EXHIBIT 10.11.3
EXECUTION COPY
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (this "Agreement") dated as of December
13, 2002, is made and entered into by and between ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (the
"Seller") and Hanover Capital Mortgage Holdings, Inc., a Maryland corporation
(the "Corporation").
WHEREAS, the Seller owns directly, beneficially and of record, 80,794
shares of the Corporation's common stock, par value $0.01 per share ("Common
Stock"); and
WHEREAS, the Seller desires to sell, and the Corporation desires to
purchase, 34,975 shares of Common Stock (the "Shares"), on the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing and of the
agreements, covenants, and representations hereinafter contained, the Seller and
the Corporation, intending to be legally bound, hereby agree as follows:
1. SALE AND PURCHASE OF THE SHARES.
1.1 Agreement to Sell. Upon the terms and conditions set forth
herein, the Seller shall sell, assign, transfer and deliver the Shares free and
clear of all liens, claims, charges, pledges, security interests, pre-emptive
rights, rights of first refusal, obligations, encumbrances and restrictions
(collectively, "Liens"), to the Corporation at the Closing (as defined in
Section 1.3), and the Corporation shall purchase and accept the Shares from the
Seller at the Closing.
1.2 Purchase Price. In consideration of the sale, assignment,
transfer and delivery of the Shares to the Corporation by the Seller, and in
reliance on the representations and covenants hereinafter set forth, the
aggregate purchase price for the Shares shall be $241,803.20 (the "Purchase
Price"). In lieu of receiving any part of the Purchase Price in cash or
otherwise, Seller hereby directs, instructs and authorizes the Corporation to
apply the Purchase Price to satisfy in full the principal and interest accrued
under that certain Promissory Note issued by the Seller to the Corporation on
September 15, 1999, which principal and interest total $247,579 on the date
hereof (the "Note"). In the event the Purchase Price exceeds the amount required
to satisfy Seller's obligation to the Corporation under the Note in full, then
the Corporation shall pay the Seller the excess amount in cash by check.
1.3 Closing. Subject to the terms and conditions of this
Agreement, the sale and purchase of the Shares contemplated hereby (the
"Closing") shall take place on December 13, 2002 by exchange of this Agreement
and all other deliveries contemplated hereby executed by the parties, via
facsimile followed by delivery of such executed documents via overnight
delivery, provided that the Closing may take place by such other means or at
such other time, date or place as may be mutually agreed upon by the parties to
this Agreement in writing.
EXECUTION COPY
1.4 The Seller's Obligations at Closing. At the Closing,
Seller will deliver to the Corporation the following:
(a) certificate(s) representing the Shares (the
"Certificates"), accompanied by a Stock Power duly executed in blank and in
substantially the form attached hereto as Exhibit A; and
(b) such other documents and instruments as may be
required to consummate the transactions contemplated hereby.
1.5 Corporation's Obligations at Closing. At the Closing, the
Corporation will:
(a) apply the Purchase Price as directed in Section
1.2 hereof; and
(b) deliver to the Seller such documents and
instruments as may be required to consummate the transactions contemplated
hereby.
2. REPRESENTATIONS AND WARRANTIES OF THE SELLER. The Seller represents
and warrants to the Corporation that the statements contained in this Section 2
are true and correct as of the date of this Agreement and will be true and
correct as of the Closing:
2.1 Title to the Shares. The Seller is the sole beneficial and
record owner of the Shares, and owns such Shares free and clear of any Liens
(other than any Liens of the Corporation in connection with the Note) and has
and at Closing will have full power and authority to convey such Shares free and
clear of any Liens, and upon delivery of payment for the Shares as herein
provided, the Seller will convey to the Corporation good title thereto free and
clear of any Liens.
2.2 Capacity; Authority; Binding Effect. The Seller has the
legal capacity to execute, deliver and perform this Agreement and each other
document being executed in connection herewith to which he is a party. This
Agreement has been duly and validly executed and delivered by the Seller and
(assuming the due authorization, execution and delivery thereof by the
Corporation) constitutes the legal, valid and binding obligation of the Seller,
enforceable against him in accordance with its terms, except to the extent that
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors rights and remedies generally and subject to general principles of
equity.
2.3 No Conflict. The execution, delivery and performance of
this Agreement by the Seller do not and will not (a) violate or conflict with
any law, ordinance, regulation, rule, code, order, judgment or decree applicable
to the Seller, the Shares, or this Agreement; or (b) result in any breach of, or
constitute a default (or event that, with the giving of notice or lapse of time,
or both, would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or result in the
creation of any encumbrance on any of the Shares pursuant to, any contract to
which the Seller is a party or by which the Shares are bound.
2
EXECUTION COPY
2.4 Brokers and Advisors. The Seller has not taken any action
which would give rise to a valid claim against any party hereto for a brokerage
commission, finder's fee or like payment.
3. REPRESENTATIONS AND WARRANTIES OF THE CORPORATION. The Corporation
hereby represents and warrants to Seller that the statements contained in this
Section 3 are true and correct as of the date of this Agreement and will be true
and correct as of the Closing:
3.1 Organization. The Corporation is a corporation validly
existing under the laws of the state of Maryland.
3.2 Authority; Binding Effect. The Corporation has been duly
authorized to execute and deliver this Agreement and each other document being
executed in connection herewith to which the Corporation is a party. This
Agreement has been duly and validly executed and delivered by the Corporation
and (assuming the due authorization, execution and delivery thereof by the
Seller) constitutes the legal, valid and binding obligation of the Corporation,
enforceable against the Corporation in accordance with its terms, except to the
extent that enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors rights and remedies generally and subject to general principles of
equity.
3.3 Brokers and Advisors. The Corporation has not taken any
action which would give rise to a valid claim against any party hereto for a
brokerage commission, finder's fee or like payment.
4. COVENANTS OF CORPORATION. The Corporation covenants to the Seller
that, except as otherwise consented to in writing by the Seller, from and after
the date of this Agreement, the Corporation will use its best efforts to cause
all of the conditions described in Sections 7.1 and 7.2 of this Agreement to be
satisfied. In the event the Certificates represent shares of Common Stock in
excess of the Shares to be sold hereunder (such number of shares of Common Stock
in excess of the Shares, the "Excess Shares"), then the Corporation will use its
best efforts to provide to EquiServe, as transfer agent for the Corporation (the
"Transfer Agent") the documents reasonably needed by the Transfer Agent, and to
otherwise cooperate with the Seller and the Transfer Agent, in order for the
Transfer Agent to issue certificate(s) representing the Excess Shares to Seller,
and to issue certificate(s) representing the Shares to the Corporation, as soon
after Closing as practicable.
5. COVENANTS OF THE SELLER. Seller covenants to the Corporation that,
except as otherwise consented to in writing by the Corporation, from and after
the date of this Agreement, Seller will use his best efforts to cause all of the
conditions described in Sections 6.1 and 6.2 of this Agreement to be satisfied.
In the event the Certificates include Excess Shares, Seller will use his best
efforts to provide to the Transfer Agent the documents reasonably needed by the
Transfer Agent, and to otherwise cooperate with the Corporation and the Transfer
Agent, in order for the Transfer Agent to issue certificate(s) representing the
Shares to the Corporation,
3
EXECUTION COPY
and to issue certificate(s) representing the Excess Shares to Seller, as soon
after Closing as practicable.
6. CONDITIONS TO THE CORPORATION's OBLIGATIONS. Unless waived by the
Corporation in writing in its sole discretion, all obligations of the
Corporation under this Agreement are subject to the fulfillment, prior to or at
the Closing, of each of the following conditions:
6.1 Representations, Warranties and Covenants of the Seller.
The representations and warranties of the Seller contained in Section 2 of this
Agreement shall be true and correct at and as of the Closing with the same
effect as though such representations and warranties had been made at and as of
such time; Seller shall have performed all obligations and complied with all
covenants required by this Agreement to be performed or complied with by him
prior to the Closing.
6.2 Closing Deliveries of the Seller. Seller shall have made
the Closing deliveries required pursuant to Section 1.4.
6.3 Legal Matters. No claim, action, suit, arbitration,
investigation or other legal or administrative proceeding shall have been
brought or threatened which questions the validity or legality of the
transactions contemplated hereby. No statute, rule, regulation, executive order,
decree or order of any kind shall have been enacted, entered, promulgated or
enforced which prohibits the transactions contemplated hereby.
7. CONDITIONS TO THE SELLER'S OBLIGATIONS. Unless waived by the Seller
in writing, all obligations of the Seller under this Agreement are subject to
the fulfillment, prior to or at the Closing, of each of the following
conditions:
7.1 Representations, Warranties and Covenants. The
representations and warranties of the Corporation contained in Section 3 of this
Agreement shall be true and correct at and as of the Closing with the same
effect as though such representations and warranties had been made at and as of
such time; the Corporation shall have performed all obligations and complied
with all covenants required by this Agreement to be performed or complied with
by it on or prior to the Closing.
7.2 Closing Deliveries of Corporation. The Corporation shall
have taken the actions required pursuant to Section 1.5.
7.3 Legal Matters. No claim, action, suit, arbitration,
investigation or other legal or administrative proceeding shall have been
brought or threatened which questions the validity or legality of the
transactions contemplated hereby. No statute, rule, regulation, executive order,
decree or order of any kind shall have been enacted, entered, promulgated or
enforced which prohibits the transactions contemplated hereby.
4
EXECUTION COPY
8. INDEMNIFICATION.
8.1 Survival of Representations and Warranties. The
representations, warranties, covenants and agreements of the parties hereto
contained in this Agreement, shall be deemed material and shall be deemed to
have been relied upon by the parties hereto. All of the representations,
warranties, covenants, and agreements made by the parties hereto shall survive
the execution and delivery of this Agreement and the Closing hereunder until the
time on which the applicable statute of limitations has expired or indefinitely
if no statute of limitation applies. There shall be no termination of any such
representation or warranty as to which any actions, suit, claim, or counterclaim
or legal, administrative or arbitration proceeding or investigation has been
asserted prior to the termination of such survival period.
8.2 Indemnification by the Seller. Seller shall indemnify,
defend, save and hold the Corporation and any of its agents, representatives,
successors or assigns, harmless from and after the Closing against and in
respect of any and all demands, claims, allegations, assertions, actions or
causes of action, assessments, losses, damages, deficiencies, liabilities, costs
and expenses (including reasonable attorneys' fees and expenses) (collectively,
"Losses") asserted against, imposed upon, resulting to, required to be paid by,
or incurred by the Corporation, directly or indirectly, in connection with,
arising out of, which could result in, or which would not have occurred but for:
(a) any breach by him of any representation or
warranty contained in this Agreement; or
(b) any breach or nonfulfillment of any covenant or
agreement made by him in this Agreement.
8.3 Indemnification by Corporation. The Corporation shall
indemnify, defend, save and hold Seller and any of his agents, representatives,
or heirs harmless from and after the Closing against and in respect of any and
all Losses asserted against, imposed upon, resulting to, required to be paid by,
or incurred by Seller, directly or indirectly, in connection with, arising out
of, which could result in, or which would not have occurred but for:
(a) any breach by the Corporation of any
representation or warranty contained in this Agreement; or
(b) any breach or nonfulfillment of any covenant or
agreement made by the Corporation in this Agreement.
8.4 Notice and Defense. If at any time the Corporation or any
of its agents, representatives, successors or assigns, or Seller or any of his
agents, representatives or heirs (the "Indemnified Party") believes that it has
suffered or incurred, or will suffer or incur, or shall receive notice of, any
asserted Losses claimed to give rise to indemnification under Section 8.2 or
8.3, the Indemnified Party shall promptly give notice thereof ("Claims Notice")
to the indemnifying party (the "Indemnifying Party") of any such Losses. The
Claims Notice shall set forth a brief description of the Losses, and, if known
or reasonably estimable, the amount of the
5
EXECUTION COPY
Losses that have been or may be suffered by the Indemnified Party. The failure
of the Indemnified Party to give any notice required by this Section 8.4 shall
not affect the Indemnified Party's rights under this Section 8 or otherwise
except to the extent that such failure is prejudicial to the rights or
obligations of the Indemnifying Party.
8.5 Third Party Claims. If any Losses relate to any action,
suit, proceeding or demand instituted against the Indemnified Party by a third
party (a "Third Party Claim"), the Indemnifying Party shall be entitled to
participate in the defense of any such Third Party Claim at the sole cost and
expense of the Indemnifying Party through counsel chosen by the Indemnifying
Party and approved by the Indemnified Party (which approval shall not be
unreasonably withheld); provided, however, that any compromise or defense shall
be conducted in a manner which is reasonable and not contrary to the Indemnified
Party's interests and the Indemnified Party shall in all events have a right to
veto any compromise or defense that is unreasonable or which would jeopardize in
any material respect any assets or business of the Indemnified Party or any of
its affiliates or increase the potential liability of, or create a new liability
for, the Indemnified Party or any of its affiliates and, provided further that
the Indemnifying Party shall in all events indemnify the Indemnified Party and
its affiliates against any Losses resulting from the manner in which such Third
Party Claim is compromised or defended, including any failure to pay any such
claim while such litigation is pending. If the Indemnifying Party does so
undertake to compromise and defend a claim, the Indemnifying Party shall notify
the Indemnified Party of its intention to do so within thirty (30) days after
receipt of a Claims Notice. Even if the Indemnifying Party undertakes to
compromise or defend a claim, the Indemnified Party shall have the right to
defend, compromise or settle any Third Party Claim for which a claim for
indemnification has been made hereunder upon notice to the Indemnifying Party
and by waiving any right against the Indemnifying Party with respect to such
Third Party Claim. Each party agrees in all cases to cooperate with the
defending party and its counsel in the compromise of or defending of any such
liabilities or claims. In addition, the nondefending party shall at all times be
entitled to monitor such defense through the appointment, at its own cost and
expense, of advisory counsel of its own choosing.
9. MISCELLANEOUS.
9.1 Expenses. Except as otherwise set forth herein, each party
to this Agreement shall pay all of its expenses relating hereto, including any
income, capital gains, sales, transfer or documentary taxes, and fees and
disbursements of its counsel, accountants and financial advisors, whether or not
the transactions hereunder are consummated.
6
EXECUTION COPY
9.2 Notices. Except as otherwise provided herein, all notices,
requests, demands and other communications under or in connection with this
Agreement shall be in writing, and shall be addressed:
(a) If to the Corporation:
Hanover Capital Mortgage Holdings, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attn: General Counsel
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇. ▇. ▇▇▇▇▇, ▇▇., Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(b) If to the Seller:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇ ▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ #▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone:
Telecopy:
with a copy to:
All such notices, requests, demands or communications shall be mailed postage
prepaid, certified mail, return receipt requested, or by overnight delivery or
delivered personally, and shall be sufficient and effective when delivered to or
received at the address so specified. Any party may change the address at which
it is to receive notice by like written notice to the others.
9.3 Entire Agreement. This Agreement is intended by the
parties to and does constitute the entire agreement of the parties with respect
to the transactions contemplated by this Agreement. This Agreement supersedes
any and all prior understandings between the parties regarding the transactions
contemplated herein, whether written or oral, and this Agreement may be amended,
modified, waived, discharged or terminated only by an instrument in writing
signed by the party against which enforcement of the amendment, modification,
waiver, discharge or termination is sought. Notwithstanding any of the
foregoing, nothing in this Agreement shall be deemed to modify, amend, terminate
or vitiate, in any way, the terms of the Note, and Seller shall remain obligated
by the terms of the Note until the Seller satisfies the Note pursuant to the
terms thereof.
7
EXECUTION COPY
9.4 General. The paragraph headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. All references made and pronouns
used herein shall be construed in the singular or plural, and in such gender, as
the sense and circumstances require. This Agreement may be executed in two
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. This Agreement shall be
effective only upon execution by both parties hereto. This Agreement shall inure
to the benefit of and be binding upon the parties hereto and their respective
successors and assigns, but nothing herein, express or implied, is intended to
or shall confer any rights, remedies or benefits upon any person other than the
parties hereto. This Agreement may not be assigned by any party hereto, except
that the Corporation may assign this Agreement to one or more of its
subsidiaries or affiliates, provided that the Corporation shall remain primarily
liable on this Agreement, notwithstanding any assignment. This Agreement shall
be construed in accordance with and governed by the laws of the State of
Maryland, without giving effect to the principles of conflicts of law thereof.
9.5 Consultation with Attorney. Seller acknowledges that he
has consulted with independent legal counsel of his choosing regarding the terms
of this Agreement before signing it and that in executing this Agreement he has
not relied upon any representations or statements by the Corporation or any of
its shareholders, agents, representatives, employees, or attorneys regarding the
subject matter, basis or effect of this Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
8
EXECUTION COPY
IN WITNESS WHEREOF, the Seller and the Corporation have caused this Agreement to
be duly executed as of the date first above written.
WITNESS/ATTEST: THE SELLER:
[SEAL]
------------------------------ ----------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
CORPORATION:
HANOVER CAPITAL MORTGAGE HOLDINGS, INC.
By: [SEAL]
------------------------------ -------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President and Chief Executive Officer
9
EXECUTION COPY
EXHIBIT A
FORM OF STOCK POWER
FOR VALUE RECEIVED, the undersigned does hereby sell, assign and
transfer unto Hanover Capital Mortgage Holdings, Inc., a Maryland corporation
(the "Corporation"), [________] shares of common stock, $0.01 par value per
share, of the Corporation, standing in the name of the undersigned on the books
of the Corporation, represented by Stock Certificate Number [_____], and the
undersigned does hereby irrevocably constitute and appoint
___________________________, as secretary to transfer the said stock on the
books of the Corporation with full power of substitution.
Dated:________________________
----------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
State of New Jersey )
) ss:
County of Middlesex )
Subscribed and sworn to before me, the undersigned, a Notary Public of
the State of New Jersey, in and for the County of Middlesex, this 13th day of
December, 2002, by ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, known to me (or satisfactorily proven) to
be the person named in the foregoing Stock Power, who made oath that the matters
and facts stated therein are true and correct to the best of his or her
knowledge, information, and belief.
Notary Public
My Commission expires ______________________
