EXECUTION VERSION
LOCK-UP AGREEMENT
This Lock-up Agreement (this "Agreement"), is dated as of March 18, 2011,
and is made by and among the undersigned parties (each, a "Locked-Up Holder"
and, collectively, the "Locked-Up Holders"), each solely in its capacity
as a beneficial owner (as defined below) of, or as advisor with
discretionary authority with regard to beneficial owner(s) of, certain
7.95% Convertible Senior Notes due 2015 issued by Xxxxx & Xxxxx Company.
RECITALS
A. On March 8, 2011, Xxxxx & Xxxxx Company, a Delaware corporation
(the "Company"), commenced a solicitation of consents (the "Consent
Solicitation") from the holders of its 7.95% Senior Convertible Notes
due 2015 (the "Convertible Notes"). The Company is seeking consents to
proposed amendments to certain provisions in the Indenture, dated as of
May 7, 2010 (the "Indenture"), between the Company, as issuer, and U.S.
Bank National Association, as trustee (the "Trustee"), which governs the
Convertible Notes. The Consent Solicitation will expire at 5:00 p.m.,
New York City time, on March 21, 2011 (the "Expiration Date"), unless
extended by the Company.
B. The terms and conditions of the Consent Solicitation are described
in the Consent Solicitation Statement, dated March 8, 2011, and related
Letter of Consent distributed to the holders of the Convertible Notes
(collectively, the "Consent Solicitation Materials"). Pursuant to the
Consent Solicitation Materials, the Company proposes to amend certain
provisions set forth in Section 9.01 (Events of Default) of the Indenture,
specifically Sections 9.01(h), (i) and (j) of the Indenture, to provide that
Daymark Realty Advisors, Inc. and NNN Realty Advisors, Inc., subsidiaries of
the Company (and each of such subsidiaries' direct and indirect subsidiaries)
would be excluded from the determination of an event of default under such
provisions of the Indenture. The proposed amendments require the consent
of the holders of a majority-in-interest of the principal amount of the
Convertible Notes outstanding as of March 7, 2011 (the "Required Holders").
AGREEMENT
NOW, THEREFORE, in consideration of the promises and the mutual covenants
and agreements set forth herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Locked-Up
Holders hereby agree as follows:
1. Agreement. Solely in its capacity as a beneficial owner of, or as
advisor with discretionary authority with regard to beneficial owner(s) of,
Convertible Notes, each Locked-Up Holder covenants and agrees that during
the term of this Agreement, (a) it will not deliver consents to the proposed
amendments in the Consent Solicitation (and as described in the Consent
Solicitation Materials) with respect to such Locked-Up Holder's Convertible
Notes beneficially owned by it (whether beneficially owned by it on the date
hereof or with respect to which beneficial ownership is acquired by it after
the date hereof (such Convertible Notes with respect to which beneficial
ownership is acquired after the date hereof, the "Future Convertible Notes"))
and (b) it will take all necessary action to achieve the foregoing.
2. Sale/Acquisition.
(a) For a period commencing with the date hereof until the
earlier of the termination of this Agreement pursuant to Section 4
hereof, each Locked-Up Holder hereby agrees not to sell, assign,
transfer, hypothecate or otherwise dispose of, directly or
indirectly, (i) any Convertible Notes or (ii) any option,
interest in or right to acquire any Convertible Notes, in
either case unless the transferee thereof agrees in writing
to be bound by the terms of this Agreement by executing and
delivering to all Locked-Up Holders a joinder substantially
in the form attached hereto as Annex A. In the event any
Locked-Up Holder affects any of the transactions described
in the foregoing clauses (i) and (ii), it shall give written
notice to all Locked-Up Holders no later than the first business
day after giving effect to any such transaction. This Agreement
shall in no way be construed to preclude the Locked-Up Holders
from acquiring Future Convertible Notes, Common Shares or
Preferred Shares or any interest therein; provided, that any
Future Convertible Notes so acquired shall automatically by
deemed to be subject to the terms and conditions of this
Agreement for so long as this Agreement remains in effect;
provided further, that a Locked-Up Holder shall give written
notice to all Locked-Up Holders no later than the first
business day after acquiring beneficial ownership of any
such Future Convertible Notes, Common Shares or Preferred Shares.
(b) Each Locked-Up Holder further agrees that, without the prior
written consent of the Requisite Locked-Up Holders it shall not
enter into any agreement, arrangement or understanding with any
person for the purpose of holding, voting, disposing or consenting
with respect to any securities of the Company, or derivative
instruments with respect to securities of theCompany; provided,
however, any Locked-Up Holder may, or may cause its affiliates
and associates to enter into any agreement, arrangement
or understanding with any person for the purpose of acquiring any
securities of the Company, or derivative instruments with respect to
securities of the Company; provided, further, that any Locked-Up
Holder may, or may cause its affiliates and associates to, enter into
any agreement, arrangement or understanding with the Company (or any
subsidiary, affiliate, division or other part of the Company) not
related to the Convertible Notes. If a Locked-Up Holder shall
enter into an agreement, arrangement or understanding to affect
any of the foregoing, the Locked-Up Holder shall give written notice
to all Locked-Up Holders no later than the first business day after
entering into any such agreement, arrangement or understanding.
3. Ownership and Authority; Additional Information. Each
Locked-Up Holder shall deliver to all Locked-Up Holders a beneficial
ownership certificate, substantially in the form attached hereto as
Annex B (the "Ownership Certificate"), promptly upon any change
(by acquisition, sale or otherwise) of its beneficial ownership of
Convertible Notes, Common Shares or Preferred Shares. In addition,
each Locked-Up Holder agrees to promptly furnish to all Locked-Up
Holders (a) any information necessary or appropriate for the making
of any required or advisable public filing or amendment thereto
and (b) any other information supplementing information contained
in any publicly filed statement or amendment thereto as is
necessary in order to make the statements contained in such
publicly filed statement or amendment not misleading.
4. Conditions; Termination.
(a) This Agreement shall automatically terminate upon the earlier of
(i) April 29, 2011 and (ii) three business days following the written notice
of the Requisite Locked-Up Holders of the termination of this Agreement; and
(b) In the event of termination of this Agreement pursuant to this Section
4, the obligations of the Locked-Up Holders hereunder shall cease, and no party
shall have any liability to any other party hereunder; provided, however, that
no such termination shall relieve any party of liability for any willful and
material breach of this Agreement prior to the effectiveness of such
termination.
5. Representations and Warranties. Each of the Locked-Up Holders
hereby represents and warrants as to itself, that the following statements
are true, correct and complete, as of the date hereof:
(a) Lawful and Beneficial Ownership. It is either the lawful and
beneficial owner of, or has discretionary authority with regard to, the
Company's securities and swaps or other derivative transactions relating to
the Company securities set forth on the signature page hereto.
(b) Securities Laws. Neither it nor its affiliates (i) is the beneficial
owner of, or has discretionary authority with regard to, any securities of the
Company or is a party to any swaps or other derivative transactions relating
to securities of the Company, other than as described in the signature page
hereto or (ii) has any agreement, arrangement or understanding with any
person for the purpose of acquiring, holding, voting or disposing of any
securities of the Company.
(c) Power and Authority. It has all requisite power and authority to
enter into this Agreement and to perform its respective obligations under
this Agreement.
(d) Authorization. The execution and delivery of thisAgreement and
the performance of its obligations hereunder have been duly authorized by
all necessary action on its part.
6. Acknowledgement. Each Locked-Up Holder agrees that it shall be
responsible for compliance with any obligations such Locked-Up Holder may
have pursuant to Section 13(d) or Section 16 of the Exchange Act, if any,
to the extent it may be deemed part of a "Group" within the meaning of
Rule 13d-5(b) under the Exchange Act or otherwise relating to its beneficial
ownership of securities of the Company (including, without limitation, making
all filings, if any, required to be made by it on Schedule 13D and Forms
3, 4 and 5), it being agreed that no Locked-Up Holder shall be responsible
for any such non-compliance by any other Locked-Up Holder other
than itself.
7. Effectiveness. This Agreement shall not become effective and binding
on the parties hereto unless and until counterpart signature pages hereto
shall have been executed and delivered by the parties hereto and it is
executed by beneficial owners of more than one-half of the aggregate
outstanding Convertible Notes.
8. Miscellaneous.
(a) Additional Signatories. Additional beneficial owners of Convertible
Notes, with the prior consent of the Requisite Locked-Up Holders, may join
and be bound by all of the terms of this Agreement by executing and delivering
to all Locked-Up Holders a joinder substantially in the form attached hereto
as Annex A.
(b) Definitions. As used in this Agreement, the following terms shall have
the following meanings (such meanings to be equally applicable to both the
singular and plural forms of the terms defined):
(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 Securities Exchange Act of 1934,
as amended (the "Exchange Act").
(ii) "Common Shares" shall mean shares of the Company's Common Stock, $0.01
par value.
(iii) "Preferred Shares" shall mean shares of the Company's 12% cumulative
participating perpetual convertible preferred stock, par value $0.01 per share.
(iv) "Requisite Locked-Up Holders" shall mean Locked-Up Holders representing
more than one-half of the Locked-Up Holders party hereto.
(v) "Subject Convertible Notes" shall mean the Convertible Notes beneficially
owned by the Locked-Up Holders on the date hereof and any Future Convertible
Notes.
9. Amendments. This Agreement may not be modified or amended except in a
writing signed by the Requisite Locked-Up Holders; provided, however, the
obligations of each party to this Agreement, including, without limitation,
with respect to the term of this Agreement under Section 4(a) hereto, may
not be materially increased without the consent of all of the Locked-Up
Holders.
10. Governing Law; Jurisdiction. This Agreement shall be construed in
accordance with, and this Agreement shall be governed by, the laws of the State
of New York, without regard to any conflicts of law provision which would
require the application of the law of any other jurisdiction. By its
execution and delivery of this Agreement, each of the Locked-Up Holders
hereby irrevocably and unconditionally agrees for itself that any legal
action, suit or proceeding against it with respect to any matter under
or arising out of or in connection with this Agreement or for recognition
or enforcement of any judgment in any such action, suit or proceeding,
may be brought in any federal or state court of competent
jurisdiction in the Borough of Manhattan of The City of New York.
By execution and delivery of this Agreement, each Locked-Up Holder
hereby irrevocably accepts and submits itself to the exclusive
jurisdiction of any such court, generally and unconditionally,
with respect to any such action, suit or proceeding and hereby
waives any defense of forum non conveniens or based upon venue
if such action, suit or proceeding is brought in accordance
with this provision.
11. Headings. The headings of the Sections, paragraphs and
subsections of this Agreement are inserted for convenience only
and shall not affect the interpretation hereof.
12. Limitation on Assignment; Successors and Permitted Assigns.
None of the parties hereto may assign any of its respective rights or
obligations under this Agreement. This Agreement is intended to
bind and inure to the benefit of the parties and their respective
successors, heirs, executors, administrators and representatives.
13. Notice. Any notices or other communications to one or
more Locked-Up Holders required or permitted hereunder shall be in
writing, and shall be sufficiently given if made by hand delivery,
by telecopier or registered or certified mail, postage prepaid,
return receipt requested, at the names and addresses on the applicable
signature page or pages hereto. Any notice or communication to any
party shall be deemed to have been given or made as of the date so
delivered, if personally delivered; on the date actually received
if sent by registered or certified mail, postage prepaid; and when
receipt is acknowledged, if telecopied.
14. No Agency or Advisory Relationship. Except as expressly
provided herein, each Locked-Up Holder is acting independently of
the others with respect to its investment in securities of the
Company and no Locked-Up Holder has the authority to represent
or bind any other Locked-Up Holder. Each Locked-Up Holder (either
itself or together with its investment manager) is a sophisticated
financial investorthat has conducted and will continue to conduct
its own investigation into the affairs of the Company as it may
deem necessary for the purposes of its own investment, and no
Locked-Up Holder is providing any other Locked-Up Holder with
investment, tax, legal or other advice. No Locked-Up Holder
is a fiduciary of any other Locked-Up Holder.
15. Counterparts. This Agreement may be executed in
one or more counterparts,each of which shall be deemed an
original and all of which shall constitute one and the same
Agreement. Faxed or PDF signatures shall be valid and binding for
all purposes.
16. Coordination of Public Statements. Each Locked-Up Holder agrees
that it shall consult with the other Locked-Up Holders prior to
making any public announcement concerning the Company and/or its
investment in the Company and, where the Requisite Locked-Up Holders
object to all or any part of a public announcement, not make such
public announcement except to the extent it is believed in good faith,
based on the advice of counsel, to be required by applicable law
or regulation. For the avoidance of doubt, a Locked-Up Holder will
not need the permission of any other Locked-Up Holder to make a filing
under Sections 13(d) or 16 of the Exchange Act, and will have no liability
to any other Locked-Up Holder for making any such filing.
17. Expenses. Locked-Up Holders party hereto may from time
to time unanimously agree in writing that certain expenses to be
incurred in connection with this Agreement and the Locked-Up Holders'
respective investments in the Convertible Notes shall be
"Joint Expenses" for purposes of this Section 17. Unless otherwise
agreed, any Joint Expenses will be for the ratable account of the
Locked-Up Holders in accordance with the percentage of the Subject
Convertible Notes beneficially owned by them as of the date of the
designation of such expenses as Joint Expenses (disregarding, for this
purpose, any shares held by another Locked-Up Holder that may be
deemed to be beneficially owned solely by virtue of
the Locked-Up Holders being deemed a "group" within the meaning of Rule
13d-5(b) under the Exchange Act). Amounts incurred by a Locked-Up
Holder with respect to Joint Expenses in excess of its ratable share
will be reimbursed by the other Locked-Up Holders on demand upon
presentation of appropriate supporting documentation. Other than
Joint Expenses, each Locked-Up Holder shall bear its own costs and
expenses in connection with this Agreement and its investment in the
Company.
18. Liability. No Locked-Up Holder nor any of its affiliates,
or any of their respective partners, members, employees, counsel,
agents or representatives shall be liable to any other Locked-Up
Holder or its affiliates, in each case for any loss, liability,
damage or expense arising out of or in connection with this Agreement or
any Schedule 13D, or amendment thereto, filed by any Locked-Up Holder or
its affiliates, or the actions or transactions contemplated hereby or
thereby, except to the extent such loss, liability, damage or expense
is caused by such party's actual and material breach of the express
provisions of this Agreement, gross negligence, fraud, bad faith or
willful misconduct.
19. No Third Party Beneficiaries. Unless expressly stated herein,
this Agreement shall be solely for the benefit of the parties hereto
and no other person or entity.
20. Specific Performance. It is understood and agreed by
each of the parties hereto that money damages would not be a sufficient
remedy for any breach of this Agreement by any party and each non-breaching
party shall be entitled to specific performance and injunctive or other
equitable relief as a remedy for any such breach.
21. Further Acknowledgement. The parties to this Agreement agree and
acknowledge that certain Locked-Up Holders are executing this Agreement as
investment advisors for, and on behalf of, certain investment funds identified
on such Locked-Up Holders' signature pages. Notwithstanding the foregoing,
by executing this Agreement, each such Locked-Up Holder executing this Agreement
in such capacity further represents and warrants to the other Locked-Up Holders
that (i) it has the requisite power and authority to agree to all of the
matters set forth in this Agreement with respect to the Company securities
such Locked-Up Holderbeneficially owns (including those set forth on its
signature page), (ii) it has the full authority on behalf of all such
funds to vote, transfer and hold all the Company securities such
Locked-Up Holder beneficially owns, and (iii) it has all requisite power
and authority to enter into this Agreement and to perform its respective
obligations under, this Agreement, on behalf of each such fund.
* * * * *
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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed and delivered by its duly authorized officer as of the date first
above written.
LOCKED-UP HOLDER
By:
Name:
Title:
Address:
City/State/Zip:
Country:
Telecopy:
Convertible Notes Beneficially Owned by Such Locked-Up Holder:
Preferred Shares Beneficially Owned by Such Locked-Up Holder:
Common Shares Beneficially Owned by Such Locked-Up Holder:
ANNEX A
This Joinder to the Lock-Up Agreement, dated as of March __, 2011,
by and among the Locked-Up Holders signatory thereto (the "Agreement"),
is executed and delivered by _________________ (the "Joining Party") as
of __________, 2011. Each capitalized term used herein but not otherwise
defined shall have the meaning set forth in the Agreement.
1. Agreement to be Bound. The Joining Party hereby agrees to join
and be bound by all of the terms of the Agreement. The Joining Party
shall hereafter be deemed to be a "Locked-Up Holder" for all purposes
under the Agreement.
2. Representations and Warranties. The Joining Party hereby makes,
as of the date hereof, the representations and warranties of the Locked-Up
Holders set forth in the Agreement in Sections 1 and 5 thereof.
3. Governing Law. This Joinder shall be governed by and construed
in accordance with the internal laws of the State of New York, without
regard to any conflicts of law provisions which would require the
application of the law of any other jurisdiction.
* * * * *
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IN WITNESS WHEREOF, the Joining Party has caused this Joinder to be
executed as of the date first written above.
JOINING PARTY
____________________________________
By:
Name:
Title:
Address: _____________________________
City/State/Zip:_________________________
Country:______________________________
Telecopy:_____________________________
Convertible Notes Beneficially Owned by Such Joining Party:
Preferred Shares Beneficially Owned by Such Joining Party:
Common Shares Beneficially Owned by Such Joining Party:
ANNEX B
OWNERSHIP CERTIFICATE
This Ownership Certificate, dated as of , 2011 is being delivered
pursuant to Section 3 of the Lock-Up Agreement (the "Agreement"),
dated as of March __, 2011, by and among the Locked-Up Holders signatory
thereto. The undersigned, on behalf of itself, certifies, represents and
warrants that, as of the date hereof, it has acquired or transferred and
is the beneficial owner of Convertible Notes, Preferred Shares and Common
Shares of the Company as follows:
Convertible Notes Preferred Shares Common Shares
Previously Owned
Acquired
Transferred
Current Ownership
The undersigned, on behalf of itself, further certifies, represents and
warrants that, as of the date hereof, it does not beneficially own any
other securities of the Company other than as set forth herein, and
that it is not a party to any swaps or other derivative transactions
relating to Convertible Notes, Preferred Shares or Common Shares of
the Company, except as disclosed on Schedule 1 hereto.
* * * * *
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IN WITNESS WHEREOF, the undersigned has caused this Ownership
Certificate to be executed and delivered by its duly authorized
officer as of the date first above written.
LOCKED-UP HOLDER
____________________________________
By:
Name:
Title:
Address: _____________________________
City/State/Zip:_________________________
Country:______________________________
Telecopy:_____________________________
SCHEDULE 1
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