THIS PROXY IS SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS
The undersigned hereby appoints Lawrence R. Yurdin and Pricilla E.
Ottowell, and either of them, as proxyholders and attorneys-in-fact of the
undersigned, with full power of substitution, to vote all shares of stock that
the undersigned is entitled to vote at the Annual Meeting of Stockholders of The
First Connecticut Capital Corporation (the "Company") to be held at the First
Union Bank, Shelton Square Office, Greater Valley Chamber of Commerce,
Conference Room, 2nd Floor, 900 Bridgeport Avenue, Shelton, Connecticut on
Tuesday, June 3, 2003 at 9:30 a.m., local time, and at any continuation or
adjournment thereof, with all the powers that the undersigned would have if
personally present at the meeting.
The undersigned hereby acknowledges receipt of the Notice of Annual
Meeting and Proxy Statement, dated April 10, 2003, and a copy of the Company's
Annual Reports for the fiscal years ended March 31, 2002 and 2001 on Form
10-KSB, as amended, and quarterly report for the fiscal quarter ended December
31, 2002 on Form 10-QSB, as amended. The undersigned hereby expressly revokes
any and all proxies heretofore given or executed by the undersigned with respect
to the shares of stock represented by this Proxy and, by filing this Proxy with
the Secretary of the Company, gives notice of such revocation.
WHERE NO CONTRARY CHOICE IS INDICATED BY THE STOCKHOLDER, THIS PROXY,
WHEN RETURNED, WILL BE VOTED AS RECOMMENDED BY THE BOARD OF DIRECTORS FOR ALL
PROPOSALS AND WITH DISCRETIONARY AUTHORITY UPON SUCH OTHER MATTERS AS MAY
PROPERLY COME BEFORE THE MEETING. THIS PROXY MAY BE REVOKED AT ANY TIME PRIOR TO
THE TIME IT IS VOTED.
PLEASE COMPLETE, DATE AND SIGN THIS PROXY AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE.
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THE FIRST CONNECTICUT Mark, sign, and date your proxy card and return
CAPITAL CORPORATION it in the postage-paid envelope we have
provided or return it to the First Connecticut
Capital Corporation, Attn: Ms. Priscilla E.
Ottowell, Secretary, 1000 Bridgeport Avenue,
Shelton, Connecticut 06484.
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THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
1. To approve the Asset Purchase Agreement for the sale of the Company's
business and assets.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
2. To approve the Stock Purchase Agreement for the sale of 250,000
shares of the Company's Common Stock and Warrants to purchase 200,000
shares of the Company's Common Stock.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. Election of Directors.
Nominees:
FOR WITHHOLD
Martin Cohen [ ] [ ]
Bernard Zimmerman [ ] [ ]
Lawrence R. Yurdin [ ] [ ]
Michael L. Goldman [ ] [ ]
Jay J. Miller [ ] [ ]
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4. To adopt the Company's 2002 Equity Incentive Plan.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
5. To approve an amendment to the Company's Certificate of
Incorporation, as amended, to change the Company name from The First
Connecticut Capital Corporation to FCCC, Inc.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
6. To approve the appointment of the firm of Saslow Lufkin & Buggy, LLP
as auditors of the Company for the fiscal year ending March 31, 2003.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
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7. To approve the postponement or adjournment of the meeting, if
necessary, to solicit additional proxies.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
8. To transact any other business that may properly come before the
meeting or any adjournment of the meeting.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
Please date and sign exactly as your name or names appear herein. Corporate or
partnership proxies should be signed in full corporate or partnership name by an
authorized person. Persons signing in a fiduciary capacity should indicate their
full title in such capacity.
---------------------------------------- ------------
Signature Date
---------------------------------------- ------------
Signature Date
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ANNEX A
Asset Purchase Agreement
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement ("Agreement") is made this 28th day of
June, 2002 by and between FCCC Holding Company, LLC, a limited liability company
duly organized under the laws of the State of Connecticut ("Buyer"), The First
Connecticut Capital Corporation, a corporation duly organized under the laws of
the State of Connecticut ("Seller" or "Company").
WHEREAS Seller is the owner of certain assets used in connection with
the operation of its business; and
WHEREAS, the members and managers of Buyer are or have been current
officers and directors of the Seller and are familiar with the management and
operations of the Seller; and
WHEREAS Buyer desires to purchase the hereinafter described assets of
Seller pursuant to the terms and conditions set forth herein; and
WHEREAS Seller desires to sell and transfer such assets to Buyer
pursuant to the terms and conditions set forth herein:
NOW, THEREFORE, for and in consideration of the premises and mutual
promises and covenants hereinafter contained, it is agreed between Buyer and
Seller as follows:
1. PURCHASE AND SALE OF ASSETS
Subject to the terms and conditions of this Agreement, at the Closing
(as hereinafter defined) Seller shall sell, convey, assign, transfer and deliver
to Buyer, and Buyer shall purchase and acquire from Seller, all of Seller's
right, title and interest in, to and under those assets set forth in Schedule
1(a) (the "Assets"), attached hereto and deemed a part hereof.
2. EFFECTIVE TIME. The transaction contemplated by this Agreement
shall become effective as of 10 a.m. on the Closing Date, as defined
hereinbelow, at which time the risk of loss with respect to the Assets shall
pass to Buyer.
3. PURCHASE PRICE.
As consideration for the Assets being purchased hereby, Buyer shall
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(a) Pay to Seller on the Closing Date, by bank or certified check or
by wire transfer of funds in an e aggregate sum equal to the approximate Net
Book Value of the Assets, as determined, in part, by an independent appraisal of
the assets within the Seller's portfolio of real estate mortgage loans (the
"Purchase Price");
(b) Assume all of the liabilities of the Seller, including, but not
limited to those as set forth and described on Schedule 3(b) (the "Liabilities")
attached hereto and made a part hereof and indemnify and hold Seller harmless
with respect thereto;
(c) Assume and agree to satisfy, when due, all of the Seller's duties
and obligations under and with respect to those certain contracts and
agreements, set forth on Schedule 3(c) (the "Contracts"), attached hereto and
made a part hereof and indemnify and hold Seller harmless with respect thereto;
and
(d) Assume and agree to discharge, when due, all debts, duties,
liabilities and obligations of the Seller to the Seller's employees, including,
but not limited to those listed on Schedule 3(d) attached hereto and made a part
hereof as a result of their employment and any employment, benefit or
compensation arrangement between such employees and the Seller (collectively,
the "Employment Obligations") and indemnify and hold Seller harmless with
respect thereto and execute any and all documents and instruments as may be
reasonably necessary to effectuate the assumption of liabilities and
indemnification of Seller set forth in Section 5.2.1 hereinbelow.
4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER.
4.1 REPRESENTATIONS AND WARRANTIES. Seller represents and warrants as
follows:
4.1.1 EXISTENCE/AUTHORIZATION. Seller is a corporation duly organized
and validly existing under the laws of the State of Connecticut
4.1.2 CORPORATE POWER. The Seller has full power and authority to
execute and deliver this Agreement and such other agreements and instruments to
be executed and delivered by it pursuant hereto, and, subject to shareholder
approval, to consummate the transactions contemplated hereby and thereby. All
corporate acts and other proceedings required to be taken by or on the part of
Seller to authorize it to execute, deliver and perform this Agreement and such
other agreements, instruments and transactions contemplated hereby have been
duly and properly taken, subject only to shareholder approval.
4.1.3 BINDING OBLIGATION; GOVERNMENTAL CONSENTS. This Agreement has
been duly executed and delivered by Seller, and such other agreements and
instruments contemplated hereby when duly executed and delivered by Seller will
constitute, legal, valid and binding obligations of Seller enforceable in
accordance with their respective terms, subject to shareholder approval as to
enforcement of remedies, to applicable bankruptcy, reorganization, insolvency,
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moratorium or other similar laws affecting the enforcement of creditors' rights
generally from time to time in effect, and subject to any equitable principles
limiting the right to obtain specific performance of certain obligations of
Seller hereunder and thereunder. All consents of governmental and other
regulatory authorities and of other parties required to be received by or on the
part of Seller to enable it to enter into and carry out this Agreement and the
transactions contemplated hereby have been obtained or shall be obtained prior
to Closing. Without limiting the foregoing, Seller has made or shall make prior
to Closing, all such filings and submissions which may be required under
applicable law for Seller to consummate the transactions contemplated hereby.
Neither the execution and delivery of this Agreement nor the consummation by
Seller of the transactions contemplated hereby will (i) violate or conflict with
any of the provisions of the Articles of Incorporation or By-laws of Seller; or
(ii) to Seller's knowledge, violate or constitute a default under any note,
bond, mortgage, indenture, contract, agreement, license or other instrument or
any order, judgment or ruling of any governmental authority to which Seller is a
party or by which any of their respective properties are bound. Other than the
approval of Seller's shareholders, to Seller's knowledge, no other consent,
approval, license, permit, or authorization of, or registration, declaration or
filing with, any state or federal court, administrative agency or commission or
other governmental authority or instrumentality, or of any other third party, is
required to be obtained or made by Seller in connection with the execution and
delivery of this Agreement or the consummation of the transactions contemplated
hereby other than those that may be required solely by reason of Buyer's (as
opposed to any third party's) participation in the transactions contemplated
hereby.
4.1.4 STATEMENTS AS TO KNOWLEDGE. All representations and warranties
of Seller set forth herein which are qualified as to knowledge are deemed to be
made after diligent inquiry by each party making such representations and
warranties.
4.2 COVENANTS. Seller covenants as follows:
4.2.1 REAL PROPERTY. Seller shall cooperate with Buyer subsequent to
the Closing so as to permit and assist Buyer to assume the existing obligations
of Seller with respect to the lease covering the Seller's facilities located at
1000 Bridgeport Avenue, Shelton, CT (the "Lease"), subject to Buyer arranging
for Landlord's consent to the assignment by Seller to Buyer of said Lease and
Landlord releasing Seller from any obligations thereunder.
4.2.2 INTELLECTUAL PROPERTY. Seller shall cooperate with Buyer
subsequent to Closing to perfect Buyer's right and interest to any such patents,
trademarks, trade names, service marks, service names, copyrights and
applications therefor, programs (including source codes and other documentation)
and other intellectual property owned by or registered in the name of, or used
in the business of, Seller (collectively, the "Intellectual Property") including
the registration thereof.
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4.2.3 TAXES. At Buyer's request and provided Buyer provides Seller
with the necessary funds, Seller shall make, on Buyer's behalf, all appropriate
remittances in connection with all federal, state, local and foreign or other
taxes (including franchise taxes or fees) and assessments, measured by income or
otherwise, any Social Security taxes, any direct tax, withholding tax, payroll
tax, any stamp taxes, sales or use taxes and capital taxes, and customs charges,
including all interest, penalties and additions imposed upon Seller for any
period prior to the Closing Date (collectively, the "Taxes") which were due,
owing, accrued or payable by Seller, but unpaid prior to the date of the
Closing.
4.2.4 NON-COMPETITION/NON-SOLICITATION. Seller shall not, directly or
indirectly, for a period of one (1) year after the Closing Date, without prior
express written consent of the Buyer:
(i) Be engaged in any work or other activity anywhere in the
State of Connecticut (the "Territory"), or if the business is located
in another jurisdiction, conduct in the Territory, whether as owner,
stockholder, partner, consultant, employer, employee or otherwise, a
real estate construction mortgage lending business (the "Business").
(ii) Either on behalf of itself or any other person, firm or
company anywhere in the Territory, or if the business is located in
another jurisdiction in the Territory, canvass or solicit business
from or in any way interfere with any person, firm or company who
shall at any time have been directly or indirectly a customer or
customers of the Buyer or any of its affiliated companies with
respect to the Business, nor
(iii) Employ, solicit or endeavor to entice away from the Buyer
or any affiliated companies any person who is or was an employee of
such company during the two (2) years immediately preceding the
Closing Date.
4.2.5 DECLARATION OF DIVIDEND. Not later than ninety (90) days
subsequent to the Closing, the Company shall distribute to its stockholders in
the form of a dividend all of its cash that exceeds the sum of One Million Two
Hundred Fifty Thousand Dollars ($1,250,000), after the payment of all costs,
fees and expenses, billed or accrued, associated with the transactions
contemplated and described by this Agreement and after provision for any unpaid
obligations of the Seller arising prior to the Closing and excluding all cash
derived from the sale of shares of the Company's Common Stock to Messrs Martin
Cohen and Bernard Zimmerman and/or their affiliates (collectively, the
"Investors"), as set forth and in described in that certain Stock Purchase
Agreement between the Company and the Investors, of even date herewith, (the
"Stock Purchase Agreement") provided that such dividend shall be payable only if
it equals or exceeds fifteen cents ($.15) per outstanding share of Common Stock
of the Company.
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4.2.6 CORPORATE NAME CHANGE. Immediately subsequent to the Closing,
provided Seller's shareholders shall have approved, Seller will change its
corporate name so that it no longer contains the words "First Connecticut
Capital".
5. REPRESENTATIONS, WARRANTIES AND COVENANTS OF BUYER.
5.1 REPRESENTATIONS AND WARRANTIES. Buyer hereby represents and
warrants to Seller as of the date hereof and at the Closing as follows:
5.1.1 EXISTENCE. Buyer is a limited liability company duly organized
and validly existing under the laws of the State of Connecticut. Buyer has the
corporate power to own and operate its properties and to carry on its business
as it is now being conducted.
5.1.2 POWER AND AUTHORITY. Buyer has full legal power and authority
to execute and deliver this Agreement and such other agreements and instruments
to be executed and delivered by it pursuant hereto, and to consummate the
transactions contemplated hereby and thereby. All acts and other proceedings
required to be taken by or on the part of the Buyer to authorize it to execute,
deliver and perform this Agreement and such other agreements, instruments and
transactions contemplated hereby have been duly and properly taken.
5.1.3 BINDING OBLIGATION; GOVERNMENTAL CONSENTS. This Agreement has
been duly executed and delivered by Buyer and constitutes, and such other
agreements and instruments when duly executed and delivered by Buyer will
constitute, legal, valid and binding obligations of Buyer enforceable in
accordance with their respective terms, subject, as to enforcement of remedies,
to applicable bankruptcy, reorganization, insolvency, moratorium or other
similar laws affecting the enforcement of creditors' rights generally from time
to time in effect, and subject to any equitable principles limiting the right to
obtain specific performance of certain obligations of Buyer hereunder and
thereunder. All consents of governmental and other regulatory authorities and of
other parties required to be received by or on the part of either Buyer or
Seller to enable it to enter into and carry out this Agreement and the
transactions contemplated hereby have been obtained. Without limiting the
foregoing, Buyer and Seller each has made all such filings and submissions which
may be required under applicable law for Buyer or Seller to consummate the
transactions contemplated hereby. Neither the execution and delivery of this
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Agreement nor the consummation by Buyer of the transactions contemplated hereby
will (i) violate or conflict with any of the provisions of the Articles of
Incorporation or By-laws of Buyer; or (ii) violate or constitute a default under
any note, bond, mortgage, indenture, contract, agreement, license or other
instrument or any order, judgment or ruling of any governmental authority to
which Buyer is a party or by which any of its properties are bound. No other
consent, approval, license, permit, or authorization of, or registration,
declaration or filing with, any state or federal court, administrative agency or
commission or other governmental authority or instrumentality, or of any other
third party, is required to be obtained or made by Buyer in connection with the
execution and delivery of this Agreement or the consummation of the transactions
contemplated hereby other than those that may be required solely by reason of
Seller's (as opposed to any third party's) participation in the transactions
contemplated hereby, i.e. shareholder approval.
5.1.4 BROKERS/FINDERS. Neither Buyer nor any of Buyer's directors,
employees or agents has employed any broker, finder, investment banker or other
person and none of the foregoing has incurred any liability for any brokerage
fees, commissions or finders' fees to any other parties in connection with the
transactions contemplated hereby. Without limiting any other indemnification set
forth herein, Buyer hereby indemnifies Seller and holds Seller harmless from and
against any and all claims, liabilities and/or causes of action for any
brokerage fees, commissions, finder's fees or the like arising out of the
transactions contemplated hereby.
5.2 COVENANTS. Buyer hereby covenants to Seller the following:
5.2.1 ASSUMPTION OF AND INDEMNIFICATION WITH RESPECT TO LIABILITIES.
Without limiting any other indemnification set forth herein, as of the Closing
Date, Buyer shall take all steps necessary to terminate or assume and cause
Seller to be released from, and shall indemnify, defend and hold Seller harmless
from and against any and all debts, claims, liabilities, obligations, actions
and/or damages, related to any event or circumstance which occurred at any time
prior or subsequent to the Closing relating to:
(a) The Contracts;
(b) Any liabilities or obligations of any nature related to
any event or circumstance which occurred at any time
prior to the Closing, including but not limited to (i) as set forth or reflected
on the Seller's fiscal year 2001 and 2002 audited balance sheets or described in
notes therein, including but not limited to Seller's line of credit with Hudson
United bank and any other loan, or credit facility of which Seller is a
borrower, guarantor or obligor , (ii) as disclosed in this Agreement or the
Schedules or Exhibits hereto, (iii) as related to any purchase contracts or
orders for inventory in the ordinary course of business consistent with past
practice, and (iv) as incurred in the ordinary course of business consistent
with past practice or otherwise between March 31, 2002 and the Closing Date and
not in violation of this Agreement (collectively, the "Disclosed Liabilities');
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(c) The Taxes;
(d) Any partnership, joint venture or similar entity of
which Seller is a member of or participant (collectively,
the "Affiliated Entities") , for which Buyer or an affiliate of Buyer shall as
of the Closing, be substituted for Seller with respect to such membership or
participation, as the case may be, and obtain a release of Seller from each such
entity;
(e) The Employment Obligations;
(f) The Lease; and
(g) Any loan participations in which Seller is a party.
5.2.2 MINIMAL TANGIBLE NET WORTH. For the period commencing
on the Closing Date and terminating on the third anniversary of the Closing
Date, Buyer shall maintain a tangible net worth of not less than $1,000,000 and,
not later than sixty (60) days after the expiration of each six (6) month period
following the Closing, provide an Officer's Certificate of Buyer attesting to
compliance with such net worth requirement.
6. INDEMNIFICATION.
6.1 INDEMNIFICATION BY SELLER. Without limiting any other
indemnification set forth herein, Seller hereby agrees to indemnify and defend
Buyer against and hold it harmless from any loss, liability, claim, damage or
expense (including reasonable legal fees and expenses) suffered or incurred by
Buyer to the extent arising from any breach of any representation, warranty or
covenant of the Seller contained in this Agreement. In addition, Seller hereby
agrees to indemnify Buyer against all liability for reasonable legal, accounting
and other fees and expenses directly attributable to any such indemnification.
6.2 INDEMNIFICATION BY BUYER. Buyer shall indemnify and defend Seller
against, and hold it harmless from, any loss, liability, claim, damage or
expense (including reasonable legal fees and expenses) suffered or incurred by
Seller to the extent arising from any breach of any representation, warranty or
covenant of Buyer set forth herein or arising from the conduct of the business
relating to the Assets after the Closing. In addition, Buyer agrees to indemnify
Seller against all liability for reasonable legal, accounting and other fees and
expenses directly attributable to any such indemnification.
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7. DURATION OF REPRESENTATIONS. The representations, warranties,
covenants and indemnities in this Agreement and in any other document delivered
in connection herewith (other than those with respect to the Taxes, which shall
continue until the expiration of each statutory period of limitations), shall
continue until the close of business on the date which is two (2) years
following the Closing Date, unless the specific provision herein for which
indemnification is sought has a longer duration.
8. CONFIDENTIAL INFORMATION. Each party agrees to maintain as
confidential all information which is delivered to it by the other and agrees
further not to disclose the same to any third party whatsoever or use any such
information for any purpose except in connection with the implementation of the
undertakings of the parties described herein, PROVIDED, HOWEVER, that the Seller
may be required to release information concerning the transactions contemplated
hereby in furtherance of its responsibilities as a publicly traded company.
9. CLOSING. The Closing of the transactions contemplated hereby shall
take place at the offices of Seller, 1000 Bridgeport Avenue, Shelton,
Connecticut and shall occur on or about the tenth (10th) business day following
the approval by the Seller's shareholders of the transactions contemplated and
described by this agreement. If the Closing has not occurred on or prior to
October 31, 2002, and the Buyer has not waived any conditions precedent, the
obligation of Buyer to close the transactions contemplated hereby shall be null
and void unless waived in writing by Buyer.
10. CONDITIONS PRECEDENT TO CLOSING.
(a) The obligation of Buyer to consummate the transactions
contemplated herein and to perform its obligations hereunder on or
prior to the Closing Date is, at the option of Buyer, subject to the
following conditions, any or all of which may be waived by Buyer in
whole or in part at or prior to the Closing:
(i) no action or proceeding shall have been instituted or threatened
or claim or demand made against Buyer or Seller before any court
or other governmental body, seeking to restrain or prohibit, or
to obtain damages with respect to, the consummation of the
transactions contemplated hereby, or which, if adversely
determined to Buyer or Seller, might have a material adverse
effect on the Assets or the business, operations or prospects of
Buyer or Seller;
(ii) since March 31, 2002 there shall not have been any change,
destruction or loss, whether or not covered by insurance,
materially and adversely affecting the Assets or the business of
Seller or any suit, action or proceeding pending or threatened
which, if adversely determined, would result in the loss of a
material part of the Assets or would adversely affect Seller's
business;
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(iii) Seller shall deliver to Buyer a certificate of an officer of
Seller stating that the transactions contemplated hereby have
been approved by Seller's stockholders;
(iv) Seller shall deliver to Buyer a certificate executed by an
authorized representative of Seller certifying that each of the
representations, warranties and covenants of Seller herein shall
be true and correct in all respects on the date hereof and on
the Closing Date;
(v) The execution by the counterparties to the Contracts, the Lease
and the constituent documents of the Affiliated Entities of
consents to the transfer of each such contract, agreement or
instrument to the Buyer, to the extent required;
(vi) Seller shall deliver to Buyer a certificate of an officer of
Seller stating that the Seller's Board of Directors and
shareholders have approved the transactions contemplated and
described herein;
(b) The obligation of Seller to consummate the
transactions contemplated herein and to perform its obligations hereunder on and
after the Closing Date is, at the option of the Seller, subject to the following
conditions, any or all of which may be waived by Seller in whole or in part at
or prior to the Closing:
(i) no action or proceeding shall have been instituted
or threatened or claim or demand made against Buyer or Seller
before any court or other governmental body, seeking to restrain
or prohibit, or seeking to obtain damages with respect to, the
consummation of the transactions contemplated hereby;
(ii) The Seller shall have received an appraisal from
a qualified loan asset valuation company and a fairness opinion
from an NASD registered Broker-Dealer confirming and certifying
that the consideration to be paid by the Buyer for the Assets
and the other terms and conditions of the transactions
contemplated and described herein are fair and reasonable.
(iii) Upon consummation of the transactions
contemplated and described herein, the Seller shall have, net of
all costs, fees and expenses associated with such transactions
and after provision for any obligations of the Seller arising
prior to the Closing, excluding all cash derived from the sale
of shares of the Company's Common Stock to the Investors, as set
forth and described in the Stock Purchase Agreement, not less
than One Million Two Hundred Fifty Thousand Dollars
($1,250,000).
(iv) The Contracts, Disclosed Liabilities, Taxes,
Affiliated Entities, Lease and Employment Obligations shall have
been terminated or assumed by Buyer or Buyer shall have
indemnified and held Seller harmless with respect to same to
Seller's reasonable satisfaction.
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11. MISCELLANEOUS PROVISIONS.
11.1 FURTHER ASSURANCES. Each party hereto agrees to execute and
deliver such other documents, agreements or instruments and take such further
action as may be reasonably requested by any other party hereto for the
implementation of this Agreement and the consummation of the transactions
contemplated hereby.
11.2 NOTICES. Any notices required or permitted hereunder shall be
sufficiently given if in writing and personally delivered, by telecopy and
confirmed by telephone, by nationally recognized overnight courier, or by
certified or registered mail, postage prepaid, addressed as follows or to such
other address as the parties shall have given notice of pursuant hereto:
(a) If to the Seller:
The First Connecticut Capital Corporation
1000 Bridgeport Avenue
Shelton CT 06484
With a copy to:
Duane L. Berlin, Esq.
Lev & Berlin, P.C.
535 Connecticut Avenue
Norwalk, CT 06851
(b) If to Buyer: FCCC Holding Company, LLC
1000 Bridgeport Avenue Shelton, CT
06484 Attention: Lawrence R. Yurdin,
President
With a copy to:
Michael L. Goldman, Esquire
Goldman & Gruder, L.L.C.
200 Connecticut Avenue
Suite 2F
Norwalk, CT 06854
All such notices shall be effective upon the earlier of receipt or, in the case
of certified or registered mail, seven (7) days after depositing in the mail,
postage prepaid, return receipt requested and addressed as shown above.
11.3 ENTIRE AGREEMENT. This Agreement (including the Schedules and
Exhibits hereto) represents the entire understanding and agreement between the
parties with respect to the subject matter hereof and can be amended,
supplemented or changed, and any provision hereof can be waived, only by written
instrument making specific reference to this Agreement signed by the parties
hereto. This Agreement supersedes all prior agreements and arrangements between
the parties hereto and their affiliates.
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11.4 SUCCESSORS AND ASSIGNS; BENEFITS. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and, except as
otherwise provided below, their respective successors and assigns. Nothing
contained in this Agreement or in any of the Schedules or Exhibits hereto is
intended to create any rights in any person or entity that is not a party to
this Agreement and no person or entity shall be deemed to be a third party
beneficiary hereof or thereof.
11.5 SECTION HEADINGS. The section headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
11.6 APPLICABLE LAW. This Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of Connecticut,
without regard to the principles thereof relating to conflicts of law. The
parties hereto consent to the jurisdiction of the courts of the State of
Connecticut and the United States District Court for the District of
Connecticut.
11.7 EXPENSES. Except as otherwise provided herein, the parties
hereto shall pay their own respective fees and expenses, including without
limitation, attorneys' fees.
11.8 SEVERABILITY. If any provision of this Agreement shall be held
by any court of competent jurisdiction to be illegal, void or unenforceable,
such provision shall be of no force and effect, but the illegality or
unenforceability of such provision shall have no effect upon and shall not
impair the enforceability of any other provision of this Agreement.
11.9 PUBLICITY. Except as required by law or as part of Seller's
responsibilities as a publicly traded corporation, none of the parties hereto
shall issue any press release or make any other public statement or announcement
relating to, connected with or arising out of this Agreement or the matters
contained herein, without obtaining the prior written approval of the other
parties hereto to the contents and the manner of presentation and publication
thereof. Notwithstanding the foregoing, after the Closing Buyer and/or Seller
may issue any such release, statement or announcement as it reasonably deems
appropriate.
11.10 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which taken
together shall constitute one and the same instrument. This Agreement may be
executed by telecopied signatures with the same effect as original signatures.
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11.11 SCHEDULES AND EXHIBITS. All Schedules and Exhibits referenced
herein are incorporated herein by reference and shall be initialed by both
parties in order to be deemed an integral part of this Agreement. The contents
of such Schedules and Exhibits are deemed to be disclosures to Buyer by Seller.
In the event that any Schedule or Exhibit provided for herein is incomplete or
has not been prepared by Seller and attached hereto as of the execution and
delivery of this Agreement, it shall be a condition precedent to Closing that
such Schedule or Exhibit shall be in form and substance reasonably satisfactory
to Buyer.
EXECUTED as of the date first indicated above:
------------------------------------- -----------------------------------------
FCCC HOLDING COMPANY, LLC THE FIRST CONNECTICUT CAPITAL CORPORATION
------------------------------------- -----------------------------------------
------------------------------------- -----------------------------------------
By:_____________________________ By:_______________________________
Its: Its:
------------------------------------- -----------------------------------------
|
A-12
SCHEDULE 1(A) AND 3(B)
THE FIRST CONNECTICUT CAPITAL CORPORATION
Asset and Liability Schedule
12-Jun-02
ASSETS:
Loans net of provision 3,591,207
Interest receivable 1,286
Prepaid expenses less state corp tax 12,794
Investments in Partnerships 20,125
Servicing Rights FCCC 69,000
Leasehold Furniture & Fixtures less depreciation
14,401
---------
TOTAL ASSETS
3,708,813
LIABILITIES:
Accounts payable
Credit line Hudson 289,270
Payroll taxes payable 2,040,225
4,774
TOTAL LIABILITIES ---------
2,334,269
|
A-13
AMENDMENT TO
ASSET PURCHASE AGREEMENT
This amendment (the "Amendment") is made as of this 30 day of
October, 2002 by and between The First Connecticut Capital Corporation, a
Connecticut corporation ("Seller" or "Company") and FCCC Holding Company, LLC, a
limited liability company duly organized under the laws of the State of
Connecticut ("Buyer").
W I T N E S S E T H:
WHEREAS, on June 28, 2002, the Company and Buyer entered into that
certain Asset Purchase Agreement (the "Agreement") whereby the Company agreed to
sell, convey, assign, transfer and deliver to Buyer, and Buyer agreed to
purchase and acquire from Company, all of Company's right, title and interest
in, to and under those assets set forth in the Agreement.
NOW THEREFORE, the Company and Buyer, in consideration of mutual
value, the receipt and sufficiency of which is hereby acknowledged, do hereby
agree to amend and modify the Agreement, as amended, as follows:
1. Paragraph 9. CLOSING, shall be deleted in its entirety and replaced
with the following:
"9. CLOSING. The Closing of the transactions contemplated hereby
shall take place at the offices of Seller, 1000 Bridgeport Avenue,
Shelton, Connecticut and shall occur on or about the tenth (10th)
business day following the approval by the Seller's shareholders of
the transactions contemplated and described by this agreement. If the
Closing has not occurred on or prior to December 30, 2002, and the
Buyer has not waived any conditions precedent, the obligation of
Buyer to close the transactions contemplated hereby shall be null and
void unless waived in writing by Buyer."
2. Except as specifically set forth herein, the Agreement, as amended,
shall remain unchanged and in full force and effect.
3. The execution, delivery and performance by the parties of this
Amendment have been duly authorized by all necessary corporate
action.
4. This Amendment, together with the Agreement, hereby constitutes the
legal, valid and binding obligations of the Company and the Buyer as
applicable and is enforceable against each party in accordance with
its terms.
IN WITNESS WHEREOF, the parties hereto have executed this Second Amendment
as of the day and year first above written.
FCCC HOLDING COMPANY, LLC THE FIRST CONNECTICUT
CAPITAL CORPORATION
By:____________________________ By:____________________________
|
Its: Its:
A-14
SECOND AMENDMENT TO
ASSET PURCHASE AGREEMENT
This amendment (the "Second Amendment") is made as of this 15th day
of December, 2002 by and between The First Connecticut Capital Corporation, a
Connecticut corporation ("Seller" or "Company") and FCCC Holding Company, LLC, a
limited liability company duly organized under the laws of the State of
Connecticut ("Buyer").
W I T N E S S E T H:
WHEREAS, on June 28, 2002, the Company and Buyer entered into that
certain Asset Purchase Agreement (the "Agreement") whereby the Company agreed to
sell, convey, assign, transfer and deliver to Buyer, and Buyer agreed to
purchase and acquire from Company, all of Company's right, title and interest
in, to and under those assets set forth in the Agreement.
WHEREAS, as of October 30, 2002, the Company and Purchasers entered
into that certain Amendment to Stock Purchase Agreement (the "First Amendment")
whereby the parties agreed to amend and modify the Agreement.
NOW THEREFORE, the Company and Buyer, in consideration of mutual
value, the receipt and sufficiency of which is hereby acknowledged, do hereby
agree to amend and modify the Agreement, as amended, as follows:
Paragraph 9. CLOSING, shall be deleted in its entirety and replaced with the
following:
1. "9. CLOSING. The Closing of the transactions contemplated hereby
shall take place at the offices of Seller, 1000 Bridgeport Avenue,
Shelton, Connecticut and shall occur on or about the tenth (10th)
business day following the approval by the Seller's shareholders of
the transactions contemplated and described by this agreement. If the
Closing has not occurred on or prior to February 28, 2002, and the
Buyer has not waived any conditions precedent, the obligation of
Buyer to close the transactions contemplated hereby shall be null and
void unless waived in writing by Buyer."
2. Except as specifically set forth herein, the Agreement, as amended,
shall remain unchanged and in full force and effect.
3. The execution, delivery and performance by the parties of this Second
Amendment have been duly authorized by all necessary corporate
action.
4. This Second Amendment, together with the First Amendment and the
Agreement, hereby constitutes the legal, valid and binding
obligations of the Company and the Buyer as applicable and is
enforceable against each party in accordance with its terms.
IN WITNESS WHEREOF, the parties hereto have executed this Second Amendment
as of the day and year first above written.
FCCC HOLDING COMPANY, LLC THE FIRST CONNECTICUT
CAPITAL CORPORATION
By:____________________________ By:____________________________
|
Its: Its:
A-15
THIRD AMENDMENT TO
ASSET PURCHASE AGREEMENT
This amendment (the "Third Amendment") is made as of this ___ day of
February, 2003 by and between The First Connecticut Capital Corporation, a
Connecticut corporation ("Seller" or "Company") and FCCC Holding Company, LLC, a
limited liability company duly organized under the laws of the State of
Connecticut ("Buyer").
W I T N E S S E T H:
WHEREAS, on June 28, 2002, the Company and Buyer entered into that
certain Asset Purchase Agreement (the "Agreement") whereby the Company agreed to
sell, convey, assign, transfer and deliver to Buyer, and Buyer agreed to
purchase and acquire from Company, all of Company's right, title and interest
in, to and under those assets set forth in the Agreement.
WHEREAS, as of October 30, 2002, the Company and Purchasers entered
into that certain Amendment to Stock Purchase Agreement (the "First Amendment")
whereby the parties agreed to amend and modify the Agreement.
WHEREAS, as of December 15, 2002, the Company and Purchasers entered
into that certain Amendment to Stock Purchase Agreement (the "Second Amendment")
whereby the parties agreed to amend and modify the Agreement.
NOW THEREFORE, the Company and Buyer, in consideration of mutual
value, the receipt and sufficiency of which is hereby acknowledged, do hereby
agree to amend and modify the Agreement, as amended, as follows:
Paragraph 9. CLOSING, shall be deleted in its entirety and replaced with the
following:
1. "9. CLOSING. The Closing of the transactions contemplated hereby
shall take place at the offices of Seller, 1000 Bridgeport Avenue,
Shelton, Connecticut and shall occur on or about the tenth (10th)
business day following the approval by the Seller's shareholders of
the transactions contemplated and described by this agreement. If the
Closing has not occurred on or prior to June 30, 2003, and the Buyer
has not waived any conditions precedent, the obligation of Buyer to
close the transactions contemplated hereby shall be null and void
unless waived in writing by Buyer."
2. Except as specifically set forth herein, the Agreement, as amended,
shall remain unchanged and in full force and effect.
3. The execution, delivery and performance by the parties of this Third
Amendment have been duly authorized by all necessary corporate
action.
4. This Third Amendment, together with the First Amendment, the Second
Amendment and the Agreement, hereby constitutes the legal, valid and
binding obligations of the Company and the Buyer as applicable and is
enforceable against each party in accordance with its terms.
IN WITNESS WHEREOF, the parties hereto have executed this Third Amendment
as of the day and year first above written.
FCCC HOLDING COMPANY, LLC THE FIRST CONNECTICUT
CAPITAL CORPORATION
By:____________________________ By:____________________________
|
Its: Its:
A-16
ANNEX B
Stock Purchase Agreement
STOCK PURCHASE AGREEMENT (the "Agreement") dated as of June 28, 2002,
by and between The First Connecticut Capital Corporation, a Connecticut
corporation (the "Company"), and the individuals and firms listed on the
signature page of this Agreement (the "Purchasers"). The names and addresses and
the Federal Employer Identification or Social Security Numbers of the Purchasers
are also set forth on the signature page.
In consideration of the mutual promises and covenants contained
herein, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
SECTION 1. SALE OF COMMON STOCK AND WARRANTS
1.1 AUTHORIZATION. The Company, subject to shareholder approval, has
authorized the sale and issuance to the Purchasers in the amounts set forth
opposite their respective names on Exhibit A hereto of an aggregate of 250,000
shares of Common Stock (the "Shares") and 5-year Warrants (the "Warrants") to
purchase an aggregate of 200,000 shares of Common Stock (the "Warrant Shares")
initially exercisable at a price of $1.00 per share, the form of which shall be
acceptable to the Company and the Purchasers.
1.2 SALE AND ISSUANCE OF THE SHARES AND WARRANTS. Subject to the
terms and conditions set forth in this Agreement, the Company will issue and
sell to the Purchasers and the Purchasers will buy from the Company the Shares
at a per share purchase price of $1.00 and the Warrants at a per Warrant
purchase price of $.01.
SECTION 2. CLOSING DATE; DELIVERY.
2.1 CLOSING DATE. The Closing, of the purchase and sale of the Shares
and Warrants (together the "Securities") shall take place at the offices of Lev
& Berlin, P.C. 535 Connecticut Avenue, Norwalk, Conn. 06854 at 10:00a.m., on the
fifth business day following shareholder approval of this Agreement or at such
other location, date, and time as may be agreed upon between the Purchasers and
the Company (such closing being called the "Closing" and such date and time
being called the "Closing Date") but in any event not later than October 31,
2002.
2.2 DELIVERY AND PAYMENT. At Closing, the Company will deliver to the
Purchasers a certificate or certificates, registered in each Purchaser's name,
representing the number of Shares and Warrants to be purchased by each Purchaser
at the Closing, against payment of the purchase price therefor, by (i) a
certified or official bank check payable to the Company, (ii) by wire transfer
per the Company's instructions, or (iii) by any combination of (i) and (ii)
above. The Company shall not be obligated to issue and sell any Shares and
Warrants unless all are purchased.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to the Purchasers as follows:
B-1
3.1 ORGANIZATION AND STANDING; CERTIFICATE OF INCORPORATION AND
BYLAWS. The Company is a corporation duly organized and validly existing and is
in good standing under the laws of the State of Connecticut. The Company has
requisite corporate power and authority to own and operate its properties and
assets and to carry on its business as now conducted and is duly qualified as a
foreign corporation in each jurisdiction in which such qualification is
necessary. Copies of the Certificate of Incorporation and Bylaws of the Company
have been provided to Purchasers. Said copies are true, correct and complete and
reflect all amendments now in effect.
3.2 CORPORATE POWER. The Company has all requisite legal and
corporate power and authority to execute and deliver this Agreement, and to
carry out and perform its obligations under the terms of this Agreement.
3.3 SUBSIDIARIES. The Company has no subsidiaries or affiliated
companies and does not otherwise own or control, directly or indirectly, any
equity interest in any corporation, association or business entity except as set
forth on Schedule 3.3 hereto.
3.4 CAPITALIZATION. The authorized capital stock in the Company
consists of 3,000,000 shares of Common Stock, no par value, stated value $.50
per share ("Common Stock") of which 1,173,382 shares are issued and outstanding
and an aggregate of 160,000 shares of Common Stock are reserved for issuance
under the Company's Stock Option Plans. Except as set forth in this Agreement,
there are no options, warrants or other rights to purchase or acquire any of the
Company's authorized and unissued capital stock. All issued and outstanding
shares of Common Stock of the Company have been duly authorized and validly
issued, are fully paid and nonassessable, and have been offered, issued, sold
and delivered by the Company in compliance with applicable Federal and state
securities laws.
3.5 AUTHORIZATION. All corporate action on the part of the Company
and its directors (subject only to soliciting and obtaining stockholder
approval) necessary for the authorization, execution, delivery and performance
of this Agreement by the Company, the authorization, sale, issuance and delivery
of the Shares, the Warrants and the Warrant Shares and the performance of the
Company's obligations under this Agreement has been taken or will be taken prior
to the Closing. This Agreement, constitutes the valid and binding obligation of
the Company, enforceable in accordance with its terms. The Shares, when issued
in compliance with the provisions of this Agreement, will be validly issued,
fully paid and nonassessable; the Warrants have been duly authorized and, when
delivered and paid for, shall be exercisable in accordance with their terms; the
Warrant Shares have been duly and validly reserved and, when issued upon
exercise of the Warrants will be validly issued, fully paid and nonassessable
and the Shares, the Warrants and the Warrant Shares will be free of any liens or
encumbrances other than restrictions under pertinent Federal and State
securities laws, rules and regulations.
3.6 REGISTRATION RIGHTS. Except as provided to the Purchasers and as
set forth in this Agreement, the Company is not under any contractual obligation
to register under the Securities Act of 1933, as amended (the "ACT") any of its
outstanding securities or any of its securities which may hereafter be issued,
including but not limited to, the Shares, the Warrants and Warrant Shares except
as provided in this Agreement hereafter.
3.7 GOVERNMENTAL CONSENT, ETC. No consent, approval order or
authorization of or registration, qualification, designation, declaration or
filing with any governmental authority on the part of the Company (except the
filing of a definitive proxy statement with the Securities and Exchange
Commission ("SEC") under the Securities Exchange Act of 1934 (the "Exchange
Act") and the rules and regulations of the SEC promulgated thereunder) is
required in connection with the valid execution and delivery of this Agreement
or the offer, sale or issuance of the Shares, the Warrants and the Warrant
Shares or other transactions contemplated hereby or by the Sale Agreement
hereinafter described, except the qualification (or taking of such action as may
be necessary to secure an exemption from qualification, if available) of the
offer and sale of the Shares, the Warrants and the Warrant Shares under
applicable Blue Sky laws, which filings and qualifications, if required, will be
accomplished by the Company, at its expense, in a timely manner.
B-2
3.8 OFFERING. Subject to the accuracy of the Purchasers'
representations in Section 4 hereof, the offer, sale and issuance of the Shares,
the Warrants and the Warrant Shares constitute transactions exempt from the
registration requirements of Section 5 of the Act.
3.9 PERMITS. The Company has all franchises, permits, licenses, and
any similar authority necessary for the conduct of its business as now being
conducted by it. The Company is not in default under any of such franchises,
permits, licenses or other similar authority.
3.10 COMPLIANCE WITH OTHER INSTRUMENTS. The Company is not in
violation of any term of its Certificate of Incorporation or Bylaws, or in any
respect of any term or provision of any mortgage, indenture, contract,
agreement, instrument, judgment or decree, or any order, statute, rule or
regulation applicable to the Company. The execution, delivery and performance of
and compliance with this Agreement, and the consummation of the transactions
contemplated hereby, and the issuance of the Shares, the Warrants and the
Warrant Shares have not resulted and will not result in any violation of, or
conflict with, or constitute a default under any such term or provision, or
result in the creation of, any mortgage, pledge, lien, encumbrance or charge
upon any of the properties or assets of the Company; and there is no such
violation or default or event which, with the passage of time or giving of
notice or both, would constitute a violation or default which would adversely
affect the business of the Company or any of its properties or assets.
3.11 SALE TRANSACTION. The Company is a party to an agreement of even
date herewith, pursuant to which it is proposed that it will sell the assets
comprising the Company's mortgage banking business (herein the "Business") in
the manner described in and contemplated thereby (the "Sale Agreement"). The
Sale Agreement has been executed and delivered by the Company and the
performance thereof has been duly authorized by all required corporate action,
subject to approval of the Company's shareholders at the Annual or a Special
Meeting of Shareholders to be convened as promptly as practicable after the date
hereof. The Sale Agreement is a valid and binding agreement of the parties
thereto, enforceable in accordance with its terms, subject only to the aforesaid
shareholders' approval. The representations and warranties made by the Company
and the other parties thereto contained in the Sale Agreement are deemed
incorporated herein as if made by the Company and such other parties and the
Purchaser shall be a third party beneficiary thereof with the rights attendant
thereto if there were any breach of, or misrepresentation contained in, any such
representations or warranties.
3.12 LITIGATION. There is neither pending nor threatened any action,
suit, proceeding or claim, whether or not purportedly on behalf of the Company,
to which the Company or any employee of the Company is or may be named as a
party or to which the Company's, or any such person's property is or may be
subject, except collection proceedings or foreclosures in the ordinary course of
the Company's business in which the Company is plaintiff. To the best of the
Company's knowledge, there is no basis for any such action, suit, proceeding or
claim, in which an unfavorable outcome, ruling or finding in any such matter or
for all such matters, taken as a whole, might have a material adverse effect on
the condition, financial or otherwise, operations or prospects of the Company.
The Company has no knowledge of any unasserted claim, the assertion of which is
likely and which, if asserted, will seek damages, an injunction or other legal,
equitable, monetary or nonmonetary relief which if granted would have a material
adverse effect on the condition, financial or otherwise, operations or prospects
of the Company.
B-3
3.13 ISSUANCE TAXES. All taxes imposed by any taxing authority in
connection with the issuance, sale and delivery of the Shares, the Warrants and
the Warrant Shares shall have been fully paid, and all laws imposing such taxes
shall have been fully complied with, prior to the Closing Date; however,
Purchasers acknowledge their responsibility for any income, capital gain or
similar tax arising out of the purchase or sale of the Securities or the
exercise of the Warrants and that the Company has made no representation as to
the tax consequences of said transactions.
3.14 ILLEGAL OR UNAUTHORIZED PAYMENTS; POLITICAL CONTRIBUTIONS.
Neither the Company nor any of its officers, directors, employees, agents or
other representatives, or any other business entity or enterprise with which the
Company is or has been affiliated or associated, has, directly or indirectly,
made or authorized any payment, contribution or gift of money, property, or
services, whether or not in contravention of applicable law, (a) as a kickback
or bribe to any person or (b) to any political organization, or the holder of or
any aspirant to any elective or appointive public office except for personal
political contributions not involving the direct or indirect use of funds of the
Company.
3.15 FINANCIAL STATEMENTS. The Balance Sheets of the Company as of
March 31, 2001 and 2002, and the related statements of income, changes in
stockholders' equity and cash flow for the fiscal years then ended, as restated
in 2001, audited by Saslow Lufkin & Buggy, LLP, including related notes and
schedules (the "Financial Statements") are true and complete in all material
respects and fairly present in all material respects the financial position and
results of operations of the Company as at said dates and for the periods then
ended, except as to the unaudited Financial Statements, which are subject to
customary year and audit adjustments, not material in amount. The Financial
Statements have been prepared in accordance with generally accepted accounting
principles, (GAAP), consistently applied, except the unaudited financial
statements may not have complete notes.
3.16 ABSENCE OF UNDISCLOSED LIABILITIES. The Financial Statements, as
restated, make full and adequate provision for all material obligations,
liabilities and commitments (fixed and contingent) of the Company as of the
dates thereof, and the Company had no material obligations, liabilities or
commitments (fixed or contingent) which were required to be set forth or
reserved in the Financial Statements or notes thereto in accordance with GAAP
and were not so set forth or reserved.
3.17 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since the most recent
Balance Sheet date, the Company has:
(a) conducted its business only in the ordinary course;
(b) not suffered any material adverse change in its financial
condition or results of operations;
(c) not incurred any material obligation, liability or commitment
(fixed or contingent), except trade obligations in the ordinary
course of business; and
(d) not sold, transferred or leased any of its properties or assets
or entered into any transaction other than in the ordinary course
of business, except this Agreement and the Sale Agreement.
B-4
3.18 TAX MATTERS. The Company has prepared and filed, or duly
obtained extensions therefor, with the appropriate Federal, State or local
government agencies, all tax returns required to be filed; the Company has paid
all taxes shown on such returns to be payable or which have come due pursuant to
any assessment, etc.; the provisions, if any, in the Financial Statements are
sufficient for all accrued and unpaid taxes; and the Deferred Income Taxes item
on the March 31, 2002 Balance Sheet is true and correct in all material
respects.
3.19 SEC REPORTS. The Company has filed and is current with all
reports, including but not limited to, Form 10-K Annual Report and Form-10Q
Quarterly Report, required to be filed with the SEC, and each such report is
correct and complete in all material respects and provides the information
required to be included therein pursuant to SEC rules and regulations under the
Exchange Act.
3.20 BROKERS OR FINDERS. The Purchasers have not and will not incur,
directly or indirectly, as a result of any action taken by the Company, any
liability for brokerage or finders' fees in connection with the transactions
contemplated hereby.
3.21 INSURANCE.The Company has delivered to Purchasers a schedule
setting forth the following information with respect to each insurance policy
(including policies providing property, casualty, liability, key person,
workers' compensation coverage and bond and surety arrangements) which the
Company is a party, a named insured, or otherwise the beneficiary of coverage:
(a) The name, address, and telephone number of the agent.
(b) The name of the insurer, the name of the policyholder, and the
name of each covered insured.
(c) The policy number and the period of coverage.
(d) The scope (including an indication of whether the coverage is on
a claims made, occurrence or other basis) and amount (including a
description of how deductibles and ceilings are calculated and
operate) of coverage.
(e) A description of any retroactive premium adjustments or other
material loss-sharing arrangements.
With respect to each such insurance policy; (i) the policy is valid, binding,
enforceable and in full force and effect; (ii) neither the Company nor, to the
best knowledge of the Company, any other party to the policy is in breach or
default (including with respect to the payment of premiums or the giving of
notices), and, to the best knowledge of the Company, no event has occurred
which, with notice or the lapse of time, would constitute such a breach or
default, or permit termination, modification or acceleration, under the policy;
and (iii) no party to the policy has repudiated any material provision thereof.
3.22 DISCLOSURE. Neither this Agreement, nor any other written
statement furnished to the Purchaser or its counsel in connection with the offer
and sale of the Shares, the Warrants and the Warrant Shares or in connection
with the Sale Agreement, including the proxy statement related thereto to be
filed by the Company as contemplated herein, contains or will contain any untrue
statement of a material fact or omits or will omit to state a material fact
necessary in order to make the statements contained therein or herein not
misleading in the light of the circumstances under which they were made. There
is no fact which the Company has not disclosed to the Purchasers in writing
that, to the best knowledge of the Company, materially adversely affects, the
ability of the Company to perform this Agreement and the Sale Agreement or the
other actions contemplated herein.
B-5
SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS.
The Purchasers hereby severally represent and warrant to the Company
as follows:
4.1 BUSINESS AND FINANCIAL EXPERIENCE. Each Purchaser is an
accredited investor within the meaning of Rule 501 of Regulation D promulgated
under the Securities Act and has such knowledge and experience in financial and
business matters that each Purchaser is capable of evaluating the merits and
risks of the Purchaser's purchase of the Shares, the Warrants and the Warrant
Shares as contemplated by this Agreement. Each Purchaser's financial situation
is such that he or it can afford to bear the economic risk of holding the
Shares, the Warrants and the Warrant Shares for an indefinite period of time and
suffer complete loss of such Purchaser's investment.
4.2 INVESTMENT INTENT; BLUE SKY. Each Purchaser is acquiring the
Shares, the Warrants and the Warrant Shares for investment for such Purchaser's
own account, not as a nominee or agent, and not with a view to or for resale in
connection with any distribution thereof. Each Purchaser understands that the
issuance of the Shares, the Warrants and the Warrant Shares has not been, and
will not be, registered under the Act by reason of a specific exemption from the
registration provisions of the Act, the availability of which depends upon,
among other things, the bona fide nature of the Purchaser's true and correct
state of domicile, upon which the Company may rely for the purpose of complying
with applicable Blue Sky laws.
4.3 RULE 144. Each Purchaser acknowledges that the Shares, the
Warrants and the Warrant Shares must be held indefinitely unless subsequently
registered under the Act or unless an exemption from such registration is
available. The Purchaser is aware of the provisions of Rule 144 promulgated
under the Act which permit limited resale of shares purchased in a private
placement subject to the satisfaction of certain conditions, including, among
other things, the existence of a public market for the shares, the availability
of certain current public information about the Company, the resale occurring
not less than one year after a party has purchased and paid for the security to
be sold, the sale being effected through a "broker's transaction" or in a
transaction directly with a "market maker", and the number of shares being sold
during any three-month period not exceeding specified limitations. The Company
makes no representation as to the future availability of any exemption from such
registration requirements.
4.4 RESTRICTIONS ON TRANSFER; RESTRICTIVE LEGENDS. Each Purchaser
understands that the transfer of the Shares, the Warrants and the Warrant
Shares, if applicable, is restricted by applicable state and federal securities
laws, and that the certificates representing the Shares, the Warrants and the
Warrant Shares will be imprinted with legends restricting transfer except in
compliance therewith.
4.5 ACCESS TO COMPANY INFORMATION. Each Purchaser has had an
opportunity to discuss the Company's business, management and financial affairs
with the Company's management. The Purchaser has also had an opportunity to ask
questions of officers of the Company. The Purchaser understands that such
discussions, as well as any written information issued by the Company, were
intended to describe the material aspects of the Company's business, including
the transactions contemplated by the Sale Agreement, but were not a thorough or
exhaustive description.
4.6 AUTHORIZATION. All action on the part of each Purchaser, the
Purchaser's Board of Directors and stockholders or Trustees, as applicable,
necessary for the authorization, execution, delivery and performance of this
Agreement by the Purchaser, the purchase of and payment for the Shares, the
Warrants and the Warrant Shares, if applicable, and the performance of all of
such Purchaser's obligations under this Agreement has been taken or will be
taken prior to the Closing. This Agreement, when executed and delivered by each
Purchaser, shall constitute the valid and binding obligation of each Purchaser,
B-6
enforceable in accordance with its terms, subject to laws of general application
relating to bankruptcy, insolvency and the relief of debtors and rules of law
governing specific performance, injunctive relief or other equitable remedies.
The execution of this Agreement and consummation by Purchasers of the
transactions on their part contemplated herein will not breach or violate any
order or judgment of any court or governmental agency or any contract or
agreement to which any of the Purchasers is a party or may be bound.
4.7 BROKERS OR FINDERS. The Company has not and will not incur,
directly or indirectly, as a result of any action taken by any Purchaser, any
liability for brokerage or finders' fees or agents' commissions or any similar
charges in connection with this Agreement or the transactions contemplated
hereby.
4.8 NO VIOLATIONS, ETC. Neither Martin Cohen nor Bernard Zimmerman or
any of the Purchasers has had a criminal conviction; been the subject of any
regulatory enforcement action or any civil order or judgment involving financial
fraud or wrongdoing; or been denied or had revoked any license or permit
involving securities or any financial business.
SECTION 5. CONDITIONS TO CLOSING OF THE PURCHASERS.
The Purchasers obligation to purchase the Shares and Warrants is,
unless waived in writing by the Purchasers, subject to the fulfillment as of the
Closing Date of the following conditions:
5.1 REPRESENTATIONS AND WARRANTIES CORRECT. The representations and
warranties made by the Company in Section 3 hereof shall be true and correct in
all material respects as of the date of the Closing.
5.2 COVENANTS. All covenants, agreements and conditions contained in
this Agreement to be performed or complied with by the Company have been
performed or complied with in all material respects.
5.3 BLUE SKY. The Company shall have obtained all necessary Blue Sky
law permits and qualifications, or have the availability of exemptions
therefrom, required by any state for the offer and sale of the Shares, the
Warrants and the Warrant Shares.
5.4 SHAREHOLDER APPROVAL. The Company's shareholders shall have
approved this Agreement, the Sale Agreement and the other matters requiring
their approval as provided herein and in the Sale Agreement.
5.5 SALE AGREEMENT. The Company shall have consummated the Sale
Agreement in accordance with the terms and provisions thereof and upon
consummation thereof, the Company shall have on hand not less than $1,250,000 in
cash after payment of all of the Company's expenses, current or accrued, related
to the transactions described herein and in the Sale Agreement, excluding cash
to be derived from the sale of the Shares and Warrants as provided herein.
5.6 COMPLIANCE CERTIFICATE. The Company shall have delivered to the
Purchaser a certificate of the Company executed by the President and Chief
Executive Officer of the Company, dated as of the date of the Closing certifying
to the fulfillment of the conditions specified in Sections 5.1 and 5.2 of this
Agreement.
B-7
5.7 BOARD OF DIRECTORS. Upon the Closing date, the number of
directors constituting the Board of Directors of the Company shall initially be
five (5) and shall consist of Lawrence Yurdin, Michael Goldman, Martin Cohen,
Bernard Zimmerman and one additional individual to be designated by Messrs.
Cohen and Zimmerman.
5.8 2002 EQUITY INCENTIVE PLAN. The Board of Directors and
shareholders of the Company shall have authorized and adopted a 2002 Equity
Incentive Plan, in form and content satisfactory to the Purchasers, for
officers, directors, key employees and consultants of the Company other than
Messrs. Cohen and Zimmerman, covering an aggregate of 150,000 shares of the
Company's authorized and unissued Common Stock.
5.9 EMPLOYMENT AGREEMENTS. All of the Company's employment agreements
or relationships, written or oral, shall have been cancelled as of the Closing
Date and the Company shall have no liability or obligation for severance,
accrued vacation, bonus or other payment of any kind to any current or past
employee of the Company.
5.10 OUTSTANDING STOCK OPTIONS. Each holder of an option to purchase
Common Stock of the Company who holds an option which is exercisable after the
Closing Date shall have agreed in writing with the Company that notwithstanding
any term or provision of any such option that any shares acquired upon exercise
of an option may not be publicly offered or sold for a period of eighteen (18)
months after the Closing Date.
5.11 SUCCESSOR GENERAL PARTNER. The purchaser designated in the Sale
Agreement shall provide for a successor general partner in any limited
partnership in which the Company serves in such capacity and shall indemnify and
hold harmless the Company from any claim or liability which it may incur by
reason of having served in such capacity.
5.12 RELEASES. Each of the officers and directors of the Company
shall execute and deliver a general release in customary form in favor of the
Company.
5.13 LEGAL OPINION. The Purchaser shall have received an opinion of
Lev & Berlin, P.C., counsel to the Company covering such matters as Purchasers
reasonably may request.
5.14 SHARE AND WARRANT CERTIFICATES. The Company shall have issued to
the Purchasers certificates representing the Shares and Warrants in accordance
with this Agreement.
5.15 INVESTIGATION SATISFACTORY. The Purchasers shall be satisfied in
all respects with the results of their investigation of the Company and the
proposed sale of the Business as described in the proxy statement contemplated
herein and the independent evaluation of the Business.
5.16 EXPENSES. The Company shall have paid the expenses set forth in
Section 9.5.
5.17 PROCEEDINGS. On or before the Closing Date, all actions,
proceedings, instruments and documents required by, or on behalf of, the Company
to execute, deliver and carry out this Agreement, and all agreements incidental
hereto, and all other related legal matters, shall be reasonably satisfactory to
the Purchasers and their counsel.
5.18 NO MATERIAL EVENT. The Purchasers shall not have discovered any
material error in, misstatement of or omission to disclose any material fact
relating to the Company or the Sale Agreement.
5.19 REPORTS AND RETURNS. The Company shall have filed its From 10-K
Annual Report for the fiscal year ended March 31, 2002 and such other periodic
reports as may be required and shall have filed Federal and State tax returns
for such fiscal year.
B-8
SECTION 6. CONDITIONS TO CLOSING OF THE COMPANY.
The Company's obligation to issue and sell and issue the Shares and
Warrants is, unless waived in writing by the Company, subject to the fulfillment
as of the Closing Date of the following conditions:
6.1 REPRESENTATIONS AND WARRANTIES CORRECT. The representations and
warranties made by the Purchasers in Section 4 hereof shall be true and correct
in all material respects as of the Closing Date.
6.2 COVENANTS. All covenants, agreements, and conditions contained in
this Agreement to be performed or complied with by the Purchasers on or prior to
the Closing Date shall have been performed or complied with in all material
respects.
6.3 COHEN AND ZIMMERMAN CONSULTING ARRANGEMENTS. The Company and
Messrs. Cohen and Zimmerman shall have executed and delivered Consulting
Agreements in form and content reasonably satisfactory to the Company and
Messrs. Cohen and Zimmerman.
6.4 SALE AGREEMENT. The Company shall have consummated the Sale
Agreement in accordance with the terms and provisions thereof.
6.5 INVESTMENT. The Purchasers shall have tendered, in the aggregate,
at the Closing, consideration of not less than $252,000 for the Shares and
Warrants.
6.6 LEGAL OPINION. The Company shall have received an opinion from
Jay J. Miller, Esq., counsel to the Purchasers, covering such matters as the
Company reasonably may request.
6.7 SHAREHOLDER APPROVAL. The Company's shareholders shall have
approved this Agreement, the Sale Agreement and the other matters requiring
their approval as provided herein and in the Sale Agreement.
6.8 PROCEEDINGS. On or before the Closing Date, all actions,
proceedings, instruments and documents, by or on behalf of the Purchasers to
execute, deliver and carry out this Agreement and all agreements incidental
hereto, and all other related legal matters, shall be reasonably satisfactory to
the Company and its counsel.
6.9 EXPENSES. The Company shall have paid the expenses set forth in
Section 9.5.
6.10 COMPLIANCE CERTIFICATE. The Purchasers shall have delivered to
the Company a certificate executed by each of the Purchasers dated as of the
Closing Date certifying to the fulfillment of the conditions specified in
Sections 6.1 and 6.2.
SECTION 7. COVENANTS OF THE COMPANY.
The Company hereby covenants and agrees for the benefit of the Purchasers as
follows:
B-9
7.1 PROXY STATEMENT. As promptly as practicable after the date of
this Agreement, the Company shall prepare and file a proxy statement under the
Exchange Act and pertinent rules and regulations, relating to an Annual or
Special Meeting of Shareholders of the Company to be held to consider and act
upon, among other matters, the authorization and approval of this Agreement and
the Sale Agreement; the election of five (5) directors; the adoption of a 2002
Equity Incentive Plan; the change of the Company's corporate name; and such
other matters as may properly come before the meeting; and use its best efforts
to have such material distributed at the earliest practicable date.
7.2 INDEPENDENT EVALUATION. The Company shall engage a recognized
appraiser to prepare a "fairness opinion" relating to the sale of the Business
to be included in the Company's proxy material.
7.3 OTHER OFFERS. Pending consummation of the transactions
contemplated herein and in the Sale Agreement, the Company shall not seek or
solicit other purchasers of the Business or any equity interest in the Company
or otherwise entertain any proposal therefor, subject, however, to the fiduciary
responsibility of the Company's Board of Directors. In the event the Company's
Board of Directors determines not to proceed with the transactions provided
herein or the Sale Agreement, the Company shall reimburse the Purchasers
promptly upon request for all of their costs and expenses, including counsel
fees, incurred by Purchasers in connection with this Agreement and the
transactions contemplated herein.
7.4 REGULATORY REPORTS. The Company shall prepare and file timely
with the SEC, State securities departments and other cognizant regulatory
authorities, including the NASD, such reports or other filings as may be
required in connection with the transactions contemplated herein and in the Sale
Agreement.
7.5 REGISTRATION. If, after the Closing, a business transaction is
consummated between the Company and an unaffiliated person or firm, the Company,
upon request of the holders of not less than fifty (50%) percent of the Shares
and Warrants or Warrant Shares, if the Warrants have been exercised, shall
prepare and file at its expense a Registration Statement under the Act on
appropriate form to permit the holders of such Securities to publicly offer and
sell such Securities in the prevailing market or in negotiated transactions and
shall use its best efforts to cause such Registration Statement to become
effective at the earliest practicable date. In such event, such persons shall
provide the Company with such information as it reasonably may request and the
Company and the selling security holders shall indemnify each other as the
Company's counsel reasonably may request. The Company shall also file such
documents as may be required by State securities agencies; however, the Company
shall not be required to qualify in any jurisdiction or generally consent to
service of process and also make such filings as the NASD may require, in each
instance at the Company's expense. The selling security holders shall be
responsible for any underwriting discounts or commissions in connection with
their sales of Securities.
7.6 SALE AGREEMENT PROVISIONS. The Company may not amend any term,
provision or condition of the Sale Agreement nor waive any condition or
requirement thereof except upon the prior written consent of the Purchasers.
Without limiting the generality of the foregoing, the Company may not cancel or
amend any insurance coverage which it has as of the date of this Agreement
SECTION 8. COVENANTS OF THE PURCHASERS.
The Purchasers hereby covenant and agree for the benefit of the
Company as follows:
B-10
8.1 INVESTMENT REPRESENTATION. Each of the Purchasers represents and
agrees that he or it is acquiring the Shares, the Warrants and Warrant Shares
for investment for his or its sole account and not with a view towards the
public distribution or resale thereof and shall not offer, sell, transfer or
assign any of the Securities except in compliance with pertinent Federal and
State securities laws, rules and regulations. Each Purchaser consents that an
appropriate restrictive legend be imprinted on the certificates for the Shares,
Warrants, and Warrant Shares and the Company's stock transfer agent shall be
instructed to make appropriate notation on the Company's stock transfer ledger.
8.2 SHAREHOLDER DISTRIBUTION. Not later than ninety (90) days after
the Closing Date, Purchasers shall cause the Company to distribute to its
shareholders a pro-rata cash dividend to the extent that the Company's cash on
hand following closing of the Sale Agreement and after payment of all expenses,
current or accrued, related to the transactions provided herein and in the Sale
Agreement exceeds $1,250,000, but excluding cash to be derived from the sale of
the Shares and Warrants to the Purchasers herein; provided such dividend is at
least $.15 per share to all of the Company's shareholders.
8.3 LIQUIDATION. In the event the Company fails to complete a
material transaction or series of transactions within three (3) years of the
Closing of the transactions provided herein and in the Sale Agreement,
Purchasers shall take all steps reasonably required to cause the Company to
dissolve and distribute its cash then on hand, pro-rata, to its shareholders.
For purposes hereof, a material transaction shall be defined as having an
aggregate value of not less than $750,000. If the Company, at the expiration of
said three (3) year period is then involved in good faith negotiations to
consummate a material transaction, then the obligation to distribute the
Company's cash as aforesaid shall be extended for a period not to exceed ninety
(90) days to permit the completion of such negotiations.
8.4 COOPERATION. The Purchasers shall cooperate reasonably with the
Company and provide such information as the Company or its counsel reasonably
may request to prepare proxy material and regulatory reports or other filings.
SECTION 9. MISCELLANEOUS.
9.1 GOVERNING LAW. This Agreement shall be governed by and construed
and enforced in accordance with the internal laws of the State of Connecticut
without regard to conflict of laws provisions.
9.2 ENTIRE AGREEMENT; AMENDMENT. This Agreement, and any other
documents delivered pursuant hereto, including exhibits or schedules hereto
constitute the full and entire understanding and agreement among the parties
with regard to the subject hereof and no party shall be liable or bound to any
other party in any manner by any warranties, representations or covenants except
as specifically set forth herein or therein. Except as expressly provided
herein, neither this Agreement nor any term hereof may be amended, waived,
discharged or terminated other than by a written instrument signed by the party
against whom enforcement of any such amendment, waiver, discharge or termination
is sought.
9.3 NOTICES, ETC. All notices and other communications required or
permitted hereunder shall be in writing and shall be mailed by registered or
certified mail, postage prepaid, or otherwise delivered by facsimile
transmission, by hand or by messenger or overnight express, addressed:
(a) if to the Purchasers to the address or fax number listed after
such Purchaser's name on the signature page or at such other
address as such Purchaser shall have furnished to the Company
with a copy to:
B-11
Jay J. Miller, Esq.
430 East 57th Street Fax: 212-758-0624
Suite 5D
New York, NY 10022
(b) if to the Company, to:
The First Connecticut Capital Corporation
1000 Bridgeport Avenue
Shelton, CT 06484 Fax: 203-944-5405
or at such other address as the Company shall have
furnished to the Purchasers with a copy to:
Duane Berlin, Esq.
Lev & Berlin, P.C.
535 Connecticut Avenue
Norwalk, CT 06854 Fax: 203-854-1652
Each such notice or other communication shall for all purposes of
this Agreement be treated as effective or having been given when
received if delivered personally, if sent by facsimile, the first
business day after the date of confirmation that the facsimile has
been successfully transmitted to the facsimile number for the party
notified, or, if sent by mail, at the earlier of its receipt or 72
hours after the same has been deposited in a regularly maintained
receptacle for the deposit of the United States mail, addressed and
mailed as aforesaid.
9.4 DELAYS OR OMISSIONS. Except as expressly provided herein, no
delay or omission to exercise any right, power or remedy accruing to any party,
upon any breach or default of another party under this Agreement, shall impair
any such right, power or remedy of such party nor shall it be construed to be a
waiver of any such breach or default, or an acquiescence therein, or of any
similar breach or default thereafter occurring; nor shall nay waiver of any
single breach or default be deemed a waiver of any other breach or default
theretofore or thereafter occurring. Any waiver, permit, consent or approval of
any kind or character on the part of any party of any breach or default under
this Agreement, or any waiver on the part of any party of any provisions or
conditions of this Agreement, must be in writing and shall be effective only to
the extent specifically set forth in such writing. All remedies, either under
this Agreement or by law or otherwise afforded to any party, shall be cumulative
and not alternative.
9.5 EXPENSES. Each of the parties to this Agreement shall bear its
own costs, expenses and professional fees in connection with the negotiation and
consummation of the terms hereof; however, if the transactions contemplated
herein were not consummated for any reason other than Purchasers inability or
unwillingness (except for a breach by the Company of its representations,
warranties or obligations herein or a default by Buyer under the Sale Agreement,
including the failure of Buyer to obtain all necessary consents of third
parties) to perform their obligations herein or the failure by the Company's
shareholders to authorize and approve the transactions contemplated herein and
in the Sale Agreement, the Company shall reimburse the Purchasers, promptly upon
request, for all of their expenses, including counsel or other professional
fees, reasonably incurred in connection with the negotiation and preparation of
this Agreement and the transactions contemplated herein, but in an amount not to
exceed $35,000.
B-12
9.6 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original, and all of which together
shall constitute one instrument.
9.7 SEVERABILITY. In the event that any provision of this Agreement
becomes or is declared by a court of competent jurisdiction to be illegal,
unenforceable or void, this Agreement shall continue in full force and effect
without said provision, which shall be replaced with an enforceable provision
closest in intent and economic effect as the severed provision; provided that no
such severability shall be effective if it materially changes the economic
benefit of this Agreement to any party.
9.8 TITLE AND SUBTITLES. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
9.9 SURVIVAL OF WARRANTIES. The representations and warranties of the
Company and the Purchasers contained in or made pursuant to this Agreement shall
survive execution and delivery of this Agreement and the Closing for a period of
two years and shall in no way be affected by any investigation of the subject
matter thereof made by or on behalf of the Purchasers or the Company.
B-13
9.10 SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors and administrators of the
parties hereto, as the case may be.
9.11 FURTHER ASSURANCES. Each party hereto agrees to do all acts and
things, and to make, execute and delivery such written instruments, as shall
from time to time be reasonably required to carry out the terms and provisions
of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Stock
Purchase Agreement as of the day and year first above written.
PURCHASERS:
Name:
Address:
Fax No.
Name:
Address:
Fax No.
The First Connecticut Capital Corporation
By:
Lawrence Yurdin
President and Chief Executive Officer
B-14
To induce Purchasers to execute and deliver this Agreement and to
perform their obligations hereunder, the undersigned hereby agree to vote all of
their shares of Common Stock of the Company in favor of the transactions
provided herein at the Annual or a Special Meeting of Shareholders of the
Company contemplated herein.
B-15
EXHIBIT A
PURCHASER SHARES WARRANTS
Bernard Zimmerman & Co. Inc. 25,000 100,000
18 High Meadow Road
Weston, Conn. 06883
EIN # 13-2736451
Martin Cohen, Trustee 125,000 100,000
Cohen Profit Sharing Plan
27 E. 65th Street
Apartment 11A
New York, NY 10021
|
EIN # 22-3415892
B-16
AMENDMENT TO
STOCK PURCHASE AGREEMENT
This amendment (the "Amendment") is made as of this 30th day of
October, 2002 by and between The First Connecticut Capital Corporation, a
Connecticut corporation (the "Company") and the individuals and firms listed on
the signature page of this Amendment (the "Purchasers").
W I T N E S S E T H:
WHEREAS, on June 28, 2002, the Company and Purchasers entered into
that certain Stock Purchase Agreement (the "Agreement") for the sale and
issuance by the Company to Purchasers of an aggregate of 250,000 shares of the
Company's Common Stock and 5-year Warrants to purchase an aggregate of 200,000
shares of Company's Common Stock initially exercisable at a price of $1.00 per
share.
NOW THEREFORE, the Company and Purchasers, in consideration of mutual
value, the receipt and sufficiency of which is hereby acknowledged, do hereby
agree to amend and modify the Agreement as follows:
1. Section 8.3 - LIQUIDATION, shall be deleted in its entirety.
2. The following Section 7.7 shall be added to Section 7 - Covenants
of the Company.
"Section 7.7 LIQUIDATION VOTE
If the Company fails to consummate a material transaction within
three years of the closing of the transactions provided herein and
in the Sale Agreement, then, upon the written request by the
holders of 20% or more of the then issued and outstanding Common
Stock of the Company held by non-affiliates of management, the
Company shall hold a meeting of shareholders as promptly as
practicable and solicit proxies therefor pursuant to which the
shareholders will consider and vote on the dissolution and
liquidation of the Company. At such meeting, all shares held by
management shall be voted in the same proportion as shares voted
by non-affiliates of non-management."
3. Section 2.1 is hereby amended and restated as follows:
"Section 2.1 CLOSING DATE. The Closing, of the purchase and sale
of the Shares and Warrants (together the "Securities") shall take
place at the offices of Lev & Berlin, P.C. 535 Connecticut Avenue,
Norwalk, Conn. 06854 at 10:00a.m., on the fifth business day
following shareholder approval of this Agreement or at such other
location, date, and time as may be agreed upon between the
Purchasers and the Company (such closing being called the
"Closing" and such date and time being called the "Closing Date")
but in any event not later than November 30, 2002." Such extension
of the Closing Date shall not affect the Company's obligation to
reimburse Purchasers for expenses in an amount not to exceed
$35,000, by reason of the failure to hold the shareholders meeting
by October 31, 2002, which obligation has now matured.
4. Except as specifically set forth herein, the Agreement, as
amended, shall remain unchanged and in full force and effect.
5. The execution, delivery and performance by the parties of this
Amendment have been duly authorized by all necessary corporate
action.
B-17
6. This Amendment, together with the Agreement, hereby constitutes
the legal, valid and binding obligations of the Company and the
Purchasers as applicable and is enforceable against each party in
accordance with its terms.
IN WITNESS WHEREOF, the parties hereto have executed this
Amendment as of the day and year first above written.
PURCHASERS:
Name:
Name:
THE FIRST CONNECTICUT CAPITAL CORPORATION:
By:
Lawrence Yurdin
President and Chief Executive Officer
B-18
SECOND AMENDMENT TO
STOCK PURCHASE AGREEMENT
This amendment (the "Second Amendment") is made as of this
day of December, 2002 by and between The First Connecticut Capital Corporation,
a Connecticut corporation (the "Company") and the individuals and firms listed
on the signature page of this Second Amendment (the "Purchasers").
W I T N E S S E T H:
WHEREAS, on June 28, 2002, the Company and Purchasers entered into
that certain Stock Purchase Agreement (the "Agreement") for the sale and
issuance by the Company to Purchasers of an aggregate of 250,000 shares of the
Company's Common Stock and 5-year Warrants to purchase an aggregate of 200,000
shares of Company's Common Stock initially exercisable at a price of $1.00 per
share.
WHEREAS, as of October 30, 2002, the Company and Purchasers
entered into that certain amendment to Stock Purchase Agreement (the "First
Amendment") whereby the parties agreed to amend and modify the Agreement.
NOW THEREFORE, the Company and Purchasers, in consideration of
mutual value, the receipt and sufficiency of which is hereby acknowledged, do
hereby agree to amend and modify the Agreement, as amended, as follows:
1. Section 2.1 is hereby amended and restated as follows:
"2.1 CLOSING DATE. The Closing, of the purchase and sale of the
Shares and Warrants (together the "Securities") shall take place
at the offices of Lev & Berlin, P.C. 200 Connecticut Avenue,
Norwalk, Conn. 06854 at 10:00a.m., on the fifth business day
following shareholder approval of this Agreement or at such other
location, date, and time as may be agreed upon between the
Purchasers and the Company (such closing being called the
"Closing" and such date and time being called the "Closing Date")
but in any event not later than February 15, 2003." Such extension
of the Closing Date shall not affect the Company's obligation to
reimburse Purchasers for expenses in an amount not to exceed
$60,000, by reason of the failure to hold the shareholders meeting
by November 30, 2002, which obligation has now matured.
2. Section 9.5 is hereby amended and restated as follows:
"9.5 EXPENSES. Each of the parties to this Agreement shall bear
its own costs, expenses and professional fees in connection with
the negotiation and consummation of the terms hereof; however, if
the transactions contemplated herein were not consummated for any
reason other than Purchasers inability or unwillingness (except
for a breach by the Company of its representations, warranties or
obligations herein or a default by Buyer under the Sale Agreement,
including the failure of Buyer to obtain all necessary consents of
third parties) to perform their obligations herein or the failure
by the Company's shareholders to authorize and approve the
transactions contemplated herein and in the Sale Agreement, the
Company shall reimburse the Purchasers, promptly upon request, for
all of their expenses, including counsel or other professional
fees, reasonably incurred in connection with the negotiation and
preparation of this Agreement and the transactions contemplated
herein, but in an amount not to exceed $60,000."
B-19
3. The parties further agree, confirm and acknowledge that the
consulting fees payable by the Company to Messrs Zimmerman and
Cohen following the Closing shall be in the amounts of $24,000 per
year for Mr. Cohen and $24,000 per year for Mr. Zimmerman.
4. Except as specifically set forth herein, the Agreement, as
amended, shall remain unchanged and in full force and effect.
5. The execution, delivery and performance by the parties of this
Second Amendment have been duly authorized by all necessary
corporate action.
6. This Second Amendment, together with the First Amendment and
the Agreement, hereby constitutes the legal, valid and binding
obligations of the Company and the Purchasers as applicable and is
enforceable against each party in accordance with its terms.
IN WITNESS WHEREOF, the parties hereto have executed this Second
Amendment as of the day and year first above written.
PURCHASERS:
Name:
Name:
THE FIRST CONNECTICUT CAPITAL CORPORATION:
By:
Lawrence Yurdin
President and Chief Executive Officer
B-20
THIRD AMENDMENT TO
STOCK PURCHASE AGREEMENT
This amendment (the "Third Amendment") is made as of this day
of February, 2003 by and between The First Connecticut Capital Corporation, a
Connecticut corporation (the "Company") and the individuals and firms listed on
the signature page of this Third Amendment (the "Purchasers").
W I T N E S S E T H:
WHEREAS, on June 28, 2002, the Company and Purchasers entered into
that certain Stock Purchase Agreement (the "Agreement") for the sale and
issuance by the Company to Purchasers of an aggregate of 250,000 shares of the
Company's Common Stock and 5-year Warrants to purchase an aggregate of 200,000
shares of Company's Common Stock initially exercisable at a price of $1.00 per
share.
WHEREAS, as of October 30, 2002, the Company and Purchasers
entered into that certain amendment to Stock Purchase Agreement (the "First
Amendment") whereby the parties agreed to amend and modify the Agreement.
WHEREAS, as of December 15, 2002, the Company and Purchasers
entered into that certain amendment to Stock Purchase Agreement (the "Second
Amendment") whereby the parties agreed to amend and modify the Agreement.
NOW THEREFORE, the Company and Purchasers, in consideration of
mutual value, the receipt and sufficiency of which is hereby acknowledged, do
hereby agree to amend and modify the Agreement, as amended, as follows:
1. Section 2.1 is hereby amended and restated as follows:
"2.1 CLOSING DATE. The Closing, of the purchase and sale of the
Shares and Warrants (together the "Securities") shall take place
at the offices of Lev & Berlin, P.C. 200 Connecticut Avenue,
Norwalk, Conn. 06854 at 10:00a.m., on the fifth business day
following shareholder approval of this Agreement or at such other
location, date, and time as may be agreed upon between the
Purchasers and the Company (such closing being called the
"Closing" and such date and time being called the "Closing Date")
but in any event not later than June 30, 2003." Such extension of
the Closing Date shall not affect the Company's obligation to
reimburse Purchasers for expenses in an amount not to exceed
$60,000, by reason of the failure to hold the shareholders meeting
by February 15, 2003, which obligation has now matured.
2. Except as specifically set forth herein, the Agreement, as
amended, shall remain unchanged and in full force and effect.
3. The execution, delivery and performance by the parties of this
Third Amendment have been duly authorized by all necessary
corporate action.
4. This Third Amendment, together with the First Amendment, the
Second Amendment and the Agreement, hereby constitutes the legal,
valid and binding obligations of the Company and the Purchasers as
applicable and is enforceable against each party in accordance
with its terms.
B-21
IN WITNESS WHEREOF, the parties hereto have executed this Third
Amendment as of the day and year first above written.
PURCHASERS:
Name:
Name:
THE FIRST CONNECTICUT CAPITAL CORPORATION:
By:
Lawrence Yurdin
President and Chief Executive Officer
B-22
ANNEX C
2002 Equity Incentive Plan
FCCC, INC.
2002 EQUITY INCENTIVE PLAN
1. PURPOSE; EFFECTIVENESS OF THE PLAN
(a) The purpose of this Plan is to advance the interests of the
Company and its stockholders by helping the Company obtain and retain the
services of employees, officers, consultants, and directors, upon whose
judgment, initiative and efforts the Company is substantially dependent, and to
provide those persons with further incentives to advance the interests of the
Company.
(b) This Plan will become effective on the date of its adoption by
the Board, provided this Plan is approved by the stockholders of the Company
(excluding holders of shares of Stock issued by the Company pursuant to the
exercise of options granted under this Plan) within twelve (12) months before or
after that date. If this Plan is not so approved by the stockholders of the
Company, any options granted under this Plan will be rescinded and will be void.
This Plan will remain in effect until it is terminated by the Board or the
Committee (as defined hereafter) under section 9 hereof, except that no ISO (as
defined herein) will be granted after the tenth anniversary of the date of this
Plan's adoption by the Board. This Plan will be governed by, and construed in
accordance with, the laws of the State of Connecticut.
2. CERTAIN DEFINITIONS. Unless the context otherwise requires, the
following defined terms (together with other capitalized terms defined elsewhere
in this Plan) will govern the construction of this Plan, and of any stock option
agreements entered into pursuant to this Plan:
(a)"10% Stockholder" means a person who owns, either directly or
indirectly by virtue of the ownership attribution provisions set
forth in Section 424(d) of the Code at the time he or she is granted
an Option, stock possessing more than ten percent (10%) of the total
combined voting power or value of all classes of stock of the Company
and/or of its subsidiaries;
(b)"1933 Act" means the federal Securities Act of 1933, as amended;
(c)"Board" means the Board of Directors of the Company;
(d)"Called for under an Option," or words to similar effect, means
issuable pursuant to the exercise of an Option;
(e)"Code" means the Internal Revenue Code of 1986, as amended
(references herein to Sections of the Code are intended to refer to
Sections of the Code as enacted at the time of this Plan's adoption
by the Board and as subsequently amended, or to any substantially
similar successor provisions of the Code resulting from
re-codification, renumbering or otherwise);
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(f)"Committee" means a committee of two or more directors, appointed
by the Board, to administer and interpret this Plan; provided that
the term "Committee" will refer to the Board during such times as no
Committee is appointed by the Board.
(g)"Company" means The First Connecticut Capital Corporation, a
Connecticut corporation;
(h)"Disability" has the same meaning as "permanent and total
disability," as defined in Section 22(e)(3) of the Code;
(i)"Eligible Participants" means persons who, at a particular time,
are employees, officers, consultants, or directors of the Company or
its subsidiaries;
(j)"Fair Market Value" means, with respect to the Stock and as of the
date an ISO is granted hereunder, the market price per share of such
Stock determined by the Committee, consistent with the requirements
of Section 422 of the Code and to the extent consistent therewith, as
follows:
(i) If the Stock was traded on a stock exchange on the date in
question, when the Fair Market Value will be equal to the closing
price reported by the applicable composite-transactions report for
such date;
(ii) If the Stock was traded over-the-counter on the date in
question and was classified as a national market issue, then the Fair
Market Value will be equal to the last-transaction price quoted by
the NASDAQ system for such date;
(iii) If the Stock was traded over-the-counter on the date in
question but was not classified as a national market issue, then the
Fair Market Value will be equal to the average of the last reported
representative bid and asked prices quoted by the NASDAQ system for
such date; and
(iv) If none of the foregoing provisions is applicable, then the
Fair Market Value will be determined by the Committee in good faith
on such basis as it deems appropriate.
(k) "ISO" has the same meaning as "incentive stock option," as
defined in Section 422 of the Code;
(l) "Involuntary Transfer" means a Transfer that occurs pursuant to
any of the following: an assignment of Option Stock for the benefit
of creditors of the Optionee; a Transfer by operation of law,
including, without limitation, a Transfer by will or under the laws
of descent and distribution; an execution of judgment against the
Option Stock or the acquisition of record or beneficial ownership of
Option Stock by a lender or creditor; a Transfer pursuant to any
decree of divorce, dissolution or separate maintenance, any property
settlement, any separation agreement or any other agreement with a
spouse (except for estate planning purposes) under which a part or
all of any Option Stock are Transferred or awarded to the spouse of
the Optionee or are required to be sold; or a Transfer resulting from
the filing by the Optionee of a petition for relief, or the filing of
an involuntary petition against the Optionee, under the bankruptcy
laws of the United States or of any other nation;
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(m)"Just Cause Termination" means a termination by the Company of an
Optionee's employment by and/or service to the Company (or if the
Optionee is a director, removal of the Optionee from the Board by
action of the stockholders or, if permitted by applicable law and the
by-laws of the Company, the other directors), in connection with the
good faith determination of the Company's board of directors (or of
the Company's stockholders if the Optionee is a director and the
removal of the Optionee from the Board is by action of the
stockholders, but in either case excluding the vote of the Optionee
if he or she is a director or a stockholder) that the Optionee has
engaged in any acts involving dishonesty or moral turpitude or in any
acts that materially and adversely affect the business, affairs or
reputation of the Company or its subsidiaries;
(n) "NSO" means any option granted under this Plan whether designated
by the Committee as a "non-qualified stock option," a "non-statutory
stock option" or otherwise, other than an option designated by the
Committee as an ISO, or any option so designated but which, for any
reason, fails to qualify as an ISO pursuant to Section 422 of the
Code and the rules and regulations thereunder;
(o) "Option" means an option granted pursuant to this Plan entitling
the option holder to acquire shares of Stock issued by the Company
pursuant to the valid exercise of the option;
(p) "Option Agreement" means an agreement between the Company and an
Optionee, in form and substance satisfactory to the Committee in its
sole discretion, consistent with this Plan;
(q)"Option Price" with respect to any particular Option means the
exercise price at which the Optionee may acquire each share of the
Option Stock called for under such Option;
(r)"Option Stock" means Stock issued or issuable by the Company
pursuant to the valid exercise of an Option;
(s) "Optionee" means an Eligible Participant to whom Options are
granted hereunder, and any transferee thereof pursuant to a Transfer
authorized under this Plan;
(t) "Plan" means this 1999 Stock Option Plan of the Company;
(u) "QDRO" has the same meaning as "qualified domestic relations
order" as defined in Section 414(p) of the Code;
(v) "Stock" means shares of the Company's Common voting stock;
C-3
(w) "Subsidiary" has the same meaning as "Subsidiary Corporation" as
defined in Section 424(f) of the Code;
(x) "Transfer," with respect to Option Stock, includes, without
limitation, a voluntary or involuntary sale, assignment, transfer,
conveyance, pledge, hypothecation, encumbrance, disposal, loan, gift,
attachment or levy of such Option Stock; and
(y) "Voluntary Transfer" means any Transfer other than an Involuntary
Transfer.
3. ELIGIBILITY. The Company may grant Options under this Plan only to
persons who are Eligible Participants as of the time of such grant. Subject to
the provisions of sections 4(d), 5 and 6 hereof, there is no limitation on the
number of Options that may be granted to an Eligible Participant.
4. ADMINISTRATION.
(a) COMMITTEE. The Committee, if appointed by the Board, will
administer this Plan. If the Board, in its discretion, does not appoint such a
Committee, the Board itself will administer this Plan and take such other
actions as the Committee is authorized to take hereunder; provided that the
Board may take such actions hereunder in the same manner as the Board may take
other actions under the Company's certificate of incorporation and by-laws
generally.
(b) AUTHORITY AND DISCRETION OF COMMITTEE. The Committee will have
full and final authority in its discretion, at any time and from time to time,
subject only to the express terms, conditions and other provisions of the
Company's certificate of incorporation, by-laws and this Plan, and the specific
limitations on such discretion set forth herein:
(i) to select and approve the persons who will be granted
Options under this Plan from among the Eligible
Participants, and to grant to any person so selected one or
more Options to purchase such number of shares of Option
Stock as the Committee may determine;
(ii) to determine the period or periods of time during which
Options may be exercised, the Option Price and the duration
of such Options, and other matters to be determined by the
Committee in connection with specific Option grants and
Option Agreements as specified under this Plan;
(iii) to interpret this Plan, to prescribe, amend and rescind
rules and regulations relating to this Plan, and to make
all other determinations necessary or advisable for the
operation and administration of this Plan; and
(iv) to delegate all or a portion of its authority under
subsections (i) and (ii) of this section 4(b) to one or
more directors of the Company who are executive officers of
the Company, but only in connection with Options granted to
Eligible Participants who are not officers or directors of
the Company, and subject to such restrictions and
limitations (such as the aggregate number of shares of
Option Stock called for by such Options that may be
granted) as the Committee may decide to impose on such
delegate directors.
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(c) LIMITATION ON AUTHORITY. Notwithstanding the foregoing, or any
other provision of this Plan, the Committee will have no authority to grant
Options to any of its members, unless approved by the Board.
(d) DESIGNATION OF OPTIONS. Except as otherwise provided herein, the
Committee will designate any Option granted hereunder either as an ISO or as an
NSO. To the extent that the Fair Market Value (determined at the time the Option
is granted) of Stock with respect to which all ISOs are exercisable for the
first time by any individual during any calendar year (pursuant to this Plan and
all other plans of the Company and/or its subsidiaries) exceeds $100,000, such
option will be treated as an NSO. Notwithstanding the general eligibility
provisions of section 3 hereof, the Committee may grant ISOs only to persons who
are employees of the Company and/or its subsidiaries.
(e) OPTION AGREEMENTS. Options will be deemed granted hereunder only
upon the execution and delivery of an Option Agreement by the Optionee and a
duly authorized officer of the Company. Options will not be deemed granted
hereunder merely upon the authorization of such grant by the Committee.
5. SHARES RESERVED FOR OPTIONS.
(a) OPTION POOL. The aggregate number of shares of Option Stock that
may be issued pursuant to the exercise of Options granted under this Plan will
not exceed One Hundred Fifty Thousand (150,000) (the "Option Pool"), provided
that such number will be increased by the number of shares of Option Stock that
the Company subsequently may reacquire through repurchase or otherwise. Shares
of Option Stock that would have been issuable pursuant to Options, but that are
no longer issuable because all or part of those Options have terminated or
expired, will be deemed not to have been issued for purposes of computing the
number of shares of Option Stock remaining in the Option Pool and available for
issuance.
(b) ADJUSTMENTS UPON CHANGES IN STOCK. In the event of any change in
the outstanding Stock of the Company as a result of a stock split, reverse stock
split, stock dividend, recapitalization, combination or reclassification,
appropriate proportionate adjustments will be made in: (i) the aggregate number
of shares of Option Stock in the Option Pool that may be issued pursuant to the
exercise of Options granted hereunder; (ii) the Option Price and the number of
shares of Option Stock called for in each outstanding Option granted hereunder;
and (iii) other rights and matters determined on a per share basis under this
Plan of any Option Agreement hereunder. Any such adjustments will be made only
by the Board, and when so made will be effective, conclusive and binding for all
purposes with respect to this Plan and all Options then outstanding. No such
adjustments will be required by reason of the issuance or sale by the Company
for cash or other consideration of additional shares of its Stock or securities
convertible into or exchangeable for shares of its Stock.
6. TERMS OF STOCK OPTION AGREEMENTS. Each Option granted pursuant to
this Plan will be evidenced by an agreement (an "Option Agreement") between the
Company and the person to whom such Option is granted, in form and substance
satisfactory to the Committee in its sole discretion, consistent with this Plan.
Without limiting the foregoing, each Option Agreement (unless otherwise stated
therein) will be deemed to include the following terms and conditions:
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(a) COVENANTS OF OPTIONEE. At the discretion of the Committee, the
person to whom an Option is granted hereunder, as a condition to the granting of
the Option, must execute and deliver to the Company a confidential information
agreement approved by the Committee. Nothing contained in this Plan, any Option
Agreement or in any other agreement executed in connection with the granting of
an Option under this Plan will confer upon any Optionee any right with respect
to the continuation of his or her status as an employee of, consultant or
independent contractor to, or director of, the Company or its subsidiaries.
(b) VESTING PERIODS. Except as otherwise provided herein, each Option
Agreement may specify the period or periods of time within which each Option or
portion thereof will first become exercisable (the "Vesting Period") with
respect to the total number of shares of Option Stock called for thereunder (the
"Total Award Option Stock"). Such Vesting Periods will be fixed by the Committee
in its discretion, and may be accelerated or shortened by the Committee in its
discretion. Unless the Option Agreement executed by an Optionee expressly
otherwise provides and except as set forth herein, the right to exercise an
Option granted hereunder will vest immediately upon the grant thereof by the
Committee, or on such later Grant Date as may be specified in such Option
Agreement.
(c) EXERCISE OF THE OPTION.
(i) MECHANICS AND NOTICE. An Option may be exercised to the extent
exercisable (1) by giving written notice of exercise to the Company,
specifying the number of full shares of Option Stock to be purchased
and accompanied by full payment of the Option Price thereof and the
amount of withholding taxes pursuant to subsection 6(c)(ii) below;
and (2) by giving assurances satisfactory to the Company that the
shares of Option Stock to be purchased upon such exercise are being
purchased for investment and not with a view to resale in connection
with any distribution of such shares in violation of the 1933 Act;
provided, however, that in the event the Option Stock called for
under the Option is registered under the 1933 Act, or in the event
resale of such Option Stock without such registration would otherwise
be permissible, this second condition will be inoperative if, in the
opinion of counsel for the Company, such condition is not required
under the 1933 Act, or any other applicable law, regulation or rule
of any governmental agency.
(ii) WITHHOLDING TAXES. As a condition to the issuance of the shares
of Option Stock upon full or partial exercise of an NSO granted under
this Plan, the Optionee will pay to the Company in cash, or in such
other form as the Committee may determine in its discretion, the
amount of the Company's tax withholding liability required in
connection with such exercise. For purposes of this subsection
6(c)(ii), "tax withholding liability" will mean all federal and state
income taxes, social security tax, and any other taxes applicable to
the compensation income arising from the transaction required by
applicable law to be withheld by the Company.
C-6
(d) PAYMENT OF OPTION PRICE. Each Option Agreement will specify the
Option Price with respect to the exercise of Option Stock thereunder, to be
fixed by the Committee in its discretion, but in no event will the Option Price
for an ISO granted hereunder be less than the Fair Market Value (or, in case the
Optionee is a 10% Stockholder, one hundred ten percent (110%) of such Fair
Market Value) of the Option Stock at the time such ISO is granted. The Option
Price will be payable to the Company in United States dollars in cash or by
check or, such other legal consideration as may be approved by the Committee, in
its discretion.
(e) TERMINATION OF THE OPTION. Except as otherwise provided herein,
each Option Agreement will specify the period of time, to be fixed by the
Committee in its discretion, during which the Option granted therein will be
exercisable, not to exceed ten (10) years from the date of grant in the case of
an ISO (the "Option Period"); provided that the Option Period will not exceed
five (5) years from the date of grant in the case of an ISO granted to a 10%
Stockholder. To the extent not previously exercised, each Option will terminate
upon the expiration of the Option Period specified in the Option Agreement;
provided, however, that each such Option will terminate, if earlier: (i) ninety
(90) days after the date that the Optionee ceases to be an Eligible Participant
for any reason, other than by reason of death or disability or a Just Cause
Termination; (ii) twelve (12) months after the date that the Optionee ceases to
be an Eligible Participant by reason of such person's death or disability; or
(iii) immediately as of the date that the Optionee ceases to be an Eligible
Participant by reason of a Just Cause Termination; provided, however, that the
Board or the Stock Option Committee may, in its discretion, extend or waive any
expiration based (i), (ii) or (iii) above. . In the event of a merger or
consolidation or other reorganization (a "Corporate Transaction") in which the
Company is not the surviving corporation, or in which the Company becomes a
subsidiary of another corporation, then notwithstanding anything else herein,
the right to exercise all then outstanding Options will vest immediately prior
to such Corporate Transaction and will terminate immediately after such
Corporate Transaction; provided, however, that if the Board, in its sole
discretion, determines that such immediate vesting of the right to exercise
outstanding Options is not in the best interests of the Company, then the
successor corporation must agree to assume the outstanding Options or substitute
therefor comparable options of such successor corporation or a parent or
subsidiary of such successor corporation.
(f) OPTIONS NONTRANSFERABLE. No Option will be transferable by the
Optionee otherwise than by will or the laws of descent and distribution, or in
the case of an NSO, pursuant to a QDRO. During the lifetime of the Optionee, the
Option will be exercisable only by him or her, or the transferee of an NSO if it
was transferred pursuant to a QDRO.
(g) QUALIFICATION OF STOCK. The right to exercise an Option will be
further subject to the requirement that if at any time the Board determines, in
its discretion, that the listing, registration or qualification of the shares of
Option Stock called for thereunder upon any securities exchange or under any
state or federal law, or the consent or approval of any governmental regulatory
authority, is necessary or desirable as a condition of or in connection with the
granting of such Option or the purchase of shares of Option Stock thereunder,
the Option may not be exercised, in whole or in part, unless and until such
listing, registration, qualification, consent or approval is effected or
obtained free of any conditions not acceptable to the Board, in its discretion.
(h) RESTRICTIONS ON TRANSFER OF OPTION STOCK.
C-7
(i) GENERAL RULES ON PERMISSIBLE TRANSFER OF OPTION STOCK. Option Stock
may be Transferred only after compliance with the specific
limitations on the Transfer of Option Stock set forth below with
respect to restrictions upon Transfer imposed by applicable state or
federal securities laws, and certain undertakings of the transferee
as set forth in subsection 6(h)(iii). All Transfers of Option Stock
not meeting the conditions set forth in this subsection 6(h) are
expressly prohibited.
(ii) EFFECT OF PROHIBITED TRANSFER. Any prohibited Transfer, whether
Voluntary or Involuntary, is void and of no effect. Should such a
Transfer purport to occur, the Company may refuse to carry out the
Transfer on its books, attempt to set aside the Transfer, enforce any
undertaking or right under this subsection 6(h), or exercise any
other legal or equitable remedy.
(iii) REQUIRED UNDERTAKING. Any Transfer that would otherwise be permitted
under the terms of this Plan is prohibited unless the transferee
executes such documents as the Company may reasonably require to
ensure that the Company's rights under an Option Agreement and this
Plan are adequately protected with respect to the Option Stock so
Transferred. Such agreements may include, without limitation, the
transferee's agreement to be bound by all of the terms of this Plan,
and of the applicable Option Agreement, as if he or she were the
original Optionee.
(i) SPECIFIC RESTRICTIONS ON TRANSFER. By accepting Options and/or
Option Stock under this Plan, the Optionee will be deemed to represent, warrant
and agree as follows:
(i) SECURITIES ACT OF 1933. The Optionee understands that the shares
of Option Stock have not been registered under the 1933 Act, and that
such shares are not freely tradeable and must be held indefinitely
unless such shares are either registered under the 1933 Act or an
exemption from such registration is available. The Optionee
understands that the Company is under no obligation to register the
shares of Option Stock.
(ii) OTHER APPLICABLE LAWS. The Optionee further understands that
Transfer of the Option Stock requires full compliance with the
provisions of all applicable laws.
(iii) INVESTMENT INTENT. (1) Upon exercise of any Option, the
Optionee will purchase the Option Stock for his or her own account
and not with a view to distribution within the meaning of the 1933
Act, other than as may be effected in compliance with the 1933 Act
and the rules and regulations promulgated thereunder; (2) no one else
will have any beneficial interest in the Option Stock; and (3) he or
she has no present intention of disposing of the Option Stock at any
particular time.
(j) COMPLIANCE WITH LAW. Notwithstanding any other provision of this
Plan, Options may be granted pursuant to this Plan, the Option Stock may be
issued pursuant to the exercise thereof by an Optionee, only after there has
been compliance with all applicable federal and state securities laws, and all
of the same will be subject to this overriding condition. The Company will not
be required to register or qualify Option Stock with the Securities and Exchange
Commission or any State agency, except that the Company will register with, or
as required by local law, file for and secure an exemption from such
registration requirements from, the applicable securities administrator and
other officials of each jurisdiction in which an Eligible Participant would be
granted an Option hereunder prior to such grant.
C-8
(k) STOCK CERTIFICATES. Certificates representing the Option Stock
issued pursuant to the exercise of Options will bear all legends required by law
and necessary to effectuate this Plan's provisions. The Company may place a
"stop transfer" order against shares of the Option Stock until all restrictions
and conditions set forth in this Plan and in the legends referred to in this
section 6(k) have been complied with.
(l) MARKET STANDOFF. To the extent requested by the Company and any
underwriter of securities of the Company in connection with a firm commitment
underwriting, no holder of any shares of Option Stock will sell or otherwise
Transfer any such shares not included in such underwriting, or not previously
registered pursuant to a registration statement filed under the 1933 Act, during
the one hundred and twenty (120) day period following the effective date of the
registration statement filed with the Securities and Exchange Commission in
connection with such offering.
(m) NOTICES. Any notice to be given to the Company under the terms of
an Option Agreement will be addressed to the Company at its principal executive
office, Attention: Corporate Secretary, or at such other address as the Company
may designate in writing. Any notice to be given to an Optionee will be
addressed to the Optionee at the address provided to the Company by the
Optionee. Any such notice will be deemed to have been duly given if and when
enclosed in a properly sealed envelope, addressed as aforesaid, registered and
deposited, postage and registry fee prepaid, in a post office or branch post
office regularly maintained by the United States Government, by telecopier or
nationally recognized overnight delivery service.
(n) OTHER PROVISIONS. The Option Agreement may contain such other
terms, provisions and conditions, including restrictions on the Transfer of
Option Stock issued upon exercise of any Options granted hereunder, not
inconsistent with this Plan, as may be determined by the Committee in its sole
discretion.
7. PROCEEDS FROM SALE OF STOCK. Cash proceeds from the sale of shares
of Option Stock issued from time to time upon the exercise of Options granted
pursuant to this Plan will be added to the general funds of the Company and as
such will be used from time to time for general corporate purposes.
8. MODIFICATION, EXTENSION AND RENEWAL OF OPTIONS. Subject to the
terms and conditions and within the limitations of this Plan, the Committee may
modify Options granted under this Plan, or accept the surrender of outstanding
Options (to the extent not theretofore exercised) and authorize the granting of
new Options in substitution therefor. Notwithstanding the foregoing, however, no
modification of any Option will, without the consent of the holder of the
Option, alter or impair any rights or obligations under any Option theretofore
granted under this Plan.
9. AMENDMENT AND DISCONTINUANCE. The Board may amend, suspend or
discontinue this Plan at any time or from time to time; provided that no action
of the Board will cause ISOs granted under this Plan not to comply with Section
422 of the Code unless the Board specifically declares such action to be made
for that purpose and provided further that no such action may, without the
approval of the stockholders of the Company, increase (other than by reason of
an adjustment pursuant to section 5(b) hereof) the maximum aggregate number of
shares of Option Stock in the Option Pool that may be issued under Options
granted pursuant to this Plan. Moreover, no such action may alter or impair any
Option previously granted under this Plan without the consent of the holder of
such Option.
C-9
10. COPIES OF PLAN. A copy of this Plan will be delivered to each
Optionee at or before the time he or she executes an Option Agreement.
Date Plan Approved by Stockholders: , 2002
C-10
ANNEX D
Fairness Opinion
WESTWOOD PARTNERS, LTD
420 LEXINGTON AVENUE
NEW YORK, N.Y. 10170
September 9, 2002
Board of Directors
The First Connecticut Capital Corporation
1000 Bridgeport Avenue
Shelton, CT. 06484
RE: FAIRNESS OPINION
Dear Members of the Board:
The First Connecticut Capital Corporation ("First Connecticut" or the
"Company") and FCCC Holding Company, LLC, a Connecticut limited liability
company, whose members comprise the board of directors of First Connecticut have
entered into an Asset Purchase Agreement dated as of June 28, 2002 (the "Asset
Purchase Agreement") relating to a certain transaction described herein. You
have requested our opinion as to the fairness, from a financial point of view,
of the transaction contemplated in connection with the Asset Purchase Agreement
to the existing holders of the Company's outstanding shares of Common Stock (the
"Common Stock"). The asset purchase transaction contemplated by and described in
the Asset Purchase Agreement is herein sometimes referred to as the
"Transaction".
Pursuant to the Asset Purchase Agreement, and subject to the
conditions thereof, it is contemplated, among other things, that the Company
will sell, transfer and assign to Holding all of the operating assets and the
business of the Company (the "Assets"), excluding cash and certain deferred tax
assets, the value of which (if any) cannot be determined at this time, in
consideration of (1) the assumption by Holding of all liabilities, debts and
obligations of the Company as at the date of closing and (2) the cash payment by
Holding to the Company of an amount equal to the approximate net book value of
the Assets as at the date of closing, as determined by the report of the Clayton
Group, an independent appraiser of financial services assets ("Clayton"). Based
upon Clayton's report, in the event that the Transaction had closed as of June
30, 2002, then, on a Pro Forma basis, the aggregate purchase price to be
received by the Company would be $1,046,000, the approximate book value of the
Assets, less cash and deferred tax assets.
While the parties to the Asset Purchase Agreement make certain
customary representations and warranties with respect to their existence and
ability to consummate the Transaction, the Company does not make any substantive
representations or warranties with respect to the Assets. The obligations of the
parties to close the transaction are subject to certain conditions, which
include, among others:
1. Approval of the Asset Purchase Agreement by the stockholders of
the Company holding not less than the two-thirds of the issued and
outstanding shares of Common Stock;
2. Accuracy in all material respects of the representations and
warranties contained in the Asset Purchase Agreement;
D-1
3. Compliance in all material respects with all agreements and
obligations of each of the Company and Holding that are required to
be complied with before consummation of the Transaction;
4. Receipt of any and all consents and waivers of third parties that
are required to be obtained before the consummation of the
Transaction;
5. Assumption by Holding of all liabilities of the Company
6. Absence of any law or injunction preventing the Transaction;
7. Approval by the stockholders of the Company of:
(i) The election of the five nominees for directors of the
Company;
(ii) That certain 2002 Equity Incentive Plan;
(iii) That certain Stock Purchase Agreement (the Stock Purchase
Agreement among the Company, Bernard Zimmerman & Co,
Inc.("Zimmerman") and the Cohen Profit sharing Plan ("Cohen"); and
(iv) The change of the Company's corporate name.
Westwood Partners, Ltd. has from time to time acted as financial advisor to the
Company and has acted as its financial advisor in connection with the
Transaction and will receive a fee for rendering this opinion pursuant to our
engagement agreement with the Company dated February 11, 2000, as amended from
time to time (the "Engagement Agreement"). In addition, as you know, Westwood's
President is an of-counsel attorney to and our Vice President and Managing
director is the Managing Partner of the law firm of Lev & Berlin, P.C., which
has acted as special counsel to the Company in connection with the Transaction.
In arriving at our opinion expressed in this letter, we have, among
other things:
1. Reviewed the terms and conditions of the Asset Purchase Agreement and
the agreements and instruments to be entered into pursuant thereto;
2. Reviewed the Preliminary Proxy Statement dated September 13, 2002 (the
"Proxy Statement") relating to the Annual Meeting of Shareholders to be held on
or about October 31, 2002 and regarding, among other things, the approval of the
Transaction;
3. Analyzed certain historical business and financial information relating
to the Company, including the Annual Reports on Form 10-KSB of the Company for
each of its fiscal years ended March, 1996 through March, 2001, the Company's
Quarterly Report on Form 10-QSB for its fiscal quarter ended June 30, 2002 and
certain internal business and financial information prepared by management of
the Company;
4. Conducted discussions with members of the senior management of the
Company with respect to the business and prospects of the Company as well as
management's assessment of the prospects for the construction mortgage lending
industry in general;
5. Considered the views of the Company's management concerning the costs
associated with continuing to operate the current business of the Company
through a publicly traded corporation;
D-2
6. Considered the current financial condition of the Company, including its
current need for capital, alternatives for raising capital and the relative
costs of such alternatives, the terms of its present credit facilities and the
substantial resources required to continue the growth of the Company's business
within a publicly traded corporation under present economic and market
conditions; and
7. Conducted such other financial studies, analyses and investigations as
we deemed appropriate.
In addition to the specific information summarized above, our opinion expressed
herein reflects our general familiarity with the Company as well as information
regarding the current prospects for the Company and business combination
alternatives available to it, which information we acquired during the course of
our association with the Company, and, in particular, our engagement under the
Engagement Agreement. Our opinion does not, however, constitute a recommendation
of the Transaction over any other alternative transactions which may be
available to the Company.
We have assumed and relied upon the accuracy and completeness of the financial
and other information provided by the Company to us and, representations
contained in the Asset Purchase Agreement, and the report of the Clayton Group
and we have not undertaken any independent verification of such information or
any independent valuation or appraisal of any of the Assets. Our opinion is
limited to the form of the transaction since the amount of the purchase price
has been determined in accordance with the valuation of the Company's assets by
the Clayton Group, a national independent appraiser. With respect to the
financial forecasts referred to above, we have assumed that they have been
reasonably prepared on a basis reflecting the best currently available judgments
of the management of the Company as to the future financial performance of the
Company. Furthermore, our opinions are based on economic, monetary and market
conditions existing on this date. We express no opinion herein as to any matter
other than the Transaction, including, without limitation, the Stock Purchase
Agreement or any transaction contemplated or described therein.
Our engagement and the opinions expressed herein are solely for the benefit of
the Company's stockholders, including those affiliated stockholders who are
purchasing the assets of the Company and whose interests in the transaction may
conflict with the unaffiliated stockholders. The opinion rendered herein does
not, however, constitute a recommendation by our firm that any stockholder of
the Company vote to approve the Transaction or any other matter discussed or
described in the Proxy Statement.
Based on and subject to the foregoing factors, including our assessment of
economic, monetary and market conditions existing on the date of this letter, we
are of the opinion that, as of this date, the Transaction is fair, from a
financial point of view, to the current holders of the Company's Common Stock.
Very truly yours,
WESTWOOD PARTNERS, LTD.
By: Duane L. Berlin
Its: Vice President and Managing Director
D-3
WESTWOOD PARTNERS, LTD
420 LEXINGTON AVENUE
NEW YORK, N.Y. 10170
September 9, 2002
Board of Directors
The First Connecticut Capital Corporation
1000 Bridgeport Avenue
Shelton, CT. 06484
RE: CONSENT TO ANNEX FAIRNESS OPINION TO PROXY STATEMENT
Gentlemen:
This will serve as our consent for you to annex our fairness opinion
relating to the proposed sale of the assets of The First Connecticut Capital
Corp. to that certain Proxy Statement dated September, 2002, provided that you
agree to reimburse us with respect to any cost or expense arising out of or
related to such annexation.
Very truly yours,
WESTWOOD PARTNERS, LTD.
By: Duane L. Berlin
Its: Vice President and Managing Director
D-4
ANNEX E
April 3, 2003
Mr. Lawrence Yurdin
First Connecticut Capital Corporation
1000 Bridgeport Avenue, First Floor
Shelton, CT 06484
RE: ESTIMATE OF VALUE-FIRST CONNECTICUT CAPITAL ASSET REPORT AS OF DECEMBER 30,
2002 (4TH UPDATE)
Dear Larry:
I have re-reviewed the updated spreadsheet titled "First Connecticut
Capital Asset Report 30-Dec-02" for the purpose of putting an updated value on
the portfolio. The portfolio book value is $3,625,118.84 less the Hudson United
Line of Credit of $1,796,500.00, leaving a retained balance of $1,828,618.84 as
of December 30, 2002.
Once again, although loan status changes (either positive or negative),
have been negligible, lower interest rates have had a positive effect on the
overall value of the portfolio. Using, the sixth month London Interbank Offered
Rate (6 Month LIBOR) as a benchmark, we have increased our estimate 21 basis
points, which is roughly half of the difference between 6 Month LIBOR in August
2002 (1.815%) and in the first week of January 2003 (1.400%). This equates to a
lower range percentage price of 89.42% and a higher range price percentage of
92.42%. Thus, our opinion of the value is between $1,635,151 to $1,690,009.
The old SBIC loans (King Foods, JHB Realty Trust, Fire Island Haulage)
still have severe property and borrower issues that negatively affect their
value. We project their value to be between $41,883.79 and $88,021.69. This
computes to a range of 7.18% to 14.89% of the $602,603 book balance. The
breakdown appears below:
--------------------------- ------------------------ --------------------------- ---------------------------
LOW PRICE HIGH PRICE
LOAN UPB
--------------------------- ------------------------ --------------------------- ---------------------------
--------------------------- ------------------------ --------------------------- ---------------------------
King Foods $14,442.00 $833.61 $1,461.70
--------------------------- ------------------------ --------------------------- ---------------------------
--------------------------- ------------------------ --------------------------- ---------------------------
Fire Island Haulage $466,589.00 $18,889.79 $42,291.60
--------------------------- ------------------------ --------------------------- ---------------------------
--------------------------- ------------------------ --------------------------- ---------------------------
JHB Realty Trust $121,572.00 $22,160.39 $44,268.39
--------------------------- ------------------------ --------------------------- ---------------------------
|
E-1
With only a small number of loans remaining, all with very short remaining
terms, there is currently no market for the servicing rights and therefore no
value given.
I hope this latest update is useful to you and First Connecticut. Should
you have any further questions concerning anything discussed above, please do
not hesitate to contact me at (203) 926-5611. Thank you for using the services
of The Clayton Group.
Sincerely,
Neil Spagna
Senior Vice President
E-2
LAWRENCE R. YURDIN
PRESIDENT & CEO
THE FIRST CONNECTICUT CAPITAL CORPORATION
1000 BRIDGEPORT AVENUE
SHELTON, CT 06484
Toll Free (800) 401-FCCC Phone (203) 944-5400
FAX (203) 944-5405
August 23, 2002
Mr. Neil Spagna
The Clayton Group, Inc.
2 Corporate Dive
Shelton, CT. 06484
RE: First Connecticut Asset Report
Dear Neil,
Confirming our conversation today, it is understood that FCCC has the permission
of the Clayton Group, Inc. to incorporate the First Connecticut Asset Report
that the Clayton Group, Inc. prepared in our soon to be released proxy
statement.
It is also understood that FCCC will reimburse the Clayton Group for any
additional reasonable expense incurred for future time spent regarding this
asset report.
We appreciate your assistance in this matter.
Very truly yours,
Lawrence R. Yurdin
President & CEO
LRY:kr
E-3
ANNEX F
Connecticut General Statutes
(Sections 33-855 through 33-872)
PART XIII
DISSENTERS' RIGHTS
(A) RIGHT TO DISSENT AND OBTAIN PAYMENT FOR SHARES
SEC. 33-855. DEFINITIONS. As used in sections 33-855 to 33-872, inclusive:
(1) "Corporation" means the issuer of the shares held by a dissenter before the
corporate action or the surviving or acquiring corporation by merger or share
exchange of that issuer.
(2) "Dissenter" means a shareholder who is entitled to dissent from corporate
action under section 33-856 and who exercises that right when and in the manner
required by sections 33-860 to 33-868, inclusive.
(3) "Fair value", with respect to a dissenter's shares, means the value of the
shares immediately before the effectuation of the corporate action to which the
dissenter objects, excluding any appreciation or depreciation in anticipation of
the corporate action.
(4) "Interest" means interest from the effective date of the corporate action
until the date of payment, at the average rate currently paid by the corporation
on its principal bank loans or, if none, at a rate that is fair and equitable
under all the circumstances.
(5) "Record shareholder" means the person in whose name shares are registered in
the records of a corporation or the beneficial owner of shares to the extent of
the rights granted by a nominee certificate on file with a corporation. (6)
"Beneficial shareholder" means the person who is a beneficial owner of shares
held in a voting trust or by a nominee as the record shareholder.
(7) "Shareholder" means the record shareholder or the beneficial shareholder.
(P.A. 94-186, S. 147, 215.)
SEC. 33-856. RIGHT TO DISSENT. (a) A shareholder is entitled to dissent from,
and obtain payment of the fair value of his shares in the event of, any of the
following corporate actions:
(1) Consummation of a plan of merger to which the corporation is a party (A) if
shareholder approval is required for the merger by section 33-817 or the
certificate of incorporation and the shareholder is entitled to vote on the
merger or (B) if the corporation is a subsidiary that is merged with its parent
under section 33-818;
(2) Consummation of a plan of share exchange to which the corporation is a party
as the corporation whose shares will be acquired, if the shareholder is entitled
to vote on the plan;
(3) Consummation of a sale or exchange of all, or substantially all, of the
property of the corporation other than in the usual and regular course of
business, if the shareholder is entitled to vote on the sale or exchange,
including a sale in dissolution, but not including a sale pursuant to court
order or a sale for cash pursuant to a plan by which all or substantially all of
the net proceeds of the sale will be distributed to the shareholders within one
year after the date of sale;
(4) An amendment of the certificate of incorporation that materially and
adversely affects rights in respect of a dissenter's shares because it: (A)
Alters or abolishes a preferential right of the shares; (B) creates, alters or
abolishes a right in respect of redemption,
F-1
including a provision respecting a sinking fund for the redemption or
repurchase, of the shares; (C) alters or abolishes a preemptive right of the
holder of the shares to acquire shares or other securities; (D) excludes or
limits the right of the shares to vote on any matter, or to cumulate votes,
other than a limitation by dilution through issuance of shares or other
securities with similar voting rights; or (E) reduces the number of shares owned
by the shareholder to a fraction of a share if the fractional share so created
is to be acquired for cash under section 33-668; or
(5) Any corporate action taken pursuant to a shareholder vote to the extent the
certificate of incorporation, bylaws or a resolution of the board of directors
provides that voting or nonvoting shareholders are entitled to dissent and
obtain payment for their shares. (b) Where the right to be paid the value of
shares is made available to a shareholder by this section, such remedy shall be
his exclusive remedy as holder of such shares against the corporate transactions
described in this section, whether or not he proceeds as provided in sections
33-855 to 33-872, inclusive. (P.A. 94-186, S. 148, 215; P.A. 96-271, S. 111,
254.)
SEC. 33-857. DISSENT BY NOMINEES AND BENEFICIAL OWNERS. (a) A record shareholder
may assert dissenters' rights as to fewer than all the shares registered in his
name only if he dissents with respect to all shares beneficially owned by any
one person and notifies the corporation in writing of the name and address of
each person on whose behalf he asserts dissenters' rights. The rights of a
partial dissenter under this subsection are determined as if the shares as to
which he dissents and his other shares were registered in the names of different
shareholders.
(b) A beneficial shareholder may assert dissenters' rights as to shares held on
his behalf only if: (1) He submits to the corporation the record shareholder's
written consent to the dissent not later than the time the beneficial
shareholder asserts dissenters' rights; and (2) he does so with respect to all
shares of which he is the beneficial shareholder or over which he has power to
direct the vote. (P.A. 94-186, S. 149, 215.)
(Return to TOC) (Return to Chapters) (Return to Titles)
SECS. 33-858 AND 33-859. Reserved for future use.
(B) PROCEDURE FOR EXERCISE OF DISSENTERS' RIGHTS
SEC. 33-860. NOTICE OF DISSENTERS' RIGHTS. (a) If proposed corporate action
creating dissenters' rights under section 33-856 is submitted to a vote at a
shareholders' meeting, the meeting notice shall state that shareholders are or
may be entitled to assert dissenters' rights under sections 33-855 to 33-872,
inclusive, and be accompanied by a copy of said sections. (b) If corporate
action creating dissenters' rights under section 33-856 is taken without a vote
of shareholders, the corporation shall notify in writing all shareholders
entitled to assert dissenters' rights that the action was taken and send them
the dissenters' notice described in section 33-862. (P.A. 94-186, S. 150, 215.)
SEC. 33-861. NOTICE OF INTENT TO DEMAND PAYMENT. (a) If proposed corporate
action creating dissenters' rights under section 33-856 is submitted to a vote
at a shareholders' meeting, a shareholder who wishes to assert dissenters'
rights (1) shall deliver to the corporation before the vote is taken written
notice of his intent to demand payment for his shares if the proposed action is
effectuated and (2) shall not vote his shares in favor of the proposed action.
(b) A shareholder who does not satisfy the requirements of subsection (a) of
this section is not entitled to payment for his shares under sections 33-855 to
33-872, inclusive. (P.A. 94-186, S. 151, 215.)
F-2
SEC. 33-862. DISSENTERS' NOTICE. (a) If proposed corporate action creating
dissenters' rights under section 33-856 is authorized at a shareholders'
meeting, the corporation shall deliver a written dissenters' notice to all
shareholders who satisfied the requirements of section 33-861. (b) The
dissenters' notice shall be sent no later than ten days after the corporate
action was taken and shall: (1) State where the payment demand must be sent and
where and when certificates for certificated shares must be deposited; (2)
Inform holders of un-certificated shares to what extent transfer of the shares
will be restricted after the payment demand is received; (3) Supply a form for
demanding payment that includes the date of the first announcement to news media
or to shareholders of the terms of the proposed corporate action and requires
that the person asserting dissenters' rights certify whether or not he acquired
beneficial ownership of the shares before that date; (4) Set a date by which the
corporation must receive the payment demand, which date may not be fewer than
thirty nor more than sixty days after the date the subsection (a) of this
section notice is delivered; and (5) Be accompanied by a copy of sections 33-855
to 33-872, inclusive. (P.A. 94-186, S. 152, 215.)
SEC. 33-863. DUTY TO DEMAND PAYMENT. (a) A shareholder sent a dissenters' notice
described in section 33-862 must demand payment, certify whether he acquired
beneficial ownership of the shares before the date required to be set forth in
the dissenters' notice pursuant to subdivision (3) of subsection (b) of said
section and deposit his certificates in accordance with the terms of the notice.
(b) The shareholder who demands payment and deposits his share certificates
under subsection (a) of this section retains all other rights of a shareholder
until these rights are cancelled or modified by the taking of the proposed
corporate action. (c) A shareholder who does not demand payment or deposit his
share certificates where required, each by the date set in the dissenters'
notice, is not entitled to payment for his shares under sections 33-855 to
33-872, inclusive. (P.A. 94-186, S. 153, 215.)
SEC. 33-864. SHARE RESTRICTIONS. (a) The corporation may restrict the transfer
of un-certificated shares from the date the demand for their payment is received
until the proposed corporate action is taken or the restrictions released under
section 33-866. (b) The person for whom dissenters' rights are asserted as to
uncertificated shares retains all other rights of a shareholder until these
rights are cancelled or modified by the taking of the proposed corporate action.
(P.A. 94-186, S. 154, 215.)
SEC. 33-865. PAYMENT. (a) Except as provided in section 33-867, as soon as the
proposed corporate action is taken, or upon receipt of a payment demand, the
corporation shall pay each dissenter who complied with section 33-863 the amount
the corporation estimates to be the fair value of his shares, plus accrued
interest. (b) The payment shall be accompanied by: (1) The corporation's balance
sheet as of the end of a fiscal year ending not more than sixteen months before
the date of payment, an income statement for that year, a statement of changes
in shareholders' equity for that year and the latest available interim financial
statements, if any; (2) a statement of the corporation's estimate of the fair
value of the shares; (3) an explanation of how the interest was calculated; (4)
a statement of the dissenter's right to demand payment under section 33-868; and
(5) a copy of sections 33-855 to 33-872, inclusive. (P.A. 94-186, S. 155, 215;
P.A. 98-137, S. 9, 62; 98-219, S. 33, 34.)
F-3
SEC. 33-866. FAILURE TO TAKE ACTION. (a) If the corporation does not take the
proposed action within sixty days after the date set for demanding payment and
depositing share certificates, the corporation shall return the deposited
certificates and release the transfer restrictions imposed on un-certificated
shares. (b) If after returning deposited certificates and releasing transfer
restrictions, the corporation takes the proposed action, it must send a new
dissenters' notice under section 33-862 and repeat the payment demand procedure.
(P.A. 94-186, S. 156, 215.)
SEC. 33-867. AFTER-ACQUIRED SHARES. (a) A corporation may elect to withhold
payment required by section 33-865 from a dissenter unless he was the beneficial
owner of the shares before the date set forth in the dissenters' notice as the
date of the first announcement to news media or to shareholders of the terms of
the proposed corporate action. (b) To the extent the corporation elects to
withhold payment under subsection (a) of this section, after taking the proposed
corporate action, it shall estimate the fair value of the shares, plus accrued
interest, and shall pay this amount to each dissenter who agrees to accept it in
full satisfaction of his demand. The corporation shall send with its offer a
statement of its estimate of the fair value of the shares, an explanation of how
the interest was calculated and a statement of the dissenter's right to demand
payment under section 33-868. (P.A. 94-186, S. 157, 215.)
SEC. 33-868. PROCEDURE IF SHAREHOLDER DISSATISFIED WITH PAYMENT OR OFFER. (a) A
dissenter may notify the corporation in writing of his own estimate of the fair
value of his shares and amount of interest due, and demand payment of his
estimate, less any payment under section 33-865, or reject the corporation's
offer under section 33-867 and demand payment of the fair value of his shares
and interest due, if: (1) The dissenter believes that the amount paid under
section 33-865 or offered under section 33-867 is less than the fair value of
his shares or that the interest due is incorrectly calculated; (2) The
corporation fails to make payment under section 33-865 within sixty days after
the date set for demanding payment; or (3) The corporation, having failed to
take the proposed action, does not return the deposited certificates or release
the transfer restrictions imposed on un-certificated shares within sixty days
after the date set for demanding payment. (b) A dissenter waives his right to
demand payment under this section unless he notifies the corporation of his
demand in writing under subsection (a) of this section within thirty days after
the corporation made or offered payment for his shares. (P.A. 94-186, S. 158,
215.)
SECS. 33-869 AND 33-870. Reserved for future use.
F-4
(C) JUDICIAL APPRAISAL OF SHARES
SEC. 33-871. COURT ACTION. (a) If a demand for payment under section 33-868
remains unsettled, the corporation shall commence a proceeding within sixty days
after receiving the payment demand and petition the court to determine the fair
value of the shares and accrued interest. If the corporation does not commence
the proceeding within the sixty-day period, it shall pay each dissenter whose
demand remains unsettled the amount demanded. (b) The corporation shall commence
the proceeding in the superior court for the judicial district where a
corporation's principal office or, if none in this state, its registered office
is located. If the corporation is a foreign corporation without a registered
office in this state, it shall commence the proceeding in the superior court for
the judicial district where the registered office of the domestic corporation
merged with or whose shares were acquired by the foreign corporation was
located. (c) The corporation shall make all dissenters, whether or not residents
of this state, whose demands remain unsettled parties to the proceeding as in an
action against their shares and all parties must be served with a copy of the
petition. Nonresidents may be served by registered or certified mail or by
publication as provided by law. (d) The jurisdiction of the court in which the
proceeding is commenced under subsection (b) of this section is plenary and
exclusive. The court may appoint one or more persons as appraisers to receive
evidence and recommend decision on the question of fair value. The appraisers
have the powers described in the order appointing them, or in any amendment to
it. The dissenters are entitled to the same discovery rights as parties in other
civil proceedings. (e) Each dissenter made a party to the proceeding is entitled
to judgment (1) for the amount, if any, by which the court finds the fair value
of his shares, plus interest, exceeds the amount paid by the corporation, or (2)
for the fair value, plus accrued interest, of his after-acquired shares for
which the corporation elected to withhold payment under section 33-867. (P.A.
94-186, S. 159, 215.)
SEC. 33-872. COURT COSTS AND COUNSEL FEES. (a) The court in an appraisal
proceeding commenced under section 33-871 shall determine all costs of the
proceeding, including the reasonable compensation and expenses of appraisers
appointed by the court. The court shall assess the costs against the
corporation, except that the court may assess costs against all or some of the
dissenters, in amounts the court finds equitable, to the extent the court finds
the dissenters acted arbitrarily, vexatiously or not in good faith in demanding
payment under section 33-868. (b) The court may also assess the fees and
expenses of counsel and experts for the respective parties, in amounts the court
finds equitable: (1) Against the corporation and in favor of any or all
dissenters if the court finds the corporation did not substantially comply with
the requirements of sections 33-860 to 33-868, inclusive; or (2) against either
the corporation or a dissenter, in favor of any other party, if the court finds
that the party against whom the fees and expenses are assessed acted
arbitrarily, vexatiously or not in good faith with respect to the rights
provided by sections 33-855 to 33-872, inclusive. (c) If the court finds that
the services of counsel for any dissenter were of substantial benefit to other
dissenters similarly situated, and that the fees for those services should not
be assessed against the corporation, the court may award to these counsel
reasonable fees to be paid out of the amounts awarded the dissenters who were
benefited. (P.A. 94-186, S. 160, 215.)
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