<PAGE>
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------
SCHEDULE 14D-1
Tender Offer Statement Pursuant to Section 14(d)(1) of the
Securities Act of 1934
Under the Securities and Exchange Act of 1934
---------------------
OLD STONE CORPORATION
---------------------
(Name of Subject Company)
MANTICORE PROPERTIES, LLC
GOTHAM PARTNERS, L.P.
GOTHAM PARTNERS, II, L.P.
(Bidder)
Common Stock, Par Value $1.00 Per Share
Cumulative Voting Convertible
Preferred Stock, Series B, Par Value $1.00 Per Share
---------------------
(Title of Class of Securities)
680293107
680293305
---------------------
(CUSIP Number of Class of Securities)
William A. Ackman, Manager
Manticore Properties, LLC
110 East 42nd Street, 18th Floor
New York, New York 10017
(212) 286-0300
with copies to:
Morris Orens, Esq.
Shereff, Friedman, Hoffman & Goodman, LLP
919 Third Avenue
New York, New York 10022
Telephone: ( 212) 758-9500
(Name, Address and Telephone Number of Persons Authorized to
Receive Notices and Communications on Behalf of Bidder)
CALCULATION OF FILING FEE
- -------------------------------------------------------------------------------
TRANSACTION VALUATION * AMOUNT OF FILING FEE**
$12,433,831.00 $2,486.77
- -------------------------------------------------------------------------------
* Based on the offer to purchase 8,246,175 shares of Common Stock of the
Subject Company at $1.00 cash per share and 1,046,914 shares of
Preferred Stock of the Subject Company at $4.00 cash per share.
<PAGE>
** 1/50 of 1% of Transaction Value.
[ ] Check box if any part of the fee is offset as provided by Rule
0-11(a)(2) and identify the filing with which the offsetting fee was
previously paid. Identify the previous filing by registration
statement number, or the Form or Schedule and date of its filing:
Amount Previously Paid: N/A Filing Party: N/A
Form or Registration No.: N/A Date Filed" N/A
Note: The remainder of this cover page is only to be completed if the Schedule
14D-1 (or amendment thereto) is being filed, inter alia, to satisfy the
reporting requirements of section 13(d) of the Securities Exchange Act of 1934.
See General Instructions D, E and F to Schedule 14D-1.
The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities,
and for any subsequent amendment containing information which would alter the
disclosure provided in a prior cover page.
The information required in the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
<PAGE>
SCHEDULE 14D-1
- -------------------------------------------------------------------------------
680293107 Page 2 of Pages
CUSIP No. 680293305
- -------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Manticore Properties, LLC (133974831)
- -------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X]
(b) [ ]
- -------------------------------------------------------------------------------
3 SEC USE ONLY
- -------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC
- -------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
- -------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- -------------------------------------------------------------------------------
7 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
0
- -------------------------------------------------------------------------------
8 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN
SHARES* [ ]
- -------------------------------------------------------------------------------
9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
NA
- -------------------------------------------------------------------------------
10 TYPE OF REPORTING PERSON*
OO
- -------------------------------------------------------------------------------
<PAGE>
SCHEDULE 14D-1
- -------------------------------------------------------------------------------
680293107 Page 3 of Pages
CUSIP No. 680293305
- -------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Gotham Partners, L.P. (133700768)
- -------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X]
(b) [ ]
- -------------------------------------------------------------------------------
3 SEC USE ONLY
- -------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC
- -------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
- -------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
New York
- -------------------------------------------------------------------------------
7 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
0
- -------------------------------------------------------------------------------
8 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN
SHARES* [ ]
- -------------------------------------------------------------------------------
9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
N.A.
- -------------------------------------------------------------------------------
10 TYPE OF REPORTING PERSON*
PN
- -------------------------------------------------------------------------------
<PAGE>
SCHEDULE 14D-1
- -------------------------------------------------------------------------------
680293107 Page 4 of Pages
CUSIP No. 680293305
- -------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Gotham Partners II, L.P. (133863925)
- -------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X]
(b) [ ]
- -------------------------------------------------------------------------------
3 SEC USE ONLY
- -------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC
- -------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
- -------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
New York
- -------------------------------------------------------------------------------
7 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
0
- -------------------------------------------------------------------------------
8 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]
- -------------------------------------------------------------------------------
9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
N.A.
- -------------------------------------------------------------------------------
10 TYPE OF REPORTING PERSON*
PN
- -------------------------------------------------------------------------------
<PAGE>
Schedule 14D-1
Old Stone Corporation
This statement on Schedule 14D-1 (this "Statement") relates to the
offer by Manticore Properties, LLC, a Delaware limited liability company (the
"Purchaser"), wholly-owned by Gotham Partners, L.P., a New York limited
partnership and Gotham Partners II, L.P., a New York limited partnership
(together, the "Funds"), to purchase any and all shares of Common Stock, par
value $1.00 per share (the "Common Shares") and any and all shares of
Cumulative Voting Convertible Preferred Stock, Series B, par value $1.00 per
share (the "Preferred Shares" and together with the Common Shares, the
"Shares") of Old Stone Corporation, a Rhode Island corporation (the "Company"),
at a price of $1.00 per Common Share and $4.00 per Preferred Share, net to the
seller in cash, upon the terms and subject to the conditions set forth in the
Offer to Purchase, dated November 14, 1997 (the "Offer to Purchase"), and in
the two 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 name of the subject company is Old Stone Corporation,
a Rhode Island corporation, and the address of its principal executive offices
is Four Davol Square, Suite 320, Providence, Rhode Island 02903.
(b) - (c) The class of securities to which this statement
relates is the Common Stock, par value $1.00 per share, of the Company, and the
Cumulative Voting Convertible Preferred Stock, Series B par value $1.00 per
share. 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 employments for the past five years and citizenship of
each director and executive officer of the Purchaser 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 Purchase or
the Funds or, to the best of the Purchaser's knowledge, any of the directors or
executive officers of the Purchaser or the Funds has been convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors) or
was a party to a civil proceeding of a judicial or administrative body of
Page 6
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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 and Section
11 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) None.
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 12 of the Offer to Purchase is incorporated herein by reference.
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 16 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 16 of the Offer to Purchase is
incorporated herein by reference.
Page 7
<PAGE>
ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS.
Not applicable.
ITEM 10. ADDITIONAL INFORMATION.
(a) Not applicable.
(b) - (c) The information set forth in Section 15 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 Letter of Transmittal, to the extent not otherwise incorporated herein by
reference, is incorporated herein by reference.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit
Number Exhibit
------ -------
(a)(1) Offer to Purchase, dated November 14, 1997.
(a)(2) Letter of Transmittal with respect to Common Shares.
(a)(3) Letter of Transmittal with respect to Preferred Shares.
(a)(4) Notice of Guaranteed Delivery for Common Shares.
(a)(5) Notice of Guaranteed Delivery for Preferred Shares.
(a)(6) Letter from Beacon Hill Partners, Inc. 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) Letter from Beacon Hill Partners, Inc. to Old Stone
Corporation Stock Ownership Plan Trustee
(a)(9) Letter from Old Stone Corporation Stock Ownership Plan
Trustee to Plan participants.
(a)(10) IRS Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9.
(a)(11) Summary Advertisement, dated November 14, 1997.
Page 8
<PAGE>
Exhibit
Number Exhibit
- ------ -------
(b) None.
(c) None.
(d) None.
(e) Not applicable.
(f) None.
Page 9
<PAGE>
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: November 14, 1997 MANTICORE PROPERTIES, LLC
By: /s/ William A. Ackman
------------------------------------
Name: William A. Ackman
Title: Manager
GOTHAM PARTNERS, L.P.
By: Section H Partners, L.P.,
its general partner
By: Karenina Corporation,
a general partner of Section H
Partners, L.P.
By: /s/ William A. Ackman
------------------------------------
Name: William A. Ackman
Title: President
GOTHAM PARTNERS II, L.P.
By: Section H Partners, L.P.,
its general partner
By: Karenina Corporation,
a general partner of Section H
Partners, L.P.
By: /s/ William A. Ackman
------------------------------------
Name: William A. Ackman
Title: President
Page 10
<PAGE>
INDEX OF EXHIBITS
Sequentially
Exhibit Numbered
Number Exhibit Pages
- ------ ------- -----
(a)(1) Offer to Purchase, dated November 14, 1997.
(a)(2) Letter of Transmittal with respect to Common Shares.
(a)(3) Letter of Transmittal with respect to Preferred Shares.
(a)(4) Notice of Guaranteed Delivery for Common Shares.
(a)(5) Notice of Guaranteed Delivery for Preferred Shares.
(a)(6) Letter from Beacon Hill Partners, Inc. 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) Letter from Beacon Hill Partners, Inc. to Old Stone
Corporation Stock Ownership Plan Trustee
(a)(9) Letter from Old Stone Corporation Stock Ownership Plan
Trustee to Plan participants.
(a)(10) IRS Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9.
(a)(11) Summary Advertisement, dated November 14, 1997.
(b) None.
(c) None.
(d) None.
(e) Not applicable.
(f) None.
Page 11
<PAGE>
MANTICORE PROPERTIES, LLC
November 14, 1997
DEAR OLD STONE CORPORATION SHAREHOLDER:
Manticore Properties, LLC ("Manticore Properties") is offering to
purchase any and all shares of Common Stock ("Common Shares") and Cumulative
Voting Convertible Preferred Stock, Series B (the "Preferred Shares" and
collectively with the Common Shares, the "Shares") of Old Stone Corporation
(the "Company") which you own for a price of $1.00 PER COMMON SHARE AND $4.00
PER PREFERRED SHARE IN CASH (the "Offer"). A copy of the offering materials is
enclosed. Manticore Properties believes, in addition to the other information
contained in the accompanying Offer to Purchase, you should consider the
following:
o ALL CASH OFFER
Manticore Properties is offering to pay $1.00 IN CASH PER SHARE FOR
ANY AND ALL COMMON SHARES and $4.00 IN CASH PER SHARE FOR ANY AND ALL
PREFERRED SHARES which are tendered in response to the Offer. During
the past three years, the only trades in the Common Shares, as
reported by Bloomberg in the "Pink Sheets," were at prices ranging
from $0.000125 to $0.125 per Share.
o NO COMMISSION; NO FINANCING CONDITION
The $1.00 per Common Shares and $4.00 per Preferred Share purchase
price will be ALL CASH, WITHOUT COMMISSION OR OTHER COSTS TO ANY
SHAREHOLDER who tenders his or her shares. ALL COSTS AND COMMISSIONS
WILL BE BORNE BY MANTICORE PROPERTIES. Manticore Properties has
committed funds available to pay for any and all shares that are
tendered in response to the Offer. The Offer is not subject to
financing.
o ILLIQUID MARKET FOR SHARES
The Shares were delisted from the NASDAQ National Market in January
1993. The Shares are not currently listed on any stock exchange or on
NASDAQ. Since the Shares were delisted, trading in the Shares has been
extremely limited. Accordingly, the Offer affords you the opportunity
to dispose of your Shares for cash which otherwise might not be
available to you.
o POTENTIAL TAX ADVANTAGES
If you originally paid more than $1.00 per share for your Common
Shares or $4.00 per share for your Preferred Shares, you may be able
to recognize a tax loss on the sale of Shares to Manticore Properties.
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 SHAREHOLDER SHOULD
<PAGE>
CONSULT HIS OR HER OWN ACCOUNTANT OR TAX ADVISER CONCERNING THE TAX
CONSEQUENCES OF ACCEPTING THIS OFFER TO PURCHASE.
IN DECIDING WHETHER OR NOT TO ACCEPT MANTICORE PROPERTIES' OFFER TO PURCHASE
YOUR SHARES WHICH WOULD TERMINATE ANY RIGHTS YOU MAY HAVE AS A SHAREHOLDER, YOU
SHOULD CONSIDER CAREFULLY ALL OF THE ACCOMPANYING MATERIALS AND SHOULD REVIEW
THESE MATERIALS WITH YOUR BROKER OR OTHER FINANCIAL ADVISER.
Sincerely,
Manticore Properties, LLC
<PAGE>
PROCEDURE TO ACCEPT THE OFFER
IF YOU WISH TO ACCEPT THIS OFFER AND WISH TO TENDER ALL OR ANY PORTION OF YOUR
SHARES, YOU SHOULD FOLLOW ONE OF THESE TWO PROCEDURES:
(1) IF YOU OWN YOUR COMMON SHARES IN CERTIFICATE FORM: You should complete
and sign the enclosed BLUE Letter of Transmittal in accordance with the
instructions in the Letter of Transmittal and mail or deliver the BLUE
Letter of Transmittal together with your stock certificate(s), and any other
required documents to Harris Trust Company of New York (the "Depositary") in
the enclosed, postage-paid, addressed envelope.
(2) IF YOU OWN YOUR PREFERRED SHARES IN CERTIFICATE FORM: You should
complete and sign the enclosed YELLOW Letter of Transmittal in
accordance with the instructions in the Letter of Transmittal and mail or
deliver the YELLOW Letter of Transmittal together with your stock
certificate(s), and any other required documents to Harris Trust Company of New
York (the "Depositary") in the enclosed, postage-paid, addressed envelope.
(3) IF YOU HOLD THE SHARES 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 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 Beacon Hill 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:
BEACON HILL PARTNERS, INC.
90 Broad Street
20th Floor
New York, New York 10004
(800) 253-3814
(TOLL FREE)
(212) 843-8500
(CALL COLLECT)
<PAGE>
OFFER TO PURCHASE FOR CASH
ANY AND ALL OUTSTANDING SHARES OF COMMON STOCK AND
ANY AND ALL OUTSTANDING SHARES OF CUMULATIVE VOTING CONVERTIBLE
PREFERRED STOCK, SERIES B
OF
OLD STONE CORPORATION
AT
$1.00 NET PER COMMON SHARE
AND
$4.00 NET PER CUMULATIVE VOTING CONVERTIBLE PREFERRED,
SHARE SERIES B
BY
MANTICORE PROPERTIES, LLC
- -------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON FRIDAY, DECEMBER 12, 1997, UNLESS THE OFFER
IS EXTENDED.
- -------------------------------------------------------------------------------
THE OFFER IS SUBJECT TO THE TERMS AND CONDITIONS CONTAINED IN
THIS OFFER TO PURCHASE. SEE SECTION 14. THE OFFER IS NOT CONDITIONED UPON THE
RECEIPT OF FINANCING OR ANY MINIMUM NUMBER OF COMMON SHARES (THE "COMMON
SHARES") OR CUMULATIVE VOTING CONVERTIBLE PREFERRED SHARES, SERIES B (THE
"PREFERRED SHARES" AND TOGETHER WITH THE COMMON SHARES THE "SHARES") BEING
TENDERED.
------------------
IMPORTANT
Any shareholder desiring to tender all or any portion of such
shareholder's Shares should either:
1. Complete and sign the Letter(s) of Transmittal (or a facsimile thereof)
relating to the Common Shares and/or the Preferred Shares tendered in
accordance with the instructions in the Letter(s) of Transmittal, have such
shareholder'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 the
certificates for such Shares to the Depositary along with the Letter(s) of
Transmittal (or facsimile) or deliver such 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 shareholder.
A shareholder having Shares registered in the name of a
broker, dealer, commercial bank, trust company or other nominee must contact
such broker, dealer, commercial bank, trust company or other nominee if such
shareholder desires to tender such Shares.
If a shareholder desires to tender Shares and such
shareholder's certificates for Shares 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 shareholder's tender may be effected by following the
procedure for guaranteed delivery set forth in Section 2.
<PAGE>
INSTRUCTIONS FOR PARTICIPANTS IN THE OLD STONE CORPORATION
EMPLOYEE STOCK OWNERSHIP PLAN: According to the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1996, the Ninth Amendment to the
Old Stone Corporation Employee Stock Ownership Plan (the "Plan"), adopted on
September 27, 1988, provides pass-through tender offer rights to Plan
participants with respect to all Shares allocated to participants ("Plan
Shares"). Plan participants desiring to tender all or any portion of such Plan
participant's Plan Shares should complete and sign the enclosed instructions to
the Plan Trustee and deliver the instructions to the Plan Trustee. The Trustee
may require additional documentation in connection with the tender of Plan
Shares.
Questions and requests for assistance may be directed to
Beacon Hill 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:
BEACON HILL PARTNERS, INC.
November 14, 1997
ii
<PAGE>
TABLE OF CONTENTS
Page
INTRODUCTION....................................................... 1
THE TENDER OFFER................................................... 3
SECTION 1. TERMS OF THE OFFER.................................... 3
SECTION 2. PROCEDURES FOR TENDERING SHARES....................... 4
SECTION 3. WITHDRAWAL RIGHTS..................................... 8
SECTION 4. ACCEPTANCE FOR PAYMENT AND PAYMENT.................... 9
SECTION 5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES............... 10
SECTION 6. PRICE RANGE OF SHARES; DIVIDENDS ON THE SHARES........ 11
SECTION 7. EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES;
EXCHANGE ACT REGISTRATION; MARGIN REGULATIONS.... 12
SECTION 8. CERTAIN INFORMATION CONCERNING THE COMPANY............ 13
SECTION 9. CERTAIN INFORMATION CONCERNING
THE PURCHASER AND THE FUNDS...................... 18
SECTION 10. SOURCE AND AMOUNT OF FUNDS........................... 18
SECTION 11. BACKGROUND OF THE OFFER; CONTACTS, TRANSACTIONS
OR NEGOTIATIONS WITH THE COMPANY................. 19
SECTION 12. PURPOSE OF THE OFFER................................. 19
SECTION 13. DIVIDENDS AND DISTRIBUTIONS.......................... 19
SECTION 14. CERTAIN CONDITIONS OF THE OFFER...................... 20
SECTION 15. CERTAIN LEGAL MATTERS................................ 23
SECTION 16. FEES AND EXPENSES.................................... 24
SECTION 17. MISCELLANEOUS........................................ 25
SCHEDULE I DIRECTORS AND EXECUTIVE OFFICERS OF THE FUNDS
AND THE PURCHASER................................ S-1
SCHEDULE II TRANSACTIONS IN SHARES................................ S-2
iii
<PAGE>
To the Holders of Shares of Common Stock and/or
Cumulative Voting Convertible
Preferred Stock, Series B of Old Stone Corporation:
INTRODUCTION
Manticore Properties, LLC, a Delaware limited liability
company (the "Purchaser"), wholly owned by Gotham Partners, L.P., a New York
limited partnership ("Gotham"), and Gotham Partners II, L.P. ("Gotham II"), a
New York limited partnership (together, the "Funds"), hereby offers to purchase
all outstanding shares of common stock, par value $1.00 per share ("Common
Shares"), and Cumulative Voting Convertible Preferred Stock, Series B, par
value $1.00 per share ("Preferred Shares" and together with the Common Shares,
the "Shares"), of Old Stone Corporation, a Rhode Island corporation (the
"Company"), at a price of $1.00 per Common Share and $4.00 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 this Offer to Purchase and
in the related Letters of Transmittal (which, as amended from time to time,
together constitute the "Offer").
The Purchaser believes 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 Company with the
Securities and Exchange Commission (the "Commission"). The information
concerning the Company 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 Purchaser does not have any
knowledge that any such information is untrue, the Purchaser takes no
responsibility for the accuracy or completeness of such information or for any
failure by the Company to disclose events that may have occurred and may affect
the significance or accuracy of any such information.
Purchaser will pay soliciting dealer's fees of $.10 per
Common Share and $.40 per Preferred Share to brokers, dealers and other persons
for soliciting tenders of 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 Purchaser for customary
clerical and mailing expenses incurred by them in forwarding offering materials
to their clients. Tendering shareholders will not be obligated to pay brokerage
fees or commissions. Except as set forth in Instruction 6 of the Letters of
Transmittal, tendering shareholders will not be obligated to pay stock transfer
taxes on the purchase of Shares pursuant to the Offer. The Purchaser will pay
all charges and expenses of Harris Trust Company of New York, as Depositary
(the "Depositary"), and Beacon Hill Partners, Inc., as Information Agent (the
"Information Agent"), incurred in connection with the Offer. See Section 16.
The purpose of the Offer is to make, through the purchase of
Shares, a speculative investment in the outcome of the Action (as defined
below). By tendering Shares pursuant to the Offer, shareholders will relinquish
any rights, as shareholders, to any benefits to the Company of the outcome of
the Action. The Purchaser has no current plans or proposals that would result
in an extraordinary corporate transaction, such as a merger, reorganization or
liquidation involving the Company, sale or transfer of any material amount of
assets of the Company, any change in the Board of Directors or management of
the Company, any material change in the capitalization or dividend policy of
the Company, any other material change in the Company's corporate structure or
business.
1
<PAGE>
Certain federal income tax consequences of the sale of 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 SHARES BEING TENDERED.
Certain conditions to this Offer are described in Section 14.
The Purchaser expressly reserves the right, in its sole discretion, to waive
any one or more of the conditions to the Offer. See Sections 1, 14 and 15.
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.
2
<PAGE>
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 Purchaser will accept for payment and pay for
all Shares 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, December 12, 1997,
unless and until the Purchaser, in its 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 Purchaser, will expire.
The Purchaser expressly reserves the right, in its sole
discretion, at any time or from time to time, regardless of whether or not any
of the events set forth in Section 14 shall have occurred or shall have been
determined by the Purchaser 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 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 by the
Purchaser in this paragraph are in addition to the Purchaser's rights to
terminate the Offer pursuant to Section 14. UNDER NO CIRCUMSTANCES WILL
INTEREST BE PAID ON THE PURCHASE PRICE FOR TENDERED SHARES, WHETHER OR NOT THE
PURCHASER EXERCISES ITS RIGHT TO EXTEND THE OFFER.
If by 12:00 Midnight, New York City time, on Friday, December
12, 1997 (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 Purchaser
reserves 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 Shares and return all tendered Shares to
tendering shareholders, (b) waive all the unsatisfied conditions and accept for
payment and pay for all Shares validly tendered prior to the Expiration Date
and not theretofore withdrawn, (c) extend the Offer and, subject to the right
of shareholders to withdraw Shares until the Expiration Date, retain the 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 Purchaser will exercise
its 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 stockholders in connection with the Offer be promptly disseminated to
shareholders in a manner reasonably designed to inform shareholders of such
change), and without limiting the manner in which the Purchaser may choose to
make any public announcement, the Purchaser 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.
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If the Purchaser extends the Offer, or if the Purchaser
(whether before or after its acceptance for payment of Shares) is delayed in
its acceptance for payment of or payment for Shares or is unable to pay for
Shares pursuant to the Offer for any reason, then, without prejudice to the
Purchaser's rights under the Offer, the Depositary may retain tendered shares
on behalf of the Purchaser, and such Shares may not be withdrawn except to the
extent tendering shareholders are entitled to withdrawal rights as described in
Section 3. However, the ability of the Purchaser to delay the payment for
Shares which the Purchaser has 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 or on behalf of holders of
securities promptly after the termination or withdrawal of the Offer.
If the Purchaser makes a material change in the terms of the
Offer or the information concerning the Offer or waives a material condition of
the Offer, the Purchaser 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 shareholders and investor response. If, prior to the Expiration Date, the
Purchaser should decide to increase the price per Share being offered in the
Offer, such increase will be applicable to all shareholders whose Shares are
accepted for payment pursuant to the Offer.
A request is being made to the Company pursuant to Rule 14d-5
of the Exchange Act for the use of the Company's stockholder lists and security
position listings for the purpose of disseminating the Offer to holders of
Shares. This Offer to Purchase, the related Letters of Transmittal and other
relevant materials will be mailed to record holders of 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 Shares, by
the Purchaser following receipt of such lists or listings from the Company, or
by the Company if it so elects.
2. PROCEDURES FOR TENDERING SHARES
Valid Tender. For a shareholder to validly tender Shares
pursuant to the Offer, either (A) a properly completed and duly executed
Letter(s) of Transmittal (or facsimile thereof) relating to the Common Shares
and/or Preferred 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 certificates for tendered
Shares ("Share Certificates") must be received by the Depositary at one of such
addresses or such 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 shareholder must comply with the guaranteed delivery
procedures set forth below.
Book-Entry Transfer. The Depositary will establish accounts
with respect to the Shares at The Depository Trust Company and The Philadelphia
Depository Trust Company (the "Book-Entry Transfer Facilities") for purposes of
the Offer within two business days after the date of this Offer to Purchase.
Any
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financial institution that is a participant in any of the Book-Entry Transfer
Facilities' systems may make book-entry delivery of Shares by causing a
Book-Entry Transfer Facility to transfer such Shares into the Depositary's
account in accordance with such Book-Entry Transfer Facility's procedures for
such transfer. However, although delivery of Shares may be effected through
book-entry transfer into the Depositary's account at a 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 shareholder must comply with the guaranteed
delivery procedures described below. The confirmation of a book-entry transfer
of Shares into the Depositary's account at a Book-Entry Transfer Facility as
described above is referred to herein as a "Book-Entry Confirmation." DELIVERY
OF DOCUMENTS TO A BOOK-ENTRY TRANSFER FACILITY IN ACCORDANCE WITH SUCH
BOOK-ENTRY TRANSFER FACILITY'S PROCEDURES DOES NOT CONSTITUTE DELIVERY TO THE
DEPOSITARY.
The term "Agent's Message" means a message transmitted by a
Book-Entry Transfer Facility to, and received by, the Depositary and forming a
part of a Book-Entry Confirmation, which states that such Book-Entry Transfer
Facility has received an express acknowledgment from the participant in such
Book-Entry Transfer Facility tendering the Shares that such participant has
received and agrees to be bound by the terms of the Letters of Transmittal and
that the Purchaser may enforce such agreement against such participant.
THE METHOD OF DELIVERY OF SHARE CERTIFICATES, THE LETTERS OF
TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH ANY
BOOK-ENTRY TRANSFER FACILITY, IS AT THE ELECTION AND RISK OF THE TENDERING
SHAREHOLDER. 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 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 any of the Book-Entry Transfer Facilities' systems whose name
appears on a security position listing as the owner of the Shares) of 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 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 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 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 Share Certificates surrendered, the tendered 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
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on the Share Certificates, with the signatures on the Share Certificates or
stock powers guaranteed as described above. See Instructions 1 and 5 to the
Letters of Transmittal.
Guaranteed Delivery. If a shareholder desires to tender
Shares pursuant to the Offer and such shareholder's 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 shareholder'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
Purchaser, is received by the Depositary, as provided below, prior to
the Expiration Date; and
(iii) the Share Certificates representing all tendered
Shares, in proper form for transfer (or a Book-Entry Confirmation with
respect to all such 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 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
Shares accepted for payment pursuant to the Offer will in all cases be made
only after timely receipt by the Depositary of (a) Share Certificates for (or a
timely Book-Entry Confirmation with respect to) such Shares, (b) Letter(s) of
Transmittal (or facsimile thereof) relating to the Common Shares and/or
Preferred 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 shareholders may be paid at different times
depending upon when Share Certificates or Book-Entry Confirmations with respect
to Shares are actually received by the Depositary. UNDER NO CIRCUMSTANCES WILL
INTEREST BE PAID ON THE PURCHASE PRICE OF THE SHARES TO BE PAID BY THE
PURCHASER, REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY DELAY IN MAKING SUCH
PAYMENT.
The Purchaser's acceptance for payment of Shares validly
tendered pursuant to the Offer will constitute a binding agreement between the
tendering shareholder and the Purchaser 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 shareholder irrevocably appoints designees of the
Purchaser as such shareholder's attorneys-in-fact and proxies in the manner set
forth in the Letter of Transmittal, each with full power of substitution, to
the full extent of such shareholder's rights with respect to the Shares
tendered by such shareholder and accepted for payment by the Purchaser (and any
and all other Shares or other securities issued or issuable in respect of
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such Shares). All such proxies will be irrevocable and considered coupled with
an interest in the tendered Shares. Such appointment will be effective when,
and only to the extent that, the Purchaser accepts such Shares for payment
pursuant to the Offer. Upon such acceptance for payment, all prior powers of
attorney, proxies and consents given by such shareholder with respect to such
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 Purchaser
will thereby be empowered to exercise all voting and other rights with respect
to such Shares and other securities in respect of any annual, special,
adjourned or postponed meeting of the Company's shareholders, actions by
written consent in lieu of any such meeting or otherwise, as they in their sole
discretion deem proper. The Purchaser reserves the right to require that, in
order for Shares to be deemed validly tendered, immediately upon the
Purchaser's acceptance for payment of such Shares, the Purchaser must be able
to exercise full voting, consent and other rights with respect to such Shares
and other securities or rights, including voting at any meeting of
shareholders.
Determination of Validity. All questions as to the validity,
form, eligibility (including time of receipt) and acceptance for payment of any
tender of Shares will be determined by the Purchaser, in its sole discretion,
whose determination will be final and binding on all parties. The Purchaser
reserves the absolute right to reject any or all tenders determined by it not
to be in proper form or the acceptance for payment of or payment for which may,
in the opinion of the Purchaser's counsel, be unlawful. The Purchaser also
reserves the absolute right to waive any defect or irregularity in the tender
of any Shares of any particular shareholder whether or not similar defects or
irregularities are waived in the case of other shareholders. No tender of
Shares will be deemed to have been validly made until all defects or
irregularities relating thereto have been cured or waived. None of the
Purchaser, the Funds, 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
Purchaser's 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 shareholder
surrendering Shares 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 shareholder is not subject to backup
withholding. If a shareholder does not provide such shareholder's correct TIN
or fails to provide the certifications described above, the Internal Revenue
Service (the "IRS") may impose a penalty on such shareholder and the payment of
cash to such shareholder pursuant to the Offer may be subject to backup
withholding of 31% of the amount of such payment. All shareholders surrendering
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 Purchaser 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 Certificates. If the 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 representations
and agreements contained in the Letter of Transmittal are required to be made
by tendering stockholders who have lost their Share Certificates. In addition,
the Information Agent or Depositary may
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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 Shares will be determined by the
Purchaser, in its sole discretion, whose determination will be final and
binding on all parties.
Special Instructions for Plan Participants. According to the Company's
Annual Report on Form 10- K for the fiscal year ended December 31, 1996, the
Ninth Amendment to the Old Stone Corporation Employee Stock Ownership Plan,
adopted on September 27, 1988 (the "Plan"), provides pass-through tender offer
rights to Plan participants with respect to all Shares allocated to
participants ("Plan Shares"). Plan participants desiring to tender all or any
portion of such Plan participant's Plan Shares should complete and sign the
enclosed instructions to the Plan Trustee and deliver the instruction to the
Plan Trustee. The Trustee may require additional documentation in connection
with the tender of Plan Shares.
3. WITHDRAWAL RIGHTS
Except as otherwise provided in this Section 3, tenders of
Shares pursuant to the Offer are irrevocable. 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 Purchaser pursuant to the Offer, may also be withdrawn at any
time after January 12, 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 Shares to
be withdrawn, the number of Shares to be withdrawn and the name of the
registered holder of the Shares to be withdrawn, if different from the name of
the person who tendered the Shares. If Share Certificates have been delivered
or otherwise identified to the Depositary, then, prior to the physical release
of such Share Certificates, the serial numbers shown on such Share Certificates
must be submitted to the Depositary and, unless such Shares have been tendered
by an Eligible Institution, the signatures on the notice of withdrawal must be
guaranteed by an Eligible Institution. If 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
appropriate Book-Entry Transfer Facility to be credited with the withdrawn
Shares and otherwise comply with such Book-Entry Transfer Facility's
procedures.
Withdrawals of tenders of Shares may not be rescinded, and
any Shares properly withdrawn will thereafter be deemed not validly tendered
for purposes of the Offer. However, withdrawn 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 Purchaser, in its
sole discretion, whose determination will be final and binding on all parties.
None of the Purchaser, the Funds, the Depositary, the Information Agent or any
other person will be under any duty to give notification of any defects or
irregularities in any notice of withdrawal or incur any liability for failure
to give any such notification.
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4. ACCEPTANCE FOR PAYMENT AND PAYMENT
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 Purchaser will accept for payment and
will pay for all 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
Purchaser, in its sole discretion, whose determination will be final and
binding on all parties. See Sections 1 and 14. The Purchaser expressly reserves
the right, in its sole discretion, to delay acceptance for payment of or
payment for Shares in order to comply in whole or in part with any applicable
law. See Section 14. Any such delays will be effected in compliance with Rule
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 Shares accepted for payment
pursuant to the Offer will be made only after timely receipt by the Depositary
of (a) Share Certificates for (or a timely Book-Entry Confirmation with respect
to) such Shares, (b) the Letter(s) of Transmittal (or facsimile thereof)
relating to the Common Shares and/or Preferred 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 per Common Share consideration paid
to any shareholder pursuant to the Offer will be the highest per Common Share
consideration paid to any other shareholder pursuant to the Offer. The per
Preferred Share consideration paid to any shareholder pursuant to the Offer
will be the highest per Preferred Share consideration paid to any other
shareholder pursuant to the Offer.
For purposes of the Offer, the Purchaser will be deemed to
have accepted for payment, and thereby purchased, Shares validly tendered to
the Purchaser and not withdrawn as, if and when the Purchaser gives oral or
written notice to the Depositary of the Purchaser's acceptance for payment of
such Shares. Payment for 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 shareholders for the purpose of
receiving payment from the Purchaser and transmitting payment to tendering
shareholders. UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON THE PURCHASE
PRICE OF THE SHARES TO BE PAID BY THE PURCHASER, 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 shareholders,
the Purchaser's obligation to make such payment shall be satisfied and
tendering shareholders must thereafter look solely to the Depositary for
payment of amounts owed to them by reason of the acceptance for payment of
Shares pursuant to the Offer. The Purchaser will pay any stock transfer taxes
with respect to the transfer and sale to it or its 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 Purchaser is delayed in its acceptance for payment of
or payment for Shares or is unable to accept for payment or pay for Shares
pursuant to the Offer for any reason, then, without prejudice to the
Purchaser's rights under the Offer (but subject to compliance with Rule
14e-l(c) under the Exchange Act), the Depositary may, nevertheless, on behalf
of the Purchaser, retain tendered Shares, and such 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.
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If any tendered Shares are not purchased pursuant to the
Offer for any reason, Share Certificates for any such unpurchased Shares will
be returned, without expense to the tendering shareholder (or, in the case of
Shares delivered by book-entry transfer of such Shares into the Depositary's
account at a Book-Entry Transfer Facility pursuant to the procedure set forth
in Section 2, such Shares will be credited to an account maintained at the
appropriate Book-Entry Transfer Facility), as promptly as practicable after the
expiration, termination or withdrawal of the Offer.
The Purchaser reserves 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 Shares
tendered pursuant to the Offer, but any such transfer or assignment will not
relieve the Purchaser of its obligations under the Offer and will in no way
prejudice the rights of tendering shareholders to receive payment for Shares
validly tendered and accepted for payment pursuant to the Offer.
5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The Purchaser believes that tenders of Shares pursuant to the
Offer may result in capital losses for many shareholders. Capital losses may be
used to offset capital gains and the excess of capital losses over capital
gains may be offset against the ordinary income of an individual taxpayer,
subject to an annual deduction limitation of $3,000.
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 shareholder will recognize gain or
loss equal to the difference between the amount of cash received by the
shareholder pursuant to the Offer and the aggregate tax basis in the Common
Shares and/or Preferred Shares tendered by the shareholder and purchased
pursuant to the Offer. If Common Shares or Preferred Shares are held by a
shareholder as capital assets (i.e., generally assets held for investment),
gain or loss recognized by the shareholder with respect to such Shares will be
capital gain or loss.
Capital gains recognized by an individual shareholder will
generally be taxed at a maximum federal marginal tax rate of 20% if the
shareholder's holding period for the shares exceeds 18 months and 28% if the
shareholder's holding period for the shares exceeds 12 months but does not
exceed 18 months. Capital gains recognized by a corporate shareholder will be
taxed at a maximum federal marginal tax rate of 35%.
The tender of Plan Shares by the Trustee of the Plan will not
result, for federal income tax purposes, in taxable income attributable to the
Plan or Plan participants on whose behalf the Plan Shares were tendered.
THE FOREGOING DISCUSSION IS INCLUDED FOR GENERAL INFORMATION
ONLY AND MAY NOT BE APPLICABLE WITH RESPECT TO SHARES RECEIVED PURSUANT TO THE
EXERCISE OF EMPLOYEE STOCK OPTIONS OR OTHERWISE AS COMPENSATION OR WITH RESPECT
TO HOLDERS OF 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 SHARES IN LIGHT OF
INDIVIDUAL CIRCUMSTANCES. THE FOREGOING DISCUSSION DOES NOT ADDRESS THE
TREATMENT OF DISTRIBUTIONS FROM THE PLAN TO PLAN
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PARTICIPANTS FOR FEDERAL TAX PURPOSES. SHAREHOLDERS ARE URGED TO CONSULT
THEIR TAX ADVISORS 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 SHARES; DIVIDENDS ON THE SHARES
Based on the Company's Quarterly Report on Form 10-Q for the
fiscal quarter ended September 30, 1997 (the "September 1997 Form 10-Q"), as of
September 30, 1997, there were 8,246,175 Common Shares outstanding and
1,046,914 Preferred Shares outstanding. Based on the Company's Annual Report on
Form 10-K for the fiscal year ended December 30, 1996 (the "1996 Form 10-K"),
at March 25, 1997, the Common Shares outstanding were held by approximately
40,300 shareholders of record.
Based on the 1996 Form 10-K, until January 29, 1993, the
Common Shares were quoted on the NASDAQ National Market and traded under the
symbol "OSTN". On January 29, 1993 the Common Shares were delisted from NASDAQ
and since that date have traded over the counter in the "Pink Sheets." During
the past four years, trading in the Common Shares has been extremely limited.
Trades reported in the "Pink Sheets" during this period were made at per Common
Share prices of $0.000125 to $0.125. The high and low trading prices per Common
Share were $0.125 and $0.000125 in 1996 and $0.14 and $0.001 in 1997. As of the
date hereof, there is no established public trading market for the Common
Shares.
The following description of the Preferred Shares is based on
the Company's Post-Effective Amendment No. 1 to the Registration Statement on
Form S-8 (Reg. No. 33-21440), dated January 26, 1989. The annual dividend rate
of the Preferred Shares is $2.40 per share and dividends are cumulative. The
Preferred Shares are convertible at the option of the holder for a period of
twenty years after February 20, 1981 on the basis of one and one-third Common
Shares for each two shares of Preferred Shares during the first five years and
thereafter are convertible on the basis of one and one-third Common Shares for
that number of Preferred Shares determined by dividing the per share book value
of the Common Shares, as defined in the resolution creating the Preferred
Shares, by $20.00, but in no event will the number of Preferred Shares
exchanged for one and one-third Common Shares be less than two shares. The
Company may redeem Preferred Shares on any dividend date after February 20,
1991 for redemption prices which decline from $21.60 in the first year of the
redemption period until February 20, 2011 when the redemption price will become
$20.00 for all ensuing years. Commencing on February 20, 2002 and on each
succeeding February 20th thereafter, the Company is required to redeem ten
percent of the Preferred Shares at a price of $20.00 per share. The holders of
Preferred Shares are entitled to one-half vote for each share held on all
matters on which the holders of the Common Shares are entitled to vote, voting
with the holders of the Common Shares and not as a separate class, and,
following a default in four quarterly dividends, have the right to vote as a
class to elect 20 percent (rounded upwards) of the directors of the Company.
The Preferred Shares have priority in respect of dividend and liquidation
rights over the Common Shares.
Based on the 1996 Form 10-K, until January 29, 1993, the
Preferred Shares were quoted on NASDAQ. Since January 29, 1993, the Preferred
Shares have traded over the counter in the "Pink Sheets". Based on the
Company's September 1997 Form 10-Q, as of September 30, 1997, there were
1,046,914 Preferred Shares outstanding.
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The Preferred Shares are traded over the counter in the "Pink
Sheets". The following table sets forth for each of the periods indicated, the
high and low trading prices per Preferred Share as reported by Bloomberg
Financial Markets:
CALENDAR YEAR HIGH LOW
1995
Third Quarter $ 1.50 $ 0.50
Fourth Quarter $ 4.00 $ 0.50
1996
First Quarter $ 2.50 $ 0.05
Second Quarter $ 2.00 $ 1.50
Third Quarter $ 3.00 $ 2.00
Fourth Quarter $ 4.00 $ 2.00
1997
First Quarter $ 5.00 $ 3.75
Second Quarter $ 4.00 $ 3.50
Third Quarter $ 5.00 $ 3.50
Fourth Quarter $ 7.28 $ 3.88
(through November 12, 1997)
Based on the 1996 Form 10-K, the Company discontinued
dividends to holders of its Common Shares and its Preferred Shares during 1991
and has stated that it does not expect to pay any dividends on the Preferred
Shares for the foreseeable future. As a result of failure to pay dividends on
the Preferred Shares for more than four quarters, the holders of the Preferred
Shares collectively are entitled to elect a number of directors of the Company
constituting twenty percent (20%) of the total number of directors of the
Company at the next meeting of stockholders at which directors are to be
elected. Until the aggregate deficiency of $15,075,561 ($14.40 per share) as of
September 30, 1997 is declared and fully paid on the Preferred Shares, the
Company may not declare any dividends or make any other distributions on or
redeem the Common Shares. The Preferred Stock is entitled to a preference upon
liquidation with a value of $20,938,000 as of September 30, 1997.
7. EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES; EXCHANGE ACT
REGISTRATION; MARGIN REGULATIONS
Market for the Shares. Based upon the Company's September
1997 Form 10-Q there were 8,246,175 Common Shares outstanding as of September
30, 1997. Based on the 1996 Form 10-K, there were 40,300 holders of record of
Common Shares at March 25, 1997. Based on the Company's September 1997
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Form 10-Q there were 1,046,914 Preferred Shares outstanding as of September 30,
1997. The purchase of Shares pursuant to the Offer will reduce the number of
holders of Shares and the number of Shares that might otherwise trade in the
over-the-counter market and could adversely affect the liquidity and market
value of the remaining Shares held by the public.
Exchange Act Registration. The Common Shares and the
Preferred Shares are currently registered under the Exchange Act. Each class of
Shares may be eligible for deregistration either prior to or after the Offer
depending upon certain circumstances, including the number of recordholders of
the Shares at such time. Registration of either class of Shares under the
Exchange Act may be terminated upon application of the Company to the
Commission if such class of Shares are neither listed on a national securities
exchange nor held by 500 or more holders of record, where total assets of the
Company have not exceeded $10 million on the last day of the Company's three
most recent fiscal years. In order to be eligible to effect such termination,
however, the Company must be current on its periodic reporting requirements
under the Exchange Act.
Termination of registration of each of the Common Shares and
the Preferred Shares under the Exchange Act would, assuming the Company were in
compliance with its reporting obligations, substantially reduce the information
required to be furnished by the Company to its shareholders and to the
Commission. Termination would also make certain provisions of the Exchange Act
no longer applicable to the Company, 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 the Company and persons holding "restricted securities" of the
Company 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
affiliates because of the absence of currently available information concerning
the Company.
Margin Securities. The Purchaser believes that neither the
Common Shares nor the Preferred Shares constitute margin securities under the
regulations of the Board of Governors of the Federal Reserve System.
8. CERTAIN INFORMATION CONCERNING THE COMPANY
The following information has been excerpted from the
Company's 1996 Form 10-K:
Old Stone Corporation (the "Corporation") is a
general business corporation incorporated in 1969 under the laws of
the state of Rhode Island. The principal offices of the Corporation
are located at 957 Warren Avenue, East Providence, Rhode Island 02914.
On January 29, 1993, the Office of Thrift
Supervision ("OTS") declared Old Stone Bank, a Federal Savings Bank, a
federally chartered stock savings bank organized under the laws of the
United States (the "Bank"), insolvent, and appointed the Resolution
Trust Corporation ("RTC") as receiver (the "Bank Closing"). The RTC
formed a bridge bank, Old Stone Federal Savings Bank (the "Bridge
Bank") which assumed all of the deposit liabilities and substantially
all of the other liabilities of the Bank and acquired substantially
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all of the assets of the Bank (including the stock of all of its
subsidiaries). Immediately prior to the Bank Closing, the Bank
constituted substantially all of the assets of the Corporation.
Immediately following the Bank Closing, all of the officers of the
Corporation resigned and were hired by the Bridge Bank. A limited
slate of new officers was elected on March 8, 1993. . .
The Corporation continues to hold its equity
interest in Old Stone Securities company ("Old Stone Securities").
The Corporation has no equity interest in any other significant
entity. . .
The Corporation's only surviving active subsidiary
after the Bank Closing is Old Stone Securities, a registered
securities broker-dealer which provides brokerage services to retail
and institutional clients. In addition, Old Stone Securities
participates in Rhode Island underwritings of tax-exempt securities,
maintains an inventory of tax-exempt securities for resale, and also
trades government securities both at auction and in the secondary
market. . .
Old Stone Securities is subject to regulation by the
Securities and Exchange Commission, the State of Rhode Island, and the
National Association of Securities Dealers, Inc. . . .
As of December 31, 1996, the Corporation had one
part-time employee. As of such date, Old Stone Securities employed
three persons, all of whom were full-time, two of whom also serve as
officers of the Corporation, and who handle certain administrative
functions on behalf of the Corporation. . .
On September 16, 1992, the Corporation and the Bank
("Plaintiffs") instituted a suit (the "Action") against the United
States ("Defendant") in the U.S. Court of Federal Claims. In
connection with certain government-assisted acquisitions by Plaintiffs
in the 1980's, the Defendant (through its agencies the Federal Home
Loan Bank Board ("FHLBB") and the Federal Savings and Loan Insurance
Corporation) in exchange for the Bank's purchasing certain assets and
assuming certain liabilities of Defendant, agreed among other things
to provide Plaintiffs with certain valuable capital credits and
authorized Plaintiffs to treat those credits and supervisory goodwill
as part of regulatory capital and caused the Bank to write off
immediately approximately $80 million of such capital credits and
supervisory goodwill. In this suit 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 the 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 the Defendant has been unjustly enriched. The
Defendant has filed a counterclaim against the Corporation for alleged
breach of its net worth maintenance agreements. The Company has filed
an answer denying such counterclaims. The Corporation's claims are
separate and distinct from the claims of the Bank. An agency of the
Defendant serves as the receiver for the bank and is maintaining the
Bank's claims against the Defendant. There are several similar cases
pending before the U.S. Court of Federal Claims. No prediction as to
the outcome of the Corporation's case can be made at this time.
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<PAGE>
The following information has been excerpted from the September 1997
Form 10-Q:
The case is one of several similar cases pending
before the U.S. Court of Federal Claims. The case as to the
Corporation was stayed pending the outcome of certain other suits. On
July 1, 1996, the U.S. Supreme Court held that the Defendant was
liable to certain other plaintiff thrift holding companies in cases
arising out of similar sets of facts (the Winstar litigation.)
The amended complaint filed by the Corporation on
September 28, 1995 named only the Corporation as a plaintiff. An
agency of the Defendant now acts as receiver for the Bank and has been
granted leave to intervene in the litigation on behalf of the [B]ank.
The Corporation filed a Second Amended Complaint on April 18, 1997.
The Corporation is filing a Motion for Summary
Judgment asking the Court to find against Defendant on the issue of
liability. If successful, the Corporation must then prove the damage
that it has incurred because of Defendant's conduct. Discovery in the
Corporation's case is schedule[d] to begin in January, 1998. No
prediction as to the outcome of this case can be made at this time.
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 the Financial Institutions Reform Recovery and
Enforcement Act of 1989 ("FIRREA") of the treatment of goodwill contemplated at
the time the ailing thrifts were taken over by healthier thrifts or other
investors. On July 1, 1996, the Supreme Court of the United States decided an
appeal in three of these cases brought against the federal government. The
plaintiffs were Winstar Corporation, Glendale Federal Bank FSB and The
Statesman Group, Inc. ("Winstar Cases"). In those cases, based upon their facts
and circumstances and based upon the documents relating to each of those
plaintiff's acquisitions of ailing savings institutions, the Court of Federal
Claims 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
reversed the summary judgments granted in favor of the plaintiffs and ruled
against them. Subsequently, the Court of Appeals for 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, plaintiffs have stated claims for breach of contract against
the government. Because the trial court (the Court of Federal Claims) 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 Court of
Federal Claims has conducted evidentiary proceedings in which it took testimony
and reviewed documentary evidence on the questions of 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 has 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 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, nor has it rendered any decision on the question of liability
in any other cases. Following any decision on damages, it is anticipated that
one or both parties may take appeals to the Court of Appeals for the Federal
Circuit. It is uncertain when any such damage judgment will become final and
enforceable.
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<PAGE>
Although the plaintiff thrift institutions in the Winstar
Cases prevailed in the U.S. Supreme Court, its decision is not necessarily
dispositive of the outcome of the Company's Action. A court may still determine
that the Company's 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 portions of the claims presented by the Winstar plaintiff thrift
institutions remain to be litigated and could take several years to resolve.
Following any decision on liability with respect to the
Action, it is possible that one or both parties may seek to appeal to the Court
of Appeals for the Federal Circuit. It is uncertain when any such judgment will
become final and enforceable. If the Court of Federal Claims rules in favor of
the Company 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 is uncertain when the Court may conduct an evidentiary
hearing on the damages and, following a decision on damages and any applicable
appeals from that decision, when any such decision would become final. The
measure and amount of damages, if any, are uncertain.
By tendering Shares pursuant to the Offer, shareholders will
relinquish any rights, as shareholders, to any benefits to the Company of the
outcome of the Action. The Company may have net operating losses which could be
used to offset taxable income of the Company. However, the Purchaser cannot
reasonably determine whether such net operating losses actually exist, the
magnitude of such net operating losses, when such net operating losses are
scheduled to expire and/or whether the availability of such net operating
losses is subject to limitation. Moreover, pursuant to Code Section 382, the
ability of the Company to utilize such net operating losses to offset taxable
income may be substantially diminished depending upon the percentage of Shares
transferred since the creation of such net operating losses and/or Shares
acquired in this Offer and/or other transfers of capital stock of the Company.
Set forth below is certain selected consolidated financial
information with respect to the Company excerpted from information contained in
the 1996 Form 10-K, the September 1997 Form 10-Q and the Company's Quarterly
Report on Form 10-Q for the quarter ended September 30, 1996 (the "September
1996 Form 10-Q"). More comprehensive financial information is included in the
1996 Form 10-K, the September 1997 Form 10-Q, the September 1996 Form 10-Q and
other documents filed by the Company with the Commission, and the following
summary is qualified in its entirety by reference and such other documents and
all the financial information (including any related notes) contained therein.
The 1996 Form 10-K, the September 1997 Form 10-Q, the September 1996 Form 10-Q
and such other documents should be available for inspection and copies thereof
should be obtainable in the manner set forth below under "Available
Information."
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<PAGE>
OLD STONE CORPORATION
SELECTED FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
NINE MONTHS
ENDED SEPTEMBER 30, YEAR ENDED DECEMBER 31,
1997 1996 1996 1995 1994
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
OPERATING DATA:
Income............................................ $ 137 $ 174 $ 251 $ 271 $ 277
Income (loss) from continuing operations
before taxes $ (120) $ (211) $ (293) $ (280) $ (354)
Net income (loss)................................. $ (120) $ (211) $ (299) $ (471) $ (380)
Net income (loss) per share....................... $ (.26) $ (.27) $ (.36) $ (.38) $ (.37)
BALANCE SHEET DATA: (2)
Working capital................................... $ (723) $ (515) $ (603) $ (304) $ 167
Total assets...................................... $ 416 $ 670 $ 570 $ 1,065 $ 1,486
Total liabilities................................. $ 1,139 $ 1,185 $ 1,173 $ 1,369 $ 1,319
Stockholders' equity (deficit).................... $ (20,974) $ (20,569) $ (20,707) $ (20,212) $ (19,544)
</TABLE>
Available Information. The 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 the 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. 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. Such reports, proxy statements and other information may also be
obtained at the Web site that the Commission maintains at http://www.sec.gov.
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 Company 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 Purchaser has no knowledge that any such information is untrue,
the Purchaser takes no responsibility for the accuracy or completeness of such
information or for any failure by the Company to disclose events that may have
occurred and may affect the significance or accuracy of any such information.
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<PAGE>
9. CERTAIN INFORMATION CONCERNING THE PURCHASER AND THE FUNDS
The Purchaser is a newly organized Delaware limited liability
company wholly owned by the Funds, and to date has not conducted any business
other than in connection with the Offer. The Funds were each formed to engage
in the buying and selling of securities for investment for its own account.
Section H Partners, L.P., a New York limited partnership ("Section H"), is the
sole general partner of Gotham and Gotham II. Karenina Corp., a New York
corporation ("Karenina"), and DPB Corp., a New York corporation ("DPB"), are
the sole general partners of Section H. Karenina is wholly owned by William A.
Ackman. DPB is wholly owned by David P. Berkowitz. Messrs. Ackman and Berkowitz
are U.S. Citizens. The principal executive offices of the Funds and the
Purchaser are located at 110 East 42nd Street, 18th Floor, New York, New York
10017.
The Funds have committed equity capital of more than $300
million and have executed agreements with the Purchaser to commit sufficient
equity capital to pay for all outstanding Shares at the Offer Price plus
related fees and expenses.
Except as set forth in this Offer to Purchase (including the
Schedules hereto), none of the Funds or the Purchaser, or, to the best
knowledge of the Funds or the Purchaser, 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 Company, and none of the Funds,
the Purchaser, or, to the best knowledge of the Funds or the Purchaser, 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 the Company during the past 60 days.
Except as set forth in this Offer to Purchase (including the
Schedules hereto), none of the Funds or the Purchaser, or, to the best
knowledge of the Funds and the Purchaser, 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 the Company, including, without
limitation, any contract, arrangement, understanding or relationship concerning
the transfer of the voting of any securities of the Company, joint ventures,
loan or option arrangements, puts or calls, guaranties of loans, guaranties
against loss or the giving or withholding of proxies. Except as set forth in
this Offer to Purchase (including the Schedules hereto), none of the Funds or
the Purchaser, or, to the best knowledge of the Funds and the Purchaser, any of
the persons listed in Schedule I hereto has had any transactions with the
Company, or any of its executive officers, directors or affiliates that would
require reporting under the rules of the Commission.
Except as set forth in this Offer to Purchase (including the
Schedules hereto), there have been no contacts, negotiations or transactions
between the Funds or the Purchaser, or their respective subsidiaries, or, to
the best knowledge of the Funds and the Purchaser, any of the persons listed in
Schedule I hereto, on the one hand, and the Company or its executive officers,
directors or affiliates, on the other hand, concerning a merger, consolidation
or acquisition, tender offer or other acquisition of securities, election of
directors, or a sale or other transfer of a material amount of assets that
would require reporting under the rules of the Commission.
10. SOURCE AND AMOUNT OF FUNDS
The total amount of funds required by the Purchaser to
purchase all of the Shares pursuant to the Offer and to pay related fees and
expenses incurred in connection with the Offer, is estimated at
18
<PAGE>
$14,000,000. The Funds have committed equity capital of more than $300 million
and have executed agreements with the Purchaser to commit sufficient equity
capital to pay for all outstanding Shares at the Offer Price, plus related fees
and expenses.
11. BACKGROUND OF THE OFFER; PAST CONTACTS, TRANSACTIONS OR
NEGOTIATIONS WITH THE COMPANY
In the course of their investment activities, the Funds have
investigated certain investment opportunities arising in connection with
entities that own contingent assets consisting of a claim asserted in a lawsuit
against the United States, relating to certain damages suffered by a savings
institution. In the Fall of 1997, David S. Klafter, an employee of Gotham
Partners Management Co., L.L.C., the managing agent of each of the Funds,
contacted the Company by phone, on behalf of the Funds, and expressed a general
interest in the Funds' making an investment in the Company and discussed the
Action generally. Mr. Klafter also contacted the FDIC on behalf of the Funds in
the Fall of 1997, to confirm that the FDIC is acting as trustee of the Plan.
12. PURPOSE OF THE OFFER
The purpose of the Offer is to make, through the purchase of
Shares, a speculative investment in the outcome of the Action. By tendering
Shares pursuant to the Offering, shareholders will relinquish any rights, as
shareholders, to any benefits to the Company of the outcome of the Action. The
Purchaser has no current plans or proposals that would result in an
extraordinary corporate transaction, such as a merger, reorganization or
liquidation involving the Company, sale or transfer of any material amount of
assets of the Company, any change in the Board of Directors or management of
the Company, any material change in the capitalization or dividend policy of
the Company, any other material change in the Company's corporate structure or
business. However, to the extent information is available, the Purchaser
intends to continuously evaluate the Company and its prospects, and the
Purchaser reserves the right to change its plans and intentions.
13. DIVIDENDS AND DISTRIBUTIONS
If, after September 30, 1997, the Company should (a) split,
combine or otherwise change the Shares or its capitalization from that
disclosed in the September 1997 Form 10-Q, (b) acquire or otherwise cause a
reduction in the number of outstanding Shares or other securities or (c) issue
or sell additional Shares (other than the issuance of Shares under option as
disclosed in the September 1997 Form 10-Q, in accordance with the terms of such
options as such terms have been publicly disclosed in the September 1997 Form
10-Q, 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 14, Purchaser, in its sole discretion, may make such adjustments as it
deems appropriate in the Offer Price and other terms of the Offer, including
without limitation, the number or type of securities offered to be purchased.
If, after September 30, 1997, the Company should declare or
pay any cash dividend on the Shares or other distribution on the Shares, or
issue with respect to the Shares any additional 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 stockholders of record on a date
prior to the transfer of the Shares purchased pursuant to the Offer to
19
<PAGE>
Purchase, or their nominees or transferees on the Company's stock transfer
records, then, subject to the provisions of Section 14, (a) the Offer Price
may, in the sole discretion of Purchaser, 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 stockholders
will (i) be received and held by the tendering stockholders for the account of
Purchaser and will be required to be promptly remitted and transferred by each
tendering stockholder to the Depositary for the account of Purchaser,
accompanied by appropriate documentation of transfer, or (ii) at the direction
of Purchaser, be exercised for the benefit of Purchaser, in which case the
proceeds of such exercise will promptly be remitted to Purchaser. Pending such
remittance and subject to applicable law, Purchaser will be entitled to all
rights and privileges as owner 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 Purchaser in its sole
discretion.
14. CERTAIN CONDITIONS OF THE OFFER
Notwithstanding any other provisions of the Offer, and in
addition to (and not in limitation of) the Purchaser's rights to extend and
amend the Offer at any time in its sole discretion, the Purchaser 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 Shares, may terminate or amend the
Offer as to any Shares not then paid for, if any of the following events shall
occur or be deemed by Purchaser 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 Shares
by Purchaser, 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 or operation by Purchaser, the
Funds or any other affiliate of the Funds of all or any portion of the Shares
or of the business or assets of Purchaser, the Funds or any other affiliate of
the Funds or to compel Purchaser, the Funds or any other affiliate of the Funds
to dispose of or hold separate the Shares or all or any portion of the business
or assets of Purchaser, the Funds or any other affiliate of the Funds or
seeking to impose any limitation on the ability of Purchaser, 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 Purchaser, the Funds
or any other affiliate of the Funds effectively to exercise full rights of
ownership of the Shares, including, without limitation, the right to vote any
Shares acquired or owned by Purchaser, the Funds or any other affiliate of the
Funds on all matters properly presented to the Company's stockholders, (iv)
seeking to require divestiture by Purchaser, the Funds or any other affiliate
of the Funds of any Shares, (v) seeking any material diminution in the benefits
expected to be derived by Purchaser, 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 Purchaser,
might materially adversely affect the Company or Purchaser, the Funds or any
other affiliate of the Funds or the value of the Shares;
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<PAGE>
b. there shall be any action taken, or any statute, rule, regulation,
legislation, interpretation, judgment, order or injunction proposed, enacted,
enforced, promulgated, amended, issued or deemed applicable to (i) Purchaser,
the Funds or any other affiliate of the Funds or the Company or (ii) the Offer
by any government, legislative body or court, or Governmental Entity, that, in
the sole judgment of Purchaser, might, directly or indirectly, result in any of
the consequences referred to in clauses (i) through (vi) of paragraph (a)
above;
c. Purchaser shall have learned of any change that has, since the
filing of the September 1997 Form 10-Q, 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, condition (financial or
otherwise), operations, licenses or franchises, results of operations or
prospects of the Company that, in the sole judgment of the Purchaser, is or may
be materially adverse to the Company, or the Purchaser shall have become aware
of any facts that, in the sole judgment of the Purchaser, have or may have
material adverse significance with respect to either the value of the Company
or the value of the Shares to the Purchaser;
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 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 Purchaser, 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. The Company shall have (i) split, combined or otherwise changed, or
authorized or proposed a split, combination or other change of the Shares or
its capitalization, (ii) acquired or otherwise caused a reduction in the number
of, or authorized or proposed the acquisition or other reduction in the number
of, outstanding Shares or other securities, (iii) issued or sold, or authorized
or proposed the issuance, distribution or sale of, additional Shares (other
than the issuance of Shares under option prior to the filing of the September
1997 Form 10-Q, in accordance with the terms of such options as such terms have
been publicly disclosed in the September 1997 Form 10-Q, shares of any other
class of capital stock, any other class of preferred stock, other voting
securities or any securities convertible into, or rights, warrants or options,
conditional or otherwise, to acquire, any of the foregoing, (iv) declared or
paid, or proposed to declare or pay, any dividend or other distribution,
whether payable in cash, securities or other property, on or with respect to
any shares of capital stock of the Company, (v) altered or proposed to alter
any material term of any outstanding security, (vi) authorized, recommended,
proposed or entered into an agreement, agreement in principle or arrangement or
understanding with respect to any release or relinquishment of any material
contractual or other right of the Company, or (vii) amended or authorized or
proposed any amendment to, the Company's Certificate of Incorporation or
By-laws, or Purchaser shall become aware that the Company shall have proposed
or adopted any such amendment that was not disclosed in publicly available
filings prior to the date hereof;
21
<PAGE>
f. a tender or exchange offer for any Shares shall have been made or
publicly proposed to be made by any other person (including the Company or any
of its subsidiaries or affiliates), or it shall have been publicly disclosed or
Purchaser shall have otherwise learned that (i) any person or "group" (within
the meaning of Section 13(d)(3) of the Exchange Act) shall have acquired or
proposed to acquire beneficial ownership of more than 5% of any class or series
of capital stock of the Company (including the Shares), through the acquisition
of stock, the formation of a group or otherwise, or shall have been granted any
right, option or warrant, conditional or otherwise, to acquire beneficial
ownership of more than 5% of any class or series of capital stock of the
Company (including the Shares), other than acquisitions for bona fide arbitrage
purposes only and other than as disclosed in a Schedule 13D or 13G on file with
the Commission prior to November 14, 1997, (ii) any such person, entity or
group that prior to November 14, 1997, had filed such a Schedule with the
Commission has acquired or proposes to acquire, through the acquisition of
stock, the formation of a group or otherwise, beneficial ownership of 1% or
more of any class or series of capital stock of the Company (including the
Shares), or shall have been granted any right, option or warrant, conditional
or otherwise, to acquire beneficial ownership of 1% or more of any class or
series of capital stock of the Company (including the Shares), (iii) any person
or group shall have entered into a definitive agreement or an agreement in
principle or made a proposal with respect to a tender offer or exchange offer
or a merger, consolidation or other business combination with or involving the
Company or (iv) any person, other than the Purchaser, if not filed prior to the
date hereof, shall have filed a Notification and Report Form under the HSR Act
(or amended a prior filing to increase the applicable filing threshold set
forth therein) or made a public announcement reflecting an intent to acquire
the Company or any assets or subsidiaries of the Company;
g. any approval, permit, authorization or consent of any Governmental
Entity (including those described or referred to in Section 15) shall not have
been obtained on terms satisfactory to Purchaser in its sole discretion; or
h. Purchaser shall have reached an agreement or understanding with the
Company providing for termination of the Offer;
which, in the sole judgment of Purchaser in any such case, and regardless of
the circumstances (including any action or inaction by Purchaser, the Funds or
any other affiliate of the Funds) giving rise to any such condition, makes it
inadvisable to proceed with the Offer and/or with such acceptance for payment
or payment.
The foregoing conditions are for the sole benefit of
Purchaser and may be asserted by Purchaser regardless of the circumstances
giving rise to any such condition or may be waived by Purchaser in whole or in
part at any time and from time to time in its sole discretion. The failure by
Purchaser 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 Purchaser concerning the events described in this Section 14 will be final
and binding upon all parties.
22
<PAGE>
15. CERTAIN LEGAL MATTERS
General. Except as otherwise disclosed herein, based on a
review of publicly available information filed by the Company with the
Commission, the Purchaser is not aware of (i) any license or regulatory permit
that appears to be material to the business of the Company and its
subsidiaries, taken as a whole, that might be adversely affected by the
acquisition of Shares by the Purchaser pursuant to the Offer or (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 Shares by the Purchaser as contemplated
herein. Should any such approval or other action be required or desirable, the
Purchaser currently contemplates that such approval or action would be sought,
except as described below under "State Takeover Laws." While the Purchaser does
not currently intend to delay the acceptance for payment of Shares tendered
pursuant to the Offer pending the outcome of any such matter, there can be no
assurance that any such approval or action, if needed, would be obtained or
would be obtained without substantial conditions or that adverse consequences
might not result to the business of the Company, the Purchaser or the Funds or
that certain parts of the businesses of the Company, the Purchaser 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 Purchaser's obligation under
the Offer to accept for payment and pay for Shares is subject to certain
conditions. See Section 14.
A change of control of the Company and its Old Stone
Securities subsidiary may require filings with the SEC, NASD and State of Rhode
Island. The Purchaser does not expect to acquire or exercise control of the
Company as a result of the Offer. However, if it does control the Company it
will determine whether to make any required state or federal filings or to
cause the Company to terminate operations of its subsidiary.
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 CTS 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.
Purchaser has not attempted to comply with any state takeover
statutes in connection with the Offer. Purchaser believes that the Rhode Island
Business Combination Act of 1990 is inapplicable to the Offer, but whether or
not applicable, the Offer is not conditioned upon approval of the Board of
Directors of the Company under the Rhode Island Business Combination Act of
1990. Purchaser reserves 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 in connection herewith is intended as a waiver of
that right. In the event that any state takeover statute is found applicable to
the Offer, Purchaser might be unable to accept for payment or pay for the
Shares tendered pursuant to the offer or be delayed in continuing or
23
<PAGE>
consummating the Offer. In such case, Purchaser may not be obligated to accept
for payment or pay for any Shares tendered. See Section 14.
Antitrust. Purchaser believes that the Hart-Scott-Rodino
Antitrust Act (the "HSR Act") is inapplicable to the Offer in light of the size
of the Company. If the provisions of the HSR Act were 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
Purchaser of a Notification and Report Form with respect to the Offer, unless
the Purchaser 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 or the FTC requested additional information or material
from the Purchaser 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 Purchaser 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 Purchaser. 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
Purchaser's 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 Purchaser. Private parties may also bring legal action 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.
16. FEES AND EXPENSES
Beacon Hill Partners, Inc. has been retained by the Purchaser
as Information Agent in connection with the Offer. The Information Agent may
contact holders of 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 Shares. The Purchaser
will pay the Information Agent reasonable and customary compensation for all
such services in addition to reimbursing the Information Agent for reasonable
out-of-pocket expenses in connection therewith. The Purchaser has 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.
Harris Trust Company of New York has been retained as the
Depositary. The Purchaser will pay the Depositary reasonable and customary
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.
24
<PAGE>
Purchaser will pay soliciting dealer's fees of $.10 per
Common Share and $.40 per Preferred Share to brokers, dealers and other persons
for soliciting tenders of 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 Purchaser for customary
clerical and mailing expenses incurred by them in forwarding offering materials
to their clients.
17. MISCELLANEOUS
The Offer is not being made to (nor will tenders be accepted
from or on behalf of) holders of Shares in any jurisdiction in which the making
of the Offer or the acceptance thereof would not be in compliance with the
securities, blue-sky or other laws of such jurisdiction. The Purchaser is 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
Purchaser becomes aware of any jurisdiction where the making of the Offer or
the tender of Shares is not in compliance with any applicable law, the
Purchaser will make a good faith effort to comply with such law. If, after such
good faith effort, the Purchaser cannot comply with such law, the Offer will
not be made to (nor will tenders be accepted from or on behalf of) the holders
of Shares residing in such jurisdiction. To the extent the Purchaser becomes
aware of any state law that would limit the class of offerees in the Offer, the
Purchaser 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 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 Purchaser 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 PURCHASER 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 PURCHASER AND THE FUNDS 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, 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).
MANTICORE PROPERTIES, LLC
November 14, 1997
25
<PAGE>
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF THE FUNDS AND THE PURCHASER
The Funds. The Purchaser is wholly owned by the Funds. The
Funds were each formed to engage in the buying and selling of securities for
investment for its own account. Section H Partners, L.P., a New York limited
partnership ("Section H"), is the sole general partner of Gotham and Gotham II.
Karenina Corp., a New York corporation ("Karenina"), and DPB Corp., a New York
corporation ("DPB"), are the sole general partners of Section H. Karenina is
wholly owned by William A. Ackman. DPB is wholly owned by David P. Berkowitz.
Set forth below are the name, business address and present
principal occupation or employment, and material occupations, positions,
offices or employments for the past five years of each director and executive
officer of each of Karenina and DPB. Except as otherwise noted, the business
address of each such person is 110 East 42nd Street, 18th Floor, New York, New
York 10017 and, except as otherwise noted, 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
---- ----------------------------------------
William A. Ackman Director, President, Secretary and
Treasurer of Karenina Corp. (from
October 1993 to present). A General
Partner of Section H from March 1993
to September 1993. Manager of the
Purchaser since 1997.
David P. Berkowitz Director, President, Secretary and
Treasurer of DPB Corp. (from October
1993 to present). A General Partner of
Section H from March 1993 to
September 1993.
S-1
<PAGE>
SCHEDULE II
TRANSACTIONS IN THE SHARES
DATE NO OF SHARES PURCHASED PRICE PER SHARE
- ---- ---------------------- ---------------
None.
S-2
<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
shareholder of the Company or such shareholder'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:
HARRIS TRUST COMPANY OF NEW YORK
By Hand/Overnight Delivery:
By Mail:
Receive Window
Wall Street Station Wall Street Plaza
P.O. Box 1023 88 Pine Street, 19th Floor
New York, New York 10268-1023 New York, New York 10005
Fax:
(212) 701-7636
Telephone:
(212) 701-7624
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 Purchaser's 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:
BEACON HILL PARTNERS, INC.
90 Broad Street
20th Floor
New York, New York 10004
(800) 253-3814
(Toll Free)
(212) 843-8500
(Call Collect)
<PAGE>
LETTER OF TRANSMITTAL
To Tender Any and All Shares of Common Stock
of
Old Stone Corporation
Pursuant to the Offer to Purchase
Any and All Shares of Common Stock
and
Any and All Shares of Cumulative Voting Convertible Preferred Stock, Series B
of
Old Stone Corporation
Dated November 14, 1997
by
Manticore Properties, LLC
- -------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON FRIDAY, DECEMBER 12, 1997,
UNLESS THE OFFER IS EXTENDED.
- -------------------------------------------------------------------------------
The Depositary for the Offer is:
Harris Trust Company of New York
By Mail: By Hand/Overnight Delivery:
Wall Street Station Receive Window
P.O. Box 1023 Wall Street Plaza
New York, New York 10268-1023 88 Pine Street, 19th Floor
New York, New York 10005
Fax:
(212) 701-7636
Telephone:
(212) 701-7624
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. YOU MUST SIGN THIS LETTER OF
TRANSMITTAL WHERE INDICATED BELOW AND COMPLETE THE SUBSTITUTE FORM W-9
PROVIDED BELOW.
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF COMMON SHARES TENDERED
- --------------------------------------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S)
(PLEASE FILL IN, IF BLANK, EXACTLY AS NAME(S) APPEARS COMMON SHARE CERTIFICATE(S) AND COMMON SHARE(S)
ON COMMON SHARE CERTIFICATE(S)) TENDERED
(ATTACH ADDITIONAL LIST, IF NECESSARY)
- ------------------------------------------------------------- -------------------------------------------------------------
COMMON COMMON SHARES
SHARE EVIDENCED
CERTIFICATE BY SHARE COMMON SHARES
NUMBER(S)* CERTIFICATE(S)* TENDERED**
--------------------- -------------------- ----------------
<S> <C> <C> <C>
--------------------- -------------------- ----------------
--------------------- -------------------- ----------------
--------------------- -------------------- ----------------
--------------------- -------------------- ----------------
--------------------- -------------------- ----------------
TOTAL SHARES
- ------------------------------------------------------------- --------------------- -------------------- ----------------
* Need not be completed by shareholders delivering Common Shares by book-entry transfer.
** Unless otherwise indicated, it will be assumed that all Common Shares evidenced by each Common Share
Certificate delivered to the Depositary are being tendered hereby. See Instruction 4.
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
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 shareholders either
if certificates evidencing Common Shares (as defined below) are to be forwarded
herewith or if delivery of Common Shares is to be made by book-entry transfer
to the Depositary's account at The Depository Trust Company ("DTC") or the
Philadelphia Depository Trust Company ("PDTC") (each a "Book-Entry Transfer
Facility" and collectively, the "Book-Entry Transfer Facilities") pursuant to
the book-entry transfer procedure described in Section 2 of the Offer to
Purchase (as defined below). Delivery of documents to a Book-Entry Transfer
Facility does not constitute delivery to the Depositary.
Shareholders whose certificates evidencing Common Shares ("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 who wish to tender their Common 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 COMMON 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
- ------------------------------------------------------------------------------
Check Box of Applicable Book-Entry Transfer Facility:
(CHECK ONE) [ ] DTC [ ] PDTC
Account Number ___________________ Transaction Code Number _________________
[ ] CHECK HERE IF COMMON 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: ___________________________
<PAGE>
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE INSTRUCTIONS SET FORTH IN THIS
LETTER OF TRANSMITTAL CAREFULLY.
Ladies and Gentlemen:
The undersigned hereby tenders to Manticore Properties, LLC, a
Delaware limited liability company ("Purchaser") wholly owned by Gotham
Partners, L.P., a New York limited partnership ("Gotham"), and Gotham Partners
II, L.P., a New York limited partnership ("Gotham II") (together, the "Funds"),
the above described shares of common stock, par value $1.00 per share ("Common
Shares") of Old Stone Corporation, a Rhode Island corporation (the "Company"),
pursuant to Purchaser's offer to purchase any and all outstanding Common Shares
and any and all outstanding Preferred Shares, par value $1.00 per share, of the
Company (the "Preferred Shares" and together with the Common Shares, the
"Shares"), at $1.00 per Common Share and $4.00 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, dated
November 14, 1997 (the "Offer to Purchase"), receipt of which is hereby
acknowledged, and in this Letter of Transmittal (which, together with the
Letter of Transmittal relating to the Preferred Shares, as amended from time to
time, constitute the "Offer"). The undersigned understands that the Purchaser
reserves the right to transfer or assign, in whole or from time to time in
part, to one or more of its 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 (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, Purchaser 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) and rights declared, paid or
distributed in respect of such Shares after September 30, 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 evidencing such Shares and all Distributions, or
transfer ownership of such Shares and all Distributions on the account books
maintained by a Book-Entry Transfer Facility, together, in either case, with
all accompanying evidences of transfer and authenticity, to or upon the order
of Purchaser, (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 William A. Ackman and David S. Klafter of the Purchaser 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 tendered by the undersigned
and accepted for payment by the Purchaser (and any and all Distributions). 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 Purchaser accepts 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 securities) 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 Purchaser 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 shareholders
of the Company or any adjournment or
<PAGE>
postponement thereof, by written consent in lieu of any such meeting or
otherwise, and the Purchaser reserves the right to require that, in order for
Shares or other securities to be deemed validly tendered, immediately upon the
Purchaser's acceptance for payment of such Shares, the Purchaser 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 Purchaser, Purchaser 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 and
Distributions will be subject to any adverse claim. The undersigned, upon
request, shall execute and deliver all additional documents deemed by the
Depositary or Purchaser 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 Purchaser 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,
Purchaser 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 Purchaser in its sole 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. Purchaser's acceptance of such Shares for payment
will constitute a binding agreement between the undersigned and Purchaser 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." 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 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 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 in the name(s) of, and/or mail such check and Share Certificates
to, the person(s) so indicated. The undersigned recognizes that Purchaser has
no obligation, pursuant to the Special Payment Instructions, to transfer any
Shares from the name of the registered holder(s) thereof if Purchaser does not
purchase any of the Shares tendered hereby.
<PAGE>
SPECIAL PAYMENT INSTRUCTIONS
FOR COMMON SHARES
(See Instructions 1, 5, 6 and 7)
To be completed ONLY if the check for the purchase price of Common
Shares purchased or Common Share Certificates evidencing Common Shares not
tendered or not purchased are to be issued in the name of someone other than
the undersigned.
Issue [ ]check and/or Common Share Certificate(s) to:
Name:
----------------------------
(Print)
Address:
- ---------------------------------
- ---------------------------------
- ---------------------------------
(Zip Code)
- ---------------------------------
Taxpayer Identification or Social Security Number
(See Substitute Form W-9 on reverse side)
---------------------------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
FOR COMMON SHARES
(See Instructions 1, 5 and 7)
To be completed ONLY if the check for the purchase price of Common
Shares purchased or Common Share Certificates evidencing Common Shares not
tendered or not purchased are to be mailed to someone other than the
undersigned, or to the undersigned at an address other than that shown under
"Description of Common Shares Tendered."
Mail [ ] check and/or Common Share Certificate(s) to:
Name:
- ---------------------------------
(Print)
Address:
- ---------------------------------
- ---------------------------------
- ---------------------------------
(Zip Code)
- ---------------------------------
<PAGE>
IMPORTANT
COMMON SHAREHOLDERS: SIGN HERE
(Also Please Complete Substitute Form W-9 Included Herein)
X____________________________________________________________________________
X
X____________________________________________________________________________
X
(SIGNATURE(S) OF HOLDER(S))
Dated: _____________________________________
Must be signed by registered holder(s) exactly as name(s) appear(s) on Common
Share Certificates or on a security position listing or by a person(s)
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. Name(s):
--------------------------------------------------------------------------
--------------------------------------------------------------------------
(PLEASE PRINT)
Capacity (full title)
--------------------------------------------------------
Address:
--------------------------------------------------------
--------------------------------------------------------
--------------------------------------------------------
(INCLUDE ZIP CODE)
Area Code and Telephone No.:
-------------------------------------------------
Taxpayer Identification or Social Security No.:
------------------------------
(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 Common Shares was solicited by a broker. Name
and address of broker below.
--------------------------------------------------------------------
Name of broker
--------------------------------------------------------------------
Name of firm
--------------------------------------------------------------------
Address of firm
<PAGE>
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 a 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 a 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.
Shareholders 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
Purchaser, 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 a 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 ANY
BOOK-ENTRY TRANSFER FACILITY, IS AT THE OPTION AND RISK OF THE TENDERING
SHAREHOLDER, 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.
No alternative, conditional or contingent tenders will be accepted and
no fractional Shares will be purchased. By execution of this Letter of
Transmittal (or a facsimile hereof), all tendering shareholders waive any right
to receive any notice of the acceptance of their Shares for payment.
<PAGE>
3. INADEQUATE SPACE. If the space provided herein under "Description
of Shares Tendered" is inadequate, the Share Certificate numbers, the number of
Shares evidenced by such Share Certificates and the number of Shares tendered
should be listed on a separate schedule and attached hereto.
4. PARTIAL TENDERS (NOT APPLICABLE TO SHAREHOLDERS WHO TENDER BY
BOOK-ENTRY TRANSFER). If fewer than all the Shares evidenced by any Share
Certificate delivered to the Depositary herewith are to be tendered hereby,
fill in the number of Shares which are to be tendered in the box entitled
"Number of Shares Tendered." In such cases, new Share Certificate(s) evidencing
the remainder of the 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 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 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 acting in a fiduciary or
representative capacity, such person should so indicate when signing, and
proper evidence satisfactory to Purchaser of such person's authority so to act
must be submitted.
6. STOCK TRANSFER TAXES. Except as otherwise provided in this
Instruction 6, Purchaser will pay all stock 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 Certificate(s) 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 stock 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
<PAGE>
satisfactory to Purchaser 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) 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 Purchaser 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 shareholder 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 shareholder is not subject to backup withholding of federal
income tax. If a tendering shareholder has been notified by the Internal
Revenue Service that such shareholder is subject to backup withholding, such
shareholder must cross out item (2) of the Certification box of the Substitute
Form W-9, unless such shareholder has since been notified by the Internal
Revenue Service that such shareholder is no longer subject to backup
withholding. Failure to provide the information on the Substitute Form W-9 may
subject the tendering shareholder to 31% federal income tax withholding on the
payment of the purchase price of all Shares purchased from such shareholder. If
the tendering shareholder has not been issued a TIN and has applied for one or
intends to apply for one in the near future, such shareholder 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
shareholder until a TIN is provided to the Depositary.
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 shareholder should indicate such by writing the word "Lost" under the
column labeled "Common Share Certificate Number(s)" in the box labeled
"Description of Common Shares Tendered". By indicating that such Shares
Certificate are lost, the tendering shareholder shall be deemed to have made
the following representations and warranties to, and agreements with, the
Purchaser: (i) the undersigned is the record owner of the Shares being tendered
pursuant to this Letter of Transmittal, (ii) the undersigned has lost the
Shares Certificate 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 Purchaser 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 Purchaser 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 Purchaser and its affiliates from any losses and damages which
they may incur arising out of the breach of any of the foregoing
representations and agreements.
<PAGE>
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).
<PAGE>
IMPORTANT TAX INFORMATION
Under the federal income tax law, a shareholder whose tendered Shares
are accepted for payment is required by law to provide the Depositary (as
payer) with such shareholder's correct TIN on Substitute Form W-9 below. If
such shareholder is an individual, the TIN is such shareholder's social
security number. If the Depositary is not provided with the correct TIN, the
shareholder may be subject to a $50 penalty imposed by the Internal Revenue
Service. In addition, payments that are made to such shareholder with respect
to Shares purchased pursuant to the Offer may be subject to backup withholding
of 31%.
Certain shareholders (including, among others, all corporations and
certain foreign individuals) are not subject to these backup withholding and
reporting requirements. In order for a foreign 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 shareholder. Backup withholding is not an
additional tax. Rather, the tax liability of persons subject to backup
withholding will be reduced by the amount of tax withheld. If withholding
results in an overpayment of taxes, a refund may be obtained from the Internal
Revenue Service.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup withholding on payments that are made to a
shareholder with respect to Shares purchased pursuant to the Offer, the
shareholder is required to notify the Depositary of such shareholder's correct
TIN by completing the form below certifying (a) that the TIN provided on
Substitute Form W-9 is correct (or that such shareholder is awaiting a TIN),
and (b) that (i) such shareholder has not been notified by the Internal Revenue
Service that such shareholder 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 shareholder that such shareholder is no longer
subject to backup withholding.
WHAT NUMBER TO GIVE THE DEPOSITARY
The shareholder is required to give the Depositary the social security
number or employer identification number of the record 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 shareholder has not been issued a
TIN and has applied for a number or intends to apply for a number in the near
future, the shareholder 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 shareholder until a TIN is provided to the Depositary.
<PAGE>
ALL TENDERING SHAREHOLDERS MUST COMPLETE THE FOLLOWING:
PAYER'S NAME: HARRIS TRUST COMPANY OF NEW YORK
<TABLE>
<CAPTION>
<S> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------
PART I--Taxpayer Identification Number--
Enter taxpayer identification number in the box at
SUBSTITUTE right. (For most individuals, this is your social security __________________________
For all accounts number. If you do not have a number, see obtaining Social Security Number
a Number in the enclosed Guidelines.) Certify by or
Form W-9 signing and dating below. Note: If the account is in __________________________
more than one name, see the chart in the enclosed Employee Identification Number
Guidelines to determine which number to give the
payer.
- ----------------------------------------------------------------------------------------------------------------------
PART II--For Payees Exempt From Backup
Withholding, see the enclosed Guidelines
and complete as instructed therein.
DEPARTMENT OF THE CERTIFICATION--Under penalties of perjury, I certify that:
TREASURY INTERNAL (1) The number shown on this form is my correct Taxpayer Identification Number (or I
REVENUE am waiting for a number to be issued to me), and
PAYER'S REQUEST (2) I am not subject to backup withholding either because I have not been notified by the
FOR TAXPAYER Internal Revenue Service (the "IRS") that I am subject to backup withholding as a
IDENTIFICATION NUMBER result of failure to report all interest or dividends, or the IRS has notified me that
I am no longer subject to backup withholding.
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:________________
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
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.
The Information Agent for the Offer is:
Beacon Hill Partners, Inc.
90 Broad Street
20th Floor
New York, New York 10004
(800) 253-3814
(Toll Free)
(212) 843-8500
(Call Collect)
November 14, 1997
<PAGE>
LETTER OF TRANSMITTAL
TO TENDER ANY AND ALL SHARES OF CUMULATIVE VOTING CONVERTIBLE
PREFERRED STOCK, SERIES B
OF
OLD STONE CORPORATION
PURSUANT TO THE OFFER TO PURCHASE
ANY AND ALL SHARES OF COMMON STOCK AND
ANY AND ALL SHARES OF CUMULATIVE VOTING CONVERTIBLE PREFERRED STOCK, SERIES B
OF
OLD STONE CORPORATION
DATED NOVEMBER 14, 1997
BY
MANTICORE PROPERTIES, LLC
- -------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON FRIDAY, DECEMBER 12, 1997,
UNLESS THE OFFER IS EXTENDED.
- -------------------------------------------------------------------------------
The Depositary for the Offer is:
HARRIS TRUST COMPANY OF NEW YORK
By Mail: By Hand/Overnight Delivery:
Wall Street Station Receive Window
P.O. Box 1023 Wall Street Plaza
New York, New York 10268-1023 88 Pine Street, 19th Floor
New York, New York 10005
Fax:
(212) 701-7636
Telephone:
(212) 701-7624
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. YOU MUST SIGN THIS LETTER OF
TRANSMITTAL WHERE INDICATED BELOW AND COMPLETE THE SUBSTITUTE FORM W-9
PROVIDED BELOW.
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF PREFERRED SHARES TENDERED
- --------------------------------------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S) PREFERRED SHARE CERTIFICATE(S) AND PREFERRED SHARE(S)
(PLEASE FILL IN, IF BLANK, EXACTLY AS NAME(S) APPEARS TENDERED
ON PREFERRED SHARE CERTIFICATE(S)) (ATTACH ADDITIONAL LIST, IF NECESSARY)
- ------------------------------------------------------------- ------------------------------------------------------------
<S> <C> <C> <C>
PREFERRED
PREFERRED SHARES
SHARE EVIDENCED PREFERRED
CERTIFICATE BY SHARE SHARES
NUMBER(S)* CERTIFICATE(S)* TENDERED**
--------------------- -------------------- ----------------
--------------------- -------------------- ----------------
--------------------- -------------------- ----------------
--------------------- -------------------- ----------------
--------------------- -------------------- ----------------
--------------------- -------------------- ----------------
TOTAL SHARES
- ------------------------------------------------------------- --------------------- -------------------- ----------------
* Need not be completed by shareholders delivering Preferred Shares by book-entry transfer.
** Unless otherwise indicated, it will be assumed that all Preferred Shares evidenced by each Preferred Share
Certificate delivered to the Depositary are being tendered hereby. See Instruction 4.
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
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 shareholders either
if certificates evidencing Preferred Shares (as defined below) are to be
forwarded herewith or if delivery of Preferred Shares is to be made by
book-entry transfer to the Depositary's account at The Depository Trust Company
("DTC") or the Philadelphia Depository Trust Company ("PDTC") (each a
"Book-Entry Transfer Facility" and collectively, the "Book-Entry Transfer
Facilities") pursuant to the book-entry transfer procedure described in Section
2 of the Offer to Purchase (as defined below). Delivery of documents to a
Book-Entry Transfer Facility does not constitute delivery to the Depositary.
Shareholders whose certificates evidencing Preferred Shares ("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 who wish to tender their Preferred 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 PREFERRED 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
- ------------------------------------------------------------------------------
Check Box of Applicable Book-Entry Transfer Facility:
(CHECK ONE) [ ] DTC [ ] PDTC
Account Number ___________________ Transaction Code Number _________________
[ ] CHECK HERE IF PREFERRED 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: __________________________
<PAGE>
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE INSTRUCTIONS SET FORTH IN THIS
LETTER OF TRANSMITTAL CAREFULLY.
Ladies and Gentlemen:
The undersigned hereby tenders to Manticore Properties, LLC, a
Delaware limited liability company ("Purchaser") wholly owned by Gotham
Partners, L.P., a New York limited partnership ("Gotham"), and Gotham Partners
II, L.P., a New York limited partnership ("Gotham II") (together, the "Funds"),
the above described shares of Cumulative Convertible Voting Preferred Stock,
Series B, par value $1.00 per share ("Preferred Shares"), of Old Stone
Corporation, a Rhode Island corporation (the "Company"), pursuant to
Purchaser's offer to purchase any and all outstanding Common Shares, par value
$1.00 per share, of the Company, (the "Common Shares" and together with the
Preferred Shares, the "Shares"), and any and all Preferred Shares, at $1.00 per
Common Share and $4.00 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, dated November 14, 1997 (the
"Offer to Purchase"), receipt of which is hereby acknowledged, and in this
Letter of Transmittal (which, together with the Letter of Transmittal relating
to Common Shares, as amended from time to time, constitute the "Offer"). The
undersigned understands that the Purchaser reserves the right to transfer or
assign, in whole or from time to time in part, to one or more of its
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 (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, Purchaser 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) and rights declared, paid or
distributed in respect of such Shares after September 30, 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 evidencing such Shares and all Distributions, or
transfer ownership of such Shares and all Distributions on the account books
maintained by a Book-Entry Transfer Facility, together, in either case, with
all accompanying evidences of transfer and authenticity, to or upon the order
of Purchaser, (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 William A. Ackman and David S. Klafter of the Purchaser 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 tendered by the undersigned
and accepted for payment by the Purchaser (and any and all Distributions). 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 Purchaser accepts 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 securities) 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 Purchaser 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 shareholders
of the Company or any adjournment or
<PAGE>
postponement thereof, by written consent in lieu of any such meeting or
otherwise, and the Purchaser reserves the right to require that, in order for
Shares or other securities to be deemed validly tendered, immediately upon the
Purchaser's acceptance for payment of such Shares, the Purchaser 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 Purchaser, Purchaser 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 and
Distributions will be subject to any adverse claim. The undersigned, upon
request, shall execute and deliver all additional documents deemed by the
Depositary or Purchaser 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 Purchaser 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,
Purchaser 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 Purchaser in its sole 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. Purchaser's acceptance of such Shares for payment
will constitute a binding agreement between the undersigned and Purchaser 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." 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 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 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 in the name(s) of, and/or mail such check and Share Certificates
to, the person(s) so indicated. The undersigned recognizes that Purchaser has
no obligation, pursuant to the Special Payment Instructions, to transfer any
Shares from the name of the registered holder(s) thereof if Purchaser does not
purchase any of the Shares tendered hereby.
<PAGE>
SPECIAL PAYMENT INSTRUCTIONS
FOR PREFERRED SHARES
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if the check for the purchase price of Preferred
Shares purchased or Preferred Share Certificates evidencing Preferred Shares
not tendered or not purchased are to be issued in the name of someone other
than the undersigned.
Issue [ ] check and/or Preferred Share Certificate(s) to:
Name:
------------------------------
(PRINT)
Address:
- -----------------------------------
- -----------------------------------
- -----------------------------------
(ZIP CODE)
- -----------------------------------
TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NUMBER
(See Substitute Form W-9 on reverse side)
-----------------------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
FOR PREFERRED SHARES
(SEE INSTRUCTIONS 1, 5 AND 7)
To be completed ONLY if the check for the purchase price of Preferred
Shares purchased or Preferred Share Certificates evidencing Shares not tendered
or not purchased are to be mailed to someone other than the undersigned, or to
the undersigned at an address other than that shown under "Description of
Preferred Shares Tendered."
Mail [ ] check and/or Preferred Share Certificate(s) to:
Name:
------------------------------
(PRINT)
Address:
- -----------------------------------
- -----------------------------------
- -----------------------------------
(ZIP CODE)
- -----------------------------------
<PAGE>
IMPORTANT
PREFERRED SHAREHOLDERS: SIGN HERE
(Also Please Complete Substitute Form W-9 Included Herein)
X_________________________________________________________________________
X
X_________________________________________________________________________
X
(SIGNATURE(S) OF HOLDER(S))
Dated: _____________________________________
Must be signed by registered holder(s) exactly as name(s) appear(s) on
Preferred Share Certificates or on a security position listing or by a
person(s) 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.
Name(s):
----------------------------------------------------------------------
----------------------------------------------------------------------
(PLEASE PRINT)
Capacity (full title)
----------------------------------------------------------------------
Address:
----------------------------------------------------------------------
----------------------------------------------------------------------
(INCLUDE ZIP CODE)
Area Code and Telephone No.:
--------------------------------------------------
Taxpayer Identification or Social Security No.:
-------------------------------
(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 Preferred Shares was solicited by a broker.
Name and address of broker below.
----------------------------------------------------------------------
Name of broker
----------------------------------------------------------------------
Name of firm
----------------------------------------------------------------------
Address of firm
<PAGE>
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 a 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 a 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.
Shareholders 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
Purchaser, 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 a 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 ANY
BOOK-ENTRY TRANSFER FACILITY, IS AT THE OPTION AND RISK OF THE TENDERING
SHAREHOLDER, 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.
No alternative, conditional or contingent tenders will be accepted and
no fractional Shares will be purchased. By execution of this Letter of
Transmittal (or a facsimile hereof), all tendering shareholders waive any right
to receive any notice of the acceptance of their Shares for payment.
<PAGE>
3. INADEQUATE SPACE. If the space provided herein under "Description
of Shares Tendered" is inadequate, the Share Certificate numbers, the number of
Shares evidenced by such Share Certificates and the number of Shares tendered
should be listed on a separate schedule and attached hereto.
4. PARTIAL TENDERS (NOT APPLICABLE TO SHAREHOLDERS WHO TENDER BY
BOOK-ENTRY TRANSFER). If fewer than all the Shares evidenced by any Share
Certificate delivered to the Depositary herewith are to be tendered hereby,
fill in the number of Shares which are to be tendered in the box entitled
"Number of Shares Tendered." In such cases, new Share Certificate(s) evidencing
the remainder of the 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 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 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 acting in a fiduciary or
representative capacity, such person should so indicate when signing, and
proper evidence satisfactory to Purchaser of such person's authority so to act
must be submitted.
6. STOCK TRANSFER TAXES. Except as otherwise provided in this
Instruction 6, Purchaser will pay all stock 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 Certificate(s) 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 stock 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
<PAGE>
satisfactory to Purchaser 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) 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 Purchaser 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 shareholder 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 shareholder is not subject to backup withholding of federal
income tax. If a tendering shareholder has been notified by the Internal
Revenue Service that such shareholder is subject to backup withholding, such
shareholder must cross out item (2) of the Certification box of the Substitute
Form W-9, unless such shareholder has since been notified by the Internal
Revenue Service that such shareholder is no longer subject to backup
withholding. Failure to provide the information on the Substitute Form W-9 may
subject the tendering shareholder to 31% federal income tax withholding on the
payment of the purchase price of all Shares purchased from such shareholder. If
the tendering shareholder has not been issued a TIN and has applied for one or
intends to apply for one in the near future, such shareholder 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
shareholder until a TIN is provided to the Depositary.
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 shareholder should indicate such by writing the word "Lost" under the
column labeled "Preferred Share Certificate Number(s)" in the box labeled
"Description of Preferred Shares Tendered". By indicating that such Shares
Certificate are lost, the tendering shareholder shall be deemed to have made
the following representations and warranties to, and agreements with, the
Purchaser: (i) the undersigned is the record owner of the Shares being tendered
pursuant to this Letter of Transmittal, (ii) the undersigned has lost the
Shares Certificate 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 Purchaser 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 Purchaser 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 Purchaser and its affiliates from any losses and damages which
they may incur arising out of the breach of any of the foregoing
representations and agreements.
<PAGE>
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).
<PAGE>
IMPORTANT TAX INFORMATION
Under the federal income tax law, a shareholder whose tendered Shares
are accepted for payment is required by law to provide the Depositary (as
payer) with such shareholder's correct TIN on Substitute Form W-9 below. If
such shareholder is an individual, the TIN is such shareholder's social
security number. If the Depositary is not provided with the correct TIN, the
shareholder may be subject to a $50 penalty imposed by the Internal Revenue
Service. In addition, payments that are made to such shareholder with respect
to Shares purchased pursuant to the Offer may be subject to backup withholding
of 31%.
Certain shareholders (including, among others, all corporations and
certain foreign individuals) are not subject to these backup withholding and
reporting requirements. In order for a foreign 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 shareholder. Backup withholding is not an
additional tax. Rather, the tax liability of persons subject to backup
withholding will be reduced by the amount of tax withheld. If withholding
results in an overpayment of taxes, a refund may be obtained from the Internal
Revenue Service.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup withholding on payments that are made to a
shareholder with respect to Shares purchased pursuant to the Offer, the
shareholder is required to notify the Depositary of such shareholder's correct
TIN by completing the form below certifying (a) that the TIN provided on
Substitute Form W-9 is correct (or that such shareholder is awaiting a TIN),
and (b) that (i) such shareholder has not been notified by the Internal Revenue
Service that such shareholder 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 shareholder that such shareholder is no longer
subject to backup withholding.
WHAT NUMBER TO GIVE THE DEPOSITARY
The shareholder is required to give the Depositary the social security
number or employer identification number of the record 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 shareholder has not been issued a
TIN and has applied for a number or intends to apply for a number in the near
future, the shareholder 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 shareholder until a TIN is provided to the Depositary.
<PAGE>
ALL TENDERING SHAREHOLDERS MUST COMPLETE THE FOLLOWING:
PAYER'S NAME: HARRIS TRUST COMPANY OF NEW YORK
<TABLE>
<CAPTION>
<S> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------
PART I--Taxpayer Identification Number--
Enter taxpayer identification number in the box at
SUBSTITUTE right. (For most individuals, this is your social security __________________________
For all accounts number. If you do not have a number, see obtaining Social Security Number
a Number in the enclosed Guidelines.) Certify by or
Form W-9 signing and dating below. Note: If the account is in __________________________
more than one name, see the chart in the enclosed Employee Identification Number
Guidelines to determine which number to give the
payer.
- ------------------------------------------------------------------------------------------------------------------------
PART II--For Payees Exempt From Backup
Withholding, see the enclosed Guidelines
and complete as instructed therein.
DEPARTMENT OF THE CERTIFICATION--Under penalties of perjury, I certify that:
TREASURY INTERNAL (1) The number shown on this form is my correct Taxpayer Identification Number (or I
REVENUE am waiting for a number to be issued to me), and
PAYER'S REQUEST (2) I am not subject to backup withholding either because I have not been notified by the
FOR TAXPAYER Internal Revenue Service (the "IRS") that I am subject to backup withholding as a
IDENTIFICATION NUMBER result of failure to report all interest or dividends, or the IRS has notified me that I am
no longer subject to backup withholding.
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: ________________
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
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.
The Information Agent for the Offer is:
BEACON HILL PARTNERS, INC.
90 Broad Street
20th Floor
New York, New York 10004
(800) 253-3814
(Toll Free)
(212) 843-8500
(Call Collect)
November 14, 1997
<PAGE>
NOTICE OF GUARANTEED DELIVERY
FOR
TENDERS OF COMMON STOCK PURSUANT TO THE
OFFER TO PURCHASE FOR CASH
BY MANTICORE PROPERTIES, LLC
ANY AND ALL OUTSTANDING SHARES OF COMMON STOCK
AND
ANY AND ALL OUTSTANDING SHARES OF
CUMULATIVE VOTING CONVERTIBLE PREFERRED STOCK, SERIES B
OF
OLD STONE CORPORATION
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 certificates for shares of Common Stock, par value
$1.00 per share ("Common Shares") of Old Stone Corporation, a Rhode Island
corporation (the "Company") 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 transmissions or mail
to the Depositary and must include a 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:
HARRIS TRUST COMPANY OF NEW YORK
By Hand/Overnight Delivery:
By Mail: Receive Window
Wall Street Station Wall Street Plaza
P.O. Box 1023 88 Pine Street, 19th Floor
New York, New York 10268-1023 New York, New York 10005
Fax:
(212) 701-7636
Telephone:
(212) 701-7624
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS, OR TRANSMISSION OF
INSTRUCTIONS VIA A FACSIMILE NUMBER, OTHER THAN AS SET FORTH ABOVE DOES NOT
CONSTITUTE A VALID DELIVERY.
This form is not to be used to guarantee signatures. If a signature on
a Letter of Transmittal is required to be guaranteed by an Eligible Institution
under the instructions thereto, such signature guarantee must appear in the
applicable space provided in the signature box on the Letter of Transmittal.
<PAGE>
(FOR COMMON SHARES ONLY)
LADIES AND GENTLEMEN:
The undersigned hereby tenders to Manticore Properties, LLC (the
"Purchaser"), which is wholly owned by Gotham Partners, L.P., a New York
limited partnership ("Gotham"), and Gotham Partners II, L.P., a New York
limited partnership ("Gotham II"), upon the terms and subject to the conditions
set forth in the Purchaser's Offer to Purchase dated November 14, 1997 (the
"Offer to Purchase") and the related Letters of Transmittal, receipt of which
is hereby acknowledged, the number of Common 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.
Number of Common Shares
--------------------------------------------------------
Name(s) of Record Holder(s):
---------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Certificate Nos. (if available):
-----------------------------------------------
PLEASE PRINT
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Address(es):
-------------------------------------------------------------------
ZIP CODE
Area Code and Tel. No.:
(Check one box if Common Shares will be tendered by book-entry transfer)
[ ] The Depository Trust Company
[ ] Philadelphia Depository Trust Company
Signature(s):
------------------------------------------------------------------
- -------------------------------------------------------------------------------
Account Number
-----------------------------------------------------------------
- -------------------------------------------------------------------------------
Dated:
------------------------------
<PAGE>
GUARANTEE
(FOR COMMON SHARES ONLY)
(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 certificates representing the Common Shares
tendered hereby, in proper form for transfer, or a Book-Entry Confirmation with
respect to such Common 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.
The Eligible Institution that completes this form must communicate the
guarantee to the Depositary and must deliver the Letter of Transmittal and
certificates for Common Shares 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 CERTIFICATES FOR COMMON SHARES WITH THIS NOTICE;
CERTIFICATES FOR COMMON SHARES SHOULD BE SENT WITH YOUR LETTER OF
TRANSMITTAL.
<PAGE>
NOTICE OF GUARANTEED DELIVERY
FOR
TENDERS OF CUMULATIVE VOTING CONVERTIBLE PREFERRED STOCK, SERIES B
OFFER TO PURCHASE FOR CASH
BY
MANTICORE PROPERTIES, LLC
ANY AND ALL OUTSTANDING SHARES OF COMMON STOCK
AND
ANY AND ALL OUTSTANDING SHARES OF
CUMULATIVE VOTING CONVERTIBLE PREFERRED STOCK, SERIES B
OF
OLD STONE CORPORATION
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 certificates for shares of Cumulative Voting
Convertible Preferred Stock, Series B, par value $1.00 per share ("Preferred
Shares") of Old Stone Corporation, a Rhode Island corporation (the "Company")
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 transmissions or mail to the Depositary and
must include a 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:
HARRIS TRUST COMPANY OF NEW YORK
By Hand/Overnight Delivery:
By Mail: Receive Window
Wall Street Station Wall Street Plaza
P.O. Box 1023 88 Pine Street, 19th Floor
New York, New York 10268-1023 New York, New York 10005
Fax:
(212) 701-7636
Telephone:
(212) 701-7624
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS, OR TRANSMISSION OF
INSTRUCTIONS VIA A FACSIMILE NUMBER, OTHER THAN AS SET FORTH ABOVE
DOES NOT CONSTITUTE A VALID DELIVERY.
This form is not to be used to guarantee signatures. If a signature on
a Letter of Transmittal is required to be guaranteed by an Eligible Institution
under the instructions thereto, such signature guarantee must appear in the
applicable space provided in the signature box on the Letter of Transmittal.
<PAGE>
(FOR PREFERRED SHARES ONLY)
LADIES AND GENTLEMEN:
The undersigned hereby tenders to Manticore Properties, LLC (the
"Purchaser"), which is wholly owned by Gotham Partners, L.P., a New York
limited partnership ("Gotham"), and Gotham Partners II, L.P., a New York
limited partnership ("Gotham II"), upon the terms and subject to the conditions
set forth in the Purchaser's Offer to Purchase dated November 14, 1997 (the
"Offer to Purchase") and the related Letters of Transmittal, receipt of which
is hereby acknowledged, the number of Preferred 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.
Number of Preferred Shares
-----------------------------------------------------
Name(s) of Record Holder(s):
---------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Certificate Nos. (if available):
-----------------------------------------------
PLEASE PRINT
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Address(es):
-------------------------------------------------------------------
ZIP CODE
Area Code and Tel. No.:
--------------------------------------------------------
(Check one box if Preferred Shares will be tendered by book-entry transfer)
[ ] The Depository Trust Company
[ ] Philadelphia Depository Trust Company
Signature(s):
------------------------------------------------------------------
- -------------------------------------------------------------------------------
Account Number
-----------------------------------------------------------------
- -------------------------------------------------------------------------------
Dated:
---------------------------------
<PAGE>
GUARANTEE
(FOR PREFERRED SHARES ONLY)
(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 certificates representing the Preferred Shares
tendered hereby, in proper form for transfer, or a Book-Entry Confirmation with
respect to such Preferred 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.
The Eligible Institution that completes this form must communicate the
guarantee to the Depositary and must deliver the Letter of Transmittal and
certificates for Preferred Shares 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 CERTIFICATES FOR PREFERRED SHARES WITH THIS
NOTICE; CERTIFICATES FOR PREFERRED SHARES SHOULD BE SENT
WITH YOUR LETTER OF TRANSMITTAL.
<PAGE>
OFFER TO PURCHASE FOR CASH
ANY AND ALL OUTSTANDING SHARES OF COMMON STOCK
AND
ANY AND ALL OUTSTANDING SHARES OF CUMULATIVE
VOTING CONVERTIBLE PREFERRED STOCK, SERIES B
OF
OLD STONE CORPORATION
AT
$1.00 NET PER COMMON SHARE
AND
$4.00 NET PER
CUMULATIVE VOTING CONVERTIBLE PREFERRED SHARE, SERIES B
BY
MANTICORE PROPERTIES, LLC
- -------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT
NEW YORK CITY TIME, ON FRIDAY, DECEMBER 12, 1997,
UNLESS THE OFFER IS EXTENDED.
- -------------------------------------------------------------------------------
November 14, 1997
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
We have been engaged by Manticore Properties, LLC, a Delaware limited
liability company (the "Purchaser"), wholly owned by Gotham Partners, L.P., a
New York limited partnership ("Gotham"), and Gotham Partners II, L.P., a New
York limited partnership ("Gotham II"; together, the "Funds"), to act as
Information Agent in connection with the Purchaser's offer to purchase all
outstanding shares of common stock, par value $1.00 per share ("Common Shares")
and all outstanding shares of Cumulative Voting Convertible Preferred Stock,
Series B, par value $1.00 per share ("Preferred Shares", and together with the
Common Shares, the "Shares"), of Old Stone Corporation, a Rhode Island
corporation (the "Company"), at a price of $1.00 per Common Share and $4.00 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, dated November 14, 1997 (the "Offer to Purchase"), and in
the related Letters of Transmittal (which, as amended from time to time,
together constitute the "Offer") enclosed herewith.
THE OFFER IS SUBJECT TO CERTAIN TERMS AND CONDITIONS. SEE SECTION 14
OF THE OFFER TO PURCHASE. THE OFFER IS NOT CONDITIONED ON THE RECEIPT OF
FINANCING OR ANY MINIMUM NUMBER OF SHARES BEING TENDERED.
THE PURCHASER WILL PAY SOLICITING DEALER'S FEES OF $.10 PER COMMON
SHARE AND $.40 PER PREFERRED SHARE TO ANY BROKER OR DEALER IN CONNECTION WITH
THE SOLICITATION OF TENDERS OF SHARES PURSUANT TO THE OFFER. IN ADDITION, THE
PURCHASER WILL, UPON REQUEST, REIMBURSE YOU FOR CUSTOMARY MAILING AND HANDLING
EXPENSES INCURRED BY YOU IN FORWARDING THE ENCLOSED MATERIALS TO YOUR CLIENTS.
<PAGE>
Please furnish copies of the enclosed materials to those of your
clients for whose accounts you hold Shares registered in your name or in the
name of your nominee.
For your information and for forwarding to your clients for whom you
hold Shares registered in your name or in the name of your nominee, or who hold
Shares registered in their own names, we are enclosing the following documents:
1. The Offer to Purchase, dated November 14, 1997;
2. The Letter of Transmittal to be used by holders of Common Shares in
accepting the Offer and tendering Common Shares;
3. The Letter of Transmittal to be used by holders of Preferred Shares in
accepting the Offer and tendering Preferred Shares;
4. The Notice of Guaranteed Delivery to be used to accept the Offer if the
certificates evidencing tendered Common Shares (the "Common Share
Certificates") are not immediately available or time will not permit all
required documents to reach the Depositary (as defined in the Offer to
Purchase) prior to the Expiration Date (as defined in the Offer to
Purchase) or the procedure for book-entry transfer cannot be completed on a
timely basis;
5. The Notice of Guaranteed Delivery to be used to accept the Offer if the
certificates evidencing tendered Preferred Shares (the "Preferred Share
Certificates" and with the Common Share Certificates, the "Share
Certificates") are not immediately available or time will not permit all
required documents to reach the Depositary (as defined in the Offer to
Purchase) prior to the Expiration Date (as defined in the Offer to
Purchase) or the procedure for book-entry transfer cannot be completed on a
timely basis;
6. A letter which may be sent to your clients for whose accounts you hold
Shares registered in your name or in the name of your nominees, with space
provided for obtaining such clients' instructions with regard to the Offer;
7. Guidelines of the Internal Revenue Service for Certification of Taxpayer
Identification Number on Substitute Form W-9; and
8. A return envelope addressed to the Depositary.
In order to take advantage of the Offer, duly executed and properly
completed Letter(s) of Transmittal relating to the Common Shares and/or
Preferred Shares tendered and any other required documents should be sent to
the Depositary and certificates representing the tendered Shares should be
delivered, or such Shares should be tendered by book-entry transfer, all in
accordance with the instructions set forth in the Letters of Transmittal and
the Offer to Purchase. 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 Purchaser will purchase, by accepting
for payment, and will pay for the Shares validly tendered and not withdrawn
prior to the Expiration Date promptly after the Expiration Date. For purposes
of the Offer, the Purchaser will be deemed to have accepted for payment, and
thereby purchased, tendered Shares as, if and when the Purchaser gives oral or
written notice to the Depositary of the Purchaser's acceptance of such Shares
for payment pursuant to the Offer. In all cases, payment for Shares purchased
pursuant to the Offer will be made only after timely receipt by the
<PAGE>
Depositary of (i) the Share Certificates or timely confirmation of a book-entry
transfer of such Shares, if such procedure is available, into the Depositary's
account at The Depository Trust Company or the Philadelphia Depositary Trust
Company pursuant to the procedures set forth in Section 2 of the Offer to
Purchase, (ii) Letter(s) of Transmittal (or a facsimile thereof) relating to
the Common Shares and/or Preferred Shares tendered, properly completed and duly
executed, with any required signature guarantees, or an Agent's Message (as
defined in Section 2 of the Offer to Purchase) and (iii) any other documents
required by the Letters of Transmittal.
The Purchaser will pay any stock transfer taxes incident to the
transfer to it of validly tendered Shares, except as otherwise provided in
Instruction 6 of the Letters of Transmittal.
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, DECEMBER 12, 1997, UNLESS THE OFFER IS
EXTENDED.
In order to take advantage of the Offer, a duly executed and properly
completed Letter of Transmittal (or a facsimile thereof), with any required
signature guarantees and any other required documents, should be sent to the
Depositary, and certificates evidencing the tendered Shares should be delivered
or such Shares should be tendered by book-entry transfer, all in accordance
with the Instructions set forth in the Letters of Transmittal and the Offer to
Purchase.
If holders of Shares wish to tender Shares, but it is impracticable
for them to forward their Share Certificates or other required documents to the
Depositary prior to the Expiration Date or to comply with the Procedures for
book-entry transfer on a timely basis, a tender may be effected by following
the guaranteed delivery procedures specified under Section 2 of the Offer to
Purchase.
Any inquiries you may have with respect to the Offer should be
addressed to Beacon Hill Partners, Inc., the Information Agent, at its address
and telephone number set forth on the back cover page of the Offer to Purchase.
Additional copies of the enclosed materials may be obtained by calling
Beacon Hill Partners, Inc., the Information Agent, collect at (212) 843-8500.
Very truly yours,
BEACON HILL PARTNERS, INC.
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR
ANY OTHER PERSON AS AN AGENT OF THE PURCHASER, THE DEPOSITARY, THE INFORMATION
AGENT, OR ANY AFFILIATE OF ANY OF THE FOREGOING, OR AUTHORIZE YOU OR ANY OTHER
PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENT ON BEHALF OF ANY OF THEM IN
CONNECTION WITH THE OFFER OTHER THAN THE DOCUMENTS ENCLOSED AND THE STATEMENTS
CONTAINED THEREIN.
<PAGE>
OFFER TO PURCHASE FOR CASH
ANY AND ALL OUTSTANDING SHARES OF COMMON STOCK
AND
ANY AND ALL OUTSTANDING SHARES OF
CUMULATIVE VOTING CONVERTIBLE PREFERRED STOCK, SERIES B
OF
OLD STONE CORPORATION
AT
$1.00 NET PER COMMON SHARE
AND $4.00 NET PER
CUMULATIVE VOTING CONVERTIBLE PREFERRED SHARE, SERIES B
BY
MANITCORE PROPERTIES, LLC
- -------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT
12:00 MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY DECEMBER 12, 1997,
UNLESS THE OFFER IS EXTENDED.
- -------------------------------------------------------------------------------
November 14, 1997
To Our Clients:
Enclosed for your consideration is an Offer to Purchase, dated
November 14, 1997 (the "Offer to Purchase"), and the related Letters of
Transmittal (which, as amended from time to time, together constitute the
"Offer") in connection with the Offer by Manticore Properties, LLC, a Delaware
limited liability company (the "Purchaser") wholly owned by Gotham Partners,
L.P., a New York limited partnership ("Gotham"), and Gotham Partners II, L.P.,
a New York limited partnership ("Gotham II"; together, the "Funds"), to
purchase all outstanding shares of common stock, par value $1.00 per share
("Common Shares") and all outstanding shares of Cumulative Voting Convertible
Preferred Stock, Series B, par value $1.00 per share ("Preferred Shares" and
with the Common Shares, the "Shares") of Old Stone Corporation, a Rhode Island
corporation (the "Company"), at a price of $1.00 per Common Share and $4.00 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.
THE MATERIAL IS BEING SENT TO YOU AS THE BENEFICIAL OWNER OF SHARES
HELD BY US FOR YOUR ACCOUNT BUT NOT REGISTERED IN YOUR NAME. WE ARE THE HOLDER
OF RECORD OF SHARES HELD BY US FOR YOUR ACCOUNT. A TENDER OF SUCH SHARES CAN BE
MADE ONLY BY US AS THE HOLDER OF RECORD AND PURSUANT TO YOUR INSTRUCTIONS. THE
LETTERS OF TRANSMITTAL ARE FURNISHED TO YOU FOR YOUR
<PAGE>
INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER SHARES HELD BY US FOR
YOUR ACCOUNT.
We request instructions as to whether you wish to have us tender on
your behalf any or all of the Shares held by us for your account, upon the
terms and subject to the conditions set forth in the Offer to Purchase.
Your attention is invited to the following:
1. The tender price is $1.00 per Common Share and $4.00 per
Preferred Share, net to the seller in cash, without interest thereon.
2. The Offer and withdrawal rights will expire at 12:00
Midnight, New York City time, on Friday, December 12, 1997, unless the
Offer is extended.
3. The Offer is being made for any and all outstanding
Shares.
4. The Offer is not conditioned on the receipt of financing
or upon any minimum number of shares being tendered.
5. Tendering shareholders will not be obligated to pay
brokerage fees or commissions. Except as set forth in Instruction 6 of
the Letters of Transmittal, tendering shareholders will not be
obligated to pay stock transfer taxes on the purchase of Shares by the
Purchaser pursuant to the Offer.
6. The Purchaser will pay soliciting dealer's fees to us of
$.10 per Common Share and $.40 per Preferred Share tendered and
purchased on the Offer in connection with the solicitation of tenders
of Shares by our clients pursuant to the Offer. In addition, the
Purchaser will, upon request, reimburse us for customary mailing and
handling expenses incurred by us in forwarding the endorsed materials
to our clients.
The Offer is made solely by the Offer to Purchase and the related
Letters of Transmittal. The Offer is not being made to (nor will tenders be
accepted from or on behalf of) holders of Shares in any jurisdiction in which
the making of the Offer or the acceptance thereof would not be in compliance
with the securities, blue sky or other laws of such jurisdiction. The Purchaser
is 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. To the extent the Purchaser becomes aware of any state law that
would limit the class of offerees in the Offer, the Purchaser 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
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 is intended to be made on behalf of the
Purchaser by one or more registered brokers or dealers licensed under the laws
of such jurisdiction.
If you wish to have us tender any or all of your Shares, please so
instruct us by completing, executing and returning to us the instruction form
contained in this letter. An envelope in which to return your instructions to
us is enclosed. If you authorize the tender of your Shares, all such Shares
will be tendered unless otherwise specified on the instruction form contained
in this letter. Your instructions should be forwarded to us in ample time to
permit us to submit a tender on your behalf prior to the expiration of the
Offer.
<PAGE>
INSTRUCTIONS WITH RESPECT TO THE OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING COMMON SHARES
OF
OLD STONE CORPORATION
The undersigned acknowledge(s) receipt of your letter and the enclosed
Offer to Purchase, dated November 14, 1997, and the related Letter of
Transmittal (which, as amended from time to time, together constitute the
"Offer"), in connection with the Offer by Manticore Properties, LLC, a Delaware
limited liability company (the "Purchaser") wholly owned by Gotham Partners,
L.P., a New York limited partnership ("Gotham"), and Gotham Partners II, L.P.,
a New York limited partnership ("Gotham II"; together, the "Funds"), to
purchase all outstanding shares of common stock, par value $1.00 per share
("Common Shares"), of Old Stone Corporation, a Rhode Island corporation (the
"Company"), at a price equal to $1.00 per Common Share, net to the seller in
cash.
This will instruct you to tender to the Purchaser the number of Common
Shares indicated below (or, if no number is indicated below, all Common Shares)
held by you for the account of the undersigned, upon the terms and subject to
the conditions set forth in the Offer to Purchase.
Number of Common Shares to be Tendered*:
Common Shares
- --------------------------------------------
Account Number:
-----------------------------
Dated:
--------------------------------------
SIGN HERE
----------------------------------------------
Signature(s)
----------------------------------------------
Please type or print name(s)
----------------------------------------------
Please type or print address(es) here
Area Code and Telephone Number
--------------------------------------
Taxpayer Identification or
Social Security Number(s)
- ---------------------------------------------------------------------
* Unless otherwise indicated, it will be assumed that all Common Shares held by
us for your account are to be tendered.
<PAGE>
INSTRUCTIONS WITH RESPECT TO THE OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING PREFERRED SHARES
OF
OLD STONE CORPORATION
The undersigned acknowledge(s) receipt of your letter and the enclosed
Offer to Purchase, dated November 14, 1997, and the related Letters of
Transmittal (which, as amended from time to time, together constitute the
"Offer"), in connection with the Offer by Manticore Properties, LLC, a Delaware
limited liability company (the "Purchaser") wholly owned by Gotham Partners,
L.P., a New York limited partnership ("Gotham"), and Gotham Partners II, L.P.,
a New York limited partnership ("Gotham II"; together, the "Funds"), to
purchase all outstanding shares of Cumulative Voting Convertible Preferred
Stock, par value $1.00 per share ("Preferred Shares"), of Old Stone
Corporation, a Rhode Island corporation (the "Company"), at a price equal to
$4.00 per Preferred Share, net to the seller in cash.
This will instruct you to tender to the Purchaser the number of
Preferred Shares indicated below (or, if no number is indicated below, all
Preferred Shares) held by you for the account of the undersigned, upon the
terms and subject to the conditions set forth in the Offer to Purchase.
Number of Preferred Shares to be Tendered*:
Preferred Shares
- --------------------------------------------
Account Number:
-----------------------------
Dated:
--------------------------------------
SIGN HERE
----------------------------------------------
Signature(s)
----------------------------------------------
Please type or print name(s)
----------------------------------------------
Please type or print address(es) here
Area Code and Telephone Number
--------------------------------------
Taxpayer Identification or
Social Security Number(s)
- ---------------------------------------------------------------------
* Unless otherwise indicated, it will be assumed that all Common Shares held by
us for your account are to be tendered.
<PAGE>
OFFER TO PURCHASE FOR CASH
ANY AND ALL OUTSTANDING SHARES OF COMMON STOCK
AND
ANY AND ALL OUTSTANDING SHARES OF CUMULATIVE VOTING
CONVERTIBLE PREFERRED STOCK, SERIES B
OF
OLD STONE CORPORATION
AT
$1.00 NET PER COMMON SHARE
AND
$4.00 NET PER
CUMULATIVE VOTING CONVERTIBLE PREFERRED SHARE, SERIES B
BY
MANTICORE PROPERTIES, LLC
- -------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT
NEW YORK CITY TIME, ON FRIDAY, DECEMBER 12, 1997,
UNLESS THE OFFER IS EXTENDED.
- -------------------------------------------------------------------------------
November 14, 1997
To the Trustee of the Old Stone Corporation
Employee Stock Ownership Plan and Trust:
We have been engaged by Manticore Properties, LLC, a Delaware limited
liability company (the "Purchaser"), wholly owned by Gotham Partners, L.P., a
New York limited partnership ("Gotham"), and Gotham Partners II, L.P., a New
York limited partnership ("Gotham II" and together, the "Funds"), to act as
Information Agent in connection with the Purchaser's offer to purchase all
outstanding shares of common stock, par value $1.00 per share ("Common Shares")
and all outstanding shares of Cumulative Voting Convertible Preferred Stock,
Series B, par value $1.00 per share ("Preferred Shares", and together with the
Common Shares, the "Shares"), of Old Stone Corporation, a Rhode Island
corporation (the "Company"), at a price of $1.00 per Common Share and $4.00 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, dated November 14, 1997 (the "Offer to Purchase"), and in
the related Letters of Transmittal (which, as amended from time to time,
together constitute the "Offer") enclosed herewith.
THE OFFER IS SUBJECT TO CERTAIN TERMS AND CONDITIONS. SEE SECTION 14
OF THE OFFER TO PURCHASE. THE OFFER IS NOT CONDITIONED ON THE RECEIPT OF
FINANCING OR ANY MINIMUM NUMBER OF SHARES BEING TENDERED.
In addition, the Purchaser will, upon request, reimburse you for
customary mailing and handling expenses incurred by you in forwarding the
enclosed materials to participants in the Company's Employee Stock Ownership
Plan and Trust, as amended (the "Plan").
<PAGE>
Please furnish copies of the enclosed materials to those participants
in the Plan for which you, as Trustee, hold Shares registered in the Plan's
name. Additional copies of the enclosed materials may be obtained by calling
Beacon Hill Partners, Inc., the Information Agent, collect at (212) 843-8500.
For your information and for forwarding to the participants in the
Plan for whom you, as Trustee, hold Shares registered in the Plan's name, we
are enclosing the following documents:
1. The Offer to Purchase, dated November 14, 1997;
2. The Letter of Transmittal to be used by holders of Common Shares in
accepting the Offer and tendering Common Shares;
3. The Letter of Transmittal to be used by holders of Preferred Shares in
accepting the Offer and tendering Preferred Shares;
4. The Notice of Guaranteed Delivery to be used to accept the Offer if the
certificates evidencing tendered Common Shares (the "Common Share
Certificates") are not immediately available or time will not permit all
required documents to reach the Depositary (as defined in the Offer to
Purchase) prior to the Expiration Date (as defined in the Offer to
Purchase) or the procedure for book-entry transfer cannot be completed on a
timely basis;
5. The Notice of Guaranteed Delivery to be used to accept the Offer if the
certificates evidencing tendered Preferred Shares (the "Preferred Share
Certificates" and together with the Common Share Certificates, the "Share
Certificates") are not immediately available or time will not permit all
required documents to reach the Depositary (as defined in the Offer to
Purchase) prior to the Expiration Date (as defined in the Offer to
Purchase) or the procedure for book-entry transfer cannot be completed on a
timely basis;
6. A letter which may be sent to the participants in the Plan for whose
accounts you hold Shares registered in the Plan's name, with space provided
for obtaining such participants instructions with regard to the Offer;
7. Guidelines of the Internal Revenue Service for Certification of Taxpayer
Identification Number on Substitute Form W-9; and
8. A return envelope addressed to the Depositary.
In order to take advantage of the Offer, duly executed and properly
completed Letter(s) of Transmittal relating to the Common Shares and/or
Preferred Shares tendered and any other required documents should be sent to
the Depositary and certificates representing the tendered Shares should be
delivered, or such Shares should be tendered by book-entry transfer, all in
accordance with the instructions set forth in the Letters of Transmittal and
the Offer to Purchase. 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 Purchaser will purchase, by accepting
for payment, and will pay for the Shares validly tendered and not withdrawn
prior to the Expiration Date promptly after the Expiration Date. For purposes
of the Offer, the Purchaser will be deemed to have accepted for payment, and
thereby purchased, tendered Shares as, if and when the Purchaser gives oral or
written notice to the Depositary of the Purchaser's acceptance of such Shares
for payment pursuant to the Offer. In all cases,
<PAGE>
payment for Shares purchased pursuant to the Offer will be made only after
timely receipt by the Depositary of (i) the Share Certificates or timely
confirmation of a book-entry transfer of such Shares, if such procedure is
available, into the Depositary's account at The Depository Trust Company or the
Philadelphia Depositary Trust Company pursuant to the procedures set forth in
Section 2 of the Offer to Purchase, (ii) Letter(s) of Transmittal (or a
facsimile thereof) relating to the Common Shares and/or Preferred Shares
tendered, properly completed and duly executed, with any required signature
guarantees, or an Agent's Message (as defined in Section 2 of the Offer to
Purchase) and (iii) any other documents required by the Letter of Transmittal.
The Purchaser will pay any stock transfer taxes incident to the
transfer to it of validly tendered Shares, except as otherwise provided in
Instruction 6 of the Letters of Transmittal.
YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT PLAN
PARTICIPANTS AS PROMPTLY AS POSSIBLE. THE OFFER AND WITHDRAWAL RIGHTS WILL
EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY, DECEMBER 12, 1997,
UNLESS THE OFFER IS EXTENDED.
In order to take advantage of the Offer, a duly executed and properly
completed Letter of Transmittal (or a facsimile thereof), with any required
signature guarantees and any other required documents, should be sent to the
Depositary, and certificates evidencing the tendered Shares should be delivered
or such Shares should be tendered by book-entry transfer, all in accordance
with the Instructions set forth in the Letters of Transmittal and the Offer to
Purchase.
If holders of Shares wish to tender Shares, but it is impracticable
for them to forward their Share Certificates or other required documents to the
Depositary prior to the Expiration Date or to comply with the Procedures for
book-entry transfer on a timely basis, a tender may be effected by following
the guaranteed delivery procedures specified under Section 2 of the Offer to
Purchase.
Any inquiries you may have with respect to the Offer should be
addressed to Beacon Hill Partners, Inc., the Information Agent, at its address
and telephone number set forth on the back cover page of the Offer to Purchase.
Additional copies of the enclosed materials may be obtained by calling
Beacon Hill Partners, Inc., the Information Agent, collect at (212) 843-8500.
Very truly yours,
BEACON HILL PARTNERS, INC.
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR
ANY OTHER PERSON AS AN AGENT OF THE PURCHASER, THE DEPOSITARY, THE INFORMATION
AGENT, OR ANY AFFILIATE OF ANY OF THE FOREGOING, OR AUTHORIZE YOU OR ANY OTHER
PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENT ON BEHALF OF ANY OF THEM IN
CONNECTION WITH THE OFFER OTHER THAN THE DOCUMENTS ENCLOSED AND THE STATEMENTS
CONTAINED THEREIN.
<PAGE>
OFFER TO PURCHASE FOR CASH
ANY AND ALL OUTSTANDING SHARES OF COMMON STOCK
AND
ANY AND ALL OUTSTANDING SHARES OF
CUMULATIVE VOTING CONVERTIBLE PREFERRED STOCK, SERIES B
OF
OLD STONE CORPORATION
AT
$1.00 NET PER COMMON SHARE
AND $4.00 NET PER
CUMULATIVE VOTING CONVERTIBLE PREFERRED SHARE, SERIES B
BY
MANTICORE PROPERTIES, LLC
- -------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT
12:00 MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY, DECEMBER 12, 1997,
UNLESS THE OFFER IS EXTENDED.
- -------------------------------------------------------------------------------
November 14, 1997
To the Participants in the Old Stone Corporation Employee Stock Ownership Plan
and Trust:
Enclosed for your consideration is an Offer to Purchase, dated
November 14, 1997 (the "Offer to Purchase"), and the related Letters of
Transmittal (which, as amended from time to time, together constitute the
"Offer") in connection with the Offer by Manticore Properties, LLC, a Delaware
limited liability company (the "Purchaser") wholly owned by Gotham Partners,
L.P., a New York limited partnership ("Gotham"), and Gotham Partners II, L.P.,
a New York limited partnership ("Gotham II"; together, the "Funds"), to
purchase all outstanding shares of common stock, par value $1.00 per share
("Common Shares") and all outstanding shares of Cumulative Voting Convertible
Preferred Stock, Series B, par value $1.00 per share ("Preferred Shares" and
with the Common Shares, the "Shares") of Old Stone Corporation, a Rhode Island
corporation (the "Company"), at a price of $1.00 per Common Share and $4.00 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.
THE MATERIAL IS BEING SENT TO YOU AS THE BENEFICIAL OWNER OF SHARES
HELD BY THE OLD STONE CORPORATION EMPLOYEE STOCK OWNERSHIP PLAN AND TRUST, AS
AMENDED (THE "PLAN") FOR YOUR ACCOUNT BUT NOT REGISTERED IN YOUR NAME. AS
TRUSTEE, WE ARE THE HOLDER OF RECORD OF SHARES HELD BY US FOR YOUR ACCOUNT. A
TENDER OF SUCH SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF RECORD AND
PURSUANT TO YOUR INSTRUCTIONS. THE LETTERS OF TRANSMITTAL ARE FURNISHED TO
<PAGE>
YOU FOR YOUR INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER SHARES HELD
BY US FOR YOUR ACCOUNT.
We request instructions as to whether you wish to have us tender on
your behalf any or all of the Shares held by us for your account, upon the
terms and subject to the conditions set forth in the Offer to Purchase.
Your attention is invited to the following:
1. The tender price is $1.00 per Common Share and $4.00 per
Preferred Share, net to the seller in cash, without interest thereon.
2. The Offer and withdrawal rights will expire at 12:00
Midnight, New York City time, on Friday, December 12, 1997, unless the
Offer is extended.
3. The Offer is being made for any and all outstanding
Shares.
4. The Offer is not conditioned on the receipt of financing
or upon any minimum number of shares being tendered.
5. Tendering shareholders will not be obligated to pay
brokerage fees or commissions. Except as set forth in Instruction 6 of
the Letters of Transmittal, tendering shareholders will not be
obligated to pay stock transfer taxes on the purchase of Shares by the
Purchaser pursuant to the Offer.
6. The Purchaser will, upon request, reimburse us for
customary mailing and handling expenses incurred by us in forwarding
the endorsed materials to Plan Participants.
The Offer is made solely by the Offer to Purchase and the related
Letters of Transmittal. The Offer is not being made to (nor will tenders be
accepted from or on behalf of) holders of Shares in any jurisdiction in which
the making of the Offer or the acceptance thereof would not be in compliance
with the securities, blue sky or other laws of such jurisdiction. The Purchaser
is 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. To the extent the Purchaser becomes aware of any state law that
would limit the class of offerees in the Offer, the Purchaser 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
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 is intended to be made on behalf of the
Purchaser by one or more registered brokers or dealers licensed under the laws
of such jurisdiction.
If you wish to have us tender any or all of your Shares, please so
instruct us by completing, executing and returning to us the instruction form
contained in this letter. An envelope in which to return your instructions to
us is enclosed. If you authorize the tender of your Shares, all such Shares
will be tendered unless otherwise specified on the instruction form contained
in this letter. Your instructions should be forwarded to us in ample time to
permit us to submit a tender on your behalf prior to the expiration of the
Offer.
<PAGE>
INSTRUCTIONS WITH RESPECT TO THE OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING COMMON SHARES
OF
OLD STONE CORPORATION
The undersigned acknowledge(s) receipt of your letter and the enclosed
Offer to Purchase, dated November 14, 1997, and the related Letters of
Transmittal (which, as amended from time to time, together constitute the
"Offer"), in connection with the Offer by Manticore Properties, LLC, a Delaware
limited liability company (the "Purchaser") wholly owned by Gotham Partners,
L.P., a New York limited partnership ("Gotham"), and Gotham Partners II, L.P.,
a New York limited partnership ("Gotham II"; together, the "Funds"), to
purchase all outstanding shares of common stock, par value $1.00 per share
("Common Shares"), of Old Stone Corporation, a Rhode Island corporation (the
"Company"), at a price equal to $1.00 per Common Share, net to the seller in
cash.
This will instruct you to tender to the Purchaser the number of Common
Shares indicated below (or, if no number is indicated below, all Common Shares)
held by the Plan for the account of the undersigned, upon the terms and subject
to the conditions set forth in the Offer to Purchase.
Number of Common Shares to be Tendered*:
Common Shares
- ---------------------------------------
Account Number:
------------------------
Dated:
---------------------------------
SIGN HERE
----------------------------------------------
Signature(s)
----------------------------------------------
Please type or print name(s)
----------------------------------------------
Please type or print address(es) here
Area Code and Telephone Number
--------------------------------
Taxpayer Identification or
Social Security Number(s)
- ---------------------------------------------------------------
* Unless otherwise indicated, it will be assumed that all Common Shares held by
the Plan for your account are to be tendered.
<PAGE>
INSTRUCTIONS WITH RESPECT TO THE OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING PREFERRED SHARES
OF
OLD STONE CORPORATION
The undersigned acknowledge(s) receipt of your letter and the enclosed
Offer to Purchase, dated November 14, 1997, and the related Letters of
Transmittal (which, as amended from time to time, together constitute the
"Offer"), in connection with the Offer by Manticore Properties, LLC, a Delaware
limited liability company (the "Purchaser") wholly owned by Gotham Partners,
L.P., a New York limited partnership ("Gotham"), and Gotham Partners II, L.P.,
a New York limited partnership ("Gotham II"; together, the "Funds"), to
purchase all outstanding shares of Cumulative Voting Convertible Preferred
Stock, par value $1.00 per share ("Preferred Shares"), of Old Stone
Corporation, a Rhode Island corporation (the "Company"), at a price equal to
$4.00 per Preferred Share, net to the seller in cash.
This will instruct you to tender to the Purchaser the number of
Preferred Shares indicated below (or, if no number is indicated below, all
Preferred Shares) held by the Plan for the account of the undersigned, upon the
terms and subject to the conditions set forth in the Offer to Purchase.
Number of Preferred Shares to be Tendered*:
Preferred Shares
- ---------------------------------------
Account Number:
------------------------
Dated:
---------------------------------
SIGN HERE
----------------------------------------------
Signature(s)
----------------------------------------------
Please type or print name(s)
----------------------------------------------
Please type or print address(es) here
Area Code and Telephone Number
--------------------------------
Taxpayer Identification or
Social Security Number(s)
- ---------------------------------------------------------------
* Unless otherwise indicated, it will be assumed that all Common Shares held by
the Plan for your account are to be tendered.
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE PAYOR
- -- 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. Individual Taxpayer Identification numbers have
nine digits and are used solely for tax purposes by individuals who are
required to have a taxpayer identification number but who do not have one and
are not eligible to obtain a Social Security number. The table below will help
determine the number to give the Payor.
GIVE THE
FOR THIS TYPE OF ACCOUNT IDENTIFICATION
NUMBER OF--
1. An individual's account The individual
2. Two or more individuals The actual owner of the
(joint account) account or, if combined
funds, any one of the
individuals(1)
3. Husband and wife (joint The actual owner of the
account) account or, if joint funds,
either person(1)
4. Custodian account of a minor The minor(2)
(Uniform Gift to Minors Act)
5. Adult and minor (joint the adult or, if the minor is
account) the only contributor, the
minor(1)
6. Account in the name of The ward, minor, or
guardian or committee for a incompetent person(3)
designated ward, minor, or
incompetent person
7. a. The usual revocable The grantor-trustee(1)
savings trust account
(grantor is also trustee)
b. So-called trust account The actual owner(1)
that is not a legal or
valid trust under State
law
GIVE THE
FOR THIS TYPE OF ACCOUNT: IDENTIFICATION
NUMBER OF--
8. Sole proprietorship The Owner(4)
account
9. A valid trust, estate, or Legal entity (Do not
pension trust furnish the identifying
number of the personal
representative or trustee
unless the legal entity
itself is not designated in
the account title.)(5)
10. Corporate account The Corporation
11. Religious, charitable, or The organization
educational organization
account
12. Partnership account held The partnership
in the name of the
business
13. Association, club or The organization
other tax-exempt
organization
14. A broker or registered The broker or nominee
nominee
15. Account with the The public entity
Department of
Agriculture in the name
of a public entity (such
as a State or local
governmental school
disctrict or prison) that
receives agricultural
program payments
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
(4) Show the name of the owner.
(5) List first and circle the name of the legal trust, estate or pension
trust.
NOTE: If no name is circled when there is more than one name, the number will
be considered to be that of the first name listed.
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER 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, Form
W-7, Application for Individual Taxpayer Identification Number, or Form SS-4,
Application for Employer Identification Number, at the local office of the
Social Security Administration or the Internal Revenue Service and apply for a
number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on ALL payments include
the following:
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
account received is not paid in money.
o Payments made by certain foreign organizations.
o Payments made to a nominee.
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 to a nominee.
Exempt payees described above should file Form W-9 to avoid possible erroneous
backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER
IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, AND RETURN IT TO
THE PAYER. IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE DIVIDENDS,
ALSO SIGN AND DATE THE FORM.
Certain payments other than interest, dividends, and patronage dividends
that are not subject to information reporting are also not subject to backup
withholding. For details, see the regulations under sections 6041, 6041A(a),
6045, and 6050A.
PRIVACY ACT NOTICE. -- Section 6109 requires most recipients of dividend
interest, or other 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. Beginning January 1, 1993, payers must generally
withhold 31% of taxable interest, dividend, and certain other payments to a
payee who does not furnish a taxpayer identification number to a payer. Certain
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.
<PAGE>
This announcement is neither an offer to purchase nor a solicitation of an
offer to sell Shares. The Offer is made solely by the Offer to Purchase dated
November 14, 1997 and the related Letters of Transmittal, and is not being made
to (nor will tenders be accepted from or on behalf of) holders of Shares in any
jurisdiction in which the making of the Offer or the acceptance thereof would
not be in compliance with the laws of such jurisdiction. In any jurisdictions
where securities, blue sky or other laws require the Offer to be made by a
licensed broker or dealer, the Offer is intended to be made on behalf of the
Purchaser by one or more registered brokers or dealers licensed under the laws
of such jurisdiction.
Notice of Offer to Purchase for Cash
Any and All Shares of Common Stock
AND
Any and All Shares of
Cumulative Voting Convertible Preferred Stock, Series B
of
OLD STONE CORPORATION
at
$1.00 Net Per Common Share
$4.00 Net Per
Cumulative Voting Convertible
Preferred Share, Series B
by
MANTICORE PROPERTIES, LLC
Manticore Properties, LLC, a Delaware limited liability company (the
"Purchaser"), which is wholly owned by Gotham Partners, L.P., a New York
limited partnership, and Gotham Partners II, L.P., a New York limited
partnership (together, the "Funds") is offering to purchase any and all shares
of Common Stock, par value $1.00 per share ("Common Shares") and any and all
shares of Cumulative Voting Convertible Preferred Stock, Series B, par value
$1.00 per share ("Preferred Shares" and together with the Common Shares, the
"Shares"), of Old Stone Corporation, a Rhode Island corporation (the
"Company"), at a price of $ 1.00 per Common Share and $4.00 per Preferred
Share, net to the seller in cash, without interest thereon, upon the terms and
subject to the conditions set forth in the Offer to Purchase dated November 14,
1997 (the "Offer to Purchase") and in the related Letters of Transmittal
(which, together with any amendments or supplements thereto, collectively
constitute the "Offer").
<PAGE>
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON FRIDAY, DECEMBER 12, 1997, UNLESS THE OFFER IS EXTENDED.
THE OFFER IS NOT CONDITIONED UPON THE RECEIPT OF FINANCING OR ANY
MINIMUM NUMBER OF SHARES BEING TENDERED. CERTAIN CONDITIONS TO THE OFFERING ARE
DESCRIBED IN SECTION 14 OF THE OFFER TO PURCHASE.
Please note that the Offer and withdrawal rights will expire at 12:00
Midnight, New York City time, on Friday, December 12, 1997, unless extended.
For purposes of the Offer, the Purchaser will be deemed to have
accepted for payment, and thereby purchased, Shares validly tendered to the
Purchaser and not withdrawn as, if and when the Purchaser gives oral or written
notice to Harris Trust Company of New York (the "Depositary") of the
Purchaser's acceptance for payment of such Shares. Upon the terms and subject
to the conditions of the Offer, payment for 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 shareholders
for the purpose of receiving payment from the purchaser and transmitting
payment to tendering shareholders. In all cases, payment for Shares accepted
for payment pursuant to the Offer will be made only after timely receipt by the
Depositary of (i) certificates for (or a timely Book-Entry Confirmation (as
defined in the Offer to Purchase) with respect to) such Shares, (ii) the
Letters of Transmittal (or facsimile thereof), relating to the Common Shares
and/or Preferred 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 (as defined in the Offer to Purchase), and (iii) any other
documents required by the Letters of Transmittal. Under no circumstances will
interest be paid on the purchase price of the Shares to be paid by the
Purchaser, regardless of any extension of the Offer or any delay in making such
payment.
Except as otherwise provided below, tenders of Shares are irrevocable.
Shares tendered pursuant to the Offer may be withdrawn at any time prior to the
Expiration Date and, unless theretofore accepted for payment and paid for by
the Purchaser pursuant to the Offer, may also be withdrawn at any time after
January 12, 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 as set forth on the back cover of the Offer to Purchase
and must specify the name of the person having tendered the Shares to be
withdrawn, the number of Shares to be withdrawn and the name of the registered
holder of Shares to be withdrawn, if different from the name of the person who
tendered the Shares. If certificates for Shares have been delivered or
otherwise identified to the Depositary, then, prior to the physical release of
such certificates, the serial numbers shown on such certificates must be
submitted to the Depositary and, unless such Shares have been tendered by an
Eligible Institution (as defined in Section 2 of the Offer to Purchase), the
signatures on the notice of withdrawal must be guaranteed by an Eligible
Institution. If 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 appropriate Book-Entry Transfer Facility (as defined in the Offer to
Purchase) to be credited and the withdrawn Shares and otherwise comply with
such Book-Entry Transfer Facility's procedures. Withdrawals of tenders of
Shares may not be rescinded, and any Shares properly withdrawn will thereafter
be deemed not validly tendered for any purposes of the Offer. However,
withdrawn Shares may be retendered by again following one of the procedures
described in Section 2 of the Offer to Purchase 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 Purchaser in its
sole discretion, whose determination will be final and binding.
The Purchaser expressly reserves the right, in its sole discretion, at
any time or from time to time, to extend the period of time during which the
Offer is open by giving oral or written notice of such extension to the
Depositary.
The information required to be disclosed by paragraph (e)(1)(viii) of
Rule 14d-6 under the Securities Exchange Act of 1934, as amended, is contained
in the Offer to Purchase and is incorporated herein by reference.
A request is being made to the Company for the use of the Company's
stockholder list and security position listings for the purpose of
disseminating the Offer to holders of Shares. The Offer to Purchase, the
related Letters of Transmittal and other relevant materials will be mailed to
record holders of Shares, and will be furnished to brokers,
<PAGE>
dealers, banks, trusts 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 Shares.
THE OFFER TO PURCHASE AND THE LETTERS OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION THAT SHOULD BE READ BEFORE ANY DECISION IS MADE WITH RESPECT TO THE
OFFER.
Questions and requests for assistance or for copies of the Offer to
Purchase, the Letters of Transmittal and other tender offer documents may be
directed to the Information Agent, as set forth below, and copies will be
furnished at the Purchaser's expense. A soliciting dealers fee of $.10 per
Common Share and $.40 per Preferred Share will be payable by Purchaser to
brokers, dealers or other persons for soliciting tenders of Shares of their
clients pursuant to the Offer.
The Information Agent for the Offer is:
BEACON HILL PARTNERS, INC.
90 BROAD STREET
20TH FLOOR
NEW YORK, NEW YORK 10004
Call Toll Free: 800-755-5001
Call Collect: 212-843-8500
November 14, 1997
