You have requested that J.L. Pierson & Co. LLC ["JLP&Co."] provide you with its
opinion as to the fairness, from a financial point of view, of the consideration paid by -----------, Inc. for substantially all the assets of ABC pursuant to an Asset Purchase
Agreement [thereafter "the Agreement"] dated as of ---------, 199- [thereafter "the
closing date" or "the valuation date"] between ABC, Dollar Capital Lending Corporation and ------,Inc. ABC was prior to the closing date engaged in the business of manufacturing
and selling ----------------------- generally described as ----- [thereafter "the
Under the Agreement, --------, Inc. purchased the ABC assets from Dollar Capital Lending
Corporation as the latter, being the lender secured by substantially all the
assets of ABC, availed itself of its rights under various credit documents and
simultaneously foreclosed on the assets. The determination of the final asset purchase
price is subject to post-closing calculations of asset values as defined in the
Agreement, and a range of possible prices has been calculated.
In arriving at the opinion set forth below, JLP&Co. has completed the following
1 Reviewed the financial statements of ABC for the several years ended
December 31, 199-, as well as the approximately -- months period ended on the
closing date and various closing documents, accounting and other records as of
the closing date.
2 Reviewed certain information, including financial forecasts, relating to the
business, earnings, cash flows and assets of the Business, furnished to us by or
on behalf of ABC.
3. Conducted discussions with members of the management of ABC and ---------, Inc.
concerning the business and prospects of the Business; discussions were
also conducted with other industry participants.
Compared the results of operations of the Business with that of certain
companies which we deemed relevant.
Conducted a financial review of the financial condition of ABC with respect to its
liquidity and capital position as of the closing date.
Compared the financial terms of the purchase with the financial terms of certain
other mergers and acquisitions which we deemed relevant.
Review the Asset Purchase Agreement and ancillary agreements thereto.
8. Performed such other analyses and reviewed and analyzed such other
information as JLP&Co. deemed appropriate.
In rendering this opinion, JLP&Co. did not assume responsibility for
independently verifying, and did not independently verify, any financial or other
information concerning ABC, or the publicly available information regarding other
JLP&Co. has assumed that all such financial and other information is accurate
and complete. JLP&Co. has further relied on the assurances of ABC management that
they are not aware of any facts that would make such financial or other information
inaccurate, incomplete or misleading. With respect to forecasts and financial
projections of ABC provided by management, JLP&Co. has assumed, for the purpose
of this opinion, that the forecasts have been reasonably prepared on bases reflecting
the best available estimates and judgements of management at the time of their
preparation as to the future performance of the Business. JLP&Co. has further
assumed, with your consent, that any material liabilities (contingent or otherwise, known
or unknown) of the Business are as set forth in the financial statements.
We have not been engaged to make, nor have we made, an independent
evaluation or appraisal of the assets or liabilities (contingent or otherwise) of the
Business nor have we been furnished with any such evaluation or appraisals except for
the fixed asset appraisal by National Valuations, Inc. Our opinion is based upon
regulatory, economic, market and monetary conditions existing on the date hereof.
This opinion has been prepared for your information in connection with the Asset
Purchase Agreement and shall not be reproduced, summarized, described or referred
to or provided to any person or otherwise made public without the prior consent of
JLP&Co. It is understood, however, that the corporate shell of ABC will soon file for
protection under the bankruptcy laws and that you may communicate this opinion to the
relevant creditors' committee.
On the basis of, and subject to the foregoing, we are of the opinion that the
consideration paid by -----------, Inc. is fair from a financial point of view.
Yours very truly,
J.L. PIERSON & CO. LLC