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(a)
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Subject to Section 4, each Hovde Party agrees that, during the Standstill Period, neither it nor any of its
Representatives (as defined below) shall, and it shall cause each of its Representatives not to, directly or indirectly, in any capacity or manner, make, express, transmit, speak, write, verbalize or otherwise communicate in any way (or
cause, further, assist, solicit, encourage, support or participate in any of the foregoing), any remark, comment, message, information, declaration, communication or other statement of any kind, whether verbal, in writing, electronically
transferred or otherwise, that might reasonably be construed to be derogatory or critical of, or negative toward, the Company or any of its Representatives, or that might reasonably be construed to malign, harm, disparage, defame or
damage the reputation or good name of the Company, its business or any of its Representatives.
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(b)
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The Company hereby agrees that, during the Standstill Period, neither it nor any of
its Representatives shall, and it shall cause each of its Representatives not to, directly or indirectly, in any capacity or manner, make, express, transmit, speak, write, verbalize or otherwise communicate in any way (or cause, further,
assist, solicit, encourage, support or participate in any of the foregoing), any remark, comment, message, information, declaration, communication or other statement of any kind, whether verbal, in writing, electronically transferred or
otherwise, that might reasonably be construed to be derogatory or critical of, or negative toward, any Hovde Party or its Representatives, or that might reasonably be construed to malign, harm, disparage, defame or damage the reputation
or good name of any Hovde Party, its business or any of its Representatives.
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(c)
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Notwithstanding the foregoing, nothing in this Section 2 or elsewhere in this Agreement shall prohibit any Party from
making any statement or disclosure required under the federal securities laws or other applicable laws (including to comply with any subpoena or other legal process from any governmental or regulatory authority with competent jurisdiction
over the relevant Party hereto) or stock exchange regulations; provided, however, that, unless prohibited under applicable law, such Party must provide written notice to the other Party at least two (2) business days prior to making any such statement or disclosure
required under the federal securities laws or other applicable laws or stock exchange regulations that would otherwise be prohibited by the provisions of this Section 2, and reasonably consider any comments of such other Party.
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(d)
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The limitations set forth in Section 2(a) and 2(b) shall not prevent any Party from responding to any public statement made by the other Party of the nature described in Section 2(a) and 2(b)
if such statement by the other Party was made in breach of this Agreement.
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(a)
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The Hovde Parties covenant and agree that, during the Standstill Period, they shall
not, and shall not permit any of their Representatives to, alone or in concert with others, knowingly encourage or pursue, or knowingly assist any other person to threaten, initiate or pursue, any lawsuit, claim or proceeding before any
court or governmental, administrative or regulatory body (collectively, a “Legal Proceeding”) against the Company or any of its
Representatives, except for any Legal Proceeding initiated solely to remedy a breach of or to enforce this Agreement; provided, however, that the foregoing shall not prevent the Hovde Parties or any of their respective Representatives from responding to oral questions,
interrogatories, requests for information or documents, subpoenas, civil investigative demands or similar processes (a “Legal
Requirement”) in connection with any Legal Proceeding if such Legal Proceeding has not been initiated by, or on behalf of, or with the material assistance of, the Hovde Parties or any of their Representatives; provided, further, that in the event that
any of the Hovde Parties or any of their Representatives receives such Legal Requirement, the Hovde Parties shall, unless prohibited by applicable law, give prompt written notice of such Legal Requirement to the Company.
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(b)
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The Company covenants and agrees that, during the Standstill Period, it shall not,
and shall not permit any of its Representatives to, alone or in concert with others, knowingly encourage or pursue, or knowingly support or assist any other person to threaten, initiate or pursue, any Legal Proceedings against any of the
Hovde Parties or any of their respective Representatives, except for any Legal Proceeding initiated solely to remedy a breach of or to enforce this Agreement; provided, however, that the foregoing shall not prevent the Company or any of its
Representatives from responding to a Legal Requirement in connection with any Legal Proceeding if such Legal Proceeding has not been initiated by, or on behalf of, the Company or any of its Representatives; provided, further, that in the event the Company or any of its
Representatives receives such a Legal Requirement, the Company shall, unless prohibited by applicable law, give prompt written notice of such Legal Requirement to the Hovde Parties.
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(c)
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To the extent permitted by law, the Hovde Parties, on behalf of themselves and for
all of their Affiliates, Associates, parent and subsidiary entities, joint ventures and partnerships, successors, assigns, and the respective owners, officers, directors, partners, members, managers, principals, parents, subsidiaries,
predecessor entities, agents, Representatives, employees, stockholders, advisors, consultants, attorneys, heirs, executors, administrators, successors and assigns of any such person or entity irrevocably and unconditionally release,
settle, acquit and forever discharge the Company and its Representatives, from any and all causes of action, claims, actions, rights, judgments, obligations, damages, amounts, demands, losses, controversies, contentions, complaints,
promises, accountings, bonds, bills, debts, dues, sums of money, expenses, specialties and fees and costs (whether direct, indirect or consequential, incidental or otherwise including, without limitation, attorney’s fees or court costs,
of whatever nature) incurred in connection therewith of any kind whatsoever, in their own right, representatively, derivatively or in any other capacity, in law or in equity or liabilities of whatever kind or character, arising under
federal, state, foreign, or common law or the laws of any other relevant jurisdiction from the beginning of time to the date of this Agreement (the “Claims”); provided, however,
that this release and waiver of the Claims shall not include (i) claims to enforce the terms of this Agreement or (ii) claims that the Company, on the one hand, or the Hovde Parties, on the other hand, have no knowledge of as of the date
of this Agreement.
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(a)
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During the Standstill Period, each Hovde Party shall not, and shall cause its
Representatives not to, directly or indirectly:
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(i)
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make any announcement or proposal with respect to, or offer, seek, propose or
indicate an interest in, (A) any form of business combination or acquisition or other transaction relating to a material amount of assets or securities of the Company or any of its subsidiaries, (B) any form of restructuring,
recapitalization or similar transaction with respect to the Company or any of its subsidiaries or (C) any form of tender or exchange offer for shares of Common Stock, whether or not such transaction involves a Change of Control (as
defined below) of the Company; it being understood that the foregoing shall not prohibit the Hovde Parties or their Affiliates from acquiring Common Stock within the limitations set forth in Section 4(a)(iii);
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(ii)
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engage in any solicitation of proxies or written consents to vote any voting
securities of the Company, or conduct any type of binding or nonbinding referendum with respect to any voting securities of the Company, or assist or participate in any other way, directly or indirectly, in any solicitation of proxies (or
written consents) with respect to, or from the holders of, any voting securities of the Company, or otherwise become a “participant” in a “solicitation,” as such terms are defined in Instruction 3 of Item 4 of Schedule 14A and Rule 14a-1
of Regulation 14A, respectively, under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), to vote any
securities of the Company (including by initiating, encouraging or participating in any “withhold” or similar campaign);
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(iii)
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purchase or otherwise acquire, or offer, seek, propose or agree to acquire,
ownership (including beneficial ownership) of (A) any securities of the Company or its successor, and/or (B) any direct or indirect rights or options to acquire any such securities, any derivative securities or contracts or instruments in
any way related to the price of shares of Common Stock or any assets or liabilities of the Company or its successor, beyond, as solely related to (A) the 246,904 shares of voting securities of the Company and 355,788.664 shares of voting
securities of Ready Capital Corporation, each inclusive of any securities convertible into, or exchangeable or exercisable for, any voting securities of the Company or its successors, as applicable, that the Hovde Parties and their
Affiliates, in the aggregate, beneficially own as of the Effective Date; provided, however, that the foregoing shall not prevent any Hovde Party from purchasing securities that the Hovde Parties are contractually obligated to purchase pursuant to any short agreements and/or
arrangements in effect as of the Effective Date;
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(iv)
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seek to advise, encourage or influence any person with respect to the voting of
(or execution of a written consent in respect of) or disposition of any securities of the Company;
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(v)
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participate in, or agree to participate in, any sales, other than through open
market transactions, or block trades of the securities of the Company or any rights decoupled from the underlying securities held by any of the Hovde Parties to any person without the Company’s written consent;
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(vi)
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take any action in support of or make any proposal or request that constitutes: (A)
advising, controlling, changing or influencing any director or the management of the Company, including, but not limited to, any plans or proposals, and/or consenting to the calling of any special meeting of stockholders to effect such
plans or proposals, to change the number or term of directors or to fill any vacancies on the Board, except as set forth in this Agreement, (B) any material change in the capitalization, stock repurchase programs and practices or dividend
policy of the Company, (C) any other material change in the Company’s management, business or corporate structure, (D) seeking to have the Company waive or make amendments or modifications to the Articles of Amendment and Restatement, as
amended and corrected, and/or the Bylaws of the Company, as amended (together, the “Governing Materials”) or other actions that
may impede or facilitate the acquisition of control of the Company by any person, (E) causing a class of securities of the Company to be delisted from, or to cease to be authorized to be quoted on, any securities exchange or (F) causing a
class of securities of the Company to become eligible for termination of registration pursuant to Section 12(g)(4) of the Exchange Act; provided,
however, notwithstanding the foregoing, nothing in this Section 4(a)(vi) shall prevent the Hovde Parties from engaging in private communications with the Company as stockholders of the Company;
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(vii)
|
communicate with stockholders of the Company or others pursuant to Rule
14a-1(l)(2)(iv) under the Exchange Act;
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(viii)
|
act, including by making public announcements or speaking to reporters or members
of the media (whether “on the record” or on “background” or “off the record”), to seek to influence the Company’s stockholders, management or the Board with respect to the Company’s policies, operations, balance sheet, capital allocation,
marketing approach, business configuration, Extraordinary Transactions or strategy or to obtain representation on the Board or seek the removal of any director in any manner, except as expressly permitted by this Agreement;
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(ix)
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call or seek to call, or request the call of, alone or in concert with others,
any meeting of stockholders, whether or not such a meeting is permitted by the Governing Materials, including a “town hall meeting”;
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(x)
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deposit any shares of Common Stock in any voting trust or subject any shares of
Common Stock to any arrangement or agreement with respect to the voting of any shares of Common Stock (other than any such voting trust, arrangement or agreement solely among the Hovde Parties that is otherwise in accordance with this
Agreement);
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(xi)
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form, join or in any other way participate in any “group” (within the meaning of
Section 13(d)(3) of the Exchange Act) with respect to the Common Stock; provided, however, that nothing herein shall limit the ability of an Affiliate of a Hovde Party to join the “group” with any other Hovde Party or Affiliate thereof following the execution of this
Agreement, so long as any such Affiliate agrees in writing to be subject to, and bound by, the terms and conditions of this Agreement and, if required under the Exchange Act, files a Schedule 13D or an amendment thereof, as applicable,
within two (2) business days after disclosing that the Hovde Party has formed a group with such Affiliate;
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(xii)
|
demand a copy of the Company’s list of stockholders or its other books and records
or make any request under any statutory or regulatory provisions of Maryland providing for stockholder access to books and records (including lists of stockholders) of the Company or otherwise;
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(xiii)
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commence, encourage or support any derivative action in the name of the Company or
any class action against the Company or any of its officers or directors, in each case with the intent of circumventing the provisions of this Section
4, or take any action challenging the validity or enforceability of any of the provisions of this Section 4; provided, however, that the foregoing shall not prevent any Hovde Party from (A) bringing
litigation to enforce the provisions of this Agreement, (B) making counterclaims with respect to any proceeding initiated by, or on behalf of, the Company against a Hovde Party or (C) responding to or complying with a validly issued legal
process that neither the Hovde Parties nor any of their Affiliates initiated, encouraged or facilitated;
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(xiv)
|
make any request or submit any proposal to amend or waive the terms of this Section 4 other than through non-public
communications with the Company that would not be reasonably likely to trigger public disclosure obligations for any Party;
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(xv)
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engage any private investigations firm or other person to investigate any of the
Company’s directors or officers;
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(xvi)
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comment publicly about or disclose in a manner that could reasonably be expected to
become public any intent, purpose, plan or proposal with respect to any transactions involving the Company or any of its subsidiaries, any director or the Company’s management, policies, strategy, operations, financial results or affairs,
any of its securities or assets, or this Agreement that is inconsistent with the provisions of this Agreement; or
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(xvii)
|
enter into any discussions, negotiations, agreements or understandings with any
person with respect to any action the Hovde Parties are prohibited from taking pursuant to this Section 4, or advise, assist, knowingly encourage or seek to persuade any person to take any action or make any statement with respect to any such action, or otherwise take
or cause any action or make any statement inconsistent with any of the foregoing.
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(b)
|
The provisions of this Section 4 shall not limit in any respect the actions of any director of the Company acting in his or her
capacity as such, recognizing that such actions are subject to such director’s duties to the Company and the Company Policies (it being understood and agreed that neither the Hovde Parties nor any of their Affiliates shall seek to do
indirectly through Steven Hovde anything that would be prohibited if done by any of the Hovde Parties or their Affiliates). The provisions of this Section 4 shall not prevent the Hovde Parties from freely voting their shares of Common Stock (except as otherwise provided in Section 1 hereto).
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(c)
|
During the Standstill Period, each Hovde Party shall refrain from taking any
actions which could have the effect of encouraging, assisting or influencing other stockholders of the Company or any other persons to engage in actions which, if taken by any Hovde Party, would violate this Agreement.
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(d)
|
Notwithstanding anything contained in this Agreement to the contrary, the
provisions of Section 2 of this Agreement
shall automatically terminate upon the occurrence of a Change of Control transaction (as defined below) involving the Company if the acquiring party or counterparty to the Change of Control transaction has conditioned the closing of the
transaction on the termination of such section.
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(e)
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At any time during the Standstill Period, upon reasonable written notice from the
Company pursuant to Section 15 hereof, the
applicable Hovde Party shall promptly provide the Company with information regarding the amount of the securities of the Company beneficially owned by each such entity or individual. This ownership information provided to the Company will
be kept strictly confidential unless required to be disclosed pursuant to applicable laws and regulations, any subpoena, legal process or other legal requirement or in connection with any litigation or similar proceedings in connection
with this Agreement.
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(a)
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“Affiliate” shall mean any “Affiliate” as defined in Rule 12b-2
promulgated by the SEC under the Exchange Act, including, for the avoidance of doubt, persons who become Affiliates subsequent to the date of this Agreement;
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(b)
|
“Associate” shall mean any “Associate” as defined in Rule 12b-2
promulgated by the SEC under the Exchange Act, including, for the avoidance of doubt, persons who become Associates subsequent to the date of this Agreement;
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(c)
|
“beneficial owner”, “beneficial ownership” and “beneficially own” shall have the same meanings as set forth in Rule 13d-3 promulgated by the SEC under the Exchange Act;
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(d)
|
“business day” shall mean any day other than a Saturday, Sunday or day on which the commercial banks in the State of New York are authorized or obligated to be closed by applicable law;
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(e)
|
a “Change of Control” transaction shall be deemed to have taken place if (A) any person is or becomes a beneficial owner, directly or indirectly, of securities of the Company representing
more than fifty percent (50%) of the equity interests and voting power of the Company’s then-outstanding equity securities or (B) the Company enters into a stock-for-stock transaction whereby immediately after the consummation of the
transaction the Company’s stockholders retain less than fifty percent (50%) of the equity interests and voting power of the surviving entity’s then-outstanding equity securities;
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(f)
|
“Confidential Information” shall mean all information that is understood to be confidential by a reasonable person by the context of its disclosure and/or its content, scope or nature
that is entrusted to or obtained by a director of the Company by reason of his or her position as a director of the Company; provided, however, Confidential Information shall not include information that (A) at the time of disclosure is, or as of and at such time such
disclosure thereafter becomes, generally available to the public other than as a result of any material breach of this Agreement by the Hovde Parties or any of their Representatives or any director’s noncompliance with the Company
Policies; (B) at the time of disclosure is, or as of and at such time such disclosure thereafter becomes, available to the Hovde Parties or their Representatives on a non-confidential basis from a third-party source, provided that, to the
Hovde Parties’ or their Representatives’ knowledge, such third-party is not and was not prohibited from disclosing such Confidential Information to the Hovde Parties or their Representative by any applicable law or contractual obligation;
(C) was legally obtained by the Hovde Parties or their Representatives prior to being disclosed by or on behalf of a director of the Company; or (D) was or is independently developed by the Hovde Parties or any of their Representatives
without reliance on, or reference to, any Confidential Information.
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(g)
|
“Extraordinary Transaction” shall mean any equity tender offer, equity exchange offer, merger, acquisition, business combination, or other transaction with a Third Party that, in
each case, would result in a Change of Control of the Company,liquidation, dissolution or other extraordinary transaction involving a majority of its equity securities or a majority of its assets, and, for the avoidance of doubt,
including any such transaction with a Third Party that is submitted for a vote of the Company’s stockholders;
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(h)
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“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, structure or nature; and
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(i)
|
“Representative” shall mean a person’s Affiliates and Associates and its and their respective directors, officers, employees, partners, members, managers, consultants, legal or other
advisors, agents and other representatives.
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| By: /s/ Daniel J. Worley |
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| Name: Daniel J. Worley |
|
| Title: Senior Vice President and |
|
| Corporate Secretary |
| By: /s/ Eric D. Hovde |
|
| Name: Eric D. Hovde |
|
| Title: Chief Executive Officer |
|
| By: /s/ Eric D. Hovde |
|
| Name: Eric D. Hovde |
|
| Title: Managing Member of Hovde Capital Ltd. |
|
| By: /s/ James P. Hua |
|
| Name: James P. Hua |
|
| Title: Portfolio Manager |
|
| By: /s/ James P. Hua |
|
| Name: James P. Hua |
|
| Title: Managing Member |
|