Exhibit 10.11
Xxxxxx X. Xxxxxxx, Xx.
The World Trade Center--Baltimore
28th Floor
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000
December 29, 1997
Xxxxxxx Holdings, Inc.
The Xxxxxxx Co.
The World Trade Center--Baltimore
28th Floor
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Re: Xxxxxxx Holdings, Inc.
Corporate Separation Lock-up Agreement
Ladies and Gentlemen:
In connection with efforts to raise capital for the business operations
of The Xxxxxxx Co., a Maryland corporation ("CCO") and Xxxxxxx Capital
Management, Inc., a Washington, DC corporation ("CCM"): (i) CCO and its
parent, Xxxxxxx Holdings, Inc., a Maryland corporation ("CHI") entered into
a merger transaction (the "Merger") effective December 29, 1997, pursuant
to a plan of merger (the "Plan") and articles of merger approved by the
Board of Directors and stockholders of CHI whereby the former stockholders of
CCO became stockholders of CHI and CCO became a wholly-owned subsidiary of
CHI; (ii) effective January 8, 1998, CCO transferred the outstanding shares
of its wholly-owned subsidiaries CCM and the Xxxxxxx Insurance Agency
Incorporated, a Maryland corporation ("CIA") to two newly-formed,
wholly-owned Maryland corporation subsidiaries of CCO, Xxxxxxx Capital
Holdings, Inc. ("CCH") and Xxxxxxx Insurance Holdings, Inc. ("CIH");
(iii) CHI currently intends to undertake an initial public offering of its
equity securities (the "IPO"); (iv) immediately prior to the closing of the
IPO, CCO currently intends to distribute all of the outstanding shares of
common stock, par value $0.001 per share, of CCH ("Common Stock of CCH")
and common stock, par value $0.001 per share, of CIH ("Common Stock of
CIH") to CHI; and (v) immediately upon the receipt of the shares of Common
Stock of CCH and CIH by CHI, CHI currently intends to distribute one share of
Common Stock of CIH and one share of Common Stock of CCH to each CHI
stockholder for each share of common stock, par value $0.001 per share, of
CHI ("Common Stock of CHI") held by such CHI stockholder as of the record
date for such distribution as set by the Board of Directors of CHI (the
transactions set forth in subparagraphs (iv) and (v) are hereinafter referred
to as the "Separation"). The Separation is intended to be a tax-free
spin-off transaction pursuant to Section 355 of the Internal Revenue Code.
Each of the transactions set forth above is more fully described in The
Xxxxxxx Co. Information Statement dated December 23, 1997 (the "Information
Statement").
Xxxxxxx Holdings, Inc.
The Xxxxxxx Co.
December 29, 1997
Page 2
The undersigned understands, as set forth in the Plan and the Information
Statement, that the tax-free nature of the Separation may be threatened by
any transfer of shares of Common Stock of CHI received by the former
stockholders of CCO in the Merger (the "Shares") prior to June 28, 1999.
Accordingly, in order to facilitate the consummation of the Separation and
for other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the undersigned agrees that, without the prior
written consent of CHI, the undersigned will not (i) directly or indirectly,
offer, sell, pledge, contract to sell, grant any option to purchase or
otherwise dispose of any of the Shares beneficially owned or otherwise held
by the undersigned (including, without limitation, Shares which may be deemed
to be beneficially owned by the undersigned in accordance with the rules and
regulations of the Securities and Exchange Commission and shares of Common
Stock of CHI which may be issued upon exercise of a stock option or warrant)
or any securities convertible into, derivative of or exercisable or
exchangeable for such Common Stock of CHI for a period commencing on December
29, 1997 and ending on June 28, 1999; and (ii) notwithstanding clause (i)
above, until June 28, 1999, directly or indirectly, sell short any equity
securities of CHI.
The undersigned agrees that CHI may, and that the undersigned will, with
respect to any of the Shares for which the undersigned is the record holder,
cause the transfer agent for CHI to note stop transfer instructions with
respect to the Shares on the transfer books and records of CHI.
The undersigned understands that CHI and CCO will proceed with the
Separation in reliance on this agreement. This agreement shall be governed by
and construed in accordance with the internal laws (and not the laws
pertaining to conflicts of laws) of the State of Maryland.
The undersigned understands that CHI and CCO will proceed with the
Separation in reliance on this agreement and that nothing in this agreement
obligates CHI or CCO to proceed with the Separation. All authority herein
conferred or agreed to be conferred shall survive the death or incapacity of
the undersigned and any obligations of the undersigned shall be binding upon
the estate, heirs, personal representatives, successors and assigns of the
undersigned.
Very truly yours,
/s/ Xxxxxx X. Xxxxxxx, Xx.
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Signature of Stockholder
Xxxxxx X. Xxxxxxx, Xx.
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Printed Name of Stockholder
