Exhibit 99.16
EXECUTION COPY
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Xxxx Lock-Up Agreement
November 17, 2003
CharterMac Capital Company, LLC
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Lock-Up Agreement
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Ladies and Gentlemen:
Reference is hereby made to that (i) certain Contribution
Agreement, dated as of December 17, 2002 (the "Contribution Agreement"), by and
among CharterMac Capital Company, LLC, a Delaware limited liability company
("CCC"), and the contributors named therein, pursuant to which the undersigned
will receive special common units of CCC (the "Special Common Units") which are
exchangeable for common shares of beneficial interest (the "Common Shares") of
CharterMac, a Delaware statutory trust ("CharterMac"), in accordance with that
certain Exchange Rights Agreement, dated as of the date hereof, among CCC,
CharterMac Corporation, the undersigned and certain other parties thereto (the
"Exchange Rights Agreement") and (ii) that certain Special Preferred Voting
Shares Purchase Agreement, dated as of November 17, 2003, by and among
CharterMac and APH Associates L.P., DLK Associates L.P, Marc Associates, L.P.,
Related General II, L.P. and SJB Associates L.P., pursuant to which the
undersigned will receive special preferred voting shares of beneficial interest
of CharterMac (the "Special Preferred Shares" and together with the Special
Common Units and the Common Shares, the "Securities").
Capitalized terms used but not otherwise defined herein shall
have the meanings assigned to such terms in the Contribution Agreement.
In consideration of the agreement by CCC to consummate the
transactions contemplated by the Contribution Agreement, and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the undersigned, intending to be legally bound, hereby agrees as
follows:
1. General. The undersigned may, directly or indirectly, offer to sell,
sell, contract to sell, assign, pledge, grant any option to purchase,
make any short sale, exchange, encumber or otherwise dispose of
("Transfer") the Securities without restriction,
except as set forth in this Lock-Up Agreement or in the Amended and
Restated Operating Agreement of CCC (as amended from time to time, the
"Operating Agreement").
2. Exchange Restrictions. Without the prior written consent of CCC, which
shall not be unreasonably withheld, the undersigned shall not exchange
any Special Common Units into cash or Common Shares pursuant to the
Exchange Rights Agreement (the "Exchange of Special Common Units") until
the first anniversary of the date hereof; provided, however, that the
foregoing restriction with respect to the Exchange of Special Common
Units shall terminate upon the death of the undersigned and shall not
apply to the Exchange of Special Common Units following the foreclosure
or other exercise of remedies by a pledgee which is an Institutional
Lender (as defined below) in accordance with Section 4; provided,
further, however, that the consent of CCC shall be deemed reasonably
withheld if CCC could reasonably anticipate adverse tax consequences to
CCC or CharterMac resulting from granting such consent. To the extent
the restrictions on the Exchange of Special Common Units have not
previously been removed, all such restrictions shall expire after the
first anniversary of the date hereof.
3. Transfer Restrictions. Without the prior written consent of CCC, which
shall be granted or withheld in the sole discretion of CCC, the
undersigned shall not (a) Transfer any Special Common Units to any
Person until November 17, 2004 except (x) to Permitted Transferees (as
set forth below) or (y) a pledge of the Special Common Units which does
not violate Section 4 hereof; or (b) Transfer any Securities to any
Person who holds, or would hold as a result of such Transfer, more than
10% of the Common Shares (or any combination of Securities that, on a
fully exchanged basis, would constitute more than 10% of the Common
Shares), determined on a fully diluted basis.
The provisions of this Section 3 shall not apply to a Transfer to a
Permitted Transferee, provided that the Permitted Transferee shall
furnish to CCC a written agreement to be bound by and comply with the
provisions of this Lock-Up Agreement applicable to the transferor.
As used herein, "Permitted Transferee" shall mean: (i) any of Xxxxxxx X.
Xxxx, Xxxxxxx Xxxxxxx or Xxxx Xxxx; (ii) any spouse, parent, lineal
descendent, parent-in-law, nephew, niece, brother, sister,
brother-in-law, sister-in-law, stepchild, son-in-law and daughter-in-law
of any of the persons referred to in (i) above or their respective
spouses; (iii) any corporation, limited partnership or limited liability
company in which all of the shares, partnership interests or membership
interests are owned by the persons listed in (i) and (ii) above; (iv) in
case of the death of any of the foregoing persons, a transfer by will or
by the laws of the intestate succession to executors, administrators,
testamentary trustees, legatees or
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beneficiaries; or (v) trusts, the only beneficiaries of which are listed
in (i), (ii), (iii); (iv) and/or are charitable organizations.
4. Restrictions on Pledges. Without the prior written consent of CCC, which
shall be granted or withheld in the sole discretion of CCC, the
undersigned shall not, directly or indirectly, pledge or encumber the
Securities (a) if the pledgor or the pledgee will make short sales of
the Securities in connection with such loan, or (b) in connection with
any non-recourse loan of which the aggregate principal amount, as of the
date of such pledge or any additional advance secured by such pledge,
exceeds 50% of the Value (as defined below) of the Securities pledged.
In connection with any permitted pledge, the pledgee shall agree to be
bound in writing by the restrictions set forth herein, provided,
however, that a pledgee which is an Institutional Lender shall otherwise
be entitled and authorized, in connection with any foreclosure in
respect of such pledge, to Transfer the Securities into its name and/or
sell any Securities to any Person other than an Investor Member (as
defined in the Exchange Rights Agreement) or an Affiliate of an Investor
Member free of the restrictions of this Lock-Up Agreement. For purposes
hereof, "Institutional Lender" means either a financial institution
(including, without limitation, a commercial bank, mortgage bank,
investment bank, life insurer or pension fund) in the business of making
loans and having assets exceeding $25 billion, or any public or private
company in the business of making loans to real estate companies and
having assets exceeding $1 billion or a subsidiary of such financial
institution or such public or private company. For purposes hereof,
"Value" means, with respect to a referenced date, the average of the
closing market price of the Common Shares for the immediately preceding
thirty (30) consecutive trading days. The market price for each such
trading day shall be: (i) if the Common Shares are listed or admitted to
trading on the New York Stock Exchange (the "NYSE"), the American Stock
Exchange ("AMEX"), any national securities exchange or the Nasdaq Stock
Market ("Nasdaq"), the closing price on such day, or if no such sale
takes place on such day, the average of the closing bid and asked prices
on such day; (ii) if the Common Shares are not listed or admitted to
trading on the NYSE, the AMEX, any national securities exchange or the
Nasdaq, the last reported sale price on such day or, if no sale takes
place on such day, the average of the closing bid and asked prices on
such day, as reported by a reliable quotation source designated by
CharterMac; or (iii) if the Common Shares are not listed or admitted to
trading on the NYSE, the AMEX, any national securities exchange or the
Nasdaq and no such last reported sale price or closing bid and asked
prices are available, the average of the reported high bid and low asked
prices on such day, as reported by a reliable quotation source
designated by CharterMac, or if there shall be no bid and asked prices
on such day, the average of the high bid and low asked prices, as so
reported, on the most recent day (not more than thirty (30) days prior
to the date in question) for which prices have been so reported;
provided, that if there are no bid and asked prices reported during the
thirty (30) days prior to the date in question, the Value
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of the Securities shall be determined by the Independent Trustees (as
defined in the Second Amended and Restated Trust Agreement of
CharterMac) acting in good faith on the basis of such quotations and
other information as they consider, in their reasonable judgment,
appropriate.
5. Exceptions to Restrictions on Transfer and Exchange. Notwithstanding
anything to the contrary contained herein, the restrictions on Transfers
and Exchange of Special Common Units contained in this Lock-Up Agreement
shall not apply to: (i) any Transfer of Securities effected pursuant to
a tender offer or exchange offer made by any Person or Persons (other
than Contributor and its Affiliates) recommended by the Board of
Trustees of CharterMac and any Exchange of Special Common Units to
permit Contributor to participate in such tender; or
(ii) any Transfer of Securities effected pursuant to a merger or
consolidation in which CharterMac is a constituent company, or pursuant
to an exercise of dissenter's rights applicable to any statutory merger
or consolidation in which CharterMac is a constituent company, or any
Exchange of Special Common Units to permit Contributor to participate in
such a transaction; or
(iii) any Transfer of Securities or Exchange of Special Common Units
following a Change in Control of CharterMac. As used in this Section
4(iii), a "Change in Control" shall be deemed to have occurred if: (A)
any "person" or "group" (as such terms are used in Sections 13(d) and
14(d) of the Exchange Act), which is not an Affiliate of CharterMac or
CCC is or becomes the "beneficial owner" (as defined in Rule 13d-3
promulgated under the Exchange Act), directly or indirectly, of
securities of CharterMac representing 50.1% or more of the combined
voting power of CharterMac's then outstanding securities or becomes the
managing member of CCC; (B) any consolidation or merger of CharterMac or
CCC with or into any other corporation or other entity or person (other
than an Affiliate of CharterMac or CCC) in which the shareholders of
CharterMac prior to such consolidation or merger own or owns less than
50.1% of CharterMac's voting power immediately after such consolidation
or merger, or in which the managing member of CCC or another Affiliate
of CharterMac ceases to be the controlling person of the surviving
entity or person (excluding any consolidation or merger effected
exclusively to change the domicile of CharterMac or CCC); (C) a sale of
all or substantially all of the assets of CharterMac or CCC; or (D) a
liquidation or dissolution of CharterMac or CCC.
6. Prohibited Activities. The undersigned shall refrain from engaging in
any hedging or other transaction with respect to the Securities which is
designed, or which reasonably could be expected, to lead to or result in
short sales or any purchase, sale or grant of any right (including,
without limitation, any put or call option) with respect to any of the
Securities or with respect to any security that includes, relates to, or
derives any significant part of its value from the Securities, or any
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similar financial transactions that would likely cause a market
participant to engage in short sales.
7. Stop Transfer Instructions. The undersigned agrees and consents to the
entry of stop transfer instructions with CCC and CharterMac's transfer
agent and registrar against the Exchange of Special Common Units or the
Transfer of the Securities except in compliance with the restrictions
set forth in this Lock-Up Agreement.
8. Remedies for Breach. The undersigned acknowledges that any Exchange of
Special Common Units or Transfer of any Securities in violation of this
Lock-Up Agreement shall be null and void. The undersigned acknowledges
that it is impossible to measure the damages that will accrue to CCC or
CharterMac by reason of a failure of the undersigned to comply with the
provisions of this Lock-Up Agreement. Therefore, if CharterMac and/or
CCC shall institute any action or proceeding to enforce the provisions
hereof, the undersigned agrees that CharterMac and/or CCC shall be
entitled to injunctive relief without the need to prove actual damages,
and the undersigned waives, and shall not allege as a claim or defense
to such action or proceeding that CharterMac and/or CCC has an adequate
remedy at law. CharterMac is an intended third-party beneficiary of this
Lock-Up Agreement and shall have the right, independently or together
with CCC, to enforce any of the provisions hereof.
9. Miscellaneous. The undersigned understands that CCC is relying upon this
Lock-Up Agreement in consummating the transactions contemplated in the
Contribution Agreement. The undersigned further understands that this
Lock-Up Agreement is irrevocable and shall be binding upon the
undersigned's heirs, legal representatives, successors, and assigns.
10. Governing Law. This Lock-Up Agreement shall be governed by the laws of
the State of New York without regard to the conflict of laws principles
thereof.
11. Acknowledgement Agreement. CCC agrees to enter into an agreement with
any permitted pledgee of Securities acknowledging the pledge and the
rights of the pledgee on terms reasonably requested by the pledgee.
Very truly yours,
Related General II L.P.
By: RCMP, Inc., its general partner
By: /s/ Xxxx X. Xxxx
Name: Xxxx X. Xxxx
Title: Vice President
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The undersigned, being the holder(s) (collectively if more than one, the
"Holder") of all of the equity interests (the "Equity Interests") in the above
party to the foregoing Lock-Up Agreement (the "Direct Owner"), agree for the
benefit of CCC and CharterMac that the Holder will not Transfer or permit any
Transfer of the Equity Interests in the Direct Owner in a manner that, by
indirect Transfer, would circumvent the purpose and intent of the restrictions
on Transfer of Securities set forth in the Lock-Up Agreement.
XXXXXXX X. XXXX:
By: /s/ Xxxxxxx Xxxxxxx
Xxxxxxx Xxxxxxx, Esq.
Pursuant to Power of Attorney
Acknowledged and agreed to by:
CharterMac Capital Company, LLC
By: CharterMac Corporation, its Managing Member
By: /s/ Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Chief Operating Officer
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