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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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SCHEDULE 14D-1
TENDER OFFER STATEMENT PURSUANT TO SECTION
14(D)(1) OF THE SECURITIES EXCHANGE ACT OF 1934
AND
SCHEDULE 13D
AMENDMENT NO. 10
------------------------
PRUDENTIAL REALTY TRUST
(Name of Subject Company)
BLACK BEAR REALTY, LTD.
(Bidder)
CAPITAL SHARES OF BENEFICIAL INTEREST, $0.01 PAR VALUE
(Title of Class of Securities)
74435P-20-3
(CUSIP Number of Class of Securities)
------------------------
Copy to:
RICHARD M. OSBORNE BYRON S. KRANTZ, ESQ.
MANAGING MEMBER KOHRMAN JACKSON & KRANTZ
BLACK BEAR REALTY, LTD. ONE CLEVELAND CENTER - 20TH FLOOR
7001 CENTER STREET 1375 EAST NINTH STREET
MENTOR, OHIO 44060 CLEVELAND, OHIO 44114
(216) 951-1111 (216) 696-8700
(Name, Address and Telephone Number of
Person Authorized to Receive Notices and
Communications on Behalf of Bidder)
CALCULATION OF FILING FEE
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TRANSACTION VALUATION* AMOUNT OF FILING FEE**
---------------------- ----------------------
$ 3,340,500 $ 668.10
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* For purposes of calculating filing fee only. This calculation assumes the
purchase of 11,135,000 Capital Shares of Beneficial Interest of Prudential
Realty Trust at $0.30 net per share in cash.
** 1/50 of one percent of the Transaction Valuation.
/ / Check box if any part of the fee is offset as provided in 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: Not Applicable Filing Party: Not Applicable
Form or Registration No.: Not Applicable Date Filed: Not Applicable
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This tender offer statement on Schedule 14D-1 also constitutes a statement
on Schedule 13D by Richard M. Osborne, the sole managing member of Black Bear
Realty, Ltd., an Ohio limited liability company (the "Purchaser"). The item
numbers and responses thereto below are in accordance with the requirements of
Schedule 14D-1.
ITEM 1. SECURITY AND SUBJECT COMPANY.
(a) The name of the subject company is Prudential Realty Trust, a
Massachusetts business trust (the "Company"). The address of its principal
executive offices is Prudential Plaza, Newark, New Jersey 07102-3777.
(b) The equity securities to which the Schedule 14D-1 relates are the
capital shares of beneficial interest, $0.01 par value per share (the "Shares"),
of the Company. Reference is hereby made to the information set forth in the
"Introduction" and Section 1 ("Terms of the Offer") of the Offer to Purchase,
which is incorporated herein by reference.
(c) Reference is hereby made to the information set forth in Section 6
("Price Range of the Shares; Dividends") of the Offer to Purchase, which is
incorporated herein by reference.
ITEM 2. IDENTITY AND BACKGROUND.
(a) - (d) Reference is hereby made to the information set forth in the
"Introduction" and Section 9 ("Certain Information Concerning the Purchaser and
Mr. Osborne") of the Offer to Purchase, which is incorporated herein by
reference.
(e) - (f) During the past five years, neither the Purchaser nor its
managing member listed in Section 9 ("Certain Information Concerning the
Purchaser and Mr. Osborne") of the Offer to Purchase 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
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 any such laws.
(g) Reference is hereby made to the information set forth in Section 9
("Certain Information Concerning the Purchaser and Mr. Osborne") of the Offer to
Purchase, which is incorporated herein by reference.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY.
(a) - (b) Reference is hereby made to the information set forth in the
"Introduction," Section 9 ("Certain Information Concerning the Purchaser and Mr.
Osborne"), Section 10 ("Background of the Offer; Contacts with the Company") and
Section 11 ("Purpose of the Offer; The Proposed Merger; Plans for the Company")
of the Offer to Purchase, which is incorporated herein by reference.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a) - (b) Reference is hereby made to the information set forth in Section
12 ("Source and Amount of Funds") of the Offer to Purchase, which is
incorporated herein by reference.
(c) Not applicable.
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER.
(a) - (g) Reference is hereby made to the information set forth in the
"Introduction," Section 7 ("Possible Effects of the Offer on the Market for the
Shares; Stock Exchange Listing; Exchange Act Registration; Margin Regulations"),
Section 10 ("Background of the Offer; Contacts with the Company"),
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Section 11 ("Purpose of the Offer; The Proposed Merger; Plans for the Company")
and Section 13 ("Dividends and Distributions") of the Offer to Purchase, which
is incorporated herein by reference.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
(a) - (b) Reference is hereby made to the information set forth in the
"Introduction," Section 9 ("Certain Information Concerning the Purchaser and Mr.
Osborne") and Schedule I of the Offer to Purchase, which is incorporated herein
by reference.
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO THE SUBJECT COMPANY'S SECURITIES.
Reference is hereby made to the information set forth in Section 9
("Certain Information Concerning the Purchaser and Mr. Osborne"), Section 10
("Background of the Offer; Contacts with the Company") and Schedule I of the
Offer to Purchase, which is incorporated herein by reference.
ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
Reference is hereby made to the information set forth in Section 16
("Certain Fees and Expenses"), of the Offer to Purchase, which is incorporated
herein by reference.
ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS.
Reference is hereby made to the information set forth in Section 9
("Certain Information Concerning the Purchaser and Mr. Osborne") of the Offer to
Purchase, which is incorporated herein by reference.
ITEM 10. ADDITIONAL INFORMATION.
(a) Not applicable.
(b) - (c) Reference is hereby made to the information set forth in the
"Introduction," Section 11 ("Purpose of the Offer; The Proposed Merger; Plans
for the Company"), Section 15 ("Certain Legal Matters; Required Regulatory
Approvals") and Section 17 ("Miscellaneous") of the Offer to Purchase, which is
incorporated herein by reference.
(d) Reference is hereby made to the information set forth in the
"Introduction," Section 7 ("Possible Effects of the Offer on the Market for the
Shares; Stock Exchange Listing; Exchange Act Registration; Margin Regulations")
and Section 15 ("Certain Legal Matters; Required Regulatory Approvals") of the
Offer to Purchase, which is incorporated herein by reference.
(e) Reference is hereby made to the information set forth in Section 10
("Background of the Offer; Contacts with the Company") of the Offer to Purchase
regarding two lawsuits previously filed by the managing member of the Purchaser
against the Company and its Trustees, which is hereby incorporated by reference.
(f) Reference is hereby made to the entire text of the Offer to Purchase
and the related Letter of Transmittal, which is incorporated herein by
reference.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
<TABLE>
<S> <C> <C>
(a)(1) -- Offer to Purchase, dated May 17, 1995.
(a)(2) -- Letter of Transmittal.
(a)(3) -- Notice of Guaranteed Delivery.
(a)(4) -- Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and
Nominees.
(a)(5) -- Form of Letter to Clients for Use by Brokers, Dealers, Commercial Banks,
Trust Companies and Nominees.
(a)(6) -- Press Release issued by Purchaser on May 17, 1995.
(a)(7) -- Form of Summary Advertisement, dated May 17, 1995.
11.1 -- Guarantee of Richard M. Osborne.
</TABLE>
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SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
BLACK BEAR REALTY, LTD.
Dated: May 17, 1995 By: /s/ Richard M. Osborne
-----------------------------------
Richard M. Osborne,
Managing Member
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EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- --------------------- -----------------------------------------------
<S> <C>
(a)(1) Offer to Purchase, dated May 17, 1995
(a)(2) Letter of Transmittal
(a)(3) Notice of Guaranteed Delivery
(a)(4) Form of Letter to Brokers, Dealers,
Commercial Banks, Trust Companies and
Nominees
(a)(5) Form of Letter to Clients for Use by Brokers,
Dealers, Commercial Banks, Trust Companies and
Nominees
(a)(6) Press Release issued by Purchaser on May 17,
1995
(a)(7) Form of Summary Advertisement,
dated May 17, 1995
11.1 Guarantee of Richard M. Osborne
</TABLE>
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Offer to Purchase for Cash
All Outstanding Capital Shares of Beneficial Interest
of
PRUDENTIAL REALTY TRUST
at
$0.30 NET PER SHARE
by
BLACK BEAR REALTY, LTD.
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THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON JUNE 14, 1995, UNLESS THE OFFER IS EXTENDED.
---------------------------------------------------------------------------
THE OFFER IS NOT CONDITIONED ON OBTAINING FINANCING.
The Offer is conditioned upon, among other things, (1) there being validly
tendered and not withdrawn prior to the expiration of the Offer 7,150,000
capital shares of beneficial interest, par value $0.01 per share (the "Shares"),
of Prudential Realty Trust, a Massachusetts business trust (the "Company"),
which, together with the Shares and the income shares of beneficial interest,
par value $0.01 per share, of the Company (the "Income Shares"), owned by the
managing member of Black Bear Realty, Ltd., an Ohio limited liability company
(the "Purchaser"), and his affiliates, constitute more than 50% of the combined
voting power of the Shares and Income Shares with respect to the election of
Trustees of the Company (the "Minimum Condition"); (2) the Company not having
entered into or effected any new or amended agreements with any person or entity
having the effect of impairing the ability of the Purchaser to prevent
liquidation of the Company or otherwise diminishing the expected economic value
of the Company (the "No Impediments Condition"); and (3) the Company not having
entered into or effected any new or amended agreements with any person or entity
with respect to the sale, transfer or other disposition of any or all of the
properties currently owned by the Company (the "No Property Sale Condition").
The Offer is also subject to other terms and conditions contained in this Offer
to Purchase and the related Letter of Transmittal. See the Introduction and
Sections 1, 14 and 15.
IMPORTANT
Any shareholder desiring to tender all or any portion of such shareholder's
Shares should either (1) complete and sign the Letter of Transmittal (or a
facsimile thereof) in accordance with the instructions in the Letter of
Transmittal and mail or deliver it together with the certificates representing
the tendered Shares, and any other required documents, to the Depositary or
tender such Shares pursuant to the procedures for book-entry transfer set forth
in Section 3, or (2) request such shareholder's broker, dealer, commercial bank,
trust company or other nominee to effect the transaction for such shareholder.
Any shareholder whose Shares are 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 Shares so registered.
A shareholder who desires to tender Shares, and whose certificates
representing such Shares are not immediately available, or who cannot comply
with the procedure for book-entry transfer on a timely basis may tender such
Shares by following the procedures for guaranteed delivery set forth in Section
3.
Questions and requests for assistance or additional copies of this Offer to
Purchase and the Letter of Transmittal may be directed to the Information Agent
or the Dealer Manager at their respective addresses and telephone numbers set
forth on the back cover of this Offer to Purchase. Additional copies of this
Offer to Purchase and the Letter of Transmittal may also be obtained from
brokers, dealers, commercial banks and trust companies.
------------------------
The Dealer-Manager for the Offer is
KEMPER SECURITIES, INC.
May 17, 1995
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
SECTION PAGE
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<S> <C> <C>
INTRODUCTION.......................................................................... 3
THE TENDER OFFER...................................................................... 6
1. Terms of the Offer............................................................ 6
2. Acceptance for Payment and Payment............................................ 7
3. Procedures for Accepting the Offer and Tendering Shares....................... 8
4. Withdrawal Rights............................................................. 11
5. Certain Federal Income Tax Matters............................................ 11
6. Price Range of the Shares; Dividends.......................................... 12
7. Possible Effects of the Offer on the Market for the Shares; Stock Exchange
Listing; Exchange Act Registration; Margin Regulations........................ 12
8. Certain Information Concerning the Company.................................... 13
9. Certain Information Concerning the Purchaser and Mr. Osborne.................. 15
10. Background of the Offer; Contacts with the Company............................ 16
11. Purpose of the Offer; The Proposed Merger; Plans for the Company.............. 17
12. Source and Amount of Funds.................................................... 20
13. Dividends and Distributions................................................... 20
14. Certain Conditions of the Offer............................................... 21
15. Certain Legal Matters; Required Regulatory Approvals.......................... 24
16. Certain Fees and Expenses..................................................... 25
17. Miscellaneous................................................................. 26
Schedule I
</TABLE>
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TO: ALL HOLDERS OF CAPITAL SHARES OF BENEFICIAL INTEREST
OF PRUDENTIAL REALTY TRUST
INTRODUCTION
Black Bear Realty, Ltd., an Ohio limited liability company (the
"Purchaser"), hereby offers to purchase all outstanding capital shares of
beneficial interest, $0.01 par value per share (the "Shares"), of Prudential
Realty Trust, a Massachusetts business trust (the "Company"), at a purchase
price of $0.30 per Share, net to the seller in cash, without interest thereon,
upon the terms and subject to the conditions set forth in this Offer to Purchase
and in the related Letter of Transmittal (which, together with any supplements
or amendments, collectively constitute the "Offer").
Tendering shareholders will not be obligated to pay brokerage fees or
commissions or, except as set forth in Instruction 6 of the Letter of
Transmittal, stock transfer taxes on the purchase of Shares by the Purchaser
pursuant to the Offer. However, any tendering shareholder who fails to complete
and sign the Substitute Form W-9 that is included in the Letter of Transmittal
may be subject to required backup federal income tax withholding of 31% of the
gross proceeds payable to such shareholder or other payee pursuant to the Offer.
See Section 3. The Purchaser will pay all charges and expenses of Kemper
Securities, Inc., as Dealer Manager (the "Dealer Manager"), IBJ Schroder Bank &
Trust Company, 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 Offer is conditioned upon the fulfillment of certain conditions
described herein. The Offer will expire at 12:00 midnight, New York City time,
on June 14, 1995, unless extended.
Certain Factors to be Considered. In considering the Offer, shareholders
may wish to consider the following factors:
- The purchase price is in excess of what the Company has estimated that
holders of the Shares will receive upon final liquidation of the
Company's properties.
- In the Company's Form 10-K for the fiscal year ended December 31,
1994, the Company indicates that upon liquidation the Shares will be
worthless.
- The Company estimates that upon liquidation the holders of each then
outstanding income share of beneficial interest, par value $0.01 per
share (the "Income Shares"), will receive approximately $4.72 of the
$8.00 per share stated value of the Income Shares. The Company's
estimate assumes that the Company's properties are sold for their
appraised values at December 31, 1994. No assurance was given that the
properties could or would be sold for their appraised values. Based on
the Company's estimate, an additional $3.28 per Income Share, or
approximately $36.5 million in excess of the December 31, 1994
appraised values, would have to be distributed to the holders of
Income Shares prior to any distribution being made to the holders of
the Shares upon liquidation.
- Richard M. Osborne, the sole managing member of the Purchaser, has
filed two lawsuits against the Company and its Trustees, one of which
may determine whether the Shares are entitled to receive a
distribution of capital gains upon sale of any of the Company's
properties. IF THE COURT DETERMINES THAT CAPITAL GAINS ARE PAYABLE TO
THE HOLDERS OF SHARES PRIOR TO THE REDEMPTION OF THE INCOME SHARES,
TENDERING SHAREHOLDERS WILL FORGO THE OPPORTUNITY TO RECEIVE CAPITAL
GAINS DISTRIBUTIONS, IF ANY. See Section 10.
- Under the terms of the Company's Declaration of Trust, as amended (the
"Declaration of Trust"), the Company must be liquidated by about
mid-1997, or at the latest about mid-1999 in the event a one time
extension option is exercised by the Trustees of the Company and
approved by the shareholders of the Company. The Company has engaged
J.P. Morgan Securities, Inc., an investment banking firm ("J.P.
Morgan"), to solicit bids for the shares of the Company or its
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assets in the form of cash and/or stock. If acceptable bids are
received for the Company's properties, the Company anticipates that it
may be liquidated in the current year.
- The purchase price is in excess of prices at which most Shares have
traded in the past four years. Mr. Osborne began purchasing the Shares
in August 1994. From May 1991 to February 1995, the Shares generally
traded at prices between $0.13 and $0.25 per share. From February 1995
to April 1995, Mr. Osborne purchased 284,300 Shares in open market
transactions, or approximately 13.2% of the Shares owned by Mr.
Osborne, at prices ranging from approximately $0.31 to $0.38 per
share.
- The Company has never made any distribution of capital gains on the
Shares.
- Because the Offer may afford an immediate opportunity for holders of
the Shares to liquidate their investments in the Company at
approximately current market prices, the Offer may be attractive (1)
to those holders of Shares who have become disenchanted with real
estate investments generally and the relative lack of liquidity of the
Shares, even though they are publicly traded on the New York Stock
Exchange, and (2) because tendering shareholders will not be required
to pay brokerage fees or commissions. On the other hand, shareholders
who tender their Shares will be giving up the opportunity to
participate in future potential benefits, if any, represented by the
ownership of Shares, including but not limited to distributions of
capital gains, if any. See Section 10.
The Purchaser makes no recommendation to any shareholder as to whether to
tender any Shares. Each shareholder must make its own decision, based on the
shareholder's particular circumstances. Shareholders should consult with their
respective advisors regarding the financial, tax, legal and other implications
of accepting the Offer. SHAREHOLDERS ARE URGED TO READ THIS OFFER TO PURCHASE
AND THE ACCOMPANYING MATERIAL CAREFULLY BEFORE DECIDING WHETHER TO TENDER ANY
SHARES.
The Purchaser. The Purchaser is a newly-formed Ohio limited liability
company, of which Richard M. Osborne, a resident of Mentor, Ohio, is the sole
managing member. Mr. Osborne has substantial experience in real estate
development and management. During his career as a real estate entrepreneur, Mr.
Osborne has developed, managed or sold over 1.0 million square feet of
industrial space and over 1.5 million square feet of commercial space, and is
currently developing a 250 acre industrial park in Mentor, Ohio.
Outstanding Shares and Income Shares. According to the most recently
available filing with the Securities and Exchange Commission (the "Commission")
by the Company, there are 11,135,000 Shares and 11,135,000 Income Shares
outstanding. In August 1994, Mr. Osborne began to purchase Shares of the Company
in open market transactions. As of the date of this Offer, Mr. Osborne owns
2,160,100 Shares, constituting approximately 19.4% of the outstanding Shares. In
addition, in January 1995, Turkey Vulture Fund XIII, Ltd., an Ohio limited
liability company of which Mr. Osborne is the sole managing member (the "Fund"),
began purchasing Income Shares in open market transactions. As of the date of
this Offer, the Fund owns 1,873,300 Income Shares, constituting approximately
16.8% of the outstanding Income Shares. In the aggregate, the Shares and Income
Shares owned by Mr. Osborne and the Fund constitute approximately 18.1% of the
aggregate outstanding Shares and Income Shares.
The Purchaser reserves the right to acquire additional Shares and Income
Shares after consummation of the Offer in open market transactions, in privately
negotiated transactions or otherwise in order to obtain a sufficient number of
Shares to approve the transactions described herein.
The Purchaser's Reasons for the Offer. The purpose of the Offer is (1) to
acquire a substantial equity interest in the Company to prevent the Company's
liquidation, while maintaining the Company's status as a real estate investment
trust ("REIT"), and (2) to make a profit. Upon consummation of the Offer and
assuming that the Purchaser purchases 7,150,000 Shares, the Purchaser, Mr.
Osborne and the Fund will own approximately 83.6% of the outstanding Shares and
hold approximately 50.2% of the combined voting power of the outstanding Shares
and Income Shares with respect to the election of Trustees. Under the terms of
the Declaration of Trust, a Trustee may be removed with or without cause by vote
or consent of the holders of a
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majority of the outstanding Shares and Income Shares authorized to vote, acting
together as a single class. Accordingly, the Purchaser, Mr. Osborne and the Fund
will have sufficient voting power (without the consent of any other holder of
the Shares or Income Shares), as holders of a majority of the combined voting
power of the outstanding Shares and Income Shares, to remove all of the current
Trustees of the Company and to elect new Trustees. In general, under the
Declaration of Trust, other than the removal or election of Trustees, all
actions to be taken by the holders of the Shares and Income Shares, including
fundamental corporate transactions, such as the Proposed Merger (as defined
below), require the approval of the holders of a majority of each class, voting
separately as a class. Therefore, the Purchaser, Mr. Osborne and the Fund will
not have sufficient voting power to effect any such action without the consent
of the holders of a sufficient number of Income Shares.
Upon purchasing the Shares pursuant to the Offer, the Purchaser currently
intends to take such steps as it deems necessary to prevent the automatic
liquidation of the Company. The Purchaser currently proposes, as soon as
practicable following consummation of the Offer, to seek to have the Company
consummate a merger or similar business combination with a self-administered,
indefinite-life REIT, with a single class of common stock, to be formed by the
Purchaser or its affiliates (the "Proposed Merger"). Under the terms of the
Proposed Merger, each then outstanding Share and each then outstanding Income
Share (other than Shares and Income Shares held in the treasury of the Company)
would be converted into the right to receive a prescribed number of shares of
the new REIT, which would result in the holders of the outstanding Shares owning
approximately 6.9% of the new REIT and holders of the Income Shares owning
approximately 93.1% of the new REIT. Mr. Osborne has previously proposed the
Proposed Merger to the Company, but the Company has not entered into
negotiations with Mr. Osborne. The Purchaser is willing to enter into a merger
agreement with the Company on substantially the same terms and conditions as the
Proposed Merger. See Sections 10 and 11.
THE OFFER IS NOT CONDITIONED ON THE CONSUMMATION OF THE PROPOSED MERGER.
THE PURCHASER RESERVES THE RIGHT TO AMEND THE OFFER (INCLUDING AMENDING THE
PURCHASE PRICE) OR TERMINATE THE OFFER IF IT OR AN AFFILIATE ENTERS INTO A
MERGER AGREEMENT WITH THE COMPANY OR OTHERWISE TO NEGOTIATE A MERGER AGREEMENT
WITH THE COMPANY NOT INVOLVING A TENDER OFFER. See Section 14. In the event that
the Purchaser is unable to negotiate a definitive merger or other agreement with
the Company with respect to the Proposed Merger, the Purchaser will make a
determination whether to seek, by written consent in lieu of a meeting or
through a proxy contest at an annual meeting of shareholders or a special
meeting called for that purpose, sufficient representation among the Company's
Trustees to cause the Trustees to approve the Proposed Merger and submit it for
the approval of the holders of the Shares and Income Shares.
Certain Conditions to the Offer. This Offer is subject to the fulfillment
of certain conditions, including the following:
The Minimum Condition. Consummation of the Offer is conditioned upon
there being validly tendered and not withdrawn prior to the Expiration Date
(as defined in Section 1) at least 7,150,000 Shares which, together with
the Shares and Income Shares owned by Mr. Osborne and the Fund, constitute
more than 50% of the combined voting power of the Shares and Income Shares
with respect to election of Trustees of the Company (the "Minimum
Condition").
The No Impediments Condition. Consummation of the Offer is conditioned
upon the Company not having entered into or effectuated any new or amended
agreements with any person or entity having the effect of impairing the
ability of the Purchaser to prevent liquidation of the Company or otherwise
diminishing the expected economic value of the Company (the "No Impediments
Condition").
The No Property Sale Condition. Consummation of the Offer is
conditioned upon the Company not having entered into or effected any new or
amended agreements with any person or entity with respect to the sale,
transfer or other disposition of any or all of the properties currently
owned by the Company (the "No Property Sale Condition").
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Certain other conditions to the consummation of the Offer are described in
Section 14. The Purchaser expressly reserves the right to waive any one or more
of the conditions to the Offer. See Sections 14 and 15.
THIS OFFER DOES NOT CONSTITUTE A SOLICITATION OF PROXIES FOR ANY MEETING OR
A CALL FOR A SPECIAL MEETING OF THE COMPANY'S SHAREHOLDERS. ANY SUCH
SOLICITATION THAT THE PURCHASER OR MR. OSBORNE MIGHT MAKE WOULD ONLY BE MADE
PURSUANT TO SEPARATE PROXY SOLICITATION MATERIALS COMPLYING WITH ALL APPLICABLE
REQUIREMENTS OF SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED
(THE "EXCHANGE ACT"), AND THE RULES AND REGULATIONS PROMULGATED THEREUNDER.
THIS OFFER TO PURCHASE AND THE LETTER OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE WITH
RESPECT TO THE OFFER.
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 such extension or amendment), the Purchaser will accept for payment and
thereby purchase all Shares validly tendered and not withdrawn in accordance
with the procedures set forth in Section 4 on or prior to the Expiration Date
(as hereinafter defined). The term "Expiration Date" means 12:00 midnight, New
York City time, on June 14, 1995, unless and until the Purchaser, in its sole
discretion, shall have extended the period of time for which the Offer is open,
in which event the term "Expiration Date" shall mean the time and date at which
the Offer, as so extended by the Purchaser, shall expire.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THE SATISFACTION OF EACH
OF THE CONDITIONS SET FORTH IN THE INTRODUCTION AND IN SECTION 14. THE PURCHASER
RESERVES THE RIGHT (BUT SHALL NOT BE OBLIGATED), IN ACCORDANCE WITH APPLICABLE
RULES AND REGULATIONS OF THE COMMISSION, TO WAIVE ANY OR ALL OF SUCH CONDITIONS.
If, by the Expiration Date, any or all of such conditions have not been
satisfied, the Purchaser may, in its sole discretion, elect to (1) extend the
Offer and, subject to applicable withdrawal rights, retain all tendered Shares
until the expiration of the Offer, as extended, subject to the terms of the
Offer, (2) waive all of the unsatisfied conditions and, subject to complying
with applicable rules and regulations of the Commission, accept for payment all
Shares so tendered and not extend the Offer or (3) terminate the Offer and not
accept for payment any Shares and return all tendered Shares to tendering
shareholders. In the event that the Purchaser waives any conditions set forth in
Section 14, the Commission may, if the waiver is deemed to constitute a material
change to the information previously provided to the shareholders, require that
the Offer remain open for an additional period of time and/or that the Purchaser
disseminate information concerning such waiver.
The Purchaser expressly reserves the right, in its sole discretion, at any
time and from time to time, to extend the period during which the Offer is open
for any reason, including the occurrence of any of the events specified in
Section 14, by giving oral or written notice of such extension to the
Depositary. During any such extension, all Shares previously tendered and not
withdrawn will remain subject to the Offer and subject to the right of a
tendering shareholder to withdraw such shareholder's Shares. See Section 4.
Subject to the applicable regulations of the Commission, the Purchaser also
expressly reserves the right, in its sole discretion, at any time or from time
to time, to (1) delay acceptance for payment for any Shares pending receipt of
any regulatory or governmental approvals specified in Section 15, (2) terminate
the Offer (whether or not any Shares have theretofore been accepted for payment)
if any condition referred to in Section 14 has not been satisfied or upon the
occurrence of any event specified in Section 14, and (3) waive any condition or
otherwise amend the Offer in any respect, in each case, by giving oral or
written notice of such delay, termination, waiver or amendment to the Depositary
and, other than in the case of any such waiver, by making a public announcement
thereof. The Purchaser acknowledges that (1) Rule 14e-1(c) under the Exchange
Act requires the Purchaser to pay the consideration offered or return the Shares
tendered promptly after the termination or withdrawal of the Offer and (2) the
Purchaser may not delay acceptance for payment of, or payment for (except as
provided in clause (1) of the preceding sentence), any Shares upon the
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<PAGE> 7
occurrence of any event specified in Section 14 without extending the period of
time during which the Offer is open.
The rights reserved by the Purchaser in the preceding paragraph are in
addition to the Purchaser's rights pursuant to Section 14. Any such extension,
delay, termination or amendment will be followed as promptly as practicable by
public announcement thereof, and such announcement in the case of an extension
will be made no later than 9:00 a.m., New York City time, on the next business
day after the previously scheduled Expiration Date. Without limiting the manner
in which the Purchaser may choose to make any public announcement, subject to
applicable law (including Rules 14d-4(c) and 14d-6(d) under the Exchange Act,
which require the material changes to be promptly disseminated to the holders of
Shares), the Purchaser shall have no obligation to publish, advertise or
otherwise communicate any such public announcement other than by issuing a
release to the Dow Jones News Service.
If the Purchaser makes a material change in the terms of the Offer, or if
it waives a material condition to the Offer, the Purchaser will extend the Offer
and disseminate additional tender offer materials to the extent required by
Rules 14d-4(c) and 14d-6(d) under the Exchange Act. The minimum period during
which an offer must remain open following material changes in the terms of the
offer, other than a change in price or a change in percentage of securities
sought or a change in any dealer's soliciting fee, will depend upon the facts
and circumstances, including the materiality, of the changes. In the
Commission's view, an offer should remain open for a minimum of five business
days from the date the material change is first published, sent or given to
shareholders, and, if material changes are made with respect to information that
approaches the significance of price and the percentage of securities sought, a
minimum of ten business days may be required to allow for adequate dissemination
and investor response. With respect to a change in price or, subject to certain
limitations, a change in the percentage of securities sought or a change in any
dealer's soliciting fee, a minimum ten business day period from the date of such
change is generally required to allow for adequate dissemination to
shareholders. Accordingly, if prior to the Expiration Date, the Purchaser
decreases the number of Shares being sought, or increases or decreases the
consideration offered pursuant to the Offer, and if the Offer is scheduled to
expire at any time earlier than the period ending on the tenth business day from
the date that notice of such increase or decrease is first published, sent or
given to holders of Shares, the Offer will be extended at least until the
expiration of such ten business day period. For purposes of the Offer, a
"business day" means any day other than a Saturday, Sunday or a federal holiday
and consists of the time period from 12:01 a.m. through 12:00 midnight, New York
City time.
Pursuant to a request by Mr. Osborne under Massachusetts law, the Company
provided to Mr. Osborne a list of its shareholders and security position
listings. The Offer, and if required, other relevant materials, are being mailed
by the Purchaser to the persons shown by the Company's records to have been
record holders of the Shares and will be furnished to brokers, dealers,
commercial banks, trust companies and similar persons whose names, or the names
of whose nominees, appear on the Company's shareholder list or who are listed as
participants in a clearing agency's security position listing for subsequent
transmittal to beneficial owners of Shares.
2. ACCEPTANCE FOR PAYMENT AND PAYMENT. Upon the terms and subject to the
conditions of the Offer (including, if the Offer is extended or amended, the
terms and conditions of the Offer as so extended or amended), the Purchaser will
purchase, by accepting for payment, and will pay for, all Shares validly
tendered and not withdrawn (as permitted by Section 4) prior to the Expiration
Date promptly after the later to occur of (1) the Expiration Date and (2) the
satisfaction or waiver of the conditions to the Offer set forth in Section 14.
In addition, subject to applicable rules of the Commission, the Purchaser
expressly reserves the right to delay acceptance for payment of, or payment for,
Shares pending receipt of any regulatory or governmental approvals specified in
Section 15.
In all cases, payment for Shares purchased pursuant to the Offer will be
made only after timely receipt by the Depositary of (1) Share certificates for
such Shares or timely confirmation (a "Book-Entry Confirmation") of the
book-entry transfer of such Shares into the Depositary's account at The
Depository Trust Company, Midwest Securities Trust Company or Philadelphia
Depository Trust Company (each, a "Book-Entry Transfer Facility" and,
collectively, the "Book-Entry Transfer Facilities") pursuant to the procedures
7
<PAGE> 8
set forth in Section 3, (2) the appropriate Letter of Transmittal (or a
facsimile thereof), properly completed and duly executed, with any required
signature guarantees, or an Agent's Message (as defined below) in connection
with a book-entry transfer and (3) any other documents required by the Letter of
Transmittal.
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 acknowledgement from the participant in such Book-Entry
Transfer Facility tendering the Shares which are the subject of such Book-Entry
Confirmation that such participant has received and agrees to be bound by the
terms of the Letter of Transmittal and that the Purchaser may enforce such
agreement against such participant.
For purposes of the Offer, the Purchaser will be deemed to have accepted
for payment, and thereby purchased, Shares validly tendered and not withdrawn
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, upon the terms and subject to the conditions of the Offer, payment
for Shares purchased pursuant to the Offer will be made by deposit of the
purchase price therefor with the Depositary, which will act as agent for
tendering shareholders for the purpose of receiving payment from the Purchaser
and transmitting payment to shareholders whose Shares have been accepted for
payment. UNDER NO CIRCUMSTANCES WILL INTEREST ON THE PURCHASE PRICE FOR SHARES
BE PAID.
If any tendered Shares are not purchased pursuant to the Offer for any
reason, or if Share certificates are submitted representing more Shares than are
tendered, Share certificates representing unpurchased or untendered Shares will
be returned, without expense to the tendering shareholder (or, in the case of
Shares delivered by book-entry transfer into the Depositary's account at a
Book-Entry Transfer Facility pursuant to the procedures set forth in Section 3,
such Shares will be credited to an account maintained within such Book-Entry
Transfer Facility), as promptly as practicable following the expiration,
termination or withdrawal of the Offer.
If, prior to the Expiration Date, the Purchaser shall increase the
consideration offered to holders of Shares pursuant to the Offer, such increased
consideration shall be paid to all holders of Shares that are purchased pursuant
to the Offer, whether or not such Shares were tendered prior to such increase in
consideration.
The Purchaser reserves the right to transfer or assign, in whole or from
time to time in part, to one or more of the Purchaser's subsidiaries or
affiliates the right to purchase all or any portion of the Shares tendered
pursuant to the Offer, but any such transfer or assignment will not relieve the
Purchaser of its obligations under the Offer or prejudice the rights of a
tendering shareholder to receive payment for Shares validly tendered and
accepted for payment pursuant to the Offer.
3. PROCEDURES FOR ACCEPTING THE OFFER AND TENDERING SHARES.
Valid Tender of Shares. Except as set forth below, in order for Shares to
be validly tendered pursuant to the Offer, the Letter of Transmittal (or a
facsimile thereof), properly completed and duly executed, together with any
required signature guarantees, or an Agent's Message in connection with a
book-entry transfer of Shares and any other documents required by the Letter of
Transmittal must be received by the Depositary at one of its addresses set forth
on the back cover of this Offer to Purchase on or prior to the Expiration Date
and either (1) Share certificates representing tendered Shares must be received
by the Depositary, or such Shares must be tendered pursuant to the procedure for
book-entry transfer set forth below and Book-Entry Confirmation must be received
by the Depositary, in each case on or prior to the Expiration Date, or (2) the
guaranteed delivery procedures set forth below must be complied with.
THE METHOD OF DELIVERY OF SHARE CERTIFICATES, THE LETTER OF TRANSMITTAL AND
ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY TRANSFER
FACILITY, IS AT THE OPTION AND SOLE 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.
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<PAGE> 9
Book-Entry Transfer. The Depositary will make a request to establish
accounts with respect to the Shares at each of the Book-Entry Transfer
Facilities for purposes of the Offer within two business days after the date of
this Offer to Purchase. Any financial institution that is a participant in the
system of any Book-Entry Transfer Facility may make book-entry transfer of
Shares by causing such Book-Entry Transfer Facility to transfer such Shares into
the Depositary's account at such Book-Entry Transfer Facility 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 appropriate Letter
of Transmittal (or a facsimile thereof), properly completed and duly executed,
with any required signature guarantees, or an Agent's Message in connection with
a book-entry transfer, and any other required documents must, in any case, be
transmitted to and received by the Depositary at its address set forth on the
back cover of this Offer to Purchase on or prior to the Expiration Date, or the
guaranteed delivery procedure set forth below must be complied with.
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.
Signature Guarantees. If the Letter of Transmittal is signed by a
registered holder of the Shares and payment is to be made directly to that
holder at that holder's registered address, then no signature guarantee is
required on the Letter of Transmittal. Similarly, if the Shares are tendered for
the account of a firm that is a bank, broker, dealer, credit union, savings
association or other entity which is a member in good standing of the Securities
Transfer Agents Medallion Program (each, an "Eligible Institution"), no
signature guarantee is required. However, in all other cases, including if a
check is to be issued in the name of a person other the signer of the Letter of
Transmittal or if a check is to be sent to someone other than the signer of the
Letter of Transmittal or to an address other than that shown on the Letter of
Transmittal, signature guarantees are required. See Instructions 1 and 5 of the
Letter of Transmittal.
If the Share certificates are registered in the name of a person other than
the signer of the Letter of Transmittal, or if payment is to be made to, or
Share certificates for unpurchased Shares are to be issued or returned to, a
person other than the registered holder, then the tendered certificates must be
endorsed or accompanied by appropriate stock powers, signed exactly as the name
or names of the registered holder or holders appear on the certificates, with
the signatures on the certificates or stock powers guaranteed by an Eligible
Institution as provided in the Letter of Transmittal. See Instructions 1 and 5
of the Letter 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 time will not permit all required documents to reach the Depositary
on or prior to the Expiration Date, or the procedures for book-entry transfer
cannot be completed on a timely basis, such Shares may nevertheless be tendered
if all of the following guaranteed delivery procedures are duly complied with:
(1) the tender is made by or through an Eligible Institution;
(2) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form made available by the Purchaser, is
received by the Depositary, as provided below, on or prior to the
Expiration Date; and
(3) the Share certificates (or a Book-Entry Confirmation) representing
all tendered Shares, in proper form for transfer together with a properly
completed and duly executed Letter of Transmittal (or facsimile thereof),
with any required signature guarantees (or, in the case of a book-entry
transfer of Shares, an Agent's Message) and any other documents required by
the Letter of Transmittal are received by the Depositary within five New
York Stock Exchange, Inc. ("NYSE") trading days after the date of execution
of such Notice of Guaranteed Delivery.
The Notice of Guaranteed Delivery may be delivered by hand or mail or
transmitted by facsimile transmission to the Depositary and must include a
guarantee by an Eligible Institution in the form set forth in such Notice of
Guaranteed Delivery and a representation that the shareholder on whose behalf
the tender is
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<PAGE> 10
being made is deemed to own the Shares being tendered within the meaning of Rule
14e-4 under the Exchange Act.
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 Share certificates for, or of Book-Entry
Confirmation with respect to, tendered Shares, a properly completed and duly
executed Letter of Transmittal (or a facsimile thereof), together with any
required signature guarantees (or, in the case of a book-entry transfer of
Shares, an Agent's Message) and any other documents required by the Letter of
Transmittal. Accordingly, payment might not be made to all tendering
shareholders at the same time, and will depend upon when Share certificates are
received by the Depositary or Book-Entry Confirmations of such Shares are
received into the Depositary's account at a Book-Entry Transfer Facility.
BACKUP FEDERAL INCOME TAX WITHHOLDING. UNDER THE BACKUP FEDERAL INCOME TAX
LAWS APPLICABLE TO CERTAIN SHAREHOLDERS (OTHER THAN CERTAIN EXEMPT SHAREHOLDERS,
INCLUDING, AMONG OTHERS, ALL CORPORATIONS AND CERTAIN FOREIGN INDIVIDUALS), THE
DEPOSITARY MAY BE REQUIRED TO WITHHOLD 31% OF THE AMOUNT OF ANY PAYMENTS MADE TO
SUCH SHAREHOLDERS PURSUANT TO THE OFFER. TO PREVENT BACKUP FEDERAL INCOME TAX
WITHHOLDING, EACH SUCH SHAREHOLDER MUST PROVIDE THE DEPOSITARY WITH SUCH
SHAREHOLDER'S CORRECT TAXPAYER IDENTIFICATION NUMBER AND CERTIFY THAT SUCH
SHAREHOLDER IS NOT SUBJECT TO BACKUP FEDERAL INCOME TAX WITHHOLDING BY
COMPLETING THE SUBSTITUTE FORM W-9 INCLUDED IN THE LETTER OF TRANSMITTAL. SEE
INSTRUCTION 9 OF THE LETTER OF TRANSMITTAL.
Appointment as Proxy. By executing the Letter of Transmittal, a tendering
shareholder irrevocably appoints the Purchaser, its managing member and any
designees of the Purchaser, and each of them, as such shareholder's
attorneys-in-fact and proxies, with full power of substitution, in the manner
set forth in the Letters of Transmittal, 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 with respect to any and all other
Shares and other securities or rights issued or issuable in respect of such
Shares on or after the date of this Offer to Purchase. All such powers of
attorney and proxies shall be considered irrevocable and coupled with an
interest in the tendered Shares. Such appointment will be effective upon the
acceptance for payment of such Shares by the Purchaser in accordance with the
terms of the Offer. Upon such acceptance for payment, all other powers of
attorney and proxies given by such shareholder with respect to such Shares and
such other securities or rights prior to such payment will be revoked, without
further action, and no subsequent powers of attorney and proxies may be given by
such shareholder (and, if given, will not be deemed effective). The Purchaser,
its managing member and any designees of the Purchaser will, with respect to the
Shares and such other securities and rights for which such appointment is
effective, be empowered to exercise all voting and other rights of such
shareholder as they in their sole discretion may deem proper at any annual or
special meeting of the Company's shareholders, or any adjournment or
postponement thereof, or by consent in lieu of any such meeting or otherwise. In
order for Shares to be deemed validly tendered, immediately upon the acceptance
for payment of such Shares, the Purchaser or its designee must be able to
exercise full voting rights with respect to such Shares and other securities,
including voting at any meeting of shareholders.
Determination of Validity. All questions as to the form of documents and
the validity, eligibility (including time of receipt) and acceptance for payment
of any tender of Shares will be determined by the Purchaser, in its sole
discretion, whose determination shall 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 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 of the conditions of the Offer or any defect or
irregularity in any tender of Shares of any particular shareholder whether or
not similar defects or irregularities are waived in the case of other
shareholders.
Other Requirements. The Purchaser's interpretation of the terms and
conditions of the Offer (including the Letter of Transmittal and the
instructions thereto) will be final and binding. No tender of Shares will be
deemed to have been validly made until all defects and irregularities with
respect to such tender have been cured or waived by the Purchaser. None of the
Purchaser, Mr. Osborne or any of their respective affiliates or assigns, the
Dealer Manager, the Depositary, the Information Agent or any other person or
entity will be under
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<PAGE> 11
any duty to give any notification of any defects or irregularities in tenders or
incur any liability for failure to give any such notification.
The Purchaser's acceptance for payment of Shares tendered pursuant to any
of the procedures described above will constitute a binding agreement between
the tendering shareholder and the Purchaser upon the terms and subject to the
conditions of the Offer.
4. WITHDRAWAL RIGHTS. Except as otherwise provided in this Section 4,
tenders of Shares made pursuant to the Offer are irrevocable. Shares tendered
pursuant to the Offer may be withdrawn at any time on or prior to the Expiration
Date and, unless theretofore accepted for payment as provided herein, may also
be withdrawn at any time after July 17, 1995 (or such later date as may apply in
case the Offer is extended).
If, for any reason whatsoever, acceptance for payment of any Shares
tendered pursuant to the Offer is delayed, or the Purchaser is unable to accept
for payment or pay for Shares tendered pursuant to the Offer, then, without
prejudice to the Purchaser's rights set forth herein, the Depositary may,
nevertheless, on behalf of the Purchaser, retain tendered Shares and such Shares
may not be withdrawn except to the extent that the tendering shareholder is
entitled to and duly exercises withdrawal rights as described in this Section 4.
Any such delay will be by an extension of the Offer to the extent required by
law.
In order for a withdrawal to be effective, a written 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. Any
such notice of withdrawal must specify the name of the person who tendered the
Shares to be withdrawn, the number of Shares to be withdrawn, and the name of
the registered holder of the Shares as set forth in the Share certificate, if
different from that of the person who tendered such Shares. If Share
certificates have been delivered or otherwise identified to the Depositary, then
prior to the physical release of such certificates, the tendering shareholder
must submit the serial numbers shown on the particular certificates evidencing
the Shares to be withdrawn and the signature on the notice of withdrawal must be
guaranteed by an Eligible Institution, except in the case of Shares tendered for
the account of an Eligible Institution. If Shares have been tendered pursuant to
the procedures for book-entry transfer set forth in Section 3, the notice of
withdrawal must specify the name and number of the account at the appropriate
Book-Entry Transfer Facility to be credited with the withdrawn Shares, in which
case a notice of withdrawal will be effective if delivered to the Depositary by
any method of delivery described in the first sentence of this paragraph.
Withdrawals of Shares may not be rescinded. Any Shares properly withdrawn
will be deemed not validly tendered for purposes of the Offer, but may be
retendered at any subsequent time prior to the Expiration Date by following any
of the procedures described in Section 3.
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 shall be final and binding. None of the
Purchaser, Mr. Osborne or any of their respective affiliates or assigns, the
Dealer Manager, the Depositary, the Information Agent or any other person or
entity will be under any duty to give any notification of any defects or
irregularities in any notice of withdrawal or incur any liability for failure to
give any such notification.
5. CERTAIN FEDERAL INCOME TAX MATTERS. The receipt of cash for Shares
pursuant to the Offer will be a taxable transaction for federal income tax
purposes and may also be a taxable transaction under applicable state, local,
foreign and other tax laws. For federal income tax purposes, each selling
shareholder will generally recognize gain or loss equal to the difference
between the amount of cash received and such shareholder's tax basis for the
sold Shares, such gain or loss will be capital gain or loss (assuming the Shares
are held as a capital asset) and any such capital gain or loss will be long term
if, as of the date of sale, the Shares were held for more than one year or will
be short term if, as of such date, the Shares were held for one year or less.
The foregoing discussion may not be applicable to certain types of
shareholders, including shareholders who acquired Shares pursuant to the
exercise of employee stock options or otherwise as compensation, individuals who
are not citizens or residents of the United States and foreign corporations, or
entities that are
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otherwise subject to special tax treatment under the Internal Revenue Code of
1986, as amended (the "Code"), such as insurance companies, tax-exempt entities
and regulated investment companies.
THE FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL
INFORMATION ONLY. EACH SHAREHOLDER IS URGED TO CONSULT SUCH SHAREHOLDER'S TAX
ADVISER WITH RESPECT TO THE TAX CONSEQUENCES TO SUCH SHAREHOLDER OF THE OFFER,
INCLUDING FEDERAL, STATE AND LOCAL TAX CONSEQUENCES.
6. PRICE RANGE OF THE SHARES; DIVIDENDS. According to the Company's Form
10-K for fiscal year 1994 as filed with the Commission (the "1994 Form 10-K"),
the Shares are listed and traded on the NYSE. The following table sets forth,
for the periods indicated, the reported high and low sale prices for the Shares
on the NYSE, as reported in the 1994 Form 10-K with respect to periods occurring
in 1994 and 1993, and as reported by published financial sources with respect to
subsequent periods. No dividends were paid on the Shares at any time during
1993, 1994 or any subsequent period.
<TABLE>
<CAPTION>
HIGH LOW
----- -----
<S> <C> <C>
1993
First Quarter........................................................ $0.19 $0.13
Second Quarter....................................................... 0.17 0.11
Third Quarter........................................................ 0.20 0.13
Fourth Quarter....................................................... 0.20 0.14
1994
First Quarter........................................................ $0.22 $0.13
Second Quarter....................................................... 0.22 0.16
Third Quarter........................................................ 0.22 0.16
Fourth Quarter....................................................... 0.20 0.13
1995
First Quarter........................................................ $0.41 $0.17
Second Quarter (through May 15, 1995)................................ 0.38 0.25
</TABLE>
On May 16, 1995, the last full day of trading prior to the announcement of
this Offer, according to published sources, the reported closing price on the
NYSE Composite Tape for the Shares was $0.22 per Share. SHAREHOLDERS ARE URGED
TO OBTAIN A CURRENT MARKET QUOTATION FOR THE SHARES.
7. POSSIBLE EFFECTS OF THE OFFER ON THE MARKET FOR THE SHARES; STOCK
EXCHANGE LISTING; EXCHANGE ACT REGISTRATION; MARGIN REGULATIONS.
Possible Effects of the Offer on the Market for the Shares. The purchase of
Shares pursuant to the Offer will reduce the number of Shares that might
otherwise trade publicly and could adversely affect the liquidity and market
value of the remaining Shares or, possibly, the Income Shares held by the
public. The purchase of Shares pursuant to the Offer can also be expected to
reduce the number of holders of Shares. The Purchaser cannot predict whether the
reduction in the number of Shares that might otherwise trade publicly would have
an adverse or beneficial effect on the market price for or marketability of the
Shares (or the Income Shares) or whether it would cause future market prices for
the Shares to be greater or less than the Purchase Price.
Stock Exchange Listing. According to the NYSE's published guidelines, the
NYSE would consider delisting the Shares if, among other things, (1) the number
of record holders of at least 100 Shares should fall below 1,200, (2) the number
of publicly-held Shares (exclusive of holdings of the Purchaser and of officers
or directors of the Company or their immediate families and other concentrated
holdings of 10% or more ("NYSE Excluded Holdings")) should fall below 600,000,
or (3) the aggregate market value of publicly held Shares (exclusive of NYSE
Excluded Holdings) should fall below $5,000,000.
According to the 1994 Form 10-K, there were 7,800 holders of Shares as of
March 16, 1995. Depending upon the number of Shares acquired pursuant to the
Offer, Shares may no longer meet the requirements for continued listing on the
NYSE. If as a result of the purchase of Shares pursuant to the Offer, Shares no
longer
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<PAGE> 13
meet the requirements of the NYSE for continued listing and the listing of the
Shares is discontinued, the market for the Shares could be adversely affected.
In the event that the Shares were no longer listed or traded on the NYSE,
it is possible that the Shares would trade on another securities exchange or in
the over-the-counter market and that price quotations would be reported by such
exchange, through the National Association of Securities Dealers Automatic
Quotation System ("NASDAQ") or other sources. Such trading and the availability
of such quotations would, however, depend on the number of shareholders and/or
the aggregate market value of the Shares remaining at such time, the interest in
maintaining a market in the Shares on the part of securities firms, the possible
termination of registration of the Shares under the Exchange Act as described
below and other factors.
Exchange Act Registration. The Shares, along with the Income Shares, are
currently registered under the Exchange Act. The purchase of the Shares pursuant
to the Offer may result in the Shares becoming eligible for deregistration under
the Exchange Act. Registration of the Shares may be terminated upon application
by the Company to the Commission if the Shares are not listed on a "national
securities exchange" and there are fewer than 300 record holders of Shares.
Termination of registration of the Shares under the Exchange Act would
substantially reduce the information required to be furnished by the Company to
the holders of the Shares and the Commission and would make certain provisions
of the Exchange Act, such as the short-swing profit recovery provisions of
Section 16(b) and the requirements of furnishing a proxy statement in connection
with shareholders' meetings pursuant to Section 14(a) or 14(c) and the related
requirement of an annual report, no longer applicable to the Shares. If the
Shares are no longer registered under the Exchange Act, the requirements of Rule
13e-3 under the Exchange Act with respect to "going private" transactions would
no longer be applicable to the Shares. Further, "affiliates" of the Company and
persons holding "restricted securities" of the Company could be deprived of the
ability to dispose of such securities pursuant to Rule 144 promulgated under the
Exchange Act. If registration under the Exchange Act were terminated, the Shares
would no longer be "margin securities" or eligible for stock exchange listing or
NASDAQ reporting. The Purchaser has no intention to cause the Company to make an
application for termination of registration of the Shares prior to the
consummation of the Proposed Merger.
If the registration of the Shares is not terminated prior to the Proposed
Merger, the Shares will be delisted from the NYSE and the registration of the
Shares under the Exchange Act will be terminated following the consummation of
the Proposed Merger.
Margin Regulations. The Shares are currently "margin securities" under the
regulations of the Board of Governors of the Federal Reserve System (the
"Federal Reserve Board"), which has the effect, among other things, of allowing
brokers to extend credit on the collateral of the Shares for the purpose of
buying, carrying or trading in securities ("purpose loans"). Depending upon
factors similar to those described above with respect to stock exchange listing
and market quotations, the Shares might no longer constitute "margin securities"
for the purposes of the Federal Reserve Board's margin regulations and,
therefore, could no longer be used as collateral for purpose loans made by
brokers.
8. CERTAIN INFORMATION CONCERNING THE COMPANY.
The Company is a Massachusetts business trust with its principal executive
offices located at 751 Broad Street, Prudential Plaza, Newark, New Jersey
07102-3777. The following information concerning the Company has been derived
from the Company's 1994 Form 10-K and Form 10-Q for the period ended March 31,
1995, and other publicly-available documents and records on file with the
Commission. Although the Purchaser and Mr. Osborne do not have any knowledge
that any such information is untrue, neither the Purchaser nor Mr. Osborne
assumes any responsibility for the accuracy or completeness of information
contained in this Offer to Purchase with respect to the Company or for any
failure by the Company to disclose events which may have occurred or may affect
the significance or accuracy of any such information but which are unknown to
the Purchaser and Mr. Osborne.
Reports, proxy statements and other information regarding the Company
should be available for inspection at the public reference facilities of the
Commission located in Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C.
20549, and should also be available for inspection and copying at prescribed
rates at
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the regional offices of the Commission located at Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661, and Seven World Trade
Center, Suite 1300, New York, New York 10048. Copies of this material may also
be obtained by mail, upon payment of the Commission's customary fees, from the
Commission's principal office at 450 Fifth Street, N.W., Washington, D.C. 20549.
In addition, such material should also be available for inspection at the
library of the NYSE, 20 Broad Street, New York, New York 10005.
General. Prudential Realty Trust, a Massachusetts business trust (the
"Company"), was formed pursuant to a Declaration of Trust dated June 19, 1985
and amended August 30, 1985. The Company has no employees. The Company
anticipates that it will qualify as a REIT under the Code for the period ended
March 31, 1995 and the years ended December 31, 1994 and 1993.
The Company's business consists of holding equity investments in
income-producing properties in order to provide periodic distributions of cash
flow from operations on the Income Shares and to realize long-term capital
appreciation for eventual distribution on the Shares.
Shares and Income Shares. Shares of beneficial interest of the Company are
divided into two separate classes. In general, the holders of the Income Shares
are entitled to all "Distributable Cash" of the Company (as such term is defined
in the Declaration of Trust) and, at or prior to the termination of the Company,
to redemption of such shares up to the stated value of $8.00 per share plus
accrued and unpaid dividends. The holders of the Shares are entitled to all
other shareholder distributions which would, in general, include capital gains,
if any, of the Company. The holders of Shares are also entitled to participate
in the distribution of assets, if any, after receipt by the holders of Income
Shares of the $8.00 per share stated value of the Income Shares. However,
according to the 1994 Form 10-K and based upon historical December 31, 1994
amounts, there would have been no available distributions to holders of the
Shares had the Company been liquidated on December 31, 1994. For a discussion of
litigation filed by Mr. Osborne against the Company and its Trustees, which may
determine whether the Shares are entitled to receive a distribution of capital
gains upon sale of any of the Company's properties, see Section 10.
Under the terms of the Declaration of Trust, a Trustee may be removed with
or without cause by vote or consent of the holders of a majority of the
outstanding Shares and Income Shares authorized to vote, acting together as a
single class. In general, under the Declaration of Trust, other than the removal
or election of Trustees, all actions to be taken by the holders of the Shares
and Income Shares, including fundamental corporate transactions, such as the
Proposed Merger, require the approval of the holders of a majority of each
class, voting separately as a class.
Properties. The Company owns three properties which were purchased in 1985
for a combined cost of $99.9 million. The three properties are Huntington
Business Campus, located in Melville, New York; Maple Plaza located in
Parsippany, New Jersey; and 19 buildings in Park 100 located in Indianapolis,
Indiana. The Company has stated that no other real estate investments will be
made except those involving the expansion and rehabilitation of these
properties.
Based on appraisals conducted as of December 31, 1994 on behalf of the
Company, the appraised value of the Company's properties was $73.7 million.
Management. The Prudential Realty Advisors, Inc. (the "Company Advisor")
has entered into an agreement to act as an advisor to the Company. In 1994, the
Company paid the Company Advisor approximately $951,000 for portfolio management
and other advisory fees. In addition, the Company paid Premisys Real Estate
Services, Inc., a related party of the Company ("Premisys"), approximately
$507,000 for property management, construction management and leasing services.
Finite-Life REIT. Under the terms of the Declaration of Trust, the Company
is scheduled to liquidate during the 18 month period that ends about mid-1997;
provided that the life of the Company may be extended if, among other matters,
(1) a majority of the Trustees affirmatively determines that an extension would
be in the best interests of the shareholders of the Company and recommends to
the shareholders of the Company a single specified extension of the term of the
Company, which extension may not be more than two years, and
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(2) the holders of a majority of each of the Shares and Income Shares then
outstanding and entitled to vote thereon approve such extension.
Engagement of J.P. Morgan; Liquidation. On December 28, 1994, the Trustees
of the Company engaged J. P. Morgan to review and provide recommendations on the
strategic options available to maximize the value of the Company to its
shareholders as it approaches its scheduled liquidation date. J.P. Morgan
recommended that the Trustees proceed to solicit bids for the Shares and Income
Shares of the Company or its assets, in the form of cash and/or stock. On
February 9, 1995, the Trustees accepted J.P. Morgan's and the Company Advisor's
recommendation and the Trustees approved the engagement of J.P. Morgan to
solicit bids for the Company's assets. In the Company's 10-Q for the period
ended March 31, 1995, the Company indicates that if acceptable bids are received
for the Company's properties that the Company may be liquidated in the current
year. However, the Trustees have not yet adopted a formal plan of liquidation.
9. CERTAIN INFORMATION CONCERNING THE PURCHASER AND MR. OSBORNE.
The Purchaser. The Purchaser is a newly-formed Ohio limited liability
company, of which Mr. Osborne is the sole managing member. The Purchaser has not
conducted any business other than in connection with the Offer. The Purchaser's
business address is 7001 Center Street, Mentor, Ohio 44060.
The Managing Member. Mr. Osborne is President and Chief Executive Officer
of OsAir, Inc., Mentor, Ohio ("OsAir"), a company he founded in 1963. OsAir is a
manufacturer of industrial gases for pipeline delivery and a real property
developer. Mr. Osborne has substantial experience in real estate development and
management. During his career as a real estate entrepreneur, he has developed,
managed or sold over 1.0 million square feet of industrial space and over 1.5
million square feet of commercial space, and is currently developing a 250 acre
industrial park in Mentor, Ohio. At its formation in May 1995, Mr. Osborne
became the sole managing member of the Purchaser. Mr. Osborne is also sole
managing member of Turkey Vulture Fund XIII, Ltd., which is described further
below, and Vice-Chairman and Director of Great Lakes Bank, of Mentor, Ohio, a
position he has held since July 1994. From 1985 through 1990, Mr. Osborne was
Chairman of the Board of Peoples Savings Bank of Ashtabula, Ohio. Mr. Osborne's
business address is 7001 Center Street, Mentor, Ohio 44060. Mr. Osborne is a
citizen of the United States.
Between August 15, 1994 and April 26, 1995, Mr. Osborne acquired a total of
2,160,100 Shares, representing approximately 19.4% of the number of Shares
outstanding. Mr. Osborne has sole power to vote, or to direct the voting of, and
the sole power to dispose or to direct the disposition of, the 2,160,100 Shares
owned by him. These purchases of Shares have been reported in a statement on
Schedule 13D and amendments thereto filed with the Commission. The purchases of
Shares by Mr. Osborne that were effected during the past sixty days are set
forth on Schedule I.
The Fund. Turkey Vulture Fund XIII, Ltd., an Ohio limited liability company
(the "Fund"), was formed in November 1994, and its business address is 7001
Center Street, Mentor, Ohio 44060. Mr. Osborne has been sole managing member of
the Fund since its formation. The principal business of the Fund is to acquire,
hold, sell or otherwise invest in all types of securities and other instruments.
The primary investment objective of the Fund is to maximize appreciation of the
Fund's assets by investing in securities, primarily the common stock of
publicly-traded entities, that Mr. Osborne, the sole managing member, believes
(1) the market has undervalued and (2) offer an opportunity for a tender offer,
merger, asset disposition or other form of corporate reorganization whether by
the Fund or a third party.
In addition to the Shares owned by Mr. Osborne, the Fund owns 1,873,300
Income Shares, representing approximately 16.8% of the number of Income Shares
outstanding. These purchases of Income Shares have been reported in a statement
on Schedule 13D and amendments thereto filed with the Commission. Under the
regulations of the Commission, Mr. Osborne, as sole managing member of the Fund,
may be deemed to own beneficially such Income Shares, and the Fund and Mr.
Osborne may be deemed to be members of a group. A summary of an agreement
entered into by Mr. Osborne and Smith Barney, Inc. relating to the Income Shares
is set forth in Schedule I.
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10. BACKGROUND OF THE OFFER; CONTACTS WITH THE COMPANY.
Mr. Osborne began acquiring Shares on August 15, 1994.
On November 29, 1994, Mr. Osborne filed with the Commission a statement on
Schedule 13D that stated, among other matters, that he was considering whether
to proceed with one or more of the following transactions: (1) consolidation or
disposition of underperforming assets of the Company; (2) expansion of the
services offered by the Company; (3) merger, consolidation or other business
combination of the Company with another company; (4) making a tender offer for
the Shares or Income Shares; (5) taking the Company private in a "going private"
transaction; (6) gaining representation on the Board of Trustees of the Company;
or (7) making such other changes to the business and corporate structure of the
Company as he may deem to be in the best interest of the Company and himself. In
addition, Mr. Osborne indicated that, at that time, he had no plans to take any
of the foregoing actions.
Mr. Osborne and his advisors met with representatives of the Company on
December 21, 1994, February 7, 1995, and March 16, 1995 to discuss his
investment in the Company and the alternatives available to Mr. Osborne.
On December 28, 1994, the Trustees of the Company engaged J.P. Morgan to
review and provide recommendations on the strategic options available to
maximize the value of the Company to its shareholders as it approaches its
scheduled liquidation date. J.P. Morgan recommended that the Trustees proceed to
solicit bids for the shares of the Company or its assets, in the form of cash
and/or stock.
On February 9, 1995, the Trustees accepted J.P. Morgan's and the Company
Advisor's recommendation and the Trustees approved the engagement of J.P. Morgan
to solicit bids for the Company's assets.
On February 16, 1995, Mr. Osborne retained Kemper Securities, Inc.
("Kemper") to advise Mr. Osborne and his affiliates on a variety of subjects
relating to the Company, including, but not limited to, the market value of the
Company, the pricing and terms of any acquisition proposal, strategies to be
used in negotiations, and to provide analytical and advisory support throughout
the negotiations between Mr. Osborne and the Company.
In the March 16, 1995 meeting and in a letter from Mr. Osborne to the
Trustees dated March 22, 1995, Mr. Osborne stated his belief that it was not an
appropriate time to liquidate the Company because, according to the Company's
estimates, a liquidation would provide only a small premium, if any, over
current market prices to holders of the Income Shares and no payment to the
holders of the Shares. In addition, Mr. Osborne proposed that the Company
consummate a merger or similar business combination with a self-administered,
indefinite-life REIT, with a single class of common stock, to be formed by the
Purchaser or its affiliates (the "Proposed Merger"). As proposed by Mr. Osborne
under the terms of the Proposed Merger, each then outstanding Share and each
then outstanding Income Share (other than Shares and Income Shares held in the
treasury of the Company) would be converted into the right to receive a
prescribed number of shares of the new REIT, which would result in the holders
of the outstanding Shares owning approximately 6.9% of the new REIT and holders
of the Income Shares owning approximately 93.1% of the new REIT. Based on the
Company's current properties, Mr. Osborne committed to lower the management
advisory costs in the new REIT resulting from the Proposed Merger by at least
$400,000 per annum from the management advisory fees paid by the Company in
1994. He stated that the new REIT would focus on acquiring and operating office
and industrial properties in the Northeast and Midwest. Mr. Osborne also
proposed in the March 16, 1995 meeting that the parties enter into a standstill
agreement whereby the Trustees would agree to refrain from disposing of any of
the Company's properties while the Trustees evaluated Mr. Osborne's proposal.
Mr. Osborne proposed the standstill agreement because of the Trustees decision
to consider liquidating the Company. See Section 11 for a discussion of the
terms of the Proposed Merger.
In the March 16, 1995 meeting and in a letter dated March 23, 1995 from
Jeffrey L. Danker, a Trustee and President and Principal Executive Officer of
the Company, to Mr. Osborne, the Company declined to enter into negotiations
with Mr. Osborne and refused to enter into the standstill agreement proposed by
Mr. Osborne. The March 23, 1995 letter indicated that no decision will be made
by the Trustees until J.P. Morgan's analysis was completed.
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On April 5, 1995, Mr. Osborne commenced an action (the "Removal Action") in
the Probate Court Department of the Trial Court of the Commonwealth of
Massachusetts captioned Richard M. Osborne v. Prudential Realty Trust, and
Jeffrey L. Danker, Thomas F. Murray, Joseph M. Selzer, Richard J. Boyle, Francis
L. Bryant, as Trustees of Prudential Realty Trust (Suffolk No. 95-E-0016). The
complaint alleges, among other matters, that the Trustees are in direct conflict
with the Company's shareholders, and by charging excessively high fees and
attempting to liquidate the Company's assets, have engaged in and are continuing
to engage in a pattern of conduct designed to waste the Company's assets while
at the same time enriching the Trustees. The complaint seeks immediate removal
of the Trustees.
On April 14, 1995, Mr. Osborne commenced a second action in the Superior
Court Department of the Trial Court of the Commonwealth of Massachusetts
captioned Richard M. Osborne, et al. v. Prudential Realty Trust, and Jeffrey L.
Danker, Thomas F. Murray, Joseph M. Selzer, Richard J. Boyle, Francis L. Bryant,
as Trustees of Prudential Realty Trust (Civ. Act. No. 95-2095A). The complaint
reiterates certain allegations set forth in the Removal Action and further
alleges, among other matters, that the Trustees intend to favor the interests of
the holders of the Income Shares over the holders of the Shares. According to
the 1994 Form 10-K,
The holders of the Income Shares are entitled, in general, to all
Distributable Cash of [the Company] (as defined in the Declaration of
Trust) and, at or prior to the termination of [the Company], to
redemption of such shares up to the stated value of $8.00 per share
plus accrued and unpaid dividends. The holders of the . . . Shares are
entitled to all other shareholder distributions which will, in
general, include capital gains, if any, of [the Company].
However, the complaint alleges that nowhere in the Company's Declaration of
Trust or its Prospectus, dated August 22, 1985, does it state that redemption of
the Income Shares shall be made prior to the payment of capital gains to holders
of the Shares. On the contrary, the complaint alleges that the offering
documents specify that the payment of capital gains is distinct from
distributions and dividends, and shall be paid immediately upon the disposition
of any of the Company's assets, if any such capital gain is realized.
The complaint seeks unspecified damages for the alleged breach of fiduciary
duty by the Trustees, and that those damages be trebled or at least doubled. In
addition, the complaint seeks a declaratory judgment with respect to the
Trustees' obligations to distribute capital gains to the holders of Shares or
Income Shares.
IF THE COURT DETERMINES THAT CAPITAL GAINS ARE PAYABLE TO THE HOLDERS OF
SHARES PRIOR TO THE REDEMPTION OF THE INCOME SHARES, TENDERING SHAREHOLDERS WILL
FORGO THE OPPORTUNITY TO RECEIVE CAPITAL GAINS DISTRIBUTIONS, IF ANY. Even if
the court makes such determination, there is no assurance that there will be any
capital gains if any or all of the Company's properties are sold. Neither the
Purchaser nor Mr. Osborne can determine whether or not there will be capital
gains to distribute.
On April 25, 1995, the Company filed a Form 8-K with the Commission in
which it stated, among other things, that the factual basis of the two
above-described lawsuits is incorrect and all the claims asserted therein are
lacking in merit.
On May 4, 1995, Mr. Osborne attended the annual shareholders meeting of the
Company at which he reiterated his opposition to automatic liquidation and
outlined plans for the Proposed Merger. In his plans for the Proposed Merger,
Mr. Osborne indicated that, based on the Company's current properties, he
believed an additional $200,000 in annual savings could be achieved with a
self-administered REIT, bringing his estimated management advisory savings,
based on the Company's current properties, to $600,000 per annum.
Mr. Danker and Joseph M. Selzer, a Trustee and Vice President, Treasurer
and Principal Financial Officer of the Company, scheduled a meeting with Mr.
Osborne on May 8, 1995. By telephone call to Mr. Osborne on May 8, 1995, Mr.
Danker cancelled the scheduled meeting.
11. PURPOSE OF THE OFFER; THE PROPOSED MERGER; PLANS FOR THE COMPANY.
The purpose of the Offer is (1) to acquire a substantial equity interest in
the Company to prevent the Company's liquidation, while maintaining the
Company's status as a REIT, and (2) to make a profit.
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Upon purchasing the Shares pursuant to the Offer, the Purchaser currently
intends to take such steps as it deems necessary to prevent the automatic
liquidation of the Company. The Purchaser currently proposes, as soon as
practicable following consummation of the Offer, to seek to have the Company
consummate the Proposed Merger. However, certain provisions of the Declaration
of Trust affect the ability of the Purchaser to consummate the Proposed Merger.
Accordingly, the timing and details of the Proposed Merger will depend on a
variety of factors and legal requirements, including but not limited to the
actions of the Trustees of the Company.
The descriptions in this Section and elsewhere in this Offer to Purchase of
certain provisions of the Declaration of Trust are qualified in their entirety
by reference to the text of the Declaration of Trust.
The Proposed Merger. As proposed by Mr. Osborne under the terms of the
Proposed Merger, each then outstanding Share and each then outstanding Income
Share (other than Shares and Income Shares held in the treasury of the Company)
would be converted into the right to receive a prescribed number of shares of
the new REIT, which would result in the holders of the outstanding Shares owning
approximately 6.9% of the new REIT and holders of the Income Shares owning
approximately 93.1% of the new REIT. If the Proposed Merger is consummated,
there is no assurance that the aggregate market capitalization of the new REIT
would be greater or less than the aggregate market capitalization of the
Company. See Section 10.
The Purchaser and Mr. Osborne believe that a self-administered REIT would
be more cost effective than the current arrangement with the Company Advisor and
Premisys. Based on the Company's current properties, Mr. Osborne has committed
to lower the management advisory costs in the new REIT by at least $400,000, and
has indicated that he believes an additional $200,000 in annual savings could be
achieved with a self-administered REIT, bringing his estimated management
advisory savings, based on the Company's current properties, to $600,000 per
annum. However, there is no assurance that in a self-administered REIT such
additional $200,000 savings could be achieved or that the Company's properties
will remain unchanged.
The Purchaser and Mr. Osborne intend that the new REIT resulting from the
Proposed Merger focus on acquiring and operating office and industrial
properties in the Northeast and Midwest. No properties have been identified.
In the event the Proposed Merger is consummated, the Purchaser and Mr.
Osborne intend to conduct a review of the Company and its properties, policies,
operations and management. Neither the Purchaser nor Mr. Osborne currently has
plans to divest any of the Company's properties. Based on their review of the
Company, the Purchaser and Mr. Osborne reserve the right to modify their current
plans.
THE PURCHASER IS WILLING TO ENTER INTO A MERGER AGREEMENT WITH THE COMPANY
CONTAINING THE TERMS OF THE PROPOSED MERGER DESCRIBED HEREIN.
THE OFFER IS NOT CONDITIONED ON THE CONSUMMATION OF THE PROPOSED MERGER.
THE PURCHASER RESERVES THE RIGHT TO AMEND THE OFFER (INCLUDING AMENDING THE
PURCHASE PRICE) OR TERMINATE THE OFFER IF IT OR AN AFFILIATE ENTERS INTO A
MERGER AGREEMENT WITH THE COMPANY OR OTHERWISE TO NEGOTIATE A MERGER AGREEMENT
WITH THE COMPANY NOT INVOLVING A TENDER OFFER. SEE SECTION 14.
Trustees' Approval; Replacement of Trustees. Under the terms of the
Declaration of Trust, approval of a majority of the Trustees, including a
majority of the Trustees who are not affiliated with the Company Advisor, who do
not own any interest in the Company Advisor and who do not perform any services
for the Company except as Trustee (the "Unaffiliated Trustees"), is required for
the Proposed Merger.
In the event that the Purchaser is unable to negotiate a definitive merger
or other agreement with the Company with respect to the Proposed Merger, the
Purchaser will make a determination whether to seek, by written consent in lieu
of a meeting or through a proxy contest at an annual meeting of shareholders or
a special meeting called for that purpose, sufficient representation among the
Company's Trustees to cause the Trustees to approve the Proposed Merger and
submit it for the approval of the holders of the Shares and Income Shares.
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Upon consummation of the Offer and assuming that the Purchaser purchases
7,150,000 Shares, the Purchaser, Mr. Osborne and the Fund will own approximately
83.6% of the outstanding Shares and hold approximately 50.2% of the outstanding
voting power of the outstanding Shares and Income Shares with respect to the
election of Trustees. Under the terms of the Declaration of Trust, a Trustee may
be removed with or without cause by vote or consent of the holders of a majority
of the outstanding Shares and Income Shares authorized to vote, acting together
as a single class. Accordingly, the Purchaser, Mr. Osborne and the Fund will
have sufficient voting power (without the consent of any other holder of the
Shares or Income Shares), as holders of a majority of the combined voting power
of the outstanding Shares and Income Shares, to remove all of the current
Trustees of the Company and to elect new Trustees. The Minimum Condition is
intended to provide assurance to the Purchaser that the Trustee approval
requirements described above can be achieved. THE OFFER IS CONDITIONED UPON THE
MINIMUM CONDITION BEING SATISFIED.
In the event the Purchaser attains sufficient representation among the
Trustees, the Trustees elected by the Purchaser may be able to effect certain
changes in the operation of the Company. Among other matters, the Trustees
elected by the Purchaser could under the terms of the Declaration of Trust,
terminate the agreement with the Company Advisor. Such termination may occur by
a majority vote of the Unaffiliated Trustees upon 60 days' written notice to the
Company Advisor.
Shareholder Approval. In general, under the Declaration of Trust, other
than the removal or election of Trustees, all actions to be taken by the holders
of the Shares and Income Shares, including fundamental corporate transactions,
such as the Proposed Merger, require the approval of the holders of a majority
of each class, voting separately as a class. Because the Purchaser, Mr. Osborne
and the Fund own only 16.8% of the Income Shares outstanding (all of which
Income Shares are owned by the Fund), the Purchaser, Mr. Osborne and the Fund
will not have sufficient voting power to effect the Proposed Merger without the
consent of the holders of a sufficient number of Income Shares.
Maintenance of REIT Status. The Purchaser and Mr. Osborne are aware that
because the Company is a REIT the Code and the Declaration of Trust may govern
the acquisition of additional Shares and Income Shares by the Purchaser. In
particular, the Code provides that to qualify as a REIT an entity must (1)
throughout each taxable year have at least 100 shareholders and (2) during the
last half of each taxable year have not more than 50% in value of the
outstanding shares of the entity owned, directly or indirectly, by five or fewer
individuals. The Declaration of Trust provides that any purported transfer of
shares that would result in the disqualification of the Company as a REIT is
deemed null and void. The Purchaser does not believe that consummation of the
Offer or the Proposed Merger would result in the disqualification of the Company
as a REIT because, assuming successful consummation of the Offer, the Shares and
Income Shares owned by the Purchaser, Mr. Osborne and the Fund would combined
represent significantly less than 50% in value of the outstanding Shares and
Income Shares.
Appraisal Rights. Holders of the Shares do not have statutory appraisal
rights under the Massachusetts General Laws as a result of the Offer, nor would
such holders have such appraisal rights in connection with the Proposed Merger.
Other. The timing and details of the Proposed Merger will depend on a
variety of factors and legal requirements. Although the Purchaser seeks to have
the Company consummate the Proposed Merger as soon as practicable following
consummation of the Offer, the Purchaser can give no assurance that the Proposed
Merger will be consummated or as to the timing of the Proposed Merger if it is
consummated. Although the Purchaser intends to seek to consummate the Proposed
Merger on the terms described above, it is possible that as a result of delays
in the Purchaser's ability to effect the Proposed Merger, information obtained
by the Purchaser after the date of this Offer, changes in general economic or
market conditions or in the business, operations or financial condition or
prospects of the Company, any of the Minimum Condition, No Impediments Condition
or No Property Sale Condition not being satisfied or any other currently
unforeseen factors, the Proposed Merger may not be so consummated, may be
delayed or abandoned or may be proposed on different terms. The Purchaser is
willing to enter into a merger agreement with the Company on substantially the
terms of the Proposed Merger. Although it has no intention to do so, the
Purchaser expressly
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reserves the right to propose a merger on terms other than those described above
and the right to withdraw any merger proposal.
The Purchaser reserves the right to purchase, following consummation or
termination of the Offer, additional Shares and Income Shares in the open
market, in privately negotiated transactions, in another tender offer or
otherwise. In addition, in the event that the Purchaser decides not to
consummate the Proposed Merger, to propose a merger or other business
combination on terms other than those described above, or to withdraw any merger
previously proposed, the Purchaser will evaluate its other alternatives. These
alternatives could include purchasing additional Shares and Income Shares in the
open market, in privately negotiated transactions, in another tender offer or
otherwise, or taking no further action to acquire additional Shares. Any
additional purchases of Shares could be at a price greater or less than the
price to be paid for Shares in the Offer and could be for cash or other
consideration. Alternatively, the Purchaser, Mr. Osborne and the Fund may sell
or otherwise dispose of any or all Shares or Income Shares acquired pursuant to
the Offer or otherwise. Such transactions involving Shares may be effected on
terms and at prices then determined by the Purchaser and Mr. Osborne, which may
vary from the price paid for the Shares in the Offer.
THE OFFER DOES NOT CONSTITUTE A SOLICITATION OF PROXIES FOR ANY MEETING OR
A CALL FOR A SPECIAL MEETING OF THE COMPANY'S SHAREHOLDERS. ANY SUCH
SOLICITATION THAT THE PURCHASER OR MR. OSBORNE MIGHT MAKE WOULD BE MADE ONLY
PURSUANT TO SEPARATE PROXY SOLICITATION MATERIALS COMPLYING WITH ALL APPLICABLE
REQUIREMENTS OF SECTION 14(A) OF THE EXCHANGE ACT, AND THE RULES AND REGULATIONS
PROMULGATED THEREUNDER.
12. SOURCE AND AMOUNT OF FUNDS.
The total amount of funds required by the Purchaser to purchase all
outstanding Shares pursuant to the Offer and to pay fees and expenses related to
the Offer is estimated to be approximately $2.7 million. The Purchaser plans to
obtain all funds needed for the Offer through a capital contribution which will
be made by Mr. Osborne to the Purchaser. Mr. Osborne plans to use personal
funds, and reserves the right to borrow funds from one or more banks, to make
such capital contribution. There are no commitments by such banks at this time.
If Mr. Osborne determines to borrow funds from one or more banks, he believes
any credit agreement will be in effect prior to the initial Expiration Date.
13. DIVIDENDS AND DISTRIBUTIONS.
If, on or after May 10, 1995, the Company (1) splits, combines or otherwise
changes the Shares or its capitalization, (2) acquires Shares or otherwise
causes a reduction in the number of Shares, (3) issues or sells additional
Shares or any shares of any other class of capital stock, other voting
securities or any securities convertible into or exchangeable for, or rights,
warrants or options, conditional or otherwise, to acquire, any of the foregoing
or (4) discloses that it has taken such action, then, without prejudice to the
Purchaser's rights under Section 14, the Purchaser, in its sole discretion, may
make such adjustments in the purchase price and other terms of the Offer and the
Proposed Merger as it deems appropriate to reflect such split, combination or
other change of action, including, without limitation, the Minimum Condition or
the number or type of securities offered to be purchased.
If on or after May 10, 1995, the Company declares or pays any dividend on
the Shares or any distribution (including, without limitation, the issuance of
additional Shares pursuant to a stock dividend or stock split, the issuance of
other securities or the issuance of rights for the purpose of any securities)
with respect to the Shares that is payable or distributable to shareholders of
record on a date prior to the transfer into the name of the Purchaser or its
nominees or transferees on the Company's stock transfer records of the Shares
purchased pursuant to the Offer, and if Shares are purchased in the Offer, then,
without prejudice to the Purchaser's rights under Section 14, (1) the purchase
price per Share payable by the Purchaser pursuant to the Offer shall be reduced
by the amount of any such cash dividend or cash distribution and (2) any such
non-cash dividend, distribution, issuance, proceeds or rights to be received by
the tendering shareholders shall (a) be received and held by the tendering
shareholders for the account of the Purchaser and will be required to be
promptly remitted and transferred by each tendering shareholder to the
Depositary for the account of the Purchaser, accompanied by appropriate
documentation of transfer or (b) at the direction of the Purchaser, be exercised
for the benefit of the Purchaser, in which case the proceeds of such exercise
will promptly be remitted to the
20
<PAGE> 21
Purchaser. Pending such remittance and subject to applicable law, the Purchaser
will be entitled to all rights and privileges as owner of any such non-cash
dividend, distribution, issuance, proceeds or rights and may withhold the entire
purchase price or deduct from the purchase price the amount of value thereof, as
determined by the Purchaser in its sole discretion.
14. CERTAIN CONDITIONS OF THE OFFER.
Notwithstanding any other provision of the Offer, the Purchaser shall not
be required to accept for payment or, subject to any applicable rules and
regulations of the Commission, including Rule 14e-1(c) under the Exchange Act
(relating to the Purchaser's obligation to pay for or return tendered Shares
promptly after expiration or termination of the Offer), to pay for any Shares
tendered, and may postpone the acceptance for payment or, subject to the
restriction referred to above, payment for any Shares tendered, and may amend or
terminate the Offer (whether or not any Shares have theretofore been purchased
or paid for) if, in the sole judgment of the Purchaser, (1) any condition to
consummation of the Offer set forth in the Introduction to this Offer to
Purchase (relating to the Minimum Condition, No Impediments Condition or No
Property Sale Condition) has not been satisfied or (2) at any time on or after
May 15, 1995 and before acceptance for payment of, or payment for, such Shares
any of the following events shall occur or shall be deemed by the Purchaser to
have occurred or Mr. Osborne or the Purchaser shall have learned about any such
events applicable to or affecting the Company or any of its affiliates which
shall not have been previously publicly disclosed by the Company:
(a) there shall have been threatened, instituted or pending any
action, proceeding, application, claim or counterclaim by or before any
court, government or governmental, regulatory or administrative agency,
authority or tribunal, domestic, foreign or supranational (whether brought
by the Company, an affiliate of the Company or any other person or entity),
which (i) challenges or seeks to challenge the acquisition by the Purchaser
of the Shares (or any of them), restrains, prohibits or delays or seeks to
restrain, prohibit or delay the making or consummation of the Offer or the
Proposed Merger or any other merger or business combination involving the
Purchaser or any of its affiliates and the Company, restrains or prohibits
or seeks to restrain or prohibit the performance of any of the contracts or
other agreements or arrangements entered into by the Purchaser or any of
its affiliates in connection with the acquisition of the Company or the
Shares, or seeks to obtain any damages in connection with any of the
foregoing, (ii) makes or seeks to make the purchase of or payment for, some
or all of the Shares pursuant to the Offer, the Proposed Merger or
otherwise, illegal, or results in or may result in a delay in the ability
of the Purchaser to accept for payment or pay for some or all of the Shares
or to consummate the Proposed Merger, (iii) imposes or seeks to impose
limitations on the ability of Mr. Osborne, the Purchaser or the Company or
any of their respective affiliates effectively to acquire or hold, or
requiring Mr. Osborne, the Purchaser, the Company or any of their
respective affiliates to dispose of or hold separate, any portion of the
assets or the business of the Purchaser, the Company or any of their
respective affiliates or imposes or seeks to impose limitations on the
ability of Mr. Osborne, the Purchaser, the Company or any of their
respective affiliates to continue to conduct, own or operate all or any
portion of their businesses and assets as heretofore conducted, owned or
operated, (iv) imposes or seeks to impose or results in or may result in
material limitations on the ability of Mr. Osborne, the Purchaser or any of
their affiliates to exercise full rights of ownership of the Shares
purchased by them, including, but not limited to, the right to vote the
Shares purchased by them on all matters properly presented to the
shareholders or the Company or the right to act by written consent in lieu
of a meeting of shareholders of the Company, (v) results in or may result
in a material limitation or diminution in the benefits expected to be
derived by Mr. Osborne and the Purchaser as a result of the transactions
contemplated by the Offer and the Proposed Merger, (vi) imposes or seeks to
impose voting, procedural, price or other requirements in addition to those
under Massachusetts law and federal securities laws (each as in effect on
the date of this Offer to Purchase) in connection with the transactions
contemplated by the Offer and the Proposed Merger or any material condition
to the Offer that is unacceptable to the Purchaser or (vii) otherwise
directly or indirectly relates to the Offer, the Proposed Merger or any
other business combination with the Company or which otherwise, in the sole
judgment of the Purchaser, might adversely affect the Company, Mr. Osborne,
the Purchaser or any of their respective affiliates or the value of the
Shares; or
21
<PAGE> 22
(b) any statute, rule, regulation, judgment, decree, order or
injunction shall have been proposed, sought, promulgated, enacted, entered,
enforced or deemed applicable to the Offer or the Proposed Merger or other
business combination between Mr. Osborne, the Purchaser or any of their
respective affiliates and the Company, or any other action shall have been
taken, by any domestic, foreign or supranational government or any
governmental, administrative or regulatory authority or agency or by any
court or tribunal, domestic, foreign or supranational, that might, directly
or indirectly, result in any of the consequences referred to in clauses (i)
through (vii) of paragraph (a) above; or
(c) any change (or any condition, event or development involving a
prospective change) shall have occurred or be threatened in the business,
properties, assets, liabilities, capitalization, shareholders' equity,
condition (financial or otherwise), operations, licenses, franchises,
results of operations or prospects of the Company, or in general political,
market, economic or financial conditions in the United States or abroad,
that, in the sole judgment of the Purchaser, is or may be materially
adverse to the Company or its shareholders, or Mr. Osborne or the Purchaser
shall have become aware of any facts which are or may be materially adverse
with respect to the value of the Company or the value of the Shares to Mr.
Osborne or the Purchaser or any of their respective affiliates; or
(d) there shall have occurred (i) any general suspension of trading
in, or limitation on prices for, securities on any national securities
exchange or in the over-the-counter securities market in the United States
or quotations for shares traded thereon, (ii) the declaration of any
banking moratorium or any suspension of payments in respect of banks in the
United States, (iii) any material adverse change (or any existing or
threatened condition, event or development involving a prospective material
adverse change) in United States or any other currency exchange rates or a
suspension of, or a limitation on, the markets therefor, (iv) the
commencement of a war, armed hostilities or other international or national
calamity directly or indirectly involving the United States, (v) any
limitations (whether or not mandatory) imposed by any governmental
authority on, or any events which might have material adverse significance
with respect to, the nature or extension of credit or further extension of
credit by banks or other lending institutions, (vi) any significant adverse
change in the market price of the Shares or in securities or financial
markets in the United States or abroad, including, without limitation, a
decline of at least 15% in either the Dow Jones Average of Industrial Stock
or the Standard & Poor's 500 Index from that existing at the close of
business on May 16, 1995, or (vii) in the case of any of the foregoing, a
material acceleration or worsening thereof; or
(e) the Company shall have (i) issued, distributed, pledged or sold,
authorized, proposed or announced the issuance, distribution, pledge or
sale of (A) any shares of capital stock of any class (including, without
limitation, the Shares), or securities convertible into or exchangeable for
any such shares, or any rights, warrants, or options to acquire any such
shares or convertible or exchangeable securities or (B) any other
securities or rights in respect of, in lieu of, or in substitution for,
capital stock of the Company, (ii) purchased or otherwise acquired or
caused a reduction in, or proposed or offered to purchase or otherwise
acquire, any Shares or other securities of the Company, (iii) declared or
paid, or proposed to be declared or paid, any dividend or distribution on
any shares of capital stock, or issued, or authorized, recommended or
proposed the issuance of, any other distribution in respect of any shares
of capital stock, whether payable in cash, securities or other property, or
altered or proposed to alter any material term of any outstanding security,
(iv) issued, distributed or sold, or authorized, announced or proposed the
issuance, distribution or sale of, any debt securities or any securities
convertible into or exchangeable for debt securities or any rights,
warrants or options entitling the holder thereof to purchase or otherwise
acquire any debt securities, or incurred, or authorized or proposed the
incurrence of, any debt other than in the ordinary course of business and
consistent with past practice, or any debt containing burdensome covenants,
(v) entered into any agreement for, or authorized, recommended, proposed,
effected or publicly announced its intention to authorize, recommend,
propose, enter into or cause (A) any merger (including but not limited to
the Proposed Merger), consolidation, liquidation, dissolution, business
combination, joint venture, acquisition of assets or securities or
disposition of assets or securities other than in the ordinary course of
business, (B) any material change in its capitalization, (C) any release or
relinquishment of any material contract rights or (D) any comparable event
not in the
22
<PAGE> 23
ordinary course of business, (vi) entered into any agreement for, or
authorized, recommended, proposed, effected or announced its intention to
authorize, recommend, propose, enter into or cause, any transaction or
arrangement which could adversely affect the value of the Shares, (vii)
proposed, adopted or authorized or announced its intention to propose,
adopt or authorize any amendment to the Company's Declaration of Trust or
similar organization documents or (viii) agree in writing or otherwise to
take any of the foregoing actions; or
(f) a tender or exchange offer for some portion or all of any
outstanding securities of the Company (including the Shares) shall have
been publicly proposed to be made or shall have been made by another person
(including the Company), or it shall have been publicly disclosed or the
Purchaser shall have learned that (i) any person (including the Company or
any of its affiliates, entity or "group" (as defined in Section 13(d)(3) of
the Exchange Act) shall have acquired or proposed to acquire more than 5%
of any class or series of capital stock of the Company (including the
Shares) or shall have been granted any option or right to acquire more than
5% of any class or series of capital stock of the Company (including the
Shares) other than acquisitions of Shares for bona fide arbitrage
positions, or (ii) any such person, entity or group which has publicly
disclosed any such ownership of or right to acquire more than 5% of any
class or series of capital stock of the Company (including the Shares)
prior to May 10, 1995, shall have acquired or proposed to acquire
additional shares of any class or series of capital stock of the Company
(including the Shares) constituting more than 1% of such class or series or
shall have been granted any option or right to acquire more than 1% of such
class or series of capital stock of the Company (including the Shares),
(iii) any group shall have been formed which beneficially owns more than 5%
of any class or series of capital stock of the Company (including the
Shares), (iv) any person, entity 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 for the Shares or a merger,
consolidation or other business combination with or involving the Company
or (v) any person, entity or group shall have a Premerger Notification and
Report Form under the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended (the "HSR Act"), in order to, or made a public announcement
reflecting an intent to, acquire the Company or assets or securities of the
Company; or
(g) (i) the Company and the Purchaser and/or Mr. Osborne shall have
reached an agreement or understanding that the Offer be terminated or
amended or the purchase or payment for Shares be postponed pursuant thereto
or (ii) Mr. Osborne, the Purchaser or any of their respective affiliates
shall have entered into a definitive agreement or announced an agreement in
principle with respect to the Proposed Merger or any other business
combination with the Company or the purchase of any material portion of the
securities or assets of the Company; or
(h) the Company shall have entered into any employment, severance or
similar agreement, arrangement or plan with or for the benefit of any of
its employees or entered into or amended any agreements, arrangements or
plans so as to provide for increased or accelerated compensation or payment
or funding of the benefits to any such employees as a result of or in
connection with the transactions contemplated by the Offer or the Proposed
Merger or any other business combination involving the Company or otherwise
amended any such agreement, arrangement or plan to make the same more
favorable to any such employee; or
(i) the Purchaser shall become aware (i) that any material contractual
right of the Company shall be impaired or otherwise adversely affected or
that any material amount of indebtedness of the Company shall become
accelerated or otherwise become due or become subject to acceleration prior
to its stated due date, in any case with or without notice or the lapse of
time or both as a result of or in connection with the transactions
contemplated by the Offer or the Proposed Merger or any other business
combination involving the Company, (ii) of any covenant, term or condition
in any of the Company's instruments or agreements that has or may have
(whether considered alone or in the aggregate with other covenants, terms
or conditions), a material adverse effect on (A) the business, properties,
assets, liabilities, capitalization, shareholders' equity, condition
(financial or otherwise), operations, licenses, franchises, results of
operations or prospects of the Company (including, but not limited to, any
event of default that may result from the consummation of the Offer or the
Proposed Merger or any other business
23
<PAGE> 24
combination involving the Company) or (B) the value of the Shares in the
hands of Mr. Osborne, the Purchaser or any of their respective affiliates
or (C) the consummation by Mr. Osborne, the Purchaser or any of their
respective affiliates of the Proposed Merger or any other business
combination involving the Company or (iii) that any report, document,
instrument, financial statement or schedule of the Company filed with the
Commission contained, when filed, an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary
in order to make the statements made therein, in light of the circumstances
under which they were made, not misleading; or
(j) except as may be required by law, the Company shall have taken any
action to terminate or amend any employee benefit plan (as defined in
Section 3(2) of the Employee Retirement Income Security Act of 1974, as
amended) of the Company.
The foregoing conditions are for the sole benefit of the Purchaser and its
affiliates and may be asserted by the Purchaser regardless of the circumstances
(including, without limitation, any action or inaction by the Purchaser or any
of its affiliates) giving rise to any such condition as may be waived by the
Purchaser, in whole or in part, from time to time in its sole discretion. The
failure by the Purchaser at any time to exercise any of the foregoing rights
shall not be deemed a waiver of any such rights and each such right shall be
deemed an ongoing right and may be asserted at any time and from time to time.
Any determination by the Purchaser concerning any of the events described in
this Section 14 shall be final and binding.
A public announcement may be made of a material change in, or waiver of,
such conditions and the Offer may, in certain circumstances, be extended in
connection with any such change or waiver.
The Purchaser acknowledges that the Commission believes that (1) if the
Purchaser is delayed in accepting the Shares it must either extend the Offer or
terminate the Offer and promptly return the Shares and (2) the circumstances in
which a delay in payment is permitted are limited and do not include unsatisfied
conditions of the Offer, except with respect to any approval required under the
HSR Act and most other regulatory approvals.
15. CERTAIN LEGAL MATTERS; REQUIRED REGULATORY APPROVALS.
Except as set forth in this Offer to Purchase, based on its review of
publicly available filings by the Company with the Commission and other publicly
available information regarding the Company, neither Mr. Osborne nor the
Purchaser is aware of any licenses or regulatory permits that appear to be
material to the business of the Company and that might be adversely affected by
the Purchaser's acquisition of Shares as contemplated herein, or any filings,
approvals or other actions by or with any domestic, foreign or supranational
governmental authority or administrative or regulatory agency that would be
required for the acquisition or ownership of the Shares by the Purchaser
pursuant to the Offer as contemplated herein. Should any such approval or other
action be required, it is presently contemplated that such approval or action
would be sought except as described below under "State Takeover Laws." Should
any such approval or other action be required, there can be no assurance that
any such approval or action, if needed, would be obtained without substantial
conditions or that adverse consequences might not result to the businesses of
the Company, the Purchaser or Mr. Osborne, or that certain parts of the
businesses of the Company, the Purchaser or Mr. Osborne might not have to be
disposed of or held separate or other substantial conditions complied with in
order to obtain such approval or action or in the event that such approvals were
not obtained or such actions were not taken. The Purchaser's obligation to
purchase and pay for Shares is subject to certain conditions, including
conditions with respect to litigation and governmental actions. See the
Introduction and Section 14 for a description thereof.
State Takeover Laws. A number of states (including Massachusetts, where
the Company is organized, and New Jersey, where the Company has its principal
executive offices) have adopted takeover laws and regulations which purport, to
varying degrees, to be applicable to attempt to acquire securities of
corporations which are incorporated in such states or which have substantial
assets, shareholders, principal executive offices or principal places of
business therein. To the extent that certain provisions of certain of these
state takeover statutes purport to apply to the Offer, the Purchaser believes
that such laws conflict with federal law and constitute an unconstitutional
burden on interstate commerce.
24
<PAGE> 25
In 1982, the Supreme Court of the United States, in Edgar v. Mite Corp.,
invalidated on constitutional grounds the Illinois Business Takeovers Act, which
as a matter of state securities law made takeovers of corporations meeting
certain requirements more difficult, and the reasoning in such decision is
likely to apply to certain other state takeover statutes. However, in 1987, in
CTS Corp. v. Dynamics Corp. of America, the Supreme Court of the United States
held that the State of Indiana could, as a matter of corporate law and in
particular those aspects of corporate law concerning corporate governance,
constitutionally disqualify a potential acquiror from voting on the affairs of a
target corporation without the prior approval of the remaining stockholders,
provided that such laws were applicable only under certain conditions.
Subsequently, in TLX Acquisition Corp. v. Telex Corp., a federal district court
in Oklahoma ruled that the Oklahoma statutes were unconstitutional insofar as
they applied to corporations incorporated outside Oklahoma in that they would
subject such corporations to inconsistent regulations. Similarly, in Tyson
Foods, Inc. v. McReynolds, a federal district court in Tennessee ruled that four
Tennessee takeover statutes were unconstitutional as applied to corporations
incorporated outside Tennessee. This decision was affirmed by the United States
Court of Appeals for the Sixth Circuit. In December 1988, a federal district
court in Florida held in Grand Metropolitan PLC v. Butterworth that the
provisions of the Florida Affiliated Transactions Act and the Florida Control
Share Acquisition Act were unconstitutional as applied to corporations
incorporated outside of Florida.
The Purchaser has not attempted to comply with any state takeover statutes
in connection with the Offer. The 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 it is asserted that one or
more takeover statutes apply to the Offer, and it is not determined by an
appropriate court that such statute or statutes do not apply or are invalid as
applied to the Offer, as applicable, the Purchaser may be required to file
certain documents with, or receive approvals from, the relevant state
authorities, and the Purchaser might be unable to accept for payment or purchase
Shares tendered pursuant to the Offer or be delayed in continuing or
consummating the Offer. In such case, the Purchaser may not be obligated to
accept for purchase, or pay for, any Shares tendered. See Section 14.
Antitrust. Under the HSR Act, and the rules and regulations that have been
promulgated thereunder by the Federal Trade Commission (the "FTC"), certain
acquisition transactions may not be consummated until certain information and
documentary material has been furnished for review by the Antitrust Division of
the Department of Justice and the FTC and certain waiting period requirements
have been satisfied. The acquisition of Shares pursuant to the Offer and the
Proposed Merger is not subject to such requirements.
16. CERTAIN FEES AND EXPENSES.
Kemper Securities, Inc. ("Kemper") is acting as Dealer Manager in
connection with the Offer and as financial advisor to Mr. Osborne and his
affiliates, including the Purchaser, in connection with the proposed acquisition
of the Company. An affiliate of Mr. Osborne paid Kemper an initial fee of
$100,000 upon signing an engagement letter and has agreed to pay Kemper (1) an
additional fee, payable monthly in the amount of $25,000, effective April 1,
1995 and continuing until the later of the consummation of certain business
combination transactions involving the Company, including the Proposed Merger,
or the termination of the engagement letter, provided that such monthly fee
shall be paid for a minimum of six months, and (2) an additional fee equal to
1.5% of the greater of (a) the market value of all outstanding securities of the
Company plus the total outstanding debt of the Company as of the closing of
certain business combination transactions involving the Company, including the
Proposed Merger, or (b) the market value, immediately subsequent to such
closing, of the new entity formed to consummate certain business combination
transactions involving the Company, including the Proposed Merger, plus the
total outstanding debt of the Company and such new entity; provided that the
additional fee described in the foregoing clause (2) will not be less than
$500,000. If such a business combination transaction involving the Company,
including the Proposed Merger, is not consummated, but, during the term of the
engagement letter or within two years after its termination, the Purchaser, Mr.
Osborne or an affiliate of Mr. Osborne receives a "break-up fee" or any other
payment as a result of the termination of efforts to effect such a business
combination, the entity receiving such fee shall pay Kemper 25% of such fee or
other payment. In addition, the Purchaser and another affiliate of Mr. Osborne
25
<PAGE> 26
have agreed, jointly and severally, to reimburse Kemper for its reasonable
expenses, including reasonable fees and disbursements of its counsel, incurred
in rendering its services under the engagement letter and have agreed, jointly
and severally, to indemnify Kemper against certain liabilities and expenses in
connection with the Offer and certain business combination transactions
involving the Company, including the Proposed Merger, including certain
liabilities under the federal securities laws. Kemper from time to time may
render various investment banking services to Mr. Osborne and his affiliates for
which it is paid customary fees.
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, telex, telegraph 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 certain liabilities under the
federal securities laws.
In addition, IBJ Schroder Bank & Trust Company 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 certain liabilities under the federal securities
laws.
Except as set forth above, the Purchaser will not pay any fees or
commissions to any broker, dealer or other person (other than the Information
Agent and the Dealer Manager) for soliciting tenders of Shares pursuant to the
Offer. 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
customers.
17. MISCELLANEOUS.
The Offer is not being made to (nor will tenders be accepted from or on
behalf of) holders of Shares residing 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. However, the Purchaser
may, in its discretion, take such action as it may deem necessary to make the
Offer in any jurisdiction and extend the Offer to holders of Shares in such
jurisdiction.
In any jurisdiction where the securities, blue sky or other laws require
the Offer to be made by a licensed broker or dealer, the Offer will be deemed to
be made on behalf of the Purchaser by the Dealer Manager or one or more
registered brokers or dealers that are licensed under the laws of such
jurisdiction.
Mr. Osborne and the Purchaser have filed with the Commission a Schedule
14D-1, together with exhibits, pursuant to Rule 14d-3 of the General Rules and
Regulations under the Exchange Act, 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 examined and copies may
be obtained from the office of the Commission in the same manner as described in
Section 8 with respect to information concerning the Company, except that they
will not be available at the regional offices of the Commission.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION ON BEHALF OF MR. OSBORNE OR THE PURCHASER NOT CONTAINED IN THIS
OFFER TO PURCHASE OR IN THE LETTER OF TRANSMITTAL AND, IF GIVEN OR MADE, ANY
SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED. NEITHER THE DELIVERY OF THE OFFER TO PURCHASE NOR ANY PURCHASE
PURSUANT TO THE OFFER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION
THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF MR. OSBORNE, THE PURCHASER OR
THE COMPANY SINCE THE DATE AS OF WHICH INFORMATION IS FURNISHED OR THE DATE OF
THIS OFFER TO PURCHASE.
May 17, 1995 BLACK BEAR REALTY, LTD.
26
<PAGE> 27
<TABLE>
SCHEDULE I
During the past 60 days, Richard M. Osborne, the sole managing member of
the Purchaser, has purchased Shares in open market transactions as set forth
below:
<CAPTION>
APPROXIMATE
DATE NUMBER OF SHARES PER SHARE PRICE
- --------------- ---------------- ---------------
<S> <C> <C>
March 17, 1995 21,600 $0.31
March 20, 1995 4,000 0.31
March 23, 1995 4,000 0.31
March 27, 1995 5,000 0.31
March 28, 1995 10,000 0.31
March 29, 1995 2,000 0.31
March 30, 1995 21,700 0.31
April 10, 1995 16,800 0.31
April 11, 1995 4,500 0.31
April 12, 1995 4,000 0.31
April 13, 1995 5,000 0.31
April 17, 1995 10,300 0.31
April 18, 1995 2,700 0.31
April 19, 1995 10,000 0.31
April 21, 1995 32,300 0.34
April 24, 1995 32,500 0.38
April 25, 1995 19,500 0.34
April 26, 1995 4,000 0.31
</TABLE>
In addition to the Shares owned by Mr. Osborne, the Turkey Vulture Fund
XIII, Ltd. (the "Fund") owns 1,873,300 Income Shares, representing approximately
16.8% of the number of Income Shares outstanding. Of the 1,873,300 Income
Shares, 1,297,200 Income Shares owned by the Fund are subject to a margin
agreement with Smith Barney, Inc. ("Smith Barney"). Mr. Osborne has irrevocably
guaranteed the prompt and complete payment and performance, when due, of all
obligations and liabilities of the Fund in connection with all transactions and
positions now or hereafter existing in the Smith Barney account.
Except as set forth in this Schedule I and the Offer to Purchase, none of
the Purchaser, Mr. Osborne, nor, to the best knowledge of the Purchaser and Mr.
Osborne, any "associate" of the Purchaser or Mr. Osborne beneficially owns or
has a right to acquire, directly or indirectly, any Shares, and none of the
Purchaser, Mr. Osborne, the Fund nor, to the best knowledge of the Purchaser and
Mr. Osborne, any "associate" of the Purchaser or Mr. Osborne has effected any
transactions in the Shares during the past 60 days. Except as set forth in this
Schedule I and the Offer to Purchase, neither the Purchaser nor Mr. Osborne has
any contract, arrangement, understanding or relationship with any person with
respect to any securities of the Company.
<PAGE> 28
Facsimile copies of the Letter of Transmittal will be accepted. The Letter
of Transmittal, Share certificates and any other required documents should be
sent or delivered to the Depositary at one of the addresses set forth below:
The Depositary for the Offer is:
<TABLE>
<CAPTION>
IBJ SCHRODER BANK & TRUST COMPANY
By Mail: By Facsimile Transmission: By Hand or Overnight Delivery:
(for Eligible Institutions only)
<S> <C> <C>
P.O. Box 84 (212)858-2611 One State Street
Bowling Green Station New York, New York 10004
New York, New York 10274-0084 Confirmation of Facsimile Attn: Securities Processing Window,
Attn: Reorganization Operations Transmissions Only: Subcellar One
Department
(212)858-2103
</TABLE>
Questions and requests for assistance or additional copies of this Offer to
Purchase and the Letter of Transmittal may be directed to the Information Agent
or the Dealer Manager at their respective addresses and telephone numbers set
forth below. 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
New York, New York 10004
(800) 755-8713
(Toll Free)
The Dealer Manager for the Offer is:
KEMPER SECURITIES, INC.
77 West Wacker Drive, #3100
Chicago, Illinois 60601-1994
(800) 346-6616
(Toll Free)
<PAGE> 1
<TABLE>
LETTER OF TRANSMITTAL
TO TENDER CAPITAL SHARES OF BENEFICIAL INTEREST
OF
PRUDENTIAL REALTY TRUST
PURSUANT TO THE OFFER TO PURCHASE DATED MAY 17, 1995
BY
BLACK BEAR REALTY, LTD.
----------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON JUNE 14, 1995, UNLESS THE OFFER IS EXTENDED.
----------------------------------------------------------------------------
The Depositary for the Offer is:
<CAPTION>
IBJ SCHRODER BANK & TRUST COMPANY
By Mail: By Facsimile Transmission: By Hand or Overnight Delivery:
(for Eligible Institutions only)
<S> <C> <C>
P.O. Box 84 (212) 858-2611 One State Street
Bowling Green Station New York, New York 10004
New York, New York 10274-0084 Confirmation of Facsimile Attn: Securities Processing Window,
Attn: Reorganization Operations Transmissions Only: Subcellar One
Department
(212) 858-2103
</TABLE>
DELIVERY OF THIS LETTER OF TRANSMITTAL OR ANY OTHER REQUIRED DOCUMENTS TO
AN ADDRESS OTHER THAN THE ONE SET FORTH ABOVE, OR TRANSMISSION OF INSTRUCTIONS
VIA FACSIMILE OTHER THAN AS SET FORTH ABOVE, WILL NOT CONSTITUTE A VALID
DELIVERY.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED. IF YOU HAVE ANY
QUESTIONS OR NEED ASSISTANCE IN COMPLETING THIS LETTER OF TRANSMITTAL, PLEASE
CALL OUR INFORMATION AGENT, BEACON HILL PARTNERS, TOLL FREE AT (800) 755-8713 OR
COLLECT AT (212) 843-8500.
This Letter of Transmittal is to be completed by shareholders either if
certificates for Shares (as defined below) are to be forwarded herewith or,
unless an Agent's Message (as defined in Section 2 of the Offer to Purchase) is
utilized, if tenders of Shares are to be made by book-entry transfer into the
account of IBJ Schroder Bank & Trust Company, as Depositary (the "Depositary"),
at The Depository Trust Company, Midwest Securities Trust Company or
Philadelphia Depository Trust Company (each a "Book-Entry Transfer Facility" and
collectively the "Book-Entry Transfer Facilities") pursuant to the procedures
set forth in Section 3 of the Offer to Purchase (as defined below). Shareholders
who tender Shares by book-entry transfer are referred herein as "Book-Transfer
Shareholders."
If a shareholder desires to tender Shares pursuant to the Offer and such
shareholder's Share certificates ("Share Certificates") are not immediately
available or time will not permit all required documents to reach the Depositary
on or prior to the Expiration Date (as defined in Section 1 of the Offer to
Purchase), or the procedures for book-entry transfer cannot be completed on a
timely basis, such Shares may nevertheless be tendered if all of the guaranteed
delivery procedures set forth in Section 3 of the Offer to Purchase are duly
complied with. See Instruction 2 below. Delivery of documents to a Book-Entry
Transfer Facility does not constitute delivery to the Depositary.
<PAGE> 2
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF SHARES TENDERED
- ------------------------------------------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S)
(PLEASE FILL IN, IF BLANK, EXACTLY AS NAME(S) SHARE CERTIFICATE(S) AND SHARE(S) TENDERED
APPEAR(S) ON SHARE CERTIFICATE(S)) (ATTACH ADDITIONAL SIGNED LIST IF NECESSARY)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
| | TOTAL NUMBER OF |
| | SHARES |
| SHARE CERTIFICATE | REPRESENTED BY | NUMBER OF SHARES
| NUMBER(S)* | CERTIFICATE(S)** | TENDERED**
|--------------------|-------------------|----------------
| | |
|--------------------|-------------------|----------------
| | |
|--------------------|-------------------|----------------
| | |
|--------------------|-------------------|----------------
| | |
|--------------------|-------------------|----------------
| TOTAL SHARES....................... |
| |
| |
============================================================================================================================
<FN>
* Need not be completed by Book-Entry Shareholders.
** Unless otherwise indicated, all Shares represented by certificates
delivered to the Depositary will be deemed to have been tendered. See
Instruction 4 below.
</TABLE>
- --------------------------------------------------------------------------------
/ / CHECK HERE IF SHARES ARE BEING TENDERED BY BOOK-ENTRY TRANSFER MADE TO AN
ACCOUNT MAINTAINED BY THE DEPOSITARY WITH A BOOK-ENTRY TRANSFER FACILITY AND
COMPLETE THE FOLLOWING (ONLY PARTICIPANTS IN A BOOK-ENTRY TRANSFER FACILITY
MAY DELIVER SHARES BY BOOK-ENTRY TRANSFER):
Name of Tendering Institution_______________________________________________
Check box of Book-Entry Transfer Facility (check one):
/ / The Depository Trust Company / / Midwest Securities Trust Company
/ / Philadelphia Depository Trust Company
Account Number________________ Transaction Code Number_____________________
/ / CHECK HERE IF SHARES ARE BEING TENDERED PURSUANT TO A NOTICE OF GUARANTEED
DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING:
Name(s) of Registered Owner(s):_____________________________________________
Window Ticket Number (if any):______________________________________________
Date of Execution of Notice of Guaranteed Delivery:_________________________
Name of Institution that Guaranteed Delivery:_______________________________
If delivered by a Book-Entry Transfer Facility, check box of Book-Entry
Transfer Facility (check one):
/ / The Depository Trust Company / / Midwest Securities Trust Company
/ / Philadelphia Depository Trust Company
Account Number________________ Transaction Code Number_____________________
<PAGE> 3
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
The undersigned hereby tenders to Black Bear Realty, Ltd., an Ohio limited
liability company (the "Purchaser"), the number of the undersigned's capital
shares of beneficial interest, $0.01 par value (the "Shares"), specified below
in Prudential Realty Trust, a Massachusetts business trust (the "Company"), at a
price of $0.30 per 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 May 17, 1995, and in this Letter of Transmittal (which, together with any
supplements or amendments, collectively constitute the "Offer"), receipt of
which is hereby acknowledged. 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, but any such transfer or assignment will not relieve the Purchaser of its
obligations under the Offer or prejudice the rights of tendering shareholders to
receive payment for Shares validly tendered and accepted for payment pursuant to
the Offer.
Subject to, and effective upon, acceptance for payment of and payment for
the Shares tendered hereby in accordance with the terms of the Offer, the
undersigned hereby sells, assigns and transfers to, or upon the order of, the
Purchaser all right, title and interest in and to all of the Shares tendered
hereby and any dividend on the Shares or any distribution (including, without
limitation, the issuance of additional Shares pursuant to a stock dividend or
stock split, the issuance of other securities or the issuance of rights for the
purchase of any securities) with respect to the tendered Shares that is payable
or distributable to shareholders of record on a date prior to the transfer into
the name of the Purchaser or its nominees or transferees on the Company's stock
transfer records of the tendered Shares (collectively, a "Distribution"), and
appoints the Depositary the true and lawful agent and attorney-in-fact of the
undersigned with respect to such Shares (and any Distribution) with full power
of substitution (such power of attorney being deemed to be an irrevocable power
coupled with an interest) to (a) deliver the Share Certificates (and any
Distribution) or transfer ownership of such Shares (and any Distribution) on the
account books maintained by a Book-Entry Transfer Facility, together in either
case with appropriate evidences of transfer, to the Depositary for the account
of the Purchaser, (b) present such Shares (and any Distribution) for transfer on
the books of the Company and (c) receive all benefits and otherwise exercise all
rights of beneficial ownership of such Shares (and any Distribution), all in
accordance with the terms and subject to the conditions of the Offer.
The undersigned irrevocably appoints the Purchaser, its managing member and
any designees of the Purchaser, and each of them, as the attorneys-in-fact and
proxies of the undersigned, 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 with respect to any
and all other Shares and other securities or rights issued or issuable in
respect of such Shares on or after the date of the Offer to Purchase. Such power
of attorney and proxy shall be considered irrevocable and coupled with an
interest in the tendered Shares. Such appointment shall be effective upon the
acceptance for payment of such Shares by the Purchaser in accordance with the
terms of the Offer. Upon such acceptance for payment, all other powers of
attorney and proxies given by the undersigned with respect to such Shares and
such other securities or rights prior to such payment will be revoked, without
further action, and no subsequent powers of attorney or proxies may be given by
the undersigned (and if given will not be effective). The Purchaser, its
managing member and any designees of the Purchaser will, with respect to the
Shares and such other securities or rights for which such 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 Company's shareholders, or any adjournment or
postponement thereof, or by consent in lieu of any such meeting or otherwise. In
order for Shares to be deemed validly tendered, immediately upon the acceptance
for payment of such Shares, the Purchaser or its designee must be able to
exercise full voting rights with respect to such Shares and other securities,
including voting at any meeting of shareholders.
The undersigned hereby represents and warrants that (a) the undersigned
owns the Shares tendered hereby (and any Distribution) and has full power and
authority to tender, sell, assign and transfer the Shares
<PAGE> 4
tendered hereby (and any Distribution) and (b) when the same are accepted for
payment by the Purchaser, the Purchaser will acquire good, marketable and
unencumbered title thereto (and to any Distribution), free and clear of all
liens, restrictions, charges, encumbrances, conditional sales agreements or
other obligations relating to the sale or transfer thereof, and such Shares (and
any Distribution) will not be subject to any adverse claim. The undersigned
will, upon request, execute and deliver any additional documents deemed by the
Depositary or the Purchaser to be necessary or desirable to complete the sale,
assignment and transfer of the Shares tendered hereby (and any Distribution). In
addition, the undersigned shall promptly remit and transfer to the Depositary
for the account of the Purchaser any and all Distributions in respect of the
Shares tendered hereby, accompanied by appropriate documentation of transfer;
and pending such remittance and subject to applicable law, the Purchaser will be
entitled to all rights and privileges as owner of any such Distribution and may
withhold the entire purchase price or deduct from the purchase price the amount
of value thereof, as determined by the Purchaser in its sole discretion.
Tenders of Shares pursuant to the Offer are irrevocable, except that Shares
tendered pursuant to the Offer may be withdrawn at any time on or prior to the
Expiration Date and, unless theretofore accepted for payment by the Purchaser as
provided in the Offer, may also be withdrawn at any time after July 17, 1995 (or
such later date as may apply in case the Offer is extended). See Section 4 of
the Offer to Purchase.
The undersigned understands that a tender of Shares pursuant to the
procedures described in Section 3 of the Offer to Purchase and in the
Instructions hereto will constitute a binding agreement between the undersigned
and the Purchaser upon the terms and subject to the conditions of the Offer. All
authority herein conferred or agreed to be conferred shall survive the death or
incapacity of the undersigned, and any obligation of the undersigned hereunder
shall be binding upon the heirs, personal representatives, successors and
assigns of the undersigned.
<PAGE> 5
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if certificate(s) for Shares not tendered or accepted for
payment and/or the check for the purchase price of the Shares accepted for
payment are to be issued in the name of someone other than the undersigned.
Issue: / / check / / certificates to:
Name: ..........................................................................
(Please Print)
Address: .......................................................................
................................................................................
(Include Zip Code)
...............................................................................
(Tax Id. or Social Security No.)
(See Substitute Form W-9 below.)
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if certificate(s) for Shares not tendered or not accepted
for payment and/or the check for the purchase price of the Shares accepted for
payment are to be sent to someone other than the undersigned or to the
undersigned at an address other than that shown above.
Mail: / / check / / certificates to:
Name: ..........................................................................
(Please Print)
Address: .......................................................................
................................................................................
(Include Zip Code)
...............................................................................
(Tax Id. or Social Security No.)
(See Substitute Form W-9 below.)
SIGN SIGN
HERE HERE
SIGN HERE
AND COMPLETE SUBSTITUTE FORM W-9 BELOW
X...............................................................................
X...............................................................................
(Signature of Holder(s))
Dated: .................................................................. , 1995
(Must be signed by the registered holder(s) exactly as name(s) appear(s) on the
Share Certificate(s) or on a security position listing or by person(s)
authorized to become registered holder(s) by certificates and documents
transmitted herewith. If signature is by trustees, executors, administrators,
guardians, attorneys-in-fact, officers of corporations or others acting in a
fiduciary or representative capacity, please provide the following information
and see Instruction 5 below.)
Name(s) ........................................................................
................................................................................
(Please Print)
Capacity (Full Title) ..........................................................
Address ........................................................................
................................................................................
(Include Zip Code)
Area Code and Telephone Number .................................................
Tax Identification or
Social Security Number .........................................................
COMPLETE SUBSTITUTE FORM W-9 BELOW
Guarantee of Signature(s)
(See Instructions 1 and 5 below)
Authorized Signature ...........................................................
Name ...........................................................................
Name of Firm ...................................................................
(Please Print)
Address ........................................................................
(Include Zip Code)
Area Code and Telephone Number .................................................
Dated: ..................................................................., 1995
<PAGE> 6
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. No signature guarantee is required on this
Letter of Transmittal if this Letter of Transmittal is signed by the registered
holder (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) of the Shares tendered herewith and payment is
to be made directly to that holder at that holder's registered address, unless
such holder(s) has completed either the box entitled "Special Payment
Instructions" or the box entitled "Special Delivery Instructions" above.
Similarly, if the Shares are tendered for the account of a firm that is a bank,
broker, dealer, credit union, savings association or other entity which is a
member in good standing of the Securities Transfer Agents Medallion Program
(each an "Eligible Institution"), no signature guarantee is required on this
Letter of Transmittal. However, in all other cases, including if a check is to
be issued in the name of a person other the signer of this Letter of Transmittal
or if a check is to be sent to someone other than the signer of this Letter of
Transmittal or to an address other than that shown on this Letter of
Transmittal, all signatures on this Letter of Transmittal must be guaranteed by
an Eligible Institution. See Instruction 5 below.
2. DELIVERY OF LETTER OF TRANSMITTAL. This Letter of Transmittal is to be
completed by all shareholders who wish to tender Shares in response to the
Offer. Except as otherwise set forth in this Instruction 2, in order for Shares
to be validly tendered pursuant to the Offer, this Letter of Transmittal (or a
facsimile hereof), properly completed and duly executed, together with any
required signature guarantees, or an Agent's Message in connection with a
book-entry delivery of Shares, and any other documents required by this Letter
of Transmittal must be received by the Depositary at one of its addresses set
forth herein on or prior to the Expiration Date and either (a) Share
Certificates representing tendered Shares must be received by the Depositary, or
such Shares must be tendered pursuant to the procedure for book-entry transfer
set forth in Section 3 of the Offer to Purchase and timely confirmation (a
"Book-Entry Confirmation") of a book-entry transfer of such Shares into the
Depositary's account at a Book-Entry Transfer Facility must be received by the
Depositary, in each case on or prior to the Expiration Date, or (b) the
guaranteed delivery procedures set forth below must be complied with. See
Section 3 of the Offer to Purchase.
Shareholders whose Share Certificates are not immediately available, or who
cannot deliver their Share Certificates and all other required documents to the
Depositary on or prior to the Expiration Date, or who cannot complete the
procedures for book-entry transfer on a timely basis, may nevertheless tender
their Shares if all of the guaranteed delivery procedures set forth in Section 3
of the Offer to Purchase are duly complied with. Pursuant to such procedures:
(a) such tender must be made by or through an Eligible Institution; (b) a
properly completed and duly executed Notice of Guaranteed Delivery,
substantially in the form made available by the Purchaser, must be received by
the Depositary, as provided below, on or prior to the Expiration Date; and (c)
the Share Certificates (or a Book-Entry Confirmation) representing all tendered
Shares, in proper form for transfer together with a properly completed and duly
executed Letter of Transmittal (or facsimile hereof), with any required
signature guarantees (or, in the case of a book-entry transfer of Shares, an
Agent's Message) and any other documents required by this Letter of Transmittal
must be received by the Depositary within five New York Stock Exchange, Inc.
trading days after the date of execution of such Notice of Guaranteed Delivery.
THE METHOD OF DELIVERY OF SHARE CERTIFICATES, THIS LETTER OF TRANSMITTAL
AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY
TRANSFER FACILITY, IS AT THE OPTION AND SOLE RISK OF THE TENDERING SHAREHOLDER
AND 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 (except from a shareholder who is tendering
all of the Shares owned by that shareholder). All tendering shareholders, by
execution of this Letter of Transmittal (or facsimile hereof), waive any right
to receive any notice of the acceptance of their Shares for payment.
<PAGE> 7
3. INADEQUATE SPACE. If the space provided herein is inadequate,
additional information may be provided on a separate signed schedule attached
hereto.
4. PARTIAL TENDERS. (Not Applicable to Book-Entry Shareholders) If fewer
than all of the Shares evidenced by any Share Certificate submitted are to be
tendered, fill in the number of Shares which are to be tendered in the box
entitled "Number of Shares Tendered." In such case, new Share Certificates for
the Shares that were evidenced by your old Share Certificates, but were not
tendered by you, will be sent to you (unless otherwise provided in the
appropriate box on this Letter of Transmittal) as soon as practicable after the
Expiration Date. All Shares represented 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. If this Letter of
Transmittal is signed by the registered holder(s) of the Shares tendered hereby,
the signature(s) must correspond exactly with the name(s) as shown on the face
of the Share Certificates, without alteration, enlargement or any change
whatsoever.
If any of the Shares tendered hereby are held of record by two or more
joint holders, all such holders must sign this Letter of Transmittal.
If any of the tendered Shares are registered in different names on several
certificates, it will be necessary to complete, sign and submit as many separate
Letters of Transmittal (or facsimiles hereof) as there are different
registrations of certificates.
If this Letter of Transmittal is signed by trustees, executors,
administrators, guardians, attorneys-in-fact, agents, officers of corporations
or others acting in a fiduciary or representative capacity, such persons should
so indicate when signing, and proper evidence satisfactory to the Depositary of
their authority so to act must be submitted.
If the Share Certificates are registered in the name of a person other than
the signer of this Letter of Transmittal, or if payment is to be made to, or
Share Certificates for unpurchased Shares are to be issued or returned to, a
person other than the registered holder, then the tendered certificates must be
endorsed or accompanied by appropriate stock powers, signed exactly as the name
or names of the registered holder or holders appear on the certificates, with
the signatures on the certificates or stock powers guaranteed by an Eligible
Institution.
6. STOCK TRANSFER TAXES. Except as otherwise provided in this Instruction
6, the Purchaser will pay any stock transfer taxes with respect to the purchase
of any Shares by the Purchaser pursuant to the Offer. If, however, payment of
the purchase price is to be made to, or Shares not tendered or not purchased are
to be registered in the name of, any person other than the registered holder(s),
or if tendered Share Certificate(s) are registered in the name of any person
other than the person(s) signing this Letter of Transmittal, the amount of any
stock transfer taxes (whether imposed on the registered holder(s), such other
person or otherwise) payable on account of the transfer to such person will be
deducted from the purchase price unless satisfactory evidence of the payment of
such taxes, or exemption therefrom, is submitted. Except as otherwise provided
in this Instruction 6, it will not be necessary for transfer tax stamps to be
affixed to the certificate evidencing the Shares tendered hereby.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If a check is to be issued
in the name(s) of, and/or Share Certificates not tendered or not accepted for
payment are to be issued or returned to, person(s) other than the signer(s) of
this Letter of Transmittal, or if a check and/or such Share Certificates are to
be returned to person(s) other than the signer(s) of this Letter of Transmittal
or to an address other than that shown on this Letter of Transmittal, the
appropriate boxes on this Letter of Transmittal must be completed.
8. WAIVER OF CONDITIONS. The Purchaser expressly reserves the right, in
its sole discretion, to waive any one or more of the conditions to the Offer, in
whole or in part.
<PAGE> 8
9. 31% BACKUP WITHHOLDING; SUBSTITUTE FORM W-9. Under U.S. Federal income
tax law, a shareholder whose tendered Shares are accepted for payment is
required to provide the Depositary with such shareholder's correct taxpayer
identification number ("TIN") on Substitute Form W-9 below. If the Depositary is
not provided with the correct TIN, the Internal Revenue Service may subject the
shareholder or other payee to a $50 penalty. In addition, payments that are made
to such shareholder or other payee with respect to Shares purchased pursuant to
the Offer may be subject to 31% backup withholding.
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, the shareholder must submit a Form W-8, signed under penalties of
perjury, attesting to that individual's exempt status. A Form W-8 can be
obtained from the Depositary. See the enclosed "Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9" for more instructions.
If backup withholding applies, the Depositary is required to withhold 31%
of any such payments made to the shareholder or other payee. Backup withholding
is not an additional tax. Rather, the tax liability of persons subject to backup
withholding will be reduced by the amount of tax withheld. If withholding
results in an overpayment of taxes, a refund may be obtained from the Internal
Revenue Service.
The box in Part 3 of the Substitute Form W-9 may be checked if the
tendering shareholder has not been issued a TIN and has applied for a TIN or
intends to apply for a TIN in the near future. If the box in Part 3 is checked,
the shareholder or other payee must also complete the Certificate of Awaiting
Taxpayer Identification Number below in order to avoid backup withholding.
Notwithstanding that the box in Part 3 is checked and the Certificate of
Awaiting Taxpayer Identification Number is completed, the Depositary will
withhold 31% of all payments made prior to the time a properly certified TIN is
provided to the Depositary.
The shareholder is required to give the Depositary the TIN (i.e., social
security number or employer identification number) of the record owner of the
Shares or of the last transferee appearing on the transfers attached to, or
endorsed on, the Shares. If the Shares are in more than one name or are not in
the name of the actual owner, consult the enclosed "Guidelines for Certification
of Taxpayer Identification Number on Substitute Form W-9" for additional
guidance on which number to report.
10. REQUESTS FOR ASSISTANCE AND ADDITIONAL COPIES. Questions and requests
for assistance or additional copies of the Offer to Purchase and this Letter of
Transmittal may be directed to the Information Agent or the Dealer Manager at
their respective addresses and telephone numbers set forth below. Additional
copies of the Offer to Purchase and this Letter of Transmittal may also be
obtained from brokers, dealers, commercial banks and trust companies.
11. LOST, DESTROYED OR STOLEN SHARE CERTIFICATES. If any Share Certificate
has been lost, destroyed or stolen, the shareholder should promptly notify the
Depositary. The shareholder will then be instructed as to the steps that must be
taken in order to replace the Share Certificate. This Letter of Transmittal and
related documents cannot be processed until the procedures for replacing lost or
destroyed Share Certificates have been followed.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR FACSIMILE COPY HEREOF), TOGETHER
WITH ALL OTHER REQUIRED DOCUMENTS, MUST BE RECEIVED BY THE DEPOSITARY ON OR
PRIOR TO THE EXPIRATION DATE. IF YOU HAVE ANY QUESTIONS OR NEED ASSISTANCE
COMPLETING THIS LETTER OF TRANSMITTAL, PLEASE CALL THE INFORMATION AGENT, BEACON
HILL PARTNERS, TOLL FREE AT (800) 755-8713 OR COLLECT AT (212) 843-8500.
<PAGE> 9
PAYER'S NAME: IBJ SCHRODER BANK & TRUST COMPANY
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
| SUBSTITUTE | PART 1--PLEASE PROVIDE YOUR TIN IN | |
| | THE BOX AT THE RIGHT AND CERTIFY BY SIGNING | ________________________________ |
| FORM W-9 | AND DATING BELOW | Social Security Number |
| | | |
| | | or________________________________ |
| | | Employer Identification Number |
| |----------------------------------------------------------------------------------------------|
| Department of the Treasury, | PART 2--Certification--Under penalties of perjury, I certify that: |
| Internal Revenue Service | |
| | (1) The number shown on this form is my correct taxpayer identification number |
| PAYER'S REQUEST FOR | (or I am waiting for a number to be issued to me) and |
| TAXPAYER IDENTIFICATION | |
| NUMBER (TIN) | (2) I am not subject to backup withholding because: (a) I am exempt from |
| | backup withholding, or (b) I have not been notified by the Internal Revenue |
| | Service (IRS) that I am subject to backup withholding as a result of a failure |
| | to report all interest or dividends, or (c) the IRS has notified me that I am no |
| | longer subject to backup withholding. |
| | |
| | Certification Instructions--You must cross out item (2) above if you have |
| | been notified by the IRS that you are currently subject to backup withholding |
| | because of underreporting 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 such Item (2). |
| |----------------------------------------------------------------------------------------------|
| | | PART 3 -- |
| | | |
| SIGN HERE | Signature_____________________________________ | Awaiting TIN / / |
| | | |
| | Date___________________________________ , 1995 | |
- --------------------------------------------------------------------------------------------------------------------------------
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.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX
IN PART 3 OF SUBSTITUTE FORM W-9:
- -------------------------------------------------------------------------------------
| CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER. |
| |
| I certify under penalties of perjury that a taxpayer identification number has |
| not been issued to me, and either (a) I have mailed or delivered an application |
| to receive a taxpayer identification number to the appropriate Internal Revenue |
| Service Center or Social Security Administration Office, or (b) I intend to mail |
| or deliver an application in the near future. I understand that if I do not |
| provide a taxpayer identification number by the time of payment, 31% of all |
| reportable payments made to me will be withheld. |
| |
| Signature_______________________________ Date________________________, 1995 |
- -------------------------------------------------------------------------------------
</TABLE>
<PAGE> 10
The Information Agent for the Offer is:
BEACON HILL PARTNERS, INC.
90 Broad Street
New York, New York 10004
(800) 755-8713
(Toll Free)
The Dealer Manager for the Offer is:
KEMPER SECURITIES, INC.
77 West Wacker Drive, #3100
Chicago, Illinois 60601-1994
(800) 346-6616
(Toll Free)
<PAGE> 11
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYER.--Social Security numbers have nine digits separated by two hyphens: i.e.,
000-00-0000. Employer identification numbers have nine digits separated by only
one hyphen: i.e., 000-000000. The table below will help determine the number to
give the payer.
<TABLE>
- --------------------------------------------------------- ---------------------------------------------------------
GIVE THE GIVE THE EMPLOYER
FOR THIS TYPE OF ACCOUNT: SOCIAL SECURITY FOR THIS TYPE OF ACCOUNT: IDENTIFICATION
NUMBER OF-- NUMBER OF--
- --------------------------------------------------------- ---------------------------------------------------------
<S> <C> <C> <C>
1. An individual's account The individual 8. Sole proprietorship account The owner(4)
2. Two or more individuals The actual owner of 9. A valid trust, estate, or Legal entity (Do not
(joint account) the account or, if pension trust furnish the
combined funds, any identifying number
one of the of the personal
individuals(1) representative or
3. Husband and wife The actual owner of trustee unless the
(joint account) the account or, if legal entity itself
joint funds, either is not designated in
person(1) the account
4. Custodian account of a minor The minor(2) title.)(5)
(Uniform Gift to Minors Act) 10. Corporate account The corporation
5. Adult and minor The adult or, if the 11. Religious, charitable, or The organization
(joint account) minor is the only educational organization
contributor, the account
minor(1) 12. Partnership account held in The partnership
6. Account in the name of The ward, minor or the name of the business
guardian or committee for a incompetent 13. Association, club or other The organization
designated ward, minor, or person(3) tax-exempt organization
incompetent person 14. A broker or registered The broker or
nominee nominee
7. a. The usual revocable The grantor- 15. Account with the Department The public entity
savings trust account trustee(1) of Agriculture in the name
(grantor is also trustee) of a public entity (such as
b. So-called trust account The actual owner(1) a state or local
that is not a legal or governmental school dis-
valid trust under state law trict or prison) that
receives agricultural
program payments
- --------------------------------------------------------- ---------------------------------------------------------
<FN>
(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
(4) Show the name of the owner.
(5) List first and circle the name of the legal trust, estate or pension trust.
</TABLE>
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> 12
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 Social Security Number Card, or Form
SS-4, Application for Employer Identification Number, at the local office of the
Social Security Administration or the Internal Revenue Service (IRS) and apply
for a number.
PAYEES AND PAYMENTS EXEMPT FROM BACKUP WITHHOLDING
The following lists payees that are exempt from backup withholding and
information reporting. For interest and dividends, all listed payees are exempt
except item (9). For broker transactions, payees listed in (1) through (13), and
a person registered under the Investment Advisers Act of 1940 who regularly acts
as a broker, are exempt. Payments subject to reporting under sections 6041 and
6041A are generally exempt from backup withholding only if made to payees
described in items (1) through (7), except that a corporation that provides
medical and health care services or bills and collects payments for such
services is not exempt from backup withholding or information reporting. Only
payees described in items (2) through (6) are exempt from backup withholding for
barter exchange transactions, patronage dividends, and payments by certain
fishing boat operators.
(1) A corporation.
(2) An organization exempt from tax under section 501(a), or an individual
retirement plan (IRA), or a custodial account under 403(b)(7).
(3) The United States or any agency or instrumentality thereof.
(4) A state, the District of Columbia, a possession of the United States, or
any political subdivision or instrumentality thereof.
(5) A foreign government or a political subdivision, agency or
instrumentality thereof.
(6) An international organization or any agency or instrumentality thereof.
(7) A foreign central bank of issue.
(8) A dealer in securities or commodities required to register in the U.S. or
a possession of the U.S.
(9) A futures commission merchant registered with the Commodity Futures
Trading Commission.
(10) A real estate investment trust.
(11) An entity registered at all times during the tax year under the
Investment Company Act of 1940.
(12) A common trust fund operated by a bank under section 584(a).
(13) A financial institution.
(14) A middleman known in the investment community as a nominee or listed in
the most recent publication of the American Society of Corporate
Secretaries, Inc., Nominee List.
(15) A trust exempt from tax under section 664(c) or described in section
4947(a)(1).
Payments of dividends and patronage dividends not generally subject to backup
withholding include the following:
- Payments to nonresident aliens subject to withholding under section 1441.
- Payments to partnerships not engaged in a trade or business in the U.S. and
which have at least one nonresidential partner.
- Payments of patronage dividends where the amount received is not paid in
money.
- Payments made by certain foreign organizations.
Payments of interest not generally subject to backup withholding include the
following:
- Payments of interests on obligations issued by individuals.
Note: You may be subject to backup withholding if this interest is $600 or
more and is paid in the course of the payer's trade or business and you have
not provided your correct taxpayer identification number to the payer.
- Payments of tax-exempt interest (including exempt interest dividends under
section 852).
- Payments described in section 6049(b)(5) to nonresident aliens.
- Payments on tax-free covenant bonds under section 1451.
- Payments made by certain foreign organizations.
- Mortgage interest paid by you.
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.
Payments are not subject to information reporting and are also not subject to
backup withholding. For details, see sections 6041, 6041A(a), 6042, 6044, 6045,
6049, 6050A and 6050N and the regulations thereunder.
PRIVACY ACT NOTICE.--Section 6109 requires you to furnish your correct taxpayer
identification number (TIN) to persons who must file information returns with
IRS to report interest, dividends, and certain other income paid to you,
mortgage interest you paid, the acquisition or abandonment of secured property,
or contributions you made to an individual retirement arrangement (IRA). IRS
uses the numbers for identification purposes and to help verify the accuracy of
your tax return. You must provide your TIN whether or not you are required to
file a tax return. Payers must generally withhold 31% of taxable interest,
dividend, and certain other payments to a payee who does not furnish a TIN to a
payer. Certain penalties may also apply.
PENALTIES
(1) PENALTIES FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER.--If you
fail to furnish your taxpayer identification number to a requester, you are
subject to a penalty of $50 for each such failure unless your failure is due to
reasonable cause and not to willful neglect.
(2) FAILURE TO REPORT CERTAIN ITEMS ON YOUR TAX RETURN.--If you fail to properly
include on your tax return certain items reported to IRS, such failure will be
treated as being due to negligence and will be subject to a penalty equal to the
sum of 20% on any portion of an underpayment of tax attributable to that failure
unless there is clear and convincing evidence to the contrary.
(3) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING.--If you
make a false statement with no reasonable basis that results in no imposition of
backup withholding, you are subject to a penalty of $500.
(4) CRIMINAL PENALTY FOR FALSIFYING INFORMATION.--Willfully 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> 1
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF CAPITAL SHARES OF BENEFICIAL INTEREST
OF
PRUDENTIAL REALTY TRUST
As set forth in the Offer to Purchase, this Notice of Guaranteed Delivery,
or one substantially in the form hereof, must be used to accept the Offer (as
defined below) if certificates representing capital shares of beneficial
interest, par value $0.01 per share, of Prudential Realty Trust, a Massachusetts
business trust (the "Company"), are not immediately available or the procedures
for book-entry transfer cannot be completed on a timely basis or time will not
permit all required documents to reach IBJ Schroder Bank & Trust Company, as
Depositary (the "Depositary"), prior to the expiration of the Offer. This Notice
of Guaranteed Delivery may be delivered by hand, facsimile transmission or mail
to the Depositary. See Section 3 of the Offer to Purchase.
The Depositary for the Offer is:
<TABLE>
<CAPTION>
IBJ SCHRODER BANK & TRUST COMPANY
By Mail: By Facsimile Transmission: By Hand or Overnight Delivery:
(for Eligible Institutions only)
<S> <C> <C>
P.O. Box 84 (212) 858-2611 One State Street
Bowling Green Station New York, New York 10004
New York, New York 10274-0084 Confirmation of Facsimile Attn: Securities Processing Window,
Attn: Reorganization Operations Transmissions Only: Subcellar One
Department
(212) 858-2103
</TABLE>
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS, OR TRANSMISSION OF INSTRUCTIONS
VIA A FACSIMILE NUMBER, OTHER THAN AS SET FORTH ABOVE, WILL NOT CONSTITUTE A
VALID DELIVERY.
THIS INSTRUMENT 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 APPROPRIATE LETTER
OF TRANSMITTAL.
LADIES AND GENTLEMEN:
The undersigned hereby tenders to Black Bear Realty, Ltd., an Ohio limited
liability company, upon the terms and subject to the conditions set forth in the
Offer to Purchase dated May 17, 1995 (the "Offer to Purchase") and the related
Letter of Transmittal (which, together with any supplements or amendments,
collectively constitute the "Offer"), receipt of which is hereby acknowledged,
capital shares of beneficial interest, $0.01 par value (the "Shares"), of
Prudential Realty Trust, a Massachusetts business trust, pursuant to the
guaranteed delivery procedure set forth in Section 3 of the Offer to Purchase.
<PAGE> 2
<TABLE>
<S> <C>
Name(s) of Record Holder(s)......... Address(es).........................
.................................... ....................................
PLEASE PRINT ZIP CODE
Area Code and Tel. No. .............
.................................... (DAYTIME TELEPHONE NUMBER)
....................................
Certificate No.(s) (If Available)
CHECK ONE BOX IF SHARES WILL BE
.................................... TENDERED BY BOOK-ENTRY TRANSFER
.................................... / / The Depository Trust Company
/ / Midwest Securities Trust Company
/ / Philadelphia Depository Trust Company
Number of Shares to be Tendered:
Account Number .....................
___________________shares*
SIGN HERE
Date:........................ , 1995
- ------------------------------------ Signature(s) X......................
*Unless otherwise indicated, it will
be assumed that all Shares held by X......................
the above record holder(s) are to
be tendered.
</TABLE>
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, an Eligible Institution (as such is defined in Section 3
of the Offer to Purchase), hereby guarantees to deliver to the Depositary the
certificates representing Shares tendered hereby, in proper form for transfer,
or a confirmation of a book-entry transfer into the Depositary's account at one
of the Book-Entry Transfer Facilities (as such term is defined in Section 2 of
the Offer to Purchase), in each case with delivery of a properly completed and
duly executed Letter of Transmittal (or a manually signed facsimile thereof),
and with any other documents required by the Letter of Transmittal (or a
manually signed facsimile thereof), all within five trading days on the New York
Stock Exchange after the date hereof.
.................................... X...................................
NAME OF FIRM AUTHORIZED SIGNATURE
.................................... Name................................
ADDRESS PLEASE TYPE OR PRINT
.................................... Title...............................
ZIP CODE
Area Code and Tel. No............... Date.........................., 1995
NOTE: DO NOT SEND ANY CERTIFICATES FOR SHARES WITH THIS NOTICE OF GUARANTEED
DELIVERY. CERTIFICATES FOR SHARES SHOULD BE SENT ONLY TOGETHER WITH YOUR
LETTER OF TRANSMITTAL.
<PAGE> 1
KEMPER SECURITIES, INC.
77 West Wacker Drive, #3100
Chicago, Illinois 60601-1994
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING CAPITAL SHARES OF BENEFICIAL INTEREST
OF
PRUDENTIAL REALTY TRUST
AT
$0.30 NET PER SHARE
BY
BLACK BEAR REALTY, LTD.
- -------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON JUNE 14, 1995, UNLESS THE OFFER IS EXTENDED.
- -------------------------------------------------------------------------------
May 17, 1995
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
We have been engaged by Black Bear Realty, Ltd., an Ohio limited liability
company (the "Purchaser"), to act as Dealer Manager in connection with the
Purchaser's offer to purchase all outstanding capital shares of beneficial
interest, $0.01 par value (the "Shares"), of Prudential Realty Trust, a
Massachusetts business trust (the "Company"), at $0.30 per Share, net to the
seller in cash, without interest thereon, upon the terms and subject to the
conditions set forth in the Purchaser's Offer to Purchase, dated May 17, 1995
(the "Offer to Purchase"), and the related Letter of Transmittal (which,
together with any supplements or amendments, collectively constitute the
"Offer").
The Offer is conditioned upon, among other things, (1) there being validly
tendered and not withdrawn prior to the Expiration Date (as defined in the Offer
to Purchase) 7,150,000 Shares which, together with the Shares and the income
shares of beneficial interest, par value $0.01 per share, of the Company (the
"Income Shares"), owned by the managing member of the Purchaser and his
affiliates, constitute more than 50% of the combined voting power of the Shares
and Income Shares with respect to the election of Trustees of the Company; (2)
the Company not having entered into or effected any new or amended agreements
with any person or entity having the effect of impairing the ability of the
Purchaser to prevent liquidation of the Company or otherwise diminishing the
expected economic value of the Company; and (3) the Company not having entered
into or effected any new or amended agreements with any person or entity with
respect to the sale, transfer or other disposition of any or all of the
properties currently owned by the Company. See the Introduction and Sections 1,
14 and 15 of the Offer to Purchase.
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, we are enclosing
the following documents:
1. Offer to Purchase, dated May 17, 1995;
2. Letter of Transmittal for your use and for the information of your
clients. Facsimile copies of the Letter of Transmittal may be used to
tender Shares;
3. Notice of Guaranteed Delivery to be used to accept the Offer if the
Share certificates are not immediately available or if such certificates
and all other required documents cannot be delivered to IBJ Schroder Bank &
Trust Company (the "Depositary") by the Expiration Date (as defined in the
Offer to Purchase) or if the procedure for book-entry transfer cannot be
completed by the Expiration Date;
<PAGE> 2
4. A form of letter which may be sent to your clients for whose
accounts you hold Shares registered in your name or in the name of your
nominee, with space provided for obtaining such clients' instructions with
regard to the Offer;
5. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9; and
6. Return envelope addressed to the Depositary.
YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS AS
PROMPTLY AS POSSIBLE.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON JUNE 14, 1995, UNLESS THE OFFER IS EXTENDED.
In all cases, payment for Shares purchased pursuant to the Offer will be
made only after timely receipt by the Depositary of certificates for such Shares
or confirmation of the book-entry transfer of such Shares into the Depositary's
account at one of the Book-Entry Transfer Facilities (as defined in the Offer to
Purchase), a properly completed and duly executed Letter of Transmittal (or
facsimile thereof), with any required signature guarantees, or an Agent's
Message (as defined in the Offer to Purchase) in connection with a book-entry
transfer, and any other required documents, all in accordance with the
instructions set forth in the Offer to Purchase and the Letter of Transmittal.
If holders of Shares wish to tender, but it is impracticable for them to
forward their Share certificates or other required documents on or prior to the
Expiration Date or to comply with the book-entry transfer procedures on a timely
basis, a tender may be effected by following the guaranteed delivery procedure
described in Section 3 of the Offer to Purchase.
The Purchaser will not pay any fees or commissions to any broker or dealer
or other person (other than the Dealer Manager or the Information Agent as
described in the Offer to Purchase) for soliciting tenders of Shares pursuant to
the Offer. The Purchaser will, however, upon request, reimburse you for
reasonable and necessary costs and expenses incurred by you in forwarding
materials to your clients. The Purchaser will pay, or cause to be paid, all
stock transfer taxes applicable to its purchase of Shares pursuant to the Offer,
subject to Instruction 6 of the Letter of Transmittal.
Any inquiries you may have with respect to the Offer should be addressed
to, and additional copies of the enclosed materials may be obtained from, the
Information Agent or the undersigned at the addresses and telephone numbers set
forth on the back cover of the Offer to Purchase.
Very truly yours,
KEMPER SECURITIES, INC.
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
THE AGENT OF THE PURCHASER, THE DEALER MANAGER, THE INFORMATION AGENT OR THE
DEPOSITARY, OR ANY AFFILIATE OF ANY OF THEM, 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 HEREWITH AND THE
STATEMENTS CONTAINED THEREIN.
<PAGE> 1
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING CAPITAL SHARES OF BENEFICIAL INTEREST
OF
PRUDENTIAL REALTY TRUST
AT
$0.30 NET PER SHARE
BY
BLACK BEAR REALTY, LTD.
- ------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON JUNE 14, 1995, UNLESS THE OFFER IS EXTENDED.
- ------------------------------------------------------------------------------
To Our Clients:
Enclosed for your consideration are the Offer to Purchase, dated May 17,
1995 (the "Offer to Purchase"), and the related Letter of Transmittal (which,
together with any supplements or amendments, collectively constitute the
"Offer") in connection with the offer by Black Bear Realty, Ltd., an Ohio
limited liability company (the "Purchaser"), to purchase all outstanding capital
shares of beneficial interest, $0.01 par value per share (the "Shares"), of
Prudential Realty Trust, a Massachusetts business trust (the "Company"), at a
purchase price of $0.30 per share, net to the seller in cash, without interest
thereon, upon the terms and subject to the conditions set forth in the Offer.
We are the holder of record of Shares held 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 Letter of Transmittal is furnished to you for your information
only and cannot be used by you to tender Shares held by us for your account.
We request instructions as to whether you wish us to 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.
Your attention is directed to the following:
1. The tender price is $0.30 per Share, net to you in cash, without
interest thereon, upon the terms and subject to the conditions set forth
in the Offer;
2. The Offer is being made for all the outstanding Shares;
3. The Offer and withdrawal rights will expire at 12:00 Midnight, New York
City time, on June 14, 1995, unless the Offer is extended;
4. The Offer is conditioned upon, among other things, (a) there being
validly tendered and not withdrawn prior to the Expiration Date (as
defined in the Offer to Purchase) 7,150,000 Shares which, together with
the Shares and the income shares of beneficial interest, par value $0.01
per share, of the Company (the "Income Shares"), owned by the managing
member of the Purchaser and his affiliates, constitute more than 50% of
the combined voting power of the Shares and Income Shares with respect
to the election of Trustees of the Company; (b) the Company not having
entered into or effected any new or amended agreements with any person
or entity having the effect of impairing the ability of the Purchaser to
prevent liquidation of the Company or otherwise diminishing the expected
economic value of the Company; and (c) the Company not having entered
into or effected any new or amended agreements with any person or entity
with respect to the sale, transfer or other disposition of any or all of
the properties currently owned by the Company; and
5. Tendering stockholders will not be required to pay brokerage fees or
commissions. Any stock transfer taxes applicable to the sale of Shares
to the Purchaser pursuant to the Offer will be paid by the Purchaser,
except as otherwise provided in Instruction 6 of the Letter of
Transmittal.
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
on the reverse side of this letter. An envelope to return your instructions to
us is enclosed. If you authorize the tender of your Shares, all such Shares will
be tendered unless otherwise specified in the instruction form. 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.
The Offer is made solely by the Offer to Purchase and the related Letter of
Transmittal. The Offer is not being made to (nor will tenders be accepted from
or on behalf of) holders of Shares residing 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. However, the
Purchaser may, in its discretion, take such action as it may deem necessary to
make the Offer in any jurisdiction and extend the Offer to holders of Shares in
such jurisdiction. In any jurisdiction where the securities, blue sky or other
laws require that the Offer be made by a licensed broker or dealer, the Offer
shall be deemed to be made on behalf of the Purchaser by the Dealer Manager or
one or more registered brokers or dealers licensed under the laws of such
jurisdiction.
<PAGE> 2
INSTRUCTIONS WITH RESPECT TO
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING CAPITAL SHARES OF BENEFICIAL INTEREST
OF
PRUDENTIAL REALTY TRUST
The undersigned acknowledge(s) receipt of your letter and the enclosed
Offer to Purchase, dated May 17, 1995, and the related Letter of Transmittal, in
connection with the offer by Black Bear Realty, Ltd., an Ohio limited liability
company, to purchase all outstanding capital shares of beneficial interest,
$0.01 par value per share (the "Shares"), of Prudential Realty Trust, a
Massachusetts business trust.
This will instruct you to tender to the Purchaser the number of Shares
indicated below held by you for the account of the undersigned, upon the terms
and subject to the conditions set forth in the Offer to Purchase and the related
Letter of Transmittal.
Number of Shares to be Tendered: SIGN HERE
_________________shares* X _________________________________________
X _________________________________________
Dated:_________________, 1995 (Signature(s))
___________________________________________
___________________________________________
(Please type or print name(s))
Address____________________________________
___________________________________________
___________________________________________
(Include Zip Code)
___________________________________________
___________________________________________
Area Code and Telephone Number
___________________________________________
Tax Identification or Social Security Number
- ---------------
*Unless otherwise indicated, it will be assumed that all Shares held by us for
your account are to be tendered.
<PAGE> 1
For Immediate Release
BLACK BEAR REALTY, LTD. ANNOUNCES TENDER OFFER
FOR ALL OUTSTANDING CAPITAL SHARES OF BENEFICIAL INTEREST
OF PRUDENTIAL REALTY TRUST
MENTOR, OHIO--May 17, 1995--Black Bear Realty, Ltd., an Ohio limited liability
company (the "Purchaser"), announced today that it is commencing a cash tender
offer for all of the outstanding capital shares of beneficial interest, par
value $0.01 per share (the "Shares"), of Prudential Realty Trust, a
Massachusetts business trust (the "Company"), for $0.30 per share net to the
seller in cash, without interest thereon. The Purchaser was formed by Richard
M. Osborne, a Mentor, Ohio businessman. Mr. Osborne is the sole managing
member of the Purchaser.
The Purchaser's offer, which represents a total transaction value of $2.2
million, provides an alternative to the holders of Shares that are faced with
the scheduled liquidation of the Company. In the Company's Form 10-K annual
report for the year ended December 31, 1994, the Company indicates that upon
liquidation the Shares will be worthless.
Mr. Osborne has filed two lawsuits against the Company and its Trustees, one of
which may determine whether the Shares are entitled to receive a distribution
of capital gains upon sale of any of the Company's properties.
The offer and withdrawal rights will expire at 12:00 midnight, New York City
time, on June 14, 1995, unless the offer is extended.
The offer is conditioned upon, among other things, (1) there being validly
tendered and not withdrawn prior to the expiration of the offer 7,150,000
Shares which, together with the Shares and the income shares of beneficial
interest, par value $0.01 per share, of the Company (the "Income Shares"),
owned by Mr. Osborne and his affiliates, constitute more than 50% of the
combined voting power of the Shares and Income Shares with respect to the
election of Trustees of the Company; (2) the Company not having entered into or
effected any new or amended agreements with any person or entity having the
effect of impairing the ability of the Purchaser to prevent liquidation of the
Company or otherwise diminishing the expected economic value of the Company;
and (3) the Company not having entered into or effected any new or amended
agreements with any person or entity with respect to the sale, transfer or
other disposition of any or all of the properties currently owned by the
Company.
The offer is not conditioned on obtaining financing.
Mr. Osborne stated that the purpose of the offer is (1) to acquire a
substantial equity interest in the Company to prevent the Company's
liquidation, while maintaining the Company's status as a real estate investment
trust ("REIT"), and (2) to make a profit. Upon consummation of the offer and
assuming that the Purchaser purchases 7,150,000 Shares, the
<PAGE> 2
Purchaser, Mr. Osborne and Turkey Vulture Fund XIII, Ltd., an Ohio limited
liability company of which Mr. Osborne is the sole managing member (the
"Fund"), will own approximately 83.6% of the outstanding Shares and hold
approximately 50.2% of the combined voting power of the outstanding Shares and
Income Shares with respect to the election of Trustees. Under the terms of the
Company's Declaration of Trust, a Trustee may be removed with or without cause
by vote or consent of the holders of a majority of the outstanding Shares and
Income Shares authorized to vote, acting together as a single class.
Accordingly, the Purchaser, Mr. Osborne and the Fund will have sufficient
voting power (without the consent of any other holder of the Shares or Income
Shares), as holders of a majority of the combined voting power of the
outstanding Shares and Income Shares, to remove all of the current Trustees of
the Company and to elect new Trustees.
Upon purchasing the Shares pursuant to the offer, the Purchaser currently
intends to take such steps as it deems necessary to prevent the automatic
liquidation of the Company. The Purchaser currently proposes, as soon as
practicable following consummation of the offer, to seek to have the Company
consummate a merger or similar business combination with a self-administered,
indefinite-life REIT, with a single class of common stock, to be formed by the
Purchaser or its affiliates (the "Proposed Merger"). Mr. Osborne has
previously proposed the Proposed Merger to the Company, but the Company has not
entered into negotiations with Mr. Osborne. As previously proposed, under the
terms of the Proposed Merger, each then outstanding Share and each then
outstanding Income Share (other than Shares and Income Shares held in the
treasury of the Company) would be converted into the right to receive a
prescribed number of shares of the new REIT, which would result in the holders
of the outstanding Shares owning approximately 6.9% of the new REIT and holders
of the Income Shares owning approximately 93.1% of the new REIT.
In general, under the Company's Declaration of Trust, other than the election
or removal of the Trustees, all actions to be taken by the holders of the
Shares and Income Shares, including fundamental corporate transactions, such as
the Proposed Merger, require the approval of the holders of a majority of each
class, voting separately as a class. Therefore, the Purchaser, Mr. Osborne and
the Fund will not have sufficient voting power to effect any such other action,
without the consent of the holders of a sufficient number of Income Shares.
The offer is not conditioned on the consummation of the Proposed Merger.
The Company owns three properties which were purchased in 1985 for a combined
cost of $99.9 million. The three properties are Huntington Business Campus,
located in Melville, New York; Maple Plaza located in Parsippany, New Jersey;
and 19 buildings in Park 100 located in Indianapolis, Indiana. Based on
appraisals conducted as of December 31, 1994 on behalf of the Company, the
appraised value of the Company's properties was $73.7 million.
Kemper Securities, Inc. is acting as Dealer Manager for the offer, and Beacon
Hill Partners, Inc. is the Information Agent.
<PAGE> 3
Contact: Beacon Hill Partners, Inc.
Rick Grubaugh
800-755-8713
<PAGE> 1
This announcement is neither an offer nor a solicitation of an offer to sell
Shares. The Offer is being made solely by the Offer to Purchase by Black Bear
Realty, Ltd., and is not being made to, nor will tenders be accepted from or on
behalf of, shareholders residing in any jurisdiction in which making or
accepting the Offer would violate that jurisdiction's laws. In those
jurisdictions where the securities, blue sky or other laws require the Offer to
be made by a licensed broker or dealer, the Offer shall be deemed to be made on
behalf of Black Bear Realty, Ltd. by one or more registered dealers licensed
under the laws of such jurisdiction.
NOTICE OF OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING CAPITAL SHARES OF BENEFICIAL INTEREST
OF
PRUDENTIAL REALTY TRUST
AT
$0.30 NET PER SHARE IN CASH
BY
BLACK BEAR REALTY, LTD.
Black Bear Realty, Ltd., an Ohio limited liability company (the
"Purchaser"), is offering to purchase all outstanding capital shares of
beneficial interest, $0.01 par value per share (the "Shares"), of Prudential
Realty Trust, a Massachusetts business trust (the "Company"), at a purchase
price of $0.30 per 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 May 17, 1995 and in the related Letter of Transmittal (which, together
with any supplements or amendments, collectively constitute the "Offer").
- ------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW
YORK CITY TIME, ON JUNE 14, 1995, UNLESS THE OFFER IS EXTENDED.
- ------------------------------------------------------------------------------
The Offer is conditioned upon, among other things, (i) there being validly
tendered and not withdrawn prior to the Expiration Date (as defined below)
7,150,000 Shares which, together with the Shares and the income shares of
beneficial interest, par value $0.01 per share, of the Company (the "Income
Shares"), owned by the managing member of the Purchaser and his affiliates,
constitute more than 50% of the combined voting power of the Shares and Income
Shares with respect to the election of Trustees of the Company, (ii) the Company
not having entered into or effected any new or amended agreements with any
person or entity having the effect of impairing the ability of the Purchaser to
prevent liquidation of the Company or otherwise diminishing the expected
economic value of the Company, and (iii) the Company not having entered into or
effected any new or amended agreements with any person or entity with respect to
the sale, transfer or other disposition of any or all of the properties
currently owned by the Company.
The Offer will expire at 12:00 midnight, New York City time, on June 14,
1995, unless and until the Purchaser, in its sole discretion, shall have
extended the period of time for which the Offer is open (such date and time, as
so extended, the "Expiration Date").
If the Purchaser makes a material change in the terms of the Offer, or if it
waives a material condition to the Offer, the Purchaser will extend the Offer
and disseminate additional tender offer materials to the extent required by
Rules 14d-4(c) and 14d-6(d) under the Exchange Act of 1934, as amended (the
"Exchange Act"). The minimum period during which an offer must remain open
following material changes in the terms of the offer, other than a change in
price or a change in percentage of securities sought or a change in any dealer's
soliciting fee, will depend upon the facts and circumstances, including the
materiality, of the changes. In the Securities and Exchange Commission's view,
an offer should remain open for a minimum of five business days from the date
the material change is first published, sent or given to shareholders, and, if
material changes are made with respect to information that approaches the
significance of price and the percentage of securities sought, a minimum of ten
business days may be required to allow for adequate dissemination and investor
response. With respect to a change in price or, subject to certain limitations,
a change in the percentage of securities sought or a change in any dealer's
soliciting fee, a minimum ten business day period from the date of such change
is generally required to allow for adequate dissemination to shareholders.
Accordingly, if prior to the Expiration Date, the Purchaser decreases the number
of Shares being sought, or increases or decreases the consideration offered
pursuant to the Offer, and if the Offer is scheduled to expire at any time
earlier than the period ending on the tenth business day from the date that
notice of such increase or decrease is first published, sent or given to holders
of Shares, the Offer will be extended at least until the expiration of such ten
business day period. For purposes of the Offer, a "business day" means any day
other than a Saturday, Sunday or a federal holiday and consists of the time
period from 12:01 a.m. through 12:00 midnight, New York City time.
For purposes of the Offer, the Purchaser will be deemed to have accepted for
payment, and thereby purchased, Shares validly tendered and not withdrawn as, if
and when the Purchaser gives oral or written notice to IBJ Schroder Bank & Trust
Company, as Depositary (the "Depositary"), of the Purchaser's acceptance of such
Shares for payment pursuant to the Offer. Payment for Shares accepted for
payment pursuant to the Offer will in all cases be made only after timely
receipt by the Depositary of Share certificates for, or of Book-Entry
Confirmation with respect to, tendered Shares, a properly completed and duly
executed Letter of Transmittal (or a facsimile thereof), together with any
required signature guarantees (or, in the case of a book-entry transfer of
Shares, an Agent's Message) and any other documents required by the Letter of
Transmittal.
Except as otherwise provided in the Offer to Purchase, tenders of Shares
made pursuant to the Offer are irrevocable. Shares tendered pursuant to the
Offer may be withdrawn at any time on or prior to the Expiration Date and,
unless theretofore accepted for payment as provided in the Offer to Purchase,
may also be withdrawn at any time after July 17, 1995 (or such later date as may
apply in case the Offer is extended). In order for a withdrawal to be effective,
a written or facsimile transmission notice of withdrawal must be timely received
by the Depositary at one of its addresses set forth in the Offer to Purchase.
Any such notice of withdrawal must specify the name of the person who tendered
the Shares to be withdrawn, the number of Shares to be withdrawn, and the name
of the registered holder of the Shares as set forth in the Share certificate, if
different from that of the person who tendered such Shares.
The terms of the Offer are more fully set forth in the Offer to Purchase and
the related Letter of Transmittal (the "Tender Offer Documents") which may be
obtained upon request to the Information Agent listed below, with copies
furnished at the Purchaser's cost. The Purchaser will not pay any fees or
commissions to any broker, dealer or other person (other than the Information
Agent and the Dealer Manager) for soliciting tenders of Shares pursuant to the
Offer. The Tender Offer Documents contain terms and conditions, and the
information required by Rule 14d-6(e)(1)(vii) under the Exchange Act, which are
incorporated herein by reference.
THE TENDER OFFER DOCUMENTS CONTAIN IMPORTANT INFORMATION WHICH SHOULD BE
READ CAREFULLY BEFORE ANY DECISION IS MADE WITH RESPECT TO THE OFFER. QUESTIONS
AND REQUESTS FOR ASSISTANCE MAY BE DIRECTED TO THE INFORMATION AGENT LISTED
BELOW.
<TABLE>
<S> <C>
The Dealer Manager for the Offer is: The Information Agent for the Offer is:
KEMPER SECURITIES, INC. BEACON HILL PARTNERS, INC.
77 West Wacker Drive, #3100 90 Broad Street
Chicago, Illinois 60601-1994 New York, New York 10004
(800) 346-6616 (Toll Free) (800) 755-8713 (Toll Free)
</TABLE>
May 17, 1995
<PAGE> 1
April 25, 1995
Smith Barney, Inc.
388 Greenwich Street
New York, N.Y. 10012
Re: Turkey Vulture Fund XIII, Ltd.
Dear Sirs:
The undersigned, Richard M. Osborne, hereby irrevocably and in accordance
with the terms of the letter agreement dated April 25, 1995, guarantees the
prompt and complete payment and performance when due, of all obligations and
liabilities of The Turkey Vulture Fund XIII, Ltd. account number
224-43061-1-0-005 at Smith Barney, Inc. in connection with all transactions and
positions now or hereafter existing in said account.
This is a continuing guarantee of payment and shall remain in full force
and effect until all obligations of Turkey Vulture Fund XIII, Ltd. under the
Client Agreement and letter agreement dated April 25, 1995 have been satisfied.
This guaranty shall bind the heirs, successors and assigns of Guarantor.
Guarantor shall not assign this guaranty without the prior written consent of
Smith Barney, Inc.
This guaranty, shall be governed by and construed in accordance with the
laws of the State of New York.
Very truly yours,
/s/ Richard M. Osborne
Richard M. Osborne
