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EXHIBIT 99.1
VOTING AGREEMENT
THIS VOTING AGREEMENT (the "AGREEMENT") dated as of October 24, 2000 is
by and between Career Education Corporation, a Delaware corporation (the
"ACQUIROR"), and the other parties signatory hereto (each a "Shareholder").
RECITALS
Acquiror, EI Acquisition, Inc., a Delaware limited liability company
and a direct wholly-owned subsidiary of Acquiror ("ACQUISITION SUB"), and
EduTrek International, Inc., a Georgia corporation (the "Company"), are
negotiating 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), a draft of which has been circulated to the parties, pursuant to
which (and subject to the terms and conditions specified therein) the
Acquisition Sub will be merged with and into the Company (the "MERGER"), whereby
each share of class A common stock, no par value, of the Company and each share
of class B common stock, no par value, of the Company (collectively, the
"COMPANY COMMON STOCK") issued and outstanding immediately prior to the
Effective Time will be converted into the right to receive the Merger
Consideration, other than (i) shares of Company Common Stock owned, directly or
indirectly, by the Company or any subsidiary of the Company or by Acquiror and
(ii) Dissenting Shares.
As a condition to Acquiror's negotiating and 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 shares of
Company Common Stock as is set forth opposite such Shareholder's name
on Schedule 1(a) 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, shall constitute the "SHARES").
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(i) On the date hereof, the Existing Shares set
forth opposite such Shareholder's name on Schedule 1(a) 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) hereto.
(ii) 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) and
sole power to demand dissenter's or appraisal rights, in each
case with respect to all of the Existing Shares set forth
opposite such Shareholder's name on Schedule 1(a), with no
restrictions on such rights, subject to applicable federal
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 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 and by any implied covenant of good faith and fair dealing.
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 constitutes a
valid and binding agreement of, such Shareholder's spouse, enforceable
against such person in accordance with its terms.
(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, (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 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)
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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) 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 any such encumbrances or proxies arising hereunder or listed
on Schedule 1(d).
(e) BROKERS. 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.
(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. Prior to the termination of the
Merger Agreement in accordance with its terms, no Shareholder shall, in
its capacity as such, directly or indirectly (including through
advisors, agents or other intermediaries), solicit (including by way of
furnishing information) or respond to any inquiries or the making of
any proposal by any person or entity (other than Acquiror, Acquisition
Sub or any affiliate thereof) with respect to the Company that
constitutes or could be expected to lead to an Acquisition Proposal (as
defined in the Merger Agreement). If any Shareholder in its capacity as
such receives any such inquiry or proposal, then such Shareholder shall
promptly inform Acquiror in writing of the terms and conditions, if
any, of such inquiry or proposal and the identity of the person making
it. Each Shareholder, in its capacity as such, will immediately cease
and cause to be terminated any existing activities, discussions or
negotiations with any parties conducted heretofore with respect to any
of the foregoing.
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(b) RESTRICTION ON TRANSFER, PROXIES AND NONINTERFERENCE;
RESTRICTION ON WITHDRAWAL. Prior to the termination of the Merger
Agreement in accordance with its terms, no Shareholder shall, directly
or indirectly: (i) except pursuant to the terms of the Merger Agreement
and to Acquiror pursuant to this 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 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
have the effect of preventing or disabling such Shareholder from
performing such Shareholder's obligations under this Agreement. 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 separated or divorced from, or is not involved in
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), or (iii) the
issue of such Shareholder; (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 (ii) a trust described in clause
(c) above.
(c) WAIVER OF APPRAISAL AND DISSENTER'S RIGHTS. Each
Shareholder hereby waives any rights of appraisal or rights to dissent
from the Merger that such Shareholder may have. Each Trustee represents
that no beneficiary who is a beneficial owner of Shares under any trust
has any right of appraisal or right to dissent from the Merger which
has not been so waived.
(d) 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 termination of the
Merger Agreement in accordance with its terms.
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(e) VOTING OF COMPANY STOCK. Each Shareholder hereby
agrees that, prior to the termination of the Merger Agreement in
accordance with its terms, 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, except as otherwise agreed
to in writing in advance by the Acquiror in its sole discretion, in
favor of any business combination with Acquiror 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
materially 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 reasonably anticipated effect of which would be
inconsistent with or violative of any provision contained in this
SECTION 3(E).
(f) GRANT OF PROXY; APPOINTMENT OF PROXY. Each
Shareholder hereby revokes any and all previous proxies granted with
respect to the Shares. Prior to the termination of the Merger Agreement
in accordance with its terms, 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 there to 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 in favor of any business combination proposed by
Acquiror, 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 materially 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.
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3. GENERAL RELEASE.
(a) In consideration of the Acquiror's consummation of
the Merger in accordance with the terms and conditions of the Merger
Agreement, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Shareholder, for
himself, herself or itself and each of his, her or its heirs,
executors, successors, and assigns (collectively, the "RELEASORS"),
hereby forever releases the Buyer, Acquisition Sub, the Company and
each of their respective predecessors, successors, and past and present
shareholders or unitholders, directors, officers, employees, agents,
and representatives (collectively, the "GENERAL RELEASED PARTIES") from
any and all claims, demands and causes of action of every kind and
nature whether arising from his, her or its purchase of stock of the
Company (pursuant to that certain Subscription Agreement, dated as of
September 8, 2000, or otherwise) his or her employment by the Company
or otherwise (including, without limitation, claims for damages, costs,
expenses and attorneys', brokers' and accountants' fees and expenses),
whether known or unknown, suspected or unsuspected, that the Releasors
now have or at any time prior to the date of this General Release may
have had or could have asserted against any of the General Released
Parties (collectively, the "GENERAL RELEASED CLAIMS"). Notwithstanding
anything to the contrary in this General Release, Releasors are not
releasing any of their rights under this Agreement, the Merger
Agreement or any agreement executed in connection with the Merger
Agreement or any of their rights to indemnification from the Company
that exist as of the date hereof with respect to their actions as
officers or directors of the Company.
(b) The Releasors hereby irrevocably agree to refrain
from directly or indirectly asserting any claim or demand or commencing
(or causing to be commenced) any suit, action, or proceeding of any
kind, in any court or before any tribunal, against any General Released
Party based upon any General Released Claim.
(c) The Shareholder has read and understands this General
Release, has had the opportunity to consult with an attorney prior to
signing it, and voluntarily enters into it with full knowledge of its
terms and conditions and that such terms and conditions are binding on
him, her or its.
(d) This Section 3 will be effective upon the effective
time of the Merger in the Merger Agreement.
4. RESIGNATION. Each Shareholder hereby resigns, effective upon
the effective time of the Merger, from all such Shareholder's positions with the
Company including, without limitation, positions on the board of Directors of
the Company and the Governing Board of the Company and all positions as an
officer or employee of the Company.
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5. 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 to consummate and make effective the transactions contemplated by this
Agreement.
6. 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.
7. 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.
8. TERMINATION. The obligations set forth in this Agreement,
other than those set forth in Sections 2, 3, 8 and 9, will terminate upon
termination of the Merger Agreement in accordance with its terms. The
obligations set forth in Section 2 will terminate on the earlier of (i)
termination of the Merger Agreement pursuant to Section 8.1(d) therefore and
(ii) May 21, 2001.
9. MISCELLANEOUS.
(a) ENTIRE AGREEMENT; ASSIGNMENT. This Agreement,
together with the Merger Agreement (and the Exhibits and Schedule
thereto) (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;
provided that Schedule 1(a) may be supplemented by Acquiror by adding
the name and other relevant information concerning any Shareholder of
the Company who is or agrees to be bound by the terms of this Agreement
without the agreement of any other party hereto, and thereafter such
added Shareholder shall be treated as a "SHAREHOLDER" for all purposes
of this Agreement.
(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
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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 Xxxxx Xxxxxx, Xxxxxx Family Limited Partnership
or The Xxxxxx Family Foundation, Inc., to:
00 Xxxxxxxxxx Xxxxxx, #0000
Xxxxxxx, Xxxxxxx 00000
with a copy to:
Xxxxx, Xxxxxxxx & Xxxxxxx, XXX
Xxxxxxxxx XX, Xxxxx 0000
0000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000-0000
Attn: A. Xxx Xxxxxxxx, Esq.
Fax: (000) 000-0000
If to Xxxxx Xxxxxx, to :
000 Xxxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000
with a copy to:
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If to Acquiror:
Career Education Corporation
0000 Xxxxxxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxxx Xxxxxxx, Xxxxxxxx 00000
Attn: Chief Financial Officer
Fax: (000) 000-0000
with a copy to:
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Xxxxxx Xxxxxx Zavis
000 Xxxx Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000-0000
Attn: Xxxxx X. Xxxxxxx
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 Georgia, 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.
(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.
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(j) DEFINITIONS; CONSTRUCTION. 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. In addition, in the event of any change in the
Company's capital stock by reason of stock dividends, stock
splits, mergers, consolidations, recapitalizations,
combinations, conversions, exchanges of shares, extraordinary
or liquidating dividends, or other changes in the corporate or
capital structure of the Company which would have the effect
of diluting or changing the Acquiror's rights hereunder, the
number and kind of shares or securities subject to the Option
and the purchase price per Share (but not the total purchase
price) shall be appropriately and equitably adjusted so that
the Acquiror shall receive upon exercise or the Acquiror
Option the number and class of shares or other securities or
property that the Acquiror would have received in respect of
the Shares purchasable upon exercise of the Acquiror Option if
the Acquiror Option had been exercised immediately prior to
such event. Each Shareholder shall take such steps in
connection with such consolidation, merger, liquidation or
other such action as may be necessary to assure that the
provisions hereof shall thereafter apply as nearly as possible
to any securities or property thereafter deliverable upon
exercise of the Acquiror Option.
(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.
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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
By: /s/ Xxxxxxx Xxxxx
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Name: Xxxxxxx Xxxxx
Title: Chief Financial Officer
SHAREHOLDERS:
/s/ R. Xxxxxx Xxxxxx
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R. Xxxxxx Xxxxxx
/s/ Xxxxx Xxxxxx
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Xxxxx Xxxxxx
Xxxxxx Family Limited Partnership
/s/ R. Xxxxxx Xxxxxx
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By: R. Xxxxxx Xxxxxx
Its: General Partner
The Xxxxxx Family Foundation, Inc.
/s/ R. Xxxxxx Xxxxxx
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By: R. Xxxxxx Xxxxxx
Its: President