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Exhibit 10.38.2
ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT
This Assignment, Assumption and Recognition Agreement (this
"Agreement"), effective as of January 20, 2006, among SOVEREIGN
BANK (the
"Bank"), HANOVER CAPITAL MORTGAGE HOLDINGS, INC. ("Holdings") and
HANOVER
CAPITAL PARTNERS 2, LTD. (the "Successor", and together with
Holdings and the
Bank collectively, the "Parties" and individually, a "Party").
RECITALS
A. The Bank, Holdings and Hanover Capital Partners, Ltd.
("Partners")
executed and are parties to a Master Repurchase Agreement dated as
of June 28,
2005 (the "Repurchase Agreement"), a true and correct copy of which
Repurchase
Agreement is attached hereto as Exhibit A.
B. By letter agreement dated as of December 22, 2005 by and among
the
Bank, Partners and Holdings (the "Consent Agreement"), the Bank
conditionally
consented to a merger of Partners and Hanover Capital Partners 2,
Inc.
("Partners 2") into HanoverTrade, Inc. ("Trade") and to a change of
Trade's name
to "Hanover Capital Partners 2, Ltd.", the name of the Successor
(the "Plan"). A
true and correct copy of the Consent Agreement is attached hereto
as Exhibit B.
C. Holdings and the Successor have advised the Bank that the Plan
has
been effected and the Parties desire to document one of the
conditions
subsequent to the Bank's consent to the Plan, being identified in
Section 3(c)
of the Consent Agreement as an agreement evidencing the assignment
to and
assumption by the Successor of Partners' rights and duties under
the Repurchase
Agreement.
For good and valuable consideration the receipt and sufficiency
of
which hereby are acknowledged, and of the premises and mutual
covenants herein
contained, the Parties, ending to be legally bound, hereby agree as
follows:
INCORPORATION
1. The foregoing defined terms and Recitals are incorporated in
this
Agreement by reference.
ASSIGNMENT AND ASSUMPTION
2. Holdings and the Successor hereby represent, warrant and
covenant
to the Bank that, by operation of merger in connection with the
Plan, Partners
has, as of January 1, 2006, granted, transferred, assigned and
delegated to the
Successor all of the right, title, interest and obligations of
Partners, as one
of the entities comprising the Seller, in, to and under the
Repurchase Agreement
and that Successor has, as of January 1, 2006 assumed from Partners
all of the
right, title, interest and obligations of Partners, as one of the
entities
comprising the Seller, in, to and under the Repurchase
Agreement.
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REPRESENTATIONS AND WARRANTIES
3. Each of Holdings and the Successor represent and warrant to
the
Bank as of the date hereof that:
(a) an Agreement and Plan of Merger has been duly authorized
and
entered into, by and among Partners, Partners 2 and Trade (the
"Merger
Agreement");
(b) the Merger Agreement is in full force and effect and has
effected the Plan;
(c) the provisions thereof have not been waived, amended or
modified in any respect;
(d) the copy of the Certificate of Merger attached hereto as
Exhibit C, is a true, correct and complete copy of the Certificate
of Merger
filed December 29, 2005, with the Secretary of State of the State
of Delaware
(the "Delaware Certificate");
(e) the copy of the Certificate of Merger attached hereto as
Exhibit D is a true, correct and complete copy of the Certificate
of Merger
filed December 29, 2005 with the Secretary of State of the State of
New York
(the "New York Certificate" and together with the aware
Certificate
collectively, the "Certificates");
(f) All steps required to change Trade's name to "Hanover
Capital
Partners 2, Ltd." have been taken and such name change is complete
and final;
(g) the Successor is a business corporation duly organized and
validly existing under the laws of the State of Delaware and has
all requisite
corporate power and authority to assume Partner's rights and
obligations under
the Repurchase Agreement;
(h) the Successor's organizational identification number
assigned
by the State of Delaware is 3049275;
(i) Holdings' organizational identification number assigned by
the State of Maryland is D04712238;
(j) each of Holdings and the Successor has full corporate power
and authority to execute, deliver and perform under this Agreement
and the
Repurchase Agreement, and to consummate the transactions set forth
herein and
therein. The consummation of the transactions contemplated by this
Agreement and
the Repurchase Agreement is in the ordinary course of each of
Holdings' business
and the Successor's business and will not conflict with, or result
in a breach
of, any of the terms, conditions or provisions of each of Holdings'
and the
Successor's respective charter or by-laws, or any legal
restriction, or any
material agreement or instrument to which either of Holdings or the
Successor is
now a party or by which it is bound, or result in the violation of
any law,
rule, regulation, order, judgment or decree to which either of
Holdings and the
Successor or its respective property is subject. The execution,
delivery and
performance by each of Holdings and the Successor of this Agreement
and the
Repurchase Agreement, and the consummation by either of them of the
transactions
contemplated hereby and thereby, have been duly authorized by all
necessary
corporate action of each of Holdings and the Successor. This
Agreement has been
duly executed and delivered by each of Holdings and the Successor
and it
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and the Repurchase Agreement constitute the valid and legally
binding
obligations of each of holdings and the Successor enforceable
against each of
Holdings and the Successor in accordance with their respective
terms exc
