SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------
SCHEDULE 14D-1
Tender Offer Statement Pursuant to Section 14(d)(1) of the
Securities Exchange Act of 1934
---------------------
SECURITY INVESTMENTS GROUP, INC.
(Names of Subject Company)
---------------------
ALLIANCE STANDARD III L.L.C.
ALLIANCE STANDARD III CORP.
(Bidders)
---------------------
Common Stock, Par Value $.10 Per Share
(Title of Class of Securities)
---------------------
814341103
(CUSIP Number of Class of Securities)
---------------------
Michael L. Lewittes Keith R. Bish
ALLIANCE STANDARD III L.L.C. ALLIANCE STANDARD III CORP.
520 Madison Avenue - 7th Floor c/o International Fund Administration, Ltd.
New York, NY 10022 48 Par-la-Ville Road - Suite 464
Telephone: (212) 826-6805 Hamilton HM11, Bermuda
Telephone: (441)295-4718
with copies to:
Thomas E. Kruger
Battle Fowler LLP
75 East 55th Street
New York, New York 10022
Telephone: (212) 856-7000
(Name, Address and Telephone Number of Persons Authorized to
Receive Notices and Communications on Behalf of Bidders)
CALCULATION OF FILING FEE
- --------------------------------------------------------------------------------
TRANSACTION VALUATION* AMOUNT OF FILING FEE**
$2,000,000 $400
- --------------------------------------------------------------------------------
* Based on the offer to purchase up to 1,000,000 shares of Common Stock of
Security Investments Group, Inc. at $2.00 cash per share.
** 1/50 of 1% of Transaction Value.
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SCHEDULE 14D-1
SECURITY INVESTMENTS GROUP, INC.
This statement on Schedule 14D-1 (this "Statement") relates to the
offer by Alliance Standard III L.L.C. ("Purchaser LLC"), a Delaware limited
liability company wholly-owned by LJ Investments, L.L.C. ("Investments LLC"), a
Delaware limited liability company, and Alliance Standard III Corp. ("Purchaser
Corp.," and collectively with Purchaser LLC, the "Purchasers"), a British Virgin
Islands corporation wholly-owned by LJ Investments Corp. (collectively with
Investments LLC, the "Funds"), a British Virgin Islands corporation, to purchase
up to 1,000,000 shares of Common Stock, par value $.10 per share (the "Shares"),
of Security Investments Group, Inc., a Delaware corporation ( the "Company"), at
a price of $2.00 per Share, net to the seller in cash, upon the terms and
subject to the conditions set forth in the Offer to Purchase dated January 21,
1998 (the "Offer to Purchase"), and in the related Letter of Transmittal, copies
of which are attached hereto as Exhibits (a)(1) and (a)(2), respectively (which
collectively constitute the "Offer"). Notwithstanding the above, the Purchasers
reserve the right to purchase only up to 707,000 Shares if the board of
directors of the Company has not approved the Purchasers' acquisition of Shares
pursuant to this Offer prior to the date that the Purchasers accept for payment
Shares tendered pursuant to this Offer.
ITEM 1. SECURITY AND SUBJECT COMPANY.
(a) The name of the subject company is Security
Investments Group, Inc., a Delaware corporation. The address of the Company's
principal executive offices is 817 Landis Avenue, Vineland, New Jersey 08360, as
reported on the Company's Proxy Statement for the 1996 Annual Meeting of
Stockholders, the most recent filing made by the Company with the Securities and
Exchange Commission (the "Commission").
(b) - (c) The class of securities to which this
statement relates is the Common Stock, par value $.10 per share, of the Company.
The information set forth in the Introduction and Section 6 of the Offer to
Purchase is incorporated herein by reference.
ITEM 2. IDENTITY AND BACKGROUND.
(a) - (d); (g) The information set forth in Section 9
of the Offer to Purchase is incorporated herein by reference. The name, business
address, present principal occupation or employment, the material occupations,
positions, offices or employment for the past five years and citizenship of each
director and executive officer of the Purchasers and the Funds, and the name,
principal business and address of any corporation or other organization in which
such occupations, positions, offices and employments are or were carried on are
set forth in Schedule I of the Offer to Purchase and incorporated herein by
reference.
(e) - (f) During the last five years, none of the
Purchasers or the Funds or, to the best of the Purchasers' respective knowledge,
any of the directors or executive officers of the Purchasers or the Funds has
been convicted in a criminal proceeding
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(excluding traffic violations or similar offenses) or was a party to a civil
proceeding of a judicial or administrative body of competent jurisdiction as a
result of which any such person was or is subject to a judgment, decree or final
order enjoining future violations of, or prohibiting activities subject to,
federal or state securities laws or finding any violation of such law.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH
THE SUBJECT COMPANY.
(a) - (b) Not applicable.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a) The information set forth in Section 10 of the
Offer to Purchase is incorporated herein by reference.
(b) - (c) Not applicable.
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS
OF THE BIDDER.
(a) - (g) The information set forth in the
Introduction and Sections 7 and 11 of the Offer to Purchase is incorporated
herein by reference.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
(a) - (b) The information set forth in Section 9 of
the Offer to Purchase is incorporated herein by reference.
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR
RELATIONSHIPS WITH RESPECT TO THE SUBJECT COMPANY'S
SECURITIES.
The information set forth in the Introduction and
Sections 9,10 and 15 of the Offer to Purchase is incorporated herein by
reference.
ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The information set forth in Section 15 of the Offer
to Purchase is incorporated herein by reference.
ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS.
Not applicable.
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ITEM 10. ADDITIONAL INFORMATION.
(a) Not applicable.
(b) - (c) The information set forth in Section 14 of
the offer to Purchase is incorporated herein by reference.
(d) The information set forth in Section 7 of the
Offer to purchase is incorporated herein by reference.
(e) Not applicable.
(f) The information set forth in the Offer to
Purchase and the Letter of Transmittal, to the extent not otherwise incorporated
herein by reference, is incorporated herein by reference.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit
Number Exhibit
(a)(1) Offer to Purchase, dated January 21, 1998.
(a)(2) Letter of Transmittal with respect to the Shares.
(a)(3) Notice of Guaranteed Delivery
(a)(4) Letter from IBJ Schroder Bank & Trust Company as
depositary agent for the Purchasers to brokers,
dealers, banks, trust companies and nominees.
(a)(5) Letter to be sent by brokers, dealers, banks, trust
companies and nominees to their clients.
(a)(6) IRS Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9.
(a)(7) Summary Advertisement, dated January 21, 1998.
(b) None.
(c)(1) Filing Agreement, dated January 21, 1998, between
Alliance Standard III L.L.C. and Alliance Standard
III Corp.
(c)(2) Agreement, dated December 1, 1997, between JL
Advisors, L.L.C. and Collectible Certificates, L.L.C.
(d) None.
(e) Not applicable.
(f) None.
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SIGNATURES
After due inquiry and to the best of my knowledge and belief,
I certify that the information set forth in this statement is true, complete and
correct.
Dated: January 21, 1998 Alliance Standard III L.L.C.
By: LJ Investments, L.L.C., its managing member
By: JL Advisors II, LLC, its managing member
By: s/ Michael L. Lewittes
----------------------
Michael L. Lewittes,
Member
By: Jaffe Capital Management Group,
LLC, member
By: s/ Robert S. Jaffe
-----------------------------
Robert S. Jaffe, Member
Alliance Standard III Corp.
By: s/Keith R. Bish
-----------------------------
Keith R. Bish, Director
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INDEX OF EXHIBITS
<TABLE>
<CAPTION>
Sequentially
Exhibit Numbered
Number Exhibit Page
--------- --------- ---------------
<S> <C>
(a)(1) Offer to Purchase, dated January 21, 1998.
(a)(2) Letter of Transmittal with respect to the Shares.
(a)(3) Notice of Guaranteed Delivery.
(a)(4) Letter from IBJ Schroder Bank & Trust Company as
depositary agent for the Purchasers to brokers, dealers,
banks, trust companies and nominees.
(a)(5) Letter to be sent by brokers, dealers, banks, trust
companies and nominees to their clients.
(a)(6) IRS Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9.
(a)(7) Summary Advertisement, dated January 21, 1998.
(b) None.
(c)(1) Filing Agreement, dated January 21, 1998, between
Alliance Standard III L.L.C. and Alliance Standard III Corp.
(c)(2) Agreement, dated December 1, 1997, between JL
Advisors, L.L.C. and Collectible Certificates, L.L.C.
(d) None.
(e) Not applicable
(f) None.
</TABLE>
6
ALLIANCE STANDARD III L.L.C. ALLIANCE STANDARD III CORP.
520 Madison Avenue c/o International Fund Administration, Ltd.
7th Floor 48 Par-la-Ville Road, Suite 464
New York, NY 10022 Hamilton HM11, Bermuda
Attention: Michael L. Lewittes
Telephone: (212) 826-6805
January 21, 1998
DEAR HOLDERS OF COMMON STOCK OF
SECURITY INVESTMENTS GROUP, INC.:
Alliance Standard III L.L.C. and Alliance Standard III Corp.
(collectively, the "Purchasers") are offering to purchase (the "Offer") up to
1,000,000 shares of Common Stock, par value $.10 per share (the "Shares") of
Security Investments Group, Inc., a Delaware corporation (the "Company") for a
price of $2.00 per Share. Notwithstanding the foregoing, the Purchasers reserve
the right to purchase only up to 707,000 Shares if the board of directors of the
Company has not approved the Purchasers' acquisition of Shares pursuant to this
Offer prior to the date that the Purchasers accept for payment Shares tendered
pursuant to this Offer.
A copy of the offering materials is enclosed. The Purchasers believe,
in addition to the other information contained in the accompanying Offer to
Purchase, you should consider the following:
o ALL CASH OFFER
The Purchasers are offering to pay $2.00 IN CASH PER SHARE FOR UP TO
1,000,000 SHARES (707,000 Shares if the board of directors of the
Company has not approved the Purchasers' acquisition of Shares
pursuant to this Offer) if tendered in response to the Offer.
o ILLIQUID MARKET FOR SHARES
According to the Company's 1996 Proxy Statement, the Shares were
removed from quotation on the Nasdaq National Market and are currently
traded over-the-counter and reported by Bloomberg, L.P. THE MOST
RECENTLY- REPORTED TRADING PRICE PER SHARE BY BLOOMBERG, L.P. WAS $2
1/8 ON JANUARY 16, 1998, AT A VOLUME OF 1,800 SHARES. Accordingly, the
Offer affords you the opportunity to dispose of your Shares for cash
which otherwise might not be an option available to you, due to the
illiquid market for the Shares.
o NO COMMISSION; NO FINANCING CONDITION
The $2.00 per Share purchase price will be ALL CASH, WITHOUT COMMISSION
OR OTHER COSTS TO ANY HOLDER who tenders his, her or its shares. ALL
COSTS AND COMMISSIONS WILL BE BORNE BY PURCHASERS. Purchasers
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have committed funds available to pay for up to 1,000,000 Shares that
are tendered and accepted for payment in response to the Offer. The
Offer is not subject to financing.
o POTENTIAL TAX ADVANTAGES
If you originally paid more than $2.00 per Share, you may be able to
recognize a tax loss on the sale of Shares to the Purchasers. This tax
loss could be of substantial benefit to you. You may be able to use
these losses to offset capital gains realized on other investments or
to offset ordinary income up to an annual deduction limitation of
$3,000. EACH HOLDER OF SHARES SHOULD CONSULT HIS, HER OR ITS OWN TAX
ADVISER CONCERNING THE TAX CONSEQUENCES OF ACCEPTING THIS OFFER TO
PURCHASE.
IN DECIDING WHETHER OR NOT TO ACCEPT PURCHASERS' OFFER TO PURCHASE YOUR SHARES,
WHICH WOULD TERMINATE ANY RIGHTS YOU MAY HAVE AS A HOLDER OF ANY SHARES ACCEPTED
FOR PAYMENT AND PAID FOR PURSUANT TO THE OFFER, YOU SHOULD CONSIDER CAREFULLY
ALL OF THE ACCOMPANYING MATERIALS AND SHOULD REVIEW THESE MATERIALS WITH YOUR
BROKER OR OTHER FINANCIAL ADVISER.
Sincerely,
Alliance Standard III L.L.C.
Alliance Standard III Corp.
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PROCEDURE TO ACCEPT THE OFFER
IF YOU WISH TO ACCEPT THIS OFFER AND WISH TO TENDER ALL OR ANY PORTION OF YOUR
SHARES, YOU SHOULD FOLLOW ONE OF THESE TWO PROCEDURES:
(1) IF YOU OWN YOUR SHARES IN CERTIFICATE FORM: You should complete and sign the
enclosed BLUE Letter of Transmittal in accordance with the instructions in such
Letter of Transmittal and mail or deliver the BLUE Letter of Transmittal
together with your stock certificate(s), and any other required documents to the
Depositary in the enclosed, postage-paid, addressed envelope.
(2) IF YOU HOLD YOUR SHARES IN A BROKER, DEALER, BANK, TRUST OR OTHER NOMINEE
ACCOUNT: You should contact your broker, dealer, bank, trust or nominee
representative and request that they tender the Shares on your behalf.
IF YOU HAVE ANY QUESTIONS
Questions and requests for assistance (including if you are unable to locate
your stock certificates or deliver them prior to the Expiration Date) may be
directed to MacKenzie Partners, Inc., the Information Agent, at its address and
telephone number set forth below. Additional copies of the Offer to Purchase,
the Letter of Transmittal, the Notice of Guaranteed Delivery and other related
materials may be obtained from the Information Agent or from brokers, dealers,
commercial banks and trust companies.
The Information Agent for the Offer is:
MacKenzie
Partners, Inc.
156 Fifth Avenue
New York, New York 10010
(212)929-5500 (Call Collect)
or
Call Toll-Free (800)322-2885
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OFFER TO PURCHASE FOR CASH
UP TO 1,000,000 OUTSTANDING SHARES OF COMMON STOCK, $.10 PAR VALUE
OF
SECURITY INVESTMENTS GROUP, INC.
AT A PRICE OF
$2.00 NET PER SHARE,
BY
ALLIANCE STANDARD III L.L.C. AND ALLIANCE STANDARD III CORP.
- --------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON TUESDAY, FEBRUARY 24, 1998, UNLESS THE OFFER IS
EXTENDED.
- --------------------------------------------------------------------------------
THE OFFER IS SUBJECT TO THE TERMS AND CONDITIONS CONTAINED IN THIS
OFFER TO PURCHASE. SEE SECTION 13. THE OFFER IS NOT CONDITIONED UPON THE RECEIPT
OF FINANCING OR ANY MINIMUM NUMBER OF SHARES OF COMMON STOCK, PAR VALUE $.10 OF
SECURITY INVESTMENTS GROUP, INC. (THE "SHARES") BEING TENDERED.
NOTWITHSTANDING THE FOREGOING, THE PURCHASERS RESERVE THE RIGHT TO
PURCHASE ONLY UP TO 707,000 SHARES IF THE BOARD OF DIRECTORS OF THE COMPANY HAS
NOT APPROVED, WITHIN THE MEANING OF S.203 OF THE DELAWARE GENERAL CORPORATION
LAW (THE "DGCL") ON TERMS SATISFACTORY TO THE PURCHASERS IN THEIR SOLE
DISCRETION, THE PURCHASERS' ACQUISITION OF SHARES PURSUANT TO THIS OFFER PRIOR
TO THE DATE THAT THE PURCHASERS ACCEPT FOR PAYMENT SHARES TENDERED PURSUANT TO
THIS OFFER.
---------------------
IMPORTANT
---------------------
Any holder of Shares desiring to tender all or any portion of
such holder's Shares should either:
1. Complete and sign the Letter of Transmittal (or a facsimile thereof)
relating to the Shares tendered in accordance with the instructions in the
Letter of Transmittal, have such holder's signature thereon guaranteed if
required by Instruction 1 to the Letter of Transmittal, mail or deliver the
Letter of Transmittal (or facsimile), or, in the case of a book-entry transfer
effected pursuant to the procedure set forth in Section 2, an Agent's Message
(as defined herein) and any other required documents to the Depositary and
either deliver the certificates for such Shares to the Depositary along with the
Letter of Transmittal (or facsimile) or deliver Shares pursuant to the procedure
for book-entry transfer set forth in Section 2, or
2. Request such shareholder's broker, dealer, commercial bank, trust
company or other nominee to effect the transaction for such holder.
A holder having Shares registered in the name of a broker,
dealer, commercial bank, trust company or other nominee MUST contact such
broker, dealer, commercial bank, trust company or other nominee if such holder
desires to tender such Shares.
If a holder desires to tender Shares and (i) such holder's
certificates for Shares are not immediately available, or (ii) the procedure for
book-entry transfer cannot be completed on a timely basis, or (iii) time will
not permit all required documents to reach
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the Depositary prior to the Expiration Date, such holder's tender may be
effected by following the procedure for guaranteed delivery set forth in Section
2.
Questions and requests for assistance may be directed to
MacKenzie Partners, Inc., the Information Agent, at its address and telephone
numbers set forth below and on the back cover of this Offer to Purchase.
Additional copies of this Offer to Purchase, the Letter of Transmittal, the
Notice of Guaranteed Delivery and other related materials may be obtained from
the Information Agent or from brokers, dealers, commercial banks and trust
companies.
The Information Agent for the Offer is:
MacKenzie
Partners, Inc.
(212)929-5500 (Call Collect)
or
Call Toll-Free (800)322-2885
January 21, 1998
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TABLE OF CONTENTS
INTRODUCTION...................................................................1
THE TENDER OFFER...............................................................2
SECTION 1. TERMS OF THE OFFER...........................................2
SECTION 2. PROCEDURES FOR TENDERING SHARES..............................5
SECTION 3. WITHDRAWAL RIGHTS............................................9
SECTION 4. ACCEPTANCE FOR PAYMENT AND PAYMENT..........................10
SECTION 5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES.....................12
SECTION 6. PRICE RANGE OF SHARES; DIVIDENDS ON THE SHARES..............13
SECTION 7. EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES;
EXCHANGE ACT REGISTRATION; MARGIN
REGULATIONS........................................14
SECTION 8. CERTAIN INFORMATION CONCERNING THE COMPANY..................15
SECTION 9. CERTAIN INFORMATION CONCERNING THE PURCHASERS AND THE
FUNDS..............................................20
SECTION 10. SOURCE AND AMOUNT OF FUNDS..................................22
SECTION 11. PURPOSE OF THE OFFER........................................23
SECTION 12. DIVIDENDS AND DISTRIBUTIONS.................................23
SECTION 13. CERTAIN CONDITIONS OF THE OFFER.............................24
SECTION 14. CERTAIN LEGAL MATTERS.......................................27
SECTION 15. FEES AND EXPENSES...........................................29
SECTION 16. MISCELLANEOUS...............................................30
SCHEDULE I DIRECTORS AND EXECUTIVE OFFICERS OF THE PURCHASERS.........S-1
ANNEX A CERTAIN SELECTED FINANCIAL INFORMATION REGARDING SECURITY
INVESTMENTS GROUP, INC. (THE "COMPANY"), EXCERPTED FROM THE
COMPANY'S QUARTERLY REPORT ON FORM 10-Q FOR THE FISCAL
QUARTER ENDED SEPTEMBER 30, 1995.
ANNEX B CERTAIN FINANCIAL INFORMATION REGARDING SECURITY SAVINGS
BANK, SLA, PREPARED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION.
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To the Holders of Shares of Common Stock
of Security Investments Group, Inc.:
INTRODUCTION
Alliance Standard III L.L.C. ("Purchaser L.L.C."), a Delaware
limited liability company wholly owned by LJ Investments, L.L.C. ("Investments
LLC"), a Delaware limited liability company, and Alliance Standard III Corp.
("Purchaser Corp.," and collectively with Purchaser LLC, the "Purchasers"), a
British Virgin Islands corporation wholly owned by LJ Investments Corp.
("Investments Corp." and collectively with Investments LLC, the "Funds"), a
British Virgin Islands corporation, hereby offer to purchase up to 1,000,000
outstanding shares of Common Stock, par value $.10 per share (the "Shares") of
Security Investments Group, Inc., a Delaware corporation (the "Company"), at a
price of $2.00 per Share, net to the seller in cash, without interest thereon
(the "Offer Price"), upon the terms and subject to the conditions set forth in
this Offer to Purchase and in the related Letter of Transmittal (which, as
amended from time to time, collectively constitute the "Offer"). Notwithstanding
the foregoing, the Purchasers reserve the right to purchase only up to 707,000
Shares if the board of directors of the Company has not approved, within the
meaning of S.203 of the Delaware General Corporation Law (the "DGCL") on terms
satisfactory to the Purchasers in their sole discretion, the Purchasers'
acquisition of Shares pursuant to this Offer prior to the date that the
Purchasers accept for payment Shares tendered pursuant to this Offer.
The Purchasers believe that the Shares are registered under
Section 12(g) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), based upon their review of available filings made by the Company with the
Securities and Exchange Commission (the "Commission"). The information
concerning the Company contained in this Offer to Purchase has been taken from
or based upon publicly available documents on file with the Commission and other
publicly available information. Although the Purchasers do not have any
knowledge that any such information is untrue, the Purchasers take no
responsibility for the accuracy or completeness of such information or for any
failure by the Company to disclose events that may have occurred or may affect
the significance or accuracy of any such information.
The Purchasers will pay soliciting dealer's fees of $0.20 per
Share to brokers, dealers and other persons for soliciting tenders of Shares
from their clients pursuant to the Offer. In addition, brokers, dealers,
commercial banks and trust companies and other nominees will, upon request, be
reimbursed by the Purchasers for customary clerical and mailing expenses
incurred by them in forwarding offering materials to their clients. Tendering
holders will not be obligated to pay brokerage fees or commissions. Except as
set forth in Instruction 6 of the Letter of Transmittal, tendering holders will
not be obligated to pay transfer taxes on the purchase of Shares pursuant to the
Offer. The Purchasers will pay all charges and expenses of IBJ Schroder Bank &
Trust Company, as Depositary (the "Depositary"), and MacKenzie Partners, Inc.,
as Information Agent (the "Information Agent"), incurred in connection with the
Offer. See Section 15.
The Purchasers' purpose in making the Offer is to make,
through the purchase of Shares, a speculative investment in any surplus or
excess funds remaining after the outcome of all litigation and satisfaction of
all liabilities of Security Savings Bank, SLA, a savings bank that was chartered
under the laws of the State of New Jersey, and
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which was a wholly owned subsidiary of the Company and the Company's principal
asset ("Security Savings"). Security Savings was placed into receivership by the
Office of Thrift Supervision (the "OTS") on December 4, 1992. By tendering
Shares pursuant to the Offer, holders of Shares will relinquish any and all
rights, as holders of those Shares tendered, to share in any such surplus or
excess funds, including any distributions from the Federal Deposit Insurance
Corporation (the "FDIC"). The Company and Security Savings no longer operate an
ongoing business and, to Purchasers' knowledge, Security Savings no longer has a
Board of Directors or management. The Purchasers have no current plans or
proposals that would result in an extraordinary corporate transaction, such as a
merger, reorganization or liquidation involving the Company (other than the
distribution to the holders of the Shares of funds, if any, received from the
FDIC by the Company in accordance with the charter documents and other
instruments defining the rights of securities holders, and the applicable rules
of the FDIC with respect to priorities of distributions by receivers of failed
institutions), a sale or transfer of any material amount of assets of the
Company, any change in the Board of Directors or management of the Company, any
change in the capitalization or dividend policy of the Company, or any other
change in the Company's corporate structure or business.
Certain federal income tax consequences of the sale of Shares
pursuant to the Offer are described in Section 5.
THE OFFER IS NOT CONDITIONED UPON THE RECEIPT OF FINANCING OR
ANY MINIMUM NUMBER OF SHARES BEING TENDERED.
Certain conditions to this Offer are described in Section 13.
The Purchasers expressly reserve the right, in their sole discretion, to waive
any one or more of the conditions to the Offer. See Sections 1, 13 and 14.
THIS OFFER TO PURCHASE AND THE 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
extension or amendment), the Purchasers will accept for payment and pay for up
to 1,000,000 Shares, which are validly tendered and not withdrawn prior to the
Expiration Date and not theretofore withdrawn in accordance with Section 3. The
term "Expiration Date" means 12:00 Midnight, New York City time, on Tuesday,
February 24, 1998, unless and until the Purchasers, in their sole discretion,
shall have extended the period of time during which the Offer is open, in
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which event the term "Expiration Date" shall mean the latest time and date at
which the Offer, as so extended by the Purchasers, will expire. Notwithstanding
the foregoing, the Purchasers reserve the right to purchase only up to 707,000
Shares if the board of directors of the Company has not approved, within the
meaning of S.203 of the DGCL on terms satisfactory to the Purchasers in their
sole discretion, the Purchasers' acquisition of Shares pursuant to this Offer
prior to the date that the Purchasers accept for payment Shares tendered
pursuant to this Offer.
The Purchasers expressly reserve the right, in their sole
discretion, at any time or from time to time, regardless of whether or not any
of the events set forth in Section 13 shall have occurred or shall have been
determined by the Purchasers to have occurred, (i) to extend the period of time
during which the Offer is open and thereby delay acceptance for payment of, and
the payment for, any Shares, by giving oral or written notice of such extension
to the Depositary, and (ii) to amend the Offer in any respect by giving oral or
written notice of such amendment to the Depositary. The rights reserved by the
Purchasers in this paragraph are in addition to the Purchasers' rights to
terminate the Offer pursuant to Section 13. UNDER NO CIRCUMSTANCES WILL INTEREST
BE PAID ON THE PURCHASE PRICE FOR TENDERED SHARES, WHETHER OR NOT THE PURCHASERS
EXERCISE THEIR RIGHT TO EXTEND THE OFFER.
If by 12:00 Midnight, New York City time, on Tuesday,
February 24, 1998 (or any date or time then set as the Expiration Date), any or
all of the conditions to the Offer have not been satisfied or waived, the
Purchasers reserve the right (but shall not be obligated), subject to the
applicable rules and regulations of the Commission, to (a) terminate the Offer
and not accept for payment or pay for any Shares and return all tendered Shares
to tendering holders, (b) waive all the unsatisfied conditions and accept for
payment and pay for all Shares validly tendered prior to the Expiration Date and
not theretofore withdrawn, up to the maximum amount of Shares under the Offer,
(c) extend the Offer and, subject to the right of holders to withdraw Shares
until the Expiration Date, retain the Shares that have been tendered during the
period or periods for which the Offer is extended, or (d) amend the Offer.
There can be no assurance that the Purchasers will exercise
their right to extend the Offer. Any extension, amendment or termination will be
followed as promptly as practicable by public announcement. In the case of an
extension, Rule 14e-1(d) under the Exchange Act requires that the announcement
be issued no later than 9:00 a.m., New York City time, on the next business day
after the previously scheduled Expiration Date in accordance with the public
announcement requirements of Rule 14d-4(c) under the Exchange Act. Subject to
applicable law (including Rules 14d-4(c) and 14d-6(d) under the Exchange Act,
which require that any material change in the information published, sent or
given to holders in connection with the Offer be promptly disseminated to
holders in a manner reasonably designed to inform holders of such change), and
without limiting the manner in which the Purchasers may choose to make any
public announcement, the Purchasers will not have any obligation to publish,
advertise or otherwise communicate any such public announcement other than by
making a release to the Dow Jones News Service. As used in this Offer to
Purchase, "business day" has the meaning set forth in Rule 14d-1 under the
Exchange Act.
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If the Purchasers extend the Offer, or if the Purchasers
(whether before or after acceptance for payment of Shares) are delayed in their
acceptance for payment of or payment for Shares or are unable to pay for Shares
pursuant to the Offer for any reason, then, without prejudice to the Purchasers'
rights under the Offer, the Depositary may retain tendered Shares on behalf of
the Purchasers, and such Shares may not be withdrawn except to the extent
tendering holders are entitled to withdrawal rights as described in Section 3.
However, the ability of the Purchasers to delay the payment for Shares which the
Purchasers have accepted for payment is limited by Rule 14e-l(c) under the
Exchange Act, which requires that a bidder pay the consideration offered or
return the securities deposited by or on behalf of holders of securities
promptly after the termination or withdrawal of the Offer.
If the Purchasers make a material change in the terms of the
offer or the information concerning the Offer or waive a material condition of
the Offer, the Purchasers will disseminate additional tender offer materials and
extend the Offer to the extent required by Rules 14d-4(c), 14d-6(d) and 14(e)-1
under the Exchange Act. The minimum period during which the Offer must remain
open following material changes in the terms of the Offer or information
concerning the Offer, other than a change in price or a change in percentage of
securities sought, will depend upon the facts and circumstances then existing,
including the relative materiality of the terms or information. With respect to
a change in price or a change in percentage of securities sought, a minimum ten
business day period is generally required to allow for adequate dissemination to
holders and investor response. If, prior to the Expiration Date, the Purchasers
should decide to increase the price per Share being offered in the Offer, such
increase will be applicable to all holders whose Shares are accepted for payment
pursuant to the Offer.
A request is being made to the Company pursuant to Rule 14d-5
of the Exchange Act for the use of the Company's stockholder lists and security
position listings for the purpose of disseminating the Offer to holders of
Shares. Upon the Company's decision to provide such lists or to mail this Offer
to Purchase, the related Letter of Transmittal and other relevant materials at
the Purchasers' expense, this Offer to Purchase, the related Letter of
Transmittal and other relevant materials will be mailed to record holders of
Shares, and will be furnished to brokers, dealers, banks, trust companies and
similar persons whose names, or the names of whose nominees, appear on the
stockholder lists, or, if applicable, who are listed as participants in a
clearing agency's security position listing, for subsequent transmittal to
beneficial owners of Shares, by the Purchasers following receipt of such lists
or listings from the Company, or by the Company if it so elects. However, there
can be no assurance that the Company will respond to such request, and if the
Company fails to respond to such request, the Purchasers may be unable to mail
such materials directly to such record holders.
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2. PROCEDURES FOR TENDERING SHARES
Valid Tender. For a holder to validly tender Shares pursuant
to the Offer, either (A) a properly completed and duly executed Letter of
Transmittal (or facsimile thereof) relating to the Shares tendered, together
with any required signature guarantees, or, in the case of a book-entry
transfer, an Agent's Message (as defined below), and any other required
documents, must be received by the Depositary at one of its addresses set forth
on the back cover of this Offer to Purchase prior to the Expiration Date and
certificates for tendered Shares ("Share Certificates") must be received by the
Depositary at one of such addresses, or such Shares must be delivered pursuant
to the procedures for book-entry transfer set forth below (and a Book-Entry
Confirmation (as defined below) received by the Depositary), in each case prior
to the Expiration Date, or (B) the tendering holder must comply with the
guaranteed delivery procedures set forth below.
Book-Entry Transfer. The Depositary will establish accounts
with respect to the Shares at The Depository Trust Company (the "Book-Entry
Transfer Facility") for purposes of the Offer within two business days after the
date of this Offer to Purchase. Any financial institution that is a participant
in the Book-Entry Transfer Facility's systems may make book-entry delivery of
Shares by causing the Book-Entry Transfer Facility to transfer such Shares into
the Depositary's account in accordance with the 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 the
Book-Entry Transfer Facility, the Letter of Transmittal (or facsimile thereof),
properly completed and duly executed, with any required signature guarantees, or
an Agent's Message (as defined below), and any other required documents, must,
in any case, be transmitted to, and received by, the Depositary at one of its
addresses set forth on the back cover of this Offer to Purchase prior to the
Expiration Date, or the tendering holder must comply with the guaranteed
delivery procedures described below. The confirmation of a book-entry transfer
of Shares into the Depositary's account at the Book-Entry Transfer Facility as
described above is referred to herein as a "Book-Entry Confirmation." DELIVERY
OF DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY IN ACCORDANCE WITH THE
BOOK-ENTRY TRANSFER FACILITY'S PROCEDURES DOES NOT CONSTITUTE DELIVERY TO THE
DEPOSITARY. DELIVERY TO THE DEPOSITARY IS ACCOMPLISHED ONLY WHEN ALL REQUIRED
MATERIALS ARE RECEIVED BY THE DEPOSITARY.
The term "Agent's Message" means a message transmitted by the
Book-Entry Transfer Facility to, and received by, the Depositary and forming a
part of a Book-Entry Confirmation, which states that the Book-Entry Transfer
Facility has received an express acknowledgment from the participant in the
Book-Entry Transfer Facility that such participant has received and agrees to be
bound by the terms of the Letter of Transmittal and that the Purchasers may
enforce such agreement against such participant.
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THE METHOD OF DELIVERY OF SHARE CERTIFICATES, THE LETTER OF
TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE
BOOK-ENTRY TRANSFER FACILITY, IS AT THE ELECTION AND RISK OF THE TENDERING
HOLDER. SHARE CERTIFICATES, THE LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED
DOCUMENTS WILL BE DEEMED DELIVERED ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY
(INCLUDING, IN THE CASE OF A BOOK-ENTRY TRANSFER, BY BOOK-ENTRY CONFIRMATION).
IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY
INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO
ENSURE TIMELY DELIVERY.
Signature Guarantees. No signature guarantee is required on a
Letter of Transmittal (a) if the Letter of Transmittal is signed by the
registered holder (which term, for purposes of this Section, includes any
participant in the Book-Entry Transfer Facilities' systems whose name appears on
a security position listing as the owner of the Shares) of Shares tendered
therewith and such registered holder has not completed either the box entitled
"Special Delivery Instructions" or the box entitled "Special Payment
Instructions" on the Letter of Transmittal or (b) if such Shares are tendered
for the account of a financial institution (including most commercial banks,
savings and loan associations and brokerage houses) that is a participant in the
Securities Transfer Agents Medallion Program, the New York Stock Exchange
Medallion Signature Guarantee Program or the Stock Exchange Medallion Program
(an "Eligible Institution"). In all other cases, all signatures on a Letter of
Transmittal must be guaranteed by an Eligible Institution. See Instructions 1
and 5 to the Letter of Transmittal. If Share Certificates are registered in the
name of a person other than the signer of a Letter of Transmittal, or if payment
is to be made or Share Certificates for Shares not tendered or not accepted for
payment are to be returned to a person other than the registered holder of the
Share Certificates surrendered, the tendered Share Certificates must be endorsed
or accompanied by appropriate stock powers, in either case signed exactly as the
name or names of the registered holders appear on the Share Certificates, with
the signatures on the Share Certificates or stock powers guaranteed as described
above. See Instructions 1 and 5 to the Letter of Transmittal.
Guaranteed Delivery. If a holder desires to tender Shares
pursuant to the Offer and such holder's Share Certificates are not immediately
available or the procedure for book-entry transfer cannot be completed on a
timely basis or time will not permit all required documents to reach the
Depositary prior to the Expiration Date, such holder's tender may be effected if
all the following conditions are met:
(i) the tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of
Guaranteed Delivery, substantially in the form provided by the
Purchasers, is received by the Depositary, as provided below, prior to
the Expiration Date; and
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(iii) the Share Certificates representing all tendered Shares,
in proper form for transfer (or a Book-Entry Confirmation with respect
to all such Shares), together with a properly completed and duly
executed Letter of Transmittal (or facsimile thereof), with any
required signature guarantees, or, in the case of a book-entry
transfer, an Agent's Message, and any other required documents are
received by the Depositary within three New York Stock Exchange trading
days after the date of execution of such Notice of Guaranteed Delivery.
A Notice of Guaranteed Delivery may be delivered by hand to
the Depositary or transmitted by telegram, facsimile transmission or mail to the
Depositary and must include a guarantee by an Eligible Institution in the form
set forth in such Notice of Guaranteed Delivery.
Notwithstanding any other provision hereof, payment for
Shares accepted for payment pursuant to the Offer will in all cases be made only
after timely receipt by the Depositary of (a) Share Certificates for such Shares
(or a timely Book-Entry Confirmation with respect thereto), (b) a Letter of
Transmittal (or facsimile thereof) relating to the Shares tendered, properly
completed and duly executed, with any required signature guarantees, or, in the
case of a book-entry transfer, an Agent's Message, and (c) any other documents
required by the Letter of Transmittal. Accordingly, tendering holders may be
paid at different times depending upon when Share Certificates or Book-Entry
Confirmations with respect to Shares are actually received by the Depositary.
UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON THE PURCHASE PRICE OF THE SHARES
TO BE PAID BY THE PURCHASERS, REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY
DELAY IN MAKING SUCH PAYMENT.
The Purchasers' acceptance for payment of Shares validly
tendered pursuant to the Offer will constitute a binding agreement between the
tendering holder and the Purchasers upon the terms and subject to the conditions
of the Offer.
Appointment as Proxy. By executing a Letter of Transmittal as
set forth above, a tendering holder irrevocably appoints designees of the
Purchasers as such holder's attorneys-in-fact and proxies in the manner set
forth in the Letter of Transmittal, each with full power of substitution, to the
full extent of such holder's rights with respect to the Shares tendered by such
holder and accepted for payment by the Purchasers (and any and all other Shares
or other securities issued or issuable in respect of such Shares). All such
proxies will be irrevocable and considered coupled with an interest in the
tendered Shares. Such appointment will be effective when, and only to the extent
that, the Purchasers accept such Shares for payment pursuant to the Offer. Upon
such acceptance for payment, all prior powers of attorney, proxies and consents
given by such holder with respect to such Shares or other securities will,
without further action, be revoked and no subsequent powers of attorney,
proxies, consents or revocations may be given (and, if given, will not be deemed
effective). The designees of the Purchasers will thereby be empowered to
exercise all voting and other rights with respect to such Shares and other
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<PAGE>
securities in respect of any annual, special, adjourned or postponed meeting of
the Company's shareholders, actions by written consent in lieu of any such
meeting or otherwise, as they in their sole discretion deem proper. The
Purchasers reserve the right to require that, in order for Shares to be deemed
validly tendered, immediately upon the Purchasers' acceptance for payment of
such Shares, the Purchasers must be able to exercise full voting, consent and
other rights with respect to such Shares and other securities or rights,
including voting at any meeting of shareholders.
Determination of Validity. All questions as to the validity,
form, eligibility (including time of receipt) and acceptance for payment of any
tender of Shares will be determined by the Purchasers, in their sole discretion,
whose determination will be final and binding on all parties. The Purchasers
reserve the absolute right to reject any or all tenders determined by them not
to be in proper form or the acceptance for payment of or payment for which may,
in the opinion of the Purchasers' counsel, be unlawful. The Purchasers also
reserve the absolute right to waive any defect or irregularity in the tender of
any Shares of any particular holder whether or not similar defects or
irregularities are waived in the case of other holders, as determined by the
Purchasers. No tender of Shares will be deemed to have been validly made until
all defects or irregularities relating thereto have been cured or waived, as
determined by the Purchasers. None of the Purchasers, the Depositary, the
Information Agent or any other person will be under any duty to give
notification of any defects or irregularities in tenders or incur any liability
for failure to give any such notification. The Purchasers' interpretation of the
terms and conditions of the Offer (including the Letter of Transmittal and the
instructions thereto) will be final and binding on all parties.
Backup Withholding. In order to avoid "backup withholding" of
federal income tax on payments of cash pursuant to the Offer, a holder
surrendering Shares in the Offer must, unless an exemption applies, provide the
Depositary with such shareholder's correct taxpayer identification number
("TIN") on a Substitute Form W-9 and certify under penalties of perjury that
such TIN is correct and that such holder is not subject to backup withholding.
If a holder does not provide such holder's correct TIN or fails to provide the
certifications described above, the Internal Revenue Service (the "IRS") may
impose a penalty on such holder and the payment of cash to such holder pursuant
to the Offer may be subject to backup withholding of 31% of the amount of such
payment. All holders surrendering Shares pursuant to the Offer should complete
and sign the main signature form and the Substitute Form W-9 included as part of
the Letter of Transmittal to provide the information and certification necessary
to avoid backup withholding (unless an applicable exemption exists and is proved
in a manner satisfactory to the Purchasers and the Depositary). Noncorporate
foreign shareholders should complete and sign the main signature form and a Form
W-8, Certificate of Foreign Status, a copy of which may be obtained from the
Depositary, in order to avoid backup withholding. See Instruction 10 to the
Letter of Transmittal.
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<PAGE>
Lost Share Certificates. If the Share Certificates which a
registered holder wants to surrender have been lost or destroyed, that fact
should be indicated in the appropriate space on the Letter of Transmittal.
Certain representations and agreements contained in the Letter of Transmittal
are required to be made by tendering holders who have lost their Share
Certificates. In addition, the Information Agent or Depositary may forward to
such registered holders additional documentation necessary to be completed in
order to effectively surrender such lost or destroyed certificates. See
Instruction 11 to the Letter of Transmittal. All questions as to the validity,
form, eligibility (including time of receipt) and acceptance for payment of any
tender of Shares will be determined by the Purchasers, in their sole discretion,
whose determination will be final and binding on all parties.
3. WITHDRAWAL RIGHTS
Except as otherwise provided in this Section 3, tenders of
Shares pursuant to the Offer are irrevocable. Shares tendered pursuant to the
Offer may be withdrawn pursuant to the procedures set forth below at any time
prior to the Expiration Date and, unless theretofore accepted for payment and
paid for by the Purchasers pursuant to the Offer, may also be withdrawn at any
time after March 26, 1998 (or such later date as may apply in case the Offer is
extended).
For a withdrawal to be effective, a written, telegraphic or
facsimile transmission notice of withdrawal must be timely received by the
Depositary at one of its addresses set forth on the back cover of this Offer to
Purchase and must specify the name of the person having tendered the Shares to
be withdrawn, the number of Shares to be withdrawn and the name of the
registered holder of the Shares to be withdrawn, if different from the name of
the person who tendered the Shares. If Share Certificates have been delivered or
otherwise identified to the Depositary, then, prior to the physical release of
such Share Certificates, the serial numbers shown on such Share Certificates
must be submitted to the Depositary and, unless such Shares have been tendered
by an Eligible Institution, the signatures on the notice of withdrawal must be
guaranteed by an Eligible Institution. If Shares have been delivered pursuant to
the procedure for book-entry transfer as set forth in Section 2, any notice of
withdrawal must also specify the name and number of the account at the
Book-Entry Transfer Facility to be credited with the withdrawn Shares and
otherwise comply with the Book-Entry Transfer Facility's procedures.
Withdrawals of tenders of Shares may not be rescinded, and any
Shares properly withdrawn will thereafter be deemed not validly tendered for
purposes of the Offer. However, withdrawn Shares may be retendered by again
following one of the procedures described in Section 2 at any time prior to the
Expiration Date.
All questions as to the form and validity (including time of
receipt) of notices of withdrawal will be determined by the Purchasers, in their
sole discretion, whose determination will be final and binding on all parties.
None of the Purchasers, the
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Depositary, the Information Agent or any other person will be under any duty to
give notification of any defects or irregularities in any notice of withdrawal
or incur any liability for failure to give any such notification.
4. ACCEPTANCE FOR PAYMENT AND PAYMENT
If more than 1,000,000 Shares are validly tendered on or prior
to the Expiration Date and not properly withdrawn on or prior to the Expiration
Date, the Purchasers will only accept for purchase, upon the terms and subject
to the conditions of the Offer, and pay for, an aggregate of 1,000,000 Shares so
tendered, pro rata according to the number of Shares validly tendered and not
properly withdrawn on or prior to the Expiration Date. If the number of Shares
validly tendered and not properly withdrawn on or prior to the Expiration Date
is less than or equal to 1,000,000 Shares (or less than or equal to 707,000
Shares if the Purchasers exercise their right to purchase only up to 707,000
Shares), the Purchasers will purchase all Shares so tendered and not properly
withdrawn, upon the terms and subject to the conditions of the Offer. The
Purchasers have reserved the right to purchase only up to 707,000 Shares if the
board of directors of the Company has not approved the Purchasers' acquisition
of Shares pursuant to this Offer. If the Purchasers exercise their right to
purchase only up to 707,000 Shares, the proration of tenders in excess of such
amount will be based upon 707,000 Shares.
If proration of tendered Shares is required, and because of
the difficulty of determining the proration results, the Purchasers may not be
able to announce the final results of such proration until approximately seven
business days after the Expiration Date. Subject to the Purchasers' obligation
under Rule 14e-1(c) under the Exchange Act to pay holders of Shares the Purchase
Price in respect of Shares tendered or return those Shares promptly after the
termination or withdrawal of the Offer, the Purchasers do not intend to pay for
any Shares accepted for payment pursuant to the Offer until the final proration
results are known.
Upon the terms and subject to the conditions of the Offer
(including, if the Offer is extended or amended, the terms and conditions of any
such extension or amendment), the Purchasers will accept for payment and will
pay for up to 1,000,000 Shares, validly tendered and not properly withdrawn in
accordance with Section 3 promptly after the Expiration Date. All questions as
to the satisfaction of such terms and conditions will be determined by the
Purchasers, in their sole discretion, whose determination will be final and
binding on all parties. See Sections 1 and 13. The Purchasers expressly reserve
the right, in their sole discretion, to delay acceptance for payment of or
payment for Shares in order to comply in whole or in part with any applicable
law. See Section 13. Any such delays will be effected in compliance with Rule
14e-1(c) under the Exchange Act (relating to a bidder's obligation to pay for or
return tendered securities promptly after the termination or withdrawal of such
bidder's offer).
In all cases, payment for Shares accepted for payment
pursuant to the Offer will be made only after timely receipt by the Depositary
of (a) Share Certificates for such Shares (or a timely Book-Entry Confirmation
with respect thereto), (b) the Letter of Transmittal (or facsimile thereof)
relating to the Shares tendered, properly completed and duly executed, with any
required signature guarantees, or, in the case of a book-entry transfer, an
Agent's Message, and (c) any other documents required by the Letter of
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Transmittal. The per Share consideration paid to any holder of Shares pursuant
to the Offer will be the highest per Share consideration paid to any other
holder of Shares pursuant to the Offer.
For purposes of the Offer, the Purchasers will be deemed to
have accepted for payment, and thereby purchased, up to 1,000,000 Shares,
validly tendered to the Purchasers and not withdrawn as, if and when the
Purchasers give oral or written notice to the Depositary of the Purchasers'
acceptance for payment of such Shares. Payment for Shares accepted for payment
pursuant to the Offer will be made by deposit of the purchase price therefor
with the Depositary, which will act as agent for validly tendering holders for
the purpose of receiving payment from the Purchasers and transmitting payment to
tendering holders. UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON THE PURCHASE
PRICE OF THE SHARES TO BE PAID BY THE PURCHASERS, REGARDLESS OF ANY EXTENSION OF
THE OFFER OR ANY DELAY IN MAKING SUCH PAYMENT. Upon the deposit of funds with
the Depositary for the purpose of making payments to tendering holders, the
Purchasers' obligations to make such payment shall be satisfied and tendering
holders must thereafter look solely to the Depositary for payment of amounts
owed to them by reason of the acceptance for payment of Shares pursuant to the
Offer. The Purchasers will pay any stock transfer taxes with respect to the
transfer and sale to them or their order pursuant to the Offer, except as
otherwise provided in Instruction 6 of the Letter of Transmittal, as well as any
charges and expenses of the Depositary and the Information Agent.
If the Purchasers are delayed in their acceptance for payment
of or payment for Shares or are unable to accept for payment or pay for Shares
pursuant to the Offer for any reason, then, without prejudice to the Purchasers'
rights under the Offer (but subject to compliance with Rule 14e-l(c) under the
Exchange Act), the Depositary may, nevertheless, on behalf of the Purchasers,
retain tendered Shares, and such Shares may not be withdrawn except to the
extent tendering shareholders are entitled to exercise, and duly exercise,
withdrawal rights as described in Section 3.
If any tendered Shares are not purchased pursuant to the Offer
for any reason, Share Certificates for any such unpurchased Shares will be
returned, without expense to the tendering holder (or, in the case of Shares
delivered by book-entry transfer of such Shares into the Depositary's account at
the Book-Entry Transfer Facility pursuant to the procedure set forth in Section
2, such Shares will be credited to an account maintained at the Book-Entry
Transfer Facility), as promptly as practicable after the expiration, termination
or withdrawal of the Offer. Notwithstanding the foregoing, in the event that a
portion of the Shares represented by a tendered Share Certificate has been
tendered and a portion has not been tendered, or a portion has been accepted for
payment and a portion has not been accepted for payment, and the Company's
transfer agent cannot or will not reissue Share Certificates representing any
such Shares, the Purchasers will provide to the tendering holder a certificate
of beneficial interest in the Shares that were not accepted for payment.
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The Purchasers reserve the right to transfer or assign, in
whole or from time to time in part, to the Funds, or to one or more direct or
indirect wholly owned subsidiaries of the Funds, the right to purchase Shares
tendered pursuant to the Offer, but any such transfer or assignment will not
relieve the Purchasers of their obligations under the Offer and will in no way
prejudice the rights of tendering holders to receive payment for Shares validly
tendered and accepted for payment pursuant to the Offer.
5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The Purchasers believe that tenders of Shares pursuant to the
offer may result in capital losses for many holders. Capital losses may be used
to offset capital gains and the excess of capital losses over capital gains may
be offset by non-corporate taxpayers against ordinary income, subject to an
annual deduction limitation of $3,000 ($1,500 in the case of married individuals
filing separately).
The receipt of cash pursuant to the Offer will be a taxable
transaction for federal income tax purposes under the Internal Revenue Code of
1986, as amended (the "Code"), and may also be a taxable transaction under
applicable state, local or foreign income or other tax laws. Generally, for
federal income tax purposes, a tendering holder will recognize gain or loss
equal to the difference between the amount of cash received by the holder
pursuant to the Offer and the aggregate tax basis in the Shares tendered by the
holder and purchased pursuant to the Offer. If Shares are held by a holder as
capital assets (i.e., generally assets held for investment), gain or loss
recognized by the holder with respect to such Shares will generally be capital
gain or loss.
Capital gains recognized by a non-corporate holder will generally be
taxed at a maximum federal marginal tax rate of 20% if the holder's holding
period for the Shares exceeds 18 months and 28% if the holder's holding period
for the Shares exceeds 12 months but does not exceed 18 months. Capital gains
recognized by a corporate holder will be taxed at a maximum federal marginal tax
rate of 35%.
THE FOREGOING DISCUSSION IS INCLUDED FOR GENERAL INFORMATION ONLY AND
MAY NOT BE APPLICABLE WITH RESPECT TO SHARES RECEIVED PURSUANT TO THE EXERCISE
OF EMPLOYEE STOCK OPTIONS OR OTHERWISE AS COMPENSATION OR WITH RESPECT TO
HOLDERS OF SHARES WHO ARE SUBJECT TO SPECIAL TAX TREATMENT UNDER THE CODE, SUCH
AS NON-U.S. PERSONS, LIFE INSURANCE COMPANIES, TAX-EXEMPT ORGANIZATIONS AND
FINANCIAL INSTITUTIONS, AND MAY NOT APPLY TO A HOLDER OF SHARES IN LIGHT OF
INDIVIDUAL CIRCUMSTANCES. HOLDERS ARE URGED TO CONSULT THEIR TAX ADVISERS TO
DETERMINE THE PARTICULAR TAX CONSEQUENCES TO THEM (INCLUDING THE APPLICATION AND
EFFECT OF ANY STATE, LOCAL OR FOREIGN INCOME AND OTHER TAX LAWS) OF THE OFFER.
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6. PRICE RANGE OF SHARES; DIVIDENDS ON THE SHARES
Based on the Company's Proxy Statement relating to its annual
meeting on September 17, 1996 (the "1996 Proxy Statement"), the most recent
filing made by the Company with the Commission containing a number of
outstanding Shares, as of August 7, 1996 there were 5,035,900 Shares outstanding
and approximately 3,500 holders of record of Shares. However, in its decision in
Linton v. Earle, 1997 Del. Ch. LEXIS 117 (1997), in which certain holders of
Shares challenged the issuance of 270,000 Shares to the Company's directors and
50,000 Shares to its counsel, the Delaware Court of Chancery invalidated the
issuance of 320,000 of such Shares.
Based on the 1996 Proxy Statement, until 1992, the Shares were
quoted on the Nasdaq National Market ("Nasdaq"). In 1992 the Shares were removed
from quotation on Nasdaq. The last reported trade of Shares occurred on January
16, 1998, at a price of $2 1/8 per share, at a volume of 1,800 shares. Based
upon information obtained from Bloomberg, L.P., the high and low sale prices for
the Shares were as follows for the period beginning January 1, 1996 and ending
on January 16, 1998, the date of the last reported trade:
Price Range of Shares
High Low
First Quarter 1996 $0.05 $0.04
Second Quarter 1996 1/2 .01
Third Quarter 1996 1 1/4 1/2
Fourth Quarter 1996 1 3/4 3/4
First Quarter 1997 2 1
Second Quarter 1997 1 5/8 3/4
Third Quarter 1997 2 11/16 1/2
Fourth Quarter 1997 2 11/2
First Quarter 1998 (through 2 3/8 2
January 16, 1998, the date of
the last reported trade)
As of the date hereof, there is no established public trading market for the
Shares.
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7. EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES;
EXCHANGE ACT REGISTRATION; MARGIN REGULATIONS
Market for the Shares. Based on the 1996 Proxy Statement, as
of August 7, 1996 there were 5,035,900 Shares outstanding. However, in its
decision in Linton v. Earle, in which certain holders of Shares challenged the
issuance of 270,000 Shares to the Company's directors and 50,000 Shares to its
counsel, the Delaware Court of Chancery invalidated the issuance of 320,000 of
such Shares. The purchase of Shares pursuant to the Offer will reduce the number
of holders of Shares and the number of Shares that might otherwise trade
over-the-counter, and could adversely affect the liquidity and market value of
the remaining Shares held by the public.
Exchange Act Registration. The Purchasers believe that the
Shares are currently registered under the Exchange Act. The Shares may be
eligible for deregistration either prior to or after the Offer depending upon
certain circumstances, including the number of record holders of the Shares at
such time. Registration of the Shares under the Exchange Act may be terminated
upon application of the Company to the Commission if the Shares are neither
listed on a national securities exchange nor held by 500 or more holders of
record, and if total assets of the Company have not exceeded $10 million on the
last day of the Company's three most recent fiscal years. In order to be
eligible to effect such termination, however, the Company must be current in its
periodic reporting requirements under the Exchange Act. The Purchasers believe
that the Company has filed reports under the Exchange Act only sporadically
since the filing of the Company's Annual Report on Form 10-K for the year ended
December 31, 1991, the last full fiscal year prior to the seizure by the
Resolution Trust Corporation (the "RTC") of Security Savings, and that the
Company is therefore not current in such periodic reporting requirements.
Termination of registration of the Shares under the Exchange
Act would substantially reduce the information required to be furnished by the
Company to its shareholders and to the Commission. Termination would also make
certain provisions of the Exchange Act no longer applicable to the Company, such
as the short-swing profit recovery provisions of Section 16(b) of the Exchange
Act, the requirement of furnishing a proxy statement pursuant to Section 14(a)
of the Exchange Act in connection with shareholders' meetings and the related
requirement of furnishing an annual report to shareholders and the requirements
of Rule 13e-3 under the Exchange Act with respect to "going private"
transactions. Furthermore, the ability of "affiliates" of the Company and
persons holding "restricted securities" of the Company to dispose of such
securities in compliance with Rule 144 or 144A promulgated under the Securities
Act of 1933, as amended, would be eliminated, although Rule 144 and Rule 144A
would appear to be currently unavailable to such affiliates because of the
absence of currently available information concerning the Company.
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Margin Securities. The Purchasers believe that the Shares do
not constitute margin securities under the regulations of the Board of Governors
of the Federal Reserve System.
8. CERTAIN INFORMATION CONCERNING THE COMPANY
The following information has been excerpted from the
Company's Annual Report on Form 10-K for the year ended December 31, 1991, the
last Form 10-K filed by the Company and is the last Form 10-K that had been due
to be filed prior to the seizure of Security Savings by the RTC:
"[The Company] was incorporated under the laws of the State
of Delaware on March 17, 1988 for the purpose of becoming the holding
company of [Security Savings]. On March 6, 1989, the [Company] acquired
all the stock of Security Savings through a holding company
reorganization.
"The Corporation [was] classified as a unitary savings and
loan holding company and [was] subject to regulation by the Office of
Thrift Supervision ("OTS"), a bureau of the U.S. Department of the
Treasury. Its principal business [was] the business of [Security
Savings] and [its] subsidiaries.
"Prior to its acquisition of the stock of the [Security
Savings], the [Company] had no assets or liabilities and engaged in no
business activities. Since the acquisition, the [Company did] not
engage in any significant activity other than holding the stock of
[Security Savings] and operating a savings and loan business through
[Security Savings].
"Security Savings Bank, SLA [was] a New Jersey chartered
savings and loan association which began operations in 1873. [Security
Savings] converted from a mutual association to a stock association in
June of 1987 and became a subsidiary of the [Company] in March of 1989.
On June 28, 1988, [Security Savings] changed its name to "Security
Savings Bank, SLA." Security Savings conduct[ed] its business through
30 offices located throughout southern New Jersey, including its home
office at 818 Landis Avenue, Vineland, New Jersey. [Security Savings]
also wholly own[ed] seven subsidiaries.
"[Security Savings]'s deposits [were] federally insured up to
the allowable limits by the Savings Association Insurance Fund ("SAIF")
administered by the Federal Deposit Insurance Corporation ("FDIC").
[Security Savings was] subject to examination and comprehensive
regulation by the OTS and the New Jersey Department of Banking. It
[was] a member of and own[ed] capital stock in the FHLB of New York,
one of the twelve
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regional banks in the FHLB System, and [was] further subject to
regulation by the Board of Governors of the Federal Reserve System . .
. governing reserves to be maintained against deposits and certain
other matters."
The following information has been excerpted from the
Company's Quarterly Report on Form 10-Q for the period ended September 30, 1995
(the "September 1995 Form 10-Q"), the last Form 10-K filed by the Company:
"Since the seizure by the [RTC] in December, 1992, of the
[Company]'s former wholly-owned subsidiary, [Security Savings], the
[Company] has been, and continues to be, inactive. The [Company] has no
significant assets, liabilities or operations. The [Company]'s
activities currently consist of maintaining the [Company]'s legal
status under Delaware law and pursuing a lawsuit initiated by the
Corporation against the United States Government in connection with the
inclusion of supervisory goodwill in the calculation of the [Security
Savings]'s regulatory capital.
"At September 30, 1995, the [Company] had total assets of
$667,293, as compared to total assets of $0 at December 31, 1994. The
[Company]'s assets consist entirely of cash and investments of cash
resulting from a federal income tax refund in the amount of
approximately $678,000 that the [Company] received from the Internal
Revenue Service in February, 1995, for the tax year ended December 31,
1992. The investment consist [sic] of a certificate of deposit in a
financial institution. The RTC has informally advised the [Company]
that this tax refund should be returned to the RTC as the receiver for
[Security Savings]. The [Company] intends to contest this matter with
the RTC. In October, 1995, the [Company] also received a refund in the
amount of $43,000 from the State of Delaware for overpayment of
franchise taxes.
"Since December, 1992, the [Company] has been inactive and,
therefore, has had no results of operations or income for the three and
nine months ended September 30, 1995 and 1994. The [Company] does not
expect to have any significant earnings or operations unless and until
it recovers damages, if any, from the goodwill lawsuit. See "Part II.
Item 1 Legal Proceedings." At this time, the [Company] has made no
decision regarding its future course of action in the event that the
[Company] prevails in its goodwill lawsuit.
"During the three and nine months ended September 30, 1995,
the [Company] incurred approximately $27,000 in operating expenses.
Approximately $23,000 of such expenses resulted from legal fees
relating to pursuit of the goodwill lawsuit and the maintenance of the
[Company]'s legal status under Delaware law. The balance of such
expenses were to cover
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fees payable to the [Company]'s Transfer Agent and Registrar and for
miscellaneous other expenses. Funds were provided to the [Company] for
such operating expenses through borrowings from the [Company]'s
Directors, unsecured loans and borrowings against tax refunds received
by the [Company].
"On August 8, 1995, the [Company] filed a lawsuit styled
Robert T. Healy and Security Investments Group, Inc. v. United States
of America in the United States Court of Federal Claims [the "Claims
Court"] (Docket No. 95-530 C) [the ("Action")] to recover damages for
breach of contract occasioned by the enactment of the Financial
Institutions Reform, Recovery and Enforcement Act of 1989 ("FIRREA") in
August 1989. The enactment of FIRREA precluded the use of "supervisory
goodwill" from the computation of a savings association's regulatory
capital, a practice which had been permitted by federal regulations
prior to FIRREA's enactment. As of December 4, 1992, the [Security
Savings] had approximately $51.3 million of supervisory goodwill
recorded on its books. The lawsuit seeks compensatory damages in an
amount to be determined. Several supervisory goodwill lawsuits have
been filed by savings associations similarly situated to the [Company].
Similar lawsuits have been won by the plaintiffs and have been upheld
on appeal. In November, 1995, the U.S. Government announced that it
will appeal these decisions to the U.S. Supreme Court. If the Supreme
[sic] elects to hear these cases, a decision may not be known until
June, 1996, if the case is heard during the current term of the Court.
In November 1995, the Court of Claims suspended the Corporation's
proceeding with the lawsuit (claims filed by other similarly situated
plaintiffs have also been suspended by the Court) pending action by the
Supreme Court. The [Company] intends to vigorously pursue its lawsuit
against the United States for breach of contract."
The Action is one of several similar cases pending before the
Claims Court. The Action was stayed pending the outcome of certain other suits.
On July 1, 1996, the U.S. Supreme Court held that the government was liable to
certain other plaintiff thrift holding companies in cases arising out of similar
facts patterns (the "Winstar Litigation"). Further information regarding the
Winstar Litigation is set forth below.
Since the termination of RTC in 1995, the FDIC has acted as
receiver for Security Savings, and has been granted leave to intervene in the
litigation on behalf of Security Savings in its capacity as receiver. The FDIC
filed a complaint as plaintiff- intervenor on March 25, 1997. The plaintiffs in
the Action ("Plaintiffs") filed a Second Amended Complaint on April 15, 1997.
The Purchasers believe that the FDIC has intervened in the Action principally to
recover any losses on account of the receivership of Security Savings that were
paid out by the insurance fund. The Purchasers also believe that the FDIC will
assert that, under applicable FDIC regulations, the FDIC's claim will be
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senior to the claims of the Company, as Security Savings's sole stockholder. The
Purchasers further believe that it is not possible to predict how the Claims
Court will resolve the FDIC's claims, or the timing of any such resolution.
On December 22, 1997, the Claims Court ruled in favor of the
plaintiffs on the issue of liability in four cases involving financial
institutions other than Security Savings. These four cases were selected as
"Test Cases" for the purposes of extending summary judgment from the Supreme
Court's decision in the Winstar Litigation. The Claims Court ordered that, in
all Winstar-related cases where there are pending summary judgment motions or
cross-motions filed by plaintiffs, the defendant must show cause, within 60 days
after December 22, 1997, why those motions should not be granted, and liability
found on all Winstar contract issues based upon its December 22, 1997 decision.
The government has vigorously defended its position as to both liability and
damages. No assurance as to an outcome of this process can be made.
Proceedings in the Action had been stayed pending a decision
by the Supreme Court of the United States in three cases involving claims by
financial institutions against the United States for, among other things, breach
of contract based upon the elimination by FIRREA of the treatment of goodwill
and capital credits contemplated at the time the ailing thrifts were taken over
by healthier thrifts or other investors. On July 1, 1996, the Supreme Court
decided an appeal in three of these cases brought against the government. The
plaintiffs were Winstar Corporation, Glendale Federal Bank FSB and The Statesman
Group, Inc. In the Winstar Litigation, based upon their facts and circumstances
and based upon the documents relating to the plaintiffs' acquisitions of ailing
savings institutions, the Claims Court had granted summary judgment on the issue
of liability in favor of the plaintiffs. Thereafter a panel of the Court of
Appeals for the Federal Circuit (the "Federal Circuit") reversed the summary
judgments granted in favor of the plaintiffs and ruled against them.
Subsequently, the Federal Circuit, sitting en banc, reversed the panel's
decision and ruled in favor of the plaintiffs. The Government then sought a
further review in the Supreme Court. In its July 1996 decision, the Supreme
Court affirmed the judgments of liability in favor of the plaintiffs, holding
that, based upon the language of the applicable documents executed in connection
with plaintiffs' take-over of ailing thrifts, such plaintiffs have stated claims
for breach of contract against the government. Because the Claims Court had not
made any findings as to whether the plaintiffs had suffered damages and, if so,
in what amount, the Supreme Court remanded for further proceedings consistent
with its opinion. Since the Supreme Court's decision in July 1996, the Claims
Court has conducted evidentiary proceedings in which it took testimony and
reviewed documentary evidence on the measure and amount of damages regarding the
claim of Glendale Federal Bank FSB. The government has opposed Glendale's claim
for damages. Although in published reports the presiding judge made remarks
favorable to the plaintiffs prior to hearing evidence from the government, the
Court has not yet rendered a decision on the measure or the amount of damages to
which Glendale may be entitled. The Court has not yet begun to hear evidence
concerning damages to which any other plaintiffs may be entitled. Following any
decision on damages, it is anticipated that one or both parties may
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appeal to the Federal Circuit. There can be no prediction whether the Claims
Court will make a damage award or when any such damage award will become final,
nonappealable and enforceable.
Although the plaintiffs in the Winstar Litigation prevailed in
the Supreme Court and the plaintiffs in the four "Test Cases" prevailed in the
Claims Court, such decisions are not necessarily dispositive of the outcome of
the Action. A court may still determine that the Plaintiffs' claims involve
sufficiently different facts and/or legal issues as to render the Winstar
Litigation inapplicable to the Action and thereby result in a different
conclusion from that of the Winstar Litigation. Moreover, the damages portion of
the claims presented by the Winstar plaintiffs remain to be litigated and could
take several years to resolve. The government has vigorously defended its
position as to both liability and damages.
Following any decision on liability with respect to the
Action, it is possible that one or both parties may seek to appeal to the
Federal Circuit. It is uncertain when any such judgment will become final,
nonappealable and enforceable. If the Claims Court rules in favor of the
Plaintiffs on the issue of liability and, assuming there are one or more appeals
from that decision, if the judgment of liability is upheld following any such
appeals, it would nevertheless be uncertain when the Claims Court would conduct
proceedings on damages and, following a decision, if any, on damages and any
appeals from such decision, when any such decision would become final. The
measure and amount of damages, if any, are uncertain.
By tendering Shares pursuant to the Offer, holders will
relinquish any and all rights, as holders, to any benefits as holders or
derivative plaintiffs of the outcome of the Action, and any other benefits that
may have accrued or may hereafter accrue to holders from any other source.
On April 1, 1996, the Company's board of directors decided to
issue to each of its nine members 30,000 Shares as compensation for services
they had rendered from the end of 1992 until 1996. The board also decided to
issue 50,000 shares to a law firm that employed one of the directors, as a
retainer to secure the services of that firm. The board issued the 1996 Proxy
Statement and noticed a stockholders meeting for September 17, 1996, at which
the board was reelected. However, in its decision in Linton v. Earle, in which
certain holders of Shares challenged the issuance of 270,000 Shares to the
Company's directors and 50,000 Shares to its counsel, the validity of the
reelection of directors and certain other matters, the Delaware Court of
Chancery invalidated the issuance of such Shares and such reelection.
On December 19, 1997, a group (the "Group") of the Company's
shareholders, which includes the plaintiffs in Linton v. Earle, filed a Schedule
13D with the Commission. The Group stated that "[t]he Group's purpose is to seek
a reconstitution of the Board of Directors . . .. Absent an agreement with the
Company acceptable to the Group, the Group intends to conduct a proxy and/or
consent solicitation to remove the
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members of the Board of Directors of the Company . . . and to elect a new slate
of Directors which is responsive to the Stockholders' interests."
According to the Linton v. Earle opinion, the Federal
government has sued the Company in Federal District Court for the District of
New Jersey to recover the tax refund of approximately $678,000. As of July 1997,
that litigation had not been resolved, and the refund proceeds remained
deposited in an interest-bearing account. No prediction can be made as to the
outcome of this case.
Set forth in Annex A attached hereto is certain selected
financial information with respect to the Company excerpted from information
contained in the September 1995 Form 10-Q. Set forth in Annex C attached hereto
is certain financial information with respect to the estate of Security Savings,
which has been obtained from the FDIC.
Available Information. The Company is subject to the
informational requirements of the Exchange Act and, in accordance therewith, is
required to file reports relating to its business, financial condition and other
matters. Information as of particular dates concerning the Company's directors
and officers, their remuneration, stock options and other matters, the principal
holders of the Company's securities and any material interest of such persons in
transactions with the Company is required to be disclosed in proxy statements
distributed to the Company's shareholders and filed with the Commission. The
Purchasers believe that the Company has only sporadically filed reports and
proxy statements under the Exchange Act since the filing of the September 1995
Form 10-Q. Such reports, proxy statements and other information, may be
available for inspection at the public reference facilities of the Commission at
450 Fifth Street, N.W., Washington, DC 20549, and at the regional offices of the
Commission located at Seven World Trade Center, 13th Floor, New York, NY 10048
and Citicorp Center, 500 West Madison Street (Suite 1400), Chicago, IL 60661.
Copies of such information should be obtainable, by mail, upon payment of the
Commission's customary charges, by writing to the Commission's principal office
at 450 Fifth Street, N.W., Washington, DC 20549.
The information concerning the Company contained in this
Offer to Purchase has been taken from or based upon publicly available documents
on file with the Commission and other publicly available information. Although
the Purchasers have no knowledge that any such information is untrue, the
Purchasers take no responsibility for the accuracy or completeness of such
information or for any failure by the Company to disclose events that may have
occurred and may affect the significance or accuracy of any such information.
9. CERTAIN INFORMATION CONCERNING THE PURCHASERS AND THE FUNDS
Purchaser LLC is newly organized and is wholly owned by
Investment LLC. Purchaser Corp. is newly organized and is wholly owned by
Investment Corp. Neither of the Purchasers has conducted any business other than
in connection with the Offer. The
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Funds were formed to engage in the buying and selling of securities for
investment for their own accounts. JL Advisors II, LLC, a Delaware limited
liability company ("Advisors"), is the sole managing member of Investments LLC.
JL Associates II, LLC, a Delaware limited liability company ("Associates"), is
the investment manager of Investments Corp. Michael L. Lewittes and Jaffe
Capital Management Group, L.L.C., a Delaware limited liability company
controlled by Robert S. Jaffe, are the sole members and the managers of Advisors
and Associates. Messrs. Jaffe and Lewittes are U.S. citizens. The principal
executive offices of Messrs. Jaffe and Lewittes, Advisors, Associates,
Investments LLC and Purchaser LLC are located at 520 Madison Avenue, 7th Floor,
New York, New York 10022. The principal executive offices of Investments Corp.
and Purchaser Corp. are located at c/o International Fund Administration, Ltd.,
48 Par-la-Ville Road, Suite 464, Hamilton HM11, Bermuda.
Investments LLC and Investments Corp. have aggregate equity
capital contribution commitments in excess of $22,000,000 and have committed to
fund sufficient equity capital to the Purchasers to pay for the Shares to be
purchased hereunder, plus related fees and expenses. The Purchasers have agreed
to allocate between themselves the Shares purchased hereunder at the time of
acceptance of Shares for payment.
None of the Funds or the Purchasers, or, to the knowledge of
the Funds or the Purchasers, any of the persons listed in Schedule I hereto, or
any associate or majority-owned subsidiary of such persons, beneficially owns
any equity security in the Company, and none of the Funds, the Purchasers, or,
to the knowledge of the Funds or the Purchasers, any of the other persons
referred to above, or any of the respective directors, executive officers or
subsidiaries of any of the foregoing, has effected any transaction in any equity
security of the Company during the past 60 days.
Except as set forth in this Offer to Purchase, none of the
Funds or the Purchasers, or, to the knowledge of the Funds and the Purchasers,
any of the persons listed in Schedule I hereto has any contract, arrangement,
understanding or relationship with any other person with respect to any
securities of the Company, including, without limitation, any contract,
arrangement, understanding or relationship concerning the transfer or the voting
of any securities of the Company, joint ventures, loan or option arrangements,
puts or calls, guaranties of loans, guaranties against loss or the giving or
withholding of proxies.
None of the Funds or the Purchasers, or, to the knowledge of
the Funds and the Purchasers, any of the persons listed in Schedule I hereto has
had any transactions with the Company, or any of their respective executive
officers, directors or affiliates that would require reporting under the rules
of the Commission.
To the knowledge of the Purchasers and the Funds, there have
been no contacts, negotiations or transactions between the Funds or the
Purchasers, or their respective subsidiaries, or, to the knowledge of the Funds
and the Purchasers, any of the
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persons listed in Schedule I hereto, on the one hand, and the Company or its
executive officers, directors or affiliates, on the other hand, concerning a
merger, consolidation or acquisition, tender offer or other acquisition of
securities, election of directors, or a sale or other transfer of a material
amount of assets that would require reporting under the rules of the Commission.
The Purchasers have entered into an agreement (the "Filing
Agreement") pursuant to which the Purchasers have agreed to file the Schedule
14D-1 jointly and concurrently issue this Offer to Purchase and make the Offer.
The Filing Agreement provides that the Purchasers will allocate between
themselves at the time of the acceptance of Shares for purchase any Shares
purchased pursuant to the Offer. The Filing Agreement further provides that, at
the time of payment for Shares, due to the desire of Purchaser Corp. to hold any
Shares purchased by it solely for passive investment purposes, all collective
action by the Purchasers will cease, and each Purchaser will be permitted to
take any actions with respect to the Shares deemed necessary or appropriate by
such Purchaser.
JL Advisors, LLC ("JL Advisors"), an affiliate of Investments
LLC, has entered into a consulting agreement (the "Consulting Agreement") with
Collectible Certificates LLC, a Delaware limited liability company
("Collectible"), which provides that Collectible will consult with and advise JL
Advisors and any entities, including the Funds and the Purchasers, organized by
JL Advisors to acquire interests in existing or formerly existing entities,
including Security Savings (each, an "Institution"), that have asserted either
directly, or derivatively, certain claims against the United States. Collectible
agreed to reimburse JL Advisors for the legal and other costs of organizing the
initial investment entity and those incurred in connection with the preparation
of the Consulting Agreement. The Consulting Agreement terminates on November 30,
1998, provided that the Consulting Agreement will continue so long as certain
investment vehicles retain any portion of any interest in an Institution. The
Consulting Agreement provides that through November 30, 1998, Collectible will
receive basic compensation at the rate of $100,000 per annum, payable monthly in
arrears. In addition to such Basic Compensation, Collectible will receive, as
additional compensation, 7 1/2% of the "Realized Net Profits" received with
respect to interests in Institutions, determined and paid as provided in the
Consulting Agreement. JL Advisors has agreed to provide to managing member of
Collectible, until November 30, 1998, without charge, an office within JL
Advisors's office space, computer access and telephone usage, as well as
reimbursement for travel and other out-of-pocket expenses previously approved by
such affiliate.
10. SOURCE AND AMOUNT OF FUNDS
The total amount of funds required by the Purchasers to
purchase all of the Shares pursuant to the Offer and to pay related fees and
expenses incurred in connection with the Offer is estimated at $2,500,000.
Investments LLC and Investments Corp. have aggregate equity capital contribution
commitments in excess of $22,000,000 and have
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committed to fund sufficient equity capital to the Purchasers to pay for the
Shares to be purchased hereunder, plus related fees and expenses. The Purchasers
have agreed to allocate between themselves the Shares purchased hereunder at the
time of acceptance of Shares for payment.
11. PURPOSE OF THE OFFER
The purpose of the Offer is to make, through the purchase of
Shares, a speculative investment in any surplus or excess funds remaining on
account of the interest of the Company in Security Savings after the outcome of
all litigation and satisfaction of all liabilities of Security Savings. By
tendering Shares pursuant to the Offer, holders will relinquish any rights, as
holders, to any benefits to the Company of the existence of any such surplus or
excess funds. The Company and Security Savings no longer operate an ongoing
business and, to Purchasers' knowledge, Security Savings no longer has a Board
of Directors or management. However, to the extent information is available, the
Purchasers intend to continuously evaluate the Company and its prospects, and
the Purchasers reserve the right to change their plans and intentions.
The Purchasers have no current plans or proposals that would
result in an extraordinary corporate transaction, such as a merger,
reorganization or liquidation involving the Company (other than the distribution
to the holders of the Shares of funds, if any, received from the FDIC by the
Company in accordance with the charter documents and other instruments defining
the rights of securities holders, and the applicable rules of the FDIC with
respect to priorities of distributions by receivers of failed institutions), a
sale or transfer of any material amount of assets of the Company, any change in
the Board of Directors or management of the Company, any change in the
capitalization or dividend policy of the Company, or any other change in the
Company's corporate structure or business. However, to the extent information is
available, the Purchasers intend to continuously evaluate the Company and its
prospects, and the Purchasers reserve the right to change their plans and
intentions.
12. DIVIDENDS AND DISTRIBUTIONS
If, with effect after September 30, 1995, the Company should
(a) split, combine or otherwise change the Shares or its capitalization from
that disclosed in the September 1995 Form 10-Q, (b) acquire or otherwise cause a
reduction in the number of outstanding Shares or other securities or (c) except
as disclosed in the 1996 Proxy Statement with respect to the Shares, the
issuance of which was rescinded pursuant to Linton v. Earle, issue or sell
additional Shares, shares of any other class of capital stock, other voting
securities or any securities convertible into, or rights, warrants or options,
conditional or otherwise, to acquire any of the foregoing, then, subject to the
provisions of Section 13 hereof, the Purchasers, in their sole discretion, may
make such adjustments as they deem appropriate in the offer price for the Shares
and other terms of the Offer, including without limitation, the number or type
of securities offered to be purchased.
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If, with effect after September 30, 1995, except as
disclosed in the 1996 Proxy Statement with respect to the Shares, the issuance
of which was rescinded pursuant to Linton v. Earle, the Company should declare
or pay any cash dividend on the Shares or other distribution on the Shares, or
issue with respect to the Shares any additional Shares, shares of any other
class of capital stock, other voting securities or any securities convertible
into, or rights, warrants or options, conditional or otherwise, to acquire, any
of the foregoing, payable or distributable to holders of record on a date prior
to the transfer of the Shares purchased pursuant to the Offer to Purchase, or
their nominees or transferees on the Company's stock transfer records, then,
subject to the provisions of Section 13 hereof, (a) the offer price for the
Shares may, in the sole discretion of the Purchasers, be reduced by the amount
of any such cash dividend or cash distribution and (b) the whole of any such
noncash dividend, distribution or issuance to be received by the tendering
holders will (i) be received and held by the tendering holders for the account
of the Purchasers and will be required to be promptly remitted and transferred
by each tendering holder to the Depositary for the account of the Purchasers,
accompanied by appropriate documentation of transfer, or (ii) at the direction
of the Purchasers, be exercised for the benefit of the Purchasers, in which case
the proceeds of such exercise will promptly be remitted to the Purchasers.
Pending such remittance and subject to applicable law, the Purchasers will be
entitled to all rights and privileges as owners of any such noncash dividend,
distribution, issuance or proceeds and may withhold the entire offer price or
deduct from the Offer Price the amount or value thereof, as determined by the
Purchasers in their sole discretion.
13. CERTAIN CONDITIONS OF THE OFFER
Notwithstanding any other provisions of the Offer, and in
addition to (and not in limitation of) the Purchasers' rights to extend and
amend the Offer at any time in their discretion, the Purchasers shall not be
required to accept for payment or, subject to any applicable rules and
regulations of the Commission, including Rule 14e-1(c) under the Exchange Act
(relating to a bidder's obligation to pay for or return tendered securities
promptly after termination or withdrawal of such bidder's offer), pay for, and
may delay the acceptance for payment of or, subject to the restriction referred
to above, the payment for, any tendered Shares, or may terminate or amend the
Offer as to any Shares not then paid for, if any of the following events shall
occur or be deemed by Purchasers to have occurred:
a. there shall be threatened, instituted or pending any
action, proceeding, application or counterclaim by any government or
governmental, regulatory or administrative authority or agency,
domestic, foreign or supranational (each, a "Governmental Entity"), or
by any other person, domestic or foreign, before any court or
Governmental Entity, (i) (A) challenging or seeking to, or which is
reasonably likely to, make illegal, delay or otherwise directly or
indirectly restrain or prohibit, or seeking to, or which is reasonably
likely to, impose voting, procedural, price or other requirements, in
addition to those required by Federal securities laws
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(each as in effect on the date of this Offer to Purchase), in
connection with the making of the Offer, the acceptance for payment of,
or payment for, some of or all the Shares by Purchasers, the Funds or
any other affiliate of the Funds, (B) seeking to obtain material
damages or (C) otherwise directly or indirectly relating to the Offer,
(ii) seeking to prohibit the ownership by Purchasers, the Funds or any
other affiliate of the Funds of all or any portion of the Shares or of
the business or assets of Purchasers, the Funds or any other affiliate
of the Funds or to compel Purchasers, the Funds or any other affiliate
of the Funds to dispose of or hold separate the Shares or all or any
portion of the business or assets of Purchasers, the Funds or any other
affiliate of the Funds or seeking to impose any limitation on the
ability of Purchasers, the Funds or any other affiliate of the Funds to
conduct such business or own such assets, (iii) seeking to impose or
confirm limitations on the ability of Purchasers, the Funds or any
other affiliate of the Funds effectively to exercise full rights of
ownership of the Shares, including, without limitation, the right to
receive distributions from the FDIC in respect of the Shares, (iv)
seeking to require divestiture by Purchasers, the Funds or any other
affiliate of the Funds of any Shares, (v) seeking any material
diminution in the benefits expected to be derived by Purchasers, the
Funds or any other affiliate of the Funds as a result of the Offer, or
(vi) otherwise directly or indirectly relating to the Offer or which
otherwise, in the sole judgment of Purchasers, might materially
adversely affect the Company or Purchasers, the Funds or any other
affiliate of the Funds or the value of the Shares;
b. there shall be any action taken, or any statute, rule,
regulation, legislation, interpretation, judgment, order or injunction
proposed, enacted, enforced, promulgated, amended, issued, extant or
deemed applicable to (i) Purchasers, the Funds or any other affiliate
of the Funds or either Company, (ii) the Offer, (iii) the transfer or
purported assignment to the Purchasers of Shares purchased hereunder,
by any government, legislative body or court, or Governmental Entity,
that, in the sole judgment of the Purchasers, might, directly or
indirectly, result in any of the consequences referred to in clauses
(i) through (vi) of paragraph (a) above;
c. the Purchasers shall have learned of any change that has,
since September 30, 1995, occurred or been threatened (or any
condition, event or development shall have occurred or been threatened
involving a prospective change) in the business, properties, assets,
liabilities, capitalization, stockholders' equity, ownership or
prospective ownership of debt or equity securities of the Company
(including, without limitation, disposition by the Company of any
interest in or rights with respect to Security Savings), condition
(financial or otherwise), operations, licenses or franchises, results
of operations or prospects of the Company that, in the sole judgment of
the Purchasers, is or may be materially adverse to the Company, or the
Purchasers shall have become aware of any facts that, in the sole
judgment of the Purchasers, have or may have material adverse
25
<PAGE>
significance with respect to either the value of the Company or
Security Savings or the value of the Shares to the Purchasers;
d. there shall have occurred or been threatened (i) any
general suspension of trading in, or limitation on prices for,
securities on any national securities exchange or over-the-counter in
the United States, (ii) any extraordinary or material adverse change in
the financial markets or major stock exchange indices in the United
States, (iii) any material change in United States currency exchange
rates or any other currency exchange rates or a suspension of, or
limitation on, the markets therefor, (iv) a declaration of a banking
moratorium or any suspension of payments in respect of banks in the
United States, (v) any limitation (whether or not mandatory) by any
government, domestic, foreign or supranational, or Governmental Entity
on, or other event that, in the sole judgment of the Purchasers, might
affect the extension of credit by banks or other lending institutions,
(vi) a commencement of a war or armed hostilities or other national or
international calamity directly or indirectly involving the United
States or (vii) in the case of any of the foregoing existing at the
time of the commencement of the Offer, a material acceleration or
worsening thereof;
e. there shall have occurred any decision, action,
development, event or other circumstance in the Action or in any legal
proceeding based upon similar factual or legal allegations, including,
without limitation, any action seeking damages against the United
States of America in connection with "supervisory goodwill" accounting
for financial institutions, which in the sole judgment of the
Purchasers could have an adverse effect on the Shares or the
Purchasers' eventual recovery with respect thereto, or the FDIC shall
have issued receiver's certificates or other similar documents to any
holder of any claim with respect to Security Savings, including the
Company;
f. a tender or exchange offer for any Shares shall have been
made or proposed to be made by any other person or entity other than
tender offers disclosed on Schedule 14D-1 on file with the Commission
prior to January 1, 1998;
g. any approval, permit, authorization or consent of any
Governmental Entity (including those described or referred to in this
Section 13 or Section 14 hereof) shall not have been obtained on terms
satisfactory to the Purchasers in their discretion;
26
<PAGE>
h. the Purchasers shall have concluded, in their sole
judgment, that any statute, rule of law, covenant, order or provision
of any charter document or by-law of any entity may apply which may
have the effect of prohibiting, limiting or otherwise impeding in any
way, or imposing any conditions on, the ability of the Purchasers or
any of their direct or indirect transferees of any Shares at any time
held by the Purchasers to consummate any business combination
transaction (including any merger or consolidation, purchase or sale of
assets, tender or exchange offer, purchase or sale of securities, or
distribution upon securities) or to exercise any voting rights in
respect of such Shares;
which, in the sole judgment of the Purchasers in any such case, and regardless
of the circumstances (including any action or inaction by the Purchasers, the
Funds or any other affiliate of the Funds) giving rise to any such condition,
makes it inadvisable to proceed with the Offer or with such acceptance for
payment or payment.
The foregoing conditions are for the sole benefit of the
Purchasers and may be asserted by the Purchasers regardless of the circumstances
giving rise to any such condition or may be waived by the Purchasers in whole or
in part at any time and from time to time in their discretion. The failure by
the Purchasers at any time to exercise any of the foregoing rights will not be
deemed a waiver of any such right, the waiver of any such right with respect to
particular facts and circumstances will not be deemed a waiver with respect to
any other facts and circumstances and each such right will be deemed an ongoing
right that may be asserted at any time and from time to time. Any determination
by the Purchasers concerning the events described in this Section 13 will be
final and binding upon all parties. The Purchasers have reserved the right to
make independent determinations with respect to all matters requiring their
determination in connection with the above conditions.
14. CERTAIN LEGAL MATTERS
General. Except as otherwise disclosed herein, based on a
review of publicly available information filed by the Company with the
Commission, the Purchasers are not aware of (i) any license or regulatory permit
that appears to be material to the business of the Company and any subsidiaries
thereof, taken as a whole, that might be adversely affected by the acquisition
of Shares by the Purchasers pursuant to the Offer or (ii) any approval or other
action, by any governmental, administrative or regulatory agency or authority,
domestic, foreign or supranational, that would be required for the acquisition
or ownership of Shares by the Purchasers as contemplated herein. Should any such
approval or other action be required or desirable, the Purchasers currently
contemplate that such approval or action would be sought, except as described
below under "State
27
<PAGE>
Takeover Laws." While the Purchasers do not currently intend to delay the
acceptance for payment of Shares tendered pursuant to the Offer pending the
outcome of any such matter, there can be no assurance that any such approval or
action, if needed, would be obtained or would be obtained without substantial
conditions or that adverse consequences might not result to the business of the
Company, the Purchasers or the Funds or that certain parts of the businesses of
the Company, the Purchasers or the Funds might not have to be disposed of in the
event that such approvals were not obtained or any other actions were not taken.
The Purchasers' obligations under the Offer to accept for payment and pay for
Shares is subject to certain conditions. See Section 13.
State Takeover Laws. A number of states throughout the
United States have enacted takeover statutes that purport, in varying degrees,
to be applicable to attempts to acquire securities of corporations that are
incorporated or have assets, stockholders, executive offices or places of
business in such states. In Edgar v. MITE Corp., the Supreme Court of the United
States held that the Illinois Business Takeover Act, which involved state
securities laws that made the takeover of certain corporations more difficult,
imposed a substantial burden on interstate commerce and therefore was
unconstitutional. In ITS Corp. v. Dynamics Corp. of America, however, the
Supreme Court of the United States held that a state may, as a matter of
corporate law and, in particular, those laws concerning corporate governance,
constitutionally disqualify a potential acquiror from voting on the affairs of a
target corporation without prior approval of the remaining stockholders,
provided that such laws were applicable only under certain conditions.
Subsequently, a number of federal courts ruled that various state takeover
statutes were unconstitutional insofar as they apply to corporations
incorporated outside the state of enactment.
The Purchasers have not filed any information, registration
or similar statements under any state takeover statutes in connection with the
Offer. The Purchasers believe that the Delaware takeover statutes is applicable
to the Offer, and that the New Jersey Takeover Bid Disclosure Law may be
applicable to the Offer. As more fully set forth in Section 13, it is a
condition of the Offer (subject to waiver in the sole judgment of the
Purchasers) that the Company's Board of Directors recommend acceptance of the
Offer to the shareholders, with the effect that the Offer would not constitute a
"takeover bid or takeover offer" as defined in the New Jersey Takeover Bid
Disclosure Law. The Purchasers reserve the right to challenge the applicability
of any state law allegedly applicable to the Offer, and nothing in this Offer to
Purchase nor any action taken in connection herewith is intended as a waiver of
that right. In the event that any state takeover statute is found to be
applicable to the Offer, the Purchasers might be unable to accept for payment or
pay for the Shares tendered pursuant to the Offer or be delayed in continuing or
consummating the Offer. In such case, the Purchasers may not be obligated to
accept for payment or pay for any Shares tendered. See Section 13.
Antitrust. Purchasers believe that the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the "HSR Act") is inapplicable
to the Offer in light
28
<PAGE>
of the size of the Company and of the Offer. If the provisions of the HSR Act
were applicable to the Offer, the acquisition of Shares under the Offer could be
consummated only following the expiration of a 15-calendar day waiting period
following the filing by the Purchasers of a Notification and Report Form with
respect to the Offer, unless the Purchasers received a request for additional
information or documentary material from the Antitrust Division or the FTC or
early termination of the waiting period is granted. If, within the initial
15-day waiting period, either the Antitrust Division of the U.S. Department of
Justice (the "Antitrust Division") or the Federal Trade Commission (the "FTC")
were to request additional information or material from the Purchasers
concerning the Offer, the waiting period would be extended and would expire at
11:59 p.m., New York City time, on the tenth calendar day after the date of
substantial compliance by the Purchasers with such request. Only one extension
of the waiting period pursuant to a request for additional information is
authorized by the HSR Act. Thereafter, such waiting period may be extended only
by court order or with the consent of the Purchasers. In practice, complying
with a request for additional information or material can take a significant
amount of time. In addition, if the Antitrust Division or the FTC raises
substantive issues in connection with a proposed transaction, the parties
frequently engage in negotiations with the relevant governmental agency
concerning possible means of addressing those issues and may agree to delay
consummation of the transaction while such negotiations continue.
The Antitrust Division and the FTC frequently scrutinize the
legality under the antitrust laws of transactions. At any time before or after
Purchasers' acquisition of the Shares pursuant to the Offer, the Antitrust
Division or the FTC could take such action under the antitrust laws as it deems
necessary or desirable in the public interest, including seeking to enjoin the
purchase of the Shares pursuant to the Offer or seeking the divestiture of the
Shares acquired by the Purchasers. Private parties may also bring legal actions
under the antitrust laws under certain circumstances. There can be no assurance
that a challenge to the Offer on antitrust grounds will not be made or, if such
a challenge is made, of the result thereof.
15. FEES AND EXPENSES
MacKenzie Partners, Inc. (the "Information Agent") has been
retained by the Purchasers as information agent in connection with the Offer.
The Information Agent may contact holders of Shares by mail, telephone,
facsimile and personal interview and may request brokers, dealers and other
nominee shareholders to forward material relating to the Offer to beneficial
owners of Shares. The Purchasers will pay the Information Agent reasonable and
customary compensation for all such services and will reimburse the Information
Agent for reasonable out-of-pocket expenses in connection therewith. The
Purchasers have agreed to indemnify the Information Agent against certain
liabilities and expenses in connection with the Offer, including, without
limitation, certain liabilities under the federal securities laws.
29
<PAGE>
IBJ Schroder Bank & Trust Company (the "Depositary") has been
retained as the Depositary. The Purchasers will pay the Depositary reasonable
and customary compensation for its services in connection with the Offer, will
reimburse the Depositary for its reasonable out-of-pocket expenses in connection
therewith and will indemnify the Depositary against certain liabilities and
expenses in connection therewith, including, without limitation, certain
liabilities under the federal securities laws.
The Purchasers will pay soliciting dealers' fees of $0.20 per
Share to brokers, dealers and other persons for soliciting tenders of Shares of
their clients pursuant to the Offer. In addition, brokers, dealers, commercial
banks and trust companies and other nominees will, upon request, be reimbursed
by the Purchasers for customary clerical and mailing expenses incurred by them
in forwarding offering materials to their clients.
16. MISCELLANEOUS
The Offer is not being made to (nor will tenders be accepted
from or on behalf of) holders of Shares in any jurisdiction in which the making
of the Offer or the acceptance thereof would not be in compliance with the
securities, blue-sky or other laws of such jurisdiction. The Purchasers are not
aware of any jurisdiction in which the making of the Offer or the acceptance
thereof would not be in compliance with the laws of such jurisdiction. If the
Purchasers become aware of any jurisdiction where the making of the Offer or the
tender of Shares is not in compliance with any applicable law, the Purchasers
will make a good faith effort to comply with such law. If, after such good faith
effort, the Purchasers cannot comply with such law, the Offer will not be made
to (nor will tenders be accepted from or on behalf of) the holders of Shares
residing in such jurisdiction. To the extent the Purchasers become aware of any
state law that would limit the class of offerees in the Offer, the Purchasers
will amend the Offer and, depending on the timing of such amendment, if any,
will extend the Offer to provide adequate dissemination of such information to
such holders of Shares prior to the expiration of the Offer. In any jurisdiction
the securities, blue sky or other laws of which require the Offer to be made by
a licensed broker or dealer, the Offer shall be deemed to be made on behalf of
the Purchasers by one or more registered brokers or dealers licensed under the
laws of such jurisdiction.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO
MAKE ANY REPRESENTATION ON BEHALF OF THE PURCHASERS NOT CONTAINED HEREIN OR IN
THE LETTER OF TRANSMITTAL AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED.
THE PURCHASERS HAVE FILED WITH THE COMMISSION A TENDER OFFER
STATEMENT ON SCHEDULE 14D-1 (THE "SCHEDULE 14D-1") PURSUANT TO RULE 14D-3 UNDER
THE EXCHANGE ACT, TOGETHER WITH EXHIBITS, FURNISHING CERTAIN ADDITIONAL
INFORMATION WITH RESPECT TO THE OFFER,
30
<PAGE>
AND MAY FILE AMENDMENTS THERETO. SUCH SCHEDULE 14D-1 AND ANY AMENDMENTS THERETO,
INCLUDING EXHIBITS, MAY BE INSPECTED AND COPIES MAY BE OBTAINED IN THE MANNER
SET FORTH IN SECTION 8 WITH RESPECT TO THE COMPANY (EXCEPT THAT SUCH MATERIAL
WILL NOT BE AVAILABLE AT THE REGIONAL OFFICES OF THE COMMISSION).
January 21, 1998
31
<PAGE>
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF THE
FUNDS AND THE PURCHASERS
The Funds. Purchaser LLC is newly organized and is wholly owned by
Investment LLC. Purchaser Corp. is also newly organized and is wholly owned by
Investment Corp. Neither of the Purchasers has conducted any business other than
in connection with the Offer. The Funds were formed to engage in the buying and
selling of securities for investment for their own accounts. JL Advisors II,
LLC, a Delaware limited liability company ("Advisors"), is the sole managing
member of Investments LLC. JL Associates II, LLC, a Delaware limited liability
company ("Associates"), is the investment manager of Investments Corp. Michael
L. Lewittes and Jaffe Capital Management Group, LLC, a Delaware limited
liability company controlled by Robert S. Jaffe, are the sole members and the
managers of Advisors and Associates. Messrs. Jaffe and Lewittes are U.S.
citizens. The principal executive offices of Messrs. Jaffe and Lewittes,
Advisors, Associates, Investments LLC and Purchaser LLC are located at 520
Madison Avenue, 7th Floor, New York, New York 10022. The principal executive
offices of Investments Corp. and Purchaser Corp. are located at c/o
International Fund Administration, Ltd., 48 Par-la-Ville Road, Suite 464,
Hamilton HM11, Bermuda.
Set forth below are the name and present principal occupation or
employment, and material occupations, positions, offices or employments for the
past five years of each member of each of Advisors and Associates. The business
address of each such person is 520 Madison Avenue, New York, New York 10022 and,
each such person is a United States citizen. In addition, except as otherwise
noted, each director and executive officer of the Funds have been employed in
his or her present principal occupation listed below during the last five years.
PRINCIPAL OCCUPATION OR EMPLOYMENT,
NAME 5-YEAR EMPLOYMENT HISTORY
Robert S. Jaffe July 1992-June 1993 Steinhardt Partners, L.P.
July 1993-December 1996 SAC Capital Management, Inc.
January 1996-Present Managing Member of Jaffe Capital
Management Group,
LLC, an affiliate
of JL Advisors,
L.L.C.
Michael L. Lewittes July 1992-June 1993 Salomon Brothers Inc
July 1993-December 1996 SAC Capital Management, Inc.
January 1996-Present Managing Member of JL Advisors,
L.L.C.
<PAGE>
ANNEX A
CERTAIN SELECTED FINANCIAL INFORMATION
REGARDING
SECURITY INVESTMENTS GROUP, INC.
-------------
EXCERPTED FROM
THE QUARTERLY REPORT ON FORM 10-Q FOR THE FISCAL
QUARTER ENDED SEPTEMBER 30, 1995
OF
SECURITY INVESTMENTS GROUP, INC.
A-1
<PAGE>
SECURITY INVESTMENTS GROUP, INC.
STATEMENT OF FINANCIAL CONDITION
(Unaudited)
<TABLE>
<CAPTION>
SEPTEMBER 30, 1995 DECEMBER 31, 1994
------------------ -----------------
ASSETS
<S> <C> <C>
CASH $ 21,610 $ 1,103
INVESTMENTS 650,000 $ 0
---------- --------------
TOTAL ASSETS $ 671,610 $ 1,103
========== ===========
LIABILITIES & SHAREHOLDERS' EQUITY
OTHER CURRENT LIABILITIES $ 961,975 $ 294,682
LOANS PAYABLE - DIRECTORS 5,250 5,250
LOANS PAYABLE 30,000 0
RETAINED EARNINGS - UNAPPROPRIATED (325,615) $(298,829)
---------- ----------
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY $ 671,610 $ 1,103
========== ===========
</TABLE>
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
FINANCIAL CONDITION
Since the seizure by the Resolution Trust Corporation ("RTC") in
December, 1992, of the Corporation's former wholly-owned subsidiary, Security
Savings Bank, SLA (the "Savings Bank"), the Corporation has been, and continues
to be, inactive. The Corporation has no significant assets, liabilities or
operations. The Corporation's activities currently consist of maintaining the
Corporation's legal status under Delaware law and pursuing a lawsuit initiated
by the Corporation against the United States Government in connection with the
inclusion of supervisory goodwill in the calculation of the Savings Bank's
regulatory capital. See "Part II.
Item 1 - Legal Proceedings."
At September 30, 1995, the Corporation had total assets of $667,293, as
compared to total assets of $0 at December 31, 1994. The Corporation's assets
consist entirely of cash and investments of cash resulting from a federal income
tax refund in the amount of approximately $678,000 that the Corporation received
from the Internal Revenue Service in February, 1995, for the tax year ended
December 31, 1992. The investment consist [sic] of a certificate of deposit in a
financial institution. The RTC has informally advised the Corporation that this
tax refund should be returned to the RTC as the receiver for the Savings Bank.
The Corporation intends to contest this matter with the RTC. In October, 1995,
the Corporation also received a refund in the amount of $43,000 from the State
of Delaware for overpayment of franchise taxes.
COMPARISON OF OPERATING RESULTS FOR THE THREE AND NINE MONTHS
ENDED SEPTEMBER 30, 1995 AND 1994
Since December, 1992, the Corporation has been inactive and, therefore,
has had no results of operations or income for the three and nine months ended
September 30, 1995 and 1994. The Corporation does not expect to have any
significant earnings or operations unless and until it recovers damages, if any,
from the goodwill lawsuit. See "Part II. Item 1 - Legal Proceedings." At this
time, the Corporation has made no decision regarding its future course of action
in the event that the Corporation prevails in its goodwill lawsuit.
During the three and nine months ended September 30, 1995, the
Corporation incurred approximately $27,000 in operating expenses. Approximately
$23,000 of such expenses resulted from legal fees relating to pursuit of the
goodwill lawsuit and the maintenance of the Corporation's legal status under
Delaware law. The balance of such expenses were to cover fees payable to the
Corporation's Transfer Agent and Registrar and for miscellaneous other expenses.
Funds were provided to the Corporation for such operating expenses through
borrowings from the Corporation's Directors, unsecured loans and borrowings
against tax refunds received by the Corporation.
<PAGE>
ANNEX B
CERTAIN FINANCIAL INFORMATION
REGARDING
SECURITY SAVINGS BANK, SLA
-------------
PREPARED
BY
THE FEDERAL DEPOSIT INSURANCE CORPORATION
B-1
<PAGE>
<TABLE>
<CAPTION>
Statement of Assets and Liabilities in Liquidation (Unaudited)
(Rounded in Dollars)
Financial Institution Number: 1287 For Period Ending November 30, 1997
Inception Date: 06/17/1994
<S> <C> <C>
Assets Current Balance Inception Balance
Cash/Investments 3,744,995
Receivables 31,856
Assets in Liquidation
Consumer Loans 4,034,978 74,033,052
Commercial Loans 721,400 28,062,994
Securities 7,003,886 58,898,457
Real Estate Mortgages 2,534,545 262,674,773
Owned Assets 45,100 17,713,557
Other Assets/Judgments 5,217,224 55,729,169
Net Investments in Subsidiaries 21,508,968 31,954,600
Subtotal Assets in Liquidation 41,066,100 529,066,603
Advances 0
Less Estimated Loss on Assets (Note 2) 34,333,962
Total Assets $10,508,989 $529,066,603
Liabilities (Note 4)
Accounts/Notes Payable 7,675
Suspense/Escrow Accounts 161,552
FDIC Billings and Borrowings 140,307
Total Operating Liabilities 309,534
Depositor/Credit Claims
Pending Claims 17,698,803 557,218,244
Approved Claims 934,191
FDIC Subrogated Claims 58,879,636
Estimated Interest on Claims (Note 5) 0
Total Claims 77,512,630 557,218,244
Other Liabilities
Estimated Loss Sharing Expenses 0
Estimated Litigation - Probable (Note 6) 0
Contracts and Other Liabilities 832,886
Total Other Liabilities 832,886
Subordinated Claims
Cross Guaranty 0
Total Subordinated Claims 0
Total Liabilities $78,655,050 $557,218,244
Net Assets/(Deficit)
At Inception (28,151,641) (28,151,641)
Non-Cash Adjustments (Note 7) (24,589,204)
Premiums (Paid)/Received 41,627,001
Income/(Loss) of the Liquidation (57,032,217)
Total Net Assets/(Deficit) ($68,146,061) ($28,151,641)
Estimated additional litigation considered reasonably possible: (Note 6) $0
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
Statement of Operations (Unaudited)
(Rounded in Dollars)
<TABLE>
<CAPTION>
Financial Institution Number: 1287 For Period Ending November 30, 1997
Inception Date: 06/17/1994
Liquidation Revenues Current Period Inception to Date
<S> <C> <C>
Interest - Invested Funds 24,398 5,233,813
Other Income (675,553) (973,291)
Affordable Housing Reimbursement 0 0
Interest and Fees
Consumer Loans 0 2,397,658
Commercial Loans 7,377 624,531
Securities 0 1,792,147
Real Estate Mortgages 54,781 9,571,949
Owned Assets 0 0
Other Assets/Judgments 122,128 951,721
Income/(Loss) from Subsidiaries 0 1,771
Investigation/Litigation Settlements 25 81,692
Total Liquidation Revenues ($466,844) $19,681,991
Liquidation Expenses
Interest on FDIC Loans 0 462,948
Interest on Other Loans 7,674 24,270
Liquidation Operations
Salaries 5,114 672,502
Indirect Costs (Note 8) 137,979 7,662,271
Travel 0 115,290
Legal Fees 0 1,330,750
Other Professional Fees 10,198 6,464,751
Contractor Billed Expenses 12,946 1,899,923
Contractor Incentive Fees 0 0
Other Expenses 77,462 2,578,684
Total Operating Expenses 251,375 21,211,388
Other Liquidation Expenses
Net Loss Sharing 0 0
Litigation Settlement Expenses 0 110,000
Affordable Housing Subsidies 0 0
Total Other Liquidation Expenses 0 110,000
Total Liquidation Expenses $251,375 $21,321,388
Net Income/(Loss) from Operations ($718,218) ($1,639,397)
Gain/(Loss) on Disposition of Assets
Consumer Loans 0 (3,008,711)
Commercial Loans 0 (15,333,893)
Securities 0 (3,194,923)
Real Estate Mortgages 0 (25,855,620)
Owned Assets (187,500) (7,288,310)
Other Assets/Judgments 0 (597,144)
Net Investment in Subsidiaries (18,057) 412,258
Total Gain/(Loss) on Disposition of Assets ($205,557) ($54,866,343)
Owned Assets
Income from Owned Assets 0 550,768
Less Operating Expenses 8,643 1,077,244
Net Owned Asset Income/(Loss) ($8,643) ($526,477)
Income/(Loss) of the Liquidation ($932,418) ($57,032,217)
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS:
1. Basis of Accounting: The FDI Act authorizes the FDIC, as receiver for a
failed insured depositary institution ("Receivership"), to administer and
wind up the affairs of such institution. Financial statement presentations
are based on the premises that the assets of the receivership will be
liquidated and proceeds distributed to the institution's creditors over
time. While the average receivership life span 3-5 years, receiverships may
require longer time frames to conclude.
At the onset of a receivership, the failed Institution's financial records
are reviewed and restated to establish a new basis of accountability. The
assets and liabilities of the failed institution are adjusted to remove all
estimated losses, accruals and deferrals. These include loss allowances;
partial write downs; prepaid, deferred or accrued expenses having no
recovery value; and accrued or deferred income. As applicable, the
collection value of assets as stated in the resolution agreements is also
reflected. Restated balances are shown as the Inception Balance in the
Statement of Assets and Liabilities in Liquidation. The receivership's
Estimated Loss on Assets, Estimated Liquidation Expenses and estimates of
certain other probable losses are not included as a part of the Inception
Balance data.
After inception, FDIC's liquidation valuation and measurement practices are
adopted for all assets and liabilities. As appropriate, estimates of asset
values, liabilities, income and expenses are reflected in the financial
statements. These values are updated over time to compensate for
uncertainties inherent in the estimation process. To present accurately the
results of receivership operations, accruals are used when estimates of
prospective cash flows are reasonably certain. Where significant
uncertainties concerning the realization of a transaction exist, the
transaction is recorded when cash is received or disbursed.
2. Valuation of Assets/Loss Allowances: An Estimated Loss on Assets is
provided when anticipated future cash proceeds from asset dispositions are
less than book values. The Estimated Loss on Assets also includes
anticipated asset holding and disposition expenses. Estimates of future
cash proceeds from assets in liquidation are based on recovery rates
developed by asset type for all receiverships at a fund level based on a
statistical sampling and extrapolation process. This may cause the
estimates of losses for this receivership to vary from the actual losses
ultimately realized.
3. Recoveries from Uncertain Sources: Assets of the receivership generally
exclude potential collections from activities such as professional
liability actions. Significant uncertainties as to ultimate realization
prevent reasonable estimation of the amounts ultimately collectible.
Instead, these recoveries are generally recognized when cash is received.
4. Actual and Estimated Liabilities: The FDIC as receiver determines
(allows/disallows) claims and distributes proceeds, derived from the
disposition of the institution's assets, according to applicable law
governing the payment of creditor claims. Liability accounts are presented
at amounts which are due and payable as proven and pending (unproven)
claims against the receivership estate, operating liabilities and estimates
of other probable losses. Applicable law governing the priorities of
distributions may vary with the date the receivership was established and,
therefore, liabilities of the receivership estimate are not ranked in order
of preference or payment priority.
Liabilities also may be estimated where the liability is deemed to exist
but its amount is uncertain or subject to change over time. Examples
include, but are not limited to, liabilities that may arise from
<PAGE>
pending defensive litigation, loss sharing agreements and cross-guaranty
assessments. As with any estimate, the amount finally determined and
recorded as the liability of the receivership may vary from that recorded
on an estimated basis and may include additional amounts which could not be
accurately determined at an earlier date.
5. Estimated Interest on Claims: Applicable law may govern or direct the
payment of interest to creditors holding proven claims against the
receivership estimate, including the claim(s) held by the FDIC in its
Corporate capacity. Uncertainties exist as to the number of creditors whose
claims will ultimately be allowed, the priority classification of claims
under applicable law or regulations (whichever is relevant) and whether
creditors will receiver the principal amount of proven claims against the
receivership estimate. Interest is subordinated to all other claims and
estimated liabilities and is disbursed only after principal amounts are
paid in full. Therefore, for the purposes of these financial statements,
the estimated liability for interest, respective to claims and other
estimated liabilities are recognized only when its full or partial payment
becomes a possibility.
6. Reasonably Possible Litigation Losses: In addition to the amounts recorded
for probable litigation liabilities, the FDIC Legal Division has determined
that the receivership may be subject to reasonable possible losses from
unresolved litigation. Reasonably possible losses differ from those which
are probable in that there is a lesser likelihood of loss and payment from
the receivership. As such, reasonably possible losses are not accrued in
the accounts until the FDIC, through periodic review, determines either
that the litigation settlement expense has been incurred or that the
likelihood of loss has become probable. While not recognized in the
Statement of Assets and Liabilities in Liquidation, FDIC management may use
all or part of the estimate of reasonably possible litigation losses to
determine the assets that must be retained by the receivership to satisfy
these potential obligations. The amount of reasonably possible losses is
shown at the bottom of the receivership's Statement of Assets and
Liabilities in Liquidation as a separate disclosure. Further, receiverships
may be subject to significant, additional probable or reasonably possible
losses from cases where uncertainties prevent a reasonable assessment of
the ultimate outcome and/or an estimate of the amount of loss which could
result.
7. Non-Cash Adjustments: Certain anticipated expenditures and losses are
recognized as non-cash adjustments to net assets. These adjustments include
the Estimated Loss on Assets, Estimated Liquidation Expenses, Estimated
interest on Claims, adjustments for claims recognized after closed and
other estimated receivership liabilities. Such estimates are reversed as
liquidation transactions are recognized in the Statement of Liquidation
Operations.
8. Indirect Cost (Statement of Operations): FDIC field personnel, assigned to
FDIC's sales centers and Field offices, are responsible for the asset
management and financial transactions generated from multiple receiverships
assigned to the location. Therefore, each receivership incurs indirect
liquidation cost in addition to costs charged directly. Such indirect costs
include employee benefit, occupancy and other receivership operating
expenses. Indirect expenses are allocated and billed to active
receiverships based upon liquidation activity as reflected, primarily, by
each receivership's direct and indirect salary charges. Other indirect,
Corporate level costs directly related to the liquidation program (such as
information processing, occupancy expenses and management costs) are
aggregated on a national basis and are also billed to receiverships on the
basis of the receivership's activity as reflected by direct and indirect
salary charges.
<PAGE>
Manually signed facsimile copies of the Letter of Transmittal will be
accepted. The Letter of Transmittal, certificates for Shares and any other
required documents should be sent or delivered by each holder of Common Stock of
Security Investments Group, Inc. or such holder's broker, dealer, commercial
bank, trust company or other nominee to the Depositary at one of its addresses
set forth below.
The Depositary for the Offer is:
IBJ Schroder Bank & Trust Company
By Mail: By Hand/Overnight Delivery:
P.O. Box 84 One State Street
Bowling Green Station New York, New York 10004
New York, New York 10274-0084 Attention: Securities Processing
Attention: Reorganization Department Window, SC-1
Fax: (212) 858-2611
Confirm Fax by Telephone:
(212) 858-2103
Questions and requests for assistance should be directed to the
Information Agent at its respective address or telephone numbers set forth
below. Additional copies of this Offer to Purchase, the Letter of Transmittal
and all other tender offer materials may be obtained from the Information Agent
as set forth below, and will be furnished promptly at the Purchasers' expense.
You may also contact your broker, dealer, commercial bank, trust company or
other nominee for assistance concerning the Offer.
The Information Agent for the Offer is:
MacKenzie
Partners, Inc.
156 Fifth Avenue
New York, New York 10010
(212)929-5500 (Call Collect)
or
Call Toll-Free (800)322-2885
LETTER OF TRANSMITTAL
To Tender Outstanding Shares of Common Stock, $.10 Par Value per Share
of
Security Investments Group, Inc.
Pursuant to the Offer to Purchase Up to
1,000,000 of Such Common Shares At a
Price of $2.00 per Share
Dated January 21, 1998
by
Alliance Standard III L.L.C. and Alliance Standard III Corp.
- --------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON TUESDAY, FEBRUARY 24, 1998,
UNLESS THE OFFER IS EXTENDED.
- --------------------------------------------------------------------------------
The Depositary for the Offer is:
IBJ SCHRODER BANK & TRUST COMPANY
Deliveries By Mail: Deliveries By Hand/Overnight Courier
P.O. Box 84, Bowling Green Station One State Street
New York, New York 10274-0084 New York, New York 10004
Attention: Reorganization Dep't Attention: Securities Processing
Window, SC-1
Fax: (212) 858-2611
Confirm Fax by Telephone: (212) 858-2103
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE WILL NOT CONSTITUTE A VALID DELIVERY, UNLESS WAIVED BY THE PURCHASERS. YOU
MUST SIGN THIS LETTER OF TRANSMITTAL WHERE INDICATED BELOW AND COMPLETE THE
SUBSTITUTE FORM W-9 PROVIDED BELOW.
1
<PAGE>
<TABLE>
<CAPTION>
DESCRIPTION OF SHARES TENDERED
- --------------------------------------------------------------------------------
<S> <C>
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S) SHARE CERTIFICATE NUMBERS (S) AND
(PLEASE FILL IN, IF BLANK, EXACTLY AS NAME(S) APPEARS AMOUNT OF SHARES TENDERED
ON SHARE CERTIFICATE(S)) (ATTACH LIST IF ADDITIONAL SPACE IS NEEDED)
SHARE CERTIFICATE AMOUNT OF
NUMBER(S)* SHARES**
</TABLE>
TOTAL SHARES:
* Need not be completed by holders delivering Shares by book-entry
transfer.
** Unless otherwise indicated, it will be assumed that all Share
Certificates delivered to the Depositary are being tendered hereby. See
Instruction 4.
- --------------------------------------------------------------------------------
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL
SHOULD BE READ CAREFULLY BEFORE THIS
LETTER OF TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be completed by holders if Share
Certificates (as defined below) are to be forwarded herewith or if delivery of
Shares is to be made by book-entry transfer to the Depositary's account at The
Depository Trust Company (the "Book-Entry Transfer Facility") pursuant to the
book-entry transfer procedure described in Section 2 of the Offer to Purchase
(as defined below). Delivery of documents to the Book-Entry Transfer Facility
does not constitute delivery to the Depositary.
Holders whose Share Certificates are not immediately available or who
cannot deliver their Share Certificates and all other documents required hereby
to the Depositary prior to the Expiration Date (as defined in Section 1 of the
Offer to Purchase) or who cannot complete the procedure for delivery by
book-entry transfer on a timely basis and who wish to tender their Shares must
do so pursuant to the guaranteed delivery procedure described in Section 2 of
the Offer to Purchase. See Instruction 2.
[ ] CHECK HERE IF SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO
THE DEPOSITARY'S ACCOUNT AT THE BOOK-ENTRY TRANSFER FACILITY AND
COMPLETE THE FOLLOWING:
Name of Tendering Institution
Account Number______________ Transaction Code Number____________
2
<PAGE>
[ ] CHECK HERE IF SHARES ARE BEING TENDERED PURSUANT TO A NOTICE
OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND
COMPLETE THE FOLLOWING. PLEASE ENCLOSE A PHOTOCOPY OF SUCH
NOTICE OF GUARANTEED DELIVERY.
Name(s) of Registered Holder(s):_______________________________
Window Ticket No. (if any):____________________________________
Date of Execution of Notice of Guaranteed Delivery:____________
Name of Institution which Guaranteed Delivery:_________________
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE INSTRUCTIONS SET
FORTH IN THIS LETTER OF TRANSMITTAL
CAREFULLY.
3
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to Alliance Standard III L.L.C. and
Alliance Standard III Corp. (collectively, the "Purchasers"), or either of them,
the above described number of shares of common stock, par value $.10 per share
(the "Shares," which term includes Shares evidenced in documentary form ("Share
Certificates") and Shares in book-entry form) of Security Investments Group,
Inc., a Delaware corporation (the "Company"), pursuant to the Purchasers' offer
to purchase up to 1,000,000 Shares, at a price of $2.00 per Share, net to the
seller in cash, without interest thereon (the "Offer Price"), upon the terms and
subject to the conditions set forth in the Offer to Purchase for Cash, dated
January 21, 1998 (the "Offer to Purchase"), receipt of which is hereby
acknowledged, and in this Letter of Transmittal (which, together with the Offer
to Purchase, each as amended from time to time, constitute the "Offer"). The
undersigned understands that, as more fully set forth in the Offer to Purchase,
the Purchasers reserve the right to purchase only up to 707,000 Shares if the
board of directors of the Company has not approved the Purchasers' acquisition
of Shares pursuant to this Offer. The undersigned further understands that the
Purchasers reserve the right to allocate between themselves and to transfer or
assign, in whole or from time to time in part, to one or more of their
affiliates, the right to purchase all or any portion of the Shares tendered
pursuant to the Offer.
Subject to, and effective upon, acceptance for payment of the Shares
tendered herewith in accordance with the terms of the Offer to Purchase
(including, if the Offer is extended or amended, the terms and conditions of
such extension or amendment), the undersigned hereby sells, assigns and
transfers to, or upon the order of, Purchasers all right, title and interest in
and to all the Shares that are being tendered hereby and all dividends,
distributions (including, without limitation, distributions of additional Shares
or rights therein) and rights declared, paid or distributed in respect of such
Shares after December 31, 1997 (collectively, "Distributions"), and irrevocably
appoints the Depositary the true and lawful agent and attorney-in-fact of the
undersigned with respect to such Shares and all Distributions, with full power
of substitution (such power of attorney being deemed to be an irrevocable power
coupled with an interest), to (i) deliver Share Certificates and Distributions,
or transfer ownership of Shares and Distributions on the account books
maintained by the Book-Entry Transfer Facility, together, in either case, with
all accompanying evidences of transfer and authenticity, to or upon the order of
Purchasers, (ii) present such Shares and Distributions for transfer on the books
of the Company, and (iii) receive all benefits and otherwise exercise all rights
of beneficial ownership of such Shares and Distributions, all in accordance with
the terms of the Offer.
By executing this Letter of Transmittal, the undersigned irrevocably
appoints Robert S. Jaffe and Michael L. Lewittes as proxies of the undersigned,
each with full power of substitution, to the full extent of the undersigned's
rights with respect to the Shares and Distributions (including any and all
securities into which or for which the Shares or other securities included in
the Distributions may now or at any time hereafter be convertible or
exchangeable) tendered by the undersigned and accepted for payment by the
Purchasers. All such proxies shall be considered coupled with an interest in the
tendered Shares. This appointment will be effective if, when, and only to the
extent that the Purchasers accept such Shares and Distributions for payment
pursuant to the Offer. Upon such acceptance for payment, all prior proxies,
powers of attorney, and consents given by the undersigned with respect to such
Shares and Distributions will, without further action, be revoked, and no
subsequent powers of attorney, proxies or revocations may be given nor any
subsequent written consent executed by the undersigned (and, if given or
executed, will not be deemed to be effective) with respect thereto. The
designees of the Purchasers named above will, with respect to the Shares and
Distributions, be empowered to exercise all voting and other rights of the
undersigned as they in their sole discretion may deem proper at any annual or
special meeting of the holders of the Shares and Distributions, or any
adjournment or postponement thereof, by written consent in lieu of any such
meeting or otherwise, and the Purchasers reserve the right to require that, in
order for Shares and Distributions to be deemed validly tendered,
4
<PAGE>
immediately upon the Purchasers' acceptance for payment of such Shares, the
Purchasers must be able to exercise full voting rights with respect to such
Shares and Distributions.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, sell, assign and transfer the Shares
tendered hereby and all Distributions, and that when such Shares are accepted
for payment by Purchasers, Purchasers or one of them will acquire good,
marketable and unencumbered title thereto and to all Shares and Distributions,
free and clear of all liens, restrictions, charges and encumbrances, and that
none of such Shares or Distributions will be subject to any adverse claim. The
undersigned, upon request, shall execute and deliver all additional documents
deemed by the Depositary or Purchasers to be necessary or desirable to complete
the sale, assignment and transfer of the Shares tendered hereby and all
Distributions. In addition, the undersigned shall remit and transfer promptly to
the Depositary for the account of Purchasers all Distributions in respect of the
Shares tendered hereby, accompanied by appropriate documentation of transfer,
and, pending such remittance and transfer or appropriate assurance thereof,
Purchasers shall be entitled to all rights and privileges as owner of each such
Distribution and may withhold the entire purchase price of the Shares tendered
hereby, or deduct from such purchase price the amount or value of such
Distribution as determined by Purchasers in their absolute discretion.
No authority herein conferred or agreed to be conferred shall be
affected by, and all such authority shall survive, the death or incapacity of
the undersigned. All obligations of the undersigned hereunder shall be binding
upon the heirs, personal representatives, successors and assigns of the
undersigned. Except as otherwise stated in the Offer to Purchase, this tender is
irrevocable.
The undersigned understands that tenders of Shares pursuant to any one
of the procedures described in Section 2 of the Offer to Purchase and in the
instructions hereto will constitute the undersigned's acceptance of the terms
and conditions of the Offer. Purchasers' acceptance of such Shares for payment
will constitute a binding agreement between the undersigned and Purchasers upon
the terms and subject to the conditions of the Offer, including, without
limitation, the undersigned's representation and warranty that the undersigned
owns the Shares being tendered.
Unless otherwise indicated herein in the box below entitled "Special
Payment Instructions," please issue the check for the purchase price of all
Shares purchased, and return all Share Certificates evidencing Shares not
purchased or not tendered, in the name(s) of the registered holder(s) appearing
above under "Description of Shares Tendered." The undersigned understands and
agrees that if (i) less than all Shares evidenced by the Share Certificates
tendered hereby have been accepted for purchase, and (ii) the Company or its
transfer agent cannot reissue Share Certificates representing the portion of
Shares not tendered or not accepted for payment, then the Purchasers will
provide to the undersigned a certificate of beneficial interest in the Shares
that were not accepted for purchase.
Similarly, unless otherwise indicated in the box below entitled
"Special Delivery Instructions," please mail the check for the purchase price of
all Shares purchased and all Share Certificates or certificates of beneficial
interest evidencing Shares not tendered or not purchased (and accompanying
documents, as appropriate) to the address(es) of the registered holder(s)
appearing above under "Description of Shares Tendered." If the box entitled
"Special Payment Instructions" and/or "Special Delivery Instructions" are
completed, please issue the check for the purchase price of all Shares purchased
and return all Share Certificates evidencing Shares not purchased or not
tendered, or certificates of beneficial interest in respect thereof, in the
name(s) of, and/or mail such check and Share Certificates or certificates of
beneficial interest to, the
5
<PAGE>
person(s) so indicated. The undersigned recognizes that Purchasers have no
obligation, pursuant to the Special Payment Instructions, to transfer any Shares
from the name of the registered holder(s) thereof if Purchasers do not purchase
any of the Shares tendered hereby.
<TABLE>
<CAPTION>
SPECIAL PAYMENT INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS
FOR SHARES FOR SHARES
(See Instructions 1, 5, 6 and 7) (See Instructions 1, 5 and 7)
<S> <C>
To be completed ONLY if the check for the To be completed ONLY if the check for the
purchase price of Shares purchased or Share purchase of Shares purchased or Share
Certificates or certificates of beneficial interest Certificates or certificates of beneficial interest
evidencing Shares not tendered or not purchased evidencing Shares not tendered or not purchased
are to be issued in the name of someone other than are to be mailed to someone other than the
the undersigned. undersigned, or the undedrsigned at an address
other than that shown under "Description of Shares
Tendered."
Issue check and/or Share Certificate(s) or
certificates of beneficial interest to: Mail check and/or Share Certificate(s) or certificates
of beneficial interest to:
Please Print: Please Print:
Name:______________________________________ Name:_________________________________________
Address:___________________________________ Address:______________________________________
___________________________________________ ______________________________________________
(Zip Code) (Zip Code)
Taxpayer ID or Soc. Sec. No.: Taxpayer ID or Soc. Sec. No.:
(See Substitute Form W-9 included herein.) (See Substitute Form W-9 included herein.)
IMPORTANT: HOLDERS MUST SIGN HERE
(Also Please Complete Substitute Form W-9 Included Herein)
Date:_________________________ __________________________________
Signature*
Date:_________________________ __________________________________
Signature*
</TABLE>
*Must be signed by registered holder(s) exactly as name(s) appear(s) on Share
Certificates or on a security position listing or by a person or persons
authorized to become registered holder(s) by certificates and documents
transmitted herewith. If signature is by a trustee, executor, administrator,
guardian, attorney-in-fact, officer of a corporation or other person acting in a
fiduciary or representative capacity, please provide the following information
(See Instruction 5):
6
<PAGE>
Please Print: Please Print:
Name:___________________________ Name:___________________________
Address:________________________ Address:________________________
________________________________ ________________________________
________________________________ _________________________________
(Zip Code) (Zip Code)
Area Code and Telephone No.: Area Code and Telephone No.:
________________________________ _________________________________
Taxpayer ID or Soc. Sec. No.: Taxpayer ID or Soc. Sec. No.:
(See Substitute Form W-9 (See Substitute Form W-9
included herein.) included herein.)
GUARANTEE OF SIGNATURE(S)
(If Required--See Instructions 1 and 5)
FOR USE BY FINANCIAL INSTITUTIONS ONLY. PLACE MEDALLION GUARANTEE IN SPACE
BELOW.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
[ ] Check if your tender of Shares are solicited by broker. Enter name and
address of broker below.
Name of Broker:_________________________________________________________________
Name of Firm____________________________________________________________________
Address of Firm_________________________________________________________________
________________________________________________________________________________
7
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. All signatures on this Letter of
Transmittal must be guaranteed by a firm which is a member of a registered
national securities exchange or of the National Association of Securities
Dealers, Inc., or by a financial institution (including most commercial banks,
savings and loan associations and brokerage houses) that is a participant in the
Securities Transfer Agents Medallion Program, the New York Stock Exchange
Medallion Signature Guarantee Program or the Stock Exchange Medallion Program
(an "Eligible Institution"), unless (i) this Letter of Transmittal is signed by
the registered holder(s) of the Shares (which term, for purposes of this
document, shall include any participant in the Book-Entry Transfer Facility
whose name appears on a security position listing as the owner of Shares)
tendered hereby and such holder(s) has (have) completed neither the box entitled
"Special Payment Instructions" nor the box entitled "Special Delivery
Instructions" on the reverse hereof, or (ii) such Shares are tendered for the
account of an Eligible Institution. See Instruction 5.
2. DELIVERY OF LETTER OF TRANSMITTAL AND SHARE CERTIFICATES. This
Letter of Transmittal is to be used if Share Certificates are to be forwarded
herewith, or if Shares are to be delivered by book-entry transfer pursuant to
the procedure set forth in Section 2 of the Offer to Purchase. Share
Certificates evidencing Shares tendered in certificate form, or a confirmation
of a book-entry transfer into the Depositary's account at the Book-Entry
Transfer Facility of all Shares tendered by book-entry transfer, and a properly
completed and duly executed Letter of Transmittal (or facsimile thereof), and
any other documents required by this Letter of Transmittal, or an Agent's
Message in the case of book-entry transfers, must be received by the Depositary
at one of its addresses set forth on the reverse hereof prior to the Expiration
Date (as defined in the Offer to Purchase). If Share Certificates are forwarded
to the Depositary in multiple deliveries, a properly completed and duly executed
Letter of Transmittal must accompany each such delivery. Holders whose Share
Certificates are not immediately available, who cannot deliver their Share
Certificates and all other required documents to the Depositary prior to the
Expiration Date, or who cannot complete the procedure for delivery by book-entry
transfer on a timely basis may tender their Shares pursuant to the guaranteed
delivery procedure described in Section 2 of the Offer to Purchase. Pursuant to
such procedure: (i) such tender must be made by or through an Eligible
Institution; (ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form made available by Purchasers, must be
received by the Depositary prior to the Expiration Date; and (iii) the Share
Certificates in proper form for transfer by delivery, or a confirmation of a
book-entry transfer into the Depositary's account at the Book-Entry Transfer
Facility of all Shares tendered by book-entry transfer, in each case together
with a Letter of Transmittal (or a facsimile thereof), properly completed and
duly executed, with any required signature guarantees, and any other documents
required by this Letter of Transmittal, or an Agent's Message in the case of
book-entry transfers, must be received by the Depositary within three trading
days after the date of execution of such Notice of Guaranteed Delivery, all as
described in Section 2 of the Offer to Purchase.
THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, SHARE
CERTIFICATES AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE
BOOK-ENTRY TRANSFER FACILITY, IS AT THE OPTION AND RISK OF THE TENDERING HOLDER,
AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE
DEPOSITARY. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT
REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME
SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
8
<PAGE>
INSTRUCTIONS (cont'd)
No alternative, conditional or contingent tenders will be accepted.
By execution of this Letter of Transmittal (or a facsimile hereof), all
tendering holders waive any right to receive any notice of the acceptance of
their Shares for payment.
3. INADEQUATE SPACE. If the space provided herein under "Description
of Shares Tendered" is inadequate, the Share Certificate numbers, the amount of
Shares evidenced by such Share Certificates and the amount of Shares tendered
should be listed on a separate schedule and attached hereto.
4. PARTIAL TENDERS (NOT APPLICABLE TO HOLDERS WHO TENDER BY
BOOK-ENTRY TRANSFER). If fewer than all the Shares evidenced by any Share
Certificates delivered to the Depositary herewith are to be tendered hereby,
fill in the amount of Shares which are to be tendered in the box entitled
"Amount of Shares Tendered." In such cases, new Share Certificates or
certificates of beneficial interest evidencing the remainder of Shares that were
evidenced by the Share Certificates delivered to the Depositary herewith will be
sent to the address of the person(s) signing this Letter of Transmittal, unless
otherwise provided in the box entitled "Special Delivery Instructions" on the
reverse hereof, as soon as practicable after the expiration or termination of
the Offer. All Shares evidenced by Share Certificates delivered to the
Depositary will be deemed to have been tendered unless otherwise indicated.
5. SIGNATURES ON LETTER OF TRANSMITTAL; STOCK POWERS AND
ENDORSEMENTS. If this Letter of Transmittal is signed by the registered
holder(s) of the Shares tendered hereby, the signature(s) must correspond with
the name(s) as written on the face of the Share Certificates evidencing such
Shares without alteration, enlargement or any other change whatsoever. If any
Share tendered hereby is owned of record by two or more persons, all such
persons must sign this Letter of Transmittal.
If any of the Shares tendered hereby are registered in the
names of different holders, it will be necessary to complete, sign and submit as
many separate Letters of Transmittal as there are different registrations of
such Shares.
If this Letter of Transmittal is signed by the registered
holder(s) of the Shares tendered hereby, no endorsements of Share Certificates
or separate stock powers are required, unless payment is to be made to, or Share
Certificates evidencing Shares not tendered or not purchased are to be issued in
the name of, a person other than the registered holder(s), in which case, the
Share Certificates evidencing the Shares tendered hereby must be endorsed or
accompanied by appropriate stock powers, in either case signed exactly as the
name(s) of the registered holder(s) appear(s) on such Share Certificate(s).
Signatures on such Share Certificate(s) and stock powers must be guaranteed by
an Eligible Institution.
If this Letter of Transmittal is signed by a person other than
the registered holder(s) of the Shares tendered hereby, the Share Certificate(s)
evidencing the Shares tendered hereby must be endorsed or accompanied by
appropriate stock powers, in either case signed exactly as the name(s) of the
registered holder(s) appear(s) on such Share Certificate(s). Signatures on such
Share Certificate(s) and stock powers must be guaranteed by an Eligible
Institution.
If this Letter of Transmittal or any Share Certificate or
stock power is signed by a trustee, executor, administrator, guardian,
attorney-in-fact, officer of a corporation or other person
9
<PAGE>
INSTRUCTIONS (cont'd)
acting in a fiduciary or representative capacity, such person should so indicate
when signing, and proper evidence satisfactory to Purchasers of such person's
authority so to act must be submitted.
6. SECURITIES TRANSFER TAXES. Except as otherwise provided in this
Instruction 6, the Purchasers will pay all securities transfer taxes with
respect to the sale and transfer of any Shares to it or its order pursuant to
the Offer. If, however, payment of the purchase price of any Shares purchased is
to be made to, or Share Certificates or certificates of beneficial interest
evidencing Shares not tendered or not purchased are to be issued in the name of,
a person other than the registered holder(s), the amount of any securities
transfer taxes (whether imposed on the registered holder(s), such other person
or otherwise) payable on account of the transfer to such other person will be
deducted from the purchase price of such Shares purchased, unless evidence
satisfactory to Purchasers of the payment of such taxes, or exemption therefrom,
is submitted. Except as provided in this Instruction 6, it will not be necessary
for transfer tax stamps to be affixed to the Share Certificates evidencing the
Shares tendered hereby.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If a check for the
purchase price of any Shares tendered hereby is to be issued, or Share
Certificate(s) or certificate(s) of beneficial interest evidencing Shares not
tendered or not purchased are to be issued, in the name of a person other than
the person(s) signing this Letter of Transmittal, or if such check or any such
Share Certificate is to be sent to someone other than the person(s) signing this
Letter of Transmittal or to the person(s) signing this Letter of Transmittal but
at an address other than that shown in the box entitled "Description of Shares
Tendered" on the reverse hereof, the appropriate boxes in this Letter of
Transmittal must be completed.
8. WAIVER OF CONDITIONS. The conditions to the Offer may be waived by
the Purchasers in whole or in part at any time and from time to time in their
absolute discretion.
9. QUESTIONS AND REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES.
Questions and requests for assistance may be directed to the Information Agent
at its address or telephone number set forth on the back page hereof. Additional
copies of the Offer to Purchase, this Letter of Transmittal and the Notice of
Guaranteed Delivery may be obtained from the Information Agent or from brokers,
dealers, commercial banks or trust companies.
10. SUBSTITUTE FORM W-9. Each tendering holder is required to provide
the Depositary with a correct Taxpayer Identification Number ("TIN") on the
Substitute Form W-9 which is provided under "Important Tax Information" below,
and to certify, under penalties of perjury, that such number is correct and that
such holder is not subject to backup withholding of federal income tax. If a
tendering holder has been notified by the Internal Revenue Service that such
holder is subject to backup withholding, such holder must cross out item (2) of
the Certification box of the Substitute Form W-9, unless such holder has since
been notified by the Internal Revenue Service that such holder is no longer
subject to backup withholding. Failure to provide the information on the
Substitute Form W-9 may subject the tendering holder to 31% federal income tax
withholding on the payment of the purchase price of all Shares purchased from
such holder. If the tendering holder has not been issued a TIN and has applied
for one or intends to apply for one in the near future, such holder should write
"Applied For" in the space provided for the TIN in Part I of the Substitute Form
W-9, and sign and date the Substitute Form W-9. If "Applied For" is written in
Part I and the Depositary is not provided with a TIN within 60 days, the
Depositary will withhold 31% on all payments of the purchase price to such
holder until a TIN is provided to the Depositary.
10
<PAGE>
INSTRUCTIONS (cont'd)
11. LOST SHARE CERTIFICATES. If the Share Certificates which a
registered holder wants to surrender have been lost or destroyed, such tendering
holder should indicate such by writing the word "Lost" under the column labeled
"Share Certificate Number(s)" in the box labeled "Description of Shares
Tendered." By indicating that such Share Certificates are lost, the tendering
holder shall be deemed to have made the following representations and warranties
to, and agreements with, the Purchasers: (i) the undersigned is the record owner
of the Shares being tendered pursuant to this Letter of Transmittal, (ii) the
undersigned has lost the Share Certificates representing the Shares being
tendered pursuant to this Letter of Transmittal, (iii) the undersigned has the
power and authority to surrender the Shares being tendered pursuant to this
Letter of Transmittal and the Purchasers will acquire good and valid title
thereto, free and clear of any liens, claims and encumbrances, (iv) the
undersigned, upon request, will execute and deliver any additional documents
deemed by the Purchasers to be necessary or desirable in connection with the
surrender of the Shares being tendered pursuant to this Letter of Transmittal
and (v) the undersigned agrees to indemnify the Purchasers and their affiliates
from any losses and damages which they may incur arising out of the breach of
any of the foregoing representations and agreements.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR FACSIMILE HEREOF), PROPERLY
COMPLETED AND DULY EXECUTED (TOGETHER WITH ANY REQUIRED SIGNATURE GUARANTEES AND
SHARE CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY TRANSFER AND ALL OTHER REQUIRED
DOCUMENTS) OR A PROPERLY COMPLETED AND DULY EXECUTED NOTICE OF GUARANTEED
DELIVERY MUST BE RECEIVED BY THE DEPOSITARY PRIOR TO THE EXPIRATION DATE (AS
DEFINED IN THE OFFER TO PURCHASE).
11
<PAGE>
IMPORTANT TAX INFORMATION
Under the federal income tax law, a holder whose tendered Shares are
accepted for payment is required by law to provide the Depositary (as payer)
with such holder's correct TIN on Substitute Form W-9 below. If such holder is
an individual, the TIN is such holder's social security number. If the
Depositary is not provided with the correct TIN, the holder may be subject to a
$50 penalty imposed by the Internal Revenue Service. In addition, payments that
are made to such holder with respect to Shares purchased pursuant to the Offer
may be subject to backup withholding of 31%.
Certain holders (including, among others, all corporations and
certain foreign individuals) are not subject to these backup withholding and
reporting requirements. In order for a foreign individual to qualify as an
exempt recipient, such individual must submit a Form W-8, Certificate of Foreign
Status, signed under penalties of perjury, attesting to such individual's exempt
status. Forms of such statements can be obtained from the Depositary. See the
enclosed Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9 for additional instructions.
If backup withholding applies, the Depositary is required to withhold
31% of any payments made to the holder. Backup withholding is not an additional
tax. Rather, the tax liability of persons subject to backup withholding will be
reduced by the amount of tax withheld. If withholding results in an overpayment
of taxes, a refund may be obtained from the Internal Revenue Service.
Purpose of Substitute Form W-9: To prevent backup withholding on
payments that are made to a holder with respect to Shares purchased pursuant to
the Offer, the holder is required to notify the Depositary of such holder's
correct TIN by completing the form below certifying (a) that the TIN provided on
Substitute Form W-9 is correct (or that such holder is awaiting a TIN), and (b)
that (i) such holder has not been notified by the Internal Revenue Service that
such holder is subject to backup withholding as a result of a failure to report
all interest or dividends or (ii) the Internal Revenue Service has notified such
holder that such holder is no longer subject to backup withholding.
What Number to Give the Depositary: The holder is required to give
the Depositary the social security number or employer identification number of
the record holder of the Shares tendered hereby. If the Shares are in more than
one name or are not in the name of the actual owner, consult the enclosed
Guidelines for Certification of Taxpayer Identification Number on Substitute
Form W-9 for additional guidance on which number to report. If the tendering
holder has not been issued a TIN and has applied for a number or intends to
apply for a number in the near future, the holder should write "Applied For" in
the space provided for the TIN in Part 1, and sign and date the Substitute Form
W-9. If "Applied For" is written in Part I and the Depositary is not provided
with a TIN within 60 days, the Depositary will withhold 31% of all payments of
the purchase price to such holder until a TIN is provided to the Depositary.
12
<PAGE>
ALL TENDERING HOLDERS MUST COMPLETE THE FOLLOWING:
PAYER'S NAME: IBJ SCHRODER BANK & TRUST COMPANY
(See Instruction 10)
<TABLE>
<S> <C> <C>
SUBSTITUTE PART I--Taxpayer Identification Number-- Social Security Number
Form W-9 Enter taxpayer identification number in the
box at right. (For most individuals, this is ---------------------------
For all accounts your social security number. If you do not
have a number, see Obtaining a Number in OR
the enclosed Guidelines.) Certify by signing
and dating below. Note: If the account is in Employer I.D. Number
more than one name, see the chart in the
enclosed Guidelines to determine which ----------------------------
number to give the payer.
DEPARTMENT OF PART II--For Payees Exempt From Backup
THE TREASURY Withholding, see the enclosed Guidelines and
INTERNAL REVENUE complete as instructed therein.
SERVICE
CERTIFICATION--Under penalties of perjury, I
certify that:
PAYER'S REQUEST
FOR TAXPAYER (1) The number shown on this form is my
IDENTIFICATION correct Taxpayer Identification Number, or I
NUMBER am waiting for a number to be issued to me,
and
(2) I am not subject to backup withholding
either because I have not been notified by the
Internal Revenue Service (the "IRS") that I am
subject to backup withholding as a result of
failure to report all interest or dividends,
or the IRS has notified me that I am no longer
subject to backup withholding.
CERTIFICATE INSTRUCTIONS--You must cross out
item (2)above if you have been notified by the
IRS that you are subject to backup withholding
because of under reporting interest or
dividends on your tax return. However, if
after being notified by the IRS that you were
subject to backup withholding you received
another notification from the IRS that you are
no longer subject to backup withholding, do
not cross out item (2). (Also see instructions
in the enclosed Guidelines.)
SIGNATURE:
----------------------------------------------
DATE:___________________________________, 1998
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE
OFFER.
PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF
TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR
ADDITIONAL DETAILS.
13
<PAGE>
- --------------------------------------------------------------------------------
The Information Agent for the Offer is:
MacKenzie Partners, Inc.
(800) 322-2885
(Toll Free)
(212) 929-5500
(Call Collect)
JANUARY 21, 1998
- --------------------------------------------------------------------------------
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF OUTSTANDING COMMON STOCK, $.10 PAR VALUE PER SHARE
OF
SECURITY INVESTMENTS GROUP, INC.
PURSUANT TO THE OFFER TO PURCHASE
UP TO 1,000,000 SHARES OF SUCH COMMON STOCK, AT A PRICE OF $2.00 NET PER SHARE
DATED JANUARY 21, 1998
BY
ALLIANCE STANDARD III L.L.C. AND ALLIANCE STANDARD III CORP.
As set forth in Section 2 of the Offer to Purchase (as defined below),
this form or one substantially equivalent hereto must be used to accept the
Offer (as defined below) if Share Certificates (as defined below) evidencing
shares (the "Shares," which term includes Shares evidenced in documentary form
("Share Certificates") and Shares in book-entry form) of the outstanding common
stock, $.10 par value per share, of Security Investments Group, Inc., a Delaware
corporation (the "Company"), are not immediately available, or if the procedure
for book-entry transfer cannot be completed on a timely basis, or if time will
not permit all required documents to reach the Depositary prior to the
Expiration Date (as defined in the Offer to Purchase). This form may be
delivered by hand to the Depositary or transmitted by telegram, facsimile
transmission or mail to the Depositary and must include a signature guarantee by
an Eligible Institution (as defined in the Offer to Purchase). See Section 2 of
the Offer to Purchase.
The Depositary for the Offer is: IBJ SCHRODER BANK & TRUST COMPANY
Address for Delivery By Mail: Address for Delivery By Hand/
Box 84, Bowling Green Station Overnight Courier
New York, New York 10274-0084 One State Street
Attention: Reorganization Department New York, New York 10004
Attention: Securities
Processing Window, SC-1
Fax: (212) 858-2611
Confirm Fax by Telephone: (212) 858-2103
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS, OR TRANSMISSION OF INSTRUCTIONS BY A
FACSIMILE, OTHER THAN AS SET FORTH ABOVE, DOES NOT CONSTITUTE A VALID DELIVERY
UNLESS WAIVED BY THE PURCHASERS.
This form is not to be used to guarantee signatures. If a signature on
a Letter of Transmittal is required to be guaranteed by an Eligible Institution
under the instructions thereto, such signature guarantee must appear in the
applicable space provided in the signature box on the Letter of Transmittal.
1
<PAGE>
LADIES AND GENTLEMEN:
The undersigned hereby tenders to Alliance Standard III L.L.C., and
Alliance Standard III Corp., (collectively, the "Purchasers"), upon the terms
and subject to the conditions set forth in the Purchasers' Offer to Purchase
dated January 21, 1998 (the "Offer to Purchase") and the related Letter of
Transmittal, receipt of which is hereby acknowledged, the number of Shares (as
such term is defined in the Offer to Purchase) set forth below, all pursuant to
the guaranteed delivery procedures set forth in Section 2 of the Offer to
Purchase.
(PLEASE PRINT)
Amount of Shares
---------------------------------------------------------------
Name(s) of Record Holder(s):
----------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Certificate Nos. (if available):
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Address(es):
--------------------------------------------------------------------
(ZIP CODE)
Area Code and Tel. No.:
---------------------------------------------------------
(Check box below if Shares will be tendered by book-entry transfer)
[ ] The Depository Trust Company
Signature(s):
-------------------------------------------------------------------
- --------------------------------------------------------------------------------
Account Number
------------------------------------------------------------------
- --------------------------------------------------------------------------------
Dated: ________________
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a participant in the Security Transfer Agent's
Medallion Program, the New York Stock Exchange Medallion Signature Guarantee
Program or the Stock Exchange Medallion Program, hereby guarantees to deliver to
the Depositary either the Share Certificates representing the Shares tendered
hereby, in proper form for transfer, or a Book-Entry Confirmation with respect
to such Shares, in any such case together with a properly completed and duly
executed Letter of Transmittal (or facsimile thereof), with any
2
<PAGE>
required signature guarantees, or an Agent's Message, and any other required
documents within three trading days after the date hereof.
The Eligible Institution that completes this form must communicate the
guarantee to the Depositary and must deliver the Letter of Transmittal and Share
Certificates to the Depositary within the time period shown herein. Failure to
do so could result in a financial loss to such Eligible Institution. All terms
used herein have the meanings set forth in the Offer to Purchase. .
(PLEASE PRINT)
Name of Firm:
-------------------------------------------------------------------
- --------------------------------------------------------------------------------
(AUTHORIZED SIGNATURE)
Address:
------------------------------------------------------------------------
(ZIP CODE)
Name:
---------------------------------------------------------------------------
Title:
--------------------------------------------------------------------------
Area Code and Tel. No.:
---------------------------------------------------------
Dated:
--------------------------------------------------------------------------
NOTE: DO NOT SEND SHARE CERTIFICATES WITH THIS NOTICE; SHARE CERTIFICATES
SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL.
3
IBJ Schroder Bank & Trust Company
New York, New York 10004
Notice to Brokers, et al. Regarding the Offer to Purchase for Cash:
Up to 1,000,000 Outstanding Shares of Common Stock, $.10 Par Value Per Share,
of
Security Investments Group, Inc.
At a Price of $2.00 Net per Share
By
Alliance Standard III L.L.C. and Alliance Standard III Corp.
- --------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON TUESDAY, FEBRUARY 24, 1998,
UNLESS THE OFFER IS EXTENDED.
- --------------------------------------------------------------------------------
To Brokers, Dealers, Commercial Banks, Trust Companies
and Other Nominees:
We have been appointed to act as Depositary in connection with the
offer by Alliance Standard III L.L.C. and Alliance Standard III Corp.
(collectively, the "Purchasers"), to purchase up to the amount of securities
described above (the "Shares") issued by Security Investments Group, Inc., a
Delaware corporation (the "Company"), at the price set forth above, net to the
seller in cash, upon the terms and subject to the conditions set forth in the
Offer to Purchase for Cash, dated January 21, 1998 (the "Offer to Purchase"),
and in the related Letter of Transmittal (which collectively constitute the
"Offer").
We enclose copies of the following documents:
1. The Offer to Purchase;
2. The Letter of Transmittal to be used by holders of the
Shares in accepting the Offer;
3. A printed form of letter which you may send to your clients
for whose accounts you hold Shares in your name or in the name of your
nominee, with space provided for obtaining such clients' instructions
with regard to the Offer;
4. The Notice of Guaranteed Delivery to be used to accept the
Offer if certificates evidencing the Shares and all other required
documents cannot be delivered to the Depositary by the Expiration Date
(as defined in the Offer to Purchase);
5. Guidelines of the Internal Revenue Service for
certification of Taxpayer Identification Number on Substitute Form W-9;
and
6. A return envelope addressed to the Depositary.
1
<PAGE>
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 Tuesday, February 24, 1998, unless extended.
The Offer is conditioned upon, among other things, the absence
(immediately prior to the Expiration Date) of any pending or threatened legal
actions or proceedings that would, in the absolute judgment of the Purchasers,
prohibit the Offer or have a material adverse effect on the assets, business or
prospects of the Company or the outcome of the Action (as defined in the Offer).
In order to take advantage of the Offer, a duly executed and properly
completed Letter of Transmittal and any signature guarantees or other required
documents should be sent to the Depositary, and certificates representing the
tendered Shares should be delivered to the Depositary, all in accordance with
the instructions set forth in the Letter of Transmittal and the Offer to
Purchase.
If holders of Shares wish to tender, but it is impracticable for them
to forward their certificates prior to the Expiration Date or to comply with the
book-entry transfer procedures on a timely basis, a tender may be effected by
following the guaranteed delivery procedures specified in "Section 2, Procedures
for Tendering Shares" in the Offer to Purchase.
The Purchasers will pay soliciting dealer's fees of $0.20 per Share to
brokers, dealers and other persons for soliciting tenders of Shares from their
clients pursuant to the Offer. The Purchasers will reimburse you for customary
mailing and handling expenses incurred by you in forwarding any of the enclosed
materials to your clients. The Purchasers will pay or cause to be paid any
transfer taxes payable on the transfer of Shares to it, except as otherwise
provided in Instruction 6 of the Letter of Transmittal.
Additional copies of the enclosed materials may be obtained from
MacKenzie Partners, Inc., the Information Agent.
Any inquiries you may have with respect to the Offer should be
addressed to the Information Agent at its address and telephone number set forth
on the back cover of the Offer to Purchase.
Very truly yours,
IBJ SCHRODER BANK & TRUST COMPANY
---------------------------
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR
ANY PERSON AS AN AGENT OF THE DEPOSITARY, THE PURCHASERS, ANY AFFILIATES OF THE
PURCHASERS, OR THE INFORMATION AGENT, OR AUTHORIZE YOU OR ANY OTHER PERSON TO
MAKE ANY STATEMENTS ON BEHALF OF ANY OF THEM WITH RESPECT TO THE OFFER, EXCEPT
FOR STATEMENTS EXPRESSLY MADE IN THE OFFER TO PURCHASE OR THE LETTER OF
TRANSMITTAL.
2
Regarding the Offer to Purchase for Cash:
Up to 1,000,000 Outstanding Shares of Common Stock, $.10 Par Value per Share,
of
SECURITY INVESTMENTS GROUP, INC.
At a Price of $2.00 Net per Share
By
Alliance Standard III L.L.C. and Alliance Standard III Corp.
- --------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON TUESDAY, FEBRUARY 24, 1998,
UNLESS THE OFFER IS EXTENDED.
- --------------------------------------------------------------------------------
To our Clients:
Enclosed for your consideration is an Offer to Purchase for Cash dated
January 21, 1998, and related Letter of Transmittal (which, as amended from time
to time, together constitute the "Offer") relating to an offer by Alliance
Standard III L.L.C. ("Purchaser LLC") and Alliance Standard III Corp.
("Purchaser Corp.," and collectively with Purchaser LLC, the "Purchasers"), to
purchase up to 1,000,000 Outstanding Shares (the "Shares") of Common Stock of
Security Investments Group, Inc. (the "Company") at $2.00 net per Share.
The Offer for the Shares is net to the seller in cash, without interest
thereon, upon the terms and subject to the conditions set forth in the Offer to
Purchase and in the related Letter of Transmittal. A tender of such Shares by
you can be made only through us on your behalf, 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 are hereby requesting instructions as to whether you wish to tender
any or all of your Shares held by us for your account upon the terms and subject
to the conditions set forth in the Offer. Your attention is invited to the
following:
1. The tender price is $2.00 per Share, net to the seller in
cash.
2. The Offer and withdrawal rights will expire at 12:00
Midnight, New York City time, on Tuesday, February 24, 1998, unless
extended (the "Expiration Date").
3. The Offer is being made for up to 1,000,000 Shares,
provided, however, that the Purchasers have reserved the right to
accept for payment only up to 707,000 Shares if the Company's board of
directors has not approved the Purchasers' acquisitions of Shares
pursuant to the Offer.
4. The Offer is conditioned upon, among other things, the
requirement that there shall not have occurred any decision, action,
development, event or other circumstance in the Action (as defined in
the Offer to Purchase) or in any legal proceeding based upon similar
factual or legal allegations, including, without limitation, any action
seeking damages against the United States of America in connection with
"supervisory goodwill" accounting for financial institutions, which in
the sole judgment of the Purchasers could have an adverse effect on the
Shares or the Purchasers' eventual recovery with
1
<PAGE>
respect thereto, or the FDIC shall have issued receiver's certificates
or other similar documents to any holder of any claim with respect to
Security Savings Bank, including Security Investments Group, Inc.
5. Holders who tender Shares will not be obligated to pay
brokerage fees or commissions or, except as set forth in Instruction 6
of the Letter of Transmittal, transfer taxes on the purchase of Shares
by the pursuant to the Offer.
The foregoing is a summary of certain provisions of the Offer and is
qualified in its entirety by reference to the Offer.
If you wish to have us tender any or all of the Shares held by us for
your account, you should so instruct us by completing, executing and returning
to us the instruction form set forth on the following page hereof and forward
the same to us in ample time to permit us to submit a tender on your behalf
prior to the expiration of the Offer. The Offer is not being made to, nor will
tenders be accepted from or on behalf of, holders of Shares in any jurisdiction
is which the making or acceptance of the Offer would not be in compliance with
the laws of such jurisdiction.
2
<PAGE>
Instructions with Respect to the Offer to Purchase
for Cash:
Up to 1,000,000 Outstanding Shares of Common Stock, $.10 Par Value per Share,
of
SECURITY INVESTMENTS GROUP, INC.
At a Price of $2.00 per Share
By
Alliance Standard III L.L.C. and Alliance Standard III Corp.
The undersigned acknowledge(s) receipt of your letter and the enclosed
Offer to Purchase for Cash dated January 21, 1998, and the related Letter of
Transmittal (which, as amended from time to time, together constitute the
"Offer") relating to an offer by Alliance Standard III L.L.C. and Alliance
Standard III Corp. (collectively, the "Purchasers"), regarding the offer to
purchase for cash up to 1,000,000 outstanding shares (the "Shares") of common
stock, $.10 par value per Share, of Security Investments Group, Inc. at $2.00
net per Share, subject, however, to the Purchasers' right to accept for payment
only up to 707,000 Shares if the Company's board of directors has not approved
the Purchasers' acquisitions of Shares pursuant to the Offer. The Offer is net
to the seller in cash, without interest thereon, upon the terms and subject to
the conditions set forth in the Offer.
This will instruct you to tender the Shares indicated below held by you
for the account of the undersigned, on the terms and subject to the conditions
set forth in the Offer.
Amount of Shares to be Tendered: Print Name and Address:
Shares
*Unless otherwise indicated, all Shares shall
be tendered.
- ----------------------------------------------------------
Sign Here:
Dated:
Signature(s)
3
<TABLE>
<CAPTION>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
Guidelines for Determining the Proper Identification Number to Give the Payer. - Social Security numbers
have nine digits separated by two hyphens: i.e. 000-00-0000. Employer Identification numbers have nine digits
separated by only one hyphen: i.e. 00-0000000. The table below will help determine the number to give the
payer.
- ------------------------------------------------------ ------------------------------------------------------------
Give the Give the EMPLOYER
For this type of account: SOCIAL SECURITY For this type of account: IDENTIFICATION
number of -- number of --
- ------------------------------------------------------- -----------------------------------------------------------
<S> <C> <C> <C>
1. An individual's account The individual 7. Corporate account The corporation
2. Two or more The actual owner of 8. Religious, charitable, or The organization
individuals (joint the account or, if educational organization
account) combined funds, any account
one of the
individuals(1)
3. Custodian account of a The minor(2) 9. Partnership account held The partnership
minor (Uniform Gift to in the name of the
Minors Act) business
4. a. The usual The grantor-trustee(1) 10. Association, club, or The organization
revocable savings other tax-exempt
trust account organization
(grantor is also
trustee)
b. So-called trust The actual owner(1)
account that is not
a legal or valid
trust under State
law
5. Sole proprietorship The owner(4) 11. A broker or registered The broker or nominee
account nominee
6. A valid trust, estate, or The legal entity (Do 12. Account with the The public entity
pension trust not furnish the Department of
identifying number of Agriculture in the name
the personal of a public entity (such
representative or as a State or local
trustee unless the legal government, school
entity itself is not district, or prison) that
designated in the receives agricultural
account title.)(5) program payments
- ------------------------------------------------------- -----------------------------------------------------------
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Show the name of the owner.
(4) List first and circle the name of the legal trust, estate, or pension trust.
Note: If no name is circled when there is more than one name, the number will be considered to be that of the
first name listed.
</TABLE>
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
Page 2
Obtaining a Number
If you don't have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Number Card, or Form
SS-4, Application for Employer Identification Number, at the local office of the
Social Security Administration or the Internal Revenue
Service and apply for a number.
Payees Exempt from Backup Withholding Payees specifically exempted from backup
withholding on payments of interest and dividends include the following:
o A corporation.
o A financial institution.
o An organization exempt from tax under section 501(a), or an individual
retirement plan.
o The United States or any agency or instrumentality
thereof.
o A State, the District of Columbia, a possession of the United States, or
any subdivision or instrumentality thereof.
o A foreign government, a political subdivision of a foreign government, or
any agency or instrumentality thereof.
o An international organization or any agency or
instrumentality thereof.
o A registered dealer in securities or commodities
registered in the U.S. or a possession of the U.S.
o A real estate investment trust.
o A common trust fund operated by a bank under section
584(a)
o An exempt charitable remainder trust, or a non-exempt trust described in
section 4947(a)(1).
o An entity registered at all times under the Investment Company Act of 1940.
o A foreign central bank of issue.
Payments of dividends and patronage dividends not generally subject to
backup withholding include the following:
o Payments to nonresident aliens subject to withholding
under section 1441.
o Payments to partnerships not engaged in a trade or
business in the U.S. and which have at least one
nonresident partner.
o Payments of patronage dividends where the amount
received is not paid in money.
o Payments made by certain foreign organizations.
Payments of interest not generally subject to backup withholding include
the following:
o Payments of interest on obligations issued by individuals. Note: You may be
subject to backup withholding if this interest is $600 or more and is paid
in the course of the payer's trade or business and you have not provided
your correct taxpayer identification number to the payer.
o Payments of tax-exempt interest (including exempt interest dividends under
section 852).
o Payments described in section 6049(b)(5) to nonresident
aliens.
o Payments on tax-free covenant bonds under section 1451.
o Payments made by certain foreign organizations.
Exempt payees described above should file Form W-9 to avoid possible erroneous
backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER
IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, SIGN AND DATE THE
FORM AND RETURN IT TO THE PAYER.
Certain payments other than interest, dividends, and patronage dividends
that are not subject to information reporting are also not subject to backup
withholding. For details, see sections 6041, 6041A(a), 6042, 6044, 6045, 6049,
6050A and 6050N and their regulations.
Privacy Act Notice - Section 6109 requires most recipients of dividend,
interest, or other payments to give taxpayer identification numbers to payers
who must report the payments to IRS. IRS uses the numbers for identification
purposes. Payers must be given the numbers whether or not recipients are
required to file tax returns. Payers must generally withhold 31% of taxable
interest, dividend, and certain other payments to a payee who does not furnish a
taxpayer identification number to a payer. Certain penalties may also apply.
Penalties
(1) Penalty for Failure to Furnish Taxpayer Identification Number.- If you fail
to furnish your taxpayer identification number to a payer, you are subject to a
penalty of $50 for each such failure unless your failure is due to reasonable
cause and not to willful neglect. (2) Civil Penalty for False Information With
Respect to Withholding.- If you make a false statement with no reasonable basis
which results in no imposition of backup withholding, you are subject to a
penalty of $500. (3) Criminal Penalty for Falsifying Information.- Falsifying
certifications or affirmations may subject you to criminal penalties including
fines and/or imprisonment.
FOR ADDITIONAL INFORMATION CONTACT
YOUR TAX CONSULTANT OR THE INTERNAL
REVENUE SERVICE
This announcement is neither an offer to purchase nor a solicitation of an offer
to sell the Shares described below. The Offer is made solely by the Offer to
Purchase, dated January 21, 1998, and the related Letter of Transmittal, and is
neither 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 acceptance thereof would not be in compliance with the securities, blue sky
or other laws of such jurisdiction. In those jurisdictions where the laws
require the Offer to be made by a licensed broker or dealer, the Offer shall be
deemed to be made on behalf of the Purchasers by one or more registered brokers
or dealers licensed under the laws of such jurisdictions.
Notice of Offer to Purchase for Cash:
Up to 1,000,000 Outstanding Shares of Common Stock,
Par Value $.10 Per Share,
Of
Security Investments Group, Inc.
at a Price of
$2.00 Net per Share
Alliance Standard III L.L.C. ("Purchaser L.L.C."), a Delaware limited
liability company wholly owned by LJ Investments, L.L.C., a Delaware limited
liability company, and Alliance Standard III Corp. ("Purchaser Corp.," and
collectively with Purchaser LLC, the "Purchasers"), a British Virgin Islands
corporation wholly owned by LJ Investments Corp., a British Virgin Islands
corporation, hereby offer to purchase up to 1,000,000 outstanding shares of
common stock, par value $.10 per share (the "Shares") of Security Investments
Group, Inc., a Delaware corporation (the "Company"), at a price of $2.00 per
Share, net to the seller in cash, without interest thereon (the "Offer Price"),
upon the terms and subject to the conditions set forth in the Offer to Purchase
and in the related Letter of Transmittal (which, as amended from time to time,
collectively constitute the "Offer"). The Purchasers reserve the right to
purchase only up to 707,000 Shares if the board of directors of the Company has
not approved the Purchasers' acquisition of Shares pursuant to this Offer prior
to the date that the Purchasers accept for payment Shares tendered pursuant to
this Offer.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00
MIDNIGHT, NEW YORK CITY TIME, ON TUESDAY, FEBRUARY 24,
1998, UNLESS THE OFFER IS EXTENDED.
The Offer is conditioned upon, among other things, the requirements
that (i) there shall not have occurred any decision, action, development, event
or other circumstance in the Action (as defined in the Offer to Purchase) or in
any legal proceeding based upon similar factual or legal allegations, including,
without limitation, any action seeking damages against the United States of
America in connection with "supervisory goodwill" accounting for financial
institutions, which in the sole judgment of the Purchasers could have an adverse
effect on the Shares or the Purchasers' eventual recovery with respect
<PAGE>
thereto, and (ii) the Federal Deposit Insurance Corporation (the "FDIC") shall
not have issued receiver's certificates or other similar documents to any holder
of any claim with respect to Security Savings Bank, SLA, including the Company.
For purposes of the Offer, the Purchasers will be deemed to have
accepted for payment, and thereby purchased, up to 1,000,000 Shares validly
tendered to the Purchasers and not withdrawn only as, if and when the Purchasers
give oral or written notice to the Depositary (as defined in the Offer to
Purchase) of the Purchasers' acceptance for payment of such Shares. Payment for
Shares accepted for payment pursuant to the Offer will be made by deposit of the
purchase price therefor with the Depositary, which will act as agent for validly
tendering holders for the purpose of receiving payment from the Purchasers and
transmitting payment to tendering holders. UNDER NO CIRCUMSTANCES WILL INTEREST
BE PAID ON THE PURCHASE PRICE OF THE SHARES TO BE PAID BY THE PURCHASERS,
REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY DELAY IN MAKING SUCH PAYMENT.
Upon the deposit of funds with the Depositary for the purpose of making payments
to tendering holders, the Purchasers' obligations to make such payments shall be
satisfied, and tendering holders must thereafter look solely to the Depositary
for payment of amounts owed to them by reason of the acceptance for payment of
Shares pursuant to the Offer. If the Purchasers are delayed in the acceptance
for payment of or payment for Shares or are unable to accept for payment or pay
for Shares pursuant to the Offer for any reason, then, without prejudice to the
Purchasers' rights under the Offer (but subject to compliance with Rule 14e-l(c)
under the Securities Exchange Act of 1934, as amended (the "Exchange Act")), the
Depositary may, nevertheless, on behalf of the Purchasers, retain tendered
Shares, and such Shares may not be withdrawn except to the extent tendering
holders are entitled to exercise, and duly exercise, withdrawal rights as
described in Section 3 of the Offer to Purchase. If any tendered Shares are not
purchased pursuant to the Offer for any reason, Share Certificates (as such term
is defined in the Offer to Purchase) for any such unpurchased Shares will be
returned, without expense to the tendering holder (or, in the case of Shares
delivered by book-entry transfer of such Shares into the Depositary's account at
the Book-Entry Transfer Facility (as defined in the Offer to Purchase) pursuant
to the procedure set forth in Section 2 of the Offer to Purchase, such Shares
will be credited to an account maintained at the Book-Entry Transfer Facility),
as promptly as practicable after the expiration, termination or withdrawal of
the Offer. Notwithstanding the foregoing, if (i) a portion of the Shares
represented by a tendered Share Certificate has been tendered and a portion has
not been tendered, or a portion has been accepted for payment and a portion has
not been accepted for payment, and (ii) the Company's transfer agent cannot or
will not reissue Share Certificates representing any such Shares, then the
Purchasers will provide to the tendering holder a certificate of beneficial
interest in the Shares that were not accepted for payment.
Tenders of Shares made pursuant to the Offer are irrevocable, except
that Shares tendered pursuant to the Offer may be withdrawn pursuant to the
procedures set forth in
<PAGE>
the Offer to Purchase at any time on or prior to the Expiration Date (as defined
in the Offer to Purchase) of the Offer and, unless theretofore accepted for
payment and paid for by Purchasers, may also be withdrawn after March 26, 1998
(or such later date as may apply in case the Offer is extended). The Offer shall
expire on February 24, 1998, the initial Expiration Date; provided, however,
that the Purchasers may extend the Expiration Date if any of the conditions set
forth in the Offer to Purchase have not been met by giving oral (followed by
written confirmation) or written notice of such extension to the Depositary and
making public announcement thereof no later than 9:00 a.m., New York City time,
on the next business day after the previously scheduled expiration date. For a
withdrawal to be effective, a written, telegraphic or facsimile transmission
notice of withdrawal must be timely received by the Depositary at one of its
addresses set forth on the back cover of the Offer to Purchase and must specify
the name of the person having tendered the Shares to be withdrawn, the number of
Shares to be withdrawn and the name of the registered holder of the Shares to be
withdrawn, if different from the name of the person who tendered the Shares. If
Share Certificates have been delivered or otherwise identified to the
Depositary, then, prior to the physical release of such Share Certificates, the
serial numbers shown on such Share Certificates must be submitted to the
Depositary and, unless such Shares have been tendered by an Eligible Institution
(as defined in the Offer to Purchase), the signatures on the notice of
withdrawal must be guaranteed by an Eligible Institution. If Shares have been
delivered pursuant to the procedure for book-entry transfer as set forth in
Section 2 of the Offer to Purchase, any notice of withdrawal must also specify
the name and number of the account at the Book-Entry Transfer Facility to be
credited with the withdrawn Shares and otherwise comply with the Book-Entry
Transfer Facility's procedures.
The information required to be disclosed by Rule 14d-6(e)(1)(vii) of
the General Rules and Regulations under the Exchange Act is contained in the
Offer to Purchase and is incorporated herein by reference. The Purchasers have
no current plans or proposals that would result in an extraordinary corporate
transaction, such as a merger, reorganization or liquidation involving the
Company (other than the distribution to the holders of the Shares of funds, if
any, received from the FDIC by the Company, in accordance with the charter
documents and other instruments defining the rights of securities holders, and
the applicable rules of the FDIC with respect to priorities of distributions by
receivers of failed institutions), a sale or transfer of any material amount of
assets of the Company, any change in the board of directors or management of the
Company, any change in the capitalization or dividend policy of the Company, or
any other change in the Company's corporate structure or business.
In accordance with its rights under Section 14(d) of the Exchange Act
and the regulations thereunder, Purchasers have requested a list of holders of
Shares from the Company. The Offer to Purchase and the related Letter of
Transmittal and, if required, other relevant materials will be mailed to known
record holders of Shares and, upon receipt of such list, to all such record
holders, and will be furnished to brokers, dealers, commercial
<PAGE>
banks, trust companies and similar persons whose names appear or whose nominees
appear on such lists or, if applicable, who are listed as participants in a
clearing agency's security position listing for subsequent transmittal to
beneficial owners of the Shares.
The Offer to Purchase and the related Letter of Transmittal contain
important information which holders of Shares are urged to review carefully
before making any decision with respect to the Offer.
Requests for copies of the Offer to Purchase, the Letter of Transmittal
and other tender offer materials may be directed to the Information Agent named
below, and copies will be furnished promptly at the Purchasers' expense. The
Purchasers will pay soliciting dealer's fees of $0.20 per Share to brokers,
dealers and other persons for soliciting tenders of Shares from their clients
pursuant to the Offer.
MACKENZIE
PARTNERS, INC
156 Fifth Avenue, 9th Floor
New York, New York 10010
(212) 929-5500 (call collect)
or
CALL TOLL-FREE (800) 322-2885
January 21, 1998
EXHIBIT (c)(1)
FILING AGREEMENT
This Agreement, dated as of January 21, 1998, between Alliance Standard
III L.L.C., a Delaware limited liability company, and Alliance Standard III
Corp., a British Virgin Islands corporation ("Purchaser Corp."),
W I T N E S S E T H T H A T:
WHEREAS, each of the parties hereto desires to participate in a tender
offer to acquire up to 1,000,000 shares of Common Stock, par value $.10 per
share (the "Shares") of Security Investments Group, Inc., a Delaware
corporation, and
WHEREAS, the parties have not yet determined the allocation between
themselves of such Shares, and
WHEREAS, Purchaser Corp. desires to hold any Shares purchased by it
solely for passive investment purposes,
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. The parties shall jointly file a Tender Offer Statement on
Schedule 14D-1, concurrently issue the Offer to Purchase
contained therein and make the Offer.
2. The parties will allocate between themselves at the time of
the acceptance of Shares for payment any Shares purchased
pursuant to the Offer. Each party will pay for and own
separately the Shares allocated to it.
3. Each party will bear its own expenses in connection with the
Offer.
4. The Purchasers have reserved the right to make independent
determinations with respect to all matters requiring their
determination in connection with the above conditions.
5. Each party will be entitled to retain any profit, and will be
obligated to bear any loss incurred by it with respect to the
Shares owned by it.
6. At the time of payment for Shares all collective action by the
parties hereto shall cease, neither party hereto shall act for
the other in any capacity and
<PAGE>
each party shall be permitted to take any actions with respect
to the Shares owned by it deemed necessary or appropriate by
such party.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first set forth above.
Alliance Standard III L.L.C. Alliance Standard III Corp.
By: LJ Investments, L.L.C., its
managing member
By: JL Advisors II, LLC, its
managing member By: s/ Keith R. Bish
Keith R. Bish, Director
By: s/ Michael L. Lewittes
Michael L. Lewittes,
Member
By: Jaffe Capital Management Group,
LLC, member
By: s/ Robert S. Jaffe
Robert S. Jaffe, Member
EXHIBIT (c)(2)
JL Advisors, LLC
520 Madison Avenue
New York, New York
December 1, 1997
Collectible Certificates LLC
Gentlemen:
This letter will set forth the agreement between us.
JL Advisors, LLC ("JL") intends to create, from time to time,
entities which will invest (by way of tender for shares, or otherwise) in shares
or other interests (the "Interests") of existing or formerly existing entities
that have asserted either directly, or derivatively, claims for breach of
contract against the United States, or agencies thereof, in connection with so
called bank "goodwill" accounting cases.
Collectible Certificates LLC ("Collectible") and its
principal, Richard Macary ("Macary") have expertise in these so called
"goodwill" cases, and is desirous of consulting with and advising JL, and its
designees, in (i) the acquisition of the Interests, (ii) the subsequent
ownership and management of the entities which acquire the Interests, and (iii)
the operation of the entities to which the Interest relate; (the activities
described in (i), (ii) and (iii), above, are hereinafter referred to
individually as "Acquisition Activities", "Ownership and Management Activities"
and "Operating Activities", respectively, and are hereinafter collectively
referred to as "Activities").
We have agreed as follows, in connection with the foregoing:
1. JL will form one or more entities (the "JL Vehicle(s)") to
engage in the Activities. JL presently intends to create, (as the "Initial JL
Vehicle"), a Delaware limited liability company. All interests in the Initial JL
Vehicle, and any other JL Vehicle, will be controlled by JL. Collectible will
reimburse JL for the legal and other costs of organizing the Initial JL Vehicle
and those incurred in connection with the preparation of this Agreement.
2. Collectible will cause its principal, Macary, to consult
with and advise JL and the JL Vehicle(s) with respect to the Activities. (Such
advice and consultation is
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<PAGE>
hereinafter referred to as the "Collectible Consultation".) Macary agrees that
he shall provide all services required in connection with, and related to, the
Collectible Consultation.
3. The term of the Collectible Consultation shall commence on
the date hereof, and shall terminate on November 30, 1998 with respect to
Acquisition Activities. Until November 30, 1998, (but subject to the provisions
of Paragraph 5C, below), JL, Collectible and Macary shall present to one another
all opportunities coming to their respective attention for the acquisition of
Interests. The Collectible Consultation shall continue with respect to Ownership
and Management Activities and Operating Activities so long as any JL Vehicle
shall retain all or any portion of an Interest.
4. During the period from the date hereof through November 30,
1998, other than the sale of a children's book/publishing deal, Macary shall
devote his full time and attention to the Activities, and shall engage in no
other business, employment, or competing activity in connection with the so
called "goodwill" cases. Commencing December 1, 1998, and whether or not this
Agreement remains in full force and effect, for so long as JL or a JL Vehicle
shall own all or any portion of an Interest, Macary shall devote so much time as
is reasonably necessary to Ownership and Management Activities and Operating
Activities.
5. A. From the date hereof through November 30, 1998,
Collectible shall receive "Basic Compensation" at the rate of $100,000 per
annum, payable monthly in arrears. No Basic Compensation shall be due or payable
on account of any services rendered in connection with the Collectible
Consultation after November 30, 1998.
B. In addition to such Basic Compensation,
Collectible shall receive, as "Additional Compensation," 7 1/2% of the "Realized
Net Profits," such amount to be determined and paid as provided in this section
5(b).
i. The term "Realized Net Profits" shall be determined on a
cumulative basis and, as of any date, shall mean:
(1) (1)all gross receipts actually received from the
date hereof to such date by all JL Vehicles on a combined basis without double
counting on account of the acquisition, ownership and disposition by JL Vehicles
of Interests, less
(2) (2)the sum without double counting of:
(a) (a)all capital investment made from the
date hereof to such date by all JL Vehicles on a combined basis in acquiring
Interests from the date hereof to such date,
(b) (b)all expenses incurred from the date
hereof to such date by JL or any JL Vehicle on a combined basis in connection
with the acquisition, ownership
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<PAGE>
or disposition of Interests, including but not limited to all Basic
Compensation, acquisition costs, travel expenses and legal, accounting and other
professional fees and expenses,
(c) (c)interest calculated at overnight
LIBOR in effect from time to time, on the amounts described in sections
5(b)(i)(2)(a) and (b) hereof, in the case of each such amount, from the date
such amount is expended until the date such amount is recouped by JL or its
financing sources
ii. JL shall calculate Realized Net Profits as of the end of
each calendar year as promptly as practicable following the end of each calendar
year for so long as any JL Vehicle owns any Interests. JL's accountants shall
certify such calculation as having been made in accordance with the terms of
this agreement. As soon as available, JL shall furnish to Collectible a schedule
showing such calculation, a copy of the accountant's certificate (such
certificate and schedule hereinafter referred to as the "Realized Net Profit
Certificate and Schedule") and, if such calculation shows that Additional
Compensation is due to Collectible, a check in the amount of such Additional
Compensation. Conversely, if such schedule shall show Collectible has received
an overpayment of Additional Compensation (i.e., that all amounts of Additional
Compensation theretofore received by Collectible hereunder exceed 7-1/2% of
Realized Net Profits as of the end of such prior fiscal year), Collectible shall
promptly remit such the amount of such overpayment to JL.
The calculation by JL's accountant with respect to Realized
Net Profits for a given year shall be binding and conclusive upon, and deemed
accepted by, Collectible unless Collectible shall have notified JL in writing of
any objections thereto consistent with the provisions of this Section within 20
days after receipt of the Realized Net Profit Schedule and Certificate for that
year. The written notice under this Section (the "Realized Net Profits Objection
Letter") shall specify in reasonable detail each item on the relevant Realized
Net Profit Schedule and Certificate that Collectible disputes, and a summary of
Collectible's reasons for such dispute.
Disputes between Collectible and JL relating to Realized Net
Profits which cannot be resolved by them within 20 days after receipt by JL of a
Realized Net Profits Objection Letter may be referred no later than 20 days
after such receipt for decision at the insistence of either party to Price
Waterhouse ("PW"). If PW accepts the appointment, it shall be the "Auditor." If
PW does not accept the appointment, the parties shall request PW to designate
one or more independent nationally recognized accounting firms to act as
Auditor, until an Auditor is selected. If PW declines to make such
designation(s), or if its designee(s) shall not accept the appointment, then the
American Arbitration Association (New York City) shall select the Auditor. Prior
to referring the matter to the Auditor, the parties shall agree on the
procedures to be followed by the Auditor (including procedures with regard to
presentation of evidence). Such procedures shall not alter the accounting
practices, principles and policies to be applied in the calculation of the
Realized Net Profits for any given year, which will be those required by this
Agreement. If the parties are unable to agree upon procedures before the end of
20 days after referral of the dispute to
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<PAGE>
the Auditor, the Auditor shall establish such procedures giving due regard to
the intention of the parties to resolve disputes as quickly, efficiently and
inexpensively as possible, which procedures may be, but need not be, those
proposed by either party. The parties shall then submit evidence in accordance
with the procedures established, and the Auditor shall decide the dispute in
accordance therewith. The Auditor's decision on any matter referred to shall be
final and binding on Collectible and JL. The fee of the Auditor shall be borne
by Collectible and JL in equal portions, unless the Auditor decides, based on
its determination with respect to the reasonableness of the respective positions
of the parties, that the fee shall be borne in unequal proportions.
iii. Notwithstanding anything herein to the contrary, the
obligation of JL to pay Additional Compensation and the obligation of
Collectible to remit overpayments thereof, as provided in this Agreement shall
survive the termination hereof, including termination pursuant to Section 11,
below.
C. Notwithstanding anything herein contained to the
contrary, (i) no additional compensation shall be paid or payable in connection
with securities transactions, whether or not involving "good will" accounting
cases, if such securities transactions involve the purchase and sale of such
securities by JL Advisors, LLC or JL Associates, LLC in the ordinary course of
its business; and (ii) any entity which is an "affiliate" (as such term is
defined under the Securities Exchange Act of 1934) of JL that engages in the
Activities shall be deemed to be a JL Vehicle.
6. JL shall provide to Macary, until November 30, 1998,
without charge, an office within JL's office space, computer access and
telephone usage, as well as reimbursement for travel and other out-of-pocket
expenses previously approved by JL. Neither Collectible nor Macary is
authorized, nor shall they incur, any other expenses on JL's behalf without JL's
express written authorization.
7. It is understood by the parties hereto that during the
performance of the Collectible Consultation, Collectible and Macary may receive
from JL, its employees or agents, or otherwise acquire, certain confidential,
proprietary and/or trade secret information which is the property of JL
("Confidential Information"). Any and all reports, summaries, notes,
applications, filings and/or other information prepared and/or gathered in
connection with the performance of the Collectible Consultation whatever the
form or medium, shall be deemed Confidential Information as well. It is
acknowledged and agreed that the Confidential Information is the sole and
exclusive property of JL. Collectible and Macary, jointly and severally, hereby
warrant and affirm that they shall neither use, nor disclose to any third party,
the Confidential Information for any purpose. Upon the expiration or termination
of this Agreement, Collectible and Macary shall return to JL all tangible forms
of Confidential Information or derivations or abstracts thereof, any and all
copies of Confidential Information made by or on behalf of either of them in
whatever form or medium. Neither of them shall disclose to any third party or
otherwise make public the terms of this Agreement, except as necessary to secure
enforcement of the terms of this
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<PAGE>
Agreement, or in response to a lawful subpoena, or as otherwise required by law;
provided that prior to responding to such subpoena, JL shall be provided with a
copy of such subpoena and JL shall have the opportunity to file a motion for a
protective order. The obligations as set forth in this Section 7 shall be
continuing and shall survive the expiration or termination of this Agreement.
Notwithstanding anything to the contrary contained in this Agreement,
Confidential Information shall not include information (i) that is in the public
domain, or (ii) that relates to "goodwill" targets with respect to which no
Interests have been acquired pursuant to the terms hereof at the time of
termination of this Agreement.
8. Collectible and Macary agree that they will not, either
directly or indirectly, solicit any employee, investor or client of JL during
the term of this Agreement, or subsequent thereto.
9. JL, Collectible and Macary agree that in addition to a
right to seek damages on account of any breach of this Agreement, (i) JL shall
be entitled to injunctive relief in enforcing the provisions of paragraphs 3, 4,
7 and 8, hereof, since the breach of such provisions could cause irreparable
injury to JL, and (ii) Collectible shall be entitled to injunctive relief in
enforcing the provisions of paragraph 3, since the breach thereof could cause
irreparable injury to Collectible.
10. Both Collectible and Macary are and shall be deemed to be
independent contractors and not employees of JL, for all purposes and at all
times, and will not be entitled or eligible to participate in any benefits or
privileges extended by JL to its employees.
11. This Agreement is non-assignable and no party may assign
any rights or obligations hereunder without the prior written consent of the
other, except that the transfer of rights and obligations hereunder to a JL
Vehicle shall not require such consent. If Macary, for whatever reason, becomes
unable to perform the services to be performed by him as described herein, this
Agreement shall immediately terminate, it being understood that the services to
be provided by Macary are personal.
12. Collectible acknowledges and agrees that it shall be
solely responsible for paying the appropriate amount of all federal, state and
local income taxes with respect to all compensation paid to it pursuant to this
Agreement, and that JL shall have no responsibility whatsoever for withholding
or paying any such taxes for or on its behalf. Collectible further agrees to
indemnify, defend and hold JL harmless from and against any and all damages,
losses, expenses or penalties (including attorneys' fees and costs) arising from
or in connection with any claim brought by any federal, state or local taxing
authority with regard to its failure to file required forms with regard to
compensation paid by JL pursuant to this Agreement.
13. (a) Each party hereto indemnifies and shall hold harmless
the other parties against any and all liabilities, losses, claims, damages,
costs and expenses,
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<PAGE>
including any and all legal fees, to the extent such liabilities, losses,
claims, damages, costs and expenses are determined by a court of competent
jurisdiction to be the result of such party's violation of law, gross
negligence, bad faith or intentional misconduct, and shall reimburse the other
parties hereto for any legal or other costs or expenses reasonably incurred by
such other parties in connection with investigating or defending any action or
claim, to the extent such expenses relate to issues with respect to such
liabilities.
(b) Promptly after receipt by an indemnified party under
paragraph (a) above of notice of the commencement of any action, suit or
proceeding, such indemnified party shall, if a claim in respect thereof is to be
made against an indemnifying party under paragraph (a) above, notify the
indemnifying party in writing of the commencement thereof; but the omission so
to notify the indemnifying party shall not relieve it from any liability which
it may have to any indemnified party otherwise than under paragraph (a) above.
In case any such action shall be brought against any indemnified party and it
shall notify the indemnifying party of the commencement thereof, the
indemnifying party shall be entitled to participate therein and, to the extent
that it shall wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel satisfactory to such
indemnified party (who shall not, except with the consent of the indemnified
party, be counsel to the indemnifying party), and, after notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party shall not be liable to such indemnified
party under paragraph (a) above for any legal expenses of other counsel or any
other expenses, in each case subsequently incurred by such indemnified party, in
connection with the defense thereof other than reasonable costs and expenses of
investigation and in connection with preparation for and appearances at
depositions, trials and other proceedings in which the indemnified party
participates. No indemnifying party shall, without the written consent of the
indemnified party, effect the settlement or compromise of, or consent to the
entry of any judgment with respect to, any pending or threatened action or claim
in respect of which indemnification or contribution may be sought hereunder
(whether or not the indemnified party is an actual or potential party to such
action or claim) unless such settlement, compromise or judgment (i) includes an
unconditional release of the indemnified party from all liability arising out of
such action or claim and (ii) does not include a statement as to or an admission
of fault, culpability or a failure to act, by or on behalf of any indemnified
party.
(c) If the indemnification provided for in this agreement is
unavailable to or insufficient to hold harmless an indemnified party under
paragraph (a) above in respect of any liabilities, losses, claims, damages or
costs or expenses (or actions in respect thereof) referred to therein, then each
party hereto shall contribute to the amount paid or payable by such indemnified
party as a result of such liabilities, losses, claims, damages or costs or
expenses or actions in respect thereof) in such proportion as is appropriate to
reflect not only the relative benefits received by each party in engaging in the
activities hereunder giving rise to such liabilities, losses, claims, damages or
costs or expenses (or actions in respect thereof) but also the relative fault of
each party in connection with the acts or omissions resulting in such
liabilities, losses, claims, damages or costs or expenses (or
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<PAGE>
actions in respect thereof), as well as any other relevant equitable
considerations. The amount paid or payable by an indemnified party as a result
of the liabilities, losses, claims, damages or costs or expenses (or actions in
respect thereof) referred to above in this paragraph (c) shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act of 1933, as amended, shall be entitled to
contribution under this paragraph (c) from any person who was not guilty of such
fraudulent misrepresentation.
14. Notice. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given upon receipt of: hand
delivery; certified or registered mail, return receipt requested; or telecopy
transmission with confirmation of receipt:
If to Collectible, to:
Collectible Certificates
240 East 47th, Apt 34C
New York, New York 10017
Telecopier: (212) 813-2118
Telephone : (212) 583-0533
Attention: Richard Macary
(with a copy to)
Winthrop, Stimson, Putnam & Roberts
One Battery Park Plaza
New York, New York 10004--1490
Telecopier: (212) 858-1500
Telephone: (212) 858-1464
Attention: Donovan W. Burke, Esq.
If to JL, to
JL Advisors, LLC
520 Madison Avenue
New York, New York 10022
Telecopier: (212) 826-2334
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<PAGE>
Telephone: (212) 826-6809
Attention: Robert S. Jaffe
(with a copy to)
Battle Fowler LLP
Park Avenue Tower
75 East 55th Street
New York, New York 10022
Telecopier: (212) 856-7802
Telephone: (212) 856-7111
Attention: Robert W. Gelfman, Esq.
Such names and addresses may be changed by written notice to each person listed
above.
15. Governing Law. This Agreement shall be governed by and construed
in accordance with the internal substantive laws and not the choice of law rules
of the State of New York.
16. Counterparts. This Agreement may be executed simultaneously in two
or more counterparts, each of which shall be deemed an original but all of which
together with shall constitute one and the same instrument.
17. Entire Agreement. This Agreement embodies the entire agreement and
understanding of the parties hereto in respect of the subject matter contained
herein. This Agreement supersedes all prior agreements and understandings
between the
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<PAGE>
parties with respect to such subject matter.
If the foregoing correctly sets forth our agreement, please
execute and return a copy of this letter.
Very truly yours,
JL ADVISORS, LLC
By:
-----------------------------
AGREED AND ACCEPTED
COLLECTIBLE, LLC
By:
--------------------------------
Richard Macary, Managing Member
--------------------------------
Richard Macary, individually
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