EXHIBIT 10.2
STOCKHOLDERS AGREEMENT
STOCKHOLDERS AGREEMENT (this "Agreement") is entered into as of August
12, 1998, between the undersigned stockholders (the "Stockholders") of Clearview
Cinema Group, Inc., a Delaware corporation (the "Company"), and Cablevision
Systems Corporation, a Delaware corporation ("Parent"). Capitalized terms used
but not defined herein shall have the meanings set forth in the Merger Agreement
(as defined below).
WHEREAS, concurrently with the execution and delivery of this
Agreement Parent, CCG Holdings Inc., a Delaware corporation and a wholly owned
subsidiary of Parent ("Newco"), and the Company have entered into an Agreement
and Plan of Merger dated as of August 12, 1998 (as in effect on the date hereof,
the "Merger Agreement"), providing for the merger of the Company with Newco (the
"Merger") upon the terms and subject to conditions of the Merger Agreement, and
setting forth certain representations, warranties, covenants and agreements of
the parties thereto in connection with the Merger; and
WHEREAS, as an inducement and a condition to Parent and Newco entering
into the Merger Agreement, pursuant to which each Stockholder will receive the
applicable Merger Consideration (as defined in the Merger Agreement) in exchange
for each outstanding Company Security owned by such Stockholder immediately
prior to the Effective Time, the Stockholders each have agreed to enter into
this Agreement;
NOW, THEREFORE, for good and valuable consideration, the receipt,
sufficiency and adequacy of which is hereby acknowledged, the parties hereto
agree as follows:
1. Representations of Stockholders. Each of the Stockholders severally
represents as to himself, herself or itself that, except as set forth on Exhibit
A hereto:
(a) such Stockholder is the beneficial owner with the sole power to
vote and the sole power to dispose of and, if applicable, the sole power to
exercise the right to acquire Shares upon conversion of Convertible
Preferred Securities or warrants to purchase Shares ("Warrants"), that
number of Company Securities or
Warrants set forth opposite such Stockholder's name on Exhibit A hereto (in
each case, such "Stockholder's Securities" and collectively, the
"Securities");
(b) such Stockholder does not beneficially own (as such term is
defined in the Securities Exchange Act of 1934, as amended (the "1934
Act")) any Company Securities or Warrants other than such Stockholder's
Securities, and any Shares which such Stockholder has the right to obtain
upon the exercise of employee stock options outstanding on the date hereof;
(c) such Stockholder has good and valid title to such Stockholder's
Securities free and clear of all pledges, liens, proxies, claims, charges,
security interests, preemptive rights and any other encumbrances whatsoever
with respect to the ownership, transfer or voting of such Securities (other
than restrictions on transfer under applicable Federal and state securities
laws, and other than pursuant to the agreements listed on Exhibit C);
(d) if such Stockholder is a corporation, partnership or other similar
business entity, such Stockholder is a duly organized and validly existing
corporation, partnership or other similar business entity, as the case may
be, in good standing under the laws of its jurisdiction of organization;
(e) such Stockholder has all requisite power and authority and has
taken all action necessary in order to execute, deliver and perform its
obligations under this Agreement and to take all actions required and to
consummate all of the transactions contemplated by, this Agreement. This
Agreement is a valid and binding agreement of such Stockholder, enforceable
against such Stockholder in accordance with its terms, subject to the
Bankruptcy and Equity Exception;
(f) other than the filings required pursuant to the HSR Act, no
notices, reports or other filings are required to be made by such
Stockholder with, nor are any consents, registrations, approvals, permits
or authorizations required to be obtained by such Stockholder from, any
Governmental Entity, in connection with the execution and delivery of this
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Agreement by such Stockholder, the performance of its obligations hereunder
or the consummation by such Stockholder of the transactions contemplated
hereby;
(g) the execution and delivery of this Agreement by such Stockholder
do not, and the performance of such Stockholder's obligations hereunder and
the consummation by such Stockholder of the transactions contemplated
hereby will not, constitute or result in (A) if the Stockholder is a
corporation, partnership or other similar business entity, a breach or
violation of, or a default under, the certificate or by-laws or the
comparable governing instruments of such Stockholder or (B) a breach or
violation of, or a default under, the acceleration of any obligations or
the creation of a lien, pledge, security interest or other encumbrance on
the assets (including the Securities, New Securities (as defined in Section
7) or any Company Securities issuable upon exercise, conversion or exchange
such Securities or New Securities) of such Stockholder (with or without
notice, lapse of time or both) pursuant to, any Contract binding upon such
Stockholder or any Law or governmental or non-governmental permit or
license to which such Stockholder is subject or by which such Stockholder
or its assets are bound. Exhibit C hereto sets forth a correct and complete
list of Contracts of such Stockholder pursuant to which consents or waivers
("Consents") are or may be required in order for such Stockholder to
perform its obligations hereunder. Pursuant to Section 2(d) of this
Agreement, such Stockholder has obtained all Consents that are or may be
required under such Contracts;
(h) such Stockholder will take all necessary action to ensure that
such Stockholder's Securities or New Securities will, except as set forth
in Section 1(c) or on Exhibit A (none of which shall prevent such
Stockholder from performing its obligations pursuant to Sections 2(a)
hereof), at all times during the term of this Agreement be held by such
Stockholder, or by a nominee or custodian for the account of such
Stockholder, free and clear of all pledges, liens, proxies, claims,
charges, security interests, preemptive rights and any other encumbrances
whatsoever with respect to the ownership, transfer or voting of
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such Stockholder's Securities, New Securities or any Company Securities
issuable upon exercise, conversion or exchange of such Securities or New
Securities; and there are no (and with respect to New Securities, there
will be no) outstanding options, warrants or rights to purchase or acquire,
or other agreements relating to, such Securities or New Securities, as the
case may be, other than this Agreement;
(i) no agent, broker, person or firm acting on behalf of such
Stockholder or any of its Affiliates (other than the Company with respect
to which such Stockholder makes no representation) is, or will be, entitled
to any commission or broker's or finder's fees from Parent or any of its
Affiliates in connection with any of the sale, exchange, transfer or other
disposition of such Stockholder's Securities or New Securities as
contemplated by this Agreement or the Merger Agreement;
(j) none of the information supplied by such Stockholder for inclusion
or incorporation by reference in the Registration Statement, including the
Proxy Statement included therein, or any document incorporated by reference
thereby, as of the time the Registration Statement becomes effective, the
date of the Proxy Statement and the date of the Stockholders Meeting, will
contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements made therein, in
light of the circumstances under which they are made, not misleading. Such
Stockholder agrees promptly to correct any information provided by it for
use in the Registration Statement and the Proxy Statement that shall be, or
shall become, false or misleading in any material respect;
(k) such Stockholder understands and acknowledges that Parent and
Newco are each entering into the Merger Agreement in reliance upon such
Stockholder's execution and delivery of this Agreement; and
The representations and warranties of each Stockholder contained herein are for
the benefit of Parent and its permitted assigns and shall be deemed made as of
the date hereof and as of each date from the date hereof through and
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including the earlier of the date that the Merger is consummated or this
Agreement is terminated in accordance with its terms.
2. Agreement to Vote Securities; Disclosure; Waivers.
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(a) Each of the Stockholders severally agrees to vote such
Stockholder's Securities and any New Securities, and shall cause any holder
of record of such Stockholder's Securities or New Securities to vote, (i)
in favor of adoption of the Merger Agreement (and each other action and
transaction contemplated by the Merger Agreement and this Agreement) at
every meeting of the stockholders of the Company at which such matters are
considered and at every adjournment thereof and (ii) against any action or
proposal that would compete with or could serve to materially compete or
interfere with, delay, discourage, adversely affect or inhibit the timely
consummation of the Merger. Any vote shall be cast or consent shall be
given in accordance with procedures relating thereto as shall ensure that
it is duly counted for purposes of determining that a quorum is present and
for purposes of recording the results of such vote or consent. Each
Stockholder severally agrees to deliver to Parent upon request a proxy
substantially in the form attached hereto as Exhibit B, which proxy shall
be coupled with an interest and irrevocable to the extent permitted under
Delaware law, with the total number of such Stockholder's Securities and
any New Securities correctly indicated thereon. Each Stockholder also
agrees to use all reasonable efforts to take, or cause to be taken, all
action, and do, or cause to be done, all things necessary or advisable in
order to consummate and make effective the transactions contemplated by
this Agreement.
(b) Each Stockholder hereby agrees to permit Parent and Newco to
publish and disclose in the Registration Statement and the Proxy Statement
its identity and ownership of Company Securities and the nature of its
commitments, arrangements and understandings under this Agreement.
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(c) To the extent such rights arise as a result of the Merger, the
execution of this Agreement or the Merger Agreement or the other
transactions contemplated herby or by the Merger Agreement under applicable
law or the certificates of designation relating to Preferred Shares (each,
a "Certificate of Designation"), each Stockholder irrevocably waives (i)
any rights of appraisal or rights to dissent from the Merger, (ii) other
than pursuant to Article IV of the Merger Agreement, this Agreement or with
the prior written consent of Parent, any rights to require or otherwise
cause the Company or Parent to exercise, convert or exchange any of such
Stockholder's Securities for shares of capital stock or other securities or
property or assets of Parent or the Company, (iii) any rights to require or
otherwise cause the Company or Parent to redeem any of such Stockholder's
Preferred Shares, (iv) any rights to receive preferential payments or other
distributions upon a Liquidation Event, Mandatory Redemption Event (each as
defined in the applicable Certificate of Designation) or other similar
events or (v) any rights to vote separately as a class of Peferred Shares
upon adoption of the Merger Agreement at a meeting of stockholders of the
Company. In addition, each of such Stockholders agrees that pursuant to the
Merger, at the Effective Time, all of such Stockholder's Securities shall
no longer be outstanding, shall be cancelled and retired and shall cease to
exist, and each Certificate representing any such Stockholder's Securities
shall, subject to the terms and upon the conditions of the Merger
Agreement, thereafter represent only the right to receive the applicable
Merger Consideration and the right, if any, to receive pursuant to Section
4.2(e) of the Merger Agreement, cash in lieu of any fractional shares of
Parent Common Stock into which such Stockholder's Securities otherwise
would have been converted pursuant to section 4.1(a) of the Merger
Agreement and any distribution or dividend pursuant to Section 4.2(c) of
the Merger Agreement.
(d) To the extent such rights, privileges or obligations arise under
any voting trust, lockup, registration rights or other similar agreements
(including, without limitation, the agreements listed on Exhibit C hereto)
to which such Stockholder is a
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party, each such Stockholder irrevocably (i) waives any obligations or
restrictions or other limitations on the rights of all other Stockholders
party hereto, to the extent necessary for such other Stockholders to
fulfill their obligations pursuant to this Agreement (it being acknowledged
and agreed that this Agreement shall constitute any consent, approval or
waiver required for such purpose) and (ii) other than as specifically
contemplated by the Merger Agreement, waives any rights to require the
Company or Parent to file a registration statement under the Securities Act
of 1933 for the public offering of such Stockholders Securities or
otherwise require the Company or Parent to cause any such registration
statement to cover the public offering of any of such Stockholder's
Securities.
3. No Voting Trusts. After the date hereof, the Stockholders severally
agree that they will not, nor will they permit any entity under their control
to, deposit any of their Securities or New Securities in a voting trust or
subject any of their Securities or New Securities or Company Securities into
which they can be converted to any arrangement with respect to the voting of
such Securities or New Securities or Company Securities into which they can be
converted other than agreements entered into with Parent or Newco.
4. No Proxy Solicitations. Each of the Stockholders severally agrees
that such Stockholder will not, nor will such Stockholder permit any entity
under their control to, (a) solicit proxies or become a "participant" in a
"solicitation" (as such terms are defined in Regulation 14A under the Exchange
Act) in opposition to or competition with the consummation of the Merger or
otherwise encourage or assist any party in taking or planning any action which
would compete with or otherwise could serve to materially interfere with, delay,
discourage, adversely affect or inhibit the timely consummation of the Merger in
accordance with the terms of the Merger Agreement, (b) directly or indirectly
encourage, initiate or cooperate in a stockholders' vote or action by consent of
the Company's stockholders in opposition to or in competition with the
consummation of the Merger, or (c) become a member of a "group" (as such term is
used in Section 13(d) of the Exchange Act) with respect to any voting securities
of the Company for the purpose of opposing or competing with the
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consummation of the Merger; provided, without limiting the provisions of Section
11(g), that the foregoing shall not restrict any director of the Company from
taking any action such director believes in good faith, after consultation with
outside counsel, is necessary to satisfy such director's fiduciary duty to
stockholders of the Company.
5. Transfer and Encumbrance. On or after the date hereof, each of the
Stockholders severally agrees not to voluntarily transfer, sell, offer, pledge
or otherwise dispose of or encumber ("Transfer") any of his or her Securities or
New Securities prior to the earlier of (a) the immediately following adoption of
the Merger Agreement by the Company Requisite Vote or (b) the date this
Agreement shall be terminated in accordance with its terms.
6. Legend. As soon as practicable after the execution of this
Agreement (but no later than the tenth business day thereafter), each
Stockholder shall surrender to the Company the certificates representing the
Securities (and, thereafter, shall surrender any New Securities within five
business days after acquiring beneficial ownership of such New Securities), and
shall cause the following legend to be placed on the certificates representing
such Securities and New Securities prior to their prompt return to the
Stockholder and shall request that such legend remain thereon until the earlier
of (i) expiration or termination of the Agreement or (ii) the consummation of
the Merger:
"The shares of capital stock represented by this certificate are
subject to a Selling Stockholders Agreement, dated as of August __,
1998, among the Stockholders named therein and [Parent], which, among
other things, restricts the sale or transfer and voting of such shares
of capital stock except in accordance therewith. Such restrictions
expire and terminate, whether or not this legend remains on any
certificate and without any notice, action or demand of any person, on
the date such Agreement terminates."
In the event that Parent requests that a proxy be executed and delivered by a
Stockholder to it pursuant to Section 2 hereof, such Stockholder shall promptly
surrender to the Company the certificates representing the Securities or New
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Securities covered by such proxy prior to their prompt return to the Stockholder
and cause the foregoing legend to be revised to add to the end of such legend
the following words:
", and such shares are also subject to an irrevocable proxy, coupled
with an interest under the Delaware General Corporation Law."
Each Stockholder shall provide Parent with reasonably satisfactory evidence of
its compliance with this Section 6 on or prior to the date ten business days
after the execution hereof with respect to Securities (or within five business
days of the date of acquisition of beneficial ownership of any New Securities)
or of the request relating to Stockholder's proxy, as the case may be.
7. Exercise of Warrants; Additional Purchases. Each Stockholder that
beneficially owns any Warrants severally agrees that upon the written notice of
Parent delivered to such Stockholder at the address set forth below such
Stockholder's name on Exhibit A hereto, such Stockholder will, at the option and
direction of Parent set forth in such notice, complete and provide to the
Company the appropriate notice of exercise with respect such Stockholder's
Warrants and pay the applicable exercise price for such Warrants, it being
understood and agreed that such Stockholder shall only exercise such number of
Warrants as shall be required for such Stockholder to acquire the number of
Shares specified in Parent's notice. Such Stockholder shall cause such exercise
to become effective such that such Stockholder is the record holder of the
Shares issuable upon exercise of such Warrants prior to the record date for the
Stockholders Meeting. Each of the Stockholders severally agrees that in the
event (i) any stock dividend, stock split, recapitalization, reclassification,
combination or exchange of shares of capital stock of the Company on, of or
affecting the Securities of a Stockholder, (ii) such Stockholder purchases or
otherwise acquires beneficial ownership of any Company Securities after the
execution of this Agreement, (iii) such Stockholder voluntarily acquires the
right to vote or share in the voting of any Company Securities other than such
Stockholder's Securities, or (iv) such Stockholder converts any Convertible
Preferred Shares or exercises any Warrants beneficially owned by such
Stockholder into Shares, whether pursuant to this Section 7
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or otherwise (Company Securities beneficially acquired pursuant to (i), (ii),
(iii) or (iv) being collectively referred to as "New Securities"), such
Stockholder agrees that such New Securities shall be subject to the terms of
this Agreement to the same extent as if they constituted Securities. Without
limiting the generality of the foregoing, nothing herein shall require any
Stockholder that owns Convertible Preferred Shares to convert such Convertible
Preferred Shares into Shares.
8. Specific Performance. Each party hereto severally acknowledges that
it will be impossible to measure in money the damage to the other party if the
party hereto fails to comply with any of the obligations imposed by this
Agreement, that every such obligation is material and that, in the event of any
such failure, the other party will not have an adequate remedy at law or
damages. Accordingly, each party hereto severally agrees that injunctive relief
or other equitable remedy, in addition to remedies at law or damages, is the
appropriate remedy for any such failure and will not oppose the granting of such
relief on the basis that the other party has an adequate remedy at law. Each
party hereto severally agrees that it will not seek, and agrees to waive any
requirement for, the securing or posting of a bond in connection with any other
party's seeking or obtaining such equitable relief.
9. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns and shall not be assignable without the written consent of all other
parties hereto; provided however, that Parent may assign all of its rights
pursuant to this Agreement to Newco or any other direct or indirect wholly owned
subsidiary of Parent.
10. Entire Agreement. This Agreement supersedes all prior agreements,
written or oral, among the parties hereto with respect to the subject matter
hereof and contains the entire agreement among the parties with respect to the
subject matter hereof. This Agreement may not be amended, supplemented or
modified, and no provisions hereof may be modified or waived, except by an
instrument in writing signed by Parent on the one hand and the relevant
Stockholder(s) whose rights and/or obligations are thereby amended, supplement
or modified on the other. No waiver of any provisions hereof by any party shall
be deemed a waiver
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of any other provisions hereof by any such party, nor shall any such waiver be
deemed a continuing waiver of any provision hereof by such party.
11. Miscellaneous.
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(a) This Agreement shall be deemed a contract made under, and for all
purposes shall be construed in accordance with, the laws of the State of
Delaware.
(b) If any provision of this Agreement or the application of such
provision to any person or circumstances shall be held invalid by a court
of competent jurisdiction, the remainder of the provision held invalid and
the application of such provision to persons or circumstances, other than
the party as to which it is held invalid, shall not be affected.
(c) This Agreement may be executed in one or more counterparts, each
of which shall be deemed to be an original but all of which together shall
constitute one and the same instrument.
(d) This Agreement shall terminate upon the earliest to occur of (i)
the Effective Time or (ii) termination of the Merger Agreement in
accordance with its terms.
(e) All Section headings herein are for convenience of reference only
and are not part of this Agreement, and no construction or reference shall
be derived therefrom.
(f) The parties agree that there is not and has not been any other
agreement, arrangement or understanding between the parties hereto with
respect to the matters set forth herein.
(g) Each of the Stockholders are acting hereunder in their capacities
as holders of Securities only, and make no agreement or understanding
herein in any capacities as directors or officers of the Company. Nothing
herein shall limit or affect any actions which the Stockholders and/or
their Affiliates may take in their capacities as officers and/or directors
of the Company.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Agreement as of the date first written above.
CABLEVISION SYSTEMS CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Executive Vice President
THE STOCKHOLDERS:
/s/ Xxxxxx X. Xxxxxxxx
----------------------------------
Name: CMNY Capital II, L.P. by
Xxxxxx X. Xxxxxxxx
/s/ Xxxxxx X. Xxxxxxxx
----------------------------------
Name: CMCO, Inc. by Xxxxxx X.
Xxxxxxxx, President and
Xxxxxx X. Xxxxxxxx, individually
/s/ Xxxxx Xxxxxx
----------------------------------
Name: MidMark Capital, L.P. by
MidMark Associates, Inc.,
General Partner by
Xxxxx Xxxxxx, Managing
Director
/s/ Xxxxxx X. Xxxxxx
----------------------------------
Name: Prime Charter Ltd. by
Xxxxxx X. Xxxxxx, Managing Director
/s/ A. Xxxx Xxxx
----------------------------------
Name: A. Xxxx Xxxx
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/s/ Xxxxx X. Xxxxx
----------------------------------
Name: Xxxxx X. Xxxxx
/s/ Xxxx Xxxxxx
----------------------------------
Name: Xxxx Xxxxxx individually and
as President of F&N Cinema,
Inc., Roxbury Cinemas, Inc.
and Olde EC, Inc. f/k/a
Xxxxxxx Cinemas, Inc.
/s/ Xxxxxxx X. Xxxx
----------------------------------
Name: Xxxxxxx X. Xxxx
/s/ Xxxxxx Xxxxxx
----------------------------------
Name: Xxxxxx Xxxxxx
/s/ Xxxx Xxxxxx
----------------------------------
Name: Xxxx Xxxxxx
/s/ Xxxxx Xxxxxxx
----------------------------------
Name: Xxxxx Xxxxxxx
/s/ Claridge Cinemas, Inc.
----------------------------------
Name: Claridge Cinemas, Inc. by
Xxxxx Xxxxxxx, President
/s/ Xxxx Xxx
----------------------------------
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Name: Xxxx Xxx
/s/ Xxxxx Xxx
---------------------------------------
Name: Xxxxx Xxx
/s/ Xxxxx Xxxxxx
---------------------------------------
Name: Xxxxxxxx Capital Management,
Inc. by Xxxxx Xxxxxx
/s/ A. Xxxx Xxxx
---------------------------------------
Name: A. Xxxx Xxxx, as Voting
Trustee, under the Voting Trust
Agreement by and between Xxxx
Xxxxxx and A. Xxxx Xxxx as Voting
Trustee, dated September 1, 1997;
the Voting Trust Agreement by and
between Xxxx Xxxxxx and A. Xxxx
Xxxx as Voting Trustee, dated
September 1, 1997; the Voting Trust
Agreement by and between Xxxxxx
Xxxxxx and A. Xxxx Xxxx as Voting
Trustee, dated September 1, 1997;
and the Voting Trust Agreement by
and between Xxxxx Xxxxxxx and A.
Xxxx Xxxx as Voting Trustee, dated
September 2, 1997.
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/s/ A. Xxxx Xxxx
---------------------------------------
Name: A. Xxxx Xxxx, as Voting
Trustee, under the Voting Trust
Agreement by and between Xxxxx X.
Xxxxx and A. Xxxx Xxxx as Voting
Trustee, dated December 21, 1994;
the Voting Trust Agreement by and
between Xxxxxxx X. Xxxx and A.
Xxxx Xxxx as Voting Trustee, dated
June 20, 1995; the Voting Trust
Agreement by and between Xxxxxxx
Cinema, Inc. and A. Xxxx Xxxx as
Voting Trustee, dated May 29,
1996; the Voting Trust Agreement
by and among Xxxx Xxx, Xxxxx Xxx
and A. Xxxx Xxxx as Voting
Trustee, dated July 31, 1996; the
Voting Trust Agreement dated as of
November 21, 1997 by and among F&N
Cinema, Inc., Roxbury Cinema, Inc.
and A. Xxxx Xxxx, as Trustee; the
Voting Trust Agreement dated as of
February 13, 1998 by and between
Claridge Cinemas, Inc. and A. Xxxx
Xxxx, as Trustee; and the Voting
Trust Agreement dated as of April
30, 1998 by and among Xxxx Xxxxxx,
Xxxx Xxxxxx, Xxxxxx Xxxxxx, Xxxxxx
Xxxxxxxx and A. Xxxx Xxxx, as
Trustee, with respect to only
those Shares that are subject to
such agreements the other
beneficial owners of which have
also executed this Agreement.
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