EXHIBIT 10.3
THIS
NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY APPLICABLE STATE SECURITIES LAW AND MAY NOT BE SOLD
OR TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER SUCH ACT AND LAW OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF SUCH ACT AND LAW. THIS NOTE MAY BE
TRANSFERRED ONLY IN COMPLIANCE WITH THE CONDITIONS SPECIFIED
HEREIN.
SENIOR SECURED PROMISSORY NOTE
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| $10,000,000 |
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September 11, 2007
6:00 p.m. EST |
FOR VALUE RECEIVED, on or before
September 11, 2008, subject to an Extension (as defined below)
(the “ Maturity Date ”), Origen Financial L.L.C.
(“ Borrower ”) promises to pay to the order of
the William M. Davidson Trust u/a/d 12/13/04 (“ Lender
”) at 2300 Harmon Road, Auburn Hills, Michigan 48326, the
principal amount of TEN MILLION AND NO/100 DOLLARS ($10,000,000)
(“ Total Principal Amount ”), or such amount
less than the Total Principal Amount which is outstanding from time
to time if the total amount outstanding under this Senior Secured
Promissory Note (“ Note ”) is less than the
Total Principal Amount, together with accrued but unpaid interest
thereon as provided below. The Maturity Date may be extended by
Borrower for up to two, sixty-day periods (each, an “
Extension ”) upon payment by Borrower to Lender of a
fee in the amount of $116,666 for each such Extension. Interest on
the unpaid principal balance hereof from time to time outstanding
shall accrue for the period from and including the date hereof, to
but excluding the date this Note is paid in full, at the fixed rate
per annum equal to eight percent (8%), calculated on the basis of
actual days elapsed in a year of 365 days. Borrower shall pay
such interest, unless earlier payment is required hereunder, in
cash in arrears on the last day of each three-month period during
which this Note remains outstanding (each an “ Interest
Payment Date ”) with the first Interest Payment Date
occurring on December 31, 2007. If an Event of Default (as
defined below) occurs or if this Note is not paid when due by
maturity, acceleration or otherwise, then notwithstanding the
above, interest shall be payable thereafter at the rate which is
six percent (6%) per annum in excess of the rate described above
(the “ Default Rate ”). In no event shall the
aggregate interest rate payable under this Note exceed the Maximum
Rate. The term “ Maximum Rate ,” as used herein,
shall mean at the particular time in question the maximum rate of
interest, which, under applicable law, may then be charged on this
Note.
The principal of and all accrued but
unpaid interest on this Note shall be due and payable in full on
the Maturity Date.
Borrower may prepay all or any
portion of the principal of this Note at any time without payment
of any premium or penalty upon at least thirty (30) days prior
written notice to Lender.
Unless
otherwise agreed to in writing, or otherwise required by applicable
law, payments will be applied first to unpaid accrued interest,
then to principal, and any remaining amount to any unpaid
collection costs. All payments of principal of or interest on this
Note shall be made in lawful money of the United States of America
in immediately available funds, at the address of Lender indicated
above, or such other place as the holder of this Note shall
designate in writing to Borrower. If any payment of principal of or
interest on this Note shall become due on a day which is not a
Business Day (as hereinafter defined), such payment shall be made
on the next succeeding Business Day and any such extension of time
shall be included in computing interest in connection with such
payment. As used herein, the term “ Business Day
” shall mean any day other than a Saturday, Sunday or any
other day on which national banking associations are authorized to
be closed. The books and records of Lender shall be prima
facie evidence of all outstanding principal of and accrued
and unpaid interest on this Note.
This Note is issued by Borrower
pursuant to the provisions of the Senior Secured Loan Agreement of
even date herewith (the “ Loan Agreement ”) by
and between Borrower and Lender. Payment of this Note is secured by
a Security Agreement of even date herewith (the “ Security
Agreement ”), by and between Borrower and Lender,
covering certain collateral as more particularly described therein.
All capitalized terms used but not defined herein have the meanings
ascribed to them in the Loan Agreement.
This Note, the Loan Agreement, the
Security Agreement and all other documents evidencing, securing,
governing, guaranteeing and/or pertaining to this Note, including
but not limited to those documents described above, are hereinafter
collectively referred to as the “ Loan Documents
.” The Lender is entitled to th
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