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Stock Exchange transactions prior to commencement of the Exchange Offer resulted in National owning approximately 75% of outstanding Holding Corporation shares.

Thereafter by Prospectus dated January 24, 1969, National renewed its Exchange Offer to the remaining Holding Corporation shareholders on principally the same basis as the first offer; namely, $50 principal amount of National's 4% Debenture, plus 1 1/2 Warrants in exchange for each Holding Corporation share properly submitted. Upon expiration of the renewed Exchange Offer on February 11, 1969, National owned approximately 93% of the outstanding Holding Corporation shares.

Subsequently, on February 25, 1969, Holding Corporation was merged into National pursuant to Section 253 of the Delaware General Corporation Law. Section 253 provides for the merger of a 90% or more owned subsidiary into its parent by the filing of a certificate of ownership. The merger terms are fixed by the parent's Board of Directors.

On March 5, 1969, National, by letter, advised each remaining Holding Corporation shareholder of the merger, and that under its terms, National would cxchange 3 1/2 Warrants for each outstanding Holding Corporation share held by persons other than National. Holding Corporation shareholders were also advised that if they did not want to exchange their shares for Warrants, they had appraisal rights provided a written demand be made for the value of their shares within 20 days after the mailing of said March 5 notice. A letter was thereafter mailed to all holders that demanded the cash value of their shares wherein National offered to pay such holders $43.08 for each such share. of the 381,073 shares of Holding Corporation not held by National on February 25, 1969, the holders of 193,798 shares submitted them in exchange for Warrants (as of June 24, 1969) and the holders of 38,887 shares demanded payment of the cash value of their shares. of those holders who demanded the cash value, 9,748 shares accepted our cash offer of $43.08 per share.

The foregoing recitation of the chronology of events in connection with our acquisition of Holding Corporation establishes, beyond doubt, that every opportunity was afforded all Holding Corporation shareholders to accept the pre-merger offer. Since the merger, we have scrupulously adhered to the requirements of the law which are designed to assure fair play for all remaining Holding Corporation shareholders. Copies of correspondence with Mr. Robb are enclosed for your information.

If you have any further questions with respect to this matter, please do not hesitate to communicate with me.

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Reference is made to my September 12, 1969 letter and to your telephonic request for additional information regarding the Delaware Proceeding.

On July 10, 1969, the attorneys for Petitioner, Hare & Co., a partnership, filed a "Petition for Stock Appraisal" against Respondent, National General Corporation in the Court of Chancery of the State of Delaware in and for New Castle County (Civil Action No. 3089) pursuant to Sections 253 and 262 of the Delaware General Corporation Laws. The summons and petition was scried upon National General Corporation ("National") on July 11, 1969.

After National filed its answer, the Court entered an order, which among other things, (i) set a hearing on September 15, 1969, (ii) directed those persons claiming to be entitled to the valuation and the payment of their stock to file a notice of appearance and claim, and (iii) directed the clerk to mail notice to those shareholders that made demand for the cash value of their shares. At the time National filed its answer, it also submitted to the

Court a list of all Holding Corporation shareholders that demanded the cash value of their shares (which shareholder had not accepted our $43.08 per share cash offer or accepted warrants). The matter has been set for further hearing on October 20, 1969, which hearing shall be on notice to all shareholders that demanded the cash value of their shares.

Enclosed for your information are Xerox copies of Sections 253 and 262 of the Delaware Corporation Law. If you have any further questions in this matter, please do not hesitate to communicate with the undersigned.

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This will transmit the additional information you requested at our meeting of September 18 concerning the position of the stockholders of Great American Holding Corporation who did not avail themselves of National General's tender offer.

Enclosed is a copy of a letter to me from National General, dated September 14, which gives the status of the action pending in the Delaware courts involving the exercise of stockholder appraisal rights. Approximately 27,000 shares of stock are involved in that action, of which the petitioner, Hare & Co., holds about 20,000 shares.

In our discussion, you inquired whether the approximately 7.39,000 shares of Holding Corporation stock still outstanding, the owners of which did not either accept the tender offers or seek to exercise appraisal rights, might be considered unusually large.

The approximately 233,000 shares still outstanding is to be compared with a total of approximately 6,100,000 shares of Great American Holding Corporation stock. Thus, the total still

outstanding represents no more than about 4 percent of the total

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