<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
/ X / ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (Fee Required)
For the fiscal year ended December 31, 1993.
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (No Fee Required)
For the transition period from _______ to _______.
Commission file number 33-50351.
HOUSEHOLD INTERNATIONAL NETHERLANDS B.V.
(Exact name of registrant as specified in its charter)
The Netherlands Not Applicable
(State or other jurisdiction (I.R.S.Employer
incorporation or organization) Identification No.)
Hoekenrode 6
1102 BR
Amsterdam, Netherlands
(Address of principal executive offices)
Registrant's Telephone number, including
area code: 011-31-20-6298033
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
5.25% Senior Notes Due October 15, 1998
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes / X / No / /
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of registrant's knowledge,
in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10-K. / X /
At March 25, 1994, there were 400 shares of the registrants
voting securities outstanding, all of which are owned by
Household Overseas Limited.<PAGE>
<PAGE> 2
HOUSEHOLD INTERNATIONAL NETHERLANDS B.V.
PART I.
Item 1. Business.
Household International Netherlands B.V. (the "Company") was
organized under the Dutch Civil Code on September 14, 1990. All
of the outstanding voting securities of the Company are owned by
Household Overseas Limited, which is a wholly-owned subsidiary of
Household International (U.K.) Limited ("HIUK"). The Company was
created solely to act as a non-operating special purpose
financing subsidiary of HIUK. The Company will only enter into
agreements or arrangements to obtain funds for, or to provide
financing options to, HFC Bank plc ("HFC Bank"), also a wholly-
owned subsidiary of HIUK. The Company will not engage in any
other type of business activity.
Item 2. Properties.
The Company does not and will not have any material physical
properties.
Item 3. Legal Proceedings.
There is no litigation pending against the Company.
Item 4. Submission of Matters to a Vote of Security Holders.
Not applicable.
PART II
Item 5. Market for the Registrant's Common Equity and Related
Stockholder Matters.
All voting securities of the Company are owned by Household
Overseas Limited.
<PAGE>
<PAGE> 3
Item 6. Selected Financial Data.
In thousands. 1993 1992 1991 1990*
- ----------------------------------------------------------------
STATEMENTS OF OPERATIONS
YEAR ENDED DECEMBER 31:
Net interest margin $93.9 - - -
General and administrative
expenses 13.7 $ 3.1 $ 3.0 $ 0.7
Income taxes 32.1 - - -
- -----------------------------------------------------------------
Net income (loss) $48.1 $(3.1) $(3.0) $(0.7)
=================================================================
BALANCE SHEET DATA AS OF DECEMBER 31:
Total assets $126,187.4 $20.0 $20.0 $20.0
Senior notes payable 124,711.7 - - -
Shareholder's equity 61.3 13.2 16.3 19.3
- -----------------------------------------------------------------
*Household International Netherlands B.V. was incorporated on
September 14, 1990. Therefore, there is no operating data
for 1989.
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
In October, 1993 the Company issued $125 million of 5.25%
Senior Notes Due October 15, 1998 (the "Notes"). The Notes are
unconditionally guaranteed, as to the payment of principal and
interest, by Household International, Inc., a Delaware
Corporation ("Household International"). Household International
may, at any time, assume all the obligations of the Company with
respect to Notes without the consent of any holder of the Notes.
Household International files periodic reports under the
Securities Exchange Act of 1934, as amended, with the Securities
and Exchange Commission (File No. 1-8198), including audited
financial statements which include the financial results of HIUK
and its subsidiaries, including the Company.
The Company loaned the proceeds of the above referenced
Notes to HFC Bank pursuant to an intercompany loan agreement at
the semi-annual rate of 5.50%. The Company anticipates that it
will have no other source of income other than a lending
relationship with HFC Bank.
<PAGE>
<PAGE> 4
Item 8. Financial Statements and Supplementary Data.
STATEMENTS OF OPERATIONS
In thousands.
- --------------------------------------------------------------
YEAR ENDED DECEMBER 31 1993 1992 1991
- --------------------------------------------------------------
Interest income $1,499.5 - -
Interest expense 1,405.6 - -
- --------------------------------------------------------------
Net interest margin 93.9 - -
General and administrative expenses 13.7 $ 3.1 $ 3.0
- --------------------------------------------------------------
Net income (loss) before income taxes 80.2 (3.1) (3.0)
Income taxes 32.1 - -
- --------------------------------------------------------------
Net income (loss) $ 48.1 $(3.1) $(3.0)
==============================================================
The accompanying notes are an integral part of these financial
statements.
<PAGE>
<PAGE> 5
BALANCE SHEETS
In thousands.
- ---------------------------------------------------------------
DECEMBER 31 1993 1992
- ---------------------------------------------------------------
ASSETS
Cash $ 14.7 $20.0
Accrued interest receivable 1,461.1 -
Intercompany loan 124,050.9 -
Deferred issuance costs 660.7 -
- ---------------------------------------------------------------
Total assets $126,187.4 $20.0
===============================================================
LIABILITIES AND SHAREHOLDER'S EQUITY
Accrued interest payable and
accrued liabilities $ 1,414.4 $ 6.8
Senior notes payable 124,711.7 0
- ---------------------------------------------------------------
Total liabilities 126,126.1 6.8
Shareholder's equity 61.3 13.2
- ---------------------------------------------------------------
Total liabilities and shareholder's equity $126,187.4 $20.0
===============================================================
The accompanying notes are an integral part of these financial
statements.
<PAGE>
<PAGE> 6
STATEMENTS OF CASH FLOWS
In thousands.
- ---------------------------------------------------------------
YEAR ENDED DECEMBER 31 1993 1992 1991
- ---------------------------------------------------------------
CASH PROVIDED BY OPERATIONS
Net income (loss) $ 48.1 $(3.1) $(3.0)
Adjustments to reconcile net income
to net cash provided by operations:
Accrued interest receivable (1,461.1) - -
Arrangement fee 987.5 - -
Deferred issuance costs (687.5) - -
Accrued interest payable
and accrued liabilities 1,407.7 3.1 3.0
- ---------------------------------------------------------------
Cash provided by operations 294.7 0.0 0.0
- ---------------------------------------------------------------
INVESTMENT IN OPERATIONS
Intercompany loan originated (125,000.0) - -
- ---------------------------------------------------------------
Cash decrease from investments
in operations (125,000.0) - -
- ---------------------------------------------------------------
FINANCING TRANSACTIONS
Senior notes payable issued 124,700.0 - -
- ---------------------------------------------------------------
Cash increase from
financing transactions 124,700.0 - -
- ---------------------------------------------------------------
Decrease in cash (5.3) 0.0 0.0
CASH AT JANUARY 1 20.0 20.0 20.0
- ---------------------------------------------------------------
Cash at December 31 $ 14.7 $20.0 $20.0
===============================================================
The accompanying notes are an integral part of these financial
statements.
<PAGE>
<PAGE> 7
STATEMENTS OF CHANGES IN SHAREHOLDER'S EQUITY
All dollar amounts are stated in thousands.
- ---------------------------------------------------------------
Issued
Number and Accumu-
of Paid-in lated
Shares Capital Deficit Total
- ---------------------------------------------------------------
Balance at December 31, 1990 400 $20.0 $ (.7) $19.3
Net loss - - (3.0) (3.0)
- ---------------------------------------------------------------
Balance at December 31, 1991 400 20.0 (3.7) 16.3
Net loss - - (3.1) (3.1)
- ---------------------------------------------------------------
Balance at December 31, 1992 400 20.0 (6.8) 13.2
Net income - - 48.1 48.1
- ---------------------------------------------------------------
Balance at December 31, 1993 400 $20.0 $41.3 $61.3
===============================================================
The accompanying notes are an integral part of these financial
statements.
Notes to Financial Statements
Household International Netherlands B.V. (the "Company") was
organized under the Dutch Civil Code on September 14, 1990. All
of the outstanding voting securities of the company are owned by
Household Overseas Limited, which is a wholly-owned subsidiary of
Household International (U.K.) Limited ("HIUK"). The ultimate
parent company is Household International, Inc. ("Household
International"), a Delaware corporation. The Company was
organized solely to serve as a source of financing, directly or
indirectly, for HFC Bank plc ("HFC Bank"), also a wholly-owned
subsidiary of HIUK. The Company's functional currency is the
U.S. dollar, as the majority of the Company's activities are
denominated in U.S. dollars.
1. EXPLANATION ADDED TO FINANCIAL STATEMENTS PREPARED FOR USE IN
THE UNITED STATES
The Company maintains its accounts in accordance with
accounting principles and practices employed by enterprises
in the Netherlands. The accompanying financial statements
reflect certain adjustments not recorded on the Company's
books, to present these statements in accordance with
generally accepted accounting principles of the U.S., and
therefore differ from the statements prepared for use in the
Netherlands. These adjustments, which only affect 1993 and
had no impact on either net income for the year ended
December 31, 1993 or shareholder's equity at that date, were
as follows:
A. Deferral of a $987,500 loan arrangement fee. This amount
has been netted against the intercompany loan and is being
amortized over the expected term of the loan. The
amortization was included in interest income in the
accompanying statements of operations. <PAGE>
<PAGE> 8
B. Deferral of $687,500 in senior notes payable issuance
costs. These costs have been recorded as an asset and are
being amortized over the expected term of the notes. The
amortization was included in interest expense in the
accompanying statements of operations.
C. Deferral of $300,000 in senior notes payable discount.
The discount has been netted against the senior notes
payable and is being amortized over the expected term of
the notes. The amortization was included in interest
expense in the accompanying statements of operations.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Debt discount and deferred issuance costs - Debt discount and
deferred issuance costs are amortized using a method which
approximates the effective yield method over the expected
term of the related senior notes payable.
Income taxes - The Company has obtained a ruling from the tax
authorities of the Netherlands. Under this ruling a certain
minimum taxable income is to be reported during the year.
Income tax expense as included in the accompanying statements
of operations has been calculated in accordance with this tax
ruling.
3. INTERCOMPANY LOANS
In thousands.
---------------------------------------------------------
AT DECEMBER 31 1993 1992
---------------------------------------------------------
Due from HFC Bank plc $125,000.0 -
Unamortized arrangement fee (949.1) -
---------------------------------------------------------
Total $124,050.9 -
=========================================================
The Company granted a long-term loan to HFC Bank. The loan
bears an annual interest rate of 5.50 percent and matures on
October 15, 1998. HFC Bank has entered into an agreement
("arrangement fee") to reimburse the Company for the discount
on the senior notes payable and issuance costs. This
arrangement fee is netted against the principal balance and
is amortized into interest income using a method which
approximates the effective yield method over the expected
term of the loan.
4. SENIOR NOTES PAYABLE
In thousands.
---------------------------------------------------------
AT DECEMBER 31 1993 1992
---------------------------------------------------------
Notes payable, 5.25%
due October 15, 1998 $125,000.0 -
Unamortized discounted (288.3) -
---------------------------------------------------------
Total notes payable $124,711.7 -
=========================================================<PAGE>
<PAGE> 9
The senior notes payable, which were issued in the U.S., are
guaranteed as to the payment of principal and interest until
maturity by Household International.
5. SHAREHOLDER'S EQUITY
The Company is authorized to issue 2,000 shares of common
stock with a stated par value of 100 Netherland guilders. At
December 31, 1993 and 1992, 400 shares were issued and
outstanding.
<PAGE>
<PAGE> 10
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
Household International Netherlands B.V.:
We have audited the accompanying balance sheets of Household
International Netherlands B.V. (a Netherlands corporation) as of
December 31, 1993 and 1992, and the related statements of
operations, changes in shareholder's equity and cash flows for
each of the three years in the period ended December 31, 1993.
These financial statements are the responsibility of the
Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position
of Household International Netherlands B.V. as of December 31,
1993 and 1992, and the results of its operations and its cash
flows for each of the three years in the period ended December
31, 1993 in conformity with generally accepted accounting
principles (see Note 1).
ARTHUR ANDERSEN & CO.
Chicago, Illinois,
February 25, 1994
<PAGE>
<PAGE> 11
Item 9. Changes in and Disagreements With Accountants on
Accounting and Financial Disclosure.
Not applicable.
PART III
Item 10. Directors and Executive Officers of the Registrant.
The following individuals are executive officers and/or
directors of the Company:
John W. Blenke, age 38, is President, Chairman of the Board,
Chief Executive Officer and Secretary of the Company since March
1994. Mr. Blenke was elected Secretary in October 1993. Mr.
Blenke is also currently an Assistant General Counsel and
Secretary of Household International, having been appointed
Secretary in 1993. Mr. Blenke joined Household International in
1989 as Corporate Finance Counsel, was promoted to Assistant
General Counsel-Securities & Corporate Law and Assistant
Secretary in 1991. Prior to joining Household, Mr. Blenke was
employed with a subsidiary of Transamerica Corporation.
Joseph P. Hoff, age 43, was appointed the Vice President,
Treasurer and Chief Financial Officer, as well as a Director of
the Company on September 8, 1993. Mr. Hoff is also currently an
Assistant Treasurer of Household International and a Vice
President and Assistant Treasurer of Household Finance
Corporation, also a subsidiary of Household, positions which he
has held since 1989. Prior to 1989, Mr. Hoff was a Senior Vice
President of Household Commercial Financial Services.
David A. Schoenholz, age 42, was appointed Vice President,
Controller and Chief Accounting Officer of the Company on
September 8, 1993. Mr. Schoenholz is also currently the Vice
President-Chief Accounting Officer of Household International,
having been so appointed in 1993. Mr. Schoenholz was appointed
Vice President in 1989 and Controller in 1987. He joined
Household International in 1985 as Director-Internal Audit.
Prior to joining Household International, Mr. Schoenholz was
employed by the Commodore Corporation, a manufacturer of mobile
homes, as Vice President/Controller from 1983 to 1985.
ABN-AMRO Trust Company (Nederland) B.V. was apppointed a
Director of the Company on September 8, 1993, and is a limited
liability company incorporated on August 27, 1991 in Amsterdam,
Netherlands. ABN-AMRO Trust Company (Nederland) B.V. and its
subsidiaries serve as director to approximately 1,000 Netherlands
incorporated holding and finance companies. ABN-AMRO Trust
Company (Nederland) B.V. acts as a manager, administrator and
advisor with respect to various financial and commercial
activities of companies located or operating in the Netherlands.
Item 11. Executive Compensation.
None of the officers of the Company receive compensation for
serving as officers of the Company.
<PAGE>
<PAGE> 12
Item 12. Security Ownership of Certain Beneficial Owners and
Management.
Not applicable.
Item 13. Certain Relationships and Related Transactions.
Not applicable.
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on
Form 8-K.
(a) Financial Statements.
The following financial statements, together with the report
of Arthur Andersen & Co., dated February 25, 1994, appearing
on pages 4 through 10 hereof.
Household International Netherlands B.V.:
Statements of Operations for the Three Years Ended
December 31, 1993.
Balance Sheets, December 31, 1993 and 1992.
Statements of Cash Flows for the Three Years Ended
December 31, 1993.
Statements of Changes in Shareholder's Equity for the Three
Years Ended December 31, 1993.
Notes to Financial Statements.
(b) Reports on Form 8-K.
During the three months ended December 31, 1993, the Company
filed no Reports on Form 8-K.
(c) Exhibits.
3(a) Articles of Incorporation of the Company.
4(a) Indenture dated as of September 9, 1993, between
the Company, Household and The First National
Bank of Boston, as Trustee (incorporated by reference
to Exhibit 4(a) of the Company's Registration
Statement on Form S-3 (No. 33-50351), filed on
September 21, 1993).
10(a) Loan Agreement dated October 21, 1993 between
the Company and HFC Bank plc.
12(a) Statement on the Computation of Ratio of Earnings
to Fixed Charges of the Company.
<PAGE>
<PAGE> 13
12(b) Statement on the Computation of Ratio of Earnings to
Fixed Charges and to Combined Fixed Charges and
Preferred Stock Dividends of Household International
(incorporated by reference to Exhibit 12 of Household
International's Annual Report on Form 10-K for the
fiscal year ended December 31, 1993).
23 Consent of Independent Public Accountants
(d) Schedules.
None.<PAGE>
<PAGE> 14
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, Household International
Netherlands B.V. has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
HOUSEHOLD INTERNATIONAL NETHERLANDS B.V.
Dated: March 31, 1994
By: /s/ John W. Blenke
--------------------------------
President, Chairman of the Board
and Chief Executive Officer
Pursuant to the requirements of the Securities and Exchange
Act of 1934, this report has been signed below by the following
persons on behalf of Household International Netherlands B.V. and
in the capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ John W. Blenke President, March 31, 1994
- ----------------------- Chairman of the Board
(John W. Blenke) and Chief Executive
Officer
/s/ Joseph W. Hoff Vice President, March 31, 1994
- ----------------------- Treasurer, Chief
(Joseph W. Hoff) Financial Officer
and Director
/s/ David A. Schoenholz Vice President, March 31, 1994
- ----------------------- Controller and
(David A. Schoenholz) Chief Accounting
Officer
Director March 31, 1994
- -----------------------
ABN-AMRO Trust Company
(Nederland) B.V.
<PAGE>
<PAGE> 15
EXHIBIT INDEX
EXHIBIT
NO. DESCRIPTION
- ------- -----------
3(a) Articles of Incorporation of the Company.
4(a) Indenture dated as of September 9, 1993, between
the Company, Household and The First National
Bank of Boston, as Trustee (incorporated by reference
to Exhibit 4(a) of the Company's Registration
Statement on Form S-3 (No. 33-50351), filed on
September 21, 1993).
10(a) Loan Agreement dated October 21, 1993 between
the Company and HFC Bank plc.
12(a) Statement on the Computation of Ratio of Earnings
to Fixed Charges of the Company.
12(b) Statement on the Computation of Ratio of Earnings to
Fixed Charges and to Combined Fixed Charges and
Preferred Stock Dividends of Household International
(incorporated by reference to Exhibit 12 of Household
International's Annual Report on Form 10-K for the
fiscal year ended December 31, 1993).
23 Consent of Independent Public Accountants
EXHIBIT 3(a)
Articles of Association of the "besloten vennootschap met
beperkte aansprakelijkheid" (private company with limited
liability under Dutch Law):
HOUSEHOLD INTERNATIONAL NETHERLANDS B.V.
CONTENTS
--------
Article
- -------
1 Definitions
2 Name and Registered Office
3 Objects
4 Capital and shares
5 Register of shareholders
6 Notices, announcements,
communications and statements
7 Issue of shares
8 Own shares
9 Decrease of capital
10 Transfer of shares
11 and 12 "Blokkeringsregeling" - Provisions
governing the transfer of or change
in any other way of ownership in
shares
13, 14 and 15 Management
16 Financial Year, annual accounts,
annual report and publication
17 Profit appropriation
18, 19, 20, 21 and 22 General Meeting
23 Resolutions without holding a
meeting
24 Winding-up
<PAGE>
On this, the fourteenth day of September one thousand nine
hundred and ninety, came and appeared before me, MICHIEL GEORGE
VAN RAVESTEYN, LL.M., civil-law notary, practising at Rotterdam:
FRANK EVERT ROOS, LL.M., a notarial candidate, residing at
Rotterdam, who declared and said that he was acting as written
attorney of Household Global Funding Inc., a company under the
laws of the state Delaware, United States of America, having its
principle place of business at Wilmington DE 19801, 1209 Orange
Street, United States of America.
The said power of attorney appears from an non-notarial
instrument of attorney, which, after having been acknowledged
according to the law, is attached to the present Deed.
The Appearer declared and said that he hereby forms and establish
a "besloten vennootschap met beperkte aansprakelijkheid" (private
company with limited liability under Dutch Law - hereinafter
called "the private limited company"), which shall be governed by
the following:
ARTICLES OF ASSOCIATION
-----------------------
DEFINITIONS
-----------
Article 1
- ---------
In these Articles of Association the expression:
a. The Company shall mean: HOUSEHOLD INTERNATIONAL NETHERLANDS
B.V., having its Registered Office at Rotterdam;
b. The Board of Directors shall mean: the management of the
Company;
c. General Meeting shall mean: both the body formed by
shareholders and the meeting of shareholders;
d. Annual Meeting shall mean: the general meeting called and
convened for the purpose of considering and confirming the
annual accounts, the annual report and the other documents
and writings required by law;
e. Subsidiary Company:
1. a legal entity, in which the Company or one or more of
its Subsidiaries can, whether or not pursuant to an
agreement with other persons entitled to vote, jointly
or alone, exercise more than one-half of the voting
rights at the general meeting;
2. a legal entity, of which the Company or one or more of
its Subsidiaries is a member or shareholder and can,
whether or not pursuant to an agreement with other
persons entitled to vote, jointly or alone, appoint or
dismiss more than one-half of the Directors or
Supervisory Directors, even if all the persons entitled
to vote cast votes;
3. a company acting under its own name, of which the
Company or one or more of its Subsidiaries is a fully
liable partner;
f. Group Company shall mean: a legal entity or a company which
is associated with the Company in a group;
g. Payable reserves shall mean: that part of the Company's own
property which is in excess of the paid-up and called-up
part of the capital, increased by the reserves which require
to be kept under and by virtue of the law and these Articles
of Association;
h. Annual accounts shall mean: the balance sheet, the profit
and loss account and the explanatory notes on these
accounts.
NAME AND REGISTERED OFFICE
--------------------------
Article 2
- ---------
1. The name of the Company is: HOUSEHOLD INTERNATIONAL
NETHERLANDS B.V.
2. Its Registered Office is situate at Rotterdam.
3. The Company may have branch offices and branch
establishments elsewhere, both at home and abroad.
OBJECTS
-------
Article 3
- ---------
The objects of the Company are to participate in, manage and
administer the business or and to finance other enterprises,
whatever their objects, as also (partly) to bind itself for the
debts of group-companies and, finally, to do all such acts and
things as are incidental or may be conducive thereto, the
foregoing to be construed in the widest sense of the words.
CAPITAL AND SHARES
------------------
Article 4
- ---------
1. The authorized capital of the Company is: two hundred
thousand guilders (Dfls 200,000.--).
2. It is divided into two thousand (2,000) shares of one
hundred guilders (Dfls 100.--) nominal each.
3. The shares shall be registered shares and shall be numbered
consecutively. No share certificates can be issued.
4. If the sum of the paid and called up part of the issued
capital and the reserves which require to be kept in
pursuance of a statutory provision is less than the
statutory minimum capital as last fixed, then the Company
must keep a reserve to the extent and the amount of such
difference.
5. The Company shall not give its co-operation to the issue of
depositary receipts. The voting right attaching to shares
shall not be capable of being granted to a pledgee or
usufructuary.
REGISTER OF SHAREHOLDERS
------------------------
Article 5
- ---------
1. The "Directie" (Board of Directors) shall keep a register,
in which shall be recorded the names and addresses of all
the shareholders, at the same time stating the amount paid
up on each share. The register shall be kept up-to-date.
2. Each shareholder shall take due care to see that his address
is known to the Company.
3. Finally, every release from liability for calls that have
not yet been paid shall be recorded in the register as also
- in case of transfer or partly paid-up shares - the date of
transfer.
4. On being so requested, the Board of Directors shall furnish
a shareholder, a usufructuary and a pledgee with an extract
from the register in respect of his right to a share, free
of charge.
5. The Board of Directors shall make the register available at
the Company's office for inspection and perusal by the
shareholders. The data and particulars contained in the
register concerning partly paid-up shares shall be available
for public inspection; a copy of or an extract from such
data and particulars shall be furnished at a price not
exceeding the cost-price.
NOTICES, ANNOUNCEMENTS, COMMUNICATIONS AND STATEMENTS
-----------------------------------------------------
Article 6
- ---------
Notices, announcements, communications and statements in
pursuance of these Articles of Association shall be given and
made by letter or by Writ and shall be sent to or served upon
shareholders to or at the addresses referred to in Article 5
hereof, and to the Board of Directors both to or at the office of
the Company and to or at the home-addresses of all the Directors.
ISSUE OF SHARES
---------------
Article 7
- ---------
1. Unsubscribed shares shall be issued by the Board of
Directors in pursuance of a resolution of the General
Meeting of Shareholders at such points of time, upon such
terms and conditions and to such persons as the General
Meeting shall determine. The preceding sentence shall apply
correspondingly to the granting of rights and the taking of
shares, but shall not be applicable to the issue of shares
to a person who exercises a right to take shares acquired by
him already previously.
2. Within fourteen days after the General Meeting has taken a
resolution within the meaning of paragraph 1 of this
Article, the Board of Directors shall give notice thereof to
all the shareholders.
3. Shareholders shall, in proportion to the number of shares
already held by them, have a preferential right of
subscription to the shares to be issued. They may exercise
this right only by a communication to that effect to the
Board of Directors within six weeks after the despatch of
the notice mentioned in paragraph 2 of this Article.
4. Shareholders shall have no preferential right of
subscription to shares which are issued to employees of the
Company or of a group-company.
5. The preferential right of subscription may - each time in
respect of only one issue - be limited or excluded by
resolution of the General Meeting.
6. For the purposes of the provisions laid down in paragraphs
3, 4 and 5 of this Article the granting of a right to take
shares shall rank equally with the issue of shares.
However, the shareholders shall have no preferential right
of subscription to shares which are issued to a person who
exercises a right to take shares acquired by him already
previously.
7. Upon the issue of a share at least one-fourth part of the
nominal amount shall require to be paid up thereon. The
non-paid-up part of the nominal amount shall require to be
paid only after the Board of Directors shall have called up
the same on behalf of the Company.
OWN SHARES
----------
Article 8
- ---------
1. Upon any issue of shares the Company cannot take own shares.
2. The Company may acquire fully-paid shares in its own capital
or depositary receipts therefor only under gratuitous or
universal title or if:
a. the Company's own assets, decreased by the acquisition-
price, is not less than the paid-up and called-up part
of the capital, increased by the reserves that require
to be kept under and in pursuance of the statutory
provisions or the provisions of these Articles of
Association,
b. the nominal amount of the shares to be acquired and the
shares already held jointly by the Company and its
subsidiary companies in its capital is not in excess of
one-half of the issued capital, and
c. the authorization for such acquisition has been granted
by the General Meeting or by another organ of the
company that has been designated for that purpose by
the General Meeting.
For the validity of such acquisition shall be decisive the
extent of the Company's own assets according to the balance
sheet as last confirmed and adopted, decreased by the
acquisition-price for the shares or the depositary receipts
therefor in the capital of the company and payments out of
the profits or reserves to others, in which itself and its
subsidiary companies became indebted after the date of the
balance sheet. If a financial year has elapsed for a period
in excess of six months without the annual accounts having
been confirmed and adopted, then acquisition in conformity
with this paragraph 2 shall not be allowed.
3. Neither the Company nor one of its subsidiary companies may
give security, grant a guarantee as regards the rate of
exchange, guarantee in any other way or severally or in any
other way bind itself in addition to or for other persons
with a view to the taking or acquisition of shares or
depositary receipts therefor in the Company.
Loans granted by the Company for the abovementioned purpose
shall be allowed up to a sum not exceeding the payable
reserves.
The Company shall keep a non-payable reserve up to the
outstanding amount of the loans mentioned in the immediately
preceding sentence.
4. Alienation of shares held by the Company in its own capital
shall be effected only in pursuance of a resolution of the
General Meeting. Upon taking the resolution to alienate
such shares or depositary receipts, the terms and conditions
of such alienation shall also be determined. Shareholders
shall, in proportion to the number of shares already held by
them, have a preferential right of subscription to the
shares so to be alienated.
5. No votes can be cast at a general meeting on a share owned
by the Company or a Subsidiary thereof, nor on a share, the
depositary receipts for which are held by one of them.
6. Upon determining to which extent shareholders cast votes,
are present or represented, or to which extent the share
capital is supplied or is represented, shares, in regard to
which it is provided by Statute that no votes may be cast
thereon, shall not be taken into account.
DECREASE OF CAPITAL
-------------------
Article 9
- ---------
1. The General Meeting may resolve upon decrease of the issued
capital by calling in shares or by decreasing the amount of
shares by means of an alteration of the Articles of
Association.
2. A resolution to call in shares can relate only to:
a. shares which are held by the Company itself; or
b. all the shares of a class, all the holders of which
shares have approved of such calling-in; or
c. all the shares of a class, provided always that such
calling-in is coupled with repayment.
3. Decrease of the amount of shares without repayment and
without release of the obligation to pay calls must be
effected in proportion to all the shares of one and the same
class.
4. Part repayment on shares or release of the obligation to pay
calls shall, besides in proportion to all the shares,
likewise be possible on shares of a class separately.
5. The requirements of ratio mentioned in paragraphs 3 and 4 of
this Article may be deviated from with the approval of all
the shareholders concerned.
6. The notice convening a meeting, in which a resolution is
taken as referred to in this Article, shall state the
purpose of the decrease of capital and the manner of
execution.
TRANSFER OF SHARES
------------------
Article 10
- ----------
Transfer of shares shall require an instrument of transfer and
service of such instrument upon the Company or the written
acknowledgment of such transfer by the Company upon the grounds
of submission of that instrument to the Company.
If it concerns the transfer of shares that have not been paid up
in full, such acknowledgment can take place only, if the
instrument of transfer bears a fixed date.
PROVISIONS GOVERNING THE TRANSFER OF OR CHANGE IN
ANY OTHER WAY OF OWNERSHIP IN SHARES
-------------------------------------------------
Article 11
- ----------
1. A valid transfer of shares shall require the approval of the
General Meeting.
2. The application for such approval shall require to be made
to the Board of Directors, stating at the same time the
number of shares which and the name of the person to whom
the applicant wishes to transfer.
3. The Board of Directors shall call and convene a General
Meeting, to be held within two months after it has received
the application, at which meeting a decision shall be given
on the said application. The Board of Directors shall
forthwith notify the decision of that Meeting to the
applicant.
4. The approval shall be deemed to have been granted:
a. if the period mentioned above has expired without a
decision on such application having been given;
b. if in the decision - by which the approval is refused -
no claimant or claimants has or have been named, who is
or are prepared and who is or are able to purchase
against payment in cash all the shares to which the
application relates.
5. If the approval has been granted or is deemed to have been
granted, the applicant may during a period of three months
thereafter transfer his shares in the manner as such
transfer was described in his application for approval.
6. If a decision - by which the approval has not been granted -
does contain the name of a claimant/the names of claimants,
who is or are prepared and who is or are able to purchase
against payment in cash all the shares to which the
application relates, the price of the shares to be
transferred shall - unless the persons concerned shall
otherwise agree - be fixed by one independent expert to be
designated by the Chairman of the Chamber of Commerce and
Industry, within whose area the Company's corporate seat is
situate, upon the application of whichever of the parties
first makes the same.
The Board of Directors shall give to the expert its full co-
operation in fixing such price. As soon as the price is
known to the Board of Directors, it shall give notice
thereof to the parties forthwith. The purchase agreement
shall come into being only after the applicant notifies to
the Board of Directors within one month after the price has
been fixed that he accepts the claimant/claimants named to
him and the price so fixed.
7. The costs incidental to such price-fixing shall be borne and
paid by the Company.
Article 12
- ----------
The Company itself may be claimant within the meaning of
paragraph 6 of Article 11 only with the approval of the
applicant, to which approval the applicant may attach the
condition that in addition to the price so fixed the Company
shall refund to him the tax loss he sustains as a result of
transfer to the Company instead of to a third party.
MANAGEMENT
----------
Article 13
- ----------
1. The Company shall be managed by a "Directie" (Board of
Directors), consisting of one or more "Directeuren"
(Directors), the number thereof to be fixed by the General
Meeting. The General Meeting may grant to a Director the
title of "President-Directeur" (Chairman of the Board of
Directors). Both a natural person and a legal entity may be
Director.
2. The General Meeting shall appoint the Directors and it may
at any time suspend or remove them from office. It shall
fix the remuneration and determine the other conditions of
service of the Directors.
3. A suspension cannot - event after it has been extended -
last longer than three months. If after expiry of that
period of time a decision has not yet been taken on the
termination of the suspension or removal from office, the
suspension from office shall cease to exist.
4. If there is more than one Director in office, the Directors
shall mutually determine the duties to be discharged by each
of them, to the extent that the General Meeting has not
regulated and arranged this by a code of rules.
5. The Board of Directors shall meet whenever a Director shall
so demand. It shall pass resolutions by absolute majority
of votes. If the votes are equal, the General Meeting shall
decide.
Article 14
- ----------
1. The General Meeting shall be empowered to submit resolutions
of the Board of Directors to its approval, by virtue of a
resolution of the General Meeting in which such resolutions
are clearly defined.
2. For the rest, the Board of Directors shall conform to the
directives of the General Meeting relating to the general
lines of the financial, social, economic and staff policy to
be conducted and pursued.
Article 15
- ----------
1. Each Director shall have power to represent the Company.
2. If a Director privately enters into an agreement with the
Company or privately litigates against the Company, it shall
- without prejudice to the competency and power of the
General Meeting to designate a person for that purpose,
which person may also be the Director with regard to whom
the conflicting interest subsists - be represented by one of
the other Directors.
If a Director has in any way other than that hereinbefore
referred to an interest conflicting with the Company's
interest, he, as also each of the other Directors, shall
have power to represent the Company.
3. If the office of a Director is vacated or if a Director is
otherwise prevented from acting, the remaining Director or
the remaining Directors shall be vested with the management
of the Company. If the office of the sole Director or the
offices of all the Directors is or are vacated or if the
sole Director or all the Directors is or are otherwise
prevented from acting, the person, designated to that
purpose every year by the General Meeting, shall
temporarily be vested with the management, not later than
until the point of time, at which the situation of vacancy
or prevention from acting in respect of at least one
Director has ceased to exist.
FINANCIAL YEAR, ANNUAL ACCOUNTS, ANNUAL REPORT
AND PUBLICATION
----------------------------------------------
Article 16
- ----------
1. The financial year shall be equal to the calendar year.
2. Each year, within five months after the close of the
financial year - subject to extension of this period by the
General Meeting on the grounds of circumstances of an
exceptional nature by at most six months -, the Board of
Directors shall draw up the annual accounts and make these
available for inspection and perusal in the manner set out
in paragraph 3 of this Article. Within this period the
Board of Directors shall also make available for inspection
and perusal the annual report, unless Article 403 of Book 2
of the (Dutch) Civil Code shall apply to the Company. The
annual accounts shall be signed by all the Directors. If
the signature of one or more of them fails, mention thereof
shall be made and the reason therefore stated.
3. From the day, on which notice of the annual general meeting
has been given, until the close of that meeting the accounts
mentioned in paragraph 2 of this Article shall, together
with the data and particulars to be added in pursuance of
Article 392 of Book 2 of the (Dutch) Civil Code, be made
available at the Company's office for inspection and perusal
by all the shareholders, and each of them may obtain copies
thereof, free of charge.
4. Confirmation - without qualification or reservation - of the
annual accounts by the General Meeting shall constitute a
discharge to the Directors for the management conducted by
them during the past financial year, subject to the
statutory restrictions.
5. The Company shall proceed to publication of the accounts,
data and particulars referred to in this Article, if and in
so far as and in the manner as Articles 394 et sqq. of Book
2 of the (Dutch) Civil Code so prescribe.
PROFIT APPROPRIATION
--------------------
Article 17
- ----------
1. a. The Company may make payments to the shareholders
and to other persons entitled to the profit capable of
being distributed only up to a sum not exceeding the
amount of the payable reserves.
b. Payment of profit shall be made after confirmation of
the annual accounts showing that the same is allowed.
c. No profit shall be distributed on shares for the
benefit of the Company.
2. The distributable profit shall be at the free disposal of
the General Meeting.
3. In calculating the profit appropriation the shares held by
the Company in its own capital shall not count, unless a
usufruct has been created in these shares.
4. To the extent that profit is available in the Company, the
Board of Directors may with the approval of the General
Meeting resolve upon payment of an interim-dividend on
account of the dividend to be expected, provided always that
the provisions laid down in paragraph 1, sub-paragraph a.,
of this Article have been satisfied.
5. The General meeting may resolve upon (interim-) dividends
being wholly or partly distributed in a manner other than by
payment in cash.
6. The (interim-) dividend shall be made payable fourteen days
of it being declared; the General Meeting may when resolving
upon declaration of such dividend extend the period by a
term not exceeding two weeks.
7. Dividends which have not been collected within five years
after they became payable shall be forfeited for the benefit
of the Company.
GENERAL MEETING
---------------
Article 18
- ----------
The annual meeting shall be held within six months after the
close of the financial year and is called and convened for the
purpose of:
a. except in case extension has been granted for the drawing-up
of the annual accounts, considering the annual accounts and,
if prescribed by Statute, the annual report and the other
data and particulars within the meaning of Article 392 of
Book 2 of the (Dutch) Civil Code;
b. confirming the annual accounts, except in case extension has
been granted for the drawing-up of the annual accounts;
c. determination of the profit appropriation;
d. fixing the possible bonuses for the Directors;
e. designating the person meant in paragraph 3 of Article 15;
f. the doing of all such acts as are otherwise prescribed by
Statute.
Article 19
- ----------
1. The General meeting shall - within the limits set by Statute
and these Articles of Association - be vested with all such
powers as have not been conferred upon others.
2. The Board of Directors shall furnish the General Meeting
with all such information as demanded by it, unless a
weighty interest of the Company opposes thereto.
3. The General Meeting may appoint an expert, who shall
regularly examine and audit the books of account and/or
report to the Board of Directors on the annual accounts
drawn up by the Board of Directors.
4. In cases where such is prescribed by Statute, the General
meeting shall, without prejudice to the other statutory
provisions relating thereto, give a "registeraccountant"
(chartered accountant) or another expert within the meaning
of Article 393 of Book 2 of the (Dutch) Civil Code or an
organization, in which such experts are working together,
the instruction to examine and audit the annual accounts.
That expert shall report on his examination and audit to the
Board of Directors and shall lay down the result of his
examination and audit in a certificate.
5. Without prejudice to the statutory provisions, the General
Meeting shall at all times be empowered to revoke the
appointment mentioned in paragraph 3 of this Article and/or
to cancel and withdraw the instruction given in paragraph 4
of this Article.
Article 20
- ----------
1. General meetings shall be held whenever the shareholders
shall be called and convened for that purpose by the Board
of Directors.
2. If one or more shareholders, together representing at least
one-tenth part of the issued capital, have requested the
Board of Directors in writing to call and convene a general
meeting, at the same time specifying the items of business
to be transacted thereat, and the Board of Directors has not
compiled with such request in such a way that the general
meeting can be held within six weeks of such requisition,
the requisitionists can be authorized by the President of
the District Court within whose jurisdiction the Company's
Registered Office according to its Articles of Association
is situate to call such meeting themselves.
Article 21
- ----------
1. General meetings shall be held in the municipality where the
Company's Registered Office according to its Articles of
Association is situate.
At a general meeting held elsewhere valid resolutions can be
taken, if the entire issued capital is represented.
2. The General Meeting itself shall choose its chairman.
3. The Chairman of the meeting shall designate a secretary, who
need not be shareholder, for taking minutes of the business
transacted thereat, which minutes shall be recorded in a
book therefor intended. Minutes shall be confirmed either
during the meeting or by a subsequent meeting, in witness
whereof they shall be signed by the Chairman and the
secretary of the meeting concerned. Minutes need not be
taken, if a notarial record is prepared of the business
transacted at the meeting. The costs incidental to such
notarial record shall be borne and paid by the Company,
unless the General Meeting has opposed the preparation of a
notarial record, in which case those costs shall be for the
account of the shareholders, who have made application for
the drawing-up of the notarial record, pro rata to the
nominal amount of the number of shares held by each of them.
4. At least fifteen day's previous notice of any general
meeting shall be given to the shareholders. The convening
notice shall, in addition to the place, date and hour of the
meeting, specify the items of business to be transacted.
5. Each share shall entitle the holder thereof to cast one
vote.
Valid votes may also be cast by person who in any capacity
other than as shareholder would by the resolution to be
taken granted any right as against the Company or who would
thereby be released from any obligation towards it.
6. Shareholders may cause themselves to be represented at any
meeting only by virtue of a written power of attorney, which
shall include a power of attorney by teleprinter message, by
telefax or by telegram.
7. All resolutions shall be taken by absolute majority of
votes, Blank votes shall be regarded as not having been
cast.
8. Votings concerning persons shall be by folded ballot-papers,
unless the General Meeting unanimously otherwise decides.
Ballot-papers shall be destroyed immediately after the
result of the voting has been made known. Votings
concerning things shall be oral, unless a shareholder
prefers a voting by ballot.
Article 22
- ----------
1. If a general meeting has been called and convened at a
period of notice shorter than the prescribed period of
notice or if such meeting is held without having given
notice thereof, then valid resolutions can be taken only by
a unanimous vote at a meeting, at which the entire issued
capital is represented.
2. If at a general meeting items of business are brought up for
discussion, which have not been announced in the convening
notice or in a supplemental convening notice with due
observance of the period of notice prescribed for the
calling of meetings, then valid resolutions can be taken
thereon only by a unanimous vote at a meeting, at which the
entire issued capital is represented.
THE TAKING OF RESOLUTIONS WITHOUT HOLDING A MEETING
---------------------------------------------------
Article 23
- ----------
1. The General meeting can also pass resolutions without
holding a meeting, provided always that any such resolution
is taken in writing, by teleprinter message, telefax or
telegram and, furthermore, by a unanimous vote of all the
voting shareholders.
2. Resolutions that have been passed without holding a meeting
shall - with the addition of the documents and writings
which may still appertain thereto - be recorded in the
relative minute-book and read out in the next following
meeting.
WINDING-UP
----------
Article 24
- ----------
1. If the Company is dissolved, its affairs shall be liquidated
by the Board of Directors, unless the General Meeting should
at the time of taking the resolution to dissolve the Company
otherwise resolve thereon.
2. During the liquidation proceedings the provisions of these
Articles of Association shall as far as possible continue in
force.
3. The balance on liquidation shall be distributed to all the
shareholders pro rate to the nominal value of the shares
held by each of them.
4. The books and records of the dissolved Company shall for a
period of thirty years after completion of the winding-up
remain in the custody of the persons to be designated for
that purpose by the General meeting.
FINALLY, THE APPEARER DECLARED AND SAID:
a. that the issued capital amounts to forty thousand guilders
(Dfl 40,000.--);
b. that the issued capital of the Company is held by the
founder, Household Global Funding Inc. as to four hundred
(400) shares;
subject to the requirement of those shares being paid up in
full;
c. that those shares have meanwhile been paid up in full and
that the Company accepts by this Deed the calls that have
been paid in money on the shares that have been subscribed
for;
d. that by the present Deed
David Dwayne Wesselink, residing at Northbrook, 1133 Western
Avenue, Illenois 600 62, United States of America, born at
Western City, Iowa, United States of America on the fifth
day of September one thousand nine hundred and forty-two and
of American nationality, has been appointed Director;
e. that the first financial year of the Company will end on the
thirty-first day of December one thousand nine hundred and
ninety;
f. that the ministerial Certificate of No Impediments was
issued on the fifteenth day of June one thousand nine
hundred and ninety, Ministry of Justice, Main Division
Private Law, number B.V. 383.748.
A declaration as referred to in paragraph 1 of Article 203A of
Book 2 of the (Dutch) Civil Code is attached to this Original.
The Appearer is known to me, the civil-law notary.
WHEREOF THE PRESENT DEED,
- ------------------------
the Original of which was executed at Rotterdam the day and year
first above written.
After the substance of the present Deed had been made known to
the Appearer, he declared that he had taken cognizance of the
full contents thereof and that he did not wish the same to be
read out to him in full.
Immediately after the present Deed had been read out in part, the
Appearer and I, the civil-law notary, thereunto appended our
several signatures.
(signed): F.E. Roos, M.G. van Ravesteyn.
A:\WP51\BVK-EX3A.WP
Exhibit 10(a)
This Loan Agreement is made on the 21st day of October 1993
B E T W E E N :
(1) HOUSEHOLD INTERNATIONAL NETHERLANDS B.V. of
("the Lender); and
(2) HFC BANK PLC of North Street, Winkfield, Windsor,
Berkshire SL4 4TD ("the Bank).
WHEREAS
The Lender is desirous of lending to the Bank a total sum of
US$125,000,000 upon the terms and conditions hereinafter
appearing.
It is hereby agreed as follows:
1. DEFINITIONS
-----------
In this Agreement unless the context otherwise requires:-
(a) "Business Day" means a day on which banks are open for
business in London and New York.
(b) "Loan" means the sum referred to in clause 2 or the
principal amount thereof from time to time outstanding.
(c) "Dollars" and "US$" means the lawful currency of the United
States of America.
(d) "Event of Default" shall the meaning specified in clause 12.
(e) Interest Period" in relation to the Loan shall have the
meaning specified in clause 4.
(f) "Maturity Date" shall mean 15th October 1998 or if such day
is not a Business Day, on the next succeeding Business Day,
unless otherwise agreed in writing by the parties hereto.
(g) "Taxes" includes all present and future income and other
taxes, levies, imposts, deductions, charges, compulsory
loans and withholdings whatsoever together with interest
thereon and penalties with respect thereto, if any, and any
payments made on or in respect thereof; and "Tax" shall be
construed accordingly.
(h) "Qualifying Bank" means a bank which is recognised by the
Inland Revenue as carrying on a bona fide banking business
in the United Kingdom for the purpose of Section 349 of the
Income and Corporation Taxes Act 1988.
All references herewith to Clauses are reference to clauses of
this Agreement.
2. AMOUNT OF LOAN
--------------
The maximum aggregate amount which may be borrowed under this
Agreement is One hundred and twenty five million Dollars
(US$125,000,000).
3. DRAWING OF LOAN
---------------
Subject to the terms and conditions of this Agreement, as from
the date hereof the Lender agrees to lend the Bank and the Bank
agrees to borrow from the Lender the Loan.
4. INTEREST PERIODS
----------------
(a) The duration of each Interest Period shall be six months or
such other period as may be nominated in writing by the
Bank from time to time.
(b) If any Interest Period would end on a day which is not a
Business Day such Interest Period shall be extended to the
next succeeding Business Day and interest shall be adjusted
accordingly.
(c) Save as is otherwise provided in this Clause 4, any Interest
Period which commences upon the last Business Day of a
calendar month or on a day for which there is no numerically
corresponding day in the calendar month in which that
Interest Period is to end shall end on the last Business Day
in that later calendar month.
5. INTEREST
--------
(1) Interest on the Loan shall accrue from day to day and be
calculated on the basis of a year of 360 days and the actual
number of days elapsed and shall be payable gross in arrears
on the last day of each Interest Period at a semi-annual
rate of 5.50%.
(2) The Lender's certificate as to each amount payable under
this Clause shall, in the absence of manifest error, be
conclusive evidence of each such amount.
6. TAXES
-----
(a) All sums payable by the Bank hereunder shall be paid without
set-off, counterclaim, withholding or deduction whatsoever
unless required by law, in which event the Bank shall pay
the net amount to the Lender, after the deduction of such
amount required by law.
(b) All Taxes in respect of this Agreement or in respect of any
amounts paid or payable hereunder shall be paid by the Bank
or as the case may be, the Lender when due and in any event
prior to the date on which penalties attach thereto. The
Bank will indemnify the Lender in respect of all such Taxes
in respect of amounts paid or payable by the Bank hereunder.
In addition, if any Taxes or amounts in respect thereof must
be deducted from any amounts payable or paid by the Bank
hereunder the Bank shall pay such additional amounts as may
be necessary to ensure that the Lender receives and is able
to retain on the due date a net amount equal to the full
amount which it would have received had payment not been
made subject to the deduction of such Tax. Notwithstanding
anything else contained in this paragraph nothing shall
oblige the Bank to make payment of or indemnify in respect
of an amount equal to Tax imposed on the income of the
Lender in the place where it is incorporated which is
calculated and levied by reference to its net income.
(c) If the Lender intends to make a claim pursuant to Clause
6(b) the Lender shall promptly notify the Bank of the event
by reason of which it is entitled to do so, giving the
reasons for such claim and setting out a calculation in
reasonable detail as to the amount claimed (such notice
being prima facie evidence of the amount in question).
(d) Within thirty days of each payment by the Bank hereunder of
Tax or in respect of Taxes, the Bank shall deliver to the
Lender evidence satisfactory to the Lender (including all
relevant original Tax receipts or certified copies thereof)
that such Tax has been duly remitted to the appropriate
authority.
(e) If following the imposition of any United Kingdom Tax upon
any payment by the Bank in consequence of which the Bank is
required to pay any additional amount under Clause 6(b) to
the Lender (and the Bank in fact pays such additional amount
when due and complies with its corresponding obligation
under clause 6(d)), the Lender shall, in its sole opinion
and based on its own interpretation of any relevant laws or
regulations, receive in relation to or in respect of such
additional amount, or the payment to which such additional
amount relates, the benefit of a credit against, or of a
remission for or a deduction from or in respect of, any such
Tax payable by it, or shall obtain the benefit of any other
relief in respect of the profits or income of the Lender
(any of the foregoing being referred to as a "saving"), the
Lender shall, to the extent that it can do so without
prejudice to the retention of the relevant saving and
subject to the Bank's obligation to repay such amount to the
Lender if the relevant saying is subsequently disallowed or
cancelled, reimburse the Bank with such amount as the
Lender shall in its sole opinion have concluded to be the
amount or value of the relevant saving. Nothing herein
contained shall interfere with the right of the Lender to
arrange its Tax affairs in whatsoever manner it thinks fit
and, in particular, the Lender shall not be under any
obligation to claim relief from its corporate profits or
similar Tax liability in respect to such Tax in priority to
any other claims, reliefs, credits or deductions available
to it.
7. PAYMENTS
--------
(a) If the Bank fails to pay any amount payable by it herein on
the due date therefor, the Bank shall on demand from time to
time pay to the Lender interest on such unpaid amount from
the due date therefor up to the date of actual payment (as
well after as before judgement) at such rate or rates as is
equal to the Lender's cost of funding such unpaid amount in
such manner and for such period or periods as the Lender may
from time to time select plus 1% (say, one per cent) per
annum. The Lender's certificate as to any such rate of
interest shall be conclusive, save in the case of manifest
error.
Interest accruing under this Clause 7(a) shall be compounded
upon the last day of each period selected by the Lender as
aforesaid. The Bank acknowledges that each such rate is
intended to compensate the Lender for any failure by the
Bank to pay any amount payable by it hereunder. Nothing
contained in this clause shall prejudice any of the Lender's
other rights under this Agreement.
(b) Save as provided in Clause 4(c) of this Agreement whenever
any payment hereunder shall become due on a day which is not
a Business Day, the due date therefor shall be extended to
the next succeeding Business Day.
8. REPAYMENT AND CANCELLATION
--------------------------
(1) Subject to the terms of this Agreement the Loan shall be
repaid in full and in one amount on the Maturity Date
together with all monies accrued due or owing to the Lender
hereunder on the Maturity Date in respect of the Loan.
(2) The Loan shall not be repaid otherwise than in accordance
with the terms of this Agreement.
(3) The Bank may with the agreement of the Lender prepay the
Loan or part thereof prior to the Maturity Date.
(4) On receipt of any amount prepaid in accordance with this
clause the Lender shall calculate the accrued interest
thereon, the amount of interest accruing on the Loan
thereafter and the amount of interest payable on the next
interest payment date and shall notify the Bank accordingly.
9. PAYMENTS
--------
(a) By the Lender
The Lender shall remit the Loan to such account of the Bank
as the Bank shall specify, before 3.00 p.m. (London time) in
immediately available London funds and may deduct therefrom
the Arrangement Fee payable by the Bank to the Lender in
accordance with the provisions of clause 16 hereof.
(b) By the Bank
On each date on which any sum is due from the Bank to the
Lender it shall remit that sum to such account of the Lender
as the Lender shall specify from time to time before 10.00
a.m. (London time) in immediately available funds.
(c) Non-Business Days
Any payment to be made by the Bank which would otherwise be
due on a non Business Day shall instead be due on the next
Business Day (and interest shall be adjusted accordingly).
(d) Currency
Dollars are the sole currency of account and for payment of
all sums payable hereunder.
10. REPAYMENT
---------
Notwithstanding anything contained in this Agreement, if any
law or regulation or any change therein or in the
interpretation or application thereof by any relevant
authority or Court shall make it unlawful for the Lender to
make, maintain or fund the Loan or to perform any of its
obligations hereunder the Lender may by written notice to
the Bank declare that the Loan and the Lender's obligations
hereunder shall be terminated forthwith, whereupon the Loan
and such obligations shall be so terminated and the Bank
shall repay to the Lender forthwith the Loan together with
all accrued interest thereon and all other monies (if any)
accrued due or owing hereunder.
11. REPRESENTATIONS AND WARRANTIES
------------------------------
(a) The Bank hereby represents and warrants to the Lender as of
the date hereof:-
(i) it has the power to enter into the obligations under
this Agreement and to utilise the Loan hereunder and
all necessary regulations binding on it or its Board of
Directors have been complied with in accepting the
Loan;
(ii) the utilisation by it of the Loan hereunder will not
constitute a breach of any existing law or regulation
binding on it or of Memorandum and Articles of
Association, and will not cause any borrowing limit
binding upon it to be exceeded;
(iii) this Agreement constitutes its valid and binding
obligation enforceable against it and its obligations
hereunder are and will be its direct, unconditional and
general obligations;
(iv) no Event of Default or other event which, with the
giving of notice and/or lapse of time, might constitute
an Event of Default has occurred and is continuing
unremedied;
(v) it is not engaged in any litigation, arbitration or
administrative proceeding, nor is any such litigation,
arbitration or administrative proceeding pending or
threatened against it, which in any such case might
have a material adverse effect on its ability to
perform its obligations hereunder.
(b) The Bank hereby represents and warrants that as of the date
hereof and as of each day on which the Loan is outstanding
that it is an authorised institution as defined in the
Banking Act 1987.
12. UNDERTAKINGS
------------
(a) The Bank hereby undertakes to the Lender that from the date
hereof and so long as any part of the Loan and any other
monies due or to become due hereunder shall be or remain
accrued due or owing, the Loan will rank at least pari passu
in right of repayment and in point of security with all its
other present and future unsubordinated unsecured
indebtedness (other than obligations preferred by law); and
(b) The Bank hereby undertakes to the Lender that it will for
the period of the Loan maintain its status as an authorised
institution as defined in the Banking Act 1987 or as a
similar institution regulated by the Banking Act 1987 (or
any statute which amends or replaces the Banking Act 1987).
13. EVENTS OF DEFAULT
-----------------
(a) Each of the following events shall be an Event of
Default:-
(i) if either the Bank shall fail to pay principal or
interest or any other sum due hereunder on the due
date for payment thereof and such failure shall
not if capable of remedy be remedied within 5
Business Days of such failure; or
(ii) if the Bank shall commit any breach of or omit to
observe any of its obligations or undertakings
contained in this Agreement which if capable of
remedy are not remedied within 30 Business Days of
the happening of such event; or
(iii) if any representation or warranty made or deemed
to be made by the Bank in or pursuant to this
Agreement is or would be if repeated at any time
hereafter with reference to the facts subsisting
at the time of such repetition, incorrect or
untrue in any material respect as at the date of
its being made, deemed to be made or repeated as
aforesaid; or
(iv) if the Bank ceases or threatens to cease to carry
on its business or is unable to pay its debts as
they fall due or if a petition is presented or if
any order is made or an effective resolution is
passed for its winding up, or a receiver is
appointed in respect of all or any part of its
undertaking, property or assets; or
(v) if a distress execution or other process is levied
or enforced on or against any of the Bank's
property or assets, or a judgment or order of any
Court is made against it for a sum considered by
the Lender to be material unless contested in good
faith;
(vi) if the Bank convenes a meeting of or enters or
proposes to enter into any arrangement or
composition for the benefit of its creditors; or
(vii) if any event or series of events (whether related
or not) occurs or any situation shall develop or
any legislation shall be enacted which would, in
the opinion of the Lender, entitle the Bank of
England to revoke the Bank's status as an
authorised institution under the Banking Act 1987;
or
(viii) if at any time Household International Inc. shall
cease to be the beneficial owner of at least 75%
of the issued share capital of the Bank;
(ix) if the Bank shall cease to be an authorised
institution as defined in the Banking Act 1987 (or
any statute which amends or replaces the banking
Act 1987); or
(x) if there is any change in the circumstances of the
Bank, which change would materially and adversely
affect the Bank's ability to perform its
obligations hereunder
and the Bank will notify the Lender forthwith in
writing of any occurrence of any Event of Default.
(b) The Lender shall be entitled at any time after the
happening of an Event of Default (whether or not the
Bank shall have given notice as aforesaid) by notice in
writing to the Bank to declare the Loan and all
interest accrued thereon and all other monies accrued
due or owing (whether actually or contingently)
pursuant to this Agreement to be immediately due and
payable whereupon the same shall become immediately due
and payable to the Lender.
14. INDEMNITY
---------
The Bank hereby agrees to keep the Lender indemnified from and
against all losses, costs and expenses which the Lender may incur
by reason of the occurrence of any Event of Default, including
(without limiting the foregoing) all reasonable expenses incurred
by the Lender in preserving and/or enforcing its rights
hereunder.
15. INFORMATION
-----------
(a) During the period of the Facility and whilst any amount
remains accrued, due or owing hereunder the Bank shall
provide to the Lender within 180 days of the close of its
financial year a copy of its audited Annual Report and
Accounts.
(b) The Bank also undertakes to provide promptly to the Lender
any other financial information that the Lender may from
time to time reasonably require.
16. ARRANGEMENT FEE
---------------
The Bank shall pay to the Lender on the date hereof an
Arrangement Fee in the sum specified in a letter signed by the
Bank and of even date herewith.
17. DELAY
-----
No delay of whatever length by the Lender in giving notice or
exercising any of the Lender's rights hereunder shall operate as
a waiver of any of such rights.
18. COUNTERPARTS
------------
This Agreement may be signed in any number of counterparts each
of which will be an original but all of which together shall
constitute one Agreement.
19. GOVERNING LAW
-------------
This Agreement shall be governed and construed in accordance with
the laws of England and shall be binding upon and enure for the
benefit of the successors of the parties but shall not be
assignable by the Lender (except to an affiliate of the Lender
provided that such affiliate shall enter into such further
agreement as the Bank or the Bank of England shall reasonably
require) or the Bank.
As witness the hand of the duly authorised representatives of
each party the day and year first before written.
For and on behalf of Household International Netherlands B.V.
/s/ Joseph W. Hoff
For and on behalf of HFC Bank plc
/s/ J. Piers Williamson
A:\BVK-EX10A.WP
EXHIBIT 12
HOUSEHOLD INTERNATIONAL NETHERLANDS B.V.
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(All dollar amounts are stated in millions.)
Year ended December 31 1993*
- -----------------------------------------------
Income from operations $ 48.1
- -----------------------------------------------
Income taxes 32.1
- -----------------------------------------------
Fixed charges:
Interest expense 1,405.6
- -----------------------------------------------
Total earnings as defined $1,485.8
===============================================
Ratio of earnings to fixed charges 1.06
===============================================
*Prior to 1993, the Company had no active operations;
consequently, the ratio of earnings to fixed charges for the
years 1990 through 1992 are not meaningful and have been omitted.
A:\WP51\BVK-EX12.WP
EXHIBIT 23
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
Household International Netherlands B.V.:
As independent public accountants, we hereby consent to the
incorporation of our report dated February 25, 1994, included in
this annual report on Form 10-K of Household International
Netherlands B.V. for the year ended December 31, 1993, into the
Company's previously filed Registration Statement No. 33-50351 on
Form S-3.
ARTHUR ANDERSEN & CO.
Chicago, Illinois,
March 31, 1994
