[Duff & Xxxxxx LLC Letterhead]
June 13, 1997
The Board of Directors
First of Michigan Capital Corporation
000 Xxxxxxxxxxx Xxxxxx
00xx Xxxxx
Xxxxxxx, XX 00000
Gentlemen:
This letter (the 'Agreement') confirms the basis of engagement between the First
of Michigan Capital Corporation (the 'Company') on behalf of the Board of
Directors and Duff & Xxxxxx, LLC ('Duff & Xxxxxx') for financial advisory
services. The terms of the engagement are as follows:
1. The Board of Directors has been advised of a tender offer (the 'Tender
Offer') from Xxxxxxxxxx Xxxxx Holdings, Inc. to be made to the stockholders
of the Company. The terms of the Tender Offer include the purchase of all
outstanding shares of the Company at a price of $15.00 per share payable in
cash. Holders of approximately 53% of the common stock (on a fully diluted
basis) have agreed to sell their shares and have placed them in escrow. The
Board of Directors engages Xxxx & Xxxxxx as an independent financial advisor
to determine whether the terms of the Tender Offer are fair to the
shareholders of the Company from a financial point of view.
2. The Board of Directors understands that in rendering services hereunder, Xxxx
& Xxxxxx will be relying, without independent verification, upon the accuracy
and completeness of all information that is or will be furnished to Duff &
Xxxxxx by or on behalf of the Company, and Xxxx & Xxxxxx will not, in any
respect, be responsible for the accuracy or completeness thereof.
3. Xxxx & Xxxxxx agrees to maintain the confidentiality of all information
relating to the Company which it receives or develops during the course of
the engagement and to disclose such information only after receiving prior
written consent from the Company, which consent will not be unreasonably
withheld, or as required by law.
4. Xxxx & Xxxxxx will provide a written opinion letter (the 'Opinion') and
supporting documentation as to whether the Tender Offer is fair to the
Shareholders of First of Michigan from a financial point of view.
The Opinion will include descriptions of the principal materials reviewed by
Xxxx & Xxxxxx, the assumptions and qualifications upon which Xxxx & Xxxxxx
has relied, and such other matters as Xxxx & Xxxxxx in its sole discretion
deems appropriate.
5. Duff & Xxxxxx shall be paid by the Company a fee of $125,000 for the services
described herein, of which $50,000 is due as a retainer payment upon
execution of the Agreement with the remainder payable upon delivery of the
Opinion and
The Board of Directors
First of Michigan Capital Corporation
June 12, 1997
Page 2
supporting analysis. No portion of the fee is contingent upon consummation of
the Tender Offer or the conclusions reached in the Opinion, subject to the
following. If the Tender Offer is abandoned for reasons unrelated to the
conclusions contemplated in the Opinion, Xxxx & Xxxxxx shall be entitled to
receive the greater of the retainer payment or Duff & Phelp's professional
hours incurred at its standard hourly rates then in effect but in no event
more than $125,000.
6. In connection with this engagement Xxxx & Xxxxxx shall be reimbursed for
reasonable out-of-pocket expenses, including travel, lodging, telephone,
document reproduction, telecopying, and reasonable computer data base
charges.
7. If Xxxx & Xxxxxx is required to render other services not directly incidental
to the delivery of the Opinion, including the provision of testimony in
administrative or judicial proceedings, the Company agrees to compensate Xxxx
& Xxxxxx, in addition to the other fees provided for herein, on a per diem
basis at the rates of Duff & Xxxxxx then in effect, plus reimbursement for
reasonable out-of-pocket expenses.
8. The Company agrees to indemnify Duff & Xxxxxx in accordance with the terms of
the attached Indemnification Agreement.
9. The Company may terminate this Agreement at any time for any reason subject
to five days' notice. In the event of a termination, however, the
Indemnification Agreement shall remain in full force and effect for all
services previously provided by Xxxx & Xxxxxx.
If the foregoing terms are acceptable to you, we request that you arrange to
have this letter fully executed and returned to us.
Sincerely,
/s/ Xxx Xxxxx
AGREED TO AND ACCEPTED:
For First of Michigan Capital Corporation
By: /s/ Xxxxxx Xxxxx
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Title: Chairman
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Date: 6/18/97
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