EXHIBIT 10.2
ORIGEN FINANCIAL, INC.
COMMON STOCK
PURCHASE AGREEMENT
October 8, 2003
Xxxxxx Brothers Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Origen Financial, Inc., a Delaware corporation (the "Company"),
proposes, upon the terms and considerations set forth herein, to issue and sell
to you, as the initial purchaser (the "Initial Purchaser"), an aggregate of Six
Million Five Hundred Thousand (6,500,000) shares (the "Initial Shares") of its
common stock, par value $0.01 per share (the "Common Stock"). In addition, the
Company proposes, upon the terms and considerations set forth herein, to grant
the Initial Purchaser an option to purchase up to an additional Two Million Two
Hundred Fifty Thousand (2,250,000) shares of its Common Stock (the "Option
Shares" and, together with the Initial Shares, the "Shares"). The Shares will
have the rights and preferences that are summarized in the Offering Memorandum
(as defined below). This purchase agreement (this "Agreement") is to confirm the
agreement concerning the purchase of the Shares from the Company by the Initial
Purchaser.
1. Preliminary Offering Memorandum and Offering Memorandum. The Shares
will be offered and sold to the Initial Purchaser without registration under the
Securities Act of 1933, as amended (the "Act"), in reliance on an exemption
pursuant to Section 4(2) under the Act. The Company has prepared a preliminary
offering memorandum, dated September 2, 2003 (the "Preliminary Offering
Memorandum"), and an offering memorandum, dated October 7, 2003 (the "Offering
Memorandum"), setting forth information regarding the Company and the Shares.
Any references herein to the Preliminary Offering Memorandum and the Offering
Memorandum shall be deemed to include all documents incorporated by reference
therein and all amendments and supplements thereto. The Company hereby confirms
that it has authorized the use of the Preliminary Offering Memorandum and the
Offering Memorandum in connection with the offering and resale of the Shares by
the Initial Purchaser.
It is understood and acknowledged that upon original issuance thereof,
and 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 (along
with such other legends as the Initial Purchaser and its counsel deem
necessary):
"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 TO THE ISSUER'S COMMON STOCK EXCEPT IN
COMPLIANCE WITH THE REQUIREMENTS OF THE ACT."
You have advised the Company that you will make offers (the "Exempt
Resales") of the Shares purchased by you hereunder on the terms set forth in the
Offering Memorandum, as amended or supplemented, solely to (i) persons whom you
reasonably believe to be "qualified institutional buyers" as defined in Rule
144A under the Act in reliance upon the exemption from the registration
requirements of the Act provided by Rule 144A ("QIBs") or (ii) outside the
United States to certain persons in offshore transactions in reliance on
Regulation S under the Act. Those persons specified in clauses (i) and (ii) are
referred to herein as the ("Eligible Purchasers"). You will offer the Shares to
Eligible Purchasers at a price equal to Ten Dollars ($10.00) per Share.
Holders (including subsequent transferees) of the Shares will have the
registration rights set forth in the registration rights agreement attached
hereto as Exhibit A (the "Registration Rights Agreement") by and among the
Company, the Initial Purchaser and the other parties thereto, dated as of even
date herewith, for so long as such Shares constitute "Registrable Securities"
(as defined in the Registration Rights Agreement).
It is understood and acknowledged that upon original issuance thereof,
and until such time as the Shares are no longer subject to the Registration
Rights 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
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SHARES. A COPY OF THE REGISTRATION RIGHTS AGREEMENT IS AVAILABLE AT THE
OFFICES OF THE COMPANY."
2. Representations, Warranties and Agreements of the Company. The
Company represents, warrants and agrees as follows:
(a) The Shares satisfy the requirements set forth in Rule
144A(d)(3) under the Act.
(b) Assuming (i) that your representations and warranties in
Section 3(d) are true, (ii) that you comply with your covenants set forth in
Section 3(d), and (iii) that the representations of the QIBs set forth in the
purchaser's letters (substantially in the form attached as Annex A to the
Preliminary Offering Memorandum and the Offering Memorandum) are true, the
purchase and resale of the Shares pursuant hereto (including pursuant to the
Exempt Resales) is exempt from the registration requirements of the Act.
Assuming that your representations and warranties in Section 3(d) are true, 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.
(c) Assuming that your representations and warranties in
Section 3(d) are true, 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.
(d) Set forth on Exhibit B 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.
(e) 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.
(f) 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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(g) 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.
(h) Each of the Preliminary Offering Memorandum and the
Offering Memorandum, as of its date, contains all the information specified in,
and meeting the requirements of Rule 144A(d)(4) under the Act.
(i) The Preliminary Offering Memorandum and Offering
Memorandum have been prepared by the Company for use by the Initial Purchaser in
connection with the Exempt Resales. No order or decree preventing the use of the
Preliminary Offering Memorandum or 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.
(j) The Preliminary Offering Memorandum, and the Offering
Memorandum as of their respective dates and the Offering Memorandum as of the
Closing Date (as defined in Section 3(b)) and each Second Closing Date (as
defined in Section 3(c)), if any, did not and 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 Preliminary Offering Memorandum and Offering Memorandum made
in reliance upon and in conformity with information relating to the Initial
Purchaser furnished to the Company in writing by or on behalf of the Initial
Purchaser expressly for use therein.
(k) The market-related and customer-related data and estimates
in the Preliminary Offering Memorandum and the Offering Memorandum are based on
or derived from sources that the Company believes to be reliable and accurate.
(l) 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
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(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").
(m) 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.
(n) 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.
(o) The Shares will conform to the description thereof in the
Offering Memorandum.
(p) The Company has all requisite corporate power and
authority to enter into the Registration Rights Agreement. The Registration
Rights 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.
(q) The Registration Rights Agreement will conform to the
description thereof in the Offering Memorandum.
(r) 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.
(s) The issue and sale of the Shares and the compliance by the
Company with all of the provisions of the Registration Rights 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 subsidiaries' 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
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consummation by the Company of the transactions contemplated by this Agreement
or the Registration Rights Agreement, except for the filing of a registration
statement by the Company with the Securities Exchange Commission (the
"Commission") pursuant to the Act as required by the Registration Rights
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 Initial Purchaser.
(t) Other than the Registration Rights 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 securities
in the securities registered pursuant to the Registration Rights Agreement or in
any securities being registered pursuant to any other registration statement
filed by the Company under the Act.
(u) 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 Initial Purchaser hereunder.
(v) 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 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 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.
(w) 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.
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(x) Xxxxx Xxxxxxxx LLP, who have certified certain financial
statements of the Company, whose report appears in the Offering Memorandum and
who have delivered the initial letter referred to in Section 7(f) hereof, 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.
(y) 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.
(z) 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.
(aa) 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.
(bb) 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.
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(cc) Except as set forth on Schedule 2(cc), 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.
(dd) 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.
(ee) 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.
(ff) 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.
(gg) Since the date as of which information is given in the
Preliminary 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.
(hh) 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.
(ii) Except as set forth on Schedule 2(ii), 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,
8
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.
(jj) 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.
(kk) 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 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.
(ll) 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.
(mm) 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.
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(nn) 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 Xxxxxxx Procter
LLP, counsel for the Initial 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 Xxxxxxx Procter LLP 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.
(oo) All instruments, records, agreements and other documents
requested by the Initial Purchaser or its counsel, Xxxxxxx Procter LLP, have
been provided to, or made available for inspection by, the Initial Purchaser or
Xxxxxxx Procter LLP, and such documents are complete and genuine and include all
material collateral and supplemental thereto.
(pp) Intentionally Omitted.
(qq) 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.
(rr) 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.
(ss) 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.
(tt) 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.
(uu) 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
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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.
(vv) 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.
(ww) Any certificate signed by an officer of the Company or an
officer or manger of any of its subsidiaries and delivered to the Initial
Purchaser or to counsel for the Initial Purchaser shall be deemed to be a
representation and warranty by the Company and its subsidiaries to the Initial
Purchaser as to the matters set forth therein and not representations and
warranties of the officers in their individual capacities.
(xx) 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 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.
(yy) 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.
3. Purchase of the Shares by the Initial Purchaser, Agreements to Sell,
Purchase and Resell.
(a) The Initial Shares. On the basis of the representations,
warranties and agreements herein contained, and upon the terms but subject to
the conditions set forth herein, the Company agrees to issue and sell and the
Initial Purchaser agrees to purchase the Initial Shares. The purchase price to
be paid by the Initial Purchaser to the Company for the Initial Shares shall be
$9.425 per Share (the "Purchase Price").
(b) The First Closing Date. Delivery of the Initial Shares and
payment therefor shall be made at the offices of Xxxxxx Brothers Inc., 000
Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (or such other place as may be agreed
to by the Company and the Initial Purchaser), on October 8, 2003 (the "Closing
Date").
(c) The Option Shares; the Second Closing Date. In addition,
the Company hereby grants an option to the Initial Purchaser to purchase up to
an aggregate of Two Million Two Hundred Fifty Thousand (2,250,000) Option Shares
from the Company at the Purchase Price. The option granted hereunder may be
exercised once upon notice by the Initial Purchaser to the Company, which notice
may be given at any time within thirty (30) days following the Closing Date. Any
such notice shall set forth (i) the aggregate number of Option Shares as to
which the Initial Purchaser is exercising the option and (ii) the time, date and
place at which such Option Shares will be delivered (which time and date may be
simultaneous with, but not earlier than, the Closing Date, and in such case the
term "Closing Date" shall refer to the time and date
11
of delivery of the Initial Shares and all or a portion of the Option Shares).
The time and date of delivery of Option Shares, if subsequent to the Closing
Date, is called a "Second Closing Date" and shall be determined by the Initial
Purchaser and shall not be earlier than three (3) nor later than five (5) full
business days after delivery of such notice of exercise. The Initial Purchaser
may cancel the option at any time prior to its expiration by giving written
notice of such cancellation to the Company.
(d) Initial Purchaser Representations and Covenants. The
Initial Purchaser hereby represents and warrants to the Company that it will
offer the Shares for sale upon the terms and conditions set forth in this
Agreement and in the Offering Memorandum. The Initial Purchaser hereby
represents and warrants to, and agrees with, the Company that the Initial
Purchaser: (i) is a QIB with such knowledge and experience in financial and
business matters as are necessary in order to evaluate the merits and risks of
an investment in the Shares; (ii) in connection with the Exempt Resales, will
solicit offers to buy the Shares only from, and will offer to sell the Shares
only to, the Eligible Purchasers in accordance with this Agreement and on the
terms contemplated by the Offering Memorandum; and (iii) will not offer or sell
the Shares, nor has it offered or sold the Shares by, or otherwise engaged in,
any 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) and will
not engage in any directed selling efforts within the meaning of Rule 902 under
the Act, in connection with the offering of the Shares. The Initial Purchaser
has advised the Company that it will offer the Shares to Eligible Purchasers at
a price equal to Ten Dollars ($10.00) per Share.
The Initial Purchaser understands that the Company and, for purposes of
the opinions to be delivered to the Initial Purchaser pursuant to Sections 7(c),
7(d) and 7(e) hereof, counsel to the Company and counsel to the Initial
Purchaser, will rely upon the accuracy and truth of the foregoing
representations, warranties and agreements and the Initial Purchaser hereby
consents to such reliance.
4. Delivery of the Shares. The Shares will be delivered to the Initial
Purchaser, against payment by or on behalf of the Initial Purchaser of the
purchase price therefor by wire transfer in immediately available funds, by
causing The Depository Trust Company ("DTC") to credit the Shares to the account
of the Initial Purchaser at DTC. The Shares will be evidenced by one or more
global securities in definitive form and will be registered in the name of Cede
& Co. as nominee of DTC. The Shares to be delivered to the Initial Purchaser
shall be made available to the Initial Purchaser in New York City for inspection
and packaging not later than 9:30 A.M., New York City time, on the business day
next preceding the Closing Date or the Second Closing Date, if any.
5. Agreements of the Company. The Company agrees with the Initial
Purchaser as follows:
(a) The Company will furnish to the Initial Purchaser, without
charge, upon request, such number of copies of the Offering Memorandum, as it
may then be amended or supplemented, as it may reasonably request.
12
(b) The Company will not make any amendment or supplement to
the Preliminary Offering Memorandum or to the Offering Memorandum of which the
Initial Purchaser shall not previously have been advised or to which it shall
reasonably object after being so advised, unless the Company's legal counsel has
delivered an opinion addressed to the Initial Purchaser stating that such
amendment or supplement is required under the Act or the Rules and Regulations
in order to make the statements in the Preliminary Offering Memorandum and/or
Offering Memorandum not misleading.
(c) The Company consents to the use, in accordance with the
securities or Blue Sky laws of the jurisdictions in which the Shares are offered
by the Initial Purchaser prior to the date of the Offering Memorandum, of each
Preliminary Offering Memorandum so furnished by the Company. The Company
consents to the use of the Offering Memorandum in accordance with the securities
or Blue Sky laws of the jurisdictions in which the Shares are offered by the
Initial Purchaser in connection with the offering and sale of the Shares.
(d) If, at any time prior to completion of the sale of the
Shares by the Initial Purchaser to Eligible Purchasers, any event occurs or
information becomes known that, in the judgment of the Company or in the opinion
of counsel for the Initial Purchaser, should be set forth in the Offering
Memorandum so that the Offering Memorandum does not include any untrue statement
of material fact or omit to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading, or if it is necessary to supplement or amend the Offering
Memorandum in order to comply with any law, the Company will forthwith prepare
an appropriate supplement or amendment thereto, and will expeditiously furnish
to the Initial Purchaser a reasonable number of copies thereof. If any such
event shall occur, upon obtaining knowledge of such event the Company shall
promptly, and in any event within 24 hours, notify the Initial Purchaser of the
occurrence of such event.
(e) The Company will cooperate with the Initial Purchaser and
with its counsel in connection with the qualification of the Shares for offering
and sale by the Initial Purchaser under the securities or Blue Sky laws of such
jurisdictions as the Initial Purchaser may designate and will file such consents
to service of process or other documents necessary or appropriate in order to
effect such qualification; provided, that in no event shall the Company be
obligated to qualify to do business in any jurisdiction where it is not now so
qualified or to take any action that would subject it to service of process in
suits, other than those arising out of the offering or sale of the Shares, in
any jurisdiction where it is not now so subject.
(f) For a period of 120 days from the Closing Date, the
Company agrees not to, directly or indirectly, sell, offer to sell, contract to
sell, grant any option to purchase, issue any instrument convertible into or
exchangeable for, or otherwise transfer or dispose of (or enter into any
transaction or device that is designed to, or could be expected to, result in
the disposition in the future of), any securities of the Company or any of its
subsidiaries, except with the prior written consent of Xxxxxx Brothers Inc;
provided, however, that (i) the Company may grant up to 400,000 options to
purchase Common Stock and 407,500 restricted shares of Common Stock pursuant to
the Company's 2003 Equity Incentive Plan as provided in "Management-2003 Equity
Incentive Plan" in the Offering Memorandum, (ii) the Company may issue preferred
stock to the extent necessary to comply with rules regarding qualification as a
REIT, (iii) the Company may issue shares of Common Stock in connection with its
initial public offering of
13
Common Stock pursuant to an effective registration statement filed with the
Commission and (iv) solely with respect to the special purpose entities which
are wholly owned subsidiaries of the Company, the Company may cause such special
purpose entities to issue securities in securitization transactions of the types
described in the Offering Memorandum that are in the ordinary course of
business.
(g) The Company will furnish to the holders of the Shares as
soon as practicable after the end of each fiscal year an annual report
(including a balance sheet and statements of income, stockholders' equity and
cash flows of the Company and its consolidated subsidiaries certified by
independent public accountants) and, as soon as practicable after the end of
each of the first three quarters of each fiscal year (beginning with the fiscal
quarter ending March 31, 2004), will make available to its securityholders
consolidated summary financial information of the Company and its subsidiaries
for such quarter in reasonable detail.
(h) So long as any of the Shares are outstanding, the Company
will furnish to the Initial Purchaser (i) as soon as available, a copy of each
report of the Company mailed to stockholders generally or filed with any stock
exchange or, in the case of those reports that relate to matters that are
material to the Company, submitted to any regulatory body and (ii) from time to
time such other information concerning the Company as the Initial Purchaser may
reasonably request.
(i) The Company will apply the net proceeds from the sale of
the Shares to be sold by it hereunder substantially in accordance with the
description set forth in the Offering Memorandum under the caption "Use of
Proceeds."
(j) Except as stated in this Agreement and in the Preliminary
Offering Memorandum and Offering Memorandum, neither the Company nor any of its
affiliates has taken, nor will any of them take, directly or indirectly, any
action designed to or that might reasonably be expected to cause or result in
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Shares. Except as permitted by the Act, the
Company will not distribute any offering material in connection with the Exempt
Resales.
(k) The Company will use its best efforts to permit the Shares
to be designated Private Offerings, Resales and Trading through Automated
Linkages (PORTAL) Market(SM) (the "PORTAL Market(SM)") securities in accordance
with the rules and regulations adopted by the National Association of Securities
Dealers, Inc. relating to trading in the PORTAL Market(SM) and to permit the
Shares to be eligible for clearance and settlement through DTC.
(l) During the period of two years after the Closing Date, the
Company will not, and will not permit any of its "affiliates" (as defined in
Rule 144 under the Act), to, resell any of the Shares that constitute
"restricted securities" under Rule 144 that have been reacquired by any of them.
(m) The Company agrees not to sell, offer for sale or solicit
offers to buy or otherwise negotiate in respect of any security (as defined in
the Act) that would be integrated
14
with the sale of the Shares in a manner that would require the registration
under the Act of the sale to the Initial Purchaser or the Eligible Purchasers of
the Shares. The Company will take reasonable precautions designed to insure that
any offer or sale, direct or indirect, in the United States or to any U.S.
person (as defined in Rule 902 under the Act), of any Shares or any
substantially similar security issued by the Company, within six months
subsequent to the date on which the distribution of the Shares has been
completed (as notified to the Company by the Initial Purchaser), is made under
restrictions and other circumstances reasonably designed not to affect the
status of the offer and sale of the Shares in the United States and to U.S.
persons contemplated by this Agreement as transactions exempt from the
registration provisions of the Act; including any sales pursuant to Rule 144A
under, or Regulations D or S of, the Act.
(n) The Company agrees to comply with all the terms and
conditions of the Registration Rights Agreement and all agreements set forth in
the representation letter of the Company to DTC relating to the approval of the
Shares by DTC for "book entry" transfer.
(o) The Company will take such steps as shall be necessary to
ensure that neither the Company nor any of the Company's subsidiaries becomes an
"investment company" within the meaning of such term under the Investment
Company Act.
(p) The Company will do and perform all things required or
necessary to be done and performed under this Agreement by it prior to the
Closing Date, and to satisfy all conditions precedent to the Initial Purchaser's
obligations hereunder to purchase the Shares.
(q) For the benefit of the holders and beneficial owners from
time to time of the Shares, the Company shall furnish, at its expense, upon
request by the holders and beneficial owners of the Shares and prospective
purchasers of the Shares, information specified in and satisfying the
requirements of subsection (d)(4) of Rule 144A of the Act unless the Company is
then subject to Section 13 or 15(d) of the Exchange Act.
(r) The Company shall execute and file with the Commission and
with such state securities authorities as the Initial Purchaser or its counsel
shall request, within the time periods requested by the Initial Purchaser or its
counsel, but in no event later than 15 days from the first sale of Shares,
copies of a notice on Form D under the Act; shall otherwise comply with the
requirements of Rule 503 under the Act; and shall furnish promptly to the
Initial Purchaser evidence of each such required timely filing (including a copy
thereof).
(s) As of and at all times subsequent to the Closing Date, the
Company and each of its subsidiaries shall be insured in such amounts and with
such deductibles and covering such risks as are generally deemed adequate,
customary and commercially reasonable for their businesses including, but not
limited to, policies covering the assets owned or leased, by the Company or any
of its subsidiaries, as the case may be, against theft, damage, destruction, and
acts of vandalism.
(t) The Company shall operate and conduct its business so as
to qualify as a REIT in accordance with the requirement of the Code and shall
elect to be taxed as a REIT beginning with its tax year ending December 31,
2003. The Company shall not thereafter revoke
15
its REIT election nor conduct its business and operations so as to fail to
qualify as a REIT under the Code, except as provided in the certificate of
incorporation of the Company.
6. 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 (including, without limitation, the
reasonable fees and disbursements of your legal counsel) incident to and in
connection with: (i) the preparation, printing, filing and distribution of the
Preliminary Offering Memorandum and the 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 Rights
Agreement, all Blue Sky memoranda and all other agreements, memoranda,
correspondence and other documents printed and delivered in connection therewith
and with the Exempt Resales; (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 Preliminary Offering
Memorandum and the Offering Memorandum, and all amendments and supplements
thereto, as may be reasonably requested for use in connection with the Exempt
Resales; (vi) the preparation of certificates for the Shares (including, without
limitation, printing and engraving thereof); (vii) the application for quotation
of the Shares in the PORTAL Market(SM) (including all disbursements and listing
fees); (viii) the approval of the Shares by DTC for "book-entry" transfer
(including fees and expenses of counsel); (ix) the performance by the Company of
its other obligations under this Agreement; and (x) all travel expenses
(including expenses related to chartered aircraft) of the Initial Purchaser and
the Company's officers and employees and any other expenses of the Initial
Purchaser and the Company in connection with attending or hosting meetings with
prospective purchasers of the Shares.
7. Conditions to Initial Purchaser's Obligations. The obligations of
the Initial Purchaser hereunder are subject to the accuracy, when made and on
and as of the Closing Date, of the representations and warranties of the Company
contained herein, to the performance by the Company of its obligations
hereunder, and to each of the following additional terms and conditions:
(a) The Initial Purchaser shall not have discovered and
disclosed to the Company on or prior to the Closing Date that the Offering
Memorandum or any amendment or supplement thereto contains an untrue statement
of a fact that, in the opinion of Xxxxxxx Procter LLP, is material or omits to
state a fact that, 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 Rights Agreement 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
Initial Purchaser, and the Company shall have furnished to such counsel all
16
documents and information that they may reasonably request to enable them to
pass upon such matters.
(c) Jaffe, Raitt, Heuer & Xxxxx, P.C. shall have furnished to
the Initial Purchaser its written opinion (based on assumptions and subject to
the exclusions contained therein), as counsel to the Company, addressed to the
Initial Purchaser and dated the Closing Date, in the form attached hereto as
Exhibit C.
(d) XxXxxxx Xxxxxxx Xxxxx & Xxxxxxxx, P.C. and XxXxxxxxxx
Xxxxxxxx shall each have furnished to the Initial Purchaser its written opinion
(based on assumptions and subject to the exclusions contained therein), as
counsel to the Company, addressed to the Initial Purchaser and dated the Closing
Date, substantially as to the matters set forth in Exhibits D-1 and D-2 hereto.
(e) The Initial Purchaser shall have received from Xxxxxxx
Procter LLP such opinion or opinions, dated the Closing Date, with respect to
the issuance and sale of the Shares, the Offering Memorandum and other related
matters as the Initial Purchaser may reasonably require, and the Company shall
have furnished to such counsel such documents and information as they reasonably
request for the purpose of enabling them to pass upon such matters.
(f) At the time of execution of this Agreement, the Initial
Purchaser shall have received from Xxxxx Xxxxxxxx LLP a letter, in form and
substance satisfactory to the Initial Purchaser, addressed to the Initial
Purchaser and dated the date of pricing of the Shares (i) confirming that they
are independent public accountants within the meaning of the Act and are in
compliance with the applicable requirements relating to the qualification of
accountants under Rule 2-01 of Regulation S-X of the Commission and (ii)
stating, as of the date hereof (or, with respect to matters involving changes or
developments since the respective dates as of which specified financial
information is given in the Offering Memorandum, as of a date not more than five
days prior to the date hereof), the conclusions and findings of such firm with
respect to the financial information and (iii) covering such other matters as
are ordinarily covered by accountants' "comfort letters" to underwriters in
connection with registered public offerings.
(g) With respect to the letter of Xxxxx Xxxxxxxx LLP referred
to in the preceding paragraph and delivered to the Initial Purchaser
concurrently with the execution of this Agreement (the "initial letter"), the
Company shall have furnished to the Initial Purchaser a letter (the "bring-down
letter") of such accountants, addressed to the Initial Purchaser and dated the
Closing Date (i) confirming that they are independent public accountants within
the meaning of the Act and are in compliance with the applicable requirements
relating to the qualification of accountants under Rule 2-01 of Regulation S-X
of the Commission, (ii) stating, as of the Closing Date (or, with respect to
matters involving changes or developments since the respective dates as of which
specified financial information is given in the Offering Memorandum, as of a
date not more than five days prior to the date of the Closing Date), the
conclusions and findings of such firm with respect to the financial information
and other matters covered by the initial letter and (iii) confirming in all
material respects the conclusions and findings set forth in the initial letter.
(h) 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
17
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 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 your judgment, 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 Date on the
terms and in the manner contemplated in the Offering Memorandum.
(i) The Company shall have furnished or caused to be furnished
to the Initial Purchaser on the Closing Date certificates of officers of the
Company satisfactory to the Initial Purchaser as to the accuracy of the
representations and warranties of the Company herein at and as of the Closing
Date, 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 Initial Purchaser may reasonably request.
(j) The Shares shall have been approved by DTC for "book
entry" transfer and designated for trading on the PORTAL Market(SM).
(k) The Company shall have executed and delivered: (i) the
Registration Rights Agreement, and (ii) the Contribution Agreement by and among
the Company, Origen Financial L.L.C., SOE, LLC, Xxxxxxxx Holding, LLC, Xxxxxxxx
Family, LLC and Xxxxxxx Financial Services Corporation (the "Contribution
Agreement"), and the Initial Purchaser shall have received an original copy of
each of the foregoing, duly executed by the Company and each other party
thereto.
(l) The Company shall have delivered executed lock-up
agreements, substantially in the form attached hereto as Exhibit E, from each of
the following persons and entities: (i) each officer of the Company, (ii) each
director of the Company and (iii) each purchaser listed on Exhibit A to the
Concurrent Private Placement Agreement by and among the Company and each of the
purchasers named therein (the "Concurrent Private Placement Agreement").
(m) Subsequent to the execution and delivery of this Agreement
there shall not have occurred any of the following: (i) trading in securities
generally on the New York Stock Exchange, the Nasdaq National Market or the
American Stock Exchange or in the over-the-counter market, or trading in any
securities of the Company on any exchange or in the over-the-counter market, has
been suspended or minimum prices shall have been established on any such
exchange or such market by the Commission, by such exchange or by any other
regulatory body or governmental authority having jurisdiction; (ii) a material
disruption in securities settlement, payment or clearance services in the United
States; (iii) a banking moratorium has been declared by Federal or state
authorities; (iv) any attack on, outbreak or escalation of hostilities or act of
terrorism involving the United States, any declaration of war by Congress or any
other national
18
or international calamity, crisis or emergency if, in the judgment of the
Initial Purchaser, the effect of any such attack, outbreak, escalation, act,
declaration, calamity, crisis or emergency makes it impractical or inadvisable
to proceed with completion of the offering or sale of and payment for the
Shares; or (v) the occurrence of any other calamity, crisis (including without
limitation as a result of terrorist activities), or material adverse change in
general economic, political or financial conditions (or the effect of
international conditions on the financial markets in the United States shall be
such) as to make it, in the judgment of the Initial Purchaser, impracticable or
inadvisable to proceed with offering or delivery of the Shares being delivered
on the Closing Date or that, in the judgment of the Initial Purchaser, would
materially and adversely affect the financial markets or the market for the
Shares.
All opinions, letters, evidence and certificates mentioned
above or elsewhere in this Agreement shall be deemed to be in compliance with
the provisions hereof only if they are in form and substance reasonably
satisfactory to counsel for the Initial Purchaser.
8. Indemnification and Contribution.
(a) The Company hereby agrees to indemnify and hold harmless
the Initial Purchaser, its directors, officers and employees and each person, if
any, who controls the Initial 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
Initial 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 (A) in any Preliminary Offering Memorandum or the Offering Memorandum
or in any amendment or supplement thereto, (B) in any Blue Sky application or
other document prepared or executed by the Company (or based upon any written
information furnished by the Company) specifically for the purpose of qualifying
any or all of the Shares under the securities laws of any state or other
jurisdiction (any such application, document or information being hereinafter
called a "Blue Sky Application") or (C) in any materials or information provided
to investors by, or with the approval of, the Company in connection with the
marketing of the offering of the Shares ("Marketing Materials"), including any
roadshow or investor presentations made to investors by the Company (whether in
person or electronically), (ii) the omission or alleged omission to state in any
Preliminary Offering Memorandum or the Offering Memorandum, or in any amendment
or supplement thereto, or in any Blue Sky Application or in any Marketing
Materials, 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 act or failure to act or any alleged act or
failure to act by the Initial Purchaser in connection with, or relating in any
manner to, the Shares or the offering contemplated hereby, and that is included
as part of or referred to in any loss, claim, damage, liability or action
arising out of or based upon matters covered by clause (i) or (ii) above
(provided that the Company shall not be liable under this clause (iii) to the
extent that it is determined in a final judgment by a court of competent
jurisdiction that such loss, claim, damage, liability or action resulted
directly from any such acts or failures to act undertaken or omitted to be taken
by the Initial Purchaser through its gross negligence or willful misconduct),
(iv) any inaccuracy in the representations
19
and warranties of the Company contained in this Agreement; (v) any failure of
the Company to perform its obligations hereunder; or (vi) any claim or action
for rescission under the Act or any international, federal or state securities
laws to which the Initial Purchaser or any such director, officer, employee or
controlling person may become subject under the Act, the Exchange Act or other
international, federal or state statutory law or regulation or at common law or
otherwise in connection with the transactions contemplated hereby; and the
Company shall reimburse the Initial Purchaser and its directors, officers,
employees or controlling persons upon demand for any legal or other expenses
incurred by the Initial Purchaser 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; provided, however, that the Company shall
not be liable in any such case to the extent that any such loss, claim, damage,
liability or action arises out of, or is based upon, any untrue statement or
alleged untrue statement or omission or alleged omission made in any Preliminary
Offering Memorandum or Offering Memorandum, or in any such amendment or
supplement thereto, or in any Blue Sky Application or in any Marketing
Materials, in reliance upon and in conformity with written information
concerning the Initial Purchaser furnished to the Company through the Initial
Purchaser by or on behalf of the Initial Purchaser specifically for inclusion
therein. The foregoing indemnity agreement is in addition to any liability that
the Company may otherwise have to the Initial Purchaser or to any director,
officer, employee or controlling person of the Initial Purchaser.
(b) The Initial 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,
(i) any untrue statement or alleged untrue statement of a material fact
contained (A) in any Preliminary Offering Memorandum or the Offering Memorandum
or in any amendment or supplement thereto, (B) in any Blue Sky Application, or
(C) in any Marketing Materials or (ii) the omission or alleged omission to state
in any Preliminary Offering Memorandum or the Offering Memorandum, or in any
amendment or supplement thereto, or in any Blue Sky Application or in any
Marketing Materials 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, but in each case only to the extent that
the untrue statement or alleged untrue statement or omission or alleged omission
was made in reliance upon and in conformity with written information concerning
the Initial Purchaser furnished to the Company by or on behalf of the Initial
Purchaser specifically for inclusion therein, and the Initial Purchaser shall
reimburse the Company and any such director, officer, employee or controlling
person for any legal or other expenses reasonably incurred by the Company or any
such director, officer, employee or controlling person in connection with
investigating or defending or preparing to defend against any such loss, claim,
damage, liability or action as such expenses are incurred. The foregoing
indemnity agreement is in addition to any liability that the Initial Purchaser
may otherwise have to the Company or any such director, officer, employee or
controlling person.
(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
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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 the Initial Purchaser
shall have the right to employ counsel to represent jointly the Initial
Purchaser and its 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 the Initial Purchaser against the Company under this Section 8
if the Initial 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 the Initial Purchaser
and those directors, officers, employees and controlling persons to be jointly
represented by one separate counsel, and in that event the fees and expenses of
such separate counsel shall be paid by the Company. 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.
(d) If the indemnification provided for in this Section 8
shall for any reason be unavailable to or insufficient to hold harmless an
indemnified party under Section 8(a) or 8(b) in respect of any loss, claim,
damage or liability, or any action in respect thereof, referred to therein, then
each indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a result
of such loss, claim, damage or liability, or action in respect thereof, (i) in
such proportion as shall be appropriate to reflect the relative benefits
received by the Company on the one hand and the Initial Purchaser on the other
from the offering of the Shares or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Company, on the one hand, and the Initial
Purchaser on the other with respect to the acts, statements or omissions that
resulted in such loss, claim, damage or liability, or action in respect
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thereof, as well as any other relevant equitable considerations. The relative
benefits received by the Company, on the one hand, and the Initial Purchaser on
the other with respect to such offering shall be deemed to be in the same
proportion as the total net proceeds from the offering of the Shares purchased
under this Agreement (before deducting expenses) received by the Company on the
one hand, and the total discounts and commissions received by the Initial
Purchaser with respect to the Shares purchased under this Agreement, on the
other hand, bear to the total gross proceeds from the offering of the Shares
under this Agreement as set forth on the cover page of the Offering Memorandum.
The 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
Initial Purchaser, 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 Initial Purchaser agree that it would not be just
and equitable if contributions pursuant to this Section 8(d) were to be
determined by pro rata allocation or by any other method of allocation that 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,
damage or liability, or action in respect thereof, referred to above in this
Section 8(d) shall be deemed to include, for purposes of this Section 8(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 provisions of this Section 8(d), the Initial Purchaser shall
not be required to contribute any amount in excess of the difference between the
amount the Initial Purchaser received in connection with sales of the Shares to
Eligible Purchasers and the amount the Initial Purchaser paid to the Company for
such Shares. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
(e) The Initial Purchaser confirms and the Company
acknowledges that the statements with respect to the offering of the Shares by
the Initial Purchaser set forth in the section entitled "Plan of Distribution"
in the Offering Memorandum are correct and constitute the only information
concerning such Initial Purchaser furnished in writing to the Company by or on
behalf of the Initial Purchaser specifically for inclusion in the Offering
Memorandum.
(f) The Company hereby acknowledges and agrees that any and
all claims for indemnification or contribution payment that are brought against
the Company by any party to the Contribution Agreement (other than Xxxxxxxx
Holding, LLC with respect to those shares of Common Stock purchased under the
Concurrent Private Placement Agreement) will be subordinated in right of payment
to those claims for indemnification or contribution payment in connection with
the offering contemplated hereby that are brought against the Company by a
person who purchased Shares from the Initial Purchaser.
9. Termination. The obligations of the Initial Purchaser hereunder may
be terminated by the Initial Purchaser by notice given to and received by the
Company prior to delivery of and payment for the Shares if, prior to that time,
any of the events described in Section 7(m) shall have occurred or if the
Initial Purchaser shall decline to purchase the Shares for any reason permitted
under this Agreement.
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10. Reimbursement of Initial Purchaser's Expenses. If the Company fails
to tender the Shares for delivery to the Initial Purchaser 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 Initial Purchaser for all reasonable
out-of-pocket expenses (including fees and disbursements of counsel) incurred by
the Initial Purchaser 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 Initial Purchaser.
11. Notices, etc. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the Initial Purchaser, shall be delivered or sent by
hand delivery, mail, telex, overnight courier or facsimile transmission to
Xxxxxx Brothers Inc., 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Syndicate Department (Fax: (000) 000-0000), with a copy to Xxxxxxx Procter LLP,
Exchange Place, Boston, MA 02109, Attention: Xxxxxxx X. Xxxxx, P.C. (Fax: (617)
000-0000), and with a copy, in the case of any notice pursuant to Section 8(c),
to the Director of Litigation, Office of the General Counsel, Xxxxxx Brothers
Inc., 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Fax: (000) 000-0000;
(b) if to the Company, shall be delivered or sent by mail,
telex, overnight courier or facsimile transmission to Origen Financial, Inc.,
00000 Xxxxxxxx Xxxx, Xxxxx 0000, Xxxxxxxxxx, XX 00000, Attention: Xxxxxx
Xxxxxxxx (Fax: (000) 000-0000), with a copy to Jaffe, Raitt, Heuer & Xxxxx,
P.C., Xxx Xxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, XX 00000, Attention: Xxxxxx
Xxxxx (Fax: (000) 000-0000);
Any such statements, requests, notices or agreements shall
take effect at the time delivered by hand, if personally delivered; 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.
12. Persons Entitled to Benefit of Agreement. This Agreement shall
inure to the benefit of and be binding upon the Initial 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 (a) the
representations, warranties, indemnities and agreements of the Company contained
in this Agreement shall also be deemed to be for the benefit of directors of the
Initial Purchaser, officers of the Initial Purchaser and any person or persons
controlling the Initial Purchaser within the meaning of Section 15 of the Act
and (b) the indemnity agreement of the Initial Purchaser contained in Section
8(b) of this Agreement shall be deemed to be for the benefit of directors of the
Company, officers of the Company and any person controlling the Company 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 12, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision contained herein.
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13. Survival. The respective indemnities, representations, warranties
and agreements of the Company and the Initial Purchaser contained in this
Agreement or made by or on behalf on them, respectively, pursuant to this
Agreement, shall survive the delivery of and payment for the Shares and shall
remain in full force and effect, regardless of any investigation made by or on
behalf of any of them or any person controlling any of them.
14. Definition of the Terms "Business Day" and "Subsidiary." For
purposes of this Agreement, (a) "business day" means any day on which the New
York Stock Exchange, Inc. is open for trading and (b) "subsidiary" has the
meaning set forth in Rule 405 of the Rules and Regulations and with respect to
the Company shall include, without limitation, Origen Securitization Company,
L.L.C.
15. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF NEW YORK.
16. Counterparts. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
17. Interpretation. In this Agreement references to "persons" shall
include legal entities as well as natural persons, references importing the
singular shall include the plural (and vice versa), use of the masculine pronoun
shall include the feminine and numbered schedules, exhibits, sections or
Sections shall (unless the contrary intention appears) be construed as
references to such schedules and exhibits hereto and sections or Sections herein
bearing those numbers. The schedules and exhibits hereto are hereby incorporated
herein by reference. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
[Signature Pages to Follow]
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If the foregoing correctly sets forth the agreement between
the Company and the Initial Purchaser, please indicate your acceptance in the
space provided for that purpose below.
Very truly yours,
ORIGEN FINANCIAL, INC.
By /s/ Xxxxxx Xxxxx
---------------------------------------
Name: Xxxxxx Xxxxx
Title: CEO
Accepted:
XXXXXX BROTHERS INC.
By /s/ Xxxxx Xxxxxxxx
----------------------------------
Name: Xxxxx Xxxxxxxx
Title: Managing Director
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