EX-10.37







Exhibit 10.37




Execution Version




ORIGEN FINANCIAL, INC.

ORIGEN FINANCIAL LLC

27777 Franklin Road

Suite 1700

Southfield, Michigan 48034




May 1, 2009




Mr. Peter Scherer

Chief Operating Officer

Origen Financial, Inc.

27777 Franklin Road

Suite 1700

Southfield, Michigan 48034




Dear Peter,




     Origen Financial, Inc. (“Parent”), Origen Financial, LLC ( “Company”) and you (“Executive”)
are parties to that certain Employment Agreement dated December 28, 2006 and amended July 1, 2008
(the “2006 Employment Agreement”). The 2006 Employment Agreement is scheduled to expire in
accordance with its terms on October 7, 2009. This letter agreement (the “2009 Agreement”) is
entered into effective as of April 4, 2009 (the “Effective Date”) and is intended to reflect and
memorialize the agreements made among Parent, Company and Executive regarding Executive’s
employment under the 2006 Employment Agreement.



     1. Background. Parent, Company and Executive each acknowledges that pursuant to the
Company’s Asset Disposition and Management Plan, which was approved by Parent’s shareholders in
June, 2008, and subsequently implemented by Parent and Company, the nature of the business of
Parent and Company has changed dramatically during 2008, including: (1) the sale of the Company’s
unsecuritized loan portfolio; (2) the sale of the Company’s servicing assets and platform; (3) the
sale of certain bond assets; (4) the refinancing of the Company’s senior debt; (5) the sale of the
Company’s origination platform; and (6) the downsizing of the Parent’s and Company’s workforce from
over 300 employees to approximately 23 current employees with the expectation that the employee
force will normalize at 8 employees with several consultants by the third quarter of 2009.



 









 





     2. Termination of Employment. In light of the dramatic changes to Parent’s and
Company’s business and consequential changes in their need for management services, Parent, the
Company and Executive each hereby agrees that Executive’s employment under the 2006 Employment
Agreement hereby is terminated on the Effective Date. All provisions of the 2006 Employment
Agreement, with the exception of Sections 10, 13, 15, 16 and 17 of the 2006 Employment Agreement
which shall survive in accordance with their respective terms, hereby are terminated and of no
further force or effect, effective at the close of business on the day immediately preceding the
Effective Date. From the Effective Date forward, all aspects of the employment and compensation
agreements among Parent, Company and Executive will be governed by the surviving provisions of the
2006 Employment Agreement and by the provisions of this Agreement.



     3. Compensation and Other Payments. In respect of Executive’s service to Parent and
the Company pursuant to the terms of the 2006 Employment Agreement, as modified by this agreement,
Company will pay to Executive the following amounts:




     a. In recognition of Executive’s performance as Chief Operating Officer in preserving
the Company’s and Parent’s assets during the difficult 2008 economic climate, the Board of
Directors has granted, and the Company agrees to pay, to Executive a bonus of $150,000, to
be paid on October 5, 2009.




     b. The termination of the 2006 Employment Agreement shall not in any way negate or
relieve the Company’s obligation to pay Executive the $825,000 change-of-control payment
which was earned in 2008 under the terms of the 2006 Employment Agreement and will be paid
to Executive on July 1, 2009.




     c. The Company shall pay Executive a monthly severance payment of $25,000, payable in
accordance with Company’s usual pay practices (and in any event no less frequently than
monthly) from the Effective Date through March 31, 2010.




     d. The Company shall pay Executive a lump-sum severance payment in the amount of
$400,000 on March 31, 2010.




     e. The Company shall pay Executive the amounts due him under the Company’s Capital
Accumulation Plan in the amount of $280,000 on November 15, 2011.



     4. Cooperation in Future Matters. Executive hereby agrees that for a period of 18
months following the Effective Date (the “Term”) he shall cooperate with Company’s reasonable
requests relating to matters that pertain to Executive’s previous employment by Company, including,
without limitation, providing information or limited consultation as to such matters, participating
in legal proceedings, investigations or audits on behalf of Company, or otherwise making himself
reasonably available to Company for other related purposes. Any such cooperation shall be performed
at scheduled times taking into consideration Executive’s other commitments, and Executive shall be
compensated at a reasonable hourly or per diem rate to be agreed upon by the parties to the extent
such cooperation is required on more than an occasional



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and limited basis. Executive shall not be
required to perform such cooperation to the extent it conflicts with any requirements of
exclusivity of services for another employer or otherwise, nor in any manner that in the good faith
belief of Executive would conflict with his rights under or ability to enforce this Agreement.



     5. Indemnification for Future Acts. In respect of services provided and related acts
taken by Executive on behalf of the Company or Parent after the Effective Date, the Company and
Parent each hereby indemnifies Consultant to the full extent of the indemnities provided to
officers and directors of the Company and Parent, respectively, under the applicable
indemnification provisions of the Certificate of Formation of Company and the Certificate of
Incorporation of the Parent, respectively, as each may be amended from time to time, and to the
fullest extent permitted under Delaware law. Company agrees that, to the extent reasonably
available, Consultant will be named as an additional insured under Company’s Directors’ and
Officers’, Errors and Omissions and other similar insurance policies during the Term.



     If you agree that the provisions in this letter accurately and completely set forth our
understandings and agreements with respect to your employment and compensation, please so
acknowledge by signing and returning a copy of this letter agreement.



	 	 	 
	 

	 	      Sincerely,
	 
	 

	 	  /s/ Ronald A. Klein
	 

	 	Ronald A. Klein, CEO






ACKNOWLEDGED AND AGREED:





	 	 	 
	      /s/ Peter Scherer
	 	 
	 

Peter Scherer

	 	 






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