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): April 16, 1998
FRANCHISE FINANCE CORPORATION OF AMERICA
- --------------------------------------------------------------------------------
(Exact Name of Registrant as Specified in Its Charter)
Delaware 1-13116 86-0736091
- --------------- ------------ ----------------------
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification Number)
incorporation)
17207 North Perimeter Drive, Scottsdale, AZ 85255
-------------------------------------------------
(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)
<PAGE>
Item 5. Other Events.
(a) On April 16, 1998, the Registrant entered into a Distribution
Agreement (the "Distribution Agreement") with Merrill Lynch & Co., Merrill
Lynch, Pierce, Fenner & Smith Incorporated, Salomon Brothers Inc, NationsBanc
Montgomery Securities LLC, Inc., Donaldson, Lufkin & Jenrette Securities
Corporation, and UBS Securities LLC (collectively, the "Agents"), with respect
to the issue and sale by the Registrant of its Medium-Term Notes Due Nine Months
or More From Date of Issue (the "Notes"). The Notes are to be issued pursuant to
an Indenture, dated as of November 21, 1995, as amended or modified from time to
time, between the Registrant and Norwest Bank Arizona, National Association, as
trustee. As of the date of the Distribution Agreement, the Registrant has
authorized the issuance and sale of up to $400,000,000 aggregate initial
offering price of Notes to or through the Agents pursuant to the terms of the
Distribution Agreement. The Distribution 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 Notes. The opinion is attached hereto and
referenced as Exhibit 5.01.
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
1.01 Distribution Agreement
4.01 Form of Fixed Rate Note
4.02 Form of Floating Rate Note
5.01 Legal Opinion of Kutak Rock
<PAGE>
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: April 22, 1998 By /s/ John Barravecchia
----------------------
John Barravecchia,
Executive Vice President
and Chief Financial Officer
Dated: April 22, 1998 By /s/ Catherine F. Long
---------------------
Catherine F. Long,
Senior Vice President, Finance and
Principal Accounting Officer
FRANCHISE FINANCE CORPORATION
OF AMERICA
Medium-Term Notes
Due Nine Months or More From Date of Issue
DISTRIBUTION AGREEMENT
April 16, 1998
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
World Financial Center
North Tower, 10th Floor
New York, New York 10281-1310
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION
277 Park Avenue
New York, New York 10172
NATIONSBANC MONTGOMERY SECURITIES LLC
100 North Tryon Street
Charlotte, North Carolina 28255
SALOMON BROTHERS INC
7 World Trade Center
New York, New York 10048
UBS SECURITIES LLC
299 Park Avenue
New York, New York 10171
Dear Ladies and Gentlemen:
Franchise Finance Corporation of America, a Delaware corporation (the
"Company"), confirms its agreement with Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated, Donaldson, Lufkin & Jenrette Securities
Corporation, NationsBanc Montgomery Securities LLC, Salomon Brothers Inc, and
UBS Securities LLC (each, an "Agent", and collectively, the "Agents") with
respect to the issue and sale by the Company of its
<PAGE>
Medium-Term Notes Due Nine Months or More From Date of Issue (the "Notes"). The
Notes are to be issued pursuant to an Indenture, dated as of November 21, 1995,
as amended or modified from time to time (the "Indenture"), between the Company
and Norwest Bank Arizona, National Association, as trustee (the "Trustee"). As
of the date hereof, the Company has authorized the issuance and sale of up to
U.S. $400,000,000 aggregate initial offering price of Notes to or through the
Agents pursuant to the terms of this Agreement. It is understood, however, that
the Company may from time to time authorize the issuance of additional Notes and
that such additional Notes may be sold to or through the Agents pursuant to the
terms of this Agreement, including the provisions of Section 1(a), all as though
the issuance of such Notes were authorized as of the date hereof.
This Agreement provides both for the sale of Notes by the Company to
one or more Agents as principal for resale to investors and other purchasers and
for the sale of Notes by the Company directly to investors (as may from time to
time be agreed to by the Company and the applicable Agent), in which case the
applicable Agent will act as an agent of the Company in soliciting offers for
the purchase of Notes.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-26437) and
pre-effective amendment no. 1 thereto for the registration of common stock,
preferred stock and debt securities, including the Notes, under the Securities
Act of 1933, as amended (the "1933 Act"), and the offering thereof from time to
time in accordance with Rule 415 of the rules and regulations of the Commission
under the 1933 Act (the "1933 Act Regulations"), and the Company has filed such
post-effective amendments thereto as may be required prior to any acceptance by
the Company of an offer for the purchase of Notes. Such registration statement
(as so amended, if applicable) has been declared effective by the Commission and
the Indenture has been duly qualified under the Trust Indenture Act of 1939, as
amended (the "1939 Act"). Such registration statement (as so amended, if
applicable) is referred to herein as the "Registration Statement"; and the final
prospectus and all applicable amendments or supplements thereto (including the
final prospectus supplement and pricing supplement relating to the offering of
Notes), in the form first furnished to the applicable Agent(s), are collectively
referred to herein as the "Prospectus"; provided, however, that all references
to the "Registration Statement" and the "Prospectus" shall also be deemed to
include all documents incorporated therein by reference pursuant to the
Securities Exchange Act of 1934, as amended (the "1934 Act"), prior to any
acceptance by the Company of an offer for the purchase of Notes; provided,
further, that if the Company files a registration statement with the Commission
pursuant to Rule 462(b) of the 1933 Act Regulations (the "Rule 462(b)
Registration Statement"), then, after such filing, all references to the
"Registration Statement" shall also be deemed to include the Rule 462(b)
Registration Statement. A "preliminary prospectus" shall be deemed to refer to
any prospectus supplement furnished by the Company after the registration
statement became effective and before any acceptance by the Company of an offer
for the purchase of Notes which omitted information to be included upon pricing
in a form of prospectus filed with the Commission
2
<PAGE>
pursuant to Rule 424(b) of the 1933 Act Regulations. For purposes of this
Agreement, all references to the Registration Statement, Prospectus or
preliminary prospectus or to any amendment or supplement thereto shall be deemed
to include any copy filed with the Commission pursuant to its Electronic Data
Gathering, Analysis and Retrieval system ("EDGAR").
All references in this Agreement to financial statements and schedules
and other information which is "disclosed", "contained", "included" or "stated"
(or other references of like import) in the Registration Statement, Prospectus
or preliminary prospectus shall be deemed to include all such financial
statements and schedules and other information which is incorporated by
reference in the Registration Statement, Prospectus or preliminary prospectus,
as the case may be; and all references in this Agreement to amendments or
supplements to the Registration Statement, Prospectus or preliminary prospectus
shall be deemed to include the filing of any document under the 1934 Act which
is incorporated by reference in the Registration Statement, Prospectus or
preliminary prospectus, as the case may be.
1. Appointment as Agent.
---------------------
(a) Appointment. Subject to the terms and conditions stated herein and
subject to the reservation by the Company of the right to sell Notes directly on
its own behalf, the Company hereby agrees that Notes will be sold to or through
the Agents. Notwithstanding any provision herein to the contrary, the Company
reserves the right to appoint additional agents for the offer and sale of Notes,
which agency may be on an on-going basis or on a one-time basis. Any such
additional agent shall become a party to this Agreement and shall thereafter be
subject to the provisions hereof and entitled to the benefits hereunder upon the
execution of a counterpart hereof or other form of acknowledgment of its
appointment hereunder, including the form of letter attached hereto as Exhibit
B, and delivery to the Company of addresses for notice hereunder and under the
Procedures. After the time an Agent is appointed, the Company shall deliver to
the Agent, at such Agent's request, copies of the documents delivered to other
Agents under Sections 5(b), 5(c) and 5(d) and, if such appointment is on an
on-going basis, Sections 7(b), 7(c) and 7(d) hereof. The Company agrees to
promptly inform the Agents by written notice of the appointment of any
additional agent. Notwithstanding the foregoing, the Company agrees that it will
not solicit any other agent to act on its behalf, or to assist it, in the
placement of the Notes.
(b) Sale of Notes. The Company shall not sell or approve the
solicitation of offers for the purchase of Notes in excess of the amount which
shall be authorized by the Company from time to time or in excess of the
aggregate initial offering price of Notes registered pursuant to the
Registration Statement. The Agents shall have no responsibility for maintaining
records with respect to the aggregate initial offering price of Notes sold, or
of otherwise monitoring the availability of Notes for sale, under the
Registration Statement.
3
<PAGE>
(c) Purchases as Principal. The Agents shall not have any obligation to
purchase Notes from the Company as principal. However, absent an agreement
between an Agent and the Company that such Agent shall be acting solely as an
agent for the Company, such Agent shall be deemed to be acting as principal in
connection with any offering of Notes by the Company through such Agent.
Accordingly, the Agents, individually or in a syndicate, may agree from time to
time to purchase Notes from the Company as principal for resale to investors and
other purchasers determined by such Agents. Any purchase of Notes from the
Company by an Agent as principal shall be made in accordance with Section 3(a)
hereof.
(d) Solicitations as Agent. If agreed upon between an Agent and the
Company, such Agent, acting solely as an agent for the Company and not as
principal, will solicit offers for the purchase of Notes. Unless otherwise
instructed by the Company such Agent will communicate to the Company, orally,
each reasonable offer for the purchase of Notes solicited by it on an agency
basis. Such Agent shall have the right, in its discretion reasonably exercised,
to reject any offer for the purchase of Notes, in whole or in part, and any such
rejection shall not be deemed a breach of its agreement contained herein. The
Company may accept or reject any offer for the purchase of Notes, in whole or in
part. Such Agent shall make reasonable efforts to assist the Company in
obtaining performance by each purchaser whose offer for the purchase of Notes
has been solicited by it on an agency basis and accepted by the Company. Such
Agent shall not have any liability to the Company in the event that any such
purchase is not consummated for any reason. If the Company shall default on its
obligation to deliver Notes to a purchaser whose offer has been solicited by
such Agent on an agency basis and accepted by the Company, the Company shall (i)
hold such Agent harmless against any loss, claim or damage arising from or as a
result of such default by the Company and (ii) pay to such Agent any commission
to which it would otherwise be entitled absent such default.
(e) Reliance. The Company and the Agents agree that any Notes purchased
from the Company by one or more Agents as principal shall be purchased, and any
Notes the placement of which an Agent arranges as an agent of the Company shall
be placed by such Agent, in reliance on the representations, warranties,
covenants and agreements of the Company contained herein and on the terms and
conditions and in the manner provided herein.
2. Representations and Warranties.
-------------------------------
(a) The Company represents and warrants to each Agent as of the date
hereof, as of the date of each acceptance by the Company of an offer for the
purchase of Notes (whether to such Agent as principal or through such Agent as
agent), as of the date of each delivery of Notes (whether to such Agent as
principal or through such Agent as agent) (the date of each such delivery to the
Agent as principal being hereafter referred to as a "Settlement Date"), and as
of any time that the Registration Statement or the Prospectus shall
4
<PAGE>
be amended or supplemented or there is filed with the SEC any document
incorporated by reference into the Prospectus (each of the times referenced
above being referred to herein as a "Representation Date"), as follows:
(i) Due Incorporation and Qualification. 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 Notes and the
Indenture; and the Company is duly qualified as a foreign corporation
to transact business and is in good standing in the State of 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 where the failure to so qualify or 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").
(ii) Subsidiaries. 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,
5
<PAGE>
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) 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).
(iii) Registration Statement and Prospectus. The Company meets
the requirements for use of Form S-3 under the 1933 Act; the
Registration Statement (including any Rule 462(b) Registration
Statement) has become effective under the 1933 Act and no stop order
suspending the effectiveness of the Registration Statement (including
any Rule 462(b) Registration Statement) has been issued under the 1933
Act and no proceedings for that purpose have been instituted or are
pending or, to the knowledge of the Company, are contemplated by the
Commission, and any request on the part of the Commission for
additional information has been complied with; at the respective times
that the Registration Statement, any Rule 462(b) Registration Statement
and any post-effective amendment thereto (including the filing of the
Company's most recent Annual Report on Form 10-K with the Commission
(the "Annual Report on Form 10-K")) became effective and at each
Representation Date, the Registration Statement (including any Rule
462(b) Registration Statement) and any amendments thereto complied 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
6
<PAGE>
rules and regulations of the Commission under the 1939 Act (the "1939
Act Regulations") 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; each preliminary prospectus and prospectus filed as part of
the Registration Statement as originally filed or as part of any
amendment thereto, or filed pursuant to Rule 424 under the 1933 Act,
complied when so filed in all material respects with the 1933 Act
Regulations; each preliminary prospectus and the Prospectus delivered
to the applicable Agent(s) for use in connection with the offering of
Notes are identical to any electronically transmitted copies thereof
filed with the Commission pursuant to EDGAR, except to the extent
permitted by Regulation S-T; and at the date hereof, at the date of the
Prospectus and at each Representation Date, neither the Prospectus nor
any amendment or supplement thereto included or will include an untrue
statement of a material fact or omitted or will 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
subsection shall not apply to statements in or omissions from the
Registration Statement or the Prospectus made in reliance upon and in
conformity with information furnished to the Company in writing by the
Agents expressly for use in the Registration Statement or the
Prospectus.
(iv) Incorporated Documents. The documents incorporated by
reference in the Prospectus, at the time they were or hereafter are
filed with the SEC, complied or when so filed will comply, as the case
may be, in all material respects with the requirements of the 1934 Act
and the rules and regulations promulgated thereunder (the "1934 Act
Regulations"), and, when read together and with the other information
in the Prospectus, did not and will not include an untrue statement of
a material fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were or are made, not
misleading.
(v) Accountants. The accountants who certified the financial
statements included or incorporated by reference in the Prospectus are
independent public accountants within the meaning of the 1933 Act and
the 1933 Act Regulations.
(vi) Financial Statements. The financial statements, the notes
thereto and any supporting schedules of the Company and its
subsidiaries or any other entity included or incorporated by reference
in the Registration Statement and the Prospectus present fairly the
consolidated financial position of the Company and its subsidiaries or
such entity as of the dates indicated and the consolidated results of
their operations for the periods specified; except as stated therein,
said financial statements have been prepared in conformity with United
States generally accepted accounting principles applied on a consistent
basis; and the supporting schedules included or incorporated
7
<PAGE>
by reference in the Registration Statement and the Prospectus present
fairly the information required to be stated therein; and any pro forma
consolidated financial statements of the Company and its subsidiaries
and the related notes thereto included in the Registration Statement
and the Prospectus present fairly the information shown therein have
been prepared in accordance with the Commission's rules and guidelines
with respect to pro forma financial statements and have 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.
(vii) Authorization and Validity of this Agreement, the
Indenture and the Notes. This Agreement has been duly authorized,
executed and delivered by the Company and, upon execution and delivery
by the Agents, will be a valid and legally binding agreement of the
Company; the Indenture has been duly qualified under the 1939 Act and
has been duly authorized, executed and delivered by the Company and is
a valid and legally binding agreement of the Company enforceable in
accordance with its terms, except as enforcement thereof may be limited
by bankruptcy, insolvency, reorganization, moratorium or other laws
relating to or affecting enforcement of creditors' rights generally or
by general equity principles; the Notes have been duly and validly
authorized for issuance, offer and sale pursuant to this Agreement and
the Indenture and, when issued, authenticated and delivered pursuant to
the provisions of this Agreement and the Indenture against payment of
the consideration therefor, the Notes will constitute valid and legally
binding obligations of the Company enforceable against the Company in
accordance with their terms, except as enforcement thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or other
laws relating to or affecting enforcement of creditors' rights
generally or by general equity principles; the Notes will be
substantially in the form contemplated by the Indenture and heretofore
delivered to the Agents and the Notes and the Indenture will conform in
all material respects to all statements relating thereto contained in
the Prospectus; and the Notes will be entitled to the benefits of the
Indenture.
(viii) Material Changes or Material Transactions. 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 material
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
8
<PAGE>
value $.01 per share, of the Company (the "Common Stock"), there has
been no dividend or distribution of any kind declared, paid or made by
the Company on any class of its capital stock.
(ix) No Defaults. 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 Second
Amended and Restated Credit Agreement dated as of December 29, 1997, or
the Credit Agreement dated as of January 27, 1998 between the Company,
certain lenders and co-agents named therein and NationsBank of Texas,
N.A., as administrative agent, as such agreements may be amended or
modified from time to time (collectively, the "NationsBank Agreement")
that constitutes or will constitute an Event of Default (as defined
therein) under 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 Indenture
and the Notes and the consummation of the transactions contemplated
herein and therein and compliance by the Company with its obligations
hereunder and thereunder have been duly authorized by all necessary
corporate action and do not and will not (i) constitute an Event of
Default (as defined in the NationsBank Agreement) under 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
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.
9
<PAGE>
(x) Regulatory Approvals. No consent, approval, authorization,
order or decree of any court or governmental agency or body is required
for the consummation by the Company of the transactions contemplated by
this Agreement or in connection with the sale of Notes hereunder,
except such as have been obtained or rendered, as the case may be, or
as may be required under state securities laws.
(xi) Legal Proceedings. Except as may be included or
incorporated by reference in the Registration Statement and the
Prospectus, 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 might reasonably be expected to result in any
Material Adverse Change 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.
(xii) Contracts. There are no contracts or documents of the
Company or any of its subsidiaries which are required to be filed as
exhibits to the Registration Statement, the Prospectus or the documents
incorporated by reference therein by the 1933 Act, the 1933 Act
Regulations, the 1934 Act or the 1934 Act Regulations which have not
been so filed.
(xiii) No Violation. Neither the Company nor any of its
subsidiaries is in violation of any law, statute, ordinance,
governmental rule or regulation or court decree which violation, either
singly or together with any other violation, would have a Material
Adverse Effect.
(xiv) Licenses. 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
10
<PAGE>
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) Trademarks; Service Marks. 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 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.
(xvi) Labor Matters. 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.
(xvii) Properties. 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
11
<PAGE>
respect to such property was made, was served by all public utilities
necessary for the 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.
(xviii) Environmental Matters. Neither the Company nor any of
its subsidiaries is in violation of any federal, state, local or
foreign 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 where the Company or its subsidiaries
have obtained one or more policies of environmental insurance to cover
such risks, with deductible amounts, loss limits and aggregate
liability limitations which were deemed reasonably appropriate by the
Company under the circumstances, and, except such violations as would
not, either singly or in the aggregate, have a Material Adverse Effect,
and 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.
(xix) Taxes. 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 2(a)(vi) 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
12
<PAGE>
of its subsidiaries has not been finally determined or remains open to
examination by applicable taxing authorities.
(xx) Accounting Matters. 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.
(xxi) Company's Securities. 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
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 Notes or (ii) (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 Notes, or (B) paid or agreed to pay to any person any
compensation for soliciting another to purchase any other securities of
the Company.
(xxii) Legal Status. 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 Code, and its method of
operation has at all times enabled, and its proposed method of
operation will enable, the Company to qualify as a REIT under the Code.
(xxiii) Title Insurance. 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
13
<PAGE>
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.
(xxiv) Investment Company Act. Neither the Company, nor any of
its subsidiaries, is, and upon the issuance and sale of the Notes as
herein contemplated and the application of the net proceeds therefrom,
will 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").
(xxv) Commodity Exchange Act. The Notes, when issued,
authenticated and delivered pursuant to the provisions of this
Agreement and the Indenture, will be excluded or exempted under the
provisions of the Commodity Exchange Act.
(xxvi) Doing Business with Cuba. The Company has complied
with, and is and will be in compliance with, the provisions of Florida
H.B. 1771, codified as Section 517.075 of the Florida Statutes, 1987,
as amended, and all regulations promulgated thereunder relating to
issuers doing business in Cuba.
(xxvii) Ratings. The Medium-Term Note Program under which the
Notes are issued (the "Program"), as well as the Notes, are rated Baa3
by Moody's Investors Service, Inc. and BBB- by Standard & Poor's
Ratings Group, or such other rating as to which the Company shall have
most recently notified the Agents pursuant to Section 4(a) hereof.
(b) Additional Certifications. Any certificate signed by any officer of
the Company or any of its subsidiaries and delivered to one or more Agents or to
counsel for the Agents in connection with an offering of Notes to one or more
Agents as principal or through an Agent as agent shall be deemed a
representation and warranty by the Company to such Agent or Agents as to the
matters covered thereby on the date of such certificate and, unless subsequently
amended or supplemented, at each Representation Date subsequent thereto.
14
<PAGE>
3. Purchases as Principal; Solicitations as Agent.
-----------------------------------------------
(a) Purchases as Principal. Notes purchased from the Company by the
Agents, individually or in a syndicate, as principal shall be made in accordance
with terms agreed upon between such Agent or Agents and the Company (which
terms, unless otherwise agreed, shall, to the extent applicable, include those
terms specified in Exhibit A hereto and shall be agreed upon orally, with
written confirmation prepared by such Agent or Agents and mailed to the
Company). An Agent's commitment to purchase Notes as principal shall be deemed
to have been made on the basis of the representations and warranties of the
Company herein contained and shall be subject to the terms and conditions herein
set forth. Unless the context otherwise requires, references herein to "this
Agreement" shall include the applicable agreement of one or more Agents to
purchase Notes from the Company as principal. Each purchase of Notes, unless
otherwise agreed, shall be at a discount from the principal amount of each such
Note equivalent to the applicable commission set forth in Schedule A hereto. The
Agents may engage the services of any broker or dealer in connection with the
resale of the Notes purchased by them as principal and may allow all or any
portion of the discount received from the Company in connection with such
purchases to such brokers or dealers. At the time of each purchase of Notes from
the Company by one or more Agents as principal, such Agent or Agents shall
specify the requirements for the officers' certificate, opinion of counsel and
comfort letter pursuant to Sections 7(b), 7(c) and 7(d) hereof.
If the Company and two or more Agents enter into an agreement pursuant
to which such Agents agree to purchase Notes from the Company as principal and
one or more of such Agents shall fail at the Settlement Date to purchase the
Notes which it or they are obligated to purchase (the "Defaulted Notes"), then
the nondefaulting Agents shall have the right, within 24 hours thereafter, to
make arrangements for one of them or one or more other Agents or underwriters to
purchase all, but not less than all, of the Defaulted Notes in such amounts as
may be agreed upon and upon the terms herein set forth; provided, however, that
if such arrangements shall not have been completed within such 24-hour period,
then:
(i) if the aggregate principal amount of Defaulted Notes does
not exceed 10% of the aggregate principal amount of Notes to be so
purchased by all of such Agents on the Settlement Date, the
nondefaulting Agents shall be obligated, severally and not jointly, to
purchase the full amount thereof in the proportions that their
respective initial underwriting obligations bear to the underwriting
obligations of all nondefaulting Agents; or
(ii) if the aggregate principal amount of Defaulted Notes
exceeds 10% of the aggregate principal amount of Notes to be so
purchased by all of such Agents on the Settlement Date, such agreement
shall terminate without liability on the part of any nondefaulting
Agent.
15
<PAGE>
No action taken pursuant to this paragraph shall relieve any defaulting Agent
from liability in respect of its default. In the event of any such default which
does not result in a termination of such agreement, either the nondefaulting
Agents or the Company shall have the right to postpone the Settlement Date for a
period not exceeding seven days in order to effect any required changes in the
Registration Statement or the Prospectus or in any other documents or
arrangements.
(b) Solicitations as Agent. On the basis of the representations and
warranties herein contained, but subject to the terms and conditions herein set
forth, when agreed by the Company and an Agent, such Agent, as an agent of the
Company, will use its reasonable efforts to solicit offers for the purchase of
Notes upon the terms set forth in the Prospectus. The Agents are not authorized
to appoint sub-agents with respect to Notes sold through them as agent. All
Notes sold through an Agent as agent will be sold at 100% of their principal
amount unless otherwise agreed upon between the Company and such Agent.
The Company reserves the right, in its sole discretion, to suspend
solicitation of offers for the purchase of Notes through an Agent, as an agent
of the Company, commencing at any time for any period of time or permanently. As
soon as practicable after receipt of instructions from the Company, such Agent
will suspend solicitation of offers for the purchase of Notes from the Company
until such time as the Company has advised such Agent that such solicitation may
be resumed.
The Company agrees to pay each Agent a commission, in the form of a
discount, equal to the applicable percentage of the principal amount of each
Note sold by the Company as a result of a solicitation made by such Agent, as an
agent of the Company, as set forth in Schedule A hereto.
(c) Administrative Procedures. The purchase price, interest rate or
formula, maturity date and other terms of the Notes specified in Exhibit A
hereto (as applicable) shall be agreed upon between the Company and the
applicable Agent(s) and specified in a pricing supplement to the Prospectus
(each, a "Pricing Supplement") to be prepared by the Company in connection with
each sale of Notes. Except as otherwise specified in the applicable Pricing
Supplement, the Notes will be issued in denominations of U.S. $1,000 or any
larger amount that is an integral multiple of U.S. $1,000. Administrative
procedures with respect to the issuance and sale of the Notes (the "Procedures")
shall be agreed upon from time to time among the Company, the Agents and the
Trustee. The Agents and the Company agree to perform, and the Company agrees to
cause the Trustee to agree to perform, their respective duties and obligations
specifically provided to be performed by them in the Procedures.
16
<PAGE>
4. Covenants of the Company.
-------------------------
The Company covenants and agrees with each Agent as follows:
(a) Notice of Certain Events. The Company will notify the Agents
immediately, and confirm such notice in writing, of (i) the effectiveness of any
post-effective amendment to the Registration Statement or the filing of any
amendment or supplement to the Prospectus (other than any amendment or
supplement thereto providing solely for the determination of the variable terms
of the Notes or relating solely to the offering of securities other than the
Notes), (ii) the receipt of any comments from the Commission, (iii) any request
by the Commission for any amendment to the Registration Statement or any
amendment or supplement to the Prospectus or for additional information, (iv)
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, or of the initiation of any proceedings for that
purpose or (v) any change in the rating assigned by any nationally recognized
statistical rating organization to the Program or any debt securities (including
the Notes) of the Company, or the public announcement by any nationally
recognized statistical rating organization that it has under surveillance or
review, with possible negative implications, its rating of the Program or any
such debt securities, or the withdrawal by any nationally recognized statistical
rating organization of its rating of the Program or any such debt securities.
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.
(b) Filing or Use of Amendments. The Company will give the Agents
advance notice of its intention to file or prepare any additional registration
statement with respect to the registration of additional Notes, any amendment to
the Registration Statement (including any filing under Rule 462(b) of the 1933
Act Regulations) or any amendment or supplement to the prospectus included in
the Registration Statement at the time it became effective or to the Prospectus
(other than an amendment or supplement thereto providing solely for the
determination of the variable terms of the Notes or relating solely to the
offering of securities other than the Notes), whether pursuant to the 1933 Act,
the 1934 Act or otherwise, will furnish to the Agents copies of any such
document a reasonable amount of time prior to such proposed filing or use, as
the case may be, and will not file any such document to which the Agents or
counsel for the Agents shall object.
(c) Delivery of the Registration Statement. The Company has furnished
to each Agent and to counsel for the Agents, without charge, signed and
conformed copies of the Registration Statement as 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 and conformed copies of all consents and
certificates of experts. The Registration Statement and each amendment thereto
furnished to
17
<PAGE>
the Agents will be identical to any electronically transmitted copies thereof
filed with the Commission pursuant to EDGAR, except to the extent permitted by
Regulation S-T.
(d) Delivery of the Prospectus. The Company will deliver to each Agent,
without charge, as many copies of each preliminary prospectus as such Agent may
reasonably request, and the Company hereby consents to the use of such copies
for purposes permitted by the 1933 Act. The Company will furnish to each Agent,
without charge, such number of copies of the Prospectus (as amended or
supplemented) as such Agent may reasonably request. The Prospectus and any
amendments or supplements thereto furnished to the Agents will be identical to
any electronically transmitted copies thereof filed with the Commission pursuant
to EDGAR, except to the extent permitted by Regulation S-T.
(e) Preparation of Pricing Supplements. The Company will prepare, with
respect to any Notes to be sold to or through one or more Agents pursuant to
this Agreement, a Pricing Supplement with respect to such Notes in a form
previously approved by the Agents. The Company will deliver such Pricing
Supplement no later than 11:00 a.m., New York City time, on the business day
following the date of the Company's acceptance of the offer for the purchase of
such Notes and will file such Pricing Supplement pursuant to Rule 424(b) under
the 1933 Act within the prescribed time period.
(f) Revisions of Prospectus -- Material Changes. Except as otherwise
provided in subsection (m) of this Section 4, if at any time during the term of
this Agreement any event shall occur or condition shall exist as a result of
which it is necessary, in the opinion of counsel for the Agents or counsel for
the Company, to amend the Registration Statement in order that the Registration
Statement 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 or to amend or supplement the Prospectus in
order that the Prospectus 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 not misleading in the light of the circumstances existing at the time
the Prospectus is delivered to a purchaser, or if it shall be necessary, in the
opinion of either such counsel, 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 shall give immediate notice,
confirmed in writing, to the Agents to cease the solicitation of offers for the
purchase of Notes in their capacity as agents and to cease sales of any Notes
they may then own as principal, and the Company will promptly prepare and file
with the Commission, subject to Section 4(b) hereof, such amendment or
supplement as may be necessary to correct such statement or omission or to make
the Registration Statement and Prospectus comply with such requirements, and the
Company will furnish to the Agents, without charge, such number of copies of
such amendment or supplement as the Agents may reasonably request. In addition,
the Company will comply with the 1933 Act, the 1933 Act Regulations, the 1934
Act and the
18
<PAGE>
1934 Act Regulations so as to permit the completion of the distribution of each
offering of Notes.
(g) Prospectus Revisions -- Periodic Financial Information. Except as
otherwise provided in subsection (m) of this Section 4, on or prior to the date
on which there shall be released to the general public interim financial
statement information related to the Company with respect to each of the first
three quarters of any fiscal year or preliminary financial statement information
with respect to any fiscal year, the Company shall furnish such information to
the Agents, confirmed in writing, and shall cause the Prospectus to be amended
or supplemented to include financial information with respect thereto and
corresponding information for the comparable period of the preceding fiscal
year, as well as such other information and explanations as shall be necessary
for an understanding thereof or as shall be required by the 1933 Act or the 1933
Act Regulations.
(h) Prospectus Revisions -- Audited Financial Information. Except as
otherwise provided in subsection (m) of this Section 4, on or prior to the date
on which there shall be released to the general public financial information
included in or derived from the audited consolidated financial statements of the
Company for the preceding fiscal year, the Company shall furnish such
information to the Agents, confirmed in writing, and shall cause the Prospectus
to be amended or supplemented to include such audited consolidated financial
statements and the report or reports, and consent or consents to such inclusion,
of the independent accountants with respect thereto, as well as such other
information and explanations as shall be necessary for an understanding of such
consolidated financial statements or as shall be required by the 1933 Act or the
1933 Act Regulations.
(i) Earnings Statements. The Company will timely file such reports
pursuant to the 1934 Act as are necessary in order to make generally available
to its securityholders as soon as practicable an earnings statement for the
purposes of, and to provide the benefits contemplated by, the last paragraph of
Section 11(a) of the 1933 Act.
(j) Reporting Requirements. 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 prescribed by the 1934 Act and the 1934 Act
Regulations.
(k) Restriction on Offers and Sales of Securities. Unless otherwise
agreed upon between one or more Agents acting as principal and the Company,
between the date of the agreement by such Agent(s) to purchase the related Notes
from the Company and the Settlement Date with respect thereto, the Company will
not, without the prior written consent of such Agent(s), issue, sell, offer or
contract to sell, grant any option for the sale of, or otherwise dispose of, any
debt securities of the Company (other than the Notes that are to be sold
pursuant to such agreement or commercial paper in the ordinary course of
business).
19
<PAGE>
(l) Use of Proceeds. The Company will use the net proceeds received by
it from the issuance and sale of the Notes in the manner specified in the
Prospectus.
(m) Suspension of Certain Obligations. The Company shall not be
required to comply with the provisions of subsections (f), (g) or (h) of this
Section 4 during any period from the time (i) the Agents shall have suspended
solicitation of offers for the purchase of Notes in their capacity as agents
pursuant to a request from the Company and (ii) no Agent shall then hold any
Notes purchased from the Company as principal, as the case may be, until the
time the Company shall determine that solicitation of offers for the purchase of
Notes should be resumed or an Agent shall subsequently purchase Notes from the
Company as principal.
5. Conditions of Agents' Obligations.
----------------------------------
The obligations of one or more Agents to purchase Notes from the
Company as principal and to solicit offers for the purchase of Notes as an agent
of the Company, and the obligations of any purchasers of Notes sold through an
Agent as an agent of the Company, will be subject to the accuracy of the
representations and warranties on the part of the Company herein contained or
contained in any certificate of an officer of the Company or any of its
subsidiaries delivered pursuant to the provisions hereof, to the performance and
observance by the Company of its covenants and other obligations hereunder, and
to the following additional conditions precedent:
(a) Effectiveness of Registration Statement. The Registration Statement
(including any Rule 462(b) Registration Statement) has become effective under
the 1933 Act and no stop order suspending the effectiveness of the Registration
Statement shall have been issued under the 1933 Act and no proceedings for that
purpose shall have been instituted or shall be pending 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 Agents.
(b) Legal Opinions. On the date hereof, the Agents shall have received
the following legal opinions, dated as of the date hereof and in form and
substance satisfactory to the Agents:
(1) Opinion of Company Counsel. The favorable opinion of Kutak
Rock, counsel to the Company, 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.
20
<PAGE>
(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 Prospectus and to
enter into and perform its obligations under this Agreement.
(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 be in good standing would not, either
singly or in the aggregate, have a Material Adverse Effect.
(iv) 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, as the case may be, power and
authority to own, lease and operate its properties and conduct
its business, 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; 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, 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.
(v) This Agreement has been duly authorized,
executed and delivered by the Company.
(vi) The Indenture has been duly authorized,
executed and delivered by the Company and (assuming the
Indenture has been duly authorized, executed and delivered by
the Trustee) constitutes a legal, valid and binding agreement
of the Company, enforceable against the Company in accordance
with its terms, except as enforcement thereof may be limited
by bankruptcy, insolvency, reorganization, moratorium or other
laws relating to or affecting enforcement of creditors' rights
generally or by general equity principles.
21
<PAGE>
(vii) The Notes, in the form(s) certified by the
Company as of the date hereof, have been duly authorized for
issuance, offer and sale pursuant to this Agreement and the
Indenture and, assuming they are issued, authenticated and
delivered pursuant to the provisions of this Agreement and the
Indenture against payment of the consideration therefor, will
constitute valid and legally binding obligations of the
Company, enforceable against the Company in accordance with
their terms, except as enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other
laws relating to or affecting enforcement of creditors' rights
generally or by general equity principles; and the Notes will
be entitled to the benefits of the Indenture.
(viii) The Notes and the Indenture conform in all
material respects to the statements relating thereto in the
Prospectus; and the statements in the Prospectus under the
captions "Description of Notes" and "Description of Debt
Securities," insofar as they purport to summarize certain
provisions of documents specifically referred to therein, are
accurate summaries of such provisions in all material
respects.
(ix) The Indenture has been duly qualified under
the 1939 Act.
(x) The Registration Statement has been declared
effective by the SEC under the 1933 Act and, to the best of
such counsel's knowledge, 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 SEC.
(xi) The Registration Statement and the
Prospectus, excluding the documents incorporated by reference
therein, 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 and the Trustee's Statement of Eligibility
on Form T-1 (the "Form T-1"), as to which no opinion need be
rendered) comply as to form in all material respects with the
requirements of the 1933 Act and the 1933 Act Regulations.
(xii) Each document filed pursuant to the 1934 Act
(other than the financial statements and schedules and other
financial or statistical data included or incorporated by
reference therein) and incorporated by reference in the
Prospectus complied when so filed as to form in all material
respects with the 1934 Act and the 1934 Act Regulations.
22
<PAGE>
(xiii) The Notes, in the form(s) certified by the
Company as of the date hereof, when issued, authenticated and
delivered pursuant to the provisions of this Agreement and the
Indenture, will be excluded or exempted from the provisions of
the Commodity Exchange Act.
(xiv) Neither the Company nor any of its
subsidiaries is required to be registered under the 1940 Act.
(xv) No consent, approval, authorization, order or
decree of any court or governmental authority or agency is
required that has not been obtained in connection with the
consummation by the Company of the transactions contemplated
by this Agreement or the Indenture, except such as have been
obtained or rendered, as the case may be, or as may be
required under state securities laws.
(xvi) The information contained in the Prospectus
under the captions "Certain United States Federal Income Tax
Considerations" and "Certain Federal Income Tax
Considerations," to the extent that such information
constitutes matters of law, summaries of legal matters or
legal conclusions, has been reviewed by such counsel and is
correct.
(xvii) 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.
(xviii) 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; the execution,
delivery and performance of this Agreement, the Indenture and
the Notes and the
23
<PAGE>
consummation of the transactions contemplated herein and
therein and compliance by the Company with its obligations
hereunder and thereunder will not (i) constitute an Event of
Default (as defined in the NationsBank Agreement) under the
NationsBank Agreement, or (ii) 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 or, to the best of their knowledge and
information, any 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 of its
subsidiaries, 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.
(xix) The Company has been and is organized in
conformity with the requirements for qualification and
taxation as a REIT under the Code and its method of operation
has at all times enabled, and its proposed method of operation
will enable, the Company to qualify as a REIT under the Code.
(2) Opinion of Counsel to the Agents. The favorable opinion of
Latham & Watkins, counsel to the Agents, covering the matters referred
to in subsection (a)(1) under the subheadings (i), (v) to (xi),
inclusive, above.
(3) Disclosure Documents. In giving their opinions required by
subsection (a)(1) and (a)(2), respectively, of this Section 5, 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 the 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,
if an amendment to the Registration Statement or an Annual Report on
Form 10-K has been filed by the Company with the SEC subsequent to the
effectiveness of the Registration Statement, then at the time such
amendment became effective or at the time of the most recent such
filing, as the case may be) or on the date hereof, contained or
contains an untrue statement of a material fact or omitted or omits to
state a material fact required to be stated therein or
24
<PAGE>
necessary in order to make the statements therein not misleading or
that the Prospectus (except for the 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 (or, if such opinion is being delivered in connection
with the purchase of Notes from the Company by one or more Agents as
principal pursuant to Section 7(c) hereof, at the date of any agreement
by such Agent or Agents to purchase Notes as principal and at the
Settlement Date with respect thereto, as the case may be) 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) Officer's Certificate. On the date hereof, there shall not have
been, since the respective dates as of which information is given in the
Prospectus, any Material Adverse Change, and the Agents shall have received a
certificate of the President or a Vice President of the Company and of the chief
financial officer and chief accounting officer of the Company, dated as of the
date hereof, to the effect that (i) there has been no such Material Adverse
Change, (ii) the representations and warranties of the Company herein contained
are true and correct with the same force and effect as though expressly made at
and as of the date of such certificate, (iii) the Company has complied with all
agreements and satisfied all conditions on its part to be performed or satisfied
at or prior to the date of such certificate, and (iv) no stop order suspending
the effectiveness of the Registration Statement has been issued and no
proceedings for that purpose have been instituted or are pending or, to the best
of such officer's knowledge, are threatened by the Commission.
(d) Comfort Letter of Arthur Andersen LLP. On the date hereof, the
Agents shall have received a letter from Arthur Andersen LLP, dated as of the
date hereof and in form and substance satisfactory to the Agents, 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 and the
Prospectus.
(e) Additional Documents. On the date hereof, counsel to the Agents
shall have been furnished with such documents and opinions as such counsel may
require for the purpose of enabling such counsel to pass upon the issuance and
sale of Notes as herein contemplated and related proceedings, or in order to
evidence the accuracy of any of the representations and 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 Notes as herein
contemplated shall be satisfactory in form and substance to the Agents and to
counsel to the Agents.
25
<PAGE>
If any condition specified in this Section 5 shall not have been
fulfilled when and as required to be fulfilled, this Agreement may be terminated
by the applicable Agent or Agents by notice to the Company at any time and any
such termination shall be without liability of any party to any other party
except as provided in Section 10 hereof and except that Sections 8, 9, 11, 14
and 15 hereof shall survive any such termination and remain in full force and
effect.
6. Delivery of and Payment for Notes Sold through an Agent as Agent.
-----------------------------------------------------------------
Delivery of Notes sold through an Agent as an agent of the Company
shall be made by the Company to such Agent for the account of any purchaser only
against payment therefor in immediately available funds. In the event that a
purchaser shall fail either to accept delivery of or to make payment for a Note
on the date fixed for settlement, such Agent shall promptly notify the Company
and deliver such Note to the Company and, if such Agent has theretofore paid the
Company for such Note, the Company will promptly return such funds to such
Agent. If such failure has occurred for any reason other than default by such
Agent in the performance of its obligations hereunder, the Company will
reimburse such Agent on an equitable basis for its loss of the use of the funds
for the period such funds were credited to the Company's account.
7. Additional Covenants of the Company.
------------------------------------
The Company further covenants and agrees with each Agent as follows:
(a) Reaffirmation of Representations and Warranties. Each acceptance by
the Company of an offer for the purchase of Notes (whether to one or more Agents
as principal or through an Agent as agent), and each delivery of Notes (whether
to one or more Agents as principal or through an Agent as agent), shall be
deemed to be an affirmation that the representations and warranties of the
Company herein contained and contained in any certificate theretofore delivered
to the Agents pursuant hereto are true and correct at the time of such
acceptance or sale, as the case may be, and an undertaking that such
representations and warranties will be true and correct at the time of delivery
to such Agent(s) or to the purchaser or its agent, as the case may be, of the
Notes relating to such acceptance or sale, as the case may be, as though made at
and as of each such time (it being understood that such representations and
warranties shall relate to the Registration Statement and Prospectus as amended
and supplemented to each such time).
(b) Subsequent Delivery of Certificates. Each time that (i) the
Registration Statement or the Prospectus shall be amended or supplemented (other
than by an amendment or supplement providing solely for the determination of the
variable terms of the Notes or relating solely to the offering of securities
other than the Notes), (ii) (if required in connection with the purchase of
Notes from the Company by one or more Agents as
26
<PAGE>
principal) the Company sells Notes to one or more Agents as principal or (iii)
the Company sells Notes in a form not previously certified to the Agents by the
Company, the Company shall furnish or cause to be furnished to the Agent(s),
forthwith a certificate dated the date of filing with the Commission or the date
of effectiveness of such amendment or supplement, as applicable, or the date of
such sale, as the case may be, in form satisfactory to the Agent(s) to the
effect that the statements contained in the certificate referred to in Section
5(c) hereof which were last furnished to the Agents are true and correct at the
time of the filing or effectiveness of such amendment or supplement, as
applicable, or the time of such sale, as the case may be, as though made at and
as of such time (except that such statements shall be deemed to relate to the
Registration Statement and the Prospectus as amended and supplemented to such
time) or, in lieu of such certificate, a certificate of the same tenor as the
certificate referred to in Section 5(c) hereof, modified as necessary to relate
to the Registration Statement and the Prospectus as amended and supplemented to
the time of delivery of such certificate (it being understood that, in the case
of clause (ii) above, any such certificate shall also include a certification
that there has been no Material Adverse Change since the date of the agreement
by such Agent(s) to purchase Notes from the Company as principal).
(c) Subsequent Delivery of Legal Opinions. Each time that (i) the
Registration Statement or the Prospectus shall be amended or supplemented (other
than by an amendment or supplement providing solely for the determination of the
variable terms of the Notes or relating solely to the offering of securities
other than the Notes), (ii) (if required in connection with the purchase of
Notes from the Company by one or more Agents as principal) the Company sells
Notes to one or more Agents as principal or (iii) the Company sells Notes in a
form not previously certified to the Agents by the Company, the Company shall
furnish or cause to be furnished forthwith to the Agent(s) and to counsel to the
Agents the written opinion of Kutak Rock, counsel to the Company, or other
counsel satisfactory to the Agent(s), dated the date of filing with the
Commission or the date of effectiveness of such amendment or supplement, as
applicable, or the date of such sale, as the case may be, in form and substance
satisfactory to the Agent(s), of the same tenor as the opinion referred to in
Section 5(b)(1) hereof, but modified, as necessary, to relate to the
Registration Statement and the Prospectus as amended and supplemented to the
time of delivery of such opinion or, in lieu of such opinion, counsel last
furnishing such opinion to the Agents shall furnish the Agent(s) with a letter
substantially to the effect that the Agent(s) may rely on such last opinion to
the same extent as though it was dated the date of such letter authorizing
reliance (except that statements in such last opinion shall be deemed to relate
to the Registration Statement and the Prospectus as amended and supplemented to
the time of delivery of such letter authorizing reliance).
(d) Subsequent Delivery of Comfort Letters. Each time that (i) the
Registration Statement or the Prospectus shall be amended or supplemented to
include additional financial information (other than by an amendment or
supplement relating solely to the issuance and/or offering of securities other
than the Notes) or (ii) (if required in connection with the purchase
27
<PAGE>
of Notes from the Company by one or more Agents as principal) the Company sells
Notes to one or more Agents as principal, the Company shall cause Arthur
Andersen & Co. forthwith to furnish to the Agent(s) a letter, dated the date of
filing with the Commission or the date of effectiveness of such amendment or
supplement, as applicable, or the date of such sale, as the case may be, in form
satisfactory to the Agent(s), of the same tenor as the letter referred to in
Section 5(d) hereof but modified to relate to the Registration Statement and
Prospectus as amended and supplemented to the date of such letter.
8. Indemnification.
----------------
(a) Indemnification of the Agents. The Company agrees to indemnify and
hold harmless each Agent and each person, if any, who controls such Agent within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act as
follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of an untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), 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 an untrue statement or alleged untrue statement of a
material fact included in any preliminary prospectus or 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 any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission, provided
that (subject to Section 8(d) hereof) any such settlement is effected
with the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by such Agent),
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 subparagraph (i) or (ii) above;
28
<PAGE>
provided, however, that this indemnity does not apply to any loss, liability,
claim, damage or expense to the extent arising out of an 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 Agents
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) Indemnification of Company, Directors and Officers. Each Agent
severally 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 Section 8(a) hereof, 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 any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto) in reliance upon and in conformity with written
information furnished to the Company by the Agents expressly for use in the
Registration Statement (or any amendment thereto) or such preliminary prospectus
or the Prospectus (or any amendment or supplement thereto).
(c) Actions Against Parties; Notification. 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 hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 8(a) hereof,
counsel to the indemnified parties shall be selected by the applicable Agent(s)
and, in the case of parties indemnified pursuant to Section 8(b) hereof, counsel
to the indemnified party shall be selected by the Company. 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) also 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 8 or 9 hereof (whether or not the indemnified
29
<PAGE>
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) Settlement without Consent if Failure to Reimburse. 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 8(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.
9. Contribution.
-------------
If the indemnification provided for in Section 8 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
applicable Agent(s), on the other hand, from the offering of the Notes that were
the subject of the claim for indemnification 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 the
applicable Agent(s), on the other hand, in connection with the statements or
omissions which resulted in such losses, liabilities, claims, damages or
expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company, on the one
hand, and the applicable Agent(s), on the other hand, in connection with the
offering of the Notes that were the subject of the claim for indemnification
shall be deemed to be in the same respective proportions as the total net
proceeds from the offering of such Notes (before deducting expenses) received by
the Company and the total discount or commission received by each applicable
Agent, as the case may be, bears to the aggregate initial offering price of such
Notes.
The relative fault of the Company, on the one hand, and the
applicable Agent(s), on the other hand, shall be determined by reference to,
among other things, whether any untrue or alleged untrue statement of a material
fact or omission or alleged omission to state a material fact relates to
information supplied by the Company or by the
30
<PAGE>
applicable Agent(s) and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and the Agents agree that it would not be just and
equitable if contribution pursuant to this Section 9 were determined by pro rata
allocation (even if the applicable Agent(s) were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 9. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 9 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 applicable untrue or alleged
untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 9, (i) no Agent
shall be required to contribute any amount in excess of the amount by which the
total discount or commission received by such Agent in connection with the
offering of the Notes that were the subject of the claim for indemnification
exceeds the amount of any damages which such Agent has otherwise been required
to pay by reason of any applicable untrue or alleged untrue statement or
omission or alleged omission and (ii) 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. In addition, in connection with an offering of Notes
purchased from the Company by two or more Agents as principal, the respective
obligations of such Agents to contribute pursuant to this Section 9 are several,
and not joint, in proportion to the aggregate principal amount of Notes that
each such Agent has agreed to purchase from the Company.
For purposes of this Section 9, each person, if any, who
controls an Agent 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 Agent, and
each director of the Company, each officer of the Company 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.
10. Payment of Expenses.
--------------------
The Company will pay all expenses incident to the performance of its
obligations under this Agreement, including:
31
<PAGE>
(a) The preparation, filing, printing and delivery of the Registration
Statement as originally filed and all amendments thereto and any preliminary
prospectus, the Prospectus and any amendments or supplements thereto;
(b) The preparation, printing and delivery of this Agreement and the
Indenture;
(c) The preparation, issuance and delivery of the Notes, including any
fees and expenses relating to the eligibility and issuance of Notes in
book-entry form and the cost of obtaining CUSIP or other identification numbers
for the Notes;
(d) The fees and disbursements of the Company's accountants, counsel
and other advisors or agents (including any calculation agent or exchange rate
agent) and of the Trustee and its counsel;
(e) The reasonable fees and disbursements of counsel to the Agents
incurred in connection with the establishment of the Program and incurred from
time to time in connection with the transactions contemplated hereby;
(f) The fees charged by nationally recognized statistical rating
organizations for the rating of the Program and the Notes;
(g) The fees and expenses incurred in connection with any listing of
Notes on a securities exchange;
(h) The filing fees incident to, and the reasonable fees and
disbursements of counsel to the Agents in connection with, the review, if any,
by the National Association of Securities Dealers, Inc. (the "NASD"); and
(i) Any advertising and other out-of-pocket expenses of the Agents
incurred with the approval of the Company.
32
<PAGE>
11. Representations, Warranties and Agreements to Survive Delivery.
---------------------------------------------------------------
All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company or any of its
subsidiaries submitted pursuant hereto or thereto shall remain operative and in
full force and effect, regardless of any investigation made by or on behalf of
the Agents or any controlling person of an Agent, or by or on behalf of the
Company, and shall survive each delivery of and payment for the Notes.
12. Termination.
------------
(a) Termination of this Agreement. This Agreement (excluding any
agreement by one or more Agents to purchase Notes from the Company as principal)
may be terminated for any reason, at any time by either the Company or an Agent,
as to itself, upon the giving of 30 days' prior written notice of such
termination to the other party hereto.
(b) Termination of Agreement to Purchase Notes as Principal. The
applicable Agent(s) may terminate any agreement by such Agent(s) to purchase
Notes from the Company as principal, immediately upon notice to the Company, at
any time prior to the Settlement Date relating thereto, if (i) there has been,
since the date of such agreement or since the respective dates as of which
information is given in the Prospectus, any Material Adverse Change, or (ii)
there has occurred any material adverse change in the financial markets in the
United States or, if such Notes are denominated and/or payable in, or indexed
to, one or more foreign or composite currencies, in the international financial
markets, or any outbreak of hostilities or escalation thereof or other calamity
or crisis or any change or development or event 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 such
Agent(s), impracticable to market such Notes or enforce contracts for the sale
of such Notes, or (iii) trading in any securities of the Company has been
suspended or limited by the Commission or a national securities exchange, or if
trading generally on the New York Stock Exchange or the American Stock Exchange
or in the Nasdaq National 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 either of said exchanges or by such system or by order of the
Commission, the NASD or any other governmental authority, or (iv) a banking
moratorium has been declared by either Federal or New York authorities or by the
relevant authorities in the country or countries of origin of any foreign or
composite currency in which such Notes are denominated and/or payable, or (v)
the rating assigned by any nationally recognized statistical rating organization
to the Program or any debt securities (including the Notes) of the Company as of
the date of such agreement shall have been lowered or withdrawn since that date
or if any such rating organization shall have publicly announced that it has
under surveillance or review its rating of the Program or any such debt
securities, or (vi) there shall have come to the attention of such Agent(s) any
facts that would cause such Agent(s) to believe that the Prospectus, at the time
it was required to
33
<PAGE>
be delivered to a purchaser of such Notes, included an untrue statement of a
material fact or omitted to state a material fact necessary in order to make the
statements therein, in the light of the circumstances existing at the time of
such delivery, not misleading.
(c) General. In the event of any such termination, neither party will
have any liability to the other party hereto, except that (i) the Agents shall
be entitled to any commissions earned in accordance with the third paragraph of
Section 3(b) hereof, (ii) if at the time of termination (a) any Agent shall own
any Notes purchased by it from the Company as principal or (b) an offer to
purchase any of the Notes has been accepted by the Company but the time of
delivery to the purchaser or his agent of such Notes relating thereto has not
occurred, the covenants set forth in Sections 4 and 7 hereof shall remain in
effect until such Notes are so resold or delivered, as the case may be, and
(iii) the covenant set forth in Section 4(i) hereof, the provisions of Section
10 hereof, the indemnity and contribution agreements set forth in Sections 8 and
9 hereof, and the provisions of Sections 11, 14 and 15 hereof shall remain in
effect.
13. Notices.
--------
Unless otherwise provided herein, all notices required under the terms
and provisions hereof shall be in writing, either delivered by hand, by mail or
by telex, telecopier or telegram, and any such notice shall be effective when
received at the address specified below.
34
<PAGE>
If to the Company:
Franchise Finance Corporation of America
17207 North Perimeter Drive
Scottsdale, Arizona 85255
Attention: Morton H. Fleischer
With a copy to: Dennis Ruben, Esq.
Telecopy No.: (602) 585-2225
If to the Agents:
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
World Financial Center
North Tower - 10th Floor
New York, New York 10281-1310
Attention: MTN Product Management
Telecopy No.: (212) 449-2234
Donaldson, Lufkin & Jenrette Securities Corporation
277 Park Avenue
New York, New York 10172
Attention:
Telecopy No.: (212) 892-8244
NationsBanc Montgomery Securities LLC
100 North Tryon Street
Charlotte, North Carolina 28255
Attention: MTN Product Management
Telecopy No.: (704) 388-9939
Salomon Brothers Inc
7 World Trade Center
42nd Floor
New York, New York 10048
Attention: MTN Product Manager
Telecopy No.: (212) 783-2318
UBS Securities LLC
299 Park Avenue
New York, New York 10171
35
<PAGE>
Attention: Richard Messina
Telecopy No.: (212) 821-3667
or at such other address as such party may designate from time to time by notice
duly given in accordance with the terms of this Section 13.
14. Parties.
--------
This Agreement shall inure to the benefit of and be binding upon the
Agents 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 parties hereto and their respective
successors and the controlling persons, officers and directors referred to in
Sections 8 and 9 hereof 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 contained. This Agreement and all conditions and provisions
hereof are intended to be for the sole and exclusive benefit of the parties
hereto and their respective successors, and said controlling persons, officers
and directors and their heirs and legal representatives, and for the benefit of
no other person, firm or corporation. No purchaser of Notes shall be deemed to
be a successor by reason merely of such purchase.
15. GOVERNING LAW; FORUM.
---------------------
THIS AGREEMENT AND ALL THE RIGHTS AND OBLIGATIONS OF THE PARTIES SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES. ANY SUIT, ACTION OR
PROCEEDING BROUGHT BY THE COMPANY AGAINST ANY AGENT IN CONNECTION WITH OR
ARISING UNDER THIS AGREEMENT SHALL BE BROUGHT SOLELY IN THE STATE OR FEDERAL
COURT OF APPROPRIATE JURISDICTION LOCATED IN THE BOROUGH OF MANHATTAN, THE CITY
OF NEW YORK.
16. Effect of Headings.
-------------------
The Article and Section headings herein are for convenience only and
shall not affect the construction hereof.
17. Counterparts.
-------------
This Agreement may be executed in one or more counterparts and, if
executed in more than one counterpart, the executed counterparts hereof shall
constitute a single instrument.
36
<PAGE>
If the foregoing is in accordance with the Agents' understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this Distribution Agreement, along with all counterparts, will become a binding
agreement among the Agents and the Company in accordance with its terms.
Very truly yours,
FRANCHISE FINANCE CORPORATION
OF AMERICA
By: /s/ Morton H. Fleischer
------------------------------
Name: Morton H. Fleischer
Title: President and Chief
Executive Officer
CONFIRMED AND ACCEPTED, as of the date
first above written:
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: /s/ Richard N. Doyle
---------------------------------
Name: Richard N. Doyle
Title: Authorized Signatory
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION
By: /s/ Stewart L. Whitman, II
---------------------------------
Name: Stewart L. Whitman, II
Title: Managing Director
SALOMON BROTHERS INC
By: /s/ Paul Sheldon
---------------------------------
Name: Paul Sheldon
Title: Managing Director
NATIONSBANC MONTGOMERY SECURITIES LLC
By: /s/ Lynn T. McConnell
---------------------------------
Name: Lynn T. McConnell
Title: Managing Director
UBS SECURITIES LLC
By: /s/ Richard Messina
---------------------------------
Name: Richard Messina
Title: Director
S-1
<PAGE>
SCHEDULE A
As compensation for the services of the Agents hereunder, the Company shall
pay the applicable Agent, on a discount basis, a commission for the sale of each
Note equal to the principal amount of such Note multiplied by the appropriate
percentage set forth below:
PERCENT OF
MATURITY RANGES PRINCIPAL AMOUNT
- --------------- ----------------
From 9 months to less than 1 year ............................ .125%
From 1 year to less than 18 months ........................... .150
From 18 months to less than 2 years .......................... .200
From 2 years to less than 3 years ............................ .250
From 3 years to less than 4 years ............................ .350
From 4 years to less than 5 years ............................ .450
From 5 years to less than 6 years ............................ .500
From 6 years to less than 7 years ............................ .550
From 7 years to less than 10 years ........................... .600
From 10 years to less than 15 years .......................... .625
From 15 years to less than 20 years .......................... .700
From 20 years to 30 years .................................... .750
Greater than 30 years ........................................ (1)
- -------------------
(1) As agreed to by the Company and the applicable Agent at the time of
sale.
Sch A
<PAGE>
EXHIBIT A
PRICING TERMS
Principal Amount: $_______
(or principal amount of foreign or composite currency)
Interest Rate or Formula:
If Fixed Rate Note,
Interest Rate:
Interest Payment Dates:
If Floating Rate Note,
Interest Rate Basis(es):
If LIBOR,
|_| LIBOR Reuters Page:
|_| LIBOR Telerate Page:
Designated LIBOR Currency:
If CMT Rate,
Designated CMT Telerate Page:
If Telerate Page 7052:
|_| Weekly Average
|_| Monthly Average
Designated CMT Maturity Index:
Index Maturity:
Spread and/or Spread Multiplier, if any:
Initial Interest Rate, if any:
Initial Interest Reset Date:
Interest Reset Dates:
Interest Payment Dates:
Maximum Interest Rate, if any:
Minimum Interest Rate, if any:
Fixed Rate Commencement Date, if any:
Fixed Interest Rate, if any:
Day Count Convention:
Calculation Agent:
Redemption Provisions:
Initial Redemption Date:
Initial Redemption Percentage:
Annual Redemption Percentage Reduction, if any:
Repayment Provisions:
Optional Repayment Date(s):
Original Issue Date:
Stated Maturity Date:
Specified Currency:
Exchange Rate Agent:
Authorized Denomination:
A-1
<PAGE>
Purchase Price: ___%, plus accrued interest, if any, from ___________
Price to Public: ___%, plus accrued interest, if any, from __________
Issue Price:
Settlement Date and Time:
Additional/Other Terms:
Also, in connection with the purchase of Notes from the Company by one or more
Agents as principal, agreement as to whether the following will be required:
Officers' Certificate pursuant to Section 7(b) of the
Distribution Agreement. Legal Opinion pursuant to Section 7(c)
of the Distribution Agreement. Comfort Letter pursuant to
Section 7(d) of the Distribution Agreement.
A-2
<PAGE>
EXHIBIT B
Franchise Finance Corporation of America
Medium-Term Notes
due Nine Months or More From Date of Issue
[Date]
[Name and Address of Agent]
Dear [ ]:
Franchise Finance Corporation of America, a Delaware
corporation (the "Company"), has previously entered into a Distribution
Agreement dated as of April __, 1998 (the "Distribution Agreement"), between the
Company and [list named agents] (the "Existing Agents"), with respect to the
issue and sale by the Company of its Medium-Term Notes due Nine Months or More
From Date of Issue (the "Notes") pursuant to an Indenture dated as of November
21, 1995, as amended or modified from time to time, between the Company and
Norwest Bank Arizona, National Association, as Trustee. A copy of the
Distribution Agreement, including the Administrative Procedures with respect to
the issuance of the Notes (the "Procedures"), is attached hereto.
Subject to and in accordance with the terms of the
Distribution Agreement and the Procedures, the Company hereby appoints you as an
Agent under the Distribution Agreement [in connection with the purchase of the
Notes described in the accompanying Pricing Supplement No. __, dated ________
__, 199_, but only for this one reverse inquiry transaction]. Your appointment
is made subject to the terms and conditions applicable to Agents under the
Distribution Agreement [and terminates upon payment for the Notes or other
termination of this transaction].
Subject to the provisions hereof, this Agreement incorporates
by reference all of the terms and provisions of the Distribution Agreement,
including all schedules and exhibits thereto.
Except as otherwise expressly provided herein, all terms used
herein which are defined in the Distribution Agreement shall have the same
meanings as in the Distribution Agreement, except that the terms "Agent",
"Agents" and "you", as used in the Distribution Agreement, shall be deemed to
refer, where applicable and for purposes of this Agreement, to the Existing
Agents and you.
B-1
<PAGE>
You and we each agree to perform our respective duties and
obligations specifically provided to be performed by each of us in accordance
with the terms and provisions of the Distribution Agreement and the Procedures.
This Agreement shall be governed by the laws of the State of
New York. This Agreement may be executed in one or more counterparts and the
executed counterparts taken together shall constitute one and the same
agreement.
If the foregoing correctly sets forth our agreement, please
indicate your acceptance hereof in the space provided for that purpose below.
This action will confirm your appointment and your acceptance and agreement to
act as Agent in connection with the issue and sale of the Notes under the terms
and conditions of the Distribution Agreement.
Very truly yours,
Franchise Finance Corporation of America
By:
-----------------------------------
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written
[Agent]
By:
------------------------------
Name:
Title:
B-2
[FACE OF NOTE]
If the Holder of this Note (as indicated below) is The Depository Trust
Company ("DTC") or a nominee of DTC, this Note is a global note and the
following two legends apply:
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY (THE "DEPOSITARY") (55 WATER
STREET, NEW YORK, NEW YORK) TO THE ISSUER HEREOF OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER
NAME AS REQUIRED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITARY AND ANY PAYMENT IS MADE TO CEDE & CO., ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE &
CO., HAS AN INTEREST HEREIN.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES
IN CERTIFICATED FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT
AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR
BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER
NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH
NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH
SUCCESSOR DEPOSITARY.
[IF THIS SECURITY IS AN ORIGINAL ISSUE DISCOUNT SECURITY, INSERT-FOR
PURPOSES OF SECTIONS 1273 AND 1275 OF THE UNITED STATES INTERNAL REVENUE CODE,
THE AMOUNT OF ORIGINAL ISSUE DISCOUNT ON THIS SECURITY IS ______% OF ITS
PRINCIPAL AMOUNT, THE ISSUE DATE IS _________________, 19___ [AND] THE YIELD TO
MATURITY IS _____%. [THE METHOD USED TO DETERMINE THE AMOUNT OF ORIGINAL ISSUE
DISCOUNT APPLICABLE TO THE SHORT ACCRUAL PERIOD OF _______________, 19___ TO
_____________, 19___, IS ______% OF THE PRINCIPAL AMOUNT OF THIS SECURITY.]]
<PAGE>
REGISTERED PRINCIPAL AMOUNT: $__________
No. FXR-__________
CUSIP No.:__________
FRANCHISE FINANCE CORPORATION OF AMERICA
MEDIUM-TERM NOTE
(Fixed Rate)
<TABLE>
<S> <C> <C>
ORIGINAL ISSUE DATE: INTEREST RATE: STATED MATURITY DATE:
INTEREST PAYMENT DATE(S): DEFAULT RATE:____%
[ ] __________ and __________
[ ] Other:
INITIAL REDEMPTION DATE: INITIAL REDEMPTION ANNUAL REDEMPTION
PERCENTAGE: ____% PERCENTAGE REDUCTION: ____%
OPTIONAL [ ] CHECK IF AN
REPAYMENT DATE(S): ORIGINAL ISSUE
DISCOUNT NOTE
Issue Price: ____%
SPECIFIED CURRENCY: AUTHORIZED
[X] United States dollars DENOMINATION:
[ ] $1,000 and integral
multiples thereof
[ ] Other:
ADDENDUM ATTACHED OTHER/ADDITIONAL
[ ] Yes PROVISIONS:
[ ] No
</TABLE>
2
<PAGE>
Franchise Finance Corporation of America, a Delaware corporation (the
"Company," which terms include any successor under the Indenture hereinafter
referred to), for value received, hereby promises to pay to _________, or
registered assigns, the principal sum of __________ Dollars, on the Stated
Maturity Date specified above (or any Redemption Date or Repayment Date, each as
defined on the reverse hereof) (each such Stated Maturity Date, Redemption Date
or Repayment Date being hereinafter referred to as the "Maturity" with respect
to the principal repayable on such date) and to pay interest thereon, at the
Interest Rate per annum specified above, until the principal hereof is paid or
duly made available for payment, and (to the extent that the payment of such
interest shall be legally enforceable) at the Default Rate per annum specified
above on any overdue principal, premium and/or interest. The Company will pay
interest in arrears on each Interest Payment Date, if any, specified above
(each, an "Interest Payment Date"), commencing with the first Interest Payment
Date next succeeding the Original Issue Date specified above, and at Maturity;
provided, however, that if the Original Issue Date occurs between a Regular
Record Date (as defined below) and the next succeeding Interest Payment Date,
interest payments will commence on the second Interest Payment Date next
succeeding the Original Issue Date to the Holder of this Note on the Regular
Record Date with respect to such second Interest Payment Date. Interest on this
Note will be computed on the basis of a 360-day year consisting of twelve 30-day
months.
Interest on this Note will accrue from, and including, the immediately
preceding Interest Payment Date to which interest has been paid or duly provided
for (or from, and including, the Original Issue Date if no interest has been
paid or duly provided for) to, but excluding, the applicable Interest Payment
Date or the date of Maturity, as the case may be (each, an "Interest Period").
The interest so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, subject to certain exceptions described herein, be
paid to the person in whose name this Note (or one or more predecessor Notes) is
registered at the close of business on the fifteenth calendar day (whether or
not a Business Day, as defined below) immediately preceding such Interest
Payment Date (the "Regular Record Date"); provided, however, that interest
payable at Maturity will be payable to the person to whom the principal hereof
and premium, if any, hereon shall be payable. Any such interest not so
punctually paid or duly provided for ("Defaulted Interest") will forthwith cease
to be payable to the Holder on any Regular Record Date, and shall be paid to the
person in whose name this Note is registered at the close of business on a
special record date (the "Special Record Date") for the payment of such
Defaulted Interest to be fixed by the Trustee hereinafter referred to, notice
whereof shall be given to the Holder of this Note by the Trustee not less than
10 calendar days prior to such Special Record Date or may be paid at any time in
any other lawful manner not inconsistent with the requirements of any securities
exchange on which this Note may be listed, and upon such notice as may be
required by such exchange, all as more fully provided for in the Indenture.
Payments of principal of, premium, if any, and interest, if any, on
Notes issued in fully registered book-entry form will be made by the Company
through the Trustee (as defined on the reverse hereof) to the Depository Trust
Company. In the case of certificated Notes, payment of principal, premium, if
any, and interest, if any, in respect of this Note due at Maturity will be made
in immediately available funds upon presentation and surrender of this Note
(and, with
3
<PAGE>
respect to any applicable repayment of this Note, a duly completed election form
contemplated on the reverse hereof) at the office or agency of the Company
maintained for that purpose in the Borough of Manhattan, The City of New York,
located at Norwest Trust Company New York, 3 New York Plaza, l5th Floor, New
York, New York 10004, or at such other paying agency in the Borough of
Manhattan, The City of New York, as the Company may determine. Payment of
interest due on certificated Notes on any Interest Payment Date other than at
maturity will be made at the office or agency referred to above maintained by
the Company for such purpose or, at the option of the Company, may be made by
check mailed to the address of the person entitled thereto as such address shall
appear in the Security Register; provided, however, that a Holder of U.S.
$10,000,000 or more in initial aggregate principal amount of Notes (whether
having identical or different terms and provisions) will be entitled to receive
interest payments on such Interest Payment Date other than at Maturity by wire
transfer of immediately available funds if appropriate wire transfer
instructions have been received in writing by the Trustee not less than 15
calendar days prior to such Interest Payment Date. Any such wire transfer
instructions received by the Trustee shall remain in effect until revoked by
such Holder.
If any Interest Payment Date or Stated Maturity Date falls on a day
that is not a Business Day, the required payment of principal, premium, if any,
and/or interest shall be made on the next succeeding Business Day with the same
force and effect as if made on the date such payment was due, and no interest
shall accrue with respect to such payment for the period from and after such
Interest Payment Date or Stated Maturity Date, as the case may be, to the date
of such payment on the next succeeding Business Day.
As used herein, "Business Day" means any day, other than a Saturday or
Sunday, that is neither a legal holiday nor a day on which banking institutions
are authorized or required by law or executive Order to close in The City of New
York.
The Company is obligated to make payment of principal, premium, if any,
and interest in respect of this Note in United States dollars.
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof and, if so specified above, in the Addendum hereto,
which further provisions shall have the same force and effect as if set forth on
the face hereof.
Notwithstanding the foregoing, if an Addendum is attached hereto or
"Other/Additional Provisions" apply to this Note as specified above, this Note
shall be subject to the terms set forth in such Addendum or such
"Other/Additional Provisions."
Unless the Certificate of Authentication hereon has been executed by
the Trustee by manual signature of one of its authorized signatories, this Note
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, Franchise Finance Corporation of America has caused
this Note to be duly executed.
4
<PAGE>
FRANCHISE FINANCE CORPORATION OF AMERICA
By
-------------------------------------
John Barravecchia, Executive Vice
President, Chief Financial Officer,
Treasurer and Assistant Secretary
Dated:
------------------------
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This Note is one of the Securities of the series designated as "Medium-
Term Notes Due Nine Months or More From Date of Issue," pursuant to the
within-mentioned Indenture.
NORWEST BANK ARIZONA
NATIONAL ASSOCIATION, as Trustee
By
----------------------------
Authorized Signatory
5
<PAGE>
[REVERSE OF NOTE]
FRANCHISE FINANCE CORPORATION OF AMERICA
MEDIUM-TERM NOTE
(Fixed Rate)
This Note is one of a duly authorized series of Securities (the
"Securities") of the Company issued and to be issued under an Indenture, dated
as of November 21, 1995, as amended, modified or supplemented from time to time
(the "Indenture"), between the Company and Norwest Bank Arizona, National
Association, as Trustee (the "Trustee," which term includes any successor
trustee under the Indenture), to which Indenture and all indentures supplemental
thereto reference is hereby made for a statement of the respective rights,
limitations of rights, duties and immunities thereunder of the Company, the
Trustee and the Holders of the Securities, and of the terms upon which the
Securities are, and are to be, authenticated and delivered. This Note is one of
the series of Securities to be designated as "Medium-Term Notes Due Nine Months
or More From Date of Issue" (the "Notes"). All terms used but not defined in
this Note specified on the face hereof or in an Addendum hereto shall have the
meanings assigned to such terms in the Indenture.
This Note is issuable only in registered form without coupons in
minimum denominations of U.S. $1,000 and integral multiples thereof or the
minimum Authorized Denomination specified on the face hereof.
This Note will not be subject to any sinking fund and, unless otherwise
provided on the face hereof in accordance with the provisions of the following
two paragraphs, will not be redeemable or repayable prior to its Stated Maturity
Date.
This Note will be subject to redemption at the option of the Company on
any date on or after the Initial Redemption Date, if any, specified on the face
hereof, in whole or from time to time in part in increments of U.S. $1,000 or
the minimum Authorized Denomination (provided that any remaining principal
amount hereof shall be at least U.S. $1,000 or such minimum Authorized
Denomination), at the Redemption Price (as deemed below), together with unpaid
interest accrued thereon to the date fixed for redemption (each, a "Redemption
Date"), on notice given no more than 60 nor less than 30 calendar days prior to
the Redemption Date and in accordance with the provisions of the Indenture. The
"Redemption Price" shall initially be the Initial Redemption Percentage
specified on the face hereof multiplied by the unpaid principal amount of this
Note to be redeemed. The Initial Redemption Percentage shall decline at each
anniversary of the Initial Redemption Date by the Annual Redemption Percentage
Reduction, if any, specified on the face hereof until the Redemption Price is
$1,000 of unpaid principal amount to be redeemed. In the event of redemption of
this Note in part only, a new Note of like tenor for the unredeemed portion
hereof and otherwise having the same terms as this Note shall be issued in the
name of the Holder hereof upon the presentation and surrender hereof.
6
<PAGE>
This Note will be subject to repayment by the Company at the option of
the Holder hereof on the Optional Repayment Date(s), if any, specified on the
face hereof, in whole or in part in increments of U.S. $1,000 or the minimum
Authorized Denomination (provided that any remaining principal amount hereof
shall be at least U.S. $1,000 or such minimum Authorized Denomination), at a
repayment price equal to 100% of the unpaid principal amount to be repaid,
together with unpaid interest accrued thereon to the date fixed for repayment
(each, a "Repayment Date"). For this Note to be repaid, this Note must be
received, together with the form herein titled "Option to Elect Repayment" duly
completed, by the Trustee at its corporate trust office not more than 60 nor
less than 30 calendar days prior to the Repayment Date. Exercise of such
repayment option by the Holder hereof will be irrevocable, in the event of
repayment of this Note in part only, a new Note of like tenor for the unrepaid
portion hereof and otherwise having the same terms as this Note shall be issued
in the name of the Holder hereof upon the presentation and surrender hereof.
If this Note is an Original Issue Discount Note as specified on the
face hereof, the amount payable to the Holder of this Note in the event of
redemption, repayment or acceleration of the Stated Maturity Date will be equal
to the sum of (a) the Issue Price specified on the face hereof (increased by any
accruals of the Discount, as defined below) and, in the event of any redemption
of this Note (if applicable), multiplied by the Initial Redemption Percentage
(as adjusted by the Annual Redemption Percentage Reduction, if applicable) and
(b) any unpaid interest on this Note accrued from the Original Issue Date to the
Redemption Date, Repayment Date or accelerated Stated Maturity Date, as the case
may be. The difference between the Issue Price and 100% of the principal amount
of this Note is referred to herein as the "Discount."
For purposes of determining the amount of Discount that has accrued as
of any Redemption Date, Repayment Date or accelerated Stated Maturity Date of
this Note, such Discount will be accrued so as to cause the yield on the Note to
be constant. The constant yield will be calculated using a 30-day month, 360-day
year convention, a compounding period that, except for the Initial Period (as
defined below), corresponds to the shortest period between interest Payment
Dates (with ratable accruals within a compounding period) and an assumption that
the Maturity of this Note will not be accelerated. If the period from the
Original Issue Date to the initial Interest Payment Date (the "Initial Period")
is shorter than the compounding period for this Note, a proportionate amount of
the yield for an entire compounding period will be accrued. If the Initial
Period is longer than the compounding period, then such period will be divided
into a regular compounding period and a short period, with the short period
being treated as provided in the preceding sentence.
If an Event of Default, as defined in the Indenture, shall occur and be
continuing, the principal of the Notes may be declared due and payable in the
manner and with the effect provided in the Indenture.
The Indenture contains provisions for defeasance of (a) the entire
indebtedness of the Notes or (b) certain covenants and Events of Default with
respect to the Notes, in each case upon compliance with certain conditions set
forth therein, which provisions apply in this Note.
7
<PAGE>
In addition to the covenants of the Company contained in the Indenture,
the following covenants will apply to the Notes:
Limitation on Incurrence of Total Debt. The Company will not, and will
not permit any Subsidiary (as defined below) to, incur any Debt (as defined
below) if, immediately after giving effect to the incurrence of such additional
Debt and the application of the proceeds therefrom, the aggregate principal
amount of all outstanding Debt of the Company and its Subsidiaries on a
consolidated basis determined in accordance with generally accepted accounting
principles is greater than 60% of the sum of (a) the Company's Total Assets (as
defined below) as of the end of the calendar quarter prior to the incurrence of
such additional Debt and (b) the increase in Total Assets from the end of such
quarter including, without limitation, any increase in Total Assets caused by
the incurrence of such additional Debt.
Limitation on Incurrence of Secured Debt. In addition to the foregoing
limitation on the incurrence of Debt, the Company will not, and will not permit
any Subsidiary to, incur any Debt secured by any mortgage, lien, charge, pledge,
encumbrance or security interest of any kind on any of its properties, and will
not otherwise grant or convey any such mortgage, charge, pledge, encumbrance or
security interest of any kind, if immediately after giving effect thereto, the
aggregate principal amount of all outstanding Debt of the Company and its
Subsidiaries on a consolidated basis determined in accordance with generally
accepted accounting principles which is secured by any mortgage, charge, pledge,
encumbrance or security interest of any kind on property of the Company or any
Subsidiary is greater than 40% of the sum of (a) the Company's Total Assets as
of the end of the calendar quarter prior to the incurrence of such Debt, and (b)
any increase in Total Assets from the end of such quarter including, without
limitation, any increase in Total Assets caused by the incurrence of such
additional Debt.
Debt Service Coverage. In addition to the foregoing limitations on the
incurrence of Debt, the Company will not, and will not permit any Subsidiary to,
incur any Debt if the ratio of Consolidated Income Available for Debt Service
(as defined below) to Annual Service Charge (as defined below) for the four
consecutive calendar quarters most recently ended prior to the date on which
such additional Debt is to be incurred is less than 1.5 to 1.0 on a pro forma
basis after giving effect to the incurrence of such Debt and the application of
the proceeds therefrom.
Maintenance of Total Unencumbered Assets. The Company will maintain at
all times Total Unencumbered Assets (as defined below) of not less than 150% of
the aggregate outstanding principal amount of all outstanding unsecured Debt of
the Company and its Subsidiaries.
As used herein:
"Annual Service Charge" means the interest expense of the Company and
its Subsidiaries for the four consecutive fiscal quarters most recently ended,
including, without limitation, commissions, discounts and other fees and charges
incurred in respect of letter of credit or bankers' acceptance financings, net
costs pursuant to hedging obligations, the interest component
8
<PAGE>
of all payments associated with Capitalized Leases, amortization of debt
issuance costs, amortization of original issue discount, non-cash interest
payments and the interest component of any deferred payment obligations.
"Capitalized Lease" means any lease of property by the Company or any
Subsidiary as lessee that is reflected on the Company's consolidated balance
sheet as a capitalized lease in accordance with generally accepted accounting
principles.
"Consolidated Income Available for Debt Service" for any period means
Consolidated Net Income (as defined below) of the Company and its Subsidiaries
plus amounts which have been deducted, and minus amounts which have been added,
for (a) interest on Debt of the Company and its Subsidiaries, (b) provision for
taxes of the Company and its Subsidiaries based on income, (c) amortization of
debt discount, (d) provisions for gains and losses on properties, (e)
depreciation, (f) the effect of any non-cash charge resulting from a change in
accounting principles in determining Consolidated Net Income for such period and
(g) amortization of deferred charges.
"Consolidated Net Income" for any period means the amount of
consolidated net income (or loss) of the Company and its Subsidiaries for such
period determined on a consolidated basis in accordance with generally accepted
accounting principles.
"Debt" mean any indebtedness of the Company or any Subsidiary, whether
or not contingent, in respect of (i) borrowed money or evidenced by bonds,
notes, debentures or similar instruments, (ii) indebtedness secured by any
mortgage, pledge, lien, charge, encumbrance or any security interest existing on
property owned by the Company or any Subsidiary, (iii) letters of credit or
amounts representing the balance deferred and unpaid of the purchase price of
any property except any such balance that constitutes an accrued expense or
trade payable or (iv) Capitalized Leases, in the case of items of indebtedness
under (i) through (iii) above to the extent that any such items (other than
letters of credit) would appear as liabilities on the Company's consolidated
balance sheet in accordance with generally accepted accounting principles, and
also includes, to the extent not otherwise included, any obligation by the
Company or any Subsidiary to be liable for, or to pay, as obligor, guarantor or
otherwise (other than for purposes of collection in the ordinary course of
business), indebtedness of another person (other than the Company or any
Subsidiary) (it being understood that Debt shall be deemed to be incurred by the
Company or any Subsidiary whenever the Company or such Subsidiary shall create,
assume, guarantee or otherwise become liable in respect thereof).
"Subsidiary" means (a) any corporation, association, joint venture or
other business entity of which more than 50% of the total voting power of shares
of stock or other ownership interests entitled to vote in the election of the
directors, managers, trustees or other persons having the power to direct or
cause the direction of the management and policies 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, and (b) any partnership or limited liability
company in which the Company or one or more of the other Subsidiaries of the
Company, directly or indirectly,
9
<PAGE>
possesses more than a 50% interest in the total capital or total income of such
partnership or limited liability company.
"Total Assets" as of any date means the sum of (a) Undepreciated Real
Estate Assets and (b) all other assets of the Company and its Subsidiaries
determined in accordance with generally accepted accounting principles (but
excluding accounts receivable and intangibles).
"Total Unencumbered Assets" means Total Assets minus the value of any
properties of the Company and its Subsidiaries that are encumbered by any
mortgage, charge, pledge, lien, security interest or other encumbrance of any
kind, including the value of any stock of any Subsidiary that is so encumbered.
For purposes of this definition, the value of each property shall be equal to
the purchase price or cost of each such property and the value of any stock
subject to any encumbrance shall be determined by reference to the value of the
properties owned by the issuer of such stock as aforesaid.
"Undepreciated Real Estate Assets" as of any date means the amount of
real estate assets of the Company and its Subsidiaries on such date, before
depreciation and amortization determined on a consolidated basis in accordance
with generally accepted accounting principles.
As provided in and subject to the provisions of the Indenture, the
Holder of this Note shall not have the right to institute any proceeding with
respect to the Indenture or for the appointment of a receiver or trustee or for
any other remedy thereunder, unless such Holder shall have previously given the
Trustee written notice of a continuing Event of Default with respect to the
Notes, the Holders of not less than 25% in principal amount of the Notes at the
time Outstanding shall have made written request to the Trustee to institute
proceedings in respect of such Event of Default as Trustee and offered the
Trustee reasonable indemnity and the Trustee shall not have received from the
Holders of a majority in principal amount of the Notes at the time Outstanding a
direction inconsistent with such request, and shall have failed to institute any
such proceeding for 60 days after receipt of such notice, request and offer of
indemnity. The foregoing shall not apply to any suit instituted by the Holder of
this Note for the enforcement of any payment of principal hereof or any interest
on or after the respective due dates expressed herein.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities at any time by the
Company and the Trustee with the consent of the Holders of not less than a
majority in principal amount of all Outstanding Securities of a series affected
thereby. The Indenture also contains provisions permitting the Holders of not
less than a majority of the aggregate principal amount of the Outstanding
Securities of any services on behalf of the Holders of all such Securities, to
waive compliance by the Company with certain provisions of the Indenture.
Furthermore, provisions in the Indenture permit the Holders of not less than a
majority of the aggregate principal amount of the Outstanding Securities of any
series, in certain instances, to waive, on behalf of all of the Holders of Debt
Securities of such series, certain past defaults under the Indenture and their
consequences. Any such consent or
10
<PAGE>
waiver by the Holder of this Note shall be conclusive and binding upon such
Holder and upon all future Holders of this Note and other Notes issued upon the
registration of transfer hereof or in exchange heretofore or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Note.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay principal, premium, if any, and interest in
respect of this Note at the times, places and rate or formula, and in the coin
or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein
and herein set forth, the transfer of this Note is registrable in the Security
Register of the Company upon surrender of this Note for registration of transfer
at the office or agency of the Company in any place where the principal hereof
and any premium or interest hereon are payable, duly endorsed by, or accompanied
by a written instrument of transfer in form satisfactory to the Company and the
Security Registrar duly executed by, the Holder hereof or by his attorney duly
authorized in writing, and thereupon one or more new Notes, of authorized
denominations and for the same aggregate principal amount, will be issued to the
designated transferee or transferees.
As provided in the Indenture and subject to certain limitations therein
and herein set forth, this Note is exchangeable for a like aggregate principal
amount of Notes of different authorized denominations but otherwise having the
same terms and conditions, as requested by the Holder hereof surrendering the
same.
No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Note for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Holder in whose name this Note is registered as the owner thereof for all
purposes, whether or not this Note be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
THE INDENTURE AND THIS NOTE 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 ENTIRELY IN SUCH STATE.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused CUSIP numbers to be
printed on the Notes as a convenience to the Holders of the Notes. No
representation is made as to the correctness or accuracy of such CUSIP numbers
as printed on the Notes, and reliance may be placed only on the other
identification numbers printed hereon.
11
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face
of this Note, shall be construed as though they were written out in full
according to applicable laws or regulations:
<TABLE>
<S> <C> <C>
TEN COM - as tenants in common UNIF GIFT MIN ACT - _____ Custodian _______
TEN ENT - as tenants by the entireties (Cust) (Minor)
JT TEN - as joint tenants with right of under Uniform Gifts to Minors
survivorship and not as tenants Act
in common --------------------------
State
</TABLE>
Additional abbreviations may also be used though not in the above list.
12
<PAGE>
ASSIGNMENT FORM
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto
- --------------------------------------------------------------------------------
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
- --------------------------------------------------------------------------------
(Please print or type name and address, including postal zip code, of assignee)
this Note and all rights thereunder, and hereby irrevocably constitutes and
appoints ______________, Attorney, to transfer this Note on the books of the
Company, with full power of substitution in the premises.
Dated: *
------------------------ -----------------------------------
- --------------------
*NOTICE: The signature(s) to this assignment must correspond with the name(s) as
it appears upon the face of the Note in every particular, without alteration,
enlargement or any change whatsoever.
13
<PAGE>
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably request(s) and instruct(s) the
Company to repay this Note (or portion hereof specified below) pursuant to its
terms at a price equal to 100% of the principal amount to be repaid, together
with unpaid interest accrued hereon to the Repayment Date, to the undersigned,
at _____________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address of the undersigned)
For this Note to be repaid, the Trustee must receive at its corporate
trust office in the Borough of Manhattan, The City of New York, currently
located at Norwest Trust Company New York, 3 New York Plaza, 15th Floor, New
York, New York 10004, not more than 60 nor less than 30 calendar days prior to
the Repayment Date, this Note with this "Option to Elect Repayment" form duly
completed.
If less than the entire principal amount of this Note is to be repaid,
specify the portion hereof (which shall be increments of U.S. $1,000 or other
Authorized Denomination specified on the face of this Note) which the Holder
elects to have repaid and specify the denomination or denominations (which shall
be an Authorized Denomination) of the Notes to be issued to the Holder for the
portion of this Note not being repaid (in the absence of any such specification,
one such Note will be issued for the portion not being repaid).
Principal Amount
to be Repaid: $
----------------
Date:
---------------------- ----------------------------------------
Notice: The signature(s) on this Option
to Elect Repayment must correspond with
the name(s) as written upon the face of
this Note in every particular, without
alteration or enlargement or any change
whatsoever.
14
[FORM OF FACE OF NOTE]
If the Holder of this Note (as indicated below) is The Depository Trust
Company ("DTC") or a nominee of DTC, this Note is a global note and the
following two legends apply:
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY (THE "DEPOSITARY") (55 WATER STREET, NEW YORK, NEW YORK) TO THE
ISSUER HEREOF OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME
AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY AND ANY PAYMENT
IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN CERTIFICATED
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.
[IF THIS SECURITY IS AN ORIGINAL ISSUE DISCOUNT SECURITY, INSERT -- FOR
PURPOSES OF SECTIONS 1273 AND 1275 OF THE UNITED STATES INTERNAL REVENUE CODE,
THE AMOUNT OF ORIGINAL ISSUE DISCOUNT ON THIS SECURITY IS ____% OF ITS PRINCIPAL
AMOUNT, THE ISSUE DATE IS ____________, 19__ [AND] THE YIELD TO MATURITY IS
___%. [THE METHOD USED TO DETERMINE THE AMOUNT OF ORIGINAL ISSUE DISCOUNT
APPLICABLE TO THE SHORT ACCRUAL PERIOD OF ____________, 19__ TO ____________,
19__, IS ___% OF THE PRINCIPAL AMOUNT OF THIS SECURITY.]]
<PAGE>
REGISTERED PRINCIPAL AMOUNT: $____________
No. FLR- ______
CUSIP No.: ______
FRANCHISE FINANCE CORPORATION OF AMERICA
MEDIUM-TERM NOTE
(Floating Rate)
<TABLE>
<S> <C> <C>
INTEREST RATE BASIS ORIGINAL ISSUE DATE: STATED MATURITY DATE:
OR BASES:
IF LIBOR: IF CMT RATE:
[] LIBOR Reuters [] Designated CMT Telerate Page:
[] LIBOR Telerate [] Designated CMT Maturity Index:
INDEX CURRENCY:
INDEX MATURITY: INITIAL INTEREST RATE: % INTEREST PAYMENT DATE(S):
SPREAD (PLUS OR MINUS): SPREAD MULTIPLIER: INITIAL INTEREST RESET DATE:
MINIMUM INTEREST RATE: % MAXIMUM INTEREST RATE: % INTEREST RESET DATE(S):
INITIAL REDEMPTION DATE: INITIAL REDEMPTION ANNUAL REDEMPTION
PERCENTAGE: % PERCENTAGE REDUCTION: %
OPTIONAL REPAYMENT DATE(S): CALCULATION AGENT:
Norwest Bank Arizona,
National Association
INTEREST CATEGORY: DAY COUNT CONVENTION:
[] Regular Floating Rate Note [] 30/360 for the period from ________ to ________
[] Floating Rate/Fixed Rate Note
Fixed Rate Commencement Date: [] Actual/360 for the period from ________ to ________
Fixed Interest Rate: %
[] Inverse Floating Rate Note [] Actual/Actual for the period from ________ to ________
Fixed Interest Rate: %
[] Original Issue Discount Note Applicable Interest Rate Basis:
Issue Price: %
SPECIFIED CURRENCY: AUTHORIZED DENOMINATION:
[X] United States dollars [] $1,000 and integral multiples thereof
[] Other:
DEFAULT RATE: %
ADDENDUM ATTACHED OTHER/ADDITIONAL PROVISIONS:
[] Yes
[] No
</TABLE>
2
<PAGE>
Franchise Finance Corporation of America, a Delaware corporation (the
"Company," which term includes any successor under the Indenture hereinafter
referred to), for value received, hereby promises to pay to _______________, or
registered assigns, the principal sum of _______________, on the Stated Maturity
Date specified above (or any Redemption Date or Repayment Date, each as defined
on the reverse hereof) (each such Stated Maturity Date, Redemption Date or
Repayment Date being hereinafter referred to as the "Maturity" with respect to
the principal repayable on such date) and to pay interest thereon, at a rate per
annum equal to the Initial Interest Rate specified above until the Initial
Interest Reset Date specified above and thereafter at a rate determined in
accordance with the provisions specified above and on the reverse hereof with
respect to one or more Interest Rate Bases specified above until the principal
hereof is paid or duly made available for payment, and (to the extent that the
payment of such interest shall be legally enforceable) at the Default Rate per
annum specified above on any overdue principal, premium and/or interest. The
Company will pay interest in arrears on each Interest Payment Date, if any,
specified above (each, an "Interest Payment Date"), commencing with the first
Interest Payment Date next succeeding the Original Issue Date specified above,
and at Maturity; provided, however, that if the Original Issue Date occurs
between a Regular Record Date (as defined below) and the next succeeding
Interest Payment Date, interest payments will commence on the second Interest
Payment Date next succeeding the Original Issue Date to the Holder of this Note
on the Regular Record Date with respect to such second Interest Payment Date.
Interest on this Note will accrue from, and including, the immediately
preceding Interest Payment Date to which interest has been paid or duly provided
for (or from, and including, the Original Issue Date if no interest has been
paid or duly provided for) to, but excluding, the applicable Interest Payment
Date or the date of Maturity, as the case may be (each, an "Interest Period").
The interest so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, subject to certain exceptions described herein, be
paid to the person in whose name this Note (or one or more predecessor Notes) is
registered at the close of business on the 15th calendar day (whether or not a
Business Day, as defined on the reverse hereof) immediately preceding such
Interest Payment Date (the "Regular Record Date"); provided, however, that
interest payable at Maturity will be payable to the person to whom the principal
hereof and premium, if any, hereon shall be payable. Any such interest not so
punctually paid or duly provided for ("Defaulted Interest") will forthwith cease
to be payable to the Holder on any Regular Record Date, and shall be paid to the
person in whose name this Note is registered at the close of business on a
special record date (the "Special Record Date") for the payment of such
Defaulted Interest to be fixed by the Trustee hereinafter referred to, notice
whereof shall be given to the Holder of this Note by the Trustee not less than
10 calendar days prior to such Special Record Date or may be paid at any time in
any other lawful manner not inconsistent with the requirements of any securities
exchange on which this Note may be listed, and upon such notice as may be
required by such exchange, all as more fully provided for in the Indenture.
Payments of principal of, premium, if any, and interest, if any, on
Notes issued in fully registered book-entry form will be made by the Company
through the Trustee (as defined on the reverse hereof) to the Depository Trust
Company. In the case of certificated Notes, payment
3
<PAGE>
of principal, premium, if any, and interest, if any, in respect of this Note due
at Maturity will be made in immediately available funds upon presentation and
surrender of this Note (and, with respect to any applicable repayment of this
Note, a duly completed election form as contemplated on the reverse hereof) at
the corporate trust office of the Trustee maintained for that purpose in the
Borough of Manhattan, The City of New York, currently located at Norwest Trust
Company New York, 3 New York Plaza, 15th Floor, New York, New York 10004, or at
such other paying agency in the Borough of Manhattan, The City of New York, as
the Company may determine. Payment of interest due on certificated Notes on any
Interest Payment Date other than at Maturity will be made at the office or
agency referred to above maintained by the Company for such purpose or, at the
option of the Company, may be made by check mailed to the address of the person
entitled thereto as such address shall appear in the Security Register;
provided, however, that a Holder of U.S. $10,000,000 or more in initial
aggregate principal amount of Notes (whether having identical or different terms
and provisions) will be entitled to receive interest payments on such Interest
Payment Date by wire transfer of immediately available funds if appropriate wire
transfer instructions have been received in writing by the Trustee not less than
15 calendar days prior to such Interest Payment Date. Any such wire transfer
instructions received by the Trustee shall remain in effect until revoked by
such Holder.
If any Interest Payment Date other than the date of Maturity would
otherwise be a day that is not a Business Day, such Interest Payment Date shall
be postponed to the next succeeding Business Day, except that if LIBOR is an
applicable Interest Rate Basis and such Business Day falls in the next
succeeding calendar month, such Interest Payment Date shall be the immediately
preceding Business Day. If the Stated Maturity Date falls on a day that is not a
Business Day, the required payment of principal, premium, if any, and interest
shall be made on the next succeeding Business Day with the same force and effect
as if made on the date such payment was due, and no interest shall accrue with
respect to such payment for the period from and after the Stated Maturity Date
to the date of such payment on the next succeeding Business Day.
The Company is obligated to make payment of principal, premium, if any,
and interest in respect of this Note in United States dollars.
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof and, if so specified above, in the Addendum hereto,
which further provisions shall have the same force and effect as if set forth on
the face hereof.
Notwithstanding any provisions to the contrary contained herein, if the
face of this Note specifies that an Addendum is attached hereto or that
"Other/Additional Provisions" apply, this Note shall be subject to the terms set
forth in such Addendum or such "Other/Additional Provisions."
Unless the Certificate of Authentication hereon has been executed by
the Trustee by manual signature of one of its authorized signatories, this Note
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
4
<PAGE>
IN WITNESS WHEREOF, Franchise Finance Corporation of America has caused
this Note to be duly executed.
FRANCHISE FINANCE CORPORATION OF AMERICA
By
--------------------------------------
John Barravecchia, Executive Vice
President, Chief Financial Officer,
Treasurer and Assistant Secretary
Dated:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION:
This Note is one of the Securities of the series
designated "Medium-Term Notes due Nine Months or
More from date of Issue" pursuant to the
within-mentioned Indenture.
Norwest Bank Arizona, National Association,
as Trustee
By
---------------------------
Authorized Signatory
5
<PAGE>
[FORM OF REVERSE OF NOTE]
FRANCHISE FINANCE CORPORATION OF AMERICA
MEDIUM-TERM NOTE
(Floating Rate)
This Note is one of a duly authorized series of Securities (the
"Securities") of the Company issued and to be issued under an Indenture, dated
as of November 21, 1995, as amended, modified or supplemented from time to time
(the "Indenture"), between the Company and Norwest Bank Arizona, National
Association, as Trustee (the "Trustee," which term includes any successor
trustee under the Indenture), to which Indenture and all indentures supplemental
thereto reference is hereby made for a statement of the respective rights,
limitations of rights, duties and immunities thereunder of the Company, the
Trustee and the Holders of the Securities, and of the terms upon which the
Securities are, and are to be, authenticated and delivered. This Note is one of
the series of Securities to be designated as "Medium-Term Notes Due Nine Months
or More From Date of Issue" (the "Notes"). All terms used but not defined in
this Note specified on the face hereof or in an Addendum hereto shall have the
meanings assigned to such terms in the Indenture.
This Note is issuable only in registered form without coupons in
minimum denominations of U.S. $1,000 and integral multiples thereof or the
minimum Authorized Denomination specified on the face hereof.
This Note will not be subject to any sinking fund and, unless otherwise
provided on the face hereof in accordance with the provisions of the following
two paragraphs, will not be redeemable or repayable prior to its Stated Maturity
Date.
This Note will be subject to redemption at the option of the Company on
any date on or after the Initial Redemption Date, if any, specified on the face
hereof, in whole or from time to time in part in increments of U.S. $1,000 or
the minimum Authorized Denomination (provided that any remaining principal
amount hereof shall be at least U.S. $1,000 or such minimum Authorized
Denomination), at the Redemption Price (as defined below), together with unpaid
interest accrued thereon to the date fixed for redemption (each, a "Redemption
Date"), on notice given no more than 60 nor less than 30 calendar days prior to
the Redemption Date and in accordance with the provisions of the Indenture. The
"Redemption Price" shall initially be the Initial Redemption Percentage
specified on the face hereof multiplied by the unpaid principal amount of this
Note to be redeemed. The Initial Redemption Percentage shall decline at each
anniversary of the Initial Redemption Date by the Annual Redemption Percentage
Reduction, if any, specified on the face hereof until the Redemption Price is
100% of unpaid principal amount to be redeemed. In the event of redemption of
this Note in part only, a new Note of like tenor for the unredeemed portion
hereof and otherwise having the same terms as this Note shall be issued in the
name of the Holder hereof upon the presentation and surrender hereof.
6
<PAGE>
This Note will be subject to repayment by the Company at the option of
the Holder hereof on the Optional Repayment Date(s), if any, specified on the
face hereof, in whole or in part in increments of U.S. $1,000 or the minimum
Authorized Denomination (provided that any remaining principal amount hereof
shall be at least U.S. $1,000 or such minimum Authorized Denomination), at a
repayment price equal to 100% of the unpaid principal amount to be repaid,
together with unpaid interest accrued thereon to the date fixed for repayment
(each, a "Repayment Date"). For this Note to be repaid, this Note must be
received, together with the form herein entitled "Option to Elect Repayment"
duly completed, by the Trustee at its corporate trust office not more than 60
nor less than 30 calendar days prior to the Repayment Date. Exercise of such
repayment option by the Holder hereof will be irrevocable. In the event of
repayment of this Note in part only, a new Note of like tenor for the unrepaid
portion hereof and otherwise having the same terms as this Note shall be issued
in the name of the Holder hereof upon the presentation and surrender hereof.
If the Interest Category of this Note is specified on the face hereof
as an Original Issue Discount Note, the amount payable to the Holder of this
Note in the event of redemption, repayment or acceleration of the Stated
Maturity Date of this Note will be equal to the sum of (i) the Issue Price
specified on the face hereof (increased by any accruals of the Discount, as
defined below) and, in the event of any redemption of this Note (if applicable),
multiplied by the Initial Redemption Percentage (as adjusted by the Annual
Redemption Percentage Reduction, if applicable) and (ii) any unpaid interest on
this Note accrued from the Original Issue Date to the Redemption Date, Repayment
Date or accelerated Stated Maturity Date, as the case may be. The difference
between the Issue Price and 100% of the principal amount of this Note is
referred to herein as the "Discount."
For purposes of determining the amount of Discount that has accrued as
of any Redemption Date, Repayment Date or accelerated Stated Maturity Date of
this Note, such Discount will be accrued so as to cause an assumed yield on the
Note to be constant. The assumed constant yield will be calculated using a
30-day month, 360-day year convention, a compounding period that, except for the
Initial Period (as defined below), corresponds to the shortest period between
Interest Payment Dates (with ratable accruals within a compounding period), a
constant coupon rate equal to the initial interest rate applicable to this Note
and an assumption that the Maturity of this Note will not be accelerated. If the
period from the Original Issue Date to the initial Interest Payment Date (the
"Initial Period") is shorter than the compounding period for this Note, a
proportionate amount of the yield for an entire compounding period will be
accrued. If the Initial Period is longer than the compounding period, then such
period will be divided into a regular compounding period and a short period,
with the short period being treated as provided in the preceding sentence.
The interest rate borne by this Note will be determined as follows:
(a) Unless the Interest Category of this Note is specified on
the face hereof as a "Floating Rate/Fixed Rate Note" or an "Inverse
Floating Rate Note," this Note shall be designated as a "Regular
Floating Rate Note" and, except as set forth below or on the
7
<PAGE>
face hereof, shall bear interest at the rate determined by reference to
the applicable Interest Rate Basis or Bases (i) plus or minus the
Spread, if any, and/or (ii) multiplied by the Spread Multiplier, if
any, in each case as specified on the face hereof. Commencing on the
Initial Interest Reset Date, the rate at which interest on this Note
shall be payable shall be reset as of each Interest Reset Date
specified on the face hereof; provided, however, that the interest rate
in effect for the period, if any, from the Original Issue Date to the
Initial Interest Reset Date shall be the Initial Interest Rate.
(b) If the Interest Category of this Note is specified on the
face hereof as a "Floating Rate/Fixed Rate Note," then, except as set
forth below or on the face hereof, this Note shall bear interest at the
rate determined by reference to the applicable Interest Rate Basis or
Bases (i) plus or minus the Spread, if any, and/or (ii) multiplied by
the Spread Multiplier, if any. Commencing on the Initial Interest Reset
Date, the rate at which interest on this Note shall be payable shall be
reset as of each Interest Reset Date: provided, however, that (a) the
interest rate in effect for the period, if any, from the Original Issue
Date to the Initial Interest Reset Date shall be the Initial Interest
Rate and (b) the interest rate in effect for the period commencing on
the Fixed Rate Commencement Date specified on the face hereof to
Maturity shall be the Fixed Interest Rate specified on the face hereof
or, if no such Fixed Interest Rate is specified, the interest rate in
effect hereon on the day immediately preceding the Fixed Rate
Commencement Date.
(c) If the Interest Category of this Note is specified on the
face hereof as an "Inverse Floating Rate Note," then, except as set
forth below or on the face hereof, this Note shall bear interest at the
Fixed Interest Rate minus the rate determined by reference to the
applicable Interest Rate Basis or Bases (i) plus or minus the Spread,
if any, and/or (ii) multiplied by the Spread Multiplier, if any;
provided, however, that, unless otherwise specified on the face hereof,
the interest rate hereon shall not be less than zero. Commencing on the
Initial Interest Reset Date, the rate at which interest on this Note
shall be payable shall be reset as of each Interest Reset Date;
provided, however, that the interest rate in effect for the period, if
any, from the Original Issue Date to the Initial Interest Reset Date
shall be the Initial Interest Rate.
Unless otherwise specified on the face hereof, the rate with respect to
each Interest Rate Basis will be determined in accordance with the applicable
provisions below. Except as set forth above or on the face hereof, the interest
rate in effect on each day shall be (i) if such day is an Interest Reset Date,
the interest rate determined as of the Interest Determination Date (as defined
below) immediately preceding such Interest Reset Date or (ii) if such day is not
an Interest Reset Date, the interest rate determined as of the Interest
Determination Date (as defined below) immediately preceding the most recent
Interest Reset Date.
If any Interest Reset Date would otherwise be a day that is not a
Business Day, such Interest Reset Date shall be postponed to the next succeeding
Business Day, except that if LIBOR is an applicable Interest Rate Basis and such
Business Day falls in the next succeeding
8
<PAGE>
calendar month, such Interest Reset Date shall be the immediately preceding
Business Day. In addition, if the Treasury Rate is an applicable Interest Rate
Basis and the Interest Determination Date would otherwise fall on an Interest
Reset Date, then such Interest Reset Date will be postponed to the next
succeeding Business Day.
As used herein, "Business Day" means any day, other than a Saturday or
Sunday, that is neither a legal holiday nor a day on which banking institutions
are authorized or required by law or executive order to close in The City of New
York. "London Business Day" means (i) if the Index Currency (as hereinafter
defined) is other than European Currency Units ("ECU"), any day on which
dealings in such Index Currency are transacted in the London interbank market or
(ii) if the Index Currency is ECU, any day that does not appear as an ECU
non-settlement day on the display designated as "ISDE" on the Reuter Monitor
Money Rates Service (or a day so designated by the ECU Banking Association) or,
if ECU non-settlement days do not appear on that page (and are not so
designated), is not a day on which payments in ECU cannot be settled in the
international interbank market.
"Principal Financial Center" means the capital city of the country
issuing the currency or composite currency in which any payment in respect of
the related Notes is to be made or, solely with respect to the calculation of
LIBOR, the Index Currency, except that with respect to U.S. dollars, Australian
dollars, Deutsche marks, Dutch guilders, Italian lire, Swiss francs and ECUs,
the Principal Financial Center shall be The City of New York, Sydney, Frankfurt,
Amsterdam, Milan, Zurich and Luxembourg, respectively.
The "Interest Determination Date" with respect to the CD Rate, the CMT
Rate, the Commercial Paper Rate, the Federal Funds Rate and the Prime Rate will
be the second Business Day immediately preceding the applicable Interest Reset
Date; the "Interest Determination Date" with respect to the Eleventh District
Cost of Funds Rate shall be the last working day of the month immediately
preceding the applicable Interest Reset Date on which the Federal Home Loan Bank
of San Francisco (the "FHLB of San Francisco") publishes the Index (as defined
below); and the "Interest Determination Date" with respect to LIBOR shall be the
second London Business Day immediately preceding the applicable Interest Reset
Date. The "Interest Determination Date" with respect to the Treasury Rate shall
be the day in the week in which the applicable Interest Reset Date falls on
which day Treasury Bills (as defined below) are normally auctioned (Treasury
Bills are normally sold at an auction held on Monday of each week, unless that
day is a legal holiday, in which case the auction is normally held on the
following Tuesday, except that such auction may be held on the preceding
Friday); provided, however, that if an auction is held on the Friday of the week
preceding the applicable Interest Reset Date, the Interest Determination Date
shall be such preceding Friday. If the interest rate of this Note is determined
with reference to two or more Interest Rate Bases specified on the face hereof,
the "Interest Determination Date" pertaining to this Note shall be the most
recent Business Day which is at least two Business Days prior to the applicable
Interest Reset Date on which each Interest Rate Basis is determinable. Each
Interest Rate Basis shall be determined as of such date, and the applicable
interest rate shall take effect on the related Interest Reset Date.
9
<PAGE>
CD Rate. If an Interest Rate Basis for this Note is specified on the
face hereof as the CD Rate, the CD Rate shall be determined as of the applicable
Interest Determination Date (a "CD Rate Interest Determination Date") as the
rate on such date for negotiable United States dollar certificates of deposit
having the Index Maturity specified on the face hereof as published by the Board
of Governors of the Federal Reserve System in "Statistical Release H.15(519),
Selected Interest Rates" or any successor publication ("H.15(519)") under the
heading "CDs (Secondary Market)," or, if not published by 3:00 p.m., New York
City time, on the related Calculation Date (as defined below), the rate on such
CD Rate Interest Determination Date for negotiable United States dollar
certificates of deposit of the Index Maturity as published by the Federal
Reserve Bank of New York in its daily statistical release "Composite 3:30 p.m.
Quotations for United States Government Securities" or any successor publication
("Composite Quotations") under the heading "Certificates of Deposit." If such
rate is not yet published in either H.15(519) or Composite Quotations by 3:00
p.m., New York City time, on the related Calculation Date, then the CD Rate on
such CD Rate Interest Determination Date will be calculated by the Calculation
Agent specified on the face hereof and will be the arithmetic mean of the
secondary market offered rates as of 10:00 a.m., New York City time, on such CD
Rate Interest Determination Date, of three leading nonbank dealers in negotiable
United States dollar certificates of deposit in The City of New York selected by
the Calculation Agent for negotiable certificates of deposit of major United
States money market banks for negotiable United States dollar certificates of
deposit with a remaining maturity closest to the Index Maturity in an amount
that is representative for a single transaction in that market at that time;
provided, however, that if the dealers so selected by the Calculation Agent are
not quoting as mentioned in this sentence, the CD Rate determined as of such CD
Rate Interest Determination Date will be the CD Rate in effect on such CD Rate
Interest Determination Date.
CMT Rate. If an Interest Rate Basis for this Note is specified on the
face hereof as the CMT rate, the CMT Rate shall be determined as of the
applicable Interest Determination Date (a "CMT Rate Interest Determination
Date") as the rate displayed on the Designated CMT Telerate Page (as defined
below) under the caption "...Treasury Constant Maturities...Federal Reserve
Board Release H.15...Mondays Approximately 3:45 p.m.," under the column for the
Designated CMT Maturity Index (as defined below) for (i) if the Designated CMT
Telerate Page is 7055, the rate on such CMT Rate Interest Determination Date and
(ii) if the Designated CMT Telerate Page is 7052, the week, or the month, as
applicable, ended immediately preceding the week in which the related CMT Rate
Interest Determination Date occurs. If such rate is no longer displayed on the
relevant page or is not displayed by 3:00 p.m., New York City time, on the
related Calculation Date, then the CMT Rate for such CMT Rate Interest
Determination Date will be such treasury constant maturity rate for the
Designated CMT Maturity Index as published in the relevant H.15(519). If such
rate is no longer published or is not published by 3:00 p.m., New York City
time, on the related Calculation Date, then the CMT Rate on such CMT Rate
Interest Determination Date will be such treasury constant maturity rate for the
Designated CMT Maturity Index (or other United States Treasury rate for the
Designated CMT Maturity Index) for the CMT Rate Interest Determination Date with
respect to such Interest Reset Date as may then be published by either the Board
of Governors of the Federal Reserve System or the United States Department of
the Treasury that the Calculation Agent determines
10
<PAGE>
to be comparable to the rate formerly displayed on the Designated CMT Telerate
Page and published in the relevant H.15(519). If such information is not
provided by 3:00 p.m., New York City time, on the related Calculation Date, then
the CMT Rate on the CMT Rate Interest Determination Date will be calculated by
the Calculation Agent and will be a yield to maturity, based on the arithmetic
mean of the secondary market closing offer side prices as of approximately 3:30
p.m., New York City time, on such CMT Rate Interest Determination Date reported,
according to their written records, by three leading primary United States
government securities dealers (each, a "Reference Dealer") in The City of New
York selected by the Calculation Agent (from five such Reference Dealers
selected by the Calculation Agent and eliminating the highest quotation (or, in
the event of equality, one of the highest) and the lowest quotation (or, in the
event of equality, one of the lowest)), for the most recently issued direct
noncallable fixed rate obligations of the United States ("Treasury Notes") with
an original maturity of approximately the Designated CMT Maturity Index and a
remaining term to maturity of not less than such Designated CMT Maturity Index
minus one year. If the Calculation Agent is unable to obtain three such Treasury
Note quotations, the CMT Rate on such CMT Rate Interest Determination Date will
be calculated by the Calculation Agent and will be a yield to maturity based on
the arithmetic mean of the secondary market offer side prices as of
approximately 3:30 p.m., New York City time, on such CMT Rate Interest
Determination Date of three Reference Dealers in The City of New York (from five
such Reference Dealers selected by the Calculation Agent and eliminating the
highest quotation (or, in the event of equality, one of the highest) and the
lowest quotation (or, in the event of equality, one of the lowest)), for
Treasury Notes with an original maturity of the number of years that is the next
highest to the Designated CMT Maturity Index and a remaining term to maturity
closest to the Designated CMT Maturity Index and in an amount of at least U.S.
$100 million. If three or four (and not five) of such Reference Dealers are
quoting as described above, then the CMT Rate will be based on the arithmetic
mean of the offer prices obtained and neither the highest nor the lowest of such
quotes will be eliminated; provided, however, that if fewer than three Reference
Dealers selected by the Calculation Agent are quoting as mentioned herein, the
CMT Rate determined as of such CMT Rate Interest Determination Date will be the
CMT Rate in effect on such CMT Rate Interest Determination Date. If two Treasury
Notes with an original maturity as described in the second preceding sentence
have remaining terms to maturity equally close to the Designated CMT Maturity
Index, quotes for the Treasury Note with the shorter remaining term to maturity
will be used.
"Designated CMT Telerate Page" means the display on the Dow Jones
Telerate Service on the page specified on the face hereof (or any other page as
may replace such page on that service for the purpose of displaying Treasury
Constant Maturities as reported in H.15(519)) for the purpose of displaying
Treasury Constant Maturities as reported in H.15(519). If no such page is
specified on the face hereof, the Designated CMT Telerate Page shall be 7052,
for the most recent week.
"Designated CMT Maturity Index" means the original period to maturity
of the United States Treasury securities (either 1, 2, 3, 5, 7, 10, 20 or 30
years) specified on the face hereof
11
<PAGE>
with respect to which the CMT Rate will be calculated. If no such maturity as
specified on the face hereof, the Designated CMT Maturity Index shall be 2
years.
Commercial Paper Rate. If an Interest Rate Basis for this Note is
specified on the face hereof as the Commercial Paper Rate, the Commercial Paper
Rate shall be determined as of the applicable Interest Determination Date (a
"Commercial Paper Rate Interest Determination Date") as the Money Market Yield
(as defined below) on such date of the rate for commercial paper having the
Index Maturity as published in H.15(519) under the caption "Commercial Paper-
Nonfinancial." In the event that such rate is not published by 3:00 p.m., New
York City time, on such Calculation Date, then the Commercial Paper Rate on such
Commercial Paper Rate Interest Determination Date will be the Money Market Yield
of the rate for commercial paper having the Index Maturity as published in
Composite Quotations under the heading "Commercial Paper" (with an Index
Maturity of one month or three months being deemed to be equivalent to an Index
Maturity of 30 days or 90 days, respectively). If such rate is not yet published
in either H.15(519) or Composite Quotations by 3:00 p.m., New York City time, on
such Calculation Date, then the Commercial Paper Rate on such Commercial Paper
Rate Interest Determination Date will be calculated by the Calculation Agent and
shall be the Money Market Yield of the arithmetic mean of the offered rates at
approximately 11:00 a.m., New York City time, on such Commercial Paper Rate
Interest Determination Date of three leading dealers of commercial paper in The
City of New York selected by the Calculation Agent for commercial paper having
the Index Maturity placed for an industrial issuer whose bond rating is "AA," or
the equivalent from a nationally recognized statistical rating organization;
provided, however, that if the dealers so selected by the Calculation Agent are
not quoting as mentioned in this sentence, the Commercial Paper Rate determined
as of such Commercial Paper Rate Interest Determination Date will be the
Commercial Paper Rate in effect on such Commercial Paper Rate Interest
Determination Date.
"Money Market Yield" means a yield (expressed as a percentage)
calculated in accordance with the following formula:
Money Market Yield = D x 360
------------- x 100
360 - (D x M)
where "D" refers to the applicable per annum rate for commercial paper quoted on
a bank discount basis and expressed as a decimal, and "M" refers to the actual
number of days in the Interest Period for which interest is being calculated.
Eleventh District Cost of Funds Rate. If an Interest Rate Basis for
this Note is specified on the face hereof as the Eleventh District Cost of Funds
Rate, the Eleventh District Cost of Funds Rate shall be determined as of the
applicable Interest Determination Date (an "Eleventh District Cost of Funds Rate
Interest Determination Date") as the rate equal to the monthly weighted average
cost of funds for the calendar month immediately preceding the month in which
such Eleventh District Cost of Funds Rate Interest Determination Date falls, as
set forth under the caption "11th District" on Telerate Page 7058 as of 11:00
a.m., San Francisco time, on such Eleventh District Cost of Funds Rate Interest
Determination Date. If such rate does not
12
<PAGE>
appear on Telerate Page 7058 on such Eleventh District Cost of Funds Rate
Interest Determination Date, then the Eleventh District Cost of Funds Rate on
such Eleventh District Cost of Funds Rate Interest Determination Date shall be
the monthly weighted average cost of funds paid by member institutions of the
Eleventh Federal Home Loan Bank District that was most recently announced (the
"Index") by the FHLB of San Francisco as such cost of funds for the calendar
month immediately preceding such Eleventh District Cost of Funds Rate Interest
Determination Date. If the FHLB of San Francisco fails to announce the Index on
or prior to such Eleventh District Cost of Funds Rate Interest Determination
Date for the calendar month immediately preceding such Eleventh District Cost of
Funds Rate Interest Determination Date, the Eleventh District Cost of Funds Rate
determined as of such Eleventh District Cost of Funds Rate Interest
Determination Date will be the Eleventh District Cost of Funds Rate in effect on
such Eleventh District Cost of Funds Rate Interest Determination Date.
Federal Funds Rate. If an Interest Rate Basis for this Note is
specified on the face hereof as the Federal Funds Rate, the Federal Funds Rate
shall be determined as of the applicable Interest Determination Date (a "Federal
Funds Rate Interest Determination Date") as the rate on such date for United
States dollar federal funds as published in H.15(519) under the heading "Federal
Funds (Effective)" or, if not published by 3:00 p.m., New York City time, on the
Calculation Date, the rate on such Federal Funds Rate Interest Determination
Date as published in Composite Quotations under the heading "Federal
Funds/Effective Rate." If such rate is not published in either H.15(519) or
Composite Quotations by 3:00 p.m., New York City time, on the related
Calculation Date, then the Federal Funds Rate on such Federal Funds Interest
Determination Date shall be calculated by the Calculation Agent and will be the
arithmetic mean of the rates for the last transaction in overnight United States
dollar federal funds arranged by three leading brokers of federal funds
transactions in The City of New York selected by the Calculation Agent, prior to
9:00 a.m., New York City time, on such Federal Funds Rate Interest Determination
Date; provided, however, that if the brokers so selected by the Calculation
Agent are not quoting as mentioned in this sentence, the Federal Funds Rate
determined as of such Federal Funds Rate Interest Determination Date will be the
Federal Funds Rate in effect on such Federal Funds Rate Interest Determination
Date.
LIBOR. If an Interest Rate Basis for this Note is specified on the face
hereof as LIBOR, LIBOR shall be determined by the Calculation Agent as of the
applicable Interest Determination Date (a "LIBOR Interest Determination Date")
in accordance with the following provisions:
(a) if (i) "LIBOR Reuters" is specified on the face hereof,
the arithmetic mean of the offered rates (unless the Designated LIBOR
Page (as defined below) by its terms provides only for a single rate,
in which case such single rate will be used) for deposits in the Index
Currency having the Index Maturity, commencing on the applicable
Interest Reset Date, that appear (or, if only a single rate is required
as aforesaid, appears) on the Designated LIBOR Page (as defined below)
as of 11:00 a.m., London time, on such LIBOR Interest Determination
Date, or (ii) "LIBOR Telerate" is specified on the face hereof, or if
neither "LIBOR Reuters" nor "LIBOR Telerate" is specified on the face
hereof as the method for calculating LIBOR, the rate for deposits in
the Index Currency
13
<PAGE>
having the Index Maturity, commencing on such Interest Reset Date, that
appears on the Designated LIBOR Page as of 11:00 a.m., London time, on
such LIBOR Interest Determination Date. If fewer than two such offered
rates appear, or if no such rate appears, as applicable, LIBOR on such
LIBOR Interest Determination Date shall be determined in accordance
with the provisions described in clause (b) below.
(b) With respect to a LIBOR Interest Determination Date on
which fewer than two offered rates appear, or no rate appears, as the
case may be, on the Designated LIBOR Page as specified in clause (a)
above, the Calculation Agent shall request the principal London offices
of each of four major reference banks in the London interbank market,
as selected by the Calculation Agent, to provide the Calculation Agent
with its offered quotation for deposits in the Index Currency for the
period of the Index Maturity, commencing on the applicable Interest
Reset Date, to prime banks in the London interbank market at
approximately 11:00 a.m., London time, on such LIBOR Interest
Determination Date and in a principal amount that is representative for
a single transaction in such Index Currency in such market at such
time. If at least two such quotations are so provided, then LIBOR on
such LIBOR Interest Determination Date will be the arithmetic mean of
such quotations. If fewer than two such quotations are so provided,
then LIBOR on such LIBOR Interest Determination Date will be the
arithmetic mean of the rates quoted at approximately 11:00 a.m., in the
applicable Principal Financial Center, on such LIBOR Interest
Determination Date by three major banks in such Principal Financial
Center selected by the Calculation Agent for loans in the Index
Currency to leading European banks, having the Index Maturity and in a
principal amount that is representative for a single transaction in
such Index Currency in such market at such time; provided, however,
that if the banks so selected by the Calculation Agent are not quoting
as mentioned in this sentence, LIBOR determined as of such LIBOR
Interest Determination Date shall be LIBOR in effect on such LIBOR
Interest Determination Date.
"Index Currency" means the currency or composite currency specified on
the face hereof as to which LIBOR shall be calculated. If no such currency or
composite currency is specified on the face hereof, the Index Currency shall be
United States dollars.
"Designated LIBOR Page" means (a) if "LIBOR Reuters" is specified on
the face hereof, the display on the Reuter Monitor Money Rates Service (or any
successor service) for the purpose of displaying the London interbank rates of
major banks for the Index Currency, or (b) if "LIBOR Telerate" is specified on
the face hereof or neither "LIBOR Reuters" nor "LIBOR Telerate" is specified on
the face hereof as the method for calculating LIBOR, the display on the Dow
Jones Telerate Service (or any successor service) for the purpose of displaying
the London interbank rates of major banks for the Index Currency.
Prime Rate. If an Interest Rate Basis for this Note is specified on the
face hereto as the Prime Rate, the Prime Rate shall be determined as of the
applicable Interest Determination Date (a "Prime Rate Interest Determination
Date") as the rate on such date as such rate is published
14
<PAGE>
in H.15(519) under the heading "Bank Prime Loan." If such rate is not published
prior to 3:00 p.m., New York City time, on the related Calculation Date, then
the Prime Rate shall be the arithmetic mean of the rates of interest publicly
announced by each bank that appears on the Reuters Screen USPRIME 1 (as defined
below) as such bank's prime rate or base lending rate as in effect for such
Prime Rate Interest Determination Date. If fewer than four such rates appear on
the Reuters Screen USPRIME 1 for such Prime Rate Interest Determination Date,
the Prime Rate shall be the arithmetic mean of the prime rates quoted on the
basis of the actual number of days in the year divided by a 360-day year as of
the close of business on such Prime Rate Interest Determination Date by four
major money center banks in The City of New York selected by the Calculation
Agent. If fewer than four such quotations are so provided, the Prime Rate shall
be the arithmetic mean of four prime rates quoted on the basis of the actual
number of days in the year divided by a 360-day year as of the close of business
on such Prime Rate Interest Determination Date as furnished in The City of New
York by the major money center banks, if any, that have provided such quotations
and by as many substitute banks or trust companies as necessary to obtain such
four prime rate quotations, provided such substitute banks or trust companies
are organized and doing business under the laws of the United States, or any
State thereof, each having total equity capital of at least U.S. $500 million
and being subject to supervision or examination by Federal or State authority,
selected by the Calculation Agent to provide such rate or rates; provided,
however, that if the banks or trust companies so selected by the Calculation
Agent are not quoting as mentioned in this sentence, the Prime Rate determined
as of such Prime Rate Interest Determination Date will be the Prime Rate in
effect on such Prime Rate Interest Determination Date.
"Reuters Screen USPRIME 1" means the display designated as page
"USPRIME 1" on the Reuter Monitor Money Rates Service (or such other page as may
replace the USPRIME 1 page on that service for the purpose of displaying prime
rates or base lending rates of major United States banks).
Treasury Rate. If an Interest Rate Basis for this Note is specified on
the face hereof as the Treasury Rate, the Treasury Rate shall be determined as
of the applicable Interest Determination Date (a "Treasury Rate Interest
Determination Date") as the rate from the auction held on such Treasury Rate
Interest Determination Date (the "Auction") of direct obligations of the United
States ("Treasury Bills") having the Index Maturity, as such rate is published
in H.15(519) under the heading "Treasury bills-auction average (investment)" or,
if not published by 3:00 p.m., New York City time, on the related Calculation
Date, the auction average rate of such Treasury Bills (expressed as a bond
equivalent on the basis of a year of 365 or 366 days, as applicable, and applied
on a daily basis) as otherwise announced by the United States Department of the
Treasury. In the event that the results of the Auction of Treasury Bills having
the Index Maturity are not reported as provided above by 3:00 p.m., New York
City time, on such Calculation Date, or if no such Auction is held, then the
Treasury Rate shall be calculated by the Calculation Agent and shall be a yield
to maturity (expressed as a bond equivalent on the basis of a year of 365 or 366
days, as applicable, and applied on a daily basis) of the arithmetic mean of the
secondary market bid rates, as of approximately 3:30 p.m., New York City time,
on such Treasury Rate Interest Determination Date, of three leading primary
United States
15
<PAGE>
government securities dealers selected by the Calculation Agent, for the issue
of Treasury Bills with a remaining maturity closest to the Index Maturity;
provided, however, that if the dealers so selected by the Calculation Agent are
not quoting as mentioned in this sentence, the Treasury Rate determined as of
such Treasury Rate Interest Determination Date will be the Treasury Rate in
effect on such Treasury Rate Interest Determination Date.
Notwithstanding the foregoing, the interest rate hereon shall not be
greater than the Maximum Interest Rate, if any, or less than the Minimum
Interest Rate, if any, in each case as specified on the face hereof. The
interest rate on this Note will in no event be higher than the maximum rate
permitted by New York law, as the same may be modified by United States law of
general application.
The Calculation Agent shall calculate the interest rate hereon on or
before each Calculation Date. The "Calculation Date," if applicable, pertaining
to any Interest Determination Date shall be the earlier of (a) the 10th calendar
day after such Interest Determination Date or, if such day is not a Business
Day, the next succeeding Business Day or (b) the Business Day immediately
preceding the applicable Interest Payment Date or the Maturity Date, as the case
may be. At the request of the Holder hereof, the Calculation Agent will provide
to the Holder hereof the interest rate hereon then in effect and, if determined,
the interest rate that will become effective as a result of a determination made
for the next succeeding Interest Reset Date.
Accrued interest hereon shall be an amount calculated by multiplying
the principal amount hereof by an accrued interest factor. Such accrued interest
factor shall be computed by adding the interest factor calculated for each day
in the applicable Interest Period. Unless otherwise specified as the Day Count
Convention on the face hereof, the interest factor for each such date shall be
computed by dividing the interest rate applicable to such day by 360 if the CD
Rate, the Commercial Paper Rate, the Eleventh District Cost of Funds Rate, the
Federal Funds Rate, LIBOR or the Prime Rate is an applicable Interest Rate Basis
or by the actual number of days in the year if the CMT Rate or the Treasury Rate
is an applicable Interest Rate Basis. Unless otherwise specified as the Day
Count Convention on the face hereof, the interest factor for this Note, if the
interest rate is calculated with reference to two or more Interest Rate Bases,
shall be calculated in each period in the same manner as if only the applicable
Interest Rate Basis specified on the face hereof applied.
All percentages resulting from any calculation on this Note shall be
rounded to the nearest one hundred-thousandth of a percentage point, with five
one-millionths of a percentage point rounded upwards, and all amounts used in or
resulting from such calculation on this Note shall be rounded to the nearest
cent.
If an Event of Default, as defined in the Indenture, shall occur and be
continuing, the principal of the Notes may be declared due and payable in the
manner and with the effect provided in the Indenture.
16
<PAGE>
The Indenture contains provisions for defeasance of (a) the entire
indebtedness of the Notes or (b) certain covenants and Events of Default with
respect to the Notes, in each case upon compliance with certain conditions set
forth therein, which provisions apply to this Note.
In addition to the covenants of the Company contained in the Indenture,
the following covenants will apply to the Notes:
Limitation on Incurrence of Total Debt. The Company will not,
and will not permit any Subsidiary (as defined below) to, incur any Debt (as
defined below) if, immediately after giving effect to the incurrence of such
additional Debt and the application of the proceeds therefrom, the aggregate
principal amount of all outstanding Debt of the Company and its Subsidiaries on
a consolidated basis determined in accordance with generally accepted accounting
principles is greater than 60% of the sum of (i) the Company's Total Assets (as
defined below) as of the end of the calendar quarter prior to the incurrence of
such additional Debt and (ii) the increase in Total Assets from the end of such
quarter including, without limitation, any increase in Total Assets caused by
the incurrence of such additional Debt.
Limitation on Incurrence of Secured Debt. In addition to the
foregoing limitation on the incurrence of Debt, the Company will not, and will
not permit any Subsidiary to, incur any Debt secured by any mortgage, lien,
charge, pledge, encumbrance or security interest of any kind on any of its
properties, and will not otherwise grant or convey any such mortgage, charge,
pledge, encumbrance or security interest of any kind, if immediately after
giving effect thereto, the aggregate principal amount of all outstanding Debt of
the Company and its Subsidiaries on a consolidated basis determined in
accordance with generally accepted accounting principles which is secured by any
mortgage, charge, pledge, encumbrance or security interest of any kind on
property of the Company or any Subsidiary is greater than 40% of the sum of (i)
the Company's Total Assets as of the end of the calendar quarter prior to the
incurrence of such Debt, and (ii) any increase in Total Assets from the end of
such quarter including, without limitation, any increase in Total Assets caused
by the incurrence of such additional Debt.
Debt Service Coverage. In addition to the foregoing
limitations on the incurrence of Debt, the Company will not, and will not permit
any Subsidiary to, incur any Debt if the ratio of Consolidated Income Available
for Debt Service (as defined below) to Annual Service Charge (as defined below)
for the four consecutive calendar quarters most recently ended prior to the date
on which such additional Debt is to be incurred is less than 1.5 to 1.0 on a pro
forma basis after giving effect to the incurrence of such Debt and the
application of the proceeds therefrom.
Maintenance of Total Unencumbered Assets. The Company will
maintain at all times Total Unencumbered Assets (as defined below) of not less
than 150% of the aggregate outstanding principal amount of all outstanding
unsecured Debt of the Company and its Subsidiaries.
17
<PAGE>
As used herein:
"Annual Service Charge" means the interest expense of the
Company and its Subsidiaries for the four consecutive fiscal quarters most
recently ended, including, without limitation, commissions, discounts and other
fees and charges incurred in respect of letter of credit or bankers' acceptance
financings, net costs pursuant to hedging obligations, the interest component of
all payments associated with Capitalized Leases, amortization of debt issuance
costs, amortization of original issue discount, non-cash interest payments and
the interest component of any deferred payment obligations.
"Capitalized Lease" means any lease of property by the Company
or any Subsidiary as lessee that is reflected on the Company's consolidated
balance sheet as a capitalized lease in accordance with generally accepted
accounting principles.
"Consolidated Income Available for Debt Service" for any
period means Consolidated Net Income (as defined below) of the Company and its
Subsidiaries plus amounts which have been deducted, and minus amounts which have
been added, for (a) interest on Debt of the Company and its Subsidiaries, (b)
provision for taxes of the Company and its Subsidiaries based on income, (c)
amortization of debt discount, (d) provisions for gains and losses on
properties, (e) depreciation, (f) the effect of any non-cash charge resulting
from a change in accounting principles in determining Consolidated Net Income
for such period and (g) amortization of deferred charges.
"Consolidated Net Income" for any period means the amount of
consolidated net income (or loss) of the Company and its Subsidiaries for such
period determined on a consolidated basis in accordance with generally accepted
accounting principles.
"Debt" means any indebtedness of the Company or any
Subsidiary, whether or not contingent, in respect of (i) borrowed money or
evidenced by bonds, notes, debentures or similar instruments, (ii) indebtedness
secured by any mortgage, pledge, lien, charge, encumbrance or any security
interest existing on property owned by the Company or any Subsidiary, (iii)
letters of credit or amounts representing the balance deferred and unpaid of the
purchase price of any property except any such balance that constitutes an
accrued expense or trade payable or (iv) Capitalized Leases, in the case of
items of indebtedness under (i) through (iii) above to the extent that any such
items (other than letters of credit) would appear as liabilities on the
Company's consolidated balance sheet in accordance with generally accepted
accounting principles, and also includes, to the extent not otherwise included,
any obligation by the Company or any Subsidiary to be liable for, or to pay, as
obligor, guarantor or otherwise (other than for purposes of collection in the
ordinary course of business), indebtedness of another person (other than the
Company or any Subsidiary) (it being understood that Debt shall be deemed to be
incurred by the Company or any Subsidiary whenever the Company or such
Subsidiary shall create, assume, guarantee or otherwise become liable in respect
thereof).
18
<PAGE>
"Subsidiary" means (a) any corporation, association, joint
venture or other business entity of which more than 50% of the total voting
power of shares of stock or other ownership interests entitled to vote in the
election of the directors, managers, trustees or other persons having the power
to direct or cause the direction of the management and policies 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, and (b) any partnership or
limited liability company in which the Company or one or more of the other
Subsidiaries of the Company, directly or indirectly, possesses more than a 50%
interest in the total capital or total income of such partnership or limited
liability company.
"Total Assets" as of any date means the sum of (i)
Undepreciated Real Estate Assets and (ii) all other assets of the Company and
its Subsidiaries determined in accordance with generally accepted accounting
principles (but excluding accounts receivable and intangibles).
"Total Unencumbered Assets" means Total Assets minus the value
of any properties of the Company and its Subsidiaries that are encumbered by any
mortgage, charge, pledge, lien, security interest or other encumbrance of any
kind, including the value of any stock of any Subsidiary that is so encumbered.
For purposes of this definition, the value of each property shall be equal to
the purchase price or cost of each such property and the value of any stock
subject to any encumbrance shall be determined by reference to the value of the
properties owned by the issuer of such stock as aforesaid.
"Undepreciated Real Estate Assets" as of any date means the
amount of real estate assets of the Company and its Subsidiaries on such date,
before depreciation and amortization determined on a consolidated basis in
accordance with generally accepted accounting principles.
As provided in and subject to the provisions of the Indenture,
the Holder of this Note shall not have the right to institute any proceeding
with respect to the Indenture or for the appointment of a receiver or trustee or
for any other remedy thereunder, unless such Holder shall have previously given
the Trustee written notice of a continuing Event of Default with respect to the
Notes, the Holders of not less than 25% in principal amount of the Notes at the
time Outstanding shall have made written request to the Trustee to institute
proceedings in respect of such Event of Default as Trustee and offered the
Trustee reasonable indemnity and the Trustee shall not have received from the
Holders of a majority in principal amount of the Notes at the time Outstanding a
direction inconsistent with such request, and shall have failed to institute any
such proceeding for 60 days after receipt of such notice, request and offer of
indemnity. The foregoing shall not apply to any suit instituted by the Holder of
this Note for the enforcement of any payment of principal hereof or any interest
on or after the respective due dates expressed herein.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities at any time by the
Company and the Trustee with the consent of the
19
<PAGE>
Holders of not less than a majority in principal amount of all Outstanding
Securities of a Series affected thereby. The Indenture also contains provisions
permitting the Holders of not less than a majority of the aggregate principal
amount of the Outstanding Securities of any series, on behalf of the Holders of
all such Securities, to waive compliance by the Company with certain provisions
of the Indenture. Furthermore, provisions in the Indenture permit the Holders of
not less than a majority of the aggregate principal amount of the Outstanding
Securities of any series, in certain instances, to waive, on behalf of all of
the Holders of Securities of such series, certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Note shall be conclusive and binding upon such Holder and upon all future
Holders of this Note and other Notes issued upon the registration of transfer
hereof or in exchange herefor or in lieu hereof, whether or not notation of such
consent or waiver is made upon this Note.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay principal, premium, if any, and interest in
respect of this Note at the times, places and rate or formula, and in the coin
or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein
and herein set forth, the transfer of this Note is registrable in the Security
Register of the Company upon surrender of this Note for registration of transfer
at the office or agency of the Company in any place where the principal hereof
and any premium or interest hereon are payable, duly endorsed by, or accompanied
by a written instrument of transfer in form satisfactory to the Company and the
Security Registrar duly executed by, the Holder hereof or by his attorney duly
authorized in writing, and thereupon one or more new Notes, of authorized
denominations and for the same aggregate principal amount, will be issued to the
designated transferee or transferees.
As provided in the Indenture and subject to certain limitations therein
and herein set forth, this Note is exchangeable for a like aggregate principal
amount of Notes of different authorized denominations but otherwise having the
same terms and conditions, as requested by the Holder hereof surrendering the
same.
No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Note for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Holder in whose name this Note is registered as the owner thereof for all
purposes, whether or not this Note be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
THE INDENTURE AND THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
20
<PAGE>
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY IN SUCH STATE.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused CUSIP numbers to be
printed on the Notes as a convenience to the Holders of the Notes. No
representation is made as to the correctness or accuracy of such CUSIP numbers
as printed on the Notes, and reliance may be placed only on the other
identification numbers printed hereon.
21
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face
of this Note, shall be construed as though they were written out in full
according to applicable laws or regulations:
<TABLE>
<S> <C>
TEN COM - as tenants in common UNIF GIFT MIN ACT - _______ Custodian _______
TEN ENT - as tenants by the entireties (Cust) (Minor)
JT TEN - as joint tenants with right of under Uniform Gifts to Minors
survivorship and not as tenants Act _________________________
in common (State)
</TABLE>
Additional abbreviations may also be used though not in the above list.
22
<PAGE>
ASSIGNMENT FORM
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER
IDENTIFYING NUMBER OF ASSIGNEE
- ------------------------------
| |
|------------------------|------------------------------------------------------
________________________________________ (Please print or typewrite name and
address including zip code of assignee) ____________________ this Note and all
rights thereunder hereby irrevocably constituting and appointing
____________________ Attorney to transfer this Note on the books of the Company,
with full power of substitution in the premises.
Dated:
-------------------- ----------------------------------------
Notice: The signature(s) on this
Assignment must correspond with the
name(s) as written upon the face of this
Note in every particular, without
alteration or enlargement or any change
whatsoever.
23
<PAGE>
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably request(s) and instruct(s) the
Company to repay this Note (or portion hereof specified below) pursuant to its
terms at a price equal to 100% of the principal amount to be repaid, together
with unpaid interest accrued hereon to the Repayment Date, to the undersigned,
at _____________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address of the undersigned)
For this Note to be repaid, the Trustee must receive at its corporate
trust office in the Borough of Manhattan, The City of New York, currently
located at Norwest Trust Company New York, 3 New York Plaza, 15th Floor, New
York, New York 10004, not more than 60 nor less than 30 calendar days prior to
the Repayment Date, this Note with this "Option to Elect Repayment" form duly
completed.
If less than the entire principal amount of this Note is to be repaid,
specify the portion hereof (which shall be increments of U.S. $1,000 or the
minimum Authorized Denomination specified on the face of this Note) which the
Holder elects to have repaid and specify the denomination or denominations
(which shall be an Authorized Denomination) of the Notes to be issued to the
Holder for the portion of this Note not being repaid (in the absence of any such
specification, one such Note will be issued for the portion not being repaid).
Principal Amount
to be Repaid: $__________
Dated:
-------------------- ----------------------------------------
Notice: The signature(s) on this Option
to Elect Repayment must correspond with
the name(s) as written upon the face of
this Note in every particular, without
alteration or enlargement or any change
whatsoever. 24
EXHIBIT 5.01
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
April 16, 1998
Franchise Finance Corporation
of America
The Perimeter Center
17207 North Perimeter Drive
Scottsdale, AZ 85255
Re: $400,000,000 Medium-Term Notes Due Nine Months or More
From Date of Issue
Ladies and Gentlemen:
We have acted as your counsel in connection with the preparation of the
Registration Statement on Form S-3 (Registration No. 33-26437), as amended (the
"Registration Statement"), filed by Franchise Finance Corporation of America
(the "Company"), with the Securities and Exchange Commission in connection with
the registration of $1,000,000,000 aggregate offering price of securities.
Further, we have acted as your counsel in connection with the preparation of the
related Prospectus dated April 16, 1998 (the "Prospectus"), and the Prospectus
Supplement dated April 16, 1998 (the "Prospectus Supplement") relating to the
issuance of up to $400,000,000 Medium-Term Notes Due Nine Months or More From
the Date of Issue (the "Medium-Term Notes"). 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
Medium-Term Notes.
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 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 Medium-Term
<PAGE>
Notes. We have examined the Registration Statement, the Prospectus and the
Prospectus Supplement. 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 from the date of this opinion to the date of
the issuance and sale of the Medium- Term Notes; (ii) the genuineness of all
signatures and the authenticity and completeness of all documents submitted to
us as originals; (iii) the due authorization, execution and delivery of the
Indenture by the Trustee; (iv) 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; (v) that the Medium-Term Notes will be duly executed,
authenticated and delivered in accordance with the provisions of the Indenture
and related corporate documents; and (vi) the due receipt of payment of the
purchase price for the Medium-Term Notes.
On the basis of and subject to the foregoing, it is our opinion that
the Medium-Term Notes will, upon issuance and sale thereof in the manner
referred to in the Registration Statement, Prospectus and Prospectus Supplement,
constitute valid and binding obligations of the Company, enforceable against the
Company in accordance with their terms, except as the enforcement thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or similar laws relating to or affecting creditors' rights generally
and by general principles of equity including, without limitation, concepts of
materiality, reasonableness, good faith and fair dealing and the possible
unavailability of specific performance or injunctive relief, regardless of
whether considered in a proceeding in equity or at law, and will be entitled to
the benefits of the Indenture.
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
