Stock Purchase Agreement between Hanover Capital Mortgage Holdings, Inc. and RCG PB, Ltd. August 10, 2007
Execution
Version
between
Hanover
Capital Mortgage Holdings, Inc.
and
RCG
PB, Ltd.
August
10, 2007
This
Stock Purchase Agreement
(“Agreement”)
is
dated August 10, 2007 by and between Hanover Capital Mortgage Holdings, Inc.,
a
corporation incorporated under the laws of the State of Maryland (the
“Company”),
and
RCG PB, Ltd, a Cayman exempt company (the “Investor”).
Background
On
the
date hereof, the parties hereto entered into a repurchase agreement regarding
mortgage-backed securities of the Company (the “Repurchase
Agreement”).
In
consideration of Investor’s execution and performance of its respective
obligations under the Repurchase Agreement and as a material inducement to
the
Investor entering into the Repurchase Agreement, the Company agrees, pursuant
to
the terms and conditions herein, to issue to Investor 600,000 shares of common
stock, par value $0.01 per share, of the Company (“Common
Stock”),
and
to register such shares for resale under the Securities Act (as defined
below).
Terms
Now,
Therefore,
in
consideration of the mutual covenants and promises set forth herein, the parties
hereto, intending to be legally bound, agree as follows:
1. Definitions.
Unless
the context otherwise requires, the following terms shall have the following
meanings for purposes of this Agreement:
(a) “Additional
Share Listing Application”
shall
mean any Additional Listing Application or similar document required by the
American Stock Exchange relating to the Shares or the transactions contemplated
by this Agreement.
(b) “Affiliate”
of
any
specified person means any other person that, directly or indirectly, is in
control of, is controlled by, or is under common control with, such specified
person. For purposes of this definition, control of a person means the power,
direct or indirect, to direct or cause the direction of the management and
policies of such person whether by contract or otherwise; and the terms
“controlling” and “controlled” have meanings correlative to the
foregoing.
(c) “Commission”
means
the Securities and Exchange Commission.
(d) “Entity”
shall
mean a corporation, limited liability company, partnership, joint venture,
association, trust, or any other entity or organization.
(e) “Equity”
shall
mean shares of capital stock of the Company and any option, warrant, convertible
security/debt or other right to acquire shares of capital stock of the
Company.
(f) “Exchange
Act”
shall
mean the Securities Exchange Act of 1934, as amended, or any similar federal
statute enacted hereafter, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect from time to time.
(g) “Managing
Underwriter”
means
the investment banker or investment bankers and manager or managers that
administer an underwritten offering, if any, conducted pursuant to Section
5(f)
hereof.
(h) “Material
Adverse Effect”
shall
mean any event or effect which has or reasonably is expected to have,
individually or in the aggregate, a material adverse effect on
the
business, assets, liabilities, properties, affairs, results of operations or
condition (financial or otherwise) of the Company.
(i) “NASD”
means
The National Association of Securities Dealers, Inc.
(j) “Person”
and
“person”
shall
include any natural person, Entity or any governmental or regulatory authority
whatsoever.
(k) “Prospectus”
means
the prospectus included in a Shelf Registration Statement, as amended or
supplemented by any prospectus supplement and by all other amendments thereto,
including post-effective amendments, and all material incorporated by reference
into such prospectus.
(l) “Securities
Act”
shall
mean the Securities Act of 1933, as amended, or any similar federal statute
enacted hereafter, and the rules and regulations of the Commission thereunder
all as the same shall be in effect from time to time.
(m) “Shares”
shall
have the meaning given thereto in Section 2.
(n) “Transfer”
shall
mean to sell, or in any other way directly or indirectly, to transfer, assign,
distribute, encumber, pledge, hypothecate or otherwise dispose of, either
voluntarily or involuntarily (or a sale, or any other direct or indirect
transfer, assignment, distribution, encumbrance or other voluntary or
involuntary disposition), as the case may be.
(o) “Transfer
Restricted Securities”
means
each Share of Common Stock issued to Investor pursuant to this Agreement until
the earliest of:
(i) the
date
on which such Share of Common Stock has been effectively registered under the
Securities Act and disposed of in accordance with the Shelf Registration
Statement;
(ii) the
date
on which such Share of Common Stock is transferred in compliance with Rule
144
under the Securities Act or may be sold or transferred by the Investor pursuant
to Rule 144 under the Securities Act (or any other similar provision then in
force) without any volume or manner of sale restrictions thereunder;
or
(iii) the
date
on which such Share of Common Stock ceases to be outstanding (whether as a
result of redemption, repurchase and cancellation, conversion or
otherwise).
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2. Sale
and Purchase of Stock.
Pursuant
to the terms and conditions set forth herein, and in consideration for entering
into, and performing its obligations under, the Repurchase Agreement, and upon
the earlier of (i) the approval of the American Stock Exchange of the Additional
Share Listing Application relating thereto and (ii) such time as the Common
Stock of the Company is no longer listed on the American Stock Exchange, the
Company shall sell to the Investor and the Investor shall purchase from the
Company
Six
Hundred Thousand (600,000) shares of the Company’s common stock, par value $.01
per share (collectively, the “Shares”).
The
Company shall deliver to the Investor one stock certificate, registered in
its
name, for the Shares purchased pursuant to the instructions and direction of
the
Investor. The Company hereby agrees to utilize its reasonable best efforts
to
have the Additional Share Listing Application approved by the American Stock
Exchange. The issuance and delivery of the Shares shall
be
made on the earliest practicable date after the Company has received
unconditional approval of the Additional Share Listing Application
or upon
such delisting; provided, however, if the Additional Share Listing Application
has not been approved prior to the thirtieth (30th)
day
after the date hereof (with an automatic extension of thirty (30) days if the
Company is in good faith pursuing an appeal with the American Stock Exchange
to
approve the Additional Listing Application) or the Company has not otherwise
provided the Shares to the Investor, the Company acknowledges that it shall
be
in default of this Agreement, which such default shall
also constitute an Event of Default under the Repurchase Agreement (as defined
therein).
3. Representations
and Warranties of the Company.
The
Company hereby represents and warrants to the Investor as follows:
(a) Organization.
The
Company is a corporation duly incorporated, existing and in good standing under
the laws of the State of Maryland and has all requisite corporate power and
authority to own and lease its properties, to carry on its business as presently
conducted and to carry out the transactions contemplated hereby. The Company
is
qualified as a foreign corporation in good standing all such jurisdictions,
if
any, in which the conduct of its business as presently conducted or its present
ownership, leasing or operation of property requires such qualification, except
where the failure to qualify so would not, individually or in the aggregate,
have a Material Adverse Effect. The Company is not currently in breach of any
provision of its Articles of Incorporation and By-laws.
(b) Authorization
of the Company.
The
execution, delivery and performance by the Company of this Agreement has been
duly authorized by all requisite corporate action by the Company; and this
Agreement has been duly executed and delivered by the Company and constitutes
its valid and binding obligation, enforceable in accordance with its terms,
except as may be limited by bankruptcy, insolvency, moratorium or similar laws
affecting the enforcement of creditors’ rights generally. The execution,
delivery and performance by the Company of this Agreement, the issuance, sale
and delivery of the Shares and the consummation of the transactions contemplated
by this Agreement by the Company will not (i) violate any provision of law,
statute, rule or regulation, or any ruling, writ, injunction, order, judgment
or
decree of any court, administrative agency or other governmental body applicable
to the Company or its properties or assets, except for such violations which
are
not reasonably likely to have a Material Adverse Effect, (ii) conflict with
or
result in any breach (with or without the giving of notice or passage of time)
of any of the terms, conditions or provisions of, or constitute a default,
or
result in the creation of any material lien, security interest, charge or
encumbrance upon any of the properties or assets of the Company under any note,
indenture, mortgage, lease agreement or other material contract, agreement
or
instrument to which the Company is a party or by which it or any of its property
is bound or affected (except for such conflicts or breaches as to which
requisite waivers and consents have been obtained and except for such conflicts
or breaches which are not reasonably likely, individually or in the aggregate,
to have a Material Adverse Effect), or (iii) conflict with the Articles of
Incorporation or By-laws of the Company (in each case as amended to the date
hereof). No authorization, approval, consent or order of any court or
governmental authority or agency is necessary in connection with the issuance
of
the Shares hereunder, except as may be required under Blue Sky laws or except
for such as have been obtained. The Shares have duly authorized and upon the
issuance, sale and delivery of the Shares, the Shares will be validly issued
and
outstanding, fully paid and nonassessable, not subject to preemptive or any
other rights of the stockholders of the Company, or others and free and clear
of
any and all liens and encumbrances.
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(c) Capitalization.
The
authorized capital stock of the Company immediately prior to the consummation
of
the purchase of the Shares at the Closing consists of 90,000,000 shares
of
common
stock, of which 8,063,962 shares are validly issued and outstanding and are
fully paid and nonassessable,
and
10,000,000 shares of preferred stock, none of which are issued or outstanding.
In addition, 193,600 shares of Common Stock have been reserved for issuance
upon
exercise of all options and any other securities convertible into shares of
Common Stock and pursuant to any other contractual obligation, and such Shares
constitute approximately 7.27% of the total shares of Common Stock of the
Company on a fully diluted basis after the issuance of the Shares hereunder.
Except as set forth in the SEC Reports, (i) there is no existing option,
warrant, call, commitment or other agreement to which the Company is a party
requiring, and there are no convertible securities of the Company outstanding
which upon conversion would require, the issuance of any additional Equity
of
the Company, and (ii) there are no agreements to which the Company is a party
with any of the holders of Equity of the Company with respect to the
registration rights, voting or Transfer of the Equity of the Company, or to
the
Company’s knowledge, among or between any Person other than the Company, other
than as provided herein. Except as set forth in the SEC Reports (as defined
below) and as may have been provided to the Investor herein, there are no
preemptive or similar rights to purchase or otherwise acquire Equity of the
Company pursuant to any provision of law, the Articles of Incorporation or
By-laws of the Company, in each case as amended to the date hereof, or any
agreement to which the Company is a party or otherwise.
(d) SEC
Reports.
The
Company has filed all reports, schedules, forms, statements and other documents
required to be filed by the Company under the Securities Act and the Exchange
Act, including pursuant to Section 13(a) or 15(d) thereof, for the two years
preceding the date hereof (or such shorter period as the Company was required
by
law or regulation to file such material) (the foregoing materials, including
the
exhibits thereto and documents incorporated by reference therein, being
collectively referred to herein as the “SEC
Reports”)
on a
timely basis or has received a valid extension of such time of filing and has
filed any such SEC Reports prior to the expiration of any such extension. As
of
their respective dates, the SEC Reports complied in all material respects with
the requirements of the Securities Act and the Exchange Act, as applicable,
and
none of the SEC Reports, when filed, contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
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(e) Financial
Statements.
Except
as noted therein, the consolidated financial statements (including the related
notes thereto) for the year ended December 31, 2006 and the three month period
ended March 31, 2007 contained in the SEC Reports present fairly, in all
material respects, the consolidated financial condition of the Company and
its
consolidated subsidiaries as of the dates indicated and the results of their
operations and changes in their consolidated cash flows for the periods
specified; such financial statements have been prepared in conformity with
accounting principles generally accepted in the United States applied on
a
consistent basis.
(f) 1940
Act.
The
Company is not (A) an “investment company,” or a company “controlled by an
investment company,” within the meaning of the Investment Company Act of 1940,
as amended, or (B) a “holding company,” or a “subsidiary company of a holding
company,” or an “affiliate” of either a “holding company” or a “subsidiary
company of a holding company,” as such terms are defined in the Public Utility
Holding Company Act of 1935, as amended.
(g) REIT.
The
Company is organized and operates in conformity with the requirements for
qualification as a real estate investment trust under the Internal Revenue
Code
of 1986, as amended (the “Code”), and the Company’s current and proposed method
of operation, as described in the SEC Reports, will enable the Company to meet
the requirements for taxation as a real estate investment trust under the
Code.
(h) Proceedings.
Other
than as set forth in the SEC Reports, there are no legal or governmental
proceedings pending to which the Company or any of its consolidated subsidiaries
is a party or to which any property of the Company or any of its consolidated
subsidiaries is subject, which could reasonably be expected, individually or
in
the aggregate, to have a Material Adverse Effect, and, to the knowledge of
the
Company, no such proceedings are threatened or contemplated by governmental
authorities or threatened by others.
(i) Offering
Exemption.
Subject
in part to and in reliance in part upon the accuracy of the representations
and
warranties of the Investor set forth in Section 4 hereof, the offering and
sale
of the Shares are exempt from registration under the Securities Act; and the
aforesaid offering and sale is and will be exempt from registration under
applicable state securities and “Blue Sky” laws. The Company has made or will
make all requisite filings and has taken or will take all action necessary
to be
taken to comply with such state securities or blue sky laws.
(j) Registration
Rights.
Except
as set forth in Section 5 below, the Investor has no right to cause the Company
to effect the registration under the Securities Act of any shares of common
stock or any other securities (including debt securities) of the
Company.
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4. Representations,
Warranties and Covenants of the Investor.
The
Investor represents and warrants or covenants (as the case may be) to the
Company as follows:
(a) The
execution, delivery and performance of this Agreement will not violate any
provision of law, any order of any court or other agency of government, or
any
provision of any material indenture, agreement or other instrument to which
the
Investor or any of its properties or assets is bound.
(b) This
Agreement has been duly executed and delivered by the Investor and constitutes
the legal, valid and binding obligation of the Investor, enforceable in
accordance with its terms, except as may be limited by bankruptcy, insolvency,
moratorium or similar laws affecting the enforcement of creditors’ rights
generally.
(c) The
Investor represents and warrants to the Company that the Investor is acquiring
the Shares for its own account, for investment and not with a view to the
distribution thereof within the meaning of the Securities Act.
(d) The
Investor understands that the Shares are being issued and sold in transactions
exempt from the registration or qualification requirements of the Securities
Act
and applicable state securities laws and have not been registered or qualified
under the Securities Act or any state securities laws. The Investor acknowledges
that reliance on said exemptions is predicated in part on the accuracy of its
Investor’s representations and warranties herein. The Investor acknowledges and
agrees that the Shares being
acquired by it hereunder, must be held by the Investor purchasing the same
indefinitely unless a subsequent disposition thereof is registered or qualified
under the Securities Act and applicable state securities laws or is exempt
from
registration; and that the Company is not required so to register or qualify
any
such Shares, or to take any action to make such an exemption available except
to
the extent provided herein.
(e) The
Investor further understands that the exemption from registration afforded
by
Rule 144 (the provisions of which are known to the Investor) promulgated under
the Securities Act depends on the satisfaction of various conditions relating
to
the Investor and the Company and that, if applicable, Rule 144 affords the
basis
for sales under certain circumstances only in limited amounts.
(f) The
Investor is an “accredited investor” (as that term is defined in Rule 501(a)
under the Securities Act) and by reason of its business and financial
experience, it has such knowledge, sophistication and experience in business
and
financial matters as to be capable of evaluating the merits and risks of the
prospective investment, is able to bear the economic risk of such investment
and, at the present time, is able to afford a complete loss of such
investment.
(g) The
Investor has received and reviewed all of the information that it considers
necessary or appropriate for deciding whether to purchase the Shares, including
the SEC Reports. The Investor has had an opportunity to ask questions and to
receive answers from the Company regarding the terms and conditions of the
issuance of the Shares and the business properties and financial condition
of
the Company.
(h) The
Investor acknowledges that investment in the Company is speculative and involves
a high degree of risk.
-6-
(i) The
Investor acknowledges that neither the Commission nor any state securities
commission has approved the Shares or confirmed the accuracy or determined
the
adequacy of the information concerning the Company provided to the
Investor.
(j) The
Investor is unaware of, is in no way relying on, and did not become aware
of the
offering of the Shares through or as a result of, any form of general
solicitation or general advertising including, without limitation, any article,
notice, advertisement or other communication published in any newspaper,
magazine or similar media or broadcast over television or radio, in connection
with the offering and sale of the Shares and did not become aware of the
offering of the Shares and is not purchasing the Shares through or as a result
of any seminar or meeting to which the Investor was invited by, or any
solicitation of a subscription by, a person not previously known to the Investor
in connection with investments in securities generally.
(k) The
Investor is not relying on the Company or any of its respective employees or
agents with respect to the legal, tax, economic and related considerations
of an
investment in the Shares, and the Investor has relied on the advice of, or
has
consulted with, only its own attorney, accountant, representative and/or tax
advisor.
(l) Any
certificates representing the Shares will bear a legend substantially similar
to
the following:
THIS
SECURITY HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION
OR
THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR
TO
SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY.
5. Registration
Rights.
(a) Demand
Registration.
(i) The
Company shall:
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(A) as
promptly as practicable (but in no event more than 120 days after the date
hereof) (the “Shelf
Filing Deadline”),
cause
to be filed a registration statement pursuant to Rule 415 under the Securities
Act or any similar rule that may be adopted by the Commission (the “Shelf
Registration Statement”),
which
Shelf Registration Statement shall provide for the registration and resale,
on a
continuous or delayed basis, of all of the Transfer Restricted Shares;
(B) use
its
reasonable best efforts to cause the Shelf Registration Statement to be declared
effective under the Securities Act by the Commission as promptly as practicable
(but in no event later than 180 days after the date hereof) (the “Effectiveness
Target Date”);
and
(C) use
its
reasonable best efforts to keep the Shelf Registration Statement continuously
effective, supplemented and amended as required by the Securities Act and
by the
provisions of Section 5(b)(ii) hereof to the extent necessary to ensure that
it
conforms with the requirements of this Agreement and the Securities Act and
the
rules and regulations of the Commission promulgated thereunder as announced
from
time to time, for a period (the “Effectiveness
Period”)
from
the date the Shelf Registration Statement is declared effective by the
Commission until the earlier of:
(x)
the
date when Investor is able to sell all such Transfer Restricted Securities
immediately without restriction pursuant to Rule 144(k) under the Securities
Act; or
(y)
the
date when (i) all of such Transfer Restricted Securities of Investor are
registered under the Shelf Registration Statement and disposed of in accordance
with the Shelf Registration Statement or pursuant to Rule 144(k) under the
Securities Act or any similar rule that may be adopted by the Commission or
(ii)
the Transfer Restricted Securities cease to be outstanding.
The
Company shall be deemed not to have used its reasonable best efforts to keep
the
Shelf Registration Statement effective during the Effectiveness Period if it
voluntarily takes any action that would result in Investor not being able to
offer and sell such Transfer Restricted Securities at any time during the
Effectiveness Period, unless such action is (x) required by applicable law,
and
(y) permitted by Section 5(b)(ii)(B) hereof.
(ii) If
the
Shelf Registration Statement or any Subsequent Shelf Registration Statement
(as
defined below) ceases to be effective for any reason at any time during the
Effectiveness Period (other than because all Transfer Restricted Securities
registered thereunder shall have been resold pursuant thereto or shall have
otherwise ceased to be Transfer Restricted Securities), the Company shall use
its best efforts to obtain the prompt withdrawal of any order suspending the
effectiveness thereof or file an additional Shelf Registration Statement
covering all of the securities that as of the date of such filing are Transfer
Restricted Securities (a “Subsequent
Shelf Registration Statement”).
If a
Subsequent Shelf Registration Statement is filed, the Company shall use its
best
efforts to cause the Subsequent Shelf Registration Statement to become effective
as promptly as is practicable after such filing and to keep such Shelf
Registration Statement (or Subsequent Shelf Registration Statement) continuously
effective until the end of the Effectiveness Period.
-8-
(iii) The
Company shall supplement and amend the Shelf Registration Statement if required
by the rules, regulations or instructions applicable to the registration
form
used by the Company for such Shelf Registration Statement, if required by
the
Securities Act.
(iv) The
Company shall cause the Shelf Registration Statement and the related Prospectus
and any amendment or supplement thereto, as of the effective date of the
Shelf
Registration Statement or such amendment or supplement, (i) to comply in
all
material respects with the applicable requirements of the Securities Act,
and
(ii) not to contain any untrue statement of a material fact or omit to state
a
material fact required to be stated therein or necessary in order to make
the
statements therein (in the case of the Prospectus, in light of the circumstances
under which they were made) not misleading.
(v) Investor
agrees it will only sell Transfer Restricted Securities pursuant to a Shelf
Registration Statement or pursuant to an exemption from registration under
the
Securities Act.
(b) Registration
Procedures.
(i) In
connection with the Shelf Registration Statement, the Company shall comply
with
all the provisions of Section 5(b)(ii) hereof and shall use its reasonable
best
efforts to effect such registration to permit the sale of the Transfer
Restricted Securities, and pursuant thereto, shall as promptly as practicable
prepare and file with the Commission a Shelf Registration Statement relating
to
the registration on any appropriate form under the Securities Act.
(ii) In
connection with the Shelf Registration Statement and any Prospectus required
by
this Agreement to permit the sale or resale of Transfer Restricted Securities,
the Company shall:
(A) subject
to any notice by the Company in accordance with this Section 5(b)(ii) of the
existence of any fact or event of the kind described in Section 5(b)(ii)(D)(4),
use its reasonable best efforts to keep the Shelf Registration Statement
continuously effective during the Effectiveness Period; upon the occurrence
of
any event that would cause the Shelf Registration Statement or the Prospectus
contained therein (i) to contain a material misstatement or omission, or (ii)
not to be effective and usable for resale of Transfer Restricted Securities
during the Effectiveness Period, the Company shall file promptly an appropriate
amendment to the Shelf Registration Statement, a supplement to the Prospectus
or
a report filed with the Commission pursuant to Section 13(a), 13(c), 14 or
15(d)
of the Exchange Act, in the case of clause (i), correcting any such misstatement
or omission, and, in the case of either clause (i) or (ii), if such amendment
does not become automatically effective upon filing with the Commission, use
its
reasonable best efforts to cause such amendment to be declared effective and
the
Shelf Registration Statement and the related Prospectus to become usable for
their intended purposes as soon as practicable thereafter;
(B) notwithstanding
Section 5(b)(ii)(A) hereof, the Company may suspend the effectiveness of the
Shelf Registration Statement not more than two (2) times in any twelve (12)
month period and in each case for as short a period as possible (but in no
event
shall any such period exceed 60 days) (each such period, a “Suspension
Period”):
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(1)
if an
event occurs and is continuing as a result of which the Shelf Registration
Statement, the Prospectus, any amendment or supplement thereto, or any document
incorporated by reference therein would, in the Company’s judgment, contain an
untrue statement of a material fact or omit to state a material fact required
to
be stated therein or necessary to make the statements therein not misleading;
and
(2)
if
the Company determines in good faith that the disclosure of a material event
at
such time would be seriously detrimental to the Company and its subsidiaries
and
the Company delivers a certificate to the Investor signed by the Chief Executive
Officer of the Company stating that the Company’s board of directors in its good
faith judgment has determined that effecting the sale at such time would
require
the Company to make public disclosure of information the public disclosure
of
which would have a material adverse effect upon the Company.
Upon
the
occurrence of any event described in clauses (1) and (2) of this Section
5(b)(ii)(B), the Company shall give notice to Investor that the availability
of
the Shelf Registration Statement is suspended and, upon actual receipt of any
such notice, Investor agrees not to sell any Transfer Restricted Securities
pursuant to the Shelf Registration Statement until Investor’s receipt of copies
of the supplemented or amended Prospectus provided for in Section 5(b)(ii)
hereof. The Company shall not be required to specify in the written notice
to
Investor the nature of the event giving rise to the Suspension
Period;
(C) prepare
and file with the Commission such amendments and post-effective amendments
to
the Shelf Registration Statement as may be necessary to keep the Shelf
Registration Statement effective during the Effectiveness Period; cause the
Prospectus to be supplemented by any required Prospectus supplement, and as
so
supplemented to be filed pursuant to Rule 424 under the Securities Act, and
to
comply fully with the applicable provisions of Rules 424 under the Securities
Act in a timely manner; and comply with the provisions of the Securities Act
with respect to the disposition of all Transfer Restricted Securities covered
by
the Shelf Registration Statement during the applicable period in accordance
with
the intended method or methods of distribution by the sellers thereof set forth
in the Shelf Registration Statement or supplement to the
Prospectus;
(D) promptly
advise Investor (which notice pursuant to clauses (1) through (4) below shall
be
accompanied by an instruction to suspend the use of the Prospectus until the
Company shall have remedied the basis for such suspension):
(1)
when
the Prospectus or any Prospectus supplement or post-effective amendment has
been
filed, and, with respect to the Shelf Registration Statement or any
post-effective amendment thereto, when the same has become
effective,
(2)
of
any request by the Commission for amendments to the Shelf Registration Statement
or amendments or supplements to the Prospectus or for additional information
relating thereto,
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(3)
of
the issuance by the Commission of any stop order suspending the effectiveness
of
the Shelf Registration Statement under the Securities Act or of the suspension
by any state securities commission of the qualification of the Transfer
Restricted Securities for offering or sale in any jurisdiction, or the
threatening or initiation of any proceeding for any of the preceding purposes,
or
(4)
of
the happening of any event or the failure of any event to occur or the discovery
of any facts, during the Effectiveness Period, which makes any statement made
in
a Shelf Registration Statement, the related Prospectus, any amendment or
supplement thereto or any document incorporated by reference therein untrue
in
any material respect or which causes such document(s) to omit to state a
material fact necessary in order to make the statements therein (in the case
of
the Prospectus, in the light of the circumstances under which they were made)
not misleading;
(E) if
at any
time the Commission shall issue any stop order suspending the effectiveness
of
the Shelf Registration Statement, or any state securities commission or other
regulatory authority shall issue an order suspending the qualification or
exemption from qualification of the Transfer Restricted Securities under state
securities or Blue Sky laws, use its reasonable best efforts to obtain the
withdrawal or lifting of such order at the earliest possible time and shall
provide to Investor prompt notice of the withdrawal of any such
order;
(F) make
available at reasonable times for inspection by Investor, and any attorney
or
accountant retained by Investor, all financial and other records, pertinent
corporate documents and properties of the Company as shall be reasonably
necessary to enable them to conduct a reasonable investigation within the
meaning of Section 11 of the Securities Act, and cause the Company’s officers,
directors, managers and employees to supply all information reasonably requested
by any such representative or representatives of Investor or such attorney
or
accountant in connection therewith; provided that, subject to Section
5(b)(ii)(A),
(x)
appropriate safeguards are in place to protect the confidentiality of such
information, and (y) in no event shall the Company be required to disclose
any
proprietary information to any competitor or agent thereof;
(G) if
requested by Investor, promptly incorporate into the Shelf Registration
Statement or Prospectus, pursuant to a supplement or post-effective amendment
if
necessary, such information as Investor may reasonably request to have included
therein, including, without limitation, information relating to the “Plan of
Distribution” of the Transfer Restricted Securities;
(H) deliver
to Investor, without charge, as many copies of the Prospectus (including each
preliminary Prospectus) and any amendment or supplement thereto as it reasonably
may request; subject to any notice by the Company in accordance with this
Section 5(b)(ii) of the existence of any fact or event of the kind described
in
Section 5(b)(iv)(D)(4), the Company hereby consents to the use of the Prospectus
and any amendment or supplement thereto by Investor in connection with the
offering and the sale of the Transfer Restricted Securities covered by the
Prospectus or any amendment or supplement thereto;
-11-
(I) before
any public offering of Transfer Restricted Securities, cooperate with Investor
and its counsel in connection with the registration and qualification of
the
Transfer Restricted Securities under the securities or Blue Sky laws of such
jurisdictions in the United States as Investor may reasonably request and
do any
and all other acts or things necessary or advisable to enable the disposition
in
such jurisdictions of the Transfer Restricted Securities covered by the Shelf
Registration Statement; provided,
however,
that
the Company shall not be required (i) to register or qualify as a foreign
corporation or a dealer of securities in any jurisdiction where it would
not
otherwise be required to qualify but for this Section 5(b)(ii)(I) or to take
any
action that would subject it to the service of process in any jurisdiction
where
it would not otherwise be subject to such service of process, or (ii) to
subject
itself to general or unlimited service of process or to taxation in any such
jurisdiction if it is not then so subject;
(J) unless
any Transfer Restricted Securities shall be in book-entry form only, cooperate
with Investor to facilitate the timely preparation and delivery of certificates
representing Transfer Restricted Securities to be sold and not bearing any
restrictive legends (unless required by applicable securities laws); and
enable
such Transfer Restricted Securities to be in such denominations and registered
in such names as Investor may request at least two business days before any
sale
of Transfer Restricted Securities;
(K) use
its
reasonable best efforts to cause the Transfer Restricted Securities covered
by
the Shelf Registration Statement to be registered with or approved by such
other
U.S. governmental agencies or authorities as may be necessary to enable the
seller or sellers thereof to consummate the disposition of such Transfer
Restricted Securities;
(L) subject
to Section 5(b)(ii)(B) hereof, if any fact or event contemplated by Section
5(b)(ii)(D)(1) through (4) hereof shall exist or have occurred, use its
reasonable best efforts to prepare a supplement or post-effective amendment
to
the Shelf Registration Statement or related Prospectus or any document
incorporated therein by reference or file any other required document so that,
as thereafter delivered to the purchasers of Transfer Restricted Securities,
the
Prospectus will not contain an untrue statement of a material fact or omit
to
state any material fact required to be stated therein or necessary to make
the
statements therein, in light of the circumstances in which they are made, not
misleading;
(M) cooperate
and assist in any filings required to be made with the NASD and in the
performance of any due diligence investigation by any underwriter that is
required to be undertaken in accordance with the rules and regulations of the
NASD;
(N) otherwise
use its reasonable best efforts to comply with all applicable rules and
regulations of the Commission and all reporting requirements under the rules
and
regulations of the Exchange Act;
(O) make
generally available to its security holders an earning statement satisfying
the
provisions of Section 11(a) of the Securities Act and Rule 158 of the Securities
Act as soon as practicable after the effective date of the Shelf Registration
Statement and in any event no later than 45 days after the end of a 12-month
period (or 90 days, if such period is a fiscal year) beginning with the first
month of the Company’s first fiscal quarter commencing after the effective date
of the Shelf Registration Statement;
-12-
(P) cause
all
Shares covered by the Shelf Registration Statement to be listed or quoted,
as
the case may be, on each securities exchange or automated quotation system
on
which Common Stock is then listed or quoted;
(Q) provide
to Investor upon written request each document filed with the Commission
pursuant to the requirements of Section 13 and Section 15 of the Exchange
Act
after the effective date of the Shelf Registration Statement, unless such
document is available through the Commission’s XXXXX system;
(R) in
connection with any underwritten offering conducted pursuant to Section 5(f)
hereof, make such representations and warranties to Investor and the
underwriters, in form, substance and scope as are customarily made by issuers
to
underwriters in primary underwritten offerings and covering matters including,
but not limited to, those set forth in this Agreement;
(S) in
connection with any underwritten offering conducted pursuant to Section 5(f)
hereof, obtain opinions of counsel to the Company and updates thereof (which
counsel and opinions (in form, scope and substance) shall be reasonably
satisfactory to the Managing Underwriters) addressed to Investor and the
underwriters, if any, covering such matters as are customarily covered in
opinions requested in underwritten offerings and such other matters as may
be
reasonably requested by Investor and underwriters;
(T) in
connection with any underwritten offering conducted pursuant to Section 5(f),
hereof, obtain “comfort” letters and updates thereof from the independent
certified public accountants of the Company (and, if necessary, any other
independent certified public accountants of any subsidiary of the Company or
of
any business acquired by the Company for which financial statements and
financial data are, or are required to be, included in the Shelf Registration
Statement), addressed to Investor and the underwriters, in customary form and
covering matters of the type customarily covered in “comfort” letters in
connection with primary underwritten offerings;
(U) in
connection with any underwritten offering conducted pursuant to Section 5(f)
hereof, deliver such documents and certificates as may be reasonably requested
by Investor and the Managing Underwriters, including those to evidence
compliance with Section 5(b)(ii)(B) and 5(b)(ii)(L) hereof and with any
customary conditions contained in this Agreement or other agreement entered
into
by the Company;
(V) in
connection with underwritten offering conducted pursuant to Section 5(f) hereof,
the Company shall, if requested, promptly include or incorporate in a Prospectus
supplement or post-effective amendment to the Shelf Registration Statement
such
information as the Managing Underwriters reasonably agree should be included
therein and to which the Company does not reasonably object and shall make
all
required filings of such Prospectus supplement or post-effective amendment
as
soon as practicable after it is notified of the matters to be included or
incorporated in such Prospectus supplement or post-effective amendment;
-13-
(W) use
its
reasonable best efforts to take all other steps necessary to effect the
registration of the Shares covered by the Shelf Registration
Statement;
(X) enter
into customary agreements (including, if requested, an underwriting agreement
in
customary form) and take all other appropriate actions in order to expedite
or
facilitate the registration or the disposition of the Shares, and in connection
therewith, if an underwriting agreement is entered into, cause the same to
contain indemnification provisions and procedures no less favorable than
those
set forth in Section 6 hereof; and
(Y) The
actions set forth in clauses (U), (V), (W) and (X) of this Section 5(b)(ii)
shall be performed at (i) the effectiveness of the Shelf Registration Statement
and each post-effective amendment thereto, and (ii) each closing under any
underwriting or similar agreement as and to the extent required
thereunder.
(iii) Investor
agrees that, upon receipt of any notice (a “Suspension
Notice”)
from
the Company under Section 5(b)(ii)(B) or the existence of any fact of the
kind
described in Section 5(b)(ii)(D)(4) hereof, it will forthwith discontinue
disposition of Transfer Restricted Securities pursuant to the Shelf Registration
Statement until:
(A) it
has
received copies of the supplemented or amended Prospectus contemplated by
Section 5(b)(ii)(L) hereof; or
(B) the
end
of the Suspension Period provided under Section 5(b)(ii)(B) or, if earlier,
when
it is advised in writing by the Company that the use of the Prospectus may
be
resumed, and has received copies of any additional or supplemental filings
that
are incorporated by reference in the Prospectus; provided,
however,
that
any such document filed and publicly available through the Commission’s XXXXX
system shall be deemed to have been received by it.
If
so
directed by the Company, each Holder will deliver to the Company (at the
Company’s expense) all copies, other than permanent file copies then in such
Holder’s possession, of the Prospectus covering such Transfer Restricted
Securities that was current at the time of receipt of such notice of
suspension.
(iv) Notwithstanding
anything herein to the contrary, Investor agrees that it shall not be entitled
to sell any of its Transfer Restricted Securities pursuant to a Shelf
Registration Statement, or to receive a Prospectus relating thereto, unless
Investor has furnished the Company with such information regarding Investor
and
the distribution of such Transfer Restricted Securities as the Company may
from
time to time reasonably require for inclusion in such Shelf Registration
Statement. Investor agrees promptly to furnish to the Company all information
required to be disclosed in order to make the information previously furnished
to the Company by Investor not misleading and any other information regarding
Investor and the distribution of such Transfer Restricted Securities as the
Company may from time to time reasonably request in writing. Any sale of any
Transfer Restricted Securities by Investor shall constitute a representation
and
warranty by Investor that the information relating to Investor and its plan
of
distribution is as set forth in the Prospectus delivered by Investor in
connection with such disposition, that such Prospectus does not as of the time
of such sale contain any untrue statement of a material fact relating to or
provided by Investor or its plan of distribution and that such Prospectus does
not as of the time of such sale omit to state any material fact relating to
or
provided by Investor or its plan of distribution necessary to make the
statements in such Prospectus, in the light of the circumstances under which
they were made not misleading.
-14-
(c) Registration
Expenses.
All
expenses incident to the Company’s performance of or compliance with this
Section 5 shall be borne by the Company regardless of whether a Shelf
Registration Statement becomes effective, including, without limitation:
(1)
all
registration and filing fees and expenses (including filings made with the
NASD);
(2)
all
fees and expenses of compliance with federal securities and state Blue Sky
or
securities laws;
(3)
all
expenses of printing (including printing of Prospectuses) and the Company’s
expenses for messenger and delivery services and telephone;
(4)
all
fees and disbursements of counsel to the Company;
(5)
all
application and filing fees in connection with listing (or authorizing for
quotation) the Common Stock on a national securities exchange or automated
quotation system pursuant to the requirements hereof; and
(6)
all
fees and disbursements of independent certified public accountants of the
Company.
The
Company shall bear its internal expenses (including, without limitation, all
salaries and expenses of its officers and employees performing legal, accounting
or other duties), the expenses of any annual audit and the fees and expenses
of
any Person, including special experts, retained by the Company. The Company
shall pay all expenses customarily borne by issuers in an underwritten offering
to the extent set forth in Section 5(f) hereof.
(d) Indemnification
and Contribution.
(i) The
Company agrees to indemnify and hold harmless Investor and its directors,
officers, and employees, Affiliates and agents and each Person, if any, who
controls Investor within the meaning of the Securities Act or the Exchange
Act
(each, an “Indemnified
Person”),
against any loss, claim, damage, liability or expense, joint or several, or
any
action in respect thereof (including, but not limited to, any loss, claim,
damage, liability or action relating to resales of the Transfer Restricted
Securities), to which such Indemnified Person may become subject, insofar as
any
such loss, claim, damage, liability or action arises out of, or is based
upon:
(A) any
untrue statement or alleged untrue statement of a material fact contained in
(i)
the Shelf Registration Statement at the time that it becomes or is declared
effective or in any amendment thereof, in any Prospectus, or in any amendment
or
supplement thereto or any issuer free writing prospectus in respect thereof,
or
(ii) any Blue Sky application or other document or any amendment or supplement
thereto prepared or executed by the Company (or based upon written information
furnished by or on behalf of the Company expressly for use in such Blue Sky
application or other document or amendment or supplement) filed in any
jurisdiction specifically for the purpose of qualifying any or all of the
Transfer Restricted Securities under the securities law of any state or other
jurisdiction (such application or document being hereinafter called a
“Blue
Sky Application”);
or
-15-
(B) the
omission or alleged omission to state therein any material fact required
to be
stated therein or necessary to make the statements therein, in the light
of the
circumstances under which they were made, not misleading, and agrees to
reimburse each Indemnified Person promptly upon demand for any legal or other
expenses reasonably incurred by such Indemnified Person in connection with
investigating, defending, settling, compromising or paying any such loss,
claim,
damage, liability, expense or action; provided,
however,
that
the Company shall not be liable in any such case to the extent that any such
loss, claim, damage, liability or expense arises out of, or is based upon,
any
untrue statement or alleged untrue statement or omission or alleged omission
made in reliance upon and in conformity with written information furnished
to
the Company by or on behalf of Investor (or its related Indemnified Person)
specifically for use therein. The foregoing indemnity agreement is in addition
to any liability which the Company may otherwise have.
The
Company also agrees to indemnify as provided in this Section 5(d)(i) or
contribute as provided in Section 5(d)(v) hereof to Losses (as defined below)
of
each underwriter, if any, of Shares registered under a Shelf Registration
Statement, their directors, officers, employees, Affiliates or agents and each
Person who controls such underwriter on substantially the same basis as that
of
the indemnification of Investor provided in this Section 5(d)(i) and shall,
if
requested by Investor, enter into an underwriting agreement reflecting such
agreement, as provided in Section 5(b)(ii)(Z) hereof.
(ii) Investor
agrees to indemnify and hold harmless the Company, its directors, officers,
employees and agents and each Person, if any, who controls the Company within
the meaning of the Securities Act or the Exchange Act to the same extent as
the
foregoing indemnity from the Company to Investor, but only with reference to
written information relating to Investor furnished to the Company by or on
behalf of Investor specifically for inclusion in the documents referred to
in
the foregoing indemnity; provided,
however,
that
Investor shall not be liable for any indemnity claims hereunder in excess of
the
amount of net proceeds received by Investor from the sale of Transfer Restricted
Securities pursuant to such document(s). This indemnity agreement set forth
in
this Section shall be in addition to any liabilities which any such Holder
may
otherwise have.
(iii) Promptly
after receipt by an indemnified party under this Section 6 of notice of any
claim or the commencement of any action, the indemnified party shall, if a
claim
in respect thereof is to be made against the indemnifying party under this
Section 5(d), notify the indemnifying party in writing of the claim or the
commencement of that action; provided,
however,
that
the failure to notify the indemnifying party (x) shall not relieve it from
any
liability which it may have under paragraphs (i) or (ii) of this Section unless
and to the extent it did not otherwise learn of such action and has been
materially prejudiced (through the forfeiture of substantive rights and
defenses) by such failure and (y) shall not, in any event, relieve it from
any
liability which it may have to an indemnified party otherwise than under
paragraphs (i) or (ii) of this Section 5(d). If any such claim or action shall
be brought against an indemnified party, and it shall notify the indemnifying
party thereof, the indemnifying party shall be entitled to participate therein
and, to the extent that it wishes, jointly with any other similarly notified
indemnifying party, to assume the defense thereof with counsel reasonably
satisfactory to the indemnified party. After notice from the indemnifying party
to the indemnified party of its election to assume the defense of such claim
or
action, the indemnifying party shall not be liable to the indemnified party
under this Section 5(d) for any legal or other expenses subsequently incurred
by
the indemnified party in connection with the defense thereof other than
reasonable costs of investigation.
-16-
(iv) The
indemnifying party under this Section 5(d) shall not be liable for any
settlement of any proceeding effected without its written consent, which
shall
not be withheld unreasonably, but if settled with such consent or if there
is a
final judgment for the plaintiff, the indemnifying party agrees to indemnify
the
indemnified party against any loss, claim, damage, liability or expense by
reason of such settlement or judgment. Notwithstanding the foregoing sentence,
if at any time an indemnified party shall have requested an indemnifying
party
to reimburse the indemnified party for fees and expenses of counsel as
contemplated by Section 5(d)(iii) hereof, the indemnifying party agrees that
it
shall be liable for any settlement of any proceeding effected without its
written consent if (A) such settlement is entered into more than 30 days
after
receipt by such indemnifying party of the aforesaid request, (B) such
indemnifying party shall have received notice of the terms of such settlement
at
least 30 days prior to such settlement being entered into, and (C) such
indemnifying party shall not have reimbursed the indemnified party in accordance
with such request prior to the date of such settlement. Notwithstanding the
immediately preceding sentence, if at any time an indemnified party shall
have
requested an indemnifying party to reimburse the indemnified party for fees
and
expenses of counsel, an indemnifying party shall not be liable for any
settlement effected without its consent if such indemnifying party (W)
reimburses such indemnified party in accordance with such request to the
extent
it considers such request to be reasonable and (X) provides written notice
to
the indemnified party substantiating the unpaid balance as unreasonable,
in each
case prior to the date of such settlement. No indemnifying party shall, without
the prior written consent of the indemnified party, effect any settlement,
compromise or consent to the entry of judgment in any pending or threatened
action, suit or proceeding in respect of which any indemnified party is or
could
have been a party and indemnity was or could have been sought hereunder by
such
indemnified party, unless such settlement, compromise or consent (Y) includes
an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such action, suit or proceeding and (Z) does
not
include a statement as to or an admission of fault, culpability or a failure
to
act by or on behalf of any indemnified party.
(v) If
the
indemnification provided for in this Section 5(d) shall for any reason be
unavailable or insufficient to hold harmless an indemnified party under Section
5(d)(i) or 5(d)(ii) in respect of any loss, claim, damage or liability (or
action in respect thereof) referred to therein, each indemnifying party shall,
in lieu of indemnifying such indemnified party, contribute to the aggregate
amount paid or payable by such indemnified party as a result of such loss,
claim, damage or liability (including legal or other expenses reasonably
incurred in connection with investigating or defending any loss, claim,
liability, damage or action) (collectively “Losses”)
(or
action in respect thereof):
-17-
(A) in
such
proportion as is appropriate to reflect the relative benefits received by
the
Company from the offering and sale of the Transfer Restricted Securities
on the
one hand and Investor with respect to the sale by Investor of the Transfer
Restricted Securities on the other, or
(B) if
the
allocation provided by Section 5(d)(v)(A) is not permitted by applicable
law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in Section 5(d)(v)(A) but also the relative fault of the Company
on
the one hand and Investor on the other in connection with the statements
or
omissions or alleged statements or alleged omissions that resulted in such
loss,
claim, damage or liability (or action in respect thereof), as well as any
other
relevant equitable considerations.
The
relative benefits received by the Company on the one hand and Investor on
the
other with respect to such offering and such sale shall be deemed to be in
the
same proportion as the total net proceeds from the offering of the Shares
purchased under this Agreement (before deducting expenses) received by the
Company, on the one hand, bear to the total proceeds received by Investor
with
respect to its sale of Transfer Restricted Securities on the other. The relative
fault of the parties shall be determined by reference to whether the untrue
or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Company on
the
one hand or Investor on the other, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company and Investor agree that it would not be
just
and equitable if the amount of contribution pursuant to this Section 5(d)(v)
were determined by pro rata
allocation or by any other method of allocation that does not take into account
the equitable considerations referred to in the first sentence of this paragraph
(v).
The
amount paid or payable by an indemnified party as a result of the loss, claim,
damage or liability, or action in respect thereof, referred to above in this
Section 5(d) shall be deemed to include, for purposes of this Section 5(d),
any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending or preparing to defend any such
action or claim.
No
Person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f)
of
the Securities Act) shall be entitled to contribution from any Person who was
not guilty of such fraudulent misrepresentation.
(vi) The
provisions of this Section 5(d) shall remain in full force and effect,
regardless of any investigation made by or on behalf of Investor or the Company
or any of the officers, directors or controlling Persons referred to in Section
5(d) hereof, and will survive the sale by Investor of Transfer Restricted
Securities.
(e) Rule
144.
The
Company agrees that, for so long as any Transfer Restricted Securities remain
outstanding and during any period in which the Company is subject to Section
13
or 15 (d) of the Exchange Act, to make all filings required thereby in a timely
manner in order to permit resales of such Transfer Restricted Securities
pursuant to Rule 144.
(f) Underwritten
Registrations.
-18-
(i) Investor
may sell Transfer Restricted Securities (in whole or in part) in an underwritten
offering; provided,
that the
Company shall not be obligated to participate in more than one underwritten
offering during the Effectiveness Period. If any of the Transfer Restricted
Securities covered by the Shelf Registration Statement are to be sold in
an
underwritten offering, the Managing Underwriters shall be selected by
Investor.
(ii) Investor
may not participate in any underwritten offering pursuant to the Shelf
Registration Statement unless Investor (i) agrees to sell its Transfer
Restricted Shares on the basis reasonably provided in any underwriting
arrangements approved by the Company; (ii) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting agreements
and
other documents reasonably required under the terms of such underwriting
arrangements; and (iii) provides such information required under Section
4(b)(iv) within a reasonable amount of time before such underwritten
offering.
(iii) Investor
shall be responsible for any underwriting discounts and commissions and fees
and, subject to Section 5(c) hereof, expenses of its own counsel. The Company
shall pay all expenses customarily borne by issuers in an underwritten offering,
including but not limited to filing fees, the fees and disbursements of its
counsel and independent public accountants and any printing expenses incurred
in
connection with such underwritten offering.
(g) Additional
Holders; Assignment of Registration Rights.
For
purposes of this Section 5, the term “Investor” shall mean the Investor and any
holder of Transfer Restricted Shares that received Shares in a Transfer
permitted hereunder (each a “Permitted Holder”), and to the extent that an
affirmative action is to be taken by the “Investor” in this Section 5, such
action shall be taken by the Investor and the Permitted Holders holding a
majority of the Transfer Restricted Shares collectively held by the Investor
and
all such Permitted Holders. The rights set forth in this Section 5 may only
be
assigned by the Investor or a Permitted Holder to a third party in connection
with, and as part of, the Transfer of at least 100,000 Transfer Restricted
Shares.
6. Survival
of Representations, Warranties and Agreements; Fees and Expenses.
(a) All
representations and warranties contained herein shall survive the Closing until
the end of the applicable statute of limitations period; provided, however,
that
notwithstanding the foregoing, the representations of the Company set forth
in
Section 3(d) above shall survive only until the first anniversary of the date
hereof. Any claim relating to the representations and warranties contained
herein that has been made prior to the applicable survival date shall survive
until such claim is resolved finally. All covenants contained herein shall
survive indefinitely until, by their respective terms, they are no longer
operative.
(b) The
parties hereby agree to bear each of their own costs and expenses, including
accounting fees, counsel fees and costs and filing fees, incurred by each party
in connection with the development, preparation and execution of this Agreement
and all other documents and instruments relating thereto.
-19-
7. Remedies.
In case
any one or more of the covenants and/or agreements set forth in this Agreement
shall have been breached by the parties, the non-breaching party may proceed
to
protect and enforce its rights either by suit in equity and/or by action
at law,
including, but not limited to, an action for damages as a result of any such
breach and/or an action for specific performance or injunctive relief with
respect to any such covenant or agreement contained in this Agreement if
applicable.
8. Notices.
All
notices or requests provided for or permitted to be given pursuant to this
Agreement must be in writing and may be given or served by (i) depositing
the same in the United States mail, addressed to the party to be notified,
postage paid, and registered or certified with return receipt requested,
(ii) delivering such notice in person to such party, (iii) delivering such
notice by courier service, or (iv) delivering such notice by PDF or facsimile
transmission. Notices so deposited in the mail shall be deemed to have been
given or served on the date on which the party actually received or refused
such
written notice or request, as shown by the date or postmark of any return
receipt indicating the date of delivery or attempted delivery to such receiving
party. Notices so delivered in person, by courier or by PDF or facsimile
transmission shall be deemed to have been given or served on the date on
which
the party actually received or refused such written notice or request, as
shown
by the date of any written receipt or facsimile confirmation indicating the
date
of delivery or attempted delivery to such receiving party. The addresses
and
facsimile numbers of the parties hereto for all purposes of this Agreement
are:
Company -
Hanover
Capital Mortgage Holdings, Inc.
000
Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxx,
XX 00000
Attention:
Xxxxxxx Xxxxxxx, General Counsel
with
a
copy to:
Xxxxxx
Xxxxxxxx LLP
3000
Two
Xxxxx Square
Eighteenth
and Arch Streets
Philadelphia,
PA 19103-2799
Attention:
Xxxxx X. Xxxx, Esq.
Facsimile:
(000) 000-0000
Investor -
RCG
PB,
Ltd.
c/o
Ramius Capital Group, LLC
000
Xxxxx
Xxxxxx, 00xx Xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attention:
Xxxx X. Xxxxxxx
Facsimile:
(000) 000-0000
-20-
with
a
copy to
Mayer,
Brown, Xxxx & Maw LLP
00
Xxxxx
Xxxxxx Xxxxx
Xxxxxxx,
XX 00000
Attention:
Xxxxxx X. Xxxxxxxxxx
Facsimile:
(000) 000-0000
By
giving
the other parties at least five (5) days written notice thereof, any party
hereto shall have the right from time to time and at any time during the term
of
this Agreement to change its respective address or facsimile number and each
party shall have the right to specify as its address any other address within
the United States of America or as its facsimile number any other facsimile
number within the United States of America.
9. Binding
Agreement; Assignment.
This
Agreement and each provision herein shall be binding upon and applicable to,
and
shall inure to the benefit of the parties, their permitted assigns and legal
representatives. Except as set forth in Section 5(g) hereof with respect to
the
assignment of rights under Section 5 (which such assignment shall not require
the consent, written or otherwise, of the Company), this Agreement and the
rights and obligations herein may not be assigned by any party hereto (or its
permitted assigns) without the written consent of the other party
hereto.
10. Consents,
Waivers and Amendments.
No
consent or waiver, express or implied, by any party hereto of the breach,
default or violation by any other party hereto of its obligations hereunder
shall be deemed or construed to be a consent or waiver to or of any other
breach, default or violation of the same or any other obligations of such party
hereunder. Failure on the part of any party hereto to complain of any act of
any
of the other parties or to declare any of the other parties hereto in default,
irrespective or how long such failure continues, shall not constitute a waiver
by such party of its rights hereunder. No amendment to this Agreement shall
be
valid or binding upon the parties hereto unless the parties consent in writing
to such amendment.
11. Applicable
Law.
This
Agreement and all questions relating to its validity, interpretation and
performance shall be governed by and construed in accordance with the laws
of
the State of New York.
12. Entire
Agreement.
This
Agreement and the Repurchase Agreement supersede any prior or contemporaneous
understanding or agreement between parties with regard to the subject matter
hereof and thereof. There are no arrangements, understandings or agreements,
oral or written, among the parties hereto relating to the subject matter of
this
Agreement or the Repurchase Agreement, except those fully expressed herein
or
therein or in documents executed contemporaneously herewith or
therewith.
13. Captions.
The
captions used in this Agreement are for convenience only and shall not be
construed in interpreting this Agreement. Whenever the context so required,
the
neuter shall include the feminine and masculine, and the singular shall include
the plural, and conversely.
14. Headings.
All
section headings herein have been inserted for convenience of reference only
and
shall in no way modify or restrict any of the terms or provisions
hereof.
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15. Counterparts.
This
Agreement may be signed in any number of counterparts, each of which shall
be an
original for all purposes, but all of which taken together shall constitute
only
one agreement. This Agreement shall become binding when one or more counterparts
hereof, individually or taken together, shall bear the signatures of all of
the
parties reflected hereon as the signatories.
[Signature
Page Follows]
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The
parties hereto have executed this Stock Purchase Agreement as of the day and
year first above written.
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Company:
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HANOVER
CAPITAL MORTGAGE HOLDINGS, INC.
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By:
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/s/
Xxxx X. Xxxxxxxx
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Name:
Xxxx X. Xxxxxxxx
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Title:
Chairman, President and Chief Executive
Officer
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Investor:
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RCG
PB, LTD
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By:
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/s/
Xxxxxxx X. Xxxxxxx
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Name:
Xxxxxxx X. Xxxxxxx
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Title:
Authorized Signatory
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