EXHIBIT 1.2
ORIGEN FINANCIAL, INC.
DOCS(R) Financing Program
1,540,000 Shares of Common Stock,
$0.01 par value
SALES AGREEMENT
August 29, 2005
DOCS(R) is a registered service xxxx of Xxxxxxx Xxxxxxx Securities Corporation
THIS SALES AGREEMENT (the "Agreement") dated as of August 29, 2005
between Xxxxxxx Xxxxxxx Securities Corporation, having its principal office at
000 Xxxxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the "Sales Manager")
and Origen Financial, Inc., a corporation organized and existing under the laws
of the State of Delaware (the "Company").
WHEREAS, the Company desires to issue and sell through the Sales Manager
up to 1,540,000 shares (the "Maximum Amount") of its common stock, $0.01 par
value (the "Stock"), on the terms set forth in Article II below. The Maximum
Amount shall be appropriately adjusted for stock splits and reverse splits.
IN CONSIDERATION of the mutual covenants contained in this Agreement, the
Company and the Sales Manager agree as follows:
ARTICLE I.
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY
1.1 For purposes of this Agreement, unless the context requires to the
contrary, the term "Company" shall also include all significant subsidiaries (as
defined by Section 1-02 of Regulation S-X) of the Company. The Company
represents and warrants to, and agrees with, the Sales Manager that:
(a) The Company meets the requirements for use of Form S-3 under the
Securities Act of 1933, as amended (the "Act"), and the rules and regulations
thereunder ("Rules and Regulations"). A registration statement on Form S-3
(Registration No. [No.]) with respect to, among other securities, the Stock,
including a form of prospectus, will be prepared by the Company in conformity
with the requirements of the Act and the Rules and Regulations and will be filed
with the Securities and Exchange Commission (the "Commission"). Such
registration statement and prospectus may have been amended or supplemented
prior to the date hereof. Any such amendment or supplement was so prepared and
filed, and any such amendment or supplement filed after the effective date of
such registration statement and prior to the date hereof has become effective.
No stop order suspending the effectiveness of such registration statement has
been issued, and no proceeding for that purpose has been instituted or, to the
knowledge of the Company, threatened by the Commission. Copies of such
registration statement and prospectus, any such amendment or supplement and all
documents incorporated by reference therein that were filed with the Commission
prior to the date hereof have been delivered to the Sales Manager. Such
registration statement, as it may have heretofore been or may hereafter be
amended, is referred to herein as the "Registration Statement," and the final
form of prospectus included in the Registration Statement for purposes of offers
and sales of the Stock contemplated herein, as amended or supplemented from time
to time, is referred to herein as the "Prospectus." Any reference herein to the
Registration Statement, the Prospectus, or any amendment or supplement thereto
shall be deemed to refer to and include the documents incorporated (or deemed to
be incorporated) by reference therein, and any reference herein to the terms
"amend," "amendment" or "supplement" with respect to the Registration Statement
or
Prospectus shall be deemed to refer to and include the filing after the
execution hereof of any document with the Commission deemed to be incorporated
by reference therein.
(b) Each part of the Registration Statement, when such part became or
becomes effective, and the Prospectus and any amendment or supplement thereto,
on the date of filing thereof with the Commission and at each Settlement Date
(as hereinafter defined), conformed or will conform in all material respects
with the requirements of the Act and the Rules and Regulations; each part of the
Registration Statement, when such part became or becomes effective, did not or
will not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading; and the Prospectus and any amendment or supplement
thereto, on the date of filing thereof with the Commission and at each
Settlement Date, did not or will not include an untrue statement of a material
fact or omit to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading;
except that the foregoing shall not apply to statements in or omissions from any
such document in reliance upon, and in conformity with, written information
furnished to the Company by or on behalf of the Sales Manager, specifically for
use in the Registration Statement, the Prospectus or any amendment or supplement
thereto.
(c) The documents incorporated by reference in the Registration Statement
or the Prospectus, or any amendment or supplement thereto, when they were or are
filed with the Commission under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), conformed or will conform in all material respects with
the requirements of the Act or the Exchange Act, as applicable, and the rules
and regulations of the Commission thereunder.
(d) The financial statements of the Company, together with the related
schedules and notes thereto, set forth or included in the Registration Statement
and Prospectus, fairly present the financial condition of the Company as of the
dates indicated and the results of operations, changes in financial position,
stockholders' equity, and cash flows for the periods therein specified, in
conformity with generally accepted accounting principles consistently applied
throughout the periods involved (except as otherwise stated therein). The
summary and selected financial and statistical data included in the Registration
Statement and the Prospectus present fairly the information shown therein and,
to the extent based upon or derived from the financial statements, have been
compiled on a basis consistent with the financial statements presented therein.
(e) The accountants who certified the financial statements and the
supporting schedules included in the Registration Statement are and, during the
periods covered by their reports, were qualified and independent public
accountants as required by Rule 2-01 of Regulation S-X.
(f) The Company has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Delaware. The
Company is duly qualified and in good standing as a foreign corporation in each
jurisdiction in which the character or location of its assets or properties
(owned, leased or licensed) or the nature of its business makes such
qualification necessary (including every jurisdiction in which it owns or leases
real property), except for such jurisdictions where the failure to so qualify
would not have a Material Adverse
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Effect on the Company. For purposes of this Agreement, "Material Adverse Effect"
means any adverse effect on the business, operations, properties or financial
condition of the Company that is (either alone or together with all other
adverse effects) material to the Company, and any material adverse effect on the
transactions contemplated under this Agreement or any other agreement or
document contemplated hereby or thereby. Each of the Company's significant
subsidiaries is validly existing as a corporation, limited liability company or
partnership, as applicable, in its respective jurisdiction of formation.
Schedule 1.1(f) hereto identifies each of the Company's subsidiaries that is a
significant subsidiary (as defined in Section 1-02 of Regulation S-X) of the
Company. All of the issued and outstanding capital stock, limited liability
company interests or partnership interests, as applicable, of each significant
subsidiary has been duly authorized and validly issued, is fully paid and
nonassessable and (except as otherwise disclosed in the Registration Statement
and the Prospectus) is owned by the Company, directly or indirectly, free and
clear of any security interest, mortgage, pledge, lien, encumbrance, claim or
equity. Except as disclosed in the Registration Statement and the Prospectus,
the Company does not own, lease or license any asset or property or conduct any
business outside the United States of America. The Company has all requisite
corporate power and authority and all necessary authorizations, approvals,
consents, orders, licenses, certificates and permits of and from all
governmental orders or regulatory bodies or any other person or entity, to own,
lease, license and operate its assets and properties and conduct its business as
now being conducted and as described in the Registration Statement and the
Prospectus; except for such authorizations, approvals, consents, orders,
licenses, certificates and permits the absence of which would not have a
Material Adverse Effect; and no such authorization, approval, consent, order,
license, certificate or permit contains a materially burdensome restriction
other than as disclosed in the Registration Statement and the Prospectus.
(g) The Company has good and marketable title to, or leasehold interests
in, all properties and assets (including, without limitation, mortgaged assets)
as described in the Registration Statement and the Prospectus owned by the
Company, free and clear of all liens, charges, encumbrances or restrictions,
except such as are described in the Registration Statement and the Prospectus
and except such as would not have a Material Adverse Effect on the Company. The
Company has such consents, easements, rights-of-way or licenses (collectively,
"rights-of-way") from any person as are necessary to conduct its business in the
manner described in the Registration Statement, except for those which if not
obtained would not, singly or in the aggregate, have a Material Adverse Effect
on the Company, and none of such rights-of-way contains any restriction that is
materially burdensome to the Company.
(h) The debt financing employed by the Company to acquire its portfolio of
mortgage assets is not convertible into shares of common stock of the Company or
other equity interests in the Company.
(i) There is no litigation or governmental or other proceeding or
investigation before any court or before or by any public body or board pending
or, to the knowledge of the Company, threatened against, or involving the
assets, properties or businesses of the Company which would materially adversely
affect the value or the operation of any such assets or otherwise have a
Material Adverse Effect on the Company except as described in the Registration
Statement.
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(j) The Company maintains insurance (issued by insurers of recognized
financial responsibility) of the types and in the amounts generally deemed
adequate for its businesses and, to the knowledge of the Company, consistent
with insurance coverage maintained by similar companies in similar businesses,
including, but not limited to, insurance covering real and personal property
owned or leased by the Company against theft, damage, destruction, acts of
vandalism and all other risks customarily insured against, all of which
insurance is in full force and effect.
(k) Subsequent to the respective dates as of which information is given in
the Registration Statement and the Prospectus, except as described therein, (i)
there has not been any material adverse change in the assets or properties,
business, results of operations, or condition (financial or otherwise) of the
Company, whether or not arising from transactions in the ordinary course of
business; (ii) the Company has not sustained any material loss or interference
with its assets, businesses or properties (whether owned or leased) from fire,
explosion, earthquake, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or any court or legislative or other
governmental action, order or decree; (iii) since the date of the latest balance
sheet, included or incorporated by reference in the Registration Statement and
the Prospectus, except as reflected therein, the Company has not undertaken any
liability or obligation, direct or contingent, except such liabilities or
obligations undertaken in the ordinary course of business; and (iv) there has
not been any transaction that is material to the Company, except transactions in
the ordinary course of business or as otherwise disclosed in the Registration
Statement and the Prospectus.
(l) There is no document or contract of a character required to be
described in the Registration Statement or the Prospectus or to be filed as an
exhibit to the Registration Statement that is not described or filed as
required. Each document, instrument, contract and agreement of the Company
described in the Registration Statement or the Prospectus or incorporated by
reference therein or listed as exhibits to the Registration Statement is in full
force and effect and is valid and enforceable by and against the Company in
accordance with their terms, assuming the due authorization, execution and
delivery thereof by each of the other parties thereto except as otherwise
disclosed in the Registration Statement or Prospectus. The Company is not, nor
to the knowledge of the Company is any other party, in default in the observance
or performance of any term or obligation to be performed by it under any such
agreement, and no event has occurred which with notice or lapse of time or both
would constitute such a default, which default or event would have a Material
Adverse Effect. No default exists, and no event has occurred which with notice
or lapse of time or both would constitute a default, in the due performance and
observance of any term, covenant or condition, by the Company of any other
agreement or instrument to which the Company is a party or by which it or its
properties or business may be bound or affected, which default or event would
have a Material Adverse Effect.
(m) The Company is not in violation of any term or provision of its
charter, by-laws or operating agreement, as applicable. The Company is not in
violation of any franchise, license, permit, judgment, decree, order, statute,
rule or regulation, where the consequences of such violation would have a
Material Adverse Effect.
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(n) Neither the execution, delivery and performance of this Agreement by
the Company nor the consummation of any of the transactions contemplated hereby
(including, without limitation, the issuance and sale by the Company of the
Stock) will give rise to a right to terminate or accelerate the due date of any
payment due under, or conflict with or result in the breach of any term or
provision of, or constitute a default (or an event which with notice or lapse of
time or both would constitute a default) under, or require any consent or waiver
under, or result in the execution or imposition of any lien, charge,
encumbrance, claim, security interest, restriction or defect upon any properties
or assets of the Company pursuant to the terms of, any indenture, mortgage, deed
of trust or other agreement or instrument to which the Company is a party or by
which the Company is bound, or any of its properties or businesses are bound, or
any franchise, license, permit, judgment, decree, order, statute, rule or
regulation applicable to the Company or violate any provision of the charter or
by-laws of the Company, except for such consents or waivers which have already
been obtained and are in full force and effect.
(o) All of the outstanding shares of common stock of the Company have been
duly authorized and validly issued and are fully paid and nonassessable and none
of such shares were issued in violation of any preemptive or other similar
right. The Stock, when issued and sold pursuant to this Agreement, will be duly
authorized and validly issued, fully paid and nonassessable and will not be
issued in violation of any preemptive or other similar right. Except as
disclosed in the Registration Statement and the Prospectus, there is no
outstanding option, warrant or other right calling for the issuance of, and
there is no commitment, plan or arrangement to issue, any capital stock of the
Company or any security convertible into or exercisable or exchangeable for such
capital stock, except for standard dividend reinvestment plans. The Stock
conforms in all material respects to all statements relating thereto contained
in the Registration Statement and the Prospectus.
(p) Subsequent to the respective dates as of which information is given in
the Registration Statement and the Prospectus, except as (x) described or
referred to therein, or (y) are not material (as to clauses (i) and (ii) only),
are consistent with past practice (as to clauses (i) and (ii) only), and are
publicly disclosed, the Company has not (i) issued any securities or incurred
any liability or obligation, direct or contingent, except such liabilities or
obligations incurred in the ordinary course of business including, without
limitation, debt financing to acquire and develop properties, (ii) entered into
any transaction not in the ordinary course of business or (iii) declared or paid
any dividend or made any distribution on any shares of its capital stock or
redeemed, purchased or otherwise acquired or agreed to redeem, purchase or
otherwise acquire any shares of its capital stock.
(q) Except as disclosed in the Registration Statement and Prospectus, no
holder of any security of the Company has the right, which has not been waived,
to have any security owned by such holder included in the Registration
Statement.
(r) All necessary corporate action has been duly and validly taken by the
Company to authorize the execution, delivery and performance of this Agreement
and the issuance and sale of the Stock by the Company. This Agreement has been
duly and validly authorized, executed and delivered by the Company and
constitutes and will constitute the legal, valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms. Except
for any "blue sky" filings or Trading Market listing applications to be filed
pursuant
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hereto, each approval, consent, order, authorization, designation, declaration
or filing by or with any regulatory, administrative or other governmental body
necessary in connection with the execution and delivery by the Company of this
Agreement and the consummation of the transactions contemplated hereby and the
issuance and sale of the Stock by the Company has been obtained or made and is
in full force and effect. The Company will use its best reasonable efforts to
cause the Stock to be listed for trading on the Trading Market. For purposes of
this Agreement, the "Trading Market" is (i) the Nasdaq National Market, and (ii)
each other securities exchange or market on which the common stock of the
Company trades or is admitted for trading.
(s) The Company has not incurred any liability for a fee, commission or
other compensation on account of the employment of a broker or finder in
connection with the transactions contemplated by this Agreement other than as
contemplated hereby or as described in the Registration Statement.
(t) The Company is conducting its business in compliance with all
applicable laws, rules and regulations of the jurisdictions in which it is
conducting business, except where the failure to be so in compliance would not
have a Material Adverse Effect.
(u) No transaction has occurred between or among the Company and any of
its officers or directors or any affiliate or affiliates of any such officer or
director that is required to be described in and is not described in the
Registration Statement and the Prospectus.
(v) The Company has not taken, nor will it take, directly or indirectly,
any action designed to or which might reasonably be expected to cause or result
in, or which has constituted or which might reasonably be expected to
constitute, the stabilization or manipulation of the price of the common stock
of the Company to facilitate the sale or resale of any of the Stock.
(w) The Company has filed all federal, state, local and foreign tax
returns that are required to be filed through the date hereof (and will file all
such tax returns when and as required to be filed after the date hereof), or has
received extensions thereof, and has paid all taxes shown on such returns to be
due on or prior to the date hereof (and will pay all taxes shown on such returns
to be due after the date hereof) and all assessments received by it to the
extent that the same are material and have become due except where the failure
to file such a return or pay such amount would not have a Material Adverse
Effect.
(x) The Company has met the qualification requirements for a "real estate
investment trust" during its taxable years ending on or after December 31, 2003
and its proposed method of operations will enable it to continue to meet the
requirements for qualification and taxation as a "real estate investment trust"
under the Internal Revenue Code of 1986, as amended (the "Code"), assuming no
change in the applicable underlying law. The Company does not know of any event
that would cause or is likely to cause the Company to fail to qualify as a "real
estate investment trust" at any time.
(y) The Company is not an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
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(z) The Company's systems of internal accounting controls taken as a whole
are sufficient to meet the broad objectives of internal accounting control
insofar as those objectives pertain to the prevention or detection of errors or
irregularities in amounts that would be material in relation to the Company's
financial statements; and, to the best of the Company's knowledge, neither the
Company nor any employee or agent thereof has made any payment of funds of the
Company or received or retained any funds, and no funds of the Company have been
set aside to be used for any payment, in each case in violation of any law, rule
or regulation.
(aa) The Company is not involved in any labor dispute and, to the
knowledge of the Company, no such dispute has been threatened, except for such
disputes as would not have a Material Adverse Effect on the Company, or subject
the Company or its shareholders to any material liability or disability.
(bb) Except as disclosed in the Registration Statement or the Prospectus,
(i) there has been no storage, disposal, generation, manufacture, refinement,
transportation, handling or treatment of toxic wastes, hazardous wastes or
hazardous substances by the Company or any of its subsidiaries (or to the
knowledge of the Company, any of their predecessors in interest) at, upon or
from any of the property now or previously owned or leased by the Company or its
subsidiaries in violation of any applicable law, ordinance, rule, regulation,
order, judgment, decree or permit or which would require remedial action under
any applicable law, ordinance, rule, regulation, order, judgment, decree or
permit, except for any violation or remedial action which would not have a
Material Adverse Effect; (ii) there has been no material spill, discharge, leak,
emission, injection, escape, dumping or release of any kind onto such property
or into the environment surrounding such property of any toxic wastes, solid
wastes, hazardous wastes or hazardous substances due to or caused by the Company
or any of its subsidiaries, except for any such spill, discharge, leak emission,
injection, escape, dumping or release which would not have a Material Adverse
Effect; and (iii) the terms "hazardous wastes," "toxic wastes" and "hazardous
substances" shall have the meanings specified in any applicable local, state,
federal and foreign laws or regulations with respect to environmental
protection.
ARTICLE II.
SALE AND DELIVERY OF SECURITIES
2.1 Sale and Delivery of Securities.
(a) On the basis of the representations, warranties and agreements herein
contained, but subject to the terms and conditions herein set forth, the Company
agrees to issue and sell through the Sales Manager, as agent, and the Sales
Manager agrees to sell, as agent for the Company, on a best efforts basis, up to
the Maximum Amount of the Stock during the term of this Agreement on the terms
set forth herein. The Stock will be sold from time to time as described in the
Registration Statement and Prospectus, in amounts, and subject to price
limitations, as directed by the Company and as agreed to by the Sales Manager.
(b) The Company or the Sales Manager may, upon notice to the other party
hereto by telephone (confirmed promptly by telecopy), at any time and from time
to time suspend the
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offering of Stock; provided, however, that such suspension shall not affect or
impair the parties' respective obligations with respect to the Stock sold
hereunder prior to the giving of such notice.
(c) The compensation to the Sales Manager for sales of Stock shall be at a
fixed commission rate of 5% of the gross sales price per share for the Stock
sold under this Agreement. The remaining proceeds, after further deduction for
any transaction fees imposed by any governmental or self-regulatory organization
in respect to such sale shall constitute the net proceeds to the Company for
such Stock (the "Net Proceeds").
(d) The Company shall open and maintain a trading account (the "Trading
Account") at a clearing agent designated by the Sales Manager to facilitate the
transactions contemplated by this Agreement. The Company shall, with respect to
each sale of Stock, effect delivery of the applicable number of Stock to the
Trading Account, on or before the third business day (or such other day as is
industry practice for regular-way trading) following each sale of the Stock
(each, a "Settlement Date"). The Net Proceeds from the sale of the Stock shall
be available in the Trading Account following the settlement of the sale on the
Settlement Date. The Sales Manager's compensation shall be withheld from the
sales proceeds on each Settlement Date and shall be paid to the Sales Manager.
(e) At each Settlement Date, the Company shall be deemed to have affirmed
each representation, warranty, covenant and other agreement contained in this
Agreement. Any obligation of the Sales Manager under this Agreement shall be
subject to the continuing accuracy of the representations and warranties of the
Company herein, to the performance by the Company of its obligations hereunder
and to the continuing satisfaction of the additional conditions specified in
Article IV below.
(f) If the Company shall default on its obligation to deliver Stock on any
Settlement Date, the Company shall (i) hold the Sales Manager harmless against
any loss, claim or damage arising from or as a result of such default by the
Company and (ii) pay the Sales Manager any commission to which it would
otherwise be entitled absent such default.
ARTICLE III.
COVENANTS OF THE COMPANY
3.1 The Company covenants and agrees with the Sales Manager that:
(a) As promptly as practicable after the date of this Agreement, the
Company will file the Registration Statement naming the Sales Manager as an
underwriter, to permit sales of the Stock under the Act. The Company will use
its commercially reasonable efforts to cause the Registration Statement to
become effective as promptly as possible thereafter.
(b) During the period in which a prospectus relating to the Stock is
required to be delivered under the Act, the Company will notify the Sales
Manager promptly of the time when any subsequent amendment to the Registration
Statement has become effective or any subsequent supplement to the Prospectus
has been filed and of any request by the Commission for any amendment or
supplement to the Registration Statement or the Prospectus or for additional
information; the Company will prepare and file with the Commission, promptly
upon
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the Sales Manager's reasonable request, any amendments or supplements to the
Registration Statement or Prospectus that, in the Sales Manager's reasonable
opinion, may be necessary or advisable in connection with the sale of the Stock
pursuant to this Agreement; the Company will not file any amendment or
supplement to the Registration Statement or Prospectus (other than a supplement
to the Prospectus that (i) relates solely to the issuance of securities other
than the Stock of the Company and (ii) does not materially change the
information about the Company or its business, operations, properties or
financial condition disclosed in the Registration Statement or Prospectus
previously thereto (an "Excluded Supplement")) unless a copy thereof has been
submitted to the Sales Manager a reasonable period of time before the filing and
the Sales Manager has not reasonably objected thereto; and it will notify the
Sales Manager at the time of filing thereof a copy of any document that upon
filing is deemed to be incorporated by reference in the Registration Statement
or Prospectus, which will then be available on the Company's website at
xxx.xxxxxxxxxxxxxxx.xxx (and will furnish to the Sales Manager any such document
that is not available on the Company's website). The Company will cause each
amendment or supplement to the Prospectus to be filed with the Commission as
required pursuant to the applicable paragraph of Rule 424(b) of the Rules and
Regulations or, in the case of any document to be incorporated therein by
reference, to be filed with the Commission as required pursuant to the Exchange
Act, within the time period prescribed.
(c) The Company will advise the Sales Manager, promptly after it shall
receive notice or obtain knowledge thereof, of the issuance by the Commission of
any stop order suspending the effectiveness of the Registration Statement, of
the suspension of the qualification of the Stock for offering or sale in any
jurisdiction, or of the initiation or threatening of any proceeding for any such
purpose; and it will promptly use its commercially reasonable efforts to prevent
the issuance of any stop order or to obtain its withdrawal if such a stop order
should be issued.
(d) Within the time during which a prospectus relating to the Stock is
required to be delivered under the Act, the Company will comply with all
requirements imposed upon it by the Act and by the Rules and Regulations, as
from time to time in force, so far as necessary to permit the continuance of
sales of or dealings in the Stock as contemplated by the provisions hereof and
the Prospectus. If during such period any event occurs as a result of which the
Prospectus, as then amended or supplemented, would include an untrue statement
of a material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances then existing, not
misleading, or if during such period it is necessary to amend or supplement the
Registration Statement or Prospectus to comply with the Act, the Company will
promptly notify the Sales Manager to suspend the offering of Stock during such
period and the Company will amend or supplement the Registration Statement or
Prospectus (at the expense of the Company) so as to correct such statement or
omission or effect such compliance and will use its best reasonable efforts to
have any amendment or supplement to the Registration Statement or Prospectus
declared effective as soon as possible, unless the Company has reasonable
business reasons to defer public disclosure of the relevant information.
(e) The Company will use its best reasonable efforts to qualify the Stock
for sale under the securities laws of such jurisdictions as the Sales Manager
designates and to continue such qualifications in effect so long as required for
the sale of the Stock, except that the Company shall not be required in
connection therewith to qualify as a foreign corporation or to execute a general
consent to service of process in any jurisdiction.
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(f) The Company will furnish to the Sales Manager and its legal counsel
(at the expense of the Company) copies of the Registration Statement and the
Prospectus during the period in which a prospectus relating to the Stock is
required to be delivered under the Act, in each case as soon as available and in
such quantities as the Sales Manager may from time to time reasonably request
and, in the case when the Trading Market is a national securities exchange, the
Company will also furnish copies of the Prospectus to such exchange in
accordance with Rule 153 of the Rules and Regulations.
(g) The Company will make generally available to its security holders as
soon as practicable, but in any event not later than 15 months after the end of
the Company's current fiscal quarter, an earnings statement (which need not be
audited) covering a 12-month period that satisfies the provisions of Section
11(a) of the Act and Rule 158 of the Rules and Regulations.
(h) The Company, whether or not the transactions contemplated hereunder
are consummated or this Agreement is terminated, will pay all of its expenses
incident to the performance of its obligations hereunder (including, but not
limited to, any transaction fees imposed by any governmental or self-regulatory
organization with respect to transactions contemplated by this Agreement and any
blue sky fees) and will pay the expenses of printing all documents relating to
the offering. The Company will reimburse the Sales Manager for its reasonable
out-of-pocket costs and expenses incurred in connection with entering into this
Agreement, including, without limitation, reasonable travel, reproduction,
printing and similar expenses, initial and ongoing due diligence, and reasonable
fees and disbursements of its legal counsel. In addition, without limiting the
foregoing, the Company will pay, or reimburse the Sales Manager for, any filing
fees incurred by the Sales Manager in connection with filings required to be
made by the Sales Manager under NASD Rule 2710, the Corporate Financing Rule.
(i) The Company shall use its best reasonable efforts to list, subject to
notice of issuance, the Stock on each applicable Trading Market.
(j) The Company will apply the Net Proceeds from the sale of the Stock as
set forth in the Prospectus.
(k) The Company will not, directly or indirectly, offer or sell any shares
of common stock (other than the Stock) or securities convertible into or
exchangeable for, or any rights to purchase or acquire, common stock, during the
period from the date of this Agreement through the final Settlement Date for the
sale of Stock hereunder without (i) giving the Sales Manager at least one
business day prior written notice specifying the nature of the proposed sale and
the date of such proposed sale and (ii) suspending activity under this program
for such period of time as may reasonably be determined by agreement of the
Company and the Sales Manager; provided, however, that no such notice and
suspension shall be required in connection with the Company's issuance or sale
of (i) shares of common stock pursuant to any employee or director stock option
or benefits plan, stock ownership plan, dividend reinvestment plan, as such
plans may be amended from time to time, and (ii) common stock issuable upon
conversion of securities or the exercise of warrants, options or other rights in
effect or outstanding on the date hereof. Notwithstanding the foregoing, this
paragraph (k) shall not apply during periods that the
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Company is neither selling Stock through the Sales Manager nor has requested the
Sales Manager to sell Stock.
(l) The Company will, at any time during the term of this Agreement, as
supplemented from time to time, advise the Sales Manager immediately after it
shall have received notice or obtain knowledge thereof, of any information or
fact that would alter or affect any opinion, certificate, letter and other
document provided to the Sales Manager pursuant to Article IV below.
(m) Each time that the Registration Statement or the Prospectus shall be
amended or supplemented (other than an Excluded Supplement) and on the dates
specified in Section 4.1(f) below, the Company shall (unless the Company is not
then selling Stock through the Sales Manager and has not requested the Sales
Manager to sell Stock) furnish or cause to be furnished to the Sales Manager
forthwith a certificate dated the date of filing with the Commission of such
amendment, supplement or other document, the date of effectiveness of amendment,
as the case may be, in form satisfactory to the Sales Manager to the effect that
the statements contained in the certificates referred to in Section 4.1(f) below
that were last furnished to the Sales Manager are true and correct at the time
of such amendment, supplement, filing, as the case may be, as though made at and
as of such time (except that such statements shall be deemed to relate to the
Registration Statement and the Prospectus as amended and supplemented to such
time) or, in lieu of such certificates, certificates of the same tenor as the
certificates referred to in said Section 4.1(f) below, modified as necessary to
relate to the Registration Statement and the Prospectus as amended and
supplemented to the time of delivery of such certificate.
(n) Each time that a post-effective amendment to the Registration
Statement is declared effective or the Company files a Form 10-K, and at such
other times as may be reasonably requested by the Sales Manager, the Company
shall (unless the Company is not then selling Stock through the Sales Manager
and has not requested the Sales Manager to sell Stock) furnish or cause to be
furnished forthwith to the Sales Manager and to its legal counsel, a written
opinion of Jaffe, Raitt, Heuer & Xxxxx, P.C., counsel to the Company ("Company
Counsel"), or other counsel reasonably satisfactory to the Sales Manager, dated
the date of effectiveness of such amendment or the date of filing with the
Commission of such document, as the case may be, in form and substance
satisfactory to the Sales Manager, of the same tenor as the opinion referred to
in Section 4.1(d) below, but modified as necessary to relate to the Registration
Statement and the Prospectus as amended and supplemented to the time of delivery
of such opinion.
(o) Each time that the Registration Statement or the Prospectus shall be
amended or supplemented (other than an Excluded Supplement) to include
additional financial information, the Company shall (unless the Company is not
then selling Stock through the Sales Manager and has not requested the Sales
Manager to sell Stock) cause Xxxxx Xxxxxxxx LLP, or other independent
accountants then retained by the Company, forthwith to furnish to the Sales
Manager a letter, dated the date of effectiveness of such amendment, or the date
of filing of such supplement or other document with the Commission, as the case
may be, in form satisfactory to the Sales Manager, of the same tenor as the
letter referred to in Section 4.1(e)
11
below but modified to relate to the Registration Statement and the Prospectus,
as amended and supplemented to the date of such letter.
ARTICLE IV.
CONDITIONS OF THE SALES MANAGER'S OBLIGATIONS
4.1 The obligations of the Sales Manager to sell the Stock as provided
herein shall be subject to the accuracy, as of the date hereof, and as of each
Settlement Date contemplated under this Agreement, of the representations and
warranties of the Company herein, to the performance by the Company of its
obligations hereunder and to the following additional conditions:
(a) The Registration Statement contemplated by Section 3.1(a) above shall
have been declared effective. No stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceeding for that purpose
shall have been instituted or, to the knowledge of the Company or the Sales
Manager, threatened by the Commission, and any request of the Commission for
additional information (to be included in the Registration Statement or the
Prospectus or otherwise) shall have been complied with to the Sales Manager's
reasonable satisfaction.
(b) The Sales Manager shall not have advised the Company that the
disclosures in the Registration Statement or the Prospectus are not reasonably
acceptable to the Sales Manager.
(c) Except as contemplated in the Prospectus, subsequent to the respective
dates as of which information is given in the Registration Statement and the
Prospectus, there shall not have been any material adverse change in the capital
stock of the Company, or any material adverse change, or any development that
may reasonably be expected to cause a material adverse change, in the condition
(financial or other), business, net worth or results of operations of the
Company, or any adverse change in the rating assigned to any securities of the
Company.
(d) (1) The Sales Manager shall have received at the date of the first
sale of Stock hereunder (the "Commencement Date") and at every other date
specified in Section 3.1(n) above, opinions of Company Counsel, dated as of the
Commencement Date and dated as of such other date, substantially in the form of
Schedule A hereto.
(2) The Sales Manager shall have received a letter from Company
Counsel authorizing the Sales Manager to rely on the opinion on tax matters
delivered by Company Counsel as Exhibit 8.1 to the Registration Statement.
(e) At the Commencement Date and at such other dates specified in Section
3.1(o) above, the Sales Manager shall have received a "comfort letter" from
Xxxxx Xxxxxxxx LLP, independent public accountants for the Company, or other
independent accountants then retained by the Company, dated the date of delivery
thereof, in form and substance satisfactory to the Sales Manager.
(f) The Sales Manager shall have received from the Company a certificate,
or certificates, signed by the Chief Financial Officer and President or Chief
Executive Officer or any Vice President of the Company, dated as of the
Commencement Date and (unless the
12
Company is not then selling Stock through the Sales Manager and has not
requested the Sales Manager to sell Stock) dated as of the first business day of
each calendar month thereafter (each, a "Certificate Date"), to the effect that,
to the best of their knowledge based upon reasonable investigation:
(i) The representations and warranties of the Company in this
Agreement are true and correct, as if made at and as of the Commencement
Date or the Certificate Date (as the case may be), and the Company has
complied with all the agreements and satisfied all the conditions on its
part to be performed or satisfied at or prior to the Commencement Date and
each such Certificate Date (as the case may be);
(ii) No stop order suspending the effectiveness of the Registration
Statement has been issued, and no proceeding for that purpose has been
instituted or, to the knowledge of such officer after due inquiry, is
threatened, by the Commission;
(iii) Since the date of this Agreement there has occurred no event
required to be set forth in an amendment or supplement to the Registration
Statement or Prospectus that has not been so set forth and there has been
no document required to be filed under the Exchange Act and the rules and
regulations of the Commission thereunder that upon such filing would be
deemed to be incorporated by reference in the Prospectus that has not been
so filed; and
(iv) Since the date of this Agreement, there has not been any
material adverse change in the assets or properties, business, results of
operations, or condition (financial or otherwise) of the Company, which
has not been described in an amendment or supplement to the Registration
Statement or Prospectus (directly or by incorporation).
(g) At the Commencement Date and on each Settlement Date, the Company
shall have furnished to the Sales Manager such appropriate further information,
certificates and documents as the Sales Manager may reasonably request.
(h) The Sales Manager's participation in the distribution of Stock
contemplated by this Agreement shall have been reviewed and found acceptable by
the NASD pursuant to NASD Rule 2710 (Corporate Financing Rule).
All such opinions, certificates, letters and other documents will be in
compliance with the provisions hereof only if they are satisfactory in form and
substance to the Sales Manager. The Company will furnish the Sales Manager with
such conformed copies of such opinions, certificates, letters and other
documents, as the Sales Manager shall reasonably request.
ARTICLE V.
INDEMNIFICATION AND CONTRIBUTION
5.1 (a) (a) The Company agrees to indemnify and hold harmless the Sales
Manager and each person, if any, who controls the Sales Manager within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, as follows:
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(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the representations in
this Agreement or contained in the Registration Statement (or any
amendment thereto), or the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to make the
statements therein not misleading or arising out of any untrue statement
or alleged untrue statement of a material fact contained in any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto) or the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, if such settlement is effected with
the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred
(including, subject to Section 5.1(c) below, the reasonable fees and
disbursements of legal counsel chosen by the Sales Manager), reasonably
incurred in investigating, preparing or defending against any litigation,
or any investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid under (i) or
(ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by the
Sales Manager expressly for use in the Registration Statement (or any amendment
thereto) or any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto).
(b) The Sales Manager agrees to indemnify and hold harmless the Company
and its directors and each officer of the Company who signed the Registration
Statement, and each person, if any, who controls the Company within the meaning
of Section 15 of the Act or Section 20 of the Exchange Act against any and all
loss, liability, claim, damage and expense described in the indemnity contained
in Section 5.1(a) above, as incurred, but only with respect to untrue statements
or omissions, or alleged untrue statements or omissions, made in the
Registration Statement (or any amendments thereto) or any preliminary prospectus
or the Prospectus (or any amendment or supplement thereto) in reliance upon and
in conformity with written information furnished to the Company by the Sales
Manager expressly for use in the Registration Statement (or any amendment
thereto) or such preliminary prospectus or the Prospectus (or any amendment or
supplement thereto). The total liability of the Sales Manager under this Section
5.1(b) shall not exceed the total actual sales price of Stock sold by the Sales
Manager that is the subject of the dispute.
14
(c) Any indemnified party that proposes to assert the right to be
indemnified under this Article V will, promptly after receipt of notice of
commencement of any action against such party in respect of which a claim is to
be made against an indemnifying party or parties under this Article V, notify
each such indemnifying party of the commencement of such action, enclosing a
copy of all papers served, but the omission so to notify such indemnifying party
will not relieve the indemnifying party from any liability that it might have to
any indemnified party to the extent it is not materially prejudiced as a result
thereof. If any such action is brought against any indemnified party and it
notifies the indemnifying party of its commencement, the indemnifying party will
be entitled to participate in and, to the extent that it elects by delivering
written notice to the indemnified party promptly after receiving notice of the
commencement of the action from the indemnified party, jointly with any other
indemnifying party similarly notified, to assume the defense of the action, with
legal counsel reasonably satisfactory to the indemnified party, and after notice
from the indemnifying party to the indemnified party of its election to assume
the defense, the indemnifying party will not be liable to the indemnified party
for any legal or other expenses except as provided below. The indemnified party
will have the right to employ its own legal counsel in any such action, but the
fees, expenses and other charges of such legal counsel will be at the expense of
such indemnified party unless (1) the employment of legal counsel by the
indemnified party has been authorized in writing by the indemnifying party, (2)
the indemnified party has reasonably concluded (based on the written advice of
legal counsel) that there may be legal defenses available to it or other
indemnified parties that are different from or in addition to those available to
the indemnifying party, (3) a conflict or potential conflict exists (based on
the written advice of legal counsel to the indemnified party) between the
indemnified party and the indemnifying party (in which case the indemnifying
party will not have the right to direct the defense of such action on behalf of
the indemnified party) or (4) the indemnifying party has not in fact employed
legal counsel to assume the defense of such action within a reasonable time
after receiving notice of the commencement of the action, in each of which cases
the reasonable fees, disbursements and other charges of legal counsel will be at
the expense of the indemnifying party or parties. It is understood that the
indemnifying party or parties shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the reasonable fees,
disbursements and other charges of more than one separate firm admitted to
practice in such jurisdiction at any one time for all such indemnified party or
parties. All such fees, disbursements and other charges will be reimbursed by
the indemnifying party promptly as they are incurred. An indemnifying party will
not be liable for any settlement of any action or claim effected without its
written consent (which consent will not be unreasonably withheld).
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in the foregoing
paragraphs of this Article V is applicable in accordance with its terms but for
any reason is held to be unavailable from the Company or the Sales Manager, the
Company and the Sales Manager will contribute to the total losses, claims,
liabilities, expenses and damages (including any investigative, legal and other
expenses reasonably incurred in connection with, and any amount paid in
settlement of, any action, suit or proceeding or any claim asserted, but after
deducting any contribution received by the Company from persons other than the
Sales Manager, such as persons who control the Company within the meaning of the
Act, officers of the Company who signed the Registration Statement and directors
of the Company, who also may be liable for contribution) to which the Company
and the Sales Manager may be subject in such proportion as shall be appropriate
to reflect the relative
15
benefits received by the Company on the one hand and the Sales Manager on the
other. The relative benefits received by the Company on the one hand and the
Sales Manager on the other hand shall be deemed to be in the same proportion as
the total net proceeds from the offering (before deducting expenses) received by
the Company bear to the total compensation (before deducting expenses) received
by the Sales Manager from the sale of Stock on behalf of the Company. If, but
only if, the allocation provided by the foregoing sentence is not permitted by
applicable law, the allocation of contribution shall be made in such proportion
as is appropriate to reflect not only the relative benefits referred to in the
foregoing sentence but also the relative fault of the Company, on the one hand,
and the Sales Manager, on the other, with respect to the statements or omission
which resulted in such loss, claim, liability, expense or damage, or action in
respect thereof, as well as any other relevant equitable considerations with
respect to such offering. Such relative fault shall be determined by reference
to whether the untrue or alleged untrue statement of a material fact or omission
or alleged omission to state a material fact relates to information supplied by
the Company or the Sales Manager, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company and the Sales Manager agree that it would not
be just and equitable if contributions pursuant to this Section 5.1(d) were to
be determined by pro rata allocation or by any other method of allocation, which
does not take into account, the equitable considerations referred to herein. The
amount paid or payable by an indemnified party as a result of the loss, claim,
liability, expense or damage, or action in respect thereof, referred to above in
this Section 5.1(d) shall be deemed to include, for the purpose of this Section
5.1(d), any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
Notwithstanding the foregoing provisions of this Section 5.1(d), the Sales
Manager shall not be required to contribute any amount in excess of the amount
by which the total actual sales price at which Stock sold by the Sales Manager
exceeds the amount of any damages that the Sales Manager has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission and no person found guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) will be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 5.1(d), any person who controls
a party to this Agreement within the meaning of the Act will have the same
rights to contribution as that party, and each officer and director of the
Company who signed the Registration Statement will have the same rights to
contribution as the Company, subject in each case to the provisions hereof. Any
party entitled to contribution, promptly after receipt of notice of commencement
of any action against such party in respect of which a claim for contribution
may be made under this Section 5.1(d), will notify any such party or parties
from whom contribution may be sought, but the omission so to notify will not
relieve that party or parties from whom contribution may be sought from any
other obligation it or they may have under this Section 5.1(d). No party will be
liable for contribution with respect to any action or claim settled without its
written consent (which consent will not be unreasonably withheld).
(e) The indemnity and contribution provided by this Article V shall not
relieve the Company and the Sales Manager from any liability the Company and the
Sales Manager may otherwise have (including, without limitation, any liability
the Sales Manager may have for a breach of its obligations under Article II
above).
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ARTICLE VI.
REPRESENTATIONS AND AGREEMENTS TO SURVIVE DELIVERY
6.1 All representations, warranties and agreements of the Company herein
or in certificates delivered pursuant hereto, and the agreements of the Sales
Manager contained in Article V above, shall remain operative and in full force
and effect regardless of any investigation made by or on behalf of the Sales
Manager or any controlling persons, or the Company (or any of their officers,
directors or controlling persons), and shall survive delivery of and payment for
the Stock.
ARTICLE VII.
TERMINATION
7.1 The Company shall have the right, by giving notice as hereinafter
specified, to terminate this Agreement in its sole discretion at any time. Any
such termination shall be without liability of any party to any other party
except that the provisions of Section 3.1(h), Article V and Article VI above
shall remain in full force and effect notwithstanding such termination.
7.2 The Sales Manager shall have the right, by giving notice as
hereinafter specified, to terminate this Agreement in its sole discretion at any
time. Any such termination shall be without liability of any party to any other
party except that the provisions of Section 3.1(h), Article V and Article VI
above shall remain in full force and effect notwithstanding such termination.
7.3 This Agreement shall remain in full force and effect unless terminated
pursuant to Sections 7.1 or 7.2 above or otherwise by mutual agreement of the
parties; provided that any such termination by mutual agreement shall in all
cases be deemed to provide that Section 3.1(h), Article V and Article VI above
shall remain in full force and effect.
7.4 Any termination of this Agreement shall be effective on the date
specified in such notice of termination; provided that such termination shall
not be effective until the close of business on the date of receipt of such
notice by the Sales Manager or the Company, as the case may be. If such
termination shall occur during a period when sales of Stock are being made
pursuant to this Agreement, any sales of Stock made prior to the termination of
this Agreement shall settle in accordance with the provisions of this Agreement.
ARTICLE VIII.
NOTICES
8.1 All notices or communications hereunder shall be in writing and if
sent to the Sales Manager shall be mailed, delivered or telecopied and confirmed
to the Sales Manager at Xxxxxxx Xxxxxxx Securities Corporation, 000 Xxxxxxx
Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, facsimile number (000) 000-0000,
Attention: Corporate Finance, or if sent to the Company, shall be mailed,
delivered or telecopied and confirmed to the Company at 27777
00
Xxxxxxxx Xxxx, Xxxxx 0000, Xxxxxxxxxx, Xxxxxxxx 00000, Attention: X. Xxxxxxxx
Xxxxxx, Jr., CFO; facsimile number 000-000-0000. Each party to this Agreement
may change such address for notices by sending to the parties to this Agreement
written notice of a new address for such purpose.
ARTICLE IX.
MISCELLANEOUS
9.1 This Agreement shall inure to the benefit of and be binding upon the
Company and the Sales Manager and their respective successors and the
controlling persons, officers and directors referred to in Article V above, and
no other person will have any right or obligation hereunder.
9.2 This Agreement constitutes the entire agreement and supersedes all
other prior and contemporaneous agreements and undertakings, both written and
oral, between the parties hereto with regard to the subject matter hereof.
9.3 THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE PRINCIPLES OF
CONFLICTS OF LAWS.
9.4 This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument. The parties agree that this Agreement will be
considered signed when the signature of a party is delivered by facsimile
transmission. Such facsimile transmission shall be treated in all respects as
having the same effect as an original signature.
18
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the date hereof.
ORIGEN FINANCIAL, INC..
By: /s/ X. Xxxxxxxx Xxxxxx, Jr.
-------------------------------
Name: X. Xxxxxxxx Xxxxxx, Jr.
Title: Chief Financial Officer
XXXXXXX XXXXXXX SECURITIES CORPORATION
By: /s/ Xxxx Xxxxx
-------------------------------
Name: Xxxx Xxxxx
Title: Managing Partner
19
