,
indicated that they would prefer $37.00 in cash over the terms of any of the
proposals from the Other Offeror. Accordingly, based on this input and the
fact that the Other Offeror had not conducted its due diligence (which was
essentially unnecessary for the transaction proposed by the Management Group)
and, therefore, there was greater uncertainty with the proposal of the Other
Offeror, the Board of Directors directed the Management Group to formalize its
proposal (including receiving firm agreements from the necessary stockholders
and indications of the feasibility of financing) within two weeks.
The Management Group proceeded to negotiate agreements with Fir Tree (which
had previously indicated an interest in participating in a leveraged
recapitalization of the Company) and discuss financing options with Prudential
Securities, Fir Tree and others. As a result, at a meeting of the Board of
Directors on June 30, 1997, the Board approved two agreements with Fir Tree
(which owns 487,506 Shares):
(i) A Preferred Stock Purchase Agreement pursuant to which (a) Fir Tree
would, at closing of all of the contemplated transactions, purchase newly
issued Shares of Preferred Stock of the Company for $5,550,000 in cash,
which Preferred Stock was to be convertible into Shares at a conversion
price of $37.00 per Share, and (b) Fir Tree and the Management Group would
arrange financing for the Company to effect a self-tender offer for, in
effect, all Shares not owned by Fir Tree and the Management Group, at
$37.00 in cash per Share; and
(ii) A Stockholders Agreement, among Fir Tree and certain Insiders
(including the members of the Management Group) which would, among other
things, provide for the governance of the Company after completion of the
self-tender offer and the purchase of Preferred Stock by Fir Tree and
establish certain rights of the parties with respect to Shares owned by
them (the Preferred Stock Purchase Agreement and the Stockholders Agreement
are referred to together as the "Fir Tree Agreements").
Prudential Securities indicated that, subject to due diligence, it would be
interested in pursuing a financing transaction for the self-tender offer.
Accordingly, the Board of Directors of the Company authorized the self-tender
offer (subject to receipt of a fairness opinion from Prudential Securities)
and the Company's entering into the Fir Tree Agreements. The Fir Tree
Agreements were signed and a public announcement of the Fir Tree Agreements
and the proposed self-tender offer was made on July 1, 1997.
A few days after such announcement, the Other Offeror contacted the Company
and offered to adjust its last proposal by monetizing the Preferred Stock. The
effect of this adjustment was that the Other Offeror was offering, subject to
due diligence, $40.18 per Share in cash for each non-Insider owned Share and,
on average, $38.51 in cash and $1.67 in value (at $40.18 per Share) of
Retained Common Equity for each Share owned by Insiders. Based on this, on
July 15, 1997, the Company announced that a third party had made an offer,
subject to due diligence, which, if confirmed, would result in a higher price
to stockholders than the Company's self-tender offer and that the Company
would conduct negotiations with this party to try to effect a favorable
transaction. Because of the Company's uncertainty about this offer by the
Other Offeror, the value of this offer was not publicly disclosed.
About the time of such announcement, VS&A contacted the Company and
indicated an interest in pursuing a transaction with the Company. For the next
several weeks the Company conducted due diligence meetings and negotiations
with both the Other Offeror and VS&A. During the week of August 11, 1997, it
became clear that VS&A, partially as a result of its apparent ability to reach
an agreement with Fir Tree to participate in its proposal, was offering a more
certain and slightly higher priced transaction than the Other Offeror (whose
deal structure was unchanged from that described above).
Accordingly, at a meeting on August 13, 1997, the Board of Directors of the
Company authorized an agreement with VS&A. The Fir Tree Agreements were
terminated by the Company, pursuant to the terms thereof, as of August 13,
1997. On August 15, 1997, the Company entered into a Stock Purchase Agreement
(the "Purchase Agreement"), with VS&A and VS&A-T/SF, providing for the Offer
and the Stock Purchase, as described in this Offer to Purchase. The Purchase
Agreement is more completely described below.
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PURPOSE OF THE OFFER
The purpose of the Offer is to provide the Company's stockholders with
liquidity for their Shares by enabling them to sell their Shares at a fair
price and at a premium over recent market prices and to enable VS&A-T/SF to
obtain a controlling equity interest in the Company. Management believes that,
even as a public stock, primarily because of the large percentage of Shares
held in a few large blocks, there is a very limited market for the Shares,
especially for the sale of large blocks of Shares. The limited supply of
Shares traded in the public market provides little opportunity for a
stockholder to realize the true value of such stockholder's investment in the
Company. The Offer is intended to afford stockholders the opportunity to sell
their Shares in light of the current relative illiquidity and lack of public
float of the Shares. In addition, since going public in 1989, the Company has
not paid any cash or other dividends and does not expect to pay any dividends
in the foreseeable future. Following consummation of the Offer, the Shares
will likely be delisted from the AMEX and registration of the Shares will
likely be terminated under the Exchange Act.
In connection with the Offer, the Company has entered into the Purchase
Agreement, which provides, among other things, for the following:
The Offer. The Company will commence the Offer. The obligation of the
Company to accept for payment and to pay for any Shares tendered prior to
the expiration of the Offer is subject to (i) the condition that there
shall be validly tendered and not withdrawn prior to the expiration of the
Offer at least 1,600,000 Shares (the "Minimum Condition"), (ii) there being
available to the Company the funds required to consummate the purchase of
the Shares in the Offer from the proceeds of the Stock Purchase and not
less than $100,000,000 of debt financing (the "Debt Financing") received
from lenders, and (iii) certain other conditions. See "The Offer--Section
5." The Company has agreed not to amend, modify or waive the terms and
conditions of the Offer unless requested by VS&A or VS&A-T/SF. The Company
will not be required to amend or waive the Minimum Condition, decrease the
Purchase Price or the number of Shares sought, or amend any other condition
of the Offer in any manner adverse to the holders of the Shares. If on the
initial scheduled expiration date of the Offer, all conditions to the Offer
have not been satisfied or waived, the Company may, at its discretion, and
will, if requested by VS&A or VS&A-T/SF, extend the expiration date of the
Offer; provided, that any extension beyond 10 business days requires the
approval of both the Company and VS&A.
The Stock Purchase. The Company has agreed to sell to VS&A-T/SF at least
869,565 Shares at a price per share equal to the Purchase Price. The
consummation of the Stock Purchase will take place simultaneously with the
closing of the Offer. The respective obligation of each party to effect the
Stock Purchase is subject to the satisfaction of various conditions,
including, among others, (i) that the conditions to the Offer have been
satisfied and the Offer has been consummated, (ii) no law, statute, rule,
order, decree or regulation shall have been enacted by any governmental
entity of competent jurisdiction which declares the Purchase Agreement
invalid or unenforceable in any material respect or which prohibits
consummation of the Offer or the Stock Purchase, (iii) all governmental
consents required for the consummation of the Offer and the Stock Purchase
and the other transactions contemplated thereby shall have been obtained,
and (iv) the applicable waiting period under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the "HSR Act"), shall have
expired or been terminated.
The obligations of VS&A and VS&A-T/SF to consummate the Stock Purchase
are further subject to the fulfillment of various conditions, including,
among others, (i) the accuracy of all of the representations and warranties
of the Company set forth in the Purchase Agreement, (ii) performance and
compliance by the Company with all of its covenants contained in the
Purchase Agreement, and (iii) there occurring no material adverse change in
the financial condition, business, results of operations or prospects of
the Company and its subsidiaries. The obligations of the Company to
consummate the Stock Purchase are further subject to the fulfillment of
various conditions, including, among others, the accuracy of all of the
representations and warranties of VS&A and VS&A-T/SF set forth in the
Purchase Agreement, and the performance and compliance by VS&A and VS&A-
T/SF with all of their covenants contained in the Purchase Agreement. An
election by the Company not to consummate the Stock Purchase because of the
failure of any such conditions could result in the Offer being terminated.
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Company Plans. After the closing date of the Offer, the holder of each
outstanding employee stock option to purchase Shares (a "Company Option")
granted under the Company's 1994 Incentive Stock Plan or the Company's
Incentive Stock Option Plan (collectively, the "Option Plans") will have
the right to receive an amount equal to (i) the product of the number of
Shares which are issuable upon exercise of such Company Option, multiplied
by the Purchase Price, less (ii) the aggregate exercise price of such
Company Option. The Option Plans will terminate as of the closing date of
the Offer.
Use of Proceeds. The Company has agreed to use the proceeds received by
the Company from the Stock Purchase and the Debt Financing to satisfy its
obligations to pay for all Shares validly tendered pursuant to the Offer
and not withdrawn prior to the Expiration Date of the Offer and to make the
payments in respect of the Company Options and, if there remain any
proceeds after such obligations are fully satisfied, for general corporate
purposes.
Board of Directors. On the closing date of the Offer, VS&A or VS&A-T/SF
will be entitled to designate for appointment or election each of the
members of the Board of Directors of the Company. The Company has agreed to
obtain the resignation of each member of the Board of Directors immediately
prior to the closing of the Offer.
Second-Step Transaction. As soon as practicable after the closing date of
the Offer, VS&A-T/SF has agreed to cause the Company to effect a merger or
reverse stock split, pursuant to which each Share not tendered in the Offer
(other than Shares owned by VS&A-T/SF, Fir Tree and, possibly, Shares held
by stockholders who perfect appraisal rights) will be converted into the
right to receive an amount equal to the Purchase Price, payable to the
holder, without interest, upon surrender of the certificate formerly
representing that Share.
Representations and Warranties and Covenants. The Purchase Agreement
contains various representations and warranties of the parties thereto,
including, among others, representations by the Company that (i) all of the
outstanding Shares of the Company's capital stock are, and all shares which
may be issued pursuant to the exercise of outstanding Company Options will
be, when issued in accordance with the respective terms thereof, duly
authorized, validly issued, fully paid and non-assessable, (ii) the shares
to be issued pursuant to the Stock Purchase will be, when issued in
accordance with the Purchase Agreement, duly authorized, validly issued,
fully paid and non-assessable, and (iii) all of the outstanding shares of
capital stock of each of the Company's subsidiaries are beneficially owned
by either the Company or one of its subsidiaries free and clear of all
liens, charges, claims or encumbrances. The Purchase Agreement also
contains certain other representations and warranties relating to the
Company's organization, employee benefit plans, tax matters, SEC filings,
financial statements, litigation, title to properties, intellectual
property, environmental compliance and material contracts. The Company has
agreed that prior to the consummation of the Offer, the businesses of the
Company and its subsidiaries will be conducted in the ordinary course and
each shall use reasonable efforts to maintain its existing business
relationships. Specifically, the Company has agreed that it will not, among
other things, without the consent of VS&A, (i) amend its certificate of
incorporation or by-laws, (ii) sell, transfer or pledge any treasury stock
of the Company or any capital stock of any of its subsidiaries beneficially
owned by it, (iii) split, combine or reclassify the outstanding Shares or
any outstanding capital stock of any of its subsidiaries, (iv) declare or
pay any dividend or distribution or issue any additional Shares or
securities convertible into Shares or shares of capital stock of its
subsidiaries, other than Shares reserved for issuance pursuant to the
exercise of Company Options, (v) transfer, sell or encumber any material
assets other than in the ordinary course of business, or incur any material
indebtedness other than in the ordinary course of business, (vi) modify or
terminate any of its material contracts, except in the ordinary course of
business, or (vii) enter into an agreement to do any of the foregoing, or
to authorize or announce an intention to do any of the foregoing.
In addition, except to the extent required by the fiduciary duties of the
Board of Directors, the Company has agreed to refrain from (i) soliciting,
initiating or encouraging any discussions or negotiations with, or
providing any information to, any person concerning any merger, sale of
material assets, sale of shares of capital stock or similar transaction
involving the Company, or (ii) entering into any agreements with respect to
the foregoing.
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Each party to the Purchase Agreement has agreed to use its best efforts
to do or cause to be done all things necessary or advisable to consummate
the transactions contemplated by the Purchase Agreement in accordance with
all applicable laws.
Indemnification and Insurance. The Purchase Agreement provides that, for
a period of five years following the closing date of the Offer, VS&A will
cause the Company to retain all provisions of the Company's certificate of
incorporation as in effect on the date of the Purchase Agreement respecting
the limitation of liabilities of directors and officers of the Company and
will indemnify each present and former officer and director of the Company
and its subsidiaries, and persons who become any of the foregoing prior to
the closing date of the Offer, against all losses or liability arising out
of actions occurring at or prior to the closing date of the Offer to the
full extent permitted under Delaware law, subject to the terms of the
Company's certificate of incorporation or by-laws, as in effect on the date
of the Purchase Agreement.
Section 145 of the Delaware General Corporation Law (the "DGCL") permits
a corporation to indemnify officers, directors, employees and agents for
actions taken in good faith and in a manner they reasonably believed to be
in, or not opposed to, the best interests of the corporation, and with
respect to any criminal action, which they had no reasonable cause to
believe was unlawful. Section 145 provides that a corporation may advance
expenses of defense (upon receipt of a written undertaking to reimburse the
corporation if indemnification is not appropriate) and must reimburse a
successful defendant for expenses, including attorneys' fees, actually and
reasonably incurred, and permits a corporation to purchase and maintain
liability insurance for its directors and officers. Section 145 provides
that indemnification may not be made for any claim, issue or matter as to
which a person has been adjudged by a court of competent jurisdiction,
after exhaustion of all appeals therefrom, to be liable to the corporation,
unless and only to the extent a court determines that the person is
entitled to indemnity for such expenses, despite the adjudication of
liability, as the court deems proper.
The Purchase Agreement also provides that VS&A shall, or shall cause the
Company to, maintain the Company's existing officers' and directors'
liability insurance for a period of not less than three years after the
closing date of the Offer; provided, that VS&A may substitute therefor
policies of substantially equivalent coverage and amounts. If the existing
insurance expires or is cancelled during such period, VS&A will use
reasonable efforts to obtain substantially similar insurance coverage,
provided, that in no event will the Company be required to pay aggregate
premiums for insurance in excess of 110% of the aggregate premiums paid by
the Company in 1996.
Termination; Amendment; Expenses. The Purchase Agreement provides that it
may be terminated prior to the closing of the Offer: (i) by mutual consent
of VS&A and the Company; (ii) by either the Company or VS&A if (a) any
governmental entity shall have issued an order or taken any other action
which permanently restrains or otherwise prohibits the acceptance for
payment of Shares pursuant to the Offer or the Second-Step Transaction, or
prohibits the Stock Purchase or the Second-Step Transaction and such order
or other action shall have become final and non-appealable, (b) the Minimum
Condition is not satisfied, or (c) the Offer shall not have been
consummated before October 31, 1997; (iii) by the Company if (a) the Board
of Directors of the Company shall have withdrawn or modified its approval
of the Purchase Agreement and the transactions contemplated thereby by
reason of the receipt of a proposal or offer to acquire all or a
substantial part of the business and properties of the Company or any of
its subsidiaries or any capital stock of the Company or any of its
subsidiaries, whether by merger, tender offer, exchange offer, sale of
assets or similar transactions involving the Company or any subsidiary, or
any division or operating or principal business unit of the Company (an
"Acquisition Proposal") and such entity or group has on an unsolicited
basis submitted a bona fide written proposal to the Board of Directors of
the Company relating to any such transaction which the Board of Directors
determines in good faith, based on advice of its financial advisors,
represents a superior transaction to the Offer and is reasonably capable of
being consummated, and in the opinion of the Board of Directors of the
Company, only after receipt of written advice from independent legal
counsel to the Company, the failure to engage in such discussions or
negotiations would cause the Board of Directors to violate its fiduciary
duties to the Company's stockholders under applicable law (a "Superior
Proposal") or the Board shall have recommended or
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approved such Superior Proposal and in any such case the Company has
complied with all notice provisions of the Purchase Agreement and made
simultaneous payment of a termination fee, as described below, or (b) VS&A
or VS&A-T/SF shall have breached in any material respect any of their
respective representations, warranties, covenants or other agreements,
which cannot be cured within 30 days; and (iv) by VS&A if (a) the Company
shall have failed to commence the Offer within 15 business days following
the date of the initial public announcement of the Offer, (b) the Company
shall have breached in any material respect any of its representations,
warranties, covenants or other agreements, which cannot be cured within 30
days, or (c) the Company is entitled to terminate the Offer as a result of
its Board of Directors having withdrawn or modified its approval of the
Purchase Agreement and the transactions contemplated thereby by reason of
the receipt of another Superior Proposal or the Company shall have entered
into any agreement with respect to any Superior Proposal in accordance with
the Purchase Agreement. The Purchase Agreement may also be amended,
modified or supplemented in any respect by written agreement of the parties
thereto.
In addition, the Purchase Agreement provides that, under certain
circumstances, VS&A will be entitled to a termination fee of $5,000,000
plus an amount equal to $1,000,000 to reimburse VS&A for its costs and
expenses in connection with the Offer. Such termination fee and
reimbursement amounts become payable to VS&A if the Purchase Agreement is
terminated because (i) the Company has terminated the Purchase Agreement by
reason of the receipt of another Superior Proposal or the Board shall have
recommended or approved such Superior Proposal, (ii) VS&A has terminated
the Purchase Agreement because the Company was entitled to terminate the
Offer as a result of its Board of Directors having withdrawn or modified
its approval of the Purchase Agreement and the transactions contemplated
thereby by reason of the receipt of another Superior Proposal or the
Company shall have entered into any agreement with respect to any Superior
Proposal in accordance with the Purchase Agreement, or (iii) the Company or
VS&A has terminated the Purchase Agreement because the Minimum Condition
has not been satisfied and (a) prior to the termination of the Purchase
Agreement, an Acquisition Proposal at a price and on terms at least as
favorable to the stockholders of the Company as the Offer shall have been
made, and (b) within one year of such termination the Company consummates
such Acquisition Proposal or within six months of such termination the
Company enters into an agreement for a different Acquisition Proposal which
is consummated within one year of such termination, in either case at a
price and on terms at least as favorable to the stockholders of the Company
as the Offer. No termination fee or expense reimbursement is payable if
VS&A or VS&A-T/SF was in material breach of its representations, warranties
or obligations under the Purchase Agreement at the time of its termination.
The effect of such provisions of the Purchase Agreement is to allow the
Company to pursue an Acquisition Proposal only in the event such proposal
would provide greater than $6,000,000 in value above the Offer.
Concurrently with the execution of the Purchase Agreement certain
stockholders of the Company have entered into separate Stockholder Agreements
with VS&A and VS&A-T/SF (collectively, the "Stockholder Agreements"). Pursuant
to their respective Stockholder Agreements, each of such stockholders has
agreed, among other things, to: (i) tender all Shares owned by such person
pursuant to the Offer, (ii) vote such Shares against any Acquisition Proposal
and any action which would impede the transactions contemplated by the
Stockholder Agreements or the Purchase Agreement, provided, that, in either
such case, such person will not be required to take such action to the extent
that the taking of such action would violate a fiduciary duty owed by such
person in any capacity, (iii) cease all participation in activities with
respect to any Acquisition Proposal, except to the extent the Company is
permitted to participate in such activities pursuant to the Purchase
Agreement, (iv) not transfer any Shares owned by such person, and (v) pay
certain amounts to VS&A upon certain dispositions of such Shares by such
person in the event the Offer is not consummated. Stockholders who have
entered into the Stockholder Agreements own, in the aggregate, 1,121,472
Shares, or 33.7% of the Shares outstanding.
The foregoing summaries of the Purchase Agreement and the Stockholder
Agreements are qualified in their entirety by reference to the complete text
of such agreements, copies of which are attached to the Company's
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issuer tender offer statement on Schedule 13E-4, and which may be obtained
from the SEC in the same manner as set forth in "The Offer--Section 8."
CERTAIN EFFECTS OF THE OFFER
If consummated, the Offer alone, or the Offer followed by the Second-Step
Transaction, would result in: (i) the delisting of the Shares on the AMEX,
(ii) the Shares becoming eligible for termination of registration pursuant to
Section 12(g)(4) of the Exchange Act, (iii) a change in the composition of the
present board of directors and executive officers of the Company, and (iv) a
change in the capitalization of the Company.
The trading of the Shares is currently reported on the AMEX. Following the
Offer, the Shares will likely be delisted from the AMEX and deregistered under
the Exchange Act. As of September 4, 1997, there were 1,611,472 Shares
publicly held (for purposes of the AMEX) and 273 holders of record of the
outstanding Shares. If the purchase of Shares is made pursuant to the Offer,
the Shares may no longer meet the requirements for continued listing on the
AMEX. Pursuant to the AMEX's published guidelines, shares of common stock are
not eligible to be included for listing if, among other things, the number of
shares publicly held falls below 250,000, the number of record and beneficial
holders of shares falls below 300 or the aggregate market value of such
publicly held shares is less than $1,000,000. Shares held directly or
indirectly by an officer or director of the issuer or by any beneficial owner
of more than 5% of the shares of the issuer will ordinarily not be considered
as being publicly held for this purpose. In the event the Shares were no
longer listed on the AMEX, price quotations might still be available from
other sources. The extent of the public market for the Shares and the
availability of such quotations would, however, depend upon the number of
holders of Shares remaining at such time, the interest in maintaining a market
in the Shares on the part of securities firms, the termination of registration
under the Exchange Act as described below and other factors.
The Shares are currently "margin securities" under the rules of the Board of
Governors of the Federal Reserve System (the "Federal Reserve Board"). Among
other things, this has the effect of allowing brokers to extend credit on the
collateral of such Shares. Depending upon factors similar to those described
above regarding listing and market quotations, it is likely that, following
the tender and purchase of the Shares pursuant to the Offer, the Shares will
no longer constitute "margin securities" for purposes of the Federal Reserve
Board's margin regulations. In such event, Shares could no longer be used as
collateral for margin loans made by brokers.
The Shares are currently registered under the Exchange Act, which requires,
among other things, that the Company furnish certain information to its
stockholders and to the SEC and comply with the SEC's proxy rules in
connection with meetings of the Company's stockholders. Registration of the
Shares under the Exchange Act will be terminated upon application by the
Company to the SEC if the Shares are not listed on a national securities
exchange and there are fewer than 300 holders of record of the Shares.
The termination of the registration of the Shares under the Exchange Act
would substantially reduce the information required to be furnished by the
Company to its stockholders and to the SEC and would render inapplicable
certain provisions of the Exchange Act, including requirements that the
Company file periodic reports (including financial statements), the
requirements of Rule 13e-3 under the Exchange Act with respect to "going
private" transactions, requirements that the Company's officers, directors and
ten-percent stockholders file certain reports concerning ownership of the
Company's equity securities and provisions that any profit by such officers,
directors and stockholders realized through purchases and sales of the
Company's equity securities within any six-month period may be recaptured by
the Company. In addition, the ability of "affiliates" of the Company and other
persons to dispose of Shares which are "restricted securities" under Rule 144
under the Securities Act of 1933, as amended (the "Securities Act"), may be
impaired or eliminated. If registration of the Shares under the Exchange Act
were terminated, the Shares would no longer be "margin securities" or eligible
for listing on the AMEX.
Except as disclosed in this section and elsewhere in this Offer to Purchase,
the Company has no other present plans or proposals that relate to or would
result in (i) the acquisition by any person of additional securities
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of the Company, or the disposition of securities of the Company, (ii) any
extraordinary corporate transaction, such as a merger, reorganization,
liquidation or sale or transfer of a material amount of assets, involving the
Company, (iii) any change in the present Board of Directors of the Company or
management of the Company, including any plan or proposal to change the number
or term of the directors, to fill any existing vacancy on the Board of
Directors or to change any material term of the employment contract of any
executive officer, (iv) any material change in the present dividend policy or
indebtedness or capitalization of the Company, (v) any other material change
in the Company's corporate structure or business, or (vi) any change in the
Company's certificate of incorporation, bylaws or instruments corresponding
thereto or any other actions which may impede the acquisition of control of
the Company by any person.
POTENTIAL CONFLICTS OF INTEREST
Stockholders should be aware in considering their decision to participate in
the Offer that each of the members of the Board of Directors has, to some
degree, interests which may present such directors with an actual or potential
conflict of interest in connection with the Offer. As of September 4, 1997,
the directors and executive officers as a group beneficially owned 1,276,768
Shares, or 35.4% of the Shares, which includes Shares issuable upon exercise
of stock options. The Company has been informed by its directors and executive
officers that they and their affiliates intend to tender all of the Shares
owned by them pursuant to the Offer. Certain of the directors and officers
have agreed to do so pursuant to the Stockholder Agreements, as discussed
above. In addition, on the closing date of the Offer, the Company will enter
into consulting agreements with (i) Howard G. Barnett, Jr., Chairman,
President and Chief Executive Officer of the Company, for a period of one
year, extendable at the election of the Company for an additional year, at a
rate equal to his current base salary, (ii) Robert E. Craine, Jr., Executive
Vice President of the Company, for a period of 90 days at a rate equal to his
current base salary, and (iii) J. Gary Mourton, Senior Vice President-Finance
and Chief Financial Officer of the Company, for a period of one year, the
first six months at a rate equal to his current base salary and the second six
months at a rate equal to one-half of his current base salary. Messrs. Craine,
Mourton and Stuart P. Honeybone, Vice President of the Company, also are
parties to a special bonus plan which, upon consummation of the Offer, enable
them to share, pro rata with their respective salaries, a bonus pool equal to
$1,637,500. Messrs. Barnett, Craine, Mourton and Honeybone are each entitled
to participate in a severance plan whereby each person will be paid one year's
salary for every 10 years of service with the Company, plus an amount equal to
all bonus and overtime wages paid for 1996.
POSITION OF THE BOARD OF DIRECTORS
Over the past several months, in the pursuit of a possible sale of the
Company, the Offer and the transactions contemplated under the Purchase
Agreement were the most certain and highest valued transactions proposed to
the Board of Directors of the Company. See "Special Factors--Background of the
Offer." The Board of Directors, based on the recommendation of its advisors
and after considering the purposes and effects of the Offer and other factors,
has concluded that the Offer is fair to, and in the best interest of, the
stockholders of the Company and has approved the making of the Offer. The
Board of Directors considered that the Offer is being made available to all
stockholders on the same basis and each such stockholder may choose whether or
not to tender any Shares pursuant to the Offer. In approving making the Offer
and determining that the Offer is fair to, and in the best interest of, the
stockholders of the Company, the Board of Directors consulted with its legal
and financial advisors as well as the Company's management and considered
numerous factors, including but not limited to (i) the businesses, operations,
capital structure, earnings, properties and prospects of the Company and its
subsidiaries, as well as the risks associated therewith, (ii) the fact that
the Offer will provide stockholders with an opportunity to receive a fair
price for their tendered Shares, (iii) recent market prices for the Shares as
well as market prices for the past several years, and (iv) the written opinion
of Prudential Securities dated August 15, 1997, that, based upon the matters
described therein, as of the date of such opinion, the consideration to be
received by the stockholders in the Offer and the Second-Step Transaction is
fair, from a financial point of view, to the stockholders of the Company. In
light of the number and variety of factors that the Board of Directors
considered in connection with its evaluation of the Offer, it did not find it
practicable to, and did not, quantify or otherwise assign relative weights to
these factors.
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THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY DETERMINED, AFTER
GIVING CAREFUL CONSIDERATION TO A NUMBER FACTORS, INCLUDING THE WRITTEN
OPINION DATED AUGUST 15, 1997 OF THE FINANCIAL ADVISOR OF THE COMPANY, TO THE
EFFECT THAT, AND SUBJECT TO THE LIMITATIONS THEREIN, THE CONSIDERATION TO BE
RECEIVED BY THE COMPANY'S STOCKHOLDERS IN THE OFFER AND THE SECOND-STEP
TRANSACTION IS FAIR TO SUCH STOCKHOLDERS FROM A FINANCIAL POINT OF VIEW, THAT
THE OFFER DESCRIBED HEREIN IS FAIR TO, AND IN THE BEST INTERESTS OF, THE
STOCKHOLDERS OF THE COMPANY AND RECOMMENDS THAT STOCKHOLDERS ACCEPT THE OFFER
AND TENDER THEIR SHARES IN THE OFFER.
OPINION OF FINANCIAL ADVISOR
Pursuant to the Engagement Letter, the Board of Directors of the Company
retained Prudential Securities to act as its financial advisor and to render
its opinion to the Company's Board of Directors as to the fairness of the
consideration to be received by the stockholders of the Company pursuant to
the Offer, from a financial point of view, to the stockholders of the Company.
See "Special Factors--Background of the Offer."
On August 13, 1997, Prudential Securities advised the Board of Directors of
the Company that, as of such date and assuming that definitive agreements
would be executed that reflect the terms of the Offer as described by the
Company's senior management to the Board of Directors and that such agreements
would provide for a subsequent transaction in which stockholders who did not
tender their Shares in the Offer would ultimately receive the same
consideration that was paid pursuant to the Offer, Prudential Securities was
of the view that the consideration to be received by the stockholders in the
Offer and the Second-Step Transaction was fair, from a financial point of
view, to the Company's stockholders. The Purchase Agreement, reflecting such
terms, was executed on August 15, 1997. Prudential Securities confirmed its
advice by a written opinion dated August 15, 1997, which has not been
withdrawn as of the date hereof, to the effect that the consideration to be
received by the stockholders of the Company pursuant to the Offer and the
Second-Step Transaction is fair from a financial point of view to the
Company's stockholders (the "Opinion").
THE SUMMARY OF THE OPINION SET FORTH IN THIS OFFER TO PURCHASE IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO THE FULL TEXT OF SUCH OPINION ATTACHED AS
ANNEX A TO THIS OFFER TO PURCHASE. THE COMPANY'S STOCKHOLDERS ARE URGED TO,
AND SHOULD, READ THE OPINION CAREFULLY IN ITS ENTIRETY IN CONJUNCTION WITH
THIS OFFER TO PURCHASE FOR THE ASSUMPTIONS MADE, MATTERS CONSIDERED AND LIMITS
OF THE REVIEW UNDERTAKEN BY PRUDENTIAL SECURITIES. THE OPINION ADDRESSES ONLY
THE FAIRNESS OF THE CONSIDERATION TO BE RECEIVED BY THE STOCKHOLDERS OF THE
COMPANY PURSUANT TO THE OFFER AND THE SECOND-STEP TRANSACTION FROM A FINANCIAL
POINT OF VIEW AND DOES NOT CONSTITUTE A RECOMMENDATION TO THE STOCKHOLDERS OF
THE COMPANY AS TO WHETHER SUCH STOCKHOLDERS SHOULD TENDER THEIR SHARES IN THE
OFFER.
As set forth in the Opinion, Prudential Securities met with members of the
senior management of the Company to discuss the prospects for the businesses
of the Company and its subsidiaries. In connection with Prudential Securities'
review and analysis and in arriving at the Opinion, Prudential Securities
relied upon the accuracy and completeness of the financial and other
information provided to it by the Company and did not undertake any
independent verification of such information or undertake an independent
appraisal of the assets or liabilities of the Company. With respect to the
financial forecasts provided to Prudential Securities by the Company,
Prudential Securities assumed that such forecasts (and assumptions and bases
therefor) had been reasonably prepared and represented management's best
currently available estimates as to the future financial performance of the
Company. Further, the Opinion is necessarily based on economic, financial and
market conditions as they existed and could be evaluated as of the date of the
Opinion.
In connection with its engagement and the preparation of the Opinion,
Prudential Securities was not authorized by the Company or its Board of
Directors to solicit, nor has Prudential Securities solicited, indications of
interest from third parties for the acquisition of the Company. However,
Prudential Securities had been
11
<PAGE>
retained to assist in soliciting indications of interest from third parties
for a sale transaction involving TISI. No other restrictions were imposed by
the Company's Board of Directors upon Prudential Securities with respect to
the investigations made or procedures followed by Prudential Securities in
rendering the Opinion. The Opinion does not address nor should it be construed
to address the relative merits of the Offer and the Second-Step Transaction
with any alternative business strategy that may be available to the Company.
In conducting its analysis and arriving at the Opinion, Prudential
Securities reviewed such materials and considered such financial and other
factors as it deemed relevant under the circumstances, including: (i) a draft
dated August 14, 1997, of the Purchase Agreement, (ii) a draft dated August
15, 1997, of the Stockholder Agreements, (iii) certain publicly available
historical financial and operating data concerning the Company, including the
Annual Report to Stockholders and Annual Report on Form 10-K for the year
ended December 31, 1996, and the Quarterly Report on Form 10-Q for the quarter
ended June 30, 1997, (iv) certain information of the Company, including
financial forecasts relating to the businesses, earnings, cash flow, assets
and prospects of the Company and its subsidiaries prepared by the management
of the Company and its subsidiaries, (v) publicly available financial,
operating and stock market data concerning certain companies engaged in
businesses Prudential Securities deemed relatively comparable to the Company
or otherwise relevant to its inquiry, (vi) the financial terms of certain
recent transactions Prudential Securities deemed relevant to its inquiry,
(vii) the commitments for the financing of the Offer arranged by VS&A with
First Union National Bank, (viii) the historical market prices and trading
volumes of the Shares, and (ix) such other financial studies, analyses and
investigations that Prudential Securities deemed appropriate.
In arriving at the Opinion, Prudential Securities performed a variety of
financial analyses, including those summarized herein. The summary set forth
below of the analyses presented to the Company's Board of Directors at the
August 13, 1997, meeting does not purport to be a complete description of the
analyses performed. The preparation of a fairness opinion is a complex process
that involves various determinations as to the most appropriate and relevant
methods of financial analysis and the application of these methods to the
particular circumstance and, therefore, such an opinion is not necessarily
susceptible to partial analysis or summary description. Prudential Securities
believes that its analysis must be considered as a whole and that selecting
portions thereof or portions of the factors considered by it, without
considering all analyses and factors, could create an incomplete view of the
evaluation process underlying the Opinion. Prudential Securities made numerous
assumptions with respect to industry performance, general business, economic,
market and financial conditions and other matters, many of which are beyond
the control of the Company. Any estimates contained in Prudential Securities'
analyses are not necessarily indicative of actual values or future results,
which may be significantly more or less favorable than suggested by such
analyses. Additionally, estimates of the values of businesses and securities
do not purport to be appraisals or necessarily reflect the prices at which
businesses or securities may be sold. Accordingly, such analyses and estimates
are inherently subject to substantial uncertainty. Subject to the foregoing,
the following is a summary of the material financial analyses presented by
Prudential Securities to the Company's Board of Directors on August 13, 1997.
Comparable Company Analysis. A comparable company analysis was employed by
Prudential Securities to establish implied ranges for the per share valuation
for the Company's Shares. Prudential Securities analyzed publicly-available
historical and projected financial results, including multiples of current
stock price to latest twelve months ("LTM") earning per share ("LTM EPS"),
projected calendar year 1997 earnings per share ("1997 EPS") and projected
calendar year 1998 earnings per share ("1998 EPS"), aggregate value (defined
as current stock price multiplied by the number of shares outstanding plus net
indebtedness) to LTM EBITDA (earnings before interest, taxes, depreciation and
amortization) and LTM revenues of certain companies considered by Prudential
Securities to be reasonably comparable to the Company. The companies analyzed
included: American Business Information, Inc., Ceridian Corp., Equifax Inc.,
M/A/R/C Inc., Ovid Technologies, Inc., Primark Corp., and Sabre Group Holdings
(the "Comparable Companies"). All of the trading multiples of the Comparable
Companies were based on closing stock prices on August 7, 1997 (the "August
7th Closing Price"), and all of the earnings per share estimates were
published by First Call, an on-line data service available to subscribers
which compiles estimates developed by research analysts. The estimates
published by First Call were not prepared in connection with the Offer or at
the request of Prudential Securities.
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<PAGE>
The Comparable Companies were found to have an August 7th Closing Price
estimated to be within a range of 17.8x to 28.4x LTM EPS, 16.1x to 26.2x 1997
EPS and 13.6x to 20.3x 1998 EPS, and an aggregate value estimated to be within
a range of 7.3x to 18.0x LTM EBITDA and 1.2x to 5.0x LTM revenues. Applying
such multiples to the Company's LTM EPS, 1997 EPS, 1998 EPS, LTM EBITDA and
LTM revenues resulted in an implied range for the per share valuation for the
Company's Shares of $29.05 to $61.87 per Share. The Offer value per Share to
the Company's stockholders is within the range for the Offer value per share
implied by Prudential Securities' comparable company analysis.
None of the companies utilized in the above analysis for comparative
purposes is, of course, identical to the Company. Accordingly, a complete
analysis of the results of the foregoing calculations cannot be limited to a
quantitative review of such results and involves complex considerations and
judgments concerning differences in financial and operating characteristics of
the Comparable Companies and other factors that could affect the public
trading value of the Comparable Companies as well as that of the Company.
Comparable Transactions Analysis. Prudential Securities also analyzed the
consideration paid in several recent merger and acquisition transactions
deemed by Prudential Securities to be reasonably similar to the Offer and the
Second-Step Transaction, and considered the multiple of the transaction value
(defined as the purchase price paid for the acquired entity) to the acquired
entity's LTM net income and aggregate transaction value (defined as the
transaction value plus the acquired entity's net indebtedness) and to the
acquired entity's LTM EBITDA and revenues. The transactions considered were
the combinations of: (i) American List Corporation and Snyder Communications,
Inc., (ii) TRW's Information and Services Unit and Experian Corp., (iii)
Blenheim plc and United News & Media plc, (iv) The MEDSTAT Group, Inc. and The
Thomson Corp., (v) MDL Info. Systems, Inc. and Reed Elsevier plc, and (vi)
Triad Systems and Hicks Muse/Cooperative Computing Inc. (the "Comparable
Transactions"). The Comparable Transactions were found to imply for the
acquired entity a transaction value within a range of 23.3x to 44.2x LTM net
income, an aggregate transaction value within a range of 10.5x to 19.8x LTM
EBITDA and 1.4x to 5.8x LTM revenues. Applying such multiples to the Company's
LTM net income, LTM EBITDA and LTM revenues resulted in an implied range for
the per share valuation for the Company's Shares of $31.81 to $80.65 per
share. The Offer value per Share to the Company's stockholders is within the
range for the Offer value per share implied by Prudential Securities'
comparable transaction analysis.
None of the acquired entities utilized in the above analysis for comparative
purposes is, of course, identical to the Company. Accordingly, a complete
analysis of the results of the foregoing calculations cannot be limited to a
quantitative review of such results and involves complex considerations and
judgments concerning differences in financial and operating characteristics of
the acquired entities and other factors that could affect the consideration
paid for each of the acquired entities as well as that of the Company.
Discounted Cash Flow Analysis. A discounted cash flow analysis was employed
by Prudential Securities to establish an implied per share valuation for the
Company's Shares. Prudential Securities calculated the net present value of
the Company's projected four year stream of unlevered free cash flows and
projected fiscal year 2001 terminal values, which, in turn, were based on a
range of multiples of the Company's projected fiscal year 2001 EBITDA. The
Company provided the financial projections that Prudential Securities utilized
in this analysis. Prudential Securities applied discount rates ranging from
18.5% to 20.0% and multiples of fiscal year 2001 EBITDA ranging from 9.0x to
12.0x, resulting in an implied per share valuation of the Company's Shares of
$39.02 to $52.40. The Offer value per Share to the Company's stockholders is
within the range for the Offer value per share implied by Prudential
Securities' discounted cash flow analysis.
Projected financial and other information concerning the Company are not
necessarily indicative of future results. All projected financial information
is subject to numerous contingencies, many of which are beyond the control of
management of the Company.
Stock Trading History. Prudential Securities also analyzed the history of
the trading prices and volume for the Company's Shares. Prudential Securities
observed that between July 1, 1996, and June 30, 1997, the day prior to the
announcement of the Company's intention to commence a self-tender offer for
the Shares of the
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Company, the Shares traded in the range of $18.13 and $28.25 a share.
Additionally, Prudential Securities noted the Offer value per Share of $40.25
represents a premium paid of 49.1% over the Shares closing price on June 23,
1997 (one week prior to the announcement of the Company's intention to
commence a self-tender offer).
The Company selected Prudential Securities as its financial advisor because
it is a nationally recognized investment banking firm engaged in the valuation
of businesses and their securities in connection with mergers and acquisitions
and for other purposes and has substantial experience in transactions similar
to the Offer. The Engagement Letter with Prudential Securities provides that
the Company will pay Prudential Securities an advisory fee equal to: (a)
$250,000 due upon the signing of the Purchase Agreement, and (b) an additional
fee, which will be reduced by any amounts paid under the preceding clause (a),
equal to: (i) 1.0% of the consideration received by the Company's stockholders
upon consummation of the Offer on the first $37.00 per share of the
consideration received (adjusted to reflect any stock splits, stock dividends
or extraordinary stock dividends or distributions), plus (ii) 3.0% of the
amount by which the consideration, on a per share basis, exceeds $37.00. In
addition, the Engagement Letter with Prudential Securities provides that the
Company will reimburse Prudential Securities for its out-of-pocket expenses
and will indemnify Prudential Securities and certain related persons against
certain liabilities, including liabilities under securities laws, arising out
of its engagement. Mark A. Leavitt, a Managing Director of Prudential
Securities, has been a member of the Board of Directors of the Company since
1989.
THE OFFER
1. NUMBER OF SHARES; EXTENSION OF THE OFFER
Upon the terms and subject to the conditions of the Offer, the Company will
accept for payment (and will thereby purchase) all of its outstanding Shares
or such lesser number of Shares, but not less than 1,600,000 Shares, as are
properly tendered (and not withdrawn in accordance with "The Offer--Section
3") before the Expiration Date at the Purchase Price. The term "Expiration
Date" means 12:00 Midnight, New York City time, on Monday, October 6, 1997,
unless and until the Company shall have extended the period of time for which
the Offer is open, in which event the term "Expiration Date" shall refer to
the latest time and date at which the Offer, as so extended by the Company,
shall expire. For a description of the Company's rights to extend the period
of time during which the Offer is open and to delay, terminate or amend the
Offer, see "The Offer--Section 14." See also "The Offer--Section 5."
The Company reserves the right, in its sole discretion, at any time or from
time to time, to extend the period of time during which the Offer is open by
giving oral or written notice of such extension to the Depositary and making a
public announcement thereof. See "The Offer--Section 14." There can be no
assurance, however, that the Company will exercise its right to extend the
Offer.
The Offer is conditioned upon, among other things, (a) at least 1,600,000
Shares being validly tendered and not withdrawn prior to the Expiration Date
and (b) the Company being satisfied, in its sole discretion, that the Company
has obtained sufficient financing to enable it to consummate the Offer. The
Offer is also subject to certain other conditions. See "The Offer--Section 5."
All Shares purchased pursuant to the Offer will be purchased at the Purchase
Price, net to the seller in cash. If (a) the Company (i) increases or
decreases the price to be paid for Shares or (ii) decreases the number of
Shares being sought, and (b) the Offer is scheduled to expire at any time
earlier than the expiration of a period ending on the 10th business day from
and including the date that notice of such increase or decrease is first
published, sent or given in the manner specified in "The Offer--Section 15,"
the Offer will be extended until the expiration of such 10 business day
period. For the purposes of the Offer, a "business day" means any day other
than a Saturday, Sunday or federal holiday and consists of the time period
from 12:01 A.M. through 12:00 Midnight, New York City time.
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2. PROCEDURE FOR TENDERING SHARES
Proper Tender of Shares. For Shares to be properly tendered pursuant to the
Offer:
(a) the certificates for such Shares (or confirmation of receipt of such
Shares pursuant to the procedure for book-entry transfer set forth below),
together with a properly completed and duly executed Letter of Transmittal
(or a facsimile copy thereof) with any required signature guarantees, and
any other documents required by the Letter of Transmittal, must be received
before the Expiration Date by the Depositary at one of its addresses set
forth on the back cover of this Offer to Purchase; or
(b) the tendering stockholder must comply with the guaranteed delivery
procedure set forth below.
Signature Guarantees and Methods of Delivery. No signature guarantee is
required on the Letter of Transmittal if the Letter of Transmittal is signed
by the registered owner of the Shares (which term, for purposes of this
Section 2, includes any participant in The Depository Trust Company, the
Midwest Securities Trust Company or the Philadelphia Depository Trust Company
(collectively, the "Book-Entry Transfer Facilities") whose name appears on a
security position listing as the owner of the Shares) tendered therewith, and
payment and delivery are to be made directly to such registered owner at such
owner's address shown on the records of the Company, or if Shares are tendered
for the account of a financial institution (including most banks, savings and
loan associations, and brokerage houses) that is a participant in the
Securities Transfer Agents Medallion Program, the New York Stock Exchange
Medallion Signature Program or the Stock Exchange Medallion Program (each such
entity being hereinafter referred to as an "Eligible Institution"). In all
other cases, all signatures on the Letter of Transmittal must be guaranteed by
an Eligible Institution. See Instruction 1 of the Letter of Transmittal. If a
certificate representing Shares is registered in the name of a person other
than the person signing a Letter of Transmittal, or if payment is to be made,
or certificates for Shares not purchased or tendered are to be issued, to a
person other than the registered owner, the certificate must be endorsed or
accompanied by an appropriate stock power, in either case signed exactly as
the name of the registered owner appears on the certificate, with the
signature on the certificate or stock power guaranteed by an Eligible
Institution. In all cases, payment for Shares tendered and accepted for
payment pursuant to the Offer will be made only after timely receipt by the
Depositary of certificates for such Shares (or a timely confirmation of a
book-entry transfer of such Shares into the Depositary's account at one of the
Book-Entry Transfer Facilities), a properly completed and duly executed Letter
of Transmittal (or a facsimile thereof) and any other documents required by
the Letter of Transmittal.
The method of delivery of all documents, including stock certificates, the
Letter of Transmittal and any other required documents, is at the election and
risk of the tendering stockholder. If delivery is by mail, registered mail
with return receipt requested, properly insured, is recommended.
Federal Backup Withholding. Absent an exemption applying under the
applicable law concerning "backup withholding" of federal income tax, the
Depositary will be required to withhold, and will withhold, 31% of the gross
proceeds otherwise payable to a stockholder (or other payee) pursuant to the
Offer unless the stockholder (or other payee) provides such person's tax
identification number (social security number or employer identification
number), certifies that such number is correct and certifies that such person
is not subject to backup federal income tax withholding. Each tendering
stockholder, other than a non-corporate foreign stockholder, should complete
and sign the main signature form and the Substitute Form W-9 included as part
of the Letter of Transmittal so as to provide the information and
certifications necessary to avoid backup withholding, unless an applicable
exemption exists and is proved in a manner satisfactory to the Company and the
Depositary. Non-corporate foreign stockholders generally should complete and
sign a Form W-8, Certificate of Foreign Status (a copy of which may be
obtained from the Depositary), in order to avoid backup withholding. Backup
withholding is not an additional tax, and any taxes so withheld may be claimed
as a credit against such stockholder's federal income tax liability.
For a discussion of certain other federal income tax consequences of the
Offer, see "The Offer--Section 10."
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Book-Entry Delivery. The Depositary will establish an account with respect
to the Shares at each of the Book-Entry Transfer Facilities for purposes of
the Offer within two business days after the date of this Offer to Purchase.
Any financial institution that is a participant in a Book-Entry Transfer
Facility's system may make book-entry delivery of the Shares by causing such
facility to transfer such Shares into the Depositary's account in accordance
with such facility's procedure for such transfer. Even though delivery of
Shares may be effected through book-entry transfer into the Depositary's
account at one of the Book-Entry Transfer Facilities, a properly completed and
duly executed Letter of Transmittal (or a facsimile thereof), with any
required signature guarantees and other required documents, must, in any case,
be transmitted to and received by the Depositary at one of its addresses set
forth on the back cover of this Offer to Purchase before the Expiration Date,
or the guaranteed delivery procedure set forth below must be followed.
Delivery of the Letter of Transmittal and any other required documents to one
of the Book-Entry Transfer Facilities does not constitute delivery to the
Depositary.
Guaranteed Delivery. If a stockholder desires to tender Shares pursuant to
the Offer and such stockholder's stock certificates are not immediately
available (or the procedure for book-entry transfer cannot be followed on a
timely basis) or time will not permit the Letter of Transmittal and all other
required documents to reach the Depositary before the Expiration Date, such
Shares may nevertheless be tendered provided that all of the following
conditions are satisfied:
(a) such tender is made by or through an Eligible Institution;
(b) the Depositary receives (by hand, mail or facsimile transmission)
before the Expiration Date, a properly completed and duly executed Notice
of Guaranteed Delivery substantially in the form the Company has provided
with this Offer to Purchase; and
(c) the certificates for all tendered Shares, in proper form for transfer
(or confirmation of book-entry transfer of such Shares into the
Depositary's account at one of the Book-Entry Transfer Facilities),
together with a properly completed and duly executed Letter of Transmittal
(or a facsimile thereof) and other documents required by the Letter of
Transmittal, are received by the Depositary within three AMEX trading days
after the date of execution of such Notice of Guaranteed Delivery.
Validity of Delivery; Rejection of Shares; Waiver of Defects; No Obligation
To Give Notice of Defects. All questions as to the number of Shares to be
accepted and the validity, form, eligibility (including time of receipt) and
acceptance for payment of any tender of Shares will be determined by the
Company, in its sole discretion, which determination shall be final and
binding on all parties. The Company reserves the absolute right to reject any
or all tenders determined by it not to be in proper form or the acceptance for
payment of which may, in the opinion of the Company's counsel, be unlawful.
The Company also reserves the absolute right to waive any of the conditions of
the Offer (except as otherwise provided in "The Offer--Section 5") and any
defect or irregularity in the tender of any particular Shares. No tender of
Shares will be deemed properly made until all defects or irregularities have
been cured or waived. None of the Company, the Information Agent, the
Depositary or any other person is or will be obligated to give notice of any
defects or irregularities in tenders, and none of them will incur any
liability for failure to give any such notice.
3. WITHDRAWAL RIGHTS
Except as otherwise provided in this Section 3, a tender of Shares pursuant
to the Offer is irrevocable. Shares tendered pursuant to the Offer may be
withdrawn at any time before the Expiration Date and, unless theretofore
accepted for payment by the Company, after 12:00 Midnight, New York City time,
on Monday, November 3, 1997.
For a withdrawal to be effective, the Depositary must timely receive (at one
of its addresses set forth on the back cover of this Offer to Purchase) a
written or facsimile transmission notice of withdrawal. Any notice of
withdrawal must specify the name of the person having tendered the Shares to
be withdrawn, the number of Shares to be withdrawn and, if different from the
name of the person who tendered the Shares, the name of the registered owner
of such Shares. If the certificates have been delivered or otherwise
identified to the Depositary, then, prior to the release of such certificates,
the tendering stockholder must also submit the serial numbers shown
16
<PAGE>
on the particular certificates evidencing such Shares and the signature on the
notice of withdrawal must be guaranteed by an Eligible Institution (except in
the case of Shares tendered by an Eligible Institution). If Shares have been
delivered pursuant to the procedure for book-entry transfer set forth in "The
Offer--Section 2," the notice of withdrawal must specify the name and the
number of the account at the applicable Book-Entry Transfer Facility to be
credited with the withdrawn Shares and otherwise comply with the procedures of
such facility.
All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by the Company, in its sole
discretion, which determination shall be final and binding on all parties.
None of the Company, the Information Agent, the Depositary or any other person
is or will be obligated to give any notice of any defects or irregularities in
any notice of withdrawal, and none of them will incur any liability for
failure to give any such notice. A withdrawal of a tender of Shares may not be
rescinded and Shares properly withdrawn shall thereafter be deemed not to be
validly tendered for purposes of the Offer. Withdrawn Shares, however, may be
retendered before the Expiration Date by again following one of the procedures
described in "The Offer--Section 2."
4. ACCEPTANCE FOR PAYMENT OF SHARES AND PAYMENT OF PURCHASE PRICE
Upon the terms and subject to the conditions of the Offer, as soon as
practicable after the Expiration Date, the Company will purchase and pay the
Purchase Price for all of its outstanding Shares or such lesser number of
Shares, but not less than 1,600,000 Shares, as are properly tendered and not
withdrawn as permitted in "The Offer--Section 3." For purposes of the Offer,
the Company will be deemed to have accepted for payment (and thereby
purchased) Shares which are tendered and not withdrawn when, as and if the
Company gives oral or written notice to the Depositary of the Company's
acceptance of such Shares for payment pursuant to the Offer.
Certificates for all Shares not purchased pursuant to the Offer will be
returned to the tendering stockholders (or, in the case of Shares delivered by
book-entry transfer, such Shares will be credited to the account maintained
with one of the Book-Entry Transfer Facilities by the participant therein who
so delivered such Shares) at the Company's expense as promptly as practicable.
Payment for Shares purchased pursuant to the Offer will be made by the
Company by depositing the Purchase Price therefor with the Depositary, which
will act as agent for tendering stockholders for the purpose of receiving
payment from the Company and transmitting payment to the tendering
stockholders. Notwithstanding any other provision hereof, payment for Shares
accepted for payment pursuant to the Offer will in all cases be made only
after timely receipt by the Depositary of certificates for such Shares (or a
timely confirmation by a Book-Entry Transfer Facility of book-entry transfer
of such Shares to the Depositary), a properly completed and duly executed
Letter of Transmittal (or a facsimile thereof) with any required signature
guarantees and any other required documents. Under no circumstance will
interest be paid on the Purchase Price of the Shares to be paid by the
Company, regardless of any delay in making such payment.
The Company will pay any stock transfer taxes with respect to the transfer
and sale of Shares to it or its order pursuant to the Offer. If, however,
payment is to be made to, or certificates for Shares not purchased or tendered
are to be registered in the name of, any person other than the registered
holder, or if tendered certificates are registered in the name of any person
other than the person(s) signing the Letter of Transmittal, the amount of any
stock transfer taxes (whether imposed on the registered holder or such other
person) payable on account of the transfer to such person will be deducted
from the Purchase Price unless evidence satisfactory to the Company of the
payment of such taxes or an exemption therefrom is submitted. See Instruction
6 of the Letter of Transmittal.
ANY TENDERING STOCKHOLDER OR OTHER PAYEE WHO FAILS TO COMPLETE FULLY AND
SIGN THE SUBSTITUTE FORM W-9 INCLUDED IN THE LETTER OF TRANSMITTAL (OR, IN THE
CASE OF A NONCORPORATE FOREIGN STOCKHOLDER, A FORM W-8, WHICH IS OBTAINABLE
FROM THE DEPOSITARY) MAY BE SUBJECT TO A FEDERAL BACKUP WITHHOLDING TAX OF 31%
OF THE GROSS PROCEEDS TO BE PAID TO SUCH STOCKHOLDER OR OTHER PAYEE PURSUANT
TO THE OFFER. SEE "THE OFFER--SECTION 2" AND "THE OFFER--SECTION 10."
17
<PAGE>
5. CERTAIN CONDITIONS OF THE OFFER
Notwithstanding any other provisions of the Offer, but subject to the
restriction on the Company's right to amend, modify or waive the terms and
conditions of the Offer pursuant to the Purchase Agreement, the Company shall
not be required to accept for payment or, subject to any applicable rules and
regulations of the SEC, including Rule 14e-1(c) under the Exchange Act
(relating to the Company's obligation to pay for or return tendered Shares
promptly after termination or withdrawal of the Offer), pay for, and may delay
the acceptance for payment of or, subject to the restriction referred to
above, the payment for, any tendered Shares, and may terminate or amend the
Offer as to any Shares not then paid for, if (i) any applicable waiting period
under the HSR Act has not expired or terminated, (ii) the Minimum Condition
has not been satisfied, or (iii) at any time on or after the date of the
Purchase Agreement and before the time of acceptance for payment for any such
Shares, any of the following events shall occur:
(a) there shall be threatened or pending any suit, action or proceeding
by any governmental entity against VS&A-T/SF, VS&A, the Company or any
subsidiary of the Company (i) seeking to prohibit or impose any material
limitations on VS&A's or VS&A-T/SF's ownership or operation (or that of any
of their respective subsidiaries or affiliates) of all or a material
portion of their or the Company's businesses or assets, or to compel VS&A
or VS&A-T/SF or their respective subsidiaries and affiliates to dispose of
or hold separate any material portion of the business or assets of the
Company or VS&A and their respective subsidiaries, (ii) challenging the
acquisition by the Company of any Shares under the Offer or the acquisition
by VS&A-T/SF of any shares of Common Stock pursuant to the Stock Purchase
or pursuant to the Stockholder Agreements, seeking to restrain or prohibit
the making or consummation of the Offer, the Stock Purchase or the Second-
Step Transaction or the performance of any of the other transactions
contemplated by the Purchase Agreement or the Stockholder Agreements
(including the voting provisions thereunder), or seeking to obtain from the
Company, VS&A or VS&A-T/SF any damages that are material in relation to the
Company and its subsidiaries taken as a whole, (iii) seeking to impose
material limitations on the ability of the Company, or render the Company
unable, to accept for payment, pay for or purchase some or all of the
Shares pursuant to the Offer, or (iv) which otherwise would have or be
reasonably likely to have a material adverse effect on the condition
(financial or otherwise), business, results of operations or prospects of
the exposition services division of the Company, the information services
division of the Company, or the Company and its subsidiaries taken as a
whole ("Material Adverse Effect");
(b) there shall be any statute, rule, regulation, judgment, order or
injunction enacted, entered, enforced, promulgated, or deemed applicable,
pursuant to an authoritative interpretation by or on behalf of a
governmental entity, to the Offer, the Stock Purchase or the Second-Step
Transaction or any other action shall be taken by any governmental entity,
other than the application to the Offer, the Stock Purchase or the Second-
Step Transaction of applicable waiting periods under the HSR Act, that is
reasonably likely to result, directly or indirectly, in any of the
consequences referred to in clauses (i) through (iv) of paragraph (a)
above;
(c) there shall have occurred (i) any general suspension of trading in,
or limitation on prices for, securities on the New York Stock Exchange, the
AMEX or in the NASDAQ National Market System, for a period in excess of 24
hours (excluding suspensions or limitations resulting solely from physical
damage or interference with such exchanges not related to market
conditions), (ii) a declaration of a banking moratorium or any suspension
of payments in respect of banks in the United States (whether or not
mandatory), (iii) a commencement of a war, armed hostilities or other
international or national calamity directly or indirectly involving the
United States, (iv) any limitation (whether or not mandatory) by any United
States governmental authority on the extension of credit generally by banks
or other financial institutions, (v) a change in general financial bank or
capital market conditions which materially and adversely affects the
ability of financial institutions in the United States to extend credit or
syndicate loans, or (vi) in the case of any of the foregoing existing at
the time of the commencement of the Offer, a material acceleration or
worsening thereof;
(d) there shall have occurred any changes (or any developments that,
insofar as reasonably can be foreseen, are reasonably likely to result in
any changes) in the financial condition, business, results of operations or
prospects of the Company and its subsidiaries that individually or in the
aggregate would have or be reasonably likely to have a Material Adverse
Effect;
18
<PAGE>
(e) (i) the Board of Directors of the Company or any committee thereof
shall have withdrawn or modified its approval or recommendation of the
Offer, the Stock Purchase or the Purchase Agreement, or approved or
recommended any Acquisition Proposal or (ii) the Company shall have entered
into any agreement with respect to any Superior Proposal in accordance with
the Purchase Agreement;
(f) any of the representations and warranties of the Company set forth in
the Purchase Agreement that are qualified as to materiality shall not be
true and correct without such qualification and any such representations
and warranties that are not so qualified shall not be true and correct in
any respect (in each case (i) as of the date referred to in any
representation or warranty which addresses matters as of a particular date,
or (ii) as to all other representations and warranties, as of the date of
the Purchase Agreement and as of the Expiration Date of the Offer), except
to the extent all failures to be true and correct in the aggregate would
not have or be reasonably likely to have a Material Adverse Effect;
(g) the Company shall have failed to perform in any material respect any
material obligation or to comply in any material respect with any material
agreement or covenant of the Company to be performed or complied with by it
under the Purchase Agreement or the action contemplated by the Purchase
Agreement shall not have been taken; or
(h) the Purchase Agreement shall have been terminated in accordance with
its terms.
Pursuant to the Purchase Agreement, the occurrence of any of the above
events is subject to the reasonable good faith judgment of VS&A or VS&A-T/SF
as to whether such event would make it inadvisable for the Company to proceed
with the Offer and/or with such acceptance for payment for Shares.
The foregoing conditions are for the benefit of VS&A and VS&A-T/SF and may
be waived by VS&A or VS&A-T/SF, on behalf of the Company, in whole or in part,
at any time and from time to time in the sole discretion of VS&A and VS&A-
T/SF. The Exchange Act requires that all conditions to the Offer must be
satisfied or waived before the final Expiration Date. In certain cases, waiver
of a condition to the Offer would require an extension of the Offer. See "The
Offer--Section 14."
6. PRICE RANGE OF SHARES; DIVIDEND POLICY
The Shares are primarily traded on the AMEX under the symbol "TCM." The
table below sets forth, for the periods indicated, the high and low sales
prices per Share reported on the AMEX.
<TABLE>
<CAPTION>
HIGH LOW
------- -------
<S> <C> <C>
1995:
First Quarter.............................................. $ 8 $ 5 3/4
Second Quarter............................................. 9 1/8 7 1/4
Third Quarter.............................................. 12 1/8 8 7/8
Fourth Quarter............................................. 13 1/2 10 5/8
1996:
First Quarter.............................................. 17 1/8 13
Second Quarter............................................. 18 7/8 16
Third Quarter.............................................. 23 3/8 17 7/8
Fourth Quarter............................................. 27 3/4 21 3/4
1997:
First Quarter.............................................. 28 1/4 26 1/8
Second Quarter............................................. 27 5/8 25 1/8
</TABLE>
The Company's Common Stock is thinly traded. The average weekly trading
volume in fiscal years 1996 and 1995 was approximately 12,971 and 14,817
shares, respectively.
On August 15, 1997, the last reported sales price of the Shares on the AMEX
before the announcement of the terms of the Offer was $38 7/8 per Share. On
June 30, 1997, the last reported sales price of the Shares on the AMEX before
the announcement that the Company intended to make an earlier offer to
purchase the Shares, was $27 5/8 per Share. On September 4, 1997, the last
reported sales price of the Shares on the AMEX was $39 3/8 per Share.
Stockholders are urged to obtain a current market quotation for the Shares.
19
<PAGE>
Since inception, the Company has not paid any cash or other dividends on its
Common Stock. The Company, however, reevaluates from time to time its dividend
payment policy based on its judgment as to the best interests of the Company
and its stockholders. The determination of the amount of future cash
dividends, if any, to be declared and paid, however, will depend upon, among
other things, the Company's financial condition, funds received from
operations, the level of its capital expenditures and its future business
prospects. The Company's current policy of not paying dividends is based on
belief of the Company's Board of Directors that, at this time, reinvestment of
the Company's earnings into its businesses to foster future growth is in the
best interest of the Company's stockholders.
The Board of Directors of Tribune/Swab-Fox Companies, Inc. ("Tribune/Swab-
Fox"), the former 78% owner/parent of the Company, declared a one-time
dividend of $0.0344 per share ($0.27 per equivalent share of the Company's
Common Stock) in connection with its merger with and into the Company, which
dividend was paid on May 24, 1995.
7. BACKGROUND AND PURPOSE OF THE OFFER AND THE PURCHASE
Over the past several months, the Company has explored various transactions
which would enhance stockholder value and liquidity. These transactions have
primarily involved the sale of TISI, the Company's largest subsidiary (from a
profitability standpoint), or the sale of the Company as a whole. In reviewing
the proposed transactions involving the sale of TISI, it became evident that
there was no credible offer for TISI which gave both fair value for TISI and
could be structured in a tax efficient way for the direct benefit of the
stockholders of the Company. During such time, however, several bidders,
including VS&A, expressed an interest in pursuing a transaction by which they
would buy the Company as a whole. Over several weeks of discussions, it became
clear that VS&A, partially as a result of its apparent ability to reach an
agreement with Fir Tree to participate in its proposal, was offering a more
certain and slightly higher priced transaction than other alternative
transactions. See "Special Factors--Position of the Board of Directors."
The purpose of the Offer is to provide the Company's stockholders with
liquidity for their Shares by enabling them to sell their Shares at a fair
price and at a premium over recent market prices and to enable VS&A-T/SF to
obtain a controlling equity interest in the Company pursuant to the Stock
Purchase. Under certain circumstances, however, proceeds of sales pursuant to
the Offer may be treated as a dividend taxable as ordinary income to a
stockholder rather than capital gain. See "The Offer--Section 10." Shares
acquired by the Company pursuant to the Offer will be held in the Company's
treasury and will be available for the Company to issue without further
stockholder action (except as required by applicable law or the rules of the
AMEX on which the Shares are traded). The Company intends to issue at least
869,565 of such Shares to VS&A-T/SF pursuant to the Purchase Agreement.
The Company has been informed by its directors and executive officers that
they and their affiliates intend to tender all of the outstanding Shares owned
by them pursuant to the Offer. Fir Tree has informed the Company that none of
the Shares beneficially owned by it will be tendered to the Company pursuant
to the Offer. After giving effect to the repurchase of Shares by the Company
pursuant to the Offer (assuming 1,600,000 Shares are tendered and purchased
pursuant to the Offer) and the purchase of 869,565 Shares by VS&A-T/SF
pursuant to the Stock Purchase, VS&A-T/SF and Fir Tree will own beneficially
33.4% and 18.7% of the outstanding Shares, respectively.
VS&A-T/SF has agreed, as soon as practicable following consummation of the
Offer, to cause the Company to consummate the Second-Step Transaction. It is
anticipated that, upon consummation of the Offer and the Second-Step
Transaction, all of the Shares will be held by VS&A-T/SF and Fir Tree. In
addition, it is anticipated that, if consummated, the Offer alone, or the
Offer followed by the Second-Step Transaction would result in: (i) the
delisting of the Shares on the AMEX, (ii) the Shares becoming eligible for
termination of registration pursuant to Section 12(g)(4) of the Exchange Act,
(iii) a change in the composition of the present board of directors and
executive officers of the Company, and (iv) a change in the capitalization of
the Company.
20
<PAGE>
8. CERTAIN INFORMATION CONCERNING THE COMPANY
The Company, operating through subsidiaries, is a diversified communications
and information company. The Company was incorporated in Delaware on March 17,
1989. As of the end of 1996, the Company operated through three operating
divisions: gaming media services, exposition services and information
services.
The gaming media services division is run through the Company's G.E.M.
Communications, Inc. subsidiary and its affiliates (together "G.E.M."). The
activities of this division consist of a trade journal, International Gaming
and Wagering Business, and one newsletter and owning and/or managing trade
shows and conferences directed to the legalized gaming industry. In February
1997, the Company also increased its ownership interest to 88% in Casino
Publishing Company which publishes a small trade magazine, Casino Executive,
the operation of which has been maintained separate from G.E.M. but is part of
the Company's gaming media services division.
The Company's exposition services business consists of Galaxy Registration,
Inc., a provider of trade show/convention registration services and exhibitor
information and marketing services, and Atwood Convention Publishing, Inc.,
the publisher of various convention and trade show related publications, such
as directories and convention daily newspapers, primarily on a contract basis
and the publisher of Expo, The Magazine for Exposition Management and the
provider of promotion and marketing services for corporate exhibitors.
The Company's information services division has two components:
Transportation Information Services, Inc. is engaged in the business of
obtaining, processing and providing motor vehicle reports, truck driver
employment information, criminal records and other pre-employment screening
services primarily to the insurance and trucking industries. CORSEARCH, Inc.,
which was acquired by the Company on August 15, 1996, is in the business of
providing trademark and tradename research and information services, utilizing
both proprietary and public databases.
The Company's principal executive office is located at 2407 East Skelly
Drive, Tulsa, Oklahoma 74105, and its telephone number is (918) 747-2600.
Summary Historical Financial Information. The summary financial information
for the Company for the years ended December 31, 1996 and 1995, set forth
below has been derived from, and should be read in conjunction with, the
audited financial statements (including the related notes thereto) included in
the Company's Annual Report on Form 10-K for the year ended December 31, 1996
(the "Form 10-K"). The summary financial information for the six month periods
ended June 30, 1997 and 1996, has been derived from, and should be read in
conjunction with, the unaudited financial statements for such periods included
in the Company's Quarterly Report on Form 10-Q for the period ended June 30,
1997 (the "Form 10-Q"). Such summary financial information is qualified in its
entirety by reference to such reports and all financial statements and related
notes contained therein. The Form 10-K and the Form 10-Q are being provided to
the Company's stockholders simultaneously with the delivery of this Offer to
Purchase. The Form 10-K and the Form 10-Q are also available for examination,
and copies may be obtained, in the manner set forth below under "Additional
Information."
The financial information for the six month periods ended June 30, 1997 and
1996, has not been audited and, in the opinion of management, reflects all
adjustments (consisting of normal recurring adjustments) which are necessary
for a fair presentation of such information. Results for the six month periods
are not necessarily indicative of results for the full year.
21
<PAGE>
SUMMARY HISTORICAL FINANCIAL INFORMATION FOR THE COMPANY
(IN THOUSANDS EXCEPT RATIOS AND PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
JUNE 30, DECEMBER 31,
------------------ ----------------
1997 1996 1996 1995
-------- -------- ------- -------
(UNAUDITED)
<S> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Revenues................................ $ 36,935 $ 30,392 $68,642 $72,078
Income before income taxes.............. 4,184 3,347 8,522 16,112
Income from continuing operations....... 2,433 2,008 5,421 15,788
BALANCE SHEET DATA (AT END OF PERIOD):
Working capital......................... 4,901 16,356 5,746 15,326
Total assets............................ 59,237 52,293 55,982 53,444
Total long-term indebtedness............ 3,110 2,145 3,493 4,529
Stockholders' equity.................... 39,306 34,551 38,186 32,486
PER SHARE DATA:
Net income per common share (and common
share equivalents) --continuing
operations............................. $ .68 $ .57 $ 1.53 $ 4.20
Ratio of earnings to fixed charges...... 15.1x 12.6x 15.7x 19.8x
Book value per share.................... $ 11.89 $ 10.30 $ 11.51 $ 9.79
Average number of common and common
equivalent shares outstanding.......... 3,552 3,526 3,543 3,766
</TABLE>
Pro Forma Financial Information. If the consumation of the Offer occurs, the
purchase of Shares pursuant to the Offer will be followed by the Second-Step
Transaction that will result in the conversion of Shares not tendered into the
right to receive $40.25 per Share in cash. Therefore, if the consummation of
the Offer occurs, stockholders will receive cash consideration for any non-
tendered Shares and will no longer be stockholders of the Company.
Accordingly, no pro forma financial information is provided.
Selected Projected Financial Information. During the course of planning and
developing a potential recapitalization of the Company, the management of the
Company developed projected financial information relating to the operations
of the Company, on a best case basis, which were revised and refined from time
to time during such process. In seeking potential sources of financing for
such recapitalization, such projections were provided to VS&A, VS&A-T/SF and
the Company's lenders. Such projections were not prepared with a view to
public disclosure or with a view toward compliance with published guidelines
of the SEC or the American Institute of Certified Public Accountants regarding
projections or forecasts or generally accepted accounting principles. The
independent auditors of the Company have not performed any procedures with
respect to such projections. Such projections make numerous assumptions, some
of which are set forth below, with respect to the operations of the Company
and its subsidiaries, industry performance, general business and economic
conditions, taxes and other matters, most of which are beyond the control of
the Company. None of the Company or any other person or entity assumes any
responsibility for the accuracy of such projections. Such projections are
included herein only because they were provided to VS&A, VS&A-T/SF and the
Company's lenders.
Because the projections are based on a number of assumptions and are
inherently subject to significant uncertainties and contingencies, which are
beyond the control of the Company, there can be no assurance that the
projections will be realized, and actual results may be higher or lower than
those shown, possibly by material amounts.
22
<PAGE>
SELECTED PROJECTED FINANCIAL INFORMATION FOR THE COMPANY
<TABLE>
<CAPTION>
1997 1998 1999 2000 2001
------- -------- -------- -------- --------
(IN THOUSANDS)(/1/)
<S> <C> <C> <C> <C> <C>
Revenues.......................... $83,256 $100,770 $119,770 $140,029 $151,552
Costs of Sales and Operating
Expenses......................... 67,359 77,579 88,001 100,279 107,717
------- -------- -------- -------- --------
EBITDA(/2/)....................... 15,897 23,191 31,769 39,750 43,835
Depreciation/Amortization(/3/).... 3,546 4,447 5,220 5,268 4,650
------- -------- -------- -------- --------
Operating Income (EBIT)(/4/)...... $12,351 $ 18,744 $ 26,549 $ 34,482 $ 39,185
======= ======== ======== ======== ========
Capital Expenditures.............. $ 7,053 $ 4,325 $ 5,163 $ 4,473 $ 4,670
</TABLE>
- --------
(1) The projections supplied to VS&A did not include estimates for taxes. The
Company's effective tax rate is approximately 38% of income before
goodwill amortization. As a consequence, no earnings per share projections
were used.
(2) Earnings before interest, taxes, depreciation and amortization costs.
(3) Depreciation/amortization does not include amortization of goodwill.
(4) Earnings before interest costs, taxes and amortization of goodwill.
The above projections were based on "best case" scenarios developed by the
management of each operating division of the Company, based primarily on their
view of the future without any attempt by corporate management to include the
projected effects of changing economic conditions, the probable failure rate
of proposed new product launches, and the general application of historical
realities and the difficulty of maintaining continuous growth over any five
year period. Thus, corporate management expressed the view to VS&A and other
potential buyers of the Company that, in addition to the inherent
unreliability of any such projections, such potentially negative factors
should be considered in making any judgment about the future success of the
Company's businesses.
The methods and assumptions used in preparing the projected financial
information set forth above involved significant elements of subjective
judgment which may or may not prove to be correct. Accordingly, such projected
financial information is not necessarily indicative of the future performance
of the Company and its subsidiaries, which may be significantly less favorable
or more favorable than as set forth above. The inclusion of such projected
financial information herein should not be regarded as a representation by the
Company or any other person or entity that the projected results indicated
will be achieved. Because such projected financial information is inherently
subject to uncertainty and is necessarily based upon assumptions which may or
may not prove to be correct, neither the Company nor any other person or
entity assumes any responsibility for its accuracy.
Additional Information. The Company is subject to the informational
reporting requirements of the Exchange Act and, in accordance therewith, files
reports, proxy statements and other information with the SEC relating to its
business, financial condition and other matters. The Company is required to
disclose in such proxy statements and reports certain information, as of
particular dates, concerning the Company's directors and officers, their
remuneration, stock options granted to them, the principal owners of the
Company's securities and any material interest of such persons in transactions
with the Company. Additionally, information concerning the Company is set
forth in the Form 10-K. The Company has also filed with the SEC a Transaction
Statement on Schedule 13E-3 and an Issuer Tender Offer Statement on Schedule
13E-4 which include certain additional information relating to the Offer.
Copies of such material can be obtained by mail from the Public Reference
Section of the SEC, at Judiciary Plaza, 450 Fifth Street, N.W., Washington,
D.C. 20549, at prescribed rates. In addition, such reports, proxy and
information statements and other information filed by the Company with the SEC
can be inspected and copied at the public reference facility referenced above
and (except for the Schedules 13E-3 and 13E-4) at the regional offices of the
SEC at Seven World Trade Center, Suite 1300, New York, New York 10048, and
Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661-2511. Such reports, proxy statements and other information
concerning the Company can also be inspected and
23
<PAGE>
copied at the American Stock Exchange, 86 Trinity Place, New York, New York
10006. In addition, the SEC maintains a site on the World Wide Web that
contains reports, proxy and information statements and other information filed
electronically by the Company with the SEC which can be accessed over the
Internet at http://www.sec.gov.
9. SOURCE AND AMOUNT OF FUNDS
The consummation of the Offer is conditioned upon, among other things, the
Company being satisfied, in its sole discretion, that the Company has obtained
sufficient financing to enable it to consummate the Offer. See "The Offer--
Section 5." If the Company were to purchase all of the outstanding Shares
pursuant to the Offer at a Purchase Price of $40.25 per Share, the maximum
aggregate cost of the Offer, would be $134,098,752. However, the Company has
been informed by Fir Tree, which owns 14.6% of the outstanding Shares, that
Fir Tree does not intend to tender any of its Shares pursuant to the Offer. If
the Company were to purchase all of the outstanding Shares pursuant to the
Offer (other than the Shares owned by Fir Tree) at a Purchase Price of $40.25
per Share, the maximum aggregate cost of the Offer would be $114,476,635. The
aggregate cost of the payments for the conversion of the Company Options will
be $10,670,750. The fees and expenses associated with the Offer are estimated
by the Company to be $14,125,000. The necessary funds are expected to be
provided from the following sources: (i) not less than $34,999,991 to be
obtained from VS&A-T/SF for the purchase of at least 869,565 newly issued
Shares pursuant to the Stock Purchase, (ii) not less than $100,000,000 of Debt
Financing to be obtained from existing commitments from lenders or high yield
debt financing, and (iii) other debt and existing cash and cash equivalents of
the Company of approximately $4,300,000.
Stock Purchase. Pursuant to the Purchase Agreement, VS&A, through VS&A-T/SF,
has committed to purchase not less than 869,565 newly issued Shares at a price
per share equal to the Purchase Price (or an aggregate purchase price of not
less than $34,999,991 for such Shares). The consummation of the Stock Purchase
will take place simultaneously with the closing of the Offer. The respective
obligation of each party to effect the Stock Purchase is subject to the
satisfaction of various conditions. See "Special Factors--Purpose of the
Offer" and "The Offer--Section 5." VS&A has represented to the Company that
the limited partners of VS&A are obligated pursuant to the limited partnership
agreement of VS&A to contribute to VS&A the equity required to consummate the
Stock Purchase.
Debt Financing. In connection with the Purchase Agreement, the Company
received commitment letters dated August 13, 1997 (the "Commitment Letters"),
with respect to not less than $100,000,000 of Debt Financing to the Company,
from First Union National Bank (the "Bank").
The Company intends to finance the Offer by the sale, pursuant to Rule 144A
under the Securities Act, of $100,000,000 in Senior Subordinated Notes (the
"Notes"). The Notes would mature in 2007, would be unsecured and would be
guaranteed by each of the Company's subsidiaries. The interest rate on the
Notes would be determined based on market conditions at the time of the sale
of the Notes but is expected to be approximately 10.25% based on current
market conditions. The Notes would not be redeemable for the first five years,
and thereafter would be redeemable at a declining premium. The Notes would
contain affirmative and negative covenants customary in a "high-yield" note.
If the Company is unable to complete the sale of the Notes by the time of
the closing of the Offer, the Company will borrow $20 million pursuant to a 7-
year Senior Secured Revolver (the "Revolver") from the Bank and $85 million in
Senior Subordinated Increasing Rate Notes (the "Bridge Notes") from the Bank,
all as provided in the Commitment Letters.
The Revolver would mature on September 30, 2004, would be secured by a first
priority security interest in substantially all of the assets of the Company
and its subsidiaries and would be guaranteed by each of the subsidiaries of
the Company. The Revolver would bear interest at a rate ranging from .5% to
1.5% above the Bank's base rate or ranging from 1.75% to 2.75% above LIBOR,
depending on the ratio of the indebtedness of the Company and its subsidiaries
to the EBITDA of the Company and its Subsidiaries. The Revolver agreement
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would contain affirmative and negative covenants customary for similar loans,
including limitations on the Company's leverage ratio, senior leverage ratio,
interest coverage and fixed charge coverage.
The Bridge Notes would mature one year after issuance, would be unsecured
and would be guaranteed by each of the subsidiaries of the Company. The Bridge
Notes would be redeemed from the proceeds of the offering of the Notes or the
proceeds of any other debt or equity offering by the Company. The Bridge Notes
would initially bear interest at a rate 4.5% above LIBOR, with the spread
above LIBOR increasing by .5% at the end of each 3-month period, provided that
the maximum interest rate would be 18% per year (and no more than 14% would be
payable in cash and the remainder would be paid in kind). The Company could
redeem the Bridge Notes at any time at par (or 103% of par if the Notes are
refunded from a transaction in which the Bank or an affiliate does not act as
exclusive agent or lead manager).
If the Bridge Notes are not redeemed prior to or at maturity, the Bridge
Notes would convert into Rollover Notes (the "Rollover Notes") bearing
interest at a rate equal to the highest of: (a) the Bank's prime rate plus
4.25%, (b) LIBOR plus 6.5%, or (c) 6.5% above the yield on 10-year U.S.
Treasury Notes, plus, in each case, an additional .5% for each three months
the Rollover Notes are outstanding, but not more than 18% per year (and no
more than 14% would be payable in cash and the remainder would be paid in
kind).
Miscellaneous. The foregoing descriptions of the Commitment Letters are
qualified in their entirety by reference to the text thereof, copies of which
are attached to the Company's issuer tender offer statement on Schedule 13E-4
and which may be obtained from the SEC in the same manner as set forth in "The
Offer--Section 8."
It is anticipated that the indebtedness incurred by the Company through the
borrowings described above will be repaid from funds generated internally by
the Company and its subsidiaries and from other sources which may include the
proceeds of the private or public sale of debt or equity securities. No final
decisions have been made concerning the method the Company will employ to
repay such indebtedness. Such decisions will be made based on the Company's
review from time to time of the advisability of particular actions, as well as
on prevailing interest rates and financial and other economic conditions.
10. CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
The following is a summary under currently applicable law of certain federal
income tax considerations generally applicable to the Offer. The tax treatment
described herein may vary depending upon each stockholder's particular
circumstances. Certain stockholders (including insurance companies, tax-exempt
organizations, financial institutions, broker-dealers, regulated investment
companies, foreign corporations, persons who are not citizens or residents of
the United States, stockholders who do not hold their Shares as capital
assets, stockholders who hold their Shares as part of a straddle hedging
transaction or conversion transaction, and stockholders who have acquired
their Shares upon the exercise of options or otherwise as compensation) may be
subject to special rules not discussed below. No ruling from the Internal
Revenue Service (the "IRS") will be requested with respect to the federal
income tax consequences discussed herein and, accordingly, there can be no
assurance that the IRS will agree with the conclusions stated. This discussion
does not address the effect of any applicable foreign, state, local or other
tax laws.
EACH STOCKHOLDER SHOULD CONSULT SUCH STOCKHOLDER'S OWN TAX ADVISOR AS TO THE
PARTICULAR TAX CONSEQUENCES TO SUCH STOCKHOLDER OF THE OFFER, INCLUDING THE
APPLICABILITY AND EFFECT OF ANY FOREIGN, STATE, LOCAL OR OTHER TAX LAWS, ANY
RECENT CHANGES IN APPLICABLE TAX LAWS AND ANY PROPOSED LEGISLATION.
Treatment as a Sale or Exchange. Under Section 302 of the Internal Revenue
Code of 1986 (the "Code"), a transfer of Shares to the Company pursuant to the
Offer will, as a general rule, be treated as a sale or exchange
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of the Shares if the receipt of cash upon the sale (a) results in a "complete
redemption" of the stockholder's interest in the Company, or (b) is
"substantially disproportionate" with respect to the stockholder, or (c) is
"not essentially equivalent to a dividend" with respect to the stockholder.
These tests (the "Section 302 tests") are explained more fully below.
If any of the Section 302 tests is satisfied, a tendering stockholder will
recognize gain or loss equal to the difference between the amount of cash
received by the stockholder pursuant to the Offer (less any portion thereof
attributable to accrued but unpaid dividends, if any, which is taxable as a
dividend) and the stockholder's basis in the Shares sold pursuant to the
Offer. If the Shares are held as capital assets, the gain or loss will be
capital gain or loss. Any such capital gain will be mid-term capital gain if
the Shares have been held more than 12 and not more than 18 months (maximum
federal income tax rate of 28 percent for individual taxpayers) or long-term
capital gain or loss if the Shares have been held for more than 18 months
(maximum federal income tax rate of 20 percent for individual taxpayers).
The Section 302 Tests. One of the following tests must be satisfied in order
for the sale of Shares pursuant to the Offer to be treated as a sale or
exchange rather than as a dividend distribution.
(a) Complete Redemption Test. The receipt of cash by a stockholder will
be a complete redemption of the stockholder's interest if either (i) all of
the stock of the Company actually and constructively owned by the
stockholder is sold pursuant to the Offer or (ii) all of the stock of the
Company actually owned by the stockholder is sold pursuant to the Offer and
the stockholder is eligible to waive, and effectively waives, the
attribution of all stock of the Company constructively owned by the
stockholder in accordance with the procedures described in Section
302(c)(2) of the Code.
(b) Substantially Disproportionate Test. The receipt of cash by a
stockholder will be substantially disproportionate with respect to the
stockholder if the percentage of the outstanding voting stock of the
Company actually and constructively owned by the stockholder immediately
following the sale of Shares pursuant to the Offer (treating Shares
purchased pursuant to the Offer as not outstanding) is less than 80 percent
of the percentage of the outstanding voting stock of the Company actually
and constructively owned by the stockholder immediately before the exchange
(treating Shares purchased pursuant to the Offer as outstanding).
Stockholders should consult their tax advisors concerning the application
of the "substantially disproportionate test" to their particular
circumstances.
(c) Not Essentially Equivalent To A Dividend Test. The receipt of cash by
a stockholder will not be essentially equivalent to a dividend if the
stockholder's exchange of Shares pursuant to the Offer results in a
meaningful reduction of the stockholder's proportionate interest in the
Company. Whether the receipt of cash by a stockholder will not be
essentially equivalent to a dividend will depend on the stockholder's
particular facts and circumstances. Stockholders expecting to rely on the
"not essentially equivalent to a dividend test" should consult their tax
advisors regarding its application in their particular circumstances.
Under certain circumstances, it may be possible for a tendering stockholder
to satisfy one of the Section 302 tests by contemporaneously selling or
otherwise disposing of all or some of the stock of the Company that is
actually or constructively owned by the stockholder but that is not purchased
pursuant to the Offer. It may also be possible for a tendering stockholder to
satisfy the complete redemption test by taking account of the conversion of
the stockholder's remaining Shares into the right to receive the cash payment
in the Second-Step Transaction. Also, a stockholder may not be able to satisfy
any of the Section 302 tests because stock of the Company owned by a party
related, for income tax purposes, to the stockholder is considered owned by
the stockholder for federal income tax purposes. Stockholders should consult
their tax advisors regarding the consequences of such sales or acquisitions of
stock in their particular circumstances.
Constructive Ownership of Stock. In determining whether any of the Section
302 tests is satisfied, a stockholder must take into account not only stock of
the Company actually owned by the stockholder, but also stock of the Company
that is treated as owned by the stockholder under Section 318 of the Code.
Under Section 318, a stockholder may constructively own stock of the Company
actually owned, and in some cases constructively owned, by certain related
individuals and certain entities in which the stockholder has an interest, as
well as any stock of the Company the stockholder has a right to acquire by
exercise of an option or by the conversion or exchange of a security.
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Treatment as a Dividend. If none of the Section 302 tests is satisfied and
the Company has sufficient earnings and profits, a tendering stockholder will
be treated as having received a dividend taxable as ordinary income in an
amount equal to the entire amount of cash received by the stockholder pursuant
to the Offer. This amount will not be reduced by the stockholder's basis in
the Shares sold pursuant to the Offer, and (except as described below for
corporate stockholders eligible for the dividends-received deduction) the
stockholder's basis in those Shares will be added to the stockholder's basis
in his or her remaining Shares, if any. Under certain circumstances, because
of the constructive ownership of stock, a stockholder who tenders and receives
cash for all of the stock of the Company owned directly by such stockholder
may be treated as having received a dividend in the amount of such cash and
never be able to receive a tax benefit for such stockholder's tax basis in the
stock tendered. No assurance can be given that any of the Section 302 tests
will be satisfied as to any particular stockholder, and thus no assurance can
be given that any particular stockholder will not be treated as having
received a dividend taxable as ordinary income.
Special Rules for Corporate Stockholders. If the exchange of Shares by a
corporate stockholder does not satisfy any of the Section 302 tests and is
therefore treated as a dividend, the stockholder may be entitled to a
dividends-received deduction equal to 70 percent of the dividend. There are a
number of limitations on the availability of the deduction, however, and the
dividends-received deduction may not be available or could be limited if, for
example, the corporate stockholder does not satisfy certain holding period
requirements with respect to the Shares or the Shares are treated as "debt
financed portfolio stock." Finally, it is expected that, if a dividends-
received deduction is available, the dividend will generally constitute an
extraordinary dividend under Section 1059 of the Code. As a result, a
corporate stockholder will be required to reduce its tax basis in its Shares
(but not below zero) by the non-taxed portion of the dividend (that is, the
portion of the dividend equal to the dividends-received deduction). If the
non-taxed portion of the dividend exceeds the corporate stockholder's tax
basis in its Shares, the excess must be treated as gain from the sale of the
Shares for the taxable year in which a sale or disposition of the Shares
occurs. There is no difference between the federal income tax rates payable by
a corporation on capital gains and ordinary income.
Backup Withholding. See "The Offer--Section 3" concerning the potential
application of federal backup withholding.
Second-Step Transaction. After the closing date of the Offer, VS&A-T/SF will
cause the Company to effect the Second-Step Transaction, pursuant to which
each Share not tendered in the Offer (other than Shares owned by VS&A-T/SF and
Fir Tree) will be converted into the right to receive an amount equal to the
Purchase Price or an amount determined in connection with the satisfaction of
perfected appraisal rights, if available. Because this conversion of Shares
into cash will constitute a complete redemption of each remaining
stockholder's interest in the stock of the Company each such stockholder will
recognize gain or loss equal to the difference between the amount of cash
received and such stockholder's basis in the Shares converted. As described
above, the tax rate to which such gain will be subject will depend upon
whether the stockholder is an individual and has held the Shares as a capital
asset, and the length of time the Shares have been held.
11. TRANSACTIONS AND ARRANGEMENTS CONCERNING THE SHARES
Based upon the Company's records and upon information provided to the
Company by its directors, executive officers and affiliates, neither the
Company nor, to the Company's knowledge, any of the directors or executive
officers of the Company, any person controlling the Company, nor any associate
of any of the foregoing, has effected any transactions in the Shares during
the 60 days prior to the date hereof.
Since January 1995, the Company has purchased a total of 603,663 Shares in
various individual transactions. The price paid by the Company for such
purchases of Shares has ranged from $5.48 per share in December 1995, to
$27.75 per share in June 1997. In addition, in connection with the merger of
Tribune/Swab-
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Fox with and into the Company in May 1995, the stockholders of Tribune/Swab-
Fox were given the opportunity to have their Tribune/Swab-Fox shares converted
into Shares or cash (the "Cash Alternative"). Pursuant to the Cash
Alternative, the Company exchanged an equivalent of 1,110,648 Shares for cash
at a price of $7.01 per Share.
Except as set forth in this Offer to Purchase, neither the Company nor, to
the Company's knowledge, any of its affiliates, directors or executive
officers or any person controlling the Company, is a party to any contract,
arrangement, understanding or relationship with any other person relating,
directly or indirectly, to, or in connection with, the Offer with respect to
any securities of the Company (including, but not limited to, any contract,
arrangement, understanding or relationship concerning the transfer or the
voting of any such securities, joint ventures, loan or option arrangements,
puts or calls, guarantees of loans, guarantees against loss or the giving or
withholding of proxies, consents or authorizations). Except as set forth in
this Offer to Purchase, since the commencement of the Company's second full
fiscal year preceding the date of this Offer to Purchase, no contacts or
negotiation concerning a merger, consolidation, or acquisition, a tender offer
for or other acquisition of any securities of the Company, an election of
directors of the Company, or a sale or other transfer of a material amount of
assets of the Company, has been entered into or occurred between any
affiliates of the Company or between the Company or any of its affiliates and
any unaffiliated person.
The Company has been informed by its directors and executive officers that
they and their affiliates currently intend to tender all Shares owned by them
pursuant to the Offer.
12. CERTAIN LEGAL MATTERS; REGULATORY APPROVALS; APPRAISAL RIGHTS
Except as set forth in this Offer to Purchase, the Company is not aware of
any license or regulatory permit that appears to be material to its business
that might be adversely affected by its acquisition of Shares as contemplated
in the Offer or of any approval or other action by any government or
governmental, administrative or regulatory authority or agency, domestic or
foreign, that would be required for the Company's acquisition of Shares
pursuant to the Offer. Should any such approval or other action be required,
the Company currently contemplates that it will seek such approval or other
action. The Company cannot predict whether it may determine that it is
required to delay the acceptance for payment of Shares tendered pursuant to
the Offer pending the outcome of any such matter. There can be no assurance
that any such approval or other action, if needed, would be obtained or would
be obtained without substantial conditions or that the failure to obtain any
such approval or other action might not result in adverse consequences to the
Company's business. The Company intends to make all required filings under the
Exchange Act. The Company's obligation under the Offer to accept Shares for
payment is subject to certain conditions. See "The Offer--Section 5."
Antitrust. Under the HSR Act, and the rules and regulations that have been
promulgated thereunder by the Federal Trade Commission (the "FTC"), certain
acquisition transactions may not be consummated until certain information and
documentary material has been furnished for review by the Antitrust Division
of the Department of Justice (the "Antitrust Division") and the FTC and
certain waiting period requirements have been satisfied. The acquisition of
Shares pursuant to the Offer is not subject to such requirements; however, the
acquisition of Shares pursuant to the Stock Purchase is subject to such
requirements.
Under the provisions of the HSR Act applicable to the Stock Purchase, the
purchase of Shares pursuant to the Stock Purchase may not be consummated until
the expiration of a 30-calendar-day waiting period following the filing by
both the Company and VS&A-T/SF (or its ultimate parent) of certain required
information and documentary material with respect to the Stock Purchase with
the FTC and the Antitrust Division, unless such waiting period is earlier
terminated by the FTC and the Antitrust Division. Each of the Company and
VS&A-T/SF is filing a Premerger Notification and Report Form with the
Antitrust Division and the FTC in connection with the purchase of Shares
pursuant to the Stock Purchase under the HSR Act on or about September 5,
1997; and, accordingly, the required waiting period with respect to the Stock
Purchase will expire on or about October 5, 1997, unless earlier terminated by
the Antitrust Division or the FTC or the Company or VS&A-T/SF receives a
request for additional information or documentary material prior thereto. If,
within such 30-calendar-
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day waiting period, either the FTC or the Antitrust Division were to request
additional information or documentary material from the Company or VS&A-T/SF,
the waiting period with respect to the Stock Purchase would be extended for an
additional period of 20 calendar days following the date of substantial
compliance with such request by the Company and VS&A-T/SF. One extension of
the waiting period pursuant to a request for additional information is
authorized by the rules promulgated under the HSR Act. Thereafter, the waiting
period could be extended only by court order or with the consent of the
Company and VS&A-T/SF. The additional 20-calendar-day waiting period may be
terminated sooner by the FTC or the Antitrust Division.
At any time before or after VS&A-T/SF's purchase of Shares, the Antitrust
Division or the FTC could take such action under the antitrust laws as either
deems necessary or desirable in the public interest, including seeking to
enjoin the purchase of Shares pursuant to the Stock Purchase, the divestiture
of Shares purchased pursuant to the Stock Purchase or the divestiture of
substantial assets of VS&A-T/SF, the Company or any of their respective
subsidiaries or affiliates. Private parties as well as state attorneys general
may also bring legal actions under the antitrust laws under certain
circumstances.
Based upon an examination of publicly available information relating to the
businesses in which the Company is engaged, management and VS&A believe that
the acquisition of Shares by VS&A-T/SF pursuant to the Stock Purchase should
not violate the applicable antitrust laws. Nevertheless, there can be no
assurance that a challenge to the Stock Purchase on antitrust grounds will not
be made, or, if such challenge is made, what the result will be.
State Takeover Laws. A number of states (including Delaware, where the
Company is incorporated) have adopted takeover laws and regulations which
purport, to varying degrees, to be applicable to attempts to acquire
securities of corporations which are incorporated in such states or which have
substantial assets, security holders, principal executive offices or principal
places of business therein. To the extent that certain provisions of certain
of these state takeover statutes purport to apply to the Stock Purchase,
management and VS&A believe that such laws conflict with federal law and
constitute an unconstitutional burden on interstate commerce.
Except as described herein, the Company and VS&A have not attempted to
comply with any state takeover statutes in connection with the Stock Purchase.
The Company and VS&A reserve the right to challenge the validity or
applicability of any state law allegedly applicable to the Stock Purchase and
nothing in this Offer to Purchase nor any action taken in connection herewith
is intended as a waiver of that right. In the event that any state takeover
statute is found applicable to the Stock Purchase, the Company might be unable
to accept for payment or purchase Shares tendered pursuant to the Offer or be
delayed in continuing or consummating the Offer and the Stock Purchase. In
such case, the Company may not be obligated to accept for purchase, or pay
for, any Shares tendered. See "The Offer--Section 5."
Delaware Business Combination Law. The Company is a Delaware corporation and
is subject to Section 203 of the DGCL. In general, Section 203 prevents an
"interested stockholder" (defined generally as a person owning 15% or more of
the Company's outstanding voting stock) from engaging in a "business
combination" (as defined in Section 203) with the Company for three years
following the date that person becomes an interested stockholder unless (i)
before that person became an interested stockholder, the Board of Directors of
the Company approved either the transaction in which the interested
stockholder became an interested stockholder or the business combination, (ii)
upon completion of the transaction that resulted in the interested
stockholder's becoming an interested stockholder, the interested stockholder
owns at least 85% of the Company's voting stock outstanding at the time the
transaction commenced (excluding stock held by directors who are also officers
of the Company and by employee stock plans that do not provide employees with
the right to determine confidentially whether shares held subject to the plan
will be tendered in a tender or exchange offer), or (iii) following the
transaction in which that person became an interested stockholder, the
business combination is approved by the Board of Directors of the Company and
authorized at a meeting of stockholders by the affirmative vote of the holders
of at least two-thirds of the Company's voting stock not owned by the
interested stockholder.
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The Board of Directors of the Company has specifically approved the Stock
Purchase for purposes of Section 203.
Appraisal Rights. No appraisal rights are available in connection with the
Offer. Holders of Shares may be entitled to appraisal rights in connection
with the Second-Step Transaction if such transaction is completed as a merger.
Under Section 262 of the DGCL appraisal rights are not available for the
shares of any class or series of stock which, at the record date fixed to
determine the stockholders entitled to receive notice of and to vote at the
meeting of stockholders to act upon the agreement of merger, were either (i)
listed on a national securities exchange or designated as a national market
system security on an inter-dealer quotation system by the National
Association of Securities Dealers, Inc. or (ii) held of record by more than
2,000 stockholders, unless the holders of such class or series of stock are
required by the terms of such agreement to accept for such stock anything
except (w) shares of stock of the corporation surviving or resulting from such
merger, (x) shares of stock of any other corporation which at the effective
date of the merger will be either listed on a national securities exchange or
designated as a national market system security on an inter-dealer quotation
system by the National Association of Securities Dealers, Inc. or held of
record by more than 2,000 stockholders, (y) cash in lieu of fractional shares
of the corporations described in clauses (w) and (x) or (z) any combination of
the shares of stock and cash in lieu of fractional shares described in clauses
(w), (x) and (y).
If the Second-Step Transaction is completed as a merger and does not satisfy
the requirements set forth above, stockholders of the Company may have certain
rights under Section 262 of the DGCL to dissent and demand appraisal of, and
payment in cash of the fair market value of, their Shares. Such rights, if the
statutory procedures were complied with, could lead to a judicial
determination of the fair value (excluding any element of value arising from
the accomplishment or expectation of the Second-Step Transaction) required to
be paid in cash to such dissenting holders for their Shares. Any such judicial
determination of the fair value of Shares could be based upon considerations
other than, or in addition to, the price paid in the Offer and the market
value of the Shares, including asset values and the investment value of the
Shares. The value so determined could be more or less than the Purchase Price
per Share pursuant to the Offer or the consideration per Share to be paid in
the Second-Step Transaction.
THE FOREGOING SUMMARY OF THE RIGHTS OF OBJECTING STOCKHOLDERS DOES NOT
PURPORT TO BE A COMPLETE STATEMENT OF THE PROCEDURES TO BE FOLLOWED BY
STOCKHOLDERS DESIRING TO EXERCISE ANY AVAILABLE APPRAISAL RIGHTS. THE
PRESERVATION AND EXERCISE OF APPRAISAL RIGHTS REQUIRE STRICT ADHERENCE TO THE
APPLICABLE PROVISIONS OF THE DGCL.
13. EFFECTS OF THE OFFER ON THE MARKET FOR SHARES; REGISTRATION UNDER THE
EXCHANGE ACT
If consummated, the Offer alone, or the Offer followed by the Second-Step
Transaction, would result in: (i) the delisting of the Shares on the AMEX,
(ii) the Shares becoming eligible for termination of registration pursuant to
Section 12(g)(4) of the Exchange Act, (iii) a change in the composition of the
present board of directors and executive officers of the Company, and (iv) a
change in the capitalization of the Company. The Company's purchase of Shares
pursuant to the Offer will reduce the number of Shares that might otherwise
trade publicly, will reduce the number of stockholders and, depending on the
number of Shares so purchased, could adversely affect the liquidity and market
value of the remaining Shares held by the public.
The Shares are currently traded on the AMEX. Following the Offer, the Shares
will likely be delisted from the AMEX and deregistered under the Exchange Act.
As of September 4, 1997, there were 1,611,472 Shares publicly held (for
purposes of the AMEX) and 273 holders of record of the outstanding Shares.
Depending upon the number of Shares tendered and purchased pursuant to the
Offer and the number of Shares accumulated by other parties, the Shares will
likely no longer meet the requirements for continued listing on the AMEX.
Pursuant to the AMEX's published guidelines, shares of common stock are not
eligible to be included for listing if, among other things, the number of
shares publicly held falls below 250,000, the number of record and beneficial
holders of shares falls below 300 or the aggregate market value of such
publicly held shares is less than $1,000,000.
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Shares held directly or indirectly by an officer or director of the issuer or
by any beneficial owner of more than 5% of the shares of the issuer will
ordinarily not be considered as being publicly held for this purpose. In the
event the Shares were no longer listed on the AMEX, price quotations might
still be available from other sources. The extent of the public market for the
Shares and the availability of such quotations would, however, depend upon the
number of holders of Shares remaining at such time, the interest in
maintaining a market in the Shares on the part of securities firms, the
termination of registration under the Exchange Act as described below and
other factors.
The Shares are currently "margin securities" under the rules of the Federal
Reserve Board. Among other things, this has the effect of allowing brokers to
extend credit on the collateral of such Shares. Depending upon factors similar
to those described above regarding listing and market quotations, it is likely
that, following the tender and purchase of the Shares pursuant to the Offer,
the Shares will no longer constitute "margin securities" for purposes of the
Federal Reserve Board's margin regulations. In such event, Shares could no
longer be used as collateral for margin loans made by brokers.
The Shares are currently registered under the Exchange Act, which requires,
among other things, that the Company furnish certain information to its
stockholders and to the SEC and comply with the SEC's proxy rules in
connection with meetings of the Company's stockholders. Registration of the
Shares under the Exchange Act will be terminated upon application by the
Company to the SEC if the Shares are not listed on a national securities
exchange and there are fewer than 300 holders of record of the Shares.
The termination of the registration of the Shares under the Exchange Act
would substantially reduce the information required to be furnished by the
Company to its stockholders and to the SEC and would render inapplicable
certain provisions of the Exchange Act, including requirements that the
Company file periodic reports (including financial statements), the
requirements of Rule 13e-3 under the Exchange Act with respect to "going
private" transactions, requirements that the Company's officers, directors and
ten-percent stockholders file certain reports concerning ownership of the
Company's equity securities and provisions that any profit by such officers,
directors and stockholders realized through purchases and sales of the
Company's equity securities within any six-month period may be recaptured by
the Company. In addition, the ability of "affiliates" of the Company and other
persons to dispose of Shares which are "restricted securities" under Rule 144
under the Securities Act may be impaired or eliminated. If registration of the
Shares under the Exchange Act were terminated, the Shares would no longer be
"margin securities" or eligible for listing on the AMEX.
14. EXTENSION OF TENDER PERIOD; TERMINATION; AMENDMENTS
Subject to the restriction on the Company's right to amend, modify or waive
the terms and conditions of the Offer pursuant to the Purchase Agreement, the
Company expressly reserves the right, in its sole discretion, at any time or
from time to time and regardless of whether or not any of the events set forth
in "The Offer--Section 5" shall have occurred or shall be deemed by the
Company to have occurred, to extend the period of time during which the Offer
is open and thereby delay acceptance for payment of any Shares by giving oral
or written notice of such extension to the Depositary and making a public
announcement thereof. During any such extension, all Shares previously
tendered and not purchased or withdrawn will remain subject to the Offer,
except to the extent that such Shares may be withdrawn as set forth in "The
Offer--Section 3." Also, subject to the restriction on the Company's right to
amend, modify or waive the terms and conditions of the Offer pursuant to the
Purchase Agreement, the Company expressly reserves the right, in its sole
discretion, to terminate the Offer and not accept for payment or pay for any
Shares not theretofore accepted for payment or paid for or, subject to
applicable law, to postpone payment for Shares upon the occurrence of any of
the conditions specified in "The Offer--Section 5" or otherwise by giving oral
or written notice of such termination or postponement to the Depositary and
making a public announcement thereof.
The Company's reservation of the right to delay payment for Shares which it
has accepted for payment is limited by Rule 13e-4(f)(5) promulgated under the
Exchange Act, which requires that the Company must pay the consideration
offered or return the Shares tendered promptly after termination or withdrawal
of a tender offer.
31
<PAGE>
Subject to compliance with applicable law, and again subject to the
restriction on the Company's right to amend, modify or waive the terms and
conditions of the Offer pursuant to the Purchase Agreement, the Company
further reserves the right, in its sole discretion, and regardless of whether
or not any of the events set forth in "The Offer--Section 5" shall have
occurred or shall be deemed by the Company to have occurred, to amend the
Offer in any respect (including, without limitation, by decreasing or
increasing the consideration offered in the Offer to owners of Shares or by
decreasing the number of Shares being sought in the Offer) or to waive the
limitation on the minimum number of Shares to be purchased pursuant to the
Offer.
Amendments to the Offer may be made at any time or from time to time
effected by public announcement thereof, such announcement, in the case of an
extension, to be issued no later than 9:00 a.m., New York City time, on the
next business day after the previously scheduled Expiration Date. Any
disclosure of a material change in the information published, sent or given to
stockholders will be disseminated promptly to stockholders in a manner
reasonably designed to inform stockholders of such change. Without limiting
the manner in which the Company may choose to make a public announcement
pursuant to or concerning the Offer, except as required by applicable law, the
Company shall have no obligation to publish, advertise or otherwise
communicate any such public announcement other than by making a release to the
Dow Jones News Service.
If the Company makes a material change in the terms of the Offer or the
information concerning the Offer or waives a material condition of the Offer,
the Company will disseminate additional tender offer materials and extend the
Offer to the extent required by Rules 13e-4(d)(2) and 13e-4(e)(2) under the
Exchange Act. The minimum period during which an offer must remain open
following material changes in the terms of the offer or information concerning
the offer (other than a change in price or a change in percentage of
securities sought) will depend on the facts and circumstances then existing,
including the relative materiality of the changed terms or information. If (a)
the Company (i) increases or decreases the price at which Shares may be
properly tendered or (ii) decreases the number of Shares being sought, and (b)
the Offer is scheduled to expire at any time earlier than the expiration of a
period ending on the tenth business day from and including the date that
notice of such increase or decrease is first published, sent or given, the
Offer will be extended until the expiration of such ten-business-day period.
15. FEES AND EXPENSES
The Company has retained Prudential Securities as its financial advisor in
connection with the Offer. Prudential Securities will receive a fee of
$1,681,484 for its services as financial advisor. The Company will also
reimburse Prudential Securities for its reasonable out-of-pocket expenses
relating to the Offer. The Company has agreed to indemnify Prudential
Securities against certain liabilities in connection with the Offer, including
certain liabilities under the federal securities laws.
The Company has retained Beacon Hill Partners, Inc. as Information Agent and
ChaseMellon Shareholder Services, L.L.C. as Depositary in connection with the
Offer. The Information Agent and the Depositary will each receive reasonable
and customary compensation for customary services in connection with the Offer
and will be reimbursed for customary and reasonable out-of-pocket expenses.
The Company has agreed to indemnify the Information Agent and the Depositary
against certain liabilities in connection with the Offer, including certain
liabilities under the federal securities laws. Neither the Information Agent
nor the Depositary has been retained to, or is authorized to, make
solicitations or recommendations in connection with the Offer.
The Company will not pay any fees or commissions to any broker, dealer,
commercial bank, trust company or other person for soliciting Shares pursuant
to the Offer. The Company will, however, on request, reimburse such persons
for customary handling and mailing expenses incurred in forwarding materials
in respect of the Offer to the beneficial owners for which they act as
nominees. No broker, dealer, commercial bank or trust company has been
authorized to act as an agent for the Company for the purpose of the Offer.
The Company will not pay (or cause to be paid) any stock transfer taxes on its
purchase of Shares pursuant to the Offer, except as otherwise provided in
Instruction 6 of the Letter of Transmittal.
32
<PAGE>
Estimated costs and fees in connection with the Offer, all of which are the
obligation of the Company if the Offer is consummated, are as follows:
<TABLE>
<S> <C>
Solicitation fees and expenses............................. $ 33,000
Financial advisory fees.................................... 1,681,484
Filing fees................................................ 71,820
Legal, accounting, and other professional fees............. 900,000
Printing and distribution costs............................ 25,000
Financing costs............................................ 4,125,000(/1/)
Severence, incentive payments and related expenses......... 5,775,000
Structuring fee............................................ 1,472,000
Miscellaneous.............................................. 41,696
-----------
TOTAL.................................................... $14,125,000
===========
</TABLE>
- --------
(1) If the Company issues the Bridge Notes to the Bank, the financing costs
will increase by $425,000.
If the Offer is not consummated, the Company and VS&A will be responsible
for their respective expenses incurred in connection with the Offer, in which
case the total costs to be borne by the Company are estimated at $625,000. The
above amounts are estimates only and actual expenditures may vary
substantially from the estimates depending on the circumstances.
16. MISCELLANEOUS
The Offer is not being made to, nor will the Company accept tenders from or
on behalf of, holders of Shares in any jurisdiction in which the making of the
Offer or its acceptance would not be in compliance with the laws of such
jurisdiction. The Company is not aware of any jurisdiction where the making of
the Offer or the tender of Shares would not be in compliance with applicable
law. If the Company becomes aware of any jurisdiction where the making of the
Offer or the tender of Shares is not in compliance with any applicable law,
the Company will make a good faith effort to comply with such law. If, after
such good faith effort, the Company cannot comply with such law, the Offer
will not be made to (nor will tenders be accepted from or on behalf of) the
holders of Shares residing in such jurisdiction. In any jurisdiction in which
the securities, blue sky or other laws require the Offer to be made by a
licensed broker or dealer, the Offer will be deemed to be made on the
Company's behalf by one or more registered brokers or dealers licensed under
the laws of such jurisdiction.
T/SF Communications Corporation
September 8, 1997
33
<PAGE>
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
The following table sets forth information with respect to each Director and
executive officer, as well as with respect to certain other key employees of
T/SF Communications Corporation (the "Company"). All Directors of the Company
hold office until the next Annual Meeting of Stockholders and until the
election and qualification of their successors. Except as noted, each officer
was elected in 1996 at the annual meeting of the Board of Directors to serve
for one year or, if earlier or later, until the next Annual Meeting of the
Board of Directors. Each individual listed below is a citizen of the United
States except for Stuart P. Honeybone who is a citizen of the United Kingdom.
<TABLE>
<CAPTION>
DIRECTOR OR OFFICER
OF THE COMPANY OR
TRIBUNE/SWAB-FOX OR
NAME AGE EMPLOYEE SINCE(1) POSITION WITH THE COMPANY
---- --- ------------------- -------------------------
<S> <C> <C> <C>
Howard G. Barnett, 47 1984 Chairman, President, Chief
Jr. .................... Executive Officer and Director
2407 East Skelly Drive
Tulsa, Oklahoma 74105
Robert E. Craine, Jr. .. 49 1985 Executive Vice President and
2407 East Skelly Drive Director
Tulsa, Oklahoma 74105
J. Gary Mourton......... 50 1980 Senior Vice President--Finance,
2407 East Skelly Drive Chief Financial Officer and
Tulsa, Oklahoma 74105 Treasurer
William N. Griggs....... 65 1989 Director
Griggs & Santow
23rd Floor, 75 Wall
Street
New York, New York 10005
Mark A. Leavitt......... 38 1989 Director
Prudential Securities
18th Floor
One New York Plaza
New York, New York
10292-2018
David Lloyd Jones....... 58 1991 Director
11312 South Erie
Tulsa, Oklahoma 74137
Jenkin Lloyd Jones...... 61 1984 Director
6447 South Louisville
Avenue
Tulsa, Oklahoma 74136
Robert J. Swab.......... 60 1969 Director
P.O. Box 622
Vashon, Washington 98070
Martin A. Vaughan....... 70 1984 Director
2405 East Skelly Drive
Tulsa, Oklahoma 74105
Stuart P. Honeybone..... 55 1986 Vice President of the Company
2407 East Skelly Drive and President of G.E.M.
Tulsa, Oklahoma 74105 Communications, Inc. ("G.E.M.")
</TABLE>
S-1
<PAGE>
<TABLE>
<CAPTION>
DIRECTOR OR OFFICER
OF THE COMPANY OR
TRIBUNE/SWAB-FOX OR
NAME AGE EMPLOYEE SINCE(1) POSITION WITH THE COMPANY
---- --- ------------------- -------------------------
<S> <C> <C> <C>
Richard A. Wimbish...... 53 1987 President of Transportation
Transportation Information Services, Inc.
Information Services, ("TISI")
Inc.
Suite 200, Grant
Building
4110 South 100th East
Avenue
Tulsa, Oklahoma 74146
Robert Frank............ 46 1996 President of CORSEARCH, Inc.
CORSEARCH, Inc. ("CORSEARCH")
7th Floor
28 West 23rd
New York, New York 10010
W. Michael Goodwin...... 47 1996 President and Chief Executive
Galaxy Registration, Officer of Atwood Convention
Inc. Publishing, Inc. ("Atwood")
1888 North Market Street and Galaxy Registration, Inc.
Frederick, Maryland ("Galaxy")
21705
Jimmy C. Strong......... 63 1990 Vice President--Human Resources
2407 East Skelly Drive
Tulsa, Oklahoma 74105
Linda F. Toon........... 53 1985 Secretary
2407 East Skelly Drive
Tulsa, Oklahoma 74105
</TABLE>
- --------
(1) As the Company was not formed until 1989, if the date indicated is prior
to 1989, this represents the date that the individual was first employed
or became an officer or director of Tribune/Swab-Fox Companies, Inc.
("Tribune/Swab-Fox"), the former parent company of the Company.
HOWARD G. BARNETT, JR.--Became Executive Vice President of Tribune/Swab-Fox
on January 1, 1985, and was elected President in March, 1991, and Chief
Executive Officer on August 1, 1993. He was elected President of the Company
on its formation in 1989, and was elected Chairman and Chief Executive Officer
on August 1, 1993. For approximately ten years prior to joining Tribune/Swab-
Fox, Mr. Barnett was a member of the law firm of Sneed, Lang, Adams & Barnett,
Tulsa, Oklahoma. Mr. Barnett is the cousin of David Lloyd Jones and Jenkin
Lloyd Jones, Jr.
ROBERT E. CRAINE, JR.--Joined Tribune/Swab-Fox in November, 1985, as
President of TSF Capital Corp., a then wholly-owned subsidiary of
Tribune/Swab-Fox. He became Vice President of Tribune/Swab-Fox in May, 1986,
and Senior Vice President in August, 1988. Mr. Craine became Senior Vice
President of the Company upon its formation in 1989 and became Executive Vice
President and a Director in March, 1994. For the 11 years preceding his
joining Tribune/Swab-Fox, Mr. Craine was a member of the law firm of Gable &
Gotwals, Inc., Tulsa, Oklahoma.
J. GARY MOURTON--Joined Tribune/Swab-Fox as Chief Financial Officer in 1980
and became Vice President--Finance and Treasurer in 1984. For the 11 years
prior to that time, Mr. Mourton was with the accounting firm of Arthur
Andersen LLP. Mr. Mourton is a certified public accountant. Mr. Mourton became
Senior Vice President--Finance, Chief Financial Officer and Treasurer of the
Company upon its formation in 1989.
WILLIAM N. GRIGGS--Has been a Managing Director of Griggs & Santow
Incorporated, a financial and economic consulting firm, since 1983. Dr. Griggs
previously served as Financial Economist at the Federal Reserve Bank of Dallas
and Deputy to the Assistant Secretary of the Treasury responsible for economic
policy.
S-2
<PAGE>
Prior to forming his own firm, Dr. Griggs worked over the years in Wall Street
with Aubrey G. Lanston, Lehman Brothers and J. Henry Schroder Bank & Trust
Company. He currently serves on the Board of Directors of Massachusetts Mutual
Life Insurance company, and its Investment Policy Committee. Dr. Griggs
received his Ph.D. from Ohio State University.
MARK A. LEAVITT--Joined Prudential Securities Incorporated, an investment
banking firm, as a Managing Director in 1996. For the nine years prior to
joining Prudential Securities, Mr. Leavitt was with another investment banking
firm, Oppenheimer & Co., Inc., joining it as a Vice President in the Corporate
Finance Department in 1987, and became Senior Vice President in 1989 and
Managing Director on May 1, 1992. For the seven years prior to joining
Oppenheimer, Mr. Leavitt was with Continental Illinois National Bank, and was
a Senior Director in the Capital Markets Group when he left to join
Oppenheimer & Co., Inc.
DAVID LLOYD JONES--Served as Vice President and Director of Tulsa Tribune
Company, a wholly-owned subsidiary of the Company ("Tribune"), from 1984 until
1992. Mr. Jones was elected as a Director of the Company in 1991. Mr. Jones,
with this wife, currently owns and manages a book store in Tulsa, Oklahoma.
Mr. Jones is the cousin of Howard G. Barnett, Jr. and the brother of Jenkin
Lloyd Jones, Jr.
JENKIN LLOYD JONES, JR.--Was Vice President of Tribune from 1967, and became
Executive Director of The Tulsa Tribune, a newspaper published by Tribune, in
1975, was made Editor in 1988 and in November, 1991, was made Publisher. Mr.
Jones currently writes for various publications on a contract or a freelance
basis. Mr. Jones is the brother of David Lloyd Jones and a cousin of Howard G.
Barnett, Jr.
ROBERT J. SWAB--Has been associated with Tribune/Swab-Fox and its
predecessors and has served as a Director of such companies from May, 1969, to
May, 1995. He was Executive Vice President, Secretary and Treasurer of
Tribune/Swab-Fox or such predecessors from 1969 through January, 1979,
President from January, 1979 to April, 1980, and Chairman of the Board from
April, 1980 to October, 1984, and Chairman of the Executive Committee from
October 1, 1984, until December, 1994, when he retired.
MARTIN A. VAUGHAN--Is currently the Chairman of the Board, President and
Chief Executive Officer, Director and major owner of Midwest Energy
Corporation, a privately-held oil and gas exploration company, and of Midwest
Energy Companies, Inc., a public international oil and gas exploration
company. Mr. Vaughan has been with such companies or their predecessors since
1982. Mr. Vaughan was a director of Tribune/Swab-Fox from 1984 to May, 1995,
and was Vice Chairman of that Board from August, 1993, to May, 1995.
STUART P. HONEYBONE--Joined Tribune/Swab-Fox in June, 1986, as Vice
President of TSF Capital Corp., a then wholly-owned subsidiary of
Tribune/Swab-Fox, and became Vice President of Tribune/Swab-Fox in 1988. Mr.
Honeybone became Vice President of the Company upon its formation in 1989. Mr.
Honeybone became President of G.E.M. (formerly BMT Communications, Inc.), a
wholly-owned subsidiary of the Company, in December, 1994. From September,
1985, until joining Tribune/Swab-Fox, Mr. Honeybone was the owner and chief
executive officer of HBO Management, a consulting firm specializing in problem
or troubled businesses. For the six years preceding this, Mr. Honeybone was
with Hinderliter Industries, Inc. and was Group Vice President, Energy Group,
at the time of his leaving the employ of such company.
RICHARD A. WIMBISH--Joined TISI, a wholly-owned subsidiary of the Company,
as Controller in 1987 and became Executive Vice President in 1990. Mr. Wimbish
was made President of TISI in 1991. Prior to joining TISI, Mr. Wimbish was
Controller and Chief Financial Officer of Carlson Reserve Corporation from
1981 through 1986.
ROBERT FRANK--Founded CORSEARCH in 1983 and has been the President of such
company on a full time basis since such time (CORSEARCH was acquired by T/SF
in August, 1996). Prior to that time, Mr. Franks served as Adjunct Professor
at Ithaca College and also taught at Cornell University.
S-3
<PAGE>
W. MICHAEL GOODWIN--Joined the Company in December, 1996, as President and
Chief Executive Officer of both Atwood and Galaxy, wholly-owned subsidiaries
of the Company which together comprise the Company's Exposition Services
Division. Prior to joining Atwood-Galaxy, Mr. Goodwin was founder and
President of Falcon Sports Group, Inc., a company which focused on developing
and introducing new sports media properties. Before forming his own company in
1995, Mr. Goodwin was Executive Vice President and Chief Operating Officer of
Professional Sports Publications, a publisher of sporting event game day
magazines (1992-1995) and was Vice President of Marketing and Development of
Kraft General Foods--Kraft Dairy Division (1989-1991.) From 1984 through 1988,
Mr. Goodwin was Director of New Business Development for General Foods
Corporation.
JIMMY C. STRONG--Became Vice President--Human Resources of the Company in
1990. For the year before joining the Company, Mr. Strong was with Hinderliter
Heat Treating, Inc., as Vice President of Human Resources, and was with
Hinderliter Industries, Inc., a diversified manufacturing company, for the
preceding 16 years.
LINDA F. TOON--Has been employed as Assistant to Mr. Barnett since 1985 and
became Secretary of the Company in December, 1995.
S-4
<PAGE>
ANNEX A
LOGO
PRIVATE AND CONFIDENTIAL
August 15, 1997
Board of Directors
T/SF Communications Corporation
2407 East Skelly Drive
Tulsa, Oklahoma 74105
Members of the Board:
We understand that VS&A Communications Partners II, L.P., a Delaware limited
partnership ("Parent"), VS&A--T/SF, Inc., a Delaware corporation and a wholly-
owned subsidiary of Parent ("Sub"), and T/SF Communications Corporation, a
Delaware corporation (the "Company"), propose to enter into a stock purchase
agreement (the "Agreement") providing for the recapitalization of the Company
pursuant to which the company shall commence a tender offer (the "Offer") to
purchase all of the Company's outstanding common stock, par value $0.10 per
share (the "Shares"), for $40.25 per share, net to the seller in cash (the
"Offer Price"). Pursuant to the Agreement, the Sub will agree to purchase from
the Company not less than 869,565 newly issued shares of the Company's common
stock at the Offer Price, contemporaneously with the closing of the Offer. As a
condition to the purchase of Shares by the Company pursuant to the Offer a
minimum of 1,600,000 Shares must be validly tendered and not withdrawn prior to
the expiration of the Offer. The Agreement further provides that as soon as
practicable following completion of the Offer, Sub shall cause the Company to
effect either a merger of the Sub with and into the Company or a reverse stock
split of the Shares (the "Remaining Share Cash Out"), pursuant to which each
Share not tendered in the Offer shall be converted into the right to receive
$40.25 in cash. We further understand that concurrently with the execution of
the Agreement, Parent, Sub and certain stockholders of the Company,
representing 1,121,472 Shares or approximately 34% of the Shares currently
outstanding, propose to enter into separate stockholder agreements (the
"Stockholder Agreement") pursuant to which such stockholders will, inter alia,
agree to tender their Shares in the Offer. In addition, we have been advised
that pursuant to a separate agreement between Parent and Fir Tree Partners and
its affiliates ("Fir Tree"), the owner of 487,500 Shares (the "Fir Tree
Shares"), Fir Tree will agree not to tender the Fir Tree Shares in the Offer,
and Parent and Fir Tree will agree that Fir Tree will remain a stockholder of
the Company following the Remaining Share Cash Out.
You have requested our opinion as to the fairness from a financial point of
view to the stockholders of the Company of the cash consideration to be
received by such stockholders in the Offer and the Remaining Share Cash Out.
In conducting our analysis and arriving at the opinion expressed herein, we
have reviewed such materials and considered such financial and other factors we
deemed relevant under the circumstances, including:
(i) a draft dated August 14, 1997 of the Agreement;
(ii) a draft dated August 15, 1997 of the Stockholder Agreement;
(iii) certain publicly available historical financial and operating data
concerning the Company including the Annual Report to Stockholders and
Annual Report on Form 10-K for the year ended December 31, 1996 and the
Quarterly Report on Form 10-Q for the quarter ended June 30, 1997;
(iv) certain information of the Company, including financial forecasts
relating to the business, earnings, cash flow, assets and prospects of the
Company prepared by the management of the Company;
(v) publicly available financial, operating and stock market data
concerning certain companies engaged in businesses we deemed relatively
comparable to the Company or otherwise relevant to our inquiry;
A-1
<PAGE>
(vi) the financial terms of certain recent transactions we deemed
relevant to our inquiry;
(vii) the commitments for the financing of the Offer arranged by Parent
with First Union National Bank, dated August 6, 1997;
(viii) the historical market prices and trading volumes of the Shares;
and
(ix) such other financial studies, analyses and investigations we deemed
appropriate.
We have, with your approval, assumed that the drafts of the Agreement and
Stockholder Agreement when executed in definitive form by the parties thereto
will conform in all material respects to the drafts of such agreements which
we reviewed.
We have met with members of the senior management of the Company to discuss
the prospects for the Company's businesses. In connection with our review and
analysis and in arriving at our opinion, we have relied upon the accuracy and
completeness of the financial and other information provided to us by the
Company and have not undertaken any independent verification of such
information or undertaken an independent appraisal of the assets or
liabilities of the Company. With respect to the financial forecasts provided
to us by the Company, we have assumed that such forecasts (and assumptions and
bases therefor) have been reasonably prepared and represent management's best
currently available estimate as to the future financial performance of the
Company. Further, our opinion is necessarily based on economic, financial and
market conditions as they exist and can be evaluated as of the date hereof.
We were retained by the Company to provide financial advisory services in
connection with the possible sale of both a subsidiary of the Company and the
Company to render this opinion to the Board of Directors of the Company. We
will receive an advisory fee upon signing of the Agreement and we will receive
an additional advisory fee which is contingent upon the completion of the
Offer. We have not been authorized by the Company or its Board of Directors to
solicit, nor have we solicited indications of interest from third parties for
the acquisition of the Company. However, we were retained by the Company to
assist in soliciting indications of interest from third parties for a sale
transaction involving Transportation Information Services, Inc., the Company's
largest subsidiary as measured in revenues. Our opinion does not address the
relative merits of the Offer and the Remaining Share Cash Out with any
alternative business strategy that may be available to the Company.
As you are aware, an officer of Prudential Securities Incorporated serves as
a member of the Board of Directors of the Company. In addition, in the
ordinary course of business Prudential Securities Incorporated may trade
Shares for its own account and for the accounts of customers and, accordingly,
may at any time hold a long or short position in the Shares.
This letter and the opinion expressed herein are for the use of the Board of
Directors of the Company. This opinion does not constitute a recommendation to
the stockholders of the Company as to whether such stockholders should tender
their Shares in the Offer or as to any action such stockholders should take in
connection with the Remaining Share Cash Out. This opinion may not be
reproduced, summarized, excerpted from or otherwise publicly referred to or
disclosed in any manner, without our prior written consent, except that the
Company may include this opinion in its entirety in any disclosure document to
be sent to the Company's stockholders or filed with the Securities and
Exchange Commission relating to the Offer or the Remaining Share Cash Out.
Based upon and subject to the foregoing, we are of the opinion that, as of
the date hereof, the cash consideration to be received by the stockholders of
the Company in the Offer and the Remaining Share Cash Out is fair from a
financial point of view to such stockholders.
Very truly yours,
LOGO
PRUDENTIAL SECURITIES INCORPORATED
A-2
<PAGE>
Facsimile copies of the Letter of Transmittal, properly completed and duly
executed, will be accepted. The Letter of Transmittal, certificates for Shares
and any other required documents should be sent or delivered by each
stockholder of the Company or such stockholder's broker, dealer, commercial
bank, trust company or other nominee to the Depositary at one of its addresses
set forth below.
The Depositary for the Offer is:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
By Mail: By Hand Delivery: By Overnight Delivery:
Post Office Box 3305 120 Broadway--13th Floor 85 Challenger Road
South Hackensack, NJ New York, NY 10271 Mail Drop Reorganization
07606 Attn: Reorganization Dept. Dept.
Attn: Reorganization Ridgefield Park, NY
Dept. 07660
Attn: Reorganization
Dept.
By Facsimile:
201-329-8936
Confirm by Telephone:
201-296-4860
----------------
Any questions or requests for assistance or for additional copies of this
Offer to Purchase, the Letter of Transmittal or the Notice of Guaranteed
Delivery may be directed to the Information Agent at its address and the
telephone numbers set forth below. Stockholders may also contact their broker,
dealer, commercial bank, trust company or other nominee for assistance
concerning the Offer. To confirm delivery of your Shares, stockholders are
directed to contact the Depositary.
The Information Agent for the Offer is:
BEACON HILL PARTNERS, INC.
90 Broad Street
20th Floor
New York, New York 10004
(212) 843-8500
or
Call Toll Free
(800) 301-8755
<PAGE>
EXHIBIT (a)(2)
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
OF
T/SF COMMUNICATIONS CORPORATION
PURSUANT TO THE OFFER TO PURCHASE DATED SEPTEMBER 8, 1997
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW
YORK CITY TIME, ON MONDAY, OCTOBER 6, 1997, UNLESS THE OFFER IS
EXTENDED.
THE DEPOSITARY FOR THE OFFER IS:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
By Mail: By Hand Delivery: By Overnight Delivery:
120 Broadway--13th Floor 85 Challenger Road
Post Office Box 3305 New York, NY 10271 Mail Drop Reorg. Dept.
South Hackensack, NJ Attn: Reorganization Department Ridgefield Park, NJ
07606 07660
Att: ReorganizationnDepartment By Facsimile: Attn: Reorganization
Department
(201) 329-8936
Confirm by Telephone:
(201) 296-4860
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE OR TRANSMISSION OF INSTRUCTIONS TO A FACSIMILE NUMBER OTHER THAN THE ONE
LISTED ABOVE DOES NOT CONSTITUTE A VALID DELIVERY.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be used either if certificates for Shares
(as defined below) are to be forwarded herewith or if delivery of Shares is to
be made by book-entry transfer to an account maintained by the Depositary (as
defined below) at a Book-Entry Transfer Facility, as defined in and pursuant
to the procedures set forth in "The Offer--Section 2" of the Offer to Purchase
(as defined below). Stockholders who deliver Shares by book-entry transfer are
referred to herein as "Book-Entry Stockholders" and other stockholders are
referred to herein as "Certificate Stockholders."
Stockholders whose certificates for Shares are not immediately available or
who cannot comply with the procedure for book-entry transfer on a timely
basis, or who cannot deliver all required documents to the Depositary prior to
the Expiration Date (as defined in "The Offer--Section 1" of the Offer to
Purchase), may tender their Shares in accordance with the guaranteed delivery
procedure set forth in "The Offer--Section 2" of the Offer to Purchase. See
Instruction 2 in the accompanying Instructions.
DELIVERY OF DOCUMENTS TO A BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE
DELIVERY TO THE DEPOSITARY.
DESCRIPTION OF SHARES TENDERED
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NAME(S) AND
ADDRESS(ES) OF
REGISTERED
HOLDER(S)
(PLEASE FILL IN
EXACTLY AS
NAME(S)
APPEAR(S) ON SHARES TENDERED
CERTIFICATE(S)) (ATTACH ADDITIONAL LIST IF NECESSARY)
- ----------------------------------------------------------------------
TOTAL NUMBER
OF SHARES NUMBER
CERTIFICATE REPRESENTED BY OF SHARES
NUMBER(S)(/1/) CERTIFICATE(S)(/1/) TENDERED(/2/)
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
<S> <C> <C> <C>
TOTAL SHARES
</TABLE>
- -------------------------------------------------------------------------------
(/1/Need)not be completed by Book-Entry Stockholders.
(/2/Unless)otherwise indicated, it will be assumed that all Shares
described above are being tendered. See Instruction 4 in the
accompanying Instructions.
<PAGE>
[_]CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER
MADE TO AN ACCOUNT MAINTAINED BY THE DEPOSITARY WITH A BOOK-ENTRY TRANSFER
FACILITY AND COMPLETE THE FOLLOWING (ONLY FINANCIAL INSTITUTIONS THAT ARE
PARTICIPANTS IN THE SYSTEM OF ANY BOOK-ENTRY TRANSFER FACILITY MAY DELIVER
SHARES BY BOOK-ENTRY TRANSFER):
Name of Tendering Institution: _________________________________________
Select Applicable Book-Entry Transfer Facility (check one box):
[_]The Depository Trust Company
[_]The Midwest Securities Trust Company
[_]Philadelphia Depository Trust Company
Account Number: ________________________________________________________
Transaction Code Number: _______________________________________________
[_]CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE
FOLLOWING:
Name(s) of Registered Holder(s):________________________________________
Date of Execution of Notice of Guaranteed Delivery:_____________________
Name of Institution which Guaranteed Delivery:__________________________
If Delivered by Book-Entry Transfer, Select Applicable Book-Entry
Transfer Facility (check one box):
[_]The Depository Trust Company
[_]The Midwest Securities Trust Company
[_]Philadelphia Depository Trust Company
Account Number:_________________________________________________________
Transaction Code Number:________________________________________________
<PAGE>
NOTE: SIGNATURES MUST BE PROVIDED BELOW PLEASE READ THE ACCOMPANYING
INSTRUCTIONS CAREFULLY
TO: ChaseMellon Shareholder Services, L.L.C.
Ladies and Gentlemen:
The undersigned hereby tenders to T/SF Communications Corporation, a
Delaware corporation (the "Company"), the above-described shares of common
stock, par value $.10 per share (the "Shares"), pursuant to the Offer to
Purchase dated September 8, 1997 (the "Offer to Purchase"), for payment for
all of the Shares at a price of $40.25 per share (the "Purchase Price"), net
to the seller in cash, upon the terms and subject to the conditions set forth
in the Offer to Purchase, receipt of which is hereby acknowledged, and in this
Letter of Transmittal (which, together with the Offer to Purchase, constitute
the "Offer").
Upon the terms and conditions of the Offer, subject to, and effective upon,
acceptance for payment of, and payment for, the Shares tendered herewith in
accordance with the terms of the Offer, the undersigned hereby sells, assigns,
and transfers to, or upon the order of, the Company, all right, title, and
interest in and to all of the Shares being tendered hereby and appoints
ChaseMellon Shareholder Services, L.L.C. (the "Depositary") the true and
lawful agent and attorney-in-fact of the undersigned with respect to such
Shares with full power of substitution (such power of attorney being deemed to
be an irrevocable power coupled with an interest) to the fullest extent of
such stockholder's rights with respect to such Shares to: (a) deliver such
Share Certificates (as defined herein) or transfer ownership of such Shares on
the account books maintained by a Book-Entry Transfer Facility, together in
either such case with all accompanying evidences of transfer and authenticity,
to or upon the order of the Company; (b) present certificates for such Shares
for cancellation and transfer of such Shares on the books of the Company; and
(c) receive all benefits and otherwise exercise all rights of beneficial
ownership of such Shares, all in accordance with the terms and conditions of
the Offer.
The undersigned hereby represents and warrants that: (a) the undersigned has
full power and authority to validly tender, sell, assign, and transfer the
Shares tendered hereby; (b) when and to the extent the Shares are accepted for
payment by the Company, the Company will acquire good, marketable, and
unencumbered title thereto, free and clear of all security interests, liens,
restrictions, charges, encumbrances, conditional sales agreements, and other
obligations relating to their sale or transfer, and the same will not be
subject to any adverse claim; (c) upon request, the undersigned will execute
and deliver any additional documents deemed by the Depositary or the Company
to be necessary or desirable to complete the sale, assignment, and transfer of
the Shares tendered hereby; and (d) the undersigned has read and agrees to all
the terms of the Offer.
The undersigned understands that all Shares properly tendered and not
withdrawn will be purchased at $40.25 per share (or such other price that may
be set forth in an amendment to the Offer), net to the seller in cash, upon
the terms and subject to the conditions of the Offer, and that the Company
will return all other Shares.
The undersigned recognizes that, under certain circumstances set forth in
the Offer to Purchase, the Company may terminate or amend the Offer or may not
be required to accept for payment any of the Shares tendered herewith or may
accept for payment fewer than all the Shares tendered herewith.
<PAGE>
All authority conferred or agreed to be conferred pursuant to this Letter of
Transmittal shall not be affected by, and shall survive, the death or
incapacity of the undersigned and any obligation of the undersigned hereunder
shall be binding upon the heirs, personal representatives successors and
assigns of the undersigned. Except as stated in the Offer to Purchase, this
tender is irrevocable.
The undersigned understands that the valid tender of Shares pursuant to one
of the procedures described in "The Offer--Section 2" of the Offer to Purchase
will constitute a binding agreement between the undersigned and the Company
upon the terms and subject to the conditions of the Offer.
Unless otherwise indicated herein under "Special Payment Instructions,"
please issue the check for the Purchase Price and/or return any certificate(s)
for Shares not tendered or accepted for payment in the name(s) of the
registered holder(s) appearing under "Description of Shares Tendered."
Similarly, unless otherwise indicated under "Special Delivery Instructions,"
please mail the check for the Purchase Price and/or return any certificate(s)
for Shares not tendered or accepted for payment (and accompanying documents,
as appropriate) to the address(es) of the registered holder(s) appearing under
"Description of Shares Tendered." In the event that both the Special Delivery
Instructions and the Special Payment Instructions are completed, please issue
the check for the Purchase Price and/or issue any certificates for Shares not
tendered or accepted for payment (and any accompanying documents, as
appropriate) in the name of, and deliver such check and/or return such
certificates (and any accompanying documents, as appropriate) to, the person
or persons so indicated. In the case of book-entry delivery of Shares, please
credit the account maintained at the Book-Entry Transfer Facility indicated
above with any Shares not accepted for payment. The undersigned recognizes the
Company has no obligation pursuant to the Special Payment Instructions to
transfer any Shares from the name of the registered holder(s) thereof if the
Company does not accept for payment any of the Shares so tendered.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
SPECIAL PAYMENT INSTRUCTIONS (SEE SPECIAL DELIVERY INSTRUCTIONS
INSTRUCTIONS 1, 4, 5, 6 AND 7) (SEE INSTRUCTIONS 1, 4, 5, 6 AND
7)
To be completed ONLY if certifi-
cate(s) for Shares not tendered To be completed ONLY if certifi-
or not accepted for payment cate(s) for Shares not tendered
and/or the check for the Purchase or not accepted for payment
Price of Shares accepted for pay- and/or the check for the Purchase
ment are to be issued in the name Price of Shares accepted for pay-
of someone other than the under- ment are to be sent to someone
signed. other than the undersigned, or to
the undersigned at an address
other than that shown above.
Issue: [_] Check [_] Certificate(s)
to:
Deliver: [_] Check [_] Certificate(s)
Name _____________________________ to:
(PLEASE PRINT) Name______________________________
Address __________________________ (PLEASE PRINT)
__________________________________ Address __________________________
(INCLUDING ZIP CODE) __________________________________
__________________________________ (INCLUDING ZIP CODE)
(SOCIAL SECURITY NUMBER OR OTHER
TAXPAYER IDENTIFICATION NUMBER)
<PAGE>
--IMPORTANT--
SIGN HERE
(SEE INSTRUCTIONS 1 AND 5)
(ALSO COMPLETE SUBSTITUTE FORM W-9 BELOW)
(Signature(s) of Holder(s)): _________________ Date: _________________
______________________ Date: ______________________
(Must be signed by the registered holder(s) exactly as name(s) appear(s) on
stock certificate(s) or on a security position listing or by person(s)
authorized to become registered holder(s) by certificates and documents
transmitted herewith. If signature is by trustees, executors,
administrators, guardians, attorneys-in-fact, agents, officers of
corporations, or others acting in a fiduciary or representative capacity,
please set forth full title and see Instruction 5.)
Name(s):____________________________________________________________________
__________________________________________________________________
(PLEASE PRINT NAME(S) AND, IF APPLICABLE, CAPACITY (FULL TITLE))
Address(es):________________________________________________________________
__________________________________________________________________
__________________________________________________________________
(INCLUDING ZIP CODE)
( )
__________________________________ ____________________________________
AREA CODE AND TELEPHONE NO. SOCIAL SECURITY NUMBER OR OTHER
TAXPAYER IDENTIFICATION NUMBER
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 1 AND 5)
Name of Firm Issuing Guarantee: ____________________________________________
Signature of Officer: _____________________ Date: _____________________
Name of Officer: ___________________________________________________________
(PLEASE PRINT NAME AND CAPACITY (FULL TITLE))
Address of Firm: ___________________________________________________________
________________________________________________________________
(INCLUDING ZIP CODE)
( )
__________________________________
AREA CODE AND TELEPHONE NO.
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. Except as otherwise provided below, all
signatures on this Letter of Transmittal must be guaranteed by a financial
institution (including most commercial banks, savings and loan associations,
and brokerage houses) which is a participant in the Securities Transfer Agents
Medallion Program, the New York Stock Exchange Medallion Signature Guarantee
Program, or the Stock Exchange Medallion Program (an "Eligible Institution").
Signatures on this Letter of Transmittal need not be guaranteed (a) if this
Letter of Transmittal is signed by the registered holders (which term, for
purposes of this document, includes any participant in any of the Book-Entry
Transfer Facilities' systems whose name appears on a security position listing
as the holder of the Shares) of Shares tendered herewith and such registered
holder has not completed the box entitled "Special Payment Instructions" or
the box entitled "Special Delivery Instructions" on this Letter of
Transmittal, or (b) if such Shares are tendered for the account of an Eligible
Institution. See Instruction 5.
2. DELIVERY OF LETTER OF TRANSMITTAL AND CERTIFICATES OR BOOK-ENTRY
CONFIRMATIONS. This Letter of Transmittal is to be used either if certificates
are to be forwarded herewith or if tenders are to be made pursuant to the
procedures for tender by book-entry transfer set forth in "The Offer--Section
2" of the Offer to Purchase. Certificates for all physically tendered Shares
("Share Certificates"), or confirmation of any book-entry transfer into the
Depositary's account at one of the Book-Entry Transfer Facilities of Shares
tendered by book-entry transfer, as well as this Letter of Transmittal (or a
facsimile thereof), properly completed and duly executed with any required
signature guarantees, and any other documents required by this Letter of
Transmittal, must be received by the Depositary at one of its addresses set
forth herein on or prior to the Expiration Date (as defined in "The Offer--
Section 1" of the Offer to Purchase). Delivery of documents to one of the
Book-Entry Transfer Facilities does not constitute delivery to the Depositary.
Stockholders whose certificates for Shares are not immediately available or
who cannot deliver all other required documents to the Depositary on or prior
to the Expiration Date or who cannot comply with the procedures for book-entry
transfer on a timely basis may nevertheless tender their Shares by properly
completing and duly executing a Notice of Guaranteed Delivery pursuant to the
guaranteed delivery procedure set forth in "The Offer--Section 2" of the Offer
to Purchase. Pursuant to such procedure: (a) such tender must be made by or
through an Eligible Institution; (b) a properly completed and duly executed
Notice of Guaranteed Delivery substantially in the form provided by the
Company must be received by the Depositary prior to the Expiration Date; and
(c) Share Certificates (or confirmation of any book-entry transfer into the
Depositary's account at one of the Book-Entry Transfer Facilities), as well as
this Letter of Transmittal (or a facsimile thereof), properly completed and
duly executed with any required signature guarantees and all other documents
required by this Letter of Transmittal, must be received by the Depositary
within three American Stock Exchange trading days after the date of execution
of such Notice of Guaranteed Delivery, all as provided in "The Offer--Section
2" of the Offer to Purchase.
If Share Certificates are forwarded separately to the Depositary, a properly
completed and duly executed Letter of Transmittal must accompany each such
delivery.
THE METHOD OF DELIVERY OF SHARE CERTIFICATES AND ALL OTHER REQUIRED
DOCUMENTS, INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY TRANSFER FACILITY, IS AT
THE ELECTION AND RISK OF THE TENDERING STOCKHOLDER. THE DELIVERY WILL BE
DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY (INCLUDING, IN THE
CASE OF A BOOK-ENTRY TRANSFER, BY BOOK-ENTRY CONFIRMATION). IF SUCH DELIVERY
IS BY MAIL, IT IS RECOMMENDED THAT SUCH CERTIFICATES AND DOCUMENTS BE SENT BY
REGISTERED MAIL, PROPERLY INSURED, WITH RETURN RECEIPT REQUESTED. IN ALL
CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE TIMELY DELIVERY.
No alternative, conditional, or contingent tenders will be accepted and no
fractional Shares will be purchased. All tendering stockholders, by execution
of this Letter of Transmittal (or facsimile thereof), waive any right to
receive any notice of the acceptance of their Shares for payment.
3. INADEQUATE SPACE. If the space provided herein is inadequate, the
certificate numbers and/or the number of Shares should be listed on a separate
schedule attached hereto.
<PAGE>
4. PARTIAL TENDERS (APPLICABLE TO CERTIFICATE STOCKHOLDERS ONLY). If fewer
than all the Shares evidenced by any certificate submitted are to be tendered,
fill in the number of Shares which are to be tendered in the box entitled
"Number of Shares Tendered." In such cases, new certificate(s) for the
remainder of the Shares that were evidenced by the old certificate(s) will be
sent to the registered holder(s), unless otherwise provided in the appropriate
box on this Letter of Transmittal, as soon as practicable after the Expiration
Date. All Shares represented by certificates delivered to the Depositary will
be deemed to have been tendered unless otherwise indicated as provided herein.
5. SIGNATURES ON LETTER OF TRANSMITTAL; STOCK POWERS AND ENDORSEMENTS.
(a) If this Letter of Transmittal is signed by the registered holder(s)
of the Shares tendered hereby, the signature(s) must correspond with the
name(s) as written on the face of the certificates without alteration,
enlargement, or any other change whatsoever.
(b) If any of the Shares tendered hereby are owned of record by two or
more joint holders, all such holders must sign this Letter of Transmittal.
(c) If any of the tendered Shares are registered in different names on
several certificates, it will be necessary to complete, sign, and submit as
many separate Letters of Transmittal as there are different registrations
of certificates.
(d) If this Letter of Transmittal or any certificates or stock powers are
signed by trustees, executors, administrators, guardians, attorneys-in-
fact, agents, officers of corporations, or others acting in a fiduciary or
representative capacity, such persons must so indicate when signing and
must submit proper evidence satisfactory to the Company of their authority
to act in that capacity.
(e) If this Letter of Transmittal is signed by the registered holder(s)
of the Shares listed and transmitted hereby, no endorsements of
certificates or separate stock powers are required unless payment is to be
made to, or certificates for Shares not tendered or accepted for payment
are to be issued in the name of, a person other than the registered
holder(s). If this Letter of Transmittal is signed by a person other than
the registered holder(s) of the certificate(s) listed, the certificate(s)
must be endorsed or accompanied by the appropriate stock powers, in either
case signed exactly as the name(s) of the registered holder(s) appear(s) on
the certificate(s). Signatures on such certificates or stock powers must be
guaranteed by an Eligible Institution. See Instruction 1.
6. STOCK TRANSFER TAXES. The Company will pay any stock transfer taxes with
respect to the transfer and sale of shares to it or its order pursuant to the
Offer. However, if payment is to be made to, or certificates for Shares not
purchased or tendered are to be registered in the name of, any person other
than the registered holder(s), or if tendered certificates are registered in
the name of any person other than the person(s) signing this Letter of
Transmittal, the amount of any stock transfer taxes (whether imposed on the
registered holder(s) or such person) payable on account of the transfer to
such person will be deducted from the Purchase Price if satisfactory evidence
of the payment of such taxes, or exemption therefrom, is not submitted.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If a check is to be issued in
the name of, and/or certificates for Shares not tendered or accepted for
payment are to be issued or returned to, a person other than the person(s)
signing this Letter of Transmittal, or if a check and/or such certificates are
to be mailed to a person other than the person(s) signing this Letter of
Transmittal or to an address other than that shown above, the appropriate
boxes on this Letter of Transmittal must be completed.
8. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions or requests for
assistance may be directed to the Information Agent at the address set forth
below. A stockholder may also obtain assistance concerning the Offer from a
broker, dealer, commercial bank, or trust company. Additional copies of the
Offer to Purchase, this Letter of Transmittal, the Notice of Guaranteed
Delivery, and other tender offer materials may be obtained from the
Information Agent.
9. SUBSTITUTE FORM W-9. Each tendering stockholder is required to provide
the Depositary with a correct Taxpayer Identification Number ("TIN"),
generally the stockholder's social security or federal employer identification
number, on Substitute Form W-9 below. Failure to provide the information on
the form may subject the tendering stockholder to 31% federal income tax
backup withholding on the payment of the Purchase Price. The box in Part 3 of
the form may be checked if the tendering stockholder has not been issued a TIN
and has applied for a TIN or intends to apply for a TIN in the near future. If
the box in Part 3 is checked and the Depositary is not provided with a TIN
within 60 days, the Depositary will withhold 31% of all payments of the
Purchase Price.
<PAGE>
10. IRREGULARITIES. All questions as to the number of Shares to be accepted
and the validity, form, eligibility (including time of receipt), and
acceptance for payment of any tender of Shares will be determined by the
Company, in its sole discretion, which determination shall be final and
binding on all parties. The Company reserves the absolute right to reject any
or all tenders determined by it not to be in proper form or the acceptance for
payment of which may, in the opinion of the Company's counsel, be unlawful.
The Company also reserves the absolute right to waive any of the conditions of
the Offer (except as provided in "The Offer--Section 5" of the Offer to
Purchase) and any defect or irregularity in the tender of any particular
Shares. The Company's interpretation of the terms and conditions of the Offer
(including these instructions) shall be final and binding on all parties. No
tender of Shares will be deemed properly made until all defects or
irregularities have been cured or waived. None of the Company, the Depositary,
the Information Agent, or any other person is or will be obligated to give
notice of any defects or irregularities in tenders, and none of them will
incur any liability for failure to give any such notice.
IMPORTANT: THIS LETTER OF TRANSMITTAL (TOGETHER WITH SHARE CERTIFICATES OR
CONFIRMATION OF BOOK-ENTRY TRANSFER AND ALL OTHER REQUIRED DOCUMENTS) OR THE
NOTICE OF GUARANTEED DELIVERY MUST BE RECEIVED BY THE DEPOSITARY PRIOR TO THE
EXPIRATION DATE.
IMPORTANT TAX INFORMATION
Under the federal income tax law, a stockholder whose tendered Shares are
accepted for purchase is required by law to provide the Depositary (as payer)
with such stockholder's correct TIN on Substitute Form W-9 below and to
certify that such TIN is correct (or that such stockholder is awaiting a TIN)
or otherwise establish a basis for exemption from backup withholding. If such
stockholder is an individual, the TIN is his or her social security number. If
a stockholder fails to provide a TIN to the Depositary, such stockholder may
be subject to a penalty imposed by the Internal Revenue Service and any
payments that are made to such stockholder with respect to Shares purchased
pursuant to the Offer may be subject to backup withholding of 31% (see below).
In addition, if a stockholder makes a false statement that results in no
imposition of backup withholding, and there was no reasonable basis for such
statement, an additional penalty may be imposed by the Internal Revenue
Service.
Certain stockholders (including, among others, all corporations and certain
foreign individuals) are not subject to these backup withholding and reporting
requirements. In order for a foreign individual to qualify as an exempt
recipient, that stockholder must generally submit a Form W-8, signed under
penalties of perjury, attesting to that individual's exempt status. A Form W-8
can be obtained from the Depositary. See the enclosed Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9 for
additional instructions.
If backup withholding applies, the Depositary is required to withhold 31% of
any payments made to the stockholder or payee. Backup withholding is not an
additional tax. Rather, the tax liability of persons subject to backup
withholding will be reduced by the amount of tax withheld. If withholding
results in an overpayment of taxes, a refund may be obtained from the Internal
Revenue Service.
The box in Part 3 of the Substitute Form W-9 may be checked if the tendering
stockholder has not been issued a TIN and has applied for a TIN or intends to
apply for a TIN in the near future. If the box in Part 3 is checked, the
stockholder or other payee must also complete the Certification of Awaiting
Taxpayer Identification Number below in order to avoid backup withholding. If
a stockholder's TIN is provided to the Depositary within 60 days of the date
of the Substitute Form-W-9, payment will be made to such stockholder without
the imposition of backup withholding. If a stockholder's TIN is not provided
to the Depositary within such 60-day period, the Depositary will make such
payment subject to backup withholding.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup withholding on payments made to a stockholder whose
tendered Shares are accepted for purchase, the stockholder is required to
notify the Depositary of his or its correct TIN by completing Substitute Form
W-9 certifying that the TIN provided on such Form is correct (or that such
stockholder is awaiting a TIN, in which case the stockholder should check the
box in Part 3 of the Substitute Form W-9) and that: (a) such stockholder is
exempt from backup withholding; (b) such stockholder has not been notified by
the Internal Revenue Service that such stockholder is subject to backup
withholding as a result of failure to report all interest or dividends; or (c)
the Internal Revenue Service has notified
<PAGE>
the stockholder that the stockholder is no longer subject to backup
withholding. The stockholder must sign and date the Substitute Form W-9 where
indicated, certifying that the information on such Form is correct.
Alternatively, a stockholder that qualifies as an exempt recipient (other
than a stockholder required to complete Form W-8 as described above) should
write "Exempt" in Part 1 of the Substitute Form W-9, enter its correct TIN,
and sign and date such Form where indicated.
WHAT NUMBER TO GIVE THE DEPOSITARY
The stockholder is required to give the Depositary the social security
number or employer identification number of the record holder of the Shares or
of the last transferee appearing on the transfers attached to, or endorsed on,
the Shares. If the Shares are in more than one name or are not in the name of
the actual holder, consult the enclosed Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9 for additional guidance
on which number to report.
<PAGE>
TO BE COMPLETED BY ALL TENDERING STOCKHOLDERS
(SEE INSTRUCTION 9)
PAYER'S NAME: CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
PART 1--PLEASE PROVIDE YOUR Social Security Number
TIN IN THE BOX AT RIGHT AND ----------------------
CERTIFY BY SIGNING AND
DATING BELOW.
SUBSTITUTE
FORM W-9 OR
DEPARTMENT OF
THE TREASURY Employer Identification
INTERNAL Number
REVENUE ----------------------
SERVICE PART 2--Check the box if you are NOT subject to
backup withholding under the provisions of Section
2406(a)(1)(C) of the Internal Revenue Code because
(1) you are exempt from backup withholding, or (2)
you have not been notified by the Internal Revenue
Service (the "IRS") that you are subject to backup
withholding as a result of a failure to report all
interest or dividends, or (3) the IRS has notified
you that you are no longer subject to backup
withholding. [_]
--------------------------------------------------------
PAYER'S REQUEST FOR TAXPAYER IDENTIFICATION NUMBER (TIN)
--------------------------------------------------------
[_] PART 3--Check the Box if You are Awaiting TIN
--------------------------------------------------------
CERTIFICATION--UNDER THE PENALTIES OF PERJURY, I CER-
TIFY THAT THE INFORMATION PROVIDED ON THIS FORM IS
TRUE, CORRECT, AND COMPLETE
SIGNATURE ____________________ DATE _________________
NAME (Please Print) __________________________________
NOTE: FAILURE TO COMPLETE AND RETURN THIS SUBSTITUTE FORM W-9 MAY RESULT IN
BACKUP WITHHOLDING OF 31% OF ANY PAYMENTS TO BE MADE TO YOU PURSUANT TO
THE OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF
TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL
INFORMATION.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU
CHECKED THE BOX IN PART 3 OF SUBSTITUTE FORM W-9.
CERTIFICATION OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number
has not been issued to me, and either (i) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration Office or
(ii) I intend to mail or deliver an application in the near future. I
understand that if I do not provide a taxpayer identification number within
60 days, 31% of all reportable payments made to me thereafter will be
withheld until I provide a taxpayer identification number to the Depositary.
--------------------------------------
---------------------------------
SIGNATURE DATE
--------------------------------------
NAME (PLEASE PRINT)
<PAGE>
The Depositary for the Offer is:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
By Mail: By Hand Delivery: By Overnight Delivery:
Post Office Box 3305 120 Broadway--13th Floor 85 Challenger Road
South Hackensack, NJ New York, NY 10271 Mail Drop Reorg. Dept.
07606 Attn: Reorganization Department Ridgefield Park, NJ
Attn: Reorganization 07660
Department Attn: Reorganization
Department
By Facsimile:
(201) 329-8936
Confirm by Telephone:
(201) 296-4860
Any questions or requests for assistance or for additional copies of the
Offer to Purchase, this Letter of Transmittal, or the Notice of Guaranteed
Delivery may be directed to the Information Agent at its address and the
telephone numbers set forth below. Stockholders may also contact their broker,
dealer, commercial bank, trust company, or other nominee for assistance
concerning this Offer.
The Information Agent for the Offer is:
BEACON HILL PARTNERS, INC.
90 Broad Street
20th Floor
New York, New York 10004
Call Collect (212) 843-8500
Call Toll Free (800) 301-8755
<PAGE>
EXHIBIT (a)(3)
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF SHARES OF COMMON STOCK
OF
T/SF COMMUNICATIONS CORPORATION
This Notice of Guaranteed Delivery, or a facsimile hereof, must be used to
accept the Offer (as defined below) if: (i) certificates ("Share Certificates")
evidencing shares of common stock, par value $.10 per share (the "Shares"), of
T/SF Communications Corporation, a Delaware corporation (the "Company"), are not
immediately available; (ii) Share Certificates and all other required documents
cannot be delivered to ChaseMellon Shareholder Services, L.L.C., as Depositary
(the "Depositary"), prior to the Expiration Date (as defined in "The Offer--
Section 1" of the Offer to Purchase (as defined below)); or (iii) the procedure
for delivery by book-entry transfer cannot be completed on a timely basis. This
Notice of Guaranteed Delivery may be delivered by hand or mail or transmitted by
facsimile transmission to the Depositary. See "The Offer--Section 2" of the
Offer to Purchase.
The Depositary for the Offer is:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
By Mail: By Hand Delivery: By Overnight Delivery:
Post Office Box 3305 120 Broadway--13/th/ Floor 85 Challenger Road
South Hackensack, NJ 07606 New York, NY 10271 Mail Drop Reorg. Dept.
Attn: Reorganization Attn: Reorganization Ridgefield Park, NJ 07660
Department Department Attn: Reorganization
Department
By Facsimile:
201/329-8936
Confirm by Telephone:
201/296-4860
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE, OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION
OTHER THAN AS SET FORTH ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY.
THIS FORM IS NOT TO BE USED TO GUARANTEE SIGNATURES. IF A SIGNATURE ON A
LETTER OF TRANSMITTAL IS REQUIRED TO BE GUARANTEED BY AN "ELIGIBLE INSTITUTION"
UNDER THE INSTRUCTIONS THERETO, SUCH SIGNATURE GUARANTEE MUST APPEAR IN THE
APPLICABLE SPACE PROVIDED IN THE SIGNATURE BOX ON THE LETTER OF TRANSMITTAL.
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to T/SF Communications Corporation, a
Delaware corporation, at a price of $40.25 per Share, net to the seller in cash,
upon the terms and subject to the conditions set forth in the Offer to Purchase
dated September 8, 1997 (the "Offer to Purchase"), and the related Letter of
Transmittal (which together constitute the "Offer"), receipt of each of which is
hereby acknowledged, the number of Shares specified below pursuant to the
guaranteed delivery procedure set forth in "The Offer--Section 2" of the Offer
to Purchase.
Number of Shares: ______________________ Name(s) of Record Holder(s):
_____________________________________
_____________________________________
Certificate Nos. _____________________________________
(if available): ________________________ (Please Print)
________________________________________
Check one box if Shares will be Address(es): _______________________
delivered by book-entry transfer: ____________________________________
____________________________________
[ ] The Depository Trust Company ____________________________________
[ ] The Midwest Securities Trust
Company Daytime Area Code
[ ] Philadelphia Depository Trust and Tel. No. _______________________
Company
Account Number: ________________________ Signature(s): ______________________
Date: __________________________________ ____________________________________
<PAGE>
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, an "Eligible Institution" (as defined in "The Offer--
Section 2" of the Offer to Purchase), guarantees to deliver to the Depositary,
at one of its addresses set forth above, Share Certificates evidencing the
Shares tendered hereby, in proper form for transfer, or confirmation of book-
entry transfer of such Shares into the Depositary's account at The Depository
Trust Company or the Philadelphia Depository Trust Company, in each case with
delivery of a Letter of Transmittal (or facsimile thereof) properly completed
and duly executed, and any other required documents, all within three American
Stock Exchange trading days of the date of execution of this notice.
Name of Firm: ______________________ _______________________________________
Authorized Signature
Address: ___________________________ Name: _________________________________
(Please Print)
____________________________________
Zip Code Title: ________________________________
Area Code and Tel. No. _____________ Date: _________________________________
NOTE: DO NOT SEND SHARE CERTIFICATES WITH THIS NOTICE. CERTIFICATES
FOR SHARES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL.
<PAGE>
EXHIBIT (a)(4)
OFFER TO PURCHASE FOR CASH
BY
T/SF COMMUNICATIONS CORPORATION
ALL OUTSTANDING SHARES OF ITS COMMON STOCK
AT $40.25 NET PER SHARE
September 8, 1997
To Brokers, Dealers, Commercial Banks,
Trust Companies, and Other Nominees:
We have been engaged by T/SF Communications Corporation, a Delaware
corporation (the "Company"), to act as Information Agent in connection with the
offer to purchase all outstanding shares of its common stock, par value $.10 per
share (the "Shares"), at $40.25 per share, net to the seller in cash, upon the
terms and subject to the conditions set forth in the Offer to Purchase dated
September 8, 1997, and the related Letter of Transmittal (which together
constitute the "Offer"). Please furnish copies of the enclosed materials to
those of your clients for whom you hold Shares registered in your name or in the
name of your nominee.
Enclosed herewith are the following documents:
1. Offer to Purchase dated September 8, 1997;
2. Letter of Transmittal to be used by stockholders of the Company in
accepting the Offer;
3. Letter to Stockholders of the Company from the Chairman, Chief
Executive Officer and President of the Company;
4. Letter to Clients that may be sent to your clients for whose account
you hold Shares in your name or in the name of your nominee, with
space provided for obtaining such clients' instructions with regard to
the Offer;
5. Notice of Guaranteed Delivery;
6. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9;
7. The Company's Annual Report on Form 10-K for the year ended December
31, 1996; and
8. The Company's Quarterly Report on Form 10-Q for the period ended June
30, 1997.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) AT LEAST 1,600,000
SHARES BEING VALIDLY TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE
OFFER AND (2) THE COMPANY BEING SATISFIED, IN ITS SOLE DISCRETION, THAT THE
COMPANY HAS OBTAINED SUFFICIENT FINANCING TO ENABLE IT TO CONSUMMATE THE OFFER.
THE OFFER IS ALSO SUBJECT TO CERTAIN OTHER CONDITIONS (SEE "THE OFFER--SECTION
5" OF THE OFFER TO PURCHASE).
<PAGE>
WE URGE YOU TO CONTACT YOUR CLIENTS PROMPTLY. PLEASE NOTE THAT THE OFFER
AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON
MONDAY, OCTOBER 6, 1997, UNLESS THE OFFER IS EXTENDED.
The Company will not pay any fees or commissions to any broker or dealer or
other person in connection with the solicitation of tenders of Shares pursuant
to the Offer. You will be reimbursed upon request for customary handling and
mailing expenses incurred by you in forwarding the enclosed offering materials
to your clients.
In order to take advantage of the Offer, a duly executed and properly
completed Letter of Transmittal and any other required documents should be sent
to ChaseMellon Shareholder Services, L.L.C., (the "Depositary") with either
certificate(s) representing the tendered Shares or confirmation of their book-
entry transfer, all in accordance with the instructions set forth in the Offer.
As described in "The Offer--Section 2" of the Offer to Purchase, tenders
may be made even though stock certificates are not immediately available (or the
procedures for book-entry transfer cannot be followed on a timely basis) or time
will not permit the Letter of Transmittal and all other required documents to
reach the Depositary before the Expiration Date, if such tenders are made by or
through an "Eligible Institution" (as defined in the Offer to Purchase).
Certificates for Shares so tendered in proper form for transfer (or a
confirmation of a book-entry transfer of such Shares into the Depositary's
account at one of the "Book-Entry Transfer Facilities" described in the Offer to
Purchase), together with a properly completed and duly executed Letter of
Transmittal (or a facsimile thereof) and any other documents required by the
Letter of Transmittal, must be received by the Depositary within three American
Stock Exchange trading days after the date of execution of a properly completed
and duly executed Notice of Guaranteed Delivery.
Questions and requests for assistance may be directed to us as the
Information Agent at the address and telephone number set forth on the back
cover of the enclosed Offer to Purchase. Requests for additional copies of the
enclosed materials may also be directed to us as the Information Agent.
Very truly yours,
BEACON HILL PARTNERS, INC.
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL RENDER YOU OR
ANY OTHER PERSON THE AGENT OF THE COMPANY, THE DEPOSITARY, OR THE INFORMATION
AGENT, OR ANY AFFILIATE OF ANY OF THEM, OR AUTHORIZE YOU OR ANY OTHER PERSON TO
GIVE ANY INFORMATION OR USE ANY DOCUMENT OR MAKE ANY REPRESENTATION ON BEHALF OF
ANY OF THEM WITH RESPECT TO THE OFFER NOT CONTAINED IN THE OFFER TO PURCHASE OR
THE LETTER OF TRANSMITTAL.
-2-
<PAGE>
EXHIBIT (a)(5)
OFFER TO PURCHASE FOR CASH
BY
T/SF COMMUNICATIONS CORPORATION
ALL OUTSTANDING SHARES OF ITS COMMON STOCK
AT $40.25 NET PER SHARE
- --------------------------------------------------------------------------------
| THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, |
| NEW YORK CITY TIME, ON MONDAY, OCTOBER 6, 1997, |
| UNLESS THE OFFER IS EXTENDED. |
- --------------------------------------------------------------------------------
September 8, 1997
To Our Clients:
Enclosed for your consideration are an Offer to Purchase, dated September
8, 1997 (the "Offer to Purchase"), and a related Letter of Transmittal (the
"Letter of Transmittal") in connection with the offer by T/SF Communications
Corporation, a Delaware corporation (the "Company"), to purchase all outstanding
shares of its Common Stock, par value $.10 per share (the "Shares"), at a price
of $40.25 per Share, net to the seller in cash, upon the terms and subject to
the conditions set forth in the Offer to Purchase and in the Letter of
Transmittal (which together constitute the "Offer").
We are (or our nominee is) the holder of record of Shares held by us for
your account. A TENDER OF SUCH SHARES CAN BE MADE ONLY BY US OR OUR NOMINEE AS
THE HOLDER OF RECORD AND PURSUANT TO YOUR INSTRUCTIONS. THE LETTER OF
TRANSMITTAL IS FURNISHED TO YOU FOR YOUR INFORMATION ONLY AND CANNOT BE USED BY
YOU TO TENDER SHARES HELD BY US FOR YOUR ACCOUNT.
We request instructions as to whether you wish to have us tender on your
behalf any or all of the Shares held by us for your account, upon the terms and
subject to the conditions set forth in the Offer.
We call your attention to the following:
1. The tender price is $40.25 per Share, net to the seller in cash.
2. The Offer is being made for all outstanding Shares of the Company.
3. The Board of Directors of the Company has determined that the Offer is
fair to, and in the best interests of, the stockholders of the Company, and
recommends that stockholders accept the Offer and tender their Shares pursuant
to the Offer.
<PAGE>
4. If the purchase of Shares is made pursuant to the Offer, the Offer will
be followed by a merger or reverse stock split that will result in the
conversion of Shares not tendered into $40.25 per Share in cash.
5. The Offer and withdrawal rights will expire at 12:00 Midnight, New York
City time, on Monday, October 6, 1997, unless the Offer is extended.
6. Tendering stockholders will not be obligated to pay brokerage fees or
commissions or, except as otherwise provided in Instruction 6 of the Letter of
Transmittal, stock transfer taxes with respect to the purchase of Shares by the
Company pursuant to the Offer.
If you wish to have us tender any or all of your Shares, please so instruct
us by completing, executing and returning to us the instruction form contained
in this letter. An envelope in which to return your instructions to us is
enclosed. If you authorize the tender of your Shares, all such Shares will be
tendered unless otherwise specified in your instructions.
YOUR INSTRUCTIONS SHOULD BE FORWARDED TO US IN AMPLE TIME TO PERMIT US TO
SUBMIT A TENDER ON YOUR BEHALF PRIOR TO THE EXPIRATION OF THIS OFFER.
The Offer is made solely by the Offer to Purchase and the related Letter of
Transmittal and is being made to all holders of Shares. The Company is not
aware of any state where the making of the Offer is prohibited by administrative
or judicial action pursuant to any valid state statute. If the Company becomes
aware of any valid state statute prohibiting the making of the Offer or the
acceptance of Shares pursuant thereto, the Company will make a good faith effort
to comply. If after such good faith effort, the Company cannot comply with such
state statute, the Offer will not be made to (nor will tenders be accepted from
or on behalf of) the holders of Shares in such state. In any jurisdiction where
the securities, blue sky or other laws require the Offer to be made by a
licensed broker or dealer, the Offer shall be deemed to be made on behalf of the
Company by one or more registered brokers or dealers licensed under the laws of
such jurisdiction.
-2-
<PAGE>
INSTRUCTIONS WITH RESPECT TO THE
OFFER TO PURCHASE FOR CASH
BY
T/SF COMMUNICATIONS CORPORATION
ALL OUTSTANDING SHARES OF ITS COMMON STOCK
AT $40.25 NET PER SHARE
The undersigned acknowledge(s) receipt of your letter and the enclosed
Offer to Purchase, dated September 8, 1997, and the related Letter of
Transmittal (which together constitute the "Offer") in connection with the offer
by T/SF Communications Corporation, a Delaware corporation, to purchase all
outstanding shares of its common stock, par value $.10 per share ("Shares"), at
a price of $40.25 per Share, net to the seller in cash, upon the terms and
subject to the conditions of the Offer.
This will instruct you to tender the number of Shares indicated below (or,
if no number is indicated below, all Shares) that are held by you for the
account of the undersigned, upon the terms and subject to the conditions set
forth in the Offer.
Date: __________________________________ Signed: ___________________________
Please Type or Print Name(s):
Number of Shares to be Tendered*: ___________________________________
___________________ Shares Please Type or Print Address(es):
___________________________________
* UNLESS OTHERWISE INDICATED, IT ___________________________________
WILL BE ASSUMED THAT ALL SHARES ___________________________________
HELD BY US FOR YOUR ACCOUNT ARE Zip Code
TO BE TENDERED.
___________________________________
Area Code(s) and Telephone Number(s)
___________________________________
Social Security Number(s) or other
Taxpayer Identification Number(s)
<PAGE>
EXHIBIT (a)(6)
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYER.--Social Security numbers have nine digits separated by two hyphens:
i.e. 000-00-0000. Employer identification numbers have nine digits separated
by only one hyphen: i.e. 00-0000000. The table below will help determine the
number to give the payer.
- --------------------------------------- ---------------------------------------
GIVE THE
FOR THIS TYPE OF ACCOUNT: SOCIAL SECURITY
NUMBER OF--
- -----------------------------------------------
1. An individual's account The individual
2. Two or more individuals The actual owner
(joint account) of the account
or, if combined
funds, any one of
the
individuals(1)
3. Husband and wife (joint The actual owner
account) of the account
or, if
joint funds,
either person(1)
4. Custodian account of a The minor(2)
minor (Uniform Gift to
Minors Act)
5. Adult and minor (joint The adult or, if
account) the minor is the
only contributor,
the minor(1)
6. Account in the name of The ward, minor,
guardian or committee for a or incompetent
designated ward, minor, or person(3)
incompetent person
7. a. The usual revocable The grantor-
savings trust account trustee(1)
(grantor is also
trustee)
b. So-called trust account The actual
that is not a legal or owner(1)
valid trust under State
law
8. Sole proprietorship The owner(4)
account
GIVE THE EMPLOYER
FOR THIS TYPE OF ACCOUNT: IDENTIFICATION
NUMBER OF --
----------------------------------------------------------------
9. A valid trust, estate, or The legal entity
pension trust (Do not furnish
the identifying
number of the
personal
representative or
trustee unless
the legal entity
itself is not
designated in the
account
title.)(5)
10. Corporate account The corporation
11. Religious, charitable, or The organization
educational organization
account
12. Partnership account held The partnership
in the name of the business
13. Association, club, or The organization
other tax-exempt
organization
14. A broker or registered The broker or
nominee nominee
15. Account with the The public entity
Department of Agriculture
in the name of a public
entity (such as a State or
local government, school
district, or prison) that
receives agricultural
program payments
---------------------------------------
(1) List first and circle the name of the person whose number you furnish.
- ---------------------------------------
(2) Circle the minor's name and furnish the minor's social security number.
(3) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
(4) Show the name of the owner.
(5) List first and circle the name of the legal trust, estate, or pension
trust.
NOTE: If no name is circled when there is more than one name, the number will
be considered to be that of the first name listed.
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER OF SUBSTITUTE FORM W-9
PAGE 2
OBTAINING A NUMBER
If you don't have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Number Card, or
Form SS-4, Application for Employer Identification Number, at the local office
of the Social Security Administration or the Internal Revenue Service and
apply for a number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on ALL payments include
the following:
.A corporation.
.A financial institution.
. An organization exempt from tax under section 501(a), or an individual
retirement plan.
. The United States or any agency or instrumentality thereof.
. A State, the District of Columbia, a possession of the United States, or
any subdivision or instrumentality thereof.
. A foreign government, a political subdivision of a foreign government, or
any agency or instrumentality thereof.
. An international organization or any agency, or instrumentality thereof.
. A registered dealer in securities or commodities registered in the U.S.
or a possession of the U.S.
. A real estate investment trust.
. A common trust fund operated by a bank under section 584(a)
. An exempt charitable remainder trust, or a non-exempt trust described in
section 4947(a)(1).
. An entity registered at all times under the Investment Company Act of
1940.
. A foreign central bank of issue.
Payments of dividends and patronage dividends not generally subject to backup
withholding include the following:
. Payments to nonresident aliens subject to withholding under section 1441.
. Payments to partnerships not engaged in a trade or business in the U.S.
and which have at least one nonresident partner.
. Payments of patronage dividends where the amount received is not paid in
money.
. Payments made by certain foreign organizations.
. Payments made to a nominee.
Payments of interest not generally subject to backup withholding include the
following:
. Payments of interest on obligations issued by individuals. Note: You may
be subject to backup withholding if this interest is $600 or more and is
paid in the course of the payer's trade or business and you have not pro-
vided your correct taxpayer identification number to the payer.
. Payments of tax-exempt interest (including exempt-interest dividends un-
der section 852).
. Payments described in section 6049(b)(5) to non-resident aliens.
. Payments on tax-free covenant bonds under section 1451.
. Payments made by certain foreign organizations.
. Payments made to a nominee.
Exempt payees described above should file Form W-9 to avoid possible erroneous
backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER
IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, AND RETURN IT
TO THE PAYER. IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE DIVIDENDS,
ALSO SIGN AND DATE THE FORM.
Certain payments other than interest, dividends, and patronage dividends,
that are not subject to information reporting are also not subject to backup
withholding. For details, see the regulations under sections 6041, 6041A(a),
6045, and 6050A.
PRIVACY ACT NOTICE.--Section 6109 requires most recipients of dividend, inter-
est, or other payments to give taxpayer identification numbers to payers who
must report the payments to IRS. IRS uses the numbers for identification pur-
poses. Payers must be given the numbers whether or not recipients are required
to file tax returns. Beginning January 1, 1993, payers must generally withhold
31% of taxable interest, dividend, and certain other payments to a payee who
does not furnish a taxpayer identification number to a payer. Certain penal-
ties may also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER.--If you
fail to furnish your taxpayer identification number to a payer, you are sub-
ject to a penalty of $50 for each such failure unless your failure is due to
reasonable cause and not to willful neglect.
(2) FAILURE TO REPORT CERTAIN DIVIDEND AND INTEREST PAYMENTS.--If you fail to
include any portion of an includible payment for interest, dividends, or pat-
ronage dividends in gross income, such failure will be treated as being due to
negligence and will be subject to a penalty of 5% on any portion of an under-
payment attributable to that failure unless there is clear and convincing evi-
dence to the contrary.
(3) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING.--If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.
(4) CRIMINAL PENALTY FOR FALSIFYING INFORMATION.--Falsifying certifications or
affirmations may subject you to criminal penalties including fines and/or im-
prisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE
SERVICE
<PAGE>
EXHIBIT (a)(7)
[T/SF LETTERHEAD]
September 8, 1997
To the Stockholders of T/SF Communications Corporation:
On August 13, 1997, after careful consideration, the Board of Directors of
T/SF Communications Corporation (the "Company") approved and authorized the
Company to proceed with a tender offer, pursuant to which the Company is
offering to purchase all of its outstanding shares of common stock for $40.25
per share, net to the tendering stockholder in cash (the "Offer").
YOUR BOARD OF DIRECTORS HAS CONCLUDED THAT THE OFFER IS FAIR TO, AND IN THE
BEST INTERESTS OF, THE COMPANY AND ITS STOCKHOLDERS, AND HAS UNANIMOUSLY
APPROVED THE OFFER AND THE TRANSACTIONS CONTEMPLATED THEREBY. ACCORDINGLY, YOUR
BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS ACCEPT THE OFFER AND TENDER
ALL OF THEIR RESPECTIVE SHARES PURSUANT THERETO.
In arriving at its recommendation, your Board of Directors gave careful
consideration to a number of factors described in the enclosed Offer to Purchase
dated September 8, 1997, including the written opinion of its financial advisor,
Prudential Securities Incorporated, dated August 15, 1997, to the effect that,
and subject to the limitations therein, as of the date of such opinion, the
consideration to be received by the Company's stockholders in the Offer and the
Second-Step Transaction (as defined in the Offer to Purchase) is fair, from a
financial point of view, to such stockholders. The factors considered by the
Board of Directors are described in the section entitled "Special Factors--
Position of the Board of Directors" in the enclosed Offer to Purchase. The
effect of a successful completion of the Offer and certain related transactions
and agreements will be that VS&A Communications Partners II, L.P., a Delaware
limited partnership ("VS&A"), will control the Company. You should note that,
if at least 1,600,000 shares are tendered, VS&A is obligated to effect either a
merger or reverse stock split such that any shares not tendered (and not
otherwise part of the VS&A group) will be converted into only a right to receive
$40.25 in cash, subject to possible appraisal rights. Officers and directors
owning 1,276,768 shares intend to tender such shares pursuant to the Offer.
The Offer is described in the enclosed Offer to Purchase. Also enclosed
are related materials, including a Letter of Transmittal to be used for
tendering your shares. These documents set forth in detail the terms and
conditions of the Offer and provide instructions on how to tender your shares.
We urge you to read the enclosed materials carefully before making your decision
with respect to tendering your shares.
Yours very truly,
/s/ HOWARD G. BARNETT, JR.
Howard G. Barnett, Jr.
Chairman, President and
Chief Executive Officer
<PAGE>
EXHIBIT (a)(8)
PRESS RELEASE
For More Information, Call:
Howard G. Barnett, Jr., Chairman, Joseph N. Jaffoni
Chief Executive Officer and President Robert L. Rinderman
Robert E. Craine, Jr., Executive Vice President Jaffoni & Collins, Inc.
J. Gary Mourton, Senior Vice President, Finance Telephone: (212) 505-3015
Telephone: (918) 747-2600 or [email protected]
For Immediate Release September 8, 1997
- ---------------------
T/SF COMMUNICATIONS ANNOUNCES TENDER OFFER
TULSA, OKLAHOMA. T/SF Communications Corporation (AMEX - TCM) today
announced that it has commenced its previously announced tender offer for all of
its outstanding stock at a price of $40.25 net per share in cash. The tender
offer will be open through midnight on October 6, 1997, unless extended. The
terms of the offer are more fully described in an Offer to Purchase, which is
being mailed to stockholders, and in various other documents filed today with
the Securities and Exchange Commission. The information agent for the offer is
Beacon Hill Partners, Inc., and the depositary is ChaseMellon Shareholder
Services L.L.C. The closing of the tender offer is subject to a variety of
conditions, including financing and that a minimum of 1,600,000 shares are
tendered before expiration date of the offer. If the minimum number of shares
is tendered, VS&A Communications Partners II, L.P. will control the Company and
the tender offer will be followed by a merger or reverse split that will result
in all shares not tendered (other than shares held by the VS&A group) being
converted into $40.25 per share in cash.
T/SF Communications is a diversified publishing and information company,
publishing trade journals and exposition and specialty publications, providing
registration and lead
<PAGE>
management services for conventions and trade shows, trademark and tradename
research and information services, and pre-employment screening services and
information primarily to the trucking industry. T/SF corporate information is
available at the Company's World Wide Web site which can be reached at
http://www.tsfcorp.com. VS&A information is available at
http://www.vsacomm.com.
-2-
<PAGE>
EXHIBIT (b)(1)
[LOGO OF FIRST UNION APPEARS HERE]
August 13, 1997
VS&A Communications Partners II, L.P.
350 Park Avenue
New York, New York 10022
Re: Commitment for Arrangement of Facility and Financing
----------------------------------------------------
Gentlemen:
You have advised us that T/SF Communications, Inc., a company to be
acquired by you (the "Company"), seeks financing (i) to finance the acquisition
-------
of shares of its stock (the "Acquisition") pursuant to a tender for such shares
-----------
(the "Tender") and (ii) for working capital and general corporate purposes
------
including permitted acquisitions. Attached hereto is a Summary of Terms and
Conditions (the "Term Sheet") describing the general terms and conditions for an
----------
aggregate $45 million revolving and term credit facility (the "Facility").
--------
First Union National Bank ("First Union") is pleased to advise you that
-----------
First Union is willing to provide up to $45,000,000 of the Facility and act as
Administrative Agent in respect thereof. In addition, First Union Capital
Markets Corporation ("Capital Markets") is pleased to advise you that Capital
---------------
Markets is willing to serve as Syndication Agent for the Facility. Although
First Union's commitment is not subject to Capital Markets' or First Union's
ability to syndicate the Facility, you hereby acknowledge that Capital Markets
will endeavor to syndicate the Facility prior to or after the closing thereof.
You further acknowledge and agree that Capital Markets' services as Syndication
Agent will be on an exclusive basis during the term of this letter and that
during such term, no other financial institution will be engaged or otherwise
consulted or contracted by you regarding any other proposed senior bank facility
for the Company or any of its subsidiaries or affiliates.
This letter and the Term Sheet do not summarize all of the terms
conditions, covenants, representations, warranties and other provisions which
will be contained in the definitive legal documentation (the "Credit Documents")
----------------
of the Facility and the transaction contemplated hereby. Capital Markets and
First Union shall have the right to require that the Credit Documents include,
in addition to the provisions outlined in the Term Sheet, provisions considered
reasonably appropriate by Capital Markets and First Union for this type of
lending transaction, as well as provisions that Capital Markets and First Union
may reasonably deem appropriate after they are
<PAGE>
VS&A Communications Partners II, L.P.
August 13, 1997
Page 2
afforded the opportunity to complete, to their satisfaction, their business,
tax, legal and other due diligence analyses and review of the Company and its
subsidiaries and affiliates.
The commitments of First Union and Capital Markets hereunder are based upon
the financial and other information regarding the Company and its subsidiaries
and affiliates previously provided to First Union and Capital Markets.
Accordingly, the commitments hereunder are subject to the conditions, among
others, that (i) there shall not have occurred after the date of such financial
and other information any material adverse change in the business, assets,
liabilities (actual or contingent), operations, condition (financial or
otherwise) or prospects of the Company or any of its subsidiaries and
affiliates, (ii) there not having occurred and being continuing any material
disruption of or adverse change in the financial, banking or capital markets
that could in the reasonable judgment of First Union materially impair the
syndication of the Facility and (iii) First Union and Capital Markets continue
to be reasonably satisfied with the condition, assets, properties, business,
operations and prospects of the Company and its subsidiaries and affiliates.
You agree to actively assist Capital Markets in achieving a syndication of
the Facility that is satisfactory to Capital Markets and you. Such syndication
may be accomplished by a variety of means, including direct contact during the
syndication between the proposed syndicate members and senior management and
advisors of the Company and its subsidiaries and affiliates. To assist Capital
Markets in the syndication efforts, you hereby agree (i) to provide and cause
each such person's advisors to provide Capital Markets and the other syndicate
members upon request with all information deemed reasonably necessary by Capital
Markets to complete the syndication, including but not limited to information
and evaluations prepared by, or on behalf of, the Company or its subsidiaries,
affiliates or advisors relating to the transactions contemplated hereby, (ii) to
assist Capital Markets upon its reasonable request in the preparation of
information materials to be used in connection with the syndication of the
Facility and (iii) to otherwise assist Capital Markets in its syndication
efforts, including making officers and advisors of the Company and its
subsidiaries and affiliates available from time to time to attend and make
presentations regarding the business and prospects of the Company and its
subsidiaries and affiliates, as appropriate, at a meeting or meetings of Lenders
or prospective Lenders.
It is understood and agreed that Capital Markets, after consultation with
you, will manage and control all aspects of the syndication, including decisions
as to the selection of proposed Lenders and any titles offered to proposed
Lenders, when commitments will be accepted and the final allocations of the
commitments among the Lenders; provided, however, you shall have the right to
approve any proposed Lender, such approval not to be unreasonably withheld. It
is understood that no Lender participating in the Facility will receive
compensation from you outside the terms contained herein and in the Term Sheet
in order to obtain its commitment. It is also understood and agreed that the
amount and distribution of the fees among the Lenders will be at the sole
discretion of Capital Markets.
<PAGE>
VS&A Communications Partners II, L.P.
August 13, 1997
Page 3
You hereby represent and warrant that to the best of your knowledge (i) all
information, other than Projections (as defined below), which has been or is
hereafter made available to Capital Markets or the Lenders by you or any of your
representatives in connection with the transactions contemplated hereby
("Information") is and will be complete and correct in all material respects and
- -------------
does not and will not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements contained therein not
materially misleading and (ii) all financial projections concerning each of the
Company and its subsidiaries and affiliates that have been or are hereafter made
available to Capital Markets or the Lenders by you (the "Projections") have been
-----------
or will be prepared in good faith based upon reasonable assumptions. You agree
to supplement the Information and the Projections from time to time until the
closing date so that the representation and warranty in the preceding sentence
is correct on the closing date. In arranging and syndicating the Facility,
Capital Markets will be using and relying on the Information and the
Projections.
You also agree that First Union and its respective affiliates will be
afforded an opportunity to offer proposals to provide (a) any interest rate
caps, currency swaps and other hedging transactions to be entered into by the
Company or its subsidiaries and affiliates and (b) cash management, funds
transfer, trade, corporate trust and securities services to be obtained by the
Company or any of its subsidiaries and affiliates. In addition, First Union and
its respective affiliates will be afforded the opportunity to compete to act as
placement agent or underwriter for any subordinated financing.
By executing this letter agreement, you agree to reimburse Capital Markets
and First Union from time to time on demand for all reasonable out-of-pocket
fees, syndication expenses and other expenses (including, but not limited to,
the reasonable fees, disbursements and other charges of Moore & Van Allen, PLLC,
as counsel to Capital Markets and First Union) incurred in connection with the
Facility including the preparation of the Credit Documents and the other
transactions contemplated hereby.
By executing this letter, you further agree to indemnify and hold harmless
Capital Markets, First Union and each Lender and each director, officer,
employee, attorney and affiliate of Capital Markets, First Union and each Lender
(each such person or entity referred to hereafter in this paragraph as an
"Indemnified Person") from any losses, claims, costs, damages, expenses or
- -------------------
liabilities (or actions, suits or proceedings, including any inquiry or
investigation, with respect thereto) to which any Indemnified Person may become
subject insofar as such losses, claims, costs, damages, expenses, or liabilities
(or actions, suits, or proceedings, including any inquiry or investigation, with
respect thereto) arise out of, in any way relate to, or result from, this
letter, the Credit Documents, the other transactions contemplated hereby and
thereby or the Acquisition or the Tender and to reimburse upon demand each
Indemnified Person for any and all reasonable legal and other expenses incurred
in connection with investigating, preparing to defend or defending any such
loss, claim, cost, damage, expense or liability or inquiry or investigation with
respect thereto; provided, that you shall have no obligation under this
--------
indemnity provision for
<PAGE>
VS&A Communications Partners II, L.P.
August 13, 1997
Page 4
liabilities resulting from gross negligence or willful misconduct of any
Indemnified Person. The foregoing provisions of this paragraph shall be in
addition to any right that an Indemnified Person shall have at common law or
otherwise. No Indemnified Person shall be responsible or liable for
consequential damages which may be alleged as a result of this letter.
The provisions of the immediately preceding two paragraphs shall remain in
full force and effect regardless of whether the Credit Documents shall be
executed and delivered and notwithstanding the termination of this letter
agreement or the commitments of First Union or Capital Markets.
Except as required by applicable law, this letter and the contents hereof
shall not be disclosed by you to any third party without the prior consent of
Capital Markets, other than to the sellers of the Company and your attorneys,
financial advisors, equity underwriters and accountants, in each case only to
the extent necessary in your reasonable judgment. You acknowledge and agree
that Capital Markets and First Union may share with any of their respective
affiliates (including each other) any information relating to the Facility, the
Company and its subsidiaries and affiliates. First Union and Capital Markets
agree that First Union and Capital Markets and their respective affiliates shall
keep such information confidential except where disclosure is required by law or
by any subpoena or similar legal process, or in connection with the syndication
of the Facility (so long as similar confidentiality agreements are obtained from
each potential syndicate member).
This letter may be executed in counterparts which, taken together, shall
constitute an original. This letter, together with the Term Sheet and Fee
Letter delivered herewith, embodies the entire agreement and understanding
between Capital Markets and you with respect to the specific matters set forth
above and supersedes all prior agreements and understandings relating to the
subject matter hereof. No party has been authorized by Capital Markets to make
any oral or written statements inconsistent with this letter.
This letter shall be governed by and construed in accordance with the laws
of the State of North Carolina, without regard to the principles of conflicts of
law.
This letter may not be assigned by you without the prior written consent of
Capital Markets.
If you are in agreement with the foregoing, please execute and return the
enclosed copy of this Commitment Letter and the Fee Letter no later than the
close of business of August 20, 1997. This letter will become effective upon
your delivery to us of executed counterparts of this Commitment Letter and the
Fee Letter. This agreement shall terminate if not so accepted by you prior to
that time. Following acceptance by you, this agreement will terminate on
December 31, 1997 unless the Facility is closed by such time.
<PAGE>
VS&A Communications Partners II, L.P.
August 13, 1997
Page 5
Very truly yours,
FIRST UNION CAPITAL MARKETS CORPORATION
By: [signature illegible]
-----------------------------------
Title: MD
--------------------------------
Date: 8/13/97
---------------------------------
FIRST UNION NATIONAL BANK
By: [signature illegible]
-----------------------------------
Title: SVP
--------------------------------
Date: 8/13/97
---------------------------------
ACCEPTED AND AGREED TO:
VS&A COMMUNICATIONS PARTNERS II, L.P.
By: /s/ Jeffrey Stevenson
----------------------------------
Title: President and General Partner
-------------------------------
Date: 8/15/97
--------------------------------
<PAGE>
T/SF COMMUNICATIONS, INC.
TERMS AND CONDITIONS
AUGUST 13, 1997
BORROWER: T/SF Communications, Inc.
AMOUNT: $45,000,000.
FACILITIES: $25,000,000 7 year Senior Secured Revolver ("Revolver")
$20,000,000 7 year Senior Secured Term Loan ("Term
Loan")
ARRANGER: First Union Capital Markets Corp.
ADMINISTRATIVE AGENT: First Union National Bank ("First Union").
LENDERS: First Union and a syndicate of other financial
institutions.
FINAL MATURITY DATE: September 30, 2004
PURPOSE: To finance the acquisition of shares of the stock of the
Borrower pursuant to a tender for such shares (the
"Tender"), refinance existing indebtedness, for working
capital and for other general corporate purposes,
including Permitted Acquisitions.
AMORTIZATION: Outstanding principal of the Term Loan will be payable
quarterly in the following annual amounts based on the
following schedule:
<TABLE>
<CAPTION>
Term Loan
Year Reduction
----------------
<S> <C>
1997 -
1998 -
1999 $2.0
2000 $3.0
2001 $4.0
2002 $4.0
2003 $4.0
2004 $3.0
----------------
</TABLE>
The Revolver shall be due and payable at maturity.
COLLATERAL: A pledge of the stock of the Borrower and, to the extent
of the Borrower's direct or indirect ownership interest,
its subsidiaries, and a first priority security interest
in all assets of the Borrower and its wholly owned
subsidiaries.
GUARANTORS: All wholly owned subsidiaries of the Borrower.
VOLUNTARY COMMITMENT
REDUCTIONS: The Borrower may voluntarily reduce the commitments in
amounts of $5,000,000 at any time with prior notice and
without premium or penalty. Any such reductions will be
permanent.
- --------------------------------------------------------------------------------
TERMS AND CONDITIONS PAGE 1
<PAGE>
MANDATORY PREPAYMENTS/
COMMITMENT REDUCTIONS: Shall be an amount equal to (i) 100% of insurance
proceeds not applied toward the repair or replacement of
damaged properties within 180 days, (ii) 100% of
proceeds from asset sales not reinvested within 180
days, other than assets sold in the normal course of
business, and (iii) 100% of the proceeds from the
issuance of any equity or debt.
INTEREST RATE
OPTIONS: At the Borrower's option, the loans will bear interest
at either (i) the Alternate Base Rate ("ABR") plus the
Applicable Margin or (ii) the LIBOR rate plus the
Applicable Margin.
ABR will be the higher of (i) the Administrative Agent's
Prime Rate or (ii) the overnight federal funds rate plus
0.50%. Interest on ABR borrowings will be payable
quarterly in arrears and calculated over a 365-day year.
LIBOR will be available for one, three and six-month
borrowings. Interest on LIBOR borrowings will be
calculated on the basis of a 360-day year and adjusted
for reserve requirements, if any. Interest on LIBOR
loans will be payable in arrears at the earlier of
maturity or every three months. The Credit Agreement
includes standard provisions for increased costs,
capital adequacy and withholding taxes.
APPLICABLE MARGIN: The Applicable Margin for each of the Facilities shall
be determined on the basis of the Borrower's Total
Leverage Ratio as set forth below:
<TABLE>
<CAPTION>
Total
Leverage Ratio Base Rate + LIBOR +
---------------------------------------------------------
<S> <C> <C>
greater than or equal to 5.50 1.500% 2.750%
- -----------------------------------------------
greater than or equal to 5.00 or less than 5.50 1.250% 2.500%
- -----------------------------------------------
greater than or equal to 4.50 or less than 5.00 1.000% 2.500%
- -----------------------------------------------
greater than or equal to 4.00 or less than 4.50 0.750% 2.000%
- -----------------------------------------------
less than 4.00 0.500% 1.750%
- -----------------------------------------------
</TABLE>
DEFAULT INTEREST RATE: 2.00% in excess of the applicable interest rate at the
time.
COMMITMENT FEE: The Borrower shall pay a Commitment Fee of 0.50% per
annum on the unused commitment under the Revolver,
payable quarterly in arrears.
REPRESENTATIONS AND
WARRANTIES: Those customarily found in the credit agreements for
similar financings, including, but not limited to
representations and warranties concerning corporate
organization and power, enforceability of the credit
documents, governmental authorization, absence of
litigation, payment of taxes, full disclosure of
information, accuracy of financial information,
ownership of properties, compliance with ERISA,
environmental matters, compliance with laws, labor
relations, insurance and material contracts.
CONDITIONS PRECEDENT: The closing and funding of the Facilities will be
subject to the negotiation, execution, and delivery of a
definitive Credit Agreement and other support
documentation satisfactory to the Administrative Agent,
including but not limited to each of the following:
a) All documentation and legal opinions relating to the
transaction and the structure of the Borrower shall
have been completed to the satisfaction of the
Administrative Agent and its counsel;
- --------------------------------------------------------------------------------
TERMS AND CONDITIONS PAGE 2
<PAGE>
b) All consents and approvals of the boards of
directors, shareholders, governmental and regulatory
bodies and other applicable third parties necessary
or desirable in connection with this transaction
shall have been obtained;
c) No material adverse change shall have occurred;
d) There shall be no material pending litigation,
bankruptcy or insolvency, injunction, order or claim
with respect to the Borrower;
e) VS&A Communications Partners II, L.P. shall have
contributed sufficient equity to the Borrower to
close the transaction and have established voting
control of the Borrower;
f) Opening Consolidated Operating Cash Flow to be
agreed upon by the Borrower and the Administrative
Agent;
g) The Borrower shall have received net proceeds of at
least $75,000,000 from the issuance of subordinated
debt on terms and conditions acceptable to the
Administrative Agent;
h) Evidence as to the solvency of the Borrower;
i) Compliance with Regulation U.
AFFIRMATIVE COVENANTS: Those customarily found in the credit agreements for
similar financing, including, but not limited to
delivery of financial statements and other business and
financial information, maintenance of properties,
compliance with laws, payment of obligations,
maintenance of books and records, maintenance of
insurance and change in fiscal year.
NEGATIVE COVENANTS: Those customarily found in credit agreements for similar
financing, including, but not limited to limitations on
mergers, other indebtedness and contingent obligations,
liens, asset sales, investments, restricted payments,
dividends, transactions with affiliates and lines of
business.
FINANCIAL COVENANTS: Total Leverage Ratio -
----------------------
The Borrower shall not permit the Total Leverage Ratio
as of the end of any fiscal quarter to exceed the
following levels for each period:
<TABLE>
<CAPTION>
Total
Period Leverage Ratio
------------------------------------
<S> <C>
Closing to 9/30/98 6.00 to 1.00
10/1/98 to 9/30/99 5.50 to 1.00
10/1/99 to 9/30/00 5.00 to 1.00
Thereafter 4.50 to 1.00
------------------------------------
</TABLE>
The Total Leverage Ratio shall be defined as the ratio
of Consolidated Total Funded Debt (total funded debt net
of cash on hand in excess of $1.0 million) to
Consolidated Operating Cash Flow ("EBITDA").
- --------------------------------------------------------------------------------
TERMS AND CONDITIONS PAGE 3
<PAGE>
Senior Leverage Ratio -
-----------------------
The Borrower shall not permit the Senior Leverage Ratio
as of the end of any fiscal quarter to exceed the
following levels for each period:
Senior
Period Leverage Ratio
------------------------------
At all times 3.50 to 1.00
------------------------------
The Senior Leverage Ratio shall be defined as the ratio
of Consolidated Senior Funded Debt (total funded debt
less subordinated debt) to Consolidated Operating Cash
Flow ("EBITDA").
Interest Coverage
-----------------
The Borrower shall not permit the ratio of Consolidated
Operating Cash Flow to Consolidated Interest Expense as
of the end of any fiscal quarter to be less than the
following:
<TABLE>
<CAPTION>
Period Interest Coverage
---------------------------------------
<S> <C>
Closing to 9/30/98 1.50 to 1.00
10/1/98 to 9/30/99 1.75 to 1.00
Thereafter 2.00 to 1.00
---------------------------------------
</TABLE>
Fixed Charge Coverage
---------------------
Beginning with the period ending 9/30/98, the Borrower
shall not permit the ratio of Consolidated Operating
Cash Flow plus cash on hand in excess of $1,000,000 to
Consolidated Fixed Charges for any period to be less
than 1.05x.
Consolidated Fixed Charges shall be defined as the sum
of: (i) Consolidated Interest Expense (including accrued
or capitalized interest expense and all commitment and
other ongoing fees in respect of the Borrower's funded
debt); (ii) cash income taxes; (iii) capital
expenditures; and (iv) scheduled principal payments on
funded debt.
EVENTS OF DEFAULT: Those customary in the context of this transaction.
ASSIGNMENTS: Lenders will have the right to sell assignments or
participations. Minimum assignment amounts will be
$5,000,000. a $3,000 fee will be payable to the
Administrative Agent for each assignment.
REQUIRED LENDERS: Lenders holding greater than 50% of the commitments.
GOVERNING LAW: North Carolina.
- --------------------------------------------------------------------------------
TERMS AND CONDITIONS PAGE 4
<PAGE>
EXHIBIT (b)(2)
[LOGO OF FIRST UNION APPEARS HERE]
August 13, 1997
VS&A Communications Partners II, L.P.
350 Park Avenue
New York, New York 10022
Ladies and Gentlemen:
This letter is the Fee Letter referred to in the attached Commitment Letter
dated August 13, 1997 for the Facility (as defined therein) to T/SF
Communications, Inc., the company to be acquired by you (the "Company") for the
purpose of acquiring shares of its stock pursuant to a tender for such shares,
and sets forth the fees payable to First Union National Bank ("First Union") and
First Union Capital Markets Corporation ("Capital Markets"). Capitalized terms
not defined herein shall have the meanings assigned to such terms in the
Commitment Letter.
To induce First Union and Capital Markets to execute and deliver the
Commitment Letter, the Company agrees to pay to First Union and Capital Markets
(for their own benefit) an upfront facility fee of 2% of the Revolver and 1% of
the Term Loan payable on the closing date.
In addition, the Company will pay First Union as Administrative Agent for
the Facility (for its own benefit), an annual Administrative Fee equal to
$25,000, payable to the Administrative Agent at closing of the Facility and at
each anniversary date thereafter.
All fees paid hereunder shall be fully earned upon payment and shall not be
refundable under any circumstances.
Except as required by applicable law, this letter and the contents hereof
shall not be disclosed by you to any third party without the prior consent of
First Union and Capital Markets, other than to your attorneys, financial
advisors, equity underwriters and accountants, in each case to the extent
necessary in your reasonable judgment.
<PAGE>
VS&A Communications Partners II, L.P.
08/13/97
Page 2
If you are in agreement with the foregoing, please sign and return the
enclosed copy of this letter and the Commitment Letter to First Union and
Capital Markets.
Very truly yours,
FIRST UNION CAPITAL MARKETS CORPORATION
By: [signature illegible]
------------------------------
Title: MD
---------------------------
Date: 8/13/97
----------------------------
FIRST UNION NATIONAL BANK
By: [signature illegible]
-----------------------------------
Title: SVP
--------------------------------
Date: 8/13/97
---------------------------------
ACCEPTED AND AGREED TO:
VS&A COMMUNICATIONS PARTNERS II, L.P.
By: /s/ Jeffrey Stevenson
-----------------------------------
Title: President and General Partner
--------------------------------
Date: 8/15/97
---------------------------------
<PAGE>
EXHIBIT (b)(3)
August 13, 1997
Mr. Jeffrey T. Stevenson
VS&A Communications Partners II, L.P.
350 Park Avenue
New York, NY 10022
Dear Jeffrey:
We understand that T/SF Communications, Inc., (the "Company"), a corporation to
be acquired by VS&A Communications Partners II, L.P. and/or one or more of its
affiliates (collectively, "VS&A"), intends to acquire shares of its stock (such
transaction, the "Acquisition"), pursuant to a tender offer (the "Tender"). We
understand that the Company intends to enter into the following financing
arrangements in order to finance the Acquisition and provide for working capital
and general corporate purposes:
(i) The Company proposes to enter into a Credit Agreement (the "Bank
Credit Facility") with certain financial institutions for an aggregate
of up to $45.0 million, $20.0 million of which shall be a term loan
and $25.0 million of which shall be a revolving credit facility;
(ii) The Company proposes to issue and sell, on the date of consummation of
the Acquisition (the "Closing Date"), up to $85.0 million aggregate
principal amount of senior subordinated increasing rate notes (the
"Bridge Notes") having substantially the terms set forth on Exhibit A
hereto (such Exhibit, together with Exhibit B hereto referred to
below, the "Term Sheet");
(iii) The Company proposes to issue, sell and roll over on the Closing Date
equity or other junior securities (the "Company Securities"), such
--------------------------
that the proceeds (before payment of fees and expenses) from the
issuance, sale and roll over of such Company Securities will be of an
amount satisfactory to First Union Corporation ("First Union"); and
(iv) The Company proposes to issue and sell as soon as practicable, in a
public offering or private placement, debt securities (the "Permanent
Financing"), the proceeds of which will be used to redeem the Bridge
Notes. In addition, if by the maturity date of the Bridge Notes, the
Permanent Financing shall not have been received by the Company, or
shall not have been received by the Company in an amount sufficient to
repay the principal and accrued and unpaid interest and premium (if
any) on the outstanding Bridge Notes, such unpaid principal and
interest and premium (if any) will be satisfied by the issuance to the
holders of the Bridge Notes of debt securities of the Company having
substantially the terms set forth on Exhibit B hereto (the "Rollover
Notes"). The Acquisition, the Tender and the transactions described in
clauses (i) through (iv) are hereinafter referred to collectively as
the "Transactions."
We understand that borrowings under the Bank Credit Facility, together with the
net proceeds from the issuance and sale of the Bridge Notes and the Company
Securities, will provide funds sufficient to enable the Company to consummate
the Acquisition, provide for working capital, and general corporate purposes
(including payment of fees and expenses in connection with the Transactions),
and that such proceeds shall be used for that purpose.
<PAGE>
Mr. Jeffrey T. Stevenson
VS&A Communications Partners II, L.P.
August 13, 1997
Page 2
- -------------------------------------
Based upon and subject to the foregoing and to the terms and conditions set
forth below and in the Term Sheet, First Union is pleased to confirm its
commitment (this "Commitment") to purchase, or to cause one or more of its
affiliates to purchase, all of the Bridge Notes. First Union's obligation to
purchase the Bridge Notes pursuant to this Commitment is subject to: (i) the
VS&A's written acceptance of a letter from First Union to VS&A of even date
herewith (the "Fee Letter") pursuant to which VS&A agrees to pay or to cause the
Company to pay, to First Union certain fees in connection with the Bridge Notes
as more particularly set forth therein; (ii) the completion of a definitive
purchase agreement and related documentation for the Bridge Notes in form and
substance reasonably satisfactory to First Union; (iii) compliance with all
applicable laws and regulations (including compliance of this letter agreement
and the Transactions described herein with all applicable federal banking laws,
rules and regulations); and (iv) the satisfaction of all other conditions
described herein, in the Term Sheet and in such definitive purchase
documentation.
This Commitment and the Term Sheet do not summarize all of the terms,
conditions, covenants, representations, warranties and other provisions which
will be contained in the definitive purchase documents for the Bridge Notes and
the Transactions contemplated thereby. First Union shall have the right to
require that such purchase documents include, in addition to the provisions
outlined herein and in the Term Sheet, provisions considered appropriate by
First Union for this type of financing transaction, as well as provisions that
First Union may deem appropriate after it is afforded the opportunity to conduct
and complete, to its satisfaction, a business, tax, legal and other due
diligence review of the Company and its respective subsidiaries, the Acquisition
and the proposed Transactions as First Union may, in its sole and individual
discretion, deem appropriate.
First Union reserves the right, prior to or after the execution of definitive
purchase documentation with respect to the Bridge Notes, to assign part of the
foregoing Commitment, in accordance with the Term Sheet, to one or more of its
affiliates. It is agreed that no such affiliate will receive compensation from
or on behalf of VS&A or the Company outside of the terms contained herein in
connection with its participation in the purchase of the Bridge Notes. VS&A and
the Company agree that First Union may share with any of its affiliates and
advisors any information related to the Transactions or any other matter
contemplated hereby, on a confidential basis.
By executing this letter agreement, VS&A and the Company also agree that, in
connection with the Permanent Financing, First Union's affiliate, First Union
Capital Markets Corp. ("Capital Markets"), shall have the right to act as sole
underwriter, sole purchaser or sole placement agent. In such capacity, Capital
Markets' obligation shall be subject to the negotiation and execution of
underwriting, purchase or private placement agreements acceptable to Capital
Markets and to other conditions customary for transactions of this type and the
absence of a material adverse change in the business and affairs of the Company
or any of their respective subsidiaries or in the financial markets generally.
VS&A agrees to reimburse, and to cause the Company to reimburse, First Union for
all of its reasonable fees and expenses (including reasonable attorneys fees and
expenses) incurred in connection with the financing contemplated by the Bridge
Notes and the Rollover Notes whether or not the Bridge Notes are purchased or
the Rollover Notes are issued by the Company. VS&A also agrees to indemnify and
hold harmless, and to cause the Company to indemnify and hold harmless, First
Union and its affiliates, directors, officers, employees and agents
(collectively, the "Indemnified Parties") from and against any and all actions,
suits, losses, claims, damages and liabilities of any kind or nature, joint or
several, to which such Indemnified Parties may become subject, related to or
arising out of the financing contemplated by the Bridge Notes and the Rollover
Notes, including without limitation the execution of definitive purchase
documentation, the closing of the Bridge Notes and the issuance of the Rollover
Notes, and will reimburse the Indemnified Parties for all out-of-pocket expenses
(including reasonable attorneys' fees and expenses) on demand as they are
incurred in connection with the investigation of,
<PAGE>
Mr. Jeffrey T. Stevenson
VS&A Communications Partners II, L.P.
August 13, 1997
Page 3
- -------------------------------------
preparation for, or defense of any pending or threatened claim or any action or
proceeding arising therefrom; provided, however, that no Indemnified Party shall
have any right to indemnification for any of the foregoing to the extent solely
resulting from or arising out of its own gross negligence or willful misconduct.
This letter agreement is addressed solely to VS&A and is not intended to confer
any obligations to or benefits upon any third party. In addition, neither First
Union, on the one hand, nor VS&A or the Company, on the other hand, shall be
liable to the other or any other person for any consequential damages that may
be alleged as a result of this letter agreement or any of the Transactions
referred to herein. The provisions of this paragraph shall survive completion of
the Transactions and any termination of this letter agreement.
Neither VS&A nor the Company is authorized to show or circulate this letter
agreement or the Term Sheet, or disclose the contents thereof, to any other
person or entity (other than to its directors, officers and legal and financial
counsel and any seller and representatives of any seller, in each case who need
to know the terms hereof, in connection with their evaluation of the
Transactions, provided that: (i) each of such persons shall agree to be bound by
the confidentiality provisions hereof and (ii) VS&A and the Company shall be
liable for any breach of such confidentiality provisions by any such person),
except as may be required by law or applicable judicial process. If VS&A or the
Company does show or circulate this letter agreement or the Term Sheet, or
disclose the contents thereof, in breach of the foregoing sentence, then VS&A
shall be deemed to have accepted this Commitment.
First Union shall have the right to review and approve any public announcement
or public filing made after the date hereof relating to the Bridge Notes, the
Permanent Financing or First Union or any of its affiliates, as the case may be,
before any such announcement or filing is made (such approval not to be
unreasonably withheld or delayed).
First Union's Commitment with respect to the Bridge Notes set forth above shall
terminate at 5:00 p.m. on August 20, 1997, unless such Commitment is accepted by
VS&A in writing prior to such time and, if accepted prior to such time, shall
expire at the earlier of the: (i) consummation of the Acquisition or another
transaction or series of transactions in which VS&A or the Company or any of
their respective affiliates acquires substantially all of the shares of stock of
T/SF Communications, Inc. identified in the first paragraph of this letter; (ii)
termination of the definitive purchase agreement with regard to the Acquisition;
(iii) occurrence of any event that First Union reasonably believes in good faith
has, or could be expected to have, a material adverse effect on the business,
properties, operations, condition (financial or otherwise) or prospects of VS&A,
the Company or any of their subsidiaries or the feasibility of the Transactions;
and (iv) 5:00 p.m. on December 31, 1997, if the closing of the Acquisition shall
not have occurred by such time.
This Commitment and the Fee Letter shall be governed by and construed in
accordance with the internal laws of the State of North Carolina, and together
constitute the entire agreement between the parties relating to the subject
matter hereof and thereof and supersede any previous agreement, written or oral,
between the parties with respect to the subject matter hereof and thereof.
[The remainder of this page is intentionally left blank.]
<PAGE>
Mr. Jeffrey T. Stevenson
VS&A Communications Partners II, L.P.
August 13, 1997
Page 4
- -------------------------------------
If VS&A is in agreement with the foregoing, please sign the enclosed copy of
this Commitment and return it to First Union with payment of the Initial
Commitment Fee referred to in the Fee Letter by no later than 5:00 p.m. on
August 20, 1997, whereupon this Commitment shall constitute a legally binding
agreement between us.
Sincerely,
First Union Corporation
By: /s/ Lloyd Sams
--------------------------------------
Lloyd Sams
Title: Managing Director
First Union Capital Markets Corp.
By: /s/ Jay Braden
--------------------------------------
Jay Braden
Title: Managing Director
Accepted and agreed
to as of the 15th
day of August , 1997.
VS&A Communications Partners II, L.P.
By: /s/ Jeffrey Stevenson
----------------------
Title: President & General Partner
<PAGE>
EXHIBIT A
SENIOR SUBORDINATED INCREASING RATE NOTES
SUMMARY OF TERMS AND CONDITIONS
ISSUER: T/SF Communications, Inc. (the "Company").
PURCHASER: First Union Corporation or one or more affiliates of First
Union Corporation, together with other purchasers or
investors designated by First Union Corporation
(collectively, and regardless of whether one or more, the
"Purchaser").
ISSUE: Senior Subordinated Increasing Rate Notes (the "Bridge
Notes") issued pursuant to a Securities Purchase Agreement
(the "Securities Purchase Agreement") between the Company
and the Purchaser.
USE OF PROCEEDS: The proceeds of the Bridge Notes will be used to finance, in
part, the Acquisition.
PRINCIPAL AMOUNT: $85,000,000
PRICE: 100.0% of principal amount.
INTEREST RATE: Interest on the Bridge Notes shall be paid at the Applicable
Interest Rate (as defined below) quarterly in arrears.
"Applicable Interest Rate" shall mean the following, as
determined as of the beginning of each three-month period:
the three-month U.S. Dollar LIBOR (as determined from
specified sources) plus 450 basis points; provided that if
--------
the Bridge Notes are not retired in whole by the end of the
first three months following the issuance date, the
Applicable Interest Rate otherwise in effect will increase
by 50 basis points and shall thereafter increase by an
additional 50 basis points at the end of each subsequent
three-month period for so long as the Bridge Notes are
outstanding (the "Incremental Spread"). The amount of cash
interest paid will be subject to a cap of 14.00% per annum,
and the remainder (if any) between the Applicable Interest
Rate and such cash interest cap owing by the Company will be
paid in kind by the issuer; provided, that in no event shall
--------
the interest paid or payable exceed 18.00% per annum.
MATURITY: One year from the date of issuance.
SUBORDINATION: The Bridge Notes will be subordinated to the Bank Credit
Facility and certain refinancings thereof.
GUARANTEES: The Company and each of its subsidiaries will jointly and
severally guarantee the obligations of the Company under the
Bridge Notes, the Rollover Notes and the Securities Purchase
Agreement.
MANDATORY
REDEMPTION: The Company will redeem the Bridge Notes with, subject to
certain agreed exceptions: (i) the net proceeds from a high-
yield subordinated debt offering; (ii) the net proceeds from
the issuance of any other debt or equity securities to the
extent permitted by the Bank Credit Facility; and (iii) the
net proceeds from asset sales not reinvested within 180 days
and in excess of the amount thereof required to be paid to
the banks under the Bank Credit Facility, in each case, at a
redemption price of par plus accrued interest.
<PAGE>
CHANGE-OF-CONTROL: The Company will redeem the Bridge Notes upon any change-of-
control of the Company at a redemption price of 103.0% of
par plus accrued interest.
INTEREST PAYMENT: Quarterly in arrears.
OPTIONAL
REDEMPTION: The Bridge Notes will be callable, in whole or in part,
upon not less than 10 days written notice, at the option of
the Company, at any time at par plus accrued interest to the
redemption date; provided that the redemption price shall be
103.0% of par plus accrued interest if the Bridge Notes are
refunded (whether at the time of redemption or maturity)
with or in anticipation of funds raised by any means other
than a transaction in which First Union Capital Markets
Corp. or any of its affiliates has acted as exclusive agent
or lead manager for the Company.
MANDATORY EXCHANGE: If the Bridge Notes have not been previously redeemed in
full for cash on or prior to maturity, the principal of the
Bridge Notes outstanding at maturity may, subject to certain
conditions precedent, be satisfied at maturity through the
issuance and delivery of 10 year rollover notes (the
"Rollover Notes"), the terms of which are outlined in
Exhibit B. The Rollover Notes will be issued at the same
time as the Bridge Notes and held in escrow, as described
above, pending such mandatory exchange.
RIGHT TO RESELL
BRIDGE NOTES: The Purchaser shall have the absolute and unconditional
right to resell the Bridge Notes to one or more third
parties, whether by assignment or participation and subject
to compliance with applicable securities laws.
EQUITY AMOUNT
ESCROWED: On the date of the issuance of the Bridge Notes, warrants
(the "Warrants"), representing 7.50% of the fully-diluted
common stock of the Company, will be placed in escrow with a
mutually agreeable escrow agent, and will be released to the
holders of the Rollover Notes (if any are issued) upon the
issuance of the Rollover Notes and at such other dates as
described in the Summary of Terms and Conditions for the
Rollover Notes.
The Warrants will be exercisable at a nominal price for a
period of ten years from the date such Warrants are released
from the escrow and will have customary anti-dilution
provisions and demand, drag-along, tag-along and piggy back
registration rights, and a Put provision upon certain events
(acceptable to the lenders under the Bank Credit Facility).
The Warrants will be freely transferable, subject to
applicable securities laws.
In addition, the Rollover Notes will be held, undated, in
escrow by the same escrow agent from the date that the
Bridge Notes are purchased.
CONDITIONS TO
FUNDING: The execution and closing of the Securities Purchase
Agreement and the funding of the Bridge Notes will be
subject to satisfaction of certain conditions precedent
customary for financings of this nature, including but not
limited to the following:
1. All documentation relating to the Acquisition shall have
been completed to the reasonable satisfaction of the
Purchaser and its counsel, and the Acquisition shall have
been consummated in accordance with the terms thereof;
2. The other financing and transactions contemplated to be
consummated on the closing date, including without
limitation the closing of the Bank Credit Facility and
the closing of Company's equity capital commitment,
<PAGE>
shall have been consummated prior to (or shall be
consummated simultaneously with) the issuance of the
Bridge Notes, all on customary terms and conditions
satisfactory to the Purchaser;
3. Satisfactory completion of all loan documentation and
other documentation relating to the Bridge Notes in form
and substance reasonably satisfactory to the Purchaser,
including issuance of appropriate guarantees, and receipt
by the Purchaser of satisfactory opinions of counsel to
the Company and the guarantors and to the Purchaser as to
the transactions contemplated thereby (including without
limitation the tax aspects thereof and compliance with
all applicable securities laws), together with customary
closing documentation;
4. All consents and approvals of the boards of directors,
shareholders, governmental and regulatory bodies and
other applicable third parties necessary or desirable in
connection with this transaction shall have been
obtained;
5. No material adverse change shall have occurred in the
business, properties, operations, condition (financial or
otherwise) or prospects of the Company or their
subsidiaries or the feasibility of the Transactions;
6. There shall be no material pending or threatened
litigation, bankruptcy or insolvency, injunction, order
or claim with respect to the Company or their
subsidiaries; and
7. No material change in the financial markets in the United
States, which, in the good faith judgment of the
Purchaser, makes it impracticable or inadvisable to
proceed with the Bridge Notes.
REPRESENTATIONS AND
WARRANTIES: The Securities Purchase Agreement will contain
representations and warranties to the holders of the Bridge
Notes which are usual and customary for financings of this
nature.
COVENANTS: The Securities Purchase Agreement will contain usual and
customary covenants for securities of this nature, including
without limitation the following:
1. Furnishing of information.
2. Maintenance of property; insurance coverage.
3. Compliance with laws; conduct of business.
4. Use of proceeds.
5. Restrictions on indebtedness.
6. Negative pledge on assets.
7. Restrictions on dividends and other restricted payments
(including redemption and prepayment of junior or pari
passu indebtedness).
8. Restrictions on asset sales, including sale-leasebacks.
9. Restrictions on transactions with affiliates.
10. Restrictions on mergers and consolidations.
11. Limitation on investments.
EVENTS OF DEFAULT: The Securities Purchase Agreement will contain usual and
customary events of default for securities of this nature or
required by the Purchaser for this transaction, including
without limitation the following:
<PAGE>
1. Failure to pay any principal when due or any interest or
fees payable within 3 days of when due.
2. Failure to meet covenants, with grace periods where
appropriate.
3. Representations or warranties false in any material
respect when made.
4. Cross-default to other material debt of the Company on
payment defaults and cross-acceleration on other
defaults.
5. Judgment defaults.
6. Other usual defaults, including without limitation
insolvency, bankruptcy and ERISA.
If an Event of Default shall occur and for so long as it
shall be continuing, the Purchaser shall have, in addition
to other customary rights and remedies including without
limitation the right to declare the principal of and all
accrued interest on all Bridge Notes to be immediately due
and payable), the right to appoint one representative to sit
on the Board of Directors of the Company.
GOVERNING LAW,
ETC.: State of North Carolina; stipulation as to non-exclusive
jurisdiction of North Carolina courts, waiver of jury trial,
and mandatory arbitration.
<PAGE>
EXHIBIT B
SENIOR SUBORDINATED PAY-IN-KIND ROLLOVER NOTES
SUMMARY OF TERMS AND CONDITIONS
ISSUER: T/SF Communications, Inc. (the "Company").
PURCHASER: The Purchaser and any other holder or holders of the Bridge
Notes (collectively, regardless of whether one or more, the
"Purchaser").
ISSUE: Senior Subordinated Pay-In-Kind Rollover Notes (the "Rollover
Notes").
ROLLOVER FEE: 3.0% of the principal amount, representing a funding fee
payable, in cash, to the Purchaser upon issuance of the
Rollover Notes.
PRINCIPAL AMOUNT: The principal amount of the Bridge Notes outstanding upon
maturity thereof.
PURPOSE: The Rollover Notes will be used in their entirety to redeem
100.0% of the outstanding principal amount of the Bridge
Notes.
MATURITY: 10 years after the exchange date of the Rollover Notes for
the Bridge Notes.
INTEREST RATE: Interest on the Rollover Notes shall be paid at the Applicable
Interest Rate (as defined below) and payable quarterly in
arrears. "Applicable Interest Rate" means the sum of (i) the
Incremental Spread (as defined in the Summary of Terms and
Conditions for the Bridge Notes) as of the date of the
issuance of the Rollover Notes, which shall (for so long as
the Rollover Notes are held by the Purchaser) increase by an
additional 50 basis points at the end of each three-month
period for so long as the Rollover Notes are outstanding, plus
----
(ii) the highest of the following, as determined as of the
beginning of each three-month period: (a) the prime rate (as
announced from time to time by First Union National Bank of
North Carolina in Charlotte, North Carolina) plus 425 basis
points, (b) three-month U.S. Dollar LIBOR (as determined from
specified sources) plus 650 basis points and (c) the highest
yield on any of the 1, 3, 5 and 10-year direct obligations
issued by the United States plus 650 basis points, but in no
event shall the Applicable Interest Rate exceed 18.00% per
annum. The amount of cash interest paid will be subject to a
cap of 14.00% per annum, and the remainder (if any) between
the Applicable Interest Rate and such cash interest cap owing
by the Company will be paid in additional Rollover Notes so
long as the total interest paid does not exceed 18.00% per
annum.
OPTIONAL
REDEMPTION: For so long as they are held by the Purchaser, the Rollover
Notes will be redeemable at the option of the Company, in
whole or in part, at any time at par plus accrued and unpaid
interest to the redemption date; provided, that if the
--------
Rollover Notes are sold to third party purchasers on a fixed
rate basis no less favorable to the Company than the
Applicable Interest Rate (it being understood that the
Purchaser shall have the right to unilaterally fix the
interest rate on the Rollover Notes in conjunction with such
third party sales and it also being understood that no such
third party sales shall take place unless the Company has been
given 10 days prior notice), the Rollover Notes will be non-
callable for 5 years from the exchange date and will be
callable thereafter at par plus accrued interest plus a
premium equal to 50.0% of the coupon in effect on the exchange
date of the Rollover Notes, declining
<PAGE>
ratably on each yearly anniversary to par one year prior to
the maturity of the Rollover Notes.
MANDATORY
REDEMPTION: Same as Bridge Notes, except that the redemption price shall
be at par plus accrued interest.
CHANGE-OF-
CONTROL: The Company will redeem the Rollover Notes upon any change-of-
control of the Company at a redemption price of 103.0% of par
plus accrued interest.
SUBORDINATION: Same as Bridge Notes.
GUARANTEES/
SECURITY: Same as Bridge Notes.
REGISTRATION
RIGHTS: The Company will file, and will use its best efforts to cause
to become effective, a "shelf" registration statement with
respect to the Rollover Notes as soon as practicable after the
issuance of the Rollover Notes. The Company will keep the
registration statement for the Rollover Notes effective until
the Rollover Notes shall have been redeemed or sold subject to
registration. If a shelf registration statement for the
Rollover Notes has either (i) not been filed within 60 days
from the exchange date of the Rollover Notes, or (ii) not been
declared effective within 120 days from the exchange date of
the Rollover Notes, the Company will pay liquidated damages of
$0.192 per week per $1,000 principal amount of Rollover Notes
until such time as such registration statement has become
effective. The Company will also pay such liquidated damages
for any period of time following the effectiveness of such
registration statement that the registration statement is not
available for resale thereunder. In addition, the holders of
the Rollover Notes will have the right to piggy-back in the
registration of any debt securities which are registered by
the Company unless all the Rollover Notes will be redeemed
from the proceeds of such securities.
RIGHT TO RESELL
ROLLOVER NOTES: The Purchaser shall have the absolute and unconditional right
to resell Rollover Notes in compliance with applicable law to
any third parties.
DEFEASANCE
PROVISIONS: None.
RELEASE OF EQUITY
FROM ESCROW: In the event that the Rollover Notes are exchanged for the
Bridge Notes, the Purchaser shall be entitled to receive and
retain, upon such exchange, Warrants held in escrow, as
described in the Summary of Terms and Conditions for the
Bridge Notes, representing the following percentages of fully-
diluted common stock of the Company and unless the Rollover
Notes have been redeemed in full prior thereto at the
following times: (i) upon such exchange, 1.875%; (ii) on each
of the 90th day, 180th day and 270th day after such exchange,
1.406%; and (iii) on the 360th day after such exchange,
1.407%.
CONDITIONS TO
EXCHANGE: The right to exchange the Rollover Notes for the Bridge Notes
will be subject to satisfaction of the following conditions
precedent: (i) at the time of exchange, there shall exist no
Default or Potential Default under the Securities Purchase
Agreement, (ii) all fees and other amounts owing to the
Purchaser shall have been paid in full and (iii) no
injunction, decree, order or judgment enjoining such exchange
shall be in effect.
<PAGE>
REPRESENTATION,
WARRANTIES,
COVENANTS,
EVENTS OF
DEFAULT,
INDEMNITIES AND
EXPENSES: As in the Securities Purchase Agreement (see Summary of Terms
and Conditions for the Bridge Notes).
GOVERNING LAW,
ETC.: State of North Carolina; stipulation as to non-exclusive
jurisdiction of North Carolina courts, waiver of jury trial,
and mandatory arbitration.
<PAGE>
EXHIBIT (b)(4)
August 13, 1997
Mr. Jeffrey T. Stevenson
VS&A Communications Partners II, L.P.
350 Park Avenue
New York, NY 10022
Dear Jeffrey:
This letter is the Fee Letter referred to in that certain letter agreement of
even date herewith (the "Letter Agreement"), from First Union to VS&A whereby
First Union has: (i) furnished its Commitment to purchase from the Company
senior subordinated increasing rate notes in the aggregate principal amount of
$85.0 million (the "Bridge Notes"), subject to the terms and conditions set
forth therein and in the Term Sheet attached thereto. Capitalized terms used
herein without definition shall have the meanings given to them in the Letter
Agreement.
To induce First Union to execute and deliver the Letter Agreement and to provide
the Commitment set forth therein, VS&A hereby agrees to pay, or to cause the
Company to pay, to First Union in cash:
(i) underwriting fees (the "High Yield Underwriting Fees") on the
Permanent Financing in amount equal to 3.00% of the gross proceeds
from the Permanent Financing;
(ii) a non-refundable fee (the "Initial Commitment Fee") in an amount equal
to 0.50% of the principal amount of the Bridge Notes for which the
Commitment has been issued;
(iii) subject to the third sentence of the following paragraph, an
additional non-refundable fee (the "Facility Fee") in an amount equal
to 0.50% of the principal amount of the Bridge Notes for which the
Commitment has been issued; and
(iv) either (a) a takedown fee (the "Takedown Fee") in an amount equal to
0.50% of the original principal amount of the Bridge Notes actually
issued by VS&A in connection with the Acquisitions or (b) in the event
VS&A should consummate, agree to undertake or accept a commitment for
any debt or equity financing in lieu of all or any portion of the
Bridge Notes in any transaction other than a transaction in which
First Union or any of its affiliates has acted as lead managing
underwriter, lead purchaser or lead placement agent, a termination fee
(the "Bridge Termination Fee") in an amount equal to 1.50% of the
principal amount of Bridge Notes for which the Commitment has been
issued. Notwithstanding the foregoing, if First Union and VS&A
mutually agree not to consummate the Permanent Financing, the Bridge
Termination Fee shall be waived.
The High Yield Underwriting Fees shall be fully earned and payable upon the
closing of the Permanent Financing. The Initial Commitment Fee shall be fully
earned and payable upon acceptance of the Letter Agreement by VS&A. The
Facility Fee shall be payable only in the event that the Commitment is
outstanding but not drawn for a period of ninety days after the actual date of
VS&A's acceptance of the Letter Agreement
<PAGE>
Mr. Jeffrey T. Stevenson
VS&A Communications Partners II, L.P.
August 13, 1997
Page 2
- -------------------------------------
and in such event shall be fully earned and payable on the ninety-first day
after such date of acceptance. The Takedown Fee shall be fully earned and
payable upon the initial purchase of any Bridge Notes and the Bridge Termination
Fee shall be fully earned and payable upon VS&A's consummation, agreement to
undertake or acceptance of a commitment for any debt or equity financing in any
transaction other than a transaction in which First Union or any of its
affiliates has acted as lead managing underwriter, lead purchaser or lead
placement agent as provided above. Once paid, each such fee shall not be
refundable for any reason.
Any fees referred to in this letter have been determined independently of any
other services or financing that has been or may be performed or provided by
First Union or any of its affiliates. First Union may allocate to any affiliate
thereof any of the fees (or portion thereof) payable hereunder.
First Union's Commitment as set forth in the Letter Agreement is subject to its
receipt of a signed copy of this letter together with a signed copy of the
Letter Agreement and payment of the Initial Commitment Fee. VS&A is not
authorized to show or circulate this letter, or disclose its contents, to any
other person or entity (other than its directors, officers, and legal and
financial counsel in connection with their evaluation of the Commitment,
provided that each of such persons shall also be bound by the confidentiality
provisions hereof), except as may be required by law or applicable judicial
process.
[The remainder of this page is intentionally left blank.]
<PAGE>
Mr. Jeffrey T. Stevenson
VS&A Communications Partners II, L.P.
August 13, 1997
Page 3
- -------------------------------------
If VS&A is in agreement with the foregoing, please sign the enclosed copy of
this letter and return it to First Union.
Sincerely,
First Union Corporation
By: /s/ GEORGE COLE
------------------------------------
George Cole
Title: Director
First Union Capital Markets Corp.
By: /s/ ERIC LLOYD
------------------------------------
Eric Lloyd
Title: Director
Accepted and agreed
to as of the 15th
day of August, 1997.
VS&A Communications Partners II, L.P.
By: (illegible)
------------------------------------
Title: President and General Partner
<PAGE>
EXHIBIT (c)(1)
________________________________
STOCK PURCHASE AGREEMENT
among
VS&A COMMUNICATIONS PARTNERS II, L.P.
VS&A-T/SF, INC.
and
T/SF COMMUNICATIONS CORPORATION
dated as of
August 15, 1997
________________________________
<PAGE>
STOCK PURCHASE AGREEMENT
August 15, 1997
---------------
The parties to this agreement are VS&A Communications Partners II,
L.P., a Delaware limited partnership ("Parent"), VS&A-T/SF, Inc., a Delaware
corporation and a wholly owned subsidiary of Parent (the "Sub"), and T/SF
Communications Corporation, a Delaware corporation (the "Company").
The parties wish to provide for a recapitalization of the Company by
means of a tender offer by the Company (the "Offer") to purchase all of the
Company's shares of Common Stock, par value $.10 per share ("Common Stock), at a
price of $40.25 per share and a purchase by the Sub of not less than 869,565
shares of Common Stock at the Offer Price (the "Stock Purchase"), followed by a
merger (the "Merger") of the Sub into the Company or a reverse stock split of
the Common Stock (the "Stock Split"). Pursuant to agreements dated this date
between the Sub and certain stockholders of the Company (the "Stockholder
Agreements"), those stockholders have agreed to tender their shares in the
Offer. Pursuant to an agreement dated this date (the "Fir Tree Agreement"), Fir
Tree Partners and its affiliates ("Fir Tree"), the owner of 487,500 shares (the
"Fir Tree Shares") of Common Stock, has agreed not to tender the Fir Tree Shares
in the Offer, and Parent and Fir Tree have agreed that Fir Tree will remain a
stockholder of the Company following the Merger or the Stock Split.
It is therefore agreed as follows:
ARTICLE I
THE OFFER
---------
Section 1.1 Terms of The Offer.
------------------
(a) As promptly as practicable (but in no event later than 15
business days after the public announcement of the execution of this agreement),
the Company shall commence (within the meaning of Rule 13e-4 under the
Securities Exchange Act of 1934, as amended (the "Exchange Act")) the Offer for
all of the Company's outstanding shares of Common Stock at a price of $40.25 per
share, net to the seller in cash, subject to the conditions referred to below,
and shall consummate the Offer in accordance with its terms. The Offer shall be
made by means of an offer to purchase (the "Offer to Purchase") containing the
terms set forth in this agreement, and the Company shall, on the terms and
subject to the prior satisfaction or waiver of the conditions of the Offer,
accept for payment and pay for shares tendered as soon as it is legally
permitted to do so under applicable law. The price per share referred to in this
Section 1.1(a), or such other price per share as may be paid in the Offer, is
referred to in this agreement as the "Offer Price" and the date on which the
Company consummates the purchase of the shares in the Offer is referred to in
this agreement as the "Offer Closing Date".
<PAGE>
(b) The obligations of the Company to accept for payment and
to pay for any shares tendered prior to the expiration of the Offer shall be
subject only to (i) the condition that there shall be validly tendered and not
withdrawn prior to the expiration of the Offer at least 1,600,000 shares of
Common Stock (the "Minimum Condition"), (ii) there being available to the
Company the funds required to consummate the purchase of the shares in the Offer
from the proceeds of the Stock Purchase and the Bank Financing (each as defined
below) and (iii) the other conditions set forth in Annex A. The Company shall
amend, modify or waive the terms and conditions of the Offer only upon the
request of, and in the manner requested by, Parent or the Sub, provided that the
--------
Company shall not be required to amend or waive the Minimum Condition, decrease
the Offer Price or the number of shares sought, or amend any other condition of
the Offer in any manner adverse to the holders of the shares; provided, however,
that if on the initial scheduled expiration date of the Offer (which shall be 20
business days after the date the Offer is commenced), all conditions to the
Offer shall not have been satisfied or waived, the Company may and shall, if
requested by Parent or the Sub, extend the expiration date; provided, further,
however, any extension beyond 10 business days shall require the approval of the
Company and the Parent.
(c) As soon as practicable on the date the Offer is commenced,
the Company shall file with the United States Securities and Exchange Commission
(the "SEC") an Issuer Tender Offer Statement on Schedule 13E-4 with respect to
the Offer (together with all amendments and supplements thereto and including
the exhibits thereto, the "Schedule 13E-4"). The Schedule 13E-4 shall include,
as exhibits, the Offer to Purchase, a form of letter of transmittal and summary
advertisement, the information required by Section 14(f) of the Exchange Act,
and any disclosure required by Rule 13e-3 under the Exchange Act which is
permitted to be included in the Schedule 13E-4 (collectively, together with any
amendments and supplements thereto, the "Offer Documents"). The Company shall
also file with the SEC, if necessary, a Rule 13e-3 Transaction Statement
(together with the Offer Documents, the "SEC Filings"). The SEC Filings shall
comply in all material respects with the provisions of applicable federal
securities laws and, on the date filed with the SEC and on the date first
published, sent or given to the Company's stockholders, shall not contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading, except
that the Company shall not have any responsibility to either Parent or the Sub
with respect to information furnished by Parent or the Sub to the Company in
writing, expressly for inclusion in the SEC Filings. The information supplied by
Parent or the Sub to the Company in writing expressly for inclusion in the SEC
Filings shall not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading. The Company shall take all steps necessary to cause the
Offer Documents to be filed with the SEC and to be disseminated to holders of
the issued and outstanding shares of Common Stock (the "Shares"), in each case
as and to the extent required by applicable federal securities laws. Each of
Parent and the Sub, on the one hand, and the Company, on the other hand,
promptly shall correct any information provided by it for use in the SEC Filings
if and to the extent that it shall have become false or misleading in any
material respect and the Company shall take all steps necessary to cause the SEC
Filings as so corrected to be filed with the SEC and the Offer Documents to be
disseminated to holders of the Shares, in each case as and to the extent
required by applicable federal securities laws. Parent, the Sub and their
counsel shall be given the
2
<PAGE>
opportunity to review the SEC Filings before they are filed with the SEC. In
addition, the Company shall provide Parent, the Sub and their counsel in writing
with any comments, whether written or oral, the Company or its counsel may
receive from time to time from the SEC or its staff with respect to the SEC
Filings promptly after the receipt of such comments, as well as the response
thereto by the Company or its counsel.
Section 1.2 Company Actions.
---------------
(a) The Company hereby confirms that it approves of and
consents to the Offer and represents that the Board of Directors, at a meeting
duly called and held, has (i) unanimously determined that each of this
agreement, the Offer, the Stock Purchase and the Merger or the Stock Split are
fair to and in the best interests of the stockholders of the Company, (ii)
approved this agreement and the Stockholder Agreements and the transactions
contemplated hereby and thereby, including the Offer and the Stock Purchase and
such approval constitutes approval of the Offer, this agreement, the Stockholder
Agreements, the Stock Purchase, the Merger or the Stock Split and the
transactions contemplated hereby and thereby for purposes of Section 203 of the
DGCL, with the effect that Section 203 of the DGCL will not apply to the
transactions contemplated by this agreement or the Stockholder Agreements, and
(iii) resolved to recommend that the stockholders of the Company accept the
Offer and tender their shares to the Company pursuant to the Offer provided that
such recommendation may be withdrawn, modified or amended if, in the opinion of
the Board of Directors, only after receipt of written advice from independent
legal counsel, failure to withdraw, modify or amend such recommendation would
result in the Board of Directors violating its fiduciary duties to the Company's
stockholders under applicable law. The Company further confirms that Prudential
Securities Incorporated (the "Financial Advisor") has delivered to the Board its
opinion to the effect that the cash consideration to be received by the holders
of Common Stock in the Offer is fair to such holders from a financial point of
view (the "Fairness Opinion"). The Company represents that the actions set forth
in this Section 1.2(a) and the other actions it has taken in connection
therewith are sufficient to render the relevant provisions of such Section 203
of the DGCL inapplicable to the Offer, the Stock Purchase and the Stockholder
Agreements.
(b) On the Offer Closing Date, Parent or the Sub shall be
entitled to designate for appointment or election each of the members of the
Board of Directors of the Company and the Company shall obtain the resignation
of each member of the Board of Directors immediately prior thereto. In
connection therewith, the Company shall mail to the stockholders of the Company
any information required by Section 14(f) of the Exchange Act and Rule 14f-1
thereunder unless such information has previously been provided to such
stockholders in the Schedule 13E-4. Parent or the Sub shall provide to the
Company in writing, and shall be solely responsible for, any information with
respect to its nominees, officers, directors and Affiliates required by Section
14(f) of the Exchange Act and Rule 14f-1 thereunder.
(c) The Company shall not, nor shall it permit any of its
Subsidiaries (as defined in Section 3.1) to, tender into the Offer any Shares
beneficially owned by it.
3
<PAGE>
Section 1.3 Stock Purchase Closing.
----------------------
Upon the terms and subject to the conditions of this agreement, the
Company shall sell to the Sub, and the Sub shall purchase from the Company for
investment, at the Stock Purchase Closing (as defined below) not less than
869,565 shares of Common Stock at a per share purchase price equal to $40.25 (or
an aggregate purchase price of not less than $34,999,991 for such shares). Not
less than three days prior to the Stock Purchase Closing, the Sub shall give
notice to the Company specifying the number of shares of Common Stock to be
purchased by the Sub. The shares of Common Stock to be purchased by the Sub
hereunder are referred to herein as the "Sub Shares." The consummation of the
Stock Purchase (the "Stock Purchase Closing") shall take place simultaneously
with the closing of the Offer on the Offer Closing Date at the offices of
Proskauer Rose LLP, 1585 Broadway, New York, N.Y., or such other location agreed
upon by the Company and the Sub. At the Stock Purchase Closing, the Company
shall deliver to the Sub one or more certificates representing the Sub Shares
being purchased by Sub, registered in the name of Sub, against receipt by the
Company of the aggregate purchase price therefor, payable in its entirety by
wire transfer of immediately available funds to an account specified in writing
by the Company at least one business day prior to the date of the Stock Purchase
Closing.
Section 1.4 Use of Proceeds. The proceeds received by the Company
---------------
from the sale of the Sub Shares and the Bank Financing shall be used by the
Company to satisfy its obligations to pay for all Shares validly tendered
pursuant to the Offer and not withdrawn prior to the expiration date of the
Offer and to make the payments in respect of the Company Options pursuant to
Section 1.5 and, if there remain any proceeds after such obligations are fully
satisfied, for general corporate purposes.
Section 1.5 Company Plans.
-------------
(a) On the Offer Closing Date, each outstanding employee stock
option to purchase shares (a "Company Option") granted under the Company's 1994
Incentive Stock Plan or Incentive Stock Option Plan (collectively, the "Option
Plan") shall be converted into the right to receive an amount equal to (i) the
product of the number of the shares which are issuable upon exercise of such
Company Option, multiplied by the Offer Price, less (ii) the aggregate exercise
price of such Company Option, provided, however, that with respect to any person
subject to Section 16(a) of the Exchange Act, any such payment shall not be
payable until the first date payment can be made without liability to such
person under Section 16(b) of the Exchange Act, but shall be paid as soon as
practicable thereafter. The Company shall take all necessary action prior to the
Offer Closing Date to facilitate the conversion and payment in consideration for
the Company Options described in this Section 1.5. The Company shall withhold
all income or other taxes as required under applicable law prior to distribution
of the cash amount received under this Section 1.5 to the holders of Company
Options.
(b) The Option Plan shall terminate as of the Offer Closing
Date and the provisions in any other plan, program or arrangement providing for
the issuance or grant of any other interest in respect of the capital stock of
the Company or any of its Subsidiaries (except as disclosed on Schedule 3.2 to
the Company Disclosure Schedule with respect to Casino Publishing Company)
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shall be deleted as of the Offer Closing Date so that on and after the Offer
Closing Date no holder of a Company Option shall have any option to purchase
shares or any other equity interest in the Company.
(c) Prior to the Offer Closing Date, the Company shall deliver
to Parent or the Sub an agreement from each holder of a Company Option agreeing
to exchange his or her Company Options at the Offer Closing Date for the cash
payment set forth in Section 1.5(a).
ARTICLE II
THE MERGER OR STOCK SPLIT
-------------------------
As soon as practicable after the Offer Closing Date, the Sub shall
cause the Company to effect the Merger or the Stock Split, pursuant to which
each share of Common Stock not tendered in the Offer (other than the Shares held
by Sub and Fir Tree or any shares held by stockholders exercising appraisal
rights pursuant to Section 262 of the DGCL) shall be converted into the right to
receive an amount equal to the Offer Price, payable to the holder, without
interest, upon surrender of the certificate formerly representing that Share.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
---------------------------------------------
The Company represents and warrants to Parent and the Sub that all of
the statements contained in this Article III are true and correct as of the date
of this agreement (or, if made as of a specified date, as of such date), except
as set forth in the schedule attached to this agreement setting forth exceptions
to the Company's representations and warranties set forth herein (the "Company
Disclosure Schedule").
Section 3.1 Organization. Each of the Company and its Subsidiaries
------------
is a corporation duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation or organization and has all
requisite corporate power and authority and all necessary governmental approvals
to own, lease and operate its properties and to carry on its business as now
being conducted. As used in this agreement, the term "Subsidiary" shall mean all
corporations or other entities in which the Company or the Parent, as the case
may be, owns 50% or more of the issued and outstanding capital stock or similar
interests or otherwise possesses, directly or indirectly, control over the
direction of management or policies of such corporation or other entity. The
Company and each of its Subsidiaries is duly qualified or licensed to do
business and in good standing in each jurisdiction in which the property owned,
leased or operated by it or the nature of the business conducted by it makes
such qualification or licensing necessary, except where the failure to be so
duly qualified or licensed and in good standing would not individually or in the
aggregate have or be reasonably likely to have a Material Adverse Effect. As
used in this agreement,
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the term "Material Adverse Effect" shall mean a material adverse effect on the
condition (financial or otherwise), business, results of operations or prospects
of any of the exposition services division of the Company, the information
services division of the Company or the Company and its Subsidiaries taken as a
whole. Except as set forth in Section 3.1 of the Company Disclosure Schedule,
the Company does not own any equity interest in any corporation or other entity
or marketable securities, where the Company's equity interest in any entity
exceeds five percent of the outstanding equity of such entity on the date
hereof.
Section 3.2 Capitalization.
--------------
(a) The authorized capital stock of the Company consists of
10,000,000 shares of Common Stock and 1,000,000 shares of preferred stock, par
value $10 per share (the "Preferred Stock"). As of the date hereof, (i)
3,331,646 shares of Common Stock are issued and outstanding, (ii) no shares of
Common Stock are issued and held in the treasury of the Company, (iii) no shares
of Preferred Stock are issued and outstanding, and (iv) 360,500 shares of Common
Stock are reserved for issuance upon exercise of Company Options, in each case
under the Option Plan, as set forth on Schedule 3.2 to the Company Disclosure
Schedule. All the outstanding shares of the Company's capital stock are, and all
shares which may be issued pursuant to the exercise of outstanding Company
Options will be, when issued in accordance with the respective terms thereof,
duly authorized, validly issued, fully paid and non-assessable. The shares of
Common Stock to be issued to the Sub on the Offer Closing Date pursuant to
Section 1.3 will be, when issued in accordance with the terms thereof, duly
authorized, validly issued, fully paid and non-assessable. There are no bonds,
debentures, notes or other indebtedness having general voting rights (or
convertible into securities having such rights) ("Voting Debt") of the Company
or any of its Subsidiaries issued and outstanding. Except as set forth above and
except for the transactions contemplated by this agreement, as of the date
hereof, (i) there are no shares of capital stock of the Company authorized,
issued or outstanding, (ii) there are no existing options, warrants, calls, pre-
emptive rights, subscriptions or other rights, agreements, arrangements or
commitments of any character, relating to the issued or unissued capital stock
of the Company or any of its Subsidiaries, obligating the Company or any of its
Subsidiaries to issue, transfer or sell or cause to be issued, transferred or
sold any shares of capital stock or Voting Debt of, or other equity interest in,
the Company or any of its Subsidiaries or securities convertible into or
exchangeable for such shares or equity interests, or obligating the Company or
any of its Subsidiaries to grant, extend or enter into any such option, warrant,
call, subscription or other right, agreement, arrangement or commitment and
(iii) except as set forth in Section 3.2 of the Company Disclosure Schedule,
there are no outstanding contractual obligations of the Company or any of its
Subsidiaries to repurchase, redeem or otherwise acquire any Shares, or the
capital stock of the Company, or any Subsidiary or affiliate of the Company or
to provide funds to make any investment (in the form of a loan, capital
contribution or otherwise) in any Subsidiary or any other entity.
(b) All of the outstanding shares of capital stock of each of
the Subsidiaries are beneficially owned by the Company (except as set forth in
Section 3.2 of the Company Disclosure Schedule), directly or indirectly, and all
such shares have been validly issued and are fully paid and nonassessable and
are owned by either the Company or one of its Subsidiaries free and clear of all
liens, charges, claims or encumbrances ("Encumbrances").
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(c) There are no voting trusts or other agreements or
understandings to which the Company or any of its Subsidiaries is a party with
respect to the voting of the capital stock of the Company or any of the
Subsidiaries.
Section 3.3 Authorization; Validity of Agreement; Company Action.
----------------------------------------------------
The Company has full corporate power and authority to execute and deliver this
agreement and to consummate the transactions contemplated hereby. The
execution, delivery and performance by the Company of this agreement, and the
consummation by it of the transactions contemplated hereby, have been duly
authorized by its Board of Directors and, except for the approval of the Merger
or the Stock Split by the Company's stockholders, no other corporate action on
the part of the Company is necessary to authorize the execution and delivery by
the Company of this agreement and the consummation by it of the transactions
contemplated hereby. This agreement has been duly executed and delivered by the
Company and, assuming due and valid authorization, execution and delivery hereof
by Parent and the Sub, is a valid and binding obligation of the Company
enforceable against the Company in accordance with its terms.
Section 3.4 Consents and Approvals; No Violations. Except for the
-------------------------------------
filings, consents and approvals set forth in Section 3.4 of the Company
Disclosure Schedule and the filings, permits, authorizations, consents and
approvals as may be required under, and other applicable requirements of, the
Exchange Act, the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended (the "HSR Act"), state securities or blue sky laws, and the DGCL, none
of the execution, delivery or performance of this agreement by the Company, the
consummation by the Company of the transactions contemplated hereby or
compliance by the Company with any of the provisions hereof will (i) conflict
with or result in any breach of any provision of the certificate of
incorporation, the by-laws or similar organizational documents of the Company or
of any of its Subsidiaries, (ii) require any filing with, or permit,
authorization, consent or approval of, any court, arbitral tribunal,
administrative agency or commission or other governmental or other regulatory
authority or agency (a "Governmental Entity"), (iii) result in a violation or
breach of, or constitute (with or without due notice or lapse of time or both) a
default (or give rise to any right of termination, amendment, cancellation or
acceleration) under, any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, lease, license, contract, agreement or other
instrument or obligation to which the Company or any of its Subsidiaries is a
party or by which any of them or any of their properties or assets may be bound
(the "Company Agreements") or (iv) violate any order, writ, injunction, decree,
statute, rule or regulation applicable to the Company, any of its Subsidiaries
or any of their properties or assets. Section 3.4 of the Company Disclosure
Schedule sets forth a list of all third party consents and approvals required to
be obtained in connection with this agreement under the Company Agreements prior
to the consummation of the transactions contemplated by this agreement.
Section 3.5 SEC Reports and Financial Statements. The Company has
------------------------------------
filed with the SEC, and has heretofore made available to Parent, true and
complete copies of, all forms, reports, schedules, statements and other
documents required to be filed by it under the Exchange Act or the Securities
Act of 1933, as amended (the "Securities Act") (as such documents have been
amended since the time of their filing, collectively, the "Company SEC
Documents"). As of their respective dates or, if amended, as of the date of the
last such amendment, the Company SEC Documents,
7
<PAGE>
including, without limitation, any financial statements or schedules included
therein (a) did not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading and (b) complied in all material respects with the
applicable requirements of the Exchange Act and the Securities Act, as the case
may be, and the applicable rules and regulations of the SEC thereunder. None of
the Company's Subsidiaries is required to file any forms, reports or other
documents with the SEC. The financial statements of the Company included in the
Company SEC Documents (the "Financial Statements") have been prepared from, and
are in accordance with, the books and records of the Company and its
consolidated Subsidiaries, comply in all material respects with applicable
accounting requirements and with the published rules and regulations of the SEC
with respect thereto, have been prepared in accordance with generally accepted
accounting principles ("GAAP") applied on a consistent basis during the periods
involved (except as may be indicated in the notes thereto and except for the
absence of footnotes with respect to interim Financial Statements) and fairly
present the consolidated financial position and the consolidated results of
operations and cash flows of the Company and its consolidated Subsidiaries as of
the times and for the periods referred to therein.
Section 3.6 Absence of Certain Changes. Except as disclosed in
--------------------------
Section 3.6 of the Company Disclosure Schedule, since December 31, 1996 the
Company and its Subsidiaries have conducted their respective businesses only in
the ordinary and usual course and there have not occurred any events or changes
having or reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect.
Section 3.7 No Undisclosed Liabilities. Except (a) as disclosed in
--------------------------
the Financial Statements and (b) for liabilities and obligations (x) incurred in
the ordinary course of business and consistent with past practice, (y) arising
pursuant to the terms of this agreement or (z) set forth in Section 3.7 of the
Company Disclosure Schedule, since December 31, 1996, neither the Company nor
any of its Subsidiaries has incurred any liabilities or obligations of any
nature, whether or not accrued, contingent or otherwise, that, individually or
in the aggregate, have, or would be reasonably likely to have, a Material
Adverse Effect, or would be required by GAAP to be reflected on a consolidated
balance sheet of the Company and its Subsidiaries (including the notes thereto).
Section 3.8 Litigation. Except as set forth in Section 3.8 of the
----------
Company Disclosure Schedule, there are no suits, claims, actions, proceedings,
including, without limitation, arbitration proceedings or alternative dispute
resolution proceedings, or investigations pending or, to the Company's
knowledge, threatened against the Company or any of its Subsidiaries before any
Governmental Entity which if adversely determined would have an adverse effect
on the Company or a Subsidiary in excess of $50,000. Except as disclosed in
Section 3.8 of the Company Disclosure Schedule, neither the Company nor any of
its Subsidiaries is subject to any outstanding order, writ, injunction or
decree.
Section 3.9 Employee Benefit Plan; ERISA.
----------------------------
(a) Section 3.9(a) of the Company Disclosure Schedule sets
forth a true and complete list (or, in the case of an unwritten plan, a
description) of all employee benefit plans,
8
<PAGE>
arrangements, contracts or agreements (including employment agreements,
severance agreements and managers' insurance plans) of any type, statutory or
otherwise (including but not limited to plans described in Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), but
specifically excluding commission and incentive pay plans covering employees
other than officers of the Company that have been adopted by the Company in the
ordinary course of business consistent with past practice and that can be
amended or terminated after December 31, 1997), maintained by the Company, any
of its Subsidiaries or any trade or business, whether or not incorporated (an
"ERISA Affiliate"), which together with the Company would be deemed a "single
employer" within the meaning of Section 414(b), 414(c) or 414(m) of the Internal
Revenue Code of 1986, as amended (the "Code"), or the regulations issued under
Section 414(o) of the Code (the "Benefit Plans"). Except as disclosed in Section
3.9(a) of the Company Disclosure Schedule, neither the Company nor any ERISA
Affiliate has any formal plan or commitment, whether legally binding or not, to
create any additional Benefit Plan or modify or change any existing Benefit Plan
that would affect any employee or terminated employee of the Company or any of
its Subsidiaries.
(b) With respect to each Benefit Plan: (i) if intended to
qualify under Section 401(a) of the Code, such plan so qualifies, and its trust
is exempt from taxation under Section 501(a) of the Code, there have been no
amendments to any such Benefit Plan which are not the subject of a favorable
determination letter, and no condition exists that would reasonably be expected
to affect such qualification; (ii) such plan has been administered in all
material respects in accordance with its terms and applicable statutes, orders
or governmental rules or regulations, including but not limited to ERISA and the
Code, no notice has been issued by any Governmental Entity questioning or
challenging such compliance, and no condition exists that would be expected to
affect such compliance; (iii) no breaches of fiduciary duty have occurred which
might reasonably be expected to give rise to material liability on the part of
the Company; (iv) no disputes are pending, or, to the Company's knowledge,
threatened that might reasonably be expected to give rise to material liability
on the part of the Company; (v) no prohibited transaction (within the meaning of
Section 406 of ERISA) has occurred that would give rise to material liability on
the part of the Company or any ERISA Affiliate; and (vi) all contributions and
premiums due as of the date hereof in respect of any Benefit Plan (taking into
account any extensions for such contributions and premiums) have been made in
full or accrued on the Company's balance sheet.
(c) Except as set forth in Section 3.9(c) of the Company
Disclosure Schedule, neither the Company nor any ERISA Affiliate (i) has
incurred an accumulated funding deficiency, as defined in the Code and ERISA, or
(ii) has any material liability under Title IV of ERISA with respect to any
employee benefit plan that is subject to Title IV of ERISA.
(d) With respect to each Benefit Plan that provides employee
benefits other than pension benefits (including but not limited to each Benefit
Plan that is a "welfare plan" (as defined in Section 3(l) of ERISA)), except as
disclosed in Section 3.9(d) of the Company Disclosure Schedule, no such plan
provides medical or death benefits with respect to current or former employees
of the Company or any of its Subsidiaries beyond their termination of
employment, other than as required by law.
9
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(e) Except as set forth in Section 3.9(e) of the Company
Disclosure Schedule, neither the execution of this agreement nor the
consummation of the transactions contemplated hereby will (i) entitle any
individual to severance pay or accelerate the time of payment or vesting, or
increase the amount, of compensation or benefits due to any individual, (ii)
constitute or result in a prohibited transaction under Section 4975 of the Code
or Section 406 of ERISA or (iii) subject the Company, any of its Subsidiaries,
any ERISA Affiliate, any of the Benefit Plans, any related trust, any trustee or
administrator of any thereof, or any party dealing with the Benefit Plans or any
such trust to either a civil penalty assessed pursuant to Section 409 or 502(i)
of ERISA or a tax imposed pursuant to Section 4975 of the Code.
(f) There is no Benefit Plan that is a "multiemployer plan",
as such term is defined in Section 3(37) of ERISA.
(g) With respect to each Benefit Plan, the Company has
previously delivered to Parent or its representatives accurate and complete
copies of all plan documents, summary plan descriptions, summaries of material
modifications, trust agreements and other related agreements, including all
amendments to the foregoing; the most recent annual report; the annual and
periodic accounting of plan assets in respect of the two most recent plan years;
the most recent determination letter received from the United States Internal
Revenue Service (the "Service"); and the actuarial valuation, to the extent any
of the foregoing may be applicable to a particular Benefit Plan, in respect of
the two most recent plan years.
Section 3.10 Tax Matters; Government Benefits.
--------------------------------
Except as set forth in Section 3.10 of the Company Disclosure
Schedule:
(a) The Company and its Subsidiaries have filed all Tax
Returns (as hereinafter defined) that are required to be filed and have paid or
caused to be paid all Taxes (as hereinafter defined) that are either shown on
such Tax Returns as due and payable or otherwise due or claimed to be due by any
taxing authority. All such Tax Returns are correct and complete in all material
respects and accurately reflect all liability for Taxes for the periods covered
thereby. All Taxes owed and due by the Company and each of its Subsidiaries for
results of operations through December 31, 1996 (whether or not shown on any Tax
Return) have been paid or have been adequately reflected on the Company's
consolidated balance sheet as of December 31, 1996 included in the Financial
Statements (the "Balance Sheet"). Since December 31, 1996, the Company has not
incurred liability for any Taxes other than in the ordinary course of business.
Neither the Company nor any of its Subsidiaries has received written notice of
any claim made by an authority in a jurisdiction where neither the Company nor
any of its Subsidiaries file Tax Returns that the Company is or may be subject
to taxation by that jurisdiction.
(b) Neither the Company nor any of its Subsidiaries has
violated any applicable law of any jurisdiction relating to the payment and
withholding of Taxes, including, without limitation, (x) withholding of Taxes
pursuant to Sections 1441 and 1442 of the Code or similar provisions under non-
U.S. law and (y) withholding of Taxes in respect of amounts paid or owing to any
employee, creditor, independent contractor or other third party. The Company and
each
10
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of its Subsidiaries have, in the manner prescribed by law, withheld and paid
when due all Taxes required to have been withheld and paid under all applicable
laws.
(c) There are no Encumbrances upon the shares of capital stock
of any of the Company's Subsidiaries or any of the assets or properties of the
Company or any of its Subsidiaries or, to the Company's knowledge, on any of the
shares that arose in connection with any failure (or alleged failure) to pay any
Tax when due.
(d) Neither the Company nor any of its Subsidiaries has waived
any statute of limitations in any jurisdiction in respect of Taxes or Tax
Returns or agreed to any extension of time with respect to a Tax assessment or
deficiency.
(e) No federal, state, local or foreign audits, examinations
or other administrative proceedings have been commenced or, to the Company's
knowledge, are pending with regard to any Taxes or Tax Returns of the Company or
of any of its Subsidiaries. No written notification has been received by the
Company or by any of its Subsidiaries that such an audit, examination or other
proceeding is pending or threatened with respect to any Taxes due from or with
respect to or attributable to the Company or any of its Subsidiaries or any Tax
Return filed by or with respect to the Company or any of its Subsidiaries. To
the Company's knowledge, there is no dispute or claim concerning any Tax
liability of the Company or any of its Subsidiaries either claimed or raised by
any taxing authority in writing.
(f) During their most recent five taxable years, respectively,
neither the Company nor any of its Subsidiaries has made a change in tax
accounting methods, received a ruling from any taxing authority or signed an
agreement with any taxing authority which have or would be reasonably likely to
have a Material Adverse Effect. Neither the Company nor any of its Subsidiaries
is required to include in income any adjustment pursuant to Section 481(a) of
the Code or any similar provision of foreign, state or local law, by reason of a
voluntary change in tax accounting method (nor has any taxing authority proposed
in writing any such adjustment or change of accounting method).
(g) Neither the Company nor any of its Subsidiaries is a party
to, is bound by or has any obligation under any Tax sharing agreement, Tax
indemnification agreement or similar contract or arrangement (other than
contracts or arrangements among the Company and its Subsidiaries). Neither the
Company nor any of its Subsidiaries is aware of any potential liability or
obligation to any person as a result of, or pursuant to, any such agreement,
contract or arrangement. Neither the Company nor any of its Subsidiaries has any
liability for Taxes of another person by contract or otherwise.
(h) No power of attorney with respect to any matter relating
to Taxes or Tax Returns has been granted by or with respect to the Company or
any of its Subsidiaries.
(i) Neither the Company nor any of its Subsidiaries is a party
to any agreement, plan, contract or arrangement that could result, separately or
in the aggregate, in the payment of any "excess parachute payments" within the
meaning of Section 280G of the Code.
11
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(j) During the most recent five taxable years of the Company
and of each of its Subsidiaries, no closing agreement pursuant to Section 7121
of the Code (or any predecessor provision, or any similar provision of any
state, local or foreign law) has been entered into by or with respect to the
Company or any of its Subsidiaries.
(k) Neither the Company nor any of its Subsidiaries has filed
a consent pursuant to Section 341(f) of the Code (or any predecessor provision)
concerning collapsible corporations, or agreed to have Section 341(f)(2) of the
Code apply to any disposition of a "subsection (f) asset" (as such term is
defined in Section 341(f)(4) of the Code) owned by the Company or any of its
Subsidiaries.
(l) The Company has never been a United States real property
holding corporation within the meaning of Section 897(c)(2) of the Code during
the applicable period specified in Section 897(c)(1)(A)(ii) of the Code. The
Company has never been a member of an Affiliated Group within the meaning of
Section 1504 of the Code. None of the Subsidiaries of the Company is a foreign
personal holding company within the meaning of Section 552 of the Code or a
passive foreign investment company within the meaning of Section 1296 of the
Code.
(m) No taxing authority is asserting or threatening to assert
a claim against the Company or any of its Subsidiaries under or as a result of
Section 482 of the Code or any similar provision of state, local or foreign law.
(n) The Company has delivered to Parent complete and accurate
copies of each of: (A) all audit, examination and similar reports and all letter
rulings and technical advice memoranda filed or received by the Company during
the last five years relating to federal, state, local and foreign Taxes due from
or with respect to the Company and its Subsidiaries; (B) all federal, state and
local and foreign Tax Returns, Tax examination reports and similar documents
filed by the Company and its Subsidiaries during the last five years; and (C)
all closing agreements entered into by the Company and its Subsidiaries with any
taxing authority and all statements of Tax deficiencies assessed against or
agreed to by the Company and its Subsidiaries during the last five years. The
Company shall deliver to the Sub all materials with respect to the foregoing for
all matters arising after the date hereof.
(o) As used in this agreement, the following terms shall have
the following meanings:
(i) "Tax" or "Taxes" shall mean all taxes, charges, fees,
duties, levies, penalties or other assessments imposed by any federal,
state, local or foreign governmental authority, including, but not limited
to, income, gross receipts, excise, property, sales, gain, use, license,
custom duty, unemployment, capital stock, transfer, franchise, payroll,
withholding, social security, minimum, estimated and other taxes, and shall
include interest, penalties or additions attributable thereto; and
12
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(ii) "Tax Return" shall mean any return, declaration,
report, claim for refund, or information return or statement relating to
Taxes, including any schedule or attachment thereto, and including any
amendment thereof.
Section 3.11 Title and Condition of Properties. Except as set forth
---------------------------------
in Section 3.11 of the Company Disclosure Schedule, the Company and its
Subsidiaries own good and marketable title, free and clear of all Encumbrances,
to all of the real and personal property and assets shown on the Balance Sheet
or acquired after December 31, 1996, except for (A) assets which have been
disposed of to nonaffiliated third parties since December 31, 1996 in the
ordinary course of business, (B) Encumbrances reflected in the Balance Sheet or
in the notes thereto, (C) Encumbrances or imperfections of title which are not,
individually or in the aggregate, material in character, amount or extent and
which do not materially detract from the value or materially interfere with the
present or presently contemplated use of the assets subject thereto or affected
thereby, and (D) Encumbrances for current Taxes not yet due and payable. All of
the machinery, equipment and other tangible personal property and assets owned
or used by the Company and its Subsidiaries are in good condition and repair,
except for ordinary wear and tear not caused by neglect, and are useable in the
ordinary course of business. The personal property and assets reflected on the
Balance Sheet or acquired after December 31, 1996, the rights under the Company
Agreements and the Intellectual Property (as defined in Section 3.12) owned or
used by the Company under valid License (as defined in Section 3.12)
collectively include all assets necessary to provide, produce, sell and license
the services and products currently provided, produced, sold and licensed by the
Company and its Subsidiaries and to conduct the business of the Company and its
Subsidiaries as presently conducted or as currently contemplated to be
conducted.
Section 3.12 Intellectual Property.
---------------------
(a) Section 3.12(a) of the Company Disclosure Schedule
contains an accurate and complete listing setting forth (x) all registered
Trademarks, Patents and registered Copyrights (as each such term is hereinafter
defined) which are owned by the Company or any of its Subsidiaries and (y) all
Licenses to which the Company or any of its Subsidiaries is a party, such
schedule indicating, as to each such License, whether the Company or any of its
Subsidiaries is the licensee or licensor, whether it is royalty bearing, the
territory, whether it is exclusive or non-exclusive, and the nature of the
licensed property.
(b) Except as set forth in Section 3.12(b) of the Company
Disclosure Schedule, neither the Company nor any of its Subsidiaries is under
any obligation to pay any royalty or other compensation to any third party or to
obtain any approval or consent for the use of any Intellectual Property used in
or necessary for its business as currently conducted or as currently proposed to
be conducted. None of the Intellectual Property owned by the Company or by any
of its Subsidiaries, or to the Company's knowledge, licensed to the Company or
to any of its Subsidiaries, is subject to any outstanding judgment, order,
decree, stipulation, injunction or charge. Except as set forth in Section
3.12(b) of the Company Disclosure Schedule, there is no claim, charge,
complaint, action, suit, proceeding, hearing, investigation or demand pending
or, to the Company's knowledge, threatened, which challenges the legality,
validity, enforceability, or the Company's or any of its Subsidiaries' use or
ownership of any of the Intellectual Property owned by the Company
13
<PAGE>
or any of its Subsidiaries or, to the Company's knowledge, licensed to the
Company or to any of its Subsidiaries.
(c) No material breach or default (or event which with notice
or lapse of time or both would result in a material event of default) by the
Company or any of its Subsidiaries exists or has occurred under any License or
other agreement pursuant to which the Company or any of its Subsidiaries uses
any Intellectual Property owned by a third party or has granted any third party
the right to use its Intellectual Property, and the consummation of the
transactions contemplated by this agreement will not violate or conflict with or
constitute a material default (or an event which, with notice or lapse of time
or both, would constitute a material default), result in a forfeiture under, or
constitute a basis for termination of any such License or other agreement.
(d) The Company and its Subsidiaries own all items of
Intellectual Property set forth in Section 3.12(a) of the Company Disclosure
Schedule and own or have the right to use all items of Intellectual Property
necessary to provide, produce, sell and license the services and products
currently provided, produced, sold and licensed by the Company and its
Subsidiaries and to conduct the business of the Company and its Subsidiaries as
presently conducted or as currently proposed to be conducted, free and clear of
all Encumbrances.
(e) To the Company's knowledge, except as set forth in Section
3.12(e) of the Company Disclosure Schedule, the conduct of the Company's and its
Subsidiaries' business, the Intellectual Property owned or used by the Company
and its Subsidiaries, and the products or services produced, sold or licensed by
the Company and its Subsidiaries do not infringe any Intellectual Property
rights or any other proprietary right of any person. The Company and its
Subsidiaries have received no notice of any allegations or threats that the
Company's and its Subsidiaries' use of any of the Intellectual Property
infringes upon or is in conflict with any Intellectual Property or proprietary
rights of any third party.
(f) All of the Company's and its Subsidiaries' Patents,
Trademarks and Copyrights issued by, registered with or filed with the United
States Patent and Trademark Office or Register of Copyrights or the
corresponding offices of other countries have been so duly registered, filed in
or issued, as the case may be, have been properly maintained and renewed in
accordance with all applicable provisions of law and administrative regulations,
and the Company and its Subsidiaries, as the case may be, are the record owners
thereof.
(g) As used in this agreement, "Intellectual Property" means
all of the following: (i) U.S. and foreign registered and unregistered
trademarks, service marks, logos, trade names, corporate names and all
registrations and applications to register the same (the "Trademarks"); (ii)
issued U.S. and foreign patents and pending patent applications, patent
disclosures, and any and all divisions, continuations, continuations-in-part,
reissues, reexaminations, and extension thereof, any counterparts claiming
priority therefrom, utility models, patents of importation/confirmation,
certificates of invention and like statutory rights (the "Patents"); (iii) U.S.
and foreign registered and unregistered copyrights (including, but not limited
to, those in computer software and databases), rights of publicity and all
registrations and applications to register the same (the "Copyrights"); (iv) all
categories of trade secrets as defined in the Uniform Trade Secrets Act
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including, but not limited to, business information; and (v) all licenses and
agreements pursuant to which the Company has acquired rights in or to any
Trademarks, Patents or Copyrights, or licenses and agreements pursuant to which
the Company has licensed or transferred the right to use any of the foregoing
("Licenses").
Section 3.13 Employment Matters. Except as set forth in Section 3.13
------------------
of the Company Disclosure Schedule, to the Company's knowledge, (a) no key
employee or group of employees has any plans to terminate their employment with
the Company or any of its Subsidiaries as a result of the transactions
contemplated hereby or otherwise, (b) neither the Company nor any of its
Subsidiaries has experienced any strikes, collective labor grievances, other
collective bargaining disputes or claims of unfair labor practices in the last
five years, (c) there is no organizational effort presently being made or
threatened by or on behalf of any labor union with respect to employees of the
Company and its Subsidiaries, and (d) the Company and each Subsidiary is in
compliance with all laws relating to the employment or the workplace, including,
without limitation, provisions relating to wages, hours, collective bargaining,
safety and health, work authorization, equal employment opportunity, immigration
and the withholding of income taxes, unemployment compensation, worker's
compensation, employee privacy and right to know and social security
contributions, except where non-compliance would not, individually or in the
aggregate, have or be reasonably likely to have a Material Adverse Effect.
Section 3.14 Compliance with Laws. Except as set forth in Section
--------------------
3.14 to the Company Disclosure Schedule, the Company and its Subsidiaries are in
compliance with, and have not violated, any applicable law, rule or regulation
of any federal, state, local or foreign government or agency thereof, including,
but not limited to, the Fair Credit Reporting Act, except where non-compliance
would not, individually or in the aggregate, have or be reasonably likely to
have a Material Adverse Effect, and no notice, charge, claim, action or
assertion has been received by the Company or any of its Subsidiaries or has
been filed, commenced or, to the Company's knowledge, threatened against the
Company or any of its Subsidiaries alleging any such violation, except where
non-compliance would not, individually or in the aggregate, have or be
reasonably likely to have a Material Adverse Effect. Except as set forth in
Section 3.14 to the Company Disclosure Schedule, the Company and its
Subsidiaries hold all licenses, permits and approvals from all Governmental
Entities necessary for the Company and its Subsidiaries to own, lease and
operate their properties and to conduct their businesses, and all such licenses,
permits and approvals are in full force and effect except where the failure to
be in full force and effect would not, individually or in the aggregate, have or
be reasonably likely to have a Material Adverse Effect.
Section 3.15 Environmental Compliance.
------------------------
(a) Except as set forth on Section 3.15 to the Company
Disclosure Schedule and except for matters which, individually or in the
aggregate, would not have or be reasonably likely to have a Material Adverse
Effect, (i) the Company and each Subsidiary is in compliance with all applicable
Environmental Laws (as defined below); (ii) all permits and other governmental
authorizations currently held by the Company and each Subsidiary pursuant to the
Environmental Laws are in full force and effect, the Company and each Subsidiary
is in compliance with all of the terms of such permits and authorizations, and
no other permits or authorizations are
16
<PAGE>
required by the Company or any Subsidiary for the conduct of their respective
businesses; and (iii) the management, handling, storage, transportation,
treatment, and disposal by the Company and each Subsidiary of any Hazardous
Materials (as defined below) has been in compliance with all applicable
Environmental Laws. Neither the Company nor any Subsidiary has received any
written communication that alleges that the Company or any Subsidiary is not in
compliance in all material respects with all applicable Environmental Laws.
(b) Except as set forth on Section 3.15 to the Company
Disclosure Schedule, there is no material Environmental Claim (as defined below)
pending or, to the Company's knowledge, threatened against or involving the
Company or any of the Subsidiaries or against any person or entity whose
liability for any material Environmental Claim the Company or any of the
Subsidiaries has or may have retained or assumed either contractually or by
operation of law.
(c) Except as set forth on Section 3.15 to the Company
Disclosure Schedule and except for matters which, individually or in the
aggregate, would not have or be reasonably likely to have a Material Adverse
Effect, to the Company's knowledge, there are no past or present actions or
activities by the Company or any Subsidiary including the storage, treatment,
release, emission, discharge, disposal or arrangement for disposal of any
Hazardous Materials, that could reasonably form the basis of any Environmental
Claim against the Company or any of the Subsidiaries or against any person or
entity whose liability for any Environmental Claim the Company or any Subsidiary
may have retained or assumed either contractually or by operation of law.
(d) As used in this agreement, these terms shall have the
following meanings:
(i) "Environmental Claim" means any and all
-------------------
administrative, regulatory or judicial actions, suits, demands, demand letters,
directives, claims, liens, investigations, proceedings or notices of
noncompliance or violation (written or oral) by any person or governmental
authority alleging potential liability arising out of, based on or resulting
from the presence, or release or threatened release into the environment, of any
Hazardous Materials at any location owned or leased by the Company or any
Subsidiary or other circumstances forming the basis of any violation or alleged
violation of any Environmental Law.
(ii) "Environmental Laws" means all applicable
------------------
foreign, federal, state and local laws (including the common law), rules,
requirements and regulations relating to pollution, the environment (including,
without limitation, ambient air, surface water, ground water, land surface or
subsurface strata) or protection of human health as it relates to the
environment including, without limitation, laws and regulations relating to
releases of Hazardous Materials, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of Hazardous Materials or relating to management of asbestos in
buildings.
(iii) "Hazardous Materials" means wastes, substances
-------------------
or materials (whether solids, liquids or gases) that are deemed hazardous,
toxic, pollutants or contaminants, including, without limitation, substances
defined as "hazardous substances", "toxic substances",
16
<PAGE>
"radioactive materials", or other similar designations in, or otherwise subject
to regulation under, any Environmental Laws.
Section 3.16 Contracts. Section 3.16 to the Company's Disclosure
---------
Schedule sets forth a complete and correct list, as of the date of this
agreement, of all agreements of the following types to which the Company or a
Subsidiary is a party or may be bound (collectively, the "Material Contracts"):
(i) agreements filed as an exhibit to the Company SEC Documents and each
agreement that would have been required to be filed as an exhibit to the Company
SEC Documents had such agreement been entered into as of the date of filing any
such Company SEC Documents; (ii) employment, severance, termination, consulting
and retirement agreements; (iii) loan agreements, indentures, letters of credit,
mortgages, notes and other debt instruments evidencing indebtedness in excess of
$150,000; (iv) agreements that require aggregate future payments to or by the
Company or any Company Subsidiary of more than $150,000 (other than purchase
orders and other transactions entered into in the ordinary course of business
consistent with past practice with a term not exceeding, or cancellable by the
Company within, one year); (v) agreements containing any "change of control"
provisions which, if triggered, would involve payments by the Company or any
Subsidiary in excess of $150,000 or other material rights or obligations; (vi)
material agreements with any key employee, director, officer, or person known to
the Company to be a direct or indirect stockholder of the Company; (vii)
agreements prohibiting the Company or any Subsidiary from engaging or competing
in any line of business or limiting such competition; (viii) any joint venture,
partnership and similar agreements involving a sharing of profits; (ix)
acquisition or divestiture agreements relating to (A) the sale of assets or
stock of the Company or any Subsidiary or (B) the purchase of assets or stock of
any other person, specifying any earn-out or other payments required to be made
after the date hereof; (x) brokerage, finder's or financial advisory agreements;
and (xi) guarantees of indebtedness for borrowed money of any person (other than
a wholly-owned Subsidiary). Each Company Agreement is legally valid and binding
and in full force and effect, and there are no defaults by the Company or any of
its Subsidiaries thereunder, except those defaults that, individually or in the
aggregate, would not have or be reasonably likely to have a Material Adverse
Effect. The Company has previously made available for inspection by Parent or
the Sub or their representatives all of the Company Agreements.
Section 3.17 Vote Required. The affirmative vote of the holders of a
-------------
majority of the outstanding shares of Common Stock are the only votes of the
holders of any class or series of the Company's capital stock necessary to
approve the Merger or to amend the Company's certificate of incorporation.
Section 3.18 Brokers. Except for Prudential Securities Incorporated,
-------
no broker, finder or investment banker is entitled to any brokerage, finder's or
other fee or commission in connection with the transactions contemplated by this
agreement based upon arrangements made by or on behalf of the Company.
Section 3.19 Opinion of Financial Advisor. The Company has received
-----------------------------
the opinion of the Financial Advisor, dated the date of this agreement, to the
effect that, as of this date the cash consideration to be received by the
holders of the Common Stock in the Offer is fair from a financial point of view
to such holders. The Company has been authorized by the Financial Advisor to
17
<PAGE>
include the Fairness Opinion in the Offer Documents and such opinion has not
been withdrawn or modified. A signed copy of the Fairness Opinion has been
delivered to Parent.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF PARENT AND THE SUB
---------------------
Parent and the Sub represent and warrant to the Company that the
statements contained in this Article IV are true and correct as of the date of
this agreement.
Section 4.1 Organization. Parent is a limited partnership duly
------------
organized and validly existing under the laws of Delaware and the Sub is a
corporation duly organized, validly existing and in good standing under the laws
of Delaware. Each of Parent and the Sub has all requisite corporate, partnership
or other power and authority and all necessary government approvals to own,
lease and operate its properties and to carry on its business as now being
conducted.
Section 4.2 Authorization; Validity of Agreement; Necessary Action.
------------------------------------------------------
Each of Parent and the Sub has full partnership or corporate power and
authority to execute and deliver this agreement and to consummate the
transactions contemplated hereby. The execution, delivery and performance by
Parent and the Sub of this agreement, and the consummation of the Merger and of
the transactions contemplated hereby have been duly authorized by the general
partner of Parent and the Board of Directors of the Sub and by Parent as the
sole stockholder of the Sub and no other partnership or corporate action on the
part of Parent or the Sub is necessary to authorize the execution and delivery
by Parent and the Sub of this agreement and the consummation of the transactions
contemplated hereby. This agreement has been duly executed and delivered by
Parent and the Sub, as the case may be, and, assuming due and valid
authorization, execution and delivery hereof by the Company, is a valid and
binding obligation of each of Parent and the Sub, as the case may be,
enforceable against each of them in accordance with its respective terms.
Section 4.3 Consents and Approvals; No Violations. Except as set
-------------------------------------
forth in Section 4.3 of the schedule attached to this agreement setting forth
exceptions to Parent's representations and warranties set forth herein and
except for filings, permits, authorizations, consents and approvals as may be
required under, and other applicable requirements of, the Exchange Act, the HSR
Act, state securities or blue sky laws and the DGCL, none of the execution,
delivery or performance of this agreement by Parent or the Sub, the consummation
by Parent or the Sub of the transactions contemplated hereby or compliance by
Parent or the Sub with any of the provisions hereof will (i) conflict with or
result in any breach of any provision of the partnership agreement of the Parent
or the certificate of incorporation or by-laws of the Sub, (ii) require any
filing with, or permit, authorization, consent or approval of, any Governmental
Entity, (iii) result in a violation or breach of, or constitute (with or without
due notice or lapse of time or both) a default (or give rise to any right of
termination, cancellation or acceleration) under, any of the terms, conditions
or provisions of any note, bond, mortgage, indenture, lease, license, contract,
agreement or other instrument or obligation to which Parent or the Sub is a
party or by which either of them or
18
<PAGE>
any of their respective properties or assets may be bound, or (iv) violate any
order, writ, injunction, decree, statute, rule or regulation applicable to
Parent or the Sub or any of their properties or assets.
Section 4.4 Company Shares. Neither Parent nor any of its
--------------
Subsidiaries owns any Shares or is acting together with any other person (other
than Fir Tree) in connection with the Offer.
Section 4.5 Brokers. Except for Veronis, Suhler and Associates,
-------
Inc., no broker, finder or investment banker is entitled to any brokerage,
finder's or other fee or commission in connection with the transactions
contemplated by this agreement based upon arrangements made by or on behalf of
Parent or the Sub.
Section 4.6 Financing Commitments. Parent has received, and has
---------------------
delivered to the Company true and complete copies of, commitments from lenders
(the "Commitment Letter") to provide not less than $100,000,000 of debt
financing (the "Debt Financing") required to consummate the Offer and the other
transactions contemplated by this agreement, and the limited partners of Parent
are obligated pursuant to the limited partnership agreement of Parent to
contribute to Parent the equity, which together with the Debt Financing, is
required to consummate the Stock Purchase and the other transactions
contemplated by this agreement.
Section 4.7 Fir Tree Agreement. Parent has delivered to the Company
------------------
a true and complete copy of the Fir Tree Agreement.
ARTICLE V
COVENANTS
---------
Section 5.1 Interim Operations of the Company. The Company covenants
---------------------------------
and agrees that, except (i) as expressly contemplated by this agreement, (ii) as
set forth in Section 5.1 of the Company Disclosure Schedule, or (iii) as agreed
in writing by Parent, after the date hereof, and prior to the consummation of
the Offer:
(a) the business of the Company and its Subsidiaries shall be
conducted only in the ordinary and usual course and, to the extent consistent
therewith, each of the Company and its Subsidiaries shall use reasonable efforts
to preserve its business organization intact and maintain its existing relations
with customers, suppliers, employees, creditors and business partners;
(b) the Company shall not, directly or indirectly, (i) sell,
transfer or pledge or agree to sell, transfer or pledge any treasury stock of
the Company or any capital stock of any of its Subsidiaries beneficially owned
by it; (ii) amend its certificate of incorporation or by-laws or similar
organizational documents; or (iii) split, combine or reclassify the outstanding
Shares or any outstanding capital stock of any of the Subsidiaries of the
Company;
(c) neither the Company nor any of its Subsidiaries shall: (i)
declare, set aside or pay any dividend or other distribution payable in cash,
stock or property with respect to its capital stock (except dividends from a
wholly-owned Subsidiary to the Company); (ii) issue, sell,
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<PAGE>
pledge, dispose of or encumber any additional shares of, or securities
convertible into or exchangeable for, or options, warrants, calls, commitments
or rights of any kind to acquire, any shares of capital stock of any class of
the Company or its Subsidiaries, other than shares reserved for issuance on the
date hereof pursuant to the exercise of Company Options outstanding on the date
hereof; (iii) transfer, lease, license, sell, mortgage, pledge, dispose of, or
encumber any material assets other than in the ordinary and usual course of
business and consistent with past practice, or incur or modify any material
indebtedness or other liability, other than in the ordinary and usual course of
business and consistent with past practice; or (iv) redeem, purchase or
otherwise acquire directly or indirectly any of its capital stock;
(d) neither the Company nor any of its Subsidiaries shall: (i)
grant any increase in the compensation payable or to become payable by the
Company or any of its Subsidiaries to any of its executive officers or key
employees; or (ii)(A) adopt any new, or (B) amend or otherwise increase, or
accelerate the payment or vesting of the amounts payable or to become payable
under any existing, bonus, incentive compensation, deferred compensation,
severance, profit sharing, stock option, stock purchase, insurance, pension,
retirement or other employee benefit plan, agreement or arrangement, including,
without limitation, the Option Plan; or (iii) enter into any employment or
severance agreement with or, except in accordance with the existing written
policies of the Company, grant any severance or termination pay to any officer,
director or employee of the Company or any its Subsidiaries;
(e) neither the Company nor any of its Subsidiaries shall
modify, amend or terminate any of its material contracts or waive, release or
assign any material rights or claims, except in the ordinary course of business
and consistent with past practice;
(f) neither the Company nor any of its Subsidiaries shall
permit any material insurance policy naming it as a beneficiary or a loss
payable payee to be cancelled or terminated without notice to Parent, except in
the ordinary course of business and consistent with past practice;
(g) neither the Company nor any of its Subsidiaries shall: (i)
incur or assume any long-term debt, or except in the ordinary course of
business, incur or assume any short-term indebtedness, any such short-term
indebtedness to be in amounts consistent with past practice; (ii) assume,
guarantee, endorse or otherwise become liable or responsible (whether directly,
contingently or otherwise) for the obligations of any other person, except in
the ordinary course of business and consistent with past practice; (iii) make
any loans, advances or capital contributions to, or investments in, any other
person (other than (1) to wholly owned Subsidiaries of the Company, (2) pursuant
to existing commitments which are listed in Section 3.16 of the Company
Disclosure Schedule, or (3) in the ordinary course of business consistent with
past practice); or (iv) enter into any commitment or transaction (including, but
not limited to, any capital expenditure or purchase or lease of assets or real
estate) involving more than $150,000 for any one expenditure, commitment or
transaction (other than pursuant to existing commitments listed in Section 3.16
of the Company Disclosure Schedule).
20
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(h) neither the Company nor any of its Subsidiaries shall
change any of the accounting methods used by it unless required by GAAP;
(i) neither the Company nor any of its Subsidiaries shall pay,
discharge or satisfy any claims, liabilities or obligations (absolute, accrued,
asserted or unasserted, contingent or otherwise), other than the payment,
discharge or satisfaction in the ordinary course of business and consistent with
past practice, of claims, liabilities or obligations reflected or reserved
against in, or contemplated by, the consolidated financial statements (or the
notes thereto) of the Company and its consolidated Subsidiaries;
(j) neither the Company nor any of its Subsidiaries shall
adopt a plan of complete or partial liquidation, dissolution, merger,
consolidation, restructuring, recapitalization or other reorganization of the
Company or any of its Subsidiaries (other than the Merger);
(k) neither the Company nor any of its Subsidiaries shall
take, or agree to commit to take, any action that would or is reasonably likely
to result in any of the conditions to the Offer set forth in Annex A or any of
the conditions to the Stock Purchase set forth in Article VI not being
satisfied, or would make any representation or warranty of the Company contained
herein inaccurate in any respect at, or as of any time prior to, the Offer
Closing Date, or that would materially impair the ability of the Company to
consummate the Offer or the Stock Purchase in accordance with the terms hereof
or materially delay such consummation; and
(l) neither the Company nor any of its Subsidiaries shall
enter into an agreement, contract, commitment or arrangement to do any of the
foregoing, or to authorize, recommend, propose or announce an intention to do
any of the foregoing.
Section 5.2 Access; Confidentiality. Upon reasonable notice, the
-----------------------
Company shall (and shall cause each of its Subsidiaries to) afford to the
officers, employees, accountants, counsel, financing sources and other
representatives of Parent, access, during normal business hours (at such times
and in such manner so as not to interfere with the normal business operations of
the Company and its Subsidiaries), during the period prior to the consummation
of the Offer, to all its properties, books, contracts, commitments and records
and, during such period, the Company shall (and shall cause each of its
Subsidiaries to) furnish promptly to the Parent (a) a copy of each report,
schedule, registration statement and other document filed or received by it
during such period pursuant to the requirements of federal securities laws and
(b) all other information concerning its business, properties and personnel as
Parent may reasonably request. Unless otherwise required by law, Parent will
hold any such information which is nonpublic in confidence in accordance with
the provisions of a letter agreement dated January 9, 1997, and supplemented by
letter agreement dated April 4/8, 1997, between the Company and Veronis, Suhler
& Associates, Inc. (the "Confidentiality Agreement").
Section 5.3 Consents and Approvals.
----------------------
(a) Each of the Company, Parent and the Sub shall take all
reasonable actions necessary to comply promptly with all legal requirements
which may be imposed on it with
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<PAGE>
respect to this agreement and the transactions contemplated hereby (which
requirements shall include, without limitation, those identified in Section
5.3(a) of the Company Disclosure Schedule, and which actions shall include,
without limitation, furnishing all information required under the HSR Act and in
connection with approvals of or filings with any other Governmental Entity) and
shall promptly cooperate with and furnish information to each other in
connection with any such requirements imposed upon any of them or any of their
Subsidiaries in connection with this agreement and the transactions contemplated
hereby. Each of the Company, Parent and the Sub shall, and shall cause its
Subsidiaries to, take all reasonable actions necessary to obtain (and shall
cooperate with each other in obtaining) any consent, authorization, order or
approval of, or any exemption by, any Governmental Entity or other public or
private third party required to be obtained or made by Parent, the Sub, the
Company or any of its Subsidiaries in connection with the Offer or the Stock
Purchase, or the taking of any action contemplated thereby or by this agreement.
(b) The Company and Parent shall take all reasonable actions
necessary to file as soon as practicable notifications under the HSR Act and to
respond as promptly as practicable to any inquiries received from the Federal
Trade Commission and the Antitrust Division of the Department of Justice for
additional information or documentation and to respond as promptly as
practicable to all inquiries and requests received from any State Attorney
General or other Governmental Entity in connection with antitrust matters.
Section 5.4 No Solicitation.
---------------
(a) Neither the Company nor any of its Subsidiaries shall (and
the Company shall use its best efforts to cause its officers, directors,
employees, representatives and agents, including, but not limited to, investment
bankers, attorneys and accountants, not to), directly or indirectly, encourage,
solicit, participate in or initiate discussions or negotiations with, or provide
any information to, any corporation, partnership, person or other entity or
group (other than Parent, any of its affiliates or representatives) concerning
any proposal or offer to acquire all or a substantial part of the business and
properties of the Company or any of its Subsidiaries or any capital stock of the
Company or any of its Subsidiaries, whether by merger, tender offer, exchange
offer, sale of assets or similar transactions involving the Company or any
Subsidiary, or any division or operating or principal business unit of the
Company (an "Acquisition Proposal"), except that nothing contained in this
Section 5.4 or any other provision hereof shall prohibit the Company or the
Company's Board of Directors from (i) taking and disclosing to the Company's
stockholders a position with respect to a tender or exchange offer by a third
party pursuant to Rules 14d-9 and 14e-2 promulgated under the Exchange Act, or
(ii) making such disclosure to the Company's stockholders as, in the good faith
judgment of the Board, after receiving written advice from independent counsel,
is required under applicable law, provided that the Company may not, except as
permitted by Section 5.4(b), withdraw or modify, or propose to withdraw or
modify, its position with respect to the Offer or approve or recommend, or
propose to approve or recommend, any Acquisition Proposal, or enter into any
agreement with respect to any Acquisition Proposal. The Company shall
immediately cease any existing activities, discussions or negotiations with any
parties conducted heretofore with respect to any of the foregoing.
Notwithstanding the foregoing, (a) the Company may furnish information
concerning its business, properties or assets to any corporation, partnership,
person or other entity or group pursuant to appropriate confidentiality
agreements if in the opinion of the Board of
22
<PAGE>
Directors, only after receipt of written advice from independent legal counsel
to the Company, the failure to provide such information would cause the Board of
Directors to violate its fiduciary duties to the Company's stockholders under
applicable law, and (b) the Company may negotiate and participate in discussions
and negotiations with such entity or group concerning an Acquisition Proposal if
(x) such entity or group has on an unsolicited basis submitted a bona fide
written proposal to the Board of Directors of the Company relating to any such
transaction (which proposal may be conditioned on due diligence and financing)
which the Board of Directors determines in good faith, based on advice of its
financial advisors, represents a superior transaction to the Offer and is
reasonably capable of being consummated, and (y) in the opinion of the Board of
Directors of the Company, only after receipt of written advice from independent
legal counsel to the Company, the failure to engage in such discussions or
negotiations would cause the Board of Directors to violate its fiduciary duties
to the Company's stockholders under applicable law (an Acquisition Proposal
which satisfies clauses (x) and (y) being referred to herein as a "Superior
Proposal"). The Company shall immediately notify Parent of the existence of any
proposal or inquiry received by the Company and the identity of the party making
such proposal or inquiry which it may receive in respect of any such
transaction.
(b) Except as set forth herein, neither the Board of Directors
of the Company nor any committee thereof shall (i) withdraw or modify, or
propose to withdraw or modify, in a manner adverse to Parent or the Sub, the
approval or recommendation by the Board of Directors or any such committee of
the Offer, the Stock Purchase or this agreement, (ii) approve or recommend, or
propose to approve or recommend, any Acquisition Proposal or (iii) enter into
any agreement with respect to any Acquisition Proposal. Notwithstanding the
foregoing, prior to the time of acceptance for payment of shares in the Offer,
the Board of Directors of the Company may (subject to the terms of this and the
following sentence) withdraw or modify its approval or recommendation of the
Offer, the Stock Purchase or this agreement, approve or recommend a Superior
Proposal, or enter into an agreement with respect to a Superior Proposal, in
each case at any time after the second business day following Parent's receipt
of written notice advising Parent that the Board of Directors has received a
Superior Proposal, specifying the material terms and conditions of such Superior
Proposal and identifying the person making such Superior Proposal; provided that
the Company shall not enter into an agreement with respect to a Superior
Proposal unless the Company shall have furnished Parent with written notice not
later than 12:00 noon one day in advance of any date that it intends to enter
into such agreement and shall have caused its financial and legal advisors to
negotiate with Parent to make such adjustments in the terms and conditions of
this agreement as would enable the Company to proceed with the transactions
contemplated herein on such adjusted terms. In addition, if the Company proposes
to enter into an agreement with respect to any Acquisition Proposal, it shall
concurrently with entering into such agreement pay, or cause to be paid, to
Parent the Termination Fee (as defined in Section 8.1(b)).
Section 5.5 Additional Agreements. Subject to the terms and
---------------------
conditions herein provided, each of the parties hereto shall use all reasonable
efforts to take, or cause to be taken, all action and to do, or cause to be
done, all things necessary, proper or advisable under applicable laws and
regulations, or to remove any injunctions or other impediments or delays, legal
or otherwise, to achieve the satisfaction of the Minimum Condition and all
conditions set forth in Annex A and Article VI and to consummate and make
effective the Stock Purchase and the other transactions
23
<PAGE>
contemplated by this agreement. Without limitation of the foregoing, Parent, the
Sub and the Company shall take such steps and provide and comply with such
undertakings as may be required by any Governmental Entity whose approval or
consent, or with respect to which a waiting period must expire, to satisfy the
conditions set forth in Annex A; provided that such steps and undertakings shall
not impose upon the Company or Parent and the Sub any terms or conditions which
Parent determines reasonably and in good faith to be unreasonably burdensome to
Parent or the Sub or to the operations of the Company on a going-forward basis.
In case at any time after the Offer Closing Date any further action is necessary
or desirable to carry out the purposes of this agreement, the proper officers
and directors of the Company, Parent and the Sub shall use all reasonable
efforts to take, or cause to be taken, all such necessary actions.
Section 5.6 Publicity. The initial press release with respect to the
---------
execution of this agreement shall be a joint press release acceptable to Parent
and the Company. Thereafter, so long as this agreement is in effect, neither
the Company, Parent nor any of their respective affiliates shall issue or cause
the publication of any press release or other announcement with respect to the
Offer, the Stock Purchase, the Merger or the Stock Split, this agreement or the
other transactions contemplated hereby without the prior consultation of the
other party, except as may be required by law or by any listing agreement with a
national securities exchange or trading market.
Section 5.7 Notification of Certain Matters. The Company shall give
-------------------------------
prompt notice to Parent, and Parent shall give prompt notice to the Company, of
(i) the occurrence or non-occurrence of any event the occurrence or non-
occurrence of which would cause any representation or warranty contained in this
agreement to be untrue or inaccurate in any material respect at or prior to the
Offer Closing Date and (ii) any material failure of the Company, Parent or the
Sub, as the case may be, to comply with or satisfy any covenant, condition or
agreement to be complied with or satisfied by it hereunder; provided, however,
that the delivery of any notice pursuant to this Section 5.7 shall not limit or
otherwise affect the remedies available hereunder to the party receiving such
notice.
Section 5.8 Directors' and Officers' Insurance and Indemnification.
------------------------------------------------------
(a) For five years after the Offer Closing Date, Parent shall,
and shall cause the Surviving Corporation (or any successor to the Surviving
Corporation) to, (i) retain all provisions of the Company's certificate of
incorporation as now in effect respecting the limitation of liabilities of
directors and officers, and (ii) indemnify, defend and hold harmless the present
and former officers and directors of the Company and its Subsidiaries, and
persons who become any of the foregoing prior to the Offer Closing Date (each an
"Indemnified Party") against all losses, claims, damages, liabilities, costs,
fees and expenses (including reasonable fees and disbursements of counsel and
judgments, fines, losses, claims, liabilities and amounts paid in settlement
(provided that any such settlement is effected with the written consent of the
Parent or the Surviving Corporation)) arising out of actions or omissions
occurring at or prior to the Offer Closing Date to the full extent permitted
under Delaware law, subject to the terms of the Company's certificate of
incorporation or by-laws, as in effect at the date hereof; provided that, in the
event any claim or claims are asserted or made within such five year period, all
rights to indemnification in respect of any such claim or claims shall continue
until disposition of any and all such claims; provided, further, that any
24
<PAGE>
determination required to be made with respect to whether an Indemnified Party's
conduct complies with the standards set forth under Delaware law, the
certificate of incorporation or the by-laws, as the case may be, shall be made
by independent counsel mutually acceptable to Parent and the Indemnified Party;
and provided, further, that nothing herein shall impair any rights or
obligations of any present or former directors or officers of the Company. In
the event the Surviving Corporation or any of its successors or assigns
consolidates with or merges into any other person or entity and shall not be the
continuing or surviving corporation or entity of such consolidation or merger or
transfers or conveys all or substantially all of its properties and assets to
any person or entity, then, and in each such case, proper provision shall be
made so that the successors and assigns of the Surviving Corporation assume the
obligations set forth in this Section 5.8.
(b) Parent or the Surviving Corporation shall maintain the
Company's existing officers' and directors' liability insurance ("D&O
Insurance") for a period of not less than three years after the Offer Closing
Date; provided, that the Parent may substitute therefor policies of
substantially equivalent coverage and amounts containing terms no less favorable
to such former directors or officers; provided, further, if the existing D&O
Insurance expires, is terminated or cancelled during such period, Parent or the
Surviving Corporation shall use all reasonable efforts to obtain substantially
similar D&O Insurance; provided, further, however, that in no event shall the
Company be required to pay aggregate premiums for insurance under this Section
in excess of 110% of the aggregate premiums paid by the Company in 1996 on an
annualized basis for such purpose (the "1996 Premium"); and provided, further,
that if the Parent or the Surviving Corporation is unable to obtain the amount
of insurance required by this Section 5.8(b) for such aggregate premium, Parent
or the Surviving Corporation shall obtain as much insurance as can be obtained
for an annual premium of 110% of the 1996 Premium.
Section 5.9 Actions Respecting Commitment Letters. Parent and Sub
-------------------------------------
shall use reasonable efforts to negotiate on behalf of the Company and deliver
definitive documentation in connection with the financing described in the
Commitment Letter, and the Company shall cooperate in all reasonable respects in
connection therewith, including without limitation executing and delivering any
commitment letters, underwriting or placement agreements, pledge and security
documents, other definitive financing documents, or other requested certificates
or documents, including a certificate of the chief financial officer of the
Company with respect to solvency matters, as may be requested by Parent or Sub.
In conjunction with the obtaining of any such financing, the Company shall, at
the request of Parent, call for prepayment or redemption, or prepay, redeem
and/or renegotiate, as the case may be, any then existing indebtedness of the
Company; provided that any such prepayment or redemption shall actually be made
contemporaneously with the Offer Closing. The Company shall perform, and shall
cause the Subsidiaries to perform, all obligations required to be performed by
them in accordance with and pursuant to the Commitment Letter and not to amend
or terminate the Commitment Letter without the consent of Parent.
Section 5.10 Recapitalization. The Company shall cooperate with any
-----------------
reasonable requests of Parent or the SEC related to the recording of the
transactions contemplated hereby as a recapitalization for financial reporting
purposes including, without limitation, to assist Parent and its affiliates with
any presentation to the SEC with regard to such recording and to include
appropriate disclosure with regard to such recording in all filings with the SEC
and all mailings to
25
<PAGE>
stockholders made in connection with the Offer. In furtherance of the foregoing,
the Company shall provide to Parent for the prior review of Parent's advisors
any description of the transaction contemplated by this agreement which is meant
to be disseminated.
ARTICLE VI
CONDITIONS
----------
Section 6.1 Conditions to Each Party's Obligation to Effect the Stock
---------------------------------------------------------
Purchase. The respective obligation of each party to effect the Stock Purchase
- --------
shall be subject to the satisfaction on or prior to the Offer Closing Date of
each of the following conditions:
(a) Consummation of Offer. The conditions to the Offer set
---------------------
forth in Annex A shall have been satisfied (or expect with respect to paragraphs
(a) and (b) of Annex A waived by Parent or Sub) and the Offer shall be
consummated in accordance with its terms;
(b) Statutes; Consents. No law, statute, rule, order,
------------------
decree or regulation shall have been enacted or promulgated by any Governmental
Entity of competent jurisdiction which declares this agreement invalid or
unenforceable in any material respect or which prohibits consummation of the
Offer or the Stock Purchase and all governmental consents, orders and approvals
(including, without limitation, those identified in Section 5.3(a) of the
Company Disclosure Schedule) required for the consummation of the Offer and the
Stock Purchase and the other transactions contemplated hereby shall have been
obtained and shall be in effect on the Offer Closing Date; and
(c) HSR Approval. The applicable waiting period under the HSR
------------
Act shall have expired or been terminated.
Section 6.2 Conditions to Parent's and the Sub's Obligations to
---------------------------------------------------
Effect the Stock Purchase. The obligations of Parent and the Sub to consummate
- -------------------------
the Stock Purchase are further subject to the fulfillment of the following
conditions, any and all of which may be waived in whole or in part by Parent and
the Sub:
(a) Representations and Warranties. All of the
------------------------------
representations and warranties of the Company set forth in this agreement that
are qualified as to materiality shall be true and correct without such
qualification and any such representations and warranties that are not so
qualified shall be true and correct (in all respects, in each case (i) as of the
date referred to in any representation or warranty which addresses matters as of
a particular date, or (ii) as to all other representations and warranties, as of
the date of this agreement and as of the Offer Closing Date), except to the
extent that all failures to be true and correct in the aggregate would not have
or be reasonably likely to have a Material Adverse Effect;
(b) Covenants. The Company shall have performed in all
---------
material respects all material obligations of the Company and complied in all
material respects with all
26
<PAGE>
material agreements or covenants of the Company to be performed or complied with
by it under this agreement;
(c) Opinion. Parent shall have received an opinion of Conner
-------
& Winters, A Professional Corporation, counsel to the Company, in form and
substance reasonably satisfactory to the Parent and its counsel;
(d) Options. All actions contemplated by Section 1.5 hereof
-------
shall have been taken;
(e) Material Adverse Change. There shall not have occurred
-----------------------
any changes (or any developments that, insofar as reasonably can be foreseen,
are reasonably likely to result in any changes) in the financial condition,
business, results of operations or prospects of the Company and its Subsidiaries
that, individually or in the aggregate, would have or be reasonably likely to
have a Material Adverse Effect;
(f) Consents. All consents under the Company Agreements
--------
listed on Schedule 6.2(f) shall have been obtained, without any terms or
conditions that Parent determines in good faith to be unreasonably burdensome to
Parent or the Sub or the operations of the Company on a going forward basis, and
shall be in effect at the on the Offer Closing Date; and
(g) Termination of Credit Facility. The Company shall have
------------------------------
terminated the Credit facility maintained pursuant to the terms of a Credit
Agreement dated June 30, 1996 between the Company and BancFirst.
Section 6.3 Conditions to Company's Obligations to Effect the Stock
-------------------------------------------------------
Purchase. The obligations of the Company to consummate the Stock Purchase are
- --------
further subject to the fulfillment of the following conditions, any or all of
which may be waived in whole or in part by the Company:
(a) Representations. All of the representations and
---------------
warranties of the Parent and the Sub set forth in this agreement that are
qualified as to materiality shall be true and correct and any such
representations and warranties that are not so qualified shall be true and
correct in all material respects, in each case (i) as of the date referred to in
any representation or warranty which addresses matters as of a particular date,
or (ii) as to all other representations and warranties, as of the date of this
agreement and as of the Offer Closing Date;
(b) Covenants. Parent and the Sub shall have performed in all
---------
material respects all material obligations and complied in all material
respects with all material agreements or covenants of the Company to be
performed or complied with by it under this agreement; and
(c) Opinion. The Company shall have received an opinion of
-------
Proskauer Rose LLP, counsel to Parent and the Sub, in form and substance
reasonably satisfactory to the Company and its counsel.
27
<PAGE>
Section 6.4 Consulting Agreements. On the Offer Closing Date, the
---------------------
Company shall enter into (1) a Consulting Agreement in the form of Exhibit
6.4(a) with Howard G. Barnett, Jr., Chairman, President and Chief Executive
Officer of the Company, for a period of one year after Offer Closing Date at a
rate equal to his current base salary, (2) a Consulting Agreement in the form of
Exhibit 6.4(b) with Robert E. Craine, Jr., Executive Vice President of the
Company, for a period of 90 days after the Offer Closing Date at a rate equal to
his current base salary, and (3) a Consulting Agreement in the form of Exhibit
6.4(c) with J. Gary Mourton, Senior Vice President-Finance of the Company, for a
period of one year after the Offer Closing Date, the first six months at a rate
equal to his current base salary and the second six months at a rate equal to
one-half of his current base salary.
ARTICLE VII
TERMINATION
-----------
Section 7.1 Termination. This agreement may be terminated and the
-----------
transactions contemplated herein may be abandoned at any time prior to the Offer
Closing Date:
(a) By the mutual written consent of Parent and the Company.
(b) By either the Company or Parent:
(i) if any Governmental Entity shall have issued an
order, decree or ruling or taken any other action (which order, decree,
ruling or other action the parties hereto shall use reasonable efforts to
lift), which permanently restrains, enjoins or otherwise prohibits (x) the
acceptance for payment of, or payment for, shares pursuant to the Offer or
the Merger or the Stock Split or (y) the Stock Purchase, the Merger or the
Stock Split and such order, decree, ruling or other action shall have
become final and non-appealable;
(ii) if the Minimum Condition is not satisfied; or
(iii) if the Offer shall not have been consummated
before October 31, 1997; provided, however, this Section 7(b)(iii) shall
not be available to any party whose failure to fulfill any obligation under
this agreement has been the cause of, or resulted in, the failure to
consummate the Offer before that date.
(c) By the Company:
(i) in connection with entering into a definitive
agreement in accordance with Section 5.4(b), provided it has complied with
all provisions thereof, including the notice provisions therein, and that
it makes simultaneous payment of the Termination Fee;
28
<PAGE>
(ii) if Parent or the Sub shall have breached in any
material respect any of their respective representations, warranties,
covenants or other agreements contained in this agreement, which breach
cannot be or has not been cured within 30 days after the giving of written
notice to Parent or the Sub, as applicable.
(d) By Parent:
(i) if, due to an occurrence, not involving a
breach by Parent or the Sub of their obligations hereunder, which makes it
impossible to satisfy any of the conditions set forth in Annex A, the
Company shall have failed to commence the Offer on or prior to 15 business
days following the date of the initial public announcement of the Offer or
shall terminate the Offer;
(ii) if the Company shall have breached in any
material respect any of its representations, warranties, covenants or other
agreements contained in this agreement, which breach cannot be or has not
been cured within 30 days after the giving of written notice to the
Company; or
(iii) if the Company is entitled to terminate the
Offer as a result of the occurrence of any event set forth in paragraph (e)
of Annex A.
Section 7.2 Effect of Termination. In the event of the termination
---------------------
of this agreement pursuant to its terms, written notice thereof shall forthwith
be given to the other party or parties specifying the provision hereof pursuant
to which such termination is made, and this agreement shall forthwith become
null and void, and there shall be no liability on the part of the Parent or the
Company except (A) for fraud or for breach of this agreement prior to such
termination and (B) as set forth in Section 8.1.
ARTICLE VIII
MISCELLANEOUS
-------------
Section 8.1 Fees and Expenses.
-----------------
(a) Except as contemplated by this agreement, including
Section 8.1(b) hereof, all costs and expenses incurred in connection with this
agreement and the consummation of the transactions contemplated hereby shall be
paid by the party incurring such expenses.
(b) If (x) the Company shall terminate this agreement pursuant
to Section 7.1(c)(i), (y) the Parent shall terminate this agreement pursuant to
Section 7.1(d)(iii) hereof, or (z) the Company or Parent shall terminate this
agreement pursuant to Section 7.1(b)(ii) and (1) prior to the termination of
this agreement, an Acquisition Proposal at a price and on terms at least as
favorable to the stockholders of the Company as the Offer shall have been made,
and (2) within one year of such termination the Company consummates such
Acquisition Proposal or within six
29
<PAGE>
months of such termination the Company enters into an agreement for a different
Acquisition Proposal which is consummated within one year of such termination,
in either case at a price and on terms at least as favorable to the stockholders
of the Company as the Offer, then the Company shall pay to Parent (concurrently
with such termination, in the case of clauses (x) or (y) above, and not later
than the consummation of such Acquisition Proposal, in the case of clause (z)
above) an amount equal to $5,000,000 (the "Termination Fee") plus an amount
equal to $1,000,000 to reimburse Parent for its costs and expenses in connection
with the Offer, the Merger and this agreement (the "Expense Reimbursement");
provided that no Termination Fee or Expense Reimbursement shall be payable if
the Sub or Parent was in material breach of its representations, warranties or
obligations under this agreement at the time of its termination.
(c) Payment of the Termination Fee and Expense Reimbursement
upon any termination referred to in Section 8.1(b) shall be the sole and
exclusive remedy for Parent and the Sub as a result of such termination.
Section 8.2 Amendment and Modification. Subject to applicable law,
--------------------------
this agreement may be amended, modified and supplemented in any and all
respects, whether before or after any vote of the stockholders of the Company
contemplated hereby, by written agreement of the parties hereto.
Section 8.3 Nonsurvival of Representations and Warranties. None of
---------------------------------------------
the representations and warranties in this agreement or in any schedule,
instrument or other document delivered pursuant to this agreement shall survive
the Offer Closing Date.
Section 8.4 Notices. All notices and other communications hereunder
-------
shall be in writing and shall be deemed given if delivered personally,
telecopied (which is confirmed) or sent by an overnight courier service, such as
Federal Express, to the parties at the following addresses (or at such other
address for a party as shall be specified by like notice);
(a) if to Parent or the Sub, to:
VS&A Communications Partners II, L.P.
350 Park Avenue
New York, New York 10022
Att: Jeffrey T. Stevenson
President
with a copy to:
Proskauer Rose LLP
1585 Broadway
New York, New York 10036
Att: Bertram A. Abrams, Esq.
30
<PAGE>
(b) if to the Company, to:
T/SF Communications Corporation
2407 E. Skelly Drive
Tulsa, Oklahoma 74105
Att: Howard G. Barnett, Jr., President
with a copy to:
Conner & Winters
2400 First Place Tower
15 E. 5th Street
Tulsa, Oklahoma 74103
Att: Robert A. Curry, Esq.
Section 8.5 Counterparts. This Agreement may be executed in one or
------------
more counterparts, each of which shall be considered one and the same agreement
and shall become effective when two or more counterparts have been signed by
each of the parties and delivered to the other parties.
Section 8.6 Entire Agreement; Third Party Beneficiaries. This
-------------------------------------------
Agreement and the Confidentiality Agreement (including the documents and the
instruments referred to herein and therein): (a) constitute the entire
agreement and supersede all prior agreements and understandings, both written
and oral, among the parties with respect to the subject matter hereof, and (b)
except as provided in Article II and Section 5.8 are not intended to confer upon
any person other than the parties hereto any rights or remedies hereunder. The
stockholders of the Company who do not tender shares in the Offer shall be third
party beneficiaries of Article II of this Agreement.
Section 8.7 Severability. Any term or provision of this agreement
------------
that is held by a court of competent jurisdiction or other authority to be
invalid, void or unenforceable in any situation in any jurisdiction shall not
affect the validity or enforceability of the remaining terms and provisions
hereof or the validity or enforceability of the offending term or provision in
any other situation or in any other jurisdiction. If the final judgment of a
court of competent jurisdiction or other authority declares that any term or
provision hereof is invalid, void or unenforceable, the parties agree that the
court making such determination shall have the power to reduce the scope,
duration, area or applicability of the term or provision, to delete specific
words or phrases, or to replace any invalid, void or unenforceable term or
provision with a term or provision that is valid and enforceable and that comes
closest to expressing the intention of the invalid or unenforceable term or
provision.
Section 8.8 Governing Law. This Agreement shall be governed by and
-------------
construed in accordance with the laws of the State of Delaware without giving
effect to the principles of conflicts of law thereof.
31
<PAGE>
Section 8.9 Assignment. Neither this agreement nor any of the
----------
rights, interests or obligations hereunder shall be assigned by any of the
parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other parties, except that the Sub may assign, in its
sole discretion, any or all of its rights, interests and obligations hereunder
to Parent or to any direct or indirect wholly owned Subsidiary of Parent.
Subject to the preceding sentence, this agreement will be binding upon, inure to
the benefit of and be enforceable by the parties and their respective successors
and assigns.
Section 8.10 Transfer and Similar Taxes. Notwithstanding any other
--------------------------
provision of this agreement to the contrary, each of the Company's stockholders
shall be responsible for the payment of any sales, use, privilege, transfer,
documentary, gains, stamp, duties, recording and similar Taxes and fees
(including any penalties, interest and additions to such fees) incurred in
connection with sucn stockholder's sale of shares to the Sub pursuant to this
agreement and for the accurate filing of all necessary Tax Returns and other
documentation with respect to any transfer Tax.
VS&A COMMUNICATIONS PARTNERS II, L.P.
By: /s/ Jeffrey Stevenson
------------------------------------
VS&A-T/SF, INC.
By: /s/ Jeffrey Stevenson
------------------------------------
T/SF COMMUNICATIONS CORPORATION
By: /s/ Howard G. Barnett, Jr.
------------------------------------
Chairman, President
and Chief Executive Officer
32
<PAGE>
ANNEX A
Certain Conditions of the Offer. Notwithstanding any other provisions
-------------------------------
of the Offer, but subject to the restriction on the Company's right to amend,
modify or waive the terms and conditions of the Offer pursuant to Section 1.1(b)
of this agreement, the Company shall not be required to accept for payment or,
subject to any applicable rules and regulations of the SEC, including Rule 14e-
l(c) under the Exchange Act (relating to the Company's obligation to pay for or
return tendered shares promptly after termination or withdrawal of the Offer),
pay for, and may delay the acceptance for payment of or, subject to the
restriction referred to above, the payment for, any tendered shares, and may
terminate or amend the Offer as to any shares not then paid for, if (i) any
applicable waiting period under the HSR Act has not expired or terminated, (ii)
the Minimum Condition has not been satisfied, or (iii) at any time on or after
the date of this agreement and before the time of acceptance for payment for any
such shares, any of the following events shall occur:
(a) there shall be threatened or pending any suit, action or
proceeding by any Governmental Entity against the Sub, Parent, the Company or
any Subsidiary of the Company (i) seeking to prohibit or impose any material
limitations on Parent's or the Sub's ownership or operation (or that of any of
their respective Subsidiaries or affiliates) of all or a material portion of
their or the Company's businesses or assets, or to compel Parent or the Sub or
their respective Subsidiaries and affiliates to dispose of or hold separate any
material portion of the business or assets of the Company or Parent and their
respective Subsidiaries, (ii) challenging the acquisition by the Company of any
shares under the Offer or the acquisition by the Sub of any shares of Common
Stock pursuant to the Stock Purchase or pursuant to the Stockholder Agreements,
seeking to restrain or prohibit the making or consummation of the Offer, the
Stock Purchase or the Merger or the Stock Split or the performance of any of the
other transactions contemplated by this agreement or the Stockholder Agreements
(including the voting provisions thereunder), or seeking to obtain from the
Company, Parent or the Sub any damages that are material in relation to the
Company and its Subsidiaries taken as a whole, (iii) seeking to impose material
limitations on the ability of the Company, or render the Company unable, to
accept for payment, pay for or purchase some or all of the shares pursuant to
the Offer, or (iv) which otherwise would have or be reasonably likely to have a
Material Adverse Effect;
(b) there shall be any statute, rule, regulation, judgment,
order or injunction enacted, entered, enforced, promulgated, or deemed
applicable, pursuant to an authoritative interpretation by or on behalf of a
Government Entity, to the Offer, the Stock Purchase or the Merger or the Stock
Split, or any other action shall be taken by any Governmental Entity, other than
the application to the Offer, the Stock Purchase or the Merger or the Stock
Split of applicable waiting periods under HSR Act, that is reasonably likely to
result, directly or indirectly, in any of the consequences referred to in
clauses (i) through (iv) of paragraph (a) above;
(c) there shall have occurred (i) any general suspension of
trading in, or limitation on prices for, securities on the New York Stock
Exchange, American Stock Exchange or in the NASDAQ National Market System, for a
period in excess of 24 hours (excluding suspensions
33
<PAGE>
or limitations resulting solely from physical damage or interference with such
exchanges not related to market conditions), (ii) a declaration of a banking
moratorium or any suspension of payments in respect of banks in the United
States (whether or not mandatory), (iii) a commencement of a war, armed
hostilities or other international or national calamity directly or indirectly
involving the United States, (iv) any limitation (whether or not mandatory) by
any United States governmental authority on the extension of credit generally by
banks or other financial institutions, or (v) a change in general financial bank
or capital market conditions which materially and adversely affects the ability
of financial institutions in the United States to extend credit or syndicate
loans or (vi) in the case of any of the foregoing existing at the time of the
commencement of the Offer, a material acceleration or worsening thereof;
(d) there shall have occurred any changes (or any developments
that, insofar as reasonably can be foreseen, are reasonable likely to result in
any changes) in the financial condition, business, results of operations or
prospects of the Company and its Subsidiaries that individually or in the
aggregate would have or be reasonably likely to have a Material Adverse Effect;
(e) (i) the Board of Directors of the Company or any committee
thereof shall have withdrawn or modified its approval or recommendation of the
Offer, the Stock Purchase or this agreement, or approved or recommended any
Acquisition Proposal or (ii) the Company shall have entered into any agreement
with respect to any Superior Proposal in accordance with Section 5.4(b) of this
agreement;
(f) any of the representations and warranties of the Sub set
forth in this agreement that are qualified as to materiality shall not be true
and correct without such qualification and any such representations and
warranties that are not so qualified shall not be true and correct in any
respect (in each case (i) as of the date referred to in any representation or
warranty which addresses matters as of a particular date, or (ii) as to all
other representations and warranties, as of the date of this agreement and as of
the scheduled expiration of the Offer), except to the extent all failures to be
true and correct in the aggregate would not have or be reasonably likely to have
a Material Adverse Effect;
(g) the Company shall have failed to perform in any material
respect any material obligation or to comply in any material respect with any
material agreement or covenant of the Company to be performed or complied with
by it under this agreement or the action contemplated by Section 1.5(c) of this
agreement shall not have been taken; or
(h) this agreement shall have been terminated in accordance
with its terms;
which in the reasonable good faith judgment of the Parent or the Sub, in any
such case, and regardless of the circumstances (including any action or inaction
by the Parent or the Sub) giving rise to such condition makes it inadvisable for
the Company to proceed with the Offer and/or with such acceptance for payment of
or payment for Shares.
34
<PAGE>
The foregoing conditions are for the benefit of the Parent and the Sub
and may be waived by the Parent or the Sub, on behalf of the Company, in whole
or in part, at any time and from time to time in the sole discretion of the
Parent and the Sub. The failure by the Parent or the Sub at any time to
exercise any of the foregoing rights shall not be deemed a waiver of any such
right and each such right shall be deemed an ongoing right which may be asserted
at any time and from time to time.
35
<PAGE>
The following schedules have been omitted, and the Company agrees to
furnish supplementally a copy of any such omitted schedules to the Securities
and Exchange Commission upon its request:
Exhibit/Schedule Content
- ---------------- ---------------------------------------
Exhibit 6.4(a) Consulting Agreement between T/SF Communications
Corporation and Howard G. Barnett, Jr.
Exhibit 6.4(b) Consulting Agreement between T/SF Communications
Corporation and Robert E. Craine, Jr.
Exhibit 6.4(c) Consulting Agreement between T/SF Communications
Corporation and J. Gary Mourton
Schedule 3.1. Equity Interests Owned
Schedule 3.4. Consents
Schedule 3.6 Changes since December 31, 1996
Schedule 3.7 Undisclosed Liabilities
Schedule 3.8 Litigation
Schedule 3.9. Employment Benefit Plans
Schedule 3.9(c) Funding Deficiency
Schedule 3.9(d) Medical plans with respect to current or former
employees
Schedule 3.9(e) Special Severance Plans
Schedule 3.10 Tax Matters
Schedule 3.11. Title and Conditions of Properties
Schedule 3.12(a) Trademarks
Schedule 3.12(b) Royalties
Schedule 3.13 Employment Matters
Schedule 3.14 Compliance with Laws
Schedule 3.15 Environmental Compliance
Schedule 3.16 Contracts
Schedule 5.1 Interim Operations
Schedule 5.3(a) Necessary Consents
3.9(e) Annex 1 Proposed Bonus and Severance Plan for Possible Sale
<PAGE>
EXHIBIT (c)(2)
STOCKHOLDER AGREEMENT
---------------------
August 15, 1997
The parties to this agreement are VS&A Communications Partners II,
L.P., a Delaware limited partnership ("Parent"), VS&A-T/SF, Inc., a Delaware
corporation and a wholly owned subsidiary of Parent (the "Sub"), and Jenkin
Lloyd Jones Jr. and Carol B. Jones, as Co-Trustees of the Revocable Inter Vivos
Trust of Jenkin Lloyd Jones Jr. (the "Stockholder").
Concurrently with the execution and delivery of this agreement,
Parent, the Sub, and T/SF Communications Corporation, a Delaware corporation
(the "Company"), are entering into a Stock Purchase Agreement the ("Agreement")
which provides inter alia, for the Company's cash tender offer (the "Offer") to
----- ----
purchase all of the Company's outstanding shares of common stock, par value $.10
per share ("Common Stock") at a price of $40.25 per share. As a condition to
entering into the Agreement, Parent has required that the Stockholder agree to
the terms of this agreement and, as an inducement to Parent and the Sub to enter
into the Agreement and proceed with the Offer, the Stockholder has agreed to
those terms as set forth below. Capitalized terms used end not defined in this
agreement have the meanings ascribed to them in the Agreement.
It is therefore agreed as follows:
1. Tender of Shares.
----------------
(a) Tender. Not later than the fifteenth business day after
------
commencement of the Offer pursuant to Section 1.1 of the Agreement, the
Stockholder shall validly tender (or cause the record owner of his Shares to
validly tender), in accordance with the terms of the Offer, the number of shares
of the Common Stock set forth opposite the Stockholder's name on Schedule I to
this agreement, all of which are beneficially owned by the Stockholder, together
with any additional shares of the Common Stock that the Stockholder acquires
record or beneficial ownership of after execution of this agreement except for
additional shares acquired in any capacity excepted from this agreement pursuant
to Schedule I.
(b) Authorization to Disclose. The Stockholder authorizes the Company,
-------------------------
Parent and the Sub to publish and disclose in the documents relating to the
Offer the Stockholder's identity and ownership of the Company's common stock and
the nature of the Stockholder's commitments, arrangements and understandings
under this agreement.
(c) Conditions. The Stockholder acknowledges that the Company's
----------
obligation to accept and pay for the Shares in the Offer, including the Shares
owned of record or beneficially by the Stockholder, is subject to the term and
conditions of the Offer.
<PAGE>
2. The Stockholder's Responsibilities with Respect to the Merger.
-------------------------------------------------------------
(a) Voting Agreement. The Stockholder shall, at any meeting of the
----------------
holders of Common Stock, however called, or in connection with any written
consent of the holders of Common Stock, vote (or cause to be voted) the Shares,
then held of record or beneficially owned by the Stockholder against any
Acquisition Proposal and against any action or agreement that would impede,
frustrate, prevent or nullify this agreement, or result in a breach in any
respect of any covenant, representation or warranty or any other obligation or
agreement of the Company under the Agreement or which would result in any of the
conditions set forth in Annex A to the Agreement or set forth in Article VI of
the Agreement not being fulfilled. The Stockholder shall not be required to
take any action in accordance with this provision, however, to the extent that
the Stockholder shall have been advised by counsel in writing that in the
opinion of such counsel, the taking of any such action would violate the
Stockholder's fiduciary duties to the Company's stockholders under applicable
law, either in the Stockholder's capacity as a stockholder of the Company or in
the Stockholder's capacity as a member of the Company's Board of Directors.
(b) No Solicitation. Upon execution of this agreement the Stockholder
---------------
immediately shall cease any activities, discussions or negotiations with other
parties with respect to any Acquisition Proposal and shall not, directly or
indirectly, encourage, solicit, participate in or initiate discussions or
negotiations with or provide any information to, any corporation, partnership,
person or other entity or group (other than Parent and any of its affiliates or
representatives) concerning any Acquisition Proposal, except that the
Stockholder may negotiate and participate in negotiations with any entity or
group concerning an Acquisition Proposal to the extent that the Company is
permitted to do so under section 5.4 of the Agreement. The Stockholder shall
immediately communicate to Parent the terms of any proposal, discussion,
negotiation or inquiry the Stockholder receives in his capacity as a stockholder
of the Company (and the Stockholder shall furnish to Parent copies of any
written materials received by the Stockholder in his capacity as a stockholder
of the Company, in connection with any such proposal, discussion, negotiation or
inquiry) and the identity of the party making such proposal or inquiry.
(c) No Transfer of Shares or Inconsistent Arrangements. Except as
--------------------------------------------------
contemplated by the Agreement or this agreement, the Stockholder shall not (i)
transfer (which term shall include, without limitation, any sale, gift, pledge
or other disposition), or consent to any transfer of, any or all of the Shares
in the Company held by the Stockholder of record or beneficially, (ii) enter
into any contract, option or other agreement or understanding with respect to
any transfer of any or all of those Shares or any interest therein, (iii) grant
any proxy, power-of-attorney or other authorization in or with respect to those
Shares, (iv) deposit any of those Shares into a voting trust or enter into a
voting agreement or arrangement with respect to any of those Shares, or (v) take
any other action that would in any way restrict, limit or interfere with the
performance of the Stockholder's obligations under this agreement or the
transactions contemplated by this agreement or by the Agreement. The
Stockholder shall not request that the Company register the transfer (book-entry
or otherwise) of any certificate or uncertificated
2
<PAGE>
interest representing any of the Shares in the Company owned of record or
beneficially by the Stockholder, unless such transfer is made in compliance with
this agreement.
(d) Company Options. If the Stockholder holds Options to acquire
---------------
shares of Company Common Stock, Stockholder shall, if requested by the Company,
consent to the cancellation or substitution of those options in accordance with
the terms of the Agreement and shall execute all appropriate documentation in
connection with such cancellation or substitution.
(e) Reasonable Efforts. Subject to the terms and conditions of this
------------------
agreement, each of the parties to this agreement shall use reasonable efforts to
take or cause to be taken all such action as may be necessary, proper or
advisable under applicable laws and regulations to consummate the transactions
contemplated by this agreement and the Agreement. Each party shall promptly
consult with the other and provide any necessary information and material with
respect to all filings made by Stockholder with any Governmental entity in
connection with this agreement and the Agreement and the transactions
contemplated by this agreement and the Agreement.
(f) Further Assurances. Each party shall from time to time, at the
------------------
other party's request and without further consideration, execute and deliver
such additional documents and take such further lawful action as may be
necessary or desirable to consummate, in the most expeditious manner
practicable, the transactions contemplated by this agreement.
3. Profit on Disposition of Shares Other than Pursuant to the Offer.
----------------------------------------------------------------
If prior to the time of acceptance for payment of the shares pursuant
to the Offer (a) the Company's board of directors withdraws or modifies its
approval or recommendation of the Offer or the Agreement, approves or recommends
a Superior Proposal, or enters into an agreement with respect to a Superior
Proposal, and (b) within 12 months thereafter there is a Disposition of any or
all of the shares of the Company owned by the Stockholder either pursuant to the
Superior Proposal or pursuant to a different Acquisition Proposal for which an
agreement was entered into within six months thereafter, then, promptly upon
receipt by the Stockholder of the proceeds of the Disposition, the Stockholder
shall pay to Parent an amount equal to the first $1.50 per Share of additional
consideration received in connection with the Disposition and 50% of any
additional consideration in excess of $1.50 per Share received in connection
with the Disposition (including the fair market value of any property) as
compared to the consideration that would have been received pursuant to the
Offer. If all or any portion of the consideration received in connection with
the Disposition is other than cash, payment to Parent shall be made in kind or,
at the Stockholder's election, in cash in an amount equal to the fair market
value of the consideration other than cash. As used in this provision, the term
"Disposition" means any sale, exchange or other disposition of shares, including
any disposition in connection with any tender offer, merger, consolidation or
liquidation.
4. Representations and Warranties of the Stockholder. The Stockholder
-------------------------------------------------
represents and warrants to Parent and the Sub as follows:
3
<PAGE>
(a) Power; Binding Agreement. The Stockholder has the legal capacity,
------------------------
power and authority to enter into and perform all of the Stockholder's
obligations under this agreement. The execution, delivery and performance of
this agreement by the Stockholder will not violate any other agreement to which
the Stockholder is a party or by which the Stockholder is bound, including, but
not limited to, any voting agreement, proxy arrangement, pledge agreement,
shareholders agreement or voting trust. This agreement has been duly and
validly executed and delivered by the Stockholder and constitutes a valid and
binding obligation of the Stockholder, enforceable against the Stockholder in
accordance with its terms. There is no beneficiary or holder of a voting trust
certificate or other interest of any trust of which the Stockholder is a trustee
whose consent is required for the execution and delivery of this agreement or
the consummation by the Stockholder of the transactions contemplated by this
agreement.
(b) No Conflicts. Except for filings under the HSR Act, the Exchange
------------
Act and as set forth in Section 3.4 of the Disclosure Schedule to the Agreement,
(i) no filing with, and no permit, authorization, consent or approval of, any
Governmental Entity is required for the execution and delivery of this agreement
by the Stockholder and the consummation by the Stockholder of the transactions
contemplated by this agreement and (ii) the execution, delivery and performance
of this agreement by the Stockholder will not violate any agreement or other
obligation to which the Stockholder is a party or by which the Stockholder or
any of the Stockholder's properties or assets is bound or violate any order,
writ, injunction, decree, judgment, order, statute, rule or regulation
applicable to the Stockholder or any of the Stockholder's properties or assets.
(c) Ownership of Shares. The Stockholder is the record and beneficial
-------------------
owner of the number of shares of the Common Stock subject to this agreement set
forth opposite the Stockholder's name on Schedule I to this agreement, except as
set forth on Schedule I, those shares constitute all of the shares of the Common
Stock owned of record or beneficially by the Stockholder, and upon tender of
those shares to the Company and the purchase of the shares by the Company
pursuant to the Offer, the Company shall acquire valid title to those shares,
free and clear of any claims, liens, encumbrances, proxies, voting trusts or
agreements, understandings or arrangements or any other rights (collectively,
"Encumbrances"). Subject to applicable securities laws and the terms of this
agreement, the Stockholder has sole voting power and sole power to issue
instructions with respect to the matters set forth in sections 1,2 and 3 of this
agreement, sole power of disposition, sole power of conversion, sole power to
demand appraisal rights, and sole power to agree to all of the matters set forth
in this agreement, in each case with respect to all of the shares in the Company
beneficially owned by the Stockholder, with no limitations, qualifications or
restrictions on those rights.
(d) No Encumbrance. Except as permitted by this agreement, the shares
--------------
in the Company owned by the Stockholder of record or beneficially, and the
certificates representing those shares, are now, and at all times prior to the
purchase of those shares pursuant to the Offer will be, held by the Stockholder,
or by a nominee or custodian for the benefit of the Stockholder, free and clear
of all Encumbrances except for those arising under this agreement.
4
<PAGE>
(e) No Finder's Fees. Except as set forth in Section 3.18 of the
----------------
Agreement, no broker, investment banker, financial advisor or other person is
entitled to any broker's, finder's, financial adviser's or other similar fee or
commission in connection with the transactions contemplated by this agreement
based upon arrangements made by or on behalf of the Stockholder.
5. Representations and Warranties of Parent and the Sub. Parent and the
----------------------------------------------------
Sub jointly and severally represent and warrant to the Stockholder as follows:
(a) Power: Binding Agreement. Each of Parent and the Sub has the
-------------------------
corporate power and authority to enter into and perform all of its obligations
under this agreement and the execution, delivery and performance of this
agreement by Parent and the Sub have been duly authorized by all necessary
partnership or corporate action. The execution, delivery and performance of
this agreement by each of Parent and the Sub will not violate any other
agreement to which either of them is a party or by which either of them is
bound. This agreement has been duly and validly executed and delivered by each
of Parent and the Sub and constitutes a valid and binding agreement of each of
Parent and the Sub, enforceable against each of them in accordance with its
terms.
(b) No Conflicts. Except for filings under the HSR Act and the
------------
Exchange Act, (i) no filing with, and no permit, authorization, consent or
approval of, any Governmental Entity is necessary for the execution of this
agreement by each of Parent and the Sub and the consummation by each of Parent
and the Sub of the transactions contemplated hereby and (ii) the execution,
delivery and performance of this agreement by each of Parent and the Sub will
not (A) conflict with or result in any breach of any organizational documents
applicable to either Parent or the Sub, (B) result in a violation or breach of,
or constitute (with or without notice or lapse of time or both) a default (or
give rise to any third party right of termination, cancellation, material
modification or acceleration) under, any of the terms, conditions or provisions
of any note, loan agreement, bond, mortgage, indenture, license, contract,
commitment, arrangement, understanding, agreement or other instrument or
obligation of any kind to which either Parent or the Sub is a party or by which
either Parent or the Sub or any of their respective properties or assets is
bound, or (C) violate any order, writ, injunction, decree, judgment, order,
statute, rule or regulation applicable to either Parent or the Sub or any of
their respective properties or assets.
6. Termination.
-----------
Except as provided in Section 3 of this agreement, this agreement
shall terminate upon the termination of the Agreement in accordance with its
terms. The termination of this agreement pursuant to this provision shall not
relieve any party of liability for any prior breach of its or his or her
obligations under this agreement.
5
<PAGE>
7. Definitions.
-----------
(a) Shares. Any reference in this agreement to the shares owned of
------
record or beneficially by the Stockholder shall be deemed to include shares
hereafter acquired by the Stockholder upon any stock dividend or distribution or
any change in the Company's Common Stock by reason of any split-up,
recapitalization, combination, exchange of shares or similar corporate action.
(b) Beneficial Ownership. For the purpose of this agreement,
--------------------
beneficial ownership with respect to any shares means beneficial ownership as
determined pursuant to Rule 13d-3 under the Securities Exchange Act of 1934, as
amended, including pursuant to any agreement, arrangement or understanding,
whether or not in writing.
(c) Agreement. Any reference to the "Agreement" refers to the
---------
Agreement executed on this date as it may hereafter be amended from time to
time.
8. Miscellaneous.
-------------
(a) Reliance by Parent. The Stockholder acknowledges that Stockholder
------------------
understands that Parent is entering into, and causing Sub to enter into, the
Agreement in reliance upon the Stockholder's execution, delivery and performance
of this agreement.
(b) Entire Agreement; No Oral Change. This agreement contains a
---------------------------------
compete statement of all of the arrangements among the parties with respect to
its subject matter, supersedes all prior agreements and understandings, written
and oral, among the parties with respect to that subject matter, and cannot be
changed or terminated except by an agreement in writing signed by all parties.
(c) Binding Agreement. This agreement and the obligations under this
-----------------
agreement shall attach to the shares owned of record and beneficially by the
Stockholder and shall be binding upon any such person or entity to which legal
or beneficial ownership of those shares shall pass, whether by operation of law
or otherwise, including, but not limited to, the Stockholder's heirs, guardians,
administrators or successors. The transferee of any shares shall remain liable
for the performance of all obligations of the transferor under this agreement.
(d) Assignment. None of the parties may assign any of its or his or
----------
her rights or delegate any of its or his or her duties under this agreement
without the prior written consent of the other parties.
(e) Notices. All notices and other communications hereunder shall be
-------
in writing and shall be deemed given if delivered personally, telecopied (which
is confirmed) or sent by an overnight courier service, such as Federal Express,
to the parties at the following addresses (or at such other address for a party
as shall be specified by like notice):
6
<PAGE>
(i) if to Parent or the Sub, to:
VS&A Communications Partners II, L.P.
350 Park Avenue
New York, New York 10022
Attn: Jeffrey T. Stevenson
President
with a copy to:
Proskauer Rose LLP
1585 Broadway
New York, New York 10036
Attn: Bertram A. Abrams, Esq.
(ii) if to the Stockholder, to:
Jenkin Lloyd Jones Jr. and Carol B. Jones
as Co-Trustees of the Revocable Inter Vivos
Trust of Jenkin Lloyd Jones Jr.
6447 S Louisville Avenue
Tulsa, OK 74136
with a copy to:
Conner & Winters
2400 First Place Tower
15 East 5th Street
Tulsa, Oklahoma 74103
Attn: Robert A. Curry, Esq.
(f) Severability. Whenever possible, each provision or portion of any
------------
provision of this agreement shall be interpreted in such manner as to be
effective and valid under applicable law but if any provision or portion of any
provision of this agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable law or rule in any jurisdiction, such
invalidity, illegality or unenforceability will not affect any other provision
or portion of any provision in such jurisdiction, and this agreement shall be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision or portion of any provision had never been
contained in this agreement.
(g) Specific Performance. The Stockholder acknowledges that the
--------------------
Company's business is of a special, unique and extraordinary character, and that
any default in the performance of Stockholder's obligations under sections 1
and 2 of this agreement could not be compensated for by damages. Accordingly,
if the Stockholder defaults in the performance of
7
<PAGE>
Stockholder's obligations under section 1 or 2 of this agreement, Parent and
the Sub shall be entitled, in addition to any other remedies that either of them
may have, to enforcement of this agreement by a decree of specific performance
requiring the Stockholder to fulfill those obligations, without any bond or
other security being required and without the necessity of showing actual
damages.
(h) Remedies Cumulative. All rights, powers and remedies provided
-------------------
under this agreement or otherwise available in respect hereof at law or in
equity shall be cumulative and not alternative, and the exercise of any right,
power or remedy by any party shall not preclude the simultaneous or later
exercise by that party of any other right, power or remedy.
(i) No Waiver. The failure of any party hereto to exercise any right,
---------
power or remedy provided under this agreement or otherwise available at law or
in equity, or to insist upon compliance by any other party with its obligations
under this agreement, and any custom or practice of the parties at variance with
the terms of this agreement, shall not constitute a waiver by that party of its
right to exercise any such or other right, power or remedy or to demand such
compliance.
(j) No Third Party Beneficiaries. This agreement is not intended to
----------------------------
be for the benefit of, and shall not be enforceable by, any person or entity who
or which is not a party hereto.
(k) Governing Law. This agreement shall be governed and construed in
-------------
accordance with the laws of the State of Delaware, without giving effect to the
principles of conflicts of law thereof.
(l) Jurisdiction. The courts of the State of Delaware and the United
------------
States District Court for the Southern District of New York shall have
jurisdiction over the parties with respect to any dispute or controversy among
them arising under or in connection with this agreement and, by execution and
delivery of this agreement, each of the parties to this agreement submits to the
jurisdiction of those courts, including, but not limited to, the in personam and
-----------
subject matter jurisdiction of those courts, waives any objection to such
jurisdiction on the grounds of venue or forum non conveniens, the absence of in
----- --- ---------- --
personam or subject matter jurisdiction and any similar grounds, consents to
- --------
service of process by mail (in accordance with section 8(e)) or any other manner
permitted by law, and irrevocably agrees to be bound by any judgment rendered
thereby in connection with this agreement. These consents to jurisdiction shall
not be deemed to confer rights on any person other than the parties to this
agreement.
8
<PAGE>
(m) Headings. The descriptive headings in this agreement are for
--------
convenience of reference only and are not intended to be part of or to affect
the meaning or interpretation of this agreement.
VS&A COMMUNICATIONS PARTNERS II, L.P.
By: /s/ Jeffrey T. Stevenson
------------------------------------------------
Jeffrey T. Stevenson
President and General Partner
VS&A-T/SF, INC.
By: /s/ Jeffrey T. Stevenson
------------------------------------------------
Jeffrey T. Stevenson
President and General Partner
JENKIN LLOYD JONES JR. AND CAROL B. JONES
AS CO-TRUSTEES OF THE REVOCABLE INTER
VIVOS TRUST OF JENKIN LLOYD JONES JR.
/s/ Jenkin Lloyd Jones Jr.
----------------------------------------------------
Jenkin Lloyd Jones, Jr.
/s/ Carol B. Jones
----------------------------------------------------
Carol B. Jones
9
<PAGE>
SCHEDULE 1
<TABLE>
<CAPTION>
NUMBER OF SHARES NUMBER OF SHARES BENEFICIALLY
BENEFICIALLY OWNED OWNED EXCLUDED FROM THIS
SUBJECT TO THIS AGREEMENT (INDICATING
NAME OF STOCKHOLDER AGREEMENT CAPACITY OWNED)
- ------------------- ---------------- -----------------------
<S> <C> <C>
Jenkin Lloyd Jones Jr. and 104,688 shares (i) 31.30546 shares in his account in
Carol B. Jones, as Co- the T/SF Communications
Trustees of the Revocable Retirement Plan
Inter Vivos Trust of Jenkin (ii) 4,641 shares owned by Carol B.
Lloyd Jones Jr. Jones and Jenkin Lloyd Jones Jr.,
as Co-trustees of the Revocable
Inter Vivos Trust of Carol B.
Jones
(iii) 22,634 shares owned by Jenkin
Lloyd Jones and Jenkin Lloyd
Jones Jr., as Co-Trustees of the
Revocable Inter Vivos Trust of
Jenkin Lloyd Jones (See separate
Stockholder Agreement)
</TABLE>
<PAGE>
EXHIBIT (c)(3)
STOCKHOLDER AGREEMENT
---------------------
August 15, 1997
The parties to this agreement are VS&A Communications Partners II,
L.P., a Delaware limited partnership ("Parent"), VS&A-T/SF, Inc., a Delaware
corporation and a wholly owned subsidiary of Parent (the "Sub"), and J. Gary
Mourton (the "Stockholder").
Concurrently with the execution and delivery of this agreement,
Parent, the Sub, and T/SF Communications Corporation, a Delaware corporation
(the "Company"), are entering into a Stock Purchase Agreement the ("Agreement")
which provides inter alia, for the Company's cash tender offer (the "Offer") to
----- ----
purchase all of the Company's outstanding shares of common stock, par value $.10
per share ("Common Stock") at a price of $40.25 per share. As a condition to
entering into the Agreement, Parent has required that the Stockholder agree to
the terms of this agreement and, as an inducement to Parent and the Sub to enter
into the Agreement and proceed with the Offer, the Stockholder has agreed to
those terms as set forth below. Capitalized terms used end not defined in this
agreement have the meanings ascribed to them in the Agreement.
It is therefore agreed as follows:
1. Tender of Shares.
----------------
(a) Tender. Not later than the fifteenth business day after
------
commencement of the Offer pursuant to Section 1.1 of the Agreement, the
Stockholder shall validly tender (or cause the record owner of his Shares to
validly tender), in accordance with the terms of the Offer, the number of shares
of the Common Stock set forth opposite the Stockholder's name on Schedule I to
this agreement, all of which are beneficially owned by the Stockholder, together
with any additional shares of the Common Stock that the Stockholder acquires
record or beneficial ownership of after execution of this agreement except for
additional shares acquired in any capacity excepted from this agreement pursuant
to Schedule I.
(b) Authorization to Disclose. The Stockholder authorizes the Company,
-------------------------
Parent and the Sub to publish and disclose in the documents relating to the
Offer the Stockholder's identity and ownership of the Company's common stock and
the nature of the Stockholder's commitments, arrangements and understandings
under this agreement.
(c) Conditions. The Stockholder acknowledges that the Company's
----------
obligation to accept and pay for the Shares in the Offer, including the Shares
owned of record or beneficially by the Stockholder, is subject to the term and
conditions of the Offer.
<PAGE>
2. The Stockholder's Responsibilities with Respect to the Merger.
-------------------------------------------------------------
(a) Voting Agreement. The Stockholder shall, at any meeting of the
----------------
holders of Common Stock, however called, or in connection with any written
consent of the holders of Common Stock, vote (or cause to be voted) the Shares,
then held of record or beneficially owned by the Stockholder against any
Acquisition Proposal and against any action or agreement that would impede,
frustrate, prevent or nullify this agreement, or result in a breach in any
respect of any covenant, representation or warranty or any other obligation or
agreement of the Company under the Agreement or which would result in any of the
conditions set forth in Annex A to the Agreement or set forth in Article VI of
the Agreement not being fulfilled. The Stockholder shall not be required to
take any action in accordance with this provision, however, to the extent that
the Stockholder shall have been advised by counsel in writing that in the
opinion of such counsel, the taking of any such action would violate the
Stockholder's fiduciary duties to the Company's stockholders under applicable
law, either in the Stockholder's capacity as a stockholder of the Company or in
the Stockholder's capacity as a member of the Company's Board of Directors.
(b) No Solicitation. Upon execution of this agreement the Stockholder
---------------
immediately shall cease any activities, discussions or negotiations with other
parties with respect to any Acquisition Proposal and shall not, directly or
indirectly, encourage, solicit, participate in or initiate discussions or
negotiations with or provide any information to, any corporation, partnership,
person or other entity or group (other than Parent and any of its affiliates or
representatives) concerning any Acquisition Proposal, except that the
Stockholder may negotiate and participate in negotiations with any entity or
group concerning an Acquisition Proposal to the extent that the Company is
permitted to do so under section 5.4 of the Agreement. The Stockholder shall
immediately communicate to Parent the terms of any proposal, discussion,
negotiation or inquiry the Stockholder receives in his capacity as a stockholder
of the Company (and the Stockholder shall furnish to Parent copies of any
written materials received by the Stockholder in his capacity as a stockholder
of the Company, in connection with any such proposal, discussion, negotiation or
inquiry) and the identity of the party making such proposal or inquiry.
(c) No Transfer of Shares or Inconsistent Arrangements. Except as
--------------------------------------------------
contemplated by the Agreement or this agreement, the Stockholder shall not (i)
transfer (which term shall include, without limitation, any sale, gift, pledge
or other disposition), or consent to any transfer of, any or all of the Shares
in the Company held by the Stockholder of record or beneficially, (ii) enter
into any contract, option or other agreement or understanding with respect to
any transfer of any or all of those Shares or any interest therein, (iii) grant
any proxy, power-of-attorney or other authorization in or with respect to those
Shares, (iv) deposit any of those Shares into a voting trust or enter into a
voting agreement or arrangement with respect to any of those Shares, or (v) take
any other action that would in any way restrict, limit or interfere with the
performance of the Stockholder's obligations under this agreement or the
transactions contemplated by this agreement or by the Agreement. The Stockholder
shall not request that the Company register the transfer (book-entry or
otherwise) of any certificate or uncertificated interest representing any of the
Shares in the Company owned of record or beneficially by the Stockholder, unless
such transfer is made in compliance with this agreement.
2
<PAGE>
(d) Company Options. If the Stockholder holds Options to acquire
---------------
shares of Company Common Stock, Stockholder shall, if requested by the Company,
consent to the cancellation or substitution of those options in accordance with
the terms of the Agreement and shall execute all appropriate documentation in
connection with such cancellation or substitution.
(e) Reasonable Efforts. Subject to the terms and conditions of this
------------------
agreement, each of the parties to this agreement shall use reasonable efforts to
take or cause to be taken all such action as may be necessary, proper or
advisable under applicable laws and regulations to consummate the transactions
contemplated by this agreement and the Agreement. Each party shall promptly
consult with the other and provide any necessary information and material with
respect to all filings made by Stockholder with any Governmental entity in
connection with this agreement and the Agreement and the transactions
contemplated by this agreement and the Agreement.
(f) Further Assurances. Each party shall from time to time, at the
------------------
other party's request and without further consideration, execute and deliver
such additional documents and take such further lawful action as may be
necessary or desirable to consummate, in the most expeditious manner
practicable, the transactions contemplated by this agreement.
3. Profit on Disposition of Shares Other than Pursuant to the Offer.
----------------------------------------------------------------
If prior to the time of acceptance for payment of the shares pursuant
to the Offer (a) the Company's board of directors withdraws or modifies its
approval or recommendation of the Offer or the Agreement, approves or recommends
a Superior Proposal, or enters into an agreement with respect to a Superior
Proposal, and (b) within 12 months thereafter there is a Disposition of any or
all of the shares of the Company owned by the Stockholder either pursuant to the
Superior Proposal or pursuant to a different Acquisition Proposal for which an
agreement was entered into within six months thereafter, then, promptly upon
receipt by the Stockholder of the proceeds of the Disposition, the Stockholder
shall pay to Parent an amount equal to the first $1.50 per Share of additional
consideration received in connection with the Disposition and 50% of any
additional consideration in excess of $1.50 per Share received in connection
with the Disposition (including the fair market value of any property) as
compared to the consideration that would have been received pursuant to the
Offer. If all or any portion of the consideration received in connection with
the Disposition is other than cash, payment to Parent shall be made in kind or,
at the Stockholder's election, in cash in an amount equal to the fair market
value of the consideration other than cash. As used in this provision, the term
"Disposition" means any sale, exchange or other disposition of shares, including
any disposition in connection with any tender offer, merger, consolidation or
liquidation.
4. Representations and Warranties of the Stockholder. The Stockholder
-------------------------------------------------
represents and warrants to Parent and the Sub as follows:
(a) Power; Binding Agreement. The Stockholder has the legal capacity,
------------------------
power and authority to enter into and perform all of the Stockholder's
obligations under
3
<PAGE>
this agreement. The execution, delivery and performance of this agreement by the
Stockholder will not violate any other agreement to which the Stockholder is a
party or by which the Stockholder is bound, including, but not limited to, any
voting agreement, proxy arrangement, pledge agreement, shareholders agreement or
voting trust. This agreement has been duly and validly executed and delivered by
the Stockholder and constitutes a valid and binding obligation of the
Stockholder, enforceable against the Stockholder in accordance with its terms.
There is no beneficiary or holder of a voting trust certificate or other
interest of any trust of which the Stockholder is a trustee whose consent is
required for the execution and delivery of this agreement or the consummation by
the Stockholder of the transactions contemplated by this agreement.
(b) No Conflicts. Except for filings under the HSR Act, the Exchange
------------
Act and as set forth in Section 3.4 of the Disclosure Schedule to the Agreement,
(i) no filing with, and no permit, authorization, consent or approval of, any
Governmental Entity is required for the execution and delivery of this agreement
by the Stockholder and the consummation by the Stockholder of the transactions
contemplated by this agreement and (ii) the execution, delivery and performance
of this agreement by the Stockholder will not violate any agreement or other
obligation to which the Stockholder is a party or by which the Stockholder or
any of the Stockholder's properties or assets is bound or violate any order,
writ, injunction, decree, judgment, order, statute, rule or regulation
applicable to the Stockholder or any of the Stockholder's properties or assets.
(c) Ownership of Shares. The Stockholder is the record and beneficial
-------------------
owner of the number of shares of the Common Stock subject to this agreement set
forth opposite the Stockholder's name on Schedule I to this agreement, except as
set forth on Schedule I, those shares constitute all of the shares of the Common
Stock owned of record or beneficially by the Stockholder, and upon tender of
those shares to the Company and the purchase of the shares by the Company
pursuant to the Offer, the Company shall acquire valid title to those shares,
free and clear of any claims, liens, encumbrances, proxies, voting trusts or
agreements, understandings or arrangements or any other rights (collectively,
"Encumbrances"). Subject to applicable securities laws and the terms of this
agreement, the Stockholder has sole voting power and sole power to issue
instructions with respect to the matters set forth in sections 1,2 and 3 of this
agreement, sole power of disposition, sole power of conversion, sole power to
demand appraisal rights, and sole power to agree to all of the matters set forth
in this agreement, in each case with respect to all of the shares in the Company
beneficially owned by the Stockholder, with no limitations, qualifications or
restrictions on those rights.
(d) No Encumbrance. Except as permitted by this agreement, the shares
--------------
in the Company owned by the Stockholder of record or beneficially, and the
certificates representing those shares, are now, and at all times prior to the
purchase of those shares pursuant to the Offer will be, held by the Stockholder,
or by a nominee or custodian for the benefit of the Stockholder, free and clear
of all Encumbrances except for those arising under this agreement.
(e) No Finder's Fees. Except as set forth in Section 3.18 of the
----------------
Agreement, no broker, investment banker, financial advisor or other person is
entitled to any broker's, finder's, financial adviser's or other similar fee or
commission in connection with the transactions contemplated by this agreement
based upon arrangements made by
4
<PAGE>
or on behalf of the Stockholder.
5. Representations and Warranties of Parent and the Sub. Parent and the
----------------------------------------------------
Sub jointly and severally represent and warrant to the Stockholder as follows:
(a) Power: Binding Agreement. Each of Parent and the Sub has the
-------------------------
corporate power and authority to enter into and perform all of its obligations
under this agreement and the execution, delivery and performance of this
agreement by Parent and the Sub have been duly authorized by all necessary
partnership or corporate action. The execution, delivery and performance of
this agreement by each of Parent and the Sub will not violate any other
agreement to which either of them is a party or by which either of them is
bound. This agreement has been duly and validly executed and delivered by each
of Parent and the Sub and constitutes a valid and binding agreement of each of
Parent and the Sub, enforceable against each of them in accordance with its
terms.
(b) No Conflicts. Except for filings under the HSR Act and the
------------
Exchange Act, (i) no filing with, and no permit, authorization, consent or
approval of, any Governmental Entity is necessary for the execution of this
agreement by each of Parent and the Sub and the consummation by each of Parent
and the Sub of the transactions contemplated hereby and (ii) the execution,
delivery and performance of this agreement by each of Parent and the Sub will
not (A) conflict with or result in any breach of any organizational documents
applicable to either Parent or the Sub, (B) result in a violation or breach of,
or constitute (with or without notice or lapse of time or both) a default (or
give rise to any third party right of termination, cancellation, material
modification or acceleration) under, any of the terms, conditions or provisions
of any note, loan agreement, bond, mortgage, indenture, license, contract,
commitment, arrangement, understanding, agreement or other instrument or
obligation of any kind to which either Parent or the Sub is a party or by which
either Parent or the Sub or any of their respective properties or assets is
bound, or (C) violate any order, writ, injunction, decree, judgment, order,
statute, rule or regulation applicable to either Parent or the Sub or any of
their respective properties or assets.
6. Termination.
-----------
Except as provided in Section 3 of this agreement, this agreement
shall terminate upon the termination of the Agreement in accordance with its
terms. The termination of this agreement pursuant to this provision shall not
relieve any party of liability for any prior breach of its or his or her
obligations under this agreement.
5
<PAGE>
7. Definitions.
-----------
(a) Shares. Any reference in this agreement to the shares owned of
------
record or beneficially by the Stockholder shall be deemed to include shares
hereafter acquired by the Stockholder upon any stock dividend or distribution or
any change in the Company's Common Stock by reason of any split-up,
recapitalization, combination, exchange of shares or similar corporate action.
(b) Beneficial Ownership. For the purpose of this agreement,
--------------------
beneficial ownership with respect to any shares means beneficial ownership as
determined pursuant to Rule 13d-3 under the Securities Exchange Act of 1934, as
amended, including pursuant to any agreement, arrangement or understanding,
whether or not in writing.
(c) Agreement. Any reference to the "Agreement" refers to the
---------
Agreement executed on this date as it may hereafter be amended from time to
time.
8. Miscellaneous.
-------------
(a) Reliance by Parent. The Stockholder acknowledges that Stockholder
------------------
understands that Parent is entering into, and causing Sub to enter into, the
Agreement in reliance upon the Stockholder's execution, delivery and performance
of this agreement.
(b) Entire Agreement; No Oral Change. This agreement contains a
---------------------------------
compete statement of all of the arrangements among the parties with respect to
its subject matter, supersedes all prior agreements and understandings, written
and oral, among the parties with respect to that subject matter, and cannot be
changed or terminated except by an agreement in writing signed by all parties.
(c) Binding Agreement. This agreement and the obligations under this
-----------------
agreement shall attach to the shares owned of record and beneficially by the
Stockholder and shall be binding upon any such person or entity to which legal
or beneficial ownership of those shares shall pass, whether by operation of law
or otherwise, including, but not limited to, the Stockholder's heirs, guardians,
administrators or successors. The transferee of any shares shall remain liable
for the performance of all obligations of the transferor under this agreement.
(d) Assignment. None of the parties may assign any of its or his or
----------
her rights or delegate any of its or his or her duties under this agreement
without the prior written consent of the other parties.
(e) Notices. All notices and other communications hereunder shall be
-------
in writing and shall be deemed given if delivered personally, telecopied (which
is confirmed) or sent by an overnight courier service, such as Federal Express,
to the parties at the following addresses (or at such other address for a party
as shall be specified by like notice):
6
<PAGE>
(i) if to Parent or the Sub, to:
VS&A Communications Partners II, L.P.
350 Park Avenue
New York, New York 10022
Attn: Jeffrey T. Stevenson
President
with a copy to:
Proskauer Rose LLP
1585 Broadway
New York, New York 10036
Attn: Bertram A. Abrams, Esq.
(ii) if to the Stockholder, to:
J. Gary Mourton
4220 Colonial Drive
Sapulpa, OK 74066
with a copy to:
Conner & Winters
2400 First Place Tower
15 East 5th Street
Tulsa, Oklahoma 74103
Attn: Robert A. Curry, Esq.
(f) Severability. Whenever possible, each provision or portion of any
------------
provision of this agreement shall be interpreted in such manner as to be
effective and valid under applicable law but if any provision or portion of any
provision of this agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable law or rule in any jurisdiction, such
invalidity, illegality or unenforceability will not affect any other provision
or portion of any provision in such jurisdiction, and this agreement shall be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision or portion of any provision had never been
contained in this agreement.
(g) Specific Performance. The Stockholder acknowledges that the
--------------------
Company's business is of a special, unique and extraordinary character, and that
any default in the performance of Stockholder's obligations under sections 1
and 2 of this agreement could not be compensated for by damages. Accordingly,
if the Stockholder defaults in the performance of Stockholder's obligations
under section 1 or 2 of this agreement, Parent and the Sub shall be entitled, in
addition to any other remedies that either of them may have, to enforcement of
this agreement by a decree of specific performance requiring the Stockholder to
fulfill those obligations, without any bond or other security being required and
without the necessity of showing actual damages.
(h) Remedies Cumulative. All rights, powers and remedies provided
-------------------
under this agreement or otherwise available in respect hereof at law or in
equity shall be cumulative and not alternative, and the exercise of any right,
power or remedy by any
7
<PAGE>
party shall not preclude the simultaneous or later exercise by that party of any
other right, power or remedy.
(i) No Waiver. The failure of any party hereto to exercise any right,
---------
power or remedy provided under this agreement or otherwise available at law or
in equity, or to insist upon compliance by any other party with its obligations
under this agreement, and any custom or practice of the parties at variance with
the terms of this agreement, shall not constitute a waiver by that party of its
right to exercise any such or other right, power or remedy or to demand such
compliance.
(j) No Third Party Beneficiaries. This agreement is not intended to
----------------------------
be for the benefit of, and shall not be enforceable by, any person or entity who
or which is not a party hereto.
(k) Governing Law. This agreement shall be governed and construed in
-------------
accordance with the laws of the State of Delaware, without giving effect to the
principles of conflicts of law thereof.
(l) Jurisdiction. The courts of the State of Delaware and the United
------------
States District Court for the Southern District of New York shall have
jurisdiction over the parties with respect to any dispute or controversy among
them arising under or in connection with this agreement and, by execution and
delivery of this agreement, each of the parties to this agreement submits to the
jurisdiction of those courts, including, but not limited to, the in personam and
-----------
subject matter jurisdiction of those courts, waives any objection to such
jurisdiction on the grounds of venue or forum non conveniens, the absence of in
----- --- ---------- --
personam or subject matter jurisdiction and any similar grounds, consents to
- --------
service of process by mail (in accordance with section 8(e)) or any other manner
permitted by law, and irrevocably agrees to be bound by any judgment rendered
thereby in connection with this agreement. These consents to jurisdiction shall
not be deemed to confer rights on any person other than the parties to this
agreement.
8
<PAGE>
(m) Headings. The descriptive headings in this agreement are for
--------
convenience of reference only and are not intended to be part of or to affect
the meaning or interpretation of this agreement.
VS&A COMMUNICATIONS PARTNERS II, L.P.
By: /s/ Jeffrey T. Stevenson
--------------------------------------
Jeffrey T. Stevenson
President and General Partner
VS&A-T/SF, INC.
By: /s/ Jeffrey T. Stevenson
--------------------------------------
Jeffrey T. Stevenson
President and General Partner
/s/ J. Gary Mourton
------------------------------------------
J. Gary Mourton
9
<PAGE>
SCHEDULE 1
<TABLE>
<CAPTION>
NUMBER OF SHARES NUMBER OF SHARES BENEFICIALLY
BENEFICIALLY OWNED OWNED EXCLUDED FROM THIS
SUBJECT TO THIS AGREEMENT (INDICATING
NAME OF STOCKHOLDER AGREEMENT CAPACITY OWNED)
- ------------------- ---------------- -------------------------
<S> <C> <C>
J. Gary Mourton 38,478 shares (i) 206.51744 shares in his account in
T/SF Communications Corporation
Savings and Retirement Plan
(ii) 58,500 shares attributable to
vested stock options
</TABLE>
<PAGE>
EXHIBIT (c)(4)
STOCKHOLDER AGREEMENT
---------------------
August 15, 1997
The parties to this agreement are VS&A Communications Partners II,
L.P., a Delaware limited partnership ("Parent"), VS&A-T/SF, Inc., a Delaware
corporation and a wholly owned subsidiary of Parent (the "Sub"), and Robert E.
Craine, Jr. (the "Stockholder").
Concurrently with the execution and delivery of this agreement,
Parent, the Sub, and T/SF Communications Corporation, a Delaware corporation
(the "Company"), are entering into a Stock Purchase Agreement the ("Agreement")
which provides inter alia, for the Company's cash tender offer (the "Offer") to
----------
purchase all of the Company's outstanding shares of common stock, par value $.10
per share ("Common Stock") at a price of $40.25 per share. As a condition to
entering into the Agreement, Parent has required that the Stockholder agree to
the terms of this agreement and, as an inducement to Parent and the Sub to enter
into the Agreement and proceed with the Offer, the Stockholder has agreed to
those terms as set forth below. Capitalized terms used end not defined in this
agreement have the meanings ascribed to them in the Agreement.
It is therefore agreed as follows:
1. Tender of Shares.
----------------
(a) Tender. Not later than the fifteenth business day after
------
commencement of the Offer pursuant to Section 1.1 of the Agreement, the
Stockholder shall validly tender (or cause the record owner of his Shares to
validly tender), in accordance with the terms of the Offer, the number of shares
of the Common Stock set forth opposite the Stockholder's name on Schedule I to
this agreement, all of which are beneficially owned by the Stockholder, together
with any additional shares of the Common Stock that the Stockholder acquires
record or beneficial ownership of after execution of this agreement except for
additional shares acquired in any capacity excepted from this agreement pursuant
to Schedule I.
(b) Authorization to Disclose. The Stockholder authorizes the Company,
-------------------------
Parent and the Sub to publish and disclose in the documents relating to the
Offer the Stockholder's identity and ownership of the Company's common stock and
the nature of the Stockholder's commitments, arrangements and understandings
under this agreement.
(c) Conditions. The Stockholder acknowledges that the Company's
----------
obligation to accept and pay for the Shares in the Offer, including the Shares
owned of record or beneficially by the Stockholder, is subject to the term and
conditions of the Offer.
<PAGE>
2. The Stockholder's Responsibilities with Respect to the Merger.
-------------------------------------------------------------
(a) Voting Agreement. The Stockholder shall, at any meeting of the
----------------
holders of Common Stock, however called, or in connection with any written
consent of the holders of Common Stock, vote (or cause to be voted) the Shares,
then held of record or beneficially owned by the Stockholder against any
Acquisition Proposal and against any action or agreement that would impede,
frustrate, prevent or nullify this agreement, or result in a breach in any
respect of any covenant, representation or warranty or any other obligation or
agreement of the Company under the Agreement or which would result in any of the
conditions set forth in Annex A to the Agreement or set forth in Article VI of
the Agreement not being fulfilled. The Stockholder shall not be required to take
any action in accordance with this provision, however, to the extent that the
Stockholder shall have been advised by counsel in writing that in the opinion of
such counsel, the taking of any such action would violate the Stockholder's
fiduciary duties to the Company's stockholders under applicable law, either in
the Stockholder's capacity as a stockholder of the Company or in the
Stockholder's capacity as a member of the Company's Board of Directors.
(b) No Solicitation. Upon execution of this agreement the Stockholder
---------------
immediately shall cease any activities, discussions or negotiations with other
parties with respect to any Acquisition Proposal and shall not, directly or
indirectly, encourage, solicit, participate in or initiate discussions or
negotiations with or provide any information to, any corporation, partnership,
person or other entity or group (other than Parent and any of its affiliates or
representatives) concerning any Acquisition Proposal, except that the
Stockholder may negotiate and participate in negotiations with any entity or
group concerning an Acquisition Proposal to the extent that the Company is
permitted to do so under section 5.4 of the Agreement. The Stockholder shall
immediately communicate to Parent the terms of any proposal, discussion,
negotiation or inquiry the Stockholder receives in his capacity as a stockholder
of the Company (and the Stockholder shall furnish to Parent copies of any
written materials received by the Stockholder in his capacity as a stockholder
of the Company, in connection with any such proposal, discussion, negotiation or
inquiry) and the identity of the party making such proposal or inquiry.
(c) No Transfer of Shares or Inconsistent Arrangements. Except as
--------------------------------------------------
contemplated by the Agreement or this agreement, the Stockholder shall not (i)
transfer (which term shall include, without limitation, any sale, gift, pledge
or other disposition), or consent to any transfer of, any or all of the Shares
in the Company held by the Stockholder of record or beneficially, (ii) enter
into any contract, option or other agreement or understanding with respect to
any transfer of any or all of those Shares or any interest therein, (iii) grant
any proxy, power-of-attorney or other authorization in or with respect to those
Shares, (iv) deposit any of those Shares into a voting trust or enter into a
voting agreement or arrangement with respect to any of those Shares, or (v) take
any other action that would in any way restrict, limit or interfere with the
performance of the Stockholder's obligations under this agreement or the
transactions contemplated by this agreement or by the Agreement. The
Stockholder shall not request that the Company register the transfer (book-entry
or otherwise) of any certificate or uncertificated interest representing any of
the Shares in the Company owned of record or beneficially by the Stockholder,
unless such transfer is made in compliance with this agreement.
2
<PAGE>
(d) Company Options. If the Stockholder holds Options to acquire
---------------
shares of Company Common Stock, Stockholder shall, if requested by the Company,
consent to the cancellation or substitution of those options in accordance with
the terms of the Agreement and shall execute all appropriate documentation in
connection with such cancellation or substitution.
(e) Reasonable Efforts. Subject to the terms and conditions of this
------------------
agreement, each of the parties to this agreement shall use reasonable efforts to
take or cause to be taken all such action as may be necessary, proper or
advisable under applicable laws and regulations to consummate the transactions
contemplated by this agreement and the Agreement. Each party shall promptly
consult with the other and provide any necessary information and material with
respect to all filings made by Stockholder with any Governmental entity in
connection with this agreement and the Agreement and the transactions
contemplated by this agreement and the Agreement.
(f) Further Assurances. Each party shall from time to time, at the
------------------
other party's request and without further consideration, execute and deliver
such additional documents and take such further lawful action as may be
necessary or desirable to consummate, in the most expeditious manner
practicable, the transactions contemplated by this agreement.
3. Profit on Disposition of Shares Other than Pursuant to the Offer.
----------------------------------------------------------------
If prior to the time of acceptance for payment of the shares pursuant
to the Offer (a) the Company's board of directors withdraws or modifies its
approval or recommendation of the Offer or the Agreement, approves or recommends
a Superior Proposal, or enters into an agreement with respect to a Superior
Proposal, and (b) within 12 months thereafter there is a Disposition of any or
all of the shares of the Company owned by the Stockholder either pursuant to the
Superior Proposal or pursuant to a different Acquisition Proposal for which an
agreement was entered into within six months thereafter, then, promptly upon
receipt by the Stockholder of the proceeds of the Disposition, the Stockholder
shall pay to Parent an amount equal to the first $1.50 per Share of additional
consideration received in connection with the Disposition and 50% of any
additional consideration in excess of $1.50 per Share received in connection
with the Disposition (including the fair market value of any property) as
compared to the consideration that would have been received pursuant to the
Offer. If all or any portion of the consideration received in connection with
the Disposition is other than cash, payment to Parent shall be made in kind or,
at the Stockholder's election, in cash in an amount equal to the fair market
value of the consideration other than cash. As used in this provision, the term
"Disposition" means any sale, exchange or other disposition of shares, including
any disposition in connection with any tender offer, merger, consolidation or
liquidation.
4. Representations and Warranties of the Stockholder. The Stockholder
-------------------------------------------------
represents and warrants to Parent and the Sub as follows:
(a) Power; Binding Agreement. The Stockholder has the legal capacity,
------------------------
power and authority to enter into and perform all of the Stockholder's
obligations under
3
<PAGE>
this agreement. The execution, delivery and performance of this agreement by the
Stockholder will not violate any other agreement to which the Stockholder is a
party or by which the Stockholder is bound, including, but not limited to, any
voting agreement, proxy arrangement, pledge agreement, shareholders agreement or
voting trust. This agreement has been duly and validly executed and delivered by
the Stockholder and constitutes a valid and binding obligation of the
Stockholder, enforceable against the Stockholder in accordance with its terms.
There is no beneficiary or holder of a voting trust certificate or other
interest of any trust of which the Stockholder is a trustee whose consent is
required for the execution and delivery of this agreement or the consummation by
the Stockholder of the transactions contemplated by this agreement.
(b) No Conflicts. Except for filings under the HSR Act, the Exchange
------------
Act and as set forth in Section 3.4 of the Disclosure Schedule to the Agreement,
(i) no filing with, and no permit, authorization, consent or approval of, any
Governmental Entity is required for the execution and delivery of this agreement
by the Stockholder and the consummation by the Stockholder of the transactions
contemplated by this agreement and (ii) the execution, delivery and performance
of this agreement by the Stockholder will not violate any agreement or other
obligation to which the Stockholder is a party or by which the Stockholder or
any of the Stockholder's properties or assets is bound or violate any order,
writ, injunction, decree, judgment, order, statute, rule or regulation
applicable to the Stockholder or any of the Stockholder's properties or assets.
(c) Ownership of Shares. The Stockholder is the record and beneficial
-------------------
owner of the number of shares of the Common Stock subject to this agreement set
forth opposite the Stockholder's name on Schedule I to this agreement, except as
set forth on Schedule I, those shares constitute all of the shares of the Common
Stock owned of record or beneficially by the Stockholder, and upon tender of
those shares to the Company and the purchase of the shares by the Company
pursuant to the Offer, the Company shall acquire valid title to those shares,
free and clear of any claims, liens, encumbrances, proxies, voting trusts or
agreements, understandings or arrangements or any other rights (collectively,
"Encumbrances"). Subject to applicable securities laws and the terms of this
agreement, the Stockholder has sole voting power and sole power to issue
instructions with respect to the matters set forth in sections 1,2 and 3 of this
agreement, sole power of disposition, sole power of conversion, sole power to
demand appraisal rights, and sole power to agree to all of the matters set forth
in this agreement, in each case with respect to all of the shares in the Company
beneficially owned by the Stockholder, with no limitations, qualifications or
restrictions on those rights.
(d) No Encumbrance. Except as permitted by this agreement, the shares
--------------
in the Company owned by the Stockholder of record or beneficially, and the
certificates representing those shares, are now, and at all times prior to the
purchase of those shares pursuant to the Offer will be, held by the Stockholder,
or by a nominee or custodian for the benefit of the Stockholder, free and clear
of all Encumbrances except for those arising under this agreement.
(e) No Finder's Fees. Except as set forth in Section 3.18 of the
----------------
Agreement, no broker, investment banker, financial advisor or other person is
entitled to any broker's, finder's, financial adviser's or other similar fee or
commission in connection with the transactions contemplated by this agreement
based upon arrangements made by
4
<PAGE>
or on behalf of the Stockholder.
5. Representations and Warranties of Parent and the Sub. Parent and the
----------------------------------------------------
Sub jointly and severally represent and warrant to the Stockholder as follows:
(a) Power: Binding Agreement. Each of Parent and the Sub has the
-------------------------
corporate power and authority to enter into and perform all of its obligations
under this agreement and the execution, delivery and performance of this
agreement by Parent and the Sub have been duly authorized by all necessary
partnership or corporate action. The execution, delivery and performance of
this agreement by each of Parent and the Sub will not violate any other
agreement to which either of them is a party or by which either of them is
bound. This agreement has been duly and validly executed and delivered by each
of Parent and the Sub and constitutes a valid and binding agreement of each of
Parent and the Sub, enforceable against each of them in accordance with its
terms.
(b) No Conflicts. Except for filings under the HSR Act and the
------------
Exchange Act, (i) no filing with, and no permit, authorization, consent or
approval of, any Governmental Entity is necessary for the execution of this
agreement by each of Parent and the Sub and the consummation by each of Parent
and the Sub of the transactions contemplated hereby and (ii) the execution,
delivery and performance of this agreement by each of Parent and the Sub will
not (A) conflict with or result in any breach of any organizational documents
applicable to either Parent or the Sub, (B) result in a violation or breach of,
or constitute (with or without notice or lapse of time or both) a default (or
give rise to any third party right of termination, cancellation, material
modification or acceleration) under, any of the terms, conditions or provisions
of any note, loan agreement, bond, mortgage, indenture, license, contract,
commitment, arrangement, understanding, agreement or other instrument or
obligation of any kind to which either Parent or the Sub is a party or by which
either Parent or the Sub or any of their respective properties or assets is
bound, or (C) violate any order, writ, injunction, decree, judgment, order,
statute, rule or regulation applicable to either Parent or the Sub or any of
their respective properties or assets.
6. Termination.
-----------
Except as provided in Section 3 of this agreement, this agreement
shall terminate upon the termination of the Agreement in accordance with its
terms. The termination of this agreement pursuant to this provision shall not
relieve any party of liability for any prior breach of its or his or her
obligations under this agreement.
7. Definitions.
-----------
(a) Shares. Any reference in this agreement to the shares owned of
------
record or beneficially by the Stockholder shall be deemed to include shares
hereafter acquired by the Stockholder upon any stock dividend or distribution or
any change in the Company's Common Stock by reason of any split-up,
recapitalization, combination, exchange of shares or similar corporate action.
(b) Beneficial Ownership. For the purpose of this agreement,
--------------------
beneficial ownership with respect to any shares means beneficial ownership as
determined
5
<PAGE>
pursuant to Rule 13d-3 under the Securities Exchange Act of 1934, as amended,
including pursuant to any agreement, arrangement or understanding, whether or
not in writing.
(c) Agreement. Any reference to the "Agreement" refers to the
---------
Agreement executed on this date as it may hereafter be amended from time to
time.
8. Miscellaneous.
-------------
(a) Reliance by Parent. The Stockholder acknowledges that Stockholder
------------------
understands that Parent is entering into, and causing Sub to enter into, the
Agreement in reliance upon the Stockholder's execution, delivery and performance
of this agreement.
(b) Entire Agreement; No Oral Change. This agreement contains a
---------------------------------
compete statement of all of the arrangements among the parties with respect to
its subject matter, supersedes all prior agreements and understandings, written
and oral, among the parties with respect to that subject matter, and cannot be
changed or terminated except by an agreement in writing signed by all parties.
(c) Binding Agreement. This agreement and the obligations under this
-----------------
agreement shall attach to the shares owned of record and beneficially by the
Stockholder and shall be binding upon any such person or entity to which legal
or beneficial ownership of those shares shall pass, whether by operation of law
or otherwise, including, but not limited to, the Stockholder's heirs, guardians,
administrators or successors. The transferee of any shares shall remain liable
for the performance of all obligations of the transferor under this agreement.
(d) Assignment. None of the parties may assign any of its or his or
----------
her rights or delegate any of its or his or her duties under this agreement
without the prior written consent of the other parties.
(e) Notices. All notices and other communications hereunder shall be
-------
in writing and shall be deemed given if delivered personally, telecopied (which
is confirmed) or sent by an overnight courier service, such as Federal Express,
to the parties at the following addresses (or at such other address for a party
as shall be specified by like notice):
6
<PAGE>
(i) if to Parent or the Sub, to:
VS&A Communications Partners II, L.P.
350 Park Avenue
New York, New York 10022
Attn: Jeffrey T. Stevenson
President
with a copy to:
Proskauer Rose LLP
1585 Broadway
New York, New York 10036
Attn: Bertram A. Abrams, Esq.
(ii) if to the Stockholder, to:
Robert E. Craine, Jr.
5118 East 107th Place
Tulsa, Oklahoma 74137
with a copy to:
Conner & Winters
2400 First Place Tower
15 East 5th Street
Tulsa, Oklahoma 74103
Attn: Robert A. Curry, Esq.
(f) Severability. Whenever possible, each provision or portion of any
------------
provision of this agreement shall be interpreted in such manner as to be
effective and valid under applicable law but if any provision or portion of any
provision of this agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable law or rule in any jurisdiction, such
invalidity, illegality or unenforceability will not affect any other provision
or portion of any provision in such jurisdiction, and this agreement shall be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision or portion of any provision had never been
contained in this agreement.
(g) Specific Performance. The Stockholder acknowledges that the
--------------------
Company's business is of a special, unique and extraordinary character, and that
any default in the performance of Stockholder's obligations under sections 1
and 2 of this agreement could not be compensated for by damages. Accordingly,
if the Stockholder defaults in the performance of Stockholder's obligations
under section 1 or 2 of this agreement, Parent and the Sub shall be entitled, in
addition to any other remedies that either of them may have, to enforcement of
this agreement by a decree of specific performance requiring the Stockholder to
fulfill those obligations, without any bond or other security being required and
without the necessity of showing actual damages.
7
<PAGE>
(h) Remedies Cumulative. All rights, powers and remedies provided
-------------------
under this agreement or otherwise available in respect hereof at law or in
equity shall be cumulative and not alternative, and the exercise of any right,
power or remedy by any party shall not preclude the simultaneous or later
exercise by that party of any other right, power or remedy.
(i) No Waiver. The failure of any party hereto to exercise any right,
---------
power or remedy provided under this agreement or otherwise available at law or
in equity, or to insist upon compliance by any other party with its obligations
under this agreement, and any custom or practice of the parties at variance with
the terms of this agreement, shall not constitute a waiver by that party of its
right to exercise any such or other right, power or remedy or to demand such
compliance.
(j) No Third Party Beneficiaries. This agreement is not intended to
----------------------------
be for the benefit of, and shall not be enforceable by, any person or entity who
or which is not a party hereto.
(k) Governing Law. This agreement shall be governed and construed in
-------------
accordance with the laws of the State of Delaware, without giving effect to the
principles of conflicts of law thereof.
(l) Jurisdiction. The courts of the State of Delaware and the United
------------
States District Court for the Southern District of New York shall have
jurisdiction over the parties with respect to any dispute or controversy among
them arising under or in connection with this agreement and, by execution and
delivery of this agreement, each of the parties to this agreement submits to the
jurisdiction of those courts, including, but not limited to, the in personam and
-----------
subject matter jurisdiction of those courts, waives any objection to such
jurisdiction on the grounds of venue or forum non conveniens, the absence of in
----- --- ---------- --
personam or subject matter jurisdiction and any similar grounds, consents to
- --------
service of process by mail (in accordance with section 8(e)) or any other manner
permitted by law, and irrevocably agrees to be bound by any judgment rendered
thereby in connection with this agreement. These consents to jurisdiction shall
not be deemed to confer rights on any person other than the parties to this
agreement.
8
<PAGE>
(m) Headings. The descriptive headings in this agreement are for
--------
convenience of reference only and are not intended to be part of or to affect
the meaning or interpretation of this agreement.
VS&A COMMUNICATIONS PARTNERS II, L.P.
By: /s/ Jeffrey T. Stevenson
------------------------------------
Jeffrey T. Stevenson
President and General Partner
VS&A-T/SF, INC.
By: /s/ Jeffrey T. Stevenson
------------------------------------
Jeffrey T. Stevenson
President and General Partner
/s/ Robert E. Craine, Jr.
----------------------------------------
Robert E. Craine, Jr.
9
<PAGE>
SCHEDULE 1
<TABLE>
<CAPTION>
NUMBER OF SHARES NUMBER OF SHARES BENEFICIALLY
BENEFICIALLY OWNED OWNED EXCLUDED FROM THIS
SUBJECT TO THIS AGREEMENT (INDICATING
NAME OF STOCKHOLDER AGREEMENT CAPACITY OWNED)
- ------------------- ---------------- -----------------------
<S> <C> <C>
Robert E. Craine, Jr. 36,154 shares (i) 199.52196 shares in his account in
T/SF Communications Corporation
Savings and Retirement Plan
(ii) 58,500 shares attributable to
vested stock options
</TABLE>
<PAGE>
EXHIBIT (c)(5)
STOCKHOLDER AGREEMENT
---------------------
August 15, 1997
The parties to this agreement are VS&A Communications Partners II,
L.P., a Delaware limited partnership ("Parent"), VS&A-T/SF, Inc., a Delaware
corporation and a wholly owned subsidiary of Parent (the "Sub"), and Howard G.
Barnett, Jr. (the "Stockholder").
Concurrently with the execution and delivery of this agreement,
Parent, the Sub, and T/SF Communications Corporation, a Delaware corporation
(the "Company"), are entering into a Stock Purchase Agreement the ("Agreement")
which provides inter alia, for the Company's cash tender offer (the "Offer") to
----------
purchase all of the Company's outstanding shares of common stock, par value $.10
per share ("Common Stock") at a price of $40.25 per share. As a condition to
entering into the Agreement, Parent has required that the Stockholder agree to
the terms of this agreement and, as an inducement to Parent and the Sub to enter
into the Agreement and proceed with the Offer, the Stockholder has agreed to
those terms as set forth below. Capitalized terms used end not defined in this
agreement have the meanings ascribed to them in the Agreement.
It is therefore agreed as follows:
1. Tender of Shares.
----------------
(a) Tender. Not later than the fifteenth business day after
------
commencement of the Offer pursuant to Section 1.1 of the Agreement, the
Stockholder shall validly tender (or cause the record owner of his Shares to
validly tender), in accordance with the terms of the Offer, the number of shares
of the Common Stock set forth opposite the Stockholder's name on Schedule I to
this agreement, all of which are beneficially owned by the Stockholder, together
with any additional shares of the Common Stock that the Stockholder acquires
record or beneficial ownership of after execution of this agreement except for
additional shares acquired in any capacity excepted from this agreement pursuant
to Schedule I.
(b) Authorization to Disclose. The Stockholder authorizes the Company,
-------------------------
Parent and the Sub to publish and disclose in the documents relating to the
Offer the Stockholder's identity and ownership of the Company's common stock and
the nature of the Stockholder's commitments, arrangements and understandings
under this agreement.
(c) Conditions. The Stockholder acknowledges that the Company's
----------
obligation to accept and pay for the Shares in the Offer, including the Shares
owned of record or beneficially by the Stockholder, is subject to the term and
conditions of the Offer.
<PAGE>
2. The Stockholder's Responsibilities with Respect to the Merger.
-------------------------------------------------------------
(a) Voting Agreement. The Stockholder shall, at any meeting of the
----------------
holders of Common Stock, however called, or in connection with any written
consent of the holders of Common Stock, vote (or cause to be voted) the Shares,
then held of record or beneficially owned by the Stockholder against any
Acquisition Proposal and against any action or agreement that would impede,
frustrate, prevent or nullify this agreement, or result in a breach in any
respect of any covenant, representation or warranty or any other obligation or
agreement of the Company under the Agreement or which would result in any of the
conditions set forth in Annex A to the Agreement or set forth in Article VI of
the Agreement not being fulfilled. The Stockholder shall not be required to take
any action in accordance with this provision, however, to the extent that the
Stockholder shall have been advised by counsel in writing that in the opinion of
such counsel, the taking of any such action would violate the Stockholder's
fiduciary duties to the Company's stockholders under applicable law, either in
the Stockholder's capacity as a stockholder of the Company or in the
Stockholder's capacity as a member of the Company's Board of Directors.
(b) No Solicitation. Upon execution of this agreement the Stockholder
---------------
immediately shall cease any activities, discussions or negotiations with other
parties with respect to any Acquisition Proposal and shall not, directly or
indirectly, encourage, solicit, participate in or initiate discussions or
negotiations with or provide any information to, any corporation, partnership,
person or other entity or group (other than Parent and any of its affiliates or
representatives) concerning any Acquisition Proposal, except that the
Stockholder may negotiate and participate in negotiations with any entity or
group concerning an Acquisition Proposal to the extent that the Company is
permitted to do so under section 5.4 of the Agreement. The Stockholder shall
immediately communicate to Parent the terms of any proposal, discussion,
negotiation or inquiry the Stockholder receives in his capacity as a stockholder
of the Company (and the Stockholder shall furnish to Parent copies of any
written materials received by the Stockholder in his capacity as a stockholder
of the Company, in connection with any such proposal, discussion, negotiation or
inquiry) and the identity of the party making such proposal or inquiry.
(c) No Transfer of Shares or Inconsistent Arrangements. Except as
--------------------------------------------------
contemplated by the Agreement or this agreement, the Stockholder shall not (i)
transfer (which term shall include, without limitation, any sale, gift, pledge
or other disposition), or consent to any transfer of, any or all of the Shares
in the Company held by the Stockholder of record or beneficially, (ii) enter
into any contract, option or other agreement or understanding with respect to
any transfer of any or all of those Shares or any interest therein, (iii) grant
any proxy, power-of-attorney or other authorization in or with respect to those
Shares, (iv) deposit any of those Shares into a voting trust or enter into a
voting agreement or arrangement with respect to any of those Shares, or (v) take
any other action that would in any way restrict, limit or interfere with the
performance of the Stockholder's obligations under this agreement or the
transactions contemplated by this agreement or by the Agreement. The
Stockholder shall not request that the Company register the transfer (book-entry
or otherwise) of any certificate or uncertificated interest representing any of
the Shares in the Company owned of record or beneficially by the Stockholder,
unless such transfer is made in compliance with this agreement.
2
<PAGE>
(d) Company Options. If the Stockholder holds Options to acquire
---------------
shares of Company Common Stock, Stockholder shall, if requested by the Company,
consent to the cancellation or substitution of those options in accordance with
the terms of the Agreement and shall execute all appropriate documentation in
connection with such cancellation or substitution.
(e) Reasonable Efforts. Subject to the terms and conditions of this
------------------
agreement, each of the parties to this agreement shall use reasonable efforts to
take or cause to be taken all such action as may be necessary, proper or
advisable under applicable laws and regulations to consummate the transactions
contemplated by this agreement and the Agreement. Each party shall promptly
consult with the other and provide any necessary information and material with
respect to all filings made by Stockholder with any Governmental entity in
connection with this agreement and the Agreement and the transactions
contemplated by this agreement and the Agreement.
(f) Further Assurances. Each party shall from time to time, at the
------------------
other party's request and without further consideration, execute and deliver
such additional documents and take such further lawful action as may be
necessary or desirable to consummate, in the most expeditious manner
practicable, the transactions contemplated by this agreement.
3. Profit on Disposition of Shares Other than Pursuant to the Offer.
----------------------------------------------------------------
If prior to the time of acceptance for payment of the shares pursuant
to the Offer (a) the Company's board of directors withdraws or modifies its
approval or recommendation of the Offer or the Agreement, approves or recommends
a Superior Proposal, or enters into an agreement with respect to a Superior
Proposal, and (b) within 12 months thereafter there is a Disposition of any or
all of the shares of the Company owned by the Stockholder either pursuant to the
Superior Proposal or pursuant to a different Acquisition Proposal for which an
agreement was entered into within six months thereafter, then, promptly upon
receipt by the Stockholder of the proceeds of the Disposition, the Stockholder
shall pay to Parent an amount equal to the first $1.50 per Share of additional
consideration received in connection with the Disposition and 50% of any
additional consideration in excess of $1.50 per Share received in connection
with the Disposition (including the fair market value of any property) as
compared to the consideration that would have been received pursuant to the
Offer. If all or any portion of the consideration received in connection with
the Disposition is other than cash, payment to Parent shall be made in kind or,
at the Stockholder's election, in cash in an amount equal to the fair market
value of the consideration other than cash. As used in this provision, the term
"Disposition" means any sale, exchange or other disposition of shares, including
any disposition in connection with any tender offer, merger, consolidation or
liquidation.
4. Representations and Warranties of the Stockholder. The Stockholder
-------------------------------------------------
represents and warrants to Parent and the Sub as follows:
(a) Power; Binding Agreement. The Stockholder has the legal capacity,
------------------------
power and authority to enter into and perform all of the Stockholder's
obligations under
3
<PAGE>
this agreement. The execution, delivery and performance of this agreement by the
Stockholder will not violate any other agreement to which the Stockholder is a
party or by which the Stockholder is bound, including, but not limited to, any
voting agreement, proxy arrangement, pledge agreement, shareholders agreement or
voting trust. This agreement has been duly and validly executed and delivered by
the Stockholder and constitutes a valid and binding obligation of the
Stockholder, enforceable against the Stockholder in accordance with its terms.
There is no beneficiary or holder of a voting trust certificate or other
interest of any trust of which the Stockholder is a trustee whose consent is
required for the execution and delivery of this agreement or the consummation by
the Stockholder of the transactions contemplated by this agreement.
(b) No Conflicts. Except for filings under the HSR Act, the Exchange
------------
Act and as set forth in Section 3.4 of the Disclosure Schedule to the Agreement,
(i) no filing with, and no permit, authorization, consent or approval of, any
Governmental Entity is required for the execution and delivery of this agreement
by the Stockholder and the consummation by the Stockholder of the transactions
contemplated by this agreement and (ii) the execution, delivery and performance
of this agreement by the Stockholder will not violate any agreement or other
obligation to which the Stockholder is a party or by which the Stockholder or
any of the Stockholder's properties or assets is bound or violate any order,
writ, injunction, decree, judgment, order, statute, rule or regulation
applicable to the Stockholder or any of the Stockholder's properties or assets.
(c) Ownership of Shares. The Stockholder is the record and beneficial
-------------------
owner of the number of shares of the Common Stock subject to this agreement set
forth opposite the Stockholder's name on Schedule I to this agreement, except as
set forth on Schedule I, those shares constitute all of the shares of the Common
Stock owned of record or beneficially by the Stockholder, and upon tender of
those shares to the Company and the purchase of the shares by the Company
pursuant to the Offer, the Company shall acquire valid title to those shares,
free and clear of any claims, liens, encumbrances, proxies, voting trusts or
agreements, understandings or arrangements or any other rights (collectively,
"Encumbrances"). Subject to applicable securities laws and the terms of this
agreement, the Stockholder has sole voting power and sole power to issue
instructions with respect to the matters set forth in sections 1, 2 and 3 of
this agreement, sole power of disposition, sole power of conversion, sole power
to demand appraisal rights, and sole power to agree to all of the matters set
forth in this agreement, in each case with respect to all of the shares in the
Company beneficially owned by the Stockholder, with no limitations,
qualifications or restrictions on those rights.
(d) No Encumbrance. Except as permitted by this agreement, the shares
--------------
in the Company owned by the Stockholder of record or beneficially, and the
certificates representing those shares, are now, and at all times prior to the
purchase of those shares pursuant to the Offer will be, held by the Stockholder,
or by a nominee or custodian for the benefit of the Stockholder, free and clear
of all Encumbrances except for those arising under this agreement.
(e) No Finder's Fees. Except as set forth in Section 3.18 of the
----------------
Agreement, no broker, investment banker, financial advisor or other person is
entitled to any broker's, finder's, financial adviser's or other similar fee or
commission in connection with the transactions contemplated by this agreement
based upon arrangements made by or on
4
<PAGE>
behalf of the Stockholder.
5. Representations and Warranties of Parent and the Sub. Parent and the
----------------------------------------------------
Sub jointly and severally represent and warrant to the Stockholder as follows:
(a) Power: Binding Agreement. Each of Parent and the Sub has the
-------------------------
corporate power and authority to enter into and perform all of its obligations
under this agreement and the execution, delivery and performance of this
agreement by Parent and the Sub have been duly authorized by all necessary
partnership or corporate action. The execution, delivery and performance of
this agreement by each of Parent and the Sub will not violate any other
agreement to which either of them is a party or by which either of them is
bound. This agreement has been duly and validly executed and delivered by each
of Parent and the Sub and constitutes a valid and binding agreement of each of
Parent and the Sub, enforceable against each of them in accordance with its
terms.
(b) No Conflicts. Except for filings under the HSR Act and the
------------
Exchange Act, (i) no filing with, and no permit, authorization, consent or
approval of, any Governmental Entity is necessary for the execution of this
agreement by each of Parent and the Sub and the consummation by each of Parent
and the Sub of the transactions contemplated hereby and (ii) the execution,
delivery and performance of this agreement by each of Parent and the Sub will
not (A) conflict with or result in any breach of any organizational documents
applicable to either Parent or the Sub, (B) result in a violation or breach of,
or constitute (with or without notice or lapse of time or both) a default (or
give rise to any third party right of termination, cancellation, material
modification or acceleration) under, any of the terms, conditions or provisions
of any note, loan agreement, bond, mortgage, indenture, license, contract,
commitment, arrangement, understanding, agreement or other instrument or
obligation of any kind to which either Parent or the Sub is a party or by which
either Parent or the Sub or any of their respective properties or assets is
bound, or (C) violate any order, writ, injunction, decree, judgment, order,
statute, rule or regulation applicable to either Parent or the Sub or any of
their respective properties or assets.
6. Termination.
-----------
Except as provided in Section 3 of this agreement, this agreement
shall terminate upon the termination of the Agreement in accordance with its
terms. The termination of this agreement pursuant to this provision shall not
relieve any party of liability for any prior breach of its or his or her
obligations under this agreement.
7. Definitions.
-----------
(a) Shares. Any reference in this agreement to the shares owned of
------
record or beneficially by the Stockholder shall be deemed to include shares
hereafter acquired by the Stockholder upon any stock dividend or distribution or
any change in the Company's Common Stock by reason of any split-up,
recapitalization, combination, exchange of shares or similar corporate action.
(b) Beneficial Ownership. For the purpose of this agreement,
--------------------
beneficial ownership with respect to any shares means beneficial ownership as
determined
5
<PAGE>
pursuant to Rule 13d-3 under the Securities Exchange Act of 1934, as amended,
including pursuant to any agreement, arrangement or understanding, whether or
not in writing.
(c) Agreement. Any reference to the "Agreement" refers to the
---------
Agreement executed on this date as it may hereafter be amended from time to
time.
8. Miscellaneous.
-------------
(a) Reliance by Parent. The Stockholder acknowledges that Stockholder
------------------
understands that Parent is entering into, and causing Sub to enter into, the
Agreement in reliance upon the Stockholder's execution, delivery and performance
of this agreement.
(b) Entire Agreement; No Oral Change. This agreement contains a
---------------------------------
compete statement of all of the arrangements among the parties with respect to
its subject matter, supersedes all prior agreements and understandings, written
and oral, among the parties with respect to that subject matter, and cannot be
changed or terminated except by an agreement in writing signed by all parties.
(c) Binding Agreement. This agreement and the obligations under this
-----------------
agreement shall attach to the shares owned of record and beneficially by the
Stockholder and shall be binding upon any such person or entity to which legal
or beneficial ownership of those shares shall pass, whether by operation of law
or otherwise, including, but not limited to, the Stockholder's heirs, guardians,
administrators or successors. The transferee of any shares shall remain liable
for the performance of all obligations of the transferor under this agreement.
(d) Assignment. None of the parties may assign any of its or his or
----------
her rights or delegate any of its or his or her duties under this agreement
without the prior written consent of the other parties.
(e) Notices. All notices and other communications hereunder shall be
-------
in writing and shall be deemed given if delivered personally, telecopied (which
is confirmed) or sent by an overnight courier service, such as Federal Express,
to the parties at the following addresses (or at such other address for a party
as shall be specified by like notice):
6
<PAGE>
(i) if to Parent or the Sub, to:
VS&A Communications Partners II, L.P.
350 Park Avenue
New York, New York 10022
Attn: Jeffrey T. Stevenson
President
with a copy to:
Proskauer Rose LLP
1585 Broadway
New York, New York 10036
Attn: Bertram A. Abrams, Esq.
(ii) if to the Stockholder, to:
Howard G. Barnett, Jr.
6742 South Evanston
Tulsa, Oklahoma 74136
with a copy to:
Conner & Winters
2400 First Place Tower
15 East 5th Street
Tulsa, Oklahoma 74103
Attn: Robert A. Curry, Esq.
(f) Severability. Whenever possible, each provision or portion of any
------------
provision of this agreement shall be interpreted in such manner as to be
effective and valid under applicable law but if any provision or portion of any
provision of this agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable law or rule in any jurisdiction, such
invalidity, illegality or unenforceability will not affect any other provision
or portion of any provision in such jurisdiction, and this agreement shall be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision or portion of any provision had never been
contained in this agreement.
(g) Specific Performance. The Stockholder acknowledges that the
--------------------
Company's business is of a special, unique and extraordinary character, and that
any default in the performance of Stockholder's obligations under sections 1
and 2 of this agreement could not be compensated for by damages. Accordingly,
if the Stockholder defaults in the performance of Stockholder's obligations
under section 1 or 2 of this agreement, Parent and the Sub shall be entitled, in
addition to any other remedies that either of them may have, to enforcement of
this agreement by a decree of specific performance requiring the Stockholder to
fulfill those obligations, without any bond or other security being required and
without the necessity of showing actual damages.
7
<PAGE>
(h) Remedies Cumulative. All rights, powers and remedies provided
-------------------
under this agreement or otherwise available in respect hereof at law or in
equity shall be cumulative and not alternative, and the exercise of any right,
power or remedy by any party shall not preclude the simultaneous or later
exercise by that party of any other right, power or remedy.
(i) No Waiver. The failure of any party hereto to exercise any right,
---------
power or remedy provided under this agreement or otherwise available at law or
in equity, or to insist upon compliance by any other party with its obligations
under this agreement, and any custom or practice of the parties at variance with
the terms of this agreement, shall not constitute a waiver by that party of its
right to exercise any such or other right, power or remedy or to demand such
compliance.
(j) No Third Party Beneficiaries. This agreement is not intended to
----------------------------
be for the benefit of, and shall not be enforceable by, any person or entity who
or which is not a party hereto.
(k) Governing Law. This agreement shall be governed and construed in
-------------
accordance with the laws of the State of Delaware, without giving effect to the
principles of conflicts of law thereof.
(l) Jurisdiction. The courts of the State of Delaware and the United
------------
States District Court for the Southern District of New York shall have
jurisdiction over the parties with respect to any dispute or controversy among
them arising under or in connection with this agreement and, by execution and
delivery of this agreement, each of the parties to this agreement submits to the
jurisdiction of those courts, including, but not limited to, the in personam and
-----------
subject matter jurisdiction of those courts, waives any objection to such
jurisdiction on the grounds of venue or forum non conveniens, the absence of in
----- --- ---------- --
personam or subject matter jurisdiction and any similar grounds, consents to
- --------
service of process by mail (in accordance with section 8(e)) or any other manner
permitted by law, and irrevocably agrees to be bound by any judgment rendered
thereby in connection with this agreement. These consents to jurisdiction shall
not be deemed to confer rights on any person other than the parties to this
agreement.
8
<PAGE>
(m) Headings. The descriptive headings in this agreement are for
--------
convenience of reference only and are not intended to be part of or to affect
the meaning or interpretation of this agreement.
VS&A COMMUNICATIONS PARTNERS II, L.P.
By: /s/ Jeffrey T. Stevenson
------------------------------------
Jeffrey T. Stevenson
President and General Partner
VS&A-T/SF, INC.
By: /s/ Jeffrey T. Stevenson
------------------------------------
Jeffrey T. Stevenson
President and General Partner
/s/ Howard G. Barnett, Jr.
----------------------------------------
Howard G. Barnett, Jr.
9
<PAGE>
SCHEDULE 1
<TABLE>
<CAPTION>
NUMBER OF SHARES NUMBER OF SHARES BENEFICIALLY
BENEFICIALLY OWNED OWNED EXCLUDED FROM THIS
SUBJECT TO THIS AGREEMENT (INDICATING
NAME OF STOCKHOLDER AGREEMENT CAPACITY OWNED)
- ------------------- --------------- ------------------------
<S> <C> <C>
Howard G. Barnett, Jr. 175,346 shares A. 105,000 shares attributable to
vested stock options
B. 12,871 shares owned by the T/SF
Communications Corporation
Savings and Retirement Plan
(401(k)) of which Mr. Barnett is
Trustee (including 189.51194
shares allocated to Mr. Barnett's
own account)
C. See separate Stockholders
Agreement for:
(i) Howard G. Barnett, Jr., and
Florence Lloyd Jones Barnett, as
Co-trustees of the Revocable Inter
Vivos Trust of Florence Lloyd
Jones Barnett
(ii) Howard G. Barnett and Howard G.
Barnett, Jr., as Co-trustees of the
Revocable Inter Vivos Trust of
Howard G. Barnett
(iii) Billie T. Barnett, wife of
Howard G. Barnett, Jr.
</TABLE>
<PAGE>
EXHIBIT (c)(6)
STOCKHOLDER AGREEMENT
---------------------
August 15, 1997
The parties to this agreement are VS&A Communications Partners II,
L.P., a Delaware limited partnership ("Parent"), VS&A-T/SF, Inc., a Delaware
corporation and a wholly owned subsidiary of Parent (the "Sub"), and Howard G.
Barnett, Sr., and Howard G. Barnett, Jr., as Co-Trustees of the Revocable Inter
Vivos Trust of Howard G. Barnett, Sr. (the "Stockholder").
Concurrently with the execution and delivery of this agreement,
Parent, the Sub, and T/SF Communications Corporation, a Delaware corporation
(the "Company"), are entering into a Stock Purchase Agreement the ("Agreement")
which provides inter alia, for the Company's cash tender offer (the "Offer") to
----------
purchase all of the Company's outstanding shares of common stock, par value $.10
per share ("Common Stock") at a price of $40.25 per share. As a condition to
entering into the Agreement, Parent has required that the Stockholder agree to
the terms of this agreement and, as an inducement to Parent and the Sub to enter
into the Agreement and proceed with the Offer, the Stockholder has agreed to
those terms as set forth below. Capitalized terms used end not defined in this
agreement have the meanings ascribed to them in the Agreement.
It is therefore agreed as follows:
1. Tender of Shares.
----------------
(a) Tender. Not later than the fifteenth business day after
------
commencement of the Offer pursuant to Section 1.1 of the Agreement, the
Stockholder shall validly tender (or cause the record owner of his Shares to
validly tender), in accordance with the terms of the Offer, the number of shares
of the Common Stock set forth opposite the Stockholder's name on Schedule I to
this agreement, all of which are beneficially owned by the Stockholder, together
with any additional shares of the Common Stock that the Stockholder acquires
record or beneficial ownership of after execution of this agreement except for
additional shares acquired in any capacity excepted from this agreement pursuant
to Schedule I.
(b) Authorization to Disclose. The Stockholder authorizes the Company,
-------------------------
Parent and the Sub to publish and disclose in the documents relating to the
Offer the Stockholder's identity and ownership of the Company's common stock and
the nature of the Stockholder's commitments, arrangements and understandings
under this agreement.
(c) Conditions. The Stockholder acknowledges that the Company's
----------
obligation to accept and pay for the Shares in the Offer, including the Shares
owned of record or beneficially by the Stockholder, is subject to the term and
conditions of the Offer.
<PAGE>
2. The Stockholder's Responsibilities with Respect to the Merger.
-------------------------------------------------------------
(a) Voting Agreement. The Stockholder shall, at any meeting of the
----------------
holders of Common Stock, however called, or in connection with any written
consent of the holders of Common Stock, vote (or cause to be voted) the Shares,
then held of record or beneficially owned by the Stockholder against any
Acquisition Proposal and against any action or agreement that would impede,
frustrate, prevent or nullify this agreement, or result in a breach in any
respect of any covenant, representation or warranty or any other obligation or
agreement of the Company under the Agreement or which would result in any of the
conditions set forth in Annex A to the Agreement or set forth in Article VI of
the Agreement not being fulfilled. The Stockholder shall not be required to
take any action in accordance with this provision, however, to the extent that
the Stockholder shall have been advised by counsel in writing that in the
opinion of such counsel, the taking of any such action would violate the
Stockholder's fiduciary duties to the Company's stockholders under applicable
law, either in the Stockholder's capacity as a stockholder of the Company or in
the Stockholder's capacity as a member of the Company's Board of Directors.
(b) No Solicitation. Upon execution of this agreement the Stockholder
---------------
immediately shall cease any activities, discussions or negotiations with other
parties with respect to any Acquisition Proposal and shall not, directly or
indirectly, encourage, solicit, participate in or initiate discussions or
negotiations with or provide any information to, any corporation, partnership,
person or other entity or group (other than Parent and any of its affiliates or
representatives) concerning any Acquisition Proposal, except that the
Stockholder may negotiate and participate in negotiations with any entity or
group concerning an Acquisition Proposal to the extent that the Company is
permitted to do so under section 5.4 of the Agreement. The Stockholder shall
immediately communicate to Parent the terms of any proposal, discussion,
negotiation or inquiry the Stockholder receives in his capacity as a stockholder
of the Company (and the Stockholder shall furnish to Parent copies of any
written materials received by the Stockholder in his capacity as a stockholder
of the Company, in connection with any such proposal, discussion, negotiation or
inquiry) and the identity of the party making such proposal or inquiry.
(c) No Transfer of Shares or Inconsistent Arrangements. Except as
--------------------------------------------------
contemplated by the Agreement or this agreement, the Stockholder shall not (i)
transfer (which term shall include, without limitation, any sale, gift, pledge
or other disposition), or consent to any transfer of, any or all of the Shares
in the Company held by the Stockholder of record or beneficially, (ii) enter
into any contract, option or other agreement or understanding with respect to
any transfer of any or all of those Shares or any interest therein, (iii) grant
any proxy, power-of-attorney or other authorization in or with respect to those
Shares, (iv) deposit any of those Shares into a voting trust or enter into a
voting agreement or arrangement with respect to any of those Shares, or (v) take
any other action that would in any way restrict, limit or interfere with the
performance of the Stockholder's obligations under this agreement or the
transactions contemplated by this agreement or by the Agreement. The Stockholder
shall not request that the Company register the transfer (book-entry or
otherwise) of any certificate or uncertificated interest representing any of the
Shares in the Company owned of record or beneficially by the Stockholder, unless
such transfer is made in compliance with this agreement.
2
<PAGE>
(d) Company Options. If the Stockholder holds Options to acquire
---------------
shares of Company Common Stock, Stockholder shall, if requested by the Company,
consent to the cancellation or substitution of those options in accordance with
the terms of the Agreement and shall execute all appropriate documentation in
connection with such cancellation or substitution.
(e) Reasonable Efforts. Subject to the terms and conditions of this
------------------
agreement, each of the parties to this agreement shall use reasonable efforts to
take or cause to be taken all such action as may be necessary, proper or
advisable under applicable laws and regulations to consummate the transactions
contemplated by this agreement and the Agreement. Each party shall promptly
consult with the other and provide any necessary information and material with
respect to all filings made by Stockholder with any Governmental entity in
connection with this agreement and the Agreement and the transactions
contemplated by this agreement and the Agreement.
(f) Further Assurances. Each party shall from time to time, at the
------------------
other party's request and without further consideration, execute and deliver
such additional documents and take such further lawful action as may be
necessary or desirable to consummate, in the most expeditious manner
practicable, the transactions contemplated by this agreement.
3. Profit on Disposition of Shares Other than Pursuant to the Offer.
----------------------------------------------------------------
If prior to the time of acceptance for payment of the shares pursuant
to the Offer (a) the Company's board of directors withdraws or modifies its
approval or recommendation of the Offer or the Agreement, approves or recommends
a Superior Proposal, or enters into an agreement with respect to a Superior
Proposal, and (b) within 12 months thereafter there is a Disposition of any or
all of the shares of the Company owned by the Stockholder either pursuant to the
Superior Proposal or pursuant to a different Acquisition Proposal for which an
agreement was entered into within six months thereafter, then, promptly upon
receipt by the Stockholder of the proceeds of the Disposition, the Stockholder
shall pay to Parent an amount equal to the first $1.50 per Share of additional
consideration received in connection with the Disposition and 50% of any
additional consideration in excess of $1.50 per Share received in connection
with the Disposition (including the fair market value of any property) as
compared to the consideration that would have been received pursuant to the
Offer. If all or any portion of the consideration received in connection with
the Disposition is other than cash, payment to Parent shall be made in kind or,
at the Stockholder's election, in cash in an amount equal to the fair market
value of the consideration other than cash. As used in this provision, the term
"Disposition" means any sale, exchange or other disposition of shares, including
any disposition in connection with any tender offer, merger, consolidation or
liquidation.
4. Representations and Warranties of the Stockholder. The Stockholder
-------------------------------------------------
represents and warrants to Parent and the Sub as follows:
(a) Power; Binding Agreement. The Stockholder has the legal capacity,
------------------------
power and authority to enter into and perform all of the Stockholder's
obligations under
3
<PAGE>
this agreement. The execution, delivery and performance of this agreement by the
Stockholder will not violate any other agreement to which the Stockholder is a
party or by which the Stockholder is bound, including, but not limited to, any
voting agreement, proxy arrangement, pledge agreement, shareholders agreement or
voting trust. This agreement has been duly and validly executed and delivered by
the Stockholder and constitutes a valid and binding obligation of the
Stockholder, enforceable against the Stockholder in accordance with its terms.
There is no beneficiary or holder of a voting trust certificate or other
interest of any trust of which the Stockholder is a trustee whose consent is
required for the execution and delivery of this agreement or the consummation by
the Stockholder of the transactions contemplated by this agreement.
(b) No Conflicts. Except for filings under the HSR Act, the Exchange
------------
Act and as set forth in Section 3.4 of the Disclosure Schedule to the Agreement,
(i) no filing with, and no permit, authorization, consent or approval of, any
Governmental Entity is required for the execution and delivery of this agreement
by the Stockholder and the consummation by the Stockholder of the transactions
contemplated by this agreement and (ii) the execution, delivery and performance
of this agreement by the Stockholder will not violate any agreement or other
obligation to which the Stockholder is a party or by which the Stockholder or
any of the Stockholder's properties or assets is bound or violate any order,
writ, injunction, decree, judgment, order, statute, rule or regulation
applicable to the Stockholder or any of the Stockholder's properties or assets.
(c) Ownership of Shares. The Stockholder is the record and beneficial
-------------------
owner of the number of shares of the Common Stock subject to this agreement set
forth opposite the Stockholder's name on Schedule I to this agreement, except as
set forth on Schedule I, those shares constitute all of the shares of the Common
Stock owned of record or beneficially by the Stockholder, and upon tender of
those shares to the Company and the purchase of the shares by the Company
pursuant to the Offer, the Company shall acquire valid title to those shares,
free and clear of any claims, liens, encumbrances, proxies, voting trusts or
agreements, understandings or arrangements or any other rights (collectively,
"Encumbrances"). Subject to applicable securities laws and the terms of this
agreement, the Stockholder has sole voting power and sole power to issue
instructions with respect to the matters set forth in sections 1,2 and 3 of this
agreement, sole power of disposition, sole power of conversion, sole power to
demand appraisal rights, and sole power to agree to all of the matters set forth
in this agreement, in each case with respect to all of the shares in the Company
beneficially owned by the Stockholder, with no limitations, qualifications or
restrictions on those rights.
(d) No Encumbrance. Except as permitted by this agreement, the shares
--------------
in the Company owned by the Stockholder of record or beneficially, and the
certificates representing those shares, are now, and at all times prior to the
purchase of those shares pursuant to the Offer will be, held by the Stockholder,
or by a nominee or custodian for the benefit of the Stockholder, free and clear
of all Encumbrances except for those arising under this agreement.
(e) No Finder's Fees. Except as set forth in Section 3.18 of the
----------------
Agreement, no broker, investment banker, financial advisor or other person is
entitled to any broker's, finder's, financial adviser's or other similar fee or
commission in connection with the transactions contemplated by this agreement
based upon arrangements made by
4
<PAGE>
or on behalf of the Stockholder.
5. Representations and Warranties of Parent and the Sub. Parent and the
----------------------------------------------------
Sub jointly and severally represent and warrant to the Stockholder as follows:
(a) Power: Binding Agreement. Each of Parent and the Sub has the
-------------------------
corporate power and authority to enter into and perform all of its obligations
under this agreement and the execution, delivery and performance of this
agreement by Parent and the Sub have been duly authorized by all necessary
partnership or corporate action. The execution, delivery and performance of
this agreement by each of Parent and the Sub will not violate any other
agreement to which either of them is a party or by which either of them is
bound. This agreement has been duly and validly executed and delivered by each
of Parent and the Sub and constitutes a valid and binding agreement of each of
Parent and the Sub, enforceable against each of them in accordance with its
terms.
(b) No Conflicts. Except for filings under the HSR Act and the
------------
Exchange Act, (i) no filing with, and no permit, authorization, consent or
approval of, any Governmental Entity is necessary for the execution of this
agreement by each of Parent and the Sub and the consummation by each of Parent
and the Sub of the transactions contemplated hereby and (ii) the execution,
delivery and performance of this agreement by each of Parent and the Sub will
not (A) conflict with or result in any breach of any organizational documents
applicable to either Parent or the Sub, (B) result in a violation or breach of,
or constitute (with or without notice or lapse of time or both) a default (or
give rise to any third party right of termination, cancellation, material
modification or acceleration) under, any of the terms, conditions or provisions
of any note, loan agreement, bond, mortgage, indenture, license, contract,
commitment, arrangement, understanding, agreement or other instrument or
obligation of any kind to which either Parent or the Sub is a party or by which
either Parent or the Sub or any of their respective properties or assets is
bound, or (C) violate any order, writ, injunction, decree, judgment, order,
statute, rule or regulation applicable to either Parent or the Sub or any of
their respective properties or assets.
6. Termination.
-----------
Except as provided in Section 3 of this agreement, this agreement
shall terminate upon the termination of the Agreement in accordance with its
terms. The termination of this agreement pursuant to this provision shall not
relieve any party of liability for any prior breach of its or his or her
obligations under this agreement.
5
<PAGE>
7. Definitions.
-----------
(a) Shares. Any reference in this agreement to the shares owned of
------
record or beneficially by the Stockholder shall be deemed to include shares
hereafter acquired by the Stockholder upon any stock dividend or distribution or
any change in the Company's Common Stock by reason of any split-up,
recapitalization, combination, exchange of shares or similar corporate action.
(b) Beneficial Ownership. For the purpose of this agreement,
--------------------
beneficial ownership with respect to any shares means beneficial ownership as
determined pursuant to Rule 13d-3 under the Securities Exchange Act of 1934, as
amended, including pursuant to any agreement, arrangement or understanding,
whether or not in writing.
(c) Agreement. Any reference to the "Agreement" refers to the
---------
Agreement executed on this date as it may hereafter be amended from time to
time.
8. Miscellaneous.
-------------
(a) Reliance by Parent. The Stockholder acknowledges that Stockholder
------------------
understands that Parent is entering into, and causing Sub to enter into, the
Agreement in reliance upon the Stockholder's execution, delivery and performance
of this agreement.
(b) Entire Agreement; No Oral Change. This agreement contains a
---------------------------------
compete statement of all of the arrangements among the parties with respect to
its subject matter, supersedes all prior agreements and understandings, written
and oral, among the parties with respect to that subject matter, and cannot be
changed or terminated except by an agreement in writing signed by all parties.
(c) Binding Agreement. This agreement and the obligations under this
-----------------
agreement shall attach to the shares owned of record and beneficially by the
Stockholder and shall be binding upon any such person or entity to which legal
or beneficial ownership of those shares shall pass, whether by operation of law
or otherwise, including, but not limited to, the Stockholder's heirs, guardians,
administrators or successors. The transferee of any shares shall remain liable
for the performance of all obligations of the transferor under this agreement.
(d) Assignment. None of the parties may assign any of its or his or
----------
her rights or delegate any of its or his or her duties under this agreement
without the prior written consent of the other parties.
(e) Notices. All notices and other communications hereunder shall be
-------
in writing and shall be deemed given if delivered personally, telecopied (which
is confirmed) or sent by an overnight courier service, such as Federal Express,
to the parties at the following addresses (or at such other address for a party
as shall be specified by like notice):
6
<PAGE>
(i) if to Parent or the Sub, to:
VS&A Communications Partners II, L.P.
350 Park Avenue
New York, New York 10022
Attn: Jeffrey T. Stevenson
President
with a copy to:
Proskauer Rose LLP
1585 Broadway
New York, New York 10036
Attn: Bertram A. Abrams, Esq.
(ii) if to the Stockholder, to:
Howard G. Barnett, Sr., and Howard G. Barnett, Jr.
as Co-Trustees of the Revocable Inter Vivos
Trust of Howard G. Barnett, Sr.
2619 East 37th Street
Tulsa, Oklahoma 74105
with a copy to:
Conner & Winters
2400 First Place Tower
15 East 5th Street
Tulsa, Oklahoma 74103
Attn: Robert A. Curry, Esq.
(f) Severability. Whenever possible, each provision or portion of any
------------
provision of this agreement shall be interpreted in such manner as to be
effective and valid under applicable law but if any provision or portion of any
provision of this agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable law or rule in any jurisdiction, such
invalidity, illegality or unenforceability will not affect any other provision
or portion of any provision in such jurisdiction, and this agreement shall be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision or portion of any provision had never been
contained in this agreement.
(g) Specific Performance. The Stockholder acknowledges that the
--------------------
Company's business is of a special, unique and extraordinary character, and that
any default in the performance of Stockholder's obligations under sections 1 and
2 of this agreement could not be compensated for by damages. Accordingly, if the
Stockholder defaults in the performance of Stockholder's obligations under
section 1 or 2 of this agreement, Parent and the Sub shall be entitled, in
addition to any other remedies that either of them may have, to enforcement of
this agreement by a decree of specific performance requiring the Stockholder to
fulfill those obligations, without any bond or other security being required and
without the necessity of showing actual damages.
(h) Remedies Cumulative. All rights, powers and remedies provided
-------------------
7
<PAGE>
under this agreement or otherwise available in respect hereof at law or in
equity shall be cumulative and not alternative, and the exercise of any right,
power or remedy by any party shall not preclude the simultaneous or later
exercise by that party of any other right, power or remedy.
(i) No Waiver. The failure of any party hereto to exercise any right,
---------
power or remedy provided under this agreement or otherwise available at law or
in equity, or to insist upon compliance by any other party with its obligations
under this agreement, and any custom or practice of the parties at variance with
the terms of this agreement, shall not constitute a waiver by that party of its
right to exercise any such or other right, power or remedy or to demand such
compliance.
(j) No Third Party Beneficiaries. This agreement is not intended to
----------------------------
be for the benefit of, and shall not be enforceable by, any person or entity who
or which is not a party hereto.
(k) Governing Law. This agreement shall be governed and construed in
-------------
accordance with the laws of the State of Delaware, without giving effect to the
principles of conflicts of law thereof.
(l) Jurisdiction. The courts of the State of Delaware and the United
------------
States District Court for the Southern District of New York shall have
jurisdiction over the parties with respect to any dispute or controversy among
them arising under or in connection with this agreement and, by execution and
delivery of this agreement, each of the parties to this agreement submits to the
jurisdiction of those courts, including, but not limited to, the in personam and
-----------
subject matter jurisdiction of those courts, waives any objection to such
jurisdiction on the grounds of venue or forum non conveniens, the absence of in
----- --- ---------- --
personam or subject matter jurisdiction and any similar grounds, consents to
- --------
service of process by mail (in accordance with section 8(e)) or any other manner
permitted by law, and irrevocably agrees to be bound by any judgment rendered
thereby in connection with this agreement. These consents to jurisdiction shall
not be deemed to confer rights on any person other than the parties to this
agreement.
8
<PAGE>
(m) Headings. The descriptive headings in this agreement are for
--------
convenience of reference only and are not intended to be part of or to affect
the meaning or interpretation of this agreement.
VS&A COMMUNICATIONS PARTNERS II, L.P.
By: /s/ Jeffrey T. Stevenson
------------------------------------
Jeffrey T. Stevenson
President and General Partner
VS&A-T/SF, INC.
By: /s/ Jeffrey T. Stevenson
------------------------------------
Jeffrey T. Stevenson
President and General Partner
HOWARD G. BARNETT, SR. AND HOWARD G.
BARNETT, JR. AS CO-TRUSTEES OF THE
REVOCABLE INTER VIVOS TRUST OF
HOWARD G. BARNETT, SR.
/s/ Howard G. Barnett Sr.
----------------------------------------
Howard G. Barnett, Sr.
/s/ Howard G. Barnett, Jr.
----------------------------------------
Howard G. Barnett, Jr.
9
<PAGE>
SCHEDULE 1
<TABLE>
<CAPTION>
NUMBER OF SHARES NUMBER OF SHARES BENEFICIALLY
BENEFICIALLY OWNED OWNED EXCLUDED FROM THIS
SUBJECT TO THIS AGREEMENT (INDICATING
NAME OF STOCKHOLDER AGREEMENT CAPACITY OWNED)
- ------------------- -------------- ------------------------
<S> <C> <C>
Howard G. Barnett, Sr., and 2,510 shares See separate Stockholder
Howard G. Barnett, Jr., as Agreements for:
Co-trustees of the Revocable
Inter Vivos Trust of (i) Florence Lloyd Jones Barnett and
trustees of The Florence L. J. and
Howard G. Barnett Foundation
(ii) Howard G. Barnett, Jr.
(iii) Florence Lloyd Jones Barnett and
Howard G. Barnett, Jr., as Co-
trustees of the Revocable Inter
Vivos Trust of Florence Lloyd
Jones Barnett
(iv) Florence Lloyd Jones Barnett, as
Trustee of the Florence Lloyd
Jones Barnett Charitable
Remainder Unitrust
</TABLE>
<PAGE>
EXHIBIT (c)(7)
STOCKHOLDER AGREEMENT
---------------------
August 15, 1997
The parties to this agreement are VS&A Communications Partners II,
L.P., a Delaware limited partnership ("Parent"), VS&A-T/SF, Inc., a Delaware
corporation and a wholly owned subsidiary of Parent (the "Sub"), and Florence
Lloyd Jones Barnett and Howard G. Barnett, Jr., as Co-Trustees of the Revocable
Inter Vivos Trust of Florence Lloyd Jones Barnett (the "Stockholder").
Concurrently with the execution and delivery of this agreement,
Parent, the Sub, and T/SF Communications Corporation, a Delaware corporation
(the "Company"), are entering into a Stock Purchase Agreement the ("Agreement")
which provides inter alia, for the Company's cash tender offer (the "Offer") to
----------
purchase all of the Company's outstanding shares of common stock, par value $.10
per share ("Common Stock") at a price of $40.25 per share. As a condition to
entering into the Agreement, Parent has required that the Stockholder agree to
the terms of this agreement and, as an inducement to Parent and the Sub to enter
into the Agreement and proceed with the Offer, the Stockholder has agreed to
those terms as set forth below. Capitalized terms used end not defined in this
agreement have the meanings ascribed to them in the Agreement.
It is therefore agreed as follows:
1. Tender of Shares.
----------------
(a) Tender. Not later than the fifteenth business day after
------
commencement of the Offer pursuant to Section 1.1 of the Agreement, the
Stockholder shall validly tender (or cause the record owner of his Shares to
validly tender), in accordance with the terms of the Offer, the number of shares
of the Common Stock set forth opposite the Stockholder's name on Schedule I to
this agreement, all of which are beneficially owned by the Stockholder, together
with any additional shares of the Common Stock that the Stockholder acquires
record or beneficial ownership of after execution of this agreement except for
additional shares acquired in any capacity excepted from this agreement pursuant
to Schedule I.
(b) Authorization to Disclose. The Stockholder authorizes the Company,
-------------------------
Parent and the Sub to publish and disclose in the documents relating to the
Offer the Stockholder's identity and ownership of the Company's common stock and
the nature of the Stockholder's commitments, arrangements and understandings
under this agreement.
(c) Conditions. The Stockholder acknowledges that the Company's
----------
obligation to accept and pay for the Shares in the Offer, including the Shares
owned of record or beneficially by the Stockholder, is subject to the term and
conditions of the Offer.
<PAGE>
2. The Stockholder's Responsibilities with Respect to the Merger.
-------------------------------------------------------------
(a) Voting Agreement. The Stockholder shall, at any meeting of the
----------------
holders of Common Stock, however called, or in connection with any written
consent of the holders of Common Stock, vote (or cause to be voted) the Shares,
then held of record or beneficially owned by the Stockholder against any
Acquisition Proposal and against any action or agreement that would impede,
frustrate, prevent or nullify this agreement, or result in a breach in any
respect of any covenant, representation or warranty or any other obligation or
agreement of the Company under the Agreement or which would result in any of the
conditions set forth in Annex A to the Agreement or set forth in Article VI of
the Agreement not being fulfilled. The Stockholder shall not be required to
take any action in accordance with this provision, however, to the extent that
the Stockholder shall have been advised by counsel in writing that in the
opinion of such counsel, the taking of any such action would violate the
Stockholder's fiduciary duties to the Company's stockholders under applicable
law, either in the Stockholder's capacity as a stockholder of the Company or in
the Stockholder's capacity as a member of the Company's Board of Directors.
(b) No Solicitation. Upon execution of this agreement the Stockholder
---------------
immediately shall cease any activities, discussions or negotiations with other
parties with respect to any Acquisition Proposal and shall not, directly or
indirectly, encourage, solicit, participate in or initiate discussions or
negotiations with or provide any information to, any corporation, partnership,
person or other entity or group (other than Parent and any of its affiliates or
representatives) concerning any Acquisition Proposal, except that the
Stockholder may negotiate and participate in negotiations with any entity or
group concerning an Acquisition Proposal to the extent that the Company is
permitted to do so under section 5.4 of the Agreement. The Stockholder shall
immediately communicate to Parent the terms of any proposal, discussion,
negotiation or inquiry the Stockholder receives in his capacity as a stockholder
of the Company (and the Stockholder shall furnish to Parent copies of any
written materials received by the Stockholder in his capacity as a stockholder
of the Company, in connection with any such proposal, discussion, negotiation or
inquiry) and the identity of the party making such proposal or inquiry.
(c) No Transfer of Shares or Inconsistent Arrangements. Except as
--------------------------------------------------
contemplated by the Agreement or this agreement, the Stockholder shall not (i)
transfer (which term shall include, without limitation, any sale, gift, pledge
or other disposition), or consent to any transfer of, any or all of the Shares
in the Company held by the Stockholder of record or beneficially, (ii) enter
into any contract, option or other agreement or understanding with respect to
any transfer of any or all of those Shares or any interest therein, (iii) grant
any proxy, power-of-attorney or other authorization in or with respect to those
Shares, (iv) deposit any of those Shares into a voting trust or enter into a
voting agreement or arrangement with respect to any of those Shares, or (v) take
any other action that would in any way restrict, limit or interfere with the
performance of the Stockholder's obligations under this agreement or the
transactions contemplated by this agreement or by the Agreement. The Stockholder
shall not request that the Company register the transfer (book-entry or
otherwise) of any certificate or uncertificated interest representing any of the
Shares in the Company owned of record or beneficially by the Stockholder, unless
such transfer is made in compliance with this agreement.
2
<PAGE>
(d) Company Options. If the Stockholder holds Options to acquire
---------------
shares of Company Common Stock, Stockholder shall, if requested by the Company,
consent to the cancellation or substitution of those options in accordance with
the terms of the Agreement and shall execute all appropriate documentation in
connection with such cancellation or substitution.
(e) Reasonable Efforts. Subject to the terms and conditions of this
------------------
agreement, each of the parties to this agreement shall use reasonable efforts to
take or cause to be taken all such action as may be necessary, proper or
advisable under applicable laws and regulations to consummate the transactions
contemplated by this agreement and the Agreement. Each party shall promptly
consult with the other and provide any necessary information and material with
respect to all filings made by Stockholder with any Governmental entity in
connection with this agreement and the Agreement and the transactions
contemplated by this agreement and the Agreement.
(f) Further Assurances. Each party shall from time to time, at the
------------------
other party's request and without further consideration, execute and deliver
such additional documents and take such further lawful action as may be
necessary or desirable to consummate, in the most expeditious manner
practicable, the transactions contemplated by this agreement.
3. Profit on Disposition of Shares Other than Pursuant to the Offer.
----------------------------------------------------------------
If prior to the time of acceptance for payment of the shares pursuant
to the Offer (a) the Company's board of directors withdraws or modifies its
approval or recommendation of the Offer or the Agreement, approves or recommends
a Superior Proposal, or enters into an agreement with respect to a Superior
Proposal, and (b) within 12 months thereafter there is a Disposition of any or
all of the shares of the Company owned by the Stockholder either pursuant to the
Superior Proposal or pursuant to a different Acquisition Proposal for which an
agreement was entered into within six months thereafter, then, promptly upon
receipt by the Stockholder of the proceeds of the Disposition, the Stockholder
shall pay to Parent an amount equal to the first $1.50 per Share of additional
consideration received in connection with the Disposition and 50% of any
additional consideration in excess of $1.50 per Share received in connection
with the Disposition (including the fair market value of any property) as
compared to the consideration that would have been received pursuant to the
Offer. If all or any portion of the consideration received in connection with
the Disposition is other than cash, payment to Parent shall be made in kind or,
at the Stockholder's election, in cash in an amount equal to the fair market
value of the consideration other than cash. As used in this provision, the term
"Disposition" means any sale, exchange or other disposition of shares, including
any disposition in connection with any tender offer, merger, consolidation or
liquidation.
4. Representations and Warranties of the Stockholder. The Stockholder
-------------------------------------------------
represents and warrants to Parent and the Sub as follows:
(a) Power; Binding Agreement. The Stockholder has the legal capacity,
------------------------
power and authority to enter into and perform all of the Stockholder's
obligations under
3
<PAGE>
this agreement. The execution, delivery and performance of this agreement by the
Stockholder will not violate any other agreement to which the Stockholder is a
party or by which the Stockholder is bound, including, but not limited to, any
voting agreement, proxy arrangement, pledge agreement, shareholders agreement or
voting trust. This agreement has been duly and validly executed and delivered by
the Stockholder and constitutes a valid and binding obligation of the
Stockholder, enforceable against the Stockholder in accordance with its terms.
There is no beneficiary or holder of a voting trust certificate or other
interest of any trust of which the Stockholder is a trustee whose consent is
required for the execution and delivery of this agreement or the consummation by
the Stockholder of the transactions contemplated by this agreement.
(b) No Conflicts. Except for filings under the HSR Act, the Exchange
------------
Act and as set forth in Section 3.4 of the Disclosure Schedule to the Agreement,
(i) no filing with, and no permit, authorization, consent or approval of, any
Governmental Entity is required for the execution and delivery of this agreement
by the Stockholder and the consummation by the Stockholder of the transactions
contemplated by this agreement and (ii) the execution, delivery and performance
of this agreement by the Stockholder will not violate any agreement or other
obligation to which the Stockholder is a party or by which the Stockholder or
any of the Stockholder's properties or assets is bound or violate any order,
writ, injunction, decree, judgment, order, statute, rule or regulation
applicable to the Stockholder or any of the Stockholder's properties or assets.
(c) Ownership of Shares. The Stockholder is the record and beneficial
-------------------
owner of the number of shares of the Common Stock subject to this agreement set
forth opposite the Stockholder's name on Schedule I to this agreement, except as
set forth on Schedule I, those shares constitute all of the shares of the Common
Stock owned of record or beneficially by the Stockholder, and upon tender of
those shares to the Company and the purchase of the shares by the Company
pursuant to the Offer, the Company shall acquire valid title to those shares,
free and clear of any claims, liens, encumbrances, proxies, voting trusts or
agreements, understandings or arrangements or any other rights (collectively,
"Encumbrances"). Subject to applicable securities laws and the terms of this
agreement, the Stockholder has sole voting power and sole power to issue
instructions with respect to the matters set forth in sections 1,2 and 3 of this
agreement, sole power of disposition, sole power of conversion, sole power to
demand appraisal rights, and sole power to agree to all of the matters set forth
in this agreement, in each case with respect to all of the shares in the Company
beneficially owned by the Stockholder, with no limitations, qualifications or
restrictions on those rights.
(d) No Encumbrance. Except as permitted by this agreement, the shares
--------------
in the Company owned by the Stockholder of record or beneficially, and the
certificates representing those shares, are now, and at all times prior to the
purchase of those shares pursuant to the Offer will be, held by the Stockholder,
or by a nominee or custodian for the benefit of the Stockholder, free and clear
of all Encumbrances except for those arising under this agreement.
(e) No Finder's Fees. Except as set forth in Section 3.18 of the
----------------
Agreement, no broker, investment banker, financial advisor or other person is
entitled to any broker's, finder's, financial adviser's or other similar fee or
commission in connection with the transactions contemplated by this agreement
based upon arrangements made by or on
4
<PAGE>
behalf of the Stockholder.
5. Representations and Warranties of Parent and the Sub. Parent and the
----------------------------------------------------
Sub jointly and severally represent and warrant to the Stockholder as follows:
(a) Power: Binding Agreement. Each of Parent and the Sub has the
-------------------------
corporate power and authority to enter into and perform all of its obligations
under this agreement and the execution, delivery and performance of this
agreement by Parent and the Sub have been duly authorized by all necessary
partnership or corporate action. The execution, delivery and performance of
this agreement by each of Parent and the Sub will not violate any other
agreement to which either of them is a party or by which either of them is
bound. This agreement has been duly and validly executed and delivered by each
of Parent and the Sub and constitutes a valid and binding agreement of each of
Parent and the Sub, enforceable against each of them in accordance with its
terms.
(b) No Conflicts. Except for filings under the HSR Act and the
------------
Exchange Act, (i) no filing with, and no permit, authorization, consent or
approval of, any Governmental Entity is necessary for the execution of this
agreement by each of Parent and the Sub and the consummation by each of Parent
and the Sub of the transactions contemplated hereby and (ii) the execution,
delivery and performance of this agreement by each of Parent and the Sub will
not (A) conflict with or result in any breach of any organizational documents
applicable to either Parent or the Sub, (B) result in a violation or breach of,
or constitute (with or without notice or lapse of time or both) a default (or
give rise to any third party right of termination, cancellation, material
modification or acceleration) under, any of the terms, conditions or provisions
of any note, loan agreement, bond, mortgage, indenture, license, contract,
commitment, arrangement, understanding, agreement or other instrument or
obligation of any kind to which either Parent or the Sub is a party or by which
either Parent or the Sub or any of their respective properties or assets is
bound, or (C) violate any order, writ, injunction, decree, judgment, order,
statute, rule or regulation applicable to either Parent or the Sub or any of
their respective properties or assets.
6. Termination.
-----------
Except as provided in Section 3 of this agreement, this agreement
shall terminate upon the termination of the Agreement in accordance with its
terms. The termination of this agreement pursuant to this provision shall not
relieve any party of liability for any prior breach of its or his or her
obligations under this agreement.
5
<PAGE>
7. Definitions.
-----------
(a) Shares. Any reference in this agreement to the shares owned of
------
record or beneficially by the Stockholder shall be deemed to include shares
hereafter acquired by the Stockholder upon any stock dividend or distribution or
any change in the Company's Common Stock by reason of any split-up,
recapitalization, combination, exchange of shares or similar corporate action.
(b) Beneficial Ownership. For the purpose of this agreement,
--------------------
beneficial ownership with respect to any shares means beneficial ownership as
determined pursuant to Rule 13d-3 under the Securities Exchange Act of 1934, as
amended, including pursuant to any agreement, arrangement or understanding,
whether or not in writing.
(c) Agreement. Any reference to the "Agreement" refers to the
---------
Agreement executed on this date as it may hereafter be amended from time to
time.
8. Miscellaneous.
-------------
(a) Reliance by Parent. The Stockholder acknowledges that Stockholder
------------------
understands that Parent is entering into, and causing Sub to enter into, the
Agreement in reliance upon the Stockholder's execution, delivery and performance
of this agreement.
(b) Entire Agreement; No Oral Change. This agreement contains a
---------------------------------
compete statement of all of the arrangements among the parties with respect to
its subject matter, supersedes all prior agreements and understandings, written
and oral, among the parties with respect to that subject matter, and cannot be
changed or terminated except by an agreement in writing signed by all parties.
(c) Binding Agreement. This agreement and the obligations under this
-----------------
agreement shall attach to the shares owned of record and beneficially by the
Stockholder and shall be binding upon any such person or entity to which legal
or beneficial ownership of those shares shall pass, whether by operation of law
or otherwise, including, but not limited to, the Stockholder's heirs, guardians,
administrators or successors. The transferee of any shares shall remain liable
for the performance of all obligations of the transferor under this agreement.
(d) Assignment. None of the parties may assign any of its or his or
----------
her rights or delegate any of its or his or her duties under this agreement
without the prior written consent of the other parties.
(e) Notices. All notices and other communications hereunder shall be
-------
in writing and shall be deemed given if delivered personally, telecopied (which
is confirmed) or sent by an overnight courier service, such as Federal Express,
to the parties at the following addresses (or at such other address for a party
as shall be specified by like notice):
6
<PAGE>
(i) if to Parent or the Sub, to:
VS&A Communications Partners II, L.P.
350 Park Avenue
New York, New York 10022
Attn: Jeffrey T. Stevenson
President
with a copy to:
Proskauer Rose LLP
1585 Broadway
New York, New York 10036
Attn: Bertram A. Abrams, Esq.
(ii) if to the Stockholder, to:
Florence Lloyd Jones Barnett and Howard G. Barnett, Jr.
as Co-Trustees of the Revocable Inter Vivos Trust of
Florence Lloyd Jones Barnett
2619 East 37th Street
Tulsa, Oklahoma 74105
with a copy to:
Conner & Winters
2400 First Place Tower
15 East 5th Street
Tulsa, Oklahoma 74103
Attn: Robert A. Curry, Esq.
(f) Severability. Whenever possible, each provision or portion of any
------------
provision of this agreement shall be interpreted in such manner as to be
effective and valid under applicable law but if any provision or portion of any
provision of this agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable law or rule in any jurisdiction, such
invalidity, illegality or unenforceability will not affect any other provision
or portion of any provision in such jurisdiction, and this agreement shall be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision or portion of any provision had never been
contained in this agreement.
(g) Specific Performance. The Stockholder acknowledges that the
--------------------
Company's business is of a special, unique and extraordinary character, and that
any default in the performance of Stockholder's obligations under sections 1
and 2 of this agreement could not be compensated for by damages. Accordingly, if
the Stockholder defaults in the performance of Stockholder's obligations under
section 1 or 2 of this agreement, Parent and the Sub shall be entitled, in
addition to any other remedies that either of them may have, to enforcement of
this agreement by a decree of specific performance requiring the Stockholder to
fulfill those obligations, without any bond or other security being required and
without the necessity of showing actual damages.
(h) Remedies Cumulative. All rights, powers and remedies provided
-------------------
7
<PAGE>
under this agreement or otherwise available in respect hereof at law or in
equity shall be cumulative and not alternative, and the exercise of any right,
power or remedy by any party shall not preclude the simultaneous or later
exercise by that party of any other right, power or remedy.
(i) No Waiver. The failure of any party hereto to exercise any right,
---------
power or remedy provided under this agreement or otherwise available at law or
in equity, or to insist upon compliance by any other party with its obligations
under this agreement, and any custom or practice of the parties at variance with
the terms of this agreement, shall not constitute a waiver by that party of its
right to exercise any such or other right, power or remedy or to demand such
compliance.
(j) No Third Party Beneficiaries. This agreement is not intended to
----------------------------
be for the benefit of, and shall not be enforceable by, any person or entity who
or which is not a party hereto.
(k) Governing Law. This agreement shall be governed and construed in
-------------
accordance with the laws of the State of Delaware, without giving effect to the
principles of conflicts of law thereof.
(l) Jurisdiction. The courts of the State of Delaware and the United
------------
States District Court for the Southern District of New York shall have
jurisdiction over the parties with respect to any dispute or controversy among
them arising under or in connection with this agreement and, by execution and
delivery of this agreement, each of the parties to this agreement submits to the
jurisdiction of those courts, including, but not limited to, the in personam and
-----------
subject matter jurisdiction of those courts, waives any objection to such
jurisdiction on the grounds of venue or forum non conveniens, the absence of in
----- --- ---------- --
personam or subject matter jurisdiction and any similar grounds, consents to
- --------
service of process by mail (in accordance with section 8(e)) or any other manner
permitted by law, and irrevocably agrees to be bound by any judgment rendered
thereby in connection with this agreement. These consents to jurisdiction shall
not be deemed to confer rights on any person other than the parties to this
agreement.
8
<PAGE>
(m) Headings. The descriptive headings in this agreement are for
--------
convenience of reference only and are not intended to be part of or to affect
the meaning or interpretation of this agreement.
VS&A COMMUNICATIONS PARTNERS II, L.P.
By: /s/ Jeffrey T. Stevenson
------------------------------------
Jeffrey T. Stevenson
President and General Partner
VS&A-T/SF, INC.
By: /s/ Jeffrey T. Stevenson
------------------------------------
Jeffrey T. Stevenson
President and General Partner
FLORENCE LLOYD JONES BARNETT AND
HOWARD G. BARNETT, JR. AS CO-TRUSTEES
OF THE REVOCABLE INTER VIVOS TRUST OF
FLORENCE LLOYD JONES BARNETT
/s/ Florence Lloyd Jones Barnett
----------------------------------------
Florence Lloyd Jones Barnett
/s/ Howard G. Barnett, Jr.
----------------------------------------
Howard G. Barnett, Jr.
9
<PAGE>
SCHEDULE 1
<TABLE>
<CAPTION>
NUMBER OF SHARES NUMBER OF SHARES BENEFICIALLY
BENEFICIALLY OWNED OWNED EXCLUDED FROM THIS
SUBJECT TO THIS AGREEMENT (INDICATING
NAME OF STOCKHOLDER AGREEMENT CAPACITY OWNED)
- ------------------- --------------- -------------------------
<S> <C> <C>
Florence Lloyd Jones Barnett 416,139 shares See separate Stockholder
and Howard G. Barnett, Jr., as Agreements for:
Co-trustees of the Revocable
Inter Vivos Trust of Florence (i) Howard G. Barnett, Sr. and Howard
Lloyd Jones Barnett G. Barnett, Jr., as Co-trustees of the
Revocable Inter Vivos Trust of
Howard G. Barnett, Sr.
(ii) Florence Lloyd Jones Barnett and
Howard G. Barnett, Sr., as Trustees
of The Florence L. J. and Howard G.
Barnett Foundation
(iii) Florence Lloyd Jones Barnett, as
Trustee of the Florence Lloyd Jones
Barnett Charitable Remainder Unitrust
</TABLE>
<PAGE>
EXHIBIT (c)(8)
STOCKHOLDER AGREEMENT
---------------------
August 15, 1997
The parties to this agreement are VS&A Communications Partners II,
L.P., a Delaware limited partnership ("Parent"), VS&A-T/SF, Inc., a Delaware
corporation and a wholly owned subsidiary of Parent (the "Sub"), and Billie T.
Barnett (the "Stockholder").
Concurrently with the execution and delivery of this agreement,
Parent, the Sub, and T/SF Communications Corporation, a Delaware corporation
(the "Company"), are entering into a Stock Purchase Agreement the ("Agreement")
which provides inter alia, for the Company's cash tender offer (the "Offer") to
----------
purchase all of the Company's outstanding shares of common stock, par value $.10
per share ("Common Stock") at a price of $40.25 per share. As a condition to
entering into the Agreement, Parent has required that the Stockholder agree to
the terms of this agreement and, as an inducement to Parent and the Sub to enter
into the Agreement and proceed with the Offer, the Stockholder has agreed to
those terms as set forth below. Capitalized terms used end not defined in this
agreement have the meanings ascribed to them in the Agreement.
It is therefore agreed as follows:
1. Tender of Shares.
----------------
(a) Tender. Not later than the fifteenth business day after
------
commencement of the Offer pursuant to Section 1.1 of the Agreement, the
Stockholder shall validly tender (or cause the record owner of his Shares to
validly tender), in accordance with the terms of the Offer, the number of shares
of the Common Stock set forth opposite the Stockholder's name on Schedule I to
this agreement, all of which are beneficially owned by the Stockholder, together
with any additional shares of the Common Stock that the Stockholder acquires
record or beneficial ownership of after execution of this agreement except for
additional shares acquired in any capacity excepted from this agreement pursuant
to Schedule I.
(b) Authorization to Disclose. The Stockholder authorizes the Company,
-------------------------
Parent and the Sub to publish and disclose in the documents relating to the
Offer the Stockholder's identity and ownership of the Company's common stock and
the nature of the Stockholder's commitments, arrangements and understandings
under this agreement.
(c) Conditions. The Stockholder acknowledges that the Company's
----------
obligation to accept and pay for the Shares in the Offer, including the Shares
owned of record or beneficially by the Stockholder, is subject to the term and
conditions of the Offer.
<PAGE>
2. The Stockholder's Responsibilities with Respect to the Merger.
-------------------------------------------------------------
(a) Voting Agreement. The Stockholder shall, at any meeting of the
----------------
holders of Common Stock, however called, or in connection with any written
consent of the holders of Common Stock, vote (or cause to be voted) the Shares,
then held of record or beneficially owned by the Stockholder against any
Acquisition Proposal and against any action or agreement that would impede,
frustrate, prevent or nullify this agreement, or result in a breach in any
respect of any covenant, representation or warranty or any other obligation or
agreement of the Company under the Agreement or which would result in any of the
conditions set forth in Annex A to the Agreement or set forth in Article VI of
the Agreement not being fulfilled. The Stockholder shall not be required to
take any action in accordance with this provision, however, to the extent that
the Stockholder shall have been advised by counsel in writing that in the
opinion of such counsel, the taking of any such action would violate the
Stockholder's fiduciary duties to the Company's stockholders under applicable
law, either in the Stockholder's capacity as a stockholder of the Company or in
the Stockholder's capacity as a member of the Company's Board of Directors.
(b) No Solicitation. Upon execution of this agreement the Stockholder
---------------
immediately shall cease any activities, discussions or negotiations with other
parties with respect to any Acquisition Proposal and shall not, directly or
indirectly, encourage, solicit, participate in or initiate discussions or
negotiations with or provide any information to, any corporation, partnership,
person or other entity or group (other than Parent and any of its affiliates or
representatives) concerning any Acquisition Proposal, except that the
Stockholder may negotiate and participate in negotiations with any entity or
group concerning an Acquisition Proposal to the extent that the Company is
permitted to do so under section 5.4 of the Agreement. The Stockholder shall
immediately communicate to Parent the terms of any proposal, discussion,
negotiation or inquiry the Stockholder receives in his capacity as a stockholder
of the Company (and the Stockholder shall furnish to Parent copies of any
written materials received by the Stockholder in his capacity as a stockholder
of the Company, in connection with any such proposal, discussion, negotiation or
inquiry) and the identity of the party making such proposal or inquiry.
(c) No Transfer of Shares or Inconsistent Arrangements. Except as
--------------------------------------------------
contemplated by the Agreement or this agreement, the Stockholder shall not (i)
transfer (which term shall include, without limitation, any sale, gift, pledge
or other disposition), or consent to any transfer of, any or all of the Shares
in the Company held by the Stockholder of record or beneficially, (ii) enter
into any contract, option or other agreement or understanding with respect to
any transfer of any or all of those Shares or any interest therein, (iii) grant
any proxy, power-of-attorney or other authorization in or with respect to those
Shares, (iv) deposit any of those Shares into a voting trust or enter into a
voting agreement or arrangement with respect to any of those Shares, or (v) take
any other action that would in any way restrict, limit or interfere with the
performance of the Stockholder's obligations under this agreement or the
transactions contemplated by this agreement or by the Agreement. The Stockholder
shall not request that the Company register the transfer (book-entry or
otherwise) of any certificate or uncertificated interest representing any of the
Shares in the Company owned of record or beneficially by the Stockholder, unless
such transfer is made in compliance with this agreement.
(d) Company Options. If the Stockholder holds Options to acquire
---------------
shares of Company
2
<PAGE>
Common Stock, Stockholder shall, if requested by the Company, consent to the
cancellation or substitution of those options in accordance with the terms of
the Agreement and shall execute all appropriate documentation in connection with
such cancellation or substitution.
(e) Reasonable Efforts. Subject to the terms and conditions of this
------------------
agreement, each of the parties to this agreement shall use reasonable efforts to
take or cause to be taken all such action as may be necessary, proper or
advisable under applicable laws and regulations to consummate the transactions
contemplated by this agreement and the Agreement. Each party shall promptly
consult with the other and provide any necessary information and material with
respect to all filings made by Stockholder with any Governmental entity in
connection with this agreement and the Agreement and the transactions
contemplated by this agreement and the Agreement.
(f) Further Assurances. Each party shall from time to time, at the
------------------
other party's request and without further consideration, execute and deliver
such additional documents and take such further lawful action as may be
necessary or desirable to consummate, in the most expeditious manner
practicable, the transactions contemplated by this agreement.
3. Profit on Disposition of Shares Other than Pursuant to the Offer.
----------------------------------------------------------------
If prior to the time of acceptance for payment of the shares pursuant
to the Offer (a) the Company's board of directors withdraws or modifies its
approval or recommendation of the Offer or the Agreement, approves or recommends
a Superior Proposal, or enters into an agreement with respect to a Superior
Proposal, and (b) within 12 months thereafter there is a Disposition of any or
all of the shares of the Company owned by the Stockholder either pursuant to the
Superior Proposal or pursuant to a different Acquisition Proposal for which an
agreement was entered into within six months thereafter, then, promptly upon
receipt by the Stockholder of the proceeds of the Disposition, the Stockholder
shall pay to Parent an amount equal to the first $1.50 per Share of additional
consideration received in connection with the Disposition and 50% of any
additional consideration in excess of $1.50 per Share received in connection
with the Disposition (including the fair market value of any property) as
compared to the consideration that would have been received pursuant to the
Offer. If all or any portion of the consideration received in connection with
the Disposition is other than cash, payment to Parent shall be made in kind or,
at the Stockholder's election, in cash in an amount equal to the fair market
value of the consideration other than cash. As used in this provision, the term
"Disposition" means any sale, exchange or other disposition of shares, including
any disposition in connection with any tender offer, merger, consolidation or
liquidation.
4. Representations and Warranties of the Stockholder. The Stockholder
-------------------------------------------------
represents and warrants to Parent and the Sub as follows:
(a) Power; Binding Agreement. The Stockholder has the legal capacity,
------------------------
power and authority to enter into and perform all of the Stockholder's
obligations under this agreement. The execution, delivery and performance of
this agreement by the Stockholder will not violate any other agreement to which
the Stockholder is a party or by which the Stockholder is bound, including, but
not limited to, any voting agreement, proxy arrangement, pledge agreement,
shareholders agreement or voting trust. This agreement has
3
<PAGE>
been duly and validly executed and delivered by the Stockholder and constitutes
a valid and binding obligation of the Stockholder, enforceable against the
Stockholder in accordance with its terms. There is no beneficiary or holder of a
voting trust certificate or other interest of any trust of which the Stockholder
is a trustee whose consent is required for the execution and delivery of this
agreement or the consummation by the Stockholder of the transactions
contemplated by this agreement.
(b) No Conflicts. Except for filings under the HSR Act, the Exchange
------------
Act and as set forth in Section 3.4 of the Disclosure Schedule to the Agreement,
(i) no filing with, and no permit, authorization, consent or approval of, any
Governmental Entity is required for the execution and delivery of this agreement
by the Stockholder and the consummation by the Stockholder of the transactions
contemplated by this agreement and (ii) the execution, delivery and performance
of this agreement by the Stockholder will not violate any agreement or other
obligation to which the Stockholder is a party or by which the Stockholder or
any of the Stockholder's properties or assets is bound or violate any order,
writ, injunction, decree, judgment, order, statute, rule or regulation
applicable to the Stockholder or any of the Stockholder's properties or assets.
(c) Ownership of Shares. The Stockholder is the record and beneficial
-------------------
owner of the number of shares of the Common Stock subject to this agreement set
forth opposite the Stockholder's name on Schedule I to this agreement, except as
set forth on Schedule I, those shares constitute all of the shares of the Common
Stock owned of record or beneficially by the Stockholder, and upon tender of
those shares to the Company and the purchase of the shares by the Company
pursuant to the Offer, the Company shall acquire valid title to those shares,
free and clear of any claims, liens, encumbrances, proxies, voting trusts or
agreements, understandings or arrangements or any other rights (collectively,
"Encumbrances"). Subject to applicable securities laws and the terms of this
agreement, the Stockholder has sole voting power and sole power to issue
instructions with respect to the matters set forth in sections 1,2 and 3 of this
agreement, sole power of disposition, sole power of conversion, sole power to
demand appraisal rights, and sole power to agree to all of the matters set forth
in this agreement, in each case with respect to all of the shares in the Company
beneficially owned by the Stockholder, with no limitations, qualifications or
restrictions on those rights.
(d) No Encumbrance. Except as permitted by this agreement, the shares
--------------
in the Company owned by the Stockholder of record or beneficially, and the
certificates representing those shares, are now, and at all times prior to the
purchase of those shares pursuant to the Offer will be, held by the Stockholder,
or by a nominee or custodian for the benefit of the Stockholder, free and clear
of all Encumbrances except for those arising under this agreement.
(e) No Finder's Fees. Except as set forth in Section 3.18 of the
----------------
Agreement, no broker, investment banker, financial advisor or other person is
entitled to any broker's, finder's, financial adviser's or other similar fee or
commission in connection with the transactions contemplated by this agreement
based upon arrangements made by or on behalf of the Stockholder.
5. Representations and Warranties of Parent and the Sub. Parent and the
----------------------------------------------------
Sub jointly and severally represent and warrant to the Stockholder as follows:
4
<PAGE>
(a) Power: Binding Agreement. Each of Parent and the Sub has the
-------------------------
corporate power and authority to enter into and perform all of its obligations
under this agreement and the execution, delivery and performance of this
agreement by Parent and the Sub have been duly authorized by all necessary
partnership or corporate action. The execution, delivery and performance of
this agreement by each of Parent and the Sub will not violate any other
agreement to which either of them is a party or by which either of them is
bound. This agreement has been duly and validly executed and delivered by each
of Parent and the Sub and constitutes a valid and binding agreement of each of
Parent and the Sub, enforceable against each of them in accordance with its
terms.
(b) No Conflicts. Except for filings under the HSR Act and the
------------
Exchange Act, (i) no filing with, and no permit, authorization, consent or
approval of, any Governmental Entity is necessary for the execution of this
agreement by each of Parent and the Sub and the consummation by each of Parent
and the Sub of the transactions contemplated hereby and (ii) the execution,
delivery and performance of this agreement by each of Parent and the Sub will
not (A) conflict with or result in any breach of any organizational documents
applicable to either Parent or the Sub, (B) result in a violation or breach of,
or constitute (with or without notice or lapse of time or both) a default (or
give rise to any third party right of termination, cancellation, material
modification or acceleration) under, any of the terms, conditions or provisions
of any note, loan agreement, bond, mortgage, indenture, license, contract,
commitment, arrangement, understanding, agreement or other instrument or
obligation of any kind to which either Parent or the Sub is a party or by which
either Parent or the Sub or any of their respective properties or assets is
bound, or (C) violate any order, writ, injunction, decree, judgment, order,
statute, rule or regulation applicable to either Parent or the Sub or any of
their respective properties or assets.
6. Termination.
-----------
Except as provided in Section 3 of this agreement, this agreement
shall terminate upon the termination of the Agreement in accordance with its
terms. The termination of this agreement pursuant to this provision shall not
relieve any party of liability for any prior breach of its or his or her
obligations under this agreement.
5
<PAGE>
7. Definitions.
-----------
(a) Shares. Any reference in this agreement to the shares owned of
------
record or beneficially by the Stockholder shall be deemed to include shares
hereafter acquired by the Stockholder upon any stock dividend or distribution or
any change in the Company's Common Stock by reason of any split-up,
recapitalization, combination, exchange of shares or similar corporate action.
(b) Beneficial Ownership. For the purpose of this agreement,
--------------------
beneficial ownership with respect to any shares means beneficial ownership as
determined pursuant to Rule 13d-3 under the Securities Exchange Act of 1934, as
amended, including pursuant to any agreement, arrangement or understanding,
whether or not in writing.
(c) Agreement. Any reference to the "Agreement" refers to the
---------
Agreement executed on this date as it may hereafter be amended from time to
time.
8. Miscellaneous.
-------------
(a) Reliance by Parent. The Stockholder acknowledges that Stockholder
------------------
understands that Parent is entering into, and causing Sub to enter into, the
Agreement in reliance upon the Stockholder's execution, delivery and performance
of this agreement.
(b) Entire Agreement; No Oral Change. This agreement contains a
---------------------------------
compete statement of all of the arrangements among the parties with respect to
its subject matter, supersedes all prior agreements and understandings, written
and oral, among the parties with respect to that subject matter, and cannot be
changed or terminated except by an agreement in writing signed by all parties.
(c) Binding Agreement. This agreement and the obligations under this
-----------------
agreement shall attach to the shares owned of record and beneficially by the
Stockholder and shall be binding upon any such person or entity to which legal
or beneficial ownership of those shares shall pass, whether by operation of law
or otherwise, including, but not limited to, the Stockholder's heirs, guardians,
administrators or successors. The transferee of any shares shall remain liable
for the performance of all obligations of the transferor under this agreement.
(d) Assignment. None of the parties may assign any of its or his or
----------
her rights or delegate any of its or his or her duties under this agreement
without the prior written consent of the other parties.
(e) Notices. All notices and other communications hereunder shall be
-------
in writing and shall be deemed given if delivered personally, telecopied (which
is confirmed) or sent by an overnight courier service, such as Federal Express,
to the parties at the following addresses (or at such other address for a party
as shall be specified by like notice):
6
<PAGE>
(i) if to Parent or the Sub, to:
VS&A Communications Partners II, L.P.
350 Park Avenue
New York, New York 10022
Attn: Jeffrey T. Stevenson
President
with a copy to:
Proskauer Rose LLP
1585 Broadway
New York, New York 10036
Attn: Bertram A. Abrams, Esq.
(ii) if to the Stockholder, to:
Billie T. Barnett
6742 South Evanston
Tulsa, Oklahoma 74136
with a copy to:
Conner & Winters
2400 First Place Tower
15 East 5th Street
Tulsa, Oklahoma 74103
Attn: Robert A. Curry, Esq.
(f) Severability. Whenever possible, each provision or portion of any
------------
provision of this agreement shall be interpreted in such manner as to be
effective and valid under applicable law but if any provision or portion of any
provision of this agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable law or rule in any jurisdiction, such
invalidity, illegality or unenforceability will not affect any other provision
or portion of any provision in such jurisdiction, and this agreement shall be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision or portion of any provision had never been
contained in this agreement.
(g) Specific Performance. The Stockholder acknowledges that the
--------------------
Company's business is of a special, unique and extraordinary character, and that
any default in the performance of Stockholder's obligations under sections 1
and 2 of this agreement could not be compensated for by damages. Accordingly,
if the Stockholder defaults in the performance of Stockholder's obligations
under section 1 or 2 of this agreement, Parent and the Sub shall be entitled, in
addition to any other remedies that either of them may have, to enforcement of
this agreement by a decree of specific performance requiring the Stockholder to
fulfill those obligations, without any bond or other security being required and
without the necessity of showing
7
<PAGE>
actual damages.
(h) Remedies Cumulative. All rights, powers and remedies provided
-------------------
under this agreement or otherwise available in respect hereof at law or in
equity shall be cumulative and not alternative, and the exercise of any right,
power or remedy by any party shall not preclude the simultaneous or later
exercise by that party of any other right, power or remedy.
(i) No Waiver. The failure of any party hereto to exercise any right,
---------
power or remedy provided under this agreement or otherwise available at law or
in equity, or to insist upon compliance by any other party with its obligations
under this agreement, and any custom or practice of the parties at variance with
the terms of this agreement, shall not constitute a waiver by that party of its
right to exercise any such or other right, power or remedy or to demand such
compliance.
(j) No Third Party Beneficiaries. This agreement is not intended to
----------------------------
be for the benefit of, and shall not be enforceable by, any person or entity who
or which is not a party hereto.
(k) Governing Law. This agreement shall be governed and construed in
-------------
accordance with the laws of the State of Delaware, without giving effect to the
principles of conflicts of law thereof.
(l) Jurisdiction. The courts of the State of Delaware and the United
------------
States District Court for the Southern District of New York shall have
jurisdiction over the parties with respect to any dispute or controversy among
them arising under or in connection with this agreement and, by execution and
delivery of this agreement, each of the parties to this agreement submits to the
jurisdiction of those courts, including, but not limited to, the in personam and
-----------
subject matter jurisdiction of those courts, waives any objection to such
jurisdiction on the grounds of venue or forum non conveniens, the absence of in
----- --- ---------- --
personam or subject matter jurisdiction and any similar grounds, consents to
- --------
service of process by mail (in accordance with section 8(e)) or any other manner
permitted by law, and irrevocably agrees to be bound by any judgment rendered
thereby in connection with this agreement. These consents to jurisdiction shall
not be deemed to confer rights on any person other than the parties to this
agreement.
8
<PAGE>
(m) Headings. The descriptive headings in this agreement are for
--------
convenience of reference only and are not intended to be part of or to affect
the meaning or interpretation of this agreement.
VS&A COMMUNICATIONS PARTNERS II, L.P.
By: /s/ Jeffrey T. Stevenson
------------------------------------
Jeffrey T. Stevenson
President and General Partner
VS&A-T/SF, INC.
By: /s/ Jeffrey T. Stevenson
------------------------------------
Jeffrey T. Stevenson
President and General Partner
/s/ Billie T. Barnett
----------------------------------------
Billie T. Barnett
9
<PAGE>
SCHEDULE 1
<TABLE>
<CAPTION>
NUMBER OF SHARES NUMBER OF SHARES BENEFICIALLY
BENEFICIALLY OWNED OWNED EXCLUDED FROM THIS
SUBJECT TO THIS AGREEMENT (INDICATING
NAME OF STOCKHOLDER AGREEMENT CAPACITY OWNED)
- ------------------- --------------- -----------------------
<S> <C> <C>
Billie T. Barnett 26,602 shares The shares shown as owned
beneficially by Howard G. Barnett,
Jr., husband of Billie T. Barnett,
on his separate Stockholder
Agreement
</TABLE>
<PAGE>
Exhibit (c)(9)
STOCKHOLDER AGREEMENT
---------------------
August 15, 1997
The parties to this agreement are VS&A Communications Partners II,
L.P., a Delaware limited partnership ("Parent"), VS&A-T/SF, Inc., a Delaware
corporation and a wholly owned subsidiary of Parent (the "Sub"), and Jenkin
Lloyd Jones and Jenkin Lloyd Jones Jr., as Co-Trustees of the Revocable Inter
Vivos Trust of Jenkin Lloyd Jones (the "Stockholder").
Concurrently with the execution and delivery of this agreement,
Parent, the Sub, and T/SF Communications Corporation, a Delaware corporation
(the "Company"), are entering into a Stock Purchase Agreement the ("Agreement")
which provides inter alia, for the Company's cash tender offer (the "Offer") to
----------
purchase all of the Company's outstanding shares of common stock, par value $.10
per share ("Common Stock") at a price of $40.25 per share. As a condition to
entering into the Agreement, Parent has required that the Stockholder agree to
the terms of this agreement and, as an inducement to Parent and the Sub to enter
into the Agreement and proceed with the Offer, the Stockholder has agreed to
those terms as set forth below. Capitalized terms used end not defined in this
agreement have the meanings ascribed to them in the Agreement.
It is therefore agreed as follows:
1. Tender of Shares.
----------------
(a) Tender. Not later than the fifteenth business day after
------
commencement of the Offer pursuant to Section 1.1 of the Agreement, the
Stockholder shall validly tender (or cause the record owner of his Shares to
validly tender), in accordance with the terms of the Offer, the number of shares
of the Common Stock set forth opposite the Stockholder's name on Schedule I to
this agreement, all of which are beneficially owned by the Stockholder, together
with any additional shares of the Common Stock that the Stockholder acquires
record or beneficial ownership of after execution of this agreement except for
additional shares acquired in any capacity excepted from this agreement pursuant
to Schedule I.
(b) Authorization to Disclose. The Stockholder authorizes the Company,
-------------------------
Parent and the Sub to publish and disclose in the documents relating to the
Offer the Stockholder's identity and ownership of the Company's common stock and
the nature of the Stockholder's commitments, arrangements and understandings
under this agreement.
(c) Conditions. The Stockholder acknowledges that the Company's
----------
obligation to accept and pay for the Shares in the Offer, including the Shares
owned of record or beneficially by the Stockholder, is subject to the term and
conditions of the Offer.
<PAGE>
2. The Stockholder's Responsibilities with Respect to the Merger.
-------------------------------------------------------------
(a) Voting Agreement. The Stockholder shall, at any meeting of the
----------------
holders of Common Stock, however called, or in connection with any written
consent of the holders of Common Stock, vote (or cause to be voted) the Shares,
then held of record or beneficially owned by the Stockholder against any
Acquisition Proposal and against any action or agreement that would impede,
frustrate, prevent or nullify this agreement, or result in a breach in any
respect of any covenant, representation or warranty or any other obligation or
agreement of the Company under the Agreement or which would result in any of the
conditions set forth in Annex A to the Agreement or set forth in Article VI of
the Agreement not being fulfilled. The Stockholder shall not be required to
take any action in accordance with this provision, however, to the extent that
the Stockholder shall have been advised by counsel in writing that in the
opinion of such counsel, the taking of any such action would violate the
Stockholder's fiduciary duties to the Company's stockholders under applicable
law, either in the Stockholder's capacity as a stockholder of the Company or in
the Stockholder's capacity as a member of the Company's Board of Directors.
(b) No Solicitation. Upon execution of this agreement the Stockholder
---------------
immediately shall cease any activities, discussions or negotiations with other
parties with respect to any Acquisition Proposal and shall not, directly or
indirectly, encourage, solicit, participate in or initiate discussions or
negotiations with or provide any information to, any corporation, partnership,
person or other entity or group (other than Parent and any of its affiliates or
representatives) concerning any Acquisition Proposal, except that the
Stockholder may negotiate and participate in negotiations with any entity or
group concerning an Acquisition Proposal to the extent that the Company is
permitted to do so under section 5.4 of the Agreement. The Stockholder shall
immediately communicate to Parent the terms of any proposal, discussion,
negotiation or inquiry the Stockholder receives in his capacity as a stockholder
of the Company (and the Stockholder shall furnish to Parent copies of any
written materials received by the Stockholder in his capacity as a stockholder
of the Company, in connection with any such proposal, discussion, negotiation or
inquiry) and the identity of the party making such proposal or inquiry.
(c) No Transfer of Shares or Inconsistent Arrangements. Except as
--------------------------------------------------
contemplated by the Agreement or this agreement, the Stockholder shall not (i)
transfer (which term shall include, without limitation, any sale, gift, pledge
or other disposition), or consent to any transfer of, any or all of the Shares
in the Company held by the Stockholder of record or beneficially, (ii) enter
into any contract, option or other agreement or understanding with respect to
any transfer of any or all of those Shares or any interest therein, (iii) grant
any proxy, power-of-attorney or other authorization in or with respect to those
Shares, (iv) deposit any of those Shares into a voting trust or enter into a
voting agreement or arrangement with respect to any of those Shares, or (v) take
any other action that would in any way restrict, limit or interfere with the
performance of the Stockholder's obligations under this agreement or the
transactions contemplated by this agreement or by the Agreement. The Stockholder
shall not request that the Company register the transfer (book-entry or
otherwise) of any certificate or uncertificated interest representing any of the
Shares in the Company owned of record or beneficially by the Stockholder, unless
such transfer is made in compliance with this agreement.
2
<PAGE>
(d) Company Options. If the Stockholder holds Options to acquire
---------------
shares of Company Common Stock, Stockholder shall, if requested by the Company,
consent to the cancellation or substitution of those options in accordance with
the terms of the Agreement and shall execute all appropriate documentation in
connection with such cancellation or substitution.
(e) Reasonable Efforts. Subject to the terms and conditions of this
------------------
agreement, each of the parties to this agreement shall use reasonable efforts to
take or cause to be taken all such action as may be necessary, proper or
advisable under applicable laws and regulations to consummate the transactions
contemplated by this agreement and the Agreement. Each party shall promptly
consult with the other and provide any necessary information and material with
respect to all filings made by Stockholder with any Governmental entity in
connection with this agreement and the Agreement and the transactions
contemplated by this agreement and the Agreement.
(f) Further Assurances. Each party shall from time to time, at the
------------------
other party's request and without further consideration, execute and deliver
such additional documents and take such further lawful action as may be
necessary or desirable to consummate, in the most expeditious manner
practicable, the transactions contemplated by this agreement.
3. Profit on Disposition of Shares Other than Pursuant to the Offer.
----------------------------------------------------------------
If prior to the time of acceptance for payment of the shares pursuant
to the Offer (a) the Company's board of directors withdraws or modifies its
approval or recommendation of the Offer or the Agreement, approves or recommends
a Superior Proposal, or enters into an agreement with respect to a Superior
Proposal, and (b) within 12 months thereafter there is a Disposition of any or
all of the shares of the Company owned by the Stockholder either pursuant to the
Superior Proposal or pursuant to a different Acquisition Proposal for which an
agreement was entered into within six months thereafter, then, promptly upon
receipt by the Stockholder of the proceeds of the Disposition, the Stockholder
shall pay to Parent an amount equal to the first $1.50 per Share of additional
consideration received in connection with the Disposition and 50% of any
additional consideration in excess of $1.50 per Share received in connection
with the Disposition (including the fair market value of any property) as
compared to the consideration that would have been received pursuant to the
Offer. If all or any portion of the consideration received in connection with
the Disposition is other than cash, payment to Parent shall be made in kind or,
at the Stockholder's election, in cash in an amount equal to the fair market
value of the consideration other than cash. As used in this provision, the term
"Disposition" means any sale, exchange or other disposition of shares, including
any disposition in connection with any tender offer, merger, consolidation or
liquidation.
4. Representations and Warranties of the Stockholder. The Stockholder
-------------------------------------------------
represents and warrants to Parent and the Sub as follows:
(a) Power; Binding Agreement. The Stockholder has the legal capacity,
------------------------
power and authority to enter into and perform all of the Stockholder's
obligations under
3
<PAGE>
this agreement. The execution, delivery and performance of this agreement by the
Stockholder will not violate any other agreement to which the Stockholder is a
party or by which the Stockholder is bound, including, but not limited to, any
voting agreement, proxy arrangement, pledge agreement, shareholders agreement or
voting trust. This agreement has been duly and validly executed and delivered by
the Stockholder and constitutes a valid and binding obligation of the
Stockholder, enforceable against the Stockholder in accordance with its terms.
There is no beneficiary or holder of a voting trust certificate or other
interest of any trust of which the Stockholder is a trustee whose consent is
required for the execution and delivery of this agreement or the consummation by
the Stockholder of the transactions contemplated by this agreement.
(b) No Conflicts. Except for filings under the HSR Act, the Exchange
------------
Act and as set forth in Section 3.4 of the Disclosure Schedule to the Agreement,
(i) no filing with, and no permit, authorization, consent or approval of, any
Governmental Entity is required for the execution and delivery of this agreement
by the Stockholder and the consummation by the Stockholder of the transactions
contemplated by this agreement and (ii) the execution, delivery and performance
of this agreement by the Stockholder will not violate any agreement or other
obligation to which the Stockholder is a party or by which the Stockholder or
any of the Stockholder's properties or assets is bound or violate any order,
writ, injunction, decree, judgment, order, statute, rule or regulation
applicable to the Stockholder or any of the Stockholder's properties or assets.
(c) Ownership of Shares. The Stockholder is the record and beneficial
-------------------
owner of the number of shares of the Common Stock subject to this agreement set
forth opposite the Stockholder's name on Schedule I to this agreement, except as
set forth on Schedule I, those shares constitute all of the shares of the Common
Stock owned of record or beneficially by the Stockholder, and upon tender of
those shares to the Company and the purchase of the shares by the Company
pursuant to the Offer, the Company shall acquire valid title to those shares,
free and clear of any claims, liens, encumbrances, proxies, voting trusts or
agreements, understandings or arrangements or any other rights (collectively,
"Encumbrances"). Subject to applicable securities laws and the terms of this
agreement, the Stockholder has sole voting power and sole power to issue
instructions with respect to the matters set forth in sections 1,2 and 3 of this
agreement, sole power of disposition, sole power of conversion, sole power to
demand appraisal rights, and sole power to agree to all of the matters set forth
in this agreement, in each case with respect to all of the shares in the Company
beneficially owned by the Stockholder, with no limitations, qualifications or
restrictions on those rights.
(d) No Encumbrance. Except as permitted by this agreement, the shares
--------------
in the Company owned by the Stockholder of record or beneficially, and the
certificates representing those shares, are now, and at all times prior to the
purchase of those shares pursuant to the Offer will be, held by the Stockholder,
or by a nominee or custodian for the benefit of the Stockholder, free and clear
of all Encumbrances except for those arising under this agreement.
(e) No Finder's Fees. Except as set forth in Section 3.18 of the
----------------
Agreement, no broker, investment banker, financial advisor or other person is
entitled to any broker's, finder's, financial adviser's or other similar fee or
commission in connection with the transactions contemplated by this agreement
based upon arrangements made by or on
4
<PAGE>
behalf of the Stockholder.
5. Representations and Warranties of Parent and the Sub. Parent and the
----------------------------------------------------
Sub jointly and severally represent and warrant to the Stockholder as follows:
(a) Power: Binding Agreement. Each of Parent and the Sub has the
-------------------------
corporate power and authority to enter into and perform all of its obligations
under this agreement and the execution, delivery and performance of this
agreement by Parent and the Sub have been duly authorized by all necessary
partnership or corporate action. The execution, delivery and performance of
this agreement by each of Parent and the Sub will not violate any other
agreement to which either of them is a party or by which either of them is
bound. This agreement has been duly and validly executed and delivered by each
of Parent and the Sub and constitutes a valid and binding agreement of each of
Parent and the Sub, enforceable against each of them in accordance with its
terms.
(b) No Conflicts. Except for filings under the HSR Act and the
------------
Exchange Act, (i) no filing with, and no permit, authorization, consent or
approval of, any Governmental Entity is necessary for the execution of this
agreement by each of Parent and the Sub and the consummation by each of Parent
and the Sub of the transactions contemplated hereby and (ii) the execution,
delivery and performance of this agreement by each of Parent and the Sub will
not (A) conflict with or result in any breach of any organizational documents
applicable to either Parent or the Sub, (B) result in a violation or breach of,
or constitute (with or without notice or lapse of time or both) a default (or
give rise to any third party right of termination, cancellation, material
modification or acceleration) under, any of the terms, conditions or provisions
of any note, loan agreement, bond, mortgage, indenture, license, contract,
commitment, arrangement, understanding, agreement or other instrument or
obligation of any kind to which either Parent or the Sub is a party or by which
either Parent or the Sub or any of their respective properties or assets is
bound, or (C) violate any order, writ, injunction, decree, judgment, order,
statute, rule or regulation applicable to either Parent or the Sub or any of
their respective properties or assets.
6. Termination.
-----------
Except as provided in Section 3 of this agreement, this agreement
shall terminate upon the termination of the Agreement in accordance with its
terms. The termination of this agreement pursuant to this provision shall not
relieve any party of liability for any prior breach of its or his or her
obligations under this agreement.
5
<PAGE>
7. Definitions.
-----------
(a) Shares. Any reference in this agreement to the shares owned of
------
record or beneficially by the Stockholder shall be deemed to include shares
hereafter acquired by the Stockholder upon any stock dividend or distribution or
any change in the Company's Common Stock by reason of any split-up,
recapitalization, combination, exchange of shares or similar corporate action.
(b) Beneficial Ownership. For the purpose of this agreement,
--------------------
beneficial ownership with respect to any shares means beneficial ownership as
determined pursuant to Rule 13d-3 under the Securities Exchange Act of 1934, as
amended, including pursuant to any agreement, arrangement or understanding,
whether or not in writing.
(c) Agreement. Any reference to the "Agreement" refers to the
---------
Agreement executed on this date as it may hereafter be amended from time to
time.
8. Miscellaneous.
-------------
(a) Reliance by Parent. The Stockholder acknowledges that Stockholder
------------------
understands that Parent is entering into, and causing Sub to enter into, the
Agreement in reliance upon the Stockholder's execution, delivery and performance
of this agreement.
(b) Entire Agreement; No Oral Change. This agreement contains a
---------------------------------
compete statement of all of the arrangements among the parties with respect to
its subject matter, supersedes all prior agreements and understandings, written
and oral, among the parties with respect to that subject matter, and cannot be
changed or terminated except by an agreement in writing signed by all parties.
(c) Binding Agreement. This agreement and the obligations under this
-----------------
agreement shall attach to the shares owned of record and beneficially by the
Stockholder and shall be binding upon any such person or entity to which legal
or beneficial ownership of those shares shall pass, whether by operation of law
or otherwise, including, but not limited to, the Stockholder's heirs, guardians,
administrators or successors. The transferee of any shares shall remain liable
for the performance of all obligations of the transferor under this agreement.
(d) Assignment. None of the parties may assign any of its or his or
----------
her rights or delegate any of its or his or her duties under this agreement
without the prior written consent of the other parties.
(e) Notices. All notices and other communications hereunder shall be
-------
in writing and shall be deemed given if delivered personally, telecopied (which
is confirmed) or sent by an overnight courier service, such as Federal Express,
to the parties at the following addresses (or at such other address for a party
as shall be specified by like notice):
6
<PAGE>
(i) if to Parent or the Sub, to:
VS&A Communications Partners II, L.P.
350 Park Avenue
New York, New York 10022
Attn: Jeffrey T. Stevenson
President
with a copy to:
Proskauer Rose LLP
1585 Broadway
New York, New York 10036
Attn: Bertram A. Abrams, Esq.
(ii) if to the Stockholder, to:
Jenkin Lloyd Jones and Jenkin Lloyd Jones Jr.,
as Co-Trustees of the Revocable Inter Vivos
Trust of Jenkin Lloyd Jones
6683 South Jamestown Place
Tulsa, Oklahoma 74136
with a copy to:
Conner & Winters
2400 First Place Tower
15 East 5th Street
Tulsa, Oklahoma 74103
Attn: Robert A. Curry, Esq.
(f) Severability. Whenever possible, each provision or portion of any
------------
provision of this agreement shall be interpreted in such manner as to be
effective and valid under applicable law but if any provision or portion of any
provision of this agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable law or rule in any jurisdiction, such
invalidity, illegality or unenforceability will not affect any other provision
or portion of any provision in such jurisdiction, and this agreement shall be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision or portion of any provision had never been
contained in this agreement.
(g) Specific Performance. The Stockholder acknowledges that the
--------------------
Company's business is of a special, unique and extraordinary character, and that
any default in the performance of Stockholder's obligations under sections 1
and 2 of this agreement could not be compensated for by damages. Accordingly, if
the Stockholder defaults in the performance of Stockholder's obligations under
section 1 or 2 of this agreement, Parent and the Sub shall be entitled, in
addition to any other remedies that either of them may have, to enforcement of
this agreement by a decree of specific performance requiring the Stockholder to
fulfill those obligations, without any bond or other security being required and
without the necessity of showing actual damages.
(h) Remedies Cumulative. All rights, powers and remedies provided
-------------------
7
<PAGE>
under this agreement or otherwise available in respect hereof at law or in
equity shall be cumulative and not alternative, and the exercise of any right,
power or remedy by any party shall not preclude the simultaneous or later
exercise by that party of any other right, power or remedy.
(i) No Waiver. The failure of any party hereto to exercise any right,
---------
power or remedy provided under this agreement or otherwise available at law or
in equity, or to insist upon compliance by any other party with its obligations
under this agreement, and any custom or practice of the parties at variance with
the terms of this agreement, shall not constitute a waiver by that party of its
right to exercise any such or other right, power or remedy or to demand such
compliance.
(j) No Third Party Beneficiaries. This agreement is not intended to
----------------------------
be for the benefit of, and shall not be enforceable by, any person or entity who
or which is not a party hereto.
(k) Governing Law. This agreement shall be governed and construed in
-------------
accordance with the laws of the State of Delaware, without giving effect to the
principles of conflicts of law thereof.
(l) Jurisdiction. The courts of the State of Delaware and the United
------------
States District Court for the Southern District of New York shall have
jurisdiction over the parties with respect to any dispute or controversy among
them arising under or in connection with this agreement and, by execution and
delivery of this agreement, each of the parties to this agreement submits to the
jurisdiction of those courts, including, but not limited to, the in personam and
-----------
subject matter jurisdiction of those courts, waives any objection to such
jurisdiction on the grounds of venue or forum non conveniens, the absence of in
----- --- ---------- --
personam or subject matter jurisdiction and any similar grounds, consents to
- --------
service of process by mail (in accordance with section 8(e)) or any other manner
permitted by law, and irrevocably agrees to be bound by any judgment rendered
thereby in connection with this agreement. These consents to jurisdiction shall
not be deemed to confer rights on any person other than the parties to this
agreement.
8
<PAGE>
(m) Headings. The descriptive headings in this agreement are for
--------
convenience of reference only and are not intended to be part of or to affect
the meaning or interpretation of this agreement.
VS&A COMMUNICATIONS PARTNERS II, L.P.
By: /s/ Jeffrey T. Stevenson
------------------------------------
Jeffrey T. Stevenson
President and General Partner
VS&A-T/SF, INC.
By: /s/ Jeffrey T. Stevenson
------------------------------------
Jeffrey T. Stevenson
President and General Partner
JENKIN LLOYD JONES AND JENKIN LLOYD
JONES, JR. AS CO-TRUSTEES OF THE REVOCABLE
INTER VIVOS TRUST OF JENKIN LLOYD JONES
/s/ Jenkin Lloyd Jones
----------------------------------------
Jenkin Lloyd Jones
/s/ Jenkin Lloyd Jones, Jr.
----------------------------------------
Jenkin Lloyd Jones, Jr.
9
<PAGE>
SCHEDULE 1
<TABLE>
<CAPTION>
NUMBER OF SHARES NUMBER OF SHARES BENEFICIALLY
BENEFICIALLY OWNED OWNED EXCLUDED FROM THIS
SUBJECT TO THIS AGREEMENT (INDICATING
NAME OF STOCKHOLDER AGREEMENT CAPACITY OWNED)
- ------------------- -------------- -------------------------
<S> <C> <C>
Jenkin Lloyd Jones and 22,634 shares (i) See separate Stockholder Agreement
Jenkin Lloyd Jones Jr., as for Jenkin Lloyd Jones Jr.
Co-trustees of the Revocable (ii) 9,475 shares owned by Jenkin
Inter Vivos Trust of Jenkin Lloyd Jones, as Trustee of the
Lloyd Jones Jenkin Lloyd Jones Foundation
</TABLE>
<PAGE>
EXHIBIT (c)(10)
STOCKHOLDER AGREEMENT
---------------------
August 15, 1997
The parties to this agreement are VS&A Communications Partners II,
L.P., a Delaware limited partnership ("Parent"), VS&A-T/SF, Inc., a Delaware
corporation and a wholly owned subsidiary of Parent (the "Sub"), and David Lloyd
Jones (the "Stockholder").
Concurrently with the execution and delivery of this agreement,
Parent, the Sub, and T/SF Communications Corporation, a Delaware corporation
(the "Company"), are entering into a Stock Purchase Agreement the ("Agreement")
which provides inter alia, for the Company's cash tender offer (the "Offer") to
----- ----
purchase all of the Company's outstanding shares of common stock, par value $.10
per share ("Common Stock") at a price of $40.25 per share. As a condition to
entering into the Agreement, Parent has required that the Stockholder agree to
the terms of this agreement and, as an inducement to Parent and the Sub to enter
into the Agreement and proceed with the Offer, the Stockholder has agreed to
those terms as set forth below. Capitalized terms used end not defined in this
agreement have the meanings ascribed to them in the Agreement.
It is therefore agreed as follows:
1. Tender of Shares.
----------------
(a) Tender. Not later than the fifteenth business day after
------
commencement of the Offer pursuant to Section 1.1 of the Agreement, the
Stockholder shall validly tender (or cause the record owner of his Shares to
validly tender), in accordance with the terms of the Offer, the number of shares
of the Common Stock set forth opposite the Stockholder's name on Schedule I to
this agreement, all of which are beneficially owned by the Stockholder, together
with any additional shares of the Common Stock that the Stockholder acquires
record or beneficial ownership of after execution of this agreement except for
additional shares acquired in any capacity excepted from this agreement pursuant
to Schedule I.
(b) Authorization to Disclose. The Stockholder authorizes the
-------------------------
Company, Parent and the Sub to publish and disclose in the documents relating to
the Offer the Stockholder's identity and ownership of the Company's common stock
and the nature of the Stockholder's commitments, arrangements and understandings
under this agreement.
(c) Conditions. The Stockholder acknowledges that the Company's
----------
obligation to accept and pay for the Shares in the Offer, including the Shares
owned of record or beneficially by the Stockholder, is subject to the term and
conditions of the Offer.
<PAGE>
2. The Stockholder's Responsibilities with Respect to the Merger.
-------------------------------------------------------------
(a) Voting Agreement. The Stockholder shall, at any meeting of the
----------------
holders of Common Stock, however called, or in connection with any written
consent of the holders of Common Stock, vote (or cause to be voted) the Shares,
then held of record or beneficially owned by the Stockholder against any
Acquisition Proposal and against any action or agreement that would impede,
frustrate, prevent or nullify this agreement, or result in a breach in any
respect of any covenant, representation or warranty or any other obligation or
agreement of the Company under the Agreement or which would result in any of the
conditions set forth in Annex A to the Agreement or set forth in Article VI of
the Agreement not being fulfilled. The Stockholder shall not be required to take
any action in accordance with this provision, however, to the extent that the
Stockholder shall have been advised by counsel in writing that in the opinion of
such counsel, the taking of any such action would violate the Stockholder's
fiduciary duties to the Company's stockholders under applicable law, either in
the Stockholder's capacity as a stockholder of the Company or in the
Stockholder's capacity as a member of the Company's Board of Directors.
(b) No Solicitation. Upon execution of this agreement the Stockholder
---------------
immediately shall cease any activities, discussions or negotiations with other
parties with respect to any Acquisition Proposal and shall not, directly or
indirectly, encourage, solicit, participate in or initiate discussions or
negotiations with or provide any information to, any corporation, partnership,
person or other entity or group (other than Parent and any of its affiliates or
representatives) concerning any Acquisition Proposal, except that the
Stockholder may negotiate and participate in negotiations with any entity or
group concerning an Acquisition Proposal to the extent that the Company is
permitted to do so under section 5.4 of the Agreement. The Stockholder shall
immediately communicate to Parent the terms of any proposal, discussion,
negotiation or inquiry the Stockholder receives in his capacity as a stockholder
of the Company (and the Stockholder shall furnish to Parent copies of any
written materials received by the Stockholder in his capacity as a stockholder
of the Company, in connection with any such proposal, discussion, negotiation or
inquiry) and the identity of the party making such proposal or inquiry.
(c) No Transfer of Shares or Inconsistent Arrangements. Except as
--------------------------------------------------
contemplated by the Agreement or this agreement, the Stockholder shall not (i)
transfer (which term shall include, without limitation, any sale, gift, pledge
or other disposition), or consent to any transfer of, any or all of the Shares
in the Company held by the Stockholder of record or beneficially, (ii) enter
into any contract, option or other agreement or understanding with respect to
any transfer of any or all of those Shares or any interest therein, (iii) grant
any proxy, power-of-attorney or other authorization in or with respect to those
Shares, (iv) deposit any of those Shares into a voting trust or enter into a
voting agreement or arrangement with respect to any of those Shares, or (v) take
any other action that would in any way restrict, limit or interfere with the
performance of the Stockholder's obligations under this agreement or the
transactions contemplated by this agreement or by the Agreement. The
Stockholder shall not request that the Company register the transfer (book-entry
or otherwise) of any certificate or uncertificated interest representing any of
the Shares in the Company owned of record or beneficially by the Stockholder,
unless such transfer is made in compliance with this agreement.
2
<PAGE>
(d) Company Options. If the Stockholder holds Options to acquire
---------------
shares of Company Common Stock, Stockholder shall, if requested by the Company,
consent to the cancellation or substitution of those options in accordance with
the terms of the Agreement and shall execute all appropriate documentation in
connection with such cancellation or substitution.
(e) Reasonable Efforts. Subject to the terms and conditions of this
------------------
agreement, each of the parties to this agreement shall use reasonable efforts to
take or cause to be taken all such action as may be necessary, proper or
advisable under applicable laws and regulations to consummate the transactions
contemplated by this agreement and the Agreement. Each party shall promptly
consult with the other and provide any necessary information and material with
respect to all filings made by Stockholder with any Governmental entity in
connection with this agreement and the Agreement and the transactions
contemplated by this agreement and the Agreement.
(f) Further Assurances. Each party shall from time to time, at the
------------------
other party's request and without further consideration, execute and deliver
such additional documents and take such further lawful action as may be
necessary or desirable to consummate, in the most expeditious manner
practicable, the transactions contemplated by this agreement.
3. Profit on Disposition of Shares Other than Pursuant to the Offer.
----------------------------------------------------------------
If prior to the time of acceptance for payment of the shares pursuant
to the Offer (a) the Company's board of directors withdraws or modifies its
approval or recommendation of the Offer or the Agreement, approves or recommends
a Superior Proposal, or enters into an agreement with respect to a Superior
Proposal, and (b) within 12 months thereafter there is a Disposition of any or
all of the shares of the Company owned by the Stockholder either pursuant to the
Superior Proposal or pursuant to a different Acquisition Proposal for which an
agreement was entered into within six months thereafter, then, promptly upon
receipt by the Stockholder of the proceeds of the Disposition, the Stockholder
shall pay to Parent an amount equal to the first $1.50 per Share of additional
consideration received in connection with the Disposition and 50% of any
additional consideration in excess of $1.50 per Share received in connection
with the Disposition (including the fair market value of any property) as
compared to the consideration that would have been received pursuant to the
Offer. If all or any portion of the consideration received in connection with
the Disposition is other than cash, payment to Parent shall be made in kind or,
at the Stockholder's election, in cash in an amount equal to the fair market
value of the consideration other than cash. As used in this provision, the term
"Disposition" means any sale, exchange or other disposition of shares, including
any disposition in connection with any tender offer, merger, consolidation or
liquidation.
4. Representations and Warranties of the Stockholder. The Stockholder
-------------------------------------------------
represents and warrants to Parent and the Sub as follows:
(a) Power; Binding Agreement. The Stockholder has the legal capacity,
------------------------
power and authority to enter into and perform all of the Stockholder's
obligations under
3
<PAGE>
this agreement. The execution, delivery and performance of this agreement by the
Stockholder will not violate any other agreement to which the Stockholder is a
party or by which the Stockholder is bound, including, but not limited to, any
voting agreement, proxy arrangement, pledge agreement, shareholders agreement or
voting trust. This agreement has been duly and validly executed and delivered by
the Stockholder and constitutes a valid and binding obligation of the
Stockholder, enforceable against the Stockholder in accordance with its terms.
There is no beneficiary or holder of a voting trust certificate or other
interest of any trust of which the Stockholder is a trustee whose consent is
required for the execution and delivery of this agreement or the consummation by
the Stockholder of the transactions contemplated by this agreement.
(b) No Conflicts. Except for filings under the HSR Act, the Exchange
------------
Act and as set forth in Section 3.4 of the Disclosure Schedule to the Agreement,
(i) no filing with, and no permit, authorization, consent or approval of, any
Governmental Entity is required for the execution and delivery of this agreement
by the Stockholder and the consummation by the Stockholder of the transactions
contemplated by this agreement and (ii) the execution, delivery and performance
of this agreement by the Stockholder will not violate any agreement or other
obligation to which the Stockholder is a party or by which the Stockholder or
any of the Stockholder's properties or assets is bound or violate any order,
writ, injunction, decree, judgment, order, statute, rule or regulation
applicable to the Stockholder or any of the Stockholder's properties or assets.
(c) Ownership of Shares. The Stockholder is the record and beneficial
-------------------
owner of the number of shares of the Common Stock subject to this agreement set
forth opposite the Stockholder's name on Schedule I to this agreement, except as
set forth on Schedule I, those shares constitute all of the shares of the Common
Stock owned of record or beneficially by the Stockholder, and upon tender of
those shares to the Company and the purchase of the shares by the Company
pursuant to the Offer, the Company shall acquire valid title to those shares,
free and clear of any claims, liens, encumbrances, proxies, voting trusts or
agreements, understandings or arrangements or any other rights (collectively,
"Encumbrances"). Subject to applicable securities laws and the terms of this
agreement, the Stockholder has sole voting power and sole power to issue
instructions with respect to the matters set forth in sections 1,2 and 3 of this
agreement, sole power of disposition, sole power of conversion, sole power to
demand appraisal rights, and sole power to agree to all of the matters set forth
in this agreement, in each case with respect to all of the shares in the Company
beneficially owned by the Stockholder, with no limitations, qualifications or
restrictions on those rights.
(d) No Encumbrance. Except as permitted by this agreement, the shares
--------------
in the Company owned by the Stockholder of record or beneficially, and the
certificates representing those shares, are now, and at all times prior to the
purchase of those shares pursuant to the Offer will be, held by the Stockholder,
or by a nominee or custodian for the benefit of the Stockholder, free and clear
of all Encumbrances except for those arising under this agreement.
(e) No Finder's Fees. Except as set forth in Section 3.18 of the
----------------
Agreement, no broker, investment banker, financial advisor or other person is
entitled to any broker's, finder's, financial adviser's or other similar fee or
commission in connection with the transactions contemplated by this agreement
based upon arrangements made by
4
<PAGE>
or on behalf of the Stockholder.
5. Representations and Warranties of Parent and the Sub. Parent and the
----------------------------------------------------
Sub jointly and severally represent and warrant to the Stockholder as follows:
(a) Power: Binding Agreement. Each of Parent and the Sub has the
-------------------------
corporate power and authority to enter into and perform all of its obligations
under this agreement and the execution, delivery and performance of this
agreement by Parent and the Sub have been duly authorized by all necessary
partnership or corporate action. The execution, delivery and performance of
this agreement by each of Parent and the Sub will not violate any other
agreement to which either of them is a party or by which either of them is
bound. This agreement has been duly and validly executed and delivered by each
of Parent and the Sub and constitutes a valid and binding agreement of each of
Parent and the Sub, enforceable against each of them in accordance with its
terms.
(b) No Conflicts. Except for filings under the HSR Act and the
------------
Exchange Act, (i) no filing with, and no permit, authorization, consent or
approval of, any Governmental Entity is necessary for the execution of this
agreement by each of Parent and the Sub and the consummation by each of Parent
and the Sub of the transactions contemplated hereby and (ii) the execution,
delivery and performance of this agreement by each of Parent and the Sub will
not (A) conflict with or result in any breach of any organizational documents
applicable to either Parent or the Sub, (B) result in a violation or breach of,
or constitute (with or without notice or lapse of time or both) a default (or
give rise to any third party right of termination, cancellation, material
modification or acceleration) under, any of the terms, conditions or provisions
of any note, loan agreement, bond, mortgage, indenture, license, contract,
commitment, arrangement, understanding, agreement or other instrument or
obligation of any kind to which either Parent or the Sub is a party or by which
either Parent or the Sub or any of their respective properties or assets is
bound, or (C) violate any order, writ, injunction, decree, judgment, order,
statute, rule or regulation applicable to either Parent or the Sub or any of
their respective properties or assets.
6. Termination.
-----------
Except as provided in Section 3 of this agreement, this agreement
shall terminate upon the termination of the Agreement in accordance with its
terms. The termination of this agreement pursuant to this provision shall not
relieve any party of liability for any prior breach of its or his or her
obligations under this agreement.
7. Definitions.
-----------
(a) Shares. Any reference in this agreement to the shares owned of
------
record or beneficially by the Stockholder shall be deemed to include shares
hereafter acquired by the Stockholder upon any stock dividend or distribution or
any change in the Company's Common Stock by reason of any split-up,
recapitalization, combination, exchange of shares or similar corporate action.
(b) Beneficial Ownership. For the purpose of this agreement,
--------------------
beneficial ownership with respect to any shares means beneficial ownership as
determined
5
<PAGE>
pursuant to Rule 13d-3 under the Securities Exchange Act of 1934, as amended,
including pursuant to any agreement, arrangement or understanding, whether or
not in writing.
(c) Agreement. Any reference to the "Agreement" refers to the
---------
Agreement executed on this date as it may hereafter be amended from time to
time.
8. Miscellaneous.
-------------
(a) Reliance by Parent. The Stockholder acknowledges that Stockholder
------------------
understands that Parent is entering into, and causing Sub to enter into, the
Agreement in reliance upon the Stockholder's execution, delivery and performance
of this agreement.
(b) Entire Agreement; No Oral Change. This agreement contains a
---------------------------------
compete statement of all of the arrangements among the parties with respect to
its subject matter, supersedes all prior agreements and understandings, written
and oral, among the parties with respect to that subject matter, and cannot be
changed or terminated except by an agreement in writing signed by all parties.
(c) Binding Agreement. This agreement and the obligations under this
-----------------
agreement shall attach to the shares owned of record and beneficially by the
Stockholder and shall be binding upon any such person or entity to which legal
or beneficial ownership of those shares shall pass, whether by operation of law
or otherwise, including, but not limited to, the Stockholder's heirs, guardians,
administrators or successors. The transferee of any shares shall remain liable
for the performance of all obligations of the transferor under this agreement.
(d) Assignment. None of the parties may assign any of its or his or
----------
her rights or delegate any of its or his or her duties under this agreement
without the prior written consent of the other parties.
(e) Notices. All notices and other communications hereunder shall be
-------
in writing and shall be deemed given if delivered personally, telecopied (which
is confirmed) or sent by an overnight courier service, such as Federal Express,
to the parties at the following addresses (or at such other address for a party
as shall be specified by like notice):
6
<PAGE>
(i) if to Parent or the Sub, to:
VS&A Communications Partners II, L.P.
350 Park Avenue
New York, New York 10022
Attn: Jeffrey T. Stevenson
President
with a copy to:
Proskauer Rose LLP
1585 Broadway
New York, New York 10036
Attn: Bertram A. Abrams, Esq.
(ii) if to the Stockholder, to:
David Lloyd Jones
11312 South Erie
Tulsa, Oklahoma 74137
with a copy to:
Conner & Winters
2400 First Place Tower
15 East 5th Street
Tulsa, Oklahoma 74103
Attn: Robert A. Curry, Esq.
(f) Severability. Whenever possible, each provision or portion of any
------------
provision of this agreement shall be interpreted in such manner as to be
effective and valid under applicable law but if any provision or portion of any
provision of this agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable law or rule in any jurisdiction, such
invalidity, illegality or unenforceability will not affect any other provision
or portion of any provision in such jurisdiction, and this agreement shall be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision or portion of any provision had never been
contained in this agreement.
(g) Specific Performance. The Stockholder acknowledges that the
--------------------
Company's business is of a special, unique and extraordinary character, and that
any default in the performance of Stockholder's obligations under sections 1
and 2 of this agreement could not be compensated for by damages. Accordingly,
if the Stockholder defaults in the performance of Stockholder's obligations
under section 1 or 2 of this agreement, Parent and the Sub shall be entitled, in
addition to any other remedies that either of them may have, to enforcement of
this agreement by a decree of specific performance requiring the Stockholder to
fulfill those obligations, without any bond or other security being required and
without the necessity of showing actual damages.
7
<PAGE>
(h) Remedies Cumulative. All rights, powers and remedies provided
-------------------
under this agreement or otherwise available in respect hereof at law or in
equity shall be cumulative and not alternative, and the exercise of any right,
power or remedy by any party shall not preclude the simultaneous or later
exercise by that party of any other right, power or remedy.
(i) No Waiver. The failure of any party hereto to exercise any right,
---------
power or remedy provided under this agreement or otherwise available at law or
in equity, or to insist upon compliance by any other party with its obligations
under this agreement, and any custom or practice of the parties at variance with
the terms of this agreement, shall not constitute a waiver by that party of its
right to exercise any such or other right, power or remedy or to demand such
compliance.
(j) No Third Party Beneficiaries. This agreement is not intended to
----------------------------
be for the benefit of, and shall not be enforceable by, any person or entity who
or which is not a party hereto.
(k) Governing Law. This agreement shall be governed and construed in
-------------
accordance with the laws of the State of Delaware, without giving effect to the
principles of conflicts of law thereof.
(l) Jurisdiction. The courts of the State of Delaware and the United
------------
States District Court for the Southern District of New York shall have
jurisdiction over the parties with respect to any dispute or controversy among
them arising under or in connection with this agreement and, by execution and
delivery of this agreement, each of the parties to this agreement submits to the
jurisdiction of those courts, including, but not limited to, the in personam and
-----------
subject matter jurisdiction of those courts, waives any objection to such
jurisdiction on the grounds of venue or forum non conveniens, the absence of in
----- --- ---------- --
personam or subject matter jurisdiction and any similar grounds, consents to
- --------
service of process by mail (in accordance with section 8(e)) or any other manner
permitted by law, and irrevocably agrees to be bound by any judgment rendered
thereby in connection with this agreement. These consents to jurisdiction shall
not be deemed to confer rights on any person other than the parties to this
agreement.
8
<PAGE>
(m) Headings. The descriptive headings in this agreement are for
--------
convenience of reference only and are not intended to be part of or to affect
the meaning or interpretation of this agreement.
VS&A COMMUNICATIONS PARTNERS II, L.P.
By: /s/ Jeffrey T. Stevenson
-----------------------------------------
Jeffrey T. Stevenson
President and General Partner
VS&A-T/SF, INC.
By: /s/ Jeffrey T. Stevenson
-----------------------------------------
Jeffrey T. Stevenson
President and General Partner
/s/ David Lloyd Jones
--------------------------------------------
David Lloyd Jones
9
<PAGE>
SCHEDULE 1
<TABLE>
<CAPTION>
NUMBER OF SHARES NUMBER OF SHARES BENEFICIALLY
BENEFICIALLY OWNED OWNED EXCLUDED FROM THIS
SUBJECT TO THIS AGREEMENT (INDICATING
NAME OF STOCKHOLDER AGREEMENT CAPACITY OWNED)
- ------------------- --------------- ----------------------
<S> <C> <C>
David Lloyd Jones 56,821 shares (i) 2,194 shares held by David Lloyd
as custodian for Alicia Lloyd
Jones under the Uniform Gift to
Minors Act
(ii) 2,194 shares held by David Lloyd
Jones as custodian for Melissa Lloyd
Jones
(iii) 4,641 shares held by Martha Jones,
wife of David Lloyd Jones
</TABLE>
<PAGE>
EXHIBIT (c)(11)
STOCKHOLDER AGREEMENT
---------------------
August 15, 1997
The parties to this agreement are VS&A Communications Partners II,
L.P., a Delaware limited partnership ("Parent"), VS&A-T/SF, Inc., a Delaware
corporation and a wholly owned subsidiary of Parent (the "Sub"), and Florence
Lloyd Jones Barnett, as Trustee of the Florence Lloyd Jones Barnett Charitable
Remainder Unitrust (the "Stockholder").
Concurrently with the execution and delivery of this agreement,
Parent, the Sub, and T/SF Communications Corporation, a Delaware corporation
(the "Company"), are entering into a Stock Purchase Agreement the ("Agreement")
which provides inter alia, for the Company's cash tender offer (the "Offer") to
----- ----
purchase all of the Company's outstanding shares of common stock, par value $.10
per share ("Common Stock") at a price of $40.25 per share. As a condition to
entering into the Agreement, Parent has required that the Stockholder agree to
the terms of this agreement and, as an inducement to Parent and the Sub to enter
into the Agreement and proceed with the Offer, the Stockholder has agreed to
those terms as set forth below. Capitalized terms used end not defined in this
agreement have the meanings ascribed to them in the Agreement.
It is therefore agreed as follows:
1. Tender of Shares.
----------------
(a) Tender. Not later than the fifteenth business day after
------
commencement of the Offer pursuant to Section 1.1 of the Agreement, the
Stockholder shall validly tender (or cause the record owner of his Shares to
validly tender), in accordance with the terms of the Offer, the number of shares
of the Common Stock set forth opposite the Stockholder's name on Schedule I to
this agreement, all of which are beneficially owned by the Stockholder, together
with any additional shares of the Common Stock that the Stockholder acquires
record or beneficial ownership of after execution of this agreement except for
additional shares acquired in any capacity excepted from this agreement pursuant
to Schedule I.
(b) Authorization to Disclose. The Stockholder authorizes the
-------------------------
Company, Parent and the Sub to publish and disclose in the documents relating to
the Offer the Stockholder's identity and ownership of the Company's common stock
and the nature of the Stockholder's commitments, arrangements and understandings
under this agreement.
(c) Conditions. The Stockholder acknowledges that the Company's
----------
obligation to accept and pay for the Shares in the Offer, including the Shares
owned of record or beneficially by the Stockholder, is subject to the term and
conditions of the Offer.
<PAGE>
2. The Stockholder's Responsibilities with Respect to the Merger.
-------------------------------------------------------------
(a) Voting Agreement. The Stockholder shall, at any meeting of the
----------------
holders of Common Stock, however called, or in connection with any written
consent of the holders of Common Stock, vote (or cause to be voted) the Shares,
then held of record or beneficially owned by the Stockholder against any
Acquisition Proposal and against any action or agreement that would impede,
frustrate, prevent or nullify this agreement, or result in a breach in any
respect of any covenant, representation or warranty or any other obligation or
agreement of the Company under the Agreement or which would result in any of the
conditions set forth in Annex A to the Agreement or set forth in Article VI of
the Agreement not being fulfilled. The Stockholder shall not be required to
take any action in accordance with this provision, however, to the extent that
the Stockholder shall have been advised by counsel in writing that in the
opinion of such counsel, the taking of any such action would violate the
Stockholder's fiduciary duties to the Company's stockholders under applicable
law, either in the Stockholder's capacity as a stockholder of the Company or in
the Stockholder's capacity as a member of the Company's Board of Directors.
(b) No Solicitation. Upon execution of this agreement the Stockholder
---------------
immediately shall cease any activities, discussions or negotiations with other
parties with respect to any Acquisition Proposal and shall not, directly or
indirectly, encourage, solicit, participate in or initiate discussions or
negotiations with or provide any information to, any corporation, partnership,
person or other entity or group (other than Parent and any of its affiliates or
representatives) concerning any Acquisition Proposal, except that the
Stockholder may negotiate and participate in negotiations with any entity or
group concerning an Acquisition Proposal to the extent that the Company is
permitted to do so under section 5.4 of the Agreement. The Stockholder shall
immediately communicate to Parent the terms of any proposal, discussion,
negotiation or inquiry the Stockholder receives in his capacity as a stockholder
of the Company (and the Stockholder shall furnish to Parent copies of any
written materials received by the Stockholder in his capacity as a stockholder
of the Company, in connection with any such proposal, discussion, negotiation or
inquiry) and the identity of the party making such proposal or inquiry.
(c) No Transfer of Shares or Inconsistent Arrangements. Except as
--------------------------------------------------
contemplated by the Agreement or this agreement, the Stockholder shall not (i)
transfer (which term shall include, without limitation, any sale, gift, pledge
or other disposition), or consent to any transfer of, any or all of the Shares
in the Company held by the Stockholder of record or beneficially, (ii) enter
into any contract, option or other agreement or understanding with respect to
any transfer of any or all of those Shares or any interest therein, (iii) grant
any proxy, power-of-attorney or other authorization in or with respect to those
Shares, (iv) deposit any of those Shares into a voting trust or enter into a
voting agreement or arrangement with respect to any of those Shares, or (v) take
any other action that would in any way restrict, limit or interfere with the
performance of the Stockholder's obligations under this agreement or the
transactions contemplated by this agreement or by the Agreement. The
Stockholder shall not request that the Company register the transfer (book-entry
or otherwise) of any certificate or uncertificated interest representing any of
the Shares in the Company owned of record or beneficially by the Stockholder,
unless such transfer is made in compliance with this agreement.
(d) Company Options. If the Stockholder holds Options to acquire
---------------
shares of Company
2
<PAGE>
Common Stock, Stockholder shall, if requested by the Company, consent to the
cancellation or substitution of those options in accordance with the terms of
the Agreement and shall execute all appropriate documentation in connection with
such cancellation or substitution.
(e) Reasonable Efforts. Subject to the terms and conditions of this
------------------
agreement, each of the parties to this agreement shall use reasonable efforts to
take or cause to be taken all such action as may be necessary, proper or
advisable under applicable laws and regulations to consummate the transactions
contemplated by this agreement and the Agreement. Each party shall promptly
consult with the other and provide any necessary information and material with
respect to all filings made by Stockholder with any Governmental entity in
connection with this agreement and the Agreement and the transactions
contemplated by this agreement and the Agreement.
(f) Further Assurances. Each party shall from time to time, at the
------------------
other party's request and without further consideration, execute and deliver
such additional documents and take such further lawful action as may be
necessary or desirable to consummate, in the most expeditious manner
practicable, the transactions contemplated by this agreement.
3. Profit on Disposition of Shares Other than Pursuant to the Offer.
----------------------------------------------------------------
If prior to the time of acceptance for payment of the shares pursuant
to the Offer (a) the Company's board of directors withdraws or modifies its
approval or recommendation of the Offer or the Agreement, approves or recommends
a Superior Proposal, or enters into an agreement with respect to a Superior
Proposal, and (b) within 12 months thereafter there is a Disposition of any or
all of the shares of the Company owned by the Stockholder either pursuant to the
Superior Proposal or pursuant to a different Acquisition Proposal for which an
agreement was entered into within six months thereafter, then, promptly upon
receipt by the Stockholder of the proceeds of the Disposition, the Stockholder
shall pay to Parent an amount equal to the first $1.50 per Share of additional
consideration received in connection with the Disposition and 50% of any
additional consideration in excess of $1.50 per Share received in connection
with the Disposition (including the fair market value of any property) as
compared to the consideration that would have been received pursuant to the
Offer. If all or any portion of the consideration received in connection with
the Disposition is other than cash, payment to Parent shall be made in kind or,
at the Stockholder's election, in cash in an amount equal to the fair market
value of the consideration other than cash. As used in this provision, the term
"Disposition" means any sale, exchange or other disposition of shares, including
any disposition in connection with any tender offer, merger, consolidation or
liquidation.
4. Representations and Warranties of the Stockholder. The Stockholder
-------------------------------------------------
represents and warrants to Parent and the Sub as follows:
(a) Power; Binding Agreement. The Stockholder has the legal capacity,
------------------------
power and authority to enter into and perform all of the Stockholder's
obligations under this agreement. The execution, delivery and performance of
this agreement by the Stockholder will not violate any other agreement to which
the Stockholder is a party or by which the Stockholder is bound, including, but
not limited to, any voting agreement, proxy arrangement, pledge agreement,
shareholders agreement or voting trust. This agreement has
3
<PAGE>
been duly and validly executed and delivered by the Stockholder and constitutes
a valid and binding obligation of the Stockholder, enforceable against the
Stockholder in accordance with its terms. There is no beneficiary or holder of a
voting trust certificate or other interest of any trust of which the Stockholder
is a trustee whose consent is required for the execution and delivery of this
agreement or the consummation by the Stockholder of the transactions
contemplated by this agreement.
(b) No Conflicts. Except for filings under the HSR Act, the Exchange
------------
Act and as set forth in Section 3.4 of the Disclosure Schedule to the Agreement,
(i) no filing with, and no permit, authorization, consent or approval of, any
Governmental Entity is required for the execution and delivery of this agreement
by the Stockholder and the consummation by the Stockholder of the transactions
contemplated by this agreement and (ii) the execution, delivery and performance
of this agreement by the Stockholder will not violate any agreement or other
obligation to which the Stockholder is a party or by which the Stockholder or
any of the Stockholder's properties or assets is bound or violate any order,
writ, injunction, decree, judgment, order, statute, rule or regulation
applicable to the Stockholder or any of the Stockholder's properties or assets.
(c) Ownership of Shares. The Stockholder is the record and beneficial
-------------------
owner of the number of shares of the Common Stock subject to this agreement set
forth opposite the Stockholder's name on Schedule I to this agreement, except as
set forth on Schedule I, those shares constitute all of the shares of the Common
Stock owned of record or beneficially by the Stockholder, and upon tender of
those shares to the Company and the purchase of the shares by the Company
pursuant to the Offer, the Company shall acquire valid title to those shares,
free and clear of any claims, liens, encumbrances, proxies, voting trusts or
agreements, understandings or arrangements or any other rights (collectively,
"Encumbrances"). Subject to applicable securities laws and the terms of this
agreement, the Stockholder has sole voting power and sole power to issue
instructions with respect to the matters set forth in sections 1,2 and 3 of this
agreement, sole power of disposition, sole power of conversion, sole power to
demand appraisal rights, and sole power to agree to all of the matters set forth
in this agreement, in each case with respect to all of the shares in the Company
beneficially owned by the Stockholder, with no limitations, qualifications or
restrictions on those rights.
(d) No Encumbrance. Except as permitted by this agreement, the shares
--------------
in the Company owned by the Stockholder of record or beneficially, and the
certificates representing those shares, are now, and at all times prior to the
purchase of those shares pursuant to the Offer will be, held by the Stockholder,
or by a nominee or custodian for the benefit of the Stockholder, free and clear
of all Encumbrances except for those arising under this agreement.
(e) No Finder's Fees. Except as set forth in Section 3.18 of the
----------------
Agreement, no broker, investment banker, financial advisor or other person is
entitled to any broker's, finder's, financial adviser's or other similar fee or
commission in connection with the transactions contemplated by this agreement
based upon arrangements made by or on behalf of the Stockholder.
5. Representations and Warranties of Parent and the Sub. Parent and the
----------------------------------------------------
Sub jointly and severally represent and warrant to the Stockholder as follows:
4
<PAGE>
(a) Power: Binding Agreement. Each of Parent and the Sub has the
-------------------------
corporate power and authority to enter into and perform all of its obligations
under this agreement and the execution, delivery and performance of this
agreement by Parent and the Sub have been duly authorized by all necessary
partnership or corporate action. The execution, delivery and performance of
this agreement by each of Parent and the Sub will not violate any other
agreement to which either of them is a party or by which either of them is
bound. This agreement has been duly and validly executed and delivered by each
of Parent and the Sub and constitutes a valid and binding agreement of each of
Parent and the Sub, enforceable against each of them in accordance with its
terms.
(b) No Conflicts. Except for filings under the HSR Act and the
------------
Exchange Act, (i) no filing with, and no permit, authorization, consent or
approval of, any Governmental Entity is necessary for the execution of this
agreement by each of Parent and the Sub and the consummation by each of Parent
and the Sub of the transactions contemplated hereby and (ii) the execution,
delivery and performance of this agreement by each of Parent and the Sub will
not (A) conflict with or result in any breach of any organizational documents
applicable to either Parent or the Sub, (B) result in a violation or breach of,
or constitute (with or without notice or lapse of time or both) a default (or
give rise to any third party right of termination, cancellation, material
modification or acceleration) under, any of the terms, conditions or provisions
of any note, loan agreement, bond, mortgage, indenture, license, contract,
commitment, arrangement, understanding, agreement or other instrument or
obligation of any kind to which either Parent or the Sub is a party or by which
either Parent or the Sub or any of their respective properties or assets is
bound, or (C) violate any order, writ, injunction, decree, judgment, order,
statute, rule or regulation applicable to either Parent or the Sub or any of
their respective properties or assets.
6. Termination.
-----------
Except as provided in Section 3 of this agreement, this agreement
shall terminate upon the termination of the Agreement in accordance with its
terms. The termination of this agreement pursuant to this provision shall not
relieve any party of liability for any prior breach of its or his or her
obligations under this agreement.
5
<PAGE>
7. Definitions.
-----------
(a) Shares. Any reference in this agreement to the shares owned of
------
record or beneficially by the Stockholder shall be deemed to include shares
hereafter acquired by the Stockholder upon any stock dividend or distribution or
any change in the Company's Common Stock by reason of any split-up,
recapitalization, combination, exchange of shares or similar corporate action.
(b) Beneficial Ownership. For the purpose of this agreement,
--------------------
beneficial ownership with respect to any shares means beneficial ownership as
determined pursuant to Rule 13d-3 under the Securities Exchange Act of 1934, as
amended, including pursuant to any agreement, arrangement or understanding,
whether or not in writing.
(c) Agreement. Any reference to the "Agreement" refers to the
---------
Agreement executed on this date as it may hereafter be amended from time to
time.
8. Miscellaneous.
-------------
(a) Reliance by Parent. The Stockholder acknowledges that Stockholder
------------------
understands that Parent is entering into, and causing Sub to enter into, the
Agreement in reliance upon the Stockholder's execution, delivery and performance
of this agreement.
(b) Entire Agreement; No Oral Change. This agreement contains a
---------------------------------
compete statement of all of the arrangements among the parties with respect to
its subject matter, supersedes all prior agreements and understandings, written
and oral, among the parties with respect to that subject matter, and cannot be
changed or terminated except by an agreement in writing signed by all parties.
(c) Binding Agreement. This agreement and the obligations under this
-----------------
agreement shall attach to the shares owned of record and beneficially by the
Stockholder and shall be binding upon any such person or entity to which legal
or beneficial ownership of those shares shall pass, whether by operation of law
or otherwise, including, but not limited to, the Stockholder's heirs, guardians,
administrators or successors. The transferee of any shares shall remain liable
for the performance of all obligations of the transferor under this agreement.
(d) Assignment. None of the parties may assign any of its or his or
----------
her rights or delegate any of its or his or her duties under this agreement
without the prior written consent of the other parties.
(e) Notices. All notices and other communications hereunder shall be
-------
in writing and shall be deemed given if delivered personally, telecopied (which
is confirmed) or sent by an overnight courier service, such as Federal Express,
to the parties at the following addresses (or at such other address for a party
as shall be specified by like notice):
6
<PAGE>
(i) if to Parent or the Sub, to:
VS&A Communications Partners II, L.P.
350 Park Avenue
New York, New York 10022
Attn: Jeffrey T. Stevenson
President
with a copy to:
Proskauer Rose LLP
1585 Broadway
New York, New York 10036
Attn: Bertram A. Abrams, Esq.
(ii) if to the Stockholder, to:
Florence Lloyd Jones Barnett, as Trustee of the Florence
Lloyd Jones Barnett Charitable Remainder Unitrust
2619 East 37th Street
Tulsa, Oklahoma 74105
with a copy to:
Conner & Winters
2400 First Place Tower
15 East 5th Street
Tulsa, Oklahoma 74103
Attn: Robert A. Curry, Esq.
(f) Severability. Whenever possible, each provision or portion of any
------------
provision of this agreement shall be interpreted in such manner as to be
effective and valid under applicable law but if any provision or portion of any
provision of this agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable law or rule in any jurisdiction, such
invalidity, illegality or unenforceability will not affect any other provision
or portion of any provision in such jurisdiction, and this agreement shall be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision or portion of any provision had never been
contained in this agreement.
(g) Specific Performance. The Stockholder acknowledges that the
--------------------
Company's business is of a special, unique and extraordinary character, and that
any default in the performance of Stockholder's obligations under sections 1
and 2 of this agreement could not be compensated for by damages. Accordingly,
if the Stockholder defaults in the performance of Stockholder's obligations
under section 1 or 2 of this agreement, Parent and the Sub shall be entitled, in
addition to any other remedies that either of them may have, to enforcement of
this agreement by a decree of specific performance requiring the Stockholder to
fulfill
7
<PAGE>
those obligations, without any bond or other security being required and without
the necessity of showing actual damages.
(h) Remedies Cumulative. All rights, powers and remedies provided
-------------------
under this agreement or otherwise available in respect hereof at law or in
equity shall be cumulative and not alternative, and the exercise of any right,
power or remedy by any party shall not preclude the simultaneous or later
exercise by that party of any other right, power or remedy.
(i) No Waiver. The failure of any party hereto to exercise any right,
---------
power or remedy provided under this agreement or otherwise available at law or
in equity, or to insist upon compliance by any other party with its obligations
under this agreement, and any custom or practice of the parties at variance with
the terms of this agreement, shall not constitute a waiver by that party of its
right to exercise any such or other right, power or remedy or to demand such
compliance.
(j) No Third Party Beneficiaries. This agreement is not intended to
----------------------------
be for the benefit of, and shall not be enforceable by, any person or entity who
or which is not a party hereto.
(k) Governing Law. This agreement shall be governed and construed in
-------------
accordance with the laws of the State of Delaware, without giving effect to the
principles of conflicts of law thereof.
(l) Jurisdiction. The courts of the State of Delaware and the United
------------
States District Court for the Southern District of New York shall have
jurisdiction over the parties with respect to any dispute or controversy among
them arising under or in connection with this agreement and, by execution and
delivery of this agreement, each of the parties to this agreement submits to the
jurisdiction of those courts, including, but not limited to, the in personam and
-----------
subject matter jurisdiction of those courts, waives any objection to such
jurisdiction on the grounds of venue or forum non conveniens, the absence of in
----- --- ---------- --
personam or subject matter jurisdiction and any similar grounds, consents to
- --------
service of process by mail (in accordance with section 8(e)) or any other manner
permitted by law, and irrevocably agrees to be bound by any judgment rendered
thereby in connection with this agreement. These consents to jurisdiction shall
not be deemed to confer rights on any person other than the parties to this
agreement.
8
<PAGE>
(m) Headings. The descriptive headings in this agreement are for
--------
convenience of reference only and are not intended to be part of or to affect
the meaning or interpretation of this agreement.
VS&A COMMUNICATIONS PARTNERS II, L.P.
By: /s/ Jeffrey T. Stevenson
----------------------------------------
Jeffrey T. Stevenson
President and General Partner
VS&A-T/SF, INC.
By: /s/ Jeffrey T. Stevenson
----------------------------------------
Jeffrey T. Stevenson
President and General Partner
FLORENCE LLOYD JONES BARNETT, AS
TRUSTEE OF THE FLORENCE LLOYD JONES
BARNETT CHARITABLE REMAINDER UNITRUST
/s/ Florence Lloyd Jones Barnett
-------------------------------------------
Florence Lloyd Jones Barnett
9
<PAGE>
SCHEDULE 1
<TABLE>
<CAPTION>
NUMBER OF SHARES NUMBER OF SHARES BENEFICIALLY
BENEFICIALLY OWNED OWNED EXCLUDED FROM THIS
SUBJECT TO THIS AGREEMENT (INDICATING
NAME OF STOCKHOLDER AGREEMENT CAPACITY OWNED)
- ------------------- --------------- ----------------------
<S> <C> <C>
Florence Lloyd Jones Barnett, 192,100 shares See separate Stockholder
as Trustee of the Florence Agreements for:
Lloyd Jones Barnett Charitable
Remainder Unitrust (i) Florence Lloyd Jones Barnett and
Howard G. Barnett, Jr., as Co-
trustees of the Revocable Inter Vivos
Trust of Florence Lloyd Jones
Barnett
(ii) Howard G. Barnett, Sr., and Howard
G. Barnett, Jr., as Co-
trustees of the Revocable Inter Vivos Trust of
Howard G. Barnett, Sr.
(iii) Florence Lloyd Jones Barnett and
Howard G. Barnett, Sr., as Co-
trustee s of The Florence L. J. and
Howard G. Barnett Foundation
</TABLE>
<PAGE>
EXHIBIT (c)(12)
STOCKHOLDER AGREEMENT
---------------------
August 15, 1997
The parties to this agreement are VS&A Communications Partners II,
L.P., a Delaware limited partnership ("Parent"), VS&A-T/SF, Inc., a Delaware
corporation and a wholly owned subsidiary of Parent (the "Sub"), and Florence
Lloyd Jones Barnett and Howard G. Barnett, Sr., as Co-Trustees of The Florence
L. J. and Howard G. Barnett Foundation (the "Stockholder").
Concurrently with the execution and delivery of this agreement,
Parent, the Sub, and T/SF Communications Corporation, a Delaware corporation
(the "Company"), are entering into a Stock Purchase Agreement the ("Agreement")
which provides inter alia, for the Company's cash tender offer (the "Offer") to
----- ----
purchase all of the Company's outstanding shares of common stock, par value $.10
per share ("Common Stock") at a price of $40.25 per share. As a condition to
entering into the Agreement, Parent has required that the Stockholder agree to
the terms of this agreement and, as an inducement to Parent and the Sub to enter
into the Agreement and proceed with the Offer, the Stockholder has agreed to
those terms as set forth below. Capitalized terms used end not defined in this
agreement have the meanings ascribed to them in the Agreement.
It is therefore agreed as follows:
1. Tender of Shares.
----------------
(a) Tender. Not later than the fifteenth business day after
------
commencement of the Offer pursuant to Section 1.1 of the Agreement, the
Stockholder shall validly tender (or cause the record owner of his Shares to
validly tender), in accordance with the terms of the Offer, the number of shares
of the Common Stock set forth opposite the Stockholder's name on Schedule I to
this agreement, all of which are beneficially owned by the Stockholder, together
with any additional shares of the Common Stock that the Stockholder acquires
record or beneficial ownership of after execution of this agreement except for
additional shares acquired in any capacity excepted from this agreement pursuant
to Schedule I.
(b) Authorization to Disclose. The Stockholder authorizes the
-------------------------
Company, Parent and the Sub to publish and disclose in the documents relating to
the Offer the Stockholder's identity and ownership of the Company's common stock
and the nature of the Stockholder's commitments, arrangements and understandings
under this agreement.
(c) Conditions. The Stockholder acknowledges that the Company's
----------
obligation to accept and pay for the Shares in the Offer, including the Shares
owned of record or beneficially by the Stockholder, is subject to the term and
conditions of the Offer.
<PAGE>
2. The Stockholder's Responsibilities with Respect to the Merger.
-------------------------------------------------------------
(a) Voting Agreement. The Stockholder shall, at any meeting of the
----------------
holders of Common Stock, however called, or in connection with any written
consent of the holders of Common Stock, vote (or cause to be voted) the Shares,
then held of record or beneficially owned by the Stockholder against any
Acquisition Proposal and against any action or agreement that would impede,
frustrate, prevent or nullify this agreement, or result in a breach in any
respect of any covenant, representation or warranty or any other obligation or
agreement of the Company under the Agreement or which would result in any of the
conditions set forth in Annex A to the Agreement or set forth in Article VI of
the Agreement not being fulfilled. The Stockholder shall not be required to
take any action in accordance with this provision, however, to the extent that
the Stockholder shall have been advised by counsel in writing that in the
opinion of such counsel, the taking of any such action would violate the
Stockholder's fiduciary duties to the Company's stockholders under applicable
law, either in the Stockholder's capacity as a stockholder of the Company or in
the Stockholder's capacity as a member of the Company's Board of Directors.
(b) No Solicitation. Upon execution of this agreement the Stockholder
---------------
immediately shall cease any activities, discussions or negotiations with other
parties with respect to any Acquisition Proposal and shall not, directly or
indirectly, encourage, solicit, participate in or initiate discussions or
negotiations with or provide any information to, any corporation, partnership,
person or other entity or group (other than Parent and any of its affiliates or
representatives) concerning any Acquisition Proposal, except that the
Stockholder may negotiate and participate in negotiations with any entity or
group concerning an Acquisition Proposal to the extent that the Company is
permitted to do so under section 5.4 of the Agreement. The Stockholder shall
immediately communicate to Parent the terms of any proposal, discussion,
negotiation or inquiry the Stockholder receives in his capacity as a stockholder
of the Company (and the Stockholder shall furnish to Parent copies of any
written materials received by the Stockholder in his capacity as a stockholder
of the Company, in connection with any such proposal, discussion, negotiation or
inquiry) and the identity of the party making such proposal or inquiry.
(c) No Transfer of Shares or Inconsistent Arrangements. Except as
--------------------------------------------------
contemplated by the Agreement or this agreement, the Stockholder shall not (i)
transfer (which term shall include, without limitation, any sale, gift, pledge
or other disposition), or consent to any transfer of, any or all of the Shares
in the Company held by the Stockholder of record or beneficially, (ii) enter
into any contract, option or other agreement or understanding with respect to
any transfer of any or all of those Shares or any interest therein, (iii) grant
any proxy, power-of-attorney or other authorization in or with respect to those
Shares, (iv) deposit any of those Shares into a voting trust or enter into a
voting agreement or arrangement with respect to any of those Shares, or (v) take
any other action that would in any way restrict, limit or interfere with the
performance of the Stockholder's obligations under this agreement or the
transactions contemplated by this agreement or by the Agreement. The
Stockholder shall not request that the Company register the transfer (book-entry
or otherwise) of any certificate or uncertificated interest representing any of
the Shares in the Company owned of record or beneficially by the Stockholder,
unless such transfer is made in compliance with this agreement.
(d) Company Options. If the Stockholder holds Options to acquire
---------------
shares of Company
2
<PAGE>
Common Stock, Stockholder shall, if requested by the Company, consent to the
cancellation or substitution of those options in accordance with the terms of
the Agreement and shall execute all appropriate documentation in connection with
such cancellation or substitution.
(e) Reasonable Efforts. Subject to the terms and conditions of this
------------------
agreement, each of the parties to this agreement shall use reasonable efforts to
take or cause to be taken all such action as may be necessary, proper or
advisable under applicable laws and regulations to consummate the transactions
contemplated by this agreement and the Agreement. Each party shall promptly
consult with the other and provide any necessary information and material with
respect to all filings made by Stockholder with any Governmental entity in
connection with this agreement and the Agreement and the transactions
contemplated by this agreement and the Agreement.
(f) Further Assurances. Each party shall from time to time, at the
------------------
other party's request and without further consideration, execute and deliver
such additional documents and take such further lawful action as may be
necessary or desirable to consummate, in the most expeditious manner
practicable, the transactions contemplated by this agreement.
3. Profit on Disposition of Shares Other than Pursuant to the Offer.
----------------------------------------------------------------
If prior to the time of acceptance for payment of the shares pursuant
to the Offer (a) the Company's board of directors withdraws or modifies its
approval or recommendation of the Offer or the Agreement, approves or recommends
a Superior Proposal, or enters into an agreement with respect to a Superior
Proposal, and (b) within 12 months thereafter there is a Disposition of any or
all of the shares of the Company owned by the Stockholder either pursuant to the
Superior Proposal or pursuant to a different Acquisition Proposal for which an
agreement was entered into within six months thereafter, then, promptly upon
receipt by the Stockholder of the proceeds of the Disposition, the Stockholder
shall pay to Parent an amount equal to the first $1.50 per Share of additional
consideration received in connection with the Disposition and 50% of any
additional consideration in excess of $1.50 per Share received in connection
with the Disposition (including the fair market value of any property) as
compared to the consideration that would have been received pursuant to the
Offer. If all or any portion of the consideration received in connection with
the Disposition is other than cash, payment to Parent shall be made in kind or,
at the Stockholder's election, in cash in an amount equal to the fair market
value of the consideration other than cash. As used in this provision, the term
"Disposition" means any sale, exchange or other disposition of shares, including
any disposition in connection with any tender offer, merger, consolidation or
liquidation.
4. Representations and Warranties of the Stockholder. The Stockholder
-------------------------------------------------
represents and warrants to Parent and the Sub as follows:
(a) Power; Binding Agreement. The Stockholder has the legal capacity,
------------------------
power and authority to enter into and perform all of the Stockholder's
obligations under this agreement. The execution, delivery and performance of
this agreement by the Stockholder will not violate any other agreement to which
the Stockholder is a party or by which the Stockholder is bound, including, but
not limited to, any voting agreement, proxy arrangement, pledge agreement,
shareholders agreement or voting trust. This agreement has
3
<PAGE>
been duly and validly executed and delivered by the Stockholder and constitutes
a valid and binding obligation of the Stockholder, enforceable against the
Stockholder in accordance with its terms. There is no beneficiary or holder of a
voting trust certificate or other interest of any trust of which the Stockholder
is a trustee whose consent is required for the execution and delivery of this
agreement or the consummation by the Stockholder of the transactions
contemplated by this agreement.
(b) No Conflicts. Except for filings under the HSR Act, the Exchange
------------
Act and as set forth in Section 3.4 of the Disclosure Schedule to the Agreement,
(i) no filing with, and no permit, authorization, consent or approval of, any
Governmental Entity is required for the execution and delivery of this agreement
by the Stockholder and the consummation by the Stockholder of the transactions
contemplated by this agreement and (ii) the execution, delivery and performance
of this agreement by the Stockholder will not violate any agreement or other
obligation to which the Stockholder is a party or by which the Stockholder or
any of the Stockholder's properties or assets is bound or violate any order,
writ, injunction, decree, judgment, order, statute, rule or regulation
applicable to the Stockholder or any of the Stockholder's properties or assets.
(c) Ownership of Shares. The Stockholder is the record and beneficial
-------------------
owner of the number of shares of the Common Stock subject to this agreement set
forth opposite the Stockholder's name on Schedule I to this agreement, except as
set forth on Schedule I, those shares constitute all of the shares of the Common
Stock owned of record or beneficially by the Stockholder, and upon tender of
those shares to the Company and the purchase of the shares by the Company
pursuant to the Offer, the Company shall acquire valid title to those shares,
free and clear of any claims, liens, encumbrances, proxies, voting trusts or
agreements, understandings or arrangements or any other rights (collectively,
"Encumbrances"). Subject to applicable securities laws and the terms of this
agreement, the Stockholder has sole voting power and sole power to issue
instructions with respect to the matters set forth in sections 1,2 and 3 of this
agreement, sole power of disposition, sole power of conversion, sole power to
demand appraisal rights, and sole power to agree to all of the matters set forth
in this agreement, in each case with respect to all of the shares in the Company
beneficially owned by the Stockholder, with no limitations, qualifications or
restrictions on those rights.
(d) No Encumbrance. Except as permitted by this agreement, the shares
--------------
in the Company owned by the Stockholder of record or beneficially, and the
certificates representing those shares, are now, and at all times prior to the
purchase of those shares pursuant to the Offer will be, held by the Stockholder,
or by a nominee or custodian for the benefit of the Stockholder, free and clear
of all Encumbrances except for those arising under this agreement.
(e) No Finder's Fees. Except as set forth in Section 3.18 of the
----------------
Agreement, no broker, investment banker, financial advisor or other person is
entitled to any broker's, finder's, financial adviser's or other similar fee or
commission in connection with the transactions contemplated by this agreement
based upon arrangements made by or on behalf of the Stockholder.
5. Representations and Warranties of Parent and the Sub. Parent and the
----------------------------------------------------
Sub jointly and severally represent and warrant to the Stockholder as follows:
4
<PAGE>
(a) Power: Binding Agreement. Each of Parent and the Sub has the
-------------------------
corporate power and authority to enter into and perform all of its obligations
under this agreement and the execution, delivery and performance of this
agreement by Parent and the Sub have been duly authorized by all necessary
partnership or corporate action. The execution, delivery and performance of
this agreement by each of Parent and the Sub will not violate any other
agreement to which either of them is a party or by which either of them is
bound. This agreement has been duly and validly executed and delivered by each
of Parent and the Sub and constitutes a valid and binding agreement of each of
Parent and the Sub, enforceable against each of them in accordance with its
terms.
(b) No Conflicts. Except for filings under the HSR Act and the
------------
Exchange Act, (i) no filing with, and no permit, authorization, consent or
approval of, any Governmental Entity is necessary for the execution of this
agreement by each of Parent and the Sub and the consummation by each of Parent
and the Sub of the transactions contemplated hereby and (ii) the execution,
delivery and performance of this agreement by each of Parent and the Sub will
not (A) conflict with or result in any breach of any organizational documents
applicable to either Parent or the Sub, (B) result in a violation or breach of,
or constitute (with or without notice or lapse of time or both) a default (or
give rise to any third party right of termination, cancellation, material
modification or acceleration) under, any of the terms, conditions or provisions
of any note, loan agreement, bond, mortgage, indenture, license, contract,
commitment, arrangement, understanding, agreement or other instrument or
obligation of any kind to which either Parent or the Sub is a party or by which
either Parent or the Sub or any of their respective properties or assets is
bound, or (C) violate any order, writ, injunction, decree, judgment, order,
statute, rule or regulation applicable to either Parent or the Sub or any of
their respective properties or assets.
6. Termination.
-----------
Except as provided in Section 3 of this agreement, this agreement
shall terminate upon the termination of the Agreement in accordance with its
terms. The termination of this agreement pursuant to this provision shall not
relieve any party of liability for any prior breach of its or his or her
obligations under this agreement.
5
<PAGE>
7. Definitions.
-----------
(a) Shares. Any reference in this agreement to the shares owned of
------
record or beneficially by the Stockholder shall be deemed to include shares
hereafter acquired by the Stockholder upon any stock dividend or distribution or
any change in the Company's Common Stock by reason of any split-up,
recapitalization, combination, exchange of shares or similar corporate action.
(b) Beneficial Ownership. For the purpose of this agreement,
--------------------
beneficial ownership with respect to any shares means beneficial ownership as
determined pursuant to Rule 13d-3 under the Securities Exchange Act of 1934, as
amended, including pursuant to any agreement, arrangement or understanding,
whether or not in writing.
(c) Agreement. Any reference to the "Agreement" refers to the
---------
Agreement executed on this date as it may hereafter be amended from time to
time.
8. Miscellaneous.
-------------
(a) Reliance by Parent. The Stockholder acknowledges that Stockholder
------------------
understands that Parent is entering into, and causing Sub to enter into, the
Agreement in reliance upon the Stockholder's execution, delivery and performance
of this agreement.
(b) Entire Agreement; No Oral Change. This agreement contains a
---------------------------------
compete statement of all of the arrangements among the parties with respect to
its subject matter, supersedes all prior agreements and understandings, written
and oral, among the parties with respect to that subject matter, and cannot be
changed or terminated except by an agreement in writing signed by all parties.
(c) Binding Agreement. This agreement and the obligations under this
-----------------
agreement shall attach to the shares owned of record and beneficially by the
Stockholder and shall be binding upon any such person or entity to which legal
or beneficial ownership of those shares shall pass, whether by operation of law
or otherwise, including, but not limited to, the Stockholder's heirs, guardians,
administrators or successors. The transferee of any shares shall remain liable
for the performance of all obligations of the transferor under this agreement.
(d) Assignment. None of the parties may assign any of its or his or
----------
her rights or delegate any of its or his or her duties under this agreement
without the prior written consent of the other parties.
(e) Notices. All notices and other communications hereunder shall be
-------
in writing and shall be deemed given if delivered personally, telecopied (which
is confirmed) or sent by an overnight courier service, such as Federal Express,
to the parties at the following addresses (or at such other address for a party
as shall be specified by like notice):
6
<PAGE>
(i) if to Parent or the Sub, to:
VS&A Communications Partners II, L.P.
350 Park Avenue
New York, New York 10022
Attn: Jeffrey T. Stevenson
President
with a copy to:
Proskauer Rose LLP
1585 Broadway
New York, New York 10036
Attn: Bertram A. Abrams, Esq.
(ii) if to the Stockholder, to:
Florence Lloyd Jones Barnett and Howard G. Barnett, Sr.
as Co-Trustees of The Florence L. J. and Howard G.
Barnett Foundation
2619 East 37th Street
Tulsa, Oklahoma 74105
with a copy to:
Conner & Winters
2400 First Place Tower
15 East 5th Street
Tulsa, Oklahoma 74103
Attn: Robert A. Curry, Esq.
(f) Severability. Whenever possible, each provision or portion of any
------------
provision of this agreement shall be interpreted in such manner as to be
effective and valid under applicable law but if any provision or portion of any
provision of this agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable law or rule in any jurisdiction, such
invalidity, illegality or unenforceability will not affect any other provision
or portion of any provision in such jurisdiction, and this agreement shall be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision or portion of any provision had never been
contained in this agreement.
(g) Specific Performance. The Stockholder acknowledges that the
--------------------
Company's business is of a special, unique and extraordinary character, and that
any default in the performance of Stockholder's obligations under sections 1
and 2 of this agreement could not be compensated for by damages. Accordingly,
if the Stockholder defaults in the performance of Stockholder's obligations
under section 1 or 2 of this agreement, Parent and the Sub shall be entitled, in
addition to any other remedies that either of them may
7
<PAGE>
have, to enforcement of this agreement by a decree of specific performance
requiring the Stockholder to fulfill those obligations, without any bond or
other security being required and without the necessity of showing actual
damages.
(h) Remedies Cumulative. All rights, powers and remedies provided
-------------------
under this agreement or otherwise available in respect hereof at law or in
equity shall be cumulative and not alternative, and the exercise of any right,
power or remedy by any party shall not preclude the simultaneous or later
exercise by that party of any other right, power or remedy.
(i) No Waiver. The failure of any party hereto to exercise any right,
---------
power or remedy provided under this agreement or otherwise available at law or
in equity, or to insist upon compliance by any other party with its obligations
under this agreement, and any custom or practice of the parties at variance with
the terms of this agreement, shall not constitute a waiver by that party of its
right to exercise any such or other right, power or remedy or to demand such
compliance.
(j) No Third Party Beneficiaries. This agreement is not intended to
----------------------------
be for the benefit of, and shall not be enforceable by, any person or entity who
or which is not a party hereto.
(k) Governing Law. This agreement shall be governed and construed in
-------------
accordance with the laws of the State of Delaware, without giving effect to the
principles of conflicts of law thereof.
(l) Jurisdiction. The courts of the State of Delaware and the United
------------
States District Court for the Southern District of New York shall have
jurisdiction over the parties with respect to any dispute or controversy among
them arising under or in connection with this agreement and, by execution and
delivery of this agreement, each of the parties to this agreement submits to the
jurisdiction of those courts, including, but not limited to, the in personam and
-----------
subject matter jurisdiction of those courts, waives any objection to such
jurisdiction on the grounds of venue or forum non conveniens, the absence of in
----- --- ---------- --
personam or subject matter jurisdiction and any similar grounds, consents to
- --------
service of process by mail (in accordance with section 8(e)) or any other manner
permitted by law, and irrevocably agrees to be bound by any judgment rendered
thereby in connection with this agreement. These consents to jurisdiction shall
not be deemed to confer rights on any person other than the parties to this
agreement.
8
<PAGE>
(m) Headings. The descriptive headings in this agreement are for
--------
convenience of reference only and are not intended to be part of or to affect
the meaning or interpretation of this agreement.
VS&A COMMUNICATIONS PARTNERS II, L.P.
By: /s/ Jeffrey T. Stevenson
------------------------------------------------
Jeffrey T. Stevenson
President and General Partner
VS&A-T/SF, INC.
By: /s/ Jeffrey T. Stevenson
------------------------------------------------
Jeffrey T. Stevenson
President and General Partner
FLORENCE LLOYD JONES BARNETT AND
HOWARD G. BARNETT, SR. AS CO-TRUSTEES
OF THE FLORENCE L. J. AND HOWARD G.
BARNETT FOUNDATION
/s/ Florence Lloyd Jones Barnett
----------------------------------------------------
Florence Lloyd Jones Barnett
/s/ Howard G. Barnett, Sr.
----------------------------------------------------
Howard G. Barnett, Sr.
9
<PAGE>
SCHEDULE 1
<TABLE>
<CAPTION>
NUMBER OF SHARES NUMBER OF SHARES BENEFICIALLY
BENEFICIALLY OWNED OWNED EXCLUDED FROM THIS
SUBJECT TO THIS AGREEMENT (INDICATING
NAME OF STOCKHOLDER AGREEMENT CAPACITY OWNED)
- ------------------- -------------- ---------------------
<S> <C> <C>
Florence Lloyd Jones Barnett 50,000 See separate Stockholder
and Howard G. Barnett, Sr., as Agreements for:
Co-trustees of The Florence L.
J. and Howard G. Barnett (i) Florence Lloyd Jones Barnett and
Foundation Howard G. Barnett, Jr., as Co-
trustees of the Revocable Inter Vivos
Trust of Florence Lloyd Jones
Barnett
(ii) Howard G. Barnett, Sr., and
Howard G. Barnett, Jr., as Co- trustees of the
Revocable Inter Vivos Trust of
Howard G. Barnett, Sr.
(iii) Florence Lloyd Jones Barnett, as
Trustee of the Florence Lloyd Jones
Barnett Charitable Remainder
Unitrust
</TABLE>
<PAGE>
EXHIBIT (c)(13)
CONSULTING AGREEMENT
, 1997
----------------
The parties to this agreement are T/SF Communications Corporation, a
Delaware corporation (the "Company"), and Howard G. Barnett, Jr. (the
"Consultant").
Pursuant to a Stock Purchase Agreement dated August ___, 1997, VS&A-
T/SF, Inc. has today purchased shares of the Company's common stock and the
Consultant has ceased to be Chairman, President and Chief Executive Officer of
the Company.
The Consultant has agreed to provide consulting services to the
Company on the terms and conditions set forth in this agreement.
Accordingly, it is agreed as follows:
1. Consulting Services.
-------------------
For a period of one year commencing on the date of this agreement, the
Consultant shall provide consulting services to the Company in connection with
(a) the transition of the ownership and management of the Company and its
subsidiaries, (b) the severance of members of the Company's corporate staff who
the Consultant agrees to participate in the severance of, (c) the development of
earn-out, stock option and other incentive plans for senior management of the
Company and its subsidiaries, (d) the realization upon the Company's
investments, (e) the review, renewal and negotiation of material agreements,
including, but not limited to, real estate leases, agreements regarding
FocalPoint Entertainment, Inc. and agreements regarding entities in which the
Company or its subsidiaries own minority interests, (f) the development and
implementation of strategic plans for the businesses of the Company and its
subsidiaries, and (g) such other matters as the Company shall reasonably
request. The Consultant shall report directly to the Company's Chairman,
President and Chief Executive Officer and shall provide consulting services in
such manner (in person, by telephone or by correspondence) and at such locations
as shall be agreed upon. The Consultant shall be provided with reasonable
support services and shall be based in Tulsa, Oklahoma. The Consultant shall
not be required to devote his full business time to the performance of services
on behalf of the Company and shall be permitted to be unavailable occasionally
for reasonable vacation and other personal time, provided that he gives
reasonable prior notice of such unavailability.
<PAGE>
2. Compensation
------------
(a) As full consideration for the performance by the Consultant of his
obligations under this agreement, the Company shall pay him an aggregate amount
of $282,500, payable in equal monthly installments of $23,542 on the last day of
each month during the term of this agreement.
(b) The Company shall also reimburse the Consultant for all legitimate
business expenses incurred by him in connection with the performance of his
duties under this agreement upon presentation by him of appropriate vouchers
evidencing such expenses in accordance with the Company's usual procedures, up
to a limit of $2,500 per month. Any expenses in excess of that amount must be
pre-approved by the Company.
(c) To the extent permitted under the Company's medical insurance
plan, the Company shall continue to provide medical coverage for the Consultant
and his immediate family during the term of this agreement on the same terms as
provided to the Consultant in his capacity as employee of the Company
immediately prior to the date of this agreement. The parties intend for the
Consultant to be treated as a "covered employee" for purposes of such medical
insurance coverage so that Consultant's COBRA rights begin upon the termination
of this Agreement. If such treatment is not permitted under applicable law, the
Consultant's COBRA rights will begin to run at the date of this Agreement, with
the Company, in effect, paying for the Consultant's coverage during a portion of
the COBRA period.
3. Non-Competition; Non-Solicitation; Confidentiality.
--------------------------------------------------
(a) For a period of one year (or two years if the term of this
agreement is extended pursuant to section 5) commencing on the date of this
agreement, the Consultant shall not, directly or indirectly, engage or be
interested in (as owner, stockholder, partner, member, manager, lender,
employee, agent, consultant or otherwise) any business or entity that engages,
anywhere in the world, in any business competitive with any business in which
the Company or any of its subsidiaries is engaged or has under active
consideration as of the date of this agreement. However, this section shall not
prevent the Consultant from owning as an investment up to 2% of a class of
equity securities issued by any corporation whose shares are publicly traded and
registered under the Securities Exchange Act of 1934 or subject to Section 15(d)
of such Act.
(b) For a period of one year (or two years if the term of this
agreement is extended pursuant to section 5) commencing on the date of this
agreement, the Consultant shall not, directly or indirectly, employ or solicit
for employment or consulting, on his own behalf or on behalf of any other person
or entity, or otherwise encourage the resignation of, any employee of the
Company or any of its subsidiaries, except that the Consultant may employ any
employee of the Company's corporate
2
<PAGE>
headquarters whose employment is terminated by the Company or who resigns
without encouragement from the Consultant.
(c) The Consultant shall not, for a period of five years after the end
of the term of this agreement, as extended (if applicable), disclose to anyone,
or use in competition with the Company or any of its subsidiaries, any non-
public information with respect to any confidential or secret aspect of the
business of the Company or any of its subsidiaries.
(d) The Consultant acknowledges that the remedy at law for breach of
the provisions of this section 3 will be inadequate and that, in addition to any
other remedy the Company may have, it shall be entitled to an injunction
restraining any breach or threatened breach, without any bond or other security
being required and without the necessity of showing actual damages. If any court
construes the covenant in this section 3 or any part thereof, to be
unenforceable in any respect, the court may reduce the duration or area to the
extent necessary so that the provision is enforceable, and the provision, as
reduced, shall then be enforceable.
4. Representations and Warranties by the Consultant. The Consultant
------------------------------------------------
represents and warrants to the Company that (a) this agreement is valid and
binding upon, and enforceable against, him in accordance with its terms, (b) he
is not bound by or subject to any contractual or other obligation or any law
that would be violated by his execution or performance of this agreement, and
(c) he is not the subject of any pending or, to his knowledge, threatened,
claim, action, judgment, order, or investigation that could adversely affect his
ability to perform his obligations under this agreement.
5. Extension of Agreement. The Company shall have the right to extend
----------------------
the term of this agreement for an additional twelve months on substantially the
same terms by giving written notice thereof to the Consultant at least four
months prior to the expiration of the original term.
7. Termination of Agreement. The Consultant shall have the right to
------------------------
terminate this agreement, effective at any time after ten months from the date
of this agreement, upon at least two months prior written notice to the Company.
Upon the effective date of such termination, all of the Consultant's and the
Company's rights and obligations under this agreement shall terminate, except
that (a) the Consultant's obligations set forth in sections 3(a) and 3(b) above
shall continue until the later of: (i) 18 months after the date of this
agreement, or (ii) if the Company has extended the term of this agreement
pursuant to section 5 above, two years after the date of this agreement, and (b)
the Consultant's obligation under section 3(c) above shall continue for a period
of five years from the effective date of such termination.
3
<PAGE>
7. Miscellaneous.
-------------
(a) Neither party may assign any of his or its rights or delegate any
of his or its duties under this agreement without the written consent of the
other.
(b) Any notice or other communication under this agreement shall be in
writing and shall be considered given when delivered personally or mailed by
registered mail, return receipt requested, to the parties at their respective
addresses set forth below their signatures hereto or at such other address as a
party may specify by notice to the other in accordance with this provision. Any
notice to the Company shall be directed to the attention of its President.
(c) This agreement shall be governed by and construed in accordance
with the law of the state of New York applicable to agreements made and to be
performed in New York.
(d) The failure of a party to insist upon strict adherence to any term
of this agreement on any occasion shall not be considered a waiver or deprive
that party of the right thereafter to insist upon strict adherence to that term
or any other term of this agreement. Any waiver must be in writing.
(e) This agreement contains a complete statement of all of the
arrangements between the parties with respect to its subject matter, supersedes
all previous agreements and understandings between or on behalf of them with
respect to that subject matter and cannot be changed or terminated orally.
(f) The Consultant shall perform the services to be rendered under
this agreement as an independent contractor and shall not have any authority to
assume or create any obligation or liability on behalf of or in the name of the
Company or to bind the Company in any respect. As an independent contractor, the
Consultant shall not be entitled to any of the benefits generally available to
the Company's employees.
[(g) The Company and the Consultant acknowledge that the Company
currently (i) owns a certain term life insurance policy on the life of the
Consultant and holds and pays the premiums on a certain disability insurance
policy covering the Consultant (the "Insurance Policies"), and (ii) is the
lessee of an automobile which is and has been used by the Consultant (the
"Lease"). Promptly after the date of this agreement, the Company shall transfer
the Insurance Policies and the Lease to the Consultant, effective as of the date
of this agreement, and the Consultant shall assume all
4
<PAGE>
of the obligations under the Insurance Policies and the Lease as of the date of
this agreement.] [subject to review of Insurance Policies and Lease]
T/SF COMMUNICATIONS CORPORATION
By:_______________________________________
____________________________________
____________________________________
____________________________________
[Address]
__________________________________________
Howard G. Barnett, Jr.
____________________________________
____________________________________
____________________________________
[Address]
5
<PAGE>
EXHIBIT (c)(14)
CONSULTING AGREEMENT
, 1997
----------------
The parties to this agreement are T/SF Communications Corporation, a
Delaware corporation (the "Company"), and Robert E. Craine, Jr. (the
"Consultant").
Pursuant to a Stock Purchase Agreement dated August ___, 1997, VS&A-
T/SF, Inc. has today purchased shares of the Company's common stock and the
Consultant has ceased to be Executive Vice President of the Company.
The Consultant has agreed to provide consulting services to the
Company on the terms and conditions set forth in this agreement.
Accordingly, it is agreed as follows:
1. Consulting Services.
-------------------
For a period of ninety days commencing on the date of this agreement,
the Consultant shall provide consulting services to the Company in connection
with (a) the transition of the ownership and management of the Company and its
subsidiaries, (b) the resolution of matters that may arise in the Company and
its subsidiaries from time to time, and (c) such other matters as the Company
shall reasonably request. The Consultant shall report directly to the Company's
Chairman, President and Chief Executive Officer and shall provide consulting
services in such manner (in person, by telephone or by correspondence) and at
such locations as shall be agreed upon. The Company acknowledges that the
Consultant shall not be required to devote his full business time to the
performance of services on behalf of the Company and shall be based in Tulsa,
Oklahoma.
2. Compensation.
------------
(a) As full consideration for the performance by the Consultant of his
obligations under this agreement, the Company shall pay him an aggregate amount
of $41,750, payable in equal monthly installments of $13,917 on the last day of
each month during the term of this agreement.
(b) The Company shall also reimburse the Consultant for all previously
approved expenses incurred by him in connection with the performance of his
<PAGE>
duties under this agreement upon presentation by him of appropriate vouchers
evidencing such expenses in accordance with the Company's usual procedures.
(c) To the extent permitted under the Company's medical insurance
plan, the Company shall continue to provide medical coverage for the Consultant
and his immediate family during the term of this agreement on the same terms as
provided to the Consultant in his capacity as employee of the Company
immediately prior to the date of this agreement. The parties intend for the
Consultant to be treated as a "covered employee" for purposes of such medical
insurance coverage so that Consultant's COBRA rights begin upon the termination
of this Agreement. If such treatment is not permitted under applicable law, the
Consultant's COBRA rights will begin to run at the date of this Agreement, with
the Company, in effect, paying for the Consultant's coverage during a portion of
the COBRA period.
3. Non-Competition; Non-Solicitation; Confidentiality.
--------------------------------------------------
(a) For a period of ninety days commencing on the date of this
agreement, the Consultant shall not, directly or indirectly, engage or be
interested in (as owner, stockholder, partner, member, manager, lender,
employee, agent, consultant or otherwise) any business or entity that engages,
anywhere in the world, in any business competitive with any business in which
the Company or any of its subsidiaries is engaged or has under active
consideration as of the date of this agreement. However, this section shall not
prevent the Consultant from owning as an investment up to 2% of a class of
equity securities issued by any corporation whose shares are publicly traded and
registered under the Securities Exchange Act of 1934 or subject to Section 15(d)
of such Act.
(b) For a period of ninety days commencing on the date of this
agreement, the Consultant shall not, directly or indirectly, employ or solicit
for employment or consulting, on his own behalf or on behalf of any other person
or entity, or otherwise encourage the resignation of, any employee of the
Company or any of its subsidiaries, except that the Consultant may employ any
employee of the Company's corporate headquarters whose employment is terminated
by the Company or who resigns without encouragement from the Consultant.
(c) The Consultant shall not, for a period of five years after the end
of the term of this agreement, disclose to anyone, or use in competition with
the Company or any of its subsidiaries, any non-public information with respect
to any confidential or secret aspect of the business of the Company or any of
its subsidiaries.
(d) The Consultant acknowledges that the remedy at law for breach of
the provisions of this section 3 will be inadequate and that, in addition to any
other remedy the Company may have, it shall be entitled to an injunction
restraining any breach or threatened breach, without any bond or other security
being required and without the necessity of showing actual damages. If any court
construes the covenant in
2
<PAGE>
this section 3 or any part thereof, to be unenforceable in any respect, the
court may reduce the duration or area to the extent necessary so that the
provision is enforceable, and the provision, as reduced, shall then be
enforceable.
4. Representations and Warranties by the Consultant. The Consultant
------------------------------------------------
represents and warrants to the Company that (a) this agreement is valid and
binding upon, and enforceable against, him in accordance with its terms, (b) he
is not bound by or subject to any contractual or other obligation or any law
that would be violated by his execution or performance of this agreement, and
(c) he is not the subject of any pending or, to his knowledge, threatened,
claim, action, judgment, order, or investigation that could adversely affect his
ability to perform his obligations under this agreement.
5. Miscellaneous.
-------------
(a) Neither party may assign any of his or its rights or delegate any
of his or its duties under this agreement without the written consent of the
other.
(b) Any notice or other communication under this agreement shall be in
writing and shall be considered given when delivered personally or mailed by
registered mail, return receipt requested, to the parties at their respective
addresses set forth below their signatures hereto or at such other address as a
party may specify by notice to the other in accordance with this provision. Any
notice to the Company shall be directed to the attention of its President.
(c) This agreement shall be governed by and construed in accordance
with the law of the state of New York applicable to agreements made and to be
performed in New York.
(d) The failure of a party to insist upon strict adherence to any term
of this agreement on any occasion shall not be considered a waiver or deprive
that party of the right thereafter to insist upon strict adherence to that term
or any other term of this agreement. Any waiver must be in writing.
(e) This agreement contains a complete statement of all of the
arrangements between the parties with respect to its subject matter, supersedes
all previous agreements and understandings between or on behalf of them with
respect to that subject matter and cannot be changed or terminated orally.
(f) The Consultant shall perform the services to be rendered under
this agreement as an independent contractor and shall not have any authority to
assume or create any obligation or liability on behalf of or in the name of the
Company or to bind the
3
<PAGE>
Company in any respect. As an independent contractor, the Consultant shall not
be entitled to any of the benefits generally available to the Company's
employees.
T/SF COMMUNICATIONS CORPORATION
By:_______________________________________
____________________________________
____________________________________
____________________________________
[Address]
__________________________________________
Robert E. Craine, Jr.
____________________________________
____________________________________
____________________________________
[Address]
4
<PAGE>
EXHIBIT (c)(15)
CONSULTING AGREEMENT
, 1997
----------------
The parties to this agreement are T/SF Communications Corporation, a
Delaware corporation (the "Company"), and J. Gary Mourton (the "Consultant").
Pursuant to a Stock Purchase Agreement dated August ___, 1997, VS&A-
T/SF, Inc. has today purchased shares of the Company's common stock and the
Consultant has ceased to be Senior Vice President-Finance of the Company.
The Consultant has agreed to provide consulting services to the
Company on the terms and conditions set forth in this agreement.
Accordingly, it is agreed as follows:
1. Consulting Services.
-------------------
For a period of one year commencing on the date of this agreement, the
Consultant shall provide consulting services to the Company in connection with
(a) the transition of the ownership and management of the Company and its
subsidiaries, (b) the financial, management, accounting and statistical
reporting requirements of the Company and its subsidiaries and the
implementation of plans to satisfy those requirements, (c) the development and
finalization of the 1998 and 1999 business plans for each business of the
Company and its subsidiaries, (d) the development and implementation of
accounting functions for G.E.M. Communications, Inc., (e) the preparation of
historical financial, accounting and statistical information for 1996 and 1997
and the coordination and standardization of that information among the Company
and its subsidiaries, (f) the resolution of tax, accounting and audit issues
that may arise in the Company and its subsidiaries from time to time, and (g)
such other matters as the Company shall reasonably request. The Consultant
shall report directly to the Company's Chairman, President and Chief Executive
Officer and shall provide consulting services in such manner (in person, by
telephone or by correspondence) and at such locations as shall be agreed upon.
The Consultant shall be provided with reasonable support services and shall be
based in Tulsa, Oklahoma. The Consultant shall not be required to devote his
full business time to the performance of services on behalf of the Company and
the parties acknowledge that his time commitment to the Company shall diminish
during the term of this agreement. The Consultant shall be permitted to be
unavailable occasionally for reasonable vacation and other personal time,
provided that he gives reasonable prior notice of such unavailability.
<PAGE>
2. Compensation.
------------
(a) As full consideration for the performance by the Consultant of his
obligations under this agreement, the Company shall pay him an aggregate amount
of $130,800, payable on the last day of each month during the term of this
agreement at the rate of $14,533 per month for the first six months and $7,267
per month for the remaining six months.
(b) The Company shall also reimburse the Consultant for all legitimate
business expenses incurred by him in connection with the performance of his
duties under this agreement upon presentation by him of appropriate vouchers
evidencing such expenses in accordance with the Company's usual procedures, up
to a limit of $500 per month. Any expenses in excess of that amount must be
pre-approved by the Company.
(c) To the extent permitted under the Company's medical insurance
plan, the Company shall continue to provide medical coverage for the Consultant
and his immediate family during the term of this agreement on the same terms as
provided to the Consultant in his capacity as employee of the Company
immediately prior to the date of this agreement. The parties intend for the
Consultant to be treated as a "covered employee" for purposes of such medical
insurance coverage so that Consultant's COBRA rights begin upon the termination
of this Agreement. If such treatment is not permitted under applicable law, the
Consultant's COBRA rights will begin to run at the date of this Agreement, with
the Company, in effect, paying for the Consultant's coverage during a portion of
the COBRA period.
3. Non-Competition; Non-Solicitation; Confidentiality.
--------------------------------------------------
(a) For a period of one year commencing on the date of this agreement,
the Consultant shall not, directly or indirectly, engage or be interested in (as
owner, stockholder, partner, member, manager, lender, employee, agent,
consultant or otherwise) any business or entity that engages, anywhere in the
world, in any business competitive with any business in which the Company or any
of its subsidiaries is engaged or has under active consideration as of the date
of this agreement. However, this section shall not prevent the Consultant from
owning as an investment up to 2% of a class of equity securities issued by any
corporation whose shares are publicly traded and registered under the Securities
Exchange Act of 1934 or subject to Section 15(d) of such Act.
(b) For a period of one year commencing on the date of this agreement,
the Consultant shall not, directly or indirectly, employ or solicit for
employment or consulting, on his own behalf or on behalf of any other person or
entity, or otherwise encourage the resignation of, any employee of the Company
or any of its subsidiaries, except that the Consultant may employ any employee
of the Company's
2
<PAGE>
corporate headquarters whose employment is terminated by the Company or who
resigns without encouragement from the Consultant.
(c) The Consultant shall not, for a period of five years after the end
of the term of this agreement, disclose to anyone, or use in competition with
the Company or any of its subsidiaries, any information with respect to any non-
public confidential or secret aspect of the business of the Company or any of
its subsidiaries.
(c) The Consultant acknowledges that the remedy at law for breach of
the provisions of this section 3 will be inadequate and that, in addition to any
other remedy the Company may have, it shall be entitled to an injunction
restraining any breach or threatened breach, without any bond or other security
being required and without the necessity of showing actual damages. If any court
construes the covenant in this section 3 or any part thereof, to be
unenforceable in any respect, the court may reduce the duration or area to the
extent necessary so that the provision is enforceable, and the provision, as
reduced, shall then be enforceable.
4. Representations and Warranties by the Consultant. The Consultant
------------------------------------------------
represents and warrants to the Company that (a) this agreement is valid and
binding upon, and enforceable against, him in accordance with its terms, (b) he
is not bound by or subject to any contractual or other obligation or any law
that would be violated by his execution or performance of this agreement, and
(c) he is not the subject of any pending or, to his knowledge, threatened,
claim, action, judgment, order, or investigation that could adversely affect his
ability to perform his obligations under this agreement.
5. Miscellaneous.
-------------
(a) Neither party may assign any of his or its rights or delegate any
of his or its duties under this agreement without the written consent of the
other.
(b) Any notice or other communication under this agreement shall be in
writing and shall be considered given when delivered personally or mailed by
registered mail, return receipt requested, to the parties at their respective
addresses set forth below their signatures hereto or at such other address as a
party may specify by notice to the other in accordance with this provision. Any
notice to the Company shall be directed to the attention of its President.
(c) This agreement shall be governed by and construed in accordance
with the law of the state of New York applicable to agreements made and to be
performed in New York.
(d) The failure of a party to insist upon strict adherence to any term
of this agreement on any occasion shall not be considered a waiver or deprive
that
3
<PAGE>
party of the right thereafter to insist upon strict adherence to that term or
any other term of this agreement. Any waiver must be in writing.
(e) This agreement contains a complete statement of all of the
arrangements between the parties with respect to its subject matter, supersedes
all previous agreements and understandings between or on behalf of them with
respect to that subject matter and cannot be changed or terminated orally.
(f) The Consultant shall perform the services to be rendered under
this agreement as an independent contractor and shall not have any authority to
assume or create any obligation or liability on behalf of or in the name of the
Company or to bind the Company in any respect. As an independent contractor, the
Consultant shall not be entitled to any of the benefits generally available to
the Company's employees.
[(g) The Company and the Consultant acknowledge that the Company
currently (i) holds and pays the premiums on a certain disability insurance
policy covering the Consultant (the "Insurance Policy"), and (ii) is the lessee
of an automobile which is and has been used by the Consultant (the "Lease").
Promptly after the date of this agreement, the Company shall transfer the
Insurance Policy and the Lease to the Consultant, effective as of the date of
this agreement, and the Consultant shall assume all of the obligations under the
Insurance Policy and the Lease as of the date of this agreement.] [subject to
review of Insurance Policy and Lease]
T/SF COMMUNICATIONS CORPORATION
By:_______________________________________
____________________________________
____________________________________
____________________________________
[Address]
__________________________________________
J. Gary Mourton
____________________________________
____________________________________
____________________________________
[Address]
4
