
<PAGE>   1
 
                           OFFER TO PURCHASE FOR CASH
                     ALL OUTSTANDING SHARES OF COMMON STOCK
 
                                       OF
 
                                  AMBAR, INC.
                                       AT
 
                              $18.00 NET PER SHARE
                                       BY
 
                             AI ACQUISITIONS CORP.,
                            A CORPORATION FORMED BY
 
                                THE BEACON GROUP
 
         THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
  NEW YORK CITY TIME, ON MONDAY, AUGUST 5, 1996, UNLESS THE OFFER IS EXTENDED.
 
     THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER A NUMBER OF
SHARES THAT REPRESENTS NOT LESS THAN 90% OF THE OUTSTANDING SHARES OF AMBAR,
INC. (THE "COMPANY") ON A FULLY DILUTED BASIS. THE OFFER IS ALSO SUBJECT TO
OTHER TERMS AND CONDITIONS CONTAINED IN THIS OFFER TO PURCHASE. SEE SECTIONS 1,
14 AND 15.
 
     THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED THE OFFER AND THE MERGER
(AS DEFINED BELOW) AND DETERMINED, BASED UPON, AMONG OTHER THINGS, THE UNANIMOUS
RECOMMENDATION OF A DULY APPOINTED INDEPENDENT COMMITTEE OF THE BOARD, THAT THE
TERMS OF THE OFFER AND THE MERGER ARE FAIR TO, AND IN THE BEST INTERESTS OF, THE
COMPANY AND ITS STOCKHOLDERS, AND RECOMMENDS THAT HOLDERS OF SHARES OF THE
COMPANY'S COMMON STOCK ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT TO THE
OFFER.
 
                                   IMPORTANT
 
     Any stockholder desiring to tender all or any portion of such stockholder's
Shares should either (a) complete and sign the enclosed Letter of Transmittal
(or a facsimile copy thereof) in accordance with the instructions in the Letter
of Transmittal and mail or deliver it together with the certificate(s)
representing tendered Shares, and any other required documents, to the
Depositary or tender such Shares pursuant to the procedures for book-entry
transfer set forth in Section 3 or (b) request such stockholder's broker,
dealer, commercial bank, trust company or other nominee to effect the
transaction for such stockholder. A stockholder whose Shares are registered in
the name of a broker, dealer, commercial bank, trust company or other nominee
must contact such broker, dealer, commercial bank, trust company or other
nominee if such stockholder desires to tender such Shares.
 
     Any stockholder who desires to tender Shares and whose certificates
representing such Shares are not immediately available or who cannot comply with
the procedures for book-entry transfer on a timely basis may tender such Shares
by following the procedures for guaranteed delivery set forth in Section 3.
 
     Questions and requests for assistance may be directed to the Information
Agent at its address and telephone number set forth on the back cover of this
Offer to Purchase. Additional copies of this Offer to Purchase, the Letter of
Transmittal and other tender offer materials may be obtained from the
Information Agent or from brokers, dealers, commercial banks and trust
companies.
 
July 9, 1996
<PAGE>   2
 
                               TABLE OF CONTENTS
 
<TABLE>
<CAPTION>
                                                                                          PAGE
                                                                                          ----
<S>   <C>                                                                                 <C>
INTRODUCTION..........................................................................      1
THE TENDER OFFER
1.    Terms of the Offer..............................................................      3
2.    Acceptance for Payment and Payment for Shares...................................      4
3.    Procedures for Tendering Shares.................................................      5
4.    Withdrawal Rights...............................................................      7
5.    Certain Federal Income Tax Consequences.........................................      8
6.    Price Range of Shares; Dividends................................................      8
7.    Certain Information Concerning the Company......................................      9
8.    Certain Information Concerning The Beacon Group,
      Parent and the Purchaser........................................................     11
9.    Source and Amount of Funds......................................................     11
10.   Background of the Offer; Past Contacts, Transactions or
      Negotiations with the Company...................................................     12
11.   Purpose of the Offer; the Merger; the Merger Agreement; Stockholder Agreements;
      Employment Agreement; Plans for the Company.....................................     13
12.   Effect of the Offer on the Market for Shares; Stock Exchange Listing;
      Registration Under the Exchange Act.............................................     22
13.   Dividends and Distributions.....................................................     23
14.   Conditions to the Offer.........................................................     24
15.   Certain Legal Matters; Required Regulatory Approvals............................     25
16.   Fees and Expenses...............................................................     27
17.   Miscellaneous...................................................................     27
Schedule I     Certain Information Concerning The Beacon Group,
                Parent and the Purchaser..............................................    I-1
</TABLE>
 
                                        i
<PAGE>   3
 
To the Holders of Shares of Common Stock of
AMBAR, Inc.:
 
                                  INTRODUCTION
 
     AI Acquisitions Corp., a Delaware corporation (the "Purchaser") and a
wholly owned subsidiary of AI Partners L.P., a Delaware limited partnership
("Parent"), hereby offers to purchase all outstanding shares of common stock,
par value $0.01 per share (the "Shares"), of AMBAR, Inc., a Delaware corporation
(the "Company"), at $18.00 per Share, net to the seller in cash, without
interest thereon, upon the terms and subject to the conditions set forth in this
Offer to Purchase, the Merger Agreement (as defined below) and in the related
Letter of Transmittal (which, as amended from time to time, together with the
Offer to Purchase constitute the "Offer"). The Purchaser and Parent have been
organized by The Beacon Group, a New York general partnership, for purposes of
the transactions described herein.
 
     Tendering stockholders will not be obligated to pay brokerage commissions
or, except as set forth in Instruction 6 of the Letter of Transmittal, transfer
taxes on the purchase of Shares by the Purchaser pursuant to the Offer. However,
any tendering stockholder or other payee who fails to complete and sign the
Substitute Form W-9 that is included in the Letter of Transmittal may be subject
to a required backup federal income tax withholding of 31% of the gross proceeds
payable to such stockholder or other payee pursuant to the Offer. See Section 3.
The Purchaser will pay all charges and expenses of Georgeson & Company Inc.,
which is acting as the Information Agent (the "Information Agent"), and The
First National Bank of Boston, which is acting as the Depositary (the
"Depositary"), incurred in connection with the Offer. See Section 16.
 
     THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER A NUMBER OF
SHARES THAT REPRESENTS NOT LESS THAN 90% OF THE OUTSTANDING SHARES ON A FULLY
DILUTED BASIS (THE "MINIMUM SHARE CONDITION"). THE OFFER IS ALSO SUBJECT TO
OTHER TERMS AND CONDITIONS CONTAINED IN THIS OFFER TO PURCHASE. SEE SECTIONS 1,
14 AND 15.
 
     THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED THE OFFER AND THE MERGER
(AS DEFINED BELOW) AND DETERMINED, BASED UPON, AMONG OTHER THINGS, THE UNANIMOUS
RECOMMENDATION OF A DULY APPOINTED INDEPENDENT COMMITTEE OF THE BOARD (THE
"INDEPENDENT COMMITTEE"), THAT THE TERMS OF THE OFFER AND THE MERGER ARE FAIR
TO, AND IN THE BEST INTERESTS OF, THE COMPANY AND ITS STOCKHOLDERS AND
RECOMMENDS THAT HOLDERS OF SHARES ACCEPT THE OFFER AND TENDER THEIR SHARES
PURSUANT TO THE OFFER.
 
     THE INDEPENDENT COMMITTEE OF THE BOARD OF DIRECTORS OF THE COMPANY HAS
RECEIVED THE OPINION OF RAYMOND JAMES & ASSOCIATES, INC. ("RAYMOND JAMES"), THE
COMPANY'S FINANCIAL ADVISOR, THAT THE CONSIDERATION TO BE RECEIVED BY THE
COMPANY'S STOCKHOLDERS PURSUANT TO THE OFFER AND THE MERGER IS FAIR TO SUCH
HOLDERS FROM A FINANCIAL POINT OF VIEW.
 
     The Offer is being made pursuant to the Agreement and Plan of Merger, dated
as of July 1, 1996 (the "Merger Agreement"), among the Company, Parent and the
Purchaser. The Merger Agreement provides, among other things, that as soon as
practicable following the satisfaction or waiver, if permissible, of the
conditions set forth in the Merger Agreement and described herein, the Purchaser
will be merged with and into the Company (the "Merger"), with the result that
all of the outstanding common stock of the Company will be beneficially owned by
Parent. At the Effective Time (as defined in the Merger Agreement) of the
Merger, each Share issued and outstanding immediately prior to the Effective
Time (other than Shares owned by the Purchaser or any affiliate of the Purchaser
or held in the treasury of the Company or by any subsidiary of the Company, all
of which will be cancelled and no payment shall be made with respect thereto,
and other than Dissenting Shares (as defined below under "Dissenters' Rights"))
shall, by virtue of the Merger and without any action on the part of the holder
thereof, be converted into the right to receive $18.00 net to the
<PAGE>   4
 
holder in cash, or any higher price that may be paid pursuant to the Offer,
payable to the holder thereof, without interest thereon, upon surrender of the
certificate representing such Share.
 
     All options to purchase Common Stock (the "Options") pursuant to the
Company's 1991 Employees' Incentive Compensation Program or the Company's 1994
Non-Employee Directors' Incentive Compensation Program (collectively, the "Stock
Option Plans") shall, in accordance with such Plans, become exercisable upon
consummation of the Merger and the Shares received upon such exercise shall be
convertible in the Merger into cash in an amount equal to the Offer Price, less
required withholding taxes. The Merger Agreement provides that the Company will
take reasonable actions to effect the provisions of the Merger Agreement related
to the Options, including using reasonable efforts to obtain the written
acknowledgment of each holder of Options that the payment of such amount will
fully discharge the Company's obligations with respect thereto. Subsequent to
the Effective Time, Options will no longer be issued under the Company's Stock
Option Plans.
 
     Concurrently with the execution of the Merger Agreement, Parent entered
into Stockholder Agreements, dated as of July 1, 1996 (the "Stockholder
Agreements"), with certain stockholders of the Company (the "Principal
Stockholders") who hold, in the aggregate, approximately 56% of the outstanding
Shares. Pursuant to the Stockholder Agreements, each Principal Stockholder has
agreed to sell to the Purchaser all Shares which are beneficially owned by such
individual at a price per Share equal to the price paid for the Shares in the
Offer, provided that such obligation to sell and the obligation to purchase is
subject to the Purchaser having accepted Shares for payment in the Offer. The
Principal Stockholders also agreed to vote their Shares against any competing
transaction, including a merger (other than the Merger), or any other
extraordinary corporate transaction such as a consolidation, combination or sale
of the Company's assets or any proposal or transaction that would in any manner
impede, frustrate, prevent or nullify the Offer or the Merger. In addition, each
of the Principal Stockholders granted Parent an irrevocable proxy to vote or
grant a consent or approval in respect of the Shares then owned by such
Principal Stockholder as set forth in the preceding sentence. One of the
Principal Stockholders also granted the Purchaser the right to purchase up to
100,000 of his Shares by delivery of a promissory note, as described under the
heading "Stockholder Agreements" in Section 11. See Section 11.
 
     The Purchaser has been advised by the Company that, to the Company's
knowledge, to the extent permitted by applicable securities laws, rules or
regulations, all of the Company's directors and executive officers currently
intend to tender all Shares owned by them pursuant to the Offer.
 
     Parent has asked Mr. Randolph M. Moity, Sr., the Chairman, Chief Executive
Officer and President of the Company, who is also a Principal Stockholder
holding approximately 50% of the Shares, to continue his position as Chairman,
Chief Executive Officer and President of the Company until such time as a
suitable replacement may be found and thereafter to resign his position as
Chairman, Chief Executive Officer and President at the request of the Company.
See Section 11.
 
     According to the Company, as of May 31, 1996, there were 3,701,505 Shares
outstanding, 400,000 Shares reserved for issuance upon exercise of then
outstanding Options to acquire Shares under the Company's Incentive Plan and
Directors' Plan, 300,000 Shares reserved for issuance under the Company's 401(k)
Plan and 110,000 warrants outstanding, each representing the right to purchase
from the Company, on or prior to December 12, 1996, one Share at a price of
$9.4875 per Share.
 
     THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH STOCKHOLDERS SHOULD READ CAREFULLY BEFORE MAKING ANY
DECISION WITH RESPECT TO THE OFFER.
 
                                        2
<PAGE>   5
 
                                THE TENDER OFFER
 
1. TERMS OF THE OFFER.
 
     Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of any extension or
amendment), the Purchaser will accept for payment and pay for all Shares which
are validly tendered prior to the Expiration Date and not withdrawn in
accordance with Section 4. The term "Expiration Date" means 12:00 midnight, New
York City time, on Monday, August 5, 1996 unless and until the Purchaser
(subject to the terms of the Merger Agreement) shall have extended the period of
time during which the Offer is open, in which event the term "Expiration Date"
shall mean the latest time and date at which the Offer, as so extended by the
Purchaser, shall expire.
 
     THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THE SATISFACTION OF THE
MINIMUM SHARE CONDITION. The "Minimum Share Condition" is the condition to the
Offer that the number of Shares being validly tendered and not withdrawn prior
to the Expiration Date represents not less than 90% of the Shares outstanding on
a Fully Diluted Basis. "Fully Diluted Basis" means the number of Shares
outstanding as of the close of business on May 31, 1996, increased by the number
of Shares (i) issued between such date and the Expiration Date, and (ii)
issuable pursuant to the exercise of rights to purchase Shares or upon
conversion or exchange of other securities; reduced, however, by the number (if
any) of Options and other rights exercised as described in the Merger Agreement.
See Section 14 which sets forth the conditions to the Offer. If any condition to
the Purchaser's obligation to purchase Shares under the Offer is not satisfied
prior to the Expiration Date, the Purchaser reserves the right (but is not
obligated) to (i) decline to purchase any or all of the Shares tendered and
terminate the Offer, and return all tendered Shares to tendering stockholders,
(ii) waive such unsatisfied condition, subject to the terms of the Merger
Agreement and to compliance with applicable rules and regulations of the
Securities and Exchange Commission (the "Commission"), and purchase all Shares
validly tendered, (iii) extend the Offer and, subject to the right of
stockholders to withdraw Shares as provided in Section 4, retain the Shares
which have been tendered during the period or periods for which the Offer is
extended or (iv) subject to the terms of the Merger Agreement, amend the Offer.
See Sections 11 and 14.
 
     The Merger Agreement provides that neither Parent nor the Purchaser will,
without the prior written consent of the Board of Directors of the Company
(excluding any designee of the Purchaser), decrease the consideration, or change
the form of consideration, payable in the Offer, decrease the number of Shares
sought pursuant to the Offer, change the conditions to the Offer, impose
additional conditions to the Offer, change the Expiration Date of the Offer or
amend any term of the Offer in any manner adverse to holders of the Shares.
Subject to the foregoing, the Purchaser expressly reserves the right, at any
time or from time to time, subject to the terms of the Merger Agreement and
regardless of whether or not any of the events set forth in Section 14 shall
have occurred or shall have been determined by the Purchaser to have occurred,
(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, by giving oral
or written notice of such extension to the Depositary, and (ii) to amend the
Offer in any respect by giving oral or written notice of such amendment to the
Depositary. The rights reserved by the Purchaser in this paragraph are in
addition to the Purchaser's rights to terminate the Offer described in Section
14. There can be no assurance, however, that the Purchaser will exercise its
rights to extend the Offer. Any extension, amendment or termination will be
followed as promptly as practicable by public announcement thereof, the
announcement in the case of an extension to 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 announcement requirements of Rule
14d-4(c) under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). Without limiting the obligation of the Purchaser under such Rule or the
manner in which the Purchaser may choose to make any public announcement, the
Purchaser currently intends to make announcements by issuing a release to the
Dow Jones News Service.
 
     If the Purchaser extends the Offer, or if the Purchaser (whether before or
after its acceptance for payment of Shares) is delayed in its purchase of or
payment for Shares or is unable to pay for Shares pursuant to the Offer for any
reason, then, without prejudice to the Purchaser's rights under the Offer, the
Depositary may retain tendered Shares on behalf of the Purchaser, and such
Shares may not be withdrawn except to the
 
                                        3
<PAGE>   6
 
extent tendering stockholders are entitled to withdrawal rights as described in
Section 4. However, the ability of the Purchaser to delay the payment for Shares
which the Purchaser has accepted for payment is limited by 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 holders of securities
promptly after the termination or withdrawal of the Offer.
 
     If the Purchaser makes a material change in the terms of the Offer or the
information concerning the Offer or waives a material condition of the Offer,
the Purchaser will disseminate additional tender offer materials and extend the
Offer to the extent required by Rules 14d-4(c), 14d-6(d) and 14e-1 under the
Exchange Act. The minimum period during which the Offer must remain open
following material changes in the terms of the Offer or information concerning
the Offer, other than a change in price or a change in percentage of securities
sought, will depend upon the facts and circumstances, including the relative
materiality of the terms or information. With respect to a change in price or a
change in percentage of securities sought, a minimum period of ten business days
is legally required to allow for adequate dissemination to stockholders and
investor response. If, prior to the Expiration Date, the Purchaser should decide
to increase the price per Share being offered in the Offer, such increase will
be applicable to all stockholders whose Shares are accepted for payment pursuant
to the Offer. As used in this Offer to Purchase, "business day" has the meaning
set forth in Rule 14d-1 under the Exchange Act.
 
     The Company has provided to the Purchaser the Company's stockholder list
and security position listings for the purpose of disseminating the Offer to
holders of Shares. This Offer to Purchase and the related Letter of Transmittal
and other relevant materials will be mailed to record holders of Shares and
furnished to brokers, dealers, commercial banks, trust companies and similar
persons whose names, or the names of whose nominees, appear on the stockholder
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.
 
2. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES.
 
     Assuming the prior satisfaction or waiver of the conditions to the Offer
(including, if the Offer is extended or amended, the terms and conditions of any
extension or amendment), the Purchaser shall accept for payment and pay for all
Shares validly tendered prior to the Expiration Date (and not properly withdrawn
in accordance with Section 4) as soon as legally permissible after the
commencement of the Offer after the later to occur of (i) the Expiration Date
and (ii) the satisfaction or waiver of the conditions set forth in Section 14.
Any determination concerning the satisfaction of such terms and conditions shall
be within the sole discretion of the Purchaser. See Section 14. The Purchaser
expressly reserves the right to delay acceptance for payment of, or, subject to
Rule 14e-1(c) under the Exchange Act, payment for, Shares in order to comply, in
whole or in part, with any applicable law. See Sections 14 and 15.
 
     In all cases, payment for Shares purchased pursuant to the Offer will be
made only after timely receipt by the Depositary of (i) the certificates
evidencing such Shares or timely confirmation of book-entry transfer (a
"Book-Entry Confirmation") of such Shares, if such procedure is available, into
the Depositary's account at The Depository Trust Company, the Midwest Securities
Trust Company or the Philadelphia Depository Trust Company (each, a "Book-Entry
Transfer Facility") pursuant to the procedures set forth in Section 3, (ii) a
properly completed and duly executed Letter of Transmittal (or facsimile
thereof), or an Agent's Message (as defined below) in connection with a
book-entry transfer, and (iii) any other documents required by the Letter of
Transmittal.
 
     The term "Agent's Message" means a message, transmitted by a Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that such Book-Entry Transfer Facility has
received an express acknowledgment from the participant in such Book-Entry
Transfer Facility tendering the Shares which are the subject of such Book-Entry
Confirmation, that such participant has received and agrees to be bound by the
terms of the Letter of Transmittal and that the Purchaser may enforce such
agreement against such participant.
 
     For purposes of the Offer, the Purchaser will be deemed to have accepted
for payment (and thereby purchased) tendered Shares validly tendered and not
withdrawn, if, as and when the Purchaser gives oral or
 
                                        4
<PAGE>   7
 
written notice to the Depositary of the Purchaser's acceptance of such Shares
for payment pursuant to the Offer. In all cases, payment for Shares purchased
pursuant to the Offer will be made by deposit of the purchase price with the
Depositary, which will act as agent for tendering stockholders for the purpose
of receiving payment from the Purchaser and transmitting payment to tendering
stockholders. Under no circumstances will interest on the purchase price of the
Shares be paid by the Purchaser.
 
     If any tendered Shares are not accepted for payment for any reason pursuant
to the terms and conditions of the Offer, or if certificates submitted represent
more Shares than are tendered, certificates for such Shares not purchased or
tendered will be returned, without expense to the tendering stockholder (or, in
the case of Shares tendered by book-entry transfer into the Depositary's account
at a Book-Entry Transfer Facility pursuant to the procedures set forth in
Section 3, such Shares will be credited to an account maintained at such
Book-Entry Transfer Facility), as promptly as practicable after the expiration,
termination or withdrawal of the Offer.
 
3. PROCEDURES FOR TENDERING SHARES.
 
     Valid Tender of Shares.  For Shares to be validly tendered pursuant to the
Offer, a properly completed and duly executed Letter of Transmittal or facsimile
thereof, with any required signature guarantees, or an Agent's Message in
connection with a book-entry delivery of Shares, and any other required
documents, must be received by the Depositary at one of its addresses set forth
on the back cover of this Offer to Purchase prior to the Expiration Date. In
addition, either (i) the certificates evidencing tendered Shares must be
received by the Depositary along with the Letter of Transmittal, (ii) Shares
must be tendered pursuant to the procedures for book-entry transfer described
below and a Book-Entry Confirmation must be received by the Depositary, in each
case prior to the Expiration Date, or (iii) the tendering stockholder must
comply with the guaranteed delivery procedures described below.
 
     THE METHOD OF DELIVERY OF SHARES, THE LETTER OF TRANSMITTAL (OR A MANUALLY
SIGNED FACSIMILE THEREOF) AND ANY OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY
THROUGH A BOOK-ENTRY TRANSFER FACILITY, IS AT THE OPTION AND RISK OF THE
TENDERING STOCKHOLDER. 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 each Book-Entry Transfer Facility for purposes of the Offer
within two business days after the date of this Offer to Purchase. Any financial
institution that is a participant in any of the Book-Entry Transfer Facilities'
systems may make book-entry delivery of Shares by causing a Book-Entry Transfer
Facility to transfer such Shares into the Depositary's account at a Book-Entry
Transfer Facility in accordance with such Book-Entry Transfer Facility's
procedures for transfer. However, although delivery of Shares may be effected
through book-entry transfer at a Book-Entry Transfer Facility, the Letter of
Transmittal or facsimile thereof, properly completed and duly executed, with any
required signature guarantees, or an Agent's Message in connection with a book-
entry delivery of Shares, and any other required documents, must, in any case,
be transmitted to and received by the Depositary at one of its addresses set
forth on the back cover of this Offer to Purchase prior to the Expiration Date
or the tendering stockholder must comply with the guaranteed delivery procedures
described below. DELIVERY OF DOCUMENTS TO A BOOK-ENTRY TRANSFER FACILITY IN
ACCORDANCE WITH THE BOOK-ENTRY TRANSFER FACILITY'S PROCEDURES DOES NOT
CONSTITUTE DELIVERY TO THE DEPOSITARY.
 
     Signature Guarantees.  Signatures on all Letters of Transmittal must be
guaranteed by a member firm of a registered national securities exchange, a
member of the National Association of Securities Dealers, Inc. ("NASD") or a
commercial bank or trust company having an office or correspondent in the United
States (each of the foregoing being referred to as an "Eligible Institution"),
except in cases where Shares are tendered (i) 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
(ii) for the account of an Eligible Institution. See Instruction 1 of the Letter
of Transmittal.
 
     If a 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 certificates
for Shares not accepted for payment or not tendered are to be returned to
 
                                        5
<PAGE>   8
 
a person other than the registered holder, then the tendered certificates must
be endorsed or accompanied by appropriate stock powers, in either case signed
exactly as the name or names of the registered owner or owners appear on the
certificates, with the signatures on the certificates or stock powers guaranteed
as described above. See Instructions 1 and 5 of the Letter of Transmittal.
 
     Guaranteed Delivery.  If a stockholder desires to tender Shares pursuant to
the Offer and such stockholder's certificates for Shares are not immediately
available or time will not permit all required documents to reach the Depositary
prior to the Expiration Date, or the procedure for book-entry transfer cannot be
completed on a timely basis, such Shares may nevertheless be tendered if all the
following conditions are satisfied:
 
          (i) the tender is made by or through an Eligible Institution;
 
          (ii) a properly completed and duly executed Notice of Guaranteed
     Delivery, substantially in the form provided by the Purchaser herewith, is
     received by the Depositary as provided below prior to the Expiration Date;
     and
 
          (iii) the certificates for all tendered Shares, in proper form for
     transfer (or a Book-Entry Confirmation), together with a Letter of
     Transmittal or facsimile thereof, 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 are received by the Depositary within three NASDAQ
     National Market ("NNM") trading days after the date of execution of such
     Notice of Guaranteed Delivery. Stockholders may not extend the foregoing
     time period for delivery of Shares to the Depositary by providing a second
     Notice of Guaranteed Delivery with respect to such Shares.
 
     Any Notice of Guaranteed Delivery may be delivered by hand or transmitted
by telegram, telex, facsimile transmission or mail to the Depositary and must
include a guarantee by an Eligible Institution in the form set forth in the
Notice of Guaranteed Delivery.
 
     Notwithstanding any other provision hereof, payment for Shares purchased
pursuant to the Offer will in all cases be made only after timely receipt by the
Depositary of (i) certificates evidencing the Shares or a timely Book-Entry
Confirmation of the delivery of such Shares, (ii) a Letter of Transmittal (or
manually signed facsimile thereof), properly completed and duly executed, with
any required signature guarantees (or, in the case of a book-entry transfer, an
Agent's Message) and (iii) any other documents required by the Letter of
Transmittal. Accordingly, payment might not be made to all tendering
stockholders at the same time, and will depend upon when certificates for the
Shares or Book-Entry Confirmations of the delivery of such Shares are received
into the Depositary's account at a Book-Entry Transfer Facility.
 
     Backup Federal Withholding Tax.  Under the backup federal income tax laws
and regulations applicable to certain stockholders (other than certain exempt
stockholders, including, among others, all corporations and certain foreign
individuals), the Depositary may be required to withhold 31% of the amount of
any payments made to such stockholders pursuant to the Offer. To prevent backup
federal income tax withholding with respect to payment of the purchase price for
Shares purchased pursuant to the Offer, a tendering stockholder must provide the
Depositary with such stockholder's correct taxpayer identification number and
certify that such stockholder is not subject to backup federal income tax
withholding by completing the Substitute Form W-9 included in the Letter of
Transmittal. See Instruction 9 to the Letter of Transmittal.
 
     Determination of Validity.  All questions as to the validity, form,
eligibility (including time of receipt) and acceptance for payment of any
tendered Shares pursuant to any of the procedures described above will be
determined in the sole discretion of the Purchaser, whose determination shall be
final and binding. The Purchaser reserves the absolute right to reject any or
all tenders of any Shares determined by it not to be in proper form or if the
acceptance for payment of, or payment for, such Shares may, in the opinion of
the Purchaser's counsel, be unlawful. The Purchaser also reserves the absolute
right, in its sole discretion, subject to the Merger Agreement, to waive any of
the conditions of the Offer or any defect or irregularity in any tender with
respect to Shares of any particular stockholder, whether or not similar defects
or irregularities are waived
 
                                        6
<PAGE>   9
 
in the case of other stockholders. No tender of Shares will be deemed to have
been validly made until all defects and irregularities have been cured or
waived.
 
     The Purchaser's interpretation of the terms and conditions of the Offer
(including the Letter of Transmittal and the Instructions thereto) will be final
and binding. None of the Purchaser, the Depositary, the Information Agent nor
any other person or entity will be under any duty to give notification of any
defects or irregularities in tenders or will incur any liability for failure to
give any such notification.
 
     A tender of Shares pursuant to any one of the procedures described above
will constitute the tendering stockholder's acceptance of the terms and
conditions of the Offer. The Purchaser's acceptance for payment for Shares
tendered pursuant to the Offer will constitute a binding agreement between the
tendering stockholder and the Purchaser upon the terms and subject to the
conditions of the Offer.
 
     Appointment as Proxy.  By executing a Letter of Transmittal or by causing
the transmission of an Agent's Message as set forth above, a tendering
stockholder irrevocably appoints designees of the Purchaser as the stockholder's
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 such
stockholder's rights with respect to the Shares tendered by such stockholder and
accepted for payment by the Purchaser (and any and all other Shares or other
securities issued or issuable in respect of such Shares on or after the date of
the Merger Agreement). All such proxies shall be considered coupled with an
interest in the tendered Shares. This appointment will be effective if, when,
and only to the extent that, the Purchaser accepts Shares for payment. Upon
acceptance for payment, all prior proxies given by the stockholder with respect
to the Shares or other securities will, without further action, be revoked, and
no subsequent proxies may be given. The designees of the Purchaser will, with
respect to the Shares and other securities for which the appointment is
effective, be empowered to exercise all voting and other rights of such
stockholder as they in their sole discretion may deem proper at any annual,
special or adjourned meeting of the Company's stockholders, by written consent
or otherwise. The Purchaser reserves the right to require that, in order for
Shares to be deemed validly tendered, immediately upon the Purchaser's
acceptance for payment of such Shares, the Purchaser must be able to exercise
full voting and other rights of a record and beneficial holder, including rights
in respect of acting by written consent, with respect to such Shares.
 
4. WITHDRAWAL RIGHTS.
 
     Except as otherwise provided in this Section 4, tenders of Shares made
pursuant to the Offer are irrevocable. Shares tendered pursuant to the Offer may
be withdrawn at any time prior to the Expiration Date and, unless theretofore
accepted for payment by the Purchaser pursuant to the Offer, may also be
withdrawn at any time after September 6, 1996 (or such later date as may apply
in case the Offer is extended).
 
     For a withdrawal to be effective, a written, telegraphic, telex or
facsimile transmission notice of withdrawal must be timely received by the
Depositary at one of its addresses set forth on the back cover of this Offer to
Purchase. Any such 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, if different from that of the person who
tendered such Shares. If certificates evidencing Shares to be withdrawn have
been delivered or otherwise identified to the Depositary, then, prior to the
release of such certificates, the serial numbers of the particular certificates
evidencing the Shares to be withdrawn and a signed notice of withdrawal with
signatures guaranteed by an Eligible Institution, except in the case of Shares
tendered for account of an Eligible Institution, must also be furnished to the
Depositary as described above. If Shares have been tendered pursuant to the
procedures for book-entry transfer as set forth in Section 3, any notice of
withdrawal must also specify the name and number of the account at the
appropriate Book-Entry Transfer Facility to be credited with the withdrawn
Shares.
 
     ALL QUESTIONS AS TO THE FORM AND VALIDITY (INCLUDING TIME OF RECEIPT) OF
NOTICES OF WITHDRAWAL WILL BE DETERMINED BY THE PURCHASER, IN ITS SOLE
DISCRETION, WHOSE DETERMINATION WILL BE FINAL AND BINDING. NEITHER OF THE
PURCHASER, THE DEPOSITARY, THE INFORMATION AGENT NOR ANY OTHER PERSON OR ENTITY
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
NOTIFICATION.
 
                                        7
<PAGE>   10
 
     Any Shares properly withdrawn will be deemed to be not validly tendered for
purposes of the Offer. However, withdrawn Shares may be re-tendered by following
one of the procedures described in Section 3 at any time prior to the Expiration
Date.
 
5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES.
 
     The receipt of cash for Shares pursuant to the Offer (or the Merger) will
be a taxable transaction for federal income tax purposes and may also be a
taxable transaction under applicable state, local or foreign tax laws. The tax
consequences of such receipt pursuant to the Offer (or the Merger) may vary
depending upon, among other things, the particular circumstances of the
stockholder. In general, a stockholder who receives cash for Shares pursuant to
the Offer (or the Merger) will recognize gain or loss for federal income tax
purposes equal to the difference between the amount of cash received in exchange
for the Shares sold and such stockholder's adjusted tax basis in such Shares.
Provided that the Shares constitute capital assets in the hands of the
stockholder, such gain or loss will be capital gain or loss, and will be long
term capital gain or loss if the holder has held the Shares for more than one
year at the time of sale. Gain or loss will be calculated separately for each
block of Shares tendered pursuant to the Offer.
 
     The foregoing discussion may not be applicable to certain types of
stockholders, including stockholders who acquired Shares pursuant to the
exercise of employee stock options or otherwise as compensation, individuals who
are not citizens or residents of the United States, foreign corporations and
entities that are otherwise subject to special tax treatment under the Internal
Revenue Code of 1986, as amended (the "Internal Revenue Code"), such as
insurance companies, tax-exempt entities and regulated investment companies.
 
     THE FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL
INFORMATION ONLY AND IS BASED UPON PRESENT LAW. STOCKHOLDERS ARE URGED TO
CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE SPECIFIC TAX CONSEQUENCES OF THE
OFFER AND THE MERGER TO THEM, INCLUDING THE APPLICATION AND EFFECT OF THE
ALTERNATIVE MINIMUM TAX, AND STATE, LOCAL AND FOREIGN TAX LAWS.
 
6. PRICE RANGE OF SHARES; DIVIDENDS.
 
     According to the Company's Annual Report on Form 10-K for the fiscal year
ended June 30, 1995 (the "Company Form 10-K"), the Company's Quarterly Report on
Form 10-Q for the fiscal quarter ended March 31, 1996 and information supplied
to the Purchaser by the Company, the Shares are traded on the NASDAQ National
Market under the trading symbol "AMBR". The following table sets forth, for the
periods indicated, the high and low bid prices per Share on the NASDAQ National
Market as reported in publicly available sources.
 
<TABLE>
<CAPTION>
                                                                                 HIGH     LOW
                                                                                 ----     ----
<S>                                                                              <C>      <C>
FISCAL 1995
  First Quarter................................................................  4 1/4    4
  Second Quarter...............................................................  6        3 3/4
  Third Quarter................................................................  4 3/4    4 1/2
  Fourth Quarter...............................................................  4 1/2    4 3/8
FISCAL 1996
  First Quarter................................................................  5 3/8    4 1/4
  Second Quarter...............................................................  8        5 1/4
  Third Quarter................................................................  11 1/8   7 7/8
  Fourth Quarter...............................................................  14 3/4   9 3/4
FISCAL 1997
  First Quarter (through July 8, 1996).........................................  17 5/8  14 1/2
</TABLE>
 
     On July 1, 1996, the last full trading day prior to the announcement of the
Merger Agreement, the reported closing bid price per Share on the NASDAQ
National Market was $14.50. On July 8, 1996, the last full trading day prior to
the commencement of the Offer, the reported closing bid price per Share on the
 
                                        8
<PAGE>   11
 
NASDAQ National Market was $17 5/8. STOCKHOLDERS ARE URGED TO OBTAIN A CURRENT
MARKET QUOTATION FOR THE SHARES.
 
     The Company has advised the Purchaser that the Company has never declared
or paid any cash dividends in respect of the Shares. The Company has agreed
pursuant to the Merger Agreement that prior to the Merger it will not declare,
set aside for payment or pay any dividends.
 
7. CERTAIN INFORMATION CONCERNING THE COMPANY.
 
     The information concerning the Company contained in this Offer to Purchase,
including financial information, has been furnished by the Company or has been
taken from or based upon publicly available documents on file with the
Commission and other publicly available information. Neither the Purchaser nor
Parent assumes any responsibility for the accuracy or completeness of the
information contained in such documents or for any failure by the Company to
disclose events that may have occurred and may affect the significance or
accuracy of any such information but which are unknown to either the Purchaser
or Parent.
 
     General.  The Company is a Delaware corporation with its principal
executive offices located at 221 Rue de Jean, Lafayette, Louisiana 70508.
According to the Company's public information, the Company designs, blends and
markets certain fluids and chemicals and provides environmental services
primarily to oil and gas operators along the Gulf Coast, principally Louisiana
and Texas. Also, the Company has publicly reported entering into a long-term
feedstock agreement for a brine stream and acquiring an evaporation plant in
Manistee, Michigan that it is presently retrofitting to produce liquid and dry
calcium chloride.
 
     Selected Consolidated Financial Data.  The following selected consolidated
financial data relating to the Company have been taken or derived from the
audited financial statements contained in the Company's annual report on Form
10-K for the period ended June 30, 1995 (the "Company Form 10-K") and the
unaudited financial statements contained in the Company's quarterly report on
Form 10-Q for the quarterly period ended March 31, 1996 (the "Company Form
10-Q"). More comprehensive financial information (including the notes to the
Company's financial statements) is included in such Company Form 10-K and
Company Form 10-Q and the other documents filed by the Company with the
Commission, and the financial data set forth below are qualified in their
entirety by reference to such reports and other documents, including the
financial statements (and notes thereto) and management's discussion and
analysis contained therein. Such reports and other documents may be examined and
copies may be obtained from the offices of the Commission in the manner set
forth below.
 
                                        9
<PAGE>   12
 
                                  AMBAR, INC.
 
                      SELECTED CONSOLIDATED FINANCIAL DATA
                (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
 
<TABLE>
<CAPTION>
                                                                                        NINE
                                                    FISCAL YEAR ENDED               MONTHS ENDED
                                                        JUNE 30,                      MARCH 31,
                                            ---------------------------------   ---------------------
                                              1993        1994        1995        1995        1996
                                            ---------   ---------   ---------   ---------   ---------
                                                                                     (UNAUDITED)
<S>                                         <C>         <C>         <C>         <C>         <C>
INCOME STATEMENT DATA
Revenues:
  Oil field products and services.........    $20,973     $37,546     $31,661     $24,842     $27,883
  Environmental products and services.....      3,946       5,762       6,416       4,539       7,725
                                            ---------   ---------   ---------   ---------   ---------
          Total revenues..................     24,919      43,308      38,077      29,381      35,608
                                            ---------   ---------   ---------   ---------   ---------
Cost of Revenues:
  Oil field products and services.........     18,400      31,146      28,197      21,652      24,630
  Environmental products and services.....      4,196       5,220       5,039       3,418       7,087
                                            ---------   ---------   ---------   ---------   ---------
          Total cost of revenues..........     22,596      36,366      33,236      25,070      31,717
                                            ---------   ---------   ---------   ---------   ---------
Gross profit..............................      2,323       6,942       4,841       4,311       3,891
Selling, general and administrative.......      4,139       4,567       4,470       3,302       3,418
                                            ---------   ---------   ---------   ---------   ---------
Operating income (loss)...................     (1,816)      2,375         371       1,009         473
Interest expense, net.....................         77         356         697         543         675
                                            ---------   ---------   ---------   ---------   ---------
Income (loss) before income taxes.........     (1,893)      2,019        (326)        466        (202)
Income tax provision (benefit)............       (693)        742         (90)        172         (73)
                                            ---------   ---------   ---------   ---------   ---------
Net income (loss).........................    $(1,200)    $ 1,277      $ (236)    $   294      $ (129)
Net income (loss) per common share........    $  (.33)    $   .35      $ (.06)    $   .08      $ (.03)
Weighted average common shares
  outstanding.............................  3,628,691   3,632,765   3,667,344   3,663,481   3,732,288
Cash dividends per common share...........         --          --          --          --          --
</TABLE>
 
<TABLE>
<CAPTION>
                                                                                       MARCH 31,
                                                                                         1996
                                                                         JUNE 30,     -----------
                                                                           1995
                                                                         --------     (UNAUDITED)
<S>                                                                      <C>          <C>
BALANCE SHEET DATA
Total current assets...................................................  $ 16,498       $23,767
Total assets...........................................................    27,746        39,077
Total current liabilities..............................................     8,925        17,601
Long-term liabilities..................................................     3,947         6,611
Total stockholders' equity.............................................    14,874        14,865
</TABLE>
 
     The Company is subject to the information and filing requirements of the
Exchange Act and is required to file periodic reports, proxy statements and
other information with the Commission relating to its business, financial
condition and other matters. Information, as of particular dates, concerning the
Company's directors and officers, their remuneration, stock options granted to
them, the principal holders of the Company's securities and any material
interest of such persons in transactions with the Company is required to be
described in proxy statements distributed to the Company's stockholders and
filed with the Commission. These reports, proxy statements and other information
should be available for inspection and copying at the Commission's principal
office at 450 Fifth Street, N.W., Washington, D.C. 20549, and at the regional
offices of the Commission located at Seven World Trade Center, 13th Floor, New
York, New York 10048 and Citicorp Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661. Copies of these materials may also be obtained by mail,
upon payment of the Commission's customary fees, from the Commission's principal
office at 450 Fifth Street, N.W., Washington, D.C. 20549. In addition, certain
material filed by the Company
 
                                       10
<PAGE>   13
 
should also be available for inspection at the offices of the National
Association of Securities Dealers, Inc., Reports Section, 1735 K Street, N.W.,
Washington, D.C. 20006.
 
8. CERTAIN INFORMATION CONCERNING THE BEACON GROUP, PARENT AND THE PURCHASER.
 
     The Beacon Group is a private investment and advisory partnership which is
a New York general partnership. The Beacon Group formed Parent and the Purchaser
for the purposes of the transactions described in this Offer to Purchase. The
Beacon Group's address is 375 Park Avenue, Suite 1705, New York, New York 10152.
For certain information concerning the general partners of The Beacon Group, see
Schedule I to this Offer to Purchase.
 
     The Purchaser is a newly incorporated Delaware corporation and a wholly
owned subsidiary of Parent, which is a newly formed Delaware limited
partnership. The general partner of Parent is AI-GP, L.L.C. ("AI-GP"), a newly
formed Delaware limited liability company. The sole member of AI-GP is Energy
Fund GP, Inc., a Delaware corporation ("Energy Fund"), all of the outstanding
stock of which is owned by The Beacon Group Holdings, L.L.C., a Delaware limited
liability company ("Holdings"), the sole member of which is The Beacon Group. To
date, none of AI-GP, Parent and the Purchaser have conducted any business other
than incident to their formation, the execution and delivery of the Merger
Agreement and commencement of the Offer. Accordingly, no meaningful financial
information with respect to AI-GP, Parent or the Purchaser is available. The
principal executive offices of Holdings, Energy Fund, AI-GP, Parent and the
Purchaser are located at 375 Park Avenue, Suite 1705, New York, New York 10152.
 
     For certain information concerning the members, partners and directors and
executive officers, respectively, of The Beacon Group, Holdings, Energy Fund,
AI-GP, Parent and the Purchaser, see Schedule I to this Offer to Purchase.
 
     Except as provided in the Merger Agreement, and as otherwise described in
this Offer to Purchase, none of The Beacon Group, Holdings, Energy Fund, AI-GP,
Parent or the Purchaser, nor to the best knowledge of Parent and the Purchaser,
any of the persons listed on Schedule I hereto, has any contract, arrangement,
understanding or relationship with any other person with respect to any
securities of the Company, including, but not limited to, any contract,
arrangement, understanding or relationship concerning the transfer or the voting
of any securities of the Company, joint ventures, loan or option arrangements,
puts or calls, guarantees of loans, guarantees against loss of the giving or
withholding of proxies. Except as set forth in this Offer to Purchase, none of
The Beacon Group, Holdings, Energy Fund, AI-GP, Parent or the Purchaser, nor, to
the best of their knowledge, any of the persons listed on Schedule I hereto, has
had, since July 1, 1993, any business relationships or transactions with the
Company or any of its executive officers, directors or affiliates that would
require reporting under the rules of the Commission applicable to this Offer to
Purchase. Except as set forth in this Offer to Purchase, since July 1, 1993,
there have been no contacts, negotiations or transactions between the Purchaser,
Parent or any of its subsidiaries or, to the best knowledge of Parent and the
Purchaser, any of the persons listed on Schedule I hereto, and the Company or
its affiliates, concerning a merger, consolidation or acquisition, tender offer
or other acquisition of securities, election of directors or a sale or other
transfer of a material amount of assets. Except as set forth in this Offer to
Purchase, and, neither Parent nor the Purchaser, nor, to the best knowledge of
Parent or the Purchaser, any of the persons listed on Schedule I hereto,
beneficially owns any Shares or has effected any transactions in the Shares in
the past 60 days.
 
9. SOURCE AND AMOUNT OF FUNDS.
 
     The Purchaser estimates that the total amount of funds required by the
Purchaser to purchase all outstanding Shares and to pay related fees and
expenses will be approximately $73.5 million. The funds necessary to purchase
Shares pursuant to the Offer and to pay related fees and expenses will be
furnished to the Purchaser in the form of capital contributions by Parent.
Parent expects to obtain such funds from the proceeds of the sale of partnership
interests to the institutions and other investors that have made capital
commitments to an affiliate of Parent.
 
                                       11
<PAGE>   14
 
10. BACKGROUND OF THE OFFER; PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH
THE COMPANY.
 
     In early April, 1996, representatives of The Beacon Group and the Company
conducted several preliminary discussions regarding the possibility of The
Beacon Group investing in the Company, and on April 23, 1996, The Beacon Group
entered into a confidentiality agreement with the Company. On April 26, 1996,
Randolph M. Moity, Sr., the Chairman of the Board, Chief Executive Officer and
President of the Company, met with Robert F. Semmens, a Partner in The Beacon
Group. At that meeting, Mr. Moity and Mr. Semmens discussed the terms under
which The Beacon Group might invest in the Company. Mr. Moity informed Mr.
Semmens at that time that the Company was contemplating a sale of its common
stock to the public, but that the Company would be willing to consider an
alternative investment from The Beacon Group on a more expeditious schedule than
a public offering. During the next several weeks representatives of the Company
continued to prepare for a public offering and at the same time took part in
several meetings and phone calls with representatives of The Beacon Group during
which several alternative investment proposals, as well as the business of the
Company, were discussed. Thereafter, and throughout June 1996, the parties
conducted due diligence in accordance with the terms of the confidentiality
agreement dated April 23, 1996.
 
     On May 23, 1996, Mr. Semmens and Harold W. Pote, another Partner in The
Beacon Group, attended a meeting of the Board of Directors of the Company in
Lafayette, Louisiana. At that meeting, Messrs. Semmens and Pote proposed a
financing under which The Beacon Group would purchase for approximately $25
million from the Company an issue of convertible preferred stock and the Company
would not pursue its public offering. At the end of the meeting, the Company's
Board of Directors decided to reject The Beacon Group's proposal and to pursue
the public offering.
 
     On May 29, 1996, Mr. Moity met in The Beacon Group's offices in New York
with several Partners in The Beacon Group, including Mr. Semmens and Mr. Pote.
At that meeting, Mr. Semmens and Mr. Pote proposed to Mr. Moity that, subject to
certain conditions, The Beacon Group purchase 100% of the outstanding common
equity of the Company through a transaction that Mr. Moity, as the Company's
majority stockholder, would support. In connection with that proposal Mr.
Semmens and Mr. Pote told Mr. Moity that The Beacon Group was prepared to
purchase all of the Company's common stock at $14.50 per share.
 
     As a result of the proposal made to Mr. Moity on May 29, 1996, a special
meeting of the Company's Board of Directors was called in New Orleans, Louisiana
on May 31, 1996. At that meeting, the Board of Directors appointed an
Independent Committee of the Board of Directors to evaluate The Beacon Group's
proposal. The Independent Committee was composed of all of the members of the
Company's Board of Directors with the exception of Mr. Moity. Thereafter, the
Independent Committee retained counsel and a financial advisor, Raymond James,
to aid it in its evaluation of The Beacon Group's proposal.
 
     On June 7, 1996, the Independent Committee informed The Beacon Group that
the purchase price proposed was inadequate and rejected the proposal.
Discussions ensued over the next several days between the Independent Committee
and The Beacon Group over the structure of the transaction proposed by The
Beacon Group and the purchase price. On June 10, 1996, The Beacon Group informed
the Independent Committee that it was willing to raise the purchase price in its
proposal to $16.25 per share. On June 14, 1996, after conferring with its
financial advisor, the Independent Committee rejected the new purchase price
proposed by The Beacon Group as inadequate.
 
     Between June 14, 1996 and June 27, 1996, members of the Independent
Committee continued to have periodic discussions with The Beacon Group. On June
27, 1996, Mr. Semmens indicated to Mr. Moity and Mr. Robert D. van Roijen,
Co-Chairman of the Independent Committee, that The Beacon Group would be
interested in resuming merger negotiations, and that if the results of such
negotiations proved to be satisfactory, The Beacon Group would increase its
offer to $18.00 per share. Thereafter, on June 28 and 29, 1996, Messrs. Moity
and van Roijen met in New York with Mr. Semmens, Mr. Pote and several other
representatives of The Beacon Group. Counsel for the Company and counsel for The
Beacon Group were present at such meetings. At those meetings, the acquisition
of all of the Company's shares at a purchase price of $18.00 per share was
agreed upon. During the period preceding and throughout such meetings,
representatives of the Company and The Beacon Group engaged in extensive
negotiations relating to the terms of the Merger Agreement. Also at the
meetings, the Stockholder Agreements were negotiated. The Beacon Group
conditioned its willingness to enter into
 
                                       12
<PAGE>   15
 
the transactions contemplated by the Merger Agreement upon the Principal
Stockholders entering into the Stockholder Agreements which provide assurances
that such stockholders would sell their Shares to the Purchaser.
 
     On July 1, 1996, the Independent Committee informed the Company's Board of
Directors of the results of its deliberations with The Beacon Group and that its
financial advisor had opined that the purchase price proposed by The Beacon
Group was fair to the Company's stockholders from a financial point of view and
that the Independent Committee recommended the Offer and the Merger. Thereafter,
the Company's Board of Directors approved the Merger Agreement and determined to
recommend that stockholders tender their shares in the Offer. The Company's
Board of Directors also approved, for purposes of Section 203 of the Delaware
General Corporation Law (the "GCL"), the Stockholder Agreements.
 
     After the close of business on July 1, 1996, the Merger Agreement and the
Stockholder Agreements were executed and delivered. The transaction was publicly
announced on the morning of July 2, 1996. A summary of the respective terms of
the Merger Agreement and the Stockholder Agreements are set forth in Section 11.
Copies of the Merger Agreement and the Stockholder Agreements have been filed as
exhibits to the Schedule 14D-1 filed by Parent and the Purchaser with the
Commission and are available for inspection and copy at the principal office of
the Commission in the manner set forth in Section 7.
 
     On July 9, 1996, the Purchaser commenced the Offer.
 
11. PURPOSE OF THE OFFER; THE MERGER; THE MERGER AGREEMENT; STOCKHOLDER
    AGREEMENTS; EMPLOYMENT AGREEMENT; PLANS FOR THE COMPANY.
 
     The purpose of the Offer, the Stockholder Agreements, the Merger and the
Merger Agreement is for Parent to acquire control of, and the entire common
equity interest in, the Company. The Offer, the Stockholder Agreements, and the
Merger Agreement are intended to increase the likelihood that the Merger will be
effected as promptly as practicable.
 
     The Merger Agreement.  The following summary of the Merger Agreement, a
copy of which is filed as an exhibit to the Schedule 14D-1, is qualified by
reference to the Merger Agreement.
 
     The Offer.  The Merger Agreement provides for the making of the Offer. The
obligation of the Purchaser to accept for payment or pay for Shares tendered
pursuant to the Offer is subject to the satisfaction of the Minimum Share
Condition and certain other conditions that are described in Section 14 hereof.
The Purchaser has reserved the right to modify any of the terms and conditions
of the Offer except that neither Parent nor the Purchaser will, without the
prior written consent of the Board of Directors of the Company (excluding any
designee of the Purchaser), decrease the consideration, or change the form of
consideration, payable in the Offer, decrease the number of Shares sought
pursuant to the Offer, change the conditions to the Offer, impose additional
conditions to the Offer, change the Expiration Date of the Offer, or amend any
term of the Offer in any manner adverse to holders of the Shares.
 
     Recommendation.  The Board of Directors of the Company (at a meeting duly
called and held) has, based upon, among other things, the unanimous
recommendation of a duly appointed Independent Committee of the Board and the
opinion of Raymond James, its financial advisor, that the proposed consideration
to be paid in the Offer and the Merger is fair from a financial point of view to
the holders of Shares, (i) determined that the Offer and the Merger are fair to,
and in the best interests of, the stockholders of the Company, (ii) taken all
actions to approve the Offer, the Merger and the Stockholder Agreements for
purposes of Section 203 of the GCL and (iii) subject to its fiduciary duties
under applicable laws as advised by counsel, resolved to recommend acceptance of
the Offer and approval and adoption of the Merger Agreement by the stockholders
of the Company.
 
     Board Representation.  The Merger Agreement provides that promptly upon the
purchase by the Purchaser of at least a majority of the outstanding Shares, the
Purchaser will be entitled to designate such number of directors, rounded up to
the next whole number, but in no event more than one less than the total number
of directors on the Board of Directors of the Company as will give the
Purchaser, subject to compliance with Section 14(f) of the Exchange Act,
representation on the Board of Directors of the Company equal to the product of
the number of directors on the Board of Directors of the Company and the
percentage
 
                                       13
<PAGE>   16
 
that such number of Shares so purchased bears to the number of Shares
outstanding, and, subject to the exercise by the Board of Directors of the
Company of its fiduciary duties to the stockholders of the Company under the
GCL, the Company shall, upon request by the Purchaser, promptly increase the
size of the Board of Directors of the Company or exercise its best efforts to
secure the resignations of such number of directors as is necessary to enable
the Purchaser's designees to be elected to the Board of Directors of the Company
and shall cause the Purchaser's designees to be so elected; provided, however,
that in the event that Purchaser's designees are appointed or elected to the
Board of Directors, until the Effective Time (as defined in the Merger
Agreement) the Board of Directors shall have at least three directors who were
directors on the date of the Merger Agreement designated by the Company and who
are not designees, stockholders or affiliates of Parent or the Purchaser (the
"Independent Directors"); provided further, that in such event, if the number of
Independent Directors shall be reduced to below three for any reason whatsoever,
any remaining Independent Directors (or Independent Director, if there shall be
only one remaining) shall be entitled to designate persons to fill such
vacancies who shall be deemed to be Independent Directors for purposes of the
Merger Agreement or, if no Independent Directors then remain, the other
directors shall in good faith designate three persons to fill such vacancies who
shall be independent in fact and, in any event, shall not be stockholders,
affiliates or agents of Parent or the Purchaser and such persons shall be deemed
to be Independent Directors for purposes of the Merger Agreement. At the
reasonable request of the Purchaser, the Company shall take, at its expense, all
action necessary to effect any such election, including mailing to its
stockholders the information required by Section 14(f) of the Exchange Act and
Rule 14f-1 promulgated thereunder.
 
     The Merger.  The Merger Agreement provides that upon the terms and subject
to the provisions thereof, and in accordance with the relevant provisions of the
GCL, the Purchaser shall be merged with and into the Company as soon as
practicable following the satisfaction or waiver, if permissible, of the
conditions described below under "Conditions to the Merger." Following the
Merger, the Company shall continue as the surviving corporation (the "Surviving
Corporation") under the name "AMBAR, Inc." and shall continue its existence
under the laws of Delaware, and the separate corporate existence of the
Purchaser shall cease. The Merger Agreement further provides that (i) the
certificate of incorporation and the bylaws of the Surviving Corporation after
the Effective Time shall be as set forth in Exhibit B to the Merger Agreement,
(ii) the directors of the Purchaser immediately prior to the Effective Time
shall become the directors of the Surviving Corporation until their successors
are duly elected and qualified, and (iii) the officers of the Company
immediately prior to the Effective Time shall become the officers of the
Surviving Corporation until their successors are duly elected and qualified.
 
     Consideration to be Paid in the Merger.  The Merger Agreement provides that
at the Effective Time, each Share outstanding immediately prior to the Effective
Time (other than Shares owned by the Purchaser or any affiliate of the Purchaser
or held in the treasury of the Company or by any subsidiary of the Company, all
of which shall be cancelled and no payment shall be made with respect thereto,
and other than Dissenting Shares (as defined below under "Dissenters' Rights"))
shall, by virtue of the Merger and without any action on the part of the holder
thereof, be converted into a right to receive in cash an amount per Share equal
to the highest price that may be paid pursuant to the Offer, payable to the
holder thereof, without interest thereon, upon surrender of the certificate
representing such Share. Each share of common stock of the Purchaser issued and
outstanding immediately prior to the Effective Time will by virtue of the Merger
and without any action on the part of the holder thereof, be converted into and
exchanged for one share of common stock of the Surviving Corporation.
 
     Company Options and Warrants.  All Options pursuant to the Company's Stock
Option Plans shall, in accordance with such Plans, become exercisable upon
consummation of the Merger and the Shares received upon such exercise shall be
convertible in the Merger into cash in an amount equal to the Offer Price, less
required withholding taxes. The Merger Agreement provides that the Company will
take reasonable actions to effect the provisions of the Merger Agreement related
to the Options, including using reasonable efforts to obtain the written
acknowledgment of each holder of Options that the payment of such amount will
fully discharge the Company's obligations with respect thereto. Subsequent to
the Effective Time, Options will no longer be issued under the Company's Stock
Option Plans.
 
     Upon the Merger, the Warrants issued pursuant to the Warrant Agreement
dated December 12, 1991 will be exercisable only for the Merger consideration.
 
                                       14
<PAGE>   17
 
     Stockholders' Meeting.  In the Merger Agreement, the Company has agreed, if
required by applicable law in order to consummate the Merger, in accordance with
applicable law, to duly call, give notice of, convene and hold a special meeting
of its stockholders as soon as practicable following the expiration of the Offer
for the purpose of adopting the Merger Agreement. At any such meeting, all
Shares acquired by Parent, the Purchaser or any other affiliate of Purchaser
pursuant to the Offer, the Stockholder Agreements or otherwise will be voted in
favor of the Merger. The Board of Directors of the Company will recommend that
stockholders of the Company vote in favor of the approval and adoption of the
Merger Agreement.
 
     Dissenters' Rights; Rule 13e-3.  Holders of Shares will not have appraisal
rights as a result of the Offer. If the Merger is consummated, however, persons
who hold Shares at such time will have the right to appraisal of their Shares in
accordance with Section 262 of the GCL. Such appraisal rights, if the statutory
procedures are complied with, would result in a judicial determination of the
"fair value" of the Shares owned by such holders. Any such judicial
determination of the fair value of the Shares could be based upon considerations
other than or in addition to the price paid in the Offer and the Merger and the
market value of the Shares, including asset values, the investment value of the
Shares and any other valuation considerations generally accepted in the
investment community. The value so determined for Shares could be more or less
than the value of the consideration per Share to be paid pursuant to the Offer
or the Merger and payment of such consideration would take place subsequent to
payment pursuant to the Offer.
 
     Several recent decisions by the Delaware courts have held that a
controlling stockholder of a corporation involved in a merger has a fiduciary
duty to the other stockholders which requires that the merger be fair to such
other stockholders. In determining whether a merger is fair to minority
stockholders, the Delaware courts have considered, among other things, the type
and amount of consideration to be received by the stockholders and whether there
was fair dealing among the parties. The Delaware Supreme Court indicated in
Weinberger v. UOP, Inc. and Rabkin v. Philip A. Hunt Chemical Corp. that
ordinarily the remedy available to stockholders in a merger that is found not to
be "fair" to minority stockholders is the right to appraisal described above or
a damages remedy based on essentially the same principles.
 
     If the Purchaser purchases Shares pursuant to the Offer, and the Merger or
another merger or other business combination is consummated more than one year
after the completion of the Offer, or if such a merger or other business
combination were to provide for the payment of consideration less than that paid
pursuant to the Offer, compliance by the Purchaser with Rule 13e-3 under the
Exchange Act would be required, unless the Shares were to be registered under
the Exchange Act prior to such transaction. See Section 12. Rule 13e-3 would
require, among other things, that certain financial information concerning the
Company and certain information relating to the fairness of the proposed
transaction and the consideration offered to minority stockholders therein be
filed with the Commission and disclosed to minority stockholders prior to
consummation of the transaction.
 
     Representations and Warranties.  The Merger Agreement contains
representations and warranties by the Company, relating to, among other things,
(i) the organization of the Company and its subsidiaries and other corporate
matters, (ii) the capital structure of the Company, (iii) the authorization,
execution, delivery and consummation of the transactions contemplated by the
Merger Agreement, (iv) the absence of certain changes and events, (v) documents
filed by the Company with the Commission and the accuracy of the information
contained therein, (vi) the accuracy of the information contained in documents
filed with the Commission in connection with the Offer and the Merger, (vii)
consents and approvals, (viii) the non-existence of undisclosed brokerage fees
and commissions, (ix) the existence of employment agreements, (x) litigation,
(xi) the absence of undisclosed liabilities, (xii) compliance with laws and
agreements, (xiii) environmental matters, (xiv) tax and labor matters and (xv)
matters relating to the Employee Retirement Income Security Act of 1974, as
amended, and the rules and regulations promulgated thereunder. In the Merger
Agreement, the Parent and the Purchaser have made certain representations and
warranties to the Company relating to, among other things, (a) the comparable
matters with respect to the Parent and the Purchaser set forth in clauses (i),
(iii), (iv), (vii), (viii) and (x) above, (b) the sufficiency of funds to be
available to purchase Shares pursuant to the Offer and to pay all fees and
expenses related to the transactions contemplated by the Merger and to pay the
related fees and expenses of Parent and the Purchaser and (c) the interim
operations of the Purchaser. The representations and warranties contained in the
Merger Agreement
 
                                       15
<PAGE>   18
 
are qualified in certain respects by materiality standards, are given only as of
the date of execution of the Merger Agreement, and do not survive beyond the
Effective Time.
 
     Agreements with Respect to the Conduct of Business Pending the Merger.  The
Merger Agreement provides that, except as specifically contemplated by the
Merger Agreement, during the period from the date of the Merger Agreement to the
earlier of the Effective Time or earlier termination of the Merger Agreement,
unless Parent shall otherwise agree in writing, the Company will, and will cause
each of its subsidiaries to, (i) conduct their respective businesses only in,
and not take any action except in, the ordinary and usual course of business and
consistent with past practice, and use their best efforts to preserve intact
their respective business organizations and goodwill, keep available the
services of their respective present officers and key employees and preserve the
goodwill and business relationships with suppliers, distributors, customers and
others having business relationships with them. In addition, subject to certain
exceptions, during such period, the Company will not, and will not permit any of
its subsidiaries to (i) make or propose any change or amendment to their
respective certificate of incorporation or bylaws; (ii) split, combine or
reclassify their outstanding capital stock or declare, set aside or pay any
dividend or distribution payable in cash, stock, property or otherwise; (iii)
knowingly take any action which would result in a failure to maintain the
trading of Company common stock on the NASDAQ Stock Market; (iv) authorize the
issuance of, or issue, sell, pledge or dispose of, or agree to issue, sell,
pledge or dispose of, any additional shares of or any options, warrants or
rights of any kind to acquire any shares of, their capital stock of any class or
any debt or equity securities convertible into or exchangeable for such capital
stock; (v) sell (including, without limitation, by sale/leaseback), pledge,
dispose of, license or encumber any material assets (including, without
limitation, intellectual property), or any interests therein, other than in the
ordinary course of business and consistent with past practice; (vi) redeem,
purchase, acquire or offer to purchase or acquire any (x) shares of its capital
stock, other than in accordance with the governing terms of such securities or
(y) long-term debt, other than as required by the governing instruments relating
thereto; (vii) enter into any contract, agreement, commitment or arrangement
with respect to the foregoing clauses (iv) through (vi); (viii) except with the
prior written approval of Parent, adopt, enter into or amend any bonus, profit
sharing, compensation (except ordinary course salary adjustments consistent with
historic practice), severance, termination, stock option, pension, retirement,
deferred compensation, health care, change in control agreement, restricted
stock, employment or other employee benefit plan, agreement, trust, fund or
arrangement for the benefit or welfare of any employee, director, officer or
retiree, or increase in any manner the compensation or fringe benefits of any
director or officer or pay any benefit not required by any existing plan,
arrangement or contract (including, without limitation, the granting of stock
options, stock appreciation rights, shares of restricted stock or performance
units) or take any action or grant any benefit not expressly required under the
terms of any existing contracts, trusts, plans, funds or other such arrangements
or enter into any contract to do any of the foregoing, except as required to
comply with changes in applicable law occurring after the date of the Merger
Agreement; (ix) establish any new lines of credit or other credit facilities or
incur any indebtedness other than pursuant to existing credit facilities except
for trade liabilities incurred in the ordinary course of business or assume,
guarantee, endorse or otherwise become liable (whether directly, contingently or
otherwise) for the obligation of any other person except in the ordinary course
of business and consistent with past practice, or make any loans, advances or
capital contributions to, or investments (other than intercompany accounts and
short-term investments pursuant to customary cash management systems of the
Company in the ordinary course and consistent with past practices) in any other
person other than such of the foregoing as are made by the Company to or in a
wholly owned subsidiary of the Company; (x) acquire, or publicly propose to
acquire, all or any substantial part of the business and properties or capital
stock of any person not a party to the Merger Agreement, whether by merger,
purchase of assets, tender offer or otherwise; (xi) enter into or amend any
employment, severance, special pay arrangement with respect to termination of
employment or other similar arrangements or agreements with any directors,
officers or key employees; (xii) enter into any material arrangement, agreement
or contract with any third party (other than customers in the ordinary course of
business) which provides for an exclusive arrangement with that third party or
is substantially more restrictive on the Company or substantially less
advantageous to the Company than arrangements, agreements or contracts existing
on the date of the Merger Agreement; or (xiii) agree in writing, or otherwise,
to take any of the foregoing actions or any other action which would make any
representation or warranty contained in the
 
                                       16
<PAGE>   19
 
Merger Agreement untrue or incorrect in any material respect as of the time of
Closing (as defined in the Merger Agreement). In addition, the Company shall and
shall cause each of its subsidiaries to (i) confer on a regular and frequent
basis with one or more representatives of Parent to discuss operational matters
of materiality and the general status of ongoing operations; (ii) promptly
notify Parent of any significant changes in the business, financial condition or
results of operations of the Company or its subsidiaries taken as a whole; and
(iii) maintain with financially responsible insurance companies, insurance on
its tangible assets and its businesses in such amounts and against such risks
and losses as are consistent with past practice. In addition, the Company has
agreed to use its reasonable best efforts to (a) exempt the Company, the Offer,
the Stockholder Agreements and the Merger from the requirements of any state
takeover law by action of the Company's Board of Directors or otherwise and (b)
assist in any challenge by the Purchaser to the validity or applicability to the
Offer or the Merger of any state takeover law.
 
     No Solicitation.  The Merger Agreement provides that the Company shall not,
and shall not permit any of its subsidiaries and their respective officers,
directors, employees, representatives, agents or affiliates (including, without
limitation, any investment banker, attorney or accountant retained by the
Company or any of its subsidiaries) to, directly or indirectly, encourage,
solicit, initiate or participate in any way in any discussions or negotiations
with, or provide any non-public information to, or afford any access to the
properties, books or records of the Company or any of its subsidiaries, or
otherwise assist or facilitate any corporation, partnership, person or other
entity or group (other than Parent or Purchaser or any affiliate or associate of
Parent or Purchaser) concerning any Acquisition Transaction (as defined below);
provided, however, that the Board of Directors of the Company is not prohibited
from furnishing information to or entering into discussions or negotiations with
any person or entity that makes an unsolicited, written, bona fide proposal to
engage in an Acquisition Transaction if, and only to the extent that, (i) the
Board of Directors determines, after consultation with outside legal counsel,
that failure to take any such action would be inconsistent with its fiduciary
duties under the GCL and (ii) prior to taking such action, the Company receives
from such person or entity an executed confidentiality agreement on terms no
less favorable to the Company than the letter agreement dated April 23, 1996
between the Company and The Beacon Group; and provided, further, that the
Company or its Board of Directors shall not be prohibited from taking and
disclosing to the Company's stockholders a position with respect to a tender
offer by a third party pursuant to Rules 14d-9 and 14e-2(a) promulgated under
the Exchange Act. The Company has agreed to immediately notify Parent and the
Purchaser if any such information is requested from it or any such negotiations
or discussions are sought to be initiated with the Company and to immediately
communicate to Parent and the Purchaser the identity of such party and what
information is provided to such party. In addition, the Merger Agreement
requires the Company to cease and to cause its subsidiaries, affiliates and
their respective officers, directors, employees, representatives and agents to
immediately cease and cause to be terminated any existing activities,
discussions or negotiations with any parties other than Parent, the Purchaser or
any of their respective affiliates or associates conducted heretofore with
respect to any Acquisition Transaction. Except as is required in the exercise of
the fiduciary duties of the Board of Directors of the Company in the written
opinion of outside counsel to the Company, the Company agrees not to release any
third party from any confidentiality or standstill agreement to which the
Company is a party without Parent's prior written consent and to take all steps
deemed necessary or appropriate by Parent to enforce to the fullest extent
possible all such agreements. The term "Acquisition Transaction" means any
tender offer or exchange offer, any merger, consolidation, liquidation,
dissolution, recapitalization, reorganization or other business combination, any
acquisition, sale or other disposition of all or a substantial portion of the
assets or securities of the Company or any other similar transaction involving
the Company, its securities or any of its material subsidiaries or divisions.
 
     Conditions to the Merger.  The respective obligations of each party to
effect the Merger are subject to the satisfaction or waiver, where permissible,
prior to the Effective Time, of the following conditions: (a) the Merger
Agreement shall have been adopted by the requisite vote of the stockholders of
the Company in accordance with applicable law, if such vote is required by
applicable law; (b) no statute, rule, regulation, executive order, decree or
injunction shall have been enacted, entered, promulgated or enforced by any
federal or state court or governmental authority which is in effect and has the
effect of making the acquisition of Shares pursuant to the Merger illegal or
otherwise prohibiting the consummation of the Merger; and (c) the
 
                                       17
<PAGE>   20
 
waiting period, if any, applicable to the consummation of the Merger under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act")
shall have expired or been terminated.
 
     The obligations of Parent and the Purchaser to effect the Merger are also
subject to each of the following conditions: (a) the Company and each of its
subsidiaries shall have performed in all material respects each obligation and
covenant to be performed by it under the Merger Agreement on or prior to the
Effective Time and (b) the representations and warranties of the Company set
forth in the Merger Agreement shall be true and correct except where the failure
of such representations and warranties to be so true and correct does not have a
Material Adverse Effect on the Company.
 
     The obligation of the Company to effect the Merger is also subject to each
of the following conditions: (a) each of Parent and the Purchaser shall have
performed in all material respects each obligation to be performed by it under
the Merger Agreement on or prior to the Effective Time and (b) the
representations and warranties of Parent and the Purchaser set forth in the
Merger Agreement shall be true and correct in all material respects at and as of
the Effective Time as if made at and as of such time, except as affected by
transactions contemplated or permitted by the Merger Agreement and except to the
extent that any such representation or warranty is made as of a specified date,
in which case such representation or warranty shall have been true and correct
as of such date.
 
     For purposes of the Merger Agreement, the term Material Adverse Effect has
been defined as a material adverse effect on (i) the business, operations,
condition (financial or otherwise), results of operations or prospects of the
Company and its subsidiaries, taken as a whole, (ii) the value, condition or
marketability of any material assets of the Company and its subsidiaries, taken
as a whole or (iii) the ability of the Company and its subsidiaries to perform
on a timely basis its obligations under any material contract or to exercise or
enforce any of its material rights, powers or remedies under any material
contract; provided, however, that the parties agree that a Material Adverse
Effect shall not be deemed to have occurred on account of any single event or
condition that results in, or is reasonably likely to result in, or any group of
events or conditions that in the aggregate result in, or are reasonably likely
to result in, a loss, cost, penalty or diminution in value in the business,
operations, condition (financial or otherwise), results of operations or
prospects of the Company and its subsidiaries that is less than $750,000; and
provided, further, that no prospective change in the business, operations,
condition (financial or otherwise), results of operations or prospects of the
Company and its subsidiaries on account of general economic conditions or local,
regional, national or international industry conditions shall be deemed to
constitute a Material Adverse Effect.
 
     Indemnification and Insurance.  From and after the earlier of the Control
Date (as defined herein) or the Effective Time, Parent shall cause the Company
to maintain all rights to indemnification now existing in favor of the current
or former directors, officers, employees, fiduciaries and agents of the Company
and its subsidiaries as provided in their respective certificates of
incorporation or bylaws, with such rights to survive the Offer and Merger and
continue in full force and effect in accordance with their respective terms for
a period of not less than six years from the Effective Time, provided, however,
that in the event any claim or claims are asserted or made within such six-year
period, all such rights shall continue until final disposition of any such claim
or claims. In addition, the Merger Agreement requires Parent, from and after the
earlier of the Control Date or the Effective Time, to cause the Company to
maintain in effect for not less than three years after the Effective Time the
current policies of directors' and officers' liability insurance maintained by
the Company and its subsidiaries (or a substitute policy providing at least the
same coverage and containing terms and conditions that are no less advantageous)
to the extent available on commercially reasonable terms; provided, that Parent
and the Company shall not be required to pay premiums for such insurance
policies in excess of 133% of the premiums currently paid by the Company; and
provided, further, that if Parent or the Company is unable to maintain or obtain
such insurance coverage as required by the Merger Agreement, the Company will
maintain or obtain, for the remainder of the three-year period, the most
favorable coverage available on commercially reasonable terms for premiums equal
to 133% of the premiums currently paid by the Company. Pursuant to the Merger
Agreement, from and after the earlier of the Control Date or the Effective Time,
Parent agrees to, and agrees to cause the Company to, indemnify, defend, hold
harmless and reimburse each current and former officer or director of the
Company or any of its subsidiaries (the "Indemnified Parties") for, from and
against all losses, claims, damages, costs, expenses (including the
 
                                       18
<PAGE>   21
 
reasonable fees and expenses of attorneys and other professional advisers),
liabilities, judgments, fines and amounts paid in settlement ("Indemnified
Liabilities") incurred directly or indirectly in connection with any threatened
or actual claim, action, suit, proceeding or investigation, whether civil,
criminal or administrative, based in whole or in part on or arising in whole or
in part out of the fact that such person is or was a director or officer of the
Company or any of its subsidiaries, or is or was serving at the request of the
Company as a director or officer of another corporation, partnership, joint
venture or other enterprise, whether pertaining to any matter occurring,
asserted or claimed prior to, on, or after the Effective Time; provided,
however, that no Indemnified Party shall be entitled to indemnification
hereunder for any wrongful misconduct of such Indemnified Party. Without
limiting the foregoing, in the event any such claim, action, suit, proceeding or
investigation is brought against any Indemnified Party (whether arising before
or after the Effective Time), upon delivery to Parent of an undertaking in the
form described in Section 145(c) of the GCL, (i) the Indemnified Parties may
retain counsel mutually satisfactory to them and Parent; (ii) Parent shall pay,
or cause the Company to pay, all reasonable fees and expenses of such counsel
for the Indemnified Parties promptly as statements therefor are received; and
(c) Parent shall use, or cause the Company to use, its best efforts to assist in
the vigorous defense of any such matter; provided, however, that neither Parent
nor the Company shall be liable for any settlement of any claim effected without
Parent's written consent, which consent, however, shall not be unreasonably
withheld. Any Indemnified Party wishing to claim indemnification under this
provision of the Merger Agreement, upon learning of any such claim, action,
suit, proceeding or investigation, shall notify Parent (but the failure so to
notify Parent shall not relieve it from any liability that it may have except to
the extent such failure materially prejudices such party), and shall deliver to
Parent the undertaking described in Section 145(e) of the GCL. The terms of the
indemnification provision of the Merger Agreement, which shall survive the
consummation of the Offer and the Merger, are intended to be for the benefit of,
and shall be enforceable by, each Indemnified Party, his heirs and his
representatives. In the event Parent, the Surviving Corporation or any of their
successors or assigns (i) merges, consolidates or combines with any other person
and shall not be the continuing or surviving corporation or entity, or (ii)
transfers all or substantially all of its properties and assets to any person,
then, and in each such case, proper provision shall be made so that the
successors and assigns of such corporation assume the obligations set forth in
the indemnification provision of the Merger Agreement. The term "Control Date"
means the earliest date on which the Company shall have elected such number of
directors designated by the Purchaser pursuant to the Merger Agreement as is
equal to at least a majority of the total number of directors on the Board of
Directors of the Company.
 
     Termination.  The Merger Agreement may be terminated and the Merger
contemplated thereby may be abandoned at any time notwithstanding approval
thereof by the stockholders of the Company, but prior to the Effective Time: (i)
by mutual written consent duly authorized by the Boards of Directors of the
Company (excluding any designee of Parent or an affiliate of Parent) and the
Purchaser and by the General Partner of Parent; (ii) by Parent or the Company
(excluding any designee of Parent or an affiliate of Parent) if the Effective
Time shall not have occurred on or before December 31, 1996; (iii) by Parent or
the Company if any federal or state court of competent jurisdiction or other
federal or state governmental body shall have issued an order, decree or ruling,
or taken any other action restraining, enjoining or otherwise prohibiting the
Offer or the Merger and such order, decree, ruling or other action shall have
become final and nonappealable; (iv) by the Company if the Offer has not been
made in accordance with the terms of the Merger Agreement; (v) by the Company if
no Shares have been purchased under the Offer on or before December 31, 1996;
(vi) by the Company if Parent or the Purchaser shall be in material breach of
any of the representations and warranties (except such breaches that are cured
prior to the expiration of the Offer) of Parent or the Purchaser set forth in
the Merger Agreement or either Parent or the Purchaser shall have failed in any
material respect to perform any material obligation or covenant (except such
failures that are cured prior to the expiration of the Offer) required by the
Merger Agreement to be performed by it; (vii) by Parent if the Company shall be
in breach of any of the representations and warranties (except such breaches
that are cured prior to the expiration of the Offer and such breaches that are
not likely to have a material adverse effect on the Company) of the Company set
forth in the Merger Agreement or the Company shall have failed in any material
respect to perform any material obligation or covenants (except such failures
that are cured prior to the expiration of the Offer and such failures that are
not likely to have a Material Adverse Effect on the Company) required by the
Merger
 
                                       19
<PAGE>   22
 
Agreement to be performed by it; (viii) by Parent, (x) if the Board of Directors
or any committee thereof of the Company withdraws or modifies or amends in a
manner adverse to Parent or the Purchaser its authorization, approval or
recommendation of the Offer or the Merger or the Merger Agreement or shall have
resolved to do any of the foregoing or shall have failed to have reiterated its
recommendation within five business days of any written request by Parent or the
Purchaser therefor or (y) if the Company or any of its subsidiaries (or the
Board of Directors or any committee thereof of the Company) shall have approved,
recommended, authorized, proposed, publicly announced its intention to enter
into or filed a Schedule 14D-9 not opposing any Acquisition Transaction with a
party other than Parent, Purchaser or any of their affiliates; (ix) by Parent if
the Company or any of its subsidiaries, or any of their respective officers,
directors, employees, representatives, agents or affiliates, provides or affords
access to any non-public information regarding the Company, other than
Non-Proprietary Information (defined below), to any corporation, partnership,
person or other entity or group (other than Parent or the Purchaser or any
affiliate or associate of Parent or the Purchaser) in connection with any actual
or proposed Acquisition Transaction, whether or not permitted by the Merger
Agreement; or (x) by the Company in the event the Company has received from a
third party an unsolicited, written, bona fide proposal to engage in an
Acquisition Transaction and, as a result of such proposal, the Board of
Directors of the Company or the Independent Committee modifies, in a manner
adverse to Parent or the Purchaser, or withdraws its approval or recommendation
of, the Offer or the Merger, so long as the Board of Directors or such
committee, after consultation with and based upon the advice of outside legal
counsel, determines in good faith that failure to take any such action would be
inconsistent with the compliance by the Board of Directors or such committee
with its fiduciary duties to the stockholders of the Company under the GCL.
"Non-Proprietary Information" means (a) all reports filed by the Company with
the Commission pursuant to the Exchange Act, including the exhibits thereto, (b)
all registration statements and other documents filed by the Company with the
Commission pursuant to the Securities Act of 1933, as amended, including the
exhibits thereto and any current drafts of any registration statements not yet
filed, (c) any information regarding the Company's compliance with environmental
laws, (d) information regarding the Company's ownership of its material
properties reflected on its most recent balance sheet included in a report filed
with the SEC pursuant to the Exchange Act, and (e) any other information that
the Company and Parent may mutually agree.
 
     In the event of any termination and abandonment of the Merger Agreement
pursuant to any of the provisions above, the Merger Agreement shall forthwith
become void and have no effect, except for the provisions pertaining to the
payment of termination expenses and fees, the parties' entitlement to an
injunction to prevent a breach of the Merger Agreement and the payment of
expenses without any liability on the part of any party or its directors,
officers, stockholders, employees, agents, consultants or representatives,
except that no party to the Merger Agreement will be relieved from liability for
any breach of the Merger Agreement.
 
     Whether or not the Offer or Merger is consummated, all costs and expenses
incurred in connection with the Offer, the Merger Agreement and the transactions
contemplated thereby will be paid by the party incurring such costs and
expenses, provided, however, that in the event of a termination of the Merger
Agreement pursuant to sections (vii) through (x) above, and within twelve months
from the date of such termination an Acquisition Transaction is consummated
other than with Parent, the Purchaser or any of their affiliates or if a person,
entity or group other than Mr. Moity, Parent, the Purchaser or any of their
affiliates acquires more than 50% of the outstanding Shares or assets of the
Company or Mr. Moity acquires any additional Shares or assets of the Company,
the Company will pay Parent a fee equal to $3,300,000 payable in immediately
available funds on the second business day following such event. In the event
the Merger Agreement is terminated, unless such termination results solely from
a material breach by Parent or the Purchaser of their obligations under the
Merger Agreement, the Company shall promptly at such time assume and pay (in
addition to any other amounts payable), or reimburse Parent for, reasonable
documented out-of-pocket fees and expenses actually incurred by or on behalf of
Parent and Purchaser in connection with the transactions contemplated hereby,
including all legal, investment banking, accounting, printing and other fees and
expenses whether incurred prior to or following the execution of or the
termination of the Merger Agreement.
 
     Stockholder Agreements.  The following summary of the Stockholder
Agreements, copies of which are filed as exhibits to the Schedule 14D-1, is
qualified by reference to the Stockholder Agreements.
 
                                       20
<PAGE>   23
 
     The Parent has entered into a Stockholder Agreement with each of Randolph
M. Moity, Sr. and Kenneth J. Boutte (collectively the "Principal Stockholders"),
which grant Parent and the Purchaser certain rights with respect to their
Shares, representing in the aggregate approximately 56% of the Shares
outstanding on the date of the Merger Agreement owned by the Principal
Stockholders. The principal terms of the Stockholder Agreements are as follows.
 
     Sale of Shares.  The Stockholder Agreements provide that each Principal
Stockholder will sell to the Purchaser, and the Purchaser will purchase, all
Shares of the Principal Stockholders at a price per share equal to the price
paid for Shares in the Offer; provided that such obligation to sell and such
obligation to purchase is subject to Purchaser having accepted Shares for
payment under the Offer. The Principal Stockholder may tender Shares into the
Offer and the Purchaser may direct that the Principal Stockholder tender such
Shares. Any Shares of a Principal Stockholder not purchased in the Offer will be
purchased at the same time a payment is made under the Offer. In addition, the
Stockholder Agreement with Mr. Moity provides that the Purchaser may purchase up
to 100,000 of his Shares by delivery of a promissory note in the amount of the
purchase price therefor. The principal of this note, together with interest
accrued thereon, will be paid at the earlier of (i) the end of the primary term
of the Employment Agreement or (ii) two months following the date Mr. Moity is
replaced as the Chief Executive Officer, and amounts due under the note may be
offset against any failure by Mr. Moity to satisfy his obligations under the
Employment Agreement (as hereinafter defined).
 
     Irrevocable Proxy.  Pursuant to the terms of each Stockholder Agreement,
each of the Principal Stockholders irrevocably granted to the Parent such
individual's proxy for and in the name, place and stead of the Principal
Stockholder, to vote the Principal Stockholder's Shares, or grant a consent or
approval in respect of such Shares against any Competing Transaction (as
hereafter defined). The term "Competing Transaction" shall mean (i) any merger
agreement or merger (other than the Merger Agreement and the Merger),
consolidation, combination, sale of substantial assets, reorganization, joint
venture, recapitalization, dissolution, liquidation or winding up of or by the
Company and (ii) any amendment of the Company's Certificate of Incorporation or
By-laws or other proposal or transaction involving the Company or any of its
subsidiaries which amendment or other proposal or transaction would in any
manner impede, frustrate, prevent or nullify, or result in a breach of any
covenant, representation or warranty or of any other obligation or agreement of
the Company under or with respect to, the Offer, the Merger, the Merger
Agreement or any of the other transactions contemplated by the Merger Agreement.
 
     Other Provisions.  The Stockholder Agreements contain certain
representations and warranties, and restrict the Principal Stockholders' ability
to transfer their Shares or take any action that would in any way restrict,
limit or interfere with the performance of the Principal Stockholders'
obligations under the Stockholder Agreements the transactions contemplated
thereby. The Principal Stockholders shall not, and shall not permit any
investment banker, attorney or other adviser or representative of the Principal
Stockholders to, take any action that may lead to any takeover proposal.
 
     Termination.  The Stockholder Agreements, and all rights and obligations of
the Parent and the Principal Stockholders, shall terminate upon the first to
occur of (i) the Effective Time of the Merger or (ii) the termination of the
Merger Agreement except under certain circumstances.
 
     Employment Agreement.  Parent has asked Randolph M. Moity, Sr., a Principal
Stockholder and currently the Chairman, Chief Executive Officer and President of
the Company, to continue to serve in such position for the Company and Surviving
Corporation, with his compensation consisting of a $300,000 annual performance
bonus, until such time as a suitable replacement may be found and thereafter to
resign his position at the request of the Company. The term of Mr. Moity's
Employment Agreement will begin the date his Shares are purchased in accordance
with his Stockholder Agreement and run for a period of 18 months, which term may
be continued thereafter only if agreed to in writing by both parties. Mr. Moity
has agreed to refrain from competing, directly or indirectly, with the Surviving
Corporation and its affiliates, while employed and for two years thereafter.
During employment and for two years thereafter, Mr. Moity will not solicit away
employees or customers of the Company. The Employment Agreement will replace Mr.
Moity's current employment agreement with the Company. The foregoing is a
summary of the Employment Agreement, a
 
                                       21
<PAGE>   24
 
copy of which is filed as an exhibit to the Schedule 14D-1, and is qualified by
reference to the Employment Agreement.
 
12. EFFECT OF THE OFFER ON THE MARKET FOR SHARES; STOCK EXCHANGE LISTING;
    REGISTRATION UNDER THE EXCHANGE ACT.
 
     The purchase of Shares pursuant to the Offer will reduce the number of
Shares that might otherwise trade publicly and the number of holders of Shares,
which could adversely affect the liquidity and market value of the remaining
Shares, if any, held by stockholders other than the Purchaser. The Purchaser
cannot predict whether the reduction in the number of Shares that might
otherwise trade publicly would have an adverse or beneficial effect on the
market price for, or marketability of, the Shares or whether such reduction
would cause future market prices to be greater or less than the Offer price.
 
     The Shares are currently listed and traded on the NASDAQ National Market,
which constitutes the principal trading market for the Shares. Depending upon
the number of Shares purchased pursuant to the Offer, the Shares may no longer
meet the requirements for continued inclusion in the NASDAQ National Market,
which require that an issuer have at least 200,000 publicly held shares, held by
at least 400 shareholders or 300 shareholders of round lots, with a market value
of at least $1,000,000 and have net tangible assets of at least $1,000,000,
$2,000,000 or $4,000,000 depending on profitability levels during the issuer's
four most recent fiscal years. If these standards are not met, the Shares might
nevertheless continue to be included in the NASDAQ Stock Market (the "NASDAQ
Stock Market") with quotations published in the NASDAQ "additional list" or in
one of the "local lists," but if the number of holders of the Shares were to
fall below 300, or if the number of publicly held Shares were to fall below
100,000 or there were not at least two registered and active market makers for
the Shares, the NASD's rules provide that the Shares would no longer be
"qualified" for NASDAQ Stock Market reporting and the NASDAQ Stock Market would
cease to provide any quotations. Shares held directly or indirectly by
directors, officers or beneficial owners of more than 10% of the Shares are not
considered as being publicly held for this purpose. According to information
provided by the Company, as of July 1, 1996 there were approximately 53 holders
of record of Shares and 3,704,032 Shares were outstanding. If, as a result of
the purchase of Shares pursuant to the Offer or otherwise, the Shares no longer
meet the requirements for continued inclusion in the NASDAQ National Market or
in any other tier of the NASDAQ Stock Market and the Shares are no longer
included in the NASDAQ National Market or in any other tier of the NASDAQ Stock
Market, as the case may be, the market for Shares could be adversely affected.
 
     In the event that the Shares no longer meet the requirements for continued
inclusion in any tier of the NASDAQ Stock Market, it is possible that the Shares
would continue to trade in the over-the-counter market and that price quotations
would be reported by other sources. The extent of the public market for the
Shares and the availability of such quotations would, however, depend upon the
number of holders of Shares remaining at such time, the interests in maintaining
a market in Shares on the part of securities firms, the possible termination of
registration of the Shares under the Exchange Act, as described below, and other
factors.
 
     The Shares are currently "margin securities" under the regulations of the
Board of Governors of the Federal Reserve System (the "Federal Reserve Board"),
which has the effect, among other things, of allowing brokers to extend credit
on the collateral of the Shares. Depending upon factors similar to those
described above regarding listing and market quotations, following the Offer it
is possible that the Shares would no longer constitute "margin securities" for
the purposes of the margin regulations of the Federal Reserve Board and
therefore could no longer be used as collateral for loans made by brokers.
 
     The Shares are currently registered under the Exchange Act. Registration of
the Shares under the Exchange Act may be terminated upon application of the
Company to the Commission if the Shares are not listed on a national securities
exchange or quoted on NASDAQ and there are fewer than 300 record holders of
 
                                       22
<PAGE>   25
 
the Shares. Termination of registration of the Shares under the Exchange Act
would reduce substantially the information required to be furnished by the
Company to its stockholders and to the Commission and would make certain
provisions of the Exchange Act, such as the short-swing profit recovery
provisions of Section 16(b), the requirement of furnishing a proxy statement in
connection with stockholders' meetings pursuant to Section 14 (a) and the
requirements of Rule 13e-3 under the Exchange Act with respect to "going
private" transaction, no longer applicable to the Company. Furthermore, if the
Purchaser acquires a substantial number of Shares or the registration of the
Shares under the Exchange Act were to be terminated, the ability of "affiliates"
of the Company and persons holding "restricted securities" of the Company to
dispose of such securities pursuant to Rule 144 under the Securities Act may be
impaired or eliminated. If registration of the Shares under the Exchange Act
were terminated prior to the consummation of the Merger, the Shares would no
longer be "margin securities" or be eligible for NASDAQ reporting. It is the
present intention of the Purchaser to seek to cause the Company to make an
application for termination of registration of the Shares as soon as possible
following the Offer if the requirements for termination of registration are met.
 
     If registration of the Shares is not terminated prior to the Merger, then
the Shares will be delisted from the NASDAQ National Market and the registration
of the Shares under the Exchange Act will be terminated following the
consummation of the Merger.
 
13. DIVIDENDS AND DISTRIBUTIONS.
 
     Pursuant to the terms of the Merger Agreement, the Company is prohibited
from taking any of the actions described in the two immediately succeeding
paragraphs, and nothing herein shall constitute a waiver by the Purchaser or
Parent of any of its rights under the Merger Agreement or a limitation of
remedies available to the Purchaser or Parent for any breach of the Merger
Agreement, including termination thereof.
 
     If, on or after July 1, 1996, the Company should, except as permitted under
the Merger Agreement, (i) split or combine the Shares, or otherwise reclassify
or change the Shares or its capitalization, (ii) issue, sell or pledge any
Shares, shares of any other class of capital stock, other securities or any
securities convertible into or exchangeable for, or rights, warrants or options,
conditional or otherwise, to acquire, any of the foregoing (other than Shares
issued or sold upon the exercise (in accordance with the present terms thereof)
of Company Options or Warrants outstanding on July 1, 1996), or (iii) acquire or
redeem currently outstanding Shares or otherwise cause a reduction in the number
of outstanding Shares, then, without prejudice to the Purchaser's rights under
Sections 1 and 14, the Purchaser, in its sole discretion (subject to the terms
of the Merger Agreement), may make such adjustments as it deems appropriate in
the purchase price and other terms of the Offer and the Merger, including,
without limitation, the amount and type of securities offered to be purchased.
 
     If, on or after July 1, 1996, the Company should, except as permitted under
the Merger Agreement, declare or pay any dividend on the Shares or make any
distribution (including, without limitation, the issuance of additional Shares
pursuant to a stock dividend or stock split, the issuance of other securities or
the issuance of rights, warrants or options to acquire any securities) with
respect to the Shares that is payable or distributable to stockholders of record
on a date prior to the transfer of the Shares purchased pursuant to the Offer to
the name of the Purchaser or its nominee or transferee on the Company's stock
transfer records, then, without prejudice to the Purchaser's rights under
Sections 1 and 14, (i) the purchase price per Share payable by the Purchaser
pursuant to the Offer may, in the sole discretion of Purchaser, be reduced by
the amount of any such cash dividend or cash distribution and (ii) any such
non-cash dividend, distribution or right to be received by the tendering
stockholders will (x) be received and held by the tendering stockholders for the
account of the Purchaser and will be required to be promptly remitted and
transferred by each tendering stockholder to the Depositary for the account of
the Purchaser, accompanied by appropriate documentation of transfer, or (y) at
the direction of the Purchaser, be exercised for the benefit of the Purchaser,
in which case the proceeds of such exercise will promptly be remitted to the
Purchaser. Pending such remittance and subject to applicable law, the Purchaser
will be entitled to all rights and privileges as owner of any such non-cash
dividend, distribution, right or proceeds and may withhold the entire purchase
price or deduct from the purchase price the amount or value thereof, as
determined by the Purchaser in its sole discretion.
 
                                       23
<PAGE>   26
 
14. CONDITIONS TO THE OFFER.
 
     Notwithstanding any other provisions of the Offer, the Purchaser shall not
be required to accept for payment, purchase or pay for any Shares tendered, and
may, subject to the terms of the Merger Agreement, amend the Offer and may
postpone the acceptance for payment of and payment for Shares, if (i) as of the
Expiration Date of the Offer, there shall not have been validly tendered and not
withdrawn pursuant to the Offer a number of Shares such that, upon consummation
of the Offer, Purchaser and its affiliates will beneficially own in the
aggregate not less than 90% of the Shares outstanding on a Fully Diluted Basis,
(ii) the applicable waiting period under the HSR Act, if any, shall not have
expired or been terminated, or (iii) at any time on or after December 31, 1996
and before the time of payment for any such Shares (whether or not any Shares
have theretofore been accepted for payment or paid for pursuant to the Offer)
any of the following conditions exist or shall occur and remain in effect:
 
          (a) there shall have occurred and be in effect (i) any general
     suspension of trading in, or limitation on prices for, securities on the
     New York Stock Exchange or in the NASDAQ Stock Market which has remained in
     effect for five consecutive business days, (ii) a declaration of a banking
     moratorium or any suspension of payments in respect of banks in the United
     States, (iii) any material limitation (whether or not mandatory) by any
     governmental authority on the extension of credit by lending institutions,
     or (iv) in the case of any of the foregoing existing at the time of the
     commencement of the Offer a material acceleration or worsening thereof; or
 
          (b) an order shall have been entered in any action or proceeding
     before any United States federal or state court or governmental agency or
     other United States regulatory or administrative agency or commission, or a
     preliminary or permanent injunction by a United States court of competent
     jurisdiction (collectively, a "Governmental Action") shall have been issued
     and remain in effect, which would have the effect of (i) making the
     purchase of, or payment for, some or all of the Shares pursuant to the
     Offer or the Merger Agreement illegal, (ii) otherwise preventing
     consummation of the Merger, (iii) requiring the divestiture by Parent or
     any of its subsidiaries or affiliates of any Shares, or the divestiture by
     Parent of all or a material portion of its business, assets or property, or
     (iv) otherwise having a Material Adverse Effect (as defined in the Merger
     Agreement) on Parent or the Company; provided, however, that for purposes
     of this clause (b)(iv), to the extent that any order or preliminary or
     permanent injunction relates to the stock purchases as contemplated by the
     Stockholder Agreements, such order or injunction shall not be deemed to
     have a Material Adverse Effect on either Parent or the Company; or
 
          (c) the Merger Agreement shall have been terminated in accordance with
     its terms; or
 
          (d) the Company shall have breached in any material respect any of the
     representations and warranties of the Company set forth in the Merger
     Agreement (other than any matters that, in the aggregate, do not have a
     Material Adverse Effect on the Company) or the Company shall have failed in
     any material respect to perform any material obligation or covenant
     required by the Merger Agreement to be performed or complied with by it; or
 
          (e) there shall have occurred any event resulting in a Material
     Adverse Effect on the Company; or
 
          (f) any person (other than Parent, the Purchaser or any of their
     respective affiliates or subsidiaries) acquires beneficial ownership (as
     defined in Rule 13d-3 promulgated under the Exchange Act) of at least 20%
     of the outstanding voting securities of the Company or is granted any
     option or right to acquire at least 20% of such voting securities (as used
     herein, "Person" shall include any corporation, person, partnership, trust,
     other entity or group as defined in the Exchange Act); or
 
          (g) Parent, the Purchaser and the Company shall have agreed that the
     Purchaser shall terminate the Offer or postpone the payment for Shares
     thereunder; or
 
          (h) the Company shall have withdrawn, modified or amended in any
     respect its recommendation of the Offer, or the Board of Directors of the
     Company or any committee thereof shall have resolved to do so;
 
                                       24
<PAGE>   27
 
     which, in the sole judgment of the Parent, makes it inadvisable to proceed
with the Offer or with such acceptance for payment or payment.
 
     The foregoing conditions are for the sole benefit of Parent and the
Purchaser and may be asserted by Parent and the Purchaser regardless of the
circumstances giving rise to any such condition. The foregoing conditions may be
waived by Parent in whole or in part at any time and from time to time in its
sole discretion. The failure by Parent or the Purchaser at any time to exercise
any of the foregoing rights will not be deemed a waiver of any right and each
right will be deemed an ongoing right which may be asserted at any time and from
time to time.
 
15. CERTAIN LEGAL MATTERS; REQUIRED REGULATORY APPROVALS.
 
     Except as set forth in this Offer to Purchase, based on a review of
publicly available filings by the Company with the Commission and other publicly
available information regarding the Company, as well as certain representations
made to the Purchaser and Parent in the Merger Agreement by the Company, neither
Parent nor the Purchaser is aware of any licenses or regulatory permits that
appear to be material to the business of the Company and its subsidiaries, taken
as a whole, that might be adversely affected by the Purchaser's acquisition of
Shares (and the indirect acquisition of the stock of the Company's subsidiaries)
as contemplated herein, or any filings, approvals or other actions by or with
any domestic, foreign or supranational governmental authority or administrative
or regulatory agency that would be required for the acquisition or ownership of
the Shares (or the indirect acquisition of the stock of the Company's
subsidiaries) by the Purchaser pursuant to the Offer as contemplated herein.
Should any such approval or other action be required, it is presently
contemplated that such approval or action would be sought except as described
below under "State Takeover Laws." While, except as otherwise expressly
described in this Section 15, the Purchaser does not presently intend to delay
the acceptance for payment of or payment for Shares tendered pursuant to the
Offer pending the outcome of any such matter, there can be no assurance that any
such approval or other action, if needed, would be obtained or would be obtained
without substantial conditions or that failure to obtain any such approval or
other action might not result in consequences adverse to the Purchaser's or
Company's or its subsidiaries' businesses, or that certain parts of the
Company's, Parent's, the Purchaser's or any of their respective subsidiaries'
businesses might not have to be disposed of or held separate or other
substantial conditions complied with in order to obtain such approval or action
or in the event that such approvals were not obtained or such actions were not
taken. The Purchaser's obligation to purchase and pay for Shares is subject to
certain conditions, including conditions with respect to injunctions and
governmental actions. See the Introduction and Section 14 for a description
thereof.
 
     State Takeover Laws.  A number of states (including Delaware, where the
Company is incorporated) have adopted takeover laws and regulations that
purport, to varying degrees, to be applicable to attempts to acquire securities
of corporations that are incorporated in such states or that have substantial
assets, stockholders, principal executive offices or principal places of
business therein. In 1982, the Supreme Court of the United States, in Edgar v.
MITE Corp., invalidated on constitutional grounds the Illinois Business Takeover
Statute, which, as a matter of state securities law, made takeovers of
corporations meeting certain requirements more difficult, and the reasoning in
such decision is likely to apply to certain other state takeover statutes. In
1987, however, in CTS Corp. v. Dynamics Corp. of America, the Supreme Court of
the United States held that the State of Indiana could, as a matter of corporate
law and, in particular, those aspects of corporate law concerning corporate
governance, constitutionally disqualify a potential acquiror from voting on the
affairs of a target corporation without the prior approval of the remaining
stockholders, provided that such laws were applicable only under certain
conditions. Subsequently, in TLX Acquisition Corp. v. Telex Corp., a federal
district court in Oklahoma ruled that the Oklahoma statutes were
unconstitutional insofar as they apply to corporations incorporated outside
Oklahoma in that they would subject such corporations to inconsistent
regulations. Similarly, in Tyson Foods, Inc. v. McReynolds, a federal district
court in Tennessee ruled that four Tennessee takeover statutes were
unconstitutional as applied to corporations incorporated outside Tennessee. This
decision was affirmed by the United States Court of Appeals for the Sixth
Circuit. In December 1988, a federal district court in Florida held in Grand
Metropolitan PLC v. Butterworth that the
 
                                       25
<PAGE>   28
 
provisions of the Florida Affiliated Transactions Act and Florida Control Share
Acquisition Act were unconstitutional as applied to corporations incorporated
outside of Florida.
 
     Section 203 of the Delaware Law.  Section 203 of the Delaware Law, in
general, prohibits a Delaware corporation such as the Company from engaging in a
"Business Combination" (defined to include a variety of transactions, including
mergers) with an "Interested Stockholder" (defined generally as a person that is
the beneficial owner of 15% or more of the corporation's outstanding voting
stock) for a period of three years following the date such person became an
Interested Stockholder unless, among other things, prior to the date such person
became an Interested Stockholder, the board of directors of the corporation
approved either the Business Combination or the transaction that resulted in the
stockholder becoming an Interested Stockholder. The Company has represented in
the Merger Agreement that it properly approved the Merger Agreement, the
Stockholder Agreements and the Purchaser's acquisition of Shares pursuant to the
Offer and the Stockholder Agreements. Therefore, Section 203 of the Delaware Law
is inapplicable to the Merger.
 
     Neither the Purchaser nor Parent has attempted to comply with any state
takeover statutes in connection with the Offer or the Merger. The Purchaser
reserves the right to challenge the validity or applicability of any state law
allegedly applicable to the Offer or the Merger, and nothing in this Offer to
Purchase or any action taken in connection herewith is intended as a waiver of
that right. In the event that it is asserted that one or more takeover statutes
apply to the Offer or the Merger, and it is not determined by an appropriate
court that such statute or statutes do not apply or are invalid as applied to
the Offer or the Merger, as applicable, the Purchaser may be required to file
certain documents with, or receive approvals from, the relevant state
authorities, and the Purchaser might be unable to accept for payment or purchase
Shares tendered pursuant to the Offer or be delayed in continuing or
consummating the Offer or the Merger. In such case, the Purchaser may not be
obligated to accept for purchase, or pay for, any Shares tendered. See Section
14.
 
     Antitrust.  The Purchaser does not believe that the Offer and the Merger
are subject to the HSR Act, which provides that certain acquisition transactions
may not be consummated unless certain information has been furnished to the
Antitrust Division of the Department of Justice (the "Antitrust Division") and
the Federal Trade Commission ("FTC") and certain waiting period requirements
have been satisfied.
 
     If the acquisition of Shares is delayed pursuant to a request by the FTC or
the Antitrust Division for information or documentary material pursuant to the
HSR Act, the Offer may, at the discretion of the Purchaser (subject to the terms
and conditions of the Merger Agreement) be extended and, in any event the
purchase of and payment for Shares will be deferred until the applicable waiting
period expires or is terminated. Unless the Offer is extended, any extension of
the waiting period will not give rise to any additional withdrawal rights. See
Section 4.
 
     In practice, complying with a request for information or documentary
material can take a significant amount of time. In addition, if the Antitrust
Division or the FTC raises substantive issues in connection with a proposed
transaction, the parties frequently engage in negotiations with the relevant
governmental agency concerning possible means of addressing those issues and may
agree to delay consummation of the transaction while such negotiations continue.
 
     The FTC and the Antitrust Division frequently scrutinize the legality under
the antitrust laws of transactions such as the Purchaser's acquisition of Shares
pursuant to the Offer and the Merger. At any time before or after the
Purchaser's acquisition of Shares, the Antitrust Division or the FTC could take
such action under the antitrust laws as it deems necessary or desirable in the
public interest, including seeking to enjoin the acquisition of Shares pursuant
to the Offer or otherwise or seeking divestiture of Shares acquired by the
Purchaser or divestiture of substantial assets of Parent, the Company or their
respective subsidiaries. Private parties and state attorneys general may also
bring legal action under the antitrust laws under certain circumstances. Based
upon an examination of publicly available information relating to the businesses
in which Parent and the Company are engaged, Parent and the Purchaser believe
that the acquisition of Shares by the Purchaser will not violate the antitrust
laws. Nevertheless, there can be no assurance that a challenge to the Offer or
other acquisition of Shares by the Purchaser on antitrust grounds will not be
made or, if such a challenge is made, of the result. If any such action by the
FTC, the Antitrust Division or any other person should be threatened or
commenced, the Purchaser may extend, terminate or amend the Offer. See Section
 
                                       26
<PAGE>   29
 
13. See Section 14 for certain conditions to the Offer, including conditions
with respect to injunctions and certain governmental actions.
 
16. FEES AND EXPENSES.
 
     Georgeson & Company Inc. has been retained by the Purchaser as Information
Agent in connection with the Offer. The Information Agent may contact holders of
Shares by mail, telephone, telex, telegraph and personal interview and may
request brokers, dealers and other nominee stockholders to forward material
relating to the Offer to beneficial owners of Shares. The Purchaser will pay the
Information Agent reasonable and customary compensation for all such services in
addition to reimbursing the Information Agent for reasonable out-of-pocket
expenses in connection therewith. The Purchaser has agreed to indemnify the
Information Agent against certain liabilities and expenses in connection with
the Offer, including certain liabilities under the federal securities laws.
 
     In addition, The First National Bank of Boston has been retained as the
Depositary. The Purchaser will pay the Depositary reasonable and customary
compensation for its services in connection with the Offer, will reimburse the
Depositary for its reasonable out-of-pocket expenses in connection therewith and
will indemnify the Depositary against certain liabilities and expenses in
connection therewith, including certain liabilities under the federal securities
laws.
 
     Except as set forth above, neither Parent nor the Purchaser will pay any
fees or commissions to any broker, dealer or other person for soliciting tenders
of Shares pursuant to the Offer. Brokers, dealers, commercial banks and trust
companies and other nominees will, upon request, be reimbursed by Parent or the
Purchaser for customary clerical and mailing expenses incurred by them in
forwarding offering materials to their customers.
 
17. MISCELLANEOUS.
 
     The Purchaser is not aware of any jurisdiction in which the making of the
Offer is not in compliance with applicable law. If the Purchaser becomes aware
of any jurisdiction in which the making of the Offer would not be in compliance
with applicable law, the Purchaser will make a good faith effort to comply with
any such law. If, after such good faith effort, the Purchaser cannot comply with
any such law, the Offer will not be made to (nor will tenders be accepted from
or on behalf of) the holders of Shares residing in such jurisdiction. In those
jurisdictions whose securities or blue sky laws require the Offer to be made by
a licensed broker or dealer, the Offer is being made on behalf of the Purchaser
by one or more registered brokers or dealers which are licensed under the laws
of such jurisdiction.
 
     No person has been authorized to give any information or make any
representation on behalf of the Purchaser or Parent 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.
 
     The Purchaser and Parent have filed with the Commission the Schedule 14D-1
pursuant to Rule 14d-3 under the Exchange Act, furnishing certain additional
information with respect to the Offer, and may file amendments thereto. The
Schedule 14D-1 and any amendments thereto, including exhibits, may be inspected
and copies may be obtained at the same places and in the same manner as set
forth in Section 7 (except that they will not be available at the regional
offices of the Commission).
 
                                          AI ACQUISITIONS CORP.
 
                                       27
<PAGE>   30
 
                                                                      SCHEDULE I
 
                         CERTAIN INFORMATION CONCERNING
                            THE BEACON GROUP, PARENT
                               AND THE PURCHASER
 
1. DIRECTORS AND EXECUTIVE OFFICERS OF THE PURCHASER.
 
     The following table sets forth the name, present principal occupation or
employment and material occupations, positions, offices or employments for the
past five years of each director and executive officer of the Purchaser all of
whom are citizens of the United States except for Eric R. Wilkinson who is a
citizen of the United Kingdom. Unless otherwise indicated, the address of each
entity listed and the business address of each person is c/o The Beacon Group,
375 Park Avenue, Suite 1705, New York, New York 10152.
 
<TABLE>
<CAPTION>
                                                               PRESENT PRINCIPAL OCCUPATION OR
                                                               EMPLOYMENT; MATERIAL POSITIONS
            NAME                           TITLE               HELD DURING THE PAST FIVE YEARS
- -----------------------------  -----------------------------  ---------------------------------
<S>                            <C>                            <C>
Geoffrey T. Boisi............  President and Managing         See "The Beacon Group," infra.
                               Director
Richard W. Herbst............  Managing Director              See "The Beacon Group," infra.
John J. MacWilliams..........  Managing Director              See "The Beacon Group," infra.
Thomas G. Mendell............  Managing Director              See "The Beacon Group," infra.
Preston R. Miller, Jr. ......  Managing Director              See "The Beacon Group," infra.
Harold W. Pote...............  Managing Director              See "The Beacon Group," infra.
David F. Remington...........  Managing Director              See "The Beacon Group," infra.
Faith Rosenfeld..............  Managing Director              See "The Beacon Group," infra.
                               and Assistant Secretary
Robert F. Semmens............  Secretary and Managing         See "The Beacon Group," infra.
                               Director
Eric R. Wilkinson............  Managing Director              See "The Beacon Group," infra.
</TABLE>
 
2. GENERAL PARTNER OF THE PARENT.
 
     The following table sets forth the name, present principal occupation or
employment and material occupations, positions, offices or employments for the
past five years of the general partner of Parent, which general partner is a
partnership organized in the United States. Unless otherwise indicated, the
business address of each such person is c/o The Beacon Group, 375 Park Avenue,
Suite 1705, New York, New York 10152.
 
<TABLE>
<CAPTION>
                                                               PRESENT PRINCIPAL OCCUPATION OR
                                                               EMPLOYMENT; MATERIAL POSITIONS
            NAME                           TITLE               HELD DURING THE PAST FIVE YEARS
- -----------------------------  -----------------------------  ---------------------------------
<S>                            <C>                            <C>
AI-GP, L.L.C. ...............         General Partner         See "The Beacon Group," infra.
</TABLE>
 
3. MEMBER OF AI-GP, L.L.C.
 
     The following table sets forth the name, present principal occupation or
employment and material occupations, positions, offices or employments for the
past five years of the sole member of AI-GP, L.L.C., which sole member is a
corporation organized in the United States. Unless otherwise indicated, the
business address of such person is c/o The Beacon Group, 375 Park Avenue, Suite
1705, New York, New York 10152.
 
<TABLE>
<CAPTION>
                                                               PRESENT PRINCIPAL OCCUPATION OR
                                                               EMPLOYMENT; MATERIAL POSITIONS
            NAME                           TITLE               HELD DURING THE PAST FIVE YEARS
- -----------------------------  -----------------------------  ---------------------------------
<S>                            <C>                            <C>
Energy Fund GP, Inc..........             Member              See "The Beacon Group," infra.
</TABLE>
 
                                       I-1
<PAGE>   31
 
4. DIRECTORS AND EXECUTIVE OFFICERS OF ENERGY FUND GP, INC.
 
     The following table sets forth the name, present principal occupation or
employment and material occupations, positions, offices or employments for the
past five years of each director and executive officer of Energy Fund GP, Inc.,
all of whom are citizens of the United States except for Eric R. Wilkinson who
is a citizen of the United Kingdom. The sole stockholder of Energy Fund GP, Inc.
is The Beacon Group Holdings, L.L.C., a limited liability company organized in
the United States. Unless otherwise indicated, the business address of each such
person is c/o The Beacon Group, 375 Park Avenue, Suite 1705, New York, New York
10152.
 
<TABLE>
<CAPTION>
                                                               PRESENT PRINCIPAL OCCUPATION OR
                                                               EMPLOYMENT; MATERIAL POSITIONS
            NAME                           TITLE               HELD DURING THE PAST FIVE YEARS
- -----------------------------  -----------------------------  ---------------------------------
<S>                            <C>                            <C>
Geoffrey T. Boisi............  President and Managing         See "The Beacon Group," infra.
                               Director
Richard W. Herbst............  Managing Director              See "The Beacon Group," infra.
John J. MacWilliams..........  Secretary and Managing         See "The Beacon Group," infra.
                               Director
Thomas G. Mendell............  Managing Director              See "The Beacon Group," infra.
Preston R. Miller, Jr. ......  Managing Director              See "The Beacon Group," infra.
Harold W. Pote...............  Managing Director              See "The Beacon Group," infra.
David F. Remington...........  Managing Director              See "The Beacon Group," infra.
Faith Rosenfeld..............  Managing Director              See "The Beacon Group," infra.
Robert F. Semmens............  Managing Director              See "The Beacon Group," infra.
Eric R. Wilkinson............  Managing Director              See "The Beacon Group," infra.
</TABLE>
 
5. SOLE MEMBER OF THE BEACON GROUP HOLDINGS, L.L.C.
 
     The following table sets forth the name, present principal occupation or
employment and material occupations, positions, offices or employments for the
past five years of the sole member of The Beacon Group Holdings, L.L.C., which
sole member is a partnership organized in the United States. Unless otherwise
indicated, the business address of each such person is c/o The Beacon Group, 375
Park Avenue, Suite 1705, New York, New York 10152.
 
<TABLE>
<CAPTION>
                                                               PRESENT PRINCIPAL OCCUPATION OR
                                                               EMPLOYMENT; MATERIAL POSITIONS
            NAME                           TITLE               HELD DURING THE PAST FIVE YEARS
- -----------------------------  -----------------------------  ---------------------------------
<S>                            <C>                            <C>
The Beacon Group.............             Member              See "The Beacon Group," infra.
</TABLE>
 
                                       I-2
<PAGE>   32
 
6. GENERAL PARTNERS OF THE BEACON GROUP.
 
     The following table sets forth the name, present principal occupation or
employment and material occupations, positions, offices or employments for the
past five years of the general partners of The Beacon Group, all of whom are
citizens of the United States, except for Eric R. Wilkinson who is a citizen of
the United Kingdom. The Beacon Group is a general partnership and is the sole
member of The Beacon Group Holdings, L.L.C. Unless otherwise indicated, the
business address of each such person is c/o The Beacon Group, 375 Park Avenue,
Suite 1705, New York, New York 10152.
 
<TABLE>
<CAPTION>
                                           PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
               NAME                        MATERIAL POSITIONS HELD DURING THE PAST FIVE
- -----------------------------------  --------------------------------------------------------
<S>                                  <C>
Geoffrey T. Boisi..................  Senior Partner, The Beacon Group; Partner of Goldman,
                                     Sachs & Co. from 1978 to 1992.
Richard W. Herbst..................  General Partner, The Beacon Group; Partner of Goldman,
                                     Sachs & Co. from 1986 to 1995.
John J. MacWilliams................  General Partner, The Beacon Group; Executive Director of
                                     Goldman, Sachs International from 1991 to 1993.
Thomas G. Mendell..................  General Partner, The Beacon Group; Partner of Goldman,
                                     Sachs & Co. from 1986 to 1994.
Preston R. Miller, Jr. ............  General Partner, The Beacon Group; Vice President of
                                     Goldman, Sachs & Co. from 1980 to 1993.
Harold W. Pote.....................  General Partner, The Beacon Group from 1990 to present;
                                     President and CEO of the Brooke Group, Inc. from 1991 to
                                     1993; Vice Chairman of PBS Properties, Inc. from 1990 to
                                     1993.
David F. Remington.................  General Partner, The Beacon Group; Self-employed from
                                     1990 to 1993.
Faith Rosenfeld....................  General Partner, The Beacon Group; Vice President of
                                     Goldman, Sachs & Co. from 1981 to 1993.
Robert F. Semmens..................  General Partner, The Beacon Group; Vice President of
                                     Goldman, Sachs & Co. from 1983 to 1993.
Eric R. Wilkinson..................  General Partner, The Beacon Group; Partner of Apax
                                     Partners & Cie S.A. from 1989 to 1994.
</TABLE>
 
                                       I-3
<PAGE>   33
 
     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 stockholder
of the Company or his broker, dealer, commercial bank or other nominee to the
Depositary at one of its addresses set forth below.
 
                        The Depositary for the Offer is:
 
                       THE FIRST NATIONAL BANK OF BOSTON
 
<TABLE>
<S>                               <C>                                 <C>
           By Mail:                  By Facsimile Transmission:                    By Hand:
Shareholder Services Division              (617) 575-2232                  BancBoston Trust Company
        P.O. Box 1889                      (617) 575-2233                        of New York
      Mail Stop 45-02-53          (For Eligible Institutions Only)         55 Broadway, Third Floor
 Boston, Massachusetts 02105                                                  New York, New York
        (617) 575-3120
                                  Confirm Facsimile by Telephone:           By Overnight Courier:
                                           (617) 575-3120             The First National Bank of Boston
                                      (For Confirmation Only)           Shareholder Services Division
                                                                              150 Royall Street
                                                                             Mail Stop: 45-02-53
                                                                         Canton, Massachusetts 02021
</TABLE>
 
     Any questions or requests for assistance or additional copies of this Offer
to Purchase, the Letter of Transmittal or the Notice of Guaranteed Delivery may
be directed to the Information Agent at its telephone number and location listed
below. You may also contact your broker, dealer, commercial bank or trust
company or nominee for assistance concerning the Offer.
 
                    The Information Agent for the Offer is:
 

                        (GEORGESON & COMPANY, INC. LOGO)
 
                               Wall Street Plaza
                            New York, New York 10005
 
                 Banks and Brokers Call Collect (212) 440-9800
                         Call Toll-Free: (800) 223-2064
