Exhibit 10.198
LITCHFIELD HYPOTHECATION CORP. 1997-B
NOTE PURCHASE AGREEMENT
June 28, 1999
LITCHFIELD HYPOTHECATION CORP.1997-B, a Delaware corporation, and
its successors and assigns (the "Issuer"), and LITCHFIELD FINANCIAL
CORPORATION, a Massachusetts corporation ("Litchfield"), hereby agree with
UNION BANK OF CALIFORNIA, N.A. (the "Purchaser"), as follows:
1. The Notes. The Issuer has authorized the execution and
delivery to The Chase Manhattan Bank, as trustee (the "Trustee"), of an
Indenture of Trust, dated as of August 1, 1997, as amended (the "Indenture"),
providing for the issuance and sale by the Issuer of its Hypothecation Loan
Collateralized Notes (the "Notes"), in one or more series, secured by the
Trust Estate granted to the Trustee by the Issuer pursuant to the Indenture,
which includes, among other assets, a pool of certain hypothecation Loans
owned by the Issuer and serviced by Litchfield Financial Corporation, a
Massachusetts corporation (in such capacity, the "Servicer"). Unless
otherwise specifically defined herein, all capitalized terms shall have the
meanings ascribed to them in the Indenture.
2. Purchase and Sale. In reliance upon the representations and
warranties contained herein and subject to the terms and conditions set forth
herein, (i) the Issuer agrees to sell to the Purchaser, and the Purchaser
agrees to purchase from the Issuer, $1,776,419.96 principal amount of
Hypothecation Loan Collateralized Notes, Series A and (ii) the Seller agrees
to sell to the Purchaser, and the Purchaser agrees to purchase from the
Seller, $3,123,580.04 principal amount of Hypothecation Loan Collateralized
Notes, Series C (the foregoing notes are referred to herein collectively as
the "Notes") at an aggregate price (the "Purchase Price") equal to the
aggregate outstanding principal amount of the Notes on the Closing Date (as
hereinafter defined). The Purchase Price shall be allocated among the Seller
and the Issuer in proportion to the principal amount of Notes sold by each.
The Purchase Price shall be payable to or upon the instructions of the Issuer
and the Seller on the Closing Date by wire transfer in immediately available
Federal funds.
3. The Closing; Delivery of the Notes. The closing of the
purchase and sale of the Notes pursuant hereto (the "Closing") shall be held
on June 28, 1999 (the "Closing Date"). The Closing shall take place by mail
or at such place as the parties hereto shall designate. At the Closing, the
Issuer and the Seller, respectively, will deliver to the Purchaser, against
payment of the Purchase Price therefor, one Series A Note in the denomination
of $1,776,419.96 and one Series C Note in the denomination of $3,123,580.04
registered in the Purchaser's name, or in the name of its nominee; provided
however, that if the Purchaser requests the Issuer or the Seller in writing
not less than one Business Day prior to the Closing Date to deliver to the
Purchaser Notes in other denominations (authorized pursuant to the Indenture)
that equal in the aggregate the denominations specified above, the Seller and
the Issuer shall comply with such request.
4. Conditions of the Purchaser's Obligation. The obligation
of the Purchaser set forth in Section 2 to purchase the Notes on the Closing
Date shall be subject to the accuracy as of the date hereof and as of the
Closing Date of (i) the representations and warranties of the Issuer set
forth in Section 5 hereof, (ii) the representations and warranties of the
Seller in the Purchase and Sale Agreement and in Section 5 hereof, and (iii)
the representations and warranties of the Servicer in the Servicing
Agreement, and shall also be subject to the following additional conditions:
(a) Each of this Purchase Agreement, the Notes, the Indenture, the
Servicing Agreement, and the Purchase and Sale Agreement (collectively,
the "Agreements") shall have been duly authorized, executed and
delivered by each of the parties thereto and be in full force and
effect; and
(b) The Purchaser shall have received copies of all documents and
other information as it may reasonably request, in form and substance
reasonably satisfactory to it, with respect to such transactions and the
taking of all proceedings in connection therewith.
5. Representations and Warranties. (a) The Issuer represents and
warrants to the Purchaser as of the date hereof as follows:(i) Each of the
Agreements to which the Issuer is a party has been duly authorized, executed
and delivered by the Issuer and, assuming due execution and delivery by the
other parties thereto, constitutes a legal, valid and binding agreement of
the Issuer enforceable against the Issuer in accordance with its terms,
subject to applicable bankruptcy, insolvency and similar laws affecting
creditors' rights generally, and subject, as to enforceability, to general
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law). The Notes have been validly issued and are
entitled to the benefits of the Indenture and constitute valid instruments
enforceable in accordance with their terms subject to applicable bankruptcy,
insolvency and similar laws affecting creditors' rights generally, and
subject, as to enforceability, to general principles of equity (regardless of
whether enforcement is sought in a proceeding in equity or at law).
(ii) Neither the issuance or sale of the Notes, nor the
consummation of any other of the transactions contemplated in any of the
Agreements to which the Issuer is a party, nor the execution, delivery
or performance of the terms of any of the Agreements to which the Issuer
is a party, has or will result in the breach of any term or provision of
the certificate of incorporation or by-laws of the Issuer, or conflict
with, result in a breach or violation on the part of the Issuer of or
the acceleration of indebtedness under or constitute a default under,
the terms of any indenture or other agreement or instrument to which the
Issuer is a party or by which it is bound, or any statute or regulation
applicable to the Issuer or any order applicable to the Issuer of any
court, regulatory body, administrative agency or governmental body
having jurisdiction over the Issuer.
(iii) No consent, approval, authorization of, registration or
filing with, or notice to, any governmental or regulatory authority,
agency, department, commission, board, bureau, body or instrumentality
is required on the part of the Issuer for the execution and delivery or
by the Issuer with any of the Agreements to which the Issuer is a party
or the Notes, or the issuance of the Notes, or the consummation by the
Issuer of any transaction contemplated under any of the Agreements to
which the Issuer is a party, or such consent, approval or authorization
has been obtained or such registration, filing or notice has been made
(or, with respect to assignments of mortgages and financing statements,
will be made by the Issuer as contemplated by the Indenture).
(iv) There is no action, suit or proceeding against, or investigation of, the
Issuer pending or, to the best of its knowledge, threatened,
before any court, administrative agency or other tribunal
which, either individually or in the aggregate, (A) may result
in any material adverse change in the financial condition,
properties, or assets of the Issuer or in any material and
adverse impairment of the right or ability of the Issuer to
perform its obligations under the Agreements, or (B) asserts
the invalidity of any of the Agreements to which either the
Issuer is a party or the Notes or (C) seeks to prevent the
consummation of any of the transactions contemplated by any of
the Agreements to which the Issuer is a party.
(v)
(vi) (v) Based in part on the representations and warranties contained in
Section 6 hereof, the Issuer is not, and the sale of the Notes
in the manner contemplated by this Purchase Agreement will not
cause the Issuer to be, subject to registration or regulation
as an investment company or affiliate of any investment
company under the Investment Company Act of 1940, as amended.
(vi) Each Loan included in the Trust Estate securing the Notes has
been delivered to the Trustee or its collateral agent, together with an
assignment thereof by the Issuer, which immediately prior to such
assignment will own full legal and equitable title to each Loan, free
and clear of any lien, charge, encumbrance or participation or ownership
interest in favor of any other Person. Upon endorsement and delivery to
the Trustee or its collateral agent of the executed original promissory
notes and execution and delivery of the Indenture, all of the Issuer's
right, title and interest in and to the Loans will be validly and
effectively transferred to the Indenture Trustee as collateral security
for the benefit of the Holders of the Notes.
(vii) On the Closing Date after giving effect to the sale of the
Notes to the Purchaser hereunder, the aggregate principal amount of all
Hypothecation Loan Collateralized Notes outstanding shall be
$41,359,206.81 of which $8,625,465.99 aggregate principal amount shall
be Series A Notes owned of record by the Purchaser, $10,498,579.60
aggregate principal amount shall be Series A Notes owned by Green Tree
Financial Servicing Corporation ("Green Tree"), $1,541,153.87 aggregate
principal amount shall be Series B Variable Funding Notes owned of
record by the Seller, $7,034,989.52 aggregate principal amount shall be
Series C Notes owned of record by the Purchaser, $9,068,627.78 aggregate
principal amount shall be Series C Notes owned of record by Green Tree
and $4,590,390.05 aggregate principal amount shall be Series C Notes
owned of record by Berkshire Bank. Such outstanding amounts are fully
authorized (and do not exceed any limitations under the Indenture).
(b) The Seller represents and warrants to the Purchaser as of the date
hereof as follows:
(i) Each of the Agreements to which the Seller is a party has been
duly authorized, executed and delivered by the Seller and, assuming due
execution and delivery by the other parties thereto, constitutes a
legal, valid and binding agreement of the Seller enforceable against the
Seller in accordance with its terms, subject to applicable bankruptcy,
insolvency and similar laws affecting creditors' rights generally, and
subject, as to enforceability, to general principles of equity
(regardless of whether enforcement is sought in a proceeding in equity
or at law).
(ii) Neither the sale of the Notes, nor the consummation of any
other of the transactions contemplated in any of the Agreements to which
the Seller is a party, nor the execution, delivery or performance of the
terms of any of the Agreements to which the Seller is a party, has or
will result in the breach of any term or provision of the certificate of
incorporation or by-laws of the Seller, or conflict with, result in a
breach or violation on the part of the Seller of or the acceleration of
indebtedness under or constitute a default under, the terms of any
indenture or other agreement or instrument to which the Seller is a
party or by which it is bound, or any statute or regulation applicable
to the Seller or any order applicable to the Seller of any court,
regulatory body, administrative agency or governmental body having
jurisdiction over the Seller.
(iii)No consent, approval, authorization of, registration or filing
with, or notice to, any governmental or regulatory authority, agency,
department, commission, board, bureau, body or instrumentality is
required on the part of the Seller for the execution and delivery or by
the Seller with any of the Agreements to which the Seller is a party, or
the sale of the Notes, or the consummation by the Seller of any
transaction contemplated under any of the Agreements to which the Seller
is a party, or such consent, approval or authorization has been obtained
or such registration, filing or notice has been made (or, with respect
to assignments of mortgages and financing statements, will be made by
the Seller as contemplated by the Indenture).
(iv) There is no action, suit or proceeding against, or
investigation of, the Seller pending or, to the best of its knowledge,
threatened, before any court, administrative agency or other tribunal
which, either individually or in the aggregate, (A) may result in any
material adverse change in the financial condition, properties, or
assets of the Seller or in any material and adverse impairment of the
right or ability of the Seller to perform its obligations under the
Agreements, or (B) asserts the invalidity of any of the Agreements to
which either the Seller is a party or the Notes or (C) seeks to prevent
the consummation of any of the transactions contemplated by any of the
Agreements to which either the Seller is a party.(v) Neither the
Seller nor any Affiliate of the Seller nor any Person authorized or
employed by the Seller will, directly or indirectly, offer or sell any
Note or similar security in a manner which would render the sale of the
Notes pursuant to this Purchase Agreement a violation of Section 5 of
the 1933 Act, or require registration pursuant thereto. Based in part
on the representations and warranties contained in Section 6 hereof, the
offering and sale of the Notes by the Seller to Purchaser at closing are
exempt from the registration requirements of the 1933 Act and the
Indenture is not required to be qualified under the Trust Indenture Act
of 1939, as amended.
The Issuer and the Seller agree that the representations and warranties
set forth in this Section 5 shall be fully assignable to the initial party to
whom the Purchaser may sell the Notes.
6. The Purchaser's Representations. The Purchaser represents
to the Issuer as follows:
(a) The Purchaser is acquiring the Notes for its own account. The
Purchaser understands that the Notes are not being registered under the
Securities Act of 1933, as amended (the "1933 Act"), or any State
securities or "Blue Sky" law and are being sold to the Purchaser in
reliance upon the Purchaser's representations contained herein in a
transaction that is exempt from the registration requirements of the
1933 Act and any applicable State law. The Purchaser agrees that the
Notes may not be Transferred unless subsequently registered under the
1933 Act and any applicable State securities or "Blue Sky" law or unless
exemptions from the registration requirements of the 1933 Act and
applicable State laws are available. Subject to the express provisions
of this Purchase Agreement and the Indenture, the disposition of the
Notes shall at all times be within the control of the owner thereof.
Notwithstanding anything to the contrary, express or implied, in this
Agreement, the Indenture or otherwise, the Purchaser understands that
none of the Trust, the Note Registrar or the Indenture Trustee is
obligated to register the Notes under the 1933 Act or any other
securities law and that any Transfer in violation of the provisions of
the Indenture shall be void ab initio. The foregoing shall in no way
limit the ability or the right of the Purchaser to sell participation
interests in any Notes owned by the Purchaser.
(b) The Purchaser is either (i) an "accredited investor" as
defined in rule 501(a) under the 1933 Act or (ii) a Qualified
Institutional Buyer as defined in Rule 144A under the 1933 Act.
(c) The Purchaser is authorized to enter into this Purchase
Agreement and to purchase the Notes. This Purchase Agreement has been
duly authorized executed and delivered by the Purchaser and constitutes
the Purchaser's legal, valid and binding agreement enforceable against
the Purchaser in accordance with its terms, subject to applicable
bankruptcy, insolvency, and similar laws affecting creditors' rights
generally, and subject, as to enforceability, to general principles of
equity (regardless of whether enforcement is sought in a proceeding in
equity or at law).
(d) The Purchaser has sufficient knowledge and experience in
financial and business matters as to be capable of evaluating the merits
and risks of an investment in the Notes and the Purchaser is able to
bear the economic risk of investment in the Notes. The Purchaser
acknowledges that in connection with the making of its investment
decision, the Purchaser has been afforded the opportunity to ask
questions of, and receive answers regarding, and to conduct its
investigation of, the Issuer, the Loans and the Loan Collateral, the
Trust Estate, the Notes and the Servicer as is sufficient and necessary
for the Purchaser to make an informed investment decision with respect
to the Notes.
(e) No placement agent, broker, finder or investment banker has
been employed by or has acted for the Seller or the Purchaser in
connection with the transactions with the Purchaser contemplated in this
Purchase Agreement or otherwise in connection with the Notes; and the
Purchaser is solely responsible for, and the Purchaser shall indemnify
the Seller for the fees, expenses or commissions of any placement agent,
broker, finder or investment banker and any other person or entity
claiming to have acted in such capacity for or under the authority of
the Purchaser.
(f) The Purchaser agrees to treat, and to take no action
inconsistent with the treatment of, the Notes as debt of the Issuer for
tax purposes.
7. Notices. All notices and other communications hereunder shall
be in writing and shall be sent by first class registered or certified mail,
return receipt requested, or by facsimile transmission, provided such
transmission is confirmed by overnight mail delivered by a nationally
recognized overnight delivery service, addressed (a) if to the Purchaser,
Union Bank of California, N.A., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, and (b) if to the
Issuer or Litchfield, c/o Litchfield Financial Corporation, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Executive Vice President, or to
such other address as the Issuer or Litchfield shall have furnished to the
Purchaser in writing. Any notice so given by registered or certified mail
shall be deemed to have been given five days after being deposited in a
depository of the United States mails. Any notice given by means of a
nationally recognized overnight delivery service shall be deemed to have been
given upon receipt thereof.
8. Miscellaneous. (a) This Purchase Agreement shall be
construed and enforced in accordance with and governed by the law of the
State of New York.
(b) Any action or proceeding relating in any way to this Purchase
Agreement may be brought and enforced in the courts of the State of New York
or of the United States for the Southern District of New York and each of the
Issuer, Litchfield and the Purchaser irrevocably submits to the jurisdiction
of each such court (and any appellate court from any thereof) in respect of
any such action or proceeding.
Each of the Issuer, Litchfield and the Purchaser irrevocably
waives, to the fullest extent permitted by applicable law, any objection that
it may now or hereafter have to the laying of venue of any such action or
proceeding in the Supreme Court of the State of New York or the United States
District Court for the Southern District of New York, and any claim that any
such action or proceeding brought in any such court has been brought in an
inconvenient forum.
(c) This Agreement supersedes all prior agreements and
understandings relating to the subject matter hereof.
(d) The headings in this Purchase Agreement are for the purposes
of reference only and shall not limit or define the meaning hereof.
(e) This Purchase Agreement shall be binding upon the respective
successors and assigns of the parties hereto and shall inure to the benefit
of and be enforceable by any registered owner or owners at the time of each
Note then issued, or any part thereof. This Purchase Agreement may be
assigned by the Purchaser to an eligible purchaser of the Notes in connection
with a permitted transfer of the Notes in accordance with the Indenture.
(f) This Purchase Agreement may be amended, waived, discharged or
terminated only by an instrument in writing signed by the party against which
enforcement of such amendment, waiver, discharge or termination is sought.
(g) This Purchase Agreement may be executed simultaneously in
several counterparts, or by different parties in separate counterparts, each
of which counterparts shall be an original, but all of which shall constitute
one instrument.
9. No Recourse. It is expressly understood and agreed by the
parties hereto that (a) the representations, undertakings and agreements
herein made on the part of the Issuer are made and intended not as personal
representations, undertakings and agreements by Litchfield but are made and
intended for the purpose of binding only the Issuer, (b) nothing herein
contained shall be construed as creating any liability on Litchfield to
perform any covenant either expressed or implied contained herein, all such
liability, if any, being expressly waived by the parties hereto, and (c)
under no circumstances shall Litchfield be personally liable for the payment
of any indebtedness or expenses of the Issuer or be liable for the breach or
failure of any obligation, representation, warranty or covenant made or
undertaken by the Issuer under this Agreement; it being understood that the
foregoing shall in no way limit the obligations of Litchfield under the
Guarantee or the Purchase and Sale Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Purchase
Agreement to be duly executed on the date first written above.
LITCHFIELD HYPOTHECATION CORP. 1997-B
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Executive Vice President
LITCHFIELD FINANCIAL CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Executive Vice President
UNION BANK OF CALIFORNIA, N.A.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President