EXHIBIT
1.1
UNDERWRITING
AGREEMENT
BURGER KING HOLDINGS,
INC.
_____ Shares of Common
Stock
Underwriting
Agreement
________________,
2006
J.P. Morgan
Securities Inc.
Citigroup Global
Markets Inc.
Goldman, Sachs
& Co.
Morgan Stanley
& Co. Incorporated
As
Representatives of the
several
Underwriters listed
in Schedule
1 hereto
c/o J.P. Morgan Securities
Inc.
277 Park
Avenue
New York, New York
10172
and
Citigroup Global
Markets Inc.
388 Greenwich
Street
New York, New York
10013
and
Goldman, Sachs
& Co.
85 Broad
Street
New York, New York
10004
and
Morgan Stanley
& Co. Incorporated
1585
Broadway
New York, New York
10036
Ladies and
Gentlemen:
Burger King Holdings, Inc., a
Delaware corporation (the “ Company ”), proposes
to issue and sell, and each of the stockholders listed on Schedule
2 hereto (each a “ Selling Stockholder ” and,
together, the “ Selling Stockholders ”),
proposes to sell, severally and not jointly, to the several
Underwriters listed on Schedule 1 hereto (the “
Underwriters ”), for whom you are acting as
representatives (the “ Representatives ”), an
aggregate of _______ shares of common stock, par value $0.01 per
share, of the Company (the “ Underwritten Shares
”) and, at the option of the Underwriters, the Company
proposes to issue and sell and the Selling Stockholders propose to
sell, severally and not jointly, up to an additional ________
shares of common stock of the
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Company (the
“ Option Shares ”), as set forth on Schedule 2
hereto. The Underwritten Shares and the Option Shares are herein
referred to as the “ Shares ”. The shares of
common stock of the Company to be outstanding after giving effect
to the sale of the Shares are herein referred to as the “
Stock ”.
Morgan Stanley & Co.
Incorporated (“ Morgan Stanley ”) has agreed to
reserve a portion of the Shares to be purchased by it under this
Agreement, up to
Shares,
for sale to the Company’s directors, officers, and certain
employees and franchisees and other parties related to the Company
(collectively, “ Participants ”), as set forth
in the Prospectus (as hereinafter defined) under the heading
“Underwriting” (the “ Directed Share
Program ”). The Shares to be sold by Morgan Stanley and
its affiliates pursuant to the Directed Share Program are referred
to hereinafter as the “ Directed Shares ”. Any
Directed Shares not orally confirmed for purchase by any
Participant by 11:00 p.m. New York City time on the business day on
which this Agreement is executed will be offered to the public by
the Underwriters as set forth in the Prospectus.
The Company and the Selling
Stockholders hereby confirm their agreement with the several
Underwriters concerning the purchase and sale of the Shares, as
follows:
1. Registration
Statement . The Company has prepared and
filed with the Securities and Exchange Commission (the “
Commission ”) under the Securities Act of 1933, as
amended, and the rules and regulations of the Commission thereunder
(collectively, the “ Securities Act ”), a
registration statement (File No. 333-131897) including a
prospectus, relating to the Shares. Such registration statement, as
amended at the time it becomes effective, including the
information, if any, deemed pursuant to Rule 430A under the
Securities Act to be part of the registration statement at the time
of its effectiveness (“ Rule 430A Information
”), is referred to herein as the “ Registration
Statement ”; and as used herein, the term “
Preliminary Prospectus ” means each prospectus
included in such registration statement (and any amendments
thereto) before it becomes effective, any prospectus filed with the
Commission pursuant to Rule 424(a) under the Securities Act and the
prospectus included in the Registration Statement at the time of
its effectiveness that omits Rule 430A Information, and the term
“ Prospectus ” means the prospectus in the form
first used (or made available upon request of purchasers pursuant
to Rule 173 under the Securities Act) in connection with
confirmation of sales of the Shares. If the Company has filed an
abbreviated registration statement pursuant to Rule 462(b) under
the Securities Act (the “ Rule 462 Registration
Statement ”), then any reference herein to the term
“ Registration Statement ” shall be deemed to
include such Rule 462 Registration Statement. Capitalized terms
used but not defined herein shall have the meanings given to such
terms in the Registration Statement and the Prospectus.
At or prior to the time when
sales of the Shares were first made (the “ Time of
Sale ”), the Company had prepared the following
information (collectively with the pricing information set forth on
Annex A , the “ Time of Sale Information
”): a Preliminary Prospectus dated _____________, 2006, and
each “free-writing prospectus” (as defined pursuant to
Rule 405 under the Securities Act) listed on Annex A
hereto.
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2. Purchase of the Shares by the
Underwriters . (a) The Company agrees to
issue and sell, and each of the Selling Stockholders agrees,
severally and not jointly, to sell, the Shares to the several
Underwriters as provided in this Agreement, and each Underwriter,
on the basis of the representations, warranties and agreements set
forth herein and subject to the conditions set forth herein,
agrees, severally and not jointly, to purchase from the Company and
each of the Selling Stockholders the respective number of
Underwritten Shares set forth opposite such Underwriter’s
name in Schedule 1 hereto at a price per share (the “
Purchase Price ”) of $
. The
public offering price of the Shares is not in excess of the price
recommended
by ,
acting as a “qualified independent underwriter” within
the meaning of Rule 2720 of the Rules of Conduct of the National
Association of Securities Dealers, Inc. (the “ NASD
”).
The Company hereby confirms
its engagement of
as, and
hereby
confirms its agreement with the Company to render services as, a
“qualified independent underwriter” within the meaning
of Rule 2720(b)(15) of the NASD with respect to the offering and
sale of the Shares.
In addition, the Company
agrees to issue and sell, and the Selling Stockholders, as and to
the extent indicated in Schedule 2 hereto, agree, severally and not
jointly, to sell the Option Shares to the several Underwriters as
provided in this Agreement, and the Underwriters, on the basis of
the representations, warranties and agreements set forth herein and
subject to the conditions set forth herein, shall have the option
to purchase, severally and not jointly, from the Company and the
Selling Stockholders the Option Shares at the Purchase Price. Any
election to purchase Option Shares shall be made in proportion to
the maximum number of Option Shares to be sold by the Company and
each Selling Stockholder as set forth in Schedule 2
hereto.
The Underwriters may exercise
the option to purchase the Option Shares at any time in whole, or
in part on no more than two occasions, on or before the thirtieth
day following the date of this Agreement, by written notice from
the Representatives to the Company and the Attorney-in-Fact (as
hereinafter defined). Such notice shall set forth the aggregate
number of Option Shares as to which the option is being exercised
and the date and time when the Option Shares are to be delivered
and paid for which may be the same date and time as the Closing
Date (as hereinafter defined) but shall not be earlier than the
Closing Date nor later than the tenth full business day (as
hereinafter defined) after the date of such notice (unless such
time and date are postponed in accordance with the provisions of
Section 12 hereof). Any such notice shall be given at least two
Business Days prior to the date and time of delivery specified
therein.
(b) The Company and the
Selling Stockholders understand that the Underwriters intend to
make a public offering of the Shares as soon after the
effectiveness of this Agreement as in the judgment of the
Representatives is advisable, and initially to offer the Shares on
the terms set forth in the Prospectus. The Company and the Selling
Stockholders acknowledge and agree that the Underwriters may offer
and sell Shares to or through any affiliate of an Underwriter and
that any such affiliate may offer and sell Shares purchased by it
to or through any Underwriter.
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(c) Payment for the Shares shall
be made by wire transfer in immediately available funds to the
accounts specified by the Company and the Attorney-in-Fact to the
Representatives in the case of the Underwritten Shares, at the New
York City offices of Cleary Gottlieb Steen & Hamilton LLP at
10:00 A.M. New York City time on _____, 2006, or at such other time
or place on the same or such other date, not later than the fifth
business day thereafter, as the Representatives and the Company may
agree upon in writing or, in the case of the Option Shares, on the
date and at the time and place specified by the Representatives in
the written notice of the Underwriters’ election to purchase
such Option Shares. The time and date of such payment for the
Underwritten Shares is referred to herein as the “ Closing
Date ” and the time and date for such payment for the
Option Shares, if other than the Closing Date, is herein referred
to as the “ Additional Closing Date
”.
Payment for the Shares to be
purchased on the Closing Date or the Additional Closing Date, as
the case may be, shall be made against delivery to the
Representatives for the respective accounts of the several
Underwriters of the Shares to be purchased on such date in
definitive form registered in such names and in such denominations
as the Representatives shall request in writing not later than two
full business days prior to the Closing Date or the Additional
Closing Date, as the case may be, with any transfer taxes payable
in connection with the sale of the Shares duly paid by the Company
and the Selling Stockholders. The Shares to be purchased on the
Closing Date or the Additional Closing Date, as the case may be,
shall be delivered by or on behalf of the Representatives through
the facilities of The Depository Trust Company (“DTC”),
for the respective accounts of the several Underwriters, against
payment by or on behalf of such Underwriter of the purchase price
therefore by wire transfer of federal (same-day) funds to the
accounts specified by the Company and the Selling Stockholders to
the Representatives at least two full business days prior to the
Closing Date or the Additional Closing Date, as the case may be.
The Company and the Selling Shareholders will cause any
certificate(s) representing the Shares to be made available for
checking and packaging at least 24 hours prior to the Closing Date
or the Additional Closing Date, as the case may be, with respect
thereto at the offices of DTC or its designated
custodian.
(d) Each of the Company and the
Selling Stockholders acknowledges and agrees that the Underwriters
are acting solely in the capacity of an arm’s length
contractual counterparty to the Company and the Selling
Stockholders with respect to the offering of Shares contemplated
hereby (including in connection with determining the terms of the
offering) and not as a financial advisor or a fiduciary to, or an
agent of, the Company, any of the Selling Stockholders or any other
person. Additionally, neither the Representatives nor any other
Underwriter is advising the Company, any of the Selling
Stockholders or any other person as to any legal, tax, investment,
accounting or regulatory matters in any jurisdiction. The Company
and the Selling Stockholders shall consult with their own advisors
concerning such matters and shall be responsible for making their
own independent investigation and appraisal of the transactions
contemplated hereby, and the Underwriters shall have no
responsibility or liability to the Company or the Selling
Stockholders with respect thereto. Any review by the Underwriters
of the Company, the transactions contemplated hereby or other
matters relating to such transactions will be performed solely for
the benefit of the Underwriters and shall not be on behalf of the
Company or the Selling Stockholders.
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3. Representations and Warranties
of the Company . The Company represents and
warrants to each Underwriter and each Selling Stockholder
that:
(a) Preliminary
Prospectus . No order preventing or
suspending the use of any Preliminary Prospectus has been issued by
the Commission, and each Preliminary Prospectus, at the time of
filing thereof, complied in all material respects with the
Securities Act ( provided that the Preliminary Prospectus
dated February 16, 2006, did not so comply solely insofar as it did
not include certain disclosure required by Item 402 of Regulation
S-K) and did not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading;
provided that the Company makes no representation and
warranty with respect to any statements or omissions made in
reliance upon and in conformity with information relating to any
Underwriter furnished to the Company in writing by such Underwriter
through the Representatives expressly for use in any Preliminary
Prospectus.
(b) Time of Sale
Information . The Time of Sale
Information, at the Time of Sale did not, and at the Closing Date
and as of the Additional Closing Date, as the case may be, will
not, contain any 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 that the Company makes no
representation and warranty with respect to any statements or
omissions made in reliance upon and in conformity with information
relating to any Underwriter furnished to the Company in writing by
such Underwriter through the Representatives expressly for use in
such Time of Sale Information. No statement of material fact
included in the Prospectus has been omitted from the Time of Sale
Information and no statement of material fact included in the Time
of Sale Information that is required to be included in the
Prospectus has been omitted therefrom.
(c) Issuer Free Writing
Prospectus. Other than the Preliminary
Prospectus and the Prospectus, the Company (including its agents
and representatives, other than the Underwriters in their capacity
as such) has not made, used, prepared, authorized, approved or
referred to and will not prepare, make, use, authorize, approve or
refer to any “written communication” (as defined in
Rule 405 under the Securities Act) that constitutes an offer to
sell or solicitation of an offer to buy the Shares (each such
communication by the Company or its agents and representatives
(other than a communication referred to in clause (i) below) an
“ Issuer Free Writing Prospectus ”) other than
(i) any document not constituting a prospectus pursuant to Section
2(a)(10)(a) of the Securities Act or Rule 134 under the Securities
Act or (ii) the documents listed on Annex A hereto and other
written communications approved in writing in advance by the
Representatives. Each such Issuer Free Writing Prospectus complied
in all material respects with the Securities Act, has been filed in
accordance with the Securities Act (to the extent required thereby)
and, when taken together with the Preliminary Prospectus
accompanying, or delivered prior to delivery of, such Issuer Free
Writing Prospectus, did not, and at the Closing Date and as of the
Additional Closing Date, as the case may be, will not, contain any
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,
6
not misleading;
provided that the Company makes no representation and
warranty with respect to any statements or omissions made in each
such Issuer Free Writing Prospectus in reliance upon and in
conformity with information relating to any Underwriter furnished
to the Company in writing by such Underwriter through the
Representatives expressly for use in any Issuer Free Writing
Prospectus.
(d) Registration Statement and
Prospectus. The Registration Statement
has been declared effective by the Commission. No order suspending
the effectiveness of the Registration Statement has been issued by
the Commission and no proceeding for that purpose or pursuant to
Section 8A of the Securities Act against the Company or related to
the offering has been initiated or threatened by the Commission; as
of the applicable effective date of the Registration Statement and
any amendment thereto, the Registration Statement complied and will
comply in all material respects with the Securities Act, and did
not and, as amended or supplemented, if applicable, will not
contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order
to make the statements therein not misleading; and as of the date
of the Prospectus and any amendment or supplement thereto and as of
the Closing Date and as of the Additional Closing Date, as the case
may be, the Prospectus will not contain any untrue statement of a
material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were
made, not misleading; provided that the Company makes no
representation and warranty with respect to any statements or
omissions made in reliance upon and in conformity with information
relating to any Underwriter furnished to the Company in writing by
such Underwriter through the Representatives expressly for use in
the Registration Statement and the Prospectus and any amendment or
supplement thereto.
(e) Financial
Statements. The financial statements and
the related notes thereto of the Company and its consolidated
subsidiaries included in the Registration Statement, the Time of
Sale Information and the Prospectus comply in all material respects
with the applicable requirements of the Securities Act and the
Securities Exchange Act of 1934, as amended, and the rules and
regulations of the Commission thereunder (collectively, the “
Exchange Act ”), as applicable, and present fairly the
financial position of the Company and its subsidiaries as of the
dates indicated and the results of their operations and the changes
in their cash flows for the periods specified; such financial
statements have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis throughout the
periods covered thereby, and the supporting schedules, if any,
included in the Registration Statement present fairly the
information required to be stated therein; and the other financial
information included in the Registration Statement, the Time of
Sale Information and the Prospectus has been derived from the
accounting records of the Company and its subsidiaries and presents
fairly the information shown thereby.
(f) No Material Adverse
Change. Since the date of the most
recent financial statements of the Company included in the
Registration Statement, the Time of Sale Information and the
Prospectus, (i) there has not been any change in the capital stock
or long-term debt of the Company or any of its subsidiaries, or any
dividend or distribution of any kind declared, set aside for
payment, paid or made by the Company on any class of capital stock,
or any material
7
adverse change,
or any development involving a prospective material adverse change,
in or affecting the business, management, financial position,
stockholders’ equity or results of operations of the Company
and its subsidiaries taken as a whole; (ii) neither the Company nor
any of its subsidiaries has entered into any transaction or
agreement that is material to the Company and its subsidiaries
taken as a whole or incurred any liability or obligation, direct or
contingent, that is material to the Company and its subsidiaries
taken as a whole; and (iii) neither the Company nor any of its
subsidiaries has sustained any loss from fire, explosion, flood or
other calamity, whether or not covered by insurance, or from any
labor disturbance or dispute or any action, order or decree of any
court or arbitrator or governmental or regulatory authority, which
is material to the Company and its subsidiaries taken as a whole,
except in each case as otherwise disclosed in the Registration
Statement, the Time of Sale Information and the Prospectus, and
except, in the case of clause (i) above, for (A) issuances of
options to purchase the Company’s common stock pursuant to
any equity incentive plan existing on the date hereof; and (B)
issuance of shares of the Company’s common stock upon the
exercise of an option or warrant, the settlement of a restricted
stock unit award or the conversion of a security outstanding on the
date hereof.
(g) Organization and Good
Standing. The Company and each of its
domestic subsidiaries (the “ Domestic Subsidiaries
”)
,
(together
with ,
the “ Foreign IP Subsidiaries ”) have been duly
organized and are validly existing and in good standing under the
laws of their respective jurisdictions of organization, are duly
qualified to do business and are in good standing in each
jurisdiction in which their respective ownership or lease of
property or the conduct of their respective businesses requires
such qualification, and have all power and authority necessary to
own or hold their respective properties and to conduct the
businesses in which they are engaged, except where the failure to
be so qualified or have such power or authority would not,
individually or in the aggregate, have a material adverse effect on
the business, management, financial position, stockholders’
equity or results of operations of the Company and its subsidiaries
taken as a whole (a “ Material Adverse Effect
”). The subsidiaries listed in Schedule 3 to this Agreement
are the only significant subsidiaries of the Company.
(h) Capitalization.
The Company has an
authorized capitalization as set forth in the Registration
Statement, the Time of Sale Information and the Prospectus under
the heading “Capitalization”; all the outstanding
shares of capital stock of the Company (including the Shares to be
sold by the Selling Stockholders) have been duly and validly
authorized and issued and are fully paid and non-assessable and are
not subject to any pre-emptive or similar rights; except as
described in or expressly contemplated by the Time of Sale
Information and the Prospectus and except for issuances of options
to purchase the Company’s common stock and restricted stock
unit awards pursuant to an equity incentive plan existing on the
date hereof, there are no outstanding rights (including, without
limitation, pre-emptive rights), warrants or options to acquire, or
instruments convertible into or exchangeable for, any shares of
capital stock or other equity interest in the Company or any of its
subsidiaries, or any contract, commitment, agreement, understanding
or arrangement of any kind relating to the issuance of any capital
stock of the Company or any such subsidiary, any such convertible
or exchangeable securities or any such rights, warrants or options;
the capital stock of the Company conforms in all material respects
to the description thereof
8
contained in
the Registration Statement, the Time of Sale Information and the
Prospectus; and all the outstanding shares of capital stock or
other equity interests of each subsidiary of the Company have been
duly and validly authorized and issued, are fully paid and
non-assessable (except, in the case of any foreign subsidiary, for
directors’ qualifying shares and except as otherwise
described in the Registration Statement, the Time of Sale
Information and the Prospectus) and, except as described in the
Registration Statement, the Time of Sale Information and the
Prospectus, are owned directly or indirectly by the Company, free
and clear of any lien, charge, encumbrance, security interest,
restriction on voting or transfer or any other claim of any third
party, other than any lien, charge, encumbrance, security interest,
restriction on voting or transfer or any other claim of any third
party created under the Amended and Restated Credit Agreement (the
“ Credit Agreement ”) dated as of
February 15, 2006 among the Company, Burger King Corporation, as
Borrower, the Lender Parties thereto, JPMorgan Chase Bank, N.A., as
Administrative Agent, Citicorp North America, Inc. as Syndication
Agent, and Bank of America, N.A., RBC Capital Mrkets and Wachovia
Bank, National Association, as Documentation Agents.
(i) Due Authorization.
The Company has
full right, power and authority to execute and deliver this
Agreement and to perform its obligations hereunder.
(j) Underwriting
Agreement. This Agreement has been duly
authorized, executed and delivered by the Company.
(k) The Shares.
The Shares to be
issued and sold by the Company hereunder have been duly authorized
by the Company and, when issued and delivered and paid for as
provided herein, will be duly and validly issued and will be fully
paid and nonassessable and will conform to the descriptions thereof
in the Time of Sale Information and the Prospectus; and the
issuance of the Shares is not subject to any pre-emptive or similar
rights.
(l) No Violation or
Default. Neither the Company nor any of
its subsidiaries is (i) in violation of its charter or by-laws or
similar organizational documents; (ii) in default, and no event has
occurred that, with notice or lapse of time or both, would
constitute such a default, in the due performance or observance of
any term, covenant or condition contained in any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company or any of its subsidiaries is a
party or by which the Company or any of its subsidiaries is bound
or to which any of the property or assets of the Company or any of
its subsidiaries is subject; or (iii) in violation of any law or
statute or any judgment, order, rule or regulation of any court or
arbitrator or governmental or regulatory authority, except, in the
case of clauses (ii) and (iii) above, for any such default or
violation that could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse
Effect.
(m) No Conflicts. The
execution, delivery and performance by the Company of this
Agreement, the issuance and sale of the Shares to be issued and
sold by the Company hereunder and the consummation of the
transactions contemplated by this Agreement will not (i) conflict
with or result in a breach or violation of any of the terms or
provisions of, or constitute a default 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 indenture, mortgage, deed of trust, loan agreement
or other agreement or instrument to which the Company
9
or any of its
subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the property or assets of
the Company or any of its subsidiaries is subject, (ii) result in
any violation of the provisions of the charter or by-laws or
similar organizational documents of the Company or any of its
subsidiaries or (iii) result in the violation of any law or statute
or any judgment, order, rule or regulation of any court or
arbitrator or governmental or regulatory authority, except in the
case of clauses (i) and (iii) above for any such conflict, breach
or violation that could not, individually or in the aggregate, be
reasonably expected to have a Material Adverse Effect.
(n) No Consents
Required. No consent, approval,
authorization, order, registration or qualification of or with any
court or arbitrator or governmental or regulatory authority is
required for the execution, delivery and performance by the Company
of this Agreement, the issuance and sale of the Shares to be issued
and sold by the Company hereunder and the consummation of the
transactions contemplated by this Agreement, except for (i) the
registration of the Shares under the Securities Act, (ii) such as
have already been obtained or as may be required by the rules of
the New York Stock Exchange or the NASD, and (iii) such consents,
approvals, authorizations, orders and registrations or
qualifications as may be required under applicable state securities
laws, in connection with the purchase and distribution of the
Shares to be issued and sold by the Company hereunder by the
Underwriters.
(o) Legal Proceedings.
Except as
described in the Registration Statement, the Time of Sale
Information and the Prospectus, there are no legal, governmental or
regulatory investigations, actions, suits or proceedings pending to
which the Company or any of its subsidiaries is or may be a party
or to which any property of the Company or any of its subsidiaries
is or may be the subject that, individually or in the aggregate, if
determined adversely to the Company or any of its subsidiaries,
could reasonably be expected to have a Material Adverse Effect or
materially and adversely affect the ability of the Company to
perform its obligations under this Agreement; to the knowledge of
the Company, no such investigations, actions, suits or proceedings
are threatened against or affecting the Company or any of its
subsidiaries; and (i) there are no current or pending legal,
governmental or regulatory actions, suits or proceedings that are
required under the Securities Act to be described in the
Registration Statement that are not so described in the
Registration Statement, the Time of Sale Information and the
Prospectus and (ii) there are no statutes, regulations or contracts
or other documents that are required under the Securities Act to be
filed as exhibits to the Registration Statement or described in the
Registration Statement or the Prospectus that are not so filed as
exhibits to the Registration Statement or described in the
Registration Statement, the Time of Sale Information and the
Prospectus.
(p) Independent
Accountants. KPMG LLP, who have certified
certain financial statements of the Company and its subsidiaries,
are an independent registered public accounting firm with respect
to the Company and its subsidiaries within the applicable rules and
regulations adopted by the Commission and the Public Accounting
Oversight Board (United States) and as required by the Securities
Act.
(q) Title to Real and Personal
Property. The Company and its
subsidiaries have good and marketable title in fee simple to, or
have valid rights to lease or otherwise use, all items
10
of real and
personal property that are material to the respective businesses of
the Company and its subsidiaries, in each case free and clear of
all liens, encumbrances, claims and defects and imperfections of
title except those that (i) do not materially interfere with the
use made and proposed to be made of such property by the Company
and its subsidiaries or (ii) could not reasonably be expected,
individually or in the aggregate, to have a Material Adverse
Effect.
(r) Title to Intellectual
Property. The Company and its
subsidiaries (i) own or possess adequate rights to use all patents,
patent applications, trademarks, service marks, trade names,
trademark registrations, service mark registrations, copyrights,
licenses and know-how (including trade secrets and other unpatented
and/or unpatentable proprietary or confidential information,
systems or procedures) necessary for the conduct of their
respective businesses, and the conduct of their respective
businesses will not conflict with any such rights of others, and
(ii) the Company and its subsidiaries have not received any notice
of any claim of infringement or conflict with any such rights of
others; except in the case of (i) above as could not reasonably be
expected, individually or in the aggregate, to have a Material
Adverse Effect.
(s) No Undisclosed
Relationships. No relationship, direct or
indirect, exists between or among the Company or any of its
subsidiaries, on the one hand, and the directors, officers,
stockholders, customers or suppliers of the Company or any of its
subsidiaries, on the other, that is required by the Securities Act
to be described in the Registration Statement and the Prospectus
and that is not so described in such documents and in the Time of
Sale Information.
(t) Investment Company
Act. The Company is not and, after
giving effect to the offering and sale of the Shares to be issued
and sold by the Company hereunder and the application of the
proceeds thereof as described in the Registration Statement, the
Time of Sale Information and the Prospectus, will not be required
to register as an “investment company” within the
meaning of the Investment Company Act of 1940, as amended, and the
rules and regulations of the Commission thereunder (collectively,
“ Investment Company Act ”).
(u) Taxes. The Company and its
subsidiaries have paid all federal, state, local and foreign taxes
and filed all tax returns required to be paid or filed through the
date hereof except where such failure to pay or file would not
reasonably be expected to have a Material Adverse
Effect.
(v) Licenses and
Permits. The Company and its
subsidiaries possess all licenses, certificates, permits and other
authorizations issued by, and have made all declarations and
filings with, the appropriate federal, state, local or foreign
governmental or regulatory authorities that are necessary for the
ownership or lease of their respective properties or the conduct of
their respective businesses as described in the Registration
Statement, the Time of Sale Information and the Prospectus, except
where the failure to possess or make the same would not reasonably
be expected, individually or in the aggregate, to have a Material
Adverse Effect; and except as described in the Registration
Statement, the Time of Sale Information and the Prospectus, neither
the Company nor any of its subsidiaries has received notice of any
revocation or modification of any such license, certificate, permit
or authorization or has any reason to believe that any such
license, certificate, permit or authorization will not be renewed
in the ordinary course.
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(w) No Labor Disputes.
No material labor disturbance by or dispute with employees of the
Company or any of its subsidiaries exists or, to the knowledge of
the Company or any of its subsidiaries, is threatened. The Company
is not aware of any existing or imminent labor disturbance by, or
dispute with, the employees of any of its or its
subsidiaries’ principal suppliers, contractors or customers,
except as would not reasonable be expected to have a Material
Adverse Effect.
(x) Compliance With Environmental
Laws. (i) The Company and its
subsidiaries (x) are in compliance with any and all applicable
federal, state, local and foreign laws, rules, regulations,
requirements, decisions and orders relating to the protection of
human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants (collectively,
“ Environmental Laws ”); (y) have received and
are in compliance with all permits, licenses, certificates or other
authorizations or approvals required of them under applicable
Environmental Laws to conduct their respective businesses; and (z)
have not received notice of any actual or potential liability for
the investigation or remediation of any disposal or release of
hazardous or toxic substances or wastes, pollutants or
contaminants, and (ii) there are no costs or liabilities associated
with Environmental Laws of or relating to the Company or its
subsidiaries, except in the case of each of (x) and (y) above, for
any such failure to comply, or failure to receive required permits,
licenses or approvals, or cost or liability, as would not
reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect.
(y) Compliance With
ERISA. Each employee benefit plan,
within the meaning of Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended (“ ERISA
”), that is maintained, administered or contributed to by the
Company or any of its affiliates for employees or former employees
of the Company and its affiliates has been maintained in compliance
with its terms and the requirements of any applicable statutes,
orders, rules and regulations, including but not limited to ERISA
and the Internal Revenue Code of 1986, as amended (the “
Code ”); no prohibited transaction, within the meaning
of Section 406 of ERISA or Section 4975 of the Code, has occurred
with respect to any such plan excluding transactions effected
pursuant to a statutory or administrative exemption; and for each
such plan that is subject to the funding rules of Section 412 of
the Code or Section 302 of ERISA, no “accumulated funding
deficiency” as defined in Section 412 of the Code has been
incurred, whether or not waived, and the fair market value of the
assets of each such plan (excluding for these purposes accrued but
unpaid contributions) exceeds the present value of all benefits
accrued under such plan determined using reasonable actuarial
assumptions; except in each case as would not reasonably be
expected, individually or in the aggregate, to have a Material
Adverse Effect.
(z) Disclosure Controls
. The Company and
its subsidiaries maintain an effective system of “disclosure
controls and procedures” (as defined in Rule 13a-15(e) of the
Exchange Act) that is designed to ensure that information required
to be disclosed by the Company in reports that it files or submits
under the Exchange Act is recorded, processed, summarized and
reported within the time periods specified in the
Commission’s rules and forms, including controls and
procedures designed to ensure that such information is accumulated
and
12
communicated to
the Company’s management as appropriate to allow timely
decisions regarding required disclosure.
(aa) Accounting
Controls. The Company and its
subsidiaries maintain systems of “internal control over
financial reporting” (as defined in Rule 13a-15(f) of the
Exchange Act) that have been designed by, or under the supervision
of, their respective principal executive and principal financial
officers, or persons performing similar functions, to provide
reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principles, including, but not limited to internal accounting
controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management’s
general or specific authorizations; (ii) transactions are recorded
as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to
maintain asset accountability; (iii) access to assets is permitted
only in accordance with management’s general or specific
authorization; 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.
(bb) Insurance.
The Company and
its subsidiaries maintain (i) insurance with financially sound and
reputable insurance companies covering their respective properties,
operations, personnel and businesses, including business
interruption insurance, which insurance is in amounts (with no
greater risk retention and giving effect to self-insurance) and
against such risks as is (a) customarily maintained by companies of
established repute engaged in the same or similar business
operating in the same or similar locations and (b) considered
adequate by the Company and its subsidiaries and (ii) all insurance
as may be required by law; and neither the Company nor any of its
subsidiaries has (i) received notice from any insurer or agent of
such insurer that capital improvements or other expenditures are
required or necessary to be made in order to continue such
insurance or (ii) any reason to believe that it will not be able to
renew its existing insurance coverage as and when such coverage
expires or to obtain similar coverage at reasonable cost from
similar insurers as may be necessary to continue its
business.
(cc) No Unlawful
Payments. Neither the Company nor any of
its subsidiaries nor, to the knowledge of the Company, any
director, officer, agent, employee or other person associated with
or acting on behalf of the Company or any of its subsidiaries has
(i) used any corporate funds for any unlawful contribution, gift,
entertainment or other unlawful expense relating to political
activity; (ii) made any direct or indirect unlawful payment to any
foreign or domestic government official or employee from corporate
funds; (iii) violated or is in violation of any provision of the
Foreign Corrupt Practices Act of 1977; or (iv) made any bribe,
rebate, payoff, influence payment, kickback or other unlawful
payment.
(dd) Compliance with Money
Laundering Laws . The operations of the
Company and its subsidiaries are and have been conducted at all
times in compliance with applicable financial recordkeeping and
reporting requirements of the Currency and Foreign Transactions
Reporting Act of 1970, as amended, the money laundering statutes of
all jurisdictions, the rules and regulations thereunder and any
related or similar rules, regulations or guidelines, issued,
administered or enforced by any governmental agency (collectively,
the
13
“
Money Laundering Laws ”) and no action, suit or
proceeding by or before any court or governmental agency, authority
or body or any arbitrator involving the Company or any of its
subsidiaries with respect to the Money Laundering Laws is pending
or, to the knowledge of the Company, threatened.
(ee) Compliance with
OFAC. None of the Company, any of its subsidiaries or, to the
knowledge of the Company, any director, officer, agent, employee or
Affiliate of the Company or any of its subsidiaries is currently
subject to any U.S. sanctions administered by the Office of Foreign
Assets Control of the U.S. Department of the Treasury (“
OFAC ”); and the Company will not directly or
indirectly use the proceeds of the offering of the Shares to be
issued and sold by the Company hereunder, or lend, contribute or
otherwise make available such proceeds to any subsidiary, joint
venture partner or other person or entity, for the purpose of
financing the activities of any person currently subject to any
U.S. sanctions administered by OFAC.
(ff) No Restrictions on
Subsidiaries . Except as disclosed in the
Registration Statement, the Time of Sale Information and the
Prospectus, no subsidiary of the Company is currently prohibited,
directly or indirectly, under any agreement or other instrument to
which it is a party or is subject, from paying any dividends to the
Company, from making any other distribution on such
subsidiary’s capital stock, from repaying to the Company any
loans or advances to such subsidiary from the Company or from
transferring any of such subsidiary’s properties or assets to
the Company or any other subsidiary of the Company.
(gg) No Broker’s
Fees. Neither the Company nor any of
its subsidiaries is a party to any contract, agreement or
understanding with any person (other than this Agreement) that
would give rise to a valid claim against the Company or any of its
subsidiaries or any Underwriter for a brokerage commission,
finder’s fee or like payment in connection with the offering
and sale of the Shares to be issued and sold by the Company
hereunder.
(hh) No Registration
Rights . Except as disclosed in the
Registration Statement, no person has the right to require the
Company or any of its subsidiaries to register any securities for
sale under the Securities Act by reason of the filing of the
Registration Statement with the Commission or the issuance and sale
of the Shares to be issued and sold by the Company hereunder, or
the sale of the Shares to be sold by the Selling Stockholder
hereunder.
(ii) No Stabilization.
The Company has
not taken, directly or indirectly, any action designed to or that
could reasonably be expected to cause or result in any
stabilization or manipulation of the price of the Shares to be
issued and sold by the Company hereunder.
(jj) Forward-Looking
Statements. No forward-looking statement
(within the meaning of Section 27A of the Securities Act and
Section 21E of the Exchange Act) contained in the Registration
Statement, the Time of Sale Information and the Prospectus has been
made or reaffirmed without a reasonable basis or has been disclosed
other than in good faith.
(kk) Statistical and Market
Data. Nothing has come to the
attention of the Company that has caused the Company to believe
that the statistical and market-related data
14
included in the
Registration Statement, the Time of Sale Information and the
Prospectus is not based on or derived from sources that are
reliable and accurate in all material respects.
(ll) Sarbanes-Oxley Act
. There is and has
been no failure on the part of the Company or any of the
Company’s directors or officers, in their capacities as such,
to comply with any provision of the Sarbanes-Oxley Act of 2002 and
the rules and regulations promulgated in connection therewith (the
“ Sarbanes-Oxley Act ”) to which the Company is
subject.
(mm) Status under the Securities
Act .
The Company is not an ineligible issuer as defined under the
Securities Act, in each case at the times specified in the
Securities Act in connection with the offering of the
Shares.
(nn) FTC . The Company and its
subsidiaries are in compliance with the applicable requirements of
the Federal Trade Commission (the “ FTC ”) rules
governing franchising and applicable provisions of federal, state,
local and other laws or regulations governing the business of a
franchise or that are applicable to their businesses as presently
conducted, except in each case as would not reasonably be expected
to, individually or in the aggregate, have a Material Adverse
Effect.
(oo) The Registration Statement,
the Time of Sale Information and the Prospectus comply, and any
amendments or supplements thereto will comply, with any applicable
laws or regulations of foreign jurisdictions in which the
Registration Statement, the Time of Sale Information and the
Prospectus, as amended or supplemented, if applicable, are
distributed in connection with the Directed Share
Program.
(pp) No consent, approval,
authorization or order of, or qualification with, any governmental
body or agency, other than those obtained, is required in
connection with the offering of the Directed Shares in any
jurisdiction where the Directed Shares are being
offered.
(qq) The Company has not offered,
or caused Morgan Stanley to offer, Shares to any person pursuant to
the Directed Share Program with the specific intent to unlawfully
influence (i) a customer or supplier of the Company to alter the
customer’s or supplier’s level or type of business with
the Company, or (ii) a trade journalist or publication to write or
publish favorable information about the Company or its
products.
4. Representations and Warranties
of the Selling Stockholders . Each of the Selling
Stockholders severally and not jointly represents and warrants to
each Underwriter and the Company that:
(a) Required Consents;
Authority . All consents, approvals,
authorizations and orders necessary for the execution and delivery
by such Selling Stockholder of this Agreement and the Power of
Attorney (the “ Power of Attorney ”) and the
Custody Agreement (the “ Custody Agreement ”)
hereinafter referred to, and for the sale and delivery of the
Shares to be sold by such Selling Stockholder hereunder, have been
obtained except for (i) the registration of the Shares under the
Securities Act, (ii) such as have already been obtained or as may
be required by the rules of the New York Stock Exchange or the
NASD, and (iii) such consents, approvals,
15
authorizations,
orders and registrations or qualifications as may be required under
applicable state securities laws, in connection with the purchase
and distribution of the Shares to be issued and sold by the Company
hereunder to the Underwriters; and such Selling Stockholder has
f
