schedule13d.htm

0001359824-10-000043.txt : 20100921 0001359824-10-000043.hdr.sgml : 20100921 20100921163617 ACCESSION NUMBER: 0001359824-10-000043 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 20100921 DATE AS OF CHANGE: 20100921 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: HOT TOPIC INC /CA/ CENTRAL INDEX KEY: 0001017712 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-APPAREL & ACCESSORY STORES [5600] IRS NUMBER: 770198182 STATE OF INCORPORATION: CA FISCAL YEAR END: 0130 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-48895 FILM NUMBER: 101082900 BUSINESS ADDRESS: STREET 1: 18305 EAST SAN JOSE AVENUE CITY: CITY OF INDUSTRY STATE: CA ZIP: 91748 BUSINESS PHONE: 6268394681 MAIL ADDRESS: STREET 1: 18305 EAST SAN JOSE AVENUE CITY: CITY OF INDUSTRY STATE: CA ZIP: 91768 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: Becker Drapkin Management, L.P. CENTRAL INDEX KEY: 0001346543 IRS NUMBER: 000000000 STATE OF INCORPORATION: TX FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 300 CRESCENT COURT STREET 2: SUITE 1111 CITY: DALLAS STATE: TX ZIP: 75201 BUSINESS PHONE: (214) 756-6037 MAIL ADDRESS: STREET 1: 300 CRESCENT COURT STREET 2: SUITE 1111 CITY: DALLAS STATE: TX ZIP: 75201 FORMER COMPANY: FORMER CONFORMED NAME: SRB Management, L.P. DATE OF NAME CHANGE: 20051209 SC 13D/A 1 schedule13d.htm HOT TOPIC, INC. SCHEDULE 13DA 09 21 10 schedule13d.htm

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

(Amendment No. 1)

Under the Securities Exchange Act of 1934

HOT TOPIC, INC.

(Name of Issuer)

Common Stock

(Title of Class of Securities)

441339108

(CUSIP Number)

Becker Drapkin Management, L.P.

Attn: Steven R. Becker

Attn: Matthew A. Drapkin

300 Crescent Court

Suite 1111

Dallas, Texas 75201

(214) 756-6016

With a copy to:

Richard J. Birns, Esq.

Boies, Schiller & Flexner LLP

575 Lexington Avenue, 7th Floor

New York, NY 10022

(212) 446-2300

(Name, Address and Telephone Number of Person

Authorized to Receive Notices and Communications)

September 19, 2010

(Date of Event which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box: o

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 240.13d-7 for other parties to whom copies are to be sent.

* The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

SCHEDULE 13D

CUSIP No. 441339108
1	NAME OF REPORTING PERSON / I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Becker Drapkin Management, L.P.
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) þ (b) ¨
3	SEC USE ONLY
4	SOURCE OF FUNDS (See Instructions) OO
5	CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) o
6	CITIZENSHIP OR PLACE OF ORGANIZATION Texas
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7	SOLE VOTING POWER 759,400
		8	SHARED VOTING POWER 1,585,949
		9	SOLE DISPOSITIVE POWER 759,400
		10	SHARED DISPOSITIVE POWER 1,585,949
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 2,345,349
12	CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) o
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 5.3%
14	TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) IA, PN

CUSIP No. 441339108
1	NAME OF REPORTING PERSON / I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Becker Drapkin Partners (QP), L.P.
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) þ (b) ¨
3	SEC USE ONLY
4	SOURCE OF FUNDS (See Instructions) WC
5	CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) o
6	CITIZENSHIP OR PLACE OF ORGANIZATION Texas
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7	SOLE VOTING POWER 701,852
		8	SHARED VOTING POWER 0
		9	SOLE DISPOSITIVE POWER 701,852
		10	SHARED DISPOSITIVE POWER 0
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 701,852
12	CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) o
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 1.6%
14	TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) PN

CUSIP No. 441339108
1	NAME OF REPORTING PERSON / I.R.S. IDENTIFICATION NO. OF ABOVE PERSON. Becker Drapkin Partners, L.P.
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) þ (b) ¨
3	SEC USE ONLY
4	SOURCE OF FUNDS (See Instructions) WC
5	CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) o
6	CITIZENSHIP OR PLACE OF ORGANIZATION Texas
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7	SOLE VOTING POWER 86,744
		8	SHARED VOTING POWER 0
		9	SOLE DISPOSITIVE POWER 86,744
		10	SHARED DISPOSITIVE POWER 0
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 86,744
12	CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) o
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 0.2%
14	TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) PN

CUSIP No. 441339108
1	NAME OF REPORTING PERSON / I.R.S. IDENTIFICATION NO. OF ABOVE PERSON. BD Partners I, L.P.
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) þ (b) ¨
3	SEC USE ONLY
4	SOURCE OF FUNDS (See Instructions) WC
5	CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) o
6	CITIZENSHIP OR PLACE OF ORGANIZATION Texas
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7	SOLE VOTING POWER 797,353
		8	SHARED VOTING POWER 0
		9	SOLE DISPOSITIVE POWER 797,353
		10	SHARED DISPOSITIVE POWER 0
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 797,353
12	CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) o
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 1.8%
14	TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) PN

CUSIP No. 441339108
1	NAME OF REPORTING PERSON / I.R.S. IDENTIFICATION NO. OF ABOVE PERSON BC Advisors, LLC
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) þ (b) ¨
3	SEC USE ONLY
4	SOURCE OF FUNDS (See Instructions) OO
5	CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) o
6	CITIZENSHIP OR PLACE OF ORGANIZATION Texas
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7	SOLE VOTING POWER 0
		8	SHARED VOTING POWER 2,345,349
		9	SOLE DISPOSITIVE POWER 0
		10	SHARED DISPOSITIVE POWER 2,345,349
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 2,345,349
12	CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) o
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 5.3%
14	TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) IA, OO

CUSIP No. 441339108
1	NAME OF REPORTING PERSON / I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Steven R. Becker
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) þ (b) ¨
3	SEC USE ONLY
4	SOURCE OF FUNDS (See Instructions) OO
5	CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) o
6	CITIZENSHIP OR PLACE OF ORGANIZATION United States
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7	SOLE VOTING POWER 0
		8	SHARED VOTING POWER 2,345,349
		9	SOLE DISPOSITIVE POWER 0
		10	SHARED DISPOSITIVE POWER 2,345,349
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 2,345,349
12	CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) o
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 5.3%
14	TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) IN

CUSIP No. 441339108
1	NAME OF REPORTING PERSON / I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Matthew A. Drapkin
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) þ (b) ¨
3	SEC USE ONLY
4	SOURCE OF FUNDS (See Instructions) OO
5	CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) o
6	CITIZENSHIP OR PLACE OF ORGANIZATION United States
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7	SOLE VOTING POWER 0
		8	SHARED VOTING POWER 2,345,349
		9	SOLE DISPOSITIVE POWER 0
		10	SHARED DISPOSITIVE POWER 2,345,349
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 2,345,349
12	CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) o
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 5.3%
14	TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) IN

This Amendment No. 1 to Schedule 13D amends and supplements the Schedule 13D (the “Original Schedule 13D”) filed with the Securities and Exchange Commission on September 2, 2010, with respect to the common stock (the “Common Stock”) of Hot Topic, Inc., a California corporation (the “Issuer”).

On August 24, 2010, certain of the Reporting Persons (as defined in Item 2 of the Original Schedule 13D) entered into a Group Agreement (the “Group Agreement”) with the Carlson Parties (as defined in Item 5 of the Original Schedule 13D). The Group Agreement was attached to the Original Schedule 13D as Exhibit 1 thereto and is incorporated herein by reference. As described in Item 6 of this statement on Schedule 13D (this “Schedule 13D”), on September 19, 2010, the Reporting Persons and the Carlson Parties terminated (i) their status as a “group” for purposes of Section 13(d)(3) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Rule 13d-5(b)(1) promulgated thereunder with respect t o the Common Stock and (ii) the Group Agreement. The security interests reported in this Schedule 13D do not include security interests owned by the Carlson Parties. This Schedule 13D only reports information on the Reporting Persons identified in the cover pages hereto and does not report any acquisition or disposition of Common Stock by the Carlson Parties.

Item 4.	Purpose of Transaction
	Item 4 is amended and supplemented to add the following information for updating as of the date hereof: (a)-(j) On September 19, 2010, the Issuer entered into an agreement (the “Standstill Agreement”) with the Reporting Persons that will result in Steven R. Becker and Matthew A. Drapkin becoming members of the Board of Directors of the Issuer (the “Board”). The following is a brief description of certain terms of the Standstill Agreement, which description is qualified in its entirety by reference to the full text of the Standstill Agreement which is attached as Exhibit 1 hereto and incorporated by reference herein. Under the terms of the Standstill Agreement, (a) the Issuer has agreed on or before October 1, 2010 (i) to increase the size of the Board by two directors, to a total of nine directors, if required to meet the Issuer’s other obligations under the Standstill Agreement, (ii) to appoint Mr. Becker and Mr. Drapkin as directors of the Board and (iii) to appoint one of Mr. Becker and Mr. Drapkin to the Compensation Committee of the Board and the other of them to the Governance and Nominating Committee of the Board, (b) the Issuer has agreed to nominate Mr. Becker and Mr. Drapkin for reelection to the Board at the 2011 annual meeting of shareholders (the “2011 Annual Meeting”), (c) the Reporting Persons have agreed (i) to vote or cause to be voted the shares of Common Stock beneficially owned by them, as of the record date for the 2011 Annual Meeting, in favor of the Board’s nominees for director at the 2011 Annual Meeting and (ii) if the Issuer nominates Mr. Becker and Mr. Drapkin for reelection to the Board at the Issuer’s 2012 annual meeting of shareholders (the “2012 Annual Meeting”), to vote or cause to be voted the shares of Common Stock beneficially owned by them, as of the record date for the 2012 Annual Meeting, in favor of the Board’s nominees for director at the 2012 Annual Meeting; provided, in each case, that such directors are either current members of the Board or otherwise reasonably acceptable to the Reporting Persons, and (d) the Reporting Persons have agreed to abide by certain standstill provisions until the second anniversary of the Standstill Agreement (or such earlier date upon the occurrence of certain events, as described in the Standstill Agreement). Under the terms of the Standstill Agreement, (i) the Issuer has also agreed that prior to the 2012 Annual Meeting, the Board shall only be increased in connection with the appointment of Mr. Becker and Mr. Drapkin and (ii) if either of Mr. Becker or Mr. Drapkin is unable or unwilling to serve (or continue to serve) as a director for any reason, then the Company and the Reporting Persons shall agree on a replacement for such director(s). On September 20, 2010, the Issuer issued a press release announcing Mr. Becker’s and Mr. Drapkin’s appointment to the Board and that Mr. Becker will serve on the Compensation Committee of the Board and that Mr. Drapkin will serve on the Governance and Nominating Committee of the Board.
Item 5.	Interest in Securities of the Issuer
	Subparagraphs (a) through (c) of Item 5 are amended and supplemented to add the following information for updating as of the date hereof: As a result of the Group Termination Agreement described in Item 6 of this Schedule 13D, the Reporting Persons and the Carlson Parties have terminated their status as a “group” for purposes of Section 13(d)(3) of the Exchange Act and Rule 13d-5(b)(1) promulgated thereunder. The Reporting Persons may be deemed to beneficially own in the aggregate 2,345,349 shares of Common Stock. Based upon a total of 44,579,427 outstanding shares of Common Stock, as reported in the Issuer’s quarterly report on Form 10-Q for the period ending July 31, 2010, the Reporting Persons’ shares represent approximately 5.261% of the outstanding shares of Common Stock. BD Partners I owns 797,353 shares of Common Stock (the “BD Partners I Shares”), which represent approximately 1.789% of the outstanding shares of Common Stock. As general partner of the Becker Drapkin Funds, BD Management may be deemed to have the shared power to vote or direct the vote of (and the shared power to dispose or direct the disposition of) the Becker Drapkin Funds Shares. BD Management in its capacity as investment manager for the Managed Account has the sole power to vote or direct the vote of (and to dispose or direct the disposition of) 759,400 shares held by the Managed Account (the “Managed Account Shares”), which represent approximately 1.703% of the outstanding shares of Common Stock. BD Management disclaims beneficial ownership of the Becker Drapkin Funds Shares. (c) The trading dates, number of shares of Common Stock purchased or sold, and the price per share of Common Stock for all other transactions by the Reporting Persons in shares of Common Stock since their original filing of this Schedule 13D, all of which were brokered transactions, are set forth below.

Name of Reporting Person	Date	Number of Shares Purchased (Sold)	Average Price per Share
BD Management	9/7/2010	19,400	$5.3500
BD Management	9/10/2010	15,000	$5.3612
BD Partners I	9/8/2010	15,000	$5.3760
BD Partners I	9/9/2010	15,000	$5.3700
BD Partners I	9/10/2010	15,000	$5.3612


Item 6.	Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer
	Item 6 is amended and supplemented to add the following information for updating as of the date hereof: On September 19, 2010, the Issuer and the Reporting Persons entered into the Standstill Agreement, the terms of which are described in Item 4 of this Schedule 13D. On September 19, 2010, the Reporting Persons party to the Group Agreement entered into an agreement (the “Group Termination Agreement”) with the Carlson Parties whereby the parties thereto, on behalf of themselves and their respective affiliates, terminated (i) their status as a “group” for purposes of Section 13(d)(3) of the Exchange Act and Rule 13d-5(b)(1) promulgated thereunder with respect to the Common Stock and (ii) the Group Agreement. The foregoing description is qualified in its entirety by reference to the full text of the Group Termination Agreement, a copy of which is attached as Exhibit 2 and incorporated by reference herein. On September 21, 2010, the Reporting Persons entered into the Joint Filing Agreement pursuant to which they agreed to the joint filing on behalf of each of them of statements (including any amendments) on Schedule 13D with respect to the securities of the Issuer. A copy of this agreement is attached as Exhibit 3 hereto and is incorporated by reference herein.
Item 7.	Material to Be Filed as Exhibits
Exhibit 1	Agreement, dated September 19, 2010, by and among Hot Topic, Inc.; Steven R. Becker; Matthew A. Drapkin; Becker Drapkin Management, L.P.; Becker Drapkin Partners (QP), L.P.; Becker Drapkin Partners, L.P., BD Partners I, L.P.; and BC Advisors, LLC.
Exhibit 2	Group Termination Agreement, dated September 19, 2010, by and among Becker Drapkin Management, L.P.; BC Advisors, LLC; Steven R. Becker; Matthew A. Drapkin; Double Black Diamond Offshore Ltd.; Black Diamond Offshore Ltd.; Carlson Capital, L.P.; Asgard Investment Corp.; and Clint D. Carlson.
Exhibit 3	Joint Filing Agreement, dated September 21, 2010, by and among BD Management, L.P.; Becker Drapkin Partners (QP), L.P.; Becker Drapkin Partners, L.P.; BD Partners I, L.P.; BC Advisors, LLC; Steven R. Becker; and Matthew A. Drapkin.

SIGNATURES

After reasonable inquiry and to the best of each of the undersigned’s knowledge and belief, each of the undersigned, severally and not jointly, certifies that the information set forth in this statement is true, complete and correct.

Dated: September 21, 2010

BECKER DRAPKIN MANAGEMENT, L.P.

By:	BC Advisors, LLC, its general partner

	By:	/s/ Andrew S. McLelland
		Name: Andrew S. McLelland
		Title: Attorney-in-Fact

BECKER DRAPKIN PARTNERS, (QP), L.P.

By:	Becker Drapkin Management, L.P., its general partner

	By:	BC Advisors, LLC, its general partner

		By:	/s/ Andrew S. McLelland
			Name: Andrew S. McLelland
			Title: Attorney-in-Fact

BECKER DRAPKIN PARTNERS, L.P.

By:	Becker Drapkin Management, L.P., its general partner

	By:	BC Advisors, LLC, its general partner

		By:	/s/ Andrew S. McLelland
			Name: Andrew S. McLelland
			Title: Attorney-in-Fact

BD PARTNERS I, L.P.

By:	Becker Drapkin Management, L.P., its general partner

	By:	BC Advisors, LLC, its general partner

		By:	/s/ Andrew S. McLelland
			Name: Andrew S. McLelland
			Title: Attorney-in-Fact

BC ADVISORS, LLC

By:	/s/ Andrew S. McLelland
	Name: Andrew S. McLelland
	Title: Attorney-in-Fact

STEVEN R. BECKER

By:	/s/ Andrew S. McLelland
	Name: Andrew S. McLelland
	Title: Attorney-in-Fact

MATTHEW A. DRAPKIN

By:	/s/ Andrew S. McLelland
	Name: Andrew S. McLelland
	Title: Attorney-in-Fact

EX-1.HTM 2 exhibit1.htm STANDSTILL AGREEMENT exhibit1.htm

Exhibit 1

EXECUTION VERSION

Agreement

This Agreement, dated as of September 19, 2010, is by and among Hot Topic, Inc., a California corporation (the “Company”), Steven R. Becker, an individual resident of Texas (“Becker”) Matthew A. Drapkin, an individual resident of New York (“Drapkin”), and the other individuals and entities that are signatories hereto (collectively with Becker and Drapkin, the “Shareholder Group”).

WHEREAS, the Company and the Shareholder Group have determined that the interests of the Company and its shareholders would be best served by adding Becker and Drapkin to the Company’s Board of Directors on the terms and conditions set forth in this Agreement.

NOW, THEREFORE, in consideration of the foregoing premises and the respective representations, warranties, covenants, agreements and conditions hereinafter set forth, and intending to be legally bound hereby, the parties hereby agree as follows:

1. Representations and Warranties of the Company. The Company represents and warrants as follows as of the date hereof:

(a) The Company has the corporate power and authority to execute, deliver and carry out the terms and provisions of this Agreement and to consummate the transactions contemplated hereby.

(b) This Agreement has been duly and validly authorized, executed and delivered by the Company, constitutes a valid and binding obligation and agreement of the Company, and is enforceable against the Company in accordance with its terms, except as enforcement thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or similar laws affecting the rights of creditors and subject to general equity principles.

(c) The execution, delivery and performance of this Agreement by the Company does not and will not (i) violate or conflict with any law, rule, regulation, order, judgment or decree applicable to it, or (ii) result in any material breach or violation of or constitute a material default (or an event which with notice or lapse of time or both could become a material default) under or pursuant to, or result in the loss of a material benefit under, or give any right of termination, amendment, acceleration or cancellation of, any organizational document, agreement, contract, commitment, understanding or arrangement to which the Company is a party or by which it is bound.

2. Representations and Warranties of the Shareholder Group. Each of the members of the Shareholder Group severally, and not jointly, represents and warrants with respect to himself or itself as follows as of the date hereof:

(a) Such party has the power and authority to execute, deliver and carry out the terms and provisions of this Agreement and to consummate the transactions contemplated hereby. Such party, if an entity, has the corporate, limited partnership or limited liability company power and authority, as applicable, to execute, deliver and carry out the terms and provisions of this Agreement and to consummate the transactions contemplated hereby.

(b) This Agreement has been duly and validly authorized, executed, and delivered by such party, constitutes a valid and binding obligation and agreement of such party, and is enforceable against such party in accordance with its terms, except as enforcement thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or similar laws affecting the rights of creditors and subject to general equity principles.

(c) As of the date thereof, such party was the “beneficial owner” of a number of shares of Common Stock (as defined below) as set forth on the cover page relating to such party in the Schedule 13D filed by Becker Drapkin Management, L.P. with the Securities and Exchange Commission (the “SEC”) on September 2, 2010 (the “Schedule 13D”). As of the date hereof, the members of the Shareholder Group own in the aggregate 2,345,349 shares of Common Stock. Except for those Affiliates and Associates of such member with respect to whom a cover page is included in the Schedule 13D, no other Affiliate or Associate of such member beneficially owns any shares of Common Stock.

(d) The execution, delivery and performance of this Agreement by such party does not and will not (i) violate or conflict with any law, rule, regulation, order, judgment or decree applicable to him or it, or (ii) result in any material breach or violation of or constitute a material default (or an event which with notice or lapse of time or both could become a material default) under or pursuant to, or result in the loss of a material benefit under, or give any right of termination, amendment, acceleration or cancellation of, any organizational document, agreement, contract, commitment, understanding or arrangement to which he or it is a party or by which he or it is bound.

3. Definitions. For purposes of this Agreement:

(a) The terms “Affiliate” and “Associate” have the respective meanings set forth in Rule 12b-2 promulgated by the SEC under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), provided that neither “Affiliate” nor “Associate” shall include (i) any person that is a publicly held concern and is otherwise an Affiliate or Associate by reason of the fact that a principal of any member of the Shareholder Group serves as a member of the board of directors or similar governing body of such concern, (ii) such member of the board of directors or other similar governing body of such concern or (iii) any entity which is an Associate solely by reason of clause (1) of the definition of Associate in Rule 12b-2; the terms “beneficial owner” and “beneficial ownership” shall have the respective meanings as set forth in Rule 13d-3 promulgated by the SEC under the Exchange Act; and the terms “person” or “persons” shall mean any individual, corporation (including not-for-profit), general or limited partnership, limited liability company, joint venture, estate, trust, association, organization or other entity of any kind or nature.

(b) “Board” means the Board of Directors of the Company.

(d) “Standstill Period” means the period from the date hereof until the earlier of:

(i) the date on which the Governance and Nominating Committee notifies either Becker or Drapkin pursuant to Section 4(f) below that it has not resolved to nominate either of Becker and Drapkin for election to the Board at Company’s 2012 Annual Meeting of Shareholders (the “2012 Annual Meeting”);

(ii) the two year anniversary of the date hereof; or

(iii) such date, if any, as the Company has materially breached any of its representations, warranties, commitments or obligations set forth in Sections 1, 4(a), 4(b), 4(e), and 4(f) of this Agreement (the “Principal Obligations”).

4. Election of Becker and Drapkin; Related Matters.

(a) As soon as reasonably practicable but in any event within ten business days from the date hereof (the “Appointment Date”):

(i) In accordance with the Company’s Amended and Restated Articles of Incorporation and Amended and Restated Bylaws, the Board shall have, if required to meet its other obligations pursuant to this Agreement, adopted a resolution increasing the size of the Board by two directors, to a total of nine directors, effective as of the Appointment Date;

(ii) In accordance with the Company’s Amended and Restated Articles of Incorporation and Amended and Restated Bylaws, the Board shall have appointed Becker and Drapkin as directors of the Company, effective as of the Appointment Date, to serve as members of the Board until the Company’s 2011 Annual Meeting of Shareholders (the “2011 Annual Meeting”) and until their successors are duly elected and qualified; and

(iii) The Board shall adopt a resolution appointing one of Becker or Drapkin to serve as a member of the Compensation Committee and appoint the other of Becker or Drapkin to serve as a member of the Governance and Nominating Committee, effective as of the Appointment Date, and each of Becker and Drapkin shall continue to serve on the applicable Committee so long as he continues to be a member of the Board.

(b) The Board and the Governance and Nominating Committee shall nominate Becker and Drapkin for election as directors at the 2011 Annual Meeting. The Company agrees to recommend that the Company’s shareholders vote, and shall solicit proxies, in favor of the election of each of Becker and Drapkin at such meeting and otherwise support Becker and Drapkin for election in a manner no less rigorous and favorable than the manner in which the Company supports its other nominees.

(c) The members of the Shareholder Group shall promptly file an amendment to the Schedule 13D reporting the entry into this agreement, amending applicable items to conform to their obligations hereunder and appending or incorporating by reference this Agreement as an exhibit thereto. Such amendment shall also reflect the termination of the “group” pursuant to Rule 13d−5(b)(1) promulgated under the Exchange Act, consisting of Becker Drapkin Management, L.P. and certain of its affiliates and Carlson Capital, L.P. and certain of its affiliates. Such members of the Shareholder Group shall provide to the Company a reasonable opportunity to review and comment on such amendments in advance of filing, and shall consider in good faith the reasonable and timely comments of t he Company. The Company, Becker and Drapkin shall discuss in good faith whether or not the Company shall issue a press release with respect to the execution and delivery of this Agreement by the parties hereto and the material provisions hereof, which press release, if issued, will be subject to the mutual agreement of the parties; if the Company files a Form 8-K in lieu of a press release, the Company shall provide to Becker and Drapkin a reasonable opportunity to review and comment on such Form 8-K in advance of its filing, and shall consider in good faith the reasonable and timely comments of Becker and Drapkin.

(d) So long as the Company has complied and is complying with the Principal Obligations, each member of the Shareholder Group shall cause all shares of Common Stock owned of record and shall instruct the record owner, in case of all shares of Common Stock beneficially owned but not of record, by it and their respective Affiliates, as of the record date for the 2011 Annual Meeting, to be present for quorum purposes and to be voted, and shall cause all shares of Common Stock held by their respective Associates to be present for quorum purposes and to be voted, in favor of all directors nominated by the Board for election at the 2011 Annual Meeting; provided such directors nominated by the Board are either current members of the Board or otherwise reasonably acceptable to the Sharehold er Group.

(e) The Company agrees that the Board shall only be increased at any time prior to the conclusion of the 2012 Annual Meeting in connection with the appointment of Becker and Drapkin.

(f) At least 60 days prior to the last date upon which a notice to the Secretary of the Company of nominations of persons for election to the Board or the proposal of business at the 2012 Annual Meeting would be considered timely under the Company’s Amended and Restated Bylaws, the Governance and Nominating Committee will notify each of Becker and Drapkin whether it has resolved to recommend them for re-election to the Board at the 2012 Annual Meeting. If the Governance and Nominating Committee has resolved to so recommend each of Becker and Drapkin, (i) the Board and the Governance and Nominating Committee shall nominate Becker and Drapkin for election as directors at the 2012 Annual Meeting, (ii) the Company shall recommend that the Company’s shareholders vote, and sh all solicit proxies, in favor of the election of each of Becker and Drapkin at such meeting and otherwise support Becker and Drapkin for election in a manner no less rigorous and favorable than the manner in which the Company supports its other nominees and (iii) so long as the Company has complied and is complying with the Principal Obligations, each member of the Shareholder Group shall cause all shares of Common Stock owned of record and shall instruct the record owner, in case of all shares of Common Stock beneficially owned but not of record, by it and their respective Affiliates, as of the record date for the 2012 Annual Meeting, to be present for quorum purposes and to be voted, and shall cause all shares of Common Stock held by their respective Associates to be present for quorum purposes and to be voted, in favor of all directors nominated by the Board for election at the 2012 Annual Meeting; provided such directors nominated by the Board are either current members of the Board or otherwise reasonab ly acceptable to the Shareholder Group.

(g) If at any time prior to the termination of the Standstill Period, either of Becker or Drapkin is unable or unwilling to serve (or continue to serve) as a director of the Company for any reason, then the Shareholder Group and the Company shall agree on a replacement for such director(s), and for all purposes the provisions of this Agreement with respect to either Becker’s or Drapkin’s rights and obligations as a director (and not as a member of the Shareholder Group) shall apply to such replacement director.

5. Standstill.

Each of the members of the Shareholder Group agrees that, during the Standstill Period, he or it will not, and he or it will cause each of such person’s Affiliates or agents or other persons acting on his or its behalf not to, and will cause his or its respective Associates not to:

(a) acquire, offer to acquire or agree to acquire, alone or in concert with any other individual or entity, by purchase, tender offer, exchange offer, agreement or business combination or any other manner, beneficial ownership of any securities of the Company or any securities of any Affiliate of the Company, if, after completion of such acquisition or proposed acquisition, such party would beneficially own more than 14.99% of the outstanding shares of Common Stock, provided, however, that this restriction shall not apply to any securities received by Becker or Drapkin pursuant to Section 8 of this Agreement;

(b) submit any shareholder proposal (pursuant to Rule 14a-8 promulgated by the SEC under the Exchange Act or otherwise) or any notice of nomination or other business for consideration, or nominate any candidate for election to the Board or oppose the directors nominated by the Board, other than as expressly permitted by this Agreement;

(c) form, join in or in any other way participate in a “partnership, limited partnership, syndicate or other group” within the meaning of Section 13(d)(3) of the Exchange Act with respect to the Common Stock or deposit any shares of Common Stock in a voting trust or similar arrangement or subject any shares of Common Stock to any voting agreement or pooling arrangement, other than solely with other members of the Shareholder Group or one or more Affiliates of a member of the Shareholder Group with respect to the Common Stock currently owned as set forth in Section 2(c) of this Agreement or acquired in the future subject to the limitations set forth in Section 5(a) or to the extent such a group may be deemed to result with the Company or any of its Affiliates as a result of this Agreement;

(d) solicit proxies or written consents of shareholders, or otherwise conduct any nonbinding referendum with respect to Common Stock, or make, or in any way participate in, any “solicitation” of any “proxy” within the meaning of Rule 14a-1 promulgated by the SEC under the Exchange Act to vote, or advise, encourage or influence any person with respect to voting, any shares of Common Stock with respect to any matter, or become a “participant” in any contested “solicitation” for the election of directors with respect to the Company (as such terms are defined or used under the Exchange Act and the rules promulgated by the SEC thereunder), other than a “solicitation” or acting as a “participant” in support of al l of the nominees of the Board at the 2011 Annual Meeting or 2012 Annual Meeting as set forth in this Agreement;

(e) seek, in any capacity other than as a member of the Board, to call, or to request the calling of, a special meeting of the shareholders of the Company, or seek to make, or make, a shareholder proposal at any meeting of the shareholders of the Company or make a request for a list of the Company’s shareholders (or otherwise induce, encourage or assist any other person to initiate or pursue such a proposal or request) or otherwise acting alone, or in concert with others, seek to control or influence the governance or policies of the Company, except as expressly permitted by this Agreement;

(f) effect or seek to effect, in any capacity other than as a member of the Board (including, without limitation, by entering into any discussions, negotiations, agreements or understandings with any third person), offer or propose (whether publicly or otherwise) to effect, or cause or participate in, or in any way assist or facilitate any other person to effect or seek, offer or propose (whether publicly or otherwise) to effect or cause or participate in (i) any acquisition of any material assets or businesses of the Company or any of its subsidiaries, (ii) any tender offer or exchange offer, merger, acquisition or other business combination involving the Company or any of its subsidiaries, or (iii) any recapitalization, restructuring, liquidation, dissolution or oth er extraordinary transaction with respect to the Company or any of its subsidiaries;

(g) publicly disclose, or cause or facilitate the public disclosure (including without limitation the filing of any document or report with the SEC or any other governmental agency or any disclosure to any journalist, member of the media or securities analyst) of, any intent, purpose, plan or proposal to obtain any waiver, or consent under, or any amendment of, any of the provisions of Section 4(d) or this Section 5, or otherwise seek (in any manner that would require public disclosure by any of the members of the Shareholder Group or their Affiliates or Associates) to obtain any waiver, consent under, or amendment of, any provision of this Agreement;

(h) publicly disparage any member of the Board or management of the Company; provided that this provision shall not apply to compelled testimony, either by legal process, subpoena or otherwise, or to communications that are required by an applicable legal obligation and are subject to contractual provisions providing for confidential disclosure;

(i) enter into any arrangements, understandings or agreements (whether written or oral) with, or advise, finance, assist or encourage, any other person that engages, or offers or proposes to engage, in any of the foregoing; or

(j) take or cause or induce or assist others to take any action inconsistent with any of the foregoing.

Notwithstanding the foregoing, it is understood and agreed that this Agreement shall not be deemed to prohibit the Shareholder Group from (i) making public statements (including statements contemplated by Rule 14a-1 (1) (2) (iv) under the Exchange Act), (ii) engaging in discussion with other stockholders or (iii) soliciting, or encouraging or participating in the solicitation of, proxies or consents with respect to voting securities of the Company (so long as such discussions are in compliance with Section 5(c) hereof) in each case with respect to any transaction that has been publicly announced by the Company involving (1) the recapitalization of the Company, (2) an acquisition, disposition or sale of assets or a business by the Company where the consideration to be received or paid in such transaction requires approval by the holders of the Common Stock or (3) a change of control of the Company.

Further, it is understood and agreed that this Agreement shall not be deemed to prohibit Becker or Drapkin from engaging in any lawful act in his capacity as a director of the Company.

6. Company Policies. By the Appointment Date, each of Becker and Drapkin will have reviewed the Company’s Standards of Business Ethics, Corporate Governance Guidelines, Insider Trading Policy, Window Period Policy and Policy on Majority Votes in Director Elections (“Majority Voting Policy”) and agrees to abide by the provisions thereof during his service as a director of the Company. The members of the Shareholder Group acknowledge that they are aware that United States securities law prohibits any person who has material non-public information about a company from purchasing or selling any securities of such company, or from communicating such information to any other person under circumstances in which it is reasonably foreseeable that such p erson is likely to purchase or sell such securities. The members of the Shareholder Group acknowledge that Becker or Drapkin, or both of them, may be required, in accordance with the Majority Voting Policy, to tender their resignations from the Board in the event that they receive more “withheld” votes than “for” votes in an uncontested election of the Company’s directors, and that the Company’s Governance and Nominating Committee, in accordance with such Policy, may determine that it is in the best interests of the Company to accept such resignations. The members of the Shareholder Group acknowledge and agree that such action or actions in accordance with the Majority Voting Policy shall not constitute a breach of this Agreement by the Company.

7. Questionnaires. By the Appointment Date, each of Becker and Drapkin will have accurately completed the form of questionnaire provided by the Company for its use in connection with their appointment to the Board and preparation of the Company’s proxy statement and other reports filed with the SEC.

8. Compensation. Each of Becker and Drapkin shall be compensated for his service as a director and shall be reimbursed for his expenses on the same basis as all other non-employee directors of the Company are compensated and shall be eligible to be granted equity-based compensation on the same basis as all other non-employee directors of the Company.

9. Indemnification and Insurance. Each of Becker and Drapkin shall be entitled to the same rights of indemnification as the other directors of the Company as such rights may exist from time to time. The Company shall, promptly after their election, take such action, if any, as may be necessary to add Becker and Drapkin to the Company’s directors and officers’ liability insurance policy as Insured Persons.

10. Non-Disparagement. During the Standstill Period the Company shall not publicly disparage any member of the Shareholder Group or any member of the management of the Shareholder Group, provided that this provision shall not apply to compelled testimony, either by legal process, subpoena or otherwise, or to communications that are required by an applicable legal obligation and are subject to contractual provisions providing for confidential disclosure.

11. Reimbursement of Expenses. All costs and expenses incurred in connection with this Agreement will be paid by the party incurring such cost or expense.

12. Specific Performance. Each party hereto acknowledges and agrees, on behalf of itself and its Affiliates, that irreparable harm would occur in the event any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties will be entitled to specific relief hereunder, including, without limitation, an injunction or injunctions to prevent and enjoin breaches of the provisions of this Agreement and to enforce specifically the terms and provisions hereof in any state or federal court in the State of California, in addition to any other remedy to which they may be entitled at law or in equity. Any requirements for the securing or posting of any bond with such remedy are hereby waived.

13. Jurisdiction. Each party hereto agrees, on behalf of itself and its Affiliates, that any actions, suits or proceedings arising out of or relating to this Agreement or the transactions contemplated hereby will be brought solely and exclusively in any state or federal court in the State of California (and the parties agree on behalf of themselves and their respective Affiliates not to commence any action, suit or proceeding relating thereto except in such courts), and further agrees that service of any process, summons, notice or document by U.S. registered mail to the respective addresses set forth in Section 17 of this Agreement will be effective service of process for any such action, suit or proceeding brought against any party in any such court. Each part y, on behalf of itself and its Affiliates, irrevocably and unconditionally waives any objection to the laying of venue of any action, suit or proceeding arising out of this Agreement or the transactions contemplated hereby, in the state or federal courts in the State of California, and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such action, suit or proceeding brought in any such court has been brought in an improper or inconvenient forum.

14. Applicable Law. This Agreement shall be governed in all respects, including validity, interpretation and effect, by the laws of the State of California applicable to contracts executed and to be performed wholly within such state, without giving effect to the choice of law principles of such state.

15. Counterparts; Facsimile or Electronic Signatures. This Agreement may be executed in two or more counterparts which together shall constitute a single agreement. Facsimile or electronic (i.e., PDF) signatures shall be as effective as original signatures.

16. Entire Agreement; Amendment and Waiver; Successors and Assigns. This Agreement contains the entire understanding of the parties hereto with respect to, and supersedes all prior agreements relating to, its subject matter. There are no restrictions, agreements, promises, representations, warranties, covenants or undertakings between the parties other than those expressly set forth herein. This Agreement may be amended only by a written instrument duly executed by the parties hereto or their respective successors or assigns. No failure on the part of any party to exercise, and no delay in exercising, any right, power or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of such right, power or remedy by such party preclude a ny other or further exercise thereof or the exercise of any other right, power or remedy. All remedies hereunder are cumulative and are not exclusive of any other remedies provided by law. The terms and conditions of this Agreement shall be binding upon, inure to the benefit of, and be enforceable by the parties hereto and their respective successors, heirs, executors, legal representatives, and assigns.

17. Notices. All notices, consents, requests, instructions, approvals and other communications provided for herein and all legal process in regard hereto shall be in writing and shall be deemed validly given, made or served, (a) if given by telecopy, when such telecopy is transmitted to the telecopy number set forth below, or to such other telecopy number as is provided by a party to this Agreement to the other parties pursuant to notice given in accordance with the provisions of this Section, and the appropriate confirmation is received, or (b) if given by any other means, when actually received during normal business hours at the address specified in this Section, or at such other address as is provided by a party to this Agreement to the other parties pu rsuant to notice given in accordance with the provisions of this Section:

if to the Company:

Hot Topic, Inc.

18305 E. San Jose Ave.

City of Industry, California 91748

Facsimile: (626) 581-0894

Attention: Chief Executive Officer

with a copy to:

Cooley LLP

4401 Eastgate Mall

San Diego, CA 92121

Facsimile: (858) 550-6420

Attention: Jason L. Kent, Esq.

if to the Shareholder Group or any member thereof:

Becker Drapkin Management, L.P.

300 Crescent Court

Suite 1111

Dallas, Texas 75201

Facsimile: (214) 756 6037

Attention: Steven R. Becker

Attention: Matthew A. Drapkin

with a copy to:

Boies, Schiller & Flexner LLP

575 Lexington Avenue, 7th Floor

New York, New York 10022

Facsimile: (212) 446-2350

Attention: Richard J. Birns, Esq.

18. No Third-Party Beneficiaries. Nothing in this Agreement is intended to confer on any person other than the parties hereto or their respective successors and assigns, and their respective Affiliates to the extent provided herein, any rights, remedies, obligations or liabilities under or by reason of this Agreement.

[Signature page follows.]

IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the duly authorized signatories of the parties as of the date first written above.

COMPANY:

Hot Topic, Inc.
By:	/s/ Bruce A. Quinell
Name: Bruce A. Quinell
Title: Chairman of the Board of Directors

IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the duly authorized signatories of the parties as of the date first written above.

SHAREHOLDER GROUP:

Steven R. Becker /s/ Steven R. Becker		Matthew A. Drapkin /s/ Matthew A. Drapkin

Becker Drapkin Management, L.P. By: BC Advisors LLC, its general partners		Becker Drapkin Partners (QP), L.P. By: Becker Drapkin Management, L.P., its general partner By: BC Advisors LLC, its general partners
By:	/s/ Steven R. Becker	By:	/s/ Steven R. Becker
	Name: Steven R. Becker		Name: Steven R. Becker
	Title: Co-managing Member		Title: Co-managing Member

Becker Drapkin Partners, L.P. By: Becker Drapkin Management, L.P., its general partner By: BC Advisors LLC, its general partners		BD Partners I, L.P. By: Becker Drapkin Management, L.P., its general partner By: BC Advisors LLC, its general partners
By:	/s/ Steven R. Becker	By:	/s/ Steven R. Becker
	Name: Steven R. Becker		Name: Steven R. Becker
	Title: Co-managing Member		Title: Co-managing Member

BC Advisors, LLC
By:	/s/ Steven R. Becker
	Name: Steven R. Becker
	Title: Co-managing Member

EX-2.HTM 3 exhibit2.htm GROUP TERMINATION AGREEMENT exhibit2.htm

Exhibit 2

GROUP TERMINATION AGREEMENT

This Group Termination Agreement (this “Agreement”) is made as of September 19, 2010, by and among Becker Drapkin Management, L.P.; BC Advisors, LLC; Steven R. Becker; Matthew A. Drapkin; Double Black Diamond Offshore Ltd.; Black Diamond Offshore Ltd.; Carlson Capital, L.P. (“Carlson Capital”); Asgard Investment Corp.; and Clint D. Carlson.

WHEREAS, the undersigned entered into a Group Agreement, dated August 24, 2010 (the “Group Agreement,” capitalized terms used and not defined herein shall have the meanings ascribed to them in the Group Agreement) whereby the undersigned may be deemed to have formed a “group” for purposes of Section 13(d)(3) of, and Rule 13d−5(b)(1) promulgated under, the Securities Exchange Act of 1934, as amended (the “Exchange Act”), with respect to shares of common stock (the “Common Stock”) of Hot Topic, Inc., a California corporation (the “Company”) and agreed to coordinate their actions; and

WHEREAS, the undersigned wish to terminate their status as a “group” and the Group Agreement as of the date hereof.

NOW, THEREFORE, in consideration of the mutual covenants contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1. The parties hereto, on behalf of themselves and their respective affiliates, hereby terminate their status as a “group” for purposes of Section 13(d)(3) of, and Rule 13d−5(b)(1) promulgated under, the Exchange Act, with respect to the Common Stock of the Company as of the date hereof.

2. The parties hereto, on behalf of themselves and their respective affiliates, by execution of this Agreement, hereby waive the requirements of 24 hours written notice set forth in paragraph 7 of the Group Agreement, and pursuant to paragraph 7 of the Group Agreement hereby terminate the Group Agreement as of the date hereof; provided that such termination shall not relieve any party hereto from liability under the Group Agreement incurred prior to such termination; and provided further that the obligations of Carlson Capital under paragraph 8 of the Group Agreement solely with respect to Securities directly held or beneficially owned by any Carlson Party and acquired prior to the execution of this Agreement, shall survive such termination.

3. This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which, taken together, shall constitute but one and the same instrument, which may be sufficiently evidenced by one counterpart.

4. This Agreement shall be interpreted in accordance with and governed by the laws of the State of New York. If any provision of this Agreement would be invalid under applicable law, then such provision shall be deemed modified to the extent necessary to render it valid while most nearly preserving its original intent. In the event of any dispute among the parties hereto arising out of the provisions of this Agreement or their investment in the Company, the parties hereto consent and submit to the exclusive jurisdiction of the Federal and State Courts in the State of New York.

5. Except as otherwise set forth in this Agreement, this Agreement shall be binding upon and inure solely to the benefit of the parties hereto, their permitted successors and assigns, and their affiliated persons bound under the Group Agreement. Nothing herein, express or implied, is intended to or shall confer upon any other person or entity any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of this Agreement. No party hereto may assign any of its rights or obligations under this Agreement to any person without the prior written consent of the other parties hereto.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, the undersigned have executed and delivered this agreement as of the date first written above.

DOUBLE BLACK DIAMOND OFFSHORE LTD.

By:	Carlson Capital, L.P., its investment manager

	By:	Asgard Investment Corp., its general partner

		By:	/s/ Clint D. Carlson
			Name: Clint D. Carlson
			Title: President

BLACK DIAMOND OFFSHORE LTD.

By:	Carlson Capital, L.P., its investment manager

	By:	Asgard Investment Corp., its general partner

		By:	/s/ Clint D. Carlson
			Name: Clint D. Carlson
			Title: President

CARLSON CAPITAL, L.P.

By:	Asgard Investment Corp., its general partner

	By:	/s/ Clint D. Carlson
		Name: Clint D. Carlson
		Title: President

ASGARD INVESTMENT CORP.

By:	/s/ Clint D. Carlson
	Name: Clint D. Carlson
	Title: President

CLINT D. CARLSON

/s/ Clint D. Carlson


BECKER DRAPKIN MANAGEMENT, L.P.

By:	BC Advisors, LLC, its general partner

	By:	/s/ Steven R. Becker
		Name: Steven R. Becker
		Title: Co-managing Member

BC ADVISORS, LLC

By:	/s/ Steven R. Becker
	Name: Steven R. Becker
	Title: Co-managing Member

STEVEN R. BECKER

/s/ Steven R. Becker

MATTHEW A. DRAPKIN

/s/ Matthew A. Drapkin

EX-3.HTM 4 exhibit3.htm JOINT FILING AGREEMENT exhibit3.htm

Exhibit 3

JOINT FILING AGREEMENT

In accordance with Rule 13d-1(k) under the Securities Exchange Act of 1934, as amended, each of the undersigned hereby agrees to the joint filing on behalf of each of them of a statement on Schedule 13D (including amendments thereto) with respect to the Common Stock of Hot Topic, Inc., and that this Agreement be included as an Exhibit to such joint filing.

Each of the undersigned acknowledges that each shall be responsible for the timely filing of any statement (including amendments) on Schedule 13D, and for the completeness and accuracy of the information concerning him or it contained herein, but shall not be responsible for the completeness and accuracy of the information concerning the other persons making such filings, except to the extent that he or it knows or has reason to believe that such information is inaccurate.

Dated: September 21, 2010

BECKER DRAPKIN MANAGEMENT, L.P.

By:	BC Advisors, LLC, its general partner

	By:	/s/ Andrew S. McLelland
		Name: Andrew S. McLelland
		Title: Attorney-in-Fact

BECKER DRAPKIN PARTNERS, (QP), L.P.

By:	Becker Drapkin Management, L.P., its general partner

	By:	BC Advisors, LLC, its general partner

		By:	/s/ Andrew S. McLelland
			Name: Andrew S. McLelland
			Title: Attorney-in-Fact

BECKER DRAPKIN PARTNERS, L.P.

By:	Becker Drapkin Management, L.P., its general partner

	By:	BC Advisors, LLC, its general partner

		By:	/s/ Andrew S. McLelland
			Name: Andrew S. McLelland
			Title: Attorney-in-Fact

BD PARTNERS I, L.P.

By:	Becker Drapkin Management, L.P., its general partner

	By:	BC Advisors, LLC, its general partner

		By:	/s/ Andrew S. McLelland
			Name: Andrew S. McLelland
			Title: Attorney-in-Fact

BC ADVISORS, LLC

By:	/s/ Andrew S. McLelland
	Name: Andrew S. McLelland
	Title: Attorney-in-Fact


STEVEN R. BECKER

By:	/s/ Andrew S. McLelland
	Name: Andrew S. McLelland
	Title: Attorney-in-Fact

MATTHEW A. DRAPKIN

By:	/s/ Andrew S. McLelland
	Name: Andrew S. McLelland
	Title: Attorney-in-Fact