SHAREHOLDERS AGREEMENT
THIS SHAREHOLDERS AGREEMENT, dated as of October 16, 1997 (the
"Agreement"), is made and entered into by Xxxxxx Acquisition, LLC, a Delaware
limited liability company ("Parent"), Xxxxxx Acquisition, Inc., a New York
corporation and a wholly-owned subsidiary of Parent ("Acquisition"), and the
parties listed on Schedule A (the "Xxxxxxxx Parties"), the parties listed on
Schedule B (the "Benach Parties"), the parties listed on Schedule C (the
"Aboodi Parties"), the party listed on Schedule D (the "Xxxxxxx Party") (each
party on Schedule A, B, C and D shall be referred to individually as a
"Shareholder" and collectively as the "Shareholders", and each of the Xxxxxxxx
Parties, as a group, the Benach Parties, as a group, the Aboodi Parties, as a
group, and the Xxxxxxx party shall be referred to as a "Group of Shareholders"
or Shareholder Group").
WITNESSETH:
WHEREAS, on October 16, 1997, Acquisition and Xxxxxxxx Corporation, a
New York corporation (the "Company"), entered into an Agreement and Plan of
Merger (as such agreement may hereafter be amended, restated or renewed from
time to time, the "Merger Agreement"), pursuant to which Acquisition will
commence a cash tender offer to purchase any and all outstanding shares of
common stock, par value $1.00 per share, of the Company (the "Company Common
Stock"), including all of the shares, and Acquisition will be merged with and
into the Company. Capitalized terms used and not defined herein shall have the
respective meanings ascribed to them in the Merger Agreement;
WHEREAS, set forth opposite each Shareholder's name on Schedule A, B,
C or D, as the case may be, is the number of shares of Common Stock owned by
such Shareholder; and
WHEREAS, the Shareholders are executing this Agreement as an
inducement to Parent and Acquisition to facilitate the Offer and the Merger and
the financing thereof.
NOW, THEREFORE, in consideration of the foregoing and the
representations, warranties, covenants and agreements contained herein, the
parties hereto, intending to be legally bound, hereby agree as follows:
1. DEFINITIONS. For purposes of this Agreement:
(a) "Beneficially Own" or "Beneficial Ownership" with respect to
any securities shall mean having "beneficial ownership" of such securities (as
determined pursuant to Rule 13d-3 under the Securities Exchange Act of 1934, as
amended (the "Exchange Act")), including pursuant to any agreement, arrangement
or understanding, whether or not in writing but excluding any shares deemed to
be beneficially owned by a Person as a result of the participation of such
Person in a "group" within the meanings of Section 13(d)(3) of the Exchange
Act.
(b) "Merger" shall mean the merger contemplated by the Merger
Agreement.
(c) "Offer" shall mean the cash tender offer contemplated by the
Merger Agreement for all of the outstanding shares of Company Common Stock.
(d) "Person" shall mean an individual, corporation, partnership,
joint venture, association, trust, unincorporated organization or other entity.
(e) "Termination Event " shall mean the first to occur of (i) the
termination of the Merger Agreement by any party thereto, or (ii) the
termination, withdrawal, abandonment or expiration of the Offer without the
shares of each Shareholder as set forth on Schedule A, B, C or D hereto being
accepted for purchase thereunder (an "Offer Termination Event").
2. THE ACQUISITION OFFER.
(a) Provided that Acquisition is not then in material breach of
the Merger Agreement and provided that there has not been issued an injunction
which would prohibit the Shareholders from tendering their respective shares,
the Xxxxxxxx Parties, the Benach Parties, the Aboodi Parties and the Xxxxxxx
Party hereby, severally and not jointly and severally, agree to validly tender
(and not to withdraw), pursuant to and in accordance with the terms of the
Offer, not later than the fifth business day after the receipt by the
respective Shareholders of the offer to purchase, transmittal letter and other
relevant Offer Documents, 2,169,063, 688,748, 387,360 and 72,040 shares,
respectively (the "Existing Shares" and, together with any shares of Company
Common Stock acquired by such Shareholder after the date hereof and prior to
the termination of the Agreement, whether upon exercise of options, warrants or
rights, the conversion or exchange of convertible or exchangeable securities,
or by means of purchase, dividend, distribution or otherwise, the "Shares"),
Beneficially Owned by the Shareholder. Each Shareholder hereby acknowledges and
agrees that Acquisition's obligation to accept for payment Shares purchased
pursuant to the Offer, including the Shares Beneficially Owned by such
Shareholder, is subject to the terms and conditions of the Offer.
(b) Each Shareholder hereby agrees to permit Acquisition to
publish and disclose in the Offer Documents and, if shareholder approval is
required under applicable law, the Proxy Statement, if any (including all
documents and schedules filed with the Commission), such Shareholder's identity
and ownership of Company Common Stock and the nature of such Shareholder's
commitments, arrangements and understandings under this Agreement.
3. TERMINATION. All obligations of the Shareholders under this
Agreement shall terminate upon a Termination Event.
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4. COVENANTS, REPRESENTATIONS AND WARRANTIES OF EACH SHAREHOLDER.
(a) Each Group of Shareholders hereby, severally and not jointly
and severally, represents and warrants, subject to the matters set forth on
Schedule E hereto, to Parent and Acquisition as follows:
(i) OWNERSHIP BY SHARES. Each Shareholder within such Group
of Shareholders is either (A) the record and Beneficial Owner of, or (B) the
Beneficial Owner but not the record holder of, the number of Shares set forth
opposite the Shareholder's name on Schedule A, B, C or D hereto, as the case
may be. As of October 16, 1997, the Shares set forth opposite such
Shareholder's name on Schedule A, B, C or D hereto constitute all of the Shares
owned of record or Beneficially Owned by such Shareholder. Such Shareholder has
sole power to issue instructions with respect to the matters set forth in
Section 2 hereof, sole power of disposition, sole power of conversion, sole
power to demand appraisal rights and sole power to agree to all of the matters
set forth in this Agreement, in each case with respect to all of the shares set
forth opposite such Shareholder's name on Schedule A, B, C or D hereto, as the
case may be, with no material limitations, qualifications or restrictions on
such rights, subject to applicable securities laws and the terms of this
Agreement.
(ii) POWER; BINDING AGREEMENT. Each Shareholder within such
Group of Shareholders has the legal capacity, power and authority to enter into
and perform all of such Shareholder's obligations under this Agreement. The
execution, delivery and performance of this Agreement by such Shareholder will
not violate any other agreement to which such Shareholder is a party,
including, without limitation, any voting agreement, stockholder's agreement or
voting trust. This Agreement has been duly and validly executed and delivered
by such Shareholder and constitutes a valid and binding agreement of such
Shareholder, enforceable against such Shareholder in accordance with its terms.
There is no beneficiary or holder of a voting trust certificate or other
interest of any trust of which such Shareholder is trustee whose consent is
required for the execution and delivery of this Agreement or the consummation
by such Shareholder of the transactions contemplated hereby. If such
Shareholder is married and such Shareholder's Shares constitute community
property, this Agreement has been duly authorized, executed and delivered by,
and constitutes a valid and binding agreement of, such Shareholder's spouse,
enforceable against such person in accordance with its terms.
(iii) NO CONFLICTS. Except for filings under the Exchange
Act or if applicable the HSR Act and any necessary approval of HUD (A) no
filing with, and no permit, authorization, consent or approval of, any state or
federal public body or authority is necessary for the execution of this
Agreement by each Shareholder within such Group of Shareholders and the
consummation by such Shareholder of the transactions contemplated hereby,
except where the failure to obtain such consent, permit, authorization,
approval or filing would not interfere with such Shareholder's ability to
perform its obligations hereunder, and (B) none of the execution and delivery
of this Agreement by such Shareholder, the consummation by such Shareholder of
the transactions contemplated hereby or compliance by such Shareholder with any
of the provisions hereof shall (1) conflict with or result in any breach of any
applicable organizational documents applicable to such Shareholder, (2) result
in a violation or breach of, or constitute (with or without notice or lapse of
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time or both) a default (or give rise to any third party right of termination,
cancellation, material modification or acceleration) under any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, license,
contract, commitment, arrangement, understanding, agreement or other instrument
or obligation of any kind to which such Shareholder is a party or by which such
Shareholder or any of such Shareholder's properties or assets may be bound, or
(3) violate any order, writ, injunction, decree, judgment, order, statute, rule
or regulation applicable to such Shareholder or any of such Shareholder's
properties or assets, in each such case except to the extent that any conflict,
breach, default or violation would not interfere with the ability of such
Shareholder to perform its obligations hereunder.
(iv) NO ENCUMBRANCES. Except as required by Sections 2 and
3, the Shares of each Shareholder within such Group of Shareholders and the
certificates representing such Shares are now, and at all times during the term
hereof will be, held by such Shareholder, or by a nominee or custodian for the
benefit of such Shareholder, free and clear of all liens, claims, security
interests, proxies, voting trusts or agreements, understandings or arrangements
or any other encumbrances whatsoever.
(v) NO FINDER'S FEES. Except pursuant to the engagement
letter with Xxxxxxx, Sachs & Co. dated October 16, 1997, no broker, investment
banker, financial adviser or other person is entitled to any broker's,
finder's, financial adviser's or other similar fee or commission in connection
with the transactions contemplated hereby based upon arrangements made by or on
behalf of any Shareholder in such Shareholder Group.
(vi) NO SOLICITATION. Each Shareholder in such Shareholder
Group shall, in its capacity as such, comply with the terms of Section 5.01 of
the Merger Agreement.
(vii) RESTRICTION ON TRANSFER, PROXIES AND NON-INTERFERENCE.
Prior to the occurrence of a Termination Event, except as required by this
Agreement, no Shareholder in such Shareholder Group shall directly or
indirectly without the consent of Acquisition: (A) offer for sale, sell,
transfer, tender, pledge, encumber, assign or otherwise dispose of, or enter
into any contract, option or other arrangement or understanding with respect to
the offer for sale, sale, transfer, tender, pledge, encumbrance, assignment or
other disposition of, any or all of such Shareholder's Shares, or any interest
therein, (B) grant any proxies or powers of attorney, deposit any shares into a
voting trust or enter into a voting agreement with respect to any Shares, or
(C) take any action that could reasonably be expected to have the effect of
preventing or disabling such Shareholder from performing such Shareholder's
obligations under this Agreement.
(viii) WAIVER OF APPRAISAL RIGHTS. Each Shareholder in such
Shareholder Group hereby waives any rights of appraisal or rights to dissent
from the Merger that the Shareholder may have.
(b) Parent and Acquisition hereby represents and warrants to each
of the Shareholders as follows:
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(i) ORGANIZATION, STANDING AND CORPORATE POWER. Parent is a
limited liability company duly organized, validly existing and in good standing
under the laws of the state of Delaware and Acquisition is a corporation duly
organized, validly existing and in good standing under the laws of the State of
New York, and each has adequate corporate power and authority to own its
properties and carry on its business as presently conducted. Each of Parent and
Acquisition has the corporate or limited liability company power and authority
to enter into and perform all of its obligations under this Agreement and to
consummate the transactions contemplated hereby.
(ii) NO CONFLICTS. Except, if applicable, for filings under
the Exchange Act and the HSR Act, (A) no filing with, and no permit,
authorization, consent or approval of, any state or federal public body or
authority is necessary for the execution of this Agreement by either Parent or
Acquisition and the consummation by Parent and Acquisition of the transactions
contemplated hereby, except where the failure to obtain such consent, permit,
authorization, approval or filing would not interfere with its ability to
perform its obligations hereunder, and (B) none of the execution and delivery
of this Agreement by Parent or Acquisition, the consummation by Parent or
Acquisition of the transactions contemplated hereby or compliance by Parent and
Acquisition with any of the provisions hereof shall (1) conflict with or result
in any breach of any applicable organizational documents applicable to Parent
or Acquisition, (2) result in a violation or breach of, or constitute (with or
without notice or lapse of time or both) a default (or give rise to any third
party right of termination, cancellation, material modification or
acceleration) under any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, license, contract, commitment, arrangement,
understanding, agreement or other instrument or obligation of any kind to which
Parent or Acquisition is a party or by which Parent or Acquisition or any of
Parent's or Acquisition's properties or assets may be bound, or (3) violate any
order, writ, injunction, decree, judgment, order, statute, rule or regulation
applicable to Parent or Acquisition or any of Parent's or Acquisition's
properties or assets, in each such case except to the extent that any conflict,
breach, default or violation would not interfere with the ability of Parent or
Acquisition to perform its obligations hereunder.
(iii) EXECUTION, DELIVERY AND PERFORMANCE BY PARENT AND
ACQUISITION. The execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
by the Board of Directors of Parent and Acquisition, and each of Parent and
Acquisition has taken all other actions required by law, its Certificate of
Incorporation and its Bylaws or other organizational documents in order to
consummate the transactions contemplated by this Agreement. This Agreement
constitutes the valid and binding obligations of Parent and Acquisition and is
enforceable in accordance with its terms, except as enforceability may be
subject to bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to or affecting creditors' rights generally.
5. STOP TRANSFER. Each Shareholder agrees with, and covenants to,
Acquisition that prior to a Termination Event such Shareholder shall not
request that the Company register the transfer (book-entry or otherwise) of any
certificate or uncertificated interest representing any of such Shareholder's
Shares, unless such transfer is made in compliance with this Agreement.
6. RECAPITALIZATION. In the event of a stock dividend or
distribution, or any change in the shares by reason of any stock dividend,
split-up, recapitalization, combination, exchange of shares
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or the like, the term "Shares" shall be deemed to refer to and include the
Shares as well as all such stock dividends and distributions and any shares
into which or for which any or all of the Shares may be changed or exchanged
and the Purchase Price shall be amended as may be appropriate to reflect such
event.
7. SHAREHOLDER CAPACITY. No person executing this Agreement who is
or becomes during the term hereof a director or officer of the Company makes
any agreement or understanding herein in his or her capacity as such director
or officer and nothing herein shall limit or affect any action taken by such
person in his or her capacity as a director or officer. Each Shareholder signs
solely in his or her capacity as the record and beneficial owner of, or the
trustee of a trust whose beneficiaries are the beneficial owners of, such
Shareholder's Shares.
8. SHAREHOLDERS' OBLIGATIONS. All obligations and liabilities of
each Shareholder under this Agreement shall be several and not joint and no
Shareholder shall have any liability for any obligations or liabilities under
this Agreement of any other Shareholder, except that all obligations specified
under this Agreement as an obligation of a Group of Shareholders or Shareholder
Group shall be joint and several obligations of the Sellers within such Group
of Shareholders.
9. FURTHER ASSURANCES. From time to time, at the other parties'
reasonable request and without further consideration, each Shareholder and
Acquisition and Parent shall execute and deliver such additional documents as
may be reasonably necessary or desirable to consummate and make effective, in
the most expeditious manner practicable, the tender of shares by any such
Shareholder contemplated by Section 2 of this Agreement.
10. MISCELLANEOUS.
(a) ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement between the parties with respect to the subject matter hereof and
supersedes all other prior agreements and understandings, both written and
oral, between the parties with respect to the subject matter hereof.
(b) CERTAIN EVENTS. Each Shareholder agrees that this Agreement
and the obligations hereunder shall attach to such Shareholder's Shares and
shall be binding upon any person or entity to which legal or beneficial
ownership of such Shares shall pass, whether by operation of law or otherwise,
including, without limitation, such Shareholder's heirs, guardians,
administrators or successors. Notwithstanding any transfer of Shares, the
transferor shall remain liable for the performance of all obligations under
this Agreement of the transferor.
(c) ASSIGNMENT. This Agreement shall not be assigned by operation
of law or otherwise without the prior written consent of the other parties.
(d) AMENDMENT, WAIVERS, ETC. This Agreement may not be amended,
changed, supplemented, waived or otherwise modified or terminated, except upon
the execution and delivery of a written agreement executed by the parties
hereto; provided, that after a Termination Event, this Agreement may be
amended, changed, supplemented, waived or otherwise modified or terminated
without the consent of, or the execution of any written agreement on the part
of, Parent and
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Acquisition, so long as such amendment, change, supplement, waiver or
modification does not increase the obligations of either Parent and Acquisition
hereunder.
(e) NOTICES. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly received if so given) by hand delivery, or by mail
(registered or certified mail, postage prepaid, return receipt requested) or by
any courier service, such as Federal Express, providing proof of delivery. All
communications hereunder shall be delivered to the respective parties at the
following addresses or the addresses set forth on the signature pages hereto:
If to Parent or Acquisition: Xxxxxx Acquisition, LLC
and
Xxxxxx Acquisition, Inc.
c/o Xxxxxxxx Xxxxx Company
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxxx Xxxxxxx
copies to: Squadron, Ellenoff, Plesent & Xxxxxxxxx, LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx Xxxx, Esq.
If to the Company: Xxxxxxxx Corporation
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxxxx
copies to: Proskauer Rose LLP
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx Xxxxxxx, Esq.
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If to Shareholder: At the addresses set forth on the
signature pages
copies to: Proskauer Rose LLP
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx Xxxxxxx, Esq.
and Xxxxx X. Xxxx, Esq.
Xxxxxxxxx Properties Corp.
1271 Avenue of the Americas
Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above.
(f) SEVERABILITY. Whenever possible, each provision or portion of
any provision of this Agreement will be interpreted in such manner as to be
effective and valid under applicable law but if any provision or portion of any
provision of this Agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable law or rule in any jurisdiction, such
invalidity, illegality or unenforceability will not affect any other provision
or portion of any provision in such jurisdiction, and this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision or portion of any provision had never been
contained herein.
(g) SPECIFIC PERFORMANCE. Each of the parties hereto recognizes
and acknowledges that a breach by it of any covenants or agreements contained
in this Agreement will cause the other party to sustain damages for which it
would not have an adequate remedy at law for money damages, and therefore each
of the parties hereto agrees that in the event of any such breach the aggrieved
party shall be entitled to the remedy of specific performance of such covenants
and agreements and injunctive and other equitable relief in addition to any
other remedy to which it may be entitled, at law or in equity.
(h) REMEDIES CUMULATIVE. All rights, powers and remedies provided
under this Agreement or otherwise available in respect hereof at law or in
equity shall be cumulative and not alternative, and the exercise of any thereof
by any party shall not preclude the simultaneous or later exercise of any other
such right, power or remedy by such party.
(i) NO WAIVER. The failure of any party hereto to exercise any
right, power or remedy provided under this Agreement or otherwise available in
respect hereof at law or in equity, or to insist upon compliance by any other
party hereto with its obligations hereunder, and any custom or practice of the
parties at variance with the terms hereof, shall not constitute a waiver by
such party of its right to exercise any such or other right, power or remedy or
to demand such compliance.
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(j) NO THIRD-PARTY BENEFICIARIES. This Agreement is not intended
to be for the benefit of, and shall not be enforceable by, any person or entity
who or which is not a party hereto; provided that, in the event of a
Shareholder's death, the benefits to be received by the Shareholder hereunder
shall inure to his successors and heirs.
(k) GOVERNING LAW. This Agreement shall be governed and construed
in accordance with the laws of the State of New York, without giving effect to
the principles of conflicts of law thereof.
(l) JURISDICTION. Each party hereby irrevocably submits to the
exclusive jurisdiction of the Supreme Court in the State of New York in any
action, suit or proceeding arising in connection with this Agreement, and
agrees that any such action, suit or proceeding shall be brought only in such
court (and waives any objection based on forum non conveniens or any other
objection to venue therein); provided, however, that such consent to
jurisdiction is solely for the purpose referred to in this paragraph (1) and
shall not be deemed to be a general submission to the jurisdiction of said
Court or in the State of New York other than for such purposes. Each party
hereto hereby waives any right to a trial by jury in connection with any such
action, suit or proceeding.
(m) DESCRIPTIVE HEADINGS. The descriptive headings used herein
are inserted for convenience of reference only and are not intended to be part
of or to affect the meaning or interpretation of this Agreement.
(n) COUNTERPARTS. This Agreement may be executed in counterparts,
each of which shall be deemed to be an original, but all of which, taken
together, shall constitute one and the same Agreement. This Agreement shall not
be effective as to any party hereto until such time as this Agreement or a
counterpart thereof has been executed and delivered by each party hereto.
(o) TRUST FUNDS. In the event that any party hereto should
receive any funds that are to be paid to another party pursuant to the terms of
this Agreement, then the receiving party shall hold such funds in trust for the
benefit of the party entitled to receive such funds and shall promptly pay such
funds to the party entitled to receive such funds in accordance with this
Agreement.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed on this 16th day of October, 1997.
ON BEHALF OF EACH OF THE
XXXXXXXX PARTIES
c/x Xxxxxxxx Properties Corp.
1271 Avenue of the Americas
Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxx, Esq.
By: /s/ Xxxx Xxxxxxxx
---------------------------
Xxxx Xxxxxxxx
By: /s/ Xxxxxxx Xxxxxxxx
---------------------------
Xxxxxxx Xxxxxxxx
ON BEHALF OF EACH OF THE
BENACH PARTIES
c/o Xxxxx Xxxxxx
0000 Xxxx Xxxxx Xxxxx
Xxxx Xxxxx Xxxxxxx, Xxxxxxx 00000
By: /s/ Xxxxx Xxxxxx
---------------------------
Xxxxx Xxxxxx
OEA PARTNERS
c/o Alpine Capital Group
1285 Avenue of the Xxxxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxx Xxxxxx
By: /s/ Xxxx Xxxxxx
---------------------------
Name: Xxxx Xxxxxx
----------------------
Title: General Partner
---------------------
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KADIMA PARTNERS
c/o Alpine Capital Group
1285 Avenue of the Xxxxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxx Xxxxxx
By: /s/ Xxxx Xxxxxx
---------------------------
Name: Xxxx Xxxxxx
----------------------
Title: General Partner
---------------------
/s/ Xxxx Xxxxxx
------------------------------
XXXX XXXXXX
Alpine Capital Group
1285 Avenue of the Xxxxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
/s/ Xxxxxx X. Xxxxxxx
------------------------------
XXXXXX X. XXXXXXX
000 Xxxxxxxxx Xxxx
Xxxxxxx Xxxxx, Xxx Xxxx 00000
XXXXXX ACQUISITION, LLC
By: /s/ Xxxxxxxx X. Xxxxxxx
---------------------------
Name: Xxxxxxxx X. Xxxxxxx
----------------------
Title: President
---------------------
XXXXXX ACQUISITION, INC.
By: /s/ Xxxxxxxx X. Xxxxxxx
---------------------------
Name: Xxxxxxxx X. Xxxxxxx
----------------------
Title: President
---------------------
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