November 24, 1999
Board of Directors
AmTec, Inc.
000 Xxxxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
We understand that AmTec, Inc. (the "Company") and Terremark
Holdings, Inc. ("Terremark") have entered into an Agreement and Plan of
Merger (the "Agreement") dated November __, 1999, pursuant to which
Terremark will be merged with and into the Company, with the Company being
the surviving entity (the "Merger"). Pursuant to the Agreement, each share
of the common stock of the Company, $0.001 par value (the "Company Common
Stock") then issued and outstanding shall, by virtue of the Merger and
without any action on the part of the holder thereof, be converted into and
represent one share of common stock, $0.001 par value, of the Surviving
Corporation (as defined in the Agreement) (the "Post Merger Common Stock")
and any rights to receive Company Common Stock (including options, warrants
and convertible preferred stock) shall automatically be converted to a
right to receive an equal number of the Post Merger Common Stock, such
that, immediately after the Effective Time (as defined in the Agreement),
all holders of the Company Common Stock, together with the holders of any
rights to receive Company Common Stock shall, in the aggregate and on a
fully diluted basis, hold 38.5% of the Post Merger Common Stock of the
Surviving Corporation.
Furthermore, pursuant to the Agreement, each share of common stock,
par value $0.01 per share, of Terremark (the "Terremark Common Stock") then
issued and outstanding shall, by virtue of the Merger and without any
action on the part of the holder thereof, become the right to receive fully
paid and nonassessable shares of the Post Merger Common Stock, such that,
immediately after the Effective Time, all holders of the Terremark Common
Stock shall, in the aggregate and on a fully diluted basis, hold 61.5% of
the Post Merger Common Stock.
In addition, the parties to the Agreement have acknowledged that
Terremark at Bayshore, Inc., Terremark Centre, Inc. and ACGDI, Inc. (each
of which is a Florida corporation and which are collectively referred to as
the "Partners"), has sold to Terremark their interests in Terremark Centre
Limited, a Florida limited partnership, the owner of certain real property
referred to as the Terremark Centre located at 0000 Xxxxx Xxxxxxxx Xxxxx,
Xxxxxxx Xxxxx, Xxxxxxx, for a purchase price equal to the difference
between $56,000,000 and the (at the time of the sale) outstanding principal
balance of the first mortgage loan in favor of Principal Mutual Insurance
Company (the "Proceeds"). The Company has agreed to, at the Effective Time,
sell to the Partners, or their assignees, for the Proceeds, such number of
shares of Post Merger Common Stock as shall be equal, in the aggregate and
on a fully diluted basis, 35% of the Post Merger Common Stock of the
Surviving Corporation (the "Stock Purchase") pursuant to a certain Stock
Purchase Agreement which was executed contemporaneously with the Agreement
between the Company and Vistagreen Holdings (Bahamas), Ltd., a Bahamian
international business corporation. Upon the closing of the Merger and the
Stock Purchase (collectively, the "Transaction"), the percentage ownership
of the holders of the Company Common Stock shall be 25%, the percentage
ownership of the Partners shall be 35%, and the percentage ownership of the
existing holders of the Terremark Common Stock shall be 40%, each such
percentage representing the respective ownership of such persons of the
Post Merger Common Stock.
You have requested our opinion and advice, as investment bankers, as
to the Transaction, as set forth below.
Please be aware that we have not been asked to render, and are not
rendering, an opinion as to the fairness, from a financial point of view,
to the holders of the Company Common Stock, of the consideration to be
offered in the Transaction.
In conducting our analysis and arriving at our conclusion as
expressed herein, we have, among other things:
(i) reviewed certain publicly available business and financial
information relating to the Company and Terremark that we deemed to be
relevant;
(ii) read the letter of intent, memorandum of understanding and draft
merger [and stock purchase]documents;
(iii) reviewed the Base Case and Management Case valuation of the
Company, dated November 1, 1999, compiled by the Company;
(iv) spoke with CIBC World Markets regarding the activities they
engaged in on behalf of the Company over the last year;
(v) reviewed the terms of the financing alternatives as provided by
the Company;
(vi) visited Terremark Centre;
(vii) visited potential development sites;
(viii) reviewed the relevant documentation relating to the operating
business of Terremark;
(ix) reviewed certain internal information, primarily financial in
nature, including financial forecasts and other financial and operating
data relating to strategic implications and operational benefits
anticipated to result from the Transaction, provided to us by management of
the Company and Terremark; and
(x) conducted discussions with members of senior management of the
Company and Terremark concerning the operations, historical financial
statements and future prospects of the Company and Terremark.
We have also met with certain officers and employees of the Company
and Terremark concerning its business and operations, properties, assets,
present condition and prospects and undertook such other studies, analyses
and investigations as we deemed appropriate.
In formulating our opinion as to the Transaction as set forth below,
we have considered, without independent investigation, the following
information which was provided to us by the management of the Company and
Terremark:
(i) The Company, with CIBC World Market's assistance, has tried for
over a year and a half to raise money but has not been successful;
(ii) The Company currently has a serious liquidity problem that cannot
be satisifed from its cash flows and accordingly, the Company needs a
capital infusion to fund the new initiatives and operating expenses;
(iii) The Company's urgent need for capital and lack of other options
for raising funds;
(iv) Terremark has been operating as a "pass through" real estate
company with many different partnerships set up for which they do advisory
business and financing; and
(v) Based on information provided by Terremark, we estimate that
Terremark's current actual value is approximately $10 million which may be
viewed as conservative due to (a) the fact that many of Terremark's
management agreements are not well documented and therefore, are not
accurately reflected in the Company's value and (b) that such valuation
does not take into account the goodwill developed by Terremark and its
principal, Xxxxx Xxxxxx, for its business.
In the course of our review, we have relied upon and assumed the
accuracy and completeness of the financial and other information that is
publicly available or that has been provided to us by the Company and
Terremark and have not attempted independently to verify such information,
nor do we assume any responsibility to do so. With respect to financial
forecasts, and other information provided to or reviewed by us, we have
been advised by the management of the Company and Terremark that such
forecasts and other information were reasonably prepared on bases
reflecting the best currently available estimates and judgments of the
Company and Terremark as to the expected future financial performance of
the Company and Terremark and the strategic implications and operational
benefits anticipated from the Transaction. We have not assumed any
responsibility for the information provided to us and we have further
relied on the assurances of managements of the Company and Terremark that
they were unaware of any facts that would make the information or forecasts
provided to us incomplete or misleading. We have also assumed with your
consent that (i) the Transaction will be consummated in accordance with the
terms described in the Agreement and (ii) the Stock Purchase will be
consummated in accordance with the terms of the Stock Purchase. In arriving
at our opinion, we have not performed or been furnished with any
independent evaluation or appraisal of the assets, properties or
liabilities (contingent or otherwise) of the Company or Terremark. We have
visited but have not conducted any physical inspection of the properties or
assets of the Company or Terremark. We have also taken into account our
assessment of general economic, market and financial conditions and our
experience in similar transactions, as well as our experience as investment
bankers in general. Our opinion is necessarily based on economic, market,
financial and other conditions, and the information made available to us,
as they exist and can be evaluated as of the date hereof and we assume no
responsibility to update or revise our opinion based upon events or
circumstances occurring after the date hereof. We reserve, however, the
right to withdraw, revise or modify our opinion based upon additional
information which may be provided to or obtained by us, which suggests, in
our judgment, a material change in the assumptions upon which our opinion
is based. Our opinion as expressed below does not imply any conclusion as
to the likely trading range of the Company Common Stock prior to or to Post
Merger Common Stock subsequent to the consummation of the Transaction,
which may vary depending upon, among other factors, changes in interest
rates, dividend rates, market conditions, general economic conditions and
other factors that generally influence the price of securities.
We have acted as financial advisor to the Board of Directors of the
Company in connection with the Transaction and will receive a fee for such
services. In the ordinary course of our business, we actively trade the
securities of the Company for our own account and for the accounts of
others and, accordingly, may at any time hold a long or short position in
such securities. It is understood that this letter is intended for the
benefit and use of the Board of Directors of the Company and is not to be
used for any other purpose, or reproduced, disseminated, summarized,
quoted, excerpted from or referred to at any time, in whole or in part,
without our prior written consent.
Based upon and subject to the foregoing, it is our opinion as
investment bankers, that, as of the date hereof, from a financial point of
view, the Transaction is the Company's best alternative for carrying out
its plans and programs.
Very truly yours,
RAMIUS CAPITAL GROUP, LLC
By:_______________________________
Xxxxx X. Xxxxx, Manager
