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
---------------------
AMERICAN CAPITAL CORPORATION
TRANSCAPITAL FINANCIAL CORPORATION
(Names of Subject Companies)
---------------------
ALLIANCE STANDARD II L.L.C.
ALLIANCE STANDARD II CORP.
(Bidders)
---------------------
$3.75 Series A Preferred Stock, $1.00 Par Value, of American Capital Corporation
Common Stock, Par Value $1.00 Per Share, of TransCapital Financial Corporation
(Titles of Classes of Securities)
---------------------
024898207 ($3.75 Series A Preferred Stock of American Capital Corporation)
893528109 (Common Stock of TransCapital Financial Corporation)
(CUSIP Numbers of Classes of Securities)
---------------------
Michael L. Lewittes Keith R. Bish
ALLIANCE STANDARD II L.L.C. ALLIANCE STANDARD II CORP.
520 Madison Avenue - 7th Floor c/o International Fund Administration, Ltd.
New York, NY 10022 48 Par-la-Ville Road - Suite 464
Telephone: (212) 826-6805 Hamilton HM11, Bermuda
Telephone: (441)295-4718
with copies to:
Thomas E. Kruger
Battle Fowler LLP
75 East 55th Street
New York, New York 10022
Telephone: (212) 856-7000
(Name, Address and Telephone Number of Persons Authorized to
Receive Notices and Communications on Behalf of Bidders)
CALCULATION OF FILING FEE
- -------------------------------------------------------------------------------
TRANSACTION VALUATION* AMOUNT OF FILING FEE**
$2,500,000 $500
- -------------------------------------------------------------------------------
* Based on the offer to purchase up to 1,100,000 shares of Preferred
Stock of American Capital Corporation at $0.50 cash per share, and up
to 1,950,000 shares of Common Stock of TransCapital Financial
Corporation at $1.00 cash per share.
** 1/50 of 1% of Transaction Value.
1
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SCHEDULE 14D-1
AMERICAN CAPITAL CORPORATION
TRANSCAPITAL FINANCIAL CORPORATION
This statement on Schedule 14D-1 (this "Statement") relates to the
offer by Alliance Standard II L.L.C. ("Purchaser LLC"), a Delaware limited
liability company wholly-owned by LJ Investments, L.L.C. ("Investments LLC"), a
Delaware limited liability company, and Alliance Standard II Corp. ("Purchaser
Corp.," and collectively with Purchaser LLC, the "Purchasers"), a British Virgin
Islands corporation wholly-owned by LJ Investments Corp. (collectively with
Investments LLC, the "Funds"), a British Virgin Islands corporation, to
purchase:
(i) up to $30,000,000 principal amount of outstanding 8.40%
Subordinated Notes due 1993 (the "Notes") of American Capital
Corporation, a Florida corporation ("ACC"), at a price of $100
per $1,000 principal amount of Notes (including any accrued
interest thereon),
(ii) up to 1,100,000 shares of $3.75 Series A Preferred Stock, $1.00
par value (the "ACC Preferred Shares") of ACC, at a price of
$0.50 per ACC Preferred Share, and
(iii) up to 1,950,000 shares of Common Stock, par value $1.00 per
share (the "TFC Common Shares" and together with the ACC
Preferred Shares, the "Shares") of TransCapital Financial
Corporation, a Delaware corporation ("TFC" and together with
ACC, the "Companies"), at a price of $1.00 per TFC Common Share,
net to the seller in cash, upon the terms and subject to the conditions set
forth in the Offer to Purchase, dated January 12, 1998 (the "Offer to
Purchase"), and in the three related Letters of Transmittal, copies of which are
attached hereto as Exhibits (a)(1), (a)(2) and (a)(3), respectively (which
collectively constitute the "Offer").
ITEM 1. SECURITY AND SUBJECT COMPANY.
(a) The names of the Companies are American Capital Corporation, a
Florida corporation, and TransCapital Financial Corporation, a Delaware
corporation. The address of ACC's principal executive offices is 1221 Brickell
Avenue, #2650, Miami, Florida 33131, as reported on ACC's Quarterly Report on
Form 10-Q for the quarter ended September 30, 1995, the most recent filing made
by ACC with the Securities and Exchange Commission (the "Commission"). The
address of TFC's principal executive offices is 1221 Brickell Avenue, #2600,
Miami, Florida 33131, as reported on TFC's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1995, the most recent filing made by TFC with the
Commission.
2
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(b) - (c) The classes of securities to which this statement relates
are the $3.75 Series A Preferred Stock, $1.00 par value, of ACC, and the Common
Stock, par value $1.00 per share, of TFC. The information set forth in the
Introduction and Section 6 of the Offer to Purchase is incorporated herein by
reference.
ITEM 2. IDENTITY AND BACKGROUND.
(a) - (d); (g) The information set forth in Section 9 of the Offer
to Purchase is incorporated herein by reference. The name, business address,
present principal occupation or employment, the material occupations, positions,
offices or employment for the past five years and citizenship of each director
and executive officer of the Purchasers and the Funds, and the name, principal
business and address of any corporation or other organization in which such
occupations, positions, offices and employments are or were carried on are set
forth in Schedule I of the Offer to Purchase and incorporated herein by
reference.
(e) - (f) During the last five years, none of the Purchasers or the
Funds or, to the best of the Purchasers' respective knowledge, any of the
directors or executive officers of the Purchasers or the Funds has been
convicted in a criminal proceeding (excluding traffic violations or similar
offenses) or was a party to a civil proceeding of a judicial or administrative
body of competent jurisdiction as a result of which any such person was or is
subject to a judgment, decree or final order enjoining future violations of, or
prohibiting activities subject to, federal or state securities laws or finding
any violation of such law.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH
THE SUBJECT COMPANY.
(a) - (b) The information set forth in Section 9 of the Offer to
Purchase is incorporated herein by reference.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a) The information set forth in Section 10 of the Offer to purchase
is incorporated herein by reference.
(b) - (c) Not applicable.
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER.
(a) - (g) The information set forth in the Introduction and Sections 7
and 11 of the Offer to Purchase is incorporated herein by reference.
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ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
(a) - (b) The information set forth in Section 9 of the Offer to
Purchase is incorporated herein by reference.
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO THE SUBJECT COMPANY'S SECURITIES.
The information set forth in the Introduction and Sections 9,10 and 15
of the Offer to Purchase is incorporated herein by reference.
ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The information set forth in Section 15 of the Offer to Purchase is
incorporated herein by reference.
ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS.
Not applicable.
ITEM 10. ADDITIONAL INFORMATION.
(a) Not applicable.
(b) - (c) The information set forth in Section 14 of the offer to
Purchase is incorporated herein by reference.
(d) The information set forth in Section 7 of the Offer to purchase is
incorporated herein by reference.
(e) Not applicable.
(f) The information set forth in the Offer to Purchase and the Letters
of Transmittal, to the extent not otherwise incorporated herein by reference, is
incorporated herein by reference.
4
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ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit
Number Exhibit
(a)(1) Offer to Purchase, dated January 12, 1998.
(a)(2) Letter of Transmittal with respect to ACC Preferred Shares.
(a)(3) Letter of Transmittal with respect to TFC Common Shares.
(a)(4) Notice of Guaranteed Delivery for ACC Preferred Shares.
(a)(5) Notice of Guaranteed Delivery for TFC Common Shares.
(a)(6) Letter from IBJ Schroder Bank & Trust Company as depositary agent
for the Purchasers to brokers, dealers, banks, trust companies and
nominees.
(a)(7) Letter to be sent by brokers, dealers, banks, trust companies and
nominees to their clients.
(a)(8) IRS Guidelines for Certification of Taxpayer Identification Number
on Institute Form W-9.
(a)(9) Summary Advertisement, dated January 13, 1998.
(b) None.
(c)(1) Filing Agreement dated January 12, 1998 between Alliance Standard
II L.L.C. and Alliance Standard II Corp.
(c)(2) Agreement dated December 1, 1997 between JL Advisors, L.L.C. and
Collectible Certificates, L.L.C.
(d) None.
(e) Not applicable.
(f) None.
5
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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.
Dated: January 12, 1998 Alliance Standard II L.L.C.
By: LJ Investments, L.L.C., its managing
member
By: JL Advisors II, LLC, its managin
member
By: /s/ Michael L. Lewittes
-----------------------------
Michael L. Lewittes,
Member
By: Jaffe Capital Management Group,
LLC, member
By: /s/ Robert S. Jaffe
-------------------------
Robert S. Jaffe, Member
Alliance Standard II Corp.
By: /s/ Keith R. Bish
---------------------------------------
Keith R. Bish, Director
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<PAGE>
INDEX OF EXHIBITS
Sequentially
Exhibit Numbered
Number Exhibit Page
- ------- ------- ------------
(a)(1) Offer to Purchase, dated January 12, 1998.
(a)(2) Letter of Transmittal with respect to ACC Preferred Shares.
(a)(3) Letter of Transmittal with respect to TFC Common Shares.
(a)(4) Notice of Guaranteed Delivery for ACC Preferred Shares.
(a)(5) Notice of Guaranteed Delivery for TFC Common Shares.
(a)(6) Letter from IBJ Schroder Bank & Trust Company as
depositary agent for the Purchasers to brokers, dealers,
banks, trust companies and nominees.
(a)(7) Letter to be sent by brokers, dealers, banks, trust
companies and nominees to their clients.
(a)(8) IRS Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9.
(a)(9) Summary Advertisement, dated January 13, 1998.
(b) None.
(c)(1) Filing Agreement dated January 12, 1998 between Alliance
Standard II L.L.C. and Alliance Standard II Corp.
(c)(2) Agreement dated December 1, 1997 between JL Advisors,
L.L.C. and Collectible Certificates, L.L.C.
(d) None.
(e) Not applicable
(f) None.
7
Exhibit (a)(1)
ALLIANCE STANDARD II L.L.C. ALLIANCE STANDARD II CORP.
520 Madison Avenue c/o International Fund Administration, Ltd.
7th Floor 48 Par-la-Ville Road, Suite 464
New York, NY 10022 Hamilton HM11, Bermuda
Attention: Michael L. Lewittes
Telephone: (212) 826-6805
January 12, 1998
DEAR HOLDERS OF NOTES AND SHARES OF
PREFERRED STOCK OF AMERICAN CAPITAL CORPORATION
AND COMMON STOCK OF TRANSCAPITAL FINANCIAL
CORPORATION:
Alliance Standard II L.L.C. and Alliance Standard II Corp.
(collectively, the "Purchasers") are offering to purchase (the "Offer") the
following:
(i) up to $30,000,000 principal amount of outstanding 8.40%
Subordinated Notes due 1993 (the "Notes") of American Capital
Corporation, a Florida corporation ("ACC") for a price of $100
per $1,000 principal amount of Notes (including any accrued
interest thereon),
(i) up to 1,100,000 shares of $3.75 Series A Preferred Stock, $1.00
par value (the "ACC Preferred Shares") of ACC for a price of
$0.50 per ACC Preferred Share, and
(i) up to 1,950,000 shares of Common Stock, par value $1.00 per
share (the "TFC Common Shares" and together with the ACC
Preferred Shares, the "Shares") of TransCapital Financial
Corporation, a Delaware corporation ("TFC" and together with ACC,
the "Companies") for a price of $1.00 per Common Share.
<PAGE>
A copy of the offering materials is enclosed. The Purchasers believe,
in addition to the other information contained in the accompanying Offer to
Purchase, you should consider the following:
o ALL CASH OFFER
The Purchasers are offering to pay $100 IN CASH PER $1,000 PRINCIPAL
AMOUNT OF NOTES FOR UP TO $30,000,000 PRINCIPAL AMOUNT OF OUTSTANDING
NOTES tendered in response to the Offer, $0.50 IN CASH PER PREFERRED
SHARE FOR UP TO 1,100,000 ACC PREFERRED SHARES tendered in response to
the Offer, and $1.00 IN CASH PER COMMON SHARE FOR UP TO 1,950,000 TFC
COMMON SHARES tendered in response to the Offer.
o ILLIQUID MARKET FOR SHARES AND NOTES
The Notes are not publicly traded. The Purchasers believe that the ACC
Preferred Shares have never been listed on any stock exchange or on the
NASDAQ National Market. On July 20, 1992 the TFC Common Shares were
delisted from trading on the New York Stock Exchange, and the TFC
Common Shares are not currently listed on any stock exchange or on the
NASDAQ National Market. The Purchasers have been unable to find trading
history for the Notes and the Shares for the period after 1992.
Accordingly, the Offer affords you the opportunity to dispose of your
Notes or Shares for cash which otherwise might not be available to you.
o NO COMMISSION; NO FINANCING CONDITION
The $100 per $1,000 principal amount of Notes, $0.50 per ACC Preferred
Share and $1.00 per TFC Common Share purchase price will be ALL CASH,
WITHOUT COMMISSION OR OTHER COSTS TO ANY HOLDER who tenders his, her or
its shares. ALL COSTS AND COMMISSIONS WILL BE BORNE BY PURCHASERS.
Purchasers have committed funds available to pay for up to $30,000,000
principal amount of outstanding Notes, up to 1,100,000 ACC Preferred
Shares and up to 1,950,000 TFC Common Shares that are tendered and
accepted for payment in response to the Offer. The Offer is not subject
to financing.
o POTENTIAL TAX ADVANTAGES
If you originally paid more than $100 per $1,000 principal amount of
Notes, $0.50 per ACC Preferred Share or $1.00 per TFC Common Share, you
may be able to recognize a tax loss on the sale of Shares or Notes to
the Purchasers. This tax loss could be of substantial benefit to you.
You may be able to use these losses to offset capital gains realized on
other investments or to offset ordinary income up to an annual
deduction limitation of $3,000. EACH HOLDER OF NOTES OR SHARES
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<PAGE>
SHOULD CONSULT HIS, HER OR ITS OWN TAX ADVISER CONCERNING THE TAX
CONSEQUENCES OF ACCEPTING THIS OFFER TO PURCHASE.
IN DECIDING WHETHER OR NOT TO ACCEPT PURCHASERS' OFFER TO PURCHASE YOUR NOTES OR
SHARES, WHICH WOULD TERMINATE ANY RIGHTS YOU MAY HAVE AS A HOLDER OF ANY NOTES
OR SHARES ACCEPTED FOR PAYMENT AND PAID FOR PURSUANT TO THE OFFER, YOU SHOULD
CONSIDER CAREFULLY ALL OF THE ACCOMPANYING MATERIALS AND SHOULD REVIEW THESE
MATERIALS WITH YOUR BROKER OR OTHER FINANCIAL ADVISER.
Sincerely,
Alliance Standard II L.L.C.
Alliance Standard II Corp.
3
<PAGE>
PROCEDURE TO ACCEPT THE OFFER
IF YOU WISH TO ACCEPT THIS OFFER AND WISH TO TENDER ALL OR ANY PORTION OF YOUR
SHARES OR NOTES, YOU SHOULD FOLLOW ONE OF THESE TWO PROCEDURES:
(1) IF YOU OWN YOUR NOTES IN DEFINITIVE FORM (i.e., in the form of an original
note, and not in "street name"): You should complete and sign the enclosed BLUE
Letter of Transmittal in accordance with the instructions in such Letter of
Transmittal and mail or deliver the BLUE Letter of Transmittal together with
your definitive note(s), and any other required documents to the Depositary in
the enclosed, postage-paid, addressed envelope.
(2) IF YOU OWN YOUR ACC PREFERRED SHARES IN CERTIFICATE FORM: You should
complete and sign the enclosed YELLOW Letter of Transmittal in accordance with
the instructions in such Letter of Transmittal and mail or deliver the YELLOW
Letter of Transmittal together with your stock certificate(s), and any other
required documents to the Depositary in the enclosed, postage-paid, addressed
envelope.
(3) IF YOU OWN YOUR TFC COMMON SHARES IN CERTIFICATE FORM: You should complete
and sign the enclosed PINK Letter of Transmittal in accordance with the
instructions in such Letter of Transmittal and mail or deliver the PINK Letter
of Transmittal together with your stock certificate(s), and any other required
documents to the Depositary in the enclosed, postage-paid, addressed envelope.
(3) IF YOU HOLD YOUR SHARES OR NOTES IN A BROKER, DEALER, BANK, TRUST OR OTHER
NOMINEE ACCOUNT: You should contact your broker, dealer, bank, trust or nominee
representative and request that they tender the Shares or Notes on your behalf.
IF YOU HAVE ANY QUESTIONS
Questions and requests for assistance (including if you are unable to locate
your stock certificates or deliver them prior to the Expiration Date) may be
directed to MacKenzie Partners, Inc., the Information Agent, at its address and
telephone number set forth below. Additional copies of the Offer to Purchase,
the Letters of Transmittal, the Notices of Guaranteed Delivery and other related
materials may be obtained from the Information Agent or from brokers, dealers,
commercial banks and trust companies.
The Information Agent for the Offer is:
MacKenzie
Partners, Inc.
156 Fifth Avenue
New York, New York 10010
(212)929-5500 (Call Collect)
or
Call Toll-Free (800)322-2885
4
<PAGE>
OFFER TO PURCHASE FOR CASH
UP TO $30,000,000 PRINCIPAL AMOUNT OF OUTSTANDING
8.40% SUBORDINATED NOTES DUE 1993
OF
AMERICAN CAPITAL CORPORATION
AT A PRICE OF
$100 NET PER $1,000 PRINCIPAL AMOUNT OF NOTES,
UP TO 1,100,000 OUTSTANDING SHARES OF
$3.75 SERIES A PREFERRED STOCK
OF
AMERICAN CAPITAL CORPORATION
AT A PRICE OF
$0.50 NET PER PREFERRED SHARE,
AND
UP TO 1,950,000 OUTSTANDING SHARES OF COMMON STOCK
OF
TRANSCAPITAL FINANCIAL CORPORATION
AT A PRICE OF
$1.00 NET PER COMMON SHARE,
BY
ALLIANCE STANDARD II L.L.C.
AND
ALLIANCE STANDARD II CORP.
- ------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON FRIDAY, FEBRUARY 13, 1998, UNLESS THE OFFER IS
EXTENDED.
- ------------------------------------------------------------------------------
THE OFFER IS SUBJECT TO THE TERMS AND CONDITIONS CONTAINED IN THIS
OFFER TO PURCHASE. SEE SECTION 13. THE OFFER IS NOT CONDITIONED UPON THE RECEIPT
OF FINANCING OR ANY MINIMUM PRINCIPAL AMOUNT OF 8.40% SUBORDINATED NOTES DUE
1993 (THE "NOTES") OR ANY MINIMUM NUMBER OF SHARES OF $3.75 SERIES A PREFERRED
STOCK (THE "ACC PREFERRED SHARES") OF AMERICAN CAPITAL CORPORATION OR SHARES OF
COMMON STOCK OF TRANSCAPITAL FINANCIAL CORPORATION (THE "TFC COMMON SHARES" AND
TOGETHER WITH THE ACC PREFERRED SHARES THE "SHARES") BEING TENDERED.
1
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IMPORTANT
Any holder of Notes or Shares desiring to tender all or any portion of
such holder's Notes or Shares should either:
1. Complete and sign the Letter(s) of Transmittal (or a facsimile
thereof) relating to the Notes, ACC Preferred Shares and/or TFC Common Shares
tendered in accordance with the instructions in the Letter(s) of Transmittal,
have such holder's signature thereon guaranteed if required by Instruction 1 to
the Letter(s) of Transmittal, mail or deliver the Letter(s) of Transmittal (or
such facsimile), or, in the case of a book-entry transfer effected pursuant to
the procedure set forth in Section 2, an Agent's Message (as defined herein) and
any other required documents to the Depositary and either deliver such
definitive Notes or the certificates for such Shares to the Depositary along
with the Letter(s) of Transmittal (or facsimile) or deliver such Notes or Shares
pursuant to the procedure for book-entry transfer set forth in Section 2, or
2. Request such shareholder's broker, dealer, commercial bank, trust
company or other nominee to effect the transaction for such holder.
A holder having Notes or Shares registered in the name of a broker,
dealer, commercial bank, trust company or other nominee must contact such
broker, dealer, commercial bank, trust company or other nominee if such holder
desires to tender such Notes or Shares.
If a holder desires to tender Notes or Shares and (i) such holder's
definitive Notes or certificates for Shares are not immediately available, or
(ii) the procedure for book-entry transfer cannot be completed on a timely
basis, or (iii) time will not permit all required documents to reach the
Depositary prior to the Expiration Date, such holder's tender may be effected by
following the procedure for guaranteed delivery set forth in Section 2.
Questions and requests for assistance may be directed to MacKenzie
Partners, Inc., the Information Agent, at its address and telephone numbers set
forth on the back cover of this Offer to Purchase. Additional copies of this
Offer to Purchase, the Letters of Transmittal, the Notices of Guaranteed
Delivery and other related materials may be obtained from the Information Agent
or from brokers, dealers, commercial banks and trust companies.
The Information Agent for the Offer is:
MacKenzie
Partners, Inc.
(212)929-5500 (Call Collect)
or
Call Toll-Free (800)322-2885
January 12, 1998
2
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TABLE OF CONTENTS
INTRODUCTION..................................................................1
THE TENDER OFFER..............................................................3
SECTION 1. TERMS OF THE OFFER..............................................3
SECTION 2. PROCEDURES FOR TENDERING NOTES AND SHARES.......................5
SECTION 3. WITHDRAWAL RIGHTS..............................................10
SECTION 4. ACCEPTANCE FOR PAYMENT AND PAYMENT.............................11
SECTION 5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES........................13
SECTION 6. PRICE RANGE OF NOTES AND SHARES; INTEREST AND
DIVIDENDS ON THE NOTES AND SHARES............................14
SECTION 7. EFFECT OF THE OFFER ON THE MARKET FOR THE NOTES
AND THE SHARES; EXCHANGE ACT REGISTRATION;
MARGIN REGULATIONS...........................................18
SECTION 8. CERTAIN INFORMATION CONCERNING THE COMPANIES...................19
SECTION 9. CERTAIN INFORMATION CONCERNING THE PURCHASERS AND THE
FUNDS........................................................25
SECTION 10. SOURCE AND AMOUNT OF FUNDS.....................................27
SECTION 11. PURPOSE OF THE OFFER...........................................28
SECTION 12. DIVIDENDS AND DISTRIBUTIONS....................................28
SECTION 13. CERTAIN CONDITIONS OF THE OFFER................................30
SECTION 14. CERTAIN LEGAL MATTERS..........................................34
SECTION 15. FEES AND EXPENSES..............................................36
SECTION 16. MISCELLANEOUS..................................................37
SCHEDULE I DIRECTORS AND EXECUTIVE OFFICERS OF THE PURCHASERS............S-1
ANNEX A CERTAIN SELECTED CONSOLIDATED FINANCIAL INFORMATION
REGARDING AMERICAN CAPITAL CORPORATION, EXCERPTED FROM THE
ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER
31, 1994 AND THE QUARTERLY REPORT ON FORM 10-Q FOR THE FISCAL
QUARTER ENDED SEPTEMBER 30, 1995 OF AMERICAN CAPITAL
CORPORATION
ANNEX B CERTAIN SELECTED CONSOLIDATED FINANCIAL INFORMATION
REGARDING TRANSCAPITAL FINANCIAL CORPORATION EXCERPTED FROM
THE ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED
DECEMBER 31, 1994 AND THE QUARTERLY REPORT ON FORM 10-Q FOR
THE FISCAL QUARTER ENDED SEPTEMBER 30, 1995 OF TRANSCAPITAL
FINANCIAL CORPORATION
ANNEX C CERTAIN FINANCIAL INFORMATION REGARDING TRANSOHIO SAVINGS
BANK PREPARED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION
3
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To the Holders of Notes and Shares of Preferred
Stock of American Capital Corporation And Common
Stock of TransCapital Financial Corporation:
INTRODUCTION
Alliance Standard II L.L.C. ("Purchaser L.L.C."), a Delaware limited
liability company wholly owned by LJ Investments, L.L.C. ("Investments LLC"), a
Delaware limited liability company, and Alliance Standard II Corp. ("Purchaser
Corp.," and collectively with Purchaser LLC, the "Purchasers"), a British Virgin
Islands corporation wholly owned by LJ Investments Corp. ("Investments Corp."
and collectively with Investments LLC, the "Funds"), a British Virgin Islands
corporation, hereby offer to purchase:
(i) up to $30,000,000 principal amount of outstanding 8.40%
Subordinated Notes due 1993 (the "Notes") of American Capital
Corporation, a Florida corporation ("ACC"), at a price of $100
per $1,000 principal amount of Notes (including any accrued
interest thereon),
(ii) up to 1,100,000 outstanding shares of $3.75 Series A Preferred
Stock, $1.00 par value(the "ACC Preferred Shares") of ACC, at a
price of $0.50 per ACC Preferred Share, and
(iii) up to 1,950,000 outstanding shares of Common Stock, par value
$1.00 per share (the "TFC Common Shares" and together with the
ACC Preferred Shares, the "Shares") of TransCapital Financial
Corporation, a Delaware corporation ("TFC" and together with ACC,
the "Companies"), at a price of $1.00 per TFC Common Share,
net to the seller in cash, without interest thereon, upon the terms and
subject to the conditions set forth in this Offer to Purchase and in the three
related Letters of Transmittal (which, as amended from time to time,
collectively constitute the "Offer").
The Purchasers believe that the Shares are registered under Section
12(g) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
based upon its review of available filings made by the Companies with the
Securities and Exchange Commission (the "Commission"). The information
concerning the Companies contained in this Offer to Purchase has been taken from
or based upon publicly available documents on file with the Commission and other
publicly available information. Although the Purchasers do not have any
knowledge that any such information is untrue, the Purchasers take no
responsibility for the accuracy or completeness of such information or
1
<PAGE>
for any failure by either Company to disclose events that may have occurred and
may affect the significance or accuracy of any such information.
The Purchasers will pay soliciting dealer's fees of $2.00 per $1,000
principal amount of Notes, $0.05 per ACC Preferred Share and $0.10 per TFC
Common Share to brokers, dealers and other persons for soliciting tenders of
Notes and Shares from their clients pursuant to the Offer. In addition, brokers,
dealers, commercial banks and trust companies and other nominees will, upon
request, be reimbursed by the Purchasers for customary clerical and mailing
expenses incurred by them in forwarding offering materials to their clients.
Tendering holders will not be obligated to pay brokerage fees or commissions.
Except as set forth in Instruction 6 of the Letters of Transmittal, tendering
holders will not be obligated to pay transfer taxes on the purchase of Notes or
Shares pursuant to the Offer. The Purchasers will pay all charges and expenses
of IBJ Schroder Bank & Trust Company, as Depositary (the "Depositary"), and
MacKenzie Partners, Inc., as Information Agent (the "Information Agent"),
incurred in connection with the Offer. See Section 15.
The Purchasers' purpose in making the Offer is to make, through the
purchase of Notes and Shares, a speculative investment in any surplus or excess
funds remaining after the outcome of all litigation and satisfaction of all
liabilities of Transohio Savings Bank, a savings bank that was chartered under
the laws of the State of Ohio, and which was a wholly owned subsidiary of TFC
and TFC's principal asset ("Transohio"). Transohio was placed into receivership
by the Office of Thrift Supervision (the "OTS") on July 10, 1992. ACC holds
approximately 65% of the outstanding shares of TFC common stock. By tendering
Notes or Shares pursuant to the Offer, holders thereof will relinquish any and
all rights, as holders of those Notes or Shares tendered, to share in any such
surplus or excess funds, including any distributions from the Federal Deposit
Insurance Corporation (the "FDIC"). Transohio no longer operates an ongoing
business and, to Purchasers' best knowledge, Transohio no longer has a board of
directors or management. Holders of ACC Preferred Shares have certain rights,
including the right to elect two members of the ACC board of directors during
the continuance of a default in the payment of dividends on the ACC Preferred
Shares and the right to convert their ACC Preferred Shares into shares of ACC
common stock. However, ACC's Annual Report on Form 10-K for the fiscal year
ended December 31, 1994 (the "ACC 1994 Form 10-K") indicates that such
conversion right could be subject to certain impediments as set forth in Section
6, Price Range of Notes and Shares; Interest and Dividends on the Notes and
Shares, below. Notwithstanding such impediments, the Purchasers believe that, if
they were to acquire all of the ACC Preferred Shares that are the subject of the
Offer, such ACC Preferred Shares would be convertible into a majority of the ACC
common stock. The Purchasers reserve the right to convert any ACC Preferred
Shares accepted for payment and paid for hereunder and to vote ACC Preferred
Shares to elect the two directors that may be elected by the holders of the ACC
Preferred Shares, depending upon the number of ACC Preferred Shares tendered and
the intentions expressed by management of the Companies to continue the present
course of the Companies' conduct, although the
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Purchasers have no current plans so to convert or vote ACC Preferred Shares.
The Purchasers have no current plans or proposals that would result in an
extraordinary corporate transaction, such as a merger, reorganization or
liquidation involving either Company (other than the distribution of funds, if
any, received from the Action (as defined in Section 8 below) by the Companies
to the holders of the Notes and Shares in accordance with the charter documents
and other insruments defining the rights of such holders, and the applicable
rules of the FDIC with respect to priorities of distributions by receivers of
failed institutions, sale or transfer of any material amount of assets of
either Company, any change in the board of directors or management of either
Company, any change in the capitalization or dividend policy of either Company,
or any other change in either Company's corporate structure or business.
Certain federal income tax consequences of the sale of Notes or Shares
pursuant to the Offer are described in Section 5.
THE OFFER IS NOT CONDITIONED UPON THE RECEIPT OF FINANCING OR ANY
MINIMUM NUMBER OF NOTES OR SHARES BEING TENDERED.
Certain conditions to this Offer are described in Section 13. The
Purchasers expressly reserve the right, in their sole discretion, to waive any
one or more of the conditions to the Offer. See Sections 1, 13 and 14.
THIS OFFER TO PURCHASE AND THE LETTERS OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE
WITH RESPECT TO THE OFFER.
THE TENDER OFFER
1. TERMS OF THE OFFER
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 extension
or amendment), the Purchasers will accept for payment and pay for up to
$30,000,000 principal amount of Notes, up to 1,100,000 ACC Preferred Shares and
up to 1,950,000 TFC Common Shares, which are validly tendered and not withdrawn
prior to the Expiration Date and not theretofore withdrawn in accordance with
Section 3. The term "Expiration Date" means 12:00 Midnight, New York City time,
on Friday, February 13, 1998, unless and until the Purchasers, in their sole
discretion, shall have extended the period of time during which the Offer is
open, in which event the term "Expiration Date" shall mean the latest time and
date at which the Offer, as so extended by the Purchasers, will expire.
The Purchasers expressly reserve the right, in their sole
discretion, at any time or from time to time, regardless of whether or not any
of the events set forth in Section 13 shall have occurred or shall have been
determined by the Purchasers to have occurred, (i) to extend the period of time
during which the Offer is open and thereby delay acceptance for payment of, and
the payment for, any Notes or Shares, by giving oral or written notice of such
extension to the Depositary and (ii) to amend the Offer in any respect by giving
oral or written notice of such amendment to the Depositary. The rights reserved
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by the Purchasers in this paragraph are in addition to the Purchasers' rights
to terminate the Offer pursuant to Section 13. UNDER NO CIRCUMSTANCES WILL
INTEREST BE PAID ON THE PURCHASE PRICE FOR TENDERED NOTES OR SHARES, WHETHER
OR NOT THE PURCHASERS EXERCISE THEIR RIGHT TO EXTEND THE OFFER.
If by 12:00 Midnight, New York City time, on Friday, February 13, 1998
(or any date or time then set as the Expiration Date), any or all of the
conditions to the Offer have not been satisfied or waived, the Purchasers
reserve the right (but shall not be obligated), subject to the applicable rules
and regulations of the Commission, to (a) terminate the Offer and not accept for
payment or pay for any Notes or Shares and return all tendered Notes and Shares
to tendering holders, (b) waive all the unsatisfied conditions and accept for
payment and pay for all Notes and Shares validly tendered prior to the
Expiration Date and not theretofore withdrawn, up to the maximum amount of Notes
or Shares under the Offer, (c) extend the Offer and, subject to the right of
holders to withdraw Notes and Shares until the Expiration Date, retain the Notes
and Shares that have been tendered during the period or periods for which the
Offer is extended or (d) amend the Offer.
There can be no assurance that the Purchasers will exercise their
right to extend the Offer. Any extension, amendment or termination will be
followed as promptly as practicable by public announcement. In the case of an
extension, Rule 14e-1(d) under the Exchange Act requires that the announcement
be issued no later than 9:00 a.m., New York City time, on the next business day
after the previously scheduled Expiration Date in accordance with the public
announcement requirements of Rule 14d-4(c) under the Exchange Act. Subject to
applicable law (including Rules 14d-4(c) and 14d-6(d) under the Exchange Act,
which require that any material change in the information published, sent or
given to holders in connection with the Offer be promptly disseminated to
holders in a manner reasonably designed to inform holders of such change), and
without limiting the manner in which the Purchasers may choose to make any
public announcement, the Purchasers will not have any obligation to publish,
advertise or otherwise communicate any such public announcement other than by
making a release to the Dow Jones News Service. As used in this Offer to
Purchase, "business day" has the meaning set forth in Rule 14d-1 under the
Exchange Act.
If the Purchasers extend the Offer, or if the Purchasers (whether
before or after acceptance for payment of Notes or Shares) are delayed in their
acceptance for payment of or payment for Notes or Shares or are unable to pay
for Notes or Shares pursuant to the Offer for any reason, then, without
prejudice to the Purchasers' rights under the Offer, the Depositary may retain
tendered Notes or Shares on behalf of the Purchasers, and such Notes or Shares
may not be withdrawn except to the extent tendering holders are entitled to
withdrawal rights as described in Section 3. However, the ability of the
Purchasers to delay the payment for Notes or Shares which the Purchasers have
accepted for payment is limited by Rule 14e-l(c) under the Exchange Act, which
requires that a bidder pay the consideration offered or return the securities
deposited by
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or on behalf of holders of securities promptly after the termination or
withdrawal of the Offer.
If the Purchasers make a material change in the terms of the offer or
the information concerning the Offer or waive a material condition of the Offer,
the Purchasers will disseminate additional tender offer materials and extend the
Offer to the extent required by Rules 14d-4(c), 14d-6(d) and 14(e)-1 under the
Exchange Act. The minimum period during which the Offer must remain open
following material changes in the terms of the Offer or information concerning
the Offer, other than a change in price or a change in percentage of securities
sought, will depend upon the facts and circumstances then existing, including
the relative materiality of the terms or information. With respect to a change
in price or a change in percentage of securities sought, a minimum ten business
day period is generally required to allow for adequate dissemination to holders
and investor response. If, prior to the Expiration Date, the Purchasers should
decide to increase the price per $1,000 principal amount of Notes or per Share
being offered in the Offer, such increase will be applicable to all holders
whose Notes or Shares are accepted for payment pursuant to the Offer.
A request is being made to the Companies pursuant to Rule 14d-5 of the
Exchange Act for the use of the Companies' stockholder lists, noteholder lists
and security position listings for the purpose of disseminating the Offer to
holders of Notes and Shares. Upon the Companies' decision to provide such lists
or to mail this Offer to Purchase, the related Letters of Transmittal and other
relevant materials at the Purchasers' expense, this Offer to Purchase, the
related Letters of Transmittal and other relevant materials will be mailed to
record holders of Notes and Shares, and will be furnished to brokers, dealers,
banks, trust companies and similar persons whose names, or the names of whose
nominees, appear on the stockholder lists, or, if applicable, who are listed as
participants in a clearing agency's security position listing, for subsequent
transmittal to beneficial owners of Notes and Shares, by the Purchasers
following receipt of such lists or listings from the Companies, or by the
Companies if they so elect. However, there can be no assurance that the
Companies will respond to such request, and if the Companies fail to respond to
such request, the Purchasers may be unable so mail such materials directly to
such record holders.
2. PROCEDURES FOR TENDERING NOTES AND SHARES
Valid Tender. For a holder to validly tender Notes or Shares pursuant
to the Offer, either (A) a properly completed and duly executed Letter(s) of
Transmittal (or facsimile thereof) relating to the Notes, ACC Preferred Shares
and/or TFC Common Shares tendered, together with any required signature
guarantees, or, in the case of a book-entry transfer, an Agent's Message (as
defined below), and any other required documents, must be received by the
Depositary at one of its addresses set forth on the back cover of this Offer to
Purchase prior to the Expiration Date and either definitive Notes ("Definitive
Notes") or certificates for tendered Shares ("Share Certificates"), as the case
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may be, must be received by the Depositary at one of such addresses, or such
Notes or Shares must be delivered pursuant to the procedures for book-entry
transfer set forth below (and a Book-Entry Confirmation (as defined below)
received by the Depositary), in each case prior to the Expiration Date, or (B)
the tendering holder must comply with the guaranteed delivery procedures set
forth below.
Book-Entry Transfer. The Depositary will establish accounts with
respect to the Notes and the Shares at The Depository Trust Company (the
"Book-Entry Transfer Facility") for purposes of the Offer within two business
days after the date of this Offer to Purchase. Any financial institution that is
a participant in the Book-Entry Transfer Facility's systems may make book-entry
delivery of Notes or Shares by causing the Book-Entry Transfer Facility to
transfer such Notes or Shares into the Depositary's account in accordance with
the Book-Entry Transfer Facility's procedures for such transfer. However,
although delivery of Notes or Shares may be effected through book-entry transfer
into the Depositary's account at the Book-Entry Transfer Facility, the Letter(s)
of Transmittal (or facsimile thereof), properly completed and duly executed,
with any required signature guarantees, or an Agent's Message (as defined
below), and any other required documents, must, in any case, be transmitted to,
and received by, the Depositary at one of its addresses set forth on the back
cover of this Offer to Purchase prior to the Expiration Date, or the tendering
holder must comply with the guaranteed delivery procedures described below. The
confirmation of a book-entry transfer of Notes or Shares into the Depositary's
account at the Book-Entry Transfer Facility as described above is referred to
herein as a "Book-Entry Confirmation." DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY
TRANSFER FACILITY IN ACCORDANCE WITH THE BOOK-ENTRY TRANSFER FACILITY'S
PROCEDURES DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY. DELIVERY TO THE
DEPOSITARY IS ACCOMPLISHED ONLY WHEN ALL REQUIRED MATERIALS ARE RECEIVED BY THE
DEPOSITARY.
The term "Agent's Message" means a message transmitted by the
Book-Entry Transfer Facility to, and received by, the Depositary and forming a
part of a Book-Entry Confirmation, which states that the Book-Entry Transfer
Facility has received an express acknowledgment from the participant in the
Book-Entry Transfer Facility that such participant has received and agrees to be
bound by the terms of the Letter(s) of Transmittal and that the Purchasers may
enforce such agreement against such participant.
THE METHOD OF DELIVERY OF SHARE CERTIFICATES, THE LETTER(S) OF
TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE
BOOK-ENTRY TRANSFER FACILITY, IS AT THE ELECTION AND RISK OF THE TENDERING
HOLDER. DEFINITIVE NOTES, SHARE CERTIFICATES, THE LETTERS OF TRANSMITTAL AND ALL
OTHER REQUIRED DOCUMENTS WILL BE DEEMED DELIVERED ONLY WHEN ACTUALLY RECEIVED BY
THE DEPOSITARY (INCLUDING, IN THE CASE OF A BOOK-ENTRY TRANSFER, BY BOOK-ENTRY
CONFIRMATION). IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN
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RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT
TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
Signature Guarantees. No signature guarantee is required on a Letter
of Transmittal (a) if the Letter of Transmittal is signed by the registered
holder (which term, for purposes of this Section, includes any participant in
the Book-Entry Transfer Facilities' systems whose name appears on a security
position listing as the owner of the Notes or Shares) of Notes or Shares
tendered therewith and such registered holder has not completed either the box
entitled "Special Delivery Instructions" or the box entitled "Special Payment
Instructions" on the Letter of Transmittal or (b) if such Notes or Shares are
tendered for the account of a financial institution (including most commercial
banks, savings and loan associations and brokerage houses) that is a participant
in the Securities Transfer Agents Medallion Program, the New York Stock Exchange
Medallion Signature Guarantee Program or the Stock Exchange Medallion Program
(an "Eligible Institution"). In all other cases, all signatures on a Letter of
Transmittal must be guaranteed by an Eligible Institution. See Instructions 1
and 5 to the Letters of Transmittal. If Definitive Notes or Share Certificates
are registered in the name of a person other than the signer of a Letter of
Transmittal, or if payment is to be made or Definitive Notes or Share
Certificates for Shares not tendered or not accepted for payment are to be
returned to a person other than the registered holder of the Definitive Notes or
Share Certificates surrendered, the tendered Definitive Notes or Share
Certificates must be endorsed or accompanied by appropriate stock powers, in
either case signed exactly as the name or names of the registered holders appear
on the Definitive Notes or Share Certificates, with the signatures on the
Definitive Notes, Share Certificates or stock powers guaranteed as described
above. See Instructions 1 and 5 to the Letters of Transmittal.
Guaranteed Delivery. If a holder desires to tender Notes or Shares
pursuant to the Offer and such holder's Definitive Notes or Share Certificates
are not immediately available or the procedure for book-entry transfer cannot be
completed on a timely basis or time will not permit all required documents to
reach the Depositary prior to the Expiration Date, such holder's tender may be
effected if all the following conditions are met:
(i) the 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 the Purchasers, is received
by the Depositary, as provided below, prior to the Expiration Date; and
(iii) the Definitive Notes or Share Certificates representing all
tendered Shares, in proper form for transfer (or a Book-Entry Confirmation
with respect to all such Notes or Shares), together with a properly
completed and duly executed Letter(s) of Transmittal (or facsimile
thereof), with any required signature guarantees, or, in the case of a
book-entry transfer, an Agent's Message, and any other required documents
are received by the Depositary within three New York
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Stock Exchange trading days after the date of execution of such Notice
of Guaranteed Delivery.
A Notice of Guaranteed Delivery may be delivered by hand to the
Depositary or transmitted by telegram, facsimile transmission or mail to the
Depositary and must include a guarantee by an Eligible Institution in the form
set forth in such Notice of Guaranteed Delivery.
Notwithstanding any other provision hereof, payment for Notes or
Shares accepted for payment pursuant to the Offer will in all cases be made only
after timely receipt by the Depositary of (a) Definitive Notes or Share
Certificates for such Shares (or a timely Book-Entry Confirmation with respect
thereto), (b) Letter(s) of Transmittal (or facsimile thereof) relating to the
Notes or Shares tendered, properly completed and duly executed, with any
required signature guarantees, or, in the case of a book-entry transfer, an
Agent's Message, and (c) any other documents required by the Letters of
Transmittal. Accordingly, tendering holders may be paid at different times
depending upon when Definitive Notes, Share Certificates or Book-Entry
Confirmations with respect to Notes or Shares are actually received by the
Depositary. UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON THE PURCHASE PRICE
OF THE NOTES OR SHARES TO BE PAID BY THE PURCHASERS, REGARDLESS OF ANY EXTENSION
OF THE OFFER OR ANY DELAY IN MAKING SUCH PAYMENT.
The Purchasers' acceptance for payment of Notes or Shares validly
tendered pursuant to the Offer will constitute a binding agreement between the
tendering holder and the Purchasers upon the terms and subject to the conditions
of the Offer.
Appointment as Proxy. By executing a Letter of Transmittal as set
forth above, a tendering holder irrevocably appoints designees of the Purchasers
as such holder's attorneys-in-fact and proxies in the manner set forth in the
Letters of Transmittal, each with full power of substitution, to the full extent
of such holder's rights with respect to the Notes or Shares tendered by such
holder and accepted for payment by the Purchasers (and any and all other Notes
or Shares or other securities issued or issuable in respect of such Notes or
Shares). All such proxies will be irrevocable and considered coupled with an
interest in the tendered Notes or Shares. Such appointment will be effective
when, and only to the extent that, the Purchasers accept such Notes or Shares
for payment pursuant to the Offer. Upon such acceptance for payment, all prior
powers of attorney, proxies and consents given by such holder with respect to
such Notes or Shares or other securities will, without further action, be
revoked and no subsequent powers of attorney, proxies, consents or revocations
may be given (and, if given, will not be deemed effective). The designees of the
Purchasers will thereby be empowered to exercise all voting and other rights
with respect to such Notes or Shares and other securities in respect of any
annual, special, adjourned or postponed meeting of the issuing Company's
shareholders or noteholders, as the case may be, actions by written consent in
lieu of any such meeting or otherwise, as they in their sole discretion deem
proper. The Purchasers reserve the right
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to require that, in order for Notes or Shares to be deemed validly tendered,
immediately upon the Purchasers' acceptance for payment of such Notes or Shares,
the Purchasers must be able to exercise full voting, consent and other rights
with respect to such Notes or Shares and other securities or rights, including
voting at any meeting of noteholders or shareholders.
Determination of Validity. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance for payment of any tender
of Notes or Shares will be determined by the Purchasers, in their sole
discretion, whose determination will be final and binding on all parties. The
Purchasers reserve the absolute right to reject any or all tenders determined by
them not to be in proper form or the acceptance for payment of or payment for
which may, in the opinion of the Purchasers' counsel, be unlawful. The
Purchasers also reserve the absolute right to waive any defect or irregularity
in the tender of any Notes or Shares of any particular holder whether or not
similar defects or irregularities are waived in the case of other holders, as
determined by the Purchasers. No tender of Notes or Shares will be deemed to
have been validly made until all defects or irregularities relating thereto have
been cured or waived, as determined by the Purchasers. None of the Purchasers,
the Depositary, the Information Agent or any other person will be under any duty
to give notification of any defects or irregularities in tenders or incur any
liability for failure to give any such notification. The Purchasers'
interpretation of the terms and conditions of the Offer (including the Letters
of Transmittal and the instructions thereto) will be final and binding on all
parties.
Backup Withholding. In order to avoid "backup withholding" of federal
income tax on payments of cash pursuant to the Offer, a holder surrendering
Shares or Notes in the Offer must, unless an exemption applies, provide the
Depositary with such shareholder's correct taxpayer identification number
("TIN") on a Substitute Form W-9 and certify under penalties of perjury that
such TIN is correct and that such holder is not subject to backup withholding.
If a holder does not provide such holder's correct TIN or fails to provide the
certifications described above, the Internal Revenue Service (the "IRS") may
impose a penalty on such holder and the payment of cash to such holder pursuant
to the Offer may be subject to backup withholding of 31% of the amount of such
payment. All holders surrendering Notes or Shares pursuant to the Offer should
complete and sign the main signature form and the Substitute Form W-9 included
as part of the Letters of Transmittal to provide the information and
certification necessary to avoid backup withholding (unless an applicable
exemption exists and is proved in a manner satisfactory to the Purchasers and
the Depositary). Noncorporate foreign shareholders should complete and sign the
main signature form and a Form W-8, Certificate of Foreign Status, a copy of
which may be obtained from the Depositary, in order to avoid backup withholding.
See Instruction 10 to the Letters of Transmittal.
Lost Definitive Notes or Share Certificates. If the Definitive Notes
or Share Certificates which a registered holder wants to surrender have been
lost or destroyed, that fact should be indicated in the appropriate space on the
Letter of Transmittal. Certain
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representations and agreements contained in the Letter of Transmittal are
required to be made by tendering holders who have lost their Definitive Notes or
Share Certificates. In addition, the Information Agent or Depositary may forward
to such registered holders additional documentation necessary to be completed in
order to effectively surrender such lost or destroyed certificates. See
Instruction 11 to the Letters of Transmittal. All questions as to the validity,
form, eligibility (including time of receipt) and acceptance for payment of any
tender of Notes or Shares will be determined by the Purchasers, in their sole
discretion, whose determination will be final and binding on all parties.
3. WITHDRAWAL RIGHTS
Except as otherwise provided in this Section 3, tenders of Notes and
Shares pursuant to the Offer are irrevocable. Notes and Shares tendered pursuant
to the Offer may be withdrawn pursuant to the procedures set forth below at any
time prior to the Expiration Date and, unless theretofore accepted for payment
and paid for by the Purchasers pursuant to the Offer, may also be withdrawn at
any time after March 16, 1998 (or such later date as may apply in case the Offer
is extended).
For a withdrawal to be effective, a written, telegraphic or facsimile
transmission notice of withdrawal must be timely received by the Depositary at
one of its addresses set forth on the back cover of this Offer to Purchase and
must specify the name of the person having tendered the Notes or Shares to be
withdrawn, the principal amount of Notes or number of Shares to be withdrawn and
the name of the registered holder of the Notes or Shares to be withdrawn, if
different from the name of the person who tendered the Notes or Shares. If
Definitive Notes or Share Certificates have been delivered or otherwise
identified to the Depositary, then, prior to the physical release of such
Definitive Notes or Share Certificates, the serial numbers shown on such
Definitive Notes or Share Certificates must be submitted to the Depositary and,
unless such Notes or Shares have been tendered by an Eligible Institution, the
signatures on the notice of withdrawal must be guaranteed by an Eligible
Institution. If Notes or Shares have been delivered pursuant to the procedure
for book-entry transfer as set forth in Section 2, any notice of withdrawal must
also specify the name and number of the account at the Book-Entry Transfer
Facility to be credited with the withdrawn Notes or Shares and otherwise comply
with the Book-Entry Transfer Facility's procedures.
Withdrawals of tenders of Notes or Shares may not be rescinded, and
any Notes or Shares properly withdrawn will thereafter be deemed not validly
tendered for purposes of the Offer. However, withdrawn Notes or Shares may be
retendered by again following one of the procedures described in Section 2 at
any time prior to the Expiration Date.
All questions as to the form and validity (including time of receipt)
of notices of withdrawal will be determined by the Purchasers, in their sole
discretion, whose determination will be final and binding on all parties. None
of the Purchasers, the
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Depositary, the Information Agent or any other person will be under any duty to
give notification of any defects or irregularities in any notice of withdrawal
or incur any liability for failure to give any such notification.
4. ACCEPTANCE FOR PAYMENT AND PAYMENT
If more than $30,000,000 principal amount of Notes, 1,100,000 ACC
Preferred Shares or 1,950,000 TFC Common Shares are validly tendered on or prior
to the Expiration Date and not properly withdrawn on or prior to the Expiration
Date, the Purchasers will only accept for purchase, upon the terms and subject
to the conditions of the Offer, and pay for, an aggregate of $30,000,000
principal amount of Notes, 1,100,000 ACC Preferred Shares and 1,950,000 TFC
Common Shares so tendered, pro rata according to the principal amount of Notes
and the number of ACC Preferred Shares and TFC Common Shares validly tendered
and not properly withdrawn on or prior to the Expiration Date. If the principal
amount of Notes validly tendered and not properly withdrawn on or prior to the
Expiration Date is less than or equal to $30,000,000, the number of ACC
Preferred Shares validly tendered and not properly withdrawn on or prior to the
Expiration Date is less than or equal to 1,100,000 ACC Preferred Shares, or the
number of TFC Common Shares validly tendered and not properly withdrawn on or
prior to the Expiration Date is less than or equal to 1,950,000 TFC Common
Shares, the Purchasers will purchase all Notes or Shares so tendered and not
properly withdrawn, upon the terms and subject to the conditions of the Offer.
If proration of tendered Notes or Shares is required, and because of
the difficulty of determining the proration results, the Purchasers may not be
able to announce the final results of such proration until at least
approximately seven business days after the Expiration Date. Subject to the
Purchasers' obligation under Rule 14e-1(c) under the Exchange Act to pay holders
of Notes or Shares the Purchase Price in respect of Notes or Shares tendered or
return those Notes or Shares promptly after the termination or withdrawal of the
Offer, the Purchasers do not intend to pay for any Notes or Shares accepted for
payment pursuant to the Offer until the final proration results are known.
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), the Purchasers will accept for payment and will pay for
up to $30,000,000 principal amount of Notes, up to 1,100,000 ACC Preferred
Shares and up to 1,950,000 TFC Common Shares, validly tendered and not properly
withdrawn in accordance with Section 3 promptly after the Expiration Date. All
questions as to the satisfaction of such terms and conditions will be determined
by the Purchasers, in their sole discretion, whose determination will be final
and binding on all parties. See Sections 1 and 13. The Purchasers expressly
reserve the right, in their sole discretion, to delay acceptance for payment of
or payment for Notes or Shares in order to comply in whole or in part with any
applicable law. See Section 13. Any such delays will be effected in compliance
with Rule
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14e-1(c) under the Exchange Act (relating to a bidder's obligation to pay for or
return tendered securities promptly after the termination or withdrawal of such
bidder's offer).
In all cases, payment for Notes and Shares accepted for payment
pursuant to the Offer will be made only after timely receipt by the Depositary
of (a) Definitive Notes or Share Certificates for such Shares (or a timely
Book-Entry Confirmation with respect thereto), (b) the Letter(s) of Transmittal
(or facsimile thereof) relating to the Notes and Shares tendered, properly
completed and duly executed, with any required signature guarantees, or, in the
case of a book-entry transfer, an Agent's Message, and (c) any other documents
required by the Letters of Transmittal. The consideration per $1,000 principal
amount of Notes paid to any Noteholder pursuant to the Offer will be the highest
per Note consideration paid to any other holder pursuant to the Offer. The per
ACC Preferred Share consideration paid to any holder of ACC Preferred Shares
pursuant to the Offer will be the highest per ACC Preferred Share consideration
paid to any other holder of ACC Preferred Shares pursuant to the Offer. The per
TFC Common Share consideration paid to any holder of TFC Common Shares pursuant
to the Offer will be the highest per TFC Common Share consideration paid to any
other holder of TFC Common Shares pursuant to the Offer.
For purposes of the Offer, the Purchasers will be deemed to have
accepted for payment, and thereby purchased, up to $30,000,000 principal amount
of Notes, up to 1,100,000 ACC Preferred Shares and up to 1,950,000 TFC Common
Shares, validly tendered to the Purchasers and not withdrawn as, if and when the
Purchasers give oral or written notice to the Depositary of the Purchasers'
acceptance for payment of such Notes and Shares. Payment for Notes and Shares
accepted for payment pursuant to the Offer will be made by deposit of the
purchase price therefor with the Depositary, which will act as agent for validly
tendering holders for the purpose of receiving payment from the Purchasers and
transmitting payment to tendering holders. UNDER NO CIRCUMSTANCES WILL INTEREST
BE PAID ON THE PURCHASE PRICE OF THE NOTES AND SHARES TO BE PAID BY THE
PURCHASERS, REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY DELAY IN MAKING SUCH
PAYMENT. Upon the deposit of funds with the Depositary for the purpose of making
payments to tendering holders, the Purchasers' obligations to make such payment
shall be satisfied and tendering holders must thereafter look solely to the
Depositary for payment of amounts owed to them by reason of the acceptance for
payment of Notes or Shares pursuant to the Offer. The Purchasers will pay any
stock transfer taxes with respect to the transfer and sale to them or their
order pursuant to the Offer, except as otherwise provided in Instruction 6 of
the Letters of Transmittal, as well as any charges and expenses of the
Depositary and the Information Agent.
If the Purchasers are delayed in their acceptance for payment of or
payment for Notes or Shares or are unable to accept for payment or pay for Notes
or Shares pursuant to the Offer for any reason, then, without prejudice to the
Purchasers' rights under the Offer (but subject to compliance with Rule 14e-l(c)
under the Exchange Act), the
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Depositary may, nevertheless, on behalf of the Purchasers, retain tendered Notes
or Shares, and such Notes or Shares may not be withdrawn except to the extent
tendering shareholders are entitled to exercise, and duly exercise, withdrawal
rights as described in Section 3.
If any tendered Notes or Shares are not purchased pursuant to
the Offer for any reason, Definitive Notes or Share Certificates for any such
unpurchased Shares will be returned, without expense to the tendering holder
(or, in the case of Notes or Shares delivered by book-entry transfer of such
Notes or Shares into the Depositary's account at the Book-Entry Transfer
Facility pursuant to the procedure set forth in Section 2, such Notes or Shares
will be credited to an account maintained at the Book-Entry Transfer Facility),
as promptly as practicable after the expiration, termination or withdrawal of
the Offer. Notwithstanding the forgoing, in the event that a portion of the
Notes or Shares represented by a tendered Definitive Note or Share Certificate
has been tendered and a portion has not been tendered, or a portion has been
accepted for payment and a portion has not been accepted for payment, and
trustee for the Notes or, with respect to Shares, the issuing Company's transfer
agent cannot or will not reissue Definitive Notes or Share Certificates
representing any such Shares, the Purchasers will provide to the tendering
holder a certificate of beneficial interest in the Notes or Shares that were not
accepted for payment.
The Purchasers reserve the right to transfer or assign, in whole or
from time to time in part, to the Funds, or to one or more direct or indirect
wholly owned subsidiaries of the Funds, the right to purchase Notes or Shares
tendered pursuant to the Offer, but any such transfer or assignment will not
relieve the Purchasers of their obligations under the Offer and will in no way
prejudice the rights of tendering holders to receive payment for Notes or
Shares validly tendered and accepted for payment pursuant to the Offer.
5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The Purchasers believe that tenders of Notes and Shares pursuant to
the offer may result in capital losses for many holders. Capital losses may be
used to offset capital gains and the excess of capital losses over capital gains
may be offset by non-corporate taxpayers against ordinary income, subject to an
annual deduction limitation of $3,000 ($1,500 in the case of married individuals
filing separately).
The receipt of cash pursuant to the Offer will be a taxable
transaction for federal income tax purposes under the Internal Revenue Code of
1986, as amended (the "Code"), and may also be a taxable transaction under
applicable state, local or foreign income or other tax laws. Generally, for
federal income tax purposes, a tendering holder will recognize gain or loss
equal to the difference between the amount of cash received by the holder
pursuant to the Offer and the aggregate tax basis in the Notes or Shares
tendered by the holder and purchased pursuant to the Offer. If Notes or Shares
are held by a holder as capital assets (i.e., generally assets held for
investment), gain or loss
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recognized by the holder with respect to such Notes or Shares will generally be
capital gain or loss.
Capital gains recognized by a non-corporate holder will generally be
taxed at a maximum federal marginal tax rate of 20% if the holder's holding
period for the Notes or Shares exceeds 18 months and 28% if the holder's holding
period for the Notes or Shares exceeds 12 months but does not exceed 18 months.
Capital gains recognized by a corporate holder will be taxed at a maximum
federal marginal tax rate of 35%. Holders of Notes who purchased them after
original issuance, for an amount less than the principal amount of the Notes,
will be required to treat a portion of any gain as ordinary income pursuant to
the market discount provisions of the Code.
THE FOREGOING DISCUSSION IS INCLUDED FOR GENERAL INFORMATION ONLY AND
MAY NOT BE APPLICABLE WITH RESPECT TO NOTES OR SHARES RECEIVED PURSUANT TO THE
EXERCISE OF EMPLOYEE STOCK OPTIONS OR OTHERWISE AS COMPENSATION OR WITH RESPECT
TO HOLDERS OF NOTES OR SHARES WHO ARE SUBJECT TO SPECIAL TAX TREATMENT UNDER THE
CODE, SUCH AS NON-U.S. PERSONS, LIFE INSURANCE COMPANIES, TAX-EXEMPT
ORGANIZATIONS AND FINANCIAL INSTITUTIONS, AND MAY NOT APPLY TO A HOLDER OF NOTES
OR SHARES IN LIGHT OF INDIVIDUAL CIRCUMSTANCES. HOLDERS ARE URGED TO CONSULT
THEIR TAX ADVISERS TO DETERMINE THE PARTICULAR TAX CONSEQUENCES TO THEM
(INCLUDING THE APPLICATION AND EFFECT OF ANY STATE, LOCAL OR FOREIGN INCOME AND
OTHER TAX LAWS) OF THE OFFER.
6. PRICE RANGE OF NOTES AND SHARES; INTEREST
AND DIVIDENDS ON THE NOTES AND SHARES
Based on ACC's Quarterly Report on Form 10-Q for the fiscal quarter
ended September 30, 1995 (the "ACC September 1995 Form 10-Q"), the most recent
filing made by ACC with the Commission, as of September 30, 1995 there was
approximately $78.5 million principal amount of Notes outstanding and as of June
30, 1995, there were 2,092,997 ACC Preferred Shares outstanding. Based on TFC's
Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 1995
(the "TFC September 1995 Form 10-Q"), the most recent filing made by TFC with
the Commission, as of September 30, 1995 there were 9,806,324 TFC Common Shares
outstanding. Based on TFC's Annual Report on Form 10-K for the fiscal year ended
December 31, 1994 (the "TFC 1994 Form 10-K"), at December 31, 1992, there were
approximately 1,676 holders of record of TFC Common Shares.
Based on the TFC 1994 Form 10-K, until July 20, 1992, the TFC Common
Shares were listed on the New York Stock Exchange (the "NYSE"). On July 20, 1992
the TFC Common Shares were delisted from trading on the NYSE. The Purchasers
have been unable to locate any trading information with respect to the Notes.
Based upon information
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obtained from National Quotation Bureau, LLC (the "NQB"), the most recent trade
of ACC Preferred Shares (which is the only trade reported by the NQB), occurred
on November 14, 1991 at a price of $3 1/4 per share, as recorded in the Standard
and Poor's Daily Stock Price Record, American Stock Exchange Composite. Based
upon information obtained from the NQB, the high and low bid and ask prices for
the TFC Common Stock were as follows for the period ending on September 28,
1992, the last available date, as reported in the "Pink Sheets:"
Bid Prices Ask Prices
High Low High Low
July 29 through September 28, 1992 $0.01 $0.01 $0.10 $0.05
As of the date hereof, there is no established public trading market for the
Notes or the Shares.
The following description of the ACC Preferred Shares and the Notes is
excerpted from 1994 ACC Form 10-K:
"[ACC]'s Series A Preferred Stock [i.e., the ACC Preferred Shares]
provides for dividends payable in cash or common stock (valued at 80% of
its average closing sales price during a specified period), or a
combination thereof on a quarterly basis. On March 5, 1990, [ACC]'s
shareholders approved amendments to the Preferred Stock which provided for
a special dividend of 0.3 additional shares of Preferred Stock and 1.39
Warrants of a new class of Common Stock purchase warrants ("Class C
Warrants") for each outstanding share of Preferred Stock. As a result of
the special dividend, 482,997 shares of Series A Preferred Stock and
2,237,897 Class C Warrants were issued on March 23, 1990. As part of the
approved modifications, all dividends on the Preferred Stock payable
between March 15, 1990 and March 15, 1992 were eliminated.
"[ACC] has not made dividend payments aggregating $7.8 million per
year since 1992 on its Preferred Stock. The terms of the Preferred Stock
provide that if the full amount of accumulated dividends then due is not
(i) paid or (ii) declared and funds or shares of Common Stock sufficient to
pay such amount set aside for payment of dividends when due on a dividend
payment date (a "Dividend Default"), the holder of each share of Preferred
Stock shall be entitled to the right (a "Penalty Conversion Right"), on the
two business days following the thirtieth day after such dividend payment
date (each a "Penalty Conversion Date"), at the option of such holder, in
lieu of all dividends which have accrued but remain unpaid
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whether or not declared), and notwithstanding that such Dividend Default
may have been cured, to convert each share of Preferred Stock as to which
there is a Dividend Default into the number of shares of Common Stock
equal to a fraction, the numerator of which is the liquidation preference
of such share, plus all accrued and unpaid dividends on such share to the
Penalty Conversion Date, whether or not declared, and the denominator of
which is 75% of the lowest Closing Sale Price (as defined below) of the
Common Stock during the period beginning on the dividend payment date
immediately preceding the Penalty Conversion Date and ending five trading
days prior to the Penalty Conversion Date. The term "Closing Sale Price" is
defined for purposes of this provision as the closing sale price (or if no
such price is reported, the closing bid price) on such date as reported in
the composite transactions for the principal United States securities
exchange on which the Common Stock is traded or, if the Common Stock is not
listed on a United States national or regional stock exchange, as reported
by NASDAQ or the National Quotation Bureau Incorporated, then such price
shall be as determined by [ACC]'s Board of Directors in good faith, such
determination to be conclusive.
"However, the terms of the Preferred Stock also provide that if any of
certain circumstances shall then exist that makes delivery of Common Stock
by [ACC] in satisfaction of a Penalty Conversion Right unlawful or that
limits the tradeability or transferability of such Common Stock, then the
holders of the outstanding Preferred Stock, voting as a series, shall have
the exclusive right to vote for and to elect two directors of [ACC] (the
size of the Board being increased by such two directors), and the Penalty
Conversion Right with respect to the Preferred Stock shall not terminate at
the end of the two business days following the Penalty Conversion Date, but
shall remain exercisable at any time until and including the thirtieth
calendar day after the day on which no circumstances shall continue to
exist. The number of shares of Common Stock into which each share of
Preferred Stock shall be convertible upon the exercise of such an extended
Penalty Conversion Right shall be equal to a fraction, the numerator of
which is the liquidation preference of such share plus an amount equal to
all accrued and unpaid dividends thereon, whether or not declared, to the
date of the exercise of such extended Penalty Conversion Right, and the
denominator of which is 75% of the lowest Closing Sale Price (as defined)
of the Common Stock during the period beginning on the dividend payment
date with respect to which the Dividend Default giving rise to each
extended Penalty Conversion Right originally occurred and ending five
trading days prior to such date of exercise.
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"The terms of the Preferred Stock define the circumstances which would
give rise to an extension of the Penalty Conversion Rights (each a "Penalty
Conversion Right Extension") as follows:
"(a) the number of shares of Common Stock at the time authorized,
unissued and unreserved for all other purposes or held in [ACC]'s treasury
is insufficient to satisfy [ACC]'s obligations with respect to the
conversion of Series A Preferred Stock pursuant to any such Penalty
Conversion Right; (b) the issuance or delivery of shares of Common Stock in
satisfaction of any such Penalty Conversion Right would require
registration with or approval of any governmental authority under any law
or regulation, and such registration or approval has not been effected or
obtained; (c) the shares of Common Stock to be issued in satisfaction of
any such Penalty Conversion Right have not been authorized for listing,
upon official notice of issuance, on any United States national or regional
securities exchange on which such Common Stock is listed; (d) the Penalty
Conversion Price is less than the then par value of the Common Stock; (e)
the Common Stock would not be transferable without restriction by
unaffiliated holders of Series A Preferred Stock who would receive such
Common Stock upon exercise of any such Penalty Conversion Right.
"[ACC] believes that at least one Penalty Conversion Right Extending
Event currently exists. In particular, the Common Stock is no longer listed
on a United States national or regional securities exchange or traded in
the over-the-counter market, nor have the shares of Common Stock to be
issued in satisfaction of such Penalty Conversion Right been authorized for
listing upon official notice of issuance, on any United States national or
regional securities exchange. In addition, based on the most recent sales
data of which [ACC] is aware, [ACC] believes that the Penalty Conversion
Price would be less than the then current par value of the Common Stock and
that the number of shares of Common Stock authorized would be insufficient
to satisfy [ACC]'s obligations with respect to the conversion of the
Preferred Stock.
"Since for various reasons, including that any shares issued for less
than par value could subject persons to whom such shares are issued to
personal liability, it is unlikely that any shares would be issued for less
than their par value. Accordingly, based on a Penalty Conversion Price of
$.10 per share of Common Stock (the current par value of the Common Stock),
unless the par value of the Common Stock is changed, the outstanding
Preferred Stock could be convertible into an excess of 520,000,000 shares
of Common Stock (approximately 96% of the total pro forma number of
outstanding shares of Common Stock). At March 1, 1993, less than 80,000,000
shares of the Common Stock had been authorized and
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not otherwise issued (although a portion of such shares had been
previously reserved for issuance upon conversion of outstanding warrants of
[ACC]). Accordingly, unless additional action is taken by [ACC]'s Board of
Directors and its shareholders to increase the number of authorized shares
of Common Stock or change the par value of the Common Stock, it is unlikely
that circumstance will ever permit the holders of Preferred Stock to
exercise their Penalty Conversion Rights in full. At the current time it is
uncertain whether holders of the Preferred Stock would attempt to convert
their Preferred Stock and the results of any such attempts to convert are
uncertain. Due to the large number of shares of Common Stock that would be
issuable upon conversion, any such conversion would have a substantial
dilutive impact on the existing holders of [ACC]'s Common Stock and could
result in a loss of substantially all of the value of the Common Stock.
"[ACC]'s ability to pay dividends is restricted by the Indenture
between [ACC] and Sun Bank, N.A. as Trustee ("Indenture") relating to
[ACC]'s 8.40% Subordinated Notes due June 15, 1993 ("Subordinated Notes")
and by certain restrictions imposed on the payment of dividends by
Transohio. The Indenture limits the sum of all dividends (other than stock
dividends) on and purchases or redemptions of common stock of [ACC] to the
sum of (i) 50% of Consolidated Net Income (as defined in the Indenture),
(ii) the principal amount of debt (reduced by related debt discount and
deferred note expense) converted into or exchanged for stock, and (iii) the
net proceeds from the sale of capital stock, each subsequent to March 31,
1985. In addition, no dividends may be paid while [ACC] is in default with
respect to any interest or sinking fund payments."
7. EFFECT OF THE OFFER ON THE MARKET FOR THE NOTES AND THE
SHARES; EXCHANGE ACT REGISTRATION; MARGIN REGULATIONS
Market for the Notes and the Shares. Based on the ACC September 1995
Form 10-Q, as of September 30, 1995 there was approximately $78.5 million
principal amount of Notes outstanding and as of June 30, 1995, there were
2,092,997 ACC Preferred Shares outstanding. Based on the TFC September 1995 Form
10-Q, as of September 30, 1995 there were 9,806,324 TFC Common Shares
outstanding. The purchase of Notes and Shares pursuant to the Offer will reduce
the number of holders of Notes and Shares and the number of Notes and Shares
that might otherwise trade in the over-the-counter market, and could adversely
affect the liquidity and market value of the remaining Notes and Shares held by
the public.
Exchange Act Registration. The Purchasers believe that the Shares are
currently registered under the Exchange Act. Each class of Shares may be
eligible for
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deregistration either prior to or after the Offer depending upon certain
circumstances, including the number of record holders of the Shares at such
time. Registration of either class of Shares under the Exchange Act may be
terminated upon application of the issuer thereof to the Commission if such
class of Shares is neither listed on a national securities exchange nor held by
500 or more holders of record, where total assets of the issuer have not
exceeded $10 million on the last day of the issuer's three most recent fiscal
years. In order to be eligible to effect such termination, however, the issuer
must be current on its periodic reporting requirements under the Exchange Act.
The Purchasers believe that neither Company has filed reports under the Exchange
Act since the filing of the Companies' respective Quarterly Reports on Form 10-Q
for the quarter ended September 30, 1995, and that neither Company is therefore
current on such periodic reporting requirements.
Termination of registration of each of the ACC Preferred
Shares and the TFC Common Shares under the Exchange Act would substantially
reduce the information required to be furnished by each of ACC and TFC to its
shareholders and to the Commission. Termination would also make certain
provisions of the Exchange Act no longer applicable to such issuer, such as the
short-swing profit recovery provisions of Section 16(b) of the Exchange Act, the
requirement of furnishing a proxy statement pursuant to Section 14(a) of the
Exchange Act in connection with shareholders' meetings and the related
requirement of furnishing an annual report to shareholders and the requirements
of Rule 13e-3 under the Exchange Act with respect to "going private"
transactions. Furthermore, the ability of "affiliates" of such issuers and
persons holding "restricted securities" of such issuers to dispose of such
securities in compliance with Rule 144 or 144A promulgated under the Securities
Act of 1933, as amended, would be eliminated, although Rule 144 and Rule 144A
would appear to be currently unavailable to such affiliates because of the
absence of currently available information concerning either Company.
Margin Securities. The Purchasers believe that neither the ACC
Preferred Shares nor the TFC Common Shares constitute margin securities under
the regulations of the Board of Governors of the Federal Reserve System.
8. CERTAIN INFORMATION CONCERNING THE COMPANIES
The following information has been excerpted from the ACC 1994 Form
10-K, the most recent annual report on Form 10-K filed by ACC:
"[ACC] owns approximately 65.19% of the common shares of [TFC]. [TFC]
in turn owns 100% of the common stock of [Transohio]. After the close of
business on July 10, 1992, the [OTS] placed Transohio in receivership and
chartered a new federal mutual institution, Transohio Federal Savings Bank
("Transohio Federal"), to assume certain assets and liabilities of
Transohio. Transohio Federal will operate in conservatorship
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under the management of the Resolution Trust Corporation. [ACC] and
[TFC] do not expect any recovery of value from the Transohio shares.
"[ACC]'s basis in its [TFC] shares was charged off during the year
ended December 31, 1991, and therefore, there were no further charges to
operations as a result of the OTS action.
"[ACC] no longer has an active business.
"On July 20, 1990, [TFC], Transohio and [ACC] filed suit against the
OTS and the [FDIC] in the United States District Court for the District of
Columbia. The suit charges that these government agencies have breached a
contract entered into in 1986 by the Companies, the [Federal Savings & Loan
Insurance Corporation ("FSLIC")] and the Federal Home Loan Bank Board
("FHLBB"), the predecessors of the FDIC and OTS, respectively. In the
contract, the FSLIC and FHLBB agreed that the FSLIC capital contributions
and other supervisory goodwill pertaining to Transohio's acquisitions of
Citizens and Dollar would be treated as regulatory capital by Transohio.
The Companies allege that through its interpretation of [the Financial
Institutions Reform, Recovery and Enforcement Act of 1989 ("FIRREA")], the
OTS denied Transohio the inclusion of such supervisory goodwill in
regulatory capital as agreed and that this breach of contract constitutes
an unlawful seizure of its property without just compensation and without
due process of law, both in violation of the Fifth Amendment to the United
States Constitution. The OTS denies the claims, states that their posture
is consistent with congressional authorities and asserts that Transohio
would have been seized even if regulatory capital treatment was allowed. In
pursuing injunctive relief prior to its receivership, Transohio received
unfavorable rulings with respect to its claims. Other similarly situated
companies have had success in the Court of Claims and [ACC] intends to
pursue a filing in the Court of Claims. [ACC]'s litigation strategy is
impacted by limited funds available to pursue its claims. No estimate of
recovery from litigation can be made at this time."
The following information has been excerpted from the TFC 1994 Form
10-K, the most recent annual report on Form 10-K filed by TFC:
"[TFC] owns all of the common stock of [Transohio]. At December 31,
1994, approximately 65% of the outstanding shares of [TFC] were owned by
[ACC].
"After the close of business on July 10, 1992, the [OTS] placed
Transohio in receivership and chartered a new federal mutual institution,
Transohio Federal Savings Bank ("Transohio Federal"), to assume certain
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assets and liabilities of Transohio. Transohio Federal will operate in
conservatorship under the management of the Resolution Trust Corporation.
[TFC] does not expect any recovery of value from the Transohio shares.
"[TFC] no longer has an active business.
"On July 20, 1990, [TFC], Transohio and [ACC] ("Companies") filed suit
against the OTS and the Federal Deposit Insurance Corporation ("FDIC") in
the United States District Court for the District of Columbia. The suit
charges that these government agencies have breached a contract entered
into in 1986 by the Companies, the FSLIC and the Federal Home Loan Bank
Boards ("FHLBB"), the predecessors of the FDIC and OTS, respectively. In
the contract, the FSLIC and FHLBB agreed that the FSLIC capital
contributions and other supervisory goodwill pertaining to Transohio's
acquisitions of Citizens [Federal Savings and Loan Association of
Cleveland] and Dollar [Savings Bank of Columbus, Ohio] would be treated as
regulatory capital by Transohio. The Companies allege that through its
interpretation of FIRREA, the OTS denied Transohio the inclusion of such
supervisory goodwill in regulatory capital as agreed and that this breach
of contract constitutes an unlawful seizure of its property without just
compensation and without due process of law, both in violation of the Fifth
Amendment to the United States Constitution. The OTS denies the claims,
states that their posture is consistent with congressional authorities and
asserts that Transohio would have been seized even if regulatory capital
treatment was allowed. In pursuing injunctive relief prior to its
receivership, Transohio received unfavorable rulings with respect to its
claims. Other similarly situated companies have had success in the Court of
Claims and [TFC] intends to pursue in filing in the Court of Claims.
[TFC]'s litigation strategy is impacted by limited funds available to
pursue its claims. No estimate of recovery from litigation can be made at
this time."
While each of the Companies has filed quarterly reports on Form 10-Q
for the first three quarters of 1995, such quarterly reports do not provide
updated information with respect to the matters disclosed in the foregoing
excerpts.
Prior to its seizure by the OTS, Transohio had been an Ohio chartered
building and loan association since January 16, 1987; prior thereto, it was a
federally chartered savings bank formed in December, 1970. Transohio was a
member of the Federal Home Loan Bank ("FHLB") of Cincinnati, and its deposits
were insured by the Savings Association Insurance Fund ("SAIF") of the FDIC. As
of December 31, 1991 Transohio operated through 65 branch offices located in
Ohio, and had its headquarters in Cleveland.
p
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On August 8, 1995, ACC and TFC ("Plaintiffs") instituted a suit (the
"Action") against the United States of America ("Defendant") in the U.S. Court
of Federal Claims (the "Claims Court"). The complaint in the Action alleges that
in connection with certain government-assisted acquisitions by Plaintiffs in the
1980's, Defendant (through its agencies the FHLBB and FSLIC), in exchange for
the purchase of certain assets and assumption of certain liabilities of
Defendant by Transohio, agreed among other things to provide Transohio with more
than $107 million of capital credits and authorized Transohio to treat those
credits and supervisory goodwill as part of regulatory capital. The complaint
further alleges that in connection with the enactment of the Financial
Institutions Reform, Recovery and Enforcement Act of 1989 ("FIRREA"), Defendant
caused Transohio to write off such capital credits and supervisory goodwill.
Plaintiffs allege breach of contract by the United States, resulting in
substantial injury to Plaintiffs, effecting a taking of Plaintiff's property
without just compensation and unjustly enriching Defendant at the expense of
Plaintiffs. Plaintiffs seek compensation for the damages caused by the breach,
just compensation for the property taken, and disgorgement of the amounts by
which Defendant has been unjustly enriched. Plaintiffs' claims are separate and
distinct from the claims of Transohio. An agency of Defendant now serves as the
receiver for Transohio and is maintaining Transohio's claims against Defendant.
There are several similar cases pending before the Claims Court. No prediction
as to the outcome of Plaintiffs' case can be made at this time.
The case is one of several similar cases pending before the Claims
Court. The Action was stayed pending the outcome of certain other suits. On July
1, 1996, the U.S. Supreme Court held that the government was liable to certain
other plaintiff thrift holding companies in cases arising out of similar facts
patterns (the "Winstar Litigation"). Further information regarding the Winstar
Litigation is set forth below.
Since the termination of Resolution Trust Corporation in 1995, the
FDIC has acted as receiver for Transohio, and has been granted leave to
intervene in the litigation on behalf of Transohio in its capacity as receiver.
Plaintiffs and the FDIC filed a Second Amended Complaint on April 15, 1997. The
Purchasers believe that the FDIC has intervened in the Action principally to
recover any losses on account of the receivership of Transohio that were paid
out by the insurance fund. The Purchasers also believe that the FDIC will assert
that, under applicable FDIC regulations, the FDIC's claim will be senior to the
claims of TFC, as Transohio's sole stockholder. The Purchasers further believe
that it is not possible to predict how the Claims Court will resolve the FDIC's
claims, or the timing of any such resolution.
On December 22, 1997, the Claims Court ruled in favor of the
plaintiffs on the issue of liability in four cases involving financial
institutions other than Transohio. These four cases were selected as "Test
Cases" for the purposes of extending summary judgement from the Supreme Court's
decision in the Winstar Litigation. The Claims Court ordered that, in all
Winstar-related cases where there are pending summary judgment motions or
cross-motions filed by plaintiffs, the defendant must show cause, within 60
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days, why those motions should not be granted, and liability found on all
Winstar contract issues based upon its December 22, 1997 decision. The
government has vigorously defended its position as to both liability and
damages. No assurance as to an outcome of this process can be made.
Proceedings in the Action had been stayed pending a decision by the
Supreme Court of the United States in three cases involving claims by banks
against the United States for, among other things, breach of contract based upon
the elimination by FIRREA of the treatment of goodwill and capital credits
contemplated at the time the ailing thrifts were taken over by healthier thrifts
or other investors. On July 1, 1996, the Supreme Court decided an appeal in
three of these cases brought against the government (the "Winstar Cases"). The
plaintiffs were Winstar Corporation, Glendale Federal Bank FSB and The Statesman
Group, Inc. In the Winstar Cases, based upon their facts and circumstances and
based upon the documents relating to the plaintiffs' acquisitions of ailing
savings institutions, the Claims Court had granted summary judgment on the issue
of liability in favor of the plaintiffs. Thereafter a panel of the Court of
Appeals for the Federal Circuit (the "Federal Circuit") reversed the summary
judgments granted in favor of the plaintiffs and ruled against them.
Subsequently, the Federal Circuit, sitting en banc, reversed the panel's
decision and ruled in favor of the plaintiffs. The Government then sought a
further review in the Supreme Court. In its July 1996 decision, the Supreme
Court affirmed the judgments of liability in favor of the plaintiffs, holding
that, based upon the language of the applicable documents executed in connection
with plaintiffs' take-over of ailing thrifts, such plaintiffs have stated claims
for breach of contract against the government. Because the Claims Court had not
made any findings as to whether the plaintiffs had suffered damages and, if so,
in what amount, the Supreme Court remanded for further proceedings consistent
with its opinion. Since the Supreme Court's decision in July 1996, the Claims
Court has conducted evidentiary proceedings in which it took testimony and
reviewed documentary evidence on the measure and amount of damages regarding the
claim of Glendale Federal Bank FSB. The government has opposed Glendale's claim
for damages. Although in published reports the presiding judge made remarks
favorable to the plaintiffs prior to hearing evidence from the government, the
Court has not yet rendered a decision on the measure or the amount of damages to
which Glendale may be entitled. The Court has not yet begun to hear evidence
concerning damages to which any other plaintiffs may be entitled. Following any
decision on damages, it is anticipated that one or both parties may appeal to
the Federal Circuit. There can be no prediction whether the Claims Court will
make a damage award or when any such damage award will become final,
nonappealable and enforceable.
Although the plaintiffs in the Winstar Cases prevailed in the Supreme
Court and the plaintiffs in the four "Test Cases" prevailed in the Claims Court,
such decisions are not necessarily dispositive of the outcome of the Action. A
court may still determine that the Plaintiffs' claims involve sufficiently
different facts and/or legal issues as to render the Winstar Cases inapplicable
to the Action and thereby result in a different conclusion from that of the
Winstar Cases. Moreover, the damages portion of the claims presented by the
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Winstar plaintiffs remain to be litigated and could take several years to
resolve. The government has vigorously defended its position as to both
liability and damages.
Following any decision on liability with respect to the Action, it is
possible that one or both parties may seek to appeal to the Federal Circuit. It
is uncertain when any such judgment will become final, nonappealable and
enforceable. If the Claims Court rules in favor of the Plaintiffs on the issue
of liability and, assuming there are one or more appeals from that decision, if
the judgment of liability is upheld following any such appeals, it would
nevertheless be uncertain when the Claims Court would conduct proceedings on
damages and, following a decision, if any, on damages and any appeals from such
decision, when any such decision would become final. The measure and amount of
damages, if any, are uncertain.
In the ACC 1994 Form 10-K, ACC reported that it has not made interest
payments aggregating in excess of $23.3 million due in 1993, 1992, 1991 and 1990
on its approximately 78.5 million of Notes. ACC also reported that interest
accruals were discontinued upon maturity of the Notes, although the Purchasers
have found no basis for this discontinuance in the indenture governing the
Notes. The Purchasers believe that as of December 16, 1997, these notes remained
in default. ACC also reported that it has not made dividend payments aggregating
$7.8 million per year since 1992 on the ACC Preferred Shares.
ACC and TFC were named in a claim by the holder of a note issued by
Transohio, seeking recovery of investment losses. Press reports indicate that
the Companies agreed to a settlement requiring an immediate cash payment of
approximately $70,000 and a future payment of approximately $970,000 should TFC
receive any money as the result of its litigation against the government.
By tendering Notes or Shares pursuant to the Offer, holders will
relinquish any and all rights, as holders, to any benefits as holders or
derivative plaintiffs of the outcome of the Action, and any other benefits that
may have accrued or may hereafter accrue to holders from any other source.
Set forth in Annex A attached hereto is certain selected consolidated
financial information with respect to ACC excerpted from information contained
in the ACC 1994 Form 10-K and the ACC September 1995 Form 10-Q. Set forth in
Annex B attached hereto is certain selected consolidated financial information
with respect to TFC excerpted from information contained in the TFC 1994 Form
10-K and the TFC September 1995 Form 10-Q. More comprehensive financial
information is included in the ACC 1994 Form 10-K, the ACC September 1995 Form
10-Q, the TFC 1994 Form 10-K and the TFC September 1995 Form 10-Q, and the
selected consolidated financial information contained in such Annexes is
qualified in its entirety by reference to such documents and all the financial
information (including any related notes) contained therein. The ACC 1994 Form
10-K, the ACC September 1995 Form 10-Q, the TFC 1994 Form 10-K and the TFC
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September 1995 Form 10-Q should be available for inspection and copies thereof
should be obtainable in the manner set forth below under "Available
Information." Set forth in Annex C attached hereto is certain financial
information with respect to the estate of Transohio, which has been obtained
from the FDIC.
Available Information. Each Company is subject to the informational
requirements of the Exchange Act and, in accordance therewith, is required to
file reports relating to its business, financial condition and other matters.
Information as of particular dates concerning a Company's directors and
officers, their remuneration, stock options and other matters, the principal
holders of the Company's securities and any material interest of such persons in
transactions with the Company is required to be disclosed in proxy statements
distributed to the Company's shareholders and filed with the Commission. The
Purchasers believe that neither Company has filed reports under the Exchange Act
since the filing of the Companies' respective Quarterly Reports on Form 10-Q for
the quarter ended September 30, 1995, and that neither Company has filed a proxy
statement since 1991. Such reports, proxy statements and other information, may
be available for inspection at the public reference facilities of the Commission
at 450 Fifth Street, N.W., Washington, DC 20549, and at the regional offices of
the Commission located at Seven World Trade Center, 13th Floor, New York, NY
10048 and Citicorp Center, 500 West Madison Street (Suite 1400), Chicago, IL
60661. Copies of such information should be obtainable, by mail, upon payment of
the Commission's customary charges, by writing to the Commission's principal
office at 450 Fifth Street, N.W., Washington, DC 20549.
The information concerning the Companies contained in this Offer to
Purchase has been taken from or based upon publicly available documents on file
with the Commission and other publicly available information. Although the
Purchasers have no knowledge that any such information is untrue, the Purchasers
take no responsibility for the accuracy or completeness of such information or
for any failure by either Company to disclose events that may have occurred and
may affect the significance or accuracy of any such information.
9. CERTAIN INFORMATION CONCERNING THE PURCHASERS AND THE FUNDS
Purchaser LLC is newly organized and is wholly owned by Investment
LLC. Purchaser Corp. is newly organized and is wholly owned by Investment Corp.
Neither of the Purchasers has conducted any business other than in connection
with the Offer. The Funds were formed to engage in the buying and selling of
securities for investment for their own accounts. JL Advisors II, LLC, a
Delaware limited liability company ("Advisors"), is the sole managing member of
Investments LLC. JL Associates II, LLC, a Delaware limited liability company
("Associates"), is the investment manager of Investments Corp. Michael L.
Lewittes and Jaffe Capital Management Group, L.L.C., a Delaware limited
liability company controlled by Robert S. Jaffe, are the sole members and the
managers of Advisors and Associates. Messrs. Jaffe and Lewittes are U.S.
citizens. The principal
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executive offices of Messrs. Jaffe and Lewittes, Advisors, Associates,
Investments LLC and Purchaser LLC are located at 520 Madison Avenue, 7th Floor,
New York, New York 10022. The principal executive offices of Investments Corp.
and Purchaser Corp. are located at c/o International Fund Administration, Ltd.,
48 Par-la-Ville Road, Suite 464, Hamilton HM11, Bermuda.
Investments LLC and Investments Corp. have aggregate equity capital
contribution commitments of $17.25 million and have committed to fund sufficient
equity capital to the Purchasers to pay for the Notes and Shares to be purchased
hereunder, plus related fees and expenses. The Purchasers have agreed to
allocate between themselves the Notes and Shares purchased hereunder at the time
of acceptance of Notes and Shares for payment.
None of the Funds or the Purchasers, or, to the best knowledge of the
Funds or the Purchasers, any of the persons listed in Schedule I hereto, or any
associate or majority-owned subsidiary of such persons, beneficially owns any
equity security in the Companies, and none of the Funds, the Purchasers, or, to
the best knowledge of the Funds or the Purchasers, any of the other persons
referred to above, or any of the respective directors, executive officers or
subsidiaries of any of the foregoing, has effected any transaction in any equity
security of either of the Companies during the past 60 days.
Except as set forth in this Offer to Purchase, none of the Funds or
the Purchasers, or, to the best knowledge of the Funds and the Purchasers, any
of the persons listed in Schedule I hereto has any contract, arrangement,
understanding or relationship with any other person with respect to any
securities of either of the Companies, including, without limitation, any
contract, arrangement, understanding or relationship concerning the transfer or
the voting of any securities of the Companies, joint ventures, loan or option
arrangements, puts or calls, guaranties of loans, guaranties against loss or the
giving or withholding of proxies.
None of the Funds or the Purchasers, or, to the best knowledge of the
Funds and the Purchasers, any of the persons listed in Schedule I hereto has had
any transactions with either of the Companies, or any of their respective
executive officers, directors or affiliates that would require reporting under
the rules of the Commission.
To the best of the knowledge of the Purchasers and the Funds, there
have been no contacts, negotiations or transactions between the Funds or the
Purchasers, or their respective subsidiaries, or, to the best knowledge of the
Funds and the Purchasers, any of the persons listed in Schedule I hereto, on the
one hand, and the Companies or their respective executive officers, directors or
affiliates, on the other hand, concerning a merger, consolidation or
acquisition, tender offer or other acquisition of securities, election of
directors, or a sale or other transfer of a material amount of assets that would
require reporting under the rules of the Commission.
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The Purchasers have entered into an agreement (the "Filing Agreement")
pursuant to which the Purchasers have agreed to file the Schedule 14D-1 jointly
and concurrently issue this Offer to Purchase and make the Offer. The Filing
Agreement provides that the Purchasers will allocate between themselves at the
time of the acceptance for payment any Notes and Shares purchased pursuant to
the Offer. The Filing Agreement further provides that, at the time of payment
for Notes and Shares, due to the desire of Purchaser Corp. to hold any Notes and
Shares purchased by it solely for passive investment purposes, all collective
action by the Purchasers will cease, and each Purchaser will be permitted to
take any actions with respect to the Notes and Shares deemed necessary or
appropriate by such Purchaser.
JL Advisors, LLC ("JL Advisors"),an affiliate of Investments LLC, has
entered into a consulting agreement (the "Consulting Agreement") with
Collectible Certificates LLC, a Delaware limited liability company
("Collectible"), which provides that Collectible will consult with and advise JL
Advisors and any entities, including the Funds and the Purchasers, organized by
JL Advisors to acquire interests in existing or formerly existing entities,
including Transohio (each, an "Institution"), that have asserted either
directly, or derivatively, certain claims against the United States. Collectible
agreed to reimburse JL Advisors for the legal and other costs of organizing the
initial investment entity and those incurred in connection with the preparation
of the Consulting Agreement. The Consulting Agreement terminates on November 30,
1998, provided that the Consulting Agreement will continue so long as certain
investment vehicles retain any portion of any interest in an Institution. The
Consulting Agreement provides that through November 30, 1998, Collectible will
receive basic compensation at the rate of $100,000 per annum, payable monthly in
arrears. In addition to such Basic Compensation, Collectible will receive, as
additional compensation, 7 1/2% of the "Realized Net Profits" received with
respect to interests in Institutions, determined and paid as provided in the
Consulting Agreement. JL Advisors has agreed to provide to managing member of
Collectible, until November 30, 1998, without charge, an office within JL
Advisors's office space, computer access and telephone usage, as well as
reimbursement for travel and other out-of-pocket expenses previously approved by
such affiliate.
10. SOURCE AND AMOUNT OF FUNDS
The total amount of funds required by the Purchasers to purchase all
of the Notes and Shares pursuant to the Offer and to pay related fees and
expenses incurred in connection with the Offer is estimated at $800,000.
Investments LLC and Investments Corp. have aggregate equity capital contribution
commitments of $17.25 million and have committed to fund sufficient equity
capital to the Purchasers to pay for the Notes and Shares to be purchased
hereunder, plus related fees and expenses. The Purchasers have agreed to
allocate between themselves the Notes and Shares purchased hereunder at the time
of acceptance of Notes and Shares for payment.
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11. PURPOSE OF THE OFFER
The purpose of the Offer is to make, through the purchase of Notes and
Shares, a speculative investment in any surplus or excess funds remaining on
account of the interest of TFC in Transohio after the outcome of all litigation
and satisfaction of all liabilities of Transohio. By tendering Notes and Shares
pursuant to the Offer, holders will relinquish any rights, as holders, to any
benefits to either Company of the existence of any such surplus or excess funds.
Transohio no longer operates an ongoing business and, to Purchasers' knowledge,
it no longer has a board of directors or management. However, to the extent
information is available, the Purchasers intend to continuously evaluate the
Companies and their respective prospects, and the Purchasers reserve the right
to change their plans and intentions.
Holders of ACC Preferred Shares have certain rights, including the
right to elect two members of the ACC board of directors during the continuance
of a default in the payment of dividends on the ACC Preferred Shares and the
right to convert their ACC Preferred Shares into shares of ACC common stock.
However, the ACC 1994 Form 10-K indicates that such conversion right could be
subject to certain impediments as set forth in Section 6. Notwithstanding such
impediments, the Purchasers believe that, if they were to acquire all of the ACC
Preferred Shares that are the subject of the Offer, such ACC Preferred Shares
would be convertible into a majority of the ACC common stock. The Purchasers
reserve the right to convert any ACC Preferred Shares accepted for payment and
paid for hereunder and to vote ACC Preferred Shares to elect the two directors
that may be elected by the holders of the ACC Preferred Shares, depending upon
the number of ACC Preferred Shares tendered and the intentions expressed by
management of the Companies to continue the present course of the Companies'
conduct, although the Purchasers have no current plans so to convert or vote ACC
Preferred Shares. The Purchasers have no current plans or proposals that would
result in an extraordinary corporate transaction, such as a merger,
reorganization or liquidation involving either Company (other than the
distribution of funds, if any, received from the Action (as defined in Section
8) by the Companies to the holders of the Notes and Shares in accordance with
the charter documents and other instruments defining the rights of such holders,
and the applicable rules of the FDIC with respect to priorities of distributions
by receivers of failed institutions), sale or transfer of any material amount of
assets of either Company, any change in the board of directors or management of
either Company, any change in the capitalization or dividend policy of either
Company, or any other change in either Company's corporate structure or
business. However, to the extent information is available, the Purchasers intend
to continuously evaluate the Companies and their respective prospects, and the
Purchasers reserve the right to change their plans and intentions.
12. DIVIDENDS AND DISTRIBUTIONS
If, with effect after September 30, 1995, ACC should (a) split,
combine or otherwise change the ACC Preferred Shares or its capitalization from
that disclosed in the ACC September 1995 Form 10-Q, (b) acquire or otherwise
cause a reduction in the number of outstanding ACC Preferred Shares or other
securities or (c) issue or sell additional ACC Preferred Shares, shares of any
other class of capital stock, other voting securities or any securities
convertible into, or rights, warrants or options, conditional or
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otherwise, to acquire any of the foregoing, then, subject to the provisions of
Section 13 hereof, the Purchasers, in their sole discretion, may make such
adjustments as they deem appropriate in the offer price for the ACC Preferred
Shares and other terms of the Offer, including without limitation, the number or
type of securities offered to be purchased.
If, with effect after September 30, 1995, ACC should declare or pay
any cash dividend on the ACC Preferred Shares or other distribution on the ACC
Preferred Shares, or issue with respect to the ACC Preferred Shares any
additional ACC Preferred Shares, shares of any other class of capital stock,
other voting securities or any securities convertible into, or rights, warrants
or options, conditional or otherwise, to acquire, any of the foregoing, payable
or distributable to holders of record on a date prior to the transfer of the ACC
Preferred Shares purchased pursuant to the Offer to Purchase, or their nominees
or transferees on ACC's stock transfer records, then, subject to the provisions
of Section 13 hereof, (a) the offer price for the ACC Preferred Shares may, in
the sole discretion of the Purchasers, be reduced by the amount of any such cash
dividend or cash distribution and (b) the whole of any such noncash dividend,
distribution or issuance to be received by the tendering holders will (i) be
received and held by the tendering holders for the account of the Purchasers and
will be required to be promptly remitted and transferred by each tendering
holder to the Depositary for the account of the Purchasers, accompanied by
appropriate documentation of transfer, or (ii) at the direction of the
Purchasers, be exercised for the benefit of the Purchasers, in which case the
proceeds of such exercise will promptly be remitted to the Purchasers. Pending
such remittance and subject to applicable law, the Purchasers will be entitled
to all rights and privileges as owners of any such noncash dividend,
distribution, issuance or proceeds and may withhold the entire offer price or
deduct from the offer price the amount or value thereof, as determined by the
Purchasers in their sole discretion.
If, with effect after September 30, 1995, TFC should (a) split,
combine or otherwise change the TFC Common Shares or its capitalization from
that disclosed in the TFC September 1995 Form 10-Q, (b) acquire or otherwise
cause a reduction in the number of outstanding TFC Common Shares or other
securities or (c) issue or sell additional TFC Common Shares, shares of any
other class of capital stock, other voting securities or any securities
convertible into, or rights, warrants or options, conditional or otherwise, to
acquire any of the foregoing, then, subject to the provisions of Section 13
hereof, the Purchasers, in their sole discretion, may make such adjustments as
they deem appropriate in the offer price for the TFC Common Shares and other
terms of the Offer, including without limitation, the number or type of
securities offered to be purchased.
If, with effect after September 30, 1995, TFC should declare or pay
any cash dividend on the TFC Common Shares or other distribution on the TFC
Common Shares, or issue with respect to the TFC Common Shares any additional TFC
Common Shares, shares of any other class of capital stock, other voting
securities or any securities convertible into, or rights, warrants or options,
conditional or otherwise, to acquire, any of the foregoing, payable or
distributable to holders of record on a date prior to the transfer
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of the TFC Common Shares purchased pursuant to the Offer to Purchase, or their
nominees or transferees on TFC's stock transfer records, then, subject to the
provisions of Section 13 hereof, (a) the offer price for the TFC Common Shares
may, in the sole discretion of the Purchasers, be reduced by the amount of any
such cash dividend or cash distribution and (b) the whole of any such noncash
dividend, distribution or issuance to be received by the tendering holders will
(i) be received and held by the tendering holders for the account of the
Purchasers and will be required to be promptly remitted and transferred by each
tendering holder to the Depositary for the account of the Purchasers,
accompanied by appropriate documentation of transfer, or (ii) at the direction
of the Purchasers, be exercised for the benefit of the Purchasers, in which case
the proceeds of such exercise will promptly be remitted to the Purchasers.
Pending such remittance and subject to applicable law, the Purchasers will be
entitled to all rights and privileges as owners of any such noncash dividend,
distribution, issuance or proceeds and may withhold the entire Offer Price or
deduct from the offer price the amount or value thereof, as determined by the
Purchasers in their sole discretion.
13. CERTAIN CONDITIONS OF THE OFFER
Notwithstanding any other provisions of the Offer, and in addition to
(and not in limitation of) the Purchasers' rights to extend and amend the Offer
at any time in their sole discretion, the Purchasers shall not be required to
accept for payment or, subject to any applicable rules and regulations of the
Commission, including Rule 14e-l(c) under the Exchange Act (relating to a
bidder's obligation to pay for or return tendered securities promptly after
termination or withdrawal of such bidder's offer), pay for, and may delay the
acceptance for payment of or, subject to the restriction referred to above, the
payment for, any tendered Notes or Shares, or may terminate or amend the Offer
as to any Notes or Shares not then paid for, if any of the following events
shall have occurred or be deemed by Purchasers to have occurred:
a. there shall be threatened, instituted or pending any action,
proceeding, application or counterclaim by any government or governmental,
regulatory or administrative authority or agency, domestic, foreign or
supranational (each, a "Governmental Entity"), or by any other person,
domestic or foreign, before any court or Governmental Entity, (i) (A)
challenging or seeking to, or which is reasonably likely to, make illegal,
delay or otherwise directly or indirectly restrain or prohibit, or seeking
to, or which is reasonably likely to, impose voting, procedural, price or
other requirements, in addition to those required by Federal securities
laws (each as in effect on the date of this Offer to Purchase), in
connection with the making of the Offer, the acceptance for payment of, or
payment for, some of or all the Notes or Shares by Purchasers, the Funds or
any other affiliate of the Funds, (B) seeking to obtain material damages or
(C) otherwise directly or indirectly relating to the Offer, (ii) seeking to
prohibit the ownership by Purchasers, the Funds or any other affiliate of
the Funds of all or any portion of the Notes or Shares or of the business
or assets of Purchasers, the Funds or any other affiliate of the Funds or
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to compel Purchasers, the Funds or any other affiliate of the Funds to
dispose of or hold separate the Notes or Shares or all or any portion of
the business or assets of Purchasers, the Funds or any other affiliate of
the Funds or seeking to impose any limitation on the ability of Purchasers,
the Funds or any other affiliate of the Funds to conduct such business or
own such assets, (iii) seeking to impose or confirm limitations on the
ability of Purchasers, the Funds or any other affiliate of the Funds
effectively to exercise full rights of ownership of the Notes or Shares,
including, without limitation, the right to receive distributions from the
FDIC in respect of the Notes or Shares, (iv) seeking to require divestiture
by Purchasers, the Funds or any other affiliate of the Funds of any Notes
or Shares, (v) seeking any material diminution in the benefits expected to
be derived by Purchasers, the Funds or any other affiliate of the Funds as
a result of the Offer, or (vi) otherwise directly or indirectly relating to
the Offer or which otherwise, in the sole judgment of Purchasers, might
materially adversely affect either Company or Purchasers, the Funds or any
other affiliate of the Funds or the value of the Notes or Shares;
b. there shall be any action taken, or any statute, rule, regulation,
legislation, interpretation, judgment, order or injunction proposed,
enacted, enforced, promulgated, amended, issued, extant or deemed
applicable to (i) Purchasers, the Funds or any other affiliate of the Funds
or either Company, (ii) the Offer, (iii) the transfer or purported
assignment to the Purchasers of Notes or Shares purchased hereunder, by any
government, legislative body or court, or Governmental Entity, that, in the
sole judgment of the Purchasers, might, directly or indirectly, result in
any of the consequences referred to in clauses (i) through (vi) of
paragraph (a) above;
c. the Purchasers shall have learned of any change that has, since
September 30, 1995, occurred or been threatened (or any condition, event or
development shall have occurred or been threatened involving a prospective
change) in the business, properties, assets, liabilities, capitalization,
stockholders' equity, ownership or prospective ownership of debt or equity
securities of either Company (including, without limitation, disposition by
ACC of TFC Common Shares), condition (financial or otherwise), operations,
licenses or franchises, results of operations or prospects of either
Company that, in the sole judgment of the Purchasers, is or may be
materially adverse to either Company, or the Purchasers shall have become
aware of any facts that, in the sole judgment of the Purchasers, have or
may have material adverse significance with respect to either the value of
either Company or Transohio or the value of the Notes or Shares to the
Purchasers;
d. there shall have occurred or been threatened (i) any general
suspension of trading in, or limitation on prices for, securities on any
national securities exchange or in the over-the-counter market in the
United States, (ii) any extraordinary or material adverse change in the
financial markets or major stock
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exchange indices in the United States, (iii) any material change in
United States currency exchange rates or any other currency exchange rates
or a suspension of, or limitation on, the markets therefor, (iv) a
declaration of a banking moratorium or any suspension of payments in
respect of banks in the United States, (v) any limitation (whether or not
mandatory) by any government, domestic, foreign or supranational, or
Governmental Entity on, or other event that, in the sole judgment of the
Purchasers, might affect the extension of credit by banks or other lending
institutions, (vi) a commencement of a war or armed hostilities or other
national or international calamity directly or indirectly involving the
United States or (vii) in the case of any of the foregoing existing at the
time of the commencement of the Offer, a material acceleration or worsening
thereof;
e. there shall have occurred any decision, action, development, event
or other circumstance in the Action or in any legal proceeding based upon
similar factual or legal allegations, including, without limitation, any
action seeking damages against the United States of America in connection
with "supervisory goodwill" accounting for financial institutions, which in
the sole judgment of the Purchasers could have an adverse effect on the
Notes or Shares or the Purchasers' eventual recovery with respect thereto,
or the FDIC shall have issued receiver's certificates or other similar
documents to any holder of any claim with respect to Transohio, including
TFC;
f. a tender or exchange offer for any Notes or Shares shall have been
made or proposed to be made by any other person or entity) other than
tender offers disclosed on Schedule 14D-1 on file with the Commission prior
to January 1, 1998;
g. any approval, permit, authorization or consent of any Governmental
Entity (including those described or referred to in this Section 13 or
Section 14 hereof) shall not have been obtained on terms satisfactory to
the Purchasers in their discretion;
h. the Requisite Board Approvals shall not have been obtained;
"Requisite Board Approvals" shall be deemed to have been obtained if all of
the following events shall have occurred:
(i) the board of directors of ACC shall have given unconditional
approval within the meaning of Florida Statutes ss.607.0902(2)(d)(7),
unlimited as to time, to the Purchasers' acquisitions of ACC Preferred
Shares in one or more transactions in any aggregate amount up to and
including a majority or more of the outstanding ACC Preferred Shares
and such approval shall be in full force and effect on the date on
which the Purchasers shall have accepted ACC Shares for payment under
the Offer, with the result that such acquisitions by the Purchasers
of ACC Preferred Shares shall not constitute
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"control-share acquisitions" within the meaning of Florida
Statutes ss.607.0902(2);
(ii) the board of directors of ACC shall have given unconditional
approval within the meaning of Florida Statutes ss.607.0902(2)(d)(7),
unlimited as to time, to the Purchasers' acquisitions of shares of
common stock of ACC ("ACC Common Shares") upon the conversion of ACC
Preferred Shares in one or more transactions ("Acquisitions by
Conversion") in any aggregate amount up to and including a majority or
more of the outstanding ACC Common Shares, and such approval shall be
in full force and effect on the date on which the Purchasers shall
have accepted ACC Preferred Shares for payment under the Offer, with
the result that Acquisitions by Conversion shall not constitute
"control-share acquisitions" within the meaning of Florida Statutes
ss.607.0902(2);
(iii) the board of directors of TFC shall have given
unconditional approval within the meaning of Florida Statutes
ss.607.0902(2)(d)(7), unlimited as to time, to the Purchasers'
acquisition of ACC Preferred Shares in one or more transactions in any
aggregate amount up to and including a majority or more of the
outstanding ACC Preferred Shares, and such approval shall be in full
force and effect on the date on which the Purchasers shall have
accepted ACC Preferred Shares for payment under the Offer, with the
result that such acquisitions by the Purchasers of ACC Preferred
Shares shall not constitute "control-share acquisitions" within the
meaning of Florida Statutes ss.607.0902(2); and
(iv) the board of directors of TFC shall have given unconditional
approval within the meaning of Florida Statutes ss.607.0902(2)(d)(7),
unlimited as to time, to the Acquisitions by Conversion in any
aggregate amount up to and including a majority or more of the
outstanding ACC Common Shares, and such approval shall be in full
force and effect on the date on which the Purchasers shall have
accepted ACC Preferred Shares for payment under the Offer, with the
result that Acquisitions by Conversion shall not constitute
"control-share acquisitions" within the meaning of Florida Statutes
ss.607.0902(2);
i. the Purchasers shall have concluded, in their sole judgment, that
the acquisition of TFC Common Shares by the Purchasers pursuant to this
Offer may constitute a "control-share acquisition" within the meaning of
that term as defined in Florida Statutes ss.607.0902(2);
j. the Purchasers shall have concluded, in their sole judgment, that
ACC and/or TFC may be a "subject company" within the meaning of Ohio
Statutes ss.1707.01(Y); and
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k. the Purchasers shall have concluded, in their sole judgment, that
any statute, rule of law, covenant, order or provision of any charter
document or by-law of any entity may apply which may have the effect of
prohibiting, limiting or otherwise impeding in any way, or imposing any
conditions on, the ability of the Purchasers or any of their direct or
indirect transferees of any ACC Preferred Shares, ACC Common Shares or TFC
Common Shares at any time held by the Purchasers to consummate any business
combination transaction (including any merger or consolidation, purchase or
sale of assets, tender or exchange offer, purchase or sale of securities,
or distribution upon securities) or to exercise any voting rights in
respect of such ACC Preferred Shares, ACC Common Shares or TFC Common
Shares;
which, in the sole judgment of the Purchasers in any such case, and regardless
of the circumstances (including any action or inaction by the Purchasers, the
Funds or any other affiliate of the Funds) giving rise to any such condition,
makes it inadvisable to proceed with the Offer or with such acceptance for
payment or payment.
The foregoing conditions are for the sole benefit of the Purchasers
and may be asserted by the Purchasers regardless of the circumstances giving
rise to any such condition or may be waived by the Purchasers in whole or in
part at any time and from time to time in their discretion. The failure or
refusal by the Purchasers at any time to exercise any of the foregoing rights
will not be deemed a waiver of any such right, the waiver of any such right with
respect to particular facts and circumstances will not be deemed a waiver with
respect to any other facts and circumstances and each such right will be deemed
an ongoing right that may be asserted at any time and from time to time. Any
determination by the Purchasers concerning the events described in this Section
13 will be final and binding upon all parties. The Purchasers have reserved the
right to make independent determinations with respect to all matters requiring
their determinations in connection with the above conditions.
14. CERTAIN LEGAL MATTERS
General. Except as otherwise disclosed herein, based on a review of
publicly available information filed by the Companies with the Commission, the
Purchasers are not aware of (i) any license or regulatory permit that appears to
be material to the business of either Company and any subsidiaries thereof,
taken as a whole, that might be adversely affected by the acquisition of Notes
or Shares by the Purchasers pursuant to the Offer or (ii) any approval or other
action, by any governmental, administrative or regulatory agency or authority,
domestic, foreign or supranational, that would be required for the acquisition
or ownership of Notes or Shares by the Purchasers as contemplated herein. Should
any such approval or other action be required or desirable, the Purchasers
currently contemplate that such approval or action would be sought, except as
described below under "State Takeover Laws." While the Purchasers do not
currently intend to delay
34
<PAGE>
the acceptance for payment of Notes or Shares tendered pursuant to the Offer
pending the outcome of any such matter, there can be no assurance that any such
approval or action, if needed, would be obtained or would be obtained without
substantial conditions or that adverse consequences might not result to the
business of either Company, the Purchasers or the Funds or that certain parts of
the businesses of either Company, the Purchasers or the Funds might not have to
be disposed of in the event that such approvals were not obtained or any other
actions were not taken. The Purchasers' obligations under the Offer to accept
for payment and pay for Notes and Shares is subject to certain conditions. See
Section 13.
State Takeover Laws. A number of states throughout the United States
have enacted takeover statutes that purport, in varying degrees, to be
applicable to attempts to acquire securities of corporations that are
incorporated or have assets, stockholders, executive offices or places of
business in such states. In Edgar v. MITE Corp., the Supreme Court of the United
States held that the Illinois Business Takeover Act, which involved state
securities laws that made the takeover of certain corporations more difficult,
imposed a substantial burden on interstate commerce and therefore was
unconstitutional. In ITS Corp. v. Dynamics Corp. of America, however, the
Supreme Court of the United States held that a state may, as a matter of
corporate law and, in particular, those laws concerning corporate governance,
constitutionally disqualify a potential acquiror from voting on the affairs of a
target corporation without prior approval of the remaining stockholders,
provided that such laws were applicable only under certain conditions.
Subsequently, a number of federal courts ruled that various state takeover
statutes were unconstitutional insofar as they apply to corporations
incorporated outside the state of enactment.
The Purchasers have not filed any information, registration or similar
statements under any state takeover statutes in connection with the Offer. The
Purchasers believe that Florida Statutes Section 607.0902 (the "Control-Share
Acquisitions Statute") may be applicable to the Offer and/or to the Purchasers'
ownership of the Shares after acceptance for payment thereof. The Purchasers
intend to seek the approval of the boards of directors of the Companies to the
extent necessary to satisfy certain provisions of the Florida Control-Share
Acquisitions Statute. See Section 13. Accordingly, the Offer is conditioned upon
approval of the boards of directors of the Companies under the Control-Share
Acquisition Statute. The Purchasers nevertheless reserve the right to challenge
the validity or applicability of any state law allegedly applicable to the
Offer, and nothing in this Offer to Purchase nor any action taken or omitted to
be taken in connection herewith is intended as a waiver of that right. If any
state takeover statute is found to be applicable to the Offer, the Purchasers
might be unable to accept for payment or pay for the Notes or Shares tendered
pursuant to the Offer or be delayed in continuing or consummating the Offer. In
such case, the Purchasers may not be obligated to accept for payment or pay for
any Notes or Shares tendered. The conditions (including conditions with respect
to state takeover statutes) set forth in Section 13 are subject to waiver by the
Purchasers in their sole judgment.
Antitrust. Purchasers believe that the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "HSR Act") is inapplicable to the
Offer in light of the size of the Companies and of the Offer. If the provisions
of the HSR Act were
35
<PAGE>
applicable to the Offer, the acquisition of Shares under the Offer could be
consummated only following the expiration of a 15-calendar day waiting period
following the filing by the Purchasers of a Notification and Report Form with
respect to the Offer, unless the Purchasers received a request for additional
information or documentary material from the Antitrust Division or the FTC or
early termination of the waiting period is granted. If, within the initial
15-day waiting period, either the Antitrust Division of the U.S. Department of
Justice (the "Antitrust Division") or the Federal Trade Commission (the "FTC")
were to request additional information or material from the Purchasers
concerning the Offer, the waiting period would be extended and would expire at
11:59 p.m., New York City time, on the tenth calendar day after the date of
substantial compliance by the Purchasers with such request. Only one extension
of the waiting period pursuant to a request for additional information is
authorized by the HSR Act. Thereafter, such waiting period may be extended only
by court order or with the consent of the Purchasers. In practice, complying
with a request for additional information or material can take a significant
amount of time. In addition, if the Antitrust Division or the FTC raises
substantive issues in connection with a proposed transaction, the parties
frequently engage in negotiations with the relevant governmental agency
concerning possible means of addressing those issues and may agree to delay
consummation of the transaction while such negotiations continue.
The Antitrust Division and the FTC frequently scrutinize the legality
under the antitrust laws of transactions. At any time before or after
Purchasers' acquisition of the Shares pursuant to the Offer, the Antitrust
Division or the FTC could take such action under the antitrust laws as it deems
necessary or desirable in the public interest, including seeking to enjoin the
purchase of the Shares pursuant to the Offer or seeking the divestiture of the
Shares acquired by the Purchasers. Private parties may also bring legal actions
under the antitrust laws under certain circumstances. There can be no assurance
that a challenge to the Offer on antitrust grounds will not be made or, if such
a challenge is made, of the result thereof.
15. FEES AND EXPENSES
MacKenzie Partners, Inc. (the "Information Agent") has been retained
by the Purchasers as information agent in connection with the Offer. The
Information Agent may contact holders of Notes and Shares by mail, telephone,
facsimile and personal interview and may request brokers, dealers and other
nominee shareholders to forward material relating to the Offer to beneficial
owners of Notes and Shares. The Purchasers will pay the Information Agent
reasonable and customary compensation for all such services and will reimburse
the Information Agent for reasonable out-of-pocket expenses in connection
therewith. The Purchasers have agreed to indemnify the Information Agent against
certain liabilities and expenses in connection with the Offer, including,
without limitation, certain liabilities under the federal securities laws.
IBJ Schroder Bank & Trust Company (the "Depositary") has been retained
as the Depositary. The Purchasers will pay the Depositary reasonable and
customary
36
<PAGE>
compensation for its services in connection with the Offer, will reimburse the
Depositary for its reasonable out-of-pocket expenses in connection therewith and
will indemnify the Depositary against certain liabilities and expenses in
connection therewith, including, without limitation, certain liabilities under
the federal securities laws.
The Purchasers will pay soliciting dealers' fees of $2.00 per $1,000
principal amount of Notes, $0.05 per ACC Preferred Share and $0.10 per TFC
Common Share to brokers, dealers and other persons for soliciting tenders of
Notes and Shares of their clients pursuant to the Offer. In addition, brokers,
dealers, commercial banks and trust companies and other nominees will, upon
request, be reimbursed by the Purchasers for customary clerical and mailing
expenses incurred by them in forwarding offering materials to their clients.
16. MISCELLANEOUS
The Offer is not being made to (nor will tenders be accepted from or
on behalf of) holders of Notes or Shares in any jurisdiction in which the making
of the Offer or the acceptance thereof would not be in compliance with the
securities, blue-sky or other laws of such jurisdiction. The Purchasers are not
aware of any jurisdiction in which the making of the Offer or the acceptance
thereof would not be in compliance with the laws of such jurisdiction. If the
Purchasers become aware of any jurisdiction where the making of the Offer or the
tender of Notes or Shares is not in compliance with any applicable law, the
Purchasers will make a good faith effort to comply with such law. If, after such
good faith effort, the Purchasers cannot comply with such law, the Offer will
not be made to (nor will tenders be accepted from or on behalf of) the holders
of Notes or Shares residing in such jurisdiction. To the extent the Purchasers
become aware of any state law that would limit the class of offerees in the
Offer, the Purchasers will amend the Offer and, depending on the timing of such
amendment, if any, will extend the Offer to provide adequate dissemination of
such information to such holders of Notes or Shares prior to the expiration of
the Offer. In any jurisdiction the securities, blue sky or other laws of which
require the Offer to be made by a licensed broker or dealer, the Offer shall be
deemed to be made on behalf of the Purchasers by one or more registered brokers
or dealers licensed under the laws of such jurisdiction.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION ON BEHALF OF THE PURCHASERS NOT CONTAINED HEREIN OR IN THE
LETTERS OF TRANSMITTAL AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED.
THE PURCHASERS HAVE FILED WITH THE COMMISSION A TENDER OFFER STATEMENT
ON SCHEDULE 14D-1 (THE ("SCHEDULE 14D-1") PURSUANT TO RULE 14D-3 UNDER THE
EXCHANGE ACT, TOGETHER WITH EXHIBITS, FURNISHING CERTAIN ADDITIONAL INFORMATION
WITH RESPECT TO THE OFFER,
37
<PAGE>
AND MAY FILE AMENDMENTS THERETO. SUCH SCHEDULE 14D-1 AND ANY AMENDMENTS THERETO,
INCLUDING EXHIBITS, MAY BE INSPECTED AND COPIES MAY BE OBTAINED IN THE MANNER
SET FORTH IN SECTION 8 WITH RESPECT TO THE COMPANY (EXCEPT THAT SUCH MATERIAL
WILL NOT BE AVAILABLE AT THE REGIONAL OFFICES OF THE COMMISSION).
January 12, 1998
38
<PAGE>
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS
OF THE FUNDS AND THE PURCHASERS
The Funds. Purchaser LLC is newly organized and is wholly owned by
Investment LLC. Purchaser Corp. is also newly organized and is wholly owned by
Investment Corp. Neither of the Purchasers has conducted any business other than
in connection with the Offer. The Funds were formed to engage in the buying and
selling of securities for investment for their own accounts. JL Advisors II,
LLC, a Delaware limited liability company ("Advisors"), is the sole managing
member of Investments LLC. JL Associates II, LLC, a Delaware limited liability
company ("Associates"), is the investment manager of Investments Corp. Michael
L. Lewittes and Jaffe Capital Management Group, LLC, a Delaware limited
liability company controlled by Robert S. Jaffe, are the sole members and the
managers of Advisors and Associates. Messrs. Jaffe and Lewittes are U.S.
citizens. The principal executive offices of Messrs. Jaffe and Lewittes,
Advisors, Associates, Investments LLC and Purchaser LLC are located at 520
Madison Avenue, 7th Floor, New York, New York 10022. The principal executive
offices of Investments Corp. and Purchaser Corp. are located at c/o
International Fund Administration, Ltd., 48 Par-la-Ville Road, Suite 464,
Hamilton HM11, Bermuda.
Set forth below are the name and present principal occupation or
employment, and material occupations, positions, offices or employments for the
past five years of each member of each of Advisors and Associates. The business
address of each such person is 520 Madison Avenue, New York, New York 10022 and,
each such person is a United States citizen. In addition, except as otherwise
noted, each director and executive officer of the Funds have been employed in
his or her present principal occupation listed below during the last five years.
PRINCIPAL OCCUPATION OR EMPLOYMENT,
NAME 5-YEAR EMPLOYMENT HISTORY
---- -----------------------------------
Robert S. Jaffe July 1992-June 1993 Steinhardt Partners, L.P.
July 1993-December 1996 SAC Capital Management, Inc.
January 1996-Present Managing Member of Jaffe Capital
Management Group, LLC, an
affiliate of JL Advisors, L.L.C.
Michael L. Lewittes July 1992-June 1993 Salomon Brothers Inc
July 1993-December 1996 SAC Capital Management, Inc.
January 1996-Present Managing Member of JL Advisors,
L.L.C.
<PAGE>
ANNEX A
CERTAIN SELECTED CONSOLIDATED FINANCIAL INFORMATION
REGARDING
AMERICAN CAPITAL CORPORATION
-------------
EXCERPTED FROM
THE ANNUAL REPORT ON FORM 10-K
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1994
AND
THE QUARTERLY REPORT ON FORM 10-Q FOR THE FISCAL
QUARTER ENDED SEPTEMBER 30, 1995
OF
AMERICAN CAPITAL CORPORATION
A-1
<PAGE>
PART 1. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
American Capital Corporation
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(dollars in thousands)
Unaudited
<TABLE>
<CAPTION>
September 30, 1995 December 31, 1994
------------------ -----------------
<S> <C> <C>
Assets
Cash and short term investments $ 106 $ 47
-------------- ---------------
Total Assets $ 106 $ 47
============== ===============
Liabilities and Shareholders' Equity (Deficit)
Liabilities:
Notes payable, net $ 78,740 $ 78,740
Accrued interest 23,380 23,380
Accounts payable and other liabilities 80 104
-------------- -------------
Total Liabilities $ 102,200 $ 102,224
Shareholders' Equity (Deficit):
Preferred stock, $1.00 par value; authorized
10,000,000 shares at June 30, 1995 and
December 31, 1994; issued and outstanding
2,092,997 at June 30, 1995 and December 31,
1994; $25 liquidation preference, convertible
commencing in 1995 52,325 52,325
Common stock, $.10 par value, authorized
100,000,000 shares at June 30, 1995 and
December 31, 1994; issued and outstanding
21,948,148 at June 30, 1995 and December 31,
1994 2,195 2,195
Capital in excess of par value 70,995 70,995
Accumulated deficit (227,609) (227,692)
------------ --------------
Total Shareholders' Equity (Deficit)
(102,094) (102,177)
Commitments and contingencies - -
-------------- --------------
$ 106 $ 47
============== ==============
Total Liabilities and Shareholders' Equity
(Deficit)
</TABLE>
See accompanying notes to consolidated financial statements.
672465.2 1
<PAGE>
American Capital Corporation
CONSOLIDATED STATEMENTS OF OPERATIONS
(dollars in thousands, except per share data)
Unaudited
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------------------------- ----------------------------------------
1995 1994 1995 1994
------------------- ------------------ ---------------- ------------------
<S> <C> <C> <C> <C>
Revenues:
Other 100 3 147 3
Expenses:
Salaries and employee benefits - - - -
Premise and occupancy costs - - - -
Interest expense - - - -
Other 43 - 64 -
--------------- --------------- -------------- ---------------
43 - 64 -
--------------- --------------- -------------- ---------------
Net Income (loss) $ 57 $ 3 $ 83 3
--------------- --------------- -------------- ---------------
Per share data:
Net loss per common share $ - $ - $ - $ -
--------------- --------------- --------------- ----------------
Weighted average number of 21,948,148 21,103,988 21,948,148 21,103,988
--------------- --------------- ----------- ----------------
shares outstanding
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
American Capital Corporation
CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in thousands)
Unaudited
<TABLE>
<CAPTION>
Nine Months Ended September 30,
----------------------------------------------------
1995 1994
----------------------- -----------------------
<S> <C> <C>
Operating Activities:
Net income (loss) $ 83 $ 3
Adjustments to reconcile net loss to net cash
provided (used) by operating activities:
Change in accounts payable and other liabilities ( 24) ( 1)
---------------- -----------------
Net cash provided (used) by operating activities 59 2
---------------- -----------------
Financing Activities:
Payments on notes payable - -
---------------- -----------------
Net cash provided (used) by financing activities - -
---------------- -----------------
Net increase (decrease) in cash and cash equivalents 59 2
Cash and cash equivalents at beginning of period 47 3
---------------- -----------------
Cash and cash equivalents at end of period $ 106 $ 5
================ =================
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest on borrowings $ - $ -
---------------- -----------------
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
American Capital Corporation and Subsidiaries
NOTES TO CONDENSED FINANCIAL STATEMENTS
NOTE 1 - THE COMPANY
American Capital Corporation ("American Capital" or "the Company") is
a savings and loan holding company which owns approximately 65.19% of the common
shares of TransCapital Financial Corporation ("TransCapital"). TransCapital in
turn owns 100% of the common stock of Transohio Savings Bank ("Transohio").
After the close of business on July 10, 1992, the Office of Thrift
Supervision ("OTS") placed Transohio in receivership and chartered a new federal
mutual institution, Transohio Federal Savings Bank ("Transohio Federal"), to
assume certain assets and liabilities of Transohio. Transohio Federal will
operate in conservatorship under the management of the Resolution Trust
Corporation ("RTC"). The Company and TransCapital do not expect any recovery of
value from the Transohio shares.
The Company no longer has an active business.
On July 20, 1990, TransCapital, Transohio and American Capital
Corporation ("Companies") filed suite against the Office of Thrift Supervision
("OTS") and the Federal Deposit Insurance Corporation ("FDIC") in the United
States District Court for the District of Columbia. The suit charges that these
government agencies have breached a contract entered into in 1986 by the
Companies, the FSLIC and the Federal Home Loan Bank Board ("FHLBB"), the
predecessors of the FDIC and OTS, respectively. In the contract, the FSLIC and
FHLBB agreed that the FSLIC capital contributions and other supervisory goodwill
pertaining to Transohio's acquisitions of Citizens and Dollar would be treated
as regulatory capital by Transohio. The Companies allege that through its
interpretation of FIRREA, the OTS denied Transohio the inclusion of such
supervisory goodwill in regulatory capital as agreed and that this breach of
contract constitutes an unlawful seizure of its property without just
compensation and without due process of law, both in violation of the Fifth
Amendment to the United States Constitution. The OTS denies the claims, states
that their posture is consistent with congressional authorities and asserts that
Transohio would have been seized even if regulatory capital treatment was
allowed. In pursuing injunctive relief prior to its receivership, Transohio
received unfavorable rulings with respect to its claims. Other similarly
situated Companies have had success in the Court of Claims and the Company has
filed a claim in the Court of Claims. The Company's litigation strategy is
impacted by limited funds available to pursue its claims. No estimate of
recovery from litigation can be made at this time.
The Company has been named in a claim by a Transohio noteholder group
seeking recovery of investment losses. No estimate of exposure can be made at
this time.
American Capital has severe liquidity problems. The Company requires
funds to service approximately $102 million of liabilities owed by the Company,
and to pay its general and administrative expenses.
The Company cannot continue as a going concern with its existing
composition. The consolidated financial statements reflect certain adjustments
relating to recovery of reported assets; however, American Capital is unable to
determine whether other adjustments may be necessary due to the Company's
financial condition. In addition, there is no assurance that additional claims
will not be asserted against the Company.
NOTE 2 - BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions for Form
<PAGE>
10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of
the information and footnotes required by generally accepted accounting
principles for complete financial statements. However, in the opinion of
Management, such data reflects all adjustments necessary to present fairly the
operations for such periods. For further information, refer to the consolidated
financial statements and footnotes thereto included in the Company's annual
report on Form 10-K for the year ended December 31, 1994.
<PAGE>
Item 6. Selected Financial Data
Financial Highlights (dollars in thousands, except per share data)
<TABLE>
<CAPTION>
December 31,
-------------------------------------------------------------------------------------------
1994 1993 1992 1991 1990
------------- -------------- ------------ -------------- ---------------
<S> <C> <C> <C> <C> <C>
For the Year Ended:
Revenues $ 86 $ 737 $ 252 $ 119 $ 12,108
Adjustment of TransCapital
subsidiary (held for sale) to
current value - - - 79,491 2,192
Net earnings (loss) 48 ( 5,577) ( 12,736) (106,676) ( 51,659)
Net earnings (loss) to common
stockholders 48 ( 5,577) ( 12,736) (106,676) ( 63,734)
Net loss per share - ( .26) ( .61) ( 5.14) ( 3.10)
At Year End:
Assets $ 47 $ 3 $ 1,451 $ 2,768 $ 100,076
Shareholders' equity (deficit) (102,177) (102,226) ( 96,649) ( 83,912) 22,764
Shareholders' equity (deficit) ( 7.32) ( 7.32) ( 7.06) ( 6.57) ( 1.42)
per common share (a)
</TABLE>
(a) Adjusted for liquidation value of preferred stock.
<PAGE>
ANNEX B
CERTAIN SELECTED CONSOLIDATED FINANCIAL INFORMATION
REGARDING
TRANSCAPITAL FINANCIAL CORPORATION
-------------
EXCERPTED FROM
THE ANNUAL REPORT ON FORM 10-K
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1994
AND
THE QUARTERLY REPORT ON FORM 10-Q FOR THE FISCAL
QUARTER ENDED SEPTEMBER 30, 1995
OF
TRANSCAPITAL FINANCIAL CORPORATION
B-1
<PAGE>
1994 COPYRIGHT SEC ONLINE, INC., 1, *2
PART II
ITEM 6. SELECTED FINANCIAL DATA
Financial Highlights (dollars in thousands, except per share data)
<TABLE>
<CAPTION>
December 31,
1994 1993 1992 1991 1990
---- ---- ------------ ---- ----
<S> <C> <C> <C> <C> <C>
For the Year Ended:
Revenues $ 59 $ 87 $ 35 $ 45 $ 316
Net earnings (loss) 4 (16) (3,906) (124,003) (45,075)
Net earnings (loss)
Per common share
At Year End: - - (.40) (12.93) (4.73)
Assets $ 25 $ 28 $ 3 $ 3,474 $127,280
Shareholders' equity (deficit) (270) (274) (393) 3,186 127,000
Shareholders' equity (.03) (.03) (.04) .33 13.32
(deficit) per common share
</TABLE>
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
TransCapital Financial Corporation
CONDENSED STATEMENTS OF FINANCIAL CONDITION
(dollars in thousands)
Unaudited
<TABLE>
<CAPTION>
September 30, 1995 December 31, 1994
------------------ -----------------
Assets
<S> <C> <C>
Cash and demand deposits 8 $ 25
---------- --------------
Total Assets 8 $ 25
---------- --------------
Liabilities and Shareholders' Equity (Deficit)
Liabilities:
Accounts payable and other liabilities $ 293 $ 295
Shareholders' Equity (Deficit):
Common stock, $1 par value; 30,000,000 shares
authorized, 9,806,324 shares issued and
outstanding 9,806 9,806
Paid-in capital 88,288 88,288
Accumulated deficit ( 98,379) (98,364)
--------- --------------
Total Shareholders' Equity (Deficit) ( 285) 270)
--------- --------------
Total Liabilities and Shareholders' Equity (Deficit) $ 8 $ 25
========= ==============
</TABLE>
See accompanying notes to condensed financial statements.
672465.2 1/11/98 6:02p
<PAGE>
TransCapital Financial Corporation
CONDENSED STATEMENTS OF OPERATIONS
(dollars in thousands, except per share data)
Unaudited
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------------------ --------------------------------------
1995 1994 1995 1994
--------------- --------------- --------------- ------------------
<S> <C> <C> <C> <C>
Revenues:
Other $ - $ 3 $ - $ 43
------------ ------------ ------------ ------------
Expenses
Salaries and employee benefits - - - -
Other 2 7 15 45
------------ ------------- ----------- ------------
2 7 15 45
------------ ------------- ----------- ------------
Net income (loss) $ ( 2) $ ( 4) $ ( 15) $ ( 2)
------------ ------------- ------------ --------------
Per share data:
Net income (loss) per common
share $ - $ - $ - $ -
------------ -------------- -------------- --------------
Weighted average number of 9,806,324 9,806,324 9,806,324 9,806,324
============ ============== ============== ==============
shares outstanding
</TABLE>
See accompanying notes to condensed financial statements.
672465.2 1/11/98 6:02p
<PAGE>
TransCapital Financial Corporation
CONDENSED STATEMENTS OF CASH FLOWS
(dollars in thousands)
Unaudited
<TABLE>
<CAPTION>
Nine Months Ended September 30,
--------------------------------------
1995 1994
----------------- -----------------
<S> <C> <C>
Operating Activities:
Net earnings (loss) $ ( 15) $ ( 2)
Adjustments to reconcile net earnings (loss) to net cash
provided (used) by operating activities:
Net change in other assets and accounts payable and
other liabilities ( 2) ( 7)
-------------- --------------
Net cash provided (used) by operating activities ( 17) ( 9)
-------------- --------------
Net increase (decrease) in cash and cash equivalents ( 17) ( 9)
Cash and cash equivalents at beginning of period 25 28
-------------- -------------
Cash and cash equivalents at end of period $ 8 $ 19
============== =============
</TABLE>
See accompanying notes to condensed financial statements.
<PAGE>
TransCapital Financial Corporation
NOTES TO CONDENSED FINANCIAL STATEMENTS
NOTE 1 - THE COMPANY
TransCapital Financial Corporation ("TransCapital" or "the Company"),
a Delaware Corporation, owns all of the outstanding common stock of Transohio
Savings Bank ("Transohio"), which comprised substantially all of its assets.
After the close of business on July 10, 1992, the Office of Thrift
Supervision ("OTS") placed Transohio Savings Bank in receivership and chartered
a new federal mutual institution, Transohio Federal Savings Bank ("Transohio
Federal"), to assume certain assets and liabilities of Transohio. Transohio
Federal will operate in conservatorship under the management of the Resolution
Trust Corporation ("RTC"). The Company does not expect any recovery of value
from the Transohio shares.
TransCapital no longer has an active business. However, the Company
plans to monitor opportunities for pursuing its claims against the OTS within
its funding constraints which are highly restrictive.
On July 20, 1990, TransCapital, Transohio and American Capital
Corporation ("Companies") filed suit against the Office of Thrift Supervision
("OTS") and the Federal Deposit Insurance Corporation ("FDIC") in the United
States District Court for the District of Columbia. The suit charges that these
government agencies have breached a contract entered into in 1986 by the
Companies, the FSLIC and the Federal Home Loan Bank Board ("FHLBB"), the
predecessors of the FDIC and OTS, respectively. In the contract, the FSLIC and
FHLBB agreed that the FSLIC capital contributions and other supervisory goodwill
pertaining to Transohio's acquisitions of Citizens and Dollar would be treated
as regulatory capital by Transohio. The Companies allege that through its
interpretation of FIRREA, the OTS denied Transohio the inclusion of such
supervisory goodwill in regulatory capital as agreed and that this breach of
contract constitutes an unlawful seizure of its property without just
compensation and without due process of law, both in violation of the Fifth
Amendment to the United States Constitution. The OTS denies the claims, states
that their posture is consistent with congressional authorities and asserts that
Transohio would have been seized even if regulatory capital treatment was
allowed. In pursuing injunctive relief prior to its receivership, Transohio
received unfavorable rulings with respect to its claims. Other similarly
situated companies have had success in the Court of Claims and the Company has
filed a claim in the Court of Claims. The Company's litigation strategy is
impacted by limited funds available to pursue its claims. No estimate of
recovery from litigation can be made at this time.
The Company has been named in a claim by a Transohio noteholder group
seeking recovery of investment losses. No estimate of exposure can be made at
this time.
The Company cannot continue as a going concern with its existing
composition. The financial statements reflect certain adjustments relating to
recovery of reported assets; however, the Company is unable to determine whether
other adjustments may be necessary due to the Company's financial condition. In
addition, there is no assurance that additional claims will not be asserted
against the Company.
The accompanying unaudited condensed financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions for Form 10-Q and Rule10-01 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. However, in the opinion of management, such data reflects
all adjustments necessary to present fairly the operations for such periods. For
further information, refer to the consolidated financial statements and
footnotes thereto included in the Company's annual report on Form 10-K for the
year ended December 31, 1994.
672465.2 1/11/98 6:02p
<PAGE>
ANNEX C
CERTAIN FINANCIAL INFORMATION
REGARDING
TRANSOHIO SAVINGS BANK
-------------
PREPARED
BY
THE FEDERAL DEPOSIT INSURANCE CORPORATION
C-1
<PAGE>
TRANSOHIO, FSB, IN LIQUIDATION
Statement of Assets and Liabilities in Liquidation (Unaudited)
(Rounded in Dollars)
<TABLE>
<CAPTION>
Financial Institution Number: 1303 For Period Ending November 30, 1997
Inception Date: 09/15/1994
Current Balance Inception Balance
<S> <C> <C> <C> <C>
Assets
Cash/Investments 4,548,157
Receivables 6,145,930
Assets in Liquidation
Consumer Loans 0 11,159
Commercial Loans 0 234,700
Securities 2,221,407 54,873,556
Real Estate Mortgages 910,079 185,573,834
Owned Assets 511,941 12,589,173
Other Assets/Judgments 1,035,940 887,851,703
Net Investments in Subsidiaries 359,352 10,963,156
Subtotal Assets in Liquidation 5,038,719 1,152,097,281
Advances 0
Less Estimated Loss On Assets (Note 2) 5,617,473
Total Assets $10,115,333 $1,152,097,281
Liabilities (Note 4)
Accounts/Notes Payable 2,610,733
Suspense/Escrow Accounts 726,753
FDIC Billings and Borrowings 75,602
Total Operating Liabilities 3,413,087
Depositor/Credit Claims
Pending Claims (2,389,782) 1,239,716,344
Approved Claims (133,176)
FDIC Subrogated Claims 49,933,216
Estimated Interest on Claims (Note 5) 0
Total Claims 40,410,258 1,239,716,344
Other Liabilities
Estimated Loss Sharing Expenses 0
Estimated Litigation - Probable (Note 6) 0
Contracts and Other Liabilities 4,823,767
Total Other Liabilities 4,823,767
Subordinated Claims
Cross Guaranty 0
Total Subordinated Claims 0
Total Liabilities $48,647,112 $1,239,716,344
Net Assets/(Deficit)
At Inception (87,619,063) (87,619,063)
Non-Cash Adjustments (Note 7) 3,076,190
Previous (Paid)/Received 131,698,513
Income (Loss) of the Liquidation) (85,687,419)
Total Net Assets/(Deficit) ($38,531,779) ($87,619,063)
Estimated additional litigation considered
reasonably possible: (Note 6) $0
The Accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
Statement of Operation (Unaudited)
(Rounded in Dollars)
<TABLE>
<CAPTION>
Financial Institution Number: 1303 For Period Ending November 30, 1997
Inception Date: 09/15/1994
Current Period Inception to Date
<S> <C> <C> <C> <C>
Liquidation Revenues
Interest - Invested Funds 20,047 27,708,539
Other Income 247 218,227
Affordable Housing Reimbursement 0 0
Interest and Fees
Consumer Loans 0 0
Commercial Loans 0 5,558
Securities 4,860 1,545,574
Real Estate Mortgages (2,299) 10,037,045
Owned Assets 0 0
Other Assets/Judgments 0 1,787
Income/(Loss) from Subsidiaries 0 (210,228)
Investigation/Litigation Settlements 275 531,102
Total Liquidation Revenues $23,129 $39,837,605
Liquidation Expenses
Interest on FDIC Loans 0 132,634
Interest on Other Loans 0 0
Liquidation Operations
Salaries 6,589 704,701
Indirect Costs (Note 8) 78,651 17,531,498
Travel 246 168,357
Legal Fees 3,011 1,008,813
Other Professional Fees (833) 4,123,163
Contractor Billed Expenses 0 4,290,656
Other Expenses 1,300 5,447,312
Other Operating Expenses 89,965 33,407,135
Other Liquidation Expenses
Net Loss Sharing 0 0
Litigation Settlement Expenses 0 24,692
Affordable Housing Subsidies 0 0
Total Other Liquidation Expense 0 24,692
Total Liquidation Expenses $88,965 $33,431,827
Net Income (Loss) from Operations ($65,836) $6,405,778
Gain/(Loss) on Disposition of Assets
Consumer Loans 0 0
Commercial Loans 0 (918,913)
Securities 0 (29,127,551)
Real Estate Mortgages 0 (42,487,729)
Owned Assets 0 1,095,080
Other Assets/Judgments 0 (21,067,826)
Net Investment in Subsidiaries (333,209) 605,847
Total Gain/(Loss) on Disposition of Assets ($333,209) ($91,901,092)
Owned Assets
Income from Owned Assets 0 284,853
Less Operating Expenses 5,212 476,958
Net Owned Asset Income/(Loss) ($5,212) ($192,105)
Income/(Loss) of the Liquidation ($404,256) ($86,687,419)
</TABLE>
The accompanying notes are an integral part of these financial statement.
<PAGE>
NOTES TO FINANCIAL STATEMENTS:
1. Basis of Accounting: The FDI Act authorizes the FDIC, as receiver for a
failed insured depositary institution ("Receivership"), to administer and
wind up the affairs of such institution. Financial statement presentations
are based on the premises that the assets of the receivership will be
liquidated and proceeds distributed to the institution's creditors over
time. While the average receivership life span 3-5 years, receiverships may
require longer time frames to conclude.
At the onset of a receivership, the failed Institution's financial records
are reviewed and restated to establish a new basis of accountability. The
assets and liabilities of the failed institution are adjusted to remove all
estimated losses, accruals and deferrals. These include loss allowances;
partial write downs; prepaid, deferred or accrued expenses having no
recovery value; and accrued or deferred income. As applicable, the
collection value of assets as stated in the resolution agreements is also
reflected. Restated balances are shown as the Inception Balance in the
Statement of Assets and Liabilities in Liquidation. The receivership's
Estimated Loss on Assets, Estimated Liquidation Expenses and estimates of
certain other probable losses are not included as a part of the Inception
Balance data.
After inception, FDIC's liquidation valuation and measurement practices are
adopted for all assets and liabilities. As appropriate, estimates of asset
values, liabilities, income and expenses are reflected in the financial
statements. These values are updated over time to compensate for
uncertainties inherent in the estimation process. To present accurately the
results of receivership operations, accruals are used when estimates of
prospective cash flows are reasonably certain. Where significant
uncertainties concerning the realization of a transaction exist, the
transaction is recorded when cash is received or disbursed.
2. Valuation of Assets/Loss Allowances: An Estimated Loss on Assets is provided
when anticipated future cash proceeds from asset dispositions are less than
book values. The Estimated Loss on Assets also includes anticipated asset
holding and disposition expenses. Estimates of future cash proceeds from
assets in liquidation are based on recovery rates developed by asset type
for all receiverships at a fund level based on a statistical sampling and
extrapolation process. This may cause the estimates of losses for this
receivership to vary from the actual losses ultimately realized.
3. Recoveries from Uncertain Sources: Assets of the receivership generally
exclude potential collections from activities such as professional liability
actions. Significant uncertainties as to ultimate realization prevent
reasonable estimation of the amounts ultimately collectible. Instead, these
recoveries are generally recognized when cash is received.
4. Actual and Estimated Liabilities: The FDIC as receiver determines
(allows/disallows) claims and distributes proceeds, derived from the
disposition of the institution's assets, according to applicable law
governing the payment of creditor claims. Liability accounts are presented
at amounts which are due and payable as proven and pending (unproven) claims
against the receivership estate, operating liabilities and estimates of
other probable losses. Applicable law governing the priorities of
distributions may vary with the date the receivership was established and,
therefore, liabilities of the receivership estimate are not ranked in order
of preference or payment priority.
Liabilities also may be estimated where the liability is deemed to exist but
its amount is uncertain or subject to change over time. Examples include,
but are not limited to, liabilities that may arise from
<PAGE>
pending defensive litigation, loss sharing agreements and cross-guaranty
assessments. As with any estimate, the amount finally determined and
recorded as the liability of the receivership may vary from that recorded on
an estimated basis and may include additional amounts which could not be
accurately determined at an earlier date.
5. Estimated Interest on Claims: Applicable law may govern or direct the
payment of interest to creditors holding proven claims against the
receivership estimate, including the claim(s) held by the FDIC in its
Corporate capacity. Uncertainties exist as to the number of creditors whose
claims will ultimately be allowed, the priority classification of claims
under applicable law or regulations (whichever is relevant) and whether
creditors will receiver the principal amount of proven claims against the
receivership estimate. Interest is subordinated to all other claims and
estimated liabilities and is disbursed only after principal amounts are
paid in full. Therefore, for the purposes of these financial statements,
the estimated liability for interest, respective to claims and other
estimated liabilities are recognized only when its full or partial payment
becomes a possibility.
6. Reasonably Possible Litigation Losses: In addition to the amounts
recorded for probable litigation liabilities, the FDIC Legal Division has
determined that the receivership may be subject to reasonable possible
losses from unresolved litigation. Reasonably possible losses differ from
those which are probable in that there is a lesser likelihood of loss and
payment from the receivership. As such, reasonably possible losses are not
accrued in the accounts until the FDIC, through periodic review, determines
either that the litigation settlement expense has been incurred or that the
likelihood of loss has become probable. While not recognized in the
Statement of Assets and Liabilities in Liquidation, FDIC management may use
all or part of the estimate of reasonably possible litigation losses to
determine the assets that must be retained by the receivership to satisfy
these potential obligations. The amount of reasonably possible losses is
shown at the bottom of the receivership's Statement of Assets and
Liabilities in Liquidation as a separate disclosure. Further, receiverships
may be subject to significant, additional probable or reasonably possible
losses from cases where uncertainties prevent a reasonable assessment of
the ultimate outcome and/or an estimate of the amount of loss which could
result.
7. Non-Cash Adjustments: Certain anticipated expenditures and losses are
recognized as non-cash adjustments to net assets. These adjustments include
the Estimated Loss on Assets, Estimated Liquidation Expenses, Estimated
interest on Claims, adjustments for claims recognized after closed and other
estimated receivership liabilities. Such estimates are reversed as
liquidation transactions are recognized in the Statement of Liquidation
Operations.
8. Indirect Cost (Statement of Operations): FDIC field personnel, assigned
to FDIC's sales centers and Field offices, are responsible for the asset
management and financial transactions generated from multiple receiverships
assigned to the location. Therefore, each receivership incurs indirect
liquidation cost in addition to costs charged directly. Such indirect costs
include employee benefit, occupancy and other receivership operating
expenses. Indirect expenses are allocated and billed to active
receiverships based upon liquidation activity as reflected, primarily, by
each receivership's direct and indirect salary charges. Other indirect,
Corporate level costs directly related to the liquidation program (such as
information processing, occupancy expenses and management costs) are
aggregated on a national basis and are also billed to receiverships on the
basis of the receivership's activity as reflected by direct and indirect
salary charges.
<PAGE>
Manually signed facsimile copies of the Letters of transmittal will be
accepted. The Letters of Transmittal, certificates for Shares and any other
required documents should be sent or delivered by each holder of 8.40%
Subordinated Notes Due 1993 of American Capital Corporation, $3.75 Series A
Preferred Stock of American Capital Corporation and Common Stock of TransCapital
Financial Corporation or such holder's broker, dealer, commercial bank, trust
company or other nominee to the Depositary at one of its addresses set forth
below.
The Depositary for the Offer is:
IBJ Schroder Bank & Trust Company
By Mail: By Hand/Overnight Delivery:
P.O. Box 84 One State Street
Bowling Green Station New York, New York 10004
New York, New York 10274-0084 Attention: Securities Processing
Attention: Reorganization Department Window, SC-1
Fax: (212) 858-2611
Confirm Fax by Telephone:
(212) 858-2103
Questions and requests for assistance should be directed to the
Information Agent at its respective address or telephone numbers set forth
below. Additional copies of this Offer to Purchase, the Letters of Transmittal
and all other tender offer materials may be obtained from the Information Agent
as set forth below, and will be furnished promptly at the Purchasers' expense.
You may also contact your broker, dealer, commercial bank, trust company or
other nominee for assistance concerning the Offer.
The Information Agent for the Offer is:
MacKenzie
Partners, Inc.
156 Fifth Avenue
New York, New York 10010
(212)929-5500 (Call Collect)
or
Call Toll-Free (800)322-2885
Exhibit (a)(2)
LETTER OF TRANSMITTAL
To Tender Outstanding Shares of $3.75 Series A Preferred Stock
of
American Capital Corporation
Pursuant to the Offer to Purchase
Up to 1,100,000 of Such Preferred Shares
and Certain Other Securities of American Capital Corporation
and TransCapital Financial Corporation
Dated January 12, 1998
by
Alliance Standard II L.L.C.
and
Alliance Standard II Corp.
- -------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON FRIDAY, FEBRUARY 13, 1998,
UNLESS THE OFFER IS EXTENDED.
- -------------------------------------------------------------------------------
The Depositary for the Offer is:
IBJ SCHRODER BANK & TRUST COMPANY
Deliveries By Mail: Deliveries By Hand/Overnight Courier
P.O. Box 84, Bowling Green Station One State Street
New York, New York 10274-0084 New York, New York 10004
Attention: Reorganization Dep't Attention: Securities Processing
Window, SC-1
Fax: (212) 858-2611
Confirm Fax by Telephone: (212) 858-2103
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE WILL NOT CONSTITUTE A VALID DELIVERY, UNLESS WAIVED BY THE PURCHASERS. YOU
MUST SIGN THIS LETTER OF TRANSMITTAL WHERE INDICATED BELOW AND COMPLETE THE
SUBSTITUTE FORM W-9 PROVIDED BELOW.
1
<PAGE>
THIS LETTER OF TRANSMITTAL IS TO BE USED ONLY IN CONNECTION WITH THE
TENDER OF $3.75 SERIES A PREFERRED SHARES ISSUED BY AMERICAN CAPITAL
CORPORATION.
8.40% SENIOR SUBORDINATED NOTES OF AMERICAN CAPITAL
CORPORATION MUST BE TENDERED ON A SEPARATE BLUE LETTER
OF TRANSMITTAL.
COMMON STOCK OF TRANSCAPITAL FINANCIAL CORPORATION
MUST BE TENDERED ON A SEPARATE PINK LETTER OF
TRANSMITTAL.
<TABLE>
<CAPTION>
DESCRIPTION OF SHARES TENDERED
- ------------------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S) SHARE CERTIFICATE NUMBERS (S) AND
(PLEASE FILL IN, IF BLANK, EXACTLY AS NAME(S) APPEARS AMOUNT OF SHARES TENDERED
ON SHARE CERTIFICATE(S)) (ATTACH LIST IF ADDITIONAL SPACE IS NEEDED
- ------------------------------------------------------------------------------------------------------
SHARE CERTIFICATE AMOUNT OF
NUMBER(S)* SHARES**
<S> <C> <C>
TOTAL SHARES:
</TABLE>
- -------------------------------------------------------------------------------
* Need not be completed by holders delivering Shares by book-entry transfer.
** Unless otherwise indicated, it will be assumed that all Share Certificates
delivered to the Depositary are being tendered hereby. See Instruction 4.
- -------------------------------------------------------------------------------
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL
SHOULD BE READ CAREFULLY BEFORE THIS
LETTER OF TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be completed by holders if Share
Certificates (as defined below) are to be forwarded herewith or if delivery of
Shares is to be made by book-entry transfer to the Depositary's account at The
Depository Trust Company (the "Book-Entry Transfer Facility") pursuant to the
book-entry transfer procedure described in Section 2 of the Offer to Purchase
(as defined below). Delivery of documents to the Book-Entry Transfer Facility
does not constitute delivery to the Depositary.
Holders whose Share Certificates are not immediately available or who
cannot deliver their Share Certificates and all other documents required hereby
to the Depositary prior to the Expiration Date (as defined in Section 1 of the
Offer to Purchase) or who cannot complete the procedure for delivery by
book-entry transfer on a timely basis and
2
<PAGE>
who wish to tender their Shares must do so pursuant to the guaranteed delivery
procedure described in Section 2 of the Offer to Purchase. See Instruction 2.
[ ] CHECK HERE IF SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO
THE DEPOSITARY'S ACCOUNT AT ONE OF THE BOOK-ENTRY TRANSFER FACILITIES
AND COMPLETE THE FOLLOWING:
Name of Tendering Institution _________________________________________________
Account Number______________ Transaction Code Number ________
[ ] CHECK HERE IF SHARES ARE BEING TENDERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE
THE FOLLOWING. PLEASE ENCLOSE A PHOTOCOPY OF SUCH NOTICE OF GUARANTEED
DELIVERY.
Name(s) of Registered Holder(s): _____________________________________________
Window Ticket No. (if any): __________________________________________________
Date of Execution of Notice of Guaranteed Delivery: __________________________
Name of Institution which Guaranteed Delivery: _______________________________
NOTE: SIGNATURES MUST BE PROVIDED BELOW. PLEASE READ
THE INSTRUCTIONS SET FORTH IN THIS LETTER OF
TRANSMITTAL CAREFULLY.
3
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to Alliance Standard II L.L.C. and
Alliance Standard II Corp. (collectively, the "Purchasers"), or either of them,
the above described number of shares (the "Shares" or "Preferred Shares," which
term includes Shares evidenced in documentary form ("Share Certificates") and
Shares in book-entry form) of $3.75 Series A Preferred Stock of American Capital
Corporation, a Florida corporation (the "Company" or "ACC"), pursuant to the
Purchasers' offer to purchase up to 1,100,000 Shares and certain other
securities of ACC and TransCapital Financial Corporation, at $0.50 per Preferred
Share, net to the seller in cash, without interest thereon (the "Offer Price"),
upon the terms and subject to the conditions set forth in the Offer to Purchase
for Cash, dated January 12, 1998 (the "Offer to Purchase"), receipt of which is
hereby acknowledged, and in this Letter of Transmittal (which, together with the
Offer to Purchase and the other Letters of Transmittal referred to therein, all
as amended from time to time, constitute the "Offer"). The undersigned
understands that the Purchasers reserve the right to allocate between themselves
and to transfer or assign, in whole or from time to time in part, to one or more
of their affiliates, the right to purchase all or any portion of the Shares
tendered pursuant to the Offer.
Subject to, and effective upon, acceptance for purchase of the Shares
tendered herewith, in accordance with the terms of the Offer to Purchase
(including, if the Offer is extended or amended, the terms and conditions of
such extension or amendment), the undersigned hereby sells, assigns and
transfers to, or upon the order of, Purchasers all right, title and interest in
and to all the Shares that are being tendered hereby and all dividends,
distributions (including, without limitation, distributions of additional Shares
or rights therein) and rights declared, paid or distributed in respect of such
Shares, warrants, rights or other securities after December 31, 1997
(collectively, "Distributions"), and irrevocably appoints the Depositary the
true and lawful agent and attorney-in-fact of the undersigned with respect to
such Shares and all Distributions, with full power of substitution (such power
of attorney being deemed to be an irrevocable power coupled with an interest),
to (i) deliver Share Certificates and all Distributions, or transfer ownership
of Shares and all Distributions on the account books maintained by the
Book-Entry Transfer Facility, together, in either case, with all accompanying
evidences of transfer and authenticity, to or upon the order of Purchasers, (ii)
present such Shares and all Distributions for transfer on the books of the
Company and (iii) receive all benefits and otherwise exercise all rights of
beneficial ownership of such Shares and all Distributions, all in accordance
with the terms of the Offer.
By executing this Letter of Transmittal, the undersigned irrevocably
appoints Robert S. Jaffe and Michael L. Lewittes as proxies of the undersigned,
each with full power of substitution, to the full extent of the undersigned's
rights with respect to the Shares and Distributions (including any and all
securities into which or for which the Shares may now or at any time hereafter
be convertible or exchangeable) tendered by the undersigned and accepted for
payment by the Purchasers. All such proxies shall be considered coupled with an
interest in the tendered Shares. This appointment will be effective if, when,
and only to the extent that the Purchasers accept such Shares for payment
pursuant to the Offer. Upon such acceptance for payment, all prior proxies given
by the undersigned with respect to such Shares (and such other Shares and
Distributions) will, without further action, be revoked, and no subsequent
proxies may be given nor any subsequent written consent executed by the
undersigned (and, if given or executed, will not be deemed to be effective) with
respect thereto. The designees of the Purchasers named above will, with respect
to the Shares and other securities for which the appointment is effective, be
empowered to exercise all voting and other rights of the undersigned as they in
their sole discretion may deem proper at any annual or special meeting of the
holders of the Shares (and any other securities included in the Distributions)
or any adjournment or postponement thereof, by written
4
<PAGE>
consent in lieu of any such meeting or otherwise, and the Purchasers reserve the
right to require that, in order for Shares or other securities to be deemed
validly tendered, immediately upon the Purchasers' acceptance for payment of
such Shares, the Purchasers must be able to exercise full voting rights with
respect to such Shares.
The undersigned hereby represents and warrants that the undersigned
has full power and authority to tender, sell, assign and transfer the Shares
tendered hereby and all Distributions, and that when such Shares are accepted
for payment by Purchasers, Purchasers or one of them will acquire good,
marketable and unencumbered title thereto and to all Distributions, free and
clear of all liens, restrictions, charges and encumbrances, and that none of
such Shares or Distributions will be subject to any adverse claim. The
undersigned, upon request, shall execute and deliver all additional documents
deemed by the Depositary or Purchasers to be necessary or desirable to complete
the sale, assignment and transfer of the Shares tendered hereby and all
Distributions. In addition, the undersigned shall remit and transfer promptly to
the Depositary for the account of Purchasers all Distributions in respect of the
Shares tendered hereby, accompanied by appropriate documentation of transfer,
and, pending such remittance and transfer or appropriate assurance thereof,
Purchasers shall be entitled to all rights and privileges as owners of each such
Distribution and may withhold the entire purchase price of the Shares tendered
hereby or deduct from such purchase price, the amount or value of such
Distribution as determined by Purchasers in their absolute discretion.
No authority herein conferred or agreed to be conferred shall be
affected by, and all such authority shall survive, the death or incapacity of
the undersigned. All obligations of the undersigned hereunder shall be binding
upon the heirs, personal representatives, successors and assigns of the
undersigned. Except as otherwise stated in the Offer to Purchase, this tender is
irrevocable.
The undersigned understands that tenders of Shares pursuant to any one
of the procedures described in Section 2 of the Offer to Purchase and in the
instructions hereto will constitute the undersigned's acceptance of the terms
and conditions of the Offer. Purchasers' acceptance of such Shares for payment
will constitute a binding agreement between the undersigned and Purchasers upon
the terms and subject to the conditions of the Offer, including, without
limitation, the undersigned's representation and warranty that the undersigned
owns the Shares being tendered.
Unless otherwise indicated herein in the box entitled "Special Payment
Instructions," please issue the check for the purchase price of all Shares
purchased, and return all Share Certificates evidencing Shares not purchased or
not tendered, in the name(s) of the registered holder(s) appearing above under
"Description of Shares Tendered." The undersigned understands and agrees that in
the event that a portion of the Share Certificates represented by tendered Share
Certificates have been accepted for purchase and a portion have not been
accepted for purchase, and the Company or its transfer agent cannot reissue
Share Certificates representing any such Shares, the Purchasers will provide to
the undersigned a certificate of beneficial interest in the Shares that were not
accepted for purchase. The Purchasers believe that the transfer agent has not
issued Share Certificates since 1991, and that the transfer agent will not do so
in connection with this Offer.
Similarly, unless otherwise indicated in the box entitled "Special
Delivery Instructions," please mail the check for the purchase price of all
Shares purchased and all Share Certificates or certificates of beneficial
interest evidencing Shares not tendered or not purchased (and accompanying
documents, as appropriate) to the address(es) of the registered holder(s)
appearing above under "Description of Shares Tendered." In the event that either
the box entitled "Special
5
<PAGE>
Payment Instructions" and/or "Special Delivery Instructions" are completed,
please issue the check for the purchase price of all Shares purchased and return
all Share Certificates evidencing Shares not purchased or not tendered, or
certificates of beneficial interest in respect thereof, in the name(s) of,
and/or mail such check and Share Certificates, or certificates of beneficial
interest, to the person(s) so indicated. The undersigned recognizes that
Purchasers have no obligation, pursuant to the Special Payment Instructions, to
transfer any Shares from the name of the registered holder(s) thereof if
Purchasers do not purchase any of the Shares tendered hereby.
SPECIAL PAYMENT INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS
FOR SHARES FOR SHARES
(See Instructions 1, 5, 6 and 7) (See Instructions 1, 5 and 7)
To be completed ONLY is the check for the To be completed ONLY if the
purchase price of Shares purchased or Share purchase price of Shares
Certificates or certificates of beneficial purchased or Share Certificates
interest evidencing Shares not tendered or or certificates of beneficial
not purchased are to be issued in the name interest evidencing Shares not
of someone other than the undersigned. purchased are to be mailed to
someone other than the under
signed at an address other
than that shown under "Description
of Share Tendered."
Issue check and/or Share Certificate(s) or Mail check and/or Share
certificates of beneficial interest to: Certificate(s) or certificates
of beneficial interest to:
Please Print: Please Print
Name: Name:
-------------------------------- -----------------------------
Address: Address:
----------------------------- -------------------------
- ------------------------------------- -------------------------
(Zip Code) (Zip Code)
Taxpayer ID or Soc. Sec. No.: Taxpayer ID or Soc. Sec. No.:
- ------------------------------------- -------------------------
(See Substitute Form W-9 included herein.) (See Substitute Form W-9
included herein.)
IMPORTANT: HOLDERS MUST SIGN HERE
(Also Please Complete Substitute Form W-9 Included Herein)
Date:
------------------------------- ------------------------
Signature*
Date:
------------------------------- -------------------------
Signature*
*Must be signed by registered holder(s) exactly as name(s) appear(s) on Share
Certificates or on a security position listing or by a person or persons
authorized to become registered holder(s) by certificates and documents
transmitted herewith. If signature is by a trustee, executor, administrator,
guardian, attorney-in-fact, officer of a corporation or other person acting in a
fiduciary or representative capacity, please provide the following information
(See Instruction 5):
6
<PAGE>
Please Print: Please Print:
Name: Name:
-------------------------------- -------------------------
Address: Address:
------------------------------ -------------------------
- ------------------------------------- -------------------------
- ------------------------------------- -------------------------
(Zip Code) (Zip Code)
Area Code and Telephone No.: Area Code and Telephone No.:
- ------------------------------------- -------------------------
Taxpayer ID or Soc. Sec. No.: Taxpayer ID or Soc. Sec. No.:
- ------------------------------------- -------------------------
(See Substitute Form W-9 included herein.) (See Substitute Form W-9
included herein.)
GUARANTEE OF SIGNATURE(S)
(If Required--See Instructions 1 and 5)
FOR USE BY FINANCIAL INSTITUTIONS ONLY. PLACE MEDALLION GUARANTEE IN SPACE
BELOW.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
[ ] Check if your tender of Shares are solicited by broker. Enter name
and address of broker below.
Name of Broker:
-----------------------------------------------------------------
Name of Firm
--------------------------------------------------------------------
Address of Firm
-----------------------------------------------------------------
- --------------------------------------------------------------------------------
7
<PAGE>
INSTRUCTIONS (cont'd)
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. All signatures on this Letter of
Transmittal must be guaranteed by a firm which is a member of a registered
national securities exchange or of the National Association of Securities
Dealers, Inc., or by a financial institution (including most commercial banks,
savings and loan associations and brokerage houses) that is a participant in the
Securities Transfer Agents Medallion Program, the New York Stock Exchange
Medallion Signature Guarantee Program or the Stock Exchange Medallion Program
(an "Eligible Institution"), unless (i) this Letter of Transmittal is signed by
the registered holder(s) of the Shares (which term, for purposes of this
document, shall include any participant in the Book-Entry Transfer Facility
whose name appears on a security position listing as the owner of Shares)
tendered hereby and such holder(s) has (have) completed neither the box entitled
"Special Payment Instructions" nor the box entitled "Special Delivery
Instructions" on the reverse hereof or (ii) such Shares are tendered for the
account of an Eligible Institution. See Instruction 5.
2. DELIVERY OF LETTER OF TRANSMITTAL AND SHARE CERTIFICATES. This
Letter of Transmittal is to be used either if Share Certificates are to be
forwarded herewith or if Shares are to be delivered by book-entry transfer
pursuant to the procedure set forth in Section 2 of the Offer to Purchase. Share
Certificates evidencing all physically tendered Shares, or a confirmation of a
book-entry transfer into the Depositary's account at the Book-Entry Transfer
Facility of all Shares delivered by book-entry transfer, 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, or an Agent's Message in
the case of book-entry transfers, must be received by the Depositary at one of
its addresses set forth on the reverse hereof prior to the Expiration Date (as
defined in Section 1 of the Offer to Purchase). If Share Certificates are
forwarded to the Depositary in multiple deliveries, a properly completed and
duly executed Letter of Transmittal must accompany each such delivery. Holders
whose Share Certificates are not immediately available, who cannot deliver their
Share Certificates and all other required documents to the Depositary prior to
the Expiration Date or who cannot complete the procedure for delivery by
book-entry transfer on a timely basis may tender their Shares pursuant to the
guaranteed delivery procedure described in Section 2 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 made available by Purchasers,
must be received by the Depositary prior to the Expiration Date; and (iii) the
Share Certificates evidencing all physically delivered Shares in proper form for
transfer by delivery, or a confirmation of a book-entry transfer into the
Depositary's account at the Book-Entry Transfer Facility of all Shares delivered
by book-entry transfer, in each case together with a Letter of Transmittal (or a
facsimile thereof), properly completed and duly executed, with any required
signature guarantees, and any other documents required by this Letter of
Transmittal, or an Agent's Message in the case of book-entry transfers, must be
received by the Depositary within three trading days after the date of execution
of such Notice of Guaranteed Delivery, all as described in Section 2 of the
Offer to Purchase.
THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, SHARE
CERTIFICATES AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE
BOOK-ENTRY TRANSFER FACILITY, IS AT THE OPTION AND RISK OF THE TENDERING HOLDER,
AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE
DEPOSITARY. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT
REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME
SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
8
<PAGE>
INSTRUCTIONS (cont'd)
No alternative, conditional or contingent tenders will be accepted.
By execution of this Letter of Transmittal (or a facsimile hereof), all
tendering holders waive any right to receive any notice of the acceptance of
their Shares for payment.
3. INADEQUATE SPACE. If the space provided herein under "Description
of Shares Tendered" is inadequate, the Share Certificate certificate numbers,
the amount of Shares evidenced by such Share Certificates and the amount of
Shares tendered should be listed on a separate schedule and attached hereto.
4. PARTIAL TENDERS (NOT APPLICABLE TO HOLDERS WHO TENDER BY
BOOK-ENTRY TRANSFER). If fewer than all the Shares evidenced by any Share
Certificates delivered to the Depositary herewith are to be tendered hereby,
fill in the amount of Shares which are to be tendered in the box entitled
"Amount of Shares Tendered." In such cases, new Share Certificates or
certificates of beneficial interest evidencing the remainder of the amount of
Shares that were evidenced by the Share Certificates delivered to the Depositary
herewith will be sent to the person(s) signing this Letter of Transmittal,
unless otherwise provided in the box entitled "Special Delivery Instructions" on
the reverse hereof, as soon as practicable after the expiration or termination
of the Offer. All Shares evidenced by Share 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(s) of the Shares tendered hereby, the signature(s) must correspond with
the name(s) as written on the face of the Share Certificates evidencing such
Shares without alteration, enlargement or any other change whatsoever. If any
Share tendered hereby is owned of record by two or more persons, all such
persons must sign this Letter of Transmittal.
If any of the Shares tendered hereby are registered in the
names of different holders, it will be necessary to complete, sign and submit as
many separate Letters of Transmittal as there are different registrations of
such Shares.
If this Letter of Transmittal is signed by the registered
holder(s) of the Shares tendered hereby, no endorsements of Share Certificates
or separate stock powers are required, unless payment is to be made to, or Share
Certificates evidencing Shares not tendered or not purchased are to be issued in
the name of, a person other than the registered holder(s), in which case, the
Share Certificates evidencing the Shares tendered hereby must be endorsed or
accompanied by appropriate stock powers, in either case signed exactly as the
name(s) of the registered holder(s) appear(s) on such Share Certificate(s).
Signatures on such Share Certificate(s) and stock powers must be guaranteed by
an Eligible Institution.
If this Letter of Transmittal is signed by a person other than
the registered holder(s) of the Shares tendered hereby, the Share Certificate(s)
evidencing the Shares tendered hereby must be endorsed or accompanied by
appropriate stock powers, in either case signed exactly as the name(s) of the
registered holder(s) appear(s) on such Share Certificate(s). Signatures on such
Share Certificate(s) and stock powers must be guaranteed by an Eligible
Institution.
If this Letter of Transmittal or any Share Certificate or
stock power is signed by a trustee, executor, administrator, guardian,
attorney-in-fact, officer of a corporation or other person
9
<PAGE>
INSTRUCTIONS (cont'd)
acting in a fiduciary or representative capacity, such person should so indicate
when signing, and proper evidence satisfactory to Purchasers of such person's
authority so to act must be submitted.
6. SECURITIES TRANSFER TAXES. Except as otherwise provided in this
Instruction 6, the Purchasers will pay all securities transfer taxes with
respect to the sale and transfer of any Shares to it or its order pursuant to
the Offer. If, however, payment of the purchase price of any Shares purchased is
to be made to, or Share Certificates or certificates of beneficial interest
evidencing Shares not tendered or not purchased are to be issued in the name of,
a person other than the registered holder(s), the amount of any securities
transfer taxes (whether imposed on the registered holder(s), such other person
or otherwise) payable on account of the transfer to such other person will be
deducted from the purchase price of such Shares purchased, unless evidence
satisfactory to Purchasers of the payment of such taxes, or exemption therefrom,
is submitted. Except as provided in this Instruction 6, it will not be necessary
for transfer tax stamps to be affixed to the Share Certificates evidencing the
Shares tendered hereby.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If a check for the
purchase price of any Shares tendered hereby is to be issued, or Share
Certificate(s) or certificate(s) of beneficial interest evidencing Shares not
tendered or not purchased are to be issued, in the name of a person other than
the person(s) signing this Letter of Transmittal or if such check or any such
Share Certificate is to be sent to someone other than the person(s) signing this
Letter of Transmittal or to the person(s) signing this Letter of Transmittal but
at an address other than that shown in the box entitled "Description of Shares
Tendered" on the reverse hereof, the appropriate boxes on the reverse of this
Letter of Transmittal must be completed.
8. WAIVER OF CONDITIONS. The conditions to the Offer may be waived by
the Purchasers in whole or in part at any time and from time to time in its sole
discretion.
9. QUESTIONS AND REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES.
Questions and requests for assistance may be directed to the Information Agent
at its address or telephone number set forth below. Additional copies of the
Offer to Purchase, this Letter of Transmittal and the Notice of Guaranteed
Delivery may be obtained from the Information Agent or from brokers, dealers,
commercial banks or trust companies.
10. SUBSTITUTE FORM W-9. Each tendering holder is required to provide
the Depositary with a correct Taxpayer Identification Number ("TIN") on the
Substitute Form W-9 which is provided under "Important Tax Information" below,
and to certify, under penalties of perjury, that such number is correct and that
such holder is not subject to backup withholding of federal income tax. If a
tendering holder has been notified by the Internal Revenue Service that such
holder is subject to backup withholding, such holder must cross out item (2) of
the Certification box of the Substitute Form W-9, unless such holder has since
been notified by the Internal Revenue Service that such holder is no longer
subject to backup withholding. Failure to provide the information on the
Substitute Form W-9 may subject the tendering holder to 31% federal income tax
withholding on the payment of the purchase price of all Shares purchased from
such holder. If the tendering holder has not been issued a TIN and has applied
for one or intends to apply for one in the near future, such holder should write
"Applied For" in the space provided for the TIN in Part I of the Substitute Form
W-9, and sign and date the Substitute Form W-9. If "Applied For" is written in
Part I and the Depositary is not provided with a TIN within 60 days, the
Depositary will withhold 31% on all payments of the purchase price to such
holder until a TIN is provided to the Depositary.
10
<PAGE>
INSTRUCTIONS (cont'd)
11. LOST SHARE CERTIFICATES. In the event that the Share Certificates
which a registered holder wants to surrender have been lost or destroyed, such
tendering holder should indicate such by writing the word "Lost" under the
column labeled "Share Certificate Number(s)" in the box labeled "Description of
Shares Tendered". By indicating that such Share Certificates are lost, the
tendering holder shall be deemed to have made the following representations and
warranties to, and agreements with, the Purchasers: (i) the undersigned is the
record owner of the Shares being tendered pursuant to this Letter of
Transmittal, (ii) the undersigned has lost the Share Certificates representing
the Shares being tendered pursuant to this Letter of Transmittal, (iii) the
undersigned has the power and authority to surrender the Shares being tendered
pursuant to this Letter of Transmittal and the Purchasers will acquire good and
valid title thereto, free and clear of any liens, claims and encumbrances, (iv)
the undersigned has not converted or attempted to exercise any conversion rights
with respect to the Shares, (v) to the undersigned's knowledge, the undersigned
has received no notice of redemption with respect to the Shares, (vi) the
undersigned, upon request, will execute and deliver any additional documents
deemed by the Purchasers to be necessary or desirable in connection with the
surrender of the Shares being tendered pursuant to this Letter of Transmittal,
and (vii) the undersigned agrees to indemnify the Purchasers and their
affiliates from any losses and damages which they may incur arising out of the
breach of any of the foregoing representations and agreements.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR FACSIMILE HEREOF), PROPERLY
COMPLETED AND DULY EXECUTED (TOGETHER WITH ANY REQUIRED SIGNATURE GUARANTEES AND
SHARE CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY TRANSFER AND ALL OTHER REQUIRED
DOCUMENTS) OR A PROPERLY COMPLETED AND DULY EXECUTED NOTICE OF GUARANTEED
DELIVERY MUST BE RECEIVED BY THE DEPOSITARY PRIOR TO THE EXPIRATION DATE (AS
DEFINED IN THE OFFER TO PURCHASE).
11
<PAGE>
IMPORTANT TAX INFORMATION
Under the federal income tax law, a holder whose tendered Shares are
accepted for payment is required by law to provide the Depositary (as payer)
with such holder's correct TIN on Substitute Form W-9 below. If such holder is
an individual, the TIN is such holder's social security number. If the
Depositary is not provided with the correct TIN, the holder may be subject to a
$50 penalty imposed by the Internal Revenue Service. In addition, payments that
are made to such holder with respect to Shares purchased pursuant to the Offer
may be subject to backup withholding of 31%.
Certain holders (including, among others, all corporations and
certain foreign individuals) are not subject to these backup withholding and
reporting requirements. In order for a foreign individual to qualify as an
exempt recipient, such individual must submit a Form W-8, Certificate of Foreign
Status, signed under penalties of perjury, attesting to such individual's exempt
status. Forms of 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
31% of any payments made to the holder. Backup withholding is not an additional
tax. Rather, the tax liability of persons subject to backup withholding will be
reduced by the amount of tax withheld. If withholding results in an overpayment
of taxes, a refund may be obtained from the Internal Revenue Service.
Purpose of Substitute Form W-9: To prevent backup withholding on
payments that are made to a holder with respect to Shares purchased pursuant to
the Offer, the holder is required to notify the Depositary of such holder's
correct TIN by completing the form below certifying (a) that the TIN provided on
Substitute Form W-9 is correct (or that such holder is awaiting a TIN), and (b)
that (i) such holder has not been notified by the Internal Revenue Service that
such holder is subject to backup withholding as a result of a failure to report
all interest or dividends or (ii) the Internal Revenue Service has notified such
holder that such holder is no longer subject to backup withholding.
What Number to Give the Depositary: The holder is required to give
the Depositary the social security number or employer identification number of
the record holder of the Shares tendered hereby. 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 guidance on which number to report. If the tendering
holder has not been issued a TIN and has applied for a number or intends to
apply for a number in the near future, the holder should write "Applied For" in
the space provided for the TIN in Part 1, and sign and date the Substitute Form
W-9. If "Applied For" is written in Part I and the Depositary is not provided
with a TIN within 60 days, the Depositary will withhold 31% of all payments of
the purchase price to such holder until a TIN is provided to the Depositary.
12
<PAGE>
ALL TENDERING HOLDERS MUST COMPLETE THE FOLLOWING:
PAYER'S NAME: IBJ SCHRODER BANK & TRUST COMPANY
(See Instruction 10)
<TABLE>
<CAPTION>
<S> <C> <C>
SUBSTITUTE PART I--Taxpayer Identification Number-- Social Security Number
Form W-9 Enter taxpayer identification number in the
box at right. (For most individuals, this is ----------------------
For all accounts your social security number. If you do not
have a number, see Obtaining a Number in OR
the enclosed Guidelines.) Certify by signing
and dating below. Note: If the account is in Employer I.D. Number
more than one name, see the chart in the
enclosed Guidelines to determine which
number to give the payer.
DEPARTMENT OF PART II--For Payees Exempt From Backup Withholding, see the enclosed
THE TREASURY Guidelines and complete as instructed therein.
INTERNAL REVENUE
SERVICE CERTIFICATION--Under penalties of perjury, I certify that:
PAYER'S REQUEST (1) The number shown on this form is my correct Taxpayer Identification
FOR TAXPAYER Number, or I am waiting for a number to be issued to me, and
IDENTIFICATION
NUMBER (2) I am not subject to backup withholding either because I have not been
notified by the Internal Revenue Service
(the "IRS") that I am subject to backup
withholding as a result of failure to
report all interest or dividends, or the
IRS has notified me that I am no longer
subject to backup withholding.
</TABLE>
CERTIFICATE INSTRUCTIONS--You must cross out
item (2)above if you have been notified by the
IRS that you are subject to backup withholding
because of under reporting interest or
dividends on your tax return. However, if
after being notified by the IRS that you were
subject to backup withholding you received
another notification from the IRS that you are
no longer subject to backup withholding, do
not cross out item (2). (Also see instructions
in the enclosed Guidelines.)
SIGNATURE:
----------------------------------------------
DATE: , 19
---------------------- --
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE
OFFER.
PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF
TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR
ADDITIONAL DETAILS.
13
<PAGE>
================================================================================
The Information Agent for the Offer is:
MacKenzie Partners, Inc.
(800) 322-2885
(Toll Free)
(212) 929-5500
(Call Collect)
JANUARY 12, 1998
================================================================================
Exhibit (a)(3)
LETTER OF TRANSMITTAL
To Tender Outstanding Shares of Common Stock
of
TransCapital Financial Corporation
Pursuant to the Offer to Purchase
Up to 1,950,000 of Such Common Shares
and Certain Securities of American Capital Corporation
Dated January 12, 1998
by
Alliance Standard II L.L.C.
and
Alliance Standard II Corp.
================================================================================
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON FRIDAY, FEBRUAY 13, 1998,
UNLESS THE OFFER IS EXTENDED.
================================================================================
The Depositary for the Offer is:
IBJ SCHRODER BANK & TRUST COMPANY
Deliveries By Mail: Deliveries By Hand/Overnight Courier
P.O. Box 84, Bowling Green Station One State Street
New York, New York 10274-0084 New York, New York 10004
Attention: Reorganization Dep't Attention: Securities Processing
Window, SC-1
Fax: (212) 858-2611
Confirm Fax by Telephone: (212) 858-2103
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE WILL NOT CONSTITUTE A VALID DELIVERY, UNLESS WAIVED BY THE PURCHASERS. YOU
MUST SIGN THIS LETTER OF TRANSMITTAL WHERE INDICATED BELOW AND COMPLETE THE
SUBSTITUTE FORM W-9 PROVIDED BELOW.
1
<PAGE>
THIS LETTER OF TRANSMITTAL IS TO BE USED ONLY IN CONNECTION WITH THE
TENDER OF COMMON SHARES ISSUED BY TRANSCAPITAL FINANCIAL CORPORATION.
8.40% SENIOR SUBORDINATED NOTES OF AMERICAN CAPITAL
CORPORATION MUST BE TENDERED ON A SEPARATE BLUE LETTER
OF TRANSMITTAL.
$3.75 SERIES A PREFERRED STOCK OF AMERICAN CAPITAL
CORPORATION MUST BE TENDERED ON A SEPARATE YELLOW
LETTER OF TRANSMITTAL.
<TABLE>
<CAPTION>
DESCRIPTION OF SHARES TENDERED
=================================================================================================================
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S) SHARE CERTIFICATE NUMBERS (S) AND
(PLEASE FILL IN, IF BLANK, EXACTLY AS NAME(S) APPEARS AMOUNT OF SHARES TENDERED
ON SHARE CERTIFICATE(S)) (ATTACH LIST IF ADDITIONAL SPACE IS NEEDED)
- -----------------------------------------------------------------------------------------------------------------
SHARE CERTIFICATE AMOUNT OF
NUMBER(S)* SHARES**
---------- --------
<S> <C> <C>
- ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
TOTAL SHARES:
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
* Need not be completed by holders delivering Shares by book-entry transfer.
** Unless otherwise indicated, it will be assumed that all Share Certificates
delivered to the Depositary are being tendered hereby. See Instruction 4.
- ------------------------------------------------------------------------------
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL
SHOULD BE READ CAREFULLY BEFORE THIS
LETTER OF TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be completed by holders if Share
Certificates (as defined below) are to be forwarded herewith or if delivery of
Shares is to be made by book-entry transfer to the Depositary's account at The
Depository Trust Company (the "Book-Entry Transfer Facility") pursuant to the
book-entry transfer procedure described in Section 2 of the Offer to Purchase
(as defined below). Delivery of documents to the Book-Entry Transfer Facility
does not constitute delivery to the Depositary.
Holders whose Share Certificates are not immediately available or who
cannot deliver their Share Certificates and all other documents required hereby
to the Depositary prior to the Expiration Date (as defined in Section 1 of the
Offer to Purchase) or who cannot complete the procedure for delivery by
book-entry transfer on a timely basis and
2
<PAGE>
who wish to tender their Shares must do so pursuant to the guaranteed delivery
procedure described in Section 2 of the Offer to Purchase. See Instruction 2.
[ ] CHECK HERE IF SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO
THE DEPOSITARY'S ACCOUNT AT ONE OF THE BOOK-ENTRY TRANSFER FACILITIES
AND COMPLETE THE FOLLOWING:
Name of Tendering Institution
---------------------------------------------------
Account Number Transaction Code Number
--------------------- ----------
[ ] CHECK HERE IF SHARES ARE BEING TENDERED PURSUANT TO A NOTICE
OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND
COMPLETE THE FOLLOWING. PLEASE ENCLOSE A PHOTOCOPY OF SUCH
NOTICE OF GUARANTEED DELIVERY.
Name(s) of Registered Holder(s):
-----------------------------------------------
Window Ticket No. (if any):
-----------------------------------------------------
Date of Execution of Notice of Guaranteed Delivery:
-----------------------------
Name of Institution which Guaranteed Delivery:
----------------------------------
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE INSTRUCTIONS SET
FORTH IN THIS LETTER OF TRANSMITTAL
CAREFULLY.
3
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to Alliance Standard II L.L.C. and
Alliance Standard II Corp. (collectively, the "Purchasers"), or either of them,
the above described number of shares of Common Stock, par value $1.00 per share
(the "Shares," which term includes Shares evidenced in documentary form ("Share
Certificates") and Shares in book-entry form) of TransCapital Financial
Corporation, a Delaware corporation (the "Company " or "TFC"), pursuant to the
Purchasers' offer to purchase up to 1,950,000 Shares and certain other
securities of TFC and American Capital Corporation, a Florida corporation, at
$1.00 per Share of TFC, net to the seller in cash, without interest thereon (the
"Offer Price"), upon the terms and subject to the conditions set forth in the
Offer to Purchase for Cash, dated January 12, 1998 (the "Offer to Purchase"),
receipt of which is hereby acknowledged, and in this Letter of Transmittal
(which, together with the Offer to Purchase and the other Letters of Transmittal
referred to therein, all as amended from time to time, constitute the "Offer").
The undersigned understands that the Purchasers reserve the right to allocate
between themselves and to transfer or assign, in whole or from time to time in
part, to one or more of their affiliates, the right to purchase all or any
portion of the Shares tendered pursuant to the Offer.
Subject to, and effective upon, acceptance for payment of the Shares
tendered herewith, in accordance with the terms of the Offer to Purchase
(including, if the Offer is extended or amended, the terms and conditions of
such extension or amendment), the undersigned hereby sells, assigns and
transfers to, or upon the order of, Purchasers all right, title and interest in
and to all the Shares that are being tendered hereby and all dividends,
distributions (including, without limitation, distributions of additional Shares
or rights therein) and rights declared, paid or distributed in respect of such
Shares, warrants, rights or other securities after December 31, 1997
(collectively, "Distributions"), and irrevocably appoints the Depositary the
true and lawful agent and attorney-in-fact of the undersigned with respect to
such Shares and all Distributions, with full power of substitution (such power
of attorney being deemed to be an irrevocable power coupled with an interest),
to (i) deliver Share Certificates and all Distributions, or transfer ownership
of Shares and all Distributions on the account books maintained by the
Book-Entry Transfer Facility, together, in either case, with all accompanying
evidences of transfer and authenticity, to or upon the order of Purchasers, (ii)
present such Shares and all Distributions for transfer on the books of the
Company and (iii) receive all benefits and otherwise exercise all rights of
beneficial ownership of such Shares and all Distributions, all in accordance
with the terms of the Offer.
By executing this Letter of Transmittal, the undersigned irrevocably
appoints Robert S. Jaffe and Michael L. Lewittes as proxies of the undersigned,
each with full power of substitution, to the full extent of the undersigned's
rights with respect to the Shares and Distributions (including any and all
securities into which or for which the Shares may now or at any time hereafter
be convertible or exchangeable) tendered by the undersigned and accepted for
payment by the Purchasers. All such proxies shall be considered coupled with an
interest in the tendered Shares. This appointment will be effective if, when,
and only to the extent that the Purchasers accept such Shares for payment
pursuant to the Offer. Upon such acceptance for payment, all prior proxies given
by the undersigned with respect to such Shares (and such other Shares and
Distributions) will, without further action, be revoked, and no subsequent
proxies may be given nor any subsequent written consent executed by the
undersigned (and, if given or executed, will not be deemed to be effective) with
respect thereto. The designees of the Purchasers named above will, with respect
to the Shares and other securities for which the appointment is effective, be
empowered to exercise all voting and other rights of the undersigned as they in
their sole discretion may deem proper at any annual or special meeting of the
holders of the Shares (and any other securities included in the Distributions)
or any adjournment or postponement thereof, by written
4
<PAGE>
consent in lieu of any such meeting or otherwise, and the Purchasers
reserve the right to require that, in order for Shares or other securities to be
deemed validly tendered, immediately upon the Purchasers' acceptance for payment
of such Shares, the Purchasers must be able to exercise full voting rights with
respect to such Shares.
The undersigned hereby represents and warrants that the undersigned
has full power and authority to tender, sell, assign and transfer the Shares
tendered hereby and all Distributions, and that when such Shares are accepted
for payment by Purchasers, Purchasers or one of them will acquire good,
marketable and unencumbered title thereto and to all Distributions, free and
clear of all liens, restrictions, charges and encumbrances, and that none of
such Shares or Distributions will be subject to any adverse claim. The
undersigned, upon request, shall execute and deliver all additional documents
deemed by the Depositary or Purchasers to be necessary or desirable to complete
the sale, assignment and transfer of the Shares tendered hereby and all
Distributions. In addition, the undersigned shall remit and transfer promptly to
the Depositary for the account of Purchasers all Distributions in respect of the
Shares tendered hereby, accompanied by appropriate documentation of transfer,
and, pending such remittance and transfer or appropriate assurance thereof,
Purchasers shall be entitled to all rights and privileges as owner of each such
Distribution and may withhold the entire purchase price of the Shares tendered
hereby or deduct from such purchase price, the amount or value of such
Distribution as determined by Purchasers in their absolute discretion.
No authority herein conferred or agreed to be conferred shall be
affected by, and all such authority shall survive, the death or incapacity of
the undersigned. All obligations of the undersigned hereunder shall be binding
upon the heirs, personal representatives, successors and assigns of the
undersigned. Except as otherwise stated in the Offer to Purchase, this tender is
irrevocable.
The undersigned understands that tenders of Shares pursuant to any one
of the procedures described in Section 2 of the Offer to Purchase and in the
instructions hereto will constitute the undersigned's acceptance of the terms
and conditions of the Offer. Purchasers' acceptance of such Shares for payment
will constitute a binding agreement between the undersigned and Purchasers upon
the terms and subject to the conditions of the Offer, including, without
limitation, the undersigned's representation and warranty that the undersigned
owns the Shares being tendered.
Unless otherwise indicated herein in the box entitled "Special Payment
Instructions," please issue the check for the purchase price of all Shares
purchased, and return all Share Certificates evidencing Shares not purchased or
not tendered, in the name(s) of the registered holder(s) appearing above under
"Description of Shares Tendered." The undersigned understands and agrees that in
the event that a portion of the Share Certificates represented by tendered Share
Certificates have been accepted for purchase and a portion have not been
accepted for purchase, and the Company or its transfer agent cannot reissue
Share Certificates representing any such Shares, the Purchasers will provide to
the undersigned a certificate of beneficial interest in the Shares that were not
accepted for purchase. The Purchasers believe that the transfer agent has not
issued Share Certificates since 1992, and that the transfer agent will not do so
in connection with this Offer.
Similarly, unless otherwise indicated in the box entitled "Special
Delivery Instructions," please mail the check for the purchase price of all
Shares purchased and all Share Certificates or certificates of beneficial
interest evidencing Shares not tendered or not purchased (and accompanying
documents, as appropriate) to the address(es) of the registered holder(s)
appearing above under "Description of Shares Tendered." In the event that either
the box entitled "Special
5
<PAGE>
Payment Instructions" and/or "Special Delivery Instructions" are
completed, please issue the check for the purchase price of all Shares purchased
and return all Share Certificates evidencing Shares not purchased or not
tendered, or certificates of beneficial interest in respect thereof, in the
name(s) of, and/or mail such check and Share Certificates or certificates of
beneficial interest to, the person(s) so indicated. The undersigned recognizes
that Purchasers have no obligation, pursuant to the Special Payment
Instructions, to transfer any Shares from the name of the registered holder(s)
thereof if Purchasers do not purchase any of the Shares tendered hereby.
SPECIAL PAYMENT INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS
FOR SHARES FOR SHARES
(See Instructions 1, 5, 6 and 7) (See Instructions 1, 5 and 7)
To be completed ONLY is the check for the To be completed ONLY if the
purchase price of Shares purchased or Share purchase price of Shares
Certificates or certificates of beneficial purchased or Share Certificates
interest evidencing Shares not tendered or or certificates of beneficial
not purchased are to be issued in the name interest evidencing Shares not
of someone other than the undersigned. purchased are to be mailed to
someone other than the under
signed at an address other
than that shown under "Description
of Share Tendered."
Issue check and/or Share Certificate(s) or Mail check and/or Share
certificates of beneficial interest to: Certificate(s) or certificates
of beneficial interest to:
Please Print: Please Print
Name: Name:
-------------------------------- -----------------------------
Address: Address:
----------------------------- -------------------------
- ------------------------------------- -------------------------
(Zip Code) (Zip Code)
Taxpayer ID or Soc. Sec. No.: Taxpayer ID or Soc. Sec. No.:
- ------------------------------------- -------------------------
(See Substitute Form W-9 included herein.) (See Substitute Form W-9
included herein.)
IMPORTANT: HOLDERS MUST SIGN HERE
(Also Please Complete Substitute Form W-9 Included Herein)
Date:
------------------------------- ------------------------
Signature*
Date:
------------------------------- -------------------------
Signature*
*Must be signed by registered holder(s) exactly as name(s) appear(s) on Share
Certificates or on a security position listing or by a person or persons
authorized to become registered holder(s) by certificates and documents
transmitted herewith. If signature is by a trustee, executor, administrator,
guardian, attorney-in-fact, officer of a corporation or other person acting in a
fiduciary or representative capacity, please provide the following information
(See Instruction 5):
6
<PAGE>
Please Print: Please Print:
Name: Name:
-------------------------------- -------------------------
Address: Address:
------------------------------ -------------------------
- ------------------------------------- -------------------------
- ------------------------------------- -------------------------
(Zip Code) (Zip Code)
Area Code and Telephone No.: Area Code and Telephone No.:
- ------------------------------------- -------------------------
Taxpayer ID or Soc. Sec. No.: Taxpayer ID or Soc. Sec. No.:
- ------------------------------------- -------------------------
(See Substitute Form W-9 included herein.) (See Substitute Form W-9
included herein.)
GUARANTEE OF SIGNATURE(S)
(If Required--See Instructions 1 and 5)
FOR USE BY FINANCIAL INSTITUTIONS ONLY. PLACE MEDALLION GUARANTEE IN SPACE
BELOW.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
[ ] Check if your tender of Shares are solicited by broker. Enter name and
address of broker below.
Name of Broker:
-----------------------------------------------------------------
Name of Firm
--------------------------------------------------------------------
Address of Firm
-----------------------------------------------------------------
- --------------------------------------------------------------------------------
7
<PAGE>
INSTRUCTIONS (cont'd)
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. All signatures on this Letter of
Transmittal must be guaranteed by a firm which is a member of a registered
national securities exchange or of the National Association of Securities
Dealers, Inc., or by a financial institution (including most commercial banks,
savings and loan associations and brokerage houses) that is a participant in the
Securities Transfer Agents Medallion Program, the New York Stock Exchange
Medallion Signature Guarantee Program or the Stock Exchange Medallion Program
(an "Eligible Institution"), unless (i) this Letter of Transmittal is signed by
the registered holder(s) of the Shares (which term, for purposes of this
document, shall include any participant in the Book-Entry Transfer Facility
whose name appears on a security position listing as the owner of Shares)
tendered hereby and such holder(s) has (have) completed neither the box entitled
"Special Payment Instructions" nor the box entitled "Special Delivery
Instructions" on the reverse hereof or (ii) such Shares are tendered for the
account of an Eligible Institution. See Instruction 5.
2. DELIVERY OF LETTER OF TRANSMITTAL AND SHARE CERTIFICATES. This
Letter of Transmittal is to be used either if Share Certificates are to be
forwarded herewith or if Shares are to be delivered by book-entry transfer
pursuant to the procedure set forth in Section 2 of the Offer to Purchase. Share
Certificates evidencing all physically tendered Shares, or a confirmation of a
book-entry transfer into the Depositary's account at the Book-Entry Transfer
Facility of all Shares delivered by book-entry transfer, 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, or an Agent's Message in
the case of book-entry transfers, must be received by the Depositary at one of
its addresses set forth on the reverse hereof prior to the Expiration Date (as
defined in Section 1 of the Offer to Purchase). If Share Certificates are
forwarded to the Depositary in multiple deliveries, a properly completed and
duly executed Letter of Transmittal must accompany each such delivery. Holders
whose Share Certificates are not immediately available, who cannot deliver their
Share Certificates and all other required documents to the Depositary prior to
the Expiration Date or who cannot complete the procedure for delivery by
book-entry transfer on a timely basis may tender their Shares pursuant to the
guaranteed delivery procedure described in Section 2 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 made available by Purchasers,
must be received by the Depositary prior to the Expiration Date; and (iii) the
Share Certificates evidencing all physically delivered Shares in proper form for
transfer by delivery, or a confirmation of a book-entry transfer into the
Depositary's account at the Book-Entry Transfer Facility of all Shares delivered
by book-entry transfer, in each case together with a Letter of Transmittal (or a
facsimile thereof), properly completed and duly executed, with any required
signature guarantees, and any other documents required by this Letter of
Transmittal, or an Agent's Message in the case of book-entry transfers, must be
received by the Depositary within three trading days after the date of execution
of such Notice of Guaranteed Delivery, all as described in Section 2 of the
Offer to Purchase.
THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, SHARE
CERTIFICATES AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE
BOOK-ENTRY TRANSFER FACILITY, IS AT THE OPTION AND RISK OF THE TENDERING HOLDER,
AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE
DEPOSITARY. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT
REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME
SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
8
<PAGE>
INSTRUCTIONS (cont'd)
No alternative, conditional or contingent tenders will be accepted. By
execution of this Letter of Transmittal (or a facsimile hereof), all tendering
holders waive any right to receive any notice of the acceptance of their Shares
for payment.
3. INADEQUATE SPACE. If the space provided herein under "Description
of Shares Tendered" is inadequate, the Share Certificate certificate numbers,
the amount of Shares evidenced by such Share Certificates and the amount of
Shares tendered should be listed on a separate schedule and attached hereto.
4. PARTIAL TENDERS (NOT APPLICABLE TO HOLDERS WHO TENDER BY BOOK-ENTRY
TRANSFER). If fewer than all the Shares evidenced by any Share Certificates
delivered to the Depositary herewith are to be tendered hereby, fill in the
amount of Shares which are to be tendered in the box entitled "Amount of Shares
Tendered." In such cases, new Share Certificates or certificates of beneficial
interest evidencing the remainder of the amount of Shares that were evidenced by
the Share Certificates delivered to the Depositary herewith will be sent to the
person(s) signing this Letter of Transmittal, unless otherwise provided in the
box entitled "Special Delivery Instructions" on the reverse hereof, as soon as
practicable after the expiration or termination of the Offer. All Shares
evidenced by Share 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(s) of the
Shares tendered hereby, the signature(s) must correspond with the name(s) as
written on the face of the Share Certificates evidencing such Shares without
alteration, enlargement or any other change whatsoever. If any Share tendered
hereby is owned of record by two or more persons, all such persons must sign
this Letter of Transmittal.
If any of the Shares tendered hereby are registered in the names of
different holders, it will be necessary to complete, sign and submit as many
separate Letters of Transmittal as there are different registrations of such
Shares.
If this Letter of Transmittal is signed by the registered holder(s) of
the Shares tendered hereby, no endorsements of Share Certificates or separate
stock powers are required, unless payment is to be made to, or Share
Certificates evidencing Shares not tendered or not purchased are to be issued in
the name of, a person other than the registered holder(s), in which case, the
Share Certificates evidencing the Shares tendered hereby must be endorsed or
accompanied by appropriate stock powers, in either case signed exactly as the
name(s) of the registered holder(s) appear(s) on such Share Certificate(s).
Signatures on such Share Certificate(s) and stock powers must be guaranteed by
an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Shares tendered hereby, the Share Certificate(s)
evidencing the Shares tendered hereby must be endorsed or accompanied by
appropriate stock powers, in either case signed exactly as the name(s) of the
registered holder(s) appear(s) on such Share Certificate(s). Signatures on such
Share Certificate(s) and stock powers must be guaranteed by an Eligible
Institution.
If this Letter of Transmittal or any Share Certificate or stock power
is signed by a trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation or other person
9
<PAGE>
INSTRUCTIONS (cont'd)
acting in a fiduciary or representative capacity, such person should so indicate
when signing, and proper evidence satisfactory to Purchasers of such person's
authority so to act must be submitted.
6. SECURITIES TRANSFER TAXES. Except as otherwise provided in this
Instruction 6, the Purchasers will pay all securities transfer taxes with
respect to the sale and transfer of any Shares to it or its order pursuant to
the Offer. If, however, payment of the purchase price of any Shares purchased is
to be made to, or Share Certificates or certificates of beneficial interest
evidencing Shares not tendered or not purchased are to be issued in the name of,
a person other than the registered holder(s), the amount of any securities
transfer taxes (whether imposed on the registered holder(s), such other person
or otherwise) payable on account of the transfer to such other person will be
deducted from the purchase price of such Shares purchased, unless evidence
satisfactory to Purchasers of the payment of such taxes, or exemption therefrom,
is submitted. Except as provided in this Instruction 6, it will not be necessary
for transfer tax stamps to be affixed to the Share Certificates evidencing the
Shares tendered hereby.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If a check for the
purchase price of any Shares tendered hereby is to be issued, or Share
Certificate(s) or certificate(s) of beneficial interest evidencing Shares not
tendered or not purchased are to be issued, in the name of a person other than
the person(s) signing this Letter of Transmittal or if such check or any such
Share Certificate is to be sent to someone other than the person(s) signing this
Letter of Transmittal or to the person(s) signing this Letter of Transmittal but
at an address other than that shown in the box entitled "Description of Shares
Tendered" on the reverse hereof, the appropriate boxes on the reverse of this
Letter of Transmittal must be completed.
8. WAIVER OF CONDITIONS. The conditions to the Offer may be waived by
the Purchasers in whole or in part at any time and from time to time in their
absolute discretion.
9. QUESTIONS AND REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES.
Questions and requests for assistance may be directed to the Information Agent
at its address or telephone number set forth below. Additional copies of the
Offer to Purchase, this Letter of Transmittal and the Notice of Guaranteed
Delivery may be obtained from the Information Agent or from brokers, dealers,
commercial banks or trust companies.
10. SUBSTITUTE FORM W-9. Each tendering holder is required to provide
the Depositary with a correct Taxpayer Identification Number ("TIN") on the
Substitute Form W-9 which is provided under "Important Tax Information" below,
and to certify, under penalties of perjury, that such number is correct and that
such holder is not subject to backup withholding of federal income tax. If a
tendering holder has been notified by the Internal Revenue Service that such
holder is subject to backup withholding, such holder must cross out item (2) of
the Certification box of the Substitute Form W-9, unless such holder has since
been notified by the Internal Revenue Service that such holder is no longer
subject to backup withholding. Failure to provide the information on the
Substitute Form W-9 may subject the tendering holder to 31% federal income tax
withholding on the payment of the purchase price of all Shares purchased from
such holder. If the tendering holder has not been issued a TIN and has applied
for one or intends to apply for one in the near future, such holder should write
"Applied For" in the space provided for the TIN in Part I of the Substitute Form
W-9, and sign and date the Substitute Form W-9. If "Applied For" is written in
Part I and the Depositary is not provided with a TIN within 60 days, the
Depositary will withhold 31% on all payments of the purchase price to such
holder until a TIN is provided to the Depositary.
10
<PAGE>
INSTRUCTIONS (cont'd)
11. LOST SHARE CERTIFICATES. In the event that the Share Certificates
which a registered holder wants to surrender have been lost or destroyed, such
tendering holder should indicate such by writing the word "Lost" under the
column labeled "Share Certificate Number(s)" in the box labeled "Description of
Shares Tendered". By indicating that such Share Certificates are lost, the
tendering holder shall be deemed to have made the following representations and
warranties to, and agreements with, the Purchasers: (i) the undersigned is the
record owner of the Shares being tendered pursuant to this Letter of
Transmittal, (ii) the undersigned has lost the Share Certificates representing
the Shares being tendered pursuant to this Letter of Transmittal, (iii) the
undersigned has the power and authority to surrender the Shares being tendered
pursuant to this Letter of Transmittal and the Purchasers will acquire good and
valid title thereto, free and clear of any liens, claims and encumbrances, (iv)
the undersigned, upon request, will execute and deliver any additional documents
deemed by the Purchasers to be necessary or desirable in connection with the
surrender of the Shares being tendered pursuant to this Letter of Transmittal,
and (v) the undersigned agrees to indemnify the Purchasers and their affiliates
from any losses and damages which they may incur arising out of the breach of
any of the foregoing representations and agreements.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR FACSIMILE HEREOF), PROPERLY
COMPLETED AND DULY EXECUTED (TOGETHER WITH ANY REQUIRED SIGNATURE GUARANTEES AND
SHARE CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY TRANSFER AND ALL OTHER REQUIRED
DOCUMENTS) OR A PROPERLY COMPLETED AND DULY EXECUTED NOTICE OF GUARANTEED
DELIVERY MUST BE RECEIVED BY THE DEPOSITARY PRIOR TO THE EXPIRATION DATE (AS
DEFINED IN THE OFFER TO PURCHASE).
11
<PAGE>
IMPORTANT TAX INFORMATION
Under the federal income tax law, a holder whose tendered Shares are
accepted for payment is required by law to provide the Depositary (as payer)
with such holder's correct TIN on Substitute Form W-9 below. If such holder is
an individual, the TIN is such holder's social security number. If the
Depositary is not provided with the correct TIN, the holder may be subject to a
$50 penalty imposed by the Internal Revenue Service. In addition, payments that
are made to such holder with respect to Shares purchased pursuant to the Offer
may be subject to backup withholding of 31%.
Certain holders (including, among others, all corporations and certain
foreign individuals) are not subject to these backup withholding and reporting
requirements. In order for a foreign individual to qualify as an exempt
recipient, such individual must submit a Form W-8, Certificate of Foreign
Status, signed under penalties of perjury, attesting to such individual's exempt
status. Forms of 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
31% of any payments made to the holder. Backup withholding is not an additional
tax. Rather, the tax liability of persons subject to backup withholding will be
reduced by the amount of tax withheld. If withholding results in an overpayment
of taxes, a refund may be obtained from the Internal Revenue Service.
Purpose of Substitute Form W-9: To prevent backup withholding on
payments that are made to a holder with respect to Shares purchased pursuant to
the Offer, the holder is required to notify the Depositary of such holder's
correct TIN by completing the form below certifying (a) that the TIN provided on
Substitute Form W-9 is correct (or that such holder is awaiting a TIN), and (b)
that (i) such holder has not been notified by the Internal Revenue Service that
such holder is subject to backup withholding as a result of a failure to report
all interest or dividends or (ii) the Internal Revenue Service has notified such
holder that such holder is no longer subject to backup withholding.
What Number to Give the Depositary: The holder is required to give the
Depositary the social security number or employer identification number of the
record holder of the Shares tendered hereby. 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 guidance on which number to report. If the tendering holder has not
been issued a TIN and has applied for a number or intends to apply for a number
in the near future, the holder should write "Applied For" in the space provided
for the TIN in Part 1, and sign and date the Substitute Form W-9. If "Applied
For" is written in Part I and the Depositary is not provided with a TIN within
60 days, the Depositary will withhold 31% of all payments of the purchase price
to such holder until a TIN is provided to the Depositary.
12
<PAGE>
ALL TENDERING HOLDERS MUST COMPLETE THE FOLLOWING:
PAYER'S NAME: IBJ SCHRODER BANK & TRUST COMPANY
(See Instruction 10)
<TABLE>
<CAPTION>
<S> <C> <C>
SUBSTITUTE PART I--Taxpayer Identification Number-- Social Security Number
Form W-9 Enter taxpayer identification number in the
box at right. (For most individuals, this is ----------------------
For all accounts your social security number. If you do not
have a number, see Obtaining a Number in OR
the enclosed Guidelines.) Certify by signing
and dating below. Note: If the account is in Employer I.D. Number
more than one name, see the chart in the
enclosed Guidelines to determine which
number to give the payer.
DEPARTMENT OF PART II--For Payees Exempt From Backup Withholding, see the enclosed
THE TREASURY Guidelines and complete as instructed therein.
INTERNAL REVENUE
SERVICE CERTIFICATION--Under penalties of perjury, I certify that:
PAYER'S REQUEST (1) The number shown on this form is my correct Taxpayer Identification
FOR TAXPAYER Number, or I am waiting for a number to be issued to me, and
IDENTIFICATION
NUMBER (2) I am not subject to backup withholding either because I have not been
notified by the Internal Revenue Service
(the "IRS") that I am subject to backup
withholding as a result of failure to
report all interest or dividends, or the
IRS has notified me that I am no longer
subject to backup withholding.
</TABLE>
CERTIFICATE INSTRUCTIONS--You must cross out
item (2)above if you have been notified by the
IRS that you are subject to backup withholding
because of under reporting interest or
dividends on your tax return. However, if
after being notified by the IRS that you were
subject to backup withholding you received
another notification from the IRS that you are
no longer subject to backup withholding, do
not cross out item (2). (Also see instructions
in the enclosed Guidelines.)
SIGNATURE:
----------------------------------------------
DATE: , 19
---------------------- --
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE
OFFER.
PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF
TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR
ADDITIONAL DETAILS.
13
<PAGE>
================================================================================
The Information Agent for the Offer is:
MacKenzie Partners, Inc.
(800) 322-2885
(Toll Free)
(212) 929-5500
(Call Collect)
JANUARY 12, 1998
================================================================================
Exhibit (a)(4)
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF OUTSTANDING $3.75 SERIES A PREFERRED STOCK
OF
AMERICAN CAPITAL CORPORATION
PURSUANT TO THE OFFER TO PURCHASE
UP TO 1,100,000 SHARES OF SUCH PREFERRED STOCK
AND CERTAIN OTHER SECURITIES OF AMERICAN CAPITAL CORPORATION
AND TRANSCAPITAL FINANCIAL CORPORATION
DATED JANUARY 12, 1998
BY ALLIANCE Standard II L.L.C. AND ALLIANCE STANDARD II CORP.
As set forth in Section 2 of the Offer to Purchase (as defined below),
this form or one substantially equivalent hereto must be used to accept the
Offer (as defined below) if Share Certificates (as defined below) evidencing the
outstanding shares of $3.75 Series A Preferred Stock (the "Shares," which term
includes Shares evidenced in documentary form ("Share Certificates") and Shares
in book-entry form) of American Capital Corporation, a Florida corporation (the
"Company" or "ACC"), are not immediately available or if the procedure for
book-entry transfer cannot be completed on a timely basis or time will not
permit all required documents to reach the Depositary prior to the Expiration
Date (as defined in the Offer to Purchase). This form may be delivered by hand
to the Depositary or transmitted by telegram, facsimile transmission or mail to
the Depositary and must include a signature guarantee by an Eligible Institution
(as defined in the Offer to Purchase). See Section 2 of the Offer to Purchase.
The Depositary for the Offer is: IBJ SCHRODER BANK & TRUST COMPANY
Address for Delivery By Mail: Address for Delivery By
Box 84, Bowling Green Station Hand/Overnight Courier
New York, New York 10274-0084 One State Street
Attention: Reorganization Department New York, New York 10004
Fax: (212) 858-2611 Attention: Securities Processing
Window, SC-1
Fax: (212) 858-2611
Confirm Fax by Telephone: (212) 858-2103
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS, OR TRANSMISSION OF
INSTRUCTIONS BY A FACSIMILE, OTHER THAN AS SET FORTH ABOVE, DOES NOT CONSTITUTE
A VALID DELIVERY UNLESS WAIVED BY THE PURCHASERS.
This form is not to be used to guarantee signatures. If a signature on
a Letter of Transmittal is required to be guaranteed by an Eligible Institution
under the instructions thereto, such signature guarantee must appear in the
applicable space provided in the signature box on the Letter of Transmittal.
1
<PAGE>
LADIES AND GENTLEMEN:
The undersigned hereby tenders to Alliance Standard II L.L.C., and
Alliance Standard II Corp., (collectively, the "Purchasers"), upon the terms and
subject to the conditions set forth in the Purchasers' Offer to Purchase dated
January 12, 1998 (the "Offer to Purchase") and the related Letter of
Transmittal, receipt of which is hereby acknowledged, the number of Shares(as
such term is defined in the Offer to Purchase) set forth below, all pursuant to
the guaranteed delivery procedures set forth in Section 2 of the Offer to
Purchase.
(PLEASE PRINT)
Amount of Shares
----------------------------------------------------------------
Name(s) of Record Holder(s):
----------------------------------------------------
Certificate Nos. (if available):
------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Address(es):
--------------------------------------------------------------------
(ZIP CODE)
Area Code and Tel. No.:
---------------------------------------------------------
[ ] Check box if Shares will be tendered by Book-Entry transfer through The
Depository Trust Company.
Signature(s):
-------------------------------------------------------------------
- --------------------------------------------------------------------------------
Account Number
------------------------------------------------------------------
- --------------------------------------------------------------------------------
Dated: ________________
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a participant in the Security Transfer Agent's
Medallion Program, the New York Stock Exchange Medallion Signature Guarantee
Program or the Stock Exchange Medallion Program, hereby guarantees to deliver to
the Depositary either the Share Certificates representing the Shares tendered
hereby, in proper form for transfer, or a Book-Entry Confirmation with respect
to such Shares, in any such case together with a properly completed and duly
executed Letter of Transmittal (or facsimile thereof), with any required
signature guarantees, or an Agent's Message, and any other required documents
within three trading days after the date hereof.
2
<PAGE>
The Eligible Institution that completes this form must communicate the
guarantee to the Depositary and must deliver the Letter of Transmittal and Share
Certificates, or a Book-Entry Confirmation, to the Depositary within the time
period shown herein. Failure to do so could result in a financial loss to such
Eligible Institution. All terms used herein have the meanings set forth in the
Offer to Purchase.
(PLEASE PRINT)
Name of Firm:
----------------------------------------------------------------
- --------------------------------------------------------------------------------
(AUTHORIZED SIGNATURE)
Address:
-------------------------------------------------------------------------
(ZIP CODE)
Name:
-------------------------------------------------------------------------
Title:
-------------------------------------------------------------------------
Area Code and Tel. No.:
---------------------------------------------------------
Dated:
--------------------------------------------------------------------------
NOTE: DO NOT SEND SHARE CERTIFICATES WITH THIS NOTICE; SHARE CERTIFICATES SHOULD
BE SENT WITH YOUR LETTER OF TRANSMITTAL.
3
Exhibit (a)(5)
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF OUTSTANDING COMMON STOCK
OF
TRANSCAPITAL FINANCIAL CORPORATION
PURSUANT TO THE OFFER TO PURCHASE
UP TO 3,432,213 SHARES OF SUCH COMMON STOCK
AND CERTAIN SECURITIES OF AMERICAN CAPITAL CORPORATION
DATED JANUARY , 1998
BY ALLIANCE STANDARD II, L.L.C. AND ALLIANCE STANDARD II CORP.
As set forth in Section 2 of the Offer to Purchase (as defined below),
this form or one substantially equivalent hereto must be used to accept the
Offer (as defined below) if Share Certificates evidencing the outstanding Common
Stock of TransCapital Financial Corporation, a Delaware corporation (the
"Company" or "TFC"), together with all rights, powers, privileges and other
incidents of ownership or possession with respect to such shares (collectively,
the "Shares," which term includes Shares evidenced in documentary form ("Share
Certificates") and Shares in book-entry form), are not immediately available or
if the procedure for book-entry transfer cannot be completed on a timely basis
or time will not permit all required documents to reach the Depositary prior to
the Expiration Date (as defined in the Offer to Purchase). This form may be
delivered by hand to the Depositary or transmitted by telegram, facsimile
transmission or mail to the Depositary and must include a signature guarantee by
an Eligible Institution (as defined in the Offer to Purchase). See Section 2 of
the Offer to Purchase.
The Depositary for the Offer is: IBJ SCHRODER BANK & TRUST COMPANY
Address for Delivery By Mail: Address for Delivery By
Box 84, Bowling Green Station Hand/Overnight Courier
New York, New York 10274-0084 One State Street
Attention: Reorganization Department New York, New York 10004
Fax: (212) 858-2611 Attention: Securities Processing
Window, SC-1
Fax: (212) 858-2611
Confirm Fax by Telephone: (212) 858-2103
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS, OR TRANSMISSION OF INSTRUCTIONS BY A
FACSIMILE, OTHER THAN AS SET FORTH ABOVE, DOES NOT CONSTITUTE A VALID DELIVERY
UNLESS WAIVED BY THE PURCHASERS.
This form is not to be used to guarantee signatures. If a signature on
a Letter of Transmittal is required to be guaranteed by an Eligible Institution
under the instructions thereto, such signature guarantee must appear in the
applicable space provided in the signature box on the Letter of Transmittal.
1
<PAGE>
LADIES AND GENTLEMEN:
The undersigned hereby tenders to Alliance Standard II, L.L.C., and
Alliance Standard II Corp., (collectively, the "Purchasers"), upon the terms and
subject to the conditions set forth in the Purchasers' Offer to Purchase dated
January , 1998 (the "Offer to Purchase") and the related Letter of Transmittal,
receipt of which is hereby acknowledged, the number of Shares (as such term is
defined in the Offer to Purchase) set forth below, all pursuant to the
guaranteed delivery procedures set forth in Section 2 of the Offer to Purchase.
(PLEASE PRINT)
Amount of Shares
----------------------------------------------------------------
Name(s) of Record Holder(s):
----------------------------------------------------
Certificate Nos. (if available):
------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Address(es):
--------------------------------------------------------------------
(ZIP CODE)
Area Code and Tel. No.:
---------------------------------------------------------
[ ] Check box if Shares will be tendered by Book-Entry transfer through The
Depository Trust Company.
Signature(s):
-------------------------------------------------------------------
- --------------------------------------------------------------------------------
Account Number
------------------------------------------------------------------
- --------------------------------------------------------------------------------
Dated: ________________
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a participant in the Security Transfer Agent's
Medallion Program, the New York Stock Exchange Medallion Signature Guarantee
Program or the Stock Exchange Medallion Program, hereby guarantees to deliver to
the Depositary either the Share Certificates representing the Shares tendered
hereby, in proper form for transfer, or a Book-Entry Confirmation with respect
to such Shares, in any such case together with a properly completed and duly
executed Letter of Transmittal (or facsimile thereof), with any
2
<PAGE>
required signature guarantees, or an Agent's Message, and any other required
documents within three trading days after the date hereof.
The Eligible Institution that completes this form must communicate the
guarantee to the Depositary and must deliver the Letter of Transmittal and Share
Certificates to the Depositary within the time period shown herein. Failure to
do so could result in a financial loss to such Eligible Institution. All terms
used herein have the meanings set forth in the Offer to Purchase.
(PLEASE PRINT)
Name of Firm:
----------------------------------------------------------------
- --------------------------------------------------------------------------------
(AUTHORIZED SIGNATURE)
Address:
-------------------------------------------------------------------------
(ZIP CODE)
Name:
-------------------------------------------------------------------------
Title:
-------------------------------------------------------------------------
Area Code and Tel. No.:
---------------------------------------------------------
Dated:
--------------------------------------------------------------------------
NOTE: DO NOT SEND SHARE CERTIFICATES WITH THIS NOTICE; SHARE CERTIFICATES SHOULD
BE SENT WITH YOUR LETTER OF TRANSMITTAL.
3
Exhibit (a)(6)
IBJ Schroder Bank & Trust Company
New York, New York 10004
Notice to Brokers, et al. Regarding the Offer to Purchase for Cash:
Up to $30,000,000 Principal Amount of Outstanding
8.40% Subordinated Notes Due 1993
of
American Capital Corporation
At a Price of $100 Flat per $1000 Principal Amount,
Up to 1,100,000 Outstanding Shares of $3.75 Series A Preferred Stock
of
American Capital Corporation
At a Price of $0.50 Net per Preferred Share,
And
Up to 1,950,000 Outstanding Shares of Common Stock
of
TransCapital Financial Corporation
At a Price of $1.00 Net per Share
By
Alliance Standard II L.L.C. and Alliance Standard II Corp.
- --------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON FRIDAY, FEBRUARY 13, 1998,
UNLESS THE OFFER IS EXTENDED.
- --------------------------------------------------------------------------------
To Brokers, Dealers, Commercial Banks, Trust Companies
and Other Nominees:
We have been appointed to act as Depositary in connection with the
offer by Alliance Standard II L.L.C. and Alliance Standard II Corp.
(collectively, the "Purchasers"), to purchase the amounts of securities
described above (collectively, the "Securities") issued by American Capital
Corporation, a Florida corporation ("ACC") and TransCapital Financial
Corporation, a Delaware corporation ("TFC," and, collectively with ACC, the
"Companies"), at the prices set forth above, net to the seller in cash, upon the
terms and subject to the conditions set forth in the Offer to Purchase for Cash,
dated January 12, 1998 (the "Offer to Purchase"), and in the related Letters of
Transmittal (which collectively constitute the "Offer").
We enclose copies of the following documents:
1. The Offer to Purchase;
1
<PAGE>
2. Three color-coded forms of Letter of Transmittal to be used by
holders of the several Securities in accepting the Offer, as follows:
Blue -- The Notes issued by ACC.
Yellow -- The Preferred Shares issued by ACC.
Pink -- The Common Shares issued by TFC.
3. A printed form of letter which you may send to your clients for
whose accounts you hold Securities in your name or in the name of your nominee,
with space provided for obtaining such clients' instructions with regard to the
Offer;
4. Three color-coded forms of Notice of Guaranteed Delivery to be used
to accept the Offer if certificates evidencing the Securities and all other
required documents cannot be delivered to the Depositary by the Expiration Date
(as defined in the Offer to Purchase), as follows:
Gray -- The Notes issued by ACC.
Green -- The Preferred Shares issued by ACC.
White -- The Common Shares issued by TFC.
5. Guidelines of the Internal Revenue Service for certification of
Taxpayer Identification Number on Substitute Form W-9; and
6. A return envelope addressed to the Depositary.
Your prompt action is requested. We urge you to contact your clients
as promptly as possible. The Offer and withdrawal rights will expire at 12:00
Midnight, New York City time, on Friday, February 13, 1998, unless extended.
The Offer is conditioned upon, among other things, the absence
(immediately prior to the Expiration Date) of any pending or threatened legal
actions or proceedings that would, in the absolute judgment of the Purchasers,
prohibit the Offer or have a material adverse effect on the assets, business or
prospects of the Companies or the outcome of the Action (as defined in the
Offer).
In order to take advantage of the Offer, a duly executed and properly
completed Letter of Transmittal and any signature guarantees or other required
documents should be sent to the Depositary, and certificates representing the
tendered Securities should be delivered to the Depositary, all in accordance
with the instructions set forth in the Letters of Transmittal and the Offer to
Purchase.
If holders of Securities wish to tender, but it is impracticable for
them to forward their certificates prior to the Expiration Date or to comply
with the book-entry transfer procedures on a timely basis, a tender may be
effected by following the guaranteed delivery procedures specified in "Section
2, Procedures for Tendering Notes and Shares" in the Offer to Purchase.
The Purchasers will pay soliciting dealer's fees of $2.00 per $1,000
principal amount of Notes, $0.05 per ACC Preferred Share and $0.10 per TFC
Common Share to brokers, dealers and other persons for soliciting tenders of
Notes and Shares from their clients pursuant to the Offer. The Purchasers will
reimburse you for customary mailing and handling
2
<PAGE>
expenses incurred by you in forwarding any of the enclosed materials to your
clients. The Purchasers will pay or cause to be paid any transfer taxes payable
on the transfer of Securities to it, except as otherwise provided in Instruction
6 of the Letters of Transmittal.
Additional copies of the enclosed materials may be obtained from
MacKenzie Partners, Inc., the Information Agent.
Any inquiries you may have with respect to the Offer should be
addressed to the Information Agent at its address and telephone number set forth
on the back cover of the Offer to Purchase.
Very truly yours,
IBJ SCHRODER BANK & TRUST COMPANY
---------------------------
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR
ANY PERSON AS AN AGENT OF THE DEPOSITARY, THE PURCHASERS, ANY AFFILIATES OF THE
PURCHASERS, OR THE INFORMATION AGENT, OR AUTHORIZE YOU OR ANY OTHER PERSON TO
MAKE ANY STATEMENTS ON BEHALF OF ANY OF THEM WITH RESPECT TO THE OFFER, EXCEPT
FOR STATEMENTS EXPRESSLY MADE IN THE OFFER TO PURCHASE OR THE LETTER OF
TRANSMITTAL.
3
Exhibit (a)(7)
Regarding the Offer to Purchase for Cash:
Up to $30,000,000 Principal Amount of Outstanding
8.40% Subordinated Notes Due 1993
of
American Capital Corporation
At a Price of $100 per $1000 Principal Amount
Up to 1,100,000 Outstanding Shares of $3.75 Series A Preferred Stock
of
American Capital Corporation
At a Price of $0.50 Net per Preferred Share
And
Up to 1,950,000 Outstanding Shares of Common Stock
of
TransCapital Financial Corporation
At a Price of $1.00 Net per Share
By
Alliance Standard II L.L.C. and Alliance Standard II Corp.
- --------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON FRIDAY, FEBRUARY 13, 1998,
UNLESS THE OFFER IS EXTENDED.
- --------------------------------------------------------------------------------
To our Clients:
Enclosed for your consideration is an Offer to Purchase for Cash dated
January 12, 1998, and color-coded Letters of Transmittal (which together
constitute the "Offer") relating to an offer by Alliance Standard II L.L.C.
("Purchaser LLC") and Alliance Standard II Corp. ("Purchaser Corp.," and
collectively with Purchaser LLC, the "Purchasers"), to purchase the following
securities (the "Securities"):
Up to $30,000,000 aggregate principal amount of outstanding 8.40%
Subordinated Notes Due 1993 (the "Notes," which term is more
fully defined in the Offer to Purchase) of American Capital
Corporation, a Florida corporation ("ACC"), at a price of $100
per $1000 Principal Amount, without any additional payment for
accrued but unpaid interest;
Up to 1,100,000 Outstanding Shares (the "ACC Preferred Shares,"
which term is more fully defined in the Offer to Purchase) of
$3.75
1
<PAGE>
Series A Preferred Stock of ACC at $0.50 Net per ACC Preferred
Share; and
Up to 1,950,000 Outstanding Shares (the "TFC Common Shares",
which term is more fully defined in the Offer to Purchase, and
collectively with the ACC Preferred Shares, the "Shares") of
Common Stock of TransCapital Financial Corporation ("TFC") at
$1.00 Net per TFC Common Share.
The Offer for the Notes and Shares is net to the seller in cash,
without interest thereon (the "Offer Price"), upon the terms and subject to the
conditions set forth in the Offer to Purchase and in the related Letters of
Transmittal (which, as amended from time to time, together constitute the
"Offer"). A tender of such Notes or Shares by you can be made only through us on
your behalf, and pursuant to your instructions. The Letters of Transmittal are
furnished to you for your information only and cannot be used by you to tender
Shares held by us for your account.
We are hereby requesting instructions as to whether you wish to tender
any or all of your Shares held by us for your account upon the terms and subject
to the conditions set forth in the Offer. Your attention is invited to the
following:
1. The tender prices are, net to the seller in cash, :
o $100 flat per $1,000 Principal Amount of Notes;
o $0.50 per ACC Preferred Share; and
o $1.00 per TFC Common Share.
2. The Offer and withdrawal rights will expire at 12:00 Midnight, New
York City time, on Friday, February 13, 1998, unless extended (the
"Expiration Date").
3. The Offer is being made for:
o up to $30,000,000 principal amount of the Notes;
o up to 1,100,000 ACC Preferred Shares; and
o up to 1,950,000 TFC Common Shares.
4. The Offer is conditioned upon, among other things, the requirement
that there shall not have occurred any decision, action, development, event
or other circumstance in the Action (as defined in the Offer to Purchase)
or in any legal proceeding based upon similar factual or legal allegations,
including, without limitation, any action seeking damages against the
United States of America in connection with "supervisory goodwill"
accounting for financial institutions, which in the sole judgment of the
Purchasers could have an adverse effect on the Notes or Shares or the
Purchasers' eventual recovery with respect thereto, or the FDIC shall have
issued receiver's certificates or other similar documents to any holder of
any claim with respect to Transohio Savings Bank, including TFC.
2
<PAGE>
5. Holders who tender Shares will not be obligated to pay brokerage
fees or commissions or, except as set forth in Instruction 6 of the Letter
of Transmittal, transfer taxes on the purchase of Shares by the Purchaser
pursuant to the Offer.
The foregoing is a summary of certain provisions of the Offer and is
qualified in its entirety by reference to the Offer.
If you wish to have us tender any or all of the Shares held by us for
your account, you should so instruct us by completing, executing and returning
to us the instruction form set forth on the following page hereof and forward
the same to us in ample time to permit us to submit a tender on your behalf
prior to the expiration of the Offer. The Offer is not being made to, nor will
tenders be accepted from or on behalf of, holders of Shares in any jurisdiction
is which the making or acceptance of the Offer would not be in compliance with
the laws of such jurisdiction.
3
<PAGE>
Instructions with Respect to the Offer to Purchase
for Cash:
Up to $30,000,000 Principal Amount of Outstanding
8.40% Subordinated Notes Due 1993
of
American Capital Corporation
At a Price of $100 per $1000 Principal Amount,
Up to 1,100,000 Outstanding Shares of $3.75 Series A Preferred Stock
of
American Capital Corporation
At a Price of $0.50 Net per Preferred Share,
And
Up to 1,950,000 Outstanding Shares of Common Stock
of
TransCapital Financial Corporation
At a Price of $1.00 Net per Share
By
Alliance Standard II L.L.C. and Alliance Standard II Corp.
The undersigned acknowledge(s) receipt of your letter and the enclosed
Offer to Purchase for Cash dated January 12, 1998, and the related Letters of
Transmittal (which together constitute the "Offer") relating to an offer by
Alliance Standard II L.L.C. and Alliance Standard II Corp. (collectively, the
"Purchasers"), regarding the offer to purchase for cash:
Up to $30,000,000 aggregate principal amount of outstanding 8.40%
Subordinated Notes Due 1993 (the "Notes," which term is more
fully defined in the Offer to Purchase) of American Capital
Corporation, a Florida corporation ("ACC"), at a price of $100
per $1000 Principal Amount, without any additional payment for
accrued but unpaid interest;
Up to 1,100,000 Outstanding Shares (the "ACC Preferred Shares,"
which term is more fully defined in the Offer to Purchase) of
$3.75 Series A Preferred Stock of ACC at $0.50 Net per ACC
Preferred Share; and
Up to 1,950,000 Outstanding Shares (the "TFC Common Shares,"
which term is more fully defined in the Offer to Purchase) of
Common Stock of TransCapital Financial Corporation ("TFC") at
$1.00 Net per TFC Common Share.
The Offer is net to the seller in cash, without interest thereon, upon the terms
and subject to the conditions set forth in the Offer to Purchase and in the
related Letters of Transmittal (which, as amended from time to time, together
constitute the "Offer").
4
<PAGE>
This will instruct you to tender the amount of Notes, ACC Preferred
Shares and/or TFC Common Shares indicated below held by you for the account of
the undersigned, on the terms and subject to the conditions set forth in the
Offer.
<TABLE>
<CAPTION>
Principal Amount of Notes to be Tendered:* Amount of ACC Preferred Shares
to be Tendered*:
$ ACC Preferred Shares
<S> <C>
------------------------------------------- -----------------------------
*Unless otherwise indicated, all Notes shall *Unless otherwise indicated, all ACC
be tendered. Preferred Shares shall be tendered.
Amount of Common Shares to be
Tendered:
Shares
- -------------------------------------------
*Unless otherwise indicated, all Shares shall
be tendered.
Sign Here: Print Name and Address:
- ------------------------------------- ---------------------------
- ------------------------------------- ---------------------------
Dated:
------------------------------- ---------------------------
</TABLE>
5
Exhibit (a)(8)
<TABLE>
<CAPTION>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
Guidelines for Determining the Proper Identification Number to Give the Payer. - Social Security numbers
have nine digits separated by two hyphens: i.e. 000-00-0000. Employer Identification numbers have nine digits
separated by only one hyphen: i.e. 00-0000000. The table below will help determine the number to give the
payer.
Give the Give the EMPLOYER
For this type of account: SOCIAL SECURITY For this type of account: IDENTIFICATION
number of -- number of --
- ----------------------------- ------------------------ ------------------------------ ---------------------------
<S> <C> <C> <C> <C>
1. An individual's account The individual 7. Corporate account The corporation
2. Two or more The actual owner of 8. Religious, charitable, or The organization
individuals (joint the account or, if educational organization
account) combined funds, any account
one of the
individuals(1)
3. Custodian account of a The minor(2) 9. Partnership account held The partnership
minor (Uniform Gift to in the name of the
Minors Act) business
4. a. The usual The grantor-trustee(1) 10. Association, club, or The organization
revocable savings other tax-exempt
trust account organization
(grantor is also
trustee)
b. So-called trust The actual owner(1)
account that is not
a legal or valid
trust under State
law
5. Sole proprietorship The owner(4) 11. A broker or registered The broker or nominee
account nominee
6. A valid trust, estate, or The legal entity (Do 12. Account with the The public entity
pension trust not furnish the Department of
identifying number of Agriculture in the name
the personal of a public entity (such
representative or as a State or local
trustee unless the legal government, school
entity itself is not district, or prison) that
designated in the receives agricultural
account title.)(5) 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's social security number.
(3) Show the name of the owner.
(4) List first and circle the name of the legal trust, estate, or pension trust.
Note: If no name is circled when there is more than one name, the number will
be considered to be that of the first name listed.
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER 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 payments of interest and dividends include the following:
o A corporation.
o A financial institution.
o An organization exempt from tax under section 501(a), or an individual
retirement plan.
o The United States or any agency or instrumentality
thereof.
o A State, the District of Columbia, a possession of the United States, or
any subdivision or instrumentality thereof.
o A foreign government, a political subdivision of a foreign government, or
any agency or instrumentality thereof.
o An international organization or any agency or
instrumentality thereof.
o A registered dealer in securities or commodities
registered in the U.S. or a possession of the U.S.
o A real estate investment trust.
o A common trust fund operated by a bank under section
584(a)
o An exempt charitable remainder trust, or a non-exempt trust described in
section 4947(a)(1).
o An entity registered at all times under the Investment Company Act of
1940.
o A foreign central bank of issue.
Payments of dividends and patronage dividends not generally subject to
backup withholding include the following:
o Payments to nonresident aliens subject to withholding
under section 1441.
o Payments to partnerships not engaged in a trade or
business in the U.S. and which have at least one
nonresident partner.
o Payments of patronage dividends where the amount
received is not paid in money.
o Payments made by certain foreign organizations.
Payments of interest not generally subject to backup withholding include
the following:
o 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.
o Payments of tax-exempt interest (including exempt interest dividends under
section 852).
o Payments described in section 6049(b)(5) to nonresident
aliens.
o Payments on tax-free covenant bonds under section 1451.
o Payments made by certain foreign organizations.
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, SIGN AND DATE THE
FORM AND RETURN IT TO THE PAYER.
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 sections 6041, 6041A(a), 6042, 6044, 6045, 6049,
6050A and 6050N and their regulations.
Privacy Act Notice - Section 6109 requires most recipients of dividend,
interest, or other payments 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. Payers must generally withhold 31% of taxable
interest, dividend, and certain other payments to a payee who does not furnish a
taxpayer identification number to a payer. Certain 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) 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.
(3) 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
Exhibit (a)(9)
This announcement is neither an offer to purchase nor a solicitation of an offer
to sell the Notes or Shares described below. The Offer is made solely by the
Offer to Purchase, dated January 12, 1998, and the related Letters of
Transmittal, and is neither being made to, nor will tenders be accepted from or
on behalf of, holders of Notes or Shares residing in any jurisdiction in which
the making of the Offer or acceptance thereof would not be in compliance with
the securities, blue sky or other laws of such jurisdiction. In those
jurisdictions where the laws require the Offer to be made by a licensed broker
or dealer, the Offer shall be deemed to be made on behalf of the Purchasers by
one or more registered brokers or dealers licensed under the laws of such
jurisdictions.
Notice of Offer to Purchase for Cash:
Up to $30,000,000 Principal Amount of Outstanding
8.40% Subordinated Notes Due 1993
Of
American Capital Corporation
at a Price of
$100 Net per $1,000 Principal Amount of Notes,
Up to 1,100,000 Outstanding Shares of
$3.75 Series A Preferred Stock
Of
American Capital Corporation
at a Price of
$0.50 Net per Preferred Share,
And
Up to 1,950,000 Outstanding Shares of Common Stock
Of
Transcapital Financial Corporation
at a Price of
$1.00 Net per Common Share,
By
Alliance Standard II L.L.C.
And
Alliance Standard II Corp.
Alliance Standard II L.L.C. ("Purchaser L.L.C."), a Delaware limited liability
company wholly owned by LJ Investments, L.L.C., a Delaware limited liability
company, and Alliance Standard II Corp. ("Purchaser Corp.," and collectively
with Purchaser LLC, the
<PAGE>
"Purchasers"), a British Virgin Islands corporation wholly owned by LJ
Investments Corp., a British Virgin Islands corporation, hereby offer to
purchase:
(i) up to $30,000,000 aggregate principal amount of outstanding
8.40% Subordinated Notes due 1993 (the "Notes") of American
Capital Corporation, a Florida corporation ("ACC"), at a price
of $100 per $1,000 principal amount of Notes (including any
accrued interest thereon),
(i) up to 1,100,000 outstanding shares of Series A Preferred
Stock, $1.00 par value (the "ACC Preferred Shares") of ACC, at
a price of $0.50 per ACC Preferred Share, and
(i) up to 1,950,000 outstanding shares of Common Stock, par value
$1.00 per share (the "TFC Common Shares" and together with the
ACC Preferred Shares, the "Shares") of TransCapital Financial
Corporation, a Delaware corporation ("TFC" and together with
ACC, the "Companies"), at a price of $1.00 per TFC Common
Share,
net to the seller in cash, without interest thereon (the "Offer Price"), upon
the terms and subject to the conditions set forth in the Offer to Purchase and
in the three related Letters of Transmittal (which, as amended from time to
time, collectively constitute the "Offer").
----------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT
12:00 MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY,
FEBRUARY 13, 1998, UNLESS THE OFFER IS EXTENDED.
----------------------------------------------
The Offer is conditioned upon, among other things, the requirement
that there shall not have occurred any decision, action, development, event or
other circumstance in the Action (as defined in the Offer to Purchase) or in any
legal proceeding based upon similar factual or legal allegations, including,
without limitation, any action seeking damages against the United States of
America in connection with "supervisory goodwill" accounting for financial
institutions, which in the sole judgment of the Purchasers could have an adverse
effect on the Notes or Shares or the Purchasers' eventual recovery with respect
thereto, or the FDIC shall have issued receiver's certificates or other similar
documents to any holder of any claim with respect to Transohio Savings Bank,
including TFC.
For purposes of the Offer, the Purchasers will be deemed to have
accepted for payment, and thereby purchased, up to $30,000,000 aggregate
principal amount of Notes, up to 1,100,000 ACC Preferred Shares and up to
1,950,000 TFC Common Shares validly tendered to the Purchasers and not withdrawn
only as, if and when the Purchasers give oral or written notice to the
Depositary (as defined in the Offer to Purchase) of the Purchasers' acceptance
for payment of such Notes and Shares. Payment for Notes and Shares accepted for
payment pursuant to the Offer will be made by deposit of the purchase price
therefor with the Depositary, which will act as agent for validly tendering
holders for the purpose of receiving payment from the Purchasers and
transmitting payment to tendering holders. UNDER NO CIRCUMSTANCES WILL INTEREST
BE PAID
<PAGE>
ON THE PURCHASE PRICE OF THE NOTES AND SHARES TO BE PAID BY THE PURCHASERS,
REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY DELAY IN MAKING SUCH PAYMENT.
Upon the deposit of funds with the Depositary for the purpose of making payments
to tendering holders, the Purchasers' obligations to make such payments shall be
satisfied and tendering holders must thereafter look solely to the Depositary
for payment of amounts owed to them by reason of the acceptance for payment of
Notes and Shares pursuant to the Offer. If the Purchasers are delayed in the
acceptance for payment of or payment for Notes or Shares or are unable to accept
for payment or pay for Notes or Shares pursuant to the Offer for any reason,
then, without prejudice to the Purchasers' rights under the Offer (but subject
to compliance with Rule 14e-l(c) under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), the Depositary may, nevertheless, on behalf of the
Purchasers, retain tendered Notes or Shares, and such Notes or Shares may not be
withdrawn except to the extent tendering holders are entitled to exercise, and
duly exercise, withdrawal rights as described in Section 3 of the Offer to
Purchase. If any tendered Notes or Shares are not purchased pursuant to the
Offer for any reason, Definitive Notes or Share Certificates (as each such term
is defined in the Offer to Purchase) for any such unpurchased Notes or Shares
will be returned, without expense to the tendering holder (or, in the case of
Notes or Shares delivered by book-entry transfer of such Notes or Shares into
the Depositary's account at the Book-Entry Transfer Facility (as defined in the
Offer to Purchase) pursuant to the procedure set forth in Section 2 of the Offer
to Purchase, such Notes or Shares will be credited to an account maintained at
the Book-Entry Transfer Facility), as promptly as practicable after the
expiration, termination or withdrawal of the Offer. Notwithstanding the
foregoing, if (i) a portion of the Notes or Shares represented by a tendered
Definitive Note or Share Certificate, as applicable, has been tendered and a
portion has not been tendered, or a portion has been accepted for payment and a
portion has not been accepted for payment, and (ii) the trustee for the Notes
or, with respect to Shares, the issuing Company's transfer agent, cannot or will
not reissue Definitive Notes or Share Certificates representing any such Notes
or Shares, then the Purchasers will provide to the tendering holder a
certificate of beneficial interest in the Notes or Shares, as applicable, that
were not accepted for payment.
Tenders of Notes and Shares made pursuant to the Offer are
irrevocable, except that Notes and Shares tendered pursuant to the Offer may be
withdrawn pursuant to the procedures set forth in the Offer to Purchase at any
time on or prior to the Expiration Date (as defined in the Offer to Purchase) of
the Offer and, unless theretofore accepted for payment and paid for by
Purchasers, may also be withdrawn after March 16, 1998 (or such later date as
may apply in case the Offer is extended). The Offer shall expire on February 13,
1998, the initial Expiration Date; provided, however, that the Purchasers may
extend the Expiration Date if any of the conditions set forth in the Offer to
Purchase has not been met by giving oral (followed by written confirmation) or
written notice of such extension to the Depositary and making public
announcement thereof no later than 9:00 a.m., New York City time, on the next
business day after the previously scheduled expiration date. For a withdrawal to
be effective, a written, telegraphic or facsimile transmission notice of
<PAGE>
withdrawal must be timely received by the Depositary at one of its addresses set
forth on the back cover of the Offer to Purchase and must specify the name of
the person having tendered the Notes or Shares to be withdrawn, the principal
amount of Notes or the number of Shares to be withdrawn and the name of the
registered holder of the Notes or Shares to be withdrawn, if different from the
name of the person who tendered the Notes or Shares. If Definitive Notes or
Share Certificates have been delivered or otherwise identified to the
Depositary, then, prior to the physical release of such Definitive Notes or
Share Certificates, the serial numbers shown on such Definitive Notes or Share
Certificates must be submitted to the Depositary and, unless such Notes or
Shares have been tendered by an Eligible Institution (as defined in the Offer to
Purchase), the signatures on the notice of withdrawal must be guaranteed by an
Eligible Institution. If Notes or Shares have been delivered pursuant to the
procedure for book-entry transfer as set forth in Section 2 of the Offer to
Purchase, any notice of withdrawal must also specify the name and number of the
account at the Book-Entry Transfer Facility to be credited with the withdrawn
Notes or Shares and otherwise comply with the Book-Entry Transfer Facility's
procedures.
The information required to be disclosed by Rule 14d-6(e)(1)(vii) of
the General Rules and Regulations under the Exchange Act is contained in the
Offer to Purchase and is incorporated herein by reference.
In accordance with its rights under Section 14(d) of the Exchange Act
and the regulations thereunder, Purchasers have requested a list of holders of
ACC Preferred Stock from ACC, and a list of holders of TFC Common Stock from
TFC. The Offer to Purchase and the related Letter of Transmittal and, if
required, other relevant materials will be mailed to known record holders of ACC
Preferred Stock and TFC Common Stock and, upon receipt of such list, to all such
record holders, and will be furnished to brokers, dealers, commercial banks,
trust companies and similar persons whose names appear or whose nominees appear
on such lists or, if applicable, who are listed as participants in a clearing
agency's security position listing for subsequent transmittal to beneficial
owners of ACC Preferred Stock and the TFC Common Stock.
The Offer to Purchase and the related Letters of Transmittal contain
important information which holders of Notes and Shares are urged to review
carefully before making any decision with respect to the Offer.
Requests for copies of the Offer to Purchase, the Letters of
Transmittal and other tender offer materials may be directed to the Information
Agent named below and copies will be furnished promptly at the Purchasers'
expense. The Purchasers will pay soliciting dealer's fees of $2.00 per $1,000
principal amount of Notes, $0.05 per ACC Preferred Share and $0.10 per TFC
Common Share to brokers, dealers and other persons for soliciting tenders of
Notes and Shares from their clients pursuant to the Offer.
<PAGE>
MACKENZIE
PARTNERS, INC
156 Fifth Avenue, 9th Floor
New York, New York 10010
(212) 929-5500 (call collect)
or
CALL TOLL-FREE (800) 322-2885
January 13, 1998
EXHIBIT (c)(1)
FILING AGREEMENT
This Agreement, dated as of January 12, 1998, between Alliance
Standard II L.L.C., a Delaware limited liability company, and Alliance Standard
II Corp., a British Virgin Islands corporation ("Purchaser Corp."),
W I T N E S S E T H T H A T:
WHEREAS, each of the parties hereto desires to participate in a tender
offer to acquire up to $30,000,000 principal amount of outstanding 8.40%
Subordinated Notes due 1993 (the "Notes") of American Capital Corporation, a
Florida corporation ("ACC"), up to 1,100,000 outstanding shares of $3.75 Series
A Preferred Stock, $1.00 par value(the "ACC Preferred Shares") of ACC, and up to
1,950,000 shares of Common Stock, par value $1.00 per share (together with the
ACC Preferred Shares, the "Shares") of TransCapital Financial Corporation, a
Delaware corporation, and
WHEREAS, the parties have not yet determined the allocation between
themselves of such Notes and Shares, and
WHEREAS, Purchaser Corp. desires to hold any Notes and Shares purchased
by it solely for passive investment purposes,
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. The parties shall jointly file a Tender Offer Statement on
Schedule 14D-1, concurrently issue the Offer to Purchase
contained therein and make the Offer.
2. The parties will allocate between themselves at the time of the
acceptance of Notes and Shares for payment any Notes or Shares
purchased pursuant to the Offer. Each party will pay for and own
separately the Notes and Shares allocated to it.
3. Each party will bear its own expenses in connection with the
Offer.
4. The Purchasers have reserved the right to make independent
determinations with respect to all matters requiring their
determination in connection with the above conditions.
5. Each party will be entitled to retain any profit, and will be
obligated to bear any loss incurred by it with respect to the
Notes and Shares owned by it.
6. At the time of payment for Notes and Shares all collective
action by the parties hereto shall cease, neither party hereto
shall act for the other in any capacity and each party shall
be permitted to take any actions with respect
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to the Notes and Shares owned by it deemed necessary or
appropriate by such party.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first set forth above.
Alliance Standard II L.L.C. Alliance Standard II Corp.
By: LJ Investments, L.L.C., its
managing member
By: JL Advisors II, LLC, its
managing member
By: ______________________________
Keith R. Bish, Director
By: ____________________________
Michael L. Lewittes,
Member
By: Jaffe Capital Management Group,
LLC, member
By: _____________________________
Robert S. Jaffe, Member
II-2
EXHIBIT (c)(2)
JL Advisors, LLC
520 Madison Avenue
New York, New York
December 1, 1997
Collectible Certificates LLC
Gentlemen:
This letter will set forth the agreement between us.
JL Advisors, LLC ("JL") intends to create, from time to time, entities
which will invest (by way of tender for shares, or otherwise) in shares or other
interests (the "Interests") of existing or formerly existing entities that have
asserted either directly, or derivatively, claims for breach of contract against
the United States, or agencies thereof, in connection with so called bank
"goodwill" accounting cases.
Collectible Certificates LLC ("Collectible") and its principal,
Richard Macary ("Macary") have expertise in these so called "goodwill" cases,
and is desirous of consulting with and advising JL, and its designees, in (i)
the acquisition of the Interests, (ii) the subsequent ownership and management
of the entities which acquire the Interests, and (iii) the operation of the
entities to which the Interest relate; (the activities described in (i), (ii)
and (iii), above, are hereinafter referred to individually as "Acquisition
Activities", "Ownership and Management Activities" and "Operating Activities",
respectively, and are hereinafter collectively referred to as "Activities").
We have agreed as follows, in connection with the foregoing:
1. JL will form one or more entities (the "JL Vehicle(s)") to engage
in the Activities. JL presently intends to create, (as the "Initial JL
Vehicle"), a Delaware limited liability company. All interests in the Initial JL
Vehicle, and any other JL Vehicle, will be controlled by JL. Collectible will
reimburse JL for the legal and other costs of organizing the Initial JL Vehicle
and those incurred in connection with the preparation of this Agreement.
2. Collectible will cause its principal, Macary, to consult with and
advise JL and the JL Vehicle(s) with respect to the Activities. (Such advice and
consultation is
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hereinafter referred to as the "Collectible Consultation".) Macary agrees that
he shall provide all services required in connection with, and related to, the
Collectible Consultation.
3. The term of the Collectible Consultation shall commence on the date
hereof, and shall terminate on November 30, 1998 with respect to Acquisition
Activities. Until November 30, 1998, (but subject to the provisions of Paragraph
5C, below), JL, Collectible and Macary shall present to one another all
opportunities coming to their respective attention for the acquisition of
Interests. The Collectible Consultation shall continue with respect to Ownership
and Management Activities and Operating Activities so long as any JL Vehicle
shall retain all or any portion of an Interest.
4. During the period from the date hereof through November 30, 1998,
other than the sale of a children's book/publishing deal, Macary shall devote
his full time and attention to the Activities, and shall engage in no other
business, employment, or competing activity in connection with the so called
"goodwill" cases. Commencing December 1, 1998, and whether or not this Agreement
remains in full force and effect, for so long as JL or a JL Vehicle shall own
all or any portion of an Interest, Macary shall devote so much time as is
reasonably necessary to Ownership and Management Activities and Operating
Activities.
5. A. From the date hereof through November 30, 1998, Collectible
shall receive "Basic Compensation" at the rate of $100,000 per annum, payable
monthly in arrears. No Basic Compensation shall be due or payable on account of
any services rendered in connection with the Collectible Consultation after
November 30, 1998.
B. In addition to such Basic Compensation, Collectible shall
receive,as "Additional Compensation," 7 1/2% of the "Realized Net Profits," such
amountto be determined and paid as provided in this section 5(b).
i. The term "Realized Net Profits" shall be determined on a
cumulative basis and, as of any date, shall mean:
(1)(1)all gross receipts actually received from the date
hereof to such date by all JL Vehicles on a combined basis without double
counting on account of the acquisition, ownership and disposition by JL Vehicles
of Interests, less
(2)(2) the sum without double counting of:
(a)(a) all capital investment made from the date
hereof to such date by all JL Vehicles on a combined basis in acquiring
Interests from the date hereof to such date,
(b)(b) all expenses incurred from the date hereof to
such date by JL or any JL Vehicle on a combined basis in connection with the
acquisition, ownership
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<PAGE>
or disposition of Interests, including but not limited to all Basic
Compensation, acquisition costs, travel expenses and legal, accounting and other
professional fees and expenses,
(c)(c) interest calculated at overnight LIBOR in
effect from time to time, on the amounts described in sections 5(b)(i)(2)(a) and
(b) hereof, in the case of each such amount, from the date such amount is
expended until the date such amount is recouped by JL or its financing sources
ii. JL shall calculate Realized Net Profits as of the end of each
calendar year as promptly as practicable following the end of each calendar year
for so long as any JL Vehicle owns any Interests. JL's accountants shall certify
such calculation as having been made in accordance with the terms of this
agreement. As soon as available, JL shall furnish to Collectible a schedule
showing such calculation, a copy of the accountant's certificate (such
certificate and schedule hereinafter referred to as the "Realized Net Profit
Certificate and Schedule") and, if such calculation shows that Additional
Compensation is due to Collectible, a check in the amount of such Additional
Compensation. Conversely, if such schedule shall show Collectible has received
an overpayment of Additional Compensation (i.e., that all amounts of Additional
Compensation theretofore received by Collectible hereunder exceed 7-1/2% of
Realized Net Profits as of the end of such prior fiscal year), Collectible shall
promptly remit such the amount of such overpayment to JL.
The calculation by JL's accountant with respect to Realized Net
Profits for a given year shall be binding and conclusive upon, and deemed
accepted by, Collectible unless Collectible shall have notified JL in writing of
any objections thereto consistent with the provisions of this Section within 20
days after receipt of the Realized Net Profit Schedule and Certificate for that
year. The written notice under this Section (the "Realized Net Profits Objection
Letter") shall specify in reasonable detail each item on the relevant Realized
Net Profit Schedule and Certificate that Collectible disputes, and a summary of
Collectible's reasons for such dispute.
Disputes between Collectible and JL relating to Realized Net Profits
which cannot be resolved by them within 20 days after receipt by JL of a
Realized Net Profits Objection Letter may be referred no later than 20 days
after such receipt for decision at the insistence of either party to Price
Waterhouse ("PW"). If PW accepts the appointment, it shall be the "Auditor." If
PW does not accept the appointment, the parties shall request PW to designate
one or more independent nationally recognized accounting firms to act as
Auditor, until an Auditor is selected. If PW declines to make such
designation(s), or if its designee(s) shall not accept the appointment, then the
American Arbitration Association (New York City) shall select the Auditor. Prior
to referring the matter to the Auditor, the parties shall agree on the
procedures to be followed by the Auditor (including procedures with regard to
presentation of evidence). Such procedures shall not alter the accounting
practices, principles and policies to be applied in the calculation of the
Realized Net Profits for any given year, which will be those required by this
Agreement. If the parties are unable to agree upon procedures before the end of
20 days after referral of the dispute to
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<PAGE>
the Auditor, the Auditor shall establish such procedures giving due regard to
the intention of the parties to resolve disputes as quickly, efficiently and
inexpensively as possible, which procedures may be, but need not be, those
proposed by either party. The parties shall then submit evidence in accordance
with the procedures established, and the Auditor shall decide the dispute in
accordance therewith. The Auditor's decision on any matter referred to shall be
final and binding on Collectible and JL. The fee of the Auditor shall be borne
by Collectible and JL in equal portions, unless the Auditor decides, based on
its determination with respect to the reasonableness of the respective positions
of the parties, that the fee shall be borne in unequal proportions.
iii. Notwithstanding anything herein to the contrary, the
obligation of JL to pay Additional Compensation and the obligation of
Collectible to remit overpayments thereof, as provided in this Agreement shall
survive the termination hereof, including termination pursuant to Section 11,
below.
C. Notwithstanding anything herein contained to the contrary, (i)
no additional compensation shall be paid or payable in connection with
securities transactions, whether or not involving "good will" accounting cases,
if such securities transactions involve the purchase and sale of such securities
by JL Advisors, LLC or JL Associates, LLC in the ordinary course of its
business; and (ii) any entity which is an "affiliate" (as such term is defined
under theSecurities Exchange Act of 1934) of JL that engages in the Activities
shall be deemed to be a JL Vehicle.
6. JL shall provide to Macary, until November 30, 1998, without
charge, an office within JL's office space, computer access and telephone usage,
as well as reimbursement for travel and other out-of-pocket expenses previously
approved by JL. Neither Collectible nor Macary is authorized, nor shall they
incur, any other expenses on JL's behalf without JL's express written
authorization.
7. It is understood by the parties hereto that during the performance
of the Collectible Consultation, Collectible and Macary may receive from JL, its
employees or agents, or otherwise acquire, certain confidential, proprietary
and/or trade secret information which is the property of JL ("Confidential
Information"). Any and all reports, summaries, notes, applications, filings
and/or other information prepared and/or gathered in connection with the
performance of the Collectible Consultation whatever the form or medium, shall
be deemed Confidential Information as well. It is acknowledged and agreed that
the Confidential Information is the sole and exclusive property of JL.
Collectible and Macary, jointly and severally, hereby warrant and affirm that
they shall neither use, nor disclose to any third party, the Confidential
Information for any purpose. Upon the expiration or termination of this
Agreement, Collectible and Macary shall return to JL all tangible forms of
Confidential Information or derivations or abstracts thereof, any and all copies
of Confidential Information made by or on behalf of either of them in whatever
form or medium. Neither of them shall disclose to any third party or otherwise
make public the terms of this Agreement, except as necessary to secure
enforcement of the terms of this
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<PAGE>
Agreement, or in response to a lawful subpoena, or as otherwise required by law;
provided that prior to responding to such subpoena, JL shall be provided with a
copy of such subpoena and JL shall have the opportunity to file a motion for a
protective order. The obligations as set forth in this Section 7 shall be
continuing and shall survive the expiration or termination of this Agreement.
Notwithstanding anything to the contrary contained in this Agreement,
Confidential Information shall not include information (i) that is in the public
domain, or (ii) that relates to "goodwill" targets with respect to which no
Interests have been acquired pursuant to the terms hereof at the time of
termination of this Agreement.
8. Collectible and Macary agree that they will not, either directly or
indirectly, solicit any employee, investor or client of JL during the term of
this Agreement, or subsequent thereto.
9. JL, Collectible and Macary agree that in addition to a right to
seek damages on account of any breach of this Agreement, (i) JL shall be
entitled to injunctive relief in enforcing the provisions of paragraphs 3, 4, 7
and 8, hereof, since the breach of such provisions could cause irreparable
injury to JL, and (ii) Collectible shall be entitled to injunctive relief in
enforcing the provisions of paragraph 3, since the breach thereof could cause
irreparable injury to Collectible.
10. Both Collectible and Macary are and shall be deemed to be
independent contractors and not employees of JL, for all purposes and at all
times, and will not be entitled or eligible to participate in any benefits or
privileges extended by JL to its employees.
11. This Agreement is non-assignable and no party may assign any
rights or obligations hereunder without the prior written consent of the other,
except that the transfer of rights and obligations hereunder to a JL Vehicle
shall not require such consent. If Macary, for whatever reason, becomes unable
to perform the services to be performed by him as described herein, this
Agreement shall immediately terminate, it being understood that the services to
be provided by Macary are personal.
12. Collectible acknowledges and agrees that it shall be solely
responsible for paying the appropriate amount of all federal, state and local
income taxes with respect to all compensation paid to it pursuant to this
Agreement, and that JL shall have no responsibility whatsoever for withholding
or paying any such taxes for or on its behalf. Collectible further agrees to
indemnify, defend and hold JL harmless from and against any and all damages,
losses, expenses or penalties (including attorneys' fees and costs) arising from
or in connection with any claim brought by any federal, state or local taxing
authority with regard to its failure to file required forms with regard to
compensation paid by JL pursuant to this Agreement.
13. (a) Each party hereto indemnifies and shall hold harmless the
other parties against any and all liabilities, losses, claims, damages, costs
and expenses,
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including any and all legal fees, to the extent such liabilities, losses,
claims, damages, costs and expenses are determined by a court of competent
jurisdiction to be the result of such party's violation of law, gross
negligence, bad faith or intentional misconduct, and shall reimburse the other
parties hereto for any legal or other costs or expenses reasonably incurred by
such other parties in connection with investigating or defending any action or
claim, to the extent such expenses relate to issues with respect to such
liabilities.
(b) Promptly after receipt by an indemnified party under
paragraph (a) above of notice of the commencement of any action, suit or
proceeding, such indemnified party shall, if a claim in respect thereof is to be
made against an indemnifying party under paragraph (a) above, notify the
indemnifying party in writing of the commencement thereof; but the omission so
to notify the indemnifying party shall not relieve it from any liability which
it may have to any indemnified party otherwise than under paragraph (a) above.
In case any such action shall be brought against any indemnified party and it
shall notify the indemnifying party of the commencement thereof, the
indemnifying party shall be entitled to participate therein and, to the extent
that it shall wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel satisfactory to such
indemnified party (who shall not, except with the consent of the indemnified
party, be counsel to the indemnifying party), and, after notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party shall not be liable to such indemnified
party under paragraph (a) above for any legal expenses of other counsel or any
other expenses, in each case subsequently incurred by such indemnified party, in
connection with the defense thereof other than reasonable costs and expenses of
investigation and in connection with preparation for and appearances at
depositions, trials and other proceedings in which the indemnified party
participates. No indemnifying party shall, without the written consent of the
indemnified party, effect the settlement or compromise of, or consent to the
entry of any judgment with respect to, any pending or threatened action or claim
in respect of which indemnification or contribution may be sought hereunder
(whether or not the indemnified party is an actual or potential party to such
action or claim) unless such settlement, compromise or judgment (i) includes an
unconditional release of the indemnified party from all liability arising out of
such action or claim and (ii) does not include a statement as to or an admission
of fault, culpability or a failure to act, by or on behalf of any indemnified
party.
(c) If the indemnification provided for in this agreement is
unavailable to or insufficient to hold harmless an indemnified party under
paragraph (a) above in respect of any liabilities, losses, claims, damages or
costs or expenses (or actions in respect thereof) referred to therein, then each
party hereto shall contribute to the amount paid or payable by such indemnified
party as a result of such liabilities, losses, claims, damages or costs or
expenses or actions in respect thereof) in such proportion as is appropriate to
reflect not only the relative benefits received by each party in engaging in the
activities hereunder giving rise to such liabilities, losses, claims, damages or
costs or expenses (or actions in respect thereof) but also the relative fault of
each party in connection with the acts or omissions resulting in such
liabilities, losses, claims, damages or costs or expenses (or
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actions in respect thereof), as well as any other relevant equitable
considerations. The amount paid or payable by an indemnified party as a result
of the liabilities, losses, claims, damages or costs or expenses (or actions in
respect thereof) referred to above in this paragraph (c) shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act of 1933, as amended, shall be entitled to
contribution under this paragraph (c) from any person who was not guilty of such
fraudulent misrepresentation.
14. Notice. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given upon receipt of: hand
delivery; certified or registered mail, return receipt requested; or telecopy
transmission with confirmation of receipt:
If to Collectible, to:
Collectible Certificates
240 East 47th, Apt 34C
New York, New York 10017
Telecopier: (212) 813-2118
Telephone : (212) 583-0533
Attention: Richard Macary
(with a copy to)
Winthrop, Stimson, Putnam & Roberts
One Battery Park Plaza
New York, New York 10004--1490
Telecopier: (212) 858-1500
Telephone: (212) 858-1464
Attention: Donovan W. Burke, Esq.
If to JL, to
JL Advisors, LLC
520 Madison Avenue
New York, New York 10022
Telecopier: (212) 826-2334
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Telephone: (212) 826-6809
Attention: Robert S. Jaffe
(with a copy to)
Battle Fowler LLP
Park Avenue Tower
75 East 55th Street
New York, New York 10022
Telecopier: (212) 856-7802
Telephone: (212) 856-7111
Attention: Robert W. Gelfman, Esq.
Such names and addresses may be changed by written notice to each person listed
above.
15. Governing Law. This Agreement shall be governed by and construed
in accordance with the internal substantive laws and not the choice of law rules
of the State of New York.
16. Counterparts. This Agreement may be executed simultaneously in two
or more counterparts, each of which shall be deemed an original but all of which
together with shall constitute one and the same instrument.
17. Entire Agreement. This Agreement embodies the entire agreement and
understanding of the parties hereto in respect of the subject matter contained
herein. This Agreement supersedes all prior agreements and understandings
between the
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parties with respect to such subject matter.
If the foregoing correctly sets forth our agreement, please execute
and return a copy of this letter.
Very truly yours,
JL ADVISORS, LLC
By: _______________________________________
AGREED AND ACCEPTED
COLLECTIBLE, LLC
By: _______________________________
Richard Macary, Managing Member
_______________________________
Richard Macary, individually
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