TESCORP INC, SC 14D9, 1997-12-10

TESCORP INC
SC 14D9, 1997-12-10
CABLE & OTHER PAY TELEVISION SERVICES

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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SCHEDULE 14D-9

SOLICITATION/RECOMMENDATION STATEMENT PURSUANT TO
SECTION 14(D)(4) OF THE SECURITIES EXCHANGE ACT OF 1934

(AMENDMENT NO. )

Tescorp, Inc.
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(Name of Subject Company)

Tescorp, Inc.
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(Name of Person(s) Filing Statement)

Common Stock, par value $.02 per share
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(Title of Class of Securities)

881584106
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((CUSIP) Number of Class of Securities)

Jack S. Gray, Jr.
President and Chief Operating Officer
Tescorp, Inc.
327 Congress Avenue, Suite 200
Austin, Texas 78701
(512) 476-2995
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(Name, address and telephone number of person authorized to receive
notice and communications on behalf of the person(s) filing statement)

Copies to:

Stephen T. Burdumy, Esq.
Klehr, Harrison, Harvey, Branzburg & Ellers LLP
1401 Walnut Street
Philadelphia, PA 19102
(215) 569-4646
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INTRODUCTION

This Solicitation/Recommendation Statement on Schedule 14D-9 (this
"Statement") relates to an offer by Tescorp Acquisition Corporation, a Delaware
corporation ("Acquisition") and a wholly-owned subsidiary of Supercanal Holding
S.A., an Argentine corporation ("Supercanal"), to purchase all outstanding
shares of common stock, par value $.02 per share (the "Common Stock" or "Common
Shares") of Tescorp, Inc., a Texas corporation (the "Company").

ITEM 1. SECURITY AND SUBJECT COMPANY.

The name of the Subject Company and location of its principal executive
offices are Tescorp, Inc., 327 Congress Avenue, Suite 200, Austin, Texas 78701.
The title of the class of equity securities to which this statement relates is
the Company's Common Stock.

ITEM 2. TENDER OFFER OF THE BIDDER.

This Statement relates to the tender offer made by Acquisition, disclosed in
a Tender Offer Statement on Schedule 14D-1 dated December 8, 1997 and filed by
Acquisition (the "Acquisition Schedule 14D-1"), to purchase (i) all outstanding
Common Shares for an amount per Share of $4.50 (the "Common Stock Tender Offer")
and (ii) all outstanding shares of the Company's Series 1995 8% Convertible
Preferred Stock (the "8% Preferred Stock" or "8% Preferred Shares") for an
amount per Share equal to $144 plus accrued and unpaid dividends (the "Preferred
Stock Tender Offer" and, together with the Common Stock Tender Offer, the
"Tender Offers"), upon the terms and subject to the conditions set forth in
Acquisition's Offer to Purchase dated December 8, 1997 (the "Offer to Purchase")
and the related Transmittal Letter (the Acquisition Schedule 14D-1, the Offer to
Purchase, Transmittal Letter and related documents, together with any amendments
or supplements thereto, are sometimes collectively referred to herein as the
"Offer Documents"). A copy of the Offer to Purchase is filed as Exhibit 1
hereto.

The Acquisition Schedule 14D-1 states that the principal executive offices
of both Acquisition and Supercanal are Godoy Cruz 316, Mendoza, Province of
Mendoza, Argentina 5500.

The Tender Offers are being made pursuant to the Amended Stock Purchase and
Merger Agreement, dated as of November 26, 1997, between Acquisition and the
Company, (the "Merger Agreement"). All holders of any of the Company's equity
securities ("Stockholders") are encouraged to read the Merger Agreement, a copy
of which is filed as Exhibit 2 to this Statement.

ITEM 3. IDENTITY AND BACKGROUND.

(a) The name and business address of the Company, which is the person filing
this Statement, are set forth in Item 1 above.

(b) As of the date hereof, except as described below, there exists no
material contract, agreement, arrangement or understanding and no actual or
potential conflict of interest between the Company or its affiliates and (i) the
Company's executive officers, directors or affiliates, or (ii) Acquisition or
Supercanal, their executive officers, directors or affiliates.

THE MERGER AGREEMENT. Acquisition and the Company entered into an Amended
Stock Purchase and Merger Agreement dated as of November 26, 1997. The Merger
Agreement provides that (i) on December 5, 1997, Acquisition shall purchase a
total of 6,006,006 shares of the Company's Common Stock for $20,000,000 ($3.33
per share), of which $15,000,000 would be paid in cash and the balance would be
paid by permitting the Company to retain a $5,000,000 deposit which Acquisition
had given to the Company when the Original Merger Agreement (as defined in
Section 4(b) hereof) was executed, (ii) the Tender Offers shall be announced not
later than December 5, 1997 and materials relating to the Tender Offers shall be
sent to the Company's stockholders not later than five business days after the
date of announcement, and (iii) if, pursuant to the Tender Offers, Acquisition
obtains at least two-thirds of the

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outstanding Common Stock and two-thirds of the outstanding 8% Preferred Stock
(the "Minimum Condition"), or if the Minimum Condition is waived, the Merger
shall occur. In such a case, Acquisition will be merged with and into the
Company, thus forming surviving corporation (the "Surviving Corporation").

STOCK OF THE COMPANY. At the effective time of the Merger (the "Effective
Time"), each Common Share which is outstanding immediately before the Effective
Time, other than Common Shares owned by Acquisition, will be converted into and
become the right to receive $4.50 in cash, or any higher price per share paid
with regard to Common Shares tendered in response to the Tender Offers.

At the Effective Time, each 8% Preferred Share which is outstanding
immediately before the Effective Time will be converted into and become the
right to receive in cash $144 plus accrued dividends per 8% Preferred Share.

At the Effective Time, each Common Share or 8% Preferred Share held by
Acquisition or by any direct or indirect subsidiary of the Company, immediately
before the Effective Time will be canceled and no payment will be made with
respect to those shares.

STOCK OF ACQUISITION. At the Effective Time, each share of common stock of
Acquisition which is outstanding immediately before the Effective Time will be
converted into and become one share of common stock of the Surviving
Corporation.

STOCKHOLDER VOTE REQUIRED TO APPROVE MERGER. Under the Texas Business
Corporation Act (the "TBCA"), the affirmative vote of holders of two-thirds of
the outstanding shares entitled to vote on such a matter (including any shares
owned by the Purchaser) is required to approve the Merger. If the Minimum
Condition is satisfied, Acquisition will have sufficient voting power to effect
the Merger without the vote of any other stockholder of the Company. If
Acquisition acquires more than 90% of such voting shares outstanding,
stockholder approval will not be required under Article 5.16 of the TBCA.

STOCKHOLDERS MEETING. Pursuant to the terms of the Merger Agreement, if the
Minimum Condition is satisfied and approval by the Company's stockholders is
required in order to consummate the Merger, the Company will hold a special
meeting of its stockholders as soon as practicable after the Expiration Date (as
defined in the Merger Agreement) for the purpose of adopting this Agreement and
approving the Merger.

CONDITIONS TO THE MERGER. Neither the Company nor Acquisition is
contractually obligated to complete the Merger unless Acquisition acquires the
Shares tendered in response to the Tender Offers and the Minimum Condition is
satisfied. If that occurs (i) Acquisition will own a sufficient number of Shares
to he able to approve the Merger even if no other stockholders of the Company
vote in favor of it and (ii) Acquisition will be contractually obligated to vote
in favor of the Merger. The obligations of the Company to carry out the Merger
will be conditioned on the Merger being approved by the holders of two-thirds of
the outstanding Common Shares and two-thirds of the outstanding 8% Preferred
Shares (which will occur if the Minimum Condition is satisfied and Acquisition
votes in favor of the Merger).

Additionally, the obligations of the Company and of Acquisition to complete
the Merger are subject to the following conditions: (i) no order will have been
entered by any court or governmental authority and be in force which invalidates
the Merger Agreement or restricts the Company from completing the transactions
contemplated by the Merger Agreement; (ii) the Effective Time shall have
occurred on or before March 31, 1998; (iii) the number of Shares held by
stockholders of the Company who have filed written objections to the approval of
the Merger sufficient to preserve their rights to demand the fair value of their
Shares pursuant to Articles 5.11 through 5.13 of the TBCA does not exceed 5% of
the total number of outstanding Common Shares and 8 % Preferred Shares combined
(treating each share of 8% Preferred Shares as being equal to 32 shares of
Common Shares).

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TERMINATION OF THE MERGER AGREEMENT. The Merger Agreement may be terminated
at any time prior to the Effective Time, whether before or after approval of the
terms of the Merger Agreement by the stockholders of the Company:

(1) by mutual consent of the Company and Acquisition;

(2) by the Company, if without fault of the Company, the Expiration Date
(as defined in the Merger Agreement) of the Tender Offers is not on or
before January 31, 1998;

(3) by the Company or Acquisition if, without fault of Acquisition, the
Effective Time is not on or before March 31, 1998;

(4) by the Company if (i) any of the representations and warranties of
Acquisition contained in the Merger Agreement was not complete and accurate
in all material respects on the date of the Merger Agreement, or (ii) any of
the conditions to the Company's obligations to complete the Merger is not
satisfied or waived by the Company prior to or on the date of the Merger,
and the Company has paid Acquisition $5,000,000, if applicable;

(5) by Acquisition if (i) any of the representations or warranties of
the Company contained in the Merger Agreement was not complete and accurate
in all material respects on the date of the Merger Agreement, or (ii) any of
the conditions to Acquisition's obligations to complete the Merger are not
satisfied or waived by Acquisition prior to or on the date of the Merger; or

(6) by the Company if (i) a tender or exchange offer is commenced by a
potential acquiror for all the outstanding Common Shares and 8% Preferred
Shares for a consideration having a value of at least $5 per Common Share
and $160 per 8% Preferred Share, (ii) the Company's Board of Directors
determines in good faith and after consultation with an independent
financial advisor that the offer constitutes a Superior Proposal (as defined
below) and resolves to accept the Superior Proposal or to recommend to the
Company's stockholders that they tender their shares in response to the
tender or exchange offer, (iii) the Company has given Acquisition at least
10 business days' prior notice of its intention to terminate pursuant to
this provision and (iv) the Company has paid Acquisition $5,000,000. A
"Superior Proposal" is an unsolicited proposal to the Company which (x)
would result in the Company's stockholders receiving consideration with a
fair value determined in good faith by the Company's Board of Directors and
after consultation with the Company's independent financial advisor to be
more than $5 per share of Common Stock and more than $160 per share of 8%
Preferred Stock and (y) is determined in good faith by the Company's Board
of Directors to be more favorable both to the holders of Common Shares and
to the holders of the 8% Preferred Shares than the transactions contemplated
by the Merger Agreement.

EFFECT OF TERMINATION OF THE MERGER AGREEMENT. If the Merger Agreement is
terminated, neither the Company nor Acquisition will be required to complete the
Merger. If the Merger Agreement is terminated after Acquisition has accepted
Shares tendered in response to the Tender Offers, the termination will not
affect Acquisition's purchase of the Shares it has accepted or its obligation to
pay for those shares. If the Merger Agreement is terminated by the Company
because Acquisition fails to fulfill its obligations related to the Tender
Offers or the Merger, Acquisition will be obligated to pay the Company
$5,000,000.

ACQUISITION PROPOSALS. The Merger Agreement contains (i) prohibitions
against the Company soliciting or authorizing its officers, directors, employees
or agents to solicit acquisition proposals and (ii) prohibitions regarding
permitted actions of the Company if it receives unsolicited acquisition
proposals.

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(ii) requiring the Purchaser (and the Corporation which survives the Merger) to
indemnify directors, officers, employees, fiduciaries and agents of the Company
and its subsidiaries against liability arising out of their service as
directors, officers, employees or agents of the Company or its subsidiaries, or
of companies with regard to which they served as directors, officers, employees
or agents at the request of the Company or its subsidiaries.

REPRESENTATIONS AND WARRANTIES. The Merger Agreement contains various
customary representations and warranties.

APPRAISAL RIGHTS. If the Merger is consummated, holders of Shares at the
Effective Time will have rights pursuant to the provisions of Article 5.12 of
the TBCA ("Article 5.12") to dissent and demand appraisal of their Shares. Under
Article 5.12, dissenting stockholders who comply with the applicable statutory
procedures will be entitled to receive a judicial determination of the fair
value of their Shares (exclusive of any element of value arising from the
accomplishment or exception of the Merger) and to receive payment of that fair
value in cash, together with a fair rate of interest, if any. The statutory
procedures require a dissenting stockholder to notify the Company prior to the
meeting at which the Company's stockholders vote on the Merger (i) that he or
she intends to exercise his or her dissenter's rights and (ii) of his or her
address. Any judicial determination of the fair value of Shares could be more or
less than the price per Share to be paid in the Merger. Holders of Shares will
not have appraisal rights in connection with the Tender Offers.

The foregoing summary of Article 5.12 does not purport to be complete and is
qualified in its entirety by reference to Article 5.12. Failure to follow the
steps required by Article 5.12 for perfecting appraisal rights may result in the
loss of those rights.

Acquisition will not be required to complete the Merger if holders of more
than 5% of the outstanding Common Shares and 8 % Preferred Shares combined
(treating each 8 % Preferred Share as equal to 32 Common Shares) file objections
sufficient to preserve their right to demand appraisal of their Shares.

REPURCHASE OF OPTIONS AND WARRANTS. The Merger Agreement provides that the
Company will use its best efforts to provide that, immediately prior to the
acceptance of Shares in response to the Tender Offers, each holder of an Option
(as defined below) will become fully vested and, if certain conditions are met,
each Option will be canceled and the holder of each Option will receive, not
later than ten days after the Tender Offers expire, a cash payment equal to the
excess of the price per Common Share to be paid in the Merger over the exercise
price of the Option multiplied by the number of shares subject to the Option
when it is canceled.

The Merger Agreement further provides that, if certain conditions are
satisfied or waived, that five days after all of the Company's 10% Preferred
Stock has either been converted into Common Shares or redeemed, certain holders
of warrants to purchase Common Shares, holders may tender such warrants in
exchange for payment equal to the excess of the price per Common Share to be
paid in the Merger over the exercise price of such warrants multiplied by the
number of Common Shares subject to the warrants when they are canceled.

BORROWINGS BY THE COMPANY. Pursuant to Paragraph 7.1(d) of the Merger
Agreement, the Company may not make any borrowings other than (i) borrowings in
the ordinary course of business under working capital lines which are disclosed
in the notes to the Company's consolidated balance sheet at March 31, 1997 or
June 30, 1997 included in the Company's filings with the Securities and Exchange
Commission, and (ii) up to a total of $1,000,000 under revolving credits from
the Jack R. Crosby Inter Vivos Trust and the Sharpe Irrevocable Inter Vivos
Trust.

BONUS PAYMENTS. Paragraph 7.1(m) of the Merger Agreement permits the
Company to make bonus payments aggregating $300,000 to Jack R. Crosby, Chairman
of the Board and Chief Executive Officer of

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the Company, and Jack S. Gray, Jr., the Company's Chief Operating Officer. Such
bonus payments are expected to be paid prior to the consummation of the Merger.

BOARD REPRESENTATION. In accordance with Section 7.6 of the Merger
Agreement, Daniel E. Vila, a designee of Acquisition, was elected to the Board
of Directors of the Company (the "Board") on December 5, 1997 and the Company is
to use its best efforts to cause Mr. Vila, or another of Acquisition's designees
in place of Mr. Vila, to be re-elected at all subsequent meetings of the
Company's stockholders at which directors are elected. Pursuant to Section 3.5
of the Merger Agreement, after the Merger, Jose Maria Saenz Valiente, Jr. and
Alberto L. Vila will also be elected to the Board. The Board will consist
entirely of these three individuals. Each of these individuals is currently a
director of Supercanal.

The foregoing summary of the Merger Agreement is qualified by reference to
the Merger Agreement which should be read in its entirety for a more complete
description of the terms and provisions of the Merger Agreement.

AMENDED AND RESTATED 1991 INCENTIVE PLAN. As of the date hereof, there are
8 holders (each an "Optionholder") of options to purchase Common Shares (each an
"Option") under the Company's Amended and Restated 1991 Incentive Plan (the
"1991 Incentive Plan"), a copy of which is filed as Exhibit 3 hereto, at various
exercise prices. The aggregate number of Common Shares underlying such Options
is 1,850,000. There are an additional 83,333 Common Shares underlying Options
granted pursuant to the 1993 Non-Employee Directors Stock Option Plan (described
below), which makes the total number of Common Shares underlying outstanding
Options 1,933,333.

Pursuant to Section 9 of the 1991 Incentive Plan, at and after the Effective
Time (as defined below), each holder of an Option thereunder shall be entitled
to purchase under such Option, in lieu of the number of Common Shares that would
have been received, the number and class of shares of stock and other securities
to which such holder would have been entitled pursuant to the terms of the
Merger if, immediately prior thereto, the Optionholder had been the holder of
record of the number of shares of the Company's Common Stock. The "Effective
Time" is 11:59 P.M. on the day when a Certificate of Merger has been filed with
the Secretary of State of Texas and a Certificate of Merger has been filed with
the Secretary of State of Delaware.

In accordance with Section 8 of the 1991 Incentive Plan, certain of the
Optionholders have Limited Stock Appreciation Rights ("LSARs") pursuant to which
such Optionholders have the right, with respect to each Option to which an LSAR
relates (a "Related Option"), to receive in cash a dollar amount equal to the
product computed by multiplying (i) the excess of (A) the Merger Price Per Share
over (B) the Exercise Price Per Share (as defined in each respective Related
Option Agreement) of Common Stock at which the Related Option is exercisable, by
(ii) the number of shares of Common Stock with respect to which such LSAR is
being exercised. Each LSAR may be exercised only during the period of seven
months immediately following the date on which the Tender Offers were first
made.

Pursuant to Section 7.7 of the Merger Agreement, the Company is obligated to
use its best efforts to provide that, immediately prior to the acceptance of
Shares in response to the Tender Offers, each Optionholder will become fully
vested and, if certain conditions to the Merger Agreement are fulfilled, each
Option will be canceled and each Optionholder will receive the excess of the
Merger Price for the Common Stock (as defined in the Merger Agreement) over the
per share exercise price of the Option multiplied by the number of shares
subject to the Option at the time such Option is canceled.

Pursuant to Section 3.13 of the Merger Agreement, Supercanal shall fulfill,
after the Effective Time, all of the Company's obligations under all Options
which are outstanding at the Effective Time, taking account of all changes in
the Options resulting from the Merger.

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1993 NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN. As of the date hereof, there
are four Directors, J. Kelly Elliott, Lee A. Lahourcade, Winston J. Churchill
and Daniel Vila, who hold Options under the Company's 1993 Non-Employee
Directors Stock Option Plan (the "1993 Option Plan"), a copy of which is
attached as Exhibit 4 hereto. Pursuant to Section 11 of the 1993 Option Plan,
the Merger will cause all Options issued thereunder and outstanding to
terminate, and in this event, each of these holders shall have a right,
exercisable within a period of 30 days immediately prior to the closing of the
Merger, to exercise the Option without regard to any limitation on exercise
prior to the date contained in a related Option Agreement, unless such Option
has expired or been terminated pursuant to its terms.

PROGRAMMING PURCHASE AGREEMENT. On or about December 5, 1997, the Company
and Supercanal entered into a Programming Purchase Agreement (the "Programming
Agreement"), a copy of which is attached as Exhibit 7 hereto. Pursuant to the
Programming Agreement, the Company has the nonexclusive right, but not the
obligation, to purchase from Supercanal any television programming which
Supercanal has the right to sell to the Company and the Company desires to
purchase.

As stated in Section 1(b) of the Programming Agreement, in exchange for the
rights granted to the Company thereunder, the Company agreed to execute the
Merger Agreement. As additional consideration, the Company agreed to convey to
Supercanal (i) an amount equal to Supercanal's actual cost of the programming
(not including overhead or similar costs), an estimate of which is listed on a
per subscriber basis in Exhibit A to Programming Agreement, and (ii) the right
for Supercanal to include the total number of the Company's subscribers in
Supercanal's subscription base for the purpose of negotiating contracts with
individual programmers.

The term of the Programming Agreement is ten years, from December 5, 1997
through December 5, 2007; provided, however, either party may extend the
Programming Agreement for successive one year terms by providing the other party
with written notice not later than one month prior to the termination thereof.

INDEMNIFICATION OF OFFICERS AND DIRECTORS. The Company's Certificate of
Incorporation provides that no director of the Company shall be personally
liable to the Company or its stockholders for monetary damages for any at or
omission in his capacity as a director, except to the extent otherwise expressly
provided by a statute of the State of Texas.

In addition, the Merger Agreement provides that the Company (and Surviving
Corporation after the Effective Time) will indemnify and hold harmless, to the
fullest extent permitted by applicable law, any director, officer, employee,
fiduciary or agent of the Company or any of its subsidiaries against any losses,
claims, damages, liabilities, costs, expenses (including attorneys' fees and
expenses), judgments, fines and amounts paid in settlement in connection with
any threatened or actual claim, action, suit, proceeding or investigation.
Following the Effective Time, Surviving Corporation will cause the Company's
current directors' and officers' liability insurance policies to remain in
effect for at least three years after the Effective Time or will substitute
policies of at least the same coverage with terms and conditions which are not
less advantageous to the insureds than those presently maintained by the
Company.

ITEM 4. THE SOLICITATION OR RECOMMENDATION.

(a) Recommendation.

The Board of Directors of the Company (the "Board") unanimously recommends
that each holder of either Common Shares or 8% Preferred Shares (a
"Stockholder") tender all such Shares pursuant to the Tender Offers. The Board
has (i) determined that the Merger Agreement and the transactions contemplated
therein (the "Merger Transactions"), including, without limitation, the Tender
Offers and tenders made pursuant thereto, are fair to and in the best interests
of the Company and its stockholders and (ii) approved the Merger Agreement and
the Merger Transactions.

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This recommendation is based upon a thorough analysis of numerous factors
including but not limited to (i) the tender price proposed by Acquisition
relative to the trading price of the Common Shares immediately prior to the
announcement of the Tender Offers, (ii) an examination of prices paid for
similar companies prior to and at the time of the Tender Offers, (iii) the
estimated financial benefits to stockholders of alternative financial
strategies, (iv) changes in industry conditions and (v) third party opinions
regarding the fairness of the transaction proposed by Acquisition.

(b) Background and Reasons for the Recommendation.

The initial discussions of a possible combination involving Supercanal and
the Company took place at a meeting in October 1996 between senior officers of
the Company and representatives of Integra Financial Services LLC ("Integra"),
an advisor to Supercanal. These initial discussions, and additional discussions
through March 1997, focused on the high degree of consolidation in the Argentine
cable television industry which was taking place, and the advisability of
combining the operations of Supercanal and the Company in view of that
consolidation.

In April 1997, there were discussions about merging the Company into
Supercanal. Pursuant to the proposed terms, the Company's stockholders would
receive shares of stock in Supercanal. Extensive discussions were held and draft
agreements were prepared. However, the Merger would have required approval of
the stockholders of both companies. A stockholder of Supercanal, which had the
ability to preclude Supercanal from carrying out the Merger, stated it would not
approve a Merger. Accordingly, discussions of a Merger were dropped.

Early in August 1997, discussions of a combination involving Supercanal and
the Company were revived. Supercanal was represented in these discussions by
Integra, Smith Barney & Co., Inc. ("Smith Barney") and ING Baring (U.S.)
Securities, Inc. ("ING Securities"). The Company was represented in these
discussions by its senior officers and by Arnhold and S. Bleichroeder & Co.
("Bleichroeder"). By mid-August, each of Supercanal and the Company was
represented by counsel who began preparing draft agreements.

From mid-August to mid-September, there were nearly daily discussions of
such a combination. Initially, the discussions focused on a purchase by
Supercanal from the Company of what would be approximately 45% of its
outstanding Common Stock and 30% of its outstanding Series 1995 8% Preferred
Stock for approximately $39 million, followed by a Merger of the Company into a
Supercanal subsidiary pursuant to which the Company's stockholders were to
receive $4.53 per Common Share and $144.96 per 8% Preferred Share. However, at
Supercanal's suggestion, it was decided the transaction would take place in
three steps, with the Tender Offers taking place between the initial stock
purchase and the Merger.

A principal issue during these discussions was the Company's desire to
receive assurance that Supercanal would not become unable to complete such
transactions either (i) because it would not have adequate funds or (ii) because
its stockholders would not permit the transactions to proceed. Regarding the
first concern, ING Baring (US) Capital Corporation ("ING Capital") delivered a
letter to the Company stating that ING Capital had obtained internal credit
approval for a senior secured credit facility in an aggregate principal amount
sufficient to conclude the transactions contemplated by the Stock Purchase and
Merger Agreement (the "Original Merger Agreement"), dated as of September 16,
1997, between Acquisition and the Company, but that disbursement of the facility
is subject to the negotiation, execution and delivery of definitive
documentation satisfactory to ING Capital and its counsel, which would contain,
among other things, customary covenants, conditions precedent and security
arrangements (including financial covenants on a pro forma basis concerning the
combined operations of Supercanal and the Company). With regard to the second
concern, the stockholders of Supercanal all stated they approved of the
transaction.

On September 16, 1997, Supercanal and the Company signed the Original Merger
Agreement in which they agreed that (i) a subsidiary of Supercanal (Acquisition)
would purchase 10,790,000 shares of the

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Company Common Stock (which would be approximately 45% of the outstanding Common
Stock) for $35,930,700 ($3.33 per share) and would purchase 6,750,000 shares of
8% Preferred Stock (which would be 30% of the outstanding 8% Preferred Stock)
for $6,075,000 ($100 per share), (ii) shortly after completion of that stock
purchase, Acquisition would make Tender Offers for all the outstanding Common
Stock and 8% Preferred Stock for $4.50 per share and $144 per share plus an
amount equal to accrued dividends, respectively, and (iii) if the Tender Offers
resulted in Acquisition owning at least two-thirds of the outstanding Common
Stock and two-thirds of the outstanding 8% Preferred Stock (which would enable
the Supercanal subsidiary to approve the Merger between the Company and itself
even if no other Stockholders voted in favor of the Merger), the Company and
Acquisition would be merged in a transaction in which Supercanal would become
the sole stockholder of the merged company and each holder who had not tendered
his or her Shares would receive $4.50 per Common Share and $144, plus accrued
dividends, per 8% Preferred Share, unless he or she sought to obtain appraisal
of such Shares in accordance with Articles 5.11 through 5.13 of the TBCA. On
September 15, 1997, the day prior to the date of execution of the Original
Merger Agreement, the closing price for the Company's Common Stock, as reported
on the NASDAQ SmallCap Market, was $3.375 per share. The 8% Preferred Stock is
not publicly traded. Accordingly, the prices to be paid in the Tender Offers
represented a premium of 33.3% and 44.0% in excess of the closing price of the
Common Stock and the redemption price of the 8% Preferred Stock, respectively.
The Company's Board of Directors deemed the premiums to be significant and
concluded that the Tender Offers would enable the Company's stockholders to
realize a price per Share significantly higher than the price per Share such
stockholders would be likely to realize through an open market sale of Shares in
the absence of the Tender Offers.

After the Original Merger Agreement was signed, required filings were made
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the
"HSR Act"), and the waiting periods required by the HSR Act were terminated.
Also, agreements between Supercanal and various financial institutions,
including an agreement with ING Bank N.V., pursuant to which Supercanal received
the financing required for the Tender Offers and the Merger contemplated by the
Original Merger Agreement, were drafted. However, before those financing
agreements were signed, it was realized that the purchase by Acquisition of 45%
of the Company's Common Stock and 30% of its 8% Preferred Stock would not result
in the Company's financial statements being included in Supercanal's
consolidated financial statements. Consequently, the Merger would cause
Supercanal to be in violation of financial ratio covenants which were required
in the loan agreements.

On November 5, 1997, representatives of Supercanal informed the Company's
principal executive officers that Supercanal would not be able to carry out the
transactions contemplated by the Original Merger Agreement due to the reasons
mentioned above. Discussions ensued, and on December 5, 1997, Acquisition and
the Company entered into the Amended Stock Purchase and Merger Agreement. The
Merger Agreement provides that (i) on December 5, 1997, Acquisition shall
purchase a total of 6,006,006 shares of the Company's Common Stock for
$20,000,000 ($3.33 per share), of which $15,000,000 would be paid in cash and
the balance would be paid by permitting the Company to keep a $5,000,000 deposit
which the Acquisition had given to the Company when the Original Merger
Agreement was executed, (ii) the Tender Offers shall be announced not later than
December 12, 1997 and materials relating to the Tender Offers shall be sent to
the Company's stockholders not later than December 12, 1997, and (iii) if,
pursuant to the Tender Offers, Acquisition obtains at least two-thirds of the
outstanding Common Stock and two-thirds of the outstanding 8% Preferred Stock
(the "Minimum Condition"), the Merger shall occur. In such a case, Acquisition
will be merged with and into the Company, thus forming Surviving Corporation.
The Merger Agreement is described in Item 3(b) under the caption "The Merger
Agreement."

In the past two years, the Board has explored in detail numerous proposals
for maximizing stockholder value. These opportunities included the merger of the
business activities of the Company into other entities engaged in similar
activities and the outright sale of the Company to independent companies. During
this period of time, detailed discussions were conducted regarding the value of
the Company's

9
<PAGE>
properties relative to those of potential merger candidates. Additionally, the
Board considered the prices being paid for properties that were similar to those
owned by the Company. Based upon these analyses, the Board concluded that the
prices per Share offered by Acquisition pursuant to the Tender Offers was among
the highest prices paid in the equity market for properties similar to that
owned by the Company. Such conclusion was reached after an analysis of the per
share tender prices relative to per subscriber values, trailing estimated cash
flow multiples, discounted cash flow analyses and certain other criteria.

Subsequent to the execution of the Original Merger Agreement, the Argentine
cable television market experienced significant changes. Several acquisitions
have been announced which suggest that the Argentine cable television market
will be consolidated by three companies: Multicanal S.A. ("Multicanal"), which
holds a minority interest in Supercanal, Cablevision S.A. ("Cablevision"), which
is controlled by CEI and Supercanal. Additionally, an affiliate of Supercanal
acquired the Argentine cable television assets of United International Holdings,
Inc., and as a result of this acquisition, the Company and Supercanal operate
competitive cable television systems in the Argentine cities of Comodoro
Rivadavia, Trelew and Rawson. The Board has concluded that Tender Offers
represent an excellent opportunity for the Company's stockholders to capitalize
on the competitive re-alignment underway in the Argentine market.

Additionally, prior to executing the Original Merger Agreement, the Company
obtained a verbal opinion (the "Fairness Opinion") from Arnhold & S.
Bleichroeder, Inc. ("Bleichroeder"), an independent, third party investment
banker, regarding the fairness of the Tender Offers proposed by Acquisition.
Bleichroeder has provided financial and advisory services to the Company since
the commencement of its operations in Argentina including, but not limited to,
investment banking services pertaining to prospective mergers, capital-raising
activities and financial negotiations. Bleichroeder provided to the Board an
unqualified Fairness Opinion which concluded that the Tender Offers were fair
and equitable to the Company's stockholders from a financial point of view.
Bleichroeder re-issued its Fairness Opinion in written form at the time of
execution of the Merger Agreement, a copy of which is filed as Exhibit 6 hereto.

ITEM 5. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.

Each party to the Merger Agreement represents in Article 10.1 thereof that
nobody acted as a broker, a finder or in any similar capacity in connection with
the transactions which are the subject of this Agreement, except that
Bleichroeder and Prudential Securities, Inc. ("Prudential") acted as financial
advisors to the Company and ING Securities, Smith Barney and Integra acted as
financial advisors to Acquisition and Supercanal. The fees of Bleichroeder and
Prudential, which together will total the lesser of (i) 2% of the total amount
paid by Acquisition for shares it acquires through the Stock Purchase and the
Tender Offers plus the total Merger consideration, or (ii) $2 million will be
paid by the Company, except that if (i) the Tender Offers are commenced and all
the conditions on the Exhibit 2.1-C to the Merger Agreement are fulfilled, or
(ii) the Tender Offers are not commenced because Acquisition breaches its
obligations under the Merger Agreement, Acquisition will pay those fees. The
fees of ING Securities, Smith Barney and Integra, which together will total the
lesser of (x) 2% of the total amount paid by Acquisition for the shares it
acquires through the Stock Purchase (as defined in the Merger Agreement) and the
Tender Offers plus the Merger Consideration (as defined in the Merger Agreement)
or (y) $2 million, will be paid by Acquisition.

Except as described herein, neither the Company nor any person acting on its
behalf currently intends to employ, retain or compensate any other person to
make solicitations or recommendations to security holders on its behalf
concerning the Merger.

ITEM 6. RECENT TRANSACTIONS AND INTENT WITH RESPECT TO SECURITIES.

(a) Except as set forth in Items 3 and 4 herein, neither the Company nor any
subsidiary of the Company nor, to the best of the Company's knowledge, any
executive officer, director or affiliate of the Company has effected a
transaction in the Shares during the past 60 days.

10
<PAGE>
(b) To the best of the Company's knowledge, (i) each of its executive
officers and directors intends to tender his or her Shares in response to the
Tender Offers or (in the case of directors and executive officers who might as a
result of their tenders incur liability under Section 16(b) of the Securities
Exchange Act of 1934, as amended, and who do not tender their Shares) to vote
such Shares in favor of the Merger and (ii) none of its executive officers,
directors or other affiliates presently intends to otherwise sell any Shares
that are owned beneficially or held of record thereby.

ITEM 7. CERTAIN NEGOTIATIONS AND TRANSACTIONS BY THE SUBJECT COMPANY.

(a) Except as described in Item 3(b) and Item 4(b), the Company has not
undertaken, and there is not underway, any response to the Tender Offers which
relates to or would result in (i) an extraordinary transaction such as a Merger
or reorganization, involving the Company or any subsidiary of the Company; (ii)
a purchase, sale or transfer of a material amount of assets by the Company or
any subsidiary of the Company; (iii) a tender offer for or other acquisition of
securities by or of the Company; or (iv) any material change in the present
capitalization or dividend policy of the Company.

(b) Except as described in Items 3 and 4, there are no transactions, board
resolutions, agreements in principle or signed contracts in response to the
Tender Offers which relate to or would result in one or more of the events
referred to in Item 7(a) above.

ITEM 8. ADDITIONAL INFORMATION TO BE FURNISHED.

The Company is incorporated under the laws of Texas. Effective September 1,
1997, a new Part Thirteen of the TBCA prohibits a public corporation organized
under Texas law, or its majority owned subsidiaries, from engaging in a
transaction with a person who holds or acquires 20% or more of the corporation's
outstanding voting stock or its affiliates, for three years after the person
acquires that 20% or greater interest, share exchange, sale of significant
assets, issuance of shares, liquidation of the corporation pursuant to an
agreement with the 20% or greater stockholder, reclassification of the
securities of the corporation which increases the portion of the stock of any
class or series owned by the 20% or greater stockholder or the receipt by the
20% or greater stockholder of loans or similar financial assistance. The three
year ban does not apply, however, if the proposed transaction with the 20% or
greater stockholder, or the transaction by which the person became a 20% or
greater stockholder, is approved by the board of directors of the corporation
before the person becomes a 20% or greater stockholder. Because the Board of the
Company approved the Stock Purchase (the transaction by which Acquisition, and
indirectly Parent, became a 20% or greater stockholder of the Company) before it
took place, the TBCA will not apply to Acquisition or Supercanal.

ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.

(a) Exhibit 1. Offer to Purchase

(b) Exhibit 2. Merger Agreement

(d) Exhibit 4. 1993 Non Employee Directors Plan

(e) Exhibit 5. Programming Agreement

(f) Exhibit 6. Fairness Opinion

(g) Exhibit 7. Letter to Shareholder

11
<PAGE>
SIGNATURE

After reasonable 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.

December 8, 1997 /s/ Jack R. Crosby
--------------------------------------

Jack R. Crosby
CHAIRMAN OF THE BOARD AND
CHIEF EXECUTIVE OFFICER

12
<PAGE>
SCHEDULE I

TESCORP, INC.
327 CONGRESS AVENUE, SUITE 200
AUSTIN, TEXAS 78701

INFORMATION STATEMENT PURSUANT TO
SECTION 14(F) OF THE SECURITIES
EXCHANGE ACT OF 1934 AND RULE 14F-1 THEREUNDER

This Information Statement is being mailed on or about December 8, 1997 as a
part of the Solicitation/Recommendation Statement on Schedule 14D-9 (the
"Schedule 14D-9") of Tescorp, Inc. (the "Company") to the holders of record of
(i) the Company's Common Stock, par value $.02 per share (the "Common Stock"),
and (ii) the Company's Series 1995 8% Convertible Preferred Stock (the "8%
Preferred Stock") at the close of business on or about December 8, 1997. You are
receiving this Information Statement in connection with the election of persons
designated by Acquisition (as defined below) to all of the seats on the Board of
Directors of the Company (the "Board").

On November 26, 1997, the Company and Tescorp Acquisition Corporation
("Acquisition"), a Delaware corporation and wholly-owned subsidiary of
Supercanal Holding S.A. ("Supercanal"), entered into an Amended Stock Purchase
and Merger Agreement (the "Merger Agreement") in accordance with the terms and
subject to the conditions of which Supercanal has caused Acquisition to commence
tender offers (the "Tender Offers") to purchase (i) all outstanding shares of
Common Stock for $4.50 per share and (ii) all outstanding shares of 8% Preferred
Stock for $144 plus accrued and unpaid dividends per share (a share of any class
of the Company's stock is a "Share"). Under the Merger Agreement, the Tender
Offers will be followed by a merger (the "Merger") in which (i) any remaining
Shares of Common Stock not tendered pursuant to the Tender Offers will be
converted into the right to receive a cash amount of $4.50 per Share, without
interest and (ii) any remaining Shares of 8% Preferred Stock will be converted
into the right to receive a cash amount of $144 plus accrued and unpaid
dividends per Share, without interest (except any Shares as to which the holder
has properly exercised dissenters' rights of appraisal). As a result of the
Tender Offers and Merger, the Company will become a wholly-owned subsidiary of
Supercanal.

In accordance with the terms of the Merger Agreement, Daniel E. Vila, a
designee of Acquisition, was elected to the Board on December 5, 1997.
Additionally, after the Merger, Supercanal will cause the Board to consist
entirely of three members, all of whom will be designees of Supercanal. The
current designees are, in addition to Mr. Vila, Jose Maria Saenz Valiente and
Alfredo L. Vila, each of whom is currently a director of Supercanal.

You are urged to read this Information Statement carefully. You are not,
however, required to take any action. Capitalized terms used herein and not
otherwise defined herein shall have the meaning set forth in the Schedule 14D-9.

Pursuant to the Merger Agreement, Acquisition commenced the Tender Offers on
December 8, 1997. The Tender Offers are scheduled to expire at 12:00 midnight,
New York City time, on January 9, 1998 unless the Tender Offers are extended.

The information contained in this Information Statement concerning
Acquisition has been furnished to the Company by Acquisition, and the Company
assumes no responsibility for the accuracy or completeness of such information.
<PAGE>
VOTING RIGHTS OF EACH STOCK CLASS TO WHICH THE TENDER OFFERS RELATE

As of November 12, 1997, there are 13,217,450 outstanding Shares of Common
Stock and 139,250 outstanding Shares of 8% Preferred Stock.

Each Share of Common Stock is entitled to one vote.Pursuant to Section 2 of
the Company's Bylaws, dated June 7, 1990, at an election for directors, each
holder of Common Stock entitled to vote at such election shall have the right to
vote the number of Shares owned by him or her for as many persons as there are
to be elected and for whose election he or she has a right to vote.

Each Share of 8% Preferred Stock is convertible into Shares of Common Stock
by dividing $100.00 by a conversion price of $3.125 per Share, subject to
certain adjustments. Holders of the 8% Preferred Stock are entitled to vote as
if they had converted into Common Stock. However, the 8% Preferred Stock votes
are counted as a class (separate from the Common Stock votes).

RIGHT TO DESIGNATE DIRECTORS; ACQUISITION DESIGNEES

In accordance with Section 7.6 of the Merger Agreement, Daniel E. Vila, a
designee of Acquisition, was elected to the Board on December 5, 1997 and the
Company is to use its best efforts to cause Mr. Vila, or another of
Acquisition's designees in place of Mr. Vila, to be re-elected at all subsequent
meetings of the Company's stockholders at which directors are elected. Pursuant
to Section 3.5 of the Merger Agreement, after the Merger, Jose Maria Saenz
Valiente, Jr., Alberto L. Vila and Daniel E. Vila (collectively, "Supercanal's
Designees"), will constitute the entire Board of Directors of the Company. Each
of Supercanal's Designees is currently a director of Supercanal.

Certain information regarding Supercanal's Designees and the other directors
and executive officers of Supercanal is listed on Schedule I to the Offer to
Purchase, a copy of which is being mailed to the Company's stockholders together
with this Information Statement. The information on such Schedule I is
incorporated herein by reference.

None of the directors or executive officers of Supercanal (i) is currently a
director of, or holds any position with, the Company, (ii) has a familial
relationship with any directors or executive officers of the Company or (iii) to
the best knowledge of Supercanal, beneficially owns any securities (or rights to
acquire such securities) of the Company. The Company has been advised by
Supercanal that, to the best of Supercanal's knowledge, none of its directors or
executive officers has been involved in any transactions with the Company or any
of its directors, executive officers or affiliates which are required to be
disclosed pursuant to the rules and regulations of the Commission, except as may
be disclosed herein or in the Schedule 14D-9.

Biographical information concerning each of the Company's current directors
and executive officers is presented on the following pages.

2
<PAGE>
INFORMATION CONCERNING MEMBERS OF THE BOARD

The following is a list of the Company's executive officers and directors as
of August 18, 1997.

<TABLE>
<CAPTION>
NAME AGE POSITION
- ------------------------------------ ----- --------------------------------------------------------------------
<S> <C> <C>

Jack R. Crosby 71 Chairman of the Board and Chief Executive Officer

Jack S. Gray, Jr. 40 President, Chief Operating Officer and Director

Neil R. Austrian, Jr. 32 Senior Vice President and Chief Financial Officer

David Justice 48 Chief Financial Officer of Latin America

John D. Becker 33 Controller

Osvaldo Rossi 43 Chief Executive Officer of Cabledifusion S.A.*

Carlos Saba 42 Chief Operating Officer of Cabledifusion S.A.*

Winston J. Churchill 56 Director

J. Kelly Elliott 66 Director

Lee A. Lahourcade 40 Director
</TABLE>

- ------------------------

* Cabledifusion S.A. is a subsidiary of the Company that manages its cable
operations in Argentina.

All directors hold office until the next annual meeting of shareholders and
until their successors have been duly elected and qualified. Executive officers
are elected by and serve at the discretion of the Board.

Jack R. Crosby has been Chairman of the Board since the Company's inception
in 1980, and became Chief Executive Officer in 1991. Mr. Crosby is the General
Partner of Rust Group, L.P., a Texas limited partnership holding certain of Mr.
Crosby's business assets, and he is the President of Rust Capital, Ltd. ("Rust
Capital"), a small business investment corporation with its headquarters in
Austin, Texas. Mr. Crosby has been involved in the cable television industry
since its infancy, and he was in the first group of cable television executives
recognized by the National Cable Television Association as a pioneer of the
industry. Mr. Crosby has been involved in the development of cable television
systems in the United States, Mexico and Switzerland. Mr. Crosby presently
serves as a director of Prime Cable, Inc. ("Prime Cable") of Austin, Texas.
Prime Cable and its affiliates own and operate cable television systems in
Chicago, Illinois, Las Vegas, Nevada, Anchorage, Alaska and other markets. A
former director and Chairman of the National Cable Television Association, Mr.
Crosby has provided cable television consulting services to the governments of
West Germany, Austria and Holland. Mr. Crosby also serves as a director of two
other publicly traded companies: National Dentex Corporation, a manufacturer of
dental appliances, and DSI Toys, Inc., a toy manufacturer and distributor.

Jack S. Gray, Jr. has been a director of the Company since 1989. Since April
1992, Mr. Gray has been the President and Chief Operating Officer of the
Company. From August 1991 until April 1992, Mr. Gray was President of J&J
Mercantile, an investment firm in Austin, Texas. From April 1991 until August
1991, Mr. Gray was Deputy Director of Appointments in the Office of the
Governor, State of Texas. From 1985 to 1991, he was the Chief Financial Officer
of the "Rust Group" (which collectively refers to the business activities of Mr.
Crosby), and in this capacity, he served as an officer or director of numerous
entities in which Mr. Crosby held direct and indirect ownership interests. Prior
to 1985, Mr. Gray was an investment banker with Duncan, Smith & Co., San
Antonio, Texas.

Neil R. Austrian, Jr. has been Vice President of the Company since 1994 and
was named Senior Vice President and Chief Financial Officer in July 1997. Mr.
Austrian has worked in association with Mr. Crosby

3
<PAGE>
for the past seven years and, prior to joining the Company, was an Associate
with Rust Capital. Mr. Austrian serves on the Board of Directors of Software
Publishing Corporation.

David Justice has been Chief Financial Officer--Latin America since joining
the Company in September 1995. Mr. Justice is a ten year veteran of the cable
television industry. Prior to joining the Company, Mr. Justice was employed by
Prime Cable, which he joined in 1981 as Controller, and then served as
Treasurer. During his tenure, Prime Cable grew from approximately 25,000
subscribers to 600,000 subscribers and provided cable television service to
customers in Alaska, New York, Georgia, Texas, Maryland, Nevada, North Carolina,
Indiana and Wyoming. Mr. Justice worked for Seidman & Seidman and Coopers &
Lybrand as a Certified Public Accountant before joining Prime Cable.

John D. Becker has been the Controller of the Company since 1990. Mr. Becker
is a Certified Public Accountant and a member of the American Institute of
Certified Public Accountants and the Texas Society of Certified Public
Accountants.

Osvaldo Rossi has acted as Chief Executive Officer of Cabledifusion S.A.
since 1995. Mr. Rossi is a native of Argentina who resides in Buenos Aires. Mr.
Rossi is the former Engineering and Technology Advisor to the AVC, the Argentine
cable television trade association, and is the author of Cable and Satellite TV,
which was published in Argentina in 1990. He has also authored approximately 60
articles regarding cable television and telecommunications that have been
published in various Latin American newspapers and trade publications. Mr. Rossi
is a founder of Proyectos de Comunicaciones, S.A. ("Proyectos"), a company that
provides engineering and operational consulting services to cable television and
telecommunications companies. Proyectos has had as clients such Argentine firms
as Clarin/Canal 13, Cablevision, Video Cable Comunicaciones, S.A., and Telintar.
Prior to forming Proyectos, Mr. Rossi served at Video Cable Comunicacion, S.A.,
one of the largest cable television operators in Argentina, in several
capacities including Vice President of Engineering and Technology. Mr. Rossi
earned an Electronics Engineer certification from the National University of
Technology (Argentina) in 1979.

Carlos Saba has acted as Chief Operating Officer of Cabledifusion S.A. since
1995. Mr. Saba is a native of Argentina who resides in Buenos Aires. Mr. Saba is
also a founder of Proyectos. Mr. Saba was a founder of Cabtec, S.A. and Cabtec
Industria Eletronica L.T.D.A., companies which designed and manufactured cable
television equipment in Argentina and Brazil under license from C-Cor
Electronics, Inc. Mr. Saba is the founder of several cable television systems in
Argentina and Brazil and from 1981 to 1988 Mr. Saba worked in various
capacities, including Chief Engineer, with Video Cable Comunicaciones, S.A. Mr.
Saba earned a Masters of Business Administration degree from Belgrano University
(Argentina) in 1988 and an Electronics Engineer certification from the National
University of Technology (Argentina) in 1980.

Winston J. Churchill has been a director of the Company since July 1995. Mr.
Churchill formed Churchill Investment Partners, Inc. in 1989 and CIP Capital,
Inc. in 1990, each an investment and venture capital fund, and continues to be a
principal of each. From 1989 to 1993 he served as Chairman of the Finance
Committee of the $24 billion Pennsylvania Public School Employees' Retirement
System.

J. Kelly Elliott has served as a director of the Company since 1983. Since
1990, Mr. Elliott has been Chairman of the Board and Chief Executive Officer of
Sigma Electronics, a manufacturer and distributor of electrical transformers.
Mr. Elliott has also served since 1992 as Chairman and Chief Executive Officer
of Omnicomp Graphics, Inc., a computer graphics company, and Seaboard-Avval,
Inc., an oil field equipment manufacturer. From 1983 through 1989, Mr. Elliott
was President and Chief Executive Officer of the Company. From 1976 to 1983, Mr.
Elliott served as President and Chief Executive Officer of several wholly-owned
subsidiaries of Hughes Tool Company, including Brown Oil Tools and BJ-Hughes,
each of which was engaged in oil field services. In June 1993, Mr. Elliott was
elected Chairman of the Board of Grant Tensor Geophysical Corporation, a
publicly traded oil field service company, and he served in that capacity
through November 1995.

4
<PAGE>
Lee A. Lahourcade has been a director of the Company since March 1992. Mr.
Lahourcade was president of Rust Capital from June 1988 to June 1992. Since
then, Mr. Lahourcade has served as a principal at Vaughn, Nelson, Scarborough,
McConnell, L.P., a money management firm. Prior to joining Rust Capital, Mr.
Lahourcade was Vice President of Merrill Lynch & Co. in the investment banking
area.

COMMITTEES AND MEETINGS

The Board met four times in the twelve months ended March 31, 1997. During
such twelve month period, each incumbent director of the Company attended 75
percent or more of the aggregate number of (a) meetings of the Board held during
his tenure and (b) meetings held by committees of the Board on which he served.

EXECUTIVE COMMITTEE. The Executive Committee is currently comprised of Mr.
Crosby and Mr. Gray, and possesses all of the powers of the Board between
meetings of the Board, except for certain matters that may not be delegated
under the Company's Bylaws. The Executive Committee did not meet during the
fiscal year 1997.

COMPENSATION COMMITTEE. The Board created a Compensation Committee on
February 20, 1991. The duties of the Compensation Committee include the approval
of officers' salaries and administration of the Company's 1991 Incentive Plan.
The Compensation Committee is comprised of "disinterested" directors, as defined
under Section 16 of the Exchange Act of 1934 (the "Exchange Act"), and currently
consists of Messrs. Elliott and Lahourcade. The Compensation Committee met 2
times during the fiscal year 1997.

NOMINATIONS. The Board does not have a Nominating Committee. Nominations
for candidates for election may be made by the Board or by any shareholder
entitled to vote at a meeting of shareholders called for the election of
directors. Nominations made by the Board are made at the same time at which the
date is set for a meeting of shareholders called for the election of directors.
Nominations made by a shareholder must be made by giving notice of such in
writing to the Secretary of the Company before the later of (i) 60 days prior to
the date of the meeting of shareholders called for the election of directors or
(ii) ten days after the Board first publishes the date of such meeting. Such
notice shall include all information concerning each nominee as would be
required to be included in a proxy statement soliciting proxies for the election
of such nominee under the Exchange Act. Such notice shall also include a signed
consent of each nominee to hold office until the next annual meeting of
shareholders or until his successor is elected or appointed.

AUDIT COMMITTEE. In March 1992, the Board created an Audit Committee.
Messrs. Elliott, Lahourcade and Churchill currently serve on this committee. The
Audit Committee met one time during the fiscal year 1997.

5
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table shows the number of Shares of the Company's Common
Stock, 8% Preferred Stock and Series 1990 10% Convertible Preferred Stock (the
"10% Preferred Stock" and, together with the 8% Preferred Stock, the "Preferred
Stock") that may be deemed beneficially owned on March 31, 1997 by each person
known to the Company to be the beneficial owner of more than 5% of the Company's
outstanding voting securities, along with information with respect to each of
the nominees for director and all directors and officers as a group as of March
31, 1997.

<TABLE>
<CAPTION>
COMMON STOCK 1990 10% PREFERRED STOCK 1995 8% PREFERRED STOCK
------------------------------------- ---------------------------- --------------------------
AMOUNT AND AMOUNT AND AMOUNT AND
NATURE OF PERCENT PERCENT NATURE OF PERCENT NATURE OF PERCENT
BENEFICIAL OF OF BENEFICIAL OF BENEFICIAL OF
BENEFICIAL OWNER OWNERSHIP CLASS(1) CLASS(2) OWNERSHIP CLASS(3) OWNERSHIP CLASS(4)
- ----------------------------------- ----------- ----------- ----------- ------------- ------------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>

BEA Associates..................... 2,250,000(5) 15.5 12.1 -- -- 40,000 28.7
153 East 53rd Street
One Citicorp Center
New York, NY 10022

Argentina Equity Investment 1,855,000(6) 13.1 10.0 -- -- 30,000 21.5
Partnership......................
c/o BEA Associates
153 East 53rd Street
One Citicorp Center
New York, NY 10022

K-G, L.P........................... 1,265,192(7) 9.6 6.8 -- -- 1,250 *
Winston J. Churchill
Frederick M. Danziger
John Fletcher
W&M Management Company, Inc.
641 Lexington Avenue, 29th Floor
New York, NY 10022

Fred Lieberman..................... 1,163,060(8) 8.8 6.3 -- -- -- --
6251 B Park of Commerce Blvd.
Boca Raton, FL 33487

Arnhold and S. Bleichroeder, Inc... 1,133,850(9) 8.0 6.0 -- -- 16,750 12.0
1345 Avenue of the Americas
New York, NY 10022.

Harvey Sandler..................... 928,200(10) 7.0 5.0 -- -- -- --
c/o Sandler Capital
767 Fifth Avenue, 45th Floor
New York, NY 10153

Banque Nationale de Paris.......... 691,673(11) 5.0 3.7 -- -- 20,000 14.4
(Switzerland) Ltd.
c/o Arnhold and S. Bleichroeder
1345 Avenue of the Americas
New York, NY 10022
</TABLE>

6
<PAGE>
<TABLE>
<CAPTION>
COMMON STOCK 1990 10% PREFERRED STOCK 1995 8% PREFERRED STOCK
------------------------------------- ---------------------------- --------------------------
AMOUNT AND AMOUNT AND AMOUNT AND
NATURE OF PERCENT PERCENT NATURE OF PERCENT NATURE OF PERCENT
BENEFICIAL OF OF BENEFICIAL OF BENEFICIAL OF
BENEFICIAL OWNER OWNERSHIP CLASS(1) CLASS(2) OWNERSHIP CLASS(3) OWNERSHIP CLASS(4)
- ----------------------------------- ----------- ----------- ----------- ------------- ------------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
SC Fundamental, Inc................ 640,000(12) 4.6 3.5 -- -- 20,000 14.4
Gary N. Siegler
Peter M. Collery
712 Fifth Avenue, 19th Floor
New York, NY 10019

The SC Fundamental Value Fund, 416,000(12) 3.1 2.2 -- -- 13,000 9.3
L.P..............................
712 Fifth Avenue, 19th Floor
New York, NY 10022.

The South America Fund N.V......... 395,000(13) 2.9 2.1 -- -- 10,000 7.2
c/o BEA Associates
153 East 53rd Street
New York, NY 10022

Clarex Limited..................... 337,500(14) 2.5 1.8 -- -- 10,000 7.2
Scotiabank Bldg., 3rd Floor
Rawson Square
Nassau, N.P., Bahamas

First Eagle Fund N.V............... 320,000(15) 2.4 1.7 -- -- 10,000 7.2
c/o Arnhold and S. Bleichroeder,
Inc.
1345 Avenue of the Americas
New York, NY 10022.

Mervyn L. Lapin.................... 311,475(16) 2.4 1.7 46,534 6.7 -- --
232 W. Meadow Drive
Vail, CO 81657

Kenneth Pasternak.................. 305,125(17) 2.3 1.6 40,000 5.8 -- --
525 Washington Blvd.,
Suite 2401
Jersey City, NJ 07310

SC Fundamental Value BVI, Inc...... 224,000(12) 1.7 1.2 -- -- -- --
712 Fifth Avenue, 19th Floor
New York, NY 10022

Special Situation Fund, L. P. 72,055 * * 57,500 8.3 -- --
III..............................
153 East 53rd Street
New York, NY 10022

Jack R. Crosby..................... 463,544(18) 3.4 2.5 -- -- -- --
327 Congress Avenue,
Suite 200
Austin, Texas 78701

J. Kelly Elliott................... 58,664(19) * * -- -- -- --
327 Congress Avenue,
Suite 200
Austin, Texas 78701
</TABLE>

7
<PAGE>
<TABLE>
<CAPTION>
COMMON STOCK 1990 10% PREFERRED STOCK 1995 8% PREFERRED STOCK
------------------------------------- ---------------------------- --------------------------
AMOUNT AND AMOUNT AND AMOUNT AND
NATURE OF PERCENT PERCENT NATURE OF PERCENT NATURE OF PERCENT
BENEFICIAL OF OF BENEFICIAL OF BENEFICIAL OF
BENEFICIAL OWNER OWNERSHIP CLASS(1) CLASS(2) OWNERSHIP CLASS(3) OWNERSHIP CLASS(4)
- ----------------------------------- ----------- ----------- ----------- ------------- ------------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Jack S. Gray, Jr................... 557,056(20) 4.1 3.0 9,850 1.4 -- --
327 Congress Avenue,
Suite 200
Austin, Texas 78701

Lee A. Lahourcade.................. 26,880(21) * * 1,500 * -- --
327 Congress Avenue,
Suite 200
Austin, Texas 78701

All directors and officers as a 1,517,986 10.9 7.9 11,350 1.6 1,250 *
group (five persons).............
</TABLE>

- ------------------------

* Less than one percent

(1) Calculated as the fraction of which the numerator is the total number of
Common Stock Shares or Common Stock equivalent Shares owned by the director,
officer or holder of 5% or more of the Company's Shares (the "Beneficial
Owner") which is calculated as the sum of the number of Shares of Common
Stock owned, the number of Shares of Common Stock into which the Preferred
Stock owned could be converted, and the number of Shares of Common Stock
which could be acquired within 60 days by the exercise of warrants or
options, and the denominator of which is the sum of the total number of
Shares of Common Stock outstanding, the number of Shares of Common Stock
into which the Preferred Stock owned by the Beneficial Owner could be
converted, and the number of Shares of Common Stock which could be acquired
by the Beneficial Owner within 60 days by the exercise of warrants and
options.

(2) Calculated as the fraction of which the numerator is the total number of
Common Stock Shares or Common Stock equivalent Shares owned by the
Beneficial Owner which is calculated as the sum of the number of Shares of
Common Stock owned, the number of Shares of Common Stock into which the
Preferred Stock owned could be converted, and the number of Shares of Common
Stock which could be acquired within 60 days by the exercise of warrants or
options, and the denominator of which is the sum of the total number of
Shares of Common Stock outstanding, the total number of Shares of Common
Stock into which the aggregate outstanding Preferred Stock could be
converted, and the number of Shares of Common Stock which could be acquired
by the Beneficial Owner within 60 days by the exercise of warrants or
options.

(3) Based on 693,864 Shares outstanding.

(4) Based on 139,250 Shares outstanding.

(5) BEA Associates filed a Schedule 13G dated January 15, 1996, as an Investment
Adviser registered under Section 208 of the Investment Advisers Act of 1940
pursuant to Rules 13d-1(b) or 13d-2(b). This filing reported the beneficial
ownership of the Shares owned by Argentina Equity Investment Partnership.
Additionally, in its filing it stated that CS Holding indirectly owns 80% of
the partnership units in BEA Associates. CS Holding and its direct and
indirect subsidiaries, in addition to BEA Associates, may beneficially own
Shares of the Company and such Shares were not reported on the Schedule 13G
filing. However, the Company believes that under certain conditions, Shares
owned by The South America Fund, N.V. may be deemed to be beneficially owned
by BEA, and are included in the Shares beneficially owned by BEA Associates.

8
<PAGE>
(6) Includes 895,000 Shares of Common Stock held directly and 960,000 Shares
issuable upon conversion of the 8% Preferred Stock held directly.

(7) K-G, L.P., John Fletcher, W&M Management Company, Inc., Frederick M.
Danziger and Winston J. Churchill, Jr. filed an amended Schedule 13D on July
1, 1995 in which they indicated they were members of a "group" for the
purposes of Section 13(d) of the Securities Exchange Act and the regulations
promulgated thereunder. Includes 1,215,414 Shares held directly, 9,778
Shares subject to currently exercisable options held by Winston J.
Churchill, and 40,000 Shares issuable upon conversion of the 8% Preferred
Stock (which is held directly by Winston J. and Barbara G. Churchill),
299,342 of such Shares are held by Mr. Churchill and his wife, Barbara G.
Churchill, 62,500 Shares are held by the Winston J. Churchill Retirement
Plan of which Mr. Churchill is a beneficiary. The Sharpe Irrevocable Inter
Vivos Trust, of which Jack R. Crosby's wife is the sole beneficiary, holds a
limited partnership interest in 853,572 of such Shares (see note 18).

(8) Mr. Lieberman filed a Schedule 13D dated March 17, 1992 in which he stated
that he has no current definitive plan to gain control of the Company or to
cause the Company to change its current Board or management, capitalization,
dividend policy, business or corporate structure.

(9) Arnhold and S. Bleichroeder, Inc. ("Bleichroeder") filed a Schedule 13G on
February 13, 1997, in which they indicated that they disclaimed beneficial
ownership of 621,700 Shares of Common Stock reflected in the table. Includes
486,150 Shares subject to warrants, 536,000 Shares issuable upon conversion
of the 8% Preferred Stock and 111,700 Shares held in discretionary accounts
as to which Bleichroeder acts as investment advisor.

(10) Mr. Sandler, 21st Century Communications Partners, L.P., 21st Century
Communications T-E Partners, L.P., 21st Century Communications Foreign
Partners, L.P., Sandler Investment Partners, L.P., Sandler Capital
Management and ARH Media Corp. filed a Schedule 13D, dated May 5, 1995, in
which they indicated that they were members of a "group" for the purposes of
Section 13(d) of the Securities Exchange Act and the regulations promulgated
thereunder.

(11) Consists of 34,173 Shares of Common Stock held directly, 640,000 Shares
issuable upon conversion of the 8% Preferred Stock held directly and 17,500
Shares subject to warrants.

(12) The SC Fundamental Value Fund, L.P., S.C. Fundamental Value BVI, Inc., S.C.
Fundamental, Inc., Gary N. Siegler and Peter M. Collery filed a Schedule
13D, dated May 2, 1995, in which they indicated that The SC Fundamental
Value Fund, L.P. and S.C. Fundamental, Inc. were members of a "group," and
that Mr. Siegler and Mr. Collery may, without so admitting, be members of a
"group," in each case, for the purposes of Section 13(d) of the Securities
Exchange Act and the regulations promulgated thereunder.

(13) Includes 40,000 Shares of Common Stock held directly, 320,000 Shares
issuable upon conversion of the 8% Preferred Stock held directly and 35,000
Shares subject to currently exercisable warrants.

(14) All such Shares are held directly in a discretionary account over which
Inter Vivos, Inc. exercises voting and investment control. Inter Vivos, Inc.
disclaims beneficial ownership of such Shares, all of which are reflected in
their holdings. See note (9) above.

(15) Consists of Shares issuable upon conversion of the 8% Preferred Stock held
directly.

(16) Includes 253,162 Shares of Common Stock held directly and 46,534 Shares of
the 10% Preferred Stock which can be converted into 58,313 Shares of Common
Stock.

(17) Includes 255,000 Shares held directly and 50,125 Shares of Common Stock
issuable upon the conversion of the Shares of 10% Preferred Stock held
directly.

(18) Excludes 172,043 Shares held by the Jack R. Crosby Inter Vivos Trust as to
which members of Mr. Crosby's immediate family are the beneficiaries and as
to which Mr. Crosby disclaims any voting or investment power. Excludes
853,752 Shares held through a limited partnership interest by a partnership
in which the

9
<PAGE>
Sharpe Irrevocable Inter Vivos Trust, in which Mr. Crosby's wife is the sole
beneficiary and as to which Mr. Crosby disclaims any voting or investment
power. See footnote (7) above. Includes 136,460 Shares held directly by Mr.
Crosby and 327,084 Shares subject to currently exercisable options.

(19) Includes 9,394 Shares held directly and 49,270 Shares subject to currently
exercisable options.

(20) Calculated as the sum of the number of Shares of Common Stock owned
directly (242,628), plus the following number of Shares of Common Stock into
which the Shares of Preferred Stock could be converted: 11,341 Shares held
by Mr. Gray directly and 1,003 Shares held in trust for the benefit of Mr.
Gray's child. Mr. Gray holds options to acquire 302,084 Shares which are
currently exercisable.

(21) Includes 1,880 Shares into which Shares of Preferred Stock held directly by
Mr. Lahourcade may be converted and 16,666 Shares subject to options granted
to Mr. Lahourcade on October 4, 1994, and 8,334 Shares subject to options
granted March 1994, pursuant to the 1993 Option Plan.

10
<PAGE>
EXECUTIVE COMPENSATION

The following table sets forth certain information for the fiscal years
ended March 31, 1997, 1996 and 1995, with respect to the Chief Executive Officer
(Jack R. Crosby) and the President and Chief Operating Officer (Jack S. Gray,
Jr.) at March 31, 1997. There were no other executive officers of the Company
who earned annual compensation that exceeded $100,000 during fiscal 1997.

SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION (SECURITIES
FISCAL PRINCIPAL ------------------------------------ UNDERLYING
YEAR NAME POSITION SALARY BONUS OTHER OPTIONS)*
- ----------- -------------------------- -------------------------- ---------- ----------- ----------- -------------
<C> <S> <C> <C> <C> <C> <C>

1997 Jack R. Crosby Chairman and CEO $ 150,000 -- -- 275,000

Jack S. Gray, Jr. President and COO $ 125,000 -- -- 225,000

1996 Jack R. Crosby Chairman and CEO $ 112,500 -- -- 250,000

Jack S. Gray, Jr. President and COO $ 125,000 -- -- 175,000

1995 Jack R. Crosby Chairman and CEO $ 100,000 -- -- (c)

Jack S. Gray, Jr. President and COO $ 125,000 -- -- (c)

FISCAL ALL OTHER
YEAR COMPENSATION
- ----------- -----------------
<C> <C>
1997 --
--
1996 --
--
1995 --
--
</TABLE>

- ------------------------

* Options granted include a limited stock appreciation right ("LSAR") that
becomes exercisable at the employee's option only if there is a change in
control of the Company. See "Benefits" section herein for explanation of the
intentions of the Company's LSAR holders.

STOCK OPTION GRANTS IN 1997

The Company maintains the 1991 Incentive Plan, pursuant to which 2,000,000
Shares of Common Stock are issuable to employees of the Company. The following
table shows information concerning individual grants of stock options during
fiscal 1997 to the named executive officers.

<TABLE>
<CAPTION>
NO. OF SECURITIES % OF TOTAL
UNDERLYING OPTIONS OPTIONS GRANTED EXERCISE EXPIRATION
NAME GRANTED TO EMPLOYEES PRICE DATE
- ----------------------------------------------- -------------------- ----------------- ----------- -------------
<S> <C> <C> <C> <C>

Jack R. Crosby................................. 275,000 45.8 $ 3.5625 3/11/07

Jack S. Gray, Jr............................... 225,000 37.5 $ 3.5625 3/11/07
</TABLE>

- ------------------------

* All options shown are exercisable in three equal annual installments
beginning March 31, 1998.

11
<PAGE>
STOCK OPTION EXERCISES AND HOLDINGS

The following table shows information regarding stock option exercises and
unexercised options held as of the end of fiscal 1997 by the named executive
officers.
<TABLE>
<CAPTION>
AT MARCH 31, 1997
--------------------------------------------------------
<S> <C> <C> <C> <C> <C>
VALUE OF IN-THE-MONEY
NUMBER OF EXERCISED OPTIONS OPTIONS
--------------------------- ---------------------------

<CAPTION>
NAME OPTIONS EXERCISED EXERCISABLE* UNEXERCISABLE* EXERCISABLE* UNEXERCISABLE*
- ----------------------------------- ----------------------- ----------- -------------- ----------- --------------
<S> <C> <C> <C> <C> <C>
Jack R. Crosby..................... 0 327,030 522,750 $ 590,188 $ 266,063
Jack S. Gray, Jr................... 0 302,200 432,800 $ 577,663 $ 241,088
</TABLE>

- ------------------------

* Based on closing price of $3.50 on March 31, 1997.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

Compensation decisions for executive officers are made by the Compensation
Committee of the Board, which currently consists of Lee A. Lahourcade, J. Kelly
Elliott and Winston J. Churchill. Mr. Elliott served as the President and Chief
Executive Officer of the Company from 1983 through 1989. Neither Mr. Lahourcade
nor Mr. Churchill has ever served as an officer of the Company. See "Certain
Relationships and Related Transactions" section herein.

BENEFIT PLANS

The Company offers all of its employees and members of their immediate
families, health, dental and life insurance coverage.

Additionally, the Company has the following plans:

AMENDED AND RESTATED 1991 INCENTIVE PLAN. As of the date hereof, there are
8 holders (each an "Optionholder") of options to purchase Shares of Common Stock
(each an "Option") under the Company's Amended and Restated 1991 Incentive Plan
(the "1991 Incentive Plan"), a copy of which is filed as Exhibit 3 to the 14D-9,
at various exercise prices. The aggregate number of Shares of Common Stock
underlying such Options is 1,850,000. There are an additional 83,333 Shares of
Common Stock underlying Options granted pursuant to the 1993 Non-Employee
Directors Stock Option Plan (described below), which makes the total number of
shares of Common Stock underlying outstanding Options 1,933,333.

Pursuant to Section 9 of the 1991 Incentive Plan, at and after the Effective
Time (as defined below), each holder of an Option thereunder shall be entitled
to purchase under such Option, in lieu of the number of shares of Common Stock
that would have been received, the number and class of shares of stock and other
securities to which such holder would have been entitled pursuant to the terms
of the Merger if, immediately prior thereto, the Optionholder had been the
holder of record of the number of Shares of the Company's Common Stock. The
"Effective Time" is 11:59 P.M. on the day when a Certificate of Merger has been
filed with the Secretary of State of Texas and a Certificate of Merger has been
filed with the Secretary of State of Delaware.

In accordance with Section 8 of the 1991 Incentive Plan, certain of the
Optionholders hold LSARs pursuant to which they have the right, with respect to
each Option to which an LSAR relates (a "Related Option"), to receive in cash a
dollar amount equal to the product computed by multiplying (i) the excess of (A)
the Merger Price per Share (as defined in the Merger Agreement) over (B) the
exercise price per share (as defined in each respective Related Option
Agreement) of Common Stock at which the Related Option is exercisable, by (ii)
the number of Shares of Common Stock with respect to which such LSAR is being
exercised. Each LSAR may be exercised only during the period of seven months
immediately following the date on which the Tender Offers were first made.
However, prior to the Tender Offers, each

12
<PAGE>
LSAR holder entered into an agreement with the Company pursuant to which he or
she agreed not to exercise such LSAR and to exercise in full the Related Option
and tender the underlying Shares.

Pursuant to Section 7.7 of the Merger Agreement, the Company is obligated to
use its best efforts to provide that, immediately prior to the acceptance of
Shares in response to the Tender Offers, each Optionholder will become fully
vested and, if certain conditions to the Merger Agreement are fulfilled, each
Option will be canceled and each Optionholder will receive the excess of the
Merger Price for the Common Stock over the per share exercise price of the
Option multiplied by the number of shares subject to the Option at the time such
Option is canceled.

1993 NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN. As of the date hereof, there
are three Directors, J. Kelly Elliott, Lee A. Lahourcade and Winston J.
Churchill, who hold Options under the Company's 1993 Non-Employee Directors
Stock Option Plan (the "1993 Option Plan"), a copy of which is attached as
Exhibit 4 to the 14D-9. Pursuant to Section 11 of the 1993 Option Plan, the
Merger will cause all Options issued thereunder and outstanding to terminate,
and in this event, each of these holders shall have a right, exercisable within
a period of 30 days immediately prior to the closing of the Merger, to exercise
the Option without regard to any limitation on exercise prior to the date
contained in a related Option Agreement, unless such Option has expired or been
terminated pursuant to its terms. The 1993 Option Plan is further described in
the "Compensation of Directors" section of this Information Statement.

COMPENSATION OF DIRECTORS

Each of the Company's directors who is not an employee of the Company
receives $1,000 for each board meeting attended, plus $500 for each committee
meeting attended. Employees of the Company are not paid directors' fees. No
member of the Board was paid any compensation in the Company's 1997 fiscal year
for his service as a director of the Company other than pursuant to the standard
compensation arrangement for directors.

At the annual meeting of shareholders held in October 1993, the 1993 Option
Plan, discussed above, was approved. Pursuant to the 1993 Option Plan,
non-employee directors are entitled to receive one Option to purchase 8,333
Shares of Common Stock upon becoming a director, a second Option to purchase an
additional 8,333 Shares at the completion of one year of service, and a third
Option to purchase an additional 8,334 Shares at the completion of two years of
service.

The 1993 Option Plan was adopted to further the goal of attracting and
retaining highly qualified non-employee directors of the Company and to motivate
them to assert their best efforts for the Company. As a result of changes
effected at last year's annual meeting, non-employee directors are eligible to
participate in the Company's 1991 Incentive Plan. As employees, neither Mr. Gray
nor Mr. Crosby is eligible to participate in the 1993 Option Plan.

EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE IN
CONTROL ARRANGEMENTS

Currently, no employment contract exists between the Company and any of its
employees.

Pursuant to Section 7.1(m) of the Merger Agreement, Jack S. Gray and Jack R.
Crosby are to receive bonuses prior to the Merger totaling an aggregate of
$300,000.

13
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

During fiscal year 1996, J. Kelly Elliott, a director of the Company, was
indebted to the Company in the amount of approximately $84,000, including
accrued and unpaid interest by virtue of a loan that had been made in 1989. In
March 1996, the Company agreed that Mr. Elliott could satisfy his obligation by
assigning to the Company 21,567 shares of outstanding Common Stock, which was
then trading at approximately $3.75 per Share, and cash of approximately $5,000.
The note was satisfied on these terms during the first quarter of fiscal 1997
and the Company retired the Common Stock.

Rust Management Services, Inc., a Texas corporation ("RMSI") of which Jack
R. Crosby, Chairman and Chief Executive Officer of the Company, is the sole
shareholder, has provided the part-time services of several of its employees to
the Company. Pursuant to this arrangement, the Company's pro rata share of the
expenses associated with RMSI's employment of these individuals is reimbursed by
the Company at RMSI's cost. During the fiscal year ended March 31, 1997,
payments to RMSI pursuant to this arrangement were approximately $174,000.

The Company leases its executive offices in Austin, Texas in a six-story
office building from a limited partnership that includes as a minority interest
limited partner a trust for which Jack S. Gray, Jr., President and Chief
Operating Officer of the Company, is the trustee. Mr. Gray is not a beneficiary
of the trust and serves without compensation. The limited partnership purchased
the building in June 1996.

In February 1997 the Company entered into a Note Purchase and Warrant
Agreement pursuant to which accredited investors obtained 13% Senior Notes in
the aggregate amount of $6.0 million (the "Senior Notes"), and detachable
warrants to purchase an aggregate of 210,000 shares of Common Stock for $4.00
per Share, to a group of investors that included a director and other beneficial
holders of over 5% of the Company's capital stock. As a result of the placement:
(i) Winston J. Churchill, a director of the Company and the beneficial owner of
over 5% of the outstanding Common Stock, and his wife purchased $200,000 in
principal amount of the Senior Notes and warrants to purchase 7,000 shares of
Common Stock; (ii) The South America Fund N.V., the beneficial owner of over 5%
of a class of the Company's voting securities, purchased $1,000,000 in principal
amount of the Senior Notes and warrants to purchase 35,000 shares of Common
Stock; (iii) Clarex Limited, the beneficial owner of over 5% of a class of the
Company's voting securities, purchased $500,000 in principal amount of the
Senior Notes and warrants to purchase 17,500 shares of Common Stock; and (iv)
Banque Nationale de Paris (Paris), the beneficial owner of over 5% of a class of
the Company's voting securities, purchased $500,000 in principal amount of the
Senior Notes and warrants to purchase 17,500 Shares of Common Stock. The Senior
Notes and warrants received by The South America Fund N.V. may be deemed to be
owned by BEA Associates, the beneficial owner of over 5% of the outstanding
Common Stock.

In addition, in connection with the placement of the Senior Notes and
warrants, Bleichroeder, which may be deemed to be the beneficial owner of over
5% of the outstanding Common Stock, received 22,500 Shares of Common Stock and
warrants to purchase an additional 90,000 Shares of Common Stock for $4.00 per
Share as a placement fee and for other professional services provided in
connection with the placement.

COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

The company believes that during its fiscal year ended March 31, 1997 its
executive officers and directors have complied with all Section 16 filing
requirements.

<PAGE>
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
AND SERIES 1995 8% CONVERTIBLE PREFERRED STOCK
of
TESCORP, INC.
by
TESCORP ACQUISITION CORPORATION
A WHOLLY OWNED SUBSIDIARY
of
SUPERCANAL HOLDING S.A.
for
$4.50 PER SHARE OF COMMON STOCK
and
$144 PLUS ACCRUED DIVIDENDS FOR EACH SHARE
OF SERIES 1995 8% CONVERTIBLE PREFERRED STOCK
NET IN CASH

THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON FRIDAY, JANUARY 9, 1998, UNLESS THE OFFER IS EXTENDED.

THE OFFER IS CONDITIONED UPON (1) THERE BEING VALIDLY TENDERED AND NOT
WITHDRAWN PRIOR TO THE EXPIRATION TIME A NUMBER OF SHARES OF COMMON STOCK
("COMMON SHARES") OF TESCORP, INC. (THE "COMPANY"), WHICH, WHEN ADDED TO THE
COMMON SHARES ALREADY OWNED BY TESCORP ACQUISITION CORPORATION (THE
"PURCHASER"), CONSTITUTES MORE THAN TWO-THIRDS OF THE TOTAL NUMBER OF
OUTSTANDING COMMON SHARES, (2) THERE BEING VALIDLY TENDERED AND NOT WITHDRAWN
PRIOR TO THE EXPIRATION TIME A NUMBER OF SHARES OF SERIES 1995 8% CONVERTIBLE
PREFERRED STOCK ("8% PREFERRED SHARES") WHICH, WHEN ADDED TO THE 8% PREFERRED
SHARES ALREADY OWNED BY THE PURCHASER, CONSTITUTES MORE THAN TWO-THIRDS OF THE
TOTAL NUMBER OF OUTSTANDING 8% PREFERRED SHARES ON A FULLY DILUTED BASIS, AND
(3) SATISFACTION OF CERTAIN OTHER CONDITIONS. SEE SECTION 15.

THIS OFFER IS BEING MADE IN ACCORDANCE WITH AN AMENDED STOCK PURCHASE AND
MERGER AGREEMENT (THE "MERGER AGREEMENT"), DATED AS OF NOVEMBER 26, 1997,
BETWEEN THE COMPANY AND THE PURCHASER. THE BOARD OF DIRECTORS OF THE COMPANY (1)
HAS APPROVED THE MERGER AGREEMENT, THE OFFER AND A MERGER OF THE COMPANY AND THE
PURCHASER (THE "MERGER"), IN WHICH SUPERCANAL HOLDING S.A., THE PARENT OF THE
PURCHASER, WILL BECOME THE SOLE STOCKHOLDER OF THE MERGED COMPANY AND THE
STOCKHOLDERS OF THE COMPANY WILL RECEIVE THE SAME AMOUNT OF CASH PER COMMON
SHARE AND PER 8% PREFERRED SHARE AS IS PAID FOR SHARES PURCHASED THROUGH THE
OFFER, (2) HAS DETERMINED THAT THE TERMS OF THE OFFER AND THE MERGER ARE FAIR TO
AND IN THE BEST INTERESTS OF THE COMPANY'S STOCKHOLDERS AND (3) RECOMMENDS THAT
HOLDERS OF THE COMMON SHARES AND 8% PREFERRED SHARES (COLLECTIVELY, "SHARES")
TENDER THEIR SHARES IN RESPONSE TO THE OFFER.
------------------------

IMPORTANT

Any stockholder who wishes to tender Shares should complete and sign a
Letter of Transmittal (or a facsimile of one) in accordance with the
instructions set forth in the Letter of Transmittal and (A) mail or deliver it,
together with the certificate(s) representing the tendered Shares (the "Share
Certificates") and any other required documents, to the Depositary named on the
back cover of this Offer to Purchase or (B) tender the Shares using the
procedures for book-entry transfer described in Section 3. A stockholder whose
Shares are registered in the name of a broker, dealer, commercial bank, trust
company or other nominee must contact the broker, dealer, commercial bank, trust
company or other nominee if the stockholder wishes to tender Shares.

A stockholder who wishes to tender Shares but whose certificates are not
immediately available, or who cannot comply with the procedures for book-entry
transfer described in this Offer to Purchase on a timely basis, may tender the
Shares by following the procedures for guaranteed delivery described in Section
3.

Questions and requests for assistance, or for additional copies of this
Offer to Purchase, the Letter of Transmittal or other tender offer materials,
may be directed to the Information Agent or the Dealer Managers (named on the
back cover of this Offer to Purchase) at their respective addresses and
telephone numbers set forth on the back cover. Holders of Shares may also
contact brokers, dealers or banks for additional copies of this Offer to
Purchase, the Letter of Transmittal or other tender offer materials.
--------------------------

THE DEALER MANAGERS FOR THE OFFER ARE:

ING BARINGS FURMAN SELZ

December 8, 1997
<PAGE>
TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
-----
<C> <S> <C>
INTRODUCTION............................................................................................... 1

THE TENDER OFFER........................................................................................... 3

1. Terms of the Offer............................................................................ 3

2. Acceptance for Payment and Payment for Shares................................................. 4

3. Procedures for Tendering Shares............................................................... 5

4. Withdrawal Rights............................................................................. 8

5. Conditions of the Offer....................................................................... 8

6. Certain Federal Income Tax Consequences....................................................... 10

7. Price Range of Shares......................................................................... 11

8. Certain Information Concerning the Company.................................................... 11

9. Certain Information Concerning The Purchaser and Parent....................................... 13

10. Source and Amount of Funds.................................................................... 14

11. Background of the Offer; Contacts with the Company............................................ 14

12. Purpose of the Offer and the Proposed Merger; Plans for the Company........................... 16

13. The Merger.................................................................................... 18

14. Certain Effects of the Transaction............................................................ 21

15. Dividends and Distributions................................................................... 21

16. Certain Legal Matters; Regulatory Approvals................................................... 22

17. Fees and Expenses............................................................................. 23

18. Miscellaneous................................................................................. 23

SCHEDULE I................................................................................................. I-1
</TABLE>

i
<PAGE>
TO THE HOLDERS OF SHARES OF COMMON STOCK, PAR VALUE $.02 PER SHARE, AND THE
HOLDERS OF SERIES 1995 8% CONVERTIBLE PREFERRED STOCK, OF TESCORP, INC.:

INTRODUCTION

Tescorp Acquisition Corporation (the "Purchaser"), a Delaware corporation
and a wholly owned subsidiary of Supercanal Holding S.A. ("Parent"), an
Argentine corporation, hereby offers to purchase (i) all the outstanding shares
of common stock, par value $0.02 per share ("Common Shares"), of Tescorp, Inc.
(the "Company"), a Texas corporation, for $4.50 per Common Share, net to the
seller in cash, and (ii) all the outstanding shares of Series 1995 8%
Convertible Preferred Stock ("8% Preferred Shares") of the Company for $144 per
share plus accrued dividends from the last date on which dividends were paid to
the Expiration Time (as defined below) (collectively the Common Shares and the
8% Preferred Shares are referred to as the "Shares" and the $4.50 per share
price and the $144 per share price plus accrued dividends which the Purchaser is
offering to pay are referred to as the "purchase prices"), upon the terms and
subject to the conditions set forth in this Offer to Purchase and in the related
Letters of Transmittal (which together, as amended from time to time, constitute
the "Offer").

The Offer is being made in accordance with an Amended Stock Purchase and
Merger Agreement (the "Merger Agreement") dated as of November 26, 1997 between
the Purchaser and the Company. The Merger Agreement contemplates that (i) the
Purchaser would purchase from the Company 6,006,006 Common Shares for $3.33 per
share (the "Stock Purchase"), (ii) not later than December 5, 1997, the Company
would announce the Offer and (iii) if the Purchaser purchases at least a number
of Common Shares and 8% Preferred Shares which, together with the shares already
owned by the Purchaser (which will include the 6,006,006 Common Shares purchased
by the Purchaser in the Stock Purchase), constitutes at least two thirds of the
outstanding Common Shares and two-thirds of the outstanding 8% Preferred Shares,
and the other conditions set forth in the Merger Agreement are satisfied or
waived, the Purchaser will take all steps in its power to cause the Purchaser to
be merged into the Company in a transaction in which Supercanal Holding S.A.,
the sole stockholder of the Purchaser, will become the sole stockholder of the
corporation which survives the Merger and all the stockholders of the Company
other than the Purchaser will receive cash in the same amount per Common Share
and per 8% Preferred Share as is paid for Shares purchased through the Offer.
Under the Merger Agreement, if a tender offer is commenced by someone other than
the Purchaser for all the outstanding Common Shares and 8% Preferred Shares
which the Company's Board of Directors determines to be superior to the Offer
and which the Board of Directors resolves to accept or to recommend to the
Company's stockholders, the Company may terminate the Merger Agreement by paying
the Purchaser $5 million.

Tendering stockholders will not be obligated to pay brokerage fees or
commissions or, except as set forth in Instruction 6 of the Letter of
Transmittal, stock transfer taxes as a result of the sale of shares to the
Purchaser in response to the Offer.

Any tendering stockholder who fails to complete and sign the Substitute Form
W-9 included in the Letter of Transmittal may be subject to a required backup
Federal income tax withholding of 31% of the gross proceeds payable to the
stockholder or other payee pursuant to the Offer. See Section 3. The Purchaser
will pay all charges and expenses of Furman Selz LLC and ING Baring (U.S.)
Securities, Inc. as Dealer Managers (the "Dealer Managers"), The Bank of New
York, as Depositary (the "Depositary"), and Morrow & Co., Inc., as Information
Agent (the "Information Agent"), incurred in connection with the Offer. See
Section 17.

THE BOARD OF DIRECTORS OF THE COMPANY (1) HAS APPROVED THE OFFER AND THE
MERGER WHICH WILL FOLLOW THE OFFER IF THE OFFER IS SUCCESSFULLY COMPLETED AND
THE SHAREHOLDERS OF THE COMPANY APPROVE THE MERGER, (2) HAS DETERMINED THAT THE
TERMS OF THE OFFER AND THE MERGER EACH IS FAIR TO AND IN THE BEST INTERESTS OF
THE COMPANY'S STOCKHOLDERS, AND (3) RECOMMENDS THAT THE COMPANY'S STOCKHOLDERS
ACCEPT THE OFFER AND TENDER THEIR SHARES IN RESPONSE TO THE OFFER.
<PAGE>
THE MINIMUM CONDITION. The Offer is subject to a number of conditions,
including the Minimum Condition. See Section 15. The Minimum Condition requires
that (i) the number of Common Shares tendered and not withdrawn before the
Expiration Time, when added to the number of Common Shares already owned by the
Purchaser, constitute more than two-thirds of the total number of outstanding
Common Shares and (ii) the number of 8% Preferred Shares validly tendered and
not withdrawn before the Expiration Time, when added to the number of 8%
Preferred Shares already owned by the Purchaser, constitute more than two-thirds
of the total number of outstanding 8% Preferred Shares. The Company has informed
the Purchaser that as of December 5, 1997, there were 19,223,456 outstanding
Common Shares and 139,250 outstanding 8% Preferred Shares. The Purchaser owned
6,006,006 (approximately 31%) of those Common Shares. On that date, there also
were 3,060,470 Common Shares reserved for issuance on exercise of outstanding
options and warrants. The Shares owned by the Purchaser were acquired from the
Company in the Stock Purchase, which took place under the Merger Agreement on
December 5, 1997.

Assuming no additional Shares are issued before the Expiration Time, the
Minimum Condition will be satisfied if at least 6,809,632 Common Shares and
92,834 8% Preferred Shares are properly tendered and not withdrawn before the
Expiration Time.

Other conditions to consummation of the Offer are described in Section 5.
The Purchaser expressly reserves the right, in its sole discretion, to waive any
of the conditions to the Offer. See Section 5.

THIS OFFER TO PURCHASE AND THE LETTER OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE WITH
RESPECT TO THE OFFER.

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THE TENDER OFFER

1. TERMS OF THE OFFER. On the terms and subject to the conditions of the
Offer (including, if the Offer is extended or amended, the terms and conditions
of the extension or amendment), the Purchaser will accept for payment and pay
for all Shares validly tendered prior to the Expiration Time and not withdrawn
in accordance with Section 4. The term "Expiration Time" means 12:00 midnight,
New York City time, on Friday, January 9, 1998, unless the Purchaser extends the
period during which the Offer is open, in which event the term "Expiration Time"
will mean the time and date at which the Offer, as extended, will expire.

In the Merger Agreement, the Purchaser has agreed that it will not extend
the Offer to a date which is more than 60 days after the Offer is commenced,
except that (a) if the Offer is modified during the period it is open to
increase the price per share payable in the Offer or in any other manner
permitted by the Merger Agreement, the Offer many be extended until not more
than 10 business days after the day on which the modification is communicated to
the Company's stockholders, (b) if anyone makes a tender offer for either the
Common Shares or the 8% Preferred Shares before the Offer expires, the Offer may
be extended until not more than 10 business days after the other tender offer
expires, (c) if the Purchaser is prevented by an order of a court or other
governmental agency from accepting Shares which are tendered, the Offer may be
extended until 10 business days after the Purchaser is able to accept Shares
without violating any order of any court or other governmental agency and (d) if
the Minimum Condition is not satisfied by the scheduled Expiration Time, the
Offer may be extended for up to an additional 60 days to enable the Minimum
Condition to be satisfied (and if, although the Minimum Condition is not
satisfied, at least 2,500,000 Common Shares and at least 35,000 8% Preferred
Shares are properly tendered and not withdrawn, the Purchaser will extend the
Offer for at least an additional 30 days to enable the Minimum Condition to be
satisfied).

The Purchaser also has agreed in the Merger Agreement that it will not (a)
decrease the number of Shares being tendered for in the Offer, (b) reduce the
Purchase Price either for the Common Shares or for the 8% Preferred Shares, (c)
modify or add to the conditions described in Section 5, (d) change the form of
consideration payable in the Offer, or (e) extend the Offer, except as required
or permitted by the Merger Agreement (which is described above).

The Purchaser reserves the right, at any time and from time to time, to
extend the period during which the Offer is open, by giving oral or written
notice of the extension to the Depositary and by making a public announcement of
it as described below. During any extension, all Shares previously tendered and
not withdrawn will remain tendered in response to the Offer, subject to the
rights of a tendering stockholder to withdraw tendered Shares. See Section 4.

Subject to the Merger Agreement and the applicable regulations of the
Securities and Exchange Commission (the "Commission"), the Purchaser reserves
the right, at any time and from time to time, to (i) delay acceptance for
payment of, or, regardless of whether Shares were already accepted for payment,
payment for, Shares pending receipt of any regulatory or third-party approval
described in Section 16 or in order to comply in whole or in part with any other
applicable law, (ii) terminate the Offer and not accept for payment any Shares
if any of the conditions described in Section 5 have not been satisfied or upon
the occurrence of any of the events described in Section 5 or (iii) waive any
condition or otherwise amend the Offer in any respect, in each case, by giving
oral or written notice of the delay, termination, waiver or amendment to the
Depositary and by making a public announcement of it, as described below.

The Purchaser acknowledges that (i) Rule 14e-1(c) under the Securities
Exchange Act of 1934, as amended (the "Exchange Act") requires the Purchaser to
pay the consideration offered or return the tendered Shares promptly after the
termination or withdrawal of the Offer and (ii) the Purchaser may not delay
acceptance for payment of, or payment for (except as provided in clause (i) of
the first sentence of the preceding paragraph), any Shares upon the occurrence
of any of the events described in Section 5 without extending the period of time
during which the Offer is open.

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<PAGE>
The Purchaser will make a public announcement of any extension, delay,
termination, waiver or amendment as promptly as practicable after it takes
place. In the case of an extension, a public announcement will be made no later
than 9:00 a.m., New York City time, on the business day after the day of the
previously scheduled Expiration Time. Subject to applicable law (including Rules
14d-4(c), 14d-6(d) and 14e-1 under the Exchange Act, which require that material
changes be promptly disseminated to stockholders in a manner reasonably designed
to inform them of the changes), the Purchaser will have no obligation to
publish, advertise or otherwise communicate any public announcement other than
by issuing a press release.

If the Purchaser makes a material change in the terms of the Offer or the
information concerning the Offer or if it waives a material condition to the
Offer, the Purchaser will extend the Offer to the extent required by Rules
14d-4(c), 14d-6(d) and 14e-1 under the Exchange Act. Consummation of the Offer
is conditioned upon satisfaction of the Minimum Condition, and the other
conditions set forth in Section 5. The Purchaser reserves the right (but will
not be obligated) to waive any or all of those conditions.

If, prior to the Expiration Time, the Purchaser should decide to increase
the consideration being offered in the Offer, that increase will be applicable
to all stockholders whose Shares are accepted for payment, including
stockholders who tender their shares before the Purchaser increases the
consideration. If, at the time notice of an increase in the consideration being
offered is first published or otherwise given to holders of Shares, the Offer is
scheduled to expire earlier than the tenth business day after (but including)
the day the notice is first published or otherwise given, the Offer will be
extended at least until the expiration of that ten-business-day period. The
Purchaser does not expect to increase the consideration being offered.

The Company has given the Purchaser a stockholder list and security position
listings for the purpose of enabling the Purchaser to disseminate the Offer to
holders of Shares. This Offer to Purchase and the related Letter of Transmittal
and other relevant materials will be mailed to record holders of Shares and to
brokers, dealers, commercial banks, trust companies and similar persons whose
names, or the names of whose nominees, appear on the Company's stockholder list,
or who are listed as participants in a clearing agency's security position
listing for subsequent transmittal to beneficial owners of Shares.

2. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES. On the terms and subject
to the conditions of the Offer (including, if the Offer is extended or amended,
the terms and conditions of the extension or amendment), the Purchaser will
purchase, by accepting for payment, and will pay for, all Shares which are
validly tendered (and not properly withdrawn in accordance with Section 4) prior
to the Expiration Time. Shares will be accepted as soon as practicable after the
later to occur of (i) the Expiration Time and (ii) the satisfaction or waiver of
the conditions set forth in Section 5. Any determination concerning the
satisfaction of the terms and conditions of the Offer will be in the sole
discretion of the Purchaser. See Section 5. The Purchaser expressly reserves the
right, in its sole discretion, to delay acceptance for payment of, or, subject
to the applicable rules of the Commission, payment for, Shares in order to
comply in whole or in part with any applicable law. See Section 16.

In all cases, payment for Shares which are tendered in response to the Offer
and accepted for payment will be made only after timely receipt by the
Depositary of (a) the certificate(s) representing the tendered Shares (the
"Share Certificates"), or timely confirmation of a book-entry transfer (a
"Book-Entry Confirmation") of the Shares (if that procedure is available) into
the Depositary's account at The Depository Trust Company (the "Book-Entry
Transfer Facility"), as described in Section 3, (b) a properly completed and
duly executed Letter of Transmittal (or facsimile of one), or an Agent's Message
in connection with a book-entry transfer, and (c) any other documents required
by the Letter of Transmittal.

An "Agent's Message" is a message, transmitted by the Book-Entry Transfer
Facility to, and received by, the Depositary and forming a part of the
Book-Entry Confirmation, which states that the Book-Entry Transfer Facility has
received an express acknowledgment from a participant in the Book-Entry Transfer

4
<PAGE>
Facility which tenders Shares that the participant has received, and agrees to
be bound by the terms of, the Letter of Transmittal and that the Purchaser may
enforce that agreement against the participant.

For purposes of the Offer, the Purchaser will be deemed to have accepted for
payment, and thereby purchased, tendered Shares when the Purchaser gives oral or
written notice to the Depositary of the Purchaser's acceptance of the Shares for
payment. Payment for Shares which are accepted will be made by deposit of the
aggregate purchase price for all the Shares which are accepted for payment with
the Depositary, which will act as agent for tendering stockholders for the
purpose of receiving payment from the Purchaser and transmitting payment to the
tendering stockholders. UNDER NO CIRCUMSTANCES WILL INTEREST ON THE OFFER PRICE
BE PAID BY THE PURCHASER BY REASON OF ANY DELAY IN PAYING FOR SHARES. Upon the
deposit of funds with the Depositary for the purpose of making payments to
tendering stockholders, the Purchaser's obligation to pay for Shares will be
satisfied and tendering stockholders must look solely to the Depositary for
payment of amounts owed to them by reason of the acceptance of their Shares
pursuant to the Offer. If, for any reason, acceptance for payment of or payment
for any Shares tendered in response to the Offer is delayed, or the Purchaser is
prevented from accepting for payment or paying for Shares which are tendered in
response to the Offer, the Depositary may, nevertheless, retain tendered Shares
on behalf of the Purchaser and those Shares may not be withdrawn, except to the
extent the tendering stockholder exercises withdrawal rights as described in
Section 4. The Purchaser will pay any stock transfer taxes incident to the
transfer to it of validly tendered Shares, except as otherwise provided in
Instruction 6 of the Letter of Transmittal, as well as any charges and expenses
of the Depositary and the Information Agent.

If any tendered Shares are not accepted for payment for any reason, or if
certificates which are submitted evidence more Shares than are tendered,
certificates representing unpurchased or untendered Shares will be returned or
sent, without expense to the tendering stockholder (or, in the case of Shares
tendered by book-entry transfer into the Depositary's account at the Book-Entry
Transfer Facility, Shares which are not purchased will be credited to an account
at that Book-Entry Transfer Facility), as promptly as practicable following the
expiration or termination of the Offer.

IF, PRIOR TO THE EXPIRATION TIME, THE PURCHASER INCREASES THE CONSIDERATION
OFFERED TO HOLDERS OF SHARES TENDERED IN RESPONSE TO THE OFFER, THE INCREASED
CONSIDERATION WILL BE PAID TO ALL HOLDERS WHOSE SHARES ARE PURCHASED THROUGH THE
OFFER, INCLUDING HOLDERS WHOSE SHARES ARE TENDERED BEFORE THE CONSIDERATION IS
INCREASED.

The Purchaser reserves the right to transfer or assign, in whole, or in part
from time to time, to one or more of its affiliates the right to purchase all or
any portion of the Shares which are tendered in response to the Offer, but such
a transfer or assignment will not relieve the Purchaser of its obligations under
the Offer and will in no way prejudice the rights of tendering stockholders to
receive payment for Shares which are validly tendered in response to the Offer
and accepted for payment.

3. PROCEDURES FOR TENDERING SHARES.

VALID TENDER OF SHARES. Except as set forth below, in order for Shares to be
validly tendered in response to the Offer, (a) a Letter of Transmittal or a
facsimile of one, properly completed and duly executed, with any required
signature guarantees, or an Agent's Message in connection with a book-entry
delivery of Shares, and any other required documents, must be received by the
Depositary at one of its addresses set forth on the back cover of this Offer to
Purchase prior to the Expiration Time and (b) either (i) the certificates
representing the tendered Shares must be received by the Depositary along with
the Letter of Transmittal, (ii) the Shares must be tendered using the procedure
for book-entry transfer described below, and the Book-Entry Confirmation must be
received by the Depositary prior to the Expiration Time, or (iii) the tendering
stockholder must comply with the guaranteed delivery procedures described below.

5
<PAGE>
THE METHOD OF DELIVERY OF SHARE CERTIFICATES, THE LETTER OF TRANSMITTAL AND
OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER
FACILITY, IS AT THE OPTION AND RISK OF THE TENDERING STOCKHOLDER. ITEMS WILL BE
DEEMED DELIVERED ONLY WHEN THEY ARE ACTUALLY RECEIVED BY THE DEPOSITARY. IF
DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY
INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO
ENSURE TIMELY DELIVERY.

BOOK-ENTRY TRANSFER. The Depositary will establish an account with respect
to the Shares at The Depository Trust Company (the "Book-Entry Transfer
Facility") for purposes of the Offer within two business days after the date of
this Offer to Purchase, and any financial institution that is a participant in
the Book-Entry Transfer Facility's system may make book-entry delivery of Shares
by causing the Book-Entry Transfer Facility to transfer the Shares into the
Depositary's account at the Book-Entry Transfer Facility. Although delivery of
Shares may be effected through book-entry transfer at the Book-Entry Transfer
Facility, a Letter of Transmittal or a facsimile of one, with any required
signature guarantees, or an Agent's Message in connection with a book-entry
delivery of Shares, and any other required documents, as well as the Book Entry
Confirmation relating to the Shares, must be transmitted to and received by the
Depositary at one of its addresses set forth on the back cover of this Offer to
Purchase prior to the Expiration Time or the guaranteed delivery procedures
described below must be followed.

REQUIRED DOCUMENTS MUST BE TRANSMITTED TO AND RECEIVED BY THE DEPOSITARY AT
ONE OF ITS ADDRESSES SET FORTH ON THE BACK COVER PAGE OF THIS OFFER TO PURCHASE.
DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE
DELIVERY TO THE DEPOSITARY.

SIGNATURE GUARANTEES. Signatures on Letters of Transmittal need not be
guaranteed, unless the Shares to which they relate are being tendered by a
registered holder of Shares who has completed either the box entitled "Special
Delivery Instructions" or the box entitled "Special Payment Instructions" on the
Letter of Transmittal. Signatures on Letters of Transmittal on which either of
those boxes has been completed must be guaranteed by a firm which is a bank,
broker, dealer, credit union, savings association or other entity that is a
member in good standing of the Securities Transfer Agents Medallion Program
(each an "Eligible Institution"). See Instruction 1 of the Letter of
Transmittal.

If a Share Certificate is registered in the name of a person other than the
signer of the Letter of Transmittal, or if payment is to be made, or
certificates representing shares which are not tendered or are not accepted for
payment are to be returned, to a person other than the registered holder(s),
then the Share Certificate must be endorsed or accompanied by appropriate stock
powers, in either case, signed exactly as the name(s) of the registered
holder(s) appear on the Share Certificate, with the signature(s) on the Share
Certificate or stock powers guaranteed. See Instructions 1 and 5 of the Letter
of Transmittal.

If Share certificates are delivered to the Depositary at different times, a
properly completed and duly executed Letter of Transmittal (or facsimile of one)
must accompany each delivery.

GUARANTEED DELIVERY. If a stockholder wishes to tender Shares in response
to the Offer but the Share Certificates are not immediately available or time
will not permit all required documents to reach the Depositary prior to the
Expiration Time, or the procedure for book-entry transfer cannot be completed on
a timely basis, the Shares may nevertheless be tendered as follows:

(i) the tender must be made by or through an Eligible Institution;

(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form provided with this Offer to Purchase,
must be received by the Depositary before the Expiration Time; and

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<PAGE>
(iii) the Share Certificates representing all tendered Shares, in proper
form for transfer, or the Book-Entry Confirmation, together with a properly
completed and duly executed Letter of Transmittal (or facsimile of one),
with any required signature guarantees (or, in the case of a book-entry
transfer, an Agent's Message) and any other documents required by the Letter
of Transmittal are received by the Depositary within three (3) New York
Stock Exchange trading days after the date of execution of the Notice of
Guaranteed Delivery.

A Notice of Guaranteed Delivery may be delivered by hand or transmitted by
telegram, facsimile transmission or mail to the Depositary, but must include a
guarantee by an Eligible Institution in the form set forth in the Notice of
Guaranteed Delivery distributed with this Offer to Purchase.

Payment for Shares which are accepted for payment will be made only after
timely (i) receipt by the Depositary of Share Certificates for, or of Book-Entry
Confirmation with respect to, the Shares, (ii) a properly completed and duly
executed Letter of Transmittal (or facsimile of one), together with any required
signature guarantees (or, in the case of a book-entry transfer, an Agent's
Message) and (iii) any other documents required by the Letter of Transmittal.
Accordingly, it is possible that payment will not be made to all tendering
stockholders at the same time.

BACKUP UNITED STATES FEDERAL WITHHOLDING TAX. Under the United States
Federal income tax laws, the Depositary may be required to withhold 31% of the
amount of any payments made to certain stockholders. To prevent backup Federal
income tax withholding, each tendering stockholder must provide the Depositary
with the stockholder's correct taxpayer identification number, or certify that
the stockholder is exempt from backup Federal income tax withholding, by
completing the Substitute Form W-9 included in the Letter of Transmittal. See
Instruction 10 of the Letter of Transmittal.

APPOINTMENT AS PROXY. By executing a Letter of Transmittal, a tendering
stockholder irrevocably appoints designees of the Purchaser as the tendering
stockholder's attorneys-in-fact and proxies, in the manner set forth in the
Letter of Transmittal, each with full power of substitution, to the full extent
of the stockholder's rights with respect to the Shares tendered by the
stockholder and accepted for payment by the Purchaser (and with respect to any
other securities issued in respect of those Shares on or after the date of this
Offer to Purchase). That proxy is considered coupled with an interest in the
tendered Shares. This appointment will be effective if, when and to the extent
that the Purchaser accepts the tendered Shares for payment pursuant to the
Offer. When tendered Shares are accepted for payment, all prior proxies given by
the stockholder with respect to the tendered Shares and any other securities
issued in respect of them will, without further action, be revoked, and no
subsequent proxies may be given. The designees of the Purchaser will, with
respect to the tendered Shares and any other securities for which the
appointment is effective, be empowered to exercise all voting and other rights
of the tendering stockholder as they, in their sole discretion, deem proper at
any annual, special, adjourned or postponed meeting of the Company's
stockholders, and the Purchaser reserves the right to require that in order for
Shares or other securities to be deemed validly tendered, immediately upon the
Purchaser's acceptance for payment of the Shares, the Purchaser will be able to
exercise full voting rights with respect to the Shares.

Proxies are effective only as to Shares accepted for payment pursuant to the
Offer. The Offer does not constitute a solicitation of proxies, absent a
purchase of Shares, for any meeting of the Company's stockholders. Any
solicitation of proxies will be made only pursuant to separate proxy
solicitation materials complying with the Exchange Act.

DETERMINATIONS REGARDING TENDERS. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance for payment of any Shares
using any of the procedures described above will be determined by the Purchaser,
in its sole discretion, and the Purchaser's determination will be final and
binding on all parties. The Purchaser reserves the absolute right to reject any
or all tenders of Shares determined by it not to be in proper form or if the
acceptance for payment of, or payment for, the Shares may, in the opinion of the
Purchaser's counsel, be unlawful. The Purchaser also reserves the absolute
right,

7
<PAGE>
in its sole discretion, to waive any of the conditions of the Offer or any
defect or irregularity in any tender with respect to Shares of any particular
stockholder, whether or not similar defects or irregularities are waived in the
case of other stockholders. No tender of Shares will be deemed to have been
validly made until all defects and irregularities have been cured or waived.

The Purchaser's interpretation of the terms and conditions of the Offer
(including the Letter of Transmittal and the instructions to it) will be final
and binding. None of Parent, the Purchaser, either Dealer Manager, the
Depositary, the Information Agent or any other person will be under any duty to
give notification of any defects or irregularities in tenders or will incur any
liability for failure to give any such notification.

BINDING AGREEMENT. The Purchaser's acceptance for payment of Shares
tendered in response to the Offer will constitute a binding agreement by the
tendering stockholder to sell, and by the Purchaser to purchase, the tendered
Shares on the terms and subject to the conditions of the Offer.

4. WITHDRAWAL RIGHTS. Except as otherwise provided in this Section 4,
tenders of Shares made in response to the Offer are irrevocable. Shares tendered
in response to the Offer may be withdrawn at any time prior to the Expiration
Time and, unless they have been accepted for payment by the Purchaser, may also
be withdrawn at any time after February 9, 1998.

If the Purchaser extends the Offer, is delayed in its acceptance of Shares
for payment or is unable to accept Shares for payment for any reason, then,
without prejudice to the Purchaser's rights under the Offer, the Depositary may,
nevertheless, retain tendered Shares on behalf of the Purchaser, and those
Shares may not be withdrawn except to the extent that tendering stockholders are
entitled to withdraw them as described in this Section 4. Any such delay will be
accompanied by an extension of the Offer to the extent required by law.

For a withdrawal to be effective, a written or facsimile transmission of a
notice of withdrawal must be timely received by the Depositary at one of its
addresses set forth on the back cover of this Offer to Purchase. A notice of
withdrawal must specify the name of the person who tendered the Shares to be
withdrawn, the number of Shares to be withdrawn and (if Share Certificates have
been tendered) the name of the registered holder, if different from that of the
person who tendered the Shares. If Share Certificates evidencing Shares to be
withdrawn have been delivered or otherwise identified to the Depositary, then
prior to the release of those Share Certificates, the serial numbers shown on
the particular Share Certificates to be withdrawn must be submitted to the
Depositary, and the signature(s) on the notice of withdrawal must be guaranteed
by an Eligible Institution, unless the Shares have been tendered for the account
of an Eligible Institution. If Shares have been tendered pursuant to the
procedure for book-entry transfer, any notice of withdrawal must also specify
the name and number of the account at the Book-Entry Transfer Facility to be
credited with the withdrawn Shares. Withdrawals of Shares may not be rescinded.

After Shares are properly withdrawn, they will be deemed not to have been
validly tendered for purposes of the Offer. However, withdrawn Shares may be
retendered at any time prior to the Expiration Time using one of the procedures
described in Section 3.

All questions as to the form and validity (including, without limitation,
time of receipt) of notices of withdrawal will be determined by the Purchaser,
in its sole discretion, and its determination will be final and binding. None of
Parent, the Purchaser, either Dealer Manager, the Depositary, the Information
Agent or any other person will be under any duty to give notification of any
defects or irregularities in any notice of withdrawal or will incur any
liability for failure to give any such notification.

5. CONDITIONS OF THE OFFER. The Purchaser will not be required to accept
for payment or, subject to any applicable rules and regulations of the
Commission, including Rule 14e-1(c) under the Exchange Act (relating to the
Purchaser's obligation to pay for or return tendered Shares promptly after
termination or withdrawal of the Offer), pay for, the Shares which are tendered
in response to the Offer if:

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<PAGE>
(a) The number of Shares properly tendered in response to the Offer and
not withdrawn, together with the Common Shares and any 8% Preferred Shares
already owned by the Purchaser does not total more than two-thirds of the
outstanding Common Shares and two-thirds of the outstanding 8% Preferred
Shares;

(b) There are any 10% Preferred Shares outstanding after the day which
is 65 days after the Stock Purchase (if that day is before the Expiration
Date);

(c) Any statute, rule, regulation, order or injunction has been enacted,
promulgated, entered or enforced by any national or state government or
governmental authority or by any United States or Argentine court of
competent jurisdiction, that would make the acquisition of the Shares by the
Purchaser illegal or otherwise prohibit consummation of the Offer or the
Merger; or

(d) There has been (i) a general suspension of trading in, or limitation
on prices for, securities on the New York Stock Exchange which continued for
at least three business days, (ii) the declaration of a banking moratorium
or any suspension of payments in respect of banks in the United States or
Argentina (whether or not mandatory) which continued for at least three
business days, (iii) the commencement of a war or armed hostilities or any
other international or national calamity directly or indirectly involving
the United States or Argentina, which has a significant adverse effect on
the functioning of financial markets in the United States or Argentina, (iv)
any limitation (whether or not mandatory) by any United States or Argentine
governmental authority or agency on the extension of credit by banks or
other financial institutions which would have a material adverse effect on
Parent's or the Purchaser's ability to borrow sufficient funds under its
bank facilities to purchase and pay for all the Shares which are tendered in
response to the Offer and to carry out the Merger on the terms contemplated
by the Merger Agreement or (v) there is a material acceleration or worsening
of any of the conditions described in clauses (i) through (iv) which exists
at the date of the commencement of the Offer.

(e) Any of the representations and warranties of the Company set forth
in the Merger Agreement is not true and correct as of the date of the Merger
Agreement except failures to be true and correct which would not, in the
aggregate, have a material adverse effect upon the Company;

(f) Since the date of the Merger Agreement, there has been an occurrence
or group of occurrences (whether or not related) which have had a material
adverse effect upon the Company (other than (i) occurrences which affected
generally the cable television industry worldwide or in Argentina, including
actual or proposed changes in laws or regulations, or (ii) the transactions
contemplated by the Merger Agreement, including the change in control
contemplated by it);

(g) the Company has not performed all the obligations it is required to
have performed under the Merger Agreement, except failures which (i) would,
in the aggregate, not materially impair or delay the ability of the
Purchaser to consummate the purchase of the Shares which are tendered in
response to the Offer or the ability of the Purchaser and the Company to
effect the Merger, (ii) have been caused by or result from a breach of the
Merger Agreement by the Purchaser; or (iii) do not, and are not reasonably
expected to, have a material adverse effect on the Company;

(h) The Merger Agreement has been terminated in accordance with its
terms; or

(i) The Board of Directors of the Company withdraws or modifies in a
manner adverse to the Purchaser the Board's approval or recommendation of
the Offer or the Merger.

The conditions set forth above are for the sole benefit of the Purchaser,
and may be waived by the Purchaser, in whole or in part. Any delay by the
Purchaser in exercising the right to terminate the Offer because any of the
conditions are not fulfilled will not be deemed a waiver of its right to do so.

9
<PAGE>
6. CERTAIN FEDERAL INCOME TAX CONSEQUENCES.

The following summary is a general discussion of certain of the expected
Federal income tax consequences of the Offer. The summary is based on the
Internal Revenue Code of 1986, as amended (the "Code"), and published
regulations, rulings and judicial decisions in effect at the date of this Offer
to Purchase, all of which are subject to change. The summary does not discuss
all aspects of Federal income taxation that may be relevant to a particular
holder in light of his or her personal circumstances or to certain types of
holders subject to special treatment under the Federal income tax laws, such as
life insurance companies, financial institutions, tax-exempt organizations and
non-U.S. persons. The following summary may not be applicable with respect to
Shares acquired through exercise of employee stock options or otherwise as
compensation. It also does not discuss any aspects of state or local tax laws or
of tax laws of jurisdictions outside the United States of America.

THE DESCRIPTION OF FEDERAL INCOME TAX CONSEQUENCES SET FORTH BELOW IS FOR
GENERAL INFORMATION ONLY. HOLDERS ARE URGED TO CONSULT THEIR TAX ADVISORS AS TO
THE PARTICULAR TAX CONSEQUENCES TO THEM OF THE SALE OF THEIR SHARES, INCLUDING
THE APPLICATION OF FEDERAL, STATE, LOCAL AND FOREIGN TAX LAWS AND POSSIBLE
CHANGES IN TAX LAWS.

Sales of Shares in response to the Offer will be taxable transactions for
Federal income tax purposes, and may also be taxable transactions under
applicable state, local, foreign and other tax laws. For Federal income tax
purposes, a tendering stockholder will generally recognize gain or loss equal to
the difference between the amount of cash received by the stockholder upon sale
of the Shares and the aggregate tax basis in the Shares which are sold. Under
present law, gain or loss will be calculated separately for each block of Shares
tendered and purchased pursuant to the Offer.

If tendered Shares are held by a tendering stockholder as capital assets,
gain or loss recognized by the tendering stockholder will be capital gain or
loss, which will be long-term capital gain or loss if the tendering
stockholder's holding period for the Shares exceeds one year. Long-term capital
gains recognized by a tendering individual stockholder will generally be taxed
at a maximum Federal marginal tax rate of 28% as to Shares held between 12 and
18 months and 20% as to shares held more than 18 months. Long-term capital gains
recognized by a tendering corporate stockholder will be taxed at a maximum
Federal marginal tax rate of 35%.

A stockholder (other than certain exempt stockholders, including all
corporations and certain foreign individuals) who tenders Shares may be subject
to 31% backup withholding unless the stockholder provides its taxpayer
identification number ("TIN") and certifies that the TIN is correct or properly
certifies that it is awaiting a TIN. This should be done by completing and
signing the substitute Form W-9 included as part of the Letter of Transmittal. A
stockholder that does not furnish its TIN also may be subject to a penalty
imposed by the IRS.

If backup withholding applies to a stockholder, the Depositary is required
to withhold 31% from each payment to that stockholder. Backup withholding is not
an additional tax. Rather, the amount of the backup withholding can be credited
against the Federal income tax liability of the person subject to the backup
withholding, provided that the required information is given to the IRS. If
backup withholding results in an overpayment of tax, a refund can be obtained by
the stockholder upon filing an income tax return.

10
<PAGE>
7. PRICE RANGE OF SHARES. The Common Shares trade on the NASDAQ Small-Cap
Market under the symbol "TESC." The following table sets forth, for the periods
indicated, the high and low sales prices per Common Share on the NASDAQ
Small-Cap Market.

COMMON SHARES

<TABLE>
<CAPTION>
HIGH LOW
------- -------
<S> <C> <C>
Year Ended December 31,
1995:
First Quarter.......... $ 2.88 $ 1.88
Second Quarter......... 4.000 1.875
Third Quarter.......... 3.563 2.750
Fourth Quarter......... 3.875 2.750
Year Ended December 31,
1996
First Quarter.......... 4.375 2.500
Second Quarter......... 4.500 3.2500
Third Quarter.......... 4.1250 2.8750
Fourth Quarter......... 4.6250 2.8750
Year Ended December 31,
1997
First Quarter.......... 4.3125 3.2500
Second Quarter......... 4.000 3.0625
Third Quarter.......... 4.1875 3.0625
Fourth Quarter (through
December 4, 1997).... 4.1250 3.5000
</TABLE>

Insofar as the Purchaser is aware, there is no trading market for the 8%
Preferred Shares.

On September 15, 1997, the last full day of trading prior to the public
announcement of the execution of the Merger Agreement, the last sales price of
the Common Shares reported on NASDAQ was $3.375. On December 5, 1997, the last
full day of trading prior to the commencement of the Offer, the last sales price
reported on NASDAQ was $4 per Common Share. STOCKHOLDERS ARE URGED TO OBTAIN
CURRENT MARKET QUOTATIONS FOR THE SHARES.

8. CERTAIN INFORMATION CONCERNING THE COMPANY. The information concerning
the Company contained in this Offer to Purchase, including financial
information, has been taken from or is based upon publicly available documents
and records on file with the Commission and other public sources. None of
Parent, the Purchaser or either Dealer Manager assumes any responsibility for
the accuracy or completeness of the information concerning the Company contained
in those documents and records or for any failure by the Company to disclose
events which may have occurred or may affect the significance or accuracy of any
such information but which are not known to Parent, the Purchaser or either
Dealer Manager.

The Company is a Texas corporation and its principal executive offices are
located at 327 Congress Avenue, Suite 200, Austin, Texas 78701. The following
description of the Company's business has been taken from the Company's 1997
Form 10-KSB/A:

The Company acquires, develops and operates cable television and
communications systems in the Republic of Argentina, with concentrations in the
Patagonia and Tierra del Fuego regions. At March 31, 1997, the Company provided
cable television service to approximately 69,000 subscribers. In addition, the
Company holds a license to provide data services to its customers under the name
"Patagonia On-Line (TM)."

Set forth below is certain consolidated financial information with respect
to the Company, excerpted or derived from the summary financial information of
the Company contained in the Company's 1997 10-KSB/A and the Company's Form 10-Q
for the period ended September 30, 1997. More comprehensive

11
<PAGE>
financial information is included in those reports and other documents filed
with the Commission, and the following summary is qualified in its entirety by
reference to those reports and other documents, including the financial
information and related notes contained in them. The reports and other documents
may be inspected and copies of them may be obtained in the manner set forth
below.

TESCORP, INC. AND SUBSIDIARIES

SELECTED CONSOLIDATED FINANCIAL INFORMATION

<TABLE>
<CAPTION>
QUARTERS ENDED
SEPTEMBER 30, YEARS ENDED MARCH 31,
---------------------- ------------------------------------
1997 1996 1997 1996 1995
---------- ---------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA
Revenues.................... $7,208,487 $5,527,433 $22,580,466 $16,009,116 $ *
Operating income (loss)..... (1,142,651) (676,419) (2,391,448) (1,470,291) (1,480,039)
Net income (loss)........... (1,754,501) (779,974) (3,382,059) (1,495,297) 229,046
Net Earnings (loss) per
share applicable to Common
Shares.................... (0.16) (0.9) (0.38) (0.19) (0.2)
</TABLE>

- ------------------------

* The Company had disposed of its oil and gas field service company operating
units in fiscal 1994, and accordingly, for the fiscal years ended March 31,
1995, the Company recorded no net sales. The Company began consolidating the
earnings from its Latin America operations beginning with the first quarter
of fiscal 1996.

<TABLE>
<CAPTION>
AS OF SEPTEMBER 30
----------------------
1997 1996
---------- ----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C>
BALANCE SHEET DATA:
Total assets..................................................... $50,831,707 $43,058,722
Debt............................................................. 7,193,613 1,059,287

Total liabilities................................................ 19,916,392 6,245,423
Total Stockholders' equity....................................... 30,102,837 35,818,068
</TABLE>

The Company is subject to the informational and reporting requirements of
the Exchange Act and is required to file reports and other information with the
Commission relating to its business, financial condition and other matters.
Information, as of particular dates, concerning the Company's directors and
officers, their remuneration, stock options granted to them, the principal
holders of the Company's securities, any material interests of those persons in
transactions with the Company and other matters is required to be disclosed in
proxy statements distributed to the Company's stockholders and filed with the
Commission. These reports, proxy statements and other information can be
inspected and copied at the public reference facilities of the Commission
located at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C.
20549, and at the following regional offices of the Commission: Seven World
Trade Center, New York, New York 10048; and Citicorp Center, 500 West Madison
Street, Chicago, Illinois 60661. Copies of this material may be obtained by
mail, upon payment of the Commission's customary fees, from the Commission's
principal office at 450 Fifth Street, N.W., Washington, D.C. 20549. The
Commission also maintains an Internet site on the world wide web at
http://www.sec.gov that contains reports, proxy statements and other
information. Reports, proxy statements and other information concerning the
Company should also be available for inspection at the offices of NASDAQ, 1735 K
Street, N.W., Washington, D.C. 20006. All of the information with respect to the
Company and its affiliates set forth in this Offer to Purchase has been derived
from publicly available information.

12
<PAGE>
9. CERTAIN INFORMATION CONCERNING THE PURCHASER AND PARENT.

THE PURCHASER. The Purchaser is a Delaware corporation organized in order
to enter into the transactions which are the subject of the Merger Agreement
(including the Offer). The principal executive offices of the Purchaser are
located at Godoy Cruz 316, Mendoza, Province of Mendoza, Argentina 5500. The
Purchaser is a wholly owned subsidiary of Parent. Until immediately prior to the
Stock Purchase, the Purchaser did not have any significant assets or liabilities
and had not engaged in activities other than those incidental to its formation
and capitalization and preparation for the Stock Purchase, the Offer and the
Merger. Due to the fact that the Purchaser is newly formed and, until the Stock
Purchase, had minimal assets and capitalization, no meaningful financial
information regarding the Purchaser is available.

In the Stock Purchase, the Purchaser purchased 6,006,006 Common Shares
Preferred Shares for $3.33 per Common Share (a total of $20,000,000). That price
is lower than the price to be paid in the Offer and the Merger. However, the
terms of the Stock Purchase were agreed upon (a) to provide funds to the Company
at prices Parent and the Purchaser were willing to pay even if they did not
acquire the remaining shares of the Company, and (b) with knowledge that if the
Offer and the Merger were completed, Parent would own all the stock of the
Company, and therefore Parent would, in effect, become the owner of the proceeds
of the Stock Purchase (or of the benefits of application of those proceeds). The
Agreement provides that unless the Purchaser purchases all the Shares tendered
in response to the Offer (even if the Minimum Condition or other conditions are
not fulfilled), the Company will have an option, which will expire one year
after the date of the Stock Purchase, to repurchase the shares it sold in the
Stock Purchase for the price the Purchaser paid for those shares. See
"Description of the Agreement."

PARENT. Parent, a corporation organized under the laws of Argentina, is the
third largest multi-channel television system operator in Argentina, providing
multi-channel television services via cable and wireless technology. The
principal executive offices of Parent are located at Godoy Cruz 316, Mendoza,
Province of Mendoza, Argentina 5500.

During the last 5 years none of Parent's or Purchaser's officers or
directors was (1) convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors) or (2) party to a civil proceeding of a
judicial or administrative body of competent jurisdiction and as a result of the
proceeding was or is subject to a judgment, decree or final order enjoining
future violations of or prohibiting activities subject to, Federal or state
securities laws or finding any violation of such laws.

Parent is not subject to the informational and reporting requirements of the
Exchange Act and Parent is not required to file reports and other information
with the Commission relating to its businesses, financial condition or other
matters.

The name, citizenship, business address, principal occupation or employment
and five-year employment history for each of the directors and executive
officers of the Purchaser and Parent are set forth in Schedule I.

Except for the 6,006,006 Common Shares acquired by the Purchaser on December
5, 1997 through the Stock Purchase described in this Offer to Purchase, none of
Parent, the Purchaser or, to the best knowledge of Parent or the Purchaser, any
of the persons listed on Schedule I or any associate or majority owned
subsidiary of any of those persons beneficially owns any equity security of the
Company, and none of Parent or the Purchaser or, to the best knowledge of Parent
or the Purchaser, any of the other persons referred to above, or any of their
respective directors, executive officers or subsidiaries, has effected any
transaction in any equity security of the Company during the past 60 days.

Except as described in this Offer to Purchase, none of Parent or the
Purchaser or, to the best knowledge of Parent or the Purchaser, any of the
persons listed on Schedule I has any contract, arrangement, understanding or
relationship with any other person with respect to any securities of the

13
<PAGE>
Company, including, without limitation, any contract, arrangement, understanding
or relationship concerning the transfer or the voting of any securities of the
Company, joint ventures, loan or option arrangements, puts or calls, guarantees
of loans, guarantees against loss or the giving or withholding of proxies.
Except as set forth in this Offer to Purchase, none of Parent or the Purchaser
or, to the best knowledge of Parent or the Purchaser, any of the persons listed
on Schedule I has had any transactions with the Company or any of its executive
officers, directors or affiliates that would require reporting under the rules
of the Commission.

Except as described in this Offer to Purchase, since January 1, 1994, there
have been no contacts, negotiations or transactions between Parent or the
Purchaser, or their respective subsidiaries, or, to the best knowledge of Parent
or the Purchaser, any of the persons listed in Schedule I, on the one hand, and
the Company or its executive officers, directors or affiliates, on the other
hand, concerning a merger, consolidation or acquisition, tender offer or other
acquisition of securities, election of directors or a sale or other transfer of
a material amount of assets.

10. SOURCE AND AMOUNT OF FUNDS. If all the outstanding Shares not owned by
the Purchaser were tendered in response to the Offer, the Purchaser would be
required to pay a total of approximately $86 million to purchase the tendered
Shares and pay the fees and other expenses related to the Offer. See Section 17.
The Purchaser expects to obtain the funds required to consummate the Offer
through capital contributions or advances made by Parent. Parent has guaranteed
the Purchaser's obligations under the Merger Agreement, including obligations
with respect to the Offer.

On November 12, 1997, Parent entered into a $300,000,000 Note Purchase
Agreement (the "Loan Agreement") among Parent, and the other issuers named or
referred to therein, as issuers, the financial institutions party thereto, as
purchasers, ING Baring (U.S.) Securities, Inc. as Arranger, ING Baring (U.S.)
Capital Corporation, (the "Bank"), as Administrative Agent and Collateral Agent,
and The Bank of New York, as Registrar. One of the reasons Parent entered into
the Loan Agreement was to obtain the funds it would require for the transactions
which are the subject of the Merger Agreement. Parent expects to obtain
substantially all the funds which will be used to pay for tendered Shares and to
pay the fees and expenses related to the Offer through borrowings under the Loan
Agreement. It is permitted to use up to $135 million of borrowings (including
the $20 million paid in the Stock Purchase) for the transactions under the
Merger Agreement and to pay costs of those transactions. ING Baring (U.S.)
Securities, Inc., an affiliate of the Bank, acted as a financial advisor to
Parent in connection with the transactions which are the subject of the Merger
Agreement and is one of the Deal Managers with regard to the Offer.

Borrowings under the Loan Agreement bear interest at LIBOR plus 4.5% per
annum and must be repaid by November 12, 2002. Parent anticipates that the
indebtedness under the Loan Agreement, including indebtedness incurred by Parent
in connection with the Stock Purchase, the Offer and the Merger, will be repaid
from funds generated internally by Parent and its subsidiaries (including, after
the Merger, if consummated, dividends paid by the surviving corporation and its
subsidiaries), through additional borrowings, through application of proceeds of
dispositions of assets or through a combination of two or more of those sources.
No final decisions have been made, however, concerning the method Parent will
employ to repay that indebtedness. Those decisions, when made, will be based on
Parent'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.

11. BACKGROUND OF THE OFFER; CONTACTS WITH THE COMPANY.

The initial discussions of a possible transaction between Parent and the
Company took place at a meeting in October 1996 between senior officers of the
Company and representatives of Integra Financial Services L.L.C ("Integra"), an
advisor to Parent. These initial discussions, and additional discussions through
March 1997, focused on the high degree of consolidation in the Argentine CATV
industry which

14
<PAGE>
was taking place, and the advisability of combining the operations of Parent and
the Company in view of that consolidation.

In April 1997, there were discussions about a merger of the Company and
Parent, in which shareholders of the Company would receive shares of Parent.
Extensive discussions were held, and draft agreements were prepared. However,
the merger would have required approval of the shareholders of both companies. A
shareholder of Parent, which had the ability to preclude Parent from carrying
out the merger, stated it would not approve a merger. Because of that,
discussions of a merger were dropped.

Early in August 1997, discussions of a transaction between Parent and the
Company were revived. Parent was represented in these discussions by Integra,
ING Baring (U.S.) Securities, Inc. ("ING Baring Securities") and Smith Barney &
Co., Inc. ("Smith Barney"). The Company was represented in these discussions by
its senior officers and by Arnhold and S. Bleicholder & Co. ("Bleicholder"). By
mid-August, Parent and the Company each brought attorneys into the discussions,
and agreements began to be drafted.

From mid-August to mid-September, there were nearly daily discussions of a
transaction between Parent and the Company. Initially, the discussions related
to a purchase by Parent from the Company of what would have been approximately
45% of the outstanding Common Shares and 30% of the outstanding 8% Preferred
Shares for approximately $39 million, followed by a merger of the Company into a
subsidiary of Parent in which the stockholders of the Company would have
received $4.53 per Common Share and $144.96 per 8% Preferred Share. However, at
Parent's suggestion, it was decided that the transaction would take place in
three steps, with a tender offer for the Common Shares and 8% Preferred Shares
between the initial stock purchase and the merger.

A principal issue during the discussions was a desire of the Company to be
sure Parent would not become unable to complete a transaction either (i) because
it did not have adequate funds or (ii) because its shareholders would not permit
the transaction to proceed. With regard to the first concern, ING Baring (US)
Capital Corporation ("ING Baring Capital") delivered a letter to the Company
stating that ING Baring Capital had obtained internal credit approval for a
senior secured credit facility in an aggregate principal amount sufficient to
conclude the transactions being discussed, but the disbursement of that facility
was subject to the negotiation, execution and delivery of definitive
documentation satisfactory to ING Baring Capital and its counsel, which would
contain, among other things, customary covenants, conditions precedent and
security arrangements (including financial covenants on a pro forma basis
concerning the combined operations of Parent and the Company). With regard to
the second concern, the stockholders of Parent all stated they approved of the
transaction.

On September 16, 1997, the Purchaser (a wholly-owned subsidiary of Parent)
and the Company signed a Stock Purchase and Merger Agreement (the "Original
Merger Agreement") in which they agreed that (i) the Purchaser would purchase
10,790,000 Common Shares (which would be approximately 45% of the outstanding
Common Shares) for $35,930,700 ($3.33 per share) and would purchase 60,750 8%
Preferred Shares (which would be 30% of the outstanding 8% Preferred Shares) for
$6,075,000 ($100 per share), (ii) shortly after completion of that stock
purchase, the Purchaser would make a tender offer for all the outstanding Common
Shares and 8% Preferred Shares for $4.50 per Common Share and $144 per 8%
Preferred Share (plus an amount equal to accrued dividends on the 8% Preferred
Shares), and (iii) if the tender offer resulted in the Purchaser's owning at
least two-thirds of the outstanding Common Shares and two-thirds of the
outstanding 8% Preferred Shares (which would enable the Purchaser to approve a
merger between the Company and itself even if no other Tescorp shareholders
voted in favor of the merger), the Company and the Purchaser would be merged in
a transaction in which Parent would become the sole shareholder of the merged
company and the former Tescorp shareholders who had not tendered their shares
would receive $4.50 per Common Share and $144 per 8% Preferred Share plus
accrued dividends, unless they sought to obtain appraisal of their shares in
accordance with Articles 5.11 through 5.13 of the Texas Business Corporation
Act. The Original Merger Agreement required that before the Purchaser purchased
the 10,790,000 Common Shares and the 60,750 8% Preferred Shares, three designees
of the

15
<PAGE>
Purchaser would be elected to the Company's Board of Directors. When the
Original Merger Agreement was signed, the Purchaser gave the Company a
$5,000,000 deposit, to be applied against the purchase price of the 10,790,000
Common Shares and the 60,750 8% Preferred Shares.

After the Original Merger Agreement was signed, required filings were made
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and
the waiting periods required by that Act were terminated. Also, agreements
between Parent and various financial institutions, including ING Bank N.V.,
which included the financing required for the transaction contemplated by the
Original Merger Agreement were drafted. However, before those financing
agreements were signed, it was realized that the purchase by the Purchaser of
45% of the Common Shares and 30% of the 8% Preferred Shares would not result in
the Company's financial statements being included in Parent's consolidated
financial statements, and therefore, that step of the transaction would cause
Parent to be in violation of financial ratio covenants which would be in the
financing agreements.

On November 5, 1997, representatives of Parent informed the principal
executive officers of the Company that, because of requirements of Parent's
expected lending agreements, Parent and the Purchaser would not be able to carry
out the transaction as contemplated by the Original Merger Agreement.
Discussions ensued, and on December 5, 1997 the Purchaser and the Company
entered into an Amended Stock Purchase and Merger Agreement (the "Merger
Agreement"). The principal difference between the Merger Agreement and the
Original Merger Agreement is that under the Merger Agreement, the initial step
was the purchase by the Purchaser of 6,006,006 Common Shares for $20,000,000
(including $5,000,000 paid through application of the deposit given when the
Original Merger Agreement was signed), rather than the purchase of 10,790,000
Common Shares and 60,750 8% Preferred Shares for $42,005,700 which had been
contemplated by the Original Merger Agreement. Because this initial transaction
would be smaller than had been contemplated in the Original Merger Agreement,
provisions were added to the Merger Agreement which were intended to insure that
the proceeds of the initial transaction would give the Company the cash it
needed for specified transactions (including a debt repayment due in February
1998) and the number of directors of the Company the Purchaser could designate
was reduced from three to one.

In accordance with the Merger Agreement, on December 5, 1997, (i) the
Purchaser purchased a total of 6,006,006 Common Shares for $20,000,000 ($3.33
per share), of which $15 million was paid in cash and the balance was paid by
permitting the Company to keep the $5 million deposit which the Purchaser had
given to the Company when the Original Merger Agreement was signed, and (ii) the
Offer was announced. The Merger Agreement required that materials relating to
the Offer be sent to the Company's stockholders, and requires that if the
Purchaser increases its ownership to at least two-thirds of the outstanding
Common Shares and obtains at least two-thirds of the outstanding 8% Preferred
Shares through the Offer (i.e., the Minimum Condition is satisfied), the merger
contemplated by the Merger Agreement will take place. The Merger Agreement is
described under the caption "The Merger Agreement."

12. PURPOSE OF THE OFFER AND THE PROPOSED MERGER; PLANS FOR THE COMPANY.

PURPOSE. The purpose of the Stock Purchase, the Offer and the Merger is to
enable Parent to acquire all the outstanding stock of the Company. The Offer is
the second step in this effort. In the Stock Purchase, Parent, through the
Purchaser, acquired approximately 31% of the outstanding Common Shares. If the
Purchaser accepts Shares tendered in response to the Offer, the Purchaser's (and
indirectly Parent's) ownership of Common Shares and 8% Preferred Shares will
increase by the number of Shares purchased through the Offer. The purpose of the
Merger will be to enable Parent to become the owner of all the outstanding stock
of the Company.

If the Purchaser purchases through the offer at least the minimum number of
Common Shares and 8% Preferred Shares required to satisfy the Minimum Condition,
Parent will be required by the Merger Agreement to carry out the Merger. If
Purchaser purchases the shares which are properly tendered in response to the
Offer, but those shares do not increase the Purchaser's holdings sufficiently to
satisfy the

16
<PAGE>
Minimum Condition, neither Parent nor the Company will be contractually
obligated to carry out the Merger. However, unless the Loan Agreement is
modified, the Purchaser will not be permitted to waive the Minimum Condition (or
any other condition to its obligation to accept and pay for the Shares which are
tendered in response to the Offer).

If, because one or more of the conditions to the Purchaser's obligation to
accept Shares which are tendered in response to the Offer is not fulfilled, the
Purchaser does not purchase the Shares which are tendered in response to the
Offer, the Company will have the option, which it may exercise at any time on or
before December 5, 1998 (the first anniversary of the date on which the Stock
Purchase was completed), to repurchase all the stock the Purchaser acquired
through the Stock Purchase for the price the Purchaser paid for it. If, however,
the Purchaser purchases all the Shares which are tendered in response to the
Tender Offer, even though it is not required to do so, the Company will not have
the option to repurchase the stock the Purchaser acquired through the Stock
Purchase.

The Purchaser is also required to purchase, at or before the Effective Time
of the Merger, the minority interests in some cable television systems of which
the Company is the majority owner, except to the extent the current owners of
the minority interests will not sell them for prices specified in the Merger
Agreement. The Purchaser also is required to purchase two local cable systems
which were the subject of options held by the Company, if the owners of these
systems will sell them on the terms provided in the options. There is no
provision of the Merger Agreement giving the Company the right, or the
obligation, to purchase the minority interests or the two cable systems from the
Purchaser if the Purchaser purchases them but the Merger does not take place.

If Parent acquires all the stock of the Company, Parent will include the
Company's cable systems in Parent's network of Argentine cable systems. If that
occurs, Parent may make changes in the way those cable systems are operated, in
the corporate structure of those cable systems or in their personnel. Parent
also may liquidate the Company so Parent or another subsidiary of Parent will be
the sole owner of the Argentine cable systems currently owned or operated by the
Company. Except as described, neither the Purchaser nor Parent has any current
plans or proposals that would relate to, or result in, any extraordinary
corporate transaction involving the Company, such as a merger, reorganization or
liquidation involving the Company or any of its subsidiaries, a sale or transfer
of a material amount of assets of the Company or any of its subsidiaries, any
changes in the Company's capitalization or dividend policy or any other material
change in the Company's business, corporate structure or personnel.

In accordance with the Merger Agreement, effective December 5, 1997, Daniel
Vila, was elected to the Company's Board of Directors. The Company is required
to use its best efforts to cause Daniel Vila, or if he becomes unable to serve,
another designee of the Purchaser reasonably acceptable to the Company, to be
elected at all subsequent meetings of the Company's stockholders at which
directors are elected. If (i) at any time the Purchaser and its affiliates
(including Parent) cease to own at least 15% of the outstanding Common Shares,
or (ii) the Purchaser breaches or fails to fulfill in a material respect any of
its obligations under the Merger Agreement within 10 days after written notice
of the failure from the Company, the Purchaser must cause Daniel Vila or whoever
else may be its designee to resign.

ACQUISITION PROPOSALS. The Company may not, and may not authorize its
officers, directors, employees or agents to, enter into any discussions or take
any other steps, a likely result of which might be to cause someone other than
the Purchaser or Parent to (i) solicit tenders of stock of the Company or
otherwise seek to acquire 5% or more of either the Common Shares or the 8%
Preferred Shares, other than with a view to tendering those Shares in response
to the Offer, (ii) acquire all or a substantial portion of the assets of the
Company and its subsidiaries (whether through acquisitions of assets,
acquisitions of stock of subsidiaries or both), or (iii) otherwise acquire the
Company or a substantial portion of its assets if the Minimum Condition is not
met or if the Company's stockholders do not approve the Merger. The Company is
required to notify the Purchaser if the Company learns that anyone is
contemplating soliciting tenders of its stock, acquiring 5% or more of its
outstanding stock, acquiring all or a substantial portion of

17
<PAGE>
its assets and those of its subsidiaries or otherwise offering to acquire the
Company or its assets if the Minimum Condition is not met or if its stockholders
do not approve the Merger, and to provide the Purchaser with any additional
information it obtains regarding the contemplated solicitation of tenders,
acquisition of stock or assets or other acquisition offer.

If there is an unsolicited tender offer from someone other than the
Purchaser which the Company's Board of Directors determines, in good faith and
after consultation with the Company's independent financial advisor, (i) would
result in the holders of the Common Shares receiving consideration with a fair
value of more than $5.00 per share and the holders of the 8% Preferred shares
receiving consideration with a fair value of more than $160 per share, and (ii)
is more favorable both to the holders of the Common Shares than the transactions
under the Merger Agreement and to the holders of the 8% Preferred Shares the
Company may terminate the Merger Agreement by paying the Purchaser $5 million.
See Section 13.

13. THE MERGER.

THE MERGER AGREEMENT. The Merger Agreement provides that if the Purchaser
acquires enough Shares through the Offer to satisfy the Minimum Condition,
following the satisfaction or waiver of the conditions described below under
"Conditions to the Merger", the Purchaser will be merged with and into the
Company, which will be the surviving corporation of the Merger (the "Surviving
Corporation"). When the Merger becomes effective, the separate existence of the
Purchaser will terminate, the Purchaser's real and personal property, other
assets, rights, privileges, immunities, powers, purposes and franchises will be
merged into the Surviving Corporation, and the Merger will have the other
effects specified in Section 259 of the Delaware General Corporate Law and
Article 5.06 of the Texas Business Corporation Act (the "TBCA").

STOCK OF THE COMPANY.

(a) At the Effective Time of the Merger, each Common Share which is
outstanding immediately before the Effective Time, other than shares owned by
the Purchaser, will be converted into and become the right to receive $4.50 in
cash, or any higher price per share paid with regard to Common Shares tendered
in response to the Offer (the "Common Shares Merger Price").

(b) At the Effective Time each 8% Preferred Share which is outstanding
immediately before the Effective Time will be converted into and become the
right to receive in cash $144 per share plus accrued dividends to the Expiration
Date of the Offer (except that if a dividend is paid with regard to the 8%
Preferred Shares between the Expiration Time and the Effective Time, each 8%
Preferred Share will be converted into and become the right to receive $144.00
in cash without regard to any accrued but unpaid dividends).

(c) At the Effective Time, each Common Share or 8% Preferred Share held by
the Purchaser or by any direct or indirect subsidiary of the Company immediately
before the Effective Time will be cancelled and no payment will be made with
respect to those shares.

STOCK OF THE PURCHASER. At the Effective Time, each share of stock of the
Purchaser which is outstanding immediately before the Effective Time will be
converted into and become one share of common stock of the Surviving Corporation
("Surviving Corporation Common Stock").

STOCKHOLDER VOTE REQUIRED TO APPROVE MERGER. Under the TBCA, the
affirmative vote of holders of two-thirds of the outstanding Shares (including
any Shares owned by the Purchaser) is required to approve the Merger. If the
Minimum Condition is satisfied and the Purchaser purchases the Shares tendered
in response to the Offer, the Purchaser will it have sufficient voting power to
approve the Merger without the vote of any other stockholder of the Company. If
the Purchaser acquires more than 90% of the outstanding shares, stockholder
approval will not be required under TBCA Article 5.16.

18
<PAGE>
STOCKHOLDERS MEETING. If the Minimum Condition is satisfied and the
Purchaser purchases the Shares tendered in response to the Offer, and if
approval by the Company's stockholders is required in order to consummate the
Merger, the Company will hold a special meeting of its stockholders as soon as
practicable after the Expiration Time for the purpose of adopting the Merger
Agreement and approving the Merger.

CONDITIONS TO THE MERGER. Neither the Company nor the Purchaser is
contractually obligated to complete the Merger unless the Purchaser acquires the
Shares tendered in response to the Offer and the Minimum Condition is satisfied.
If that occurs (i) the Purchaser will own sufficient shares to be able to
approve the Merger even if no other stockholders of the Company vote in favor of
it and (ii) the Purchaser will be contractually obligated to vote in favor of
the Merger. The obligations of the Company to carry out the Merger will be
conditioned on the Merger's being approved by the holders of two-thirds of the
outstanding Common Shares and two-thirds of the outstanding 8% Preferred Shares
(which will occur if the Minimum Condition is satisfied and the Purchaser votes
in favor of the Merger). In addition, the obligations of the Company and of the
Purchaser complete the Merger are subject to the following conditions: (a) no
order will have been entered by any court or governmental authority and be in
force which invalidates the Merger Agreement or restrains the Company from
completing the transactions contemplated by the Merger Agreement; (b) the
Effective Time will occur on or before April 30, 1998; (c) the number of shares
held by shareholders of the Company who have filed written objections to
approval of the Merger sufficient to preserve their rights to demand the fair
value of the shares pursuant to Articles 5.11 through 5.13 of the TBCA will not
exceed 5% of the total number of outstanding Common Shares and 8% Preferred
Shares combined (treating each 8% Preferred Share as being equal to 32 Common
Shares).

TERMINATION OF THE MERGER AGREEMENT. The Merger Agreement may be terminated
at any time prior to the Effective Time of the Merger (as defined below),
whether before or after approval of the terms of the Merger Agreement by the
stockholders of the Company:

(1) by mutual consent of the Company and the Purchaser;

(2) by the Company, if without fault of the Company, the Expiration Time
of the Offer is not on or before January 31, 1998;

(3) by the Company or the Purchaser if, without fault of the Purchaser,
the Effective Time of the Merger is not on or before April 30, 1998;

(4) by the Company if (i) if any of the representations and warranties
of the Purchaser contained in the Merger Agreement was not complete and
accurate in all material respects on the date of the Merger Agreement or
(ii) any of the conditions to the Company's obligations to complete the
Merger are not satisfied or waived by the Company prior to or on the date of
the Merger;

(5) by the Purchaser if (i) any of the representations or warranties of
the Company contained in the Merger Agreement was not complete and accurate
in all material respects on the date of the Merger Agreement, or (ii) any of
the conditions to the Purchaser's obligations to complete the Merger are not
satisfied or waived by the Purchaser prior to or on the date of the Merger;
or

(6) by the Company if (A) a tender or exchange offer is commenced by a
potential acquiror for all the outstanding Common Shares and 8% Preferred
Shares for a consideration having a value of at least $5 per Common Share
and $160 per 8% Preferred Share, (B) the Company's Board of Directors
determines in good faith and after consultation with an independent
financial advisor that the offer constitutes a Superior Proposal (as defined
below) and resolves to accept the Superior Proposal or to recommend to the
Company's stockholders that they tender their shares in response to the
tender or exchange offer (C) the Company has given the Purchaser at least 10
business days' prior notice of its intention to terminate pursuant to this
provision and (D) the Company has paid the Purchaser $5 million. A "Superior
Proposal" is an unsolicited proposal to the Company which (x) would result
in the Company's stockholders receiving consideration with a fair value
determined in good faith by the

19
<PAGE>
Company's Board of Directors and after consultation with the Company's
independent financial advisor to be more than $5 per share of Common Stock
and more than $160 per share of 8% Preferred Stock and (y) is determined in
good faith by the Company's Board of Directors to be more favorable both to
the holders of Common Shares and to the holders of the 8% Preferred Shares
than the Offer and the Merger.

EFFECT OF TERMINATION OF THE MERGER AGREEMENT. If the Merger Agreement is
terminated, neither the Company nor the Purchaser will be required to complete
the Merger. If the Merger Agreement is terminated after the Purchaser has
accepted Shares tendered in response to the Offer, the termination will not
affect the Purchaser's purchase of the Shares it has accepted or its obligation
to pay for those shares. If the Purchaser waives the Minimum Condition and votes
in favor of the Merger, but the Merger is not approved by the Company's
stockholders, the Company will have to pay the Purchaser $5 million.

ACQUISITION PROPOSALS. The Merger Agreement contains prohibitions against
the Company's soliciting, or authorizing its officers, directors, employees or
agents to solicit acquisition proposals, and regarding what the Company may do,
if it receives unsolicited acquisition proposals.

OTHER PROVISIONS. The Merger Agreement also contains provisions (i)
requiring the Company to operate its business in the ordinary course, including
maintaining the goodwill of its business and maintaining its assets in good
condition, limiting the Company's borrowings and commitments for capital
expenditures, and precluding the Company from paying dividends (other than
required dividends with regard to its preferred stock) or taking other steps
regarding its stock, until the Effective Time, (ii) requiring the Purchaser (and
the corporation which survives the Merger) to indemnify directors, officers,
employees, fiduciaries and agents of the Company and its subsidiaries against
liability rising out of their service as directors, officers, employees or
agents of the Company or its subsidiaries, or of companies with regard to which
they served as directors, officers, employees or agents at the request of the
Company or its subsidiaries.

BOARD OF DIRECTORS. The Merger Agreement provides that if the Merger is
consummated, Daniel E. Vila, Alfredo L. Vila and Jose Maria Saenz Valiente will
be the directors of the Surviving Corporation.

REPRESENTATIONS AND WARRANTIES. The Merger Agreement contains various
customary representations and warranties.

APPRAISAL RIGHTS. If the Merger is consummated, holders of Shares at the
Effective Time of the Merger will have rights pursuant to the provisions of
Article 5.12 of the TBCA ("Article 5.12") to dissent and demand appraisal of
their Shares. Under Article 5.12, dissenting stockholders who comply with the
applicable statutory procedures will be entitled to receive a judicial
determination of the fair value of their Shares (exclusive of any element of
value arising from the accomplishment or exception of the Merger) and to receive
payment of that fair value in cash, together with a fair rate of interest, if
any. The statutory procedures include notifying the Company prior to the meeting
at which the Company's stockholders vote on the Merger that the particular
stockholder intends to exercise, dissenter's rights and giving that
stockholder's address. Any judicial determination of the fair value of Shares
could be more or less than the price per Share to be paid in the Merger.

The foregoing summary of Article 5.12 does not purport to be complete and is
qualified in its entirety by reference to Article 5.12. FAILURE TO FOLLOW THE
STEPS REQUIRED BY ARTICLE 5.12 FOR PERFECTING APPRAISAL RIGHTS MAY RESULT IN THE
LOSS OF THOSE RIGHTS.

The Purchaser will not be required to complete the Merger if holders of more
than 5% of the outstanding Common Shares and 8% Preferred Shares combined
(treating each 8% Preferred Share as equal to 32 Common Shares) file objections
sufficient to preserve their right to demand appraisal of their Shares.

20
<PAGE>
14. CERTAIN EFFECTS OF THE TRANSACTION.

NASDAQ. The purchase of the Shares tendered in response to the Offer will
reduce the number of Common Shares that might otherwise trade publicly and could
reduce the number of holders of Common Shares, which could adversely affect the
liquidity and market value of the remaining Common Shares held by the public.
Depending upon the number of Common Shares purchased pursuant to the Offer, the
Common Shares may no longer meet the standards for continued inclusion in the
NASDAQ Small-Cap Market, which require that an issuer have at least 200,000
publicly held shares with a market value of at least $1,000,000, held by at
least 400 shareholders or 300 shareholders of round lots. If these standards are
not met, the Common Shares might nevertheless continue to be quoted in the
over-the-counter "additional list" or in one of the "local lists," but if the
number of holders of the Common Shares falls below 300, or if the number of
publicly held Common Shares falls below 100,000 or there are not at least two
registered and active market makers for the Common Shares, the Common Shares
would no longer be "qualified" for NASDAQ reporting and NASDAQ would cease to
provide any quotations. Shares held directly or indirectly by directors,
officers or beneficial owners of more than 10% of the Common Shares (which would
include the Purchaser) are not considered as being publicly held for this
purpose. If the Common Shares are no longer eligible for NASDAQ quotation,
quotations might still be available from other sources. The extent of the public
market for the Shares and the availability of quotations would, however, depend
on the remaining number of holders of Common Shares, the interest of securities
firms in maintaining a market in the Common Shares, the possible termination of
registration under the Exchange Act, as described below, and other factors.
According to the Company, as of November 14, 1997, there were approximately 336
holders of record of Common Shares and approximately 1,460 beneficial owners of
Common Shares and as of December 5, 1997, there were 19,223,456 Common Shares
outstanding, of which 6,006,006 were owned by the Purchaser.

EXCHANGE ACT REGISTRATION. The Common Shares are currently registered under
the Exchange Act. That registration may be terminated upon application of the
Company to the Securities and Exchange Commission if the Common Shares are not
listed on a national securities exchange or quoted on NASDAQ and there are fewer
than 300 record holders of the Common Shares. The termination of registration of
the Common Shares under the Exchange Act would substantially reduce the
information required to be furnished by the Company to holders of Common Shares
and to the Commission and would make certain provisions of the Exchange Act,
such as the short-swing profit recovery provisions of Section 16(b) of the
Exchange Act, the requirement of furnishing a proxy statement in connection with
stockholders' meetings pursuant to Section 14(a) of the Exchange Act, and the
requirements of Rule 13e-3 under the Exchange Act with respect to
"going-private" transactions, no longer applicable to the Company. See Section
16. In addition, "affiliates" of the Company and persons holding "restricted
securities" of the Company may be deprived of the ability to dispose of those
securities pursuant to Rule 144 under the Securities Act. If registration of the
Common Shares under the Exchange Act were terminated, the Common Shares would no
longer be eligible for quotation on NASDAQ. The Purchaser intends to seek to
cause the Company to make an application for termination of registration of the
Common Shares under the Exchange Act as soon after consummation of the Offer as
the requirements for termination of the registration of the Common Shares are
met. As a result, the Purchaser may be able to give the required stockholder
approval of the Merger (if stockholder approval is required) without the
Company's sending a proxy statement or an information statement to its
stockholders.

15. DIVIDENDS AND DISTRIBUTIONS. The Merger Agreement prohibits the Company
from paying any dividends or making other distributions with regard to its
Common Shares or its 8% Preferred Shares (other than regularly scheduled
dividends with regard to the 8% Preferred Shares), or from issuing any shares,
until the Effective Time of the Merger.

21
<PAGE>
16. CERTAIN LEGAL MATTERS; REGULATORY APPROVALS.

GENERAL. Except as otherwise disclosed in this Offer to Purchase, based on
the Company's representations and warranties in the Merger Agreement and a
review of publicly available filings by the Company with the Commission, the
Purchaser is not aware of (i) any license or regulatory permit that appears to
be material to the business of the Company and its subsidiaries, taken as a
whole, that might be adversely affected by the acquisition of Shares by the
Purchaser pursuant to the Offer or the Merger or (ii) any approval or other
action by any governmental, administrative or regulatory agency or authority,
domestic or foreign, that would be required for the acquisition or ownership of
Shares by the Purchaser, other than approvals by an Argentine governmental
authority which, although required as a pre-requisite to changes of control of
Argentine cable system operators, customarily are not given until after the
changes of control have taken place (and are not a condition to the Offer or the
Merger). Should any such approval or other action be required, the Purchaser
currently contemplates that the approval or action would be sought. It is
possible that any such approval or action, if needed, would not be obtained.

GOING PRIVATE TRANSACTIONS. The Commission has adopted Rule 13e-3 under the
Exchange Act, which is applicable to certain "going private" transactions. The
Offeror does not believe that Rule 13e-3 will be applicable to the Merger unless
the Merger is consummated more than one year after the termination of the Offer.
If applicable, Rule 13e-3 requires, among other things, that certain financial
information concerning the fairness of the Merger and the consideration offered
to minority stockholders in the Merger be filed with the Commission and
disclosed to stockholders prior to the consummation of the Merger.

ANTITRUST COMPLIANCE. Prior to the Stock Purchase, the Company and Parent
made a filing with the United States Federal Trade Commission (the "FTC") under
the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the "HSR Act"). The
HSR Act requires that, before an acquisition involving companies which exceed
specified sizes can take place, information must be provided to the FTC and to
the Antitrust Division of the United States Department of Justice, and specified
waiting periods must expire or be terminated by the FTC or the Antitrust
Division.

The required notification under the HSR Act was filed, and the waiting
period was terminated, before the Stock Purchase. That filing contemplated a
possible acquisition by Parent of all the stock of the Company. Therefore, no
further filing or waiting period will be required with regard to the Offer or
the Merger.

STATE TAKEOVER STATUTES. The Company is incorporated under the laws of
Texas. Effective September 1, 1997, a new Part Thirteen of the Texas Business
Corporation Act (the "Texas Business Combination Law") prohibits a public
corporation organized under Texas law, or its majority owned subsidiaries, from
engaging in a transaction with a person who acquires 20% or more of the
corporation's outstanding voting stock or its affiliates, for three years after
the person acquires that 20% or greater interest, share exchange, sale of
significant assets, issuance of shares, liquidation of the Corporation pursuant
to an agreement with the 20% or greater shareholder, reclassification of the
securities of the Corporation which increases the portion of the stock of any
class or series owned by the 20% or greater stockholder or the receipt by the
20% or greater stockholder of loans or similar financial assistance. The three
year ban does not apply, however, if the proposed transaction with the 20% or
greater stockholder, or the transaction by which the person became a 20% or
greater stockholder, is approved by the board of directors of the corporation
before the person becomes a 20% or greater stockholder. Because the Board of the
Company approved the Stock Purchase (the transaction by which the Purchaser, and
indirectly Parent, became a 20% or greater stockholder of the Company) before it
took place, the Texas Business Combination Law will not apply to the Purchaser
or Parent.

A number of other states have adopted laws and regulations applicable to
attempts to acquire securities of corporations which are incorporated, or have
substantial assets, stockholders, principal

22
<PAGE>
executive offices or principal places of business, or whose business operations
otherwise have substantial economic effects, in such states. In 1982, in EDGAR
V. MITE CORP., the Supreme Court of the United States invalidated on
constitutional grounds the Illinois Business Takeover Statute, which, as a
matter of state securities law, made takeovers of corporations meeting certain
requirements more difficult. However, in 1987, in CTS CORP. V. DYNAMICS CORP. OF
AMERICA, the Supreme Court held that the State of Indiana may, as a matter of
corporate law, and, in particular, with respect to those aspects of corporate
law concerning corporate governance, constitutionally disqualify a potential
acquiror from voting on the affairs of a target corporation without the prior
approval of the remaining stockholders. The state law before the Supreme Court
was by its terms applicable only to corporations that had a substantial number
of stockholders in the state and were incorporated there.

17. FEES AND EXPENSES. Except as set forth below, neither Parent nor the
Purchaser will pay any fees or commissions to any broker, dealer or other person
for soliciting tenders of Shares pursuant to the Offer.

The Purchaser has retained Furman Selz LLC and ING Baring (U.S.) Securities,
Inc. to act as Dealer Managers in connection with the Offer. Furman Selz LLC and
ING Baring (U.S.) Securities, Inc. each will receive a fee of $125,000 for their
services as Dealer Managers in connection with the Offer. The Purchaser has also
agreed to reimburse Furman Selz LLC and ING Baring (U.S.) Securities, Inc. for
certain out-of pocket expenses incurred in connection with the Offer (excluding
certain fees and disbursements of their legal counsel) and to indemnify Furman
Selz LLC and ING Baring (U.S.) Securities, Inc. against certain liabilities in
connection with the Offer, including liabilities under the federal securities
laws.

The Purchaser has retained Morrow & Co., Inc. to act as the Information
Agent in connection with the Offer. The Information Agent may contact holders of
Shares by mail, telephone, facsimile, telegraph and personal interviews and may
request brokers, dealers and other nominee stockholders to forward materials
relating to the Offer to beneficial owners of Shares. The Information Agent will
receive reasonable and customary compensation together with reimbursement for
its reasonable out-of-pocket expenses and will be indemnified against certain
liabilities and expenses, including certain liabilities under the federal
securities laws.

In addition, The Bank of New York has been retained as the Depositary. The
Depositary has not been retained to make solicitations or recommendations in its
role as Depositary. The Depositary will receive reasonable and customary
compensation for its services, will be reimbursed for certain reasonable out-of-
pocket expenses and will be indemnified against certain liabilities and
expenses. Brokers, dealers, commercial banks and trust companies will be
reimbursed by the Purchaser for customary mailing and handling expenses incurred
by them in forwarding offering material to their customers.

18. MISCELLANEOUS. The Purchaser is not aware of any jurisdiction where the
making of the Offer is prohibited by any administrative or judicial action or
pursuant to any state statute. If the Purchaser becomes aware of any state
statute prohibiting the making of the Offer or the acceptance of the Shares
which are tendered in response to the Offer, the Purchaser will make a good
faith effort to comply with that state statute. If, after a good faith effort
the Purchaser cannot comply with any 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 will be deemed to be made on behalf of the Purchaser by the Dealer
Managers or one or more registered brokers or dealers which are licensed under
the laws of that jurisdiction.

NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATION ON BEHALF OF THE PURCHASER NOT CONTAINED IN THIS OFFER TO
PURCHASE OR IN THE LETTER OF TRANSMITTAL, AND IF GIVEN OR MADE, THAT INFORMATION
OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED.

23
<PAGE>
Parent and the Purchaser have filed with the Commission a Tender Offer
Statement on Schedule 14D-1 (the "Schedule 14D-1"), together with exhibits,
pursuant to Rule 14d-3 of the General Rules and Regulations under the Exchange
Act, containing additional information with respect to the Offer, and Parent or
the Purchaser may file amendments to the Schedule 14D-1. The Schedule 14D-1 and
any amendments to it, including exhibits, may be inspected at, and copies may be
obtained from, the places described in Section 8 (except that they will not be
available at the regional offices of the Commission).

TESCORP ACQUISITION CORPORATION

December 8, 1997

24
<PAGE>
SCHEDULE I
CERTAIN INFORMATION CONCERNING THE DIRECTORS AND EXECUTIVE
OFFICERS OF PARENT AND THE PURCHASER

1. DIRECTORS AND EXECUTIVE OFFICERS OF PARENT. Set forth below is the name,
current business address, citizenship and the present principal occupation or
employment and material occupations, positions, offices or employments for the
past five years of each director and executive officer of Parent. The principal
address of Parent and, unless otherwise indicated below, the current business
address for each individual listed below is Godoy Cruz 316, Mendoza, Province of
Mendoza Argentina 5500. Unless otherwise indicated, each such person is a
citizen of the Republic of Argentina.

<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION OR EMPLOYMENT DURING PAST
NAME FIVE YEARS, POSITIONS WITH PARENT AND CERTAIN DIRECTORSHIPS
- --------------------------------------------- -------------------------------------------------------------------
<S> <C>
Daniel Eduardo Vila.......................... Chairman of the Board of Directors of Parent since 1996; Chief
Executive Officer of Parent since March 1997; Vice Chairman of the
Board of Directors of Supercanal S.A. since 1984; Chairman of the
Board of Mendoza 21 S.A.; Director of Purchaser since September,
1997; publisher of DIARIO UNO, a daily newspaper in Mendoza; Radio
Nihuil S.A. a radio broadcaster, operating in the Province of
Mendoza and surrounding areas; publisher of PRIMERA FILA, a monthly
magazine; Vice Chairman of Radio Red Celeste y Blanca S.A., the
operator of an AM radio station in Buenos Aires; Director of
Dalvian S.A., a real estate development company; alternate director
of Banco de Mendoza S.A. and Banco Prevision Social S.A.;

Alfredo Luis Vila Santander.................. Vice Chairman of the Board of Directors of Parent since 1996;
Chairman and Chief Executive Officer of Supercanal S.A. from 1993
to 1996; Director and President of Purchaser since September, 1997;
Director of Radio Nihuil S.A., Mendoza 21 S.A. and of Dalvian S.A.;
Chairman and Chief Executive Officer of Supercanal Internacional
S.A.

Jorge Mas.................................... Director of Parent since July 1997; Alternate Director of Parent
from June 1996 through April 1997; Alternate Director of Supercanal
S.A. since 1996; President, Chief Executive Officer and Director of
MasTec, Inc., a U.S. publicly-held company, since March 1994;
during the past five years, President and Chief Executive Officer
of Church & Tower, Inc., a principal operating subsidiary of
MasTec, Inc.; Chairman of the Board of Directors of Neff
Corporation, a company which sells and leases construction and
industrial equipment, Atlantic Real Estate Holding Corp., a real
estate holding company, U.S. Development Corp. a real estate
company, and Santos Capital, Inc., a merchant banking firm, all
companies controlled by Mr. Mas.; during all or a portion of the
past five years, President and Chief Executive Officer of these
corporations.

Jose Maria Saenz Valiente, Jr................ Director of Parent since July 1996; Chairman of the Board of
Multicanal from 1993 until 1994; Director, Secretary and President
of Purchaser since September, 1997; since 1996
</TABLE>

I-1
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION OR EMPLOYMENT DURING PAST
NAME FIVE YEARS, POSITIONS WITH PARENT AND CERTAIN DIRECTORSHIPS
- --------------------------------------------- -------------------------------------------------------------------
Director of various companies in the multi-channel television
industry that were acquired by Multicanal; partner of the Saenz
Valiente & Padilla law firm.
<S> <C>

Alberto Luis Vila............................ Director of Parent since 1996; Director of Supercanal S.A. since
1993; Director of Primera Fila A.A.; legal counsel to various
multinational corporations in Mendoza; partner of the Vila law
firm.

Sergio Ceroi................................. Alternate Director of Parent since July, 1996; Chief Financial
Officer of Mendoza 21 S.A. since February 1996; prior to that,
Chief Financial Officer of Radio Nihuil S.A.; from January 1985 to
December 1987, Chief Auditor for Profim Cia Financiera S.A., a
money manager in the Province of Mendoza.

Juan Maria de la Vega........................ Alternate Director of Parent since July, 1996; Member of the Saenz
Valiente & Padilla law firm; and serving on the Board of Directors
of various companies in the multi-channel television industry
acquired by Multicanal since 1993; alternate Director of
Multicanal.

Kevin P. Fitzgerald.......................... Alternate Director of Parent since July 1997; prior to that,
Director of Supercanal Holding from 1996 until April 1997; Director
of Supercanal S.A. since April 1996; since July 1995, President and
Co-Chairman of Santos Capital, Inc., and President and Chief
Executive Officer of Neff Corporation and its subsidiaries, Neff
Rental, Inc. and Neff Machinery, Inc.; From 1991 to 1995, Senior
Vice President in the investment banking department of Houlihan
Lokey Howard & Zukin, a private investment bank; prior to that, in
the corporate finance department of Deloitte, Haskins & Sells, a
public accounting firm; Director of Primera Fila S.A., Neff Corp.
and Santos Capital, Inc.

Guillermo Vila............................... Alternate Director of Parent since July 1996; Director of
Supercanal S.A.; a partner of the Vila law firm.

Omar R. Alvarez.............................. Alternate Director of Parent since July, 1997; holds (i) 35% of the
capital stock and is President of San Rafael/Pehuenche, a
multi-channel television system controlled by the Company, (ii) 70%
of the capital stock and is President of Inversora C.T.C.S.R.L., an
investment company which holds interests in banks, medical
providers and real estate, (iii) 80% of the capital stock and is a
director of L.V. 23 Radio Rio Atuel S.R.L., an AM and FM radio
station, (iv) 33% of the CUOTAS and is partner of Lomas del Nihuil
S.R.L., a tourist resort in Nihuil, (v) 100% of the capital stock
of El Faro S.R.L., a tourist resort in Nihuil, (vi) 100% of the
capital stock of and a director of Cementerio Parque S.A. which
holds property for cemetery parks, and (vii) 100% of the CUOTAS and
President of
</TABLE>

I-2
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION OR EMPLOYMENT DURING PAST
NAME FIVE YEARS, POSITIONS WITH PARENT AND CERTAIN DIRECTORSHIPS
- --------------------------------------------- -------------------------------------------------------------------
Parque Turistico Sierra Pintada S.R.L., a 14,000 hectare reserve
and tourist park in the province of Mendoza.
<S> <C>

Fernando Julio Barbeira...................... Chief Financial Officer of Parent since August, 1996; from 1993 to
August 1996, held various general management positions in
subsidiaries of Multicanal, including Red Argentina S.A. ("Red
Argentina"), Multicanal's MSO management company, Intercable S.A.
and Lanus Video Cable S.A., operating subsidiaries of Multicanal,
companies controlled by Multicanal, and Aconcagua (Multicanal's
subsidiary in Mendoza); was responsible for the accounting and
financial statements of the Aerolineas Argentinas privatization at
Henry Martin y Asociados, a public accounting firm from 1991 to
1993; served in several positions at Neumaticos Goodyear S.A. from
1970 to 1990.

Omar Jorge Saez.............................. Chief Operating Officer of Parent since December 1996; from 1993 to
1996, served as General Manager of several different companies
acquired by Multicanal; from 1989 to 1993, was General Manager of
Cormasa S.A., a metal mechanic company.

Guillermo Horacio Panelli.................... Chief Administrative Officer of Parent since November 1996; from
November 1993 until September 1996, was Administrative and
Financial Manager of Concecuyo S.A., a licensee of YPF S.A.
operating service stations in the provinces of Mendoza, San Luis,
San Juan, La Rioja and Catamarca; From 1987 to 1993, was
Administrative and Financial Manager of Bodega Quiros S.A., a
beverages and winery concern.

Eduardo Elbio Carbini........................ Marketing Manager of Parent since January 1997; was Marketing
Manager of Supercanal S.A. between 1987 and 1996; served as
Marketing Manager of PRIMERA FILA from 1990 to 1996; from 1995 to
1996, was Director of Radio F.M. Brava S.A., the operator of a
local radio station, and Marketing Manager at DIARIO UNO.
</TABLE>

2. DIRECTORS AND EXECUTIVE OFFICERS OF PURCHASER. Set forth below is the
name, current business address, citizenship and the present principal occupation
or employment and material occupations, positions, offices or employments for
the past five years of each director and executive officer of Purchaser. The
principal address of Purchaser and, unless otherwise indicated below, the
current business address for each individual listed below is Godoy Cruz 316,
Mendoza, Province of Mendoza Argentina 5500. Unless otherwise indicated, each
such person is a citizen of the Republic of Argentina.

<TABLE>
<S> <C>
Daniel Eduardo Vila................. Director of Purchaser since September, 1997; Chairman
of the Board of Directors of Parent since 1996; Chief
Executive Officer of Parent since March 1997; Vice
Chairman of the Board of Directors of Supercanal S.A.
since 1984; Chairman of the Board of Mendoza 21 S.A.;
publisher of DIARIO UNO, a daily newspaper in Mendoza;
Radio Nihuil S.A. a radio
</TABLE>

I-3
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION OR EMPLOYMENT DURING PAST
FIVE YEARS, POSITIONS WITH PARENT AND CERTAIN
NAME DIRECTORSHIPS
- ------------------------------------ ------------------------------------------------------
broadcaster, operating in the Province of Mendoza and surrounding
areas; publisher of PRIMERA FILA, a monthly magazine; Vice Chairman
of Radio Red Celeste y Blanca S.A., the operator of an AM radio
station in Buenos Aires; Director of Dalvian S.A., a real estate
development company; alternate director of Banco de Mendoza S.A.
and Banco Prevision Social S.A.;
<S> <C> <C>

Alfredo Luis Vila Santander.................. Director and President of Purchaser since September, 1997; Vice
Chairman of the Board of Directors of Parent since 1996; Chairman
and Chief Executive Officer of Supercanal S.A. from 1993 to 1996;
Director of Radio Nihuil S.A., Mendoza 21 S.A. and of Dalvian S.A.;
Chairman and Chief Executive Officer of Supercanal Internacional
S.A.

Jose Maria Saenz Valiente, Jr................ Director, Secretary and Treasurer of Purchaser since September,
1997; Director of Parent since July 1996; Chairman of the Board of
Multicanal from 1993 until 1994; since 1996 Director of various
companies in the multi-channel television industry that were
acquired by Multicanal; partner of the Saenz Valiente & Padilla law
firm.
</TABLE>

I-4
<PAGE>
Facsimile copies of the Letter of Transmittal, properly completed and duly
signed, will be accepted. The Letter of Transmittal, certificates for Shares and
any other required documents should be sent by each stockholder of the Company
or the stockholder's broker, dealer, commercial bank, trust company or other
nominee to the Depositary as follows:

<TABLE>
<S> <C> <C>
THE DEPOSITARY FOR THE OFFER IS:

THE BANK OF NEW YORK

BY MAIL: FACSIMILE TRANSMISSION: BY HAND OR OVERNIGHT COURIER:

Tender & Exchange Department (for Eligible Institutions Tender & Exchange Department
P.O. Box 11248 Only) 101 Barclay Street
Church Street Station (212) 815-6213 Receive and Deliver Window
New York, New York 10286-1248 New York, New York 10286
FOR CONFIRMATION TELEPHONE:

(800) 507-9357
</TABLE>

Any questions or requests for assistance or additional copies of the Offer
to Purchase, the Letter of Transmittal or the Notice of Guaranteed Delivery may
be directed to the Information Agent or the Dealer Managers at their respective
telephone numbers and locations listed below. You may also contact your broker,
dealer, commercial bank or trust company or other nominee for assistance
concerning the Offer.

THE INFORMATION AGENT FOR THE OFFER IS:

[LOGO]

909 Third Avenue
20th Floor
New York, New York 10022
(212) 754-8000
Toll Free: (800) 566-9061

Banks and Brokerage Firms please call:
(800) 662-5200

THE DEALER MANAGERS FOR THE OFFER ARE:

<TABLE>
<S> <C>
ING BARINGS FURMAN SELZ
667 Madison Avenue 230 Park Avenue
New York, New York 10021 New York, New York 10169
1-888-584-4166 (Toll Free) 1-888-584-4166 (Toll Free)
</TABLE>

<PAGE>

Exhibit C

AMENDED STOCK PURCHASE AND MERGER AGREEMENT

DATED AS OF

NOVEMBER 26, 1997

BETWEEN

TESCORP ACQUISITION CORPORATION,

A WHOLLY OWNED SUBSIDIARY OF

SUPERCANAL HOLDING S.A.,

AND

TESCORP, INC.

<PAGE>

TABLE OF CONTENTS

Page

ARTICLE I

STOCK PURCHASE

1.1 Purchase of Stock. . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Deposit. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.3 Stock Purchase Closing . . . . . . . . . . . . . . . . . . . . 2

ARTICLE II

THE TENDER OFFERS

2.1 The Offers . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.2 Company Action . . . . . . . . . . . . . . . . . . . . . . . . 6

ARTICLE III

THE MERGER

3.1 Agreement to Effect Merger . . . . . . . . . . . . . . . . . . 8
3.2 The Merger . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.3 Certificate of Incorporation . . . . . . . . . . . . . . . . . 8
3.4 By-Laws. . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.5 Directors. . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.6 Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.7 Stock of the Company . . . . . . . . . . . . . . . . . . . . . 9
3.8 Stock of Acquisition . . . . . . . . . . . . . . . . . . . . . 10
3.9 Stockholders Meeting . . . . . . . . . . . . . . . . . . . . . 10
3.10 Voting by Acquisition. . . . . . . . . . . . . . . . . . . . . 11
3.11 Dissenting Shares. . . . . . . . . . . . . . . . . . . . . . . 11
3.12 Payment for Shares . . . . . . . . . . . . . . . . . . . . . . 12
3.13 Options and Warrants . . . . . . . . . . . . . . . . . . . . . 14

ARTICLE IV

EFFECTIVE TIME OF MERGER

4.1 Date of the Merger . . . . . . . . . . . . . . . . . . . . . . 14
4.2 Execution of Certificates of Merger. . . . . . . . . . . . . . 14
4.3 Effective Time of the Merger . . . . . . . . . . . . . . . . . 15

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

5.1 Organization and Qualification; Subsidiaries . . . . . . . . . 15
5.2 Certificate of Incorporation and By-Laws . . . . . . . . . . . 16
5.3 Capitalization . . . . . . . . . . . . . . . . . . . . . . . . 16
5.4 Authority Relative to this Agreement . . . . . . . . . . . . . 18
5.5 No Conflict; Required Filings and Consents . . . . . . . . . . 19
5.6 Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . 20

i
<PAGE>

5.7 SEC Reports; Financial Statements. . . . . . . . . . . . . . . 20
5.8 Absence of Certain Changes . . . . . . . . . . . . . . . . . . 21
5.9 No Undisclosed Liabilities . . . . . . . . . . . . . . . . . . 22
5.10 Absence of Litigation. . . . . . . . . . . . . . . . . . . . . 22
5.11 Benefit Plans. . . . . . . . . . . . . . . . . . . . . . . . . 23
5.12 Transactions with Certain Persons. . . . . . . . . . . . . . . 24
5.13 Labor Matters. . . . . . . . . . . . . . . . . . . . . . . . . 25
5.14 Proxy Statement/Prospectus . . . . . . . . . . . . . . . . . . 25
5.15 Restrictions on Business Activities. . . . . . . . . . . . . . 26
5.16 Title to Property. . . . . . . . . . . . . . . . . . . . . . . 26
5.17 CATV Systems, Subscribers. . . . . . . . . . . . . . . . . . . 26
5.18 Franchises, Licenses, Permits, etc.. . . . . . . . . . . . . . 27
5.19 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
5.20 Environmental Matters. . . . . . . . . . . . . . . . . . . . . 32
5.21 Contracts. . . . . . . . . . . . . . . . . . . . . . . . . . . 34
5.22 Intellectual Property. . . . . . . . . . . . . . . . . . . . . 34
5.23 Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . 36
5.24 Accounts Receivable. . . . . . . . . . . . . . . . . . . . . . 36
5.25 Full Disclosure. . . . . . . . . . . . . . . . . . . . . . . . 36
5.26 Fairness Opinion . . . . . . . . . . . . . . . . . . . . . . . 36

ARTICLE VI

REPRESENTATIONS AND WARRANTIES OF ACQUISITION

6.1 Organization and Qualification; Subsidiaries . . . . . . . . . 37
6.2 Constituent Documents. . . . . . . . . . . . . . . . . . . . . 37
6.3 Authority Relative to this Agreement and the Guarantee . . . . 37
6.4 No Conflict. . . . . . . . . . . . . . . . . . . . . . . . . . 38
6.5 Ownership of Acquisition; No Prior Activities. . . . . . . . . 39
6.6 Accuracy of Materials. . . . . . . . . . . . . . . . . . . . . 40
6.7 Availability of Funds. . . . . . . . . . . . . . . . . . . . . 41
6.8 No Supercanal Shareholder Suits. . . . . . . . . . . . . . . . 41

ARTICLE VII

ACTIONS PRIOR TO THE MERGER

7.1 Activities Until Effective Time. . . . . . . . . . . . . . . . 42
7.2 Redemption of 10% Preferred Stock. . . . . . . . . . . . . . . 44
7.3 No Solicitation of Offers; Notice of Indications of Interest . 44
7.4 Efforts to Fulfill Conditions. . . . . . . . . . . . . . . . . 46
7.5 Indemnification and Insurance. . . . . . . . . . . . . . . . . 46
7.6 Board Representation . . . . . . . . . . . . . . . . . . . . . 48
7.7 Options and Warrants . . . . . . . . . . . . . . . . . . . . . 49
7.8 Use of Proceeds of Sale of Purchased Common Stock. . . . . . . 50
7.9 Purchase of KTV. . . . . . . . . . . . . . . . . . . . . . . . 50
7.10 Satisfaction of Subsidiary Debt. . . . . . . . . . . . . . . . 50
7.11 Ownership of Subsidiaries. . . . . . . . . . . . . . . . . . . 51
8.1 Conditions to the Company's Obligations. . . . . . . . . . . . 51
8.2 Conditions to Acquisition's Obligations. . . . . . . . . . . . 52

ARTICLE IX

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<PAGE>

TERMINATION

9.1 Right to Terminate . . . . . . . . . . . . . . . . . . . . . . 54
9.2 Manner of Terminating Agreement. . . . . . . . . . . . . . . . 54
9.3 Termination due to Superior Proposal.. . . . . . . . . . . . . 54
9.4 Effect of Termination. . . . . . . . . . . . . . . . . . . . . 56

ARTICLE X

ABSENCE OF BROKERS

10.1 Representations and Warranties Regarding Brokers and Others. . 57

ARTICLE XI

GENERAL

11.1 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
11.2 Company Option to Repurchase Stock . . . . . . . . . . . . . . 58
11.3 Purchase of Minority Interests . . . . . . . . . . . . . . . . 59
11.4 Payment to Company . . . . . . . . . . . . . . . . . . . . . . 59
11.5 Retention Payments . . . . . . . . . . . . . . . . . . . . . . 59
11.6 Access to Properties, Books and Records. . . . . . . . . . . . 60
11.7 Press Releases . . . . . . . . . . . . . . . . . . . . . . . . 60
11.8 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . 61
11.9 Effect of Disclosures. . . . . . . . . . . . . . . . . . . . . 62
11.10 Captions . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
11.11 Prohibition Against Assignment . . . . . . . . . . . . . . . . 62
11.12 Third Party Beneficiaries. . . . . . . . . . . . . . . . . . . 62
11.13 Notices and Other Communications . . . . . . . . . . . . . . . 62
11.14 Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . 64
11.15 Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . 64
11.16 Consent to Jurisdiction and Service of Process . . . . . . . . 64
11.17 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . 64

iii

<PAGE>

AMENDED STOCK PURCHASE AND MERGER AGREEMENT

This is an Agreement dated as of November 26, 1997 between TESCORP
ACQUISITION CORPORATION ("Acquisition"), a Delaware corporation and a wholly
owned subsidiary of Supercanal Holding, S.A., ("Supercanal"), an Argentine
corporation, and TESCORP, INC. (the "Company"), a Texas corporation, which,
subject to the provisions of Paragraph 11.8(b), amends and restates a Stock
Purchase and Merger Agreement (the "Original Agreement') dated as of September
16, 1997, between Acquisition and the Company.

ARTICLE I

STOCK PURCHASE

1.1 Purchase of Stock. At the Initial Purchase Closing described
in Paragraph 1.3, Acquisition will purchase from the Company, and the Company
will sell to Acquisition, 6,006,006 shares (the "Purchased Common Stock") of
common stock, par value $.02 per share, of the Company ("Common Stock") for a
total of $20,000,000 (the "Common Stock Purchase Price").

1.2 Deposit. (a) Simultaneously with the execution of the Original
Agreement, Acquisition delivered $5 million (the "Deposit") to the Company. If
the Purchase Closing takes place, the Company will retain the Deposit as part of
the payment of the Common Stock Purchase Price. If the Purchase Closing does
not take place, other than because one or more of the conditions specified in
Paragraph 8.2 is not fulfilled (other than because the condition in Paragraph
8.2(d) is not fulfilled due to an order entered by a court in a suit or
proceeding instituted by a shareholder of Supercanal or an affiliate of a
shareholder of Supercanal (a "Supercanal Shareholder Suit"), or because this
Agreement is terminated under Paragraph 9.1 or 9.2 (other than Paragraph 9.1(d),
and other than clause (ii) of Paragraph 9.1(e) due to an order entered by a
court in a Supercanal Shareholder Suit), on the Stock Purchase Closing Date
described in Paragraph 1.3, the Company will return the Deposit to Acquisition.
If the Purchase Closing does not take place (i) because of a default by
Acquisition, (ii) because a condition specified in Paragraph 8.1 is not
fulfilled (unless that condition is also a condition specified in Paragraph 8.2
and is not due to an order of a court entered in a Supercanal Shareholder Suit)
or (iii) because this Agreement is terminated under Paragraph 9.1(d) or under
clause (ii) of Paragraph 9.1(e) due to an order entered by a court in a
Supercanal Shareholder Suit, the Deposit will be retained by the Company.

1.3 Stock Purchase Closing. (a) The closing of the Purchase of
the Purchased Stock, (the "Purchase Closing") will take place at the offices of
Rogers & Wells, 200 Park Avenue, New York, New York, at 10:00 a.m. New York City
time on December 5, 1997 (the "Stock Purchase Closing Date").

(b) At the Purchase Closing, Acquisition will deliver to the
Company the following:

<PAGE>

(i) Evidence of a wire transfer to an account specified by
the Company at least 24 hours before the Purchase Closing of $15,000,000.

(ii) A letter in which Acquisition acknowledges that it will
be acquiring the Purchased Common Stock for investment, and not with a view to
its resale or distribution.

(iii) A copy, executed by Supercanal, of a Programming Purchase
Agreement (the "Programming Agreement") substantially in the form of Exhibit
1.3-B(4).

(i) Certificates, registered in the name of Acquisition (or,
at Acquisition's election, registered in the name of Supercanal or another
wholly owned subsidiary of Supercanal which agrees to be bound by Paragraphs 3.1
and 3.10) representing all the Purchased Common Stock.

(ii) Evidence that the actions described in Paragraph 7.6 have
been taken and that the persons designated by Acquisition have been elected to
serve as directors of Acquisition from and after the Purchase Closing.

(iii) A copy, executed by the Company, of the Programming
Agreement.

(iv) A document, executed by the Company, stating that the
Deposit has been applied to pay a portion of the purchase price for the
Purchased Common Stock, and that the purchase price of the Purchased Common
Stock has been paid in full.

(v) A copy, executed by the Company, of a Registration
Agreement (the "Registration Agreement") substantially in the form of Exhibit
1.3-C(5).

(d) The certificates representing the Purchased Common Stock may
bear legends to the effect that the shares represented by those certificates
have not been registered under the Securities Act of 1933, as amended, and may
not be sold or transferred other than in transactions registered under that Act
or which are exempt from the registration requirements of that Act.

ARTICLE II

THE TENDER OFFERS

2.1 The Offers. (a) Not later than December 5, 1997, Acquisition
will make a public announcement of (i) an offer (the

2
<PAGE>

"Common Stock Tender Offer") to purchase all the outstanding Common Stock for
$4.50 per share in cash and (ii) an offer (the "Preferred Stock Tender Offer"
and, together with the Common Stock Tender Offer, the "Tender Offers") to
purchase all the outstanding Series 1995 8% Preferred Stock of Tescorp ("8%
Preferred Stock") for a per share amount in cash equal to (x) $144, plus (y) an
amount equal to accrued dividends on a share of 8% Preferred Stock from the last
date on which dividends were paid to the Expiration Date (defined below).

(b) The Tender Offers will not expire until at least 20 business
days, and (except as provided in subparagraph (c)) the Tender Offers will expire
not more than 60 days, after the day on which a Schedule 14D-1 relating to the
Tender Offers (the "Schedule 14D-1") is filed with the Securities and Exchange
Commission ("SEC").

(c) Subject to the conditions to the Tender Offers set forth on
Exhibit 2.1-C, and the other conditions set forth in this Agreement,
Acquisition will, not later than five days after the date on which the Tender
Offers expire (the "Expiration Date") accept for payment and pay for all the
shares of Common Stock and 8% Preferred Stock which are properly tendered in
response to the Tender Officers and not withdrawn. The obligation of
Acquisition to accept for payment and pay for shares which are properly tendered
and not withdrawn prior to the Expiration Date will not be subject to any
conditions other than those set forth on Exhibit 2.1-C. Acquisition will not
(i) decrease the price per share of Common Stock or per share of 8% Preferred
Stock offered in the Tender Offers below that described in subparagraph (a),
(ii) decrease the number of shares being tendered for in the Tender Offers,
(iii) change the form of consideration payable in the Tender Offers, (iv) modify
or add to the conditions set forth on Exhibit 2.1-C or (v) extend the Tender
Offers to a date which is more than 60 days after the Tender Offers are
commenced, except that (w) if the Tender Offers are modified during the 60 day
period to increase the price per share payable in the Tender Offers or in any
other manner permitted by this Agreement, the Tender Offers may be extended
until 10 business days after the day on which the modification is communicated
to the Company's stockholders, (x) if anyone makes a tender offer for either the
Common Stock or the 8% Preferred Stock before the Tender Offers expire, the
Tender Offers may be extended until not more than 10 business days after the
other tender offer expires, (y) if Acquisition is prevented by an order of a
court or other governmental agency from accepting shares which are tendered, the
Tender Offers may be extended until 10 business days after Acquisition is able
to accept shares without violating any order of any court or other governmental
agency and (z) if the Minimum Condition described on Exhibit 2.1-C is not
satisfied during the 60 day period, the Tender Offers may be extended for up to
an additional 60 days to enable the Minimum Condition to be satisfied (and if,
although the Minimum Condition is not satisfied, at least 2,500,000 shares of
Common Stock and at least 35,000 shares of 8% Preferred Stock are properly
tendered and not withdrawn, Acquisition will extend the Tender Offers for at
least an additional 30 days to enable the Minimum Condition to be satisfied).
Acquisition reserves the right to increase the price per share of Common Stock
or per share of 8% Preferred Stock offered in the Tender Offers. If, when the
Tender Offers are scheduled to expire, the Minimum Condition has been satisfied
(assuming no subsequent withdrawals of shares

3
<PAGE>

which have been tendered), but the condition in paragraph (c) of Exhibit 2.1-C
has not been satisfied because of a non-final injunction, Acquisition will
extend the Tender Offers at least until the earliest of (A) the time all the
conditions on Exhibit 2.1-C are satisfied, (B) the time the injunction becomes
final and not appealable or (C) 90 days after the Schedule 14D-1 is filed with
the SEC. Subject to the terms and conditions of the Tender Offers, Acquisition
will accept all shares which are validly tendered in response to the Tender
Offers and not withdrawn and will pay for those shares as soon as practicable
after the Expiration Date.

(d) Within five business days after the public announcement of the
Tender Offers, Acquisition will file with the SEC a Tender Offer Statement on
Schedule 14D-1 with respect to the Tender Offers (together with any amendments
or supplements, the "Schedule 14D-1") including forms of an offer to purchase, a
letter of transmittal and a summary advertisement (the Schedule 14D-1 and the
documents included in it by which the Tender Offers will be made, as they may be
supplemented or amended, being the "Offer Documents"). Each of Acquisition and
the Company agrees promptly to correct any information provided by it for use in
the Offer Documents if and to the extent that information becomes incomplete or
inaccurate in any material respect, and Acquisition will supplement or amend the
Offer Documents to the extent required by applicable securities laws, file the
amended or supplemented Offer Documents with the SEC and, if required,
disseminate the amended Offer Documents to the Company's stockholders. The
Company and its counsel will be given a reasonable opportunity to review the
Offer Documents and all amendments and supplements to them before they are filed
with the SEC or disseminated to the Company's stockholders.

2.2 Company Action. (a) The Company hereby approves of and
consents to the Tender Offers and represents and warrants that its Board of
Directors (the "Board") has (i) determined that this Agreement and the
transactions contemplated by it are fair to and in the best interests of the
Company and its stockholders, (ii) approved this Agreement and the transactions
contemplated by it, including the sales of the Purchased Common Stock, the
Tender Offers and the Merger (described in Paragraph 3.1), and (iii) resolved to
recommend that the Company's stockholders accept the Tender Offers, tender their
shares in response to the Tender Offers, and approve and adopt this Agreement
and the Merger. Simultaneously with the execution of the Original Agreement,
each of the directors and executive officers of the Company agreed to tender his
or her shares of Common Stock and 8% Preferred Stock in response to the Tender
Offers or (in the case of directors and executive officers who might as a result
of their tenders incur liability under Section 16(b) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act") and who do not tender their shares)
to vote their shares in favor of the Merger. Those agreements remain in effect
notwithstanding the changes to the Original Agreement reflected in this
Agreement. Notwithstanding anything contained in this subparagraph (a) or
elsewhere in this Agreement, if the Board, after receiving advice from its
counsel, determines, in good faith, to withdraw, modify or amend the
recommendation, because the failure to do so could reasonably be expected to be
a breach of the directors' fiduciary duties under applicable law, that
withdrawal, modification or amendment will not constitute a breach of this
Agreement.

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(b) The Company will file with the SEC, promptly after Acquisition
files the Schedule 14D-1, a Solicitation/Recommendation Statement on Schedule
14D-9 (together with any amendments or supplements, the "Schedule 14D-9")
containing the recommendations described in subparagraph (a) and will
disseminate the Schedule 14D-9 as required by Rule 14d-9 under the Exchange Act
promptly after the commencement of the Tender Offers and the filing by
Acquisition of the Schedule 14D-1. The Company and Acquisition each agrees to
correct promptly any information provided by it for use in the Schedule 14D-9 if
and to the extent that information becomes incomplete or inaccurate in any
material respect and the Company will file any corrected Schedule 14D-9 with the
SEC and disseminate the corrected Schedule 14D-1 to the Company's stockholders
to the extent required by applicable federal securities laws.

(c) In connection with the Tender Offers, the Company will
promptly furnish Acquisition with mailing labels, security position listings and
any other available listing or computer files containing the names and addresses
of the record holders or beneficial owners of shares of Common Stock or 8%
Preferred Stock (together, "Shares") as of a recent date and the Company will
furnish Acquisition with such additional information and assistance (including,
without limitation, updated lists of stockholders, mailing labels and lists of
securities positions) as Acquisition or its agents may reasonably request in
order to communicate the Tender Offers to the record holders and beneficial
owners of the Common Stock and the 8% Preferred Stock. Subject to the
requirements of applicable law, Acquisition will hold in confidence the
information contained in any such labels, listings or files, and will use that
information only in connection with the Tender Offers and the Merger. If this
Agreement is terminated, Acquisition will return to the Company the originals
and all copies of that information in Acquisition's possession.

ARTICLE III

THE MERGER

3.1 Agreement to Effect Merger. If (a) Acquisition purchases
pursuant to the Tender Offers at least the minimum number of shares of Common
Stock and 8% Preferred Stock (the "Minimum Shares") required to satisfy the
Minimum Condition described on Exhibit 2.1-C (the "Minimum Condition") and (b)
the conditions to the Merger set forth in paragraphs 8.1 and 8.2 are satisfied
or waived, Acquisition will take all steps in its power, including voting all
Shares beneficially owned by it at a meeting of the Company's stockholders in
favor of approval of this Agreement, to cause Acquisition to be merged into the
Company (the "Merger") on the terms and with the effects set forth in Paragraphs
3.2 through 3.8.

3.2 The Merger. If Acquisition purchases at least the Minimum
Shares pursuant to the Tender Offers and the conditions of the Merger set forth
in paragraphs 8.1 and 8.2 are satisfied or waived, at the Effective Time
described in Article IV, Acquisition will be merged into the Company, which will
be the surviving corporation of the Merger (the "Surviving Corporation").
Except as specifically provided in this Agreement, the real and personal
property, other assets, rights, privileges, immunities, powers, purposes and
franchises of the Company will continue unaffected and

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<PAGE>

unimpaired by the Merger. When the Merger becomes effective, the separate
existence of Acquisition will terminate, Acquisition's real and personal
property, other assets, rights, privileges, immunities, powers, purposes and
franchises will be merged into the Surviving Corporation, and the Merger will
have the other effects specified in Section 259 of the Delaware General
Corporation Law (the "DGCL") and Article 5.06 of the Texas Business Corporation
Act (the "TBCA").

3.3 Certificate of Incorporation. From the Effective Time until
subsequently amended, the Articles of Incorporation of the Surviving Corporation
will be in the form of Exhibit 3.3, and those Articles of Incorporation,
separate and apart from this Agreement, may be certified as the Articles of
Incorporation of the Surviving Corporation.

3.4 By-Laws. At the Effective Time, the By-Laws of the Surviving
Corporation will be in the form of Exhibit 3.4, until they are altered, amended
or repealed.

3.5 Directors. The persons listed on Exhibit 3.5 will be the
directors of the Surviving Corporation after the Effective Time and will hold
office in accordance with the By-Laws of the Surviving Corporation for the
respective terms shown on Exhibit 3.5.

3.6 Officers. The persons listed on Exhibit 3.6 will be the
officers of the Surviving Corporation after the Effective Time and will hold
office at the pleasure of the Board of Directors of the Surviving Corporation.

3.7 Stock of the Company. (a) Except as provided in subparagraph
(c), at the Effective Time each share of Common Stock which is outstanding
immediately before the Effective Time will be converted into and become the
right to receive $4.50 in cash, or any higher price per share paid with regard
to shares of Common Stock tendered in response to the Common Stock Tender Offer
(the "Common Stock Merger Price").

(b) Except as provided in subparagraph (c), at the Effective Time
each share of 8% Preferred Stock which is outstanding immediately before the
Effective Time will be converted into and become the right to receive in cash
the per share amount paid with regard to shares of 8% Preferred Stock tendered
in response to the Preferred Stock Tender Offer (except that if a dividend is
paid with regard to the 8% Preferred Stock between the Expiration Date and the
Effective Time, each share of Preferred Stock will be converted into and become
the right to receive $144 in cash without regard to any accrued but unpaid
dividends).

(c) Each share of Common Stock or 8% Preferred Stock held in the
treasury of the Company, and each share of Common Stock or 8% Preferred Stock
held by Acquisition or by any direct or indirect subsidiary of the Company,
immediately before the Effective Time will, at the Effective Time, be cancelled
and cease to exist and no payment will be made with respect to any such shares.

3.8 Stock of Acquisition. At the Effective Time, each share of
common stock, par value $.01 per share, of Acquisition ("Acquisition common
stock") which is outstanding immediately before the Effective Time will be
converted into and become one share of common stock

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<PAGE>

of the Surviving Corporation ("Surviving Corporation Common Stock"). At the
Effective Time, a certificate which represented Acquisition common stock will
automatically become and be a certificate representing the number of shares of
Surviving Corporation Common Stock into which the Acquisition common stock
represented by the certificate was converted.

3.9 Stockholders Meeting. If Acquisition purchases the Minimum
Shares pursuant to the Tender Offers and if approval by the Company's
stockholders is required by applicable law in order to consummate the Merger,
the Company will:

(a) hold a special meeting of its stockholders as soon as
practicable following the Expiration Date for the purpose of adopting this
Agreement and approving the Merger (the "Stockholders Meeting");

(b) as promptly as practicable after the Expiration Date, (i) file
with the SEC a proxy statement (the "Proxy Statement") and other proxy
soliciting materials relating to the Stockholders Meeting, (ii) respond promptly
to any comments made by the SEC with respect to the Proxy Statement or other
proxy soliciting materials, (iii) cause the Proxy Statement to be mailed to its
stockholders at the earliest practicable time following the Expiration Date, and
(iv) in all other respects, use its best efforts to cause its stockholders to
adopt this Agreement and approve the Merger;

(c) include in the Proxy Statement relating to the Stockholders
Meeting the recommendation of the Board that the stockholders of the Company
vote in favor of the adoption of this Agreement, unless the Board, after
receiving advice from its counsel, determines in good faith, that the failure to
amend or withdraw such recommendation could reasonably be expected to be a
breach of the directors' fiduciary duties under applicable law.

3.10 Voting by Acquisition. If Acquisition Purchases at least the
Minimum Shares pursuant to the Tender Offers, or waives the Minimum Condition
and purchases the shares which are properly tendered in response to the Tender
Offers and not withdrawn, (a) Acquisition will not dispose of any of stock of
the Company until the earlier of the Effective Time or such time as this
Agreement is terminated (except to Supercanal or a subsidiary of Supercanal
which agrees to be bound by Paragraph 3.1 and this Paragraph) and (b)
Acquisition will vote all shares of Common Stock and 8% Preferred Stock which
Acquisition owns or otherwise has the power to vote in favor of the adoption of
this Agreement and approval of the Merger.

3.11 Dissenting Shares.(a) Notwithstanding any provision of this
Agreement to the contrary, Shares that are outstanding immediately prior to the
Effective Time which are held by stockholders who have complied with Article
5.12 of the TBCA (including filing a written objection to approval of the
Merger, not having voted in favor of the Merger or consented to it in writing
and having properly demanded payment of the fair value of those shares) will not
be converted into the right to receive the consideration described in Paragraph
3.2. Instead, if the Merger takes place,

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<PAGE>

the Surviving Corporation will pay the holders of those shares the fair value of
the shares determined as provided in Article 5.12 of the TBCA. Shares held by
stockholders who fail to perfect, or who otherwise withdraw or lose their rights
to receive the fair value of their shares determined under Article 5.12 of the
TBCA will, at the later of the Effective Time or the time they fail to perfect,
withdraw or lose, their rights to receive the fair value of their shares, be
deemed to have been converted into the right to receive the per share sum
described in Paragraph 3.7 (the "Merger Price") without any interest.

(b) The Company will promptly give Acquisition (i) notice of any
demands for appraisal received by the Company, any withdrawals of any such
demands, and any other instruments served pursuant to Article 5.12 of the TBCA
which are received by the Company and (ii) the opportunity to direct all
negotiations and proceedings with respect to demands for appraisal under the
TBCA. The Company will not, except with the prior written consent of
Acquisition, make any payment with respect to any demands for payment of the
fair value of shares or offer to settle or settle any such demand.

3.12 Payment for Shares. (a) Prior to the Effective Time,
Acquisition will designate a bank or trust company to act as Paying Agent in
connection with the Merger (the "Paying Agent"). At, or immediately prior to,
the Effective Time, Acquisition will provide the Paying Agent with the funds
necessary to make the payments contemplated by Paragraph 3.7. Until used for
that purpose, the funds will be invested by the Paying Agent, as directed by
Acquisition, in obligations of or guaranteed by the United States of America or
of any agency thereof and backed by the full faith and credit of the United
States of America, in commercial paper obligations rated A-1 or P-1 or better by
Moody's Investors Services Inc. or Standard & Poors' Corporation, respectively,
or in deposit accounts, certificates of deposit or banker's acceptances of,
repurchase or reverse repurchase agreements with, or Eurodollar time deposits
purchased from, commercial banks with capital, surplus and undivided profits
aggregating in excess of $200 million (based on the most recent financial
statements of such bank which are then publicly available at the SEC or
otherwise).

(b) Promptly after the Effective Time, the Surviving Corporation
will cause the Paying Agent to mail to each person who was a record holder of
Common Stock or 8% Preferred Stock at the Effective Time, a form of letter of
transmittal for use in effecting the surrender of stock certificates
representing Common Stock or 8% Preferred Stock ("Certificates") in order to
receive payment of the Merger Price. Upon surrender to the Paying Agent of a
Certificate, together with a properly completed and executed letter of
transmittal and any other required documents, the Paying Agent will pay to the
holder of the Certificate the Merger Price with regard to the shares represented
by the Certificate, and the Certificate will be cancelled. No interest will be
paid or accrued on the cash payable upon the surrender of Certificates. If
payment is to be made to a person other than the person in whose name a
surrendered Certificate is registered, the surrendered Certificate must be
properly endorsed or otherwise be in proper form for transfer, and the person
who surrenders the Certificate must provide funds for payment of any transfer or
other taxes required by reason of the

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<PAGE>

payment to a person other than the registered holder of the surrendered
Certificate or establish to the satisfaction of the Surviving Corporation that
the tax has been paid. After the Effective Time, a Certificate which has not
been surrendered will represent only the right to receive the Merger Price,
without any interest.

(c) At any time which is more than six months after the Effective
Time, the Surviving Corporation may require the Paying Agent to deliver to it
any funds which had been made available to the Paying Agent and have not been
disbursed to holders of Shares (including, without limitation, interest and
other income received by the Paying Agent in respect of the funds made available
to it), and after the funds have been delivered to the Surviving Corporation,
former stockholders of the Company must look to the Surviving Corporation for
the consideration to which they are entitled under Paragraph 3.7 upon surrender
of the Certificates held by them. Neither the Surviving Corporation nor the
Paying Agent will be liable to any former stockholder of the Company for any
Merger consideration which is delivered to a public official pursuant to any
abandoned property, escheat or similar law.

(d) After the Effective Time, no transfers of shares of Common
Stock or 8% Preferred Stock will be recorded on the stock transfer books of the
Company or the Surviving Corporation, and the stock ledger of the Company will
be closed. If, after the Effective Time, Certificates are presented for
transfer, they will be cancelled and treated as having been surrendered for the
Merger consideration.

3.13 Options and Warrants. To the extent that the Company has not
fulfilled prior to the Effective Time all the Company's obligations under all
options and warrants which are outstanding at the date of this Agreement, taking
account of changes in the options and warrants described in Paragraph 7.7(a),
the Surviving Corporation will fulfill those obligations. To the extent the
Surviving Corporation is required to pay cash due to exercise of an option or
warrant after the Effective Time, instead of requiring the exercising holder to
pay the exercise price, upon receiving a notice of exercise, the Surviving
Corporation will pay the holder the amount due on exercise minus the exercise
price.

ARTICLE IV

EFFECTIVE TIME OF MERGER

4.1 Date of the Merger. The day on which the Merger is to take
place (the "Merger Date") will be the third business day after the first day on
which all the conditions in Paragraphs 8.1(d) and (e) and 8.2(d) have been
satisfied or waived. The Merger Date may be changed with the consent of the
Company and Acquisition. For the purposes of this Paragraph, a "business day"
is a day on which certificates of merger may be filed with the Secretaries of
State of both Texas and Delaware.

4.2 Execution of Certificates of Merger. Not later than 3:00 P.M.
on the day before the Merger Date, (a) Acquisition

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<PAGE>

and the Company will each execute certificates of merger (the "Certificates of
Merger") substantially in the form of Exhibits 4.2(1) and 4.2(2) and deliver
them to Rogers & Wells for filing with the Secretaries of State of Texas and
Delaware. Rogers & Wells will be instructed that, if it is notified on the
Merger Date that all the conditions in Article VIII have been fulfilled or
waived, it is to cause the applicable Certificate of Merger to be filed with the
Secretary of State of Texas and to cause the applicable Certificate of Merger to
be filed with the Secretary of State of Delaware on the Merger Date or as soon
after that date as is practicable.

4.3 Effective Time of the Merger. The Merger will become
effective at 11:59 P.M. on the day when a Certificate of Merger has been filed
with the Secretary of State of Texas and a Certificate of Merger has been filed
with the Secretary of State of Delaware (that being the "Effective Time").

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company represents and warrants to Acquisition and to Supercanal
(to induce Supercanal to execute the Guaranty attached to this Agreement) that,
except as set forth in the written disclosure schedule delivered by the Company
to Acquisition (the "Company Disclosure Schedule"):

5.1 Organization and Qualification; Subsidiaries. Each of the
Company and each of its subsidiaries is a corporation, partnership, sociedad
anonima, limited liability company or sociedad de responsabilidad limitada duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation and has the requisite power and authority and
is in possession of, and in compliance with, all franchises, grants,
authorizations, licenses, permits, easements, variances, consents, certificates,
approvals, exemptions and orders ("Approvals") necessary to enable it to own,
lease and operate the properties it purports to own, lease or operate and to
carry on its business as it is now being conducted and as proposed to be
conducted, except where the failure to have such Approvals could not reasonably
be expected to have a Material Adverse Effect on the Company. Each of the
Company and each of its subsidiaries is duly qualified or licensed as a foreign
corporation to do business, and is in good standing, in each jurisdiction where
the character of the properties owned, leased or operated by it or the nature of
its activities makes such qualification or licensing necessary, except for such
failures to be so duly qualified or licensed and in good standing that could not
reasonably be expected to have a Material Adverse Effect on the Company. A true
and complete list of all of the Company's subsidiaries, together with the
jurisdiction of incorporation of each subsidiary and the percentage of each
subsidiary's outstanding capital stock owned by the Company or another
subsidiary is set forth in the Company Disclosure Schedule. Except as set forth
in the Company Disclosure Schedule and except for interests in subsidiaries of
the Company, neither the Company nor any of its subsidiaries owns, directly or
indirectly, any interest or investment (whether equity or debt) in any
corporation, partnership,

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<PAGE>

limited liability company, joint venture, business, trust or entity. For the
purposes of this Agreement, a "Material Adverse Effect" upon a company is a
material adverse change in the financial condition, operating results, business
or prospects of that company and its subsidiaries taken together.

5.2 Certificate of Incorporation and By-Laws. The Company has
heretofore furnished to Acquisition or Supercanal a complete and correct copy of
its Articles of Incorporation and By-Laws, and has furnished or made available
to Acquisition or Supercanal the Articles of Incorporation and By-Laws (or
equivalent organizational documents) of each of its subsidiaries (the
"Subsidiary Documents"). Those Articles of Incorporation, By-Laws and
Subsidiary Documents are listed on the Company Disclosure Schedule, are in full
force and effect and have not been amended. Except as disclosed in the Company
Disclosure Schedule, neither the Company nor any of its subsidiaries is in
violation of any of the provisions of its Articles of Incorporation or By-Laws
or Subsidiary Documents.

5.3 Capitalization. The authorized capital stock of the Company
consists of 50,000,000 shares of Common Stock and 5,000,000 shares of Preferred
stock, of which 704,684 shares have been designated 1990 10% Preferred Stock
("10% Preferred Stock") and 200,000 shares have been designated 8% Preferred
Stock. As of August 15, 1997, 13,189,785 shares of Company Common Stock,
693,864 shares of 10% Preferred Stock, and 139,250 shares of 8% Preferred Stock
were issued and outstanding, all of which were duly authorized, validly issued,
fully paid and non-assessable, and no shares of capital stock were held in
treasury or held by subsidiaries of the Company. The Company Disclosure
Schedule sets forth each beneficial owner (as that term is defined for purposes
of the Exchange Act) of 5% or more of any class of capital stock of the Company
known to the Company and Section 5.3 of the Company Disclosure Schedule contains
a true and complete list of all affiliates of the Company (as defined in Rule
405 under the Securities Act). Except as set forth in the Company Disclosure
Schedule, there are no options, warrants 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 or obligating the
Company or any of its subsidiaries to issue, sell or transfer (currently or upon
the passage of time, the payment of money or the occurrence of any other event)
any shares of capital stock of, or other equity interests in, the Company or any
of its subsidiaries. All shares of Common Stock which the Company is or may
become obligated to issue (including, but not limited to, the Purchased Common
Stock will be, when they are issued, duly authorized, validly issued, fully paid
and nonassessable. The Company Disclosure Schedule sets forth an accurate and
complete list of (a) each optionee under the Employee Options and the number of
shares of Common Stock issuable upon exercise of those Employee Options and (b)
each holder of record of warrants to purchase stock of the Company ("Company
Warrants"), and the number of shares of Common Stock issuable upon exercise of
the Company Warrants held by each holder. Other than the Employee Options and
Company Warrants there are no obligations contingent or otherwise, of the
Company or any of its subsidiaries to repurchase, redeem or otherwise acquire
any shares of capital stock of the Company or any of its subsidiaries or to
provide funds to or make any investment (in the form of a loan, capital
contribution or otherwise) in any subsidiary or any other entity. Except as set
forth in the

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Company Disclosure Schedule, all of the outstanding shares of capital stock of
each of the Company's subsidiaries are duly authorized, validly issued, fully
paid and nonassessable, and all those shares are owned by the Company or another
subsidiary free and clear of all security interests, liens, claims, pledges,
agreements, limitations on the Company's voting rights, charges or other
encumbrances of any nature whatsoever. There are no preemptive rights with
respect to any capital stock of the Company or any capital stock of any of its
subsidiaries or any agreements, arrangements or understandings to grant
preemptive rights with respect thereto. When issued and sold as provided in
this Agreement, the Purchased Common Stock will be duly authorized, validly
issued, fully paid and nonassessable and free from any claims (including claims
to preemptive rights) of any persons.

5.4 Authority Relative to this Agreement. The Company has all
necessary corporate power and authority to execute and deliver this Agreement
and to perform its obligations hereunder and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement by the
Company and the consummation by the Company of the transactions contemplated
hereby have been duly and validly authorized by all necessary corporate action
(including approval by the Company's Board of Directors which satisfies the
requirement of Article 13.03(1) of the TBCA), and no other corporate proceedings
on the part of the Company are necessary to authorize this Agreement or to
consummate the transactions so contemplated (other than approval of the Merger
Agreement by the Company's stockholders). This Agreement has been duly and
validly executed and delivered by the Company and, assuming the due
authorization, execution and delivery of this Agreement by Acquisition and due
authorization, execution and delivery of the Guaranty by Supercanal, constitutes
a legal, valid and binding obligation of the Company enforceable against the
Company in accordance with its terms, except as the enforceability thereof may
be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium or other laws relating to the enforcement of creditors' rights
generally and by general principles of equity.

5.5 No Conflict; Required Filings and Consents. (a) Except as set
forth in the Company Disclosure Schedule, the execution and delivery of this
Agreement by the Company does not, and the performance of this Agreement by the
Company will not, (i) conflict with or violate the Certificate of Incorporation
or By-Laws of the Company or any of the Subsidiary Documents, (ii) conflict with
or violate any law, rule, regulation, order, judgment or decree applicable to
the Company or any of its subsidiaries or by which its or any of their
respective properties is bound or affected, or (iii) result in any breach of or
constitute a default (or an event that with notice or lapse of time or both
would become a default) under, or impair the Company's or any of its
subsidiaries' rights or alter the rights or obligations of any third party
under, or give to others any rights of termination, amendment, acceleration or
cancellation of, or result in the creation of a lien or encumbrance on any of
the properties or assets of the Company or any of its subsidiaries pursuant to,
any note, bond, mortgage, indenture, contract, agreement, lease, license,
permit, franchise or other instrument or obligation to which the Company or any
of its subsidiaries is a party or by which the Company or any of its
subsidiaries or its or any of their respective properties is bound or affected.

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<PAGE>

(b) Except as disclosed in the Company Disclosure Schedule, the
execution and delivery of this Agreement by the Company does not, and the
performance of this Agreement by the Company will not, require any consent,
approval, authorization or permit of, or filing with or notification to, any
governmental or regulatory authority in the United States, the Republic of
Argentina ("Argentina") or elsewhere (a "Governmental Entity"), except for (i)
applicable requirements with respect to the Proxy Statement under the Exchange
Act, and the rules and regulations thereunder, (ii) the filing and recordation
of appropriate merger or other documents, including, without limitation, the
filing of a final franchise tax return with the Texas State Comptroller's
Office, as required by the DGCL and the TBCA, (iii) applicable filing and
waiting period requirements under the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended (the "HSR Act"), and (iv) such filings, authorizations,
orders and approvals (the "Comfer Approvals") as may be required under Argentine
Law No. 22,285 passed on September 15, 1980, as amended by Decree 286, passed on
February 18, 1991 (the "Broadcasting Law") from the Comite Federal de
Radiodifusion ("Comfer"), the Argentine Governmental Entity responsible for
administering the Broadcasting Law, and with and of provincial and local
governmental authorities, including provincial and local Governmental Entities
granting franchises to operate cable systems (the "Local Approvals"). The
filing required to have been made by the Company under the HSR Act has been made
and the waiting periods under the HSR Act have been terminated.

5.6 Compliance. Except as disclosed in the Company Disclosure
Schedule, neither the Company nor any of its subsidiaries is in conflict with,
or in default or violation of, (i) any law, rule, regulation, order, judgment or
decree applicable to the Company or any of its subsidiaries or by which its or
any of their respective properties is bound or affected, or (ii) any agreement
or other obligation to which the Company or any of its subsidiaries is a party
or by which the Company or any of its subsidiaries or its or any of their
respective properties is bound or affected, except in the case of both clauses
(i) and (ii) for any conflicts, defaults or violations which could not
reasonably be expected to have individually or in the aggregate a Material
Adverse Effect on the Company.

5.7 SEC Reports; Financial Statements. (a) The Company has filed
all reports and documents required to be filed with the SEC and has heretofore
delivered to Acquisition or Supercanal, in the form filed with the SEC, (i) its
Annual Report on Form 10-KSB for the fiscal year ended March 31, 1997, (ii) its
Quarterly Reports on Form 10-Q for the period ended September 30, 1997, (iii)
all other reports or registration statements filed by the Company with the SEC
since March 31, 1997, and (iv) all amendments and supplements to all such
reports and registration statements filed by the Company with the SEC (the
documents described in clauses (i)-(iv) being collectively, the "SEC Reports").
Each of the SEC Reports (i) was prepared in accordance with the requirements of
the Exchange Act, and (ii) did not at the time it was filed (or if it was
amended or superseded by a subsequent filing, then on the date of such
subsequent filing) 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 the light of the circumstances under which they
were made, not misleading.

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(b) Each of the financial statements (including, in each case, any
related notes thereto) contained in the SEC Reports has been prepared in
accordance with generally accepted accounting principles in the United States
("US GAAP") applied on a consistent basis throughout the periods involved
(except as may be indicated in the notes to the financial statements) and each
of them fairly presents in all material respects the consolidated financial
position of the Company and its subsidiaries as at the respective dates of the
financial statements and the consolidated results of its operations and cash
flows for the periods indicated, except that the unaudited interim financial
statements were or are subject to normal, recurring year-end adjustments.

5.8 Absence of Certain Changes or Events. Except as set forth in
the Company Disclosure Schedule or as expressly contemplated by this Agreement,
since June 30, 1997 each of the Company and its subsidiaries has conducted its
business in the ordinary course and there has not occurred: (a) any events or
occurrences which, individually or in the aggregate, have had a Material Adverse
Effect on the Company; (b) any material damage to, destruction or loss of any
material asset of the Company or any of its subsidiaries (whether or not covered
by insurance); (c) any change by the Company or any of its subsidiaries in its
accounting policies, practices or methods; (d) any material revaluation by the
Company or any of its subsidiaries of any of its assets, including without
limitation, writing down the value of inventory or writing off notes or accounts
receivable other than in the ordinary course of business in amounts consistent
with prior periods; (e) any sale of a material amount of property or assets; (f)
any declaration, setting aside or, except as required by the terms of the 8%
Preferred Stock or the 10% Preferred Stock as in effect on the date hereof,
payment of any dividend or distribution in respect of any stock of the Company
or any redemption, purchase or other acquisition of its securities by the
Company or an of its Subsidiaries; or (g) any entering into, establishment or
amendment of, any Plan (as hereinafter defined), any granting of stock options,
stock appreciation rights, performance awards or restricted awards, or any other
increase (other than ordinary course increases) in compensation payable or to
become payable to any officers or key employees of the Company or any of its
subsidiaries.

5.9 No Undisclosed Liabilities. Except as set forth in the
Company Disclosure Schedule, neither the Company nor any of its subsidiaries has
any material liabilities (absolute, accrued, contingent or otherwise) except
liabilities (a) in the aggregate adequately provided for in the Company's
audited balance sheet (including any related notes thereto) as of March 31, 1997
(the "1997 Balance Sheet") or the Company's unaudited interim balance sheet
(including any related notes thereto) as of September 30, 1997 (the "Interim
Balance Sheet"), included in the SEC Reports, (b) incurred in the ordinary
course of business and not required under US GAAP to be reflected on the 1997
Balance Sheet, (c) incurred since September 30, 1997 in the ordinary course of
business and not in violation of any provision of this Agreement, or (d)
incurred in connection with this Agreement.

5.10 Absence of Litigation. Except as set forth in the Company
Disclosure Schedule, there are no claims, actions, suits, proceedings or
investigations pending or, to the knowledge of the Company, threatened against
the Company or any of its subsidiaries, or any properties

14
<PAGE>

or rights of the Company or any of its subsidiaries, before any court,
arbitrator or administrative, governmental or regulatory authority or body,
domestic or foreign, that could reasonably be expected to have a Material
Adverse Effect on the Company.

5.11 Benefit Plans. All Company Benefit Plans are listed in the
Company Disclosure Schedule, and copies of all documentation relating to such
Company Benefit Plans have been delivered or made available to Parent. Except
as disclosed in the Company Disclosure Schedule: (a) each Company Benefit Plan
and the administration thereof complies, and has at all times complied in all
material respects with the requirements of all applicable law, including ERISA
and the Code; (b) no Company Benefit Plan is intended to qualify under Section
401(a) of the Code; (c) neither the Company nor any of its subsidiaries is now,
nor at any time has been, a member of a controlled group, as defined in Section
412(n)(6)(B) of the Code, with any other enterprise; (d) neither the Company nor
any of its subsidiaries presently maintains or contributes to, nor at any time
has maintained or contributed to, any single-employer plan (within the meaning
of Section 3(41) of ERISA) or any multi-employer plan (within the meaning of
Section 3(37) of ERISA) subject to Title IV of ERISA, and there are no
circumstances pursuant to which the Company or any of its subsidiaries could
have liability to any party under Title IV of ERISA; (e) neither the Company nor
any of its subsidiaries has incurred any liability for any tax imposed under
Sections 4971 through 4980B of the Code or civil liability under Section 502(i)
or (1) of ERISA; (f) no Company Benefit Plan provides health or death benefit
coverage beyond the termination of an employee's employment, except as required
by Part 6-of Subtitle B of Title I of ERISA or Section 4980B of the Code; (g) no
suits, actions or other litigation (excluding claims for benefits incurred in
the ordinary course of plan activities) have been brought against or with
respect to any Company Benefit Plan; and (h) all contributions to Company
Benefit Plans required to be made under such Company Benefit Plans have been
made, and all benefits accrued under any unfunded Company Benefit Plan have been
paid, accrued or otherwise adequately reserved in accordance with US GAAP as of
such date and the Company and each of its subsidiaries has performed all
material obligations required to be performed by it under all Company Benefit
Plans.

As used in this Agreement:

"Code" means the Internal Revenue Code of 1986, as amended, and the
regulations promulgated thereunder.

"Company Benefit Plan" means any Plan established by the Company, any
subsidiary of the Company or any predecessor or affiliate of the Company or of
any subsidiary of the Company, existing on the date hereof or prior thereto, to
which the Company or any subsidiary of the Company contributes or has
contributed, or under which any employee, former employee or director of the
Company or any subsidiary of the Company or any beneficiary thereof is covered,
is eligible for coverage or has benefit rights.

"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and the rules and regulations promulgated thereunder.

<PAGE>

"Plan" means any bonus, incentive compensation, deferred compensation,
pension, profit sharing, retirement, stock purchase, stock option, stock
ownership, stock appreciation rights, phantom stock, leave of absence, layoff,
vacation, day or dependent care, legal services, cafeteria, life, health,
accident, disability, workmen's compensation or other insurance, severance,
separation or other employee benefit plan, practice, policy or arrangement of
any kind, whether written or oral, whether for the benefit of a single
individual or more than one individual, including, but not limited to, any
"employee benefit plan" within the meaning of Section 3(3) of ERISA.

5.12 Transactions with Certain Persons. Except as set forth in the
Company Disclosure Schedule or disclosed in a SEC Report, no officer, director
or employee of the Company or any of its subsidiaries nor any member of any such
person's immediate family is presently, or within the past two years has been, a
party to any transaction with the Company or any of its subsidiaries where the
fair market value of the amount involved in such transaction exceeded US$60,000,
including without limitation, any contract, agreement, loan or other arrangement
(a) providing for the furnishing of services by, (b) providing for the rental of
real or personal property from, or (c) otherwise requiring payments to (other
than for services as officers, directors or employees of the Company or any of
its subsidiaries) any such person or corporation, partnership, trust or other
entity in which any such person has a material interest as a stockholder, or as
an officer, director, trustee or partner.

5.13 Labor Matters. Except as set forth in the Company Disclosure
Schedule, (a) there are no controversies pending or, to the knowledge of the
Company or any of its subsidiaries, threatened, between the Company or any of
its subsidiaries and any of their respective employees, which controversies have
or could reasonably be expected to have a Material Adverse Effect on the
Company; (b) neither the Company nor any of its subsidiaries is a party to any
collective bargaining agreement or other labor union contract applicable to
persons employed by the Company or its subsidiaries, nor does the Company or any
of its subsidiaries know of any activities or proceedings of any labor union to
organize any such employees; and (c) neither the Company nor any of its
subsidiaries has during the past five years been subject to any strikes,
slowdowns, work stoppages, lockouts, or threats thereof, by or with respect to
any employees of the Company or any of its subsidiaries, and to the knowledge of
the Company none are threatened; which strikes, slowdowns, work stoppages or
lockouts have had or could reasonably be expected to have a Material Adverse
Effect on the Company.

5.14 Proxy Statement/Prospectus. If prior to the Effective Time,
the Company supplies any information for inclusion in a Registration Statement
of Supercanal on Form F-1 (a "Registration Statement"), that information will
not at the time the Registration Statement (including amendments thereof or
supplements thereto) is declared effective by the SEC 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 the
light of the circumstances under which they were made, not misleading.

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<PAGE>

5.15 Restrictions on Business Activities. Except for this
Agreement or as set forth in the Company Disclosure Schedule, there is no
agreement, judgment, injunction, order or decree binding upon the Company or any
of its subsidiaries which has or could reasonably be expected to have the effect
of prohibiting or impairing any business practice of the Company or any of its
subsidiaries, any material acquisition of property by the Company or any of its
subsidiaries or the conduct of business by the Company or any of its
subsidiaries as currently conducted or as proposed to be conducted by the
Company.

5.16 Title to Property. Except as set forth in the Company
Disclosure Schedule, the Company and each of its subsidiaries have good and
marketable title to all of their material properties and assets, free and clear
of all liens, charges and encumbrances, except liens for taxes not yet due and
payable and such liens or other imperfections of title, if any, as do not
materially detract from the value of or materially interfere with the present or
currently contemplated use of the property affected thereby; and all leases
pursuant to which the Company or any of its subsidiaries lease from others
material real or personal property are valid and enforceable in accordance with
their respective terms, and there is no material default or event of default by
the Company or a subsidiary of the Company, nor to the knowledge of the Company,
by any other party thereto, under any of such leases, (or event which with
notice or lapse of time, or both, would constitute a default).

5.17 CATV Systems, Subscribers. Set forth in the Company
Disclosure Schedule, is a complete list of the cable television ("CATV") systems
owned and/or operated by the Company or any subsidiary thereof ("Company CATV
Systems") as of the date hereof and the number of equity subscribers and total
subscribers in each of such Company CATV Systems as of June 30, 1997, as well as
the following information for each Company CATV System as of June 30, 1997, (i)
the approximate number of route kilometers of cable plant which are fully
completed and operational; (ii) the estimated number of households passed; (iii)
the capacity of cable plant; (iv) a description of all services provided; and
(v) the rates charged for such services.

5.18 Franchises, Licenses, Permits, etc.. Set forth in the Company
Disclosure Schedule, is a complete list and brief description of all
authorizations, approvals, certifications, licenses and permits issued by Comfer
(the "Company Comfer Authorizations") to the Company or any subsidiary thereof
as of the date hereof and all applications by the Company or any subsidiary
thereof for any Company Comfer Authorizations which are pending on the date
hereof. The Company and its subsidiaries (A) have all Company Comfer
Authorizations and other authorizations, approvals, franchises, licenses and
permits of Argentine provincial Governmental Entities (the "Company Other
Authorizations") required for the operation of the Company CATV Systems being
operated on the date hereof, (B) have duly and currently filed all reports and
other information required by Comfer or any other Governmental Entity to be
filed in connection with such Company Comfer Authorizations and Company Other
Authorizations and (C) are not in violation of any Company Comfer Authorization
or Company Other Authorization, other than the lack of Company Comfer
Authorizations or Company

17
<PAGE>

Other Authorizations, delays in filing reports or violations which, insofar as
can reasonably be foreseen, would not have a material adverse effect on the CATV
business conducted by the Company and its subsidiaries taken as a whole.

5.19 Taxes. (a) For purposes of this Agreement, "Tax" or "Taxes"
shall mean taxes, fees, levies, duties, tariffs, imposts and governmental
impositions or charges of any kind in the nature of (or similar to) taxes,
payable to any federal, state, local or foreign taxing authority, including
(without limitation) income, franchise, profits, gross receipts, ad valorem, net
worth, value added, sales, use, service, real or personal property, special
assessments, capital stock, license, payroll, withholding social security,
workers' compensation, unemployment compensation, utility, severance,
production, excise, stamp, occupation, premiums, windfall profits, transfer and
gains taxes, and other taxes, duties or assessments of any nature whatsoever,
and interest, penalties, additional taxes and additions to tax imposed with
respect thereto; and "Tax Returns" shall mean returns, reports and information
statements with respect to Taxes required to be filed with the Internal Revenue
Service (the "IRS") or any other Taxing Authority, domestic or foreign,
including, without limitation, consolidated, combined and unitary tax returns;
and "Taxing Authority" means any governmental agency, board, bureau, body,
department or authority of any United States federal, state or local
jurisdiction or any foreign jurisdiction, having or purporting to exercise
jurisdiction with respect to any Tax.

(b) Except as set forth in the Company Disclosure Schedule:

(i) All Tax Returns required to have been filed by or with
respect to the Company or any of its subsidiaries or any affiliated, combined,
consolidated, unitary or similar group of which the Company or any subsidiary is
or was a member (a "Relevant Group") with any Taxing Authority have been duly
filed, and each such Tax Return filed by the Company correctly and completely
reflects the income, franchise or other Tax liability and all other information
required to be reported thereon. All Taxes owed by the Company or any of its
subsidiaries or any member of a Relevant Group (whether or not shown on any Tax
Return) have been paid or, in the case of Taxes attributable to the Company and
its subsidiaries, are duly provided for in the financial statements included in
the SEC Reports.

(ii) The provisions for Taxes due by the Company and its
subsidiaries (as opposed to any reserve for deferred Taxes established to
reflect timing differences between book and Tax income) in the financial
statements included in the SEC Reports, are sufficient for all unpaid Taxes,
whether or not disputed, of the Company and its subsidiaries. As of the
Effective Time, such provisions as adjusted for the passage of time through the
Effective Time, will be sufficient for the then-unpaid Taxes of the Company and
its subsidiaries.

(iii) Neither the Company nor any of its subsidiaries is a
party to any current agreement extending the time within which to file any Tax
Return. No claim has ever been made by any taxing authority in a jurisdiction
in which the Company or its subsidiaries does not file Tax Returns that it is or
may be subject to taxation by that jurisdiction.

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<PAGE>

(iv) The Company and each of its subsidiaries has withheld and
paid all Taxes required to have been withheld and paid in connection with
amounts paid or owing to any employee, creditor, independent contractor or other
third party.

(v) The Company does not expect any Taxing Authority to
assess any additional Taxes against or in respect of it or any of its
subsidiaries for any past period. There is no dispute or claim concerning any
Tax liability of the Company or any of its subsidiaries either (i) claimed or
raised by any Taxing Authority or (ii) otherwise known to the Company or any of
its subsidiaries. No issues have been raised in any examination by any Taxing
Authority with respect to the Company or any of its subsidiaries which, by
application of similar principles, reasonably could be expected to result in a
proposed deficiency for any other period not so examined. The Company
Disclosure Schedule lists all federal, state, local and foreign income Tax
Returns filed by or with respect to the Company or any of its subsidiaries for
all taxable periods ended on or after March 31, 1992, indicates those Tax
Returns, if any, that have been audited, and indicates those Tax Returns that
currently are the subject of audit. The Company has delivered to Parent
complete and correct copies of all federal, state, local and foreign income Tax
Returns filed by, and all Tax examination reports and statements of deficiencies
assessed against or agreed to by, the Company or any of its subsidiaries since
1992.

(vi) Neither the Company nor any of its subsidiaries has
waived any statute of limitations in respect of Taxes or agreed to any extension
of time with respect to any Tax assessment or deficiency.

(vii) Neither the Company nor any of its subsidiaries has made
any payments, is obligated to make any payments, or is a party to any agreement
that under certain circumstances could require it to make any payments, that are
not deductible under Section 28OG of the Code.

(viii) Neither the Company nor any of its subsidiaries is a
party to any Tax allocation or sharing agreement.

(ix) Neither the Company nor any of its subsidiaries is, or at
any time has been, a "United States real property holding corporation" within
the meaning of Section 897(c)(2) of the Code.

(x) None of the assets of the Company or any of its
subsidiaries constitutes tax-exempt bond financed property or tax-exempt use
property, within the meaning of Section 168 of the Code. Neither the Company
nor any of its subsidiaries is a party to any "safe harbor lease" that is
subject to the provisions of Section 168(f)(8) of the Internal Revenue Code as
in effect prior to the Tax Reform Act of 1986, or to any "long-term contract"
within the meaning of Section 460 of the Code.

(xi) Neither the Company nor any of its subsidiaries is a
"consenting corporation" within the meaning of Section 341(f)(1) of the Code, or
comparable provisions of any state statutes, and none of the assets of the
Company or any of its subsidiaries is subject to an election under Section 341
(f) of the Code or comparable provisions of any state statutes.

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<PAGE>

(xii) Neither the Company nor any of its subsidiaries is a
party to any joint venture, partnership or other arrangement that is treated as
a partnership for federal income Tax purposes.

(xiii) There are no accounting method changes, or proposed or
threatened accounting method changes, of the Company or any of its subsidiaries
that could give rise to an adjustment under Section 481 of the Code for periods
after the Closing Date.

(xiv) Neither the Company nor any of its subsidiaries has
received any written ruling of a Taxing Authority related to Taxes or entered
into any written and legally binding agreement with a Taxing Authority relating
to Taxes.

(xv) Each of the Company and its subsidiaries has disclosed
(in accordance with Section 6662(d)(2)(B)(ii) of the Code) on its federal income
Tax Returns all positions taken on those Tax Returns for which there was no
substantial authority within the meaning of Section 6662(d)(2)(B)(i) of the Code
and that could give rise to a substantial understatement of federal income tax
within the meaning of Section 6662(d) of the Code.

(xvi) Neither the Company nor any of its subsidiaries has any
liability for Taxes of any Person other than the Company or its subsidiaries (w)
under Section 1.1502-6 of the Treasury regulations (or any similar provision of
state, local or foreign law), (x) as a transferee or successor, (y) by contract
or (z) otherwise.

(xvii) Neither the Company nor any of its subsidiaries has
participated in or cooperated with an international boycott within the meaning
of Section 999 of the Code.

(xviii) No foreign subsidiary of the Company has, or at any time
has had, an investment in "United States property" within the meaning of Section
956(b) of the Code.

(xix) No foreign subsidiary of the Company has, or at any time
has had, a material amount that is includible in the income of a United States
person under Section 951 of the Code.

(xx) No foreign subsidiary of the Company is, or at any time
has been, a passive foreign investment company within the meaning of Section
1296 of the Code, and neither the company nor any of its subsidiaries is a
shareholder, directly or indirectly, in a passive foreign investment company.

(xxi) No foreign subsidiary of the Company is, or at any time
has been, engaged in the conduct of a trade or business within the United States
within the meaning of Section 864(b) and Section 882(a) of the Code, or treated
as or considered to be so engaged under Section 882(d) or Section 897 of the
Code or otherwise.

(xxii) No foreign subsidiary of the Company holds, or at any
time has held, a United States real property interest

20
<PAGE>

within the meaning of Section 897(c)(1) of the Code.

(xxiii) Neither the Company nor any of its subsidiaries is, or at
any time has been, subject to (x) the dual consolidated loss provisions of
Section 1503(d) of the Code, (y) the overall foreign loss provisions of Section
904(f) of the Code or (z) the recharacterization provisions of Section 952(c)(2)
of the Code.

(xxiv) There currently are no limitations on the utilization of
the net operating losses, built-in losses, capital losses, tax credits or other
similar items of the Company or any subsidiary of the Company (collectively, the
"Losses") under (t) Section 382 of the Code, (u) Section 383 of the Code, (v)
Section 384 of the Code, (w) Section 269 of the Code, (x) Section 1.1502-21T and
Section 1.1502-15A of the Treasury regulations, (y) Section 1.1502-21T and
Section 1.1 502-21A of the Treasury regulations or (z) Section 1.1502-91T
through 1.1502-99T of the Treasury regulations.

(xxv) At March 31, 1997, the Company and its subsidiaries had
the aggregate Tax Losses for federal income Tax purposes as set forth in Section
5.19(b)(xxv) of the Company Disclosure Statement.

5.20 Environmental Matters. Except as set forth in the Company
Disclosure Schedule, the Company and each of its subsidiaries (a) have obtained
all applicable permits, licenses and other authorizations which are required to
be obtained under all applicable laws or any regulation, code, plan, order,
decree, judgment, notice or determination letter issued, entered, promulgated or
approved thereunder relating to pollution or protection of the environment,
including laws relating to emissions, discharges, releases or threatened
releases of pollutants, contaminants, or hazardous or toxic wastes into ambient
air, surface water, ground water, or land or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport, or handling of pollutants, contaminants or hazardous or toxic
materials or wastes ("Environmental Laws") by the Company or its subsidiaries
(or their respective agents); (b) are in compliance with all terms and
conditions of such required permits, licenses and authorizations, and also are
in compliance with all other limitations, restrictions, conditions, standards,
prohibitions, requirements, obligations, schedules and timetables contained in
applicable Environmental Laws; (c) are not aware of and have not received notice
of any past or present violations of Environmental Laws or any event, condition,
circumstance, activity, practice, incident, action or plan which is reasonably
likely to interfere with or prevent continued compliance with or which could
give rise to any common law or statutory liability, or otherwise form the basis
of any claim, action, suit or proceeding, against the Company or any of its
subsidiaries based on or resulting from the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling, or the
emission, discharge or release into the environment, of any pollutant,
contaminant or hazardous or toxic material or waste; and (d) have taken all
actions necessary under applicable Environmental Laws to register any products
or materials required to be registered by the Company or its subsidiaries (or
any of their respective agents) thereunder; except where the failure to obtain
such permit, license or other authorization, or any such

21
<PAGE>

non-compliance, or violations, liabilities, claim, action, suit, proceeding, or
failure to register any such product or material, individually or in the
aggregate, does not have and could not reasonably be expected to have a Material
Adverse Effect on the Company.

5.21 Contracts. The Company Disclosure Schedule contains an
accurate and complete listing of all contracts, leases, agreements or
understandings, whether written or oral, material to the business, properties,
operations or financial condition of the Company and its subsidiaries, taken as
a whole, including, without limitation, all contracts, agreements or
understandings with providers of programming (true and complete copies or, if
none, reasonably complete and accurate written descriptions of which, together
with all amendments and supplements thereto and all waivers of any material
terms thereof, have been delivered or made available to Acquisition or
Supercanal prior to the execution of this Agreement). Each of such contracts,
leases, agreements and understandings is in full force and effect and (a) none
of the Company or any of its subsidiaries or, to the knowledge of the Company,
any other party thereto, has breached or is in default thereunder, (b) no event
has occurred which, with the passage of time or the giving of notice would
constitute such a breach or default, (c) no claim of default thereunder has been
asserted or, to the knowledge of the Company, threatened and (d) none of the
Company or its subsidiaries or, to the knowledge of the Company, any other party
thereto is seeking a renegotiation thereof or substitute performance thereunder,
except where such breach or default, or attempted renegotiation or substitute
performance, individually or in the aggregate, does not have and could not
reasonably be expected to have a Material Adverse Effect on the Company.

5.22 Intellectual Property. (a) The Company and/or each of its
subsidiaries owns, or is licensed or otherwise possesses legally enforceable
rights to use, all patents, trademarks, trade names, service marks, copyrights,
and any applications therefor, technology, know-how, computer software programs
or applications, and tangible or intangible proprietary information or material
that are used in the business of the Company and its subsidiaries as currently
conducted and as proposed to be conducted.

(b) Except as disclosed in the Company Disclosure Schedule, or as
could not reasonably be expected to have a Material Adverse Effect on the
Company: (i) the Company is not, nor will it be as a result of the execution and
delivery of this Agreement or the performance of its obligations hereunder, in
violation of any licenses, sublicenses and other agreements as to which the
Company is a party and pursuant to which the Company is authorized to use any
third-party patents, trademarks, service marks and copyrights ("Third Party
Intellectual Property Rights"); (ii) no claims with respect to the patents,
registered and material unregistered trademarks and service marks, registered
copyrights, trade names and any applications therefor owned by the Company or
any of its subsidiaries (the "Company Intellectual Property Rights") are
currently pending or, to the knowledge of the Company, are overtly threatened by
any person; (iii) the Company does not know of any valid grounds for any bona
fide claims (a) to the effect that the sale, licensing or use of any product as
now used, sold or licensed or proposed for use, sale or license by the any or
any of its subsidiaries, infringes on any copyright, patent, trademark, service
mark or trade secret, (b) against the use by the Company or any of its
subsidiaries of any trademarks, trade

22
<PAGE>

names, trade secrets, copyrights, patents, technology, know-how or computer
software programs and applications used in the business of the Company or any of
its subsidiaries as currently conducted or as proposed to be conducted, (c)
challenging the ownership, validity or effectiveness of any of the Company
Intellectual Property Rights or other trade secret material to the Company, or
(d) challenging the license or legally enforceable right to use of the Third
Party Intellectual Rights by the Company or any of its subsidiaries.

(c) All material patents, registered trademarks, service marks and
copyrights held by the Company are valid and subsisting. Except as set forth in
the Company Disclosure Schedule, to the Company's knowledge, there is no
material unauthorized use, infringement or misappropriation of any of the
Company Intellectual Property Rights by any third party, including any employee
or former employee of the Company or any of its subsidiaries.

5.23 Insurance. All casualty, general liability, business
interruption, and other insurance policies maintained by the Company or any of
its subsidiaries are in character and amount substantially equivalent to that
carried by persons engaged in similar businesses and subject to the same or
similar perils or hazards, except as could not reasonably be expected to have a
Material Adverse Effect on the Company.

5.24 Accounts Receivable. The accounts receivable of the Company
and its subsidiaries as reflected on the Interim Balance Sheet, to the extent
uncollected on the date hereof, and the accounts receivable reflected on the
books of its subsidiaries are valid and existing and represent monies due, and
the Company has made reserves reasonably considered adequate for receivables not
collectible in the ordinary course of business, and (subject to the aforesaid
reserves) are subject to no refunds or other adjustments and to no defenses,
rights of setoff, assignments, restrictions, encumbrances or conditions
enforceable by third parties on or affecting any thereof.

5.25 Full Disclosure. No statement contained in any certificate or
schedule furnished or to be furnished by the Company or its subsidiaries to
Acquisition in, or pursuant to the provisions of, this Agreement contains or
will contain any untrue statement of a material fact or omits or will omit to
state any material fact necessary, in the light of the circumstances under which
it was made, in order to make statements herein or therein not misleading. The
Company has provided, or made available, to Acquisition or Supercanal complete
and correct copies of all agreements and other documents (including amendments,
supplements or modifications thereto) referred to on the Company Disclosure
Schedule.

5.26 Fairness Opinion. The Company has received the fairness
opinion of Arnhold and S. Bleichroeder, Inc. relating to the transactions which
are the subject of this Agreement (which fairness opinion supplements the
fairness opinion of Arnhold and S. Bleichroeder relating to the transactions
which were the subject of the Original Agreement) and a copy thereof will be
delivered to Acquisition.

ARTICLE VI

REPRESENTATIONS AND WARRANTIES OF ACQUISITION

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<PAGE>

Acquisition hereby represents and warrants to the Company that, except
as set forth in the written disclosure schedule delivered by Acquisition to the
Company (the "Acquisition Disclosure Schedule"):

6.1 Organization and Qualification; Subsidiaries. Acquisition is
a corporation duly organized, validly existing and in good standing under the
laws of the state of Delaware, and Supercanal is a corporation (sociedad
anonima) duly organized, validly existing and in good standing under the laws of
Argentina.

6.2 Constituent Documents. Acquisition has heretofore furnished
to the Company complete and correct copies of its certificate of incorporation
and by-laws and Supercanal has heretofore furnished to the Company a complete
and correct copy of its estatutos sociales and has furnished or made available
to the Company the estatutos sociales or other organizational documents of each
of its subsidiaries (the "Constituent Documents"). Such Constituent Documents
are in full force and effect.

6.3 Authority Relative to this Agreement and the Guarantee.
Acquisition has all necessary corporate power and authority to execute and
deliver this Agreement and to perform its obligations hereunder and to
consummate the transactions contemplated hereby. Supercanal has all necessary
corporate power and authority to execute and deliver the guaranty attached to
this Agreement (the "Guaranty") and the Programming Agreement and to perform its
obligations thereunder. The execution and delivery of this Agreement by
Acquisition and the consummation by Acquisition of the transactions contemplated
hereby have been duly and validly authorized by all necessary corporate action
on the part of Acquisition, and no other corporate proceedings on the part of
Acquisition are necessary to authorize this Agreement or to consummate the
transactions contemplated hereby. The execution and delivery of the Guaranty
and the Programming Agreement by Supercanal and fulfillment by Supercanal of its
obligations under the Guaranty and the Programming Agreement have been duly and
validly authorized by all necessary corporate action on the part of Supercanal,
and no other proceedings on the part of Supercanal are necessary to authorize
the Guaranty and the Programming Agreement or for Supercanal to fulfill any
obligations under the Guaranty and the Programming Agreement which it may be
required to fulfill. This Agreement has been duly and validly executed and
delivered by Acquisition and the Guaranty has been duly and validly executed by
Supercanal. Assuming the due authorization, execution and delivery of this
Agreement by the Company, this Agreement constitutes a legal, valid and binding
obligation of Acquisition, and the Guaranty constitutes, and when executed the
Programming Agreement will constitute, a valid and binding obligation of
Supercanal, enforceable against Acquisition (as to this Agreement) or Supercanal
(as to the Guaranty and the Programming Agreement) in accordance with its terms,
except as the enforceability thereof may be limited by bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium or other such laws relating to
the enforcement of creditors' rights generally and by general principles of
equity.

6.4 No Conflict. (a) Required Filings and Consents. Except as
set forth in the Acquisition Disclosure Schedule, the

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<PAGE>

execution and delivery of this Agreement by Acquisition, and the execution and
delivery of the Guaranty by Supercanal, do not, and the performance of this
Agreement by Acquisition or of the Guarantee by Supercanal will not, (i)
conflict with or violate the Constituent Documents of Acquisition or Supercanal,
(ii) conflict with or violate any law, rule, regulation, order, judgment or
decree applicable to Acquisition or Supercanal or any of their subsidiaries or
by which its or their respective properties are bound or affected, or (iii)
result in any breach of or constitute a default (or an event which with notice
or lapse of time or both would become a default) under, or impair Acquisition's,
Supercanal's or any of their subsidiaries' rights or alter the rights or
obligations of any third party under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or result in the
creation of a lien or encumbrance on any of the properties or assets of
Acquisition or Supercanal or any of their subsidiaries pursuant to, any note,
bond, mortgage, indenture, contract, agreement, lease, license, permit,
franchise or other instrument or obligation to which Acquisition or Supercanal
or any of their subsidiaries is a party or by which Acquisition or Supercanal or
any of their subsidiaries or its or any of their respective properties are bound
or affected.

(b) Except as disclosed in the Acquisition Disclosure Schedule,
the execution and delivery of this Agreement by Acquisition and of the Guaranty
by Supercanal does not, and the performance of this Agreement by Acquisition and
of the Guaranty by Supercanal will not, require any consent, approval,
authorization or permit of, or filing with or notification to, any governmental
or regulatory authority, domestic or foreign, except for (i) the filing and
recordation of appropriate merger or other documents as required by the DGCL and
the TBCA (ii) applicable filing and waiting period requirements under the HSR
Act and (iii) applicable requirements, if any, under Argentine Law No. 22,285 or
other required filings with, or approvals by Comfer. The filing required to
have been made by Acquisition under the HSR Act has been made and the waiting
periods under the HSR Act have been terminated.

(c) The execution and delivery of this Agreement by Acquisition
and of the Guaranty by Supercanal does not require the consent of any person,
including any shareholder of Acquisition or Supercanal, other than approval of
the Board of Directors of Acquisition and of the Directorio (i.e., Board of
Directors) of Supercanal, each of which has been obtained.

6.5 Ownership of Acquisition; No Prior Activities. (a)
Acquisition was formed solely for the purpose of engaging in the transaction
contemplated by this Agreement.

(b) As of the date hereof and the Effective Time, except for
obligations or liabilities incurred in connection with the transactions
contemplated by this Agreement and except for this Agreement and any other
agreement or arrangements contemplated by this Agreement, Acquisition has not
and will not have incurred, directly or indirectly, through any subsidiary or
affiliate, any obligations or liabilities or engaged in any business activities
of any type or kind whatsoever or entered into any agreements or arrangements
with any persons.

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<PAGE>

6.6 Accuracy of Materials. Neither the Offer Documents nor any
information supplied by Acquisition in writing for inclusion in the Schedule
14D-9 will, at the respective times the Schedule 14D-9 and the Offer Documents
are filed with the SEC and first published, sent or given to the Company's
stockholders, contain a false or misleading statement with respect to any
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 are made, not misleading. On the date the Proxy
Statement is mailed to the Company's stockholders and on the date of the
Stockholders Meeting, none of the information supplied in writing by Acquisition
for inclusion in the Proxy Statement will be false or misleading with respect to
any material fact or will 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 are made, not misleading or necessary to correct
any statement in any earlier communication with respect to the Stockholders
Meeting or the solicitation of proxies therefor which has become false or
misleading. The Offer Documents will comply as to form in all material respects
with the Exchange Act and the rules and regulations under it. Notwithstanding
the foregoing, Acquisition does not make any representation or warranty with
respect to information supplied by the Company or any of its affiliates or
representatives in writing for inclusion in the Offer Documents, the Schedule
14D-9 or the Proxy Statement.

6.7 Availability of Funds. Supercanal (i) has arranged loan
facilities which, either alone or with cash presently on hand, will provide
sufficient funds to enable Acquisition to purchase and pay for the Purchased
Common Stock (and the Option Preferred Stock, of Acquisition exercises the
Preferred Stock Purchase Option), the Shares which are tendered in response to
the Tender Offers and the Merger as contemplated by this Agreement and to
consummate the other transactions contemplated by this Agreement and (ii) will
have on the Stock Purchase Closing Date, the Expiration Date and the Effective
Date sufficient funds to enable Acquisition to fulfill the respective
obligations under this Agreement which it will be required to fulfill on each of
those dates, including but not limited to its obligations to purchase and pay
for the Purchased Common Stock, the Shares which are tendered in response to the
Tender Offers and the Merger, respectively, as contemplated by this Agreement.
Supercanal's loan facilities permit money borrowed under the facilities to be
used to purchase and pay for Common Stock and 8% Preferred Stock purchased at
the Initial Purchase Closing, under Paragraph 1.4 or through the Tender Offers
and to carry out the Merger. The Note Purchase Agreement dated as of November
12, 1997 among Supercanal Holding S.A. and various subsidiaries, various
financial institutions, as Purchasers, ING Baring (U.S.) Securities, Inc., as
Arranger, ING Baring (U.S.) Capital Corporation, as Administrative and
Collateral Agent, and The Bank of New York, as Registrar, as modified by a
letter agreement dated as of November 26, 1997, (the "Note Purchase Agreement"),
a copy of which was given to the Company, has not been terminated or further
modified.

6.8 No Supercanal Shareholder Suits. At the date of this
Agreement, no shareholder of Supercanal or affiliate of a

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<PAGE>

shareholder of Supercanal has filed or threatened to file a suit seeking to
enjoin Supercanal or Acquisition from completing the transactions which are the
subject of this Agreement.

6.9 Not Affiliated Shareholders. None of Acquisition, Supercanal
or any "affiliates" or "associates" of Acquisition or Supercanal are "affiliated
shareholders" of the Company, as those terms are defined in Articles 13.01 -
13.08 of the TBCA.

ARTICLE VII

ACTIONS PRIOR TO THE MERGER

7.1 Activities Until Effective Time. From the date of this
Agreement to the Effective Time, the Company will, and will cause each of its
subsidiaries to, except with the written consent of Acquisition:

(a) Operate its business in the ordinary course and in a manner
consistent with the manner in which it is being operated at the date of this
Agreement.

(b) Take all reasonable steps available to it to maintain the
goodwill of the Company's business and the continued employment of the
executives and other employees engaged in that business.

(c) At its expense, maintain all its assets in good repair and
condition, except to the extent of reasonable wear and use and damage by fire or
other unavoidable casualty.

(d) Not make any borrowings other than (i) borrowings in the
ordinary course of business under working capital lines which are disclosed in
the notes to the consolidated balance sheet at March 31, 1997 or September 30,
1997 included in the Company SEC Reports, and (ii) up to a total of $1,000,000
under revolving credits from Jack R. Crosby Inter Vivos Trust and Sharpe
Irrevocable Inter Vivos Trust.

(e) Except as permitted in Paragraph 7.1(f) not enter into any
contractual commitments involving capital expenditures, loans or advances, and
not voluntarily incur any contingent liabilities, except in each case in the
ordinary course of business.

(f) Not make any expenditure which reduces its net working capital
(i.e., current assets minus current liabilities) by more than $2.5 million, and
not make capital expenditures whether or not in the ordinary course of business
(excluding capitalized costs of new subscriber connections and costs of
acquiring new television systems, other than KTV) totalling more than $2.5
million, if Acquisition's designee on the Company's Board of Directors objects
in writing to the expenditures within three business days in Argentina after the
Acquisition designee is notified in writing that the Company wants to make the
expenditure or expenditures and is given written materials describing in
reasonable detail the reasons the Company

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<PAGE>

wants to make the expenditure or expenditures and, if applicable, the return the
Company expects to realize from the expenditure or expenditures, provided that
Acquisition's designee will not be permitted to object to a reduction of net
working capital which is necessary to enable the Company to pay its outstanding
obligations as they become due and payable in the ordinary course of business or
to make expenditures or payments specifically permitted in subparagraph (d) or
(g).

(g) Not declare or pay any dividends, or make any other
distributions or repayments of debt to its stockholders, other than (i) required
payments of dividends, if any, with regard to the 10% Preferred Stock and the 8%
Preferred Stock, (ii) payments by subsidiaries of the Company to the Company or
other wholly owned subsidiaries of the Company, (iii) repayments of borrowings
under a $500,000 revolving credit from each of Jack R. Crosby Inter Vivos Trust
and the Sharpe Irrevocable Inter Vivos Trust and (iv) repayment of 1998 Notes.

(h) Not make any loans or advances (other than advances for travel
and other normal business expenses) to stockholders, directors, officers or
employees.

(i) Maintain its books of account and records in the usual manner,
in accordance with US GAAP applied on a consistent basis, subject to normal
year-end adjustments and accruals.

(j) Comply in all material respects with all applicable laws and
regulations of governmental agencies.

(k) Not sell, dispose of or encumber any property or assets, or
engage in any activities or transactions, except in each case in the ordinary
course of business.

(l) Not increase the salaries of any officers or directors.

(m) Not adopt, or become an employer with regard to, any employee
compensation, employee benefit or post-employment benefit plan, except bonuses
totalling not more than $300,000 to Jack Gray and Jack Crosby.

(n) Not issue any stock of any class, other than (i) the issuance
of Common Stock upon exercise of options or warrants which are outstanding on
the date of this Agreement and are disclosed on the Company Disclosure Schedule,
(ii) the issuance of Common Stock on conversion of 8% Preferred Stock or 10%
Preferred Stock, (iii) the issuance of 8% Preferred Stock as dividends to the
extent required by the 8% Preferred Stock and the 10% Preferred Stock, (iv) the
issuance of 8% Preferred Stock as dividends to the extent required by
outstanding shares of 8% Preferred Stock and (v) the issuance of shares upon
conversion of subsidiaries from sociedad de responsabilidad limitada (SRL) form
to sociedad anonima (SA) form, or issue any options, warrants or rights, or
enter into any other agreements, by reason of which the Company may become
obligated to issue any stock of any class.

7.2 Redemption of 10% Preferred Stock. Not later than three
Austin, Texas business days after the Initial Stock

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<PAGE>

Purchase Closing Date the Company will give notice of redemption of all the
outstanding shares of 10% Preferred Stock for the redemption price of $5.00 per
share plus dividends specified in the Statement of Resolution Establishing and
Designating the Series 1990 10% Convertible Preferred Stock, which was filed on
July 11, 1990.

7.3 No Solicitation of Offers; Notice of Indications of Interest.
(a) Except as provided in subparagraph (b), the Company will not, and will not
authorize any of its officers, directors, employees or agents to, enter into any
discussions or take any other steps, a likely result of which might be to cause
someone other than Acquisition or Supercanal to (i) solicit tenders of stock of
the Company or otherwise seek to acquire 5% or more of either the Common Stock
or the 8% Preferred Stock of the Company, other than with a view to tendering
that stock in response to the Tender Offers, (ii) acquire all or a substantial
portion of the assets of the Company and its subsidiaries (whether through
acquisitions of assets, acquisitions of stock of subsidiaries or both), or (iii)
otherwise to acquire the Company or a substantial portion of its assets if the
Minimum Shares are not validly tendered in response to the Tender Offers and not
withdrawn or if the Company's stockholders do not approve the Merger. If the
Company learns that anyone is contemplating soliciting tenders of its stock,
acquiring 5% or more of its outstanding stock, acquiring all or a substantial
portion of its assets and those of its subsidiaries or otherwise offering to
acquire the Company or its assets if the Minimum Shares are not validly tendered
in response to the Tender Offers and not withdrawn or if its stockholders do not
approve the Merger, the Company will promptly notify Acquisition of that fact
and provide Acquisition with all information in the Company's possession
regarding the contemplated solicitation of tenders, acquisition of stock or
assets or other acquisition offer, and the Company will promptly, from time to
time, provide Acquisition with any additional information it obtains regarding
the contemplated solicitation of tenders, acquisition of stock or assets or
other acquisition offer.

(b) Notwithstanding subparagraph (a), the Company may,
without breaching this Agreement, in response to an unsolicited proposal to the
Company (an "Acquisition Proposal") which the Company's Board of Directors
determines, in good faith and after consultation with the Company's independent
financial advisor, would result (if consummated pursuant to its terms) in a
transaction (an "Acquisition Transaction") which is more favorable both to the
holders of the Common Stock and to the holders of the 8% Preferred Stock than
the Tender Offers and the Merger, furnish confidential or non-public information
to the person, entity or group (a "Potential Acquiror") making that Acquisition
Proposal and enter into discussions and negotiations with that Potential
Acquiror.

7.4 Efforts to Fulfill Conditions. The Company will use its
best efforts to cause all the conditions set forth in Paragraph 8.1 to be
fulfilled prior to or on the Initial Stock Purchase Closing Date and Acquisition
will use its best efforts to cause all the conditions set forth in Paragraph 8.2
to be fulfilled prior to or on the Initial Stock Purchase Closing Date.

7.5 Indemnification and Insurance. (a) In the event of any
threatened or actual claim, action, suit, proceeding or

29
<PAGE>

investigation, whether civil, criminal or administrative, (each an "Action")
including, without limitation, any Action in which any person who is now, or has
been at any time prior to the date of this Agreement, or who becomes prior to
the Effective Time, a director, officer, employee, fiduciary or agent of the
Company or any of its subsidiaries (the "Indemnified Parties") is, or is
threatened to be, made a party based in whole or in part on, or arising in whole
or in part out of, or pertaining to (i) the fact that he is or was a director,
officer, employee or agent of the Company or any of its subsidiaries, or is or
was serving at the request of the Company or any of its subsidiaries as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, or (ii) this Agreement or any of the
transactions contemplated by it, whether asserted or arising before or after the
Effective Time, the Company and Acquisition (prior to the Merger) and the
Surviving Corporation (after the Merger) will cooperate and use its reasonable
best efforts to defend against the Action. The Company will indemnify and hold
harmless, and after the Effective Time the Surviving Corporation will indemnify
and hold harmless, to the fullest extent permitted by applicable law, each
Indemnified Party against any losses, claims, damages, liabilities, costs,
expenses (including attorneys' fees and expenses), judgments, fines and amounts
paid in settlement in connection with any such threatened or actual claim,
action, suit, proceeding or investigation, and in the event of any such
threatened or actual Action. Without limiting what is said in the preceding
sentence, (i) the Company, and the Surviving Corporation after the Effective
Time, will promptly pay expenses incurred by an Indemnified Party in advance of
the final disposition of any Action to the fullest extent permitted by law, (ii)
the Indemnified Parties may retain counsel satisfactory to them, and the
Company, and the Surviving Corporation after the Effective Time, will pay all
fees and expenses of one counsel for the Indemnified Parties promptly after
statements are received. However, neither the Company nor the Surviving
Corporation will be liable for any settlement effected without its prior written
consent (which consent will not be unreasonably withheld), and the Surviving
Corporation will have no obligation to any Indemnified Party when and if a court
of competent jurisdiction determines, in a determination which becomes final and
non-appealable, that indemnification of such Indemnified Party in the manner
contemplated by this Paragraph is prohibited by applicable law. Any Indemnified
Party wishing to claim indemnification with regard to an actual or threatened
Action under this Paragraph 7.6, upon learning of the Action or the threat of
the Action, must notify the Company and, after the Effective Time, the Surviving
Corporation, of the Action; provided that the failure to give notice will not
effect the obligations of the Company or the Surviving Corporation except to the
extent the failure to give notice materially prejudices such party.

(b) Acquisition agrees that all rights to indemnification existing
in favor, and all limitations on the personal liability, of the Indemnified
Parties in the Company's Certificate of Incorporation or by-laws or the charter
or by-laws or similar organizational documents of any of its subsidiaries as in
effect as of the date Agreement with respect to matters occurring prior to the
Effective Time will survive the Merger and will continue in full force and
effect for a period of not less than six after years the Effective Time;
provided, however, that all rights to indemnification in respect of any claim
asserted or made within such period shall continue until the disposition of such
claim. The Surviving Corporation will cause the current policies

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<PAGE>

of the directors' and officers' liability insurance to remain in effect for at
least three years after the Effective Time or will substitute policies of at
least the same coverage with terms and conditions which are not less
advantageous to the insureds than those presently maintained by the Company,
with respect to matters occurring prior to the Effective Time; provided that in
no event will the Surviving Corporation be required to expend in any one year an
amount in excess of 150% of the annual premiums currently paid by the Company
for that insurance. If the annual premiums exceed that amount, the Surviving
Corporation will only be obligated to obtain a policy with the greatest dollar
amount of coverage available for a cost not exceeding that amount.

(c) This Paragraph 7.5 is intended for the benefit of the
Indemnified Parties and will be binding on all successors and assigns of
Acquisition, the Company and the Surviving Corporation. Each of the Indemnified
Parties will be entitled to enforce this in Paragraph 7.5.

(d) If the Surviving Corporation or any of its successors or
assigns (i) consolidates with or merges into any other person or entity and is
not the entity which continues or survives after the consolidation or merger or
(ii) transfers all or substantially all of its properties and assets to any
person or entity, then, and in each such case, provision will be made so the
successors of the Surviving Corporation assume the obligations set forth in this
Paragraph 7.5.

7.6 Board Representation. Not later than the Stock Purchase
Closing Date, Daniel Vila, will be elected by the Board, effective upon
completion of Acquisition's purchase of the Purchased Common Stock, to one of
the positions (of which there will not be more than seven) on the Company's
Board of Directors and the Company will use its best efforts to cause Daniel
Vila, or if he becomes unable to serve, another designee of Acquisition
reasonably acceptable to the Company, to be elected at all subsequent meetings
of the Company's stockholders at which directors are elected (except that, (i)
at any time when Acquisition and its affiliates (including Supercanal) cease to
own at least 15% of the outstanding shares of Common Stock, or (ii) if
Acquisition breaches or fails to fulfill in a material respect any of its
obligations under this Agreement within 10 days after written notice of the
failure from the Company (which states that it is a notice being given for the
purposes of this Paragraph 7.6), Acquisition will cause Daniel Vila or whoever
else may be its designee to resign.

7.7 Options and Warrants. (a) The Company will use its best
efforts (including, without limitation, by amending the provisions of the
Company's Employee Stock Option Plan and its Non-Employee Director Stock Option
Plan and the option agreements which have been issued under those Plans) to
provide that, (i) immediately prior to the acceptance of Shares in response to
the Tender Offers, each holder of an outstanding option granted under either
Plan (an "Option") will become fully vested and (ii) if all the conditions on
Exhibit 2.1-C are fulfilled, (x) each Option will be cancelled and (y) the
holder of each Option will receive, not later than 10 days after the Tender
Offers expire, a cash payment from the Company equal to (I) the excess of the
Merger Price for the Common Stock over the per share exercise price of the
Option times (II) the number of shares subject to the Option when it is
cancelled. Any such cash payments will be treated as compensation and will be
net of any applicable federal or state

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<PAGE>

withholding tax.

(b) If (i) all the conditions on Exhibit 2.1-C are fulfilled, or
(ii) even though those conditions are not fulfilled, Acquisition purchases all
the Common Stock and 8% Preferred Stock which is properly tendered in response
to the Tender Offers and not withdrawn and (iii) at least 5 days after all the
10% Preferred Stock has either been converted into Common Stock or redeemed, any
holder of warrants listed in Section 5.3 of the Company Disclosure Schedule
tenders the warrants to the Company to be cancelled in exchange for payment of
(A) the excess of $4.50 per share of Common Stock over the per share exercise
price of the warrants times (B) the number of shares of Common Stock subject to
the warrants when they are cancelled, within five business days after the
warrants are tendered for cancellation, the Company will cancel the warrants and
pay the holder cash in the amount described in clauses (A) and (B).

7.8 Use of Proceeds of Sale of Purchased Common Stock. The
Company will use the proceeds of the sale of the Purchased Common Stock solely
(a) to pay the redemption price of the 10% Preferred Stock, (b) to repay up to
$6,780,000 of the Company's 13% Notes due February 1998, (c) to make payments to
holders of Options or warrants as contemplated by Paragraph 7.7 and (d) to make
other payments which are listed on Exhibit 7.8. Until it uses proceeds of the
sale of the Purchased Common Stock for one or more of those purposes, the
Company will invest them in (i) securities issued by the United States Treasury
which mature not later than March 31, 1998, (ii) certificates of deposit issued
by ING Bank N.V. or an affiliate which mature no later than March 31, 1998, or
(iii) other short term debt securities to which Acquisition consents in writing
in advance.

7.9 Purchase of KTV. Not later than 10 days after the Stock
Purchase is competed, the Company will assign to Acquisition all the rights, if
any, the Company may have under the option to purchase the entities which
operate cable systems and in Monte Caseras and Federacion (together, the "KTV
Entities") which is described in Items 8(a) and (b) of Section 5.20 of the
Company Disclosure Schedule (the "KTV Option"). If the KTV Option has not
expired, Acquisition will exercise the KTV Option before its expiration date and
will purchase, or cause a designee to purchase, the KTV Entities on the terms
provided in the KTV Option. If the KTV Option has expired but the owners of the
KTV Entities are willing to sell the KTV Entities to Acquisition for the
purchase price, and on the other terms, provided in the KTV Option, as promptly
as practicable after the Stock Purchase is completed, Acquisition or a designee
will purchase the KTV Entities for that purchase price and on those other terms.

7.10 Satisfaction of Subsidiary Debt. Not later than 15 days after
(i) the day on which Acquisition accepts the shares which are properly tendered
in response to the Tender Offers and not withdrawn, or (ii) such earlier time as
Acquisition acquires a majority of the outstanding Common Stock, the Company
will cause each of its subsidiaries listed on Exhibit 7.10 to repay in full all
its indebtedness for borrowed money and all its indebtedness incurred in
connection with acquisitions of businesses or other assets (other than trade
accounts payable incurred in the

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<PAGE>

ordinary course of business).

7.11 Ownership of Subsidiaries. Not later than 20 days after the
date of this Agreement, the Company will enter into binding written agreements
with the registered owners of shares or other interests in SIR TV S.R.L., Cable
Viedma S.R.L. and Televiedma S.R.L., (together the "Tescorp S.R.L.'s") in form
reasonably satisfactory to Acquisition, in which those registered owners agree
that at any time the Company asks them to do so, they will (a) execute any
documents the Company requests that they execute in order to ensure that at the
Effective Time, the lenders under the Note Purchase Agreement will have valid
and enforceable liens on all the shares or other ownership interests in the
Tescorp S.R.L.'s, and (b) providing for the transfer of ownership of the Tescorp
S.R.L.'s to such entity or entities as Supercanal may designate.

ARTICLE VIII

CONDITIONS PRECEDENT TO TRANSACTIONS

8.1 Conditions to the Company's Obligations. The obligations of
the Company to sell the Purchased Common Stock (the "Stock Purchase") and to
complete the Merger are subject to satisfaction of the following conditions (any
or all of which may be waived by the Company with regard to either the Stock
Purchases or the Merger):

(a) The representations and warranties of Acquisition contained in
this Agreement and the representations and warranties of Supercanal contained in
the Guaranty will, except as contemplated by this Agreement, be true and correct
in all material respects on the date of the Stock Purchase Closing (as to the
Stock Purchase) and on the Merger Date (as to the Merger) with the same effect
as though made on that date, and Acquisition will have delivered to the Company
on the date of the Stock Purchase Closing (as to the Stock Purchase) and on the
Merger Date (as to the Merger) a certificate dated that date and signed by the
President of Acquisition to that effect.

(b) Acquisition will have fulfilled in all material respects all
its obligations under this Agreement required to have been fulfilled prior to or
on the applicable one of the Stock Purchase Closing Date or the Merger Date.

(c) No order will have been entered by any court or governmental
authority and be in force which invalidates this Agreement or restrains the
Company from completing any of the transactions which are the subject of this
Agreement.

(d) As to the Merger (but not as to the Stock Purchase), unless
the Merger can be consummated under both the TBCA and the DGCL without a vote of
the Company's stockholders, the Merger will have been approved by the holders of
two-thirds of the outstanding shares of Common Stock and two-thirds of the
outstanding shares of 8% Preferred Stock.

(e) As to the Merger, the Effective Time will occur on or before
April 30, 1998.

8.2 Conditions to Acquisition's Obligations. The obligations of
Acquisition to complete the Stock Purchase and to

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<PAGE>

complete the Merger are subject to the following conditions (any or all of which
may be waived by Acquisition with regard to the Stock Purchase or the Merger):

(a) As to the Stock Purchase, the representations and warranties
of the Company contained in this Agreement will, except as contemplated by this
Agreement, be true and correct in all material respects on the Stock Purchase
Closing Date with the same effect as though made on that date, and the Company
will have delivered to Acquisition on the Stock Purchase Closing Date a
certificate dated that date and signed by the President or a Vice President of
the Company to that effect.

(b) As to the Merger, the representations and warranties of the
Company in Paragraph 5.8 will, except as contemplated by this Agreement, be true
and correct in all material respects on the Merger Date with the same effect as
though made on that date, and the Company will have delivered to Acquisition on
the Merger Date a certificate dated that date and signed by the President or a
Vice President of the Company to that effect.

(c) The Company will have fulfilled in all material respects all
of its obligations under this Agreement required to have been fulfilled prior to
or on the applicable one of the Stock Purchase Closing Date or, the Merger Date.

(d) No order will have been entered by any court or governmental
authority and be in force which invalidates this Agreement or restrains
Acquisition from completing any of the transactions which are the subject of
this Agreement.

(e) On or before the Stock Purchase Closing Date, Daniel Vila will
have been elected to the Company's Board of Directors,effective upon completion
of Acquisition's purchase of the Purchased Common Stock, as contemplated by
Paragraph 7.6, and, except under circumstances described in Paragraph 7.6 in
which Acquisition no longer is entitled to designate a member of that Board of
Directors, that election will not have been rescinded.

(f) As to the Merger, the number of shares held by shareholders of
the Company who have filed written objections to approval of the Merger
sufficient to preserve their rights to demand the fair value of the shares
pursuant to Articles 5.11 through 5.13 of the TBCA will not exceed 5% of the
total number of outstanding shares of Common Stock and 8% Preferred Stock
combined (treating each share of 8% Preferred Stock as being equal to 32 shares
of Common Stock).

(g) As to the Merger, the Effective Time will occur on or before
April 30, 1998.

ARTICLE IX

TERMINATION

9.1 Right to Terminate. This Agreement may be terminated at any
time prior to the Effective Time (whether or not

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<PAGE>

the stockholders of the Company have approved the Merger):

(a) By mutual consent of the Company and Acquisition.

(b) By the Company if, without fault of the Company, the
Expiration Date is not on or before January 31, 1998.

(c) By the Company or Acquisition if, without fault of
Acquisition, the Effective Time is not on or before April 30, 1998.

(d) By the Company if (i) any of the representations or warranties
of Acquisition contained in this Agreement was not complete and accurate in all
material respects on the date of this Agreement, or (ii) any of the conditions
in Paragraph 8.1 is not satisfied or waived by the Company prior to or on the
Merger Date.

(e) By Acquisition if (i) any of the representations or warranties
of the Company contained in this Agreement was not complete and accurate in all
material respects on the date of this Agreement or (ii) any of the conditions in
Paragraph 8.2 is not satisfied or waived by Acquisition prior to or on the
Merger Date.

9.2 Manner of Terminating Agreement. If at any time Acquisition
or the Company has the right under Paragraph 9.1 to terminate this Agreement, it
can terminate this Agreement by a notice to the other of them that it is
terminating this Agreement.

9.3 Termination due to Superior Proposal.

(a) This Agreement may be terminated by the Company at any time
prior to the Stock Purchase Closing Date, if (i) it receives a Superior
Proposal, (ii) its Board of Directors resolves to accept the Superior Proposal,
(iii) the Company has given Acquisition at least ten business days' prior notice
of its intention to terminate this Agreement pursuant to this provision and (iv)
the Company has paid Acquisition $5 million (it being understood that only one
such payment will be required even if the Company is entitled to terminate this
Agreement both under this subparagraph (a) and under subparagraph (b)). A
"Superior Proposal" is an Acquisition Proposal which would result in the
Company's stockholders receiving consideration with a fair value determined in
good faith by the Company's Board of Directors and after consultation with the
Company's independent financial advisor to be more favorable both to the holders
of the Common Stock and to the holders of the 8% Preferred Stock than the Tender
Offers and the Merger. A notice of intention to terminate given pursuant to
this subparagraph will be irrevocable (unless Acquisition consents in writing to
its being withdrawn by the Company) and will result in this Agreement's being
terminated on the date specified in the notice of intention, which will be not
earlier than the day after the expiration of the ten business day period. When
the Company delivers a notice of intention to terminate pursuant to this
Paragraph, Acquisition's obligations under Articles I, II, III and IV and
Paragraphs 7.2 and 7.5 will terminate.

(b) This Agreement may be terminated by the Company, if (A) a
tender or exchange offer is commenced by a Potential Acquiror for all the
outstanding shares of Common Stock and 8% Preferred Stock, (B) the Company's
Board of Directors determines in good faith and

35
<PAGE>

after consultation with an independent financial advisor, that the offer
constitutes a Superior Proposal and resolves to accept the Superior Proposal or
recommend to the Company's stockholders that they tender their shares in
response to the tender or exchange offer, (C) the Company has given Acquisition
at least ten business days' prior notice of its intention to terminate pursuant
to this provision, and (D) the Company has paid Acquisition $5 million (it being
understood that only one such payment will be required even if the Company is
entitled to terminate this Agreement both under this subparagraph (b) and under
subparagraph (a)). A notice of intention to terminate given pursuant to this
subparagraph will be irrevocable (unless Acquisition consents in writing to its
being withdrawn by the Company) and will result in this Agreement's being
terminated on the date specified in the notice of intention, which will be not
earlier than day after the expiration of the ten business day period. When the
Company delivers a notice of intention to terminate pursuant to this Paragraph,
Acquisition's obligations under Articles I, II, III and IV and Paragraphs 7.2
and 7.5 will terminate.

9.4 Effect of Termination. (a) If this Agreement is terminated
pursuant to Paragraph 9.1 or 9.3, after this Agreement is terminated, neither
party will have any further rights or obligations under this Agreement, other
than the parties' respective rights and obligations under Paragraphs 7.6, 11.1,
11.2, 11.3, and 11.7. Nothing in this Paragraph will, however, (i) affect the
rights of the Company and Acquisition with respect to the Deposit as set forth
in Paragraph 1.2 or (ii) relieve either party of liability for any breach of
this Agreement which occurs before this Agreement is terminated.

(b) If this Agreement is terminated after the Stock Purchase
Closing Date, the termination will not affect the validity of the Stock
Purchase. If this Agreement is terminated after Acquisition has accepted Shares
which are tendered in response to the Tender Offers, the termination will not
affect Acquisition's purchase of the Shares it has accepted or its obligation to
pay for those shares. Either Acquisition or the Company will, however, be
entitled to seek recourse for any damages it suffers as a result of, or
otherwise in connection with, the Stock Purchases or the purchase by Acquisition
of Shares which are tendered in response to the Tender Offers because
representations and warranties in this Agreement are not accurate or because of
breaches of this Agreement which occur after those events have taken place.

ARTICLE X

ABSENCE OF BROKERS

10.1 Representations and Warranties Regarding Brokers and Others.
The Company and Acquisition each represents and warrants to the other of them
that nobody acted as a broker, a finder or in any similar capacity in connection
with the transactions which are the subject of this Agreement, except that
Arnhold and S. Bleichroeder, Inc. and Prudential Securities, Inc. acted as
financial advisors to the Company and ING Baring (U.S.) Securities, Inc., Smith
Barney Inc. and Integra Financial Services LLC acted as financial advisors to
Acquisition and Supercanal. The fees of Arnhold and S. Bleichroeder, Inc. and
Prudential Securities, Inc., which together will total the lesser of (i) 2% of
the total amount paid by Acquisition for

36
<PAGE>

shares it acquires through the Stock Purchase and the Tender Offers plus the
total Merger consideration, or (ii) $2 million will be paid by the Company,
except that if (i) the Tender Offers are commenced and all the conditions on
Exhibit 2.1-C are fulfilled or waived, or (ii) the Tender Offers are not
commenced because Acquisition breaches its obligations under this Agreement,
Acquisition will pay those fees promptly after request by the Company. The fees
of ING Baring (U.S. Securities, Inc.), Smith Barney, Inc. and Integra Financial
Services LLC, which together will total the lesser of (x) 2% of the total amount
paid by Acquisition for the shares it acquires through the Stock Purchase and
the Tender Offers plus the Merger Consideration or (y) $2 million, will be paid
by Acquisition. The Company and Acquisition each indemnifies the other of them
against, and agrees to hold the other of them harmless from, all losses,
liabilities and expenses (including, but not limited to, reasonable fees and
expenses of counsel and costs of investigation) incurred because of any claim by
anyone other than the five firms named in the first sentence of this Paragraph
for compensation as a broker, a finder or in any similar capacity by reason of
services allegedly rendered to the indemnifying party in connection with the
transactions which are the subject of this Agreement.

ARTICLE XI

GENERAL

11.1 Expenses. If (i) the Tender Offers are commenced and all the
conditions on Exhibit 2.1-C are fulfilled or waived or (ii) the Tender Offers
are not commenced because Acquisition breaches its obligations under this
Agreement, Acquisition will pay (i) its own expenses and (ii) promptly after
demand by the Company, all the expenses of the Company in connection with this
Agreement and the transactions which are the subject of this Agreement,
including the fees of the firms described in Paragraph 10.1 and including legal
and accounting fees and expenses. Otherwise, the Company and Acquisition
(together with Supercanal) each will pay its own expenses, including fees of
financial advisors and legal and accounting fees and expenses, in connection
with this Agreement and the transactions which are the subject of this
Agreement.

11.2 Company Option to Repurchase Stock. If the Stock Purchase
Closing takes place but Acquisition fails (i) to make the Tender Offers or (ii)
whether or not it is required to do so, to accept and pay for the Shares which
are properly tendered in response to the Tender Offers and not withdrawn, or if
this Agreement is terminated because of failure of the condition in Paragraph
8.2(d) due to a Supercanal Shareholder Suit, the Company will have the option,
exercisable by a notice to Acquisition given not later than 5:00 P.M. New York
City time on the first anniversary of the Initial Stock Purchase Closing Date,
to repurchase all (but not less than all) the Initial Purchased Common Stock, if
any, Acquisition has purchased for the price Acquisition paid for it (including
the amount of the Deposit which was applied in payment of a portion of the
purchase price of the Purchased Common Stock), payable on a date specified by
the Company in the notice of exercise of the option which is not more than 20
days after the day on which the notice of exercise is given, by a wire transfer
to an account in New York City specified by Acquisition in funds which are
immediately available

37
<PAGE>

in New York City. Upon confirmation that the funds were received, Acquisition
will surrender to the Company the certificates representing the Purchased Common
Stock.

11.3 Purchase of Minority Interests. At or before the Effective
Time, Acquisition will purchase (or will cause an affiliate to purchase) the
minority interests in cable television interests listed on Exhibit 11.3 for a
total of $2,745,330, except to the extent Acquisition (or an affiliate) does not
purchase specific minority interests because the current owners of those
minority interests would not sell them for the prices shown on Exhibit 11.3.

11.4 Payment to Company. If after the Stock Purchase Closing Date
but before the Effective Time, this Agreement is terminated (i) by the Company
because Acquisition fails to fulfill its obligations under Article II or Article
III, or (ii) by Acquisition because the condition in Paragraph 8.2(d) is not
fulfilled due to a Supercanal Shareholder Suit, within 5 days after the day on
which this Agreement is terminated, Acquisition will pay the Company, by wire
transfer to the account specified in accordance with Paragraph 1.4(b)(i), the
sum of $5 million.

11.5 Retention Payments. The Surviving Corporation will pay each
employee of the Company listed on Exhibit 11.5 who either (i) continues to be
employed by the Surviving Corporation or a subsidiary for at least three months
after the Expiration Date, or (ii) is terminated as an employee of the Company
and its subsidiaries between the Expiration Date and the day which is three
months after the Expiration Date other than for Cause, an amount equal to the
employee's annual salary, but in no event will the Surviving Corporation be
obligated to pay those employees a total of more than $350,000 (and the amounts
payable to various employees will be reduced pro rata to the extent, if any,
necessary to reduce the total payments to $350,000). As used in this Agreement
the term "Cause" means gross negligence, fraud, wilful misconduct or the failure
to perform material duties after notice of such failure has been given to the
applicable employee.

11.6 Access to Properties, Books and Records. (a) From the date of
this Agreement until the Merger Date or such earlier date as this Agreement is
terminated, the Company will, and will cause each of its subsidiaries to, give
representatives of Acquisition full access during normal business hours to all
of their respective properties, books and records. Until the Effective Time or,
if the Merger does not take place, until the second anniversary of the date of
this Agreement, Acquisition will, and will cause its representatives to, hold
all information its representatives receive as a result of their access to the
properties, books and records of the Company or its subsidiaries in confidence,
and not use any of that information for any purpose except in connection with
the transactions which are the subject of this Agreement (including confirming
the accuracy of representations and warranties of the Company and other
information about the Company contained in this Agreement), except to the extent
that information (i) is or becomes available to the public (other than through a
breach of this Agreement), (ii) becomes available to Acquisition from a third
party which, insofar as Acquisition is aware, is not under an obligation to the
Company, or to a subsidiary of the Company, to keep the information
confidential, (iii) was known

38
<PAGE>

to Acquisition before it was made available to Acquisition or its representative
by the Company or a subsidiary, or (iv) otherwise is independently developed by
Acquisition or an affiliate of, or advisor to, Acquisition. If this Agreement
is terminated prior to the Effective Time, Acquisition will, at the request of
the Company, deliver to the Company all documents and other material obtained by
Acquisition from the Company or a subsidiary in connection with the transactions
which are the subject of this Agreement or evidence that material has been
destroyed by Acquisition.

11.7 Press Releases. The Company and Acquisition will consult with
each other before issuing any press releases or otherwise making any public
statements with respect to this Agreement or the transactions contemplated by
it, except that nothing in this Paragraph will prevent either party from making
any statement when and as required by law or by the rules of any securities
exchange or securities quotation or trading system on which securities of that
party or an affiliate are listed, quoted or traded.

11.8 Entire Agreement. (a) This Agreement and the documents to be
delivered in accordance with this Agreement contain the entire agreement between
the Company and Acquisition relating to the transactions which are the subject
of this Agreement and those other documents, and, except as provided in
subparagraph (b), all prior negotiations, understandings and agreements between
the Company and Acquisition or Supercanal, or any affiliate or representative of
either of them, including, but not limited to, the Original Merger Agreement,
are superseded by this Agreement and those other documents, and there are no
representations, warranties, understandings or agreements concerning the
transactions which are the subject of this Agreement or those other documents
other than those expressly set forth in this Agreement or those other documents.

(b) If Acquisition is obligated under this Agreement to
complete, but fails to complete, any of the Stock Purchase, the Tender Offers or
the Merger, the Company, at its option, may (i) sue for damages or seek other
recourse for breach of this Agreement, or (ii) sue for damages or seek other
recourse for breach of the Original Agreement as though this Agreement had never
been entered into, provided that in computing damages under the Original
Agreement all transactions completed under this Agreement will be taken into
account. Under either option, the Company may seek declaratory, injunctive or
other non-monetary relief in connection with any breach of this Agreement.

(c) Acquisition acknowledges that neither it nor Supercanal,
nor any of their officers, directors or agents, has any claim against the
Company or any of its officers, directors or employees, based upon a failure of
the Company to fulfill any of its obligations, or otherwise arising, under or
relating to the Original Agreement, and Acquisition waives any such claims for
itself and for Supercanal to the extent Acquisition or Supercanal may have any
such claims.

11.9 Effect of Disclosures. Any information disclosed by a party
in connection with any representation or warranty contained in this Agreement
(including Disclosure Statements and including exhibits to this Agreement) will
be treated as having been disclosed in connection with each representation and
warranty made by that party in this Agreement.

39
<PAGE>

11.10 Captions. The captions of the articles and paragraphs of this
Agreement are for reference only, and do not affect the meaning or
interpretation of this Agreement.

11.11 Prohibition Against Assignment. Neither this Agreement nor
any right of any party under it may be assigned, except that Acquisition may
assign its rights under this agreement to Supercanal or any majority owned
subsidiary of Supercanal.

11.12 Third Party Beneficiaries. Agreement will be solely for the
benefit of the Company and Acquisition, except that (a) Paragraphs 3.13 and 7.7
are for the benefit of, and may be enforced by, each person who is a holder of
an Option or of a warrant listed in Section 5.3 of the Company Disclosure
Schedule, (b)Paragraph 7.1(m) is for the benefit of and may be enforced by, Jack
Gray and Jack Crosby,(c) Paragraph 7.6 is for the benefit of, and may be
enforced by, each person who is entitled to indemnification under that
Paragraph,(d) Paragraphs 10.1 and 11.1 are for the benefit of, and may be
enforced by, the persons entitled to have their fees and expenses paid as
described in those Paragraphs,(e) Paragraph 11.3 is for the benefit of, and may
be enforced by, the owners of the minority interests listed on Exhibit 11.3,(f)
Paragraph 11.5 is for the benefit of, and may be enforced by, the respective
persons listed on Exhibit 11.5, and (g) this Agreement is for the benefit of,
and may be enforced by, Supercanal to the same extent it is for the benefit of,
and may be enforced by, Acquisition.

11.13 Notices and Other Communications. Any notice or other
communication under this Agreement (including, but not limited to, a notice
under Paragraph 7.1(f)) must be in writing and will be deemed given when
delivered in person or sent by facsimile (with proof of receipt at the number to
which it is required to be sent), or on the tenth business day after the day on
which mailed by first class mail from within the United States of America or
Argentina, to the following addresses (or such other address as may be specified
after the date of this Agreement by the party to which the notice or
communication is sent):

If to Acquisition:

Tescorp Acquisition Corporation

c/o Supercanal Holding S.A.

[at the address and facsimile number for
Supercanal Holding S.A.]

with copies to:

Supercanal Holding S.A.
Godoy Cruz 316
Mendoza, Province of Mendoza
Argentina 5500
Attention: Daniel Eduardo Vila, Chairman
Facsimile No.: 546-129-8855

and

Rogers & Wells

40
<PAGE>

200 Park Avenue
New York, New York 10166
Attention: David W. Bernstein
Facsimile No.: 1-212-878-8375

If to the Company:

Tescorp, Inc.
327 Congress Avenue, Suite 200
Austin, Texas 78701
Attention: Jack S. Gray, Jr.
Facsimile No.: 1-512-474-1610

with a copy to:

Klehr, Harrison, Harvey, Branzburg & Ellers
1401 Walnut Street
Philadelphia, Pennsylvania 19102
Attention: Barry Siegel
Facsimile: 1-215-568-6603

11.14 Governing Law. This Agreement will be governed by, and
construed under, the laws of the State of New York relating to contracts made
and to be performed in that state.

11.15 Amendments. This Agreement may be amended only by a document
in writing signed by both the Company and Acquisition.

11.16 Consent to Jurisdiction and Service of Process. Each of the
parties to this Agreement (a) consents to the jurisdiction of any Federal or
state court sitting in the Borough of Manhattan, State of New York, in the
United States of America with regard to any action or proceeding under or
relating to this Agreement or any of the transactions contemplated by this
Agreement, (b) agrees not to attempt to move any such action or proceeding from
any such court to any other court, whether on the ground of inconvenience of the
forum or otherwise (but nothing will prevent a party from removing an action or
proceeding from a state court sitting in the Borough of Manhattan to a Federal
court sitting in that Borough), and (c) consents that process in any such action
or proceeding may be served by registered mail or in any other manner permitted
by the rules of the court in which the action or proceeding is brought.

11.17 Counterparts. This Agreement may be executed in two or more
counterparts, some of which may contain the signatures of some, but not all, the
parties. Each of those counterparts will be deemed an original, but all of them
together will constitute one and the same agreement.

41
<PAGE>

IN WITNESS WHEREOF, the Company and Acquisition have executed this
Agreement, intending to be legally bound by it, on the day shown on the first
page of this Agreement.

TESCORP ACQUISITION CORPORATION

By:
--------------------
Title:

TESCORP, INC.

By:
--------------------
Title:

42
<PAGE>

Exhibit 2.1-C

Conditions to Tender Offers

The capitalized terms used in this Annex A have the meanings set forth in
the attached Agreement, except that the term "Agreement" refers to the attached
Agreement together with this Annex A.

Acquisition will not be required to accept for payment or pay for any
Shares tendered in response to the Tender Offers if:

(i) The number of shares properly tendered in response to the
Tender Offers and not withdrawn, together with the shares of Common Stock
and any shares of 8% Preferred Stock already owned by Acquisition, does not
total more than two-thirds of the outstanding shares of Common Stock and
two-thirds of the outstanding shares of 8% Preferred Stock (this condition
being referred to as the "Minimum Condition");

(ii) There is any 10% Preferred Stock outstanding after the day
which is 65 days after the Initial Stock Purchase Closing Date (if that day
is before the Expiration Date);

(iii) Any statute, rule, regulation, order or injunction has been
enacted, promulgated, entered or enforced by any national or state
government or governmental authority or by any United States or Argentine
court of competent jurisdiction, that would make the acquisition of the
Shares by Acquisition illegal or otherwise prohibit consummation of the
Tender Offers or the Merger; or

(iv) There has been (i) a general suspension of trading in, or
limitation on prices for, securities on the New York Stock Exchange which
continued for at least three business days, (ii) the declaration of a
banking moratorium or any suspension of payments in respect of banks in the
United States or Argentina (whether or not mandatory) which continued for
at least three business days, (iii) the commencement of a war or armed
hostilities or any other international or national calamity directly or
indirectly involving the United States or Argentina, which has a
significant adverse effect on the functioning of financial markets in the
United States or Argentina, (iv) any limitation (whether or not mandatory)
by any United States or Argentine governmental authority or agency on the
extension of credit by banks or other financial institutions which would
have a material adverse effect on Supercanal's or Acquisition's ability to
borrow sufficient funds under its bank facilities to purchase and pay for
all the Shares which are tendered in response to the Tender Offers and to
carry out the Merger on the terms contemplated by the Agreement or (v)
there is a material acceleration or worsening of any of the conditions
described in clauses (i) through (iv) which exists at the date of the
commencement of the Tender Offers.

(v) Any of the representations and warranties of the Company set
forth in the Agreement is not true and correct as of the date of the
Agreement, except failures to be true and correct which would not, in the
aggregate, have a Material Adverse Effect upon the Company;

(vi) Since the date of the Agreement, there has been an occurrence
or group of occurrences (whether or not related) which have had a Material
Adverse Effect upon the Company (other than (i) occurrences which affected
generally the cable television industry worldwide or in Argentina,
including actual or proposed changes in laws or regulations, or (ii) the
transactions contemplated by the Agreement, including the change in control
contemplated by it); or

(vii) the Company has not performed all the obligations it is
required to have performed under the Agreement, except failures which (i)
would, in the aggregate, not materially impair or delay the ability of
Acquisition to consummate the purchase of the Shares which are tendered in
response to the Tender Offers or the ability of Acquisition and the Company
to effect the Merger, (ii) have been caused by or result from a breach of
the Agreement by Acquisition; or (iii) do not, and are not reasonably
expected to, have a Material Adverse Effect on the Company.

(viii) The Agreement has been terminated in accordance with its
terms; or

(ix) The Board withdraws or modifies in a manner adverse to
Acquisition the Board's approval or recommendation of the Tender Offers or
the Merger.

The conditions set forth above are for the sole benefit of Acquisition, and
may be waived by Acquisition, in whole or in part. Any delay by

43
<PAGE>

Acquisition in exercising the right to terminate the Tender Offers because any
of the conditions are not fulfilled will not be deemed a waiver of its right to
do so.

<PAGE>

EXHIBIT 3

TESCORP, INC.
AMENDED AND RESTATED 1991 INCENTIVE PLAN

1. Purpose
-------

The purpose of the Tescorp, Inc. 1991 Incentive Plan (the "Plan") is to
advance the interests of Tescorp, Inc. (the "Company") and its Subsidiaries
(as defined below) by providing incentive awards and stock ownership
opportunities to certain key employees (including officers and directors),
consultants and other individuals who contribute significantly to the
performance of the Company and its Subsidiaries. In addition, the Plan is
intended to enhance the ability of the Company and its Subsidiaries to
attract and retain individuals of superior managerial ability and to motivate
such key employees to exert their best efforts towards future progress and
profitability of the Company and its Subsidiaries. Accordingly, the Company
may make awards ("Awards") to key employees, consultants and other
individuals in the form of (i) options ("Options") to purchase shares of the
Company's common stock, par value $.02 per share ("Common Stock"), (ii)
shares of Common Stock which are restricted as provided in Section 7
("Restricted Stock") and (iii) limited stock appreciation rights ("LSARs").
Options may be either incentive stock options ("ISOs") which are qualified
under Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code"), or nonqualified stock options ("Nonqualified Options").

For purposes of the Plan, a "Subsidiary" shall be any corporation in
which the Company has a direct or indirect ownership interest of 50% or more
of the total combined voting power of all classes of stock in such
corporation.

2. Approval of Awards
------------------

Each Award may be approved in any of the following ways:

A. Board/Committee Approval. The entire Board or the Committee (as
defined below) may vote in advance to approve such Award.

B. Shareholder Approval/Ratification. In compliance with Section 14 of
the Securities Exchange Act of 1934 ("1934 Act"), a majority of the
shareholders of the Company duly entitled to vote on such matters at meetings
held in accordance with the laws of the State of Texas may, either in advance
of

<PAGE>

the Award or no later than the next annual meeting of shareholders,
affirmatively vote to approve such Award.

3. Administration and Interpretation
---------------------------------

A. Administration. The Plan shall be administered by the Compensation
Committee (the "Committee") of the Board of Directors (the "Board") of Tescorp,
Inc. The Committee shall consist solely of two or more "Non-Employee Directors"
within the meaning of Rule 16b-3 of the General Rules and Regulations of the
1934 Act. The Committee may be, amend and rescind rules and regulations for
administration of the Plan and shall have full power and authority to construe
and interpret the Plan. The Committee may correct any defect or any omission or
reconcile any inconsistency in the Plan or, subject to the requirements of
Section 2 herein, in any grant made under the Plan in the manner and to the
extent it shall deem desirable.

Committee members shall be appointed by and shall serve at the pleasure of
the Board. If any members of the Committee possess an interest in any other
transaction for which disclosure would be required pursuant to Rule 404(a) of
Regulation S-K of the General Rules and Regulations of the 1934 Act or are
engaged in a business relationship for which disclosure is required pursuant to
Rule 404(b), then the Committee may not grant Awards under the Plan. The Board
may from time to time appoint members of the Committee in substitution for or in
addition to members previously appointed and may fill vacancies, however caused,
in the Committee. A majority of the members of the Committee shall constitute a
quorum, and the acts of a majority of the members present at a meeting, or the
acts of a majority of the members evidenced in writing, shall be the acts of the
Committee. Members of the Committee may, in the discretion of the Board,
receive compensation for their services as members, and all expenses and
liabilities they incur in connection with the administration of the Plan shall
be borne by the Company.

The day-to-day administration of the Plan may be carried out by such
officers and employees of the Company or its Subsidiaries as shall be designated
from time to time by the Committee. The Committee may employ attorneys,
consultants, accountants, appraisers, brokers or other persons, and the
Committee, the Company and the officers and employees of the Company shall be
entitled to rely upon the advice, opinions or valuations of any such persons.

The Board, the Committee or the shareholders, as the case may be, shall
have concurrent authority to make all decisions concerning specific Awards

<PAGE>

granted under the Plan, including without limitation the selection of the
persons to whom Awards are granted, the number of shares of Common Stock subject
to each Award and the terms and conditions of each Award. The Committee shall
construe the terms and provisions of the Plan and the Agreements and adopt, from
time to time, such rules and regulations, not inconsistent with the terms of the
Plan, as it may deem advisable to carry out the Plan. All decisions by the
Committee shall be final. The effective date of an Award is referred to herein
as the "Grant Date."

B. Interpretation. The Interpretation and construction by the Committee
of any provisions of the Plan or of any grant under the Plan and any
determination by the Committee under any provision of the Plan or any such grant
shall be final and conclusive for all purposes.

C. Limitation on Liability. Neither the Committee nor any member thereof
shall be liable for any act, omission, interpretation, construction or
determination made in connection with the Plan in good faith, and the members of
the Committee shall be entitled to indemnification and reimbursement by the
Company in respect of any claim, loss, damage or expense including counsel fees)
arising therefrom to the full extent permitted by law and the articles of
incorporation of the Company. The members of the Committee, if appointed, shall
be named as insureds under any directors and officers liability insurance
coverage that may be in effect from time to time.

4. Shares Subject to Grants Under the Plan
---------------------------------------

The aggregate number of shares which may be issued under Awards granted
under the Plan shall not exceed 2,000,000 shares of Common Stock- provided
however, that the number of Awards granted to any single executive officer of
the Company during any fiscal year shall not exceed 1,000,000 shares of Common
Stock under the Plan during such year. Such shares may consist of authorized
but unissued shares of Common Stock or previously issued shares of Common Stock
reacquired by the Company. Any of such shares which remain unissued and which
are not subject to outstanding Awards at the termination of the Plan shall cease
to be subject to the Plan, but until termination of the Plan, the Company shall
at all times make available a sufficient number of shares to meet the
requirements of the Plan and the outstanding Awards. The number of shares of
Common Stock which are available for Awards under the Plan shall be decreased by
each exercise of an Option or LSAR, and by each grant of Restricted Stock, and
to the extent that such Award lapses the shares theretofore subject to such
Award may again be subject to other Awards granted under the Plan. If any
Award, in whole or in part, expires or terminates unexercised or is cancelled or
forfeited, the shares

<PAGE>

theretofore subject to such Award may be subject to another Award granted
under the Plan. The aggregate number of shares which may be issued under
Awards granted under the Plan shall be subject to adjustment as provided in
Section 9 hereof.

5. Eligibility
-----------

The individuals who shall be eligible to receive Awards under the Plan
shall be such key employees, directors, independent consultants and other
individuals as the Committee from time to time shall determine; provided, that
only employees of the Company and Subsidiaries shall be eligible to receive
grants of ISOs. In granting Awards, the Board, the Committee or the
shareholders, as the case may be, shall take into consideration the contribution
an individual has made or may make to the success of the Company or its
Subsidiaries and such other factors as the Committee shall determine. The
Board, the Committee or the shareholders, as the case may be, shall also have
the authority to consult with and receive recommendations from officers and
other employees of the Company and its Subsidiaries with regard to these
matters. In no event shall any individual or his legal representatives, heirs,
legatees, distributees or successors have any right to participate in the Plan
except to such extent, if any, as the Committee shall determine.

Awards may be granted under the Plan from time to time in substitution for
stock options, restricted stock or other stock-based compensation awards granted
by other corporations where, as a result of a merger or consolidation of such
other corporation, or the acquisition by the Company or a Subsidiary of stock
of, or other beneficial ownership interest in, such other corporation, the
individuals who held such awards become eligible to receive Awards under the
Plan.

6. Grants and Terms of Options
---------------------------

A. Grants of Options. Grants of Options under the Plan shall be for
such number of shares of Common Stock and shall be subject to such terms
and conditions as the Board, the Committee or the shareholders, as the case
may be, shall designate. Options may be granted by the Board, the
Committee or the shareholders, as the case may be, to any eligible
individual at any time and from time to time.

B. Terms of Options. Each grant of an Option shall be evidenced by
an Agreement executed by the recipient of the Option (the

4
<PAGE>

"Optionee") and an authorized officer of the Company. Each Agreement shall
be in a form approved by the Committee, shall comply with and be subject to
the terms and conditions of the Plan and may contain such other provisions,
consistent with the terms and conditions of the Plan and the specific
Awards, as the Committee shall deem advisable. References herein to an
Agreement shall include, to the extent applicable, any amendment to the
Agreement and any interpretation or construction thereof by the Committee
pursuant to this Plan.

(1) Exercise of Options. Options shall not be exercisable prior
to the date six months following the Grant Date. In the discretion of
the Committee, each Agreement may state that the Option granted
therein may not be exercised in whole or in part for a period or
periods of time specified in such Agreement and may further limit the
exercisability of the Option in such a manner as the Committee deems
appropriate, consistent with the terms of the specific Award. In
addition, the Committee may, by a resolution duly adopted, suspend the
exercisability of all outstanding Options at any time and from time to
time upon a determination, in its discretion that such suspension is
in the best interests of the Company and its shareholders; provided,
that the resolution effecting any such suspension shall also make
provision for the exercise of all outstanding Options for a reasonable
period of time following such suspension. Except as provided herein
or as so specified in whole at any time or in part from time to time
during its term. The Committee may, in its discretion, consistent
with the terms of the specific Award, at any time and from time to
time accelerate the exercisability of all or part of any Option. An
Optionee may exercise an Option by providing written notice to the
Company at any time or from time to time during the period such Option
is exercisable and by satisfying such other conditions as set forth in
the Agreement relating to the Option, including without limitation
satisfying the requirements for tax withholding with respect to such
exercise.

(2) Payment of Option Exercise Price. Upon exercise of an Option, the
full price per share (the "Exercise Price") for the shares with respect to which
the Option is being exercised shall be payable to the Company (i) in cash or by
check payable and acceptable to the Company or (ii) subject to the approval of
the Committee, (a) by tendering to the Company shares of Common Stock owned by
the Optionee having an aggregate Market Value Per Share (as defined below) as of
the date of exercise and tender that is not greater than the

<PAGE>

Exercise Price for the shares with respect to which the Option is being
exercised and by paying any remaining amount of the Exercise Price as
provided in (i) above; provided, the Committee may, upon confirming that the
Optionee owns the number of additional shares being tendered, authorize the
issuance of a new certificate for the number of shares being acquired
pursuant tot he exercise of the Option less the number of shares being
tendered upon the exercise and return to the Optionee (or not require
surrender of) the certificate for the shares being tendered upon the exercise
of (b) by the Optionee delivering to the Company a properly executed exercise
notice together with irrevocable instructions to a broker to promptly deliver
to the Company cash or a check payable and acceptable to the Company to pay
the option exercise price; provided that in the event the Optionee chooses to
pay the Option exercise as provided in (ii)(b) above, the Optionee and the
broker shall comply with such procedures and enter into such agreements of
indemnity and other agreements as the Committee shall prescribe as a
condition of such payment procedure. Payment instruments will be received
subject to collection.

(3) Number of Shares. Each Agreement shall state the total number of
shares of Common Stock that are subject to the Option, which number shall be
subject to adjustment pursuant to Section 9.

(4) Exercise Price. The Exercise Price for each Option shall be fixed on,
or in case of ratification by the shareholders, as of the Grant Date. The
Exercise Price may be greater or, other than with respect to an ISO, less than
the Market Value Per Share on the Grant Date, but in no event less than the par
value of the Common Stock. The Exercise Price shall be subject to adjustment
pursuant to Section 9.

(5) Term. The term of each Option shall be determined at the Grant Date;
provided, however, that each Option shall expire no later than ten years from
the Grant Date and in the event no determination is made to the contrary, shall
expire ten years from the Grant Date, or in the case of an Incentive Stock
Option granted to an employee who owns in excess of 10% of the outstanding
voting stock of the Company, shall expire five years from the Grant Date (such
date, as determined by the Committee or provided for herein, being referred to
hereafter as the "Expiration Time").

(6) Market Value Per Share. "Market Value Per Share" shall be determined
as of any particular date by any fair and reasonable means determined by the
Board, the Committee or the Shareholders, as the case may be.

<PAGE>

(7) Termination of Employment. In the event that an Optionee's employment
with the Company shall terminate for reasons other than (i) retirement, with the
consent of the Company or the Optionee's employing Subsidiary, as the case may
be ("retirement"), (ii) permanent disability or (iii) death, the Optionee shall
have the right, subject to subsections (1) and (5) above, to exercise any Option
at any time during the period of three months following such termination to the
extent the Option was exercisable on the termination date.

In the event that an Optionee's employment with the Company shall terminate
due to retirement or permanent disability, the Optionee shall have the right,
subject to subsections (1) and (5) above, to exercise any Option at any time
during the period of 12 months following such termination, to the extent the
Option was exercisable on the termination date. Whether any termination of
employment is due to retirement or permanent disability, and whether an
authorized leave of absence or absence on military or government service or for
other reasons shall constitute a termination of employment, for the purposes of
the Plan shall be determined by the Committee.

With respect to Options granted to an who is not an employee of the Company
on the Grant Date, the Board, the Committee or the shareholders, as the case may
be, may specify the terms and conditions upon which such Option shall terminate.

If an Optionee shall die while entitled to exercise an Option, the
Optionee's estate, personal representative or beneficiary, as the case may be,
shall have the fight, subject to subsections (1) and (5) above, to exercise the
Option at any time during the period of 12 months following the date of the
Optionee's death to the extent that the Option was exercisable on the date of
the Optionee's death.

The Committee may, in its discretion, consistent with the terms of the
specific grant, (i) accelerate the exercisability of all or part of an Option
that is not otherwise exercisable or (ii) provide that an Option shall remain
outstanding and be exercisable following termination of employment (or other
specified events in the case of nonemployees) on such other terms and conditions
as the Committee shall approve.

(8) Incentive Stock Options. ISOs may be granted only to individuals who
are key employees (including officers who are also key employees) of the Company
at the time the ISO is granted. ISOs may be

7
<PAGE>

granted to the same individual on more than one occasions, but in no event
shall an ISO be granted after December 31, 2000.

No employee shall be eligible to receive an ISO if, on the Grant Date, such
employee owns (including ownership through the attribution provisions of Section
424 of the Code) in excess of 10% of the outstanding voting stock of the Company
(or of its parent or subsidiary as defined in Section 424 of the Code) unless
the following two conditions are met:

(i) the option price for the shares of Common Stock subject to the
ISO is at least 110% of the fair market value of the shares of Common Stock on
the Grant Date, and

(ii) the Agreement provides that the term of the ISO does not exceed
five years.

No employee shall be eligible to receive ISOs (under the Plan and all other
option plans of the Company, its parent and subsidiary corporations) that are
exercisable for the first time in any calendar year with respect to stock with
an aggregate fair market value (determined at the Grant Date) in excess of
$100,000.

(9) Reload Options. In the event a person who is an active employee of the
Company or a Subsidiary shall exercise an Option (the "Original Option") by
paying all or a portion of the Exercise Price of the shares of Common Stock
subject to the Original Option by tendering to the Company shares of Common
Stock owned by such person, an Option to purchase the number of shares of Common
Stock used for such purpose by the employee (the "Reload Option") shall be
granted to the employee as of the exercise date, provided that a Reload Option
has been granted to such Optionee with respect to such Option, as evidenced in
his Agreement. The Exercise Price of the Common Stock subject to the Reload
Option shall be 100% of Market Value Per Share of the Common Stock on such
date, subject to adjustment as provided in Section 9. The Reload Option may be
exercised at any time during the term of the Original Option, subject to such
limitations, if any, as may be placed on such exercisability in the Agreement.

7. Restricted Stock
----------------

A. Awards of Restricted Stock. Restricted Stock may be awarded to any
individual eligible to receive the same, at any time and from time to time.
The issuance of Restricted Stock to an individual pursuant to an Award may
be made subject to such restrictions and the future

<PAGE>

satisfaction or occurrence of terms, conditions or contingencies
(collectively, "Conditions") set when the Award is made, such that failure
of any Condition shall cause all or part of such shares to be forfeited.

B. Description of Restricted Stock. Shares of Restricted Stock may not
be sold, exchanged, pledged, transferred, assigned or otherwise encumbered
or disposed of until the Conditions set at the time of the Award have been
satisfied. A share of Restricted Stock shall be subject to such
restrictions and Conditions as may be established at the time of the Award,
which may include, without limitation, "lapse" and "non-lapse" restrictions
(as such terms are defined in regulations promulgated under Section 83 of
the Code) and the achievement of specific goals.

If an individual is granted shares of Restricted Stock (whether or not
escrowed as provided below), the recipient shall be the record owner of such
shares and shall have the rights of a shareholder with respect to such shares
(unless the escrow agreement, if any, provides otherwise), including the right
to vote and the right to receive dividends or other distributions made or paid
with respect to such shares. Any certificate or certificates representing
shares of Restricted Stock shall bear a legend similar to the following:

The shares represented by this certificate have been issued pursuant to an
Award made under the terms of the Tescorp, Inc. 1991 Incentive Plan and may not
be sold, pledged, transferred, assigned or otherwise encumbered in any manner
except as set forth in the terms of such Award dated 19.

In order to enforce the restrictions and Conditions that may be applicable
to a recipient's shares of Restricted Stock, the Committee may require the
recipient, upon the receipt of a certificate or certificates representing such
shares, or at any time thereafter, to deposit such certificate or certificates,
together with stock powers and other instruments of transfer appropriate
endorsed in blank, with the company or an escrow agent designated by the Company
under an escrow agreement, in such form as shall be determined by the Committee.

After the satisfaction or occurrence of the Conditions and the lapse of all
restrictions, a certificate, without the legend set forth above, shall be
delivered to the recipient for the number of shares that are no longer subject
to restrictions and Conditions. The remaining shares of Restricted Stock issued
with respect to such Award, if any, shall either be reacquired by the Company
and forfeited by the recipient or, if appropriate under the terms of the Award
applicable to such shares, shall continue to be subject to the restrictions and

<PAGE>

Conditions.

C. Payment of Restricted Stock. The satisfaction of the Conditions and
the lapse of all restrictions, and the delivery of a certificate without
the legend set forth above for the portion of such award that is no longer
subject to restrictions and Conditions, is hereinafter referred to as the
"payment" of such portion of the Award. Subject to the provisions above,
each Award shall be paid at the time and in the manner specified at the
time of the Award.

D. Payment in the Event of Termination of Employment. In the event a
recipient's employment with the Company shall terminate prior to the
satisfaction or occurrence of a Condition applicable to all or a portion of
an Award of Restricted Stock, then such portion of the Award shall be
reacquired by the Company and forfeited by the recipient; provided,
however, if the termination of employment is due to the employee's death,
permanent disability or retirement, the Committee may, in its sole
discretion, deem the Conditions to have been met for all or part of such
portion of the Award. With respect to the shares of Restricted Stock
granted to an individual who is not an employee of the Company on the Grant
Date, the Committee may specify the circumstances upon which the shares of
Restricted Stock shall be forfeitable prior to the satisfaction of
applicable Conditions.

If Restricted Stock shall be reacquired by the Company and forfeited as
provided herein, the recipient, or in the event of his death or his personal
representative, shall forthwith deliver to the Secretary of the Company the
certificates for the Restricted Stock awarded pursuant to the Plan to the
recipient, accompanied by such instrument of transfer, if any, as may reasonably
be required by the Secretary of the Company.

If a recipient dies after satisfaction of the Conditions for the payment of
all or a portion of an Award of Restricted Stock but prior to the actual payment
of all or such portion thereof, such payment shall be made to the recipient's
beneficiary or beneficiaries at the time and in the same manner that such
payment would have been made to the recipient.

8. LSARs
-----

A. The Board, the Committee or the shareholders, as the case may be,
shall have authority to grant a right (referred to in the Plan as an
"LSAR") to the holder of any Option (such Option is referred to herein as a

<PAGE>

"Related Option") with respect to all or some of the shares of Common Stock
covered by such Related Option. An LSAR may be granted either at the time
of the grant of the Related Option or at any time thereafter during its
term; idea, no Award of an LSAR may be made after termination of the Plan.
An LSAR shall prove to be evidenced by provisions in the Agreement covering
the Related Option, or an amendment thereto. An LSAR may be exercised only
during the period of seven months following a Change of Control Date (as
defined in Section 8.D hereof). Unless otherwise provided in the respective
Agreement, an LSAR shall be exercisable as to the entire number of shares
covered by the Related Option, without regard to whether the Related Option
is otherwise fully vested.

B. Upon the exercise of an LSAR, the Related Option shall cease to be
exercisable to the extent of the number of shares of Common Stock with
respect to which such LSAR is exercised. Upon the exercise or termination
of a Related Option, the LSAR with respect to such Related Option shall
terminate to the extent of the shares of Common Stock with respect to which
the Related Option was exercised or terminated. In the event that the term
of the Related Option would otherwise expire prior to the end of the
seven-month period specified in Section 8.A., then the term of the Related
Option shall be automatically extended to the end of such period.

C. Upon the exercise of an LSAR, the holder thereof shall receive in cash
whichever of the following amounts is applicable.

(1) in the case of an exercise of an LSAR by reason of the occurrence of
an Offer (as defined in Section 8.D.(1) hereof), an amount equal to the
Offer Spread (as defined in Section 8.F. hereof);

(2) in the case of an exercise of an LSAR by reason of shareholder
approval of an agreement described in Section 8.D.(2) hereof, an amount
equal to the Merger Spread (as defined in Section 8.H. hereof);

(3) in the case of an exercise of an LSAR by reason of shareholder
approval of a plan of liquidation described in Section 8.D.(2) hereof, an
amount equal to the Liquidation Spread (as defined in Section 8.J hereof);

(4) in the case of an exercise of an LSAR by reason of an acquisition of
Common Stock described in Section 8.D.(3) hereof, an amount equal to

<PAGE>

the
Acquisition Spread (as defined in Section 8.L. hereof); or

(5) in the case of an exercise of an LSAR by reason of a change in the
constituency of the Board described in Section 8.D.(4) hereof, an amount
equal to the Other Spread (as defined in Section 8.N. hereof).

D. For purposes of the Plan, the term "Change of Control" shall mean the
occurrence of any one or more of the following events:

(1) any corporation (other than the Company or a Subsidiary), person or
group (within the meaning of Sections 13(d) or 14(d)(2) of the 1934 Act) makes a
tender or exchange offer which, if consummated, would make such corporation,
person or group the beneficial owner (within the meaning of Rule l3d-3 under the
1934 Act) of voting securities of the Company representing more than 25% of the
total number of votes eligible to be cast at any election of directors of the
Company and, pursuant to such offer, purchases are made (an "Offer");

(2) the shareholders of the Company approve an agreement to merge or
consolidate the Company with or into another corporation or to sell, lease or
otherwise dispose of all or substantially all of its assets, or adopt a plan of
liquidation;

(3) any corporation, person or group (within the meaning of Sections 13(d)
and 14(d)(2) of the 1934 Act) becomes the beneficial owner (within the meaning
of Rule l3d-3 under the 1934 Act) becomes the beneficial owner (within the
meaning of Rule 13d-3 under the 1934 Act) of voting securities of the Company
representing more than 25% of the total number of votes eligible to be cast at
any election of directors of the Company; or

(4) those persons who constitute the Directors at the beginning of any
two-year period cease to constitute a majority of the Board at any time during
such two-year period; however, that in no event shall a Change of Control or
Change of Control Date (as provided defined below) be deemed to have occurred if
the Board, by written action taken prior to, and with respect to, an event
otherwise constituting a Change of Control, determines in its discretion that
such event shall not constitute a Change of Control for purposes of the Plan and
the Agreements relating to LSARs and Restricted Stock LSARs (defined below)
entered into in connection with the Plan. As used herein, and subject to the
proviso contained in the preceding sentence, the term "Change of Control Date"
means the first purchase of voting securities of the Company pursuant to

<PAGE>

an Offer, the date of any shareholder approval or adoption of an agreement or
plan referred to in Section 8.D.(2), the date on which the event described
in Section 8.D.(3) occurs, or the date on which the change in constituency of
the Board, described in Section 8.D.(4) occurs, as the case may be.

E. The term "Offer Price Per Share" as used in this Section 8 shall mean, with
respect to the exercise of any LSAR which becomes execrable by reason of the
occurrence of an Offer, the greater of (i) the highest price per share of Common
Stock paid in the Offer or (ii) the highest Market Value Per Share of Common
Stock during such sixty-day period. Any securities or property which are part
or all of the consideration paid for shares of Common Stock in the Offer shall
be valued in determining the Offer Price Per Share at the higher of (A) the
valuation placed on such securities or property by the corporation, person or
other entity making such Offer and (B) the valuation placed on such securities
or property by the Committee.

F. The term "Offer Spread" as used in this Section 8 shall mean an amount
equal to the product computed by multiplying (i) the excess of (A) the Offer
Price Per Share over (B) the Exercise Price per share of Common Stock at which
the Related Option is exercisable, by (ii) the number of shares of Common Stock
with respect to which such LSAR is being exercised.

G. The term "Merger Price Per Share" as used in this Section 8 shall mean,
with respect to the exercise of any LSAR which becomes exercisable by reason of
shareholder approval of an agreement described in Section 8.D.(2), the greater
of (i) the fixed or formula price for the acquisition or conversion of shares of
Common Stock specified in such agreement if such fixed or formula price is
determinable on the date on which such LSAR is exercised, and (ii) the highest
Market Value Per Share of Common Stock during the sixty-day period ending on the
date on which such LSAR is exercised. Any securities or property which are part
or all of the consideration paid for shares of Common Stock pursuant to such
agreement shall be valued in determining the Merger Price Per Share at the
higher of (A) the valuation placed on such agreement and (B) the valuation
placed on such securities or property by the Committee.

H. The term "Merger Spread" as used in this Section 8 shall mean an amount
equal to the product computed by multiplying (i) the excess of (A) the Merger
price Per Share over (B) the Exercise Price per share of Common Stock at which
the Related Option is exercisable, by (ii) the number of shares of Common Stock
with respect to which such LSAR is being exercised.

I. The term "Liquidation Price Per Share" as used in this Section 8 shall

<PAGE>

mean, with respect to the exercise of any LSAR which becomes exercisable by
reason of shareholder approval of a plan of liquidation described in Section
8.D.(2), the greater of (i) the highest amount paid or to be paid per share of
Common Stock pursuant to the plan of liquidation as determined by the Board and
(ii) the highest Market Value Per Share of Common Stock during the sixty-day
period ending on the date on which such LSAR is exercised. Any securities or
property which (A) are part of all the consideration paid for shares of Common
Stock pursuant to such plan of liquidation or (B) are to be sold and the
proceeds distributed in liquidation shall be valued in determining the
Liquidation Price Per Share at the higher of (i) the valuation placed on such
securities or property by the Company upon the distribution of such securities
or property in accordance with the plan of liquidation, if known at the time of
the exercise of such LSAR, and (ii) the valuation placed on such securities or
property by the Committee.

J. The term "Liquidation Spread" as used in this Section 8 shall mean an
amount equal to the product computed by multiplying (i) the excess of (A) the
Liquidation Price Per Share over (B) the Exercise Price per share of Common
Stock at which the Related Option is exercisable by (ii) the number of shares of
Common Stock with respect to which such LSAR is being exercised.

K. The term "Acquisition Price Per Share" as used in this Section 8 shall
mean, with respect to the exercise of any LSAR which becomes exercisable by
reason of an acquisition of voting securities described in Section 8.D.(3), the
greater of (i) the highest price per share of Common Stock paid by such
corporation, person or group during the ninety-day period ending on the Change
of Control Date as stated on the Schedule 13D, 14D-I or similar schedule (or
amendment thereto) filed by such corporation, person or group, and (ii) the
highest Market Value Per Share of Common Stock during the sixty-day period
ending on the date the LSAR is exercised.

L. The term "Acquisition Spread" as used in this Section 8 shall mean an
amount equal to the product computed by multiplying (i) the excess of (A) the
Acquisition Price Per Share over (B) the purchase price per share of Common
Stock at which the Related Option is exercisable, by (ii) the number of shares
of Common Stock with respect to which such LSAR is being exercised.

M. The term "Other Price Per Share" as used in this Section 8 shall mean, with
respect to the exercise of any LSAR by reason of a change in the constituency of
the Board described in Section 8.D.(4), the highest Market Value Per Share of
Common Stock during the sixty day period ending on the date the LSAR is
exercised.

<PAGE>

N. The term "Other Spread" as used in this Section 8 shall mean an amount
equal to the product computed by multiplying (i) the excess of (A) the Other
Price Per Share over (B) the exercise Price per share of Common Stock at which
the Related Option is exercisable, by (ii) the number of shares of Common Stock
with respect to which such LSAR is being exercised.

O. A fight (referred to in the Plan as a "Restricted Stock LSAR") may be
granted to the holder of any shares of Restricted Stock with respect to all or
some of such shares. A Restricted Stock LSAR may be granted either at the time
of the Award of the Restricted Stock or at any time thereafter during the term
of any applicable restrictions- provided, no Award of a Restricted Stock LSAR
may be made after termination of the Plan. Restricted Stock LSARs shall be
evidenced by provisions in the Agreements relating to the Restricted Stock or an
amendment thereto. A Restricted Stock LSAR may be exercised only during the
period of seven months following a Change of Control Date. Each Restricted
Stock LSAR granted under the Plan shall specify the number of shares of
Restricted Stock that are subject to such Restricted Stock LSAR. Unless
provided otherwise in the respective Agreement, the Restricted Stock LSAR may be
exercised with respect to all shares or Restricted Stock whether or not the
restrictions applicable to such shares have lapsed or the Conditions applicable
to such shares have occurred or been satisfied.

P. Upon the exercise of a Restricted Stock LSAR, the holder of the Restricted
Stock will tender to the Company all shares of Restricted Stock as to which the
Restricted Stock LSAR is being exercised and will receive in cash whichever of
the following amounts is applicable:

(i) in the case of an exercise of a Restricted Stock LSAR by reason of the
occurrence of an Offer (as defined in Section 8.D.(1) hereof), an amount equal
to the Offer Price Per Share (as defined Section 8.E. hereof),

(ii) in the case of an exercise of a Restricted Stock LSAR by reason of an
agreement described in Section 8.D.(2) hereof, an amount equal to the Merger
Price Per Share (as defined in Section 8.G. hereof);

(iii) in the case of an exercise of a Restricted Stock LSAR by reason
of shareholder approval of a plan of liquidation described in Section 8.D.(2)
hereof, an amount equal to the Liquidation Price Per Share (as defined in
Section 8.I. hereof);

(iv) in the case of an exercise of a Restricted Stock LSAR by reason of

15
<PAGE>

an acquisition of Common Stock described in Section 8.D.(3) hereof, an amount
equal to the Acquisition Price Per Share (as defined in Section 8.K. hereof);
or

(v) in the case of an exercise of a Restricted Stock LSAR by reason of a
change in the constituency of the Board described in Section 8.D.(4) hereof, an
amount equal to the Other Price Per Share (as defined in Section 8.M. hereof).

9. Recapitalization or Reorganization
----------------------------------

A. The existence of the Plan and the Awards granted hereunder shall not
affect in any way the night or power of the Board or the shareholders of
the company to make or authorize any adjustment, recapitalization,
reorganization or other change in the Company's capital structure or its
business, any merger or consolidation of the Company, any issue of bonds,
debentures, preferred or prior preference stocks ahead of or affecting
Common Stock or the rights thereof, the dissolution or liquidation of the
Company or any sale or transfer of all or any part of its assets or
business, or any other corporate act or proceeding.

B. The shares with respect to which awards may be granted are shares of
Common Stock as presently constituted. If, and whenever, prior to the
termination of the Plan or the expiration of an outstanding Option, the
Company shall effect a subdivision of shares of Common Stock or the payment
of a stock dividend on Common Stock without receipt of consideration by the
Company, the remaining shares of Common Stock available under the Plan and
the number of shares of Common Stock with respect to which outstanding
Options may thereafter be exercised shall be proportionately increased, and
the Exercise Price under outstanding Options shall be proportionately
reduced. If, and whenever, prior to the termination of the Plan or the
expiration of an outstanding Option, the Company shall effect a
consolidation of shares of Common Stock, the remaining shares of Common
Stock available under the Plan and the number of shares of Common Stock
with respect to which any outstanding Option may thereafter be exercised
shall be proportionately reduced, and the Exercise Price under the
outstanding Options shall be proportionately increased.

C. Except as may otherwise be expressly provided in the Plan, the
issuance by the Company of shares of stock of any class or securities
convertible into shares of stock of any class, for cash, property, labor or
services, upon direct sale, upon the exercise of rights or warrants to

<PAGE>

subscribe therefor, or upon conversion of shares or obligations of the
Company convertible into such shares or other securities, and in any case
whether or not for fair value, convertible shall not affect, and no
adjustments by reason thereof shall be made with respect to, the number of
shares of Common Stock available under the Plan or subject to Options
theretofore granted or the Exercise Price per share.

D. If the Company effects a recapitalization or otherwise materially
changes its capital structure (both of the foregoing are herein referred to
as a "Fundamental Change"), then thereafter upon any exercise of an Option
theretofore granted, the holder shall be entitled to purchase under such
Option, in lieu of the number of shares of Common Stock that would have
been received, the number and class of shares of stock and securities to
which the holder would have been entitled pursuant to the terms of the
Fundamental Change if, immediately prior to such Fundamental Change, the
Optionee had been the holder of record of the number of shares of Common
Stock.

E. Any adjustment provided for above shall be subject to any required
shareholder action.

10. Recipient's Agreement
---------------------

If, at the time of the exercise of any Option or award of Restricted Stock,
in the opinion of counsel for the Company, it is necessary or desirable, in
order to comply with any then applicable laws or regulations relating to the
sale of securities, for the individual exercising the Option or receiving the
Restricted Stock to agree to hold any shares issued to the individual for
investment and without intention to resell or distribute the same and for the
individual to agree to dispose of such shares only in compliance with such laws
and regulations, the individual will, upon the request of the company, execute
and deliver to the Company a further agreement to such effect.

11. Withholding for Taxes
---------------------

Any cash payment under the Plan shall be reduced by any amounts required to
be withheld or paid with respect thereto under all present or future federal,
state and local tax and other laws and regulations that may be in effect as of
the date of each such payment ("Tax Amounts"). Any issuance of Common Stock
pursuant to the exercise of an Option or other distribution of Common Stock
under the Plan shall not be made until appropriate arrangements have been made
for the payment of any amounts that may be

<PAGE>

required to be withheld or paid with respect thereto. Such arrangements may,
at the discretion of the Committee, include allowing the participate to
tender to the Company shares of Common Stock owned by the participant, or to
request the Company to withhold a portion of the shares of Common Stock being
acquired pursuant to the exercise or otherwise distributed to the
participant, which have a Market Value Per Share as of the date of such
exercise, tender or withholding that is not greater than the sum of all Tax
Amounts, together with payment of any remaining portion of all Tax Amounts in
cash or by check payable and acceptable to the Company. Payment instruments
will be received subject to collection.

12. Designation of Beneficiary
--------------------------

Each individual to whom an Award has been made under this Plan may
designate a beneficiary or beneficiaries (which beneficiary may be an entity
other than a natural person) to receive any payment that under the terms of such
Award may become payable on or after the individual's death. At any time, and
from time to time, any such designation may be changed or cancelled by the
individual without the consent of any such beneficiary. Any such designation,
change or cancellation must be on a form provided for that purpose by the
Committee and shall not be effective until received by the Committee. If no
beneficiary has been named by a deceased participant, or the designated
beneficiaries have predeceased the individual, the beneficiary shall be the
individual's estate. If an individual designates more than one beneficiary, any
payments under this Plan to such beneficiaries shall be made in equal shares
unless the individual has designated otherwise, in which case the payments shall
be made in the shares designated by the individual.

13. Miscellaneous
-------------

A. No Employment Contract. Nothing contained in the Plan shall be
construed as conferring upon any employee the right to continue in the
employ of the Company or any Subsidiary.

B. Employment with Subsidiaries. Employment by the Company for the
purpose of this Plan shall be deemed to include employment by, and to
continue during any period in which an employee is in the employment of,
any Subsidiary; provided, that for purposes of determining employment with
respect to ISOs, employment by the Company shall be deemed to include
employment by, and to continue during any period in which an employee is in
the employment of any Subsidiary.

18
<PAGE>

C. No Rights as a Shareholder. A participant shall have no rights as a
shareholder with respect to shares covered by such participant's Option or
Restricted Stock award until the date of the issuance of shares to the
employee pursuant thereto. No adjustment will be made for dividends or
other distributions or rights for which the record date is prior to the
date of such issuance.

D. No Right to Corporate Assets. Nothing contained in the Plan shall be
construed as giving any participant, such participant's beneficiaries or
any other person any equity or other interest of any kind in any assets of
the Company or any Subsidiary or creating a trust of any kind or a
fiduciary relationship of any kind between the Company or a Subsidiary and
any such person, except to the extent such person is a holder of shares of
Common Stock issued pursuant to the Plan.

E. No Restriction on Corporate Action. Nothing contained in the Plan
shall be construed to prevent the Company or any Subsidiary from taking any
corporate action that is deemed by the Company or such Subsidiary to be
appropriate or in its best interest, whether or not such action would have
an adverse effect on the Plan or any award made under the Plan. No
participant, beneficiary or other person shall have any claim against the
Company or any Subsidiary as a result of any such action.

F. Non-assignability. Neither a participant nor a participant's
beneficiary shall have the power or right to sell, exchange, pledge,
transfer, assign or otherwise encumber or dispose of such participant's or
beneficiary's interest arising under the Plan or in any Restricted Stock or
Award received under the Plan, nor shall such interest be subject to
seizure for the payment of a participant's or beneficiary's debts,
judgments, alimony, or separate maintenance or be transferable by operation
of law in the event of a participant's or beneficiary's bankruptcy or
insolvency and to the extent any such interest arising under the Plan or
Restricted Stock or Award received under the Plan is awarded to a spouse
pursuant to any divorce proceeding, such interest shall be deemed to be
terminated and forfeited notwithstanding any vesting provisions or other
terms herein or in the Agreement evidencing such Award.

G. Application of Funds. The proceeds received by the Company from the
sale of shares of Common Stock pursuant to the Plan will be used for
general corporate purposes.

<PAGE>

H. Governing Law; Construction. All rights and obligations under the
Plan shall be governed by, and the Plan shall be construed in accordance
with, the laws of the State of Texas without regard to the principles of
conflicts of laws. Titles and headings to Sections herein are for purposes
of reference only, and shall in no way limit, define or otherwise affect
the meaning or interpretation of any provisions of the Plan.

I. Amendment and Termination. The Committee may from time to time and at
any time alter, amend suspend, discontinue or terminate this Plan and any
Awards hereunder provided, however, that no such action of the Committee
may, without the approval of the shareholders of the Company, alter the
provisions of the Plan so as to increase the maximum number of shares of
Common Stock that may be subject to Awards and distributed in the payment
of Awards and exercises under the Plan (except as provided in Section 8).
For the purposes of awarding ISOs, the Plan shall terminate on December 31,
2000, and no ISOs shall be awarded after such date.

J. Preemption by Applicable Laws and Regulations. Anything in the Plan
or any Agreement to the contrary notwithstanding, if, at any time specified
herein or therein for the making of any determination, the issuance or
other distribution of shares of Common Stock or the payment of
consideration to an employee as a result of the exercise of any LSAR, as
the case may be, any law, regulation or requirement of any governmental
authority having jurisdiction in the premises shall require either the
Company or the individual (or the individual's beneficiary), as the case
may be, to take any action in connection with any such determination, the
shares then to be issued or distributed or such payment, the issuance or
distribution of such shares or the making of such determination or payment,
as the case may be, shall be deferred until such action shall have been
taken.

As amended effective as of September __, 1996.

<PAGE>

Exhibit 4

TESCORP, INC.

1993 NON-EMPLOYEE DIRECTORS

STOCK OPTION PLAN

By resolution of its Board of Directors approved as of June 23, 1993,
Tescorp, Inc., a Texas corporation (the 'Corporation"), adopts the following
Non-Employee Director Stock Option Plan (the "Plan"). Capitalized words and
phrases used in the Plan have the meanings stated in Section 17 below.

1. PURPOSE. This Plan is designed to attract and retain highly
qualified NonEmployee Directors and to motivate them to exert their best
efforts for the Corporation and its Affiliates.

2. PERSONS ELIGIBLE. Each person who is a Non-Employee Director as of
the date of the adoption of this Plan, and each person who shall be first
elected to the Board during the term of this Plan and who shall be, as of the
date of such election, a Non-Employee Director, shall be eligible to receive
an Option, except that a Substantial Shareholder may not receive an Option
unless, at the time the Option is granted, the exercise price equals at least
110% of the fair market value of the Stock subject to the Option, and the
Option is not exercisable after five (5) years from the date granted.

3. TOTAL SHARES SUBJECT TO PLAN. Options may be granted for a total of
150,000 shares of Stock. The Corporation shall reserve sufficient shares to
meet the Plan's requirements. Shares issued upon an Option exercise may be
authorized and unissued shares, or shares held in the Corporation's treasury.
If an outstanding Option expires or terminates, shares allocable to the
unexercised portion of the Option may be optioned again under the Plan.

4. PLAN ADMINISTRATION. The Committee shall administer the Plan. The
Committee will interpret and construe the Plan and the terms of any Option
and will make all other decisions necessary or advisable for administering
the Plan.

5. OPTION GRANTS. (a) Each person eligible to receive an Option
pursuant to the terms of Section 2 hereinabove shall, automatically and
without the exercise of discretion on the part of any person, receive as of
the date of the adoption of this Plan, or if such person shall first be
elected to the

<PAGE>

Board during the term of this Plan and shall be, on the date of such
election, a Non-Employee Director, as of the date of such election, a single
Option for the purchase of 8,333 shares of Stock. On the date that each
Non-Employee Director shall have completed one full year of service as a
Non-Employee Director, or, if such person has completed such term of service
previous to the date of adoption of this Plan, on the date of such adoption,
each such person shall receive, automatically and without the exercise of
discretion on the part of any person, a second option for the purchase of an
additional 8,333 shares of Stock, and on the date that each such Non-Employee
Director shall have completed two full years of service as a Non-Employee
Director, or, such person has completed such term or service previous to the
date of adoption of this Plan, on the date of such adoption, each such person
shall receive, automatically and without the exercise of discretion on the
part of any person, a third Option for the purchase of an additional 8,334
shares of Stock, and thereafter, such Non-Employee Director shall not be
eligible to receive any further or additional grants or awards of Options
under this Plan, regardless of whether such Non-Employee Director shall
exercise in whole or in part the Option or Options representing the original
grant.

(b) The Option price must equal the fair market value of the Stock at
the time the Option is granted, as determined by the average closing price of
the Stock for the seven trading days preceding the date of the grant on any
exchange or dealer market that serves as the primary trading market for the
Stock at such time.

(c) An Option may not be granted after 10 years from the Effective Date.
An Option may not be exercised after 10 years from the date the Option is
granted.

(d) Except as provided below, the night of the Optionee to purchase
shares of Stock under each Option shall accrue and vest in three equal annual
installments beginning on the first anniversary of the date of the grant of
such Option.

6. NON-TRANSFERABILITY OF OPTION. An Option may not be transferred
except by will or by the laws of descent and distribution. During an
Optionee's lifetime, only the Optionee or his guardian or legal
representative may exercise his or her Option.

7. EXERCISE AND PAYMENT. An Option may be exercised from time to time
during the term of the Option as to any or all full shares which have vested
under the Option, subject to compliance with the terms of the

<PAGE>

agreement evidencing the Option. Exercise of an Option will not be effective
until the Corporation has received written notice of the exercise, specifying
the whole number of shares to be purchased, accompanied by payment in full of
the aggregate price of the Stock purchased. Fractional shares will not be
issued or sold. The purchase price of Stock for which an Option is exercised
must be paid to the Corporation in full at the time of exercise. Payment
must be in the form of cash or a certified or cashier's check. Within a
reasonable time after payment is received, the Corporation shall forward to
Optionee a certificate representing the Stock purchased.

8. EXERCISE IN THE EVENT OF TERMINATION. (a) If an Optionee ceases to
be a Director of the Corporation for any reason other than death or
disability, the Optionee may exercise the outstanding portion of his or her
Option at any time within three months after such termination to the extent
Optionee's right to exercise has accrued. Notwithstanding the prior if
Optionee is removed from his position as a Director for dishonesty or other
acts detrimental to the interests of the Corporation or an Affiliate, all
Options granted to Optionee will automatically be void and nonexercisable
immediately upon the occurrence of such termination.

(b) If an Optionee ceases to be a Director of the Corporation because of
death or because of a disability, the outstanding portion of his or her
Option may be exercised at any time within one year after the date of such
termination, to the extent the Optionee's right to exercise has accrued under
this Plan. In the case of death, the executor or administrator of the
Optionee's estate or any person who acquired the Option by bequest or
inheritance may exercise it.

(c) The exercise periods in paragraphs (a) and (b) are subject to the
10-year limitation of Section 5(c) and may not extend such limitation.

9. NO SHAREHOLDER RIGHTS. An Optionee will not have any rights as a
shareholder regarding any Option shares before the date when the Corporation
issues Optionee a certificate for such shares. No adjustment will be made
for dividends or distributions or other rights for which the record date
occurs before the certificate is issued.

10. NO EMPLOYMENT RIGHTS. Neither the Plan nor any Option confer upon
an Optionee any right to continue as a Director of the Corporation, nor do
they limit any right of the shareholders of the Corporation to remove a
Director at any time.

<PAGE>

11. ADJUSTMENT UPON CHANGE IN CAPITALIZATION. (a) In the event that the
Corporation shall hereafter at any time change as a whole, by split-up,
subdivision or combination in any manner or by the making of a stock
dividend, the number of shares of Stock into a different number of shares of
Stock, (i) both (A) the aggregate number of shares of Stock subject to this
Plan as specified in Paragraph 3 hereinabove and (B) the number of shares of
Stock which immediately prior to such change the holders of options shall
have been entitled to purchase, shall be increased or decreased in direct
proportion to the increase or decrease, respectively, in the number of shares
of Stock outstanding immediately prior to such change, and (11) the Option
Price per share applicable to such Option shall be increased or decreased as
the case may be, in inverse proportion to such increase or decrease in the
number of shares of Stock outstanding immediately prior to such change.

(b) A dissolution or liquidation of the Corporation, a merger or
consolidation in which the Corporation is not the surviving corporation, or a
transaction in which another corporation becomes the owner of 100% or more of
the total combined voting power of all classes of stock of the Corporation
will cause every Option then outstanding to terminate, and in such event, the
Optionee holding each then outstanding Option will have a right, exercisable
within a period of 30 days immediately prior to the closing of such
dissolution, liquidation, merger, consolidation, or transaction, to exercise
such Option without regard to any limitation on exercise prior to the date
contained in an option agreement, unless such Option has expired or been
terminated pursuant to its terms.

12. DUTY TO FURNISH INFORMATION. Each Optionee must furnish to the
Corporation all information requested by the Corporation to enable it to
comply with any reporting or other requirement imposed upon the Corporation
under any applicable statute or regulation.

13. COMPLIANCE WITH FEDERAL AND STATE SECURITIES LAW. An Option may not
be exercised in whole or in part unless (i) a registration statement under
the Securities Act is filed and effective for shares subject to the Option,
and exercise of the Option and issuance of shares thereunder are qualified
under any applicable state securities or Blue Sky laws; or (ii) exercise of
the Option and issuance of shares thereunder without Securities Act
registration or state law qualification is otherwise permissible, and the
Corporation receives an opinion of counsel acceptable to the Corporation to
that effect. A certificate for shares issued upon exercise of an Option
which have not been registered under the Securities Act or qualified under
applicable state securities or Blue Sky laws must bear the following legend:

<PAGE>

"The Securities represented by this instrument have been acquired for
investment and have not been registered under the federal Securities Act of
1933, as amended, or the securities laws of any state. Without such
registration, such securities may not be sold, pledged, hypothecated or
otherwise transferred, except upon delivery to the Corporation of an
opinion of counsel satisfactory to the Corporation that registration is not
required for such transfer or the submission to the Corporation of such
other evidence as may be satisfactory to the Corporation to the effect that
any such transfer shall not be in violation of the Securities Act of 1933,
as amended, or applicable state securities laws or any rule or regulation
promulgated thereunder."

14. AMENDMENT AND DISCONTINUANCE. (a) Subject to the restrictions of (b)
and (c) below, the Board or the shareholders of the Corporation may amend,
suspend, or discontinue the Plan at any time.

(b) The Board may not increase the total number of shares reserved for
Options under Section 3. Neither the Board nor the shareholders may allow an
Option to be granted for a price less than the amount determined under
Section 2 or 5(b), or deprive an Optionee of any rights under an existing
Option. Neither the Board nor the shareholders may amend the provisions of
Section 5 more than once every six months, other than to comport with changes
in the Internal Revenue Code, the Employee Retirement Income Security Act, or
the rules thereunder.

(c) The Corporation's shareholders must approve any amendment which
materially increases benefits under the Plan, increases aggregate shares of
Stock subject to the Plan, materially modifies the eligibility requirements
for Plan participation, or gives any person discretion with respect to the
issuance of Options.

15. APPROVAL. Options may be granted at any time on or after the
Effective Date. No Option may be exercised until the Plan is approved by
shareholders of the Corporation holding a majority of shares present and
voting at the next meeting of shareholders following the Effective Date. The
Plan will cease, and all Options will be invalid, if such Shareholder
approval does not occur within 12 months of the Effective Date.

16. OPTION AGREEMENT. Each Option must be evidenced by a written
agreement, substantially in the form attached hereto as Exhibit A, signed by
the Optionee and by an authorized officer of the Corporation. Terms

<PAGE>

of the agreement must conform to the Plan, state the Option price and specify
the period for which the Option is granted. The agreement may contain such
other terms consistent with the provisions of the Plan as the Committee may
deem appropriate.

17. DEFINITIONS AND OPERATING RULES. As used in this Plan, the words
and phrases below have the following meanings, and the following rules apply:

(a) AFFILIATE - a Parent or Subsidiary.

(b) BOARD - the Board of Directors of the Corporation.

(c) COMMITTEE - The Committee appointed by the Board. At such time, if
any, as the Corporation has registered any equity security under Section 12
of the Securities Exchange Act, all members of the committee must thereafter
be Disinterested Persons. The board may fill vacancies on the Committee and
from time to time may remove members from or add members to the committee.
The committee will select one of its members as Chairman and will hold
meetings when and where it determines. -A majority of the Committee members
will constitute a quorum for a Committee meeting. A majority vote of the
Committee at which a quorum is present, or decisions reduced to writing and
signed by a majority of the committee membership, will be valid acts of the
Committee. No Committee member will be liable for any action or decision
made in good faith concerning the Plan or any Option.

(d) CORPORATION - Tescorp, Inc., a Texas corporation.

(e) DISINTERESTED PERSON - a person who is not eligible at the time he
or she exercises discretion in administering the Plan, and has not at any
time within the previous year been eligible to selection as a person who may
receive Options under the Plan or under any other plan of the Corporation or
Affiliate which entitles participants therein to acquire stock, stock options
or stock appreciation rights of the Corporation or an Affiliate. This term
will be construed in accordance with the definition of Disinterested Person
stated in Rule l6b - 3(c)(3) issued by the Securities and Exchange Commission.

(f) EFFECTIVE DATE - the date as of which the shareholders approve the
Plan which shall be the date on which it takes full force and effect.

(g) EMPLOYEE - any person employed by the Corporation or an Affiliate of
the Corporation during a calendar year in which the Committee

<PAGE>

grants Options.

(h) NON-EMPLOYEE DIRECTOR - any member of the Board who is not also an
Employee of the Corporation apart from such Board Membership.

(i) OPTION - an Option granted under this Plan.

(j) OPTIONEE - the holder of an unexpired Option which has not been
exercised in full. This term includes the executor or administrator of the
holder's estate, or any person who inherited all or part of the Option, and
who may validly exercise the Option under Section 8(b) of the Plan.

(k) PARENT - any corporation which qualifies at the time of an Option
grant as a parent in an unbroken chain of corporations ending with the
Corporation, determined by using the definition of "parent corporation"
contained in Section 425(e) of the Code or any substantially similar
provision later enacted.

(l) PLAN - the Tescorp, Inc. 1993 Non-Employee Directors Stock Option
Plan, as stated in this document and including any subsequent amendments
approved by the Board or, when required by law or under the terms of this
Plan, by the shareholders of the Corporation.

(m) SECURITIES ACT - the federal Securities Act of 1933, as amended.

(n) SECURITIES EXCHANGE ACT - the federal Securities Exchange Act of
1934, as amended.

(o) STOCK - shares of common stock, $0.02 par value per share, issued by
the Corporation or any other class of common stock of the corporation
hereafter issued in exchange or in substitution thereof which has dividend
and voting rights no less favorable than the voting power and dividend rights
or presently outstanding Common Stock of the Corporation, provided all shares
reserved for sale under the Plan will be free of preemptive rights of
shareholders of the Corporation.

(p) SUBSIDIARY - any corporation which qualifies at the time of an
Option grant as a subsidiary in an unbroken chain of corporations beginning
with the Corporation, determined by using the definition of "subsidiary
corporation" contained in Section 425(f) of the Code or any substantially
similar provision later enacted.

(q) SUBSTANTIAL SHAREHOLDER - a director who owns more than

<PAGE>

10% of the total combined voting power of all classes of stock of the
Corporation and Affiliates.

APPROVED by the Board of Directors by duly adopted resolution as of June
23, 1993.

RATIFIED AND APPROVED by the Shareholders of the Corporation by duly
adopted resolution ____________, 1997.

_________________________________
Secretary

<PAGE>

THE SECURITIES REPRESENTED BY THIS DOCUMENT HAVE BEEN ACQUIRED FOR INVESTMENT
AND HAVE NOT BEEN REGISTERED UNDER THE FEDERAL SECURITIES ACT OF 1933, AS
AMENDED, OR THE SECURITIES LAWS OF ANY STATE. WITHOUT SUCH REGISTRATION, SUCH
SECURITIES MAY NOT BE SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED,
EXCEPT UPON DELIVERY TO THE COMPANY OF AN OPINION OF COUNSEL SATISFACTORY TO THE
COMPANY THAT REGISTRATION IS NOT REQUIRED FOR SUCH TRANSFER OR THE SUBMISSION TO
THE COMPANY OF SUCH OTHER EVIDENCE AS MAY BE SATISFACTORY TO THE COMPANY TO THE
EFFECT THAT ANY SUCH TRANSFER SHALL NOT BE IN VIOLATION OF THE SECURITIES LAWS
OR ANY RULE OR REGULATION PROMULGATED THEREUNDER.

NON-TRANSFERABLE
STOCK OPTION FOR THE PURCHASE OF
COMMON STOCK
OF
TESCORP, INC.

This is to certify that, for value received, ______________ ("Optionee") is
entitled, subject to the terms and conditions hereinafter set forth, to purchase
up to shares of the Common Stock, $0.02 par value ("Common Stock"), of Tescorp,
Inc., a Texas corporation (the "Corporation"), from the Corporation at the
purchase price of ______________ Dollars ($____) per share, and to receive a
certificate or certificates for the shares of Common Stock so purchased, upon
delivery for appropriate endorsement of this Option accompanied by (i) payment
of purchase price the for each share purchased either in cash or by certified or
cashier's check, payable to the order of the Corporation and (ii) an opinion of
counsel acceptable to the Corporation, or such other evidence as may be
satisfactory to the Company, to the effect that registration is not required
under the Securities Act of 1933, as amended (the "1993 Act") or

<PAGE>

applicable state securities laws or any rules or regulations promulgated
thereunder.

Except as otherwise provided below, the right to purchase shares under this
Option shall be exercisable in whole or in part from the date hereof until [date
10 years from the date of grant], provided that any and all rights to purchase
shares hereunder shall terminate on the date which is three (3) months following
the date that the holder hereof ceases, for whatever reason (except as set forth
hereinafter), to be a director of the Corporation, and provided further that any
and all rights to purchase shares hereunder shall terminate on the date that the
holder hereof is removed from his position as a director for dishonesty or other
acts detrimental to the interests of the Corporation or an affiliate of the
Corporation. The right of the Optionee to purchase shares hereunder shall
accrue and vest in three equal annual installments beginning at the grant of
such Option.

During the lifetime of the Optionee, this Option shall be exercisable
during its term and to the extent specified above, only by the Optionee.
Provided, however, that in the event of the death of the holder hereof, this
Option may be exercised in whole or in part by the executor of administrator of
the Optionee's estate or by any person who acquires the option by bequest or
inheritance within a period not to exceed one (1) year following such holder's
death to the extent only of the number of such shares the holder was entitled

<PAGE>

to purchase on the date of such holder's death.

If the Corporation shall (i) merge or consolidate with another corporation,
(ii) sell all, or substantially all of its assets, (iii) liquidate or dissolve,
or (iv) register the transfer of one hundred percent (100%) of its outstanding
Common Stock to persons who were not owners immediately before such transfer,
then this Option shall terminate on the date and immediately prior to the time
such merger, consolidation, sale or transfer becomes effective or is
consummated, provided that in such event the holder of the Option shall have the
right immediately prior to the effectiveness or consummation of such merger,
consolidation, transfer or sale, to exercise in whole or in part such Option
without regard to any limitation on exercise prior to such date contained in
this Option, unless this Option has otherwise expired or been terminated
pursuant to its terms.

The exercise of this Option in part shall be indicated by endorsement
hereon by the Corporation, showing the number of shares with respect to which it
was exercised.

This Option may not be transferred in whole or in part except by will or
the operation of the laws of descent and distribution upon the death of the
Optionee. During the Optionee's lifetime, only the Optionee or his guardian or
legal representative may exercise the Option.

The Corporation agrees at all times to reserve or hold available a

<PAGE>

sufficient number of shares of Common Stock to cover the number of shares
issuable upon the exercise of this Option.

This Option shall not entitle the holder hereof to any voting rights as a
shareholder of the Corporation, or to any rights whatsoever, except the rights
herein expressed, and no dividends (other than share dividends as provided
elsewhere herein) shall be payable or accrue in respect to this Option or the
interest represented hereby or the shares purchasable hereunder until or unless,
and except to the extent that this Option shall be exercised.

Subject to any required action by the shareholders of the Corporation,
the number of shares of Common Stock covered by this Option, and the price
per share thereof, shall be proportionately adjusted for any increase or
decrease in the number of issued shares of Common Stock of the Corporation
resulting from a stock split (whether by subdivision or consolidation of
shares) or payment of a stock dividend on the Common Stock.

This Option is granted on the condition that the purchases of shares
hereunder shall be held for investment purposes without a view towards
resale, and such stock may not be resold or distributed unless: (i) the stock
issued pursuant to the exercise of this Option is registered under the
Securities Act of 1933, as amended, and any applicable state securities or
Blue Sky law; or (ii) a resale [of] such stock without such registration
under the Securities Act of 1933 and any applicable state securities or Blue
Sky laws would otherwise be

<PAGE>

permissible, and the Corporation receives an opinion of counsel acceptable to
the Corporation to the effect that registration is not required under the
Securities Act of 1933 or any other applicable law, regulation or rule of any
governmental agency. Any shares issues upon the exercise of this Option not
registered under the Securities Act of 1933, as amended, shall bear the
following legend:

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE FEDERAL SECURITIES ACT OF
1933, AS AMENDED, OR THE SECURITIES' LAWS OF ANY STATE. WITHOUT SUCH
REGISTRATION, SUCH SECURITIES MAY NOT BE SOLD, PLEDGED, HYPOTHECATED OR
OTHERWISE TRANSFERRED, EXCEPT UPON DELIVERY TO THE COMPANY OF AN OPINION OF
COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED FOR
SUCH TRANSFER OR THE SUBMISSION TO THE COMPANY OF SUCH OTHER EVIDENCE AS
MAY BE SATISFACTORY TO THE COMPANY TO THE EFFECT THAT ANY SUCH TRANSFER
SHALL NOT BE IN VIOLATION OF THE SECURITIES ACT OF 1933, AS AMENDED, OR
APPLICABLE STATE SECURITIES LAWS OR ANY RULE OR REGULATION PROMULGATED
THEREUNDER.

GRANTED on ____________, 199__.

TESCORP, INC.

By:______________________________
President

<PAGE>

EXHIBIT 5

This Programming Purchase Agreement (the "Agreement") is dated December 5,
1997, by and between Tescorp, Inc. (the "Purchaser") and Supercanal Holding
S.A. (the "Seller"). Intending to be legally bound by the terms and
conditions hereof, the parties agree as follows:

1. Rights.

a. Right to Purchase Programming. Purchaser shall have the nonexclusive
right, but not the obligation, to purchase from Seller any television
programming which Seller has the right to sell to Purchaser and Purchaser
desires to purchase.

b. Consideration. Purchaser's right to enter into this Programming
Agreement with Seller is given in exchange for Purchaser's agreement to
execute that certain Stock Purchase and Merger Agreement by and between
Purchaser and Tescorp Acquisition Corporation, a wholly owned subsidiary of
Seller. In addition to such consideration, Purchaser shall convey to Seller
the following consideration in exchange for the programming it purchases from
Seller:

i. An amount equal to Seller's actual cost of the programming
(not including internal overhead or similar costs), an estimate of which
shall be listed by Seller in Exhibit "A" hereto on a per subscriber basis.

ii. The right for Seller to include the total number of
Purchaser's subscribers in Seller's subscription base for the purpose of
negotiating contracts with individual programmers.

c. No Obligation to Purchase. Purchaser shall have no obligation to
purchase any programming from Seller. Purchaser shall have no obligation to
exclusively purchase its programming from Seller, but shall have the right to
enter into and maintain contracts to purchase programming from suppliers
other than Purchaser. Purchaser shall have the right, in its sole
discretion, to terminate its obligation to purchase programming from Seller
under this Agreement as follows:

i. In the case of individual programs, if Purchaser is able to
independently purchase comparable programming at a lower cost than Seller's,
provided that Seller shall have the right, but not the obligation, to
continue to sell such individual programs to Purchaser at such lower cost.

ii.In the case of all programming, if the total of (a) Seller's
cost; plus (b) Purchaser's continued programming costs from other sources;
plus (c) Purchaser's cost for substitute programming for Seller's programs
which Purchaser is not able to distribute to its subscribers exceeds
Purchaser's existing cost of programming.

2. Delivery and Distribution of Seller's Services. Seller shall deliver all
programming to Purchaser in a manner consistent with industry standards as they
currently exist in Argentina, and

<PAGE>

on a best efforts basis such that the programming is ready for distribution
when it is received by Purchaser.

3. Representations and Warranties; Indemnification.

a. Seller hereby represents and warrants that it has the right, power and
authority to enter into and perform this Agreement and has obtained the
appropriate and necessary authorizations, licenses and permissions from any
and all third parties and governmental agencies or authorities that may be
required of Purchaser and/or Seller for the license, delivery and
transmission of Seller's programming in Purchaser's transmission areas.

b. Purchaser and Seller shall each indemnify and forever hold harmless
the other, the other's affiliated companies and their respective officers,
directors, employees and agents from all liabilities, claims, costs, damages
and expenses (including, without limitation, reasonable counsel fees of
counsel of the other party's choice) arising out of any breach or claimed
breach of any representation or any of its obligations pursuant to this
Agreement.

c. Seller shall indemnify Purchaser against any and all claims, damages,
liabilities, costs and expenses arising out of the distribution, pursuant to
this Agreement, of Seller's programming to the extent that such claims,
damages, liabilities, costs and expenses are (i) based upon alleged libel,
slander, defamation, invasion of the right of privacy, or violation or
infringement of copyright or literary or dramatic rights arising out of the
content of Seller's programming (ii) based upon the distribution of the
Seller's programming as furnished by Seller without deletions by Purchaser;
and (iii) not based upon any material added by Purchaser to the Seller's
programming.

d. Each party shall so indemnify the other only if such other party gives
the indemnifying party prompt notice of any claim or litigation to which its
indemnity applies; it being agreed that the indemnifying party shall have the
right to assume the defense of any or all claims or litigation to which its
indemnity applies and that the indemnified party will cooperate fully with
the indemnifying party in such defense and in the settlement of such claim or
litigation.

e. Except as herein provided to the contrary, neither Purchaser nor
Seller shall have any rights against the other party hereto for claims by
third persons or for the nonoperation of facilities or the nonfurnishing of
Sellers programming services if such nonoperation or nonfurnishing is due to
failure of equipment, action or claims by any third person, labor dispute or
any cause beyond such party's reasonable control.

4. General.

a. Term. This Programming Agreement shall commence as of the date
hereof and shall be in effect for a period of ten years; provided, however,
either party may extend this Agreement for successive one year terms by
providing the other party with written notice not later than one

<PAGE>

(1) month prior to the termination hereof.

b. Confidentiality. The terms and conditions, other than the existence
and duration, of this Agreement shall be kept confidential by the parties
hereto and shall not be disclosed by either party to any third party except
as may be required by any applicable laws, regulations, court order or
governmental agency of competent jurisdiction, and except to a party's
accountants, auditors, and legal counsel, each of whom must first agree to be
bound by this paragraph.

c. Severability. The invalidity under applicable law of any provision
of this Agreement shall not affect the validity of any other provision of
this Agreement, and in the event that any provision hereof is determined to
be invalid or otherwise illegal, this Agreement shall remain effective and
shall be construed in accordance with its terms as if the invalid or illegal
provision were not contained herein.

d. Applicable Law. Regardless of the place of execution hereof, this
Agreement, all amendments hereto, and any and all issues or controversies
arising herefrom or related hereto, shall be governed by and construed
exclusively in accordance with the laws and decisions of the State of New
York, the United States, without giving effect to its conflict of laws
principles. Seller hereby consents to personal jurisdiction in and service of
process by any competent state or federal court in the State of New York.
Additionally, the parties hereto agree that the State of New York shall be
the exclusive forum and situs for the resolution of any and all disputes,
controversies or matters arising herefrom or related hereto. Seller agrees
that service of process by mail shall be effective service of same and such
service shall have the same effect as personal service within the State of
New York and result in jurisdiction over Seller in the appropriate forum in
the State of New York.

e. Entire Agreement. This Agreement constitutes the entire agreement
between the parties with respect to the purchase of Seller's programming by
Purchaser and supersedes all prior or contemporaneous written or oral
agreements and representations between the parties with respect thereto.
This Agreement may not be amended, modified or altered in any manner, unless
such amendment, modification or alteration is in writing and is signed by
duly authorized representatives of the parties. This Agreement is
enforceable by its own terms.

f. No Joint Venture or Agency Relationship. Nothing herein shall be
deemed to create any joint venture, partnership or agency relationship
between the parties, and neither party is authorized to or shall act toward
third parties or the public in any manner which would indicate any such
relationship with the other.

g. Waiver. A waiver by either party of any of the terms or conditions of
this Agreement in any instance shall not be deemed or construed to be a
waiver of such term or condition for the future, or of any subsequent breach
thereof. All remedies and rights contained in the Agreement shall be
cumulative and none of them shall be in limitation of any other remedy or
right of either party.

<PAGE>

IN WITNESS WHEREOF, the parties hereto have caused their duly authorized
representatives to execute the Agreement.

Supercanal Holding S.A. Tescorp, Inc.

By: By:
--------------------- ---------------------

Title: Title:
--------------------- ------------------------

<PAGE>

EXHIBIT "A"

<PAGE>

[Letterhead]

December 8, 1997

Board of Directors
Tescorp, Inc.
327 Congress Avenue, Suite 200
Austin, Texas 78701

Members of the Board:

We understand that Tescorp Acquisition Corporation ("Acquisition"), a
wholly owned subsidiary of Supercanal Holding S.A. and Tescorp, Inc.
("Tescorp" or the "Company") have entered into an Stock Purchase and Merger
Agreement dated as of sEptember 16, 1997 (the "Agreement") and subsequently
amended as of December 5, 1997 (the "Amended Agreement") regarding the
proposed purchase of the Company in cash, by Acquisition (the "Proposed
Acquisition"). The Amended Agreement provides that, following the purchase of
6,006,006 shares of Tescorp Common Stock for a total consideration of
$20,000,000, Acquisition will offer to purchase all the outstanding Tescorp
Common Stock for a per share amount equal to $144.00 in cash, plus an amount
equal to accrued and unpaid dividends. The terms and conditions of the
Proposed Acquisition are set forth in more detail in the Amended Agreement.

We have acted as financial advisor to the company in connection with its
review of the strategic alternatives for the Company and with the negotiation
of the Proposed Acquisition, and have been requested by the Company to render
our opinion with respect to the fairness, from a financial point of view to
the Company's stockholders, of the consideration to be offered to such
stockholders in the Proposed Acquisition. We have not been requested to opine
as to, and our opinion does not in any manner address, the Company's
underlying business decision to proceed with or effect the Proposed
Acquisition.

In arriving at its opinion, we reviewed and analyzed, among other things,
the following: (i) the Agreement and the Amended Agreement; (ii) publicly
available information concerning Tescorp which we believed to be relevant to
its inquiry; (iii) financial and operating information with respect to the
business, operations and prospects of Tescorp furnished to us by Tescorp;

MEMBER OF THE NEW YORK STOCK EXCHANGE AND OTHER PRINCIPAL EXCHANGES

<PAGE>

Tescorp, Inc.
Page Two

(iv) trading history of Tescorp's Common Stock up to September 15, 1997 (the
last trading day prior to the September 16, 1997 Agreement); (v) a comparison
of the historical financial results and present financial condition of
Tescorp with those of other publicly traded companies which we deemed
relevant; and (vi) a comparison of the financial terms of the Proposed
Acquisition with the terms of certain other recent transactions which we
deemed relevant. In addition, we had discussions with the management of
Tescorp concerning the Company's business, operations, assets, financial
condition and prospects, and undertook such other studies, analyses and
investigations as we deemed appropriate for the purposes of the opinion
expressed herein.

In connection with our review, we assumed and relied upon the accuracy
and completeness of the financial and other information used by it in
arriving at our opinion without independent verification and further relied
upon the assurances of management of Tescorp that they were not aware of any
facts that would make such information inaccurate. With respect to the
financial and operating information relating to the business, operations and
prospects of prepared on a basis reflecting the then best currently available
estimates and judgments of the management of Tescorp. In arriving at our
opinion, we did not make nor obtain any evaluations or appraisals of the
assets or liabilities of Tescorp. Our opinion is necessarily based upon
market, economic and other conditions as they existed on, and could be
evaluated as of, the date of this letter.

We have acted as financial advisor to the Company in connection with the
Proposed Acquisition and will receive a fee for our services, a portion of
which is contingent upon the consummation of the Proposed Acquisition. In
addition, the Company has agreed to indemnify us for certain liabilities
arising out of the rendering of this opinion. We have performed various
investment banking services for Tescorp in the past and have received fees
for such services. In the ordinary course of our business, we actively trade
in the equity securities of the Company for our own account and for the
accounts of our customers and, accordingly, may at any time hold a long or
short position in such securities. In addition, certain of our affiliated
funds under management hold long positions in the securities of the Company.

<PAGE>

Tescorp, Inc.
Page Three

Based upon and subject to the foregoing, we are of the opinion as of the
date hereof that, from a financial point of view, the consideration to be
offered to the Company's stockholders in the Proposed Acquisition is fair to
such stockholders.

This opinion is solely for the use and benefit of the Board of Directors
of the Company and shall not be disclosed publicly or made available to, or
relied upon by, any third party without our prior approval. This opinion is
not intended to be and does not constitute a recommendation to any
stockholder as to how such stockholder should vote with respect to the
Proposed Acquisition.

Very truly yours,

Arnhold and S. Bleichroeder, Inc.

<PAGE>
TESCORP, INC.

December 10, 1997

Dear Shareholder:

On behalf of the Board of Directors of Tescorp, Inc. (the "Company"), we are
pleased to inform you that the Company has entered into an Amended Stock
Purchase Agreement, dated as of November 26, 1997 (the "Merger Agreement"), with
Tescorp Aquisition Corporation ("Acquisition"), a wholly-owned subsidiary of
Supercanal Holding S.A. ("Supercanal"), pursuant to which, on December 8, 1997,
Acquisition commenced a cash tender offer (the "Offer") to purchase (i) all
outstanding shares of the Company's Common Stock (the "Common Stock") for $4.50
per share and (ii) all outstanding shares of the Company's Series 1995 8%
Convertible Preferred Stock (the "8% Preferred Stock") for $144 plus accrued and
unpaid dividends per share (a share of either class of stock is a "Share").
Under the Merger Agreement, assuming the Offer is successful, it will be
followed by a merger (the "Merger") in which (i) any remaining shares of Common
Stock not tendered pursuant to the Offer will be converted into the right to
receive a cash amount of $4.50 per share, without interest and (ii) any
remaining shares of 8% Preferred Stock will be converted into the right to
receive a cash amount of $144 plus accrued and unpaid dividends per share,
without interest (except any shares as to which the holder has properly
exercised dissenters' rights of appraisal).

YOUR BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE OFFER AND MERGER AND
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS OF THE COMPANY ACCEPT
THE OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER.

In arriving at this recommendation, the Board of Directors gave careful
consideration to the factors described in the attached Schedule 14D-9 (without
the bulky exhibits), including, among other things, the opinion of Arnhold and
S. Bleichroeder, Inc., the Company's financial advisor, that the consideration
to be received by the holders of Shares in the Offer and Merger is fair to such
holders from a financial point of view.

We urge you to read the information contained in our Schedule 14D-9, as well
as the materials provided to you by Aquisition and Supercanal, carefully in
making your decision with respect to tendering your Shares pursuant to the
Offer.

On behalf of the Board of Directors,

/s/ Jack S. Gray, Jr.

Jack S. Gray, Jr.
DIRECTOR, PRESIDENT AND
CHIEF OPERATING OFFICER

327 Congress Avenue, Suite 200, Austin, Texas 78701, (512)476-2995, Fax
(512)474-1610