EXHIBIT 10.4
1,000,000 SHARES OF COMMON STOCK
OF
ORIGEN FINANCIAL, INC.
PRIVATE PLACEMENT AGREEMENT
DATED FEBRUARY 4, 2004
THIS AGREEMENT is made as of February 4, 2004 among Origen Financial,
Inc., a Delaware corporation (the "Company"), and DB Structured Finance
Americas, LLC, a Delaware limited liability company (the "Purchaser").
R E C I T A L S:
WHEREAS, the Company completed an offering (the "First 144A Offering")
of shares of its common stock, $.01 par value per share ("Common Stock"), to
certain "qualified institutional buyers" as defined in Rule 144A promulgated
under the Securities Act of 1933 (the "Securities Act" or the "Act") on October
8, 2003, and
WHEREAS, the Company desires to sell to the Purchaser and the Purchaser
desires to purchase from the Company in a new offering (the "Second 144A
Offering") an aggregate of 1,000,000 shares (the "Shares") of Common Stock of
the Company, for a purchase price per share equal to the price per share to the
investors in the First 144A Offering upon the terms and conditions hereinafter
set forth.
NOW, THEREFORE, the parties hereto agree as follows:
1. Purchase and Sale of Shares. The Purchaser hereby agrees to purchase
from the Company and the Company hereby agrees to issue and sell the Shares to
Purchaser at a purchase price of $10.00 per share, at the Closing as defined in
Section 2.C. below.
2. Matters Relating to the Purchased Stock.
A. Sale of Shares. The Shares will be offered and sold to the
Purchaser without registration under the Act, in reliance on an exemption
pursuant to Section 4(2) under the Act and Rule 506 of Regulation D promulgated
thereunder. The Company has prepared an offering memorandum, dated October 7,
2003, and as supplemented by a letter from Xxxxxx Xxxxx to the Investors dated
December 22, 2003 (together, referred to as the "Offering Memorandum"), setting
forth information regarding the Company and the Shares. Any references herein to
the Offering Memorandum shall be deemed to include all documents incorporated by
reference therein and all amendments and supplements thereto. Subject to the
provisions of Section 5(WW) below, the Purchaser hereby acknowledges and agrees
that the Offering Memorandum speaks only as of the date thereof and that the
information contained therein may not be correct as of any time subsequent to
that date.
B. Authorization. On or before the Closing, the Company will
have authorized the issuance and sale to the Purchaser of the Shares.
C. Purchase and Sale. At the Closing, the Company shall sell
to the Purchaser and, subject to the terms and conditions set forth herein, the
Purchaser shall purchase from the Company the Shares for an aggregate purchase
price of $10,000,000.
D. Closing. The closing of the purchase and sale of the Shares
(the "Closing") will take place at the offices of Jaffe, Raitt, Heuer & Xxxxx,
Professional Corporation, Xxx Xxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx, on
February 4, 2004 or at such other place or on such other date as may be mutually
agreeable to the Company and the Purchaser. At
the Closing, the Company will deliver to the Purchaser a stock certificate
evidencing the Shares, registered in the Purchaser's or its nominee's name, upon
payment of the purchase price thereof by a cashier's or certified check, or by
wire transfer of immediately available funds to the Company's account per the
Company's instructions.
3. Conditions of Purchaser's Obligation at the Closing. The obligation
of the Purchaser to purchase and pay for the Shares at the Closing is subject to
the satisfaction as of the Closing of the following conditions:
A. The Purchaser shall not have discovered and disclosed to
the Company on the Closing that the Offering Memorandum or any amendment or
supplement thereto contains an untrue statement of a fact that, in the opinion
of its counsel, is material or omits to state a fact that and, in the opinion of
such counsel, is material and is required to be stated therein or is necessary
to make the statements therein not misleading.
B. All corporate proceedings and other legal matters incident
to the authorization, form and validity of this Agreement, the Shares, the
Registration Rights Agreement dated as of the date hereof between the Company
and the Purchaser (the "Registration 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 Purchaser, and the Company shall have furnished to such counsel
all documents and information that they may reasonably request to enable them to
pass upon such matters.
C. Neither the Company nor any of its subsidiaries shall have
sustained, since the date of the latest audited financial statements included in
the Offering Memorandum, any material loss or interference with its business
from fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action, order or
decree, otherwise than as set forth or contemplated in the Offering Memorandum;
and, since such date, there shall not have been any change in the stockholders'
equity or in the long-term debt of the Company or any of its subsidiaries
(except for an additional securitization under the securitization arrangement
with Citigroup Global Markets Realty Corp. on or about November 1, 2003 and
except the 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 (the "Credit Agreement")), or
material adverse change, in or affecting the management, condition, financial or
otherwise, stockholders' equity, results of operations, business or prospects of
the Company and its subsidiaries, taken as a whole or any development involving
a prospective adverse change that is, in the judgment of the Purchaser,
sufficiently material and adverse as to make it impracticable or inadvisable to
proceed with the offering and delivery of the Shares being delivered on the
Closing on the terms and in the manner contemplated hereby.
D. The Company shall have furnished or caused to be furnished
to the Purchaser on the Closing certificates of officers of the Company
satisfactory to the Purchaser as to the accuracy of the representations and
warranties of the Company herein at and as of the Closing, as to the performance
by the Company of all of its obligations hereunder to be
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performed at or prior to the Closing Date and as to such other matters as the
Purchaser may reasonably request.
E. The Company shall have executed and delivered to the
Purchaser the Registration Agreement.
F. The Company shall have delivered to the Purchaser all of
the following documents:
(i) an officer's certificate, dated the date of the
Closing, signed by the chairman, chief executive officer, president or
vice president of the Company, stating that the conditions specified in
Sections 3(A) through 3(E), inclusive, have been fully satisfied;
(ii) copies of the resolutions duly adopted by the
Company's board of directors authorizing the execution, delivery, and
performance of this Agreement, and the issuance and sale of the Shares;
(iii) copies of the Company's Second Amended and
Restated Certificate of Incorporation, as amended, and the Company's
bylaws, each as in effect at the Closing;
(iv) copies of all material third party and
governmental consents, approvals, and filings obtained in connection
with the transactions hereunder (including, without limitation, all
blue sky law filings and waivers of all preemptive rights and rights of
first refusal), if any; and
(v) copies of the Offering Memorandum.
G. All corporate and other proceedings taken or required to be
taken in connection with the transactions contemplated hereby to be consummated
at or prior to the Closing and all documents incident thereto shall be
satisfactory in form and substance to counsel to the Purchaser.
H. The Purchaser shall have received from Jaffe, Raitt, Heuer
& Xxxxx, Professional Corporation, counsel for the Company, an executed copy of
its opinion to the Purchaser, dated the date of the Closing, in the form
attached hereto as Exhibit A.
4. Conditions of the Company's Obligation at the Closing. The
obligation of the Company to deliver the Shares against payment therefore at the
Closing is subject to the satisfaction as of the Closing of the following
conditions:
A. The Purchaser shall have furnished to the Company at the
Closing certificates satisfactory to the Company as to the accuracy of the
representations and warranties of the Purchaser herein at and as of the Closing,
as to the performance by the Purchaser of all of its obligations hereunder to be
performed at or prior to the Closing and as to such other matters as the Company
may reasonably request.
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B. The Purchaser shall have executed and delivered the
Registration Agreement.
C. The Purchaser shall have delivered the purchase price for
the Shares.
5. Representations and Warranties of the Company. As a material
inducement to the Purchaser to enter into this Agreement and purchase the
Shares, the Company hereby represents and warrants that:
A. No form of general solicitation or general advertising
within the meaning of Regulation D (including, but not limited to,
advertisements, articles, notices or other communications published in any
newspaper, magazine or similar medium or broadcast over television or radio, or
any seminar or meeting whose attendees have been invited by any general
solicitation or general advertising) was used by the Company, any of its agents,
affiliates or representatives or any other person acting on its behalf in
connection with the offer and sale of the Shares or the shares of Common Stock
in the First 144A Offering.
B. No form of general solicitation or general advertising was
used by the Company, any of its agents, affiliates or representatives or any
other person acting on its behalf with respect to shares of Common Stock sold
outside the United States to non-U.S. persons (as defined in Rule 902 under the
Act), by means of any directed selling efforts within the meaning of Rule 902
under the Act, and the Company, any affiliate of the Company and any person
acting on its or their behalf has complied with and will implement the "offering
restrictions" required by Rule 902.
C. Set forth on Schedule 5(C) hereto is a list of each
employee pension or benefit plan with respect to which the Company or any person
considered an affiliate of the Company (within the meaning of Section 407(d)(7)
of the Employee Retirement Income Security Act of 1974, as amended, including
the regulations and published interpretations thereunder ("ERISA")) is a party
in interest or disqualified person.
D. The Company is an "operating company" as defined in the
"plan assets" regulation (29 C.F.R.ss.2510.3-101) promulgated by the U.S.
Department of Labor under ERISA.
E. The Company does not provide services to any (i) "employee
benefit plan" (as defined in Section 3(3) of ERISA) that is subject to the
provisions of Title I of ERISA, (ii) plan described in Section 4975(e)(1) of the
Internal Revenue Code of 1986, as amended, including the regulations and
published interpretations thereunder (the "Code"), or (iii) entity whose
underlying assets include "plan assets" by reason of an employee benefit plan's
or other plan's investment in such entity, including entities such as collective
investment funds and insurance company separate accounts whose underlying assets
include assets of such plans.
F. The Company and each of its subsidiaries is in compliance
in all material respects with all presently applicable provisions of ERISA; no
"reportable event" (as defined in ERISA) has occurred with respect to any
"pension plan" (as defined in ERISA) for which the Company would have any
liability; the Company and each of its subsidiaries has not incurred and does
not expect to incur liability under (i) Title IV of ERISA with respect to
termination of, or withdrawal from, any "pension plan" or (ii) Sections 412 or
4971 of the Code; and each
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"pension plan" for which the Company or any of its subsidiaries would have any
liability that is intended to be qualified under Section 401(a) of the Code is
so qualified in all material respects and nothing has occurred, whether by
action or by failure to act, which would cause the loss of such qualification.
G. No order or decree preventing the use of the Offering
Memorandum, or any order asserting that the transactions contemplated by this
Agreement are subject to the registration requirements of the Act has been
issued and no proceeding for that purpose has commenced or is pending, or to the
knowledge of the Company, is contemplated.
H. The Offering Memorandum as of the Closing, will not contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements made
therein, in light of the circumstances under which they were made, not
misleading, except that this representation and warranty does not apply to
statements in or omissions from the Offering Memorandum made in reliance upon
and in conformity with information relating to the Purchaser furnished to the
Company in writing by or on behalf of the Purchaser expressly for use therein.
I. The market-related and customer-related data and estimates
in the Offering Memorandum are based on or derived from sources that the Company
believes to be reliable and accurate.
J. The Company and each of its subsidiaries have been duly
incorporated or formed and are validly existing as corporations or limited
liability companies in good standing under the laws of their respective
jurisdictions of incorporation or formation, are duly qualified to do business
and are in good standing as foreign corporations or limited liability companies
in each jurisdiction in which their respective ownership or lease of property or
the conduct of their respective businesses requires such qualification (except
such failures to qualify as are not, either individually or in the aggregate,
material to the Company and its subsidiaries taken as a whole), and have all
power and authority necessary to own or hold their respective properties and to
conduct the businesses in which they are engaged; and none of the subsidiaries
of the Company (other than Origen Financial L.L.C.) is a "significant
subsidiary," as such term is defined in Rule 405 of the rules and regulations
promulgated under the Act (the "Rules and Regulations").
K. The Company has an authorized capitalization as set forth
in the Offering Memorandum, and all of the issued shares of capital stock of the
Company have been duly authorized and validly issued and are fully paid and
non-assessable; and all of the issued equity securities of each subsidiary of
the Company have been duly and validly authorized and issued and are fully paid
and non-assessable and except as set forth in the Offering Memorandum are owned
directly or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims.
L. The Company has all requisite corporate power and authority
to issue and sell the Shares. The Shares have been duly authorized by the
Company and, upon issuance thereof, will be validly issued, fully paid and
non-assessable.
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M. The Shares will conform to the description thereof in the
Offering Memorandum.
N. The Company has all requisite corporate power and authority
to enter into the Registration Statement. The Registration Agreement has been
duly authorized by the Company and when executed and delivered by the Company in
accordance with the terms thereof, and is the legally valid and binding
obligation of the Company in accordance with the terms thereof, will be validly
executed and delivered and will be the legally valid and binding obligation of
the Company in accordance wit the terms thereof, enforceable against the Company
in accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium and other similar laws
relating to or affecting creditor's rights generally, or by general equitable
principles.
O. [Intentionally Omitted]
P. The Company has all requisite corporate power and authority
to enter into this Agreement. This Agreement has been duly authorized, executed
and delivered by the Company.
Q. The issue and sale of the Shares and the compliance by the
Company with all of the provisions of the Registration Agreement and this
Agreement and the consummation of the transactions contemplated hereby and
thereby (i) will not conflict with or result in a breach or violation of any of
the terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement, lease or other agreement or instrument
to which the Company or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries is bound or to which any of the property or
assets of the Company or any of its subsidiaries is subject, (ii) will not
result in any violation of the provisions of the charter or by-laws of the
Company or any of its subsidiary's formation documents or (iii) will not violate
any statute or any order, rule or regulation of any court or governmental agency
or body having jurisdiction over the Company or any of its subsidiaries or any
of their properties or assets; and no consent, approval, authorization or order
of, or filing, registration or qualification with any such court or governmental
agency or body is required for the issue and sale of the Shares or the
consummation by the Company of the transactions contemplated by this Agreement
or the Registration Agreement, except for the filing of a registration statement
by the Company with the Securities and Exchange Commission (the "Commission")
pursuant to the Act as required by the Registration Agreement and such consents,
approvals, authorizations, orders, filings, registrations or qualifications as
may be required under state securities or Blue Sky laws in connection with the
purchase and distribution of the Shares by the Company and the Purchaser.
R. Other than the Registration Agreement and the Registration
Rights Agreement dated October 8, 2003 entered into in connection with the First
144A Offering, 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 Agreement or in any securities being registered pursuant to any
other registration statement filed by the Company under the Act.
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S. Except as described in the Offering Memorandum, from the
date of its incorporation, none of the Company or any other person acting on
behalf of the Company has offered or sold to any person any shares of Common
Stock, or any securities of the same or a similar class as the shares of Common
Stock, other than (A) Shares offered and sold to the Purchaser hereunder, (B)
the shares of Common Stock sold pursuant to that certain Purchase Agreement
between the Company and Xxxxxx Brothers Inc., dated October 8, 2003, and
Concurrent Private Placement Agreement between the Company and the purchasers
named therein dated October 8, 2003, (C) 182,500 restricted Shares issued under
the Company's 2003 Equity Incentive Plan (the "Incentive Plan") to executive
officers of the Company on October 8, 2003, and (D) 207,000 restricted Shares
issued under the Incentive Plan to employees of the Company on January 29, 2004.
T. Neither the Company nor any of its subsidiaries has
sustained, since the date of the latest audited financial statements included in
the Offering Memorandum, any material loss or interference with its business
from fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action, order or
decree, otherwise than as set forth or contemplated in the Offering Memorandum;
and, since such date, there has not been any change in the stockholders' equity
or in the long-term debt of the Company or any of its subsidiaries (except for
changes that are not material, either individually or in the aggregate, under
the Credit Agreement or any material adverse change, or any development
involving a prospective material adverse change, in or affecting the management,
condition, financial or otherwise, stockholders' equity, results of operations,
business or prospects of the Company and its subsidiaries, taken as a whole (a
"Material Adverse Effect") otherwise than as set forth or contemplated in the
Offering Memorandum.
U. The financial statements (including the related notes and
supporting schedules) included in the Offering Memorandum present fairly the
financial condition and results of operations of the entities purported to be
shown thereby, at the dates and for the periods indicated (except, with respect
to the unaudited financial statements, for certain normal recurring adjustments)
and have been prepared in conformity with generally accepted accounting
principles applied on a consistent basis throughout the periods.
V. Xxxxx Xxxxxxxx LLP, who have certified certain financial
statements of the Company, whose report appears in the Offering Memorandum are
independent public accountants as required by the Act and the Rules and
Regulations during the periods covered by the financial statements on which they
reported.
W. None of the Company or any of its subsidiaries owns any
real property. The Company and each of its subsidiaries has good and marketable
title to all personal property owned by them, free and clear of all liens,
encumbrances and defects except such as are described in the Offering Memorandum
and such as do not materially affect the value of the property of the Company
and its subsidiaries taken as a whole and do not materially interfere with the
use made and proposed to be made of such property by the Company or any of its
subsidiaries; and all real property and buildings held under lease by the
Company or any of its subsidiaries are held by them under valid, subsisting and
enforceable leases, with such exceptions as are not material and do not
interfere with the use made and proposed to be made of such property and
buildings by the Company or any of its subsidiaries.
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X. The Company and each of its subsidiaries carry, or are
covered by, insurance in such amounts and covering such risks as is adequate for
the conduct of their respective businesses and the value of their respective
properties and as is customary for companies engaged in similar businesses in
similar industries.
Y. Except as described in the Offering Memorandum, the Company
and each of its subsidiaries own or possess adequate rights to use all material
patents, trademarks, service marks, trade names, copyrights, applications and/or
registrations for any of the foregoing, and trade secrets (collectively,
"Intellectual Property Rights") and licenses to Intellectual Property Rights
necessary for the conduct of their respective businesses. Except as described in
the Offering Memorandum, the conduct of the respective businesses of the Company
and each of its subsidiaries do not and will not infringe on or conflict with,
and the Company and each of its subsidiaries have not received any notice of any
claim of infringement of or conflict with, any Intellectual Property Rights of
others. There are no pending, or, to the knowledge of the Company, threatened
claims against any of the Company or its subsidiaries alleging that any of the
intellectual property rights used or held for use by the Company or its
subsidiaries (collectively, the "Company Intellectual Property Rights") or the
operation of the business, infringes or conflicts with the rights of others
under any intellectual property rights ("Third Party Rights"). No current or
former employee or consultant of the Company or any of its subsidiaries owns any
rights in or to any of the Company Intellectual Property Rights. The Company and
each of its subsidiaries has taken all reasonable security measures to protect
the secrecy, confidentiality and value of all trade secrets owned by the Company
or the respective subsidiary or used or held for use by the Company or the
subsidiary in the respective business.
Z. Except as described in the Offering Memorandum, there are
no legal or governmental proceedings pending to which the Company or any of its
subsidiaries is a party or of which any property or assets of the Company or any
of its subsidiaries is the subject that, if determined adversely to the Company
or any of its subsidiaries, could have a Material Adverse Effect, and to the
best of the Company's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others.
AA. Except as set forth on Schedule 5(AA), there are no
contracts or other documents that would be required to be filed as exhibits to a
Company registration statement pursuant to Item 601(10) of Regulation S-K that
have not been described in the Offering Memorandum.
BB. Except for an agreement by Sun Communities, Inc. to
indemnify ACE-USA/ACE Bond Services and its affiliates ("Surety") in connection
with the issuance by Surety on behalf of the Company of bonds and undertakings
required by various state licensing authorities as a condition to the issuance
of certain licenses to the Company, 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.
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CC. No labor disturbance by the employees of the Company or
any of its subsidiaries exists or, to the knowledge of the Company or any of its
subsidiaries, is imminent that could be expected to have a Material Adverse
Effect.
DD. The Company and each of its subsidiaries has filed all
federal, state and local income and franchise tax returns required to be filed
through the date hereof and has paid all taxes due thereon, and no tax
deficiency has been determined adversely to the Company or any of its
subsidiaries that has had (nor does the Company have any knowledge of any tax
deficiency that, if determined adversely to the Company or any of its
subsidiaries, might have) a Material Adverse Effect.
EE. Since the date as of which information is given in the
Offering Memorandum through the date hereof, and except as may otherwise be
disclosed in the Offering Memorandum, neither the Company nor any of its
subsidiaries has (i) issued or granted any securities, (ii) incurred any
liability or obligation, direct or contingent, other than liabilities and
obligations that were incurred in the ordinary course of business, (iii) entered
into any transaction not in the ordinary course of business or (iv) declared or
paid any dividend on its capital stock.
FF. The Company (i) makes and keeps accurate books and records
and (ii) maintains internal accounting controls that provide reasonable
assurance that (A) transactions are executed in accordance with management's
authorization, (B) transactions are recorded as necessary to permit preparation
of its financial statements and to maintain accountability for its assets, (C)
access to its assets is permitted only in accordance with management's
authorization and (D) the reported accountability for its assets is compared
with existing assets at reasonable intervals.
GG. Except as set forth on Schedule 5(GG), neither the Company
nor any of its subsidiaries (i) is in violation of its charter or by-laws or
other formation documents, (ii) is in default in any material respect, and no
event has occurred that, with notice or lapse of time or both, would constitute
such a default, in the due performance or observance of any term, covenant,
condition or other obligation contained in any material indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which it is a
party or by which it is bound or to which any of its properties or assets is
subject, (iii) is in violation in any material respect of any law, ordinance,
governmental rule, regulation or court decree to which it or its property or
assets may be subject or has failed to obtain or maintain any material license,
permit, certificate, franchise or other governmental authorization or permit
necessary to the ownership of its property or to the conduct of its business or
(iv) violates, in any material respect, any law, ordinance, governmental rule,
regulation or court decree to which it is subject in the origination, purchase
or servicing of consumer obligations.
HH. Neither the Company nor any of its subsidiaries, nor any
director, officer, agent, employee or other person associated with or acting on
behalf of the Company or any of its subsidiaries, has used any corporate funds
for any unlawful contribution, gift, entertainment or other unlawful expense
relating to political activity; made any direct or indirect unlawful payment to
any foreign or domestic government official or employee from corporate funds;
9
violated or is in violation of any provision of the Foreign Corrupt Practices
Act of 1977; or made any bribe, rebate, payoff, influence payment, kickback or
other unlawful payment.
II. Except for such matters as would not, individually or in
the aggregate, either result in a Material Adverse Effect or require disclosure
in the Offering Memorandum, the Company and any of its subsidiaries (or, to the
knowledge of the Company or any of its subsidiaries or any of their respective
predecessors in interest) (i) are conducting and have conducted their
businesses, operations and facilities in compliance with Environmental Laws (as
defined below); (ii) possess, and are in compliance with, any and all permits,
licenses or registrations required under Environmental Laws ("Environmental
Permits"); (iii) will not require material expenditures to maintain such
compliance with Environmental Laws or their Environmental Permits or to
remediate, clean up, xxxxx or remove any Hazardous Substance (as defined below);
and (iv) are not subject to any pending or, to the best knowledge of the Company
or any of its subsidiaries, threatened claim or other legal proceeding under any
Environmental Laws against the Company or its subsidiaries, and have not been
named as a "potentially responsible party" under or pursuant to any
Environmental Laws. As used in this paragraph, "Environmental Laws" means any
and all applicable federal, state, local, and foreign laws, ordinances,
regulations and common law, or any administrative or judicial order, consent,
decree or judgment thereof, relating to pollution or the protection of human
health or the environment, including, without limitation, those related to (A)
emissions, discharges, releases or threatened releases of, or exposure to,
Hazardous Substances, (B) the generation, manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of Hazardous
Substances, or (C) the investigation, remediation or cleanup of any Hazardous
Substances. As used in this paragraph, "Hazardous Substances" means pollutants,
contaminants or hazardous, dangerous, toxic, biohazardous or infectious
substances, materials or wastes, or any other chemical substance regulated under
Environmental Laws.
JJ. None of the transactions contemplated by this Agreement
(including, without limitation, the use of the proceeds from the sale of the
Shares), will violate or result in a violation of Section 7 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), or any regulation
promulgated thereunder, including, without limitation, Regulations T, U and X of
the Board of Governors of the Federal Reserve System.
KK. The statements set forth in the Offering Memorandum
insofar as they purport to describe the provisions of the laws and documents
referred to therein, are accurate in all material respects.
LL. The minute books and records of the Company and its
subsidiaries relating to proceedings of their respective shareholders, boards of
directors, committees of their respective boards of directors, members, managers
and committees of their respective managers made available to the Purchaser, are
their original minute books and records or are true, correct and complete copies
thereof, with respect to all proceedings of said shareholders, boards of
directors, members, managers and committees since December 18, 2001 through the
date hereof. In the event that definitive minutes have not been prepared with
respect to any proceedings of such shareholders, boards of directors, members,
managers or committees, the Company has provided the Purchaser with originals or
true, correct and complete copies of draft minutes or
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written agendas relating thereto, which drafts and agendas, if any, reflect all
events that occurred in connection with such proceedings.
MM. All instruments, records, agreements and other documents
requested by the Purchaser, have been provided to, or made available for
inspection by, the Purchaser, and such documents are complete and genuine and
include all material collateral and supplemental thereto.
NN. The Company is not aware of (i) any significant deficiency
in the design or operation of internal controls which could adversely affect the
Company's ability to record, process, summarize and report financial data or any
material weaknesses in internal controls; or (ii) any fraud, whether or not
material, that involves management or other employees who have a significant
role in the Company's internal controls.
OO. There have been no significant changes in internal
controls or in other factors that could significantly affect internal controls,
including any corrective actions with regard to significant deficiencies and
material weaknesses.
PP. The Company will be organized in conformity with the
requirements for qualification as a real estate investment trust ("REIT") under
the Code and its proposed method of operation, as described in the Offering
Memorandum, will enable it to meet the requirements for taxation as a REIT under
the Code, commencing with the Company's taxable year ending December 31, 2003.
QQ. Neither the Company nor any of its subsidiaries is now,
or, after receipt of payment for the Shares and consummation of all related
transactions will be an "investment company," or an "affiliated person" of, or
"promoter" or "principal underwriter" for, an "investment company," as such
terms are defined in the Investment Company Act of 1940, as amended (the
"Investment Company Act"), or an "investment advisor,' as such term is defined
in the Investment Advisors Act of 1940, as amended, or a "broker" within the
meaning of Section 3(a)(4) of the Exchange Act or a "dealer" within the meaning
of Section 3(a)(5) of the Exchange Act or required to be registered pursuant to
Section 15(a) of the Exchange Act.
RR. All of the information supplied by the Company, whether
written or oral (and whether included in the Offering Memorandum or otherwise),
is true and accurate and complete in all material respects. In addition, except
as would not result in a Material Adverse Effect, the Company has received
written permission from each and every entity or person that has any right to
authorize or grant permission for the use of the information.
SS. The consummation of the transactions contemplated by the
Offering Memorandum did not result in a conflict of interest by or among the
Company or any of its affiliates other than has been disclosed in the Offering
Memorandum.
TT. Any certificate signed by an officer of the Company or an
officer or manger of any of its subsidiaries and delivered to the Purchaser or
to counsel for the Purchaser shall be deemed to be a representation and warranty
by the Company and its subsidiaries to the Purchaser as to the matters set forth
therein and not representations and warranties of the officers in their
individual capacities.
11
UU. Except as otherwise disclosed in the Offering Memorandum,
there are no outstanding loans or advances or guarantees of indebtedness by the
Company or any subsidiary to or for the benefit of any of the officers or
directors of the Company or any subsidiary or any of the members of the families
of any of them.
VV. The projections set forth in the Offering Memorandum under
the caption Financial Projections represent good faith estimates of the
performance of the Company for the periods stated therein based upon assumptions
which were believed in good faith to be reasonable when made and continue to be
reasonable as of the date hereof.
WW. As of the date of the Offering Memorandum, the Offering
Memorandum did not contain any untrue material fact or omit to state a material
fact required to be stated therein or which was necessary to make the statements
made therein, in light of the circumstances under which they were made, not
misleading. Except as provided on Schedule 5(WW), since the date of the Offering
Memorandum, no event has occurred or fact or circumstance exists that would make
any statement of material fact made in the Offering Memorandum untrue.
6. Miscellaneous.
A. Purchaser's Investment Representations. The Purchaser
hereby represents to the Company the following:
(i) the Purchaser is acquiring the Shares purchased
hereunder or acquired pursuant hereto for its own account with the
present intention of holding such securities for purposes of
investment, has no intention of selling such securities in a public
distribution in violation of the federal securities laws or any
applicable state securities laws, and acknowledges that until such time
as the same is no longer required under the applicable requirements of
the Act, the Shares (and all securities issued in exchange therefore or
in substitution thereof) shall bear the following legend:
"THE SHARES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE UNITED STATES SECURITIES ACT OF 1933 (THE "ACT") AND MAY
NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT
(A)(1) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A
UNDER THE ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (2) IN AN OFFSHORE
TRANSACTION COMPLYING WITH RULE 903 OR RULE 904 OF REGULATION
S UNDER THE ACT, (3) PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE ACT PROVIDED BY RULE 144 THEREUNDER (IF
AVAILABLE), (4) TO AN ACCREDITED INVESTOR IN A TRANSACTION
EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE ACT OR (5)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT
AND (B) IN ACCORDANCE
12
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."
The Purchaser further acknowledges that upon original issuance thereof,
and until such time as the Shares are no longer subject to the Registration
Agreement (and all securities issued in exchange therefore or in substitution
thereof) shall bear the following legend:
"THE SHARES EVIDENCED HEREBY ARE SUBJECT TO THE PROVISIONS OF
A REGISTRATION RIGHTS AGREEMENT, INCLUDING, WITHOUT
LIMITATION, RESTRICTIONS ON THE TRANSFER OF THE SHARES. A COPY
OF THE REGISTRATION RIGHTS AGREEMENT IS AVAILABLE AT THE
OFFICES OF THE COMPANY."
(ii) the Purchaser has the financial ability to bear
the economic risk of an investment in the Shares, has adequate means of
providing for his, her, or its current needs and personal
contingencies, has no need for liquidity in such investment and could
afford a complete loss of such investment; and
(iii) the Purchaser is an "accredited investor" as
defined in Rule 501(a) of Regulation D of the Securities Act; and
(iv) the Purchaser's overall commitment to
investments which are not readily marketable is not disproportionate to
his, her, or its net worth and his, her, or its investment in the
Company will not cause such overall commitment to become excessive; and
(v) the Purchaser has such knowledge and experience
in financial and business matters that he, she, or it is capable of
evaluating the merits and risks of his, her, or its investment in the
Shares; and
(vi) the Purchaser expressly acknowledges receipt of
the financial information contained in the Offering Memorandum and
acknowledges and agrees that the Purchaser has read and understood the
terms and conditions set forth in the financial information; and
(vii) the Purchaser has been given full opportunity
to ask questions of and to receive answers from representatives of the
Company concerning the terms and conditions of the investment and the
business of the Company and such other information
13
as he, she, or it desires in order to evaluate an investment in the
Shares, and all such questions have been answered to the full
satisfaction of the Purchaser; and
(viii) the Purchaser understands that the Shares have
not been registered under the Act or the securities laws of any state,
and are being issued in reliance upon specific exemptions from
registration thereunder, and the Purchaser agrees that the Shares may
not be sold, offered for sale, transferred, pledged, hypothecated, or
otherwise disposed of except pursuant to (i) a registration statement
with respect to such securities which is effective under the Act and
under the securities act of any relevant state, (ii) Rule 144 under the
Act, or (iii) any other exemption from registration under the Act and
under the securities act of any relevant state relating to the
disposition of securities, provided an opinion of counsel is furnished,
reasonably satisfactory in form and substance to the Company, that an
exemption from the registration requirements of the Act and such state
act is available. The Purchaser understands the legal consequences of
the foregoing to mean that he, she, or it may be required to bear the
economic risk of his, her, or its investment in the shares of the
Shares for an indefinite period or time. The Purchaser understands that
any instruments initially representing the Shares shall bear legends
restricting the transfer thereof. The Purchaser agrees not to resell or
otherwise dispose of all or any Shares acquired by the Purchaser,
except as permitted by law, including, without limitation, any and all
applicable regulations under the Act and any state law or regulations;
and
(ix) the Purchaser understands that no federal or
state agency has made any finding or determination as to the fairness
of an investment in, or any recommendation or endorsement of, the
shares of the Shares; and
(x) either (A) no part of the assets to be used by
the Purchaser to purchase the Shares constitutes assets of any
"employee benefit plan" (as defined in Section 3(3) of ERISA) that is
subject to Title I of ERISA or any "plan" (as defined in Section
4975(e)(1) of the Code) or (B) part or all of the assets to be used by
the Purchaser to purchase the Shares constitute assets of one or more
"employee benefit plans" subject to Title I of ERISA or "plans" subject
to Section 4975 of the Code and the terms and conditions of one or more
statutory or administrative exemptions from the prohibited transaction
rules of ERISA and the Code will be satisfied such that the Purchaser's
acquisition and holding of the Shares does not and will not constitute
a non-exempt prohibited transaction for purposes of ERISA and Section
4975 of the Code; and
(xi) the Shares were not offered or sold to the
Purchaser by any form of general solicitation or advertising, including
but not limited to:
(A) any advertisement, article, notice or other
communication published in any newspaper,
magazine or similar media or broadcast over
television or radio; or
(B) any seminar or meeting whose attendees were
invited by any general solicitation or
general advertising; and
14
(xii) the Purchaser acknowledges that the Company and
others will rely on the acknowledgements, representations and
warranties contained in this Agreement. The Purchaser agrees to
promptly notify the Company if any of the acknowledgements,
representations and warranties set forth herein are no longer accurate.
7. Expenses. Whether or not the transactions contemplated by this
Agreement are consummated or this Agreement becomes effective or is terminated,
the Company and Origen Financial L.L.C. each, jointly and severally, agrees to
pay all costs, expenses, fees and taxes incident to and in connection with: (i)
the preparation, printing, filing and distribution of Offering Memorandum
(including, without limitation, financial statements and exhibits) and all
amendments and supplements thereto (including the fees, disbursements and
expenses of the Company's accountants and counsel incurred in connection
therewith); (ii) the preparation, printing (including, without limitation, word
processing and duplication costs) and delivery of this Agreement, the
Registration Agreement, all Blue Sky memoranda and all other agreements,
memoranda, correspondence and other documents printed and delivered in
connection therewith; (iii) the issuance and delivery by the Company of the
Shares and any taxes payable in connection therewith; (iv) the qualification of
the Shares for offer and sale under the securities or Blue Sky laws of the
several states; (v) the furnishing of such copies of the Offering Memorandum,
and all amendments and supplements thereto; (vi) the preparation of certificates
for the Shares (including, without limitation, printing and engraving thereof);
and (vii) the performance by the Company of its other obligations under this
Agreement.
8. Indemnification.
A. The Company hereby agrees to indemnify and hold harmless
the Purchaser and, where applicable, its managers, directors, officers and
employees and each person, if any, who controls the 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 the purchase and sale of
Shares), to which the Purchaser, or any such director, officer, employee or
controlling person may become subject, under the Act, the Exchange Act, or other
international, federal or statutory law or regulation, or at common law, or
otherwise, insofar as such loss, claim, damage, liability or action arises out
of, or is based upon, (i) any untrue statement or alleged untrue statement of a
material fact contained in the Offering Memorandum or in any amendment or
supplement thereto, (ii) the omission or alleged omission to state in the
Offering Memorandum, or in any amendment or supplement thereto, any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading, (iii) any inaccuracy in the representations and warranties of the
Company contained in this Agreement; and the Company shall reimburse the
Purchaser and, where applicable, its directors, officers, employees or
controlling persons upon demand for any legal or other expenses incurred by the
Purchaser and its managers, directors, officers, employees or controlling
persons in connection with investigating, defending, settling, compromising or
paying any such loss, claim, damage, liability, expense or action as such
expenses are incurred.
B. The 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
15
the Company within the meaning of the Act, from and against any loss, claim,
damage or liability, joint or several, or any action in respect thereof, to
which the Company or any such director, officer, employee or controlling person
may become subject, under the Act or otherwise, insofar as such loss, claim,
damage, liability or action arises out of, or is based upon, any inaccuracy in
the representations and warranties of the Purchaser contained in Section 6 of
this Agreement; and the Purchaser shall reimburse the Company and, where
applicable, its directors, officers, employees or controlling persons upon
demand for any legal or other expenses incurred by the Company and its
directors, officers, employees or controlling persons in connection with
investigating, defending, settling, compromising or paying any such loss, claim,
damage, liability, expense or action as such expenses are incurred.
C. Promptly after receipt by an indemnified party under this
Section 8 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 8, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however, that
the failure to notify the indemnifying party shall not relieve it from any
liability that it may have under this Section 8 except to the extent it has been
materially prejudiced by such failure and; provided, further, that the failure
to notify the indemnifying party shall not relieve it from any liability that it
may have to an indemnified party otherwise than under this Section 8. If any
such claim or action shall be brought against an indemnified party, and it shall
notify the indemnifying party thereof, the indemnifying party shall be entitled
to participate therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that
the Purchaser shall have the right to employ counsel to represent jointly the
Purchaser and, where applicable, its managers, directors, officers, employees
and controlling persons who may be subject to liability arising out of any claim
in respect of which indemnity may be sought by the Purchaser against the Company
under this Section 8 if the 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 Purchaser and
those managers, directors, officers, employees and controlling persons to be
jointly represented by one separate counsel. No indemnifying party shall (i)
without the prior written consent of the indemnified parties (which consent
shall not be unreasonably withheld), settle or compromise or consent to the
entry of any judgment with respect to any pending or threatened claim, action,
suit or proceeding in respect of which indemnification or contribution may be
sought hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding, or (ii) be liable for any
settlement of any such action effected without its written consent (which
consent shall not be unreasonably withheld), but if settled with the consent of
the indemnifying party or if there be a final judgment of the plaintiff in any
such action, the indemnifying party agrees to indemnify and hold harmless any
indemnified party from and against any loss or liability by reason of such
settlement or judgment.
16
9. Reimbursement of Purchaser's Expenses. If the Company fails to
tender the Shares for delivery to the 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 Purchaser for all reasonable out-of-pocket expenses
(including fees and disbursements of counsel) incurred by the 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 Purchaser.
10. Survival of Representations and Warranties. All representations and
warranties contained herein or made in writing by any party in connection
herewith will survive the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby and will remain in full
force and effect, regardless of any investigation made by any Purchaser or on
its behalf. Nothing herein shall imply any duty on the Company after the
execution and delivery of this Agreement to update any representations or
warranties made herein.
11. Persons Entitled to Benefit of Agreement. This Agreement shall
inure to the benefit of and be binding upon the Purchaser, the Company, and
their respective successors. This Agreement and the terms and provisions hereof
are for the sole benefit of only those persons, except that the representations,
warranties, indemnities and agreements of the Company contained in this
Agreement shall also be deemed to be for the benefit of the Purchaser and, where
applicable, the managers, directors and officers of the Purchaser and any person
or persons controlling the Purchaser within the meaning of Section 15 of the
Act. Nothing in this Agreement is intended or shall be construed to give any
person, other than the persons referred to in this Section 11, any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision contained herein.
12. Severability. Whenever possible, each provision of this Agreement
will be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be prohibited by or
invalid under applicable law, such provision will be ineffective only to the
extent of such prohibition or invalidity, without invalidating the remainder of
this Agreement.
13. Counterparts. This Agreement may be executed simultaneously in two
or more counterparts, any one of which need not contain the signatures of more
than one party, but all such counterparts taken together will constitute one and
the same Agreement.
14. Descriptive Headings. The descriptive headings of this Agreement
are inserted for convenience only and do not constitute a part of this
Agreement.
15. GOVERNING LAW. THE CORPORATE LAW OF DELAWARE WILL GOVERN ALL ISSUES
CONCERNING THE RELATIVE RIGHTS OF THE COMPANY AND ITS STOCKHOLDERS. ALL OTHER
QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY AND INTERPRETATION OF THIS
AGREEMENT AND THE EXHIBITS AND SCHEDULES HERETO WILL BE GOVERNED BY THE INTERNAL
LAW, AND NOT THE LAW OF CONFLICTS, OF DELAWARE.
17
16. Notices. All notices, demand or other communications to be
delivered under or by reason of the provisions of this Agreement shall be in
writing and shall be deemed to have been given when delivered personally to the
recipient; two business days after being deposited in the mail, postage prepaid,
if mailed; when answered back, if telexed; when receipt is acknowledged, if
telecopied; and on the next business day, if timely delivered to an air courier
guaranteeing overnight delivery. Such notices, demand and other communications
will be sent to the Purchaser at the address indicated on the signature page
hereof and to the Company at the address indicated below:
Origen Financial, Inc.
00000 Xxxxxxxx Xxxx, Xxxxx 0000
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: President
or to such other address or to the attention of such other person as the
recipient party has specified by prior written notice to the sending party.
18
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date first above written.
ORIGEN FINANCIAL, INC.
By: /s/ J. Xxxxx Xxxxxxx
-------------------------------------
Its: President
-------------------------------------
DB STRUCTURED FINANCE AMERICAS, LLC
By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------------------
Its: VP
-------------------------------------
DB STRUCTURED FINANCE AMERICAS, LLC
By: /s/ Xxxx X. Xxxxxxx
-------------------------------------
Its: VP
-------------------------------------
Address:
-----------------------------
-----------------------------
-----------------------------
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