EXHIBIT 2
AGREEMENT
THIS AGREEMENT entered into this 22nd day of November, 1996,
by McM Acquisition Corporation, a North Carolina corporation with
its principal offices and place of business in Raleigh, North
Carolina ("MAC"), and the Wilmington Trust Company (solely in its
capacity as Trustee as described below) a Delaware corporation
with its principal offices and place of business in Wilmington,
Delaware (the "Trustee").
R E C I T A L S:
WHEREAS, the Trustee serves as trustee under a Trust
Agreement dated February 28, 1927, which was established for the
benefit of certain descendants of the ▇▇▇▇▇▇▇▇ family (the
"▇▇▇▇▇▇▇▇ Trust"); and
WHEREAS, the ▇▇▇▇▇▇▇▇ Trust owns 3,087,500 shares of common
stock of McM Corporation, a publicly-traded, North Carolina
corporation operating as an insurance holding company under the
laws of North Carolina ("McM"); and
WHEREAS, the Trustee has been ordered by the Delaware
Chancery Court to sell its McM shares in order to diversify the
▇▇▇▇▇▇▇▇ Trust assets; and
WHEREAS, MAC desires to acquire all, but not less than all,
of the outstanding stock of McM through a merger on the terms and
conditions described herein; and
WHEREAS, the Trustee desires that the Trust shares be
converted into cash pursuant to a merger on the terms and
conditions described herein.
NOW, THEREFORE, the parties agree as follows:
1. Proposal of Merger. MAC and the Trustee will present
a proposed plan of merger (the "Plan") to the McM Board of
Directors pursuant to which McM and MAC will merge (the
"Merger"). The Plan will contain, among other terms and
conditions, the following:
a. Consideration. Each share of McM stock will be
exchanged for a cash payment of $6.20.
b. Payment. Shareholders will receive the entire amount
of cash due them at the time the merger is consummated.
c. Conditions Precedent to Merger Closing. Consummation
of the merger will be subject to, among other things,
satisfaction of the following conditions precedent:
(i) adoption of a Plan of Merger by the McM
Board of Directors pursuant to N.C.G.S. Section 55-
11-01(a);
(ii) approval of the Plan of Merger by the
McM shareholders pursuant to N.C.G.S. Section 55-
11-03(b)(2);
(iii) approval of the proposed merger by
the North Carolina Commissioner of Insurance
pursuant to N.C.G.S. Section 58-19-15;
(iv) expiration of the notice period after
filing by McM and MAC under the ▇▇▇▇-▇▇▇▇▇-
▇▇▇▇▇▇ Act, 15 USC Section 18A;
(v) execution of employment agreements
between McM and ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, and ▇▇▇▇▇ ▇▇▇▇,
having a term of employment with McM or its
corporate successor of at least three years
and being otherwise acceptable to MAC;
(vi) execution of employment agreements
between McM and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇▇ acceptable to MAC;
(vii) completion of due diligence
investigation with findings satisfactory to
MAC in its sole discretion;
(viii) completion of financing
arrangements and receipt of funds;
(ix) no material adverse change occurring in
the business of properties of McM;
(x) completion of all necessary governmental
filings and approvals, including but not
limited to filings with the United States
Securities and Exchange Commission; and
(xi) closing of the Merger by June 30, 1997
(unless waived by MAC).
2. Plan Adoption and Approval. The Trustee will use its
best efforts to have the Board of Directors adopt the Plan, to
obtain a favorable shareholder vote on the approval of the Plan
and to assist in satisfaction of any other conditions to the
consummation of the Merger. The Trustee also agrees that it will
vote its shares in a shareholder vote in favor of approval of the
Plan.
3. Third Party Negotiations. The Trustee agrees not to
solicit other offers for its McM stock and not to involve itself
in any discussions regarding the sale or transfer of its McM
shares with any party other than MAC. The obligation not to
solicit or consider offers from third parties or enter into
discussions with third parties shall be effective from the time
of execution of this Agreement until the earlier of the closing
of the Merger or June 30, 1997.
4. Termination Fee. Should the Trustee fail to fulfill
its obligations under this Agreement, the Trustee shall reimburse
expenses incurred by MAC or its affiliates in an amount not to
exceed $100,000 and shall pay MAC or its designee a cash amount
of $1,000,000.
5. The Trustee's Representations and Warranties. The
Trustee represents and warrants to MAC as follows:
(a) It is the owner, free and clear of any liens, claims
or encumbrances, of 3,087,500 shares of McM common stock and that
such shares comprise its entire beneficial and legal ownership of
McM.
(b) Except for approval of this Agreement by the Delaware
Chancery Court, the Trustee has full power and authority to
transfer its shares of McM stock and to otherwise fulfill its
duties and obligations set forth in this Agreement.
(c) To the best of its knowledge, all information provided
to MAC or its affiliates or representatives by the Trustee, the
agents and employees of the Trustee, and by the officers,
directors, employees and agents of McM Corporation are true,
correct and complete in every respect.
6. Survival of Representations. The parties have not
made any representation, warranty or covenant not set forth herein
and this Agreement constitutes the entire agreement between the
parties. All representations and warranties and agreements shall
survive the merger of McM into MAC.
7. Benefit. This Agreement shall inure to the benefit
of, and be binding upon, the Trustee and MAC and their respective
heirs, executors, administrators, successors and assigns.
8. Notice. Any notice, report or demand required or
permitted by any provision of this Agreement shall be deemed to
have been sufficiently given for all purposes if it is sent by
registered or certified mail, postage prepaid, addressed as
follows:
If to the Trustee:
Wilmington Trust Company
c/o ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Senior Trust Counsel
▇▇▇▇▇▇ Square North
▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
If to MAC:
McM Acquisition Corporation
c/o ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Hunton & ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
9. Termination. MAC may terminate this Agreement upon
delivery of written notice to the Trustee of occurrence of either
of the following events:
(a) failure of the McM Board of Directors to adopt the
Plan within 15 days after the execution of this Agreement; or
(b) the closing of the Merger not occurring by June 30,
1997.
10. Construction. This Agreement has been executed in
the State of North Carolina and shall be construed in accordance
with the laws of North Carolina.
11. Counterparts. This Agreement may be executed in two
or more counterparts, each of which shall be deemed an original,
but all of which shall constitute one and the same instrument.
12. Fees and Commissions. The Trustee has retained the
services of ▇▇▇▇▇ ▇▇▇▇▇▇ Incorporated to assist it in the
transactions herein contemplated. MAC has retained the services
of ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇▇▇, Inc. to assist it in the transactions
herein contemplated. The Trustee is solely liable for any fees
and commissions due ▇▇▇▇▇ ▇▇▇▇▇▇ Incorporated and MAC is solely
liable for any fees and commissions due ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇▇▇,
Inc. The Trustee and MAC agree to indemnify and hold each other
harmless from and against any loss, liability or damage,
including expenses, arising out of any claim for any commission,
fee or charge arising by reason of services alleged to have been
rendered at the request or with the knowledge of the indemnifying
party.
13. Actions Necessary to Complete Transaction. Each party
hereby agrees to execute and deliver all such other documents or
instruments and to take any action that may be reasonably
required in order to effectuate the transaction contemplated by
this Agreement.
14. Waiver. Any waiver by either party of any breach of
any term or condition of this Agreement shall not be deemed a
waiver of any other breach of such term or condition, nor shall
the failure of either party to enforce any provision constitute a
waiver of such provision or any other provision, nor shall such
action be deemed a waiver or release of any party for any claims
arising out of or connected with this Agreement.
IN WITNESS WHEREOF, the parties have duly executed this
Agreement on the date first above written.
▇▇▇▇▇▇▇▇ TRUST
Wilmington Trust Company as Trustee
By:
Title:
McM ACQUISITION CORPORATION
By: /s/ M. ▇▇▇▇▇▇ ▇▇▇▇▇
M. ▇▇▇▇▇▇ ▇▇▇▇▇, President
