AMENDED AND RESTATED SENIOR SECURED LOAN AGREEMENT
Exhibit 10.8
Execution Version
AMENDED AND RESTATED SENIOR SECURED LOAN AGREEMENT
THIS AMENDED AND RESTATED SENIOR SECURED LOAN AGREEMENT (“Loan Agreement”) dated as of
April 8, 2008, sets forth the terms of a financing transaction by and between Origen Financial
L.L.C., a Delaware limited liability company (“Borrower”), and the ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Trust u/a/d December 13, 2004 (“Lender”), and certain agreements between the parties
related thereto, all as set forth herein.
This Loan Agreement amends, restates and supersedes in its entirety that certain Senior
Secured Loan Agreement dated as of September 11, 2007, by and between Lender and the Borrower (the
“Original Agreement”). It is expressly understood that the security interests granted in
favor of Lender from Borrower pursuant to the Original Agreement shall remain in full force and
effect and that the indebtedness and obligations of Borrower under the Original Agreement are not
to be deemed paid or otherwise satisfied thereby.
In consideration of the mutual covenants and agreements set forth herein, and other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties
hereby agree as follows:
1. Bridge Loan. Subject to the terms and conditions set forth in this Loan Agreement
and the other Loan Documents (as hereinafter defined), Lender hereby agrees to lend to Borrower,
and Borrower agrees to borrow from Lender, (i) a senior secured bridge loan in the principal amount
of Ten Million and 00/100 Dollars ($10,000,000) (the “Term A Bridge Loan”) and (ii) a
senior secured bridge loan in the principal amount of Five Million and 00/100 Dollars ($5,000,000)
(the “Term B Bridge Loan”, and together with the Term A Bridge Loan, the “Bridge
Loan”). The proceeds of the Bridge Loan have previously been advanced to the Borrower pursuant
to the Original Agreement in a single aggregate advance of Fifteen Million and 00/100 Dollars
($15,000,000). The Bridge Loan shall also be referred to as the 2007 Facility.
2. Promissory Notes. The Term A Bridge Loan shall be evidenced by an amended and
restated promissory note (the “Term A Bridge Loan Note”) in the principal amount of
$10,000,000, duly executed by Borrower and payable to the order of Lender. The Term B Bridge Loan
shall be evidenced by an amended and restated promissory note (the “Term B Bridge Loan
Note”) in the principal amount of $5,000,000, duly executed by Borrower and Issuer (as defined
below) and payable to the order of Lender. The Term A Bridge Loan Note and the Term B Bridge Loan
Note together are referred to herein as the “Notes”, and are referred to individually as a
“Note”. Interest on the outstanding principal balance of the Notes shall accrue at the
rate set forth therein. Payment of principal of and interest on each Note shall be due and payable
at the times, and in accordance with the terms and conditions, set forth in such Note and in this
Loan Agreement. The Notes shall mature and be finally due and payable in full on the Maturity Date
(as defined in each Note).
3. Collateral. As collateral security for the repayment in full of (a) the
outstanding principal of, and all interest on, the Notes, and any renewal, extension or refinancing
thereof;
(b) all debts, liabilities, obligations, covenants and agreements of the Credit Parties (as
defined below) contained in this Loan Agreement and the other Loan Documents (as defined below);
(c) any and all other debts, liabilities and obligations of the Credit Parties to Lender and; (d)
all obligations of Borrower to Lender under the 2008 Facility (defined below) (collectively, the
“Obligations”):
(a) Borrower shall execute and deliver (and shall cause Origen Servicing, Inc. (“OSI”),
Origen Securitization Company, LLC (“OSC”), and Origen Financial, Inc. (“Issuer”),
to execute and deliver) to Lender, an amended and restated security agreement (amending and
restating that certain original Security Agreement dated September 11, 2007) acceptable to
Lender (the “Security Agreement”) pursuant to which Borrower, OSI, OSC and Issuer
shall pledge and grant a security interest in the Collateral (as defined therein) to Lender
as security for the Obligations;
(b) Each of Issuer, OSI and OSC shall execute and deliver to Lender an amended and
restated guaranty (the “Guaranty”) pursuant to which Issuer, OSI and OSC shall
guarantee the payment of the Obligations;
(c) OSC shall execute and deliver to Lender concurrently with the funding of the 2008
Facility, a pledge agreement acceptable to Lender (the “OSC Pledge Agreement”)
pursuant to which OSC shall pledge and grant a security interest in all of the equity
interests of Origen CMO Residual Holding Company, LLC to Lender as security for the
Obligations, together with the original certificates representing such equity interests and
a duly executed assignment separate from certificate in a form reasonably acceptable to
Lender;
(d) Borrower shall execute and deliver to Lender concurrently with the funding of the
2008 Facility, a pledge agreement acceptable to Lender (the “Borrower Pledge
Agreement”) pursuant to which Borrower shall pledge and grant a security interest in all
of its ownership interests in OSI and OSC to Lender as security for the Obligations,
together with the original certificates representing such equity interests and a duly
executed assignment separate from certificate in a form reasonably acceptable to Lender;
(e) Issuer shall execute and deliver to Lender concurrently with the funding of the
2008 Facility, a pledge agreement acceptable to Lender (the “Issuer Pledge
Agreement,” and together with the OSC Pledge Agreement and the Borrower Pledge
Agreement, the “Pledge Agreements”) pursuant to which Issuer shall pledge and grant
a security interest in all of the membership interests in Borrower to Lender as security for
the Obligations, together with the original certificates representing such equity interests
and a duly executed assignment separate from certificate in a form reasonably acceptable to
Lender; and
(f) If and when the residual interests in the securitized pools of loans currently
owned by OSC are transferred to any other direct or indirect wholly-owned or partially-owned
subsidiary of Issuer (the “Residual Transferee”), Borrower shall cause
2
the Origen entity that owns the equity interests of the Residual Transferee to guaranty
the obligations of Borrower under the Loan Documents and to pledge and grant a security
interest in all of the equity interests of the Residual Transferee that such entity owns,
pursuant to a pledge agreement substantially on the terms of the Borrower Pledge Agreement.
Lender acknowledges that if the residual interests are transferred to a Residual Transferee,
the Origen entities may not own all of the issued and outstanding equity securities of the
Residual Transferee.
This Loan Agreement, the Notes, the Security Agreement, the Guaranty, the Pledge Agreements
and all other instruments and documents evidencing, securing, governing, guaranteeing and/or
pertaining to the Bridge Loan are referred to collectively herein as the “Loan
Documents.”
4. Closing. The closing of the transactions contemplated by this Loan Agreement (the
“Closing”), shall take place at 10:00 a.m., Eastern time, on April 8, 2008 (the
“Closing Date”), at such place as the parties may agree. At the Closing the parties shall,
respectively, make or cause to be made the following simultaneous deliveries:
(a) Borrower shall deliver or cause to be delivered to Lender:
(i) this Loan Agreement, duly executed on behalf of Borrower;
(ii) the Term A Bridge Loan Note, duly executed on behalf of Borrower;
(iii) the Term B Bridge Loan Note, duly executed on behalf of Borrower and
Issuer;
(iv) the Security Agreement, duly executed on behalf of Borrower and the other
pledgors;
(v) the OSC Pledge Agreement, duly executed on behalf of OSC;
(vi) the Borrower Pledge Agreement, duly executed on behalf of Borrower;
(vii) the Issuer Pledge Agreement, duly executed on behalf of Issuer;
(viii) the Guaranty, duly executed on behalf of Issuer, OSC and OSI;
(ix) evidence satisfactory to Lender (such as payoff letters and lien releases)
that all indebtedness owed by Borrower under Borrower’s securitization facility used
for warehouse financing with Citigroup Global Markets Realty Corporation entered
into in March 2003, as amended (the “Warehouse Facility”), and Vanderbilt
Mortgage and Finance, Inc. has been paid in full and that all liens and security
interests in collateral granted pursuant to the Warehouse Facility and
3
all agreements between Borrower and Vanderbilt Mortgage and Finance, Inc. have
been terminated;
(x) with respect to each Credit Party (as defined below), copies of (A) its
organizational documents, certified by its secretary (or equivalent) as being true
and correct as of the Closing, (B) certificates of appropriate governmental
officials as to its good standing, (C) an incumbency certificate for all its
officers who will be authorized to execute any of the Loan Documents on behalf of
such Credit Party, and (D) copies of resolutions (or equivalent) adopted by such
Credit Party approving the Loan Documents and the transactions contemplated by this
Loan Agreement, certified by its secretary (or equivalent) as being true and correct
as of the Closing;
(xi) certificates as to the existence and good standing and qualification to do
business of Issuer, Borrower, OSC and OSI, dated as of a recent date;
(xii) certificates evidencing the insurance coverage required under this
Agreement;
(xiii) such Uniform Commercial Code financing statements in favor of Lender as
shall be necessary to perfect Lender’s rights in the Collateral;
(xiv) an opinion of counsel to Borrower, Issuer, OSC and OSI, in form and
substance reasonably acceptable to Lender; and
(xv) any additional instruments or documents that Lender may reasonably
request.
(b) Lender shall deliver to Borrower:
(i) the original Term A Bridge Loan Note and original Term B Bridge Loan Note,
each dated September 11, 2007, each marked “CANCELLED”;
(ii) this Loan Agreement, duly executed by Lender;
(iii) the Security Agreement, duly executed on behalf of Lender, as the secured
party;
(iv) the original Stock Purchase Warrant dated September 11, 2007, issued to
Lender by Origen Financial, Inc., marked “CANCELLED”; and
(v) written confirmation that the Stock Purchase Warrant dated September 11,
2007 and the Registration Rights Agreement dated September 11, 2007 have been
terminated.
4
5. Representations and Warranties of Borrower. Borrower hereby represents and
warrants to Lender, with respect to Borrower and each of Issuer, OSI and OSC (together with
Borrower, each a “Credit Party,” and collectively, the “Credit Parties”), as
follows:
(a) Organization and Qualification. Each Credit Party is duly organized,
validly existing and in good standing under the laws of its state of organization. Each
Credit Party has the requisite power and authority to carry on its business as currently
conducted. Each Credit Party is duly qualified to transact business in each jurisdiction,
if any, in which the failure to be so qualified would reasonably be expected to have a
material adverse effect on such Credit Party’s business, properties or financial condition
(a “Material Adverse Effect”).
(b) Authorization. The making, execution, delivery and performance by Borrower
of this Loan Agreement and by each Credit Party of the Loan Documents to which such Credit
Party is a party, and compliance with their respective terms, have been duly authorized by
all necessary corporate or limited liability company action of Borrower or such other Credit
Party, as applicable and will constitute valid and legally binding obligations of Borrower
or such other Credit Party, as applicable, enforceable in accordance with their respective
terms, subject to: (i) judicial principles limiting the availability of specific
performance, injunctive relief, and other equitable remedies and (ii) bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereafter in effect
generally relating to or affecting creditors’ rights.
(c) Financial Condition. Borrower has delivered to Lender Issuer’s Form 10-K
for the fiscal year ended December 31, 2007. The financial statements of Issuer included
therein (the “Financial Statements”) are complete and accurate in all material
respects and have been prepared in accordance with generally accepted accounting principles
applied on a consistent basis throughout the periods indicated, except for matters that are
not material either individually or in the aggregate. The Financial Statements fairly
present the financial condition and operating results of Issuer, as of the dates and for the
periods indicated therein. Except as disclosed in the Financial Statements or as set forth
in the Guaranty, no Credit Party is a guarantor or indemnitor of any other person, firm or
corporation. The Credit Parties maintain and will continue to maintain a system of
accounting and internal controls sufficient to meet the requirements of financial reporting
in accordance with generally accepted accounting principles.
(d) Governmental Consents. No consent, approval, order or authorization of, or
registration, qualification, designation, declaration or filing with, any federal, state or
local governmental authority on the part of any Credit Party is required in connection with
the execution of this Loan Agreement or the other Loan Documents, except for those that
shall have been obtained or made in accordance with the requirements of the applicable
authority.
(e) Litigation. There are no actions, suits, proceedings or investigations
pending or, to the best of Borrower’s knowledge, threatened before any court, administrative
agency or other governmental body against any Credit Party which, if
5
determined adversely to such Credit Party, would reasonably be expected to have a
Material Adverse Effect. No Credit Party is party or subject to, and none of its assets is
bound by, the provisions of any order, writ, injunction, judgment or decree of any court or
government agency or instrumentality which would reasonably be expected to have a Material
Adverse Effect.
(f) Intellectual Property. Each Credit Party has title to and ownership of, or
other rights to use pursuant to a valid lease or license, all copyrights, proprietary
rights, trademarks, service marks and trade names necessary for its business as now
conducted, except where the failure to have the same would not reasonably be expected to
have a Material Adverse Effect. No Credit Party has received any written or oral
communications alleging that such Credit Party has violated or, by conducting its business
as proposed, would violate any of the trademarks, service marks, trade names, copyrights or
trade secrets or other proprietary rights of any other person or entity, except where the
failure to have the same would not reasonably be expected to have a Material Adverse Effect.
(g) Compliance. Each Credit Party is in material compliance with all
applicable United States, state and foreign statutes, laws, regulations and executive
orders, and other United States, state and foreign governmental bodies and agencies having
jurisdiction over its business or properties, including without limitation, laws and
regulations relating to lending and servicing of loans, environmental and occupational
health and safety laws, and no Credit Party has received notice of any violation of such
statutes, laws, regulations or orders which has not been remedied prior to the date hereof,
and is not aware of any acts that could cause such notice or claim, and, to the best of
Borrower’s knowledge, no material expenditures are or will be required in order to comply
with any such existing statute, law or regulation. No Credit Party is in violation of or in
default under any provision of its organizational documents, as in effect immediately prior
to the Closing. No Credit Party is in default of any obligation for borrowed money, any
purchase money obligation or any other lease, commitment, contract, instrument or obligation
having or relating to an aggregate principal amount (or, in the case of any lease or
contract, an aggregate payment amount) in excess of $10,000 (either individually or in the
aggregate). The execution, delivery and performance of and compliance with this Loan
Agreement and the other Loan Documents by the Credit Parties will not result in any such
violation, be in conflict with or constitute, with or without the passage of time or giving
of notice, a default under any such provision, require any consent or waiver under any such
provision (other than any consents or waivers that have been obtained), or result in the
creation of any lien, encumbrance or charge upon any of the properties or assets of any
Credit Party pursuant to any such provision (other than the security interest and lien
created by the Security Agreement or otherwise under any of the Loan Documents).
(h) Permits. Each Credit Party has all franchises, permits, licenses, and any
similar authority necessary for the conduct of its business as now being conducted by it,
the lack of which would reasonably be expected to have a Material Adverse Effect. No
6
Credit Party is in default in any material respect under any of such franchises,
permits, licenses, or other similar authority.
(i) Title to Property and Assets. Each Credit Party has good and defensible
title to the Collateral (as defined in the Security Agreement) owned by it, free and clear
of all liens, charges and encumbrances, except for (A) liens for current taxes and
assessments not yet due, (B) possible minor liens and encumbrances that do not, in any case,
materially detract from the value of the property subject thereto or materially impair the
operations of Borrower, (C) liens granted pursuant to the Warehouse Facility, which liens
will be released at the Closing of the 2008 Facility; and (D) liens granted to Lender
pursuant to the Original Loan Agreement and Original Security Agreement, each dated
September 11, 2007, and pursuant to the 2008 Facility (collectively, “Permitted
Liens”). Each Credit Party is in material compliance with all leases to which it is a
party and, to the best of Borrower’s knowledge, holds a valid leasehold interest free of all
liens, charges or encumbrances, except for such liens, charges or encumbrances that would
not materially impair the operations of such Credit Party.
(j) Debt. Except for the 2008 Facility, the Bridge Loan and that certain
agreement with Citigroup Global Markets Realty Corporation entered into in March 2003,
providing for a short-term securitization facility used for warehouse financing (the
“Warehouse Facility”) (which will be paid in full at the closing of the 2008
Facility), no Credit Party has incurred any Indebtedness (as defined in Section 7(b)) nor
has it guaranteed the Indebtedness of any third party.
(k) Tax Matters. Each Credit Party has prepared and filed all United States
federal, state and local income or franchise tax returns, if any, required to be filed by it
or has timely filed for extensions thereof, and has paid, or made provision for the payment
of, all taxes owed by it except to the extent contested in good faith by such Credit Party
and for which adequate reserves are established and maintained, and no tax deficiencies have
been assessed or, to Borrower’s knowledge, proposed against any Credit Party. Commencing
with its taxable year ended December 31, 2003, Issuer has continuously qualified to be taxed
as a real estate investment trust pursuant to Sections 856 through 860 of the Internal
Revenue Code of 1986, as amended (the “Code”) and the Issuer’s present and
contemplated organization, ownership, method of operation, assets, and income will enable it
to so qualify for the taxable year ending December 31, 2008 and thereafter.
(l) Brokers or Finders. No Credit Party has agreed to incur, directly or
indirectly, any liability for brokerage or finders’ fees, investment banker fees, agents’
commissions or other similar charges in connection with this Loan Agreement or any of the
transactions contemplated hereby.
(m) No Subordination. Except as may be contemplated by 2008 Facility or the
Warehouse Facility (which will be terminated at the closing of the 2008 Facility), there is
no agreement, indenture, contract or instrument to which any Credit Party is a party or by
which such Credit Party may be bound that requires the subordination in right of payment
7
of Borrower’s obligations under the Notes to any other obligation of Borrower or any
other Credit Party.
(n) No Material Adverse Changes. Since December 31, 2007, other than as
contemplated by this Loan Agreement or as disclosed in a report on Form 8-K filed by the
Securities and Exchange Commission by Issuer, there has not been any change in the assets,
liabilities, financial condition or operating results of any Credit Party from that
reflected in the Financial Statements, except changes in the ordinary course of business
that would not, either individually or in the aggregate, be reasonably likely to result in a
Material Adverse Effect on the assets, properties, condition (financial or other), affairs
or prospects of any Credit Party. Borrower has no knowledge of any material liabilities of
any nature not disclosed in writing to Lender.
(o) Labor Agreements and Actions. Each Credit Party has complied in all
material respects with all applicable state and federal equal employment opportunity and
other laws related to employment (including without limitation, provisions thereof relating
to wages, hours, equal opportunity, collective bargaining and the payment of social security
and other taxes), and no Credit Party is aware that it has any labor relations problems
(including without limitation, any union organization activities, threatened or actual
strikes or work stoppages or material grievances). No Credit Party is bound by or subject
to (and none of its assets or properties is bound by or subject to) any written or oral,
express or implied, contract, commitment or arrangement with any labor union.
(p) ERISA. Borrower has no knowledge that any employee benefit plan to which
any Credit Party has or may have liability (each, a “Plan”) is in noncompliance in
any material respect with the applicable provisions of the Employee Retirement Income
Security Act of 1974, as amended (“ERISA”) or the Internal Revenue Code. Borrower
has no knowledge of any pending or threatened litigation or governmental proceeding or
investigation against or relating to any Plan. Borrower has no knowledge of any reasonable
basis for any material proceedings, claims or actions against or relating to any Plan.
Borrower has no knowledge that any Credit Party has incurred any “accumulated funding
deficiency” within the meaning of Section 302(a)(2) of ERISA in connection with any Plan.
Borrower has no knowledge that there has been any Reportable Event or Prohibited Transaction
(as such terms are defined in ERISA) with respect to any Plan or has incurred any liability
to the Pension Benefit Guaranty Corporation (“PBGC”) under Section 4062 of ERISA in
connection with any Plan.
(q) Investment Company. Borrower is not, and, after giving effect to the
Bridge Loan and the issuance of the Notes, will not be, an “investment company” or an entity
“controlled” by an “investment company,” as such terms are defined in the Investment Company
Act of 1940, as amended.
(r) Use of Proceeds; Margin Stock. No part of the proceeds of the Loans will
be used, directly or indirectly, for the purpose of purchasing or carrying any margin stock
within the meaning of Regulation U of the Board of Governors of the Federal Reserve
8
System or to extend credit to others for the purpose of purchasing or carrying any such
margin stock.
(s) Solvency. The Credit Parties, taken as a whole, and after taking into
account the transactions contemplated by this Loan Agreement and the other Loan Documents,
are able to pay their debts as they become due in the ordinary course of business and have
sufficient capital to carry on their businesses in accordance with their respective business
plans from time to time (provided that any changes to any business plan after the Closing
shall be reasonably acceptable to Lender); in this regard Lender acknowledges that Borrower,
Issuer and their affiliates are contemplating the possible sale or other disposition of
various assets and/or business operations . The amount that will be required to pay each
Credit Party’s probable liabilities as they become absolute and mature in the ordinary
course of business is less than the sum of the present fair sale value of its assets valued
on a going concern basis.
6. Affirmative Covenants of Borrower. Borrower agrees with Lender that, until the
Bridge Loan and all other Obligations have been paid in full:
(a) Punctual Payments. Borrower shall punctually pay all principal, interest,
fees or other liabilities due under any of the Loan Documents at the times and place and in
the manner specified therein (subject to any grace periods, if applicable).
(b) Accounting Records. Each Credit Party shall maintain accurate books and
records in accordance with generally accepted accounting principles, consistently applied,
and permit any representative of Lender, upon advance request and at any reasonable time
during normal business hours to inspect, audit and examine such books and records, to make
copies of the same, and to inspect the properties of each Credit Party.
(c) Existence. Each Credit Party shall maintain its corporate or limited
liability existence.
(d) Compliance. Each Credit Party shall preserve and maintain all licenses,
permits, governmental approvals, rights, privileges and franchises necessary for the conduct
of its business in accordance with its business plan from time to time (provided that any
changes to any business plan after the Closing shall be reasonably acceptable to Lender); in
this regard Lender acknowledges that Borrower, Issuer and their affiliates are contemplating
the possible sale or other disposition of various assets and/or business operations. Each
Credit Party shall comply with the provisions of all material contracts and agreements to
which such Credit Party is a party and all documents pursuant to which such Credit Party is
organized and/or which govern such Credit Party’s continued existence and with the material
requirements of all laws, rules, regulations and orders of any governmental authority
applicable to such Credit Party and/or its business.
(e) Insurance. Each Credit Party shall maintain and keep in force insurance of
the types and in amounts customarily carried in lines of business similar to that of such
9
Credit Party, including but not limited to fire, extended coverage, public liability,
flood, property damage and workers’ compensation, and deliver to Lender from time to time at
Lender’s request schedules setting forth all insurance then in effect. Each insurance
policy described above shall name Lender as a lender’s loss payee, and shall require the
insurer to provide at least thirty (30) days’ prior written notice to Lender of any material
change or cancellation of such policy.
(f) Facilities. Each Credit Party shall keep all properties useful or
necessary to such Credit Party’s business in good repair and condition, ordinary wear and
tear excepted, and from time to time make necessary repairs, renewals and replacements
thereto so that such properties shall be sufficient for the conduct of such Credit Party’s
business.
(g) Taxes and Other Liabilities. Each Credit Party shall pay and discharge
when due any and all indebtedness, obligations, assessments and taxes, both real or
personal, including without limitation Federal and state income taxes and state and local
property taxes and assessments, except such Credit Party may in good faith contest or as to
which a bona fide dispute may arise through appropriate proceedings for which adequate
reserves have been provided on the books of such Credit Party.
(h) Litigation. Borrower shall promptly give notice in writing to Lender of
any litigation pending, or to the knowledge of Borrower, threatened against any Credit Party
having or relating to any claim or claims in excess of $100,000 (either individually or in
the aggregate), other than any litigation pending or threatened which is covered in full by
insurance.
(i) Notice to Lender. Borrower shall promptly (but in no event more than five
(5) days after the occurrence of each such event or matter) give written notice to Lender in
reasonable detail of: (i) the occurrence of any Event of Default, or any condition, event or
act which with the giving of notice or the passage of time or both would constitute an Event
of Default; (ii) any change in the name or the organizational structure of any Credit Party;
(iii) the occurrence and nature of any Reportable Event or Prohibited Transaction (each as
defined in ERISA) or any funding deficiency with respect to any employee pension benefit
plan (as defined in ERISA) or the institution by the PBGC or any Credit Party of proceedings
under Title V of ERISA to terminate any Plan; or (iv) any termination or cancellation of any
insurance policy which a Credit Party is required to maintain, or any uninsured or partially
uninsured loss through liability or property damage, or through fire, theft or any other
cause affecting any Credit Party’s property in excess of an aggregate of $50,000; (v) the
commencement of any litigation or administrative proceeding that would cause the
representation and warranty of any Credit Party contained in Section 5 of this Loan
Agreement to be untrue in any material respect; (vi) the commencement of any investigation,
litigation, or administrative or regulatory proceeding by, or the receipt of any notice,
citation, pleading, order, decree or similar document issued by, any federal, state or local
governmental agency or regulatory authority that results in, or would reasonably be expected
to result in, the termination or suspension of any license, permit or franchise necessary to
any Credit Party’s business as
10
then conducted, or that imposes, or would reasonably be expected to result in the
imposition of, a material fine or penalty on any Credit Party.
(j) Further Assurances. At any time or from time to time upon the request of
Lender, Borrower will, and will cause the other Credit Parties to, at their expense,
promptly execute, acknowledge and deliver such further documents and do such other acts and
things as Lender may reasonably request in order to effect fully the purposes of the Loan
Documents. In furtherance and not in limitation of the foregoing, Borrower shall, and shall
cause the other Credit Parties to, take such actions as Lender may request from time to time
to ensure that the Obligations are secured by the Collateral (as defined in the Security
Agreement).
(k) Reporting Requirements. Borrower shall furnish to Lender such information
respecting the business, assets and financial condition of the Credit Parties and their
subsidiaries as Lender may reasonably request.
7. Negative Covenants. Borrower agrees with Lender that, until the Bridge Loan and
all other Obligations have been paid in full, Borrower shall not, and Borrower shall not permit any
other Credit Party to, without the prior written consent of Lender:
(a) Liens. Incur, create, assume or permit to be created or allow to exist any
lien upon or in any of its assets or properties, except Permitted Liens.
(b) Indebtedness. Incur, create, assume, permit to exist, guarantee, endorse
or otherwise become directly or indirectly or contingently responsible or liable for any
Indebtedness other than in respect of this Loan Agreement, the 2008 Facility, the Warehouse
Facility (which shall be paid in full at the closing of the 2008 facility) and the Guaranty.
As used herein, “Indebtedness” means all liabilities or obligations of a Credit
Party, whether primary or secondary or absolute or contingent: (a) for borrowed money or
for the deferred purchase price of property or services (excluding trade obligations
incurred in the ordinary course of business, which are not the result of any borrowing or
which are not more than 90 days past due); (b) as lessee under capital leases; (c) evidenced
by notes, bonds, debentures or similar obligations; (d) under any guaranty or endorsement
(other than in connection with the deposit and collection of checks in the ordinary course
of business), and other contingent obligations to purchase, provide funds for payment,
supply funds to invest in any Person (as defined below), or otherwise assure a creditor
against loss; (e) secured by any liens on assets of any Credit Party, whether or not the
obligations secured have been assumed by a Credit Party; or (f) any unsatisfied obligation
for “withdrawal liability” to a “multiemployer plan”, as such terms are defined in ERISA. As
used herein, “Person” means any individual, corporation, partnership, trust, limited
liability company, association or other entity.
(c) Consolidation or Merger or Recapitalization. Consolidate with or merge
into any other Person, or permit another Person to merge into it, or acquire substantially
all of the assets or stock of any other Person, whether in one or a series of transactions,
except that Borrower may permit any of its wholly-owned subsidiaries to merge into it or
11
another wholly-owned subsidiary of Borrower, or liquidate, dissolve or effect a
recapitalization or reorganization in any form of transaction (including, without
limitation, any reorganization after which Borrower becomes a subsidiary of another Person).
(d) Disposition of Assets. Sell, lease, assign, transfer or otherwise dispose
of any of its now owned or hereafter acquired assets or properties outside the ordinary
course of business.
(e) Transactions with Affiliates. Engage in any transaction with an Affiliate
(as defined in the Stock Purchase Warrant dated the same date hereof, granted to Lender in
connection with the 2008 Facility) or any immediately family member of any Affiliate, except
for transactions that are (i) with another Credit Party or made on terms no less favorable
to such Credit Party than it would obtain in a comparable arms length transaction from
unrelated third parties and (ii) made in the ordinary course of business consistent with
past practice.
(f) Loans and Advances. Make any loan or advance to any Person, except: (a)
extensions of credit in the ordinary course of business by the Credit Parties to their
customers; and (b) advances to officers and employees of the Credit Parties for travel and
other expenses in the ordinary course of business.
(g) Guarantees. Guarantee the Indebtedness of any Person except the Guaranty
and other guarantees in favor Lender.
(h) Subsidiaries. Form any subsidiary other than those in existence as of the
date hereof.
(i) Notes or Debt Securities Containing Equity Features. Authorize, issue or
enter into any agreement providing for the issuance (contingent or otherwise) of any notes
or debt securities containing equity features (including, without limitation, any notes or
debt securities convertible into or exchangeable for capital stock or other equity
securities, issued in connection with the issuance of capital stock or other equity
securities or containing profit participation features).
(j) Other Agreements. Enter into, become subject to, amend, modify or waive,
or permit any of its subsidiaries to enter into, become subject to, amend, modify or waive,
any agreement or instrument which by its terms would (under any circumstances) restrict
(i) the right of any Credit Party or any of its subsidiaries to make loans or advances or
pay dividends to, transfer property to, or repay any Indebtedness owed to, Borrower, or
(ii) a Credit Party’s right to perform the provisions of any of the Loan Documents or
charter documents of such Credit Party.
(k) REIT Status. Take or permit any other any other Credit Party to take any
action that would cause Issuer to lose its status as a Real Estate Investment Trust pursuant
to the Code.
12
8. Confidentiality. Lender expressly acknowledges that it may receive in the future
Confidential Materials (as hereinafter defined), and that disclosure of such Confidential Materials
to parties not a party to this Loan Agreement would cause irreparable harm to Borrower. None of
Lender nor its Affiliates shall (a) disclose any Confidential Materials to any party not a party to
this Loan Agreement, or (b) use any Confidential Materials for any purpose except in connection
with the transactions contemplated by this Loan Agreement; provided, however, Lender may disclose
Confidential Information: (i) with the consent of Borrower; (ii) when required by law or
regulation; (iii) to the agents, representatives and professional consultants of Lender who have a
need to know such information and agree, subject to the permissive disclosure provisions of this
Section 8, to maintain the confidentiality of such information; (v) in connection with the
preservation, exercise and/or enforcement of any of Lender’s rights or remedies under this
Agreement and the other Loan Documents; (vi) in connection with any contemplated transfer of this
Loan Agreement or any of the Notes to any proposed transferee (so long as the recipient of such
information agrees to keep such information confidential on terms substantially similar to those
set forth in this Section 8); and (vii) in a response to any summons, subpoena or other legal
process or in connection with any judicial or administrative proceeding or inquiry. In the event
that Lender concludes that it is legally obligated to disclose any Confidential Materials, it shall
provide Borrower with prompt written notice sufficient to give Borrower a reasonable opportunity to
seek to prevent or limit the disclosure of such Confidential Materials. In the case of legal
proceedings in which such disclosure is required, Lender shall reasonably cooperate with Borrower
to obtain an appropriate protective order limiting the disclosure of such material, at Borrower’s
expense.
“Confidential Materials” means any information or materials, whether written or oral,
tangible or intangible, concerning Borrower, its subsidiaries, businesses, markets, products,
prospects, finances, principal stockholders and/or members. Notwithstanding the foregoing,
Confidential Materials shall not include (A) information that is or becomes generally known to the
public at large other than as a result of a breach of this Loan Agreement by Lender or its
Affiliates; (B) information acquired by Lender independently from a third party (other than a third
party which Lender knows, or has reason to know, is under an obligation of confidentiality with
respect to such information); and (C) information independently developed by Lender and not as a
result of the disclosure of information or provision of materials by Borrower. The Confidential
Materials may include, but are not necessarily limited to, the following: data; documentation;
research and development; advertising plans; distribution networks; new product or service
concepts; processes; marketing procedures; “know-how”; marketing techniques and materials;
development plans; names and other information related to strategic partners, suppliers, or
vendors; pricing policies and strategic, business or financial information, including business
plans and financial pro formas.
9. Events of Default. Each of the following shall constitute an “Event of
Default” under this Loan Agreement:
(a) The occurrence of an Event of Default under, and as defined in, the Security
Agreement or any of the 2008 Loan Facility Documents. The “2008 Loan Facility Documents”
means the Senior Secured Loan Agreement of even date herewith
13
between Borrower and Lender; the Senior Secured Promissory Note in the principal amount
of $46,000,000 of even date herewith executed by Borrower in favor of Lender, and all other
instruments and documents evidencing, securing, governing, guaranteeing and/or pertaining to
the 2008 Loan Facility. The “2008 Loan Facility” means that credit facility under the
Senior Secured Loan Agreement of even date herewith between Borrower and Lender relating to
the borrowing of $46,000,000 by Borrower from Lender;
(b) Failure of Borrower to pay (i) when due principal of the Bridge Loan, whether at
stated maturity, by acceleration or otherwise; or (ii) any installment of interest on the
Bridge Loan or any fees and expenses due hereunder within 3 business days after the date
due;
(c) Failure of any Credit Party to perform or comply with any term or condition
contained in Section 7 hereof;
(d) The failure of any Credit Party to timely and properly observe, keep or perform any
covenant, agreement, representation, warranty or condition contained herein (other than
those covered in sub-sections (a) through (c) of this Section 9) or in any of the other Loan
Documents (other than the Pledge Agreements) and such failure is not cured within ten (10)
days after such Credit Party becomes aware or should have become aware of such default.
(e) The bankruptcy or insolvency of, the assignment for the benefit of creditors by, or
the appointment of a receiver for any of the property of, or the liquidation, termination,
dissolution or death or legal incapacity of, any party liable for the Obligations, whether
as maker, endorser, guarantor, surety or otherwise; provided, however, that any involuntary
bankruptcy proceeding shall not be an Event of Default unless and until such proceeding
shall remain undismissed and unstayed for a period of sixty (60) days;
(f) Any representation, warranty, certification or other statement made by Credit Party
in any Loan Document or in any statement or certificate at any time given by any Credit
Party in writing pursuant hereto or thereto or in connection herewith or therewith shall be
false in any material respect as of the date made or deemed made;
(g) The failure by Issuer, Borrower, OSC or OSI to timely and properly observe, keep or
perform any covenant, agreement or condition contained in the Pledge Agreements;
(h) (i) any Reportable Event (as defined in ERISA) shall have occurred which
constitutes grounds for the termination of any Plan by the PBGC or for the appointment of a
trustee to administer any Plan, or any Plan shall be terminated within the meaning of Title
IV of ERISA, or a trustee shall be appointed by the appropriate court to administer any
Plan, or the PBGC shall institute proceedings to terminate any Plan or to appoint a trustee
to administer any Plan, or any Credit Party or any trade or business which together with any
Credit Party would be treated as a single employer under Section 4001 of
14
ERISA shall withdraw in whole or in part from a multiemployer Plan, and (ii) the
aggregate amount of any Credit Party’s liability for all such occurrences, whether to a
Plan, the PBGC or otherwise, may exceed $100,000;
(i) Except if such money judgment, writ or warrant is appealable and so long as such
Credit Party is contesting and appealing such money judgment, writ or warrant in good faith,
if any money judgment, writ or warrant of attachment or similar process involving (i) in any
individual case an amount in excess of $100,000 or (ii) in the aggregate at any time an
amount in excess of $250,000 (in either case to the extent not adequately covered by
insurance as to which a solvent and unaffiliated insurance company has acknowledged
coverage) shall be entered or filed against Borrower or any of its assets and shall remain
undischarged, unvacated, unbonded or unstayed for a period of sixty (60) days (or in any
event later than five days prior to the date of any proposed sale thereunder); or
(j) At any time after the execution and delivery thereof, (i) this Loan Agreement or
any Loan Document ceases to be in full force and effect (other than by reason of a release
of Collateral in accordance with the terms hereof or thereof or the satisfaction in full of
the Bridge Loan in accordance with the terms hereof) or shall be declared null and void, or
Lender shall not have or shall cease to have a valid and perfected Lien in any Collateral
purported to be covered by the Loan Documents with the priority required by the relevant
Loan Document, in each case for any reason other than the failure of Lender or any Secured
Party to take any action within its control, or (ii) any Credit Party shall contest the
validity or enforceability of any Loan Document in writing or deny in writing that it has
any further liability under any Loan Document to which it is a party.
10. Remedies. Upon the occurrence of any Event of Default, Lender may, at its option,
without further notice or demand, (i) declare the outstanding principal balance of and accrued but
unpaid interest on the Notes and all other Obligations at once due and payable (provided, however,
upon the occurrence of any Event of Default described in Section 8(e) above, then all outstanding
principal and accrued but unpaid interest under the Notes shall immediately become due and payable
together with all other amounts payable under the Loan Documents without presentment, demand,
protest or notice of any kind), (ii) foreclose all liens securing payment hereof, (iii) pursue any
and all other rights, remedies and recourses available to Lender hereof, including but not limited
to any such rights, remedies or recourses under the Loan Documents, at law or in equity, or (iv)
pursue any combination of the foregoing. So long as an Event of Default has occurred and is
continuing, the unpaid principal balance of the Notes shall continue to bear interest at the
Default Rate, as set forth in the Notes. The acceptance by Lender of any payment under the Notes
which is less than the payment in full of all amounts due and payable at the time of such payment
shall not (i) constitute a waiver of or impair, reduce, release or extinguish any right, remedy or
recourse of the holder hereof, or nullify any prior exercise of any such right, remedy or recourse,
or (ii) impair, reduce, release or extinguish the obligations of any party liable under any of the
Loan Documents as originally provided herein or therein.
15
11. Indemnification. Borrower agrees to indemnify, defend and hold Lender harmless
from and against all loss, liability, damage and expense that may be imposed on, incurred by or
asserted against Lender and it agents in any matter relating to or arising out of, in connection
with or as a result of this Loan Agreement, any other Loan Document or any other act, event or
transaction related, contemplated in or attendant to any such document, or, in each case, any
action taken or omitted to be taken by Lender under or with respect to any of the foregoing
(collectively, the “Indemnified Liabilities”), provided, that Borrower shall not be
liable for any payment to any such Person of any portion of the Indemnified Liabilities to the
extent resulting from such Person’s gross negligence or willful misconduct. The undertaking in this
Section shall survive repayment of the Notes and the termination of this Loan Agreement.
12. Costs and Expenses. Borrower shall pay all fees and expenses incurred by Lender,
including the reasonable documented fees of counsel in connection with the preparation, issuance,
maintenance and amendment of this Loan Agreement and the other Loan Documents and the consummation
of the transactions contemplated by this Loan Agreement and the other Loan Documents, and the
administration, protection and enforcement of Lender’s rights under this Loan Agreement and the
other Loan Documents, or with respect to the Collateral, including without limitation the
protection and enforcement of such rights in any bankruptcy, reorganization or insolvency
proceeding involving Borrower or any other Credit Party, both before and after judgment. Borrower
further agrees to pay on demand all audit fees and accountants’ reasonable fees incurred by Lender
in connection with the maintenance and enforcement of this Loan Agreement, the other Loan Documents
or any other collateral security.
13. Rights Cumulative. All rights of Lender under the terms of this Loan Agreement
shall be cumulative of, and in addition to, the rights of Lender under any and all other agreements
between Borrower and Lender and any other Credit Party and Lender (including, but not limited to,
the other Loan Documents), and not in substitution or diminution of any rights now or hereafter
held by Lender under the terms of any other agreement.
14. Waiver and Amendment. Neither the failure nor any delay on the part of Lender to
exercise any right, power or privilege herein or under any of the other Loan Documents shall
operate as a waiver thereof, nor shall any single or partial exercise of such right, power or
privilege preclude any other or further exercise thereof or the exercise of any other right, power
or privilege. No provision of this Loan Agreement may be waived, amended or modified except
pursuant to an agreement in writing entered into by Borrower and Lender.
15. Successors and Assigns. This Loan Agreement shall be binding upon and inure to
the benefit of Lender and Borrower, and their respective successors and assigns, provided, however,
that Borrower may not, without the prior written consent of Lender, assign any rights, powers,
duties or obligations under this Loan Agreement or any of the other Loan Documents.
16. Notices. All notices, requests, demands and other communications required or
permitted hereunder shall be in writing, and shall be deemed to be given or delivered when actually
received by the party to whom directed, or, if earlier and regardless of whether actually received,
on the third day after deposit in a regularly maintained receptacle for the United States mail,
registered or certified, postage fully prepaid, addressed to the party to whom directed at its
16
address set forth below or at such other address as such party may have previously specified
by notice actually received by the other party, or by fax transmission with a confirmation of
receipt generated by the sender’s facsimile machine:
If to Borrower:
|
Origen Financial L.L.C. | |
| ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ | ||
| ▇▇▇▇▇ ▇▇▇▇ | ||
| ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ | ||
| Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ | ||
| Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇ | ||
| Phone No.: (▇▇▇) ▇▇▇-▇▇▇▇ | ||
With a copy to:
|
Origen Financial, Inc. | |
| ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ | ||
| ▇▇▇▇▇ ▇▇▇▇ | ||
| ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ | ||
| Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ | ||
| Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇ | ||
| Phone No.: (▇▇▇) ▇▇▇-▇▇▇▇ | ||
With a copy to:
|
Jaffe, Raitt, Heuer & ▇▇▇▇▇, PC | |
| ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ | ||
| ▇▇▇▇▇ ▇▇▇▇ | ||
| ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ | ||
| Attention: ▇▇▇▇▇ Sugar | ||
| Fax. No.: (▇▇▇) ▇▇▇-▇▇▇▇ | ||
| Phone No.: (▇▇▇) ▇▇▇-▇▇▇▇ | ||
If to Lender:
|
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Trust u/a/d 12/13/04 | |
| ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ | ||
| ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ | ||
| Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ | ||
| Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇ | ||
| Phone No.: (▇▇▇) ▇▇▇-▇▇▇▇ | ||
With a copy to:
|
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇ LLP | |
| 2290 First National Building | ||
| ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ | ||
| ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ | ||
| Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ | ||
| Fax No: (▇▇▇) ▇▇▇-▇▇▇▇ | ||
| Phone Number: (▇▇▇) ▇▇▇-▇▇▇▇ |
17
17. Governing Law. This Loan Agreement and the other Loan Documents shall be governed
by and construed in accordance with the laws of the State of Michigan, except to the extent
perfection and the effect of perfection or non-perfection of any security interest granted under
the Loan Documents, in respect of any particular Collateral, are governed by the laws of a
jurisdiction other than the State of Michigan. As a material inducement to Lender to enter into
this Loan Agreement, Borrower agrees that all actions or proceedings in any manner relating to or
arising out of this Loan Agreement may be brought only in the courts of the State of Michigan
located in Oakland County or the Federal Court for the Eastern District of Michigan, and Borrower
consents to the jurisdiction of such courts. Borrower waives any objection it may nor or hereafter
have to the venue of any such court and any right it may have now or hereafter have to claim that
any such action or proceeding is in an inconvenient court.
18. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING
DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS LOAN AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO
(A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO
ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN
INDUCED TO ENTER INTO THIS LOAN AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.
19. Severability. If any provision of this Loan Agreement or any of the other Loan
Documents is held to be illegal, invalid or unenforceable under present or future laws, such
provision shall be fully severable and the remaining provisions of this Loan Agreement or any of
the other Loan Documents shall remain in full force and effect and shall not be affected by the
illegal, invalid or unenforceable provision or by its severance.
20. Counterparts. This Loan Agreement may be separately executed in any number of
counterparts, each of which shall be an original, but all of which, taken together, shall be deemed
to constitute one and the same instrument.
21. Facsimile Documents, Electronic Documents and Signatures. For purposes of
finalizing this Loan Agreement or any of the other Loan Documents, if this document or any document
executed in connection with it is transmitted by facsimile or other electronic transmission, it
shall be treated for all purposes as an original document. Additionally, the signature of any
party on this document transmitted by way of a facsimile machine or other electronic communication
shall be considered for all purposes as an original signature. Any such
18
faxed document or electronic document shall be considered to have the same binding legal
effect as an original document. At the request of any party, any faxed document or electronic
document shall be re-executed by each signatory party in an original form.
22. NO ORAL AGREEMENTS. THIS LOAN AGREEMENT, THE NOTES, AND THE OTHER LOAN DOCUMENTS
REFERRED TO HEREIN REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
[Signatures contained on following page]
19
IN WITNESS WHEREOF, the parties have executed this Amended and Restated Senior Secured Loan
Agreement as of the date first written above.
| BORROWER: | LENDER: | |||||||||
| ORIGEN FINANCIAL, L.L.C. | ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ TRUST U/A/D 12/13/04 | |||||||||
By:
|
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ | By: | /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ | |||||||
Name:
|
Name: | |||||||||
Title:
|
Chief Executive Officer | Title: | Trustee | |||||||
| Acknowledged by: | ||||||||||
| ISSUER: | ||||||||||
| ORIGEN FINANCIAL, INC. | ||||||||||
By: Name: |
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
|
|||||||||
Title:
|
Chief Executive Officer | |||||||||
20