As filed with the Securities and Exchange Commission on November 15, 2010

Registration No. 333-      

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM S-4

REGISTRATION STATEMENT

UNDER THE SECURITIES ACT OF 1933

 

BURGER KING HOLDINGS, INC.

BURGER KING CORPORATION

See Table of Additional Registrants Below

(Exact Name of Registrant as Specified in Its Charter)

 

 

5505 Blue Lagoon Drive

Miami, Florida 33126

(305) 378-3000

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

 

Anne Chwat, Esq.

General Counsel

Burger King Corporation

5505 Blue Lagoon Drive

Miami, Florida 33126

(305) 378-3000

(Name, address, including zip code, and telephone number, including area code, of agent for service)

 

Copy to:

Kara L. MacCullough, Esq.

Holland & Knight LLP

701 Brickell Avenue, Suite 3000

Miami, FL 33131

Phone: (305) 374-8500/Fax: (305) 789-7799

Approximate date of commencement of proposed sale of the securities to the public: As soon as practicable after the effective date of this registration statement.

If the securities being registered on this form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box:  o

If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  o

If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

 

If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:

Exchange Act Rule 13e-4(i) (Cross-Border Issuer Tender Offer)  o

Exchange Act Rule 14d-1(d) (Cross-Border Third-Party Tender Offer)  o

 

Calculation of Registration Fee

 

 

 

Each registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until such registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

 

TABLE OF ADDITIONAL REGISTRANTS

 

 

 

Subject to Completion, Dated November 15, 2010

 

         PROSPECTUS

 

BURGER KING CORPORATION

 

Offer to Exchange

 

$800,000,000 97/8% Senior Notes due 2018

for

$800,000,000 97/8% Senior Notes due 2018, that have been registered under the Securities Act of 1933

 

Burger King Corporation (“BKC”), a wholly-owned subsidiary of Burger King Holdings, Inc. (“Holdings”), is offering to exchange all of your outstanding unregistered $800,000,000 97/8% Senior Notes due 2018, which we refer to as the Original Notes, for registered $800,000,000 97/8% Senior Notes due 2018, which we refer to as the Exchange Notes.

 

Material Terms of the Exchange Offer:

 

 

Material Terms of the Exchange Notes:

 

 

See the Section entitled “Risk Factors” that begins on page 10 for a discussion of the risks that
you should consider prior to tendering your Original Notes in the exchange offer.

 

 

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the Exchange Notes to be distributed in the exchange offer or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.

 

The date of this prospectus is  , 2010.

 

TABLE OF CONTENTS

 

 

You should rely only on the information contained in this prospectus. We have not authorized anyone to provide you with any information or represent anything about us, our financial results or this offering that is not contained in this prospectus. If given or made, any such other information or representation should not be relied upon as having been authorized by us. We are not making an offer to exchange Original Notes in any state where the offer is not permitted.

 

The information in this prospectus is current only as of the date on its cover, and may change after that date. The information in any document incorporated by reference in this prospectus is current only as of the date of any such document. For any time after the cover date of this prospectus, we do not represent that our affairs are the same as described or that the information in this prospectus is correct—nor do we imply those things by delivering this prospectus or issuing Exchange Notes to you.

 

Each broker-dealer that receives Exchange Notes for its own account pursuant to the exchange offer must acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Notes. The letter of transmittal states that by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act of 1933, as amended (the “Securities Act”). This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of Exchange Notes received in exchange for the Original Notes where such Original Notes were acquired by such broker-dealer as a result of market-making activities or other trading activities. The Company has agreed that, starting on the expiration date of the exchange offer and ending on the close of business one year after the expiration date, it will make this prospectus available to any broker-dealer for use in connection with any such resale. See “Plan of Distribution.”

 

This prospectus incorporates important business and financial information about us that is not included in or delivered with this document. This information is available without charge to holders upon written or oral request to Burger King Holdings, Inc., 5505 Blue Lagoon Drive, Miami, Florida 33126, Attention: Investor Relations Department, Telephone: (305) 378-3000. In order to obtain timely delivery of such documents, holders of Original Notes must request this information no later than five business days prior to the expiration date of the exchange offer for the Original Notes.

 

Unless otherwise indicated or the context otherwise requires, when used in this prospectus, the terms “Company,” “us,” “we” and “our” refer to Burger King Corporation and its consolidated subsidiaries and “Holdings” refers to our parent, Burger King Holdings, Inc.

 

Prospectus Summary

Offering of the Original Notes		On October 19, 2010, BKC issued in a private placement $800.0 million of unsecured 97/8% Senior Notes due 2018, which we refer to as the Original Notes. The Original Notes are guaranteed, jointly and severally, on a senior unsecured basis by Holdings and BK Acquisition, Inc., BK CDE, Inc., Burger King Interamerica, LLC, Burger King Sweden Inc., Distron Transportation Systems, Inc., Moxie’s, Inc., The Melodie Corporation, TPC Number Four, Inc. and TQW Company (collectively with Holdings, the “Guarantors”). In addition, the Original Notes will be guaranteed by all of our future direct and indirect subsidiaries that borrow under or guarantee any obligation under the New Credit Facilities or that guarantee our indebtedness or indebtedness of another guarantor.
Registration Rights Agreement		Pursuant to the registration rights agreement among BKC, the Guarantors and the several initial purchasers, entered into in connection with the issuance of the Original Notes, BKC agreed to offer to exchange the Original Notes for up to $800.0 million in aggregate principal amount of 97/8% Senior Notes due 2018 that have been registered under the Securities Act, which we refer to as the Exchange Notes.
The Exchange Offer		BKC is offering to exchange the Exchange Notes for the same aggregate principal amount of the Original Notes (the “Exchange Offer”).
		The Original Notes may be tendered only in denominations of $2,000 and integral multiples of $1,000 in excess of $2,000. We will exchange the Exchange Notes for all of the Original Notes that are validly tendered and not withdrawn prior to the expiration of the Exchange Offer.
		The Exchange Notes will evidence the same debt as the Original Notes and will be issued under and entitled to the benefits of the same Indenture that governs the Original Notes (the “Indenture”). Because we have registered the Exchange Notes, the Exchange Notes will not be subject to transfer restrictions, and holders of Original Notes that have tendered and had their Original Notes accepted in the Exchange Offer will not have any further registration rights nor the related special interest provisions.
Conditions to the Exchange Offer		The Exchange Offer is subject to customary conditions. The Exchange Offer is not conditioned upon any minimum principal amount of the Original Notes being tendered.
Procedures For Tendering Original Notes		If your Original Notes are held in book-entry form and are registered in the name of a broker, dealer, commercial bank, trust company or other nominee, we urge you to contact that person promptly if you wish to tender your Original Notes pursuant to the Exchange Offer. In such case, you must request the participant of The Depository Trust Company, or DTC, to electronically transmit, on your behalf, an acceptance through DTC’s Automated Tender Offer Program.

		If you wish to tender your Original Notes for Exchange Notes and you hold your Original Notes in certificated form, you must:

		• complete and sign the enclosed letter of transmittal by following the related instructions, and
		• send the letter of transmittal, as directed in the instructions, together with any other required documents, to the exchange agent either (1) with the Original Notes to be tendered, or (2) in compliance with the specified procedures for guaranteed delivery of the Original Notes.

		Please do not send your letter of transmittal or certificates representing your Original Notes to us. Those documents should be sent only to the exchange agent. Questions regarding how to tender and requests for information should be directed to the exchange agent. See “The Exchange Offer— Exchange Agent.”
If You Fail to Exchange Your Original Notes		If you do not exchange your Original Notes for the Exchange Notes in the Exchange Offer, you will continue to be subject to the restrictions on transfer provided in the Original Notes and Indenture governing those notes. In general, you may not offer or sell your Original Notes unless such offer or sale is registered under the federal securities laws or are sold in a transaction exempt from or not subject to the registration requirements of the federal securities laws and applicable state securities laws.
Withdrawal Rights		You may withdraw the tender of your Original Notes at any time before 12:00 midnight, New York City time, on the expiration date of the Exchange Offer. You must follow the withdrawal procedures as described under the heading “The Exchange Offer— Withdrawal of Tenders.”
Expiration Date		The Exchange Offer will expire at 12:00 midnight, New York City time, on [20 business days after commencement], 2010, unless we decide to extend the expiration date.
Issuance of Exchange Notes		We will issue Exchange Notes in exchange for the Original Notes tendered and accepted in the Exchange Offer promptly following the expiration date (unless amended as described in this prospectus).
Resale of Exchange Notes		Except as provided below, we believe that the Exchange Notes may be offered for resale, resold and otherwise transferred by you without compliance with the registration and prospectus delivery provisions of the Securities Act provided that:

		• the Exchange Notes are being acquired in the ordinary course of business,
		• you are not participating, do not intend to participate, and have no arrangement or understanding with any person to participate in the distribution of the Exchange Notes issued to you in the Exchange Offer,
		• you are not an affiliate of BKC or any of the Guarantors,
		• you are not a broker-dealer tendering Original Notes acquired directly from us for your account, and

		• you are not prohibited by law or any policy of the Securities and Exchange Commission, or the SEC, from participating in the Exchange Offer.

		Our belief is based on interpretations by the staff of the SEC, as set forth in no-action letters issued to third parties that are not related to us. The SEC has not considered the Exchange Offer in the context of a no-action letter. We cannot assure you that the SEC would make similar determinations with respect to the Exchange Offer. If any of these conditions are not satisfied, or if our belief is not accurate, and you transfer any Exchange Notes issued to you in the Exchange Offer without delivering a resale prospectus meeting the requirements of the Securities Act or without an exemption from registration of your Exchange Notes from those requirements, you may incur liability under the Securities Act. We will not assume, nor will we indemnify you against, any such liability.
		Each broker-dealer that receives Exchange Notes for its own account in exchange for Original Notes, where the Original Notes were acquired by such broker-dealer as a result of market-making or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Notes. See “Plan of Distribution.”
U.S. Federal Income Tax Consequences		The exchange of Original Notes for the Exchange Notes pursuant to the Exchange Offer will not be a taxable event for U.S. federal income tax purposes.
Use of Proceeds		We will not receive any proceeds from the issuance of the Exchange Notes for the Original Notes pursuant to the Exchange Offer. We will pay all of our expenses incident to the Exchange Offer.
Accounting Treatment		The Exchange Notes will be recorded at the same carrying value as the Original Notes, and we will not recognize any gain or loss from the Exchange Offer for accounting purposes.
Appraisal Rights		Holders of the Original Notes do not have any appraisal or dissenters’ rights in connection with the Exchange Offer.
Exchange Agent		Wilmington Trust FSB is serving as exchange agent in connection with the Exchange Offer (the “Exchange Agent”).

Issuer		Burger King Corporation, a Florida corporation.
Securities		$800.0 million in aggregate principal amount of 97/8% Senior Notes due 2018.
Maturity		October 15, 2018.
Interest		97/8% per year. Interest will accrue from October 19, 2010.
Interest payment dates		Each October 15 and April 15, commencing April 15, 2011.
Optional redemption		The Exchange Notes will be redeemable at our option, in whole or in part, at any time on or after October 15, 2014, at the redemption prices set forth in this prospectus, together with accrued and unpaid interest, if any, to the date of redemption.
		At any time prior to October 15, 2013, we may redeem up to 35% of the original principal amount of the Exchange Notes with the proceeds of certain equity offerings at a redemption price of 100% of the principal amount of the Exchange Notes, together with accrued and unpaid interest, if any, to the date of redemption.
		At any time prior to October 15, 2014, we may also redeem some or all of the Exchange Notes at a price equal to 100% of the principal amount of the Exchange Notes, plus accrued and unpaid interest, plus a “make-whole premium.”
Mandatory offers to purchase		The occurrence of a change of control will require us to offer to purchase from you all or a portion of your Exchange Notes at a price equal to 101% of their principal amount, together with accrued and unpaid interest, if any, to the date of purchase.
		Certain asset dispositions will also require us to use the proceeds from those asset dispositions to make an offer to purchase the Exchange Notes at 100% of their principal amount, together with accrued and unpaid interest, if any, to the date of purchase if such proceeds are not otherwise used within a specified period to repay indebtedness (with a corresponding reduction in commitment, if applicable) or to invest in capital assets related to our business or capital stock of a restricted subsidiary (as defined under the heading “Description of Notes”).
Guarantees		The Exchange Notes will be guaranteed, jointly and severally, on a senior unsecured basis by the Guarantors. In addition, the Exchange Notes will be guaranteed by all of our future direct and indirect subsidiaries that borrow under or guarantee any obligation under the New Credit Facilities or that guarantee our indebtedness or indebtedness of another guarantor. Under certain circumstances, subsidiary guarantors may be released from their guarantees without the consent of the holders of notes. See “Description of Notes—Guarantees.”

		For the quarter ended September 30, 2010, our non-guarantor subsidiaries:
		• represented approximately 35% of our net revenues;
		• represented approximately 21% of operating income, excluding unallocated corporate general and administrative expenses of approximately $39.3 million and net intercompany revenue of $0.3 million; and
		• represented approximately 23% of our Adjusted EBITDA, excluding unallocated corporate general and administrative expenses of approximately $39.3 million and net intercompany revenue of $0.3 million.
		As of September 30, 2010, our non-guarantor subsidiaries:
		• represented 28% of our total assets; and
		• had $198.9 million of total liabilities, including debt and trade payables but excluding intercompany liabilities.
Ranking		The Exchange Notes and the subsidiary guarantees will be our and the Guarantors’ senior unsecured obligations and:
		• will rank equally in right of payment with all of our and the Guarantors’ existing and future senior indebtedness;
		• will rank senior in right of payment to all of our and the Guarantors’ existing and future subordinated indebtedness;
		• will be effectively subordinated to any of our and the Guarantors’ existing and future secured debt, to the extent of the value of the assets securing such debt; and
		• will be structurally subordinated to all of the existing and future liabilities (including trade payables) of each of our subsidiaries that do not guarantee the Exchange Notes.
		As of September 30, 2010, on a pro forma basis after giving effect to the Transactions, we and the Guarantors would have had approximately $1,850.8 million of senior secured indebtedness, consisting of secured indebtedness under our New Term Loan Facility and approximately $70.2 million of indebtedness under capital leases to which the Exchange Notes would have been effectively subordinated. As of September 30, 2010, on a pro forma basis after giving effect to the Transactions:
		• we would have had an additional $150.0 million of borrowing capacity under our New Revolving Credit Facility (less $38.0 million of our available commitments to support letters of credit) to which the Exchange Notes would have been effectively subordinated if borrowed;
		• we would have had the option to raise incremental term loans or increase the revolving credit facility commitments up to an additional $450.0 million, under certain circumstances, to which the Exchange Notes would be effectively subordinated if borrowed; and

		• our non-guarantor subsidiaries would have had $198.9 million of total liabilities (including trade payables), all of which would have been structurally senior to the Exchange Notes.
Covenants		We will issue the Exchange Notes under the Indenture with Wilmington Trust FSB, as trustee. The Indenture, among other things, limits our ability and the ability of our restricted subsidiaries to:
		• incur additional indebtedness and guarantee indebtedness;
		• pay dividends or make other distributions in respect of, or repurchase or redeem, capital stock;
		• prepay, redeem or repurchase certain debt;
		• make loans and investments;
		• sell or otherwise dispose of assets;
		• incur liens;
		• enter into transactions with affiliates;
		• alter the businesses we conduct;
		• enter into agreements restricting our subsidiaries’ ability to pay dividends; and
		• consolidate, merge or sell all or substantially all of our assets.
		These covenants are subject to a number of important exceptions and qualifications. For more details, see “Description of Notes.”
		Certain of these covenants will cease to apply to the Exchange Notes at all times when the Exchange Notes have investment grade ratings from both Moody’s Investor Service, Inc. and Standard & Poor’s. For more details, see “Description of Notes.”
Activities of Holdings		The Indenture requires the activities of Holdings to be restricted. See “Description of Notes—Certain covenants—Limitation on activities of Holdings.”
Listing		We do not intend to list the Exchange Notes on any securities exchange.
Book Entry Depository		The Depositary Trust Company.
Trustee, Registrar and Transfer Agent		Wilmington Trust FSB.
Governing Law		State of New York.

 

You should carefully consider the following risks relating to the Exchange Offer and the Exchange Notes, together with the risks and uncertainties discussed under “Forward-Looking Statements” and the other information included or incorporated by reference in this prospectus, including the information under the heading “Risk Factors” in the Annual Report on Form 10-K for the fiscal year ended June 30, 2010 of Holdings and the Quarterly Report on Form 10-Q for the quarter ended September 30, 2010 of Holdings, before deciding whether to participate in the Exchange Offer. Additional risks and uncertainties not currently known to us, or that we currently do not deem material also may materially impair our financial condition, results of operations or liquidity. In this “Risk Factors” section, the term “notes” refers to both the Original Notes and the Exchange Notes.

 

Risks Related to the Exchange Offer

 

If you fail to follow the procedures of the Exchange Offer, your Original Notes will not be accepted for exchange.

 

We will not accept your Original Notes for exchange if you do not follow the procedures of the Exchange Offer. We will issue the Exchange Notes as part of the Exchange Offer only after timely receipt of your Original Notes, a properly completed and duly executed letter of transmittal and all other required documents or if you comply with the guaranteed delivery procedures for tendering your Original Notes. Therefore, if you want to tender your Original Notes, please allow sufficient time to ensure timely delivery. If we do not receive your Original Notes, letter of transmittal and all other required documents by the expiration date of the Exchange Offer, or you do not otherwise comply with the guaranteed delivery procedures for tendering your Original Notes, we will not accept your Original Notes for exchange. We are under no duty to give notification of defects or irregularities with respect to the tenders of Original Notes for exchange. If there are defects or irregularities with respect to your tender of Original Notes, we will not accept your Original Notes for exchange unless we decide in our sole discretion to waive such defects or irregularities.

 

If you fail to exchange your Original Notes, they will continue to be restricted securities and may become more illiquid.

 

Original Notes that you do not tender or we do not accept will, following the Exchange Offer, continue to be restricted securities, and you may not offer to sell them except pursuant to an exemption from, or in a transaction not subject to, the Securities Act and applicable state securities law. We will issue Exchange Notes in exchange for the Original Notes pursuant to the Exchange Offer only following the satisfaction of the procedures and conditions set forth in “The Exchange Offer — Procedures for Tendering.” These procedures and conditions include timely receipt by the Exchange Agent of such Original Notes (or a confirmation of book-entry transfer) and of a properly completed and duly executed letter of transmittal (or an agent’s message from DTC).

 

Because we anticipate that most holders of Original Notes will elect to exchange their Original Notes, we expect that the liquidity of the market for any Original Notes remaining after the completion of the Exchange Offer will be substantially limited. Any Original Notes tendered and exchanged in the Exchange Offer will reduce the aggregate principal amount of the Original Notes outstanding. Following the Exchange Offer, if you do not tender your Original Notes you will generally not have any further registration rights, subject to limited exceptions, and your Original Notes will continue to be subject to certain transfer restrictions. Accordingly, the liquidity of the market for the Original Notes could be adversely affected.

Your ability to transfer the Exchange Notes may be limited by the absence of an active trading market and an active trading market may not develop for the Exchange Notes.

 

The Exchange Notes will be a new issue of securities for which there is no established trading market. We expect the Exchange Notes to be eligible for trading by “qualified institutional buyers,” as defined under Rule 144A, but we do not intend to list the Exchange Notes on any national securities exchange or include the Exchange Notes in any automated quotation system. The initial purchasers of the Original Notes have advised us that they intend to make a market in the Exchange Notes as permitted by applicable laws and regulations. However, the initial purchasers are not obligated to make a market in the Exchange Notes, and, if commenced, they may discontinue their market-making activities at any time without notice.

 

Therefore, an active market for the Exchange Notes may not develop or be maintained, which would adversely affect the market price and liquidity of the Exchange Notes. In that case, the holders of the Exchange Notes may not be able to sell their Exchange Notes at a particular time or at a favorable price.

 

Even if an active trading market for the Exchange Notes does develop, there is no guarantee that it will continue. Historically, the market for non-investment grade debt has been subject to severe disruptions that have caused substantial volatility in the prices of securities similar to the Exchange Notes. The market, if any, for the Exchange Notes may experience similar disruptions, and any such disruptions may adversely affect the liquidity in that market or the prices at which you may sell your Exchange Notes.

 

Risks Related to the Notes

 

Our substantial indebtedness could adversely affect our financial condition and prevent us from fulfilling our obligations under the notes.

 

We have and will continue to have, a significant amount of indebtedness. As of September 30, 2010, after giving effect to the Transactions, we would have had total indebtedness of $2,722.4 million (excluding $20.8 million of original issue discount on the New Credit Facilities), including the Original Notes, and we would have had commitments under the New Revolving Credit Facility available to us of $150.0 million (not giving effect to approximately $38.0 million of letters of credit which we utilized upon consummation of the Transactions).

 

Subject to the limits contained in the New Credit Agreement, the Indenture and our other debt instruments, we may be able to incur substantial additional debt from time to time to finance working capital, capital expenditures, investments or acquisitions, or for other purposes. If we do so, the risks related to our high level of debt could intensify. Specifically, our high level of debt could have important consequences to the holders of the notes, including:

 

 

In addition, the Indenture and the New Credit Agreement contain restrictive covenants that will limit our ability to engage in activities that may be in our long-term best interest. Our failure to comply with those covenants could result in an event of default which, if not cured or waived, could result in the acceleration of substantially all of our debt.

 

We may not be able to generate sufficient cash to service all of our indebtedness, including the notes, and may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful.

 

Our ability to make scheduled payments on or refinance our debt obligations, including the notes, depends on our financial condition and operating performance, which are subject to prevailing economic, industry and competitive conditions and to certain financial, business, legislative, regulatory and other factors beyond our control. We may be unable to maintain a level of cash flows from operating activities sufficient to permit us to pay the principal, premium, if any, and interest on our indebtedness, including the notes.

 

If our cash flows and capital resources are insufficient to fund our debt service obligations, we could face substantial liquidity problems and could be forced to reduce or delay investments and capital expenditures or to dispose of material assets or operations, seek additional debt or equity capital or restructure or refinance our indebtedness, including the notes. We may not be able to effect any such alternative measures on commercially reasonable terms or at all and, even if successful, those alternative actions may not allow us to meet our scheduled debt service obligations. The New Credit Agreement and the Indenture restrict our ability to dispose of assets and use the proceeds from those dispositions and may also restrict our ability to raise debt or equity capital to be used to repay other indebtedness when it becomes due. We may not be able to consummate those dispositions or to obtain proceeds in an amount sufficient to meet any debt service obligations then due.

 

In addition, we conduct a substantial portion of our operations through our subsidiaries, certain of which are not guarantors of the notes or our other indebtedness. Accordingly, repayment of our indebtedness, including the notes, is dependent on the generation of cash flow by our subsidiaries and their ability to make such cash available to us, by dividend, debt repayment or otherwise. Unless they are guarantors of the notes or our other indebtedness, our subsidiaries do not have any obligation to pay amounts due on the notes or our other indebtedness or to make funds available for that purpose. Our subsidiaries may not be able to, or may not be permitted to, make distributions to enable us to make payments in respect of our indebtedness, including the notes. Each subsidiary is a distinct legal entity, and, under certain circumstances, legal and contractual restrictions may limit our ability to obtain cash from our subsidiaries.

 

While the Indenture and the agreements governing certain of our other existing indebtedness limit the ability of our subsidiaries to incur consensual restrictions on their ability to pay dividends or make other intercompany payments to us, these limitations are subject to qualifications and exceptions. In the event that we do not receive distributions from our subsidiaries, we may be unable to make required principal and interest payments on our indebtedness, including the notes.

 

Our inability to generate sufficient cash flows to satisfy our debt obligations, or to refinance our indebtedness on commercially reasonable terms or at all, would materially and adversely affect our financial position and results of operations and our ability to satisfy our obligations under the notes.

 

If we cannot make scheduled payments on our debt, we will be in default and holders of the notes could declare all outstanding principal and interest to be due and payable, the lenders under the New Credit

Facilities could terminate their commitments to loan money, our secured lenders could foreclose against the assets securing their borrowings and we could be forced into bankruptcy or liquidation. All of these events could result in your losing your entire investment in the notes.

 

Despite our current level of indebtedness, we and our subsidiaries may still be able to incur substantially more debt. This could further exacerbate the risks to our financial condition described above and prevent us from fulfilling our obligations under the notes.

 

We and our subsidiaries may be able to incur significant additional indebtedness in the future. Although the Indenture and the New Credit Agreement contain restrictions on the incurrence of additional indebtedness, these restrictions are subject to a number of qualifications and exceptions, and the additional indebtedness incurred in compliance with these restrictions could be substantial. If we incur any additional indebtedness that ranks equally with the notes, subject to collateral arrangements, the holders of that debt will be entitled to share ratably with you in any proceeds distributed in connection with any insolvency, liquidation, reorganization, dissolution or other winding up of our company. This may have the effect of reducing the amount of proceeds paid to you. These restrictions also will not prevent us from incurring obligations that do not constitute indebtedness. In addition, as of September 30, 2010, on a pro forma basis after giving effect to the Transactions, our New Revolving Credit Facility would have provided for unused commitments of $150.0 million (not giving effect to approximately $38.0 million of outstanding letters of credit), which could increase by $450.0 million, subject to certain conditions. All of those borrowings would be secured indebtedness. If new debt is added to our current debt levels, the related risks that we and the guarantors now face could intensify. See “Description of certain indebtedness” and “Description of Notes.”

 

The terms of the New Credit Agreement and the Indenture restrict our current and future operations, particularly our ability to respond to changes or to take certain actions.

 

The Indenture governing the notes and the New Credit Agreement contain a number of restrictive covenants that impose significant operating and financial restrictions on us and may limit our ability to engage in acts that may be in our best interest, including restrictions on our ability to:

 

 

The covenants in the Indenture are subject to important exceptions and qualifications, which are described under “Description of Notes.” Certain of these covenants will cease to apply to the notes at all times when the notes have investment grade ratings from both Moody’s Investor Service, Inc. and Standard & Poor’s.

In addition, the restrictive covenants in the New Credit Agreement require us to maintain specified financial ratios. Our ability to meet those financial ratios can be affected by events beyond our control.

 

A breach of the covenants under the Indenture or under the New Credit Agreement could result in an event of default under the applicable indebtedness. Such a default may allow the creditors to accelerate the related debt and may result in the acceleration of any other debt to which a cross-acceleration or cross-default provision applies. In addition, an event of default under the New Credit Agreement would permit the lenders under our New Credit Facilities to terminate all commitments to extend further credit under the facilities. Furthermore, if we were unable to repay the amounts due and payable under our New Credit Facilities, those lenders could proceed against the collateral granted to them to secure that indebtedness. In the event our lenders or noteholders accelerate the repayment of our borrowings, we and our subsidiaries may not have sufficient assets to repay that indebtedness.

 

The restrictions contained in the Indenture could adversely affect our ability to:

 

 

These restrictions may affect our ability to grow in accordance with our plans.

 

Our variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase significantly.

 

Borrowings under our New Credit Facilities are at variable rates of interest and expose us to interest rate risk. If interest rates increase, our debt service obligations on the variable rate indebtedness will increase even though the amount borrowed remained the same, and our net income and cash flows, including cash available for servicing our indebtedness, will correspondingly decrease. Assuming all revolving loans are fully drawn, each quarter point change in interest rates would result in a $5.0 million change in annual interest expense on our indebtedness under our New Credit Facilities. Following the Transactions, we entered into two deferred premium interest rate caps to hedge interest rate risk under the New Credit Facilities. However, we may not be able to fully mitigate our interest rate risk.

 

The notes are effectively subordinated to our and our guarantors’ indebtedness under the New Credit Facilities and any other future secured indebtedness of us and the guarantors to the extent of the value of the assets securing that indebtedness.

 

The notes are not secured by any of our or our guarantors’ assets. As a result, the notes and the guarantees are effectively subordinated to our and our guarantors’ indebtedness under the New Credit Facilities with respect to the assets that secure that indebtedness. As of September 30, 2010, on a pro forma basis after giving effect to the Transactions, our New Revolving Credit Facility could have provided for unused commitments of $150.0 million (not giving effect to $38.0 million of outstanding letters of credit). In addition, we may incur additional secured debt in the future. The effect of this subordination is that upon a default in payment on, or the acceleration of, any of our secured indebtedness, or in the event of bankruptcy, insolvency, liquidation, dissolution or reorganization of our company or the guarantors of the New Credit Facilities or of that other secured debt, the proceeds from the

sale of assets securing our secured indebtedness will be available to pay obligations on the notes only after all indebtedness under the New Credit Facilities and that other secured debt has been paid in full. As a result, the holders of the notes may receive less, ratably, than the holders of secured debt in the event of our or our guarantors’ bankruptcy, insolvency, liquidation, dissolution or reorganization.

 

The notes are structurally subordinated to all obligations of our existing and future subsidiaries that are not and do not become guarantors of the notes.

 

The notes are guaranteed by Holdings and by each of our existing and subsequently acquired or organized subsidiaries that borrow under or guarantee the New Credit Facilities or that, in the future, guarantee our indebtedness or indebtedness of another guarantor. Our subsidiaries that do not guarantee the notes, including all of our non-domestic subsidiaries, will have no obligation, contingent or otherwise, to pay amounts due under the notes or to make any funds available to pay those amounts, whether by dividend, distribution, loan or other payment. The notes are structurally subordinated to all indebtedness and other obligations of any non-guarantor subsidiary such that in the event of insolvency, liquidation, reorganization, dissolution or other winding up of any subsidiary that is not a guarantor, all of that subsidiary’s creditors (including trade creditors and preferred stockholders, if any) would be entitled to payment in full out of that subsidiary’s assets before we would be entitled to any payment.

 

In addition, the Indenture, subject to some limitations, permits these subsidiaries to incur additional indebtedness and does not contain any limitation on the amount of other liabilities, such as trade payables, that may be incurred by these subsidiaries.

 

For the quarter ended September 30, 2010, our non-guarantor subsidiaries represented 35% of our net revenues, and 21% and 23% of our operating income and our Adjusted EBITDA, respectively, in each case excluding unallocated general and administrative expenses of $39.3 million and net intercompany revenue of $0.3 million. As of September 30, 2010, our non-guarantor subsidiaries represented 28% of our total assets and had $198.9 million of total liabilities, including debt and trade payables but excluding intercompany liabilities.

 

In addition, our subsidiaries that provide, or will provide, guarantees of the notes will be automatically released from those guarantees upon the occurrence of certain events, including the following:

 

 

If any subsidiary guarantee is released, no holder of the notes will have a claim as a creditor against that subsidiary, and the indebtedness and other liabilities, including trade payables and preferred stock, if any, whether secured or unsecured, of that subsidiary will be effectively senior to the claim of any holders of the notes. See “Description of Notes—Guarantees.”

 

We may not be able to repurchase the notes upon a change of control.

 

Upon the occurrence of specific kinds of change of control events, we are required to offer to repurchase all outstanding notes at 101% of their principal amount, plus accrued and unpaid interest to the purchase date. Additionally, under the New Credit Facilities, a change of control (as defined therein) constitutes an event of default that permits the lenders to accelerate the maturity of borrowings under the respective agreements and terminate their commitments to lend. The source of funds for any purchase of the notes and repayment of borrowings under our New Credit Facilities would be our available cash or cash generated from our subsidiaries’ operations or other sources, including borrowings, sales of assets or sales of

equity. We may not be able to repurchase the notes upon a change of control because we may not have sufficient financial resources to purchase all of the debt securities that are tendered upon a change of control and repay our other indebtedness that will become due. We may require additional financing from third parties to fund any such purchases, and we may be unable to obtain financing on satisfactory terms or at all. Further, our ability to repurchase the notes may be limited by law. In order to avoid the obligations to repurchase the notes and events of default and potential breaches of the New Credit Agreement, we may have to avoid certain change of control transactions that would otherwise be beneficial to us.

 

In addition, some important corporate events, such as leveraged recapitalizations, may not, under the Indenture, constitute a “change of control” that would require us to repurchase the notes, even though those corporate events could increase the level of our indebtedness or otherwise adversely affect our capital structure, credit ratings, financial condition or the value of the notes. See “Description of Notes—Change of control.”

 

Holders of the notes may not be able to determine when a change of control giving rise to their right to have the notes repurchased has occurred following a sale of “substantially all” of our assets.

 

The definition of change of control in the Indenture includes a phrase relating to the sale of “all or substantially all” of our assets. There is no precise established definition of the phrase “substantially all” under applicable law. Accordingly, the ability of a holder of notes to require us to repurchase its notes as a result of a sale of less than all our assets to another person may be uncertain.

 

Federal and state fraudulent transfer laws may permit a court to void the notes and/or the guarantees, and if that occurs, you may not receive any payments on the notes.

 

Federal and state fraudulent transfer and conveyance statutes may apply to the issuance of the notes and the incurrence of the guarantees of the notes. Under federal bankruptcy law and comparable provisions of state fraudulent transfer or conveyance laws, which may vary from state to state, the notes or the guarantees thereof could be voided as a fraudulent transfer or conveyance if we or any of the guarantors, as applicable, (a) issued the notes or incurred the guarantees with the intent of hindering, delaying or defrauding creditors or (b) received less than reasonably equivalent value or fair consideration in return for either issuing the notes or incurring the guarantees and, in the case of (b) only, one of the following is also true at the time thereof:

 

 

As a general matter, value is given for a transfer or an obligation if, in exchange for the transfer or obligation, property is transferred or a valid antecedent debt is secured or satisfied. A court would likely find that a subsidiary guarantor did not receive reasonably equivalent value or fair consideration for its guarantee to the extent the guarantor did not obtain a reasonably equivalent benefit directly or indirectly from the issuance of the notes.

 

We cannot be certain as to the standards a court would use to determine whether or not we or the guarantors were insolvent at the relevant time or, regardless of the standard that a court uses, whether the

notes or the guarantees would be subordinated to our or any of our guarantors’ other debt. In general, however, a court would deem an entity insolvent if:

 

 

If a court were to find that the issuance of the notes or the incurrence of a guarantee was a fraudulent transfer or conveyance, the court could void the payment obligations under the notes or that guarantee, could subordinate the notes or that guarantee to presently existing and future indebtedness of ours or of the related guarantor or could require the holders of the notes to repay any amounts received with respect to that guarantee. In the event of a finding that a fraudulent transfer or conveyance occurred, you may not receive any repayment on the notes. Further, the avoidance of the notes could result in an event of default with respect to our and our subsidiaries’ other debt that could result in acceleration of that debt.

 

Finally, as a court of equity, the bankruptcy court may subordinate the claims in respect of the notes to other claims against us under the principle of equitable subordination if the court determines that (1) the holder of notes engaged in some type of inequitable conduct, (2) the inequitable conduct resulted in injury to our other creditors or conferred an unfair advantage upon the holders of notes and (3) equitable subordination is not inconsistent with the provisions of the Bankruptcy Code.

 

A lowering or withdrawal of the ratings assigned to our debt securities by rating agencies may increase our future borrowing costs and reduce our access to capital.

 

The Original Notes have, and the Exchange Notes will have, a non-investment grade rating, and any rating assigned could be lowered or withdrawn entirely by a rating agency if, in that rating agency’s judgment, future circumstances relating to the basis of the rating, such as adverse changes, so warrant. Consequently, real or anticipated changes in our credit ratings will generally affect the market value of the notes. Credit ratings are not recommendations to purchase, hold or sell the notes. Additionally, credit ratings may not reflect the potential effect of risks relating to the structure or marketing of the notes. Any downgrade by either Standard & Poor’s or Moody’s would increase the interest rate on our New Credit Facilities, decrease our earnings and may result in higher borrowing costs.

 

Any future lowering of our ratings likely would make it more difficult or more expensive for us to obtain additional debt financing. If any credit rating initially assigned to the notes is subsequently lowered or withdrawn for any reason, you may not be able to resell your notes at a favorable price or at all.

 

Many of the covenants in the Indenture will not apply during any period in which the notes are rated investment grade by both Moody’s and Standard & Poor’s.

 

Many of the covenants in the Indenture will not apply to us during any period in which the notes are rated investment grade by both Moody’s and Standard & Poor’s, provided at such time no default or event of default has occurred and is continuing. These covenants will restrict, among other things, our ability to pay distributions, incur debt and to enter into certain other transactions. There can be no assurance that the notes will ever be rated investment grade, or that if they are rated investment grade, that the notes will maintain these ratings. However, suspension of these covenants would allow us to engage in certain transactions that would not be permitted while these covenants were in force. To the extent the covenants are subsequently reinstated, any such actions taken while the covenants were suspended would not result in an event of default under the Indenture. See “Description of Notes—Certain covenants—Effectiveness of covenants.”

 

This prospectus and the documents that are incorporated by reference into this prospectus contain “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These statements concern expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. Specifically, this prospectus and the documents incorporated by reference into this prospectus contain forward-looking statements regarding:

 

 

These forward-looking statements reflect our current views about future events and are subject to risks, uncertainties and assumptions. We wish to caution readers that certain important factors may have affected and could in the future affect our actual results and could cause actual results to differ significantly from those expressed in any forward-looking statement. The most important factors that could prevent us from achieving our goals, and cause the assumptions underlying forward-looking statements and the actual results to differ materially from those expressed in or implied by those forward-looking statements include, but are not limited to, the following:

 

 

The Exchange Offer is intended to satisfy our obligations under the registration rights agreement entered into in connection with the issuance of the Original Notes. We will not receive any cash proceeds from the issuance of the Exchange Notes in the Exchange Offer.

 

In consideration for issuing the Exchange Notes as contemplated by this prospectus, we will receive the Original Notes in like principal amount. The Original Notes surrendered and exchanged for the Exchange Notes will be retired and canceled and cannot be reissued.

 

The selected historical consolidated financial and other data of Holdings for the fiscal years ended June 30, 2010, 2009 and 2008 and as of June 30, 2010 and 2009, have been derived from Holdings’ audited financial statements incorporated by reference in this prospectus. The historical consolidated financial and other data of Holdings for the fiscal years ended June 30, 2007 and 2006 and as of June 30, 2008, 2007 and 2006 have been derived from Holdings’ audited financial statements that are not incorporated by reference in this prospectus. The selected historical consolidated financial information of Holdings for the three months ended September 30, 2010 and 2009 and as of September 30, 2010 and 2009 are derived from Holdings’ unaudited consolidated financial statements incorporated by reference in this prospectus. The information set forth below is not necessarily indicative or predictive of results of future operations and should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and related notes thereto contained in Holdings’ Annual Report on Form 10-K for the fiscal year ended June 30, 2010, Holdings’ Quarterly Report on Form 10-Q for the quarter ended September 30, 2010 and Holdings’ Current Reports on Form 8-K filed with the SEC on November 12, 2010, which are incorporated by reference in this prospectus.

 

 

⁽¹⁾ EBITDA is defined as earnings (net income) before interest, taxes, depreciation and amortization, and is used by management to measure operating performance of the business. We also use EBITDA as a measure to calculate certain incentive based compensation and certain financial covenants related to our credit facility and as a factor in our tangible and intangible asset impairment test. Management believes EBITDA is a useful measure of operating performance. The following table is a reconciliation of our net income to EBITDA:

 

 

Unaudited pro forma condensed consolidated financial information

 

The following unaudited pro forma condensed consolidated financial information has been derived by the application of pro forma adjustments related to the Transactions to our historical consolidated financial statements incorporated by reference in this prospectus. The unaudited pro forma condensed consolidated balance sheet data as of September 30, 2010 gives effect to the Transactions as if they had occurred on that date. The unaudited pro forma condensed consolidated statement of income for the three months ended September 30, 2010 gives effect to the Transactions as if they had occurred on July 1, 2010.

 

The unaudited pro forma adjustments are based upon available information and certain assumptions that we believe are reasonable under the circumstances. The unaudited pro forma condensed consolidated financial information is presented for information purposes only and does not purport to represent what our actual consolidated results of operations or consolidated financial condition would have been had the Transactions actually occurred on the dates indicated, nor do they purport to project our future consolidated results of operations or consolidated financial condition for any future period or as of any future date. The unaudited pro forma condensed consolidated financial information should be read in conjunction with the information included under the headings “Prospectus Summary,” “Selected Financial Data,” and our historical consolidated financial statements and related notes incorporated by reference in this prospectus. All pro forma adjustments and their underlying assumptions are described more fully in the notes to our unaudited pro forma condensed consolidated financial information.

 

The Merger is being accounted for as a business combination using the acquisition method of accounting and, accordingly, will result in the recognition of assets acquired and liabilities assumed at fair value. However, as of the date of this prospectus, we have not performed the valuation studies necessary to estimate the fair values of the assets we acquired and the liabilities we assumed necessary to reflect the allocation of purchase price to the fair value of such amounts. For the purpose of computing the pro forma adjustments, we have assumed the write-off of our existing finite-lived intangible assets and liabilities associated with prior acquisitions as the fair value of these assets and liabilities will be re-estimated as part of the Merger. The excess of the consideration transferred over the net assets acquired has been presented as an adjustment of indefinite-lived intangible assets (the Burger King brand and goodwill). We have not estimated the fair value of assets acquired and liabilities assumed, including, but not limited to: property and equipment, net investment in property leased to franchisees, capital leases, other miscellaneous liabilities, deferred gift card revenue, and favorable and unfavorable leases and other finite-lived intangible assets and liabilities, except with respect to the Burger King brand for which we performed a valuation in connection with our impairment review during the fourth quarter of fiscal year 2010. A final determination of these fair values will reflect appraisals prepared by independent third parties and will be based on the actual tangible and identifiable intangible assets and liabilities that existed as of the Merger date. The actual allocation of the consideration transferred will differ from the allocation assumed in these unaudited pro forma condensed consolidated financial statements and will also result in material adjustments to the unaudited pro forma condensed consolidated financial information, including but not limited to: property revenue; occupancy and other operating costs; selling, general and administrative expenses; property expenses; and income tax expense. The pro forma condensed consolidated statement of income does not reflect such expenses and such expenses may be significant.

BURGER KING HOLDINGS, INC. AND SUBSIDIARIES
Unaudited Pro Forma Condensed Consolidated Balance Sheet
As of September 30, 2010
(In millions)

 

 

See accompanying notes to unaudited pro forma condensed balance sheet.

Notes to unaudited pro forma condensed consolidated balance sheet

 

 

 

 

We have not estimated the fair value of assets acquired and liabilities assumed, including, but not limited to: property and equipment; net investment in property leased to franchisees; capital leases; other miscellaneous liabilities; deferred gift card revenue; and favorable and unfavorable leases and other finite-lived intangible assets and liabilities, except with respect to the Burger King brand. For purposes of computing the pro forma adjustments, we have assumed the write-off of our existing finite-lived intangible assets and liabilities associated with prior acquisitions as the fair value of these assets and liabilities will be re-estimated as part of the Merger. In conjunction with our annual impairment testing of indefinite-lived intangible assets as of April 1, 2010, the fair value of the Burger King brand was estimated at approximately $2,379.0 million and such fair value is being used as an estimate of fair value as of September 30, 2010 for purposes of preparing these unaudited pro forma condensed consolidated financial statements. We have assumed the historical amount as of September 30, 2010 of our pension and post-retirement liabilities of $109.8 million approximates fair value for purposes of preparing these pro forma condensed consolidated financial statements.

 

A final determination of these fair values will reflect appraisals prepared by independent third parties and will be based on the actual tangible and identifiable intangible assets and liabilities that existed as of the Merger date. The actual allocation of the consideration transferred will differ from the

allocation assumed in these unaudited pro forma condensed consolidated financial statements and may be materially different.

 

The following table sets forth the preliminary allocation of consideration (in millions):

 

 

 

 

 

 

 

 

 

The adjustments are based on balances as of September 30, 2010. Any changes at the closing date of the Transactions to the amounts owed on our existing credit facility and the revolving portion of our existing credit facility and the liability under our interest rate swap agreements from the respective amounts at September 30, 2010 may or may not be material. No adjustments have been made to the unaudited pro forma financial statements for any changes in these balances subsequent to September 30, 2010.

 

 

 

BURGER KING HOLDINGS, INC. AND SUBSIDIARIES
Unaudited Pro Forma Condensed Consolidated Statement of Income
For the three months ended September 30, 2010
(In millions)

 

 

See accompanying notes to unaudited pro forma condensed consolidated statement of income.

Notes to Unaudited Pro Forma Condensed Consolidated Statement of Income

 

 

As a direct result of the Transactions, the Company expects to incur certain material, nonrecurring charges in the amount of an estimated $74.3 million during the 12 months succeeding the Merger date. These charges include financial advisory fees, legal, accounting, other professional fees, compensation related to arrangements with certain key executives, and commitment fees associated with the bridge loan available at the closing of the Transactions. Due to the absence of a continuing impact on our operations, these charges have been excluded from the pro forma adjustments reflected here.

 

 

 

 

We have not estimated the fair value of favorable and unfavorable leases and other finite-lived intangible assets and liabilities as of September 30, 2010 and we have assumed the write-off of our existing finite-lived intangible assets and liabilities associated with prior acquisitions (which includes favorable and unfavorable leases); therefore, the unaudited pro forma statement of income does not reflect any amortization relating to intangible assets and liabilities in the form of favorable and unfavorable leases.

 

 

 

 

 

The estimated interest expense rate set forth above is solely for illustrative purposes and reflects assumptions with respects to the debt financing for the Transactions.

 

 

Purpose of the Exchange Offer

 

In connection with the issuance of the Original Notes, we entered into a registration rights agreement with the initial purchasers, under which we agreed to file with the SEC and to use our reasonable best efforts to cause to become effective an exchange offer registration statement under the Securities Act and to consummate the Exchange Offer.

 

We are making the Exchange Offer in reliance on the position of the SEC as set forth in certain no-action letters. However, we have not sought our own no-action letter. Based upon these interpretations by the SEC, we believe that a holder of Exchange Notes who exchanges Original Notes for Exchange Notes in the Exchange Offer generally may offer the Exchange Notes for resale, sell the Exchange Notes and otherwise transfer the Exchange Notes without further registration under the Securities Act and without delivery of a prospectus that satisfies the requirements of Section 10 of the Securities Act. This does not apply, however, to a holder who is our “affiliate” within the meaning of Rule 405 of the Securities Act. We also believe that a holder may offer, sell or transfer the Exchange Notes only if the holder acknowledges that the holder is acquiring the Exchange Notes in the ordinary course of its business and is not participating, does not intend to participate and has no arrangement or understanding with any person to participate in a distribution of the Exchange Notes.

 

Any holder of the Original Notes using the Exchange Offer to participate in a distribution of Exchange Notes cannot rely on the no-action letters referred to above. Any broker-dealer who holds Original Notes acquired for its own account as a result of market-making activities or other trading activities and who receives Exchange Notes in exchange for such Original Notes pursuant to the Exchange Offer may be a statutory underwriter and must deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of such Exchange Notes. See “Plan of Distribution.”

 

Each broker-dealer that receives Exchange Notes for its own account in exchange for Original Notes, where such Original Notes were acquired by such broker-dealer as a result of market-making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Notes. See “Plan of Distribution.”

 

Except as described above, this prospectus may not be used for an offer to resell, resale or other transfer of Exchange Notes.

 

The Exchange Offer is not being made to, nor will we accept tenders for exchange from, holders of Original Notes in any jurisdiction in which the Exchange Offer or the acceptance of the Exchange Offer would not be in compliance with the securities or blue sky laws of such jurisdiction.

 

Terms of the Exchanges

 

Upon the terms and subject to the conditions of the Exchange Offer, we will accept any and all Original Notes validly tendered prior to 12:00 midnight, New York City time, on the expiration date for the Exchange Offer. Promptly after the expiration date (unless extended as described in this prospectus), we will issue an aggregate principal amount of up to $800,000,000 of Exchange Notes for a like principal amount of outstanding Original Notes tendered and accepted in connection with the Exchange Offer.

 

The Exchange Notes issued in connection with the Exchange Offer will be delivered promptly after the expiration date. Holders may tender some or all of their Original Notes in connection with the Exchange Offer, but only in principal amounts of $2,000 or in integral multiples of $1,000 in excess thereof.

 

The terms of the Exchange Notes will be identical in all material respects to the terms of the Original Notes, except that the Exchange Notes will have been registered under the Securities Act and will be issued

free from any covenant regarding registration, including the payment of special interest upon a failure to complete the Exchange Offer by a certain date. The Exchange Notes will evidence the same debt as the Original Notes and will be issued under the same Indenture and be entitled to the same benefits under that Indenture as the Original Notes being exchanged. As of the date of this prospectus, $800,000,000 in aggregate principal amount of the Original Notes are outstanding.

 

In connection with the issuance of the Original Notes, we arranged for the Original Notes purchased by qualified institutional buyers and those sold in reliance on Regulation S under the Securities Act to be issued and transferable in book-entry form through the facilities of DTC, acting as depositary. Except as described under “Book-Entry Settlement and Clearance,” Exchange Notes will be issued in the form of a global note registered in the name of DTC or its nominee and each beneficial owner’s interest in it will be transferable in book-entry form through DTC. See “Book-Entry Settlement and Clearance.”

 

Holders of Original Notes do not have any appraisal or dissenters’ rights in connection with the Exchange Offer. Original Notes that are not tendered for exchange or are tendered but not accepted in connection with the Exchange Offer will remain outstanding and be entitled to the benefits of the Indenture, but certain registration and other rights under the registration rights agreement will terminate and holders of the Original Notes will generally not be entitled to any registration rights under the registration rights agreement. See “— Consequences of Failures to Properly Tender Original Notes in the Exchange Offer.”

 

We shall be considered to have accepted validly tendered Original Notes if and when we have given oral (to be followed by prompt written notice) or written notice to the Exchange Agent. The Exchange Agent will act as agent for the tendering holders for the purposes of receiving the Exchange Notes from us.

 

If any tendered Original Notes are not accepted for exchange because of an invalid tender, the occurrence of certain other events described in this prospectus or otherwise, we will return the Original Notes, without expense, to the tendering holder promptly after the expiration date for the Exchange Offer.

 

Holders who tender Original Notes will not be required to pay brokerage commissions or fees or, subject to the instructions in the letter of transmittal, transfer taxes on exchange of Original Notes in connection with the Exchange Offer. We will pay all charges and expenses, other than certain applicable taxes described below, in connection with the Exchange Offer. See “—Fees and Expenses”.

 

Expiration Date; Extensions; Amendments

 

The expiration date for the Exchange Offer is 12:00 midnight, New York City time, on [20 business days after commencement], unless extended by us in our sole discretion, in which case the term “expiration date” shall mean the latest date and time to which the Exchange Offer is extended.

 

We reserve the right, in our sole discretion:

 

 

If we amend the Exchange Offer in a manner that we consider material, we will disclose such amendment by means of a prospectus supplement, and we will extend the Exchange Offer for a period of five to ten business days, as required by law.

If we determine to extend, amend or terminate the Exchange Offer, we will publicly announce this determination by making a timely release through an appropriate news agency prior to 9:00am., New York City time, on the next business day after the scheduled expiration date.

 

During any extension, all Original Notes previously tendered will remain subject to the Exchange Offer and may be accepted for exchange by us only upon expiration of the Exchange Offer, unless validly withdrawn. If we terminate the Exchange Offer, we will promptly return any Original Notes deposited, pursuant to the Exchange Offer as required by Rule 14e-1(c).

 

Interest on the Exchange Notes

 

The Exchange Notes will bear interest at the rate of 97/8% per annum from the most recent date to which interest on the Original Notes has been paid. Interest will be payable semi-annually on October 15 and April 15 of each year, commencing April 15, 2011.

 

Conditions to the Exchange Offer

 

Notwithstanding any other provisions of the Exchange Offer, or any extension of the Exchange Offer, we will not be required to accept for exchange, or to exchange any Exchange Notes for any of the Original Notes and we may terminate the Exchange Offer or, at our option, modify, extend or otherwise amend the Exchange Offer, if any of the following conditions exist on or prior to the expiration date:

 

 

(a) challenges the making of the Exchange Offer or the exchange of Original Notes for Exchange Notes under the Exchange Offer or might, directly or indirectly, be expected to prohibit, prevent, restrict or delay consummation of, or might otherwise adversely affect in any material manner, the Exchange Offer or the exchange of Original Notes for the Exchange Notes under the Exchange Offer; or

 

(b) in our reasonable judgment, could materially adversely affect our (or our subsidiaries’) or Holdings’ business, condition (financial or otherwise), income, operations, properties, assets, liabilities or prospects or materially impair the contemplated benefits to us of the Exchange Offer or the exchange of Original Notes for the Exchange Notes under the Exchange Offer;

 

 

 

The foregoing conditions are for our sole benefit and may be waived by us, in whole or in part, in our absolute discretion. Any determination made by us concerning an event, development or circumstance described or referred to above will be conclusive and binding.

 

If any of the foregoing conditions are not satisfied, we may, at any time on or prior to the expiration date:

 

 

Effect of Tender

 

Any tender by a holder, and our subsequent acceptance of that tender, of Original Notes will constitute a binding agreement between that holder and us upon the terms and subject to the conditions of the Exchange Offer described in this prospectus and in the letter of transmittal. The participation in the Exchange Offer by a tendering holder of Original Notes will constitute the agreement by that holder to deliver good and marketable title to the tendered Original Notes, free and clear of any and all liens, restrictions, charges, pledges, security interests, encumbrances or rights of any kind of third parties.

 

Absence of Dissenters’ Rights

 

Holders of the Original Notes do not have any appraisal or dissenters’ rights in connection with the Exchange Offer.

 

Procedures for Tendering

 

If you wish to participate in the Exchange Offer and your Original Notes are held by a custodial entity such as a bank, broker, dealer, trust company or other nominee, you must instruct that custodial entity to tender your Original Notes on your behalf pursuant to the procedures of that custodial entity. Please ensure you contact your custodial entity as soon as possible to give them sufficient time to meet your requested deadline.

 

To participate in the Exchange Offer, you must either:

 

 

 

The Exchange Agent and DTC have confirmed that the Exchange Offer is eligible for ATOP with respect to book-entry notes held through DTC. The letter of transmittal, or a facsimile thereof, with any required signature guarantees, or, in the case of book-entry transfer, an agent’s message in lieu of the letter of transmittal, and any other required documents, must be transmitted to and received by the Exchange Agent on or prior to the expiration date at its address set forth below under the caption “Exchange Agent.” Original Notes will not be deemed to have been tendered until the letter of transmittal and signature guarantees, if any, or agent’s message, is received by the Exchange Agent.

 

Holders of Original Notes whose certificates for Original Notes are not lost but are not immediately available or who cannot deliver their certificates and all other documents required by the letter of transmittal to the Exchange Agent at prior to 12:00 midnight, New York City time, on the expiration date, or who cannot complete the procedures for book-entry transfer at or prior to 12:00 midnight, New York City time, on the expiration date, may tender their Original Notes according to the guaranteed delivery procedures set forth in “—Guaranteed Delivery Procedures” below.

 

The tender by a holder of Original Notes will constitute an agreement between us and the holder in accordance with the terms and subject to the conditions set forth in this prospectus and in the letter of transmittal.

 

The method of delivery of Original Notes, the letter of transmittal and all other required documents to the Exchange Agent is at the election and risk of the holders. Instead of delivery by mail, we recommend that holders use an overnight or hand delivery service, properly insured. In all cases, sufficient time should be allowed to assure delivery to and receipt by the Exchange Agent on or prior to the expiration date. Do not send the letter of transmittal or any Original Notes to anyone other than the Exchange Agent.

 

If you are tendering your Original Notes in exchange for the Exchange Notes and anticipate delivering your letter of transmittal and other documents other than through DTC, we urge you to contact promptly a bank, broker or other intermediary that has the capability to hold notes custodially through DTC to arrange for receipt of any Original Notes to be delivered pursuant to the Exchange Offer and to obtain the information necessary to provide the required DTC participant with account information in the letter of transmittal.

 

If you are a beneficial owner which holds Original Notes through Euroclear (as defined herein) or Clearstream (as defined herein) and wish to tender your Original Notes, you must instruct Euroclear or Clearstream, as the case may be, to block the account in respect of the tendered Original Notes in accordance with the procedures established by Euroclear or Clearstream. You are encouraged to contact Euroclear and Clearstream directly to ascertain their procedure for tendering Original Notes.

 

Book-Entry Delivery Procedures for Tendering Original Notes Held with DTC

 

If you wish to tender Original Notes held on your behalf by a nominee with DTC, you must:

 

 

 

Any financial institution that is a nominee in DTC, including Euroclear and Clearstream, must tender Original Notes by effecting a book-entry transfer of Original Notes to be tendered in the Exchange Offer into the account of the Exchange Agent at DTC by electronically transmitting its acceptance of the Exchange Offer through the ATOP procedures for transfer. DTC will then verify the acceptance, execute a book-entry delivery to the Exchange Agent’s account at DTC and send an agent’s message to the Exchange Agent. An “agent’s message” is a message, transmitted by DTC to, and received by, the Exchange Agent and forming part of a book-entry confirmation, which states that DTC has received an express acknowledgement from an organization that participates in DTC (a “participant”), tendering Original Notes that the participant has received and agrees to be bound by the terms of the letter of transmittal and that we may enforce the agreement against the participant. A letter of transmittal need not accompany tenders effected through ATOP.

 

Proper Execution and Delivery of the Letter of Transmittal

 

Signatures on a letter of transmittal or notice of withdrawal described under “—Withdrawal of Tenders,” as the case may be, must be guaranteed by an eligible guarantor institution unless the Original Notes tendered pursuant to the letter of transmittal are tendered for the account of an eligible guarantor institution. An “eligible guarantor institution” is one of the following firms or other entities identified in Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (as the terms are used in Rule 17Ad-15):

 

 

If signatures on a letter of transmittal or notice of withdrawal are required to be guaranteed, that guarantee must be made by an eligible institution.

 

If the letter of transmittal is signed by the holders of Original Notes tendered thereby, the signatures must correspond with the names as written on the face of the Original Notes without any change whatsoever. If any of the Original Notes tendered thereby are held by two or more holders, each holder must sign the letter of transmittal. If any of the Original Notes tendered thereby are registered in different names on different Original Notes, it will be necessary to complete, sign and submit as many separate letters of transmittal, and any accompanying documents, as there are different registrations of certificates.

 

If Original Notes that are not tendered for exchange pursuant to the Exchange Offer are to be returned to a person other than the tendering holder, certificates for those Original Notes must be endorsed or accompanied by an appropriate instrument of transfer, signed exactly as the name of the registered owner appears on the certificates, with the signatures on the certificates or instruments of transfer guaranteed by an eligible guarantor institution.

 

If the letter of transmittal is signed by a person other than the holder of any Original Notes listed in the letter of transmittal, those Original Notes must be properly endorsed or accompanied by a properly completed bond power, signed by the holder exactly as the holder’s name appears on those Original Notes. If

the letter of transmittal or any Original Notes, bond powers or other instruments of transfer are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, those persons should so indicate when signing, and, unless waived by us, evidence satisfactory to us of their authority to so act must be submitted with the letter of transmittal.

 

No alternative, conditional, irregular or contingent tenders will be accepted. By executing the letter of transmittal, or facsimile thereof, the tendering holders of Original Notes waive any right to receive any notice of the acceptance for exchange of their Original Notes. Tendering holders should indicate in the applicable box in the letter of transmittal the name and address to which payments and/or substitute certificates evidencing Original Notes for amounts not tendered or not exchanged are to be issued or sent, if different from the name and address of the person signing the letter of transmittal. If those instructions are not given, Original Notes not tendered or exchanged will be returned to the tendering holder.

 

All questions as to the validity, form, eligibility, including time of receipt, and acceptance and withdrawal of tendered Original Notes will be determined by us in our absolute discretion, which determination will be final and binding. We reserve the absolute right to reject any and all tendered Original Notes determined by us not to be in proper form or not to be tendered properly or any tendered Original Notes our acceptance of which would, in the opinion of our counsel, be unlawful. We also reserve the right to waive, in our absolute discretion, any defects, irregularities or conditions of tender as to particular Original Notes, whether or not waived in the case of other Original Notes. Our interpretation of the terms and conditions of the Exchange Offer, including the terms and instructions in the letter of transmittal, will be final and binding on all parties. Unless waived, any defects or irregularities in connection with tenders of Original Notes must be cured within the time we determine. Neither we, the Exchange Agent nor any other person will be under any duty to notify holders of defects or irregularities with respect to tenders of Original Notes, nor shall any such party incur any liability for failure to give that notification. Tenders of Original Notes will not be deemed to have been made until any defects or irregularities therein have been cured or waived.

 

Any holder whose Original Notes have been mutilated, lost, stolen or destroyed will be responsible for obtaining replacement securities or for arranging for indemnification with the trustee of the Original Notes. Holders may contact the Exchange Agent for assistance with these matters.

 

In addition, we reserve the right, as set forth above under the caption “—Conditions to the Exchange Offer,” to terminate the Exchange Offer. By tendering, each holder represents and acknowledges to us, among other things, that:

 

 

Guaranteed Delivery Procedures

 

If your certificates for Original Notes are not lost but are not immediately available or you cannot deliver your certificates and any other required documents to the Exchange Agent at or prior to 12:00 midnight, New York City time, on the expiration date, or you cannot complete the procedures for book-entry transfer at or prior to 12:00 midnight, New York City time, on the expiration date, you may nevertheless effect a tender of your Original Notes if: