BUSINESS LOAN CENTER SBA LOAN-BACKED ADJUSTABLE RATE
CERTIFICATES, SERIES 1997-1
$18,078,507.20 CLASS A CERTIFICATES
PURCHASE AGREEMENT
December 19, 1997
Banc One Capital Corporation
000 Xxxx Xxx Xxxxxx
00xx Xxxxx
Xxxxxxxx, Xxxx 00000
Ladies and Gentlemen:
Section 1. Authorization of Certificates. Business Loan Center,
Inc., a Delaware corporation, (the "Company"), has duly authorized the sale of
$18,078,507.20 in aggregate principal amount of its Business Loan Center SBA
Loan-Backed Adjustable Rate Certificates, Series 1997-1, Class A (the "Class A
Certificates"). The Company also will issue $1,787,984.23 in aggregate principal
amount of its Business Loan Center SBA Loan-Backed Adjustable Rate Certificates,
Series 1997-1, Class B (the "Class B Certificates" and, along with the Class A
Certificates, the "Certificates"). The Class A Certificates and the Class B
Certificates will be transferred by the Company to Business Loan Center
Financial Corp. a wholly-owned, special purpose corporation (the "Subsidiary").
The Certificates will be issued pursuant to a Pooling and Servicing Agreement,
dated as of December 1, 1997 (the "Pooling and Servicing Agreement"), between
the Company and Marine Midland Bank, as trustee thereunder (together with its
successors and assigns, the "Trustee"). The Certificates represent the entire
beneficial ownership interest in a trust fund (the "Trust Fund") created by the
Company which consists primarily of the right to receive payments and certain
other amounts attributable to certain unguaranteed interests (the "Unguaranteed
Interests") in a pool of loans (the "SBA Loans") partially guaranteed by the
U.S. Small Business Administration (the "SBA") which will be sold and
transferred to the Trustee by the Company. Capitalized terms used herein but not
otherwise defined shall have the meanings set forth in the Pooling and Servicing
Agreement.
The Class A Certificates are to be offered and sold by means of a
Confidential Placement Memorandum (including any amendments or supplements
thereto, the "CPM") prepared by the Company and pursuant to a Placement Agency
Agreement, dated December 19, 1997 (the "Placement Agreement"), between the
Company and Rothschild Inc., as placement agent (the "Placement Agent"), in a
transaction exempt from the registration requirements of Section 5 of the
Securities Act of 1933, as amended (the "Securities Act").
During the initial Interest Accrual Period, the Class A Certificates
shall bear interest at a rate equal to 6.60% per annum and the Class B
Certificates shall bear interest at a rate equal to 7.00% per annum. For each
Interest Accrual Period thereafter, the Class A Certificates shall bear interest
at a per annum rate equal to the Prime Rate minus 1.90% and the Class B
Certificates shall bear interest at a per annum rate equal to the Prime rate
minus 1.50%, in each case subject to the adjustments described in the Pooling
and Servicing Agreement.
The Company and the Subsidiary hereby agree with you (the "Initial
Purchaser") as follows:
Section 2. Purchase of Class A Certificates. Subject to the terms
and conditions and in reliance upon the representations and warranties and
agreements set forth herein, (A) the Subsidiary agrees to sell all of the Class
A Certificates to the Initial Purchaser as hereinafter provided, and (B) the
Initial Purchaser agrees to purchase, on the Closing Date (as defined in Section
3 below) such Class A Certificates at a purchase price of $18,035,909.07. At the
time of the delivery of the Certificates to the Initial Purchaser, the Initial
Purchaser shall make such payment to the Subsidiary of such purchase price by
wire transfer in immediately available funds to such account as the Subsidiary
shall designate.
Section 3. Delivery. The Class A Certificates shall be delivered in
fully registered, certificated form in the minimum denominations set forth in
the CPM at the offices of Stroock & Stroock & Xxxxx LLP, New York, New York at
10:00 a.m. New York City time, on December 19, 1997, or such other place, time
or date as may be mutually agreed upon by the Initial Purchaser and the Company
(the "Closing Date"). Subject to the foregoing, the Class A Certificates will be
registered in such names and such denominations as the Initial Purchaser shall
specify in writing to the Company, the Subsidiary and the Trustee.
Section 4. Representations and Warranties of the Company and the
Subsidiary. The Company and the Subsidiary each represent and warrant to the
Initial Purchaser, as of the Closing Date, that:
(i) The CPM does not and will not, and any amendments thereof
or supplement thereof and any additional information and documents
concerning the Class A Certificates delivered by or on behalf of the
Company to prospective purchasers of the Class A Certificates
(collectively, such information and documents, the "Additional Offering
Documents"), each as of their respective dates, and any oral statements
made by the Company to any prospective purchaser of the Class A
Certificates did not or will not, each as of its issue date or date on
which such statement was made and as of the Closing Date, include an
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements, in light of the circumstances
under which they were made, not misleading.
(ii) The Company is a corporation, duly organized, validly
existing and in good standing under the laws of Delaware, has all
corporate power and authority necessary to own or hold its properties and
conduct its business in which it is engaged as
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described in the CPM and has all licenses necessary to carry on its
business as it is now being conducted and is licensed, qualified and in
good standing in each jurisdiction in which the conduct of its business
requires such licensing or qualification. The Subsidiary is a corporation,
duly organized, validly existing and in good standing under the laws of
Delaware.
(iii) The Placement Agreement and this Agreement have been duly
authorized, executed and delivered by the Company, this Agreement has been
duly authorized, executed and delivered by the Subsidiary and, assuming
due authorization, execution and delivery thereof by the Agent, constitute
valid and legally binding obligations of the Company and the Subsidiary,
as the case may be, enforceable against the Company and the Subsidiary, as
the case may be in accordance with their respective terms.
(iv) The Pooling and Servicing Agreement has been duly
authorized, executed and delivered by the Company and, assuming due
authorization, execution and delivery thereof by the Trustee, constitutes
a valid and binding agreement of the Company, enforceable against the
Company in accordance with its terms.
(v) The Multi-Party Agreement has been duly authorized,
executed and delivered by the Company and, assuming due authorization,
execution and delivery thereof by the parties thereto, constitutes a valid
and binding agreement of the Company, enforceable against the Company in
accordance with its terms.
(vi) When executed by the Company and authenticated and
delivered by the Trustee in accordance with the Pooling and Servicing
Agreement and paid for by the purchasers thereof, the Certificates will
have been duly executed, authenticated, issued and delivered and will be
entitled to the benefits of the Pooling and Servicing Agreement.
(vii) Other than as set forth in or contemplated by the CPM,
there are no legal or governmental proceedings pending to which the
Company is a party or of which any property or assets of the Company are
the subject of which, if determined adversely to the Company, would
individually or in the aggregate have a material adverse effect on the
financial position or results of operations of the Company or on the
performance by the Company of its obligations hereunder or under the
Placement Agreement, the Pooling and Servicing Agreement or the
Multi-Party Agreement; and, to the best knowledge of the Company, no such
proceedings are threatened or contemplated by governmental authorities or
self-regulatory agencies or threatened by others.
(viii) The execution and delivery of the Certificates by the
Company, the execution, delivery and performance of this Agreement, the
Pooling and Servicing Agreement, the Multi-Party Agreement (as defined in
the Pooling and Servicing Agreement) and the Placement Agreement by the
Company and the consummation by the Company of the transactions
contemplated herein and in all documents relating to the
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Certificates will not result in any breach or violation of, or constitute
a default under, any material agreement or instrument to which the Company
is a party or to which any of its properties or assets are subject, except
for such of the foregoing as to which relevant waivers or amendments have
been obtained and are in full force and effect, nor will any such action
result in a violation of the Articles of Incorporation or By-Laws of the
Company or any law or any order, decree, rule or regulation of any court
or governmental agency having jurisdiction over the Company or its
properties.
(ix) The Trust created by the Pooling and Servicing Agreement is
not 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 (the "1940 Act").
(x) Assuming the Initial Purchaser's representations are true
and accurate, it is not necessary in connection with the offer, sale and
delivery of the Class A Certificates in the manner contemplated by this
Agreement and the CPM to register the Class A Certificates under the
Securities Act.
(xi) The Class A Certificates satisfy the requirements set forth
in Rule 144A(d)(3) under the Securities Act.
(xii) At the time of execution and delivery of the Pooling and
Servicing Agreement, the Company owned the Unguaranteed Interest in each
of the SBA Loans free and clear of all liens, encumbrances, adverse claims
or security interests ("Liens") and the Company had the power and
authority to transfer the SBA Loans to the Trust and to transfer the Class
A Certificates to the Initial Purchaser.
(xiii) Upon the execution and delivery of the Pooling and
Servicing Agreement, payment by the Initial Purchaser for the Class A
Certificates and delivery to the Initial Purchaser of the Class A
Certificates, the Trust will own the SBA Loans and the Initial Purchaser
will acquire title to the Class A Certificates, in each case free of Liens
except such Liens as may be created or granted by the Initial Purchaser
and those listed in the Pooling and Servicing Agreement.
(xiv) No consent, authorization or order of, or filing or
registration with, any court or governmental agency is required for the
issuance and sale of the Certificates or the execution, delivery and
performance by the Company of this Agreement, the Pooling and Servicing
Agreement, the Multi-Party Agreement or the Placement Agreement, except
such consents, approvals, authorizations, registrations or qualifications
as have been obtained or as may be required under state securities or blue
sky laws in connection with the sale and delivery of the Class A
Certificates in the manner contemplated herein.
(xv) The SBA Loans, individually and in the aggregate, have the
characteristics described in the CPM.
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(xvi) Each of the representations and warranties of the Company
set forth in the Pooling and Servicing Agreement is true and correct in
all material respects.
(xvii) Any taxes, fees and other governmental charges in
connection with the execution, delivery and issuance of this Agreement,
the Placement Agreement, the Multi-Party Agreement, the Pooling and
Servicing Agreement and the Certificates have been or will be paid by the
Company prior to the Closing Date.
(xiii) No adverse selection procedures were used in selecting the
SBA Loans from among the loans that meet the representations and
warranties of the Company contained in the Pooling and Servicing Agreement
and that are included in the portfolio of the Company.
(xix) The Company is licensed, qualified and in good standing in
each state where an SBA Loan was originated to the extent required to
originate and acquire the SBA Loans and to perform its obligations as the
Company hereunder and under the Pooling and Servicing Agreement.
Section 5. Sale of Class A Certificates to the Initial Purchaser.
The sale of the Class A Certificates to the Initial Purchaser will be made
without registration of the Class A Certificates under the Securities Act, in
reliance upon the exemption therefrom provided by Section 4(2) of the Securities
Act.
(a) The Initial Purchaser hereby represents to the Company and
the Subsidiary that:
(i) (a) it is a "qualified institutional buyer" within the meaning
of Rule 144A or an institutional "Accredited Investor" (within the
meaning of Rule 501(a)(1)-(3) under the Securities Act), (b) it is
acquiring the Class A Certificates for its own account or for the
account of such a qualified institutional buyer or an institutional
Accredited Investor purchasing for investment and not for
distribution in violation of the Securities Act, (c) if such person
is such a qualified institutional buyer, is aware that the sale of
the Class A Certificates to it is being made in reliance on Rule
144A or (d) if such person is an institutional Accredited Investor,
will deliver a certificate in the form attached to the Pooling and
Servicing Agreement prior to receipt of Class A Certificates.
(ii) it understands that the Class A Certificates have not been and
will not be registered under the Securities Act, any state
securities or "Blue Sky" law, and may not be reoffered, resold,
pledged or otherwise transferred except (A)(i) to a person whom the
Initial Purchaser reasonably believes is a "qualified institutional
buyer" as defined in Rule 144A of the Securities Act that purchases
for its own account or the account of another qualified
institutional buyer to whom notice is given that the resale, pledge
or transfer is being made in reliance on Rule 144A, (ii) in
certificated form to an institutional Accredited Investor pursuant
to any
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other exemption from the registration requirements of the Securities
Act, subject to (a) the receipt by the Trustee of a letter in the
form attached to the Pooling and Servicing Agreement and (b) the
receipt by the Trustee of such other evidence acceptable to the
Trustee that such reoffer, resale, pledge or transfer is in
compliance with the Securities Act and other applicable laws, (iii)
pursuant to another exemption available under the Securities Act or
(iv) pursuant to a valid registration statement and (B) in
accordance with all applicable securities and "Blue Sky" laws of any
States of the United States or any other applicable jurisdictions.
(iii) it understands that the Class A Certificates will bear a
legend to the following effect, unless the Seller and the Trustee
determines otherwise in accordance with applicable law:
"THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR UNDER
ANY STATE SECURITIES OR BLUE SKY LAW OF ANY STATE. THE HOLDER HEREOF, BY
PURCHASING THIS CERTIFICATE, AGREES THAT THIS CERTIFICATE MAY BE REOFFERED,
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY IN COMPLIANCE WITH THE SECURITIES
ACT AND OTHER APPLICABLE LAWS AND ONLY (1) PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT ("RULE 144A") TO A PERSON THAT THE HOLDER REASONABLY BELIEVES IS
A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A (A "QIB"),
PURCHASING FOR ITS OWN ACCOUNT OR A QIB PURCHASING FOR THE ACCOUNT OF A QIB,
WHOM THE HOLDER HAS INFORMED, IN EACH CASE, THAT THE REOFFER, RESALE, PLEDGE OR
OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (2) IN CERTIFICATED FORM
TO AN INSTITUTIONAL "ACCREDITED INVESTOR" (WITHIN THE MEANING OF RULE
501(a)(1)-(3) UNDER THE SECURITIES ACT) PURCHASING FOR INVESTMENT AND NOT FOR
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, SUBJECT TO (A) THE RECEIPT BY
THE TRUSTEE OF A LETTER SUBSTANTIALLY IN THE FORM PROVIDED IN THE POOLING AND
SERVICING AGREEMENT AND (B) THE RECEIPT BY THE TRUSTEE OF SUCH OTHER EVIDENCE
ACCEPTABLE TO THE TRUSTEE THAT SUCH REOFFER, RESALE, PLEDGE OR TRANSFER IS IN
COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS OR IN EACH CASE IN
ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE UNITED STATES AND
SECURITIES AND BLUE SKY LAWS OF ANY STATE OF THE UNITED STATES AND ANY OTHER
APPLICABLE JURISDICTION, (3) PURSUANT TO ANOTHER EXEMPTION AVAILABLE UNDER THE
SECURITIES ACT AND IN ACCORDANCE WITH ANY APPLICABLE STATE SECURITIES LAWS, OR
(4) PURSUANT TO A VALID REGISTRATION STATEMENT. "
(iv) If it is acquiring any Class A Certificates as a fiduciary or
agent for one or more investor accounts, it has sole investment
discretion with respect to each such
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account and that it has full power to make the acknowledgments,
representations and agreements contained herein on behalf of such
account.
(v) it is duly authorized and possesses the requisite corporate
power to enter into this Agreement.
(vi) There is no action, suit or proceeding pending against or, to
the knowledge of the Initial Purchaser, threatened against or
affecting, the Initial Purchaser before any court or arbitrator or
any government body, agency, or official which could materially
adversely affect the ability of the Initial Purchaser to perform its
obligations under this Agreement.
Section 6. Certain Agreements of the Company. The Company
covenants and agrees with the Initial Purchaser as follows:
(a) If, at any time prior to the 90th day following the Closing
Date, any event involving the Company shall occur as a result of which the
CPM (as then amended or supplemented) would include an untrue statement of
a material fact or omit to state any material fact necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading, the Company promptly will notify the Initial
Purchaser and prepare and furnish to the Initial Purchaser an amendment or
supplement to the CPM that will correct such statement or omission.
(b) During the period referred to in Section 6(a), the Company will
furnish to the Initial Purchaser, without charge, copies of the CPM
(including all exhibits and documents incorporated by reference therein),
the Pooling and Servicing Agreement, and all amendments or supplements to
such documents, in each case as soon as reasonably available and in such
quantities as the Initial Purchaser may reasonably request.
(c) While any Class A Certificates remain outstanding, unless such
Class has been registered, the Company will make available, upon request,
to the Initial Purchaser, any holder and any prospective purchaser of such
Class A Certificates, the information concerning the Company specified in
Rule 144A(d)(4) under the Securities Act.
Section 7. Conditions of the Initial Purchaser's Obligations. The
obligations of the Initial Purchaser to purchase the Class A Certificates on the
Closing Date will be subject to the accuracy of the representations and
warranties of the Company and the Subsidiary herein, to the performance by the
Company of its obligations hereunder and to the following additional conditions
precedent:
(a) The Certificates shall have been duly authorized, executed,
authenticated, delivered and issued, and the Pooling and Servicing
Agreement, the Multi-Party Agreement, the Spread Account Agreement and the
Escrow Agreement dated December 19, 1997 among the Company, the Trustee,
Sterling National Bank and the Initial Purchaser shall have been duly
authorized, executed and delivered by the respective
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parties thereto and shall be in full force and effect, the SBA Loans shall
have been delivered to the Trustee pursuant to the Pooling and Servicing
Agreement and the Spread Account shall have been funded as required by the
Spread Account Agreement.
(b) The Initial Purchaser shall receive a certificate substantially
in the Form attached as Exhibit A, dated the Closing Date, of the
President, Chief Executive Officer, Chief Financial Officer or any
Executive or Senior Vice President of the Company to the effect that such
officer has carefully examined this Agreement, the Placement Agreement,
the CPM and the Pooling and Servicing Agreement and that, to the best of
such officer's knowledge (i) since the date information is given in the
CPM, there has not been any material adverse change in the condition,
financial or otherwise, or in the earnings, results of operations,
business affairs or business prospects of the Company, whether or not
arising in the ordinary course of business, or the ability of the Company
to perform its obligations hereunder or under the Pooling and Servicing
Agreement or in the characteristics of the SBA Loans except as
contemplated by the CPM or as described in such certificates, (ii) the
representations and warranties of the Company set forth herein and in the
Placement Agreement are true and correct as of the Closing Date, as though
such representations and warranties had been made on and as of such date,
(iii) the Company has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied hereunder and under
the Pooling and Servicing Agreement, at or prior to the Closing Date, (iv)
the representations and warranties of the Company in the Pooling and
Servicing Agreement are true and correct, as of the Closing Date, as
though such representations and warranties had been made on and as of such
date, and (v) nothing has come to the attention of such officer that would
lead such officer to believe that the CPM, and any amendment thereof or
supplement thereto, as of its date and as of the Closing Date, or any
Additional Offering Document (as defined in the Placement Agreement)
contains an untrue statement of a material fact or omits to state any
material fact necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading.
(c) The Class A Certificates shall have been rated no less than
"AAA" by Xxxx & Xxxxxx Credit Rating Co. ("Xxxx & Xxxxxx"); such rating
shall not have been rescinded and no public announcement shall have been
made by Duff & Xxxxxx that the rating of the Class A Certificates has been
placed under review.
(d) The Initial Purchaser shall have received copies of all opinions
addressed to Xxxx & Xxxxxx in connection with this transaction.
If any of the conditions specified in this Section 7 shall not have been
fulfilled in all material respects when and as provided in this Agreement, or if
any of the opinions and certificates mentioned above shall not be in all
material respects reasonably satisfactory in form and substance to the Initial
Purchaser, this Agreement and all of the Initial Purchaser's obligations
hereunder may be canceled by the Initial Purchaser at or prior to delivery of
and payment for the Certificates. Notice of such cancellation shall be given to
the Company in writing, or by telephone or telegraph confirmed in writing.
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Section 8. Intentionally Omitted.
Section 9. Severability Clause. Any part, provision, representation,
or warranty of this Agreement which is prohibited or is held to be void or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof.
Section 10. Notices. All communications hereunder will be in
writing and shall be deemed to have been duly given if personally delivered
at or mailed by overnight mail, certified mail or registered mail, postage
prepaid, and effective only upon receipt and if sent to the Initial
Purchaser, will be delivered to Banc One Capital Corporation, 000 Xxxx Xxx
Xxxxxx, 00xx Xxxxx, Xxxxxxxx, Xxxx 00000, Attention: Xx. Xxxx
Xxxxxx-Xxxxxxxx; or if sent to the Company or the Subsidiary, will be
delivered to Business Loan Center, Inc., 000 Xxxxx Xxxxxx, 00xx Xxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Xx. Xxxxxx Xxxxxxxxxxxx.
Section 11. Representations and Indemnities to Survive. The
respective agreements, representations, warranties, indemnities and other
statements of the Company and its officers, the Subsidiary and of the Initial
Purchaser set forth in or made pursuant to this Agreement will remain in full
force and effect, regardless of any investigation made by or on behalf of the
Initial Purchaser, the Company or any of the controlling persons referred to in
Section 7 of the Placement Agreement, and will survive delivery of and payment
for the Certificates.
Section 12. Successors. This Agreement will inure to the benefit of
and be binding upon the parties hereto and their respective successors and the
officers, directors and controlling persons referred to in Section 7 of the
Placement Agreement and their respective successors and assigns, and, except as
specifically set forth herein, no other person will have any right or obligation
hereunder.
Section 13. Applicable Law. THIS AGREEMENT WILL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
REGARD TO ITS CONFLICT OF LAW PROVISIONS.
Section 14. Counterparts, Etc. This Agreement supersedes all prior
or contemporaneous agreements and understandings relating to the subject matter
hereof other than the Placement Agreement between the Initial Purchaser and the
Company. In the event of any conflict between the terms of this Agreement and
the terms of the Placement Agreement, the terms of this Agreement shall govern.
Neither this Agreement nor any term hereof may be changed, waived, discharged or
terminated except by a writing signed by the party against whom enforcement of
such change, waiver, discharge or termination is sought. This Agreement may be
signed in any number of counterparts each of which shall be deemed an original,
which taken together shall constitute one and the same instrument.
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If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the undersigned a counterpart hereof,
whereupon this letter and your acceptance shall represent a binding agreement
between the Company and the Initial Purchaser.
Very truly yours,
BUSINESS LOAN CENTER, INC.
By: ______________________________________
Name:
Title:
BUSINESS LOAN CENTER FINANCIAL CORP.
By: _____________________________________
Name:
Title:
The foregoing Agreement is hereby confirmed and accepted as of the date first
above written.
BANC ONE CAPITAL CORPORATION
By: _______________________________
Name:
Title:
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