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CONFIDENTIALITY AGREEMENT
Confidential
April 15, 1998
Mr. Xxxxx Xxxxxxx
IAT Reinsurance Syndicate Ltd.
000 Xxxxxxxx
Xxx Xxxx, XX 00000
Dear Xx. Xxxxxxx:
In order to allow you to evaluate the possible acquisition (the "Proposed
Acquisition") of McM Corporation (the "Company"), we will deliver to you, upon
your execution and delivery to us of this letter agreement, certain information
about the properties and operations of the Company. All information about the
Company furnished by us or our affiliates, or our respective directors,
officers, employees, agents or controlling persons (such affiliates and other
persons collectively referred to herein as "Representatives"), whether furnished
before or after the date hereof, and regardless of the manner in which it is
furnished, is referred to in this letter agreement as "Proprietary Information."
Proprietary Information does not include, however, information which (a) is or
becomes generally available to the public other than as a result of a disclosure
by you or your Representatives, (b) was available to you on a non-confidential
basis prior to its disclosure by us or (c) becomes available to you on a
non-confidential basis from a person other than us or our Representatives who is
not otherwise bound by a confidentiality agreement with us or our
Representatives, or is not otherwise prohibited from transmitting the
information to you. As used in this letter, the term "person" shall be broadly
interpreted to include, without limitation, any corporation, company,
partnership and individual.
Unless otherwise agreed to in writing by us, you agree (a), except as required
by law, to keep all Proprietary Information confidential and not to disclose or
reveal any Proprietary Information to any person other than those employed by
you or on your behalf who are actively and directly participating in the
evaluation of the Proposed Acquisition or who otherwise need to know the
Proprietary Information for the purpose of evaluating the Proposed Acquisition
and to cause those persons to observe the terms of the agreement and (b) not to
use Proprietary Information for any purpose other than in connection with the
consummation of the Proposed Acquisition in a manner which we have approved. You
will be responsible for any breach of the terms hereunder by you or the persons
or entities referred to in subparagraph (a) of this paragraph. In the event that
you are requested pursuant to, or required by, applicable law or regulation or
by legal process to disclose any Proprietary Information, you agree that you
will provide us with prompt notice of such request(s) to enable us to seek an
appropriate protective order or other appropriate remedy, or, if appropriate,
waive compliance with the terms of this letter agreement, and you shall
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reasonably cooperate with the Company to obtain such protective order or other
remedy. In the event that such protective order or other remedy is not obtained,
or that the Company waives compliance with the provisions hereof, you or such
Representative, as the case may be, may disclose to any tribunal only that
portion of the Proprietary Information which you are advised by opinion of
counsel is legally required to be disclosed.
You hereby acknowledge that you are aware, and that you will advise each of your
Representatives who are informed as to the matters which are the subject of this
letter, that the United States securities laws prohibit any person who has
received from an issuer material, non-public information concerning the matters
which are the subject of this letter from purchasing or selling securities of
such issuer or from communicating such information to any other person under
circumstances in which it is reasonably foreseeable that such person is likely
to purchase or sell such securities.
Unless otherwise required by law, neither party nor any of such party's
Representatives will, without our prior written consent, disclose to any person
(other than those actively and directly participating in the Proposed
Acquisition) any information about the Proposed Acquisition, or the terms,
conditions or other facts relating thereto, including the fact that discussions
are taking place with respect thereto or the status thereof, or the fact that
the Proprietary Information has been made available to you.
In consideration of our furnishing you with Proprietary Information, you also
agree that for a period of one year from the date of this letter agreement,
neither you nor any of your Representatives will, without the prior written
consent of the Company or its Board of Directors:
(a) acquire, offer to acquire, or agree to acquire, directly or
indirectly, by purchase or otherwise, any voting securities or
direct or indirect rights to acquire any voting securities of
the Company or any subsidiary thereof, or of any successor to
or person in control of the Company, or any assets of the
Company or any subsidiary or division thereof or of any such
successor or controlling person;
(b) make, or in any way participate, directly or indirectly, in
any "solicitation" or "proxies" to vote (as such terms are
used in the rules of the Securities and Exchange Commission),
or seek to advise or influence any person or entity with
respect to the voting of any voting securities of the Company;
(c) make any public announcement with respect to, or submit a
proposal for, or offer of (with or without conditions) any
extraordinary transaction involving the Company or its
securities or assets;
(d) seek or propose to influence or control the Company's
management or policies (or request permission to do so);
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(e) solicit, encourage or induce any person employed by the
Company to leave the Company's employ, without the Company's
prior written consent; or
(f) form, join or in any way participate in a "group" as defined
in Section 13(d)(3) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), in connection with any of the
foregoing.
You also agree that the Company will be entitled to equitable relief, including
injunction, in the event of any breach of the provisions of this paragraph.
If you determine that you do not wish to proceed with the Proposed Acquisition,
you will promptly advise us of that decision. In that case, or in the event that
the Proposed Acquisition is not consummated by you, you will, upon our request,
promptly deliver to us all of the Proprietary Information, including all copies,
reproductions, summaries, analyses or extracts thereof or based thereon in your
possession or in the possession of any of your Representatives.
Although the Proprietary Information contains information which we believe to be
relevant for the purpose of your evaluation of the Proposed Acquisition, we do
not make any representation or warranty as to the accuracy or completeness of
the Proprietary Information. Neither we, our affiliates, nor any of our
respective officers, directors, employees, agents or controlling persons within
the meaning of Section 20 of the Exchange Act shall have any liability to you or
any of your Representatives relating to or arising from the use of the
Proprietary Information.
Without prejudice to the rights and remedies otherwise available to us, you
agree that money damages would not be a sufficient remedy for any breach of this
letter agreement and, accordingly, we shall be entitled to equitable relief by
way of injunction if you or any of your Representatives breach or threaten to
breach any of the provisions of this letter agreement.
It is further understood and agreed that no failure or delay by us in exercising
any right, power or privilege hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any right, power or privilege hereunder.
This letter agreement will be construed and enforced in accordance with the laws
of the State of North Carolina applicable to agreements made and to be performed
entirely in such State.
Please confirm your agreement with the foregoing by signing and returning the
enclosed duplicate copy of this letter to PaineWebber Incorporated, 0000 Xxxxxx
xx xxx Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxxxx X.
Xxxxxx. Should you have any questions concerning this letter, please contact Xx.
Xxxxxx at (000) 000-0000.
Very truly yours,
McM CORPORATION
By /s/ Xxxxxx X. Xxxx
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Xxxxxx X. Xxxx
Chairman and Chief Executive Officer
Accepted and Agreed to as of the date first written above:
IAT REINSURANCE SYNDICATE LIMITED
By: /s/ Xxxxx X. Xxxxxxx
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Xxxxx Xxxxxxx
