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SECURITIES AND EXCHANGE COMMISSION
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Washington, D.C. 20549
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SCHEDULE 13E-4
Issuer Tender Offer Statement
(Pursuant to Section 13(e)(1) of the Securities
Exchange Act of 1934)
TARGET INCOME FUND, INC.
(Name of Issuer and Name of Person (s) Filing Statement)
Common Stock, $.0l Par Value
(Title of Class of Securities)
87611K103
-----------------------------------------
(CUSIP Number of Class of Securities)
Jon LaVine
LaVine & Associates
26691 Plaza Drive, Ste. 222
Mission Viejo, California 92691
(714) 367-1935
(Name, Address, Telephone Number of Person Authorized to Receive Notices
and Communications on Behalf of the Person(s) Filing Statement)
With copies to:
Michael B. Jeffers, Esq.
Jeffers, Wilson & Shaff, LLP
18881 Von Karman Avenue, Suite 1400
Irvine, California 92612
(714) 660-7700
March 12, 1997 (approximate)
(Date Tender Offer First Published,
Sent or Given to Security Holders)
Calculation of Filing Fee
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Transaction Valuation(1) $ 11,129,910
Amount of Filing Fee $ 2,226
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(1) Calculated on the basis of shares of Common Stock outstanding as of March
11, 1997, which were valued at the net asset value of $10.00 per share.
[ ] Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the form
or schedule and the date of its filing.
Amount Previously Paid:_____________________ Filing Party:_____________________
Form or Registration No.:___________________ Date Filed:_____________________
<PAGE>
Item 1. Security and Issuer
(a) The issuer is Target Income Fund, Inc. (the "Fund"). The address of
the principal executive office of the Fund is 26691 Plaza Drive, Suite 222,
Mission Viejo, California 92691.
(b) This Statement relates to an offer by the Fund to purchase all
(1,112,891.001 shares on the date of this Statement) of its common stock
outstanding, par value $.01 per share (the "Shares") for cash at a price equal
to the net asset value per Share ("NAV") determined as of the close of the New
York Stock Exchange on the day the Offer terminates, plus accrued dividends and
all sales charges paid by the Shareholder in acquiring the Shares, upon the
terms and subject to the conditions set forth in the Offer to Purchase dated
March , 1997 (the "Offer to Purchase") and the related Letter of Transmittal
(which together constitute the "Offer"). A copy of the Offer to Purchase and the
Letter of Transmittal are filed as Exhibit (a)(1)(A) and (a)(1)(b),
respectively. The Offer includes any shares held by any officer, director or
affiliate of the Fund, on the same terms as for all other Shareholders.
Reference is made to the Cover Page, Item 1--"Price; Number of Shares",
and Item 4 -- "Interest in Securities of the Issuer", in the Offer to Purchase,
which is incorporated herein by reference.
(c) The Shares are not traded on any established trading market. The
Fund has maintained a stable NAV of $10.00 per share during the past two years
and at all times since inception.
(d) Not applicable.
Item 2. Source and Amount of Funds or Other Consideration.
Reference is made to Item 4 -- "Source and Amount of Funds", in the
Offer to Purchase, which is incorporated herein by reference.
Item 3. Purpose of the Tender Offer and Plans or Proposals of the Issuer or
Affiliate.
Reference is made to Item 3 -- "Purpose of the Offer", in the Offer to
Purchase, which is incorporated herein by reference.
Item 4. Interest in Securities of the Issuer.
Reference is made to Item 7 -- "Contracts and Relationships with
Affiliates", in the Offer to Purchase, which is incorporated herein by
reference.
Item 5. Contracts, Arrangements, Understandings or Relationships With Respect to
the Issuer's Securities.
Reference is made to Item 4 -- "Source and Amount of Funds", in the
Offer to Purchase, which is incorporated herein by reference.
A copy of the CGC Agreement with the Fund for the purchase of certain
of the Fund's investment assets is filed as Exhibit (c)(1).
Copies of the agreements between Bay View Federal Bank and the Fund for
the purchase of certain of the Fund's investments assets is filed as Exhibit
(c)(2).
Item 6. Persons Retained, Employed or to be Compensated.
No persons have been employed or retained or are to be compensated by
or on behalf of the Fund to make solicitations or recommendations in connection
with the Offer.
<PAGE>
Item 7. Financial Information.
(a)(1) The Fund's Annual Reports to Shareholders containing audited
financial statements for the fiscal years ended October 31, 1996 and 1995,
respectively, including the independent accountant's report dated December 18,
1996 and December 21, 1995, respectively, are filed as Exhibits (g)(1) and
(g)(2) to this Statement and are incorporated herein by reference.
(2) The Fund is not required to file quarterly reports under the
Exchange Act.
(3) Certain ratios applicable to the /Fund for the fiscal years ended
October 31, 1996 and 1995, respectively, are contained in Exhibits (g)(1) and
(g)(2), respectively, and are incorporated herein by reference.
(4) The Fund's NAV as of October 31, 1996 and 1995, respectively are
set forth in Exhibits (g)(1) and (g)(2), respectively and are incorporated
herein by reference.
(b) It is not possible for the Fund to predict the number of Shares
that will be tendered pursuant to the Offer; accordingly, it is not possible for
the fund to provide pro forma information disclosing the effect of the tender
offer.
Item 8. Additional Information.
(a)-(d) Not applicable.
(e) The Offer to Purchase, which is filed as Exhibit (a)(1)(A), is
incorporated by reference in its entirety.
Item 9. Material to be Filed as Exhibits.
(a)(1)(A) Offer to Purchase
(a)(1)(B) Letter of Transmittal
(c)(1) Form of Agreement between CGC and the Fund regarding the
purchase of the Fund's investment assets.
(c)(2) Form of Agreements between Bay View Federal Bank and
the Fund regarding the purchase of certain of the
Fund's investment assets.
(g)(1) 1996 Annual Report to Shareholders, including audited
financial statements for the two-year periods ended
October 31, 1996 and 1995, respectively, previously
filed on January 10, 1997, and incorporated herein by
reference.
(g)(2) 1995 Annual Report to Shareholders, including audited
financial statements for the two-year periods ended
October 31, 1995 and 1994, respectively previously
filed on February 20, 1996, and incorporated herein by
reference.
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.
TARGET INCOME FUND, INC.
<PAGE>
By /s/ Jon LaVine
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Jon LaVine, President
Dated: March 12, 1997
EXHIBIT (a)(1)(A)
TARGET INCOME FUND, INC.
26691 Plaza Drive, Ste. 222
Mission Viejo, California 92691
March 12, 1997
Dear Shareholder,
Re: Notification of Tender Offer
Target Income Fund, Inc. (the "Fund") has determined that it is in the
best interest of the Fund and its shareholders to terminate its operations and
cease operating as a closed-end investment company. The Board of Directors has
authorized a tender offer for all of the outstanding shares of the Fund, plus
accrued dividends and all sales charges paid in acquiring the shares. Following
the Tender Offer, the Fund will terminate all operations and will be dissolved
and liquidated.
A Notification of the Tender Offer is attached. To tender any or all of
your shares, please complete the attached Letter of Transmittal and promptly
return to the address indicated.
Following the Tender Offer and until the Fund is liquidated, the Fund's
assets will be invested in cash equivalents and government securities and its
net income is expected to decrease substantially.
<PAGE>
TARGET INCOME FUND, INC.
26691 Plaza Drive, Suite 222, Mission Viejo, CA 92691
NOTIFICATION OF TENDER OFFER TO PURCHASE FOR CASH ALL OF ITS ISSUED AND
OUTSTANDING SHARES AT NET ASSET VALUE PER SHARE,
PLUS ACCRUED DIVIDENDS AND ALL SALES CHARGES
THE EXPIRATION DATE OF THIS OFFER IS 4:00 P.M. NEW YORK TIME ON APRIL 1, 1997,
UNLESS EXTENDED.
To the Holders of Shares of
TARGET INCOME FUND, INC.:
As of March 12, 1997 (the "Commencement Date"), Target Income Fund,
Inc. (the "Fund") is offering to purchase all (the "Tender Offer Amount") of its
issued and outstanding shares of common stock, par value $.01 per share, (the
"Shares"), for cash at a price equal to the net asset value ("NAV") of the
shares as of the close of the regular trading session of the New York Stock
Exchange on April 1, 1997 (the "Expiration Date"), plus accrued dividends and
all sales charges paid, upon the terms and conditions set forth in this Offer
and the related Letter of Transmittal which together constitute the "Tender
Offer." The Fund's NAV was $10.00 per share and 1,112,891.001 shares were issued
and outstanding on March 12, 1997. There is no current market for the shares
other than through the Tender Offer. The Fund computes its NAV on a daily basis
on each day the New York Stock Exchange (the "Exchange") is open for trading, as
of the close of trading on the Exchange (normally 4:00 p.m., New York time) and
will continue to do so through the Expiration Date. The Fund's current NAV as of
any day may be obtained by contacting the Fund at (800) 331-3186.
If the Shares to be tendered are registered in the Shareholder's name
and the necessary documents will be completed and transmitted to the Fund by the
Shareholder, the procedure for tendering Shares for purchase pursuant to the
Offer is set forth in the accompanying Letter of Transmittal, the provisions of
which are incorporated by reference. A Letter of Transmittal is not required if
a broker, dealer or other selling group member will be used to effect the
transaction for the Shareholder.
Tendering Shareholders can expect to receive payment for the Shares
tendered on or before April 9, 1997 (the "Tender Payment Date"). The Shares may
fluctuate in NAV between the Commencement Date and the Expiration Date. The Fund
will not impose any fees or charges on the repurchase of Shares hereunder and
such shares will not be subject to an Early Withdrawal Charge (as defined in the
Fund's Prospectus). Shareholders who desire to retain their Shares need not take
any actions, but should be aware of the Fund's intention to dissolve and
liquidate the Fund as described in Section 2 of the enclosed Offer to Purchase.
NEITHER THE FUND NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO
ANY SHAREHOLDER AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING SHARES. EACH
SHAREHOLDER MUST MAKE HIS OWN DECISION WHETHER TO TENDER SHARES AND, IF HE
DECIDES TO DO SO, HOW MANY SHARES TO TENDER.
NO PERSON HAS BEEN AUTHORIZED TO MAKE ANY RECOMMENDATION ON BEHALF OF
THE FUND AS TO WHETHER SHAREHOLDERS SHOULD TENDER SHARES PURSUANT TO THE OFFER.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS IN CONNECTION WITH THE OFFER OTHER THAN THOSE CONTAINED HEREIN.
IF GIVEN OR MADE SUCH RECOMMENDATION AND SUCH INFORMATION AND REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND.
Questions, requests for assistance and requests for additional copies
of this Offer, and of the transmittal letter should be directed to the Fund's
Administrator at 2025 E. Financial Way, Ste. 101, Glendora, CA 91741 or by
telephoning (818) 852-1033. No persons have been employed or retained or are to
be compensated by the Fund in connection with the Offer.
March 12, 1997
<PAGE>
TARGET INCOME FUND, INC.
TENDER OFFER TO PURCHASE
1. Price; Number of Shares. The Fund will, upon the terms and conditions
of the Offer, purchase up to all of its 1,112,891.001 issued and outstanding
Shares, which are tendered and not withdrawn prior to the Expiration Date. The
purchase price of the Shares will be their NAV as of the close of the New York
Stock Exchange on the Expiration Date. The Fund reserves the right to suspend or
postpone the Offer only pursuant to the terms and conditions specified in
Section 8 hereof.
The Offer is being made to all Shareholders of the Fund and is not
conditioned upon any minimum number of Shares being tendered.
The Fund will, upon the terms and subject to the conditions of the
Offer, purchase at NAV all Shares tendered prior to the Expiration Date and not
withdrawn, plus accrued dividends and all sales charges paid by the Shareholder
in acquiring shares.
The Shares are not currently traded on any established trading market.
The Fund has maintained a stable NAV of $10.00 per share during the past two
years and at all times since inception. The current NAV of the Fund's Shares may
be obtained by calling the Fund at the telephone number provided above.
2. Withdrawal Rights. Tenders accepted pursuant to the Offer will be
irrevocable. However, Shareholders may modify the number of shares being
tendered or withdraw Shares tendered at any time up to the Expiration Date by
providing written notice of withdrawal to the Fund at the address set forth in
the Notice above, identifying the Shareholder and specifying the number of
Shares to be withdrawn.
3. Purpose of the Offer. The Fund is making the Offer in connection with
the Fund's determination that it is in the best interests of the Fund and its
Shareholders to terminate operations as a closed-end investment company and
dissolve and liquidate the Fund. The Fund has stopped accepting subscriptions
for the sale of new shares and is not investing in new portfolio securities. The
Board of Directors has authorized the Offer as the most timely and expedient way
to provide Shareholders with a full return, in cash, of the NAV of their
investment in the Fund, plus accrued dividends and sales charges. Following the
consummation of the Offer, the Fund will be dissolved and liquidated and all
operations will be terminated. The Shares acquired pursuant to the Offer will be
retired.
The Fund has determined that it is no longer economically or
operationally feasible to continue its operations in a manner consistent with
its investment policies and practices and in the best interests of its
Shareholders. The Fund has been notified by Concord Growth Corporation ("CGC"),
the Fund's master servicer and principal source of loan originations for the
Fund's investment portfolio, that CGC is being acquired by another entity, is
resigning as master servicer to the Fund and will no longer be a source of loan
originations for the Fund. The Fund has been unable to find other qualified loan
origination sources to provide a flow of investment assets to the Fund
consistent with its investment policies and practices, or a replacement master
servicer with a sufficient track record and level of expertise. The continuation
of the Fund at its current asset size with no assurance of a continued supply of
new investment assets is not economically feasible for the shareholders or the
Advisor. A sale or merger of the Fund to a comparable investment company is not
feasible because of the small size of the Fund and the potential risk of
investment losses to its shareholders. Accordingly, the Fund's Board of
Directors has determined that a tender offer for the Shares, followed by a
voluntary dissolution and liquidation is the only viable alternative consistent
with the best interests of the Shareholders.
Following the dissolution and liquidation, the Fund is expected to make
application for an order declaring that the Fund has ceased to be an investment
company registered under the Investment Company Act of 1940, as amended.
2
<PAGE>
4. Source and Amount of Funds. Funds to consummate the Offer and to repay
borrowings will be derived from any cash on hand and from the proceeds of
repayments on and liquidation of portfolio securities held by the Fund. To
facilitate the Offer and the orderly dissolution and liquidation of the Fund,
CGC and Bay View Federal Bank have agreed to purchase all of the outstanding
investment assets of the Fund for cash at the full principal amount, plus
accrued interest. These transactions are expected to be completed on or about
March 14, 1997, which will leave the Fund in essentially an all-cash position
with sufficient funds to pay for the tendered Shares in full and then to
discharge and satisfy all of its outstanding indebtedness and complete the
dissolution and liquidation. Because the Fund is expected to be in essentially
an all-cash position following the Offer, the Fund's net income is expected to
decrease during such period and during the subsequent period of liquidation.
5. Tax Consequences. The following discussion is a general summary of the
Federal Income Tax consequences of a tender of Shares pursuant to the Offer. You
should consult your own tax advisor regarding the specific tax consequences,
including state and local tax consequences, of such a tender to you.
A tender of Shares pursuant to the Offer will be a taxable transaction
for Federal income tax purposes. In general, the transaction should be treated
as a sale or exchange of the Shares under Section 302 of the Internal Revenue
Code of 1986 as amended (the "Code"), if the tender (i) completely terminates
the Shareholder's interest in the Fund, (ii) is treated as a distribution that
is "not essentially equivalent to a dividend;" or (iii) is substantially
disproportionate as to the Shareholder. A complete termination of the
Shareholder's interest generally requires that the Shareholder dispose of all
Shares directly owned or attributed to him under Section 318 of the Code. A
"substantially disproportionate" distribution generally requires a reduction of
at least 20% in the Shareholder's proportionate interest in the Fund after all
Shares are tendered. A distribution "not essentially equivalent to a dividend"
requires that there be a "meaningful reduction" in the Shareholders interest,
which should be the case if the Shareholder has a minimal interest in the Fund,
exercises no control over Fund affairs, and suffers a reduction in his
proportionate interest.
The Fund intends to take the position that tendering Shareholders will
qualify for sale or exchange treatment. If the transaction is treated as a sale
or exchange for tax purposes, any gain or loss recognized will be treated as a
capital gain or loss by Shareholders who hold their Shares as a capital asset
and as a long-term capital gain or loss if such Shares have been held for more
than one year.
If the transaction is not treated as a sale or exchange, the amount
received upon a sale of Shares may consist in whole or in part of ordinary
dividend income, a return of capital or capital gain, depending on the Fund's
earnings and profits for its taxable year and the Shareholder's tax basis in the
Shares. In addition, if any amounts received are treated as a dividend to
tendering Shareholders, a constructive dividend under Section 305 of the Code
may be received by non-tendering Shareholders whose proportionate interest in
the Fund has been increased as a result of the tender.
The Fund or its agent could be required to withhold 31% of gross
proceeds paid to a Shareholder or other payee pursuant to the Offer if (a) it
has not been provided with the Shareholder's taxpayer identification number
(which, for an individual, is usually the social security number) and
certification under penalties of perjury (i) that such number is correct and
(ii) that the Shareholder is not subject to withholding as a result of failure
to report all interest and dividend income or (b) the Internal Revenue Service
(IRS) or a broker notifies the Fund that the number provided is incorrect or
withholding is applicable for other reasons. Backup withholding does not apply
to certain payments that are exempt from information reporting or are made to
exempt payees, such as corporations. Foreign Shareholders are required to
provide the Fund with a completed IRS Form W-8 to avoid 31% withholding on
payments received on a sale or exchange. Foreign Shareholders may be subject to
withholding of 30% (or a lower treaty rate) on any portion of payments received
that is deemed to constitute a dividend. Generally, amounts incurred as gain
from a sale or exchange are not subject to withholding.
6. Suspensions, Postponements and Extensions of the Offer. The Fund does
not intend to suspend, postpone or extend the Offer except by vote of a majority
of the Board of Directors (including a majority of disinterested Directors) and
only for such periods as may be needed to liquidate investment assets to provide
cash for the Offer, or as the Securities and Exchange Commission may by order
permit for the protection of Shareholders of the Fund.
If the Offer is suspended, postponed or extended, the Fund will provide
notice thereof to Shareholders. If the Fund renews the Offer, a new Notification
will be sent to all Shareholders. If the Fund extends the Offer, the NAV for the
Shares tendered will be determine as of the close of the regular trading session
of the New York Stock Exchange on the Expiration Date, as amended.
7. Contracts and Relationships with Affiliates. The Fund currently is a
party to an Investment Advisory Agreement with Target Capital Advisors, Inc.,
its investment advisor (the "Advisor") and an Administration Agreement with
Investment Company Administration Corporation, its Administrator (the
"Administrator"). Under these Agreements, the Fund pays the Advisor a monthly
fee at an annual rate of 0.75% of the Fund's average daily net assets and the
Administrator an annual fee of $24,000 for performing the Fund accounting and
0.25% of the Fund's average daily net assets, or $30,000, whichever is greater,
for performing administrative services. Certain officers of the Advisor also are
officers or directors of the Administrator.
3
<PAGE>
No director, officer or affiliate or any group of which a director,
officer or affiliate of the Fund was a member, has effected a transaction in the
Fund's common stock during the past 40 days. Effective January 31, 1997, the
Fund completed a regular quarterly repurchase offer for 43,173 shares of common
stock at NAV of $10.00 per share, pursuant to its quarterly repurchase program
under Rule 23c-3 under the Investment Company Act of 1940, as amended.
8. Selected Financial Information.
SUMMARY OF SELECTED FINANCIAL INFORMATION
(IN 000'S EXCEPT PER SHARE DATA)
Year Ended Year Ended
October 31, October 31,
1996 1995
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INCOME STATEMENT
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Interest $ 1,148,253 $ 1,089,235
Expenses 275,792 270,235
Net Investment Income 872,461 818,770
REALIZED AND UNREALIZED GAIN ON
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INVESTMENTS 0 0
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BALANCE SHEET (at end of period)
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Total Assets 13,469,674 11,163,862
Total Liabilities 1,839,259 370,676
Total Net Assets 11,630,415 10,793,186
Net Asset Value per share $10.00 $10.00
Shares of Common Stock Outstanding 1,163,042 1,079,319
PER SHARE
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Net Investment Income $0.79 $0.76
Dividends from Net Investment Income $0.79 $0.76
RATIOS
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Operating Expenses to Average Net Assets 2.50% 2.50%
Net Investment Income to Average Net Asset 7.90% 7.60%
TOTAL RETURN 8.20% 7.90%
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4
EXHIBIT (a)(1)(B)
Target Income Fund, Inc.
------------------------
Letter of Transmittal
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The undersigned shareholder("tendering shareholder") hereby tenders to Target
Income Fund, Inc. (the "Fund"), a closed-end investment company, the shares of
the Fund indicated below at a price equal to the net asset value per share
("NAV") on the Expiration Date (as defined in the Offer), plus accrued dividends
and all sales charges paid in acquiring the shares, in cash upon the terms and
conditions set forth in the Offer dated March 12, 1997, receipt of which is
hereby acknowledged, and in this Letter of Transmittal (which together
constitute the "Offer").
Description of Shares Tendered
Name(s) of Registered Holder(s)
Instructions:
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* Please fill in exactly as shares are registered
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Please Print
Account Number _______________________________________________________________
Please provide your daytime telephone number: ________-______________________
Please include area code
Shares Tendered
Check one:
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|_| Partial Tender - only the number of shares entered are to be tendered.
________________ shares.
|_| Complete Tender - all shares are to be tendered.
Taxpayer Identification Number (TIN) Certification
- ------------------------------------ Enter your TIN (Social Security number of
individuals or Employer I.D. number of
entities, including corporations,
partnerships, estates and Funds.)
- ------------------------------------
(1) The number shown on this form or currently shown on my account is my
correct taxpayer identification number, and
(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 under-reporting interest or dividends on your tax return.
In signing this letter, I certify under penalties of perjury that the
information provided in this section is true, correct and complete.
Special Payment and Delivery instructions
* The check will be issued in the name of the registered shareholder and
mailed to the address of record unless alternative instructions are
authorized in this section.
1 of 3
<PAGE>
Alternate Instructions: (If special payment or delivery is requested, signatures
must be guaranteed.)
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----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
Signature(s) and Signature(s) Guarantee
Instructions:
- -------------
* If this Letter of Transmittal is signed by the registered holder(s) of the
shares tendered, the signature(s) below must correspond exactly with the
name(s) in which the shares are registered.
* If the shares are held of record by two or more joint holders, all such
holders must sign below.
* If shares are held of record by an IRA account, this Letter of Transmittal
must be signed by an authorized official of the Custodian of the IRA.
* If this Letter of Transmittal or any certificates or authorizations are
signed by trustees, executors, administrators, guardians, attorneys in fact,
officers of corporations or others acting in a fiduciary or representative
capacity, such persons should so indicate when signing, and must submit
proper evidence satisfactory to the Fund of their authority to so act.
- ----------------------------------------------------------
- ----------------------------------------------------------
Signature(s) of owner(s) - EXACTLY as registered
Date ______________________________
Signature(s) Guaranteed by:
Instructions:
- -------------
* All signatures must be guaranteed unless:
1. This Letter of Transmittal is signed by the registered holder(s) of the
shares, and
2. There is no change at registration of any remaining shares, and
3. The payment of the tender offer proceeds are to be sent to the registered
owner of the shares at the address shown in the share registration, and
4. The tender offer proceeds will be less than $5,000.
* In all other cases, all signatures on this Letter of Transmittal must be
guaranteed by a member firm of a registered national securities exchange, or
a commercial bank or Fund company having an office, branch or agency in the
United States.
Mail or Deliver to:
Target Income Fund, Inc.
c/o Finance 500, Inc.
19762 McArthur Blvd, Suite 200
2 of 3
<PAGE>
Irvine, CA 92715
3 of 3
<PAGE>
GENERAL INSTRUCTIONS
--------------------
1. Delivery of Letter of Transmittal
A properly completed and duly executed Letter of Transmittal should be
mailed or delivered to the Transfer Agent at the appropriate address
shown on the previous page of this letter. All documents must be
received by the Transfer Agent on or prior to the Tender Request
Deadline (as defined in the Offer). Delivery to an address other than
that shown does not constitute valid delivery. The method of delivery of
all documents is at the election and risk of the shareholder making the
tender.
2. Transfer Taxes
The Fund will pay all taxes, if any, payable on the transfer to it of
shares purchased pursuant to the Offer. If, however, payment of the
purchase price is to be made to or (in the circumstances permitted by
the Offer) or if any tendered shares are registered in any name other
than that of the person(s) signing this Letter of Transmittal, the
amount of transfer taxes (whether imposed on the registered holder or
such other person) 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.
3. Irregularities
All questions as to the validity, form, eligibility (including time of
receipt) and acceptance of any tender of shares will be determined by
the Fund whose determination shall be final and binding. The Fund
reserves the absolute right to reject any or all tenders determined by
it not to be in appropriate form or the acceptance of, or payment for
which would, in the opinion of the Fund's counsel, be unlawful. The Fund
also reserves the absolute right to waive any of the conditions of the
Offer or any defect in any tender with respect to any particular shares
or any particular shareholder. The Fund's interpretations of the terms
and conditions of the Offer (including these instructions) will be final
and binding. Unless waived, any defects or irregularities in connection
with tenders must be cured within such time as the Fund shall determine.
Tenders will not be deemed to have been made until all defects and
irregularities have been cured or waived. Neither the Fund, the Transfer
Agent, or any other person shall be obligated to give notice of defects
or irregularities in tenders, nor shall any of them incur any liability
for failure to give such notice.
4. Separate Accounts
If the shares tendered are registered in more than one account, please
complete, sign and submit a separate Letter of Transmittal for each
account.
5. Additional Copies
Additional copies of the Offer and this Letter of Transmittal may be
obtained by contacting the Fund at the telephone number shown below:
Questions and requests for further assistance may be directed to
the Fund's Administrator at 818-852-1033.
EXHIBIT (c)(1)
[GRAPHIC OMITTED]
3590 North First Street, Suite 200 * San Jose * CA * 95134
* Tel 408-570-2100 * Fax 408-570-2120
March 7, 1997
Target Income Fund, Inc.
26691 Plaza Drive
Suite 222
Mission Viejo, California 92691
Gentlemen and Ladies:
Concord Growth Corporation ("Concord") has provided loan participations
and loan servicing to Target Income Fund, Inc. ("Target"), a closed-end
investment company, since Target commenced operations on November 24, 1992. When
this arrangement commenced, the original expectation was that Target would
acquire loans from various originator/servicers (in addition to Concord), and
that Concord would serve as master servicer of loans provided by other
originating servicers as needed. However, to date Target has not been able to
find qualified originating servicers other than Concord. As a result, Target's
current portfolio of assets consists entirely of the loan participations (the
"Loan Participations") set forth on Schedule A hereto and 50% ownership
interests in two variable rate small business financing loans (the "Trust
Certificates"). All of the Loan Participations are subject to a participation
agreement ("Participation Agreement") with Concord, as identified on Schedule A.
Concord and Target are also parties to a Master Servicing Agreement, dated as of
September 27, 1993 (the "Master Servicing Agreement"), pursuant to which Concord
has agreed to serve as master servicer of certain loans acquired by Target.
Concord is currently in the process of being acquired by a third party
(the "Concord Transaction"), and in connection therewith, has advised the Board
of Directors of Target that it no longer intends to serve as originator of new
loan participations for Target, and that it desires to repurchase all
outstanding Loan Participations (the "Purchased Assets") from Target and to
<PAGE>
terminate the Master Servicing Agreement. Concord understands that the Trust
Certificates will be purchased from Target by another party. The Board of
Directors of Target has considered Concord's proposal to repurchase the
Purchased Assets, as well as Concord's stated intention no longer to originate
loan participations for Target, and has determined that the orderly sale of the
Purchased Assets and termination of the Master Servicing Agreement as set forth
below are in the best interests of Target and its shareholders. Accordingly, in
consideration of the foregoing and for other good and valuable consideration,
Concord and Target hereby agree as follows:
1. Purchase and Sale of Purchased Assets. Each of the Purchased Assets
and the current principal amount is set forth on Schedule A. At the closing
provided for in paragraph 2 below (the "Closing"), Target will sell, assign ,
transfer and deliver to Concord all of Target's right, title and interest in and
to each of the Purchased Assets. The purchase price for each of the Purchased
Assets will be equal to the full principal amount thereof, plus any accrued but
unpaid interest, as shall be set forth on a mutually agreeable schedule that
shall be delivered by Concord to Target at the Closing. The aggregate purchase
price for the Purchased Assets will be payable at the Closing, by wire transfer
of immediately available funds to an account specified in writing by Target to
Concord. The purchase and sale of the Trust Certificates is subject to a
separate agreement between Target and another party.
2. Closing and Closing Date. The Closing of the sale and purchase of
the Purchased Assets shall take place at the offices of Concord, 3590 North
First Street, Suite 200, San Jose, CA 95134, on March 14, 1997, at 2:00 p.m.
local time, or such other place, date and time as shall be mutually agreeable to
Concord and Target. The date upon which the Closing occurs is hereinafter called
the Closing Date. At the Closing, all of the actions reflected in this agreement
as taking place at the Closing or on the Closing Date shall be taken, each of
which shall be conditional on completion of all the others and all of which
shall be deemed to have taken place simultaneously.
3. Termination of Master Servicing Agreement. The Master Servicing
Agreement shall be terminated, and shall be of no further force and effect, and
each party shall be relieved of any and all obligations thereunder, effective as
of the Closing Date. Without limiting the generality of the foregoing, the
parties hereby waive any and all notice requirements specified in the Master
Servicing Agreement with respect to the termination thereof.
4. Representations and Warranties of Target. Target represents and
warrants to Concord that:
4.1. Target is a corporation duly organized, validly existing
and in good standing under the law of the jurisdiction of its incorporation, and
has the power to carry on its business as now being and as heretofore conducted.
<PAGE>
4.2. Target owns outright and has good and marketable title to
all of the Purchased Assets, and at the Closing, will convey to Concord good and
marketable title to the Purchased Assets, free and clear of any lien or other
encumbrance (other than as set forth in the Participation Agreement). There is
no outstanding right, subscription, call, option or other agreement of any kind
to purchase or otherwise to receive from Target any ownership interest in the
Purchased Assets.
4.3. Target has the full legal right and power and, subject to
any consent required pursuant to paragraph 7.2, all authority and approval
required to enter into, execute and deliver this agreement, and to perform fully
its obligations hereunder. This agreement has been duly executed and delivered
and constitutes the valid and binding obligation of Target enforceable in
accordance with its terms, subject bankruptcy, insolvency, reorganization,
moratorium and other laws of general application affecting the rights and
remedies of creditors, and general principles of equity (regardless of whether
such enforcement is considered in a proceeding at law or in equity). No approval
or consent of any governmental or regulatory body, and (except as otherwise
specified in this agreement) no approval or consent of any other person is
required to be obtained by Target in connection with the execution and delivery
by Target of this agreement and the consummation and performance by Target of
the transactions contemplated hereby. The execution, delivery and performance of
this agreement by Target, and the consummation of the transactions contemplated
hereby in accordance with the terms and conditions hereof by Target, will not
violate (i) any of the charter documents of Target, (ii) any order, judgment,
injunction, award, decree of any court, arbitrator or governmental or regulatory
body, by which Target is bound, or (iii) any statute, law or regulation
applicable to Target, which violation could have a material adverse effect on
the consummation of the transactions contemplated hereby or the Purchased
Assets.
5. Representations and Warranties of Concord. Concord represents and
warrants to Target that:
5.1. Concord is a corporation duly organized, validly existing
and in good standing under the law of the jurisdiction of its incorporation, and
has the power to carry on its business as now being and as heretofore conducted.
5.2. Concord has the full legal right and power and all
authority and approval required to enter into, execute and deliver this
agreement, and to perform fully its obligations hereunder. This agreement has
been duly executed and delivered and constitutes the valid and binding
obligation of Concord enforceable in accordance with its terms, subject to
bankruptcy, insolvency, reorganization, moratorium and other laws of general
application affecting the rights and remedies of creditors, and general
principles of equity (regardless of whether such enforcement is considered in a
proceeding at law or in equity). No approval or consent of any governmental or
regulatory body, and (except as otherwise specified in this agreement), no
approval or consent of any other person is required to be obtained by Concord in
connection with
<PAGE>
the execution and delivery by Concord of this agreement and the consummation and
performance by Concord of the transactions contemplated hereby. The execution,
delivery and performance of this agreement by Concord, and the consummation of
the transactions contemplated hereby in accordance with the terms and conditions
hereof by Concord, will not violate (i) any of the charter documents of Concord,
(ii) any order, judgment, injunction, award, decree of any court, arbitrator or
governmental or regulatory body, by which Concord is bound, or (iii) any
statute, law or regulation applicable to Concord, which violation could have a
material adverse effect on the consummation of the transactions contemplated
hereby.
6. Treatment of Unreimbursed Expenses. Target acknowledges that Concord
has incurred expenditures of at least $10,488.00 on behalf of Target, and, as of
the date of this letter, has not been reimbursed for such expenditures. Target
and Concord agree that unreimbursed expenses of $10,488.00, subject to final
adjustment, will be paid in full to Concord at the Closing. Such amount may be
paid by wire transfer of immediately available funds to an account specified in
writing by Concord to Target, or by reducing the aggregate purchase price
specified in paragraph 1 by such amount, in either case as the parties shall
agree prior to the Closing Date.
7. Conditions to Closing. The obligation of each party to consummate
the transactions contemplated hereby and to complete the Closing is subject to
the fulfillment on or prior to the Closing Date of the following conditions, any
one or more of which may be waived as to itself by either party:
7.1. The representations and warranties made by either party
in this agreement will be true and correct in all material respects on and as of
the Closing Date with the same force and effect as though such representations
and warranties had been made on and as of the Closing Date.
7.2. No action, suit or proceeding shall have been instituted
before any court, governmental or regulatory body, or instituted or threatened
by any governmental or regulatory body, to restrain, modify or prevent the
carrying out of the transactions contemplated by this agreement.
8. Additional Condition. The obligation of Concord to consummate the
transactions contemplated hereby and to consummate the Closing is also subject
to the condition precedent that the Concord Transaction shall have been
consummated. This condition may be waived by Concord in its sole discretion.
9. Further Assurances. Target shall execute and deliver to Concord all
instruments and documents and take such further actions as may be reasonably
required or desirable to carry out the provisions hereof and the transactions
contemplated hereby, including the completion of any and all transfers and
assignments provided herein.
<PAGE>
10. Termination. This agreement may be terminated prior to the Closing
Date only with the written consent of both parties.
11. Entire Agreement. This agreement constitutes the entire agreement
of the parties with respect to the subject matter hereof, and supersedes all
prior agreements, whether written or oral, with respect thereto. All terms and
provisions of this agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their successors and permitted assigns.
12. Governing Law. This agreement is to be governed by and construed in
accordance with the laws of the State of California applicable to agreements
entered into and performed entirely within that state. Any legal action or
proceeding arising out of or relating to this agreement maybe brought in the
courts of the State of California, or the courts of the United States of America
located in the City and County of San Francisco, and each of the parties hereto
hereby irrevocably submits to the jurisdiction of each of such courts in any
action or proceeding. Each of the parties hereto hereby irrevocably consents to
service of process in any said action or proceeding. Each of the parties hereto
hereby irrevocably consents to service of process in any said action or
proceeding in any of such courts by the mailing of copies thereof via certified
mail, postage prepaid to such party at its address set forth herein, such
service to become effective ten (10) days after such mailing.
13. Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly received: (i) on the date given if
delivered personally or by cable, telegram, telex or telecopy or (ii) on the
date received if mailed by registered or certified mail (return receipt
requested), to the parties at the following addresses (or at such other address
for a party as shall be specified by like notice):
(a) if to Concord:
Concord Growth Corporation
3590 North First Street, Suite 200
San Jose, CA 951134
Attention: Reid Rutherford
(b) if to Target
Target Income Fund, Inc.
26691 Plaza Drive, Suite 222
Mission Viejo, California 92691
Attention: Jon LaVine
<PAGE>
14. Assignment. This agreement may not be assigned by any party hereto
without the written consent of the other party.
Please acknowledge your agreement with the foregoing terms and
conditions by signing below.
Very truly yours,
CONCORD GROWTH CORPORATION
By: ______________________________
AGREED TO THIS____day of_______, 1997
TARGET INCOME FUND, INC.
By: __________________________________
Date: ____________
<PAGE>
Schedule A- Purchased Assets
3/11/97 - Page -1-
Schedule A
Purchased Assets
(to be updated at Closing)
END ADV BAL
3/5/97
TIF CURRENT PARTICIPATION FUNDING
CLIENT END PART BAL
ADMOR MEMORY LTD. AD-S 445,766.61
BEVERLY HILLS-JH JH-F 213,208.47
BEVERLY-EQUIP(KC) KC-S 655,004.20
BOND FOOD PRODUCTS BP-S 169,041.49
BOND FOOD-INV.-BU BU-S 344,138.72
CAROLINA HARDWOODS HW-S 138,107.58
CARPET EXCHANGE-QU QU-S 78,675.70
CARPET EXCH./INV. XE-S 112,356.31
CHATEAU P CP-I 137,831.60
CLEAN ROOM PRODUCTS CH-S 200,900.44
CLEAN ROOM ACCOM. XH-S 72,679.00
EMCO WHEATON EW-S 210,280.99
EMCO WHEATON-ACCOM. XD-S 55,854.20
FIRST SOURCE INT'L VM-S 817,918.13
FOOD SPECIALTIES FD-F 346,486.10
GRAMAN USA INC. GR-S 245,503.27
GRAMAN USA INVENTORY YG-S 92,729.76
GOLDSTAR/ NIKABAR NI-S 1,686,660.80
INT'L SEAFOOD-EQUIP KH-S 253,308.00
LEATHER CENTER-LY LY-S 201,568.15
LEATHER CENTER M&E JD-S 43,995.60
LOGISTICS MANAGEMENT, INC. LG-S 515,905.74
PARADISE PRINTING QC-S 209,455.02
PARADISE PRINT-QD QD-S 229,472.00
PRECISE PLASTIC-UD UD-S 159,886.51
PRECISE PLASTIC/INV UE-S 41,454.94
PRECISE PLASTIC/TERM UF-S 69,993.00
PREFERRED PERSONNEL PY-S 1,300,976.56
<PAGE>
WESTERN COMMERCE CORP. WR-S 454,110.38
EXCHANGE TOOL-XN XN-S 7,565.29
VAST TECH VT-S 21,760.91
MAIN SOURCE 61,956.00
EXCHANGE TOOL-XN 40,906.92
JUPITER 2 IMPORTS 75,177.00
VAST TECH 384,000.00
-----------------------
TOTALS $10,094,635.75
=======================
EXHIBIT (c)(2)
BAY VIEW FEDERAL BANK
A Federal Savings Bank
2121 So. El Camino Real
San Mateo, California 94403-1897
February 28, 1997
VIA FAX AND OVERNIGHT MAIL
Fax:(714) 367-1936
Tel: (714) 367-1935
Target Income Fund, Inc.
26691 Plaza Drive, Suite 222
Mission Viejo, California 92961
Attention: Mr. Jon LaVine
Target Capital Advisors, Inc.
Re: Class A Notes ("Class A Notes") issued pursuant to the Pooling
and Servicing Agreement dated as of March 1, 1996 (the "Master
Trust") by and among EXXE Data Corporation ("EXXE"), Concord
Growth Corporation ("Concord") and LaSalle National Bank
("LaSalle").
Ladies/Gentlemen:
As previously advised, we hereby offer to purchase any and all
outstanding Class A Notes held by you at the following purchase price, in cash
in immediately available funds; (a) a base purchase price of $500,000 for the
Class A-3 plus (b) accrued and unpaid interest thereon to but excluding the
Purchase Date (defined below), plus (c) a premium calculated as though the
respective Make-Whole Premium as defined in the Master Trust for such Class A
Note was then applicable.
By accepting this offer, you: agree to sell such Class A Note to us
upon demand to be made on or before March 15, 1997; represent and warrant that
you are the owner of the Class A Note subject to this offer; have the power,
authority and legal right to sell and transfer such Class A Note; and hold such
Class A Note free and clear of all adverse claims, liens and encumbrances.
Further, you hereby agree to convey your original Class A Note to us upon your
receipt of funds as aforesaid (the "Purchase Date"), together with all
endorsements or instruments of transfer as we may reasonably request to vest our
title thereto.
You also hereby acknowledge that the offer contained herein and your
acceptance thereof does not in any way obligate us to purchase the Class A Note
held by you, and that we may withdraw this offer at any time upon notice to you
in the event that we are unable to acquire all of the Notes and Certificates
issued pursuant to the Master Trust and the Certificates issued pursuant to the
Financial Asset Purchase
<PAGE>
February 28, 1997
Page 2
and Servicing Agreement dated as of March 31, 1995 by and among Concord
Warehouse Finance Corp., EXXE, ContiTrade Services L.L.C., as successor in
interest to ContiTrade Services Corporation, Concord and LaSalle.
Very truly yours,
BAY VIEW FEDERAL BANK,
A Federal Savings Bank
By:_______________________________
Name:_____________________________
Title:______________________________
AGREED AND ACCEPTED:
Target Income Fund, Inc.
By:___________________________________________
Name:_________________________________________
Title:__________________________________________
<PAGE>
BAY VIEW FEDERAL BANK,
A Federal Savings Bank
2121 So. El Camino Real
San Mateo, California 94403-1897
February 28, 1997
VIA FAX AND OVERNIGHT MAIL
Fax:(714) 367-1936
Tel: (714) 367-1935
Target Income Fund, Inc.
26691 Plaza Drive, Suite 222
Mission Viejo, California 92961
Attention: Mr. Jon LaVine
Target Capital Advisors, Inc.
Re: Class B Certificates (the "Class B Certificates") issued
pursuant to Owner Trust Agreement dated as of March 1,
1996 among Marine Midland Bank as Owner Trustee, Concord
Finance Corp. in its individual capacity as Transferor
under the Master Trust dated March 1, 1996 by and among
EXXE Data Corporation ("EXXE"), et al and as
representative of itself as one of the Class B Certificate
Holders and the Other Class B Certificate Holders named
therein
Ladies/Gentlemen:
As previously advised, we hereby offer to purchase the Class B
Certificate held by you at a purchase price equal to, in cash in immediately
available funds, (a) $700,000, plus (b) accrued and unpaid interest thereon to
but excluding the Purchase Date (defined below).
By accepting this offer, you: agree to sell such Certificate to us upon
demand to be made on or before March 15, 1997; represent and warrant that you
are the owner of the Certificate subject to this offer; have the power,
authority and legal right to sell and transfer such Certificate; and hold such
Certificate free and clear of all adverse claims, liens and encumbrances.
Further, you hereby agree to convey your original Certificate to us upon your
receipt of funds as aforesaid (the "Purchase Date"), together with all
endorsements or instruments of transfer as we may reasonably request to vest our
title thereto.
You also hereby acknowledge that the offer contained herein and your
acceptance thereof does not in any way obligate us to purchase the Certificate
held by you, and that we may withdraw this offer at any time upon notice to you
in the event that we are unable to acquire all of the Notes and Certificates
issued pursuant to the Master Trust and the Certificates issued pursuant to the
Financial Asset Purchase and Servicing Agreement dated as of March 31, 1995 by
and among Concord Warehouse Finance Corp., EXXE, ContiTrade Services L.L.C., as
successor in interest to ContiTrade Services Corporation, Concord Growth
Corporation and LaSalle National Bank.
<PAGE>
February 28, 1997
Page 2
Very truly yours,
BAY VIEW FEDERAL BANK,
A Federal Savings Bank
By:_______________________________
Name:_____________________________
Title:______________________________
AGREED AND ACCEPTED:
Target Income Fund, Inc.
By:___________________________________________
Name:_________________________________________
Title:__________________________________________
