SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): September 11, 1997
FRANCHISE FINANCE CORPORATION OF AMERICA
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(Exact Name of Registrant as Specified in Its Charter)
Delaware 1-13116 86-0736091
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification Number)
incorporation)
17207 North Perimeter Drive, Scottsdale, AZ 85255
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (602) 585-4500
NONE
----
(Former Name or Former Address, if Change Since Last Report)
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Item 5. Other Events.
(a) On September 11, 1997, the Registrant entered into an Underwriting
Agreement (the "Underwriting Agreement") with Smith Barney Inc.(the
"Underwriter"), with respect to the issue and sale by the Registrant, and the
purchase by the Underwriter, of an aggregate of 956,160 shares of the
Registrant's $.01 par value Common Stock (the "Common Stock"). The Underwriting
Agreement is attached hereto and referenced as Exhibit 1.01.
(b) Kutak Rock as counsel to the Registrant has issued its opinion as
to the legality with respect to the Common Stock. The opinion is attached hereto
and referenced as Exhibit 5.
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
1.01 Underwriting Agreement
5.0 Legal Opinion of Kutak Rock
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
FRANCHISE FINANCE CORPORATION OF
AMERICA (Registrant)
Dated: September 15, 1997 By /s/ John Barravecchia
----------------------
John Barravecchia,
Executive Vice President
and Chief Financial Officer
Dated: September 15, 1997 By /s/ Catherine F. Long
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Catherine F. Long,
Senior Vice President, Finance and
Principal Accounting Officer
956,160 Shares
FRANCHISE FINANCE CORPORATION OF AMERICA
(a Delaware corporation)
Common Stock
UNDERWRITING AGREEMENT
----------------------
September 11, 1997
SMITH BARNEY INC.
388 Greenwich Street
New York, New York 10013
Ladies and Gentlemen:
Franchise Finance Corporation of America, a Delaware
corporation (the "Company"), confirms its agreement with Smith Barney Inc.
("Smith Barney" or the "Underwriter," which term shall also include any
underwriter substituted as hereinafter provided in Section 10 hereof), with
respect to the sale by the Company and the purchase by the Underwriter of an
aggregate of 956,160 shares (the "Shares") of common stock, $.01 par value (the
"Common Stock"), of the Company.
The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 (No.
33-62629) and pre-effective amendment no. 1 thereto relating to the offering
from time to time of debt securities, common stock or preferred stock in
accordance with Rule 415 under the Securities Act of 1933, as amended (the "1933
Act") and will file such additional amendments and supplements thereto as may
herein be required. Such registration statement has been declared effective by
the Commission. Such registration statement (as amended), and the prospectus
constituting a part thereof and each prospectus supplement relating to the
offering of the Shares (including in each case all documents incorporated or
deemed to be incorporated by reference therein, and the information, if any,
deemed to be part thereof pursuant to Rule 434 of the rules and regulations of
the Commission under the 1933 Act (the "1933 Act Regulations")), as from time to
time amended or supplemented pursuant to the 1933 Act, the Securities Exchange
Act of 1934, as amended (the "1934 Act"), or otherwise, are hereinafter referred
to as the "Registration Statement" and the "Prospectus," respectively, except
that if any revised prospectus shall be provided to the Underwriter by the
Company for use in connection with the offering of the Shares which differs from
the Prospectus on file (whether or not such revised prospectus is required to be
filed by the Company pursuant to Rule 424(b) of the 1933 Act Regulations), the
term "Prospectus" shall refer to such revised prospectus from and after the time
it is first
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provided to the Underwriter for such use. All references in this Agreement to
financial statements and schedules and other information which is "described,"
"disclosed," "contained," "included" or "stated" in the Registration Statement
or the Prospectus (and all other references of like import) shall be deemed to
mean and include all such financial statements and schedules and other
information which is or is deemed to be incorporated by reference in the
Registration Statement or the Prospectus, as the case may be; and all references
in this Agreement to amendments or supplements to the Registration Statement or
the Prospectus shall be deemed to mean and include the filing of any document
under the 1934 Act which is or is deemed to be incorporated by reference in the
Registration Statement or the Prospectus, as the case may be. If the Company
elects to rely on Rule 434 under the 1933 Act Regulations, all references to the
Prospectus shall be deemed to include, without limitation, the form of
prospectus and the term sheet, taken together, provided to the Underwriter by
the Company in reliance on Rule 434 under the 1933 Act (the "Rule 434
Prospectus"). If the Company files a registration statement to register a
portion of the Shares and relies on Rule 462(b) for such registration statement
to become effective upon filing with the Commission (the "Rule 462 Registration
Statement"), then any reference to "Registration Statement" herein shall be
deemed to be to both the registration statement referred to above (No. 33-62629)
and the Rule 462 Registration Statement, as each such registration statement may
be amended pursuant to the 1933 Act.
The Company understands that the Underwriter intends to
deposit the Shares with the trustee of The Equity Focus Trusts - REIT Portfolio
Series, 1997 (the "Trust"), a registered unit investment trust under the
Investment Company Act of 1940, as amended, in exchange for units in the Trust.
The Underwriter is acting as sponsor and depositor of the Trust and is therefore
considered an affiliate of the Trust.
SECTION 1. Representations and Warranties.
(a) The Company represents and warrants to the Underwriter as of the
date hereof and as of the Closing Time referred to in Section 2(b) hereof, and
agrees with the Underwriter, as follows:
(i) The Company meets the requirements for use of Form S-3
under the 1933 Act, and at the respective times the Registration
Statement became effective and any post-effective amendments thereto
become effective and on the date hereof, the Registration Statement did
and will comply in all material respects with the requirements of the
1933 Act and the 1933 Act Regulations and the 1939 Act and the rules
and regulations of the Commission under the 1939 Act, and did not and
will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading. The Prospectus, on the date
hereof (unless the term "Prospectus" refers to a prospectus which has
been provided to the Underwriter by the Company for use in connection
with the offering of the Shares which differs from the Prospectus on
file at the Commission at the time the Registration Statement first
becomes effective, in which case at the time it is first provided to
the Underwriter for such use), and at the Closing Time, will not
include an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
provided, however, that the representations and warranties in this
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subsection shall not apply to statements in or omissions from the
Registration Statement or Prospectus made in reliance upon and in
conformity with information furnished to the Company in writing by the
Underwriter expressly for use in the Registration Statement or
Prospectus. For purposes of this Section l(a), all references to the
Registration Statement, any post-effective amendments thereto and the
Prospectus shall be deemed to include, without limitation, any
electronically transmitted copies thereof, including, without
limitation, any copy filed with the Commission pursuant to its
Electronic Data Gathering, Analysis, and Retrieval system ("EDGAR").
(ii) The accountants who certified the financial statements
and supporting schedules included or incorporated by reference in the
Registration Statement are independent public accountants as required
by the 1933 Act and the 1933 Act Regulations.
(iii) The financial statements included or incorporated by
reference in the Registration Statement and the Prospectus, together
with the related schedule and notes, present fairly the financial
position of the Company and its consolidated subsidiaries at the dates
indicated and the statement of income, shareholders' equity and cash
flows of the Company and its consolidated subsidiaries for the periods
specified; except as otherwise stated in the Registration Statement,
said financial statements have been prepared in conformity with
generally accepted accounting principles applied on a consistent basis
("GAAP") throughout the periods involved. The supporting schedules, if
any, included in the Registration Statement present fairly in
accordance with GAAP the information required to be stated therein. The
selected financial data and the summary financial information included
in the Prospectus present fairly in accordance with GAAP the
information shown therein and have been compiled on a basis consistent
with that of the audited financial statements included in the
Registration Statement. Any pro forma financial information included in
the Prospectus presents fairly the information shown therein, has been
prepared in accordance with the Commission's rules and guidelines with
respect to pro forma financial statements and has been properly
compiled on the bases described therein, and the assumptions used in
the preparation thereof are reasonable and the adjustments used therein
are appropriate to give effect to the transactions and circumstances
referred to therein.
(iv) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as
otherwise stated therein, (A) there has been no material adverse change
in the condition, financial or otherwise, or in the earnings, business
affairs or business prospects of the Company and its subsidiaries
considered as one enterprise, whether or not arising in the ordinary
course of business ("Material Adverse Change"), (B) there have been no
transactions entered into by the Company or any of its subsidiaries,
other than those in the ordinary course of business, which are material
with respect to the Company and its subsidiaries considered as one
enterprise, and (C) except for regular quarterly dividends on the
common stock, par value $.01 per share, of the Company (the "Common
Stock") in amounts per share that are consistent with past practice,
there has been no dividend or distribution of any kind declared, paid
or made by the Company on any class of its capital stock.
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(v) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware and has the corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectus and to enter into and perform its obligations under this
Agreement; the Company is duly qualified as a foreign corporation to
transact business and is in good standing in the State of Arizona and
the Company is duly qualified as a foreign corporation to transact
business and is in good standing in each other jurisdiction in which
such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the
failure to so qualify or to be in good standing would not, either
singly or in the aggregate, have a material adverse effect on the
condition, financial or otherwise, or the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as
one enterprise (a "Material Adverse Effect").
(vi) Each subsidiary (as defined below) of the Company has
been duly organized and is validly existing as a corporation, trust or
partnership, as the case may be, in good standing under the laws of the
jurisdiction of its organization, has the corporate, partnership or
other power and authority, as the case may be, to own, lease and
operate its properties and conduct its business as described in the
Prospectus and is duly qualified as a foreign corporation, partnership
or trust, as the case may be, to transact business and is in good
standing in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure to so qualify or be in
good standing would not, either singly or in the aggregate, have a
Material Adverse Effect; and all of the issued and outstanding capital
stock or other equivalent interests of each such subsidiary has been
duly authorized and validly issued, is fully paid and non-assessable
and, except as stated in the Prospectus, is owned by the Company,
directly or through subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity; none of
the outstanding shares of capital stock or other equivalent interests
of the subsidiaries was issued in violation of the preemptive or
similar rights of any stockholder or other holder of interests of such
subsidiary arising by operation of law, under the charter, by-laws or
other organizational document of any subsidiary or under any agreement
to which the Company or any subsidiary is a party. The Company does not
own, directly or indirectly through a "qualified REIT subsidiary"
(within the meaning of Section 856(i) of the Internal Revenue Code of
1986, as amended (the "Code")), partnership, limited liability company,
association or other entity, any shares of stock or any other debt or
equity securities of, or other interests in, any corporation, firm,
partnership, limited liability company, association or other entity,
other than (1) stock of a corporation or equity of an entity that the
Company has been advised by its legal counsel qualifies as a "qualified
REIT subsidiary" within the meaning of Section 856(i) of the Code, (2)
stock or other debt or equity securities of any issuer (other than a
partnership or limited liability company, the ownership of which is
governed by (3) below) where (i) the Company has been advised by legal
counsel that such ownership would not constitute ownership of more than
9.8% of the voting securities of such issuer (within the meaning of
Section 856(c)(5) of the Code) and (ii) the Company has determined in
good faith that the fair market value of the stock and securities of
any one such issuer does not exceed 4.8% of the value of the total
assets of the Company, or (3)
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interests in a partnership or limited liability company where (i) the
Company has received a written opinion of its legal counsel that such a
partnership or limited liability company is properly treated as a
partnership, rather than an association or publicly traded partnership
taxable as a corporation, for federal income tax purposes and (ii) such
partnership or limited liability company does not itself own debt or
equity securities of any issuer that could cause the Company to violate
the representation contained in clause (2) above. As used in this
Agreement, "subsidiary" shall mean (i) any corporation, trust,
association or other business entity of which more than 50% of the
total voting power of shares of capital stock or other equivalent
interests entitled to vote in the election of directors, managers or
trustees thereof is at the time owned or controlled, directly or
indirectly, by the Company or one or more of the other subsidiaries of
the Company (or a combination thereof) and (ii) any partnership (a) the
sole general partner or the managing general partner of which is the
Company or a subsidiary of the Company or (b) the only general partners
of which are the Company or one or more subsidiaries of the Company (or
any combination thereof).
(vii) The authorized, issued and outstanding capital stock of
the Company is as set forth in the Prospectus (except for subsequent
issuances, if any, pursuant to employee benefit plans referred to in
the Prospectus, pursuant to the exercise of options referred to in the
Prospectus or pursuant to the Company's dividend reinvestment plan),
and all of such outstanding shares of capital stock have been duly
authorized and validly issued and are fully paid and nonassessable and
were not issued in violation of, and are not subject to, preemptive or
other similar rights.
(viii) Neither the Company nor any of its subsidiaries is (a)
in violation of its charter or bylaws, (b) in default in the
performance or observance of any provision of the Amended and Restated
Credit Agreement dated as of April 15, 1997 between the Company,
certain lenders and co-agents named therein and NationsBank of Texas,
N.A., as administrative agent, as such agreement may be amended or
modified from time to time (the "NationsBank Agreement) that
constitutes or will constitute an Event of Default (as defined in the
NationsBank Agreement), or (c) in default in the performance or
observance of any obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, deed of trust, loan or
credit agreement, note, lease or other agreement or instrument to which
the Company or any of its subsidiaries is a party or by which any of
them may be bound, or to which any of the property or assets of the
Company or any of its subsidiaries is subject, except for, in the case
of (c), any such defaults which would not, either singly or in the
aggregate, have a Material Adverse Effect; and the execution, delivery
and performance of this Agreement, the issuance of the Shares and the
consummation of the transactions contemplated herein and compliance by
the Company with its obligations hereunder (including the use of the
proceeds from the sale of the Shares as described in the Prospectus
under the caption "Use of Proceeds") have been duly authorized by all
necessary corporate action and do not and will not, whether with or
without the giving of notice or passage of time or both, (i) constitute
an Event of Default (as defined in the NationsBank Agreement), (ii)
conflict with or constitute a breach of, or default or Repayment Event
(as defined below) under, or result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of the
Company or any of its subsidiaries pursuant to, any
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contract, indenture, mortgage, deed of trust, loan or credit agreement,
note, lease or other agreement or instrument to which the Company or
any of its subsidiaries is a party or by which it or any of them may be
bound, or to which any of the property or assets of the Company or any
of its subsidiaries is subject except for any such conflict, breach,
default or Repayment Event which would not, either singly or in the
aggregate, have a Material Adverse Effect, or (iii) result in any
violation of the provisions of the charter or by-laws of the Company or
any of its subsidiaries or any applicable law, statute, rule or
regulation, or any judgment, order, writ or decree of any government,
government instrumentality or court, domestic or foreign, having
jurisdiction over the Company or any of its subsidiaries. As used
herein, a "Repayment Event" means any event or condition which gives
the holder of any note, debenture or other evidence of indebtedness (or
any person acting on such holder's behalf) the right to require the
repurchase, redemption or repayment of all or a portion of such
indebtedness by the Company or any of its subsidiaries.
(ix) There is no existing labor dispute with the employees of
the Company or any of its subsidiaries that would have, either singly
or in the aggregate, a Material Adverse Effect.
(x) There is no action, suit, proceeding, inquiry or
investigation before or by any court or governmental agency or body,
domestic or foreign, now pending, or, to the knowledge of the Company,
threatened, against or affecting the Company or any of its
subsidiaries, which is required to be disclosed in the Registration
Statement, or which might reasonably be expected to result in any
Material Adverse Change, or which might reasonably be expected to have
a Material Adverse Effect or materially and adversely affect the
consummation of this Agreement or the performance by the Company of its
obligations hereunder; the aggregate of all pending legal or
governmental proceedings to which the Company or any subsidiary is a
party or of which any of their respective property or assets is the
subject which are not described in the Registration Statement,
including ordinary routine litigation incidental to the business, could
not reasonably be expected to result in a Material Adverse Change.
(xi) There are no contracts or documents which are required to
be described in the Registration Statement, the Prospectus or the
documents incorporated by reference therein or to be filed as exhibits
thereto by the 1933 Act, the 1933 Act Regulations, the 1934 Act or the
rules and regulations of the Commission under the 1934 Act (the "1934
Act Regulations") which have not been so described and filed as
required.
(xii) To the extent applicable, the Company and its
subsidiaries own or possess, or can acquire on reasonable terms, the
patents, patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures),
trademarks, service marks and trade names (collectively, "patent and
proprietary rights") presently employed by them in connection with the
business now operated by them, and neither the Company nor any of its
subsidiaries has received any notice or is otherwise aware of any
infringement of or conflict with asserted rights of others with respect
to any patent or proprietary rights or of any facts or circumstances
which would render any patent and
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proprietary rights invalid or inadequate to protect the interest of the
Company or any of its subsidiaries therein, and which infringement or
conflict (if the subject of any unfavorable decision, ruling or
finding) or invalidity or inadequacy, either singly or in the
aggregate, would result in any Material Adverse Change.
(xiii) No filing with, or authorization, approval, consent,
license, order, registration, qualification or decree of, any court or
governmental authority or agency is necessary or required in connection
with the offering, issuance or sale of the Shares hereunder or the
consummation of the transactions contemplated by this Agreement, except
such as have already been obtained or as may be required under the 1933
Act or the 1933 Act Regulations or state securities laws.
(xiv) The Company and its subsidiaries possess such
certificates, authorities, permits, licenses, approvals, consents and
other authorizations (collectively, "Governmental Licenses") issued by
the appropriate federal, state, local or foreign regulatory agencies or
bodies necessary to conduct the business now operated by them, except
where the failure to possess or comply with any such Governmental
License would not, either singly or in the aggregate, have a Material
Adverse Effect; the Company and its subsidiaries are in compliance with
the terms and conditions of all such Governmental Licenses, except
where the failure so to comply would not, either singly or in the
aggregate, have a Material Adverse Effect; all of the Governmental
Licenses are valid and in full force and effect, except when the
invalidity of such Governmental Licenses or the failure of such
Governmental Licenses to be in full force and effect would not have,
either singly or in the aggregate, a Material Adverse Effect; and
neither the Company nor any of its subsidiaries has received any notice
of proceedings relating to the revocation or modification of any such
Governmental Licenses which, either singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would have a
Material Adverse Effect.
(xv) This Agreement has been duly authorized, executed and
delivered by the Company.
(xvi) The Shares have been duly authorized for issuance and
sale to the Underwriter pursuant to this Agreement and, when issued and
delivered by the Company pursuant to this Agreement against payment of
the consideration set forth herein, will be validly issued, fully paid
and non-assessable and the Underwriter will receive valid title to the
Shares, free and clear of all security interests, mortgages, pledges,
liens, encumbrances and claims; the capital stock conforms to all
statements relating thereto contained or incorporated by reference in
the Prospectus and the Registration Statement and such description
conforms to the rights set forth in the instruments defining the same;
and the issuance of the Shares is not subject to preemptive or other
similar rights arising by operation of law, under the charter and
bylaws of the Company or otherwise. The Shares will conform in all
material respects to the respective statements thereto contained in the
Prospectus.
(xvii) Except as set forth in the Prospectus, the Company and
its subsidiaries are in compliance in all material respects with all
applicable laws, statutes, ordinances, rules
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or regulations, the violation of which, either singly or in the
aggregate, would be reasonably expected to have a Material Adverse
Effect.
(xviii) Except as otherwise disclosed in the Prospectus: (i)
the Company and its subsidiaries have good and marketable title to all
properties and assets (or a valid first lien as to mortgaged
properties) described in the Prospectus as being owned (or mortgaged)
by them, or reflected in the most recent consolidated balance sheet of
the Company contained in the Prospectus, except as would not, either
singly or in the aggregate, have a Material Adverse Effect; (ii) all
liens, charges, claims, restrictions or encumbrances on or affecting
the properties and assets of the Company or any of its subsidiaries
which are required to be disclosed in the Prospectus are disclosed
therein; (iii) no person or entity, other than tenants under the leases
or guarantors thereof pursuant to which the Company and its
subsidiaries lease all or a portion of their properties, has an option
or right of first refusal or any other right to purchase any of such
properties; (iv) each of the properties of the Company and its
subsidiaries, at the time such property was acquired or at the time the
loan by the Company with respect to such property was made, had access
to public rights of way, either directly or through insured easements,
except as would not, either singly or in the aggregate, have a Material
Adverse Effect; (v) each of such properties, at the time such property
was acquired or at the time the loan by the Company with respect to
such property was made, was served by all public utilities necessary
for the current operations on such property in sufficient quantities
for such operations, except as would not, either singly or in the
aggregate, have a Material Adverse Effect; (vi) each of such properties
complies with all applicable codes and zoning and subdivision laws and
regulations, except for such failures to comply which would not, either
singly or in the aggregate, have a Material Adverse Effect; (vii) the
real property leases and equipment leases, if any, relating to each of
such properties are in full force and effect, except where the failure
to be in full force and effect would not, singly or in the aggregate,
have a Material Adverse Effect; and (viii) there is no pending or
threatened condemnation, zoning change, or other proceeding or action
that will in any manner affect the size of, use of, improvements on,
construction on or access to the properties of the Company and its
subsidiaries, except such proceedings or actions which would not,
either singly or in the aggregate, have a Material Adverse Effect.
(xix) The Company has complied with, and is and will be in
compliance with, the provisions of that certain Florida act relating to
disclosure of doing business with Cuba, codified as Section 517.075 of
the Florida statutes, and the rules and regulations thereunder
(collectively, the "Cuba Act") or is exempt therefrom.
(xx) The Company is not, and upon the issuance and sale of the
Shares as herein contemplated and the application of the net proceeds
therefrom as described in the Prospectus under the caption "Use of
Proceeds" will not be, an "investment company" or an entity
"controlled" by an "investment company" as such terms are defined in
the Investment Company Act of 1940, as amended (the "1940 Act").
(xxi) Except as described in the Registration Statement, (A)
neither the Company nor any of its subsidiaries is in violation of any
federal, state, local or foreign
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laws or regulations relating to pollution or protection of human
health, the environment (including, without limitation, ambient air,
surface water, groundwater, land surface or subsurface strata) or
wildlife, including, without limitation, laws and regulations relating
to the release or threatened release of chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous substances, petroleum
or petroleum products (collectively, "Hazardous Materials") or to the
manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Materials (collectively,
"Environmental Laws"), except such violations as would not, either
singly or in the aggregate, have a Material Adverse Effect, and (B)
there are no events or circumstances that could form the basis of an
order for clean-up or remediation, or an action, suit or proceeding by
any private party or governmental body or agency, against or affecting
the Company or any of its subsidiaries relating to any Hazardous
Materials or the violation of any Environmental Laws, which, either
singly or in the aggregate, would have a Material Adverse Effect.
(xxii) The documents incorporated or deemed to be incorporated
by reference in the Prospectus, when they became effective or at the
time they were or hereafter are filed with the Commission, complied and
will comply in all material respects with the requirements of the 1933
Act or the 1934 Act, as applicable, and the rules and regulations of
the Commission thereunder, and, when read together with the other
information in the Prospectus, at the time the Registration Statement
and any post-effective amendments thereto become effective and at the
Closing Time, will not contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(xxiii) The Company and its subsidiaries have filed all
federal, state, local and foreign tax returns that are required to be
filed or have duly requested extensions thereof and have paid all taxes
required to be paid by any of them and any related assessments, fines
or penalties, except for any such tax, assessment, fine or penalty that
is being contested in good faith and by appropriate proceedings; and
adequate charges, accruals and reserves have been provided for in the
financial statements referred to in Section 1(a)(iii) above in respect
of all federal, state, local and foreign taxes for all periods as to
which the tax liability of the Company or any of its subsidiaries has
not been finally determined or remains open to examination by
applicable taxing authorities.
(xxiv) The Company and its subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurance
that (i) transactions are executed in accordance with management's
general and specific authorizations; (ii) transactions are recorded as
necessary to permit preparation of financial statements in conformity
with GAAP and to maintain accountability for assets; (iii) access to
assets is permitted only in accordance with management's general or
specific authorizations; and (iv) the recorded accountability for
assets is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(xxv) The Company and its subsidiaries have not (i) taken,
directly or indirectly, any action designed to cause or to result in,
or that has constituted or which might
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reasonably be expected to constitute, the stabilization or manipulation
of the price of any security of the Company to facilitate the sale or
resale of the Shares or (ii) since the initial filing of the
Registration Statement (A) sold, bid for, purchased or paid anyone
(other than, to the extent applicable, payments made by the Company
pursuant to the terms of, and in accordance with, the Company's
dividend reinvestment plan) any compensation for soliciting purchases
of, the Shares, or (B) paid or agreed to pay to any person any
compensation for soliciting another to purchase any other securities of
the Company.
(xxvi) No relationship, direct or indirect, exists between or
among any of the Company or any affiliate of the Company, on the one
hand, and any director, officer, stockholder, customer or supplier of
any of them, on the other hand, which is required by the 1933 Act or by
the 1933 Act Regulations to be described in the Registration Statement
or the Prospectus which is not so described or is not described as
required.
(xxvii) The Company has not distributed and, prior to the
later to occur of (i) the Closing Time and (ii) completion of the
distribution of the Shares, will not distribute any prospectus (as such
term is defined in the 1933 Act and the 1933 Act Regulations) in
connection with the offering and sale of the Shares other than the
Registration Statement, any preliminary prospectus, the Prospectus or
other materials, if any, permitted by the 1933 Act or by the 1933 Act
Regulations and approved by the Underwriter.
(xxviii) The Company has been and is organized in conformity
with the requirements for qualification and taxation as a real estate
investment trust ("REIT") under the Internal Revenue Code of 1986, as
amended (the "Code"), and its methods of operation have at all times
enabled, and its proposed methods of operation will enable, the Company
to qualify as a REIT under the Code.
(xxix) The Company and each of its subsidiaries has title
insurance on all real property described in the Prospectus as being
owned (or held under a ground lease) or financed by any of them in an
amount at least equal to the cost of acquisition of such property or
the original principal amount of the loan provided by any of them, as
the case may be, and each such property is insured by extended coverage
hazard and casualty insurance in an amount not less than 90% of the
full replacement cost of the improvements located thereon (exclusive of
excavation and foundations), except for such properties which are
covered by insurance in an amount less than 90%, the total loss of
which would not have, either singly or in the aggregate, a Material
Adverse Effect, and there are in effect for such properties and assets
insurance policies covering risks and in amounts that are commercially
reasonable for such types of properties and assets and that are
consistent with the types and amounts of insurance typically maintained
by prudent owners of similar properties or assets or required by
commercial lenders with respect to similar properties or assets and all
such insurance is in full force and effect, and to the extent any of
such properties are insured with rental guaranty insurance, such
insurance is in full force and effect and the Company is named as an
insured on all policies required under the leases for such properties.
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(xxx) Each of FFCA Acquisition Corporation, FFCA Institutional
Advisors, Inc., FFCA Secured Assets Corporation, FFCA Residual Interest
Corporation, FFCA Secured Lending Corporation and FFCA Secured
Franchise Loan Trust 1997-1 has been (at all times during the period
each such corporation has been in existence) and will be an association
taxable as a corporation for federal income tax purposes and the
Company has owned 100% of the stock of each such corporation at all
times during the period each such corporation has been in existence.
(xxxi) FFCA Co-Investment Limited Partnership has been (at all
times on and after June 1, 1994) and will be treated as a partnership,
rather than an association taxable as a corporation or publicly traded
partnership, for federal income tax purposes.
(xxxii) No holder of any security of the Company or other
person has any right to require registration of shares of Common Stock
or any other security of the Company because of the filing of the
registration statement or consummation of the transactions contemplated
by this Agreement.
(b) Any certificate signed by any officer of the Company and delivered
to the Underwriter or to counsel for the Underwriter shall be deemed a
representation and warranty by the Company to the Underwriter as to the matters
covered thereby.
SECTION 2. Sale and Delivery to Underwriter; Closing.
(a) On the basis of the representations and warranties herein contained
and subject to the terms and conditions herein set forth, the Company agrees to
sell to the Underwriter, and the Underwriter agrees to purchase from the
Company, the Shares at a purchase price of $24.4625 per share.
(b) Payment of the purchase price for, and delivery of certificates
for, the Shares shall be made at the office of Franchise Finance Corporation of
America, 17207 North Perimeter Drive, Scottsdale, Arizona, or at such other
place as shall be agreed upon by the Underwriter and the Company, at 10:00 A.M.,
New York City time, on the third business day (unless postponed in accordance
with the provisions of Section 10) following the date after execution of this
Agreement, or such other time not later than ten business days after such date
as shall be agreed upon by the Underwriter and the Company (such time and date
of payment and delivery being herein called "Closing Time"). Payment shall be
made to the Company in immediately available funds against delivery to the
Underwriter for the account of the Underwriter of certificates for the Shares to
be purchased by the Underwriter. Certificates for the Shares shall be in such
denominations and registered in such names as the Underwriter may request in
writing at least one business day before the Closing Time. The certificates for
the Shares will be made available for examination and packaging by the
Underwriter in The City of New York not later than 3:00 P.M. on the last
business day prior to the Closing Time.
SECTION 3. Covenants of the Company. The Company covenants with the
Underwriter as follows:
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(a) Promptly following the execution of this Agreement, the
Company will prepare a prospectus supplement setting forth the terms of
such Shares not otherwise specified in the Prospectus, the price at
which the Shares are to be purchased by the Underwriter from the
Company, and such other information as you and the Company deem
appropriate in connection with the offering of the Shares. The Company
will promptly transmit copies of the prospectus supplement to the
Commission for filing pursuant to Rule 424(b) of the 1933 Act
Regulations and will furnish to the Underwriter as many copies of the
Prospectus and such prospectus supplement as the Underwriter shall
reasonably request.
(b) The Company will notify the Underwriter immediately, and
confirm the notice in writing, (i) of the effectiveness of any
amendment to the Registration Statement, or when any supplement to the
Prospectus or any amended Prospectus shall have been filed, (ii) of the
receipt of any comments from the Commission, (iii) of any request by
the Commission for any amendment to the Registration Statement or any
amendment or supplement to the Prospectus or for additional
information, and (iv) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or of
any order preventing or suspending the use of any preliminary
prospectus supplement, or of the suspension of the qualification of the
Shares for offering or sale in any jurisdiction, or of the initiation
or threatening of any proceedings for any of such purposes. The Company
will make every reasonable effort to prevent the issuance of any stop
order and, if any stop order is issued, to obtain the lifting thereof
at the earliest possible moment. If the Company elects to rely on Rule
434, the Company will provide the Underwriter with copies of the form
of Rule 434 Prospectus, in such number as the Underwriter may
reasonably request, and file or transmit for filing with the Commission
the form of Prospectus complying with Rule 434(c)(2) of the 1933 Act in
accordance with Rule 424(b) of the 1933 Act by the close of business in
New York on the business day immediately succeeding the date of this
Agreement.
(c) At any time when the Prospectus is required to be
delivered under the 1933 Act or the 1934 Act in connection with sales
of the Shares, the Company will give the Underwriter notice of its
intention to file or prepare any amendment to the Registration
Statement (including any post-effective amendment) or any amendment or
supplement to the Prospectus, whether pursuant to the 1933 Act, the
1934 Act or otherwise (including any revised prospectus which the
Company proposes for use by the Underwriter in connection with the
offering of the Shares which differs from the prospectus on file at the
Commission at the time the Registration Statement first becomes
effective, whether or not such revised prospectus is required to be
filed pursuant to Rule 424(b) of the 1933 Act Regulations or any term
sheet prepared in reliance on Rule 434 of the 1933 Act Regulations),
will furnish the Underwriter with copies of any such amendment or
supplement a reasonable amount of time prior to such proposed filing or
use, as the case may be, and will not file any such amendment or
supplement or use any such prospectus to which the Underwriter or
counsel for the Underwriter shall reasonably object.
(d) The Company has furnished or will deliver to the
Underwriter and counsel for the Underwriter, without charge, signed
copies of the Registration Statement as
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originally filed and of each amendment thereto (including exhibits
filed therewith or incorporated by reference therein and documents
incorporated or deemed to be incorporated by reference therein) and
signed copies of all consents and certificates of experts, and will
also deliver to the Underwriter a conformed copy of the Registration
Statement as originally filed and of each amendment thereto (without
exhibits) for the Underwriter.
(e) The Company will furnish to the Underwriter, without
charge, from time to time during the period when the Prospectus is
required to be delivered under the 1933 Act or the 1934 Act, such
number of copies of the Prospectus (as amended or supplemented) as the
Underwriter may reasonably request for the purposes contemplated by the
1933 Act or the 1934 Act or the respective applicable rules and
regulations of the Commission thereunder.
(f) If any event shall occur or condition shall exist as a
result of which it is necessary, in the opinion of counsel for the
Underwriter or for the Company, to amend the Registration Statement or
amend or supplement the Prospectus in order that the Prospectus will
not include any untrue statements of a material fact or omit to state a
material fact necessary in order to make the statements therein not
misleading in the light of the circumstances existing at the time it is
delivered to a purchaser, or if it shall be necessary, in the opinion
of such counsel, at any such time to amend the Registration Statement
or amend or supplement the Prospectus in order to comply with the
requirements of the 1933 Act or the 1933 Act Regulations, the Company
will promptly prepare and file with the Commission, subject to Section
3(b), such amendment or supplement as may be necessary to correct such
statement or omission or to make the Registration Statement or the
Prospectus comply with such requirements, and the Company will furnish
to the Underwriter such number of copies of such amendment or
supplement as the Underwriter may reasonably request.
(g) The Company will use its best efforts, in cooperation with
the Underwriter, to qualify the Shares for offering and sale under the
applicable securities laws of such states and other jurisdictions of
the United States as the Underwriter may designate and to maintain such
qualifications in effect for a period of not less than one year from
the effective date of the Registration Statement; provided, however,
that the Company shall not be obligated to file any general consent to
service of process or to qualify as a foreign corporation or as a
dealer in securities in any jurisdiction in which it is not so
qualified or to subject itself to taxation in respect of doing business
in any jurisdiction in which it is not otherwise so subject. In each
jurisdiction in which the Shares have been so qualified, the Company
will file such statements and reports as may be required by the laws of
such jurisdiction to continue such qualification in effect for a period
of not less than one year from the effective date of the Registration
Statement.
(h) The Company will make generally available to its security
holders as soon as practicable, but not later than 90 days after the
close of the period covered thereby, an earnings statement (in form
complying with the provisions of Rule 158 of the 1933 Act Regulations)
covering a twelve month period beginning not later than the first day
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<PAGE>
of the Company's fiscal quarter next following the "effective date" (as
defined in said Rule 158) of the Registration Statement.
(i) In accordance with the Cuba Act and without limitation to
the provisions of Sections 6 and 7 hereof, the Company agrees to
indemnify and hold harmless the Underwriter from and against any and
all loss, liability, claim, damage and expense whatsoever (including
fees and disbursements of counsel), as incurred, arising out of any
violation by the Company of the Cuba Act.
(j) The Company will use the net proceeds received by it from
the sale of the Shares in the manner specified in the Prospectus under
"Use of Proceeds."
(k) The Company, during the period when the Prospectus, is
required to be delivered under the 1933 Act or the 1934 Act, will file
all documents required to be filed with the Commission pursuant to the
1934 Act within the time periods required by the 1934 Act and the 1934
Act Regulations.
(l) Except as stated in this Agreement and in the Prospectus,
the Company has not taken, nor will it take, directly or indirectly,
any action designed to or that might reasonably be expected to cause or
result in stabilization or manipulation of the price of the Common
Stock to facilitate the sale or resale of the Shares.
(m) The Company will use its best efforts to have the shares
of Common Stock which it agrees to sell under this Agreement listed,
subject to notice of issuance, on the New York Stock Exchange on or
before the Closing Date.
SECTION 4. Payment of Expenses. The Company will pay all expenses
incident to the performance of its obligations under this Agreement, including
(i) the printing and filing of the Registration Statement as originally filed
and of each amendment thereto, (ii) the preparation, printing and delivery to
the Underwriter of this Agreement and such other documents as may be required in
connection with the offering, purchase, sale and delivery of the Shares, (iii)
the preparation, issuance and delivery of the certificates for the Shares to the
Underwriter, (iv) the fees and disbursements of the Company's counsel,
accountants and other advisors, (v) the qualification of the Shares under
securities laws in accordance with the provisions of Section 3(g) hereof,
including filing fees and the reasonable fees and disbursements of counsel for
the Underwriter in connection therewith and in connection with the preparation
of any Blue Sky Survey, any supplement thereto and any Legal Investment Survey,
(vi) the printing and delivery to the Underwriter of copies of the Prospectus
and any amendments or supplements thereto including any term sheet delivered by
the Company pursuant to Rule 434 of the 1933 Act Regulations, (vii) the
preparation, printing and delivery to the Underwriter of any Blue Sky Survey,
any supplement thereto and any Legal Investment Survey, (viii) the fee of any
filing for review of the offering with the National Association of Securities
Dealers, Inc., if any, including the fees and expenses of counsel for the
Underwriter in connection therewith, and (ix) the fees and expenses incurred in
connection with the listing of the Shares on the New York Stock Exchange.
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If this Agreement is terminated by the Underwriter in accordance with
the provisions of Section 5 or Section 9(a)(i) hereof, the Company shall
reimburse the Underwriter for all of its out-of-pocket expenses, including the
reasonable fees and disbursements of counsel for the Underwriter.
SECTION 5. Conditions of Underwriter's Obligations. The obligations of
the Underwriter hereunder are subject to the accuracy of the representations and
warranties of the Company herein contained, to the performance by the Company of
its obligations hereunder and to the following further conditions:
(a) The Registration Statement shall be effective prior to the
date hereof, and at the Closing Time no stop order suspending the
effectiveness of the Registration Statement shall have been issued
under the 1933 Act or proceedings therefor initiated or threatened by
the Commission, and any request on the part of the Commission for
additional information shall have been complied with to the reasonable
satisfaction of counsel to the Underwriter. A prospectus supplement
shall have been transmitted to the Commission for filing in accordance
with Rule 424(b) of the 1933 Act Regulations within the prescribed time
period and prior to Closing Time the Company shall have provided
evidence satisfactory to the Underwriter of such timely filing, or a
post-effective amendment providing such information shall have been
promptly filed and declared effective in accordance with the
requirements of the 1933 Act Regulations. The Indenture shall have been
qualified under the 1939 Act.
(b) At the Closing Time the Underwriter shall have received:
(1) The favorable opinion, dated as of the Closing
Time, of Kutak Rock, counsel for the Company, in form and
substance satisfactory to counsel for the Underwriter, to the
effect that:
(i) The Company has been duly incorporated
and is validly existing as a corporation in good
standing under the laws of the State of Delaware.
(ii) The Company has the corporate power and
authority to own, lease and operate its properties
and to conduct its business as described in the
Registration Statement.
(iii) The Company is duly qualified as a
foreign corporation to transact business and is in
good standing in Arizona and in each other
jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of
property or the conduct of business, except in the
case of jurisdictions other than Arizona, where the
failure to so qualify or to be in good standing would
not, either singly or in the aggregate, have a
Material Adverse Effect.
(iv) The authorized, issued and outstanding
capital stock of the Company is as set forth in the
Prospectus (except for subsequent
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issuances, if any, pursuant to employee benefit plans
referred to in the Prospectus, pursuant to the
exercise of options referred to in the Prospectus or
pursuant to the Company's dividend reinvestment plan)
and all of such outstanding shares of capital stock
have been duly authorized and validly issued and are
fully paid and nonassessable.
(v) Each subsidiary of the Company has been
duly organized and is validly existing as a
corporation, trust or partnership, as the case may
be, in good standing under the laws of the
jurisdiction of its organization, has the corporate,
trust or partnership power, as the case may be, and
authority to own, lease and operate its properties
and to conduct its business as described in the
Registration Statement and is duly qualified as a
foreign corporation, trust or partnership, as the
case may be, to transact business and is in good
standing in each jurisdiction in which such
qualification is required, whether by reason of the
ownership or leasing of property or the conduct of
its business, except where the failure to so qualify
or to be in good standing would not, either singly or
in the aggregate, have a Material Adverse Effect; all
of the issued and outstanding capital stock or other
equivalent interests of each such subsidiary has been
duly authorized and validly issued, is fully paid and
non-assessable and, to the best of their knowledge
and information, except as stated in the Prospectus,
is owned directly by the Company, free and clear of
any security interest, mortgage, pledge, lien,
encumbrance, claim or equity.
(vi) The Company has the corporate power and
authority to enter into this Agreement and to issue,
sell and deliver the Shares to the Underwriter as
provided herein, and this Agreement has been duly
authorized, executed and delivered by the Company.
(vii) The Shares have been duly authorized
for issuance and sale to the Underwriters pursuant to
this Agreement and, when issued and delivered by the
Company to the Underwriter pursuant to this Agreement
against payment therefor in accordance with the terms
hereof, the consideration set forth herein, will be
validly issued, fully paid and non-assessable.
(viii) The Shares, when issued and delivered
by the Company pursuant to this Agreement against
payment therefor in accordance with the terms hereof,
will be free of any preemptive or similar rights
arising by operation of law or under the charter or
bylaws of the Company or, to such counsel's
knowledge, otherwise.
(ix) As of the date of such counsel's
opinion, there are 41,702,509 shares of Common Stock
and no shares of Preferred Stock outstanding.
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(x) The Shares conform in all material
respects to the descriptions thereof contained in the
Prospectus.
(xi) The Registration Statement has been
declared effective under the 1933 Act; any required
filing of the Prospectus pursuant to Rule 424(b) has
been made in the manner and within the time period
required by Rule 424(b); and, to the best of their
knowledge and information, no stop order suspending
the effectiveness of the Registration Statement has
been issued under the 1933 Act or proceedings
therefor initiated or threatened by the Commission.
(xii) The Registration Statement, the
Prospectus and each amendment or supplement to the
Registration Statement and Prospectus, as of their
respective effective or issue dates (other than the
financial statements and schedules and other
financial or statistical data included or
incorporated by reference therein, as to which no
opinion need be rendered) complied as to form in all
material respects with the requirements of the 1933
Act and the 1933 Act Regulations.
(xiii) To the best of such counsel's
knowledge and information, there is not pending, and
the Company has not received any notice of any
threatened, action, suit, proceeding, inquiry or
investigation, to which the
Company or any of its subsidiaries is a party, or to
which the property of the Company or any of its
subsidiaries is subject, before or brought by any
court or governmental agency or body, which might
reasonably be expected to result in any Material
Adverse Change, or which might reasonably be expected
to materially and adversely affect the properties or
assets thereof or the consummation of this Agreement
or the performance by the Company of its obligations
hereunder; and all pending legal or governmental
proceedings to which the Company or any of its
subsidiaries is a party or that affect any of their
respective properties that are not described in the
Prospectus, including ordinary routine litigation
incidental to the business, could not reasonably be
expected to result in a Material Adverse Change.
(xiv) The information in the Prospectus
under "Certain Federal Income Tax Considerations,"
"Restrictions on Transfers of Capital Stock,"
"Description of Preferred Stock" and "Description of
Common Stock" and in the Registration Statement under
Item 15 of Part II thereof, to the extent that it
constitutes matters of law, summaries of legal
matters, documents or proceedings, or legal
conclusions, has been reviewed by them and is correct
in all material respects; to the best of such
counsel's knowledge, there are no statutes or
regulations, and no legal or governmental actions,
suits or proceedings pending or threatened against
the Company that are required to be described in the
Prospectus that are not described as required and the
opinion of such firm set forth under "Certain Federal
Income Tax Considerations" is confirmed.
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(xv) All descriptions in the Prospectus of
contracts and other documents to which the Company or
its subsidiaries are a party are accurate in all
material respects; to the best of their knowledge and
information, there are no franchises, contracts,
indentures, mortgages, loan agreements, notes, leases
or other instruments required to be described or
referred to in the Registration Statement or to be
filed as exhibits thereto other than those described
or referred to therein or filed or incorporated by
reference as exhibits thereto, the descriptions
thereof or references thereto are correct in all
material respects, and, to the best of their
knowledge or information, no default exists in the
due performance or observance of any material
obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, loan
agreement, note, lease or other instrument so
described, referred to, filed or incorporated by
reference.
(xvi) No authorization, approval, consent or
order of any court or governmental authority or
agency (other than under the 1933 Act and the 1933
Act Regulations, which have been obtained, or as may
be required under the securities or blue sky laws of
the various states) is required in connection with
the due authorization, execution and delivery of this
Agreement or for the offering, issuance or sale of
the Shares to the Underwriter; and the execution,
delivery and performance of this Agreement, the
issuance of the Shares and the consummation of the
transactions contemplated herein and compliance by
the Company with its obligations hereunder (including
the use of the proceeds from the sale of the Shares
as described in the Prospectus under the caption "Use
Of Proceeds") will not, whether with or without the
giving of notice or lapse of time or both, conflict
with or constitute a breach of, or default or
Repayment Event under or result in the creation or
imposition of any lien, charge or encumbrance upon
any property or assets of the Company or any of its
subsidiaries pursuant to (A) the NationsBank
Agreement or (B) to the best of their knowledge and
information, any other contract, indenture, mortgage,
deed of trust, loan or credit agreement, note, lease
or any other agreement or instrument to which the
Company or any of its subsidiaries is a party or by
which it or any of them may be bound, or to which any
of the property or assets of the Company or any of
its subsidiaries is subject except for any such
conflict, breach, default or Repayment Event which
would not, either singly or in the aggregate, have a
Material Adverse Effect, nor will such action result
in any violation of the provisions of the charter or
by-laws of the Company, or any applicable law,
statute, rule, regulation, judgment, order, writ or
decree of any government, government instrumentality
or court, domestic or foreign, having jurisdiction
over the Company or any of its subsidiaries or any of
their respective properties, assets or operations.
(xvii) The documents incorporated by
reference in the Prospectus (other than the financial
statements and schedules and other financial or
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statistical data included or incorporated by
reference therein, as to which no opinion need be
rendered), when they became effective or were filed
with the Commission, as the case may be, complied as
to form in all material respects with the
requirements of the 1933 Act or the 1934 Act, as
applicable, and the rules and regulations of the
Commission thereunder.
(xviii) The Company is not an "investment
company" or an entity "controlled" by an "investment
company," as such terms are defined in the 1940 Act.
(xix) To the best of such counsel's
knowledge, neither the Company nor its subsidiaries
are in violation of their charter or bylaws; and the
Company and its subsidiaries are in compliance with
all laws, rules, regulations, judgments, decrees,
orders and statutes in the jurisdictions in which
they are conducting their business.
(xx) The Company has been and is organized
in conformity with the requirements for qualification
and taxation as a REIT under the Code and its methods
of operation have at all times enabled, and its
proposed methods of operation described in the
Registration Statement will enable, the Company to
qualify as a REIT under the Code.
(xxi) Each of FFCA Acquisition Corporation,
FFCA Institutional Advisors, Inc., FFCA Residual
Interest Corporation, FFCA Secured Assets
Corporation, FFCA Secured Lending Corporation and
FFCA Secured Franchise Loan Trust 1997-1 has been (at
all times during the period each such corporation has
been in existence) and will be treated as a
"qualified REIT subsidiary" under Section 856(i) of
the Code.
(xxii) FFCA Co-Investment Limited
Partnership has been (at all times on and after June
1, 1994) and will be treated as a partnership, rather
than an association taxable as a corporation or
publicly traded partnership, for federal income tax
purposes.
(xxiii) To the best of such counsel's
knowledge, no holder of any security of the Company
or any other person has any right to require
registration of shares of Common Stock or any other
security of the Company because of the filing of the
Registration Statement or consummation of the
transactions contemplated by this Agreement.
(xxiv) To the best of such counsel's
knowledge, except as described in the Prospectus,
there are no outstanding options, warrants or other
rights calling for the issuance of any shares of
capital stock of the Company or any security
convertible into or exchangeable or exercisable for
capital stock of the Company.
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(xxv) The form of certificates for the
Shares conforms to the requirements of the Delaware
General Corporation Law.
Such opinion shall be to such further effect with
respect to legal matters relating to this Agreement and the
sale of the Shares as counsel to the Underwriter may
reasonably request. In rendering such opinion, such counsel
may rely as to matters of fact (but not as to legal
conclusions), to the extent they deem proper, on certificates
of responsible officers of the Company and public officials.
Such opinion shall not state that it is to be governed or
qualified by, or that it is otherwise subject to, any
treatise, written policy or other document relating to legal
opinions, including, without limitation, the Legal Opinion
Accord of the ABA Section of Business Law (1991).
(2) The favorable opinion, dated as of the Closing
Time, of Latham & Watkins, counsel for the Underwriter, with
respect to the matters set forth in clauses (i), (vi), (vii),
(viii) (with respect to rights arising by operation of law or
under the charter or bylaws of the Company), (xi) and (xii),
inclusive, of subsection (b)(1) of this Section, except that,
with respect to the matters referred to in (xii), no opinion
need be expressed as to the documents incorporated by
reference in the Registration Statement.
(3) In giving their opinions required by subsections
(b)(1) and (b)(2), respectively, of this Section, Kutak Rock
and Latham & Watkins shall each additionally state that
nothing has come to their attention that led them to believe
that the Registration Statement (except for financial
statements and schedules and other financial or statistical
data included or incorporated by reference therein and the
Form T-1, as to which such counsel need make no statement), at
the time it became effective or on the date hereof, contained
an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to
make the statements therein not misleading or that the
Prospectus (except for financial statements and schedules and
other financial or statistical data included or incorporated
by reference therein, as to which such counsel need make no
statement), on the date hereof (unless the term "Prospectus"
refers to a prospectus which has been provided to the
Underwriter by the Company for use in connection with the
offering of the Shares which differs from the Prospectus on
file at the Commission at the time the Registration Statement
becomes effective, in which case at the date of such
prospectus), or at the Closing Time, included or includes an
untrue statement of a material fact or omitted or omits to
state a material fact necessary in order to make the
statements therein, in the light of the circumstances under
which they were made, not misleading.
(c) At the Closing Time there shall not have been, since the
date hereof or since the respective dates as of which information is
given in the Prospectus, any Material Adverse Change, whether or not
arising in the ordinary course of business, and the Underwriter shall
have received a certificate of the President or a Vice President of the
Company and of the chief financial or chief accounting officer of the
Company, dated as of the Closing Time, to the effect that (i) there has
been no such Material Adverse
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Change, (ii) the representations and warranties in Section 1 hereof are
true and correct with the same force and effect as though expressly
made at and as of Closing Time, (iii) the Company has complied with all
agreements and satisfied all conditions on its part to be performed or
satisfied at or prior to Closing Time, and (iv) no stop order
suspending the effectiveness of the Registration Statement has been
issued and no proceedings for that purpose have been initiated or
threatened by the Commission. As used in this Section 5(c) the term
"Prospectus" means the Prospectus in the form first used by the
Underwriter to confirm sales of the Shares.
(d) At the time of the execution of this Agreement, the
Underwriter shall have received from Arthur Andersen LLP a letter dated
such date, in form and substance satisfactory to the Underwriter,
containing statements and information of the type ordinarily included
in accountants' "comfort letters" to underwriters with respect to the
financial statements and certain financial information contained in the
Registration Statement.
(e) At the Closing Time the Underwriter shall have received
from Arthur Andersen LLP a letter, dated as of the Closing Time, to the
effect that they reaffirm the statements made in the letter furnished
pursuant to subsection (d) of this Section, except that the specified
date referred to shall be a date not more than three days prior to the
Closing Time.
(f) At the Closing Time, the Shares shall have been approved
for listing on the New York Stock Exchange, subject only to official
notice of issuance.
(g) At the Closing Time, counsel for the Underwriter shall
have been furnished with such documents and opinions as they may
require for the purpose of enabling them to pass upon the issuance and
sale of the Shares as herein contemplated and related proceedings, or
in order to evidence the accuracy of any of the representations or
warranties, or the fulfillment of any of the conditions, herein
contained; and all proceedings taken by the Company in connection with
the issuance and sale of the Shares as herein contemplated shall be
satisfactory in form and substance to the Underwriter and counsel for
the Underwriter.
If any condition specified in this Section shall not have been
fulfilled when and as required to be fulfilled, this Agreement may be terminated
by the Underwriter by notice to the Company at any time at or prior to the
Closing Time, and such termination shall be without liability of any party to
any other party except as provided in Section 4 and except that Sections 3(k), 6
and 7 shall survive any such termination and remain in full force and effect.
SECTION 6. Indemnification.
(a) The Company agrees to indemnify and hold harmless the Underwriter
and each person, if any, who controls the Underwriter within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act as follows:
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(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), including the
information deemed to be part of the Registration Statement pursuant to
Rule 434 of the 1933 Act Regulations, if applicable, or the omission or
alleged omission therefrom of a material fact required to be stated
therein or necessary to make the statements therein not misleading or
arising out of any untrue statement or alleged untrue statement of a
material fact contained in the Prospectus (or any amendment or
supplement thereto), or the omission or alleged omission therefrom of a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened,
or of any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission; provided
that (subject to Section 6(d) below) any such settlement is effected
with the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred
(including, subject to the third sentence of Section 6(c) hereof, the
reasonable fees and disbursements of counsel chosen by the
Underwriter), reasonably incurred in investigating, preparing or
defending against any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, to the extent that any such
expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by the
Underwriter expressly for use in the Registration Statement (or any amendment
thereto) or any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto).
(b) The Underwriter agrees to indemnify and hold harmless the Company,
its directors, each of its officers who signed the Registration Statement, and
each person, if any, who controls the Company within the meaning of Section 15
of the 1933 Act or Section 20 of the 1934 Act against any and all loss,
liability, claim, damage and expense described in the indemnity contained in
subsection (a) of this Section, as incurred, but only with respect to untrue
statements or omissions, or alleged untrue statements or omissions, made in the
Registration Statement (or any amendment thereto) or the Prospectus (or any
amendment or supplement thereto) in reliance upon and in conformity with written
information furnished to the Company by the Underwriter expressly for use in the
Registration Statement (or any amendment thereto) or the Prospectus (or any
amendment or supplement thereto).
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(c) Each indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying party of any action commenced against it in
respect of which indemnity may be sought hereunder, but failure to so notify an
indemnifying party shall not relieve such indemnifying party from any liability
which it may have otherwise than on account of this indemnity agreement. An
indemnifying party may participate at its own expense in the defense of any such
action; provided, however, that counsel to the indemnifying party shall not
(except with the consent of the indemnified party) be counsel to the indemnified
party. In no event shall the indemnifying parties be liable for fees and
expenses of more than one counsel (in addition to any local counsel) separate
from their own counsel for all indemnified parties in connection with any one
action or separate but similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances. No indemnifying
party shall, without the prior written consent of the indemnified parties,
settle or compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 6 or Section
7 hereof (whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party.
(d) If at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel, such indemnifying party agrees that it shall be liable for any
settlement of the nature contemplated by Section 6(a)(ii) effected without its
written consent if (i) such settlement is entered into more than 45 days after
receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall have received notice of the terms of such settlement at
least 30 days prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement.
(e) For purposes of this Section 6, all references to the Registration
Statement, any preliminary prospectus or the Prospectus, or any amendment or
supplement to any of the foregoing, shall be deemed to include, without
limitation, any electronically transmitted copies thereof, including, without
limitation, any copies filed with the Commission pursuant to EDGAR.
SECTION 7. Contribution. If the indemnification provided for in Section
6 hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and the Underwriter on the other hand from the offering of the Shares
pursuant to this Agreement or (ii) if the allocation provided by clause (i) is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the Company on the one hand and of the Underwriter on the
other hand in connection with the statements or omissions which resulted in such
losses, liabilities, claims,
23
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damages or expenses, as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and the Underwriter on
the other hand in connection with the offering of the Shares pursuant to this
Agreement shall be deemed to be in the same respective proportions as the total
net proceeds from the offering of the Shares pursuant to this Agreement (before
deducting expenses) received by the Company and the total underwriting discount
received by the Underwriter, in each case as set forth on the cover of the
Prospectus, bear to the aggregate initial public offering price of the Shares as
set forth on such cover. The relative fault of the Company on the one hand and
the Underwriter on the other hand shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company or by the Underwriter and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company and the Underwriter agree that
it would not be just and equitable if contribution pursuant to this Section 7
were determined by pro rata allocation or by any other method of allocation
which does not take account of the equitable considerations referred to above in
this Section 7. The aggregate amount of losses, liabilities, claims, damages and
expenses incurred by an indemnified party and referred to above in this Section
7 shall be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, in no event shall the
Underwriter be required to contribute any amount in excess of the amount by
which the total underwriting discount received by the Underwriter as set forth
on the cover of the Prospectus exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933
Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. For purposes of this Section 7, each person,
if any, who controls an Underwriter within the meaning of Section 15 of the 1933
Act or Section 20 of the 1934 Act shall have the same rights to contribution as
such Underwriter, and each director of the Company, each officer of the Company
who signed the Registration Statement, and each person, if any, who controls the
Company within the meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act shall have the same rights to contribution as the Company.
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement, or contained in certificates of officers of the Company submitted
pursuant hereto, shall remain operative and in full force and effect, regardless
of any investigation made by or on behalf of the Underwriter or controlling
person, or by or on behalf of the Company, and shall survive delivery of the
Shares to the Underwriter.
SECTION 9. Termination of Agreement.
(a) The Underwriter may terminate this Agreement, by notice to the
Company, at any time at or prior to the Closing Time (i) if there has been,
since the time of execution of this Agreement or since the respective dates as
of which information is given in the Prospectus, any
24
<PAGE>
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, or (ii) if there has occurred any material adverse
change in the financial markets in the United States or elsewhere, any outbreak
of hostilities or escalation thereof or other calamity or crisis or any change
or development involving a prospective change in national or international
political, financial or economic conditions, in each case the effect of which is
such as to make it, in the judgment of the Underwriter, impracticable (x) to
commence or continue the offering of the units of the Trust to the public or (y)
to enforce contracts for the sale of the units of the Trust by the Trust, or
(iii) if trading in the Common Stock has been suspended or limited by the
Commission or the New York Stock Exchange or if trading generally on the
American Stock Exchange or the New York Stock Exchange or in the
over-the-counter market has been suspended or limited, or minimum or maximum
prices for trading have been fixed, or maximum ranges for prices have been
required, by any of said exchanges or by such system or by order of the
Commission, the National Association of Securities Dealers, Inc. or any other
governmental authority, or (iv) if a banking moratorium has been declared by
either Federal, New York or Arizona authorities. As used in this Section 9(a),
the term "Prospectus" means the Prospectus in the form first used by the
Underwriter to confirm sales of the Shares.
(b) If this Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party to any other party except as
provided in Section 4 hereof, and provided further that Sections 3(k), 6 and 7
shall survive such termination and remain in full force and effect.
SECTION 10. Default by the Underwriter. If the Underwriter shall fail
at the Closing Time to purchase the Shares which it is obligated to purchase
under this Agreement (the "Defaulted Shares"), the Underwriter shall have the
right, within 24 hours thereafter, to make arrangements for any other
underwriters to purchase all, but not less than all, of the Defaulted Shares in
such amounts as may be agreed upon and upon the terms herein set forth.
No action taken pursuant to this Section shall relieve the Underwriter
from liability in respect of its default.
In the event of any such default which does not result in a termination
of this Agreement, either the Underwriter or the Company shall have the right to
postpone the Closing Time for a period not exceeding seven days in order to
effect any required changes in the Registration Statement or Prospectus or in
any other documents or arrangements. As used herein, the term "Underwriter"
includes any person substituted for an Underwriter under this Section 10.
SECTION 11. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriter shall be directed to the Underwriter at 388 Greenwich Street, New
York, New York 10013, attention of Gregory Wright; notices to the Company shall
be directed to it at 17207 North Perimeter Drive, Scottsdale, Arizona 85255,
attention of Morton H. Fleischer, with a copy to Dennis L. Ruben at the same
address.
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SECTION 12. Parties. This Agreement shall inure to the benefit of and
be binding upon the Underwriter and the Company and their respective successors.
Nothing expressed or mentioned in this Agreement is intended or shall be
construed to give any person, firm or corporation, other than the Underwriter
and the Company and their respective successors and the controlling persons and
officers and directors referred to in Sections 6 and 7 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein or therein contained. This
Agreement and all conditions and provisions hereof and thereof are intended to
be for the sole and exclusive benefit of the Underwriter and the Company and
their respective successors, and said controlling persons and officers and
directors and their heirs and legal representatives, and for the benefit of no
other person, firm or corporation. No purchaser of Shares from the Underwriter
shall be deemed to be a successor by reason merely of such purchase.
SECTION 13. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED IN SAID STATE. 26
<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
between the Underwriter and the Company in accordance with its terms.
Very truly yours,
FRANCHISE FINANCE CORPORATION OF
AMERICA
By /s/ Morton H. Fleisher
---------------------------------------------
Name: Morton H. Fleischer
Title: President and Chief Executive Officer
CONFIRMED AND ACCEPTED,
as of the date first above written:
SMITH BARNEY INC.
By /s/ James C. Conles
------------------------
James C. Conles
Managing Director
S-1
EXHIBIT 5
KUTAK ROCK ATLANTA
A PARTNERSHIP KANSAS CITY
INCLUDING PROFESSIONAL CORPORATIONS LITTLE ROCK
SUITE 2900 NEWPORT BEACH
717 SEVENTEENTH STREET NEW YORK
DENVER, COLORADO 80202-3329 OKLAHOMA CITY
(303) 297-2400 OMAHA
FACSIMILE (303) 292-7799 PHOENIX
PITTSBURGH
http://www.kutakrock.com WASHINGTON
September 11, 1997
Board of Directors
Franchise Finance Corporation
of America
The Perimeter Center
17207 North Perimeter Drive
Scottsdale, AZ 85255
Re: Issuance and Sale of Common Stock
Ladies and Gentlemen:
We have acted as counsel to Franchise Finance Corporation of America
(the "Company"), in connection with the preparation of the registration
statement on Form S-3 (Registration No. 33-62629), as amended (the "Registration
Statement"), filed with the Securities and Exchange Commission in connection
with the registration of $500,000,000 aggregate offering price of securities.
Further, we have acted as counsel to the Company in connection with the
preparation of the related Prospectus dated July 21, 1997 (the "Prospectus"),
and the Prospectus Supplement dated September 11, 1997 (the "Prospectus
Supplement") relating to the issuance of 956,160 shares of the Company's common
stock, $.01 par value per share (the "Common Stock"). We are familiar with the
proceedings heretofore taken by the Company in connection with the authorization
and registration, and in the preparation for the issuance and sale, of the
Common Stock.
For the purpose of rendering this opinion, we have examined such
corporate records, certificates and other documents of the Company, and have
made such investigations of law as
<PAGE>
Board of Directors
Franchise Finance Corporation
of America
September 11, 1997
Page 2
we deemed necessary or appropriate and we are familiar with the procedures taken
or proposed to be taken by the Company in connection with the issuance and sale
of the Common Stock. We have examined the Registration Statement, the Prospectus
and the Prospectus Supplement. In expressing this opinion, we have relied, as to
any questions of fact upon which our opinion is predicated, upon representations
and certificates of the officers of the Company. Except as otherwise indicated
herein, all terms defined in the Registration Statement, Prospectus and
Prospectus Supplement are used herein as so defined.
We have assumed for purposes of the opinions set forth below (i) that
no stop orders relating to the Registration Statement have been issued by the
Securities and Exchange Commission as of the date of the issuance and sale of
the Common Stock; (ii) the genuineness of all signatures and the authenticity
and completeness of all documents submitted to us as originals; (iii) the
conformity to originals and the authenticity of all documents supplied to us as
certified, photocopied, conformed or facsimile copies and the authenticity and
completeness of the originals of any such documents; (iv) the proper, genuine
and due execution and delivery of all documents by all parties to them and that
there has been no breach of the terms thereof; (v) that all required actions are
taken and conditions satisfied with respect to the issuance of the Common Stock
as specified in the Prospectus and Prospectus Supplement; and (vi) consideration
is received for the Common Stock.
Based upon the foregoing and subject to the qualifications set forth
above, we are of the opinion that at the time the Common Stock is issued, the
Common Stock will be legally issued, fully paid and nonassessable.
This opinion is given for the sole benefit of the addressee hereof and
may not be relied upon by or delivered to any other person. In addition, this
opinion relates only to the matters and the transactions specifically referred
to, and no other opinions should be implied therefrom.
Respectfully submitted,
/s/ Kutak Rock
Kutak Rock
