UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1996
---------------------------
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
--------------------- ------------------
Commission file number
1-13116
FRANCHISE FINANCE CORPORATION OF AMERICA
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 86-0736091
- --------------------------------------------------------------------------------
(State of Incorporation) (I.R.S. Employer
Identification Number)
The Perimeter Center
17207 North Perimeter Drive
Scottsdale, Arizona 85255
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrants' telephone number including area code (602) 585-4500
-------------------------------
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
------ ------
Number of shares outstanding of each of the issuer's classes of common stock as
of May 1, 1996:
Common Stock, $0.01 par value 40,350,849
- ----------------------------- ----------------
Class Number of Shares
<PAGE>
PART 1 - FINANCIAL INFORMATION
Item l. Financial Statements.
------- ---------------------
FRANCHISE FINANCE CORPORATION OF AMERICA
CONSOLIDATED BALANCE SHEETS - MARCH 31, 1996 AND DECEMBER 31, 1995
(Amounts in thousands except share data)
(Unaudited)
<TABLE>
<CAPTION>
March 31, December 31,
1996 1995
--------- ------------
ASSETS
------
<S> <C> <C>
Investments:
Investments in Real Estate, at cost:
Land $ 315,403 $ 304,641
Buildings and Improvements 461,402 448,427
Equipment 39,576 41,512
--------- ---------
816,381 794,580
Less-Accumulated Depreciation 176,344 176,232
--------- ---------
Net Real Estate Investments 640,037 618,348
Mortgage Loans Receivable 216,457 199,486
--------- ---------
Total Investments 856,494 817,834
Cash and Cash Equivalents 1,758 2,067
Accounts and Notes Receivable, net of allowances
of $2,300 in 1996 and $2,000 in 1995 10,952 6,820
Other Assets 17,960 16,783
--------- ---------
Total Assets $ 887,164 $ 843,504
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
Liabilities:
Accounts Payable and Accrued Expenses $ 8,276 $ 5,608
Dividends Payable 18,158 18,133
Senior Unsecured Notes due 2000 - 2005 198,765 198,702
Other Unsecured Notes Payable (Note 1) 59,661 -
Unsecured Notes Payable to Bank 95,000 110,000
Mortgage Payable to Affiliate 8,500 8,500
Rent Deposits 5,581 5,630
Other Liabilities 2,685 3,114
--------- ---------
Total Liabilities 396,626 349,687
--------- ---------
Shareholders' Equity:
Common Stock, par value $.01 per share, authorized 200 million
shares, issued and outstanding 40,350,849 shares in 1996 and
40,294,822 shares in 1995 404 403
Capital in excess of par value 548,579 547,478
Cumulative Net Income 74,447 60,670
Cumulative Dividends (132,892) (114,734)
--------- ---------
Total Shareholders' Equity 490,538 493,817
--------- ---------
Total Liabilities and Shareholders' Equity $ 887,164 $ 843,504
========= =========
</TABLE>
<PAGE>
FRANCHISE FINANCE CORPORATION OF AMERICA
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED MARCH 31, 1996 AND 1995
(Amounts in thousands except share data)
(Unaudited)
1996 1995
------- --------
REVENUES:
Rental $23,120 $20,730
Mortgage Loan Interest 5,984 1,964
Investment Income and Other 563 537
-------- --------
29,667 23,231
-------- --------
EXPENSES:
Depreciation and Amortization 5,128 5,275
Operating, General and Administrative 3,464 2,896
Property Costs 550 299
Interest 6,509 2,013
Related Party Interest 243 240
-------- --------
15,894 10,723
-------- --------
Income Before Gain on Sale of Property 13,773 12,508
Gain on Sale of Property 4 1,199
-------- --------
Net Income $13,777 $13,707
======= =======
Net Income Per Share $.34 $.34
==== ====
Weighted Average Common and Common
Equivalent Shares Outstanding 40,424,902 40,250,719
========== ==========
<PAGE>
FRANCHISE FINANCE CORPORATION OF AMERICA
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
FOR THE THREE MONTHS ENDED MARCH 31, 1996
(Amounts in thousands)
(Unaudited)
<TABLE>
<CAPTION>
Capital in
Common Excess of Cumulative Cumulative
Stock Par Value Net Income Dividends Total
----- --------- ---------- --------- --------
<S> <C> <C> <C> <C> <C>
BALANCE, December 31, 1995 $403 $547,478 $60,670 $(114,734) $493,817
Capital contributions -
dividend reinvestment plan 1 1,101 - - 1,102
Net income - - 13,777 - 13,777
Dividends declared -
$.45 per share - - - (18,158) (18,158)
---- -------- ------- --------- --------
BALANCE, March 31, 1996 $404 $548,579 $74,447 $(132,892) $490,538
==== ======== ======= ========= ========
</TABLE>
<PAGE>
FRANCHISE FINANCE CORPORATION OF AMERICA
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1996 AND 1995
(Amounts in thousands)
(Unaudited)
<TABLE>
<CAPTION>
1996 1995
--------- ----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 13,777 $ 13,707
Adjustments to net income:
Depreciation and amortization 5,128 5,275
Gain on sale of property (4) (1,199)
Provision for uncollectible mortgages and notes 712 -
Other 2,167 1,403
--------- ---------
Net cash provided by operating activities 21,780 19,186
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property (31,768) (38,036)
Investment in mortgage loans (18,847) (4,731)
Investment in notes receivable (4,280) (1,200)
Improvement of property (250) (26)
Proceeds from sale of property 5,093 2,460
Receipt of mortgage payoffs 40 -
Collection of mortgage principal 1,971 602
--------- ---------
Net cash used in investing activities (48,041) (40,931)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Dividends paid (18,133) (18,113)
Capital contributions - dividend reinvestment plan 1,102 -
Proceeds from bank borrowings 46,000 36,000
Proceeds from issuance of other unsecured notes 59,655 -
Repayment of bank borrowings and loan fees (62,672) -
--------- ---------
Net cash provided by financing activities 25,952 17,887
--------- ---------
NET DECREASE IN CASH AND CASH
EQUIVALENTS (309) (3,858)
CASH AND CASH EQUIVALENTS, beginning of period 2,067 12,095
--------- ---------
CASH AND CASH EQUIVALENTS, end of period $ 1,758 $ 8,237
========= =========
Supplemental Disclosure of Noncash Activities:
Mortgage loan obtained as part of property sale proceeds,
net of deferred gain $418 $ -
==== ===
</TABLE>
<PAGE>
FRANCHISE FINANCE CORPORATION OF AMERICA
----------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
MARCH 31, 1996
--------------
(1) OTHER UNSECURED NOTES:
----------------------
In February 1996, FFCA issued unsecured notes consisting of $30 million
of 6.78% notes due February 20, 2002 and $30 million of 7.02% notes due February
20, 2003, with related discounts totaling $162,000 and $177,000, respectively,
at March 31, 1996. Interest on the notes is payable semi-annually in arrears on
each May 30 and November 30, commencing May 30, 1996, with principal due at
maturity. The proceeds of the unsecured notes were used to pay down FFCA's
revolving acquisition line of credit. The notes may not be redeemed prior to
their respective maturities.
<PAGE>
Part I -- Financial Information
- -------------------------------
Item 2. Management's Discussion and Analysis of
---------------------------------------
Financial Condition and Results of Operations
---------------------------------------------
General
- -------
Franchise Finance Corporation of America (FFCA) is a fully integrated and
self-administered real estate investment trust (REIT) which invests in chain
restaurant real estate throughout the United States. FFCA provides financing to
chain restaurant operators with experienced management in established restaurant
chains principally through sale and leaseback transactions and participating
mortgage loans. FFCA and its predecessor companies have provided financing to
the chain restaurant industry since 1981. FFCA's portfolio of properties is
diversified by tenant, restaurant concept and geographic location. At March 31,
1996, FFCA's portfolio included 1,550 restaurant properties operated by
approximately 400 restaurant operators in over 35 chains in 46 states.
Liquidity and Capital Resources
- -------------------------------
Rental and mortgage loan interest revenue generated by this portfolio of
properties has, and will continue to, comprise the majority of the cash
generated from operations. Net cash provided by operations was $21.8 million in
1996 as compared to $19.2 million in 1995. Cash generated from operations is
held in temporary investment securities pending distribution to the shareholders
in the form of quarterly dividends. This cash also may be used on an interim
basis to fund investments in portfolio properties.
During the quarter ended March 31, 1996, FFCA acquired or financed 58 restaurant
properties totaling approximately $55 million. These portfolio properties were
funded by cash generated from operations and proceeds from bank borrowings.
During the quarter, FFCA sold 16 properties and related equipment, three of
which represented the lessees' exercise of their purchase option on the
properties. One additional purchase option exercised by the lessee was financed
by FFCA as a mortgage loan. Cash proceeds from these sales, the collection of
mortgage loan principal payments and the receipt of mortgage loan payoffs,
approximating $7 million in total, were used to partially fund new portfolio
investments in 1996. Property investments net of sale proceeds increased to $48
million in 1996 from $41 million in 1995, reflecting FFCA's continuing focus on
the growth of the portfolio through real estate investments.
Currently, FFCA's primary source of funding for new investments is a $250
million unsecured acquisition loan facility obtained from NationsBank in
December 1995. This two-year revolving credit facility bears annual interest
(payable monthly) at LIBOR (London Interbank Offered Rate) plus 1.5%, as
compared to the prior loan facility's original rate of LIBOR plus 2.25% during
1995. The interest rate in effect at March 31, 1996 was 6.94%. This variable
rate acquisition loan facility is periodically paid down through the issuance of
fixed rate debt.
In February 1996, FFCA issued unsecured notes consisting of $30 million of 6.78%
notes due February 20, 2002 and $30 million of 7.02% notes due February 20,
2003. Interest on these fixed rate notes is payable semi-annually in arrears on
each May 30 and November 30, commencing May 30, 1996, with principal due at
maturity. The notes may not be redeemed prior to their respective maturities.
The proceeds of the unsecured notes were used to pay down the revolving credit
facility discussed above.
At March 31, 1996, FFCA had cash and cash equivalents totaling $1.8 million and
$155 million available on its revolving credit facility. FFCA's anticipated
investments include commitments made to several large
<PAGE>
restaurant operators including Arby's, Fuddruckers, Applebee's, Burger King and
Wendy's to acquire or finance (subject to FFCA's customary underwriting
procedures) approximately 215 restaurant properties over the next twelve months.
These commitments totaled aproximately $215 million as of March 31, 1996. FFCA
anticipates funding these specific commitments, and other investments in
restaurant properties, through amounts available through its revolving credit
facility, issuance of additional unsecured debt or issuance of additional equity
securities of FFCA.
FFCA declared a first quarter dividend of $.45 per share, or $1.80 per share on
an annualized basis, payable on May 20, 1996 to shareholders of record on May
10, 1996. Management of FFCA believes that cash generated from operations will
be sufficient to meet operating requirements and provide the level of
shareholder dividends required to maintain its status as a REIT.
Results of Operations
- ---------------------
Total revenues for the quarter ended March 31, 1996 rose to $29.7 million from
$23.2 million for the comparable quarter of 1995. Portfolio investments were the
primary source of revenue increases, despite the sale of 34 properties in the
past 12 months. Portfolio investments in the first quarter of 1996, totaling
approximately $55 million, are represented by approximately $19 million in
mortgage loans, approximately $32 million in property subject to operating
leases and approximately $4 million in unsecured notes receivable. Since these
investments occurred throughout the quarter, their weighted average balance in
the first quarter is equivalent to approximately $19 million of investments and
the impact of these 1996 investments on rental revenue and mortgage interest
income will not be fully reflected until the second quarter of 1996. Lease and
loan base rates on new investments ranged from approximately 10% to 11.5%, with
a weighted average rate of 10.6%. Both the leases and participating mortgage
loans generally provide for contingent revenues based on a percentage of the
gross sales of the related restaurants.
Rental revenues include both rental payments received from lessees and rent
guaranty insurance payments. Rental revenue collected under the rent guaranty
insurance policies for the first quarter of 1996 decreased to $547,000 from $1
million in the first quarter of 1995 due to expiring rent insurance policies.
Rent guaranty insurance policies covering FFCA's properties will continue to
expire at various dates, with the majority of the policies expiring in 1998;
therefore, rental revenue from rent guaranty insurance for the remainder of 1996
is expected to be lower than in 1995.
The restaurant leases and loans generally provide that lessees make monthly
payments equal to the greater of a fixed base rate or a percentage of the gross
sales of the restaurants. Percentage rentals approximated $1.1 million for the
first quarter of 1996 which remains unchanged from the first quarter of 1995.
FFCA reported net gains totaling $4,000 on the sale of sixteen restaurant
properties during the quarter, as compared to a net gain of $1.2 million on the
sale of four properties during the quarter ended March 31, 1995. Of the sixteen
properties sold during the quarter, twelve were properties that had been
underperforming or vacant and the sale of these properties will result in a
savings of over $100,000 in 1996 in property tax and other property related
expenses.
The remaining revenues in 1996 and 1995 are primarily attributable to interest
earned on temporary investments and fees charged to affiliates for
administrative services performed. These revenues remained unchanged between
quarters.
The increase in interest expense from $2 million in 1995 to $6.5 million in 1996
is due to the use of borrowings in the last twelve months for the investment in
restaurant properties. Although FFCA's cost of borrowings is expected to
continue to be lower in 1996 than in 1995, debt and related interest expense
will be higher than 1995 amounts as a result of increased borrowings for
continued portfolio investment.
Operating, general and administrative expenses reflected a net increase of
approximately $570,000, or 20%. During the quarter, FFCA provided reserves of
$300,000 on certain unsecured receivables and $400,000 on
<PAGE>
certain mortgage loans related primarily to two restaurant operators whose
performance indicated that the carrying amount of these assets may not be fully
recoverable. Underperforming leases and loans are administered by FFCA's
property management and legal services personnel who maximize recovery through a
combination of payment restructurings, property dispositions and tenant
substitutions.
Income before gain on the sale of property rose to $13.8 million in 1996 from
$12.5 million in 1995 primarily due to the growth of FFCA's portfolio in the
preceeding twelve months. After considering the decrease in gain on the sale of
property from $1.2 million in 1995 to $4,000 in 1996, FFCA reported net income
of $13.8 million, or $.34 per share for the quarter ended March 31, 1996 which
was unchanged from the quarter ended March 31, 1995.
Tenant Concentration
- --------------------
During the three months ended March 31, 1996 and 1995, one lessee, Foodmaker,
Inc. ("Foodmaker"), accounted for approximately 11% and 14%, respectively, of
total rental and mortgage loan interest revenues of FFCA. Foodmaker operates and
franchises Jack In The Box restaurants. The relative decrease in the percentage
of FFCA's revenue from Foodmaker between 1995 and 1996 is due to the fact that
FFCA's portfolio is growing and Foodmaker is becoming a relatively smaller
portion of the entire portfolio. This decrease is expected to continue. The
following table represents selected financial data of Foodmaker, Inc. and
Subsidiaries as reported by Foodmaker in its January 21, 1996 Form 10-Q.
<PAGE>
Foodmaker, Inc. and Subsidiaries
Selected Financial Data (unaudited)
(in thousands except per share data)
<TABLE>
<CAPTION>
Unaudited Consolidated Balance Sheet Data:
January 21, 1996 October 1, 1995
---------------- ---------------
<S> <C> <C>
Current Assets $115,716 $ 97,889
Noncurrent Assets 559,361 564,785
Current Liabilities 138,576 132,017
Noncurrent Liabilities 500,558 499,404
</TABLE>
<TABLE>
<CAPTION>
Unaudited Consolidated Statements of Operations Data:
Sixteen Weeks Ended
-----------------------------------------
January 21, 1996 January 22, 1995
---------------- ----------------
<S> <C> <C>
Gross Revenues $330,630 $293,680
Costs and Expenses (including taxes) 325,940 365,971
-------- --------
Net Earnings (Loss) $ 4,690 $(72,291)
======== ========
Net earnings (loss ) per share - primary and fully diluted $.12 $(1.87)
==== ======
</TABLE>
Revenues increased $36.9 million, or 12.6%, to $330.6 million in 1996 from
$293.7 million in 1995 due to an increase in restaurant sales, offset in part by
a decline in distribution sales.
Sales by Foodmaker-operated Jack In The Box restaurants increased $38.5 million.
The sales improvement is primarily due to an increase in the average number of
Foodmaker-operated restaurants to 866 in 1996 from 811 in 1995, and in part by
an increase in per store average sales for comparable restaurants of
approximately 10.9%. Distribution sales of food and supplies declined
approximately $2.7 million primarily due to a $5.2 million decline in sales to
Family Restaurants, Inc. (FRI) and others, offset by an increase in sales to
franchisees.
Foodmaker recorded a loss in 1995 relating to its equity in FRI of $57.2
million, most of which was the result of the complete write-down of its
investment in FRI due to the write-off by FRI of the goodwill attributable to
its Chi-Chi's Mexican restaurant chain. FRI's management determined that it
would be unlikely that the company would recover the goodwill of its Chi-Chi's
Mexican restaurants as a result of negative publicity regarding the nutritional
value of Mexican food. Restaurant operating costs for Jack In The Box increased
principally due to the increase in average number of Foodmaker-operated
restaurants and variable costs associated with increased sales. These costs
declined as a percentage of sales in 1996 in comparison to the similar period in
1995. Selling, general and administrative expenses for Jack In The Box decreased
$4.5 million principally due to the inclusion of an $8 million settlement with
its stockholders in the first quarter of 1995. Advertising and promotion costs
increased $4.4 million in comparison to the similar period in 1995 due to costs
of aggressive promotions and increased advertising related to higher sales in
1996.
Foodmaker indicates that it expects that sufficient cash flow will be generated
from operations so that, combined with other financing alternatives available to
it, Foodmaker will be able to meet all of its debt service requirements, as well
as its capital expenditures and working capital requirements, for the
foreseeable future.
* * * * * *
In the opinion of management, the FFCA financial information included in this
report reflects all adjustments necessary for fair presentation. All adjustments
are of a normal recurring nature.
Part II -- Other Information
- ----------------------------
Item 6. Exhibits and Reports on Form 8-K.
(a) The following is a complete list of exhibits filed as part of this
Form 10-Q. For electronic filing purposes only, this report contains Exhibit 27,
Financial Data Schedule. Exhibit numbers correspond to the numbers in the
Exhibit Table of Item 601 of Regulation S-K.
99.1 First amendment to credit agreement among Franchise Finance
Corporation of America, Certain Lenders and NationsBank of
Texas, N.A. as Administrative Lender
<PAGE>
(b) During the quarter covered by this report, FFCA filed the following reports
on Form 8-K:
Form 8-K dated January 25, 1996
Item 5. Other Events--$200,000,000 Credit Agreement with
NationsBank of Texas, N.A.
Item 7. Financial Statements and Exhibits--Credit
Agreement, Guaranty Agreement, Promissory Note
and Subordination Agreements
Form 8-K dated February 14, 1996
Item 5. Other Events--Distribution Agreement with
Merrill Lynch & Co., Merrill Lynch, Pierce,
Fenner & Smith Incorporated, NationsBanc
Capital Markets, Inc. and Smith Barney Inc.
related to Medium-Term Notes
Item 7. Financial Statements and Exhibits--Distribution
Agreement, Legal
Opinion of Kutak Rock, and Officer's Certificate
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
FRANCHISE FINANCE CORPORATION OF AMERICA
Date: May 14, 1996 By /s/ John R. Barravecchia
---------------------------------------------
John R. Barravecchia, Chief Financial Officer
and Treasurer
Date: May 14, 1996 By /s/ Catherine F. Long
---------------------------------------------
Catherine F. Long, Vice President Finance
and Principal Accounting Officer
<PAGE>
EXHIBIT INDEX
The following is a complete list of exhibits filed as part of this Form 10-Q.
For electronic filing purposes only, this report contains Exhibit 27, Financial
Data Schedule. Exhibit numbers correspond to the numbers in the Exhibit Table of
Item 601 of Regulation S-K.
Sequentially
Exhibit No. Description Numbered Page
- ----------- ----------- -------------
99.1 First amendment to credit agreement among
Franchise Finance Corporation of America,
Certain Lenders and NationsBank of Texas,
N.A. as Administrative Lender
EXHIBIT 99.1
FIRST AMENDMENT TO CREDIT AGREEMENT
THIS FIRST AMENDMENT TO CREDIT AGREEMENT (this "First Amendment"),
dated as of February 23, 1996, is entered into among FRANCHISE FINANCE
CORPORATION OF AMERICA, a Delaware corporation ("Company"), the banks listed on
the signature page hereof (the "Lenders"), and NATIONSBANK OF TEXAS, N.A., in
its individual capacity ("NationsBank"), and in its capacity as administrative
agent for the Lenders (the "Administrative Lender").
A. Company, NationsBank and Administrative Lender heretofore entered
into that certain Credit Agreement, dated as of December 27, 1995 (the "Credit
Agreement"; the terms defined in the Credit Agreement and not otherwise defined
herein shall be used herein as defined in the Credit Agreement).
B. Company, NationsBank and Administrative Lender desire to amend the
Credit Agreement to (i) increase the Commitment, (ii) make other financial
institutions Lenders party thereto, and (iii) make certain other amendments
thereto.
NOW, THEREFORE, in consideration of the covenants, conditions and
agreements hereafter set forth, and for other good and valuable consideration,
the receipt and adequacy of which are all hereby acknowledged, the parties
hereto covenant and agree as follows:
1. AMENDMENTS TO CREDIT AGREEMENT.
(a) The dollar amount of "$200,000,000" set forth in (i) the BACKGROUND
section, (ii) the definition of "Commitment" in Section 1.1 and (iii) Section
2.3(a) of the Credit Agreement is hereby amended to be "$250,000,000".
(b) The words "or Event of Default" set forth on the last line of page
2 of the Credit Agreement in the definition of "Applicable Margin" are hereby
deleted.
(c) The definition of "Interest Hedge Agreements" set forth in Section
1.1 of the Credit Agreement is hereby deleted in its entirety and the following
is hereby substituted in lieu thereof:
"Interest Hedge Agreements means any interest rate swap
agreements, interest cap agreements, interest rate collar agreements,
or any similar agreements or arrangements designed to hedge the risk of
variable interest rate volatility, or foreign currency hedge, exchange
or similar agreements, on terms and conditions reasonably acceptable to
Administrative Lender (evidenced by Administrative Lender's consent in
writing), as
<PAGE>
such agreements or arrangements may be modified, supplemented, and in
effect from time to time."
(d) The last sentence of the definition of "LIBOR Rate" set forth in
Section 1.1 of the Credit Agreement is hereby deleted in its entirety.
(e) The words "on the Business Day" set forth on the third line of the
definition of "LIBOR Rate Basis" in Section 1.1 of the Credit Agreement are
hereby deleted and the words "two Business Days" are hereby inserted in lieu
thereof.
(f) The reference to "Section 4.3(iv)" in the definition of "Term Loan
Conversion Fee" in Section 1.1 of the Credit Agreement is hereby amended to
refer to "Section 3.3(v)".
(g) The first sentence of Section 2.1(a) of the Credit Agreement is
hereby deleted in its entirety and the following is hereby substituted in lieu
thereof:
"Each Lender severally agrees, on the terms and subject to the
conditions hereinafter set forth, to make Advances under the Revolving
Loan to Company on any Business Day during the period from the Closing
Date until the Conversion Date, in an aggregate principal amount not to
exceed at any time outstanding such Lender's Specified Percentage of
the Commitment."
(h) There shall be added after the first sentence in the initial
paragraph on page 24 of the Credit Agreement the following sentence:
"Administrative Lender shall give prompt notice (which may be
by telecopy or telephonic, to be confirmed by telecopy) of its receipt
of a Borrowing Notice to each Lender."
(i) The reference to "1:00 p.m." in the second sentence in the initial
paragraph on page 24 of the Credit Agreement is hereby amended to refer to "2:00
p.m."
(j) The reference to "Article IV" in the first line of Section 2.2(b)
on page 24 of the Credit Agreement is hereby amended to refer to "Article III".
(k) The third line of Section 2.6(b) of the Credit Agreement is hereby
amended by adding the word "second" between the words "the" and "Quarterly" on
said line.
(l) The word "borrower" on the fourth line of Section 2.11 on page 30
of the Credit Agreement is hereby amended to be "borrow".
(m) The references to "Section 9.9" in Section 2.13(a) and (b) of the
Credit Agreement are hereby amended to refer to "Section 9.8".
- 2 -
<PAGE>
(n) Section 2.15 of the Credit Agreement is hereby deleted in its
entirety and the following is hereby substituted in lieu thereof:
"2.15. Extension of Conversion Date. During each of 1996 and
1997, Company may notify Administrative Lender in writing by no later
than October 1 of each such year of its desire to extend the Conversion
Date (and, consequently, the Maturity Date) for an additional 12
months. If such notice is given, Administrative Lender, no later than
November 15 of each such year, will notify Company in writing of
Lenders' decision whether to extend the Conversion Date (and,
consequently, the Maturity Date). Extensions of the Conversion Date
(and, consequently, the Maturity Date) shall be at the option and in
the sole discretion of Lenders, and the decision to extend the
Conversion Date shall require the consent of all Lenders. If either
Company or Administrative Lender fail to give notice within the time
prescribed above, the Conversion Date (and, consequently, the Maturity
Date) shall be the then present Conversion Date (and, consequently, the
then present Maturity Date), unless otherwise extended by the parties
hereto. Any extension of the Conversion Date (and, consequently, the
Maturity Date) pursuant to this Section 2.15 shall not (i) require any
renewal Note unless otherwise requested by Administrative Lender and
(ii) be effective until and unless Company shall pay to Administrative
Lender, for the account of Lenders in accordance with their Specified
Percentages, a Revolving Loan Extension Fee based on the amount of the
Commitment and the Index Debt Rating in effect on the date of extension
of the Conversion Date at the following per annum percentages,
applicable in the following situations:"
Applicability Percentage
------------- ----------
Category 1 - There is no Index Debt Rating or the 0.25%
- ----------
Index Debt Rating is the following: below BBB- by
S&P or below Baa3 by Moody's
Category 2 - The Index Debt Rating is the 0.1875%
- -----------
following: BBB- by S&P or Baa3 by Moody's
Category 3 - The Index Debt Rating is the 0.10%
- -----------
following: BBB or BBB+ by S&P or Baa2 or Baa1 by
Moody's
Category 4 - The Index Debt Rating is the 0.08%
- -----------
following: A- or better by S&P or A3 or better by
Moody's
For purposes of the foregoing, if the Index Debt Rating established by S&P or
Moody's shall fall within a different category, the Revolving Loan Extension Fee
shall be determined by reference to whichever Index Debt Rating shall fall
within the inferior (or numerically lower) category.
(o) Clause (iii) within the second parenthetical of Section 3.2 of the
Credit Agreement is hereby deleted and the following is substituted in lieu
thereof:
- 3 -
<PAGE>
"(iii) have been specifically waived by Administrative Lender,
to the extent permitted pursuant to Section 9.1)"
(p) The references to "Applicable Environmental Laws" in Section 4.11
of the Credit Agreement are hereby amended to refer to "applicable Environmental
Laws".
(q) The reference to "Section 6.9" in Section 4.19 of the Credit
Agreement is hereby amended to refer to "Section 6.8".
(r) The reference to "Restricted Subsidiaries" in the penultimate line
of Section 5.5(a) of the Credit Agreement is hereby amended to refer to
"Consolidated Subsidiaries".
(s) The first sentence of Section 5.12 of the Credit Agreement is
hereby deleted and the following is substituted in lieu thereof:
"Any portion of any Advance under the Facility which is loaned
by Company to any Subsidiary of Company shall be evidenced by
Intercompany Notes in form and substance acceptable to Administrative
Lender, and there shall be no prohibition on the ability of the Company
to pledge to Administrative Lender each such Intercompany Note."
(t) Article V of the Credit Agreement is hereby amended by adding a new
Section 5.15 thereto to read as follows:
"5.15 Interest Hedge Agreements. Company shall maintain an
Interest Hedge Agreement or Agreements such that, after giving effect
to such Interest Hedge Agreements, at least 50% of the aggregate
Indebtedness of the Company and its Subsidiaries outstanding at any
time is subject to a fixed interest rate per annum for a term of at
least two years."
(u) The reference to "Sections 8.1(a), (b), (c) and (d)" in Section
7.1(e) of the Credit Agreement is hereby amended to refer to "Sections 7.1(a),
(b), (c) and (d)".
(v) Section 7.2 of the Credit Agreement is hereby deleted and the
following is hereby substituted in lieu thereof:
"7.2. Remedies Upon Default. If an Event of Default described
in Section 7.1(g) shall occur, the Commitment shall be immediately
terminated and the aggregate unpaid principal balance of and accrued
interest on all Advances shall, to the extent permitted by applicable
Law, thereupon become due and payable concurrently therewith, without
any action by Administrative Lender or any lender, and without
diligence, presentment, demand, protest, notice of protest or intent to
accelerate, or notice of any other kind, all of which are hereby
expressly waived. Subject to the foregoing sentence, if any Event of
Default shall occur and be continuing, Administrative
- 4 -
<PAGE>
Lender may at its election (provided (i) Administrative Lender has sent
notice to all Lenders of its intention to do any one or more of the
following and within five Business Days of such notice Majority Lenders
have not notified Administrative Lender not to take such action or (ii)
Administrative Lender in good faith determines that immediate action is
necessary to be taken to protect the Rights of the Lenders), and shall
at the direction of Majority Lenders, do any one or more of the
following:
(a) Declare the entire unpaid balance of all Advances
immediately due and payable, whereupon it shall be due and payable
without diligence, presentment, demand, protest, notice of protest or
intent to accelerate, or notice of any other kind (except notices
specifically provided for under Section 7.1), all of which are hereby
expressly waived (except to the extent waiver of the foregoing is not
permitted by applicable Law);
(b) Terminate the Commitment;
(c) Reduce any claim of Administrative Lender and Lenders to
judgment;
(d) Exercise any rights afforded under any Loan Papers, by
Law, including but not limited to the UCC, at equity, or otherwise."
(w) Section 7.3 of the Credit Agreement is hereby amended by adding the
following sentence at the end thereof to read as follows:
"Nothing contained herein or in any other Loan Papers shall
limit the Right of any Lender to collect its Note upon acceleration of
the Obligations pursuant to the terms of this Agreement."
(x) The penultimate sentence of Section 8.1 of the Credit Agreement is
hereby deleted in its entirety and the following is substituted in lieu thereof:
"Administrative Lender agrees to distribute promptly to each
Lender copies of any notices, requests and other information received
from Company pursuant to the terms of this Agreement, and to distribute
to each applicable Lender in like funds all amounts delivered to
Administrative Lender by Company for the Ratable or individual account
of any Lender, with such funds to be distributed on the date of receipt
by Administrative Lender provided such funds are received by the time
prescribed in Section 2.12(a), or the immediately following Business
Day if such funds are received after such time (any funds not so
distributed by Administrative Lender shall bear interest payable by
Administrative Lender at a rate per annum equal to the Federal Funds
Rate to but not including the date of receipt by such Lender)."
(y) The first sentence of Section 8.6 of the Credit Agreement is hereby
deleted and the following is substituted in lieu thereof:
- 5 -
<PAGE>
"Administrative Lender may resign at any time by giving
written notice thereof to Lenders and Company, and may be removed at
any time with cause by the Majority Lenders or without cause by action
of all Lenders (other than Administrative Lender, if it is a Lender);
provided, however, so long as (a) NationsBank of Texas, N.A. is a
Lender and (b) no Default or Event of Default has occurred and is
continuing, NationsBank of Texas, N.A. shall not have the right to
resign as Administrative Lender".
(z) Section 9.1 of the Credit Agreement is hereby amended by (i)
deleting (A) "or" immediately preceding clause (f) thereof and (B) "." at the
end of clause (f) thereof and inserting ", or" in lieu thereof and (ii) adding
new clause (g) thereto to read as follows:
"(g) release or amend any Subordination Agreement."
(aa) Section 9.4(a) of the Credit Agreement is hereby amended by
deleting the penultimate complete sentence of said Section on page 62 of the
Credit Agreement and inserting the following sentence in lieu thereof:
"Within five Business Days after Administrative Lender receives notice
of any such assignment, Company shall execute and deliver to
Administrative Lender, in exchange for the Notes issued to Assignor,
new Notes to the order of such Assignor and its assignee in amounts
equal to their respective Specified Percentages of (i) the Commitment,
if the Commitment is outstanding, or (ii) the aggregate principal
amount outstanding under the Term Loan, if after the Conversion Date."
(bb) Section 9.9 of the Credit Agreement is hereby amended by deleting
the third sentence thereof and substituting the following in lieu thereof:
"At the earlier of such time as (a) a Person is no longer a Lender or
participant under this Agreement, or (b) all Advances under this
Agreement are paid in full and the Commitment is terminated, upon
written request by Company and subject to any restrictions or
regulations of any Tribunal having supervisory authority over Lenders,
such Lender or participant shall return to Company the Confidential
Information which is in tangible form, including any copies which such
lender or participant or any Persons to whom such Lender or participant
transmitted the Confidential Information may have made, and such Lender
or participant or such Person will destroy all abstracts, summaries
thereof or references thereto in such Lender's or participant's or such
Person's documents, and after written request by Company, shall
promptly provide Company reasonable assurance in writing that such
Lender or participant or such Person have complied with this
paragraph."
(cc) Schedule 4.1 to the Credit Agreement is hereby amended to be in
the form of Schedule 4.1 to this First Amendment.
- 6 -
<PAGE>
(dd) Schedule 4.8 to the Credit Agreement is hereby amended to be in
the form of Schedule 4.8 to this First Amendment.
(ee) The Specified Percentage of each Lender shall be the Specified
Percentage set forth opposite the name of each Lender on the signatory pages to
this First Amendment.
(ff) The first complete paragraph on page 2 of Exhibit I,
Confidentiality Agreement, is hereby amended to read as follows:
"At the earlier of such time as (i) you are no longer a
Lender, an assignee or participant under the Credit Agreement, or (ii)
all Advances (as defined in the Credit Agreement) under the Credit
Agreement are paid in full and the Commitment (as defined in the Credit
Agreement) is terminated, upon written request by FFCA and subject to
any restrictions or regulations of any Tribunal having supervisory
authority over you, you shall return to FFCA the Confidential
Information which is in tangible form, including any copies which you
or any persons to whom you transmitted the Confidential Information may
have made, and you and they will destroy all abstracts, summaries
thereof or references thereto in your and their documents, and after
written request by FFCA, shall promptly provide FFCA reasonable
assurance in writing that you have destroyed such documents."
2. REPRESENTATIONS AND WARRANTIES TRUE; NO EVENT OF DEFAULT. By its
execution and delivery hereof, Company represents and warrants that, as of the
date hereof and after giving effect to the amendments provided in the foregoing
Section 1:
(a) the representations and warranties contained in the Credit
Agreement are true and correct on and as of the date hereof as if made on and as
of such date;
(b) no event has occurred and is continuing which constitutes a Default
or an Event of Default;
(c) Company has full power and authority to execute, deliver and
perform this First Amendment, the Notes referred to in Section 3(c) of this
First Amendment (the "Revolving Notes"), and the Credit Agreement, as amended by
this First Amendment, the execution, delivery and performance of this First
Amendment, the Revolving Notes, and the Credit Agreement, as amended by this
First Amendment, have been duly authorized by all corporate action of Company,
and this First Amendment, the Revolving Notes and the Credit Agreement, as
amended hereby, constitute the legal, valid and binding obligations of the
Company, enforceable in accordance with their respective terms, except as
enforceability may be limited by applicable debtor relief laws and by general
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law) and except as rights to indemnity may be limited
by federal or state securities laws;
- 7 -
<PAGE>
(d) Neither the execution, delivery and performance of this First
Amendment, the Revolving Notes or the Credit Agreement, as amended by this First
Amendment, nor the consummation of any transactions herein or therein, will
contravene or conflict with any Law to which Company or any of its Subsidiaries
is subject or any indenture, agreement or other instrument to which Company or
any of its Subsidiaries or any of their respective property is subject; and
(e) no authorization, approval, consent or other action by, notice to,
or filing with, any governmental authority or other Person (not previously
obtained), is required for the (i) execution, delivery or performance by Company
of this First Amendment, the Revolving Notes and the Credit Agreement, as
amended by this First Amendment, or (ii) acknowledgement of this First Amendment
by any Guarantor.
3. CONDITIONS OF EFFECTIVENESS. This First Amendment shall be effective
as of February 23, 1996, subject to the following:
(a) Administrative Lender shall have received counterparts of this
First Amendment executed by each Lender;
(b) Administrative Lender shall have received counterparts of this
First Amendment executed by Company and acknowledged by each Guarantor;
(c) Administrative Lender shall have received a duly executed Revolving
Note, payable to the order of each Lender in an amount equal to such Lender's
Specified Percentage of the Commitment, as hereby amended;
(d) the representations and warranties set forth in Section 2 of this
First Amendment shall be true and correct;
(e) Administrative Lender shall have received an opinion of counsel of
Company and its Subsidiaries, dated the date of this First Amendment, acceptable
to Lenders and otherwise in form and substance satisfactory to Lenders and
Special Counsel, with respect to this First Amendment and otherwise, including,
without limitations (i) opinions (A) to the valid legal and binding nature of
this First Amendment, the Revolving Notes and the Credit Agreement as amended
hereby, (B) to the power, authorization and corporate matters of Company and its
Subsidiaries taken with respect to this First Amendment, the Revolving Notes and
the Credit Agreement, as amended hereby, (C) that the execution, delivery and
performance by Company and its Subsidiaries of this First Amendment, the
Revolving Notes and the Credit Agreement, as amended hereby, does not violate
any terms of the certificate of incorporation, bylaws or agreement of Company or
any of its Subsidiaries, and (D) to such other matters as are reasonably
requested by Special Counsel and (ii) a statement that the Lenders may rely on
the opinion of Kutak Rock, dated the Closing Date, and delivered to NationsBank
pursuant to Section 3.1(g) of the Credit Agreement;
- 8 -
<PAGE>
(f) Administrative Lender shall have received certified corporate
resolutions of Company and its Subsidiaries authorizing the execution, delivery
and performance of this First Amendment and the Revolving Notes, as appropriate;
(g) Administrative Lender shall have received an opinion of Special
Counsel, dated as of the date of this First Amendment, acceptable to Lenders,
with respect to the enforceability of the Credit Agreement, as amended hereby,
and the other Loan Papers;
(h) Each Lender other than NationsBank shall have received a fee in the
amount agreed upon between each such Lender and NationsBank;
(i) Each Lender, if any, which is not a United States Person shall have
complied with the requirements of Section 9.7(d) of the Credit Agreement; and
(j) Administrative Lender and Lenders shall have received in form and
substance satisfactory to Administrative Lender and Lenders, such other
documents, certificates and instruments as Lenders shall require.
4. GUARANTOR'S ACKNOWLEDGEMENT. By signing below, each Guarantor (i)
acknowledges, consents and agrees to the execution, delivery and performance by
Company of this First Amendment and the Revolving Notes, (ii) acknowledges,
consents and agrees to the increase of the Commitment set forth in this First
Amendment and agrees that its obligations is respect of its Guaranty Agreement
include the Commitment as increased by this First Amendment, (iii) acknowledges
and agrees that its obligations in respect of its Guaranty Agreement and
Subordination Agreement are not released, diminished, waived, modified, impaired
or affected in any manner by this First Amendment or any of the provisions
contemplated herein, (iv) ratifies and confirms its obligations under its
Guaranty Agreement and Subordination Agreement, and (iv) acknowledges and agrees
that it has no claim or offsets against, or defenses or counterclaims to, its
Guaranty Agreement and Subordination Agreement.
5. SECTION 9.4. The parties hereto agree that (i) the provisions of
Section 9.4 of the Credit Agreement shall not be required to be complied with
for the purpose of making the Lenders party to the Credit Agreement pursuant to
this First Amendment and (ii) each Lender signing below shall be a Lender under
the Credit Agreement and shall have all the Rights and obligations thereunder.
6. REFERENCE TO THE CREDIT AGREEMENT.
(a) Upon the effectiveness of this First Amendment, each reference in
the Credit Agreement to "this Agreement", "hereunder", or words of like import
shall mean and be a reference to the Credit Agreement, as amended by this First
Amendment.
(b) The Credit Agreement, as amended by this First Amendment, and all
other Loan Papers shall remain in full force and effect and are hereby ratified
and confirmed.
- 9 -
<PAGE>
7. COSTS, EXPENSES AND TAXES. Company agrees to pay on demand all costs
and expenses of Administrative Lender in connection with the preparation,
reproduction, execution and delivery of the First Amendment and the other
instruments and documents to be delivered hereunder (including the reasonable
fees and out-of-pocket expenses of Special Counsel).
8. EXECUTION IN COUNTERPARTS. This First Amendment may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed to be
an original and all of which when taken together shall constitute but one and
the same instrument.
9. GOVERNING LAW; BINDING EFFECT. This First Amendment shall be
governed by and construed in accordance with the laws of the State of Texas
(without giving effect to conflict of laws) and the United States of America,
and shall be binding upon Company and each Lender and their respective
successors and assigns.
10. HEADINGS. Section headings in this First Amendment are included
herein for convenience of reference only and shall not constitute a part of this
First Amendment for any other purpose.
11. ENTIRE AGREEMENT. THE CREDIT AGREEMENT, AS AMENDED BY THIS FIRST
AMENDMENT, AND THE OTHER LOAN PAPERS REPRESENT THE FINAL AGREEMENT BETWEEN THE
PARTIES AS TO THE SUBJECT MATTER THEREIN AND HEREIN AND MAY NOT BE CONTRADICTED
BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BETWEEN THE
PARTIES.
================================================================================
REMAINDER OF PAGE LEFT INTENTIONALLY BLANK
================================================================================
- 10 -
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this First
Amendment as of the date first above written.
FRANCHISE FINANCE CORPORATION
OF AMERICA
By:/s/ John R. Barravecchia
------------------------
John R. Barravecchia
Executive Vice President and Chief
Financial Officer
- 11 -
<PAGE>
NATIONSBANK OF TEXAS, N.A.
Specified Percentage:
14%
By: /s/ Frank M. Johnson
------------------------
Name: Frank M. Johnson
-----------------------
Title: Senior Vice President
-----------------------
- 12 -
<PAGE>
AMSOUTH BANK OF ALABAMA
Specified Percentage:
10%
By: /s/ Dean H. Burgess
------------------------
Name: Dean H. Burgess
------------------------
Title: Vice President
------------------------
- 13 -
<PAGE>
BANK HAPOALIM, B.M., LOS ANGELES
BRANCH
Specified Percentage:
6%
By: /s/ Kalman Schiff
------------------------
Name: Kalman Schiff
------------------------
Title: First Vice President
------------------------
By: /s/ Lori Lake
----------------------------
Name: Lori Lake
----------------------------
Title: Associate Vice President
----------------------------
- 14 -
<PAGE>
BANK OF MONTREAL, CHICAGO
BRANCH
Specified Percentage:
10%
By: /s/ Jeffrey G. Hoppen
------------------------
Name: Jeffrey G. Hoppen
------------------------
Title: Director
------------------------
- 15 -
<PAGE>
COMMERZBANK AKTIENGESELLSCHAFT,
LOS ANGELES BRANCH
Specified Percentage:
6%
By: /s/ Christian Jagenberg
------------------------
Name: Christian Jagenberg
------------------------
Title: Senior Vice President and Manager
-------------------------------------
By: /s/ Steven F. Larsen
-----------------------
Name: Steven F. Larsen
-----------------------
Title: Vice President
-----------------------
- 16 -
<PAGE>
DRESDNER BANK AG, LOS
ANGELES AGENCY
Specified Percentage:
7%
By: /s/ Sidney S. Jordan
---------------------
Name: Sidney S. Jordan
--------------------
Title: Vice President
--------------------
By: /s/ Vitol Wiacek
------------------
Name: Vitol Wiacek
------------------
Title: Assistant Vice President
-----------------------------
- 17 -
<PAGE>
THE INDUSTRIAL BANK OF JAPAN,
LIMITED, LOS ANGELES AGENCY
Specified Percentage:
6%
By: /s/ Toshinari Iyoda
-------------------
Name: Toshinari Iyoda
-------------------
Title: Senior Vice President
-------------------------
- 18 -
<PAGE>
THE LONG-TERM CREDIT BANK OF
JAPAN, LTD.
Specified Percentage:
10%
By: /s/ T. Morgan Edwards, II
--------------------------
Name: T. Morgan Edwards, II
--------------------------
Title: Vice President, Manager
----------------------------
By: /s/ Genichi Imai
------------------
Name: Genichi Imai
------------------
Title: Joint General Manager
--------------------------
- 19 -
<PAGE>
NORWEST BANK ARIZONA, NATIONAL
ASSOCIATION
Specified Percentage:
6%
By: /s/ Patricia Cusick Tambe
-------------------------
Name: Patricia Cusick Tambe
-------------------------
Title: Vice President
-------------------------
- 20 -
<PAGE>
COOPERATIEVE CENTRALE
RAIFFEISEN-BOERENLEENBANK B.A.,
"RABOBANK NEDERLAND", NEW
YORK BRANCH
Specified Percentage:
7%
By: /s/ Chris G. Kortlandt
------------------------
Name: Chris G. Kortlandt
------------------------
Title: Vice President
------------------------
By: /s/ W. Jeffrey Vollack
-----------------------
Name: W. Jeffrey Vollack
-----------------------
Title: Vice President Manager
---------------------------
- 21 -
<PAGE>
SIGNET BANK
Specified Percentage:
6%
By: /s/ John A. Schissel
--------------------
Name: John A. Schissel
--------------------
Title: Vice President
--------------------
- 22 -
<PAGE>
TEXAS COMMERCE BANK NATIONAL
ASSOCIATION
Specified Percentage:
12%
By: /s/ Brian M. Kouns
------------------
Name: Brian M. Kouns
------------------
Title: Vice President
------------------
- 23 -
<PAGE>
ACKNOWLEDGED AND AGREED:
FFCA ACQUISITION CORPORATION
FFCA INSTITUTIONAL ADVISORS, INC.
FFCA MORTGAGE CORPORATION
By: /s/John R. Barravecchia
---------------------------
John R. Barravecchia
Executive Vice President and
Chief Financial Officer
- 24 -
<PAGE>
Schedule 4.1
Franchise Finance Corporation of America
A Delaware Corporation
17207 N. Perimeter Drive
Scottsdale, AZ 85255
The Corporation has authorized 200,000,000 shares of common stock, par value
$.01 per share issued and outstanding 40,294,822 shares*
FFCA Acquisition Corporation
A Delaware Corporation and wholly-owned subsidiary of Franchise Finance
Corporation of America
17207 N. Perimeter Drive
Scottsdale, AZ 85255
The Corporation has authorized 100 shares of common stock, par value $.01 per
share Issued and outstanding 100 shares
FFCA Institutional Advisors, Inc.
A Delaware Corporation and wholly-owned subsidiary of Franchise Finance
Corporation of America
17207 N. Perimeter Drive
Scottsdale, AZ 85255
The Corporation has authorized 100 shares of common stock, par value $.01 per
share Issued and outstanding 100 shares
FFCA Mortgage Corporation
A Delaware Corporation and wholly-owned subsidiary of Franchise Finance
Corporation of America
17207 N. Perimeter Drive
Scottsdale, AZ 85255
The Corporation has authorized 100 shares of common stock, par value $.01 per
share Issued and outstanding 100 shares
*The following shareholders held on the Closing Date 1% or more of the
outstanding common stock of FFCA:
Morton H. Fleischer 1,208,469 shares
Fidelity Management & Research 940,000 shares
LBI Group 674,027 shares
Snyder Capital Management, Inc. 528,100 shares
European Investors, Inc. 420,000 shares
Robert W. Halliday 405,202 shares
- 26 -
<PAGE>
Schedule 4.8
FRANCHISE FINANCE CORPORATION OF AMERICA
Capital Leases Payable $ 56,219
Acquisition Loan Facility 82,000,000
Senior Notes Payable ($200,000,000 less
unamortized discount of $1,256,125) 198,743,875
Medium Term Notes 60,000,000
Mortgage Payable to Affiliate 8,500,000
FFCA ACQUISITION CORPORATION
None
FFCA MORTGAGE CORPORATION
None
FFCA INSTITUTIONAL ADVISORS, INC.
None
- 27 -
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL
INFORMATION EXTRACTED FROM THE CONSOLIDATED
BALANCE SHEET AS OF MARCH 31, 1996 AND THE
CONSOLIDATED STATEMENT OF INCOME FOR THE THREE
MONTHS ENDED MARCH 31, 1996 AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<EXCHANGE-RATE> 1
<CASH> 1,758
<SECURITIES> 0
<RECEIVABLES> 13,252
<ALLOWANCES> 2,300
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 816,381
<DEPRECIATION> 176,344
<TOTAL-ASSETS> 887,164
<CURRENT-LIABILITIES> 0
<BONDS> 361,926
0
0
<COMMON> 404
<OTHER-SE> 490,134
<TOTAL-LIABILITY-AND-EQUITY> 887,164
<SALES> 0
<TOTAL-REVENUES> 29,667
<CGS> 0
<TOTAL-COSTS> 550
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 6,752
<INCOME-PRETAX> 13,777
<INCOME-TAX> 0
<INCOME-CONTINUING> 13,777
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 13,777
<EPS-PRIMARY> .34
<EPS-DILUTED> 0
</TABLE>
