VOTING AGREEMENT
Exhibit 2.7
EXECUTION VERSION
VOTING
AGREEMENT, dated as of September 30, 2008 (this “Agreement”), among Xxxxxx
Industries, Inc., a Delaware corporation (“Xxxxxx”), JWH Holding Company, LLC, a Delaware
limited liability company (“JWH”), and each of the stockholders of Hanover Capital Mortgage
Holdings, Inc., a Maryland corporation (“Hanover”), signatory hereto (each, a
“Stockholder” and, collectively, the “Stockholders”), and, solely for the purposes
of Section 5.2 hereof, Hanover.
W I T N E S S E T H:
WHEREAS, concurrently with the execution of this Agreement, Xxxxxx, JWH, and Hanover are
entering into an Agreement and Plan of Merger, dated as of the date hereof (as amended,
supplemented, restated or otherwise modified from time to time, the “Merger Agreement”)
pursuant to which, among other things, JWH will merge into Hanover (the “Merger”), the
separate existence of JWH shall cease and Hanover shall continue as the surviving corporation (the
“Surviving Corporation”) and, except as otherwise provided in the Merger Agreement, shares
of common stock of Hanover, par value $0.01 per share (the “Common Stock”), issued and
outstanding immediately prior to the Effective Time shall be combined into fully paid and
non-assessable shares of common stock of the Surviving Corporation, par value $0.01 per share (the
“Surviving Corporation Common Stock”), at the rate specified in the Merger Agreement.
WHEREAS, as a condition and inducement to Xxxxxx and JWH entering into the Merger Agreement,
Xxxxxx and JWH have required that the Stockholders agree, and the Stockholders have agreed, to
enter into this Agreement and perform the covenants and obligations with respect to the Covered
Shares (as hereinafter defined) set forth herein.
NOW THEREFORE, in consideration of the foregoing and the mutual representations, warranties,
covenants and agreements herein contained, and intending to be legally bound hereby, the parties
hereto agree as follows:
ARTICLE I
GENERAL
1.1. Defined Terms. The following capitalized terms, as used in this Agreement,
shall have the meanings set forth below. Capitalized terms used but not otherwise defined herein
shall have the meanings ascribed thereto in the Merger Agreement.
“Beneficial Ownership” by a Person of any securities includes ownership by any Person
who, directly or indirectly, through any contract, arrangement, understanding, relationship or
otherwise, has or shares (i) voting power which includes the power to vote, or to direct the voting
of, such security; and/or (ii) investment power which includes the power to
dispose, or to direct
the disposition, of such security; and shall otherwise be interpreted in accordance with the term
“beneficial ownership” as defined in Rule 13d-3 adopted by the
Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended;
provided that for purposes of determining Beneficial Ownership, a Person shall be deemed to
be the Beneficial Owner of any securities which may be acquired by such Person pursuant to any
agreement, arrangement or understanding or upon the exercise of conversion rights, exchange rights,
warrants or options, or otherwise (irrespective of whether the right to acquire such securities is
exercisable immediately or only after the passage of time, including the passage of time in excess
of 60 days, the satisfaction of any conditions, the occurrence of any event or any combination of
the foregoing). The terms “Beneficially Own” and “Beneficially Owned” shall have a
correlative meaning.
“Covered Shares” means, with respect to each Stockholder, such Stockholder’s Existing
Shares, together with any shares of Common Stock or other voting stock of Hanover and any
securities convertible into or exercisable or exchangeable for shares of Common Stock or other
voting stock of Hanover, in each case that such Stockholder acquires Beneficial Ownership of on or
after the date hereof.
“Encumbrance” means any security interest, pledge, mortgage, lien (statutory or
other), charge, option to purchase, lease or other right to acquire any interest or any claim,
restriction, covenant, title defect, hypothecation, assignment, deposit arrangement or other
encumbrance of any kind or any preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including any conditional sale or other title
retention agreement).
“Existing Shares” means, with respect to each Stockholder, any shares of Common Stock
Beneficially Owned or owned of record by such Stockholder.
“Person” means any individual, corporation, limited liability company, limited or
general partnership, joint venture, association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision thereof or any other entity, or any
group comprised of two or more of the foregoing.
“Representatives” means the officers, directors, employees, agents, advisors and
Affiliates of a Person.
“Transfer” means, directly or indirectly, to sell, transfer, assign, pledge, encumber,
hypothecate or similarly dispose of (by merger, by testamentary disposition, by operation of law or
otherwise), either voluntarily or involuntarily, or to enter into any contract, option or other
arrangement or understanding with respect to the sale, transfer, assignment, pledge, Encumbrance,
hypothecation or similar disposition of (by merger, by testamentary disposition, by operation of
law or otherwise).
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ARTICLE II
VOTING
2.1. Agreement to Vote. At the Hanover Stockholders Meeting or any other meeting of
the Hanover Stockholders, however called, including any adjournment or postponement thereof,
or in connection with any written consent of the Hanover Stockholders, each Stockholder shall,
in each case to the fullest extent that such Stockholder’s Covered Shares are entitled to vote
thereon or consent thereto:
(a) appear at each such meeting or otherwise cause the Covered Shares to be duly counted as
present thereat for purposes of calculating a quorum; and
(b) vote (or cause to be voted), in person or by proxy, or deliver (or cause to be delivered)
a written consent covering, all of such Stockholder’s Covered Shares (i) in favor of proposals to
approve (w) the Merger Agreement and the Merger and the other transactions contemplated by the
Merger Agreement, including the amendment and restatement of the Charter as set forth in the
Amended and Restated Charter and the Merger Share Issuance, (x) the Exchange Share Issuance, (y)
the Plan Amendment and (z) any other action reasonably requested by Xxxxxx in furtherance of any of
the foregoing; (ii) against any action, proposal, transaction or agreement that would reasonably be
expected to result in a breach in any respect of any covenant, representation or warranty or any
other obligation or agreement of Hanover contained in the Merger Agreement, or of any Stockholder
contained in this Agreement; and (iii) against any Hanover Acquisition Proposal or any other
action, agreement or transaction that is intended, or could reasonably be expected, to materially
impede, interfere with, delay, postpone, discourage or adversely affect the Merger or any of the
other transactions contemplated by the Merger Agreement or this Agreement or the performance by
such Stockholder of its obligations under this Agreement, including, without limitation: (A) any
extraordinary corporate transaction, such as a merger, consolidation or other business combination
involving Hanover or its Subsidiaries (other than the Merger); (B) a sale, lease or transfer of a
material amount of assets of Hanover or any of its Subsidiaries or a reorganization,
recapitalization or liquidation of Hanover or any of its Subsidiaries except as contemplated by the
Merger Agreement; (C) an election of new members to the board of directors of Hanover, other than
nominees for election as directors of Hanover who are serving as directors of Hanover on the date
of this Agreement, who are nominated by Hanover’s Board of Directors or who are expressly
contemplated by the Merger Agreement in connection with the consummation of the Merger; (D) any
material change in the present capitalization or dividend policy of Hanover or any amendment or
other change to Hanover’s charter or Bylaws, except as specified in the Amended and Restated
Charter and the Amended and Restated Bylaws or if approved by Xxxxxx in writing; or (E) any other
material change in Hanover’s corporate structure or business except as contemplated by the Merger
Agreement.
2.2. No Inconsistent Agreements. Each Stockholder hereby represents, warrants,
covenants and agrees that, except for this Agreement, such Stockholder (a) has not entered into,
and shall not enter into at any time while this Agreement remains in effect, any voting agreement
or voting trust with respect to such Stockholder’s Covered Shares and (b) has not granted, and
shall not grant at any time while this Agreement remains in effect, a proxy, consent or power of
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attorney with respect to such Stockholder’s Covered Shares that is inconsistent with this
Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS
3.1. Representations and Warranties of the Stockholders. Each Stockholder hereby
severally, and not jointly, represents and warrants to Xxxxxx and JWH as follows:
(a) Organization; Authorization; Validity of Agreement; Necessary Action. Such Stockholder
has the legal capacity and all requisite power and authority to enter into this Agreement, to
perform its obligations hereunder and to consummate the transactions contemplated hereby. This
Agreement has been duly executed and delivered by each Stockholder and, assuming this Agreement
constitutes a valid and binding obligation of Xxxxxx and JWH, constitutes a valid and binding
obligation of such Stockholder, enforceable against it in accordance with its terms, except as
enforcement may be limited by general principles of equity, whether applied in a court of law or a
court of equity, and by bankruptcy, insolvency and similar laws affecting creditors’ rights and
remedies generally.
(b) Ownership. Such Stockholder Beneficially Owns or is the record holder of the
number of Existing Shares set forth below its name on the signature page hereto, and such
Stockholder’s Existing Shares are, and all of such Stockholder’s Covered Shares owned from the date
hereof through and on the Closing Date will be, Beneficially Owned or owned of record by such
Stockholder. Such Stockholder has good and marketable title to such Stockholder’s Existing Shares,
free and clear of any Encumbrances. As of the date hereof, such Stockholder’s Existing Shares
constitute all of the shares of Common Stock Beneficially Owned or owned of record by such
Stockholder. Such Stockholder has and will have at all times through the Closing Date sole voting
power, sole power of disposition, sole power to issue instructions with respect to the matters set
forth in Article II hereof, and sole power to agree to all of the matters set forth in this
Agreement, in each case with respect to all of such Stockholder’s Existing Shares and with respect
to all of the Covered Shares owned of record or Beneficially Owned by such Stockholder at all times
through the Closing Date.
ARTICLE IV
OTHER COVENANTS
4.1. Prohibition on Transfers, Other Actions. Each Stockholder shall not, subject
to the continuation of any Encumbrances on Covered Shares existing as of the date hereof, (i)
Transfer any of such Stockholder’s Covered Shares or any interest therein, except, in the case of
individual stockholders, for Transfers to charities, charitable trusts or other charitable
organizations under Section 501(c)(3) of the Internal Revenue Code, lineal trust or other entity
for the benefit of one or more of the foregoing persons, provided that the transferee agrees to be
bound by the terms of this Voting Agreement, (ii) enter into any agreement, arrangement or
understanding with any Person, or take any other action, that violates or conflicts with or would
reasonably be expected to violate or conflict with, or result in or give rise to a violation of or
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conflict with, any of such Stockholder’s representations, warranties, covenants and obligations
under this Agreement or (iii) take any action that could restrict or otherwise affect such
Stockholder’s legal power, authority or right to comply with and perform any of such
Stockholder’s covenants and obligations under this Agreement.
4.2. Stock Dividends, etc. In the event of a stock split, stock dividend or
distribution, or any change in the Common Stock by reason of any split-up, reverse stock split,
recapitalization, combination, reclassification, exchange of shares or the like, the terms
“Existing Shares” and “Covered Shares” shall be deemed to refer to and include such shares as well
as any and all securities into which or for which any or all of such shares may be changed or
exchanged or which are issued or received in such transaction.
4.3. Further Assurances. From time to time, at Walter’s request and without further
consideration, each Stockholder shall execute and deliver such additional documents and take all
such further action as may be reasonably necessary or desirable to effect the actions and
consummate the transactions contemplated by this Agreement.
ARTICLE V
MISCELLANEOUS
5.1. Termination. This Agreement shall terminate and be of no further force or
effect upon the earlier to occur of (i) the Closing, (ii) the date of termination of the Merger
Agreement in accordance with its terms and (iii) solely with respect to Xxxxxx Trading Company or
Ramat Securities LTD, the date of termination of the Exchange Agreement by and among Hanover,
Xxxxxx Trading Company and Ramat Securities LTD, dated as of the date hereof, in accordance with
its terms. Nothing in this Section 5.1 shall relieve or otherwise limit any party of liability for
willful breach of this Agreement.
5.2. Stop Transfer Order. In furtherance of this Agreement, each Stockholder hereby
authorizes and instructs Hanover to instruct its transfer agent to enter a stop transfer order with
respect to all of such Stockholder’s Covered Shares. As promptly as practicable after the date of
this Agreement Hanover shall give such stop transfer instructions to the transfer agent for the
Common Stock. Notwithstanding the foregoing, and without limiting the obligations of the
Stockholders pursuant to Section 4.1 hereof, to the extent that Hanover or its transfer agent
determines that entry or enforcement of any stop transfer order is not reasonably practicable in
respect of Covered Shares that are registered on behalf of any Stockholder in street name, Hanover
shall not be required to instruct its transfer agent to enter any such stop transfer order in
respect of such street name registered Covered Shares.
5.3. No Ownership Interest. Nothing contained in this Agreement shall be deemed to
vest in Xxxxxx or JWH any direct or indirect ownership or incidence of ownership of or with respect
to any Covered Shares. All rights, ownership and economic benefits of and relating to the Covered
Shares shall remain vested in and belong to the applicable Stockholder, and neither Xxxxxx nor JWH
shall have any authority to direct any Stockholder in the voting or disposition of any of the
Covered Shares, except as otherwise expressly provided herein.
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5.4. Notices. All notices and other communications hereunder shall be in writing
and shall be deemed given if delivered personally, telecopied (upon telephonic confirmation of
receipt), on the first Business Day following the date of dispatch if delivered by a
recognized next day courier service or on the third Business Day following the date of mailing if
delivered by registered or certified mail, return receipt requested, post prepaid. All notices
hereunder shall be delivered as set forth below, or pursuant to such other instructions as may be
designated in writing by the party to receive such notice:
| (a) | if to Xxxxxx to: | ||
| Xxxxxx Industries, Inc. 0000 X. Xxx Xxxxx Xxxxxxxxx, 00xx Xxxxx Xxxxx, Xxxxxxx 00000-0000 Attention: General Counsel Facsimile: (000) 000-0000 |
|||
| with a copy to: | |||
| Xxxxxxx Xxxxxxx & Xxxxxxxx LLP 000 Xxxxxxxxx Xxxxxx Xxx Xxxx, Xxx Xxxx 00000 Attention: Xxxxx X. Xxxxxx, Esq. Facsimile: (000) 000-0000 |
|||
| (b) | if to Hanover (for purposes of Section 5.2) to: | ||
| Hanover Capital Mortgage Holdings, Inc. 000 Xxxxxxxxx Xxxxx Xxxxxx, Xxx Xxxxxx 00000 Attention: General Counsel Facsimile: (000) 000-0000 |
|||
| with a copy to: | |||
| Xxxxxxx Xxxxxxxx & Xxxx LLP Two World Financial Center Xxx Xxxx, Xxx Xxxx 00000 Attention: Xxxx X. Xxxxxxx, Esq. Facsimile: (000) 000-0000 |
(c) if to any Stockholder, then at the address set forth below its name on the signature page
hereto.
5.5. Interpretation. The words “hereof,” “herein” and “hereunder” and words of
similar import when used in this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement, and Section references are to this Agreement unless
otherwise specified. Whenever the words “include,” “includes” or “including” are used in this
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Agreement, they shall be deemed to be followed by the words “without limitation.” The meanings
given to terms defined herein shall be equally applicable to both the singular and plural
forms of such terms. The headings contained in this Agreement are for reference purposes only
and shall not affect in any way the meaning or interpretation of this Agreement.
5.6. Counterparts. This Agreement may be executed by facsimile and in counterparts,
all of which shall be considered one and the same agreement and shall become effective when
counterparts have been signed by each of the parties and delivered to the other parties, it being
understood that all parties need not sign the same counterpart.
5.7. Entire Agreement. This Agreement and, to the extent referenced herein, the
Merger Agreement, together with the Transaction Agreements and the several agreements and other
documents and instruments referred to herein or therein or annexed hereto or thereto, constitute
the entire agreement, and supersede all prior agreements and understandings, both written and oral,
among the parties with respect to the subject matter hereof.
5.8. Governing Law; Consent to Jurisdiction; Waiver of Jury Trial.
(a) This Agreement shall be governed by, and construed in accordance with, the laws of the
State of Maryland, without regard to conflicts of laws principles. Each party irrevocably consents
to and submits to the jurisdiction, including the personal jurisdiction, of (i) any Maryland State
court and (ii) any Federal court of the United States sitting in the State of Maryland, solely for
the purposes of any suit, action or other proceeding between any of the parties hereto arising out
of this Agreement or any transaction contemplated hereby. Each party agrees to commence any suit,
action or proceeding relating hereto only in any Federal court of the United States sitting in the
State of Maryland or, if such suit, action or other proceeding may not be brought in such court for
reasons of subject matter jurisdiction, in any Maryland State court. Each party irrevocably and
unconditionally waives any objection to the laying of venue of any suit, action or proceeding
between any of the parties hereto arising out of this Agreement or any transaction contemplated
hereby in (i) any Maryland State court, and (ii) any Federal court of the United States sitting in
the State of Maryland, and hereby further irrevocably and unconditionally waives and agrees not to
plead or claim in any such court that any such suit, action or proceeding brought in any such court
has been brought in an inconvenient forum. Each party further irrevocably consents to the service
of process out of any of the aforementioned courts in any such suit, action or other proceeding by
the mailing of copies thereof by registered mail to such party at its address set forth in this
Agreement, such service of process to be effective upon acknowledgment of receipt of such
registered mail; provided that nothing in this Section 5.8 shall affect the right of any party to
serve legal process in any other manner permitted by law. The consent to jurisdiction set forth in
this Section 5.8 shall not constitute a general consent to service of process in the State of
Maryland and shall have no effect for any purpose except as provided in this Section 5.8. The
parties agree that a final judgment in any such suit, action or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by
law.
(b) Each party hereto acknowledges and agrees that any controversy which may arise under this
Agreement is likely to involve complicated and difficult issues, and therefore each such party
hereby irrevocably and unconditionally waives any right such party
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may have to a trial by jury in
respect of any litigation directly or indirectly arising out of or related to this Agreement, or
the transactions contemplated by this Agreement. Each party
certifies and acknowledges that (I) no representative, agent or attorney of any other party
has represented, expressly or otherwise, that such other party would not, in the event of
litigation, seek to enforce the foregoing waiver, (II) each party understands and has considered
the implications of this waiver, (III) each party makes this waiver voluntarily and (IV) each party
has been induced to enter into this Agreement by, among other things, the mutual waivers and
certifications in this Section 5.8.
5.9. Amendment; Waiver. This Agreement may not be amended except by an instrument
in writing signed by Xxxxxx and, to the extent such amendment relates to a Stockholder, such
Stockholder, provided that any amendment to Section 5.2 shall also require the written
consent of Hanover. Each party may waive any right of such party hereunder by an instrument in
writing signed by such party and delivered to the other parties hereto.
5.10. Remedies. (a) Each party hereto acknowledges that monetary damages would not
be an adequate remedy in the event that any covenant or agreement in this Agreement is not
performed in accordance with its terms, and it is therefore agreed that, in addition to and without
limiting any other remedy or right it may have, the non-breaching party shall have the right to an
injunction, temporary restraining order or other equitable relief in any court of competent
jurisdiction enjoining any such breach and enforcing specifically the terms and provisions hereof.
Each party hereto shall not oppose the granting of such relief in the event a court determines that
such a breach has occurred and shall waive any requirement for the securing or posting of any bond
in connection with such remedy.
(b) All rights, powers and remedies provided under this Agreement or otherwise available in
respect hereof at law or in equity shall be cumulative and not alternative, and the exercise or
beginning of the exercise of any thereof by any party shall not preclude the simultaneous or later
exercise of any other such right, power or remedy by such party.
5.11. Severability. If any provision of this Agreement or the application of any
such provision to any person or circumstance shall be declared to be invalid, unenforceable or
void, such declaration shall not have the effect of invalidating or voiding the remainder of this
Agreement, it being the intent and agreement of the parties hereto that this Agreement shall be
deemed amended by modifying such provision to the extent necessary to render it valid, legal and
enforceable while preserving its intent or, if such modification is not possible, by substituting
therefor another provision that is valid, legal and enforceable and that achieves the same
objective.
5.12. Successors and Assigns; Third Party Beneficiaries. Neither this Agreement nor
any of the rights or obligations of any party under this Agreement shall be assigned, in whole or
in part (by operation of law or otherwise), by any party without the prior written consent of
Xxxxxx and the Stockholders. Subject to the foregoing, this Agreement shall bind and inure to the
benefit of and be enforceable by the parties hereto and their respective successors and permitted
assigns. Nothing in this Agreement, express or implied, is intended to confer on any Person other
than the parties hereto or their respective successors and permitted assigns any rights, remedies,
obligations or liabilities under or by reason of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed (where
applicable, by their respective officers or other authorized Person thereunto duly authorized) as
of the date first written above.
| XXXXXX INDUSTRIES, INC. | ||||||
| By: | /s/ Xxxxxx X. Xxxxxxx | |||||
| Name: | Xxxxxx X. Xxxxxxx | |||||
| Title: | Vice Chairman | |||||
| JWH HOLDING COMPANY, LLC | ||||||
| By: | /s/ Xxxx X. X’Xxxxx | |||||
| Name: | Xxxx X. X’Xxxxx | |||||
| Title: | President and Chief Executive Officer | |||||
| HANOVER CAPITAL MORTGAGE HOLDINGS, INC. | ||||||
| (solely for purposes of Section 5.2) | ||||||
| By: | /s/ Xxxx X. Xxxxxxxx | |||||
| Name: | Xxxx X. Xxxxxxxx | |||||
| Title: | Chief Executive Officer and President | |||||
[Voting Agreement Signature Page]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed (where
applicable, by their respective officers or other authorized Person thereunto duly authorized) as
of the date first written above.
| Xxxx X. Xxxxxxxx | ||||||
| 000 Xxxxxxxxx Xxxxx, Xxxxx 000 | ||||||
| Xxxxxx, Xxx Xxxxxx 00000 | ||||||
| Existing Shares: 645,185 | ||||||
| /s/ Xxxx X. Xxxxxxxx | ||||||
| Name: Xxxx X. Xxxxxxxx | ||||||
| Xxxx X. Xxxxxxx | ||||||
| 000 Xxxxxxxxx Xxxxx, Xxxxx 000 | ||||||
| Xxxxxx, Xxx Xxxxxx 00000 | ||||||
| Existing Shares: 225,487 | ||||||
| /s/ Xxxx X. Xxxxxxx | ||||||
| Name: Xxxx X. Xxxxxxx | ||||||
| Xxxxxx Trading Company | ||||||
| 00000 Xxxxxxx Xxxx. #000 | ||||||
| Xxxxxxxxx, Xxxx 00000 | ||||||
| Existing Shares: 500 | ||||||
| By: | /s/ Xxxxxx Xxxxxx | |||||
| Name: Xxxxxx Xxxxxx | ||||||
| Title: President | ||||||
| Ramat Securities, LTD | ||||||
| 00000 Xxxxxxx Xxxx. #000 | ||||||
| Xxxxxxxxx, Xxxx 00000 | ||||||
| Existing Shares: 0 | ||||||
| By: | /s/ Xxxxxx Xxxxxx | |||||
| Name: Xxxxxx Xxxxxx | ||||||
| Title: Member | ||||||
[Voting Agreement Signature Page]
