EXHIBIT 10.53
AMENDED AND RESTATED SECURITY AGREEMENT
THIS AMENDED AND RESTATED SECURITY AGREEMENT (this "Agreement") is entered
into as of February 1, 2002 by and between ORIGEN FINANCIAL, INC., a Virginia
corporation whose address is 260 E. Brown Street, Suite 200, Birmingham,
Michigan 48009 ("Borrower") and SUN COMMUNITIES OPERATING LIMITED PARTNERSHIP, a
Michigan limited partnership whose address is 31700 Middlebelt Road, Suite 145,
Farmington Hills, MI 48334 ("Secured Party").
RECITALS:
A. Borrower and Secured Party entered into a Subordinated Loan
Agreement dated December 18, 2001 (the "Original Loan Agreement"), in
which Secured Party agreed to make a line of credit available to Borrower
for up to $12,500,000 thereafter (the "Original Line of Credit"), and in
connection with the Original Line of Credit Borrower executed and
delivered to Sun Communities, Inc. a Demand Promissory Note dated December
18, 2001, with an original principal amount of $12,500,000 (the "Original
Note").
B. To secure the payment of all amounts due to Secured Party by
Borrower in connection with the Original Line of Credit and pursuant to
terms of the Original Loan Agreement and the Original Note, and to secure
all of Borrower's other obligations to Secured Party of any nature,
Borrower executed a Security Agreement dated December 18, 2001 (the
"Original Security Agreement").
D. The Secured Party, Borrower, and Origen Financial, L.L.C., a
Delaware limited liability company ("Origen LLC") have entered into an
Amended and Restated Subordinated Loan Agreement dated February 1, 2002
(as amended from time to time, the "Amended Loan Agreement") under which
Secured Party has agreed to increase the Original Line of Credit up to the
amount of $17,500,000 (the "Amended Line of Credit") as evidenced by an
Amended and Restated Promissory Note dated February 1, 2002 (as amended
from time to time, "Amended Note"), and pursuant to the terms of the
Related Documents (as defined in the Amended Loan Agreement).
E. To secure the payment of all amounts due to Secured Party by
Borrower in connection with the Amended Line of Credit and pursuant to
terms of the Amended Loan Agreement, the Amended Note and to secure all of
Borrower's other obligations to Secured Party of any nature now or in the
future owing from Borrower to Secured Party (the "Obligations"), Borrower,
together with the Secured Party, desire to amend and restate the Original
Pledge Agreement in accordance with the terms and conditions of this
Agreement.
THEREFORE, the parties hereby agree as follows:
1. DEFINITIONS. Unless otherwise defined herein, the following terms shall
have the following meanings:
(a) "Accounts" means all "accounts", as such term is defined in Section
9-102(2) of the Code, in which Borrower now or hereafter has any right,
title or interest.
(b) "Books" means all books, records and correspondence relating to the
Collateral (as defined herein).
(c) "Chattel Paper" means any and all "chattel paper", as such term is
defined in Section 9-102(11) of the Code, in which Borrower now or
hereafter has any right, title or interest.
(d) "Code" means the Uniform Commercial Code as the same may from time to
time be in effect in the State of Michigan.
(e) "Contracts" means any and all contracts, instruments, undertakings,
documents, leases or other agreements in or under which Borrower may now
or hereafter has any right, title or interest and which pertain to the
purchase, lease, sale or other disposition by Borrower of any Inventory,
Equipment, Fixtures, real property or any interest in real property, as
any of the same may from time to time be amended, supplemented or
otherwise modified.
(f) "Current Accounts" means an Account that arises from a bona fide
outright sale of goods by Borrower, or from services performed by Borrower
that is not subject to any claim of reduction, counterclaim, set-off,
allowances, adjustments, or the like, and is not outstanding more than 60
days from the date of its invoice.
(g) "Documents" means any and all "documents" and "instruments", as such
terms are defined in Section 9-102(30) and (47) of the Code, in which
Borrower now or hereafter has any right, title or interest.
(h) "Equipment" means all "equipment", as such term is defined in Section
9-102(33) of the Code, in which Borrower now or hereafter has any right,
title or interest.
(i) "Fixtures" means, to the extent not otherwise included as Equipment,
all machinery, apparatus, equipment, fittings, fixtures, furniture and
furnishings in which Borrower now or hereafter has any right, title or
interest located upon or affixed to or which becomes affixed to any real
property owned or leased by Borrower, or any part thereof, and used or
usable in connection with any future occupancy or use of such premises,
including replacements and additions thereto.
(j) "General Intangibles" means all "general intangibles", as such term is
defined in Section 9-102(42) of the Code, in which Borrower now or
hereafter has any right, title or interest. General Intangibles shall also
include all equity interests of Borrower in other entities, including but
not limited to membership interest in Origen Special Purpose II, L.L.C., a
Delaware limited liability company.
(k) "Inventory" means all "inventory", as such term is defined in Section
9-102(48) of the Code, in which Borrower now or hereafter has any right,
title or interest.
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(l) "Loans" means any loan originated by or acquired by Borrower, whether
an original loan, an additional loan or a substitution for an existing
loan including all indebtedness of any Borrower with respect to such loans
or any collateral pledge with respect to such loans including but not
limited to any manufactured homes, together with all other collateral
provided as security for such loans; servicing agreements, backup
servicing agreements, servicing records, insurance, guarantees,
indemnitees, and warranties and proceeds thereof, financing statements and
other agreements or arrangements of whatever character from time to time
relating to the loans, income if any from the loans, all hedges, all
insured closing letters, all escrow instructions covering all or any of
the loans, all collections from such loans, all blocked accounts and all
amounts and deposits therein, all collection accounts and escrow accounts
relating to any loan, all dealer financing agreements, all loan
agreements, all loan documents, all consignment agreements, sale
contracts, security agreements, the right to payment of interest or
finance charges and collateral securing such obligations, and any other
rights and other assets relating to such loans or any interest in the
loans, whether constituting real or personal property, accounts, chattel
paper, equipment, goods, instruments, general intangibles, inventory or
proceeds, or securities backed by or representing an interest in such
loans and any and all replacements, substitutions, distributions on or
proceeds of any and all of the foregoing.
(m) "Proceeds" means all "proceeds", as such term is defined in Section
9-102(64) of the Code.
2. SECURITY INTEREST. Borrower hereby grants to Secured Party a continuing
security interest in all of its right, title and interest in, to and under all
Accounts, Current Accounts, Books, Chattel Paper, Contracts, Documents,
Equipment, Fixtures, General Intangibles, Inventory, Loans and Proceeds
(collectively, the "Collateral"). This grant is made for the purpose of securing
the Obligations owing by Borrower to Secured Party. Borrower promises punctually
to pay the Obligations when it is so required in accordance with the Obligations
and any note or agreement evidencing the Obligations, including the Amended
Note.
3. SUBORDINATION. The security interests in the Collateral granted to
Secured Party may be subordinate to and subject to liens or security interests
which the holders of Senior Debt (as defined in the Amended Loan Agreement) may
now or hereafter have in the Collateral as a result of any indebtedness of
Borrower comprising the Senior Debt. If subordinated, such subordination shall
be evidenced within the provisions of the Amended Loan Agreement, and, if
required by the holders of the Senior Debt, in a separate written subordination
agreement between the Secured Party and the holders of the Senior Debt.
4. WARRANTIES AND COVENANTS. Borrower represents, warrants and covenants
to Secured Party as follows:
(a) Except for the security interests granted hereby and any other
security interests authorized by this Agreement or any other agreement
between Borrower and Secured Party, Borrower is, or, as to Collateral to
be acquired by Borrower after the date
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hereof, will be, the owner of the Collateral free from any adverse lien,
security interest or encumbrance other than those identified on the
attached EXHIBIT A; and Borrower agrees to defend the Collateral and
proceeds thereof against any claims and demands of all persons at any time
claiming the same or any interest therein.
(b) The security interests hereby created are valid and Borrower has
the authority and right to subject the Collateral to the security
interests hereby created.
(c) All financial statements, certificates and other information
concerning the financial condition of Borrower, and proceeds hereafter
furnished by Borrower to Secured Party shall be in all respects true and
correct at the time the same are provided and shall be deemed, for all
purposes, to have been furnished by Borrower to Secured Party for the
purpose of obtaining credit or an extension of credit.
(d) This Agreement has been duly executed and delivered by a duly
authorized officer of Borrower and constitutes the legal, valid and
binding obligation of Borrower, enforceable in accordance with its terms.
(e) Borrower does not conduct Borrower's business under any other
name than that given above, and agrees not to change or reorganize the
business entity under which it does business except upon the Secured
Party's prior written approval.
(f) There are no actions or proceedings either threatened or pending
against Borrower which might result in any material adverse change in
Borrower's financial condition or materially affect any of Borrower's
assets.
All of Borrower's warranties contained in this Section 4 shall be continuing
warranties until Borrower has no remaining Obligations to Secured Party.
5. LOSS OR DEPRECIATION OF COLLATERAL. Borrower shall immediately notify
Secured Party of any event causing a material loss or depreciation in value of
Collateral and the amount of such loss or depreciation.
6. RECORDS, INSPECTION, AUDIT AND COVENANT FOR FURTHER ASSURANCES.
(a) At the request of Secured Party, Borrower will advise Secured
Party of the places where its books of Accounts and records, including all
records of the Collateral and the dispositions made thereof by Borrower
and of its Accounts and all collections thereon, are kept and maintained.
(b) Borrower will keep and maintain such books and records with
respect to the Collateral as Secured Party may from time to time
reasonably prescribe for the purpose of enabling Secured Party to audit
the same.
(c) Borrower shall at all reasonable times and from time to time
allow Secured Party, by or through any of its agents, attorneys or
accountants, to examine or inspect the
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Collateral wherever located and to examine, inspect and make extracts from
Borrower's books and records. Borrower shall do, make, execute and deliver
all such additional and further acts, things, deeds, assurances and
instruments as Secured Party may reasonably require, to assure to Secured
Party its rights hereunder.
7. PRESERVATION AND DISPOSITION OF THE COLLATERAL AND PROCEEDS.
(a) Borrower will keep the Collateral in good condition and will not
waste or destroy any of the same. Borrower will not use the Collateral in
violation of any statute or ordinance.
(b) Borrower will pay promptly when due all taxes, assessments and
governmental charges upon or against the Collateral before the same become
delinquent and before penalties accrue thereon.
(c) At its option, Secured Party may discharge taxes, liens, other
encumbrances or security interests not otherwise authorized by this
Agreement or any other agreement between Borrower and Secured Party at any
time levied or placed on the Collateral and may pay for the maintenance
and preservation of the Collateral. Borrower agrees to reimburse Secured
Party, on demand, for any payment made or any expense incurred by Secured
Party pursuant to the foregoing authorization.
(d) Borrower, at its own expense, shall keep all of the Collateral
fully insured against loss or damage by fire, theft, explosion, business
interruption, and all other risks, in such amounts, with such companies,
under such policies, and in such form as shall be satisfactory to Secured
Party.
(e) Borrower, unless in default, may use, consume and sell Inventory
in carrying on its business in the ordinary course; but a sale in the
ordinary course of business shall not include any transfer or sale in
satisfaction, partial or complete, of a debt owed by Borrower. Borrower
shall not, without the prior written consent of Secured Party, otherwise
sell or dispose of the Collateral or any portion thereof.
8. COLLECTIONS. In the absence of contrary instructions from Secured
Party, Borrower at its own expense shall take all necessary action promptly to
collect its Accounts and Loans. Upon an Event of Default, as such term is
defined in the Amended Loan Agreement, and when and to the extent required by
Secured Party, Borrower shall (a) pay or deliver all cash proceeds of Accounts
and Loans to Secured Party immediately upon receipt in the exact form received
without commingling with other property, or (b) immediately upon receipt,
deposit all such proceeds in a collateral collection account established and
controlled by Secured Party at a financial institution of its choosing, and/or
(c) notify account borrowers that their accounts, Loans and/or contract rights
(to the extent included in Accounts) have been assigned to Secured Party and
shall be paid directly to Secured Party. At its option, at any time after an
Event of Default and at Borrower's expense, Secured Party may, in addition to
its other rights hereunder, sue, compromise on terms it considers proper,
endorse, sell or otherwise deal with the Accounts and Loans and proceeds of any
Collateral either in its own name or that of Borrower. After deduction
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of any expenses, including, without limitation, attorneys fees and expenses, to
the extent permitted under applicable law, all proceeds received by Secured
Party may be applied by Secured Party to payment of any Obligations, if due,
whether at maturity, by acceleration or otherwise, in such order as Secured
Party may choose. At any time and from time to time, Secured Party may make like
application of the balance of the collateral collection account or it may
release all or a part of the balance to Borrower.
9. ASSIGNMENTS, INVOICES AND INFORMATION. At Secured Party's request,
Borrower shall:
(a) give Secured Party assignments in the form specified by Secured
Party of specific Accounts and Loans as the Accounts and Loans arise;
(b) furnish Secured Party with the original or a copy of invoices,
and contracts applicable to each Account and Loan noting thereon, if
Secured Party so requires, Secured Party's assignment and any additional
statement required; and/or
(c) notify Secured Party immediately if any Account or Loan arises
out of a contract with the United States or any of its agencies and take
any action required by Secured Party with reference to the Federal
Assignment of Claims Act.
10. NOTATION OF ASSIGNMENT, INFORMATION AND PAYMENT OF ACCOUNTS. When and
to the extent required by Secured Party, Borrower shall:
(a) mark records of Accounts, Loans and contract rights (to the
extent included in Accounts) in a manner satisfactory to Secured Party to
show Secured Party's interest therein;
(b) furnish to Secured Party satisfactory evidence of performance of
contracts and Loans; and
(c) give Secured Party lists of account borrowers (showing names,
addresses and amounts owing) and such other data concerning its Accounts
and Loans as Secured Party may from time to time specify.
11. FINANCING STATEMENTS; PERFECTION.
(a) Borrower irrevocably authorizes Secured Party to prepare and
file any financing statement, amendments, continuations, and all other
documents, as Secured Party deems necessary to perfect and maintain the
security interest and lien granted herein. This authorization shall remain
in full force and effect and may be relied on by Secured Party as long as
any Obligations remain outstanding.
(b) Borrower agrees to promptly execute and deliver to Secured
Party, concurrently with this Agreement and at any time thereafter, at
Secured Party's request, all financing statements, assignments, promissory
notes, certificates of title, affidavits,
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reports, notices, schedules of Accounts, designations of Inventory,
letters of authority, stock certificates and any and all other documents
and agreements, in form satisfactory to Secured Party, to perfect and
maintain its security interest in the Collateral.
(c) Except as otherwise provided in this Agreement or any other
agreement between Borrower and Secured Party, without the prior written
consent of Secured Party, Borrower will not allow or suffer any adverse
financing statement covering the Collateral, or any portion thereof, to be
on file in any public office.
12. RIGHTS AND REMEDIES ON DEFAULT. Upon the occurrence of any Event of
Default, and at any time thereafter, Secured Party shall have the rights
and remedies of a secured party under the Code in addition to the rights
and remedies provided herein or in any other instrument or agreement
executed by Borrower.
Without limiting the generality of the foregoing, Borrower expressly
agrees that in any such event Secured Party, without demand of performance
or other demand, advertisement or notice of any kind (except the notice
specified below of time and place of public or private sale) to or upon
Borrower or any other person (all and each of which demands,
advertisements and/or notices are hereby expressly waived), may forthwith
collect, receive, appropriate and realize upon the Collateral, or any part
thereof, and/or may forthwith sell, lease, assign, give an option or
options to purchase or sell or otherwise dispose of and deliver the
Collateral (or contract to do so), or any part thereof, in one or more
parcels at public or private sale or sales, at any exchange broker's board
or at any of Secured Party's offices or elsewhere at such prices as
Secured Party may deem best, for cash or on credit or for future delivery
without assumption of any credit risk. Secured Party shall have the right
upon any such public sale or sales and, to the extent permitted by law,
upon any such private sale or sales, to purchase the whole or any part of
the Collateral so sold, free of any right of equity of redemption, which
equity of redemption Borrower hereby releases. Secured Party may require
Borrower to assemble the Collateral and proceeds and make them available
to Secured Party at a place to be designated by Secured Party which is
reasonably convenient to all parties.
Secured Party shall apply the net proceeds of any such collection,
recovery, receipt, appropriation, realization or sale after deducting all
reasonable costs and expenses of every kind incurred therein or incidental
to the care, safe-keeping or otherwise of any or all of the Collateral or
in any way relating to the rights of Secured Party hereunder, including,
without limitation, reasonable attorneys fees and expenses, to the payment
in whole or in part of the Obligations, in such order as Secured Party may
elect, Borrower remaining liable for any deficiency remaining unpaid after
such application, and only after so paying over such net proceeds and
after the payment by Secured Party of any other amount required by any
provision of law, need Secured Party account for the surplus, if any, to
Borrower. To the extent permitted by applicable law, Borrower waives all
claims, damages and demands against Secured Party arising out of the
repossession, retention or sale of the Collateral. Unless the Collateral
is perishable or threatens to decline speedily in value or is of a type
customarily sold on a recognized market, Secured Party will give Borrower
reasonable notice of the time and place of any public sale thereof or of
the time
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after which any private sale or other intended disposition thereof is to
be made. The requirement of reasonable notice shall be met if such notice
is mailed, postage prepaid, to the address of Borrower, at least ten (10)
days before the time of the sale or disposition. Borrower shall pay to
Secured Party on demand any and all expenses, including, without
limitation, reasonable attorneys fees and expenses, to the extent
permitted under applicable law, incurred or paid by Secured Party in
protecting or enforcing the Obligations and other rights of Secured Party
hereunder including its rights to take possession of Collateral and
proceeds thereof.
13. SECURED PARTY'S APPOINTMENT AS ATTORNEY-IN-FACT. Borrower hereby
irrevocably constitutes and appoints Secured Party, with full power of
substitution, as its true and lawful attorney-in-fact with full power and
authority in the place and stead of Borrower and in the name of Borrower or in
its own name, from time to time in the sole and absolute discretion of Secured
Party, for the purpose of carrying out the terms of this Agreement, to take any
and all appropriate action and to execute any and all documents and instruments,
including without limitation, any financing statements necessary or helpful to
perfect or continue Secured Party's security interest in the Collateral, which
may be necessary or desirable to accomplish the purposes of this Agreement. This
power of attorney being coupled by an interest shall be irrevocable so long as
any Obligations remain unpaid. All acts of any such attorney are ratified and
approved, and except for willful misconduct, he or she will not be liable for
any act or omission or for any error of judgment or mistake of law.
14. SECURITY NOT CONTINGENT. Secured Party's rights under this Agreement
shall not be contingent upon the exercise or enforcement by Secured Party of any
other rights or remedies he may have against Borrower or others. No election by
Secured Party to proceed in one form of action or proceeding, or against any
party, or on any obligation, shall constitute a waiver of Secured Party's right
to enforce its rights under this Agreement.
15. GENERAL. Secured Party shall not be deemed to have waived any of its
rights hereunder or under any other agreement or instrument signed by Borrower
unless such waiver be in writing and signed by Secured Party. No delay or
omission on the part of Secured Party in exercising any right shall operate as a
waiver of such right or any other right. A waiver on any one occasion shall not
be construed as a bar to or waiver of any right or remedy on any future
occasion. All of Secured Party's rights and remedies, whether evidenced hereby
or by any other agreement or instrument, shall be cumulative and may be
exercised singularly or concurrently. Any demand upon or notice to Borrower that
Secured Party may elect to give shall be effective when deposited in the mails
addressed to Borrower at its principal place of business. Demands or notices
addressed to Borrower's address at which Secured Party customarily communicates
with Borrower shall also be effective. This Agreement shall be terminated only
by the filing of a termination statement in accordance with the applicable
provisions of the Code and/or when there are no outstanding Obligations and no
commitments on the part of Borrower to Secured Party under any agreement which
might give rise to any Obligations. Prior to such termination this shall be a
continuing agreement in every respect. This Agreement and all rights and
obligations hereunder including matters of construction, validity and
performance, shall be governed by the laws of the State of Michigan. This
Agreement is intended to take effect when signed by Borrower and delivered to
Secured Party. This Agreement may be executed in counterparts, each
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of which shall be deemed to be an original and all of which together shall
constitute one instrument. Facsimile copies of signatures to this Agreement
shall be deemed to be originals, and the parties may rely upon such facsimile
copies to the same extent as the originals.
IN WITNESS WHEREOF, the parties have executed this Amended and Restated
Security Agreement as of the day and year above written.
"BORROWER"
ORIGEN FINANCIAL, INC., a Virginia
corporation
By: /s/ Ronald Klein
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Its: CEO
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"SECURED PARTY"
SUN COMMUNITIES OPERATING LIMITED
PARTNERSHIP, a Michigan limited partnership
By: Sun Communities, Inc., a Maryland
corporation
Its: General Partner
By: /s/ Gary A. Shiffman
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Its: President
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