$232,071,000
FFCA SECURED LENDING CORPORATION
SECURED FRANCHISE LOAN CERTIFICATES, SERIES 1997-1
PURCHASE AGREEMENT
------------------
June 8, 1997
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
World Financial Center, North Tower
New York, New York 10281
▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Section 1. Introduction. FFCA Secured Lending Corporation, a Delaware
corporation (the "Depositor"), has duly authorized the sale of $232,071,000
aggregate principal amount of FFCA Secured Lending Corporation Secured Franchise
Loan Certificates, Series 1997-1, Class IO, Class A-1a, Class A-1b, Class A-2a,
Class A-2b, Class B-1, Class B-2, Class C-1, Class C-2, Class D-1, Class D-2,
Class E-1 and Class E-2 (the "Certificates") to ▇▇▇▇▇▇▇ Lynch, ▇▇▇▇▇▇, ▇▇▇▇▇▇ &
▇▇▇▇▇ Incorporated and ▇▇▇▇▇ ▇▇▇▇▇▇ Inc., as initial purchasers (the "Initial
Purchasers"). The Certificates will evidence the entire beneficial interest in a
trust (the "Grantor Trust Fund") to be formed pursuant to a Grantor Trust
Agreement (the "Grantor Trust Agreement") to be dated as of May 1, 1997, between
LaSalle National Bank, as grantor trust trustee (in such capacity, the "Grantor
Trust Trustee") and the Depositor. The Grantor Trust Fund will consist primarily
of the FFCA
Secured Franchise Loan Trust 1997-1 Secured Franchise Loan-Backed Bonds (the
"Bonds") designated as Class A-1a, Class A-1b, Class A-2a, Class A-2b, Class
B-1, Class B-2, Class C-1, Class C-2, Class D-1, Class D-2, Class E-1 and Class
E-2 (the "Underlying Bonds"). The Bonds will be issued by FFCA Secured Franchise
Loan Trust 1997-1 (the "Owner Trust"), a Delaware business trust to be
established by the Depositor pursuant to an Owner Trust Agreement, dated as of
May 1, 1997 (the "Owner Trust Agreement"), between the Depositor and Wilmington
Trust Company, as owner trustee (the "Owner Trustee").
The Bonds will be issued pursuant to an Indenture, dated as of May 1,
1997, between the Owner Trust and LaSalle National Bank, as indenture trustee
(in such capacity, the "Indenture Trustee" and, in either the capacity as
Grantor Trust Trustee or as Indenture Trustee, the "Trustee"). The Bonds will be
secured by a first priority security interest in, and will be payable solely
from, the assets of the Owner Trust (the "Owner Trust Estate"), which will
consist primarily of a pool (the "Loan Pool") of approximately 384 conventional,
fixed and adjustable rate, monthly pay, first lien commercial loans secured by
real estate and other property used in the operation of chain restaurants (the
"Mortgage Loans") and approximately 167 conventional, fixed and adjustable rate,
monthly pay, first lien commercial loans secured by equipment used in the
operation of such restaurants (the "Equipment Loans" and, together with the
Mortgage Loans, the "Secured Loans"). As of June 1, 1997, the Secured Loans had
an aggregate principal amount of $260,756,045. Unless otherwise specified
herein, references herein to the Mortgage Loans, the Equipment Loans and the
Secured Loans will be deemed not to include any Retained Interest (as defined in
the Memorandum).
The Secured Loans were originated by certain affiliates (the
"Originators") of Franchise Finance Corporation of America, a Delaware
corporation ("FFCA"). On the Closing Date (as defined herein), certain
affiliates of FFCA (each, as "Seller") will transfer all of the Secured Loans to
the Depositor pursuant to a Loan Sale Agreement (the "Loan Sale Agreement"), to
be dated as of May 1, 1997, among FFCA, the Sellers and the Depositor. The
Depositor will in turn assign the Secured Loans to the Owner Trust, which will
simultaneously grant a first priority security interest in the Secured Loans to
secure the Bonds. The Secured Loans will be serviced and special serviced on
behalf of the Owner Trust by FFCA, as master servicer and special servicer (in
such capacity, the "Servicer"), pursuant to a Servicing Agreement, dated as of
May 1, 1997 (the "Servicing Agreement"), among the Owner Trust, the Servicer,
the Indenture Trustee and ABN AMRO Bank N.V., as
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fiscal agent (the "Fiscal Agent").
The Certificates are to be offered and sold by means of a private
placement memorandum (including any amendments or supplements thereto, the
"Memorandum") prepared by the Depositor and pursuant to a Private Placement
Agency Agreement, dated June 4, 1997 (the "Placement Agreement"), among the
Depositor, FFCA and ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated and ▇▇▇▇▇
▇▇▇▇▇▇ Inc., as placement agents, in a transaction exempt from the registration
requirements of the Securities Act of 1933, as amended (the "Securities Act").
Capitalized terms not otherwise defined herein shall have the meanings
assigned thereto in, or incorporated into, the Placement Agreement. All
references to the Offered Certificates in the Placement Agreement (other than in
Section 1(e) thereof) shall be deemed to be references to the Certificates as
defined herein. All references to the Final Memorandum herein and in the
Placement Agreement shall be to the Private Placement Memorandum dated June 8,
1997 and attached hereto as Exhibit A.
The Depositor and FFCA hereby agree with the Initial Purchasers as
follows:
Section 2. Purchase of Certificates. Subject to the terms and
conditions and in reliance upon the representations and warranties and
agreements set forth herein, the Depositor agrees to sell Certificates of Class
IO, Class A-1a, Class A-1b, Class A-2a, Class A-2b, Class B-1, Class B-2, Class
C-1, Class C-2, Class D-1, Class D-2, Class E-1 and Class E-2 in the respective
notional amounts and principal amounts set forth on Schedule A hereto to the
Initial Purchasers as hereinafter provided, and the Initial Purchasers agree to
purchase Certificates of Class IO, Class A-1a, Class A-1b, Class A-2a, Class
A-2b, Class B-1, Class B-2, Class C-1, Class C-2, Class D-1, Class D-2, Class
E-1 and Class E-2 in the respective notional amounts and principal amounts set
forth on Schedule A on the Initial Closing Date at the purchase prices set forth
on the such Schedule A plus accrued interest thereon (or, in the case of the
Class IO Certificates, accreted original issue discount), if any, from June 8,
1997 to the Closing Date. At the time of the delivery of the Certificates to the
Initial Purchasers, the Initial Purchasers shall make such payment to the
Depositor of such purchase prices by wire transfer in immediately available
funds to such account or accounts as the Depositor shall designate.
3
Section 3. Delivery. Delivery of the Class A-1a, Class A-1b, Class
A-2a and Class A-2b Certificates (collectively, the "Class A Certificates") and
the Class IO Certificates shall be made in the form of one or more global
certificates delivered to The Depository Trust Company or a custodian therefor,
except that any Class A or Class IO Certificate to be purchased by an
Institutional Accredited Investor that is not a Qualified Institutional Buyer
shall be delivered in fully registered, certificated form at the offices of
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇, Two World Trade Center, New York, New York at 10:00
a.m. New York City time, on the date hereof, or such other place, time or date
as may be mutually agreed upon by the Initial Purchasers and the Depositor (the
"Closing Date"). The Certificates other than the Class A and Class IO
Certificates shall be delivered in fully registered, certificated form at the
offices and at the time specified above on the Closing Date. Subject to the
foregoing, the Certificates will be registered in such names and such
denominations (subject to the minimum denominations set forth in the Memorandum)
as the Initial Purchasers shall specify in writing to the Depositor and the
Trustee no later than two business days prior to the Closing Date.
Section 4. Confirmation of Representations, Warranties and Other
Agreements Contained in Placement Agreement. (a) The Depositor and FFCA
represent and warrant to the Initial Purchasers, as of the Closing Date, to the
effect set forth in Section 3 of the Placement Agreement. In addition, the
Depositor and FFCA hereby confirm and ratify as of the Closing Date each of
their respective covenants and agreements contained in the Placement Agreement
(other than, with respect to the Certificates only, the agreements contained in
Section 1(e) thereof), including, without limitation, their agreements with
respect to the payment of costs and expenses contained in Section 6 thereof and
with respect to indemnification and contribution contained in Section 8 thereof.
(b) The Initial Purchasers represent and warrant to the Depositor and
FFCA, as of the Closing Date, to the effect set forth in Section 1(d) of the
Placement Agreement. In addition, the Initial Purchasers hereby confirm and
ratify as of the Closing Date each of their covenants and agreements contained
in the Placement Agreement (other than, with respect to the Certificates only,
the agreements contained in Section 1(e) thereof), including, without
limitation, their agreement with respect to indemnification and contribution
contained in Section 8 thereof.
Section 5. Sale of Certificates to the Initial Purchasers. The sale of
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Certificates to the Initial Purchasers will be made without registration of such
Certificates under the Securities Act of 1933, as amended (the "Securities
Act"), in reliance upon the exemption therefrom provided by Section 4(2) of the
Securities Act. Each of the Initial Purchasers hereby represents to the
Depositor and FFCA that (i) it is a Qualified Institutional Buyer within the
meaning of Rule 144A under the Securities Act, (ii) it will not engage in any
activity that would constitute a public offering of the Certificates within the
meaning of Section 4(2) of the Securities Act and (iii) it will not offer or
sell the Certificates by any form of general solicitation or general advertising
(as those terms are used in Regulation D), including the methods described in
Rule 502(c) of Regulation D.
Section 6. Certain Agreements of the Depositor and FFCA. The Depositor
and FFCA covenant and agree with the Initial Purchasers as follows:
(a) If, at any time prior to the earlier of (a) 180th day
following the Closing Date or (b) the resale of all of the Certificates by
the Initial Purchasers, any event involving the Depositor, the Servicer,
the Sellers or the Secured Loans shall occur as a result of which the
Memorandum (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 the light of the circumstances under
which they were made, not misleading, the Depositor and FFCA promptly will
notify the Initial Purchasers and prepare and furnish to the Initial
Purchasers an amendment or supplement to the Memorandum that will correct
such statement or omission.
(b) During the period referred to in Section 6(a), the Depositor
will furnish to the Initial Purchasers without charge copies of the
Memorandum (including all exhibits and documents incorporated by reference
therein), the Grantor Trust Agreement, the Indenture, the Servicing
Agreement, the Owner Trust Agreement, the Management Agreement and the Loan
Sale Agreement, and all amendments or supplements to such documents, in
each case as soon as available and in such quantities as the Initial
Purchasers may reasonably request.
Section 7. Conditions of the Initial Purchasers' Obligations. The
obligations of the Initial Purchasers to purchase the Certificates on the
Closing Date will be subject to the accuracy of the representations and
warranties of the Depositor
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herein and in the Placement Agreement, to the performance by the Depositor and
FFCA of their respective obligations hereunder and under the Placement
Agreement, including, without limitation, the delivery of each of the items
required to be delivered pursuant to Section 5(a) and 5(b) of the Placement
Agreement, and to the following additional conditions precedent:
(a) The Certificates and the Underlying Bonds shall have been
duly authorized, executed, authenticated, delivered and issued, and each of
the Indenture, the Servicing Agreement, the Owner Trust Agreement, the
Management Agreement and the Loan Sale Agreement shall have been duly
authorized, executed and delivered by the respective parties thereto and
shall be in full force and effect and the Secured Loans shall have been
delivered to the Indenture Trustee pursuant to the Indenture.
(b) The Initial Purchasers shall receive certificates, dated the
Closing Date, of the President or any Vice President of the Depositor and
of the President or any Vice President of FFCA to the effect that such
officer has carefully examined this Agreement, the Placement Agreement and
the Memorandum and that, to the best of such officer's knowledge (i) the
representations and warranties of the Depositor and FFCA set forth herein
and in the Placement Agreement are true and correct in all material
respects as of the Closing Date, (ii) the Depositor and FFCA have complied
with all material agreements and satisfied all material conditions on their
parts to be performed or satisfied hereunder or under the Placement
Agreement at or prior to the Closing Date and (iii) nothing has come to the
attention of such officer that would lead such officer to believe that the
Memorandum contains any untrue statement of a material fact or omits to
state any material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading.
(c) The Initial Purchasers shall have received on and as of the
Closing Date an opinion of ▇▇▇▇▇▇▇, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP,
special counsel to the Initial Purchasers, with respect to the validity of
the Grantor Trust Agreement and the Certificates, and other related matters
as the Initial Purchasers may reasonably request.
(d) There shall not have been, in the reasonable opinion of the
Initial Purchasers, any requirement for any material change, amendment or
6
supplement to the Final Memorandum.
(e) On or prior to the Closing Date the Depositor shall have
furnished to the Initial Purchasers such further certificates and documents
as the Initial Purchasers shall reasonably request.
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 referred to above or in Section 5 of the
Placement Agreement shall not be in all material respects reasonably
satisfactory in form and substance to the Initial Purchasers, this Agreement and
all of the Initial Purchasers' obligations hereunder may be canceled by the
Initial Purchasers at or prior to delivery of and payment for the Certificates.
Notice of such cancellation shall be given to the Depositor and FFCA.
Section 1. 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 2. Notices. All communications hereunder shall be in writing
and if sent to (a) ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated, shall be
mailed, delivered by hand or overnight courier or transmitted by facsimile and
confirmed to ▇▇▇▇▇▇▇ Lynch, ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated at World
Financial Center, North Tower, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇, Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇, (b) ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.,
shall be mailed, delivered by hand or overnight courier or transmitted by
facsimile and confirmed to ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇, (c)
the Depositor, shall be mailed, delivered by hand or overnight courier or
transmitted by facsimile and confirmed to the FFCA Secured Lending Corporation
at ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, Facsimile No. (602)
585-2225, Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ (with a copy to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇), or
(d) FFCA, shall be mailed, delivered by hand or overnight courier or transmitted
by facsimile and confirmed to Franchise Finance Corporation of America at ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇,
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ (with a copy to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇).
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Section 3. Representations and Indemnities to Survive. No
investigation made by or on behalf of the Initial Purchasers, the Depositor or
any of the officers, managers, directors, partners or any of the officers,
managers, directors or controlling persons referred to in Section 8 of the
Placement Agreement shall affect the enforceability or validity of the
respective agreements, representations, warranties, indemnities and other
statements of the Depositor and its officers and of the Initial Purchasers set
forth in or made pursuant to this Agreement and the Placement Agreement, and
such agreements, representations, warranties and indemnities and other
statements will survive delivery of and payment for the Certificates.
Section 4. Successors. This Agreement will inure to the benefit of and
be binding upon the parties hereto and their respective successors and the
officers, managers, directors, partners and controlling persons referred to in
Section 8 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 5. Integration; Amendment. This Agreement, together with the
Placement Agreement, sets forth the entire understanding of the parties relating
to the subject matter hereof, and all prior understandings, written or oral,
with respect to the offering of the Certificates (other than the Placement
Agreement) are superseded by this Agreement. Neither this Agreement nor any term
hereof may be changed, waived, discharged or terminated orally, but only by an
instrument in writing, signed by the parties hereto.
Section 6. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
ITS CONFLICTS OF LAWS PRINCIPLES OR RULES.
Section 7. Counterparts. This Agreement may be executed in one or more
counterparts each of which shall be deemed an original.
Section 8. Headings. The section headings in this Agreement have been
inserted as a matter of convenience of reference and are not a part of this
Agreement.
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If the foregoing terms correctly set forth our agreement, please
confirm this letter by signing and returning to us the duplicate copy of this
letter.
Very truly yours,
FRANCHISE FINANCE CORPORATION
OF AMERICA
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Senior Vice President
FFCA SECURED LENDING
CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Senior Vice President
Confirmed and accepted as of the
date first written above.
▇▇▇▇▇▇▇ LYNCH, ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Managing Director
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▇▇▇▇▇ ▇▇▇▇▇▇ INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Managing Director
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Schedule A
Class Principal Balance or Notional Amount
-------------------------------------------------
Certificates ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. Purchase Price (As a %
------------ ----------------------------- ----------------- ------------------------
& ▇▇▇▇▇ Incorporated of Principal or Notional
----------------------------- ------------------------
Amount)
-------
Class A-1a $ 36,750,000 $ 12,250,000 100.000000
Class A-1b 34,539,000 11,513,000 99.953125
Class A-2a 28,500,000 9,500,000 100.000000
Class A-2b 27,328,500 9,109,500 100.000000
Class B-1 14,624,000 0 99.984375
Class B-2 11,452,000 0 100.000000
Class C-1 10,236,000 0 99.953125
Class C-2 8,016,000 0 100.000000
Class D-1 7,312,000 0 100.000000
Class D-2 5,726,000 0 100.000000
Class E-1 2,925,000 0 99.828125
Class E-2 2,290,000 0 100.000000
Class IO 127,224,000 0 5.812500
