Exhibit 99.15
EXECUTION COPY
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November 17, 2003
CharterMac Capital Company, LLC
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Lock-Up Agreement
Ladies and Gentlemen:
Reference is hereby made to (i) that 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. Until November 17, 2004, except as set forth in this Lock-Up
Agreement, the undersigned shall not, 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") any of the Securities without the prior written consent
of CCC, which shall be granted or withheld in the sole discretion of
CCC. From November 17, 2004 until November 17, 2005,
except as set forth in this Lock-Up Agreement, the undersigned may not
Transfer more than 20% of the Securities without the prior written
consent of CCC, which shall be granted or withheld in the sole
discretion of CCC. From November 17, 2005 until November 17, 2006,
except as set forth in this Lock-Up Agreement, the undersigned may not
Transfer more than 60% of the Securities without the prior written
consent of CCC, which shall be granted or withheld in the sole
discretion of CCC. From and after November 17, 2006 there shall be no
restrictions on Transfer pursuant to this Section 1.
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
November 17, 2004; 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 3; 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. Notwithstanding the provisions of
Section 1 hereof, 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. Permitted Transfers. (a) Notwithstanding the provisions of Sections 1
and 2 hereof, the undersigned may from time to time pledge Securities
which are subject to the restrictions on Transfer and/or exchange
contained in Sections 1 and 2 in connection with a recourse loan or
loans of which the aggregate principal amount, as of the date of any
such pledge or any additional advance secured by such pledge, shall not
exceed 40% of the Value (as defined below) as of such date of the
Securities then subject to pledge. 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 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
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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 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.
(b) The provisions of Sections 1 and 4 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) Xxxxxx X. Xxxxxx
(the "Principal"); (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 the
Principal 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 Principal
and/or the individuals listed in (ii) above; (iv) in case of the death
of any of the foregoing individuals, a transfer by will or by the laws
of the intestate succession to executors, administrators, testamentary
trustees, legatees or beneficiaries; or (v) trusts, the only
beneficiaries of which are listed in (i), (ii), (iii); (iv) and/or are
charitable organizations.
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(c) Notwithstanding anything to the contrary in this Lock-Up
Agreement, the restrictions on Transfers and Exchange of Special Common
Units contained in Sections 1 and 2 of this Lock-Up Agreement shall
terminate and be of no further force and effect upon the occurrence of
either of the following events: (i) termination of the Principal's
employment by CCC without Cause (as defined in the Principal's
employment agreement dated as of the date hereof (the "Employment
Agreement")), (ii) termination of the Principal's employment by the
Principal for Good Reason (as defined in the Principal's Employment
Agreement) or (iii) the Principal's death or Disability (as defined in
the Principal's Employment Agreement).
(d) Notwithstanding anything to the contrary contained in this
Lock-Up Agreement, 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 3(d)(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
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CharterMac or CCC; or (D) a liquidation or dissolution of CharterMac or
CCC; provided, that no change in control shall be deemed to occur with
respect to any of the above-referenced events involving CCC if after
such event Principal continues to be an employee of a company that is an
Affiliate of CharterMac and continues to have duties and functions and
compensation consistent with those referenced in his Employment
Agreement with RCC.
4. Additional 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 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.
5. 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 Transfer of the Securities except in
compliance with the restrictions set forth in this Lock-Up Agreement.
6. Remedies for Breach. The undersigned acknowledges that any 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.
7. 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. In
connection with any Transfer pursuant to this Lock-Up Agreement, the
transferee shall enter into such agreements and documentation as
required pursuant to the Amended and Restated Operating Agreement of CCC
(as amended from time to time).
8. 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.
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9. 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,
SJB ASSOCIATES L.P.
By: SJB Associates, Inc., its general partner
By: /s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
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.
/s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
Acknowledged and agreed to by:
CharterMac Capital Company, LLC
By: CharterMac Corporation,
its Managing Member
By:/s/ Xxxx X. Xxxxxx
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Name: Xxxx X. Xxxxxx
Title: Chief Operating Officer
