OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF CLASS A COMMON STOCK
OF
XXXXXX ENVIRONMENTAL SERVICES, INC.
AT
$.25 NET PER SHARE
BY
GAP CAPITAL, L.L.C.
XXXXX X. XXXXX, MANAGER
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THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT
12:00 MIDNIGHT, NEW YORK CITY TIME, ON TUESDAY, JULY 27, 1999, UNLESS
THE OFFER IS EXTENDED.
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To Our Clients:
Enclosed for your consideration is the Supplement, dated July 13,
1999 (the "Supplement"), to the Offer to Purchase dated June 11, 1999 (the
"Offer to Purchase") and a related Letter of Transmittal (which, together
with any amendments or supplements thereto, collectively constitute the
"Offer") relating to an offer by GAP Capital, L.L.C., a Texas limited
liability company (the "Purchaser"), to purchase all outstanding shares of
Class A common stock, par value $.01 per share (the "Class A Shares"), of
Xxxxxx Environmental Services, Inc., a Delaware corporation (the "Company"),
at $.25 per Class A Share, net to the seller in cash, without interest, upon
the terms and subject to the conditions set forth in the Offer.
WE ARE THE HOLDER OF RECORD OF CLASS A SHARES HELD BY US FOR YOUR
ACCOUNT. A TENDER OF SUCH CLASS A SHARES CAN BE MADE ONLY BY US AS THE HOLDER
OF RECORD AND PURSUANT TO YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS
FURNISHED TO YOU FOR YOUR INFORMATION ONLY AND CANNOT BE USED TO TENDER CLASS
A SHARES HELD BY US FOR YOUR ACCOUNT.
We request instructions as to whether you wish to tender any or all
the Class A Shares held by us for your account, pursuant to the terms and
conditions set forth in the Offer.
Your attention is invited to the following:
1. The tender price is $.25 per Class A Share, net to the
seller in cash, without interest, upon the terms and subject to the
conditions set forth in the Offer.
2. The Board of Directors of the Company has unanimously
approved the Offer and determined that the Offer is fair to, and in
the best interests of, the stockholders of the Company and
recommends that the stockholders of the Company accept the Offer and
tender their Class A Shares.
3. The Offer is being made for all outstanding Class A Shares.
4. The Offer is being made pursuant to the Tender Offer
Agreement dated as of June 4, 1999 (the "Tender Offer Agreement"),
among the Purchaser and the Company pursuant to which, following the
consummation of the Offer and the satisfaction or waiver of certain
conditions, the Purchaser shall be entitled to designate a certain
number of directors on the Company's Board of Directors, depending
on the number of Class A Shares the Purchaser acquires pursuant to
the Offer, as more fully described in the Offer to Purchase and
Supplement.
5. In connection with the execution of the Tender Offer
Agreement, certain holders of the Class B Shares
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have entered into a lock-up and voting agreement with the Purchaser
(the "Lock-Up and Voting Agreement"), pursuant to which such
stockholders have agreed to vote any and all of their Class A Shares
and Class B Shares in favor of a 50,000 to 1 reverse stock split of
the Class A Shares and Class B Shares (the "Reverse Split") in the
event such a Reverse Split is to be voted on or otherwise approved
at a meeting of holders of Class A Shares or Class B Shares and have
agreed not to tender shares pursuant to the Offer.
6. In order to induce the Purchaser to enter into the Tender
Offer Agreement, simultaneously with the execution of the Tender
Offer Agreement, the Company issued to Purchaser a warrant (the
"Warrant"), pursuant to which the Company granted to the Purchaser
an option to acquire a certain number of Class A Shares and Class B
Shares upon the occurrence of certain events and in accordance with
certain terms and conditions set forth in the Warrant.
7. The Offer is conditioned upon, among other things, there
being validly tendered and not withdrawn prior to the expiration of
the Offer 2,662,975 Class A Shares.
8. The Offer and withdrawal rights will expire at 12:00
Midnight, New York City time, on Tuesday, July 27, 1999, unless the
Offer is extended by the Purchaser. In all cases, payment for Class
A Shares accepted for payment pursuant to the Offer will be made
only after timely receipt by the Depositary of certificates for such
Class A Shares (or timely Book-Entry Confirmation of a transfer of
such Class A Shares as described in Section 2 of the Offer to
Purchase), a properly completed and duly executed Letter of
Transmittal (or facsimile thereof) or an Agent's Message (as defined
in the Offer to Purchase) in connection with a book-entry delivery
and any other documents required by the Letter of Transmittal.
9. The Purchaser will pay any stock transfer taxes with
respect to the transfer and sale of Class A Shares to it or its
order pursuant to the Offer, except as otherwise provided in
Instruction 6 of the Letter of Transmittal.
If you wish to have us tender any of or all your Class A Shares,
please so instruct us by completing, executing, detaching and returning to us
the instruction form set forth below. An envelope to return your instructions
to us is enclosed. If you authorize tender of your Class A Shares, all such
Class A Shares will be tendered unless otherwise specified below. Your
instructions to us should be forwarded promptly 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 Class A Shares in any jurisdiction in which the
making or acceptance of the Offer would not be in compliance with the laws of
such jurisdiction.
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INSTRUCTIONS WITH RESPECT TO THE OFFER TO PURCHASE
ALL OUTSTANDING SHARES OF CLASS A COMMON STOCK
OF
XXXXXX ENVIRONMENTAL SERVICES, INC.
The undersigned acknowledges receipt of your letter enclosing the
Supplement, dated July 13, 1999 (the "Supplement"), to the Offer to Purchase
dated June 11, 1999, of GAP CAPITAL, L.L.C., a Texas limited liability
company and the related Letter of Transmittal relating to shares of Class A
common stock, par value $.01 per share (the "Class A Shares"), of Xxxxxx
Environmental Services, Inc., a Delaware corporation.
This will instruct you to tender the number of Class A Shares
indicated below held by you for the account of the undersigned on the terms
and conditions set forth in such Offer to Purchase, Supplement and the related
Letter of Transmittal.
Dated: , 1999
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NUMBER OF CLASS A SHARES TO BE TENDERED*
CLASS A SHARES
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SIGNATURE(S)
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PLEASE PRINT NAME(S)
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ADDRESS (INCLUDE ZIP CODE)
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AREA CODE AND TELEPHONE NO.
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TAXPAYER IDENTIFICATION OR
SOCIAL SECURITY NO.
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*Unless otherwise indicated, it will be assumed that all your Class A Shares
are to be tendered.
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