AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 15, 1999
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE 13E-4
ISSUER TENDER OFFER STATEMENT
(PURSUANT TO SECTION 13(e)(1) OF THE SECURITIES EXCHANGE
ACT OF 1934)
(Amendment No. )
U.S. Home & Garden Trust I
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(Name of Issuer)
U.S. Home & Garden Inc.
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(Name of Person(s) Filing Statement)
9.4% Cumulative Trust Preferred Securities
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(Title of Class of Securities)
90331U 20 3
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(CUSIP Number of Class of Securities)
Robert Kassel, President, U.S. Home & Garden Inc.,
655 Montgomery Street, San Francisco, CA 94111, (415) 616-8111
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications
On Behalf of the Person(s) Filing Statement)
COPIES TO:
Robert J. Mittman, Esq.
Tenzer Greenblatt LLP
405 Lexington Avenue
New York, New York 10174
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December 15, 1999
(Date Tender Offer First Published, Sent or Given to Security Holders)
CALCULATION OF FILING FEE
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Transaction Valuation* Amount of Filing Fee
$10,500,000 $2,100
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* Calculated solely for the purpose of determining the filing fee, based upon
the purchase of 700,000 trust preferred securities at $15.00 per trust
preferred security in accordance with Rule 0-11 (1/50th of 1% of the
Transaction Value).
|_| Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the form
or schedule and the date of its filing.
Amount previously paid: N/A Filing Party: N/A
Form or registration no.: N/A Date filed: N/A
<PAGE>
ITEM 1 SECURITY AND ISSUER.
(a) The issuer of the securities to which this Schedule 13E-4 relates is
U.S. Home & Garden Trust I, a Delaware statutory business trust (the "Trust"),
and the address of its principal executive offices is 655 Montgomery Street, San
Francisco, CA 94111.
(b) This Schedule 13E-4 relates to the offer by U.S. Home & Garden Inc., a
Delaware corporation and the parent company of the Trust (the "Company") to
purchase 700,000 Trust Securities (as hereinafter defined) (or such lesser
number of Trust Securities as are properly tendered) of the 9.4% Cumulative
Trust Preferred Securities of the Trust (the "Trust Securities"), 2,530,000 of
which Trust Securities were outstanding as of December 14, 1999, at a price of
$15.00 per Trust Security in cash upon the terms and subject to the conditions
set forth in the Offer to Purchase, dated December 15, 1999 (the "Offer to
Purchase"), and in the related Letter of Transmittal, which together constitute
the "Offer," copies of which are attached as Exhibit (a)(1) and (a)(2),
respectively, and incorporated herein by reference. Certain executive officers
and directors of the Company who are also Administrative Trustees of the Trust
and who own Trust Securities may participate in the Offer in the same manner as
the securityholders of the Trust. The information set forth in "Introduction";
"Section 1, Number of Trust Securities; Proration" and "Section 8, Interests of
Directors and Executive Officers of the Company and Trustees of the Trust;
Transactions and Arrangements Concerning the Trust Securities" of the Offer to
Purchase is incorporated herein by reference.
(c) The information set forth in "Introduction" and "Section 7, Price Range
of Trust Securities" of the Offer to Purchase is incorporated herein by
reference.
(d) This Schedule 13E-4 is being filed by the Company, which is the parent
company of the Trust, and holds all of the issued and outstanding voting common
securities of the Trust.
ITEM 2 SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a)-(b) The information set forth in "Section 11, Source and Amount of
Funds" of the Offer to Purchase is incorporated herein by reference.
ITEM 3 PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE ISSUER OR
AFFILIATE.
(a)-(j) The information set forth in "Introduction" and "Section 11, Source
and Amount of Funds," "Section 9, Background and Purpose of the Offer"; "Section
8, Interest of Directors and Executive Officers of the Company and Trustees of
the Trust; Transactions and Arrangements Concerning the Trust Securities" and
"Section 12, Effects of the Offer on the Market for Trust Securities;
Registration under the Exchange Act" of the Offer to Purchase is incorporated
herein by reference.
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ITEM 4 INTEREST IN SECURITIES OF THE ISSUER.
The information set forth in "Section 8, Interest of Directors and
Executive Officers of the Company and Trustees of the Trust; Transactions and
Arrangements Concerning Trust Securities" of the Offer to Purchase and Appendix
A of the Offer to Purchase is incorporated herein by reference.
ITEM 5 CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO THE ISSUER'S SECURITIES.
The information set forth in "Introduction" and "Section 11, Source and
Amount of Funds," "Section 9, Background and Purpose of the Offer; "Section 8,
Interest of Directors and Executive Officers of the Company and Trustees of the
Trust; Transactions and Arrangements Concerning Trust Securities" and "Section
10, Certain Information About the Trust and the Company" of the Offer to
Purchase is incorporated herein by reference.
ITEM 6 PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The information set forth in "Introduction" and "Section 16, Fees and
Expenses" of the Offer to Purchase is incorporated herein by reference.
ITEM 7 FINANCIAL INFORMATION.
(a)-(b) The information set forth in "Section 10, Certain Information About
the Trust and the Company" of the Offer to Purchase is incorporated herein by
reference, the information in the Company's Annual Report on Form 10-K for the
year ended June 30, 1999, and the information set forth in the Company's
Quarterly Report on Form 10-Q for the quarter ended September 30, 1999, is
incorporated herein by reference.
ITEM 8 ADDITIONAL INFORMATION.
(a) Not applicable.
(b) The information set forth in "Section 13, Certain Legal Matters;
Regulatory Approvals" of the Offer to Purchase is incorporated herein by
reference.
(c) The information set forth in "Section 12, Effects of the Offer on the
Market for Trust Securities; Registration under the Exchange Act" of the Offer
to Purchase is incorporated herein by reference.
(d) Not applicable.
(e) The information set forth in the Offer to Purchase and Letter of
Transmittal is incorporated herein by reference.
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ITEM 9 MATERIAL TO BE FILED AS EXHIBITS.
(a)(1) Offer to Purchase, dated December 14, 1999
(2) Letter of Transmittal (including Certification of Taxpayer
Identification Number on Form W-9 and Guidelines thereto).
(3) Notice of Guaranteed Delivery.
(4) Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other
Nominees.
(5) Letter to Clients for Use by Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.
(6) Text of Press Release issued by the Company, dated December 13, 1999.
(b)(1) Credit Agreement dated as of October 13, 1998 between the Company
and Bank of America, N.A. (the "Credit Agreement") which is hereby incorporated
by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for
the period ended September 30, 1998.
(2) Amendment to Credit Agreement dated September 29, 1999.
(3) Second Amendment to Credit Agreement dated November 22, 1999.
(c)(1)Guaranty Agreement of the Company in favor of the holders of the
Trust Securities which is hereby incorporated by reference to Exhibit 4.7 to the
Company's and the Trust's Registration Statement on Form S-1 filed with the
Securities and Exchange Commission. (File No. 333-48519).
(2) Junior Subordinated Indenture between the Company and Wilmington Trust
Company, as trustee, which is hereby incorporated by reference to Exhibit 4.1 to
the Company's and the Trust's Registration Statement on Form S-1 filed with the
Securities and Exchange Commission. (File No. 333-48519).
(3) Amended and Restated Trust Agreement among the Company, Wilmington
Trust Company as Property and Delaware Trustee and certain Administrative
Trustees, which is hereby incorporated by reference to Exhibit 4.4 to the
Company's and the Trust's Registration Statement on Form S-1 filed with the
Securities and Exchange Commission. (File No. 333-48519)
(d) Not applicable.
(e) Not applicable.
(f) Not applicable.
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<PAGE>
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this Schedule 13E-4 is true, complete and
correct.
December 15, 1999 U.S. Home & Garden Inc.
By: /s/ Robert Kassel
-------------------------
Robert Kassel
President
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<PAGE>
EXHIBIT INDEX
EXHIBIT
NO. DESCRIPTION
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(a)(1) Offer to Purchase, dated December 15, 1999.
(2) Letter of Transmittal (including Certification of Taxpayer
Identification Form W-9 and Guidelines thereto).
(3) Notice of Guaranteed Delivery.
(4) Letter to Brokers, Dealers, Commercial Banks, Trust Companies and
Other Nominees
(5) Letter to Clients for Use by Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees.
(6) Text of Press Release issued by the Company, dated December 13,
1999.
(b)(1) Credit Agreement dated October 13, 1998 between the Company and
Bank of America, N.A., which is hereby incorporated by reference
to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q
for the period ended September 30, 1998.
(2) Amendment to Credit Agreement dated September 29, 1999.
(3) Second Amendment to Credit Agreement dated November 22, 999.
(c)(1) Guaranty Agreement of Company in favor of holders of Trust
Securities which is hereby incorporated by reference to Exhibit
4.7 to the Company's and the Trust's Registration Statement on
Form S-1 filed with the Securities and Exchange Commission (File
No. 333-48519).
(2) Junior Subordinated Indenture between the Company and Wilmington
Trust Company, as trustee, which is hereby incorporated by
reference to Exhibit 4.1 to the Company's and the Trust's
Registration Statement on Form S-1 filed with the Securities and
Exchange Commission (File No. 333-48519).
(3) Amended and Restated Trust Agreement among the Company, Wilminton
Trust Company as Property and Delaware Trustee and certain
Administrative Trustees, which is hereby incorporated by
reference to Exhibit 4.4 to the Company's and the Trust's
Registration Statement on Form S-1 filed with the Securities and
Exchange Commission. (File No. 333-48519).
U.S. HOME & GARDEN INC.
OFFER TO PURCHASE FOR CASH
UP TO 700,000 9.4% CUMULATIVE TRUST PREFERRED SECURITIES OF U.S. HOME &
GARDEN TRUST I AT A PURCHASE PRICE OF $15.00 PER TRUST PREFERRED SECURITY
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON JANUARY 14, 2000, UNLESS THE OFFER IS EXTENDED.
U.S. Home & Garden Inc., a Delaware corporation (the "Company"), hereby
invites the securityholders of U.S. Home & Garden Trust I, its subsidiary (the
"Trust") to tender the 9.4% Cumulative Trust Preferred Securities (the "Trust
Securities") to the Company upon the terms and subject to the conditions set
forth in this Offer to Purchase and in the related Letter of Transmittal (which
together constitute the "Offer"). The Company will pay, a price of $15.00 per
Trust Security in cash (the "Purchase Price") for Trust Securities validly
tendered pursuant to the Offer. The Company will buy 700,000 Trust Securities
(or such lesser number of Trust Securities as are validly tendered) pursuant to
the Offer. The Company reserves the right, in its sole discretion, to purchase
more than 700,000 Trust Securities pursuant to the Offer.
THE OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF TRUST SECURITIES
BEING TENDERED. THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS. SEE
SECTION 6.
NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS NOR THE TRUST OR ITS
ADMINISTRATIVE TRUSTEES MAKES ANY RECOMMENDATION TO ANY SECURITYHOLDER OF THE
TRUST AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING TRUST SECURITIES.
SECURITYHOLDERS OF THE TRUST MUST MAKE THEIR OWN DECISIONS AS TO WHETHER TO
TENDER TRUST SECURITIES AND, IF SO, HOW MANY TRUST SECURITIES TO TENDER.
CERTAIN EXECUTIVE OFFICERS AND DIRECTORS OF THE COMPANY WHO ARE ALSO
ADMINISTRATIVE TRUSTEES OF THE TRUST MAY TENDER TRUST SECURITIES PURSUANT TO THE
OFFER.
Questions and requests for assistance or for additional copies of this
Offer to Purchase, the Letter of Transmittal or the Notice of Guaranteed
Delivery may be directed to the Information Agent, at the address and telephone
number set forth on the back cover of this Offer to Purchase.
December 15, 1999
<PAGE>
IMPORTANT
Any securityholder of the Trust desiring to tender all or any portion of
such securityholder's Trust Securities should either (1) complete and sign the
Letter of Transmittal or a facsimile copy thereof in accordance with the
instructions in the Letter of Transmittal, mail or deliver it and any other
required documents to Continental Stock Transfer & Trust Company (the
"Depositary"), and either mail or deliver the Certificates for such Trust
Securities to the Depositary or follow the procedure for book-entry delivery set
forth in Section 3 hereof, or (2) request a broker, dealer, commercial bank,
trust company or other nominee to effect the transaction on the securityholder's
behalf. A securityholder of the Trust having Trust Securities registered in the
name of a broker, dealer, commercial bank, trust company or other nominee must
contact that broker, dealer, commercial bank, trust company or other nominee if
such securityholder desires to tender such Trust Securities. Securityholders of
the Trust who desire to tender Trust Securities and whose certificates for such
Trust Securities are not immediately available or who cannot comply with the
procedure for book-entry transfer by the expiration of the Offer must tender
such Trust Securities by following the procedures for guaranteed delivery set
forth in Section 3 hereof.
NO PERSON HAS BEEN AUTHORIZED TO MAKE ANY RECOMMENDATION ON BEHALF OF THE
COMPANY OR THE TRUST OR ITS ADMINISTRATIVE TRUSTEES AS TO WHETHER
SECURITYHOLDERS OF THE TRUST SHOULD TENDER OR REFRAIN FROM TENDERING TRUST
SECURITIES PURSUANT TO THE OFFER. NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THE OFFER, OTHER
THAN THOSE CONTAINED IN THIS OFFER TO PURCHASE OR IN THE LETTER OF TRANSMITTAL.
IF GIVEN OR MADE, SUCH RECOMMENDATIONS, INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE TRUST OR ITS
ADMINISTRATIVE TRUSTEES.
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SUMMARY
This general summary is provided for the convenience of the Trust's
securityholders and is qualified in its entirety by reference to the full text
and more specific details of this Offer to Purchase.
Number of Trust Securities
to be Purchased....................... 700,000 Trust Securities (or such lesser
number of Trust Securities as are
validly tendered).
Purchase Price ....................... The Company will pay a cash price of
$15.00 per Trust Security for Trust
Securities validly tendered.
How to Tender Trust Securities ....... See Section 3. Call the Information
Agent, at the telephone number set forth
on the back cover of this Offer to
Purchase or consult your broker for
assistance.
Brokerage Commissions ................ None.
Transfer Tax ......................... None, if payment is made to the
registered holder.
Expiration and Proration Dates ....... January 14, 2000, at 5:00 PM, New York
City time, unless extended by the
Company.
Payment Date ......................... As soon as practicable after the
Expiration Date (as defined in Section
1).
Odd Lots ............................. There will be no proration of Trust
Securities tendered by any
securityholder of the Trust who (1)
beneficially owns less than 100 Trust
Securities in the aggregate (2) tenders
all of such Trust Securities at the
Purchase Price prior to the Expiration
Date and (3) checks the "Odd Lots" box
in the Letter of Transmittal.
Withdrawal Rights .................... Tendered Trust Securities may be
withdrawn at any time until 5:00 PM, New
York City time, on Friday, January 14,
2000, unless the Offer is extended by
the Company and after 5:00 PM, New York
City time, on Friday, February 11, 2000
if not purchased pursuant to the Offer
by such time. See Section 4.
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Position of the Company and its
Board of Directors; Tender by Certain
Executive Officers and Directors
of the Company ....................... Neither the Company nor its Board of
Directors makes any recommendation to
any securityholder of the Trust as to
whether to tender or refrain from
tendering Trust Securities. Certain
executive officers and directors of the
Company who are also Administrative
trustees of the Trust may tender Trust
Securities pursuant to the Offer.
Background and Purpose of
The Offer ............................ The Company is making the Offer because
the Board of Directors of the Company
believes that, given the Company's
business, assets and prospects and the
current market price of the Trust
Securities, the purchase of the Trust
Securities is in the best interests of
the Company and is an attractive use of
the Company's funds.
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<PAGE>
TABLE OF CONTENTS
SUMMARY........................................................................3
INTRODUCTION...................................................................6
1. Number of Trust Securities; Proration....................................7
2. Tenders By Holders Of Fewer Than 100 Trust Securities....................9
3. Procedure for Tendering Trust Securities.................................9
4. Withdrawal Rights.......................................................13
5. Purchase of Trust Securities and Payment of Purchase Price..............13
6. Certain Conditions of the Offer.........................................14
7. Price Range of Trust Securities.........................................17
8. Interest of Directors and Executive Officers of the
Company and Trustees of the Trust; Transactions and
Arrangements Concerning the Trust Securities............................17
9. Background and Purpose of the Offer.....................................18
10. Certain Information About the Trust and the Company.....................19
11. Source and Amount of Funds..............................................23
12. Effects of the Offer on the Market for Trust Securities;
Registration Under The Exchange Act.....................................24
13. Certain Legal Matters; Regulatory Approvals.............................24
14. Certain Federal Income Tax Consequences.................................25
15. Extension of the Offer; Termination; Amendments.........................27
16. Fees and Expenses.......................................................28
17. Additional Information..................................................28
18. Miscellaneous...........................................................29
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TO THE HOLDERS OF 9.4% CUMULATIVE
TRUST PREFERRED SECURITIES:
INTRODUCTION
The Company hereby invites the securityholders of the Trust to tender Trust
Securities to the Company, upon the terms and subject to the conditions of the
Offer. The Company will pay $15.00 per Trust Security in cash (the "Purchase
Price") for Trust Securities validly tendered pursuant to the Offer. The Company
will buy 700,000 Trust Securities (or such lesser number of Trust Securities as
are validly tendered) pursuant to the Offer. The Company reserves the right, in
its sole discretion, to purchase more than 700,000 Trust Securities pursuant to
the Offer.
THE OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF TRUST SECURITIES
BEING TENDERED. THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS. SEE
SECTION 6.
If more than 700,000 Trust Securities (or such greater number of Trust
Securities as the Company may elect to purchase) are validly tendered before the
Expiration Date (as defined in Section 1), the Company will accept Trust
Securities for purchase first from all Odd Lot Owners (as defined in Section 2)
who validly tender all of their Trust Securities and then on a pro rata basis,
if necessary, from all other securityholders of the Trust who validly tender
Trust Securities. See Sections 1 and 2. The Company will return all Trust
Securities not purchased under the Offer because of proration. Tendering
securityholders of the Trust will not be obligated to pay solicitation fees or,
subject to Instruction 6 of the Letter of Transmittal, transfer taxes on the
Company's purchase of Trust Securities pursuant to the Offer. The Company will
pay certain fees and expenses of Continental Stock Transfer & Trust Company (the
"Depositary") and Georgeson Shareholder Communications Inc., which is acting as
the Information Agent in connection with the Offer. See Section 16.
NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS NOR THE TRUST OR ITS
ADMINISTRATIVE TRUSTEES MAKES ANY RECOMMENDATION TO ANY SECURITYHOLDER OF THE
TRUST AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING TRUST SECURITIES.
SECURITYHOLDERS OF THE TRUST MUST MAKE THEIR OWN DECISIONS WHETHER TO TENDER
TRUST SECURITIES AND, IF SO, HOW MANY TRUST SECURITIES TO TENDER. CERTAIN
EXECUTIVE OFFICERS AND DIRECTORS OF THE COMPANY WHO ARE ALSO ADMINISTRATIVE
TRUSTEES OF THE TRUST MAY TENDER TRUST SECURITIES PURSUANT TO THE OFFER.
The Company is making the Offer because the Board of Directors of the
Company believes that, given the Company's business, assets and prospects and
the current market price of the Trust Securities, the purchase of the Trust
Securities is in the best interests of Company and is an attractive use of the
Company's funds. See Section 9.
After this Trust Security repurchase is completed, the Company believes
that it will have sufficient liquidity to operate its existing business.
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THE OFFER PROVIDES SECURITYHOLDERS OF THE TRUST WITH THE OPPORTUNITY TO
SELL ALL OR A PORTION OF THEIR TRUST SECURITIES AT THE PURCHASE PRICE OF $15.00
PER TRUST SECURITY.
This Offer to Purchase contains forward-looking statements within the meaning of
the federal securities laws. A number of factors could cause the Company's
actual operating performance or financial results to differ materially from
those anticipated. These include but are not limited to, the ability of the
Company to successfully integrate any future businesses or product lines
acquired into existing operations, the Company's growth strategy, customer
concentration, outstanding indebtedness, dependence on weather conditions,
seasonality, expansion and other activities of competitors, changes in federal
or state environmental laws and the administration of such laws, protection of
trademarks and other proprietary rights, the general condition of the economy
and other risks detailed in the Company's Securities and Exchange Commission
filings.
As of the close of trading on December 14, 1999, there were 2,530,000 Trust
Securities outstanding. The 700,000 Trust Securities that the Company is
offering to purchase represent approximately 28% of the Trust Securities
outstanding as of December 14, 1999. The Trust Securities are traded on the
American Stock Exchange ("AMEX") under the symbol "UHG.Pr.A". On December 14,
1999, the last full trading day prior to the commencement of the Offer, the
closing per Trust Security sales price as reported on AMEX was $14.125. THE
COMPANY URGES SECURITYHOLDERS OF THE TRUST TO OBTAIN CURRENT QUOTATIONS OF THE
MARKET PRICE OF THE TRUST SECURITIES.
1. Number of Trust Securities; Proration.
Upon the terms and subject to the conditions of the Offer, the Company will
accept for payment and purchase 700,000 Trust Securities (or such lesser number
of Trust Securities as are validly tendered on or prior to the Expiration Date)
at a price of $15.00 per Trust Security. THE TERM "EXPIRATION DATE" MEANS 5:00
P.M., NEW YORK CITY TIME, ON FRIDAY, JANUARY 14, 2000, UNLESS THE COMPANY, IN
ITS SOLE DISCRETION, EXTENDS THE PERIOD OF TIME DURING WHICH THE OFFER IS OPEN,
IN WHICH EVENT THE TERM "EXPIRATION DATE" SHALL REFER TO THE LATEST TIME AND
DATE AT WHICH THE OFFER, AS SO EXTENDED BY THE COMPANY, EXPIRES. See Section 15
for a description of the Company's right to extend the time during which the
Offer is open and to delay, terminate or amend the Offer. See also Section 6.
Subject to Section 2, if the Offer is oversubscribed, Trust Securities tendered
at the Purchase Price prior to the Expiration Date (except for tenders by Odd
Lot Owners) will be subject to proration. The proration period also expires on
the Expiration Date.
The Company will, upon the terms and subject to the conditions of the
Offer, pay $15.00 per Trust Security (the "Purchase Price") for Trust Securities
validly tendered pursuant to the Offer. The Company will buy 700,000 Trust
Securities (or such lesser number as are validly tendered at a price of $15.00
per Trust Security) pursuant to the Offer. As described in Section 15, the
Company reserves the right, in its sole discretion, to purchase more than
700,000 Trust Securities pursuant to the Offer.
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<PAGE>
In accordance with Instruction 2 of the Letter of Transmittal, each
securityholder of the Trust desiring to tender Trust Securities must tender
Trust Securities only at the Purchase Price. All Trust Securities not purchased
pursuant to the Offer, including Trust Securities not purchased because of
proration, will be returned to the tendering securityholders of the Trust at the
Company's expense as promptly as practicable following the Expiration Date.
Upon the terms and subject to the conditions of the Offer, if the number of
Trust Securities validly tendered prior to the Expiration Date is less than or
equal to 700,000 Trust Securities (or such greater number of Trust Securities as
the Company may elect to purchase pursuant to the Offer), the Company will
purchase at the Purchase Price all Trust Securities so tendered.
Upon the terms and subject to the conditions of the Offer, if prior to the
Expiration Date more than 700,000 Trust Securities (or such greater number of
Trust Securities as the Company elects to purchase) are validly tendered at the
Purchase Price, the Company will accept Trust Securities for purchase in the
following order of priority:
o first, all Trust Securities validly tendered at the Purchase Price
prior to the Expiration Date and not withdrawn by any Odd Lot Owner
(as defined in Section 2) who:
(1) tenders all Trust Securities beneficially owned by such Odd Lot
Owner at the Purchase Price (partial tenders will not qualify for this
preference); and
(2) completes the section captioned "Odd Lots" on the Letter of
Transmittal and, if applicable, on the Notice of Guaranteed Delivery; and
o then, after the purchase of all foregoing Trust Securities, all other
Trust Securities validly tendered at the Purchase Price before the
Expiration Date and not withdrawn, on the pro rata basis, if necessary
(with adjustments to avoid purchases of fractional Trust Securities).
If the proration of tendered Trust Securities is required, the Company will
determine the final proration factor as promptly as practicable after the
Expiration Date. Proration for each securityholder of the Trust tendering Trust
Securities other than Odd Lot Owners will be based on the ratio of the number of
Trust Securities tendered by such securityholder to the total number of Trust
Securities tendered by all securityholders other than Odd Lot Owners. Although
the Company does not expect to be able to announce the final results of such
proration until approximately seven AMEX trading days after the Expiration Date,
the Company will announce preliminary results of proration by press release as
promptly as practicable after the Expiration Date. Securityholders may obtain
such preliminary information from the Information Agent, at the telephone number
set forth on the back cover of this Offer to Purchase and may be able to obtain
such information from their brokers or financial advisors.
As described in Section 14, the number of Trust Securities that the Company
purchases from a securityholder of the Trust, and the order in which they are
purchased, may affect the federal income tax consequences of such purchase to
the securityholder and therefore may be relevant to a Securityholder's decision
whether to tender Trust Securities. The letter of
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<PAGE>
Transmittal affords each tendering securityholder of the Trust the opportunity
to designate the order of priority in which Trust Securities tendered are to be
purchased in the event of proration.
2. Tenders By Holders Of Fewer Than 100 Trust Securities.
The Company, upon the terms and subject to the conditions of the Offer,
will accept for purchase, without proration, all Trust Securities validly
tendered on or prior to the Expiration Date at the Purchase Price by or on
behalf of securityholders of the Trust who beneficially own and continue to own
as of the Expiration Date, an aggregate of fewer than 100 Trust Securities ("Odd
Lot Owners"). To avoid proration, however, the Odd Lot Owner must validly tender
all Trust Securities that such Odd Lot Owner beneficially owns; partial tenders
will not qualify for this preference. This preference is not available to
holders of 100 or more Trust Securities, even if such holders have separate
Certificates for fewer than 100 Trust Securities. Any Odd Lot Owner wishing to
tender, free of proration, all Trust Securities beneficially owned by such Odd
Lot Owner must complete the section captioned "Odd Lots" in the Letter of
Transmittal and, if applicable, on the notice of Guaranteed Delivery.
3. Procedure for Tendering Trust Securities.
Proper Tender of Trust Securities. For Trust Securities to be validly
tendered pursuant to the Offer:
o the certificates for such Trust Securities (or confirmation of receipt
of such Trust Securities pursuant to the procedures for book-entry
transfer set forth below), together with a properly completed and duly
executed Letter of Transmittal (or facsimile thereof) with any
required signature guarantees or an Agent's Message (as defined below)
in connection with a book entry transfer of Trust Securities, and any
other documents required by the Letter of Transmittal, must be
received on or before the Expiration Date by the Depositary at one of
its addresses set forth on the back cover of this Offer to Purchase;
or
o the tendering securityholder of the Trust must comply with the
guaranteed delivery procedure set forth below.
The term "Agent's Message" means a message, transmitted by the Book-Entry
Transfer Facility (as hereinafter defined) to and received by the Depositary and
forming a part of a book-entry confirmation which states that the Book-Entry
Transfer Facility has received an express acknowledgment from the participant in
the Book-Entry Transfer Facility tendering the Trust Securities which are the
subject of such book-entry confirmation that such participant has received and
agrees to be bound by the terms of the Letter of Transmittal and that
securityholder may enforce such agreement against such participant.
AS SPECIFIED IN INSTRUCTIONS 3 AND 4 OF THE LETTER OF TRANSMITTAL, EACH
SECURITYHOLDER OF THE TRUST DESIRING TO TENDER TRUST
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SECURITIES PURSUANT TO THE OFFER MUST PROPERLY INDICATE IN THE SECTION CAPTIONED
"DESCRIPTION OF TRUST SECURITIES TENDERED" ON THE LETTER OF TRANSMITTAL THE
NUMBER OF TRUST SECURITIES BEING TENDERED; PROVIDED, HOWEVER, THAT AN ODD LOT
OWNER MAY CHECK THE BOX IN THE SECTION ENTITLED "ODD LOTS" INDICATING A TENDER
OF ALL OF SUCH SECURITYHOLDER'S TRUST SECURITIES AT THE PURCHASE PRICE.
Odd Lot Owners who tender all of their Trust Securities must complete the
section entitled "Odd Lots" in the Letter of Transmittal and, if applicable, on
the Notice of Guaranteed Delivery in order to qualify for the preferential
treatment available to Odd Lot Owners as set forth in Section 1.
Signature Guarantees And Method Of Delivery. No signature guarantee is
required on the Letter of Transmittal if (i) the Letter of Transmittal is signed
by the registered holder of the Trust Securities exactly as the name of the
registered holder (which term, for purposes of this Section 3, includes any
participant in The Depository Trust Company (the "Book-Entry Transfer Facility")
whose name appears on a security position listing as the holder of the Trust
Securities) appears on the certificate tendered therewith, and payment and
delivery are to be made directly to such registered holder, or (ii) Trust
Securities are tendered for the account of a member firm of a registered
national securities exchange or the National Association of Securities Dealers,
Inc. or by a commercial bank or trust company having an office, branch or agency
in the United States which is a member of one of the Stock Transfer
Association's approved medallion programs (such as the Securities Transfer
Agents Medallion Program, the New York Stock Exchange Medallion Signature
Program or the Stock Exchange Medallion Program) (each such entity, an "Eligible
Institution"). In all other cases, all signatures on the Letter of Transmittal
must be guaranteed by an Eligible Institution. See Instructions 1 and 5 of the
Letter of Transmittal.
If a certificate representing Trust Securities is registered in the name of
a person other the signer of a Letter of Transmittal, or if payment is to be
made, or Trust Securities not purchased or tendered are to be issued, to a
person other than the registered holder, the certificate must be endorsed or
accompanied by an appropriate stock power, in either case signed exactly as the
name of the registered holder appears on the certificate, with the signature on
the certificate or stock power guaranteed by an Eligible Institution. In all
cases, payment for Trust Securities tendered and accepted for payment pursuant
to the Offer will be made only after timely receipt by the Depositary of
certificates for such Trust Securities (or a timely confirmation of a book-entry
transfer of such Trust Securities into the Depositary's account at the
Book-Entry Transfer Facility), a properly completed and duly executed Letter of
Transmittal (or facsimile thereof) with any required signature guarantees or an
Agent's Message in connection with a Book-Entry Transfer and any other documents
required.
THE METHOD OF DELIVERY OF ALL DOCUMENTS, INCLUDING CERTIFICATES, THE LETTER
OF TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS, IS AT THE ELECTION AND RISK OF
THE TENDERING SECURITYHOLDER OF THE TRUST. IF DELIVERY IS BY MAIL, REGISTERED
MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL
CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE TIMELY DELIVERY.
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Federal Income Tax Backup Withholding. To prevent federal income tax backup
withholding equal to 31% of the gross payments made pursuant to the Offer, each
securityholder of the Trust who does not otherwise establish an exemption from
such withholding must notify the Depositary of such securityholder's correct
taxpayer identification number (or certify that such taxpayer is awaiting a
taxpayer identification number) and provide certain other information by
completing a Substitute Form W-9 (included in the Letter of Transmittal).
Foreign securityholders of the Trust may be required to submit Form W-8 (or a
substitute form), certifying non-United States status, in order to avoid backup
withholding. See Instruction 10 of the Letter of Transmittal.
EACH SECURITYHOLDER OF THE TRUST SHOULD CONSULT SUCH SECURITYHOLDER'S TAX
ADVISOR AS TO WHETHER SUCH SECURITYHOLDER IS SUBJECT TO OR EXEMPT FOR FEDERAL
INCOME TAX WITHHOLDING.
For a discussion of certain other federal income tax consequences to
tendering Securityholders of the Trust, see Section 14.
Book-Entry Delivery. The Depositary will establish an account with respect
to the Trust Securities at the Book-Entry Transfer Facility for purposes of the
Offer within two business days after the date of this Offer to Purchase. Any
financial institution that is a participant in the Book-Entry Transfer
Facility's system may make book-entry delivery of the Trust Securities by
causing such facility to transfer such Trust Securities into the Depositary's
account in accordance with such facility's procedure for such transfer. Even
though delivery of Trust Securities may be effected through book-entry transfer
into the Depositary's account at the Book-Entry Transfer Facility, a properly
completed and duly executed Letter of Transmittal (or facsimile thereof), with
any required signature guarantees or an Agent's Message in connection with a
Book-Entry transfer and other required documents must, in any case, be
transmitted to and received by the Depositary at one of its addresses set forth
on the back cover of this Offer to Purchase prior to the Expiration Date, or the
guaranteed delivery procedure set forth below must followed. DELIVERY OF THE
LETTER OF TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS TO THE BOOK-ENTRY
TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
Guaranteed Delivery. If a securityholder of the Trust desires to tender
Trust Securities pursuant to the Offer and such securityholder's certificates
are not immediately available (or the procedures for book-entry transfer cannot
be completed on a timely basis) or time will not permit all required documents
to reach the Depositary by the Expiration Date, such Trust Securities may
nevertheless be tendered, provided that all of the following conditions are
satisfied:
o such tender is made by or through an Eligible Institution;
o the Depositary receives (by hand, mail, facsimile or telegram), on or
prior to the Expiration Date, a properly completed and duly executed
Notice of Guaranteed Delivery substantially in the form the Company
has provided with this Offer to Purchase, which includes a guarantee
by an Eligible Institution in the form set forth in such Notice of
Guaranteed Delivery; and
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o the certificates for all tendered Trust Securities in proper form for
transfer (or confirmation of book-entry transfer of such Trust
Securities into the Depositary's account at the Book-Entry Transfer
Facility), together with a properly completed and duly executed Letter
of Transmittal (or facsimile thereof) (or, in case of a book-entry
transfer, an Agent's Message) and any other documents required by the
Letter of Transmittal, are received by the Depositary within three
AMEX trading days after the date the Depositary receives such Notice
of Guaranteed Delivery.
Determination of Validity; Rejection of Trust Securities; Waiver of
Defects; No Obligation to Give Notice of Defects. All questions as to the number
of Trust Securities to be accepted, the price to be paid therefor, the form of
documents, the terms of the Offer and the validity, form, eligibility (including
the time of receipt) and acceptance for payment of any tender of Trust
Securities will be determined by the Company, in its sole discretion, which
determination shall be final and binding on all parties. The Company reserves
the absolute right to reject any or all tenders it determines not to be in
proper form or the acceptance of or payment for which may in the opinion of the
Company's counsel be unlawful. The Company also reserves the absolute right to
waive any of the conditions of the Offer or any defect or irregularity in the
tender of any particular Trust Securities. No tender of Trust Securities will be
deemed to be validly made until all defects and irregularities have been cured
or waived. Unless waived, any defects or irregularities in connection with
tenders must be cured within such time as the Company determines. None of the
Company, the Depositary or any other person is or will be obligated to give
notice of any defects or irregularities in tenders, and none of them will incur
any liability for failure to give such notice.
Tender Constitutes an Agreement. The Company's acceptance for payment of
Trust Securities tendered pursuant to the Offer will constitute a binding
agreement between the tendering holder of the Trust Securities and the Company
upon the terms and subject to the conditions of the Offer.
Securityholder's Acceptance of Terms and Conditions of Offer;
Representation and Warranty of Securityholder. It is a violation of Rule 14e-4
promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), for a person (directly or indirectly) to tender Trust Securities for his
own account unless, at the time of tender and at the end of the proration period
(including any extension thereof), the person so tendering (i) has a net long
position equal to or greater than the amount of Trust Securities tendered in (x)
Trust Securities or (y) other securities immediately convertible into,
exercisable for, or exchangeable for the amount of Trust Securities tendered and
will acquire such Trust Securities for tender by conversion, exercise or
exchange of such other securities and (ii) will cause such Trust Securities to
be delivered in accordance with the terms of the Offer. Rule 14e-4 provides a
similar restriction applicable to the tender or guarantee of a tender on behalf
of another person. The tender of Trust Securities pursuant to any one of the
procedures described above will constitute the tendering securityholder's
acceptance of the terms and conditions of the Offer as well as the tendering
securityholder's representation and warranty that (i) such securityholder has a
net long position in the Trust Securities being tendered within the meaning of
Rule 14e-4, (ii) the tender of such Trust Securities complies with Rule 14e-4
and (iii) such securityholder has the full power and authority to tender such
Trust Securities in accordance with the terms of the Offer.
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4. Withdrawal Rights.
Except as otherwise provided in this Section 4, the tender of Trust
Securities pursuant to the Offer is irrevocable. Trust Securities tendered
pursuant to the Offer may be withdrawn at any time prior to the Expiration Date
and, unless theretofore accepted for payment by the Company, may also be
withdrawn after 5:00 PM, New York City time, on Friday, February 11, 2000.
For a withdrawal to be effective, the Depositary must timely receive (at
one of its addresses set forth on the back cover of this Offer to Purchase) a
written notice of withdrawal. Such notice of withdrawal must specify the name of
the person who tendered the Trust Securities to be withdrawn, the number of
Trust Securities to be withdrawn and the name of the registered holder, if
different from that of the person who tendered such Trust Securities. If the
certificates have been delivered or otherwise identified to the Depositary,
then, prior to the release of such certificates, the tendering securityholder
must also submit the serial numbers shown on the particular certificates
evidencing the Trust Securities to be withdrawn and the signature on the notice
of withdrawal must be guaranteed by an Eligible Institution (except in the case
of Trust Securities tendered by an Eligible Institution). In case of Trust
Securities tendered by Book-Entry Transfer, the name and number of the account
at the Book-Entry Facility to be credited with the withdrawn Trust Securities
must be provided. All questions as to the form and validity (including time of
receipt) of notices of withdrawal will be determined by the Company, in its sole
discretion, which determination shall be final and binding on all parties. None
of the Company, the Depositary, the Information Agent or any other person is or
will be obligated to give any notice of any defects or irregularities in any
notice of withdrawal, and none of them will incur any liability for failure to
give such notice. Any Trust Securities properly withdrawn will thereafter be
deemed not validly tendered for purposes of the Offer. Withdrawn Trust
Securities may, however, be retendered by the Expiration Date by again following
any of the procedures described in Section 3.
If the Company extends the Offer, is delayed in its purchase of Trust
Securities or is unable to purchase Trust Securities pursuant to the Offer for
any reason, then, without prejudice to the Company's rights under the Offer, the
Depositary may, subject to applicable law, retain on behalf of the Company all
tendered Trust Securities, and the Trust Securities may not be withdrawn except
to the extent tendering Securityholders are entitled to withdrawal rights as
described in this Section 4.
5. Purchase of Trust Securities and Payment of Purchase Price.
Upon the terms and subject to the conditions of the Offer, the Company will
pay the Purchase Price for validly tendered Trust Securities, and will accept
for payment (and thereby purchase) as soon as practicable after the Expiration
Date Trust Securities validly tendered. For purposes of the Offer, the Company
will be deemed to have accepted for payment (and therefore purchased), subject
to proration, Trust Securities which are tendered at the Purchase Price and not
withdrawn when, as and if it gives oral or written notice to the Depositary of
its acceptance of such Trust Securities for payment pursuant to the Offer.
Upon the terms and subject to the conditions of the Offer (including
proration), the Company will purchase and pay the Purchase Price for 700,000
Trust Securities (subject to increase or decrease as provided in Section 1 and
Section 15) or such lesser number of Trust
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Securities as are validly tendered as promptly as practicable after the
Expiration Date. No alternative, conditional or contingent tenders will be
accepted, and no fractional Trust Securities will be purchased.
Payment for Trust Securities purchased pursuant to the Offer will be made
by depositing the aggregate Purchase Price therefor with the Depositary, which
will act as agent for tendering securityholders solely for the purpose of
receiving payment from the Company and transmitting payment to the tendering
securityholders.
In the event of proration, the Company will determine the proration factor
and pay for those tendered Trust Securities accepted for payment as soon as
practicable after the Expiration Date; however, the Company does not expect to
be able to announce the final results of any such proration until approximately
seven AMEX trading days after the Expiration Date. Certificates for all Trust
Securities not purchased, including Trust Securities not purchased due to
proration, will be returned (or, in the case of Trust Securities tendered by
book-entry transfer, such Trust Securities will be credited to the account
maintained with the Book-Entry Transfer Facility by the participant therein who
so delivered such Trust Securities) as soon as practicable after the Expiration
Date or termination of the Offer without expense to the tendering
Securityholder. UNDER NO CIRCUMSTANCES WILL THE COMPANY PAY INTEREST ON THE
PURCHASE PRICE, REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY DELAY IN MAKING
PAYMENT. IN ADDITION, IF CERTAIN EVENTS OCCUR, THE COMPANY MAY NOT BE OBLIGATED
TO PURCHASE TRUST SECURITIES PURSUANT TO THE OFFER. See Section 6.
The Company will pay all transfer taxes, if any, payable on the transfer of
Trust Securities purchased pursuant to the Offer; provided, however, that if
payment of the Purchase Price is to be made to, or (in the circumstances
permitted by the Offer) if unpurchased Trust Securities are to be registered in
the name of, any person other than the registered holder, or if tendered
certificates are registered in the name of any person other than the person
signing the Letter of Transmittal, the amount of all stock transfer taxes, if
any (whether imposed on the registered holder or such other person), payable on
account of the transfer to such person will be deducted from the Purchase Price
unless evidence satisfactory to the Company of the payment of such taxes or
exemption therefrom is submitted. See Instruction 6 of the Letter of
Transmittal.
THE COMPANY MAY BE REQUIRED TO WITHHOLD AND REMIT TO THE INTERNAL REVENUE
SERVICE (THE "IRS") 31% OF THE GROSS PROCEEDS PAID TO ANY TENDERING
SECURITYHOLDER OR OTHER PAYEE WHO FAILS TO COMPLETE FULLY AND SIGN THE
SUBSTITUTE FORM W-9 INCLUDED IN THE LETTER OF TRANSMITTAL. SEE SECTION 3.
6. Certain Conditions of the Offer.
Notwithstanding any other provision of the Offer, the Company shall not be
required to accept for payment, purchase or pay for any Trust Securities
tendered, and may terminate or amend the Offer or may postpone the acceptance
for payment of, the purchase of and the payment for any Trust Securities
tendered, if at any time on or after January 14, 2000, and at or before the time
of purchase of any such Trust Securities, any of the following events shall have
occurred (or shall have been determined by the Company to have occurred) which,
in the Company's sole judgment in any such case and regardless of the
circumstances (including any
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<PAGE>
action or inaction by the Company), makes it inadvisable to proceed with the
Offer or with such purchase or payment:
o there shall have been threatened, instituted or pending any action or
proceeding by any government or governmental, regulatory or
administrative agency, authority or tribunal or any other person,
domestic or foreign, or before any court or governmental, regulatory
or administrative authority, agency or tribunal, domestic or foreign,
which; (1) challenges, seeks to make illegal, delays or otherwise,
directly or indirectly, restrains or prohibits the making of the
Offer, the acquisition of Trust Securities pursuant to the Offer or
otherwise relates in any manner to or affects the Offer or (2) in the
Company's sole judgment, could materially affect the business,
condition (financial or other), income, operations or prospects of the
Company and its subsidiaries, taken as a whole, or otherwise
materially impair in any way the contemplated future conduct of the
business of the Company or any of its subsidiaries or materially
impair the Offer's contemplated benefits to the Company; or
o there shall have been any action threatened, instituted, pending or
taken, or approval withheld, or any statute, rule, regulation,
judgment, order or injunction threatened, proposed, sought,
promulgated, enacted, entered, amended, enforced or deemed to be
applicable to the Offer or the Company or any of its subsidiaries by
any court or any government or governmental, regulatory or
administrative authority, agency or tribunal, domestic or foreign,
which, in the Company's sole judgment, would or might directly or
indirectly: (1) challenge, seek to make illegal, delay or otherwise,
directly or indirectly, restrain or prohibit the making of the Offer,
the acquisition of Trust Securities pursuant to the Offer or otherwise
relate in any manner to or affect the Offer or (2) materially affect
the business, condition (financial or other), income, operations or
prospects of the Company and its subsidiaries, taken as a whole, or
otherwise materially impair in any way the contemplated future conduct
of the business of the Company or any of its subsidiaries or
materially impair the Offer's contemplated benefits to the Company; or
o there shall have occurred: (1) the declaration of any banking
moratorium or suspension of payments in respect of banks in the United
States, (2) any general suspension of trading in, or limitation on
prices for, securities on any United States national securities
exchange or in the over-the-counter market, (3) the commencement of a
war, armed hostilities or any other national or international crisis
directly or indirectly involving the United States, (4) any limitation
(whether or not mandatory) by any governmental, regulatory or
administrative agency or authority on, or any event which, in the
Company's sole judgment, might affect, the extension of credit by
banks or other lending institutions in the United States, (5) any
significant decrease in the market price of the Trust Securities or in
the general level of market prices of equity securities in the United
States or abroad, (6) any change in the general political, market,
economic or financial conditions in the United States or abroad that
could have a material adverse effect on the Company's business,
operations or prospects or the trading in the Trust Securities or
that, in the sole judgment of the Company, makes it inadvisable to
proceed with the Offer or (7) in the
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case of any of the foregoing existing at the time of the commencement
of the Offer, in the Company's sole judgment, a material acceleration
or worsening thereof; or
o any change shall have occurred, be pending or be threatened in the
business, condition (financial or other), income, operations, Trust
Security ownership or prospects of the Company and its subsidiaries
taken as a whole, which, in the Company's sole judgment, is or may be
material to the Company, or any other event shall have occurred which,
in the Company's sole judgment, may impair the Offer's contemplated
benefits to the Company; or
o a tender or exchange offer for any or all of the Trust Securities
(other than the Offer), or any merger, business combination or other
similar transaction with or involving the Company or any subsidiary,
shall have been proposed, announced or made by any person; or
o (1) any entity, "group" (as that term is used in Section 13(d)(3) of
the Exchange Act) or person shall have acquired or proposed to acquire
beneficial ownership of more than 5% of the outstanding Trust
Securities (other than any such person, entity or group who has filed
a Schedule 13D or Schedule 13G with the Securities and Exchange
Commission (the "Commission") before December 15, 1999), (2) any such
entity, group or person who has filed a Schedule 13D or Schedule 13G
with the Commission before December 15, 1999 shall have acquired or
proposed to acquire beneficial ownership of an additional 2% or more
of the outstanding Trust Securities or (3) any person, entity or group
shall have made a public announcement reflecting an intent to acquire
the Company or any of its subsidiaries or any of their respective
assets or securities.
The foregoing conditions are for the Company's sole benefit and may be
asserted by the Company regardless of the circumstances giving rise to any such
condition (including any action or inaction by the Company) or may be waived by
the Company in whole or in part. The Company's failure at any time to exercise
any of the foregoing rights shall not be deemed a waiver of any such right, and
each such right shall be deemed an ongoing right which may be asserted at any
time and from time to time. Any determination by the Company concerning the
events described in this Section 6 shall be final and binding on all parties.
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7. Price Range of Trust Securities.
The Trust Securities are traded on AMEX under the symbol "UHG.Pr.A." The
following table sets forth for the periods indicated the high and low sales
prices per Trust Security as reported on AMEX, during the period from April 1998
(the first month of trading for the Trust Securities) until December 14, 1999.
Fiscal Year Ended June 30, 1998 High Low
4th Quarter (commencing April 1998) .............. $25.2500 $24.3750
Fiscal Year Ended June 30, 1999
1st Quarter ...................................... $24.9375 $22.0000
2nd Quarter ...................................... 23.3750 19.8750
3rd Quarter ...................................... 22.5625 22.0000
4th Quarter ...................................... 22.5000 22.6250
Fiscal Year Ended June 30, 2000
1st Quarter ...................................... $21.6250 $15.2500
2nd Quarter (through December 14, 1999 ........... 15.6875 12.0000
On December 14, 1999, the last trading day prior to the commencement of the
Offer, the closing per Trust Security sales price as reported on AMEX was
$14.125. THE COMPANY URGES SECURITYHOLDERS OF THE TRUST TO OBTAIN CURRENT
QUOTATIONS OF THE MARKET PRICE OF THE TRUST SECURITIES.
8. Interest of Directors and Executive Officers of the Company and Trustees of
the Trust; Transactions and Arrangements Concerning the Trust Securities.
As of December 14, 1999, the Company had issued and outstanding 2,530,000
Trust Securities. The 700,000 Trust Securities that the Company is offering to
purchase represent approximately 28% of the Trust Securities outstanding as of
December 14, 1999.
Certain executive officers and directors of the Company who are also
Administrative trustees of the Trust may participate in the Offer on the same
basis as the Trust's other securityholders. The Company has been advised that
two executive officers may tender up to an aggregate of 25,800 Trust Securities
pursuant to the Offer. Robert Kassel, Chief Executive Officer, President and
Chairman of the Board of Directors of the Company and an Administrative Trustee
of the Trust currently holds 18,800 of such Trust Securities and Richard
Raleigh, Chief Operating Officer and a Director of the Company and an
Administrative Trustee of the Trust currently holds 7,000 of such Trust
Securities.
Neither the Company nor, to the best of the Company's knowledge, any of its
affiliates, directors or executive officers, or any of the executive officers or
directors of its affiliates, is a party to any contract, arrangement,
understanding or relationship with any other person relating, directly or
indirectly, to the Offer with respect to any securities of the Trust (including,
but not
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limited to, any contract, arrangement, understanding relationship concerning the
transfer or the voting of any such securities, joint ventures, loan or option
arrangements, puts or calls, guaranties of loans, guaranties against loss or the
giving or withholding of proxies, consents or authorizations).
Except as disclosed in this Offer and the documents incorporated by
reference herein, the Company has no plans or proposals which relate to or would
result in (a) the acquisition by any person of additional securities of the
Trust or the disposition of securities of the Trust; (b) an extraordinary
corporate transaction, such as a merger, reorganization or liquidation,
involving the Trust or any of its subsidiaries; (c) a sale or transfer of a
material amount of assets of the Trust or any of its subsidiaries; (d) any
change in the present management of the Trust; (e) any material change in the
present dividend rate or policy, indebtedness or capitalization of the Trust ;
(f) any other material change in the Trust's structure or business; (g) any
actions which may impede the acquisition of control of the Trust by any person;
(h) a class of equity security of the Trust being delisted from a national
securities exchange or ceasing to be authorized to be quoted in an inter-dealer
quotation system of a registered national securities association; (i) a class of
equity securities of the Trust becoming eligible for termination of registration
pursuant to Section 12(g)(4) of the Exchange Act; or (j) the suspension of the
any obligation the Trust may have to file reports pursuant to Section 15(d) of
the Exchange Act.
9. Background and Purpose of the Offer.
The Company is making the Offer because the Board of Directors of the
Company believes that, given the Company's business, assets and prospects and
the current market price of the Trust Securities the purchase of the Trust
Securities is in the best interests of the Company and is an attractive use of
the Company's funds.
Based on the foregoing, the Board of Directors decided that it would be in
the best interests of the Company to make the Offer and to consummate the
repurchase of Trust Securities in accordance with the terms of the Offer.
NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS NOR THE TRUST OR ITS
ADMINISTRATIVE TRUSTEES MAKES ANY RECOMMENDATION TO ANY SECURITYHOLDER OF THE
TRUST AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING ANY OR ALL OF SUCH
SECURITYHOLDER'S TRUST SECURITIES AND HAS NOT AUTHORIZED ANY PERSON TO MAKE ANY
SUCH RECOMMENDATION. SECURITYHOLDERS OF THE TRUST ARE URGED TO EVALUATE
CAREFULLY ALL INFORMATION IN THE OFFER, CONSULT THEIR OWN INVESTMENT AND TAX
ADVISORS AND MAKE THEIR OWN DECISIONS WHETHER TO TENDER TRUST SECURITIES AND, IF
SO, HOW MANY TRUST SECURITIES TO TENDER.
Any Trust Securities that the Company acquires pursuant to the Offer are
expected to either become authorized but unissued Trust Securities or held in
treasury by the Company and will be available for the Company to reissue without
further securityholder action (except as required by applicable law or the rules
of any securities exchange, including the AMEX, on which the Trust Securities
are listed).
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10. Certain Information About the Trust and the Company.
The Trust is a statutory business trust created under Delaware law pursuant
to (i) the Amended and Restated Trust Agreement of the Trust among the Company,
as depositor, the Wilmington Trust Company, as delaware trustee, the Wilmington
Trust Company as property trustee, certain administrative trustees and the
holders of the Trust Securities (the "Trust Agreement"), and (ii) the filing of
a Certificate of Trust with the Delaware Secretary of State on March 16, 1998.
The Trust's business and affairs are conducted by the property trustee, the
Delaware trustee and three individual administrative trustees who are officers
of the Company. The Trust was created and exists for the exclusive purposes of
(i) issuing and selling the Trust Securities which sales were effected in April
1998, (ii) using the proceeds from the sale of the Trust Securities to acquire
the 9.4% Junior Subordinated Deferrable Interest Debentures (the "Junior
Subordinated Debentures") issued by the Company which mature on April 15, 2028
and (iii) engaging in only those other activities necessary, advisable or
incidental thereto. The Junior Subordinated Debentures are the sole assets of
the Trust and payments by the Company under the Junior Subordinated Debentures
and the Expense Agreement between the Company and the Trust are the sole
revenues of the Trust. The Junior Subordinated Debentures bear interest at an
annual rate of 9.4% payable monthly in arrears on the 15th day of each calendar
month. Distributions on the Trust Securities are paid at the annual rate of 9.4%
of the stated liquidation amount of $25 per Trust Security, payable monthly in
arrears on the 15th day of each calendar month. All securityholders tendering
Trust Securities pursuant to this Offer shall continue to receive distributions
on such Trust Securities until the Expiration Date. All of the common securities
of the Trust are owned by the Company. The common securities rank pari passu,
and payments will be made thereon pro rata, with the Trust Securities, except
that upon the occurrence and during the continuance of an event of default under
the Trust Agreement resulting from an event of default under the Indenture dated
as of April 17, 1998 between the Company and the Wilmington Trust Company, as
trustee, the rights of the Company as holder of the common securities to payment
in respect of distributions and payments upon liquidation, redemption or
otherwise are subordinated to the rights of the holders of the Trust Securities.
The Trust has a term of 31 years, but may dissolve earlier as provided in the
Trust Agreement.
The Company has executed an irrevocable guarantee, on a subordinated basis,
of the Trust's obligations under the Trust Securities, but only to the extent
that the Trust has funds sufficient to make such payments, and therefore is not
a guarantee of collection (the "Guarantee").
The Company has agreed to pay in full on a subordinated basis, to the
extent set forth therein, the Guarantee Payments (as defined below) to the
holders of the Trust Securities, as and when due, regardless of any defense,
right of set-off or counterclaim that the Trust may have or assert, other than
the defense of payment. The following payments with respect to the Trust
Securities, to the extent not paid by or on behalf of the Trust (the "Guarantee
Payment'), are subject to the Guarantee: (i) any accumulated and unpaid
Distributions (as such term is defined in the Guarantee) required to be paid on
the Trust Securities, to the extent that the Trust has funds on hand available
therefor at such time, (ii) the redemption price with respect to any Trust
Securities called for redemption, to the extent that the Trust has funds on hand
available therefor at such time, and (iii) upon a voluntary or involuntary
dissolution, winding up or liquidation of the Trust (unless the Junior
Subordinated Debentures are distributed to holders of the Trust Securities), the
lesser of (a) the Liquidation Distribution (as such term is defined in the
Guarantee) and (b) the amount of assets of the Trust remaining available for
distribution to holders of Trust Preferred
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<PAGE>
Securities, after satisfaction of liabilities to creditors of the Trust as
required by law. The Company's obligation to make a Guarantee Payment may be
satisfied by direct payment of the required amounts by the Company to the
holders of the Trust Securities or by causing the Trust to pay such amounts to
such holders.
The Company is a leading manufacturer and marketer of a broad range of
consumer lawn and garden products. The Company's products include weed
preventive landscape fabrics, fertilizer spikes, decorative landscape edging,
weed trimmer replacement heads, shade cloth and root feeders, which are sold
under recognized brand names such as WeedBlock(R) , Jobe's(R), Emerald Edge(R),
Weed Wizard(TM) Shade Fabric(TM), Ross(R), and Tensar(R). The Company markets
its products through most large national home improvement and mass merchant
retailers, including Home Depot, Lowe's, Kmart, Wal-Mart and Home Base.
The Trust and the Company each have their principal offices located at 655
Montgomery Street, San Francisco, California 94111 and their telephone number is
(415) 616-8111.
-20-
<PAGE>
SUMMARY HISTORICAL FINANCIAL INFORMATION
The table below includes summary historical financial information of the
Company. Certain information concerning the Trust, which is a subsidiary of the
Company and is exempt from reporting requirements under Sections 13 or 15(d)
under the Exchange Act, is included in the Company's financial statements. The
summary financial information has been derived from the audited consolidated
financial statements as reported in the Company's Annual Report on Form 10-K for
the year ended June 30, 1999 and the unaudited consolidated financial statements
as reported in the Company's quarterly report on Form 10-Q for the quarter ended
September 30, 1999, and such reports are incorporated herein by reference. In
the opinion of management, the unaudited financial statements for the three
months ended September 30, 1999 and 1998 reflect all adjustment necessary for a
fair statement of the results of operations for the interim periods. However,
the results of operations for any interim period are not necessarily indicative
of results for the full year. The summary historical financial information
should be read in conjunction with, and is qualified in its entirety by
reference to, the consolidated financial statements and related notes included
in the reports referred to above. Copies of these reports may be obtained from
the Commission in the manner specified in "Additional Information" below.
U.S. HOME & GARDEN INC.
SUMMARY HISTORICAL FINANCIAL INFORMATION
(In thousands, except per Share data)
<TABLE>
<CAPTION>
Three Months Ended Year Ended
September 30, June 30,
-------------------- ---------------------
1999 1998 1999 1998
------- ------- ------- -------
(unaudited)
<S> <C> <C> <C> <C>
Income Statement Data:
Net sales and operating revenues and other revenues $12,985 $10,768 $89,346 $67,149
Income/(loss) before extraordinary item (1,981) (1,223) 2,049 6,976
Net income/(loss) (1,981) (1,223) 2,049 5,526
Balance Sheet Data:
Working capital 29,517 42,868 32,874 46,743
Total assets 130,408 116,937 137,464 126,813
Total tangible assets 48,774 53,770 55,267 63,418
Total indebtedness 78,250 63,250 78,750 63,250
Total Stockholders' equity 43,546 47,619 46,484 51,599
Per Share Data:
Income per Common Share before extraordinary item (0.10) (0.06) 0.10 0.39
Extraordinary items -- -- -- (0.08)
Net income per Common Share (0.10) (0.06) 0.10 0.31
Net income per Share on a fully diluted basis (0.10) (0.06) 0.09 0.24
Ratio of earnings to fixed charges(1) N.A. N.A. 139% 383%
Book value per Share as of the most recent fiscal $2.24 $2.38 $2.39 $2.59
year end and as of the date of the latest interim balance
sheet
</TABLE>
NOTES TO SUMMARY HISTORICAL FINANCIAL INFORMATION
(1) Due to the seasonal nature of the Company's operations, the Company
incurred pre tax losses from operations during the quarter ended September 30,
on a historical and pro forma basis.
-21-
<PAGE>
SUMMARY UNAUDITED PRO FORMA FINANCIAL INFORMATION
The following unaudited pro forma financial information sets forth for the
periods set forth below the historical financial information concerning the
Company as adjusted to give effect to the purchase of 700,000 Trust Securities
at a Purchase Price of $15.00 per Trust Security pursuant to the Offer to
Purchase. The pro forma adjustments assume the transaction occurred, for
purposes of the summary consolidated income statement, as of the first day of
the period presented, and, for purposes of the consolidated balance sheet, as of
the balance sheet date. The pro forma financial information does not purport to
be indicative of the results that may be obtained in the future or that would
have actually been obtained had the Offer occurred as of the dates indicated.
The pro forma information should be read in conjunction with the Summary
Historical Financial Information.
U.S. HOME & GARDEN INC.
SUMMARY UNAUDITED PRO FORMA FINANCIAL INFORMATION
(In thousands, except per Share data)
<TABLE>
<CAPTION>
Three Months Ended Year Ended
September 30, June 30,
-------------------- --------
1999 1998 1999
------- ------- -------
(unaudited)
<S> <C> <C> <C>
Income Statement Data:
Net sales and operating revenues and other revenues $12,985 $10,768 $89,346
Income/(loss) before extraordinary item (1,870) (1,108) 2,534
Net income/(loss) (2) (1,870) 2,577 6,219
Balance Sheet Data:
Working capital 26,602 40,457 29,833
Total assets 127,204 113,737 134,634
Total tangible assets 46,359 51,359 53,226
Total indebtedness 71,250 56,250 71,750
Total Stockholders' equity 47,342 51,419 50,654
Per Share Data:
Income per Common Share before extraordinary item (0.10) (0.05) 0.13
Extraordinary items (2) -- 0.18 0.19
Net income per Common Share (0.10) 0.13 0.32
Net income per Share on a fully diluted basis (0.10) 0.13 0.26
Ratio of earnings to fixed charges: (1) N.A. N.A. 156%
Book value per Share as of the most recent fiscal $2.43 $2.57 $2.61
year end and as of the date of the latest interim balance
sheet
</TABLE>
NOTES TO UNAUDITED PROFORMA FINANCIAL INFORMATION
(1) Due to the seasonal natural of the Company's operations, the Company
incurred pre tax losses from operations during the quarters ended September 30
on a historical and pro forma basis.
(2) The extraordinary gain for retirement of debt is $3,685,000. This gain
results from a $7 million pre-tax gain less an $889,000 write off of deferred
debt costs and a tax provision of $2,426,000.
-22-
<PAGE>
11. Source and Amount of Funds.
Assuming that the Company purchases 700,000 Trust Securities pursuant to
the Offer at a Purchase Price of $15.00 per Trust Security, the Company expects
the maximum aggregate cost of the Offer, including all fees and expenses
applicable to the Offer, to be approximately $10,600,000. The Company
anticipates that the funds necessary to purchase Trust Securities pursuant to
the Offer and to pay the related fees and expenses will come from its credit
facility.
On October 13, 1998, the Company entered into a credit agreement (the
"Credit Agreement") with the Bank of America N.A. (the "Bank"). The Credit
Agreement provides for a revolving credit facility of up to $25 million to
finance the cost of acquisitions by the Company (the "Acquisition Facility") and
a revolving credit facility of up to $20 million to finance the Company's
working capital requirements (the "Working Capital Facility"). Both of such
credit facilities expire on October 14, 2001, at which time borrowings under the
acquisition Facility are payable on a term loan basis in quarterly installments
commencing December 31, 2001, with the final installment maturing on September
30, 2004 and, unless refinanced, borrowings under the Working Capital Facility
mature on such expiration date. In addition, borrowings under the Acquisition
Facility are subject to mandatory prepayment from the net proceeds of certain
dispositions of assets, and certain losses or condemnation of property, from
excess cash (as defined in the Credit Agreement) generated by the Company and
its subsidiaries and 50% of the net proceeds of any new issuances of the
Company's capital stock after such expiration date. Mandatory prepayments by the
Company prior to such expiration have the effect of reducing the Acquisition
Facility by the prepayment amount. In addition, during a period of 30
consecutive days during the period July 1 to December 1 in each year, no
borrowings can be outstanding under the Working Capital Facility. The Company
has the right under the Credit Agreement to terminate or permanently reduce the
Bank's commitments under such credit facilities in the minimum amount of $1.0
million and multiples thereof subject to the payment to the Bank of "reduction
fees" of 1% of the amount terminated or reduced on or prior to December 31, 1999
and 0.5% of the amounts terminated or reduced thereafter. Borrowings under such
credit facilities bear interest at variable annual rates selected by the Company
based on LIBOR ("London Interbank Offered Rate"), or the higher of 0.5% above
the then current Federal Funds Rate or the Bank's prime rate plus, in each case,
an applicable marginal rate of interest.
The Company's obligations under the Credit Agreement are guaranteed by its
subsidiaries and secured by a security interest in favor of the Bank in
substantially all of the assets of the Company and substantially all of its
subsidiaries. Upon the occurrence of an event of default specified in the Credit
Agreement, the maturity of loans outstanding under the Credit Agreement may be
accelerated by the Bank, which may also foreclose its security interest on the
assets of the Company and its subsidiaries.
Under the Credit Agreement, the Company and its subsidiaries are required,
among other things to comply with (a) certain limitations on incurring
additional indebtedness, liens and guaranties, on dispositions of assets,
payment of cash dividends and cash redemption and repurchases of securities, and
(b) certain limitations on merger, liquidations, changes in business,
investments, loans and advances, affiliate transactions and certain
acquisitions. In
-23-
<PAGE>
addition, the Company must comply with certain financial tests and ratios. A
violation of any of these covenants constitutes an event of default under the
Credit Agreement.
12. Effects of the Offer on the Market for Trust Securities; Registration Under
The Exchange Act.
The Company's purchase of Trust Securities pursuant to the Offer will
reduce the number of Trust Securities that might, otherwise trade publicly and
is likely to reduce the number of securityholders of the Trust. Nonetheless, the
Company anticipates that there will still be a sufficient number of Trust
Securities outstanding and publicly traded following the Offer to ensure a
continued trading market in the Trust Securities on AMEX.
Based on the published guidelines of AMEX, the Company believes that its
purchase of Trust Securities pursuant to the Offer will not cause its remaining
Trust Securities to be delisted from AMEX.
The Trust Securities are currently "margin securities" under the rules of
the Federal Reserve Board. This has the effect, among other things, of allowing
brokers to extend credit on the collateral of the Trust Securities. The Company
believes that, following the purchase of Trust Securities pursuant to the Offer,
the Trust Securities will continue to be "margin securities" for purposes of the
Federal Reserve Board's margin regulations.
The Trust Securities are registered under the Exchange Act, however, the
Trust is exempt from the reporting obligations under Sections 13 and 15(d) of
the Exchange Act by virtue of its status as solely a financing subsidiary of the
Company that has no independent operation and whose obligations with respect to
the Trust Securities are subject to the Guarantee. The Company believes that its
purchase of Trust Securities pursuant to the Offer will not result in the Trust
Securities becoming eligible for deregistration under the Exchange Act.
13. Certain Legal Matters; Regulatory Approvals.
The Company is not aware of any license or regulatory permit that is
material to its business that might be adversely affected by its acquisition of
Trust Securities as contemplated in the Offer or of any approval or other action
by any government or governmental, administrative or regulatory authority or
agency, domestic or foreign, that would be required for the Company's
acquisition or ownership of Trust Securities as contemplated by the Offer. After
this Trust Security repurchase is completed, the Company believes that it will
have sufficient liquidity to operate its existing business. Should any such
approval or other action be required, the Company currently contemplates that it
will seek such approval or other action. The Company cannot predict whether it
may determine that it is required to delay the acceptance for payment of, or
payment for, Trust Securities tendered pursuant to the Offer pending the outcome
of any such matter. There can be no assurance that any such approval or other
action, if needed, would be obtained or would be obtained without substantial
conditions or that the failure to obtain any such approval or other action might
not result in adverse consequences to the Company's business. The Company's
obligations under the Offer to accept for payment and pay for Trust Securities
are subject to certain conditions. See Section 6.
-24-
<PAGE>
14. Certain Federal Income Tax Consequences.
The following discussion is a summary of the material federal income tax
consequences to holders of the Trust Securities arising from the disposition
thereof pursuant to the Offer. The following discussion assumes the accuracy of
the facts set forth in the Offer to Purchase. The discussion set forth in this
section, unless otherwise stated, deals only with Trust Securities held as
capital assets by United States Persons (defined below) As used herein, a
"United States Person" means a person that is (i) a citizen or resident of the
United States as determined for United States federal income tax purposes, (ii)
a corporation, partnership or other entity created or organized in or under the
laws of the United States or any political subdivision thereof, (iii) an estate
the income of which is subject to United States federal income taxation
regardless of its source, or (iv) a trust if a United States court is able to
exercise primary supervision over the administration of such trust and one or
more United States persons have the authority to control all substantial
decisions of such trust. The tax treatment of holders may vary depending on
their particular situation. The following discussion does not address all the
tax consequences that may be relevant to a particular holder or to holders who
may be subject to special tax treatment, such as banks, real estate investment
trusts, regulated investment companies, insurance companies, dealers in
securities or currencies, tax-exempt investors, foreign investors, investors
that hold the Trust Securities as part of a hedging, straddle, constructive
sale, or conversion or other risk reduction transaction or whose functional
currency is not the U.S. dollar. In addition, the following discussion does not
include any description of any alternative minimum tax consequences or the tax
laws of any state, local or foreign government that may be applicable to a
holder of Trust Securities. The following discussion is based on the Internal
Revenue Code of 1986, as amended (the "Code"), the Treasury regulations
promulgated thereunder and administrative and judicial interpretations thereof,
as of the date hereof, all of which are subject to change, possibly on a
retroactive basis.
The following discussion does not address the tax consequences that might
be relevant to persons that are not United States Persons ("non-United States
Persons"). Non-United States Persons should consult their own tax advisors as to
the specific United States federal income and other tax consequences of the
purchase, ownership and disposition of Trust Preferred Securities.
The authorities on which the discussion herein are based are subject to
various interpretations, and is not binding on the IRS or the courts, either of
which could take a contrary position. Moreover, no rulings have been or will be
sought from the IRS with respect to the transactions described herein.
Accordingly, there can be no assurance that the IRS will not challenge the
interpretations expressed herein or that a court would not sustain such a
challenge.
HOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO THE TAX
CONSEQUENCES TO THEM OF DISPOSITION OF THE TRUST SECURITIES PURSUANT TO THE
OFFER INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL, FOREIGN, AND OTHER TAX
LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN UNITED STATES FEDERAL OR OTHER TAX
LAWS.
-25-
<PAGE>
Classification of the Trust
In connection with the issuance of the Trust Securities, the Company
believes that, under current law and assuming compliance with the terms of the
Trust Agreement, the Trust has been and will be classified as a grantor trust
and not as an association taxable as a corporation for United States federal
income tax purposes. As a result, each beneficial owner of the Trust Securities
has been and will be treated as owning an undivided beneficial interest in the
Junior Subordinated Debentures. Accordingly, each securityholder has been and
will be required to include in its gross income its pro rata share of the
interest income or original issue discount ("OID") that is paid or accrued on
the Junior Subordinated Debentures.
Classification of the Junior Subordinated Debentures
The Company intends to take the position that the Junior Subordinated
Debentures will be classified for United States federal income tax purposes as
indebtedness of the Company under current law, and, by acceptance of a Trust
Security, each holder covenanted to treat the Junior Subordinated Debentures as
indebtedness and the Trust Securities as evidence of an indirect beneficial
ownership interest in the Junior Subordinated Debentures. No assurance can be
given relating to the classification of the Junior Subordinated Debentures as
indebtedness and no assurance can be given that such position of the Company
will not be challenged by the IRS or, if challenged, that such a challenge will
not be successful. The remainder of this "Certain Federal Income Tax
Consequences" section assumes that the Junior Subordinated Debentures will be
classified for United States federal income tax purposes as indebtedness of the
Company.
Sales or Redemption of Trust Preferred Securities
Gain or loss will be recognized by a securityholder on the sale of Trust
Securities pursuant to the Offer in an amount equal to the difference between
the amount realized (which for this purpose, will exclude amounts attributable
to accrued interest or OID not previously included in income) and the
securityholder's adjusted tax basis in the Trust Securities sold or so redeemed.
Gain or loss recognized by a securityholder on Trust Securities held for more
than one year will generally be taxable as long-term capital gain or loss.
Amounts attributable to accrued interest or OID with respect to a
securityholder's pro rata share of the Junior Subordinated Debentures not
previously included in income will be taxable as ordinary income.
Backup Withholding Tax
To prevent federal income tax backup withholding equal to 31% of the gross
payments made pursuant to the Offer, each securityholder of the Trust who does
not otherwise establish an exemption from such withholding must notify the
Depositary of such securityholder's correct taxpayer identification number (or
certify that such taxpayer is awaiting a taxpayer identification number) and
provide certain other information by completing a Substitute Form W-9 (included
in the Letter of Transmittal). Foreign securityholders of the Trust may be
required to submit Form W-8 (or a substitute form), certifying non-United States
status, in order to avoid backup withholding. See Instruction 10 of the Letter
of Transmittal.
-26-
<PAGE>
EACH SECURITYHOLDER OF THE TRUST SHOULD CONSULT SUCH SECURITYHOLDER'S TAX
ADVISOR AS TO WHETHER SUCH SECURITYHOLDER IS SUBJECT TO OR EXEMPT FROM FEDERAL
INCOME TAX WITHHOLDING.
15. Extension of the Offer; Termination; Amendments.
The Company expressly reserves the right, at any time or from time to time,
in its sole discretion, and regardless of whether any of the conditions
specified in Section 6 shall have occurred, to extend the period of time during
which the Offer is open by giving oral or written notice of such extension to
the Depositary and making a public announcement of the extension. The Company
also expressly reserves the right, in its sole discretion, to terminate the
Offer and not accept for payment or pay for any Trust Securities not previously
accepted for payment or paid for or, subject to applicable law, to postpone
payment for Trust Securities upon the occurrence of any of the conditions
specified in Section 6 by giving oral or written notice of the termination or
postponement to the Depositary and making a public announcement.
The Company's reservation of the right to delay payment for Trust
Securities that it has accepted for payment is limited by Rules 13e-4(f)(2) and
13e-4(f)(5) promulgated under the Exchange Act. Rule 13e-4(f)(2) requires that
the Company permit Trust Securities tendered pursuant to the Offer to be
withdrawn: (i) at any time during the period the Offer remains open and (ii) if
not yet accepted for payment, after the expiration of forty business days from
the commencement of the Offer. Rule 13e-4(f)(5) requires that the Company must
either pay the consideration offered or return the Trust Securities tendered
promptly after the termination or withdrawal of the Offer.
Subject to compliance with applicable law, the Company further reserves the
right, in its sole discretion, at any time or from time to time, to amend the
Offer in any respect, including increasing or decreasing the number of Trust
Securities the Company may purchase or the price it may pay pursuant to the
Offer. Amendments to the Offer may be made at any time or from time to time by
public announcement of the amendment, and in the case of an extension, the
announcement will be issued no later than 9:00 A.M., New York City time, on the
next business day after the previously scheduled Expiration Date. Any public
announcement made pursuant to the Offer will be disseminated promptly to
Securityholders in a manner reasonably designed to inform Securityholders of
such change. Without limiting the manner in which the Company may choose to make
a public announcement, except as required by applicable law, the Company has no
obligation to publish, advertise or otherwise communicate any such public
announcement other than by making a release to the PR Newswire.
If the Company materially changes the terms of the Offer or the information
concerning the Offer, or if it waives a material condition of the Offer, the
Company will extend the Offer to the extent required by Rules 13e-4(d)(2) and
13e-4(e)(2) promulgated under the Exchange Act. The minimum period during which
an offer must remain open following material changes in the terms of the offer
or information concerning the offer (other than a change in price or a change in
percentage of securities sought) will depend on the facts and circumstances,
including the relative materiality of such terms or information. If (i) the
Company increases or decreases the price to be paid for Trust Securities, the
Company increases the number of Trust Securities being sought and any such
increase in the number of Trust Securities being sought exceeds 2% of the
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<PAGE>
outstanding Trust Securities, or the Company decreases the number of Trust
Securities being sought, and (ii) the Offer is scheduled to expire at any time
earlier than the expiration of a period ending on the tenth business day from,
and including, the date that notice of such increase or decrease is first
published, sent or given, the Offer will be extended until the expiration of the
period of ten business days.
16. Fees and Expenses.
The Company has retained Continental Stock Transfer & Trust Company, as
Depositary and Georgeson Shareholder Communication Inc. as Information Agent
in connection with the Offer. The Depositary and Information Agent will each
receive reasonable and customary compensation for their services. The Company
will also reimburse the Depositary and the Information Agent for out-of-pocket
expenses and indemnify them against certain liabilities and expenses in
connection with the Offer, including certain liabilities and expenses under the
Federal Securities laws. Neither the Depositary nor the Information Agent has
not been retained to make solicitations or recommendations in connection with
the Offer.
The Company will not pay fees or commissions to any broker, dealer,
commercial bank, trust company or other person for soliciting any Trust
Securities pursuant to the Offer. The Company will, however, reimburse such
persons for customary handling and mailing expenses incurred in forwarding
materials in respect of the Offer to the beneficial owners for which they act as
nominees. No such broker, dealer, commercial bank or trust company has been
authorized to act as the Company's agent for purposes of this Offer. The Company
will pay (or cause to be paid) any stock transfer taxes on its purchase of Trust
Securities, except as otherwise provided in Instruction 7 of the Letter of
Transmittal.
17. Additional Information.
The Trust is exempt from reporting obligations under Sections 13 and 15(d)
of the Exchange Act, however, the Company is subject to the informational filing
requirements of the Exchange Act and, in accordance therewith, is obligated to
file reports and other information with the Commission relating to its business,
financial condition and other matters. Information, as of particular dates,
concerning the Company's directors and officers, their remuneration, options
granted to them, the principal holders of the Company's securities and any
material interest of such persons in transactions with the Company is required
to be disclosed in proxy statements distributed to the Company's shareholders
and filed with the Commission. Such reports, proxy statements and other
information can be inspected and copied at the public reference facilities
maintained by the Commission at 450 Fifth Street, N.W., Room 2120, Washington,
D.C. 20549; at its regional offices located at 500 West Madison Street, Suite
1400, Chicago, Illinois 60661-2511; and 7 World Trade Center, New York, New York
10048. Copies of such material may also be obtained by mail, upon payment of the
Commission's customary changes from the Public Reference Section of the
Commission at Judiciary Plaza, 450 Fifth Street N.W., Washington DC 20549. The
Commission maintains an internet web site at http://www.sec.gov containing
reports, proxy statements and other information regarding companies that file
reports electronically with the Commission.
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<PAGE>
18. Miscellaneous.
The Offer is not being made to, nor will the Company accept tenders from,
holders of Trust Securities in any jurisdiction in which the Offer or its
acceptance would not comply with the securities or blue sky laws of such
jurisdiction.
The Company is not aware of any jurisdiction in which the making of the
Offer or the tender of Trust Securities would not be in compliance with the laws
of such jurisdiction. However, the Company reserves the right to exclude holders
in any jurisdiction in which it is asserted that the Offer cannot lawfully be
made. So long as the Company makes a good faith effort to comply with any state
law deemed applicable to the Offer, if it cannot do so, the Company believes
that the exclusion of holders residing in such jurisdiction is permitted under
Rule 13e-4(f)(9) promulgated under the Exchange Act. In any jurisdiction the
securities or blue sky laws of which require the Offer to be made by a licensed
broker or dealer, the Offer shall be deemed to be made on the Company's behalf
by one or more registered brokers or dealers licensed under the laws of such
jurisdiction.
U.S. Home & Garden Inc.
December 15, 1999
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<PAGE>
Appendix A
Certain Transactions In Trust Securities
During the 40 business days prior to December 14, 1999, the following
purchases were made in Trust Securities by certain executive officers and
directors of the Company who are also Administrative Trustees of the Trust:
PURCHASE
PRICE
PER
TRUST
DATE SHARES SECURITY
Robert Kassel 10/20/99 8,900 $13.625
Richard Raleigh 10/29/99 800 15.00
11/8/99 1,000 15.125
11/8/99 200 15.00
11/9/99 1,900 14.75
11/9/99 900 15.125
11/10/99 100 14.875
11/15/99 100 14.75
11/15/99 2,000 14.875
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<PAGE>
Facsimile copies of the Letter of Transmittal, properly completed and duly
executed, will be accepted. The Letter of Transmittal, certificates for Trust
Securities and any other required documents should be sent or delivered by each
securityholder of the Trust or such securityholder's broker, dealer, commercial
bank, trust company or other nominee to the Depositary at its address set forth
below:
The Depositary for the Offer is:
CONTINENTAL STOCK TRANSFER TRUST COMPANY
By Mail, Overnight Courier or Hand:
2 Broadway
New York, New York 10004
Attention: Reorganization Department
By Facsimile Transmission
(for eligible institutions only):
(212) 616-7610
Confirm facsimile by telephone only:
(212) 509-4000 Ext. 535
Questions and requests for assistance or for additional copies of this
Offer to Purchase, the Letter of Transmittal may be directed to the Information
Agent at its address and telephone number set forth below. Securityholders may
also contact their broker, dealer, commercial bank, trust company or other
nominee for assistance concerning the Offer.
The Information Agent for the Offer is:
GEORGESON
SHAREHOLDER
COMMUNICATIONS INC.
17 State Street
10th Floor
New York, New York 10004
Bankers and Brokers Call Collect: (212) 440-9800
All Others Call Toll-Free: (800) 223-2064
-31-
LETTER OF TRANSMITTAL
To Tender 9.4% Cumulative Trust Preferred Securities
of
U.S. HOME & GARDEN TRUST I
Pursuant to the Offer to Purchase Dated December 15, 1999
by
U.S. HOME & GARDEN INC.
- --------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS
WILL EXPIRE AT 5:00 PM, NEW YORK CITY
TIME, ON FRIDAY, JANUARY 14, 2000,
UNLESS THE OFFER IS EXTENDED.
- --------------------------------------------------------------------------------
The Depositary for the Offer is:
CONTINENTAL STOCK TRANSFER & TRUST COMPANY
By Mail, Overnight Courier or Hand Delivery
2 Broadway
New York, New York 10004
Attention: Reorganization Department
By Facsimile Transmission
(for eligible institutions only):
(212) 616-7610
Confirm facsimile by telephone only:
(212) 509-4000 Ext. 535
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE, OR TRANSMISSIONS OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER THAN
AS SET FORTH ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
PLEASE REFER TO INSTRUCTION 10 OF THIS LETTER OF TRANSMITTAL FOR IMPORTANT
INFORMATION REGARDING BACKUP WITHHOLDING REQUIRED BY THE INTERNAL REVENUE
SERVICE AND THE SUBMISSION OF A SUBSTITUTE FORM W-9 TO THE DEPOSITARY.
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF TRUST SECURITIES TENDERED
- -------------------------------------------------------------------------------------------------------------------------
Name(s) and Address(es) of Total Number of
Registered Holder(s) Trust Security Trust Securities Total Number
(Please fill in, if blank, exactly Certificate Represented by of Trust
how name(s) appear on Trust Security Number(s) Trust Security Securities
Certificate(s) (if applicable)(1) Certificate(s)(1) Tendered(2)
- ------------------------------------------------------ -------------------------- ----------------------- ---------------
<S> <C> <C> <C>
- ------------------------------------------------------ -------------------------- ----------------------- ---------------
- ------------------------------------------------------ -------------------------- ----------------------- ---------------
- ------------------------------------------------------ -------------------------- ----------------------- ---------------
- ------------------------------------------------------ -------------------------- ----------------------- ---------------
- ------------------------------------------------------ -------------------------- ----------------------- ---------------
(1) Need not be completed by Securityholders delivering by book-entry transfer.
(2) Unless otherwise indicated, it will be assumed that all Trust Securities represented by certificates delivered to the
Depositary are being tendered. See Instruction 4.
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
PLEASE READ THE INSTRUCTIONS SET FORTH BELOW.
This Letter of Transmittal is to be completed by holders of 9.4% Cumulative
Trust Preferred Securities (the "Trust Securities") of U.S. Home & Garden Trust
I (the "Trust"), if certificates for Trust Securities are to be forwarded
herewith or if delivery of Trust Securities is to be made by book-entry transfer
into the account maintained by Continental Stock Transfer & Trust Company as
Depositary (the "Depositary"), at The Depository Trust Company (the "Book-Entry
Transfer Facility") pursuant to the procedures set forth in Section 3 of the
Offer to Purchase (as defined below).
Securityholders of the Trust whose certificates evidencing Trust Securities
(the "Certificates") are not immediately available or who cannot deliver their
Certificates and all other required documents to the Depositary prior to the
Expiration Date (as defined in Section 1 of the Offer to Purchase), or who
cannot complete the procedure for book-entry transfer on a timely basis, must
tender their Trust Securities according to the guaranteed delivery procedure set
forth in Section 3 of the Offer to Purchase. See Instruction 2. DELIVERY OF
DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO
THE DEPOSITARY.
|_| CHECK HERE IF TENDERED TRUST SECURITIES ARE BEING DELIVERED BY BOOK-ENTRY
TRANSFER TO THE DEPOSITARY'S ACCOUNT AT THE BOOK-ENTRY TRANSFER FACILITY
AND COMPLETE THE FOLLOWING:
Name of Tendering Institution: _________________________________________________
Account Number: ________________________________________________________________
Transaction Code Number: _______________________________________________________
|_| CHECK HERE IF TENDERED TRUST SECURITIES ARE BEING DELIVERED PURSUANT TO A
NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY, AND
COMPLETE THE FOLLOWING:
Name(s) of Registered Holder(s): _______________________________________________
Window Ticket Number (if any): _________________________________________________
Date of Execution of Notice of Guaranteed Delivery: ____________________________
Name of Institution which Guaranteed Delivery: _________________________________
<PAGE>
If delivery is by book-entry transfer: _________________________________________
Name of Tendering Institution: ________________________________________
Account Number: _______________________________________________________
Transaction Code Number: ______________________________________________
LADIES AND GENTLEMEN:
The undersigned hereby tenders to U.S. Home & Garden Inc., a Delaware
corporation ("the Company") the above-described 9.4% Cumulative Trust Preferred
Securities (the "Trust Securities") of U.S. Home & Garden Trust I, a Delaware
statutory business trust (the "Trust"), at a purchase price of $15.00 per Trust
Security, net to the seller in cash (the "Offer Price"), without interest
thereon, upon the terms and subject to the conditions set forth in the Offer to
Purchase, dated December 15, 1999 (the "Offer to Purchase") and in this Letter
of Transmittal (which together with the Offer to Purchase, constitutes the
"Offer"). The undersigned understands that the Company reserves the right to
transfer or assign, in whole at any time, or from time to time in part, to one
or more of its affiliates, the right to purchase all or any portion of the Trust
Securities tendered pursuant to the Offer.
Subject to, and effective upon, acceptance for payment of the Trust
Securities tendered herewith in accordance with the terms and subject to the
conditions of the Offer (including, if the Offer is extended, amended or
supplemented, the terms and conditions of any such extension, amendment or
supplement), the undersigned hereby sells, assigns and transfers to, or upon the
order of, the Company all right, title and interest of the undersigned in and to
all of the Trust Securities that are being tendered hereby and any and all
dividends, distributions , distributable to the undersigned on a date prior to
the transfer to the name of the Company (or nominee or transferee of the
Company) on the Trust's transfer records of the Trust Securities tendered
herewith (collectively, a "Distribution"), and irrevocably constitutes and
appoints the Depositary the true and lawful agent and attorney-in-fact of the
undersigned with respect to such Trust Securities (and any Distributions) with
full power of substitution (such power of attorney being deemed to be an
irrevocable power coupled with an interest) to (a) deliver certificates for such
Trust Securities (and any Distributions) ("Certificates") or transfer ownership
of such Trust Securities (and any Distributions) on the account books maintained
by the Book-Entry Transfer Facility, together in either case with appropriate
evidences of transfer and authenticity, to the Depositary for the account of the
Company, (b) present such Trust Securities (and any Distributions) for transfer
on the books of the Trust, and (c) receive all benefits and otherwise exercise
all rights of beneficial ownership of such Trust Securities (and any
Distributions), all in accordance with the terms and subject to the conditions
of the Offer.
The undersigned hereby irrevocably appoints the Company or any other
designees of the Company, and each of them, as such securityholder's
attorneys-in-fact and proxies, each with full power of substitution, to the full
extent of such securityholder's rights with respect to the Trust Securities
tendered by such securityholder and accepted for payment by the Company and with
respect to any and all other Trust Securities or other securities issued or
issuable in respect of such Trust Securities on or after December 15, 1999. Such
appointment will be effective upon the acceptance for payment of such Trust
Securities by the Company in accordance with the terms of the Offer. Upon such
acceptance for payment, all prior powers of attorney and proxies given by such
securityholder with respect to such Trust Securities (and such other Trust
securities and securities) will be revoked without further action, and no
subsequent proxies may be given nor any subsequent written consents executed
(and, if given or executed, will not be deemed effective).
The undersigned hereby represents and warrants that (a) the undersigned has
full power and authority to tender, sell, assign and transfer the Trust
Securities (and any Distributions) tendered hereby, and (b) when the Trust
Securities are accepted for payment by the Company, the Company will acquire
good, marketable and unencumbered title to the Trust Securities (and all
Distributions), free and clear of all liens, restrictions, charges and
encumbrances, and the same will not be subject to any adverse claim. The
undersigned, upon request, will execute and deliver any signature guarantee or
additional documents deemed by the Depositary or the Company to be necessary or
desirable to complete the sale, assignment and transfer of the Trust Securities
(and all Distributions) tendered hereby. In addition, the undersigned shall
promptly remit and transfer to the Depositary for the account of the Company any
and all Distributions in respect of the Trust Securities tendered hereby,
accompanied by appropriate documentation of transfer, and pending such
remittance or appropriate assurance thereof, the Company will be, subject to
applicable law, entitled to all rights and privileges as owner of any such
Distribution and may withhold the entire purchase price or deduct from the
purchase price the amount or value thereof, as determined by the Company in its
sole discretion.
All authority herein conferred or agreed to be conferred shall survive the
death, incapacity, liquidation or dissolution of the undersigned and any
obligations of the undersigned hereunder shall be binding upon the heirs,
executors, administrators, trustees in bankruptcy, personal and legal
representatives, successors and assigns of the undersigned. Except as stated in
the Offer to Purchase this tender of Trust Securities is irrevocable.
The undersigned understands that tenders of Trust Securities pursuant to
any of the procedures described in Section 2 of the Offer to Purchase and in the
instructions hereto will constitute a binding agreement between the undersigned
and the
<PAGE>
Company upon the terms and subject to the conditions set forth in the Offer,
including the undersigned's representation and warranty that the undersigned
owns the Trust Securities tendered hereby.
Unless otherwise indicated herein under "Special Payment Instructions,"
please issue the check for the Offer Price of all Trust Securities purchased,
and/or return any Certificates not tendered or not accepted for payment in the
name(s) of the registered holder(s) appearing under "Description of Trust
Securities Tendered." Similarly, unless otherwise indicated herein under
"Special Delivery Instructions," please mail the check for the Offer Price
and/or return any Certificates not tendered or not accepted for payment (and
accompanying documents, as appropriate) to the address(es) of the registered
holder(s) appearing under "Description of Trust Securities Tendered." In the
event that both the "Special Delivery Instructions" and the "Special Payment
Instructions" are completed, please issue the check for the Offer Price of any
Trust Securities purchased and/or return any Certificates not tendered or
accepted for payment and any accompanying documents, as appropriate in the name
(s) of, and deliver such check and/or return any such Certificates (and any,"
accompanying documents) to, the person(s) so indicated. Unless otherwise
indicated herein under "Special Payment Instructions," please credit any Trust
Securities tendered herewith by book-entry transfer that are not accepted for
payment by crediting the account designated above. The undersigned recognizes
that the Company has no obligation, pursuant to the "Special Payment
Instructions," to transfer any Trust Securities from the name(s) of the
registered holder(s) thereof if the Company does not accept for payment any of
the Trust Securities so tendered.
|_| CHECK HERE IF ANY OF THE CERTIFICATES REPRESENTING THE TRUST SECURITIES
THAT YOU OWN HAVE BEEN LOST, DESTROYED OR STOLEN AND SEE INSTRUCTION 11.
Number of Trust Securities represented by lost, destroyed or stolen
certificates:_________________________________________________________________
- --------------------------------------------------------------------------------
SPECIAL PAYMENT INSTRUCTIONS
(See Instructions 1, 5, 6 and 7)
To be completed ONLY if the check for the purchase price of Trust Securities
accepted for payment is to be issued in the name of a person other than the
undersigned or if certificates for Trust Securities not tendered or not accepted
for payment are to be issued in the name of a person other than the undersigned
or if Trust Securities tendered hereby and delivered by book-entry transfer
which are not accepted for payment are to be returned by credit to an account
maintained at the Book-Entry Transfer Facility other than the account shown
above.
Issue |_| Check |_| Certificates to:
Name: __________________________________________________________________________
(Please Print)
Address: _____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
(Include Zip Code)
_____________________________________________________________________
(Taxpayer Identification or
Social Security No.)
(See Substitute Form W-9 on Back Cover)
Credit Trust Securities tendered by book-entry transfer that are not accepted
for payment to:
________________________________________________________________________________
(Account Number
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 1, 5, 6 and 7)
To be completed ONLY if certificate(s) for Trust Securities not tendered or not
accepted for payment and/or the check for the purchase price of Trust Securities
accepted for payment is to be sent to someone other than the undersigned or to
the undersigned at an address other than that shown above.
Mail |_| Check |_| Certificates to:
Name: __________________________________________________________________________
(Please Print)
Address: _____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
(Include Zip Code)
_____________________________________________________________________
(Taxpayer Identification or
Social Security No.)
(See Substitute Form W-9 on Back Cover)
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
ODD LOTS
To be completed ONLY if Trust Securities are being tendered by or on behalf of a
person owning beneficially, as of the Expiration Date, an aggregate of less than
100 Trust Securities.
The undersigned either (check one box):
[__] is the beneficial owner of an aggregate of less than 100 Trust Securities
all of which are being tendered; or
[__] is a broker, dealer, commercial bank, trust company or other nominee which:
(a) is tendering, for the beneficial owners thereof, Trust Securities with
respect to which it is the record owner, and
(b) believes, based upon representations made to it by such beneficial owners,
that each such person was the beneficial owner of an aggregate of less than 100
Trust Securities and is tendering all of such Trust Securities.
- --------------------------------------------------------------------------------
<PAGE>
IMPORTANT.
SECURITYHOLDERS SIGN HERE
(Also complete Substitute Form W-9)
x ______________________________________________________________________________
x ______________________________________________________________________________
(Signature(s) of Holder(s) or Authorized Signatory)
Date: __________________________________________________________________________
(Must be signed by the registered holder(s) exactly as name(s) appear(s) on
Trust Security Certificate(s) or on a security position listing or by person(s)
authorized to become registered holders(s) by certificates and documents
transmitted herewith. If signature is by trustees, executors, administrators,
guardians, attorneys-in-fact, officers of corporations or others acting in a
fiduciary or representative capacity, please provide the following information
and see Instruction 5.)
Name (s) _______________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please Print)
Capacity (Full Title): _________________________________________________________
Address: _______________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Include Zip Code)
Daytime Telephone Number. ( ) _______________________________________________
(Area Code)
Tax Identification or Social Security No: ______________________________________
(See Substitute Form W-9 on Reverse Side)
GUARANTEE OF SIGNATURE(s)
(if Required - See Instructions I and 5)
(Authorized Signature): ________________________________________________________
Name: __________________________________________________________________________
Name of Firm: __________________________________________________________________
Address: _______________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Include Zip Code)
Daytime Telephone Number: ( ) _______________________________________________
(Area Code)
Dated: _________________________________________________________________________
INSTRUCTIONS
Forming Part of the, Terms and Conditions of the Offer
1. Guarantee of Signatures. No signature guarantee is required on this
Letter of Transmittal (a) if this Letter of Transmittal is signed by the
registered holder(s) of Trust Securities (which term, for purposes of this
document, shall include any participant in the Book-Entry Transfer Facility
whose name appears on a security position listing as the owner of Trust
Securities) tendered herewith, unless such holder(s) has completed either the
box entitled "Special Payment Instructions" or the box entitled "Special
Delivery Instructions" above, or (b) if such Trust Securities are tendered for
the account of a firm which is a bank, broker, dealer, credit union, savings
association or other entity which is a member in good standing of the Securities
Transfer Association Medallion Program, the New York Stock Exchange, Inc.,
Medallion Signature Program or the Stock
<PAGE>
Exchange Medallion Program (each of the foregoing being referred to as an
"Eligible Institution"). In all other cases, all signatures on this Letter of
Transmittal must be guaranteed by an Eligible Institution. See Instruction 5 of
this Letter of Transmittal.
2. Requirements of Tender. This Letter of Transmittal is to be completed by
securityholders either if certificates are to be forwarded herewith or, unless
an Agent's Message is utilized, if tenders are to be made pursuant to the
procedure for tender by book-entry transfer set forth in Section 3 of the Offer
to Purchase. Certificates for all physically tendered Trust Securities or timely
confirmation (a "Book-Entry Confirmation") of a book-entry transfer of such
Trust Securities into the Depositary's account at the Book-Entry Transfer
Facility, together with a properly completed and duly executed Letter of
Transmittal (or a facsimile hereof), with any required signature guarantees, or
an Agent's Message in connection with a book-entry transfer, and any other
documents required by this Letter of Transmittal, must be received by the
Depositary at its address set forth herein on or prior to the Expiration Date
(as defined in Section 1 of the Offer to Purchase). If certificates for Trust
Securities are forwarded to the Depositary in multiple deliveries, a properly
completed and duly executed Letter of Transmittal must accompany each such
delivery.
Securityholders whose Certificates are not immediately available or who
cannot deliver their Certificates and all other required documents to the
Depositary prior to the Expiration Date or who cannot complete the procedure for
delivery by book-entry transfer on a timely basis may tender their Trust
Securities by properly completing and duly executing a Notice of Guaranteed
Delivery pursuant to the guaranteed delivery procedure set forth in Section 2 of
the Offer to Purchase. Pursuant to such procedure: (i) such tender must be made
by or through an Eligible Institution; (ii) a properly completed and duly
executed Notice of Guaranteed Delivery, substantially in the form made available
by the Company, must be received by the Depositary on or prior to the Expiration
Date; and (iii) the Certificates (or a Book-Entry Confirmation) representing all
tendered Trust Securities, in proper form for transfer, in each case together
with the Letter of Transmittal (or a facsimile thereof), properly completed and
duly executed with any required signature guarantees (or, in the case of a
book-entry transfer, an Agent's Message) and any other documents required by
this Letter of Transmittal, must be received by the Depository within three
American Stock Exchange trading days after the date of such Notice of Guaranteed
Delivery. An "American Stock Exchange trading day" is any day which the American
Stock Exchange is open for business. If Trust Securities Certificates are
delivered separately to the Depository a properly completed and executed Letter
of Transmittal must accompany such delivery.
Tendering securityholders should use this Letter of Transmittal (and, if
necessary, the Notice of Guaranteed Delivery provided with the Offer to
Purchase). Securityholders will be able to tender (or withdraw) their Trust
Securities pursuant to the Offer until 5:00 PM, New York City time, Friday,
January 14, 2000 (or such later date to which the Offer may be extended).
Trust Securities can only be tendered at the price of $15.00 per Trust
Security.
THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, CERTIFICATES AND ALL
OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER
FACILITY, IS AT THE OPTION AND RISK OF THE TENDERING SECURITYHOLDER AND DELIVERY
WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF DELIVERY
IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS
RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY
DELIVERY.
No alternative, conditional or contingent tenders will be accepted and no
fractional Trust Securities will be purchased. All tendering securityholders, by
execution of this Letter of Transmittal (or a facsimile hereof), waive any fight
to receive any notice of the acceptance of their Trust Securities for payment.
3. Inadequate Space and the Number of Trust Securities Tendered. If the
space provided herein under "Description of Trust Securities Tendered" is
inadequate, the certificate numbers and/or the number of Trust Securities
evidenced by such Certificates and any other required information should be
listed on a separate signed schedule attached hereto.
4. Partial Tender. (Not applicable to securityholders who tender by
book-entry transfer). If fewer than all the Trust Securities evidenced by any
Trust Security Certificate delivered to the Depositary herewith are to be
tendered, fill in the number of Trust Securities which are to be tendered in the
box entitled "Number of Trust Securities Tendered." In such cases, new
certificates for the Trust Securities that were evidenced by your old
Certificates, but which were not tendered by you, will be sent to you, unless
otherwise provided in the appropriate box on this Letter of Transmittal entitled
"Special Delivery Instructions", as soon as practicable after the Expiration
Date. All Trust Securities represented by certificates delivered to the
Depositary will be deemed to have been tendered unless otherwise indicated.
5. Signatures on Letter of Transmittal; Stock Powers and Endorsements. If
this Letter of Transmittal is signed by the registered holder(s) of the Trust
Securities tendered hereby, the signature (s) must correspond with the name (s)
as written on the face of the certificate (s) evidencing such Trust Securities
without alteration, enlargement or any change whatsoever.
If any Trust Securities tendered hereby are owned of record by two or more
joint owners, all such owners must sign this Letter of Transmittal.
If any of the tendered Trust Securities are registered in different names
on several certificates, it will be necessary to complete, sign and submit as
many separate Letters of Transmittal as there are different registrations of
certificates.
<PAGE>
If this Letter of Transmittal or any certificates or stock powers are
signed by trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity, such persons should so indicate when signing, and proper evidence
satisfactory to the Company of their authority to so act must be submitted.
When this Letter of Transmittal is signed by the registered owner(s) of the
Trust Securities listed and transmitted hereby, no endorsements of certificates
or separate stock powers are required unless payment is to be made to, or
certificates for Trust Securities not tendered or not purchased are to be issued
in the name of, a person other than the registered holder(s). Signatures on such
certificates or stock powers must be guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered owner(s) of the Trust Security Certificate(s) listed, the Trust
Security Certificate(s) must be endorsed or accompanied by appropriate stock
powers, in either case signed exactly as the name(s) of the registered holder(s)
appear on the certificate(s). Signatures on such Certificates and stock powers
must be guaranteed by an Eligible Institution, unless the signature is that of
an Eligible Institution.
6. Transfer Taxes. Except as otherwise provided in this Instruction 6, the
Company will pay any transfer taxes with respect to the purchase of Trust
Securities pursuant to the Offer. If, however, payment of the Offer Price of any
Trust Securities purchased is to be made to, or if certificate(s) evidencing
Trust Securities not tendered or purchased are to be registered in the name of,
any person other than the registered owner(s), or if tendered Certificate(s) are
registered in the name of any person other than the person(s) signing this
Letter of Transmittal, the amount of any transfer taxes (whether imposed on the
registered owner(s) or such person) payable on account of the transfer to such
person will be deducted from the purchase price of such Trust Securities unless
satisfactory evidence of the payment of such taxes, or an exemption therefrom,
is submitted.
7. Odd Lots. As described in Section 1 of the Offer to Purchase, if the
Company is to purchase less than all Trust Securities tendered before the
Expiration Date, the Trust Securities purchased first will consist of all Trust
Securities validly tendered on or prior to the Expiration Date by or on behalf
of securityholders who beneficially owned and continue to beneficially own as of
the Expiration Date, an aggregate of less than 100 Trust Securities, and who
tenders all of such securityholder's Trust Securities. This preference will not
be available unless the box captioned "Odd Lots" is completed.
8. Special Payment and Delivery Instructions. If a check for the Offer
Price of any Trust Securities tendered hereby is to be issued in the name of,
and/or Certificates for Trust Securities not tendered or not purchased are to be
issued or returned to, a person other than the signer of this Letter of
Transmittal or if a check and/or such certificates are to be returned to a
person other than the person(s) signing this Letter of Transmittal or to an
address other than that shown in this Letter of Transmittal in the box entitled
"Description of Trust Securities Tendered", the appropriate boxes on this Letter
of Transmittal must be completed. A securityholder who tenders by book-entry
transfer may request that Trust Securities not accepted for payment be credited
to such account maintained at the Book-Entry Transfer Facility as such
securityholder may designate under "Special Payment Instructions." If no such
instructions are given, such Trust Securities not accepted for payment will be
returned by crediting the account designated above under "Description of Trust
Securities Tendered."
9. Waiver of Conditions. The conditions of the Offer may be waived by the
Company in whole or in part at any time and from time to time in its sole
discretion.
10. Backup Withholding; Substitute Form W-9. Under U.S. federal income tax
law, a securityholder, whose tendered Trust Securities are accepted for payment,
is required to provide the Depositary with such Securityholder's correct
taxpayer identification number ("TIN"), generally the Securityholder's social
security or federal employer identification number, and certain other
information, on Substitute Form W-9 below. If the Depositary is not provided
with the correct TIN, or an adequate basis for exemption, the Internal Revenue
Service may subject the Securityholder or other payee to a $50 penalty. In
addition, payments that are made to such Securityholder or other payee with
respect to Trust Securities purchased pursuant to the Offer may be subject to
31% backup withholding.
Certain securityholders (including, among others, all corporations and
certain foreign individuals) are not subject to these backup withholding and
reporting requirements. In order for a foreign individual to qualify as an
exempt recipient, the securityholder must submit a Form W-8, signed under
penalties of perjury, attesting to that individual's exempt status. A Form W-8
can be obtained from the Depositary. See the enclosed "Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9" for more
instructions.
If backup withholding applies, the Depositary is required to withhold 31%
of any such payments made to the securityholder or other payee. Backup
withholding is not an additional tax. Rather, the tax liability of persons
subject to backup withholding will be reduced by the amount of tax withheld. If
withholding results in an overpayment of taxes, a refund may be obtained from
the Internal Revenue Service.
The box in Part 3 of the Substitute Form W-9 may be checked if the
tendering Securityholder has not been issued a TIN and has applied for a TIN or
intends to apply for a TIN in the near future. If the box in Part 3 is checked,
the Securityholder or other payee must also complete the Certificate of Awaiting
Taxpayer Identification Number below in order to avoid backup withholding.
Notwithstanding that the box in Part 3 is checked and the Certificate of
Awaiting Taxpayer Identification Number is completed, the Depositary will
withhold 31% of all payments made prior to the time a properly certified TIN is
provided to the Depositary.
<PAGE>
To prevent backup withholding on payments that are made to a securityholder
with respect to Trust Securities purchased pursuant to the Offer, the
securityholder is required to notify the Depositary of such securityholder's
correct TIN by completing a Substitute Form W-9 certifying (a) that the TIN
provided on Substitute Form W-9 is correct (or that such securityholder is
awaiting a TIN), and (b) that (1) such securityholder is exempt from backup
withholding or (2) such securityholder has not been notified by the Internal
Revenue Service that such securityholder is subject to backup withholding as a
result of a failure to report all interest or dividends or (3) the Internal
Revenue Service has notified such securityholder that such securityholder is no
longer subject to backup withholding. Exempt holders (including, among others,
all corporations and certain foreign individuals) are not subject to these
backup withholding and reporting requirements. To prevent possible erroneous
backup withholding, an exempt holder must enter its correct TIN in Part I of
Substitute Form W-9, write "Exempt" in Part 2 of such form, and sign and date
the form. See the enclosed Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 (the "W-9 Guidelines") for
additional instructions. In order for a nonresident alien or foreign entity to
qualify as exempt, such person must submit a completed Form W-8, "Certificate of
Foreign Status" signed under the penalties of perjury attesting to such exempt
status. Such forms may be obtained from the Depositary.
The securityholder is required to give the Depositary the TIN (e.g., social
security number or employer identification number) of the record owner of the
Trust Securities or of the last transferee appearing on the transfers attached
to, or endorsed on, the Trust Securities. If the Trust Securities are in more
than one name or are not in the name of the actual owner, consult the enclosed
"Guidelines for Certification of Taxpayer Identification Number on Substitute
Form W-9" for additional guidance on which number to report.
11. Requests for Assistance or Additional Copies. Questions or requests for
assistance may be directed to the Information Agent at the address and telephone
numbers set forth below. Additional copies of the Offer to Purchase, this Letter
or Transmittal and the Notice or Guaranteed Delivery may also be obtained from
the Information Agent or from brokers, dealers, commercial banks or trust
companies.
12. Lost, Destroyed or Stolen Certificates. If any certificate representing
Trust Securities has been lost, destroyed or stolen, the securityholder should
promptly notify the Depositary by checking the box immediately preceding special
payment/special delivery instructions and indicating the number of Trust
Securities lost. The securityholder will then be instructed as to the steps that
must be taken in order to replace the certificate. This Letter of Transmittal
and related documents cannot be processed until the procedures for replacing
lost or destroyed certificates have been followed.
13. Order of Purchase in Event of Proration. As described in Section 1 of
the Offer to Purchase, securityholders may designate the order in which their
Trust Securities are to be purchased in the event of proration. The order of
purchase may have an effect on the federal income tax classification of any gain
or loss on the Trust Securities purchased. See Section 1 of the Offer to
Purchase.
IMPORTANT. THIS LETTER OF TRANSMITTAL (OR A FACSIMILE HEREOF), TOGETHER
WITH CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY TRANSFER OR THE NOTICE OF
GUARANTEED DELIVERY, AND ALL OTHER REQUIRED DOCUMENTS, MUST BE RECEIVED BY THE
DEPOSITARY ON OR PRIOR TO THE EXPIRATION DATE (AS DEFINED IN THE OFFER TO
PURCHASE).
<PAGE>
<TABLE>
<CAPTION>
TO BE COMPLETED BY ALL TENDERING SECURITYHOLDERS
(See Instruction 10)
- ---------------------------------------------------------------------------------------------------------------------------
PAYER'S NAME: Continental Stock Transfer & Trust Company, as Depositary
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
SUBSTITUTE Part 1 - PLEASE PROVIDE YOUR TIN IN THE _____________________________
BOX AT RIGHT AND CERTIFY BY SIGNING AND Social Security Number
DATING BELOW. Or
Form W-9
_____________________________
Employee Identification
Number
- ---------------------------------------- ------------------------------------------- --------------------------------------
Department of the Treasury Part 2 - Certification - Under penalties Part 3 -
Internal Revenue Service of perjury, I certify that:
Awaiting TIN
|_|
(1) The number shown on this form is
my correct TIN (or I am waiting for a
number to be issued to me) and
Depositary Request for Taxpayer (2) I am not subject to backup
Identification Number ("TIN") withholding because (a) I am exempt from
backup withholding, or (b) I have not
been notified by the Internal Revenue
Service ("IRS") that I am subject to
backup withholding as a result of a
failure to report all interest or
dividends, or (c) the IRS has notified me
that I am no longer subject to backup
withholding.
- ---------------------------------------------------------------------------------------------------------------------------
Certification Instructions - You must cross out item (2) above if you have been notified by the IRS that you are currently
subject to backup withholding because of under-reporting interest or dividends on your tax return. However, if after being
notified by the IRS that you were subject to backup withholding you received another notification from the IRS that you are
no longer subject to backup withholding, do not cross out such Item (2).
SIGNATURE: ______________________________________________ DATE: __________________________________
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER.
PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 3 OF SUBSTITUTE FORM W-9.
- ----------------------------------------------------------------------------------------------------------------------
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
- ----------------------------------------------------------------------------------------------------------------------
I certify under penalties of perjury that a taxpayer identification number has not been issued to me, and either (1) I
have mailed or delivered an application to receive a taxpayer identification number to the appropriate Internal Revenue
Service Center or Social Security Administration Office, or (2) I intend to mail or deliver an application in the near
future. I understand that if I do not provide a taxpayer identification number by the time of payment, 31% of all reportable
payments made to me will be withheld but that such amounts will be refunded to me if I then provide a taxpayer
identification number within sixty (60) days.
SIGNATURE: ______________________________________________ DATE: __________________________________
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
The Information Agent for the Offer is:
GEORGESON
SHAREHOLDER
COMMUNICATIONS INC.
17 State Street
10th Floor
New York, New York 10004
Bankers and Brokers Call Collect: (212) 440-9800
All Others Call Toll-Free: (800) 223-2064
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
Guidelines for Determining the Proper Identification Number to Give the Payer. -
Social Security numbers have nine digits separated by two hyphens: i.e.
000-00-0000. Employer identification numbers have nine digits separated by only
one hyphen: i.e. 00-0000000. The table below will help determine the number to
give the payer.
<TABLE>
<CAPTION>
- ------------------------------- ----------------------------- ------------------------------- ---------------------------
Give the Give the EMPLOYER
For this type of account: SOCIAL SECURITY For this type of account: IDENTIFICATION
number of number of
- ------------------------------- ----------------------------- ------------------------------- ---------------------------
<S> <C> <C> <C>
1. An individual's account The individual 9. A valid trust, estate or The legal entity (do not
pension trust furnish the identifying
number of the personal
representative or trustee
unless the legal entity
itself is not designated
in the account title(5)
2. Two or more individuals The actual owner of the 10. Corporate account The corporation
(joint account) account, or, if combined
funds, any one of the
individuals
3. Husband and wife (joint The actual owner of the 11. Religious, charitable or The organization
account) account, or, if joint educational organization
funds, either person (1) account
4. Custodian account of a The minor(2) 12. Partnership account held The partnership
minor (Uniform Gift to in the name of the
Minors Act) business
5. Adult and minor (joint The adult or, if the minor 13. Association, club, or The organization
account) is the only contributor, other tax-exempt
the minor(1) organization
6. Account in the name of The ward, minor or 14. A broker or registered The broker or nominee
guardian or committee incompetent person(3) nominee
for a designated ward,
minor or incompetent
person
7 a. The usual revocable The grantor-trustee(1) 15. Account with the The public entity
savings trust account Department of
(grantor is also trustee) Agriculture in the name
of a public entity (such
as a State or local
government, school
district, or prison)
that receives
agricultural program
payments
b. So-called trustee The actual owner(1)
account that is not a
legal or valid trust
under State law
8 Sole proprietorship The owner(4)
account
- ------------------------------- ----------------------------- ------------------------------- ---------------------------
</TABLE>
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
(4) Show the name of the owner.
(5) List first and circle the name of the legal trust, estate or pension trust.
Note: If no name is circled when there is more than one name, the number will be
considered to be that of the first name listed.
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
Page 2
Obtaining a Number
If you don't have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Number Card, or Form
SS-4, Application for Employer Identification Number, at the local office of the
Social Security Administration or the Internal Revenue Service and apply for a
number.
Payees Exempt from Backup Withholding
Payees specifically exempted from backup withholding on ALL payments include the
following:
o A corporation.
o A financial institution.
o An organization exempt from tax under section 501 (a), or an individual
retirement plan.
o The United States or any agency or instrumentality thereof.
o A State, the District of Columbia, a possession of the United States, or
any subdivision or instrumentality thereof.
o A foreign government, a political subdivision of a foreign government, or
any agency or instrumentality thereof.
o An international organization or any agency, or instrumentality thereof.
o A registered dealer in securities or commodities registered in the U.S. or
a possession of the U.S.
o A real estate investment trust.
o A common trust fund operated by a bank under section 584(a).
o An exempt charitable remainder trust, or a non-exempt trust described in
Section 4947(a)(1).
o An entity registered at all times under the Investment Company Act of 1940.
o A foreign central bank of issue. Payments of dividends and patronage
dividends not generally subject to backup withholding include the
following:
o Payments to nonresident aliens subject to withholding under Section 1441.
o Payments to partnerships not engaged in a trade or business in the U.S. and
which have at least one nonresident partner.
o Payments of patronage dividends where the amount received is not paid in
money.
o Payments made by certain foreign organizations.
o Payments made to a nominee. Payments of interest not generally subject to
backup withholding include the following:
o Payments of interest on obligations issued by individuals. NOTE: You may be
subject to backup withholding if this interest is $600 or more, and is paid
in the course of the payer's trade or business and you have not provided
your correct taxpayer identification number to the payer.
o Payments of tax-exempt interest (including exempt-interest dividends under
Section 852).
o Payments described in Section 6049 (b) (5) to non-resident aliens.
o Payments on tax-free covenant bonds under Section 1451. Payments made by
certain foreign organizations.
o Payments made to a nominee.
EXEMPT PAYEES DESCRIBED ABOVE SHOULD FILE FORM W-9 TO AVOID POSSIBLE ERRONEOUS
BACKUP WITHHOLDING. FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER
IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, AND RETURN IT TO
THE PAYER. IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE DIVIDENDS, ALSO
SIGN AND DATE THE FORM.
Certain payments other than interest, dividends, and patronage dividends,
that are not subject to information reporting are also not subject to backup
withholding. For details, see the regulations under Sections 6041, 6041A(a),
6045, and 6050A.
Privacy Act Notice.-- Section 6109 requires most recipients of dividends,
interest, or other payments to give taxpayer identification numbers to payers
who must report the payments to IRS. The IRS uses the numbers for identification
purposes. Payers must be given the numbers whether or not recipients are
required to file tax returns. Beginning January 1, 1993, payers must generally
withhold 31% of taxable interest, dividends, and certain other payments to a
payee who does not furnish a taxpayer identification number to a payer. Certain
penalties may also apply.
Penalties
(1) Penalty for Failure to Furnish Taxpayer Identification Number. - If you fail
to furnish your correct taxpayer identification number to a payer, you are
subject to a penalty of $50 for each such failure unless your failure is due to
reasonable cause and not to willful neglect.
(2) Failure to Report Certain Dividend and Interest Payments. - If you fail to
include any portion of an includable payment for interest, dividends, or
patronage dividends in gross income, such failure will be treated as being due
to negligence and will be subject to a penalty of 5% on any portion of an
underpayment attributable to that failure unless there is clear and convincing
evidence to the contrary.
(3) Civil Penalty for False Statements with Respect to Withholding. - If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.
(4) Criminal Penalty for Falsifying Information. - If you falsify certifications
or affirmations, you are subject to criminal penalties including fines and/or
imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE
SERVICE.
NOTICE OF GUARANTEED DELIVERY
FOR TENDER OF 9.4% CUMULATIVE TRUST PREFERRED SECURITIES
U.S. HOME & GARDEN TRUST I
(NOT TO BE USED FOR SIGNATURE GUARANTEES)
This Notice of Guaranteed Delivery, or a form substantially equivalent
hereto, must be used to accept the Offer (as defined below) (i) if certificates
("Certificates") evidencing 9.4% Cumulative Trust Preferred Securities (the
"Trust Securities"), of U.S. Home & Garden Trust I are not immediately
available, (ii) if Certificates and all other required documents cannot be
delivered to Continental Stock Transfer & Trust Company as Depositary (the
"Depositary") on or prior to the Expiration Date (as defined in Section 1 of the
Offer to Purchase (as defined below)) or (iii) if the procedure for delivery by
book-entry transfer cannot be completed on a timely basis. This Notice of
Guaranteed Delivery may be delivered by hand (including delivery by courier
service) or mail or transmitted by facsimile transmission, telex or telegram to
the Depositary. See Section 3 of the Offer to Purchase.
The Depositary for the Offer is:
CONTINENTAL STOCK TRANSFER & TRUST COMPANY
By Mail, Overnight Courier or Hand Delivery:
2 Broadway, 19th Floor
New York, New York 10004
Attention: Reorganization Department
By Facsimile Transmission
(for eligible institutions only):
(212) 616-7610
To Confirm facsimile by telephone only:
(212) 509-4000 Ext. 535
Delivery of this Notice of Guaranteed Delivery to an address other than as
set forth above, or transmission of instructions via facsimile transmission,
telex or telegram other than as set forth above, will not constitute a valid
delivery.
This Notice of Guaranteed Delivery is not to be used to guarantee
signatures. If a signature on a Letter of Transmittal is required to be
guaranteed by an "Eligible Institution" under the instructions thereto, such
signature guarantee must appear in the applicable space provided in the
signature box on the Letter of Transmittal.
The Eligible Institution that completes this Notice of Guaranteed Delivery
must communicate the Guarantee to the Depositary and must deliver the Letter of
Transmittal and Certificates to the Depositary within the time period shown
herein. Failure to do so could result in financial loss to the Eligible
Institution.
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to U.S. Home & Garden Inc., a Delaware
corporation, upon the terms and subject to the conditions set forth in the Offer
to Purchase, dated December 15, 1999 (the "Offer to Purchase"), and the related
Letter of Transmittal (which, together with any amendments or supplements
thereto from time to time, constitute the "Offer"), receipt of each of which is
hereby acknowledged, the number of Shares specified below pursuant to the
guaranteed delivery procedures described in Section 3 of the Offer to Purchase.
Number of Trust Securities: ____________________________________________________
Certificate Nos. (If Available): _______________________________________________
|_| Check if Trust Securities will be delivered by book-entry transfer
Name of Tendering Institution: _______________________________
Account No.: _________________________________________________
Dated: _______________, ____ Signature(s) of Holder(s):
__________________________________________
__________________________________________
Name(s) of Holders:
__________________________________________
__________________________________________
Please Type or Print Address: __________________________________________________
Zip Code
Area Code and Telephone No.: ___________________________________________________
- --------------------------------------------------------------------------------
ODD LOTS
To be completed ONLY if Trust Securities are being tendered by or on behalf of a
person owning beneficially, as of the Expiration Date, an aggregate of less than
100 Trust Securities.
The undersigned either (check one box):
[__] is the beneficial owner of an aggregate of less than 100 Trust Securities
all of which are being tendered; or
[__] is a broker, dealer, commercial bank, trust company or other nominee which:
- --------------------------------------------------------------------------------
2
<PAGE>
- --------------------------------------------------------------------------------
(a) is tendering, for the beneficial owners thereof, Trust Securities with
respect to which it is the record owner, and
(b) believes, based upon representations made to it by such beneficial owners,
that each such person was the beneficial owner of an aggregate of less than 100
Trust Securities and is tendering all of such Trust Securities.
- --------------------------------------------------------------------------------
THE GUARANTEE ON PAGE 4 MUST BE COMPLETED (NOT TO BE USED FOR SIGNATURE
GUARANTEES).
3
<PAGE>
GUARANTEE
(Not To Be Used for Signature Guarantees)
The undersigned, a firm which is a member of a registered national
securities exchange or of the National Association of Securities Dealers, Inc.
or which is a commercial bank or trust company having an office or correspondent
in the United States that is a member in good standing of the Securities
Transfer Association Medallion Program, the New York Stock Exchange, Inc.,
Medallion Signature Program or the Stock Exchange Medallion Program, guarantees
to deliver to the Depositary, at its address set forth above, Certificates
evidencing the Trust Securities tendered hereby, in proper form for transfer, or
confirmation of book-entry transfer of such Trust Securities into the
Depositary's account at The Depository Trust Company, in each case with delivery
of (a) a Letter of Transmittal (or facsimile thereof) properly completed and
duly executed, together with any required signature guarantees, or (b) an
Agent's Message (as defined in the Offer to Purchase) in the case of a
book-entry transfer, and any other required documents, all within three American
Stock Exchange trading days after the date of execution of this Notice of
Guaranteed Delivery. An "American Stock Exchange trading day" is any day on
which the American Stock Exchange is open for business.
Please Type or Print:
Name of Firm: __________________________________________________________________
Address: _______________________________________________________________________
Zip Code
Area Code and Telephone No.:
Name: ________________________________ Title: ________________________
Authorized Signature: __________________________________________________________
Dated: _________________________________________________________________________
DO NOT SEND CERTIFICATES WITH THIS NOTICE OF GUARANTEED DELIVERY.
CERTIFICATES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL.
4
OFFER TO PURCHASE FOR CASH
UP TO 700,000 9.4% CUMULATIVE TRUST PREFERRED SECURITIES
OF
U.S. HOME & GARDEN TRUST I
AT
$15.00 NET PER TRUST PREFERRED SECURITY
BY
U.S. HOME & GARDEN INC.
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT
5:00 PM, NEW YORK CITY TIME, ON FRIDAY, JANUARY 14, 2000,
UNLESS THE OFFER IS EXTENDED.
December 15, 1999
To Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees:
We have been appointed by U.S. Home & Garden Inc., a Delaware corporation
(the "Company") to act as Information Agent in connection with the offer to
purchase up to 700,000 9.4% Cumulative Trust Preferred Securities (the "Trust
Securities"), of U.S. Home & Garden Trust I, a Delaware statutory business trust
(the "Trust"), at a price of $15.00 per Trust Security, net to the seller in
cash, without interest thereon, upon the terms and subject to the conditions set
forth in the Company's Offer to Purchase, dated December 15, 1999 (the "Offer to
Purchase"), and in the related Letter of Transmittal (which, together with any
amendments or supplements thereto from time to time, constitute the "Offer")
enclosed herewith. Please furnish copies of the enclosed materials to those of
your clients for whose accounts you hold Trust Securities registered in your
name or in the name of your nominee.
If, prior to the Expiration Date, more than 700,000 Trust Securities (or
such greater number of Trust Securities as the Company may elect to purchase)
are validly tendered, the Company will, upon the terms and subject to the
conditions of the Offer, accept Trust Securities for purchase first from Odd Lot
Owners (as defined in Section 2 of the Offer to Purchase) who validly tender all
of their Trust Securities and then on a pro rata basis, if necessary, from all
other securityholders whose Trust Securities are validly tendered.
The Offer is not conditioned upon any minimum number of Trust Securities
being tendered. The Offer is, however, subject to certain other conditions set
forth in the Offer. See Section 6 of the Offer to Purchase.
Enclosed for your information and use are copies of the following
documents:
1. Offer to Purchase, dated December 15, 1999;
2. Letter of Transmittal to be used by holders of Trust Securities in
accepting the Offer and tendering Trust Securities;
3. Notice of Guaranteed Delivery to be used to accept the Offer if the
certificates evidencing Trust Securities and all other required documents
are not immediately available or cannot be delivered to Continental Stock
Transfer & Trust Company (the "Depositary") by the Expiration Date (as
<PAGE>
defined in the Offer to Purchase) or if the procedure for book-entry
transfer cannot be completed by the Expiration Date;
4. A form of letter which may be sent to your clients for whose
accounts you hold Trust Securities registered in your name or in the name
of your nominee, with space provided for obtaining such clients'
instructions with regard to the Offer; and
5. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS AS
PROMPTLY AS POSSIBLE. PLEASE NOTE THAT THE OFFER, PRORATION PERIOD AND
WITHDRAWAL RIGHTS EXPIRE AT 5:00 PM, NEW YORK CITY TIME, ON FRIDAY, JANUARY 14,
2000, UNLESS THE OFFER IS EXTENDED.
In all cases, payment for Trust Securities accepted for payment pursuant to
the Offer will be made only after timely receipt by the Depositary of (i)
certificates evidencing such Trust Securities (the "Certificates") or, timely
confirmation of a book-entry transfer of such Trust Securities into the
Depositary's account at the Book-Entry Transfer Facility (as defined in the
Offer to Purchase), (ii) a Letter of Transmittal (or facsimile thereof) properly
completed, with the signatures guaranteed thereon, if required, and duly
executed or an Agent's Message (as defined in the Offer to Purchase) in
connection with a book-entry transfer, and (iii) any other required documents in
accordance with the instructions contained in the Letter of Transmittal.
Accordingly, payment may not be made to all tendering stockholders at the same
time depending on when Certificates for, or confirmations of book-entry transfer
of, such Trust Securities are actually received by the Depositary.
If a holder of Trust Securities wishes to tender Trust Securities, but such
holders' Certificates are not immediately available or such holder cannot
deliver the Certificates and all other required documents, or cannot complete
the procedure for book-entry transfer, prior to the expiration of the Offer, a
tender of Trust Securities may be effected by following the guaranteed delivery
procedure described in Section 3 of the Offer to Purchase.
The Company will not pay any fees or commissions to any broker, dealer or
other person (other than the Depositary and the Information Agent as described
in the Offer) in connection with the solicitation of tenders of Trust Securities
pursuant to the Offer. However, the Company will reimburse you for customary
mailing and handling expenses incurred by you in forwarding any of the enclosed
materials to your clients. The Company will pay or cause to be paid any transfer
taxes payable with respect to the transfer of Trust Securities to it, except as
otherwise provided in Instruction 6 of the Letter of Transmittal.
Any inquiries you may have with respect to the Offer, or requests for
additional copies of the enclosed materials, should be addressed to us at the
address and telephone number set forth on the back cover page of the Offer to
Purchase.
Very truly yours,
GEORGESON SHAREHOLDER
COMMUNICATIONS INC.
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL AUTHORIZE YOU
OR ANY OTHER PERSON TO ACT ON BEHALF OF OR AS THE AGENT OF THE COMPANY OR THE
TRUST, THE INFORMATION AGENT OR THE DEPOSITARY, OR OF ANY AFFILIATE OF ANY OF
THEM, OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR TO MAKE ANY
STATEMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE
ENCLOSED DOCUMENTS AND THE STATEMENTS CONTAINED THEREIN.
2
OFFER TO PURCHASE FOR CASH
UP TO 700,000 9.4% CUMULATIVE TRUST PREFERRED SECURITIES
OF
U.S. HOME & GARDEN TRUST I
AT $15.00 NET PER TRUST PREFERRED SECURITY
BY
U.S. HOME & GARDEN INC.
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT
5:00 PM, NEW YORK CITY TIME, ON FRIDAY,
JANUARY 14, 2000, UNLESS THE OFFER IS EXTENDED.
To Our Clients:
Enclosed for your consideration are an Offer to Purchase, dated December
15, 1999 (the "Offer to Purchase"), and a related Letter of Transmittal (which,
together with any amendments or supplements thereto from time to time,
constitute the "Offer") and other materials in connection with the offer to
purchase by U.S. Home & Garden, Inc., a Delaware corporation (the "Company") of
up to 700,000 9.4% Cumulative Trust Preferred Securities (the "Trust
Securities"), of U.S. Home & Garden Trust I, a statutory business trust (the
"Trust"), at the price of $15.00 per Trust Security, net to the seller in cash,
without interest thereon, upon the terms and subject to the conditions set forth
in the Offer.
WE ARE (OR OUR NOMINEE IS) THE HOLDER OF RECORD OF TRUST SECURITIES HELD BY
US FOR YOUR ACCOUNT. A TENDER OF SUCH TRUST SECURITIES CAN BE MADE ONLY BY US AS
THE HOLDER OF RECORD AND PURSUANT TO YOUR INSTRUCTIONS. THE LETTER OF
TRANSMITTAL IS FURNISHED TO YOU FOR YOUR INFORMATION ONLY AND CANNOT BE USED BY
YOU TO TENDER TRUST SECURITIES HELD BY US FOR YOUR ACCOUNT.
Accordingly, we request instructions as to whether you wish to have us
tender on your behalf any or all of the Trust Securities held by us for your
account, upon the terms and subject to the conditions set forth in the Offer.
Your attention is directed to the following:
1. The tender offer price is $15.00 per Trust Security, net to the
seller in cash, without interest thereon, upon the terms and subject to the
conditions set forth in the Offer.
2. The Offer, is for up to 700,000 Trust Securities. The Offer is not
conditioned upon any minimum number of Trust Securities being tendered. The
Offer is, however, subject to certain conditions set forth in the Offer.
3. The Offer, proration period, and withdrawal rights will expire at
5:00 P.M. New York City time, on Friday, January 14, 2000, unless the Offer
is extended.
4. Tendering securityholders will not be obligated to pay brokerage
fees or commissions or, except as otherwise provided in Instruction 6 of
the Letter of Transmittal, transfer taxes with respect to the purchase of
Trust Securities by the Company pursuant to the Offer. However, federal
<PAGE>
income tax withholding at a rate of 31% may be required, unless an
exemption is provided or unless the required taxpayer identification
information is provided. See Instruction 9 of Letter of Transmittal.
5. If you own beneficially an aggregate of less than 100 Trust
Securities, you instruct us to tender on your behalf all the Trust
Securities of which we are the holder of record before the expiration of
the Offer and you check the appropriate space in the box captioned "Odd
Lots" in the attached Instruction Form, the Company will accept all such
Trust Securities for purchase before proration, if any, of the purchase of
other Trust Securities validly tendered.
6. Notwithstanding any other provision of the Offer, payment for Trust
Securities accepted for payment pursuant to the Offer will in all cases be
made only after timely receipt by the Depositary of (a) certificates for
Trust Securities or a timely Book-Entry Confirmation (as defined in the
Offer to Purchase) with respect to such Trust Securities pursuant to the
procedures set forth in Section 3 of the Offer to Purchase, (b) the Letter
of Transmittal (or a manually signed facsimile thereof), properly completed
and duly executed, together with any required signature guarantees, or, in
the case of book-entry transfers, an Agent's Message (as defined in the
Offer to Purchase) and (c) any other documents required by the Letter of
Transmittal. Accordingly, payment may not be made to all tendering
securityholders at the same time depending upon when certificates for or
confirmations of book-entry transfer of such Trust Securities are actually
received by the Depositary.
IF YOU WISH TO HAVE US TENDER ANY OR ALL OF YOUR TRUST SECURITIES, PLEASE
SO INSTRUCT US BY COMPLETING, EXECUTING AND RETURNING TO US THE INSTRUCTION FORM
CONTAINED IN THIS LETTER. AN ENVELOPE IN WHICH TO RETURN YOUR INSTRUCTIONS TO US
IS ENCLOSED. IF YOU AUTHORIZE THE TENDER OF YOUR TRUST SECURITIES, ALL SUCH
TRUST SECURITIES WILL BE TENDERED UNLESS OTHERWISE SPECIFIED IN YOUR
INSTRUCTIONS. YOUR INSTRUCTIONS SHOULD BE FORWARDED TO US IN AMPLE TIME TO
PERMIT US TO SUBMIT A TENDER ON YOUR BEHALF PRIOR TO THE EXPIRATION OF THE
OFFER.
As described in Section 1 of the Offer to Purchase, if before the
Expiration Date more than 700,000 Trust Securities (or such greater number of
Trust Securities as the Company elects to purchase) are validly tendered, the
Company will accept Trust Securities for purchase at the Purchase Price in the
following order of priority:
(a) first, all Trust Securities validly tendered at the Purchase Price
prior to the Expiration Date by any Odd Lot Owner (as defined in
Section 2 of the Offer to Purchase) who:
(1) tenders all Trust Securities beneficially owned by such Odd Lot
Owner (partial tenders will not qualify for this preference); and
(2) completes the section captioned "Odd Lots" on the Letter of
Transmittal and, if applicable, on the Notice of Guaranteed
Delivery; and
(b) then, after purchase of all of the foregoing Trust Securities, all
other Trust Securities validly tendered before the Expiration Date on
a pro rata basis, if necessary (with adjustments to avoid purchases of
fractional Trust Securities).
The Offer is made only by the Offer to Purchase and the related Letter of
Transmittal and is not being made to (nor will tenders be accepted from or on
behalf of) holders of Trust Securities in any jurisdiction in which the Offer or
the acceptance thereof would not be in compliance with the securities, blue sky
or other laws of such jurisdiction. However, the Company may, in its discretion,
take such action as it may deem necessary to make the Offer in any jurisdiction
and extend the Offer to holders of Trust Securities in such jurisdiction. In
those jurisdictions where the securities laws require the Offer to be made by a
licensed broker or dealer, the Offer shall
2
<PAGE>
be deemed to be made on behalf of the Company by or one or more registered
brokers or dealers licensed under the laws of such jurisdiction.
3
<PAGE>
INSTRUCTIONS WITH RESPECT TO THE OFFER TO PURCHASE
FOR CASH UP TO 700,000 9.4% CUMULATIVE TRUST PREFERRED SECURITIES
OF
U.S. HOME & GARDEN TRUST I
BY
U.S. HOME & GARDEN INC.
The undersigned acknowledge(s) receipt of your letter and the enclosed
Offer to Purchase, dated December 15, 1999, and the related Letter of
Transmittal (which, together with any amendments or supplements thereto from
time to time, constitute the "Offer"), in connection with the offer to purchase
by U.S. Home & Garden Inc. of up to 700,000 9.4% Cumulative Trust Preferred
Securities (the "Trust Securities"), of U.S. Home & Garden Trust I, a Delaware
statutory business trust, at the price of $15.00 per Trust Security, net to the
seller in cash, without interest thereon, upon the terms and subject to the
conditions set forth in the Offer. This will instruct you to tender the number
of Trust Securities indicated below (or, if no number is indicated below, all
Trust Securities) that are held by you for the account of the undersigned, upon
the terms and subject to the conditions set forth in the Offer.
The Company will purchase 700,000 Trust Securities. If more than 700,000
Trust Securities are tendered, the Company will prorate the number of Trust
Securities offered pursuant to Section 1 of the Offer to Purchase.
[___] By checking this box, all Trust Securities held by us for your
account will be tendered at $15.00 per Trust Security. If less
than all of the Trust Securities are to tendered, please check
the box below and indicate the aggregate number of Trust
Securities to be tendered by us.
[___] Trust Securities(1)
ODD LOTS
[___] By checking this box, the undersigned represents that the
undersigned owns beneficially an aggregate of less than 100 Trust
Securities, and is tendering or is instructing the applicable
record holder(s) to tender all such Trust Securities at $15.00
per Trust Security.
Number of Trust Securities to Be Tendered*: ____________________________________
Date: __________________________________________________________________________
Signature(s): __________________________________________________________________
(Sign Here)
________________________________________________________________________________
(Print Name(s))
- ----------
(1) Unless otherwise indicated, it will be assumed that all Trust Securities
held for the account of the undersigned are to be tendered.
4
<PAGE>
________________________________________________________________________________
(Print Address(es))
________________________________________________________________________________
(Area Code and Telephone Number(s))
________________________________________________________________________________
(Taxpayer Identification or Social Security Number(s))
* Unless otherwise indicated, it will be assumed that all Trust Securities
held by us for your account are to be tendered.
This form must be returned to the brokerage firm maintaining your account.
5
FOR ADDITIONAL
INFORMATION CONTACT: Robert L. Kassel, President
U.S. Home & Garden Inc.
(415) 616-8111
U.S. HOME & GARDEN INC. ANNNOUNCES TENDER OFFER FOR UP TO 700,000 OF THE 9.4%
CUMULATIVE TRUST PREFERRED SECURITIES OF U.S. HOME & GARDEN TRUST I
San Francisco, California (December 13, 1999)... U.S. Home & Garden Inc.
(NASDAQ: USHG) today announced that it will launch a tender offer on or before
December 15, 1999 for up to 700,000 of the outstanding 9.4% Cumulative Trust
Preferred I Securities of U.S. Home & Garden Trust I (AMEX: UHG.Pr.A), a wholly
owned subsidiary of the Company, at a purchase price of $15.00 per Trust
Preferred Security in cash. The offer represents a 23.7% premium over the
closing price of $12.125 per security for the Trust Preferred Securities on
December 10, 1999. There are currently 2,530,000 Trust Preferred Securities
outstanding.
The terms of the tender offer will be described more fully in the offering
materials to be distributed to holders of the Trust Preferred Securities. If
more than 700,000 Trust Preferred Securities are tendered and the Company does
not elect to acquire any additional securities, there will be a proration. The
tender offer will not be contingent upon any minimum number of Trust Preferred
Securities being tendered.
The Company intends to finance the tender offer with available funds from its
existing lines of credit.
The tender offer is scheduled to expire on 5:00 p.m. New York City Time on
January 14, 2000.
U.S. Home & Garden Inc. is a leading manufacturer and marketer of a broad
range of consumer lawn and garden products including weed preventive landscape
fabrics, weed trimmer replacement heads, fertilizer spikes, decorative landscape
edging, shade cloth and root feeders which are sold under various recognized
brand names including Weedblock(R), Jobe's(R), Weed Wizard(TM), Emerald Edge(R),
Shade Fabric(TM), Ross(R), and Tensar(R). The Company markets its products
through most large national home improvement and mass merchant retailers. The
Company's Internet subsidiary, E*Garden (www.egarden.com), is an electronic
marketplace and portal for the lawn and garden industry.
AMENDMENT TO CREDIT AGREEMENT
This Amendment (the "Amendment") dated as of September 29, 1999, is between
Bank of America, N.A. (the "Bank"), formerly known as Bank of America National
Trust and Savings Association, and U.S. Home & Garden Inc. (the "Borrower").
RECITALS
A. The Bank and the Borrower entered into a certain Credit Agreement dated
as of October 13, 1998 (the "Agreement").
B. The Bank and the Borrower desire to amend the Agreement.
AGREEMENT
1. Definitions. Capitalized terms used but not defined in this Amendment
shall have the meaning given to them in the Agreement
2. Amendments. The Agreement is hereby amended as follows:
2.1 In Section 7.4(d), clause (ii) is amended to read in its entirety
as follows:
(ii) the prior effective written consent or approval to such
Acquisition of the board of directors or equivalent governing body of
the target is obtained, and the prior written approval of the Bank to
such Acquisition is obtained.
2.2 In Section 7,11(d), the clause "declare or pay cash dividends to
its stockholders and" is deleted, and the amount "$8,000,000" is
substituted for the amount "$5,000,000."
2.3 Section 7.18 is amended to read in its entirety as follows:
7.18 Financial Covenants.
(a) Interest Coverage, Ratio. The Borrower shall not permit the
Interest Coverage Ratio, for any four fiscal quarter period (on a
rolling four quarter basis) to be less than (i) 1.75 to 1.00 for the
four fiscal quarter periods ending on June 30, 1999, September 30,
1999, December 31, 1999, and March 31, 2000, (ii) 2.50 to 1.00 for the
four fiscal quarter period ending on June 30, 2000, and (iii) 3.00 to
1.00 for any four fiscal quarter period ending after June 30, 2000.
(b) Leverage Ratio. The Borrower shall not permit the Leverage
Ratio for any four fiscal quarter period (on a rolling four quarter
basis) to exceed (1) 6.25 to 1.00 for the four fiscal quarter periods
ending on June 30, 1999, September 30, 1999, and December 31. 1999,
(ii) 6.50 to 1.00 for the
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four fiscal quarter period ending on March 31, 2000, (iii) 4.25 to
1.00 for the four fiscal quarter period ending on June 30, 2000, and
for any four fiscal quarter period ending, on March 31 of any fiscal
year (except March 31, 2000), and (iv) 4.00 to 1.00 for any other four
fiscal quarter period.
(c) Fixed Charge Coverage Ratio. The Borrower shall not permit
the Fixed Charge Coverage Ratio to be less than (i) 1.25 to 1.00 for
the three fiscal quarter period ending on June 30, 1999, and for the
four fiscal quarter periods (on a rolling four quarter basis) ending
on September 30, 1999, December 31, 1999, and March 31, 2000, (ii)
2.00 to 1.00 for the four fiscal quarter periods (on a rolling four
quarter basis) ending an or after June 30, 2000, and on or before
September 30, 2001, (iii) 1.50 to 1.00 for the four fiscal quarter
periods (on a rolling four quarter basis) ending on December 31, 2001,
and March 31, 2002, and (iv) 1.25 to 1.00 for any four fiscal quarter
period (on a rolling four quarter basis) ending after March 31, 2002.
(d) Consolidated EBITDA. The Borrower shall not permit
Consolidated EBITDA (Ampro Adjusted) for any four fiscal quarter
period (on a rolling four quarter basis) to be less than (i)
$14,500,000 for the four fiscal quarter periods ending on June 30,
1999, September 30, 1999,, and December 31, 1999, (ii) $15,500,000 for
the four fiscal quarter period ending on March 31, 2000, (iii)
$21,000, 000 for the four fiscal quarter period ending on June 30,
2000 and (iv) $22,000,000 for any four fiscal quarter period ending on
or after September 30, 2000.
3. Representations and Warranties. When the Borrower signs this Amendment,
the Borrower represents and warrants to the Bank that:
3.1 No Default or Event of Default has occurred or is continuing under
the Agreement except those Defaults or Events of Default, if any, that have
been disclosed in writing to the Bank or waived in writing by the Bank.
3.2 The representations and warranties in the Agreement are true as of
the date of this Amendment as if made on the date of this Amendment except
to the extent such representations and warranties expressly refer to an
earlier date, in which case they are true and correct as of such earlier
date.
3.3 The execution, delivery and performance by the Borrower of this
Amendment have been duly authorized by all necessary corporate and other
action and do not and will not require any registration with, consent or
approval of, notice to or action by, any, Person (including any
Governmental Authority) in order to be effective and enforceable. The
Agreement as amended by this Amendment constitutes the legal, valid and
binding obligations of the Borrower, enforceable against it in accordance
with its respective terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, or similar laws affecting the
enforcement of creditors' rights generally or by equitable principles
relating to enforceability.
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4. Effective Date. This Amendment will be effective on the date on which
the Bank receives from the Borrower a duly executed original of this Amendment
and a fee in the amount of Fifty-Six Thousand Two Hundred Fifty Dollars
($56,250).
5. Miscellaneous.
5.1 Except as herein expressly amended, all terms, covenants and
provisions of the Agreement are and shall remain in full force and effect
and all references therein and in the other Loan Documents to the Agreement
shall henceforth refer to the Agreement as amended by this Amendment. This
Amendment shall be deemed incorporated into, and a part of, the Agreement.
This Amendment is a Loan Document.
5.2 This Amendment shall be binding upon and inure to the benefit of
the parties hereto and to the Agreement and their respective successors and
assigns. No third party beneficiaries are intended in connection with this
Amendment.
5.3 This Amendment shall be governed by and construed in accordance
with the law of the State of California.
5.4 This Amendment may be executed in any number of counterparts, each
of which shall be deemed an original, but all such counterparts together
shall constitute but one and the same instrument. Each of the parties
hereto understands and agrees that this document (and any other document
required herein) may be delivered by any party thereto either in the form
of an executed original or an executed original sent by, facsimile
transmission to be followed promptly by mailing of a hard copy original,
and that receipt by the Bank of a facsimile transmitted document
purportedly bearing the signature of the Borrower shall bind the Borrower
with the same force and affect as the delivery of a hard copy original. Any
failure by the Bank to receive the hard copy executed original of such
document shall not diminish the binding effect of receipt of the facsimile
transmitted executed original of such document.
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This Amendment is executed as of the date stated at the beginning of this
Amendment.
Bank of America, N.A.
By: Michele Mojabi
Title: Vice President
U.S. Home & Garden Inc.
By: Lynda Gustafson
Title: V.P. Finance
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SECOND AMENDMENT TO CREDIT AGREEMENT
This Amendment (the "Amendment") dated as of November 22, 1999, is between
Bank of America, N.A. (the "Bank"), formerly known as Bank of America National
Trust and Savings Association, and U.S. Home & Garden Inc. (the "Borrower").
RECITALS
A. The Bank and the Borrower entered into a certain Credit Agreement dated
as of October 13, 1998 (including previous amendments, the "Credit Agreement").
B. On or about June 11, 1999 (the "Acquisition Date"), the Borrower
acquired a new subsidiary, E-Garden, Inc., a North Carolina Company, which the
Borrower now wishes to reincorporate in the State of Delaware through a merger
with a recently formed Delaware shell corporation (such subsidiary, either
before or after such merger, is referred to herein as "E-Garden"). The Borrower
desires to sell to investors in a private transaction shares of the common stock
and warrants to purchase shares of the common stock of E-Garden, and otherwise
issue shares of common stock or options to purchase shares of common stock of
E-Garden in private transactions to officers, directors, employees and
consultants to E-Garden, who may also be officers and directors of Borrower. At
the conclusion of the foregoing transactions ("Transactions") the Borrower will
continue to own at least 51% of the shares of E-Garden. The Transactions are
prohibited by paragraph 7.2 of the Credit Agreement.
C. The Bank and the Borrower desire to amend the Credit Agreement.
AGREEMENT
1. Definitions. Capitalized terms used but not defined in this Amendment
shall have the meaning given to them in the Agreement.
2. Waiver. The Bank hereby waives compliance by the Borrower with Section
7.2 (Deposition of Assets) of the Credit Agreement for the sole and express
purpose of permitting the Borrower to enter into the Transactions. Additionally,
retroactively to the Acquisition Date, the Bank waives the requirement of a
guaranty from E-Garden as required under Section 6.13 of the Credit Agreement,
and waives the requirement for a security interest in the assets of E-Garden as
required under Sections 6.13 and 7.4(d)(vii) of the Credit Agreement. The
parties acknowledge, however, that the Credit Agreement continues to require a
security interest in the Borrower's remaining stock in E-Garden. The Bank waives
the Borrower's earlier non-compliance with the pledge requirement. The Borrower
shall deliver to the Bank the stock of E-Garden owned by the Borrower
immediately following consummation of the Transactions.
3. Amendments. The Credit Agreement is hereby amended as follows:
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3.1 Section 5.13 and sections 6.3 through 7.17 of the Credit Agreement
are amended to provide that E-Garden shall not be considered a Subsidiary
for the purposes of those sections.
3.2 Section 7.18 is amended to provide that each of the covenants
therein shall be calculated using the consolidated financial information to
the Borrower and all of its Wholly-Owned Subsidiaries, by excluding
E-Garden.
4. Representations and Warranties. When the Borrower signs this Amendment,
the Borrower represents and warrants to the Bank that:
4.1 No Default or Event of Default has occurred or is continuing under
the Credit Agreement except those Defaults or Events of Default, if any,
that have been disclosed in writing to the Bank or waived in writing by the
Bank.
4.2 The representations and warranties in the Credit Agreement are
true as of the date of this Amendment as if made on the date of this
Amendment except to the extent such representations and warranties
expressly refer to an earlier date, in which case they are true and correct
as of such earlier date.
4.3 The execution, delivery and performance by the Borrower of this
Amendment have been duly authorized by all necessary corporate and other
action and do not and will not require any registration with, consent or
approval of, notice to or action by, any Person (including any Governmental
Authority) in order to be effective and enforceable. The Credit Agreement
as amended by this Amendment constitutes the legal, valid and binding
obligations of the Borrower, enforceable against it in accordance with its
respective terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, or similar laws affecting the enforcement of
creditors' rights generally or by equitable principles relating to
enforceability.
5. Miscellaneous.
5.1 Except as herein expressly amended, all terms, covenants and
provisions of the Agreement are and shall remain in full force and effect
and all references therein and in the other Loan Documents to the Agreement
shall henceforth refer to the Agreement as amended by this Amendment. This
Amendment shall be deemed incorporated into, and a part of, the Agreement.
This Amendment is a Loan Document. The waivers do not apply to any other
breach that may now exist or may occur after the date of this Amendment
with respect to the Transactions or any term, condition, or covenant of the
Credit Agreement.
5.2 This Amendment shall be binding upon and inure to the benefit of
the parties hereto and to the Agreement and their respective successors and
assigns. No third party beneficiaries are intended in connection with this
Amendment.
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5.3 This Amendment shall be governed by and construed in accordance
with the law of the State of California.
5.4 This Amendment may be executed in any number of counterparts, each
of which shall be deemed an original, but all such counterparts together
shall constitute but one and the same instrument. Each of the parties
hereto understands and agrees that this document (and any other document
required herein) may be delivered by any party thereto either in the form
of an executed original or an executed original sent by, facsimile
transmission to be followed promptly by mailing of a hard copy original,
and that receipt by the Bank of a facsimile transmitted document
purportedly bearing the signature of the Borrower shall bind the Borrower
with the same force and affect as the delivery of a hard copy original. Any
failure by the Bank to receive the hard copy executed original of such
document shall not diminish the binding effect of receipt of the facsimile
transmitted executed original of such document.
This Amendment is executed as of the date stated at the beginning of this
Amendment.
Bank of America, N.A.
By: Michele Mojabi
Title: Vice President
U.S. Home & Garden Inc.
By: Lynda Gustafson
Title: V.P. Finance
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