EXHIBIT 10.3
8,500,000 SHARES OF COMMON STOCK
OF
ORIGEN FINANCIAL, INC.
CONCURRENT PRIVATE PLACEMENT AGREEMENT
DATED OCTOBER 8, 2003
THIS AGREEMENT is made as of October 8, 2003, among Origen Financial,
Inc., a Delaware corporation (the "Company"), and those Persons listed on the
Schedule of Purchasers attached hereto as Exhibit A (the Purchasers on the
Schedule of Purchasers are collectively referred to herein as the "Purchasers"
and individually as a "Purchaser").
RECITALS:
WHEREAS, the Company is concurrently offering (the "144A Offering")
shares of its common stock, $.01 par value per share ("Common Stock"), to
certain "qualified institutional buyers" as defined in Rule 144A promulgated
under the Securities Act of 1933 (the "Securities Act" or the "Act"), and
WHEREAS, the Company desires to concurrently sell to the Purchasers and
the Purchasers desire to purchase an aggregate of 8,500,000 shares (the
"Shares") of Common Stock of the Company, for a purchase price per share equal
to the price per share to the investors in the 144A Offering upon the terms and
conditions hereinafter set forth.
NOW, THEREFORE, the parties hereto agree as follows:
1. Purchase and Sale of Shares. Each of the Purchasers hereby severally
agrees to purchase and the Company hereby agrees to issue and sell that number
of Shares set forth opposite such Purchaser's name on the Schedule of Purchasers
attached hereto at a purchase price of $10.00 per share (the "Price Per Share"),
at the Closing as defined in Section 2.C. below.
2. Matters Relating to the Purchased Stock.
A. Sale of Shares. The Shares will be offered and sold
to the Purchasers without registration under the Act, in reliance on an
exemption pursuant to Section 4(2) under the Act and Rule 506 of Regulation D
promulgated thereunder. The Company has prepared an offering memorandum, dated
October 7, 2003 (the "Offering Memorandum"), setting forth information regarding
the Company and the Shares. Any references herein to the Offering Memorandum
shall be deemed to include all documents incorporated by reference therein and
all amendments and supplements thereto. The Purchasers hereby acknowledge and
agree that the Offering Memorandum speaks only as of the date thereof and that
the information contained therein may not be correct as of any time subsequent
to that date.
B. Authorization. On or before the Closing, the Company
will have authorized the issuance and sale to the Purchasers of the Shares.
C. Purchase and Sale. At the Closing, the Company shall
sell to each Purchaser and, subject to the terms and conditions set forth
herein, each Purchaser shall purchase from the Company the number of Shares set
forth opposite such Purchaser's name on the Schedule of Purchasers attached
hereto, at the Price Per Share times the number of Shares so purchased.
D. Closing. The closing of the purchases and sales of
the Shares (the "Closing") will take place at the offices of Jaffe, Raitt, Heuer
& Xxxxx, Professional Corporation, Xxx Xxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx,
Xxxxxxxx, concurrently with the closing of the sale
of shares of Common Stock in the 144A Offering or at such other place or on such
other date as may be mutually agreeable to the Company and the Purchasers. At
the Closing, the Company will deliver to each Purchaser stock certificates
evidencing the Shares to be purchased by such Purchaser, registered in such
Purchaser's or its nominee's name, upon payment of the purchase price thereof by
a cashier's or certified check, or by wire transfer of immediately available
funds to the Company's account per the Company's instructions.
3. Conditions of Each Purchaser's Obligation at the Closing. The
obligation of each Purchaser to purchase and pay for his, her or its respective
portion of the Shares at the Closing is subject to the satisfaction as of the
Closing of the following conditions:
A. The Purchaser shall not have discovered and disclosed
to the Company on the Closing that the Offering Memorandum or any amendment or
supplement thereto contains an untrue statement of a fact that, in the opinion
of its counsel, is material or omits to state a fact that and, in the opinion of
such counsel, is material and is required to be stated therein or is necessary
to make the statements therein not misleading.
B. All corporate proceedings and other legal matters
incident to the authorization, form and validity of this Agreement, the Shares,
the Registration Agreement (as defined below) and the Offering Memorandum, and
all other legal matters relating to this Agreement and the transactions
contemplated hereby shall be reasonably satisfactory in all material respects to
counsel for the Purchaser, and the Company shall have furnished to such counsel
all documents and information that they may reasonably request to enable them to
pass upon such matters.
C. Neither the Company nor any of its subsidiaries shall
have sustained, since the date of the latest audited financial statements
included in the Offering Memorandum, any material loss or interference with its
business from fire, explosion, flood or other calamity, whether or not covered
by insurance, or from any labor dispute or court or governmental action, order
or decree, otherwise than as set forth or contemplated in the Offering
Memorandum; and, since such date, there shall not have been any change in the
stockholders' equity or in the long-term debt of the Company or any of its
subsidiaries (except for changes that are not material, either individually or
in the aggregate, under the Credit Agreement between Bank One, N.A., and Origen
Financial L.L.C., dated July 25, 2002, as amended, and the Second Amended and
Restated Subordinated Loan Agreement, dated December 4, 2002, by and between
Origen Financial L.L.C., and Sun Communities Operating Limited Partnership, as
amended by the First Amendment to Second Amended and Restated Subordinated Loan
Agreement, dated December 30, 2002, by and between Origen Financial L.L.C., and
Sun Home Services (the "Credit Agreements"), or material adverse change, in or
affecting the management, condition, financial or otherwise, stockholders'
equity, results of operations, business or prospects of the Company and its
subsidiaries, taken as a whole or any development involving a prospective
adverse change that is, in the judgment of the Purchaser, sufficiently material
and adverse as to make it impracticable or inadvisable to proceed with the
offering and delivery of the Shares being delivered on the Closing on the terms
and in the manner contemplated hereby.
D. The Company shall have furnished or caused to be
furnished to the Purchaser on the Closing certificates of officers of the
Company satisfactory to the Purchaser as
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to the accuracy of the representations and warranties of the Company herein at
and as of the Closing, as to the performance by the Company of all of its
obligations hereunder to be performed at or prior to the Closing Date and as to
such other matters as the Purchaser may reasonably request.
E. The Company shall have executed and delivered: (i) a
Registration Rights Agreement by and among the Company and each of the
Purchasers in form and substance substantially similar to Exhibit B attached
hereto (the "Registration Agreement"), and (ii) the Contribution Agreement by
and among the Company, SOE, LLC, Xxxxxxxx Holding, LLC, Xxxxxxxx Family, LLC and
Xxxxxxx Financial Services Corporation (the "Contribution Agreement").
F. The Company shall have delivered to each Purchaser
all of the following documents:
(i) an officer's certificate, dated the date of
the Closing, signed by the chairman, chief executive officer, president
or vice president of the Company, stating that the conditions specified
in Sections 3(A) through 3(E), inclusive, have been fully satisfied;
(ii) copies of the resolutions duly adopted by
the Company's board of directors authorizing the execution, delivery,
and performance of this Agreement, the Registration Agreement, and each
of the other agreements contemplated hereby, and the issuance and sale
of the Shares;
(iii) copies of the Company's Certificate of
Incorporation and the Company's bylaws, each as in effect at the
Closing;
(iv) copies of all material third party and
governmental consents, approvals, and filings obtained in connection
with the transactions hereunder (including, without limitation, all
blue sky law filings and waivers of all preemptive rights and rights of
first refusal), if any; and
(v) copies of the Offering Memorandum delivered
by the Company to investors in the 144A Offering.
G. All corporate and other proceedings taken or required
to be taken in connection with the transactions contemplated hereby to be
consummated at or prior to the Closing and all documents incident thereto shall
be satisfactory in form and substance to counsel to the Purchasers.
H. Each Purchaser shall have received from Jaffe, Raitt,
Heuer & Xxxxx, Professional Corporation, counsel for the Company, an executed
copy of its opinion to the several Purchasers, dated the date of the Closing, in
the form attached hereto as Exhibit C.
4. Conditions of the Company's Obligation at the Closing. The
obligation of the Company to deliver the Shares against payment therefore at the
Closing is subject to the satisfaction as of the Closing of the following
conditions:
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A. Each Purchaser shall have furnished to the Company at
the Closing certificates satisfactory to the Company as to the accuracy of the
representations and warranties of such Purchaser herein at and as of the
Closing, as to the performance by such Purchaser of all of its obligations
hereunder to be performed at or prior to the Closing and as to such other
matters as the Company may reasonably request.
B. Each Purchaser shall have executed and delivered: (i)
the Registration Agreement and (ii) a lock-up agreement, in the form attached
hereto as Exhibit D.
C. Each Purchaser shall have delivered the purchase
price for the Shares.
5. Representations and Warranties of the Company. As a material
inducement to the Purchasers to enter into this Agreement and purchase the
Shares, the Company hereby represents and warrants that:
A. No form of general solicitation or general
advertising within the meaning of Regulation D (including, but not limited to,
advertisements, articles, notices or other communications published in any
newspaper, magazine or similar medium or broadcast over television or radio, or
any seminar or meeting whose attendees have been invited by any general
solicitation or general advertising) was used by the Company, any of its agents,
affiliates or representatives or any other person acting on its behalf in
connection with the offer and sale of the Shares.
B. No form of general solicitation or general
advertising was used by the Company, any of its agents, affiliates or
representatives or any other person acting on its behalf with respect to Shares
sold outside the United States to non-U.S. persons (as defined in Rule 902 under
the Act), by means of any directed selling efforts within the meaning of Rule
902 under the Act, and the Company, any affiliate of the Company and any person
acting on its or their behalf has complied with and will implement the "offering
restrictions" required by Rule 902.
C. Set forth on Schedule 6(C) hereto is a list of each
employee pension or benefit plan with respect to which the Company or any person
considered an affiliate of the Company (within the meaning of Section 407(d)(7)
of the Employee Retirement Income Security Act of 1974, as amended, including
the regulations and published interpretations thereunder ("ERISA")) is a party
in interest or disqualified person.
D. The Company is an "operating company" as defined in
the "plan assets" regulation (29 C.F.R. Section 2510.3-101) promulgated by the
U.S. Department of Labor under ERISA.
E. The Company does not provide services to any (i)
"employee benefit plan" (as defined in Section 3(3) of ERISA) that is subject to
the provisions of Title I of ERISA, (ii) plan described in Section 4975(e)(1) of
the Internal Revenue Code of 1986, as amended, including the regulations and
published interpretations thereunder (the "Code"), or (iii) entity whose
underlying assets include "plan assets" by reason of an employee benefit plan's
or other plan's investment in such entity, including entities such as collective
investment funds and insurance company separate accounts whose underlying assets
include assets of such plans.
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F. The Company and each of its subsidiaries is in
compliance in all material respects with all presently applicable provisions of
ERISA; no "reportable event" (as defined in ERISA) has occurred with respect to
any "pension plan" (as defined in ERISA) for which the Company would have any
liability; the Company and each of its subsidiaries has not incurred and does
not expect to incur liability under (i) Title IV of ERISA with respect to
termination of, or withdrawal from, any "pension plan" or (ii) Sections 412 or
4971 of the Code; and each "pension plan" for which the Company or any of its
subsidiaries would have any liability that is intended to be qualified under
Section 401(a) of the Code is so qualified in all material respects and nothing
has occurred, whether by action or by failure to act, which would cause the loss
of such qualification.
G. No order or decree preventing the use of the Offering
Memorandum, or any order asserting that the transactions contemplated by this
Agreement are subject to the registration requirements of the Act has been
issued and no proceeding for that purpose has commenced or is pending, or to the
knowledge of the Company, is contemplated.
H. The Offering Memorandum as of the Closing, will not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements made
therein, in light of the circumstances under which they were made, not
misleading, except that this representation and warranty does not apply to
statements in or omissions from the Offering Memorandum made in reliance upon
and in conformity with information relating to a Purchaser furnished to the
Company in writing by or on behalf of such Purchaser expressly for use therein.
I. The market-related and customer-related data and
estimates in the Offering Memorandum are based on or derived from sources that
the Company believes to be reliable and accurate.
J. The Company and each of its subsidiaries have been
duly incorporated or formed and are validly existing as corporations or limited
liability companies in good standing under the laws of their respective
jurisdictions of incorporation or formation, are duly qualified to do business
and are in good standing as foreign corporations or limited liability companies
in each jurisdiction in which their respective ownership or lease of property or
the conduct of their respective businesses requires such qualification (except
such failures to qualify as are not, either individually or in the aggregate,
material to the Company and its subsidiaries taken as a whole), and have all
power and authority necessary to own or hold their respective properties and to
conduct the businesses in which they are engaged; and none of the subsidiaries
of the Company (other than Origen Financial L.L.C.) is a "significant
subsidiary," as such term is defined in Rule 405 of the rules and regulations
promulgated under the Act (the "Rules and Regulations").
K. The Company has an authorized capitalization as set
forth in the Offering Memorandum, and all of the issued shares of capital stock
of the Company have been duly authorized and validly issued and are fully paid
and non-assessable; and all of the issued equity securities of each subsidiary
of the Company have been duly and validly authorized and issued and are fully
paid and non-assessable and except as set forth in the Offering Memorandum are
owned directly or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims.
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L. The Company has all requisite corporate power and
authority to issue and sell the Shares. The Shares have been duly authorized by
the Company and, upon issuance thereof, will be validly issued, fully paid and
non-assessable.
M. The Shares will conform to the description thereof in
the Offering Memorandum.
N. The Company has all requisite corporate power and
authority to enter into the Registration Agreement. The Registration Agreement
has been duly authorized by the Company and, when executed and delivered by the
Company in accordance with the terms hereof and thereof, will be validly
executed and delivered and will be the legally valid and binding obligation of
the Company in accordance with the terms thereof, enforceable against the
Company in accordance with its terms, except as such enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium and other similar
laws relating to or affecting creditor's rights generally, or by general
equitable principles.
O. The Registration Agreement will conform to the
description thereof in the Offering Memorandum.
P. The Company has all requisite corporate power and
authority to enter into this Agreement. This Agreement has been duly authorized,
executed and delivered by the Company.
Q. The issue and sale of the Shares and the compliance
by the Company with all of the provisions of the Registration Agreement and this
Agreement and the consummation of the transactions contemplated hereby and
thereby (i) will not conflict with or result in a breach or violation of any of
the terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement, lease or other agreement or instrument
to which the Company or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries is bound or to which any of the property or
assets of the Company or any of its subsidiaries is subject, (ii) will not
result in any violation of the provisions of the charter or by-laws of the
Company or any of its subsidiary's formation documents or (iii) will not violate
any statute or any order, rule or regulation of any court or governmental agency
or body having jurisdiction over the Company or any of its subsidiaries or any
of their properties or assets; and no consent, approval, authorization or order
of, or filing, registration or qualification with any such court or governmental
agency or body is required for the issue and sale of the Shares or the
consummation by the Company of the transactions contemplated by this Agreement
or the Registration Agreement, except for the filing of a registration statement
by the Company with the Securities and Exchange Commission (the "Commission")
pursuant to the Act as required by the Registration Agreement and such consents,
approvals, authorizations, orders, filings, registrations or qualifications as
may be required under state securities or Blue Sky laws in connection with the
purchase and distribution of the Shares by the Company and the Purchasers.
R. Other than the Registration Agreement, there are no
contracts, agreements or understandings between the Company and any person
granting such person the right to require the Company to file a registration
statement under the Act with respect to any securities of the Company owned or
to be owned by such person or to require the Company to include such
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securities in the securities registered pursuant to the Registration Agreement
or in any securities being registered pursuant to any other registration
statement filed by the Company under the Act.
S. Except as described in the Offering Memorandum, from
the date of its incorporation, none of the Company or any other person acting on
behalf of the Company has offered or sold to any person any Shares, or any
securities of the same or a similar class as the Shares, other than Shares
offered or sold to the Purchaser, hereunder and the Shares sold pursuant to that
certain Purchase Agreement between the Company and Xxxxxx Brothers Inc., dated
October 8, 2003.
T. Neither the Company nor any of its subsidiaries has
sustained, since the date of the latest audited financial statements included in
the Offering Memorandum, any material loss or interference with its business
from fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action, order or
decree, otherwise than as set forth or contemplated in the Offering Memorandum;
and, since such date, there has not been any change in the stockholders' equity
or in the long-term debt of the Company or any of its subsidiaries (except for
changes that are not material, either individually or in the aggregate, under
the Credit Agreements or any material adverse change, or any development
involving a prospective material adverse change, in or affecting the management,
condition, financial or otherwise, stockholders' equity, results of operations,
business or prospects of the Company and its subsidiaries, taken as a whole (a
"Material Adverse Effect") otherwise than as set forth or contemplated in the
Offering Memorandum.
U. The financial statements (including the related notes
and supporting schedules) included in the Offering Memorandum present fairly the
financial condition and results of operations of the entities purported to be
shown thereby, at the dates and for the periods indicated (except, with respect
to the unaudited financial statements, for certain normal recurring adjustments)
and have been prepared in conformity with generally accepted accounting
principles applied on a consistent basis throughout the periods.
V. Xxxxx Xxxxxxxx LLP, who have certified certain
financial statements of the Company, whose report appears in the Offering
Memorandum are independent public accountants as required by the Act and the
Rules and Regulations during the periods covered by the financial statements on
which they reported.
W. None of the Company or any of its subsidiaries owns
any real property. The Company and each of its subsidiaries has good and
marketable title to all personal property owned by them, free and clear of all
liens, encumbrances and defects except such as are described in the Offering
Memorandum and such as do not materially affect the value of the property of the
Company and its subsidiaries taken as a whole and do not materially interfere
with the use made and proposed to be made of such property by the Company or any
of its subsidiaries; and all real property and buildings held under lease by the
Company or any of its subsidiaries are held by them under valid, subsisting and
enforceable leases, with such exceptions as are not material and do not
interfere with the use made and proposed to be made of such property and
buildings by the Company or any of its subsidiaries.
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X. The Company and each of its subsidiaries carry, or
are covered by, insurance in such amounts and covering such risks as is adequate
for the conduct of their respective businesses and the value of their respective
properties and as is customary for companies engaged in similar businesses in
similar industries.
Y. Except as described in the Offering Memorandum, the
Company and each of its subsidiaries own or possess adequate rights to use all
material patents, trademarks, service marks, trade names, copyrights,
applications and/or registrations for any of the foregoing, and trade secrets
(collectively, "Intellectual Property Rights") and licenses to Intellectual
Property Rights necessary for the conduct of their respective businesses. Except
as described in the Offering Memorandum, the conduct of the respective
businesses of the Company and each of its subsidiaries do not and will not
infringe on or conflict with, and the Company and each of its subsidiaries have
not received any notice of any claim of infringement of or conflict with, any
Intellectual Property Rights of others. There are no pending, or, to the
knowledge of the Company, threatened claims against any of the Company or its
subsidiaries alleging that any of the intellectual property rights used or held
for use by the Company or its subsidiaries (collectively, the "Company
Intellectual Property Rights") or the operation of the business, infringes or
conflicts with the rights of others under any intellectual property rights
("Third Party Rights"). No current or former employee or consultant of the
Company or any of its subsidiaries owns any rights in or to any of the Company
Intellectual Property Rights. The Company and each of its subsidiaries has taken
all reasonable security measures to protect the secrecy, confidentiality and
value of all trade secrets owned by the Company or the respective subsidiary or
used or held for use by the Company or the subsidiary in the respective
business.
Z. Except as described in the Offering Memorandum, there
are no legal or governmental proceedings pending to which the Company or any of
its subsidiaries is a party or of which any property or assets of the Company or
any of its subsidiaries is the subject that, if determined adversely to the
Company or any of its subsidiaries, could have a Material Adverse Effect, and to
the best of the Company's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others.
AA. Except as set forth on Schedule 5(AA), there are no
contracts or other documents that would be required to be filed as exhibits to a
Company registration statement pursuant to Item 601(10) of Regulation S-K that
have not been described in the Offering Memorandum.
BB. No relationship, direct or indirect, that would be
required to be described in a Company registration statement pursuant to Item
404 of Regulation S-K, exists between or among the Company or any of its
subsidiaries on the one hand, and the directors, officers, stockholders,
customers or suppliers of the Company or any of its subsidiaries on the other
hand, that has not been described in the Offering Memorandum.
CC. No labor disturbance by the employees of the Company
or any of its subsidiaries exists or, to the knowledge of the Company or any of
its subsidiaries, is imminent that could be expected to have a Material Adverse
Effect.
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DD. The Company and each of its subsidiaries has filed
all federal, state and local income and franchise tax returns required to be
filed through the date hereof and has paid all taxes due thereon, and no tax
deficiency has been determined adversely to the Company or any of its
subsidiaries that has had (nor does the Company have any knowledge of any tax
deficiency that, if determined adversely to the Company or any of its
subsidiaries, might have) a Material Adverse Effect.
EE. Since the date as of which information is given in
the Offering Memorandum through the date hereof, and except as may otherwise be
disclosed in the Offering Memorandum, neither the Company nor any of its
subsidiaries has (i) issued or granted any securities, (ii) incurred any
liability or obligation, direct or contingent, other than liabilities and
obligations that were incurred in the ordinary course of business, (iii) entered
into any transaction not in the ordinary course of business or (iv) declared or
paid any dividend on its capital stock.
FF. The Company (i) makes and keeps accurate books and
records and (ii) maintains internal accounting controls that provide reasonable
assurance that (A) transactions are executed in accordance with management's
authorization, (B) transactions are recorded as necessary to permit preparation
of its financial statements and to maintain accountability for its assets, (C)
access to its assets is permitted only in accordance with management's
authorization and (D) the reported accountability for its assets is compared
with existing assets at reasonable intervals.
GG. Except as set forth on Schedule 5(GG), neither the
Company nor any of its subsidiaries (i) is in violation of its charter or
by-laws or other formation documents, (ii) is in default in any material
respect, and no event has occurred that, with notice or lapse of time or both,
would constitute such a default, in the due performance or observance of any
term, covenant, condition or other obligation contained in any material
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which it is a party or by which it is bound or to which any of its
properties or assets is subject, (iii) is in violation in any material respect
of any law, ordinance, governmental rule, regulation or court decree to which it
or its property or assets may be subject or has failed to obtain or maintain any
material license, permit, certificate, franchise or other governmental
authorization or permit necessary to the ownership of its property or to the
conduct of its business or (iv) violates, in any material respect, any law,
ordinance, governmental rule, regulation or court decree to which it is subject
in the origination, purchase or servicing of consumer obligations.
HH. Neither the Company nor any of its subsidiaries, nor
any director, officer, agent, employee or other person associated with or acting
on behalf of the Company or any of its subsidiaries, has used any corporate
funds for any unlawful contribution, gift, entertainment or other unlawful
expense relating to political activity; made any direct or indirect unlawful
payment to any foreign or domestic government official or employee from
corporate funds; violated or is in violation of any provision of the Foreign
Corrupt Practices Act of 1977; or made any bribe, rebate, payoff, influence
payment, kickback or other unlawful payment.
II. Except for such matters as would not, individually or
in the aggregate, either result in a Material Adverse Effect or require
disclosure in the Offering Memorandum, the
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Company and any of its subsidiaries (or, to the knowledge of the Company or any
of its subsidiaries or any of their respective predecessors in interest) (i) are
conducting and have conducted their businesses, operations and facilities in
compliance with Environmental Laws (as defined below); (ii) possess, and are in
compliance with, any and all permits, licenses or registrations required under
Environmental Laws ("Environmental Permits"); (iii) will not require material
expenditures to maintain such compliance with Environmental Laws or their
Environmental Permits or to remediate, clean up, xxxxx or remove any Hazardous
Substance (as defined below); and (iv) are not subject to any pending or, to the
best knowledge of the Company or any of its subsidiaries, threatened claim or
other legal proceeding under any Environmental Laws against the Company or its
subsidiaries, and have not been named as a "potentially responsible party" under
or pursuant to any Environmental Laws. As used in this paragraph, "Environmental
Laws" means any and all applicable federal, state, local, and foreign laws,
ordinances, regulations and common law, or any administrative or judicial order,
consent, decree or judgment thereof, relating to pollution or the protection of
human health or the environment, including, without limitation, those related to
(A) emissions, discharges, releases or threatened releases of, or exposure to,
Hazardous Substances, (B) the generation, manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of Hazardous
Substances, or (C) the investigation, remediation or cleanup of any Hazardous
Substances. As used in this paragraph, "Hazardous Substances" means pollutants,
contaminants or hazardous, dangerous, toxic, biohazardous or infectious
substances, materials or wastes, or any other chemical substance regulated under
Environmental Laws.
JJ. None of the transactions contemplated by this
Agreement (including, without limitation, the use of the proceeds from the sale
of the Shares), will violate or result in a violation of Section 7 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), or any
regulation promulgated thereunder, including, without limitation, Regulations T,
U and X of the Board of Governors of the Federal Reserve System.
KK. The statements set forth in the Offering Memorandum
insofar as they purport to describe the provisions of the laws and documents
referred to therein, are accurate in all material respects.
LL. The minute books and records of the Company and its
subsidiaries relating to proceedings of their respective shareholders, boards of
directors, committees of their respective boards of directors, members, managers
and committees of their respective managers made available to the Purchaser, are
their original minute books and records or are true, correct and complete copies
thereof, with respect to all proceedings of said shareholders, boards of
directors, members, managers and committees since December 18, 2001 through the
date hereof. In the event that definitive minutes have not been prepared with
respect to any proceedings of such shareholders, boards of directors, members,
managers or committees, the Company has provided the Purchaser with originals or
true, correct and complete copies of draft minutes or written agendas relating
thereto, which drafts and agendas, if any, reflect all events that occurred in
connection with such proceedings.
MM. All instruments, records, agreements and other
documents requested by the Purchasers, have been provided to, or made available
for inspection by, the Purchasers, and
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such documents are complete and genuine and include all material collateral and
supplemental thereto.
NN. The Company is not aware of (i) any significant
deficiency in the design or operation of internal controls which could adversely
affect the Company's ability to record, process, summarize and report financial
data or any material weaknesses in internal controls; or (ii) any fraud, whether
or not material, that involves management or other employees who have a
significant role in the Company's internal controls.
OO. There have been no significant changes in internal
controls or in other factors that could significantly affect internal controls,
including any corrective actions with regard to significant deficiencies and
material weaknesses.
PP. The Company will be organized in conformity with the
requirements for qualification as a real estate investment trust ("REIT") under
the Code and its proposed method of operation, as described in the Offering
Memorandum, will enable it to meet the requirements for taxation as a REIT under
the Code, commencing with the Company's taxable year ending December 31, 2003.
QQ. Neither the Company nor any of its subsidiaries is
now, or, after receipt of payment for the Shares, use of the proceeds of the
offering as described in the Offering Memorandum and consummation of all related
transactions will be an "investment company," or an "affiliated person" of, or
"promoter" or "principal underwriter" for, an "investment company," as such
terms are defined in the Investment Company Act of 1940, as amended (the
"Investment Company Act"), or an "investment advisor,' as such term is defined
in the Investment Advisors Act of 1940, as amended, or a "broker" within the
meaning of Section 3(a)(4) of the Exchange Act or a "dealer" within the meaning
of Section 3(a)(5) of the Exchange Act or required to be registered pursuant to
Section 15(a) of the Exchange Act.
RR. All of the information supplied by the Company,
whether written or oral (and whether included in the Offering Memorandum or
otherwise), is true and accurate and complete in all material respects. In
addition, except as would not result in a Material Adverse Effect, the Company
has received written permission from each and every entity or person that has
any right to authorize or grant permission for the use of the information.
SS. The consummation of the transactions contemplated by
the Offering Memorandum will not result in a conflict of interest by or among
the Company or any of its affiliates which has not been disclosed in the
Offering Memorandum.
TT. Any certificate signed by an officer of the Company
or an officer or manger of any of its subsidiaries and delivered to the
Purchasers or to counsel for the Purchasers shall be deemed to be a
representation and warranty by the Company and its subsidiaries to the
Purchasers as to the matters set forth therein and not representations and
warranties of the officers in their individual capacities.
UU. Except as otherwise disclosed in the Offering
Memorandum, there are no outstanding loans or advances or guarantees of
indebtedness by the Company or any subsidiary
12
to or for the benefit of any of the officers or directors of the Company or any
subsidiary or any of the members of the families of any of them.
VV. The projections set forth in the Offering Memorandum
under the caption Financial Projections represent good faith estimates of the
performance of the Company for the periods stated therein based upon assumptions
which were believed in good faith to be reasonable when made and continue to be
reasonable as of the date hereof.
6. Miscellaneous.
A. Purchasers' Investment Representations. Each
Purchaser hereby represents to the Company the following:
(i) the Purchaser is acquiring the Shares
purchased hereunder or acquired pursuant hereto for its own account
with the present intention of holding such securities for purposes of
investment, has no intention of selling such securities in a public
distribution in violation of the federal securities laws or any
applicable state securities laws, and acknowledges that until such time
as the same is no longer required under the applicable requirements of
the Act, the Shares (and all securities issued in exchange therefore or
in substitution thereof) shall bear the following legend:
"THE SHARES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE UNITED STATES SECURITIES ACT OF 1933 (THE "ACT") AND MAY
NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT
(A)(1) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A
UNDER THE ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (2) IN AN OFFSHORE
TRANSACTION COMPLYING WITH RULE 903 OR RULE 904 OF REGULATION
S UNDER THE ACT, (3) PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE ACT PROVIDED BY RULE 144 THEREUNDER (IF
AVAILABLE), (4) TO AN ACCREDITED INVESTOR IN A TRANSACTION
EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE ACT OR (5)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT
AND (B) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF
THE STATES OF THE UNITED STATES AND IN ANY CASE, TO A
TRANSFEREE THAT WILL NOT, WITHOUT THE ISSUER'S CONSENT AFTER
GIVING EFFECT TO THE TRANSFER, CAUSE AN "INDIVIDUAL" (WITHIN
THE MEANING OF SECTION 542(a)(2), AS MODIFIED BY SECTIONS 544
AND 856(h), OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED)
TO OWN MORE THAN 9.25% OF THE OUTSTANDING SHARES OF COMMON
STOCK OF THE ISSUER. THE HOLDER AGREES NOT TO ENGAGE IN
HEDGING TRANSACTIONS WITH RESPECT
13
TO THE ISSUER'S COMMON STOCK EXCEPT IN COMPLIANCE WITH THE
REQUIREMENTS OF THE ACT."
The Purchaser further acknowledges that upon original issuance thereof,
and until such time as the Shares are no longer subject to the Registration
Agreement (and all securities issued in exchange therefore or in substitution
thereof) shall bear the following legend:
"THE SHARES EVIDENCED HEREBY ARE SUBJECT TO THE PROVISIONS OF
A REGISTRATION RIGHTS AGREEMENT, INCLUDING, WITHOUT
LIMITATION, RESTRICTIONS ON THE TRANSFER OF THE SHARES. A COPY
OF THE REGISTRATION RIGHTS AGREEMENT IS AVAILABLE AT THE
OFFICES OF THE COMPANY."
(ii) the Purchaser has the financial ability to
bear the economic risk of an investment in the Shares, has adequate
means of providing for his, her, or its current needs and personal
contingencies, has no need for liquidity in such investment and could
afford a complete loss of such investment; and
(iii) the Purchaser is an "accredited investor" as
defined in Rule 501(a) of Regulation D of the Securities Act; and
(iv) the Purchaser's overall commitment to
investments which are not readily marketable is not disproportionate to
his, her, or its net worth and his, her, or its investment in the
Company will not cause such overall commitment to become excessive; and
(v) the Purchaser has such knowledge and
experience in financial and business matters that he, she, or it is
capable of evaluating the merits and risks of his, her, or its
investment in the Shares; and
(vi) the Purchaser expressly acknowledges receipt
of the financial information contained in the Offering Memorandum and
acknowledges and agrees that the Purchaser has read and understood the
terms and conditions set forth in the financial information; and
(vii) the Purchaser has been given full
opportunity to ask questions of and to receive answers from
representatives of the Company concerning the terms and conditions of
the investment and the business of the Company and such other
information as he, she, or it desires in order to evaluate an
investment in the Shares, and all such questions have been answered to
the full satisfaction of the Purchaser; and
(viii) the Purchaser understands that the Shares
have not been registered under the Act or the securities laws of any
state, and are being issued in reliance upon specific exemptions from
registration thereunder, and the Purchaser agrees that the Shares may
not be sold, offered for sale, transferred, pledged, hypothecated, or
otherwise disposed of except pursuant to (i) a registration statement
with respect to such securities which is effective under the Act and
under the securities act of any relevant state,
14
(ii) Rule 144 under the Act, or (iii) any other exemption from
registration under the Act and under the securities act of any relevant
state relating to the disposition of securities, provided an opinion of
counsel is furnished, reasonably satisfactory in form and substance to
the Company, that an exemption from the registration requirements of
the Act and such state act is available. The Purchaser understands the
legal consequences of the foregoing to mean that he, she, or it may be
required to bear the economic risk of his, her, or its investment in
the shares of the Shares for an indefinite period or time. The
Purchaser understands that any instruments initially representing the
Shares shall bear legends restricting the transfer thereof. The
Purchaser agrees not to resell or otherwise dispose of all or any
Shares acquired by the Purchaser, except as permitted by law,
including, without limitation, any and all applicable regulations under
the Act and any state law or regulations; and
(ix) the Purchaser understands that no federal or
state agency has made any finding or determination as to the fairness
of an investment in, or any recommendation or endorsement of, the
shares of the Shares; and
(x) either (A) no part of the assets to be used
by the Purchaser to purchase the Shares constitutes assets of any
"employee benefit plan" (as defined in Section 3(3) of ERISA) that is
subject to Title I of ERISA or any "plan" (as defined in Section
4975(e)(1) of the Code) or (B) part or all of the assets to be used by
the Purchaser to purchase the Shares constitute assets of one or more
"employee benefit plans" subject to Title I of ERISA or "plans" subject
to Section 4975 of the Code and the terms and conditions of one or more
statutory or administrative exemptions from the prohibited transaction
rules of ERISA and the Code will be satisfied such that the Purchaser's
acquisition and holding of the Shares does not and will not constitute
a non-exempt prohibited transaction for purposes of ERISA and Section
4975 of the Code; and
(xi) the Shares were not offered or sold to the
Purchaser by any form of general solicitation or advertising, including
but not limited to:
(A) any advertisement, article, notice or other
communication published in any newspaper,
magazine or similar media or broadcast over
television or radio; or
(B) any seminar or meeting whose attendees were
invited by any general solicitation or
general advertising; and
(xii) the Purchaser acknowledges that the Company
and others will rely on the acknowledgements, representations and
warranties contained in this Agreement. The Purchaser agrees to
promptly notify the Company if any of the acknowledgements,
representations and warranties set forth herein are no longer accurate.
7. Expenses. Whether or not the transactions contemplated by this
Agreement are consummated or this Agreement becomes effective or is terminated,
the Company and Origen Financial L.L.C. each, jointly and severally, agrees to
pay all costs, expenses, fees and taxes incident to and in connection with: (i)
the preparation, printing, filing and distribution of
15
Offering Memorandum (including, without limitation, financial statements and
exhibits) and all amendments and supplements thereto (including the fees,
disbursements and expenses of the Company's accountants and counsel incurred in
connection therewith); (ii) the preparation, printing (including, without
limitation, word processing and duplication costs) and delivery of this
Agreement, the Registration Agreement, all Blue Sky memoranda and all other
agreements, memoranda, correspondence and other documents printed and delivered
in connection therewith; (iii) the issuance and delivery by the Company of the
Shares and any taxes payable in connection therewith; (iv) the qualification of
the Shares for offer and sale under the securities or Blue Sky laws of the
several states; (v) the furnishing of such copies of the Offering Memorandum,
and all amendments and supplements thereto; (vi) the preparation of certificates
for the Shares (including, without limitation, printing and engraving thereof);
and (vii) the performance by the Company of its other obligations under this
Agreement.
8. Indemnification.
A. The Company hereby agrees to indemnify and hold
harmless each Purchaser and, where applicable, its managers, directors, officers
and employees and each person, if any, who controls such Purchaser within the
meaning of the Act, from and against any loss, claim, damage or liability, joint
or several, or any action in respect thereof (including, but not limited to, any
loss, claim, damage, liability or action relating to purchases and sales of
Shares), to which the Purchaser, or any such director, officer, employee or
controlling person may become subject, under the Act, the Exchange Act, or other
international, federal or statutory law or regulation, or at common law, or
otherwise, insofar as such loss, claim, damage, liability or action arises out
of, or is based upon, (i) any untrue statement or alleged untrue statement of a
material fact contained in the Offering Memorandum or in any amendment or
supplement thereto, (ii) the omission or alleged omission to state in the
Offering Memorandum, or in any amendment or supplement thereto, any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading, (iii) any inaccuracy in the representations and warranties of the
Company contained in this Agreement; and the Company shall reimburse such
Purchaser and, where applicable, its directors, officers, employees or
controlling persons upon demand for any legal or other expenses incurred by such
Purchaser and its managers, directors, officers, employees or controlling
persons in connection with investigating, defending, settling, compromising or
paying any such loss, claim, damage, liability, expense or action as such
expenses are incurred.
B. Each Purchaser hereby agrees to indemnify and hold
harmless the Company its officers and employees, each of its directors, and each
person, if any, who controls the Company within the meaning of the Act, from and
against any loss, claim, damage or liability, joint or several, or any action in
respect thereof, to which the Company or any such director, officer, employee or
controlling person may become subject, under the Act or otherwise, insofar as
such loss, claim, damage, liability or action arises out of, or is based upon,
any inaccuracy in the representations and warranties of a Purchaser contained in
Section 6 of this Agreement; and a Purchaser shall reimburse the Company and,
where applicable, its directors, officers, employees or controlling persons upon
demand for any legal or other expenses incurred by the Company and its
directors, officers, employees or controlling persons in connection with
investigating, defending, settling, compromising or paying any such loss, claim,
damage, liability, expense or action as such expenses are incurred.
16
C. Promptly after receipt by an indemnified party under
this Section 8 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 8, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however, that
the failure to notify the indemnifying party shall not relieve it from any
liability that it may have under this Section 8 except to the extent it has been
materially prejudiced by such failure and; provided, further, that the failure
to notify the indemnifying party shall not relieve it from any liability that it
may have to an indemnified party otherwise than under this Section 8. If any
such claim or action shall be brought against an indemnified party, and it shall
notify the indemnifying party thereof, the indemnifying party shall be entitled
to participate therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that
each Purchaser shall have the right to employ counsel to represent jointly such
Purchaser and, where applicable, its managers, directors, officers, employees
and controlling persons who may be subject to liability arising out of any claim
in respect of which indemnity may be sought by such Purchaser against the
Company under this Section 8 if such Purchaser is advised by counsel that there
exists one or more legal defenses different than those available to the Company
and in the reasonable judgment of such counsel, it is advisable for such
Purchaser and those managers, directors, officers, employees and controlling
persons to be jointly represented by one separate counsel. No indemnifying party
shall (i) without the prior written consent of the indemnified parties (which
consent shall not be unreasonably withheld), settle or compromise or consent to
the entry of any judgment with respect to any pending or threatened claim,
action, suit or proceeding in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified parties are actual or
potential parties to such claim or action) unless such settlement, compromise or
consent includes an unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or proceeding, or (ii) be
liable for any settlement of any such action effected without its written
consent (which consent shall not be unreasonably withheld), but if settled with
the consent of the indemnifying party or if there be a final judgment of the
plaintiff in any such action, the indemnifying party agrees to indemnify and
hold harmless any indemnified party from and against any loss or liability by
reason of such settlement or judgment.
9. Reimbursement of Purchaser's Expenses. If the Company fails to
tender the Shares for delivery to the Purchasers by reason of any failure,
refusal or inability on the part of the Company to perform any agreement on its
part to be performed, or because any other condition of the obligations
hereunder required to be fulfilled by the Company is not fulfilled, the Company
shall reimburse the Purchasers for all reasonable out-of-pocket expenses
(including fees and disbursements of counsel) incurred by the Purchasers in
connection with this Agreement and the proposed purchase of the Shares, and upon
demand the Company shall pay the full amount thereof to the Purchasers.
17
10. Survival of Representations and Warranties. All
representations and warranties contained herein or made in writing by any party
in connection herewith will survive the execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby and will remain in
full force and effect, regardless of any investigation made by any Purchaser or
on its behalf. Nothing herein shall imply any duty on the Company after the
execution and delivery of this Agreement to update any representations or
warranties made herein.
11. Persons Entitled to Benefit of Agreement. This Agreement shall
inure to the benefit of and be binding upon each Purchaser, the Company, and
their respective successors. This Agreement and the terms and provisions hereof
are for the sole benefit of only those persons, except that the representations,
warranties, indemnities and agreements of the Company contained in this
Agreement shall also be deemed to be for the benefit of the Purchasers and,
where applicable, the managers, directors and officers of such Purchaser and any
person or persons controlling such Purchaser within the meaning of Section 15 of
the Act. Nothing in this Agreement is intended or shall be construed to give any
person, other than the persons referred to in this Section 11, any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision contained herein.
12. Severability. Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision will be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of this Agreement.
13. Counterparts. This Agreement may be executed simultaneously in
two or more counterparts, any one of which need not contain the signatures of
more than one party, but all such counterparts taken together will constitute
one and the same Agreement.
14. Descriptive Headings. The descriptive headings of this
Agreement are inserted for convenience only and do not constitute a part of this
Agreement.
15. GOVERNING LAW. THE CORPORATE LAW OF DELAWARE WILL GOVERN ALL
ISSUES CONCERNING THE RELATIVE RIGHTS OF THE COMPANY AND ITS STOCKHOLDERS. ALL
OTHER QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY AND INTERPRETATION OF THIS
AGREEMENT AND THE EXHIBITS AND SCHEDULES HERETO WILL BE GOVERNED BY THE INTERNAL
LAW, AND NOT THE LAW OF CONFLICTS, OF DELAWARE.
16. Notices. All notices, demand or other communications to be
delivered under or by reason of the provisions of this Agreement shall be in
writing and shall be deemed to have been given when delivered personally to the
recipient; two business days after being deposited in the mail, postage prepaid,
if mailed; when answered back, if telexed; when receipt is acknowledged, if
telecopied; and on the next business day, if timely delivered to an air courier
guaranteeing overnight delivery. Such notices, demand and other communications
will be sent to each Purchaser at the address indicated on the Schedule of
Purchasers and to the Company at the address indicated below:
18
Origen Financial, Inc.
00000 Xxxxxxxx Xxxx, Xxxxx 0000
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: General Counsel
or to such other address or to the attention of such other person as the
recipient party has specified by prior written notice to the sending party.
17. Understanding Among the Purchasers. The determination of each
Purchaser to purchase the Shares purchased pursuant to this Agreement has been
made by such Purchaser independent of any statements or opinions as to the
advisability of such purchase or as to the properties, business, prospects, or
conditions (financial or otherwise) of the Company which may have been made or
given by any other Purchaser or by any agent or employee of any other Purchaser.
[SIGNATURES ARE ON THE ATTACHED PAGES]
19
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date first above written.
ORIGEN FINANCIAL, INC.
By: /s/ Xxxxxx X. Xxxxx
-----------------------------------------
Xxxxxx X. Xxxxx
Its: CEO
SUN OFI, LLC
By: /s/ Xxxx Xxxxxxxx
-----------------------------------------
Xxxx Xxxxxxxx
Its: Manager
XXXXXXXX ORIGEN, LLC
By: /s/ Xxxxxx Xxxxx
-----------------------------------------
Xxxxxx Xxxxx
Its: Manager
XXXXXXXX HOLDING, LLC
By: /s/ Xxxx Xxxxxxx
-----------------------------------------
Xxxx Xxxxxxx
Its: Manager
HERMELIN FAMILY INVESTMENTS LLC
By: /s/ Xxxxx Xxxxxxxx
-----------------------------------------
Xxxxx Xxxxxxxx
Its: Manager
20
/s/ Xxxxxx X. Xxxxx
--------------------------------------------
Xxxxxx X. Xxxxx
/s/ Xxxxxx X. Xxxxxxxx
--------------------------------------------
Xxxxxx X. Xxxxxxxx
/s/ Xxxxx X. Xxxxxx
--------------------------------------------
Xxxxx X. Xxxxxx
/s/ Xxxxxxx X. Xxxxx
--------------------------------------------
Xxxxxxx X. Xxxxx
/s/ Xxxx Xxxxxxx
--------------------------------------------
Xxxx Xxxxxxx
21
