0001236945-05-000006.txt : 20120703
0001236945-05-000006.hdr.sgml : 20120703
20050121103235
ACCESSION NUMBER: 0001236945-05-000006
CONFORMED SUBMISSION TYPE: SC 13D/A
PUBLIC DOCUMENT COUNT: 1
FILED AS OF DATE: 20050121
DATE AS OF CHANGE: 20050121
GROUP MEMBERS: CHELSEY CAPITAL PROFIT SHARING PLAN
GROUP MEMBERS: CHELSEY DIRECT, LLC
GROUP MEMBERS: CHELSEY FINANCE, LLC
GROUP MEMBERS: DSJ INTERNATIONAL RESOURCES LTD.
GROUP MEMBERS: STUART FELDMAN
GROUP MEMBERS: WILLIAM B. WACHTEL
SUBJECT COMPANY:
COMPANY DATA:
COMPANY CONFORMED NAME: HANOVER DIRECT INC
CENTRAL INDEX KEY: 0000320333
STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-CATALOG & MAIL-ORDER HOUSES [5961]
IRS NUMBER: 138053260
STATE OF INCORPORATION: DE
FISCAL YEAR END: 1227
FILING VALUES:
FORM TYPE: SC 13D/A
SEC ACT: 1934 Act
SEC FILE NUMBER: 005-34082
FILM NUMBER: 05540168
BUSINESS ADDRESS:
STREET 1: 1500 HARBOR BLVD
CITY: WEEHAWKEN
STATE: NJ
ZIP: 07087
BUSINESS PHONE: 2018653800
MAIL ADDRESS:
STREET 1: 1500 HARBOR BLVD
CITY: WEEHAWKEN
STATE: NJ
ZIP: 07087
FORMER COMPANY:
FORMER CONFORMED NAME: HORN & HARDART CO /NV/
DATE OF NAME CHANGE: 19920703
FILED BY:
COMPANY DATA:
COMPANY CONFORMED NAME: WACHTEL WILLIAM B
CENTRAL INDEX KEY: 0001236945
FILING VALUES:
FORM TYPE: SC 13D/A
BUSINESS ADDRESS:
STREET 1: 110 EAST 59TH STREET
CITY: NEW YORK
STATE: NY
ZIP: 10022
BUSINESS PHONE: 2129099500
MAIL ADDRESS:
STREET 1: 110 EST 59TH ST
CITY: NEW YORK
STATE: NY
ZIP: 10022
SC 13D/A
1
sch13da1212005.txt
SCHEDULE 13DA 12 - DATE OF EVENT 1.10.05
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 12)
Hanover Direct, Inc.
--------------------------------
(Name of Issuer)
Common Stock, $.01 par value
-------------------------------
(Title of Class of Securities)
440506 10 3
--------------------------------
(CUSIP Number)
William B. Wachtel
Wachtel & Masyr, LLP
110 East 59th Street
New York, New York 10022
(212) 909-9595
---------------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
January 10, 2005
-------------------------------
(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 which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box
{ }.
Note: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Rule 13d-7 for other parties
to whom copies are to be sent.
(Continued on following pages)
Page 1 of 21
Page 2 of 21
1. NAME OF REPORTING PERSON
Chelsey Capital Profit Sharing Plan
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (Entities only)
13-3716218
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) {x}
(b) { }
3. SEC USE ONLY
4. SOURCE OF FUNDS
WC
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) OR 2(e) { }
6. CITIZENSHIP OR PLACE OF ORGANIZATION
New York
NUMBER OF SHARES 7. SOLE VOTING POWER
0 shares
BENEFICIALLY OWNED BY EACH 8. SHARED VOTING POWER
0 shares
REPORTING PERSON WITH 9. SOLE DISPOSITIVE POWER
0 shares
REPORTING PERSON WITH 10. SHARED DISPOSITIVE POWER
0 shares
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
25,611,892 shares
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES { }
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
78.3%
14. TYPE OF REPORTING PERSON
EP
Page 3 of 21
1. NAME OF REPORTING PERSON
Chelsey Direct, LLC
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (Entities only)
13-3716218
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) {x}
(b) { }
3. SEC USE ONLY
4. SOURCE OF FUNDS
AF
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) OR 2(e) { }
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF SHARES 7. SOLE VOTING POWER
0 shares
BENEFICIALLY OWNED BY EACH 8. SHARED VOTING POWER
0 shares
REPORTING PERSON WITH 9. SOLE DISPOSITIVE POWER
0 shares
REPORTING PERSON WITH 10. SHARED DISPOSITIVE POWER
0 shares
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
25,611,892 shares
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
{ }
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
78.3%
14. TYPE OF REPORTING PERSON
OO
Page 4 of 21
1. NAME OF REPORTING PERSON
Chelsey Finance, LLC
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (Entities only)
20-1351079
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) {x}
(b) { }
3. SEC USE ONLY
4. SOURCE OF FUNDS
AF
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) OR 2(e) { }
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF SHARES 7. SOLE VOTING POWER
0 shares
BENEFICIALLY OWNED BY EACH 8. SHARED VOTING POWER
0 shares
REPORTING PERSON WITH 9. SOLE DISPOSITIVE POWER
0 shares
REPORTING PERSON WITH 10. SHARED DISPOSITIVE POWER
0 shares
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
25,611,892 shares
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
{ }
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
78.3%
14. TYPE OF REPORTING PERSON
OO
Page 5 of 21
1. NAME OF REPORTING PERSON
William B. Wachtel
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (Entities only)
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) {x}
(b) { }
3. SEC USE ONLY
4. SOURCE OF FUNDS
AF
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) OR 2(e) { }
6. CITIZENSHIP OR PLACE OF ORGANIZATION
United States
NUMBER OF SHARES 7. SOLE VOTING POWER
25,616,892 shares
BENEFICIALLY OWNED BY EACH 8. SHARED VOTING POWER
0 shares
REPORTING PERSON WITH 9. SOLE DISPOSITIVE POWER
25,616,892 shares
REPORTING PERSON WITH 10. SHARED DISPOSITIVE POWER
0 shares
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
25,616,892 shares
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
{ }
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
78.3%
14. TYPE OF REPORTING PERSON
IN
Page 6 of 21
1. NAME OF REPORTING PERSON
DSJ International Resources Ltd.
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (Entities only)
13-3716218
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) {x}
(b) { }
3. SEC USE ONLY
4. SOURCE OF FUNDS
N/A
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) OR 2(e) { }
6. CITIZENSHIP OR PLACE OF ORGANIZATION
New York
NUMBER OF SHARES 7. SOLE VOTING POWER
0 shares
BENEFICIALLY OWNED BY EACH 8. SHARED VOTING POWER
0 shares
REPORTING PERSON WITH 9. SOLE DISPOSITIVE POWER
0 shares
REPORTING PERSON WITH 10. SHARED DISPOSITIVE POWER
0 shares
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
25,611,892 shares
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
{ }
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
78.3%
14. TYPE OF REPORTING PERSON
CO, HC
Page 7 of 21
1. NAME OF REPORTING PERSON
Stuart Feldman
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (Entities only)
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) {x}
(b) { }
3. SEC USE ONLY
4. SOURCE OF FUNDS
N/A
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) OR 2(e) { }
6. CITIZENSHIP OR PLACE OF ORGANIZATION
United States
NUMBER OF SHARES 7. SOLE VOTING POWER
21,090 shares
BENEFICIALLY OWNED BY EACH 8. SHARED VOTING POWER
0 shares
REPORTING PERSON WITH 9. SOLE DISPOSITIVE POWER
21,090 shares
REPORTING PERSON WITH 10. SHARED DISPOSITIVE POWER
0 shares
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
25,632,982 shares
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
{ }
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
78.4%
14. TYPE OF REPORTING PERSON
IN
Page 8 of 21
This Amendment No. 12 to the Statement on Schedule 13D amends and
supplements the Statement on Schedule 13D (as amended, the "Schedule 13D") filed
by certain of the Reporting Persons. Capitalized terms used herein and not
defined herein shall have the meanings assigned thereto in the Schedule 13D.
This Amendment No. 12 to the Schedule 13D is filed by the Reporting Persons in
accordance with Exchange Act Rule 13d-2, and it shall refer only to the
information that has materially changed since the filing of the Amendment No. 11
to the Schedule 13D on July 13, 2004.
Item 3. Source and Amount of Funds or Other Consideration
The information contained in Item 4 is incorporated herein by reference
into this Item 3.
Item 4. Purpose of the Transaction
Item 4 is hereby amended by the addition of the following paragraphs
immediately before the last two paragraphs of Item 4 of this Statement as
previously filed:
As of January 10, 2005, Chelsey Direct, LLC entered into a Stock Purchase
Agreement (the "Stock Purchase Agreement") with Regan Partners, L.P., Regan
International Fund Limited, Regan Fund Management Limited and Basil P. Regan
(collectively, the "Regan Parties"), pursuant to which Chelsey Direct, LLC
purchased an aggregate of 3,799,735 shares of common stock of the Issuer (the
"Regan Shares"), a copy of which is attached hereto as Exhibit BB and
incorporated herein by reference. The Stock Purchase Agreement also provided for
the termination of the Corporate Governance Agreement, dated November 30, 2003,
previously filed as Exhibit V hereto, and the Voting Agreement, dated November
30, 2003, previously filed as Exhibit W hereto.
At the Annual Meeting of Stockholders of the Issuer, held on August 10,
2004, the stockholders of the Issuer approved an amendment to the Issuer's
Certificate of Incorporation to effect a one-for-ten reverse stock split of the
Common Stock which became effective on September 23, 2004.
Item 5. Interests in Securities of the Issuer
(a) Based on information provided to the Reporting Persons by the Issuer as
of December 13, 2004, there were 22,451,839 shares of Common Stock issued and
outstanding as of the date hereof. After giving effect to the purchase of the
Regan Shares as described in Item 4 hereof, the Reporting Persons beneficially
own an aggregate of approximately 25,637,982 shares of the Common Stock or
approximately 78.4% of the shares of the outstanding Common Stock and 564,819
shares or 100% of the Series C Participating Preferred Stock. The holdings
referenced herein include 10,247,209 warrants to purchase common stock held by
Chelsey Finance, LLC, 5,000 options to purchase shares of common stock held by
William Wachtel and 5,000 options to purchase common stock held by Stuart
Feldman, each of which is immediately exercisable.
(b) After giving effect to the purchase of the Regan Shares described in
Item 4 hereof, of the Reporting Persons, William B. Wachtel, as the Manager of
Chelsey Direct, has the sole power to vote or to direct the disposition of
approximately 25,616,892 shares of the Common Stock and 564,819 shares of the
Series C Participating Preferred Stock, and Stuart
Page 9 of 21
Feldman has the sole power to vote or to direct the disposition of 21,090 shares
of the Common Stock. The holdings referenced herein include 10,252,209 warrants
to purchase common stock held by Chelsey Finance, LLC, 5,000 options to purchase
shares of common stock held by William Wachtel and 5,000 options to purchase
common stock held by Stuart Feldman, each of which is immediately exercisable.
(c) The description of the transactions contained in Item 4 is hereby
incorporated by reference into this Item 5(c).
(d) Not applicable.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer
Item 6 is hereby amended by the addition of the following paragraph before
the last paragraph of Item 6 of this Statement as previously filed:
On January 10, 2005, Chelsey Direct entered into the Stock Purchase
Agreement as more fully described in Item 4 and such agreement is incorporated
by reference in this Item 6.
Item 7. Material to be filed as Exhibits
BB. Stock Purchase Agreement, dated as of January 10, 2005, by and among
Regan Partners, L.P., Regan International Fund Limited, Regan Fund
Management Limited and Basil P. Regan and Chesley Direct, LLC.
Page 10 of 21
Signatures
After reasonable inquiry and to the best of the knowledge and belief of
each of the undersigned, the undersigned certify that the information set forth
in this Amendment No. 12 to the Statement on Schedule 13D is true, complete and
correct.
Date: January 20, 2005
Chelsey Capital Profit Sharing Plan
By:_/s/ William B. Wachtel __
William B. Wachtel, its
Trustee
Chelsey Direct, LLC
By:_/s/ William B. Wachtel __
William B. Wachtel, its
Manager
Chelsey Finance, LLC
By:_/s/ William B. Wachtel __
William B. Wachtel, its
Manager
_/s/ William B. Wachtel __
William B. Wachtel
DSJ International Resources Ltd.
By:___/s/ Stuart Feldman____
Stuart Feldman, its
President
___/s/ Stuart Feldman____
Stuart Feldman
Page 11 of 21
EXHIBIT BB
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT (this "Agreement"), dated as of January 10, 2005, by
and among Regan Partners, L.P., a New Jersey limited partnership (the
"Partnership"), Regan International Fund Limited, a corporation formed under the
laws of the British Virgin Islands (the "Fund"), Regan Fund Management Ltd., a
U.S. Corporation (the "Manager"), and Basil P. Regan, an individual ("Mr. Regan"
and together with the Partnership, the Fund and the Manager, the "Sellers"), and
Chelsey Direct, LLC, a Delaware limited liability company ("Purchaser"). The
Sellers and Purchaser are sometimes individually referred to herein as a "Party"
and together as the "Parties."
WHEREAS, the Sellers desire to liquidate their position in Hanover Direct, Inc.
("Hanover") by selling shares of Common Stock, par value $0.01 per share (the
"Securities"), of Hanover in the amounts set forth on Schedule 1 (the
"Transaction");
WHEREAS, the Sellers acknowledge that the number of shares being sold pursuant
to this Agreement far exceeds the normal trading volume in such shares, and the
ability of the Sellers to dispose of the Securities as a block to Purchaser
represents a unique opportunity for the Sellers to liquidate their position; and
WHEREAS, Purchaser desires to purchase the Securities on the terms and
conditions hereinafter contained.
NOW, THEREFORE, in consideration of the premises and the mutual covenants and
agreements hereinafter set forth, the parties hereto, intending to be legally
bound, hereby agree as follows:
1. Purchase and Sale.
1.01. Generally. Subject to and upon the terms and conditions hereinafter
set forth, on the date hereof (the "Closing"), and in reliance upon the
representations and warranties contained in this Agreement, each of the Sellers
is selling, assigning, transferring and delivering to Purchaser, and Purchaser
is purchasing from the Sellers, the Securities, free and clear of all liens,
pledges, mortgages, security interests, charges, restrictions, adverse claims or
other encumbrances of any kind or nature whatsoever (collectively, "Liens").
1.02. Consideration. At the Closing, in consideration of the sale,
assignment, transfer, and delivery of the Securities, Purchaser is paying or
causing to be paid to the Sellers the amounts, in cash, as set forth on Schedule
1.
1.03. Method of Payment. Purchaser is making payment for the Securities in
immediately available funds by wire transfer to an account or accounts specified
on Schedule 2.
2. Closing. The Closing is being held simultaneously with the execution of
this Agreement at the offices of Dechert LLP, 405 Lexington Avenue, New York,
New York 10174. The following is taking place at the Closing:
2.01. Transfer of Securities. Each of the Sellers shall cause the
electronic delivery of the Securities to Purchaser.
Page 12 of 21
2.02. Closing Payment. Upon receipt from the Sellers of evidence of
irrevocable instructions given by the Sellers to their brokerage firms to
deliver the Securities to Purchaser, Purchaser shall make the payment required
by Section 1 to be made at the Closing.
3. Representations and Warranties of the Sellers. Each of the Sellers
hereby represents and warrants to Purchaser as follows:
3.01. Authority. Each of the Sellers has all necessary power and authority
to enter into this Agreement, to carry out its obligations hereunder and to
consummate the transactions contemplated hereby. Each of the Sellers has taken
all necessary action to authorize the execution, delivery and performance by it
of this Agreement.
3.02. Binding Obligation. This Agreement has been duly executed and
delivered by each of the Sellers and, assuming due authorization, execution and
delivery of the Agreement by Purchaser, this Agreement constitutes the legal,
valid and binding obligation of each of the Sellers enforceable against each of
the Sellers in accordance with its terms, except as such enforceability may be
subject to the effects of any applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium or similar laws affecting creditors'
rights generally and subject to the effects of general equitable principles.
3.03. No Consent; No Conflict. The execution, delivery and performance of
this Agreement by each of the Sellers do not require any prior consent,
approval, authorization or other action by, or prior filing with or notification
to, any governmental or regulatory authority, other than routine filings with
the Securities and Exchange Commission (the "SEC"). The execution, delivery and
performance of this Agreement by each of the Sellers do not, as applicable, (i)
conflict with or violate the organizational documents of each of the Sellers, or
(ii) conflict with or violate any law, rule, regulation, order, writ, judgment,
injunction, decree, determination, award or agreement applicable to each of the
Sellers.
3.04. Ownership. Each of the Sellers owns and has good, valid and
marketable title to and the right to transfer to Purchaser, the Securities, free
and clear of any and all Liens. At the Closing, each of the Sellers is conveying
ownership of the Securities, and after giving effect to the transactions
contemplated herein, Purchaser will own, and have good, valid and marketable
title to, the Securities, free and clear of any and all Liens.
3.05. Nature of the Sellers.
(a) Each of the Sellers is a sophisticated investor and has the
appropriate knowledge and experience to evaluate and negotiate the Transaction.
(b) Each of the Sellers has had the opportunity to consult with its
advisors as it deems appropriate.
(c) Each of the Sellers has adequate information to evaluate the
Transaction and has had the opportunity to discuss such information with its
advisers.
(d) Each of the Sellers is dealing with Purchaser on a professional
arms-length basis and neither Purchaser nor any of its
Page 13 of 21
affiliates or representatives is acting as a fiduciary or advisor to the Sellers
with respect to this Agreement or any of the transactions contemplated hereby.
(e) Each of the Sellers or such Seller's advisor with which the Seller
has consulted in connection with the Transaction, has expertise in assessing
tax, legal, jurisdictional and regulatory risk.
(f) Each of the Sellers has itself been, and will continue to be,
solely responsible for making its own independent appraisal of and
investigations into, and in connection with this Agreement and the transactions
contemplated hereby it has, to the extent deemed necessary and appropriate by
each Seller, made such an independent appraisal of and investigation into, the
financial condition, creditworthiness, affairs, status and nature of Hanover and
its related companies and it has not relied, and will not hereafter rely, on
Purchaser or any affiliate, representative or agent of Purchaser or any other
third party with respect to such matters or to update it with respect to such
matters or to keep such matters under review on its behalf.
(g) Neither Purchaser nor any person affiliated with Purchaser has
made any representation or warranty, express or implied, regarding any aspect of
the Transaction except as set forth in this Agreement.
(h) Purchaser has not made any representations whatsoever regarding
the business, operations, financial condition or prospects of Hanover. None of
the Sellers is relying on any representation or warranty other than those
expressly contained in this Agreement. In addition, without limiting the
foregoing, none of the Sellers has relied, and none of the Sellers will
hereafter rely, on Purchaser or any affiliate, representative or agent of
Purchaser or any other third party with respect to information relating to or in
any way affecting the Securities, other than as expressly set forth in Section 4
hereof.
(i) Each of the Sellers acknowledges that, in connection with the
Transaction, Purchaser has informed the Sellers that Purchaser and its
affiliates, representatives or agents has possession of material non-public
information that could have a bearing on the price or valuation of the
Securities, but which Purchaser and its affiliates, representatives or agents
have not disclosed to Purchaser. Each of the Sellers acknowledges and agrees
that Purchaser and its affiliates, representatives and agents shall have no
obligation whatsoever to, and that Purchaser shall have no obligation whatsoever
to cause such affiliates, representatives or agents to, disclose any such
information to the Sellers. Without limiting the generality of the foregoing,
for a number of years, until July 30, 2004, Mr. Regan, on behalf of the Sellers,
has served as a director of Hanover, and the Sellers are familiar with Hanover.
The Sellers acknowledge that designees of Purchaser currently serve on the Board
of Directors of Hanover. Accordingly, Purchaser is in possession of non-public
information concerning Hanover, including, without limitation, operating and
other information that may reflect positively on Hanover's business and
prospects, and that may enable Purchaser to make a more educated assessment than
the Sellers of the risks associated with the ownership of Hanover's securities.
(j) Each of the Sellers hereby waives any rights to receive such
information and forever waives, to the maximum extent permitted by law, on its
own behalf and on the behalf of its affiliates, successors and assigns, any
claims or remedies arising out of or relating to any such non-disclosure.
Page 14 of 21
(k) Each of the Sellers understands and acknowledges that Purchaser is
relying upon the truth of the foregoing representations in connection with the
Transaction.
3.06. Brokers and Finders. No broker or finder has acted for the Sellers in
connection with this Agreement or the Transactions and no broker or finder is
entitled to any brokerage or finder's fee or other commissions in respect of the
Transaction.
4. Representations and Warranties of Purchaser. Purchaser hereby represents
and warrants to each of the Sellers as follows:
4.01. Authority. Purchaser has all necessary power and authority to enter
into this Agreement, to carry out its obligations hereunder and to consummate
the transactions contemplated hereby. Purchaser has taken all necessary action
to authorize the execution, delivery and performance by it of this Agreement.
4.02. Binding Obligation. This Agreement has been duly executed and
delivered by Purchaser and, assuming due authorization, execution and delivery
of the Agreement by each of the Sellers, this Agreement constitutes the legal,
valid and binding obligation of Purchaser enforceable against Purchaser in
accordance with its terms, except as such enforceability may be subject to the
effects of any applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or similar laws affecting creditors' rights generally
and subject to the effects of general equitable principles.
4.03. No Consent; No Conflict. The execution, delivery and performance of
this Agreement by Purchaser do not require any prior consent, approval,
authorization or other action by, or prior filing with or notification to, any
governmental or regulatory authority, other than filings with the SEC, the
Company and the American Stock Exchange. The execution, delivery and performance
of this Agreement by Purchaser do not conflict with or violate any law, rule,
regulation, order, writ, judgment, injunction, decree, determination, award or
agreement applicable to Purchaser.
4.04. Nature of Purchaser. Purchaser (a) has such knowledge and experience
in financial and business matters generally that it is capable of evaluating the
merits of the Transaction; (b) has the ability to bear the economic risks
inherent in his investment in the Securities; (c) is receiving the transfer of
the Securities hereunder for investment purposes, and not with a view to, or for
a resale in connection with, any distribution of such Securities, (d) is able,
without materially impairing his financial condition, to hold the Securities for
an indefinite period of time, and to suffer a complete loss of his investment;
and (e) understands and has fully considered the risks inherent in this
investment in the Securities.
4.05. No Reliance on Sellers. Purchaser has had the opportunity to ask
questions of, and receive answers from, the Sellers concerning Hanover and the
Transaction and to obtain from Sellers any additional information necessary to
make an informed decision regarding the purchase of the Securities. Purchaser is
not relying on any representations made by the Sellers regarding Hanover or the
Transaction except as set forth in this Agreement.
4.06. Brokers and Finders. No broker or finder has acted for Purchaser in
connection with this Agreement or the Transactions and no broker or finder
Page 15 of 21
is entitled to any brokerage or finder's fee or other commissions in respect of
the Transaction.
4.07. Accredited Investor. Purchaser is an "accredited investor" as such
term is defined in Rule 501 of Regulation D promulgated under the Securities
Act.
5. Indemnification. For a period of one year from the date of the Closing,
each of Purchaser, on the one hand, and the Sellers, on the other hand, hereby
agrees that it will indemnify the other Party and their controlling persons and
agrees to hold the other Party and their controlling persons harmless from and
against,and to pay to the other Party the amount of, any loss, liability, claim,
damage, or expense (including reasonable attorneys' fees), whether or not
involving a third party claim, arising, directly or indirectly, from or in
connection with, or in respect of any breach of any representation or warranty
set forth in this Agreement by the indemnifying Party; provided, however,
that neither the Sellers' collective liability, in the aggregate, nor
Purchaser's liability, in the aggregate, shall exceed an amount equal to the
proceeds received by the Sellers from the Transaction.
6. Miscellaneous.
6.01. Expenses. Each Party shall pay all costs and expenses incurred by
such Party in respect of the transactions contemplated hereby. The Sellers shall
be liable for and shall pay any transfer taxes attributable to the purchase and
sale of the Securities.
6.02. Entirety of Agreement. This Agreement states the entire agreement of
the Parties, merges all prior negotiations, agreements and understandings, if
any, and states in full all representations, warranties, covenants, and
agreements which have induced this Agreement, including, without limitation, (a)
that certain Corporate Governance Agreement, dated as of November 30, 2003, by
and among Hanover, the Sellers, Purchaser and Stuart Feldman, which agreement is
hereby terminated by the Sellers, Purchaser and Stuart Feldman, and (b) that
certain Voting Agreement, dated as of November 30, 2003, by and among the
Sellers, Purchaser and Stuart Feldman, which agreement is hereby terminated by
its terms. No Party shall make any contrary representations in dealing with
third parties. There are no representations or warranties, express or implied,
except as specifically set forth in this Agreement.
6.03. Notices. All notices and other communications given or made pursuant
hereto shall be in writing and shall be deemed to have been duly given or made
if and when delivered personally or by overnight courier to the Parties at the
following addresses or sent by electronic transmission, with confirmation
received, to the telecopy numbers specified below (or at such other address or
telecopy number for a Party as shall be specified by like notice):
Page 16 of 21
(a) If to the Sellers:
Regan Partners, L.P.
32 East 57th Street, 20th Floor
New York, New York 10022
Attn: Basil P. Regan
Telephone: ________________
Facsimile: (212) 317-1648
With a copy to:
Seward & Kissel LLP
One Battery Park Plaza
New York, New York 10004
Attn: Gary J. Wolfe, Esq.
Telephone: (212) 574-1223
Facsimile: (212) 480-8421
(b) If to Purchaser:
Chelsey Direct, LLC
c/o Wachtel & Masyr, LLP
110 East 59th Street
New York, New York 10022
Attn: William B. Wachtel
Telephone: (212) 909-9595
Facsimile: (212) 371-0320
With a copy to:
Dechert LLP
The Chrysler Building
405 Lexington Avenue
New York, NY 10174
Attn: Richard A. Goldberg, Esq.
Telephone: (212) 973-0111
Facsimile: (212) 891-9598
6.04. Waiver and Amendment . No waiver by any Party of any term, provision,
agreement, representation, or warranty contained in this Agreement
Page 17 of 21
(or any breach thereof) shall be effective unless it is in writing executed by
the Party against which such waiver is to be enforced. No waiver shall be deemed
or construed as a further or continuing waiver of any such term, provision,
agreement, representation or warranty (or breach) on any other occasion or as a
waiver of any other term, provision, agreement, representation or warranty (or
of the breach of any other term, provision, agreement, representation or
warranty) contained in this Agreement on the same or any other occasion. This
Agreement may be amended or modified only by the written agreement of the
Parties.
6.05. Further Assurances. Each of the Parties agrees to execute and deliver
such other documents or agreements as may be necessary or desirable for the
implementation of this Agreement and the consummation of the transactions
contemplated hereby.
6.06. Assignment; Binding Nature; No Beneficiaries. This Agreement may not
be assigned by any Party without the prior written consent of Purchaser and Mr.
Regan. This Agreement shall be binding upon, inure to the benefit of, and be
enforceable by the parties hereto and their respective heirs, personal
representatives, legatees, successors and permitted assigns. Except as set forth
in Section 5, this Agreement shall not confer any rights upon any Person other
than the parties hereto and their respective heirs, personal representatives,
legatees, successors and permitted assigns.
6.07. Severability. If any provision of this Agreement is found
unenforceable by a court of competent jurisdiction, such unenforceable provision
shall not affect the other provisions but shall be deemed modified to the extent
necessary to render it enforceable, preserving to the fullest extent permissible
the intent of the Parties.
6.08. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the internal laws of the State of New York applicable to
contracts executed and fully performed within the State of New York.
6.09. Jurisdiction. The Parties agree that any proceeding arising out of or
relating to this Agreement or the breach or threatened breach of this Agreement
may be commenced and prosecuted in a court in the State of New York. Each of the
Parties hereby irrevocably and unconditionally consents and submits to the
exclusive personal jurisdiction of any court in the State of New York in respect
of any such proceeding. Each of the Parties consents to service of process upon
such party with respect to any such proceeding by registered mail, return
receipt requested, and by any other means permitted by applicable laws and
rules. Each of the Parties waives any objection that such party may now or
hereafter have to the laying of venue of any such proceeding in any court in the
State of New York and any claim that such party may now or hereafter have that
any such proceeding in any court in the State of New York has been brought in an
inconvenient forum.
6.10. Waiver of Jury Trial. EACH PARTY HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO
THIS AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY
CERTIFIES AND ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (ii) EACH
SUCH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER AND
(iii) EACH SUCH PARTY HAS BEEN INDUCED TO
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ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS SET FORTH HEREIN.
6.11. Execution and Delivery. This Agreement may be executed in two or more
counterparts, each of which when executed shall be deemed to be an original but
all of which taken together shall constitute one and the same agreement. This
Agreement may be delivered by facsimile transmission with the same legal effect
as if delivery of an original were made in person.
6.12. No Recourse Against Others. No director, officer, partner, employee,
owner, representative, agent, heir, executor, administrator, beneficiary,
stockholder, or controlling person, as such, of the Sellers or Purchaser shall
have any liability hereunder or for any obligations of the Sellers or Purchaser,
as applicable, in respect of the Securities or for any claim based on, in
respect or by reason of, such obligations or their creation or this Agreement.
Each Party, by execution of this Agreement, waives and releases all such persons
for all such liabilities.
[Signatures Appear on Following Page.]
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IN WITNESS WHEREOF, the Parties hereto have duly executed and delivered
this Agreement as of the date first set forth above.
SELLERS:
REGAN PARTNERS, L.P.
By: ___/s/ Basil P Regan______
Name: Basil P. Regan
Title: General Partner
REGAN INTERNATIONAL FUND LIMITED
By: Regan Fund Management Ltd.
By: __/s/ Basil P. Regan______
Name: Basil P. Regan
Title: President
REGAN FUND MANAGEMENT LTD.
By: ___/s/ Basil P. Regan_____
Name: Basil P. Regan
Title: President
___/s/ Basil P. Regan______
BASIL P. REGAN
PURCHASER:
CHELSEY DIRECT, LLC
By: _/s/ William B. Wachtel __
Name: William B. Wachtel
Title: Manager
Accepted and agreed
with respect to Section 6.02:
___/s/ Stuart Feldman__________
STUART FELDMAN
Page 20 of 21
SCHEDULE 1 - SELLERS
Number of Shares of Common
Seller Stock Purchase Price
Regan Partners, L.P. 2,387,055 $2,387,055
Regan International Fund Limited 1,129,210 $1,129,210
Regan Fund Management Ltd. (as Investment Adviser to 187,980 $187,980
Deutsche Diawa SuperHedge)
Basil P. Regan, individually and on behalf of: 85,000 $85,000
Basil P. Regan Profit Sharing 7,000 $7,000
Basil P. Regan IRA 2,990 $2,990
Basil P. Regan Money Purchase 500 $500
------------------------------------------------------------ ------------------------------- -------------------
------------------------------------------------------------ ------------------------------- -------------------
Total: 3,799,735 $3,799,735
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SCHEDULE 2 - WIRE TRANSFER INSTRUCTIONS