VOTING AGREEMENT
THIS VOTING AGREEMENT (the "Agreement") dated as of March 26, 2003 is by
and between Career Education Corporation, a Delaware corporation (the
"Acquiror"), and the other parties signatory hereto (each a "Shareholder").
RECITALS
Acquiror, Xxxxxx Acquisition Corp., a Florida corporation and a
wholly-owned subsidiary of Acquiror ("Merger Sub"), and Xxxxxxx Education Group,
Inc., a Florida corporation (the "Company"), are concurrently herewith executing
an Agreement and Plan of Merger (as such agreement may be executed and amended
from time to time, the "Merger Agreement"; capitalized terms used but not
defined herein shall have the meanings set forth in the Merger Agreement),
pursuant to which (and subject to the terms and conditions specified therein)
the Company will be merged with and into Merger Sub (the "Merger"), whereby each
share of common stock, no par value, of the Company (the "Company Common Stock")
issued and outstanding immediately prior to the Effective Time will be converted
into the right to receive the Per Share Merger Consideration, other than shares
of Company Common Stock owned, directly or indirectly, by the Company, Acquiror,
Merger Sub or any Subsidiary of Acquiror or of the Company.
As a condition to Acquiror's entering into the Merger Agreement, Acquiror
requires that each Shareholder enter into, and each such Shareholder has agreed
to enter into, this Agreement with Acquiror.
AGREEMENT
To implement the foregoing and in consideration of the mutual agreements
contained herein, the parties hereby agree as follows:
1. REPRESENTATIONS AND WARRANTIES OF SHAREHOLDERS. Each Shareholder
hereby severally and not jointly represents and warrants to Acquiror
as follows:
(a) OWNERSHIP OF SHARES.
(i) Such Shareholder is either (a) the record holder or
beneficial owner, either alone or with such Shareholder's spouse, of
the number of or (b) trustee of a trust that is the record holder or
beneficial owner of, and whose beneficiaries are the beneficial owners
(such trustee, a "Trustee") of the number of shares of Company Common
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Stock as is set forth opposite such Shareholder's name on Schedule
1(a)(i) hereto (such shares shall constitute the "Existing Shares",
and together with any shares of Company Common Stock acquired of
record or beneficially by such Shareholder in any capacity after the
date hereof and prior to the termination hereof, whether upon exercise
of options, conversion of convertible securities, purchase, exchange
or otherwise, other than any shares of Parent Common Stock received by
such Shareholder in the Merger, shall constitute the "Shares").
(ii) On the date hereof, the Existing Shares set forth opposite
such Shareholder's name on Schedule 1(a)(i) hereto constitute all of
the outstanding shares of Company Common Stock owned of record or
beneficially by such Shareholder. Such Shareholder does not have
record or beneficial ownership of any Shares not set forth on Schedule
1(a)(i) hereto.
(iii) Except as set forth on Schedule 1(a)(iii) hereto, such
Shareholder has sole power of disposition with respect to all of the
Existing Shares set forth opposite such Shareholder's name on Schedule
1(a)(i), with no restrictions on such rights, subject to applicable
securities Laws and the terms of this Agreement.
(b) POWER; BINDING AGREEMENT.
Such Shareholder 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 or by which
such Shareholder is bound including, without limitation, any trust agreement,
voting agreement, shareholders agreement, voting trust, partnership or other
agreement. This Agreement has been duly and validly executed and delivered by
such Shareholder and, assuming this Agreement has been duly and validly executed
and delivered by or on behalf of the respective other party thereto, which party
has the power to enter into and perform its obligations, this Agreement
constitutes a valid and binding agreement of such Shareholder, enforceable
against such Shareholder in accordance with its terms, except as the enforcement
thereof may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar Laws generally affecting the rights of creditors and
subject to general equity principles. There is no beneficiary of or holder of
interest in any trust of which a Shareholder is Trustee whose consent is
required for the execution and delivery of this Agreement or the consummation 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 assuming this Agreement has been duly
and validly executed and delivered by or on behalf of the respective other party
thereto, which party has the power to enter into and perform its obligations,
this Agreement constitutes a valid and binding agreement of, such Shareholder's
spouse, enforceable against such person in accordance with its terms, except as
the enforcement thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar Laws generally affecting the rights of
creditors and subject to general equity principles.
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(c) NO CONFLICTS. Except for filings under the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), if applicable, and the
expiration or termination of any applicable waiting period thereunder, and for
filings under the Securities Exchange Act of 1934, (A) to such Shareholder's
knowledge, 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 such Shareholder and the consummation by such Shareholder of
the transactions contemplated hereby and (B) neither the execution and delivery
of this Agreement by such Shareholder nor the consummation by such Shareholder
of the transactions contemplated hereby nor compliance by such Shareholder with
any of the provisions hereof shall (x) conflict with or result in any breach of
any applicable trust, partnership agreement or other agreements or
organizational documents applicable to such Shareholder, (y) 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 such Shareholder is a party or by which such
Shareholder or any of such Shareholder's properties or assets may be bound or
(z) to the knowledge of such Shareholder violate any order, writ, injunction,
decree, judgment, statute, rule or regulation applicable to such Shareholder or
any of such Shareholder's properties or assets.
(d) LIENS. Such Shareholder's Shares 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, except for inchoate tax liens for taxes not yet due.
(e) BROKERS. With the exception of the fee payable to the Financial Advisor
as set forth in the Merger Agreement, 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 such
Shareholder in his or her capacity as such.
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(f) ACKNOWLEDGMENT. Such Shareholder understands and acknowledges that
Acquiror is entering into the Merger Agreement in reliance upon such
Shareholder's execution and delivery of this Agreement with Acquiror.
2. CERTAIN COVENANTS OF SHAREHOLDERS. Except in accordance with the terms
of this Agreement, each Shareholder hereby severally covenants and agrees as
follows:
(a) NO SOLICITATION. Such Shareholder understands and acknowledges the
Company's obligations described under Section 6.13 of the Merger Agreement.
(b) RESTRICTION ON TRANSFER, PROXIES AND NONINTERFERENCE; RESTRICTION ON
WITHDRAWAL. Prior to the earlier of the termination of the Merger Agreement in
accordance with its terms and the Effective Time, no Shareholder shall, directly
or indirectly: (i) except pursuant to the terms of the Merger Agreement, offer
for sale, sell, transfer, tender, pledge, encumber, assign or otherwise dispose
of, enforce or permit the execution of the provisions of any redemption
agreement with the Company or enter into any contract, option or other
arrangement or understanding with respect to or consent to the offer for sale,
sale, transfer, tender, pledge, encumbrance, assignment or other disposition of,
or exercise any discretionary powers to distribute, any or all of such
Shareholder's Shares or any interest therein, including any trust income or
principal, except in each case to a Permitted Transferee (as hereinafter
defined) who is or agrees in a writing executed by the Acquiror to become bound
by this Agreement; (ii) grant any proxies or powers of attorney with respect to
any Shares, deposit any Shares into a voting trust or enter into a voting
agreement with respect to any Shares; or (iii) take any action that would make
any representation or warranty of such Shareholder contained herein untrue or
incorrect or that could reasonably be expected to have the effect of preventing
or disabling such Shareholder from performing such Shareholder's obligations
under this Agreement in any material respect. For purposes of the Agreement,
"Permitted Transferees" means, with respect to a Shareholder, any of the
following persons: (a) the spouse of such Shareholder, provided that at all
relevant times of determination such Shareholder is not legally separated or
divorced from, or is not involved in legal separation or divorce proceedings
with, such spouse; (b) the issue of such Shareholder; (c) a trust of which there
are no principal beneficiaries other than (i) such Shareholder, (ii) such
Shareholder's spouse (provided that at all relevant times of determination such
Shareholder is not separated or divorced from, or is not involved in separation
or divorce proceedings with, such spouse), (iii) the issue of such Shareholder,
or (iv) an organization qualified under Section 501(c)(3) of the Internal
Revenue Code of 1986; (d) the legal representative of such Shareholder in the
event such Shareholder becomes mentally incompetent; and (e) the beneficiaries
under (i) the will of such Shareholder or the will of such Shareholder's spouse
(or the intestate beneficiaries of such Shareholder or such Shareholder's
spouse) or (ii) a trust described in clause (c) above.
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(c) NO TERMINATION OR CLOSURE OF TRUSTS. Unless, in connection therewith,
the Shares held by any trust which are presently subject to the terms of this
Agreement are transferred upon termination to one or more Shareholders and
remain subject in all respects to the terms of this Agreement, or other
Permitted Transferees who upon receipt of such Shares become signatories to this
Agreement, the Shareholders who are Trustees shall not take any action to
terminate, close or liquidate any such trust and shall take all steps necessary
to maintain the existence thereof at least until the first to occur of the
termination of the Merger Agreement in accordance with its terms and the
Effective Time.
(d) VOTING OF COMPANY STOCK. Each Shareholder hereby agrees that, prior to
the first to occur of the termination of the Merger Agreement in accordance with
its terms and the Effective Time, at any meeting (whether annual or special and
whether or not an adjourned or postponed meeting) of the holders of Company
Common Stock, however called, or in connection with any written consent of the
holders of the Company Common Stock, he will appear at the meeting or otherwise
cause the Shares to be counted as present thereat for purposes of establishing a
quorum and vote or consent (or cause to be voted or consented) the Shares over
which such Shareholder holds the power, directly or indirectly, to direct the
vote, except as otherwise agreed to in writing in advance by the Acquiror in its
sole discretion, in favor of any business combination proposed by Acquiror
(including, without limitation, voting in favor of (1) the adoption of the
Merger Agreement and the approval of the Merger and (2) any other matter
necessary to the consummation of the transactions contemplated by the Merger
Agreement) and against the following actions: (a) any Acquisition Proposal (as
defined in the Merger Agreement) or (b) any other action which is intended, or
could reasonably be expected, to impede, interfere with, delay, postpone or
adversely affect the transactions contemplated by this Agreement or the Merger
Agreement. Each Shareholder agrees that he will not enter into any agreement or
understanding with any Person the intended or anticipated effect of which would
be inconsistent with or violative of any provision contained in this Section
2(d). Notwithstanding anything in this Agreement to the contrary, no Shareholder
shall be required to acquire any Shares that such Shareholder has, directly or
indirectly, the right to acquire, including, without limitation, by exercise of
stock options or otherwise.
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(e) GRANT OF PROXY; APPOINTMENT OF PROXY. Each Shareholder hereby revokes
any and all previous proxies granted with respect to the Shares. From the date
hereof until the first to occur of the termination of the Merger Agreement in
accordance with its terms and the Effective Time, subject to and effective
conditioned upon the receipt of all regulatory or accrediting approvals
required, if any, each Shareholder hereby irrevocably grants to, and appoints,
Acquiror, or any nominee of Acquiror, such Shareholder's proxy and
attorney-in-fact (with full power of substitution), for and in the name, place
and stead of such Shareholder, to (1) exercise any rights as a shareholder of
the Company, including but not limited to those in connection with calling a
special meeting and all matters ancillary thereto of shareholders to vote on the
Merger or (2) vote the Existing Shares at every annual, special, or adjourned
meeting or grant a consent or approval in respect of the Shares over which such
Shareholder holds, directly or indirectly, the power to direct the vote in favor
of any business combination proposed by Acquiror (including, without limitation,
voting in favor of (1) the adoption of the Merger Agreement and the approval of
the Merger and (2) any other matter necessary to the consummation of the
transactions contemplated by the Merger Agreement) and against the following
actions (a) any Acquisition Proposal (as defined in the Merger Agreement) or (b)
any other action which is intended, or could be expected, to impede, interfere
with, delay, postpone or adversely affect the transactions contemplated by this
Agreement or the Merger Agreement. Each Shareholder shall have no claim against
such proxy and attorney-in-fact, for any action taken, decision made or
instruction given by such proxy and attorney-in-fact on accordance with this
Agreement or the Merger Agreement. Such proxy is irrevocable and the appointment
is coupled with an interest in the Shares.
3. FURTHER ASSURANCES. From time to time, at the other party's request and
without further consideration, each party hereto shall execute and deliver such
additional documents and take all such further action as may be necessary or
desirable to consummate and make effective, in the most expeditious manner
practicable, the transactions contemplated by this Agreement.
4. 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 or
as a result of any divorce.
5. STOP TRANSFER. Each Shareholder agrees with, and covenants to, Acquiror
that 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.
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6. TERMINATION. The obligations set forth in this Agreement will terminate
upon the first to occur of the termination of the Merger Agreement in accordance
with its terms and the Effective Time.
7. MISCELLANEOUS.
(a) ENTIRE AGREEMENT; ASSIGNMENT. This Agreement and the schedules
hereto (i) constitute 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 and (ii) shall not be assigned by operation of
law or otherwise without the prior written consent of the other party.
(b) AMENDMENTS. This Agreement may not be modified, amended, altered
or supplemented, except upon the execution and delivery of a written
agreement executed by the parties hereto.
(c) NOTICES. All notices and other communications hereunder shall be
in writing and shall be deemed to have been duly given; as of the date of
delivery, if delivered personally; upon receipt of confirmation, if
telecopied, or upon the next business day when delivered during normal
business hours to an overnight courier service, such as Federal Express, in
each case to the parties at the following addresses or at such other
addresses as shall be specified by the parties by like notice; unless the
sending party has knowledge that such notice or other communication
hereunder was not received by the intended recipient:
If to Xxxxxxx Xxxxx, M.D., the Frost-Nevada Investments Trust, Xxxxxxx
X. Xxxxxxxxx Xx. or Xxxxxxxx X. Xxxxxxxxx, to:
c/o Xxxxxxx X. Xxxxxxxxx, Xx.
Xxxxxxx Education Group, Inc.
0000 Xxxxxxxx Xxxx., 0xx Xxxxx
Xxxxx, XX 00000
Fax: 305/000-0000
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with a copy to:
Xxxxxxx Xxxxxx Xxxxxx
Xxxxxxxx Xxxxxxxx & Xxxxxxxxx, P.A.
000 Xxxx Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxx, Xxxxxxx 00000
Attn: Xxxxxxxx XxxXxxxxx, Esq.
Fax: 305/000-0000
If to Acquiror, to:
Career Education Corporation
0000 Xxxxxxxxxxx Xxxxxxx
Xxxxxxx Xxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxx
Fax: 847/000-0000
with a copy to:
Xxxxxx Xxxxxx Xxxxx Xxxxxxxx
000 Xxxx Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000-0000
Attn: Xxxxxxxx X. Xxxxx and
Xxxxxxx X. Xxxxx
Fax: 312/000-0000
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.
(d) GOVERNING LAW. The validity, interpretation and effect of this
Agreement shall be governed exclusively by the laws of the State of
Florida, without giving effect to the principles of conflict of laws
thereof.
(e) COSTS. The parties will each be solely responsible for and bear
all of its own respective expenses, including, without limitation, expenses
of legal counsel, accountants, and other advisors, incurred at any time in
connection with pursuing or consummating the Agreement and the transactions
contemplated thereby.
(f) ENFORCEMENT. The parties agree that irreparable damage would occur
in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that the parties shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions of this Agreement.
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(g) COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but both of
which shall constitute one and the same Agreement.
(h) 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.
(i) SEVERABILITY. If any term or provision of this Agreement or the
application thereof to any party or set of circumstances shall, in any
jurisdiction and to any extent, be finally held invalid or unenforceable,
such term or provision shall only be ineffective as to such jurisdiction,
and only to the extent of such invalidity or unenforceability, without
invalidating or rendering unenforceable any other terms or provisions of
this Agreement under any other circumstances, and the parties shall
negotiate in good faith a substitute provision which comes as close as
possible to the invalidated or unenforceable term or provision, and which
puts each party in a position as nearly comparable as possible to the
position it would have been in but for the finding of invalidity or
unenforceability, while remaining valid and enforceable.
(j) DEFINITIONS. For purposes of this Agreement:
(i) "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 Exchange
Act), including pursuant to any agreement, arrangement or
understanding, whether or not in writing. Without duplicative counting
of the same securities by the same holder, securities Beneficially
Owned by a Person shall include securities Beneficially Owned by all
other Persons with whom such Person would constitute a "group" as
described in Section 13(d)(3) of the Exchange Act.
(ii) "Person" shall mean an individual, corporation, partnership,
joint venture, association, trust, unincorporated organization or
other entity.
(iii) In the event of a stock dividend or distribution, or any
change in the Company Common Stock by reason of any stock dividend,
split-up, recapitalization, combination, exchange of shares 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. Notwithstanding anything herein to the contrary, the
term "Shares" shall not include any shares of Parent Common Stock
received by any Shareholder in the Merger, all of which shall be free
from restriction hereunder.
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(k) SHAREHOLDER CAPACITY. Notwithstanding anything herein to the
contrary, no person executing this Agreement who is, or becomes during the
term hereof, a director of the Company makes any agreement or understanding
herein in his or her capacity as such director, and the agreements set
forth herein shall in no way restrict any director in the exercise of his
or her fiduciary duties as a director of the Company. Each Shareholder has
executed this Agreement solely in his or her capacity as the record or
beneficial holder of such Shareholder's Shares or as the trustee of a trust
whose beneficiaries are the beneficial owners of such Shareholder's Shares.
(l) NO STRICT CONSTRUCTION. The language used in this Agreement will
be deemed to be the language chosen by the parties hereto to express their
mutual intent, and no rule of strict construction will be applied against
any party hereto.
[signature page follows]
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IN WITNESS WHEREOF, Acquiror and each Shareholder have caused this
Agreement to be duly executed as of the day and year first above written.
CAREER EDUCATION CORPORATION
/s/ Xxxxxxx Xxxxx
------------------------------------
Xxxxxxx Xxxxx
Executive Vice President, Chief
Financial Officer, Secretary and
Treasurer
SHAREHOLDERS:
/s/ Xxxxxxx Xxxxx, M.D.
------------------------------------
Xxxxxxx Xxxxx, M.D.
Frost-Nevada Investments Trust
/s/ Xxxxxxx Xxxxx, M.D.
------------------------------------
Xxxxxxx Xxxxx, M.D.,
its sole trustee
/s/ Xxxxxxx X. Xxxxxxxxx, Xx.
------------------------------------
Xxxxxxx X. Xxxxxxxxx, Xx.
/s/ Xxxxxxxx X. Xxxxxxxxx
------------------------------------
Xxxxxxxx X. Xxxxxxxxx
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SCHEDULE 1(a)(i)
Record Holder Number of Shares of Company Common Stock
--------------- -----------------------------------------
Xxxxxx Xxxxx, M.D. 412,500(1)
Frost-Nevada Investments Trust 3,971,028
Xxxxxxx X. Xxxxxxxxx, Xx. 623,049(2)
Xxxxxxxx X. Xxxxxxxxx 223,404(3)
(1) Includes options to acquire 402,500 shares of Company Common Stock.
(2) Includes 5,319 shares held in the 401(k) Plan and options to acquire 435,000
shares of Company Common Stock.
(3) Includes 4,904 shares held in the 401(k) Plan and options to acquire 197,500
shares of Company Common Stock.
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SCHEDULE 1(a)(iii)
None.
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