Blueprint
Offer
to Purchase for Cash
All
Outstanding Shares of Common Stock of
Security Land & Development Corporation
at $1.57 Net Per Share by
AB Value Partners, LP and AB Opportunity Fund, LLC
THE
OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M.,
NEW
YORK CITY TIME, ON MAY 9, 2017, UNLESS THE OFFER IS
EXTENDED.
AB
Value Partners, LP, a Delaware limited partnership
(“ABVP”), and AB Opportunity Fund, LLC, a Delaware
limited liability company (“ABOF” and, together with
ABVP, “Purchasers”), each a private investment fund,
hereby seek to acquire all of the outstanding shares of common
stock, $0.10 par value per share (the “Shares”), in
Security Land & Development Corporation, a Georgia corporation
(“Security Land & Development” or
“Company”), at a purchase price of $1.57 per Share (the
“Offer Price”), in cash, without interest, upon the
terms and subject to the conditions set forth in this Offer to
Purchase (this “Offer to Purchase”) and in the related
Letter of Transmittal (the “Letter of Transmittal”), as
each may be supplemented or amended from time to time (which
together constitute the “Offer”).
The
Offer is not conditioned upon Purchasers obtaining financing or
upon the tender of any minimum number of Shares. The Offer is
subject to other conditions. See “The Offer - Section 14 -
Conditions to the Offer.”
In
considering the Offer, you should note that the Offer Price of
$1.57 per Share in this Offer to Purchase is 25.6% higher than the
$1.25 per Share offer price made by the Company in its tender
offer, commenced on or about February 17, 2017, to purchase up to
2,526,247 Shares. If you have previously tendered your Shares to
the Company but want to accept our Offer, then you must send a
written notice of withdrawal no later than 5:00 p.m., Augusta,
Georgia time, on Tuesday, April 12, 2017 (unless extended by
the Company), in accordance with withdrawal procedures set forth in
Company’s offering documents.
Subject
to the applicable rules and regulations of the Securities and
Exchange Commission (the “SEC”), Purchasers expressly
reserve the right, in their sole discretion, at any time and from
time to time: (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; (ii) upon the occurrence of any
of the conditions specified in “The Offer - Section 14 -
Conditions to the Offer,” to terminate the Offer and not
accept for payment any Shares; and (iii) to amend the Offer in
any respect prior to the Expiration Date. Notice of any such
extension, termination or amendment will promptly be disseminated
to shareholders in a manner reasonably designed to inform
shareholders of such change in compliance with applicable law. In
the case of an extension of the Offer, such extension will be
followed by a press release or public announcement which will be
issued no later than 9:00 a.m., Eastern Time, on the next business
day after the scheduled expiration date, in accordance with
applicable law.
This
transaction has not been approved or disapproved by the SEC or any
state securities commission, nor has the SEC or any state
securities commission passed upon the fairness or merits of this
transaction or upon the accuracy or adequacy of the information
contained in this document. Any representation to the contrary is a
criminal offense.
This
Offer to Purchase and the related Letter of Transmittal contain
important information, and you should carefully read both in their
entirety before making a decision with respect to the
Offer.
Questions and
requests for assistance or for additional copies of this Offer to
Purchase, the Letter of Transmittal and other required documents
may be directed to InvestorCom, Inc., at 65 Locust Avenue, Third
Floor, New Canaan, CT 06840, phone (203) 972-9300 or (877)
972-0090.
The
date of this Offer to Purchase is April 7, 2017.
IMPORTANT NOTE
If you
desire to tender all or any portion of your Shares to us pursuant
to the Offer, you should either:
●
Complete and sign
the Letter of Transmittal enclosed with this Offer to Purchase in
accordance with the Instructions to the Letter of Transmittal, have
your signature thereon guaranteed if Instruction 1 to the Letter of
Transmittal so requires, mail or deliver the Letter of Transmittal
and any other required documents to Direct Transfer LLC, the
depositary for the Offer (the “Depositary”), and either
deliver your certificates for your Shares to the Depositary along
with the Letter of Transmittal or deliver your Shares in accordance
with the procedure for book-entry transfer set forth in “The
Offer - Section 3 - Procedures for Accepting the Offer and
Tendering Shares”, in each case before the expiration of the
Offer; or
●
Request that your
broker, dealer, commercial bank, trust company or other nominee
effect the transaction for you. If you hold Shares registered in
the name of a broker, dealer, commercial bank, trust company or
other nominee, then you must contact that person in order to tender
your Shares to us pursuant to the Offer.
If you
want to tender your Shares, but: (i) your certificates for such
Shares are not immediately available or cannot be delivered to the
Depositary by the expiration of the Offer; (ii) you cannot comply
with the procedure for book-entry transfer by the expiration of the
Offer; or (iii) your other required documents cannot be delivered
to the Depositary by the expiration of the Offer, then you can
still tender your Shares if you comply with the guaranteed delivery
procedures set forth in “The Offer - Section 3 - Procedures
for Accepting the Offer and Tendering Shares.”
If you
have previously tendered your Shares to the Company in response to
its tender offer, commenced on or about February 17, 2017, to
purchase up to 2,526,247 Shares for $1.25 per Share, upon the terms
and subject to the conditions set forth in the Company’s
Offer to Purchase, dated February 7, 2017 and amended
March 15, 2017 (the “Company Offer to Purchase”),
and the related Letter of Transmittal of the Company (which,
together with any amendments and supplements thereto, collectively,
the “Company Tender Offer”), but you would rather
tender your Shares to Purchasers pursuant to the Offer for $1.57
per Share, then you must withdraw your tender to the Company. You
have the right to withdraw your tender to the Company at any time
prior to the expiration date of the Company Tender Offer (including
any extensions to the expiration date as may be announced by the
Company). To withdraw any previous tender you made to the Company,
you must provide the Company with a written notice of withdrawal
before 5:00 p.m., Augusta, Georgia time, on Tuesday,
April 12, 2017 (unless extended by the Company) by following
the withdrawal procedures set forth in “The Offer -
Section 8 - Withdrawal Rights” of the Company Offer to
Purchase.
We are
not making the Offer to, and will not accept any tendered Shares
from or on behalf of, shareholders in any jurisdiction in which the
making of the Offer or acceptance thereof would not be in
compliance with the laws of such jurisdiction. However, we may, in
our sole discretion, take such action as we may deem necessary to
make the Offer in any such jurisdiction and extend the Offer to
holders of Shares in such jurisdiction.
We have
not authorized any person to make any recommendation on our behalf
as to whether you should tender or refrain from tendering your
Shares in the Offer. We have also not authorized anyone to provide
you with information or to make any representation in connection
with the Offer or on our behalf other than the information and
representations contained in this Offer to Purchase. If anyone
makes any recommendation or gives any such information or
representation, then you must not rely upon such recommendation,
information or representation as having been authorized by
us.
Questions and
requests for assistance, or for additional copies of this Offer to
Purchase, the Letter of Transmittal and other required documents,
may be directed to InvestorCom, Inc., at 65 Locust Avenue, Third
Floor New Canaan, CT 06840, phone (203) 972-9300 or (877)
972-0090.
TABLE OF CONTENTS
|
SUMMARY TERM SHEET
|
1
|
|
INTRODUCTION
|
6
|
|
THE OFFER
|
8
|
|
1. TERMS OF
THE OFFER; EXPIRATION DATE
|
8
|
|
2. ACCEPTANCE
FOR PAYMENT AND PAYMENT
|
10
|
|
3. PROCEDURES
FOR ACCEPTING THE OFFER AND TENDERING SHARES
|
10
|
|
4. WITHDRAWAL
RIGHTS
|
14
|
|
5. CERTAIN
MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE OFFER TO U.S.
HOLDERS
|
15
|
|
6. PRICE
RANGE OF THE SHARES; DIVIDENDS
|
16
|
|
7. EFFECTS OF
THE OFFER
|
16
|
|
8. CERTAIN
INFORMATION CONCERNING THE COMPANY.
|
16
|
|
9. CERTAIN
INFORMATION CONCERNING PURCHASERS AND THEIR AFFILIATES
|
17
|
|
10. BACKGROUND OF THE OFFER;
CONTACTS WITH THE COMPANY.
|
18
|
|
11. PURPOSE OF THE OFFER; PLANS
FOR THE COMPANY
|
18
|
|
12. SOURCE AND AMOUNT OF
FUNDS
|
18
|
|
13. DIVIDENDS AND
DISTRIBUTIONS
|
19
|
|
14. CONDITIONS TO THE
OFFER
|
19
|
|
15. CERTAIN LEGAL MATTERS;
REQUIRED REGULATORY APPROVALS
|
21
|
|
16. CERTAIN FEES AND
EXPENSES
|
22
|
|
17. MISCELLANEOUS
|
22
|
SUMMARY TERM SHEET
AB
Value Partners, LP, a Delaware limited partnership
(“ABVP”), and AB Opportunity Fund, LLC, a Delaware
limited liability company (“ABOF” and, together with
ABVP, “Purchasers”), each a private investment fund,
hereby seek to acquire all of the outstanding shares of common
stock, $0.10 par value per share (the “Shares”), in
Security Land & Development Corporation, a Georgia corporation
(“Security Land & Development” or
“Company”), at a purchase price of $1.57 per Share (the
“Offer Price”), in cash, without interest, upon the
terms and subject to the conditions set forth in this Offer to
Purchase (this “Offer to Purchase”) and in the related
Letter of Transmittal (the “Letter of Transmittal”), as
each may be supplemented or amended from time to time (which
together constitute the “Offer”).
The
following are some questions that you, as a shareholder of Security
Land & Development, may have and answers to those questions.
You should carefully read this Offer to Purchase and the
accompanying Letter of Transmittal in their entirety because the
information in this summary term sheet is not complete and
additional important information is contained in the remainder of
this Offer to Purchase and the Letter of Transmittal. We have
included cross-references in this summary term sheet to other
sections of the Offer to Purchase where you will find more complete
descriptions of the topics mentioned below.
The
information concerning Security Land & Development contained
herein and elsewhere in this Offer to Purchase has been taken from,
or is based upon, publicly available documents or records of
Security Land & Development on file with the Securities and
Exchange Commission (“SEC”) or other public sources at
the time of the Offer. Purchasers have not independently verified
the accuracy and completeness of such information. Purchasers have
no knowledge that would indicate that any statements contained
herein relating to Security Land & Development taken from, or
based upon, such documents and records filed with the SEC are
untrue or incomplete in any material respect.
In this
Offer to Purchase, unless the context requires otherwise, the terms
“Purchaser,” “we,” “our” and
“us” refer to ABVP and ABOF.
Who is offering to purchase my Shares?
The
Offer to Purchase the Shares is being made by AB Value Partners,
LP, a Delaware limited partnership, and AB Opportunity Fund, LLC, a
Delaware limited liability company, each a private investment fund.
The assets of ABVP and ABOF are managed by AB Value Management LLC,
a New Jersey limited liability company, whose managing member and
executive officer is Andrew Berger. Mr. Berger owns individually 50,000
Shares. Purchasers and their affiliates (other than Mr. Berger) do
not own any of the Shares. Purchasers are not affiliated with
Security Land & Development.
It is
anticipated that, if the Offer is consummated, then: (i)
approximately 50% of the tendered Shares will be purchased by ABVP
and approximately 50% of the tendered Shares will be purchased by
ABOF, up to a total of 636,942 Shares; and (ii) any tendered Shares
in excess of 636,942 Shares will be purchased by ABOF. Purchasers
have combined cash and cash equivalents on hand which would exceed
the total purchase price, including all associated fees, if all the
Shares are tendered in the Offer.
See
“The Offer - Section 9 - Certain Information Concerning
Purchasers and Their Affiliates” for more information about
Purchasers and their affiliates.
What securities are you offering to purchase?
Subject
to certain conditions, we are offering to purchase all of the
outstanding Shares that we (and our affiliates) do not own. As of
February 10, 2017, there were 5,243,107 Shares issued and
outstanding, based on Security Land & Development’s Form
10-Q for the quarter ended December 31, 2016 (the “Security
Land & Development’s Form 10-Q”), filed with the
SEC on February 13, 2017. See
“Introduction.”
How much are you offering to pay and what is the form of
payment?
We are
offering to pay $1.57 per Share, in cash, without interest thereon
and less any required withholding taxes. If you are the record
owner of your Shares and you tender your Shares to us in the Offer,
then you will not have to pay brokerage fees or similar expenses.
If you own your Shares through a broker, dealer, commercial bank,
trust company or other nominee, and your broker, dealer, commercial
bank, trust company or other nominee tenders your Shares on your
behalf, then your broker, dealer, commercial bank, trust company or
other nominee may charge you a fee for doing so. You should consult
your broker, dealer, commercial bank, trust company or other
nominee to determine whether any charge will apply. See
“Introduction,” “The Offer - Section 1 -
Terms of the Offer; Expiration Date” and “The Offer -
Section 16 - Certain Fees and Expenses.”
Why are you making the Offer?
We are
making the Offer because we believe that Shares in Security Land
& Development are an attractive investment. We would like to
acquire a sizable percentage of the Company, and we believe that
the Offer is the most effective means to acquire Shares in the
Company from shareholders who seek liquidity because we are willing
to pay more per Share than the $1.25 per Share that the Company is
offering to pay pursuant to its tender offer, commenced on or about
February 17, 2017, to purchase up to 2,526,247 Shares, upon the
terms and subject to the conditions set forth in the
Company’s Offer to Purchase, dated February 7, 2017 and
amended March 15, 2017 (the “Company Offer to
Purchase”), and the related Letter of Transmittal of the
Company (which, together with any amendments and supplements
thereto, collectively, the “Company Tender Offer”). The
Offer will provide liquidity to those shareholders desiring to
sell, while allowing us to increase our ownership interest in the
Company. See “The Offer - Section 11 - Purpose of the
Offer; Plans for the Company.”
Do you have the financial resources to complete the
Offer?
Yes. If
the total number of Shares sought is purchased, and assuming the
Offer Price is $1.57 per Share, then the aggregate purchase price
would be approximately $8,153,178. We intend to pay the Offer Price
and related expenses using our cash and cash equivalents on hand.
We currently have sufficient cash and cash equivalents on hand to
fund all of our commitments under this Offer. The consummation of
the Offer is not conditioned on Purchasers obtaining financing. See
“The Offer - Section 12 - Source and Amount of
Funds” and “The Offer - Section 16 - Certain Fees
and Expenses.”
Is your financial condition relevant to my decision to tender my
Shares in the Offer?
We do
not believe that our financial condition is material to your
decision whether to tender in the Offer because: (i) the form
of payment consists solely of cash; (ii) the Offer is not
subject to any financing condition; (iii) all of our funding
will come from our cash and cash equivalents on hand; and
(iv) we currently have sufficient cash and cash equivalents on
hand to purchase all Shares validly tendered in the Offer and not
validly withdrawn. See “The Offer - Section 12 - Source
and Amount of Funds.”
What are the material U.S. federal income tax consequences of
tendering my Shares?
As with
any ordinary sale of stock in the public markets, the sale of
Shares pursuant to the Offer will be a taxable transaction for
federal income tax purposes and may also be a taxable transaction
under applicable state, local, foreign and other tax laws. If you
sell Shares pursuant to the Offer, then you will generally
recognize gain or loss for federal income tax purposes in an amount
equal to the difference, if any, between the amount of cash
received and your adjusted tax basis for the Shares sold pursuant
to the Offer. This gain or loss will be capital gain or loss,
provided the Shares are held as capital assets, and the capital
gain or loss will be long term if, as of the date of sale, the
Shares were held for more than one year or will be short term if,
as of such date, you held the Shares for one year or less. You are
urged to consult with your own tax advisors regarding the tax
consequences of tendering your Shares in the Offer. See “The Offer - Section 5 -
Certain Material U.S. Federal Income Tax Consequences of the Offer
to U.S. Holders.”
We
recommend that you consult your own tax advisor to determine the
tax consequences to you of participating in the Offer in light of
your particular circumstances (including the application and effect
of any state, local or non-U.S. income and other tax
laws).
How long do I have to decide whether to tender in the
Offer?
You
have until the expiration of the Offer to tender your Shares. The
Offer currently is scheduled to expire at 5:00 p.m., New York City
time, on May 9, 2017. If the Offer is extended, then we will
issue a press release or public announcement declaring the
extension on or before 9:00 a.m., New York City time, on the first
business day following the date the Offer was scheduled to expire.
See “The Offer - Section 1 - Terms of the Offer;
Expiration Date.”
Will all of the Shares I validly tender be accepted by
Purchasers?
Yes. We
will purchase all Shares validly tendered and not validly
withdrawn, upon the terms and subject to the conditions of the
Offer. See “The Offer - Section 3 - Procedures for Accepting
the Offer and Tendering Shares.”
If I accept the Offer, when and how will I receive payment for my
Shares?
Provided
the conditions to the Offer are satisfied and Purchasers accept
your Shares for payment and consummate the Offer, you will receive
payment as promptly as practicable following the expiration of the
Offer. If you tender by delivering the certificates representing
your Shares, payment to you will be made by Purchasers in the form
of a check for an amount equal to the number of Shares you tendered
multiplied by the Offer Price, less any required withholding for
U.S. federal income tax purposes. If your nominee tenders your
Shares to The Depository Trust Company (“DTC”), payment
to you will be made by Purchasers through credit to your bank or
brokerage account, less applicable brokerage fees, and any required
withholding for U.S. federal income tax purposes. See “The
Offer - Section 1 - Terms of the Offer; Expiration Date”
and “The Offer - Section 2 - Acceptance for Payment and
Payment” for more information.
What are the most significant conditions to the Offer?
The
Offer is not conditioned upon Purchasers obtaining financing or on
the tender of a minimum number of Shares. However, our obligation
to accept and pay for your tendered Shares depends upon the
conditions set forth in “The Offer - Section 14 -
Conditions to the Offer” (any of which may be waived by us),
including, but not limited to:
●
any change or
prospective change in the affairs of Security Land &
Development that, in our reasonable judgment, has a materially
adverse effect on Security Land & Development or
us;
●
the threat or
existence of litigation that seeks to challenge or delay the Offer
or that adversely affects the Offer or our ability to exercise
ownership rights with respect to the Shares;
●
the existence of
any law limiting our ability to consummate the Offer;
●
a general
suspension of trading in, or limitation on prices for, securities
on any national securities exchange or in the over-the-counter
markets in the United States;
●
the declaration of
a banking moratorium or any suspension of payments in respect of
our bank or other banks in the United States, whether or not
mandatory; or
●
the commencement or
escalation of a war, armed hostilities or other similar national or
international calamity, including, but not limited to, an act of
terrorism, directly or indirectly involving the United
States.
Can the Offer be extended and under what
circumstances?
We may
extend the Offer from time to time in our sole discretion. See
“The Offer - Section 1 - Terms of the Offer; Expiration
Date.”
How will I be notified if the Offer is extended?
If we
extend the Offer, then we will make a public announcement of the
extension not later than 9:00 a.m., New York City time, on the next
business day after the day on which the Offer was scheduled to
expire. See “The Offer - Section 1 - Terms of the Offer;
Expiration Date.”
What does Security Land & Development’s Board of
Directors think of the Offer?
Purchasers
have not asked Security Land & Development’s Board of
Directors to review or approve the Offer. Within ten (10) business
days after the date of this Offer to Purchase, Security Land &
Development is required by law to publish, send or give to you a
statement either: (i) recommending acceptance or rejection of the
Offer; (ii) stating that it has no opinion with respect to the
Offer; or (iii) stating that it is unable to take a position with
respect to the Offer.
Security
Land & Development has commenced the Company Tender Offer to
purchase up to 2,526,247 Shares at a purchase price of $1.25 per
Share. Security Land & Development’s Board of Directors
has approved the Company Tender Officer and found it to be fair,
but did not make any recommendation to the shareholders as to
whether they should tender their Shares in the Company Tender
Offer.
If I decide not to tender, how will the Offer affect
me?
If you
decide not to tender your Shares, then you will continue to own
such Shares after the consummation of the Offer.
The
Shares are currently registered under the Securities Exchange Act
of 1934, as amended (the “Exchange Act”). Such
registration may be terminated upon application of Security Land
& Development to the SEC if the Shares are not held by 300 or
more holders of record. As set forth in the Company Offer to
Purchase, Security Land & Development had 595 shareholders of
record before the Company Tender Offer was commenced. Accordingly,
if the Shares tendered to the Company in the Company Tender Offer
and/or the shares tendered to Purchasers in the Offer reduces the
number of shareholders of record below 300, then Security Land
& Development would be eligible to, and has indicated that it
would expect to, terminate the registration of its common stock
under the Exchange Act. If its common stock is de-registered, then
it will likely be more difficult for shareholders to obtain
information about the Company. See “The Offer -Section 7 -
Effects of the Offer.”
Do I have appraisal or dissenter’s rights?
There
are no appraisal or dissenter’s rights available in
connection with the Offer.
How do I tender my Shares?
To
tender your Shares, you must deliver the certificates representing
your Shares, together with a completed Letter of Transmittal and
any other documents required by the Letter of Transmittal, to
Direct Transfer LLC, the depositary for the Offer (the
“Depositary”), not later than the time the Offer
expires. If your Shares are held in street name (i.e., through a
broker, dealer, commercial bank, trust company or other nominee),
then the Shares can be tendered by your nominee through the DTC. If
you want to tender your Shares, but: (i) your certificates for such
Shares are not immediately available or cannot be delivered to the
Depositary by the expiration of the Offer; (ii) you cannot comply
with the procedure for book-entry transfer by the expiration of the
Offer; or (iii) your other required documents cannot be delivered
to the Depositary by the expiration of the Offer, then you can
still tender your Shares if you comply with the guaranteed delivery
procedures described in this Offer to Purchase. See “The
Offer - Section 3 - Procedures for Accepting the Offer and
Tendering Shares.”
How do I withdraw my previously tendered Shares?
You may
withdraw all or a portion of your tendered Shares by delivering
written or facsimile notice to the Depositary prior to the
expiration of the Offer. Further, if we have not agreed to accept
your Shares for payment after the expiration of the Offer, then you
can withdraw them at any time until we do accept your Shares for
payment. Once Shares are accepted for payment, they cannot be
withdrawn. See “The Offer - Section 4 - Withdrawal
Rights.”
What are Purchasers’ future plans for the
Company?
We are
making the Offer for investment purposes with a view towards making
a profit. Our intent is to acquire Shares that we hope might
ultimately increase in value. The Offer represents a way for us to
acquire Shares given the lack of a trading market for the Shares.
In addition, the Offer allows us to offer all of the shareholders
an opportunity to sell all or part of their investment if they
choose to do so at this time.
While
Purchasers intend to seek ways to maximize the value of the Shares
and Security Land & Development’s assets, Purchasers do
not have any present intention to take any action in connection
with any extraordinary transaction involving the Company or control
of the Company. However Purchasers reserve the right to take such
actions in the future.
We may
also decide to change our intentions with respect to the purposes
and plans described in “The Offer - Section 11 - Purpose
of the Offer; Plans for the Company.” Any such decision would
be based on our assessment of a number of different factors,
including, without limitation, the business, prospects and affairs
of Security Land & Development, the market for the Shares, the
condition of the securities markets, general economic and industry
conditions and other opportunities available to us.
Who can I talk to if I have any questions about the
Offer?
Questions
and requests for assistance, or for additional copies of this Offer
to Purchase, the Letter of Transmittal and other required
documents, may be directed to InvestorCom, Inc. (the
“Information Agent”), at 65 Locust Avenue, Third Floor
New Canaan, CT 06840, phone (203) 972-9300 or (877)
972-0090.
What is the market value of my Shares?
There
is no established market for the Shares and, according to the
Company Offer to Purchase, they are rarely transferred. See
“The Offer - Section 6 - Price Range of the Shares;
Dividends.”
To All Holders of Shares of Common Stock of Security Land &
Development Corporation:
AB
Value Partners, LP, a Delaware limited partnership
(“ABVP”), and AB Opportunity Fund, LLC, a Delaware
limited liability company (“ABOF” and, together with
ABVP, “Purchasers”), each a private investment fund,
hereby seek to acquire all of the outstanding shares of common
stock, $0.10 par value per share (the “Shares”), in
Security Land & Development Corporation, a Georgia corporation
(“Security Land & Development” or
“Company”), at a purchase price of $1.57 per Share (the
“Offer Price”), in cash, without interest, upon the
terms and subject to the conditions set forth in this Offer to
Purchase (this “Offer to Purchase”) and in the related
Letter of Transmittal (the “Letter of Transmittal”), as
each may be supplemented or amended from time to time (which
together constitute the “Offer”). In this Offer to
Purchase, unless the context requires otherwise, the terms
“Purchaser,” “we,” “our” and
“us” refer to AB Value Partners, LP and AB Opportunity
Fund, LLC.
The
Offer will expire at 5:00 p.m., New York time, on May 9, 2017
(the “Expiration Date”) unless we decide to extend the
Offer.
Certain
conditions to the consummation of the Offer are described in
“The Offer - Section 14 -Conditions to Offer.” We
reserve the right (subject to applicable law and the rules of the
Securities and Exchange Commission (“SEC”)) to amend or
waive any one or more of the terms of, and conditions to, the
Offer. However, if any of these conditions are not satisfied, we
may elect not to purchase any Shares tendered in the Offer. The
Offer is not conditioned on our obtaining financing or on any
minimum number of Shares being tendered in the Offer.
If you
are a record owner of Shares and tender directly to Direct Transfer
LLC, the depositary for the Offer (the “Depositary”),
then you will generally not be obligated to pay brokerage, service
fees or commissions or, except as set forth in the Letter of
Transmittal, share transfer taxes with respect to our purchase of
Shares in the Offer. If you own your Shares through a bank, broker,
dealer, trust company or other nominee and that person tenders your
Shares on your behalf, then that person may charge you a fee for
doing so. You should consult with your bank, broker, dealer, trust
company or other nominee to determine whether any charges will
apply
Under
certain circumstances, you may be subject to U.S. federal
withholding taxes of 28.0% of the gross proceeds payable to you
pursuant to the Offer, depending on your personal situation. See
“The Offer - Section 5 - Certain Material U.S. Federal
Income Tax Consequences of the Offer to U.S. Holders” for a
more detailed description of the material U.S. federal income tax
considerations applicable to Security Land &
Development’s shareholders in connection with the Offer. We
recommend that you consult your own tax advisor to determine the
tax consequences to you of participating in the Offer in light of
your particular circumstances (including the application and effect
of any state, local or non-U.S. income and other tax
laws).
We will
pay the fees and expenses of the Depositary in connection with the
Offer. The Depositary will act as agent for tendering shareholders
for the purpose of receiving payment from us and transmitting
payments to tendering shareholders whose Shares are accepted for
payment. We will also pay any expenses of InvestorCom, Inc. (the
“Information Agent”) associated with answering
questions and providing information concerning the
Offer.
The
Offer has not been reviewed by Security Land &
Development’s Board of Directors or management. No later than
ten (10) business days from the date of this Offer to Purchase,
Security Land & Development is required by law to publish, send
or give to you a statement disclosing that it either recommends
acceptance or rejection of the Offer, expresses no opinion and
remains neutral toward the Offer, or is unable to take a position
with respect to the Offer.
NEITHER
THIS OFFER TO PURCHASE NOR THE OFFER CONSTITUTES A SOLICITATION OF
A PROXY, CONSENT OR AUTHORIZATION FOR OR WITH RESPECT TO THE ANNUAL
MEETING OR ANY SPECIAL MEETING OF, OR ACTION BY WRITTEN CONSENT BY,
SECURITY LAND & DEVELOPMENT’S SHAREHOLDERS.
According to
Security Land & Development’s Form 10-Q, as of February
10, 2017, there were 5,243,107 Shares of common stock issued and
outstanding.
In the
event the Offer is terminated or not consummated, or after the
expiration of the Offer, we reserve the right, subject to
applicable law, to purchase additional Shares not tendered in the
Offer. Such purchases may be made in the open market or through
privately negotiated transactions, tender offers or otherwise. Any
such purchases may be on the same terms as, or on terms more or
less favorable than, the terms of this Offer. Any possible future
purchases by us will depend on many factors, including the results
of the Offer, our business and financial position and general
economic and market conditions.
THIS
OFFER TO PURCHASE, THE LETTER OF TRANSMITTAL AND THE OTHER RELATED
DOCUMENTS DELIVERED TO YOU CONTAIN IMPORTANT INFORMATION WHICH
SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE WITH RESPECT
TO THE OFFER.
Section
1. Terms of the Offer; Expiration Date.
Upon
the terms of, and subject to the conditions to, the Offer
(including any terms of, and conditions to, any extension or
amendment), we will accept for payment for all Shares that are
validly tendered prior to the Expiration Date and not properly
withdrawn in accordance with “The Offer - Section 4 -
Withdrawal Rights.” The term “Expiration Date”
means 5:00 p.m., New York time, on May 9, 2017, unless and
until we extend the period of time that the Offer is open, in which
case the term “Expiration Date” means the latest time
and date at which the Offer, as so extended, expires.
The
Offer is conditioned on the satisfaction of certain conditions. See
“The Offer - Section 14 - Conditions to the Offer.” We
reserve the right (but shall not be obligated), in our sole
discretion, and for any reason, to waive any of such
conditions.
We
reserve the right to decrease the number of Shares we are seeking
in the Offer, subject to applicable laws and regulations described
below.
Subject
to the terms of the applicable rules and regulations of the SEC, we
reserve the right, but not the obligation, and regardless of
whether or not any of the events or facts set forth in “The
Offer - Section 14 - Conditions to the Offer” shall have
occurred, to:
●
extend the Offer
beyond the then scheduled Expiration Date, and thereby delay
acceptance for payment of and payment for any Shares, by giving
oral or written notice of that extension to the Depositary;
and
●
amend the Offer in
any other respect by giving oral or written notice of that
amendment to the Depositary.
If by
5:00 p.m., New York time, on May 9, 2017 (or any date or time
then set as the Expiration Date), any or all conditions to the
Offer have not been satisfied or waived, we reserve the right (but
will not be obligated to), subject to applicable laws and
regulations of the SEC, to:
●
extend the Offer,
and, subject to applicable withdrawal rights, retain all tendered
Shares during the period for which the Offer is open or
extended;
●
waive any
conditions to the tender and accept for payment on the Expiration
Date and pay for all Shares validly tendered and not properly
withdrawn prior to the Expiration Date;
●
terminate the Offer
and not accept for payment or pay for any Shares, in which case all
tendered Shares shall promptly be returned to tendering
shareholders; and
●
amend the Offer in
any other respect by giving oral or written notice of that
amendment to the Depositary.
Any
extension, waiver, amendment or termination of the Offer will be
followed as promptly as practicable by public announcement thereof.
In the case of an extension, the announcement will 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(d) under the
Securities Exchange Act of 1934, as amended (the “Exchange
Act”). For purposes of this Offer to Purchase and the Offer,
a “business day” means any day other than a Saturday,
Sunday or a federal holiday, and consists of the time period from
12:01 a.m. through 12:00 midnight, New York City time.
If we
extend the Offer, we are delayed in accepting for payment or paying
for Shares, or we are unable to accept for payment or pay for
Shares pursuant to the Offer for any reason, then, without
prejudice to our rights under the Offer, the Depositary may, on our
behalf, retain all Shares tendered. Such tendered Shares may not be
withdrawn except as provided in “The Offer - Section 4 -
Withdrawal Rights.” Our reservation of the right to delay
acceptance for payment of or payment for Shares is subject to Rule
14e-1(c) under the Exchange Act, which requires that we pay the
consideration offered or return the Shares deposited by or on
behalf of shareholders promptly after the termination or withdrawal
of the Offer.
If we
make a material change in the terms of the Offer, or waive a
material condition to the Offer, we will extend the Offer and
disseminate additional tender offer materials to the extent
required by Rules 14d-4(d)(1), 14d-6(c) and 14e-1 under the
Exchange Act. The minimum period during which an Offer must remain
open following material changes in the terms of the Offer, other
than a change in price or a change in the percentage of securities
sought, will depend upon the facts and circumstances, including the
materiality of the changes. A minimum ten-business day period from
the date of such change is generally required to allow for adequate
dissemination of new information to shareholders in connection with
a change in price or, subject to certain limitations, a change in
the percentage of securities sought.
If we
decide, in our sole discretion, to increase the consideration
offered in the Offer to holders of Shares and if, at the time that
notice of the increase is first published, sent or given to holders
of Shares, the Offer is scheduled to expire at any time earlier
than the expiration of a period ending on the tenth business day
from, and including, the date that such notice is first so
published, sent or given, then the Offer will be extended until at
least the expiration of ten (10) business days from the date the
notice of the increase is first published, sent or given to holders
of Shares. If, on or before the Expiration Date, we increase the
consideration being paid for Shares accepted for payment pursuant
to the Offer, such increased consideration will be paid to all
shareholders whose Shares are purchased in the Offer, whether or
not such Shares were tendered before the announcement of the
increase in consideration.
After
the expiration of the Offer, we may, in our sole discretion, but
are not obligated to, provide a subsequent offering period of at
least three (3) business days to permit additional tenders of
Shares (a “Subsequent Offering Period”). A Subsequent
Offering Period would be an additional period of time, following
the expiration of the Offer and the purchase of Shares in the
Offer, during which shareholders may tender Shares not tendered in
the Offer (a “Subsequent Offer”). A Subsequent Offering
Period, if one is provided, is not an extension of the Offer, which
already will have been completed.
No
withdrawal rights apply to Shares tendered in a Subsequent Offering
Period, and no withdrawal rights apply during a Subsequent Offering
Period with respect to Shares previously tendered in the Offer and
accepted for payment. The same price paid in the Offer will be paid
to shareholders tendering Shares in a Subsequent Offering Period,
if one is provided. Pursuant to Rule 14d-11 under the Exchange Act,
we may provide a Subsequent Offering Period so long as, among other
things: (i) the initial offering period of at least twenty
(20) business days has expired; (ii) we immediately accept and
promptly pay for all securities validly tendered during the Offer;
(iii) we announce the results of the Offer, including the
approximate number and percentage of Shares deposited in the Offer,
no later than 9:00 a.m., Eastern time, on the next business day
after the Expiration Date and immediately begin the Subsequent
Offering Period; and (iv) we immediately accept and promptly
pay for Shares as they are tendered during the Subsequent Offering
Period.
We do
not currently intend to provide a Subsequent Offering Period,
although we reserve the right to do so. If we elect to include or
extend a Subsequent Offering Period, then we will make a public
announcement of such inclusion or extension no later than 9:00
a.m., Eastern time, on the next business day after the Expiration
Date or date of termination of any prior Subsequent Offering
Period.
We will
make a request to Security Land & Development for its
shareholder list and security position listings for the purpose of
disseminating the Offer to holders of Shares. We will send this
Offer to Purchase, the related Letter of Transmittal and other
related documents to record holders of Shares and to brokers,
dealers, banks, trust companies and other nominees whose names
appear on the shareholder list or, if applicable, who are listed as
participants in a clearing agency’s security position listing
for subsequent transmittal to beneficial owners of
Shares.
Section
2. Acceptance for Payment and Payment.
Promptly following
the Expiration Date and upon the terms of, and subject to the
conditions to, the Offer (including, if the Expiration Date is
extended or the Offer is otherwise amended, the terms of, and
conditions to, any such extension or amendment), we will accept for
payment and, subject to any applicable withholding tax obligations,
pay for the Shares validly tendered prior to the Expiration Date
and not properly withdrawn in accordance with Section 4,
“Withdrawal Rights.” We will decide, in our reasonable
discretion, all questions as to the satisfaction of those terms and
conditions, and each such decision will be final and binding. See
“The Offer - Section 1 - Terms of the Offer; Expiration
Date” and “The Offer - Section 14 - Conditions to
Offer.”
In all
cases, payment for Shares accepted for payment under the Offer will
be made only after timely receipt by the Depositary of:
(i) certificates representing, or a timely book-entry
confirmation respecting, those Shares; (ii) a Letter of
Transmittal, or a facsimile thereof, properly completed and
executed with any required signatures thereon or, in the case of a
book-entry transfer, an agent’s message; and (iii) any
other documents the Letter of Transmittal requires.
Accordingly,
tendering shareholders may be paid at different times depending on
when Shares and other required documents are actually received by
the Depositary.
For
purposes of the Offer, we will be deemed to have purchased Shares
that have been validly tendered and not properly withdrawn if and
when we give oral or written notice to the Depositary of our
acceptance for payment of Shares pursuant to the Offer. On the
terms of and subject to the conditions to the Offer, we will pay
for Shares we have accepted for payment under the Offer by
depositing the purchase price therefor with the Depositary. The
Depositary will act as agent for tendering shareholders for the
purpose of receiving payment from us and transmitting payment to
tendering shareholders whose Shares we have accepted for payment.
Upon the deposit of funds with the Depositary for the purpose of
making payments to tendering shareholders, our obligation to make
such payments shall be satisfied, and tendering shareholders must
thereafter look solely to the Depositary for payments of amounts
owed to them by reason of the acceptance for payment of Shares
pursuant to the Offer.
We
expressly reserve the right, in our sole discretion, to delay
acceptance for payment of or payment for Shares. However, we will
effect any such delays in compliance with Rule 14e-1(c) under the
Exchange Act, which requires that we pay the consideration offered
or return the Shares deposited by or on behalf of shareholders
promptly after the termination or withdrawal of the Offer. In such
a case, the Depositary may retain tendered Shares on our behalf and
those Shares may not be withdrawn except to the extent tendering
shareholders are entitled to exercise, and duly exercise, the
withdrawal rights described in “The Offer - Section 4 -
Withdrawal Rights.” Under no
circumstances will interest be paid on the purchase price to be
paid regardless of any extension of the Offer or any delay in
making payment.
If we
increase the consideration to be paid for the Shares pursuant to
the Offer, we will pay such increased consideration for all Shares
purchased pursuant to the Offer.
If any
tendered Shares are not purchased under the Offer for any reason,
or if share certificates are submitted representing more Shares
than are tendered, certificates representing unpurchased or
untendered Shares will be returned, without expense to the
tendering shareholder (or, in the case of Shares delivered pursuant
to the book-entry transfer procedures set forth in “The Offer
- Section 3 - Procedures for Accepting the Offer and Tendering
Shares,” such Shares will be credited to an account
maintained within The Depository Trust Company
(“DTC”)), as promptly as practicable following the
expiration, termination or withdrawal of the Offer.
Section
3. Procedures for Accepting the Offer and Tendering
Shares.
Valid Tender. For a shareholder to validly tender
Shares under the Offer:
(i) the
Depositary must receive, at the address set forth on the back cover
of this Offer to Purchase and prior to the Expiration
Date:
●
a Letter of
Transmittal, or a facsimile thereof, properly completed and duly
executed, together with any required signature guarantees, or, in
the case of a book-entry transfer, an agent’s message, and
any other required documents; and
●
either certificates
representing the tendered Shares or, in the case of tendered Shares
delivered in accordance with the procedures for book-entry transfer
described below, a book-entry confirmation of that delivery;
or
(ii) the
tendering shareholder must, before the Expiration Date, comply with
the guaranteed delivery procedures we describe below.
The
term “agent’s message” means a message,
transmitted by the DTC, to, and received by, the Depositary and
forming part of the book-entry confirmation that states that DTC
has received an express acknowledgement from the participant in DTC
tendering the Shares that are the subject of the book-entry
confirmation, that the participant has received and agrees to be
bound by the Letter of Transmittal and that we may enforce that
agreement against that participant.
If
certificates evidencing tendered Shares are forwarded to the
Depositary in multiple deliveries, a properly completed and duly
executed Letter of Transmittal (or a manually signed facsimile of
the Letter of Transmittal) must accompany each delivery. No
alternative, conditional or contingent tenders will be accepted and
no fractional Shares will be purchased.
The
method of delivery of share certificates and all other required
documents, including through DTC, is at your option and risk, and
the delivery will be deemed made 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.
Book-Entry Transfer. The Depositary
will establish an account with respect to the Shares at DTC for
purposes of the Offer after the date of this Offer to Purchase. Any
financial institution that is a participant in the system of DTC
may make book-entry delivery of Shares by causing DTC to transfer
such Shares into the Depositary’s account at DTC in
accordance with DTC’s procedures. However, although delivery
of Shares may be effected through book-entry transfer into the
Depositary’s account at DTC, the Letter of Transmittal (or a
manually signed facsimile of the Letter of Transmittal), properly
completed and duly executed, with any required signature
guarantees, or an agent’s message, and any other required
documents must, in any case, be transmitted to, and received by,
the Depositary at the address set forth on the back cover of this
Offer to Purchase prior to the Expiration Date, or the tendering
shareholder must comply with the guaranteed delivery procedures
described below for a valid tender of Shares by book-entry.
Delivery of the documents to DTC or any other party does not
constitute delivery to the Depositary.
Signature Guarantees. Signatures on all Letters of
Transmittal must be guaranteed by a firm that is a member of the
Securities Transfer Agents Medallion Program, or by any other
“eligible guarantor institution,” as that term is
defined in Rule 17Ad-15 under the Exchange Act (each, an
“Eligible Institution”), except in cases where Shares
are tendered:
●
by a registered
holder of Shares who has not completed either the box entitled
“Special Delivery Instructions” or the box entitled
“Special Payment Instructions” on the Letter of
Transmittal; or
●
for the account of
an Eligible Institution.
If a
Share certificate is registered in the name of a person other than
the signer of the Letter of Transmittal, or if payment is to be
made, or a share certificate not accepted for payment or not
tendered is to be returned, to a person other than the registered
holder(s), then the tendered certificate must be endorsed or
accompanied by appropriate stock powers, in either case, signed
exactly as the name(s) of the registered holder(s) appear on the
certificate, with the signature(s) on the certificate or stock
powers guaranteed by an eligible guarantor institution. See
Instructions 1 and 5 to the Letter of Transmittal.
Guaranteed Delivery. If you wish to
tender Shares under the Offer and your certificates for Shares are
not immediately available, the procedures 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, then your tender may be effected if all the following
conditions are met:
●
your tender is made
by or through an Eligible Institution;
●
a properly
completed and executed Notice of Guaranteed Delivery, substantially
in the form we provide (the “Notice of Guaranteed
Delivery”), is received by the Depositary, as provided below,
prior to the Expiration Date; and
●
the Depositary
receives, at the address set forth on the back cover of this Offer
to Purchase and within the period of three (3) trading days after
the date of execution of that Notice of Guaranteed Delivery,
either:
●
the certificates
representing the Shares being tendered together with (i) a Letter
of Transmittal, or a facsimile thereof, relating thereto which has
been properly completed and duly executed and includes all
signature guarantees required thereon, and (ii) all other required
documents; or
●
in the case of any
book-entry transfer of the Shares being tendered which is effected
in accordance with the book-entry transfer procedures described
above within the same three-trading day period (i) either a Letter
of Transmittal, or a facsimile thereof, relating thereto which has
been properly completed and duly executed and includes all
signature guarantees required thereon or an agent’s message,
(ii) a book-entry confirmation relating to that transfer, and (iii)
all other required documents.
For
these purposes, a “trading day” is any day on which the
over-the-counter market on the Pink Sheets is open for
business.
A
Notice of Guaranteed Delivery must be delivered to the Depositary
by hand, facsimile transmission or mail and must include a
guarantee by an Eligible Institution in the form set forth in such
Notice of Guaranteed Delivery.
Condition to Payment. In all cases,
payment for Shares tendered and accepted for payment pursuant to
the Offer will be made only after timely receipt by the Depositary
of the certificates evidencing Shares, or a timely book-entry
confirmation for the delivery of Shares, the Letter of Transmittal
(or a manually signed facsimile of the Letter of Transmittal),
properly completed and duly executed, with any required signature
guarantees, or, in the case of a book-entry transfer, an
agent’s message, and any other documents required by the
Letter of Transmittal.
Appointment. By executing the Letter of
Transmittal as set forth above (including delivery through an
agent’s message), you irrevocably appoint our designees as
your agents, 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 your rights with respect to the Shares you
tendered and with respect to any Shares, securities and rights
issued or issuable in respect of such Shares on or after the date
of this Offer to Purchase. These powers of attorney and proxies
will be considered coupled with an interest in the tendered Shares
and additional securities attributable thereto. The appointment
will be effective if, as and when, and only to the extent that, we
accept your Shares for payment. Upon our acceptance for payment,
all prior powers of attorney, proxies and consents given by you
with respect to such Shares (and your other Shares and securities)
will be revoked, without further action, and no subsequent powers
of attorney or proxies may be given nor any subsequent written
consent executed by you (and, if given or executed, will not be
deemed effective). Our designees will, with respect to the Shares
for which the appointment is effective, be empowered to exercise
all of your voting and other rights as they in their sole
discretion may deem proper at any annual or special meeting of
Security Land & Development’s shareholders or any
adjournment or postponement of that meeting, by written consent in
lieu of any meeting or otherwise. We reserve the right to require
that, in order for Shares to be deemed validly tendered,
immediately upon our payment for the Shares, we must be able to
exercise full voting, consent and other rights with respect to the
Shares and any additional securities attributable thereto,
including voting at any meeting of Security Land &
Development’s shareholders with a record date prior to the
consummation of the Offer. The Offer does not constitute a
solicitation of proxies, absent a purchase of Shares, for any
meeting of Security Land & Development’s
shareholders.
Tendering shareholder’s Representation
and Warranty; Purchasers’ Acceptance Constitutes an
Agreement. It is a violation of Rule 14e-4 under the
Exchange Act for a person acting alone or in concert with others,
directly or indirectly, to tender Shares for such person’s
own account unless at the time of tender and at the Expiration Date
such person has a “net long position” in: (i) the
Shares that is equal to or greater than the amount tendered and
will deliver or cause to be delivered such Shares for the purpose
of tendering to us within the period specified in the Offer; or
(ii) other securities immediately convertible into, exercisable for
or exchangeable into Shares (“Equivalent Securities”)
that is equal to or greater than the amount tendered and, upon the
acceptance of such tender, will acquire such Shares by conversion,
exchange or exercise of such Equivalent Securities to the extent
required by the terms of the Offer and will deliver or cause to be
delivered such Shares so acquired for the purpose of tender to us
within the period specified in the Offer. Rule 14e-4 also provides
a similar restriction applicable to the tender or guarantee of a
tender on behalf of another person. A tender of Shares made
pursuant to any method of delivery set forth herein will constitute
the tendering shareholder’s representation and warranty to us
that: (i) such shareholder has a “net long position” in
Shares or Equivalent Securities being tendered within the meaning
of Rule 14e-4; and (ii) such tender of Shares complies with Rule
14e-4. Our acceptance for payment of Shares tendered pursuant to
the Offer will constitute a binding agreement between the tendering
shareholder and us upon the terms and subject to the conditions of
the Offer.
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 us, in our sole discretion. This determination will
be final and binding on all parties. We reserve the absolute right
to reject any or all tenders that we determine not to be in proper
form or the acceptance for payment of which may be unlawful. We
also reserve the absolute right, in our sole discretion, to waive
any defect or irregularity in any tender of Shares of any
particular shareholder, whether or not similar defects or
irregularities are waived in the case of other shareholders. A
tender of Shares will not have been made until all defects and
irregularities have been cured or waived. None of us or any of our
affiliates or assigns, the Depositary, or any other person will be
under any duty to give notification of any defects or
irregularities in tenders or notices of objection or incur any
liability for failure to give any notification. Our interpretation
of the terms of, and conditions to, the Offer (including the Letter
of Transmittal and the instructions thereto) will be final and
binding. By tendering Shares to us you agree to accept all
decisions we make concerning these matters and wave any right you
might otherwise have to challenge those decisions.
If you
tender your Shares pursuant to any of the procedures described
above, it will constitute your acceptance of the terms of, and
conditions to, the Offer, as well as your representation and
warranty to us that: (i) you have the full power and authority
to tender, sell, assign and transfer the tendered Shares (and any
and all Shares, other securities or distributions issued or
issuable in respect of your Shares); and (ii) when we accept
your Shares for payment, we will acquire good and marketable title
to your Shares, free and clear of all liens, restrictions, claims
and encumbrances and not subject to any adverse claims or
rights.
Our
acceptance of your Shares pursuant to any of the procedures
described above will constitute a binding agreement between you and
us upon the terms of, and subject to the conditions to, the
Offer.
In this
Offer to Purchase, and in the Letter of Transmittal, we have
included certain statements that our determinations with respect to
such matters as the validity of tenders, the validity of purported
withdrawal of Shares and the satisfaction of conditions to the
Offer will be valid and binding. These statements, and any related
statements that a holder tendering Shares waives any right to
challenge our decisions, are not intended and should not be
construed as meaning that any rights under federal or state
securities laws have been waived or that our decisions are not
subject to applicable law.
Withholding Taxes. In order to avoid
“withholding taxes” of U.S. federal income tax on
payments of cash pursuant to the Offer, a U.S. shareholder
surrendering Shares in the Offer must, unless an exemption applies,
provide the Depositary with such shareholder’s correct
taxpayer identification number (“TIN”) on a Form W-9,
certify under penalties of perjury that such TIN is correct and
provide certain other certifications. If a shareholder does not
provide such shareholder’s correct TIN or fails to provide
the required certifications, then the U.S. Internal Revenue Service
(the “IRS”) may impose a penalty on such shareholder,
and payment of cash to such shareholder pursuant to the Offer may
be subject to withholding taxes of 28%. All U.S. shareholders
surrendering Shares pursuant to the Offer should complete and sign
the main signature form and the Form W-9 included as part of the
Letter of Transmittal to provide the information and certification
necessary to avoid withholding taxes (unless an applicable
exemption exists and is proved in a manner satisfactory to us and
the Depositary). Certain shareholders (including, among others,
corporations) are not subject to withholding taxes but may be
required to provide evidence of their exemption from withholding
taxes. Non-U.S. shareholders should complete and sign the main
signature form included as part of the Letter of Transmittal and an
appropriate U.S. Form W-8 (instead of a Form W-9), a copy of which
may be obtained from the Depositary, in order to avoid withholding
taxes, but nevertheless may be subject to a 15%
“FIRPTA” withholding tax. See Instruction 8 to the
Letter of Transmittal.
Lost Certificates. If the share
certificates that a registered holder wants to surrender have been
lost, destroyed or stolen, then the shareholder should promptly
notify Security Land & Development to determine the steps that
must be taken in order to replace the certificates.
Section
4. Withdrawal Rights.
Except
as this Section 4 otherwise provides, tenders of Shares are
irrevocable. You may withdraw previously tendered Shares at any
time prior to the Expiration Date. In addition, tendered Shares may
be withdrawn at any time after sixty (60) days from the date of
this Offer to Purchase if the Shares have not yet been accepted for
payment by us. If we extend the Offer, delay our acceptance for
payment of Shares or are unable to accept Shares for payment
pursuant to the Offer for any reason, then, without prejudice to
our rights under the Offer but subject to applicable law, the
Depositary may, nevertheless, on our behalf, retain tendered
Shares, and those Shares may not be withdrawn except to the extent
that tendering shareholders are entitled to withdrawal rights as
described in this Section 4. However, our ability to delay the
payment for Shares that we have accepted for payment is limited by
applicable law, including Rule 14e-1(c) under the Exchange Act,
which requires that a bidder pay the consideration offered or
return the securities deposited by or on behalf of security holders
promptly after the termination or withdrawal of such bidder’s
offer. Any delay will be by an extension of the Offer to the extent
required by law.
For a
withdrawal to be effective, a written or facsimile transmission
notice of withdrawal must be timely received by the Depositary at
the address set forth on the back cover of this Offer to Purchase.
Any notice of withdrawal must specify the name of the person who
tendered the Shares to be withdrawn, the number of Shares to be
withdrawn and the name of the registered holder of the Shares, if
different from the name of the person who tendered the Shares. If
certificates evidencing Shares to be withdrawn have been delivered
or otherwise identified to the Depositary, then, prior to the
physical release of the certificates, the serial numbers shown on
the certificates must be submitted to the Depositary and the
signature(s) on the notice of withdrawal must be guaranteed by an
Eligible Institution, unless the Shares have been tendered for the
account of an Eligible Institution. If Shares have been delivered
pursuant to the procedures for book-entry transfer as set forth in
“The Offer - Section 3 - Procedures for Accepting the Offer
and Tendering Shares” any notice of withdrawal must also
specify the name and number of the account at DTC to be credited
with the withdrawn Shares and otherwise comply with DTC’s
procedures.
Withdrawals of
tendered Shares may not be rescinded. If you have properly
withdrawn your Shares, they will be deemed not to have been validly
tendered for purposes of the Offer. However, withdrawn Shares may
be re- tendered at any time prior to the Expiration Date by again
following one of the procedures described in “The Offer -
Section 3 - Procedures for Accepting the Offer and Tendering
Shares.”
All
questions as to the form and validity (including time of receipt)
of notices of withdrawal will be determined by us, in our sole
discretion, subject to applicable law, which determination will be
final and binding on all parties. We also reserve the absolute
right, in our sole discretion, to waive any defect or irregularity
in any notices of withdrawal of any particular shareholder, whether
or not similar defects or irregularities are waived in the case of
other shareholders. None of us or our affiliates or assigns, the
Depositary 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.
The
method for delivery of any documents related to a withdrawal is at
the risk of the withdrawing shareholder. Any documents related to a
withdrawal will be deemed delivered only when actually received by
the Depositary. If delivery is by mail, registered mail with return
receipt requested is recommended. In all cases, sufficient time
should be allowed to ensure timely delivery.
Section
5. Certain Material U.S. Federal Income Tax Consequences
of the Offer to Certain U.S. Holders.
The
following is a discussion of certain material U.S. federal income
tax consequences to certain U.S. persons whose Shares are sold
pursuant to the Offer. This discussion does not address all aspects
of U.S. federal income taxation that may be relevant to particular
holders of Shares in light of their specific investment or tax
circumstances. The tax consequences to any particular shareholder
may differ depending on that shareholder’s own circumstances
and tax position. The discussion is based on current provisions of
the Internal Revenue Code of 1986, as amended (the
“Code”), Treasury regulations issued thereunder, and
administrative and judicial interpretations thereof, all as in
effect as of the date hereof and all of which are subject to
change, possibly with retroactive effect. This discussion applies
only to holders who hold Shares as “capital assets”
within the meaning of section 1221 of the Code, and does not apply
to holders who acquired their Shares pursuant to the exercise of
employee stock options or otherwise as compensation. In addition,
this discussion does not apply to certain types of holders subject
to special tax (including withholding tax) rules including, but not
limited to, non-U.S. persons, insurance companies, tax-exempt
organizations, banks and other financial institutions, brokers or
dealers, traders in securities that elect to use a mark-to-market
method of accounting for their securities holdings or persons who
hold their Shares as a part of a straddle, hedge, conversion, or
other integrated investment or constructive sale transaction. The
tax consequences of the Offer to holders who hold their Shares
through a partnership or other pass-through entity generally will
depend upon such holder’s status for United States federal
income tax purposes and the activities of the
partnership.
Each
holder is encouraged to consult such holder’s tax advisor
regarding the specific U.S. federal, state, local and foreign
income and other tax consequences of the Offer in light of such
holder’s specific tax situation.
The
receipt of cash for Shares pursuant to the Offer will be a taxable
transaction for U.S. federal income tax purposes. In general, a
holder who receives cash in exchange for Shares pursuant to the
Offer will recognize gain or loss for U.S. federal income tax
purposes equal to the difference, if any, between the amount of
cash received and the holder’s adjusted tax basis in the
Shares exchanged. Gain or loss will be determined separately for
each block of Shares (i.e.,
Shares acquired at the same time and price) exchanged pursuant to
the Offer. Such gain or loss will generally be capital gain or loss
and will generally be long-term capital gain or loss if such Shares
have been held for more than one year at the time of disposition.
However, such gain or loss will generally be short-term capital
gain or loss if such Shares have been held for one year or less at
the time of disposition. In the case of a tendering individual
shareholder, long-term capital gains will generally be eligible for
reduced rates of taxation. Unlike long-term capital gains,
short-term capital gains of individuals are generally taxable at
the same rates as ordinary income. The deductibility of capital
losses is subject to limitations.
A
shareholder (other than certain exempt shareholders including,
among others, corporations) that receives cash for Shares pursuant
to the Offer generally will be subject to withholding taxes at a
rate equal to the fourth lowest rate applicable to ordinary income
of unmarried individuals (under current law, the withholding taxes
rate is 28%) unless the shareholder provides its TIN, certifies
under penalties of perjury that such TIN is correct (or properly
certifies that it is awaiting a TIN), certifies that it is not
subject to withholding taxes and otherwise complies with the
applicable requirements of the withholding taxes rules. If the
holder is an individual, the TIN is his or her social security
number. Withholding taxes is not an additional tax. Rather, the
amount of the withholding taxes can be credited against the U.S.
federal income tax liability of the person subject to the
withholding taxes, provided that the required information is given
to the IRS. If withholding taxes results in an overpayment of tax,
a refund can be obtained by the shareholder by filing a U.S.
federal income tax return. A shareholder that does not furnish a
required TIN or that does not otherwise establish a basis for an
exemption from withholding taxes may be subject to a penalty
imposed by the IRS. See “The Offer - Section 3 - Procedures
for Accepting the Offer and Tendering Shares.” Each
shareholder should complete and sign the Form W-9 included as part
of the Letter of Transmittal so as to provide the information and
certification necessary to avoid withholding taxes.
Section
6. Price Range of the Shares; Dividends.
There
is no established trading market for the Shares. The Company Offer
to Purchase states that any trades have been effected in
privately-negotiated transactions and that, for the years 2013
through 2015, the Company received on average less than five (5)
certificates per year delivered for transfer. The Company Offer to
Purchase also states that, in transactions on February 26,
2016 and March 1, 2016, Harriette Flanagin purchased 8,892
Shares for $0.26 per Share and that this is the last purchase of
the Company’s common stock that the Company is aware
of.
According to
Security Land & Development’s publicly available
documents, it has never paid a cash dividend and it does not
anticipate paying cash dividends in the foreseeable future. If we
acquire control of Security Land & Development, we do not have
a current intention to cause it to pay a cash
dividend.
Section
7. Effects of the Offer.
Exchange Act Registration. The Shares
are currently registered under the Exchange Act. Such registration
may be terminated upon application of Security Land &
Development to the SEC if the Shares are not held by 300 or more
holders of record. As set forth in the Company Offer to Purchase,
Security Land & Development had 595 shareholders of record
before the Company Tender Offer was commenced. Accordingly, if the
Shares tendered to the Company in the Company Tender Offer and/or
the Shares tendered to Purchasers in this Offer reduces the number
of shareholders of record below 300, Security Land &
Development would be eligible to, and has indicated that it would
expect to, terminate the registration of its common stock under the
Exchange Act.
Termination of the
registration of the Company’s common stock under the Exchange
Act would substantially reduce the information required to be
furnished by Security Land & Development to its shareholders
and to the SEC and would make certain of the provisions of the
Exchange Act, such as the short-swing profit recovery provisions of
Section 16(b), the requirement to furnish a proxy statement
pursuant to Section 14(a) in connection with a shareholders’
meeting and the related requirement to furnish an annual report to
shareholders and the requirements of Rule 13e-3 under the Exchange
Act with respect to “going private” transactions, no
longer applicable to the Shares. Furthermore,
“affiliates” of Security Land & Development and
persons holding “restricted securities” of Security
Land & Development may be deprived of, or delayed in, the
ability to dispose of such securities pursuant to Rule 144
promulgated under the Securities Act of 1933, as amended. If its
common stock is de-registered, it will likely become more difficult
for shareholders to obtain information about the
Company.
Voting Power of Purchasers. If
Purchasers acquire a significant number of the Shares sought in
this Offer, Purchasers could obtain a controlling voting interest
in matters subject to a shareholder vote, including, without
limitation, the election of directors, sale of substantially all of
the assets, mergers, the liquidation of the Company and other
matters requiring shareholder consent. Purchasers intend to
exercise their right to vote all Shares owned by them as they may
determine from time to time based on the
circumstances.
However, the
Company Offer to Purchase indicates that members of the Flanagin
family beneficially own 2,344,295 Shares representing about 44.7%
of the outstanding Shares. In addition, John C. Bell, Jr., a
director of the Company, beneficially owns 372,565 Shares
representing approximately 7.1% of the outstanding Shares. The
Company Offer to Purchase also indicates that the Flanagin family
and Mr. Bell have expressed their intention not to tender in the
Company Tender Offer the 2,580,360 Shares which they beneficially
own and which represent over 50% of the outstanding Shares. If the
Flanagin family and Mr. Bell choose not to tender their Shares to
us, then we will not acquire a majority of the Shares of the
Company, even if all other shareholders tendered their
Shares.
Section
8. Certain Information Concerning the
Company
Except
as otherwise expressly set forth in this Offer to Purchase, the
information concerning Security Land & Development contained in
this Offer to Purchase has been taken from, or based upon, publicly
available documents and records on file with the SEC and other
public sources and is qualified in its entirety by reference
thereto. None of Purchasers, the Information Agent or the
Depositary can take responsibility for the accuracy or completeness
of the information contained in such documents and records or for
any failure by Security Land & Development to disclose events
which may have occurred or may affect the significance or accuracy
of any such information but which are unknown to Purchasers, the
Information Agent or the Depositary. Purchasers, the Information
Agent and the Depositary have relied upon the accuracy of the
information included in such publicly available documents and
records and other public sources and have not made any independent
attempt to verify the accuracy of such information.
According to
Security Land & Development Quarterly Report on Form 10-Q for
the quarter ended December 31, 2016, Security Land &
Development’s headquarters are located at 2816 Washington
Road #103, Augusta, Georgia 30909 and its telephone number is
(706) 736-6334. According to the Security Land &
Development’s Annual Report on Form 10-K for the year ended
September 30, 2016, Security Land & Development, including its
subsidiaries, has developed two primary business activities: (i)
the acquisition of undeveloped land for investment purposes and
sale at a future date or development of the land and sale after
developed; and (ii) the acquisition or development of income
producing properties for investment purposes and income from
leasing activities.
Security Land &
Development is subject to the informational requirements of the
Exchange Act and, in accordance therewith, files periodic reports,
proxy statements and other information with the SEC relating to its
business, financial condition and other matters. Security Land
& Development is required to disclose in such proxy statements
certain information, as of particular dates, concerning Security
Land & Development’s directors and officers, their
remuneration, stock options granted to them, the principal holders
of Security Land & Development’s securities and any
material interest of such persons in transactions with Security
Land & Development. Such reports, proxy statements and other
information may be read and copied at the public reference
facilities maintained by the SEC at 100 F Street, N.E., Washington,
D.C. 20549. Copies of such material can also be obtained free of
charge at the website maintained by the SEC at http://www.sec.gov.
Section
9. Certain Information Concerning Purchasers and Their
Affiliates.
Purchasers and Affiliates. Purchasers
are AB Value Partners, LP, a Delaware limited partnership
(“ABVP”), and AB Opportunity Fund, LLC, a Delaware
limited liability company (“ABOF”).
ABVP
and ABOF are investment funds that are managed by AB Value
Management, LLC, a New Jersey limited liability company
(“ABVM”). ABVM is the general partner of ABVP. ABVM is
the investment adviser of ABOF with authority to make all
investments decisions including acquisition, disposition and voting
of securities.
Andrew
Berger is the executive officer and managing member of ABVM. ABVM
and ABVP were formed in 2008, and each entity began operations in
2011. ABOF was formed and began operations in 2011. Mr. Berger
is a U.S. citizen.
The
business address for each of ABVP, ABOF, ABVM and Mr. Berger is
84 Elm Street, Westfield, New Jersey 07090. The telephone
number for each is (732) 701-7008.
Beneficial Ownership of Shares. As of
February 10, 2017, there were 5,243,107 Shares issued and
outstanding. We are offering to purchase in the Offer all
outstanding Shares (other than Shares that we currently own).
Andrew Berger owns 50,000 Shares representing approximately less
than 1% of the outstanding Shares. These are the only Shares known
by us to be beneficially owned as of the date of this Offer to
Purchase by us or our affiliates.
Purchases of Shares. There have been no
purchases of Shares by Purchaser or their affiliates during the
past sixty (60) days.
Additional Information. Except as set
forth in this Offer to Purchase, neither Purchasers nor, to the
knowledge of Purchasers, ACVM or Mr. Berger, or any affiliate of
Purchasers, has had any business relationship or transaction with
Security Land & Development or any of its executive officers,
directors or affiliates that is required to be reported under the
rules and regulations of the SEC applicable to the Offer. Except as
set forth in this Offer to Purchase, there have been no
negotiations, transactions or material contracts between Purchasers
or its affiliates, on the one hand, and Security Land &
Development or its affiliates, on the other hand, concerning a
merger, consolidation, acquisition, tender offer or other
acquisition of securities, an election of directors or a sale or
other transfer of a material amount of assets. None of Purchasers,
ABVM or Mr. Berger has been, during the past five (5) years: (i)
convicted in a criminal proceeding (excluding traffic violations or
similar misdemeanors); or (ii) a party to any judicial or
administrative proceeding (except for matters that were dismissed
without sanction or settlement) that resulted in a judgment, decree
or final order enjoining the person from future violations of, or
prohibiting activities subject to, federal or state securities
laws, or a finding of any violation of federal or state securities
laws. There are no present or proposed material agreements,
arrangements, understandings or relationships between Purchasers or
any of their respective executive officers, directors, controlling
persons or subsidiaries, on the one hand, and Security Land &
Development or any of its affiliates, executive officers,
directors, controlling persons or subsidiaries, on the other
hand.
Section
10. Background of the Offer; Contacts with the
Company.
During
March 2017, prior to Purchasers determining to make this Offer to
Purchase, an employee of ABVM spoke with a director of Security
Land & Development to inquire if the director had any interest
in selling his Shares to Purchasers. The director indicated that he
was not interested in selling his Shares to
Purchasers.
Section
11. Purpose of the Offer; Plans for the
Company.
We are
making the Offer for investment purposes with a view towards making
a profit. Our intent is to acquire Shares that we hope might
ultimately increase in value. The Offer represents a way for us to
acquire Shares given the lack of a trading market for the Shares.
In addition, the Offer allows us to offer all of the shareholders
an opportunity to sell all or part of their investment if they
choose to do so at this time.
While
Purchasers intend to seek ways to maximize the value of the Shares
and Security Land & Development’s assets, Purchasers do
not have any present intention to take any action in connection
with any extraordinary transaction involving the Company or control
of the Company. However Purchasers reserve the right to take such
actions in the future.
If the
Offer is consummated, we may from time to time consider additional
purchases of Shares pursuant to open-market purchases, private
transactions, tender offers or otherwise, subject to applicable
law. Future purchases may be on the same terms or on terms that are
more or less favorable to Security Land & Development’s
shareholders than the terms of the Offer.
In
addition, following consummation of the Offer, we may also
determine to dispose of the Shares, in whole or in part, at any
time and from time to time, subject to applicable laws. We may also
decide to change our intentions with respect to the purposes and
plans described in this Section 11. Any such decision would be
based on our assessment of a number of different factors,
including, without limitation, the business, prospects and affairs
of Security Land & Development, the market for the Shares, the
condition of the securities markets, general economic and industry
conditions and other opportunities available to us.
Section
12. Source and Amount of Funds.
The
Offer is not conditioned upon any financing arrangements, and we do
not need the consent or approval of any investor or other third
party to use our cash and cash equivalents on hand to pay the
purchase price for the Shares. We estimate that the total amount of
funds that we will require to consummate the Offer, including fees
and expenses, is approximately $8,203,178, assuming we purchase all
of the outstanding Shares pursuant to the Offer. We possess all
necessary funds to consummate the Offer from cash and cash equivalents on hand.
It is anticipated that, if the Offer is consummated, then: (i)
approximately 50% of the tendered Shares will be purchased by ABVP
and approximately 50% of the tendered Shares will be purchased by
ABOF, up to a total of 636,942 Shares; and (ii) any tendered Shares
in excess of 636,942 Shares will be purchased by ABOF.
Section
13. Dividends and Distributions.
If, on
or after the date of this Offer to Purchase, Security Land &
Development should, during the pendency of the Offer, (i) split,
combine or otherwise change the Shares or its capitalization, (ii)
acquire Shares or otherwise cause a reduction in the number of
Shares or other securities, (iii) issue or sell additional Shares,
any Shares of any other class of capital stock, other voting
securities or any securities convertible into or exchangeable for,
or rights, warrants or options, conditional or otherwise, to
acquire, any of the foregoing, or (iv) disclose that it has taken
such action, then, without prejudice to Purchasers’ rights
under “The Offer - Section 14 - Conditions to
Offer,” Purchasers, in their sole discretion, may make such
adjustments in the Offer Price and other terms of the Offer as it
deems appropriate to reflect such split, combination or other
change, including, without limitation, the number or type of
securities offered to be purchased. In the event that Purchasers
increase or decrease the Offer Price or the percentage of Shares
subject to the Offer, the minimum period during which the Offer
will remain open following the date that notice of such increase or
decrease is first published or sent or given to security holders
will be ten (10) business days, in compliance with Rule 14e-1(b) of
the Exchange Act.
If, on
or after the date of this Offer to Purchase, Security Land &
Development declares or pays any cash dividend on the Shares or
other distribution on the Shares, or issues 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
shareholders of record on a date prior to the transfer of the
Shares purchased pursuant to the Offer to Purchasers or their
nominee or transferee on Security Land & Development’s
stock transfer records, then, subject to the provisions of
“The Offer - Section 14 - Conditions to Offer”:
(i) the Offer Price may, in the sole discretion of Purchasers, be
reduced by the amount of any such cash dividends or cash
distributions; and (ii) the whole of any such non-cash dividend,
distribution or issuance to be received by the tendering
shareholders will (a) be received and held by the tendering
shareholders for the account of Purchasers and will be required to
be promptly remitted and transferred by each tendering shareholder
to Purchasers, accompanied by appropriate documentation of
transfer, or (b) at the direction of Purchasers, be exercised for
the benefit of Purchasers, in which case the proceeds of such
exercise will promptly be remitted to Purchasers. Pending such
remittance and subject to applicable law, Purchasers will be
entitled to all rights and privileges as owner of any such non-cash
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 Purchasers in their sole
discretion.
Section
14. Conditions to the Offer.
Notwithstanding any
other provisions of the Offer, and in addition to (and not in
limitation of) Purchasers’ right to extend and amend the
Offer at any time, in their sole discretion, 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 Purchasers’ obligation to
pay for or return tendered Shares promptly after termination or
withdrawal of the Offer), pay for, and may delay the acceptance for
payment of and accordingly the payment for, any tendered Shares,
and may terminate the Offer, if, in the reasonable judgment of
Purchasers, on or prior to the Expiration Date any of the following
events shall occur:
(i) there has been or
will be any action taken, or any statute, rule, regulation,
legislation, interpretation, judgment, order or injunction enacted,
enforced, promulgated, amended, issued or deemed applicable to the
Offer, Security Land & Development, Purchasers or any of their
affiliates, by any legislative body, court, government or
governmental, administrative or regulatory authority or agency,
domestic or foreign that, in the reasonable judgment of Purchasers,
could be expected to, directly or indirectly:
●
make illegal or
otherwise prohibit or materially delay consummation of the Offer or
seek to obtain material damages or make materially more costly the
making of the Offer,
●
prohibit or
materially limit the ownership or operation by Purchasers or any of
their affiliates of all or any material portion of the business or
assets of Security Land & Development or compel Purchasers or
any of their affiliates to dispose of or hold separately all or any
material portion of the business or assets of Purchasers or any of
their affiliates or of Security Land & Development or seek to
impose any material limitation on the ability of Purchasers or any
of their affiliates or of Security Land & Development to
conduct its business or own such assets,
●
impose limitations
on the ability of Purchasers or any of their affiliates effectively
to acquire, hold or exercise full rights of ownership of the
Shares, including, without limitation, the right to vote any Shares
acquired or owned by Purchasers or any of their
affiliates,
●
require divestiture
by Purchasers or any of their affiliates of any
Shares,
●
result in a
material adverse effect on Purchasers, any of their affiliates or
Security Land & Development or the value of the Shares,
or
●
result in a
material diminution in the benefits expected to be derived by
Purchasers or any of their affiliates as a result of the Offer;
or
(ii) there
has been or will be instituted or pending any action or proceeding
by any governmental entity or third party seeking, or that would
reasonably be expected to result in, any of the consequences
referred to in the clauses of paragraph (i) above; or
(iii) Purchasers
shall become aware of any change, circumstance, event or effect
that has or will have occurred (or any development that has or will
have occurred involving prospective changes) that is materially
adverse to the business, operations, value of its assets, financial
condition or results of operations of Security Land &
Development or could reasonably be expected to have, in the
reasonable discretion of Purchasers, a material adverse effect on
Security Land & Development or the value of the Shares or,
assuming consummation of the Offer, on Purchasers or any of their
affiliates; or
(iv) there
has or will have occurred, and continues to exist:
●
any general
suspension of, or limitation on prices for, trading in securities
on any national securities exchange, the over-the-counter market,
or the over-the-counter market on the Pink Sheets in the United
States,
●
any extraordinary
or material adverse change in the price of the Shares or the
financial markets or major stock exchange indices in the United
States, or any change in the general political, market, economic or
financial conditions in the United States or abroad that could have
a material adverse effect on the business, financial condition or
results of operations or prospects of Security Land &
Development,
●
a change in the
general financial, bank or capital market conditions which
materially and adversely affects the ability of financial
institutions in the United States to extend credit or syndicate
loans,
●
a declaration of a
banking moratorium or any suspension of payments in respect of
banks in the United States (whether or not mandatory),
●
a commencement of a
war, armed hostilities, terrorist attack or other national or
international crisis involving the United States or a material
limitation (whether or not mandatory) by any governmental entity on
the extension of credit by banks or other lending institutions,
or
●
in the case of any
of the foregoing existing at the time of the commencement of the
Offer, a material escalation or the worsening thereof;
or
(v) except as and to
the extent publicly disclosed in a report filed by Security Land
& Development with the Commission prior to the date of this
Offer to Purchase, Security Land & Development shall have,
directly or indirectly:
●
split, combined or
otherwise changed, or authorized or proposed a split, combination
or other change of, the Shares or its capitalization,
●
acquired or
otherwise caused a reduction in the number of, or authorized or
proposed the acquisition or other reduction in the number of,
outstanding Shares or other securities,
●
issued, distributed
or sold, or authorized, proposed or announced the issuance,
distribution or sale of, additional Shares, Shares of any other
class of capital stock, other voting securities or any securities
convertible into or exchangeable for, or rights, warrants or
options to acquire, any of the foregoing,
●
declared or paid,
or proposed to declare or pay, any dividend or other distribution,
whether payable in cash, securities or other property, on or with
respect to any Shares of Security Land & Development’s
capital stock,
●
altered or proposed
to alter any material term of any outstanding
security,
●
issued, distributed
or sold, or authorized or proposed the issuance, distribution or
sale of any debt securities or any securities convertible into or
exchangeable for debt securities or any rights, warrants or options
entitling the holder thereof to purchase or otherwise acquire any
debt securities or incurred, or authorized or proposed the
incurrence of, any debt,
●
authorized,
recommended, proposed, entered into or announced its intention to
enter into an agreement with respect to, or to cause, any merger,
consolidation, liquidation, dissolution, business combination,
acquisition of assets or securities, disposition of assets, release
or relinquishment of any material contractual or other right of
Security Land & Development or any comparable
event,
●
authorized,
recommended, proposed or entered into, or announced its intention
to authorize, recommend, propose or enter into, any agreement or
arrangement with any person or group that, in the reasonable
judgment of Purchasers, could adversely affect either the value of
Security Land & Development or the value of the Shares to
Purchasers or their affiliates, or
●
amended or
proposed, adopted or authorized any amendment to the Articles of
Incorporation or By-Laws of Security Land & Development;
or
(vi) Purchasers
shall become aware:
●
that any material
contractual right of Security Land & Development shall be
impaired or otherwise adversely affected or that any material
amount of indebtedness of Security Land & Development shall
become accelerated or otherwise become due or become subject to
acceleration prior to its stated due date, in any case, with or
without notice or the lapse of time or both, as a result of or in
connection with the Offer,
●
of any covenant,
term or condition in any of the instruments or agreements of
Security Land & Development that, in the reasonable judgment of
Purchasers, is or may be (whether considered alone or in the
aggregate with other such covenants, terms or conditions)
materially adverse to either the value of Security Land &
Development or the value of the Shares to Purchasers or any
affiliate of Purchasers or the consummation by Purchasers of the
Offer (including, without limitation, any event of default that may
occur as a result of or in connection with the Offer or any
non-competition, exclusivity, co-promotion or marketing or other
arrangement), or
●
that any report,
document, instrument, financial statement or schedule filed with
the Commission contained, when filed, an untrue statement of a
material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements made
therein, in light of the circumstances under which they were made,
not misleading; or
(vii) any
material approval, permit, authorization, favorable review or
consent of any governmental entity (including those described or
referred to in this Section 14) shall not have been obtained on
terms satisfactory to Purchasers, in their reasonable discretion;
or
(viii) Security
Land & Development has taken or authorized any action that, in
the reasonable judgment of Purchasers, could result in a material
adverse effect on, or a material diminution in, the value of the
Shares or the right to vote the Shares, including, but not limited
to, the adoption of any anti-takeover measures; or
(ix) (a)
Purchasers or any of their affiliates shall have entered into a
definitive agreement or announced an agreement in principle with
respect to the purchase of any material portion of the securities
or assets of Security Land & Development, or (b) Purchasers or
any of their affiliates and Security Land & Development shall
have agreed that Purchasers shall amend or terminate the Offer or
postpone the payment for Shares pursuant thereto;
which,
in the reasonable judgment of Purchasers, in any such case and
regardless of the circumstances (excluding any action or inaction
by Purchasers or any affiliate of Purchasers, other than as
pertaining to conditions which, by their terms, involve such action
or inaction) giving rise to any such condition, makes it
inadvisable to proceed with the Offer and/or with such acceptance
for payment or payment.
The
foregoing conditions are for the sole benefit of Purchasers and may
be asserted by Purchasers regardless of the circumstances
(excluding any action or inaction by Purchasers or any affiliate of
Purchasers, other than as pertaining to conditions which, by their
terms, involve such action or inaction) giving rise to any such
condition and may be waived by Purchasers in whole or in part at
any time and from time to time, in each case, up until the
expiration of the Offer and in the exercise of the sole discretion
of Purchasers. The failure by Purchasers at any time to exercise
any of the foregoing rights shall not be deemed a waiver of any
such right and each such right shall be deemed an ongoing right
that may be asserted at any time and from time to time, up until
the expiration of the Offer. Subject to applicable rules and
regulations of the Commission and applicable law, any reasonable
determination by Purchasers concerning any condition described in
this Section 14 shall be final and binding on all parties, provided
that determinations regarding such conditions may be ultimately
resolved by a court of competent jurisdiction. A public
announcement may be made of a material change in, or waiver of,
such conditions and the Offer may, in certain circumstances, be
extended in connection with any such change or waiver.
Should
the Offer be terminated pursuant to the foregoing provisions, all
tendered Shares not theretofore accepted for payment shall promptly
be returned to the tendering shareholders.
Section
15. Certain Legal Matters; Required Regulatory
Approvals.
Except
as set forth in this Offer to Purchase, based on its review of
publicly available filings by Security Land & Development with
the SEC regarding Security Land & Development, Purchasers are
not aware of any licenses or regulatory permits that would be
material to the business of Security Land & Development, taken
as a whole, and that might be adversely affected by
Purchasers’ acquisition of Shares as contemplated herein, or
any filings, approvals or other actions by or with any domestic,
foreign or other governmental authority or administrative or
regulatory agency that would be required prior to the acquisition
of Shares by Purchasers pursuant to the Offer as contemplated
herein. Should any such approval or other action be required, there
is no assurance that any such additional approval or action, if
needed, would be obtained without substantial conditions or that
adverse consequences might not result to Security Land &
Development’s business in order to obtain such approval or
action or in the event that such approvals were not obtained or
such actions were not taken. Purchasers do not presently intend,
however, to delay the purchase of Shares tendered pursuant to the
Offer pending the receipt of any such approval or the taking of any
such action (subject to Purchasers’ right to delay or decline
to purchase Shares if any of the conditions in the Introduction
shall not have been satisfied or any of the events in “The
Offer - Section 14 - Conditions to Offer” shall have
occurred). Purchasers’ obligation to purchase and pay for
Shares is subject to certain conditions which may be applicable
under such circumstances. See “The Offer - Section 14 -
Conditions to Offer.”
Section
16. Certain Fees and Expenses.
We have
retained Direct Transfer LLC to serve as our Depositary and
InvestorCom, Inc. to serve as our Information Agent. We will pay
the Depositary and the Information Agent reasonable and customary
compensation for its services in connection with the Offer and
reimburse each of them for reasonable out-of-pocket expenses, and
will indemnify each of them against specified liabilities and
expenses in connection with its services, including specified
liabilities under the federal securities laws.
Except
as set forth above, we will not pay any fees or commissions to any
broker or dealer or other person or entity in connection with the
solicitation of tenders of Shares pursuant to the Offer. We will,
upon request, reimburse brokers, dealers, commercial banks and
trust companies for customary mailing and handling expenses
incurred by them in forwarding materials relating to the Offer to
their customers.
Section
17. Miscellaneous.
The
Offer is being made solely by this Offer to Purchase and the
related Letter of Transmittal and is being made to all holders of
the Shares (excluding Shares beneficially owned by Purchasers).
This 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 this Offer or the acceptance thereof would not be in
compliance with the securities or other laws of such jurisdiction.
Purchasers are not aware of any jurisdiction where the making of
the Offer is prohibited by any administrative or judicial action
pursuant to any valid state statute. If Purchasers become aware of
any valid state statute prohibiting the making of the Offer or the
acceptance of the Shares pursuant thereto, Purchasers will make a
good faith effort to comply with such state statute. If, after such
good faith effort Purchasers cannot comply with any such state
statute, the Offer will not be made to (nor will tenders be
accepted from or on behalf of) the holders of Shares in such state.
In those jurisdictions where the applicable laws require that the
Offer be made by a licensed broker or dealer, the Offer shall be
deemed to be made on behalf of 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 MAKE ANY
REPRESENTATION ON BEHALF OF ABVP AND ABOF NOT CONTAINED IN THIS
OFFER TO PURCHASE OR IN THE LETTER OF TRANSMITTAL, AND IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED.
Facsimile copies of
the Letter of Transmittal, properly completed and duly executed,
will be accepted. The Letter of Transmittal, certificates for
Shares and any other required documents should be sent or delivered
by each shareholder of Security Land & Development or his or
her bank, broker, dealer, trust company or other nominee to the
Depositary as follows:
The Depositary for the Offer is:
Direct
Transfer LLC
By Hand, Mail, and Overnight Courier:
Direct
Transfer LLC
Attn:
Corporate Actions
500
Permiter Park Drive, Suite D
Morrisville,
NC 27560
Delivery
of the Letter of Transmittal to an address other than as set forth
above will not constitute a valid delivery to the
Depositary.
Questions and
requests for assistance may be directed to the Information Agent at
its address and telephone number set forth below. Requests for
additional copies of this Offer to Purchase, the Letter of
Transmittal or the Notice of Guaranteed Delivery should be directed
to the Information Agent.
The Information Agent for the Offer is:
InvestorCom
65
Locust Avenue, Third Floor
New
Canaan, CT 06840
Phone
(203) 972-9300
Toll
Free (877) 972-0090
You may
also contact your bank, broker, dealer, trust company or other
nominee for assistance concerning the Offer.
