EXHIBIT (c)(5)
CONFIDENTIAL DISCLOSURE AND STANDSTILL AGREEMENT
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THIS AGREEMENT is made effective as of the 6th day of June, 1997, by
and between First of Michigan Capital Corporation (the "Company") and Xxxxxxxxxx
Xxxxx Holdings, Inc. ("Buyer"), with the Company and Buyer sometimes referred to
herein as the "Parties" or individually as the "Party". "Buyer" shall include
all parents, subsidiaries and other affiliates of Buyer.
WITNESSETH
WHEREAS, the Company and Buyer are contemplating the possibility of a
transaction between them (the "Transaction"), and
WHEREAS, the Company will be disclosing certain data and other
information of a confidential or proprietary nature to Buyer in connection with
the due diligence review of the Company in connection with the Transaction, and
WHEREAS, the Company is willing to disclose such information, on a
confidential basis, to Buyer to enable Buyer to perform its due diligence of the
Company.
NOW, THEREFORE, the Parties hereto agree as follows:
1. Buyer agrees to treat confidentially information concerning the
Company, including, but not limited to, information concerning its business,
operations, assets, liabilities, business prospects, acquisitions, financial
projections and financial condition, furnished by the Company or on behalf of
the Company to Buyer, including any other information or notes derived by Buyer
or its financial advisors, independent auditors, legal counsel or other agents
or representatives from any such information (herein collectively referred to as
the "Diligence Material"). For purposes of this Agreement, the phrase "Diligence
Material" shall not include information which (i) becomes lawfully available to
the public other than as a result of a disclosure by Buyer, its representatives
or its agents, (ii) was lawfully available to Buyer on a non-confidential basis
prior to its disclosure by Buyer by the Company or its agents or
representatives, or (iii) lawfully becomes available to Buyer on a
non-confidential basis from a source other than the Company or its agents or
representatives provided that such source is not bound by a confidentiality
agreement with the Company of which Buyer has been made aware.
2. It is hereby agreed that the Diligence Material will be used by
Buyer and its agents and representatives only for due diligence purposes, that
the Diligence Material will be kept confidential by Buyer, its agents and
representatives and that Buyer and its agents and representatives will make no
commercial use of the Diligence Material without the prior written agreement to
the Company; provided, however, that (i) any of such information may be
disclosed to Buyer's directors, officers, employees, agents and representatives
who need to know such information for the purpose of performing due diligence of
the Company and evaluating the Transaction (it being understood that such
directors, officers, employees, agents and representatives shall be informed by
Buyer of the confidential nature of such information and shall be directed by
Buyer to treat such information confidentially and not to use the information to
the Company's detriment and Buyer shall be responsible for any breach of this
Agreement by such directors, officers, employees, agents or representatives),
(ii) any other disclosure of such information may be made to which the Company
consents in writing, or (iii) disclosure of such information may be made if
pursuant to the order or requirement of a court, administrative agency or other
governmental body. If Buyer, its agents or representatives receive a request or
requirement to disclose the Diligence Material as provided in (iii) above, they
shall promptly notify the Company so that the Company may seek a protective
order or other appropriate remedy and/or waive compliance with the provisions of
this Agreement. In the vent that such a protective order or other remedy is not
timely obtained, or that the Company waives compliance with the provisions of
this Agreement, Buyer and its agents and representatives will furnish only that
portion of the Due Diligence Material which counsel reasonably acceptable to the
Company advises is legally required and will exercise their best efforts to
obtain reliable assurance that confidential treatment will be accorded the
Diligence Material.
3. Without the other Party's prior written consent, each Party will
not, and will direct its directors, officers, employees, agents and
representatives not to, disclose to any person information concerning the
discussions or negotiations in connection with the Transaction or any of the
terms, conditions, or other facts with respect to the Transaction including the
status thereof; provided, that if in the opinion of one Party's counsel
disclosure is required by applicable law, regulation or rule, such Party may
make such disclosure after notifying the other Party of the reasons and the text
of the proposed disclosure. Any press release with respect to the Transaction
shall be jointly agreed to by Buyer and the Company. The term "person" as used
herein shall include, without limitation, any corporation, company, partnership
and individual.
4. Except as may otherwise be expressly set forth in a definitive
agreement between the parties entered into to effect the Transaction, the
Company shall not be deemed to make or have made any representation or warranty
as to the accuracy or completeness of any Diligence Material furnished
hereunder.
5. Buyer hereby acknowledges that it is aware (and that its directors,
officers, employees, agents and representatives who are apprised of the matter
have been, or upon becoming so apprised will be, advised) of the restrictions
(including the restrictions regarding transactions in securities) imposed by the
United States federal securities laws on a person possessing material non-public
information about a public company such as the Company.
6. Buyer hereby agrees that for a period of two years after the date
hereof, it will not, directly or indirectly, purchase or offer to purchase any
material assets or any securities of the Company or propose any merger or other
business combination involving the Company ("Business Combination") except
pursuant to a transaction to be approved by the Board of Directors of the
Company and only if specifically invited in writing by the Company to do so;
provided that, to the extent consistent with obligations under applicable law,
Buyer shall be permitted to purchase up to one percent of the issued and
outstanding shares of Common Stock of the Company without violating the
foregoing restriction. In addition, for a period of two years after the date
thereof, Buyer will not, without the Company's prior written consent, (a) make,
or in any way participate, directly or indirectly, in any "solicitation" of
"proxies" to vote (as such terms are used in the proxy rules of the Securities
and Exchange Commission), or seek to advise or influence any person or entity
with respect to the voting of any voting securities of the Company, (b) form,
join or in any way participate in a "group" within the meaning of
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Section 13(d)(3) of the Securities Exchange Act of 1934 with respect to any
voting securities of the Company, or (c) otherwise act, alone or in concert with
others, to seek to control the management, Board of Directors, or policies of
the Company. The above provisions of this paragraph 6 shall not apply to Buyer
if another entity enters into a Business Combination with the Company or
initiates a tender offer for the Company securities. Buyer also agrees during
such two-year period not to (i) request the Company or its advisors, directly or
indirectly, to amend or waive any provision of this paragraph (including this
sentence), or (ii) take any initiative in respect of the Company which would,
upon the advice of counsel, reasonably require the Company to make a public
announcement regarding the possibility of Buyer acquiring control of the Company
whether by means of a business combination or otherwise. Buyer also agrees that,
for a period of two years after the date hereof, neither it nor any of its
affiliates will solicit to employ any of the current officers or employees of
the Company with whom Buyer had contact, or who was specifically identified to
Buyer, during the period of Buyer's diligence review of the Company, so long as
they are employed by the Company, without the prior written consent of the
Company. The Company agrees that, for a period of two years after the date
hereof, neither it nor any of its affiliates will solicit to employ any of the
current officers or employees of Buyer with whom the Company had contact, or who
was specifically identified to the Company, during the period of Buyer's
diligence review of the Company, so long as they are employed by Buyer, without
the prior written consent of Buyer.
7. In the event that the Parties do not enter into a definitive
agreement with respect to the Transaction within six (6) months from the date
hereof, Buyer, upon request of the Company, will deliver to the Company all
written Diligence Material furnished, without retaining copies thereof. In the
case of any other information or notes derived from the Diligence Material, the
same shall be promptly destroyed.
8. Buyer agrees to reimburse, indemnify and hold harmless the Company
and its affiliates, employees, investment bankers, legal counsel and other
agents and representatives from any damage, loss or expense incurred by them as
a result of the use of the Diligence Material contrary to the terms of this
Agreement.
9. It is understood and agreed that money damages would not be a
sufficient remedy for any breach of this Agreement by either Party, their
employees, officers, directors, agents or representatives and that the Parties
shall be entitled to specific performance as a remedy for any such breach. Such
remedy shall not be deemed to be the exclusive remedy for any such breach of
this Agreement, but shall be in addition to all other remedies available at law
or equity or either Party.
10. It is further understood and agreed that no failure to delay by
either Party in exercising any right, power or privilege hereunder shall operate
as a waiver thereof, nor shall any single or partial exercise thereof preclude
any other or further exercise thereof or the exercise of any right, power or
privilege hereunder. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
11. This Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware.
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IN WITNESS WHEREOF, the Parties hereto have executed this Confidential
Disclosure and Standstill Agreement as of the date first above set forth.
FIRST OF MICHIGAN CAPITAL CORPORATION
By: /s/ Xxxxxx Xxxxx
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Title: Chairman
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XXXXXXXXXX XXXXX HOLDINGS, INC.
FAHNSTOCK & CO, INC., BUYER
By: /s/ Xxxxxx X. Xxxxxxxxx
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Title: Chairman and CEO
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