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OFFER TO PURCHASE FOR CASH
UP TO 10,678,792 OUTSTANDING SHARES OF SERIES A COMMON STOCK
OF
THE XXXXXXX COMPANIES
AT
$0.655 NET PER SHARE
BY
XXXXXXX XXXX
AND
XXXXXXX X. XXXX
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON FRIDAY, NOVEMBER 5, 1999, UNLESS THE OFFER IS EXTENDED.
XXXXXXX XXXX AND XXXXXXX X. XXXX (COLLECTIVELY, THE "PURCHASERS") HAVE AGREED,
UNDER CERTAIN CIRCUMSTANCES AND SUBJECT TO THE TERMS AND CONDITIONS OF THE
OFFER, TO EXTEND THE OFFER FROM TIME TO TIME UNTIL THE CLOSING OF THE
ACQUISITION (AS DEFINED IN THE OFFER TO PURCHASE).
October 7, 1999
To Our Clients:
Enclosed for your consideration is an Offer to Purchase, dated October 7,
1999 (the "Offer to Purchase"), and the related Letter of Transmittal (which, as
amended from time to time, together constitute the "Offer") in connection with
the offer by Xxxxxxx Xxxx, an individual, and Xxxxxxx X. Xxxx, an individual
(together, the "Purchasers"), to purchase up to 10,678,792 outstanding shares
(subject to adjustment as described in the Offer to Purchase) of Series A Common
Stock, par value $.01 per share (the "Series A Shares"), of The Xxxxxxx
Companies, a Delaware corporation (the "Company"), at a price of $0.655 per
Series A Share, net to the tendering stockholder in cash, without interest
thereon (the "Offer Price"), upon the terms and subject to the conditions set
forth in the Offer to Purchase. THIS MATERIAL IS BEING SENT TO YOU AS THE
BENEFICIAL OWNER OF SERIES A SHARES HELD BY US FOR YOUR ACCOUNT BUT NOT
REGISTERED IN YOUR NAME. A TENDER OF SUCH SERIES 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 BY
YOU TO TENDER SERIES A SHARES HELD BY US FOR YOUR ACCOUNT.
We request instructions as to whether you wish to have us tender on your
behalf any or all of the Series A Shares held by us for your account, upon the
terms and subject to the conditions set forth in the Offer.
Your attention is directed to the following:
1. The Offer is being made for up to 10,678,792 outstanding Series A
Shares (subject to adjustment as described in the Offer to Purchase). In
the event that more than 10,678,972 Series A Shares are validly tendered
and not withdrawn prior to the Expiration Date (as defined in the Offer to
Purchase), the Purchasers will accept for payment, and thereby purchase,
Series A Shares on a pro rata basis (adjusted downward to avoid acceptance
for payment of fractional shares) upon the terms and subject to the
conditions of the Offer.
2. The Offer Price is $0.655 per Series A Share, net to the tendering
stockholder in cash, without interest thereon.
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3. The Offer, proration period and withdrawal rights will expire at
12:00 midnight, New York City time, on Friday, November 5, 1999, unless the
Offer is extended. The Purchasers have agreed, under certain circumstances
and subject to the terms and conditions of the Offer, to extend the Offer
from time to time until the closing of the Acquisition (as defined in the
Offer to Purchase).
4. The Offer is being made as part of a series of transactions that
are expected to result in (a) the acquisition by Xxxxxxx Homes, a
California corporation ("Xxxxxxx Homes") and a wholly owned subsidiary of
the Company, of substantially all of the real estate and related assets and
liabilities of Xxxxxxx Xxxx Homes, Inc. ("WLHI"), a California corporation
owned by the Purchasers, (b) the purchase by the Purchasers of outstanding
Series A Shares pursuant to the Offer and the purchase by WLHI (or one or
more of its affiliates) of outstanding shares of the Company's Series B
Common Stock ("Series B Shares") pursuant to the Series B Stock Purchase
Agreements, each as described in the Offer to Purchase, such that following
such purchases, the Purchasers and their affiliates own up to 49.9% of the
outstanding Common Stock of the Company, and (c) the merger of the Company
with and into Xxxxxxx Merger Sub, Inc., a newly-formed Delaware corporation
and a wholly owned subsidiary of the Company (the "Merger").
5. The Offer is conditioned upon, among other things, (a) there being
validly tendered and not withdrawn, prior to the expiration of the Offer,
at least 1,989,180 Series A Shares, subject to adjustment as described in
the Offer to Purchase (the "Minimum Condition"), (b) WLHI (or one or more
of its affiliates) continuing to have, as of the expiration of the Offer,
the legally enforceable right to purchase Series B Shares pursuant to each
of the Series B Stock Purchase Agreements, (c) the consummation of the
Acquisition pursuant to the Purchase Agreement (as defined in the Offer to
Purchase), and (d) approval of the Merger by holders of a majority of the
outstanding Series A Shares and Series B Shares voting together as a single
class.
6. A Special Committee of independent members of the Board of
Directors of the Company has unanimously determined that the Purchase
Agreement and the transactions contemplated thereby are fair to and in the
best interests of the Company and its stockholders, and in furtherance of
the transactions contemplated by the Purchase Agreement, has recommended
that holders of Series A Shares (other than the Purchasers and certain
holders of Series B Shares) accept the Offer and tender their Series A
Shares pursuant to the Offer; provided, however, that such holders of
Series A Shares should consult with their financial and tax advisors prior
to tendering their Series A Shares in the Offer.
Tendering stockholders will not be obligated to pay brokerage fees or
commissions or, except as set forth in Instruction 6 of the Letter of
Transmittal, stock transfer taxes on the purchase of Series A Shares by the
Purchaser pursuant to the Offer.
Payment for Series A Shares purchased pursuant to the Offer will in all
cases be made only after timely receipt by ChaseMellon Shareholder Services,
L.L.C. (the "Depositary") of (a) Series A Share certificates or timely
confirmation of the book-entry transfer of such Series A Shares into the account
maintained by the Depositary at The Depository Trust Company (the "Book-Entry
Transfer Facility") pursuant to the procedures set forth in Section 3 of the
Offer to Purchase, (b) the Letter of Transmittal (or a facsimile thereof),
properly completed and duly executed, with any required signature guarantees or
an Agent's Message (as defined in the Offer) in connection with a book-entry
delivery, and (c) any other documents required by the Letter of Transmittal.
Accordingly, payment may not be made to all tendering stockholders at the same
time depending upon when certificates for or confirmations of book-entry
transfer of such Series A Shares into the Depositary's account at the Book-Entry
Transfer Facility are actually received by the Depositary.
The Offer is made solely by the Offer to Purchase and the related Letter of
Transmittal. The Offer is not being made to (nor will tenders be accepted from
or on behalf of) holders of Series A 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.
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If you wish to have us tender any or all of your Series A Shares, please so
instruct us by completing, executing and returning to us the instruction form
contained in this letter. An envelope in which to return your instructions to us
is enclosed. If you authorize the tender of your Series A Shares, all such
Series A Shares will be tendered unless otherwise specified on the instruction
form contained in this letter. Your instructions should be forwarded to us in
ample time to permit us to submit a tender on your behalf prior to the
expiration of the Offer.
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INSTRUCTIONS WITH RESPECT TO THE
OFFER TO PURCHASE FOR CASH
UP TO 10,678,792 OUTSTANDING SHARES OF SERIES A COMMON STOCK
OF
THE XXXXXXX COMPANIES
The undersigned acknowledge(s) receipt of your letter and the enclosed
Offer to Purchase, dated October 7, 1999 and the related Letter of Transmittal
(which, as amended from time to time, together constitute the "Offer"), in
connection with the offer by Xxxxxxx Xxxx and Xxxxxxx X. Xxxx (together, the
"Purchasers") to purchase up to 10,678,792 outstanding shares of Series A Common
Stock, par value $.01 per share (the "Series A Shares"), of The Xxxxxxx
Companies, a Delaware corporation, at a price equal to $0.655 per Series A
Share, net to the tendering stockholder in cash.
This will instruct you to tender to the Purchasers the number of Series A
Shares indicated below (or, if no number is indicated below, all Series A
Shares) held by you for the account of the undersigned, upon the terms and
subject to the conditions set forth in the Offer to Purchase and the related
Letter of Transmittal.
Number of Series A Shares to be Tendered*:
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Dated: ______________________________, 1999
SIGN HERE
Signature(s):
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Print or Type Name(s):
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Print or Type Address(es):
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Area Code and Telephone Number(s):
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Taxpayer Identification or Social Security Number(s):
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[ ] Indicate in this box the order (by certificate number) in which Series A
Shares are to be purchased in event of proration. (Attach additional list if
necessary)**
See Instruction 8 to the Letter of Transmittal.
Shares: 1st:________ 2nd:________ 3rd:________ 4th:________ 5th:________
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* Unless otherwise indicated, it will be assumed that all Series A Shares held
by us for your account are to be tendered.
** If you do not designate an order, in the event that less than all the Series
A Shares tendered are purchased due to proration, Series A Shares will be
selected for purchase by the Depositary. See Instruction 8 to the Letter of
Transmittal.
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