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): February 18, 1998
FRANCHISE FINANCE CORPORATION OF AMERICA
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(Exact Name of Registrant as Specified in Its Charter)
Delaware 1-13116 86-0736091
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification Number)
incorporation)
17207 North Perimeter Drive, Scottsdale, AZ 85255
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (602) 585-4500
NONE
----
(Former Name or Former Address, if Change Since Last Report)
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Item 5. Other Events.
(a) On February 18, 1998, the Registrant entered into an Underwriting
Agreement dated February 18, 1998 with A. G. Edwards & Sons, Inc. (the
"Underwriter"), with respect to the issue and sale by the Registrant, and the
purchase by the Underwriter, of an aggregate of 1,258,427 shares of the
Registrant's $.01 par value Common Stock (the "Common Stock"). The Underwriting
Agreement dated February 18, 1998 is attached hereto and referenced as Exhibit
1.01. Kutak Rock as counsel to the Registrant has issued its opinion as to the
legality with respect to the Common Stock. The opinion is attached hereto and
referenced as Exhibit 5.01
(b) On April 21, 1998, the Registrant entered into an Underwriting
Agreement with the Underwriter with respect to the issue and sale by the
Registrant, and the purchase by the Underwriter, of an aggregate of 892,857
shares of the Registrant's Common Stock. The Underwriting Agreement dated April
21, 1998 is attached hereto and referenced as Exhibit 1.02. Kutak Rock as
counsel to the Registrant has issued its opinion as to the legality with respect
to the Common Stock. The opinion is attached hereto and referenced as Exhibit
5.02
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
1.01 Underwriting Agreement dated February 18, 1998
1.02 Underwriting Agreement dated April 21, 1998
5.01 Legal Opinion of Kutak Rock dated February 18, 1998
5.02 Legal Opinion of Kutak Rock dated April 21, 1998
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
FRANCHISE FINANCE CORPORATION OF
AMERICA (Registrant)
Dated: April 27, 1998 By /s/ John Barravecchia
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John Barravecchia,
Executive Vice President
and Chief Financial Officer
Dated: April 27, 1998 By /s/ Catherine F. Long
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Catherine F. Long,
Senior Vice President, Finance and
Principal Accounting Officer
1,258,427 Shares
FRANCHISE FINANCE CORPORATION OF AMERICA
(a Delaware corporation)
Common Stock
UNDERWRITING AGREEMENT
----------------------
February 18, 1998
A.G. Edwards & Sons, Inc.
One North Jefferson
St. Louis, Missouri 63103
Ladies and Gentlemen:
Franchise Finance Corporation of America, a Delaware
corporation (the "Company"), confirms its agreement with A.G. Edwards & Sons,
Inc. (the "Underwriter," which term shall also include any underwriter
substituted as hereinafter provided in Section 10 hereof), with respect to the
sale by the Company and the purchase by the Underwriter of an aggregate of
1,258,427 shares (the "Shares") of common stock, $.01 par value (the "Common
Stock"), of the Company.
The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 (No.
33-62629) relating to the offering from time to time of debt securities, common
stock or preferred stock in accordance with Rule 415 under the Securities Act of
1933, as amended (the "1933 Act") and will file such additional amendments and
supplements thereto as may herein be required. Such registration statement (as
amended) has been declared effective by the Commission. Such registration
statement, and the prospectus constituting a part thereof and each prospectus
supplement relating to the offering of the Shares (including in each case all
documents incorporated or deemed to be incorporated by reference therein, and
the information, if any, deemed to be part thereof pursuant to Rule 434 of the
rules and regulations of the Commission under the 1933 Act (the "1933 Act
Regulations")), as from time to time amended or supplemented pursuant to the
1933 Act, the Securities Exchange Act of 1934, as amended (the "1934 Act"), or
otherwise, are hereinafter referred to as the "Registration Statement" and the
"Prospectus," respectively, except that if any revised prospectus shall be
provided to the Underwriter by the Company for use in connection with the
offering of the Shares which differs from the Prospectus on file (whether or not
such revised prospectus is required to be filed by the Company pursuant to Rule
424(b) of the 1933 Act Regulations), the term "Prospectus" shall refer to such
revised prospectus from and after the time it is first provided to the
Underwriter for such use. All references in this Agreement
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to financial statements and schedules and other information which is
"described," "disclosed," "contained," "included" or "stated" in the
Registration Statement or the Prospectus (and all other references of like
import) shall be deemed to mean and include all such financial statements and
schedules and other information which is or is deemed to be incorporated by
reference in the Registration Statement or the Prospectus, as the case may be;
and all references in this Agreement to amendments or supplements to the
Registration Statement or the Prospectus shall be deemed to mean and include the
filing of any document under the 1934 Act which is or is deemed to be
incorporated by reference in the Registration Statement or the Prospectus, as
the case may be. If the Company elects to rely on Rule 434 under the 1933 Act
Regulations, all references to the Prospectus shall be deemed to include,
without limitation, the form of prospectus and the term sheet, taken together,
provided to the Underwriter by the Company in reliance on Rule 434 under the
1933 Act (the "Rule 434 Prospectus"). If the Company files a registration
statement to register a portion of the Shares and relies on Rule 462(b) for such
registration statement to become effective upon filing with the Commission (the
"Rule 462 Registration Statement"), then any reference to "Registration
Statement" herein shall be deemed to be to both the registration statement
referred to above (No. 33-66269) and the Rule 462 Registration Statement, as
each such registration statement may be amended pursuant to the 1933 Act.
The Company understands that the Underwriter intends to sell
the Shares to Nike Securities L.P. ("Nike"), which intends to deposit the Shares
with the trustee of The Trust, F231 (the "Trust"), a registered unit investment
trust under the Investment Company Act of 1940, as amended. The Underwriter
anticipates participating in the distribution of units of the Trust and will
receive compensation therefor. The Underwriter is not an affiliate of Nike or
the Trust.
SECTION 1. Representations and Warranties.
(a) The Company represents and warrants to the Underwriter as
of the date hereof and as of the Closing Date referred to in Section 2(b)
hereof, and agrees with the Underwriter, as follows:
(i) The Company meets the requirements for use of Form
S-3 under the 1933 Act, and at the respective times the
Registration Statement became effective and any post-effective
amendments thereto become effective and on the date hereof,
the Registration Statement did and will comply in all material
respects with the requirements of the 1933 Act and the 1933
Act Regulations and the 1939 Act and the rules and regulations
of the Commission under the 1939 Act, and did not and will not
contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or
necessary to make the statements therein not misleading. The
Prospectus, on the date hereof (unless the term "Prospectus"
refers to a prospectus which has been provided to the
Underwriter by the Company for use in connection with the
offering of the Shares which differs from the Prospectus on
file at the Commission at the time the Registration Statement
first becomes effective, in which case at the time it is first
provided to the Underwriter for such use), and at the Closing
Date, will not include an untrue statement of a material fact
or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances
under which they were made, not misleading; provided, however,
that the representations and warranties in this
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subsection shall not apply to statements in or omissions from
the Registration Statement or Prospectus made in reliance upon
and in conformity with information furnished to the Company in
writing by the Underwriter expressly for use in the
Registration Statement or Prospectus. For purposes of this
Section l(a), all references to the Registration Statement,
any post-effective amendments thereto and the Prospectus shall
be deemed to include, without limitation, any electronically
transmitted copies thereof, including, without limitation, any
copy filed with the Commission pursuant to its Electronic Data
Gathering, Analysis, and Retrieval system ("EDGAR").
(ii) The accountants who certified the financial
statements and supporting schedules included or incorporated
by reference in the Registration Statement are independent
public accountants as required by the 1933 Act and the 1933
Act Regulations.
(iii) The financial statements included or incorporated
by reference in the Registration Statement and the Prospectus,
together with the related schedule and notes, present fairly
the financial position of the Company and its consolidated
subsidiaries at the dates indicated and the statement of
income, shareholders' equity and cash flows of the Company and
its consolidated subsidiaries for the periods specified;
except as otherwise stated in the Registration Statement, said
financial statements have been prepared in conformity with
generally accepted accounting principles applied on a
consistent basis ("GAAP") throughout the periods involved. The
supporting schedules, if any, included in the Registration
Statement present fairly in accordance with GAAP the
information required to be stated therein. The selected
financial data and the summary financial information included
in the Prospectus present fairly in accordance with GAAP the
information shown therein and have been compiled on a basis
consistent with that of the audited financial statements
included in the Registration Statement. Any pro forma
financial information included in the Prospectus presents
fairly the information shown therein, has been prepared in
accordance with the Commission's rules and guidelines with
respect to pro forma financial statements and has been
properly compiled on the bases described therein, and the
assumptions used in the preparation thereof are reasonable and
the adjustments used therein are appropriate to give effect to
the transactions and circumstances referred to therein.
(iv) Since the respective dates as of which information
is given in the Registration Statement and the Prospectus,
except as otherwise stated therein, (A) there has been no
material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as
one enterprise, whether or not arising in the ordinary course
of business ("Material Adverse Change"), (B) there have been
no transactions entered into by the Company or any of its
subsidiaries, other than those in the ordinary course of
business, which are material with respect to the Company and
its subsidiaries considered as one enterprise, and (C) except
for regular quarterly dividends on the common stock, par value
$.01 per share, of the Company (the "Common Stock") in amounts
per share that are consistent with past practice (including a
quarterly dividend increase of $.02 declared January 30,
1998), there has been no dividend or distribution of any kind
declared, paid or made by the Company on any class of its
capital stock.
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(v) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of
the State of Delaware and has the corporate power and
authority to own, lease and operate its properties and to
conduct its business as described in the Prospectus and to
enter into and perform its obligations under this Agreement;
the Company is duly qualified as a foreign corporation to
transact business and is in good standing in the State of
Arizona and the Company is duly qualified as a foreign
corporation to transact business and is in good standing in
each other jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure
to so qualify or to be in good standing would not, either
singly or in the aggregate, have a material adverse effect on
the condition, financial or otherwise, or the earnings,
business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise (a "Material Adverse
Effect").
(vi) Each subsidiary (as defined below) of the Company
has been duly organized and is validly existing as a
corporation, trust or partnership, as the case may be, in good
standing under the laws of the jurisdiction of its
organization, has the corporate, partnership or other power
and authority, as the case may be, to own, lease and operate
its properties and conduct its business as described in the
Prospectus and is duly qualified as a foreign corporation,
partnership or trust, as the case may be, to transact business
and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership
or leasing of property or the conduct of business, except
where the failure to so qualify or be in good standing would
not, either singly or in the aggregate, have a Material
Adverse Effect; and all of the issued and outstanding capital
stock or other equivalent interests of each such subsidiary
has been duly authorized and validly issued, is fully paid and
non-assessable and, except as stated in the Prospectus, is
owned by the Company, directly or through subsidiaries, free
and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity; none of the outstanding shares
of capital stock or other equivalent interests of the
subsidiaries was issued in violation of the preemptive or
similar rights of any stockholder or other holder of interests
of such subsidiary arising by operation of law, under the
charter, by-laws or other organizational document of any
subsidiary or under any agreement to which the Company or any
subsidiary is a party. The Company does not own, directly or
indirectly through a "qualified REIT subsidiary" (within the
meaning of Section 856(i) of the Internal Revenue Code of
1986, as amended (the "Code")), partnership, limited liability
company, association or other entity, any shares of stock or
any other debt or equity securities of, or other interests in,
any corporation, firm, partnership, limited liability company,
association or other entity, other than (1) stock of a
corporation or equity of an entity that the Company has been
advised by its legal counsel qualifies as a "qualified REIT
subsidiary" within the meaning of Section 856(i) of the Code,
(2) stock or other debt (excluding for this purpose any debt
obligation which constitutes real estate assets within the
meaning of Section 856(c)(5)(B) of the Code) 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
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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).
(vii) The authorized, issued and outstanding capital
stock of the Company is as set forth in the Prospectus (except
for subsequent issuances, if any, pursuant to employee benefit
plans referred to in the Prospectus, pursuant to the exercise
of options referred to in the Prospectus or pursuant to the
Company's dividend reinvestment plan or employee stock
purchase plan), and all of such outstanding shares of capital
stock have been duly authorized and validly issued and are
fully paid and nonassessable and were not issued in violation
of, and are not subject to, preemptive or other similar
rights.
(viii) Neither the Company nor any of its subsidiaries is
(a) in violation of its charter or bylaws, (b) in default in
the performance or observance of any provision of the Second
Amended and Restated Credit Agreement dated as of December 29,
1997 or the Credit Agreement dated as of January 27, 1998, in
each case 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 in the NationsBank Agreement), or (c) in
default in the performance or observance of any obligation,
agreement, covenant or condition contained in any contract,
indenture, mortgage, deed of trust, loan or credit agreement,
note, lease or other agreement or instrument to which the
Company or any of its subsidiaries is a party or by which any
of them may be bound, or to which any of the property or
assets of the Company or any of its subsidiaries is subject,
except for, in the case of (c), any such defaults which would
not, either singly or in the aggregate, have a Material
Adverse Effect; and the execution, delivery and performance of
this Agreement, the issuance of the Shares and the
consummation of the transactions contemplated herein and
compliance by the Company with its obligations hereunder
(including the use of the proceeds from the sale of the Shares
as described in the Prospectus under the caption "Use of
Proceeds") have been duly authorized by all necessary
corporate action and do not and will not, whether with or
without the giving of notice or passage of time or both, (i)
constitute an Event of Default (as defined in the NationsBank
Agreement), (ii) conflict with or constitute a breach of, or
default or Repayment Event (as defined below)
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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.
(ix) There is no existing labor dispute with the
employees of the Company or any of its subsidiaries that would
have, either singly or in the aggregate, a Material Adverse
Effect.
(x) There is no action, suit, proceeding, inquiry or
investigation before or by any court or governmental agency or
body, domestic or foreign, now pending, or, to the knowledge
of the Company, threatened, against or affecting the Company
or any of its subsidiaries, which is required to be disclosed
in the Registration Statement, or which might reasonably be
expected to result in any Material Adverse Change, or which
might reasonably be expected to have a Material Adverse Effect
or materially and adversely affect the consummation of this
Agreement or the performance by the Company of its obligations
hereunder; the aggregate of all pending legal or governmental
proceedings to which the Company or any subsidiary is a party
or of which any of their respective property or assets is the
subject which are not described in the Registration Statement,
including ordinary routine litigation incidental to the
business, could not reasonably be expected to result in a
Material Adverse Change.
(xi) There are no contracts or documents which are
required to be described in the Registration Statement, the
Prospectus or the documents incorporated by reference therein
or to be filed as exhibits thereto by the 1933 Act, the 1933
Act Regulations, the 1934 Act or the rules and regulations of
the Commission under the 1934 Act (the "1934 Act Regulations")
which have not been so described and filed as required.
(xii) To the extent applicable, the Company and its
subsidiaries own or possess, or can acquire on reasonable
terms, the patents, patent rights, licenses, inventions,
copyrights, know-how (including trade secrets and other
unpatented and/or unpatentable proprietary or confidential
information, systems or procedures), trademarks, service marks
and trade names (collectively, "patent and proprietary
rights") presently employed by them in connection with the
business now operated by them, and neither the Company nor any
of its subsidiaries has received any notice or is otherwise
aware of any
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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.
(xiii) No filing with, or authorization, approval,
consent, license, order, registration, qualification or decree
of, any court or governmental authority or agency is necessary
or required in connection with the offering, issuance or sale
of the Shares hereunder or the consummation of the
transactions contemplated by this Agreement, except such as
have already been obtained or as may be required under the
1933 Act or the 1933 Act Regulations or state securities laws.
(xiv) The Company and its subsidiaries possess such
certificates, authorities, permits, licenses, approvals,
consents and other authorizations (collectively, "Governmental
Licenses") issued by the appropriate federal, state, local or
foreign regulatory agencies or bodies necessary to conduct the
business now operated by them, except where the failure to
possess or comply with any such Governmental License would
not, either singly or in the aggregate, have a Material
Adverse Effect; the Company and its subsidiaries are in
compliance with the terms and conditions of all such
Governmental Licenses, except where the failure so to comply
would not, either singly or in the aggregate, have a Material
Adverse Effect; all of the Governmental Licenses are valid and
in full force and effect, except when the invalidity of such
Governmental Licenses or the failure of such Governmental
Licenses to be in full force and effect would not have, either
singly or in the aggregate, a Material Adverse Effect; and
neither the Company nor any of its subsidiaries has received
any notice of proceedings relating to the revocation or
modification of any such Governmental Licenses which, either
singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would have a Material Adverse
Effect.
(xv) This Agreement has been duly authorized, executed
and delivered by the Company.
(xvi) The Shares have been duly authorized for issuance
and sale to the Underwriter pursuant to this Agreement and,
when issued and delivered by the Company pursuant to this
Agreement against payment of the consideration set forth
herein, will be validly issued, fully paid and non-assessable
and the Underwriter will receive valid title to the Shares,
free and clear of all security interests, mortgages, pledges,
liens, encumbrances and claims; the capital stock conforms to
all statements relating thereto contained or incorporated by
reference in the Prospectus and the Registration Statement and
such description conforms to the rights set forth in the
instruments defining the same; and the issuance of the Shares
is not subject to preemptive or other similar rights arising
by operation of law, under the charter and bylaws of the
Company or otherwise. The Shares will conform in all material
respects to the respective statements thereto contained in the
Prospectus.
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(xvii) Except as set forth in the Prospectus, the Company
and its subsidiaries are in compliance in all material
respects with all applicable laws, statutes, ordinances, rules
or regulations, the violation of which, either singly or in
the aggregate, would be reasonably expected to have a Material
Adverse Effect.
(xviii) Except as otherwise disclosed in the Prospectus:
(i) the Company and its subsidiaries have good and marketable
title to all properties and assets (or a valid first lien as
to mortgaged properties) described in the Prospectus as being
owned (or mortgaged) by them, or reflected in the most recent
consolidated balance sheet of the Company contained in the
Prospectus, except as would not, either singly or in the
aggregate, have a Material Adverse Effect; (ii) all liens,
charges, claims, restrictions or encumbrances on or affecting
the properties and assets of the Company or any of its
subsidiaries which are required to be disclosed in the
Prospectus are disclosed therein; (iii) no person or entity,
other than tenants under the leases or guarantors thereof
pursuant to which the Company and its subsidiaries lease all
or a portion of their properties, has an option or right of
first refusal or any other right to purchase any of such
properties (other than in connection with any synthetic lease
transaction); (iv) each of the properties of the Company and
its subsidiaries, at the time such property was acquired or at
the time the loan by the Company with respect to such property
was made, had access to public rights of way, either directly
or through insured easements, except as would not, either
singly or in the aggregate, have a Material Adverse Effect;
(v) each of such properties, at the time such property was
acquired or at the time the loan by the Company with respect
to such property was made, was served by all public utilities
necessary for the current operations on such property in
sufficient quantities for such operations, except as would
not, either singly or in the aggregate, have a Material
Adverse Effect; (vi) each of such properties complies with all
applicable codes and zoning and subdivision laws and
regulations, except for such failures to comply which would
not, either singly or in the aggregate, have a Material
Adverse Effect; (vii) the real property leases and equipment
leases, if any, relating to each of such properties are in
full force and effect, except where the failure to be in full
force and effect would not, singly or in the aggregate, have a
Material Adverse Effect; and (viii) there is no pending or
threatened condemnation, zoning change, or other proceeding or
action that will in any manner affect the size of, use of,
improvements on, construction on or access to the properties
of the Company and its subsidiaries, except such proceedings
or actions which would not, either singly or in the aggregate,
have a Material Adverse Effect.
(xix) The Company has complied with, and is and will be
in compliance with, the provisions of that certain Florida act
relating to disclosure of doing business with Cuba, codified
as Section 517.075 of the Florida statutes, and the rules and
regulations thereunder (collectively, the "Cuba Act") or is
exempt therefrom.
(xx) The Company is not, and upon the issuance and sale
of the Shares as herein contemplated and the application of
the net proceeds therefrom as described in the Prospectus
under the caption "Use of Proceeds" will not be, an
"investment company" or an entity "controlled" by an
"investment company" as such terms are defined in the
Investment Company Act of 1940, as amended (the "1940 Act").
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(xxi) Except as described in the Registration Statement,
(A) neither the Company nor any of its subsidiaries is in
violation of any federal, state, local or foreign 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 the 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 (B) there are no events or
circumstances that could form the basis of an order for
clean-up or remediation, or an action, suit or proceeding by
any private party or governmental body or agency, against or
affecting the Company or any of its subsidiaries relating to
any Hazardous Materials or the violation of any Environmental
Laws, which, either singly or in the aggregate, would have a
Material Adverse Effect.
(xxii) The documents incorporated or deemed to be
incorporated by reference in the Prospectus, when they became
effective or at the time they were or hereafter are filed with
the Commission, complied and will comply in all material
respects with the requirements of the 1933 Act or the 1934
Act, as applicable, and the rules and regulations of the
Commission thereunder, and, when read together with the other
information in the Prospectus, at the time the Registration
Statement and any post-effective amendments thereto become
effective and on the Closing Date, will not contain an untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under
which they were made, not misleading.
(xxiii) The Company and its subsidiaries have filed all
federal, state, local and foreign tax returns that are
required to be filed or have duly requested extensions thereof
and have paid all taxes required to be paid by any of them and
any related assessments, fines or penalties, except for any
such tax, assessment, fine or penalty that is being contested
in good faith and by appropriate proceedings; and adequate
charges, accruals and reserves have been provided for in the
financial statements referred to in Section 1(a)(iii) above in
respect of all federal, state, local and foreign taxes for all
periods as to which the tax liability of the Company or any of
its subsidiaries has not been finally determined or remains
open to examination by applicable taxing authorities.
(xxiv) The Company and its subsidiaries maintain a system
of internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in
accordance with management's general and specific
authorizations; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with
GAAP and to maintain accountability for assets; (iii) access
to assets is permitted only in accordance with management's
general or specific authorizations; and (iv) the recorded
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accountability for assets is compared with the existing assets
at reasonable intervals and appropriate action is taken with
respect to any differences.
(xxv) The Company and its subsidiaries have not (i)
taken, directly or indirectly, any action designed to cause or
to result in, or that has constituted or which might
reasonably be expected to constitute, the stabilization or
manipulation of the price of any security of the Company to
facilitate the sale or resale of the Shares or (ii) since the
initial filing of the Registration Statement (A) sold, bid
for, purchased or paid anyone (other than, to the extent
applicable, payments made by the Company pursuant to the terms
of, and in accordance with, the Company's dividend
reinvestment plan and employee stock purchase plan) any
compensation for soliciting purchases of, the Shares, or (B)
paid or agreed to pay to any person any compensation for
soliciting another to purchase any other securities of the
Company.
(xxvi) No relationship, direct or indirect, exists
between or among any of the Company or any affiliate of the
Company, on the one hand, and any director, officer,
stockholder, customer or supplier of any of them, on the other
hand, which is required by the 1933 Act or by the 1933 Act
Regulations to be described in the Registration Statement or
the Prospectus which is not so described or is not described
as required.
(xxvii) The Company has not distributed and, prior to the
later to occur of (i) the Closing Date and (ii) completion of
the distribution of the Shares, will not distribute any
prospectus (as such term is defined in the 1933 Act and the
1933 Act Regulations) in connection with the offering and sale
of the Shares other than the Registration Statement, any
preliminary prospectus, the Prospectus or other materials, if
any, permitted by the 1933 Act or by the 1933 Act Regulations
and approved by the Underwriter.
(xxviii) The Company has been and is organized in
conformity with the requirements for qualification and
taxation as a real estate investment trust ("REIT") under the
Internal Revenue Code of 1986, as amended (the "Code"), and
its methods of operation have at all times enabled, and its
proposed methods of operation will enable, the Company to
qualify as a REIT under the Code.
(xxix) The Company and each of its subsidiaries has title
insurance on all real property described in the Prospectus as
being owned (or held under a ground lease) or financed by any
of them in an amount at least equal to the cost of acquisition
of such property or the original principal amount of the loan
provided by any of them, as the case may be, and each such
property is insured by extended coverage hazard and casualty
insurance in an amount not less than 90% of the full
replacement cost of the improvements located thereon
(exclusive of excavation and foundations), except for such
properties which are covered by insurance in an amount less
than 90%, the total loss of which would not have, either
singly or in the aggregate, a Material Adverse Effect, and
there are in effect for such properties and assets insurance
policies covering risks and in amounts that are commercially
reasonable for such types of properties and assets and that
are consistent with the types and amounts of insurance
typically maintained by prudent owners of similar properties
or assets or required by commercial lenders with respect to
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similar properties or assets and all such insurance is in full
force and effect, and to the extent any of such properties are
insured with rental guaranty insurance, such insurance is in
full force and effect and the Company is named as an insured
on all policies required under the leases for such properties.
(xxx) Each of FFCA Acquisition Corporation, FFCA
Institutional Advisors, Inc., FFCA Secured Assets Corporation,
FFCA Residual Interest Corporation and FFCA Secured Lending
Corporation has been (at all times during the period each such
corporation has been in existence) and will be an association
taxable as a corporation for federal income tax purposes and
the Company has owned 100% of the stock of each such
corporation at all times during the period each such
corporation has been in existence and FFCA Secured Franchise
Loan Trust 1997-1 has been a trust.
(xxxi) FFCA Co-Investment Limited Partnership has been
(at all times on and after June 1, 1994) and will be treated
as a partnership, rather than an association taxable as a
corporation or publicly traded partnership, for federal income
tax purposes.
(xxxii) No holder of any security of the Company or other
person has any right to require registration of shares of
Common Stock or any other security of the Company because of
the filing of the registration statement or consummation of
the transactions contemplated by this Agreement.
(b) Any certificate signed by any officer of the Company and
delivered to the Underwriter or to counsel for the Underwriter shall be deemed a
representation and warranty by the Company to the Underwriter as to the matters
covered thereby.
SECTION 2. Sale and Delivery to Underwriter; Closing.
(a) On the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, the Company
agrees to sell to the Underwriter, and the Underwriter agrees to purchase from
the Company, the Shares at a purchase price of $26.4225 per share.
(b) Payment of the purchase price for, and delivery of
certificates for, the Shares shall be made at the office of Franchise Finance
Corporation of America, 17207 North Perimeter Drive, Scottsdale, Arizona, or at
such other place as shall be agreed upon by the Underwriter and the Company, at
10:00 A.M., New York City time, on the third business day (unless postponed in
accordance with the provisions of Section 10) following the date after execution
of this Agreement, or such other time not later than ten business days after
such date as shall be agreed upon by the Underwriter and the Company (such time
and date of payment and delivery being herein called "Closing Date"). Payment
shall be made to the Company in immediately available funds against delivery to
the Underwriter for the account of the Underwriter of certificates for the
Shares to be purchased by the Underwriter. Certificates for the Shares shall be
in such denominations and registered in such names as the Underwriter may
request in writing at least one business day before the Closing Date. The
certificates for the Shares will be made available for examination and packaging
by the Underwriter in The City of New York not later than 3:00 P.M. on the last
business day prior to the Closing Date.
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SECTION 3. Covenants of the Company. The Company covenants
with the Underwriter as follows:
(a) Promptly following the execution of this Agreement,
the Company will prepare a prospectus supplement setting forth
the terms of such Shares not otherwise specified in the
Prospectus, the price at which the Shares are to be purchased
by the Underwriter from the Company, and such other
information as you and the Company deem appropriate in
connection with the offering of the Shares. The Company will
promptly transmit copies of the prospectus supplement to the
Commission for filing pursuant to Rule 424(b) of the 1933 Act
Regulations and will furnish to the Underwriter as many copies
of the Prospectus and such prospectus supplement as the
Underwriter shall reasonably request.
(b) The Company will notify the Underwriter immediately,
and confirm the notice in writing, (i) of the effectiveness of
any amendment to the Registration Statement, or when any
supplement to the Prospectus or any amended Prospectus shall
have been filed, (ii) of the receipt of any comments from the
Commission, (iii) of any request by the Commission for any
amendment to the Registration Statement or any amendment or
supplement to the Prospectus or for additional information,
and (iv) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or
of any order preventing or suspending the use of any
preliminary prospectus supplement, or of the suspension of the
qualification of the Shares for offering or sale in any
jurisdiction, or of the initiation or threatening of any
proceedings for any of such purposes. The Company will make
every reasonable effort to prevent the issuance of any stop
order and, if any stop order is issued, to obtain the lifting
thereof at the earliest possible moment. If the Company elects
to rely on Rule 434, the Company will provide the Underwriter
with copies of the form of Rule 434 Prospectus, in such number
as the Underwriter may reasonably request, and file or
transmit for filing with the Commission the form of Prospectus
complying with Rule 434(c)(2) of the 1933 Act in accordance
with Rule 424(b) of the 1933 Act by the close of business in
New York on the business day immediately succeeding the date
of this Agreement.
(c) At any time when the Prospectus is required to be
delivered under the 1933 Act or the 1934 Act in connection
with sales of the Shares, the Company will give the
Underwriter notice of its intention to file or prepare any
amendment to the Registration Statement (including any
post-effective amendment) or any amendment or supplement to
the Prospectus, whether pursuant to the 1933 Act, the 1934 Act
or otherwise (including any revised prospectus which the
Company proposes for use by the Underwriter in connection with
the offering of the Shares which differs from the prospectus
on file at the Commission at the time the Registration
Statement first becomes effective, whether or not such revised
prospectus is required to be filed pursuant to Rule 424(b) of
the 1933 Act Regulations or any term sheet prepared in
reliance on Rule 434 of the 1933 Act Regulations), will
furnish the Underwriter with copies of any such amendment or
supplement a reasonable amount of time prior to such proposed
filing or use, as the case may be, and will not file any such
amendment or supplement or use any such prospectus to which
the Underwriter or counsel for the Underwriter shall
reasonably object.
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(d) The Company has furnished or will deliver to the
Underwriter and counsel for the Underwriter, without charge,
signed copies of the Registration Statement as originally
filed and of each amendment thereto (including exhibits filed
therewith or incorporated by reference therein and documents
incorporated or deemed to be incorporated by reference
therein) and signed copies of all consents and certificates of
experts, and will also deliver to the Underwriter a conformed
copy of the Registration Statement as originally filed and of
each amendment thereto (without exhibits) for the Underwriter.
(e) The Company will furnish to the Underwriter, without
charge, from time to time during the period when the
Prospectus is required to be delivered under the 1933 Act or
the 1934 Act, such number of copies of the Prospectus (as
amended or supplemented) as the Underwriter may reasonably
request for the purposes contemplated by the 1933 Act or the
1934 Act or the respective applicable rules and regulations of
the Commission thereunder.
(f) If any event shall occur or condition shall exist as
a result of which it is necessary, in the opinion of counsel
for the Underwriter or for the Company, to amend the
Registration Statement or amend or supplement the Prospectus
in order that the Prospectus will not include any untrue
statements of a material fact or omit to state a material fact
necessary in order to make the statements therein not
misleading in the light of the circumstances existing at the
time it is delivered to a purchaser, or if it shall be
necessary, in the opinion of such counsel, at any such time to
amend the Registration Statement or amend or supplement the
Prospectus in order to comply with the requirements of the
1933 Act or the 1933 Act Regulations, the Company will
promptly prepare and file with the Commission, subject to
Section 3(b), such amendment or supplement as may be necessary
to correct such statement or omission or to make the
Registration Statement or the Prospectus comply with such
requirements, and the Company will furnish to the Underwriter
such number of copies of such amendment or supplement as the
Underwriter may reasonably request.
(g) The Company will use its best efforts, in cooperation
with the Underwriter, to qualify the Shares for offering and
sale under the applicable securities laws of such states and
other jurisdictions of the United States as the Underwriter
may designate and to maintain such qualifications in effect
for a period of not less than one year from the effective date
of the Registration Statement; provided, however, that the
Company shall not be obligated to file any general consent to
service of process or to qualify as a foreign corporation or
as a dealer in securities in any jurisdiction in which it is
not so qualified or to subject itself to taxation in respect
of doing business in any jurisdiction in which it is not
otherwise so subject. In each jurisdiction in which the Shares
have been so qualified, the Company will file such statements
and reports as may be required by the laws of such
jurisdiction to continue such qualification in effect for a
period of not less than one year from the effective date of
the Registration Statement.
(h) The Company will make generally available to its
security holders as soon as practicable, but not later than 90
days after the close of the period covered thereby, an
earnings statement (in form complying with the provisions of
Rule 158 of the 1933
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Act Regulations) covering a twelve month period beginning not
later than the first day of the Company's fiscal quarter next
following the "effective date" (as defined in said Rule 158)
of the Registration Statement.
(i) In accordance with the Cuba Act and without
limitation to the provisions of Sections 6 and 7 hereof, the
Company agrees to indemnify and hold harmless the Underwriter
from and against any and all loss, liability, claim, damage
and expense whatsoever (including fees and disbursements of
counsel), as incurred, arising out of any violation by the
Company of the Cuba Act.
(j) The Company will use the net proceeds received by it
from the sale of the Shares in the manner specified in the
Prospectus under "Use of Proceeds."
(k) The Company, during the period when the Prospectus,
is required to be delivered under the 1933 Act or the 1934
Act, will file all documents required to be filed with the
Commission pursuant to the 1934 Act within the time periods
required by the 1934 Act and the 1934 Act Regulations.
(l) Except as stated in this Agreement and in the
Prospectus, the Company has not taken, nor will it take,
directly or indirectly, any action designed to or that might
reasonably be expected to cause or result in stabilization or
manipulation of the price of the Common Stock to facilitate
the sale or resale of the Shares.
(m) The Company will use its best efforts to have the
shares of Common Stock which it agrees to sell under this
Agreement listed, subject to notice of issuance, on the New
York Stock Exchange on or before the Closing Date.
SECTION 4. Payment of Expenses. The Company will pay all
expenses incident to the performance of its obligations under this Agreement,
including (i) the printing and filing of the Registration Statement as
originally filed and of each amendment thereto, (ii) the preparation, printing
and delivery to the Underwriter of this Agreement and such other documents as
may be required in connection with the offering, purchase, sale and delivery of
the Shares, (iii) the preparation, issuance and delivery of the certificates for
the Shares to the Underwriter, (iv) the fees and disbursements of the Company's
counsel, accountants and other advisors, (v) the qualification of the Shares
under securities laws in accordance with the provisions of Section 3(g) hereof,
including filing fees and the reasonable fees and disbursements of counsel for
the Underwriter in connection therewith and in connection with the preparation
of any Blue Sky Survey, any supplement thereto and any Legal Investment Survey,
(vi) the printing and delivery to the Underwriter of copies of the Prospectus
and any amendments or supplements thereto including any term sheet delivered by
the Company pursuant to Rule 434 of the 1933 Act Regulations, (vii) the
preparation, printing and delivery to the Underwriter of any Blue Sky Survey,
any supplement thereto and any Legal Investment Survey, (viii) the fee of any
filing for review of the offering with the National Association of Securities
Dealers, Inc., if any, including the fees and expenses of counsel for the
Underwriter in connection therewith, and (ix) the fees and expenses incurred in
connection with the listing of the Shares on the New York Stock Exchange.
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If this Agreement is terminated by the Underwriter in
accordance with the provisions of Section 5 or Section 9(a)(i) hereof, the
Company shall reimburse the Underwriter for all of its out-of-pocket expenses,
including the reasonable fees and disbursements of counsel for the Underwriter.
SECTION 5. Conditions of Underwriter's Obligations. The
obligations of the Underwriter hereunder are subject to the accuracy of the
representations and warranties of the Company herein contained, to the
performance by the Company of its obligations hereunder and to the following
further conditions:
(a) The Registration Statement shall be effective prior
to the date hereof, and at the Closing Date no stop order
suspending the effectiveness of the Registration Statement
shall have been issued under the 1933 Act or proceedings
therefor initiated or threatened by the Commission, and any
request on the part of the Commission for additional
information shall have been complied with to the reasonable
satisfaction of counsel to the Underwriter. A prospectus
supplement shall have been transmitted to the Commission for
filing in accordance with Rule 424(b) of the 1933 Act
Regulations within the prescribed time period and prior to
Closing Date the Company shall have provided evidence
satisfactory to the Underwriter of such timely filing, or a
post-effective amendment providing such information shall have
been promptly filed and declared effective in accordance with
the requirements of the 1933 Act Regulations. The Indenture
shall have been qualified under the 1939 Act.
(b) At the Closing Date the Underwriter shall have
received:
(1) The favorable opinion, dated as of the Closing
Date, of Kutak Rock, counsel for the Company, in form and
substance satisfactory to counsel for the Underwriter, to
the effect that:
(i) The Company has been duly incorporated and
is validly existing as a corporation in good standing
under the laws of the State of Delaware.
(ii) The Company has the corporate power and
authority to own, lease and operate its properties
and to conduct its business as described in the
Registration Statement.
(iii) The Company is duly qualified as a foreign
corporation to transact business and is in good
standing in Arizona and in each other jurisdiction in
which such qualification is required, whether by
reason of the ownership or leasing of property or the
conduct of business, except in the case of
jurisdictions other than Arizona, where the failure
to so qualify or to be in good standing would not,
either singly or in the aggregate, have a Material
Adverse Effect.
(iv) The authorized, issued and outstanding
capital stock of the Company is as set forth in the
Prospectus (except for subsequent
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issuances, if any, pursuant to employee benefit plans
referred to in the Prospectus, pursuant to the
exercise of options referred to in the Prospectus or
pursuant to the Company's dividend reinvestment plan
and employee stock purchase plan) and all of such
outstanding shares of capital stock have been duly
authorized and validly issued and are fully paid and
nonassessable.
(v) Each subsidiary of the Company has been duly
organized and is validly existing as a corporation,
trust or partnership, as the case may be, in good
standing under the laws of the jurisdiction of its
organization, has the corporate, trust or partnership
power, as the case may be, and authority to own,
lease and operate its properties and to conduct its
business as described in the Registration Statement
and is duly qualified as a foreign corporation, trust
or partnership, as the case may be, to transact
business and is in good standing in each jurisdiction
in which such qualification is required, whether by
reason of the ownership or leasing of property or the
conduct of its business, except where the failure to
so qualify or to be in good standing would not,
either singly or in the aggregate, have a Material
Adverse Effect; all of the issued and outstanding
capital stock or other equivalent interests of each
such subsidiary has been duly authorized and validly
issued, is fully paid and non-assessable and, to the
best of their knowledge and information, except as
stated in the Prospectus, is owned directly by the
Company, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity.
(vi) The Company has the corporate power and
authority to enter into this Agreement and to issue,
sell and deliver the Shares to the Underwriter as
provided herein, and this Agreement has been duly
authorized, executed and delivered by the Company.
(vii) The Shares have been duly authorized for
issuance and sale to the Underwriter pursuant to this
Agreement and, when issued and delivered by the
Company to the Underwriter pursuant to this Agreement
against payment therefor in accordance with the terms
hereof, the consideration set forth herein, will be
validly issued, fully paid and non-assessable.
(viii) The Shares, when issued and delivered by
the Company pursuant to this Agreement against
payment therefor in accordance with the terms hereof,
will be free of any preemptive or similar rights
arising by operation of law or under the charter or
bylaws of the Company or, to such counsel's
knowledge, otherwise.
(ix) As of the date of such counsel's opinion,
there are, including the Shares to be issued to the
Underwriter, 1,258,427 shares of Common Stock, as may
be adjusted for shares issued pursuant to the
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dividend reinvestment plan and employee stock
purchase plan and no shares of Preferred Stock
outstanding.
(x) The Shares conform in all material respects
to the descriptions thereof contained in the
Prospectus.
(xi) The Registration Statement has been
declared effective under the 1933 Act; any required
filing of the Prospectus pursuant to Rule 424(b) has
been made in the manner and within the time period
required by Rule 424(b); and, to the best of their
knowledge and information, no stop order suspending
the effectiveness of the Registration Statement has
been issued under the 1933 Act or proceedings
therefor initiated or threatened by the Commission.
(xii) The Registration Statement, the Prospectus
and each amendment or supplement to the Registration
Statement and Prospectus, as of their respective
effective or issue dates (other than the financial
statements and schedules and other financial or
statistical data included or incorporated by
reference therein, as to which no opinion need be
rendered) complied as to form in all material
respects with the requirements of the 1933 Act and
the 1933 Act Regulations.
(xiii) To the best of such counsel's knowledge
and information, there is not pending, and the
Company has not received any notice of any
threatened, action, suit, proceeding, inquiry or
investigation, to which the Company or any of its
subsidiaries is a party, or to which the property of
the Company or any of its subsidiaries is subject,
before or brought by any court or governmental agency
or body, which might reasonably be expected to result
in any Material Adverse Change, or which might
reasonably be expected to materially and adversely
affect the properties or assets thereof or the
consummation of this Agreement or the performance by
the Company of its obligations hereunder; and all
pending legal or governmental proceedings to which
the Company or any of its subsidiaries is a party or
that affect any of their respective properties that
are not described in the Prospectus, including
ordinary routine litigation incidental to the
business, could not reasonably be expected to result
in a Material Adverse Change.
(xiv) The information in the Prospectus under
"Certain Federal Income Tax Considerations,"
"Restrictions on Transfers of Capital Stock,"
"Description of Preferred Stock" and "Description of
Common Stock" and in the Registration Statement under
Item 15 of Part II thereof, to the extent that it
constitutes matters of law, summaries of legal
matters, documents or proceedings, or legal
conclusions, has been reviewed by them and is correct
in all material respects; to the best of such
counsel's knowledge, there are no statutes or
regulations, and no legal or governmental actions,
suits or proceedings pending or threatened against
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the Company that are required to be described in the
Prospectus that are not described as required and the
opinion of such firm set forth under "Certain Federal
Income Tax Considerations" is confirmed.
(xv) All descriptions in the Prospectus of
contracts and other documents to which the Company or
its subsidiaries are a party are accurate in all
material respects; to the best of their knowledge and
information, there are no franchises, contracts,
indentures, mortgages, loan agreements, notes, leases
or other instruments required to be described or
referred to in the Registration Statement or to be
filed as exhibits thereto other than those described
or referred to therein or filed or incorporated by
reference as exhibits thereto, the descriptions
thereof or references thereto are correct in all
material respects, and, to the best of their
knowledge or information, no default exists in the
due performance or observance of any material
obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, loan
agreement, note, lease or other instrument so
described, referred to, filed or incorporated by
reference.
(xvi) No authorization, approval, consent or
order of any court or governmental authority or
agency (other than under the 1933 Act and the 1933
Act Regulations, which have been obtained, or as may
be required under the securities or blue sky laws of
the various states) is required in connection with
the due authorization, execution and delivery of this
Agreement or for the offering, issuance or sale of
the Shares to the Underwriter; and the execution,
delivery and performance of this Agreement, the
issuance of the Shares and the consummation of the
transactions contemplated herein and compliance by
the Company with its obligations hereunder (including
the use of the proceeds from the sale of the Shares
as described in the Prospectus under the caption "Use
Of Proceeds") will not, whether with or without the
giving of notice or lapse of time or both, conflict
with or constitute a breach of, or default or
Repayment Event under or result in the creation or
imposition of any lien, charge or encumbrance upon
any property or assets of the Company or any of its
subsidiaries pursuant to (A) the NationsBank
Agreement or (B) to the best of their knowledge and
information, any other contract, indenture, mortgage,
deed of trust, loan or credit agreement, note, lease
or any other agreement or instrument to which the
Company or any of its subsidiaries is a party or by
which it or any of them may be bound, or to which any
of the property or assets of the Company or any of
its subsidiaries is subject except for any such
conflict, breach, default or Repayment Event which
would not, either singly or in the aggregate, have a
Material Adverse Effect, nor will such action result
in any violation of the provisions of the charter or
by-laws of the Company, or any applicable law,
statute, rule, regulation, judgment, order, writ or
decree of any government, government instrumentality
or court, domestic or foreign,
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having jurisdiction over the Company or any of its
subsidiaries or any of their respective properties,
assets or operations.
(xvii) The documents incorporated by reference
in the Prospectus (other than the financial
statements and schedules and other financial or
statistical data included or incorporated by
reference therein, as to which no opinion need be
rendered), when they became effective or were filed
with the Commission, as the case may be, complied as
to form in all material respects with the
requirements of the 1933 Act or the 1934 Act, as
applicable, and the rules and regulations of the
Commission thereunder.
(xviii) The Company is not an "investment
company" or an entity "controlled" by an "investment
company," as such terms are defined in the 1940 Act.
(xix) To the best of such counsel's knowledge,
neither the Company nor its subsidiaries are in
violation of their charter or bylaws; and the Company
and its subsidiaries are in compliance with all laws,
rules, regulations, judgments, decrees, orders and
statutes in the jurisdictions in which they are
conducting their business.
(xx) Begining with its taxable year ending
December 31, 1994, the Company has been and is
organized in conformity with the requirements for
qualification and taxation as a REIT under the Code
and its methods of operation have at all times
enabled, and its proposed methods of operation
described in the Registration Statement will enable,
the Company to qualify as a REIT under the Code.
(xxi) Each of FFCA Acquisition Corporation, FFCA
Institutional Advisors, Inc., FFCA Residual Interest
Corporation, FFCA Secured Assets Corporation and FFCA
Secured Lending Corporation has been (at all times
during the period each such corporation has been in
existence) and will be treated as a "qualified REIT
subsidiary" under Section 856(i) of the Code.
(xxii) FFCA Co-Investment Limited Partnership
has been (at all times on and after June 1, 1994) and
will be treated as a partnership, rather than an
association taxable as a corporation or publicly
traded partnership, for federal income tax purposes.
(xxiii) To the best of such counsel's knowledge,
no holder of any security of the Company or any other
person has any right to require registration of
shares of Common Stock or any other security of the
Company because of the filing of the Registration
Statement or consummation of the transactions
contemplated by this Agreement.
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(xxiv) To the best of such counsel's knowledge,
except as described in the Prospectus, there are no
outstanding options, warrants or other rights calling
for the issuance of any shares of capital stock of
the Company or any security convertible into or
exchangeable or exercisable for capital stock of the
Company.
(xxv) The form of certificates for the Shares
conforms to the requirements of the Delaware General
Corporation Law.
Such opinion shall be to such further effect with
respect to legal matters relating to this Agreement and the
sale of the Shares as counsel to the Underwriter may
reasonably request. In rendering such opinion, such counsel
may rely as to matters of fact (but not as to legal
conclusions), to the extent they deem proper, on certificates
of responsible officers of the Company and public officials.
Such opinion shall not state that it is to be governed or
qualified by, or that it is otherwise subject to, any
treatise, written policy or other document relating to legal
opinions, including, without limitation, the Legal Opinion
Accord of the ABA Section of Business Law (1991).
(2) The favorable opinion, dated as of the Closing
Date, of Latham & Watkins, counsel for the Underwriter, with
respect to the matters set forth in clauses (i), (vi), (vii),
(viii) (with respect to rights arising by operation of law or
under the charter or bylaws of the Company), (xi) and (xii),
inclusive, of subsection (b)(1) of this Section, except that,
with respect to the matters referred to in (xii), no opinion
need be expressed as to the documents incorporated by
reference in the Registration Statement.
(3) In giving their opinions required by subsections
(b)(1) and (b)(2), respectively, of this Section, Kutak Rock
and Latham & Watkins shall each additionally state that
nothing has come to their attention that led them to believe
that the Registration Statement (except for financial
statements and schedules and other financial or statistical
data included or incorporated by reference therein and the
Form T-1, as to which such counsel need make no statement), at
the time it became effective or on the date hereof, contained
an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to
make the statements therein not misleading or that the
Prospectus (except for financial statements and schedules and
other financial or statistical data included or incorporated
by reference therein, as to which such counsel need make no
statement), on the date hereof (unless the term "Prospectus"
refers to a prospectus which has been provided to the
Underwriter by the Company for use in connection with the
offering of the Shares which differs from the Prospectus on
file at the Commission at the time the Registration Statement
becomes effective, in which case at the date of such
prospectus), or at the Closing Date, 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.
<PAGE>
(c) At the Closing Date there shall not have been, since
the date hereof or since the respective dates as of which
information is given in the Prospectus, any Material Adverse
Change, whether or not arising in the ordinary course of
business, and the Underwriter shall have received a
certificate of the President or a Vice President of the
Company and of the chief financial or chief accounting officer
of the Company, dated as of the Closing Date, to the effect
that (i) there has been no such Material Adverse Change, (ii)
the representations and warranties in Section 1 hereof are
true and correct with the same force and effect as though
expressly made at and as of Closing Date, (iii) the Company
has complied with all agreements and satisfied all conditions
on its part to be performed or satisfied at or prior to
Closing Date, and (iv) no stop order suspending the
effectiveness of the Registration Statement has been issued
and no proceedings for that purpose have been initiated or
threatened by the Commission. As used in this Section 5(c) the
term "Prospectus" means the Prospectus in the form first used
by the Underwriter to confirm sales of the Shares.
(d) At the time of the execution of this Agreement, the
Underwriter shall have received from Arthur Andersen LLP a
letter dated such date, in form and substance satisfactory to
the Underwriter, containing statements and information of the
type ordinarily included in accountants' "comfort letters" to
underwriters with respect to the financial statements and
certain financial information contained in the Registration
Statement.
(e) At the Closing Date the Underwriter shall have
received from Arthur Andersen LLP a letter, dated as of the
Closing Date, to the effect that they reaffirm the statements
made in the letter furnished pursuant to subsection (d) of
this Section, except that the specified date referred to shall
be a date not more than three days prior to the Closing Date.
(f) At the Closing Date, the Shares shall have been
approved for listing on the New York Stock Exchange, subject
only to official notice of issuance.
(g) At the Closing Date, counsel for the Underwriter
shall have been furnished with such documents and opinions as
they may require for the purpose of enabling them to pass upon
the issuance and sale of the Shares as herein contemplated and
related proceedings, or in order to evidence the accuracy of
any of the representations or warranties, or the fulfillment
of any of the conditions, herein contained; and all
proceedings taken by the Company in connection with the
issuance and sale of the Shares as herein contemplated shall
be satisfactory in form and substance to the Underwriter and
counsel for the Underwriter.
If any condition specified in this Section shall not have been
fulfilled when and as required to be fulfilled, this Agreement may be terminated
by the Underwriter by notice to the Company at any time at or prior to the
Closing Date, and such termination shall be without liability of any party to
any other party except as provided in Section 4 and except that Sections 3(k), 6
and 7 shall survive any such termination and remain in full force and effect.
21
<PAGE>
SECTION 6. Indemnification.
(a) The Company agrees to indemnify and hold harmless the
Underwriter and each person, if any, who controls the Underwriter within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, arising out of any untrue
statement or alleged untrue statement of a material fact
contained in the Registration Statement (or any amendment
thereto), including the information deemed to be part of the
Registration Statement pursuant to Rule 434 of the 1933 Act
Regulations, if applicable, or the omission or alleged
omission therefrom of a material fact required to be stated
therein or necessary to make the statements therein not
misleading or arising out of any untrue statement or alleged
untrue statement of a material fact contained in the
Prospectus (or any amendment or supplement thereto), or the
omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading;
(ii) against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, to the extent of the
aggregate amount paid in settlement of any litigation, or any
investigation or proceeding by any governmental agency or
body, commenced or threatened, or of any claim whatsoever
based upon any such untrue statement or omission, or any such
alleged untrue statement or omission; provided that (subject
to Section 6(d) below) any such settlement is effected with
the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred
(including, subject to the third sentence of Section 6(c)
hereof, the reasonable fees and disbursements of counsel
chosen by the Underwriter), reasonably incurred in
investigating, preparing or defending against any litigation,
or any investigation or proceeding by any governmental agency
or body, commenced or threatened, or any claim whatsoever
based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, to the extent that any
such expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by the
Underwriter expressly for use in the Registration Statement (or any amendment
thereto) or any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto).
(b) The Underwriter agrees to indemnify and hold harmless the
Company, its directors, each of its officers who signed the Registration
Statement, and each person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act against any and all
loss, liability, claim, damage and expense described in the indemnity contained
in subsection (a) of this Section, as incurred, but only with respect to untrue
statements or omissions, or alleged untrue statements or omissions, made in the
Registration
22
<PAGE>
Statement (or any amendment thereto) or the Prospectus (or any amendment or
supplement thereto) in reliance upon and in conformity with written information
furnished to the Company by the Underwriter expressly for use in the
Registration Statement (or any amendment thereto) or the Prospectus (or any
amendment or supplement thereto).
(c) Each indemnified party shall give notice as promptly as
reasonably practicable to each indemnifying party of any action commenced
against it in respect of which indemnity may be sought hereunder, but failure to
so notify an indemnifying party shall not relieve such indemnifying party from
any liability which it may have otherwise than on account of this indemnity
agreement. An indemnifying party may participate at its own expense in the
defense of any such action; provided, however, that counsel to the indemnifying
party shall not (except with the consent of the indemnified party) be counsel to
the indemnified party. In no event shall the indemnifying parties be liable for
fees and expenses of more than one counsel (in addition to any local counsel)
separate from their own counsel for all indemnified parties in connection with
any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances. No
indemnifying party shall, without the prior written consent of the indemnified
parties, settle or compromise or consent to the entry of any judgment with
respect to any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever in
respect of which indemnification or contribution could be sought under this
Section 6 or Section 7 hereof (whether or not the indemnified parties are actual
or potential parties thereto), unless such settlement, compromise or consent (i)
includes an unconditional release of each indemnified party from all liability
arising out of such litigation, investigation, proceeding or claim and (ii) does
not include a statement as to or an admission of fault, culpability or a failure
to act by or on behalf of any indemnified party.
(d) If at any time an indemnified party shall have requested
an indemnifying party to reimburse the indemnified party for fees and expenses
of counsel, such indemnifying party agrees that it shall be liable for any
settlement of the nature contemplated by Section 6(a)(ii) effected without its
written consent if (i) such settlement is entered into more than 45 days after
receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall have received notice of the terms of such settlement at
least 30 days prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement.
(e) For purposes of this Section 6, all references to the
Registration Statement, any preliminary prospectus or the Prospectus, or any
amendment or supplement to any of the foregoing, shall be deemed to include,
without limitation, any electronically transmitted copies thereof, including,
without limitation, any copies filed with the Commission pursuant to EDGAR.
SECTION 7. Contribution. If the indemnification provided for
in Section 6 hereof is for any reason unavailable to or insufficient to hold
harmless an indemnified party in respect of any losses, liabilities, claims,
damages or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount of such losses, liabilities, claims, damages
and expenses incurred by such indemnified party, as incurred, (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and the Underwriter
23
<PAGE>
on the other hand from the offering of the Shares pursuant to this Agreement or
(ii) if the allocation provided by clause (i) is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of the
Company on the one hand and of the Underwriter on the other hand in connection
with the statements or omissions which resulted in such losses, liabilities,
claims, damages or expenses, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Underwriter on the other hand in connection with the offering of the
Shares pursuant to this Agreement shall be deemed to be in the same respective
proportions as the total net proceeds from the offering of the Shares pursuant
to this Agreement (before deducting expenses) received by the Company and the
total underwriting discount received by the Underwriter, in each case as set
forth on the cover of the Prospectus, bear to the aggregate initial public
offering price of the Shares as set forth on such cover. The relative fault of
the Company on the one hand and the Underwriter on the other hand shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company or by the
Underwriter and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The Company
and the Underwriter agree that it would not be just and equitable if
contribution pursuant to this Section 7 were determined by pro rata allocation
or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 7. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 7 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission. Notwithstanding the provisions of
this Section 7, in no event shall the Underwriter be required to contribute any
amount in excess of the amount by which the total underwriting discount received
by the Underwriter as set forth on the cover of the Prospectus exceeds the
amount of any damages which such Underwriter has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the 1933 Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. For purposes of
this Section 7, each person, if any, who controls an Underwriter within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have
the same rights to contribution as such Underwriter, and each director of the
Company, each officer of the Company who signed the Registration Statement, and
each person, if any, who controls the Company within the meaning of Section 15
of the 1933 Act or Section 20 of the 1934 Act shall have the same rights to
contribution as the Company.
SECTION 8. Representations, Warranties and Agreements to
Survive Delivery. All representations, warranties and agreements contained in
this Agreement, or contained in certificates of officers of the Company
submitted pursuant hereto, shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of the Underwriter or
controlling person, or by or on behalf of the Company, and shall survive
delivery of the Shares to the Underwriter.
24
<PAGE>
SECTION 9. Termination of Agreement.
(a) The Underwriter may terminate this Agreement, by notice to
the Company, at any time at or prior to the Closing Date (i) if there has been,
since the time of execution of this Agreement or since the respective dates as
of which information is given in the Prospectus, any material adverse change in
the condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, or (ii)
if there has occurred any material adverse change in the financial markets in
the United States or elsewhere, any outbreak of hostilities or escalation
thereof or other calamity or crisis or any change or development involving a
prospective change in national or international political, financial or economic
conditions, in each case the effect of which is such as to make it, in the
judgment of the Underwriter, impracticable (x) to commence or continue the
offering of the units of the Trust to the public or (y) to enforce contracts for
the sale of the units of the Trust by the Trust, or (iii) if trading in the
Common Stock has been suspended or limited by the Commission or the New York
Stock Exchange or if trading generally on the American Stock Exchange or the New
York Stock Exchange or in the over-the-counter market has been suspended or
limited, or minimum or maximum prices for trading have been fixed, or maximum
ranges for prices have been required, by any of said exchanges or by such system
or by order of the Commission, the National Association of Securities Dealers,
Inc. or any other governmental authority, or (iv) if a banking moratorium has
been declared by either Federal, New York or Arizona authorities. As used in
this Section 9(a), the term "Prospectus" means the Prospectus in the form first
used by the Underwriter to confirm sales of the Shares.
(b) If this Agreement is terminated pursuant to this Section,
such termination shall be without liability of any party to any other party
except as provided in Section 4 hereof, and provided further that Sections 3(k),
6 and 7 shall survive such termination and remain in full force and effect.
SECTION 10. Default by the Underwriter. If the Underwriter
shall fail at the Closing Date to purchase the Shares which it is obligated to
purchase under this Agreement (the "Defaulted Shares"), the Underwriter shall
have the right, within 24 hours thereafter, to make arrangements for any other
underwriters to purchase all, but not less than all, of the Defaulted Shares in
such amounts as may be agreed upon and upon the terms herein set forth.
No action taken pursuant to this Section shall relieve the
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a
termination of this Agreement, either the Underwriter or the Company shall have
the right to postpone the Closing Date for a period not exceeding seven days in
order to effect any required changes in the Registration Statement or Prospectus
or in any other documents or arrangements. As used herein, the term
"Underwriter" includes any person substituted for an Underwriter under this
Section 10.
SECTION 11. Notices. All notices and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
mailed or transmitted by any standard form of telecommunication. Notices to the
Underwriter shall be directed to the Underwriter at
25
<PAGE>
One North Jefferson, St. Louis, Missouri 63103, attention of ________________;
notices to the Company shall be directed to it at 17207 North Perimeter Drive,
Scottsdale, Arizona 85255, attention of Morton H. Fleischer, with a copy to
Dennis L. Ruben at the same address.
SECTION 12. Parties. This Agreement shall inure to the benefit
of and be binding upon the Underwriter and the Company and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Underwriter and the Company and their respective successors and the controlling
persons and officers and directors referred to in Sections 6 and 7 and their
heirs and legal representatives, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision herein or therein
contained. This Agreement and all conditions and provisions hereof and thereof
are intended to be for the sole and exclusive benefit of the Underwriter and the
Company and their respective successors, and said controlling persons and
officers and directors and their heirs and legal representatives, and for the
benefit of no other person, firm or corporation. No purchaser of Shares from the
Underwriter shall be deemed to be a successor by reason merely of such purchase.
SECTION 13. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN SAID STATE.
26
<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
between the Underwriter and the Company in accordance with its terms.
Very truly yours,
FRANCHISE FINANCE CORPORATION OF AMERICA
By /s/ Morton H. Fleischer
--------------------------------------------
Name: Morton H. Fleischer
Title: President and Chief Executive Officer
CONFIRMED AND ACCEPTED,
as of the date first above written:
A.G. EDWARDS & SONS, INC.
By /s/ Daniel J. Schaub
---------------------------------
Daniel J. Schaub
Director of Corporate Finance
S-1
892,857 Shares
FRANCHISE FINANCE CORPORATION OF AMERICA
(a Delaware corporation)
Common Stock
UNDERWRITING AGREEMENT
----------------------
April 21, 1998
A.G. Edwards & Sons, Inc.
One North Jefferson
St. Louis, Missouri 63103
Ladies and Gentlemen:
Franchise Finance Corporation of America, a Delaware
corporation (the "Company"), confirms its agreement with A.G. Edwards & Sons,
Inc. (the "Underwriter," which term shall also include any underwriter
substituted as hereinafter provided in Section 10 hereof), with respect to the
sale by the Company and the purchase by the Underwriter of an aggregate of 892,
857 shares (the "Shares") of common stock, $.01 par value (the "Common Stock"),
of the Company.
The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 (No.
333-26437) relating to the offering from time to time of debt securities, common
stock or preferred stock in accordance with Rule 415 under the Securities Act of
1933, as amended (the "1933 Act") and will file such additional amendments and
supplements thereto as may herein be required. Such registration statement (as
amended) has been declared effective by the Commission. Such registration
statement, and the prospectus constituting a part thereof and each prospectus
supplement relating to the offering of the Shares (including in each case all
documents incorporated or deemed to be incorporated by reference therein, and
the information, if any, deemed to be part thereof pursuant to Rule 434 of the
rules and regulations of the Commission under the 1933 Act (the "1933 Act
Regulations")), as from time to time amended or supplemented pursuant to the
1933 Act, the Securities Exchange Act of 1934, as amended (the "1934 Act"), or
otherwise, are hereinafter referred to as the "Registration Statement"
<PAGE>
and the "Prospectus," respectively, except that if any revised prospectus shall
be provided to the Underwriter by the Company for use in connection with the
offering of the Shares which differs from the Prospectus on file (whether or not
such revised prospectus is required to be filed by the Company pursuant to Rule
424(b) of the 1933 Act Regulations), the term "Prospectus" shall refer to such
revised prospectus from and after the time it is first provided to the
Underwriter for such use. All references in this Agreement to financial
statements and schedules and other information which is "described,"
"disclosed," "contained," "included" or "stated" in the Registration Statement
or the Prospectus (and all other references of like import) shall be deemed to
mean and include all such financial statements and schedules and other
information which is or is deemed to be incorporated by reference in the
Registration Statement or the Prospectus, as the case may be; and all references
in this Agreement to amendments or supplements to the Registration Statement or
the Prospectus shall be deemed to mean and include the filing of any document
under the 1934 Act which is or is deemed to be incorporated by reference in the
Registration Statement or the Prospectus, as the case may be. If the Company
elects to rely on Rule 434 under the 1933 Act Regulations, all references to the
Prospectus shall be deemed to include, without limitation, the form of
prospectus and the term sheet, taken together, provided to the Underwriter by
the Company in reliance on Rule 434 under the 1933 Act (the "Rule 434
Prospectus"). If the Company files a registration statement to register a
portion of the Shares and relies on Rule 462(b) for such registration statement
to become effective upon filing with the Commission (the "Rule 462 Registration
Statement"), then any reference to "Registration Statement" herein shall be
deemed to be to both the registration statement referred to above (No.
333-26437) and the Rule 462 Registration Statement, as each such registration
statement may be amended pursuant to the 1933 Act.
The Company understands that the Underwriter intends to sell
the Shares to Nike Securities L.P. ("Nike"), which intends to deposit the Shares
with the trustee of The REIT Value Trust Series II (the "Trust"), a registered
unit investment trust under the Investment Company Act of 1940, as amended. The
Underwriter anticipates participating in the distribution of units of the Trust
and will receive compensation therefor. The Underwriter is not an affiliate of
Nike or the Trust.
1. Representations and Warranties.
(a) The Company represents and warrants to the Underwriter as of the
date hereof and as of the Closing Date referred to in Section 2(b) hereof, and
agrees with the Underwriter, as follows:
(i) The Company meets the requirements for use of Form S-3
under the 1933 Act, and at the respective times the Registration
Statement became effective and any post-effective amendments thereto
become effective and on the date hereof, the Registration Statement
did and will comply in all material respects with the requirements
of the 1933 Act and the 1933 Act Regulations and the 1939 Act and
the rules and regulations of the Commission under the 1939 Act, and
did not and will not contain an untrue statement of a
2
<PAGE>
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading.
The Prospectus, on the date hereof (unless the term "Prospectus"
refers to a prospectus which has been provided to the Underwriter by
the Company for use in connection with the offering of the Shares
which differs from the Prospectus on file at the Commission at the
time the Registration Statement first becomes effective, in which
case at the time it is first provided to the Underwriter for such
use), and at the Closing Date, will not include an untrue statement
of a material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that the representations and warranties in this subsection
shall not apply to statements in or omissions from the Registration
Statement or Prospectus made in reliance upon and in conformity with
information furnished to the Company in writing by the Underwriter
expressly for use in the Registration Statement or Prospectus. For
purposes of this Section l(a), all references to the Registration
Statement, any post-effective amendments thereto and the Prospectus
shall be deemed to include, without limitation, any electronically
transmitted copies thereof, including, without limitation, any copy
filed with the Commission pursuant to its Electronic Data Gathering,
Analysis, and Retrieval system ("EDGAR").
(ii) The accountants who certified the financial statements
and supporting schedules included or incorporated by reference in
the Registration Statement are independent public accountants as
required by the 1933 Act and the 1933 Act Regulations.
(iii) The financial statements included or incorporated by
reference in the Registration Statement and the Prospectus, together
with the related schedule and notes, present fairly the financial
position of the Company and its consolidated subsidiaries at the
dates indicated and the statement of income, shareholders' equity
and cash flows of the Company and its consolidated subsidiaries for
the periods specified; except as otherwise stated in the
Registration Statement, said financial statements have been prepared
in conformity with generally accepted accounting principles applied
on a consistent basis ("GAAP") throughout the periods involved. The
supporting schedules, if any, included in the Registration Statement
present fairly in accordance with GAAP the information required to
be stated therein. The selected financial data and the summary
financial information included in the Prospectus present fairly in
accordance with GAAP the information shown therein and have been
compiled on a basis consistent with that of the audited financial
statements included in the Registration Statement. Any pro forma
financial information included in the Prospectus presents fairly the
information shown therein, has been prepared in accordance with the
Commission's rules and guidelines with respect to pro forma
financial statements and has been properly compiled on the bases
described therein, and the assumptions used in the preparation
thereof are reasonable and the adjustments used therein are
appropriate to give effect to the transactions and circumstances
referred to therein.
3
<PAGE>
(iv) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as
otherwise stated therein, (A) there has been no material adverse
change in the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising in
the ordinary course of business ("Material Adverse Change"), (B)
there have been no transactions entered into by the Company or any
of its subsidiaries, other than those in the ordinary course of
business, which are material with respect to the Company and its
subsidiaries considered as one enterprise, and (C) except for
regular quarterly dividends on the common stock, par value $.01 per
share, of the Company (the "Common Stock") in amounts per share that
are consistent with past practice (including a quarterly dividend
increase of $.02 declared January 30, 1998), there has been no
dividend or distribution of any kind declared, paid or made by the
Company on any class of its capital stock.
(v) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
State of Delaware and has the corporate power and authority to own,
lease and operate its properties and to conduct its business as
described in the Prospectus and to enter into and perform its
obligations under this Agreement; the Company is duly qualified as a
foreign corporation to transact business and is in good standing in
the State of Arizona and the Company is duly qualified as a foreign
corporation to transact business and is in good standing in each
other jurisdiction in which such qualification is required, whether
by reason of the ownership or leasing of property or the conduct of
business, except where the failure to so qualify or to be in good
standing would not, either singly or in the aggregate, have a
material adverse effect on the condition, financial or otherwise, or
the earnings, business affairs or business prospects of the Company
and its subsidiaries considered as one enterprise (a "Material
Adverse Effect").
(vi) Each subsidiary (as defined below) of the Company has
been duly organized and is validly existing as a corporation, trust
or partnership, as the case may be, in good standing under the laws
of the jurisdiction of its organization, has the corporate,
partnership or other power and authority, as the case may be, to
own, lease and operate its properties and conduct its business as
described in the Prospectus and is duly qualified as a foreign
corporation, partnership or trust, as the case may be, to transact
business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the
failure to so qualify or be in good standing would not, either
singly or in the aggregate, have a Material Adverse Effect; and all
of the issued and outstanding capital stock or other equivalent
interests of each such subsidiary has been duly authorized and
validly issued, is fully paid and non-assessable and, except as
stated in the Prospectus, is owned by the Company, directly or
through subsidiaries, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity; none of the
outstanding shares of capital stock or other equivalent interests of
the subsidiaries was issued in violation of the preemptive or
similar
4
<PAGE>
rights of any stockholder or other holder of interests of such
subsidiary arising by operation of law, under the charter, by-laws
or other organizational document of any subsidiary or under any
agreement to which the Company or any subsidiary is a party. The
Company does not own, directly or indirectly through a "qualified
REIT subsidiary" (within the meaning of Section 856(i) of the
Internal Revenue Code of 1986, as amended (the "Code")),
partnership, limited liability company, association or other entity,
any shares of stock or any other debt or equity securities of, or
other interests in, any corporation, firm, partnership, limited
liability company, association or other entity, other than (1) stock
of a corporation or equity of an entity that the Company has been
advised by its legal counsel qualifies as a "qualified REIT
subsidiary" within the meaning of Section 856(i) of the Code, (2)
stock or other debt (excluding for this purpose any debt obligation
which constitutes real estate assets within the meaning of Section
856(c)(5)(B) of the Code) 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).
(vii) The authorized, issued and outstanding capital stock of
the Company is as set forth in the Prospectus (except for subsequent
issuances, if any, pursuant to employee benefit plans referred to in
the Prospectus, pursuant to the exercise of options referred to in
the Prospectus or pursuant to the Company's dividend reinvestment
plan or employee stock purchase plan), and all of such outstanding
shares of capital stock have been duly authorized and validly issued
and are fully paid and nonassessable and were not issued in
violation of, and are not subject to, preemptive or other similar
rights.
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(viii) Neither the Company nor any of its subsidiaries is (a)
in violation of its charter or bylaws, (b) in default in the
performance or observance of any provision of the Second Amended and
Restated Credit Agreement dated as of December 29, 1997 or the
Credit Agreement dated as of January 27, 1998, in each case 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 in the NationsBank
Agreement), or (c) in default in the performance or observance of
any obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, deed of trust, loan or credit
agreement, note, lease or other agreement or instrument to which the
Company or any of its subsidiaries is a party or by which any of
them may be bound, or to which any of the property or assets of the
Company or any of its subsidiaries is subject, except for, in the
case of (c), any such defaults which would not, either singly or in
the aggregate, have a Material Adverse Effect; and the execution,
delivery and performance of this Agreement, the issuance of the
Shares and the consummation of the transactions contemplated herein
and compliance by the Company with its obligations hereunder
(including the use of the proceeds from the sale of the Shares as
described in the Prospectus under the caption "Use of Proceeds")
have been duly authorized by all necessary corporate action and do
not and will not, whether with or without the giving of notice or
passage of time or both, (i) constitute an Event of Default (as
defined in the NationsBank Agreement), (ii) conflict with or
constitute a breach of, or default or Repayment Event (as defined
below) under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or
any of its subsidiaries pursuant to, any contract, indenture,
mortgage, deed of trust, loan or credit agreement, note, lease or
other agreement or instrument to which the Company or any of its
subsidiaries is a party or by which it or any of them may be bound,
or to which any of the property or assets of the Company or any of
its subsidiaries is subject except for any such conflict, breach,
default or Repayment Event which would not, either singly or in the
aggregate, have a Material Adverse Effect, or (iii) result in any
violation of the provisions of the charter or by-laws of the Company
or any of its subsidiaries or any applicable law, statute, rule or
regulation, or any judgment, order, writ or decree of any
government, government instrumentality or court, domestic or
foreign, having jurisdiction over the Company or any of its
subsidiaries. As used herein, a "Repayment Event" means any event or
condition which gives the holder of any note, debenture or other
evidence of indebtedness (or any person acting on such holder's
behalf) the right to require the repurchase, redemption or repayment
of all or a portion of such indebtedness by the Company or any of
its subsidiaries.
(ix) There is no existing labor dispute with the employees of
the Company or any of its subsidiaries that would have, either
singly or in the aggregate, a Material Adverse Effect.
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(x) There is no action, suit, proceeding, inquiry or
investigation before or by any court or governmental agency or body,
domestic or foreign, now pending, or, to the knowledge of the
Company, threatened, against or affecting the Company or any of its
subsidiaries, which is required to be disclosed in the Registration
Statement, or which might reasonably be expected to result in any
Material Adverse Change, or which might reasonably be expected to
have a Material Adverse Effect or materially and adversely affect
the consummation of this Agreement or the performance by the Company
of its obligations hereunder; the aggregate of all pending legal or
governmental proceedings to which the Company or any subsidiary is a
party or of which any of their respective property or assets is the
subject which are not described in the Registration Statement,
including ordinary routine litigation incidental to the business,
could not reasonably be expected to result in a Material Adverse
Change.
(xi) There are no contracts or documents which are required to
be described in the Registration Statement, the Prospectus or the
documents incorporated by reference therein or to be filed as
exhibits thereto by the 1933 Act, the 1933 Act Regulations, the 1934
Act or the rules and regulations of the Commission under the 1934
Act (the "1934 Act Regulations") which have not been so described
and filed as required.
(xii) To the extent applicable, the Company and its
subsidiaries own or possess, or can acquire on reasonable terms, the
patents, patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures),
trademarks, service marks and trade names (collectively, "patent and
proprietary rights") presently employed by them in connection with
the business now operated by them, and neither the Company nor any
of its subsidiaries has received any notice or is otherwise aware of
any infringement of or conflict with asserted rights of others with
respect to any patent or proprietary rights or of any facts or
circumstances which would render any patent and proprietary rights
invalid or inadequate to protect the interest of the Company or any
of its subsidiaries therein, and which infringement or conflict (if
the subject of any unfavorable decision, ruling or finding) or
invalidity or inadequacy, either singly or in the aggregate, would
result in any Material Adverse Change.
(xiii) No filing with, or authorization, approval, consent,
license, order, registration, qualification or decree of, any court
or governmental authority or agency is necessary or required in
connection with the offering, issuance or sale of the Shares
hereunder or the consummation of the transactions contemplated by
this Agreement, except such as have already been obtained or as may
be required under the 1933 Act or the 1933 Act Regulations or state
securities laws.
(xiv) The Company and its subsidiaries possess such
certificates, authorities, permits, licenses, approvals, consents
and other authorizations (collectively, "Governmental
7
<PAGE>
Licenses") issued by the appropriate federal, state, local or
foreign regulatory agencies or bodies necessary to conduct the
business now operated by them, except where the failure to possess
or comply with any such Governmental License would not, either
singly or in the aggregate, have a Material Adverse Effect; the
Company and its subsidiaries are in compliance with the terms and
conditions of all such Governmental Licenses, except where the
failure so to comply would not, either singly or in the aggregate,
have a Material Adverse Effect; all of the Governmental Licenses are
valid and in full force and effect, except when the invalidity of
such Governmental Licenses or the failure of such Governmental
Licenses to be in full force and effect would not have, either
singly or in the aggregate, a Material Adverse Effect; and neither
the Company nor any of its subsidiaries has received any notice of
proceedings relating to the revocation or modification of any such
Governmental Licenses which, either singly or in the aggregate, if
the subject of an unfavorable decision, ruling or finding, would
have a Material Adverse Effect.
(xv) This Agreement has been duly authorized, executed and
delivered by the Company.
(xvi) The Shares have been duly authorized for issuance and
sale to the Underwriter pursuant to this Agreement and, when issued
and delivered by the Company pursuant to this Agreement against
payment of the consideration set forth herein, will be validly
issued, fully paid and non-assessable and the Underwriter will
receive valid title to the Shares, free and clear of all security
interests, mortgages, pledges, liens, encumbrances and claims; the
capital stock conforms to all statements relating thereto contained
or incorporated by reference in the Prospectus and the Registration
Statement and such description conforms to the rights set forth in
the instruments defining the same; and the issuance of the Shares is
not subject to preemptive or other similar rights arising by
operation of law, under the charter and bylaws of the Company or
otherwise. The Shares will conform in all material respects to the
respective statements thereto contained in the Prospectus.
(xvii) Except as set forth in the Prospectus, the Company and
its subsidiaries are in compliance in all material respects with all
applicable laws, statutes, ordinances, rules or regulations, the
violation of which, either singly or in the aggregate, would be
reasonably expected to have a Material Adverse Effect.
(xviii) Except as otherwise disclosed in the Prospectus: (i)
the Company and its subsidiaries have good and marketable title to
all properties and assets (or a valid first lien as to mortgaged
properties) described in the Prospectus as being owned (or
mortgaged) by them, or reflected in the most recent consolidated
balance sheet of the Company contained in the Prospectus, except as
would not, either singly or in the aggregate, have a Material
Adverse Effect; (ii) all liens, charges, claims, restrictions or
encumbrances on or affecting the properties and assets of the
Company or any of its subsidiaries which are required to be
disclosed
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<PAGE>
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 (other than in
connection with any synthetic lease transaction); (iv) each of the
properties of the Company and its subsidiaries, at the time such
property was acquired or at the time the loan by the Company with
respect to such property was made, had access to public rights of
way, either directly or through insured easements, except as would
not, either singly or in the aggregate, have a Material Adverse
Effect; (v) each of such properties, at the time such property was
acquired or at the time the loan by the Company with respect to such
property was made, was served by all public utilities necessary for
the current operations on such property in sufficient quantities for
such operations, except as would not, either singly or in the
aggregate, have a Material Adverse Effect; (vi) each of such
properties complies with all applicable codes and zoning and
subdivision laws and regulations, except for such failures to comply
which would not, either singly or in the aggregate, have a Material
Adverse Effect; (vii) the real property leases and equipment leases,
if any, relating to each of such properties are in full force and
effect, except where the failure to be in full force and effect
would not, singly or in the aggregate, have a Material Adverse
Effect; and (viii) there is no pending or threatened condemnation,
zoning change, or other proceeding or action that will in any manner
affect the size of, use of, improvements on, construction on or
access to the properties of the Company and its subsidiaries, except
such proceedings or actions which would not, either singly or in the
aggregate, have a Material Adverse Effect.
(xix) The Company has complied with, and is and will be in
compliance with, the provisions of that certain Florida act relating
to disclosure of doing business with Cuba, codified as Section
517.075 of the Florida statutes, and the rules and regulations
thereunder (collectively, the "Cuba Act") or is exempt therefrom.
(xx) The Company is not, and upon the issuance and sale of the
Shares as herein contemplated and the application of the net
proceeds therefrom as described in the Prospectus under the caption
"Use of Proceeds" will not be, an "investment company" or an entity
"controlled" by an "investment company" as such terms are defined in
the Investment Company Act of 1940, as amended (the "1940 Act").
(xxi) Except as described in the Registration Statement, (A)
neither the Company nor any of its subsidiaries is in violation of
any federal, state, local or foreign 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,
9
<PAGE>
transport or handling of Hazardous Materials (collectively,
"Environmental Laws") except where the Company or the 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 (B) there are no events or circumstances that
could form the basis of an order for clean-up or remediation, or an
action, suit or proceeding by any private party or governmental body
or agency, against or affecting the Company or any of its
subsidiaries relating to any Hazardous Materials or the violation of
any Environmental Laws, which, either singly or in the aggregate,
would have a Material Adverse Effect.
(xxii) The documents incorporated or deemed to be incorporated
by reference in the Prospectus, when they became effective or at the
time they were or hereafter are filed with the Commission, complied
and will comply in all material respects with the requirements of
the 1933 Act or the 1934 Act, as applicable, and the rules and
regulations of the Commission thereunder, and, when read together
with the other information in the Prospectus, at the time the
Registration Statement and any post-effective amendments thereto
become effective and on the Closing Date, will not contain an untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were
made, not misleading.
(xxiii) The Company and its subsidiaries have filed all
federal, state, local and foreign tax returns that are required to
be filed or have duly requested extensions thereof and have paid all
taxes required to be paid by any of them and any related
assessments, fines or penalties, except for any such tax,
assessment, fine or penalty that is being contested in good faith
and by appropriate proceedings; and adequate charges, accruals and
reserves have been provided for in the financial statements referred
to in Section 1(a)(iii) above in respect of all federal, state,
local and foreign taxes for all periods as to which the tax
liability of the Company or any of its subsidiaries has not been
finally determined or remains open to examination by applicable
taxing authorities.
(xxiv) The Company and its subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with
management's general and specific authorizations; (ii) transactions
are recorded as necessary to permit preparation of financial
statements in conformity with GAAP and to maintain accountability
for assets; (iii) access to assets is permitted only in accordance
with management's general or specific authorizations; and (iv) the
recorded accountability for assets is compared with the existing
assets at reasonable intervals and appropriate action is taken with
respect to any differences.
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(xxv) The Company and its subsidiaries have not (i) taken,
directly or indirectly, any action designed to cause or to result
in, or that has constituted or which might reasonably be expected to
constitute, the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the
Shares or (ii) since the initial filing of the Registration
Statement (A) sold, bid for, purchased or paid anyone (other than,
to the extent applicable, payments made by the Company pursuant to
the terms of, and in accordance with, the Company's dividend
reinvestment plan and employee stock purchase plan) any compensation
for soliciting purchases of, the Shares, or (B) paid or agreed to
pay to any person any compensation for soliciting another to
purchase any other securities of the Company.
(xxvi) No relationship, direct or indirect, exists between or
among any of the Company or any affiliate of the Company, on the one
hand, and any director, officer, stockholder, customer or supplier
of any of them, on the other hand, which is required by the 1933 Act
or by the 1933 Act Regulations to be described in the Registration
Statement or the Prospectus which is not so described or is not
described as required.
(xxvii) The Company has not distributed and, prior to the
later to occur of (i) the Closing Date and (ii) completion of the
distribution of the Shares, will not distribute any prospectus (as
such term is defined in the 1933 Act and the 1933 Act Regulations)
in connection with the offering and sale of the Shares other than
the Registration Statement, any preliminary prospectus, the
Prospectus or other materials, if any, permitted by the 1933 Act or
by the 1933 Act Regulations and approved by the Underwriter.
(xxviii) The Company has been and is organized in conformity
with the requirements for qualification and taxation as a real
estate investment trust ("REIT") under the Internal Revenue Code of
1986, as amended (the "Code"), and its methods of operation have at
all times enabled, and its proposed methods of operation will
enable, the Company to qualify as a REIT under the Code.
(xxix) The Company and each of its subsidiaries has title
insurance on all real property described in the Prospectus as being
owned (or held under a ground lease) or financed by any of them in
an amount at least equal to the cost of acquisition of such property
or the original principal amount of the loan provided by any of
them, as the case may be, and each such property is insured by
extended coverage hazard and casualty insurance in an amount not
less than 90% of the full replacement cost of the improvements
located thereon (exclusive of excavation and foundations), except
for such properties which are covered by insurance in an amount less
than 90%, the total loss of which would not have, either singly or
in the aggregate, a Material Adverse Effect, and there are in effect
for such properties and assets insurance policies covering risks and
in amounts that are commercially reasonable for such types of
properties and assets and that are consistent with the types and
amounts of insurance typically maintained by prudent owners of
similar
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properties or assets or required by commercial lenders with respect
to similar properties or assets and all such insurance is in full
force and effect, and to the extent any of such properties are
insured with rental guaranty insurance, such insurance is in full
force and effect and the Company is named as an insured on all
policies required under the leases for such properties.
(xxx) Each of FFCA Acquisition Corporation, FFCA Institutional
Advisors, Inc., FFCA Secured Assets Corporation, FFCA Residual
Interest Corporation and FFCA Secured Lending Corporation has been
(at all times during the period each such corporation has been in
existence) and will be an association taxable as a corporation for
federal income tax purposes and the Company has owned 100% of the
stock of each such corporation at all times during the period each
such corporation has been in existence and FFCA Secured Franchise
Loan Trust 1997-1 has been a trust.
(xxxi) FFCA Co-Investment Limited Partnership has been (at all
times on and after June 1, 1994) and will be treated as a
partnership, rather than an association taxable as a corporation or
publicly traded partnership, for federal income tax purposes.
(xxxii) No holder of any security of the Company or other
person has any right to require registration of shares of Common
Stock or any other security of the Company because of the filing of
the registration statement or consummation of the transactions
contemplated by this Agreement.
(b) Any certificate signed by any officer of the Company and
delivered to the Underwriter or to counsel for the Underwriter shall be deemed a
representation and warranty by the Company to the Underwriter as to the matters
covered thereby.
2. Sale and Delivery to Underwriter; Closing.
(a) On the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, the Company
agrees to sell to the Underwriter, and the Underwriter agrees to purchase from
the Company, the Shares at a purchase price of $26.60 per share.
(b) Payment of the purchase price for, and delivery of certificates
for, the Shares shall be made at the office of Franchise Finance Corporation of
America, 17207 North Perimeter Drive, Scottsdale, Arizona, or at such other
place as shall be agreed upon by the Underwriter and the Company, at 10:00 A.M.,
New York City time, on the third business day (unless postponed in accordance
with the provisions of Section 10) following the date after execution of this
Agreement, or such other time not later than ten business days after such date
as shall be agreed upon by the Underwriter and the Company (such time and date
of payment and delivery being herein called "Closing Date"). Payment shall be
made to the Company in immediately available funds against
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delivery to the Underwriter for the account of the Underwriter of certificates
for the Shares to be purchased by the Underwriter. Certificates for the Shares
shall be in such denominations and registered in such names as the Underwriter
may request in writing at least one business day before the Closing Date. The
certificates for the Shares will be made available for examination and packaging
by the Underwriter in The City of New York not later than 3:00 P.M. on the last
business day prior to the Closing Date.
3. Covenants of the Company. The Company covenants with the
Underwriter as follows:
(a) Promptly following the execution of this Agreement, the
Company will prepare a prospectus supplement setting forth the terms
of such Shares not otherwise specified in the Prospectus, the price
at which the Shares are to be purchased by the Underwriter from the
Company, and such other information as you and the Company deem
appropriate in connection with the offering of the Shares. The
Company will promptly transmit copies of the prospectus supplement
to the Commission for filing pursuant to Rule 424(b) of the 1933 Act
Regulations and will furnish to the Underwriter as many copies of
the Prospectus and such prospectus supplement as the Underwriter
shall reasonably request.
(b) The Company will notify the Underwriter immediately, and
confirm the notice in writing, (i) of the effectiveness of any
amendment to the Registration Statement, or when any supplement to
the Prospectus or any amended Prospectus shall have been filed, (ii)
of the receipt of any comments from the Commission, (iii) of any
request by the Commission for any amendment to the Registration
Statement or any amendment or supplement to the Prospectus or for
additional information, and (iv) of the issuance by the Commission
of any stop order suspending the effectiveness of the Registration
Statement or of any order preventing or suspending the use of any
preliminary prospectus supplement, or of the suspension of the
qualification of the Shares for offering or sale in any
jurisdiction, or of the initiation or threatening of any proceedings
for any of such purposes. The Company will make every reasonable
effort to prevent the issuance of any stop order and, if any stop
order is issued, to obtain the lifting thereof at the earliest
possible moment. If the Company elects to rely on Rule 434, the
Company will provide the Underwriter with copies of the form of Rule
434 Prospectus, in such number as the Underwriter may reasonably
request, and file or transmit for filing with the Commission the
form of Prospectus complying with Rule 434(c)(2) of the 1933 Act in
accordance with Rule 424(b) of the 1933 Act by the close of business
in New York on the business day immediately succeeding the date of
this Agreement.
(c) At any time when the Prospectus is required to be
delivered under the 1933 Act or the 1934 Act in connection with
sales of the Shares, the Company will give the Underwriter notice of
its intention to file or prepare any amendment to the Registration
Statement (including any post-effective amendment) or any amendment
or supplement to the Prospectus, whether pursuant to the 1933 Act,
the 1934 Act or otherwise (including any
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<PAGE>
revised prospectus which the Company proposes for use by the
Underwriter in connection with the offering of the Shares which
differs from the prospectus on file at the Commission at the time
the Registration Statement first becomes effective, whether or not
such revised prospectus is required to be filed pursuant to Rule
424(b) of the 1933 Act Regulations or any term sheet prepared in
reliance on Rule 434 of the 1933 Act Regulations), will furnish the
Underwriter with copies of any such amendment or supplement a
reasonable amount of time prior to such proposed filing or use, as
the case may be, and will not file any such amendment or supplement
or use any such prospectus to which the Underwriter or counsel for
the Underwriter shall reasonably object.
(d) The Company has furnished or will deliver to the
Underwriter and counsel for the Underwriter, without charge, signed
copies of the Registration Statement as originally filed and of each
amendment thereto (including exhibits filed therewith or
incorporated by reference therein and documents incorporated or
deemed to be incorporated by reference therein) and signed copies of
all consents and certificates of experts, and will also deliver to
the Underwriter a conformed copy of the Registration Statement as
originally filed and of each amendment thereto (without exhibits)
for the Underwriter.
(e) The Company will furnish to the Underwriter, without
charge, from time to time during the period when the Prospectus is
required to be delivered under the 1933 Act or the 1934 Act, such
number of copies of the Prospectus (as amended or supplemented) as
the Underwriter may reasonably request for the purposes contemplated
by the 1933 Act or the 1934 Act or the respective applicable rules
and regulations of the Commission thereunder.
(f) If any event shall occur or condition shall exist as a
result of which it is necessary, in the opinion of counsel for the
Underwriter or for the Company, to amend the Registration Statement
or amend or supplement the Prospectus in order that the Prospectus
will not include any untrue statements of a material fact or omit to
state a material fact necessary in order to make the statements
therein not misleading in the light of the circumstances existing at
the time it is delivered to a purchaser, or if it shall be
necessary, in the opinion of such counsel, at any such time to amend
the Registration Statement or amend or supplement the Prospectus in
order to comply with the requirements of the 1933 Act or the 1933
Act Regulations, the Company will promptly prepare and file with the
Commission, subject to Section 3(b), such amendment or supplement as
may be necessary to correct such statement or omission or to make
the Registration Statement or the Prospectus comply with such
requirements, and the Company will furnish to the Underwriter such
number of copies of such amendment or supplement as the Underwriter
may reasonably request.
(g) The Company will use its best efforts, in cooperation with
the Underwriter, to qualify the Shares for offering and sale under
the applicable securities laws of such states
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and other jurisdictions of the United States as the Underwriter may
designate and to maintain such qualifications in effect for a period
of not less than one year from the effective date of the
Registration Statement; provided, however, that the Company shall
not be obligated to file any general consent to service of process
or to qualify as a foreign corporation or as a dealer in securities
in any jurisdiction in which it is not so qualified or to subject
itself to taxation in respect of doing business in any jurisdiction
in which it is not otherwise so subject. In each jurisdiction in
which the Shares have been so qualified, the Company will file such
statements and reports as may be required by the laws of such
jurisdiction to continue such qualification in effect for a period
of not less than one year from the effective date of the
Registration Statement.
(h) The Company will make generally available to its security
holders as soon as practicable, but not later than 90 days after the
close of the period covered thereby, an earnings statement (in form
complying with the provisions of Rule 158 of the 1933 Act
Regulations) covering a twelve month period beginning not later than
the first day of the Company's fiscal quarter next following the
"effective date" (as defined in said Rule 158) of the Registration
Statement.
(i) In accordance with the Cuba Act and without limitation to
the provisions of Sections 6 and 7 hereof, the Company agrees to
indemnify and hold harmless the Underwriter from and against any and
all loss, liability, claim, damage and expense whatsoever (including
fees and disbursements of counsel), as incurred, arising out of any
violation by the Company of the Cuba Act.
(j) The Company will use the net proceeds received by it from
the sale of the Shares in the manner specified in the Prospectus
under "Use of Proceeds."
(k) The Company, during the period when the Prospectus, is
required to be delivered under the 1933 Act or the 1934 Act, will
file all documents required to be filed with the Commission pursuant
to the 1934 Act within the time periods required by the 1934 Act and
the 1934 Act Regulations.
(l) Except as stated in this Agreement and in the Prospectus,
the Company has not taken, nor will it take, directly or indirectly,
any action designed to or that might reasonably be expected to cause
or result in stabilization or manipulation of the price of the
Common Stock to facilitate the sale or resale of the Shares.
(m) The Company will use its best efforts to have the shares
of Common Stock which it agrees to sell under this Agreement listed,
subject to notice of issuance, on the New York Stock Exchange on or
before the Closing Date.
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4. Payment of Expenses. The Company will pay all expenses incident
to the performance of its obligations under this Agreement, including (i) the
printing and filing of the Registration Statement as originally filed and of
each amendment thereto, (ii) the preparation, printing and delivery to the
Underwriter of this Agreement and such other documents as may be required in
connection with the offering, purchase, sale and delivery of the Shares, (iii)
the preparation, issuance and delivery of the certificates for the Shares to the
Underwriter, (iv) the fees and disbursements of the Company's counsel,
accountants and other advisors, (v) the qualification of the Shares under
securities laws in accordance with the provisions of Section 3(g) hereof,
including filing fees and the reasonable fees and disbursements of counsel for
the Underwriter in connection therewith and in connection with the preparation
of any Blue Sky Survey, any supplement thereto and any Legal Investment Survey,
(vi) the printing and delivery to the Underwriter of copies of the Prospectus
and any amendments or supplements thereto including any term sheet delivered by
the Company pursuant to Rule 434 of the 1933 Act Regulations, (vii) the
preparation, printing and delivery to the Underwriter of any Blue Sky Survey,
any supplement thereto and any Legal Investment Survey, (viii) the fee of any
filing for review of the offering with the National Association of Securities
Dealers, Inc., if any, including the fees and expenses of counsel for the
Underwriter in connection therewith, and (ix) the fees and expenses incurred in
connection with the listing of the Shares on the New York Stock Exchange.
If this Agreement is terminated by the Underwriter in accordance
with the provisions of Section 5 or Section 9(a)(i) hereof, the Company shall
reimburse the Underwriter for all of its out-of-pocket expenses, including the
reasonable fees and disbursements of counsel for the Underwriter.
5. Conditions of Underwriter's Obligations. The obligations of the
Underwriter hereunder are subject to the accuracy of the representations and
warranties of the Company herein contained, to the performance by the Company of
its obligations hereunder and to the following further conditions:
(a) The Registration Statement shall be effective prior to the
date hereof, and at the Closing Date no stop order suspending the
effectiveness of the Registration Statement shall have been issued
under the 1933 Act or proceedings therefor initiated or threatened
by the Commission, and any request on the part of the Commission for
additional information shall have been complied with to the
reasonable satisfaction of counsel to the Underwriter. A prospectus
supplement shall have been transmitted to the Commission for filing
in accordance with Rule 424(b) of the 1933 Act Regulations within
the prescribed time period and prior to Closing Date the Company
shall have provided evidence satisfactory to the Underwriter of such
timely filing, or a post-effective amendment providing such
information shall have been promptly filed and declared effective in
accordance with the requirements of the 1933 Act Regulations. The
Indenture shall have been qualified under the 1939 Act.
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(b) At the Closing Date the Underwriter shall have received:
(1) The favorable opinion, dated as of the Closing
Date, of Kutak Rock, counsel for the Company, in form and
substance satisfactory to counsel for the Underwriter, to the
effect that:
(i) The Company has been duly incorporated and
is validly existing as a corporation in good standing
under the laws of the State of Delaware.
(ii) The Company has the corporate power and
authority to own, lease and operate its properties
and to conduct its business as described in the
Registration Statement.
(iii) The Company is duly qualified as a foreign
corporation to transact business and is in good
standing in Arizona and in each other jurisdiction in
which such qualification is required, whether by
reason of the ownership or leasing of property or the
conduct of business, except in the case of
jurisdictions other than Arizona, where the failure
to so qualify or to be in good standing would not,
either singly or in the aggregate, have a Material
Adverse Effect.
(iv) The authorized, issued and outstanding
capital stock of the Company is as set forth in the
Prospectus (except for subsequent issuances, if any,
pursuant to employee benefit plans referred to in the
Prospectus, pursuant to the exercise of options
referred to in the Prospectus or pursuant to the
Company's dividend reinvestment plan and employee
stock purchase plan) and all of such outstanding
shares of capital stock have been duly authorized and
validly issued and are fully paid and nonassessable.
(v) Each subsidiary of the Company has been duly
organized and is validly existing as a corporation,
trust or partnership, as the case may be, in good
standing under the laws of the jurisdiction of its
organization, has the corporate, trust or partnership
power, as the case may be, and authority to own,
lease and operate its properties and to conduct its
business as described in the Registration Statement
and is duly qualified as a foreign corporation, trust
or partnership, as the case may be, to transact
business and is in good standing in each jurisdiction
in which such qualification is required, whether by
reason of the ownership or leasing of property or the
conduct of its business, except where the failure to
so qualify or to be in good standing would not,
either singly or in the aggregate, have a Material
Adverse Effect;
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all of the issued and outstanding capital stock or
other equivalent interests of each such subsidiary
has been duly authorized and validly issued, is fully
paid and non-assessable and, to the best of their
knowledge and information, except as stated in the
Prospectus, is owned directly by the Company, free
and clear of any security interest, mortgage, pledge,
lien, encumbrance, claim or equity.
(vi) The Company has the corporate power and
authority to enter into this Agreement and to issue,
sell and deliver the Shares to the Underwriter as
provided herein, and this Agreement has been duly
authorized, executed and delivered by the Company.
(vii) The Shares have been duly authorized for
issuance and sale to the Underwriter pursuant to this
Agreement and, when issued and delivered by the
Company to the Underwriter pursuant to this Agreement
against payment therefor in accordance with the terms
hereof, the consideration set forth herein, will be
validly issued, fully paid and non-assessable.
(viii) The Shares, when issued and delivered by
the Company pursuant to this Agreement against
payment therefor in accordance with the terms hereof,
will be free of any preemptive or similar rights
arising by operation of law or under the charter or
bylaws of the Company or, to such counsel's
knowledge, otherwise.
(ix) As of the date of such counsel's opinion,
there are, including the Shares to be issued to the
Underwriter, 48, 779, 413 shares of Common Stock, as
may be adjusted for shares issued pursuant to the
dividend reinvestment plan and employee stock
purchase plan and no shares of Preferred Stock
outstanding.
(x) The Shares conform in all material respects
to the descriptions thereof contained in the
Prospectus.
(xi) The Registration Statement has been
declared effective under the 1933 Act; any required
filing of the Prospectus pursuant to Rule 424(b) has
been made in the manner and within the time period
required by Rule 424(b); and, to the best of their
knowledge and information, no stop order suspending
the effectiveness of the Registration Statement has
been issued under the 1933 Act or proceedings
therefor initiated or threatened by the Commission.
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(xii) The Registration Statement, the Prospectus
and each amendment or supplement to the Registration
Statement and Prospectus, as of their respective
effective or issue dates (other than the financial
statements and schedules and other financial or
statistical data included or incorporated by
reference therein, as to which no opinion need be
rendered) complied as to form in all material
respects with the requirements of the 1933 Act and
the 1933 Act Regulations.
(xiii) To the best of such counsel's knowledge
and information, there is not pending, and the
Company has not received any notice of any
threatened, action, suit, proceeding, inquiry or
investigation, to which the Company or any of its
subsidiaries is a party, or to which the property of
the Company or any of its subsidiaries is subject,
before or brought by any court or governmental agency
or body, which might reasonably be expected to result
in any Material Adverse Change, or which might
reasonably be expected to materially and adversely
affect the properties or assets thereof or the
consummation of this Agreement or the performance by
the Company of its obligations hereunder; and all
pending legal or governmental proceedings to which
the Company or any of its subsidiaries is a party or
that affect any of their respective properties that
are not described in the Prospectus, including
ordinary routine litigation incidental to the
business, could not reasonably be expected to result
in a Material Adverse Change.
(xiv) The information in the Prospectus under
"Certain Federal Income Tax Considerations,"
"Restrictions on Transfers of Capital Stock,"
"Description of Preferred Stock" and "Description of
Common Stock" and in the Registration Statement under
Item 15 of Part II thereof, to the extent that it
constitutes matters of law, summaries of legal
matters, documents or proceedings, or legal
conclusions, has been reviewed by them and is correct
in all material respects; to the best of such
counsel's knowledge, there are no statutes or
regulations, and no legal or governmental actions,
suits or proceedings pending or threatened against
the Company that are required to be described in the
Prospectus that are not described as required and the
opinion of such firm set forth under "Certain Federal
Income Tax Considerations" is confirmed.
(xv) All descriptions in the Prospectus of
contracts and other documents to which the Company or
its subsidiaries are a party are accurate in all
material respects; to the best of their knowledge and
information, there are no franchises, contracts,
indentures, mortgages, loan agreements, notes, leases
or other instruments required to be described or
referred to in the Registration Statement or to be
filed as exhibits thereto other than those
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described or referred to therein or filed or
incorporated by reference as exhibits thereto, the
descriptions thereof or references thereto are
correct in all material respects, and, to the best of
their knowledge or information, no default exists in
the due performance or observance of any material
obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, loan
agreement, note, lease or other instrument so
described, referred to, filed or incorporated by
reference.
(xvi) No authorization, approval, consent or
order of any court or governmental authority or
agency (other than under the 1933 Act and the 1933
Act Regulations, which have been obtained, or as may
be required under the securities or blue sky laws of
the various states) is required in connection with
the due authorization, execution and delivery of this
Agreement or for the offering, issuance or sale of
the Shares to the Underwriter; and the execution,
delivery and performance of this Agreement, the
issuance of the Shares and the consummation of the
transactions contemplated herein and compliance by
the Company with its obligations hereunder (including
the use of the proceeds from the sale of the Shares
as described in the Prospectus under the caption "Use
Of Proceeds") will not, whether with or without the
giving of notice or lapse of time or both, conflict
with or constitute a breach of, or default or
Repayment Event under or result in the creation or
imposition of any lien, charge or encumbrance upon
any property or assets of the Company or any of its
subsidiaries pursuant to (A) the NationsBank
Agreement or (B) to the best of their knowledge and
information, any other contract, indenture, mortgage,
deed of trust, loan or credit agreement, note, lease
or any other agreement or instrument to which the
Company or any of its subsidiaries is a party or by
which it or any of them may be bound, or to which any
of the property or assets of the Company or any of
its subsidiaries is subject except for any such
conflict, breach, default or Repayment Event which
would not, either singly or in the aggregate, have a
Material Adverse Effect, nor will such action result
in any violation of the provisions of the charter or
by-laws of the Company, or any applicable law,
statute, rule, regulation, judgment, order, writ or
decree of any government, government instrumentality
or court, domestic or foreign, having jurisdiction
over the Company or any of its subsidiaries or any of
their respective properties, assets or operations.
(xvii) The documents incorporated by reference
in the Prospectus (other than the financial
statements and schedules and other financial or
statistical data included or incorporated by
reference therein, as to which no opinion need be
rendered), when they became effective or were filed
with the Commission, as the case may be, complied as
to form in all material
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respects with the requirements of the 1933 Act or the
1934 Act, as applicable, and the rules and
regulations of the Commission thereunder.
(xviii) The Company is not an "investment
company" or an entity "controlled" by an "investment
company," as such terms are defined in the 1940 Act.
(xix) To the best of such counsel's knowledge,
neither the Company nor its subsidiaries are in
violation of their charter or bylaws; and the Company
and its subsidiaries are in compliance with all laws,
rules, regulations, judgments, decrees, orders and
statutes in the jurisdictions in which they are
conducting their business.
(xx) Beginning with its taxable year ending
December 31, 1994, the Company has been and is
organized in conformity with the requirements for
qualification and taxation as a REIT under the Code
and its methods of operation have at all times
enabled, and its proposed methods of operation
described in the Registration Statement will enable,
the Company to qualify as a REIT under the Code.
(xxi) Each of FFCA Acquisition Corporation, FFCA
Institutional Advisors, Inc., FFCA Residual Interest
Corporation, FFCA Secured Assets Corporation and FFCA
Secured Lending Corporation has been (at all times
during the period each such corporation has been in
existence) and will be treated as a "qualified REIT
subsidiary" under Section 856(i) of the Code.
(xxii) FFCA Co-Investment Limited Partnership
has been (at all times on and after June 1, 1994) and
will be treated as a partnership, rather than an
association taxable as a corporation or publicly
traded partnership, for federal income tax purposes.
(xxiii) To the best of such counsel's knowledge,
no holder of any security of the Company or any other
person has any right to require registration of
shares of Common Stock or any other security of the
Company because of the filing of the Registration
Statement or consummation of the transactions
contemplated by this Agreement.
(xxiv) To the best of such counsel's knowledge,
except as described in the Prospectus, there are no
outstanding options, warrants or other rights calling
for the issuance of any shares of capital stock of
the Company or any security convertible into or
exchangeable or exercisable for capital stock of the
Company.
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(xxv) The form of certificates for the Shares
conforms to the requirements of the Delaware General
Corporation Law.
Such opinion shall be to such further effect with
respect to legal matters relating to this Agreement and the
sale of the Shares as counsel to the Underwriter may
reasonably request. In rendering such opinion, such counsel
may rely as to matters of fact (but not as to legal
conclusions), to the extent they deem proper, on certificates
of responsible officers of the Company and public officials.
Such opinion shall not state that it is to be governed or
qualified by, or that it is otherwise subject to, any
treatise, written policy or other document relating to legal
opinions, including, without limitation, the Legal Opinion
Accord of the ABA Section of Business Law (1991).
(2) The favorable opinion, dated as of the Closing
Date, of Latham & Watkins, counsel for the Underwriter, with
respect to the matters set forth in clauses (i), (vi), (vii),
(viii) (with respect to rights arising by operation of law or
under the charter or bylaws of the Company), (xi) and (xii),
inclusive, of subsection (b)(1) of this Section, except that,
with respect to the matters referred to in (xii), no opinion
need be expressed as to the documents incorporated by
reference in the Registration Statement.
(3) In giving their opinions required by subsections
(b)(1) and (b)(2), respectively, of this Section, Kutak Rock
and Latham & Watkins shall each additionally state that
nothing has come to their attention that led them to believe
that the Registration Statement (except for financial
statements and schedules and other financial or statistical
data included or incorporated by reference therein and the
Form T-1, as to which such counsel need make no statement), at
the time it became effective or on the date hereof, contained
an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to
make the statements therein not misleading or that the
Prospectus (except for financial statements and schedules and
other financial or statistical data included or incorporated
by reference therein, as to which such counsel need make no
statement), on the date hereof (unless the term "Prospectus"
refers to a prospectus which has been provided to the
Underwriter by the Company for use in connection with the
offering of the Shares which differs from the Prospectus on
file at the Commission at the time the Registration Statement
becomes effective, in which case at the date of such
prospectus), or at the Closing Date, 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.
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(c) At the Closing Date there shall not have been, since the
date hereof or since the respective dates as of which information is
given in the Prospectus, any Material Adverse Change, whether or not
arising in the ordinary course of business, and the Underwriter
shall have received a certificate of the President or a Vice
President of the Company and of the chief financial or chief
accounting officer of the Company, dated as of the Closing Date, to
the effect that (i) there has been no such Material Adverse Change,
(ii) the representations and warranties in Section 1 hereof are true
and correct with the same force and effect as though expressly made
at and as of Closing Date, (iii) the Company has complied with all
agreements and satisfied all conditions on its part to be performed
or satisfied at or prior to Closing Date, and (iv) no stop order
suspending the effectiveness of the Registration Statement has been
issued and no proceedings for that purpose have been initiated or
threatened by the Commission. As used in this Section 5(c) the term
"Prospectus" means the Prospectus in the form first used by the
Underwriter to confirm sales of the Shares.
(d) At the time of the execution of this Agreement, the
Underwriter shall have received from Arthur Andersen LLP a letter
dated such date, in form and substance satisfactory to the
Underwriter, containing statements and information of the type
ordinarily included in accountants' "comfort letters" to
underwriters with respect to the financial statements and certain
financial information contained in the Registration Statement.
(e) At the Closing Date the Underwriter shall have received
from Arthur Andersen LLP a letter, dated as of the Closing Date, to
the effect that they reaffirm the statements made in the letter
furnished pursuant to subsection (d) of this Section, except that
the specified date referred to shall be a date not more than three
days prior to the Closing Date.
(f) At the Closing Date, the Shares shall have been approved
for listing on the New York Stock Exchange, subject only to official
notice of issuance.
(g) At the Closing Date, counsel for the Underwriter shall
have been furnished with such documents and opinions as they may
require for the purpose of enabling them to pass upon the issuance
and sale of the Shares as herein contemplated and related
proceedings, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the
Company in connection with the issuance and sale of the Shares as
herein contemplated shall be satisfactory in form and substance to
the Underwriter and counsel for the Underwriter.
If any condition specified in this Section shall not have been
fulfilled when and as required to be fulfilled, this Agreement may be terminated
by the Underwriter by notice to the Company at any time at or prior to the
Closing Date, and such termination shall be without liability of any party
23
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to any other party except as provided in Section 4 and except that Sections
3(k), 6 and 7 shall survive any such termination and remain in full force and
effect.
6. Indemnification.
(a) The Company agrees to indemnify and hold harmless the
Underwriter and each person, if any, who controls the Underwriter within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement
or alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), including the
information deemed to be part of the Registration Statement pursuant
to Rule 434 of the 1933 Act Regulations, if applicable, or the
omission or alleged omission therefrom of a material fact required
to be stated therein or necessary to make the statements therein not
misleading or arising out of any untrue statement or alleged untrue
statement of a material fact contained in the Prospectus (or any
amendment or supplement thereto), or the omission or alleged
omission therefrom of a material fact necessary in order to make the
statements therein, in the light of the circumstances under which
they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate
amount paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or
threatened, or of any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or
omission; provided that (subject to Section 6(d) below) any such
settlement is effected with the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred
(including, subject to the third sentence of Section 6(c) hereof,
the reasonable fees and disbursements of counsel chosen by the
Underwriter), reasonably incurred in investigating, preparing or
defending against any litigation, or any investigation or proceeding
by any governmental agency or body, commenced or threatened, or any
claim whatsoever based upon any such untrue statement or omission,
or any such alleged untrue statement or omission, to the extent that
any such expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by the
Underwriter expressly for use in the Registration Statement (or any amendment
thereto) or any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto).
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(b) The Underwriter agrees to indemnify and hold harmless the
Company, its directors, each of its officers who signed the Registration
Statement, and each person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act against any and all
loss, liability, claim, damage and expense described in the indemnity contained
in subsection (a) of this Section, as incurred, but only with respect to untrue
statements or omissions, or alleged untrue statements or omissions, made in the
Registration Statement (or any amendment thereto) or the Prospectus (or any
amendment or supplement thereto) in reliance upon and in conformity with written
information furnished to the Company by the Underwriter expressly for use in the
Registration Statement (or any amendment thereto) or the Prospectus (or any
amendment or supplement thereto).
(c) Each indemnified party shall give notice as promptly as
reasonably practicable to each indemnifying party of any action commenced
against it in respect of which indemnity may be sought hereunder, but failure to
so notify an indemnifying party shall not relieve such indemnifying party from
any liability which it may have otherwise than on account of this indemnity
agreement. An indemnifying party may participate at its own expense in the
defense of any such action; provided, however, that counsel to the indemnifying
party shall not (except with the consent of the indemnified party) be counsel to
the indemnified party. In no event shall the indemnifying parties be liable for
fees and expenses of more than one counsel (in addition to any local counsel)
separate from their own counsel for all indemnified parties in connection with
any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances. No
indemnifying party shall, without the prior written consent of the indemnified
parties, settle or compromise or consent to the entry of any judgment with
respect to any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever in
respect of which indemnification or contribution could be sought under this
Section 6 or Section 7 hereof (whether or not the indemnified parties are actual
or potential parties thereto), unless such settlement, compromise or consent (i)
includes an unconditional release of each indemnified party from all liability
arising out of such litigation, investigation, proceeding or claim and (ii) does
not include a statement as to or an admission of fault, culpability or a failure
to act by or on behalf of any indemnified party.
(d) If at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel, such indemnifying party agrees that it shall be liable for any
settlement of the nature contemplated by Section 6(a)(ii) effected without its
written consent if (i) such settlement is entered into more than 45 days after
receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall have received notice of the terms of such settlement at
least 30 days prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement.
(e) For purposes of this Section 6, all references to the
Registration Statement, any preliminary prospectus or the Prospectus, or any
amendment or supplement to any of the foregoing,
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shall be deemed to include, without limitation, any electronically transmitted
copies thereof, including, without limitation, any copies filed with the
Commission pursuant to EDGAR.
7. Contribution. If the indemnification provided for in Section 6
hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and the Underwriter on the other hand from the offering of the Shares
pursuant to this Agreement or (ii) if the allocation provided by clause (i) is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the Company on the one hand and of the Underwriter on the
other hand in connection with the statements or omissions which resulted in such
losses, liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations. The relative benefits received by the Company on the
one hand and the Underwriter on the other hand in connection with the offering
of the Shares pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of the Shares
pursuant to this Agreement (before deducting expenses) received by the Company
and the total underwriting discount received by the Underwriter, in each case as
set forth on the cover of the Prospectus, bear to the aggregate initial public
offering price of the Shares as set forth on such cover. The relative fault of
the Company on the one hand and the Underwriter on the other hand shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company or by the
Underwriter and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The Company
and the Underwriter agree that it would not be just and equitable if
contribution pursuant to this Section 7 were determined by pro rata allocation
or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 7. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 7 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission. Notwithstanding the provisions of
this Section 7, in no event shall the Underwriter be required to contribute any
amount in excess of the amount by which the total underwriting discount received
by the Underwriter as set forth on the cover of the Prospectus exceeds the
amount of any damages which such Underwriter has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the 1933 Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. For purposes of
this Section 7, each person, if any, who controls an Underwriter within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934
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Act shall have the same rights to contribution as such Underwriter, and each
director of the Company, each officer of the Company who signed the Registration
Statement, and each person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same
rights to contribution as the Company.
8. Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this Agreement, or
contained in certificates of officers of the Company submitted pursuant hereto,
shall remain operative and in full force and effect, regardless of any
investigation made by or on behalf of the Underwriter or controlling person, or
by or on behalf of the Company, and shall survive delivery of the Shares to the
Underwriter.
9. Termination of Agreement.
(a) The Underwriter may terminate this Agreement, by notice to the
Company, at any time at or prior to the Closing Date (i) if there has been,
since the time of execution of this Agreement or since the respective dates as
of which information is given in the Prospectus, any material adverse change in
the condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, or (ii)
if there has occurred any material adverse change in the financial markets in
the United States or elsewhere, any outbreak of hostilities or escalation
thereof or other calamity or crisis or any change or development involving a
prospective change in national or international political, financial or economic
conditions, in each case the effect of which is such as to make it, in the
judgment of the Underwriter, impracticable (x) to commence or continue the
offering of the units of the Trust to the public or (y) to enforce contracts for
the sale of the units of the Trust by the Trust, or (iii) if trading in the
Common Stock has been suspended or limited by the Commission or the New York
Stock Exchange or if trading generally on the American Stock Exchange or the New
York Stock Exchange or in the over-the-counter market has been suspended or
limited, or minimum or maximum prices for trading have been fixed, or maximum
ranges for prices have been required, by any of said exchanges or by such system
or by order of the Commission, the National Association of Securities Dealers,
Inc. or any other governmental authority, or (iv) if a banking moratorium has
been declared by either Federal, New York or Arizona authorities. As used in
this Section 9(a), the term "Prospectus" means the Prospectus in the form first
used by the Underwriter to confirm sales of the Shares.
(b) If this Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party to any other party except as
provided in Section 4 hereof, and provided further that Sections 3(k), 6 and 7
shall survive such termination and remain in full force and effect.
10. Default by the Underwriter. If the Underwriter shall fail at the
Closing Date to purchase the Shares which it is obligated to purchase under this
Agreement (the "Defaulted Shares"), the Underwriter shall have the right, within
24 hours thereafter, to make arrangements for
27
<PAGE>
any other underwriters to purchase all, but not less than all, of the Defaulted
Shares in such amounts as may be agreed upon and upon the terms herein set
forth.
No action taken pursuant to this Section shall relieve the
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a
termination of this Agreement, either the Underwriter or the Company shall have
the right to postpone the Closing Date for a period not exceeding seven days in
order to effect any required changes in the Registration Statement or Prospectus
or in any other documents or arrangements. As used herein, the term
"Underwriter" includes any person substituted for an Underwriter under this
Section 10.
11. Notices. All notices and other communications hereunder shall be
in writing and shall be deemed to have been duly given if mailed or transmitted
by any standard form of telecommunication. Notices to the Underwriter shall be
directed to the Underwriter at One North Jefferson, St. Louis, Missouri 63103,
attention of Doug Rubenstein; notices to the Company shall be directed to it at
17207 North Perimeter Drive, Scottsdale, Arizona 85255, attention of Morton H.
Fleischer, with a copy to Dennis L. Ruben at the same address.
12. Parties. This Agreement shall inure to the benefit of and be
binding upon the Underwriter and the Company and their respective successors.
Nothing expressed or mentioned in this Agreement is intended or shall be
construed to give any person, firm or corporation, other than the Underwriter
and the Company and their respective successors and the controlling persons and
officers and directors referred to in Sections 6 and 7 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein or therein contained. This
Agreement and all conditions and provisions hereof and thereof are intended to
be for the sole and exclusive benefit of the Underwriter and the Company and
their respective successors, and said controlling persons and officers and
directors and their heirs and legal representatives, and for the benefit of no
other person, firm or corporation. No purchaser of Shares from the Underwriter
shall be deemed to be a successor by reason merely of such purchase.
13. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED IN SAID STATE.
28
<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
between the Underwriter and the Company in accordance with its terms.
Very truly yours,
FRANCHISE FINANCE CORPORATION
OF AMERICA
By /s/ Morton H. Fleischer
--------------------------------------------
Name: Morton H. Fleischer
Title: President and Chief Executive Officer
CONFIRMED AND ACCEPTED,
as of the date first above written:
A.G. EDWARDS & SONS, INC.
By /s/ Douglas D. Rubenstein
---------------------------------
Name: Douglas D. Rubenstein
Title: Managing Director
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
February 18, 1998
Board of Directors
Franchise Finance Corporation
of America
The Perimeter Center
17207 North Perimeter Drive
Scottsdale, AZ 85255
Re: Issuance and Sale of Common Stock
Ladies and Gentlemen:
We have acted as counsel to Franchise Finance Corporation of America
(the "Company"), in connection with the preparation of the registration
statement on Form S-3 (Registration No. 33-62629), as amended (the "Registration
Statement"), filed with the Securities and Exchange Commission in connection
with the registration of $500,000,000 aggregate offering price of securities.
Further, we have acted as counsel to the Company in connection with the
preparation of the related Prospectus dated July 21, 1997 (the "Prospectus"),
and the Prospectus Supplement dated February 18, 1998 (the "Prospectus
Supplement") relating to the issuance of 1,258,427 shares of the Company's
common stock, $.01 par value per share (the "Common Stock"). We are familiar
with the proceedings heretofore taken by the Company in connection with the
authorization and registration, and in the preparation for the issuance and
sale, of the Common Stock.
For the purpose of rendering this opinion, we have examined such
corporate records, certificates and other documents of the Company, and have
made such investigations of law as
<PAGE>
Board of Directors
Franchise Finance Corporation
of America
February 18, 1998
Page 2
we deemed necessary or appropriate and we are familiar with the procedures taken
or proposed to be taken by the Company in connection with the issuance and sale
of the Common Stock. We have examined the Registration Statement, the Prospectus
and the Prospectus Supplement. In expressing this opinion, we have relied, as to
any questions of fact upon which our opinion is predicated, upon representations
and certificates of the officers of the Company. Except as otherwise indicated
herein, all terms defined in the Registration Statement, Prospectus and
Prospectus Supplement are used herein as so defined.
We have assumed for purposes of the opinions set forth below (i) that
no stop orders relating to the Registration Statement have been issued by the
Securities and Exchange Commission as of the date of the issuance and sale of
the Common Stock; (ii) the genuineness of all signatures and the authenticity
and completeness of all documents submitted to us as originals; (iii) the
conformity to originals and the authenticity of all documents supplied to us as
certified, photocopied, conformed or facsimile copies and the authenticity and
completeness of the originals of any such documents; (iv) the proper, genuine
and due execution and delivery of all documents by all parties to them and that
there has been no breach of the terms thereof; (v) that all required actions are
taken and conditions satisfied with respect to the issuance of the Common Stock
as specified in the Prospectus and Prospectus Supplement; and (vi) consideration
is received for the Common Stock.
Based upon the foregoing and subject to the qualifications set forth
above, we are of the opinion that at the time the Common Stock is issued, the
Common Stock will be legally issued, fully paid and nonassessable.
This opinion is given for the sole benefit of the addressee hereof and
may not be relied upon by or delivered to any other person. In addition, this
opinion relates only to the matters and the transactions specifically referred
to, and no other opinions should be implied therefrom.
Respectfully submitted,
/s/ Kutak Rock
Kutak Rock
EXHIBIT 5.02
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 21, 1998
Board of Directors
Franchise Finance Corporation
of America
The Perimeter Center
17207 North Perimeter Drive
Scottsdale, AZ 85255
Re: Issuance and Sale of Common Stock
Ladies and Gentlemen:
We have acted as counsel to Franchise Finance Corporation of America
(the "Company"), in connection with the preparation of the registration
statement on Form S-3 (Registration No. 333-26437), as amended (the
"Registration Statement"), filed 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 counsel to the Company in connection with
the preparation of the related Prospectus dated April 16, 1998 (the
"Prospectus"), and the Prospectus Supplement dated April 21, 1998 (the
"Prospectus Supplement") relating to the issuance of 892,857 shares of the
Company's common stock, $.01 par value per share (the "Common Stock"). We are
familiar with the proceedings heretofore taken by the Company in connection with
the authorization and registration, and in the preparation for the issuance and
sale, of the Common Stock.
For the purpose of rendering this opinion, we have examined such
corporate records, certificates and other documents of the Company, and have
made such investigations of law as
<PAGE>
Board of Directors
Franchise Finance Corporation
of America
April 21, 1998
Page 2
we deemed necessary or appropriate and we are familiar with the procedures taken
or proposed to be taken by the Company in connection with the issuance and sale
of the Common Stock. We have examined the Registration Statement, the Prospectus
and the Prospectus Supplement. In expressing this opinion, we have relied, as to
any questions of fact upon which our opinion is predicated, upon representations
and certificates of the officers of the Company. Except as otherwise indicated
herein, all terms defined in the Registration Statement, Prospectus and
Prospectus Supplement are used herein as so defined.
We have assumed for purposes of the opinions set forth below (i) that
no stop orders relating to the Registration Statement have been issued by the
Securities and Exchange Commission as of the date of the issuance and sale of
the Common Stock; (ii) the genuineness of all signatures and the authenticity
and completeness of all documents submitted to us as originals; (iii) the
conformity to originals and the authenticity of all documents supplied to us as
certified, photocopied, conformed or facsimile copies and the authenticity and
completeness of the originals of any such documents; (iv) the proper, genuine
and due execution and delivery of all documents by all parties to them and that
there has been no breach of the terms thereof; (v) that all required actions are
taken and conditions satisfied with respect to the issuance of the Common Stock
as specified in the Prospectus and Prospectus Supplement; and (vi) consideration
is received for the Common Stock.
Based upon the foregoing and subject to the qualifications set forth
above, we are of the opinion that at the time the Common Stock is issued, the
Common Stock will be legally issued, fully paid and nonassessable.
This opinion is given for the sole benefit of the addressee hereof and
may not be relied upon by or delivered to any other person. In addition, this
opinion relates only to the matters and the transactions specifically referred
to, and no other opinions should be implied therefrom.
Respectfully submitted,
/s/ Kutak Rock
Kutak Rock
