Document:

exv10w33w3

Exhibit 10.33.3

EXECUTION VERSION

THIRD AMENDMENT TO STOCKHOLDER PROTECTION RIGHTS AGREEMENT

          This Third Amendment (the “Amendment”) to Stockholder Protection Rights Agreement is
entered into as of September 30, 2008, by and between Hanover Capital Mortgage Holdings, Inc., a
Maryland corporation (the “Company”), and Computershare Trust Company, N.A., a national
banking association f/k/a EquiServe Trust Company, N.A., successor rights agent to State Street
Bank & Trust Company (the “Rights Agent”).

RECITALS:

          WHEREAS, the Company and the Rights Agent are parties to that certain Stockholder Protection
Rights Agreement dated as of April 11, 2000, as amended by the First Amendment to Stockholder
Protection Rights Agreement, effective as of September 26, 2001, and the Second Amendment to the
Stockholder Protection Rights Agreement, entered into as of June 10, 2002 (as so amended, the
“Agreement”); and

          WHEREAS, concurrently with the execution of this Amendment, the Company, Walter Industries,
Inc., a Delaware corporation (“Walter”), and JWH Holding Company, LLC, a Delaware limited
liability company (“JWH”), are entering into an Agreement and Plan of Merger, dated as of
the date hereof (as amended, supplemented, restated or otherwise modified from time to time, the
“Merger Agreement”), pursuant to which, among other things, JWH (after the Distribution
referred to therein) will merge into the Company (the “Merger”), the separate existence of
JWH shall cease, the Company shall continue as the surviving corporation (the “Surviving
Corporation”), the limited liability company units of JWH issued and outstanding immediately
prior to the effective time of the Merger will be converted into shares of common stock of the
Surviving Corporation, par value $0.01 per share (the “Surviving Corporation Common
Stock”), and, except as otherwise provided in the Merger Agreement, shares of common stock of
the Company, par value $0.01 per share (the “Common Stock”), issued and outstanding
immediately prior to the effective time of the Merger will be combined into fully paid and
non-assessable shares of Surviving Corporation Common Stock at the rate specified in the Merger
Agreement; and

          WHEREAS, concurrently with the execution of this Amendment, the Company, Amster Trading
Company and Ramat Securities, Ltd (each a “Trust Preferred Seller” and together, the “Trust
Preferred Sellers”) are entering into an Exchange Agreement, dated as of the date hereof (as
amended, supplemented, restated or otherwise modified from time to time, the “Exchange
Agreement”), pursuant to which, among other things, the Trust Preferred Sellers will exchange
all of the preferred undivided beneficial interests in the assets of Hanover Statutory Trust II
held by the Trust Preferred Sellers for an amount of cash and newly issued Common Stock as set
forth in the Exchange Agreement (the “Exchange”); and

          WHEREAS, as of the date hereof, the Company has not filed Articles Supplementary setting forth
the terms of the Preferred Stock (as that term is defined in the Agreement); and

          WHEREAS, as a result of the combination of shares of Common Stock into shares of Surviving
Corporation Common Stock at the rate specified in the Merger Agreement

 

 

pursuant to the Merger, the Exercise Price (as that term is defined in the Agreement) will be
adjusted as specified in Section 2.4 of the Agreement; and

          WHEREAS, the Board of Directors has deemed it fair, desirable and in the best interests of the
Company and its stockholders to, pursuant to Section 5.4 of the Agreement, amend the Agreement as
set forth below, and has duly authorized any officer of the Company to execute and deliver this
Amendment.

          NOW, THEREFORE, in consideration of the premises and mutual agreements hereinafter set out and
of other consideration (the receipt and sufficiency of which are acknowledged), the parties hereto
agree as follows:

          1. Definitions. Except as otherwise indicated herein or unless the context otherwise
requires, capitalized terms used but not defined herein shall have the meanings ascribed thereto in
the Agreement.

          2. Amendment of Section 1.1 of the Agreement.

	 	a.	 	The definition of “Acquiring Person” in Article I, Section 1.1
of the Agreement is hereby amended, supplemented and restated in its entirety
to read as follows:

“‘ACQUIRING PERSON’ shall mean any Person who is a Beneficial Owner of 10% or more of the
outstanding shares of Common Stock (or, in the case of John A. Burchett, more than 20% of
the outstanding shares of Common Stock); provided, however, that the term
‘Acquiring Person’ shall not include: (a) any Person (i) who shall become the Beneficial
Owner of 10% or more of the outstanding shares of Common Stock (or, in the case of John A.
Burchett, more than 20% of the outstanding shares of Common Stock) solely as a result of an
acquisition by the Company of shares of Common Stock, until such time hereafter or
thereafter as any of such Persons shall become the Beneficial Owner (other than by means of
a stock dividend or stock split) of any additional shares of Common Stock, (ii) who becomes
the Beneficial Owner of 10% or more of the outstanding Common Stock (or, in the case of
John A. Burchett, more than 20% of the outstanding shares of Common Stock) but who acquired
Beneficial Ownership of shares of Common Stock without any plan or intention to seek or
affect control of the Company, if, upon notice by the Company, such Person promptly enters
into an irrevocable commitment with the Company to divest, and thereafter promptly divests
(without exercising or retaining any power, including voting, with respect to such shares),
sufficient shares of Common Stock (or securities convertible into, exchangeable into or
exercisable for Common Stock) so that such Person ceases to be the Beneficial Owner of 10%
or more of the outstanding shares of Common Stock (or, in the case of John A. Burchett, more
than 20% of the outstanding shares of Common Stock) or (iii) who Beneficially Owns shares of
Common Stock consisting solely of one or more of (A) shares of Common Stock Beneficially
Owned pursuant to the grant or exercise of an option granted to such Person (an “Option
Holder”) by the Company in connection with an agreement to merge with, or acquire, the
Company entered into prior to a Flip-in Date, (B) shares of Common Stock (or securities
convertible into, exchangeable into or

- 2 -

 

exercisable for Common Stock) Beneficially Owned by such Option Holder or its Affiliates or
Associates at the time of grant of such option and (C) shares of Common Stock (or securities
convertible into, exchangeable into or exercisable for Common Stock) acquired by Affiliates
or Associates of such Option Holder after the time of such grant which, in the aggregate,
amount to less than 1% of the outstanding shares of Common Stock; (b) Walter Industries,
Inc., JWH Holding Company, LLC or any of their respective Affiliates or Associates, to the
extent such Persons become Beneficial Owners of 10% or more of the outstanding shares of
Common Stock solely as a result of the transactions contemplated by the Merger Agreement
(including any amendment thereto); or (c) solely during the period commencing upon the
consummation of the Exchange and terminating upon the earlier to occur of (i) the effective
time of the Merger and (ii) the termination of the Merger Agreement in accordance with its
terms, the Trust Preferred Sellers; provided, further, that if either of the
Trust Preferred Sellers would otherwise become an Acquiring Person as a result of the
consummation of the Exchange and the termination of the Merger Agreement in accordance with
its terms, such Trust Preferred Seller shall not be an Acquiring Person to the extent such
Trust Preferred Seller promptly enters into an irrevocable commitment with the Company to
divest, and thereafter promptly divests (without exercising or retaining any power,
including voting (except in accordance with any Voting Agreement between such Trust
Preferred Seller and the Company), with respect to such shares), itself of sufficient shares
of Common Stock (or securities convertible into, exchangeable into or exercisable for Common
Stock), so that such Trust Preferred Seller ceases to be the Beneficial Owner of 10% or more
of the outstanding shares of Common Stock. In addition, none of the Company, any
wholly-owned Subsidiary of the Company or any employee stock ownership or other employee
benefit plan of the Company or a wholly-owned Subsidiary of the Company shall be an
Acquiring Person.”

	 	b.	 	The definition of “Preferred Stock” in Article I, Section 1.1
of the Agreement is hereby amended, supplemented and restated in its entirety
to read as follows:

“‘PREFERRED STOCK’ shall mean the series of preferred stock, par value $0.01 per share, of
the Company, designated as Participating Preferred Stock, having substantially the
preferences, conversion or other rights, voting powers, restrictions, limitations as to
dividends, qualifications and terms and conditions of redemption set forth in EXHIBIT B
hereto and as shall be made a part of the charter of the Company upon the acceptance for
record by the State Department of Assessments and Taxation of Maryland of a charter document
including the terms thereof.”

	 	3.	 	Amendment of Section 2.3(a) of the Agreement.

	 	a.	 	Section 2.3(a) of the Agreement is hereby amended, supplemented
and restated in its entirety to read as follows:

     “(a) Subject to SECTIONS 3.1, 5.1 and 5.10 and subject to adjustment as herein
set forth, each Right will entitle the holder thereof, after the Separation

- 3 -

 

Time and prior to the Expiration Time, to purchase, for the Exercise Price, one
one-ten-thousandth of a share of Preferred Stock.”

	 	4.	 	Amendment of Section 3.1(d) of the Agreement.

	 	a.	 	Section 3.1(d) of the Agreement is hereby amended, supplemented
and restated in its entirety to read as follows:

          “(d) Whenever the Company shall become obligated or exercise the option under
SECTION 3.1(a) or (c) to issue shares of Common Stock upon exercise of or in
exchange for Rights, the Company, at its option, may substitute therefor shares of
Preferred Stock, at a ratio of one one-ten-thousandth of a share of Preferred Stock
for each share of Common Stock so issuable.

	 	5.	 	Amendment of Section 5.9 of the Agreement.

	 	a.	 	The Rights Agent address information set forth in
Section 5.9 of the Agreement is hereby amended, supplemented and restated in
its entirety to read as follows:

“Computershare Trust Company, N.A.

250 Royall Street

Canton, MA 02021

Attention: Client Services”

	 	6.	 	Amendment of Section 5.16 of the Agreement.

	 	a.	 	The second sentence of Article V, Section 5.16 of the Agreement
is hereby amended, supplemented and restated in its entirety to read as
follows:

“For purposes of this Section 5.16, the term ‘Future Director’ shall mean any director who
became a member of the Company’s Board of Directors less than 180 days prior to such
redemption, modification or termination; provided, however, that in no event
shall any person named as a director of the Company in the Articles of Merger filed with the
State Department of Assessments and Taxation of Maryland effecting the Merger be considered
a ‘Future Director’ for purposes of this Section 5.16, notwithstanding that such director
may not have been a director prior to the consummation of the Merger.”

	 	7.	 	Amendment to Form of Rights Certificate.

	 	a.	 	Exhibit A to the Agreement is hereby amended, supplemented and
restated in its entirety with Exhibit A hereto.

	 	8.	 	Amendment to Terms of Preferred Stock.

	 	a.	 	Exhibit B to the Agreement is hereby amended, supplemented and
restated in its entirety with Exhibit B hereto.

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	 	9.	 	Miscellaneous.

	 	a.	 	Except as expressly modified hereby, the Agreement remains in
full force and effect. Upon the execution and delivery hereof, as of the day
and year first above written, the Agreement shall thereupon be deemed to be
amended and supplemented as hereinabove set forth as fully and with the same
effect as if the amendments and supplements made hereby were originally set
forth in the Agreement, and this Amendment and the Agreement shall henceforth
be read, taken and construed as one and the same instrument, but such
amendments and supplements shall not operate so as to render invalid or
improper any action heretofore taken under the Agreement.
	 
	 	b.	 	Section headings in this Amendment are included herein for
convenience of reference only and shall not constitute a part of this Amendment
for any other purpose.
	 
	 	c.	 	This Amendment may be executed in one or more counterparts,
each of which will be deemed to be an original copy of this Amendment and all
of which, when taken together, will be deemed to constitute one and the same
agreement. The exchange of copies of this Amendment and of signature pages by
facsimile or electronic transmission shall constitute effective execution and
delivery of this Amendment as to the parties hereto and may be used in lieu of
the original Amendment for all purposes. Signatures of the parties hereto
transmitted electronically or by facsimile shall be deemed to be their original
signatures for all purposes
	 
	 	d.	 	This Amendment and the Agreement, as amended hereby, shall be
governed by and construed in accordance with the laws of the State of Maryland,
without regard to conflicts of laws principles.

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          IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed as of the day
and year first above written.

	 	 	 	 	 	 	 
	 	 	HANOVER CAPITAL MORTGAGE HOLDINGS, INC.	 
	 
	 	 	 	 	 	 
	 

	 	By:	/s/ John A. Burchett  
	 	 
	 

	 	Name: 
	John A. Burchett
	 	 
	 

	 	Title:	President and Chief Executive
Officer 	 	 
	 
	 	 	 	 	 	 
	 

	 	COMPUTERSHARE TRUST COMPANY, N.A.
	 
	 
	 	 	 	 	 	 
	 

	 	By:	/s/ Dennis V. Moccia  
	 	 
	 

	 	Name: 
	Dennis V. Moccia
	 	 
	 

	 	Title:	Managing Director 	 	 

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EXHIBIT A

[Form of Rights Certificate]

Certificate No. W- ________ Rights

THE RIGHTS ARE SUBJECT TO REDEMPTION OR MANDATORY EXCHANGE, AT THE OPTION OF THE COMPANY, ON THE
TERMS SET FORTH IN THE RIGHTS AGREEMENT. RIGHTS BENEFICIALLY OWNED BY ACQUIRING PERSONS OR
AFFILIATES OR ASSOCIATES THEREOF (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) OR TRANSFEREES
OF ANY OF THE FOREGOING WILL BE VOID.

Rights Certificate

HANOVER CAPITAL MORTGAGE HOLDINGS, INC.

     This certifies that                     , or registered assigns, is the registered holder of the
number of Rights set forth above, each of which entitles the registered holder thereof, subject to
the terms, provisions and conditions of the Stockholder Protection Rights Agreement, dated as of
April 11, 2000, as amended September 26, 2001, June 10, 2002, and September 30, 2008 (as amended
from time to time, the “Rights Agreement”), between Hanover Capital Mortgage Holdings, Inc., a
Maryland corporation (the “Company”) and Computershare Trust Company, N.A., f/k/a EquiServe Trust
Company, N.A., successor rights agent to State Street Bank & Trust Company (the “Rights Agent”,
which term shall include any successor Rights Agent under the Rights Agreement), to purchase from
the Company at any time after the Separation Time (as such term is defined in the Rights Agreement)
and prior to the close of business on April 28, 2010, one one-ten-thousandth of a fully paid share
of Participating Preferred Stock, par value $0.01 per share (the “Preferred Stock”), of the Company
(subject to adjustment as provided in the Rights Agreement) at the Exercise Price referred to
below, upon presentation and surrender of this Rights Certificate with the Form of Election to
Exercise duly executed at the principal office of the Rights Agent in The City of New York. The
Exercise Price, initially $17.00 per Right, shall be subject to adjustment in certain events as
provided in the Rights Agreement.

     In certain circumstances described in the Rights Agreement, the Rights evidenced hereby may
entitle the registered holder thereof to purchase securities of an entity other than the Company or
securities of the Company other than Preferred Stock or assets of the Company, all as provided in
the Rights Agreement.

     This Rights Certificate is subject to all of the terms, provisions and conditions of the
Rights Agreement, which terms, provisions and conditions are hereby incorporated herein by
reference and made a part hereof and to which Rights Agreement reference is hereby made for a full
description of the rights, limitations of rights, obligations, duties and immunities hereunder of
the Rights Agent, the Company and the holders of the Rights Certificates. Copies of the Rights
Agreement are on file at the principal office of the Company and are available without cost upon
written request.

A - 1 

 

     This Rights Certificate, with or without other Rights Certificates, upon surrender at the
office of the Rights Agent designated for such purpose, may be exchanged for another Rights
Certificate or Rights Certificates of like tenor evidencing an aggregate number of Rights equal to
the aggregate number of Rights evidenced by the Rights Certificate or Rights Certificates
surrendered. If this Rights Certificate shall be exercised in part, the registered holder shall be
entitled to receive, upon surrender hereof, another Rights Certificate or Rights Certificates for
the number of whole Rights not exercised.

     Subject to the provisions of the Rights Agreement, each Right evidenced by this Certificate
may be (a) redeemed by the Company under certain circumstances, at its option, at a redemption
price of $0.01 per Right or (b) exchanged by the Company under certain circumstances, at its
option, for one share of Common Stock or one one-ten-thousandth of a share of Preferred Stock per
Right (or, in certain cases, other securities or assets of the Company), subject in each case to
adjustment in certain events as provided in the Rights Agreement.

     No holder of this Rights Certificate, as such, shall be entitled to vote or receive dividends
or be deemed for any purpose the holder of any securities which may at any time be issuable on the
exercise hereof, nor shall anything contained in the Rights Agreement or herein be construed to
confer upon the holder hereof, as such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to receive notice of
meetings or other actions affecting stockholders (except as provided in the Rights Agreement), or
to receive dividends or subscription rights, or otherwise, until the Rights evidenced by this
Rights Certificate shall have been exercised or exchanged as provided in the Rights Agreement.

     This Rights Certificate shall not be valid or obligatory for any purpose until it shall have
been countersigned by the Rights Agent.

A - 2 

 

     WITNESS the facsimile signature of the proper officers of the Company and its corporate seal.

	 	 	 	 	 	 	 	 	 
	Date:
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	ATTEST:	 	 	 	HANOVER CAPITAL MORTGAGE HOLDINGS, INC.
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:	 	 
	 	 	 	 	 	 	 
	Secretary	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Countersigned:	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	By:
	 	 	 	 	 	 	 	 
	 

	 	 

Authorized Signature
	 	 	 	 	 	 

A - 3 

 

[Form of Reverse Side of Rights Certificate]

FORM OF ASSIGNMENT

(To be executed by the registered holder if such

holder desires to transfer this Rights Certificate.)

     FOR VALUE RECEIVED _______________________________________________________________ hereby sells, assigns and
transfers unto __________________________________________________________________________________________

(Please print name and address of transferee)

this Rights Certificate, together with all right, title and interest therein, and does hereby
irrevocably constitute and appoint  __________________ Attorney, to transfer the within Rights
Certificate on the books of the within-named Company, with full power of substitution.

Dated:                                         

	 	 	 
	 

	 	Signature Guaranteed:
	 
	 	 
	 

	 	                                                            

Signature
	 
	 	 
	 

	 	(Signature must correspond to name as written
upon the face of this Rights Certificate in
every particular, without alteration or
enlargement or any change whatsoever)

A - 4

 

     Signatures must be guaranteed by an eligible guarantor institution (banks, stockbrokers,
savings and loan associations and credit unions with membership in an approved signature guarantee
Medallion program), pursuant to SEC Rule 17Ad-15.

 

(To be completed if true)

     The undersigned hereby represents, for the benefit of all holders of Rights and shares of
Common Stock, that the Rights evidenced by this Rights Certificate are not, and, to the knowledge
of the undersigned, have never been, Beneficially Owned by an Acquiring Person or an Affiliate or
Associate thereof (as defined in the Rights Agreement).

	 	 	 
	 

	 	 
	 

	 	Signature

 

NOTICE

     In the event the certification set forth above is not completed in connection with a purported
assignment, the Company will deem the Beneficial Owner of the Rights evidenced by the enclosed
Rights Certificate to be an Acquiring Person or an Affiliate or Associate thereof (as defined in
the Rights Agreement) or a transferee of any of the foregoing and accordingly will deem the Rights
evidenced by such Rights Certificate to be void and not transferable or
exercisable.

A - 5

 

[To be attached to each Rights Certificate]

FORM OF ELECTION TO EXERCISE

(To be executed if holder desires to

exercise the Rights Certificate.)

			
	TO:	 	HANOVER CAPITAL MORTGAGE

HOLDINGS, INC.

The undersigned hereby irrevocably elects to exercise                      whole Rights represented by the
attached Rights Certificate to purchase the shares of Participating Preferred Stock issuable upon
the exercise of such Rights and requests that certificates for such shares be issued in the name
of:

	 	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Address:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 	 	Social Security or Other Taxpayer Identification	 	 
	 
	 	 	 	 	 	 
	 

	 	Number:	 	 	 	 
	 

	 	 	 	 

	 	 

If such number of Rights shall not be all the Rights evidenced by this Rights Certificate, a new
Rights Certificate for the balance of such Rights shall be registered in the name of and delivered
to:

	 	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Address:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 	 	Social Security or Other Taxpayer Identification	 	 
	 
	 	 	 	 	 	 
	 

	 	Number:	 	 	 	 
	 

	 	 	 	 

	 	 

Dated:                                                             

	 	 	 	 	 
	 

	 	 	 	Signature Guaranteed:
	 
	 	 	 	 
	 

	 	 	 	 
	 

	 	 	 	Signature
	 
	 	 	 	 
	 

	 	 	 	(Signature must correspond to name as written
upon the face of this Rights Certificate in
every particular, without alteration or
enlargement or any change whatsoever)

A - 6

 

     Signatures must be guaranteed by an eligible guarantor institution (banks, stockbrokers,
savings and loan associations and credit unions with membership in an approved signature guarantee
Medallion program), pursuant to SEC Rule 17Ad- 15.

 

(To be completed if true)

     The undersigned hereby represents, for the benefit of all holders of Rights and shares of
Common Stock, that the Rights evidenced by this Rights Certificate are not, and, to the knowledge
of the undersigned, have never been, Beneficially Owned by an Acquiring Person or an Affiliate or
Associate thereof (as defined in the Rights Agreement).

	 	 	 
	 

	 	 
	 

	 	Signature

 

NOTICE

     In the event the certification set forth above is not completed in connection with a purported
assignment, the Company will deem the Beneficial Owner of the Rights evidenced by the enclosed
Rights Certificate to be an Acquiring Person or an Affiliate or Associate thereof (as defined in
the Rights Agreement) or a transferee of any of the foregoing and accordingly will deem the Rights
evidenced by such Rights Certificate to be void and not transferable or exercisable.

A - 7

 

EXHIBIT B

TERMS OF PARTICIPATING PREFERRED STOCK

     The preferences, conversion or other rights, voting powers, restrictions, limitations as to
dividends, qualifications and terms and conditions of redemption of a series of preferred stock,
par value $0.01 per share, of Hanover Capital Mortgage Holdings, Inc., a Maryland corporation (the
“Corporation”), designated as Participating Preferred Stock, par value $0.01 per share, shall be as
follows, with any changes to the use of defined terms or enumeration or lettering of sections and
subsections or form as may be necessary or appropriate upon the filing thereof with the State
Department of Assessments and Taxation of Maryland:

     (i) The designation of the Participating Preferred Stock shall be “Participating Preferred
Stock.” Each share of this Series shall be identical in all respects with the other shares of this
Series except as to the dates from and after which dividends thereon shall be cumulative.

     (ii) The number of shares of this Series shall initially be 583,000, which number may from
time to time be increased or decreased (but not below the number then outstanding) by the Board of
Directors of the Corporation (the “Board of Directors”). Shares of this Series acquired by the
Corporation shall constitute authorized but unissued shares of Preferred Stock without designation
as to series. Shares of this Series may be issued in fractional shares, which fractional shares
shall entitle the holder, in proportion to such holder’s fractional share, to all rights of a
holder of a whole share of this Series.

     (iii) The holders of full or fractional shares of this Series shall be entitled to receive,
when and as authorized by the Board of Directors and declared by the Corporation, but only out of
funds legally available therefor, dividends, (A) on each date that dividends or other distributions
(other than dividends or distributions payable in Common Stock of the Corporation) are payable on
or in respect of Common Stock comprising part of the Reference Package (as defined below), in an
amount per whole share of this Series equal to the aggregate amount of dividends or other
distributions (other than dividends or distributions payable in Common Stock of the Corporation)
that would be payable on such date to a holder of the Reference Package and (B) on the last day of
March, June, September and December in each year, in an amount per whole share of this Series equal
to the excess (if any) of $425.00 (the “Base Dividend Amount”) over the aggregate dividends paid
per whole share of this Series during the three month period ending on such last day. Each such
dividend shall be paid to the holders of record of shares of this Series on the date, not exceeding
sixty days preceding such dividend or distribution payment date, fixed for the purpose by the Board
of Directors in advance of payment of each particular dividend or distribution. Dividends on each
full and each fractional share of this Series shall be cumulative from the date such full or
fractional share is originally issued; provided that any such full or fractional share originally
issued after a dividend record date and on or prior to the dividend payment date to which such
record date relates shall not be entitled to receive the dividend payable on such dividend payment
date or any amount in respect of the period from such original issuance to such dividend payment
date.

     The term “Reference Package” shall mean 10,000 shares of Common Stock, par value $0.01 per
share (the “Common Stock”) of the Corporation.

 

 

     Holders of shares of this Series shall not be entitled to any dividends, whether payable in
cash, property or stock, in excess of full cumulative dividends, as herein provided on this Series.

     So long as any shares of this Series are outstanding, no dividend (other than a dividend in
Common Stock or in any other stock ranking junior to this Series as to dividends and upon
liquidation) shall be declared or paid or set aside for payment or other distribution declared or
made upon the Common Stock or upon any other stock ranking junior to this Series as to dividends or
upon liquidation, nor shall any Common Stock nor any other stock of the Corporation ranking junior
to or on a parity with this Series as to dividends or upon liquidation be redeemed, purchased or
otherwise acquired for any consideration (or any moneys be paid to or made available for a sinking
fund for the redemption of any shares of any such stock) by the Corporation (except by conversion
into or exchange for stock of the Corporation ranking junior to this Series as to dividends and
upon liquidation), unless, in each case, the full cumulative dividends (including the dividend to
be due upon payment of such dividend, distribution, redemption, purchase or other acquisition) on
all outstanding shares of this Series shall have been, or shall contemporaneously be, paid.

     (iv) In the event of any merger, consolidation, reclassification or other transaction in which
the shares of Common Stock are exchanged for or changed into other stock or securities, cash and/or
any other property, then in any such case the shares of this Series shall at the same time be
similarly exchanged or changed in an amount per whole share equal to the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case may be, that a holder of
the Reference Package would be entitled to receive as a result of such transaction.

     (v) In the event of any liquidation, dissolution or winding up of the affairs of the
Corporation, whether voluntary or involuntary, the holders of full and fractional shares of this
Series shall be entitled, before any distribution or payment is made on any date to the holders of
the Common Stock or any other stock of the Corporation ranking junior to this Series upon
liquidation, to be paid in full an amount per whole share of this Series equal to the greater of
(A) $170,000.00 (the “Base Liquidation Amount”) or (B) the aggregate amount distributed or to be
distributed prior to such date in connection with such liquidation, dissolution or winding up to a
holder of the Reference Package (such greater amount being hereinafter referred to as the
“Liquidation Preference”), together with accrued dividends to such distribution or payment date,
whether or not earned or declared. If such payment shall have been made in full to all holders of
shares of this Series, the holders of shares of this Series as such shall have no right or claim to
any of the remaining assets of the Corporation.

     In the event the assets of the Corporation available for distribution to the holders of shares
of this Series upon any liquidation, dissolution or winding up of the Corporation, whether
voluntary or involuntary, shall be insufficient to pay in full all amounts to which such holders
are entitled pursuant to the first paragraph of this Section (v), no such distribution shall be
made on account of any shares of any other class or series of Preferred Stock ranking on a parity
with the shares of this Series upon such liquidation, dissolution or winding up unless
proportionate distributive amounts shall be paid on account of the shares of this Series, ratably
in proportion to

 

 

the full distributable amounts for which holders of all such parity shares are respectively
entitled upon such liquidation, dissolution or winding up.

     Upon the liquidation, dissolution or winding up of the Corporation, the holders of shares of
this Series then outstanding shall be entitled to be paid out of assets of the Corporation
available for distribution to its stockholders all amounts to which such holders are entitled
pursuant to the first paragraph of this Section (v) before any payment shall be made to the holders
of Common Stock or any other stock of the Corporation ranking junior upon liquidation to this
Series.

     For the purposes of this Section (v), the consolidation or merger of, or binding share
exchange by, the Corporation with any other corporation shall not be deemed to constitute a
liquidation, dissolution or winding up of the Corporation.

     (vi) The shares of this Series shall not be redeemable.

     (vii) In addition to any other vote or consent of stockholders required by law or by the
charter of the Corporation, each whole share of this Series shall, on any matter, vote as a class
with any other stock comprising part of the Reference Package and voting on such matter and shall
have the number of votes thereon that a holder of the Reference Package would have.

     (viii) In the event the Corporation shall, at any time or from time to time (other than in
connection with the merger of JWH Holding Company, LLC, a Delaware corporation, with and into the
Corporation), (A) declare or pay a dividend on any shares of Common Stock payable in Common Stock,
(B) subdivide any shares of Common Stock or (C) combine any shares of Common Stock into a smaller
number of shares, then and in each such case (X) the Reference Package after such event shall be
the number of shares of Common Stock that a holder of the Reference Package immediately prior to
such event would hold thereafter as a result thereof and (Y) the Base Dividend Amount and the Base
Liquidation Amount shall be similarly adjusted to reflect such dividend, subdivision or combination
of shares.exv10w8w3

Exhibit 10.8.3

Execution Copy

SECOND AMENDED AND RESTATED EMPLOYMENT AGREEMENT

(John A. Burchett)

     THIS SECOND AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the “Agreement”) is by and between
Hanover Capital Mortgage Holdings, Inc., a Maryland corporation, with its offices located at 200
Metroplex Drive, Suite 100, Edison, New Jersey 08817 (“Hanover”), or any successor to Hanover (the
“Company”), and John A. Burchett (the “Employee”), an individual whose residence is 896 Highland
Avenue, Westfield, New Jersey 07090. This Agreement is an amendment and restatement of that
certain employment agreement entered into between the Company and the Employee as of July 1, 2007
(the “Prior Agreement”), and supersedes that Prior Agreement in all respects. This Agreement is
effective as of the 30th day of September, 2008 (the “Effective Date”).

     WHEREAS, the Employee is currently employed by the Company;

     WHEREAS, in connection with the contemplated merger transaction between the Company and JWH
Holding Company LLC (“JWH”), (the “Merger”); and

     WHEREAS, the Company desires to ensure the continued availability to the Company of the
Employee’s services, and the Employee is willing to render such services, all upon and subject to
the terms and conditions contained in this Agreement;

     NOW, THEREFORE, in consideration of the mutual covenants set forth in this Agreement, the
Company and the Employee agree as follows:

     1. Employment and Acceptance of Employment: Term. Upon and subject to the terms and
conditions set forth in this Agreement, the Company hereby employs the Employee in such senior
management position(s) as the President of the Company (the “President”) or Chief Executive
Officer of the Company (the “CEO”) or the Board of Directors of the Company (the “Board”) may
determine from time to time, and the Employee hereby agrees to accept such employment, for a
period of three years (unless sooner terminated as hereinafter set forth) (the “Term”) commencing
on the Effective Date and ending three years thereafter (the “Expiration Date”). Should the
contemplated Merger not be consummated, the Prior Agreement shall remain in full force and effect
and this Agreement shall be void and without effect.

     2. Duties. It is the intention of the Company and the Employee that, subject to the
direction and supervision of the President, the Employee shall have full discretionary authority
to: (a) facilitate the integration of the Company and JWH following the Merger, and generally
assist in and facilitate the consummation of the Merger; and (b) promote and develop the business
of the Company. The Employee shall report to the President and if requested, Employee shall serve
as a member of the Executive Committee of the Company. The

 

 

Employee shall also have authority to incur such obligations on behalf of the Company as may
be necessary or appropriate in the ordinary course of business as described in this Section. The
Employee agrees, during the Term and any extension of the Term, to devote the Employee’s entire
business and professional time, attention, and energies exclusively to the business of the Company
and its subsidiaries (including, without limitation, Hanover Capital Partners 2 Ltd., and Hanover
Capital Securities, Inc.) as shall be necessary, advisable or required to perform the duties of
the Employee’s positions specified in Section 1, and to conform to the rules, regulations,
instructions, personnel practices and policies of the Company, as existing and amended from time
to time by the Company or its Board. Notwithstanding the foregoing, during the Term and any
extension of the Term, the Employee may (i) serve as an officer, director, trustee or committee
member of any religious, professional, civic, charitable or educational organization, or as a
director of any corporation whose business is not competitive with the Company or any of its
subsidiaries, and (ii) engage in, and devote time and effort to, any and all personal investments
or personal business ventures (which shall in no event include being an officer or principal
shareholder of any public or private company) unrelated to the business or affairs of the Company
and its subsidiaries, in each case so long as such activities do not materially interfere with the
Employee’s obligations to the Company and its subsidiaries or conflict in any way with the
business of the Company or its subsidiaries; provided, however, that Employee must obtain the
Board’s written consent before entering into a personal business venture or accepting a board
position (other than with a subsidiary of the Company) and, when requesting such consent, must
provide the Company with any reasonably requested information concerning such venture or position.
The Company’s consent to permit Employee to serve on the board of another organization or to
enter into a business venture is not an endorsement of that other organization or venture, nor
would Employee’s subsequent activity in such other organization or venture constitute involvement
of the Company in the affairs or activities of that organization or venture.

     3. Compensation and Benefits.

     (a) Base Salary. In consideration of the Employee’s performance of services under
this Agreement, the Company will pay to the Employee, during the first year of the Term of the
Employee’s employment under this Agreement, and the Employee agrees to accept from the Company for
the Employee’s services under this Agreement, an annual salary equal to the sum of (x) $393,585.00
(the “Base Salary”), plus (y) the Disability Insurance Supplement described below, payable on a pro
rata basis in accordance with the Company’s normal payroll practices applicable to its executive
officers, but not less often than monthly. The Disability Insurance Supplement shall be
approximately equal to the smallest amount determined by the Company in its sole discretion to be
sufficient, after the payment of state, federal, and local income taxes on such amount, to permit
Employee to pay premiums for the disability insurance coverage referred to in Section 3(e)(ii)
below, provided, however, that if during the Term such disability insurance coverage shall ever be
insufficient to provide a benefit upon total disability equal to sixty-five percent (65%) of the
Base Salary then in effect, payable until the Employee is seventy (70) years old, Employee shall
also be eligible for the Additional Supplemental Benefit described in Section 3(e)(ii) below in the
event of Disability as defined in Section 3(e)(ii). The Employee’s Base Salary shall be subject to
annual review by the Compensation Committee of the Board (the

2

 

“Committee”) and may be adjusted (upwards but not downwards) in such amounts as the Committee
may determine in its sole discretion. To that end, the Employee shall receive a performance review
at least once a year from the Committee in connection with which the Employee shall be eligible for
such merit increases and other salary adjustments as the Committee may approve or not in its sole
discretion.

     (b) Bonus. In addition to the Base Salary, the Employee shall be entitled during the
Term and any extension thereof to participate in any and all bonus plans adopted by the Board or
Committee for the executive officers of the Company and its subsidiaries.

     (c) Stock Options. The Employee shall be entitled to participate in the Company’s
1997 Executive and Non-Employee Director Stock Option Plan, 1999 Equity Incentive Plan, and any and
all other equity compensation plans adopted by the Board for the employees of the Company and its
subsidiaries.

     (d) Benefits. During the Term of this Agreement and any extension thereof, the
Employee shall be entitled to participate in any medical, dental and other health benefit plans,
and to participate in any pension, bonus, profit-sharing or similar plan or program that may be
established by the Company and made available to its executive officers generally, in accordance
with the terms of such plans.

     (e) Life and Disability Insurance. During the Term and any extension thereof, the
Company shall provide to the Employee (i) at the expense of the Company a term life insurance
policy with a death benefit equal to $2,000,000 and the proceeds of which shall be payable to such
beneficiary or beneficiaries as the Employee shall designate in writing; and (ii) an offer of
disability insurance coverage, at the Employee’s expense, which shall provide the Employee with a
benefit upon total disability equal to sixty-five percent (65%) of the Base Salary then in effect,
payable until the Employee is seventy (70) years old; provided, however, that if the Company
determines in its sole discretion that such a level of disability insurance coverage is not
reasonably commercially available, it shall provide the Employee, at the expense of the Company,
with an Additional Supplemental Benefit (as hereinafter defined) in the event of Disability (as
hereinafter defined) for each full calendar month during which the Employee has not attained the
age of seventy (70) years and, as a result of a Disability the Employee is unable to engage in any
gainful activity. The term “Additional Supplemental Benefit” means the smallest amount determined
by the Company in its sole discretion necessary to compensate the Employee, after the Employee’s
receipt of any offered insured disability benefits, and Employee’s payment of any state, federal,
and local income taxes on such Additional Supplemental Benefit, in an amount equal to one-twelfth
of sixty-five percent 65% of the Employee’s Base Salary as in effect on the date of the onset of
the Disability. The term “Disability” means any medically determinable physical or mental
impairment that can be expected to result in death or can be expected to last for a continuous
period of not less than 12 months, as a result of which the Employee is unable to engage in any
substantial gainful activity.

     (f) Paid Vacations. The Employee shall be entitled to annual paid vacations of six
(6) weeks in each year of the Term and any extension of the Term at such times and for such

3

 

periods as may be mutually acceptable to the Company and the Employee, in accordance with the
Company’s policies governing vacations for its executive officers generally. Unused vacation in
any given year shall not accumulate from year to year and Employee shall not be entitled to any
cash payment for, or payment in lieu of, unused vacation time.

     (g) Paid Holidays and Personal Days. The Employee shall be entitled to all paid
holidays and personal days, in accordance with the Company’s policies governing holidays and
personal days for its executive officers generally.

     (h) Deductions. The Company shall have the right to deduct from the Base Salary and
all other cash amounts payable by the Company under the provisions of this Agreement to the
Employee or, if applicable, to the Employee’s estate, legal representatives or other beneficiary
designated in writing by the Employee (a “Designee”), all social security taxes, all federal, state
and municipal taxes and all other charges and deductions which now or hereafter are imposed by law
as charges on the compensation of the Employee or charges on cash benefits payable by the Company
under this Agreement to the Employee’s estate, legal representatives or Designee.

     (i) Club Dues. The Company shall pay all membership dues owed to clubs (as selected
by the Employee), not to exceed $2,000 per year, provided, however, that with respect to any such
payments by the Employee on and after January 1, 2005, no such reimbursement will be made after the
last day of the calendar year following the year in which the expense was incurred.

     4. Reimbursement of Certain Expenses. The Company shall reimburse the Employee, upon
production of accounts and vouchers or other reasonable evidence of payment by the Employee, all in
accordance with the Company’s regular procedures in effect from time to time and in form suitable
to establish the validity and deductibility of such expenses for tax purposes, all reasonable,
ordinary and necessary travel, automobile and other expenses as shall have been incurred by the
Employee in the performance of the Employee’s duties under this Agreement; provided, however, that
with respect to any such payments by the Employee on and after January 1, 2005, no such
reimbursement will be made after the last day of the calendar year following the year in which the
expense was incurred.

     5. [INTENTIONALLY LEFT BLANK]

     6. Confidentiality.

     (a) Obligation to Keep Confidential. The Employee acknowledges that the Employee’s
employment by the Company brings the Employee into close contact with many confidential affairs of
the Company, its subsidiaries and its customers, including, without limitation, information about
costs, profits, markets, sales, key personnel, pricing policies, operational methods, concepts,
and other business affairs and methods of the Company, its subsidiaries and its customers and
other information not readily available to the public, as well as plans for future developments
(collectively referred to hereinafter as “Proprietary

4

 

Information”). The Employee further acknowledges that the relationships between the Company,
its subsidiaries and its officers, employees, agents, and customers constitute a valuable asset of
the Company (the “Other Proprietary Assets”). In recognition of the foregoing, the Employee
covenants and agrees:

          (i) That all Proprietary Information and Other Proprietary Assets shall be the exclusive
property of the Company and that the Employee will keep secret all Proprietary Information and
Other Proprietary Assets and will not use the same for the Employee’s own benefit or disclose the
same to, or use the same for the benefit of, anyone outside of the Company, either during or after
the Employee’s employment by the Company; and

          (ii) That Employee will deliver promptly to the Company on termination of Employee’s
employment by the Company, or at any time the Board may so request, all Proprietary Information
and Other Proprietary Assets, including, without limitation, all memoranda, notes, documentation,
data, records, reports and other tangible manifestations of the Proprietary Information and Other
Proprietary Assets (and all copies thereof), that Employee may then (or thereafter) possess or
have under the Employee’s control.

     (b) Exceptions. The Employee’s undertakings and obligations under this Section 6
will not apply to any Proprietary Information or Other Proprietary Asset which (i) is or becomes
generally known to the public through no action on the part of the Employee, (ii) is generally
disclosed to third parties by the Company without restriction on such third parties, (iii) is
approved for release by written authorization of the Board, or (iv) is the subject matter of a
lawful request or subpoena by and within the authority of a court or governmental agency or other
body, provided, however, no such information shall be released by Employee without Employee
providing to the Company thirty (30) days prior written notice to the Company and providing the
Company the right to seek a protective order or injunctive relief preventing the release of such
information.

     7. Non-Solicitation. The Employee hereby covenants and agrees that, if the Employee’s
employment with the Company is terminated other than (i) by the Company pursuant to Section 9(b) or
(ii) by the Employee pursuant to Section 9(f), the Employee will not, for one year following the
Termination Date, induce or attempt to induce any officer, employee, agent, consultant or customers
of the Company or its subsidiaries to discontinue such affiliation with the Company or its
subsidiaries or to refrain from entering into new business relationships with the Company or its
subsidiaries.

     8. Specific Performance. Without intending to limit the remedies available to the
Company, the Employee agrees that damages at law will be an insufficient remedy to the Company in
the event that the Employee violates the terms of Sections 6 or 7 of this Agreement and that the
Company may apply for and obtain immediate injunctive relief in any court of competent jurisdiction
or restrain the breach or threatened breach of, or otherwise to specifically enforce, any of the
agreements and covenants contained in such Sections. The parties hereto understand that each of
the agreements and covenants of the Employee contained in Sections 6

5

 

and 7 of this Agreement is an essential element of this Agreement and agree that the
obligations of the Employee thereunder will survive the termination of this Agreement.

     9. Termination.

     (a) Termination by the Company for Good Cause. The Company may terminate this
Agreement and its obligations to the Employee under this Agreement, and thereby terminate
Employee’s employment, at any time for “Good Cause”, which shall mean only: (i) the conviction of
the Employee of (or the plea by the Employee of nolo contendere to) a felony or any
crime which involves moral turpitude; (ii) the good faith determination by the Board that the
Employee has failed to perform a material amount of Employee’s duties under this Agreement (other
than a failure to perform duties resulting from the Employee’s incapacity due to physical or mental
illness), which failure to perform duties shall not have been cured within thirty (30) days after
the receipt by the Employee of written notice thereof from the Board specifying with reasonable
particularity such alleged failure; (iii) any absence from the Company’s regular full-time
employment in excess of three consecutive days that is not due to a vacation, participation in a
permitted activity, bona fide illness, disability, death or other reason expressly authorized by
the Board in advance; (iv) any act or acts of personal dishonesty (including, without limitation,
any insider trading or unauthorized trading in the Company’s securities) by the Employee; (v) the
violation of Employee’s fiduciary duties to the Company, or the violation of any law, statute or
regulation relating to the operation of the Company’s business; or (vi) misconduct that impairs
Employee’s ability effectively to perform the duties or responsibilities of Employee’s position.
In the event of such termination, the Employee shall only be entitled to receive any unreimbursed
expenses payable pursuant to Section 4 above that were properly incurred prior to Employee’s
termination of employment. In addition, if the Company terminates this Agreement due to the
conviction of the Employee of (or the plea by the Employee of nolo contendere to) a
felony as a result of (iv) above, then Employee will pay all costs and expenses (including
reasonable attorney’s fees) incurred by the Company in connection therewith.

     (b) Termination by the Company Without Good Cause. In the event the Company
terminates this Agreement prior to the Expiration Date, and thereby terminates the Employee’s
employment, without Good Cause, then subject to the conditions set forth in Section 9(h), the
Employee shall be entitled to the following benefits:

          (i) If the termination of Employee’s employment is an “Involuntary Termination” as defined in
Section 9(b)(v), the Company shall pay the Employee (I) a payment (“the Separation Payment”), in a
single lump sum on or before the sixtieth day next following the date of Employee’s “separation
from service” (as defined in Section 9(h) below), equal to the lesser of: (a) the Severance Limit,
or (b) the greater of either: (x) the Base Salary Amount; or (y) Employee’s Base Salary at the rate
then in effect through the Expiration Date; and, if Employee’s Severance Compensation is not fully
paid out pursuant to clause (I), then (II), as a separate payment from the Separation Payment,
payment, in the form of salary continuation, beginning on the first regular payroll date next
following the first day that is six months after the date of Employee’s separation from service, of
the greater of either: (x) the Base Salary Amount, minus

6

 

the amount paid pursuant to clause (I) above; or (y) Employee’s Base Salary at the rate then
in effect through the Expiration Date minus the amount paid pursuant to clause (I) above; or

          (ii) If the termination of the Employee’s employment is not an Involuntary Termination,
beginning on the first regular payroll date next following the first day that is six months after
the date of Employee’s separation from service and in the manner provided in Section 9(i), the
Company shall pay the Employee, in the form of salary continuation, the greater of either: (x) the
Base Salary Amount; or (y) Employee’s Base Salary at the rate then in effect through the
Expiration Date.

          (iii) In any of the circumstances described in Sections 9(b)(i) or 9(b)(ii), the Company
shall pay the Employee for any unreimbursed expenses payable pursuant to Section 4 above that were
properly incurred prior to the Employee’s termination of employment, to the extent such expenses
would have been reimbursable pursuant to Section 4 above.

          (iv) As used in this Agreement, the term “Severance Limit” means the lesser of twice the
lesser of: (A) the sum of the Employee’s annualized compensation based upon the annual rate of pay
for services provided to the Company for the taxable year of the Employee’s preceding the taxable
year of the Employee in which the Employee has a separation from service with the Company
(adjusted for any increase during that year that was expected to continue indefinitely if the
Employee had not separated from service); or (B) the maximum amount that may be taken into account
under a qualified plan pursuant to Code § 401(a)(17) for the year in which the Employee has a
separation from service.

          (v) As used in this Agreement, the term “Involuntary Termination” means a separation from
service that satisfies one of the following sets of criteria: (I) it results from a Termination by
the Company Without Good Cause pursuant to Section 9(b) or a Termination Upon or Following
Expiration of This Agreement pursuant to Section 9(g), and the termination is due to the
independent exercise of the Company’s unilateral authority to terminate the Employee’s services,
other than due to the Employee’s implicit or explicit request, where the Employee was willing and
able to continue performing services; provided, however, that in the case of a Termination Upon or
Following Expiration of This Agreement pursuant to Section 9(g), the separation from service is an
Involuntary Termination only if it satisfies the additional condition that the Employee was willing
and able to execute a new contract providing terms and conditions substantially similar to those in
the expiring Agreement and to continue providing services as described in the expiring Agreement;
or (II) the separation from service results from a Termination By Employee Following Change in
Control as described in Section 9(f) that satisfies all the criteria for the payment of the
benefits described in 9(f).

          (vi) As used in this Section 9(b) of the Agreement, the term “Base Salary Amount” means one
times Employee’s Base Salary at the rate then in effect. Provided, however, that if Employee’s
Termination by the Company Without Good Cause occurs within 90 days following a Change in Control
(as defined in Section 9(f)(iii) below), the Base Salary Amount shall mean two times Employee’s
Base Salary at the rate then in effect.

7

 

          (vii) In the event that the Employee shall obtain other full-time or part-time employment or
consulting work during the one year period following the Termination Date, unless the termination
occurred within 90 days following a Change in Control, the amount of payments Employee receives
from such employment or work shall be credited against the amount that the Company is obligated to
pay Employee during such period pursuant to this Section 9(b). The Employee shall be under no
obligation to obtain such other employment or work, but if the Employee shall, the Employee shall
promptly give written notice to the Company of the salary and fringe benefits provided to the
Employee in connection with such other employment or work, in order that the amount of such credit
may be determined.

     (c) Termination by the Employee Without Cause. Notwithstanding the provisions of
Section 1, the Employee may resign from the Company at any time upon ninety (90) days prior
written notice to the Company. In the event of resignation by the Employee under this Section
9(c), the Board in its sole discretion may elect to waive the period of notice, or any portion
thereof, and, in such event, the Company will pay the Employee’s salary for the notice period (or
for any remaining portion of the period) provided the Employee continues to be employed during
that period. From and after the effective date of such termination by the Employee of Employee’s
employment under this Agreement, the Company shall have no further liability to the Employee for
salary or other compensation, except for any unreimbursed expenses payable pursuant to Section 4
above that were properly incurred prior to the Employee’s termination of employment, to the extent
such expenses would have been reimbursable pursuant to Section 4 above, and as provided pursuant
to the terms of any compensation or benefit plan of the Company in which the Employee is a
participant.

     (d) Termination upon Disability of Employee. The Company may terminate this
Agreement, and thereby terminate Employee’s employment, upon the Disability (as defined below) of
the Employee, in which event the Employee shall be entitled to receive, in full satisfaction of
all obligations due to the Employee by the Company under this Agreement, (i) the Employee’s Base
Salary then in effect while such Disability continues until the date upon which any disability
benefits pursuant to the disability insurance policy provided for in Section 3(e)(ii) or any
Additional Supplemental Benefits provided for in Section 3(e)(ii) commence (but in no event more
than two (2) months); and (ii) any properly incurred unreimbursed expenses incurred prior to the
Employee’s termination of employment, to the extent such expenses would have been reimbursable
pursuant to Section 4 above. For purposes of this Section 9(d), from and after January 1, 2005,
the Employee will be considered to have a “Disability” only if the Employee meets one of the
following requirements: (A) the Employee is unable to engage in any substantial gainful activity
by reason of any medically determinable physical or mental impairment that can be expected to
result in death or can be expected to last for a continuous period of not less than 12 months; or
(B) the Employee is, by reason of any medically determinable physical or mental impairment that
can be expected to result in death or can be expected to last for a continuous period of not less
than 12 months, receiving income replacement benefits for a period of not less than three months
under an accident and health plan covering employees of the Company.

8

 

     (e) Termination upon Death of Employee. This Agreement shall terminate upon the
death of the Employee, in which event the Employee’s estate, legal representatives or Designee
shall be entitled to receive, in full satisfaction of all obligations due to the Employee by the
Company hereunder, (i) the Employee’s Base Salary through the last day of the month of death; (ii)
the proceeds of the insurance policy or policies maintained on the Employee’s life, pursuant to
Section 3(e) hereof; and (iii) any unreimbursed expenses payable pursuant to Section 4 above that
were properly incurred prior to the Employee’s termination of employment, to the extent such
expenses would have been reimbursable pursuant to Section 4 above.

     (f) Termination By Employee Following Change of Control. Notwithstanding Section
9(c) above, in the event that Employee experiences a Significant Adverse Action (as hereafter
defined) at any time within twelve months following a Change of Control (as hereinafter defined),
and Employee notifies the Company in writing within 30 days of the date on which the Significant
Adverse Action first occurred, and the Company fails to cure the Significant Adverse Action within
30 days of receipt of such notice, then the Employee may terminate the Employee’s employment on
or within 15 days after the thirtieth day of the Company’s failure to cure the Significant Adverse
Action of which the Employee gave such written notice. In the event Employee terminates the
Employee’s employment with the Company under the conditions described in this Section 9(f), and
the conditions of Section 9(h) are met, such termination shall be treated as a termination
pursuant to this Section 9(f) rather than Section 9(c), and:

          (i) the Company shall pay the Employee (A) a payment (“the Separation Payment”), in a single
lump sum on or before the sixtieth day next following the date of Employee’s “separation from
service” (as defined in Section 9(h) below), equal to the lesser of: (I) the Severance Limit, or
(II) the greater of either: (x) two times Employee’s Base Salary at the rate then in effect; or
(y) Employee’s Base Salary at the rate then in effect through the Expiration Date; and, if
Employee’s Severance Compensation is not fully paid out pursuant to clause (A), then (B), as a
separate payment from the Separation Payment, payment, in the form of salary continuation,
beginning on the first regular payroll date next following the first day that is six months after
the date of Employee’s separation from service, of the greater of either: (x) two times Employee’s
Base Salary at the rate then in effect, minus the amount paid pursuant to clause (A) above; or (y)
Employee’s Base Salary at the rate then in effect through the Expiration Date minus the amount
paid pursuant to clause (A) above.

          (ii) The Employee shall also be paid for any unreimbursed expenses payable pursuant to
Section 4 above that were properly incurred prior to the Employee’s termination of employment, to
the extent such expenses would have been reimbursable pursuant to Section 4 above.

          (iii) For purposes of this Agreement, a “Change of Control” shall mean and include any of the
following:

          (A) a merger or consolidation of the Company with or into any other corporation or other
business entity (except one in which the holders of capital stock of the

9

 

Company immediately prior to such merger or consolidation continue to hold at least a
majority of the outstanding securities having the right to vote in an election of the Board of
Directors (“Voting Stock”) of the surviving corporation);

          (B) a sale, lease, exchange or other transfer (in one transaction or a related series of
transactions) of all or substantially all of the Company’s assets except in a transaction where
the Employee, an Affiliate of the Employee, or an Affiliate of the Company is the transferee. For
purposes of this Agreement, an “Affiliate” shall mean: with respect to the Employee, any other
person that directly or indirectly controls, or is controlled by, or is under common control with
the Employee; and with respect to the Company, any other corporation or business entity that
directly or indirectly controls, or is controlled by, or is under common control with, the
Company;

          (C) the acquisition by any person or any group of persons (other than the Company, any of its
direct or indirect subsidiaries, or any director, trustee, fiduciary or other person or entity
holding securities under any employee benefit plan or trust of the Company or any of its direct or
indirect subsidiaries) acting together in any transaction or related series of transactions, of
such number of shares of the Company’s Voting Stock as causes such person, or group of persons, to
own beneficially, directly or indirectly, as of the time immediately after such transaction or
series of transactions, 50% or more of the combined voting power of the Voting Stock of the
Company other than as a result of an acquisition of securities directly from the Company, or
solely as a result of an acquisition of securities by the Company which by reducing the number of
shares of the Voting Stock outstanding increases the proportionate voting power represented by the
Voting Stock owned by any such person to 50% or more of the combined voting power of such Voting
Stock; and

          (D) a change in the composition of the Company’s Board of Directors following a tender offer
or proxy contest as a result of which persons who, immediately prior to such tender offer or proxy
contest, constituted the Company’s Board of Directors shall cease to constitute at least a
majority of the members of the Board of Directors (other than by their voluntary resignations),
but only in the event that the persons elected to the Board were not supported by the Employee as
a director or shareholder.

          (iv) For purposes of this Agreement, a “Significant Adverse Action” shall mean and include
only any of the following: (A) a material and substantial reduction in the Employee’s duties and
responsibilities; (B) a material reduction in Employee’s Base Salary; or (C) a relocation of
Employee’s worksite to a location more than 50 miles from that immediately before the Change in
Control.

     (g) Termination Upon or Following Expiration of this Agreement. In the event the
Employee’s employment continues through the Expiration Date, and is thereafter terminated by the
Company without Good Cause, then subject to the conditions set forth in Section 9(h), the Employee
shall be entitled to the following benefits:

10

 

          (i) If the termination of Employee’s employment is an “Involuntary Termination” as defined in
Section 9(b)(v), the Company shall pay the Employee (A) a payment (“the Separation Payment”), in a
single lump sum on or before the sixtieth day next following the date of Employee’s “separation
from service” (as defined in Section 9(h)), equal to the lesser of the Severance Limit or one times
the Employee’s Base Salary at the rate then in effect; and, if Employee’s Severance Compensation is
not fully paid out pursuant to clause (A), then (B), as a separate payment from the Separation
Payment, payment in the form of salary continuation, beginning on the first regular payroll date
next following the first day that is six months after the date of Employee’s separation from
service, of one times the Employee’s Base Salary at the rate then in effect, minus the amount paid
pursuant to clause (A) above (“the Remainder Amount”) until the Remainder Amount is fully paid; or

          (ii) If the termination of the Employee’s employment is not an Involuntary Termination, the
Company shall pay the Employee, in the form of salary continuation, beginning on the first regular
payroll date next following the first day that is six months after the date of Employee’s
separation from service, one times the Employee’s Base Salary at the rate then in effect in the
manner provided in Section 9(i); and, in either of the circumstances described in Sections 9(g)(i)
or 9(g)(ii);

          (iii) The Company shall pay the Employee for any unreimbursed expenses payable pursuant to
Section 4 above that were properly incurred prior to the Employee’s termination of employment, to
the extent such expenses would have been reimbursable pursuant to Section 4 above.

          (h) Further Conditions of Severance. From and after January 1, 2005, no compensation shall be
payable under Section 9 of this Agreement as the result of the Employee’s termination of employment
with the Company (“Severance Compensation”) unless such termination constitutes a “separation from
service” (within the meaning of that phrase in Treas. Reg. § 1.409A-1(h)) from the Company and all
persons with whom the Company would be considered a single employer under Section 414(b) of the
Internal Revenue Code of 1986, as amended (“the Code”), and all persons with whom the Company would
be considered a single employer under Code Section 414(c). The receipt by Employee of any payment
of Severance Compensation under this Agreement payable on or after the sixtieth day following the
Employee’s termination of employment shall be conditioned upon all of the following, and any such
payment shall be forfeited if such conditions are not met on or before the due date for such
payment: (i) Employee tendering a resignation for all positions held by Employee as a member of the
Board or of the board of directors of any Affiliate; (ii) Employee’s having been in compliance with
all the material terms of this Agreement; (iii) the execution by Employee, after the date of
Employee’s termination from employment and within 21 days of its first presentation to the Employee
by the Company, of a confidential Separation Agreement and General Release (which will be
substantially in the form attached hereto as Exhibit A); and (iv) the confidential Separation
Agreement and General Release becoming effective in accordance with its terms; provided, however,
that the condition specified in this Section 9(h)(iii) and in Section 9(h)(iv) shall not apply
unless such Separation Agreement and General Release has been provided to the Employee by the
Company after and within 30 days of Employee’s termination of employment.

11

 

     (i) Delay in Commencement of Payments of Severance Compensation. Effective January 1, 2005,
if on the date of the Employee’s separation from service, as defined above, the Employee is a
“specified employee” (as defined below) of the Company or of any person with whom the Company would
be considered a single employer under Section 414(b) of the Code, and all persons with whom the
Company would be considered a single employer under Code Section 414(c), then no amount other than
a Separation Payment shall be paid as Severance Compensation under this Agreement until the first
regular payroll date of the Company that is at least six months after the Employee’s separation
from service, as so defined (the “Specified Employee Payment Date”), whereupon all payments of
Severance Compensation that would have become due prior to the Specified Employee Payment Date but
for the operation of this Section 9(i) shall be paid on the Specified Employee Payment Date. An
amount of Severance Compensation, the payment of which has been delayed under this Section 9(i),
will not be payable on the Specified Employee Payment Date unless the conditions precedent set
forth in Section 9(h) have been satisfied as of the Specified Employee Payment Date. The term
“specified employee” means a “specified employee” as defined in Treas. Reg. § 1.409A-1(i).

     10. Indemnification. To the fullest extent permitted by law and in addition to any
other rights permitted or granted under the Company’s articles of incorporation, by-laws, or any
policy of insurance, or by law, the Company shall indemnify the Employee if the Employee is made a
party, or threatened to be made a party, to any threatened, pending or contemplated action, suit
or proceeding, whether civil, administrative or investigative, by reason of the fact that the
Employee is or was an employee, officer or director of the Company or any subsidiary of the
Company, in which capacity the Employee is or was serving at the Company’s request in accordance
with the terms of this Agreement, against any and all costs, losses, damages, judgments,
liabilities and expenses (including reasonable attorneys’ fees) which may be suffered or incurred
by him in connection with any such action, suit or proceeding; provided, however,
that, there shall be no indemnification in relation to matters as to which the Employee is
adjudged to have been guilty of fraud, bad faith, gross negligence, breach of fiduciary duty or as
a result of the Employee’s material breach of this Agreement; provided, however,
that all of such costs shall be paid by insurance, to the extent such coverage exists.

     11. Entire Agreement; Amendment and Waiver. This Agreement is the entire agreement
between the parties with respect to the subject matter hereof and supersedes any and all prior or
contemporaneous oral and prior written agreements and understandings. There are no oral promises,
conditions, representations, understandings, interpretations or terms of any kind as conditions or
inducements to the execution of this Agreement or in effect among the parties. No custom or trade
usage, nor course of conduct among the parties, shall be relied upon to vary the terms of this
Agreement. This Agreement may not be amended, and no provision of this Agreement shall be waived,
except by writing signed by all the parties to this Agreement, which states that it is intended to
amend or waive a specifically identified provision of this Agreement. Any waiver of any rights or
failure to act in a specific instance shall relate only to such instance and shall not be
construed as an agreement to waive any rights or failure

12

 

to act in any other instance, whether or
not similar. All amendments or waivers on behalf of the Company shall have first been approved by
the non-employee members of the Board.

     12. Severability. Should any provision of this Agreement be unenforceable or
prohibited by any applicable law, this Agreement shall be considered divisible as to such
provision which shall be inoperative, and the remainder of this Agreement shall be valid and
binding as though such provision were not included in this Agreement.

     13. Counterparts. This Agreement may be executed in two or more counterparts, each
of which shall be deemed to be an original. It shall not be necessary when making proof of this
Agreement to account for more than one counterpart.

     14. Headings. All headings in this Agreement are for convenience only
and shall not
affect the meaning of any provision in this Agreement.

     15. Successors and Assigns. This Agreement shall inure to the benefit of, and be
binding upon, the Company and any corporation with which the Company merges or consolidates or to
which the Company sells all or substantially all of its assets, and upon the Employee and the
Employee’s executors, administrators, heirs and legal representatives. This Agreement may not be
assigned by the Employee, and from and after January 1, 2005, the Employee may not assign, pledge,
hypothecate, transfer, give as collateral or encumber any right to payments of any Severance
Compensation hereunder, and any attempt to do so shall be wholly void.

     16. Governing Law and Venue. This Agreement shall be construed and enforced in
accordance with the laws of the State of New Jersey, without reference to the conflict of laws
principles thereof. To the extent that either party is permitted to file any action in court that
involves any aspect of this Agreement, or arises out of, or is related to or connected with
Employee’s employment, compensation or benefits, or the termination thereof, the parties agree
that such action must be brought in either federal court in the State of New Jersey, or in the
Superior Court of New Jersey, Middlesex County, and the parties irrevocably consent to
jurisdiction and venue in such courts.

     17. Compliance with Section 409A. Notwithstanding anything herein to the contrary,
(i) if at the time of Employee’s termination of employment with the Company Employee is a
“specified employee” as defined in Section 409A of the Code, and the deferral of the commencement
of any payments or benefits otherwise payable hereunder as a result of such termination of
employment is necessary in order to prevent the imposition of any accelerated or additional tax
under Section 409A of the Code, then the Company will defer the commencement of the payment of any
such payments or benefits hereunder (without any reduction in such payments or benefits ultimately
paid or provided to Employee) until the date that is six months following Employee’s termination
of employment with the Company (or the earliest date as is permitted under Section 409A of the
Code) and (ii) if any other payments of money or other benefits
due to Employee hereunder could
cause the application of an accelerated or additional tax under Section 409A of the Code, such
payments or other benefits

13

 

shall be deferred if deferral will make such payment or other benefits
compliant under Section 409A of the Code, or otherwise such payment or other benefits shall be
restructured, to the
extent possible, in a manner, determined by the Board, that does not cause such an
accelerated or additional tax or result in an additional cost to the Company. The Company shall
consult with Employee in good faith regarding the implementation of the provisions of this Section
17; provided that neither the Company nor any of its employees or representatives shall have any
liability to Employee with respect thereto.

     18. Notices. All notices under this Agreement shall be in writing and shall be sent
to the parties at the following addresses:

	 	 	 	 	 
	If to the Employee, to:	 	John A. Burchett
	 	 	896 Highland Avenue
	 	 	Westfield, New Jersey 07090
	 
	 	 	 	 
	If to the Company, to:	 	Hanover Capital Mortgage Holdings, Inc.
	 	 	200 Metroplex Drive, Suite 100
	 	 	Edison, New Jersey 08817
	 
	 	 	 	 
	 

	 	Attn:
	 	Chairman of Compensation Committee of the Board of Directors

All notices shall be delivered in person or given by registered or certified mail postage prepaid,
and shall be deemed to have been given when delivered in person or deposited in the United States
mail. Either party may designate any other address to which notice shall be given, by giving
written notice to the other of such change of address in the manner herein provided.

{Signatures appear on next page}

14

 

IN WITNESS WHEREOF, the Employee has executed this Agreement and the Company has caused this
Agreement to be executed by a duly authorized officer as of the 30th day of September, 2008.

	 	 	 	 	 	 	 	 	 
	 	 	COMPANY:	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	HANOVER CAPITAL MORTGAGE HOLDINGS, INC.	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	/s/ Suzette Berrios 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	Suzette Berrios	 	 
	 

	 	 	 	Title:
	 	General Counsel	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	EMPLOYEE:	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	          /s/
John A. Burchett	 	 
	 	 	 	 	 
	 	 	          John A. Burchett	 	 

 

 

EXHIBIT A

Separation Agreement and General Release

By mutual agreement John A. Burchett (“Employee”) and Hanover Capital Mortgage Holdings, Inc., or
any successor thereto (“Company”) (collectively the “Parties”) have agreed to enter into this
Separation Agreement and General Release (“General Release”) in connection with Employee’s Amended
and Second Restated Employment Agreement effective September [           ], 2008 (the “Employment Agreement”)
and the receipt by Employee of any severance payments after Employee’s termination of employment.

	1.	 	Employee and the Company have entered into this General Release as a way of amicably settling
any potential dispute that has developed or may in the future develop concerning Employee’s
employment with the Company, Employee’s termination therefrom or from any corporation or other
business entity that directly or indirectly controls, or is controlled by, or is under common
control with, the Company (“Affiliate”), and any claim that the Company or any Affiliate has
acted unlawfully, fraudulently, negligently, recklessly, maliciously or breached the terms of
any contract, including but not limited to the Employment Agreement, or any other promise,
obligation, duty, policy, practice, law or regulation. The execution date of this General
Release shall be after Employee’s termination of employment and prior to Employee’s receipt of
any severance payments from the Company.
	 
	2.	 	In consideration for the Company entering into the Employment Agreement and for the severance
payments which Employee shall receive following Employee’s termination of employment and
execution of this General Release, Employee on behalf of Employee, Employee’s heirs and
assignees, hereby irrevocably and unconditionally releases and forever discharges,
individually and collectively, the Company, its Affiliates, and each of their respective
officers, directors, employees, shareholders, representatives, agents, predecessors,
successors, assigns, and all persons acting by, through or in concert with them (hereinafter
the “Released Parties”) of and from any and all charges, claims, complaints, demands,
liabilities, causes of action, losses, costs and expenses of any kind whatsoever (including
any attorneys’ fees and costs) known or unknown, suspected or unsuspected, that Employee may
now have or has ever had against any of the Released Parties by reason of any act, omission,
transaction, or event occurring up to the date of Employee’s execution of this General
Release. Such release and discharge includes, without limitation, any wrongful, unlawful or
constructive termination or discipline claim, any claims relating to any contracts of
employment, whether express or implied, any claims related to compensation, including short
term, long term, or Employee incentive plans, retention plans, equity or stock option plans,
401(k) plans, and any other compensation or benefit plans in which Employee participated or
was entitled to participate, but this release shall not include or supersede any rights of the
Employee under that certain Indemnity Agreement between the Employee and the Company dated
July 1, 2004. Such release and discharge further includes, without limitation, any claims for
defamation, slander, libel, invasion of privacy, misrepresentation, fraud or breach of any
covenant of good faith and fair dealing, infliction of emotional distress, or any other

 

 

	 	 	claims related to Employee’s employment with the Company or its Affiliate and the
termination thereof. Such release and discharge further applies to, but is not limited to,
any claims based on Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991,
the Age Discrimination in Employment Act of 1967, the Older Workers’ Benefit Protection Act,
the Americans with Disabilities Act of 1990, the Employee Retirement Income Security Act of
1974, Employee Order 11246, the U.S. Constitution, the New Jersey Law Against
Discrimination, the New Jersey Conscientious Employee Protection Act, the New Jersey Family
Leave Act, and any other applicable federal, state or local laws, ordinances and regulations
to the fullest extent permitted by law. Employee has not filed any complaints, claims or
actions against any of the Released Parties with any federal, state or local court or agency
or any arbitration or mediation entity. Employee further agrees not to bring, continue or
maintain any claim or legal or arbitration proceeding against any of the Released Parties
before any court, agency, arbitration or mediation entity or in any other forum by reason of
any of the matters hereby released and discharged. If any court, agency or arbitration or
mediation entity assumes jurisdiction of any complaint or claim against any of the Released
Parties, Employee shall direct the withdrawal or dismissal of the case or claim with
prejudice. However, this General Release shall not be construed to prohibit Employee from
filing a charge or complaint with the Equal Employment Opportunity Commission or state or
local human rights agency charged with enforcing workplace discrimination laws, except that
Employee agrees to waive any right to monetary recovery should any federal, state or local
administrative agency pursue any claims on Employee’s behalf arising out of or relating to
Employee’s employment with and/or separation from employment with the Company.
	 
	3.	 	Employee understands and agrees that Employee is waiving all actions, claims, and grievances,
whether actual or potential, known or unknown, against the Released Parties recited in
Paragraph 2 hereof or otherwise arising from Employee’s employment with the Company or its
Affiliates, the termination thereof or any other conduct occurring on or prior to the date of
Employee’s execution of this General Release. All such claims are forever barred by this
General Release whether they arise in contract, tort or upon a statute, law, regulation, or
order. Employee hereby waives Employee’s rights under any law that limits a general release
to claims that are known to exist at the date of this General Release. The final release of
all claims by Employee against the Released Parties constitutes a material part of the
consideration flowing from Employee under the Employment Agreement, and the Released Parties
as well as their officers, directors, employees, shareholders, representatives, agents,
predecessors, successors, assigns, and all persons acting by, through or in concert with them
are the intended beneficiaries of this consideration. It is expressly understood and agreed
by the parties that this General Release is in full accord, satisfaction and discharge of any
and all doubtful and disputed claims by Employee against any of the Released Parties and that
this General Release has been signed with the express intent of extinguishing all obligations
as herein described. Provided, however, that notwithstanding anything herein to the contrary,
Employee is not releasing or waiving any right to severance pay under the Employment
Agreement.

 

 

	4.	 	Employee agrees that Employee will keep the terms of this General Release completely
confidential and that, except as provided herein, Employee will not hereafter disclose or
publish any information concerning this General Release, any severance payments, or any of the
matters related thereto. Employee represents that Employee has not discussed and shall not
discuss or publish any items related to this General Release, any severance payments or any of
the matters related thereto to any person, group of persons, agency, body, commission, hearing
or news or other media, including the Internet. Employee may make such disclosures as are
finally compelled by laws, provided Employee gives the Company prompt notice of such legal
process in order for the Company to have the opportunity to object to the disclosure of such
information.
	 
	5.	 	Employee agrees reasonably to cooperate with the Company in connection with any dispute,
claim, litigation or investigation by any person or entity against or involving the Company,
any Affiliate, or any of their officers, employees, agents or representatives. As part of
this agreement reasonably to cooperate, Employee agrees to speak and/or meet with the Company
and/or its representatives or counsel at and for reasonable times upon reasonable notice,
without the need for any legal proceeding or compulsory process. Employee also agrees to make
Employee available at and for reasonable times upon reasonable notice for such things as
interviews, depositions and trials. The Company agrees, to the extent permitted by legal and
ethical obligations, to reimburse Employee for reasonable expenses, including but not limited
to legal fees, incurred with respect to such cooperation, and for Employee’s time incurred in
such cooperation during any period for which Employee is not receiving severance payments.
Employee further acknowledges and agrees that the Employee shall continue to be bound by the
terms of Sections 6 and 7 of the Employment Agreement and shall fully comply with the terms of
that agreement.
	 
	6.	 	Employee covenants and agrees that Employee will not make any statement, written or oral, in
disparagement of the Company or any Affiliate, or any of their officers, shareholders,
directors, employees, agents or associates (including, but not limited to, negative references
to each or any of their products, services or corporate policies), to the general public
and/or to the employees, potential employees, customers, potential customers, suppliers,
potential suppliers, business partners, and/or potential business partners of the Company or
any Affiliate.
	 
	7.	 	Employee understands and agrees that Employee:

	 	a.	 	Has carefully read and fully understands all of the provisions of this General
Release;
	 
	 	b.	 	Knowingly and voluntarily agrees to all of the terms set forth in this General
Release;
	 
	 	c.	 	Knowingly and voluntarily intends to be legally bound by the same;

 

 

	 	d.	 	Has been advised to consult with an attorney of Employee’s choice prior to
executing this General Release;
	 
	 	e.	 	Waives any and all rights and claims arising under the Age Discrimination in
Employment Act, and any and all other federal, state, and local laws and regulations;
	 
	 	f.	 	Has been offered at least 21 days from Employee’s receipt of this General
Release to consider its terms;
	 
	 	g.	 	Has a full 7 days following the execution of this General Release to revoke
this General Release and has been and hereby is advised that this General Release shall
not become effective until this revocation period has expired; and
	 
	 	h.	 	Is not waiving rights or claims under the Age Discrimination in Employment Act
that may arise after the date Employee executes this General Release.

	8.	 	In the event of a breach by Employee of Employee’s obligations under the Employment
Agreement, the Company shall have the right to cease the severance payments as a partial
remedy for such breach. The cessation of such payments shall not act as a rescission of this
General Release, and shall not affect the validity of the general release of claims by
Employee, or any other obligation Employee may owe under the Employment Agreement.
	 
	9.	 	This General Release results from negotiations and compromises and shall not be deemed or
construed at any time or for any purpose as an admission of liability by the Released Parties.
	 
	10.	 	This General Release shall be governed by the laws of the State of New Jersey (without giving
effect to its conflict of laws principles) and shall inure to the benefit of the Company and
its successors and assigns. To the extent that either party is permitted to file any action
in court that involves any aspect of this General Release, the parties agree that such action
must be brought in either federal court in the State of New Jersey, or in the Superior Court
of New Jersey, Middlesex County, and the parties irrevocably consent to jurisdiction and venue
in such courts. 
	 
	11.	 	In the event any provision of this General Release is determined by a court of competent
jurisdiction to be unenforceable for any reason, the remaining provisions hereof shall remain
in full force and effect and the unenforceable provisions shall be interpreted and rewritten
to give effect to the Parties’ intentions.

 

 

	12.	 	No modifications of this General Release can be made except in writing signed by Employee and
the Company’s authorized representative.
	 
	13.	 	This General Release shall be interpreted in accordance with the plain meaning of its terms
and not strictly for or against either of the parties hereto.
	 
	14.	 	EMPLOYEE ACKNOWLEDGES AND AGREES THAT EMPLOYEE HAS BEEN ADVISED THAT THIS GENERAL RELEASE IS
A BINDING LEGAL DOCUMENT. EMPLOYEE FURTHER AGREES THAT EMPLOYEE HAS HAD ADEQUATE TIME AND A
REASONABLE OPPORTUNITY TO REVIEW THE PROVISIONS OF THIS GENERAL RELEASE, HAS BEEN ADVISED TO
SEEK LEGAL ADVICE REGARDING ALL OF ITS ASPECTS AND THAT IN EXECUTING THIS GENERAL RELEASE
EMPLOYEE HAS ACTED VOLUNTARILY AND HAS NOT RELIED UPON ANY REPRESENTATION MADE BY ANY OF THE
RELEASED PARTIES REGARDING THIS GENERAL RELEASE’S SUBJECT MATTER AND EFFECT. EMPLOYEE HAS
READ AND FULLY UNDERSTANDS THIS GENERAL RELEASE AND VOLUNTARILY AGREES TO ITS TERMS.

AGREED, UNDERSTOOD, AND INTENDING TO BE LEGALLY BOUND:

	 	 	 	 	 	 	 	 	 	 
	 	EMPLOYEE:	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 
	 	 

	 	 	 	Dated:	 	 	 	 
	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 
	 	ON BEHALF OF THE BOARD OF THE COMPANY:	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 
	 	By:

	 	 	 	Dated:	 	 	 	 
	 	 

	 	 

	 	 	 	 

	 	 
	 	Title:

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