TENDER OFFER AGREEMENT
TENDER OFFER AGREEMENT dated as of June 11, 1997 (this
"Agreement"), among FMCC ACQUISITION CORP., a Delaware corporation ("Buyer"),
FIRST OF MICHIGAN CAPITAL CORPORATION, a Delaware corporation (the "Company"),
and each of the stockholders of Company that is a signatory hereto identified as
a "SELLER" on the signature pages hereto (each, a "Seller" and collectively,
"Sellers").
W I T N E S S E T H:
WHEREAS, the respective Boards of Directors of Buyer and the
Company have determined that it is in the best interests of their respective
companies for Buyer to acquire the Company upon the terms and subject to the
conditions set forth herein and in the Purchase Agreement referred to below;
WHEREAS, concurrently with the execution and delivery of this
Agreement, the Sellers and Buyer are entering into a certain Securities Purchase
Agreement of even date herewith (the "Purchase Agreement"), pursuant to which
Buyer has agreed to purchase and Sellers have agreed to sell shares of Common
Stock, par value $0.10 per share (the "Common Stock"), equal to approximately
53% of the issued and outstanding shares of capital stock of the Company (on a
fully diluted basis), and Sellers have agreed to take certain actions in
furtherance of the acquisition of the Company by Buyer; and
WHEREAS, the parties hereto desire to make certain
representations, warranties and covenants in connection herewith.
NOW, THEREFORE, in consideration of the foregoing, and of the
representations, warranties, covenants and agreements contained herein, and
other good and other valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto hereby agree as follows:
ARTICLE I
THE OFFER
SECTION 1.1 The Offer. (a) As promptly as practicable (but in
no event later than five (5) business days after the public announcement of the
execution hereof), Buyer shall commence (within the meaning of Rule 14d-2 under
the Securities Exchange Act of 1934, as amended (the "Exchange Act")), an offer
to
purchase (the "Offer") for cash all the outstanding shares of Common Stock at a
price of $15.00 per share, net to the seller (the aggregate consideration for
all such shares is sometimes hereinafter called the "Tender Consideration"). The
shares of Common Stock owned by Sellers will be sold to Buyer pursuant to the
Purchase Agreement. The obligation of Buyer to commence the Offer and to accept
for payment, and pay for, any shares of Common Stock tendered pursuant to the
Offer shall be subject to the conditions set forth in Exhibit A hereto and to
the terms and conditions of this Agreement. Subject to the provisions of this
Agreement, the Offer shall expire twenty (20) business days after the date of
its commencement, unless extended or sooner terminated in accordance with this
Agreement.
(b) Subject to the terms and conditions of the Offer and this
Agreement, Buyer shall accept for payment and pay for, in accordance with the
terms of the Offer, all shares of Common Stock validly tendered and not
withdrawn pursuant to the Offer as soon as practicable after the expiration of
the Offer.
(c) Buyer expressly reserves the right to modify the terms of
the Offer and to waive any condition of the Offer, except that, without the
prior written consent of the Board of Directors of the Company, Buyer shall not
(i) reduce the number of shares of Common Stock subject to the Offer, (ii)
reduce the price per share of Common Stock to be paid pursuant to the Offer,
(iii) change the form of consideration payable in the Offer, (iv) amend or
modify any term or condition of the Offer (including the conditions set forth on
Exhibit A) in any manner materially adverse to the holders of Common Stock, or
(v) impose additional conditions to the Offer, other than such conditions
required by applicable Law (as hereinafter defined). Notwithstanding anything
herein to the contrary, Buyer may, in its sole discretion without the consent of
the Company, extend the Offer at any time and from time to time (A) if at the
then scheduled expiration date of the Offer any of the conditions to Buyer's
obligation to accept for payment and pay for shares of Common Stock shall not
have been satisfied or waived, (B) for any period required by any rule,
regulation, interpretation or position of the Securities and Exchange Commission
(the "SEC") or its staff applicable to the Offer, and (C) for any period
required by applicable law, rule, regulation, administrative or judicial
determination or order (collectively, "Law"). So long as this Agreement is in
effect and the conditions to the Offer have not been satisfied or waived, at the
request of the Company, Buyer shall extend the Offer for an aggregate period of
not more than five (5) business days (for all such extensions) beyond the
originally scheduled expiration date of the Offer. Such period of five (5)
business days shall include any grace period contemplated by clause (d)(ii) of
Exhibit A that extends beyond the otherwise scheduled expiration date of the
Offer.
SECTION 1.2 Actions by Buyer. As soon as reasonably
practicable following execution of this Agreement, but in no event later than
five (5) business days from the date hereof, Buyer shall file with the SEC a
Tender Offer Statement on Schedule 14D-1 with respect to the Offer, which shall
contain an offer
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to purchase and a related letter of transmittal and any other ancillary
documents pursuant to which the Offer shall be made (such Schedule 14D-1 and the
documents therein pursuant to which the Offer will be made, together with any
supplements or amendments thereto, the "Offer Documents"). The Company and its
counsel shall be given a reasonable opportunity to review and comment upon the
Offer Documents prior to the filing thereof with the SEC. The Offer Documents
shall comply as to form in all material respects with the requirements of the
Exchange Act, and, on the date filed with the SEC and on the date first
published, sent or given to the Company's stockholders, the Offer Documents
shall not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, except that no representation is made by Buyer with
respect to information supplied by the Company or Sellers for inclusion in the
Offer Documents. Each of Sellers, Buyer and the Company agrees promptly to
correct any information provided by it for use in the Offer Documents if and to
the extent that such information shall have become false or misleading in any
material respect, and each of Buyer and the Company further agree to take all
steps necessary to cause the Offer Documents as so corrected to be filed with
the SEC and to be disseminated to holders of shares of Common Stock, in each
case as and to the extent required by applicable federal securities laws. Buyer
agrees to provide the Company and its counsel in writing with any comments Buyer
or its counsel may receive from the SEC or its staff with respect to the Offer
Documents promptly after receipt of such comments.
SECTION 1.3 Actions by the Company. (a) The Company hereby
approves of and consents to the Offer and the transactions contemplated by the
Purchase Agreement and represents and warrants that the Board of Directors of
the Company (the "Board of Directors" or the "Board") at a meeting duly called
and held has duly adopted resolutions approving this Agreement and the Offer,
subject to receiving the written opinion of Duff & Xxxxxx LLP or another
financial advisor (the "Fairness Opinion") that the per share Tender
Consideration is fair to the Company's stockholders from a financial point of
view. The Company undertakes to obtain promptly the Fairness Opinion. The
Company further represents and warrants that the Board has taken all action
required under or pursuant to the Company's Certificate of Incorporation (the
"Certificate") so as to make inapplicable the provisions of Article Tenth to any
Business Combination (as defined in the Certificate) involving Buyer or any of
its affiliates.
(b) Within ten (10) business days following the commencement
of the Offer, the Company shall file with the SEC a Solicitation/Recommendation
Statement on Schedule 14D-9 with respect to the Offer (such Schedule 14D-9, as
amended from time to time, the "Schedule 14D-9") and shall mail the Schedule
14D-9 to the stockholders of the Company. Promptly following receipt of the
Fairness Opinion, the Company shall file with the SEC the Schedule 14D-9 (or an
amendment thereto) containing the recommendation of the Board of Directors that
the Company's
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stockholders accept the Offer and shall mail the Schedule 14D-9 (or such
amendment) to the stockholders of the Company. To the extent practicable, the
Company shall cooperate with purchaser in mailing or otherwise disseminating the
Schedule 14D-9 with the appropriate Offer Documents to the Company's
stockholders. Buyer and its counsel shall be given a reasonable opportunity to
review and comment upon the Schedule 14D-9 prior to the filing thereof with the
SEC. The Schedule 14D-9 shall comply as to form in all material respects with
the requirements of the Exchange Act and, on the date filed with the SEC and on
the date first published, sent or given to the Company's stockholders, shall not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, except that no representation is made by the Company with respect to
information supplied by Buyer for inclusion in the Schedule 14D-9. Each of the
Company, Sellers and Buyer agrees promptly to correct any information provided
by it for use in the Schedule 14D-9 if and to the extent that such information
shall have become false or misleading in any material respect, and the Company
further agrees to take all steps necessary to cause the Schedule 14D-9 as so
corrected to be filed with the SEC and to be disseminated to the holders of
shares of Common Stock, in each case as and to the extent required by applicable
federal securities laws. The Company agrees to provide Buyer and its counsel in
writing with any comments the Company or its counsel may receive from the SEC or
its staff with respect to the Schedule 14D-9 promptly after the receipt of such
comments.
(c) In connection with the Offer, the Company shall cause its
transfer agent to furnish Buyer with mailing labels containing the names and
addresses of the record holders of Common Stock as of a recent date and of those
persons becoming record holders subsequent to such date, together with copies of
all lists of stockholders, security position listings and computer files and all
other information in the Company's possession or control regarding the
beneficial owners of Common Stock, and shall furnish to Buyer such information
and assistance (including updated lists of stockholders, security position
listings and computer files) as Buyer may reasonably request in communicating
the Offer to the Company's stockholders. Subject to the requirements of Law, and
except for such steps as are necessary to disseminate the Offer Documents and
any other documents necessary to consummate the Offer, Buyer and its affiliates
and associates shall hold in confidence the information contained in any of such
labels, lists and files, shall use such information only in connection with the
Offer and the Merger, and, if this Agreement is terminated, shall promptly
deliver to the Company all copies of such information then in their possession
or under their control.
(d) Subject to the terms and conditions of this Agreement, if
there shall occur a change in Law or in a binding judicial interpretation of
existing Law that would, in the absence of action by the Company or the Board,
prevent Buyer, were it to acquire a specified percentage of the shares of Common
Stock then outstanding, from approving and adopting this Agreement by its
affirmative vote as the holder of a
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majority of shares of Common Stock and without the affirmative vote of any other
stockholder, the Company will use its reasonable best efforts to promptly take
or cause such action to be taken.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
SECTION 2.1 Representations and Warranties of Buyer. Buyer
hereby represents and warrants to the Company as follow:
(a) Existence; Good Standing. Buyer is a corporation duly
incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation.
(b) Authorization, Validity and Effect of Agreements. Buyer
has the requisite corporate power and authority to execute and deliver this
Agreement and all agreements and documents contemplated hereby (including,
without limitation, the Purchase Agreement). The consummation by Buyer of the
transactions contemplated hereby has been duly authorized by all requisite
corporate action. This Agreement constitutes, and all agreements and documents
contemplated hereby (when executed and delivered pursuant hereto for value
received) will constitute, the valid and legally binding obligations of Buyer,
enforceable in accordance with their respective terms, subject to applicable
bankruptcy, insolvency, moratorium or other similar laws relating to creditors'
rights and general principles of equity.
(c) No Violation. Neither the execution and delivery by Buyer
of this Agreement, nor the consummation by Buyer of the transactions
contemplated hereby in accordance with the terms hereof, will: (i) conflict with
or result in a breach of any provisions of the Certificate of Incorporation or
By-laws of Buyer; (ii) violate, or conflict with, or result in a breach of any
provision of, or constitute a default (or an event which, with notice or lapse
of time or both, would constitute a default) under, any of the terms, conditions
or provisions of any material license, certificate of authority, franchise,
permit, lease, contract, agreement or other instrument, commitment or obligation
to which Buyer or any of its subsidiaries is a party, or by which Buyer or any
of its subsidiaries or any of their properties is bound or affected, except for
any of the foregoing matters which would not have a material adverse effect on
the ability of Buyer to perform its obligations hereunder (a "Buyer Material
Adverse Effect"); or (iii) other than expiration or termination of the waiting
period under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 0000 (xxx "XXX
Xxx") and such regulatory approvals as may be required under applicable
securities laws, require any material consent, approval or authorization of, or
declaration, filing or registration with, any domestic governmental or
regulatory authority, the failure to obtain or make which would have a Buyer
Material Adverse Effect.
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(d) Offer Documents. None of the Offer Documents, any schedule
required to be filed by Buyer with the SEC or any amendment or supplement will
contain, on the date of filing with the SEC, any untrue statement of a material
fact or will omit to state any material fact required to be stated therein or
necessary in order to make the statements made therein, in light of the
circumstances under which they are made, not misleading, except that no
representation is made by Buyer with respect to information supplied by the
Company specifically for inclusion in the Offer Documents, any schedule required
to be filed with the SEC or any amendment or supplement. None of the information
supplied by Buyer in writing specifically for inclusion or incorporation by
reference in the Schedule 14D-9 will, at the date of filing with the SEC,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. If at any time prior to acceptance of shares of Common Stock
tendered pursuant to the Offer Buyer shall obtain knowledge of any facts with
respect to itself, any of its officers and directors that would require the
supplement or amendment to any of the foregoing documents in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, or to comply with applicable Laws, such amendment or
supplement shall be promptly filed with the SEC and, as required by Law,
disseminated to the stockholders of the Company, and in the event the Company
shall advise Buyer as to its obtaining knowledge of any facts that would make it
necessary to supplement or amend any of the foregoing documents, Buyer shall
promptly amend or supplement such document as required and distribute the same
to the stockholders of the Company.
(e) Financing. Buyer will deposit into escrow pursuant to
Section 3.3 cash in the amount of $16,724,735.
SECTION 2.2 Representations and Warranties of the Company. The
Company hereby represents and warrants to Buyer as follows:
(a) Existence; Good Standing. The Company is an entity duly
organized, validly existing and in good standing under the laws of its
jurisdiction of organization.
(b) Authorization, Validity and Effect of Agreements. The
Company has the requisite power and authority to execute and deliver this
Agreement and all agreements and documents contemplated hereby. The consummation
by the Company of the transactions contemplated hereby has been duly authorized
by all requisite action. This Agreement constitutes, and all agreements and
documents contemplated hereby (when executed and delivered pursuant hereto for
value received) will constitute, the valid and legally binding obligations of
the Company, enforceable in accordance with their respective terms, subject to
applicable bankruptcy, insolvency, moratorium or other similar laws relating to
creditors' rights and general principles of equity.
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(c) No Violation. Neither the execution and delivery by the
Company of this Agreement, nor the consummation by the Company of the
transactions contemplated hereby in accordance with the terms hereof, will: (i)
conflict with or result in a breach of any provisions of the charter, bylaws,
partnership agreement, operating agreement or other operative document or
instrument of the Company; (ii) violate, or conflict with, or result in a breach
of any provision of, or constitute a default (or an event which, with notice or
lapse of time or both, would constitute a default) under, any of the terms,
conditions or provisions of any material license, certificate of authority,
franchise, permit, lease, contract, agreement or other instrument, commitment or
obligation to which the Company or any of its subsidiaries is a party, or by
which the Company or any of its subsidiaries or any of their properties is bound
or affected, except for any of the foregoing matters which would not have a
material adverse effect on the ability of the Company to perform its obligations
hereunder (a "Company Material Adverse Effect"); or (iii) other than expiration
or termination of the waiting period under the HSR Act and such regulatory
approvals as may be required under applicable securities laws, require any
material consent, approval or authorization of, or declaration, filing or
registration with, any domestic governmental or regulatory authority, the
failure to obtain or make which would have a Company Material Adverse Effect.
(d) No Brokers. The Company has not entered into any contract,
arrangement or understanding with any person or firm which may result in the
obligation of any party hereto to pay any finder's fees, brokerage or agent's
commissions in connection with the negotiations leading to this Agreement, the
Purchase Agreement, or the consummation of the transactions contemplated hereby
or thereby. The Company is not aware of any claim for payment of any finder's
fees, brokerage or agent's commissions or other like payments in connection with
the negotiations leading to this Agreement or the consummation of the
transactions contemplated hereby.
(e) Capitalization. The authorized capital stock of the
Company consists of 10,000,000 shares of Common Stock and 500,000 shares of
Serial Preferred Stock. As of May 14, 1997, there were 2,497,764 shares of
Common Stock and no shares of Serial Preferred Stock issued and outstanding.
Since such date, only such shares of Common Stock have been issued and only such
options to employees to purchase shares of Common Stock have been granted, such
that the Securities (as defined in the Purchase Agreement) to be purchased
pursuant to the Purchase Agreement constitute as of the date hereof, and will
constitute as of the Closing Time (as defined in the Purchase Agreement), at
least 53% of the shares of Common Stock and any and all other voting securities
of the Company on a fully diluted basis as of each of such dates. For purposes
of this Agreement, "fully diluted basis" shall mean the number of shares of
Common Stock then issued and outstanding, assuming full conversion, exercise and
exchange of all warrants, options and rights to purchase Common Stock and all
securities of any type that shall be (or may become) exchangeable for, or
exercisable or convertible into, Common Stock.
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There are not any existing options, rights, warrants, calls, subscriptions,
convertible securities, or other rights, agreements or commitments which
obligate the Company or any of its subsidiaries to issue, transfer or sell any
shares of capital stock of the Company or any of its subsidiaries, other than
options granted to employees to purchase 177,490 shares of Common Stock (i) in
accordance with the Company's past practices, and (ii) which together with
shares of Common Stock issued will not cause the third sentence of this Section
2.2(e) to be false. There are no outstanding obligations of the Company to
purchase, redeem or otherwise acquire any shares of capital stock or voting
securities convertible or exercisable into or exchangeable for capital stock or
voting securities of the Company.
(f) Disclosure. The Company has furnished to Buyer true and
complete copies of all documents (other than preliminary material) that the
Company has filed with the SEC since January 1, 1995 (the "SEC Documents"). As
of their respective filing dates, the SEC Documents complied in all material
respects with the applicable requirements of the Securities Act of 1933, as
amended, or the Exchange Act, as applicable, were complete and correct in all
material respects as of the dates at which the information was furnished, and
contained (as of such dates) no untrue statement of a material fact necessary in
order to make the statements made therein, in light of the circumstances under
which they were made, not misleading.
(g) Takeover Laws. The restrictions on business combinations
set forth in Section 203 of the General Corporation Law of the State of Delaware
(the "GCL") and in Section 780 of the Business Corporation Act of the State of
Michigan (the "MBCA") are not applicable to the transactions contemplated by the
Purchase Agreement, this Agreement or the Offer. There are no provisions of the
GCL, the MBCA or any other applicable jurisdiction that would prevent the
consummation of the transactions contemplated by the Purchase Agreement, this
Agreement or the Offer or rights or benefits pertaining to ownership of the
Common Stock or the Company.
(h) Schedule 14D-9; Offer Documents. None of the Schedule
14D-9, any schedule report or other document filed or required to be filed by
the Company with the SEC or any amendment or supplement thereto, at the
respective times such documents are filed with the SEC or first published, sent
or delivered to the Company's stockholders, will contain any untrue statement of
a material fact or will omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in the light of
the circumstances under which they are made, not misleading except that no
representation is made by the Company with respect to information supplied by
Buyer specifically for inclusion in the Schedule 14D-9 or any amendment or
supplement. None of the information supplied or to be supplied by the Company
for inclusion or incorporation by reference in the Offer Documents will, at the
date of filing with the SEC, contain any untrue statement of a material fact or
omit to state any material fact required to stated therein or necessary in order
to make the statements therein, in the light of the circumstances under which
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they were made, not misleading. If at any time prior to the Purchase Date (as
defined below) the Company shall obtain knowledge of any facts with respect to
itself, any of its officers and directors that would require the supplement or
amendment to any of the foregoing documents in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, or to comply with applicable Laws, such amendment or supplement
shall be promptly filed with the SEC and, as required by Law, disseminated to
the stockholders of the Company, and if Buyer shall advise the Company as to
obtaining knowledge of any facts that would make it necessary to supplement or
amend any of the foregoing documents, the Company shall promptly amend or
supplement such document as required and distribute the same to its
stockholders. "Purchase Date" means the date upon which shares validly tendered
in the Offer are paid for.
SECTION 2.3 Representations and Warranties of Sellers. Sellers
hereby severally and not jointly represent and warrant to Buyer and the Company
as follows:
(a) Schedule 14D-9; Offer Documents. None of the Schedule
14D-9, any schedule, report or other document filed or required to be filed by
Sellers with the SEC or any amendment or supplement thereto, at the respective
time such documents are filed with the SEC or first published, sent or delivered
to the Company's stockholders, will contain any untrue statement of a material
fact or will omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they are made, not misleading except that no
representation is made by the Sellers with respect to information supplied by
Buyer specifically for inclusion in the Schedule 14D-9 or any amendment or
supplement. None of the information supplied or to be supplied by Sellers for
inclusion or incorporation by reference in the Offer Documents will, at the date
of filing with the SEC or first published, sent or delivered to the Company's
stockholders, contain any untrue statement of a material fact or omit to state
any material fact required to stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. If at any time prior to the Purchase Date either Seller
shall obtain knowledge of any facts with respect to itself, any of its officers,
partners and directors that would require the supplement or amendment to any of
the foregoing documents in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading, or to comply with
applicable Laws, such amendment or supplement shall be promptly filed with the
SEC and, as required by Law, disseminated to the stockholders of the Sellers.
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ARTICLE 3
COVENANTS
SECTION 3.1 Filings; Other Actions. The Company shall take
such actions as are necessary and appropriate in order to effect the provisions
of Section 5.4 of the Purchase Agreement. The Company and Sellers shall from
time to time, at the request of Buyer, execute and deliver such other
agreements, instruments and other documents, file such other schedules, reports
and other documents and shall take such other actions as Buyer may reasonably
request in order to effect the intent and purposes of this Agreement.
SECTION 3.2 No Solicitation. Neither the Company nor any of
its officers, directors, employees, agents, affiliates or representatives
(including, without limitation, any investment banker, attorney or accountant
retained by the Company) shall, directly or indirectly, solicit, initiate or
participate in or knowingly encourage, in any way, any discussions or
negotiations with, or provide any information to, or afford any access to the
properties, books or records of the Company to, or otherwise assist, facilitate
or knowingly encourage, any corporation, partnership, person or other entity or
group (other than Buyer or any affiliate of Buyer) with respect to any tender
offer, merger, consolidation, business combination, liquidation, reorganization,
sale of significant assets, sale of shares of capital stock or similar
transactions involving the Company or any part thereof (an "Alternative
Proposal"), and shall immediately cease and cause to be terminated any existing
activities, discussion or negotiations with any parties conducted heretofore
with respect to any of the foregoing. The Company shall promptly notify Buyer in
writing if any such information is requested from the Company, if any such
negotiations or discussions are sought to be initiated with the Company or if
any party makes an Alternative Proposal, including the identity of the person or
group requesting such information, proposing to engage in such negotiations or
discussions or making such Alternative Proposal, the material terms and
conditions of any Alternative Proposal and any subsequent developments with
respect thereto.
SECTION 3.3 Escrow Arrangements. Promptly following the
execution and delivery of this Agreement, Buyer, the Company and the Escrow
Agent (as defined below) shall enter into an escrow arrangement in form and
substance reasonably satisfactory to Buyer and the Company (the "Tender Escrow
Agreement"). Pursuant to the Tender Escrow Agreement, (a) Buyer will deposit in
cash $16,724,735 with the Escrow Agent, and (b) the Escrow Agent will hold such
cash in escrow. The Tender Escrow Agreement will provide, inter alia, that: (i)
promptly following the acceptance of shares of Common Stock in accordance with
the terms of the Offer, such cash shall be released from escrow and such
appropriate portion thereof shall be delivered to stockholders of the Company
whose shares of Common Stock have been validly tendered and accepted by Buyer
(with the balance thereof returned to Buyer); and (ii) if this Agreement and the
Offer is terminated pursuant to
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Article V, such cash shall be released from escrow and returned to Buyer.
"Escrow Agent" means an entity mutually selected by the Company and Buyer which
shall serve as escrow agent under the Tender Escrow Agreement.
SECTION 3.4 Certain Prohibited Actions. (a) The Company shall
not (i) declare, set aside or pay any dividends on, or make any other
distributions in respect of, any of its capital stock, (ii) split, combine or
reclassify any of its capital stock or issue or authorized the issuance of any
other securities in respect of, in lieu of or in substitution for shares of its
capital stock, or (iii) purchase, redeem, retire or otherwise acquire any shares
of its capital stock or any other securities thereof or any rights, warrants or
options to acquire any such shares or other securities, other than as required
pursuant to the provisions of the employee stock option plan of the Company as
in effect prior to the date hereof.
(b) The Company shall not issue, deliver, sell, pledge
otherwise encumber any shares of its capital stock, any other voting securities
or any securities convertible into, or any rights, warrants or options to
acquire any such shares, voting securities or convertible securities, other than
pursuant to options outstanding prior to the date hereof to purchase Common
Stock under the employee stock option plan of the Company as in effect prior to
the date hereof.
SECTION 3.5 Directors' and Officers' Liability Insurance. The
Company shall maintain in effect for two years from the date of acceptance for
payment of shares of Common Stock pursuant to the Offer directors' and officers'
liability insurance covering the persons who are currently covered in their
capacities as such directors and officers by the Company's existing directors'
and officers' policies and on terms substantially no less advantageous than such
existing insurance coverage; provided, however, that in no event shall the
Company be required to expend pursuant to this Section 3.5 more than an amount
per year equal to 150% of the current annual premiums paid by the Company for
such existing insurance coverage (the "Cap"); provided further, however, that if
equivalent coverage cannot be obtained, or can be obtained only by paying an
annual premium in excess of the Cap, the Company shall only be required to
obtain as much coverage as can be obtained by paying an annual premium equal to
the Cap.
ARTICLE IV
TERMINATION
SECTION 4.1 Termination by Mutual Consent. This Agreement may
be terminated and the Offer may be abandoned at any time prior to acceptance by
the Buyer of the shares of Common Stock tendered in connection with the Offer by
the mutual consent of the Company and Buyer.
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SECTION 4.2 Termination by Either Buyer or the Company. This
Agreement and the Offer may be terminated and the Offer may be abandoned by
Buyer or the Company if: (i) the conditions to the Offer set forth in Exhibit A
shall have not been satisfied by October 11, 1997; (ii) a United States federal
or state court of competent jurisdiction or United States federal or state
governmental, regulatory or administrative agency or commission shall have
issued an order, decree or ruling or taken any other action permanently
restraining, enjoining or otherwise prohibiting the transactions contemplated by
this Agreement and such order, decree, ruling or other action shall have become
final and non-appealable; provided, however, that the party seeking to terminate
this Agreement pursuant to this clause (ii) shall have used all efforts required
by this Agreement to remove such injunction, order or decree; (iii) if there
shall be any Law that makes consummation of the Offer illegal or prohibited;
(iv) by mutual agreement of the Company and Buyer; or (v) the Purchase Agreement
shall have terminated pursuant to Section 7.1 or 7.2 thereof.
ARTICLE V
GENERAL PROVISIONS
SECTION 5.1. Non-Survival of Representations and Warranties.
None of the representations and warranties made in this Agreement shall survive
the consummation of the Tender Offer. This Section 5.1 shall not limit any
covenant or agreement of the parties which by its terms contemplates performance
after consummation of the Tender Offer.
SECTION 5.2. Notices. Any notice required to be given
hereunder shall be sufficient if in writing, and sent by facsimile transmission
(with machine confirmation of delivery) or by courier service (with proof of
service), hand delivery (with proof of delivery) or certified or registered mail
(return receipt requested and first-class postage prepaid), addressed as
follows:
If to Buyer:
c/o Fahnestock & Co., Inc.
000 Xxxx Xxxxxx (0xx Xxxxx)
New York, N.Y. 10005
Att: Xxxxxx X. Xxxxxxxxx
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
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With a copy to:
Xxxxxxx Breed Xxxxxx & Xxxxxx
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Att: Richard Crystal, Esq.
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
If to the Company:
First of Michigan Capital Corporation
000 Xxxxxxxxxxx Xxxxxx
00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Att: Chairman
Tel: (000) 000-0000
Fax: (313)
If to Sellers:
1888 Limited Partnership
c/o Day, Xxxxx & Xxxxxx
Xxx Xxxxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
and
DST Systems, Inc.
0000 Xxxxxxxx
Xxxxxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
With a copy to:
Xxxxxxxxxxxx Xxxx & Xxxxxxxxx
0000 Xxxx Xxxxxx
Xxxxxx Xxxx, XX 00000
Att: Xxxx X. Xxxxxx, Esq.
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
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or to such other address as any party shall specify by written notice so given,
and such notice shall be deemed to have been delivered as of the date so
telecommunicated, personally delivered or mailed.
SECTION 5.3. Assignment; Binding Effect; Benefit. Neither this
Agreement nor any of the rights, interests or obligations hereunder shall be
assigned by any of the parties hereto (whether by operation of law or otherwise)
without the prior written consent of the other parties; provided, however, that
Buyer may assign this Agreement to any of its subsidiaries or affiliates whether
or not such subsidiaries or affiliates exist at the date hereof; provided
further, however, that no such assignment shall relieve Buyer of any of its
obligations hereunder. Subject to the preceding sentence, this Agreement shall
be binding upon and shall inure to the benefit of the parties hereto and their
respective successors and assigns. Notwithstanding anything contained in this
Agreement to the contrary, nothing in this Agreement, expressed or implied, is
intended to confer on any person other than the parties hereto or their
respective heirs, successors, executors, administrators and assigns any rights,
remedies, obligations or liabilities under or by reason of this Agreement.
SECTION 5.4. Entire Agreement. This Agreement constitutes the
entire agreement among the parties with respect to the subject matter hereof and
supersedes all prior agreements and understandings (oral and written) among the
parties with respect thereto. No addition to or modification of any provision of
this Agreement shall be binding upon any party hereto unless made in writing and
signed by all parties hereto.
SECTION 5.5. Amendment. This Agreement may be amended by the
parties hereto by an instrument in writing signed by or on behalf of each of the
parties hereto.
SECTION 5.6. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
REGARD TO ITS RULES OF CONFLICT OF LAWS.
SECTION 5.7. Counterparts. This Agreement may be executed by
the parties hereto (including by facsimile transmission) with separate
counterpart signature pages or in separate counterparts, each of which when so
executed and delivered shall be an original, but all such counterparts shall
together constitute one and the same instrument.
SECTION 5.8. Headings. Headings of the Sections of this
Agreement are for the convenience of the parties only, and shall be given no
substantive or interpretive effect whatsoever.
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SECTION 5.9. Interpretation. In this Agreement, unless the
context otherwise requires, words describing the singular number shall include
the plural and vice versa, and words denoting any gender shall include all
genders and words denoting natural persons shall include corporations and
partnerships and vice versa.
SECTION 5.10. Waivers. Except as provided in this Agreement,
no action taken pursuant to this Agreement, including without limitation any
investigation by or on behalf of any party, shall be deemed to constitute a
waiver by the party taking such action of compliance with any representations,
warranties, covenants or agreements contained in this Agreement. The waiver by
any party hereto of a breach of any provision hereunder shall not operate or be
construed as a waiver of any prior or subsequent breach of the same or any other
provision hereunder.
SECTION 5.11. Severability. Any term or provision of this
Agreement which is invalid or unenforceable in any jurisdiction shall, as to
that jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining terms
and provisions of this Agreement or otherwise affecting the validity or
enforceability of any of the terms or provisions of this Agreement in any other
jurisdiction. If any provision of this Agreement is so broad as to be
unenforceable, the provision shall be interpreted to be only so broad as is
enforceable.
SECTION 5.12. Enforcement of Agreement. The parties hereto
agree that irreparable damage would occur if any of the provisions of this
Agreement were not performed in accordance with its specific terms or was
otherwise breached. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions hereof, this being in addition to
any other remedy to which they may be entitled at law or in equity.
-15-
IN WITNESS WHEREOF, the parties have executed this Agreement and caused
the same to be duly delivered on their behalf as of the day and year first
written above.
THE COMPANY:
FIRST OF MICHIGAN CAPITAL
CORPORATION
By: /s/ Xxxxxx Xxxxx
----------------------------
Name: Xxxxxx Xxxxx
Title: Chairman of the Board
BUYER:
FMCC ACQUISITION CORP.
By: /s/ Xxxxxx X. Xxxxxxxxx
----------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Chairman and CEO
SELLERS:
1888 LIMITED PARTNERSHIP
By: /s/ Xxxxx X. Xxxxx
------------------------------
Name: Xxxxx X. Xxxxx
Title: General Partner
By: /s/ Xxxxx X. Xxxxx
------------------------------
Name: Xxxxx X. Xxxxx
Title: General Partner
DST SYSTEMS, INC.
By: /s/ Xxxxxxx X. Xxxxx
------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President, Chief
Financial Officer and Treasurer
EXHIBIT A
CONDITIONS OF THE OFFER
Notwithstanding any other term of the Offer or the Tender
Offer Agreement (the "Agreement"), Buyer shall not be required to accept for
payment or pay for, subject to any applicable rules and regulations of the SEC,
including Rule 14e-1(c) of the Exchange Act, any shares of Common Stock not
theretofore accepted for payment or paid for and may terminate or amend the
Offer as to such shares of Common Stock unless any waiting period under the HSR
Act applicable to the purchase of shares of Common Stock pursuant to the Offer
shall have expired or been terminated. Furthermore, notwithstanding any other
term of the Offer or the Agreement, Buyer shall not be required to accept for
payment or, subject as aforesaid, to pay for any shares of Common Stock not
theretofore accepted for payment or paid for, and may terminate or amend the
Offer if at any time on or after the date of the Agreement and prior to the
expiration of the Offer, any of the following conditions exist or shall occur
and remain in effect:
(a) a court of competent jurisdiction or other
governmental, quasi-governmental, self-regulatory agency or other
regulatory, judicial or arbitral body having jurisdiction over the
parties to the transaction shall have issued an order, judgment, decree
or ruling on the merits in connection with an action, suit or
proceeding; (i) which challenges or seeks to restrict the acquisition
by Buyer (or any of its affiliates) of shares of Common Stock pursuant
to the Offer or the Purchase Agreement, or obtain damages in connection
therewith; (ii) which seeks to make the purchase of or payment for some
or all of the shares of Common Stock pursuant to the Offer or the
Purchase Agreement illegal; (iii) which seeks to impose material
limitations on the ability of Buyer or any of its affiliates
effectively to acquire, operate or hold, or to require Buyer or any of
its affiliates to dispose of or hold separate, any material portion of
their assets or business or the Company's assets or business; or (iv)
which seeks to impose material limitations on the ability of Buyer or
its affiliates to exercise full rights of ownership of the shares of
Commons Stock purchased by it, including, without limitation, the right
to vote the shares purchased by it on all matters properly presented to
the stockholders of the Company; or
(b) there shall have been promulgated, enacted,
entered, enforced or deemed applicable to the Offer any Law or there
shall have been issued any injunction resulting in any of the
consequences referred to in subsection (a) above; or
(c) the Agreement shall have been terminated in
accordance with its terms; or
(d) (i) the representations and warranties made by
the Company or Sellers in the Agreement shall not be true and correct
as of the date of consummation
A-1
of the Offer as though made on and as of that date (other than
representations and warranties made as of a specified date) except for
any breach or breaches which, in the aggregate, would not have a
material adverse effect on the Company or its business; or (ii) the
Company or Sellers shall have breached or failed to comply in any
material respect with any of their respective obligations under this
Agreement and, with respect to any such failure that can be remedied,
the failure is not remedied within five business days after Buyer has
furnished the Company or Sellers, as the case may be, with written
notice of such failure; or
(e) any person (other than Buyer or its affiliates)
shall have entered into any agreement in principle or definitive
agreement with the Company with respect to a tender or exchange offer
for any shares of Common Stock, or a merger, consolidation or other
business combination with or involving the Company; or
(f) the Board of Directors shall have modified or
amended its recommendation of the Offer in any manner adverse to Buyer
or shall have withdrawn its recommendation of the Offer or shall have
recommended acceptance of any Alternative Proposal or shall have
resolved to do so; or
(g) there shall have occurred (i) any general
suspension of, or limitation on prices for, trading insecurities on any
national securities exchange or in the over-the-counter market in the
United States for a period in excess of ten (10) consecutive trading
hours, (ii) any declaration of any banking moratorium by any United
States federal or state authorities or any suspension of payments in
respect of banks, or (iii) a commencement of war, armed hostilities or
any other international or national calamity directly or indirectly
involving the United States which is reasonable expected to have a
material adverse effect on the Company or its business or to materially
adversely affect the Buyer's ability to complete the Offer; or
(h) the entire Board of Directors of the Company
shall be composed of designees of Buyer, provided Buyer shall have used
its best efforts to make such designations prior to the expiration of
the Offer.
The foregoing conditions are for the sole benefit of Buyer and
may be asserted by Buyer regardless of the circumstances (including any action
or inaction of Buyer) giving rise to any such condition and may be waived by the
Buyer, in whole or in part, at any time and from time to time, in the sole
discretion of Buyer. The failure by Buyer at any time to exercise any of the
foregoing rights will not be deemed a waiver of any right, the waiver of such
right with respect to any particular facts or circumstances shall not be deemed
a waiver with respect to any other facts or circumstances, and each right will
be deemed an ongoing right which may be asserted at any time and from time to
time.
Should the Offer be terminated pursuant to the foregoing
provisions, all tendered shares of Common Stock not theretofore accepted for
payment shall forthwith be returned by the depositary to the tendering
stockholder.
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