Exhibit 99.9
EXECUTION COPY
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STANDSTILL AGREEMENT
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This STANDSTILL AGREEMENT (the "Agreement") is made as of
November 17, 2003, by and among CharterMac, a Delaware statutory trust
("CharterMac"), and APH Associates L.P., DLK Associates L.P., Marc Associates,
L.P., Related General II L.P. ("RGII") and SJB Associates L.P. (each an
"Investor Member" and collectively, the "Investor Members") (this "Agreement").
RECITALS:
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WHEREAS, this Agreement is made pursuant to, and as a condition
of, that certain Contribution Agreement, dated as of December 17, 2002, by and
among CharterMac Capital Company, LLC, a Delaware limited liability company
("CCC"), and the contributors named therein (the "Contribution Agreement")
(capitalized terms used but not otherwise defined herein shall have the meanings
assigned to such terms in the Contribution Agreement);
WHEREAS, pursuant to (i) the Contribution Agreement and (ii) the
Amended and Restated Operating Agreement of CCC (as amended from time to time,
the "Operating Agreement"), the Investor Members hold special common units of
CCC (the "Special Common Units");
WHEREAS, pursuant to that certain Special Preferred Voting Shares
Purchase Agreement, dated as of November 17, 2003, by and among CharterMac and
the Investor Members, the Investor Members hold special preferred voting shares
of beneficial interest of CharterMac (the "Special Preferred Shares");
WHEREAS, CCC, CharterMac Corporation ("CM Corp.") and the
Investor Members are parties to that certain Exchange Rights Agreement, dated as
of November 17, 2003 (the "Exchange Rights Agreement"), which provides the
Investor Members, among other things, with the right to exchange their Special
Common Units and Special Preferred Shares for cash or, at the election of CM
Corp., for shares of CharterMac's common shares of beneficial interest (the
"Common Shares"); and
WHEREAS, the Investor Members have agreed to enter into this
Agreement, which restricts the right of the Investor Members and their
Affiliates (as defined in the Operating Agreement) to acquire any securities (or
beneficial ownership thereof) of CharterMac as set forth herein, subject to the
terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
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Section 1. Standstill.
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(a) General Standstill. Each of the Investor Members hereby
agrees, on behalf of the Investor Member and his or her Affiliates (the
"Investor Member Parties"), that from the date hereof until November 17, 2008
(the "Standstill Period") such Investor Member will not, and that such Investor
Member will cause each of his or her Affiliates not, without the prior written
approval of CharterMac (which approval shall require the approval of not less
than a majority of the Independent Trustees (as defined in the Second Amended
and Restated Trust Agreement of CharterMac)) to, directly or indirectly, (i)
effect or seek, offer or propose (whether publicly or otherwise) to effect, or
cause or participate in or in any way assist any other Person to effect or seek,
offer or propose (whether publicly or otherwise) to effect or participate in,
(A) any acquisition of any securities (or beneficial ownership thereof) of
CharterMac or any of its subsidiaries, Affiliates or divisions; (B) any tender
or exchange offer, merger or other business combination involving CharterMac or
any of its subsidiaries, Affiliates or divisions; (C) any recapitalization,
restructuring, conversion, liquidation, dissolution or other extraordinary
transaction with respect to CharterMac or any of its subsidiaries, Affiliates or
divisions; (D) any acquisition of a material or significant amount of the assets
of CharterMac or any of its subsidiaries, Affiliates or divisions; or (E) any
"solicitation" of "proxies" (as such terms are used in the proxy rules of the
Securities and Exchange Commission) or consents with respect to any voting
securities of CharterMac (provided, however, that nothing in this clause (i)
shall prohibit an Investor Member Party who is an officer or trustee of
CharterMac from proposing to the Board of Trustees of CharterMac (in his or her
capacity as an officer or trustee of CharterMac) that CharterMac (1) sell to a
Person who is not an Affiliate of any Investor Member Party in any twenty four
(24) consecutive month period an asset(s) comprising in the aggregate less than
50% of the then fair market value of CharterMac's total assets, or (2) effect a
recapitalization or restructuring provided such recapitalization or
restructuring results in all CharterMac shareholders being treated equally and
does not disproportionately increase the Investor Member Parties' aggregate
proportionate interest in CharterMac as compared to the interest in CharterMac
of all other CharterMac shareholders immediately prior to such recapitalization
or restructuring); (ii) form, join or in any way participate in a "group" (as
defined under the Securities Exchange Act of 1934, as amended, the "1934 Act"))
regarding any of the types of matters set forth in (i) above; (iii) otherwise
act, alone or in concert with others, to seek to control or influence the
management, board of directors, managing member or trustees or policies of
CharterMac or any of its subsidiaries, Affiliates or divisions; (iv) take any
action which might force or require CharterMac or any of its subsidiaries,
Affiliates or divisions to make a public announcement regarding any of the types
of matters set forth in (i) above; or (v) enter into any discussions or
arrangements with any third party with respect to any of the foregoing. The
foregoing restrictions shall not be deemed to limit any Investor Member Party
who is an officer or trustee of CharterMac from conducting his or her activities
or performing his or her duties in a manner consistent with his or her fiduciary
obligations in such capacities. Notwithstanding anything to the contrary in this
Agreement, the parties agree that no Investor Member shall have any liability,
or be deemed in breach of this Agreement, due to the actions of any other
Investor Member.
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(b) General Exceptions to the Standstill. Notwithstanding
anything to the contrary contained herein, each Investor Member and his or her
Affiliates may acquire additional Common Shares: (i) to maintain the percentage
interest of voting securities in CharterMac held by the applicable Investor
Member immediately following the completion of issuance of Special Common Units
pursuant to the Contribution Agreement in the event that such percentage
interest in CharterMac is reduced as a result of subsequent issuances of voting
securities by CharterMac; (ii) pursuant to a tender offer or exchange offer by
any of the Investor Member Parties for all voting securities of CharterMac not
owned by such Investor Member Parties in the event of the commencement of a
tender offer or exchange offer by any Person (other than CharterMac or any,
Investor Member Party or any Person acting in concert with, or induced by, such
Investor Member Parties) to purchase voting securities of CharterMac (a "Third
Party Tender Offer") that would result in a Change of Control (as defined
below), which tender offer or exchange offer is not withdrawn or terminated
prior to such acquisition; provided, however, that if a Third Party Tender Offer
is for more than twenty (20%) percent of the issued and outstanding voting
securities of CharterMac but would not result in a Change of Control, any of the
Investor Member Parties may conduct its own tender offer or exchange offer but
only for an amount of voting securities which, when aggregated with all voting
securities to be acquired pursuant to the tender or exchange offer of any other
Investor Member Party, is no more than the number of voting securities sought in
such Third Party Tender Offer, so long as such Third Party Tender Offer is not
withdrawn or terminated prior to such acquisition; and (iii) issued by
CharterMac to the Investor Members including issuances of Common Shares (or
options to obtain Common Shares) under executive compensation arrangements or
CharterMac option plans, but not including original issuances by CharterMac to
the public through underwriters, placement agents or otherwise. In addition,
each of the Investor Members and his or her Affiliates, other than Xxxxxxx X.
Xxxx, may acquire additional Common Shares from time to time so long as the
aggregate percentage interest of voting securities of CharterMac held by such
Investor Member and his or her Affiliates following such acquisition remains
less than or equal to the aggregate percentage interest of voting securities of
CharterMac held by such Investor Member and his or her Affiliates immediately
following the completion of issuance of Special Common Units pursuant to the
Contribution Agreement plus 1%. For the purposes of this agreement, a "Change of
Control" means, with respect to CharterMac, (A) the acquisition by any Person or
group of Persons, which is not an Affiliate, of beneficial ownership, as that
term is defined in Rule 13d-3 under the 1934 Act, directly or indirectly, of
more than 40% of the issued and outstanding voting securities of CharterMac
("Voting Interests"); or (B) the merger or consolidation of CharterMac with one
or more other business entities as a result of which the holders of all of the
issued and outstanding Voting Interests immediately before the merger or
consolidation hold less than 50% of the Voting Interests of the surviving or
resulting Person.
Section 2. Miscellaneous Provisions.
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(a) Notices. All notices and other communications given or made
pursuant hereto shall be in writing and delivered by hand or sent by registered
or certified mail (postage prepaid, return receipt requested) or by nationally
recognized overnight air courier service and shall be deemed to have been duly
given or made as of the date delivered if delivered personally, or if mailed, on
the third business day after mailing (on the first business day after mailing in
the
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case of a nationally recognized overnight air courier service) to the parties at
the following addresses:
If to any Investor Member, to such Investor Member at such
address as set forth on Schedule A hereto.
If to CharterMac, to:
CharterMac
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
with a copy to:
Paul, Hastings, Xxxxxxxx & Xxxxxx LLP
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxxxxxx, Esq.
Any party may by notice given in accordance with this Section
2(a) to the other parties designate another address or Person for receipt of
notices hereunder.
(b) Amendment and Modification. This Agreement may be modified,
amended or supplemented only by an instrument in writing signed by all of the
parties hereto; provided, however, that any such modification, amendment or
supplement shall require the approval of not less than a majority of the
Independent Trustees.
(c) Waiver of Compliance; Consents. Except as otherwise provided
in this Agreement, any failure of any of the parties to comply with any
obligation, covenant, agreement or condition herein may be waived by the party
or parties entitled to the benefits thereof only by a written instrument signed
by the party granting such waiver (which, in the case of a waiver by CharterMac,
shall require the approval of not less than a majority of its Independent
Trustees), but such a waiver or failure to insist upon strict compliance with
such obligation, covenant, agreement or condition shall not operate as a waiver
of, or estoppel with respect to, any subsequent other failure. Whenever this
Agreement requires or permits consent by or on behalf of any party hereto, such
consent shall be given in writing in a manner consistent with the requirements
for a waiver of compliance as set forth in this Section 2(c).
(d) Governing Law. This Agreement shall be governed by the laws
of the State of New York without regard to the conflict of laws principles
thereof.
(e) Severability. The invalidity or unenforceability of any
provisions of this Agreement in any such jurisdiction shall not affect the
validity, legality or enforceability of the remainder of this Agreement in such
jurisdiction or the validity, legality or enforceability of this Agreement,
including any such provision, in any other jurisdiction, it being intended that
all rights and obligations of the parties hereunder shall be enforceable to the
fullest extent permitted
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by law. Upon such determination that any provision is invalid, illegal or
incapable of being enforced, the parties hereto will negotiate in good faith to
modify this Agreement so as to effect the original intent of the parties as
closely as possible in an acceptable manner to the end that the transactions
contemplated hereby and thereby are fulfilled to the extent possible.
(f) Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
(g) Section Headings. The section headings contained in this
Agreement are solely for the purpose of reference, are not part of the agreement
of the parties and shall not in any way affect the meaning or interpretation of
this Agreement. All references in this Agreement to Sections are to sections of
this Agreement, unless otherwise indicated.
(h) Entire Agreement. This Agreement, together with the
Contribution Agreement and the other Collateral Agreements (as defined in the
Contribution Agreement), embodies the entire agreement and understanding of the
parties hereto in respect of the transactions contemplated by this Agreement.
There are no restrictions, promises, inducements, representations, warranties,
covenants or undertakings, other than those expressly set forth or referred to
herein or therein. This Agreement, the Contribution Agreement and the other
Collateral Agreements supersede all prior written or oral agreements and
understandings between the parties with respect to the transactions.
(i) No Third Party Beneficiaries. This Agreement shall be
binding upon and inure to the benefit of each party thereto and their respective
representatives, heirs, successors and permitted assigns. Nothing in this
Agreement, express or implied, is intended to or shall confer upon any other
Person any right, benefit, claim or remedy of any nature whatsoever under or by
reason of this Agreement.
(j) Interpretation.
(1) The parties hereto have participated jointly in the
negotiation and drafting of this Agreement. If any ambiguity or question of
intent or interpretation arises, this Agreement will be construed as if drafted
jointly by the parties and no presumptions or burden of proof will arise
favoring or disfavoring any party by virtue of authorship of any provisions of
this Agreement.
(2) All pronouns and any variations thereof refer to the
masculine, feminine or neuter, singular or plural, as the context may require.
(3) The words "include," "includes" and "including" shall be
deemed to be followed by the phrase "without limitation."
(k) Further Assurances. Each of the parties shall use reasonable
efforts to execute and deliver to any other party such additional documents and
take such other action, as
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any other party may reasonably request to carry out the intent of this Agreement
and the transactions contemplated hereby.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first written above.
CHARTERMAC
By: /s/ Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Chief Operating Officer
APH ASSOCIATES L.P.
By: APH Associates, Inc., its general
partner
By: /s/ Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: President
DLK ASSOCIATES L.P.
By: DLK Associates, Inc., its general
partner
By: /s/ Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: President
MARC ASSOCIATES, L.P.
By: Marc Associates, Inc., its general
partner
By: /s/ Xxxx X. Xxxxxxxxx
Name: Xxxx X. Xxxxxxxxx
Title: President
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RELATED GENERAL II L.P.
By: RCMP, Inc., its general partner
By: /s/ Xxxx X. Xxxx
Name: Xxxx X. Xxxx
Title: Vice President
SJB ASSOCIATES L.P.
By: SJB Associates, Inc., its general
partner
By: /s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: President
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Schedule A
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Addresses for Notices
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If to APH Associates L.P.:
c/o Related Capital Company
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xx. Xxxx X. Xxxxxx
If to DLK Associates L.P.:
c/o Related Capital Company
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xx. Xxxxxx X. Xxxxx
If to Marc Associates, L.P.:
c/o Related Capital Company
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xx. Xxxx X. Xxxxxxxxx
If to SJB Associates L.P.:
c/o Related Capital Company
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xx. Xxxxxx X. Xxxxxx
If to The Related Companies, L.P. or to Related General II L.P.:
c/o Related Capital Company
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xx. Xxxx Xxxx
with a copy to:
Xxxxxxx Xxxxxxx, Esq.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
and with a copy to:
Proskauer Rose LLP
0000 Xxxxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx Xxxxxxx, Esq.
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