EXCAL ENTERPRISES LETTERHEAD
July 27, 1999
Dear Fellow Excal Shareholder:
Once again a dissident minority shareholder is trying to gain a
seat on the Board of Directors of your Company in pursuit of his own
agenda. Mr. Jeffrey Eisenberg, the manager of EP Opportunity Fund, a
hedge fund, wants to be elected as an Excal director and pass an
amendment to the Company's bylaws that would give him personal veto
power over any Board activities. Mr. Eisenberg believes that the
Company should sell the Imeson Center property and liquidate your
Company. Your Board is strongly opposed to Mr. Eisenberg and his
personal agenda. To support existing management, disregard the Blue
Proxy he is mailing to you.
We have had minority shareholders put forth the same agenda of
selling the Imeson Center and liquidating your Company in the past.
Thanks to your support, these agendas were not followed. Your trust
in existing management has proven correct. The revenue and operating
profit of the Imeson Center (and therefore its value) have steadily
increased under the guidance and direction of your existing Board of
Directors. In 1996, you supported existing management by passing
several bylaw changes in response to attempts by small groups of
shareholders to gain control of Excal. We ask you to continue your
support by re-electing John Caskey as a director and voting "Against"
Mr. Eisenberg's proposed bylaw change. Please sign, date, and mail
promptly your enclosed white proxy.
You should be aware that we are currently in the midst of
sensitive negotiations with Sara Lee and Laney & Duke for renewal of
the lease with Laney & Duke at the Imeson Center, which accounted for
over 52% of the revenue of the Imeson Center in fiscal 1999 and 1998.
Representatives of Sara Lee have told us on several occasions their
concern that they continue to deal with existing management. As such,
we believe the election of Mr. Eisenberg as a director and/or the
passage of his bylaw amendment proposal would have a significant
negative impact on these negotiations. The non-renewal of this lease
would have an extremely negative impact on the cash flows and value of
the Imeson Center.
You originally received a Proxy Statement from us asking you to
vote for John Caskey as director. You also received a Supplemental
Proxy Statement outlining Mr. Eisenberg's proposal to require 100%
vote of the Board to conduct any business. Your vote is very
important. Please sign, date and mail the enclosed proxies with a
vote FOR JOHN CASKEY as director and a vote AGAINST the bylaw
amendment. PLEASE ACT TODAY!
You may be receiving a Proxy Statement from Mr. Eisenberg with a
Blue Proxy. To support existing management, simply disregard the Blue
Proxy and do not sign it or send it in not even as a vote of protest.
Your Board of Directors looks forward to continuing to work on
your behalf to increase the value of the Imeson Center and your
Company. Once again, we appreciate your support and trust.
Sincerely,
/S/ W. CAREY WEBB
W. Carey Webb
President and CEO
