<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14D-1
Tender Offer Statement Pursuant to Section 14(d)(1) of the
Securities Exchange Act of 1934
ALFA LEISURE, INC.
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(Name of Subject Company [Issuer])
JOHNNIE R. CREAN
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(Bidder)
Common Stock, no par value
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(Title of Class of Securities)
015394109
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(CUSIP Number of Class of Securities)
Karen Nicolai Winnett, Esq.
Bruck & Perry
500 Newport Center Drive, Suite 700, Newport Beach,
California 92660; 714/719-6000
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(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications on Behalf of Bidder)
CALCULATION OF FILING FEE
<TABLE>
<CAPTION>
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Transaction Amount of filing fee
valuation* $357,132 $105.35
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</TABLE>
* Transaction valuation was calculated in accordance with Rule 0-11(d) by
multiplying the number of shares proposed to be acquired (714,264 shares) by
the amount of cash to be paid for the shares ($.50 per share).
[ ] Check box if any part of the fee is offset as provided by Rule
0-11(a)(2) and identify the filing with which the offsetting fee was
previously paid. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
Amount Previously Paid:
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Form or Registration Number:
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Filing Party:
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Date Filed:
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1) Names of Reporting Persons S.S. or I.R.S. Identification Nos. of Above
Person:
Johnnie Robert Crean; Social Security No. ###-##-####
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2) Check the Appropriate Box if a Member of a Group (See Instructions)
[ ] (a)
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[ ] (b)
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3) SEC Use Only
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4) Source of Funds (See Instructions): 00
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5) [ ] Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(e) or 2(f).
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6) Citizenship or Place of Organization: United States
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7) Aggregate Amount Beneficially Owned by Each Reporting
Person: 2,378,408 shares
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8) [ ] Check if the Aggregate Amount in Row 7 Excludes Certain Shares
(See Instruction).
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9) Percent of Class Represented by Amount in Row 7: 78.2%
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10) Type of Reporting Person (See Instructions): IN
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2
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Item 1. Security and Subject Company
(a) The name of the subject company is Alfa Leisure, Inc. ("Company") and
the address of its principal office is 13501 5th Street, Chino, California
91710.
(b) The class of equity securities being sought is common stock, no par
value ("Common Stock"). On April 30, 1998, the total number of outstanding
shares of Common Stock was 3,039,872. A total of 714,264 shares are being sought
at a cash purchase price of $.50 per share (the "Shares").
(c) The Common Stock is traded in the over-the-counter market, however,
there is currently no established public trading market for the shares and the
Common Stock has not been quoted in the National Quotation Bureau's "pink
sheets" since 1987.
Item 2. Identity and Background.
(a) Johnnie R. Crean ("Purchaser")
(b) 13501 5th Street, Chino, California 91710
(c) Chairman of the Board and President of the Company; same address as
(b) above.
(d) Purchaser has been employed as the Company's Chairman of the Board
and President since December 29, 1986, at the principal business address set
forth in (b) above. Purchaser founded Alfa Leisure, Inc., a California
corporation ("Alfa-California") in March 1975 and served as president and
director of Alfa-California from that time until its merger into the Company on
December 29, 1986. Purchaser also served as president and director of Alfa
Leisure of Louisiana, Inc., a California corporation ("Alfa-Louisiana"), from
its organization in October 1985 to the time of its merger into the Company in
December 29, 1986.
(e) During the last five years, Purchaser has not been convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors).
(f) During the last five years, Purchaser was not a party to a civil
proceeding of a judicial or administrative body of competent jurisdiction and
was not and is not subject to a judgment, decree or final order enjoining future
violations of, or prohibiting activities subject to, federal or state securities
laws or a finding of any violation of such laws.
(g) United States.
Item 3. Past Contacts, Transactions or Negotiations with the Subject Company
(a) The Company leases its manufacturing facilities and executive offices
from Hercules Land Holding, Inc., a California corporation of which Mr. Crean is
the sole shareholder. The Company pays monthly rent of $12,932 pursuant to a
five (5) year lease with three (3) options to extend for three (3) years each.
The lease provides the Company with the option to acquire the property and
facilities at any time during the lease term at the market value as determined
by appraisal by an MAI certified appraiser. Based on an informal market survey,
the Company believes that the monthly rental rate for the property and
facilities is consistent with local market rates. Prior to the acquisition of
the property and facilities
3
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by Hercules Land Holding, Inc., Mr. Crean had leased the property and facilities
for $8,324 per month pursuant to a December 19, 1980 lease and subleased the
property to the Company. During the fiscal year ended April 30, 1997 and 1996,
the Company paid lease payments of $11,977 per month to Mr. Crean.
Mr. Crean borrows money from and repays money to the Company from time to
time. During the fiscal years ended April 30, 1997 and 1996, the largest amounts
of money which Mr. Crean owed to the Company on any one date were $439,792 and
$402,390, respectively. A portion of Mr. Crean's obligation to the Company is
represented by an unsecured promissory note in the amount of $402,390 which
bears interest at the rate of nine percent (9%) per annum. It is anticipated
that the amount of Mr. Crean's indebtedness to the Company will fluctuate during
fiscal year 1998.
The Company has collateralized Mr. Crean's personal indebtedness of
$184,000 to a third party lender with a deed of trust on a 1.4 acre lot which is
used as the parking lot for the Company's Chino, California manufacturing
facility. Mr. Crean transferred this property to the Company in 1989 subject to
the existing debt which was structured on an interest only basis.
Purchaser has personally guaranteed the Company's $2,000,000 line of
credit.
(b) No contacts, negotiations, or transactions have occurred since the
commencement of the Company's third full fiscal year preceding the date of this
Schedule between Purchaser and the Company or its affiliates concerning: a
merger, consolidation or acquisition; a tender offer, or other acquisition of
securities; an election of directors; or a sale or other transfer of a material
amount of assets.
Item 4. Source and Amount of Funds or Other Consideration.
(a) The total amount of funds necessary for purchase of the maximum
number of Shares for which the tender offer is made, plus the fees and expenses
of the tender offer, is estimated to be approximately $372,632. Purchaser
intends to borrow the consideration for the purchase of tendered shares from
Merlin Financial, Inc., the Company's principal lender.
(b) The Purchaser will sign a one-year promissory note for the borrowed
funds in favor of Merlin Financial, Inc. which will bear interest at the rate of
eight percent (8%) per annum.
The Purchaser intends to repay this borrowing with future income.
(c) Not applicable.
Item 5. Purpose of the Tender Offer and Plans or Proposals of the Bidder.
The purpose of the subject tender offer by the Company's principal
shareholder is the furtherance of the Purchaser's plan to increase his
percentage ownership of the Company's Common Stock. The tender offer is not
expected to result in any change in the present Board of Directors or management
of the Company, as Purchaser is currently the Company's principal shareholder
and currently controls 78.2% of the outstanding Common Stock.
4
<PAGE> 5
Following the tender offer, the Purchaser may seek to further increase
his percentage ownership of the Company by requesting that the Company effect a
reverse split of its outstanding stock or through other means.
Registration of the Company's Common Stock under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), may be terminated upon application
by the Company to the Securities and Exchange Commission because the Company has
less than $10,000,000 in assets. Purchaser does not presently intend to cause
the Company to terminate its registration under the Exchange Act but may
consider doing so in the future.
Item 6. Interest in Securities of the Subject Company.
(a) Purchaser is the beneficial owner of a total of 2,378,408 shares of
the Company's Common Stock representing 78.2% of the total number of outstanding
shares. This number includes 52,800 shares of Common Stock held by trusts for
the benefit of Purchaser's family, of which he is the trustee or a co-trustee.
(b) During the past 60 days Purchaser has acquired 35,000 Shares of the
Company's Common Stock from two Shareholders who requested that Purchaser
acquire their stock. Purchaser paid $.50 per share for the shares acquired.
Item 7. Contracts, Arrangements, Understandings or Relationships with Respect to
the Subject Company's Securities.
On March 31, 1992, the Company obtained a line of credit in the amount of
$2,000,000 (the "Loan") from Merlin Financial, Inc., a Nevada corporation
("Merlin"). This Loan is guaranteed by Purchaser. The use of proceeds of the
Loan was restricted to the following: (1) up to $550,000 to Purchaser and any
other existing secured lenders to pay off all existing secured loans, (2)
payments to unsecured trade creditors as determined by the Company, (3) fire
insurance upon the assets and business naming Merlin as a loss payee with
coverage equal to the replacement cost of the assets and business interruption
insurance sufficient to pay Merlin as well as other vendors necessary to
continue operations of the Company's business for six months, (4) reimbursement
to Merlin of all attorneys' fees paid by Merlin in respect of the Loan and (5)
the balance for working capital of the Company.
The Loan is payable upon demand by Merlin pursuant to a 90 day written
notice. The Company has received a written representation from Merlin that a
demand for principal payment will not be made through the end of fiscal year
1998. The interest rate on the Loan is the Bank of America prime plus 1%, or
such lesser rate permitted by California law. Interest is payable monthly on the
outstanding principal and any unpaid interest is added to the Loan principal.
Any default by the Company in repayment of the Loan entitles Merlin to demand
immediate repayment of the Loan balance and to pursue all remedies available.
The Loan is intended to serve as a line of credit and the Company is
obligated to reduce the principal balance as much and as frequently as possible
and as Merlin may instruct from time to time. The security for the Loan is a
first priority lien on all of the Company's assets, both tangible and
intangible, as well as the personal guarantee of Purchaser. Purchaser's
guarantee is secured by the pledge of all of his shares of Common Stock and by
the assignment of his interest in the Company's Chino facility lease.
5
<PAGE> 6
Item 8. Persons Retained, Employed or to Be Compensated.
The Purchaser intends to retain agents who may contact holders of Shares
by mail, telephone, telex, telegraph and personal interview and may request
brokers, dealers and other nominee shareholders to forward the tender offer
materials to beneficial owners. These agents will be compensated for services
relating to the tender offer on an hourly basis and will be reimbursed for
certain out-of-pocket expenses.
The Purchaser will not pay any fees or commissions to any broker or
dealer or any other person for soliciting tenders of Shares pursuant to the
tender offer. 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 materials to their customers.
Item 9. Financial Statements of Certain Bidders.
Not applicable.
Item 10. Additional Information.
(a) There are no present or proposed material contracts, arrangements,
understandings or relationships between the Purchaser and the Company or any of
its executive officers, directors, controlling persons or subsidiaries (other
than the contracts, arrangements or understandings required to be disclosed
pursuant to Items 3 or 7 of this Schedule).
(b) Sections 13(e)(3) and 14(d)(1) of the Securities and Exchange Act of
1934 which are applicable to the tender offer requires that Purchaser file
Schedules 13E-3 and 14D-1. California Corporations Code Section 1203(a),
applicable to the Company by reason of its business location and the residence
of its principal shareholder, requires that materials for a tender offer made by
a person who controls a corporation with more than 100 shareholders of record
include the opinion of an unaffiliated person engaged in the business of
advising others as to the value of properties, businesses or securities with
respect to the fairness of the consideration to the shareholders.
(c) Not applicable.
(d) Not applicable.
(e) There are no material pending legal proceedings related to the tender
offer.
(f) None.
Item 11. Material to be Filed as Exhibits.
(a) Offer to Purchase and Letter of Transmittal.
(b) Form of Promissory Note.
(c) Loan Agreement, Promissory Note, Security Agreement, UCC-1,
Assignment of Sublease, Certificate of Borrower, Guaranty, Pledge Agreement,
Escrow Letter, Lease Assignment and Stock Assignment Separate From Certificate
incorporated by reference from schedule 14D-1 filed by Purchaser on May 12,
1994, Exhibit 11(c).
(d) None.
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(e) Not applicable.
(f) None.
7
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SIGNATURES
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
Date: April 28, 1998
/s/ Johnnie R. Crean
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JOHNNIE R. CREAN
8
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EXHIBIT INDEX
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EXHIBIT
NUMBER DESCRIPTION
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11(a) Offer to Purchase and Letter of Transmittal.
11(b) Form of Promissory Note.
11(c) Loan Agreement, Promissory Note, Security Agreement, UCC-1,
Assignment of Sublease, Certificate of Borrower, Guaranty,
Pledge Agreement, Escrow Letter, Lease Assignment and Stock
Assignment Separate From Certificate incorporated by
reference from schedule 14D-1 filed by Purchaser on May 12,
1994, Exhibit 11(c).
<PAGE> 1
EXHIBIT 11(a)
OFFER TO PURCHASE FOR CASH
714,264 SHARES OF COMMON STOCK
OF
ALFA LEISURE, INC.
AT
$.50 NET PER SHARE
BY
JOHNNIE R. CREAN
THE PRESIDENT AND MAJORITY SHAREHOLDER
OF ALFA LEISURE, INC.
The Offer and Withdrawal Rights will expire at 5:00 p.m., California
time, Tuesday, June 30, 1998, unless extended.
THE OFFER IS NOT CONDITIONED UPON ANY MINIMUM NUMBER OF SHARES BEING
TENDERED.
THIS TRANSACTION HAS NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE FAIRNESS OR MERITS OF
SUCH TRANSACTION NOR UPON THE ACCURACY OR ADEQUACY OF THE INFORMATION CONTAINED
IN THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO ANY
SHAREHOLDER AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING SHARES. EACH
SHAREHOLDER MUST MAKE HIS/HER OWN DECISION WHETHER TO TENDER SHARES AND, IF SO,
HOW MANY SHARES TO TENDER.
Any shareholder desiring to accept the offer should either (i) complete
and sign the Letter of Transmittal (or a facsimile thereof) in accordance with
the instructions in the Letter of Transmittal and mail or deliver it and any
other required documents to the Depository, or (ii) request his/her broker,
dealer, commercial bank, trust company or other nominee to effect the
transaction for him/her. A shareholder whose Shares are registered in the name
of a broker, dealer, commercial bank, trust company or other nominee must
contact such person if he/she desires to tender such Shares. See Section 3 of
this Offer to Purchase.
Any shareholder desiring to accept the offer whose certificates are not
immediately available should tender such Shares by following the procedures for
guaranteed delivery set forth in Section 4 of this Offer to Purchase.
Questions and requests for assistance or for additional copies of this
Offer to Purchase and the Letter of Transmittal may be directed to the
Depository at its address and telephone number set forth on the last page of
this Offer to Purchase.
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April 29, 1998
11(a)-1
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TABLE OF CONTENTS
<TABLE>
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1. Special Factors.............................................................................. 1
2. Terms of Offer............................................................................... 3
3. Acceptance for Payment and Payment for Shares................................................ 4
4. Procedure for Tendering Shares............................................................... 4
5. Withdrawal Rights............................................................................ 6
6. Certain Federal Income Tax Consequences of the Offer......................................... 6
7. Price Range of Shares; Dividends............................................................. 7
8. Effect of the Offer on the Market for Shares; Registration Under the Exchange Act............ 7
9. Certain Information Concerning the Company................................................... 7
10. Certain Information Concerning Purchaser..................................................... 10
11. Source and Amount of Funds................................................................... 11
12. Transactions and Arrangements Concerning the Shares.......................................... 11
13. Purpose of the Offer; Plans for the Company.................................................. 11
14. Dividends and Distributions.................................................................. 12
15. Certain Conditions of the Offer.............................................................. 12
16. Fees and Expenses............................................................................ 13
17. Miscellaneous................................................................................ 13
</TABLE>
11(a)-2
<PAGE> 3
TO THE HOLDERS OF SHARES OF COMMON STOCK OF ALFA LEISURE, INC.:
JOHNNIE R. CREAN ("PURCHASER"), THE CHAIRMAN OF THE BOARD, PRESIDENT
AND MAJORITY SHAREHOLDER OF ALFA LEISURE, INC., A TEXAS CORPORATION (THE
"COMPANY"), HEREBY OFFERS TO PURCHASE SHARES OF THE COMPANY'S COMMON STOCK, NO
PAR VALUE (THE "SHARES"), AT $.50 PER SHARE, PAYABLE TO THE SELLER IN CASH, UPON
TERMS AND SUBJECT TO THE CONDITIONS SET FORTH IN THIS OFFER TO PURCHASE AND IN
THE RELATED LETTER OF TRANSMITTAL (WHICH TOGETHER CONSTITUTE THE "OFFER"). Mr.
Crean's business address and telephone number is 13501 5th Street, Chino,
California 91710; telephone (909) 628-5574.
THE OFFER IS NOT CONDITIONED UPON ANY MINIMUM NUMBER OF SHARES BEING
TENDERED.
All Shares properly tendered will be purchased at the purchase price,
subject to the terms and conditions of the Offer. The purchase price will be
paid in cash, net to the Seller, with respect to all Shares purchased. Shares
tendered at prices in excess of the purchase price will be returned. Tendering
shareholders will not be obligated to pay brokerage commissions, solicitation
fees or, subject to Instruction 3 of the Letter of Transmittal, stock transfer
taxes, if any, on the purchase of the Shares by the Purchaser, the Purchaser
will pay all charges and expenses of American Stock Transfer & Trust Company
(the "Depositary") in connection with the Offer.
Neither the Company nor its Board of Directors makes any
recommendation to any shareholder as to whether to tender or refrain from
tendering Shares. Each shareholder must make his own decision whether to tender
Shares, and if so, how many Shares to tender and at what price.
As of April 28, 1998, the Company had issued and outstanding
3,039,872 Shares which were held by record by approximately 400 persons. The
714,264 Shares that the Purchaser is offering to purchase represent
approximately 23.5% of the Shares outstanding as of April 28, 1998. There is
currently no established public trading market for the Shares and Mr. Crean has
been informed that the Shares have not been quoted in the National Quotation
Bureau's "pink sheets" during the most recent eight (8) fiscal quarters.
1. SPECIAL FACTORS.
(a) Purposes, Alternatives, Reasons and Effects of the Transaction.
The principal purpose of this tender offer is enable the Purchaser to
obtain a greater percentage of the ownership of the Company. The Purchaser
intends to continue the operations of the Company without significant change.
The tender offer is not expected to result in any change in the present Board of
Directors or management of the Company, as Purchaser is currently the Company's
principal shareholder and controls approximately 78.2% of the outstanding shares
of Common Stock.
The transaction was structured as a tender offer to give each
shareholder an independent opportunity to sell his or her shares for cash or to
continue as a minority shareholder of the Company. The transaction is being
undertaken at this time because of a lack of trading in the Company's Common
Stock and because the Company's financial performance during the past few years
makes the purchase of shares an attractive opportunity for the Purchaser.
If all Shares being sought are tendered, the Purchaser will become
the sole shareholder of the Company. The Purchaser believes that he will be
benefitted by the tender offer because he will have the opportunity to increase
his percentage ownership in the Company.
11(a)-3
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The effects of the transaction on an unaffiliated security holder
will be to force him or her to make a choice between selling his or her shares
now or continuing to hold his or her shares as a minority shareholder in a
company with no trading market for its shares. The transaction will have little
effect on the liquidity of shares of an unaffiliated security holder since there
has no published bid for the Company's Common Stock since 1987.
(b) Fairness of the Transaction.
The Purchaser believes that the transaction is fair to unaffiliated
security holders. In considering whether the transaction is fair to unaffiliated
security holders, the Purchaser considered the lack of trading market for the
securities, historical market prices, and the report of William R. Black who was
engaged by the Purchaser to provide the Purchaser with an opinion with respect
to the fairness of the proposed offer price in the transaction. In addition, the
Purchaser has recently purchased 35,000 shares from two Shareholders who
requested that the Purchase buy their shares. The Purchase paid a price of $.50
per share.
The Company's net book value and liquidation value exceed the price
being offered by the Purchaser. The Company's book value at January 31, 1998 was
$2,061,732 or $.68 per share.
There is no trading market for the Company's shares. There has been
no published bid for the Company's shares since 1987. During 1986 and 1987
historical market prices ranged from $.0625 to $.125. At that time, the
Company's operations were profitable. Annual sales reached $18,503,398 in fiscal
year 1988. For fiscal year 1997, the Company's sales were $28,590,285 and the
Company reported net income of $329,544 or $.11 per share. For the first nine
months of fiscal year 1998, the Company's sales were $24,882,486 and the Company
reported net income of $430,187 or $.14 per share.
The structure of the transaction does not require the approval of a
majority of the unaffiliated security holders. Each individual security holder
will make the decision whether or not to tender shares.
There are approximately 400 shareholders of record.
The Purchaser has not sought the approval of the Board of Directors
of the Company in connection with the transaction. No unaffiliated
representative has been retained to act on behalf of the unaffiliated security
holders for purposes of negotiating the terms of the tender offer.
(c) Reports, Opinions and Appraisals.
The Purchaser has received an opinion from an outside party relating
to the fairness of the consideration to be offered to security holders of the
class of securities which is the subject of the Rule 13e-3 transaction.
The Purchaser retained William R. Black to provide an opinion with
respect to the fairness of the tender offer price from a financial point of view
to the unaffiliated shareholders. Mr. Black provides business valuation,
economic analysis, business forecasting and expert testimony services. Mr. Black
has been engaged in business valuations since 1984. Mr. Black was a partner in
Analytical Services which had previously rendered fairness opinions for the
Purchaser. Mr. Black was selected based on his familiarity with the Company, his
experience and the cost to obtain a fairness opinion.
No material relationship exists or is contemplated between (i) Mr.
Black, and (ii) the Company or the Purchaser. The Purchaser has paid Mr. Black a
fee of $5,000 for his services in valuing the Company and providing his fairness
opinion. Purchaser determined the tender offer price of $.50 per
11(a)-4
<PAGE> 5
share. Mr. Black concluded that this price was in excess of the minimum price
which Mr. Black would have recommended.
In connection with rendering his opinion, Mr. Black reviewed and
analyzed the Company's audited financial statements for the periods ended April
30, 1992 through April 30, 1997; interim financial statements for the nine
months ended January 31, 1998; Securities and Exchange Commission Forms 10-K
filed by the Company for the fiscal years ended April 30, 1992 through 1997;
Securities and Exchange Commission Form 10-Q filed by the Company for the
quarter ended January 31, 1998; Articles of Incorporation and Bylaws; Riverside
County property tax assessment records and County Recorder's records. Mr. Black
also analyzed financial statements and other material regarding comparative
public companies, acquisition data for the recreational vehicle industry,
required rates of return on common stocks in general, material discussing the
economic outlook of the recreational vehicle industry and other materials he
deemed appropriate. Mr. Black had previously toured the Company's facility and
interviewed the Company's management.
Based on his analysis, Mr. Black rendered his opinion that the
proposed cash offer for the outstanding common stock of Alfa Leisure, Inc. not
held by Purchaser, at a price of $.50 per share is fair from a financial point
of view to the shareholders of the Company.
A copy of the opinion of Mr. Black is attached to this Offer.
2. TERMS OF OFFER.
Upon the terms and subject to the conditions of the Offer, Purchaser
will accept for payment (and thereby purchase) all Shares which are validly
tendered on or prior to the Expiration Date and not withdrawn as provided in
Section 5 of this Offer to Purchase, subject to the terms and conditions of the
Offer. The term "Expiration Date" shall mean 5:00 p.m., California time on
Tuesday, June 30, 1998, unless and until Purchaser, in his sole discretion,
shall have extended the period of time for which the Offer is open, in which
event "Expiration Date" shall mean the latest time and date at which the Offer,
as so extended by Purchaser, shall expire.
Purchaser reserves the right, in his sole discretion, at any time or
from time to time, to extend the period of time during which the Offer is open
by giving oral or written notice of such extension to the Depositary and by
making a public announcement thereof, as provided below. If Purchaser should
decide to increase the consideration offered to shareholders and, at the time
that notice of such increase is first published, sent or given to shareholders
in the manner specified below, the Offer is scheduled to expire at any time
earlier than the expiration of a period ending on the tenth business day from,
and including, the date that such notice is first so published, sent or given,
the Offer will be extended until the expiration of such period of ten (10)
business days. For purposes of calculating any time periods in connection with
the Offer, a "business day" means any day other than Saturday, Sunday or federal
holiday, and consists of the time period from 12:01 a.m. through 12:00 midnight,
California time.
Purchaser also reserves the right (i) to terminate the Offer and not
to accept for payment or pay for any Shares not theretofore accepted for payment
or paid for, upon the occurrence of any of the conditions specified in Section
15 of this Offer to Purchase, or to comply, in whole or in part, with any
applicable law, by giving oral or written notice of such termination to the
Depositary, and (ii) at any time or from time to time, to amend the Offer in any
respects. Any extension, termination or amendment will be followed as promptly
as practicable by public announcement thereof, such announcement and notice to
the Depositary in the case of an extension to be issued no later than 9:00 a.m.,
California time, on the next business day after the previously scheduled
expiration date. Without limiting the manner in which
11(a)-5
<PAGE> 6
Purchaser may choose to make any public announcement, Purchaser shall have no
obligation to publish, advertise or otherwise communicate any such public
announcement other than by making a release to Business Wire. In addition,
Purchaser shall as promptly as practicable mail notice of such extension,
termination or amendment to all shareholders.
3. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES.
Upon the terms and subject to the conditions of the Offer (including,
if the Offer is extended or amended, the terms and conditions of any such
extension or amendment), Purchaser will purchase, by accepting for payment, and
will pay for, all Shares validly tendered and not properly withdrawn as soon as
practicable after the expiration date. Purchaser expressly reserves the right,
in his sole discretion, in order to comply, in whole or in part, with any
applicable law, government regulation or condition contained herein, to delay
acceptance for payment of, and payment for, Shares. See Section 15 of this Offer
to Purchase. In all cases, payment for Shares purchased pursuant to the Offer
will be made only after timely receipt by the Depositary of certificates for
such Shares, the Letter of Transmittal (or facsimile thereof), properly
completed and duly executed, and any other documents required by such Letter of
Transmittal. See Section 4 of this Offer to Purchase.
For purposes of the Offer, Purchaser shall be deemed to have accepted
for payment (and thereby purchased) tendered Shares as, if and when the
Purchaser gives oral or written notice to the Depositary of the Purchaser's
acceptance of such Shares for payment. In all cases, payment for Shares
purchased pursuant to the Offer will be made by deposit of the purchase price
with the Depositary, which will act as agent for the tendering shareholders for
the purpose of receiving payments from the Purchaser and transmitting payments
to tendering shareholders. Under no circumstances will interest be paid by
Purchaser by reason of any delay in making such payment.
If any tendered Shares are not purchased for any reason, or if
certificates are submitted for more Shares than are tendered, certificates for
such unpurchased or untendered Shares will be returned, without expense to the
tendering shareholder as promptly as practicable following the expiration,
termination or withdrawal of the Offer.
IF PRIOR TO THE EXPIRATION DATE, PURCHASER SHALL INCREASE THE
CONSIDERATION OFFERED TO SHAREHOLDERS PURSUANT TO THE OFFER, SUCH INCREASED
CONSIDERATION SHALL BE PAID TO ALL SHAREHOLDERS WHOSE SHARES ARE PURCHASED
PURSUANT TO THE OFFER.
4. PROCEDURE FOR TENDERING SHARES.
FOR SHARES TO BE VALIDLY TENDERED PURSUANT TO THE OFFER, A LETTER OF
TRANSMITTAL (OR FACSIMILE THEREOF), PROPERLY COMPLETED AND DULY EXECUTED, WITH
ANY REQUIRED SIGNATURE GUARANTEES AND ANY OTHER REQUIRED DOCUMENTS, MUST BE
RECEIVED BY THE DEPOSITARY AT ONE OF ITS ADDRESSES SET FORTH ON THE LAST PAGE OF
THIS OFFER TO PURCHASE. IN ADDITION, EITHER (i) CERTIFICATES REPRESENTING SUCH
SHARES MUST BE RECEIVED BY THE DEPOSITARY PRIOR TO THE EXPIRATION DATE, OR (ii)
THE GUARANTEED DELIVERY PROCEDURE SET FORTH BELOW MUST BE COMPLIED WITH.
Signatures on all Letters of Transmittal must be guaranteed by a
member of a registered national securities exchange, a member of the National
Association of Securities Dealers, Inc., or by a commercial bank or trust
company having an office or correspondent in the United States (collectively
"Eligible Institutions"), unless the Shares tendered thereby are tendered (i) by
a registered holder of Shares who has not completed either the box entitled
"special delivery instructions" or the box entitled "special payment
instructions" on the Letter of Transmittal or, (ii) for the account of an
Eligible Institution. See
11(a)-6
<PAGE> 7
Instruction 5 of the Letter of Transmittal. If the Share certificates are
registered in the name of a person other than the signer of the Letter of
Transmittal, or payment is to be made or unpurchased Shares are to be returned
to a person other than the registered holder, then the Share certificates must
be endorsed or accompanied by appropriate stock powers, in either case, signed
exactly as the name or names of the registered holder or holders appear on the
certificates, with the signatures on the certificates or stock powers guaranteed
as provided in the Letter of Transmittal.
If a shareholder desires to tender Shares pursuant to the Offer and
such shareholder certificates are not immediately available or time will not
permit all required documents to reach the Depositary on or prior to the desired
date of tender and prior to the Expiration Date, such Shares may nevertheless be
tendered if all of the following guarantee a delivery procedures are complied
with:
(i) Such tender is made by or through an Eligible Institution;
(ii) A properly completed and duly executed notice of guaranteed
delivery, substantially in the form provided by Purchaser herewith,
is received by the Depositary as provided below on or prior to the
Expiration Date;
(iii) The certificates for all tendered Shares in proper form for
transfer, together with a properly completed and duly executed Letter
of Transmittal (or facsimile thereof) and any other documents
required by the Letter of Transmittal, are received by the Depositary
within thirty (30) days after the date of the notice of guaranteed
delivery; and
(iv) The notice of guaranteed delivery may be delivered by hand
or transmitted by telegram, telex, facsimile transmission or letter
to the Depositary and must include a signature guarantee by an
Eligible Institution in the form set forth in such notice of
guaranteed delivery.
The method of delivery of Shares, the Letter of Transmittal and any
other required documents is at the option and risk of the tendering shareholder,
but if delivery is by mail, registered mail with return receipt requested,
properly insured, is recommended.
In all cases, payment for Shares tendered and purchased pursuant to
the Offer will be made only after timely receipt by the Depositary of
certificates for such Shares, a Letter of Transmittal or facsimile thereof,
properly completed and duly executed, and any other required documents.
To prevent back-up federal income tax withholding at a twenty percent
(20%) rate on payments made to certain shareholders with respect to the purchase
price of Shares purchased pursuant to the Offer, each such shareholder must
provide the Depositary with his/her correct tax payer identification number and
certify that he/she is not subject to back-up federal income tax withholding by
completing the substitute Form W-9 included in the Letter of Transmittal.
All questions as to the form of documents and the validity,
eligibility (including time of receipt) and acceptance for payment of any tender
of Shares will be determined by Purchaser, in his sole discretion, whose
determination shall be final and binding on all parties. Purchaser reserves the
absolute right to reject any and all tenders of Shares determined by him not to
be in proper form or the acceptance of or payment for which may, in the opinion
of Purchaser's counsel, be unlawful. Purchaser also reserves the absolute right
to waive or to amend any of the conditions of the Offer or any defect or
irregularity in any tender of Shares. Purchaser's interpretation of the terms
and conditions of the Offer (including the Letter of Transmittal and the
Instructions thereto) will be final and binding on all parties. No tender of
Shares will be deemed to have been validly made until all defects and
irregularities have
11(a)-7
<PAGE> 8
been cured or waived. Neither the Purchaser, the Depositary or any other person
will be under any duty to give notification of any defects or irregularities and
tenders or incur any liability for failure to give such notification.
The tender of Shares pursuant to one of the procedures described
above will constitute a binding agreement between the tendering shareholder and
the Purchaser upon the terms and subject to the conditions of the Offer.
5. WITHDRAWAL RIGHTS.
Shares tendered pursuant to the Offer may be withdrawn at any time
prior to the Expiration Date and, unless theretofore accepted for payment and
paid pursuant to the Offer, may also be withdrawn at any time within thirty (30)
days following the Expiration Date.
For a withdrawal to be effective, a written, telegraphic, telex or
facsimile transmission notice of withdrawal must be timely received by the
Depositary at its address set forth on the final page of this Offer to Purchase.
Any such 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 the name of
the registered holder, if different from that of the person who tendered such
Shares. If certificates for Shares have been delivered or otherwise identified
to the Depositary, then prior to the release of such certificates, the tendering
shareholder must also submit the serial number shown on the particular
certificates evidencing the Shares to be withdrawn, and the signature on the
notice of withdrawal must be guaranteed by an Eligible Institution (except in
the case of Shares tendered for the account of the Eligible Institution). All
questions as to the form and validity (including time of receipt of notices of
withdrawal will be determined by Purchaser, in his sole discretion, whose
determination shall be final and binding on all parties.
If Purchaser extends the offer or is unable to purchase or pay for
Shares for any reason, then, without prejudice to his rights hereunder, tendered
Shares may be retained by the Depositary on behalf of Purchaser. Shares so
retained may be withdrawn as set forth in this Section 5 at any time prior to
their purchase.
Any Shares properly withdrawn will be deemed not validly tendered for
purposes of the Offer, but may be re-tendered at any subsequent time prior to
the Expiration Date by following any of the procedures described in Section 4 of
this Offer to Purchase.
6. CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE OFFER.
The receipt of cash for Shares pursuant to the Offer will be a
taxable transaction for federal income tax purposes and may also be a taxable
transaction under applicable state, local, foreign and other tax laws. In
general, for federal income tax purposes, a shareholder should recognize gain or
loss equal to the difference between such shareholders' adjusted tax basis in
the Shares sold and the amount of cash received in exchange therefore. Such a
gain or loss generally will be capital gain or loss if such shareholders' Shares
were held as a capital asset and will be long term capital gain or loss if, on
the date of sale, the Shares were held for more than six (6) months.
The foregoing discussion may not apply to Shares acquired by a
shareholder pursuant to an employee stock plan or otherwise as compensation or
to shareholders who are not citizens or residents of the United States.
11(a)-8
<PAGE> 9
THE FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR
GENERAL INFORMATION ONLY. DUE TO THE INDIVIDUAL NATURE OF TAX CONSEQUENCES, EACH
SHAREHOLDER IS STRONGLY URGED TO CONSULT HIS/HER TAX ADVISOR WITH RESPECT TO THE
TAX CONSEQUENCES TO HIM/HER OF THE OFFER, INCLUDING THE EFFECTS OF STATE, LOCAL,
FOREIGN AND OTHER TAX LAWS.
7. PRICE RANGE OF SHARES; DIVIDENDS.
The Common Stock is traded in the over-the-counter market, however,
there is currently no established public trading market for the shares and the
Common Stock has not been quoted in the National Quotation Bureau's "pink
sheets" during the past eight fiscal quarters. The Company has never declared or
paid any dividends on its Common Stock. Management does not expect that the
Company will declare or pay any dividends in the foreseeable future.
8. EFFECT OF THE OFFER ON THE MARKET FOR SHARES; REGISTRATION UNDER
THE EXCHANGE ACT.
The purchase of Shares pursuant to the Offer will reduce the number
of Shares that might otherwise trade publicly and could adversely affect the
liquidity and market value of the remaining Shares held by the public.
The Shares are currently registered under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"). Registration of the Shares under the
Exchange Act may be terminated upon application by the Company to the Securities
and Exchange Commission (the "Commission") because the Company has less than
$10,000,000 in assets. The termination of registration of all such classes of
Shares under the Exchange Act would reduce the information required to be
furnished by the Company to its shareholders and would make certain of the
provisions of the Exchange Act, such as the requirement of furnishing a proxy
statement in connection with meetings of its shareholders, no longer applicable
with respect to such Shares. Furthermore, "affiliates" of the Company and
persons holding "restricted securities" of the Company might be deprived of the
ability to dispose of such Shares pursuant to Rule 144 promulgated under the
Securities Act of 1933, as amended (the "Securities Act"). If registration of
the Shares under the Exchange Act were terminated, the "short-swing" trading and
reporting provisions of the Exchange Act would no longer be applicable to such
Shares.
The Company does not presently intend to terminate the registration
of the Shares under the Exchange Act but may consider doing so in the future.
9. CERTAIN INFORMATION CONCERNING THE COMPANY.
The Company is incorporated under the laws of the State of Texas. The
Company's principal executive offices are located at 13501 5th Street, Chino,
California 91710, and its telephone number at such offices is (909) 628-5574.
The Company is engaged in the manufacture and sale of recreational
vehicles designed as short-period accommodations for vacationers or long-period
accommodations for travelers that live "full-time" in their vehicles. The
Company's products are travel trailers designed to be towed behind automobiles,
trucks or vans and fifth wheel travel trailers designed to be towed behind and
attached to special couplers in the bed of pick-up trucks. The Company's
products are distributed by independent dealers concentrated in the western and
southwestern portions of the United States.
Set forth below is certain historical financial information relating
to the Company and its subsidiaries. The historical information has been
summarized from the audited consolidated financial statements included in the
Company's Annual Reports on Form 10-K and the unaudited condensed consolidated
financial statements in its quarterly reports on Form 10-Q for the nine months
ended January 31, 1998 and 1997. Such reports may be obtained as described
below. More comprehensive
11(a)-9
<PAGE> 10
financial information is included in such reports and the financial information
which follows is qualified in its entirety by reference to such reports and all
of the financial statements and related notes contained therein.
To assist shareholders in making a decision whether or not to tender
their shares, Purchaser is providing to each shareholder a copy of the Company's
Annual Report on Form 10-K for the fiscal year ended April 30, 1997 and a copy
of the Company's Quarterly Report on Form 10-Q for the nine months ended January
31, 1998. These reports were prepared by the Company. Purchaser is providing
these reports to shareholders as an accommodation only and by doing so does not
make or intend to make any representation as to or assume any liability for the
accuracy or adequacy of the information contained therein.
11(a)-10
<PAGE> 11
STATEMENT OF OPERATIONS INFORMATION
(In Thousands except Share and Per Share Information)
<TABLE>
<CAPTION>
FOR THE YEAR ENDED APRIL 30
-----------------------------------------------------------------------
1997 1996 1995 1994 1993
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net Sales $ 28,590 $ 25,750 $ 27,349 $ 23,593 $ 14,324
Net Income (Loss) from Continuing
Operations $ 330 $ 665 $ 824 $ 1,000 $ (594)
Income (Loss) from Continuing
Operations per Share of Common
Stock $ .11 $ .22 $ .27 $ .33 $ (.19)
Cash Dividends Declared per Share of
Common Stock (1) -0- -0- -0- -0- -0-
Weighted Average Number of Shares
Outstanding 3,048,137 3,050,000 3,050,000 3,050,000 3,050,000
Research and Development Expense $ 177 $ 166 $ 163 $ 162 $ 128
</TABLE>
<TABLE>
<CAPTION>
NINE MONTHS ENDED
--------------------------------------
JANUARY 31, 1998 JANUARY 31, 1997
(UNAUDITED) (UNAUDITED)
---------------- ----------------
<S> <C> <C>
Net Sales $ 24,882 $ 19,688
Net Income from Continuing Operations (Loss) $ 430 $ 7
Income (Loss) from Continuing Operations per Share $ .14 $ (.00)
of Common Stock
Cash Dividends Declared per Share of Common
Stock (1)
Weighted Average Number of Shares Outstanding 3,039,872 3,039,872
</TABLE>
- ----------
(1) The Company has never declared nor paid any dividends on its class of common
stock.
11(a)-11
<PAGE> 12
BALANCE SHEET INFORMATION
<TABLE>
<CAPTION>
APRIL 30,
JANUARY 31, ----------------------------------------------
1998 1997 1996 1995 1994 1993
---------- ------ ------ ------ ------ ------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
Total Assets $4,928 $5,406 $5,988 $5,703 $4,256 $3,139
Current Assets 3,139 3,767 4,311 4,570 3,303 2,288
Current Liabilities 2,327 2,751 2,600 3,241 2,062 1,937
Net Working Capital 812 1,016 1,711 1,329 1,241 351
Long-Term Debt 531 981 2,006 1,706 1,898 1,906
Cash Dividends Per
Share 0 0 0 0 0 0
</TABLE>
The Company is subject to the informational filing requirements of
the Exchange Act and accordance therewith the Company files periodic reports,
proxy statements and other information with the Commission under the Exchange
Act relating to its business, financial condition and other matters. The Company
is required to disclose in such proxy statements certain information, as of
particular date, the Company's directors and officers, their remunerations,
options granted to them, the principal holders of the Company's securities and
any material interest of such persons and transactions with the Company. Such
reports, proxy statements and other information may be inspected at the
Commission's office at 450 5th Street, N.W., Washington, D.C. 20549. Copies of
such material may also be obtained by mail, upon payment of the Commission's
customary fees, from the Commission's principal office at 450 5th Street, N.W.,
Washington, D.C. 20549 or from the Edgar archives located on the Commission's
web site at http://www.sec.gov.
10. CERTAIN INFORMATION CONCERNING PURCHASER.
Purchaser is an individual resident of the state of California. The
Purchaser has been employed as the Company's President since December 29, 1986,
and has served as Chairman of the Board for the same period. Purchaser founded
Alfa Leisure, Inc., a California corporation ("Alfa-California"), in March 1975
and served as President and director of that entity from inception until its
merger into the Company on December 29, 1986. The Purchaser also served as
President and director of Alfa Leisure of Louisiana, Inc., a California
corporation ("Alfa-Louisiana"), from its organization in October 1985 to the
time of its merger into the Company on December 29, 1986.
Purchaser is the beneficial owner of a total of 2,378,408 shares of
the Company's Common Stock representing 78.2% of the total number of outstanding
shares. This number includes 52,800 shares of Common Stock held by trusts for
the benefit of Purchaser's family, of which he is the trustee or a co-trustee.
The Company leases its manufacturing facilities and executive offices
from Hercules Land Holding, Inc., a California corporation of which Mr. Crean is
the sole shareholder. The Company pays monthly rent of $12,932 pursuant to a
five (5) year lease with three (3) options to extend for three (3) years each.
The lease provides the Company with the option to acquire the property and
facilities at any time during the lease term at the market value as determined
by appraisal by an MAI certified appraiser. Based on an informal market survey,
the Company believes that the monthly rental rate for the property and
facilities is consistent with local market rates. Prior to the acquisition of
the property and facilities by Hercules Land Holding, Inc., Mr. Crean had leased
the property and facilities for $8,324 per month pursuant to a December 19, 1980
lease and subleased the property to the Company. During the fiscal year ended
April 30, 1997 and 1996, the Company paid lease payments of $11,977 per month to
Mr. Crean.
11(a)-12
<PAGE> 13
Mr. Crean borrows money from and repays money to the Company from
time to time. During the fiscal years ended April 30, 1997 and 1996, the largest
amounts of money which Mr. Crean owed to the Company on any one date were
$439,792 and $402,390, respectively. A portion of Mr. Crean's obligation to the
Company is represented by an unsecured promissory note in the amount of $402,390
which bears interest at the rate of nine percent (9%) per annum. It is
anticipated that the amount of Mr. Crean's indebtedness to the Company will
fluctuate during fiscal year 1998.
The Company has collateralized Mr. Crean's personal indebtedness of
$184,000 to a third party lender with a deed of trust on a 1.4 acre lot which is
used as the parking lot for the Company's Chino, California manufacturing
facility. Mr. Crean transferred this property to the Company in 1989 subject to
the existing debt which was structured on an interest only basis.
Purchaser has personally guaranteed the Company's $2,000,000 line of
credit with Merlin Financial, Inc. Purchaser's personal guaranty of the
Company's Promissory Note dated March 31, 1992 is secured by a pledge of all of
Purchaser's shares of Common Stock and by Purchaser's interest in the
above-referenced lease for the Company's facilities in Chino, California.
11. SOURCE AND AMOUNT OF FUNDS.
The total amount of funds required by Purchaser to purchase Shares
tendered pursuant to the Offer (assuming 714,264 have been validly tendered and
purchased) and to pay fees and expenses related to the Offer is estimated to be
approximately $372,632. The Purchaser intends to borrow the funds for the
purchase of the Shares pursuant to the Offer and for the payment of related fees
and expenses from the Company's principal lender, Merlin Financial, Inc., a
Nevada corporation. The purchaser will sign a one-year promissory note for any
funds so borrowed which will bear interest at the rate of eight percent (8%) per
annum.
12. TRANSACTIONS AND ARRANGEMENTS CONCERNING THE SHARES.
On March 31, 1992, the Company obtained a line of credit in the
amount of $2,000,000 (the "Loan") from Merlin Financial, Inc., a Nevada
corporation ("Merlin"). This Loan is guaranteed by Purchaser. The use of
proceeds of the Loan was restricted to the following: (1) up to $550,000 to
Purchaser and any other existing secured lenders to pay off all existing secured
loans, (2) payments to unsecured trade creditors as determined by the Company,
(3) fire insurance upon the assets and business naming Merlin as a loss payee
with coverage equal to the replacement cost of the assets and business
interruption insurance sufficient to pay Merlin as well as other vendors
necessary to continue operations of the Company's business for six months, (4)
reimbursement to Merlin of all attorneys' fees paid by Merlin in respect of the
Loan and (5) the balance for working capital of the Company.
The Loan is payable upon demand by Merlin pursuant to a 90 day
written notice. The Company has received a written representation from Merlin
that a demand for principal payment will not be made through the end of fiscal
year 1998. The interest rate on the Loan is the maximum permitted by California
law or the Bank of America prime plus 1%, whichever is less. Interest is payable
monthly on the outstanding principal and any unpaid interest is added to the
principal. Any default by the Company in repayment of the Loan entitles Merlin
to demand immediate payment of the entire loan balance and to pursue all
remedies available.
The Loan is intended to serve as a line of credit and the Company is
obligated to reduce the principal balance as much and as frequently as possible
and as Merlin may instruct from time to time in order to minimize the interest
costs charged to the Company. The security for the Loan is a first priority lien
on all of the Company's assets, both tangible and intangible, as well as the
personal guarantee of Purchaser. Purchaser's guarantee is secured by the pledge
of all of his shares of Common Stock and by the assignment of his interest in
the Company's Chino facility lease.
11(a)-13
<PAGE> 14
13. PURPOSE OF THE OFFER; PLANS FOR THE COMPANY.
The purpose of the subject tender offer by the Company's principal
shareholder is the furtherance of the Purchaser's plan to increase his
percentage ownership of the Company's Common Stock. The tender offer is not
expected to result in any change in the present Board of Directors or management
of the Company, as Purchaser is currently the Company's principal shareholder
and controls approximately 78.2% of the outstanding shares of Common Stock.
Following the tender offer, the Purchaser may seek to further
increase his percentage ownership of the Company by requesting that the Company
effect a reverse split of its outstanding stock or through other means.
Registration of the Shares under the Securities Exchange Act of 1934,
as amended (the "Exchange Act") may be terminated upon application by the
Company to the Securities and Exchange Commission because the Company has less
than $10,000,000 in assets. Purchaser does not presently intend to cause the
Company to terminate its registration under the Exchange Act but may consider
doing so in the future.
14. DIVIDENDS AND DISTRIBUTIONS.
If, on or after April 29, 1998 the Company should split, combine or
otherwise change the Shares or its capitalization, then, without prejudice to
the Purchaser's right under Section 15 of this Offer to Purchase, the Purchaser,
in its sole discretion, may make such adjustments in the purchase price and
other terms of the Offer as it deems appropriate, including, without limitation,
the number and type of securities offered to be purchased.
If, on or after April 29, 1998, the Company should declare or pay any
dividend on the Shares or any distribution with respect to the Shares, that is
payable or distributable to shareholders of record on a date prior to the
transfer to the name of Purchaser or its nominee or transferee on the Company's
stock transfer records of the Shares purchased pursuant to the Offer, then,
without prejudice to the Purchaser's rights hereunder (i) the purchase price per
Share payable by Purchaser pursuant to the Offer will be reduced to the extent
any such dividend or distribution is payable in cash or in Shares, and (ii) any
other dividend, distribution or right received and held by the tendering
shareholder for the account of Purchaser will be required to be promptly
remitted and transferred by the tendering shareholder to the Depositary for the
account of Purchaser, accompanied by appropriate documentation of transfer.
Pending such remittance, Purchaser will be entitled to all rights and privileges
as owner of any such other additional noncash dividend, distribution or right
and may withhold the entire purchase price or deduct from the purchase price the
amount or value thereof, as determined by Purchaser in his sole discretion.
The Offer will be deemed and offer to purchase any securities or
other property that the Company may issue in respect of, or in exchange for,
Shares (including rights to Shares and other securities pursuant to proration
rights) whether by way of exchange offer, recapitalization, reorganization or
other extraordinary transaction. Purchaser reserves the right to waive this
provision and not purchase such securities or other property.
15. CERTAIN CONDITIONS OF THE OFFER.
Notwithstanding any other provision of the Offer, Purchaser shall not
be required to accept for payment or pay for any Shares tendered, and may
terminate the Offer, as provided in Section 1 of this Offer to Purchase, if at
any time after April 29, 1998, and prior to the time of acceptance for payment
or payment for any such Shares, any of the following events shall have occurred
or shall have been determined by the Purchaser to have occurred:
(a) there shall have occurred (i) any general suspension of
trading in, or limitation on prices for, over-the-counter securities,
(ii) the declaration of a banking moratorium or any suspension of
payments in respect of banks in the United States, (iii) a
commencement of any
11(a)-14
<PAGE> 15
war, armed hostilities or other international or national calamity
directly or indirectly involving the United States, which commenced
after the commencement of the Offer, (iv) any limitation by any
governmental authority on, or any other event which adversely
effects, the extension of credit by banks or lending institutions in
the United States generally, or (v) in the case of any of the
foregoing existing at the time of commencement of the Offer, a
material acceleration or worsening thereof; or
(b) there shall be in effect any preliminary or final
injunction or other order issued by any court or governmental,
administrative or regulatory agency or authority, domestic or
foreign, (i) directing that the Offer or the acquisition by Purchaser
of Shares be delayed in a manner which Purchaser reasonably believes
makes it inadvisable to consummate the Offer or directing that the
Offer or the acquisition by the Purchaser of Shares not be
consummated, or (ii) imposing material burdens on the Purchaser or
the Company in connection with the consummation of the Offer, or
(iii) resulting in a material adverse affect on the business,
condition (financial or otherwise), properties, assets or results of
operations of the Company and its subsidiaries taken as a whole; or
(c) there shall be promulgated or enacted any statute, rule
or regulation by any government or governmental authority of the
United States of America or any state thereof, which would (i) make
the acquisition by Purchaser of some or all of the Shares illegal,
(ii) otherwise prohibit or restrict consummation of the Offer, (iii)
impose material burdens on the Purchaser or the Company in connection
with the consummation of the Offer, or (iv) result in a material
adverse affect on the business, condition (financial or otherwise),
properties, assets or results of operations of the company and its
subsidiaries taken as a whole;
which, in the sole judgment of Purchaser, in any such case and regardless of the
circumstances (including any action or inaction by Purchaser) giving rise to any
such condition, makes it inadvisable to proceed with such acceptance for payment
or payment.
The foregoing conditions are for the sole benefit of Purchaser and
may be asserted by Purchaser, or may be waived by Purchaser, in whole or in part
at any time and from time to time in his sole discretion. The failure by
Purchaser at any time to exercise any of the foregoing rights shall not be
deemed a waiver of any such right and each such right shall be deemed an ongoing
right which may be asserted at any time and from time to time.
16. FEES AND EXPENSES.
The Purchaser will pay the fees and expenses associated with the
Offer which are estimated to be $15,500.
The Purchaser intends to retain agents who may contact holders of
Shares by mail, telephone, telex, telegraph and personal interview and may
request brokers, dealers and other nominee shareholders to forward the Offer
materials to beneficial owners. These agents will be compensated for services
relating to the Offer on an hourly basis and will be reimbursed for certain
out-of-pocket expenses.
The Purchaser will not pay any fees or commissions to any broker or
dealer or any other person for soliciting tenders of Shares pursuant to the
Offer. 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 materials to their customers.
11(a)-15
<PAGE> 16
17. MISCELLANEOUS.
The Offer is neither being made to, nor will tender of Shares be
accepted from or on behalf of, holders of Shares in any jurisdiction in which
the making of the Offer or the acceptance thereof would not be in compliance
with the laws of such jurisdiction, including any securities, blue sky or other
laws of which require the Offer to be made by a licensed broker or dealer.
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, such information
or representation must not be relied upon as having been authorized.
The Purchaser has filed with the Commission Schedules 14D-1 and 13E-3
furnishing certain additional information with respect to the Offer. Such
Schedules and any amendments thereto, including exhibits, may be examined and
copies may be obtained from the principal office of the Commission in the manner
set forth in Section 9 of this Offer to Purchase.
/s/ Johnnie R. Crean
--------------------------------------
JOHNNIE R. CREAN
11(a)-16
<PAGE> 17
Facsimile copies of the Letter of Transmittal will be accepted. The
Letter of Transmittal and certificates for Shares should be sent or delivered by
each shareholder or his/her broker, dealer, commercial bank, trust company or
other nominee to the Depositary at the following address:
The Depositary:
American Stock Transfer & Trust Company
By Mail or By Hand:
40 Wall Street
New York, New York 10005
Facsimile Copy Number:
(718) 236-4588
For Information Call:
Shareholder Relations Department
(718) 921-8200
Any questions or requests for assistance or additional copies of the
Offer to Purchase and the Letter of Transmittal may be directed to the
Depositary. Shareholders may also contact their local broker, dealer, commercial
bank or trust company for assistance concerning the Offer.
11(a)-17
<PAGE> 18
WILLIAM R. BLACK
25800 COMMERCENTRE DRIVE, LAKE FOREST, CALIFORNIA 92630
-------------------------
TELEPHONE (714) 595-7900
FACSIMILE (714) 595-7913
March 31, 1998
Mr. Johnnie Crean
Alfa Leisure, Inc.
13501 Fifth Street
Chino, California 91710
Dear Mr. Crean:
I, William R. Black, was retained by Johnnie Crean to express an
opinion as to the fairness, from a financial point of view, to the common stock
shareholders of Alfa Leisure, Inc. (the "Shareholders") of a price of fifty
cents ($0.50) per share to be paid to the Shareholders pursuant to a proposed
transaction, whereby all the outstanding stock of Alfa Leisure, Inc. not owned
by Mr. Johnnie Crean may be acquired.
My principal business is the valuation of businesses and business
interests, including both privately held companies and publicly traded
companies, for all purposes, including mergers and acquisitions, divestitures,
public offerings, gift and estate taxes, Employee Stock Ownership Plans,
corporate and partnership recapitalizations, dissolutions and other objectives.
Neither I nor any individual involved in this valuation and opinion
have any present or contemplated future interest in Alfa Leisure, Inc. or any
interest which might tend to prevent making a fair and unbiased appraisal, or
expressing a fair, independent and objective opinion. The fees paid to me for
preparation are in no way contingent upon any action or event resulting from the
opinions, conclusions or from the use of this opinion letter.
In arriving at this opinion, I considered the nature of the business
and the history of the enterprise, the economic outlook in general, the outlook
for the recreational vehicle industry in particular, the company's earnings and
cash flow for the last five years, the outlook for future earnings, the earnings
capacity and dividend paying capacity of the company, the book value of the
stock, the financial condition of the business, whether the enterprise has
goodwill or other intangible value, sales of the stock and the size of the
blocks being valued, and prices at which other publicly traded companies in
related lines of business are selling both on a minority and a control basis.
Specific documents relied upon in arriving at this opinion included
audited financial statements for the periods ended April 30, 1992 through April
30, 1997; interim financial statements for the nine months ended January 31,
1998; Securities and Exchange Commission Forms 10-K filed by the company for the
fiscal years ended April 30, 1992 through April 30, 1997; Securities and
Exchange Commission Form 10-Q filed by the company for the fiscal quarter ended
January 31, 1998; company Articles of Incorporation and Bylaws; Riverside county
property tax assessment records; and County Recorder's
11(a)-18
<PAGE> 19
Mr. Johnnie Crean
Alfa Leisure, Inc.
March 31, 1998
Page 2
records. I also analyzed financial statements and other material regarding
comparative public companies, acquisition data for the recreational vehicle
industry, required rates of return on common stocks in general, material
discussing the economic outlook of the recreational vehicle industry and other
such material as was deemed appropriate.
In rendering this opinion, I relied, without independent verification,
on the accuracy, completeness and fairness of all financial and other
information that was publicly available or that was furnished by the company.
Based on the analysis of the factors deemed relevant in conformance
with professional appraisal standards, it is my opinion that the proposed cash
offer for the outstanding common stock of Alfa Leisure, Inc. not held by Mr.
Johnnie Crean at a price of fifty cents ($0.50) per share is fair from a
financial point of view to the Shareholders of Alfa Leisure, Inc.
Very truly yours,
William R. Black
11(a)-19
<PAGE> 20
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
OF
ALFA LEISURE, INC.
FOR PURCHASE AT
$.50 NET PER SHARE
BY
JOHNNIE R. CREAN
- --------------------------------------------------------------------------------
The Offer and Withdrawal Rights will expire at 5:00 p.m., California time, on
Tuesday, June 30, 1998, unless extended.
- --------------------------------------------------------------------------------
The Depositary:
American Stock Transfer & Trust Company
By Mail or By Hand:
40 Wall Street
New York, New York 10005
Facsimile Copy Number:
(718) 236-4588
For Information Call:
Shareholder Relations Department
(718) 921-8200
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE DOES NOT
CONSTITUTE A VALID DELIVERY. THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF
TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS
COMPLETED.
<TABLE>
<CAPTION>
===========================================================================================================================
DESCRIPTION OF SHARES TENDERED
- ---------------------------------------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF REGISTERED OWNER(S) SHARES TENDERED
(PLEASE FILL IN, IF BLANK) (ATTACH ADDITIONAL SIGNED SCHEDULE, IF NECESSARY)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
TOTAL NUMBER OF NUMBER OF
CERTIFICATE SHARES REPRESENTED SHARES
NUMBER(S) BY CERTIFICATE(S) TENDERED*
--------------------------------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
TOTAL SHARES
- ---------------------------------------------------------------------------------------------------------------------------
* UNLESS OTHERWISE INDICATED, IT WILL BE ASSUMED THAT ALL SHARES EVIDENCED BY ANY CERTIFICATES DELIVERED TO THE DEPOSITORY
ARE INTENDED TO BE TENDERED.
===========================================================================================================================
</TABLE>
11(a)-20
<PAGE> 21
This Letter of Transmittal is to be used only if certificates are to be
forwarded herewith pursuant to the procedures set forth in Section 4 of the
Offer to Purchase.
Shareholders whose certificates are not immediately available or who
cannot deliver their certificates and all other documents required hereby to the
Depositary on or prior to the Expiration Date should tender their Shares
according to the guaranteed delivery procedure set forth in Section 4 of the
Offer to Purchase. See Instruction 2.
[ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A
NOTICE OF GUARANTEED DELIVERY DELIVERED TO THE DEPOSITARY PRIOR TO
THE DATE HEREOF AND COMPLETE THE FOLLOWING:
Name(s) of Registered Owner(s)
-----------------------------------------
Window Ticket Number (if any)
------------------------------------------
Date of Execution of Notice of Guaranteed Delivery
---------------------
Name of Institution which Guaranteed Delivery
--------------------------
PLEASE READ CAREFULLY THE ACCOMPANYING INSTRUCTIONS
LADIES AND GENTLEMEN:
THE UNDERSIGNED HEREBY TENDERS TO JOHNNIE R. CREAN ("PURCHASER") THE
SHARES OF COMMON STOCK, NO PAR VALUE PER SHARE (THE "SHARES"), OF ALFA LEISURE,
INC., A TEXAS CORPORATION (THE "COMPANY"), PURSUANT TO THE PURCHASER'S OFFER TO
PURCHASE 714,264 SHARES AT A PRICE OF $.50 PER SHARE, NET TO THE SELLER IN CASH,
UPON THE TERMS AND SUBJECT TO THE CONDITIONS SET FORTH IN THE PURCHASER'S OFFER
TO PURCHASE DATED APRIL 29, 1998 (THE "OFFER TO PURCHASE"), RECEIPT OF WHICH IS
HEREBY ACKNOWLEDGED, AND THIS LETTER OF TRANSMITTAL (WHICH TOGETHER CONSTITUTE
THE "OFFER").
Upon the terms and subject to the conditions of the Offer, subject to,
and effective upon, acceptance for payment of the Shares tendered hereby, the
undersigned hereby sells, assigns and transfers to, or upon the order of, the
Purchaser, all right, title and interest in and to all of the Shares that are
being tendered hereby and any and all non-cash dividends, distributions, rights,
other shares or other securities issued or issuable in respect thereof on or
after April 29, 1998. The undersigned hereby irrevocably constitutes and
appoints the Depositary the true and lawful agent and attorney-in-fact of the
undersigned with respect to such Shares with full power of substitution (such
power of attorney being deemed to be an irrevocable power coupled with an
interest) to (a) deliver certificates for such Shares together with all
accompanying evidences of transfer and authenticity, to or upon the order of the
Purchaser upon receipt by the Depositary, as the undersigned's agent, of the
purchase price (adjusted, if appropriate, as provided in the Offer to Purchase),
(b) present such Shares for transfer on the Company's books, and (c) receive all
benefits and otherwise exercise all rights of beneficial ownership of such
Shares.
The name and address of the registered owner should be printed, if not
already printed above, exactly as they appear on the certificates representing
Shares tendered hereby. The certificates and the number of Shares that the
undersigned wishes to tender should be indicated in the appropriate boxes.
11(a)-21
<PAGE> 22
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, sell, assign, and transfer the tendered
Shares, and that the Purchaser will acquire good and unencumbered title thereto,
free and clear of all liens, restrictions, charges and encumbrances, and not
subject to any adverse claim, when tendered Shares are accepted for payment by
the Purchaser. The undersigned will, upon request, execute and deliver any
additional documents deemed by the Depositary or the Purchaser to be necessary
or desirable to complete the sale, assignment and transfer of the tendered
Shares.
All authority conferred or agreed to be conferred in this Letter of
Transmittal shall be binding upon the successors, assigns, heirs, executors,
administrators, trustees in bankruptcy and legal representatives of the
undersigned and shall not be affected by, and shall survive, the death or
incapacity of the undersigned. Except as stated in the Offer to Purchase, this
tender is irrevocable.
The undersigned understands that acceptance of the Offer pursuant to
one of the procedures in Section 4 of the Offer to Purchase and in the
Instructions hereto will constitute an agreement between the undersigned and the
Purchaser upon the terms and subject to the conditions of the Offer.
Unless otherwise indicated under "Special Payment Instructions," please
issue the check for the purchase price and/or return any Shares not tendered or
not accepted for payment in the name of the registered holder appearing under
"Description of Shares Tendered." Similarly, unless otherwise indicated under
"Special Delivery Instructions," please mail the check for the purchase price
and/or return any Shares not tendered or not accepted for payment (and
accompanying documents, as appropriate) to the address of the registered holder
appearing under "Description of Shares Tendered." In the event that both the
Special Delivery Instructions and the Special Payment Instructions are
completed, please issue the check for the purchase price and/or return any
Shares not so tendered or accepted for payment in the name of, and deliver said
check and/or return any Shares to, the person or person so indicated. The
undersigned recognizes that the Purchaser has no obligation, pursuant to the
Special Payment Instructions, to transfer any Shares from the name of the
registered holder thereof if the Purchaser does not accept for payment any of
the Shares so tendered.
- --------------------------------------------------------------------------------
SPECIAL PAYMENT INSTRUCTIONS
(See Instructions 3, 5 and 6)
To be completed ONLY if certificates for Shares not tendered or not
purchased and/or the check for the purchase price of Shares purchased are to be
issued in the name of or sent to someone other than the undersigned.
Issue [ ] check [ ] certificates to:
Name
Address
(Include Zip Code)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SPECIAL PAYMENT INSTRUCTIONS
(See Instructions 3, 5 and 6)
To be completed ONLY if certificates for Shares not tendered or not
purchased and/or the check for the purchase price of Shares purchased are to be
issued in the name of or sent to someone other than the undersigned.
Issue [ ] check [ ] certificates to:
Name
Address
(Include Zip Code)
- --------------------------------------------------------------------------------
11(a)-22
<PAGE> 23
- --------------------------------------------------------------------------------
SHAREHOLDER SIGN HERE
Signature(s)
Capacity
(See Instruction 5)
Dated:_________________________, 1998
Must be signed by registered holder(s) exactly as name(s) appear(s)
on certificate(s) or on a security position listing or by person(s) authorized
to become registered holder(s) by certificate(s) and documents transmitted
herewith. If signature is by an attorney-in-fact, executor, trustee, guardian,
officer of a corporation or another acting in a fiduciary or representative
capacity, please set forth the full title. See Instruction 1 and 5
Name(s)
Please Type or Print
Address
- -------------------------------------
Area Code and Tel. No. Tax Identification or
Social Security No.
SIGNATURE GUARANTEE
(If Required - See Instructions 1 and 5)
Authorized Signature
Name
Please Type or Print
Title
Name of Firm
Address
Zip Code
Dated: , 1998
- -------------------------------------------- --------------
Area Code and Tel. No.
- --------------------------------------------------------------------------------
11(a)-23
<PAGE> 24
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. Guarantee of Signatures. No signature guarantee on this Letter of
Transmittal is required (i) if this Letter of Transmittal is signed by the
registered holder of Shares tendered herewith and payment is to be made directly
to such registered holder, or (ii) if such Shares are tendered for the account
of a member firm of any registered national securities exchange or the National
Association of Securities Dealers, Inc. or a commercial bank or trust company
having an office or correspondent in the United States (an "Eligible
Institution"). In all other cases, all signatures on this Letter of Transmittal
must be guaranteed by an Eligible Institution. See Instruction 5.
2. Delivery of Letter of Transmittal and Certificates. Certificates
for all physically tendered Shares, as well as a properly completed and duly
executed Letter of Transmittal or facsimile thereof, and any other documents
required by this Letter of Transmittal, must be received by the Depositary at
its address set forth herein on or prior to the Expiration Date (as defined in
Section 1 of the Offer to Purchase). Shareholders whose certificates are not
immediately available or who cannot deliver their certificates and all other
required documents to the Depositary on or prior to the Expiration Date may
tender their Shares by properly completing and duly executing the Notice of
Guaranteed Delivery pursuant to the guaranteed delivery procedure set forth in
Section 4 of the Offer to Purchase. Pursuant to such procedure: (i) such 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 by the Purchaser, must be received by the Depositary on or prior to the
Expiration Date, and (iii) the certificates for all physically tendered Shares
as well as a properly completed and duly executed Letter of Transmittal (or
facsimile thereof) and all other documents required by this Letter of
Transmittal, must be received by the Depositary within thirty (30) business days
after receipt of the Depositary of such Notice of Guaranteed Delivery, all as
provided in Section 4 of the Offer to Purchase. If certificates for Shares are
forwarded separately to the Depositary, a properly completed and duly executed
Letter of Transmittal must accompany each such delivery.
3. Stock Transfer Taxes. Except as set forth in this Instruction 3,
no stock transfer tax stamps or funds to cover such stamps need accompany this
instrument. Any stock transfer taxes applicable to the transfer and sale to the
Purchaser will be paid by or on behalf of the Purchaser. If payment of the
purchase price is to be made to an assignee of the registered holder, or if
deposited stock certificates are not registered in the name of the person
signing this Letter of Transmittal, the amount of any stock transfer taxes on
account of the transfer to such assignee or such persons will be deducted from
the purchase price if evidence of the payment of such tax, or exemption
therefrom, is not submitted.
4. Partial Tender. If fewer than all the Shares evidenced by any
certificate submitted are to be tendered, fill in the number of Shares which are
to be tendered in the box entitled "Number of Shares Tendered." In such case,
new certificates will be sent to you, unless otherwise provided in the
appropriate box on this Letter of Transmittal, as soon as practicable after the
expiration of the Offer. All Shares represented by certificates delivered to the
Depositary will be deemed to have been tendered unless otherwise indicated.
5. Signatures on Letter of Transmittal, Stock Powers and
Endorsements. If this Letter of Transmittal is signed by the registered holder
of the Shares tendered hereby, the signature must correspond exactly with the
name as written on the face of the certificates without alteration, enlargement
or any change whatsoever.
11(a)-24
<PAGE> 25
If any of the Shares tendered hereby are owned of record by two or
more joint owners, all such owners must sign this Letter of Transmittal.
If any tendered Shares are registered in different names on several
certificates, it will be necessary to complete, sign and submit as many separate
Letters of Transmittal as there are different registrations of certificates.
When this Letter of Transmittal is signed by the registered owners of
the Shares listed and transmitted hereby, no endorsements of certificates or
separate stock powers are required. If, however, the certificates for Shares not
tendered are to be issued to a person other than the registered owner, then
endorsement of certificates transmitted hereby or separate stock powers are
required.
If this Letter of Transmittal or any certificate or stock power is
signed by trustees, executors, administrators, guardians, attorneys-in-fact,
partners of a partnership, officers of corporations or others acting in a
fiduciary or representative capacity, such persons should so indicate when
signing, and proper evidence satisfactory to the Purchaser of their authority so
to act must be submitted.
If this Letter of Transmittal is signed by a person other than the
registered owner of the certificate listed, the certificates must be endorsed or
accompanied by appropriate stock powers, in either case signed exactly as the
name or names of the registered owner or owners appear on the certificates.
Signatures on such certificates or stock powers must be guaranteed by an
Eligible Institution.
No signature guarantee is required for certificates or stock powers
required by this Instruction 5 if (a) this Letter of Transmittal is signed by
the registered holder of Shares tendered herewith and payment is to be made
directly to such registered holder or (b) such Shares are tendered for the
account of an Eligible Institution. In all other cases, all signatures on this
Letter of Transmittal must be guaranteed by an Eligible Institution.
6. Special Payment and Delivery Instructions. If a check is to be
issued in the name of, and/or certificates for unpurchased Shares are to be
returned to, a person other than the signer of this Letter of Transmittal or if
a check is to be sent and/or such certificates are to be returned to someone
other than the signer of this Letter of Transmittal or to an address other than
that shown above, the appropriate boxes on this Letter of Transmittal should be
completed.
7. Method of Delivery of Letter of Transmittal and Certificates. The
method of delivery of this Letter of Transmittal, the stock certificates and any
other required documents is at the option and risk of the tendering shareholder
and, except as otherwise provided in Instruction 2 above, the delivery will be
deemed made only when actually received by the Depositary. If such delivery is
by mail, registered mail with return receipt requested, properly insured, is
recommended. For those shareholders who desire to tender by mail, an envelope
addressed to the Depositary is enclosed.
8. Conditional Tenders. No alternative, conditional, irregular or
contingent tenders will be accepted.
9. Inadequate Space If the space provided on the front page of this
Letter of Transmittal is inadequate, the certificate numbers and/or the number
of Shares should be listed on a separate signed schedule to be affixed hereto.
10. Waiver of Conditions. The conditions of the Offer may be waived
by the Purchaser, in whole or in part, at any time and from time to time in the
Purchaser's sole discretion, in the case of any Shares tendered.
11(a)-25
<PAGE> 26
11. Requests for Assistance or Additional Copies. Questions and
requests for assistance or additional copies of the Offer to Purchase, the
Letter of Transmittal and the Notice of Guaranteed Delivery may be directed to
the Depositary as set forth below.
12. Substitute Form W-9. The tendering shareholder is required to
provide the Depositary with a correct Taxpayer Identification Number ("TIN") on
Substitute Form W-9, which is provided below, and to indicate that the
shareholder is not subject to backup withholding by checking the box in Part 2
of the form. Failure to provide the information on the form may subject the
tendering shareholder to 20 percent federal income tax withholding on the
payment of the purchase price. The box in Part 3 of the form may be checked if
the tendering shareholder has not been issued a TIN and has applied for a number
or intends to apply for a number in the near future. If the box in Part 3 is
checked and the Depositary is not provided with a TIN within thirty (30) days,
the Depositary will withhold 20 percent on all payments of the purchase price
thereafter until a TIN is provided to the Depositary.
11(a)-26
<PAGE> 27
IMPORTANT TAX INFORMATION
Under the federal income tax law, a shareholder whose tendered Shares
are accepted for payment is required by law to provide the Depositary (as payer)
with his correct taxpayer identification number on Substitute Form W-9 below. If
such shareholder is an individual, the taxpayer identification number is his
social security number. If the Depositary is not provided with the correct
taxpayer identification number, the shareholder may be subject to a $50 penalty
imposed by the Internal Revenue Service. In addition, payments that are made to
such shareholder with respect to Shares purchased pursuant to the Offer may be
subject to backup withholding.
Exempt shareholders (including, among others, all corporations and
certain foreign individuals) are not subject to these backup withholding and
reporting requirements. In order for a foreign individuals to qualify as an
exempt recipient, that shareholder must submit a statement, signed under
penalties of perjury, attesting to that individual's exempt status. Such
statements can be obtained from the Depositary. See the enclosed Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9 for
additional instructions.
If backup withholding applies, the Depositary is required to withhold
20 percent of any such payments made to the shareholder. Backup withholding is
not an additional tax. Rather, the tax liability of persons subject to backup
withholding will be reduced by the amount of tax withheld. If withholding
results in an overpayment of taxes, a refund may be obtained.
Purpose of Substitute Form W-9
To prevent backup withholding on payments that are made to a
shareholder with respect to Shares purchased pursuant to the Offer, the
shareholder is required to notify the Depositary of his correct taxpayer
identification number by completing the form above certifying that the taxpayer
identification number provided on Substitute Form W-9 is correct (or that such
shareholder is awaiting a taxpayer identification number) and that (l) the
shareholder has not been notified by the Internal Revenue Service that he is
subject to backup withholding as a result of a failure to report all interest or
dividends or (2) the Internal Revenue Service has notified the shareholder that
he is no longer subject to backup withholding.
What Number to Give the Depositary
The shareholder is required to give the Depositary the social
security number or employer identification number of the record owner of the
Shares. If the Shares are in more than one name or are not in the name of the
actual owner, consult the enclosed Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 for additional guidelines on which
number to report.
NOTE: FAILURE TO COMPLETE AND RETURN THE FORM BELOW MAY RESULT IN
BACKUP WITHHOLDING OF 20% OF ANY PAYMENTS MADE TO YOU
PURSUANT TO THE OFFER. PLEASE REVIEW ENCLOSED GUIDELINES FOR
CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE
FORM W-9 FOR ADDITIONAL DETAILS.
11(a)-27
<PAGE> 28
PAYER'S NAME:
---------------------------------
- --------------------------------------------------------------------------------
SUBSTITUTE Part 1 -- PLEASE Social Security Number
PROVIDE YOUR OR
FORM W-9 TIN IN THE BOX ---------------------------
AT RIGHT AND Employer Identification No.
Department of the CERTIFY BY
Treasury SIGNING AND
Internal Revenue DATING BELOW
Service
--------------------------------------------------------
Part 2 -- CHECK THE BOX IF YOU ARE NOT SUBJECT TO BACKUP
WITHHOLDING under the provisions of section
3406(a)(1)(C) of the Internal Revenue Code because (1)
you have not been notified that you are subject to
backup withholding as a result of failure to report all
interest or dividends or (2) the Internal Revenue
Service has notified you that you are no longer subject
to backup withholding. [ ]
--------------------------------------------------------
Payer's Request for
Taxpayer
Identification
Number ("TIN")
CERTIFICATION -- UNDER THE Part 3
PENALTIES OF PERJURY, I CERTIFY
THAT THE INFORMATION PROVIDED ON Awaiting TIN [ ]
THIS FORM IS TRUE, CORRECT, AND
COMPLETE.
SIGNATURE
-----------------------
DATE
---------------------------
- --------------------------------------------------------------------------------
11(a)-28
<PAGE> 29
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
Guidelines for Determining the Proper Identification Number to Give the Payer.
- -- Social Security numbers have nine digits separated by two hyphens: i.e.
000-00-0000. Employer identification numbers have nine digits separated by only
one hyphen: i.e. 00-0000000. The table below will help determine the number to
give the payer.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
FOR THIS TYPE OF ACCOUNT GIVE THE SOCIAL SECURITY number of:
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C>
1. An individual's account The individual
2. Two or more individuals (joint account) The actual owner of the account or, if combined funds,
any one of the individuals(1)
3. Husband and wife (joint account) The actual owner of the account or, if joint funds, either
person(1)
4. Custodian account of a minor (Uniform Gift to The minor(2)
Minors Act)
5. Adult and minor (joint account) The adult or, if the minor is the only contributor, the
minor(1)
6. Account in the name of guardian or committee The ward, minor, or incompetent person(3)
for a designated ward, minor or incompetent
person
7. (a) The usual revocable savings trust account The grantor-trustee(1)
(grantor is also trustee)
(b) So-called trust account that is not a legal or The actual owner(1)
valid trust under State law
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
FOR THIS TYPE OF ACCOUNT: Give the EMPLOYER IDENTIFICATION number of:
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C>
8. Sole proprietorship account The Owner(4)
9. A valid trust, estate, or pension trust Legal entity (Do not furnish the identifying number of
the personal representative or trustee unless the legal
entity itself is not designated in the account title.)(5)
10. Corporate account The Corporation
11. Religious, charitable or educational The organization
organization account
12. Partnership account held in the name of The partnership
13. Association, club, or other tax-exempt The organization
organization
14. A broker or registered nominee The broker or nominee
15. Account with the Department of Agriculture in The public entity
the name of a public entity (such as a State
or local government, school district, or prison)
that receives agricultural program payments.
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor a social security number.
(3) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
(4) Show the name of the owner.
(5) List first and circle the name of the legal trust, estate or pension
trust.
NOTE: If no name is circled when there is more than one name, the number will be
considered to be that of the first name listed
11(a)-29
<PAGE> 30
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
PAGE 2
OBTAINING A NUMBER
If you don't have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Number Card, or Form
SS-4, Application for Employer Identification Number, at the local office of the
Social Security Administration or the Internal Revenue Service and apply for a
number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on ALL payments include the
following:
- - A corporation
- - A financial institution
- - An organization exempt from tax under section 501(a), or an individual
retirement plan.
- - The United States or any agency or instrumentality thereof.
- - A State, the District of Columbia, a possession of the United States, or
any subdivision or instrumentality thereof.
- - A foreign government, a political subdivision of a foreign government, or
any agency or instrumentality thereof.
- - An international organization or any agency, or instrumentality thereof.
- - A registered dealer in securities or commodities registered in the U.S. or
a possession of the U.S.
- - A real estate investment trust.
- - A common trust fund operated by a bank under section 584(a).
- - An exempt charitable remainder trust, or a non-exempt trust described in
section 4947(a)(1).
- - An entity registered at all times under the Investment Company Act of
1940.
- - A foreign central bank of issue.
Payments of dividends and patronage dividends not generally subject to backup
withholding include the following:
- - Payments to nonresident aliens subject to withholding under section 1441.
- - Payments to partnerships not engaged in a trade or business in the U.S.
and which have at least one nonresident partner.
- - Payments of patronage dividends where the amount received is not paid in
money.
- - Payments made by certain foreign organizations.
- - Payments made to a nominee.
11(a)-30
<PAGE> 31
Payments of interest not generally subject to backup withholding include the
following:
- - Payments of interest on obligations issued by individuals.
NOTE: You may be subject to backup withholding if this interest is $600 or
more and is paid in the course of the payer's trade or business and you
have not provided your correct taxpayer identification number to the
payer.
- - Payments of tax-exempt interest (including exempt interest dividends under
section 852).
- - Payments described in section 6049(b)(5) to nonresident aliens.
- - Payments on tax-free covenant bonds under section 1451.
- - Payments made by certain foreign organizations.
- - Payments made to a nominee.
Exempt payees described above should file Form W-9 to avoid possible
erroneous backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR
TAXPAYER IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, AND
RETURN IT TO THE PAYER. IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE
DIVIDENDS, ALSO SIGN AND DATE THE FORM.
Certain payments other than interest, dividends and patronage dividends
that are not subject to information reporting are also not subject to backup
withholding. For details, see the regulations under sections 6041, 6041A(a),
6045, and 6050A.
PRIVACY ACT NOTICE. - Section 6109 requires most recipients of dividend,
interest, or other payment to give taxpayer identification numbers to payers who
must report the payments to IRS. IRS uses the numbers for identification
purposes. Payers must be given the numbers whether or not recipients are
required to file tax returns. Beginning January 1, 1984, payers must generally
withhold 20% of taxable interest, dividend, and certain other payments to a
payee who does not furnish a taxpayer identification number to a payer. Certain
penalties may also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER. - If you fail
to furnish your taxpayer identification number to a payer, you are subject to a
penalty of $50 for each such failure unless your failure is due to reasonable
cause and not to willful neglect.
(2) FAILURE TO REPORT CERTAIN DIVIDEND AND INTEREST PAYMENTS. If you fail to
include any portion of an includible payment for interest, dividends, or
patronage dividends in gross income, such failure will be treated as being due
to negligence and will be subject to a penalty of 5% on any portion of an
under-payment attributable to that failure unless there is clear and convincing
evidence to the contrary.
(3) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING. - If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.
(4) CRIMINAL PENALTY FOR FALSIFYING INFORMATION. - Falsifying certifications or
affirmations may subject you to criminal penalties including fines and/or
imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX
CONSULTANT OR THE INTERNAL REVENUE SERVICE
11(a)-31
<PAGE> 32
NOTICE OF GUARANTEED DELIVERY
OF SHARES OF COMMON STOCK OF
ALFA LEISURE, INC.
A form substantially equivalent to that set forth below must be used to
accept the Offer (as defined below) if certificates for shares of common stock,
no par value per share (the "Shares"), of Alfa Leisure, Inc. and all other
required documents cannot be delivered to the Depositary by the expiration of
the Offer. Such form may be delivered by hand or transmitted by telegram, telex,
facsimile transmission or letter to the Depositary. See Section 4 of the Offer
to Purchase.
The Depositary:
American Stock Transfer & Trust Company
By Mail or By Hand:
40 Wall Street
New York, New York 10005
Facsimile Copy Number:
(718) 236-4588
For Information Call:
Shareholder Relations Department
(718) 921-8200
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE DOES NOT CONSTITUTE A VALID DELIVERY
Ladies and Gentlemen:
The undersigned hereby tenders to Johnnie R. Crean, upon the terms and
subject to the conditions set forth in the Offer to Purchase dated April 29,
1998 and the related Letter of Transmittal (which together constitute the
"Offer"), receipt of which is hereby acknowledged, _________________________
Shares pursuant to the guaranteed delivery procedures set forth in Section 4 of
the Offer to Purchase.
Certificate Nos. (if available) Name(s) of Record Holder(s)
- ----------------------------------- -----------------------------------------
- ----------------------------------- -----------------------------------------
Address(es):
-----------------------------
-----------------------------------------
Area Code and Tel. No.
-------------------
11(a)-32
<PAGE> 33
GUARANTEE
The undersigned, a member firm of a registered national securities
exchange, a member of the National Association of Securities Dealers, Inc. or a
commercial bank or trust company having an office, agency, branch or
correspondent in the United States, hereby (i) guarantees that the certificates
representing the Shares tendered hereby, together with the Letter of Transmittal
and any other required documents, will be received by the Depositary at one of
its addresses set forth above, no later than business days after the date
hereof, (ii) represents that such tender complies with Rule 10b-4 under the
Securities Exchange Act of 1934, as amended, and (iii) represents that the
shareholder on whose behalf this tender is being made is deemed to own the
Shares being tendered within the meaning of Rule 10b-4.
-----------------------------------------
(Firm)
-----------------------------------------
(Authorized Signature)
-----------------------------------------
Dated: , 1998
-----------------------------------------
(Area Code and Telephone Number)
11(a)-33
<PAGE> 1
EXHIBIT 11(b)
Chino, California _______________, 1998
$________________
PROMISSORY NOTE
1. Obligation. For value received, JOHNNIE R. CREAN ("Maker")
promises to pay to MERLIN FINANCIAL, INC., a Nevada corporation, or order
("Holder") the Principal Amount and Interest (both as defined below) in the
manner and upon the terms and conditions set forth herein (the "Obligation").
2. Amount and Payment. The principal amount ("Principal Amount") of
this Promissory Note ("Note") is _________________________________ Dollars
($__________). This Note shall bear interest on the unpaid Principal Amount at
the rate of eight percent (8%) per annum. The entire Principal Amount and all
Interest on this Note shall be all due and payable one (1) year after the date
of this Note.
3. Manner and Place of Payment. Payments of the Principal Amount and
Interest shall be made in lawful money of the United States of America.
Principal and Interest are payable at 350 South Center Street, Suite 530, Reno,
NV 89501, or at such place as Holder may designate in writing.
4. Prepayment. Maker shall have the right, at his option, to prepay
this Note, in part or in full, at any time and from time to time, prior to
maturity, without penalty, bonus or charge. All prepayments shall be credited to
the payments next due under this Note.
5. Events of Default. The following shall each constitute an "Event
of Default" under this Note: (i) default in the payment when due of an
installment of Principal Amount or Interest and such default shall continue for
a period of fifteen (15) days; and (ii) any of the following events of
bankruptcy or insolvency: (A) Maker shall file a voluntary bankruptcy or
reorganization petition under the provisions of the Federal Bankruptcy Act, any
other bankruptcy or insolvency law or any other similar statute applicable to
Maker ("Bankruptcy Laws"), (B) Maker shall consent to the filing of any
bankruptcy or reorganization petition against him under any Bankruptcy Law, (C)
Maker shall make an assignment for the benefit of his creditors, (D) Maker shall
admit in writing his inability to pay his debts generally as they become due, or
(E) an involuntary bankruptcy reorganization petition pursuant to any Bankruptcy
Law shall be filed against Maker (and, in the case of any such petition filed
pursuant to any provision of a statute which requires the approval of such
petition by a court, shall be approved by such a court) and shall not be
dismissed within sixty (60) days after such filing.
6. Acceleration Upon Event of Default. Upon the occurrence of an
Event of Default specified in Section 5 above, all accrued Interest and the then
unpaid Principal Amount of this Note shall, at the option of Holder, become
immediately due and payable, without further presentment, notice or demand for
payment.
7. Expenses of Enforcement. In any legal action, arbitration or
alternate dispute resolution proceeding based upon or concerning this Note, the
successful or prevailing party shall be entitled to recover its actual attorney
fees and costs incurred in that action or proceeding, in addition to all other
relief to which it is entitled, regardless of whether the proceeding is
concluded by settlement, award or judgment.
8. Cumulative Rights and Remedies. All rights and remedies of Holder
under this Note shall be cumulative and not alternative and shall be in addition
to all rights and remedies available to Holder under applicable law.
9. Governing Law. This Note shall be governed by, and construed and
enforced in accordance with, the internal laws of the State of Nevada. All
actions or proceedings with respect to this Note may be instituted in the courts
located in the State of Nevada. Maker and Holder each consent to the
jurisdiction of such courts.
11(b)-1
<PAGE> 2
IN WITNESS WHEREOF, Maker has caused this Note to be executed and
delivered at Chino, California as of the day and year first-above written.
----------------------------------------
JOHNNIE R. CREAN
11(b)-2
